"300 million humanoid robots are coming — and here are the companies that will benefit" (UBS names names)

From MarketWatch, June 18: 

A new report estimates there will be 2 million humanoid robots at work in a decade and 300 million by 2050, helping alleviate labor shortages.

A 142-page report from UBS featuring the work of more than 30 analysts, but led out of China, concludes the total addressable market for these robots will reach between $30 billion and $50 billion by 2035 and from $1.4 trillion to $1.7 trillion by 2050, for spending on components, manufacturing, software, data and services.

“Aging populations, labor shortages and low productivity gains in service sectors all support the use case for robots. Having human form offers the added benefit of adaptability into everyday life,” says the analysts led by Phyllis Wang, who covers industrial companies in China for the Swiss bank.

Granted, this will take time. UBS said it may take more than five years for humanoid’s “EV moment,” which is when electric-vehicle volumes increased from 1 million units to 10 million units over a five-year period.

“As futurologist Roy Amara has stated, people tend to overestimate the short-term impact of new technologies while underestimating their long-term effects. We identify a few hurdles that need to be overcome before humanoids scale up, namely AI, dataset collection and regulations,” they say.

Selling prices and usage costs may fall by more than 70% over the next 20-plus years owing to better economies of scale and supply-chain improvements.

Global automation, auto parts, semiconductor, battery companies and rare-earth refiners all are set to benefit, with UBS naming companies including...

....MUCH MORE 

Capital Markets: "Dollar Comes Back Softer ahead of FOMC Outcome"

From Marc Chandler at Bannockburn Global Forex:

(Commentary resumes with the weekly outlook on June 21)

Overview: Yesterday's dollar buying seen in the North American afternoon appears to have exhausted the position-squaring adjustment amid speculation the US might enter more directly the hostilities with Iran and ahead of the outcome of the FOMC meeting. Follow-through buying to has been limited to a couple of G10 currencies, including the Swedish krona following the Riksbank's quarter-point cut and kept the door open to another reduction. The dollar's gains were also extended against the Swiss franc, whose central bank will likely bring its deposit rate to zero tomorrow. Emerging market currencies are more mixed. Asia Pacific currencies, but the Chinese yuan, were mostly lower while central European currencies are mostly firmer.

The large bourse in the Asia Pacific regions were mixed. Japan, South Korea, and Taiwan advanced, as did mainland Chinese markets. However, the Hang Seng, and mainland companies that trade there, alongside Australia and India were softer. Europe's Stoxx 600 is straddling unchanged, while US index futures are modestly higher. Benchmark 10-year yields are mostly slightly lower in Europe; the UK Gilts and Sweden's yield are almost three basis points lower. The 10-year US Treasury yield is slightly softer, near 4.38%. Gold remains uninspired and is trading softer but inside yesterday's range, unable to re-establish a foothold above $3400. August WTI remains elevated. It is at the lower end of today's roughly $72-$74 range....

....MUCH MORE 

"US Embassy in Israel to close from Wednesday to Friday"

From The Hill, June 17:

The U.S. Embassy in Israel will be closed from Wednesday to Friday because of the ongoing “security situation” in the region, the State Department announced Tuesday.

“Given the security situation and in compliance with Israel Home Front Command guidance, the U.S. Embassy in Jerusalem will be closed tomorrow (Wednesday, June 18) through Friday (June 20),” the State Department said in a post on X.

The State Department said that the closures include the Consular Sections in Jerusalem and Tel Aviv. The closures also include emergency passport services and Consular Report of Birth Abroad services....

....MUCH MORE 

It is hard to tell if this is genuine risk mitigation or a psychological operation to drive Ayatollah Khamenei completely insane with worry. As it is, Khamenei has seen most of his top advisors killed, leaving him with almost no one to talk to.

And that sort of isolation is not good for a person's mental hygiene.  

On the other hand our first hint that there might be trouble brewing imminently was this bit on June 11, two days before Israel attacked:

"US preparing to partially evacuate Iraq embassy over regional security risks, sources say"

"The launch of ChatGPT polluted the world forever, like the first atomic weapons tests"

From The Register, June 15:

Academics mull the need for the digital equivalent of low-background steel 

Feature For artificial intelligence researchers, the launch of OpenAI's ChatGPT on November 30, 2022, changed the world in a way similar to the detonation of the first atomic bomb.

The Trinity test, in New Mexico on July 16, 1945, marked the beginning of the atomic age. One manifestation of that moment was the contamination of metals manufactured after that date – as airborne particulates left over from Trinity and other nuclear weapons permeated the environment.

The poisoned metals interfered with the function of sensitive medical and technical equipment. So until recently, scientists involved in the production of those devices sought metals uncontaminated by background radiation, referred to as low-background steel, low-background lead, and so on.

