... pay attention to the markets.

Specifically, let me remind you once again that when it comes to technology generally I've got a better handle on how this tends to go over the space of years and more than most, because I ran an Internet company (MCSNet) when there was only a nascent thing called the Internet, starting with character-based terminals (remember VT220s and their emulators?) through the introduction of NCSA Mosaic along with Win95 and Explorer.

Whistle-whistle-beep-beep-beep on your phone line.  Yeah, that.

And before that, MCS (Macro Computer Solutions Inc.) was a company that ran data wiring, did some custom programming and sold PCs to businesses in Chicagoland, with our specialty being that I was very good at finding system configurations and specific boards (particularly disk and controller combinations) that were wildly (sometimes 2x or more) faster than the others on the market, and thus we could be either better or faster -- and sometimes cheaper too.

The point is that nobody kept that advantage for very long before someone else took it away from them.  That's the game in tech -- figure out who's in front, shift there, spend less money and get more done.  It has never been different in my forty years in this area of the economy and I never expect that to change, because I've never seen a single incidence of it occurring.

Not in televisions, personal computers, even washers and dryers.

Except...... where government conspires with various people to make things more expensive -- like cars.  Airbags anyone?  Do they save your butt?  Sure, they can, but do they provide much better protection than a seat and shoulder-belt?  Not really, if the seatbelt is on.  If its not well then the seatbelt provides nothing and the airbag provides something so, yeah.  Then the government mandated all cars have airbags and if one goes off most of the time the vehicle is totaled because of the repair cost to replace it, the trim it destroys when it discharges and the associated electronics.  This has wildly increased the cost of crashes, of course.  So has the push for all these "nannies" (e.g. lane departure, etc.) despite a lack of evidence that they actually prevent crashes in the first place and on balance make the entire experience of owning a car, including the costs of crashes and injuries, cheaper.  How do I know this?  Because if the total cost was cheaper your insurance cost would be dropping like a stone, and it is going the other way -- rapidly.

Nonetheless the current rage is "AI."  Except.... how's that going to be paid for, and by the way, who thinks if there is such a huge margin in selling those chips other people will not come after Nvidia and try to knock them off?  There's an age-old truth in business which is that once you cross the 10% operating margin threshold you attract competitors; below that someone may leave you alone because its simply not worth the cost and risk to take you on unless someone figures out how to do what you do at a lower price (and thus would have a better margin.)  But once you crest that 10% operating margin threshold it becomes worth it to shoot at you and thus people will -- in size.

This, even among profitable businesses, is why the outsized margins firms appear to be able to make are not sustainable.  Nvidia claims a 53% margin; that's five times what is necessary to entice people to come after them and they will, competing on price, output-per-input (e.g. power, cooling, etc.) or both.  Some people look at price/sales and that's a decent attribute to examine as well (and is in nose-bleed territory) but you can't argue over the fact that at this sort of operating margin you have to believe they're five times better than competitors, either current or potential.

Nobody is that good for very long.

That's not a prediction that the firm will fail -- that is, that its a zero.  It is, however, a statement that even if they are and can continue to be more than two times as good as their best competitor the stock trades $50, not $122.

And that presumes that as technology improves there will be no margin compression among chips for this purpose which has never occurred in the history of technology either.  If there is margin compression then it's not $50 -- its likely $20 or $25!

Examples of margin compression?  Where would you like to look?  Your cellphone has more computing power than a mainframe of a few decades ago, real processing throughput is doubling every couple of years while power consumption per unit of computing is down by half or more, for starters.  Most people don't think of the power consumption angle but you should for large-scale technology because it makes older devices uneconomic to simply turn on and use as the differential in cost for power, cooling and space over a year's time or less means you could literally buy the newer one and save money.  If you don't and the other guy you're competing with does (and he will) you're going to get run over.

Nevermind that all of this presumes there's a revenue model for this "whiz-bang" stuff.  Is there?  Who's generating revenue right now from it?  That was the thing back in the 1990s -- there was a revenue model and thus I could (and did) write a business plan with pro-forma P&Ls and income statements that had as their primary unknown market penetration, but most-certainly did not include whether anyone would pay for what we were doing at all.  I was, at that point, already selling real service to real people and collecting real money for it.  Yes, we and everyone else were spending on expansion and so were the all the suppliers but the final demand businesses for all that "stuff" were selling goods and services to real customers and collecting revenues.

