Tech Right, 10 bits, Smart Screens, AI, Gambling, Memes, Soviet Magic

The key reports scheduled for this week are the advance estimate of Q4 GDP, December New Home sales, December Personal Income and Outlays and November Case-Shiller house prices. ----- Monday, January 27th ----- 8:30 AM: Chicago Fed National Activity Index for December. This is a composite index of other data. 10:00 AM: New Home Sales for December from the Census Bureau. Dallas Fed Survey of Manufacturing Activity for January. ----- Tuesday, January 28th ----- 8:30 AM: Durable Goods Orders for December. The consensus is for a 0.8% increase in durable goods. FHFA House Price Index for November. This was originally a GSE only repeat sales, however there is also an expanded index. 9:00 AM ET: S&P/Case-Shiller House Price Index for November. Richmond Fed Survey of Manufacturing Activity for January. This is the last of the regional Fed manufacturing surveys for January. State Employment and Unemployment (Monthly) for December 2024 ----- Wednesday, January 29th ----- 7:00 AM ET: The Mortgage Bankers Association (MBA) will release the mortgage purchase applications index. FOMC Meeting Announcement. No change to policy is expected. Fed Chair Jerome Powell holds a press briefing following the FOMC announcement. ----- Thursday, January 30th ----- 8:30 AM: Gross Domestic Product, 4th quarter and Year 2024 (Advance estimate). The consensus is that real GDP increased 2.6% annualized in Q4. initial weekly unemployment claims report will be released. The consensus is for a increase to 228 thousand from 223 thousand last week. Pending Home Sales Index for December. The consensus is for a 1.0% decrease in the index. ----- Friday, January 31st ----- 8:30 AM ET: Personal Income and Outlays for December. The consensus is for a 0.4% increase in personal income, and for a 0.5% increase in personal spending. And for the Core PCE price index to increase 0.2%.  PCE prices are expected to be up 2.5% YoY, and core PCE prices up 2.8% YoY. Chicago Purchasing Managers Index for January. The consensus is for a reading of 39.7, up from 36.9 in December.

In the ever-evolving world of artificial intelligence, the stage has been dominated by Western giants like OpenAI, Google, and Meta.

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios. SPECIAL NOTE: The CDC has stopped releasing health data (hopefully temporarily). For deaths, I'm currently using 4 weeks ago for "now", since the most recent three weeks will be revised significantly. Note: "Effective May 1, 2024, hospitals are no longer required to report COVID-19 hospital admissions, hospital capacity, or hospital occupancy data."  So I'm no longer tracking hospitalizations. COVID Metrics  NowWeek AgoGoal Deaths per Week518524≤3501 1my goals to stop weekly posts. 🚩 Increasing number weekly for Deaths. ✅ Goal met. Click on graph for larger image. This graph shows the weekly (columns) number of deaths reported since Jan 2020. Although weekly deaths met the original goal to stop posting, I'm continuing to post now that deaths are above the goal again - and at a minimum, I'll continue to post through the Winter.   Weekly deaths have mostly been declining, however weekly deaths are still above the low of 313 in early June 2024. And here is a graph I'm following concerning COVID in wastewater as of January 23rd: This appears to be a leading indicator for COVID hospitalizations and deaths. Nationally COVID in wastewater is "Moderate" according to the CDC but is now declining.