One source of low-background steel was the German naval fleet that Admiral Ludwig von Reuter scuttled in 1919 to keep the ships from the British.

More about that later.

Shortly after the debut of ChatGPT, academics and technologists started to wonder if the recent explosion in AI models has also created contamination.

Their concern is that AI models are being trained with synthetic data created by AI models. Subsequent generations of AI models may therefore become less and less reliable, a state known as AI model collapse.

In March 2023, John Graham-Cumming, then CTO of Cloudflare and now a board member, registered the web domain lowbackgroundsteel.ai and began posting about various sources of data compiled prior to the 2022 AI explosion, such as the Arctic Code Vault (a snapshot of GitHub repos from 02/02/2020).

The Register asked Graham-Cumming whether he came up with the low-background steel analogy, but he said he didn't recall.

"I knew about low-background steel from reading about it years ago," he responded by email. "And I’d done some machine learning stuff in the early 2000s for [automatic email classification tool] POPFile. It was an analogy that just popped into my head and I liked the idea of a repository of known human-created stuff. Hence the site."

Is collapse a real crisis?

Graham-Cumming isn’t sure contaminated AI corpuses is a problem.

"The interesting question is 'Does this matter?'" he asked.

Some AI researchers think it does and that AI model collapse is concerning. The year after ChatGPT’s debut several academic papers explored the potential consequences of model collapse or Model Autophagy Disorder (MAD), as one set of authors termed the issue. The Register interviewed one of the authors of those papers, Ilia Shumailov, in early 2024.

Though AI practitioners have argued that model collapse can be mitigated, the extent to which that's true remains a matter of ongoing debate.

Just last week, Apple researchers entered the fray with an analysis of model collapse in large reasoning models (e.g. OpenAI’s o1/o3, DeepSeek-R1, Claude 3.7 Sonnet Thinking, and Gemini Thinking), only to have their conclusions challenged by Alex Lawsen, senior program associate with Open Philanthropy, with help from AI model Claude Opus.

Essentially, Lawsen argued that Apple's reasoning evaluation tests, which found reasoning models fail at a certain level of complexity, were flawed because they forced the models to write more tokens than they could accommodate....

....MUCH MORE 

Related, on low-background metals:

November 2019 - "Why the Search for Dark Matter Depends on Ancient Shipwrecks"

July 2024 - So Why Were The Chinese Plundering British Shipwrecks Off The Coast Of Malaysia?

And on model collapse: 

July 2024 - "AI trained on AI garbage spits out AI garbage"

May 27 - "Some signs of AI model collapse begin to reveal themselves"

If interested see also: 

"What Grok’s recent OpenAI snafu teaches us about LLM model collapse"

Previously:

• "When AI Is Trained on AI-Generated Data, Strange Things Start to Happen"

Yeah, like self-referential doom loops.

Also:

• Artificial Data To Train Artificial intelligence
• "ChatGPT Isn’t ‘Hallucinating.’ It’s Bullshitting."
• Embrace Your Hallucinating ChatBot: "Sundar Pichai Opens Up About Google Bard's Trippy Troubles: 'No One In The Field Has Yet Solved Hallucination Problems'"

Somewhat related:

• Do Your AI Training In The Cloud: Google and Nvidia Team Up (GOOG; NVDA) 
• "Experts expect major companies are developing chatbots trained on internal data for company use." (META)  
• Teach Your Robot Comedic Timing
• AI, Training Data, and Output (plus a dominatrix) 

It will all slowly grind to a halt unless a solution to the training data problem is found. Bringing to mind a recursive, self-referential 2019 post....

Pro Tip: If Offered The Position Of Iranian “war chief of staff", Decline the Honor

From the Times of Israel, June 17:

Israel says it took out new top Iranian military commander, after killing predecessor

A senior Iranian general who was appointed to his role after his predecessor was killed in Israel’s opening strikes on Iran was eliminated in an airstrike yesterday, the military says.

Maj. Gen. Ali Shadmani had headed the Khatam-al Anbiya Central Headquarters, also known as Iran’s military emergency command, for around four days.

Shadmani had replaced Maj. Gen. Gholam Ali Rashid, who was killed on Friday in Israel’s opening strikes against Iran.

In view of Lt. Gen. Gholamali Rashid’s martyrdom at the hands of the vile Zionist regime, and in light of Major General Ali Shadmani's meritorious services & valuable experience, I confer the rank of Major Gen. & appoint him Commander of the Khatam al-Anbiya (pbuh) Central HQ. pic.twitter.com/4dTDCKx66P

— Khamenei.ir (@khamenei_ir) June 13, 2025

The IDF says Shadmani was de facto Iran’s most senior military commander, the “war chief of staff,” and considered the closest remaining military figure to Iran’s supreme leader, Ali Khamenei.

