From A Reader, Replying To My Recent Comments On China And, Unrelated, AI -- July 6, 2025

I have contacted you several times in the past on sundry matters. I am the  former ND guy who has lived in .................. I retired ....... five years ago from a technical position (........................). I had a couple of comments that I wanted to share with you.

I have been following the affairs in China for quite some time.  ...............  In the last year, Xi's status has diminished greatly and many of his appointees to positions  and supporters have been purged.  He has had significant health issues but the real status of his health have only been guessed at.  The supposition is that is to be a change in government at the end of summer into fall.  There are many blogs and podcasts on China, but the one I trust to not just follow rumors is:

Lei's Real Talk            https://www.youtube.com/c/LeisRealTalk

She does several videos per week touching on CCP matters and current status of China.   You may also be interested in past videos pertaining to China's population is no where near the stated number.  There is much evidence that their population is more in line with 700 to 900 million rather than state reported figure.  There are whole towns that have been razed since there were very few people living there.  The economic slowdown coupled with tariff threats has wreaked havoc with their manufactureing output. Many people are being paid a fraction of their normal wage since the companies they work for are in a cash crunch.

In another matter,  I had worked in AI since the middle 80's. One of my roles .....was to generate software for technical purposes such as analysis of technical data since there was no commercial software available at that time.  While there is great potential for AI to be used, much of the current applications are a lot of hype. The current versions of AI to generate applications is at best glorified pattern recognition. That is why it has been used for photo / image identification in security applications.  There is no intelligence in AI, it is just very good at recognizing patterns that are similar or have connections.  The current attempts to use information on the web to generate results is a problem in there is no check for any validity. The whole analysis is circular and problematic.  False information is given just as much weight as true information and the results are only based on frequency.  If 51% of the information used is false or not quite true, the result provided will be coming from the false information.  .......  I was working with several universities to generate new approaches to analyzing these types of data. When used properly, the techniques are quite powerful.

Trump's One Big Beautiful Bill -- July 3, 2025

There will be a lot of articles asking the question, "who won, who lost?"

If I'm asked, my answer:

In the big scheme of things, if someone asks me who are the winners, who are the losers with this bill, this is my answer. It's very, very simple.

The big winner is the United States.

The big loser is the rest of the world.

Seriously. It's pretty easy.

Or another way to say the same thing: The big winners: those who support MAGA. -- those who want America to succeed, and widen the gap between capitalists and socialists.

The big losers: elitists and globalists. Those who hate to see America succeed at the "expense" of the rest of the world.

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Thoughts

OBBB:

• US debt: "it's a spending problem not a revenue problem"
• it's been proven, without a doubt, that human behavior defaults to living beyond one's means
• that is also true with many / most / all countries ever since the invention of the nation-state
• in the past 100 years, the US federal government has had a budget surplus in 12 non-consecutive fiscal years.
• the most recent year in which the US has a budgetary surplus: FY 2001
• wow, that was almost 25 years ago -- ancient history
  
• in CY 2000: Bill Clinton, Tom Daschle, Harry Reid
  
• another truism: those who try to reduce government spending are portrayed as enemies of the people, or worse
  
• the GOP should take a page from the Dems' playbook and worry about the US debt only in years when the government is led by the opposition party 

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More

 l

Apparently these tax cuts are in the OBBB. There is still confusion. But VDH says these tax cuts are in the bill or there is talk about these tax cuts:

• no federal income tax for the military -- being talked about
• no federal income tax for first responders -- being talked about
• no taxes on overtime -- in the bill?
• no taxes on social security (and apparently no income limits yet) -- in the bill?

So, we'll have to wait and see. But it's amazing. Even after the all 980 pages of the tax bill were read out loud in the US Senate, we still -- apparently -- don't really know what's in the bill.

Apple, AI, Perplexity, And $500 Million Spent On New Office Space In Bay Area -- June 29, 2025

From ChatGPT this date.

Updates

June 30, 2025: AAPL pops on rumor that Apple is considering partnership of some sort with Perplexity and/or OpenAI. Rumors suggests both will "insert" into Siri. Would be blow to Google. Would also make the anti-monopoly case against Google/Apple moot.

Original Post 

See this link, why this question got asked.

Perplexity AI:

Apple has been in internal talks about potentially acquiring or partnering with Perplexity AI, a San Francisco–based startup valued at around $14 billion. This move would mark a major shift in Apple’s AI strategy.

What is Perplexity AI?

• Perplexity is a conversational AI search engine and chatbot that provides real-time answers with cited sources.
• it supports multiple large language models, including its own, and had about 15 million users by mid‑2024.

Why Apple is interested:

• boost Siri & search
• Apple could integrate Perplexity’s AI capabilities directly into Siri, Spotlight, and Safari, potentially compensating for its lag behind rivals
• reduce reliance on Google With a $20 billion‑per‑year deal with Google for Safari search revenue under regulatory scrutiny, Apple needs an alternative search & AI platform
• acquire top-tier talent 
• buying Perplexity would bring in experienced engineers and researchers to accelerate Apple’s internal AI development

Where things stand:

• talks are early-stage and internal—involving top execs like Adrian Perica and Eddy Cue
• no formal offer has been made yet, and Perplexity publicly states it’s unaware of any M&A discussions

Other big players—Meta and Samsung—have also expressed interest, though talks there have stalled

Bottom Line

Apple is quietly exploring a possible acquisition of Perplexity AI to strengthen its AI and search technology—potentially its largest-ever deal. But as of now, nothing’s finalized; the discussions are still preliminary.

Investing In Quantum Computing -- June 14, 2025

With regard to investing in quantum computing, what would you recommend for a 20-year-old investor with minimal experience in investing? 

