**** denotes well-worth reading in full at source (even if excerpted extensively here)
Economic and Market Fare:
...... While markets are said to abhor uncertainty, stocks these days seem to eat it up. It’s basically uncertainty on top of uncertainty. The world has never been so awash in speculative finance, ensuring aberrant market behavior. Never has the global leveraged speculating community been as colossal and powerful. Egregious Treasury “basis trade” leveraging drives unprecedented overall hedge fund leverage. Household (loving dip buying) market participation is unparalleled, with the proliferation of online accounts, options trading, and herd-like speculation creating extraordinary market-moving power.
Importantly, the current remarkable backdrop creates a uniquely potent “risk on/risk off” market dynamic. Case in point: From April 25th ‘24 lows to July 10th 24’ highs, the Bloomberg MAG7 Index surged 38%. From July 10th highs to August 5th ’24 lows, MAG7 dropped 22%. Then, from August 5th lows to December 18th highs, the index surged 51%. From December 18th highs to April 7th ’25 lows, MAG7 sank 33%. And from April 7th lows to Friday’s (June 6th) close, the index has rallied 35%. ............
It has been some time since I’ve provided detailed analysis of the Trump Tariff situation. Others are covering the details of the Tariffs themselves quite well. The best coverage of the tariff details comes (unsurprisingly) from Joey Politano. I especially recommend checking out this piece as well as last week’s piece on the car tariffs. As usual then, I want to cover the underdiscussed aspects of this drama. This starts where I left off, writing about how the tariffs were putting the financial system under intense stress. Volatility, as measured by the “VIX” index peaked April 8th, and has been declining ever since. My last commentary on this topic was in my interview with Paul Krugman published last month. In it, I focused in on the desperate desire of financial traders to “see past” Trump’s erratic and destructive behavior: .........
............ The highly motivated convention that has taken shape over the past month started solidifying with the Financial Times’ Robert Armstrong who coined TACO: Trump Always Chickens Out on May 2nd. This phrase has everything. It insults Trump, it's catchy and memorable, and it boils down a set of complex issues to its essentials. Wall Street has run with it. Hence why, despite everything that has happened, the S&P 500 is basically flat on the year. ............
Look, I’ll be honest.
It’s a bull market.
Get in and hold on.
It doesn’t need to be more complicated than that.
Will people overcomplicate it? Absolutely.
But do you have to?
Not at all.
Have exposure. Manage risk. That’s the job.
And this week was another reminder as even the weakest areas of the market woke up. ........
DB: The real story (via TheBondBeat)
As we await the US employment numbers, it is worth taking a step back. While everyone is focused on the impact of tariffs, the real story for the US economy is the collapse in immigration: down more than 90% compared to the run rate of previous years, equivalent to a slowing in labour force growth of more than 2 million people. This represents a far more sustained negative supply shock for the economy than tariffs. Last year we were writing that the US was benefitting from a goldilocks mix of high employment growth and low wages precisely because of high immigration numbers. If recent immigration trends continue, it must follow that over the course of the year the reverse will happen. As the 2022 energy shock showed, a negative supply shock is not good news for a currency.
Organisation slashes forecasts and says US will be hit particularly hard
................ US growth will slow particularly sharply, sliding from 2.8 per cent last year to just 1.6 per cent in 2025 and 1.5 per cent in 2026, while a bout of higher inflation will prevent the Federal Reserve from cutting rates this year, the OECD said.
The latest assessment represents a downgrade to its March interim forecasts, which preceded Trump’s “liberation day” tariff announcements on April 2. Even then, the OECD warned of a “significant toll” stemming from the levies and associated uncertainty over policy.
Trump has since partially climbed down on some duties, but the increase in the average US effective tariff rate is still “unprecedented”, from 2.5 per cent to above 15 per cent — the highest since the second world war, the OECD noted. ...........
.................. Fiscal risks are rising along with trade tensions, the OECD warned, with demands for more defence expenditure set to add to spending pressures.
“Historically elevated” equity valuations are increasing vulnerabilities to negative shocks in financial markets.
A long spell of weak investment has compounded the longer-term challenges facing OECD economies, and this is further sapping the growth outlook ............
Paulsen: A Pictorial of Fed Easing Pressures
Numerous market and economic indicators are suggesting the Fed should be continuing to ease interest rates. See the pictorial below.
