The Kremlin has confirmed that North Korean leader Kim Jong Un will pay an official visit to Russia at the invitation of President Vladimir Putin in a Monday statement.

While prior reports speculated that such a meeting could be coming soon, which will mark their first such summit since the Ukraine war started, the Kremlin statement indicates it’s happening sooner than expected – even this week.

The Russian government announcement said Kim and Putin will meet “in the coming days”.  Already, South Korean state media is reporting that Kim is “slowly moving inside North Korea on a private train toward the northeastern border” and that the two leaders plan to “meet and have a talk.”

Given the proximity of the tiny border shared between the two countries, the meeting is likely to happen in the far eastern city of Vladivostok, which was location of their first ever meeting in April 2019. The city lies some 80 miles from the North Korean border.

Last week it was revealed that arms negotiations between Russia and North Korea are “actively advancing” – coming after Russian Defense Minister Sergei Shoigu’s July trip to Pyongyang, where he and his delegation met with his North Korean counterpart and top officials, and were on hand to observe 70th anniversary celebrations of the end of the Korean War, referred to in the north as “Victory Day”.

During Shoigu’s July visit, North Korea’s Defense Minister, Kang Sun Nam, reportedly said his government fully supports Russia’s “battle for justice” and protection of its sovereignty, but there was no indication that Kim himself invoked the Ukraine conflict directly. Shoigu had reportedly at the time praised the north’s army as among the world’s “strongest”.

Both countries remain in US crosshairs and under far-reaching sanctions. Shoigu’s visit had indeed likely kick-started serious dialogue, given it marked the first visit by a Russian defense ministry to North Korea since the 1991 collapse of the Soviet Union. So the next step, we now learn, is precisely an an ultra-provocative Kim trip to meet with Putin inside Russia.

At the end of last month, White House NSC official John Kirby predicted, “Following these negotiations, high-level discussions may continue in coming months.” That’s also when the NSC first alleged that the two sides are negotiating over “significant quantities and multiple types” of weapons to use in Ukraine.

It could be that preparation for a major arms deal has already been laid, and that Kim and Putin will finalize it and sign an agreement. It’s been well known that Russia has been rapidly blowing through artillery shells in Ukraine, and that this is a big and constant need for Putin to execute the war.

Authored by Randy Totano via The Epoch Times,

No one will argue that Sept. 11, 2001, wasn’t the worst day the United States has endured this century – an unspeakable tragedy that brought out an incredible amount of raw emotion, with images and memories forever burned into our brains.

The next day, it was like we were living in a different country. The outpouring of patriotism was off the charts, with more flags than you’d see on the Fourth of July, while people wore red, white, and blue ribbons. Emotions were still running high, but there was a sense of unity that had been missing for years. By the end of the week, a joint session of Congress made it look like we were living up to the “united” part of the United States of America, with politicians working across the aisle.

Twenty-two years later, all that togetherness is forgotten, leaving a country completely polarized. The “aisle” in Congress no longer exists, having become an impenetrable wall. And now, the wall being constructed by elites is one between conservatives and liberals in every neighborhood.

Does it take an attack, some horrific tragedy, a natural disaster, or extreme conditions to bring people together?

Apparently, it does.

The answer reminds me of a conversation I had with my late mother years ago.

I had taken her to see the movie “Pearl Harbor” and noted her face lit up during a scene with a big band and swing dancing. After the movie, she said something I didn’t expect:

“Those were the best times in this country.”

To me, that made little sense.

“The best times were during World War II?” I asked.

She nodded.

“Everyone pulled together,” she said.

“We were all fighting the same enemy. We lost a lot of good people, but we had to remain a free country. If you needed help, someone would help. People were closer than they are today.”

She talked about gas rationing, how getting a pair of nylons was a rare gift, and how women went to work with so many men off to war. The iconic image of Rosie the Riveter kicked off a revelation that women were just as capable as men in the workforce.

My mom was born 100 years ago, in 1923. Imagine going through the Great Depression as a child and then, a few years later, dealing with wars against Germany and Japan. Those people learned how to deal without, how to help one another, and how it was almost a sin to waste anything.

Many of that generation had a bit of packrat in them after those events, rarely throwing anything out because it might be useful in the future. The Depression-era people knew what it was like for people to have nothing but the shirts on their backs.

“Better to have it and not need it, than need it and not have it.”

I can only imagine what my mom would think about the state of America today, with people more concerned about pronouns, gender, and bathrooms than a good economy, while men are allowed to destroy women’s sports. And where people are offended by everything, including the American flag.

So what will it take to get back to the unity of Sept. 12, 2001, without waiting for some cataclysmic event?

It starts with not believing the media’s narrative that we’re all so divided.

While Congress refuses to reach across the aisle, we can reach across the street. The media tends to cover the fringes of both political parties because the extremists are “good copy.” But they aren’t representative of the average American.

Just because your neighbors have a yard sign supporting someone you don’t like doesn’t mean they aren’t nice people. The Republican next door isn’t going to Klan meetings every weekend while wearing a swastika, and the Democrat across the road doesn’t loot department stores and throw bricks at police officers.

However, the media would have you believe that it’s your civic duty to shun these people who think differently than you do. Try meeting the people you think are different … you might find that you have a lot in common.

The bottom line that is the average American wants the same thing. Republicans and Democrats want safe neighborhoods, the best schools, a good economy, and an achievable American dream.

The problem is that those Democrats who are probably nice people have been bombarded every day with a narrative that paints Republicans as minions of the devil. When 90 percent of the media refers to conservatives as Nazis, racists, white supremacists, rednecks, and idiots every single day, it makes an impression. And makes it hard to change minds.

It’s time to ignore those who basically hate half the country. Turn off the channel, leave social media, and form your own opinion.

“Divide and conquer” has been an effective strategy going back more than 2,000 years, to the time of Julius Caesar. And that concept is being used today by the elites, who want to conquer us and have total control over the way we think. Unfortunately, it’s working.

