Tuesday, August 19, 2025

"Palantir might be the most over-valued firm of all time" (PLTR)

In late pre-market trade the stock is down $2.28 at $171.75. 

From The Economist, August 12:

What would make it worth buying? 

For a few days in March 2000, as the dotcom bubble neared bursting point, Cisco was the world’s most valuable company. Now the seller of networking gear is a cautionary tale, even if it is also an enduring success, with real earnings per share of four and a half times what they were back then. Investors became so exuberant about the firm’s prospects 25 years ago that they valued it at more than 200 times its annual profit, around $1trn in today’s money. Starting from a valuation that stratospheric, Cisco’s solid-but-unspectacular growth was a bitter disappointment. Its market value is now $280bn.

No one can accuse Palantir, a data-analysis outfit and the most searingly hot stock of 2025, of unspectacular growth. It reported revenue of $1bn for the second quarter of this year, 48% higher than for the second quarter of 2024 and quadruple the figure for the same period in 2020. Silicon Valley types seek out companies satisfying the “rule of 40”, meaning that the sum of their operating margin and year-on-year sales growth, both expressed in percentage points, is higher than 40. Palantir’s score on that measure is 94: higher than any other enterprise-software firm with equivalent or greater sales. Among the world’s 25 biggest companies by market value—of which Palantir is one—only Nvidia, with its near-monopoly on artificial-intelligence chips, scores higher.

Any investor would want a piece of that. The trouble is that Palantir’s market value has already soared to $430bn (see chart 1), more than 600 times its past year’s earnings and nearly triple the equivalent multiple for Cisco (or, indeed, Nvidia) at its peak. Software firms often prefer to express their valuation in terms of underlying sales, which puts Palantir’s multiple at around 120. For comparison, in 2005, the year before the Oxford English Dictionary added the verb “Google”, Google’s price-to-sales ratio peaked at 22.

You need not look far to explain why Adam Parker of Trivariate Research, an investment firm, has published a note entitled “Could Palantir be the best short idea?” Writing in late May, he examined the ratio of enterprise value (which adjusts market value to account for debt and cash on the balance-sheet) to forecast sales for the coming year. On this measure Palantir then scored 73 and now scores 104. Mr Parker looked for other listed companies that had hit a multiple of 70 since 2000. Excluding financial firms and those with annual revenue of less than $50m, he found 14, the largest of which has a market value around a quarter of Palantir’s. That was Strategy (formerly MicroStrategy), a firm that sells some software but pitches itself to investors as a “bitcoin treasury company”, with a value derived from its cryptocurrency holdings rather than its sales.

Mr Parker also looked at the shareholder returns such companies have generated. He first lowered the bar to an enterprise-value-to-sales ratio of 30, since so few firms have ever hit Palantir’s heights. He then measured their subsequent returns after first hitting this level, relative to the S&P 500 index (see chart 2). A year after its multiple first hit 30, the median firm had underperformed the index by 22% and seen its multiple contract to 18.

What, then, would it take to make Palantir’s shares worth buying? The firm helps everyone from spooks to fast-food chains analyse their data better and thereby improve their operations. Its blistering recent growth comes, in large part, from enthusiasm over adopting AI for such purposes. Palantir’s competitive advantage derives not just from its software and clever engineers, but from a high-level security clearance allowing it to process classified information from America’s defence and intelligence agencies. This gives it a “moat” with which to fend off competitors.....

....MUCH MORE 

Here's the six-month chart from TradingView showing the all-time high ($190.00) and the gap-up:

 

Oaktree's Howard Marks on Price and Value

From Bloomberg, August 18:

US Stocks Look Even Pricier Now Than In January

As Howard Marks of Oaktree Capital points out, it might be time to focus more on defensive investing. 

You’re not imagining it, US markets are pricey

Howard Marks at Oaktree Capital is one of the most reliable sources of genuinely approachable market wisdom in markets. His latest memo is an excellent example.

He lucidly explains the difference between “price” and “value,” examining the drivers of each. If there’s a beginner investor in your household, you could do a lot worse than print them a copy of this memo and get them to read it. It’ll give them a far better understanding of how markets really work than many of the theory books.

Anyway, I thought we’d discuss this memo today because Marks has decided it’s time to take a look at US equity market valuations again. This has been a topic we’ve spent a fair bit of time on in the recent past.

Marks makes the point that US equities (as measured by the S&P 500 headline index) were pretty expensive by historic standards at the start of the year. But he wasn’t overly concerned because sentiment-wise (in his view — I’m not sure I agreed) the market didn’t look too bubbly.

Tariff announcements in April and ensuing trade war fears saw the S&P 500 fall hard. But, in local currency terms at least, the market has rebounded sharply and is now back at new highs.

Yet, as Marks points out, while the tariffs may not be as bad as expected, they’re still worse, trade-wise, than the status quo. Inflation is still a worry and pushing back against the prospect of interest rate cuts. The US’s status as a reliable ally is more questionable than it was. And there’s no sign of the public sector balance sheet being repaired any time soon.

In short, “the value proposition in US stocks seems to be less appealing today than it was at year-end — and even then it wasn’t great.” And this time, Marks reckons that sentiment — with the return of “meme stocks,” for example — looks rather more bubbly than it did at the turn of the year.

What’s driving this? Investor optimism is based partly on a lengthy period in which “buy the dip” has been the best strategy when it comes to US stocks, which has contributed to the sense that “there is still no alternative” to the US. Meanwhile the sector-specific “big exciting story” is the rise of AI, onto which virtually any hope for growth can be pinned.

What To Do About It

But what do you do about it? In his memo, Marks reiterates that a market being overvalued does not mean that it’s “sure to go down soon.” However, it might be sensible for investors to “reduce aggressive holdings and increase defensive holdings.”

He doesn’t elaborate on what those might be, but as we’ve discussed here a few times, cheaper assets can be seen as being more defensive than expensive ones, because there is more scope for bad news priced into the former than the latter.

Meanwhile, when it comes to catalysts for another move lower — Michael Hartnett over at Bank of America reckons we might see it as soon as next week. More specifically, he thinks that a “dovish” outcome at the Jackson Hole meeting might be what the market has been waiting for, as investors who bought the market hoping for reassurance from Federal Reserve boss Jerome Powell actually get it, and then “sell the news.”

