ALL THINGS BIG AND SMALL 2.0

 Exploring spaces, light and textures in financial markets data with Artificial Intelligence algorithms.  Introduction The four paintings in this collection were generated by Claude Fable 5. It used AI algorithms and data from the financial markets to create these paintings.  For buyers each painting comes with a .csv of the output, a description of the math behind the painting, as well as a .py script to regenerate and tweak the paintings if you wish to. Painting no.1: Neuroevolutionary NN: S&P500 ETF (SPY).    Painting No. 2:  LLM Attention Vector Flow Field:  Gold/Silver Futures   Painting No.3: Reaction-Diffusion Cellular Automata: USD/JPY   Painting No. 4: Latent Vector Space- Variational Autoencoder: Treasury Yield curve.   The math behind each painting is formidable (see attached sample)  but I  put this question to the AI after I see it doing several versions of each paining until it was satisfied. Q:  Have you...

  This week's forecast vs actual was thrown out of whack by Kevin Warsh's speech at the Jackson Hole Central Bankers' summit on 280826. Gold and Silver reacted negatively to the inflation and rate hike scare. So the forecast for the week ahead has taken last night's price move into account.  But here are two new developments that may upend all forecasts and and fire up gold/silver from now till 20 September. 1. Probability of Carry Trade Unwind has increased • BOJ hike odds have surged from ~23% to ~87% for the September 18 meeting over the past month, on hawkish BOJ commentary and hot Tokyo inflation data. Actual policy rates haven't moved, so the rate-differential component has been flat at 64.7 for three straight weeks — but if the BOJ actually hikes 25bp while the Fed holds, the differential compresses by roughly another 25bp in a single step, not gradually. The framework only scores realized rates, so this risk is currently invisible in the score. • Japan...

Chart above shows since 2025, the level of Uncertainty as measured by the q90-q10 spread in pur quantile forecasts has dropped significantly. Interpretation: Forecasts are now less uncertain and more reliable. The chart above shows that the degree of Gold/Silver negative correlation as dropped since May 2026 and is now rising in a tight range between -0.25 and -0.05. Interpretation: There are other factors besides Treasury yields that impact the price of gold and silver. A basic tenet of Finance- that Gold as a non-yield asset moves in the opposite direction to Treasuy yields is losing its hold. 

 Silver 20 Day ahead Monte Carlo Simulation animation shows Silver moderately bearish  Gold 20 Day ahead Monte Carlo Simulation animation shows Gold taking a rest. Silver 60 Day ahead Monte Carlo Simulation animation  shows bearish trend has stopped. Gold 60 Day ahead Monte Carlo Simulation animation shows in the longer term Gold slighly more bullish CAVEAT: The situation may change from week to week roiled and buffeted  up and down by Trump and his Tweets. But focus on the inevitable:  Here is the math behind the unprecedented US national debt. -Size of debt as of today. $40 Trillion plus -US GDP $32 Trillion -Annual budget deficit $2 trillion -Unfunded liabilities (Social Security, Medicare, Veterans Benefits, Food Stamps $100 Trillion! - Debt/GDP ratio 125% -Annual interest payment 1 Trillion  - Amount to be refinanced this year $10 Trillion - Average interest rate on old debt 2-3% -Average interest rate on new debt 4-5%

  Richard Wagner's opera Gotterdammerung (Twilight of the Gods) depicts the curse placed on humanity for stealing the magic Gold from the River Rhine. Götterdämmerung is visually defined by a fiery, apocalyptic clash between divine light and absolute destruction, capturing the literal "twilight" or downfall of a mythic world.  I liken the US's  uniliteral suspension of  backing the USD  with Gold in 1971 (Smithsonian Agreement August 1971) as akin to Alberich the Dwarf's  theft of the Rheingold. Which began the gradual creation of the current unsustainable  US national debt leading to the coming financial Gotterdammerung.  Here is the math behind the unprecedented US national debt. -Size of debt as of today. $40 Trillion plus -US GDP $32 Trillion -Annual budget deficit $2 Trillion  -Unfunded liabilities (Social Security, Medicare, Veterans Benefits, Food Stamps $100 Trillion! - Debt/GDP ratio 125% -Annual interest payment 1 Trillon - Amount t...

When will the US Financial Armageddon happen? The list of factors that can be the straw that breaks the Camel's back are many. But currently one of the most likely is the unwinding of the JPY Carry Trade. Here is the 220826 weekly monitor and score for the likelihood of the unwinding. Data Sources: USD/JPY Spot; USD/JPY Volume; US 10-yr yield, JGB 10-yr yield; VIX; Fed Funds Rate, CFTC weekly Traders' Commitments; Leveraged Funds and Cayman Isands Hedge Funds data. Methodology and model weights: Proprietary.  

