And so it begins ...

Meta CEO Mark Zuckerberg has repositioned the social media giant as an AI company.

Vincent Feuray | AFP | Getty Images

And so it begins. Meta is the first AI company starting to see burning through capital at stratospheric rates with no verifiable ROI is not smart but don't worry, OpenAI, and significant others, are next as AI is finally beginning to be seen as not the end all and be in terms of how the world does business
as civilization moves further into the 21st century. 

Meta Platforms shares popped about 4% higher on Thursday after Bloomberg reported that CEO Mark Zuckerberg was looking to make significant cuts to the company’s metaverse resources.

Bloomberg said that executives have considered budget cuts as high as 30% for the unit, citing people familiar with the talks.

The move would be notable for the Facebook parent company, which changed its name to Meta in October 2021 to signal its pivot beyond social media.

Zuckerberg said at the time that “the metaverse is the next frontier just like social networking was when we got started.”

The proposed cuts would likely include layoffs, according to Bloomberg, which said the cuts were part of budget planning for 2026. The cuts will likely hit the company’s virtual reality group.

Meta declined to comment on the report.

Photo by Logan Voss on Unsplash

But, as I have covered before, AI experiences diminishing returns, meaning that AI development costs increase exponentially. As such, the AI boom threatened to drain these tech giants of all their liquid cash. So, the industry switched to equity financing, which involved selling off shares to raise enough cash to keep the lights on. However, this quickly devolved into the infamous circular financing deals between OpenAI, Nvidia, Oracle, CoreWeave and Microsoft, which, in the end, wasn’t even enough cash to cover the spiralling costs of AI.

So, over the past year, Big Tech has turned more and more towards debt financing, or taking out loans, to cover their mounting AI costs. To give you an idea of how rapidly they are taking on debt, Big Tech is predicted to spend $400 billion on AI in 2025 and has issued $200 billion in AI-related bonds (or debt) so far this year, with half of that happening since September.

AI costs are really spiralling out of control. AI expenditure is set to double next year. By 2028, Morgan Stanley predicts that the AI industry will spend $2.9 trillion, the vast majority of which will require debt financing. According to J.P. Morgan, the AI sector will need $1.5 trillion in bonds (or debt financing), to cover the costs of constructing planned data centres alone.

To understand why, we need to understand what a bond is and how it relates to Credit Default Swaps (CDS). Stick with me; this gets juicy, I promise.

Bonds are a way for a corporation or a government to raise funds by directly selling their debt to investors. It is basically a corporation or government saying, “Give us your money now, and we will pay it back plus interest over time.”

But many investors want to mitigate the risks of their bonds. After all, if the government or corporation defaults on this debt, there is no way for the investors to get their money back.

This is where CDS comes in. These are effectively insurance policies for people who hold bonds, typically issued by investment banks or similar. So, if a bondholder is worried the government or corporation isn’t going to pay out and will fold on their obligations, they take out a CDS. This will cost them an annual premium, which is confusingly called a spread, based on how risky the debt is considered to be. Spreads are usually presented as a percentage cost of the bond value, so if a CDS has a spread of 1%, it will have an annual premium of 1% of the value of the bond covered. But in return, if the bond issuer defaults, the organisation providing the CDS will reimburse the full bond value.

Well, the entire future of AI depends on bonds.

And so it begins - K. Vonnegut

The man has a problem ...

The man has a problem ...

The publisher of the Franklin children's book series has rebuked Defense Secretary Pete Hegseth after he posted a meme of the anthropomorphic turtle firing on drug boats.

Hegseth's social media post from Sunday shows the turtle, clad in tactical gear, standing on a helicopter and aiming a rocket-propelled grenade at one of several boats in the water below. It's designed to look like an edition of the children's book, but titled Franklin Targets Narco Terrorists.

Secretary of Defense Pete Hegseth listens as President Donald Trump speaks during a Cabinet Meeting at the White House on Dec. 2. Andrew Caballero-Reynolds/AFP via Getty Images

& this ...