Just like the rest of us, Hartnett and his team have no crystal balls. So unless you’re an ardent and experienced gambler, trying to place bets on exactly when the downside might materialise is a fool’s errand. Shortselling is a noble art, but one whose practitioners rather too frequently end up being carried out on their shields....

....MUCH MORE 

"Analysis-China's overcapacity crackdown faces litmus test in solar sector"

From Reuters, August 19: 

  • Polysilicon cartel is China's most concrete plan yet against overcapacity
  • Plan might face opposition from small producers, local governments
  • Its success is seen as a test for Beijing's supply-side reform 

China's efforts to curb industrial overcapacity face their first test in the indebted and bloated polysilicon sector, a key cog in solar cell production, where analysts say it is easiest for Beijing to intervene but still difficult to succeed. 

Under the plan, devised by industry players in the presence of Chinese regulators, big producers will pool 50 billion yuan ($7 billion) to buy out the least efficient facilities and shut them down, then form a cartel to halt relentless price wars. 

Ideally, when prices rise, the loss-making producers will turn profitable and reimburse the debt incurred in the process. Reduced output and higher polysilicon costs would force solar panel makers - which can produce roughly twice as much annually as the world buys and have been a source of trade tensions between China and the West - to consolidate. 

But analysts see risks at every stage of this plan.
First, it is unclear if the industry can agree who's in or who's out of the cartel.
GCL Technology Holdings (3800.HK), one of the biggest producers, said earlier this month cartel planning was close to wrapping up but declined to provide details of the other participants. 

Banks - whose incentive to finance this acquisition is to ensure that what they rate as a "safe" sector doesn't turn to "risky" - would likely be involved in the process, said Dan Wang, China director at Eurasia Group.
Analysts warn local authorities, who have strived to fulfil Beijing's strategic green energy vision by handing out subsidies, tax breaks and cheap land to the sector, may not want the solar supply chains on their turf to shut. 

"Which local government is going to let go of their industry first?" said Max Zenglein, senior economist for the Asia-Pacific at The Conference Board research group. "They're going to be very cautious."
Finally, even if the cartel does form, any success creates the conditions for failure: after prices climb, members might be tempted to raise output and reap the profits. 

Reformers face all these risks despite the industry having fewer players and fewer supply chain inputs than most other sectors in the world's second-largest economy, where overcapacity is endemic and deflationary, and threatens trade relations and long-term growth....

....MUCH MORE 

As noted exiting an August 4 post:

....Apparently the whole damned economy was overbuilt. Most recently:

July 5 - "China's top leaders vow crackdown on price wars as deflation risks mount"

May 28 - "Chinese EV Stocks Tumble After BYD Slashes Prices Up to 35%"

May 29 - Whoa!—Chinese Electric Vehicles: "The Evergrande of the automotive industry already exists; it just hasn't collapsed yet."

June 3 - Chinese Government Warns Against Electric Vehicle Price War

But since the covid reopening it has been apparent what is going on in the wider economy:

The Great Wall Of Debt: "China Needs $3 Trillion Local Debt Solution, Top Economist Says"
That is such an enormous drag on the local economies. Think Chicago, cubed, or to the fourth. Eventually everything just grinds to a halt, stasis, entropy, death.

"Banks cut China growth forecasts over tariffs, deflation"

"China risks a spiral into deeper deflation as it diverts U.S.-bound exports to domestic market"

"China's May industrial profits slip back into sharp decline"

July 22 - "China’s Problem With Competition: There’s Too Much of It"

August 1 - Solar: "China polysilicon firms plan $7 billion fund to shut a third of industry capacity"

Those are just in the last four months.  

"S&P affirms US 'AA+' credit rating, cites tariff revenue"

From Reuters, 

S&P Global on Monday affirmed its 'AA+' credit rating on the U.S., saying the revenue from President Donald Trump's tariffs will offset the fiscal hit from his recent tax-cut and spending bill.
 
Trump signed the massive package of tax-cut and spending bill, dubbed the 'One Big Beautiful Bill Act', into law in July. The bill, which delivered new tax breaks, also made Trump's 2017 tax cuts permanent.
 
"Amid the rise in effective tariff rates, we expect meaningful tariff revenue to generally offset weaker fiscal outcomes that might otherwise be associated with the recent fiscal legislation, which contains both cuts and increases in tax and spending," S&P said in a statement.
 
"At this time, it appears that meaningful tariff revenue has the potential to offset the deficit-raising aspects of the recent budget legislation."
 
The U.S. reported a $21 billion jump in customs duty collections from Trump's tariffs in July but the government budget deficit still grew nearly 20% in the same month to $291 billion....
....MORE 
 
So hey, don't be shy about buying some 30-year paper.
If interested see also:

"Mainland Chinese stocks steady at 10-year high as investors remain bullish"

From the South China Morning Post, August 19:

Shanghai Composite Index rises 0.3 per cent as it hovers at highest close since August 19, 2015 

Mainland Chinese stocks were steady on Tuesday after a key benchmark rose to a 10-year high, as traders expect the rally fuelled by a rotation from fixed-income investments to continue.

The Shanghai Composite Index advanced 0.3 per cent to 3,739.26 at the break, heading for the highest close since August 19, 2015. The CSI 300 Index climbed 0.1 per cent.

In Hong Kong, the Hang Seng Index added 0.2 per cent, while the Hang Seng Tech Index rose 0.1 per cent.

Mainland stocks are in focus as the market reverses years of declines and bucks a slowing economy, with investors rotating out of low-yielding fixed-income products to chase higher returns. A part of the 160 trillion yuan (US$22.3 trillion) household savings built up since the Covid-19 pandemic is expected to shift into stocks due to falling deposit rates and a continuing downturn in property prices, according to analysts.

“We’ve seen long-term capital and individual investors piling into the equity market,” said Li Xuewei, a strategist at HSBC Jintrust Fund Management in Shanghai. “Approaching US rate cuts and abundant overseas liquidity have also boosted risk appetite. China’s excessive household savings may flow into the stock market and fuel further gains.”....