We can only become divided if we allow it. Hopefully, it won’t take some devastating event to unite us again.

But what’s different about the World War II era is that people remained united after the war was over.

They apparently realized great things can be accomplished when everyone works together. If only people like my mom were around today to be in charge.

If last week was rather light on important data, you can’t say the same about this week’s high-impact extravaganza that will occur in a Fed (and buyback) blackout period as next week’s FOMC lurks in the wings:

US CPI (Wednesday) will be the obvious standout but US PPI and retail sales (Thursday) are nearly as important given how some of the PPI subcomponents feed into the Fed’s preferred core PCE, and for retail sales, we’ll see how much momentum has been lost after a phenomenally strong July print. If that’s not enough, the ECB see their first “in the balance” meeting of this cycle on Thursday with markets now pricing in a 38% likelihood of a hike this morning. Elsewhere, the UK sees employment data (tomorrow) and monthly GDP (Wednesday) while Friday is a busy day as we get China’s monthly suite of activity data, its latest 1-yr MLF fixing rate and US industrial production and the University of Michigan survey.

It’s not just economic data: on Tuesday, the long-awaited Apple “Wonderlust” presentation will unveil the latest iPhone model, as well as a new Apple Watch, AirPods, iOS 17 and USB-C charging ports announcements, Wednesday we will get the pricing of the long-awaited ARM IPO (which is said to be six times oversubscribed), while the UAW union strike is scheduled to begin on Thursday, Sept 14, with potentially disastrous consequences for the US.

As DB’s Jim Reid writes, there’s no other place to start than US CPI: DB’s US economists write that since gas prices have risen nearly 7% in August, headline CPI (+0.61% DB forecast vs. +0.17% previously) will see its largest monthly increase since June 2022. However, core (+0.22% vs. +0.16% last month) is likely to remain relatively becalmed. On these estimates, the year-on-year number for core CPI inflation should fall 0.4% to 4.3%, whereas headline would rise 0.4% to 3.7%, the highest for three months.

With core inflation still relatively subdued, the positive momentum should continue, with the three-month annualized rate falling by about 90bps to 2.2%, while the six-month annualized rate should fall by 50bps to 3.6%. In both cases that would be the lowest since early 2021. So for now the strong headline print should be offset by the positive news on core. However, the risk is always that the longer headline edges up, the more risk of second-round effects down the road.

Talking of components, Thursday’s PPI will be nearly as important, as many categories feed into the Fed’s favored core PCE deflator. Health care is the main one and DB economists are concerned that wage growth in the sector could push this higher in the months ahead after recent falls. Airlines are another one to watch. They’ve surprisingly slumped in CPI recently, but risen in the PPI. So this will be an interesting one to get resolved: airfares are one reason why the “core services excluding housing” PCE inflation has been significantly stronger than that of the CPI core services excluding rent and medical care services. The Fed pays far closer attention to the PCE core services ex-housing series because this accounts for a little over half of core PCE inflation.

On Thursday, August’s retail sales will be a very important release after the strong July reading, so it’ll give us a much better idea of consumption trends and the direction of travel for Q3 GDP and beyond. Economists expect some payback across headline (0.1% vs. +0.7% in July), sales excluding autos (0.4% vs. +1.0%) and retail control (-0.1% vs. +1.0%). So don’t underestimate how much a strong reading could impact the likelihood of another hike, or a bad reading impact the probabilities of a recession. The final highlight for the US will be the inflation expectations in the UoM sentiment survey. Will it edge up a bit with the recent rise in gas prices?

Over in Europe, all eyes will be on the ECB’s decision on Thursday. DB economists have nervously held their 3.75% terminal deposit rate call for many months now, and as such they think the ECB will stay on hold. However, even if they don’t hike this week, don’t expect any sign that the council are confident that this is the last hike. A lot of uncertainty remains over European inflation, whilst GDP has been in near-stagnation since last autumn. See our economists’ preview note here. Elsewhere in Europe, we have the ZEW survey due for Germany tomorrow, as well as Eurozone-level industrial production on Wednesday.

Speaking of central banks, DB Research has just changed its call on the Bank of Japan’s monetary policy outlook; their economists now expects yield curve control to be removed in October (previously April 2024), and for negative interest rate policy to end in January 2024 (previously December 2024). That follows the interview that BoJ Governor Ueda gave with the Yomiuri newspaper, where he said an end to negative interest rates was possible if they were confident that wages and prices were rising sustainably, and that they could have enough information on the wage outlook by the end of the year.

Courtesy of DB, here is a day-by-day calendar of events

Monday September 11

• Data: Japan August M2, M3, machine tool orders, Italy July industrial production
• Central banks: BoE’s Pill speaks
• Earnings: Oracle

Tuesday September 12

• Data: US August NFIB small business optimism, UK July average weekly earnings, unemployment rate, August jobless claims change, Germany September ZEW survey, July current account balance, Eurozone September ZEW survey
• Central banks: BoE’s Mann speaks

Wednesday September 13

• Data: US August CPI, monthly budget statement, UK July monthly GDP, trade balance, industrial production, index of services, construction output, Japan August PPI, Italy Q2 unemployment rate, Eurozone July industrial production
• Earnings: Inditex

Thursday September 14

• Data: US August PPI, retail sales, July business inventories, initial jobless claims, Japan July core machine orders, capacity utilization
• Central banks: ECB decision
• Earnings: Adobe, Lennar

Friday September 15

• Data: US September University of Michigan survey, Empire manufacturing survey, August industrial production, import and export price index, capacity utilization, China August industrial production, retail sales, new home prices, property investment, Japan July Tertiary industry index, Italy July trade balance, general government debt, Eurozone Q2 labour costs, July trade balance, Canada August existing home sales, July manufacturing sales, international securities transactions
• Central banks: Bank of England Inflation Attitudes Survey, China 1-year MLF rate

* * *

Turning to just the US, Goldman writes that the key economic data releases this week are the CPI report on Wednesday, and the retail sales and PPI reports on Thursday. Fed officials are not expected to comment on monetary policy this week, reflecting the FOMC blackout period in advance of the September 19-20 meeting.