Has anyone showed up with a revenue stream for these allegedly "wonderous" things or is all of it "on the come" that "oh we'll replace all these people" (but nobody has replaced anyone beyond what Amazon and other firms with their "chatbot customer service" has as of yet) never mind the pie-in-the-sky claims like "full-self-driving" cars and "you won't have to pay a programmer to write code anymore"?

By the way we were promised fully self-driving autonomous, personally-owned vehicles "in a couple of years" about ten years ago -- in 2013, in fact, by Elon Musk himself who said his vehicles would be able to do ninety percent of the miles you'd want to drive without a driver in just three year's time.  In 2014 he moved the time-line up to the end of the year.  Well?  Read the rest of that story -- all accurate, by the way.

Might some of those prognostications eventually prove up?  Sure -- but at what revenue numbers, and will it pencil out?  Nobody knows. There's a hell of a lot of money being thrown around on what looks to this guy, with 40 years of experience in the tech business, a lot like the sort of dreaming that someone who's stoned on too much of their own supply might engage in.

How many people got behind the 8-ball believing that the Airbnb craze here would never change and the demand and pricing picture of 2021 would be maintained?  Lots.  How many of them are sitting on a cabin or three today that went from a ten cap to a five and, by the way, Treasuries pay 5.25% with no risk, reserve or sinking fund requirements?  Oops.  Now if that was a 1031 exchange for cash with no debt out of California or something then all is not lost but if you're leveraged on that and demand comes down further due to a recession you are now cash flow negative and cooked.

Rotsa-ruck bouys and gurls.

Cheap money makes everything look profitable because there is a hidden payment to you in the borrowing of the money that most people do not account for or subtract back out.  They either don't understand it or lie to themselves that its not there when they know it is.  If that's a fixed-rate loan and you can't be forced out by circumstances then someone else is the sucker because they agreed to pay you literally for nothing and that sucks to be them, but do remember that the impact on the economy as a whole is still there when the bubble game ends and rates increase to above the actual rate of inflation which is the sum of both the government's fiscal deficit as a percentage of GDP and private credit creation because nobody can spend a given dollar twice -- so while you don't get shorted in spending power in the economy they do and it is everyone's buying power in the economy  which actually gets spent and that, of course, is the definition of GDP.

Those who think rates will never go back to a positive real return are wagering that trees will grow to the sky.  No they won't -- because they can't.

I do not know precisely when that turn will come.  Top-ticking the market is a rube's game -- in my years in the market I managed to get real close once, but never actually top-ticked a trade.  But its far better to take the money off the table and be early than to be biting your fingernails as what you had on paper as gains evaporates and so do your future plans.

I'm already seeing plenty of cracks in the armor.  Its not even -- it never is -- across places in the country or lines of business, but the desperation is palpable in certain areas even today, with "deals" being offered and services squeezed with an attempt to coerce spending you would otherwise not engage in.  Most of you have seen behavior by merchants and various suppliers of this kind, whether in the consumer of business space over the last few months -- I've seen multiple examples, and get reports of more every day.  This is picking up speed at a fairly rapid rate and I expect it to accelerate further through the summer and into the early fall.

Somewhere along that line people are going to ask the obvious question: If everything is so wonderful why the pressure and why the continued ratchet job?

The hour is late at this party, the booze has been flowing since 7:00 in size, I smell smoke and it appears to be coming from over in that corner of the room....  

Why yes, yes it is...

Total nonfarm payroll employment increased by 206,000 in June, and the unemployment rate changed little at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in government, health care, social assistance, and construction.

Changed little eh?  Well, looking at the chart it would appear that it "changed little" but in one direction for the last, oh, year or so -- and that direction would be upward.  They do say that, to their credit, a couple of paragraphs down.

