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
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “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
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Monday, April 27, 2026

AI Summary. The authors find U.S. government debt has a large positive productivity beta, because the tax code makes federal revenue highly sensitive to productivity growth while spending commitments change little, leaving bondholders implicitly long productivity growth. They argue greater market confidence in sustained productivity gains from AI could substantially reprice government debt, lowering nominal yields.

Howard Kung, Hanno Lustig and James Paron Stanford University
Date Posted:
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AI‑driven productivity gains would raise the fundamental value of bonds as well as equities. Persistently higher growth would strengthen the fiscal backing of Treasurys, giving bonds a positive “AI beta,” and improving the US’s debt‑to‑GDP trajectory.

How does faster productivity growth raise the value of government debt?

Core argument: The authors find U.S. government debt has a large positive productivity beta, because the tax code makes revenue highly sensitive to productivity growth as households creep into higher tax brackets while spending commitments barely change in the short run.

We find that U.S. government debt has a large positive productivity beta: its fundamental value seems highly sensitive to the long-run productivity growth outlook. [Given] the tax code, government revenue is highly sensitive to productivity growth while its spending is not. When the economy grows faster, the government collects more tax revenue, as households creep into higher tax brackets, but its spending commitments barely change in the short run. Bondholders are long in a levered claim to GDP and short in a portfolio of inflation-indexed bonds. This means that bondholders are implicitly long productivity growth: they benefit when growth surprises to the upside, and they suffer when growth disappoints. As a result, if investors revise their estimate of productivity growth upwards, they should mark up their valuation of government debt, even if they anticipate higher real rates. If the market became more confident that AI would deliver sustained productivity gains, the repricing of government debt could be substantial. Nominal yields would decline because investors expect inflation to be lower, as predicted by the fiscal theory of the price level. In addition, the supply of Treasurys would decline as well, which would put upward pressure on the convenience yields on Treasurys. Finally, the nominal term premium would likely compress as the government’s fiscal position improves, reducing the risk of higher inflation in bad states of the world.

Takeaways by Macro Roundup® AI

  1. The authors find U.S. government debt has a large positive productivity beta, because the tax code makes revenue highly sensitive to productivity growth as households creep into higher tax brackets while spending commitments barely change in the short run.
  2. Treasury bondholders are effectively long a levered claim on GDP and short a portfolio of inflation-indexed bonds, so they benefit when productivity growth surprises to the upside and suffer when growth disappoints.
  3. The authors argue that greater market confidence in sustained AI-driven productivity gains could reprice government debt substantially, with nominal yields falling on lower expected inflation, Treasury supply declining, convenience yields pressured upward, and the nominal term premium likely compressing.

Related Articles:

  • The Budget and Economic Outlook: 2026 to 2036 — The Congressional Budget Office projects the federal deficit will grow from $1.9tn (5.8% of GDP) to $3.1tn (6.7%) over a decade, above the 3.8% averaged over the past 50 years, with rising net interest costs driving much of the increase. Federal debt held by the public is projected to rise from 101% to 120% of GDP.
  • Attention (And Money) Is All You Need: Why Universities Are Struggling to Keep AI Talent — The annual compensation gap between top industry and academic artificial intelligence researchers widened from roughly $294,000 to $1.5m, coinciding with accelerating academic out-migration toward large incumbent technology firms. Researchers who move to industry cut paper production by about 63% while increasing patent filings nearly sixfold, consistent with a shift from open science toward proprietary innovation.
  • One Hundred Years in the U.S. Stock Markets — Over a century, U.S. publicly traded stocks generated roughly $91tn in shareholder wealth enhancement, with returns strongly positively skewed and dominated by a relatively small number of high-performing firms. Because most possible outcomes fall below the mean in a skewed distribution, the authors argue financial planning should focus on median outcomes or the full distribution.

AI Summary. Earnings per share for S&P 500 companies are estimated to grow more than 13% year over year for a sixth straight quarter, with sales growth and improving margins accompanying the gains. Share buybacks are contributing less to earnings growth than in many quarters, with the gap between earnings-per-share and net income growth just under 1 percentage point.

Theo Francis Wall Street Journal
Date Posted:

Q1 results from 139 S&P 500 firms that have reported so far show earnings per share increasing 16.1% y/y, while revenue grew 9.7%. Profits and sales increasing together suggest the bottom line of American firms is strong.

Are corporate profits growing from real expansion rather than buybacks?