A Pentagon watchdog has determined that Defense Secretary Pete Hegseth risked the safety of U.S. service members by sharing sensitive military information on the Signal messaging app, according to a source who has reviewed the forthcoming inspector general report. 

The report, which is expected to be released as early as Thursday, was launched after a journalist for The Atlantic revealed in March that he had been added to a chat on the encrypted messaging app in which Hegseth and other top officials were discussing plans for U.S. airstrikes against Houthi rebels in Yemen. 

A summary of the report provided to NPR finds that had a foreign adversary intercepted the intelligence discussed in the chat, it would have endangered both U.S. service members and the mission at large.

Time for Pete to go, now.

All taken away ...

Jacob Hannah, CEO of Coalfield Development: ‘It was a once-in-a-generation cash injection … So to have it all taken away is deeply damaging and demoralizing.’ Photograph: Michael Swensen/The Guardian.

Drip, drip, drip, the damage done to this once great nation continues unabated,
perpetrated by The Donald in ways staggering the imagination. 

‘Deeply demoralizing’: how Trump derailed coal country’s clean-energy revival

Biden earmarked billions for former coal communities in Appalachia
– and his successor came and took it away

For a moment, Jacob Hannah saw an unprecedented opportunity to make Appalachia great again.

In 2022, the Biden administration earmarked billions of dollars to help revitalize and strengthen former coal communities. The objective was to lay down building blocks for the region to transition from extractive industries like coal and timber to a hub for solar and other advanced energy technologies, with a view to long-term economic, climate and social resilience.

But on his first day in office, Donald Trump scrapped Biden’s clean energy and environmental programs, which he lambasted as woke, anti-American liberal hoaxes.

“We knew we were living in a historic moment, not just because of the amount of funding, but because the whole region mobilized to meet the moment,” said Hannah, 33. “It was a once-in-a-generation cash injection designed to prioritize extraction-based communities as part of the energy transition, which for the first time in almost a century made Appalachia very competitive. So to have it all taken away is deeply damaging and demoralizing.”

Yes it is.

This is not going to be hard ...

Adm. Frank Mitchell Bradley has taken part in operations that span the globe from Afghanistan to Yemen.Credit...Tierney L. Cross/The New York Times

The New York Times At the White House on Monday, Karoline Leavitt, the press secretary, read a statement that said Mr. Hegseth had authorized Admiral Bradley “to conduct these kinetic strikes” and that the admiral had “worked well within his authority and the law” to make sure the boat was destroyed.

The public comments of the president, Mr. Hegseth and Ms. Leavitt all leave Admiral Bradley exposed.

“For the top two civilians in the Pentagon and the White House to effectively wash their hands of it and claim no responsibility, while simultaneously saying that they stand by the decision, goes against any kind of ideas of responsible command,” said Carrie A. Lee, the former chair of the department of national security and strategy at the Army War College. “If there has ever been a SEAL who is above reproach, it’s Mitch,” Mr. Cooper added. “I have yet to meet a finer person, much less a finer SEAL.” 

This hits home as my brother was a SEAL who saw combat, knew what was right and wrong and followed the chain of command. As for me, a communications officer back in the day, this hurts as the betrayal of Bradley by his superiors is a breach of the chain of command at the highest level because superiors must take ownership of whatever actions they do, good or bad. Trump and Hegseth, as Bradley's superiors, have not. What makes this even worse is the fact the ops taken against alleged drug smugglers from Venezuela have never been vetted. No intel on site to verify as to whether the guys in the boats were drug smugglers has ever been presented, just strikes and we now know why Trump and company is doing this, it's for the oil as Venezuela has the largest known reserves in the world. In hindsight, should Bradley disobey Hegseth? That's not for me to judge as I was not there but any notion this professional did the second hit on his own. Not a chance. Trump and Hegseth have crossed the line to hang Bradley out to dry to cover their asses and one never does that as a good superior takes care of his subordinates without question. End of rant for now.

As for the oil bit ...

U.S. Rep. Maria Elvira Salazar

© Salazar's official Youtube channel

Speaking on Fox News, Salazar said the Trump administration is taking the same steps it did before striking Iran's nuclear facilities earlier this year. "This is what he did with Iran. We gave ample notice to commercial airlines. Don't fly over Venezuela," she said.