Monday, September 11

• 11:00 AM New York Fed 1-year inflation expectations, August (last 3.6%)

Tuesday, September 12

• 06:00 AM NFIB small business optimism, August (consensus 91.5, last 91.9)

Wednesday, September 13

• 08:30 AM CPI (mom), August (GS +0.63%, consensus +0.6%, last +0.2%); Core CPI (mom), August (GS +0.24%, consensus +0.2%, last +0.2%); CPI (yoy), August (GS +3.58%, consensus +3.6%, last +3.2%); Core CPI (yoy), August (GS +4.30%, consensus +4.3%, last +4.7%): We estimate a 0.24% increase in August core CPI (mom sa), which would lower the year-on-year rate by four tenths to 4.30%. Our forecast reflects a pullback in auto prices (used -3.1%, new -0.2%, mom sa) reflecting declines in used car auction prices and the further rebound in new car inventories and incentives. However, we expect a boost from residual seasonality in the transportation services categories, in particular for airlines (we assume +6% mom sa; webfares also increased sequentially). We also expect another gain in the car insurance category (we assume +1.6%), as carriers continue to offset higher repair and replacement costs. We forecast shelter inflation to remain roughly at its current pace (we estimate +0.40% for rent and +0.48% for OER). We estimate a 0.63% rise in headline CPI, reflecting higher energy (+5.8%) and food (+0.3%) prices.

Thursday, September 14

• 08:30 AM Retail sales, August (GS -0.1%, consensus +0.1%, last +0.7%); Retail sales ex-auto, August (GS +0.3%, consensus +0.4%, last +1.0%); Retail sales ex-auto & gas, August (GS -0.2%, consensus -0.1%, last +1.0%); Core retail sales, August (GS -0.2%, consensus -0.1%, last +1.0%): We estimate core retail sales fell 0.2% in August (ex-autos, gasoline, and building materials; mom sa). Our forecast reflects solid back-to-school shopping trends in the brick-and-mortar segment but a pullback in the nonstore category following record sales on Amazon Prime Day. We estimate a 0.1% drop in headline retail sales.
• 08:30 AM Initial jobless claims, week ended September 9 (GS 225k, consensus 227k, last 216k): Continuing jobless claims, week ended September 2 (consensus 1,695k, last 1,679k)
• 08:30 AM PPI final demand, August (GS +0.3%, consensus +0.4%, last +0.3%); PPI ex-food and energy, August (GS +0.1%, consensus +0.2%, last +0.3%); PPI ex-food, energy, and trade, August (GS +0.2%, consensus +0.2%, last +0.2%)
• 10:00 AM Business inventories, July (consensus +0.1%, last flat)

Friday, September 15

• 08:30 AM Import price index, August (consensus +0.3%, last +0.4%); Export price index, August (consensus +0.3%, last +0.7%)
• 08:30 AM Empire State manufacturing survey, September (consensus -10.0, last -19.0)
• 09:15 AM Industrial production, August (GS +0.1%, consensus +0.1%, last +1.0%): Manufacturing production, August (GS -0.1%, consensus +0.1%, last +0.5%); Capacity utilization, August (GS 79.2%, consensus 79.3%, last 79.3%): We estimate industrial production increased 0.1%, as strong oil and gas production and electric utilities outweigh weak mining production. We estimate capacity utilization edged down to 79.2%.
• 10:00 AM University of Michigan consumer sentiment, September preliminary (GS 69.2, consensus 69.2, last 69.5): University of Michigan 5-10-year inflation expectations, September preliminary (GS 3.0%, consensus 3.0%, last 3.0%)

Source: DB, Goldman, BofA

Authored by Daniel Lacalle,

The viability of a currency change and the loss of “monetary sovereignty” are frequently discussed in the argument over dollarization in Argentina, but the most crucial aspect is sometimes overlooked: the peso is a failed currency. Due to the common belief that “the dollar is rising” when the peso is falling, this important element is disregarded in the media in Argentina.

The peso is a failed currency. Why?

First, there are more than ten bogus peso exchange rates. The “dollar blue” is the closest approach to a real exchange rate that represents the real value of the currency. A country with ten or more exchange rates has a fictitious and failing currency.

Second, the demand for pesos on the domestic and foreign markets is almost nonexistent and far removed from the abnormal expansion of the monetary base. The demand for pesos is at its lowest level in 20 years, and it has been declining steadily since 2020, according to the Libertad y Progreso Foundation, but during that same time the money supply (monetary base) has increased by four times. According to the Central Bank of the Argentine Republic, the monetary base has grown by 443% since 2018 and by more than 1,961% over the course of ten years.

Third, at the close of this article, the Central Bank has issued remunerated debt (Leliqs, Pase) that exceeds 12% of GDP, which is a massive financial time bomb. In five years, the monetary base has grown by 1,050%, including the mentioned Leliqs, an impending monetary bomb, which means more printing when they mature and rising inflation in the future. Argentina’s citizens are aware that the relentless assault of an extractive and confiscatory monetary policy will cause their currency’s buying power to collapse.

A failed currency is evident when any restaurant will give you a discount of up to 30% if you pay with cash since they are aware that they will lose money when they receive the money from credit card bills from the bank.

Is it possible to dollarize?

Undoubtedly. In fact, Argentineans already dollarize everything they can to avoid the financial onslaught of the government. Keeping any pesos means literally losing money every day.