Core argument: LSEG estimates year-over-year earnings-per-share growth will exceed 13% for a sixth straight quarter, with sales expected to rise more than in any quarter since the fall of 2022.

Year-over-year growth in earnings per share is expected to exceed 13% for the sixth quarter running, according to estimates from financial-data firm LSEG. Sales are expected to rise more than in any quarter since the fall of 2022. For much of the S&P 500, margins are improving. The gap between profit and sales growth remains below late-2024 highs, suggesting real expansion behind much of the profit growth, in addition to cost cutting, productivity improvements and other efficiency gains. Another notable development: Rising earnings are getting the smallest assist from share buybacks that they have in many quarters. When companies buy back shares, they boost their earnings-per-share figure without actually raising net income—the bottom line. The difference between those two measures of profit is now at its smallest in more than two years, a gap of just under 1 percentage point, or half what it was six months ago.

Takeaways by Macro Roundup® AI

  1. LSEG estimates year-over-year earnings-per-share growth will exceed 13% for a sixth straight quarter, with sales expected to rise more than in any quarter since the fall of 2022.
  2. The gap between earnings-per-share growth and net income growth has narrowed to just under 1 percentage point, half its level six months ago and the smallest in more than two years, as buybacks give earnings their least assist in many quarters.
  3. Margins are improving for much of the S&P 500, and the gap between profit and sales growth remains below late-2024 highs, suggesting real expansion behind much of the profit growth alongside cost cutting, productivity improvements and other efficiency gains.

Related Articles:

  • Competitive Advantage Period: The Neglected Value Driver — Data indicate persistence in returns on invested capital has increased since 2000, with large companies the main beneficiaries; the information technology sector's aggregate return was 19% versus a 10.8% median from 1970 to 2024. Of about 13,800 U.S. public firms listing from 1976 to 2019, 18% survived.
  • The Big Money in Today’s Economy Is Going to Capital, Not Labor — Labor's share of total economic output in the US fell from 58% in 1980 to 51.4%, while profits' share rose from 7% to 11.7%. Contributing factors include weakened union and outsourcing-related bargaining power, a shift toward shorter-lived capital such as computers, software and intellectual property, and automation, with labor's share of factory value added falling from 66% to 45%.
  • End of an Era: The Coming Long-Run Slowdown in Corporate Profit Growth and Stock Returns — The authors estimate that declining interest and corporate tax rates accounted for over 40% of real corporate profit growth from 1989 to 2019, while falling risk-free rates explain the entire expansion in price-to-earnings multiples. Real earnings before interest and taxes grew slightly more slowly than in 1962–1989, at 2.2% versus 2.4% per year.

AI Summary. A proposed California ballot measure would impose a one-time 5% tax on the assets of state residents with at least $1.1bn, dedicating most of the revenue to health care. The union leading the campaign argues the tax is needed to offset federal cuts to Medicaid and other health insurance programs.

Laurel Rosenhall New York Times
Date Posted:

The SEIU claims it has collected enough signatures to get its proposed 5% wealth tax on Californians with at least $1.1B on the ballot. Several other ballot measures are gathering signatures that could undermine the proposed tax.

Will voters approve a one-time billionaire wealth tax funding health care?

Core argument: A proposed California ballot measure would impose a one-time 5% tax on the assets of state residents holding at least $1.1 billion, dedicating most of the revenue to health care.

If approved to go on the ballot, the proposal will kick off an expensive election fight that will tap into voter anxieties about economic inequality as well as concerns from business leaders that California could lose its luster as a cradle of technological innovation. The measure calls for placing a one-time 5% tax on the assets of California residents with at least $1.1 billion, and would dedicate most of the revenue to health care. The union leading the campaign, the Service Employees International Union-United Healthcare Workers West, argues that the tax is necessary to make up for cuts to Medicaid and other federal health insurance programs by the Trump administration last year.

Takeaways by Macro Roundup® AI

  1. A proposed California ballot measure would impose a one-time 5% tax on the assets of state residents holding at least $1.1 billion, dedicating most of the revenue to health care.
  2. The Service Employees International Union-United Healthcare Workers West, which leads the campaign and says it has the signatures needed for the ballot, argues the tax is needed to offset Trump administration cuts to Medicaid and other federal health insurance programs.
  3. Placing the measure on the ballot would launch an expensive election fight tapping voter anxieties about economic inequality and business leaders' concerns that California could lose its standing as a cradle of technological innovation.

