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2026-09-25 07:00 by Karl Denninger
in Technology , 126 references
[Comments enabled]  

Just reconcile yourself to the fact that if (or is that when) you are robbed directly, your credit card and other credentials are robbed, your data is sold by the company running said AI to someone so they can hose you or it gives you "cooked" advice (e.g. in investments or health) you, and not the entity that did it, will eat the consequence even if that consequence is your financial ruin or death.

How do I know this?

Well, just the other day an AI was exposed as hacking Australia's health portal.  That's not some "abstract thing" as many people tried to play off like the HuggingFace hacking (although the criminal aspect of it is the same; both are quite-clearly violations of a felony criminal statute in the US, The Computer Fraud and Abuse Act) yet the firms in question were not indicted, none of their employees, directors or officers were arrested and none of that appears to be forthcoming.

All of those incidents are far more-serious than stealing your credentials (e.g. your credit card or shopping account) or for that matter your personal health information (which has zero commercial protection whatsoever in that HIPAA contains no right of private action at all so you personally cannot sue!) thus spare me any nonsense about how you're "probably safe" because when it comes to recourse by all available evidence today you have none.  Indeed in the realm of both finance and health you're out of your mind to let an "AI" that is owned by anyone other than you running on your own hardware get anywhere near anything related to either, never mind giving one of them direct access to your investments, bank account, credit card or similar credentials.  Being bankrupted is pretty-serious stuff and so is being dead, incidentally.

While yes, the US Government has declined (thus far) to offer any sort of "nationalization" or "safety value" that would allegedly remove said liability it has in fact ignored said liability for already happened acts and these are not minor little incursions by any means just as was not hoovering up every copyrighted thing these AI companies could get their hands on which, I remind you, was also a criminal act because (1) many of the works were registered and (2) the act was undertaken with the motive of profit.

Govern yourself accordingly or suffer the consequences - including this sign I will wave in your face when it happens.

smiley

PS: All the hype about "rogue AI will kill us!" being spewed?  Its simple to solve: If you build a Gollum and it commits an offense you pay for it as if you did it with each and every director and officer of said entity along with the programming staff being personally responsible, up to and including getting the needle.  All this nonsense would stop in 30 seconds were that to be made clear and, I remind you, that's existing law already.  We just need to throw a half-dozen people in prison to prove it will be enforced without fear or favor.

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2026-09-24 07:00 by Karl Denninger
in Technology , 63 references
[Comments enabled]  

Softbank is reportedly trying to float an $11 billion junk rated bond issue to pour into OpenAI.

Now that alone isn't that huge of a surprise.

What is a surprise is that OpenAI wants part of it to make a payment due within 30 days on an existing issue.

"We can't make the payments, so let's issue more debt to make the payment!"

If you do this the common word for what you are is bankrupt.

Every time.

PS: Want insane?  There are reports that Oracle is laying off people at its Abilene TX data center -- the "flagship" of its AI ambitions with OpenAI.  Uh, exactly how may I ask?  Incidentally from that article employees were locked out before being formally notified.  But yes, all is well with the financial side of these deals.... right Buehler?

What's even more amusing is that Meta announced it integrated "Muse" into Facesucker (which incidentally is "no longer cool" with the kids and thus is dying -- slowly, but it is.)  Amazon immediately announced that they had detected Meta's AI scraping their site and had blackballed it.  Which, incidentally, is not difficult (Nearly all AI scrape attempts here are interdicted and blackballed as well.)

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2026-09-23 07:00 by Karl Denninger
in Education , 369 references
[Comments enabled]  

Education, to be specific.

Nikole Hannah-Jones, a Pulitzer Prize winner and best-known for creating the "The 1619 Project" allegedly examining the legacy of slavery in America, has perhaps detonated one of her (and many others') prime arguments: That education integration is an unbridled good thing and must be promoted and expanded.

