Updated Fed Z tables as of mid September. Stocks have officially entered territory that can only be described as "the devil's bargain."

The popular media always at least 6 months to a year behind our narratives. @GammaStr1ke

New Fed Z Tables just dropped for 25Q4. You must own stocks--more than you ever have before--to preserve our country. You must buy. You must hold. You must YOLO. And you must never sell, or you will be tried as a PANICAN and burned at the stake.

New Fed Z tables just dropped.

This is how you know they will fail on economic grounds. To become general using statistics only, you must emulate all future possibilities. This always blows up either cost or time. The solution is what people call “building world models.” Why are world models so powerful? They are simple yet general. What I call elegant. The most valuable one we have is Newtons law F = ma. To develop such a model requires a surprising amount of intelligence current AI models completely lack. I must be able to generalize. A punch, a car crash, and colliding hydrogen molecules are all variants of the same phenomenon. I must be able to abstract. I can create concepts called mass and momentum and use those to create yet more concepts like inertia, then a concept I call force can modify a mass’s inertia. Then I can describe ALL interactions between macroscopic masses (and most atomic!) with four symbols: “F=ma.” This gives me incredible predictive power with little storage or compute. It is wildly elegant. Contrast this with LLMs, where they are incapable of doing anything other than giving every unique symbol in language a unique token, and seeing how we string them together so they can statistically approximate it. There is no abstraction and no generalization. There is no elegance. It’s dumb brute force, and it’s why these models are so big. Ironically the bigger these models become, the DUMBER they become. And economically they cannot compete with human elegance. One exception to this is in small, highly specialized models. If you need a robot arm to spray insulation into the shell of a fridge, it can do that very efficiently and even manage small variations much better than a human. This automation has been occurring for over 100 years now. All automation relies on minimizing variation and using some reasonable amount of compute combined with robotics to manage that variance very efficiently. The problem? When you increase the variance, the compute blows up. This is why self driving, humanoid robots, LLMs and any other statistical models of large variance environments will always FAIL to compete with human elegance. This is the road to ruin if we do not abandon it.

I'm just going to post this because it really doesn't need any nuance. No matter how you slice it, this is the biggest stock bubble since 1929. $SPX

One of the most successful religious beliefs of all time is the Phillips Curve: inflation inversely proportional to unemployment. In practice, they have no measurable relationship at all. Unemployment in the ranges we typically see have no effect on price growth. Inflation is caused by money growth beyond output growth. If anything, growing the money supply with high unemployment can make inflation worse. Currently, the money supply is growing due to speculation in markets and investment in AI infrastructure. The people who own a large share of the assets are retired. What do any of these activities care about unemployment? Over the last year, the economy grew the money supply by $1T, despite jobs rolling over, and it's on pace to keep accelerating. The inflaters are the rich and the old. The top 10-20%. Those who already have more money than sense and will dump their money into any unproductive speculation for the thrill of it. Unemployment is irrelevant, and inflation will continue to be a problem until someone has the guts to do the most unholy of acts in the church of Phillips: go after the asset bubbles. Many people think that we have not yet reached a true Ponzi stage, but I think we've been there for a long time, and it's making itself known in increasingly zany ways. $BTC treasuries, where storing digital nothing can create trillions in $ value. Creating nearly trillions in value leveraging the future compute of GPUs (leveraging the nothing of the future!). It costs less than it ever has, in my lifetime at least, to create new money. The barrier is so low, the only thing stopping most people from doing it is a sense of ethics, duty, and morals. The noble idea that money should be the reward of labor that betters your family, community, and country. In our current American Ponzi, these people have been made out to be fools for believing in the social good. The winners are the grifters, who themselves do no real work, but have learned the language of work, just sufficiently to grift their way into the next loan, and the next one, and the next one, each one as painless as the last, as the cost to print money remains nearly nothing. Even when leverage is caught bare assed, like a commercial space downtown that just short sold for 90% drawdown, the pain is absorbed into the system and buried, allowing the grifters to continue levering seemingly forever. Even the President of the United States no longer hides the naked grifting, selling meme coins for billions, made from nothing and requiring no real effort or work, having been rewarded with the most power in the world to continue his grift after a lifetime of grift that was handsomely celebrated all along the way. But the grifting has a price, paid by those who are not valued or even counted, buried in statistics that hide both their despair and the largesse of the elite by mixing the two things together until they look "average." Grifting is a zero sum game, and the losers are not the nobility, but the noble ones who cling to the silly belief that we are all in this together. Make no mistake about it. The bottom 70% do not want lower rates. They want their contribution to society to be adequately valued, and the compensation for that work to allow them to function within that society with dignity. They don't give a single fuck if some slumlord goes bankrupt because he leveraged all of his properties to the tits to maximize cash flow and can't afford to sell for a loss. If anything, they want that person to suffer, MORE than they have suffered, because they suffered so that his grift could live on. The bottom 70% want lower prices, and the only satisfactory solution is the collapse of the everything bubble, the very notion that capital is more valuable than labor. A catastrophic collapse is their fantasy, their pipe dream. And make no mistake, eventually they will get it. Because when all of the financial engineering bullshit gets too far out on its skis, it will all come tumbling down. And it is bullshit. We have leveraged, by my rough estimates, nearly 20% of the US GDP into nothing, either the nothing now (crypto) or the nothing future (AI). There are doubtless many areas I know nothing about that are worse (RE). The money causing the inflation is built on nothing, and when it pops, it's going to pop hard. I only hope that when it does, we will have the courage to say "no more" to the religion of the Phillips Curve, abolish the fed, and rightfully recognize that it is labor that makes our country great, not grift. Fuck the Fed, and fuck your rates.