Edward Conard

Top Ten New York Times Bestselling Author

  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Monday, October 27, 2025

AI Summary. Chinese banks' external fixed-income assets more than doubled over the past decade to over $1.5tn, with the renminbi-denominated share reaching almost $484bn, including $360bn of renminbi loans and deposits, up from $110bn. The renminbi's share of global trade finance quadrupled over three years to 7.6%, second only to the US dollar.

William Sandlund and Haohsiang Ko Financial Times
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External renminbi loans, deposits, and bond investments have quadrupled over the past five years to $484B, approaching a third of China’s $1.5T of overseas fixed-income assets. Much of the expansion is in the form of trade finance.

Is renminbi lending abroad growing as China promotes its currency?

Core argument: External fixed-income assets of Chinese banks more than doubled over the past decade to more than $1.5tn, with the renminbi-denominated share reaching almost $484bn at the end of June, according to China's State Administration of Foreign Exchange.

Recent data from China’s State Administration of Foreign Exchange shows the external fixed-income assets of Chinese banks more than doubling over the past decade to more than $1.5tn, with the share denominated in renminbi expanding rapidly to almost $484bn at the end of June. This includes $360bn of renminbi loans and deposits, up from $110bn in 2020. A big part of the expansion in renminbi lending has been in trade finance. Data from cross-border payments system provider Swift shows that the renminbi’s share of global trade finance quadrupled over the past three years to 7.6% in September, making it the second most-used currency in trade finance after the US dollar.

Takeaways by Macro Roundup® AI

  1. External fixed-income assets of Chinese banks more than doubled over the past decade to more than $1.5tn, with the renminbi-denominated share reaching almost $484bn at the end of June, according to China's State Administration of Foreign Exchange.
  2. Renminbi loans and deposits included in those external assets rose to $360bn from $110bn in 2020, with much of the expansion in renminbi lending occurring in trade finance.
  3. The renminbi's share of global trade finance quadrupled over the past three years to 7.6% in September, making it the second most-used trade finance currency after the US dollar, according to Swift data.

Related Articles:

  • A New Driver of China’s De-Dollarization — Chinese banks have shifted their trade financing toward the renminbi, which now accounts for 72% of the roughly $250bn of Chinese trade credit extended since 2017, up from 17% of about $150bn during 2017-2021. The dollar share of Chinese trade credit is falling, and dollar trade credit provision may be negative.
  • China FX Diversification and the Dollar — The dollar's share of China's cross-border transfers has fallen from 80-85% to 40-45% over roughly 15 years, with the decline driven mainly by higher renminbi flows, and the renminbi's share of global trade financing has risen from about 2% to over 7%. China's foreign exchange reserve composition and onshore trading remain dollar-dominated.
  • China Emerges From Trade Chaos With Record Exports, Surplus — China posted a record half-year trade surplus of about $586bn, with exports up 5.8% year-over-year to $325bn and imports up 1.1%. Shipments to the US fell 16.1% from a year earlier, while exports to the 10 Southeast Asian nations in the Asean group rose 17%.

AI Summary. Headline inflation rose to 3%, the top of the Federal Reserve's target range, but shelter prices dipped far more than expected as the gap narrowed between official rental measures and private indexes based on recently signed leases. The direction of core goods and food prices, most exposed to tariffs, remains troubling.

John Authers Bloomberg
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John Authers notes it is almost “certain” the Federal Reserve will cut the FFR this week, though September headline and core CPI inflation both came in at a 3% annual rate. Rental inflation continues to fall, but further pressure from tariffs looms.

Does falling shelter inflation justify a rate cut despite 3% headline inflation?

Core argument: Headline inflation rose to 3% in the delayed September report, the very top of the Federal Reserve's target range, yet the universal conclusion from the data was that the Fed will cut the fed funds rate this week.

It looks as if we can be certain that the Federal Reserve will cut the fed funds rate this week. That was the universal conclusion from the delayed inflation report for September, and it’s doubtless correct — even though the headline rose to 3%, the very top of the Fed’s target range. The big reason for optimism came from rental inflation, whose measurement is controversial as it comes with a long lag because it averages all leases signed over the previous 12 months. The disparity with the private sector indexes that are based only on the last month’s leases, such as Zillow’s, is reducing, and shelter prices dipped far more than expected. The disparity with the private sector indexes that are based only on the last month’s leases, such as Zillow’s, is reducing, and shelter prices dipped far more than expected. If the Fed was prepared to cut in September despite somewhat elevated core readings, this report offers no reason to desist from a cut this week — although it will need to be careful to avert the growing impression that its true target has now risen to 3%. If there are problems, they come, inevitably, from tariffs (of which much more is below). The direction of travel for core goods (most directly affected by levies) and food is troubling, even if both still contribute far less to overall inflation than services does.