Noah Smith writes a provocative article about memecoins as a novel mechanism for bribery payments. A foreign dignitary looking to gain influence over Donald Trump would like to pay him a giant bribe, but doing so directly is prohibited by all sort of laws. Luckily, Trump has just issued his own memecoin, TRUMP, of which Trump owns 80% of all coins. So why not just buy the TRUMP token, thereby pushing its price up and gifting Trump with even more wealth, in return gaining a degree of influence over policy? The best part is that no money actually changes hands, so it's probably less risky from a legal perspective. The dignitary can just plead "I thought it would go up!", says Noah. Now, I'm not so sure that crypto is ushering in anything unique here. Consider that Donald Trump also owns shares of Trump Media & Technology Group Corp (DJT), which are NASDAQ-listed "tradfi" shares that predate crypto. Why not just buy DJT shares, pump their price higher, and collect favors from Trump? No crypto involved.  In fact, a year before Noah wrote his article about memecoin bribery, Robert Maguire of Citizens for Responsibility and Ethics in Washington (CREW), worried about precisely such a scenario. Any entity wanting to "cozy up" to Trump need only buy a bunch of DJT shares on the NASDAQ, enough that they "get Trump’s attention, but low enough that it doesn’t break the five-percent threshold that triggers SEC disclosure." Consider that Donald Trump and family members hold a 59% ownership stake in DJT equity, which isn't too different from the 80% of TRUMP that they own. Both assets have market caps of around $7 billion. So pushing up the price of DJT will certainly enrich Trump just as much as trying to nudge TRUMP higher. So here's my question: What's the best way to bribe the current President of the United States of America, by pumping the TRUMP memecoin or pumping old-school DJT shares? Before answering it, I want to pause for a moment to reflect. The fact that I am even writing a blog post on the topic of bribing an American president shows how far along a certain financial-apocalyptic timeline we have gone. Back to the timeline. I see two reasons why the memecoin probably presents a better pseudo-bribery option than the tradfi stock.  The first reason is that it's safer to pull off. DJT is listed on just one exchange; the NASDAQ. And the NASDAQ exists in the U.S., which has the most robustly-regulated and well-trusted securities markets in the world. One duty the government requires of NASDAQ is that it surveil transactions in real-time for abusive trading behaviour. Any sketchy DJT purchases could be reported by NASDAQ to the authorities. Furthermore, to get access to NASDAQ-listed shares, a brokerage account is required, and that'll require the would-be briber to pass through the brokerage's identity checks.   On top of that, systems like the Consolidated Audit Trail, a government-mandated system tracking U.S. equity and options trades, gives regulators themselves a means to monitor market activity and investigate potential misconduct. So a foreign dignitary is taking a bit of a risk if he or she goes the DJT route. By contrast, the TRUMP memecoin is hosted on a blockchain, basically a borderless and open decentralized database, not a carefully-guarded database confined to the U.S. The result is that TRUMP can be listed anywhere, including at shady offshore crypto exchanges like ByBit or KuCoin, which surely aren't checking customers for pumps. To boot, these offshore exchanges perform only cursory identity checks, if any. To further protect him or herself, a would-be briber can initiate the pump by sending funds from an offshore exchange, say KuCoin, to a decentralized exchange, or DEX, and only then push the price of TRUMP higher. DEXes are even more hands-off than offshore exchanges; they don't perform any surveillance or identity checks. The riposte to this is that all blockchain transactions are public and observable, so a bribe conducted on a DEX could be traced. Ok, sure. But while blockchain transactions are visible, they aren’t directly tied to real-world identities. Blockchains are pseudonymous. It's a bit like going to a masked ball. Everyone can see who the dancers are, but as long as everyone has their mask on a degree of anonymity is preserved.      So to safely get away with bribing Trump, it sure seems that his memecoin is the better option than NASDAQ-listed DJT. Now for the second reason why the memecoin is better for bribery: it packs more punch per dollar. A memecoin lacks what equity researchers refer to as fundamental value. Its price is solely a function of Sam's expectations of what future buyers like Jill will pay for it, with Jill's expectations conditioned on what she thinks Sam will pay. They are pure balls of speculative energy. As I've referred to them in other posts, memecoins are decentralized ponzi games, zero-sum lotteries, or Keynesian beauty contests. By contrast, DJT is a stock, and stocks provide their owners with a claim on the underlying firm's 1) profits and 2) its assets in case it is eventually wound-up. There is a "something" that buyers and sellers can coordinate on, so that unlike a memecoin, a stock is more than a pure nested expectation games. That's not to say that stocks don't have a big "meme" component (think Gamestop), but the degree to which this guessing game is played is unlikely to ever reach that of a memecoin. The existence of fundamentals makes pumps less effective. As a pump begins to drive the price of DJT higher, the underlying fundamentals will start to give certain existing investors a reason to sell (i.e. "it's now too expensive relative to earnings"), and that selling will dull the pump. Since there are no fundamentals for TRUMP memecoin buyers to latch on to – any price is as good as another – a memecoin pump never gets throttled by fundamental sellers. To sum up, someone who has $10 million to bribe Donald Trump will want to demonstrate to the President that their purchases drove the price of the target asset higher: it'll be far easier to demonstrate this by pumping the frictionless memecoin than the burdened-by-fundamentals stock. Now, if you've gotten this far and think this post is actually about how to bribe Trump, it's not. It's about the often fascinating differences (or not) between crypto and traditional finance. In my view, they aren't really so different. Crypto fans may think there's a financial revolution going on, but there's nothing new under the sun. You might wonder: is the frictionlessness of a memecoin, its lack of fundamentals, and the ensuing incredible ease by which it can be bribe-pumped a new feature that crypto has brought to the table? Not really. There's no technical hurdle preventing the NASDAQ from listing a non-blockchain version of the TRUMP memecoin on its own old-fashioned Oracle database. People could buy and sell this meme-thingy instead of that blockchain version of TRUMP. But securities law gets in the way. Listing an unadulterated ponzi game on a national stock market has never been legal, at least not in my lifetime. Why putting one up on a blockchain is legal is beyond me, but look over there, the President just did it. At the speed we are leaving the sanity train station and heading to financial silly land, I suspect listing pure ponzis on the NASDAQ will soon be an accepted thing. Memeassets everywhere! Bribes for everyone!