Weekend reading links

1. SpaceX IPO is ample proof that the Chinese wall between equity research and investment banking in IB firms is a myth.

You might expect wildly divergent views on a company as speculative as SpaceX. Here the underwriters disagreed only over the scale of the upside. Sceptical voices came from outside the syndicate. Morningstar, for example, valued the shares at $63.

This is now dead

When the dotcom bubble burst, regulators uncovered emails showing that Wall Street analysts were privately disparaging stocks they were publicly touting. A 2003 global settlement between banks and regulators on analyst research imposed sweeping restrictions. It barred investment bankers from influencing analyst compensation, tightly controlled communications between research and banking, and banned analysts from IPO pitches and roadshows. New York Attorney General Elliot Spitzer’s premise was that shielding analysts from bankers would deliver truly independent — and better — research. On one level, the reforms succeeded. Banks have constructed a robust compliance apparatus to wall off research from investment banking. “Chaperones” now police interactions between analysts and corporate finance to prevent even the appearance of pressure. The Spitzer global settlement formally ended last December in favour of more flexible rules overseen by an industry association.

It is hard to see how SpaceX shares can avoid a cratering.

About 30 per cent of the roughly 640mn SpaceX shares available to trade have been borrowed to sell short, up 10 percentage points over the past 10 days, highlighting how traders are becoming increasingly sceptical of the company’s market prospects... About 900mn further SpaceX shares could become available to trade as soon as next month when certain lock-up provisions for pre-IPO investors expire. Traders who doubt there is sufficient demand for the deluge of extra equity are cashing out now as a result, market participants say.

2. After reducing their hiring last year, firms with jobs exposed to AI are planning to increase their entry-level hiring this year, but they come with a "seniorisation". 

Candidates for starter roles in the most AI-exposed industries are now expected to show a mastery of the skills traditionally demanded of more seasoned staff, such as data-driven decision-making and people management... Eleanor Lightbody, CEO of Luminance, which develops AI for the legal profession, says these middle layers could be squeezed out altogether, “because we are going to hire more juniors, who are really going to understand how AI works, and more seniors [are] staying in the business because [by using AI], they can be more productive and have more capacity”. The challenge for job seekers is that it is hard to find entry-level jobs that allow them to develop the higher proficiency that seniorised roles now require... Reliance on AI is increasing the demand for distinctively human “soft skills” — or “power skills”, as some are now calling them — such as creativity, empathy, judgment and networking ability. PwC’s jobs report found that new tasks added to job adverts for AI-exposed roles were two and a half times as likely to call for such capabilities.

3. Very good description of how China became so dominant.

It enticed unsuspecting giants such as Apple, Tesla, Motorola, and Lucent with low-cost logic. When sufficient local manpower was trained, subcontractors developed, and stakes became important, China applied the squeeze. China would break contracts, cancel licences, coerce the transfer of technology, control pricing, withdraw incentives, force equity participation, conscript technology and evict them. Huawei, BYD, CATL, and SAIC are some examples of the resulting indigenous giants that emerged. In an act of silent invasion, conscripted technologies have been converted into military capability. It is dominant as a supplier of several raw materials, such as rare earth minerals, gallium, graphite, and lithium; a dominant buyer of soya from Brazil and iron ore and wines from Australia; a financier of BRI projects; and a provider of processing technologies for Chilean copper and lithium in select South American countries. With this web of dependencies, it can choke several factories.

4. Janan Ganesh feels that for Britain to start making real reforms, the incoming PM Andy Burnham must do more welfare and subsidies and discredit the whole .ideology.

What is the precedent for a rich democracy doing pre-emptive economic reform? Which nation ever made controversial structural changes — involving winners and losers — to prevent a crisis, rather than in response to one? Southern Europe needed the Eurozone panic of 2009 onwards to make spending cuts. Hawke, Keating, Margaret Thatcher and Ronald Reagan were reacting to 1970s stagflation. François Mitterrand in 1983 was reacting to a market shock that to some extent he’d created. Reform only happens when it absolutely has to happen. So try again, prime minister. Fail again. Fail worse.

5. Japan embraces a more proactive government-driven economic growth policy.

Sanae Takaichi's cabinet approved a policy blueprint that targets a combined $2.3tn of public and private sector investment between now and 2040 in 17 chosen sectors. Ministries will be able to make budget requests without upper limits; budget construction, according to the document, will be “fundamentally” changed. Much of the blueprint is about economic security, but a refreshingly large amount is about growth... possibly the most meaningful lines in the new strategy place Japan’s future efforts in the global context. “Among advanced countries, there is a big trend of the government and private sectors working together on large-scale, long-term industrial spending,” it read... The government would strive, the document further promised, to meet the challenges of “the era of great global competition between industrial policies”... 