Related Articles:

  • The Net Present Value of the Billionaire Tax Act: An Assessment of the Fiscal Effects of California’s Proposed Wealth Tax — A proposed one-time 5% California tax on the worldwide net worth of individuals above $1bn would have positive net present value only if its revenue exceeds the present value of income taxes lost to departing billionaires. The authors' simulations yield negative net present value in 71% of draws, averaging -$24.7bn.
  • What’s Missing in the Fed’s Data about Ultrarich Portfolios — The Federal Reserve's Distribution of Financial Accounts defines "private business" narrowly as proprietor's equity in noncorporate, nonfinancial businesses, excluding S-corporations, other private corporations, and private equity and hedge fund partnerships, which are lumped into "corporate equities." The Survey of Consumer Finances instead shows private business is roughly 45–50% of top 0.1% wealth.
  • Ed Conard Debates Furman On “The Expected Value of Risk Taking” — A debate on U.S. fiscal policy argues that spending increases, rather than the tax increases needed to fund them, slow growth, and that higher taxes would reduce the expected value of America's innovative risk-taking. The argument holds that cutting debt below 100% of GDP is critical.

AI Summary. Rare-earths producer Lynas has begun making samarium oxide at its Malaysian refinery, a mineral used in heat-resistant magnets for fighter jets and missiles that had been refined almost exclusively in China. A U.S. Geological Survey report identified samarium as the highest-risk mineral for supply disruption.

Jon Emont Wall Street Journal
Date Posted:

Lynas, an Australian miner, has started processing heavy rare-earth elements. In March, Lynas announced a preliminary $96mm deal in which the USG would directly purchase Lynas’s rare earths, suggesting China’s rare-earth controls are a wasting asset.

Can a new refinery outside China supply military-grade rare earths?

Core argument: Lynas produces samarium oxide at its Kuantan, Malaysia complex, a rare earth used in heat-resistant magnets for jet fighters and missiles that had been refined almost exclusively in China.

For more than a decade, Lynas has had a refinery in Kuantan, a Malaysian chemical-industry center. But it only produced light rare earths, which tend to be more common, while it sold heavy rare earths to China for processing. Last year, as the U.S.-China trade war was at its peak, Lynas finished a new heavy rare-earths processor in Kuantan. Last month, Lynas began producing samarium oxide, a difficult-to-source rare earth in high military demand that is used in heat-resistant magnets for jet fighters and missiles. The mineral had been refined almost exclusively in China, causing a scramble among defense suppliers last year when China cut off exports in April. A report from the U.S. Geological Survey last year found samarium was the highest-risk mineral for disruption, with shortages potentially costing U.S. industry billions of dollars.

Takeaways by Macro Roundup® AI

  1. Lynas produces samarium oxide at its Kuantan, Malaysia complex, a rare earth used in heat-resistant magnets for jet fighters and missiles that had been refined almost exclusively in China.
  2. A U.S. Geological Survey report found samarium was the highest-risk mineral for supply disruption, with shortages potentially costing U.S. industry billions of dollars.
  3. Lynas completed a new heavy rare-earths processor in Kuantan after more than a decade of producing only light rare earths there and selling heavy rare earths to China for processing.

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 Hatches Plan to Keep U.S. Military From Getting Its Rare-Earth Magnets — China is designing a "validated end-user" system that would fast-track rare-earth and other restricted material export approvals for U.S. firms while excluding companies tied to the U.S. military. The arrangement would let China ease export flows while keeping the materials away from U.S. military suppliers.
  • 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.

AI Summary. Nissan and its parts suppliers have developed electric-vehicle motor technology that cuts the rare-earth minerals used in the motor of its new Leaf by more than 90% versus the first-generation model, reducing reliance on minerals mainly produced by China. The reduction targeted heavy rare earths such as dysprosium and terbium, which improve heat resistance.

Shuhei Ochiai and Yoshika Kaku Nikkei Asia
Date Posted:

Nissan was able to reduce the intensity of rare earths in the new LeafEV motor by more than 90% relative to the first-generation Leaf released in 2010.

Can carmakers cut rare earth use in EV motors sharply?

Core argument: Nissan has cut the rare earths used in the motor of its new Leaf EV by more than 90% compared with the first-generation Leaf released in 2010, with the reduction concentrated in heavy rare earths.

Nissan Motor and parts makers have developed technology for electric vehicle motors that significantly cuts the Japanese carmaker's reliance on rare-earth minerals that are mainly produced by China. The technology has allowed Nissan to reduce rare earths used in the motor of its new Leaf EV by more than 90% compared with the first-generation Leaf released in 2010. Specifically, the use of heavy rare earths was lowered. EV motors use dysprosium and terbium to enhance heat resistance.

