Yo Pit Crazies,

For all of the weekend angst over AI, the funniest has been from Sen Bernie Sanders: “AI is the new existential threat.”

Not long ago, Climate Change was the existential threat

Before that, the Ozone Layer, Killer Bee Swarms and Nuclear War.

It reminds me of the Princess Bride:

Inigo Montoya delivers the iconic line, "You keep using that word. I do not think it means what you think it means."

Bernie's prediction of the End of the World six years ago has not come to pass.

He’s not very good at this existential threat thing.

I still conserve gas and don’t fly much because I think using less gasoline is a good idea.

If AI creators really believe they’re developing the next version of “humanity’s end,” they should slow it down on their own.

They shouldn’t use Uncle Sam to create new regulations that make it harder for competitors to, you know, compete.

Very convenient going into the IPO for Anthropic…

That news set up the 1st half of the week.

The Fed is setting up the 2nd half.

Warsh Delivered the Hike I don’t Want

Fed Chair Warsh drew the ire of President Trump as he defied my prediction and raised 25 points. I guess wars are inflationary and Congress will have to figure out how to pay the bills.

I expected a 3% move on this FOMC but did not get my rate pause. Instead we got a 1.5% drop from the top today in the S&P 500 Trust ETF (SPY).

Still a pretty good move.

SPY 3-Day Chart

With rates moving higher now into the end of the year, maybe a quicker pace in the Persian Gulf will play.

Everyone wants to see that.

I’m still looking for a 2% up move as the surprise direction from here.

Look for the least likely place for that surprise and we will likely find it.

Fed Chair Warsh holding the line and moving rates up means this Fed is ready to do the dirty work to rein in Congress.

Will they listen? Investors should like it.

Hope this was helpful,

Andrew Giovinazzi