I’m going to skip a discussion about what the Fed will do next or whether 2023 will bring a recession. These topics are discussed endlessly on the financial news media. Instead I will turn to more structural issues and risks. 1. The War in Ukraine  There are no ready-made solutions for this and there is […]

Globalization and technology have been the two forces in recent decades driving  economic growth and low inflation. The rise of China has been a major part of this process. With its sanctions on US tech exports to China and the passage of the so-called Chips Bill, the US has taken a sledge hammer to both […]

Reshoring, deglobalizing, de-coupling, tech cold war, industrial policy—these are words which increasingly and approvingly have slipped into the public discourse. Frankly, this does not bode well for future progress of humanity or for that matter the future of US stock market. These words represent the triumph of politics over economics, of trust disappearing among nations. […]

But not for the reasons you might think. Of course Nancy Pelosi’s visit provided a convenient opportunity for China to reemphasize about how important retaking Taiwan was to it. But there was no news there. Just as there was no real news that Pelosi was reciting the virtues of democracy to enthusiastic Taiwanese. Pelosi would […]

In an earlier Dismal Optimist several months ago, I suggested that US tech embargoes might provoke a Chinese attempt to takeover Taiwan by force. I compared the current US tech embargoes with the US and British embargoes on oil exports to Japan before WWII. As a result of these oil embargoes, Japan made what turned […]

There has been a sea change in Chinese policy regarding market capitalism in the last few months. Instead of Deng Xiaoping’s “to get rich is glorious”, Xi Jinping’s new slogan is a more egalitarian “common prosperity”. Instead of a market-driven Milton Friedman world of profit maximization, major Chinese companies are encouraged “to give back”. Instead […]

The fall of Afghanistan is the latest sad chapter in America’s futile effort to impose its own vision of the perfect democratic society upon hapless non-Western countries. America has tried to make the world safe for democracy whether the world wants this or not. Korea, Vietnam, Iraq, Syria, Libya, now Afghanistan– America never learns. It’s […]

“Buy when there’s blood in the streets, even if the blood is your own.” According to Investopedia, this is the complete quote attributable to Baron  Rothchild, prominent British banker and shrewd investor during the Napoleonic Wars. Regarding Chinese stocks, there’s no blood flowing in the streets. But there is an endless supply of red ink flowing […]

Photo by Simon Zhu on Unsplash The United States at the end of last week issued a warning that the situation in Hong Kong had worsened and promised more sanctions on the city. President Biden said the situation in Hong Kong was deteriorating. The Situation in Hong Kong Is Not Deteriorating From 2014 to 2020 […]

Legendary venture capitalist and software wizard Marc Andreessen famously said that “software would eat the world”. He wasn’t wrong but he took for granted one “minor” detail, i.e. that the enabling hardware—semiconductors– would always be there. And thanks to Moore’s law, the hardware was ever improving at rate which doubled every two years and was […]