Takeaways by Macro Roundup® AI

  1. Headline inflation rose to 3% in the delayed September report, the very top of the Federal Reserve's target range, yet the universal conclusion from the data was that the Fed will cut the fed funds rate this week.
  2. Shelter prices dipped far more than expected, and the gap between official rental inflation, which averages leases signed over the prior 12 months, and private indexes based only on the last month's leases, such as Zillow's, is narrowing.
  3. Core goods, the category most affected by tariffs, and food show a troubling direction of travel, though both contribute far less to overall inflation than services.

Related Articles:

  • Are We Heading For A New Inflation Surge? — The analysis finds post-pandemic headline and core inflation closely tracking the pattern of the early 1970s, with the spike in each case taking about three years to be brought under control and followed by roughly 18 months of relative stability. If the parallel holds, a renewed inflation flare-up would be expected.
  • Data Update 4 for 2025: Interest Rates, Inflation and Central Banks! — Interest rates are ultimately driven by macroeconomic fundamentals, with an "intrinsic risk-free rate" defined as the sum of the inflation rate and real GDP growth tracking the observed 10-year Treasury bond yield closely. On this view, central banks' influence comes from preferential access to data on those fundamentals, their capacity to alter them, and their credibility.
  • A New Era of Higher Inflation Risks — The authors argue inflation's baseline is now higher than pre-pandemic, with 2% acting more as a floor than a ceiling, noting disinflation has largely stalled and core inflation has run above target on a six-month annualized basis for five years. They expect a structurally wider range of inflation outcomes, skewed to the upside and centered higher than in the 2010s.

AI Summary. A large retailer reports that pre-tariff inventory is still being sold, so tariff costs will show up as margin hits later, and that prices must eventually rise roughly 10–15% to cover them. The retailer says its sector's tariff rate went from about 12% to about 33%, and that retailers are holding prices through the holiday season before raising them.

John Cochrane The Grumpy Economist
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Cochrane relays an exchange with a CEO of a large retailer. “We have to raise prices roughly 10–15% to cover tariffs. [We] will start to see the margin hits a little in Q3 and a lot in Q4. But…we are all trying to hold prices through the key holiday.”

Are retailers delaying tariff-driven price increases until after the holidays?

Core argument: A large retailer's CEO says tariff rates in his sector rose from roughly 12% to about 33%, requiring price increases of roughly 10–15% to cover the tariff cost.

I had an interesting correspondence with the CEO of a fairly large retailer, "[inflation is] coming, and it’s a tidal wave for the American consumer. All tariff pauses just ended on August 8…we all brought in as much previously (lower) tariffed goods before that, and most fall merchandise was here in the spring and early summer…so we are still selling goods that didn’t have the latest tariff burden. But we are all raising prices slowly and carefully as the tariffed inventory gets sold (remember, accounting wise, we have a cash hit paying tariffs upon receipt, but we have a P&L hit when we sell the tariffed goods). You will start to see the margin hits a little in 3Q and a lot in Q4. But…we are all trying to hold prices through the key holiday...because we all believe the American consumer is going to be smacked by raised prices everywhere. So many are holding back to try to eke out a good holiday. But we all know that come January, we have massive margin hits (our sector was already the highest tariffed at ~12%, and now sits at ~33%), and we have to raise prices roughly 10-15% to cover tariffs."

Takeaways by Macro Roundup® AI

  1. A large retailer's CEO says tariff rates in his sector rose from roughly 12% to about 33%, requiring price increases of roughly 10–15% to cover the tariff cost.

Related Articles:

  • Tariffs as Fiscal Policy — US tariff revenue has reached about $30bn per month, roughly $23bn of it new, and could raise about $2tn over a ten-year budget window if broad tariffs survive legal challenges. The authors argue this shift from income taxation to tariffs is hard to defend, estimating efficiency losses equal to about a third of tariff revenue.
  • The U.S. Is Not “Winning the Trade War” — The U.S. is the world's largest single source of demand for manufactured goods but remains far smaller than the rest of the world combined, implying foreign producers will mostly avoid bearing the direct cost of tariffs. Consistent with this, the dollar has fallen about 7% against trading partners' currencies while pre-tariff import prices rose about 1%.
  • The U.S. Is Tiptoeing Away From Many of Trump’s Signature Tariffs — The US has exempted dozens of products from its reciprocal tariffs and offered to carve out hundreds more, from farm products to airplane parts, for countries that strike trade deals. The administration is simultaneously expanding tariffs grounded in Section 232 of the Trade Expansion Act, covering metals, autos, heavy trucks, pharmaceuticals and furniture.