On the same day that the blueprint was agreed, the Ministry of Economy, Trade and Industry produced separate guidance for growth investment — an effort to encourage Japan’s 4,000-odd listed companies to shift more of their endeavours towards growth and a witheringly blunt critique of how matters are at the moment. Within Japan’s 350 largest companies (by sales), 65 per cent of invested capital remains locked in what it calls value-destructive segments, according to METI’s research. In the US, the equivalent ratio is 39 per cent. Both Takaichi’s blueprint and the new METI guidelines are attempting a new version of industrial policy that not only seeks to spur growth, but places a huge bet on the government’s ability to encourage companies in a way that market forces have not.

6. Kevin Warsh is trying to scale down forward guidance

“Financial market prices are probably the most important source of information to guide central bankers,” he said at his inaugural press conference last month. “But when all the financial markets are doing is reflecting back what we’ve said, then we’re taking the most important source of information and we’re being blind to it.” Many agree with the Fed chair’s view that central banks’ focus on predictability has led to a world in which markets obsess more over what officials say than what is actually happening in the economy. “Forward guidance has turned markets into a mirror,” says Ajay Rajadhyaksha, global chair of research at Barclays. “The Fed watches markets; markets watch the Fed. And no one’s actually watching the economy.”...

Recent research by the US central bank suggests its decisions also have an outsized impact on equity markets, leading to big changes in how investors price stocks. Advocates of forward guidance say it helps avoid the sort of surprises for the markets that feed overall volatility and eventually raise borrowing costs as investors demand greater compensation to stomach market swings. Warsh and his allies counter that the attempt to pacify markets simply encourages greater risk-taking, damping short-term volatility but storing up bigger shocks for later. The debate is all the more important because of the backdrop: the surge in borrowing over almost two decades. Government debt around the world has risen sharply following the global financial crisis, the Eurozone crisis, the pandemic and the wars of the 2020s...

Some analysts highlight the so-called taper tantrum of 2013 — when markets were unnerved by Fed statements about its plans to shrink its balance sheet as a result of officials’ false sense of certainty. Others link the 2023 collapse of the US’s Silicon Valley Bank to central bankers’ previous pledge to keep interest rates low.

This is a very important factoid about Fed communications.

Between 1990 and 2022, an era in which the status and prominence of central banks steadily grew, US 10-year government bond yields fell by more than 7 percentage points. All of the downward moves throughout that period took place during the three days around Fed meetings, rather than in response to political events or economic data. But the relationship broke down after the Fed appeared flat-footed on inflation in 2022. The Riksbank data shows that the central bank’s meetings had little to do with the subsequent rise in yields.

An important concern for the bond markets is the sharply increased volume of Treasuries held by hedge funds that use leverage to bet on tiny differences in interest rates. 

The Fed estimates that large hedge funds’ holdings of US Treasuries doubled between 2023 and 2025, faster than the growth of the market as a whole. Such funds now own more than $2.5tn in Treasuries, according to the US central bank and US Treasury data. Such sums dwarf China’s official holdings — not an exhaustive account of the country’s exposure — which have fallen from $1tn in December 2021 to $659bn in May 2026, according to US Treasury statistics. Moreover, the Bank for International Settlements, the central bankers’ bank, has warned that the hedge funds might have to dial back their stakes in government bond markets even quicker than they arrived — a possibility it describes as one of the most troubling financial stability risks in the world today.

Then there are the other concerns for bond markets.

The Bank of England said this month that AI hyperscalers borrowed more in the first half of 2026 than in the whole of 2025. So far this year they have accumulated as much new debt as the UK government. An interest-rate surprise from the Warsh Fed might not only unsettle Treasury yields but set off a vicious circle of margin calls — when a sudden price movement in assets bought with borrowed money requires an injection of capital — and fire sales by hedge funds that could create a dash for cash.

7. A cautionary tale on the difficulty of private enterprise establishing and managing entire railway systems comes from the example of Brightline Express, which connects Miami and Orlando, and became operational in 2023.

Brightline traces its roots to 2007, when Edens’ Fortress spent $3.5bn to acquire Florida East Coast Railway, then a listed freight transport company. Its tracks spanned from north to south in the Sunshine State, and construction for what would become Brightline began in 2014, with the Orlando service beginning a decade later. In a 2024 bond prospectus, Brightline executives forecast that by 2026 they would have nearly 8mn annual riders, split roughly evenly between the Orlando-Miami route and a more local service in South Florida. That base of customers was expected to generate $700mn in revenue... Even with customer levels up 16 per cent year to date through May this year, ridership will struggle to hit 4mn this year. Operating income has at best reached break-even before debt service costs... 

The promoter Wes Edens’ Fortress wrote off its investment long ago, and it is now hedge fund bondholders who are jockeying for control of Brightline. But alongside distressed debt specialists such as Nut Tree Capital Management, Aristeia Capital and Redwood Capital Management, there are a handful of more staid asset managers including Nuveen and First Eagle also at the table. As well as corporate bonds issued by subsidiaries, the group’s debt stack includes more than $2bn of traditional municipal bonds, half of which are guaranteed by a bond insurer.

The cost of doing business in India - land prices

I blogged here, highlighting the high cost structure that Indian businesses face. This post dives deeper and examines land cost.