“He commanded both the Revolutionary Guards and the Iranian Armed Forces,” the IDF says....

....MUCH MORE 

 Now we wait to see what fresh "surprises" Iran was talking about earlier today.

Will The U.S. Lend Israel A Couple B-2 Bombers Before The War Powers Resolution Comes To A Vote?

You need the planes to deliver the bombs. No other plane will do.

And you need the bombs to damage Fordow, no other bomb will do. 

And you need to take out Fordow to end the war, (Times of Israel, June 17):

Israel won’t end operation against Iran before damaging Fordo, says national security adviser

From New Delhi Television (NDTV), June 17:

Israel Seeks US' Bunker Buster - 14,000 Kg Bomb, To Hit Iran's Nuclear Sites 

As the Israel-Iran conflict enters its fifth day, Benjamin Netanyahu is now seeking the US-made Massive Ordnance Penetrator (MOP), the world's most powerful bunker buster, to take out Tehran's most fortified nuclear sites.

On Tuesday, Iran hit central Israel in retaliation for Israeli strikes on its military infrastructure. While Israel has targeted multiple Iranian nuclear facilities, it hasn't been able to crack the Fordow Fuel Enrichment Plant, a site buried deep under a mountain and built to withstand airstrikes.

Experts say only the 14-tonne MOP, capable of piercing 200 feet of reinforced rock, can damage it. Israel doesn't have the bomb but is reportedly pushing the US for access.

What Is The MOP?
The Massive Ordnance Penetrator (MOP), officially known as GBU-57A/B, is the US military's most powerful non-nuclear bunker buster bomb. Weighing around close to 14,000 kg, it was developed to destroy hardened and deeply buried targets, such as underground bunkers and nuclear facilities.

MOP: Design And Firepower
Designed by Boeing, the MOP is built with a high-strength steel alloy casing that can survive deep penetration through rock and reinforced concrete. It carries a powerful explosive payload of about 2,400 kg, allowing it to destroy deeply buried targets with a delayed-action detonation system. This means it explodes only after it has tunnelled deep into a structure, maximising internal damage. 

How Does The MOP Work?
Equipped with GPS and inertial navigation systems (INS), the MOP is designed for high accuracy. Its guidance system ensures the bomb hits within a few metres of its target, even in difficult combat conditions. The bomb can reportedly penetrate up to 200 feet (about 60 metres) of reinforced earth or concrete, making it far more powerful than older weapons like the GBU-28 or BLU-109. 

How Is The MOP Deployed?
The B-2 Spirit stealth bomber is currently the only aircraft in the US fleet equipped to carry and deploy the MOP. Each B-2 can carry two MOPs. The upcoming B-21 Raider, still under development, is expected to support the MOP in future missions....

....MUCH MORE 

Also at NDTV, June 17

Why Israel Can't Destroy Iran's Fordow Nuclear Site 

And at the Jerusalem Post, June 17:

Israel's plan to strike Fordow nuclear facility ready if order is given - IDF
Fordow is the most important Iranian nuclear facility, which the IDF has not yet touched, but it poses unique challenges, being that it lies underneath a mountain. 

From The Hill, June 17:
Bipartisan lawmakers to introduce resolution to prohibit US involvement in Iran 

President Trump will probably quote the analogy President Roosevelt used to pitch lend-lease to Britain:

....FDR discussed the idea at his Press Conference on December 17, 1940. The Lend-Lease program was still in the beginning stages. 

“Well, let me give you an illustration: Suppose my neighbor’s home catches fire, and I have a length of garden hose four or five hundred feet away. If he can take my garden hose and connect it up with his hydrant, I may help him to put out his fire. Now, what do I do? I don’t say to him before that operation, “Neighbor, my garden hose cost me $15; you have to pay me $15 for it.” What is the transaction that goes on? I don’t want $15—I want my garden hose back after the fire is over. All right. If it goes through the fire all right, intact, without any damage to it, he gives it back to me and thanks me very much for the use of it. But suppose it gets smashed up—holes in it—during the fire; we don’t have to have too much formality about it, but I say to him, “I was glad to lend you that hose; I see I can’t use it any more, it’s all smashed up.” He says, “How many feet of it were there?” I tell him, “There were 150 feet of it.” He says, “All right, I will replace it.” Now, if I get a nice garden hose back, I am in pretty good shape.” Read the full transcript of the press conference at the FDR Presidential library web archive. 

—FDR Library at Marist College 

"Fischer Black questioned everything, even his own Black-Scholes model."