From ChatGPT:

Excellent — you’re looking at this exactly right: for a 20-year-old new investor, quantum computing can be fascinating but high risk. Let me quickly frame this for you:

---

Quantum Computing: High-Risk, Long-Horizon Play

At age 20, you have the biggest asset: time. Quantum computing may take 10–20 years to fully mature commercially. So, a small speculative allocation might make sense alongside a core portfolio.

Here’s a simplified way to look at the most “investable” companies for a new investor:

My advice for a 20-year-old investor:

1. Core first: (80%)
   

   Build your portfolio mostly around index funds (e.g., S&P 500 ETFs like VOO or SPY).

2. Speculative sleeve: (15%)

   Consider allocating ~1-5% to high-risk speculative plays like IonQ or Rigetti.
   

   Big Tech with quantum exposure: MSFT, GOOGL, IBM (10%)
   Pure Quantum Plays: IONQ, RGTI (5%)
   

3. Diversify your quantum exposure:

   You’re already getting indirect exposure through companies like Microsoft, Google, and IBM.

4. Stay informed:

   Follow quantum tech news — things change fast here.

5. Don’t FOMO into hype cycles:

   Quantum stocks can swing wildly based on press releases and investor sentiment.

   ChatGPT will build three investment strategies:

   • Core (80%): see above
   • Sleeve (15%): see above
   • Moonshot (5%): see below.

   Moonshot, quick example:

   Let’s say you start with $5,000:

   • $2,500 — VTI (US stock index)

   • $1,000 — VXUS (international index)

   • $500 — BND (bonds or cash equivalent)

   • $500 — MSFT + GOOGL + IBM (big tech)

   • $250 — IONQ

   • $250 — ARKQ or similar

   From my perspective: the BND (bonds or cash equivalent) does nothing for the portfolio; the analyst is simply investing using "old school" percentages. If the $500 is simply a place to park cash to build up a position of cash from which to make future equity purchases, the that's fine. But thinking that 10% of an investment in a bond fund will help even out the volatility is crazy. 

   I suppose re-allocating on a monthly basis might be a reason for a position in bonds or cash.

   So, for example, when the larger bucket (VTI) exceeds 50% of total portfolio, see something and re-invest the proceeds in any of the other buckets that are less than their recommended percent (20%, 10%, 10%, 5%, 5%). 

   But, wow, that's still an incredibly conservative equity portfolio.

   How about: 
   

   • VTI: 25% (unfortunately that already included a lot of Big Tech)
   • VXUS: 25%
   • big tech: 30%
   • pure quantum: 20%

   Because VTI already includes so much Big Tech, how about:
   

   • VXUS: 25%
   • VTI: 15%
   • top four of the magnificent seven: 35%
   • pure quantum: 25%

Gary Cohn -- Bio

Gary Cohn from wiki:

Early life and education:

Gary Cohn was born to an Eastern European Jewish family, the son of Victor and Ellen Cohn, and was raised in Shaker Heights, Ohio. His father was an electrician who later became a real estate developer.[13] Cohn was diagnosed with dyslexia at a young age, and attended four schools by the time he reached sixth grade.[14] His childhood experiences with dyslexia were a featured case study in David and Goliath by Malcolm Gladwell. Cohn studied at Gilmour Academy for high school and graduated in 1979.

Cohn received a Bachelor of Science degree with a major in business administration from American University in 1982.

Career:

Cohn started his career at the U.S. Steel home products division in Cleveland, Ohio.[19] After a few months, he left U.S. Steel and became an options dealer in the New York Mercantile Exchange. He taught himself the basics of options by reading about it in the days between meeting the hiring manager and joining the New York Mercantile Exchange.[

Cohn was hired by Goldman Sachs in 1990 and became a partner at the firm in 1994. ] In 1996, he was named head of the commodities department, and in 2002, he was named the head of the Fixed Income, Currency and Commodities (FICC) division. In 2003, he was named co-head of Equities, and in January 2004, Cohn was named the co-head of global securities businesses.  He became president and Co-Chief Operating Officer, and director in June 2006.While at Goldman Sachs, Cohn was also a member of the firm's board of directors and Chairman of the Firmwide Client and Business Standards Committee.

In 2010, Cohn testified to Congress on Goldman Sachs' role in the 2008 financial crisis. He testified: "During the two years of the financial crisis, Goldman Sachs lost $1.2 billion in its residential mortgage-related business. We did not 'bet against our clients', and the numbers underscore this fact."

US Vs China -- Energy -- Random Charts -- June 6, 2025

A reminder:

• AI is an energy story; and,
• the renewable energy story is driven by ideology.

This graph was sent to me, no source, no link, appears it was posted to purposely mislead readers:

This one chart puts the above chart in perspective:

This chart may be most important (link here):

This is an incredibly misleading chart and doesn't tell me anything:

Why Did Texas Remove BlackRock From Pension Fund Boycott -- ChatGPT -- June 4, 2025

On June 3, 2025, Texas removed BlackRock from its list of companies boycotting the energy industry. This decision followed BlackRock’s significant shift away from climate-focused initiatives, including its withdrawal from the Net Zero Asset Managers group and decreased support for environmental shareholder resolutions. Texas Comptroller Glenn Hegar cited these changes and BlackRock’s support for the new Texas Stock Exchange as reasons for the delisting .

The removal allows Texas state agencies and funds to resume business with BlackRock, which manages substantial investments in the state. However, BlackRock continues to face legal challenges from Texas Attorney General Ken Paxton, who accuses the firm of manipulating energy markets—a claim BlackRock disputes .

This development is part of a broader trend where financial firms are retreating from earlier ESG commitments due to mounting political pressure, drawing criticism from Democratic leaders and climate activists for weakening their environmental stances