A comparison with peers shows that urban land is priced like that of a rich country and ends up hoarding the nation's savings, with 77% of the households parking their wealth in real estate. Mumbai ranks among the world's 20 most expensive prime markets. Industrial land across the major Indian cities is prohibitively expensive compared to peers.

An Indian manufacturer pays roughly 5–15 times more for industrial land than a Chinese counterpart in a comparable tier-2 city and 1–4 times a Vietnamese peer. 

I used Claude to generate the graphic below on the total land transaction cost across states, combining the stamp duty and registration fees and the change of land use fees for the conversion of agricultural land. While stamp duty has converged to 6-7% of land value, the total cost varies widely across states. Interestingly, the southern states have the highest transaction rates. 

Four states can’t be reduced to a clean number - Maharashtra charges a premium of 25–100% of the ready-reckoner differential; Gujarat charges on the agri/non-agri differential; West Bengal rarely grants conversion at all; and Delhi’s urban land is already non-agricultural. For these, the combined figure shown is a floor, not a total (hence the ‘+’). Maharashtra, in particular, would likely top the chart if its premium were expressible as a share of land value.

Andhra Pradesh (deemed conversion since 2018, NALA Act now being scrapped) and Uttarakhand (permission eliminated for specified categories) are the only states that have removed conversion permission as a bureaucratic step. Assam, J&K, Odisha, Puducherry and Tripura have moved to negative lists.

I then asked Claude to generate the typical cost of industrial land in some representative locations across India. The wide variations in the construction levies as a share of land value arise from the variations in the underlying land valuations (the % is higher in places with lower land values). While the state and local taxes make up 10-17% of the land value, all the land and building-related taxes make up a near-uniform ~10% of the industrial project cost (land, construction, taxes).

I did the same for residential land cost at representative locations in a few cities. Ignoring the Gurgaon outlier, the state and local taxes make up 16-26% of the land value, and all the land and building-related taxes make up 18-25% of the price paid by the homebuyer. In other words, the tax burden is a fifth to a quarter of what a homebuyer pays.

In both cases, the lower land valuations in places like Lucknow or Indore or Vizag mean that the share of the nationwide levies (GST and labour cess) is much higher. In other words, these levies bite more in the second-tier and below cities and end up eroding their comparative advantage.

A like-for-like global comparison for industrial land is difficult given the lack of data. The graphic below is a broader international comparison, using the World Bank’s last Doing Business 2020 survey, for the construction of a typical (2 storeys, 1,300 sq m, on a 929 sq m plot, valued at 50× GNI per capita) warehouse (as a % of the warehouse value) in each country’s largest business city. It measures every statutory licence, permit, inspection, utility connection, non-recurring tax and property registration fee, but importantly, excludes VAT, capital gains and the price of the land itself.

India’s statutory fee stack is middling, sitting below Mexico, Indonesia, Bangladesh, and Delhi at 2.8% is not too far from the OECD high-income benchmark of 1.5%. This questions the reasoning that Indian construction-permit fees alone make land prices uncompetitive. However, India’s manufacturing competitors like Vietnam, Thailand, Brazil, and Poland levy less than a fifth of what India does on the same measures. 

More importantly, the DB survey data excludes land price, stamp duty, conversion charges, and the GST input credit, precisely the costs that were the basis for the discussion earlier. The state’s tax share at 18-43% of industrial land cost, or 9-11% of total project cost is where the land-related competitiveness gap sits, and not in the counter fees that the WB’s DB Survey tracked.

Lessons from Spain for urban planning

Football is not the only area where we can learn from Spain. Energy transition, infrastructure construction and urban planning are some others. This one is about urban planning. 

An essay in Works in Progress examined how traditional apartments have declined across Europe, except in Spain, and the role played by late development and public policy. It also underlines how Spain uniquely got all the basics of urban planning right - land readjustment, infrastructure development, mixed-use, densification, connected street network, walkability, mass transit, and low car usage. 

This is a good description of mixed-use density in Spanish cities that promote walkability and mass transit commutes, and limit sprawl and carbon emissions. 

Spain’s cities are unusual. They are much denser, tighter, and more deliberate than other European cities, let alone North American ones. They reject picket fence for apartment block and choose balcony over front lawn. Two thirds of Spaniards live in flats, against 41 percent of Poles, 36 percent of the French, and just 10 percent of the Irish. Of the remaining third, most live in terraced rowhouses. In Spain’s cities, over four fifths of people live in an apartment. At the edge of Madrid or Valencia, dense mid-rise blocks stand beside open countryside without sprawl in between, something that has almost never happened in an English-speaking country, and that has been rare in France or Germany for a century… Spain’s settlements have some of Europe’s lowest per capita transport emissions, in part because about 70 percent of trips in Madrid and Barcelona are made on foot, tram, or metro. Almost every neighborhood is mixed use; almost all urban Spaniards live in the ‘fifteen-minute cities’ that seem like remote ideals in most affluent societies.

This is a good comparison with other Southern European cities, and even here, Spain stands out. 

