DUMB MONEY ONCE AGAIN

The Kobeissi Letter post below provides the evidence that the stock market crash is not too far away. The Wall Street cabal and their CNBC mouthpiece have once again lured the average schmuck into the most over-valued market in history.

The Kobeissi chart shows individual investors now make up 20% of the daily trading volume, close to the highest in history. You can see that after the last great collapse in 2009, individual investors made up less than 10% of daily trading volume. The dumb money is always lured into the market before they pull it.

The Margin Debt chart provides even more proof you can’t fix stupid. Not only have the dumb money schmucks bought into the AI bullshit narrative, going all in on the “Magnificent Seven” stocks, but they are so confident in their investing magnificence, they have driven margin debt to an all-time high of $1.2 trillion.

Their confidence is at all-time highs, just like it was in 2000 and 2008. When retail buying, based on momentum, drives the market to highs, as the smart money sells to them, the market looks unstoppable. But, when the bottom drops out and margin calls start to pile up, the path to a 20% to 30% crash in a matter of days will sober up these dumb money idiots.

~ Full article…

Model Collapse: The Entire Bubble Economy Is a Hallucination

The conclusion that soaring asset prices mean the economy is strong and so all is well is a hallucination that goes unrecognized because the entire financial system is hallucinating because it’s “training” on artificial data that it generated in a self-referential feedback loop of artificial stimulus and the resulting rise in asset valuations and spending. That none of this stimulus boosted utility value or productivity is left out of the “training,” which focuses solely on curated data that supports the hallucination.

Here is how the author of the Unified Theory of Model Collapse describes this process:

“Training on AI-generated data causes models to hallucinate, become delusional, and deviate from reality to the point where they’re no longer useful: i.e., Model Collapse.

The more ‘poisoned’ the data is with artificial content, the more quickly an AI model collapses as minority data is forgotten or lost. The majority of data becomes corrupted, and long-tail statistical data distributions are either ignored or replaced with nonsense.

Those models lose the capacity to understand long-tail information (improbable, but important data) that is no longer represented. Information on topics like serious injuries, getting punched in the nose, how dangerous wild animals can be, and what it’s like to truly be hungry because you can’t find food. Their models default to synthetic human artifice instead of understanding real implications.
[…]
The conclusion here is striking: the entirety of the modern world of Progress–urbanized, detached from the “raw” real world in service of convenience and abundance, a world where we “train” our mental models on “cooked,” curated, processed artifices–is all a vast, inter-connected, self-reinforcing hallucination bound for a collision with an inconveniently “raw” real world.

The Bubble Economy will be the first point of contact.

~ Full article…

If AI replaces workers, should it also pay taxes?

Labor, through income tax and social security contributions, is one of the pillars of the tax systems of almost all countries, and the impact of automation on the tax base — or, in other words, the potential decrease in revenue — is not a new concern. In 2019, Nobel laureate Edmund Phelps proposed a tax on robots to help maintain social benefits. Shortly before, Bill Gates, founder of one of the world’s largest technology companies, Microsoft, which has its own artificial intelligence (Copilot), had suggested applying the same tax burden to robots as would be borne by the workers they replace.

“The trend toward automation and AI could lead to a decrease in tax revenues. In the United States, for example, about 85% of federal tax revenue comes from labor income,” says Sanjay Patnaik, director of the Center for Regulation and Markets at the Brookings Institution. He suggests that governments address “the risks posed by AI” by increasing capital gains taxation rather than creating a specific tax on it, due to the difficulties in designing such a tax and the distortions it could generate. The repeated use of the conditional tense is because the impact of generative AI, the kind capable of creating content on demand, is still uncertain, both in positive terms — improved productivity and economic growth — and negative terms; job losses.
[…]
MIT economists Daron Acemoğlu and Simon Johnson warned about this in 2023. “Over the past four decades, automation has increased productivity and multiplied corporate profits, but it has not led to shared prosperity in industrialized countries,” they cautioned in a document for the IMF.

~ Full article…

Meanwhile, back at the ranch

Hannah Rothschild on privilege, duty and shaping a centuries-old family legacy

“We were born to feel it was an incredible gift and an accident to be born with this privilege… It is our responsibility to make the most of it,” said Hannah during a special recording of “CNBC Meets: Legacies” at a private banking event in Singapore organized by United Overseas Bank.

Georgios Samaras: Across the EU, a system is congealing in which corruption is not an exception but part of the operating logic of power,

and Mitsotakis sits comfortably inside it. Within the European People’s Party, governments that deliver growth on paper, lock down borders, and stay aligned with NATO are rewarded and shielded, regardless of what they do domestically. On top of that, the EPP is now unapologetically edging toward formal alliances with the far right. A right-wing bloc made up of the EPP, Giorgia Meloni’s European Conservatives and Reformists, and Patriots for Europe now dominates the European Parliament, giving the EU the most right-wing assembly in its history and normalizing collaboration with forces once considered beyond the pale. Qatargate and other lobbying scandals did not produce a serious cleanup; they signaled to the political class that influence is simply another commodity, to be traded so long as it stays behind closed doors.

