Aggregator

“I don’t know if I’ve seen that in a playoff game," Knicks Head Coach Mike Brown said afterwards.

An anonymous bettor at BetMGM had $775,000 on the Knicks to cover five different wagers.

A big, beautiful property on Palms Boulevard just hit the market -- but there's one other thing that really makes it stand out.

The AI Economy, Part 1: Looking Beyond The Facade

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

The US economy’s curb appeal looks great. Consider that gasoline prices are nearly $5, crude oil is trading above $100, consumer sentiment is at historically low levels, and mortgage and other interest rates have remained relatively high. Yet, despite the worrisome headwinds, the US consumer-driven economy continues to expand. However, as with a house’s curb appeal, it’s not just the headline data that defines an economy. Equally important is its supporting structure. Let’s open the door to our economy to better appreciate how AI is currently impacting it and how it may change in the future.  

The question we explore here is whether the AI investment boom is genuinely broadening this country’s economic footing or weakening the labor force, the foundation of the economy.

We separate the article into two parts. Part one is the optimistic case: an AI-induced, productivity-led economic boom in which the benefits spread quickly to society.  Part Two will address a more bearish outlook: the possibility of a large gap in the distribution of AI’s productivity benefits, accruing to corporations much more quickly than to employees.  

AI Spending Drives GDP

The amount of capital flowing into AI infrastructure development and thus GDP is enormous. As shown in the graph below, the capital expenditures (Capex) of just four companies, Amazon, Google, Microsoft, and Meta, are now over $700 billion annually, roughly 7x what they were five years ago. Based on the 2026 Capex expectations, a third of GDP growth could come from the four companies.

The AI buildout extends well beyond the four balance sheets noted above. Every dollar of Capex spent by the large hyperscalers creates demand across a wide supply chain. For example, construction firms are building data center campuses the size of small cities, utility companies are scrambling to add generation capacity, domestic semiconductor producers are ramping up output, and fiber optic and networking suppliers have multi-year order backlogs. The electrical grid is facing its first sustained demand growth in two decades, driven almost entirely by data center power requirements, which are projected to more than double by 2030.

Historical Context

The scale of today’s AI buildout has historical precedent. For instance, the railroad expansion of the mid-1800s involved more extreme infrastructure investment, with railway Capex estimated to have consumed as much as 10-20% of GDP at its peak. A more recent and appropriate comparison is the telecom buildout of the late 1990s, when Capex peaked at roughly 1.0-1.2% of US GDP. Today’s AI infrastructure spending by just the four companies has recently surpassed that telecom figure.

But unlike the debt-fueled telecom boom, today’s AI spending has thus far been funded almost entirely by the cash and cash flows of extremely profitable corporations. While the composition of funding is shifting from cash and free cash flow to debt, the companies noted above have debt-to-equity ratios well below the S&P 500 average and significantly lower than during the telecom buildout. Moreover, earnings from other highly profitable business lines will continue to provide them with substantial cash for investment.

The Consumer Is Resilient But Running Thin

While AI spending is tremendous and boosting the economy, some argue that it is masking weaknesses in consumer spending, which is the most important contributor to economic growth.  The graph below shows that consumer spending accounts for about 67% of GDP, as it has since 2001. There has been no discernible change over the last few years since the advent of AI.

While the recent contribution of consumer spending has not changed meaningfully, its sustainability is a key factor driving future growth. While consumption is holding, there are signs that the means to spend are deteriorating. For instance, the personal savings rate has fallen to near its lowest level since 1960, as shown below. This suggests that a growing share of personal consumption is being funded by drawing down savings rather than by current earnings.

Such behavior is not unusual during periods of strong employment, as consumers spend more when they are confident about their job and wage prospects. That said, a low savings rate is a yellow flag, but it has coexisted with healthy economic expansions before.

The more important gauge of future consumption is wages, which leads us to the labor market

A Churning Labor Market

AI will swallow up jobs, some pessimists say. Thus far, that is not the case. For instance, in 2025, nearly 55,000 of 1.17 million layoffs were directly attributed to AI, according to Challenger, Gray & Christmas. Other estimates peg the number higher at 200,000–300,000 positions in 2025. While that estimate is more concerning, it is only about 0.15–0.20% of total nonfarm employment.

Looking forward, the outlook gets murky. Goldman Sachs has a dire outlook with 300 million jobs globally at risk. But that only tells half the story. The World Economic Forum (WEF) estimates that AI will create 170 million jobs globally.

There is no doubt that AI will have significant impacts on the economy, labor market, and many individuals. Prior innovations are proof. To wit, about two-thirds of US jobs in the 1940s no longer exist. The replacement jobs were enabled by new innovations.

While the future remains uncertain, the past relationship between job growth, wages, and productivity is encouraging. As we share below, PwC claims “wages are rising 2x faster in industries most vs least exposed to AI.”

