Note: I am currently travelling. Hence the more limited postings.
BLACK FRIDAY SALE! 
Back by popular demand!
Every service I subscribe to for this blog is currently offering Thanksgiving discounts.
I shall do the same. After 17 years, here’s the third Edge and Odds Thanksgiving sale. Take advantage of it, it may never come back!
Here it is:
Any new or existing subscriber, any new reader or non-reader, even anybody with zero interest in the blog, will get 50% off the regular price which, remarkably, has been stuck at zero for 17 years!
This offer will remain valid until next Thanksgiving and will be retroactive to January 3rd, 2009, the original launch date, even for those who found me later, or even never found me.
And for my numerous non-American readers, for fairness sake, they will be allowed to apply the very same discount, no discrimination, during any other holiday period of their choice, valid until any other holiday period of their choice, and retroactive as far back as they wish.
To take advantage of this offer, simply do nothing. The discount will be automatically applied to your account, even if you don’t have one.
Please allow a reasonable number of days, weeks or months. We have been short-staffed here since day one.
The problem is that I only hire on a profit-sharing scheme and that has yet to appeal to anybody since I still refuse to “embellish” the blog with ads and pop-ups.
BTW, in addition to PayPal and credit cards (on the sidebar), you can now use Zelle or Interac in Canada (free vs 4-5% costs for other methods). Please contact me at edgeandodds@gmail.com to get my Zelle/Interac info.
*****
My real Thanksgiving!
Sincere thanks are hereby given to all of you who have helped the blog with donations, large or small, occasional or regular.
I truly appreciate your marks of appreciation and altruistic generosity given that you are a minority helping all Edge and Odds readers.
Getting older, slower and sloppier, busy with 5 children and 11 grand-children, some in other biz with me (or rather me with them), and being short-staffed for reasons given or not above, I often cannot find the time/energy to send a thank you note. I apologize and I will try to improve on that even though I know I should not commit to that.
Rightly or wrongly, I always opt to work on the blog rather than use time to send thank you notes. This is a true one-man show here, and I simply do not have time to reach out to you personally.
But here they are: Robert, Todd, Joseph, Curt, Bill, Pat, Marc, Daniel, Jeff, David, John, Richard, Brian, Larry, Rick, Patrick, Joseph, Denis, John, Massimo, Jack, “nseix”, Nick, Rajiv, Constantin, Eric, Steven, just to name some of the recent donators, I hereby sincerely thank you all and salute your generosity.
To all others, free riders, thank you for reading me, a very nice compliment in itself.
Denis
Back to our regular program:
Retail Sales Rose Less Than Expected in September
Although we are just days away from Black Friday when holiday sales fully kick into gear, we are just now getting September retail sales data due to the government shutdown. The 0.2% headline increase for the month was underwhelming, and a dip in control group sales puts year-end spending on shaky footing. (…)
Overall retail sales increased just 0.2% and control group sales fell 0.1% and that came after downward revisions to the prior month’s sales. This series feeds into consumer spending numbers in the GDP report, so the weakness here sets up fourth quarter consumer spending on a somewhat weaker note.
Within holiday sales categories, which is a subset of retail excluding autos, gas and restaurants, the outcomes were mixed. Online shopping pulled back 0.7% after another impressive year of gains. Even after the soft print for September, e-commerce is still 6% above where it was in September 2024. (…)
Amazon’s two-day Prime event (now called Big Deal Days rather than Prime Day) was well telegraphed to consumers who may have put off some spending in September in favor of October. This is in line with a theme we highlighted previously: how the pull-forward of sales earlier into the year reflects the success of a mission on the part of retailers to do just that.
Other key holiday-shopping categories posted declines in September with sporting goods, clothing and department stores all down in the month. All other holiday categories were positive in the month, but our overall holiday measure was flat. With that data now in hand, we are keeping intact our forecast of an annual gain of between 3.5% and 4.0% annual growth in holiday sales, even if the lower end of the range is looking more likely at this moment.