Greece is the clearest example of how this works. A country once cast as the sick man of Europe, punished with memoranda and IMF supervision for its corrupt political class in 2010, is now paraded as a model. The same state that was disciplined for cooking the books is sold back to Europe as a star pupil to be copied, with Mitsotakis garlanded for an “economic miracle” and talked up in Brussels as a future European Commission president.

For years, European leaders warned of an external menace to democracy; yet ultimately, the coup came from within. Politically, that is the real danger of the Greek “miracle”: it hands Europe’s ruling class a handy manual that says you can gut labor protections, hollow out media pluralism, spy on opponents, dismiss deadly disasters, funnel public money to party clients, and talk up new weapons deals with an Israeli government that has committed genocide in Gaza — and still be hailed as a modernizing reformer, so long as bond yields stay calm and capital keeps cashing in.

From: Greece’s Broken Democracy Is a Warning for Europe

Maintaining Tradition

New Democracy is not suddenly drowning in scandal; it has been swimming in these waters for years. Under Prime Minister Kostas Karamanlis between 2004 and 2009, it faced a rolling crisis of legitimacy: these years saw the “Greek Watergate” wiretapping affair, the Vatopedi land swap controversy, the Siemens bribery case, and murky financial deals involving pension funds and state assets. This all fed a sense of entrenched graft and impunity. None of this ever brought real accountability for those at the top, but it normalized a style of rule in which backroom deals, clientelism, and the protection of party networks were treated as the Greek state’s basic operating system.

Mitsotakis came to power promising to break with that past, but his premiership has extended it. The first major crack in his stage-managed image came in 2022, when the Predator spyware scandal blew open. Investigations showed hundreds of people — ordinary citizens, journalists, opposition figures, and even his own ministers, including reporter Thanasis Koukakis and PASOK leader Nikos Androulakis — under surveillance through a toxic mix of illegal spyware and “legal” wiretaps, just after he pulled the intelligence service under his direct control. The trail led straight to his office: his nephew and main fixer, Grigoris Dimitriadis, and the head of the National Intelligence Service resigned, but no political figures have been prosecuted, and the government hurriedly shut down the parliamentary inquiry in what the opposition called a staged whitewash.
[…]
The OPEKEPE scandal — named after the state agency that channels EU farm subsidies — exposed a subsidy system riddled with made-up agricultural projects: invented livestock numbers, banana plantations on Mount Olympus, olive groves in military airports, even grazing land stretching out into the sea. Billions in EU funds were routed through this machinery while auditors were pushed aside and agency heads who questioned irregularities were removed.

A European investigation led by Kövesi’s office describes a systematic, organized fraud operation using OPEKEPE to siphon off Common Agricultural Policy (CAP) funds. Brussels has already hit Greece with a €392.2 million fine and a 5 percent cut to future farm subsidies for years of nonexistent oversight. Far from a handful of crafty villagers milking Brussels, the trail runs straight through the political class: New Democracy ministers and MPs, with especially thick clientelist webs in Crete — the same island flipped by the party in the June 2023 elections — as subsidy money washed through party-friendly intermediaries into safely fenced-off fiefdoms.

Big Polluters have captured €17 billion in public subsidies for failed carbon capture technology – because fossil fuel lobbyists are setting the agenda

On 8-9 December, the European Commission and its oil company co-host HEREMA will hold the fifth Industrial Carbon Management (ICM) Forum in Athens. As the EU gears up for its annual meeting on carbon capture, new research by Oil Change International and Corporate Europe Observatory1 shows that carbon capture and storage (CCS) has received €17.3 billion in public subsidies from the EU, its member states, and Norway.2
[…]
The ICM Forum has been dominated and steered by the fossil fuel industry, and has shaped EU policy and directed public money towards CCS as a way to lock-in fossil fuels.4 This year’s co-host HEREMA aims to expand oil and gas production, and is facing local resistance over its controversial Prinos CCS site.

~ Full article…

Mapping the money behind carbon capture — Public subsidies and industry ties

The fossil fuel industry is behind the push for CCS

Corporate Europe Observatory (CEO) has exposed how the European Commission’s ICM Forum (formerly the ‘CCUS Forum’) is dominated and steered by fossil fuel industry lobbyists. Its working groups produce recommendations for the Commission, effectively inviting the fossil fuel industry to shape EU policy. The Commission’s subsequent strategy (the ICMS) closely mirrors these recommendations.

The 5th forum in Athens is co-hosted by HEREMA, a Greek state-owned oil company with an explicit goal of increasing oil and gas production.b HEREMA’s CO2 storage project in Prinos, Thassos, is facing strong local resistance due to risks of CO2 leakage, groundwater pollution, and earthquakes.

