1. India might need to look for a Tom Barrack equivalent to open informal doors with Donald Trump. Barrack, a private equity magnate and long-time confidant of Trump, has swung the rapprochement between Erdogan and Trump. People like Barrack, Steve Witkoff, Joshua Kushner etc., seem to have an outsized influence in engaging with the Trump administration.
2. In the meantime, Pakistan is throwing a series of goodies at Trump to entice deeper engagement with it. The latest is a proposal to construct a port at Pasni for $1.2 billion with Pakistani federal government and US-backed development finance, linked to a new railway to transport critical minerals from the country's interior. Pasni is just 100 miles from Iran and 70 miles from the Pakistani city of Gwadar, which has a China-backed port.
3. John Burn-Murdoch points to peak social media.
Time spent on social media peaked in 2022 and has since gone into steady decline, according to an analysis of the online habits of 250,000 adults in more than 50 countries carried out for the FT by the digital audience insights company GWI. And this is not just the unwinding of a bump in screen time during pandemic lockdowns — usage has traced a smooth curve up and down over the past decade-plus. Across the developed world, adults aged 16 and older spent an average of two hours and 20 minutes per day on social platforms at the end of 2024, down by almost 10 per cent since 2022. Notably, the decline is most pronounced among the erstwhile heaviest users — teens and 20-somethings... The shares of people who report using social platforms to stay in touch with their friends, express themselves or meet new people have fallen by more than a quarter since 2014. Meanwhile, reflexively opening the apps to fill up spare time has risen, reflecting a broader pernicious shift from mindful to mindless browsing.
The trend appears not to be the case with North America where it's still rising.
Fixed-line telephony, the very cornerstone of 20th-century communication, took a staggering 25 years to reach 1 million users in the United States. Pagers took a decade, and the mobile phone slightly less. The internet, a seismic shift in itself, took about five years, and Facebook less than a year. But the most breathtaking leap came with ChatGPT — the world’s current favourite generative AI tool. It took a mere five days to cross the one million user threshold globally.
5. Palantir could be the makings of the 'mother of all bubbles'! (HT: Adam Tooze)
Once more for the record … Palantir is not some world-bestriding titan of reactionary capitalism that merits inclusion alongside the true giants of big tech. Palantir is a medium-sized business, enormously pleased with itself if it generates as much as $1 billion in revenue per quarter, 55 percent of which comes from modestly sized government contracts.
6. Fascinating profile of Bari Weiss, the former NYT journalist who quit in protest at lack of freedom to express there and founder The Free Press as an independent media outlet. Paramount has announced her appointment as the new editor in chief of the CBS News and acquisition of her startup The Free Press for $150 million.
6. Ruchir Sharma describes the US economy, and especially the equity markets, as one giant bet on AI.
The hundreds of billions of dollars companies are investing in AI now account for an astonishing 40 per cent share of US GDP growth this year... AI companies have accounted for 80 per cent of the gains in US stocks so far in 2025. That is helping to fund and drive US growth, as the AI-driven stock market draws in money from all over the world, and feeds a boom in consumer spending by the rich. Since the wealthiest 10 per cent of the population own 85 per cent of US stocks, they enjoy the largest wealth effect when they go up. Little wonder then that the latest data shows America’s consumer economy rests largely on spending by the wealthy. The top 10 per cent of earners account for half of consumer spending, the highest share on record since the data begins.No nation has seen an immigration boom-bust cycle near the scale of the one roiling America. Net immigration nearly quadrupled after 2020 to peak at well over 3mn in 2023, but the backlash led by President Donald Trump sent that figure into freefall. This year only around 400,000 net new arrivals are expected, and that could be the trend in the coming years. This labour force squeeze alone will reduce America’s growth potential by more than a fifth, Goldman Sachs analysis suggests.
This is an interesting snippet about the US equity markets.
Foreigners poured a record $290bn into US stocks in the second quarter and now own about 30 per cent of the market — the highest share in post-second world war history. Europeans and Canadians have been boycotting American goods but continue buying US stocks in bulk — especially the tech giants. In a way, then, America has become one big bet on AI. Outside of the AI plays, even European stock markets have been outperforming the US this decade, and now that gap is starting to spread. So far in 2025, every major sector from utilities and industrials to healthcare and banks has fared better in the rest of the world than in the US.
7. China seeks to expand its influence in South Asia.
FT research shows Chinese officials have held at least seven high-profile meetings with Bangladeshi politicians in the 14 months since the interim government of Muhammad Yunus, a former social finance entrepreneur, took office. This compares with eight meetings in the last five-year term of Bangladesh’s long-standing autocrat, Sheikh Hasina. Beijing officials, meanwhile, have held 22 high-profile meetings this year with counterparts from Pakistan — on track to match last year’s 30. Among the smaller countries surrounding India, Beijing has conducted at least six high-profile meetings with Nepali officials this year and at least five in Sri Lanka.
8. French sovereign bond yields shoot up following the collapse of another government.
The yield on the benchmark 10-year French OAT is now trading above its Italian counterpart (BTP) — a once unthinkable inversion. This financial penalty places the Eurozone’s second-largest economy behind a market sometimes characterised in the past as one of the bloc’s “peripheral” economies. This is more than a metric of fiscal imbalance; it is a loss of confidence in the French political system’s ability to govern decisively. Meanwhile, the sovereign spread between the 10-year French OAT and the benchmark German Bund has widened dramatically, pushing it to more 0.85 percentage points... The widening spread between French and German bonds threatens the ECB’s ability to ensure its single monetary policy is transmitted well across the bloc. When dispersion in yields increases, it risks the type of market fragmentation and stress that could become a systemic threat... The bond markets are losing patience with political paralysis.