AI Summary. Microsoft, Alphabet, Amazon and Meta are projected to spend a combined $360bn on capital expenditures in their current fiscal years, much of it AI-related, rising to nearly $420bn the following year. The Magnificent Seven group of large technology companies is projected to deliver 14% profit growth, versus 8% for the broader S&P 500.

Jeran Wittenstein and Ryan Vlastelica Bloomberg
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Bloomberg estimates Microsoft, Alphabet, Amazon and Meta will spend $420B on capex next fiscal year; up from $360B this year.

Are big tech firms still outgrowing the market despite soaring AI spending?

Core argument: Microsoft, Alphabet, Amazon and Meta are projected to post a combined $360 billion in capital expenditures in their current fiscal years, much of it tied to AI, rising to nearly $420 billion next year, according to analyst estimates compiled by Bloomberg.

Microsoft, Alphabet, Amazon and Meta are projected to post a combined $360 billion in capital expenditures in their current fiscal years, much of it related to AI. That spending is expected to jump to nearly $420 billion next year, according to analyst estimates compiled by Bloomberg. The Magnificent Seven is projected to deliver profit growth of 14% in the third quarter, down from 27% in the second quarter, according to data compiled by Bloomberg Intelligence. That’s nearly twice the 8% expected profit growth for the broader S&P 500, but it also would be the slowest pace for the group since the first quarter of 2023.

Takeaways by Macro Roundup® AI

  1. Microsoft, Alphabet, Amazon and Meta are projected to post a combined $360 billion in capital expenditures in their current fiscal years, much of it tied to AI, rising to nearly $420 billion next year, according to analyst estimates compiled by Bloomberg.
  2. The Magnificent Seven is projected to deliver third-quarter profit growth of 14%, down from 27% in the second quarter and the slowest pace since the first quarter of 2023, according to data compiled by Bloomberg Intelligence.
  3. The Magnificent Seven's projected 14% third-quarter profit growth is nearly twice the 8% expected for the broader S&P 500, according to data compiled by Bloomberg Intelligence.

Related Articles:

  • AI Data Center Boom Threatens Trump’s Manufacturing Revival — Bloomberg Economics projects the largest participants could pour as much as $4tn into artificial intelligence infrastructure by the end of the decade, with capital spending by hyperscalers such as Alphabet, Amazon, Meta, and Microsoft rising from almost $400bn to as much as $600bn. It expects AI's contribution to GDP growth could reach as much as 1.5 percentage points.
  • The Blob: Capital, China, Chips, Chicago and Chilliwack — Data center construction spending has eclipsed office construction, and the specialized power rates most data centers pay fall short of covering the cost of a new natural gas plant, leaving other customers to bear part of the bill. In the PJM grid region, data center demand accounted for 70% of the increase in electricity costs over the past year.
  • Fair Shakes — Technology-sector capital spending has accounted for 35%–45% of US GDP growth over three quarters, implying that without it growth would be near 1% given weak consumption. Among S&P 500 companies, capital spending rose 24% and research and development 10%, but the median stock grew both by only 3%–4%.

AI Summary. Industrial policy justified on national security grounds requires weighing how much economic inefficiency is worth tolerating, since costs incurred today make a country poorer and therefore less able to project power later. The calculation is difficult because security gains are probabilistic and long-term economic costs are speculative.

Chris Miller Chris Miller's Newsletter
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Chris Miller asks, “How much inefficiency should we swallow in exchange for the security of self-sufficiency?” He argues it’s “a tricky calculation” as “security gains are probabilistic” and “long-term economic costs are highly speculative.”

How much economic inefficiency should national security justify?

Core argument: International economics must take geopolitical competition more seriously while also applying "willingness to pay" analysis to determine how much inefficiency is worth tolerating for geopolitical resilience.

The study of international economics clearly needs to take geopolitical competition more seriously. But scholars and practitioners of economic statecraft also need more focus on what economists call “willingness to pay.” How much inefficiency should we tolerate for the sake of geopolitical resilience? The answer isn’t infinite—costs incurred today make us poorer and therefore less capable of mustering power in the future. So how much inefficiency should we swallow in exchange for the security of self-sufficiency? It's a tricky calculation, because security gains are probabilistic (how likely is an adversary to test our reliance on products from abroad?) and because the long-term economic costs are highly speculative. I’m a believer that, like in 1933, there was a strong case for rebalancing economic and security concerns in favor of the latter. In 1933, the Western powers were far delayed in their rearmament and far too willing to transfer technology and industrial capacity to obviously adversarial powers. But that concern must be balanced against the downsides. Being the world’s richest and most productive economy is a key input to our security, too.