....MUCH MORE 

Most recent related posts:

....On the other hand Chinese large-cap equities are up 17-odd-percent from recent (April) lows and are up ~27%. in the last twelve months. Here's our bogey, the Shanghai - Shenzhen CSI300 index via TradingView

 

"A new giant Ukrainian cruise missile is rumored to carry a 1,000-kg warhead for strikes 1,800 miles deep inside Russia"

 Big if true. Big if, true. Big.

From Business Insider, August 18:

  •  Ukraine announced it has begun serial production of a cruise missile said to carry a 1,000-kg warhead.
  • The Flamingo is rumored to have a range of 1,800 miles and looks to be a huge conventional weapon.
  • A missile of such range and power could allow strikes on vital production hubs deep inside Russia.

Ukraine has started making a new cruise missile said to be capable of carrying a 1,000 kg warhead with a range of 1,800 miles, according to its defense minister.

Denys Shmyhal, who was appointed as defense minister in July, said at a public event on Monday that serial production of the missile, dubbed the Flamingo, had begun.

The minister declined to discuss the missile further, saying that more details would be disclosed "when the right time comes."

But his announcement comes a day after other sources in Ukraine reported on its specifications. Efrem Lukatsky, an Associated Press photographer, published an image on Monday of a large missile that he identified as the Flamingo.

Lukatsky's Facebook post said the photo was taken on Thursday at a workshop run by Fire Point, a Ukrainian defense company. He also wrote that the missile had a range of 3,000 kilometers, or roughly 1,800 miles....

....MUCH MORE 

Monday, August 18, 2025

Monterey Car Week: "A Stellar Hispano-Suiza Takes Best of Show at the 2025 Pebble Beach Concours d'Elegance"

From Car and Driver, August 17: 

1924 Hispano-Suiza H6C 'Tulipwood' Torpedo by Nieuport-Astra is the big winner at the annual celebration of automotive beauty and tradition. 

A 1924 Hispano-Suiza H6C Nieuport-Astra Torpedo was just deemed Best of Show, the top honor among the billions of dollars' worth of exclusive vintage vehicles displayed at the 2025 Pebble Beach Concours d'Elegance.

The car is owned by Penny and Lee Anderson of Naples, Florida, who purchased it three years ago at the Sotheby's auction right in Pebble Beach. "The people who represented the sale of this car said it was a potential Pebble Beach winner, and they were right," Lee Anderson told Car and Driver from the judges' stand, moments after receiving the designation.

https://hips.hearstapps.com/hmg-prod/images/hispano-suiza-68a2736566f97.jpeg?crop=1xw:0.91440329218107xh;center,top&resize=980:* 

The yacht-like, mahogany-bodied, aluminum-riveted, torpedo-shaped sporting cruiser just emerged from a two-year restoration less than a week ago—using vintage wood—and was shipped directly to the concours. "If you're into collecting classics, we all know these wood-bodied cars, and this one hasn't been shown before," Anderson says. "How many do you see?"....

....MUCH MORE, including prior winners

As noted yesterday Car and Driver had been liveblogging all week and clicking through will get you to: "These Are Our Editors' Extremely Unofficial Picks for Best Cars from Pebble Beach"

Earlier today: Monterey Car Week: "2025 Bonhams Cars Quail Auction: Top 10 Results And Highlights" 

Monterey Car Week: "2025 Bonhams Cars Quail Auction: Top 10 Results And Highlights"

Following August 17's "2025 RM Sotheby’s Monterey Auction: Top 10 Results And Highlights".

From The duPont Registry, August 17:

This year’s Bonhams|Cars Quail Auction at the 2025 Monterey Car Week set the tone for the weekend with a truly incredible lineup of some of the world’s most sought-after automobiles being offered for sale. As one of the top auctions to watch this year, over 700 enthusiastic bidders were in attendance at the Quail Lodge & Golf Club in Carmel, California, where 109 cars crossed the block and racked up $44.7 million in total sales. With a 96% sell-through rate, this was one of Bonhams’ strongest Monterey showings in years.

The headline came from a 2020 Bugatti Divo that we featured last week with a pre-auction estimate of between $7.0-$9.0 million. The gavel finally dropped on this 1-of-40 Divo at $8.6 million, a new auction world record. That figure comfortably eclipses previous Divo results, showing how demand for modern Bugattis has surged. With fewer than 800 miles on the odometer and provenance that also included a display at the Petersen Museum’s “Hypercars: The Allure of the Extreme,” this particular example checked every box for collectors. 

Other modern Bugattis followed closely. A 2021 Chiron Pur Sport achieved $3.96 million, while a 2023 Chiron Super Sport brought in $3.4 million. These results raise an interesting question for potential buyers: Is now the time to get into modern Pïech-era W16 Bugattis, as the French marque brings its century-long gas-powered lineage to a close, with the upcoming Hybridized V16 Tourbillon?....

....MUCH MORE

10. 1938 Alfa Romeo 6C 2300 B Mille Miglia Berlinetta

$687,000


9. 1956 Ferrari 250 Europa GT

$1,512,000


"The Stock Market Thought Solar Was Dead Under Trump But This Is Why Stocks Are Roaring Back" (FSLR; RUN; SEDG)

From Investor's Business Daily, August 18:

The stock market believed that President Donald Trump's "Big Beautiful" budget was a death knell for solar, with its cuts to clean energy and doubling down on fossil fuels. However, solar stocks are not dead and the sector broadly advanced Friday as the Treasury department issued guidance for clean energy projects to receive federal tax incentives.

On Monday, Sunrun (RUN) and NextTracker (NXT) roared higher after upgrades, to outperform and buy, respectively. Sunrun added 10.4%, NextTracker climbed more than 8%, at Monday's stock market open.

On Friday, the 27 stocks in the IBD-tracked Energy-Solar industry group collectively jumped 11.6%. Leading the charge, Sunrun galloped 32.8% higher on Friday' stock market trade, while and SolarEdge Technologies (SEDG) advanced slightly more than 17%.

Meanwhile, Nextracker jumped 12.2% and First Solar (FSLR) angled 11% higher Friday.