Takeaways by Macro Roundup® AI

  1. Nissan has cut the rare earths used in the motor of its new Leaf EV by more than 90% compared with the first-generation Leaf released in 2010, with the reduction concentrated in heavy rare earths.
  2. Nissan Motor and parts makers developed EV motor technology that significantly reduces the carmaker's reliance on rare-earth minerals that are mainly produced by China.
  3. EV motors use dysprosium and terbium to enhance heat resistance.

Related Articles:

  • How to Fight an Economic War — China earned about $3.4bn from exporting rare-earth elements and magnets in a year, while the U.S. Geological Survey estimates a 30% disruption to U.S. supply of the rare-earth element neodymium alone would cut U.S. GDP by 2.2%, over $600bn. This asymmetry gives Chinese export controls their leverage.
  • 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.
  • New Rare-Earth Supply Falls Short of Rising Global Demand From EVs and Defense, BI Says — 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.

AI Summary. China's National Development and Reform Commission has prohibited foreign investment in the artificial intelligence company Manus and required the parties to cancel Meta's acquisition of it. Unwinding the deal would be complex because Meta has already integrated Manus into some of its tools, and Beijing has signaled penalties if the transaction is not fully reversed.

Arjun Neil Alim and Tim Bradshaw Financial Times
Date Posted:

In a late-stage intervention, China has blocked Meta’s $2B purchase of Manus. Manus had relocated to Singapore following a funding round led by top American venture capital firms.

Is China blocking a foreign takeover of a domestic AI company?

Core argument: China's National Development and Reform Commission said it would prohibit "foreign investment" in AI group Manus and has "required the relevant parties to cancel" Meta's $2bn acquisition of the company.

China’s powerful National Development and Reform Commission (NDRC) said on Monday it would prohibit “foreign investment” in Manus and in accordance with the law has “required the relevant parties to cancel the acquisition transaction”. To undo the deal at this stage, Meta could have to spin off its acquisition to a new buyer, sell it back to its former investors or find new backers. Any such process would be complex, as Meta has already integrated Manus into some of its tools, the FT has reported. A person familiar with the matter said Beijing had told the two companies that the deal must be unwound completely, including returning funds, re-registering the company’s ownership and halting the Meta’s use of the Manus algorithm. The person said that if the parties failed to fully undo the acquisition, Beijing could impose penalties on Meta, limit its China-related business and possibly pursue criminal charges for individuals involved.

Takeaways by Macro Roundup® AI

  1. China's National Development and Reform Commission said it would prohibit "foreign investment" in AI group Manus and has "required the relevant parties to cancel" Meta's $2bn acquisition of the company.
  2. Beijing told Meta and Manus the deal must be unwound completely, including returning funds, re-registering the company's ownership and halting Meta's use of the Manus algorithm, according to a person familiar with the matter.
  3. Unwinding the transaction would be complex because Meta has already integrated Manus into some of its tools, with options including spinning off the acquisition to a new buyer, selling it back to former investors or finding new backers, the FT has reported.

Related Articles:

  • China and the Future Of Science — China graduates about 5x as many medical and biomedical students as the US each year, 7x as many engineers, and nearly double the number of science and engineering PhDs, while one-sixth to one-fifth of US science and engineering graduates are themselves Chinese. One study found returning Chinese scientists lead-author 2.5x more papers than peers who stay in the US.
  • White House Accuses China Of ‘Industrial-Scale’ Theft Of AI Technology — The White House Office of Science and Technology Policy accuses Chinese campaigns of using tens of thousands of proxy accounts and jailbreaking techniques to extract proprietary information from American artificial intelligence models. American AI companies argue such "industrial distillation" lets foreign labs cheaply close the US lead created by export controls on advanced chips.
  • China’s Manus Follows DeepSeek in Posing Challenge to US AI Lead — Chinese startup Manus AI launched a preview of what it calls a general AI agent that can screen resumes, build trip itineraries, and analyze stocks from basic user instructions, claiming better performance than OpenAI's Deep Research on some measures. The company has not published technical papers, code, or model weights alongside the release.

Tuesday, April 28, 2026

AI Summary. The authors estimate that billionaire departures tied to a proposed California wealth tax would cut state income, sales, and other tax collections by $3.53bn–$4.49bn a year, with a $2.77bn lower bound based only on the nine publicly identified emigres. The analysis classifies 212 California billionaires by wealth source, assuming departures retain different shares of California-source income.