To dollarize, Argentina must close the exchange rate gap, as there is an enormous difference between the official rate and the real-unofficial one, and close the Leliq and Pase monetary gaps. The gap between the official and real exchange rates is almost two times the official value. To do this, an immediate reform must be implemented, and all export restrictions must be lifted in addition to the exchange rate clamp (cepo cambiario). In other words, opening the Argentine economy to generate reserves (dollars) is not difficult for a wealthy nation with plenty of options. The exchange rate clamp is another proof of a failed currency as the government tries to seize the few dollars that enter the economy rather than maximize the inflow of reserves with a free market and open economy.

Dollarization also requires the removal of financial and bureaucratic barriers. Governments in Argentina frequently disregard the notion that isolation and autarky only lead to poverty. A drastic adjustment to political spending must be made to remove the Central Bank of Argentina’s skewed incentive to keep monetizing unsustainable public deficits.

Numerous expenses that cover cronyism and political spending that can and should be cut account for around 20% of the budget. The government in Argentina spends more than 8% of the GDP on items that are pure political expenditures, and there are hundreds of completely unnecessary items that are lost in corruption. The country would achieve a fiscal surplus as a result of this change, enabling quick dollarization.

Furthermore, Argentina’s massive trade imbalance in the first half of 2023, despite having practically everything the world needs, is an economic aberration. For the first half, the trade imbalance exceeded $4.368 billion. It is unconscionable that a wealthy nation with great potential sees a 24.7% decline in exports because of the government’s misguided monetary and fiscal policies, which make exporting economically unviable. In a year when Argentina should be setting records for exports, we are talking about the largest trade deficit for a first semester since 2018.

A drastic shift in interventionist policies at the fiscal and monetary levels would result in a commercial and fiscal surplus for the nation, creating wealth and boosting the purchasing power of budgetary items like Social Security and retirement plans that shouldn’t be touched. In fact, these pensions and support programs would have far higher purchasing power with the infusion of reserves and monetary control.

Losing monetary sovereignty?

Why monetary sovereignty is desired is the question that we must ask ourselves. The alleged monetary sovereignty in Argentina has only contributed to widespread corruption, poverty, and the massive devaluation of the peso. Furthermore, the extractive monetary policy has long since destroyed any real monetary sovereignty. Argentina’s government and central bank lack legitimacy and demand as currency issuers, and as a result, lack sovereignty. You might assume that switching to a new administration would remedy this, but the evidence demonstrates that as soon as populist measures are reinstated, the monetary imbalance spirals out of control once more. Let’s not forget that Macri took over the government when the Central Bank had a financial hole in its issued debt totaling more than 22 billion equivalent US dollars.

Given that perpetual devaluation makes citizens more dependent and captives of political power, the issue with monetary sovereignty is that it grants control over the supply of currency to those who stand to gain from its depreciation, namely politicians. Populists blame supermarkets for inflation and position themselves as the solution to the crisis that politicians themselves caused. It is quite easy to make large-scale promises of subsidies with money that you do not have and to give them out in large quantities of constantly depreciating currency. The goal of monetary annihilation is not just to destroy money but also to absorb economic prosperity for the benefit of political power, which grows exponentially richer and, of course, in dollars.

What about boosting yuan-based trade with China? The issue in Argentina is not whether it should trade in dollars, euros, or Chinese yuan. With the current course of action, Argentina will not cease destroying the peso, which has lost almost 90% of its value versus the yuan and more against the US dollar over the past ten years.

Some people don’t seem to comprehend that the peso, rather than the dollar or yuan, is the problem and that Chinese businesses and governments won’t accept pesos for their international transactions. Contrary to what some populists may try to portray, China is a far stricter and more demanding lender. Argentina’s export potential and access to a free and open international financial system make dollarization relatively simple. China has capital controls and does not accept pesos as a security. Yuanizing is significantly more challenging, but doing so would require the same fiscal and trade adjustments I mentioned.

What about gold? Implementing a gold standard would help but Argentina has almost no gold reserves and it would not even matter. There is no confidence in the issuer of pesos to believe that it would be truly backed by gold reserves, just as there was no trust in the Petro in Venezuela, which ultimately vanished.

The populist governments’ inflationary impoverishment incentive can only be stopped by dollarization. More poverty and inflation will likely result from not dollarizing.

Tesla shares are up nearly 6% in the pre-market session after Morgan Stanley’s Adam Jonas raised his price target on the name to $400, upgraded the company to “overweight” and named Tesla a top pick.

Jonas predicts that Tesla’s Dojo supercomputer may add as much as $500 billion to the company’s market value as a result of faster adoption of Robotaxis and the company’s network services. Jonas says the technology can open up “new addressable markets” in the same way AWS did for Amazon.

Dojo could put Tesla at “an asymmetric advantage” in a market potentially worth $10 trillion, the note says. 

In its 66 page note out Monday morning, MS wrote: “We believe that Dojo can add up to $500bn to Tesla’s enterprise value, expressed through a faster adoption rate in Mobility (robotaxi) and Network Services (SaaS). The change drives our PT increase to $400 vs. $250 previously. We upgrade to Overweight and make Tesla our Top Pick.”

Tesla is on track to tack on about $46 trillion in market value on Monday by the cash open. Morgan Stanley has been the investment bank that has followed Tesla and Musk the closest over the years. 

“Investors have long debated whether Tesla is an auto company or a tech company. We believe it’s both, but see the biggest value driver from here being software and services  revenue,” Jonas says opening his note. “The same forces that have driven AWS to reach 70% of AMZN total EBIT can work  at Tesla, in our view, opening up new addressable markets that extend well beyond selling  vehicles at a fixed price. The catalyst? Dojo, Tesla’s custom supercomputing effort in the works for the past 5 years.”