From the Wall Street Journal, June 12: 

My Economist Father

Growing up with groundbreaking economist Fischer Black as my father had many advantages. He had a laissez-faire approach. If my sisters or I wanted to try something that wasn’t a great idea, he let us figure it out. What’s that? You want to butter your bread before you stick it in the toaster? Sure. Let’s see what happens.

My dad worked with Myron Scholes and Bob Merton to develop the Black-Scholes model, an equation for pricing stock options that helped birth modern finance. In 1997 they won the Nobel Prize in economics for their work on the equation. My dad was ineligible since he had died two years earlier, but the Nobel committee cited his key role.

Tall and soft-spoken, my father never used more words than necessary. His approach to life was simple: Ask questions and think for yourself. My favorite quality of his was the freedom with which he approached conventional wisdom, unattached to even his own previous ideas. I remember the look of glee on his face when he told me he was working on a paper called “How to Use the Holes in Black-Scholes.”

Even as an adult, he retained many childlike qualities. When he gave us science kits for Christmas—I remember one that enabled us to “make a cloud”—we could see how much he enjoyed them himself.

He died in 1995 of squamous cell carcinoma. He was 57; I was 26. While he was in the hospital, he was so grateful for the care that he wanted me to write thank-you notes to the doctors and nurses. I was so overwhelmed that I never did. If you’re out there, thank you....

....MUCH MORE 

 Possibly also of interest:

• "Pricing the Future: Finance, Physics, and the 300-Year Journey to the Black-Scholes Equation "

• "The mathematical equation that caused the banks to crash".

I'll lead with the Hat Tip: Finance Clippings who writes:

A reasonably good account of the impact of the Black Scholes equation.  Despite the rather dramatic title of the article, the equation did not cause the market crash.

For my MBA 523 students - you need to read this.  We're talking about the derivation of the Black Scholes model this week!

In the Black-Scholes equation, the symbols represent these variables: σ = volatility of returns of the underlying asset/commodity; S = its spot (current) price; δ = rate of change; V = price of financial derivative; r = risk-free interest rate; t = time. Photograph: Asif Hassan/AFP/Getty Images

And "The Guy Who Discovered Black-Scholes Before Mssrs. Black and Scholes":

Okay, not all of B-S but enough that if anyone had been paying attention they could have made money off the young man's work.

I was going to do a post on the King of 19th century put and call brokers but you may find this more interesting.
From Bloomberg:
Wall Street Quants Owe a Debt to Obscure French Student....

Here's a practitioners look at the efficacy of the formula "Why Black-Scholes is Better Than We Think" .

Also, a cautionary tale from a very smart guy: 

"Volatility as the new Black-Scholes" (VIX; VXX; CVOL)

Personally I ascribe most of the problem to risk models and credit default swaps, usually circling back to JP Morgan's Head of Global Commodities and co-inventor of CDS', Blythe Masters.

From May 2008 (i.e. pre-Lehman) "Finance: 'Blame the models'".

And finally, Fischer Black's nephew, no slouch himself,

"The Sins of Financiers"

 Dr Michael Black is the librarian at Blackfriars Hall, a Permanent Private Hall of the University, a Community of more than 20 Dominican Friars and a centre for the study of theology and philosophy.*

From Oxford Today, May 20, 2014:

By Dr Michael Black 
Did my uncle create the financial bomb that finally blew up the world economy in 2007–8? Put it this way: along with Myron S Scholes and Robert C Merton, Uncle Black (Fischer Black to everyone else) was credited in the early 1970s with formulating the mathematical model that led to derivatives.

To cite just one post-Lehman historian: “Without derivatives, leveraged bets on subprime mortgage loans could not have spread so far or so fast. Without derivatives, the complex risks that destroyed Bear Stearns, Lehman Brothers, and Merrill Lynch... could not have been hidden from view... Derivatives were the key; they enabled Wall Street to maintain its destructive run until it was too late.”

What is a derivative? In essence, it is a financial contract that derives its value from the performance of another entity such as an asset, index or interest rate. It is one of three categories of financial instrument, the other two being equities (stocks) and debt (mortgages and bonds).

Derivatives were made possible by a mathematical model of financial markets devised by Black and Scholes, from which a formula of financial valuation followed. The Black-Scholes model was first aired in their 1973 paper ‘The Pricing of Options and Corporate Liabilities’, published in the Journal of Political Economy.

Black-Scholes also allowed the financial valuation of a company – any company, of any sort, anywhere in the world – which is shown to be a function of the price of its options that are traded in the market (and vice versa). It became the E = mc² of the world of finance, its Gold Standard. 

The most important thing to bear in mind is that at the time, and for three decades, the theory was seen to be progressive as well as brilliant. Merton and Scholes received the Nobel Prize for it in 1998 (Fischer had died in 1996 and the Nobel Prize is not awarded posthumously).

