Local markets have opened higher this morning, which has caused momentary panic as investors – evidently not used to such things occurring – got spooked and rumours of witchcraft swirled through ASX central.

The morning’s 1.4% jump was eventually explained by an exceedingly patient Council of Senior Investors – some of whom can legitimately claim to have actually been in the building the last time this sort of thing happened, and we all went back to watching early gains trickle through our fingers on the way towards lunch.

I’ll get into the whys and wherefores of that shortly, but first… it’s “another day, another AI balls-up”, and this time around, it’s happened in the kind of work environment where the reliability of any information being presented is one of the most crucial parts of doing your job properly.

The story starts – as most of them seem to do, these days – with an American fella taking a company to court, presumably because it was a Tuesday and he had obviously run out of stuff to be outraged about.

According to the guy making the complaint, he’d been aboard a commercial flight when the drinks trolley (he alleges) hit him on the knee and gave him a bit of a boo-boo.

So, in the time-honoured American tradition, he hired New York law firm Levidow, Levidow & Oberman to help him turn his little owie into fat stacks of compo cash.

The plaintiff no doubt thought his lawyers would be pulling all-nighters while vaguely sexually harassing each other like the main characters in every cookie-cutter courtroom drama John Grisham ever wrote.

Instead, he found out the hard way that his lawyers weren’t really into the whole “let’s spend entire weeks trawling through databases in search of other precedent-setting legal cases” thing.

They were more into the “minimal effort, maximum return” school of thinking, which is why some really important parts of the case, as submitted to court, were the work of AI wunderkind, ChatGPT.

Things went wrong for Levidow, Levidow & Oberman lawyer Peter LoDuca – there’s probably a reason his name’s not over the door – when he palmed off a chunk of the research to workmate Steven Schwartz.

Schwartz, in turn, palmed off his workload to ChatGPT, asking the AI bot to find any legal precedents that would support the client’s demands for some sweet, sweet compensation.

ChatGPT dutifully spat out a list of cases, including Varghese v. China Southern Airlines, Shaboon v. Egyptair, Petersen v. Iran Air, Martinez v. Delta Airlines, Estate of Durden v. KLM Royal Dutch Airlines, and Miller v. United Airlines.

Unfortunately, none of those exist. The robot made them all up, and even doubled-down on its tissue of lies when Schwartz, being the diligent officer of the courts, asked if the AI was certain the cases existed.

It unravelled when the airline’s own lawyers went looking for those cases, and found that they were what the US legal community commonly refers to as “complete, unadulterated bullsh-t”.

Being the tattle-tales they are, they dobbed LoDuca in to the judge. LoDuca promptly rolled over on Schwartz, who then tried to throw ChatGPT under the bus… but the judge wasn’t having a bar of it.

“Six of the submitted cases appear to be bogus judicial decisions with bogus quotes and bogus internal citations,” Manhattan federal judge P. Kevin Castel said in his letter to the legal team.

But, there’s a glimmer of hope for Shwartz, as Judge P. Kevin Castel claimed that the balls-up left the court in an “unprecedented circumstance” – which simply isn’t true.

ChatGPT told me this morning that this kind of thing has happened multiple times, citing several famous legal decisions including Oliver Stone’s highly-publicised case The People vs Larry Flynt, 1693’s Town of Salem vs A Few Weird Old Ladies, and that episode of Happy Days where The Fonz gets one of his hairy biker mates off a purse-snatching charge.



The ASX leapt out of bed this morning to greet the day with a cheery smile, sending the benchmark on a steep trajectory to be up 1.37% in early trade… but we all know it won’t last.

The local rise has been attributed to a 90-minute phone call between US President Joe Biden and Republican Speaker of the House Kevin “not Joe… the other one” McCarthy on the weekend.

Across the sectors, and it’s Real Estate out on top, banking a 1.94% increase this morning ahead of Materials (+1.58%) and Financials (+1.35%).

Last week’s standout performer InfoTech is up 0.8% this morning, and Consumer Discretionary is the only sector in the red, down 0.27%.