Takeaways by Macro Roundup® AI

  1. International economics must take geopolitical competition more seriously while also applying "willingness to pay" analysis to determine how much inefficiency is worth tolerating for geopolitical resilience.
  2. Tolerance for inefficiency in pursuit of self-sufficiency is not infinite, because costs incurred today make a country poorer and therefore less capable of mustering power in the future.
  3. The calculation is difficult because security gains from reduced foreign reliance are probabilistic, depending on whether an adversary tests that reliance, while long-term economic costs are highly speculative.

Related Articles:

  • What Will U.S. Capitalism Look Like in 50 Years? Seven Experts Weigh In — An economist projects that within 50 years technological advances will roughly double the average American's inflation-adjusted income, while substantial inequality persists. The forecast also anticipates a more robust safety net including a modest universal basic income, higher taxes and a value-added tax, shorter work weeks, and fewer heavy-handed market interventions.
  • Capital Is Making a Comeback — Tangible investment in property, factories and equipment fell from 12.5% to 8.5% of private gross domestic product, while intangible investment in intellectual property, software and process knowledge rose from about 11.5% to 16.75%. The author argues demand for tangible capital investment will now have to rise.
  • A New Era of Higher Inflation Risks — The authors argue inflation's baseline is now higher than pre-pandemic, with 2% acting more as a floor than a ceiling, noting disinflation has largely stalled and core inflation has run above target on a six-month annualized basis for five years. They expect a structurally wider range of inflation outcomes, skewed to the upside and centered higher than in the 2010s.

AI Summary. Solar and wind produced 15% of world electricity in 2024, up from less than 4% a decade earlier, and accounted for 63% of the growth in global electricity production since just before the Covid pandemic.

Paul Krugman Krugman Wonks Out
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In 2024, solar and wind generated 15% of global electrical production and 63% of the growth of electrical output since 2019.

Are solar and wind now driving most global electricity growth?

Core argument: Solar and wind produced 15% of world electricity in 2024, up from less than 4% a decade earlier.

Many people still think of solar and wind as marginal, more woke environmentalist aspiration than serious parts of the global energy supply. This was still somewhat true a decade ago, when solar and wind produced less than 4% of the world’s electricity. But renewables have grown explosively since then. In 2024 solar and wind produced 15% of world electricity, and growth in solar and wind accounted for 63% of the growth in electricity production since the eve of Covid. All of this amounts to an enormous technological revolution. Less than 20 years ago there seemed to be no realistic alternative to powering our civilization with fossil fuels. Today we seem to be on an unstoppable path toward relying mainly on renewable energy.

Takeaways by Macro Roundup® AI

  1. Solar and wind produced 15% of world electricity in 2024, up from less than 4% a decade earlier.
  2. Growth in solar and wind accounted for 63% of the growth in global electricity production since the eve of Covid.
  3. Less than 20 years ago there seemed to be no realistic alternative to powering civilization with fossil fuels, and the world now appears set on an unstoppable path toward relying mainly on renewable energy.

Related Articles:

  • How Mega Batteries Are Unlocking An Energy Revolution — Global battery storage capacity is projected to rise 67% to 617GWh and grow tenfold by 2035, with the US and China accounting for about 70% of projects by power capacity. In California, batteries have supplied more than a quarter of electricity during spring and summer peaks, while gas generation fell 37% over two years.
  • Heliocentrism — An energy use must be electrified before green grid electricity can decarbonize it, and while US grid decarbonization continues at a steady pace, the electricity share of final US energy consumption has grown little. Transmission line growth runs well below Department of Energy targets for 2030 and 2035, and transformer delivery times have stretched from 4–6 weeks to 2–3 years.
  • The U.S. Is Forfeiting the Clean-Energy Race to China — China installed 277 gigawatts of wind and solar capacity in seven months, roughly four times the utility-scale additions U.S. federal analysts project for all power sources over a full year. Chinese firms' global market share in batteries and solar modules has reached 75% or higher, according to BloombergNEF.

Tuesday, October 28, 2025

AI Summary. Capital spending by the largest US technology companies has risen from 4% to 15% of revenue since 2012, approaching the capital intensity of utilities, with Meta, Microsoft, and Alphabet each set to spend 21–35% of revenue. The authors argue this shift toward asset-heavy models is associated with inferior returns.

Kai Wu Sparkline Capital
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Meta, Microsoft, and Alphabet’s capex as a percent of revenue (21–35%) are now on par with utilities’ global mean and AT&T’s at the height of the telecom bubble. Kai Wu notes the “telecom index still remains -60% below its dot-com high 25 years later.”