Source: U.S. Department of Commerce and Wells Fargo Economics
Outside holiday-related spending, we were anticipating a gain in auto sales in September amid higher reported unit sales from Ward’s and the expiration of the federal electric vehicle tax credit at the end of the month, but auto & parts sales slipped 0.3%. Sales were still strong even accounting for the giveback, about 5% higher than a year-ago, and the modest decline follows three months of consecutive gains. Sales likely slowed further next month with unit sales declining the most in five months in October.
The 2% pop in sales at gasoline stations also says more about prices than it does about driving last month. While the average price of an unleaded gallon of gasoline moved lower over the course of September and slid further in October, registering the lowest price seen this year, motor fuel prices measured by the CPI rose by the most in two years. Since retail sales are reported nominally, this bump in prices lifted gasoline sales in September.
The latest data don’t materially alter our expectations for third quarter GDP growth. The data present modest downside to real goods spending, though we still expect real personal consumption expenditures to advance close to a 3% annualized rate, in part boosted by solid growth at the start of the quarter. That said, these data position for a slowdown in spending heading into year-end amid the continued moderation in the jobs market and compounding price gains weighing on households ability to spend.
Source: U.S. Department of Commerce, U.S. Department of Labor and Wells Fargo Economics
On a YoY basis, retail sales grew +4.3% in September’25 vs. +2.0% in September’24, below August’25’s +5.0%. This is how retailers and card issuers measure their own trends, YoY, which sometimes may be missing the sequential trends. The base will get tougher October to December.
Core retail sales in September’25 increased by +3.8% YoY, vs +4.4% in September’24, below +5.5% in August’25. Sales growth is decelerating while inflation seems to be accelerating.
Bank of America aggregated card data through October shows YoY spending up 1.5-2.0% …
… while wages are rising 2.5% YoY …
… and inflation in the 3.0% range.
This “resilient” consumer is in the middle of a tug-of-war between jobs/wages growth and inflation. He’s been winning so far but he’s getting fundamentally tired while inflation is the one proving resilient now.
Holiday sales better be good because the latest PMI report revealed that the US factory sector “reported a marked slowing in order book growth alongside an unprecedented buildup of unsold stock.”
Poor retail demand in Q4 would translate into heavy markdowns and slower production entering 2026.
Trump orders wide-ranging “Genesis Mission” to boost AI research
President Trump signed an executive order Monday aimed at boosting AI research and development, with an eye toward reducing Americans’ spiraling energy costs.
The Trump administration seeks to ensure that government stays out of the way on AI regulation while actively supporting private-sector innovation.
At the same time, administration officials are eager to address consumer complaints that are mounting over energy bills, job displacement and other economic worries.
The “Genesis Mission” seeks to encourage government information sharing with industry, academia and other scientific institutions.
- Under the order, the Department of Energy will build a platform with AI capabilities for scientists and engineers to use in their work.
- It would also create a portfolio of scientific and engineering challenges around energy and national security for Genesis Mission participants to pursue.
- Other departments and agencies will be able to tackle their own challenges — such as around drug discovery — through the executive order.
Though they didn’t give any cost estimates, administration officials portrayed the effort as the largest marshaling of federal scientific resources since the Apollo space program in the 1960s.
- “The Genesis Mission will use AI to automate experiment, design, [and] accelerate simulations and generate predictive models for everything from protein folding to fusion plasma dynamics,” Michael Kratsios, who heads the White House Office of Science and Technology Policy, told reporters. (…)
Energy Secretary Chris Wright, who touted his agency’s national labs’ role in the project, argued that AI can help bring down costs.
- “The ultimate goal of this is to make the lives better for American citizens,” including creating job opportunities, he said at a press briefing.
- “In the energy space, it’s to bring more energy on, make our electricity grid more efficient and reverse price rises that have infuriated American citizens.”
The Trump administration expects more computing partnerships to come out of this project, noting that it has already announced agreements with giants including Nvidia, Dell and others.
