WEEKLY BRIEFLY NOTED: For 2024-11-10 Su
My weekly read-around...
My weekly read-around...
ONE IMAGE: True then, True Now:
ANOTHER IMAGE: One of These Things Is Not Like the Other Ones:
#actually, two of these things are not like the other ones.
NVIDIA has current profits because (a) TSMC massively underbid on what it charges NVIDIA to actually make the chips and (b) nobody (except Apple and, to a lesser extent, Google) currently raising huge amounts of money to light or taking the money they have and lighting it on fire trying to deal with MAMLMs dares to take the pause of a year or so it would take to build cheaper and more cost-effective systems for training and inference than NVIDIA+CUDA. Extrapolating Broadcom’s or Lilly’s or Amazon’s or Apple’s or Microsoft’s or Facebook’s or Berkshire-Hathaway’s or Google’s profits into the future is a good and reasonable thing to do. Extrapolating NVIDIA’s profits into the future is not a good thing to do.
But the big thing that is not like the other ones is, of course, Tesla. Think of it as BitCoin, plus it actually makes cars and gives technology demonstrations.
ONE VIDEO: Markus Brunnermeier: 2024 Keynes Lecture:
The International Monetary System & “Safe Assets”
Well worth watching: “Safe assets” the way the term is used today are a really weird beast: they hold value—in fact, sharply rise in relative value—and hold liquidity in times of economic stress, offering a form of insurance against price volatility and enormous optionality whenever networks of debt unravel. Those that can issue such truly due have, in Valery Giscard d’Estaing’s phrase, exorbitant privilege. For the United States right now, one key issue is whether there is a potential for the unraveling of this privilege—and how that would work. But, alas!, Markus does not offer his thoughts about that…
ANOTHER VIDEO: 3Blue1Brown on How Might LLMs Store Facts:
It turns out that the number of nearly perpendicular vectors you can fit into a n-dimensional space grows exponentially with the number of dimensions—the Johnon-Lindenstrauss lemma, that I do not understand. Things to read, sometime:
Anthropic: superposition <https://transformer-circuits.pub/2022...>
Anthorpic: superposition <https://transformer-circuits.pub/2023...>
Neel Nanda Mechanistic interpretability paper reading list <https://www.alignmentforum.org/posts/...>; getting started <https://www.neelnanda.io/mechanistic-...>; sparse autoencode demo <https://www.neuronpedia.org/gemma-sco...>
SubStack Posts:
CROSSPOST: Dan Drezner: <https://braddelong.substack.com/cp/151213988>
Very Briefly Noted:
Finance: When a big institution—like a Vanguard fund seeing a massive inflow, or Berkshire-Hathaway changing its mind—moves the market, is this primarily a revealing-hidden-information effect or just a supply-and-demand with an inertial market effect. And how might we be able to tell?:
Xavier Gabaix, Parameswaran Gopikrishnan, Vasiliki Plerou, & H. Eugene Stanley (2006): Institutional Investors & Stock Market Volatility: ‘A theory of… market movements… due to trades by very large institutional investors in relatively illiquid markets… generat[ing] significant spikes… even in the absence of important news about fundamentals. We…provide a unified explanation for apparently disconnected empirical regularities in returns, trading volume and investor size…. Variances and correlations, are of limited use in analyzing spikes in market activity…. Stylized facts: (i) the power law distribution of returns, with exponent… 3; (ii) the power law distribution of trading volume, with exponent… 1.5; (iii) the power law of price impact; (iv) the power law distribution of the size of large investors, with exponent… 1…<https://pages.stern.nyu.edu/~xgabaix/papers/volatility.pdf>Economics: The first serious sign of a significantly slowing economy, but so far the only serious sign:
Robert Armstrong: The bad jobs report, in context: ‘Our practice is to avoid overreading…. But October’s jobs report… 12,000 jobs…. Hurricanes and the Boeing strike dragged the numbers down…. But 112,000 in downward revisions for the prior two months make the downbeat message hard to ignore…. The critics of the 50bp cut at the last Fed meeting will all be very quiet now… <https://www.ft.com/content/807fde4f-1b07-4549-997c-26072262bccc>Britain’s Labour Party does not seem to understand that the size of the boulder they have to roll uphill requires much more serious action than they currently envision:
Martin Wolf: More muddling through won’t deliver the growth Britain craves: ‘The country needs a strategy that takes on its most obvious weaknesses: Since the global financial crisis of 2007-09, the UK has had an unplanned experiment with “de-growth”. This has taken the form of an unplanned collapse in economic growth. Predictably, this deterioration has caused huge problems for managing the public finances, maintaining public services and keeping the public happy. A stagnant economy is a recipe for general discontent. Last July, the Conservative party, which ruled the country from 2010 to 2024, duly suffered the worst loss in its history. Now the Labour party’s job is to turn the ship around. Will it succeed? The simple truth is that what it offered in the Budget last week is most unlikely to achieve this. The question, rather, is whether anything can do so…. [A] fall in net investment… decline of the oil sector… the UK… [as] financial hub… desperately low savings, insufficient mobilisation of capital for innovative businesses, poor infrastructure, inadequate housing, a long tail of weak companies, inadequate creation of skills, and huge and persistent regional inequalities… <https://www.ft.com/content/2214a41d-c702-4c60-9c36-490cbea54b65>Neofascism: This looks bad: should the Tories retake power in the next five years Britain looks likely to undertake another downward lurch:
Nick Cohen: Kemi Badenoch and the betrayal of an invented past: ‘The UK’s new leader of the opposition Kemi Badenoch did her first interviews today and repeated the line which brought her victory: the Conservative government did not happen…. The Conservative government of 2010 to 2024 was not truly conservative at all…. It was a sellout administration of Blairites in Tory clothing…. Our leaders betrayed us, they say. We failed because we were not right-wing enough…. When Badenoch told the BBC today that the last government “got a lot of things wrong," she meant only that it had not been harsh enough on immigration and public spending, not that, for instance, Brexit had permanently hobbled the economy… <https://nickcohen.substack.com/p/kemi-badenoch-and-the-betrayal-of>Neofascism: Everything is now on the agenda, which means we have no idea what is actually going to happen:
Speaker Mike Johnson: ‘Health care reform’s going to be a big part of the agenda. When I say we’re going to have a very aggressive first 100 days agenda, we got a lot of things still on the table.’ Attendee: ‘No Obamacare?’ Speaker Mike Johnson: ‘No Obamacare. The ACA is so deeply ingrained, we need massive reform to make this work and we got a lot of ideas on how to do that.’ <https://www.nbcnews.com/politics/congress/speaker-johnson-criticizes-obamacare-promises-massive-reform-trump-win-rcna177853> And asked whether he would repeal the CHIPS Act: Speaker Mike Johnson: ‘I expect that we probably will, but we haven’t developed that part of the agenda yet…’ <https://www.latimes.com/politics/story/2024-11-02/house-speaker-johnson-says-gop-may-try-to-repeal-chips-act-then-walks-it-back>Perhaps the best way to view Trump and the Trumpist movement is as Woodrow Wilson come again: we now have all these s*** immigrants and other s*** people here and we need to get them under control. The result after 1912 was suppression of left-wing dissent, the rerise of the Klan, channeling of federal funds away from urban immigrant neighborhoods, groundwork for 1924 immigration restrictions, and so forth:
Tim Burke: Trump Essentials (6): Make America Great: ‘Fascism original-style was partly about the fears of old peoples in newly created or configured countries who had not had much time to grow used to one another, and the desperate desire of their new countrymen to avenge their humiliations in war, in economic power, in international influence, to use their new nations to revitalize what they imagined to be old prerogatives of their peoples.Fascism in America… seems to be a matter of the fears of newer people about the newest people in an old nation…. Trump, after all, is only a third-generation American, and his wife a first-generation one. That’s quite the pedigree to be sounding off about America as a garbage can, to repudiate the New Colossus. It is par for the course in American history, however: it is not the true natives nor the oldest settlers who go coocoo for nativism in its periodic eruptions, but the most recently settled, who fear being turfed out of whatever place they’ve secured for themselves…
MAMLMs: My personal hope is that these tools will wind up saving 10% on my worktime, when all is said and done, plus increase the quality of the information flos onto my screen that I commission from others:
Dan Shipper: The Mantra of This AI Age: Don’t Repeat Yourself: ‘AI won't kill your job. But it will steal your repetitive tasks…. The current generation of AI technology doesn’t live up to the AGI hype…. It can’t figure out problems that it hasn’t encountered, in some way, during its training…. It does, however, very much live up to the hype in that it’s broadly useful for a dizzying variety of tasks, performing at an expert level for many of them…. Yann LeCun, chief AI scientist at Meta, who has repeatedly said that large language models can’t answer questions or solve problems that they haven’t been trained on…. Even if you grant their point, what both Bender and LeCun misunderstand is that they think the powers of the current generation of AI technology is a letdown… <https://every.to/chain-of-thought/the-mantra-of-this-ai-age-don-t-repeat-yourself>But what is the “plateau of productivity” going to look like for MAMLM-derived software? I have said my say <https://braddelong.substack.com/p/notes-chatgpt4s-current-ability-to>, and I think, in order of importance: a way of separating over-optimistic investors from their wealth—rather than FILTH—”Failed in London, Try Hong Kong”—we have FICTA—”Failed in Crypto, Try AI”; natural-language interface to databases; very large-scale very high-dimension regression and classification analysis; the latest wave of American religious or pseudo-religious enthusiasm; “copilots” that suggest the next step'; verbally-expressive software simulations of coaches, companions, and pets; and the intersectional combination of natural-language interface and large-scale regression and classification surveying the internet and regurgitating the internet in the form of ChatGPT, DALL-E, and so on. But that last does not seem to me to be likely to make OpenAI into a long-run viable business in large part because regurgitating the internet does not create smartness:
Alex Tolley: MAMLMs: ‘The Allen Institute… released Molmo… trained on curated data…. They claim their far smaller model is as good as the largest LLM…. This may be as game changing as Watt's steam engine was compared to Newcomen's atmospheric engine. OpenAI may be so big and expensive…that [its] business model is… selling at a loss to make profits with greater volume…. Make the models small enough to be hosted on the user's device…. Of course, the model must be useful [ and profitable ] but so far no killer app has emerged for Generative AI. We are likely at the peak of the "inflated expectations" state of the hype cycle, about to enter the "trough of disillusionment" before reaching the "plateau of productivity"… <https://braddelong.substack.com/p/weekly-briefly-noted-for-2024-10/comment/71338259>Agrarian-Age Empires: As late as -240, a Roman provincia was nothing like what we would call a “province”. It was a task the Senate had assigned to an elected senior magistrate that demarcated the sphere of action within which he could exercise his power of command, his imperium. But as of the year -227 this had begun to change. A provincia could now be a geographic area (i) from which armies inimical to Rome were to be excluded, (ii) within which cities and their dependent countrysides were to pay tribute, (iii) without the inhabitants becoming (except by special gift to singular individuals) either (a) first-class or (b) second class Roman citizens or (c) Roman allies. But even as of of -227, being the praetor assigned to Sicily was still very far from being “governor” of a “province”. From the standpoint of the Sicilians, Marcus Valerius Laevinus in the year -227 is the Roman guy with an army collecting tribute who it would be good to keep happy, and whom it would be very good to get on your side in the event of your getting involved in any internal Sicilian dispute. But he is in no sense a governor at the head of some kind of executive bureaucracy, not even an embryonic one:
Fred K. Drogula: Commanders and Command in the Roman Republic & Early Empire: ‘By 227 BC… Sicily (and Sardinia)… [were each a] permanent provincia… a military command… [for] a praetor every year…. Sicily… generally peaceful… defensive…. It is common to refer to this as the annexation of Sicily, [but] such a term does not quite express Rome’s action…. It remained… separate and distinct… from those territories that had received partial or full Roman citizenship in Italy… the absence of colonization…t a military commander was continually stationed…. The Romans increased their praetorian college in 227 BC to provide enough annual commanders…. The commitment to making Sicily and Sardinia permanent provinciae was a military decision to create [advance] garrisons against external threats, not to absorb territory…. The praetors in Sicily and Sardinia had… fleets… [perhaps] much of Rome’s main battle fleet… [perhaps] a Roman legion.… In 227 BC it would have been unusual to dispatch a praetor to a provincia without an army…. A quaestor was sufficient to supervise a peaceful Sicily and give orders to obedient provincials…Mythology: I mean, I understand the anger-management problems and the magic hammer Mjölnir—that is the lightning. I understand the association with Sif—she is the rain, after all. I understand the rumble of the wheels—that is the thunder. And wheels do imply a cart. But why goats?
Wikipedia: Tanngrisnir and Tanngnjóstr: ‘The goats who pull the chariot of the god Thor….. When Thor cooks the goats, their flesh provides sustenance for the god, and, after Thor resurrects them with his hammer, Mjölnir, they are brought back to life the next day. According to the same source, Thor once stayed a night at the home of peasant farmers and shared with them his goat meal, yet one of their children, Þjálfi, broke one of the bones to suck out the marrow, resulting in the lameness of one of the goats upon resurrection. As a result, Thor maintains Þjálfi and his sister Röskva as his servants…. Tanngrisnir translates to "teeth-barer, snarler" and Tanngnjóstr to "teeth-grinder"… <https://en.wikipedia.org/wiki/Tanngrisnir_and_Tanngnj%C3%B3str>
SubStack NOTES:
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Love it!! The NVIDIA and Tesla comments are perfect.....
These weekly brief notes are gems of current issues, events, writers, and information, with myriad links to sources and resources, all on top of the Crown jewels of your own shared knowledge about our economic history and the Utopian possibilities within it. Thank you.