Edward Conard

Top Ten New York Times Bestselling Author

  • “…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
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…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
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “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
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “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
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Monday, March 2, 2026

AI Summary. Tanker traffic through the Strait of Hormuz, which normally carries a fifth of global oil and liquefied natural gas supply, appears significantly disrupted as shippers, producers, and insurers turn cautious. Analysts estimate an $18/bbl risk premium in crude, and project European gas and spot liquefied natural gas could reach about $25/mmBtu if flows halt for a month.

Daan Struyven, Samantha Dart, Yulia Zhestkova Grigsby, Alexandra Paulus, et al. Goldman Sachs
Date Posted:

GS forecasts a muted response to the Iran conflict, with a full one-month supply disruption from the Strait of Hormuz causing a $10–15/bbl increase in crude prices. They do see potential for a 130% spike in LNG prices for Europe, much less for the US.

How much do oil and gas prices rise if shipping halts?

Core argument: The authors estimate an $18/bbl real-time risk premium in crude prices based on a 15% weekend gain in retail prices, approximately matching their fair-value estimate of a six-week full halt in Strait of Hormuz flows.

Tanker traffic through the Strait of Hormuz--through which normally 1/5 of global supply for both oil and LNG flows--appears significantly disrupted as many shippers, oil producers, and insurers have shifted to a cautious wait-and-see mode amidst reports about damaged ships. Based on the 15% weekend gain in retail prices, we estimate an $18/bbl real-time risk premium in crude oil prices, which corresponds approximately to our estimate of the fair value effect of a six-week full halt in Strait of Hormuz flows (allowing for spare pipeline capacity use as a partial offset). This estimated impact moderates to +$4 if only 50% of the flows are halted for one month. However, oil prices can rise substantially more if the market demands a premium for the risk of more persistent supply disruptions. We see significant upside risk to prices from a potential sustained disruption of LNG supply through the Strait of Hormuz. In a scenario where flows halt for one month, we think it is likely that [European gas] and [Spot LNG] could approach 74 EUR/MWh ($25/mmBtu)--130% above current levels--a threshold that triggered large natural gas demand responses during the 2022 European energy crisis. We see limited upside risk to US natural gas prices.

Takeaways by Macro Roundup® AI

  1. The authors estimate an $18/bbl real-time risk premium in crude prices based on a 15% weekend gain in retail prices, approximately matching their fair-value estimate of a six-week full halt in Strait of Hormuz flows.
  2. A halt of 50% of Strait of Hormuz flows for one month moderates the estimated crude price impact to +$4/bbl, though prices could rise substantially more if the market demands a premium for more persistent supply disruptions.
  3. European gas and spot LNG prices could approach 74 EUR/MWh ($25/mmBtu), 130% above current levels, if LNG flows through the Strait of Hormuz halt for one month, a threshold that triggered large demand responses during the 2022 European energy crisis.

Related Articles:

  • 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.
  • 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.
  • Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World — China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.

AI Summary. US industry booms averaging 300% gains over two years were on average followed by flat prices rather than crashes, according to an analysis of long-run stock market data. Booming and crashing industries are associated with subsequent high volatility, but post-boom performance is not significantly different from unconditional returns once market trends are controlled for.

William Goetzmann, Otto Manninen, and James Tyler National Bureau of Economic Research
Date Posted:
Is Database:
Database

Industry data back to 1871 show that in periods identified as “booms,” a sector’s stocks had an average growth of 300% over two years; yet conditional on such a gain, the mean subsequent price path was flat. On average, booms are not followed by crashes.

Do industry booms typically end in crashes?

Core argument: Industry booms in the sample averaged 300% growth over two years, yet their average subsequent price path was flat, supporting the finding that booms on average are not followed by crashes.

What happens when one industry suddenly booms? Is it likely that the boom in that sub-sector continues, reverses, or reverts to average industry behavior? We use the Cowles (1938) data for the early years beginning in 1871 and Fama-French industry portfolio data up to the current time. A boom is identified when an industry earns both a raw and market-adjusted return of 100% or more over the past two years, and a raw return of at least 50% over the past five years. To avoid double-counting, once a month is tagged as a boom, the following 12 months cannot initiate a new boom episode. Figure 5 reports event studies [on each of the industry datasets] using this definition. The booms in the sample had an average growth of 300% over two years. However, conditional on this huge gain, their average subsequent price path was flat. The figures look nearly identical. They support the basic finding that booms on average are not followed by crashes. Further industry-level analysis shows that booming (and crashing) industries are associated with subsequent high volatility, making both crashes and repeat booms more likely. But once one controls for market trends, post-boom performance is not significantly different from unconditional returns. For crashing industries, rebounds are slightly more likely than further declines. This is potentially useful information for investors considering tactical industry allocations in real time.