White House officials contend that the Genesis Mission will usher in major scientific advances. “This will shorten discovery timelines from years to days or even hours,” enabling scientists to test hypotheses and make currently unreachable breakthroughs, Kratsios said.
- 4 in 10 Republicans say Trump portrays prices and inflation as better than they really are. (Axios)
China’s Markets Rattled as Vanke Revives Property Crisis Fears
When an emblem of China’s unprecedented property crisis lurches further toward the brink, it’s hard for investors across asset classes in the world’s second-biggest economy to look away.
At the end of a week in which China Vanke Co. — one of the last major developers to have so far avoided defaulting — shocked creditors by proposing for the first time to delay paying a local bond, angst is centering on property bonds and shares. The impact also fed into a run-up in yields in the local credit market.
Chinese developers’ junk dollar bonds have fallen on average as much as 5 cents since the Vanke surprise late Wednesday, even as the declines tapered off Friday, traders said. Average yields on three-year AAA rated yuan corporate bonds have jumped about 6 basis points this week. That would be the biggest such increase in two months if sustained, according to a Chinabond index. (…)
AI CORNER
We knew this would eventually happen. It is happening now (my emphasis):
As AI Data Centers Face Delays, the Blame Game Begins (The Information)
The mood is shifting in AI data center circles. The euphoria of record-setting, multi-gigawatt deals has given way to finger pointing as deadlines to get AI servers online slip or get dangerously close to falling behind.
For months, data center builders have told me many of the gigawatt-size AI server facilities are running behind schedule because of the complexities of putting together the biggest clusters of servers ever attempted.
So far, most projects are not catastrophically late—but they’re late enough that people are understandably asking who is accountable when a multibillion-dollar project misses a deadline by a few weeks or months.
After all, the employees at the AI developers that spend the most money on AI chips—OpenAI, Google, Meta, Anthropic and xAI, which we’ll call the Fab Five—are in a fierce race for computing capacity and have demanding CEOs with little time (or idle graphics processing units) to waste.
A prime example of the blame game involves CoreWeave, an AI cloud provider whose customers include Microsoft and OpenAI. CoreWeave CEO Mike Intrator warned investors earlier this month that the current quarter’s revenue would take a $100 million to $200 million hit because of “temporary delays related to a third-party data center developer who is behind schedule.”
Intrator didn’t name the developer, but speculation has been swirling. Many people I know in the data center field immediately assumed the data center developer in question was Core Scientific, a data center developer that is one of CoreWeave’s major partners.
That guess makes sense. Eight months ago, Microsoft pulled back on some of its CoreWeave contracts after delays involving a particular data center. We heard from people involved in those talks that the source of Microsoft’s ire was a CoreWeave data center in Denton, Texas, which Core Scientific is responsible for powering.
In February, Core Scientific said in an earnings conference call that it was experiencing delays that would push the completion of a data center project from 2025 to early 2026. It seems possible it was referring to the Denton facility.
In any case, in March, OpenAI said it had stepped in and signed a $12 billion, five-year cloud contract with CoreWeave to rent AI servers at that facility, presumably hoping the problems would be resolved quickly.
CoreWeave hasn’t officially blamed Core Scientific for the revenue hit. (…
[Core Scientific CEO Adam Sullivan] said a lot of AI data center timelines “aren’t realistic” unless developers have already secured equipment that must be ordered far in advance, such as generators, and have “lined up experienced contractors and locked in the labor these projects require.”
He added: “As deadlines approach, the gap between talk and execution will become increasingly clear.” (…)
Earlier this year, Oracle executives raised their voices at contractors in Abilene, Texas, as pressure mounted on the company to hand over working servers to its customer, OpenAI.
The executives had good reason to be frustrated. We’ve heard cloud providers’ contracts with customers include provisions in which customers can pay less if the provider misses a timeline or if the servers aren’t functioning properly, reducing their uptime. For GPU cloud providers with already thin gross profit margins on renting out servers, these problems can materially alter their financial results.
