My view of AI (9)

[chuft]

Nvidia passed 5 trillion market cap today. Over $208 a share, was $14 three years ago. Dividend is $0.01, yield 0.02%.

When this balloon pops and the AI bubble bursts it's going to be really ugly. I look forward to the hype reversing and everyone scrambling to claim they didn't waste money on this AI foolishness.

[LazyPooky]

Nvidia passed 5 trillion market cap today.

That's 2,500,000 times the worth of LazyTown

[chuft]

Chairman of the Federal Reserve Bank


Jerome Powell says the AI hiring apocalypse is real: ‘Job creation is pretty close to zero’




Economic effects are being felt already by restaurants as young people struggle


U.S. households earning less than $100,000 a year, which make up about 40% of Chipotle's sales, have pulled back sharply, executives said. Customers aged 25-35 years were particularly pressured, owing to rising unemployment, resumed student loan payments and sluggish wage growth, CEO Scott Boatwright said.

Chipotle cuts sales forecast again as inflation-hit diners pull back, shares slump


One detail struck me: only 40% of Chipotle's customer base make under $100,000 a year. That means 60% make $100K or more. That is the top 18% of US wage earners. Not what I would have expected for a fast food restaurant.


Edit: I notice that article said "households." Other articles I read previously said "But consumers making less than $100,000 – about 40% of Chipotle’s customers – have drastically cut back on dining at restaurants due to economic fears, Boatwright said." "Consumers who make less than $100,000, who account for roughly 40% of the company’s customer base, have further pulled back their spending, Boatwright said."

There is a big difference between household and individual income so it is not clear to me what he actually said.

[BRBFBI]

chuft Re: AI hiring apocalypse

Jerome Powell says he doesn't want to raise rates because that's bad for employment but can't lower them either because that's bad for inflation. It really seems like interest rates are far too crude a tool to address the way AI is supposedly changing the labor market. Discounting the "AI is all hype" theory for a moment, if AI really does fundamentally change the nature of work we're going to need much more sophisticated measures to keep the bottom 90% of society from being totally crushed.

I know several highly educated recent graduates who haven't been able to find jobs in their fields. One of them has a masters in computer science. 10 years ago they would have been making a quarter million dollars a year including stock options working at Google, and now they're applying for cashier jobs. Impossible to say how much of that is AI related and how much is yet another sign that the economy isn't doing as well as the index funds suggest.

[chuft]

The Fed and interest rates/banks is a huge topic and unfortunately trying to discuss one part without a grounding in the fundamentals would be...kind of pointless. At the very least it would require a new thread. I will just say this. Look at these two charts. Based on the first chart you would expect inflation to go sky high starting in 2008. Look at the second chart. Did it?







Consumer inflation does not go up because of interest rates. Consumer inflation goes up because of either an increase in the money supply, or, more rarely, a supply shock with very broad impact (such as the logistics disruptions in 2020 due to covid, or the OPEC oil embargo - when energy prices go up, everything else has to go up). Almost everything you read in the mainstream press about finance is wrong and oversimplified.

In general you are correct - monetary policy is not going to solve broader societal issues such as technological disruption. The Fed is just doing the job in front of it, which is monetary policy. Their dual mandate is low inflation and high employment and they use their tools (interest rates are the red flag at the bull that everyone fixates on, but the more powerful tools are more obscure) to try to carry that out. They know they can't fix problems like AI disruption, but they nonetheless have to address the balance between employment and inflation.

What is real is unemployment is rising and job creation is nonexistent outside of certain fields such as health care. This may be due to AI, or it may have nothing to do with AI (e.g. executives know it's tariffs but they don't want to get on Trump's wrong side so they say it's AI). The Fed doesn't know what the cause of the unemployment is, but unless it is something truly disruptive and not receptive to economic incentives (like AI replacing humans) then what they do could help, so they will try. It's their job.

[chuft]

yet another sign that the economy isn't doing as well as the index funds suggest.

Economists agree: You’re not crazy for feeling like the rich get richer, and the poor are doing worse. Welcome to the ‘K-shaped economy’


Powell actually used the term K shaped economy the other day. Rich and poor increasing and middle class disappearing.

First, the stock market is not the economy, especially in recent decades. It boomed in 2020-21 during mass unemployment due to covid.

Second, the index funds indicate activity by the wealthy. This gives a false reading on how most people are doing, as, now, does consumer spending since the top 10% do more than 50% of the spending now. I have mentioned this before, this article goes into it more.

A company's stock usually goes up when it does layoffs. Investors like cost-cutting. The people losing their jobs on the other hand, see this as a negative economic event.

[LazyPooky]

Russia's First AI Human Robot Falls Flat On Its Face During Live Demo

https://www.freepressjournal.in/tech...mo-watch-video

[chuft]

Hopefully a metaphor for the entire industry.

[boredjedi]

Yeah they still really haven't nailed the walking on two legs yet.
Shows how complex that entire biological system is for that to work.

[chuft]

Humans evolved for it and look how long it takes one of us to learn it.

[boredjedi]

And most, if not all, still lose their balance and fall over.

[chuft]

Yes like when I fell on my knee a few years ago. Took a year to stop hurting.

[chuft]

The ‘Big Short’ investor betting $1 billion against the AI bubble says Meta and Oracle’s accounting is hiding the brutal truth


https://www.msn.com/en-us/money/savi...th/ar-AA1QolbR


Lot of interesting info in this article about not just accounting but the electric grid, transformer shortages etc.

[boredjedi]

The Ai bubble

[boredjedi]

This product has been making the rounds

Ai generated Grandma