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AI Summary. The direct lending market is roughly $2tn, or about 3% of total US household and business debt outstanding, compared with mortgages accounting for about 60% of total household and corporate debt at the peak of the housing bubble.
Core argument: The direct lending market totals roughly $2 trillion, about 3% of total debt outstanding for US households and businesses.
The direct lending market is roughly $2 trillion, or about 3% of total debt outstanding for US households and businesses. By comparison, mortgages accounted for about 60% of total household and corporate debt at the peak of the housing bubble in 2006.AI Summary. An analysis of Federal Reserve data found the top 10% of US earners accounted for 49.2% of total consumer spending, up from 48.5% the prior quarter and the highest share in data going back to 1989. Spending by the bottom 80%, those making under roughly $175,000, has merely kept pace with inflation.
Core argument: The top 10% of US earners accounted for 49.2% of total consumer spending in the second quarter, up from 48.5% in the first quarter and the highest share in data going back to 1989, according to Mark Zandi's analysis of Federal Reserve data.
Consumers in the top 10% of the income distribution accounted for 49.2% of total spending in the second quarter, up from 48.5% in the first quarter, reaching the highest level in data going back to 1989, according to an analysis of Federal Reserve data by Mark Zandi, chief economist for Moody’s Analytics. In contrast, the bottom 80% of the income distribution, or consumers making less than roughly $175,000 a year, have seen their spending merely keep pace with inflation since the pandemic.AI Summary. Regrouping US college majors to match Chinese disciplines yields a 2:1 ratio of science and engineering to humanities and social sciences, the same ratio as in China. The author argues America's building slowdown reflects structural economic shifts—urbanization reached 70% by 1960 and 85% by 2020, shifting needs toward maintenance—rather than a lawyerly culture.
Core argument: Regrouping US college majors according to Chinese disciplines yields a 2:1 ratio of science/engineering to humanities/social sciences, the same ratio as in China when management is grouped with science/engineering in both.
Dan Wang’s “big idea” [is] “China is an engineering state, building big at breakneck speed, in contrast to the United States’ lawyerly society, blocking everything it can, good and bad.” I re-group US college majors according to Chinese disciplines to allow for rough comparison. Surprisingly, the ratio of science/engineering to humanities/social sciences is 2:1, the same as in China (if one groups management with science/engineering, as I also do for China). As with China today, America’s breakneck building phase was decidedly winding down by the 1960s. Urbanization went from 40% in 1900 to 70% by 1960, and grew much more incrementally over the next 60 years to 85% by 2020. The country simply did not need to continue building dams, expressways, and energy production facilities at breakneck pace. It became much more a matter of maintaining and upgrading (which has not gone well, at least according to the American Society of Civil Engineers’ report card). The American [building/investment slowdown that started after the 1970s] may be more about structural economic shifts than lawyers.AI Summary. About a sixth of America's 2% real GDP growth over the past year came from investment in computer and communications equipment and data centres, and one estimate puts the artificial intelligence boom's total contribution to growth at 40%. Average electricity bills rose 7%, attributed in part to data-centre demand, while housebuilding and non-AI business investment slumped and real consumption flatlined.
Core argument: Roughly a sixth of the 2% rise in American real GDP over the past year came from investment in computer and communications equipment, including chips, and data centres; one estimate puts the AI boom's contribution at 40% once grid upgrades and software intellectual property are included.
Something like a sixth of the 2% rise in American real GDP over the past year has come from investments in computer and communications equipment, including chips, and data centres. Add in the grid upgrades to power AI models, plus the intellectual-property value of the software itself, and one estimate puts the boom’s contribution to real GDP growth at 40%. The trouble is that the very sector powering so much of America’s economic growth is squeezing the rest of its output. Housebuilders, for instance, cannot afford to be blithe about higher borrowing costs. Data centres have also constrained the rest of the economy by keeping energy prices high. Average American electricity bills have risen by 7% so far in 2025, at least in part due to the extra strain data centres have put on the grid. Real consumption has flatlined since December. Housebuilding has slumped, as has non-AI business investment.AI Summary. Benchmark scores show only modest capability gains in the latest large language model releases compared with the larger jump seen two generations earlier, alongside a broader convergence in performance across competing AI models. Commentators attribute this to inherent limits of the technology and the exhaustion of new training data, raising doubts that the spending on AI hardware is justified.
Core argument: GPT-5 users widely expressed disappointment with the release, which seemed in some ways a step back, and benchmarks show only modest capability gains since the significant improvement delivered by version 4 two years earlier.
GPT-5 users widely expressed disappointment in the capabilities of the new release, which seemed in some ways a step back. This sentiment is reflected in benchmarks that show a modest improvement in capabilities since the significant improvement in version 4 released two years ago. In addition, the benchmarks suggest a broader convergence in the capabilities of AI models. Commentary suggests this could be due to inherent limitations in the LLM technology and exhaustion of new training data. AI is fascinating technology, but it may not justify the enormous sums spent in its pursuit. It is looking more like companies are spending hundreds of billions on rapidly depreciating GPUs that produce a commoditized product that most clients only modestly benefit from. The entire macro landscape would look very different without the support of the AI boom.AI Summary. Household and banking sector leverage in the US have declined significantly since 2008, while corporate leverage has moved sideways and federal government leverage has risen significantly. On this measure, the US private sector is in strong financial shape.
Core argument: US household sector leverage and banking sector leverage have both declined significantly since 2008, leaving the US private sector in what the author characterizes as incredibly good shape.
Household sector leverage and banking sector leverage have declined significantly since 2008. Over the same period, federal government leverage has increased significantly, and corporate leverage has moved sideways. The bottom line is that the private sector in the US is in incredibly good shape.AI Summary. The authors of an Institute for New Economic Thinking paper estimate that wealth gains among the top 10% of US households were large enough to explain the rise in total consumer spending above its longer-term trend, sustaining their spending even as their inflation-adjusted incomes shrank.
Core argument: Americans earning more than $250,000 a year account for half of all US consumer spending, up from about one-third in the 1990s, according to a Moody's Analytics analysis.
The increase in wealth experienced by the top 10% of households from 2020 to 2023 was almost without precedent, according to a paper published in May by the Institute for New Economic Thinking, enabling this cohort of “super rich” to keep spending even as their real incomes shrunk when adjusted for inflation. Gains among the wealthy were large enough to explain the rise in total consumer spending above its longer-term trend, according to the authors, economists Thomas Ferguson and Servaas Storm. A recent analysis by Moody’s Analytics found that Americans earning more than $250,000 a year now account for half of all US consumer spending, up from about one-third in the 1990s.AI Summary. The Covid-19 pandemic left a visible break — a spike, dip, or jolt — in data series across the economy, health care, education, work, and family life that will remain identifiable in historical records for decades.
Core argument: A collection of 30 charts shows the Covid pandemic, which officially began for Americans five years ago this week, as an unmistakable spike, dip or jolt across the economy, health care, education, work and family life.
Decades from now, the pandemic will be visible in the historical data of nearly anything measurable today: an unmistakable spike, dip or jolt that officially began for Americans five years ago this week. Here’s an incomplete collection of charts that capture that break — across the economy, health care, education, work, family life, and more.