This is what we said about Nam and Iraq ...

Just one more thing ...

Pete Hegseth Already Bragged About That Second Strike

The defense secretary admitted in September that he watched the strike.

It turns out that Secretary of Defense Pete Hegseth knows all about the circumstances of the America’s September 2 strike on boats in the Caribbean Sea. 

A clip of Hegseth talking the next day about the strike to Fox News in September resurfaced online Monday night. In the clip, Hegseth said he watched the bombing happen live. 

“I can tell you that was definitely not artificial intelligence. I watched it live. We knew exactly who was in that boat. We knew exactly what they were doing, and we knew exactly who they represented, and that was Tren de Aragua, a narco-terrorist organization designated by the United States, trying to poison our country with illicit drugs,” Hegseth said. 

Hegseth’s words contradict the Trump administration’s statements after details emerged earlier this week that the U.S. conducted a second strike on September 2 to kill survivors from its initial attack. The administration has attempted to shift blame and responsibility from Hegseth to Commander Frank “Mitch” Bradley. Trump himself claimed Sunday he “wouldn’t have wanted that—not a second strike.” 

If indeed the U.S. government conducted a second strike to kill survivors, that would be a war crime—and that’s assuming we are even at war, which Congress has not declared. 

Interesting is it not?

The Twittering Machine :)

Watercolor and ink; oil transfer on paper with gouache and ink borders on cardboard.
Group of birds shackled to a wire attached to a hand crank. Paul Klee

Paul Klee is a big favorite of mine. Funny, whimsical and wise, his work touches the soul IMHO. :)

Factoid: Originally displayed in Germany, the image was declared "degenerate art" by Adolf Hitler in 1933 and sold by the Nazi Party to an art dealer in 1939, whence it made its way to New York. One of the better known of more than 9,000 works produced by Klee, it is among the more famous images of the New York Museum of Modern Art (MoMA). It has inspired several musical compositions and, according to a 1987 magazine profile in New York, has been a popular piece to hang in children's bedrooms.[1]

Carville nails it ...

Photo Illustration by Thomas Levinson/The Daily Beast/Getty

Gotta love Carville, the "It's the economy stupid." genius behind Bubba becoming president back in 92 as he's the last true Louie Howe for the dems as he gets it without question. 

Howe (left) and Franklin D. Roosevelt in 1932

When Howe died, Eleanor picked up the gauntlet and the rest is history. :)

To whit. 

Democratic strategist James Carville says Donald Trump’s presidency is circling the drain as voters sour on him and his Cabinet’s fiascos—with more trouble on the horizon.

“The power’s going out of Trump by the minute,” the famed strategist, 81, said on The Daily Beast Podcast. “You can just feel it oozing out.”

A new Gallup poll released on Friday found Trump’s approval rating dropping to just 36 percent—the lowest mark he’s recorded in Gallup’s polls in his second term.

“The public has turned on him. It turned on him decisively,” Carville told host Joanna Coles, arguing that voters are increasingly blaming the 79-year-old president for their economic woes. At the same time, Trump’s Cabinet, mired in a string of scandals, is fueling a sense of “disorder” around Trump, Carville said.

“I don’t see how this gets better for them, I really don’t,” said the strategist behind Bill Clinton’s 1992 presidential campaign, and its winning slogan: “It’s the economy, stupid.”

Carville pointed out that healthcare premiums are set to soar for more than 20 million people in the new year, a consequence of Trump and the GOP’s refusal to extend Affordable Care Act subsidies.

Noting Trump’s “catastrophic” numbers, Carville said, “I don’t know how much lower you can go. I think his presidency, in terms of, like, anything significantly done, is over.”

Last week, Carville declared in a New York Times opinion piece that Democrats must embrace a “platform of pure economic rage” to respond to the “economic pain” of the current era.

Brandon Celi

We are not even two weeks from the government shutdown, and the public conversation on the matter has fled the building. This shows, no matter what you believe, there’s a simple truth. The shutdown will have zero lasting consequence for next year’s midterms. The only thing that will persevere is economic pain. And that’s exactly why Democrats won on Nov. 4.

