Always strive to learn something useful. --Sophocles

*SIGH*

I'll let the Slashdot summary do the initial speaking for me:

A global shortage of jet engines is threatening the rapid expansion of AI data centers, as hyperscalers like OpenAI and Amazon scramble to secure aeroderivative turbines to power their energy-hungry AI clusters. With wait times stretching into the 2030s and emissions rising, the AI boom is literally running on jet fuel. Tom's Hardware reports: Interviews and market research indicate that manufacturers are quoting years-long lead times for turbine orders. Many of those placed today are being slotted for 2028-30, and customers are increasingly entering reservation agreements or putting down substantial deposits to hold future manufacturing capacity. "I would expect by the end of the summer, we will be largely sold out through the end of '28 with this equipment," said Scott Strazik, CEO of turbine maker GE Vernova, in an interview with Bloomberg back in March.

General Electric's LM6000 and LM2500 series -- both derived from the CF6 jet engine family -- have quickly become the default choice for AI developers looking to spin up serious power in a hurry. OpenAI's infrastructure partner, Crusoe Energy, recently ordered 29 LM2500XPRESS units to supply roughly one gigawatt of temporary generation for Stargate, effectively creating a mobile jet-fueled grid inside a West Texas field. Meanwhile, ProEnergy, which retrofits used CF6-80C2 engines into trailer-mounted 48-megawatt units, confirmed that it has delivered more than 1 gigawatt of its PE6000 systems to just two data center clients. These engines, which were once strapped to Boeing 767s, now spend their lives keeping inference moving.

Siemens Energy said this year that more than 60% of its US gas turbine orders are now linked to AI data centers. In some states, like Ohio and Georgia, regulators are approving multi-gigawatt gas buildouts tied directly to hyperscale footprints. That includes full pipeline builds and multi-phase interconnects designed around private-generation campuses. But the surge in orders has collided with the cold reality of turbine manufacturing timelines. GE Vernova is currently quoting 2028 or later for new industrial units, while Mitsubishi warns new turbine blocks ordered now may not ship until the 2030s. One developer reportedly paid $25 million just to reserve a future delivery slot.

Now, in some cases the jet engine is in place as a power backup in case main grid power fails. But in many cases, such as Leon Muskbrat's xAI data centers, he's running them full-time while he's waiting for generating stations to be built! And yes, the locals are not happy because he's installing more turbines than he's permitted for. And, of course, the local town councils are doing squat to enforce permits because JOBS!

One interesting Slashdot commenter said "Yes during the dotcom bubble the company my dad worked for made HVAC and UPS equipment for data centers, and they declined the opportunity to build out bigger capacity to meet orders instead of just letting the queue grow longer because their management figured it was a bubble. So, they survived the pop because instead of having unused factories, they just had some cancelled orders. The turbine manufacturers probably feel the same or just don't feel like trying to build factories during a trade war anyhow."

The big question, of course, is how much will this cause problems with the production of jet aircraft? These jet engine generators take engines made for... wait for it... jets. The Boeing 767 is specifically mentioned, that plane is currently in production, and engines are needed for newly-made aircraft and also to service the fleet that is now flying. In the world of 'money talks, BS walks' I suspect that the vulture capitalists backing AI may be able to throw more cash towards data centers, pulling more orders for engines than the airlines can. Could this disrupt global air travel? Will the engine makers, such as GE, be stupid enough to build more capacity and when the AI bubble bursts, be on the hook for billions of dollars that suddenly is no longer needed?

Now, there's one other point that I don't get. There are thousands and thousands of jet engines on the used markets available right now. Okay, maybe they're not quite as powerful as something that's strapped onto a 767. So maybe you need two or three or four to make that much power. But they're available right now. SO WHY AREN'T YOU GOBBLING UP THE USED MARKET?