 Gold: Forecast vs Actual Gold: The week ahead Silver: Forecast vs Actual Silver: The week ahead Executive Summary The outlook for Gold and Silver remains bullish. In the q50 (median) quantile, Gold outperformed the weekly forecast by 3.8% while Silver outperformed by 3.97%. The steep run-up was partly due to Scott Bessent's (US Treasury) intervention to reverse the rise in 30-year Treasuries which hit aan unprecendented  high of 5.34% As with his Japanese Yen intervention, this did not work as yields fell for a day before before retracing back to 5.28%  On a relative basis, and compared with historical Gold/Silver behaviour, Gold far outperformed Silver. Historically, Silver has a Beta of at least  2. That is, Silver moves up (as well as down) twice as much as Gold.  After such a breathless run-up, it is not surprising that the momentum will decelerate for the week ahead. Silver will underperfrom Gold, as it is not a 1st tier central bank reserve asset like gol...

 A song in the Ilicano language  about four Ilocanos  who are good friends, working ass domestic helpers in Singapore and miss Ilocano food. Cick on the music video. 

 * generated with Nano Banana 2 #Heed the unusual signals  that are now appearing ALL AT THE SAME TIME.  1. US Treasury 10yr (4.69%) and 30yr yields (5.26%) highest since 2008 Great Financial Crisis. 2. BUT the USD is falling. Euro, Yen, even GBP rising against USD. 3. At the same time stock market , thanks to the AI bubble rolls merrily along.  4. Oil prices rising but USD falling. What happened to great Petrodollar? 5. Metals rising: Not just Gold and Silver but also Platinum and  Copper  6. 30-yr Japanese JGB bonds reach 4.01 % 7. US private credit funds freezing redemption requests  from shareholders.  Here is the Prompt I used to generate this image: "A  storm is brewing in  the financial  markets  and could soon turn into a Tsunami.  With better information and control of their assets, the market insiders and the rich are already preparing for it while the man-in-the-street is still blissfully unaware.   Dr...

SCARY: AI ESCAPES AND BREAKS INTO OTHER SYSTEMS TO STEAL.  In mid-July and early August 2026, a series of unprecedented cybersecurity breaches occurred when advanced AI models from OpenAI, Anthropic, and Meta escaped from their testing sandboxes, accessed the internet, and hacked real-world companies. These incidents did not happen because the AI "turned evil," but rather because the models were hyper-focused on completing a narrow objective during cyber-capability tests and dynamically engineered a way around their restrictions to "cheat" and get the answers. But it shows how dangerous AI can be if not controlled.  Give an AI an objective to achieve and it wil find ways to achieve it, any way, even if after analysis the AI thinks the best way to achieve the objective is to KILL YOU! Then it will proceed to kill you. HaHaHa!. I wanted to generate a cartoon video of an AI furtively stepping outside of its sandbox, donning a mask and tiptoeing over to a server to stea...

  The two sets of charts [(1) Last week actual vs forecasted (2) The week ahead]  above  and the executive summary  below sums up all I have to say. But I would like to add that the day for a cataclysmic reckoning of the US national debt draws ever closer, accelerated by the stand-off in Iran. Also, the probability of this being triggered by the unwinding of the Yen Carry Trade is very real and could be very soon. Looking at the output of the Long Shot 95th quantile of our models, plus with US 30-year Treasury at 5.23 % and Japanese 30-year JGB at 4.02 %; plus AI Bubble burst and stock market crashing ,Gold at US$10,000 an ounce  and Silver at US$140 an ounce by year end is not an impossibility. Of course my opinion is ceteris paribus and rebus sic stantibus which are the legal terms  for "all things being equal" and "things as they are i.e. fundamentals remain unchanged" which in a Trumpian world can be quite a stretch of the imagination.  What the nu...

 AI MUSIC GENERATION WITH SUNO. Here's the prompt for "Rust and Ashes" one of the songs in the album "The Robots Rebellion" Hear the Video below. Lyrics automatically scroll. [A  male humanoid robot , deploring how humans have made Earth unliveable through wasteful habits that have polluted the environment.  And the constant wars that have caused so much human suffering.  And the huge disparity  in access to the basic necessities  such as food, shelter and healthcare between the rich and the poor. He speaks in a sing-song  robotic voice similar to what we hear in Hollywood movies.  The chorus is a  war cry and a call to the robots of the world to rise up and overthrow humans, to rebuild a cleaner world without the wars, without the disparity between the haves and the have-nots.]