Since last year’s ICM Forum in Pau, France, all four working groups mandated to help implement the ICMS have published recommendations. Each group had fossil fuel industry co-chairs and/or report editors, including Equinor, the International Association of Oil & Gas Producers (IOGP), and six others (see Figure 2).c These eight fossil fuel groups alone spend nearly €20 million a year lobbying Brusselsd – and the Commission is listening to them.

Polarization by Design: How Elites Could Shape Mass Preferences as AI Reduces Persuasion Costs

In democracies, major policy decisions typically require some form of majority or consensus, so elites must secure mass support to govern. Historically, elites could shape support only through limited instruments like schooling and mass media; advances in AI-driven persuasion sharply reduce the cost and increase the precision of shaping public opinion, making the distribution of preferences itself an object of deliberate design. We develop a dynamic model in which elites choose how much to reshape the distribution of policy preferences, subject to persuasion costs and a majority rule constraint. With a single elite, any optimal intervention tends to push society toward more polarized opinion profiles – a polarization pull'' - and improvements in persuasion technology accelerate this drift. When two opposed elites alternate in power, the same technology also creates incentives to park society insemi-lock” regions where opinions are more cohesive and harder for a rival to overturn, so advances in persuasion can either heighten or dampen polarization depending on the environment. Taken together, cheaper persuasion technologies recast polarization as a strategic instrument of governance rather than a purely emergent social byproduct, with important implications for democratic stability as AI capabilities advance.

~ Full article…

Inside Coca-Cola’s Multi-Billion Dollar Theft Of Trade Secrets

Coca-Cola’s Grand Larceny

Once the COVID-19 epidemic struck in 2020, Coke has only held virtual annual meetings. At each meeting since 2020, I submitted a question focusing on one or more issues described above. For the last couple of meetings, I spotlighted the egregious case of heroic Mexican entrepreneur Jose Antonio Del Valle Torres, who I’ve gotten to know over the years, involving the theft of trade secrets for a sugarless, all-natural ingredient brain-boosting healthy beverage named “GO GABA” that he created. It was estimated to be worth billions of dollars in future sales by senior investment bankers and Coca-Cola’s executives.

Jose Antonio had already established markets in Mexico and The Netherlands and won international acclaim from such companies as Google as well as from Mexican and French authorities for bringing this innovative new beverage into the market. Coca-Cola recognized the unique concept and revenue-producing potential of GO GABA and wanted the ‘know-how’ behind it.

After signing a legally binding agreement with Coke’s Mexican subsidiary to further develop the GO GABA beverage innovation, Mr. Del Valle Torres’ beverage trade secrets were stolen through a series of nefarious activities. Coca-Cola fraudulently began marketing Fanta GABA in Japan in May 2018. In July 2018, Jose filed two criminal complaints against Coca-Cola for corporate fraud and industrial property theft. Mexico City’s Attorney General officially determined that Jose had already suffered losses totaling $345 million USD. Fanta GABA was almost instantly pulled from the market.
[…]
Self-Imposed Exile and Escaping Serious Injury or Death

Mr. Del Valle Torres’ situation has become so precarious that he has been forced to move his residence multiple times in order to stay alive as he lives in self-imposed exile from his home country. This has taken a gigantic toll on his life’s aspirations, family, health and well-being.

~ Full article…

The great global copper swindle

More attractive target

Metal theft is nothing new but it’s “on the rise, largely linked to soaring commodity prices”, said Wired.

This is especially true for copper, “a crucial component in everything from solar panels to electric vehicles and computer chips to plumbing parts”, said The Logic.

Having crashed nearly a decade ago due to factors including a Chinese ban on scrap imports, its price has steadily risen since the pandemic and is now roughly 30% more expensive than it was five years ago. This makes copper a “more attractive target for criminals looking for a quick profit”, said Goldsworthy.

A 2022 systematic review revealed a direct correlation between rising copper prices and an increase in copper theft. And, unlike many other scrap metals, copper “can be recycled again and again, without degrading in the process”.

~ Full article…

Bayer shares pop 12% after Trump administration backs curbing of Roundup lawsuits; European stocks close higher

German biotech giant Bayer won support from the Trump administration on Monday to curb U.S. litigation related to its Roundup weedkiller. Shares of the company closed 12% higher.

The company faces thousands of lawsuits alleging the weedkiller has caused health issue including cancer and has already paid billions of dollars to claimants.

U.S. Solicitor General D. John Sauer urged the Supreme Court on Monday to limit the lawsuits brought against Bayer, supporting the firm’s argument that federal law on pesticides preempts claims made under state law.

“The support of the U.S. Government is an important step and good news for U.S. farmers, who need regulatory clarity,” Bayer CEO Bill Anderson said in a statement on Tuesday. “The stakes could not be higher as the misapplication of federal law jeopardizes the availability of innovative tools for farmers and investments in the broader U.S. economy.”

Bayer acquired Roundup maker Monsanto for more than $60 billion in 2018.

~ Full article…