Spain is not alone in Europe in having become wealthy only recently: most Southern European countries have a similar economic history. And Portugal, Italy, and Greece do share the distinctive features of Spanish urbanism to some extent, with relatively dense cities and relatively high shares of people living in apartments (46 percent in Portugal, 53 percent in Italy and 59 percent in Greece compared to 65 percent in Spain). In other ways, however, Spain is distinctive in Southern Europe. The cities of Portugal, Greece, and Southern or Central Italy are generally surrounded by ragged fringes of unplanned suburban development: their urban cores are dense in the same way as Spain’s, but their peripheries are a chaotic mixture. The transport situation is also dramatically different. About half of journeys in Lisbon and Athens are by car; in Rome, the figure is two thirds, with another substantial share on mopeds; in Nicosia, it is 85 percent, the highest of any European capital. In Madrid, the modal share of cars is below 30 percent. Cities tend to be dense all over Southern Europe, but they have not all achieved the transport outcomes that urbanists associate with density: in this respect, Spain is the outstanding model.

Public policy has played an important role in making this difference. In Britain and the US, the government develops the main arterial roads and allows development that follows the development control regulations, which results in fragmented urban forms (in terms of plot sizes and types of development). In Spain, the authorities undertake land re-adjustments like the Town Planning Schemes of Gujarat and thereby lay down clear boundaries and forms of development. 

This also means a high level of infrastructure development with a high density of roads, based on plans that connect streets and localities to promote pedestrians and cyclists.

This has yielded cities with exceptionally good infrastructure. About 28 percent of Madrid’s surface area is taken up by roads, almost exactly the 30 percent recommended by UN specialists. This compares to 21 percent in Paris, 19 percent in London and 20 percent in New York. Even Los Angeles, a famously road-heavy city, uses only 25 percent for roads. As we have seen, these roads are also more skilfully interconnected, which is indispensable for pedestrians and cyclists. 

A large road network has not detracted from policy focus on public transport. 

Despite having far superior road infrastructure, Spanish cities also have high public transport use. Around 60 percent of trips in the Madrid metropolitan area and over 70 percent of trips in the Barcelona metropolitan area are made through public or active travel, similar to other major European cities and far higher than American, Canadian, or Australian cities, which typically fall below 30 percent. In other words, Spanish cities have Los Angeles-tier road infrastructure and Paris-tier public transport access. This is paired with some of the continent’s best intercity transport. Spain has significantly more motorways than any other European country: 17,228 kilometers, versus 13,183 in Germany and 11,671 in France. It has the second-longest high-speed rail network in the world, after China.

In fact, public policy played perhaps an even more important role by keeping infrastructure construction costs low and ensuring construction was done within budget and without delays. It was able to utilise something like €200 billion in cohesion funding received from the EU between the late 1980s and 2020. 

More importantly, Spain kept costs low… Spain, combined with its non-EU injections, built 4,000 kilometers of high-speed rail, 10,000 kilometers of motorway, and numerous metros, trams, ring roads, and radial arterials, because it kept costs extremely low. It did this by maintaining good practice: flexible environmental rules (although these have since become more problematic), top-tier in-house capacity in engineering and contracting, a commitment to a steady pipeline of projects over decades, and, above all, rapid decision-making, avoiding the costly delays and redesigns common elsewhere. Another part of this was giving small areas the power to decide on and fund infrastructure, like the Madrid Metro, avoiding the ping pong between authorities seen in some high-cost countries. 

Together, this has allowed it to build metros more than 20 times cheaper than in New York City. For the price of one mile of the New York’s Second Avenue Subway extension, Spanish builders covered the entire 35-mile 1995–1999 expansion of the Madrid Metro. As a result, Spanish transport infrastructure is both abundant and cheap. Madrid’s metro underwent one of the fastest growth spurts in the worldbetween 1995 and 2007, adding around 203 kilometers of new lines to its already impressive footprint​. Barcelona has been continuously expanding its metro network since the Second World War: in a period of astonishing activity between 1990 and 2010 there were 18 separate extensions, and seven more since.

Cities including Valencia, Bilbao, Seville, and Málaga all built metro or light rail systems in the 1990s and 2000s. Madrid and Barcelona have both joined their old suburban rail lines up into Cercanías/Rodalies systems, similar to London’s Crossrail scheme but far more comprehensive (though not always well run). The upshot of this is that, despite having some of the world’s best road infrastructure, Spain still has relatively low levels of car use and ownership: the modal share of driving is low not because driving is a bad option, but because other options are so good.

Since the late 2000s, changes in laws placing a series of restrictions on buildings have adversely impacted Spanish urban planning. For example, before 2007, Spanish land was buildable by default; the same was inverted to allow housing construction only if specifically zoned by the local council. Today, in an emulation of the planning practices followed in the US and Europe, building in Spain has become extremely restrictive. 

