The Market Ticker ®
Commentary on The Capital Markets
Login or register to improve your experience
Main Navigation
Sarah's Resources You Should See
Full-Text Search & Archives
Leverage, the book
Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions. For investment, legal or other professional advice specific to your situation contact a licensed professional in your jurisdiction.

NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.

Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility; author(s) may have positions in securities or firms mentioned and have no duty to disclose same.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

The Market Ticker content may be sent unmodified to lawmakers via print or electronic means or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media, to republish full articles, or for any commercial use (which includes any site where advertising is displayed.)

Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must be complete (NOT a "pitch"), include full and correct contact information and be related to an economic or political matter of the day. Pitch emails missing the above will be silently deleted. All submissions become the property of The Market Ticker.

Considering sending spam? Read this first.

2023-06-07 07:27 by Karl Denninger
in Editorial , 206 references
[Comments enabled]  
Category thumbnail

Hmmmmm...

David Charles Grusch, a 36-year-old decorated former combat officer in Afghanistan, served the National Reconnaissance Office, acting as their representative to Congress’ Unidentified Aerial Phenomena Task Force from 2019-2021. At the National Geospatial-Intelligence Agency, he also served from late 2021 to July 2022 as co-lead of unidentified aerial phenomena (UAP) analysis and its representative to the task force, which was recently renamed the All Domain Anomaly Resolution Office.

The Debrief first reported Monday that Grusch said he filed a whistleblower complaint to Congress and the Intelligence Community Inspector General (ICIG) on classified information that he insists proves the recoveries of partial fragments through and up to intact vehicles have been made for decades through the present day by the U.S. government, its allies and defense contractors.

Really?

Oh, and...

"Well, naturally, when you recover something that’s either landed or crashed. Sometimes you encounter dead pilots and believe it or not, as fantastical as that sounds, it’s true." 

Well, no facesuckers -- thus far, right?

You do have to wonder.  But if this is true, and let's presume it is for a minute -- then you better be wondering about a lot of things.

First, if one got here then so can others.  And one of the first determinants is simply whether we're worth it.  That's a function of whether our blue ball as seen from "there" (or close enough to discern it is a blue ball) can support their life forms.

If it can we got trouble.

And not a little trouble either.

But let's apply a reasonableness filter to this.  How many military and government "things" exist .vs. how many not?  How is it that the 'recoveries' have all been government and all have been within this group?  What are the odds?

Just on the odds, I don't buy it.  Yet.

But if it is true then we better pay attention.  You see, we have serious problems if it is the case, not the least of which is that any such alien race would reasonably look at how and what we do and, well..... find us wanting.  And being possessed of technology we do not have, possibly including a reasonable means of travel at relativistic speeds, means if they come here and are rather unhappy with us we'll have big problems.

Likely existential level problems.

Now there's something to choke down with your morning coffee.....

PS: Nobody would ever try to slant things to make money, right? Just asking 'yanno....

View this entry with comments (opens new window)
 

2023-06-05 07:00 by Karl Denninger
in Protests , 497 references
[Comments enabled]  
Category thumbnail

Its simple when you get down to it:  Only two things work; terrorism and concerted and continual pressure.

One is of course rather illegal, but arguing it "doesn't work" is false.  It most-certainly does work.  Is the TSA gone 20+ years post-9/11 or do we have all the theater when attempting to board an airplane when in fact not one prohibited item was brought on any of those planes that day?  Was the intent of the terrorists to screw up air travel forever and ruin it?  Who knows -- but it sure did, and it's only gotten worse since.

Never mind the various mass-shooters (terrorists by any reasonable definition) who have stated their intent to stoke gun confiscation which nearly-always does indeed lead to attempted gun control laws: Several have stated exactly that in their "manifestos."

I rest my case.

But the other effective means of change is legal concerted and continual pressure.  Musk just found out about this when his so-called "no-censorship of legal speech" platform decided to censor "What is a Woman", a rather interesting film.

Musk attempted a mealy-mouthed half-answer which was not a refutation of the act at all, when you got down to it.

The people were having none of that and in fact upped their protest.

He dropped it and the person allegedly responsible "quit" (who knows if they actually quit or were fired) and then, in an act that actually made amends, he promoted it himself with a tweet.

How about Canada?  Trudeau thought he'd try to extend derivative punishment to those who were sending money to protesting truckers. What he got in response was the start of people pulling their money out of the banks and he quietly dropped it.  In fact that was beginning of the end of the crazy over the virus in Canada.

That's how you do it folks.

Its the only way "protest" works and that path -- ruining someone's sales or other business prospects by withdrawing your business from them on a mass-basis and over time, not as a one-off but on a long-term or even permanent basis -- is both peaceful and legal.

