THE CHINA SYNDROME: How China’s economic pain will help US Fed rate cuts.

Asia’s largest economy, not long ago considered a contender to supplant the US, is having a rough patch. Growth has struggled after the pandemic,foreign investment is waning, and real estate companies are failing. But the most pernicious development has been deflation. When consumer prices posted a small decline in July, the figure was seen as a blip. It hasn’t really let up and January showed the biggest drop since 2009.

The risk is that traders are so focused on Federal Reserve Chair Jerome Powell that they dismiss what Pan Gongsheng, his counterpart in Beijing, is contending with. That would be a mistake. The longer China refrains from meaningful efforts to arrest deflation, the greater the risk it becomes entrenched — and all the tougher to escape. Citigroup Inc. economists were prescient when they warned in May of a “confidence trap.”

The opening of China’s economy, its entrance into the global labor pool and the World Trade Organization are widely considered to be seminal events.

They were critical to the low-inflation regime that prevailed pretty much everywhere in the decades prior to Covid. China may once again prove pivotal — this time in eclipse. It will help drive inflation down from levels authorities around the world remain less than enthusiastic about, despite a pronounced retreat since mid-2022.

China exported deflation for 20 years in the form of ever-expanding exports of cheap consumer goods. Now it might be coming again in a totally different form.

KRUISER’S MORNING BRIEFING: Could the ‘Experts’ Get Any More Disgusting?

Chris Queen is filing in for Kruiser today.

ARTIFICIAL INTELLIGENCE, REAL CRAZY: ChatGPT ‘off the rails’ as AI starts ‘threatening users’ who worry chatbot is ‘sentient.’

Some users were left wondering whether the Chatbot had gained some sort of sentience as it warned the “AI is in the room” with its users. “Scary” lines of dialogue from the bot were found within streams of nonsense.

A flurry of announcements from OpenAI soon followed as they confirmed maintenance work was underway on the tech tool. Teams as of today are “continuing to monitor the situation”.

Screenshots of the out-there robot later circulated on Twitter/X, with one interaction showing the bot put together “the stages of ether in music time”, before repeating “Happy listening!” dozens of ftimes.

Another saw the bot flicker between Spanish and English responses as it promised to speak “in a more grounded lingua”, before slipping into complete Spanish. It kicked back into English to suggest a “grape-turn-tooth over a mind-ocean jello type?”

Indeed.

NOTHING’S SHOCKING: A Florida Republican Congresswoman Just Made a Shocking Statement About UFOs. “During the program, she stated she believes that the unidentified flying objects described in whistleblower testimony were not made by humankind. And she’s not the first person within the government to make such a statement, which lends some credibility to the idea that maybe, just maybe, extraterrestrials exist.”

UNEXPECTEDLY: Democrats pushed climate action. Then utility bills skyrocketed.

There is intensifying political pressure on state lawmakers to do something about utility bills that have shot up by as much as 127 percent over the last decade. Climate spending — from wildfire prevention to building out transmission capacity and paying for renewables — is partly to blame.

“Californians are fed up,” said Democratic state Assemblymember Marc Berman at a recent news conference in Sacramento. “My constituents are pissed off. I know because they told me over and over again at every community coffee that I had in the fall and in the winter. Their rates keep going up.”

Lawmakers there and in other Democratic states with nation-leading climate objectives — like New York and Massachusetts — are scrambling to make their transitions from fossil fuels affordable before they face an all-out ratepayer revolt. The problem is more pressing in an election year when Republicans say Democrats don’t pay enough attention to Californians’ ability to afford the high costs of daily life.

Gooder and harder, California.

YOU WOULDN’T BELIEVE THE THINGS I’M WILLING TO BELIEVE THESE DAYS: You’re Not Going to Believe the Reason the Alleged Super Bowl Shooter Gave for Opening Fire.

MEANWHILE, OVER AT VODKAPUNDIT [VIP]: This Is Why We Can’t Enjoy a Burger and Fries “As far as I’m concerned, the affordability of food is the best or at least the first measure of the economic health of a nation.”

THEY HAVEN’T BANNED THEM FOR RESIDENTS YET… YET: Colorado bans state agency use of gas-powered lawn equipment.

MEANWHILE, OVER AT VODKAPUNDIT: Who Had ‘Scientists Suggest We Rethink Cannibalism’ on Their 2024 Bingo Card?

ANOTHER SELF-INFLICTED WOUND: Guess Who’s Closing Stores in Chicago Now.

HMM: ‘AI godfather’, others urge more deepfake regulation in open letter.

The letter, titled “Disrupting the Deepfake Supply Chain,” makes recommendations on how to regulate deepfakes, including full criminalization of deepfake child pornography, criminal penalties for any individual knowingly creating or facilitating the spread of harmful deepfakes and requiring AI companies to prevent their products from creating harmful deepfakes.

As of Wednesday morning, over 400 individuals from various industries including academia, entertainment and politics had signed the letter.

Signatories included Steven Pinker, a Harvard psychology professor, Joy Buolamwini, founder of the Algorithmic Justice League, two former Estonian presidents, researchers at Google GOOGL.O DeepMind and a researcher from OpenAI.

Ensuring AI systems do not harm society has been a priority for regulators since Microsoft-backed MSFT.O OpenAI unveiled ChatGPT in late 2022, which wowed users by engaging them in human-like conversation and performing other tasks.