Zohran Mamdani, Abigail Spanberger, Mikie Sherrill — even down-ballot Georgia Democrats — all won with soaring margins because the people are pissed. And the people always point their anger at the party in charge. Rent is out of control. Young people can’t afford homes or pay student debt. We’re living through the greatest economic inequality since the Roaring Twenties.

Howard Beale lives ...

"I'm as mad as hell, and I'm not going to take this anymore!"

Instead ...

A little bit of whimsey

Instead of discussing possible war crimes perpetrated by the Secretary of Defense or the shenanigans of the supremes or the dereliction of duty by congress, Trump and his cabinet officials, yours truly decided to show some art done back in the early 80s of 3D CG combined with plexiglass, mirrors, light and Chromolux. :)

Selon 5

Patterns in the Net

Progression of a different kind

Illumination 2 Step

Unchecked ...

Illustration by Paul Spella. Source: Douglas Sacha / Getty.

The supremes have been doing it for years, creating a de facto king instead of a president, something the Founding Fathers understood better than most as Noblesse Oblige ruled in Europe without restriction. Now we have a problem as the worst SC in history has flat backed to the extreme in the creation of something truly frightening to behold, a king in the making and ... we did it to ourselves.

In the normal course of history, the president of the United States is a figure who inspires optimism in the American people. The 47th president prefers to stir feelings of fear, vulnerability, hopelessness, and political inevitability—the sense that he, and only he, can rescue the nation from looming peril. Since his second inauguration, Donald Trump has seized authoritarian control over the federal government and demanded the obedience of the other powerful institutions of American society—universities, law firms, media companies. The question weighing heavily on the minds of many Americans is whether Trump will subvert next year’s midterm elections or the 2028 presidential election to extend his reign.

With his every word and deed, Trump has given Americans reason to believe that he will seek a third term, in defiance of the Constitution. It seems abundantly clear that he will hold on to the office at any cost, including America’s ruin.

The Founders of our nation foresaw a figure like Trump, a demagogue who would ascend to the presidency and refuse to relinquish power to a successor chosen by the American people in a free and fair election. Writing to James Madison from Paris in 1787, Thomas Jefferson warned that such an incumbent, if narrowly defeated, would “pretend false votes, foul play, hold possession of the reins of government.” Were that moment ever to come, the Founders believed, it would mark the demise of the nation that they had conceived, bringing to a calamitous end the greatest experiment in self-government ever attempted by man.

1816 portrait

Why Madison mattered ...

During the first Congress, Madison took the lead in advocating for several constitutional amendments to the Bill of Rights.[103] His primary goals were to fulfill his 1789 campaign pledge and to prevent the calling of a second constitutional convention, but he also hoped to safeguard the rights and liberties of the people against broad actions of Congress and individual states. He believed that the enumeration of specific rights would fix those rights in the public mind and encourage judges to protect them.[104][105] After studying more than two hundred amendments that had been proposed at the state ratifying conventions,[106] Madison introduced the Bill of Rights on June 8, 1789. His amendments contained numerous restrictions on the federal government and would protect, among other things, freedom of religion, freedom of speech, and the right to peaceful assembly.[107] While most of his proposed amendments were drawn from the ratifying conventions, Madison was largely responsible for proposals to guarantee freedom of the press, protect property from government seizure, and ensure jury trials.[106] He also proposed an amendment to prevent states from abridging "equal rights of conscience, or freedom of the press, or the trial by jury in criminal cases".[108]

To prevent a permanent standing federal army, Madison proposed the Second Amendment, which gave state-regulated militia groups and private citizens, the "right to bear arms". Madison and the Republicans desired a free government to be established by the consent of the governed, rather than by national military force.[109]

This all started with Nixon, the Unitary Presidency and Vietnam, a "war" based on a lie. 