The advance of solar stocks late last week followed Friday's Department of the Treasury release which made clear that wind and solar projects can qualify for federal tax credits if they have either begun "physical work" or a 5% investment in projects by July 2026.

Guidance A Positive For Solar 
Analysts responded positively to the Trump administration's guidance....

....MUCH MORE 

Engineering: "This $200 high-tech bra is flying off shelves, thanks to Taylor Swift"

From The Hustle (Your 5-minute brief on business & tech news), August 17:

Launching and scaling a startup is no easy task. That is, unless you have Taylor Swift backing your product.  

The pop star’s economic pull is so strong, she can turn a one-off outfit appearance into a sell-out, a casual lyric into a travel pilgrimage — and, apparently, an unsexy, medical-grade garment into a viral must-have.

Forme Science’s Power Bra — a $182 FDA-registered, posture-correcting wearable — saw sales climb 400% in 2024 after fans spotted her wearing the undergarment in an Eras Tour photo, per Inc.

But while Swift's approval gave the bra a major lift, its lasting success is thanks to its innovative design and versatility.

How it work

  • Instead of straps, braces, or tape, the Power Bra uses eight fabric panels with varying tensions to gently pull your shoulders back and align the spine.
  • It helps relax overactive upper back muscles while activating underused lower back muscles to retrain posture and alleviate pain.

Forme Science founder Stephen Liu, a 65-year-old former orthopedic surgeon, and his son (probably not the masterminds you imagined behind the bra) worked with textile and biomechanical engineers to design it after observing his mother’s posture deteriorate during late-stage cancer....

....MUCH MORE

Previously on the bra beat:

....Among the many ceremonies we've linked to, the 2013 event stands out as especially far-seeing/borderline psychic:

"Announcing: The 2013 Ig Nobel Prize winners"

From Harvard's own Improbable Research:

"The Ig Nobel awards are arguably the highlight of the scientific calendar." —Nature 2009
 
 2009 Public Health prize demonstration
Public Health prize demonstration Ig Nobel Prize Winner Dr. Elena Bodnar demonstrates her invention (a brassiere that can quickly convert into a pair of protective face masks) assisted by Nobel laureates Wolfgang Ketterle (left), Orhan Pamuk, and Paul Krugman (right). Photo credit: Alexey Eliseev, 2009 Ig Nobel Ceremony ....  

"China to continue stimulating consumption, premier says" (Party Time in Asset Markets)

From Reuters, August 18:

China will continue to boost consumption and protect people's livelihoods, expanding the country's positive growth trend, Premier Li Qiang told a State Council plenary meeting on Monday.
 
Li, whose comments were broadcast by China's state broadcaster China Central Television, said authorities would strive to achieve the full year economic growth target set at roughly 5%.
 
China would "remain calm and actively respond to various uncertainties", Li said, noting a "severe and complex external environment."....
....MUCH MORE 
 
This, combined with India's stimulative policies, The extraordinary American budget deficits and Germany's military Keynesianism means there is a an almost absurd amount of liquidity sloshing around.
 
And as our old pal Mssr. Cantillon pointed out all those years ago, the people who get the new money first don't buy things with it, thy buy assets.
 
Partay! 

"Modi gives tax boon to India’s economy amid Trump tariff tensions"

From CNBC, August 18: 

  • Markets rallied following Indian Prime Minister Narendra Modi’s announcement of tax cuts set to boost domestic consumption.
  • India’s economy is battling with the challenge of prospectively steep U.S. tariffs exacerbated by its Russian crude purchases.
  • India’s autos industry could also emerge as one of the beneficiaries of the new tax policies.

Indian markets rallied on Monday as Prime Minister Narendra Modi’s recently revealed tax cuts extended a gift to a domestic economy that still faces the teeth of U.S. tariffs.

The Nifty 50 index advanced 1%, with the BSE Sensex adding 0.84%. In currencies, the U.S. dollar surrendered 0.18% against the rupee.

In an extensive Independence Day speech on Friday, Prime Minister Narendra Modi made a concerted push for self-reliance and proposed a spate of financial reforms. New Delhi now plans a two-rate structure of 5% and 18% under wide-spanning changes to the goods and services tax (GST) regime, and plans to abolish the previous 12% and 28% levies imposed on some items, Reuters cited a government official as saying on Friday. The news was also reported by local media....

....MUCH MORE 

Yesterday President Trump's senior adviser for trade, Peter Navarro, wrote very bluntly:

India’s purchase of Russian oil has to stop, says US trade adviser
The US official says India’s import was giving Moscow ‘the dollars it needs’ as he accused New Delhi of cozying up to China and Russia. 

Related, August 17 - "Can India Survive the Trade War?"  

Follow-up: SoftBank Was Purchaser Of Foxconn Ohio Plant; From Here It Gets Interesting

Following on August 16's "Foxconn says EV sales are so slow it's converting a factory to build AI servers instead".

From Nikkei Asia, August 18:

Taiwan's Foxconn on Monday confirmed that SoftBank is buying its factory in Ohio and that it will work with the Japanese company to build AI data centers in the state under the $500-billion Stargate project, part of U.S. President Donald Trump's manufacturing push.

Foxconn Chairman Young Liu said his company, which is also a key Nvidia and Apple supplier, has already started working with SoftBank on the project. He added that the Ohio factory, which previously produced electric vehicles, has the electricity and land needed to build AI infrastructure.

"Timing was also a crucial factor. [Stargate] can't wait for too long. ... We and SoftBank both think Ohio is a very suitable place, and we've been working on it for more than six months," Liu told reporters in Taipei ahead of a routine meeting of the Taiwan Electrical and Electronic Manufacturers' Association (TEEMA).

"The Ohio factory is quite different now than before," Liu added....

....MUCH MORE 

The reporter notes "The Ohio facility covers 6.2 million sq. feet (576,000 sq. meters)" 

I should buy a roofing company. 

"China’s $11 Trillion Stock Market Is a Headache for Both Xi and Trump"

From Bloomberg via MSN, August 17:

At the heart of why consumers in China save so much and spend so little, and why Xi Jinping and Donald Trump will struggle to change that behavior even if they want to, lies the country’s stock market.