Does rising capital intensity at big tech companies signal weaker returns?

Core argument: The Magnificent 7's capital expenditures have risen from 4% of revenue in 2012 to 15%, approaching the capital intensity of utilities, the most asset-heavy sector.

The Magnificent 7 are now turning away from the asset-light model that fueled their past success. Since 2012, capital expenditures have surged from 4 to 15% of revenue. The Magnificent 7’s capital intensity is quickly approaching that of utilities, the most asset-heavy sector. Meta, Microsoft, and Alphabet are each set to spend between 21 and 35% of their revenue on capex, more than both the average global utility today and AT&T at the height of the telecom bubble. In the dot-com upswing, telecom stocks skyrocketed, rising far above the broader tech index. However, in the bust, they plummeted back down to earth, leading to a devastating -92% loss. Incredibly, the telecom index still remains -60% below its dot-com high 25 years later. With the AI arms race transforming Big Tech from asset-light to asset-heavy, a model associated with inferior returns, our value-based playbook suggests rotating toward a broader set of AI beneficiaries with lower capital requirements and valuations.

Takeaways by Macro Roundup® AI

  1. The Magnificent 7's capital expenditures have risen from 4% of revenue in 2012 to 15%, approaching the capital intensity of utilities, the most asset-heavy sector.
  2. Meta, Microsoft, and Alphabet are each set to spend 21–35% of revenue on capex, more than the average global utility today and more than AT&T at the height of the telecom bubble.
  3. Telecom stocks rose far above the broader tech index in the dot-com upswing before falling -92% in the bust, and the telecom index remains -60% below its dot-com high 25 years later.

Related Articles:

  • Why We Are Not In A Bubble….Yet — The 5 largest US technology companies are worth about 16% of the global public equity market, and the top 10 US stocks nearly 25%, almost $25tn. The author argues valuations are high but not bubble-level, with the "Magnificent 7" median forward price-to-earnings ratio at 27x, roughly half that of the late-1990s leaders.
  • What GPU Pricing Can Tell Us About How The AI Bubble Will Pop — Price data from RBC Capital Markets show average hourly rental rates for Nvidia's H200 and H100 graphics chips down 29% and 22% year-to-date, with smaller providers driving the declines. Prices charged by the largest cloud providers — Amazon Web Services, Microsoft Azure, Google and Oracle — have hardly moved, widening the gap between them and newer entrants.
  • Minsky Moments and AI CapEx — Capital-spending forecasts for the four largest cloud providers rose nearly 50% over the year, and AI data centers are increasingly funded through leveraged and off-balance-sheet structures, including $3.2bn in senior secured notes and a roughly $30bn asset-backed financing. The author argues this marks a speculative-finance phase where borrowers must roll over principal.

AI Summary. An analysis of 87 identical-twin pairs raised apart with individual IQ and biographical data finds that pairs with similar schooling had an average IQ gap of 5.8 points and a correlation of 0.87, while educationally dissimilar pairs averaged a 12.8-point gap and a 0.75 correlation.

Jared Horvath and Katie Fabricant Acta Psychologica
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“Educationally similar” monozygotic (MZ) twins raised apart [TRA] have a mean IQ delta of 5.8 points, ~ the same as those raised together. “Educationally dissimilar” MZ TRA have a delta of 12.8 points, closer to non-twin siblings than twins reared together.

How much do schooling differences affect IQ gaps between separated twins?

Core argument: Among 87 twins-reared-apart pairs with individualized IQ and biographical data, the 52 with similar schooling show an intraclass correlation of 0.87 ± 0.02 and an absolute IQ gap of 5.8 points (SD = 6.7), nearly indistinguishable from identical twins reared together.

We gathered data from every available TRA [Twins Raised Apart] case published in the academic literature over the last century that included both individualized IQ and biographical data. This data set (which we believe represents the entirety of the non-amalgamated TRA field; the vast majority embodied in existing studies are amalgamated) consists of 87 pairs. We split these pairs into three groups: similar, somewhat dissimilar, and very dissimilar schooling. Of the 87 pairs, 52 experienced a similar type and duration of schooling within a similar location. In fact, 25 of these pairs attended the same school for some period of time. One would be correct in questioning whether these twins truly meet the criteria of ‘reared apart;’ eyebrows should certainly be raised over how varied researchers have defined the term. Analysis revealed that ‘Educationally Similar’ TRA pairs have an ICC of 0.87 ± 0.02 (n = 52) and an absolute IQ differential of 5.8 points (SD = 6.7). This makes this group nearly indistinguishable from MZ twins reared together. Further analysis of the 35 ‘educationally dissimilar’ TRA pairs shows an ICC of 0.75 ± 0.04 (n = 32) and an absolute IQ differential of 12.8 points (SD = 7.3). The correlation is 0.12 lower than the ‘educationally similar’ TRAs and the IQ differential places this group closer in stature to non-twin siblings than MZ or even dizygotic twins reared together.