Richard Nixon is associated with the unitary executive theory through his actions that pushed the boundaries of presidential power, which scholars would later label as having "unitary" characteristics. While Nixon's administration began with an initial plan to let cabinet members have more independence, his actions, particularly regarding the Watergate scandal and his attempts to cover it up, demonstrated a strong belief in and use of presidential control over the executive branch.

Official Portrait 1972

It's pucker time ...

The NVIDIA stock chart. Jonathan Raa/NurPhoto via Getty Images

It's pucker time, you know, the feeling you gotta tighten up or disaster ensues. This is where we are at regarding Nvidia, AI and all the companies invested to the moon with Nvidia,
something discussed in a "wonderful" BRT blurb titled The Tell.

As the price of almost everything has increased, and American workers’ wages have all but stalled, politicians like President Donald Trump have tried to ease our minds by telling us that the economy is “doing great” and that the stock market is booming. “Record high, record high, record high,” Trump said at an event earlier this month in Florida.

The world’s most important company, Nvidia, is driving the entire growth of the US stock market to an extent that no single company has in recent memory.

If it falters, there’s a fear it will take the entire US economy down with it — and there are signs that it might.

The shock waves of Nvidia falling would be devastating and far-reaching — from tech startups and cloud computing to construction, land development, and steel — because of the AI supply chain.

Still, despite what has been a good year for the stock market, it’s hard to find a day in which a podcaster, influencer, or economist isn’t warning that the AI boom that’s powering the economy could be a bubble — one that is about to burst.

The company that’s driving Wall Street’s positive movement is Nvidia, the most valuable company on the planet. And that’s because the recent rash of data centers popping up across the country are filled with Nvidia’s graphic processing units, or chips.

As per The Tell ...

While the report and guidance were strong, the one red flag with Nvidia's report was that the company continues to see its accounts receivable balloon. During the quarter, this metric climbed 89% year over year to $33.4 billion, outpacing its sales growth. Accounts receivable is how much money is owed to the company for products that have been shipped. Continued big jumps in this metric can be a sign of channel stuffing or collection problems. Given that Nvidia has started to make investments in its customers, like OpenAI and Anthropic, this makes it even more notable, as the chipmaker is essentially providing the cash these companies need to help buy its chips. This type of circular financing likely isn't sustainable over the long run.

AKA Stuffing the Channel ...

Channel stuffing is the practice of flooding a distribution channel with excess inventory to artificially inflate sales figures, often done to meet short-term sales quotas or inflate performance. This can lead to negative consequences like high return rates, bloated inventory, fluctuating demand, and reduced profits. It is a fraudulent accounting practice that can result in significant legal trouble for companies, notes KPMG International and MoloLamken.. 

The underlying issue no one talks about is the notion of AI hallucinating as virgin content for AI no longer exists so continued scaling of ever larger AI models necessitates the tech bros to enlist their AI's to create synthetic experiences, a process akin to inbreeding along the lines of the royals and we all know where that leads, correct?

And so it goes. K. Vonnegut

Natural Immunity ...

Ralph Abraham on Wednesday, June 6, 2018. Credit: Getty | Bill Clark/CQ Roll Call

You can't fix stupid, rev XX. The brain hurts when thinking about RFK Jr's approach to medicine as his move back to the dark ages regarding health continues unabated with his selection of the new CDC head believing in natural immunity over vaccines.

To whit.

RFK Jr.’s new CDC deputy director prefers “natural immunity” over vaccines

Ralph Abraham is “dangerous,” but somehow not the worst among those considered.

Under ardent anti-vaccine Health Secretary Robert F. Kennedy Jr., the Centers for Disease Control and Prevention has named Louisiana Surgeon General Ralph Abraham as its new principal deputy director—a choice that was immediately called “dangerous” and “irresponsible,” yet not as bad as it could have been, by experts.

Physician Jeremy Faust revealed the appointment in his newsletter Inside Medicine yesterday, which was subsequently confirmed by journalists. Faust noted that a CDC source told him, “I heard way worse names floated,” and although Abraham’s views are “probably pretty terrible,” he at least has had relevant experience running a public health system, unlike other current leaders of the agency.