Takeaways by Macro Roundup® AI

  1. Industry booms in the sample averaged 300% growth over two years, yet their average subsequent price path was flat, supporting the finding that booms on average are not followed by crashes.
  2. A boom is identified when an industry earns both a raw and market-adjusted return of at least 100% over two years plus a raw return of at least 50% over five years, using Cowles (1938) data from 1871 and Fama-French industry portfolios.
  3. Booming and crashing industries are associated with subsequent high volatility, making both crashes and repeat booms more likely, but once market trends are controlled for, post-boom performance is not significantly different from unconditional returns.

Related Articles:

  • Is It a Bubble? — Transformational technologies have historically generated excessive enthusiasm and investment, producing more infrastructure than needed, asset prices that prove too high, and losses for those funding them, while also accelerating adoption. AI enthusiasm is argued to fit this pattern, with debt financing having the potential to magnify the effects.
  • Who Is On the Other Side? — Research defining an industry "run-up" as a cumulative return of 100% or more over two years finds that such run-ups do not predict unusually low average future returns, though they do raise the probability of a crash, defined as a 40% drawdown. Volatility, turnover, and equity issuance help predict those crashes.
  • Predictable Financial Crises — Historical data indicate that when credit and asset prices grow rapidly over three years, the probability of a financial crisis within the next three years is 40%, versus 7% in stable periods. The authors find 63% of crises were preceded by such credit-market overheating, which also forecasts weaker medium-term economic growth.

AI Summary. The average tenure of a company in the S&P 500 stock index has fallen to about 15 years and continues to decline. Contributing factors include faster creative destruction, technological innovation that lets new business models scale quickly and displace incumbents, and mergers and private equity buyouts that remove large firms from public markets.

Torsten Sløk Apollo
Date Posted:
Is Database:
Database

The mean tenure of firms in the S&P 500 at the start of 2026 is 15 years, down from 18 years in 2012 and 25 years in 1980. Sløk attributes the increase in churn to a faster pace of technological change and an increase in M&A and buyout activity.

Why are companies staying in the leading stock index for fewer years?

Core argument: The average tenure of a company in the S&P 500 index is 15 years and continues to decline.

The average number of years a company remains in the S&P 500 index keeps declining. Several factors are driving the faster churn in the index: 1. Creative destruction operates more rapidly, shortening the typical time a company remains large and competitive enough to stay in the S&P 500. 2. Technological innovation (IT, internet, AI, cloud, mobile) creates new business models that scale quickly and displace incumbents before they can adapt. 3. M&A and private equity activity more regularly remove large firms from public markets via buyouts or mergers.

Takeaways by Macro Roundup® AI

  1. The average tenure of a company in the S&P 500 index is 15 years and continues to decline.
  2. Faster creative destruction shortens the period a company stays large and competitive enough to remain in the S&P 500.
  3. Technological innovation across IT, internet, AI, cloud, and mobile creates business models that scale quickly and displace incumbents, while M&A and private equity activity remove large firms from public markets through buyouts and mergers.

Related Articles:

  • The Long Goodbye? Incumbent Competitiveness in the 21st Century — Value creation among large American companies has become concentrated in a newer cohort of firms: businesses founded after World War II accounted for 8% of the top 50 companies' total market value in 1990 but 77% by 2024. The leading 20th-century incumbents are fading as this newer group takes over.
  • Which U.S. Stocks Generated the Highest Long-Term Returns? — Of the 29,078 U.S. common stocks in a database spanning nearly a century, 51.6% had negative cumulative returns, while 17 stocks returned more than 5m% — led by Altria at 265m%. Those top performers averaged annualized returns of just 13.47%, underscoring the value of time invested.
  • Long-Term Shareholder Returns: Evidence From 64,000 Global Stocks — A study of about 64,000 global stocks estimates net global stock market wealth creation of $75.7tn, with returns highly concentrated: the top 159 firms (0.25%) account for half of net wealth creation and the top 1,526 (2.39%) account for all of it. Fewer than half of stocks beat one-month US Treasury bills, 42.6% of non-US and 44.8% of US stocks.

AI Summary. U.S. weapons manufacturers delivered stronger stock returns after the Cold War than during it, even as U.S. military spending fell from around 7% of the economy to about 3.7%, with the "guns" sector posting the third-best total return among 49 U.S. sectors, behind software and microchips.