Takeaways by Macro Roundup® AI

  1. Among 87 twins-reared-apart pairs with individualized IQ and biographical data, the 52 with similar schooling show an intraclass correlation of 0.87 ± 0.02 and an absolute IQ gap of 5.8 points (SD = 6.7), nearly indistinguishable from identical twins reared together.
  2. The 35 educationally dissimilar twins-reared-apart pairs show an intraclass correlation of 0.75 ± 0.04 (n = 32) and an absolute IQ differential of 12.8 points (SD = 7.3), placing them closer to non-twin siblings than to identical or fraternal twins reared together.
  3. Of the 52 educationally similar twins-reared-apart pairs, 25 attended the same school for some period, raising the question of whether those twins meet the criteria of "reared apart" and how varied researchers' definitions of the term have been.

Related Articles:

AI Summary. The International Energy Agency's projection for annual carbon dioxide emissions in 2040 has fallen from 50bn tons to 30bn tons, though the world is expected to fall far short of the 1.5°C Paris goal, with warming likely between 2°C and 3°C by 2100. Global energy demand is projected to more than double by 2050.

Bill Gates GatesNotes
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Noting that over the past decade global CO2 emissions projected by the IEA have fallen by more than 40%, Bill Gates argues innovation will likely “give us the tools we need to meet the growing demand for energy without increasing carbon emissions.”

Have emissions forecasts improved even as climate goals go unmet?

Core argument: The International Energy Agency has cut its 2040 global carbon dioxide emissions forecast from 50 billion tons, projected a decade ago, to 30 billion tons, and projects 2050 emissions will be lower still.

Ten years ago, the International Energy Agency predicted that by 2040, the world would be emitting 50 billion tons of carbon dioxide every year. Now, just a decade later, the IEA’s forecast has dropped to 30 billion, and it’s projecting that 2050 emissions will be even lower. Even if the world takes only moderate action to curb climate change, the current consensus is that by 2100 the Earth’s average temperature will probably be between 2°C and 3°C higher than it was in 1850. That’s well above the 1.5°C goal that countries committed to at the Paris COP in 2015. In fact, between now and 2040, we are going to fall far short of the world’s climate goals. One reason is that the world’s demand for energy is going up—more than doubling by 2050. Although wind and solar have gotten cheaper and better, we don’t yet have all the tools we need to meet the growing demand for energy without increasing carbon emissions. But we will have the tools we need if we focus on innovation. With the right investments and policies in place, over the next ten years we will have new affordable zero-carbon technologies ready to roll out at scale. Add in the impact of the tools we already have, and by the middle of this century emissions will be lower and the gap between poor countries and rich countries will be greatly reduced.

Takeaways by Macro Roundup® AI

  1. The International Energy Agency has cut its 2040 global carbon dioxide emissions forecast from 50 billion tons, projected a decade ago, to 30 billion tons, and projects 2050 emissions will be lower still.
  2. The current consensus holds that even with moderate climate action, Earth's average temperature in 2100 will probably be 2–3°C above 1850 levels, well above the 1.5°C goal countries committed to at the 2015 Paris COP.
  3. Global energy demand is set to more than double by 2050, and despite wind and solar becoming cheaper and better, the tools to meet that demand without increasing carbon emissions do not yet all exist.

Related Articles:

  • The Most Amazing Climate Policy Figure — U.S. carbon dioxide emissions from fossil fuels moved closely with GDP from 1992 to about 2005, after which the two decoupled, with GDP continuing to rise while emissions fell.
  • Take the Under — Downward revisions to global population and GDP projections make climate change appear more tractable, the author argues, since the scenarios used to model emissions rely on socio-economic assumptions that are more extreme than real-world observations. With slower population and economic growth, even partial policy successes could bring emissions consistent with a 2C target within reach.
  • European Glaciers Have Shrunk 40% Since 2000, Study Says — A study by 35 research teams found that glaciers in the Alps and Pyrenees lost about 40% of their volume in less than a quarter of a century. Excluding the Antarctic and Greenland ice sheets, glaciers elsewhere in the world lost 5% of their volume over roughly the same period.

