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Wednesday’s Forum
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41 responses to “Wednesday’s Forum”
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The fact that this hedge fund’s name is Situational Awareness should have Alanis Morissette on high alert.
The eight-person hedge fund was led by a 24-year-old without a whiff of trading experience. Few people were assigned to monitor investment risk at the fund, which had been created only in 2024, and the chief compliance officer at the time split his time between his apartment in Reno, Nev., and the headquarters in San Francisco, according to regulatory filings and people briefed on the matter.
Yet none of that stopped Wall Street’s biggest banks, including Goldman Sachs and Bank of America, from lending the hedge fund tens of billions of dollars. That allowed it to build a giant one-way bet on artificial intelligence stocks that imploded over the summer in spectacular fashion when some of its investments suffered steep declines.
This has a very 1929 vibe to it all.
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I don’t know that Alanis Morisette needs to look into this. Perhaps you are just not aware of aspects of the situation that would make the Situational Awareness hedge fund’s actions make sense.
Moving $10B+ about can leave a lot of money in people’s sofa cushions, for instance, and it also allows someone to take make-believe paper assets and get real money for them.
This is either spectacular stupidity, or a few people who know exactly what they are doing, using this hedge fund as a middle-man (and potential fall guy, if ever anyone took the fall for white collar crime). If the 24 year-old was Barron Trump, the safe bet would be grift, and I don’t think we know all the Barron Trumps of the world.
ETA: Fiona Apple might want to know. https://youtu.be/FFOzayDpWoI
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Under the heading of “How do you like me now, Donny boy?”
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I’m not going to comment or speculate on the FlyDubai incident until at least the bare facts of what took place get sorted out.
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Some time back I expressed concern that contra the narrative, Trump’s ‘convention’ might still help GOP turnout. Ken Paxton of all people, says I’m wrong.
The recording, which is muffled at times, captures Mr. Paxton being asked, “Do you feel like he’s a little bit of a drag?” It is not clear from the audio whom the questioner is referring to.
Mr. Paxton responds: “So to be honest with you, the numbers — when we did that convention — it dropped our numbers. Everybody’s numbers dropped. Right now, yeah, not good.”
I am always going to be suspicious of hope. Nothing is real til it’s real. But if Talarico wins Texas it’s not just another Democratic senator, it’s D-Day Plus One: the beachhead has been established, the Panzers aren’t coming and we are on our way to the führerbunker.
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I’ve been thinking that when comparing prices between decades, adjusting for inflation is insufficient. Not useless, it obviously helps in making a fair comparison. But something’s missing.
So, I asked myself, how about adjusting for purchasing power?
For instance, maybe a widget adjusted for inflation between 1970 and todays is a bit cheaper, say $4.50 in 1970 and $4.40 today. Sure, but how many widgets could the median person buy in 1970 and how many today?
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I think a bigger problem is relying on “average” households. Given that the average income (add up all the income and divide by the number of people) in the US is skewed up by the fabulously wealthy, the average isn’t the right metric. A more accurate measure is median (the income where half the people are above and half below). But I think to get a real picture we should go by fifths: the median household in the bottom 20th to the the top 20th.
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Precisely why I said median. Using segments would illustrate some issues better.
The average in today’s K-shaped economy is completely effed up. One one hand people are struggling to make rent and pay for groceries. On the other the wealthy are spending as though they have money to burn (as though???). So there’s plenty of consumer spending, but it’s all the top.
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@MarkedMan But “households” have changed as well. In my lifetime, it was uncommon for married women to hold full-time jobs outside the home. Now, it’s uncommon for them not to. That radically skews “household income” comparisons.
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This thread about an AZ Central piece about Kyrsten Sinema cracked me up. I particularly like the Madlibs response.
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I repeat a question I’ve asked before: So, you’ve got all my data, you know all my habits, my preferences, etc… So what?