For the first time in almost a generation, governments are starting to face regular resistance from investors when they try to sell long-term debt
Markets fear a new wave of volatility next month when a deadline for trade negotiations ends
Charts:
1:
(not just) for the ESG crowd:
North America, Asia and Europe will likely be pummeled by record heat and other weather extremes, including a potentially active hurricane season.
.............. Climate leadership demands not just ambition but continuity. The United States’ repeated pattern of engagement and disengagement from global climate frameworks damages its standing in ways that statements and summitry cannot easily undo. Many countries now view the United States as an unreliable partner. This loss of credibility undermines not only the United States’ diplomatic leverage but also the broader multilateral system, which depends on trust and predictability.
............... These ‘polycentric’ sources of climate action suggest that US leadership may shift from a top-down federal model to a more networked and decentralised form. This model not only cushions the blow of federal backsliding but can provide a level of continuity that Washington currently lacks. The polycentric approach offers a path for long-term engagement through coalitions of the willing — a bottom-up force that may keep the United States relevant even as its federal government disengages.
Yet in the arena of international diplomacy — where state-to-state trust is paramount — such subnational actions cannot fully substitute for coherent national leadership ............
The self-refuting concept behind small modular nuclear reactors
.... Despite the narrative set out by nuclear advocacy groups, so called “small modular reactors” (SMRs in short) are neither small, nor modular — let alone affordable or scalable. Even as the idea of building such power plants is gaining prominence among business leaders and government officials alike, the economics of the concept almost never gets a mention beyond a few superficial statements. Recently I came across a terrific interview with physicist and author M. V. Ramana, who after demolishing a number of myths around nuclear energy, finally mentioned the bogus economics behind building and operating such reactors.
......... Results show that heatwaves can alter parasite burden up to 13-fold, whereby amplitude, duration, and timing can interact with baseline temperature. Our results reveal complex interactions between heatwave attributes and baseline temperature, emphasising that heatwaves have context-dependent effects on parasite prevalence and proliferation. Additionally, when compared to other types of temperature variation (for example, cold snaps), heatwaves behave differently. While specific effects may vary across systems, these results demonstrate that interactions between heatwave attributes and baseline temperature can drive substantial variation in infection outcomes. These findings highlight the challenges and complexities involved in understanding and predicting how climate change and extreme weather events may influence disease dynamics in the context of global change .............
Trump 2.0.:
More than 50 high-level Trump administration officials have links to groups behind the Heritage Foundation-backed plan, a DeSmog analysis found.
One of the recurring symptoms of collapsing political systems, and indeed of whole crumbling civilizations, is the emergence of unusually incompetent leaders. Throughout history, these leaders have aspired to leadership of doomed societies because (a) they’re too stupid to realize the society is inevitably collapsing, (b) they are arrogant enough to believe they have the ‘solution’ to collapse, and/or (c) they are mentally ill and are seeking to exercise power as a means of exercising more control over their own lives and those they blame for their distress.
This was clearly true of the moronic Augustus Caesar, and it seems equally true of the equally dim-witted Donald Trump. The latter, the greatest business failure in civilization’s history and a man so traumatized by family abuse that he cannot put together a complete, coherent English sentence, is now replaying Augustus as the Klepto King.
Kleptocracy is one of three ways that those in power have historically dealt with the final stages of a societal collapse, the other two being autocracy and ideological extremism. Autocrats dismiss democratic principles and ideas and insist that they know better than anyone else how to deal with any crises. Ideological extremists likewise eschew ideas of democracy in exhorting the populace to have faith in some ideology that will provide a magical solution to the crises: the Rapture, or some technotopia, or some spontaneous global transformation of human consciousness, etc.
Kleptocrats, on the other hand, know full well that the jig is up. Their goal is to extract as much of the society’s declining wealth for themselves as possible as quickly as possible, before the whole thing falls apart, while hoodwinking the population into believing they’re doing things to help the people avenge those they blame for the collapse (those blamed being usually immigrants, supporters of ‘other’ ideologies, and ‘forces of evil’), rather than for their own personal enrichment.
Augustus Caesar was an autocrat. The death cult and religious cult leaders were mostly ideological extremists. Trump is a textbook kleptocrat. He’s so clueless that he’s even overtly branded his kleptocratic raiders (‘DOGE’, led by Musk, a world-class kleptocrat in his own right).
The Project 2025 playbook is essentially a textbook for dismantling the ship of state to allow the kleptocrats to extract the maximum amount of the state’s remaining wealth as possible for their private interests.
