If you were wondering why stocks have held up so well despite a looming banking crisis?
#LIQUIDITY !
The Fed Balance Sheet increased by a whopping USD 300 billion+ last week.
To conclude, today looks a lot like the 1990 recession:
War, a massive spike in commodity prices, hot inflation, Fed hiking, inverted yield curve, growth collapse, rising unemployment, extreme bearish sentiment and a ~20% drop in SPX.
It’s also a pretty good fit contextually…
“Shaded areas in Figure 14 reflect periods in which banks’ willingness to lend was in the lowest tercile of history…Discretionary stocks have outpaced staples by 15% (look forward) when lending standards are at their tightest.”
Great stuff from Aram Rubinson.
Also leads 10 yr.
If an inverted yield curve still functions as a telltale sign of recession to come, then the idea of a "soft landing" or "no landing" is getting more & more fraught. The inversion in the benchmark 2-10s U.S. yield curve has plumbed to new depths following today's CPI print (1/4)
What many don’t realize is, on the other side of a ChatGPT session is a $150k server that costs ~$16/hr. The server goes 24hrs/day and can time slice efficiently. But the economics of scale aren’t that different from a human.
AI won’t be free like search was, at least not for awhile. We’re just beginning to understand the economics and viable business models. First technology innovation, then the business innovation.
@espn@wojespn The Nets traded away Kyrie Irving, KD and James Harden for:
Ben Simmons
Seth Curry
Andre Drummond
6 1st round picks
Cam Johnson
Miklal Bridges
Spencer Dinwiddie
Dorian Finney Smith
$GOOGL Shocking slowdown to +1% rev growth (+6% last Q), WTF 😳? Cloud +32% 👍, but down from +38% last Q. YouTube, Search, Ad Network, Services: All shrinking 😵! Margin fell from 29% to 24%. WTF is going on & how will this turn? Still a monopoly yes, but what’s in it for us? 🤔
We have a very unfortunate news.
This group under a reservation name Rie Kurita came in for dinner with 6 guests this past Sat night at 7pm. Their total bill was $425.41.
We got a call from a gentleman who said his card was used at Cassava for that amount but he did not dine.
The Interest Expense on US Public Debt rose to $775 billion over the past year, a record high. If it continues to increase at the current pace it will soon be the largest line item in the Federal budget, surpassing Social Security.
1) The fact that Twitter is running well with headcount down significantly really matters.
Whether they admit or not, everyone in SV admires Elon.
A lot of venture funded CEOs are sending emails like this; inspired by Elon and taking drastic action.
Margins are going up.
The bull case for semiconductors.
Doubling the quality of an AI algorithm generally requires a 10x increase in the data used to train the algorithm.
AI can be superhuman, but it requires a lot of semis to get there. *Much* more than software written by humans.
Via @zswitten
3) Most importantly, Sundar thinks LLMs are a threat.
At least they are responding intelligently by focusing on the threat that matters unlike the social networks who ignored TikTok and IDFA/ATT until it was almost too late in favor of doing “important work” on the Metaverse.