Jared Walczak California Tax Foundation
Date Posted:
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Walczak estimates the 2026 California Billionaire Tax Act would reduce annual state tax revenues by ~$3.53B to $4.49B due to billionaire departures and associated spillovers. The NPV of these ongoing losses would be several times the wealth tax revenue.

How much state tax revenue would billionaire departures cost annually?

Core argument: The authors estimate the 2026 California Billionaire Tax Act would cut state income, sales, and other tax collections by $3.53 billion to $4.49 billion per year under their primary billionaire-departure scenarios.

This paper estimates ongoing annual reductions in state tax revenue under scenarios based on announced and anticipated billionaire departures. The analysis considers direct impacts on individual income and, to a much lesser extent, sales tax collections, along with spillover effects. We identify 212 California billionaires using the Forbes billionaire list and classify each based on whether their wealth is primarily held in publicly traded equity, a privately held operating business, financial fund management, or a diversified mix of sources. We use classification-specific assumptions of income loss subject to a given billionaire’s departure, assuming that only 5% of public founders’ income will remain California source after a departure, compared to 55 percent for private operating business owners, 35% for financial management, and 15% for diversified wealth. Under our primary scenarios, the wealth tax yields ongoing reductions of $3.53 billion to $4.49 billion per year in income, sales, and other tax collections. Calculations based exclusively on the nine publicly identified billionaire emigres yield $2.77 billion in recurring revenue loss and can be regarded as a lower bound. Actual out-migration almost certainly already exceeds that which has been publicly reported, and continued departures should be expected should the initiative advance.

Takeaways by Macro Roundup® AI

  1. The authors estimate the 2026 California Billionaire Tax Act would cut state income, sales, and other tax collections by $3.53 billion to $4.49 billion per year under their primary billionaire-departure scenarios.
  2. Limiting the calculation to the nine publicly identified billionaire emigres yields $2.77 billion in recurring revenue loss, which the authors regard as a lower bound.
  3. The analysis classifies 212 California billionaires from the Forbes billionaire list and assumes post-departure California-source income of 5% for public founders, 55% for private operating business owners, 35% for financial management, and 15% for diversified wealth.

Related Articles:

  • The Net Present Value of the Billionaire Tax Act: An Assessment of the Fiscal Effects of California’s Proposed Wealth Tax — A proposed one-time 5% California tax on the worldwide net worth of individuals above $1bn would have positive net present value only if its revenue exceeds the present value of income taxes lost to departing billionaires. The authors' simulations yield negative net present value in 71% of draws, averaging -$24.7bn.
  • What’s Missing in the Fed’s Data about Ultrarich Portfolios — The Federal Reserve's Distribution of Financial Accounts defines "private business" narrowly as proprietor's equity in noncorporate, nonfinancial businesses, excluding S-corporations, other private corporations, and private equity and hedge fund partnerships, which are lumped into "corporate equities." The Survey of Consumer Finances instead shows private business is roughly 45–50% of top 0.1% wealth.
  • Ed Conard Debates Furman On “The Expected Value of Risk Taking” — A debate on U.S. fiscal policy argues that spending increases, rather than the tax increases needed to fund them, slow growth, and that higher taxes would reduce the expected value of America's innovative risk-taking. The argument holds that cutting debt below 100% of GDP is critical.

AI Summary. The United Arab Emirates is leaving the OPEC oil cartel in order to produce more crude, against Saudi Arabia's interests. Already pumping about 3.7m barrels a day, above its official OPEC ceiling, the country has capacity closer to 4.5m and aims to deliver 5m, output that would help cap prices.

Javier Blas Bloomberg
Date Posted:

Before the war, the UAE was producing ~3.7mm bpd, less than its 4.5mm bpd capacity due to OPEC constraints. It will likely have the ability to deliver 5mm bpd by the end of 2027. Once the war is over, the new output will “put a lid on prices.”

Does leaving OPEC let a member pump more and cap prices?

Core argument: The UAE was pumping about 3.7 million barrels a day of crude before the war, above its official OPEC ceiling, with capacity closer to 4.5 million and a target of 5 million by the end of 2027.

