***** denotes well-worth reading in full at source (even if excerpted extensively here)
Economic and Market Fare:
***** Welsh: Trump’s Doing Everyone A Favor With His Tariffs (Emphasis on Canada)
A.I. Fare:
It's becoming clearer and clearer that we're looking at a seismic shift in the US's relationship with the world, between:
— Arnaud Bertrand (@RnaudBertrand) February 2, 2025
1) The US dismantling its foreign interference apparatuses (like USAID 👇)
2) Marco Rubio stating that we're now in a multipolar world with "multi-great… https://t.co/C0z7JwIIif
A.I. Fare:
A global stock market this dependent on a few huge companies in a sector whose valuations are under high scrutiny is a recipe for volatility
Where next for AI?
...................................................... The truth is that even if DeepSeek is stopped through legal or government action or fails to deliver on its promises, what its entry has done to the AI story cannot be undone, since it has broken the prevailing narrative. I would not be surprised if there are a dozen other start-ups, right now, using the DeepSeek playbook to come up with their own lower-cost competitors to prevailing players. Put simply, the AI story's weakest links have been exposed, and if this were the tale about the Emperor's new clothes, the AI emperor is, if not naked, is having a wardrobe malfunction, for all to see.
How a Chinese app built by a hedge fund has upended not just Silicon Valley, but an economy increasingly tethered to a story about AI
............................................................ This is a truly fascinating moment. Things could go in so many different ways: Will tech stocks continue to tumble? Will it become clear that Silicon Valley is over-invested in a very resource-intensive strategy, perhaps needlessly? What then? Will the talk turn more pointedly Sinophobic, both within the industry and out, in an effort to try to demonize the company and its approach, as politicians, lawmakers, and industry insiders did with TikTok? Will Silicon Valley AI stalwarts like Altman be able to muster a convincing enough argument to keep the money flowing into their increasingly outsized enterprises? Will OpenAI and Anthropic press their case with the state and drive even harder to become too big to fail, angling for government contracts? What happens to the current construction of the AGI mythology, if it turns out a Chinese startup can make a serviceable AI clone for cheap? Does this puncture the armor of the AGI investment complex, and start to steer backers and partners away for real? Is the AGI fever breaking?
And why, we’ll be left wondering, regardless how the dust settles, with the vast majority of resources for AI research concentrated in the United States, was it a Chinese hedge fund’s side project that unearthed this leap in efficiency? Could it be that the major AI players were more interested in fortifying their approach of more-is-better, broadening the scope of their project, and accumulating power, than attempting to innovate in a way that makes AI more nimble, more democratized, to use one of the industry’s preferred terms, and more efficient? Could it be that Lina Khan was right all along to want to break up the tech giants to encourage innovation?
I guess we’ll see soon enough.
The Bank of Canada vs Deepseek
Quotes of the Week:
Roberts: Investing in 2025 will require a blend of optimism and caution. With slowing economic growth, fiscal policy uncertainties, global challenges, overconfident sentiment, and ambitious earnings expectations, investors have plenty of reasons to approach the markets carefully. There will be a time to raise significant cash levels. A good portfolio management strategy will ensure exposure decreases and cash levels rise when the selling begins. That remains our suggestion as “bullish exuberance” increases.
Roberts: Investing in 2025 will require a blend of optimism and caution. With slowing economic growth, fiscal policy uncertainties, global challenges, overconfident sentiment, and ambitious earnings expectations, investors have plenty of reasons to approach the markets carefully. There will be a time to raise significant cash levels. A good portfolio management strategy will ensure exposure decreases and cash levels rise when the selling begins. That remains our suggestion as “bullish exuberance” increases.
Charts:
1:
US architecture billings index has contracted for >2yrs now (only 3 months of interruption) yet 🇺🇸 non resi #construction likely to give-up ghost in 2025. Usual lag extended by Biden's yuuuge IIJA & IRA programs. Time (of reckoning for Trump)https://t.co/VU71nRmArJ pic.twitter.com/tdIkEJdAqg
— Τάκης Χριστοδουλόπουλος (@takis2910) January 26, 2025
(not just) for the ESG crowd:
The environmental agency just scrubbed most mentions of the global crisis from its online presence.
Lawrence: Where Have All the Liberals Gone?
................... O.K., there is a long, unfortunate history here. But since the Clinton years in the 1990s, matters have taken another turn. Capitulation itself has become the position, the value.
This became perfectly obvious once Hillary Clinton — warmonger, interventionist, cultivator of coups, all-around authoritarian — assumed a prominent voice among liberal elites. Since the 2016 political season, and one can scarcely fail to notice, liberals have vigorously favored … wars, interventions, coups, censorship, a certain apple-pie authoritarianism. ..........
Geopolitical Fare:
.................... Our ancestors set sail to conquer the world; their ancestors built a wall. ........
They’re just a better civilization than ours — not because theirs is miraculous or perfect, but because ours is just that murderous and dystopian. They simply do the normal thing while we do the freakish thing: they make the lives of their citizens better and better and avoid unnecessary wars, while western governments make the lives of their citizens worse and worse while plunging into new acts of mass military slaughter every few years.
Pics of the Week:
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