Even after a recent rally, Chinese indexes have only just returned to levels seen in the aftermath of a dramatic bubble burst a decade ago. Instead of incentivizing consumers to spend, poor equity returns have nudged them toward saving. A $10,000 investment in the S&P 500 Index a decade ago would now have more than tripled in value, while the same amount in China’s CSI 300 benchmark would’ve added just around $3,000.

Part of the reason, long-term China watchers say, is structural. Created 35 years ago as a way for state-owned enterprises to channel household savings into building roads, ports and factories, exchanges have lacked a strong focus on delivering returns to investors. That skew has spawned a host of problems from an oversupply of shares to questionable post-listing practices, which continue to weigh on the $11 trillion market. 

The country’s leaders are under pressure to fix this. President Xi is counting on domestic spending to reach the 5% economic growth goal, especially as a tariff war with the US heats up over the massive trade imbalance. At the same time, Beijing has reasons to keep prioritizing the market’s role as a source of capital: the country needs vast funding to nurture companies that underpin its tech ambitions — even if their profitability remains questionable. 

“China’s capital market has long been a paradise for financiers and a hell for investors, although the new securities chief has made some improvements,” Liu Jipeng, a securities veteran who teaches at China University of Political Science and Law, said in an interview. “Regulators and exchanges are always consciously or unconsciously tilting toward the financing side of the business.”....

https://img-s-msn-com.akamaized.net/tenant/amp/entityid/AA1KH7ml.img?w=768&h=443&m=6 

....MUCH MORE 

Additionally trillions of yuan in retirement savings are tied up in never-occupied (and deeply underwater) apartments and after ten or fifteen years they are losing that "new apartment smell." 

December 22's [2021] "CORRECTION—China Does NOT Have 90 Million Empty Apartments"

It's only 30 million.

In the introduction to last Sunday's "China's Credit Impulse Is Positive As Global Credit Impulse Goes Negative" someone (ahem) wrote:

What's this have to do with the price of copper in China?
And will China start tearing down those 90 million empty apartments and recycling the metals?
So many questions.....
A good example of the "read too fast, process too slow" problem. My retention of the Bloomberg story from last September was good, unfortunately I retained the wrong number....

On the other hand Chinese large-cap equities are up 17-odd-percent from recent (April) lows and are up ~27%. in the last twelve months. Here's our bogey, the Shanghai - Shenzhen CSI300 index via TradingView

 

Sunday, August 17, 2025

"Humanoid Robots Have a Serious Design Flaw, And We Need to Fix It"

What's this "we", puny human?

From ScvienceAlert, August 17: 

Watch Boston Dynamics' Atlas robot doing training routines, or the latest humanoids from Figure loading a washing machine, and it's easy to believe the robot revolution is here.

From the outside, it seems the only remaining challenge is perfecting the AI ( artificial intelligence) software to enable these machines to handle real-life environments.

But the industry's biggest players know there is a deeper problem. In a recent call for research partnerships, Sony's robotics division highlighted a core issue holding back its own machines.

It noted that today's humanoid and animal-mimicking robots have a "limited number of joints", which creates a "disparity between their movements and those of the subjects they imitate, significantly diminishing their … value"....

....MUCH MORE 

This, as the First World Humanoid Robot Games wrap up in Beijing. From China's outward-facing propaganda organ, Global Times, August 17:

....In highlight events, Unitree Robotics clinched gold medals in the 1,500 meters, 400 meters, 4x100 meters relay and 100-meter hurdles. Beijing Innovation Center of Humanoid Robots's the Tiangong Ultra robot won the 100-meter sprint with a time of 21.50 seconds. In 5v5 football final, Tsinghua University's Hephaestus team defeated Germany's HTWK Robotics+Nao Devils 1-0 to claim the title, while China Agricultural University Mountain &Sea team secured the 3v3 football championship....

....MUCH MORE 

Here's a minute from the Associated Press: 



In many ways the robots don't seem to have advanced that much since our November 2012 post "Robot Soccer Goes Big Time": 
The rule of thumb in soccer betting, bot or human, is "NEVER ever take the over".


And the Chinese announcers certainly aren't as into "the beauty, the grace, the almost effortless athletic ability" as these two in the older spectacle.

If interested here is 100 minutes of highlights:

"2025 RM Sotheby’s Monterey Auction: Top 10 Results And Highlights"

From the duPont Registry, August 17:

https://news.dupontregistry.com/wp-content/uploads/2025/08/Daytona-SP3-Monterey-Sale-Record-scaled.jpg 

As one of the top 10 auctions of the year, we expected plenty of action from the 2025 RM Sotheby’s Monterey Sale, and the event certainly delivered big. But one thing becomes clear when you look at the auction results: Ferrari still rules the collector car market. The headline lot, a 2025 Ferrari Daytona SP3 “Tailor Made,” went under the hammer for $26 million (all proceeds going towards charity) and instantly set the tone for the weekend, and established the highest price of Monterey Car Week.

Why does that number matter? Part of the Icona Series, Ferrari only built 599 examples of the Daytona SP3, but this particular one, customized through the factory’s Tailor Made program, features a two-tone carbon-fiber and Giallo Modena livery, and is a “599+1” entry beyond the original run. That level of personalization, coupled with delivery mileage, explains why a two-year-old car commanded more than most seven-figure classics and vintage beauties. 

In the weeks leading up to this year’s Monterey Car Week, we’ve already broken down this one-off Daytona SP3 in more detail, alongside two other standouts: the 1993 Ferrari F40 LM by Michelotto and the 1-of-2 1995 Ferrari F50 finished in Giallo Modena and once owned by Ralph Lauren. These three alone accounted for nearly half of the auction’s total top ten value, bringing more than $46 million.

Modern-era Ferraris held strong alongside vintage models. A 2017 LaFerrari Aperta hammered at $6.7 million, while another 2015 example reached $5.2 million. The 1958 Ferrari 250 GT Cabriolet Series I and the 1955 Ferrari 375 Plus Spyder each sold for $5.2 million, confirming that classic Ferraris remain as relevant as ever. 

