State of the Discussion

Banknotes stuffed in a mattress is looking better and better.

Works right up to the moment that serious debasement of the currency (aka inflation) sets in. Which, the idiots at the top of this administration being how they are, seems a distinct possibility.

Might be better to put your money into reconfiguring your back yard (if you have one) into a big vegetable garden.

As usual, the stock market is driven by competing motives: greed and fear.

Banknotes stuffed in a mattress is looking better and better.

Or perhaps Giant Stone Wheels.

And they survive by doing capitalism right. Not “right” as a lot of economists seem define it. They take care of their customers and they take care of their people. Without screwing over either in pursuit of a tiny fraction of a percent better numbers. And their executives don’t make tens (or hundreds) of thousands of times as much as their average employees.

I dunno, this sounds like that AI slop that I get all the time on facebook.

The CEO looked out the window and thought about his customers: all the athletes who actually cared about the planet they trained on. The company's mission statement, which prominently featured the word "sustainability," sounded like a cheap lie given the audit results. The boardroom fell silent waiting for his decision...

cf. Marx General Law of Capitalist Accumulation

Say rather that the Chinese are a lot better at it than enormous Silicon Valley firms.

Given that the so-called 'Magnificent 7' account for half of the NASDAQ, I think I can get away with calling it American capitalism. It's not like there are some tiny companies, hidden in the shadows, that are somehow 'doing capitalism right'.

This is a podcast I've been watching, it's a branch of Scott Galloway's podcast
https://youtu.be/K8b1An5Rpcs?si=z7cix2YBS4UDHNSf

China's lowcost open-source AI is suddenly everywhere in Silicon Valley. While the US is spending billions of dollars building ever bigger models and data centers and inflating what some analysts say looks like an AI bubble, China is doing the exact opposite, it seems. cutting prices, opting for open sourcing weights, and shipping models that are cheaper, lighter, and surprisingly competitive, and American companies are flocking to them. Airbnb CEO says his team ditched Chat GPT for Alibaba's Quen model because it's quote unquote fast and cheap. Venture firms are switching to Moonshot's Kimmy LLM, and developer data show nearly half of the most used models in the US last week were Chinese. Alibaba just slashed prices on its flagship model again as part of a full-blown AI price war and a sign that involution has come to Chinese AI.

What kills me is that this is basically capitalism 101 and the Chinese are proving to be a whole lot better at it that the US.

Side note from the AI front lines...:

I have in the past dealt with AI hallucinated sources, and with AI suggested secondary sources that were either inappropriate to the paper at hand, or that were misrepresented by the AI synopsis...

This week, however, marks the first time I have had a student submit a paper where the AI has hallucinated quotations for the primary source and made up a new plot for the story. And this is also the first time the student turning in an AI generated paper has not recognized that AI has made up shit about a story that they had supposedly annotated, and that we had discussed at length in class.

Meanwhile, several of the students are writing projects that worry over the effects of AI on the fields that they are currently studying to become a part of, fearing that their future jobs may be transformed into something unsustainable by the time they get out of college despite it seeming like a good choice when they started.

College is a much bigger investment and a much bigger risk for them than it was for us. The cost has exploded, and the state governments are happy to allow that to happen so long as they can pass that expense on to students in the form of loans.

It's impossible for them to make an informed decision. People like Mr. Pichai are telling them that in order to prepare for the future they will need to learn how to use AI, but they are also worried that using AI will prevent them from learning the skills they will need to be able to adapt in a changing world. Not an easy bind to resolve for a brain in its early twenties. They lack the experience needed to make good judgments about these things.

Josh Marshall thinks that the MBS/Khashoggi issue will play badly in the light of Vindman's intervention because it will demonstrate that Trump outright lied to the press and public in that oval office meeting. I hope he's right, but personally I doubt it. Trump's well established as an outright liar, and I can't see, even if the call were to prove that MSB conceded to him that he knew about the murder, that MAGA or Trump's base would give a damn. And it really looks like that's all that Trump cares about.

speaking of reckless prosecution:

During a hearing in federal court in VA, prosecutors confirmed that the operative indictment in the case against James Comey was never shown to or voted on by the entire grand jury before it was presented in open court.

Defense counsel argued that’s a complete bar to further prosecution

https://bsky.app/profile/did:plc:t4x2ruk2qmob2b2cx55h4v7r/post/3m5yoqty6k22w

DOJ straight up lied to the court about what the GJ said

Nvidia, of course, manufactures the chips preferred by AI data centers.

Nit-picking... Nvidia designs chips. All of their chips are fabricated by TSMC in Taiwan. Earlier this month Nvidia's CEO said publicly that he had asked TSMC to increase their 3nm fab capacity because of the volume of new orders Nvidia was receiving.

the software industry as a whole is all-in on AI (LLMs in particular).

makers are trying to stuff it into every nook and cranny they can find. from Adobe using it so Photoshop can produce image content for you on demand (instead of you needing to use stock photos), to phones using it to automatically manipulate your photos in real-time, to audio apps using it to handle routine things like sound mastering all the way to vocal generation, to programming environments using it to analyze and correct your code for you, to apps like the one i work on using it to take over 'help' and data search/analysis features ("how many tables in this library use address data?"). if there's a place a company thinks people will want to type their desires in natural language, they're trying to use AI to make it happen.