Black-Scholes was accepted by academics, by analysts, by traders, by rating agencies and by virtually all investment institutions as a representation of financial reality. Black-Scholes is probably the closest the world has ever come to a universal standard of financial value.

The Black-Scholes idea of value reigned supreme... right up to the moment in 2007 when it didn’t. Almost overnight, the model became suspect and the world financial system ground to a halt. Investment portfolios from Darien to Düsseldorf became ‘toxic’ because the Black-Scholes presumptions were suddenly recognised as bogus and the ‘real’ value of assets purchased was consequently indeterminate.

One could choose to view the entire Black-Scholes ‘boom to bust’ life cycle as one instance of a much broader pattern of post-1945 capitalism in which government financial controls were gradually relaxed, but at the expense of stability. That’s a very synoptic view suggested by the newly-published Cambridge History of Capitalism.

However, that’s not what it seemed like half a century ago. Corporate finance was in its infancy and beamed with the sort of promise we associate with the eighteenth- century Enlightenment – applying reason and science to human problems previously left to luck and quackery. 

Born in 1938, Uncle Black was a maths and science geek who went to Harvard. By the mid-1960s he stood at the very dawn of a world we have since taken (and still take despite 2007–8) for normal, with investment management by ‘scientific method’, as opposed to the sort of craft practice that had prevailed before.

But the supposedly universal quality of Black-Scholes was to prove its undoing. The failure of this measure of value was systematic: that is, it affected everyone, everywhere simultaneously precisely because it was employed universally, its collective wheel greased by technology. Modern financial theory was supposed to eliminate risk, yet it had done the reverse.

This self-defeating character of a universal measure of value then raises a second issue. Is an objective measure of corporate value possible to formulate even if it’s not universal; let’s say, for an industry or a sector?...MORE

*There's actually a bit more to the guy. From Blackfriars Academic Staff page:

Michael Black

After a career in business with McKinsey & Company, Coopers & Lybrand Europe and the American Stock Exchange International, Michael returned to Oxford to complete his doctorate in the moral theology of corporate life. He also holds an MBA in theoretical finance from the Wharton School of the University of Pennsylvania at which he was departmental vice-chairman under Russell Ackoff. Michael has previously taught corporate finance and strategy in various MBA and university executive programmes in The Netherlands, Sweden and Germany. He currently lectures and tutors on the ethics of the corporation, and is Librarian at Blackfriars Hall.

"Blaise Metreweli named as first woman to lead UK intelligence service MI6"

From The Guardian:

Sun 15 Jun 2025 17.30 EDT  

Metreweli, 47, has held series of director-level roles in foreign intelligence service and in domestic agency MI5 

Blaise Metreweli is currently head of MI6’s Q section, responsible for technology and innovation.

MI6, the UK’s foreign intelligence service, is to be led by a woman for the first time, Keir Starmer has announced.

Blaise Metreweli, a career intelligence officer who joined the service in 1999, will take over from Sir Richard Moore in the autumn, becoming its 18th chief.

Metreweli, 47, is currently the director general of MI6’s Q section, responsible for technology and innovation, and previously held other director-level roles in MI6 and in MI5, the domestic security and counter-intelligence agency.

According to the other brief biographical details given in the announcement, she studied social anthropology at Cambridge University and spent much of her career in operational roles in the Middle East and Europe.

Starmer said: “The historic appointment of Blaise Metreweli comes at a time when the work of our intelligence services has never been more vital. The United Kingdom is facing threats on an unprecedented scale, be it aggressors who send their spy ships to our waters or hackers whose sophisticated cyber-plots seek to disrupt our public services.”

Metreweli, who was made a Companion of the Order of St Michael and St George last year, said: “I am proud and honoured to be asked to lead my service. MI6 plays a vital role – with MI5 and GCHQ – in keeping the British people safe and promoting UK interests overseas. I look forward to continuing that work alongside the brave officers and agents of MI6 and our many international partners.”

Unlike its sister UK spy agencies, MI6 has never had a female head since it was founded in 1909. MI5 has previously been led by Stella Rimington and Eliza Manningham-Buller, and the current head of GCHQ is Anne Keast-Butler, its first female leader.

Metreweli’s appointment is a case of life imitating art. Film buffs will remember Judi Dench’s turn as James Bond’s boss, M, over 17 years of the franchise....

....MUCH MORE 

"Trump says looking for 'real end, not a ceasefire' to Israel-Iran conflict"

From India's Economic Times via MSN, June 17:

US President Donald Trump said Tuesday he was aiming for a "real end" to the conflict between arch-rivals Israel and Iran, and not just a ceasefire, after five days of back-and-forth strikes. 