Productivity Gains Will Spread

Economic growth and wage growth are a direct function of productivity. Productivity measures the amount of leverage an economy can generate from its two primary inputs, labor and capital. Without productivity, an economy is solely reliant on two limited inputs. Thus, without productivity growth, economic growth is unlikely over the long run.

Therefore, it’s critical to discuss how much productivity AI will generate and how it will be distributed.  The first part, how much, is nearly impossible to assess today. That said, PwC estimates that productivity growth has nearly quadrupled in AI-exposed industries since 2022. Further:

Is AI really the cause of this surge in productivity? We can’t prove causation with certainty, but we do know that revenue growth in AI-exposed industries accelerated sharply in 2022, the year that the launch of ChatGPT 3.5 awakened the world to AI’s power. Since then, as companies have raced to leverage this technology, the value created in industries best positioned to use AI has skyrocketed. In the space of two years, industries most able to use AI have changed from productivity laggards to leaders, suggesting that investments in AI are paying off. AI’s promise is proving to be real, and we are only in the early days of AI adoption.  

Regarding the distribution of productivity, some pessimists argue that AI’s productivity gains are flowing overwhelmingly to high-income knowledge workers. While that is currently true, that has also been the case with every major technology wave in its early phase. Factory automation initially benefited capital owners. Personal computers initially benefited white-collar workers. The internet initially benefited the educated and connected. But over time, prices fall, adoption rates grow, and the benefits spread across the entire workforce.

History’s verdict is consistent: the benefits start narrow and ultimately spread wide across the economy. As we share in the graphic below, as a result of the US being a global leader in innovation, our poorest states, Mississippi, West Virginia, and Arkansas, have a similar or higher GDP per capita than other large nations.

Summary

While still early in the AI revolution, the economic data points to genuine economic momentum. Whether AI productivity benefits can become more broadly based across the economy is the question that Part Two of this article addresses.

Before we present the other side, we will leave you with a PwC table that addresses concerns about productivity and the labor market.

Tyler Durden Wed, 05/20/2026 - 11:25

Social media will be a porn hub no longer.

In an era of soaring grocery prices, his no-frills approach is striking a nerve.

James Murdoch’s Lupa Systems said Wednesday it has inked a deal to buy New York magazine, Vox Media’s podcast network and news site Vox.com. Terms of the sale, which covers about half of Vox Media, were not disclosed. People familiar with the deal said it came to more than $300 million, according to the New...

Last month, Kendra's father revealed that he and his family lost their most recent housing situation and employment due to Joseph's arrest.

Last month, Kendra's father revealed that he and his family lost their most recent housing situation and employment due to Joseph's arrest.

An out-of-control fire truck barreled into several parked cars in Sunland on Tuesday evening before sliding to a stop on its side in front of an H&R Block.

"No, I think because shih tzus decide when they want to activate their brains," Ripa insisted.

The fashion-forward line starts at just $46.

The fashion-forward line starts at just $46.

It’s been a strange season for the Vegas Golden Knights.

The Testaments star Lucy Halliday was meant to play Daisy.

Tonight on "Conspiracies & Coverups," join host and former CIA covert intelligence officer Andrew Bustamante as he investigates the history and efficacy of the US' War on Drugs, which has been waged around the world for decades with no end in sight.

Judge Blocks ICE Agents From Conducting Arrests At Immigration Courts In New York

Authored by Aldgra Fredly via The Epoch Times (emphasis ours),

A federal judge issued a ruling on May 18 barring federal agents from conducting arrests at three Manhattan immigration courts, except in limited circumstances.

A federal officer stands by in a hallway at New York Federal Plaza Immigration Court inside the Jacob K. Javitz Federal Building in New York on October 1, 2025. Charly Triballeau / AFP via Getty Images

The ruling by U.S. District Judge P. Kevin Castel stemmed from a lawsuit filed by the New York Civil Liberties Union and other groups on behalf of The Door and African Communities Together, which sought to challenge U.S. Immigration and Customs Enforcement (ICE) policies that allow federal agents to arrest people in immigration courts.

Castel had initially declined to block the policy last September, but the plaintiffs later filed a motion in response to a March letter in which the government admitted that the 2025 ICE guidance—which it had relied on to justify arrests at immigration courts following the lawsuit—“does not and has never applied” to civil immigration enforcement actions at immigration courts.

In a 15-page ruling on May 18, Castel granted the plaintiffs’ request to stay the ICE policy, barring federal agents from arresting people at three Manhattan immigration courts—26 Federal Plaza, 201 Varick Street, and 290 Broadway—except under “certain enumerated circumstances.”

“There is a strong governmental interest in enforcing immigration laws. There is also a serious interest of The Door to be free to assist its members in defending removal proceedings brought against them and pursuing defensive asylum applications before an [immigration judge] without fear of arrest,” Castel stated.