Jonas adds: “We believe Dojo can represent the next step-change in market  perception of Tesla. Dojo emphasizes 3 of Tesla’s core capabilities: 1) speed, 2) performance, and 3) cost. In the near term, we believe  Dojo can accelerate the development and monetization of Tesla’s  software and services business. Longer term, we see scope for Dojo  to provide avenues for Tesla’s software and hardware capabilities to  extend well beyond the auto industry. If Dojo can help make cars ‘see’  and ‘react,’ what other markets could open up? Think of any device at the edge with a camera that makes real-time decisions based on its  visual field.”

The note then talks about the cost savings that Dojo will ultimately be able to provide:

Tesla estimates that Dojo can provide 6x cost saving vs current, state of the art, GPU alternatives. On our calculations, when com paring what Tesla would have to spend on equivalent compute from  NVDIA, Dojo has the potential to drive ~$6.5bn in cost savings for  Tesla over the next couple of years to reach the company’s stated  goal of materially increasing internal computing power by October  2024 (to 100 exaFLOPs). This is achieved by having a purpose built,  in-house semiconductor and AI tech stack. Dojo became operational  in July of this year and we believe the continued rollout and subsequent company announcements will provide the catalyst for investors to appreciate Dojo’s potential.

We note that 6x cost savings is Tesla’s claim and we are unable to verify it with specificity given the  early stage of Dojo roll-out. We also note that there are other pieces of data provided by Tesla that suggest other implied cost savings out comes that could differ from the 6x claim. Finally, just because Tesla  is making a major effort to commercialize Dojo for its in-house purposes does not mean that the system will ultimately represent the best cost/performance alternative on the market longer term give  continuous improvement of rival compute technology.  

And finally, what would a shiny new technology be for a car-turned-tech company if it didn’t help the “attach rate” with new vehicle purchases (this, as Full Self Driving, paid for by many Tesla owners years ago, has still not arrived). Jonas writes:

For our Tesla modeling purposes, we focused on the potential for Dojo to deliver autonomy and network services revenues at a faster attach rate with higher average monthly revenue per user  (ARPU), driving a material increase to our estimates. We have NOT given Tesla credit for specific cost savings from Dojo vs. its current supercomputing budget. Nor have we given Tesla credit for any  non-auto-related revenue streams. With significantly increased  computing power and faster processing speeds (latency), Tesla’s  path to monetizing vehicle software can materialize sooner, and at  higher recurring revenue rates. We also for the first time incorporate  non-Tesla fleet licensing revenue into our Network Services model as  we expect recent charging station cooperation will extend into FSD  licensing (discussions ongoing) and operating system licensing.

The note continues:

We  now forecast Tesla Network Services to reach $335bn in revenue in  2040 vs $157bn previously, and expect the segment to represent  over a third of total company EBITDA in 2030, doubling to over 60%  of group EBITDA by 2040 (vs. 38% previously). T

his increase is  largely driven by the emerging opportunity we see in 3rd party fleet  licensing, increased ARPU, with operating leverage driving higher  long-term EBITDA margin vs. prior forecast (65% from FY26 onwards, vs. 50% previously).

In addition to Network Services, we indirectly ascribe the value of Dojo to our Tesla Mobility robotaxi assumptions (increased long term fleet size and margin), and 3rd  Party Battery Business, as we believe the charging and FSD deals will also result in higher hardware attach.

Jonas also provides a timeline of how Tesla’s development of Dojo has gone over the last 5 years.

• April 2019: During Tesla’s autonomy day, Elon Musk mentions that  Tesla was working on a “super powerful training computer”. He says  that the goal of Dojo will be to perform unsupervised training at a  large-scale level using vast amounts of video data. 
• August 2019: Musk tweets “will Dojo be the difference”, alluding  towards the potential significance of the supercomputer, even at an  early stage. 
• August 2020: Musk makes a series of tweets about Dojo, with one  claiming V1.0 to be “about a year away”. 
• September 2020: More Musk tweets are made, mentioning that  Dojo uses Tesla-made chips (rather than a GPU cluster) and a computer architecture that is optimized for neural net training. He can be quoted saying “I think it will be the best in the world”. 
• August 2021: Tesla hosts AI Day and unveils Dojo’s hardware and  software in greater detail. 
• August 2022: Tesla releases two presentations at the Hot Chips 34  conference ahead of their planned AI Day that feature high-level  information about Dojo. Senior Hardware Director Ganesh Venkataramanan introduces that there is a large gap between what’s  needed to accelerate AI and what is available, and that Dojo can fill  the void. Musk replies to a tweet about Dojo, saying that Tesla won’t need to  buy as many incremental GPUs next year. 
• September 2022: Tesla hosts AI Day and provides further updates  on Dojo’s architecture and progress. 
• June 2023: A twitter account from Tesla is created in May 2023  called “Tesla AI”, and a series of tweets are made in June with videos  of the autonomous technology in action, prompted by their neural  networks. Tweets mention that these models will learn from a huge  set of data, and that it will be trained on “enormous amounts of compute” using Dojo in the future. A chart is released that projects that  Dojo will start producing (one ExaPOD will be completely brought online) in July 2023, Tesla will have a top 5 compute power in the  world by January 2024, and Tesla will reach 100 exaFLOPs of compute by October 2024. 
• July 2023: Musk confirms that Dojo is online and handling production workloads via liking a Tweet. Tesla reports 2Q earnings and provides updates on Dojo in the  earning call, including R&D/CapEx costs over the next year of $1bn+. 

Pro subscribers can read Jonas’ entire 66 page note in the usual place.

Recall, we just wrote over the weekend about how Tesla’s price cuts were helping it excel in China, where it posted month over month delivery gains of 30.9% for August. 

It was slow going for Tesla in China in July, with some questioning whether or not saturation in the market was slowing the company’s growth. But in August, the EV company saw a return to growth as it slashed prices on vehicles even further and Beijing enticed citizens to go EV shopping with tax breaks. 

For the month of August, Tesla sold 64,694 vehicles and exported 14,465 vehicles, according to data from China’s Passenger Car Association.

