Syz the moment

🚨 In the wake of DeepSeek turning the entire industry on its head — and wiping nearly $600 billion off of the market cap of Nvidia in a single day — one new phrase has become table stakes for anyone wading into the DeepSeek discourse: Jevons Paradox, with traffic to its associated Wikipedia page soaring this week. 👉 Per that very Wikipedia page: “...the Jevons paradox occurs when technological advancements make a resource more efficient to use (thereby reducing the amount needed for a single application), however, as the cost of using the resource drops, overall demand increases causing total resource consumption to rise.” 👉 The original example posited by Mr. William Stanley Jevons, summarized nicely by Axios, was coal. Progress in steam engines, which enabled them to use less coal, didn’t lead to a drop in coal demand — it led to a huge rise. Though a bit of an oversimplification, that is essentially the crux of the current debate in AI: DeepSeek reportedly achieved something for a lot less money and resources than US competitors like OpenAI and Meta used. That could be interpreted in two ways: • We will therefore need fewer high-tech chips like the ones Nvidia makes, and fewer energy plants to power them (which is why power and datacenter stocks got hammered this week); • Or, and this is where the Jevons Paradox comes in, WE WILL WANT EVEN MORE 💪 The market seemed to follow the first school of thought on Monday 🐻 , but came around to the second by Tuesday 🐮 , with chip analysts and tech heavyweights, most notably Microsoft’s CEO Satya Nadella, citing the paradox as proof that AI use will “skyrocket.” 🚀 🚀 🚀 Source: Chartr

Elon Musk's Tesla (TSLA) appeared to take advantage of a new accounting rule allowing for holdings of digital assets to be marked-to-market each quarter. The company's fourth quarter earnings report shows its 9,720 bitcoin valued at $1.076 billion as of the end of 2024. That's up from what had been $184 million for several quarters prior. Alongside that change, Tesla also recorded a GAAP income boost of $600 million on its digital holdings. For perspective, the company had overall GAAP income of $2.3 billion in the fourth quarter. A new rule from the Financial Accounting Standards Board (FASB) requires corporate holders of digital assets to begin marking those assets to market each quarter, no later than the first quarter of 2025. Companies could take advantage of the new rule prior to that at their own discretion, which Tesla has appeared to do. Prior to this new rule, corporate holders of digital assets were required to report those holdings at what was their lowest valuation during the time of ownership. Tesla overall reported adjusted EPS of $0.73 in the fourth quarter, missing estimates for $0.76. The gain on its bitcoin holdings was for GAAP purposes and would have had no effect on adjusted EPS. Shares are higher by 3.5% in after hours trading. Source: Coindesk

President Donald Trump warned US federal employees to return to in-person work by February 6 or face termination. The government is offering buyouts, with departures permitted under a deferred resignation programme. Trump aims to reduce the federal workforce. "If they do not agree to show up to work in their office by February 6, they will be terminated. Therefore, we will be downscaling our government, which is something that the last 10 presidents have tried very hard to do, but failed," Trump said. "We think a very substantial number of people will not show up to work, and, therefore, our government will get smaller and more efficient," Trump told reporters on Wednesday. "And that's what we've been looking to do for many, many decades," he added. We may ask these people to prove that they didn't have another job during their so-called employment with the United States of America, because if they did, that would be unlawful," Trump said Source: India Today Source image: Graphic of Donald J. Trump saying "You're fired". The Spiggle Law Firm Marketing Team thru Forbes

Here's a chart shared last year (so it isn't updated for 2024 yet), but it shows a clear trend starts early in the year. Source: Carson, Ryan Detrick

The FOMC statement contains only minor changes that mark to market recent economic developments: 👉 "Labor market conditions remain solid" = Hawkish❗ 👉 "Inflation remains somewhat elevated." (The central bank notably removed reference to inflation making progress towards the goal) = Hawkish❗ The Fed will continue its QT program at an unchanged pace of $60 billion a month. The market does not expect rate cuts at least until June 2025. Source: Nick Timiraos, The Kobeissi Letter

Banks can serve crypto customers as long as they can manage the risk, said U.S. Federal Reserve Chair Jerome Powell, amid allegations that the crypto industry is being cut off from financial institutions. "The threshold has been a little higher for banks engaging in crypto activities and that's because they're so new," Powell said on Wednesday when asked by a reporter during a Federal Reserve press conference about risks associated with cryptocurrency. The central bank is not against innovation, he added. Crypto firms have complained about the difficulty behind establishing and maintaining bank accounts in the U.S. Following the collapse of crypto exchange FTX in late 2022, several governmental agencies, including the Federal Reserve, issued warnings on "crypto-asset risks." Source: The Block

Source: Tuur Demeester @TuurDemeeste

Source: Barchart