The judge added that ICE agents are only allowed to make arrests at immigration courts when there are “serious threats of physical harm to public safety.”

Castel also said the government’s concession that the 2025 policies did not apply to immigration courts warranted reexamining his previous ruling “to correct a clear error and prevent a manifest injustice.”

In a March 24 letter addressed to Castel, government lawyers expressed regret over a “material mistaken statement of fact” presented to the court and said it was caused by “agency attorney error.”

“This error, however, was not caused by a lack of diligence and care by the undersigned attorneys. The undersigned were specifically informed by ICE that the 2025 ICE Guidance applied to immigration courthouse arrests,” the letter states.

Amy Belsher, director of Immigrants’ Rights Litigation at the New York Civil Liberties Union, called the latest ruling “an enormous win for noncitizen New Yorkers seeking to safely attend their immigration court proceedings.”

“We look forward to a final ruling in the case that sets aside these cruel, pointless policies once and for all,” Belsher said in a May 18 statement.

The Epoch Times reached out to the U.S. Department of Homeland Security, which oversees ICE, for comment, but did not receive a response by publication time.

Tyler Durden Wed, 05/20/2026 - 10:45

Trump called Talarico, who recently became the subject of viral scorn for ordering a meatless taco, "a candidate that believes in six genders."

Oil Prices Extend Decline After The Largest Crude Inventory Drawdown In History, Cushing 'Tank Bottoms' Loom

Oil futures are down bigly this morning following comments from President Trump that the war in Iran would be ended "very quickly," but investors remained uncertain about the potential for de-escalation.

"We're going to end that war very quickly. They want to make a deal so badly, they're tired of - this should have happened for 47 years," Trump told a group of Congress members at the White House's annual congressional picnic on Tuesday.

"Somebody should have done something about it. And it's going to happen, and it's going to happen fast. And you're going to see oil prices plummet," the president added.

Oil's declines were also reportedly driven by this optimism about a final deal draft peace agreement:

On Tuesday, two Chinese tankers carrying crude oil traversed the Strait of Hormuz.

Another, a South Korean vessel, was passing through it, according to a Reuters report. Jim Reid, of Deutsche Bank, noted that this marks "one of the busiest days since the closure."

However, Iran's Revolutionary Guards also warned on Wednesday that any renewed strikes on Iran could expand the war beyond the region.

The IRGC also said it had not used all its capacities against the U.S. and Israel, while warning that their "devastating blows will crush" the adversaries, the IRGC said in a statement on its Sepah News website.

For now, all eyes are on the official inventory and supply data (and SPR) after yuuuge draws reported by API overnight...

API

• Crude -9.1mm (-3.4mm exp)

• Cushing -1.4mm

• Gasoline -5.8mm

• Distillates -1.0mm

DOE

• Crude -7.863mm (-6.0mm exp)

• Cushing -1.604mm

• Gasoline -1.548mm

• Distillates +372k

Crude stocks tumbled last week (biggest draw since Feb 13th) for the fourth week in a row. Gsoline inventories saw their 14th weekly drawdown in a row whil distillates saw another small build...

Source: Bloomberg

Strategic Petroleum Reserve drawdowns continue to accelerate with 9.92mm barrels/day - a record - drained last week. That means over 10% of the SPR has been drained in the last few weeks...

Source: Bloomberg

Total US crude stocks including the SPR are at the lowest level since June 2025 with this week seeing the largest SPR + Commercial stock drawdown in history...

Gasoline stockpiles continued their steady decline last week, falling another 1.5 million barrels. Stocks are still at the lowest seasonal levels since 2014.

Cushing stocks are rapidly approaching 'tank bottoms' once again...

US Crude production dipped very modestly last week...

Source: Bloomberg

WTI (July 2026) suddenly plunged below $100 just ahead of the official data (on peace deal optimism) and extended the losses after the big draw...

Finally, though the closure of the Strait has already pushed oil prices up by more than half, analytics firm Woods Mackenzie said if the war is extended until the end of the year, oil prices could rise as high as US$200 per barrel, though a quick settlement could lower Brent prices to US$80 by year end.

"The Strait of Hormuz is the most critical chokepoint in global energy markets, and a prolonged closure would become far more than an energy crisis," said Peter Martin, head of economics at Wood Mackenzie.

"The longer disruption persists, the greater the impact on energy prices, industrial activity, trade flows and global economic growth."

The market is awaiting the start of the high-demand U.S. summer driving season, which begins with this weekend's Memorial Day holiday.

It appears that American drivers will face the highest gas prices ever for Memorial Day...

...not great for Midterms/Approval ratings.

Tyler Durden Wed, 05/20/2026 - 10:38

The "Gossip Girl" actress celebrated the luxury fashion house's Baguette® 26424 Re-Edition at its Madison Avenue flagship in NYC.