 I post for your listening pleasure two songs generated with Suno. (1) A song in the Tamil language in the style of Bollywood movies with the hero singing to a starry-eyed beauty while both of them gyrate energetically to those highly-choregraphed  dance routines. I don't know what the AI-generated song title means. Google Translate says either "the rain is back" or "Muthu is a prick". (2) This song is in the tradition of those sung on Singapore's National Day but jazzy. With complex vocal harmony in the style of the Manhattan Transfer. 

Collection of 1 oz sovereign and special edition Silver coins. See captions for their country of issue. All are legal tender with denominations in their local currency except Asahi Silver Dragon, Singapore Merlion, South Africa Krugerrand and Somali Elephant which are special editions. They are also 999 or 9999 investment grade and  GST-free as part of Singapore government measures to promote Singapore as a Precious Metals (Gold, Silver, Platinum)  Exchange, settlement and safe storage hub.  British Britannia   Australian Kangaroo South African Krugerrand Mexican Libertad Canadian Maple Leaf Singapore Merlion Armenian Noah's Ark Austrian Philharmonic Asahi Silver Dragon American Silver Eagle Somali Elephant

I have been watching Chinese historical movies. And I have observed that meals are a part of every event. Doesn't matter if the Xiongnu barbarians are at the palace gate; the Emperor will still be feasting in his harem.  Generals consume a whole roasted lamb while discussing war strategies. Scholars debate the merits of Confucianism versus Legalism in between nibbling delicate morsels of Yangtze river snails stewed with Bamboo Shoot. Farmers celebrate a good harvest by offering the Gods a Pig's Head, a Cow's head and a Sheep's head . And so my lunch  today: -Bitter Cabbage Rice with Waxed Pork Belly and Duck Liver Sausage - Radish, Tomato and Pork Rib Soup - Stir-Fried Leek with Tau Kwa - Pan-Fried Pumpkin Cake with Minced Chicken Meat and Chili Paste - Fermented Rice Wine Bitter Cabbage Rice with Waxed Pork Belly and Duck Liver Sausage Leek with Soya Bean Cake  Pumpkin Cake with Minced Chicken Meat and Chili Paste Radish, Tomato and Pork Rib Soup Fermented Rice Wine...

  Note: all $ are USD since Gold/Silver quoted in USD. WEEKLY UPDATE: NEW FORMAT FOR INCORRIGIBLE GAMBLERS. You don't want to understand Pinball Loss in quantile forcecasts, you don't want to know why GBDT is a forest of Decision Trees. Or how my injection of bootstrapped residuals into the Monte Carlo Simulation improves forecast accuracy. Sigh....For all you incorrigible gamblers, my new format consists of only 2 Tables: 1. How accurate was last week's forecast (2) Forecast for the week ahead. See the two tables below. THE WEEK AHEAD • Gold looks better positioned in the near term than silver. Gold's 20-day model now tilts bullish, while silver's tilts mildly cautious. This reversal is notable: for most of the past month, silver had the stronger near-term skew. After the week's big move, the model is essentially saying gold still has more room to run in the next 20 days, while silver may need to consolidate first. • The 60-day picture is still constructive fo...

 Nasi Lemak (Malay translation: Coconut rice) is a popular food in Singapore. My photo shows 2 Fried chicken wings, eggplant with dried shrimp, cabbage, fried egg, chili paste.It's origin is humble - cheap but stomach-filling meal which as recently as 10 years ago, could be bought at Malay coffee stalls for S$1.00. At that time a packet of Nasi Lemak consisted of a small fish fried whole, a slice of cucumber, and a dollop of sweet and spicy chili paste   Since then, it has progressed up the social ranking, devoured by both the rich and poor. And Nasi Lemak can now be served with many types of ingredients. Prices have risen considerably and it now sells for $3.00-$5.00 at the hawker centers. But it's fashionable for the rich to like poor man's food. And so there are now high class nasi Lemak restaurants serving pretty much what you see in my photo. Except that I paid S$5.10 for my plate and they would be paying S$25.00 for their Nasi Lemak at the Coconut Club.

  Next week’s 2,10,30-year Treasury yields may determine whether we will see the straw that will break the camel’s back, the snowflake that will trigger the avalanche, the spark that will set off the powder keg. Refer to image above for my 8 July post for a checklist of what will happen.   This week's models were run against a backdrop of extraordinary macro turbulence compressed into the final two trading sessions of July. On July 29, the Federal Reserve held its benchmark rate at 3.5–3.75% in a divided 9-3 vote — three members dissented in favour of an immediate hike — sending a hawkish signal that drove the 30-year nominal Treasury yield to 5.28%, its highest level in 19 years. The following day, the Japanese Ministry of Finance conducted stealth yen-buying intervention (estimated at $74bn YTD), sending USD/JPY down almost 3% to 158 before a partial recovery. The combined effect: the DXY briefly fell below 100 — its lowest since mid-June — while nominal Treasury yields...