We recently bought a house. It’s double the square footage of the condo which we have, fortunately, sold. (At a small loss but in the Vegas market, I’ll take it). So we’re buying a lot of stuff. Had new flooring installed. Added a spa. Bought rugs, furniture, lamps, decor, etc… And as far as I can see, none of those purchases were affected by advertising. We decided on flooring after watching too many YouTube videos. The furniture, lamps, shelving, etc… came from the usual suspects: West Elm, Pottery Barn, Ruggable, IKEA, Etsy and Home Depot. Where else were we going to get stuff?
We buy groceries – haven’t seen an ad for anything we buy. We buy booze – I’ve never seen an ad for Talisker or Four Roses Single Barrel. I buy weed by searching for high THC – no ads.
I take the pharmaceuticals my doctor advises – I’ve never suggested some med I saw on TV. I buy books – no ads. I watch TV shows that ere nevr suggested by an algorithm. I buy Eddie Bauer t-shirts because they come in tall sizes. I buy HOKAs – word of mouth, not ads. I contract services based on Google reviews.
So all these companies have collected all this data on me and none of it has mattered in the least. I don’t think it’s just me. I think all this personal data is wildly over-valued. I don’t think it’s just AI that is over-valued, I think it’s the entire digital world. Sound and fury signifying very little.
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You sold your condo for only a small loss? You did pretty well, then. I’ve followed the townhouse I owned 30+ years ago on Zillow, etc., and it’s selling price dropped precipitously — from almost $800k to ~$375k.
On the other hand $320 for HOA and 1/12th of the property tax bill would probably be less than what I pay for my 300 sq. ft. studio downtown. The road not taken…
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Old Bloom County strip. Two characters are arguing Coke, Pepsi. “The real thing.” “The taste of a new generation.” “Phbbt. They both taste like malted battery acid.” You, and I, are hardly the demo the ads and the data collection are targeting. We either formed a preference long ago or realized it doesn’t matter. Eighteen year olds, not so much.
I don’t watch movies I see advertised. I understand the rule is there’s no point to spending ad money on a stinker, and good movies don’t need it, so what you see advertised is mediocre stuff they think they can save. My wife and I go to a theater about once a year. The half hour of previews they show reminds us why we don’t go more often.
I do always get a chuckle out of drug ads. The law requires them to cite the possible side effects if they cite the benefits, so now and again you get an ad that doesn’t say what the drug is for. And the sensible, ‘Don’t take our drug if you’re allergic to our drug.’ And the ever popular, ‘Possible side effects include death.’ I’ve read that the U. S is almost alone in allowing ads for prescription drugs.
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And as far as I can see, none of those purchases were affected by advertising. We decided on flooring after watching too many YouTube videos.
Michael, my DIL until recently hired influencers to be at various media events they had going. Although she didn’t do this herself, she is very aware of the unbelievable amount of money that is spent on getting “reviewers” (influencers) to get YouTube videos up with favorable commentary. So watching videos might not be as advertising free as you think. FWIW, I’m much like you and I think you are correct and that advertising has little affect on people our age, and even less for people our age with dispositons like ours (grumpy old men). That’s why so much advertising hits the 15 to 30 year old market
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The influencer phenomenon seems to be evaporating. It mattered for a few years, and then it not only didn’t matter, in many cases it became a negative. When I was learning about flooring it was from crusty old dudes who do installations and repairs.
I travel a fair amount. My first question about a hotel? Does it have a balcony? Followed by, location, ‘what’s the shower look like,’ square footage and on-premises dining options. Flights are about departure times, connections and whether they have business class. Objective facts and subjective preference and of course personal experience.
I don’t think it’s just that I’m old and have some settled preferences. I think personal data will be worth even less for the rising generations, first because they don’t have a lot of disposable income. But there’s also the fact that they’re just less materialistic. I think the ego boosts for my generation were cars and dinners out and oversized houses, all things that cost money. The ego boosts for Gens Z and Alpha are followers and likes and re-posts. Things that cost nothing. They don’t seem to GAF about cars, period, let alone cars-as-status. I don’t think they care about single malts, or tasting menus, or McMansions. So what exactly is the dollar value of knowing everything about a person who doesn’t buy anything?