AI Summary. Governments seeking supply-chain leverage face limited visibility into their own supply chains, and China's rare earth licensing requirements for multinationals may be partly intended to give Beijing that visibility and allow more precise targeting of future restrictions. Effective measures must impose asymmetric costs, and keeping foreign manufacturers dependent on drip-fed supply is central to Beijing's strategy.

Chris Miller Financial Times
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Chris Miller argues that “at the very least,” Beijing’s rare earth export controls will “drive up prices and make non-Chinese manufacturing less competitive” – a win for China, given its “sustained industrial overcapacity.”

How does supply-chain visibility give China leverage in trade disputes?

Core argument: China's rare earth licensing requirements, which oblige multinationals to apply for access, may be partly intended to give Beijing greater visibility into supply chains and thus more precise targeting of future restrictions.

Beijing, Brussels and Washington are all searching for the most efficient and asymmetric ways to gum up their adversaries’ supply chains. One challenge these governments face is knowledge. It’s no secret that manufacturers struggle to understand the depths of their own supply chains. There can be dozens of transactions between a raw material and a finished good. Governments have even less visibility. China’s rare earth measures — which require multinationals to apply for licences — may be partly intended to provide Beijing with more supply chain visibility. This implies more precise targeting of any future restrictions. A second challenge is finding measures with asymmetric costs. For the world’s three largest economies, the only measures that provide real leverage are those that induce far higher costs on their rival than themselves. The Covid-19 pandemic was supposed to have forced the world’s procurement managers to shift from a “just in time” model to a “just in case” one better prepared for disruption. But as China drip feeds rare earths to desperate manufacturers abroad, “just in time” is central to Beijing’s strategy to keep global multinationals hooked on its supply.

Takeaways by Macro Roundup® AI

  1. China's rare earth licensing requirements, which oblige multinationals to apply for access, may be partly intended to give Beijing greater visibility into supply chains and thus more precise targeting of future restrictions.
  2. Beijing, Brussels and Washington all seek asymmetric measures that impose far higher costs on rivals than on themselves, since only such measures give the world's three largest economies real leverage.
  3. Manufacturers struggle to understand the depths of their own supply chains, which can involve dozens of transactions between a raw material and a finished good, and governments have even less visibility.

Related Articles:

  • China Cracks Down On Foreign Companies Stockpiling Rare Earths — China is warning foreign buyers of rare earths and derived products such as magnets that building large inventories will bring supply restrictions, and is limiting approved export volumes to prevent stockpiling, according to people familiar with the matter.
  • Industrial Policy and Economic Security — Industrial policy justified on national security grounds requires weighing how much economic inefficiency is worth tolerating, since costs incurred today make a country poorer and therefore less able to project power later. The calculation is difficult because security gains are probabilistic and long-term economic costs are speculative.
  • Mad Libs: Just Fill In The Blanks — China expanded its rare earth export controls to require licenses for any product containing more than 0.1% by value of Chinese rare earths or made with equipment containing them, with a presumption of denial for military uses and scrutiny of advanced semiconductor uses. Aggressive enforcement would affect industries from chips and autos to aerospace, defense and medical equipment.

AI Summary. Retail and private investors are pouring billions of dollars into rare-earth companies, with MP Materials' share price roughly quadrupling to a market capitalization near $12bn and Australia's Lynas Rare Earths tripling after raising about $500m. Canadian processor Ucore Rare Metals, up more than 700%, won $18m from the Pentagon to build a Louisiana plant.

Jon Emont Wall Street Journal
Date Posted:

The West’s rare-earth industry is revving up as both private and government capital flow into the sector. MP Materials’ stock is up 354% year to date, and Lynas Rare Earths’ is up 186% relative to the S&P 500’s 15.5% return.

Are investors pouring billions into rare-earth companies?

Core argument: MP Materials, America's flagship rare-earth mining company, has seen its share price roughly quadruple this year, lifting its market capitalization to about $12 billion, as retail and private investors pour billions of dollars into rare-earth companies.

Retail and private investors are pouring in billions of dollars of their own. MP Materials, America’s flagship rare-earth mining company, has seen its share price roughly quadruple this year, raising its market capitalization to around $12 billion. Australian rare-earth company Lynas Rare Earths raised about $500 million from investors in August. Its share price has tripled this year. Ucore Rare Metals, a Canadian rare-earth processor, was awarded $18 million by the Pentagon to build its first commercial plant in Louisiana, which will turn raw rare earths into oxides used by many industries. Its stock price has jumped more than 700% this year.

