Thistles sailing on Willamette River
There are two reasons for posting this blog.
- With Recession in the title, readers a year from now can Google the word and come up with this post showing when ITA was sounding the alarm for the coming recession – or worse. In fact, I have been hinting at the coming market draw-down for months.
- The blog contains three links to what I am talking about. In an earlier post I provided another link along the same lines. I don’t expect all readers will enjoy or even track the logic behind the money exchanges between the large AI companies. One of the links is quite long so listening might require several sittings.
This first blog lays out the tangled web of money moving around these companies in order to keep debt off their balance sheets. Readers will also find how AI companies are lengthening out the depreciation time for their hardware in order to boost earnings.
How to protect capital? I’ve been buying short-term treasuries (SHV) and reducing exposure to U.S. Equities such as VOO or SPY. This move may be early as the equities market could easily rise for another 12 to 15 months. However, it certainly looks like a market crash has a high probability of happening in the near future. Keep checking on the Buffet Indicator and Shiller P/E Ratio.
This is an interview with a woman who has written a book on the problems surrounding AI and the harm created by the immense data centers.
Another link that might fill in some of the gaps. If you check on these three links you will be guided to many others on YouTube.
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Lowell
This is very scary stuff. I knew something about the AI circular economy, and I’m currently reading Karen Hao’s book (“Empire of AI”), but what I did not appreciate is the scale of the financial engineering. This level of double dealing also occurred in the 2006-2008 timeframe, but with subprime mortgages. This financial engineering is getting to be global and therefore very dangerous.
This is a great set of clips. Keep up the good work Lowell.
Craig
Craig,
Karen Hao’s book is on my library waiting list. Based on the long wait list this book is getting some attention. I’ve listened to her on some videos and what is scary is that AI developers are undermining our democracy.
Assuming you have been following this blog, I’m currently 55% in cash and short-term treasuries and moving more to treasuries each week. I’ve yet to short the market, but it is tempting.
Lowell