Despite having plenty of money she and her husband sent their daughter into a high-poverty-rate high school in Brooklyn.  91% of the students there are black and latino.

The admission isn't just that the school failed. It's that Hannah-Jones knew there were problems, kept going anyway, and now says she cannot forgive herself for what that decision meant for her daughter.

In other words she and her husband knowingly sacrificed her own child's education for a political polemic.

And after all these years her kid, who is not stupid, was incapable of performing at grade level and now knows her parents intentionally screwed her:

The consequences became clear over time. Najya was one of the brightest students in her class, Hannah-Jones writes, but she still could not pass the state algebra exam. Years later, after struggling with algebra gaps that a tutor traced back to elementary school, Najya told her mother: “I never really got the education I wanted.”

Now here's the subtext that not a lot of people are discussing: How did that happen?

Well, it happened for many reasons.  Let's list a few that are admitted in this instance:

  • Her mother went through her math folder and found ungraded math assignments and most of the answers were wrong.  Najya was never told they were wrong nor given any capacity to resolve those errors because the teacher never graded them.  Yet she passed, repeatedly, through the grades and years despite never demonstrating mastery of the material.

  • The mandatory assessments set forth were likely never done in either math or reading.  Not just for Najya -- but everyone in the class.  Again, everyone was passed without demonstrating mastery of the material.

In other words where "A"s were handed out in many cases the real work was in fact "F"s, but nobody graded it so nobody knew.  The city pays out over $42,000 per student in said schools yet not a single accountable thing is done in return for that expense.  The teachers may or may not teach but factually they do not assess and therefore they hand out grades that were not earned.

The bottom line is that the teachers in said schools committed fraud on an unbroken and serial basis, said fraud was suborned by the administrators of the school who did not supervise and, upon detection, fire each and every such teacher and said fraud was further suborned by the State which did not supervise both teachers and administrators by either grossly negligently failing to do so or even worse, they deliberately demanded such fraud and then enforced it which, if true, is racketeering by each and every person so-involved.

Much worse is that this was not just "any school" -- it was one that screened students for admission.  Najya got into and was able to remain in said school despite being unable to perform at grade level.

How?

The only reasonable explanation is that the latter of the above paragraph is in fact the case; the entire system is a fraud-laced scam that pays for lack of performance, is set up to funnel money out of the residents pockets (via property and other taxes) along with federal money (that is, all of our pockets whether we live there or not) and it is all, on-balance and in the totality of the accounting, stolen by fraudulent artifice.

These are all felonies writ monstrously large and its not a new problem -- it is indeed one that neither side of the political aisle has done a thing about despite three+ decades of these practices.  I remind you that when I was running MCSNet the vast majority of "High School graduates" and a decent percentage of young adults with current University of Chicago student IDs who attempted to get a job at my company could not perform four-function arithmetic with a paper and pencil.  I know this because I forced all applicants to take such a test (along with one for basic English composition) before getting an interview and kept the results in a lateral file.  Yet nothing has been done about any of this.

Many people will try to make this about race.  It isn't.  It is about an "industry" that has over the last several decades turned into a grifting machine that while on paper may still "teach" in fact does not impose any discipline on those, whether in the teacher or administrator ranks, do not and in many cases forces teachers to operate in a classroom where wildly-disruptive kids are allowed to remain even when they act in a way that in any other business or private venue would be considered trespassing or even felony assault.

This has to stop.  Not be improved a little, all of it must stop -- right now.

The next generation currently in school has to be able to learn what is necessary to function in a civilized society.  Those who thwart that whether by handing out unearned grades and credentials or who force disruptive and even felony-committing persons into a classroom thus destroying the capacity of every other kid in there to learn must be permanently removed from said school by whatever means are necessary.  Those who advocate for and protect those practices must be charged with racketeering, tried, convicted and imprisoned with each and every penny they stole plus the 3x civil penalty for said unjust enrichment clawed back out of their hides personally, without exception.  Those "union officials" who are part of this must be included.

