September 9 2024

1. Islamic State Supporter Arrested in Terror Plot Against Jewish Communities in New York
2. Oil Prices Fall, Signaling Economic Weakness
3. Mega AI Data Centers on the Horizon, Costing Over $125 Billion
4 Election Roundup: Trump sentencing delayed, New NYT poll, both parties want sovereign wealth fund
5. Facing Arrest at Home, Venezuelan Opposition Leader Seeks Asylum in Spain
5.5. Mexico in Crisis as President Pushes Constitutional Reforms, Threatening US-MX Trade
US Open
9/9/2002 72‑year‑old Buzz Aldrin punches a moon landing conspiracy theorist in the face

See the new Ad Astra Podcast! Released on Apple and Spotify around 8a CST.

1. Islamic State Supporter Arrested in Terror Plot Against Jewish Communities in New York

Canadian and American investigators arrested a man who they accuse of attempting to illegally enter the US to commit a terrorist attack against Jewish communities in New York City on behalf of the Islamic State group. Muhammad Shahzeb Khan, 20, also known as Shahzeb Jadoon, was detained on Wednesday in Ormstown, Quebec, about 12 miles (19km) from the US border. US officials have charged him with attempting to provide material support and resources to a designated foreign terrorist organisation. They say the suspect, a Pakistani national living near Toronto, was planning a rifle assault timed for the anniversary of the 7 October Hamas attack against Israel, or the Jewish holiday of Yom Kippur.

Article Source: BBC

2. Oil Prices Fall, Signaling Economic Weakness

Oil continued going down throughout the rest of the week, finishing on Friday at $71 for Brent, the global indicator, and $67 for the US standard WTI — the lowest point for either index since June 2023. As we wrote, a key cause is flagging demand in the US and China.   On Thursday, Opec-plus announced that they would delay the phase out for another two months.  The news slowed the price declines for all of one day.  This tells us two things. First, Opec-plus continues to lose its hold on the oil market. Non-Opec producers like the US and Guyana are generating more oil, and there are compliance issues within Opec. Kazakhstan, Iraq and Russia have continuously exceeded the production targets. Second, it shows that demand rather than supply is leading this down cycle. Oil and other commodities are likely to keep sliding until the US economy gains momentum or Chinese demand picks up. In general, if the world wants less oil, that is not a good indicator for global growth.  

Ed. note: Oil is down 15% in the last month, which is great news at the gas pump but indicates the global economy is weakening

Article Source: FT

3. Mega AI Data Centers on the Horizon, Costing Over $125 Billion

It’s now clear that Microsoft isn’t the only company drawing up plans for what we’ll call mega AI data centers—in fact, I’ve been speaking with a growing number of people involved in such projects.  There’s still a long road before mega AI data centers go from schematics to bona fide planning, which would involve securing tens of thousands of acres of land, building new power generation sources, and eventually securing enough chips and related data center equipment to build a large cluster. And last but not least, the companies first need to prove the validity of the AI scaling law idea by improving today’s software with smaller clusters before they get the go-ahead for bigger ones. Still, recent comments from a state official in North Dakota signaled that some companies are exploring deals that would enable proposed new data centers to become real. During a five-hour meeting the Public Service Commission held about data center demand last month, Commissioner of Commerce Josh Teigen said two companies approached him and Governor Doug Burgum about building mega AI data centers. They would initially consume around 500 to 1,000 megawatts of power, with plans to scale up to 5 or 10 gigawatts of power over several years.  These projects would be orders of magnitude bigger than any data centers in existence today. To put the scale of the plan in perspective, at the end of last year, Microsoft’s global data centers for its Azure cloud computing business consumed around 5 gigawatts of power combined. The supercomputing projects could cost more than $125 billion each, Teigen said, according to an audio recording of the meeting. In the meeting, held at the State Capitol in Bismarck, Teigen did not name the entities he spoke with but said the companies have “trillion-dollar” market capitalizations. That narrows down the list to about half a dozen firms in the U.S.—Nvidia, Amazon, Microsoft, Google, Meta and Apple.

Article Source: The Information

4 Election Roundup: Trump sentencing delayed, New NYT poll, both parties want sovereign wealth fund

Trump sentencing delayed   

The judge overseeing Donald J. Trump’s criminal case in Manhattan postponed his sentencing until after Election Day, a significant victory for the former president as he seeks to overturn his conviction and win back the White House.  

New NYT poll  

Once again, a new NYT/Siena poll is all anyone is talking about. Nate Cohn and his colleagues have published the first high-quality survey since KAMALA HARRIS replaced President JOE BIDEN on the ticket that suggests the VP’s hot streak may be coming to an end.  

* In what Cohn calls “one of Mr. Trump’s overlooked advantages,” the Times poll says voters see the former president as closer to the center than Harris. This has to be a bitter pill for the Harris campaign to swallow, given how much work it has done since she took over as the Democratic nominee to occupy the center and, as Cohn points out, given some prominent issues where Trump is objectively not in the mainstream, such as election denialism. 

* Who is the candidate of change? One question that stuck out to us is about which candidate represents “change.” We’ve repeatedly noted that Harris, a sitting VP tied to an unpopular incumbent, has done a lot of savvy political work projecting herself as the candidate of the future. But the Times poll douses some of those flames. It finds that 25 percent of respondents see her as representing “major change,” versus 51 percent for Trump. That’s a big problem given that 61 percent of voters in this poll say they want major change.  

* Finally, since Harris entered the race, the two campaigns have been locked in a race to define her. The conventional wisdom was that Harris was winning that battle. But this poll suggests otherwise. “Nearly half of voters say she’s ‘too liberal or progressive,’” Cohn writes. “A majority of voters see her as at least somewhat responsible for the problems along the border. And a majority of voters say she’s a ‘risky’ choice and ‘more of the same’ — hardly an enviable combination.”  