Planning a major Spanish urban extension now depends on agreement from the municipality, the community (the regional government), the landowners, and, individually, each of the environmental, water, roads, electricity, public transportation, and social housing authorities. The result is that creating new city plans now takes an enormously long time. Creating the plan takes between six to eight years, while designing the streets and plots takes another three to seven… This is leading to high prices. Madrid asking prices are now nearly €6,000 per square meter, and Barcelona over €5,000, above Hamburg, Berlin, Frankfurt, Brussels, Milan, and Rome… But Spanish wages are low… This has left leading Spanish cities with some of the worst house price to income ratios in Europe.

Spain offers important lessons for cities in developing countries like India. Spain’s late development means that its experience has even greater relevance for us. 

Spain's cities are unusual not on any single dimension but on the combination - density, mixed use, mid-rise (not high-rise) apartments, walkability, cheap and abundant transit, high car ownership but low car use, infrastructure preceding development, and municipally planned street grids. Spain is unique in getting all the dimensions right. 

Indian cities, from metros to the lower-tier ones, are characterised by a far lower share of multi-tenement units, rigid land-use restrictions, high setbacks, poorly maintained or absent footpaths, infrastructure coming well after habitations emerge, and sorely deficient mass transit facilities (especially bus networks). 

In India, exclusive land-use zoning is the norm, with mixed-use permitted only beyond generally 15-18 m roads and above, which are present in a very small proportion of the localities. In the older areas, commercial facilities in residential areas have emerged informally over time, whereas in the planned colonies and new developments, mixed use is restricted. 

Indian cities have among the lowest share of urban households living in multi-tenement units, with Spanish cities being at the other extreme. Only 31% of urban Indian households live in flats (NSS 2018) compared to about 80% in Spanish cities, with Mumbai being the exception. The India NSS “flat” includes chawls, single-storey shared tenements, and informal walk-ups - so Indian numbers overstate what a Spaniard would recognise as a flat.

Similarly, Indian cities have among the lowest share of road network, not even a third of the UN Habitat norm. Most Indian metros are 6–12%, with only Delhi, the only Indian city with municipally planned extension, getting close.

I can think of at least a few big takeaways. Foremost, there’s no alternative to mixed-use, densified development for both greenfield and brownfield areas. 

Given its high share of detached housing, Indian cities have a great opportunity to reinvent themselves. This can be done by increasing FAR, and more importantly, doing it in a manner that allows upzoning adjacent to 9 m and 12 m roads. As I blogged here, the current upzoning deregulation, confined to plots with road width greater than 18 m, is largely superfluous. 

This must be coupled with planning norms like allowing for relaxations of setbacks, even dispensing with them and encouraging row housing, multi-tenement units, and mixed-use in terms of encouraging commercial amenities. The latter is about ensuring that people living in a locality should be able to buy their regular groceries and other household items and services from within there. Further, the local government fee and property tax regimes must consider lowering the layout development charges, building permission fees, and property taxes to encourage the realisation of these objectives. 

These policies and instruments must be deployed with a long-term perspective (as against expectations of immediate results). The objective should be that they would shape incentives and enable the gradual redevelopment of brownfield areas as densified communities. 

Second, we must use urban planning to lay down street network configurations that enable connectivity and walkability. Master plans and their development plans should keep this in mind. Minimising or even eliminating setbacks would be one step to enable such street networks. The prioritisation of walkability requires the infrastructure of footpaths and street connectivity to be able to walk, and the supply in terms of mixed-use amenities to create the demand. And all this must be combined with local campaigns to promote the culture of keeping footpaths free of encroachments. 

Third, the current dominant trend across Indian cities of the emergence of gated communities in the suburbs must be examined. These communities, while attractive for their residents and developers, go against all principles of sustainable urban development. These are largely monocultures of upper-middle and higher-income housing (the maids and drivers, and others, commute from distant places), with exclusive residential zoning, limited or no mass transit connectivity, exclusively car-based, and very poor external street connectivity (large gated enclaves with one or two entry/exit points). They impose massive negative externalities on the city and locality, while appropriating all the benefits. 

Fourth, mass transit must be at the core of all developments. All greenfield areas, in particular, must be planned around mass transit, in the form of transit-oriented development (TOD). This post discusses some principles for TOD in Indian cities, and this post outlines some of the challenges. This would require going beyond the current norm of merely giving higher FAR and offering significant incentives on fees and taxes to make it more attractive for developers to build inside the TOD zones. 

Like in Spain, the challenge is to get the combination more or less right. The good thing is that all of them lie with the states and mostly with the cities themselves. It is only required for 2-3 cities to take the lead and strike out on their own in following these principles and reinventing themselves. They can be the lighthouses that guide urban development in India. 

Weekend reading links

1. Are people overreacting to small struggles?

When asked if they would consider someone experiencing typical fluctuations in mood (described as broad happiness but occasional moments of worry, frustration or loss of confidence) as having a mental illness, more than half of young Americans say yes, up from just a fifth 15 years ago.

