How can we make smart decisions about the future if the future is unknowable? @wimsam.bsky.social
Sydney, AU
Joined March 2010
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Trump’s losing battle with green energy :
“Greenhushing” — quietly pursuing investments without trumpeting their environmental credentials — has allowed companies to press ahead without attracting unwanted political attention.
ft.com/content/b263bbe1-cd0c… via @ft
There has been a lot of talk of 'greenhushing', when companies, and especially their top executives, go silent on anything that has a whiff of sustainability. But data suggests that this phenomenon, while real, is limited.
Read more from Moral Money: on.ft.com/3Y4npol
Wimal Samara retweeted
YOU’D RATHER BE US
The cost of money has soared around the world through 2026, turning the screws on plenty of borrowers
That has put the blowtorch to the belly of the likes of France, and also caused plenty of chatter here in Australia too – including in the wake of a new report out from the IMF
So it’s worth a reminder that the Lucky Country remains luckier than most realise
The chart shows what we owe the world less what they owe us
That’s actually not much more than a third of what it was a decade ago, back down to rates last seen in the mid-1980s
Add in the fact that most of our borrowing is in $A, and that’s a reminder that – as a nation – Australia is less exposed to pain than most others
No, that doesn’t stop Bathla-like events, but it does suggest much lower systemic risk
The sharp fall in our liabilities has been driven by both good and bad reasons
The good stuff includes the growing investment by super funds in the rest of the world, as well as the higher prices the world gave us for our red and black rocks over the past decade
The bad stuff includes the lack of investment in Australia. As we’ve become a less attractive place to invest, both the world’s money and our own has headed elsewhere …
Data centre upstarts evoke earlier broadband craze.
Alternative telecoms firms did not fail simply because they oversupplied a market whose demand projections were exaggerated.
The industry was stricken with excess capacity in part because technological improvements massively increased the carrying capacity of installed fibre-optic networks.
Neoclouds are also at the mercy of uncertain technological developments.
* Can Nvidia hold onto its position as the dominant maker of AI chips?
* Will OpenAI and its rival Anthropic – both of which are prime neocloud tenants - continue to dominate their field?
* Will the arrival of small language models that can run on local computers obviate the large language models and their expensive data centres?
It is this profound uncertainty regarding the future of AI technology, rather than the level of capital spending, that makes the current boom “fundamentally different” from anything the world has seen before.
@chancellor_e
breakingviews.com/columns/bi…
As markets assess how the fiscal piper will ultimately be paid, they have begun to put a modest but systematic premium on currencies of better-rated sovereigns such as Switzerland, Australia and Canada.
But nowhere is that theme more manifest, or more investable, than in gold.
ft.com/content/589bc3d6-998e…
Our planet has been spinning faster since about 2015, meaning that before the 2035 deadline, UTC might need to add a negative leap second.
Deleting a leap second has never been tried and could, create mayhem in the digital time-stamped continuum.
ft.com/content/c5cae5a4-b164…
What distinguished what we call World Wars was, ironically, domestic depth rather than international breadth.
A better analogy for current geopolitics is the Seven Years’ War.
From 1756 to 1763, the world’s major powers fought across Europe, North America, the Caribbean, West Africa, India and the oceans connecting them.
Britain and France competed for colonial and maritime dominance, Prussia fought for survival, Austria sought to recover Silesia and Russia joined hostilities unsure whether its future lay in Europe or across the Eurasian landmass it was still absorbing.
@LowyInstitute
lowyinstitute.org/the-interp…
The future is messy, complicated and uncertain, that is always the case.
The most important question to answer is:
am I appropriately diversified given all that I can’t possibly know?
@BehaviouralJoe
behaviouralinvestment.com/20…
“Enshittification” describes the process whereby many tech offerings start as fun and life-enhancing, then become useful and then unavoidable, often indispensable.
But over time, the offerings degrade in quality as the extractive ambitions of billionaires trump the interests of the ordinary people they were supposedly designed to serve, leading to miserable outcomes.
~ learned that definition of the word from @katie0martin.ft.com here:
ft.com/content/f724d500-fd45…
One does not need to be a bear on technology to identify that this moment in market history is likely to be characterized by over-investment, over-spending, excessive valuations.
Disappointment is inevitable as an uncertain future surprises a consensus narrative that is too specific and too confident relative to the pace of change.
~ @verdadcap
mailchi.mp/verdadcap/priced-…
It’s rare for a rock song to predict the future, but Jimi Hendrix’s classic “All Along the Watchtower” seems to have done just that.
“Two riders were approaching and the wind began to howl” .... unknowingly anticipating the ghostly return of his two sidemen — both now deceased — to haunt the memory of both himself and his record label:
ft.com/content/90eaf409-fa2e…
Wimal Samara retweeted
Gotta love the talking heads on FinTV claiming the current market is different from 1999-2000 because unlike then, there is real earnings growth now. (S&P Operating EPS were up 30% from mid-1998 to mid-2000 because, you know, the Internet buildout!)
Social media is populist and polarising;
AI may be the opposite:
ft.com/content/3880176e-d3ac… via @ft
The question is not how much hyperscalers are spending on AI, but what that spending earns.
AI may transform the economy. That does not guarantee that the firms building the infrastructure will capture the surplus.
When capital turns over rapidly and competition forces continuous reinvestment, extraordinary spending can sustain competitive position without creating value for shareholders.
The scale of investment is historic. Whether the returns will be is far less certain. @RA_Insights
researchaffiliates.com/publi…
The Jevons employment effect:
When the cost of professional work falls, the addressable market expands and the total number of firms and workers in the field grows.
That includes startups launched by recent college graduates, who can now compete with established firms on certain tasks.
That is likely the reason why the unemployment rate is falling more for young workers.
And the number of new businesses created every week is at the highest levels in US history.
The bottom line is that cheaper inputs don't shrink industries. Instead, AI is going to increase both productivity and employment.
Wimal Samara retweeted
Early on there was more unknown about how much would be offline vs rerouted. Then there were a series of incorrect pronouncements and failed negotiations. The market (over)reacted to that in both directions. It's now settled down with clearer info and fair market value ticks up each day that the Strait is closed. I think that is so straightforward that I almost didnt post the original tweet. It is different from saying the market will go up each day. There's a lot of noise around security prices. Stock prices move every day even though most days there is no new info that changes anyone's valuation. That happens in commodities too.
Has the World Really Become More Uncertain?
“Normal Uncertainty”:
Greater doubt about the probabilities attached to future outcomes. We are comfortable with our model of the world, but are less confident about how likely any given outcome is occur. There is more variability within the model.
“Model Uncertainty”
Greater doubt about the model itself. It’s not just that the probabilities within our existing framework are volatile; it’s that the framework we use to understand the world may no longer apply.
The second case is when a political, market or economic regime undergoes a profound shift or shock, leaving us unsure about which model is appropriate in the first place.
@BehaviouralJoe
behaviouralinvestment.com/20…
When markets start to price renewed central bank easing at some point in the future, this could also help to spark another precious metals rally, especially if core inflation remains above target:
cmegroup.com/insights/econom…
Erik Norland, @CMEGroup chief economist explains the reasons why the financial markets are worried about inflation