Reflection of the day
2025.11.05
The present unusual high market concentration of the US equity market should be worrying investors in our opinion . The reason for this is the dominance of stocks related to artificial intelligence.
​
They now account for almost 50% of the capitalization of the S&P 500. Never before a particular sector accounted for such a high concentration in the index. Anyone who invests in the index is exposing themselves to a concentration risk that is historically unprecedented for broadly diversified investors.
2025.10.31
“No one went broke by taking profits “
2025.09.08
Pax Americana - quo vadis?
Threatened in their status as the world's leading power by China's secular rise, the United States elected a president twice who promised to restore the old order: Make America Great Again, short: MAGA
But, in a cruel twist of fate, the measures taken by the new US administration are actually accelerating this DECLINE in relative terms.
A DECLINE that could have been in the cards and been antecipated.
Take the background and education of the US senate and congress: LAWYERS
Take the background and education of China’s politburo members: ENGINEERS
Instead of striving to maintain its global influence by keeping other countries dependent on it and consolidating the old order that was favourable to it, Washington is now methodically turning the rest of the world against it, including both historical allies and traditional competitors.
Larry Summers, former US Treasury Secretary, summed up the current paradox on Bloomberg Television: “The classic maxim of a foreign policy is to unite your friends and divide your adversaries. But the US and its president pursued policies that have succeeded in uniting our adversaries and dividing our friends.”
2025.07.15
THE WORLD DOES NOT REVOLVE AROUND THE WHITE HOUSE….OR DOES IT?
John Authers/Bloomberg edited
It’s been hard of late to avoid the impression that the world revolves around Washington, DC — or more recently, Anchorage and Jackson Hole. The Trump 2.0 agenda, now barely contested as it comes into force, is the most radical change in US policy for at least a generation, and isn’t happening in a vacuum. It also has effects beyond US borders. Many other countries are near tipping points of their own that could determine whether the American attempt to remold the global financial system can work. Here is a Points of Return tour.
​
Europe
​
The euro is rallying, by far more than many realize. On a broad basis, and taking into account inflation (generally lower in the euro zone for much of the last 25 years). In 2010, the bloc plunged into a sovereign debt crisis following the revelation of a Greek budget shortfall far greater than previously known. After 15 years, confidence in the currency has finally recovered from that existential challenge:
A big component of euro strength is the growing belief that US political pressure on the Federal Reserve to cut rates will be successful — a theory that looks all the stronger after Trump announced Monday night that he was firing Fed Governor Lisa Cook — even though inflation there has started rising again. That has reduced the differential between US and German 10-year real yields (accounting for inflation) to the lowest since the end of 2021, when the Fed was about to start hiking. If it follows through as the administration hopes, that will weaken the dollar (a White House priority) and further weaken the competitiveness of the goods Europe exports to the US:
Can Europe live with this? Germany this year saw the installation of a coalition between the center-right Christian Democrats and center-left Social Democrats after a knife-edge election. Their announcement of a change to budget rules to allow a bigger deficit to finance infrastructure and defense spending received an emphatic welcome. But this was from a totally demoralized starting point. The latest IFO survey of German business expectations shows the strongest reading since 2021 — but remains lower than at any point in the decade before the pandemic.
2025.08.17
There are parallels between Trump and President Xi Jinping: the blind loyalty of their base, the demonization of foreigners and a willingness to foment unease among immigrants and minorities by threatening their status within society. It appears as in the US we are faced with authoritarianism without the good stuff. The good stuff being things such as high-speed trains, well-functioning cities, and political and economic stability.
​
The United States needs to study China if it’s going to remain a superpower(Wang - Breakneck: China’s Quest to Engineer the Future. But it needs to learn the right lessons — including, most importantly, how to build.
​
In Breakneck, Wang argues that the key difference between the two giants is that China is run by engineers — in 2002 all nine members of the Politburo standing committee had engineering backgrounds — whereas the US is run by lawyers. China prioritizes building colossal public works such as bridges, dams and airports, as well as products like toys and iPhones. The US excels at making and enforcing rules.
​
“Food for thought”
2025.07.15
Saying Goodbye to Gas-Guzzlers
​
Electric vehicles are set to outsell conventional gasoline cars in China on an annual basis for the first time this year, driven by the rising popularity of plug-in hybrids, advances in charging and the extension of trade-in subsidies. In the first six months of the year, sales of new-energy vehicles — which include battery-electric, plug-in hybrid and extended-range electric cars — reached 5.5 million. That was just over 50% of the 10.9 million vehicles sold in total, according to data from China’s Passenger Car Association. At an event last week, Fu Bingfeng, the secretary general of the China Association of Automobile Manufacturers, said that sales of EVs and hybrids are projected to reach 16 million units this year and exceed 50% share.
While sales of EVs and hybrids first ticked above 50% on a monthly basis in July last year, they were unable to climb above the threshold for all of 2024. Battery-electric vehicles accounted for 28% of new-car sales last year, according to the PCA.
Source: Bloomberg