The unadjusted household numbers have some curious data found within the "not-knob-twisted" columns.  Specifically, the unadjusted job count was up 433,000 but the "couch surfing" number, not-in-labor-force figure, was down by 1.241 million.  Also interesting was that the looking for work (e.g. actively seeking a job) figure in the same table of the household survey was down from 6.259 million to 5.655 and on that basis the unemployment rate wasn't up one tick, it went from 3.7 to 4.3%.

I usually caution on June in this regard because we graduate people from High School during that month, but the educational attainment table appears to show that this year the sample week that overlapped graduation for the most part was in May.  That does happen from time to time, so this leads to plenty of questions when it comes to attempting to square the official figures with the other official figures from the household survey on an unadjusted basis.

The other piece of data worth paying attention to, in my opinion, is that hourly checks annualized were up 3% where per-hour compensation was up 3.5 annualized, which implies (across the economy) that hours are being cut.  Within the detail on that data was a quite-large increase in construction so if you back that out it looks markedly soft last month rather than "just a bit", but of course construction is part of the economy and does count.

Another data point that says "people are getting squeezed" is found in the labor participation rate for those over 65 -- in the last year its up 0.4% and while the total is quite small (about a third of >65 year olds are working, totaling roughly 11.5 million) other figures for participation rate are not so clear.  Specifically, among both men and women who are not disabled the participation rate is nearly-fiat where among those who are disabled for men participation rose while among women it declined, yet among the >65 disability appears to be becoming more-progressive in terms of limiting activity -- and those who aren't are remaining within the workforce in larger numbers.  This begs the obvious question as to whether that participation is voluntary or occurring due to mandatory economic factors (eating is fundamental, after all.)

I wouldn't call this report "soft" but I would also not call it "robust."  For those looking at it as a pointer of potential rate changes I wouldn't get my hopes up based on this number; IMHO there's nothing in this report that points in either direction.

First one to cause all manner of complaint is on when the Statute of Limitations runs:

Held: An APA claim does not accrue for purposes of §2401(a)’s 6-year statute of limitations until the plaintiff is injured by final agency action. Pp. 4–23.

Perfectly logical and reasonable considering that the Anti-Injunction Act similarly constrains filing before you get hosed.  In other words no, agencies and other entities of the government don't get to craft things so you can't file at all.  If you can't file a case for injunctive relief before you're injured then the Statute of Limitations may not start to run until that injury takes place.

There are plenty of leftists screaming about this but the Constitutional principle is clear: If Congress constrains you from suing to obtain relief when a law or rule is passed until you get actually screwed then the clock on the Statute of Limitations does not start to run until you get actually screwed.

Nothing else would be logical at all and to hold otherwise would be to allow the government to craft a regulatory structure and then deliberately not bring enforcement until the Statute of Limitations had run, then hose you with the clear intent to deny you any capacity for lawful relief.  Of course the three left-side Justices all argued that its perfectly fine for agencies to deliberately act in such a fashion as to deny any lawful means of relief.  Fortunately they are in the minority.

Now on to the Social Media First Amendment case:

In 2021, Florida and Texas enacted statutes regulating large social-media companies and other internet platforms. The States’ laws differ in the entities they cover and the activities they limit. But both curtail the platforms’ capacity to engage in content moderation—to filter, prioritize, and label the varied third-party messages, videos, and other content their users wish to post. Both laws also include individualized explanation provisions, requiring a platform to give reasons to a user if it removes or alters her posts.

One key item is the requirement in both laws that a platform identify exactly what it objects to.  As things stand now this is not the case -- I and others have articles flagged as "dangerous or derogatory", for example, but no indication of what the platform considers to be that.  It could be a literal single word that caused them to do this (and thus very easy for the person to edit or remove it, thereby voiding the complaint) but there is no obligation for the site owner to do that, and typically they refuse to do it even under challenge.

Held: The judgments are vacated, and the cases are remanded, because neither the Eleventh Circuit nor the Fifth Circuit conducted a proper analysis of the facial First Amendment challenges to Florida and Texas laws regulating large internet platforms. Pp. 9–31. 

Well, let's look at this.  NetChoice made a decision to go after this on a facial challenge, in that those are very difficult to win because they must show that a subtantial number of the applications are unconstitutional, not that one, or a few are.  This is difficult -- but that was the decision they made, and they reason they made it was that they weren't interested in a narrow decision that applied only to their speech and conduct but rather to the policy as a whole.