Sovereign wealth fund  

Republicans and Democrats seem to agree on very little these days. But officials from both parties are intrigued by the idea of the U.S. deploying a new economic tool: a sovereign-wealth fund. White House officials say they have been working for several months on the design of such a fund. The fund would provide capital to advance strategic interests such as early-stage technology and energy security as competition with China heats up. The disclosure comes after former President Donald Trump in an appearance last week called for a sovereign-wealth fund to “invest in great national endeavors for the benefit of all of the American people,” such as infrastructure and medical research. Sovereign-wealth funds, a catchall term for an investment fund owned by a national government, have become prominent players in global markets. They are particularly dominant investors in private markets such as private equity, private credit and infrastructure, where their long investment horizons and deep pockets have made them sought-after partners.

Article Source: NYT, WSJ

5. Facing Arrest at Home, Venezuelan Opposition Leader Seeks Asylum in Spain

Venezuelan opposition figure Edmundo González, who the U.S. and other democracies said won the July presidential election against strongman Nicolás Maduro, arrived in Spain on Sunday to seek political asylum in a major setback for Venezuela’s democratic opposition forces.  González’s exit from Venezuela comes in the aftermath of a regime crackdown on the opposition after the July 28 vote that Maduro asserted he won without making ballot data public. Maduro has since deployed the National Guard and the intelligence police to arrest more than 2,000 protesters and political dissidents on terrorism charges. More than 20 people lost their lives in the recent violence. Attorney General Tarek William Saab threatened to lock up González, a 75-year-old retired diplomat, on charges of instigating demonstrations following the disputed election. The man whom many Venezuelans consider the country’s president-elect departed Saturday night on a Spanish Air Force plane to Spain, officials from both countries said.

Article Source: WSJ

5.5. Mexico in Crisis as President Pushes Constitutional Reforms, Threatening US-MX Trade

Elected in 2018, President Andrés Manuel López Obrador set out to remake Mexico. But the past six years will pale next to the coming four weeks. The country held presidential and parliamentary elections in June which the ruling coalition won by a landslide, in effect giving it a supermajority in Congress. It was clear back then that Mr López Obrador would try to use this supermajority to ram through a series of constitutional changes in the month during which his presidency overlaps with the new Congress. As The Economist warned at the time, it was also clear that many of these changes would profoundly damage Mexico’s democracy and economy.  Mr López Obrador, a populist with a retrograde vision, claims the reforms will purge the old elite and boost Mexico’s democracy. He holds a long-standing grudge against independent courts, regulators and officials who check executive power. The judicial overhaul would make all federal judges elected, including those on the Supreme Court and the electoral tribunals, replacing a system of exams and nominations. State and local judges are expected to follow. Next is legislation to put the National Guard, a civilian police force, under the defence ministry, militarising public security. Another reform eliminates autonomous agencies including regulators and the freedom of information agency. The list goes on. Most of these changes would be disastrous  That is the last thing Mexico needs. It has a big opportunity as manufacturing supply-chains move closer to America, but it is missing the boat. The country is buckling under crime and violence, has a swollen budget deficit and faces a review of the usmca, its trade deal with America and Canada, in 2026. Companies are wary: in June fixed investment fell compared with a year earlier. Chambers of commerce warn of eroding business confidence. The reforms are worrying financial markets. Since the election, the peso has fallen by 14%.   

Thousands of people took to the streets in several Mexican cities on Sunday to protest against controversial constitutional reforms to the judiciary. Under the proposals all federal judges would be fired and replaced by popular vote, supplanting a system of professional exams. Senior members of the judiciary have attended recent demonstrations, including Norma Piña, the president of the Supreme Court.

Article Source: Economist

US Open

He got closer than anyone has in a while. That’s how Taylor Fritz should console himself after losing Sunday’s U.S. Open men’s final to Jannik Sinner, 6-3, 6-4, 7-5.  “I feel like I almost let a lot of people down,” a gloomy Fritz said afterward. Fritz, a 26-year-old Californian, got closer to winning a major tournament than any American man in 15 years—just by making it to Sunday.  Not since Andy Roddick stretched Roger Federer an agonizing five sets at Wimbledon in 2009 had any U.S. men’s player even been in a final. Roddick is also the last American man to win a major, in 2003, his only one, here at Arthur Ashe Stadium.

Article Source: WSJ

9/9/2002 72‑year‑old Buzz Aldrin punches a moon landing conspiracy theorist in the face

Sources

1. https://www.bbc.com/news/articles/cdd7v4ppl0ro

2. Unhedged newsletter

3. https://www.theinformation.com/articles/two-ai-developers-are-plotting-125-billion-supercomputers

4. https://www.nytimes.com/2024/09/06/nyregion/trump-sentencing-delay-ruling.html?smid=nytcore-ios-share&referringSource=articleShare&sgrp=c-cb; https://www.wsj.com/politics/policy/biden-and-trump-are-both-eyeing-a-sovereign-wealth-fund-why-5ac8ea08?st=znjlpkmekyrdfya&reflink=article_copyURL_share

5. https://www.wsj.com/world/americas/venezuelan-leader-who-challenged-strongman-in-vote-flees-to-spain-9a93b716?st=f5qtxh1jx8y2g4g&reflink=article_copyURL_share

6. https://www.economist.com/leaders/2024/09/05/a-make-or-break-moment-for-mexico

7. https://www.wsj.com/sports/tennis/jannik-sinner-taylor-fritz-taylor-swift-us-open-final-6421e277?st=ofpkbp83j4rtknr&reflink=article_copyURL_share