No firm can pander to 0.5% of the population while angering any material percentage of the rest.  Its stupid to do it in the first place but many firms seem to think its not, or they have so-called "big investor groups" that pressure them to do so.  Never mind that such "pressure groups" are arguably committing racketeering; the simple reality is that while some investment group may issue all the demands it wants they don't buy the products and services so if the customers tell the business to pound sand they have no choice but to cut it out.

The same, by the way, applies to things like mandates.

Maybe all the lockdowns and such really did teach people a few things......

View this entry with comments (opens new window)
 

2023-06-04 08:35 by Karl Denninger
in POTD , 113 references
 

 

View this entry with comments (opens new window)
 



2023-06-04 08:29 by Karl Denninger
in Technology , 372 references
[Comments enabled]  

So having now been part of a keynote panel discussion on AI Ethics, which I found quite interesting and thought-provoking (and I hope I widened some perspectives among attendees) I'd like to put forward and amplify a few points I've made in the past.

There are a lot of people predicting "the end of humanity" with AI.  Meh.

There is a fundamental misunderstanding in how a brain works and how a computer works: They do not map on top of one another, and the latter is likely to be unable to map to the former.

Contemplate this next time you're in your car driving.

Look at the vehicle in front of you and read its license plate.  Easy, right?  Now, without moving your head or eyes, read the license plate or even the make and model of the vehicle on the left or right.  You can't.

That's maybe 10-15 degrees off-axis, but while you know a thing is there you have no central, focused vision there.

The "trees" you "see" in detail while driving you do not actually see.  Your brain extrapolates what it knows is a tree into the "details" you "see" but you are not actually seeing them at the time.  If you have a dashcam in that car every frame has the entire field of view in focus and instantly readable.

Yet despite what is clearly and objectively wildly superior visual acuity to a human if you hook a computer into that (and one pointing out the back or in the place of your mirrors) no computer has demonstrated the ability to safely operate said vehicle and is not sold as safe to do so; thus you can't climb into the back seat with a six pack and drink it while the car drives itself to your destination.

Musk promised he could.  He was wrong.

Again: The machine has much better data available to it visually than you do, yet you outperform it easily.

Why?

Because what you think is easy is almost (or maybe entirely) impossible for a machine, yet what you think you "know" yet are almost always wrong about is trivially easy for a computer.  For example, your odds of being killed in a car wreck is about 1 in 8,000.  If you are in good health your odds of a recent viral outbreak killing you was much lower than this, yet you freaked out about that while driving to the grocery store every week without a care in the world.  (On the other hand if you were ill already your risk was wildly higher.)  If you stuck your medical conditions, if any, into a computer over the last three years it could have spit out an exact comparison -- and an accurate one -- within seconds as to whether the virus or getting groceries was more-dangerous.

This in turn means that trying to apply "human" views of how constraints will work and such to machines is very-likely to be at best ineffective and at worst backward, doing the opposite of what you think it will do!

How about impacts on the job market?

Well, if you're a "coder" and your skill set is picking up pieces from StackOverflow and assembling them -- you're screwed.  The machine is faster than you are, so your value is now whatever the machine costs to build and run.  But if you're someone like me -- who writes code I have no fear an AI can replicate -- then it likely boosts my capacity to demand a higher hourly rate!

Why?

Because as I need to check an API set of calls and such it takes me a couple of minutes to scroll through the particular document and such.  The AI can do that in 10 seconds, which means I write more code in less time and that in turn means that where I might have charged someone $500/hr to do work for them its now $600 because I produce more in less time.

If we can pry open the data sets then democratization of AI, which will happen as the chipsets get better and the required storage for the training set shrinks as a consequence it will become increasingly impossible for various bad actors to hide the evidence of their actions.  Someone -- basically any someone, no matter their personal skill level can suck that in and analyze it whether the bad guy likes it or not -- in seconds or minutes.  Oops.

Contemplate the last three years.  Now contemplate what happens if AI is on millions of people's desktop computers.  I found papers from a nursing home in Spain and a palliative care hospital in North Carolina.  Both were extraordinarily important and both got zero attention from those in the "formal establishment."  Never mind the pre-prints in September and December of 2020 on the spike protein.  All were out there in time to make a difference but until people found them they were irrelevant and not enough people found them and could raise a stink.  With thousands of AIs tasked to scanning the medical paper databases on a daily basis they would have been found instantly when published and analyzed rapidly by thousands of people rather than being manually analyzed by a few such as myself, in some cases months later.  The outcome would have been wildly different -- and better -- than it was.

Once democratization happens that sort of "hide the football" game ends whether the so-called "powers that be" like it or not.

