The problem here is the same as in the other firms in the AI space. It is not that AI does not perform some useful function; it does, but the value of that function is still up in the air despite all the hype. The problem is the cost and the fact that the billable price per unit is being rapidly destroyed by commoditization and, on an straight analytical basis, that sort of "cost exceeds revenue, revenue-per-user will decline due to competitive pressure, and there's no believable path out of that box" problem is exactly what sunk those three companies above. There is no getting away from mathematics in any line of business.
Friday, August 7, 2026
Tucker Carlson unveils 10-point manifesto amid third-party speculation - (And Trump remains.. "unequivocal leader" of the Republican Party - the most useless entity in American politics! - CL)
https://www.axios.com/2026/08/06/tucker-carlson-third-party-israel-trump
- The White House dismissed them as an "embarrassing collection of mostly whiny turncoats who dramatically overestimate their influence and relevance," while declaring Trump the "unequivocal leader" of the Republican Party.
5GW Meets 3GW - Vox Popoli
The militaries of the West are not even remotely ready to fight WWIII:
A top military official has claimed that Nato is more than a decade behind Russia’s military capabilities, months after a British brigade was wiped out by a Ukrainian unit in war games. Last year, the UK took part in a war simulation in Estonia involving more than 16,000 troops from 12 Nato countries but were ‘destroyed’ by Ukrainian troops in a ‘horrible’ defeat.
The embarrassing loss came only months before Ukraine’s former commander-in-chief warned that it will take more than a decade for Nato to catch up to half of Russia’s military capabilities. Valerii Zaluzhny, considered to be one of the most trusted public figures in Ukraine, has said Nato was still behaving as if future conflicts would be similar to the Second World War.
Kyiv’s ambassador to Britain reportedly said: ‘Most likely, Nato will remain in the same form as it is, and will spend 12 years, like Ukraine, transitioning to standards that need to be achieved in order to reach at least half of the level of the Russian Federation.’ The former general added that Ukrainian forces were superior to armies in Nato, who were still working to ‘doctrines’ set up in the 1940s, according to The Times.
It’s not possible. The Western fake democracies have degenerated under six decades of liberalism, feminism, and immigration, so their capacity to even make the necessary decisions to begin catching up is nonexistent.
It’s not an exaggeration to contemplate the possibility that 5GW marks the effective end of the West’s centuries of dominance.
It’s The Math – How China Is Avoiding The AI Bubble
August 4, 2026
It’s The Math – How China Is Avoiding The AI Bubble
The Artificial Intelligence bubble in the United States is still growing. It is consuming a large share of the available financial resources. But its output, in form of real products, is so far rather meager.
There are some code generation tools which are, at times, helpful, but, unless subsidized, very expensive. There is ChatGTP and other squawk boxes which in the end are just new forms of inherently unreliable web search tools.
What is missing are useful mass applications billions of people are willing to pay for.
Still – a large number of ‘very important people’ believe that the Large Language Models, which are at the core of OpenAI’s and Anthropic products, will one day reach the capabilities of sentient beings. That is, in my view, utter bullshit, but who am I to tell you.
The NY Times has a long write up (archived) about Oracle founder Larry Ellison and his bet of nearly everything he owns on the A.I. bubble. It states:
The story of A.I. has been as much a financial story as a technological one, a question of how to structure the mind-boggling investments required to train and run the models. Few people doubt that this technology is going to change everything. What’s less clear is when the profits are going to start rolling in and how big they are going to be. “To me, it’s a math problem,” says Asad Ramzanali, the director of A.I. at a policy center at Vanderbilt University. “We are making trillions of dollars in investments on the back of tens of billions of dollars in revenues.”
That is why Ed Zitron and others will rightly tell you that the huge investments spent on AI are making no sense at all.
Where are the products and the customers that will allow to recuperate the hundreds of billions of shady dollars spent on data centers for AI?
The financial structure of the data center build-out makes it especially vulnerable to a crash. The deals themselves are built on enormously complicated debt and equity schemes that involve circular financing. The hyperscalers are investing heavily in the same companies they are counting on to buy their computing power. It’s what economists call an interlocking liability structure. If their customers struggle to monetize their products, they will be hit extra hard — and so will their investors, which include a lot of everyday Americans. And these are just the U.S. companies. The A.I. boom has been a global phenomenon; an A.I. collapse would be as well.
The NY Times presume that everything the U.S. does is copied throughout the world. If the bubble burst in the U.S. it will, in consequence, also burst in other places – especially in China.
This is a misunderstanding of what the Chinese AI models are, and what Chinese AI companies are doing.
The Truth Exposes A Fundamental Flaw - Denninger
Reality is that the US defense industry is money-focused. It has become that way because we've not had to actually fight anything on our own soil nor really project power in a meaningful way for more than 50 years. Even Vietnam was not really that, nor was Korea, never mind all the smaller stuff.
Why?
Because its always been, in those cases, somewhat else's problem in the main.
Look at the defense industry around any of our larger military installations. They are all designed around "better, perhaps faster, but always more expensive." THAAD, for example, is roughly a billion per battery and about $13 million per missile. A single Patriot is somewhere between $3-5 million depending on the variant and again, the entire battery including fire control and such is close to a billion each.
Our "defense department and industry" considers a variant in development for use against "air-breathing" threats "cost effective" although those are estimated to come in between $1.5-2m per shot -- and not yet available.....