9. OpenAI has signed up for 20GW for computing capacity.
OpenAI has signed about $1tn in deals this year for computing power to run its artificial intelligence models, commitments that dwarf its revenue and raise questions about how it can fund them. Monday’s deal with chipmaker AMD follows similar agreements with Nvidia, Oracle and CoreWeave, as OpenAI races to find the computing power it thinks it will need to run services such as ChatGPT. The deals would give OpenAI access to more than 20 gigawatts of computing capacity, roughly equivalent to the power from 20 nuclear reactors, over the next decade. Each 1GW of AI computing capacity costs about $50bn to deploy in today’s prices, according to estimates by OpenAI executives, making the total cost about $1tn... OpenAI is burning through cash on infrastructure, chips and talent, with nowhere near the capital required to fund these grand plans. The deals also involve circular arrangements between the world’s most valuable start-up and its partners, as well as complex financing terms that have in most cases yet to be agreed...
OpenAI’s deals with Nvidia and AMD could cost up to $500bn and $300bn respectively, according to Financial Times calculations, although both include incentives that could also help OpenAI pay for the chips it buys. Oracle’s deal will cost OpenAI another $300bn, while data centre group CoreWeave has disclosed computing deals with OpenAI worth more than $22bn. OpenAI also launched an initiative with SoftBank, Oracle and others in January known as Stargate that pledged to invest up to $500bn in US infrastructure for OpenAI. It is not clear how the Nvidia and AMD deal will fit into the Stargate plans. The ChatGPT maker has not disclosed whether it will buy chips directly or through its cloud computing partners, and is expected to lease some Nvidia chips.
This is an intriguing financing arrangement
AMD will give OpenAI warrants entitling it to buy up to 10 per cent of the company for just a cent a share, depending on their project hitting certain targets, including some linked to AMD’s share price. AMD shares were worth nearly $204 when markets closed on Monday. If they keep rising, OpenAI could sell its stock to fund its spending on AMD’s chips.
10. Leo Lewis points to Japan's demographic problem of labour shortages, which he describes as 'enshortification'!
Take carpenters — essential in a country where a great deal of construction uses wood. Their numbers have more than halved since 2020, while more than 43 per cent of those still working are over 65. Many projects, large and small, are being delayed. A shortage of bus drivers has caused operators in Tokyo to cut over 200 services. The military cannot get close to its recruitment targets. The Foreign Ministry revealed earlier this year that it cannot hire enough Japanese chefs for its embassies. In some parts of the countryside, home deliveries of certain goods are undertaken by scooter riders in their mid-80s. There are genuine concerns across industry that companies are going to run into trouble because Japan no longer has enough tax accountants.
11. Ahead of the meeting between US and Chinese Presidents in Seoul later this month, China announces sweeping export controls on rare earths and related technologies, where China controls 70% of mining, 90% of separation and processing, and 93% of magnet manufacturing.
Under the new rules, foreign companies will need Beijing’s approval to export magnets that contain even trace amounts of Chinese-sourced rare earth materials, or that were produced using the country’s extraction methods, refining or magnet-making technology. The restrictions announced on Thursday by China’s commerce ministry will for the first time create a Chinese version of the US foreign direct product rule, a measure Washington has used to block semiconductor-related exports to China from third countries. The rules give Beijing more leverage to exert control over the global rare-earth supply chain. Rare earth minerals and magnets are critical to technologies from smartphones to electric vehicles and fighter jets.
It has drawn a predictably strong reaction from President Trump, who has now threatened to cancel the meeting and raise massive tariffs on China. He has announced the imposition of 100% tariffs on all products from China and export controls on critical software.
It's hard not to come away with the feeling that China has made a significant miscalculation with this decision. After having won Round One, it now risks squandering those early gains.
12. Declining birth rates (18 million births in 2016 to 9 million in 2023) and a preference for inshoring (Nestle has won approval for a factory in Suzhou in eastern China to make and sell a similar product) have led to the shutdown of a Nestle factory producing formula for Chinese newborn babies and employing 540 workers in Askeaton, a small town in the Irish county of Limerick with a population of 1100.
13. William Buiter on the rise and rise of gold.
Of the total 216,265 tonnes of above-ground stock of gold at the end of 2024, jewellery accounted for 97,149 tonnes (45 per cent). I believe that much of this “consumer demand” — indeed most of it — is in fact investment demand. Only gold coins and bars (including exchange traded funds) are counted as investment demand. At the end of 2024, this accounted for 22 per cent of the total stock. Central bank holdings were 17 per cent. Gold’s use in technology accounts for part of the 15 per cent of the global stock, classified as “other”... The flow supply of new gold in 2024 was 4,975 tonnes... Gold, extracted underground at material cost, was turned into gold bars and then put back underground at additional cost. Globally, gold reserves (ore deposits that can be economically extracted) are estimated at 54,770 tonnes and gold resources (ore deposits where the profitable extraction is more doubtful) at 132,110 tonnes. The only gold production strategy that makes socio-economic sense is to leave it all in the ground... At the end of 2024, gold holdings accounted for 20 per cent of central bank reserves, more than euro reserves (around 16 per cent). Gold’s price surge since would have pushed its relative share higher.
14. John Burn-Murdoch questions the narrative of the great graduate unemployment crunch, where new graduate entrants to the labour market are being squeezed by the rise of AI among other trends.
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