Article behind a paywall:
https://www.tomshardware.com/tech-industry/turbine-shortage-threatens-ai-datacenters-as-wait-times-stretch-into-2030

https://hardware.slashdot.org/story/25/10/28/0151205/jet-engine-shortages-threaten-ai-data-center-expansion-as-wait-times-stretch-into-2030

The "boom" is from the implosion from the sudden vacuum.

The Port of Los Angeles, through which 45% of its volume is Chinese goods, is expecting a 35% reduction in volume starting NEXT WEEK.

Because of this, UPS is planning the layoff of TWENTY THOUSAND PEOPLE and the closure of 73 buildings.

Think about the downstream of the reduction of shipping containers from the port. Because of that, truckers are avoiding going to the port because they'll likely have to deadhead back (travel without a load). Without goods coming in, distribution warehouses are going to cut hours, sack people, and close facilities.

Then we get to the retailers. How many of your clothes are made in the USA? The last two pair of shoes that I bought were a pair of Tony Lama boots and MBT shoes. Made in China and Vietnam. Nigh unto 100% of my clothing comes from Asia. Walmart: I saw a figure that 70% of its non-grocery inventory is from China! In 3-4 weeks, those shelves are going to start having problems being restocked.

And that will be the upstream from that? Walmart truckers laid off, distribution centers closing and consolidating, buyers being surplus to requirements because there's nothing to buy. Now might be an interesting time to short Walmart stock if you're interested in such.

We lost several trucking companies during Covid, and several more have died since. This is likely to cause the failure of yet more. That will have a likely follow-through effect of damaging truck manufacturers. Why buy new trucks if so many surplus and serviceable trucks are going up for auction as these smaller trucking companies collapse? Sure, nice is new, but cheaper is... cheaper.

Amazon has been implementing a lot of robot picking in its warehouses for years now, I don't know how this will affect them. So much of their merchandise comes from China that there's no doubt that it will. The number of goods that they have on offer in the USA will plummet, and with that so will their sales. But they make huge profit off of their cloud services, I think Jeff will be able to get his next super yacht.

https://www.cnbc.com/2025/04/29/port-of-los-angeles-sees-shipping-volume-down-35percent-next-week-as-tariffs-bite.html


Canada is probably going to be fine. They signed a 15 year oil deal with China at full price! Their oil sales to the USA was discounted, so more money for them to be made. They'll have to build some pipelines and upgrade some ports, but they'll recover all that pretty quickly. There's lots of countries willing to buy what Canada can produce. And they got the PM that they needed who actually understands how economies work. Compared to our idiots who think only one side can win in a trade deal.


Meanwhile, the Treasury Secretary Scott Bessent, while talking to the Economic Club of New York on Thursday said "Access to cheap goods is not the essence of the American dream, the American Dream is rooted in the concept that any citizen can achieve prosperity, upward mobility, and economic security. For too long, the designers of multilateral trade deals have lost sight of this."

Nice words. Problem is that you and your administration buds are defining 'citizen' as just your own little coterie and screw everyone else. And now you're destroying so many jobs at so many levels that those people won't be able to be reabsorbed back into the work force, there aren't enough positions. And there are a number of farmers about to lose generations of family work who would like a word with you behind the barn, Scotty. They had security and reasonable prosperity until things like USAID were destroyed by your administration.

https://www.cnbc.com/2025/03/06/treasury-secretary-bessent-says-the-american-dream-is-not-about-access-to-cheap-goods.html

Commerce Secretary Howard Lutnick has a vision of generations of American families working in factories, apparently said vision is making microchips and such. This type of work, for a lot of workers, is actually kind of low-skilled - it can be trained on the job - and doesn't pay well, $11-16 an hour. It takes about $22 minimum to support a family. Generations of, what is effectively, slave labor. Maybe said factories will start stores where their workers can buy everything they need, in convenient company scrip that they'll be paid in.

https://www.huffpost.com/entry/trump-poverty-trade-war-economy_n_6814ee26e4b08575d39c9a8a


Of course these two rectal haberdashers won't be hurting or working on an IC assembly line.

