JD Straight Up - 14Sep26 - AI-pocalypse Now
AI-pocalypse Now
Drulard Family Capital Fund
Fortnightly Macro View
JD Straight Up:
S&P 500 at 7620 – down 1% from 7680 two weeks ago
VIX at 17 – up 12% from 15 two weeks ago
10yr Treasury yielding 4.98% (up 5% from 4.75% two weeks ago)
Agg (US Aggregate Bond Index) at 96.08 – down 1% from 97.40 two weeks ago
Gold at 4322 per oz (down 4% from 4484 two weeks ago)
Silver at 63.69 per ounce (down 6% from 67.19 two weeks ago)
Crude Oil (WTI) at 104 per barrel (up 17% from 86 two weeks ago)
Bitcoin at 79k (up 1% from 78k two weeks ago)
JPM shares at 352 (down 1% from 356 two weeks ago)
Deutsche Bank shares at 39.53 (down 2% from 40.15 two weeks ago)
Truist shares at 50.48 (up 1% from 50.03 two weeks ago)
Blackstone shares at 128.59 (down 11% from 142.76 two weeks ago)
Magnificent 7 Index at 450.93 (up 2% from 442.44 two weeks ago)
US unemployment: at 206,000 in latest claims – up 2% from 203,000 two weeks ago
EUR at 1.16 USD (flat from 1.16 two weeks ago)
GBP at 1.35 USD (flat from 1.35 two weeks ago)
Macro Environment
US inflation is at 3.4% and GDP growth is at 1.5% with 10yr government debt yielding 4.98%. EU inflation is at 3.3% and GDP growth is at 0.9% with average 10yr government debt yielding 3.91%. War persists in Ukraine and has entered its fourth year. Ceasefire is in place in Gaza. Hostilities continue between Iran and the US and Strait of Hormuz is blocked. Iraq bombed and closed an alternative Saudi pipeline. Oil prices spiked.
Macro View
There are two pillars at work here. First is the traditional one of energy, war, monetary policy, inflation and a typical flow of news versus uncertainty and analytical projections to fill the void. Second is the emergence of AI and the complete unknown and unknowable aspect. The two will inevitably converge into a singular reality, but governments and administrators dance around the first in their time-honored way while they ignore the second. This cannot last for long.
Relevance
Fears are running through the infosphere of an AI apocalypse where algorithms break loose and end humanity. Milder concerns about internet blackouts, kill-switch events, bot driven DDoS attacks contemplate a world where humans persist but without access to any digital technology. Anthropic's Amodei published a 3,800 word missive supporting a slowdown in development of frontier models and other labs and their leadership concurred. It is unlikely all model builders globally will agree to postpone their plans or subject themselves to the constraints being proposed by four or five US AI leaders. So where does that leave us? US administration comments suggest an AI arms race with China while US labs seem to be requesting regulatory intervention. The great hope for productivity and salvation to combat rampant inflation and growing debt across countries, companies and consumers now sits in limbo awaiting governing direction.
Head Scratchers
1 - When have governments ever solved an issue like this? The Manhattan Project? How well did that serve humanity? Perhaps the jury is still out.
2 - What are the best hedges against a digital blackout? Small gold coins? Cowrie shells? Physical bitcoins? How about skills in growing food and harvesting the seas for nourishment. My gardening skills have been growing by the day. I will work on my spearfishing next.
Drulard Family Capital Fund
Drulard Family Charitable Fund
#51 - 14Sep26
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