Good afternoon 👋
It’s Wednesday, May 8, and here’s your succinct yet insightful weekly briefing 🚀
“Competence is how good you are when there is something to gain. Character is how good you are when there is nothing to gain. People will reward you for competence. But people will only love you for your character.”
Mark Manson
🏁 Quick Quips
Here’s a recap of last week’s headlines
💰 Berkshire Hathaway's $189 Billion Cash Puzzle: Buffett's Conundrum in Q1 2024 (FT)
In the first quarter of 2024, Berkshire Hathaway, under the stewardship of Warren Buffett, grappled with a financial paradox as its cash reserves surged to an unprecedented $189 billion. This mammoth cash pile, a testament to the conglomerate's fiscal strength, also unveiled the complexities of deploying capital in today's market milieu. Despite reporting robust earnings, with operating profits soaring 39% year-on-year to reach $11.2 billion, Berkshire encountered hurdles in finding compelling investment opportunities. Notably, the company's stock portfolio underwent significant adjustments, including the divestment of approximately $20 billion worth of equities, with Apple holdings witnessing a notable decline. Specifically, Berkshire reduced its stake in Apple by approximately 115 million shares, constituting a 13% reduction in its holdings. This strategic shift reflects Buffett's cautious approach to capital allocation, emphasising quality over quantity in investment decisions. As Berkshire navigates this investment landscape, all eyes are on the conglomerate's next move, especially against the backdrop of the ongoing leadership transition to Greg Abel.
🇨🇳🇪🇺 Xi Jinping's European Charm Offensive: Navigating Trade Tensions and Diplomatic Dilemmas (NYT)
President Xi Jinping's visit to Europe marks a critical juncture in China's diplomatic relations with key European partners, particularly amid escalating trade tensions and geopolitical complexities. With stops in France, Serbia, and Hungary, Xi's itinerary underscores China's strategic focus on cultivating alliances in Eastern Europe while navigating challenges in Western capitals. In France, Xi seeks to bolster ties and counterbalance Western narratives regarding China's role in global affairs. Key discussions with French President Emmanuel Macron revolve around trade imbalances, China's support for Russia amid the Ukraine conflict, and the future of Sino-French economic relations. Notably, Xi faces pressure to address concerns over Chinese exports, particularly electric vehicles, amid fears of a looming trade war with the European Union.
Concurrently, Xi's engagements with European Commission President Ursula von der Leyen highlight the EU's stance on fair competition and market access, underscoring the urgency for recalibrating China-EU trade dynamics. Against the backdrop of shifting geopolitical alliances, Xi's visit underscores China's strategic imperative to forge partnerships in Europe while mitigating diplomatic tensions and trade disputes.
🇰🇷 South Korea's Financial Watchdog Unveils £114 Million Illegal Short Trades by Global Banks (Bloomberg)
South Korea's Financial Supervisory Service (FSS) has revealed findings of £114 million worth of illegal short trades by nine global investment banks, shedding light on a probe initiated late last year. The violations, primarily procedural in nature, involved the shorting of 164 stocks by the undisclosed banks, with two already facing penalties and legal referrals. Notably, European banks surpassed their US counterparts in breaches, with many trades originating from their Hong Kong offices. While short selling remains a contentious issue in South Korea, with authorities imposing a ban until June 2024, the focus of the investigation has been on managing stock balances rather than unfair trading practices. The probe, spurred by accusations against two banks last October, has intensified regulatory scrutiny, with fines already levied on BNP Paribas SA and HSBC Holdings Plc. As South Korea reinforces its regulatory framework, including the development of a monitoring platform, President Yoon Suk Yeol has indicated that restrictions will persist until an electronic monitoring system is in place.
🇺🇸🇸🇦 US-Saudi Arabia Near Landmark Trade and Defence Deal Amid Israel, Palestine Diplomatic Plays (Reuters)
The United States and Saudi Arabia are in the final stages of negotiating a significant trade and defence agreement, which could potentially reshape the Middle East. The deal, expected to solidify and expand Washington's existing defence agreement with Riyadh, is a pivotal move amid failed attempts to see Saudi Arabia normalise ties with Israel. While specific details of the agreement have not been disclosed, it is anticipated to include a bilateral defence pact, granting Saudi Arabia comparable status to US allies like South Korea and Japan, offering access to advanced military technology. The pact is also likely to involve US assistance in developing Saudi Arabia's civil nuclear energy programme and collaboration in emerging technologies like artificial intelligence. A critical aspect of the deal involves Saudi Arabia normalizing relations with Israel in exchange for a pathway to a Palestinian state. However, challenges remain, particularly as Israel is opposed to a two-state solution.
P.S. Did someone forward you this email? Subscribe here for free
Global news and Market moves
💳 Mastercard profit rises on strong card spending by U.S. consumers.
🏆 Pulitzer 2024 prize winners include AP, New York Times, and ProPublica.
🇮🇱 Israel begins military operation in Rafah after Hamas agrees to a cease-fire.
📺 Netanyahu’s Cabinet votes to close Al Jazeera offices in Israel.