"I'm not looking for a ceasefire, we're looking at better than a ceasefire," Trump told reporters on board Air Force One before arriving back in the United States from a G7 summit in Canada.

The president said he was looking for "an end, a real end, not a ceasefire," adding that he wanted a "complete give-up" by Iran.

Trump again warned Iran against targeting US troops and assets in the Middle East, saying "we'll come down so hard, it'd be gloves off"....

....MUCH MORE 

"Senate committee's changes to tax bill slam US solar stocks" (FSLR)

From Reuters, June 16:

Shares of U.S. solar energy companies tumbled in extended trade on Monday after Republicans who control the U.S. Senate Finance Committee unveiled changes to President Donald Trump's sweeping tax-cut and spending bill that would phase out solar, wind and energy tax credits by 2028.

Shares of Enphase Energy (ENPH.O), which makes solar inverters, dropped 15% in after hours trade. Solar panel sellers Sunrun (RUN.O), and SolarEdge Technologies (SEDG.O), both tumbled more than 20%. First Solar (FSLR.O), lost 9%....

....MUCH MORE 

In early pre-market trade First Solar is down $20.44 (-11.66%) at $154.81.

This stuff is all political and investors must keep an ear to the political ground or risk tremendous losses. There are only two viable approaches to rentseeking investing with politicians: buy 'em or play 'em. 

The first inductee into the prestigious Climateer "Our Hero" Hall of Fame (posted many, many times) stated the relationship explicitly. And we have taken his words as our mantra for alt-energy/green investing. 

For investors in rent-seeking organizations there is the real risk that the politicians will change the rules. Heed the words of Sen. Simon Cameron (R&D!-Pa.), the 26th Secretary of War:

Our Hero

"The honest politician is one who 

when he is bought, will stay bought."

Capital Markets: "Dollar Becalmed, Gold Softer, Oil Firmer"

From Marc to Market:

Overview:  The latest phase of the Israel-Iran conflict continues and the impact on the markets remains minimal. Oil prices are elevated, but private insurance seems to be slowing traffic in the Straits of Hormuz more than the direct results of a blockade that Tehran appeared to have threatened. After rejecting the G7 draft statement that urged restraint on both sides of the conflict, President Trump left the G7 meeting early and returned to Washington. On the sidelines of the meeting, the US and UK signed a trade deal though key details, like when the UK will not be subject to the steel tariff, were not announced. Separately, despite talks with Japan's Prime Minister Ishiba, no trade break through was announced. The dollar is narrowly mixed in quiet turnover against the G10 currencies and is mostly firmer against emerging market currencies. 

Equities were mixed in Asia Pacific activity. Japan, Taiwan, South Korea, and Singapore posted gains, but other markets were in the red. Europe's Stoxx 600 fell every day last week before gaining about 0.35% yesterday. It is off around 0.85% in late European morning turnover. US index futures are giving back a good chunk of yesterday's gains and are down around 0.65%. Japanese bond yields ticked up after the BOJ left policy on hold and announced a slower pace of tapering starting next April. European yields are mostly 2-3 bp higher, while the 10-year US Treasury yield is off almost two basis points to around 4.43%. Gold is extending yesterday's 1.4% loss, the largest pullback in a month, to trade briefly below last Friday's low (~$3380). Oil continues to trade in a wide range. August WTI initially slipped below $70 before recovering slightly above $72 and is now near $71.35....

....MUCH MORE 

"Explosions seen across Tehran after Trump warns Iranians to evacuate"

From the Jerusalem Post, June 17: 

At the same time as explosions were being reported, US President Donald Trump called on Iranian civilians to "immediately evacuate Tehran."

Iranian media reported several explosions and heavy air defense fire in the Iranian capital of Tehran on Tuesday.

Explosions were reported in Tehran's east and southeast, witnesses told Iranian dissident media site Iran International.

Iran International further reported on X/Twitter that witnesses reported multiple explosions in Ahvaz, in Iran's Khuzestan province in southwest Iran.

Additionally, according to the Iranian news website Asriran, air defense systems have been activated at the Iranian nuclear facility in the city of Natanz....

....MUCH MORE 

 

Iran Offers Flexibility In Nuclear Negotiations In Return For Immediate Cease-Fire

With the destruction of some, but far from all, of Iran's nuclear enrichment facilities and bomb-making ability, the concern is no longer with Iran's own capabilities but with the risk that a current member of the nuke club would supply Iran with a functioning weapon. The two likeliest purveyors are North Korea and Pakistan and you can bet every effort is being made to detect and halt such a transfer. 