2. A picture of state finances.

3. The promise of quantum computing.

Quantum computers can transcend the limitations of the traditional binary computer bit, which can exist in two states, denoted by zero and one. By contrast, quantum bits, or “qubits”, can exist in both those states at once. This allows quantum machines to survey multiple potential solutions simultaneously, rather than dealing with them one by one like a conventional computer. One analogy is a maze. Where a quantum computer can examine the whole map to find a way through, a traditional machine will keep exploring dead ends until it finds the route. Quantum computers’ superior processing power should make them better able to generalise from small amounts of data and sift through multiple complex patterns...

But many companies are already experimenting with the technology because of its promised leap in capability, predicting early uses for the machines in areas such as chemistry and materials science. The idea is that because of their own workings and structure the computers will be better able to analyse and predict chemical behaviour determined by atomic and subatomic interactions governed by quantum rules. In a sense, they will be speaking the same language rather than translating an analysis into a string of ones and zeros as a traditional computer does. As a result, a sufficiently powerful quantum machine should in theory be adept at predicting the interactions between drugs and living cells that determine whether a new pharmaceutical will work. Such possibilities have already led tech companies to pair up with industrial groups.

4. India's trade account in a nutshell.

In 2025-26, its exports of services, at $421.3 billion, was close to the export of goods worth $446.1 billion. On the other hand, imports of goods ($783.4 billion) were way above the imports of services ($204.7 billion). Thus, while India recorded a merchandise trade deficit of $337.3 billion, it had a surplus of $216.6 billion on the services account.

5. Brilliant article by Simon Kuper on how football came to be dominated by Western Europe.

Western Europeans didn’t start by asking, “How can we win the World Cup?” Instead, they pursued a different goal: making amateur football cheap and widely available. The intended outputs were happiness, community and public health. Winning World Cups was a byproduct... I began playing football aged six, in 1976, after moving from London to Leiden in the Netherlands. Most Dutch boys I met belonged to a football club... The little Leiden region had dozens of football clubs. Some fielded 20 senior teams, seven teams of under-eights and so on. Many people built their identity and social life on being the right-back or linesman of the 14th team. The Netherlands in the 1970s reached two World Cup finals. Everyone played and understood how to play. Football is geometry — about creating space when you have the ball, and shrinking it when you don’t. That knowledge is all around you in western Europe, unlike in Asia, Africa, the US or Brazil... In 2017, the average Dutch person lived 1.6km from a football field. Neighbouring Germany’s football federation is the world’s largest sports association, with more than 7.7mn members...

As a father, I raised three footballers in Paris, now the game’s deepest talent pool. Almost all Parisian suburbs, or banlieues, have well-kept sports complexes, with artificial fields, used nonstop: at half-time of any amateur game, children storm on to the field for a kickaround. So structured is the system that my son had to earn a coaching diploma to train his little club’s under-eights. His own beloved coach, Mustapha Sangaré, who only joined a football club aged 15, now plays for Bulgaria’s Levski Sofia and Mali. He is far from an anomaly: almost 100 players across all squads in the current World Cup were born in France and just under 70 in the Netherlands.

In another article Tej Parikh looks at why China and India does so badly in football.

This is a striking statistic, pointing how globalised football has become and how the leading European clubs have become the feeding grounds for national teams. 

At this World Cup, more than 72 per cent of players appear for a club outside the country of their national team, and almost one in four are foreign born. (More than half of Cape Verde’s squad was born outside the nation and ply their trade in various European leagues.)

6. In what will prove to be a dramatic decision, DP World, which operates the Jebel Ali port that has been paralysed by the closure of the Strait of Hormuz, is reportedly planning to build a new port and a container terminal on the UAE's eastern coastal area of Fujairah. 

Shifting some of the port’s capacity outside Dubai marks a seismic change for the emirate, which has established itself as a global trade and finance hub partly off the back of Jebel Ali’s growth... But DP World’s plans align with a broader UAE government initiative to attempt to bulletproof its economy against future hostilities with Iran by reducing its dependence on the strait, where shipping has been disrupted by Iranian drones and missile strikes since the US-Israeli attack. The new project would deepen DP World’s presence on the Gulf of Oman, allowing containers to enter and leave the country without having to pass through the strait, before moving them on trucks overland to Dubai, Abu Dhabi and neighbouring Gulf countries. Since the war began at the end of February, Iran has fired nearly 3,000 drones or missiles at the UAE — more than any other country... DP World’s plans underline how the Iran war has forced governments and companies in the region to reconsider infrastructure and economic corridors developed on the premise that there would be uninterrupted passage through the strait.

7. Rote memorisation in schools is celebrated in China.

The guidelines to the gaokao, an exam for 18-year-olds and the world’s largest standardised test, describe memorisation as “the most basic level of ability”, placing it first among six traits that include comprehension, analysis and synthesis, appreciation and evaluation, expression and application, and inquiry. At the simplest level, the Chinese script itself, which operates at the level of the syllable and involves thousands of individually meaningful characters, requires years of memorisation... It is hard not to draw a contrast with the English-language west, where rote memorisation has taken on a faintly pejorative meaning. More than a century and a half ago, at the height of Britain’s industrial age, Charles Dickens was skewering the “facts alone are wanted in life” approach of fictional educator Gradgrind in the novel Hard Times.