Howard Lutnick: In 2018, the Bloomberg Billionaires Index estimated his net worth to be US$1.5 billion. In 2018.

Scott Bessenet, according to Wikipedia, "As of December 28, 2024, Bessent's net worth was at least $521 million, according to his financial assets disclosure by the U.S. Office of Government Ethics, although his actual net worth is speculated to be much higher."

I told her late last year that it would be a good idea to order a new one because of the probability of serious inflation hitting next year. This was one of the reasons why I got my Asus laptop repaired/replaced. Our Mac laptops should be good for another 5 years or more, we'll see if OS revisions makes them stale before then.

Anyway, had some problems ordering her a new base 16 yesterday, but resolved it this morning and she'll have a new phone sometime Tuesday. We're keeping her 13 Mini as a backup and for international travel in case of border trouble. I replaced my 13 Mini shortly after the 16 released last year as it had a couple of problems that were defying easy diagnosis. Thus far, OS-problems aside, it's been an excellent phone. Takes great photos even though it's not the Pro model.

Apple apparently shipped threefive planes-full of phones from India to the U.S. in three days last weekendmonth to avoid tariffs. And I note that the FedEx shipping confirmation for the new phone has it shipped from California: frequently when I buy big ticket items from Apple, they ship from China. This morning I saw an article that Apple stores were slammed over the weekend with people seeking new equipment before anticipated price hikes.


So. Tariffs and inflation. I'm going to talk about inflation first, in relation to Canada and Mexico since they were the first targets.

What do I think will happen. Well, we're already seeing pain in red states because Canadian businesses are stopping buying from them before last week's launch of the international trade war (including Penguin Island). With Canadian stores clearly labeling Canadian-manufactured products, it was easy for their citizens to avoid buying American products with very little effort on their part. This especially hit the liquor industry, which has lots of manufacturing in the south. Their products are slowly losing shelf space because it's not moving, so that's unsold inventory that is gathering dust. Not only is their revenue down because stores are not buying more product, at some point, stores are going to start wanting refunds on unsold merchandise from distributors.

But that's just sales, which can be a component of inflation. Let's talk about what the tariffs might do to what we see in shelf pricing. Bob and Tom are American manufacturers and they make largely the same product. Bob's source materials are American-made, and cost a little more than Tom's. Tom's source materials are now getting slammed by the tariffs and he has to pay more for his goods. To maintain profits, he has to charge more, so now his goods are a lot more expensive than Bob's. Clearly Bob, who already has decent sales, is going to sell more goods.

But is Bob going to keep the same price? Hell no! He'll raise his price, not as high as Tom's, but there's an opportunity here to make more money! Just like hurricane season and the aftermath when some lumber yards and such raise prices. There's no reason to leave money on the table if consumers must buy the product, as long as he keeps his prices lower than Tom's, who is stuck with the tariff, he's in great shape and everyone else is not only paying Tom's tariff if they buy Tom's because they like Tom, but they're also lining Bob's pocket.

And then there's poor Fred, who gets his source materials from China. He's just flat-out screwed. There's limits to how much you can raise your price and be competitive, and if he lowers his price to close to Tom's or Bob's, he may be losing money, which is no way to run a railroad.

What you'll see is manufacturers directly affected by the tariffs will raise their prices. Maybe not on current stock already made that's in the shipping pipeline, but they'll have to raise it on new stuff being made. And everyone other supplier or manufacturer is going to turn that dial up a couple of notches - not because they have to, but because the public will get used to paying more because they have no choice, and they're doing it because they don't want to leave any money on the table that they can't get ahold of.

That's my take on what we'll see on inflation. There's no way to say how high it will go or how wildly it will vary. But we are in for a wild ride.