However, RM’s sale wasn’t all about Maranello, as a few Pre-war legends also made their mark. A 1935 Mercedes-Benz 500 K Special Roadster achieved $5.34 million where whereas a 1935 Duesenberg Model J Torpedo Phaeton by Walker-LaGrande reached $4.4 million, and a 1989 RUF CTR1 ‘Yellowbird’ Lightweight rounded up the top 10, with seven of them wearing a prancing horse badge.

To sum it all up, it appears that even Modern-era Ferraris are now becoming blue-chip assets, part of a growing Alternative Investment class. Rarity combined with documented provenance drives bidding wars. So if you’re watching the market, sales like this show you don’t need pre-war status alone to command record numbers.

For context, Bonhams also posted strong results at Monterey, also leaning into hypercar territory with cars like the Bugatti Divo, Apollo Intensa Emozione, and Pagani Huayra. While Bonhams sold the future, RM Sotheby’s celebrated Ferrari’s heritage, and the results highlight exactly where collectors’ focus and capital are flowing this year.

10. 1989 RUF CTR1 ‘Yellowbird’ Lightweight
$4,295,000
 

https://news.dupontregistry.com/wp-content/uploads/2025/08/1989-RUF-CTR1-Yellowbird-Lightweight-1536x864.jpg 

9. 1935 Duesenberg Model J Torpedo Phaeton by Walker-LaGrande
$4,405,000

https://news.dupontregistry.com/wp-content/uploads/2025/08/1935-Duesenberg-Model-J-Torpedo-Phaeton-by-Walker-LaGrande-1536x864.jpg 

....MUCH MORE 

Car and Driver has been live-blogging the 2025 Pebble Beach and Monterey Car Week while our interest is in the auctions* and the Concours d’Elegance. More tomorrow.

"BlackRock’s Fink appointed as interim co-chairman of World Economic Forum"

From Abu Dhabi's The National, August 16:

Board of WEF clears founder Schwab of 'material wrongdoing' after investigation

BlackRock chief executive Larry Fink has been appointed interim co-chairman of the World Economic Forum (WEF), which organises the annual meeting of leaders in Davos, Switzerland.

Andre Hoffmann, the vice chairman of Swiss based healthcare company Roche Holding, will also be interim co-chairman of the WEF, according to an announcement on Friday.

“The world is more fragmented and complex than ever, but the need for a platform that brings together business, government, and civil society has never been greater,” Mr Fink and Mr Hoffmann said in a joint statement.

“We remain optimistic. The forum has an opportunity to help drive international collaboration in a way that not only generates prosperity but distributes it more broadly.”

"This renewed vision can promote open markets and national priorities side by side, while advancing the interests of workers and stakeholders globally," they said.

Both Mr Fink and Mr Hoffmann have been serving on the WEF’s board before being appointed to the current position.

The latest announcement comes as global economy feels the impact of geopolitical matters and the rise in protectionism fostered by the introduction of US tariffs.

US President Donald Trump shook the world economy following his April 2 "liberation day" announcement, with new tariffs.

A number of leaders from the world of business and politics attend the forum every year. Mr Trump addressed the forum online this year.

The board of trustees of the WEF cleared founder Klaus Schwab of any “material wrongdoing” following an investigation into allegations raised by anonymous whistleblowers....

....MUCH MORE 

"Researchers uncover surprising limit on human imagination"

From the Harvard Gazette, August 13:

Humans can track a handful of objects visually, but their imaginations can only handle one

Human beings can juggle up to 10 balls at once. But how many can they move through the air with their imaginations?

The answer, published last month in Nature Communications, astonished even the researchers pursuing the question. The cognitive psychologists found people could easily imagine the trajectory of a single ball after it disappeared. But the imagination couldn’t simultaneously keep tabs on two moving balls that fell from view.

“We set out to test the capacity limits of the imagination, and we found that it was one,” said co-author Tomer D. Ullman, associate professor in the Department of Psychology. “I found this surprising, so I can understand if others do, too.”

Ullman, who heads Harvard’s Computation, Cognition, and Development lab, has a long-time interest in what is known as intuitive physics. Think of the brain conjuring a ball as it rolls downhill, or sounding the alarm over two objects on a sure-fire collision course.

“How do we interact with the physical world around us?” wondered Ullman, who is also affiliated with the Kempner Institute for the Study of Natural and Artificial Intelligence. “I subscribe to the theory that the brain may be running mental simulations, kind of like a video game.”

These couldn’t be perfect simulations of physical environments, right down to the level of atoms and molecules. So Ullman’s lab has worked to understand what kinds of hacks and workarounds make mental simulations possible.

“The human imagination is just really cool, and we find a lot of people are quite interested in how it works,” he offered.

A sizable body of research has explored the capacity limits of human perception, or how many objects the brain can track in a visual scene. “Maybe you’re a parent watching multiple kids, or maybe you’re a lifeguard on duty,” Ullman said. “Obviously you can’t keep track of everything.”

Neuroscientists, psychologists, and computational modelers have found visual tracking is limited to just a handful of moving objects. But few have explored the imagination’s capacity limits....

....MUCH MORE 

Previous visits to the Harvard Gazette:

"It's Confirmed: You Are Surrounded By Idiots"

A repost from May 2024:

From the Daily Mail, May 3:

As research warns IQ is falling for first time EVER.... our map reveals average scores in every US state

  • Average IQ levels in the US dropped to 98, falling below the national standards
  • Experts believe the drop in IQ levels is due to increasing technology use

Human intelligence scores are dropping across the US for the first time, research suggests, and experts warn technology could be to blame.

Since 1905, there's been a 30-point increase based on scores in logic, vocabulary, spatial reasoning and visual and mathematical problem-solving skills.

But there are signs that IQ may have dipped, according to a study last year. It found the average IQ score in the US fell from 100 to 98 last year - the first time rates have fallen since we began tracking them.

Now, separate data shows there is a gap of about eight points between states, with New Hampshire ranking first with an average IQ of 103.2.

Those aged 18-22 saw the the biggest drop in IQ tests between 2006 and 2018, the study found....