8. Trump's makeover of the US State Department. 

Abandoning the precedent of the past 60 years, Trump has brushed aside the foreign service officers who have typically run at least two-thirds of embassies. Of the 101 nominations for ambassadorships in his second term, just nine were career diplomats. All this is against the backdrop of swingeing cuts to the department, whose workforce has shrunk by more than 3,000, over 20 per cent, since Trump resumed office.

9. China's remarkable success in reducing air pollution by 60% since 2013. 

10. Interesting that the IT sector explains half the difference in productivity growth between the US and EU.

Strikingly, even though the tech sector was only 9.2 per cent of US GDP, against 5.4 per cent of the EU’s, almost half of the difference in productivity growth between the two economies was explained by differences in the relative size of this one sector. Moreover, productivity growth in the EU’s (relatively small) tech sector was also measured as being lower than in the US one. So, overall, the tech sector alone accounts for well over half of the overall difference in growth of GDP per head.

This is important

Life expectancy for US men was 76.5 in 2024, against an average of 80.5 in comparable high-income countries. For women, it was 81.4 against 84.8. That is despite spending a far higher proportion of its GDP on health. The US homicide rate was 5.9 per 100,000 in 2023, against 1.3 in France and 0.9 in Germany. Its prison population was 542 per 100,000 in 2023, against 130 in France and 69 in Germany. Thus, if one takes a wider view of human welfare, the US is very far from superior.

11. China reports the lowest quarterly growth rate in decades at 4.3% for the second quarter of 2026. Industrial production and exports are propping up growth, even as consumption declines.

Retail sales added just 1 per cent in June from a year earlier, while fixed-asset investment was down 5.7 per cent year on year for the first half of the year, compared to 4.1 per cent in the first five months. Industrial production, one sign of strength, grew 5.3 per cent last month on a year earlier... Separate data on Tuesday showed exports soared 27 per cent year on year in June, adding to signs of reliance on trade to support economic activity... Julian Evans-Pritchard, head of China economics at Capital Economics, noted that the GDP data brought it “closer in line” with the consultancy’s alternative measure, which has been around 3 per cent.

Underlining the importance of exports, there was a surge in China's EV exports in June.

China’s monthly car exports rose to a record 1mn cars in June as part of an overall surge in trade that will heighten tensions with partners such as the EU. Shipments of cars rose 71.2 per cent from a year earlier to 1.06mn, putting the country on track to export more than 10mn cars this year, up from 7.1mn last year and more than double the 4.9mn in 2023. The surge in exports comes as domestic sales slow sharply following the phaseout of EV subsidies and a decline in demand for fuel-powered cars... The wave of Chinese exports has been driven by lower-cost cars boasting superior software, further threatening carmakers from Japan, South Korea, Europe and the US... China’s exports of rare earths in June fell 34 per cent year on year and 6.4 per cent in the first half, following tight export controls on the minerals, which are essential for high-technology products... The NBS’s Wang said China’s exports of green energy-related products such as lithium batteries and wind turbines increased 37.6 per cent and 35.6 per cent, respectively, during the first half.

And this highlights how production and exports have sustained growth.

Industrial production rose by 5.4 percent in the first six months of the year, versus the same period last year. High-tech manufacturing rose by more than 13 percent over that period. But fixed asset investment — which includes infrastructure, property construction and manufacturing — fell by 5.7 percent. Real estate development dropped 18 percent. The value of China’s exports surged by more than 20 percent in the first half. But consumer spending, which a Moody’s Analytics report said “remains the economy’s weakest link,” faltered. Retail sales of consumer goods increased by 1.3 percent over the first half of the year.

12. Ruchir Sharma holds that peak China was reached in 2021, and since then it has been a story of decline, papered over by exports and AI.

Since then, China’s share of global GDP has fallen in nominal terms from 18 to 16.5 per cent, while the US share has risen to 26 per cent. China’s growth rate has dropped below the rest of the world, including the US. In real terms, independent estimates now put China’s growth in real terms closer to zero than to the official target of 4.5 to 5 per cent... China’s population also peaked in 2021. Last year, births hit a record low, and deaths hit a record high. The working-age population is on pace to shrink by 75mn every decade this century... After adding little in the 2010s, net exports now account for about a third of the country’s growth, driven mainly by AI-related goods... And though every country now hopes for an AI-driven productivity miracle, the expected boost in China is about a third of a percentage point by 2030, hardly enough to halt its decline.

13. India agriculture statistics

If one looks at the growth areas in agriculture in the 12 years between 2011-12 and 2023-24, production of paddy and wheat rose by just 27 per cent. Fruit and vegetable production rose by 52 per cent, and milk production by 85 per cent, even though they did not receive any substantial support by way of subsidies or minimum support price procurement by the government. The true growth areas in agriculture are out of direct central government support and depend largely on producer enterprise... In 2023-24, the value of output of cereals (mainly paddy and wheat) was ₹8.5 trillion, while the value of the largely cooperative-controlled milk sector was ₹12.2 trillion.