Last week's tariffs. The most bat-shit insanity of it is that there was no sound mathematics behind it. It did not take into account the service industry, thus did not accurately reflect any potential trade imbalance. For example, Australia is a net importer of American goods (they have no automobile manufacturing there, etc.) yet were hit with a 10% tariff. There's also that arctic island that has no humans living on it, entirely populated by penguins and such, that has tariffs levied against it. It has been noted that the countries seem to have been selected/targeted by their internet Top Level Domain (.us, .uk, .de, etc). Absolutely non-sensical.

AND, just like when Premier Ford threatened an energy export tax to the USA, the piggie squealed when China threw a 34% tariff against American goods. He tried to hide behind the bluster of 'Big mistake!', but the fact is that he's never been able to handle strong opposition. He expects everyone to kowtow to him, viewing everything as a zero-sum game in which he must always win. Ignore the fact that in international trade, well-executed treaties can have everyone benefiting.

The most curious thing about his relationship with China is that all of the merchandise crap that he hawks is made there! But it's probably all paid out of a slush fund, so he probably never sees the costs and doesn't care as long as his suckers voters continue buying it.

My expectation: the billionaire class, behind the scene, will apply pressure to reverse the tariffs and it'll get done while victory will be declared. Too much money has been wiped from the exchanges for them to be happy with this uncontrolled and turbulent situation, and they're telling the news that they don't like it. "We got what we wanted, everyone is coming to negotiate a fair deal. WE WON! MAGA!"


One last note. I was so amused that his best pal forever, until he throws him under the bus, Leon Ketamine-head, was screaming that the 5 million or so protestors Saturday were all being paid by George Soros. Uh, bud, who was handing out checks in Wisconsin last week?

And Leon was screaming about losing $30 BILLION due to the tariffs. That is, until someone told him to delete his tweets. Which he did.


So there you have it. I'm probably wrong on everything, but that's my take on what's going on and what I expect to happen.


EDIT: to update Apple shipping phones from India. https://timesofindia.indiatimes.com/technology/mobiles-tabs/how-apple-flew-5-flights-full-of-iphones-from-india-and-china-in-3-days-to-beat-trump-tariffs/articleshow/120044321.cms

Forbes has an interesting four-part article called Why Amazon Can't Make A Kindle in the USA. We've outsourced so much manufacturing to Asia that core skill competencies are now over there and not over here. There's a great quote as to what Asus did to Dell:

ASUSTeK started out making the simple circuit boards within a Dell computer. Then ASUSTeK came to Dell with an interesting value proposition: ‘We’ve been doing a good job making these little boards. Why don’t you let us make the motherboard for you? Circuit manufacturing isn’t your core competence anyway and we could do it for 20% less.’

Dell accepted the proposal because from a perspective of making money, it made sense: Dell’s revenues were unaffected and its profits improved significantly. On successive occasions, ASUSTeK came back and took over the motherboard, the assembly of the computer, the management of the supply chain and the design of the computer. In each case Dell accepted the proposal because from a perspective of making money, it made sense: Dell’s revenues were unaffected and its profits improved significantly. However the next time, ASUSTeK came back, it wasn’t to talk to Dell. It was to talk to Best Buy and other retailers to tell them that they could offer them their own brand or any brand PC for 20% lower cost.

Here's a list of things that we can no longer make in the US:

“Fabless chips”; compact fluorescent lighting; LCDs for monitors, TVs and handheld devices like mobile phones; electrophoretic displays; lithium ion, lithium polymer and NiMH batteries; advanced rechargeable batteries for hybrid vehicles; crystalline and polycrystalline silicon solar cells, inverters and power semiconductors for solar panels; desktop, notebook and netbook PCs; low-end servers; hard-disk drives; consumer networking gear such as routers, access points, and home set-top boxes; advanced composite used in sporting goods and other consumer gear; advanced ceramics and integrated circuit packaging.