James Mackintosh Wall Street Journal
Date Posted:

Btw 1988 and 2025, US defense spending fell from ~7% of GDP to 3.7%, while defense sector profit margins doubled to ~7.7% up from ~3.7% in 1988. Mackintosh argues that an increase in foreign customers, not monopsony, was the key driver.

Do defense stocks perform better when military spending falls?

Core argument: The U.S. "guns" sector delivered the third-best total return of 49 U.S. sectors defined by Dartmouth finance professor Kenneth French from just before the Berlin Wall fell to now, trailing only software and microchips.

U.S. weapons manufacturers actually performed better in the years since the end of the Cold War than during it. That’s despite U.S. military spending plummeting from around 7% of the economy in 1988 to about 3.7% today. From just before the Wall fell to now, the “guns” sector had the third-best total return out of 49 U.S. sectors defined by Kenneth French, a Dartmouth finance professor. It came in behind software and microchips. Aerospace, where major defense stocks including Boeing sit, also did well, coming in sixth. Some of the post-1989 margin improvement is because companies were allowed to merge, although that has been true of other sectors. Some of it is because corporate taxes came down. But I would argue a lot is because companies increasingly sell to foreign customers that have less ability to extract lower prices by pointing to fat profits. Smaller domestic military budgets also reduce the need for companies to kowtow to politicians by maintaining unprofitable operations in their districts or supporting civilian projects.

Takeaways by Macro Roundup® AI

  1. The U.S. "guns" sector delivered the third-best total return of 49 U.S. sectors defined by Dartmouth finance professor Kenneth French from just before the Berlin Wall fell to now, trailing only software and microchips.
  2. U.S. weapons manufacturers performed better after the Cold War than during it, even as U.S. military spending fell from around 7% of the economy in 1988 to about 3.7% today.
  3. Post-1989 margin improvement stems partly from permitted mergers and lower corporate taxes, and, the author argues, largely from rising sales to foreign customers less able to extract lower prices by pointing to fat profits.

Related Articles:

  • Trump Demands More Defense Spending But Threatens Biggest Contractors — An executive order requires major defense contractors to end stock buybacks and dividends and cap executive pay at $5m a year until they invest more in factories and research, alongside a demand that Congress raise annual defense spending by over 50% to $1.5tn. Whether a president can mandate private capital allocation is unclear.
  • Investors Pour Billions Into Europe’s AI And Defence Start-ups — European venture capital investment rose 5% to €66bn, a post-pandemic high, with artificial intelligence deals accounting for more than 35% of all transactions at €23.5bn, up from €17.7bn the prior year. Investment in European defence and related technology start-ups rose 55% to a record $8.7bn.
  • Waking the Sleeping European Giant — Europe, at roughly 500m people and a $26tn economy with world-class aerospace, shipbuilding, pharmaceutical, vehicle and weapons manufacturers, has the material basis to be a military superpower. National militaries' preference for home-country suppliers has left subscale defense firms, and common procurement could raise output and lower unit costs.

AI Summary. Designating an AI company a supply-chain risk would be devastating because it depends on cloud hosting from Amazon, Microsoft, and Google, all of which hold US defense contracts, though such authority appears limited to work covered by US government contracts. The author argues governments have incentive to destroy any private firm that dictates terms to their military.

Ben Thompson Stratechery
Date Posted:

Ben Thompson argues the Pentagon’s position vis-à-vis Anthropic is reasonable given that the potential capabilities of AI “are sufficiently powerful to fundamentally affect the US’s freedom of action.”

How vulnerable are AI firms to being labeled supply-chain risks?

Core argument: Designating Anthropic a supply chain risk would decimate the company, which relies on cloud hosting from AWS, Microsoft, and Google — all holders of Department of War contracts — and, the author expects, on Nvidia as well.

[Designating Anthropic a supply chain risk] would decimate Anthropic: at a bare minimum, the company relies on cloud hosting from AWS, Microsoft, and Google, all of which have contracts with the Department of War; I imagine the same applies to Nvidia. Fortunately for the company, Hegseth’s declaration does seem out of step with the law, which limits Hegseth’s authority to work covered by U.S. government contracts; in other words, AWS could still serve Anthropic models, as long as it doesn’t use Anthropic models for any of its services offered to the U.S. government. Why would the U.S. government want to kneecap one of its AI champions? In fact, Amodei already answered the question: if nuclear weapons were developed by a private company, and that private company sought to dictate terms to the U.S. military, the U.S. would absolutely be incentivized to destroy that company. The reason goes back to the question of international law. International law is ultimately a function of power; might makes right. There are some categories of capabilities — like nuclear weapons — that are sufficiently powerful to fundamentally affect the U.S.’s freedom of action; we can bomb Iran, but we can’t North Korea.