✈️ Second whistleblower linked to Boeing dies after brief illness.
☕ Wholesale coffee price index of robusta surged to highest level in 45 years.
🇸🇬 Amazon to invest $9bn in Singapore to boost cloud computing.
🇸🇪 Sweden prepares for Eurovision with heightened security.
⚽ Everton buyer 777 Partners accused of fraud by lender.
⚖️ Binance founder Changpeng Zhao sentenced to 4 months for money laundering.
🔀 Trump Media replaced its audit firm after the SEC barred it for 'massive fraud'.
📱 TikTok sues US government over divest-or-ban law.
🎓 Columbia cancels university-wide graduation ceremony after weeks of protests.
🇵🇦 Panama’s former security minister Jose Raul Mulino wins presidential election.
💸 Qantas to pay $79 million for selling seats on canceled flights.
📉 Tesla’s EV sales in China down 18% year-on-year in April.
🏋 Equinox just launched a $40,000 gym membership to slow down aging.
➡️ Forecast and Hindsight 👀
Did foresight meet hindsight?
🧨 Deepfake era of global politics—The World Economic Forum's 2024 Global Risks Report identifies misinformation as a significant threat to democratic processes, particularly citing the risk of inaccurate AI-generated videos.
The use of AI in Indian politics has surged, with nearly 970 million voters participating in the election process. Companies like The Indian Deepfaker, usually focused on special effects for ad campaigns and Netflix, are now handling over a dozen election-related projects.
These projects include creating holographic avatars of politicians, using audio cloning and video deepfakes for personalised mass messaging, and deploying conversational AI agents for voter calls.
Despite technological advancements, concerns about misinformation and disinformation loom large, with AI-generated videos posing a significant threat to electoral integrity.
Deepfake technology has various applications, including resurrecting deceased political figures, spreading lies about candidates, and harassing women in politics.
The proliferation raises challenges for electoral commissions, political candidates, media, and voters in verifying authenticity and combating manipulation.
🌍 Global GDP—The OECD announced on 2 May that the global economy is surpassing expectations, propelled by a resilient US economy and a faster-than-anticipated slowdown in inflation. Projections indicate that world growth will maintain a 3.1% rate from the previous year, reaching 3.2% in 2025, an upgrade from earlier forecasts of 2.9% for 2024 and 3% for 2025.
OECD Secretary-General Mathias Cormann highlighted the resilience of the global economy, declining inflation rates, and more balanced risks in the economic outlook.
The World Economic Forum's Special Meeting on Global Collaboration, Growth and Energy highlighted emerging partnerships between Africa and Gulf countries, with investment projects in Africa exceeding $53 billion in the previous year.
Policy measures are advised to ensure macroeconomic stability, enhance medium-term growth prospects, and address rising debt sustainability pressures, with a focus on innovation, investment, and labour market opportunities.
Recent data reveals a rebound in the Eurozone economy in Q1, with Germany returning to growth and other economies experiencing accelerated expansion, alongside a steady decline in inflation.
The Eurozone's GDP rose by 0.3% quarter-on-quarter and 0.5% year-on-year, following a revised downward GDP in Q4 2023, indicating a technical recession in the previous year's second half.
China's manufacturing and services growth slowed in April, while Canadian manufacturing activity also decelerated due to reduced output and new orders.
South Korea witnessed a seventh consecutive month of export growth in April, driven by increased demand for chips and record automobile sales.
Indian infrastructure output rose by 5.2% year-on-year in March, with a 7.5% increase in the previous financial year.
Brazil's unemployment rate reached 7.9% in Q1, the lowest since 2014, while Thailand experienced its first monthly inflation increase since September, rising by 0.2% in April.
Remittances to Mexico in March declined by 3% compared to the previous year, according to Bloomberg.
US consumer confidence dropped in April to its lowest level since July 2022.
Zimbabwe introduced a new gold-backed currency to combat high inflation.
Sustainable economic growth is exemplified by nations like Ethiopia, Rwanda, China, India, Bangladesh, and Vietnam, which have prioritised long-term development plans over reliance on single commodities.
📱 TikTok and SMEs— US Legislation potentially banning TikTok across the country raises concerns about its impact on businesses. TikTok, with over 150 million US users, is crucial for small and medium-sized enterprises (SMEs) to connect with customers and generate revenue.
In 2023, TikTok drove $14.7 billion in revenue for US SMEs and contributed $24.2 billion to US GDP, according to March 2024 data.
39% of SMEs consider TikTok access critical, with 69% reporting increased sales due to the platform.
TikTok's impact extends beyond the US, contributing €4.8 billion to several European countries' GDP.
Business experts warn of severe consequences if TikTok is banned, emphasising its role in customer acquisition and product promotion.
Contingency plans involve exploring alternative platforms like Instagram Reels and YouTube Shorts, but long-term effects remain concerning.
TikTok and ByteDance challenge the ban in court, arguing its unconstitutionality and impracticality, with critics questioning national security justifications and fairness in competition.
What to look out for this coming week?