The problem is that the courts never reached the proper set of analysis.  For example, as the judgement holds, they never looked at what is the scope of the law?  Does it, for example, permit Facebook to go into someone's private email box or X's "DMs" and police them either retrospectively or prospectively, taking enforcement action against the account holder, or is it limited to "public" postings.  If the latter, where is the line if, for example, the posting is in a "members-only" group that both sites have (e.g. "Subscribers" or on Facebook, "groups") or in the general, "everyone can see it" timeline areas?

Then the question, once you've looked at the decided the scope, is to then analyze whether the platform's editorial discretion, which they do have in every case to some degree (1) exists in that instance and (2) is impacted.

The Court has ruled on these things before; Miami Herald is one case they cite of several I remember.  Specifically, the question turns on whether the party being sued engages in its own expression and, if so, whether barring their discretion would alter or disrupt that expression.  This gets interesting in the case of social media in that it runs up against their claims as to who and what they are, and that was not disposed of.  A site that claims to be "a free speech forum" or a "town square", either explicitly or via their own labeling internally or otherwise has a problem in that the common definition of such controls and thus they are disavowing their own expression in favor of that which their users wish to put forward.  Having done that they would likely lose this analysis but it was never explored and decided.

The judgement was voided and remanded because Texas, in particular, was unabashed as to its intent with the law they passed and did not seek to separate these functions.  That was a decision they made when they crafted the legislation and as such they stepped over the line.  They could have chosen otherwise and likely had a survival bias at the court, and may come back for another bite at it -- and in my opinion should.

But they have to clear that threshold rather than simply stomp on the First Amendment.

The last is of course Trump's Immunity Claim.

From the oral argument that I listened to this is basically what I expected them to do and it once again fits squarely within precedent and reason.

Unsurprisingly the ruling finds that in part the indictment was Constitutionally impermissible and void; I'll add that it also, although unstated directly, colors between the lines and alleges deliberate malfeasance by the current Justice Department.  Specifically:

The Executive Branch has “exclusive authority and absolute discretion” to decide which crimes to investigate and prosecute, including with respect to allegations of election crime. Nixon, 418 U. S., at 693. And the President’s “management of the Executive Branch” requires him to have “unrestricted power to remove the most important of his subordinates”—such as the Attorney General—“in their most important duties.” Fitzgerald, 457 U. S., at 750. The indictment’s allegations that the requested investigations were shams or proposed for an improper purpose do not divest the President of exclusive authority over the  investigative and prosecutorial functions of the Justice Department and its officials. Because the President cannot be prosecuted for conduct within his exclusive constitutional authority, Trump is absolutely immune from prosecution for the alleged conduct involving his discussions with Justice Department officials. Pp. 19–21.

Why do I say that the Supremes basically indicted the DOJ for abuse of power and knowing misconduct?  That paragraph makes clear that the DOJ knows damn well that the Executive has an unrestricted right of discussion and debate with Executive Branch officials including the right to fire them.

Congress can impeach a President for this but the DOJ cannot prosecute as such is clearly within the realm of the President's exclusive authority and right to control the Executive Branch.  No law can impair that and no criminal penalty can attach to it.

Similarly the same applies to Trump's discussions with his VP; as the head of the Executive he is absolutely privileged in such discussions.  However, this does not necessarily extend to the acts but he does have presumptive immunity.  In other words the DOJ would have to show actual, knowing misconduct, that is official corruption, to pierce that immunity.  This, by the way, is exactly the same standard under which Obama, who droned civilians "by accident" is immune.  In order to prosecute Obama for that a finding would have to pass judicial muster (in open court) that the act was officially corrupt -- for example, that he knowingly fired on uninvolved civilians.  He is presumptively immune as the CiC from an act taken with reasonable expectation that it falls within his powers as Commander in Chief to direct the armed forces, but that immunity is not absolute as a showing of actual corruption would pierce it.