Make no mistake: UAE is leaving OPEC to produce more crude — against Saudi Arabia’s interests. Abu Dhabi was careful to avoid spooking the energy market, promising “to act responsibly, bringing additional production to market in a gradual and measured manner, aligned with demand and market conditions.” But it’s clear that UAE output is only headed one way: upwards. Before the war, the country was already pumping well above its OPEC official ceiling, producing about 3.7 million barrels a day of crude. It has the capacity to produce probably closer to 4.5 million barrels, and aims to be able to deliver 5 million by the end of 2027. More UAE oil is exactly what the market will need later this year when — because it’s a question of when and how, rather than if — the Strait of Hormuz reopens. When the conflict is over, Abu Dhabi, free from the OPEC constraint, [will be] able to pump at will, providing the world with the barrels needed to rebuild [inventories], in effect putting a lid on prices.

Takeaways by Macro Roundup® AI

  1. The UAE was pumping about 3.7 million barrels a day of crude before the war, above its official OPEC ceiling, with capacity closer to 4.5 million and a target of 5 million by the end of 2027.
  2. The UAE is leaving OPEC to produce more crude, against Saudi Arabia's interests, while pledging to bring additional production to market "in a gradual and measured manner, aligned with demand and market conditions.".
  3. Free from the OPEC constraint once the conflict ends and the Strait of Hormuz reopens, Abu Dhabi would be able to pump at will, supplying barrels to rebuild inventories and putting a lid on prices.

Related Articles:

  • How Fast Can Gulf Production Recover After Reopening? — Gulf oil production is likely to mostly recover within a few months of a full and safe reopening of the Strait, given limited reported physical damage to oil fields and the likelihood that Saudi Arabia and the United Arab Emirates deploy spare capacity. Full recovery could take several quarters.
  • You Can’t Print Molecules — Rebuilding after a disruption to a key shipping strait would require governments to finance defense, strategic reserves, domestic energy production, and infrastructure at the same time that inflation expectations are raising funding costs. The author argues capital will rotate out of asset-light sectors that thrived on open sea lanes and cheap energy into asset-heavy physical ones.
  • Petrodollars. Myths and Reality — Saudi Arabia's balance of payments breakeven exceeds $90 a barrel on about 7m barrels a day of exports, so oil near $100 would not generate a large Saudi surplus. Each $10 rise in oil prices adds roughly $160bn to the import bills of Europe and South and East Asian importers.

AI Summary. OpenAI missed internal targets for reaching 1bn weekly active ChatGPT users and for annual ChatGPT revenue, according to people familiar with the goals, as Google's Gemini grew and took market share. The company has also missed monthly revenue targets and struggled with subscriber defection after losing ground to Anthropic in coding and enterprise markets.

Berber Jin Wall Street Journal
Date Posted:

OpenAI has missed internal targets for new users and revenue. Citing people familiar with the matter, the WSJ reports CFO Sarah Friar is “worried the company might not be able to pay for future computing contracts if revenue doesn’t grow fast enough.”

Is competition eroding the leading AI company's revenue and user growth?

Core argument: OpenAI missed an internal goal of reaching one billion weekly active users for ChatGPT by the end of last year and has not announced the milestone, unnerving some investors, according to people familiar with the goals.

OpenAI missed an internal goal of reaching one billion weekly active users for ChatGPT by the end of last year, according to people familiar with the goals. The company still hasn’t announced that milestone, unnerving some investors. It also missed its yearly revenue target for ChatGPT as well after Google’s Gemini saw massive growth late last year and ate into OpenAI’s market share, the people said. The company has also struggled with defection rates among subscribers, according to people familiar with those figures. OpenAI missed multiple monthly revenue targets earlier this year after losing ground to Anthropic in the coding and enterprise markets, people familiar with its finances said.

Takeaways by Macro Roundup® AI

  1. OpenAI missed an internal goal of reaching one billion weekly active users for ChatGPT by the end of last year and has not announced the milestone, unnerving some investors, according to people familiar with the goals.
  2. OpenAI missed its yearly revenue target for ChatGPT after Google's Gemini grew sharply late last year and ate into OpenAI's market share, according to people familiar with the goals.
  3. OpenAI missed multiple monthly revenue targets earlier this year after losing ground to Anthropic in the coding and enterprise markets, according to people familiar with its finances, and has struggled with subscriber defection rates.

