Friday Market Thinking

Some collected thoughts on a Friday. WEF feeling uncomfortable, Taiwan cooling and new tech emerging

In our earlier post on populism, we highlighted the fact that the WEF would find itself coming under attack from populists on both the left and the rights, challenging their (one) world view. One area has been Germany, where similar to the Gilet Jaunes in France, Farmers have taken to the streets to protest against austerity measures that include removing tax exemptions on agricultural fuel (as always, incorrectly described by the bureaucrats as subsidies) in the name of the Green Leap Forward.

Reuters

Here thousands of protesters took to the streets of Berlin and while, naturally, the establishment tried to paint everything as ‘Far Right’, the reality is this is more a socialist protest than anything else. The fact that it pushes back against the Green Industrial Complex in a manner similar to the Dutch Famers is important we think.

Also making them nervous in the suites of the the Grandhotel was new Argentinian President Milei, whose barnstorming speech about the threats from Socialism was reported as an attack on Socialism, but was actually a barely disguised attack on the very bureaucrats and Crony Capitalists sat before him contemplating how people will ‘own nothing and be happy’ (while they own everything and are much happier) . In one excerpt, he makes the exact point we made in our previous post about true Capitalism being restricted by government meddling and then claims of ‘market failure’ being used to justify even more meddling.

If transactions are voluntary, the only context in which there can be market failure is if there is coercion and the only one that is able to coerce generally is the state, which holds a monopoly on violence.

Consequently, if someone considers that there is a market failure, I would suggest that they check to see if there is state intervention involved. And if they find that that’s not the case, I would suggest that they check again, because obviously there’s a mistake. Market failures do not exist.

Argentina's President Javier Milei at the World Economic Forum 2024

Meanwhile, over in Taiwan, the week began with a form of victory for the ruling DPP and was, predictably, presented as a ‘rejection of Beijing’ by the FT and the rest of the (increasingly sinophobic) western press, even though 60% of those voting voted for parties looking for closer ties with the mainland. Moreover, the more pro mainland KMT have a majority in Parliament making it difficult for the new President to pursue any aggressively pro-West policies. The US has, nevertheless, (un)helpfully immediately sent assorted officials to Taipei, since antagonising China is seemingly a key ploy for both sides in their own Election year.

Interesting that while Germany has long had coalitions and now Taipei has a coalition of sorts due to an emerging third party, whether we might get similar ‘low confidence’ mandates in places like the UK and even the US as voters become ever more disillusioned with the pantomime of two parties but the same (largely WEF) policies whoever gets in? Currently Robert Kennedy jnr has the ability to disrupt in the manner of Ross Perot in 1992 when he got 19% pf the vote (Bill Clinton got in with only 43% of the vote), while the Reform Party in the UK may struggle with the first past the post system but are currently looking to be equally damaging to the incumbents.

Superfast, built with 20 year old technology and using a fraction of the energy. China’s new AI Chip.

On a slightly related note, we came across this fascinating article from late last year about ACCEL chips. ACCEL stands for All-Analogue Chip Combining Electronics and Light (ACCEL) and while we can only bluff about the tech side of things, it seems to use photons rather than traditional circuits and that the Chinese appear to have solved some of the inherent stability problems with this technology. The long article from Nature is here, but for those that want to jump to the conclusion, here is the Too Long Didn’t Read (TLDR). Related is that this has emerged despite attempts by the US to limit China’s technological development through sanctions.

During a lab experiment, the ACCEL chip demonstrated an impressive computing speed of 4.6 PFLOPS (peta-floating point operations per second), surpassing the speed of one of the most commonly used commercial AI chips, Nvidia’s A100, by a factor of 3,000.

Additionally, researchers noted that the Chinese chip’s energy consumption is a staggering 4 million times lower.

Techovedas.com

These new Chips can’t and won’t be used for everything, but have massive application benefits in the industrial process aspects of AI, autonomous driving, visualisation, wearables and the internet of things. With the usual caveat about this not being investment advice (please do your own research and always talk to a financial advisor) it might explain why Xiaomi, ‘the Apple of China’ and heavily involved in the internet of things, had such a good run last year - only to lose it in the ‘sell everything in China panic in the last fortnight? Maybe when the markets start thinking about AI a bit more they will notice that China is a big market and its building its own kit?