The whole tech economy is built on the untested assumptions of out-of-touch sociopaths. With all the data in the world, Jeffrey Katzenberg thought Quibi would be a thing. It wasn’t. With all the data in the world, no one thought Obsession would be a thing. It was. With all the data in the world Mark Zuckerberg thought his legless Metaverse would be huge. It was an 80 billion dollar bonfire. With all the data in the world our tech overlords think when we call customer service we want to talk to an AI, but I’m pretty sure the single most common interaction with customer service AIs is: get me a human.
Netflix and Prime Video have yet to ever suggest anything I actually watched. As for YouTube, I keep having to wipe my history to stop it from trying to guess my interests. Human beings are not sets of data. All the millions of bits of data collected about me are worth absolutely nothing.
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West Elm, Pottery Barn, Ruggable, IKEA, Etsy and Home Depot. Where else were we going to get stuff?
Crate and Barrel, Room and Board, Big Bob’s Furniture Pit, Target and Lowe’s. And a lot of others that I can’t think of off the top of my head (or make up).
You are not immune from propaganda*. The fact that you think you are just makes it easier for it to land.
*: commercial or political.
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Except West Elm and Pottery Barn are the same company, along with Williams Sonoma. Target, no, we bought one assemble-it-yourself thing from them and it ended up going straight in the trash. Same for Wayfair.
C&B goes chilly stylistically, and we were looking for warm because all our existing furniture was chilly. Restoration can fuck right off with their prices. Macy’s was a surprise – we got some crazy good deals. We also looked at Room and Board which we know from Minneapolis and nothing quite clicked.
Ruggable is not a choice, it’s a necessity. We have a Pug. People who have Pugs know what I’m talking about. We can’t have nice rugs.
And I forgot to mention Costco where we got some nice patio furniture.
It all comes down to pictures, prices and delivery dates. Google. show me cherry wood nightstands. I get half a dozen options. I like two. One delivers in a week, the other ships within two weeks.
ETA: Oh, and IKEA because when we lived in Italy it was the only real choice, and I know their stock by heart.
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For several years Apple has gotten huge grief from the technology community (but not their customers) about how woefully behind they were in AI. I’m beginning to think they were on the right track. From a TPM editorial:
the Stanford Institute for Economic Policy Research. They have a new study out basically making the bubble case. Axios has this line in their write-up of the analysis: “They found that the companies would need to triple or quadruple their AI revenue next year and every year after that for the next decade for this to work out.” The “they” here is Alphabet, Amazon, Meta, Microsoft, Oracle and SpaceX — basically the non-“frontier” AI hyperscalers.
Needless to say, those are pretty wild growth rates to hit. And Bernstein and Cummings say it’s a race to growth that those hyperscalers seem to be losing. “AI firms are losing a race against time,” they write. “Investments are far outpacing profits, and while we may be wrong, we’re hard-pressed to see how the latter can catch up to the former.”
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I dislike Apple for other reasons (not worth getting into).
As to AI profitability, here’s one Sam Altman in 2019:
“We have no current plans to make revenue. We have no idea how we may one day generate revenue. We have made a soft promise to investors that once we’ve built this sort of generally intelligent system, basically we will ask it to figure out a way to generate an investment return for you.”
Oh, be still, my rolling eyes.
I wonder if Sammy knows some questions have answers like “It can’t be done,” “absolutely impossible,” or “go back in time and invest on something, anything, else.”
In the early days of the internet, think dial-up modems and print magazines about the internet, when millions upon billions of dollars were being pumped into just about every startup with a website, there was much talk that no one had figured out a way to make money off the internet.
This wasn’t quite true. there were some amateur porn sites that charged real money for real bawdy photos that took minutes to download. And I think Amazon was making money, albeit not yet profits, from selling books online (the good old days are never coming back).