Related Articles:

  • We’re Using So Much AI That Computing Firepower Is Running Out — Surging AI demand is straining computing capacity: Anthropic's Claude programming interface recorded 98.95% uptime over a 90-day span, below the 99.99% software companies typically promise, as its annualized revenue run rate climbed from $9bn to $14bn to $30bn. The company has capped how much usage customers can consume during weekday peak morning hours.
  • Everyone’s Looking For A Bubble. No One Sees The Stampede — A proprietary model estimates monthly artificial intelligence revenue grew roughly 18-fold in two years, from $772m to $13.8bn, with AI accounting for an estimated 23% of Google Cloud, 10% of Azure and 5% of Amazon Web Services. The model's ratio of investment to revenue fell from 6.1x to 4.7x, still historically high.
  • The Macro Implications of the AI Capex Boom — Artificial intelligence capital spending is estimated to add roughly 1.4 percentage points to US growth in one year and about 1.5 points the next, comparable to business investment's contribution during the tech bubble. A material part of that estimate reflects profits at Nvidia and a few other chipmakers that are unlikely to be recycled back into the economy.

AI Summary. Large gains in software productivity since the 1990s coincided with rising rather than falling web development employment, because demand for software grew faster than the labour needed per unit of output. Similar patterns appear in accounting, architecture, advertising, and high-tech healthcare specialisms such as lab testing and diagnostic imaging.

John Burn-Murdoch Financial Times
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John Burn-Murdoch argues that it is likely that the elasticity of demand for AI-derived services will be sufficiently high to support increased employment in many AI-impacted sectors, an example of “Jevon’s Paradox.”

Does cheaper AI-driven production raise employment instead of cutting it?

Core argument: Large increases in software productivity since the 1990s coincided with rising employment in web development, as the explosion in demand for software outstripped the reduction in labour needed per unit of code.

An often overlooked question is whether there is such pent-up demand for a product or service that, when it becomes cheaper and more abundant, consumption rises at an even faster pace. Large increases in software productivity since the 1990s were accompanied by rising, not falling, employment in web development: the explosion in demand for software far outstripped the reduction in the amount of labour required for a given amount of code production. It has been a comparable but less dramatic story for most professional services. Software has made accountants, architects, and advertising creatives more productive, but larger rises in appetite for their services mean employment has also risen. High-tech pockets of healthcare show a similar pattern, with innovations — now including AI — producing dramatic efficiency gains in lab testing and diagnostic imaging, all while employment in these specialisms continues to rise as the population takes advantage of more and better healthcare.

Takeaways by Macro Roundup® AI

  1. Large increases in software productivity since the 1990s coincided with rising employment in web development, as the explosion in demand for software outstripped the reduction in labour needed per unit of code.
  2. Software has made accountants, architects, and advertising creatives more productive, yet larger rises in appetite for their services mean employment in those professional services has also risen.
  3. High-tech healthcare specialisms such as lab testing and diagnostic imaging show dramatic efficiency gains from innovations including AI while employment continues to rise as the population takes advantage of more and better healthcare.

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  • Attention (And Money) Is All You Need: Why Universities Are Struggling to Keep AI Talent — The annual compensation gap between top industry and academic artificial intelligence researchers widened from roughly $294,000 to $1.5m, coinciding with accelerating academic out-migration toward large incumbent technology firms. Researchers who move to industry cut paper production by about 63% while increasing patent filings nearly sixfold, consistent with a shift from open science toward proprietary innovation.
  • Looking for the Ladder — The article argues that the hiring downturn in occupations most exposed to generative AI reflects interest-rate sensitivity rather than AI itself, since roughly 38% of workers in the most AI-exposed quintile work in information, finance and insurance, and professional and technical services, versus under 2% in the least-exposed quintile.

AI Summary. China's Ministry of State Security attributes youth disillusionment to ideological infiltration by foreign anti-China hostile forces, calling young people the primary targets of such efforts. Millions of young Chinese have embraced a "lying flat" mindset, rejecting pressure to overwork or leaving work entirely in an economy with limited well-paying jobs.

Hannah Miao Wall Street Journal
Date Posted:

China’s Ministry of State Security is arguing that an anti-work mindset increasingly common among the young is being driven by “foreign anti-China hostile forces,” who are carrying out a “lying-flat brainwashing” campaign.

Is China blaming foreign influence for its youth opting out of work?

Core argument: China's Ministry of State Security blamed "foreign anti-China hostile forces" for ideological infiltration targeting young people, saying in a WeChat post that the youth represent the future of the nation.

For the past several years, millions of disenchanted young people in China have embraced a mindset dubbed “lying flat.” In an economy with limited well-paying jobs, many have rejected societal pressures to overwork or have stopped working completely. [MSS] the country’s intelligence agency blamed anti-China influences from abroad for stoking youth disillusionment. “The youth represent the future of the nation and are the primary targets for ideological infiltration by foreign anti-China hostile forces,” the Ministry of State Security said in a post published on WeChat, a multipurpose Chinese social media platform.