This is true even if data access doesn't get easier -- and it probably won't, at least not voluntarily.  For example how come de-identified data from CMS isn't public?  We do pay for it via our taxes so why can't we see it?  No names and there's a high enough density that identifying individual people would be basically impossible, particularly if you remove facility names and addresses or even general locations.  But we sure could figure out if there was a correlation between "things one is given medically" and "bad things that happen as evidenced by diagnoses after the things are given" couldn't we?  Indeed.  This would be a large task for a human to do by sucking said data into a traditional database and then manipulating it.  For an AI it would take minutes.  When said AI costs nothing and runs on everyone's desktop now the battle becomes singular: Get the data and you got the answer.

Democratization will happen simply because that's what technology does over time.  Cars used to be an "elite" thing.  Then Henry Ford showed up and... oops.  Now every Jack could have and drive one.  How about calculators?  When I was young my father had one of the Monroe "portable" ones -- the first common one with a battery.  It wasn't long before you could get them for a couple of bucks.  How about computers?  They were expensive.  Today they're laughably cheap on a comparable-capability basis.  This will happen with AI and as it does the hiding of analytical processes from ordinary people will become increasingly impossible.

So what was that about AI being "bad" in the general sense?

Remember folks, for every "ying" there is almost-always a "yang."

View this entry with comments (opens new window)
 

2023-06-03 07:00 by Karl Denninger
in Macro Factors , 525 references
[Comments enabled]  

If you ever wanted more evidence that the so-called "inflation index" (CPI) was rigged to the degree that it is an outright fraud you need only look around.

I've known and pointed this out, particularly where it comes from in the methodology.  The crazy train of "Owners Equivalent Rent" is one of the largest elements of it, yet not the only one.

But recent travel underlined it in bold print when I went back to my "old stomping grounds" for a few days.

First, lodging was up some 40% over equivalent week blocks and of course the county bed tax is on top of that as a percentage, so the area is "flush" with plenty of tourism development money.  In fact they're so flush they don't have allocations for it.  Gee, go figure, given that the base price on which the tax is charged has gone up 40% and thus so has the tax.

Next up one of the arguably-best places to go get a steak or other good food in the area, not a chain, had massive increases in menu prices.  I was blown away at the changes.  What also struck me instantly was that virtually the entire wait staff were clearly not locals as they had been for the entire 20 years I lived there and the first couple of the pandemic; they were likely all J-1 visa folks.  The service was on-point and so was the quality of the food -- but the price, well...... what was a $70 experience was north of $100 and then to top it off the local city had taken what were $1/hr municipal parking lots and turned them into $15/flat rate for the day which utterly screws anyone coming into there who just wants to get a couple of beers or dinner.  That is an effective 15% city tax on top of your dining bill and sales tax for two and if you just wanted to come get a couple of beers the total price has now doubled.  That is likely enough to shut it off -- if not immediately, when people start thinking about it, and they will.

The thing about it is that thus far people are paying the ask as the place was jammed to the rafters.  Now to be fair it usually is -- its known to be the place to go for a good experience, excellent food and on-point service, all of which is still delivered.  But at what price?

The local really good coffee shop that used to have nice double-shots of Espresso for $3 now wants $4.  That's a 33% increase.  In less than two years.  Yes, the coffee there is very good as they know what they're doing.  But the price.... well...

Of course there isn't any reason for any of the parties involved in this to back off from it since they're still getting the business.

For now.

Last night a place that I really like managed to trip my "nope!" marker for what they wanted for a single beer.  I bought one -- but it is unlikely I'll go there very often at all.  Yes, I have it, but that's not the point -- once you start to approach where I can buy a four or six-pack of craft beer in the grocery store for a single pint glass with a reasonable tip you're in the danger zone, and they got there.

Will this "hold" or break the consumer?  I don't know; for right now it appears to be holding.  But I'm skeptical that it can and will continue for long as it is absolutely clear that the labor force is not being compensated at anywhere near that rate of increase.  The shift away from nearly-all local help to J-1s was in your face glaring and instantly obvious to someone who had patronized this establishment for twenty years, and those folks are probably ok with being crammed 10 to a one-bedroom apartment and sleeping on cots.  The local residents can't afford to live there on that sort of wage and thus they get "outcompeted" by the J-1s -- which of course we cheer on as "legal immigration" and "guest workers" while ignoring the fact that this means those former workers, and others in the same skill category, can't afford to dine or drink there anymore either.

Narrowing your customer base like this by pricing out the local residents eventually kills you.  Not immediately to be sure, and of course the "success stories" will breed copycats with the same sort of extortionate pricing.

It is what it is in America today, of course -- but I think we should be paying attention to this in terms of trends and what we can expect in the coming months and years.  None of it, from where I sit, looks good at all on a macro economic level a year or two down the road.

View this entry with comments (opens new window)