From Reuters, June 16: 

Iran sought US pressure on Israel for ceasefire via Gulf states, sources say 

• Iran seeks Gulf mediation for ceasefire and nuclear talks
• One source says Gulf states have appealed to Washington
• Oman drafts ceasefire proposal to resume US-Iran nuclear talks

Tehran has asked Qatar, Saudi Arabia and Oman to press U.S. President Donald Trump to use his influence on Israel to agree to an immediate ceasefire with Iran in return for Iranian flexibility in nuclear negotiations, two Iranian and three regional sources told Reuters on Monday.

 

Gulf leaders and their top diplomats worked the phones all weekend, speaking to each other, to Tehran, Washington and beyond in an effort to prevent a widening of the biggest ever confrontation between longstanding enemies Israel and Iran.

 

Iran is willing to be flexible in the nuclear talks if a ceasefire is reached, one of the Iranian sources said.

The Gulf states are deeply concerned the conflict will spin out of control, a Gulf source close to government officials told Reuters.

 

Qatar, Oman and Saudi Arabia have all appealed to Washington to press Israel to agree to a ceasefire and to resume talks with Tehran towards a nuclear deal, the Gulf source said.

A regional source and an official briefed on Iran's communications with the Gulf said Tehran had reached out to Qatar and Oman to mediate a return to nuclear talks, but insisted that a ceasefire with Israel be put in place first.

 

Iran made clear to Oman and Qatar that it would not negotiate while it is under attack and will only begin serious negotiations once it has finished responding to Israeli strikes, the official said. 

Iran's foreign ministry was not immediately available to respond to Reuters' request for comment. Qatar's foreign ministry, Oman's ministry of information, Saudi Arabia's international media office, the White House and the U.S. State Department did not immediately respond to requests for comment.

 

Israeli Prime Minister Benjamin Netanyahu's office did not respond to a request for comment.

When asked if a diplomatic mechanism was being worked out to end the campaign, Israeli National Security Adviser Tzachi Hanegbi told Army Radio on Monday: "It is a little early for that. You don't go to war and look to end it three days later."....

....MUCH MORE 

 

Recently:

Iran Is Struggling To Comprehend What Just Happened

Tel Aviv Stock Exchange Trading Higher

"Iran turns to Qatar, Oman in bid to halt Israeli strikes, U.S. presses for nuclear concessions"

Ayatollah Khamenei's "Enforcer" Making Inquiries About Room Rates At Assad's Place In Moscow
 

"Investors Take Israel-Iran Conflict in Stride: Gold, Oil, and the Dollar are Softer"
Maybe not in stride but as Bob Dylan says in Subterranean Homesick Blues: "You don't need a weatherman to know which way the wind blows. 

HT on the Reuters story: Iran International who also report: 

Netanyahu says assassinating Khamenei would end Iran-Israel conflict - ABC 

All 14,000 operating cascades at Natanz likely destroyed, IAEA chief says 

BlackRock Investor Day 2025: "BlackRock Aims to Double Operating Income, Market Cap by 2030" (BLK)

First up, from MarketsMedia, June 12: 

BlackRock is focussing on growth in higher multiple, less market sensitive products which include private markets, technology, exchange-traded funds and whole portfolio solutions. 

Larry Fink, chairman and chief executive of BlackRock, spoke at the investor day in New York on 12 June 2025. He said the 2030 ambition for the firm is to drive more than $35bn in revenues, $15bn in operating income and to double market cap to $280bn. He added: “It is achievable and realistic.”

“We raise the bar at aiming for above 5% organic base fee growth,” said Fink. “We plan to raise a cumulative of $400 bn in private markets by 2030.”

Martin Small, chief financial officer at BlackRock, described the asset manager’s growth strategy during the investor day

Small highlighted that BlackRock has reached $11.6 trillion in assets under management and achieved its 5% organic growth target, on average, over the last five years, even in less supportive markets such as the first quarter of this year. Going forward, the firm will follow its  clients and invest to build its platform around “higher multiple, less market sensitive” products and services such as private markets, technology, ETFs and whole portfolio solutions....

....MUCH MORE 

 And at the company:

Agenda  

Presentation slides (147 page PDF) 

Webcast - (5:03:50)

U.S. SEC: "Remarks by Commissioner Peirce at the Third Annual Conference on Emerging Trends in Asset Management"

Commissioner Peirce is a bit of a wild child and more willing than most commissioners, past and present, to experiment in the areas of market structure and securities regulation.

Here she addresses the Investment Company Act of 1940. 

From the Securities and Exchange Commission via Harvard Law School's Forum on Corporate Governance, June 10:

Thank you, Natasha [Vij Greiner]. Good morning and welcome to the Third Annual Conference on Emerging Trends in Asset Management. Before I begin, I must remind you that my views are my own as a Commissioner and not necessarily those of the SEC or my fellow Commissioners.