How did this come to pass this time around? A populace that has given up on its existing governing entities, because they have simply and obviously ceased to serve the best interests of the people, is prone, in anger or desperation, to turn to unusually incompetent leaders, either as a simple protest and act of rebellion against their dysfunctional government, or in the belief that anything must be better than the status quo, so they’ll give anyone who proffers a different solution to the crisis a try. ...............
Sometimes I wonder how the media would write about what's happening in the U.S. if it were just covered as the banana republic it's rapidly turning into.
— Arnaud Bertrand (@RnaudBertrand) June 6, 2025
It'd probably go something like this:
"Escalating Power Struggle Between Strongman and Key Oligarch Threatens Regime…
Geopolitical Fare:
Ukraine strikes Russia's nuclear triad
Trump and the Sources of U.S. Power
............ Joe Biden is a moron, as was his admin--a collection of war criminals and ignoramuses. In its present state the US, as represented by its "elites" is an existential enemy of Russia and Russian people. Trump admin is no different, just with its own twist and flavor. ..............
It’s about living in reality: ..................
............................................ In every single case the discourse had and has been seized by what people want to believe, or what oligarchs want people to believe: what pays, not what is true. There are no consequences for being wrong, and no self awareness.
.................. Now it isn’t entirely true that there’s no accountability in the West. There is. There is only one rule that the West insists always be followed:
A.I. Fare:
The rich must keep becoming richer, no matter the cost to anyone or anything else.
Because that is the only form of Western accountability, the West will keep losing, because richer rich and higher inequality do not cause or even correlate with any of the main constituents of power, prosperity or technological progress
Our entire discourse system, our entire media, and our entire elites have zero accountability except for making the rich, richer.
At this they have succeeded, and at nothing else.
........ Israel killed four journalists in an airstrike on a hospital the other day, and it caused barely a blip in the news cycle. It’s so crazy how this is just normal now.
... The behavior of the state of Israel is one nonstop argument against the continued existence of the state of Israel.
❖
Most Israel apologia is just saying ridiculous nonsense in an assertive tone and demanding to be taken seriously. They’re butchering children by the thousands in a completely undisguised effort to purge all Palestinians from a Palestinian territory, and then spouting a bunch of transparently bogus talking points to try and spin this as fine and normal. But because mainstream institutions solemnly promote this obvious bullshit, we’re expected to treat it like it’s a completely valid position that needs to be respected.
There’s no actual basis for the pro-genocide position in truth, logic, or morality. It’s a completely indefensible position, so self-evidently wrong that a child could recognize it at a glance. But because support for Israel is so entrenched within our political-media class, and because Israel’s supporters have a solid understanding of the power of narrative control, they are able to promote this nakedly evil agenda by sheer force of will — just by saying their talking points in confident-sounding voices. .........
How 75 years of settler-colonial logic reached its inevitable conclusion, and Netanyahu is not to blame
The convenient fiction that Benjamin Netanyahu is solely responsible for the Genocide in Gaza is crumbling, and what lies beneath is far more terrifying than any single man's malice. It is the revelation of an entire society that has, for decades, nurtured and normalized the dehumanization of Palestinians to such an extent that genocide has become not just permissible, but popular.
When 82% of Israelis support the forced expulsion of Palestinians from Gaza, we are not witnessing the machinations of one extremist leader. When 47% endorse the biblical slaughter of Jericho—where "all inhabitants" were killed—as a model for military action, we are staring into the abyss of collective moral collapse. When 56% want Palestinian citizens of Israel expelled from their own homeland, we are confronting the genocidal DNA of a settler-colonial project that has finally shed its liberal veneer.
The numbers, revealed in a Penn State University poll, are not anomalies. They are the logical culmination of 75 years of systematic dehumanization that began not with Netanyahu's rise to power, but with the founding of the state itself. This is not "Netanyahu's war"—it is Israel's genocide, and it has been decades in the making. ............
A.I. Fare:
This week, readers were given fresh insights from UBS (read: here & here), highlighting the explosive surge in data center investments. As we've noted before, one asset manager—backing a multi-billion-dollar AI data center project in Texas—described to us the current AI infrastructure buildout as a multi-year "sprint."
With hundreds of billions pouring into data center development—concentrated in Texas and the Heartland due to cheap land and reliable power—investors should be asking one critical question: how fast is AI adoption scaling across corporate America?