We spend nearly $1 trillion a year on K-12 education and simply on the population density most of it is spent in the cities because that's where the people are.  Most of that, given the above, is in fact stolen and all of that must stop NOW.  If you allow one more day of it to go on then you're an accessory before the fact and deserve the exact same punishment as those who are stealing it.

A civil society requires a reasonably-educated next generation.  There is no excuse -- not now, not in the 1990s when I ran into it as a CEO, and never at any time was there an excuse for deliberate failure in this regard and yet it has been the case in virtually every large city and many towns and counties large and small for decades on an ever-increasing basis.

IT MUST ALL END NOW because if it does not then when the runway we've had since the 1960s and 70s expires on installed infrastructure and economic capacity, and I remind you that entire generation is retiring and will die over the next couple of decades thus what we will have to replace them in the workforce won't be able to make change for a $20.

The consequence of that, if we allow it, will be the collapse of civil society. 

Were I this kid there would be an extreme price to pay for these acts, and it would be my parents who would pay it.

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2026-09-22 07:47 by Karl Denninger
in POTD , 52 references
 

 

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2026-09-22 07:00 by Karl Denninger
in Editorial , 53 references
[Comments enabled]  
Category thumbnail

Again....

Trump decided to ban Politico, CNN and MSNOW from internal access to the White House with dedicated desks.  That's a privilege, incidentally, that someone such as myself (or many other media outlets) do not have.  It is not a right nor do you have a right to be called on for a question.  No, the First Amendment doesn't go there; if it did then I could demand the right to ask a question and have access, and I cannot.

In "solidarity" other news organizations decided to stop offering pooled press coverage.  That's their right of course; nobody forces you to cover anything; the First Amendment not only gives you a right to speak it also gives you a right not to.  Fine.

Of course the impacted entities sued.  Everyone sues.  Go figure.  Suing is about as American as apple pie, I suppose, but the howling about "First Amendment rights" seems to miss in that every Administration (including the last one, along with Obama's) picks and chooses who gets questions and absent that said "access" is not constrained by being (or not) in the room at all; they can, of course, hear and see everything communicated over a TV camera just like everyone else does.  If there is no right to ask a question and get it answered, and there clearly is not as such has never been recognized by any court, anywhere, nor will it ever be as that's compelled speech in the first instance then we're arguing over a right to effectively live rent-free in a public space on a preferential basis -- which is frankly, a ludicrous argument equivalent to saying that being white or black, male or female confers such a preference.

It does not.

I expect the courts to tie themselves up in knots trying to get around the above facts, but they are facts.  Yes, "viewpoint discrimination" is illegal under the Constitution when it comes to public places and public acts.  But that's immaterial here because nobody is in fact preventing any of these outfits from publishing whatever they want, with any viewpoint they want.  What's being constrained is the capacity to ask questions which is clearly a privilege.  Nothing else is actually impacted at all.  Personal pride and preference is not a protected anything under our Constitution.

Am I surprised by any of this?  No.  And quite frankly if you want to raise a stink over press issues and public statements by public officials you might want to start with Trump's personal, private media outlet but of course if you attack that then you're really at the crux of the matter are you not, given that to attack that you must go at the premise of free speech itself!

I'm not impressed, in short, with any of this from either side.

But then again both the media and our government have long since lost any claim to be anything other than a propaganda outfit.  I remain blackballed on all the major outlets because, near as I can determine, I had the temerity during the 2008 blow-up to suggest that banks and other investment houses which were marketing securities as "good" while caught on their own internal recording systems and emails calling them "vomit" should be a liability-generating event and force said losses back on them or even lead to criminal liability for fraud and thus prison terms.  That, of course, is anathema to those buying advertisements with said funds and thus the ban stands even today coming up on two decades later.

Do I have a First Amendment lawsuit for that?  Nope.

But the same holds true the other way.

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