YouTube recently rolled out a feature where, if you are already a content producer, it will look at your channel and try to figure out what kind of content you make. then it will suggest a list of related topics for you to produce new videos on. if you pick one, it will give you a list of 'hooks' to use to make the video sizzle. it will give you detailed outlines for a script. and it has AI-generated thumbnails ready to choose from. and at every stage, you can use AI prompting to fine-tune the suggestions. it's literally doing everything but speaking. and i don't see any reason why they haven't automated that part, too.

so, the big players are definitely over-inflated. but the whole industry is using their products now.

From the BBC: Google boss says trillion-dollar AI investment boom has 'elements of irrationality'

In comments echoing those made by US Federal Reserve chairman Alan Greenspan in 1996, warning of "irrational exuberance" in the market well ahead of the dotcom crash, Mr Pichai said the industry can "overshoot" in investment cycles like this.

"We can look back at the internet right now. There was clearly a lot of excess investment, but none of us would question whether the internet was profound," he said.

In the middle part of the interview he muses about the huge energy costs of AI, only to conclude that new energy sources are going to be necessary to avoid constraining the economy. The environmental cost seems already to have been written off as a concern there. No doubt that will be taken care of automagically by the power of The Singularity.

As for the jobs thing:

AI will also affect work as we know it, Mr Pichai said, calling it "the most profound technology" humankind had worked on.

"We will have to work through societal disruptions," he said, adding that it would also "create new opportunities".

"It will evolve and transition certain jobs, and people will need to adapt," he said. Those who do adapt to AI "will do better".

So if it works it's going to suck up tons of energy and put people out of jobs, and the irrationality surrounding its growing pains will crash economies and ruin small investors and a lot of the less secure AI firms.

And once the survivors finally get AI off the ground we can look forward to them enshitifying it as thoroughly as they have the internet, which was probably at its best in the brief moment just before every idiot with an MBA and an in with a venture capitalist kicked off the boom with a fuzzy business plan and a dream of early retirement.

Lovely.

I've been reading about this for a little while. I already moved a good chunk of my retirement holdings from stock funds to bond and money-market funds. I was already up well enough and am getting closer to retirement, so it wasn't too radical a step.

Even without the bubble speculation, the indices were staring to make my spidey senses tingle. The AI-bubble stuff I've been reading just pushed me out of complacency.

Brighter minds than mine will surely chime in to explain why this is not a matter of concern.

I think what you mean is, more credulous minds than yours.

At current valuations AI would have to bring in $400 per year per US resident for the AI companies to produce a decent return on investment. Which isn't happening in the foreseeable future.

"Bubble" is exactly what we're looking at. The question is when, not whether, it will pop. And how big an impact that will have on the economy overall. Personally, I'm going nowhere near stock in any company which is big into AI. But then, I've been avoiding bitcoins like the plague, too.

Also treating this as an open thread: this is an piece from today's NYT, about the Tucker Carlson - Nick Fuentes interview and more importantly the Heritage Foundation's reaction, and on to Vance's response to so much of what has been happening around the tolerance of Nazi/fascist opinion among the right:

https://www.nytimes.com/2025/11/18/opinion/tucker-carlson-trump-groypers-fuentes.html?unlocked_article_code=1.2E8.dcFB.iS10t8lip43s&smid=url-share

The Larry Summers thing is interesting. First, he can go piss up a rope for all I care (or, as my mother used to say, "sh*t in his hat"). I have no interest in defending him. That said, in his communications with Epstein after Epstein's conviction for soliciting prostitution from a minor, he told Epstein he didn't want to be within a million miles of Donald Trump.

Because Summers worked for two Democratic presidents, was president of Harvard, and was a fellow at the Center for American Progress, he's easily associated with Democrats and "The Left." That likely will make him a target for Trump, the GOP, and MAGA.

The wrinkle is that he preferred associating with a known pedophile than with Donald Trump. That's not exactly flattering.

I understand that this is the first time the assigned DOJ attorney has ever done a prosecution.

Well, as I understand it, the reason she got assigned is that DOJ professionals looked at the case and concluded that there was nothing to it. So they declined to prosecute. The Attorney General had to find someone inexperienced enough (or foolish enough) to try to take the case forward.

Treating this as an open thread, because there always is one:

"the Court is finding that the government’s actions in this case – whether purposeful, reckless, or negligent – raise genuine issues of misconduct, are inextricably linked to the government’s grand jury presentation, and deserve to be fully explored by the defense."

This from the magistrate judge's findings in the Comey case. If it weren't a Trump-directed prosecution, my gob would be comprehensively smacked.