Takeaways by Macro Roundup® AI

  1. Designating Anthropic a supply chain risk would decimate the company, which relies on cloud hosting from AWS, Microsoft, and Google — all holders of Department of War contracts — and, the author expects, on Nvidia as well.
  2. Hegseth's declaration appears out of step with law limiting his authority to work covered by U.S. government contracts, so AWS could still serve Anthropic models provided it excludes them from services offered to the U.S. government.
  3. Amodei's own argument supplies the rationale: if a private company developed nuclear weapons and sought to dictate terms to the U.S. military, the U.S. would be incentivized to destroy that company, because international law is a function of power.

Related Articles:

  • Anthropic Says DeepSeek, MiniMax Distilled AI Models for Gains — Anthropic says three Chinese artificial intelligence developers — DeepSeek, MiniMax Group, and Moonshot — violated its terms of service by using thousands of fraudulent accounts to generate more than 16m exchanges with its Claude models. The company says this practice, known as distillation, lets rival labs improve their own models by training on outputs from more powerful systems.
  • The Geopolitics of AI: Decoding the New Global Operating System — The performance gap between the top American and Chinese AI models narrowed from 9.3% to 1.7%, with Chinese firms relying on cheaper open-source models—DeepSeek prices usage 20-40x below OpenAI's ChatGPT. This price advantage could win adoption in developing countries and build dependency on Chinese AI ecosystems.

AI Summary. The Pentagon is working to maintain sufficient stocks of Thaad, Patriot, and Standard Missile interceptors being used to defend against Iranian missiles and drones, with Thaad systems deployed to Israel, Jordan, South Korea, and Guam. Patriots intercept lower-flying threats, while SM-3s can hit ballistic missiles above the atmosphere.

Michael Gordon and Shelby Holliday Wall Street Journal
Date Posted:

The US is running down its interceptor stock, given the pace of use since 2024. The WSJ notes, “If the war drags on and more interceptors are needed, the Pentagon would need to decide whether to access stockpiles in the Pacific.”

Are missile interceptor stocks limiting U.S. air defense operations?

Core argument: A major Pentagon concern is maintaining sufficient Thaad interceptor stocks, as U.S. forces also operate the system in South Korea and Guam to deter North Korea and China.

The Thaad antimissile system was deployed to Israel in 2024, along with the U.S. Army troops to operate it, as the Biden administration sought to protect the country against Iran. A Thaad has also been deployed to Jordan, where many U.S. combat aircraft are now deployed. A major concern for the Pentagon is to maintain a sufficient stock of interceptors for the Thaad, which U.S. forces also operate in South Korea and Guam, to deter North Korea and China. The Pentagon is also racing to replenish stocks of Patriot and Standard Missile interceptors, which also take out aerial threats and are being used to defend against Iranian missiles and drones. Patriots take out lower-flying threats, while SM-3s can intercept ballistic missiles above the Earth’s atmosphere.

Takeaways by Macro Roundup® AI

  1. A major Pentagon concern is maintaining sufficient Thaad interceptor stocks, as U.S. forces also operate the system in South Korea and Guam to deter North Korea and China.
  2. The Biden administration deployed a Thaad antimissile system and U.S. Army troops to operate it to Israel in 2024, with another Thaad sent to Jordan, where many U.S. combat aircraft are now based.
  3. The Pentagon is racing to replenish Patriot and Standard Missile interceptors used against Iranian missiles and drones, with Patriots taking out lower-flying threats and SM-3s intercepting ballistic missiles above the Earth's atmosphere.

Related Articles:

  • Israel’s 12-Day War Revealed Alarming Gap in America’s Missile Stockpile — US THAAD missile-defense operators fired more than 150 interceptors against Iranian ballistic missiles, nearly a quarter of the roughly 650 the Pentagon has purchased at about $13m each. Replenishing that stock would likely take over a year and cost $1.5bn–$2bn, according to a defense-procurement researcher's estimate, while the manufacturer says it can make about 100 interceptors this year.
  • The West’s Insatiable Demand for Missiles Is Boosting U.S. Weapons Makers — U.S. weapons makers are reporting rising missile sales, with Lockheed Martin's missiles and fire control division up 11% and RTX's Raytheon unit up 8%, and Raytheon's order backlog reaching $63.5bn. The U.S. Army asked Lockheed to quadruple PAC-3 missile output, while Northrop Grumman expects to produce 25,000 solid rocket motors annually by 2029, up from 13,000.
  • Defence Groups Bet Big On Drone-Destroying Laser Weapons — Major defense contractors including RTX, MBDA, and QinetiQ are investing heavily in high-energy laser weapons to destroy drones, a technology long regarded as science fiction. Britain's Ministry of Defence says its DragonFire laser will be deployed on Royal Navy ships five years ahead of schedule, firing at roughly £10 a shot.