It marked the first year over year gain since May 2023, Reuters noted. China’s auto marker is also seeing a tailwind from lower rates on existing mortgages and lower rates for first time home buyers, CPCA Secretary General Cui Dongshu noted. 

Recall we just noted last month that Tesla had cut the price of its Model S Plaid in China by 19%. 

We also noted that Canadian VC and self-labeled “SPAC Jesus” Chamath Palihapitiya was out over Labor Day weekend praising the speed and aggressiveness of Tesla’s price cuts, which seem to be working. 

“Some companies cut prices, but most keep prices flat or increase them,” he added. “Some companies improve products quickly. But no one has actually given you more for less on such a big ticket purchase so frequently.”

Authored by Mark Glennon via Wirepoints.org,

“As a former educator and longtime employee of the Chicago teachers union, what grade would you give the current system and why?”

That question was put to Chicago Mayor Brandon Johnson during his appearance Thursday night at the Economic Club of Chicago.

Mayor Johnson at the Economic Club of Chicago

His answer:

“I personally don’t give a lot of attention to grades…. My responsibility is not merely to just grade the system but to fund the system.

That’s how I am ultimately going to grade whether our public school system is working – based upon the investments we make to the people who rely on it.”

He offered nothing further about how to grade the schools or educational outcomes.

That answer was not an offhand comment taken out of context. It was a thoughtful answer that he explained. See for yourself. The question and answer start at the 47.3 mark in the video of his appearance.

After saying, “I personally don’t give a lot of attention to grades,” he went on to explain that, instead, “we have to establish a rubric that speaks to the needs as well as the unique dynamics that exist.” He described some of the special challenges Chicago schools face, and said “but, unfortunately, we have had this standardization of our schools that has sucked out our imagination.”

He asked how we can “grade a system when the system has not fulfilled its basic obligation of providing an equitable system that speaks to the needs?”

“And so,” he concluded, “the very concept and ideal of public accommodation is deeply tethered to the experience and desire for black liberation. My responsibility is not merely to just grade the system but to fund the system. That’s how I am ultimately going to grade whether our public school system is working — based upon the investments we make to the people who rely on it.”

There were only two other highlights in Johnson’s appearance. First was his answer to a broad, overriding question toward the end (at the 55.0 mark) about how to get past the division in the city and get to the “collaboration to get stuff done.”

“I’ve said this before,” Johnson answered.

“There are forces that did not accept the results of the Civil War. And there are real forces that want a rematch. Don’t give in to them. Don’t give it them.”

He went on to talk about the importance of love and cooperation.

Really? The first thing that comes to his mind are people who want to refight a war to preserve slavery? He’s the fourth black mayor in a city that sent the first black man to the White House.

Second, at the 43.30 mark Johnson talked about addressing the root causes of crime.

“President Johnson, fifty-plus years ago, said get at the root causes,” the mayor said, and he contrasted that with a racist comment at the time by Gov. George Wallace.

Then he said,  “Had we actually addressed the causes of violence fifty years ago we would already be a better stronger safer Chicago. This generation cannot get wrong what the previous generation did.”

Hold on there. America rejected George Wallace, elected Lyndon Johnson and proceeded to spend some $14 trillion on Pres. Johnson’s Great Society programs — exactly the kinds of programs Mayor Johnson wants now to address root causes. It’s the apparent failure of those programs that many today worry about repeating.

The rest of Johnson’s Economic Club appearance was a waste of time. His address was comprised almost entirely of his standard, vague platitudes, though delivered in his customarily pleasant manner. The Q&A was more of the same.

If there is one defining characteristic of the average western feminist it is their propensity for turning their personal problems into everyone’s problems.  Meaning, they have a habit of projecting their insecurities and outrage on the rest of the world, weaponizing their own unhappiness and turning it into an activist movement.  If they are miserable, other people are not allowed to feel content; that would be unfair.  

It is for this reason that modern feminism is often accused of being an ideological cult for narcissists.  Everything about it seems to be designed to elevate and appeal to the worst kinds of people.  Not only that, but the belief system is now so pervasive in western countries, especially among the college educated, that 60% of women say they identify and agree with the “common definition” of feminism, even though the common definition does not match the behavior and motives of most feminists.  

This percentage changes, of course, depending on the specific tenets related to feminism, but in most polls at least 30% of women in most western countries embrace the majority of third-wave feminist concepts.  The number of feminists also spiked dramatically between 2013-2018 (though this momentum has stalled in recent years).  The point being, if you are a western man seeking to avoid feminist insanity and find a woman with traditional values your task is becoming incredibly difficult in your home country.

Enter the “Passport Bros”, a movement of men in the west (primarily American men) traveling outside their countries to find wives in foreign places known for more traditional women that defy feminist taboos.  The movement has gained exponential traction and attention in the past year as most countries are finally lifting covid restrictions, allowing more men to travel.  

Breaking from the notion of “mail order brides” which has existed for decades, Passport Bros are going overseas with the intention of marrying outside the US as a way to avoid crushing divorce laws.  The strategy also makes them less likely to be exploited by foreign women only looking for access to US citizenship.  It is this key difference which has feminists in the west outraged.  

While the mail order bride concept has been criticized by feminism in the past as being “exploitative,” feminists often joke that foreigners are “only using American men” to get green cards and then divorce them to take half of their wealth.  In other words, they find it amusing for men to look for love on the other side of the world only to be treated by foreign women the same way they are treated by American women.  But the PB movement avoids this dynamic, which is making feminists angrier than ever.  

Their reaction is rather revealing.  The above is just a sampling of the salt that has been directed at Passport Bros in the past several months. Mainstream platforms are beginning to pick up on the trend and woke journalists are equally incensed.  Clearly, the concept has hit a nerve, otherwise they would not go through the trouble of attacking it in the first place.  But the core question is – Why do they care? 