14. Outbound corporate investments from India on the rise.

Indian companies have announced overseas equity investments worth more than $14bn in the first four months of the fiscal year that began on April 1, compared with $18.7bn in the previous 12 months. The outflows come as foreign investors flee India’s markets at the fastest pace ever this year, pulling out more than $23bn as of the end of June over a lack of AI champions.

15. Simon Kuper on Lionel Messi.

On the field, Messi sees everything. All his career, he ignored the ball for the first five minutes and instead walked around, memorising the position of each opponent and the spaces between them. But now he spends almost the entire game walking and scanning. When he breaks into a run, his teammates know he has seen an opening. They play to serve him. When he moved to the right wing against Egypt, seeing space there, the team remade itself around him. Argentina, two goals down after 78 minutes, won 3-2. Scaloni said afterwards: “We were not the ones who told him to go out to the right.” Messi moved right again against England and again Argentina came back to win.

16. The AI-boom is spilling over to energy sector.  

Initial public offerings for energy firms raised $12.6bn in the first half of this year, according to data firm Dealogic. That marks the highest half-year level since the peak of the dotcom bubble in late 1999 and the highest first-half figure on record. It is well above 2025’s full-year total of $4.3bn. The surge in fundraising comes as access to the vast amounts of energy needed to run data centres emerges as a bottleneck in a multi-trillion-dollar AI investment boom... US electricity demand is projected to increase 39 per cent between 2026 and 2035, according to consultancy ICF, in large part due to ballooning demand from data centres...

Companies that have been able to raise money on public markets include those involved in complex, capital-heavy projects such as nuclear and geothermal power plants, while investors have also been willing to back businesses trying to develop new technologies... “This is a moment in which speculative projects are being funded and underwritten,” said Julien Dumoulin-Smith, a Jefferies research analyst covering power, utilities and clean energy. “They’re not just limited to venture capital or private equity.”... Nearly two-thirds of the energy companies that floated this year and last are now trading below their offer price, according to Dealogic. That compares with less than 40 per cent of IPOs across all sectors that are underwater.

And Wall Street Banks are already AI trades. 

Four of the five big Wall Street banks reported yesterday: JPMorgan Chase, Bank of America, Citigroup and Goldman Sachs (Morgan Stanley chimes in today). The numbers were outstanding, as one would expect in a quarter when markets whipped around and big deals were done. In aggregate, equity and debt trading revenue at the four hit $38bn, up more than a third from a year ago and 60 per cent higher than two years ago. Investment banking fees, at $10bn on the quarter, have grown almost as much... It is AI that has markets churning and drives capital-raising. The banks are another example of the false “broadening” of the stock market that has also driven up industrial and utility stocks in the past few years. All these sectors have lived, and could die, with AI.

And their profits are not confined to the US, with even Asia becoming a major source.

Equities trading in Asia is helping power a record-breaking run from Wall Street’s banks, with the region on course to surpass Europe as the industry’s second-largest source of revenue behind the US. In the past 12 months, clients of large investment banks have ploughed into companies in Asia that provide critical infrastructure to the AI semiconductor industry, including South Korean SK Hynix, Taiwan’s TSMC and China’s Cambricon Technologies... In the most recent quarter, the largest investment banks collectively reported an unprecedented $25.7bn in earnings from equities trading and called out Asia as a crucial factor in the growth.

17. Even by the low standards of Trump 2.0, this is surely an outrageous example of private profiteering from public office. 

Donald Trump’s social media company has discussed charging traders and investors as much as $100,000 a month for faster access to the US president’s posts on his Truth Social platform. Trump Media & Technology Group (TMTG) has quoted the six-figure monthly sum in talks with prospective buyers of the “Truth API” data service, according to people familiar with the matter. Proprietary trading firms and hedge funds pay huge sums for ultrafast data feeds because every millisecond counts when reacting to market-moving news. Trump often makes major announcements on Truth Social that trigger huge fluctuations across global markets... TMTG, which is majority owned by the Trump family, controls Truth Social...

A pitch sheet circulated by TMTG to promote Truth API, seen by the FT, lists 10 “documented market-moving posts” from the president’s Truth Social account. On April 9 2025, for example, the document says Trump’s “THIS IS A GREAT TIME TO BUY!!!” post “restored” $4tn to the market capitalisation of the S&P 500. Trump’s post in early June that the US would hit Iran “very hard tonight” caused a 6 per cent intraday jump in oil prices, the document says. “When @realDonaldTrump Truths, the world reacts,” the document continues. “No comparable signal exists. No official API has ever been offered. Until now.” Trump has also touted specific stocks, complimenting companies such as Nvidia and Apple and fuelling rallies in their share prices. More recently after the outbreak of the war with Iran, Trump posted on March 23 that there had been “very good and productive conversations with Iran”, sending oil prices falling sharply.