Reading notes #3
With screenshots from Wim Wenders' End of Violence (1997)
How the specter of the trump trade weighs on the housing market
Both analysts and companies are concerned that Trump’s “America First” policies could raise a host of costs, from building materials to access to labour.
Just over one quarter of construction workers are immigrants and 13 per cent of workers are unauthorised, the largest share of any sector, according to US census bureau data.
The price tag of LA’s post-fire reconstruction would certainly skyrocket.
Read: Financial Times
Meloni meets Trump at Mar-a-lago
What seemed like a match made in heaven is already fraught by tariffs, a political prisoner exchange and NATO spending demands.
Read: Financial Times
The old consumer economy is dying and the new is yet to be born
Consumer demand has waned as the Covid-19 pandemic stimulus ebbed, hitting companies that rely on discretionary consumer spending particularly hard. Other major bankruptcies last year included food storage manufacturer Tupperware, restaurant chain Red Lobster, Spirit Airlines and cosmetic retailer Avon Products. “The persistently elevated cost of goods and services is weighing on consumer demands,” said Gregory Daco, chief economist at EY. The burden is especially heavy for families on the lower end of the income spectrum, “but even in the middle and on the higher end, you’re seeing more caution”
Another point for those theorizing a premature pullback of COVID stimulus as the chief cause of American economic malaise, and thus Biden/Harris’ failed re-election effort.
Read: Financial Times
A (maybe) silver lining to the proliferation of generative AI
“it’s very similar to when Lumière projected a film for the first time in a theater. When the train was approaching the camera, the audience ran out of the room. But we’ve since learned how to read photographic images and how to watch film, and to distinguish between reality and simulation. I think AI exists today on the same level of mimicry as cinema did before. The difference is that today you have this hypermimicry of human culture, not just of images. People are scared because they see a collective ghost represented by ChatGPT, just like [what] Lumiere’s terrifying train was before—which, to answer your question, was considered to be “pornographic”; the image was too explicit. But I think we’ll … be impressed by AI’s hyperrealism and these explicit representations [only] in the beginning. Deep fakes shocked everyone at first, but just like we’ve managed to make the machine LARP, we are learning. If you put things in perspective, the rise of photography, cinema, digital cameras, and eventually deepfakes has always helped people to never believe the face value of an image. AI is expanding our field of disbelief.”
Read: 032c
The secret to doubling demand for private equity funds
The $13tn industry is hoping the new White House will revive a deregulatory push from the final months of Donald Trump’s first presidency, which allowed private equity investments to be included in professionally managed funds. Now, the industry is seeking to push past that first step, allowing tax-deferred defined contribution plans such as 401ks to back unlisted investments such as leveraged buyouts, low-rated private loans and illiquid property deals, industry executives told the Financial Times
Read: Financial Times
WHY ARE YOU NOT INVESTING IN WW3 :(
Admiral Rob Bauer told the Financial Times that a failure by investors to understand their role in “collective defence” meant they risked missing out on significant government funding in the wake of Russia’s full-scale invasion of Ukraine in 2022.
“Why are you not convinced by trillions of dollars? What has happened to your business instinct? Are you stupid? And that’s what I say to pension funds as well. Are you stupid?” said Bauer. “If you are looking at return on investment . . . there’s so much money to be spent over the next 20 years.”
Read: Financial Times
The stakes of a looming dockworker strike
US venture capital investment in robotics has risen from around $2bn in 2019 to more than $3.5bn last year, according to data from PitchBook. In the first nine months of 2024, there were 130 fundraising deals for robotics start-ups — more than across the entirety of 2019. Among the most high-profile was a $675mn investment last February by Amazon founder Jeff Bezos, Microsoft and Nvidia in Figure AI, a Silicon Valley start-up founded in 2022 that is working on a faceless, humanoid “general-purpose” robot.
Read: Financial Times
Dawn for Lunar Capitalism
Of the 450 lunar missions forecast in the decade to 2033, about half will be by private companies, said Analysys Mason. According to the space consultancy’s latest Lunar Market report, those missions are expected to generate revenues of about $151bn, with 75 per cent still from government contracts,
Read: Financial Times
Los Angeles and the disappearing “wildland-urban interface”
The loss of more than 90 per cent of Southern California’s agricultural buffer zone is the principal if seldom mentioned reason wildfires increasingly incinerate such spectacular swathes of luxury real estate. It’s true that other ingredients – La Niña droughts, fire suppression (which sponsors the accumulation of fuel), bark beetle infestations and probably global warming – contribute to the annual infernos that have become as predictable as Guy Fawkes bonfires. But what makes us most vulnerable is the abruptness of what is called the ‘wildland-urban interface’, where real estate collides with fire ecology. And castles without their glacises are not very defensible.
Read: LRB
Greenland on the ground
Though many international companies have licences to dig, and the island abounds with valuable rare earth minerals, few projects have come to fruition due to government regulation and the logistical challenges presented by the landscape. Trump’s comments have boosted share prices of some local mining projects in recent days, with one person in the industry describing a “gold rush” feeling in the air.
Read: Financial Times
The profiteers are ready
Rents will increase, especially near the epicenter of massive fires around the Pacific Palisades and Altadena. Those planning to rebuild their homes will face intense competition for contractors. And impacts on wavering home insurance markets could lead to greater costs for all Angelenos.
Read: Los Angeles Times
Private Equity and Europe’s economic downturn
Private equity groups ramped up activity in Europe last year, taking advantage of the continent’s economic woes to snap up big companies at depressed valuations. The total value European buyout deals worth more than $1bn increased at more than twice the rate of the rest of the world, a Financial Times analysis of Dealogic data shows. Some $133bn of large deals were struck on the continent in 2024, a 78 per cent increase on the previous year. That compared with a 29 per cent increase in the rest of the world, to $242bn.
Read: Financial Times
Class reformation in the new Greek economy
In Greece, despite the years of growth, economic output is still a fifth below its peak in 2008 once adjusted for inflation. Wages and pensions also remain far below pre-crisis levels, with the average monthly salary 22 per cent below living costs in Athens, the capital. A staggering 67 per cent of Greeks consider themselves “poor”, and analysts warn that the country is producing a new class of “working poor”, those who have full-time jobs, but are struggling to make ends meet, especially in expensive cities like Athens where housing costs have skyrocketed.”…
…In tourist hotspots, daily wages for unskilled construction workers are now higher than in the capital. “We ship [labour] from Athens to the islands,” he says, adding that unskilled workers now earn as much per day “as a technician with 30 years of experience” did a few years ago.
Read: Financial Times
Can’t say I hate this development…
International mining companies are at the mercy of “terrifying” tactics from military regimes in Africa’s Sahel, whose leaders are using legal disputes, nationalisations and arrests to assert greater control over crucial minerals like gold and uranium.
Read: Financial Times
Death(onomics) and Taxes: Tooze on the Russian war economy
This is the fiscal arithmetic of what Vladislav Inozemtsev in 2023 dubbed Deathonomics. It places a heavy burden on public budgets. But that spending does not disappear into thin air. It flows back into the war economy and it ultimately serves to generate new flows of income for the state, in the form of taxes. According to the forecasts for 2025, tax revenues are expected to rise 73 percent…
Read: Chartbook