Perhaps, because the gender power dynamic that feminists are so obsessed with is shifting in favor of men (at least in their minds), therefore, Passport Bros are an unacceptable development that needs to be shamed and squashed before they lose control.  Attacks are often directed at foreign women, who feminists describe as uneducated, poor, ignorant and desperate.  

This is projection, considering many of the women marrying Passport Bros speak multiple languages and have college degrees in useful career fields.  The arrogance of this thinking aside, the suggestion insinuates that the men leaving for happier shores are not good enough to date in the US, that they are “afraid of strong independent women” or that they are predatory.  Once again we have to ask, why are feminists so angry about these men looking elsewhere?

Another go-to attack is to dismiss PB culture as nothing more than “sex tourism” or “sex trafficking.”  But the purpose of the movement is specifically to find a marriage partner with similar political, social and religious values.  If Passport Bros simply wanted prostitutes they would stay in the US where feminists are prevalent.  Because these women do not embrace feminist values, feminists see them as automatically inferior and “in need of saving.”       

There is certainly something to be said for the strategy of non-participation; walking away from a game you can’t win and making your own rules is a powerful tool for defeating oppressive socialist movements that demand increasing public compliance in order to survive.  The reason why US men would leave the country to avoid women influenced by feminism is not a mystery.

While most women are mercenary by their biological nature (hypergamy), American women tend to be the most expensive. Studies show that the majority of women around the world prefer a man with a larger annual income, but the magic number for a man to be desirable in the US is in the six figure range, preferably 200K and above, which is in the top 5% of earners.  However, the median income for men in the US is around $60,000.  

Add in expectations of physical attributes (height above 6ft and physically fit) and the pool of single men that western women desire plummets to around 1% or less.  The mental disconnect between what women think men should earn vs the national average is delusional.  They have limited their options down to finite group of potential partners while never asking themselves what they bring to the table in return?  This is where the immutable rules of supply and demand kick in.

Keep in mind that these expectations are not only reserved for high income women; most American women regardless of background seek out this 1% of men, and all of them believe that they are capable of catching these men even when competing with younger and far more attractive peers.  The female fantasy of trapping “Mr. Big” and living a life of luxury and ease while also remaining “strong, independent and sexually liberated” is a specifically western feminist trope.  And though it seems to run contrary to the feminist ideal, it makes sense from their point of view.  

Feminism treats men as oppressors, but ironically it also treats them as a utility to be used.  Why not shame men into being submissive and acting as breadwinners if possible?  This double standard is causing American men in the middle of the financial spectrum to leave and look elsewhere.          

Beyond the money issue is the problem of feminist indoctrination.  The primary goal among feminists?  It’s not happiness, it’s power.  While presented as a crusade for equality, there are already equal rights for women in the west.  So, feminism has instead become a license for destructive behaviors including childishness, lack of self awareness, inflated ego and the view that being diplomatic in a relationship is a weakness.  At the same time they see aggression as a sign of “strength and independence.”  A belief system of self absorbed vanity removing the key component of femininity that men look for (nurturing) makes a successful marriage impossible.   

The promiscuity and lack of personal responsibility promoted by feminism also plays a major role in the fading marriage prospects of women in the US.  Studies show that women with extensive sexual histories and more sexual partners tend to have less happy marriages once they settle down.   

It should be noted that some feminists in the US are attempting to start their own “Passport Sis” movement, going overseas looking for marriage.  They are failing miserably, discovering that men in foreign countries put up with their combativeness far less than their American counterparts.  There is also no parallel movement of foreign men flying to the US to seek out American women.  Meaning, woke western women are considered the bottom of the barrel by men in their own countries and they are not sought after by foreign men either.

Instead of reflecting on their own flaws and ideals as the cause of this trend, feminists instead do what they always do – Try to sabotage the happiness of others and bottleneck all social discourse through their own narrow filter of the world.  If you stay and court them, you are evil.  If you walk away from them, you are evil.  So, why not walk away?  

Authored by Tsvetana Paraskova via oilprice.com,

Authored by Caitlin Johnstone

During a speech at the E.U. Parliament’s foreign affairs committee on Thursday, NATO Secretary General Jens Stoltenberg clearly and repeatedly acknowledged that Putin made the decision to invade Ukraine because of fears of NATO expansionism.

His comments, initially flagged by journalist Thomas Fazi, read as follows:

“The background was that President Putin declared in the autumn of 2021, and actually sent a draft treaty that they wanted NATO to sign, to promise no more NATO enlargement. That was what he sent us. And was a pre-condition for not invade Ukraine. Of course we didn’t sign that.

The opposite happened. He wanted us to sign that promise, never to enlarge NATO. He wanted us to remove our military infrastructure in all Allies that have joined NATO since 1997, meaning half of NATO, all the Central and Eastern Europe, we should remove NATO from that part of our Alliance, introducing some kind of B, or second class membership. We rejected that.

So he went to war to prevent NATO, more NATO, close to his borders.”

Stoltenberg made these remarks as part of a general gloat about the fact that Putin invaded Ukraine to prevent NATO expansion and yet the invasion has resulted in Sweden and Finland applying to join the alliance, saying it “demonstrates that when President Putin invaded a European country to prevent more NATO, he’s getting the exact opposite.”

Stoltenberg’s remarks would probably have been classified as Russian propaganda by plutocrat-funded “disinformation experts” and imperial “fact checkers” if it had been said online by someone like you or me, but because it came from the head of NATO as part of a screed against the Russian president it’s been allowed to pass through without objection.

In reality Stoltenberg is just stating a well-established fact: contrary to the official western narrative, Putin invaded Ukraine not because he is evil and hates freedom but because no great power ever allows foreign military threats to amass on its borders  —  including the United States. That’s why so many western analysts and officials spent years warning that NATO’s actions were going to provoke a war, and yet when war broke out we were slammed with a tsunami of mass media propaganda repeating over and over and over again that this was an “unprovoked invasion”.