Tuesday, March 3, 2026

AI Summary. Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.

Michael Cembalest J.P. Morgan
Date Posted:
Is Database:
Database

As measured by useful final energy consumption in 2024, nuclear provided 6% of America’s 44.5 exajoules, renewables 9%, and fossil fuels 85%. The corresponding numbers for China’s 87.7 exajoules were nuclear 2%, renewables 13%, and fossil fuels 85%. Coal was 54% of China’s consumption and oil 18%, relative to 8% and 30%, respectively for the US.

Does measuring primary energy overstate the electricity needed to replace oil?

Core argument: The U.S. consumed 45 exajoules of useful final energy in 2024 compared with 95 exajoules of primary energy.

Energy is lost as waste heat in conversion of fuel energy to motion in internal combustion engines, and in conversion of heat to electricity. For example, if you use primary energy to estimate how much electric power is needed to replace oil in passenger cars, you would overestimate the power needed since electric motors are 80%-90% efficient at converting electricity to motion compared to 18% efficiency for gasoline cars. A better approach [is estimating] the energy net of waste heat that is actually consumed by end-users; this would help avoid overly high projections of fossil fuel demand in a more electrified world due to this “primary energy fallacy.” A few years ago I constructed a measure of useful final energy (UFE) that I use for my energy charts. With this approach, we can get closer to useful final energy actually consumed by end users. [For example the US consumed 45 exajoules (EJ) of useful final energy in 2024 compared to 95 EJ of primary energy.]

Takeaways by Macro Roundup® AI

  1. The U.S. consumed 45 exajoules of useful final energy in 2024 compared with 95 exajoules of primary energy.
  2. Electric motors convert electricity to motion at 80%–90% efficiency compared with 18% for gasoline cars, so using primary energy to size the electricity needed to replace oil in passenger cars overestimates the requirement.
  3. Measuring energy net of waste heat that end-users actually consume helps avoid the "primary energy fallacy" of overly high projections of fossil fuel demand in a more electrified world.

Related Articles:

  • New U.S. Electric Generating Capacity Expected To Reach A Record High in 2026 — U.S. power plant developers plan to add 86 gigawatts of new utility-scale generating capacity, which would be a record if realized, with solar at 51% of planned additions, battery storage at 28% and wind at 14%. The prior year saw 53 gigawatts added, the largest single-year installation since 2002.
  • Electricity 2026 — Global electricity demand is projected to grow faster than the world economy throughout the forecast period, driven by electricity-intensive industries, air conditioning, data centres and continued electrification. US electricity demand is forecast to rise about 2% a year over 2026-2030, more than twice the past decade's rate, with data centres accounting for almost half that growth.
  • Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World — China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.

AI Summary. Energy security concerns, not environmentalism, are argued to drive the buildout of solar, wind, and nuclear power, since domestic generation avoids chokepoints like Hormuz, the Red Sea, and the Panama Canal. China and India are expected to demand higher strategic stockpiles of energy and other critical commodities, repricing security above efficiency.

James Stavridis and Jeff Currie Carlyle
Date Posted:

While Iran-related disruption will fade, Stavridis and Currie argue that going forward, commodity prices will increasingly reflect a “security premium” as the world fragments into a US-bloc and a China-bloc that “increasingly requires two supply chains.”

Is energy security, not environmentalism, driving renewable and nuclear buildout?

Core argument: Global deployment of new solar and wind reached 700 gigawatts in 2024, five times faster than all other energy sources combined, and China surpassed one terawatt of installed solar by mid-2025.

We anticipate that China and India will demand higher strategic stock levels of energy and every other critical commodity. Energy security crises produce the same structural response: the search for sources that do not require crossing borders and global chokepoints. Solar, wind, and nuclear are children of the 1970s oil shocks — with growth driven by security, not environmentalism. In 2024, 700 gigawatts of new solar and wind were deployed globally, five times faster than all other sources combined. China surpassed one terawatt of installed solar by mid-2025. Nuclear generated a record 2,667 terawatt-hours with 70 reactors under construction across 15 countries. Every gigawatt of domestic capacity is a gigawatt that does not transit Hormuz, the Red Sea, or the Panama Canal. This is not a rupture, but an evolution of the deglobalization that began in 2022 — the shift from just-in-time to just-in-case, the repricing of security above efficiency.