Takeaways by Macro Roundup® AI

  1. MP Materials, America's flagship rare-earth mining company, has seen its share price roughly quadruple this year, lifting its market capitalization to about $12 billion, as retail and private investors pour billions of dollars into rare-earth companies.
  2. Ucore Rare Metals, a Canadian rare-earth processor, was awarded $18 million by the Pentagon to build its first commercial plant in Louisiana, converting raw rare earths into oxides, and its stock price has jumped more than 700% this year.
  3. Australian rare-earth company Lynas Rare Earths raised about $500 million from investors in August, and its share price has tripled this year.

Related Articles:

  • Mad Libs: Just Fill In The Blanks — China expanded its rare earth export controls to require licenses for any product containing more than 0.1% by value of Chinese rare earths or made with equipment containing them, with a presumption of denial for military uses and scrutiny of advanced semiconductor uses. Aggressive enforcement would affect industries from chips and autos to aerospace, defense and medical equipment.
  • China’s Weaponisation of Rare Earths is a New Kind of Trade War — China's export controls on rare earth materials and magnets threatened to halt production across the auto industry, the largest manufacturing sector in most advanced economies, and forced Washington to negotiate on tariffs. Despite China's well-known dominance of rare earth production, Western governments and companies have not developed alternative suppliers.
  • Pentagon Steps Up Stockpiling Of Critical Minerals With $1bn Buying Spree — The US Defense Logistics Agency has signaled plans to buy up to $500m of cobalt, $245m of antimony, $100m of tantalum and a combined $45m of scandium for its critical minerals stockpile, valued at $1.3bn. Stockpiled materials can be released only by the president in declared war or when deemed necessary for national defense.

AI Summary. A data firm estimates China's observable oil stocks reached a record 1.2bn barrels, triple the size of America's reserves, with storage capacity of 2bn barrels only 58% full and traders expecting stockpiling to continue. Analysts also note metal imports have soared even as China's metal-consuming industries have slumped.

Economist Staff The Economist
Date Posted:

China consumes 16mm barrels of oil a day, 75% of which is imported. Since February, China has stockpiled 110mm barrels, bringing its stock to 1.2B barrels. 1.5B barrels would cover 140–150 days of imports. China is also stockpiling industrial metals.

Is China building record stockpiles of oil and metals?

Core argument: China's observable oil stocks grew by 110m barrels since early February to a record 1.2bn, triple the size of America's reserves, according to the data firm Kayrros.

Since early February China’s observable stocks [of oil] grew by 110m barrels, to a record 1.2bn, reckons Kayrros, a data firm—triple the size of America’s reserves. There is scope to keep buying. China’s storage capacity of 2bn barrels is only 58% full, and more capacity will be built next year. Should the country stockpile at today’s rate, as traders expect, it could have 1.5bn barrels by next year, enough to cover 140-150 days of imports. Tom Price of Panmure Liberum, a bank, notes that [metal] imports have soared even though China’s metal-hungry industries have slumped. He estimates that stocks built in the last 20 months are sufficient to cover 20%, 50% and 108% of its annual demand for copper, zinc and nickel, respectively.

Takeaways by Macro Roundup® AI

  1. China's observable oil stocks grew by 110m barrels since early February to a record 1.2bn, triple the size of America's reserves, according to the data firm Kayrros.
  2. China's oil storage capacity of 2bn barrels is only 58% full, with more to be built next year, and stockpiling at the current rate would lift holdings to 1.5bn barrels, enough to cover 140-150 days of imports.
  3. Tom Price of Panmure Liberum estimates that metal stocks China built over the past 20 months cover 20% of its annual copper demand, 50% of zinc and 108% of nickel, even as its metal-hungry industries have slumped.

Related Articles:

  • How China Curbed Its Oil Addiction—and Blunted a U.S. Pressure Point — Nearly half of passenger vehicles sold in China last year were all-electric or plug-in hybrids, up from 6% in 2020, while domestic oil output rose 13% from 2018 to 2024 to about 4.3m barrels a day. China still imports roughly 11m barrels a day, about 70% of what it consumes.
  • Why is Xi Jinping Building Secret Commodity Stockpiles? — China's commodity imports rose 16% in volume terms with record imports of many basic resources, while state statisticians have stopped publishing stock data for many commodities. The US Department of Agriculture projects China will hold 51% of world wheat stocks and 67% of maize stocks, and the country's crude-oil storage capacity has grown from 1.7bn to 2bn barrels.
  • How Xi Sparked China’s Electricity Revolution — Electricity has risen to 30% of China's final energy use while plateauing near 22% in Europe and the US, supported by a decades-long grid expansion and upgrade program projected to cost as much as $800bn by 2030. Chinese grid investment is forecast to grow about 5% annually through 2030, faster than projected economic growth.