Operating at the Intersection of Technology and the Capital Markets
Month: October 2023
AI - what a mess. Executives and investors regularly refer to all advanced automation as "AI", regardless of whether the technology in question refers to machine learning, deep learning, neural networks, natural language processing, computer vision / image recognition, voice recognition, generative AI and so on. The good folks at Korn Ferry recently published the … Continue reading AI: The Blind Leading The Blind
Layoffs have ticked up in October as compared to September. I expect a step function up in layoffs in January 2024 as I believe that a number of CEOs, CFOs and Boards have yet to find religion around higher interest rates. We are not going back to a zero percent Fed Funds rate in Q1, … Continue reading A Modest Uptick In October Employee Layoffs. I Expect Layoffs To Spike Higher In January.
We told you that ZoomInfo (ticker: ZI) shares were overvalued in August (HERE) despite the 25% haircut the day we published. Today's 15% haircut gets ZI shares in a more rational valuation space. However, I have always questioned how ZI calculates "organic" revenue growth, particularly when it was regularly rolling in acquisitions. Now that it … Continue reading We Have Never Liked ZoomInfo (ZI)
The final numbers are in. The Federal Government posted a fiscal deficit of $1.7 trillion in fiscal year 2023 on $6.1 trillion in fiscal spending. The fiscal deficit figure is up 23% from fiscal 2022's deficit. Blame the Biden Administration and Congress for the deficits in fiscal years 2021-2023. Blame the Fed for subsidizing those … Continue reading The United States’ Spend, Print, Inflate Fiscal Policy Is Unsustainable. The Fed’s Monetary Policy Isn’t Helping.
When Apple (ticker: AAPL) CEO Tim Cook takes the stage tonight at 8pm ET, recognize that there would be no Apple without co-founder Steve Jobs. There would be no iPhone... There would be no Mac product line... There would be no Apple Watch... There would be no Apple Services... There would be no new HQ … Continue reading The Next Steve Jobs?
The Fed Has Already Lost Control Of The Long End Of The Yield Curve The Fed's monetary policy has been wrong since it kicked off QE in 2009. If the Fed holds rates steady on Wednesday, and if CPI continues to grow sequentially at a rate similar to August and September, then it is likely … Continue reading Will The Fed Hike On Wednesday? Who Cares?
Gen AI investments made by Amazon, Google and Microsoft. We recently wrote that Microsoft, Amazon and Google are outsourcing development of Large Language Models (LLMs) to third parties in part to keep the associated expense off Balance Sheet. The table below provides detail as to the billions of Dollars that each of Microsoft, Amazon and … Continue reading The Gen AI Proxy War Fought by Microsoft, Amazon and Google
Generative AI Revenue for Microsoft (MSFT), Amazon (AMZN) and Google (GOOGL) is negligible and will not provide a meaningful revenue boost in the near-to-intermediate term. Nvidia (NVDA) is benefitting from the broad Gen AI infrastructure build given that it is the leading Gen AI chip supplier. OpenAI (private) is benefitting as it deploys its Large … Continue reading Generative AI Will Not Provide A Meaningful Revenue Boost to AMZN, GOOGL or MSFT
Before we get to this week’s BTFP activity, when investors ask "When will we see a recession?", recall that back in March we were days away from a number of bank failures which surely would have caused those banks left standing to dramatically tighten access to credit. Rather than allow those mismanaged banks to fail, … Continue reading Weekly Update: Bank Term Funding Program
All is fairly quiet in the Eccles building as the Fed essentially held its Treasury position constant while modestly trimming its mortgage holdings. Treasuries: The Fed’s Treasury security holdings declined by $1.7 billion for the week-ended October 25th and declined by $47.7 billion on a rolling 4-week basis. Agencies: The Fed’s Government Agency security holdings declined by … Continue reading The Fed’s Balance Sheet Reduction (QT) Update
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