There have been multiple warnings from prominent individuals about AI risks, notably a letter signed by Elon Musk last year that called for a six-month pause in developing systems more powerful than OpenAI’s GPT-4 AI model.

The quandary is that the people who would do the regulating have blown any trust they might have once had that they would regulate fairly.

IT WAS NEVER A SOLID THEORY, BARELY A HYPOTHESIS: The Theory That Mail-in Voting Is Secure Just Died a Horrible Death.

THEY’RE LUCKING TO BE GROWING AT ALL, GIVEN BERLIN’S DEINDUSTRIALIZATION EFFORTS: Germany slashes 2024 growth forecast to just 0.2% as economy in ‘tricky waters,’ minister says.

DISPATCHES FROM WEIMAR AMERICA: Women’s Basketball Game Ends With Forfeit After Transgender Player Injures Three Girls.

MOSCOW ON THE HUDSON: Letitia James says she’s prepared to seize Trump’s buildings if he can’t pay his $354M civil fraud fine.

CELEBRATE DIVERSITY: North Las Vegas Mayor Celebrates Black Businesses. There’s Just One (Huge) Problem.

EARLY WARNING/THE NEW SPACE RACE: AI company developing software to detect hypersonic missiles from space. “Hypersonic missiles travel at speeds of at least Mach 5, which is five times the speed of sound, posing a significant challenge for current defense systems. The Space Development Agency (SDA), an organization within the U.S. Space Force, is building a network of satellites in low Earth orbit with the goal to provide global indications, warning, tracking, and targeting of advanced missile threats.”

NARRATOR: “IT WAS NOT A COINCIDENCE.” Coincidence? Ford’s Adventure in DEI Coincided With Its Disastrous Drop in Quality.

THAT’S A BIG HAUL: Biden Campaign Reports $42 Million in January Fundraising.

President Biden’s re-election effort on Tuesday said that it raised more than $42 million last month, continuing a strong fundraising streak as he and former President Donald Trump are increasingly likely to face each other in the general election.

Biden, 81, has faced persistent questions about his age and increased anxieties among Democrats who worry that he is trailing in many national and battleground-state polls. But his fundraising has been strong. His campaign said it and related entities had about $130 million in the bank by the end of January, a month during which Trump fended off several GOP challengers for the Republican nomination. Trump handily won party contests in Iowa, New Hampshire and Nevada, while former South Carolina Gov. Nikki Haley remains his sole challenger ahead of that state’s GOP primary on Saturday.

The Biden numbers include results from his campaign committee, the Democratic National Committee and Biden joint fundraising committees, the campaign said. The $130 million in cash is up from $117 million it reported at the end of 2023. Trump’s campaign and outside political groups reported $65 million in cash at the end of last year.

Seriously, don’t get cocky.

KRUISER’S MORNING BRIEFING: It’s Getting Rougher for Biden’s Handlers to Make Him Appear Lifelike. “If it was Adderall that they were pumping him full of before, he’s obviously developed a tolerance. They might be thinking about switching to high quality, uncut cocaine. Rumor has it that there is someone in the First Family with connections for that sort of thing.”

WE MUST NOT HAVE THROWN ENOUGH TAX DOLLARS AT EVS: Lithium and nickel producers begin mass layoffs and pause multi-billion-dollar projects as US says no to electric car push.

Americans were sold the promise that electric vehicles would bring production companies and an influx of jobs to small towns nationwide as part of a modern day goldrush.

However, as interest in EVs has slipped, lithium and nickel facilities – metals used in lithium-ion batteries for electric vehicles – are taking cost-cutting measures including mass layoffs and suspending operations.

The demand for electric vehicles surged in 2022, rising by 76 percent in April of that year, but by the end of 2023, the number of vehicles sold dropped to just 50 percent.

Car buyers are still reluctant to trade in their gas-guzzling vehicle for an EV over the high price tag and concerns about their ability to easily charge the vehicle.

Gas-guzzling? Does the author of this piece even know what that means and how it doesn’t apply to today’s gas cars?

Regardless, sometimes the dogs just don’t like the dog food, even with incentives and mandates.

HIS FOREIGN POLICY IS AS CONFUSED AS HE IS: FYI, Biden Doesn’t Really Want Ukraine to Win Either.

DON’T GET COCKY: Biden should lose reelection, odds ‘increasingly bleak.’ “Biden’s chances may rest on him experiencing a comeback similar to what Obama achieved in 2012 when Biden was serving as vice president. That year, national mood indicators and Obama’s job approval rating significantly improved during the campaign, and the president was elected to a second term. Unlike Obama, though, Biden also faces questions about his age and ability to carry out his duties in a second term. Biden is also starting at a lower point in job approval than Obama did, meaning he has to show a bigger improvement.”

ANALYSIS: TRUE. The Left Wants to Hold on to Power, but We’re the Resistance. “The left wants to gobble up as much power as it can, and we’ve seen what Democrats are trying to do to Donald Trump because they see him as a threat. They won’t stop with him. You and I and anyone who believes in freedom and truth are in their sights. We conservatives are the resistance against this wholesale attempt to shut down anyone who stands in the left’s way.”

MEANWHILE, OVER AT VODKAPUNDIT [VIP]: Underappreciated Albums: ‘The Dana Owens Album.’