It would have been so very, very easy to prevent this horrific war. Off-ramp after off-ramp after off-ramp was passed to get us to where we’re at now. Chance after chance after chance to avoid all this pointless death and misery was passed up, both before 2014 and every year since. The US-centralized power structure knowingly chose this war, and it did so to advance its own interests. If people really, deeply understood this, the entire western empire would collapse.

It’s the damnedest thing how you’ll get called a Kremlin agent for saying that this war was provoked by NATO expansionism and that it serves US interests, even when NATO openly says this war was provoked by NATO expansionism and US officials keep openly saying that this war serves US interests.

The latest entry in the latter category came in the form of a Thursday tweet by Senate Minority Leader Mitch McConnell, which reads, “Standing with our allies against Russian aggression isn’t charity. In fact — it’s a direct investment in replenishing America’s arsenal with American weapons built by American workers. Expanding our defense industrial base puts America in a stronger position to out-compete China.”

When official authorized narrative-makers acknowledge these things it’s okay, but when normal human beings do it it’s Kremlin disinformation. This is because when the authorized narrative-makers do it they’re doing it to advance the information interests of the US empire — to explain to war-weary Americans how this war benefits their country, or to mock Putin’s failure to stop the enlargement of NATO — whereas when normal people do it it’s to establish what’s true and factual.

Yesterday, speaking at the European Parliament’s Committee on Foreign Affairs, NATO’s Secretary General Jens Stoltenberg admitted that NATO is responsible for deliberately provoking the war in Ukraine:

“President Putin in the autumn of 2021 sent a draft treaty that they wanted…

— Thomas Fazi (@battleforeurope) September 8, 2023

This all happens as a study sponsored by the EU with a group funded by US oligarch Pierre Omidyar is being circulated by mass media outlets like The Washington Post finding that Twitter under Elon Musk has not been doing enough to censor “Russian propaganda” on the platform. This would put Musk in violation of the European Union’s Digital Services Act, which requires platforms to restrict such materials.

As Glenn Greenwald has noted, the Digital Services Act defines “Russian propaganda” so extremely broadly that it includes “ideological alignment with the Russian state” in the category of materials that must be censored, which includes people who “parrot the Kremlin’s narratives through originally produced content or by spreading Kremlin aligned narratives to different target audiences and languages.”

Anyone who speaks out against US foreign policy relating to Russia online is always immediately accused of “parroting Kremlin narratives” by empire apologists mindlessly regurgitating what they’ve been told to believe by outlets like The Washington Post, whether they have anything to do with the Russian government or not. I myself have no affiliation or interaction with the Russian state whatsoever, yet I receive many of these accusations every single day online just for criticizing US foreign policy.

The Washington Post’s latest “disinformation study” – sponsored by the EU with an Omidyar-funded group that accuses Twitter of failing to censor “Russian propaganda” – is another in a long line of fraudulent attempts to justify censorship with pro-censorship demands.

Looking at… pic.twitter.com/2B63fpnPwB

— System Update (@SystemUpdate_) September 7, 2023

If I were the NATO Secretary General publicly gloating about how Putin’s efforts to stop the expansion of NATO have failed, it would be fine for me to acknowledge that NATO expansion provoked this war after our refusal to prevent a needless conflict. But because I am harming the information interests of the western empire instead of helping them, that makes me a Russian propagandist.

This isn’t because the definition of “Russian propaganda” is flawed, but because it is working exactly as intended. The push to marginalize and eliminate “Russian propaganda” has never had anything to do with fighting the actual materials put out by the Russian state (which have essentially zero meaningful existence in the western world); the push has always been about stomping out opposition to US foreign policy. 

Like so much else in this world when examining the behavior of power, it’s ultimately all about narrative control. The powerful understand that whoever controls the dominant narrative about world events actually controls the world, because real power isn’t just controlling what happens but controlling what people think about what happens. That’s the real glue holding the US-centralized empire together, and the world will never have a chance at knowing peace until people start bringing consciousness to it.

* * *

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“No Challenger 2 has been lost in combat since it was first deployed in 1994, although one was destroyed in a friendly-fire incident in Iraq in 2003,” The Guardian reported Wednesday after the UK Ministry of Defence confirmed the first Challenger 2 was destroyed on the Ukrainian battlefield.

Russian media now says it has happened again: “Russian forces have reportedly destroyed a second Challenger 2 main battle tank out of the 14 that London has supplied to Kiev, RIA Novosti reported on Saturday, citing a local civic leader from Zaporozhye Region.” If confirmed, this would mark another devastating development for Kiev and its backers.

The sources cited in this latest report say the UK-supplied tank took a direct hit from a Russian Kornet missile, which is a man-portable anti-tank guided missile capable of being mounted on a vehicle.

One pro-Kremlin activist was cited in Russian media as saying it’s “open season” on British tanks in Ukraine and that they will “burn just as well as any other Western equipment.”

While the UK has yet to confirm or deny these latest claims that a second Challenger 2 tank has been destroyed, the defense ministry did confirm destruction of the first one, based in part on ample video evidence:

The UK has confirmed the first loss of a Challenger 2 tank by Ukraine, saying it was “hit by Russian artillery.”

Speaking to Sky News on Wednesday morning, the UK’s defence secretary Grant Shapps also confirmed the vehicle’s crew had survived.

Video surfaced on social media early on Tuesday morning of a Ukrainian Challenger 2 burning at the side of the road believed to be south of the recently-liberated town of Robotyne.

In the aftermath, British military sources further indicated there are as yet no plans for the UK to replace those tanks lost on the battlefield. 

Kiev is still awaiting the M1 Abrams tanks promised by Washington, but these are sophisticated enough to require many months of additional training for Ukrainian operators. So far, the main battle tanks supplied by the West have not been the “gamechanger” that Ukraine hoped.