....MUCH MORE

If interested see also:

Well, It Looks Like You Were Right, You Are Surrounded By Idiots

From the journal Intelligence via ScienceDirect, May - June 2023 Issue:

....1. Introduction
Labeled the Flynn effect (Herrnstein and Murray, 2010), intelligence quotient (IQ) scores substantially increased since 1932 and through the twentieth century, with differences ranging from 3.0 to 5.0 IQ points (0.20 to 0.33 SD) per decade (Flynn, 1984, Flynn, 1987, Flynn, 2007). These findings imply younger generations are expected to have higher IQ scores than the previous cohort. For example, if we tested a sample of Baby Boomers (born between 1946 and 1964) when they were 20 years old and compared their scores on the same test to a sample of Millennials (born between 1981 and 1996) tested at age 20, we would expect the latter group's IQ scores to be between 0.66 and 1.1 SD higher. This isn't to say that the sample of Millennials are smarter or more able than the group of Baby Boomers, but that a difference in scores exists favoring the younger generation. These results, however, should prompt other important questions – what demographic factors are contributing to the difference? Do these results generalize across adulthood? How long should the trend of increasing scores be expected to persist? Does this trend still exist in the United States?....

....Highlights

A reverse Flynn effect was found for composite ability scores with large US adult sample from 2006 to 2018 and 2011 to 2018.

Domain scores of matrix reasoning, letter and number series, verbal reasoning showed evidence of declining scores.

Three-dimensional rotation scores generally increased from 2011 to 2018.

Differences in ability scores were present regardless of age, education, or gender.

The steepest slopes occurred for ages 18–22 and lower levels of education.

Although it is possible I read more into the study than was actually there, the headline will remain until we see evidence of a resumption of the Flynn Effect.
Previously:
"Norwegians getting dumber"
It's not just Norwegians, that's simply the group that was studied.
We've looked at this before.

Although six months old we're only getting to this because I just heard Professor Flynn was still alive.
(sorry Prof.)
From Norway Today, Dec. 28, 2017....

August 2014
Thanks, I think, to a reader.
"I would be willing to wager that if an average citizen from Athens of 1000 BC were to appear suddenly among us, he or she would be among the brightest and most intellectually alive of our colleagues and companions. We would be surprised by our time-visitor’s memory, broad range of ideas and clear-sighted view of important issues. I would also guess that he or she would be among the most emotionally stable of our friends and colleagues."...
November 2012
"New findings suggest scientists not getting smarter"

"Can India Survive the Trade War?"

From The Diplomat, August 16:

Trump’s tariff onslaught has forced India into a precarious position, and New Delhi is employing three strategies in tandem to get out of it. 

New Delhi has been blindsided by U.S. President Donald Trump’s recent tariff temper tantrums. While Indian policymakers anticipated some trade tensions with the United States during Trump’s second term, they hoped that Prime Minister Narendra Modi’s strong rapport with Trump, along with the geostrategic importance of the India-U.S. partnership, would spare them from the worst of Washington’s protectionist impulses.

Indeed, until recently, India-U.S. trade ties seemed to be heading in a positive direction. Trump and Modi agreed to increase bilateral trade to $500 billion by 2030 during their meeting in February. Earlier this summer, India and the United States seemed on the verge of clinching a trade deal.

In a dizzying reversal, on August 7, India found itself with a 25 percent tariff on most products it sells to the U.S., its largest export market. This tariff rate is set to increase by an additional 25 percent on August 27, a punishment for India’s purchases of Russian oil and gas. India also faces the looming threats of indirect tariffs, including steep tariffs on pharmaceuticals and semiconductors and a 10 percent tariff on goods from countries that are members of the “anti-American” BRICS organization.

Trump’s tariff onslaught has forced India into a precarious position, and New Delhi is employing three strategies in tandem to get out of it. 

First, New Delhi is confronted with the daunting task of securing a deal with Washington, without violating any key redlines that would jeopardize Modi’s domestic support. India is also attempting to delicately manage its geoeconomic relationship with China, cooling tensions with Beijing without ignoring preexisting military and economic security concerns. While hedging between the two great powers, India is also seeking to advance its geopolitical ambitions of assuming great power status by diversifying its economy to alternative partners.

Managing Trump’s Tariff Pressures

Faced with a barrage of tariff threats, New Delhi has sought to strike a deal with Washington without compromising its key interests. India has refused to rush into an unfavorable agreement, unlike other major U.S. trading partners. While having drawn a clear redline at exposing its agriculture and dairy sectors to competition from U.S. exports, in the hopes of securing a deal, India has offered a range of limited and strategic concessions, including reducing tariffs on 55 percent of U.S. exports and increasing purchases of American defense and energy products.

Thus far, India has refrained from retaliating, aiming to avoid escalation that would jeopardize the prospect of a deal that might ease existing retaliatory tariffs and the impending 25 percent secondary tariff related to India’s purchases of Russian oil. Indian officials are reportedly exploring what concessions can be offered at negotiations with the U.S. later this month, including tariff reductions on a limited range of agricultural products, namely cheese and almonds, that would have minimal impacts on domestic producers.

While some Indian oil refiners have decreased their purchases of Russian oil, New Delhi has remained adamant that it will continue imports of Russian oil that are legally permissible under the G-7 price cap. As a clear signal of resolve and as part of a broader effort to hedge against the U.S., India has simultaneously moved to bolster its historically strong economic and defense ties with Russia.

New Delhi’s firm stance reflects domestic political pressures. Modi has touted India as an emerging great power destined to play a key role in the future geopolitical and economic order and he cannot afford to be seen as appeasing Trump’s whims. Concessions to the United States that undermine the standing of the ruling Bharatiya Janata Party (BJP) with Indian farmers, especially tenuous since the farmer protests that swept the country a few years ago, would be political suicide.

Other factors also reduce India’s incentive to rush into a deal: the legality of Trump’s tariffs is being openly challenged, and India has no guarantee that Trump would not backtrack on any deal that is reached between them.

This approach is, however, not without risks. Trump has seemingly run out of patience and has already imposed tariffs on India for its refusal to make a deal once. While negotiations have stalled, Southeast Asian economies, including Vietnam, Indonesia, and the Philippines have all secured lower tariff rates that make them more competitive in the U.S. market than India....