According to Goldman Sachs' latest AI Adoption Tracker for Q2 2025, the enterprise implementation of AI continues to expand, particularly across sectors most vulnerable to automation. At the same time, productivity gains are becoming more measurable, even as AI-related layoffs have yet to materialize. .........
Coming to a campus near you.
AI chatbots like OpenAI’s ChatGPT have been shown repeatedly to provide false information, hallucinate completely made-up sources and facts, and lead people astray with their confidently wrong answers to questions. For that reason, AI tools are viewed with skepticism by many educators. So, of course, OpenAI and its competitors are targeting colleges and pushing its services on students—concerns be damned. ...........
LLM “reasoning” is so cooked they turned my name into a verb
... Apple has a new paper; it’s pretty devastating to LLMs, a powerful followup to one from many of the same authors last year.
........ On the other hand it also echoes and amplifies a bunch of arguments that Arizona State University computer scientist Subbarao (Rao) Kambhampati has been making for a few years about so-called “chain of thought” and “reasoning models” and their “reasoning traces” being less than they are cracked up to be.
The AI arms race is moving too fast for safety, with companies pushing boundaries and governments lagging. AI-driven dehumanization and the unchecked proliferation of autonomous weapons require responsible leadership before it’s too late.
Sci Fare:
.......... In a new paper, published in Physical Review D, my colleagues and I propose a striking alternative. Our calculations suggest the Big Bang was not the start of everything, but rather the outcome of a gravitational crunch or collapse that formed a very massive black hole – followed by a bounce inside it.
This idea, which we call the black hole universe, offers a radically different view of cosmic origins, yet it is grounded entirely in known physics and observations.
Today's standard cosmological model, based on the Big Bang and cosmic inflation (the idea that the early Universe rapidly blew up in size), has been remarkably successful in explaining the structure and evolution of the Universe. But it comes at a price: it leaves some of the most fundamental questions unanswered.
For one, the Big Bang model begins with a singularity – a point of infinite density where the laws of physics break down. This is not just a technical glitch; it's a deep theoretical problem that suggests we don't really understand the beginning at all.
To explain the Universe's large-scale structure, physicists introduced a brief phase of rapid expansion into the early Universe called cosmic inflation, powered by an unknown field with strange properties. Later, to explain the accelerating expansion observed today, they added another "mysterious" component: dark energy.
In short, the standard model of cosmology works well – but only by introducing new ingredients we have never observed directly. Meanwhile, the most basic questions remain open: where did everything come from? Why did it begin this way? And why is the Universe so flat, smooth, and large?
Our new model tackles these questions from a different angle – by looking inward instead of outward. ...............
An international team of astronomers has detected a bizarre cosmic object that pulses with both radio waves and X-rays—something never seen before. Known as ASKAP J1832-0911, this “long-period transient” flashes every 44 minutes and could unveil entirely new physics or models of stellar life cycles.
Neuroscientists have long ignored the variability in animals’ behavioral responses in favor of studying differences across groups. But work on the brain differences that underlie that variability is beginning to pay off.
Other Fare:
Are medicine’s middlemen pharmacy parasites?
........... Schmidtknecht is far from alone in choosing to forgo a prohibitively expensive prescription. In recent polling by the Kaiser Family Foundation, 30 percent of Americans reported that they had not taken their medications as prescribed in the previous year due to cost. Other studies have estimated that more than 1.1 million Medicare patients will die over the next decade for the same reason.
They're buying the world, and ordinary people are paying the price—with their money, their health, their lives. At "SuperReturn International," the global clique of financial investors gathers for five days to observe the navel-gazing of predatory capitalists. The focus at the posh Berlin hotel is to discuss the situation and plot how a devastating business model can produce even more suffering, and thus even more profit. An alliance of four organizations is protesting—and a rock star is collaborating ............
The culture war’s favourite prophet can’t finish a straight thought
........... But these days, the reactionary right is miserably bereft of real intellectuals, and a decade or so ago, Peterson stepped into this void and was rewarded with global success.
That success, improbably, comes from a unique fusion of obscurantism and conservative pomposity. ..............
The incredible thing about Peterson is that, in writing and speech, he somehow manages to be both a sententious reactionary and a purveyor of postmodern gobbledygook. He is a master of faux-Confucian aphorisms—“There is no being without imperfection”—and spouts kindergarten morality with the self-serious gravitas of a bearded prophet who has just been handed stone tablets by the Almighty. But he’s long been equally prone to deconstructive cul-de-sacs and conceptual negations that save him from ever having to explain what he actually thinks or means. ...............
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