This against drones that can be fielded for a few hundred dollars a crack up to perhaps $10-20,000. Each of those carries perhaps a half-dozen or less (anti-personnel devices, small and cheap) to a hundred pounds of warhead (aimed at infrastructure and commercial transportation.)
These are all buildable today from commodity parts, are extremely cheap and inertial + GPS navigation, plus inexpensive machine-vision means they're true "fire and forget" sort of weapons. All it has to do with the first two is get close enough to be able to see whatever it is intended to hit and an enemy, whether foreign or domestic, could trivially launch a thousand of the small ones for under a million dollars -- or $10 million for the larger ones!
We have exactly zero capacity to knock down anywhere near a majority of such a swarm attack, say much less all of them and the larger, infrastructure-targeting capable ones can easily have ranges in the few-hundred mile area meaning they can literally come from anywhere all any time.
Civilian infrastructure and transportation simply cannot be hardened sufficiently to withstand such strikes and survive. It is both cost-prohibitive and in many cases physically impossible. For example, protecting power grid access in a city against such an assault simply cannot be reasonably done; the attack surface that you can be hit is too large and impossible to successfully defend. If the goal becomes to go after people in authority instead of infrastructure it becomes even more-impossible; a machine-vision system that targets law enforcement or fire department personnel, as an example, would lead to empty streets in both cases as soon as the people employed in same realized what was going on. Exactly zero firemen are going to go extinguish a fire if they begin to come under attack by small drones that can approach at five times a man's running speed, ram their target and explode.
Eisenhower warned of precisely this, that our military's supply chain would become intertwined with capitalist interests and corrupted leading to shooting at $20,000 drones with $4m interceptors. There is no way to win that fight for more than a short time. Reality in all conflict, whether civil or otherwise, is that money and "better technology" is always overcome with raw numbers if the numbers are far enough in your favor and you can do damage of importance to anything with said numbers.
War has always been about material and logistics all the way back to chucking spears and a failure to recognize when those logistics and weapon options change has frequently through history wound up being the last mistake you get to make.
Tuesday, August 4, 2026
Hyperscaler Bankruptcies Coming - Denninger
Read the title.
Then read it again.
Then find everything in your portfolio connected to those firms and contemplate protecting against a wipe-out in all of them.
Here's why: China's DeepSeek has popped out with its latest model at 1% of the price of competing models.....
....Incidentally not even an embargo against Chinese AIs will do anything about this as open models are engaged in the same sort of pricing-level attack so even an attempt at raw protectionism will do exactly nothing.
Anyone who has committed to said CapEx on the premise of a future ROI at even 10% of their original pricing is, in my opinion, absolutely screwed. I can assure you nobody modeled a 90% crash in pricing say much less a 99% one.
There is no possible way out of the box for these firms; you cannot, no matter what you do, survive a 90% or 99% price whack imposed on you by competitors and survive. No chance. Nobody is going to pay ten to one hundred times more for the same thing.
Ever.
The scope of the economic impact headed our way that cannot be evaded has never occurred before and given a roughly 20% increase in margin debt just in the last few months the market impact when this blows has never occurred before either -- except perhaps in 1929 when brokerages allowed 100x leverage.
Canary in the Coal Mine: Trucking Industry Going into Cardiac Arrest
A routine industry report from FreightWaves provided the clearest evidence yet that the global energy crisis has moved from a macro-economic abstraction to a granular, physical collapse.
While the financial press obsesses over the latest Trump-Iran head fake and the dead-cat bounce on the Nikkei, the trucking and logistics sector—the literal circulatory system of the modern economy—is going into cardiac arrest.
Here’s what the data tells us:.....
....These bankruptcies tell us that companies can no longer pass on the cost of fuel to their customers, and they can no longer absorb the losses themselves. They are simply shutting their doors.
3. This Is Happening BEFORE the SPR Floor
This is the most critical point. Tracking shows the U.S. Strategic Petroleum Reserve’s sour crude—the only type that can be refined into the diesel these trucks run on—is at 197 million barrels and falling. The operational floor is 140-150 million barrels. At current drawdown rates, we don’t hit that until September.
In other words, the diesel crisis is already destroying companies while the reserve is still (technically) flowing. The market is running out of affordable fuel faster than the SPR is running out of oil. When the SPR does hit the floor in a few weeks, the current trickle of bankruptcies will become a flood.
4. The “AI Layoffs” Smokescreen Is Officially Dead
You can’t blame these layoffs on artificial intelligence. No one at Freight Handlers lost their contract because ChatGPT started unloading pallets. This is purely the result of diesel prices making entire logistics routes uneconomical. The corporate narrative that “AI is causing mass unemployment” has always been a convenient cover for the demand destruction and energy costs that are actually breaking the economy. This report is the smoking gun.
The Big Picture
For months, I’ve been tracking the energy shock from the Strait of Hormuz through the SPR, into the distillate supply, and now into the real economy. The FreightWaves report is the moment the crisis becomes undeniable. Trucks are the connective tissue of everything: food, medicine, fuel, parts. When the trucking companies start to go under, it means the goods they carry will soon stop arriving. The ghost of empty Store shelves is now visible on the horizon.
The next phase is predictable: as logistics providers fail, their creditors—regional banks and commercial lenders—will start taking losses. The financial system, which has been propped up by hopes of a diplomatic miracle, will face a reckoning rooted not in sentiment but in unpaid invoices and repossessed trucks.
This is not a drill. The physical economy is seizing up in real time. The headlines about peace talks and stock market rallies are noise. The signal is in the trucking bankruptcies. Pay attention.
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