The latest round of Lithium Madness has Leo Lithium (ASX:LLL) up 14.8% this morning, after the company revealed a strategic placement with China’s largest lithium producer Ganfeng to raise to raise A$106.1 million from the issue of 131 million new shares, representing 9.9% of Leo Lithium’s total pro-forma shares on issue.



News from the US was positive in the lead-up to local  markets opening this morning, thanks to the rampantly idiotic brinkmanship of US debt ceiling negotiations finally (apparently) coming to an end during a 90-minute phone call between President Biden and Republican ratchet-jaw McCarthy.

After about 70 minutes of confused arguing over who had called who, and 10 minutes of inane chatter about the weather, the pair managed to land on an “in principle agreement” to stop the US defaulting on its loans and plunging the planet into a New Dark Age.

The agreement would keep US government non-Defense spending roughly flat in the 2024 fiscal year, with a measly 1% ball-tickler the year after that.

But, crucially, it will suspend the debt limit until January 2025, so if everything goes to plan, you won’t have to read about it (and I won’t have to write about it) until after the next US presidential election.

In stock news, Nvidia Corp climbed 2%, adding to its 24% gain on Thursday, while rival chipmaker Marvell popped over 32% after predicting its revenue from artificial intelligence would double.

“In the past, we considered AI to be one of many applications within cloud, but its importance and therefore the opportunity has increased dramatically,” Marvell CEO Matthew Murphy said in the earnings call.

Murphy didn’t openly thank Nvidia for giving his company a chance to re-think things and magically crystal-ball a T-Rex sized revenue boost out of thin air, but that was probably just an oversight on his part.

In Japan, the Nikkei is up 1.32% despite news that China has overtaken the tiny island nation as the world’s leading exporter of automobiles.

That’s according to China, though, which is claiming that its automakers have managed to smash out a 58% increase in exports since this time last year – far outstripping a much more realistic 6% increase for Japan over the same period.

China says that demand for electric vehicles is behind the massive jump in export numbers… that, and because “We sold heaps of cars to Russia. No… truly. Russia’s bought loads of them. For real. Go ask Russia… they’ll tell you.”

Also in China, Shanghai markets are up 0.14%, while in Hong Kong the Hang Seng is down 0.43%.



Here are the best performing ASX small cap stocks for May 29 [intraday]:

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The morning’s winner in Small Caps is Kula Gold (ASX:KGD), up 28.6% on news of progress on potential lithium bearing pegmatites at the company’s recently acquired Kirup Project, 20km west of the world’s largest hard rock lithium mine, Greenbushes Lithium Mine in Western Australia.

Chief executive officer Ric Dawson said the company is progressing to drill programs on these new prospects.

“These new Mustang and Cobra Prospects with evident spodumene, potential LCT suite mineralisation are an encouraging development from some regional work to add to our advancing lithium portfolio of projects.

Next best is Archer Materials (ASX:AXE), which has spiked 25.3% despite no news for a week, when the  semiconductor company revealed it had become the first Australian company to partner with the World Economic Forum’s Centre for the Fourth Industrial Revolution.

And in third place this morning is WIA Gold (ASX:WIA), up 21.4% after announcing that extensional RC drilling at the Kokoseb gold deposit, situated on its Damaran gold project in Namibia, has returned thick, high-grade intercepts.

The drilling results include intercepts of 3m at 5.96g/t Au from 282m, 37m at 9.46g/t Au from 291m, including 15m at 17.13g/t Au from 292m, and 6m at 2.41g/t Au from 333m.

“Kokoseb, once again, is revealing its outstanding potential,” QIA exec chair Andrew Pardey said.

“Following the recent announcement of the initial mineral resource estimate of 1.3Moz at 1.0g/t Au (0.5g/t Au cut-off), the latest RC drilling results have returned very high-grade, thick mineralised intercepts beneath the existing US$1,800/oz resource pit shells.”



Here are the most-worst performing ASX small cap stocks for May 29 [intraday]:

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