Takeaways by Macro Roundup® AI

  1. Global deployment of new solar and wind reached 700 gigawatts in 2024, five times faster than all other energy sources combined, and China surpassed one terawatt of installed solar by mid-2025.
  2. Nuclear power generated a record 2,667 terawatt-hours, with 70 reactors under construction across 15 countries, reflecting a search for energy sources that do not transit Hormuz, the Red Sea, or the Panama Canal.
  3. China and India are expected to demand higher strategic stock levels of energy and every other critical commodity, extending the deglobalization that began in 2022 from just-in-time to just-in-case and repricing security above efficiency.

Related Articles:

  • The Old Economy Begins To Take Its Revenge — The author argues that capital rotates between the financial economy's asset-light booms and the physical economy, with commodity capacity constraints and the use of critical materials as geopolitical leverage now making returns on physical investment more attractive. In this view, higher interest rates reflect the better returns and capital spending needed to expand production capacity.
  • Just-In-Case, The Possibility For Higher Commodity Prices — A decade of underinvestment alongside demand from artificial intelligence and electrification points to large copper deficits in coming years, though global inventories are not especially tight today. US tariff plans on copper drew metal into US warehouses, tightening London inventories while creating a US surplus, and copper's designation as a critical mineral gives policymakers reason to keep it there.
  • The Transition to a Higher Cost of Capital — Bond yields near 4.5% sit below the 5.5% short-term interest rate, leaving little risk premium, and those yields have been enough to draw buyers back toward normal bond holdings. The author argues yields still need to rise to a sustainable cost of capital given structurally higher fiscal and inflationary spending.

AI Summary. Demand for key rare earth elements is projected to grow about 7% annually through 2030, driven by electric-vehicle motors, consumer electronics and military uses. Output from non-Chinese producers is projected to more than quadruple with government funding support, and China's dominance of the industry is projected to slip by 2030.

Jacob Lorinc Bloomberg
Date Posted:

Bloomberg forecasts that rare earths demand will climb 7% annually through 2030, outpacing supply. Bloomberg projects that China’s dominance over the sector will “slip” by 2030 as new supply comes online.

Will new rare-earth supply keep pace with rising global demand?

Core argument: Bloomberg Intelligence expects demand for key rare earth elements to rise about 7% annually through 2030, driven by growth in electric-vehicle motors, consumer electronics and military uses.

[Bloomberg] expects demand for key rare earth elements to climb about 7% annually through 2030, fueled by growth in electric-vehicle motors, consumer electronics and military uses. Output from non-Chinese producers, meanwhile, is projected to more than quadruple. Those producers, such as MP Materials and Lynas Rare Earths are likely to ramp up output thanks to a raft of public funding from governments including the Trump administration. The report predicts that China’s dominance over the rare earths industry will slip by 2030.

Takeaways by Macro Roundup® AI

  1. Bloomberg Intelligence expects demand for key rare earth elements to rise about 7% annually through 2030, driven by growth in electric-vehicle motors, consumer electronics and military uses.
  2. Output from non-Chinese rare earth producers is projected to more than quadruple, with firms such as MP Materials and Lynas Rare Earths likely to ramp up on public funding from governments including the Trump administration.
  3. Bloomberg Intelligence predicts China's dominance over the rare earths industry will slip by 2030, though new supply falls short of rising global demand.

Related Articles:

  • How Japan Built a Rare-Earth Supply Chain Without China — Japan has reduced its reliance on Chinese rare earths, with industry estimates putting China's share of Japanese rare-earth imports at roughly 60% to 70%, down from 90% or more. Japan's alternative chain runs from an Australian open-pit mine through a separation plant in Malaysia to Japanese magnet makers supplying automakers.
  • China Slams Dozens of Japanese Companies With Export Curbs — China froze exports of "dual-use" materials with both civilian and military applications, including rare earth magnets, to 20 Japanese companies and placed 20 more on a new watch list. The move deepens a dispute with Tokyo and shows Beijing using its dominance in critical supply chains to exert diplomatic pressure.
  • U.S. Enlists Mexico, EU and Japan In Its Minerals Race With China — The U.S., Japan and the European Union announced they will conclude a memorandum of understanding on jointly supporting mining, refining, processing and recycling projects, with the U.S. and Mexico implementing a similar action plan. U.S. officials said the group of nations would set a price floor for critical minerals.