The race to get Nvidia GPU clusters online continues to be a challenge for some firms that promised speedy timelines. And it’s likely that as power becomes harder to secure, which could also cause delays, we might see customers hedging their bets by working with multiple data center providers.
Several developers told me this week GPU shipments are outpacing construction timelines so severely that some firms are storing racks of idle GPUs in warehouses, waiting to be told where to send them.
Even Meta acknowledged this tension on its earnings call in late October. Chief Financial Officer Susan Li said the company is now “staging data center sites,” or essentially getting them ready with everything but the GPU racks, so Meta can “spring up capacity quickly in future years as we need it.”
In other words, even large data center developers like Meta are building buffers to prepare for capacity spikes.
One thing is clear: We’re entering an era where the physical limits of labor, equipment, utilities and contractor bandwidth are colliding with customer demand. It’s going to be a bumpy ride.
Totally related:
OpenAI partners amass $100bn debt pile to fund its ambitions Cloud companies and developers rely on lossmaking start-up to repay huge loans
OpenAI’s data centre partners are on course to amass almost $100bn in borrowing tied to the lossmaking start-up, as the ChatGPT maker benefits from a debt-fuelled spending spree without taking on financial risks itself. SoftBank, Oracle and CoreWeave have borrowed at least $30bn to invest in the start-up or help build its data centres, according to FT analysis.
Investment group Blue Owl Capital and computing infrastructure companies such as Crusoe also rely on deals with OpenAI to service about $28bn in loans.
group of banks is in talks to lend another $38bn for Oracle and data centre builder Vantage to fund further sites for OpenAI, according to people familiar with the matter. The deal is expected to be finalised in the coming weeks.
“That’s been kind of the strategy,” said a senior OpenAI executive. “How does [OpenAI] leverage other people’s balance sheets?”
The scale of the loans that depend on OpenAI will add to scrutiny of the $1.4tn of deals it has signed this year to procure computing power from chipmakers and data centre companies over the next eight years.
These commitments far exceed the start-up’s expected annualised revenue of $20bn this year. The start-up has little debt on its own balance sheet, according to people close to the company. OpenAI has a $4bn credit facility with several US banks, which it secured last year but has yet to draw. (…)
The $100bn of bonds, bank loans and private credit deals tied to OpenAI are equivalent to the net debt directly held by the six largest corporate borrowers in the world — including carmakers Volkswagen and Toyota and telecoms groups AT&T and Comcast — according to a 2024 report by asset manager Janus Henderson.
Debts linked to OpenAI may already be significantly higher. Many of the start-up’s partners, including SoftBank and CoreWeave, have borrowed greater sums this year that have not been explicitly tied to the start-up. (…)
Analysts at KeyBanc Capital Markets predict that Larry Ellison’s tech group will have to borrow $100bn over the next four years to deliver its OpenAI contracts. (…)
Condemned to succeed…
Private Chinese company rolls out Mach 7 hypersonic missile at nearly 90% lower cost
A private Chinese aerospace company has entered the global defence spotlight after announcing it has begun mass production of a low-cost, high-performance hypersonic missile, a development that signals a major shift in military technology and defense manufacturing.
Beijing-based Lingkong Tianxing Technology released a video on Tuesday showcasing the YKJ-1000 missile in flight, including real target impact footage from a desert testing range.
The company said the weapon is already in mass production at a cost believed to be a fraction of traditional defence systems.
A company representative said the missile costs “just one-tenth the cost of traditional missiles,” according to reporting by the South China Morning Post (SCMP)
The launcher resembles a standard shipping container, allowing mobility and concealment on land or at sea.
In the video, the container-based truck deployed stabiliser legs before launch. Animated footage showed the missile navigating autonomously, adjusting trajectory mid-flight, and evading defences. The real-world clip later showed a steep terminal dive and a confirmed strike.