Takeaways by Macro Roundup® AI

  1. China's Ministry of State Security blamed "foreign anti-China hostile forces" for ideological infiltration targeting young people, saying in a WeChat post that the youth represent the future of the nation.
  2. Millions of disenchanted young people in China have embraced a mindset dubbed "lying flat," rejecting societal pressures to overwork or stopping work completely.
  3. China's economy offers limited well-paying jobs, and the Ministry of State Security attributes youth disillusionment to anti-China influences from abroad.

Related Articles:

  • China’s Youth Unemployment Hits New High As Fresh Graduates Flood Market — China's National Bureau of Statistics reported the jobless rate for 16-to-24-year-olds, excluding students, rose to 16.9% from 16.1%, while the rate for those aged 25 to 29 rose to 7.7% from 7.2%, and overall urban unemployment edged up to 5.4%. A record 12.7m students, about 4% more than the prior year, are expected to graduate.
  • China Punishes ‘Excessively Pessimistic’ Social Media Users — China's internet regulator has launched a campaign to remove online content that incites "excessively pessimistic sentiment," panic, or defeatist ideas such as "hard work is useless." Authorities have punished bloggers who advocated working less, an influencer who said forgoing marriage and children made financial sense, and a commentator who said China's quality of life lags Western countries.
  • Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come — Population aging and fertility below replacement levels are connected to a revolution in family structure in which families grow smaller, fewer people marry, and voluntary childlessness becomes common across countries. As a result, families become less able to bear the demands that may be placed on them.

AI Summary. Germany's fertility rate has fallen over the past four years to an all-time low of 1.35 babies per woman, with steeper declines in the five eastern states than in western Germany. Its statistical office projects the population will shrink about 5% by 2050 and that one in four inhabitants will be 67 or older by 2035.

Olaf Storbeck Financial Times
Date Posted:

German births hit a record low of ~654,000 in 2025; the delta btw deaths and births widened to ~352,000, a postwar record. The fall in births is more pronounced in the former East Germany.

Is Germany's falling birth rate shrinking and aging its population?

Core argument: Germany's fertility rate has fallen over the past four years to an all-time low of 1.35 babies per woman, with the decline steeper in the five eastern states at 4.5% last year versus 3.2% in western Germany.

Germany has one of the bleakest demographics in Europe, with its population expected to shrink about 5% by 2050 compared with 2025. By 2035, one in four inhabitants in Germany will be aged 67 or older, according to modelling by the statistical office. The current cohort of 30 to 39-year-olds is smaller than in previous years due to the decline in birth rates after German reunification in 1990, which resulted in a rise in unemployment in eastern Germany. The number of babies born per woman has fallen over the past four years and is back at an all-time low of 1.35. The fall in birth rates is more pronounced in the five eastern German states, with a decline of 4.5% last year compared with 3.2% in western Germany.

Takeaways by Macro Roundup® AI

  1. Germany's fertility rate has fallen over the past four years to an all-time low of 1.35 babies per woman, with the decline steeper in the five eastern states at 4.5% last year versus 3.2% in western Germany.
  2. Germany's population is expected to shrink about 5% by 2050 compared with 2025, and by 2035 one in four inhabitants will be aged 67 or older, according to modelling by the statistical office.
  3. Germany's cohort of 30 to 39-year-olds is smaller than in previous years because birth rates declined after the 1990 reunification, which resulted in a rise in unemployment in eastern Germany.

Related Articles:

  • Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come — Population aging and fertility below replacement levels are connected to a revolution in family structure in which families grow smaller, fewer people marry, and voluntary childlessness becomes common across countries. As a result, families become less able to bear the demands that may be placed on them.
  • The Demographic Future of Humanity: Facts and Consequences — The authors estimate the world total fertility rate is around 2.17, below the global replacement rate of roughly 2.21, meaning humanity is already below replacement, with fertility and births falling faster than anticipated. They project middle-income countries' fertility may fall below that of rich countries outside East Asia, with emigration compounding population decline.
  • The Fight to Revive Europe’s Shrinking Rural Areas — The estimated population of predominantly rural European Union regions fell by nearly 8mn, or 8.3%, over a decade while urban population rose by more than 10mn, or 6%. Regions covering about 40% of the EU's land area and holding almost one-third of its population are seeing sustained resident declines.