AI Summary. The US Department of War threatened to designate the artificial intelligence company Anthropic as a supply-chain risk after it refused to accept the government's terms on how its technology may be deployed. The author argues this treats a domestic company like a foreign adversary for expressing different views and making its own decisions about the use of its property.

Dean Ball Hyperdimensional
Date Posted:

Dean Ball argues the Pentagon’s designation of Anthropic as a supply chain risk is an effort to “commit corporate murder…do business on our terms, or we will end your business,” and poses a grave threat to property rights.

Should the government label a domestic AI firm a security risk?

Core argument: The author argues that Secretary Hegseth's threat against Anthropic has already done great damage even if it is narrowed to the most limited supply-chain risk designation.

Even if Secretary Hegseth backs down and narrows his extremely broad threat against Anthropic, great damage has been done. Even in the narrowest supply-chain risk designation, the government has still said that they will treat you like a foreign adversary—indeed, they will treat you in some ways worse than a foreign adversary—simply for refusing to capitulate to their terms of business. Simply for having different ideas, expressing those ideas in speech, and actualizing that speech in decisions about how to deploy and not deploy one’s property. Each of these things is fundamental to our republic, and each was assaulted—not anything like for the first time but nonetheless in novel ways—by the Department of War last week. Most corporations, political actors, and others will have to operate under the assumption that the logic of the tribe will now reign.

Takeaways by Macro Roundup® AI

  1. The author argues that Secretary Hegseth's threat against Anthropic has already done great damage even if it is narrowed to the most limited supply-chain risk designation.
  2. Under even the narrowest designation, the author contends, the government has said it will treat Anthropic like a foreign adversary—in some ways worse—for refusing to accept its terms of business.
  3. The author holds that Anthropic was targeted for holding different ideas, expressing them in speech, and acting on them in decisions about deploying its property, and that most corporations and political actors must now assume the logic of the tribe will reign.

Related Articles:

  • Anthropic and Alignment — Designating an AI company a supply-chain risk would be devastating because it depends on cloud hosting from Amazon, Microsoft, and Google, all of which hold US defense contracts, though such authority appears limited to work covered by US government contracts. The author argues governments have incentive to destroy any private firm that dictates terms to their military.
  • The Geopolitics of AI: Decoding the New Global Operating System — The performance gap between the top American and Chinese AI models narrowed from 9.3% to 1.7%, with Chinese firms relying on cheaper open-source models—DeepSeek prices usage 20-40x below OpenAI's ChatGPT. This price advantage could win adoption in developing countries and build dependency on Chinese AI ecosystems.

AI Summary. France has offered to temporarily station parts of its nuclear deterrent in allied European countries for the first time, alongside a pledge to expand its arsenal. France holds the world's fourth-largest nuclear arsenal, with about 300 warheads deliverable by four submarines or Rafale fighter jets, consuming roughly 13% of its defense budget.

Leila Abboud Financial Times
Date Posted:

The French government laid out a new doctrine of “forward deterrence” that would allow French nuclear-capable forces to be deployed outside the country. Macron also announced an expansion of the French nuclear arsenal, currently the fourth largest.

Will France station part of its nuclear deterrent in allied countries?

Core argument: Emmanuel Macron said France has offered for the first time to temporarily move parts of its nuclear deterrent to allied European countries, describing the shift as "forward deterrence" in a speech at the Île Longue naval base.

Emmanuel Macron has said France has offered to temporarily move parts of its nuclear deterrent to allied European countries for the first time, as he pledged to increase the size of the country’s arsenal. “Today, a new step of France’s deterrence can now be taken. We are entering the path of what I call forward deterrence,” the French president said in a speech at the Île Longue naval base in Brittany, which houses the country’s nuclear-armed submarines. France has the world’s fourth-largest nuclear arsenal, with about 300 warheads. They can be deployed from four submarines, at least one of which is constantly at sea, or delivered by Rafale fighter jets. Officials say France spends about 13% of its defence budget maintaining its nuclear deterrent. The US, Russia and China each possess thousands of warheads, but French doctrine holds that it needs only enough weapons to inflict “unacceptable damage” on an adversary, thereby deterring attacks on French soil.