It is not entirely doom and gloom, there's a list of things that can be done to turn it around, but it's going to require a lot of change and turning away from quarterly profits, and I can't see that easily happening.

http://www.forbes.com/sites/stevedenning/2011/08/17/why-amazon-cant-make-a-kindle-in-the-usa/

http://hardware.slashdot.org/story/11/08/22/1143216/Why-Amazon-Cant-Manufacture-a-Kindle-In-the-US

This is very depressing. I knew it was bad, but not this bad.

Basically, we the people of this country are delusional about how much of our nation's wealth is controlled by how small of a group of people, and how much is controlled by the poorest segment of our population.

Psychologists from Duke and Harvard Business School interviewed thousands of people to find out what their perception of wealth distribution was like, and it was not pretty. "Ariely and Norton found that Americans think they live in a far more equal country than they in fact do. On average, those surveyed estimated that the wealthiest 20 percent of Americans own 59 percent of the nation's wealth; in reality the top quintile owns around 84 percent. The respondents further estimated that the poorest 20 percent own 3.7 percent, when in reality they own 0.1 percent."

http://www.businessweek.com/print/magazine/content/10_44/b4201008238184.htm

*sigh*

"If California's unemployed residents banded together and formed a city, it would be the fifth-largest place in America, just behind Houston but ahead of Phoenix."
-- from Sacramento Bee story

Wow. Just... wow.

Here's the link to the story: http://blogs.sacbee.com/the-public-eye/2010/08/ca-unemployed-outnumber-population-of-phoenix-philly.html

The story goes on to say that if the unemployed formed a state, it would be the 36th largest.

First, Citibank! Somehow the company(ies) that process Citibank transactions for 7-11 quickie stores got compromised, resulting in huge amounts of money being stolen. Citibank is covering their customer's losses, and arrests have been made.

But the thefts are continuing!

It's going to be interesting to see how this turns out. I've been reading about it on various sources now for a couple of weeks. Wired.com also has a lot of coverage on it.

http://news.yahoo.com/s/ap/20080701/ap_on_hi_te/tec_atm_breach


Next, Circuit City & Blockbuster! Circuit City has been in trouble, Best Buy has been eating their lunch. Also their breakfast and dinner. In rode the video rental company Blockbuster to buy them out! Hurrah for them! Alas, today Blockbuster said it was pulling out of the deal as the economy has tanked since the initial meetings and it is no longer sensible for BB to buy CC.

Sucks to be them.

http://biz.yahoo.com/ap/080701/blockbuster_circuit_city.html


And finally, everyone's favorite coffee that is only slightly more expensive than gasoline (but not on a per gallon basis), Starbucks! They've been expanding at a ridiculous, if not insane, rate for the last many years, and it looks like the economy may have caught up with them. When a gallon of gas costs as much as a venti mocha soy-whip no foam something, then you're going to reevaluate what is a luxury and what is a neccessity, and there's a good chance that Starbuck's is going to be on the losing end of that equation.

"...Starbucks Corp. announced Tuesday it will close 600 company-operated stores in the next year, as the faltering U.S. economy hastened the pain caused by the company's own rapid expansion.

Starbucks did not say which stores will be closed, only that they are spread throughout the country. But it did say 70 percent of those slated for closure had opened after the start of 2006.

To put it another way, Starbucks is closing 19 percent of all U.S. company-operated stores that opened in the last two years, Chief Financial Officer Pete Bocian said during a conference call.

About 12,000 workers, or 7 percent of Starbucks' global work force, will be affected by the closings, which are expected to take place between late July and the middle of 2009..."

Ouch! I wonder how Dunkin' Donuts is doing? I'm not really a coffee drinker, but there's LOTS of people who like being able to walk into a coffee shop and order a cup of coffee, and the only decision is the size and whether or not it's decaf. And I've never much cared for Starbuck's pastries, I'd much rather have a Dunkin' Donut.

http://biz.yahoo.com/ap/080701/starbucks_closings.html