Another sequence depicted eight missiles flying toward Japan in a coordinated formation. The animation highlighted multiple target zones within the weapon’s reach. (…)
The company argued that the production model reflects a wider shift in global defence systems from “long-cycle, high-cost and highly specialised” programs to “low-cost, large-scale and autonomously intelligent” models.
With the United States still advancing multi-billion-dollar hypersonic programs led by major defence firms, China’s ability to industrialise hypersonic weapons through private companies suggests a shifting technological and strategic balance.
Lingkong Tianxing said its approach relies on automotive-grade chips, civilian materials, and existing mass-manufacturing supply chains.
“By adopting readily available parts… and utilising civilian construction materials, we have managed to cut costs to just one-tenth of those of conventional programmes,” the representative said.
The company says it now has an independent ecosystem covering propulsion, aerodynamics, control systems, and thermal protection. It also stated it holds relevant Chinese military certifications.
Beyond the baseline missile, the company plans to develop an “intelligent version” that integrates artificial intelligence and swarm coordination.
Lingkong Tianxing said it aims to transition from R&D delivery to full-scale missile production supported by an AI-driven platform.
It also highlighted civilian ambitions, including a Mach-5 capable aircraft designed for global travel “within one hour,” with a first test planned for 2027 and full vehicle trials by 2030.
DeepSeek came in 90% below OpenAi costs but that was software. This is physical stuff at 10% of Western costs. Amazing but also scary if you are in this biz… and in arms competition with China …
Trump Demands ‘Reverse Migration’ in Push for Sweeping Crackdown
President Donald Trump called for “reverse migration” in the US as he outlined a series of potential measures to crack down on immigration, including halting admissions from unspecified developing nations and revoking citizenship from some naturalized migrants.
In a pair of Truth Social posts late Thursday that disparaged many US immigrants, Trump said he would “permanently pause migration from all Third World Countries” and “denaturalize migrants who undermine domestic tranquility.”
He added that he would terminate millions of admissions under his predecessor Joe Biden and “remove anyone who is not a net asset to the United States, or is incapable of loving our Country.” Trump also said he would end all federal benefits for non-citizens.
“These goals will be pursued with the aim of achieving a major reduction in illegal and disruptive populations, including those admitted through an unauthorized and illegal Autopen approval process,” Trump said, using a reference to the Biden administration. “Only REVERSE MIGRATION can fully cure this situation.”
Trump offered no details on how he would implement these policies or what he considers a “third world” country, an ill-defined and often offensive term for developing nations. Congress for years has failed to pass major immigration reforms, and courts have blocked some of his previous executive orders limiting immigration. (…)
FYI
Deere Wednesday provided its first forecast for 2026, saying it expects its business selling to large-scale farms in the U.S. and Canada to fall 15%–20%. Row-crop farmers (growing corn, soybeans and wheat) continue to face headwinds, pressuring their short-term liquidity and causing them to continue to rely on older, used equipment, the company told investors on a call.
Tech Titans Amass Multimillion-Dollar War Chests to Fight AI Regulation Some are battling state AI laws and threatening to punish candidates who oppose rapid deployment of the technology
Billionaires, tech titans and their opponents are amassing multimillion-dollar war chests for a chaotic, bruising battle over AI regulation ahead of the 2026 midterm elections.
Opponents of state-level regulation fear a patchwork of laws will slow America’s progress in the artificial-intelligence arms race with China. They argue that the U.S. must spend trillions of dollars and build quickly in the coming years to maintain supremacy.
Donors have already committed well above $100 million to political-action committees involved in that fight, which has been supercharged by the wealth of some individuals and companies. Included are the venture-capital firm Andreessen Horowitz and an OpenAI co-founder, Greg Brockman. Meta Platforms is also funding several political efforts.
Supporters of more-stringent AI regulations launched their own effort this week, aiming to raise at least $50 million to help candidates who support more AI regulation. (…)
Lyndon Johnson lives again…How far will that go?