But Abraham hasn’t exactly been running a health system the way most public health experts would recommend. Under Abraham’s leadership, the Louisiana health department waited months to inform residents about a deadly whooping cough (pertussis) outbreak. He also has a clear record of anti-vaccine views. Earlier this year, he told a Louisiana news outlet he doesn’t recommend COVID-19 vaccines because “I prefer natural immunity.” In February, he ordered the health department to stop promoting mass vaccinations, including flu shots, and barred staff from running seasonal vaccine campaigns.

It's the mushroom theory of business.

Keep them in the dark & feed them bullshit as needs warrant.

Willy Stöwer - Magazine Die Gartenlaube, en:Die Gartenlaube and de:Die Gartenlaube

Titanic Sinking, engraving by Willy Stöwer.

Titanic sinking.

Mushroom management can also occur during the handling of one-off, individual situations. When the RMS Titanic hit an iceberg, only a few members of the crew were aware that the ship was going to sink. Most of the crewmen were not informed about the seriousness of the situation by the captain, which resulted in chaos and disorganisation. The captain attempted to act on his own, without incorporating the officers into his decisions.[9]

And they didn't have enough life boats.

The word assume ...

U.S. Graphics Processing Unit (GPU) Market

The word assume applies as predicting the future's a fool's game due to quantum and the two laws of thermodynamics. There is no certitude yet this report assumes the market will increase nearly 10 fold within the space of 9 years as BAU (Business as Usual) applies. 

The United States Graphics Processing Unit (GPU) Market is expected to reach US$ 136.07 billion by 2033 from US$ 19.03 billion in 2024, with a CAGR of 24.43% from 2025 to 2033

The growing demand for gaming, artificial intelligence, and data-intensive applications, as well as the expansion of cloud computing, machine learning, cryptocurrency mining, high-performance computing, and improvements in 3D visualization, as well as consumer preferences for immersive digital and multimedia experiences, are driving the growth of the GPU market in the United States.

Applications such as data analytics, 3D modeling, scientific simulations, machine learning, and artificial intelligence depend on them. GPUs are perfect for high-performance computing because they can process several jobs at once, unlike CPUs, which handle tasks sequentially. GPUs are essential in a variety of sectors, including gaming and entertainment, healthcare, finance, and autonomous cars, because to their adaptability, efficiency, and speed.

High-performance computing (HPC), artificial intelligence (AI), and gaming are the three industries driving the graphics processing unit (GPU) market in the United States. Advanced GPUs are required by the rapidly expanding gaming industry for esport, virtual reality, and immersive experiences. Demand is further accelerated by the use of AI and machine learning in the fields of healthcare, finance, and autonomous cars because GPUs are excellent at performing complex algorithms in parallel.

In order to manage enormous workloads, growing cloud computing and data centers depend on GPU-powered infrastructure. Growth is also fueled by applications in scientific research, media, and 3D rendering. Performance and efficiency are improved by ongoing innovation in GPU architectures, which makes them indispensable in a variety of industries and propels steady market growth.

Notice, there is no analysis about the inevitable costs of said tech beginning with the eating the world scenario regarding the intense resource requirements to drive said systems as tech companies are contemplating buying nuclear reactors to power the tech in question. Another issue not discussed is maintenance as GPU life spans are 2-3 years at best so the data centers in question must be constantly updated in order for the AIs to function and lastly, we haven't even discussed the woeful power grid situation or climate change as CC impacts the making of stuff in ways boggling the mind. 

In essence, the word assume is the most dangerous word in any language as it is truly the Ass of You & Me. :)

Factoid, systems hallucinate as LLMs have run out of content to crunch so AI companies are asking the AI's to create artificial experiences, a process akin to the in-breading of the royals with Charles II of Spain as poster child. 

Charles II of Spain Portrait by Juan Carreño de Miranda, c. 1685

0.02

RM Pix - Midtown NYC

RM Pix from above, Nano Banana 0.02

 Accurate to a "T" Any questions?

3 more ...

Original pix

45 degree rotation in 3D NB

45 degree rotation in 3D with cobalt blue ceiling NB

NB did it right save for the grey heating duct connected to the front wall. I'll take it anyway. :)