As to the actions to "find votes" (as alleged) the court did not issue a fact-based finding on whether those were official acts or not.  The acts of a candidate for office have no immunity; that person is a private citizen in that regard.  But to the extent that the acts were of a character of protecting the franchise and administering justice, which is an Executive function, they too are privileged.  Thus the remand to make that determination.

Likewise whether Trump's January 6th speech constitutes protected official conduct and if in part but not in other part which parts are in which bucket must pass a fact-based analysis which the Justice Department summarily decided on its own.  It is not empowered to do that unilaterally; again, the case is remanded for proceedings and said fact-based analysis in open court on that point.

(e) This case poses a question of lasting significance: When may a former President be prosecuted for official acts taken during his Presidency? In answering that question, unlike the political branches and the public at large, the Court cannot afford to fixate exclusively, or even primarily, on present exigencies. Enduring separation of powers principles guide our decision in this case. The President enjoys no immunity for his unofficial acts, and not everything the President does is official. The President is not above the law. But under our system of separated powers, the President may not be prosecuted for exercising his core constitutional powers, and he is entitled to at least presumptive immunity from prosecution for his official acts. That immunity applies equally to all occupants of the Oval Office. Pp. 41–43.

91 F. 4th 1173, vacated and remanded.

Yep, and IMHO properly so.

BTW Sotomayor's "dissent" in this case?  She's demonstrably unfit and should be impeached as she either can't read or is prone to histrionics unfitting an Associate Justice or for that matter any judge, on any court.  She claims that malice murder is immune under this decision when it is clearly not.  Under her standard Biden could and indeed must, right here and now, be personally prosecuted and upon conviction executed as an accessory before the fact for his willful blindness with regard to the El Salvador illegal immigrant, wanted in his home nation for murder, that his Executive Department released and who went on to, it is alleged, murder an American and who is now in jail awaiting trial on that charge as it was an official act from his office that led to that man's release into the United States despite him being wanted for murder in his home nation, an inquiry that DHS deliberately, as a matter of Executive policy, did not conduct and act upon.

Harrington .v. Purdue.

Recall that Purdue was the maker of Oxycontin which affiliates marketed as less addictive and less-abusable than other pain drugs.  Said affiliate ultimately pled guilty to misbranding.  That in turn led to thousands of lawsuits aimed at the parent company.  The controlling company, the Sacklers, implemented what amounted to an asset-stripping scheme to try to get something out of the company, fearing it (and all their income stream) might be destroyed in bankruptcy.

The company ultimately did file and, recently, there was a proposed settlement that, among other things, forbid anyone from suing the Sacklers, effectively granting them a release as part of the bankruptcy.

This was just blown up by the Supremes and correctly so.

Specifically:

Held: The bankruptcy code does not authorize a release and injunction that, as part of a plan of reorganization under Chapter 11, effectively seek to discharge claims against a nondebtor without the consent of affected claimants. Pp. 7–19.

(a) When a debtor files for bankruptcy, it “creates an estate” that includes virtually all the debtor’s assets. 11 U. S. C. §541(a). Under Chapter 11, the debtor must develop a reorganization plan governing the distribution of the estate’s assets and present it to the bankruptcy court for approval. §§1121, 1123, 1129, 1141. A bankruptcy court’s order confirming a reorganization plan “discharges the debtor” of certain pre-petition debts. §1141(d)(1)(A). In this case, the Sacklers have not filed for bankruptcy or placed all their assets on the table for distribution to creditors, yet they seek what essentially amounts to a discharge. No provision of the code authorizes that kind of relief. Pp. 7–17

Yep.

Without placing all of your assets under the effective control of the Bankruptcy Court as part of a bankrupt estate you cannot obtain relief from same.  This is both logical and has great implication on a forward basis for certain other firms that have sought to "hive off" potential risk to their balance sheets through the same sort of arrangements the Sacklers used.

Indeed this sort of structure has been used repeatedly in recent years.  What the Supremes found, correctly so in my opinion, is that structuring a business arrangement is fine but if you, as one of the parties to that arrangement, in some way acted in a form or fashion (whether explicitly or complicitly) and that results in harm, and the other entity gets sued you can't be released without the consent of the people harmed.

This may become rather, uh....... important in the next few years.