Takeaways by Macro Roundup® AI

  1. Emmanuel Macron said France has offered for the first time to temporarily move parts of its nuclear deterrent to allied European countries, describing the shift as "forward deterrence" in a speech at the Île Longue naval base.
  2. France holds the world's fourth-largest nuclear arsenal with about 300 warheads deliverable by four submarines, at least one always at sea, or by Rafale fighter jets, and Macron pledged to increase the arsenal's size.
  3. French officials say about 13% of the country's defence budget goes to maintaining its nuclear deterrent, with doctrine holding that France needs only enough weapons to inflict "unacceptable damage" on an adversary.

Related Articles:

  • Military Youth Service, a Cold War Relic, Makes a Comeback in France — France is reviving voluntary military service as a rite of passage for young people, starting with a 10-month program aimed at recruiting 3,000 people, mostly age 18 or 19, to supplement 200,000 active troops, scaling to 50,000 a year by 2035. In a "major crisis," service would become mandatory for people with certain skills if Parliament authorizes a draft.
  • Waking the Sleeping European Giant — Europe, at roughly 500m people and a $26tn economy with world-class aerospace, shipbuilding, pharmaceutical, vehicle and weapons manufacturers, has the material basis to be a military superpower. National militaries' preference for home-country suppliers has left subscale defense firms, and common procurement could raise output and lower unit costs.
  • Will Higher Defence Spending Boost The European Economy? — Defense spending typically has a fiscal multiplier below one, meaning each euro spent raises GDP by less, so it is not a short-term growth strategy. One estimate holds that extra military spending worth 1% of GDP could lift output up to 2% long term if concentrated on research and development.

AI Summary. The U.S. Navy's intelligence office says China has accelerated nuclear submarine production from under one a year to significantly higher rates, and projects Chinese undersea forces may credibly challenge U.S. regional maritime dominance by 2040. Its next-generation Type 096 is expected to carry ballistic missiles able to target large portions of the U.S. from protected waters.

Chun Han Wong Wall Street Journal
Date Posted:

The Pentagon projects China’s submarine force will reach 80 ships by 2035, with about half nuclear-powered, up from 60 largely diesel-powered submarines today. PLAN’s new SSBNs will be able to target the US from within the first island chain.

Is China's submarine buildup set to challenge U.S. maritime dominance?

Core argument: Rear Adm. Mike Brookes, director of the U.S. Navy's intelligence office, said China's undersea forces "may credibly challenge U.S. regional maritime dominance" by 2040.

The U.S. Navy’s intelligence chief said the Chinese navy’s “undersea forces may credibly challenge U.S. regional maritime dominance” by 2040. China has already “dramatically increased its domestic submarine production capacity, accelerating production from less than one nuclear submarine a year to significantly higher rates,” said Rear Adm. Mike Brookes, director of the U.S. Navy’s intelligence office. One of China’s next-generation submarines is the Type 096, which is expected to carry ballistic missiles that can “target large portions of the U.S. from protected waters, fundamentally enhancing strategic deterrence credibility,” Brookes said, referring to waters China is able to defend.

Takeaways by Macro Roundup® AI

  1. Rear Adm. Mike Brookes, director of the U.S. Navy's intelligence office, said China's undersea forces "may credibly challenge U.S. regional maritime dominance" by 2040.
  2. Brookes said China has dramatically increased its domestic submarine production capacity, accelerating from less than one nuclear submarine a year to significantly higher rates.
  3. Brookes said China's next-generation Type 096 submarine is expected to carry ballistic missiles that could target large portions of the U.S. from protected waters China is able to defend.

Related Articles:

  • Pentagon Spends $12.6 Billion to Upgrade Surveillance of China’s Subs, Satellites — The US Department of Defense plans to spend an additional $12.6bn on surveillance of China's military maneuvers, submarines and satellites, part of nearly $152bn allocated separately from the $893bn fiscal 2026 defense spending measure. The plan includes $1bn for classified offensive cyber operations and $1bn for the Space Force's operation of Boeing's classified X-37B orbital vehicle.
  • The New Frontier for Drone Warfare Is Deep Underwater — New underwater drones can dive thousands of feet and operate for days with little human intervention, which advocates say suits them to intelligence gathering, protecting undersea infrastructure, and countering threats in the Pacific. Boeing is delivering five 85-foot Orca vehicles to the US Navy, and Australia is developing Ghost Shark with Anduril.
  • China’s Newest Nuclear Submarine Sank, Setting Back Its Military Modernization — U.S. officials say China's first Zhou-class nuclear-powered attack submarine, which features a distinctive X-shaped stern designed for greater maneuverability, sank at a shipyard near Wuhan, a setback for a priority weapons program that Chinese authorities sought to conceal.