💸 China’s special debt
🇮🇩 Indonesia’s Borneo mobility
💹 Global currencies: Japan’s yen, Argentina’s peso
📊 The Week in Numbers
⚛ Atomic ambition
China has significantly expanded its nuclear power capacity over the past decade, nearly tripling it according to the latest analysis by the US Energy Information Administration (EIA). With more than 34 gigawatts (GW) of nuclear power capacity added in the last ten years, the country now boasts 55 operating nuclear reactors with a total net capacity of 53.2 GW as of April 2024.
🔑 Key Data Points
China added over 34 GW of nuclear power capacity in the past decade.
The country currently operates 55 nuclear reactors with a total net capacity of 53.2 GW.
An additional 23 reactors, with an estimated 23.7 GW capacity, are under construction.
➡️ Comparison with the United States
Despite having the largest commercial nuclear fleet, with 94 reactors, the United States took nearly 40 years to achieve the same level of nuclear power capacity that China added in just a decade.
China added 37 nuclear reactors in the past decade, while the US added only two.
The US still holds the largest nuclear fleet, but China's rapid expansion is unprecedented.
🎯 Current Status and Future Plans
Nuclear power accounted for about 5% of China's cumulative power generation in 2022, despite rapid capacity growth. The country aims to increase energy security, reduce reliance on coal, and limit CO2 emissions while sustaining economic growth through nuclear power development.
Nuclear power comprises about 5% of China's total power generation.
China's long-term strategy for nuclear power development, initiated in 2011, focuses on addressing electricity demand and environmental concerns.
The country is concentrated on expanding nuclear capacity near populous regions along the eastern coast, with reactors spanning from Liaoning in the north to Hainan in the south.
⚙️ Technological Landscape
China's nuclear fleet primarily consists of pressurised water reactors (PWR), including domestically developed HPR1000 (Hualong One) and other designs such as Westinghouse's AP1000 and French EPRs.
The country aims to export nuclear technology, with a focus on its Hualong One reactor, backed by full fuel cycle capability.
♻️ Environmental Implications
Despite China's significant nuclear expansion, coal remains the primary source of electricity generation, contributing to air pollution and environmental challenges. The country continues efforts to reduce coal consumption and increase the share of non-fossil fuels in its energy mix.
🎨 Artful Revelations
Here are some of my picks for the week
📚 Exploring books:
The End of Bias: A Beginning by Jessica Nordel
Jessica Nordell's "The End of Bias: A Beginning" is an exploration of bias and its implications for society, challenging readers to confront their own preconceptions and biases in order to effect meaningful change. Through a blend of rigorous research and engaging storytelling, Nordell navigates complex topics with clarity and insight, presenting a nuanced analysis of bias in all its forms.
One of the book's main strengths lies in Nordell's ability to demystify the concept of bias, breaking it down into its component parts and exploring the ways in which it manifests in our daily lives. Drawing on a wealth of scientific research and real-world examples, she illustrates how bias can influence everything from hiring decisions to medical diagnoses, often with profound consequences for individuals and society as a whole.
At the heart of this book is Nordell's call to action, urging readers to take responsibility for their own biases and actively work to dismantle them. She offers practical strategies for recognising and mitigating bias, emphasising the importance of empathy, self-awareness, and critical thinking in the quest for a more just and equitable world.
An essential read for anyone seeking to better understand and address bias in their own lives and in society at large, with a deep delve into the intersectionality of bias, highlighting the ways in which different forms of bias can intersect and compound one another.
🖼️ Exploring the canvas:
Robert Motherwell's "Elegy to the Spanish Republic No. 110" stands as a testament to the power of abstract expressionism to evoke profound emotion and introspection. Created as part of his iconic series paying homage to the Spanish Civil War, this masterpiece invites viewers into a world of raw emotion and visceral experience.
At first glance, the work captivates with its bold, monochromatic composition dominated by sweeping black forms against a stark white background. The stark contrast between light and dark creates a sense of depth and dynamism, drawing the viewer's eye into the heart of the canvas.
Yet, it is upon closer inspection that the true power of reveals itself. Motherwell's gestural brushstrokes and layered textures invite viewers to engage in a dialogue with the canvas, each mark offering a glimpse into the artist's inner world. The painting's visceral energy seems to pulsate from the surface, conveying a sense of urgency and intensity that is both captivating and haunting.
Through its abstract forms and emotive expression, this artpiece transcends mere representation to become a meditation on the human condition itself. Motherwell's exploration of form, space, and movement invites viewers to contemplate themes of loss, struggle, and resilience, resonating with universal truths that transcend time and place.
💭 Brainwaves and Whimsy.
The Met Gala theme struck a note of ennui and was absolutely out of touch with reality.
Print is not dead! I dropped by the Spruce Gallery in Ortigas last week and it’s worth a good look-around.
“May you take time to celebrate the quiet miracles that seek no attention.”
Thanks for being here. I'll see you next Tuesday with the newest issue of Brevity Margin!
Wishing you a productive week filled with moments of tranquility,
Abigail
An incredibly insightful review of the week. As a coffee fanatic I’m shockingly alarmed by the record high price of robusta coffee. I can’t imagine what an average espresso will cost in a decade