Eventually, though, oodles of money got made online, and the trend shows no sign of slowing down; especially if we include things as Uber, food delivery, etc. as online businesses.
Happy ending. Except for the investors who lots tons of money in great boatloads when the bubble burst. Also the telecoms who took years to realize gains from the miles and miles of fiber optic cable and other infrastructure; which were probably mode by the companies that acquired the broke telecoms…
Maybe AI will be profitable someday. As is, I can’t imagine paying a penny for it. I use it for fun, mostly. But it’s not so enjoyable I’d pay for it. maybe I don’t know how to use it effectively. As I’ve posted here extensively, I’ve tried without much in the way of good results.
In contrast, I did pay for internet access early on. I don’t care if websites were making money or not, there was too much useful, entertaining, and interesting stuff being put in there.
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Someone (maybe someone here?) recently pointed out that the AI crash, if it comes, may be like the dotcom crash – it comes about because of massive over investment, with ever stupider money chasing ever stupider things, despite the fundamental technology being useful and important
[Edit: I see Kathy was there first]
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I think LLM’s, which is where all the money is going and is what most people mean when they say “AI”, will be extremely useful for a small but important subset of what it is being used for today. For example, language translation or real time captioning is a great use. But a robotic surgical device based on LLM’s? Please. You don’t want a system that could keep on changing. For a year or so it works great, and then it goes down a literal dead end for the next few patients?
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It’s now the “literal” apocalypse, e.g. the apocalypse for the word “literal”. Yesterday a colleague said, “cleaning that chamber is a literal pain in the ass”, and I said, jokingly, “Just what are you using to clean it?!” and he didn’t get the joke even after I explained it to him. In his book, “literally” just means “very”.
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One of the proofs of my proposition that accumulations of personal data are pretty much worthless is that none of the big tech players was able to predict that people would rise up in a bi-partisan rage against data centers. They knew everything there was to know about hundreds of millions of people and yet entirely missed one of the most potent political issues of this cycle.
No amount of data, and no future AI, will ever be able to predict human behavior.
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The use of your data can be much more insidious than simply trying to sell you stuff. For instance, say you have cancer and you or your wife try to book a hotel room near a hospital. They could raise the rates based on the fact that you are unlikely to book farther away no matter the cost. Or let’s bring LLM’s into this. You are a young woman looking for a job, and have also been searching online for baby paraphernalia. You apply to MegaCorp, but the AI ranks other employees over you. It’s because you are likely to have a baby soon. When asked about it’s reason for ranking you low, it makes up an acceptable sounding criteria, and so MegaCorp is off the hook for discrimination
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none of the big tech players was able to predict that people would rise up in a bi-partisan rage against data centers.
They absolutely knew and expected a backlash. They try to ram mega data centers through the approval processes as fast and as quietly as possible, in communities where there is less organizing on the ground ahead of time.
A lot of the most important decisions are being made at the planning and zoning level of local government, and big tech is hitting that hard, in enough places so that even when there is a loss in one there are successes in a few others.
And then there’s the level of corruption or “business-friendly” policies at these lowest levels of our governments, where there is the least independent reporting.
Dude, you’re not firing on full cylinders today. Their goal isn’t to put a mega data center in your backyard, it’s to put that mega data center in the backyard of someone who doesn’t know how to push back fast enough.
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Data can be very predictive, especially large amounts of data.
The reason that none of these big tech data jerks predicted the backlash is that they are consistently high on their own supply. They genuinely think they know more, and are better than, everyone else. Musk rather famously refuses to have a communications department, because he thinks he knows everything.
It’s hubris, not analysis, that is their problem.
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To claim Whiskey Pete has lost it implies at some point he had it.
Of course, no military man worth more than a nickel ever grew a beard.
And he’s brough Adolf back into government, in something he’s certainly not qualified to do. If you want someone to expound on the future of war, there are a lot of Ukrainian officers who could do the job.
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