....MUCH MORE 

"Lasching Out"

Christopher Lasch appears to be having a moment. 

Following on this morning's "The vindication of Christopher Lasch".

From The Ideas Letter, July 10:

“Everything in Trumpworld happens twice,” the Irish journalist Fintan O’Toole wrote recently—“the first time as performance and the second as reality.” He was commenting on the deployment of the U.S. National Guard and U.S. Marines in Los Angeles against protesters challenging President Donald Trump’s immigration policies. If Trump’s victory in 2016 was performance, the aftermath of his 2024 victory is reality. And that reality, now manifest daily, is one that most liberals, leftists, or middle-of-the-roaders had not fully anticipated, despite warnings.  

Among the most prescient, consistent, and insistent critics to warn the United States of its own frailties was the historian Christopher Lasch.  

Some observers were blinded by their belief in the rootedness and resilience of the country’s institutions, its liberal political tradition, and the irreversibility of progress. Others failed to fully appreciate how money would corrode the American political system and would so deepen cultural-cum-class polarization. But beginning several decades ago, Lasch identified the growing divide between the educated managerial elites and the bulk of the lesser educated public.  

Writing of “an enlightened elite (as it thinks of itself),” he argued that it “seeks not so much to impose its values on the majority (a majority perceived as incorrigibly racist, sexist, provincial, and xenophobic), much less to persuade the majority by means of rational public debate, as to create parallel or ‘alternative’ institutions in which it will no longer be necessary to confront the unenlightened at all.” American democracy would deteriorate based on “the routine acceptance of professionals as a class apart.” 

Lasch was erudite. He was engaged in intellectual conversation with different disciplines, theories, and approaches worldwide, including the Frankfurt School, which inspired his texts from the late 1970s and 1980s. His major works present an archeology of social and political upheavals today: He identified long ago the roots of the current crisis of liberalism in the United States. After arguing that neither socialism nor fascism represented the future, Lasch asserted that “the danger to democracy comes less from totalitarian or collectivist movements abroad than from the erosion of its psychological, cultural, and spiritual foundations from within.”  

Lasch’s last book, The Revolt of the Elites and the Betrayal of Democracy, was published posthumously, in 1995; he had rushed it into print as he was fighting cancer. In that work, along with what is arguably his most famous book, The Culture of Narcissism: American Life in an Age of Diminishing Expectations (1979), and his most substantive one, The True and Only Heaven: Progress and Its Critics (1991), he identified, with alarm, the corrosive influence of markets and bureaucratization on individualism and responsible citizenship. He also tracked the economic and cultural trends that turned citizens into consumers and created an environment in which “indifference, not the fear of deeply divisive disagreements, underlies the public’s refusal to get excited about politics.” And, for Lasch, “this indifference betrays the erosion of the capacity to take any interest in anything outside the self.”  

To read Lasch, therefore, is in part to read the history of the transformation of capitalism, class, and cultural conflict in America over the last few decades—the rise of a mainly white, middle-age, and middle-class rebellion with patriarchal leanings—well before all those issues crystallized over wokeness and the inequalities caused by globalization. 

Writing The Revolt of the Elites in the heyday of the West’s triumphalism after the end of the Cold War, Lasch questioned its self-congratulatory tone over the supposed victory of liberal democratic capitalism. As a critic of progressivism—an obsession, he believed, of both the right and the left—he called attention to the growing crisis of citizenship in advanced capitalist democracies such as the U.S. and warned, “Having defeated its totalitarian adversaries, liberalism is crumbling from within.” One reason for this, he argued, in keeping with themes he had pursued in the 1970s and 80s, was that: “Liberalism was never utopian, unless the democratization of consumption is itself a utopian ideal. It made no difficult demands on human nature”—and yet, to him, such demands were precisely what made civic virtue. 

His solution? Populism. One could say Lasch was a romantic when it came to rectifying an enfeebled democracy. But today the burgeoning literature on populism sees the movement as a threat to democracy. The German political philosopher Jan-Werner Müller has argued that populism is not just anti-elite but also anti-pluralism: Populists believe they are the only true representatives of the people and that anyone who is not with them is not part of the people. This exclusivist approach is inherently authoritarian, and so populism is, on the face of it, against liberalism and democracy.  

For Lasch, though, writing in the early 1990s, “at a time when other ideologies are greeted with apathy, populism has the capacity to generate real enthusiasm,” because “populism, as I understand it, is unambiguously committed to the principle of respect.” In his view, respect was the essential ingredient of civic virtue—without it, liberalism loses its constitutive ethos and deteriorates toward “a narcissistic preoccupation with the self.” Populism, he wrote, “is the authentic voice of democracy.”  

Lasch did recognize that:  

“It would be foolish to deny the characteristic features of populist movements at their worst—racism, anti-Semitism, nativism, anti-intellectualism, and all the other evils so often cited by liberal critics. But it would be equally foolish to deny what is indispensable in this tradition—its appreciation of the moral value of honest work, its respect for competence, its egalitarian opposition to entrenched privilege, its refusal to be impressed by the jargon of experts, its insistence on plain speech and on holding people accountable for their actions.”  

Considering today’s realities, it turns out that he could have been more circumspect about tooting the positive aspects of populism.  

A Leftist Conservative 

Lasch was a critic from within, if not at times a contrarian. As a person of the left, he started to ring the alarm for the leftish-liberal New Deal order during social and political turbulence prompted by the civil rights movement, the Vietnam War, and student radicalism in the United States. Though he then remained a leftist in matters of political economy—in particular privileging equality in both economic and especially civic matters—he gradually distanced himself from the social and cultural tenets of the New Left. He believed that the once-hopeful movement of the ‘60s had gradually substituted culture for class and that its sense of individualism had paved the way for the neoliberal order and its egotistic ethos. “Most of us can see the system but not the class that administers it and monopolizes its wealth,” he wrote. “We resist a class analysis of modern society as a ‘conspiracy theory.’ Thus, we prevent ourselves from understanding how our current difficulties arose, why they persist, or how they might be solved.”....

....MUCH MORE 

Previously from The Ideas Letter:

"Our Spreadsheet Overlords"

"AI, China’s Invisible Scaffolding"