Today’s four panels take us on a tour from the beginning of the ’40 Acts up to the most recent developments in asset management, and on to the developments likely to come in the near future. These panels are in keeping with the asset management industry, which is an iterative one in which new developments are rooted in the old. I am looking forward particularly to hearing from our “Forever Young” panel of former IM Directors who will reminisce on 85 years of the Investment Company and Investment Advisers Acts.

Thinking back to my arrival at the Division of Investment Management as a wide-eyed staff attorney 25 years ago makes me feel anything but young. But happy memories linger from my four years in the Division: Immersing myself in Division history with the well-worn green binder “bibles,” wrestling through current issues in a rulemaking, or imagining the future of asset management through the eyes of the red book. My colleagues, of course, were the highlight of that experience. Paul Roye as Division Director, Hunter Jones as remarkably patient supervisor, Bob Plaze as master rule-drafter, Martha Peterson as consummate mentor, and countless colleagues who only recently left the staff, including: Bill Middlebrooks, Beckie Marquigny, Chris Chow, Penelope Saltzman, Jennifer McHugh, Jennifer Sawin, Janet Grossnickle, and Nadya Roytblat, to name a few. These and other members of the Division staff poured themselves into administering the statutory framework within which the asset management industry has flourished.

Although I am not feeling it personally, the first panel’s “Forever Young” title is an apt reminder that the regulatory framework must retain nimbleness and flexibility even though these characteristics typically wane with age. As the panel embodies, however, the wisdom of the past should guide our exercise of that flexibility. The asset management industry is in the midst of an age of innovation, a topic which will occupy the last three panels. Continued product proliferation, increased retail access to private markets, and tokenization will expand the menu of investment options available to investors. Accompanying that expansion should be education, including the innovative use of new technological tools to educate investors and their financial professionals about innovative product offerings.

For the sake of portfolio diversification, retail investors need access to a broad range of investment opportunities. The breadth of the public markets, where retail investors do most of their investing, has suffered as the number of listed companies has declined,[1] companies wait longer to attempt an IPO, and several large companies dominate the public market indices. The Commission should work on reforming public company regulation to help address this decline. But some asset classes are not fit for the public markets. Accordingly, retail investors and the financial professionals that serve them also are looking for additional diversification in the private markets.

Commission rules and regulations along with Commission staff positions have contributed to keeping retail investors out of the private markets. We should consider how to amend the “accredited investor” definition in the Commission’s rules so that more people are eligible to invest in the private markets. In August 2020, the Commission supplemented slightly the existing net income and wealth categories for qualifying natural persons, a change the Commission admitted was marginal.[2] I would like to see more meaningful expansions as would many retail investors who resent being cut off from an increasingly large segment of the market. The Commission staff can take other steps at once to allow retail investors greater access to private markets. For example, as Chairman Atkins recently noted, since 2002, Commission staff has taken the position that closed-end funds investing 15% or more of their assets in private funds should impose a minimum initial investment requirement of $25,000 and restrict sales to investors that meet the accredited investor standard.[3] Neither the statute nor Commission rules require such limitations. Removing them would allow retail investors greater access to private investments through a closed-end fund wrapper with the benefit of professional management. I support the Chairman’s directive that the staff address this situation, including by ensuring that funds are making adequate disclosure regarding conflicts of interest, illiquidity, and fees for closed-end funds that trade on exchanges. We also should work with fund sponsors that want to experiment with interval funds.

Some retail investors also want to add digital assets to their investment portfolios. Until recently, the Commission mostly stymied their efforts to do so through convenient and cost‑efficient securities products. Some ’40 Act funds afforded investors indirect exposure to crypto assets, but only when pushed by the courts did the Commission greenlight the trading of spot bitcoin (and later spot ether) exchange-traded products under the 1933 Act. The Trading and Markets staff is working diligently through many applications to list a whole range of digital asset ETPs. A standardized approach for such ETPs could ease the burden for the industry and the SEC staff. Asset managers are also creating new products under the ’40 Act. Just as a reminder a fund that invests primarily in spot crypto assets that are not securities cannot register as an investment company under the ’40 Act....

....MUCH MORE 

If interested, here is the conference agenda, panelist bios (seriously heavy hitters) and webcast archive. 

Also, if interested, a remix of Alphaville's Forever Young: 

Previously:

SEC, May 12: "Tokenization: Our Field of Dreams? Remarks at the Crypto Task Force Roundtable on Tokenization" 

May 18: "Tokenization’s trillion dollar promise: Wall Street leaders make their case to the SEC"

"Why U.S. Uranium Production Surged 12-Fold In 2024"

From OilPrice, June 15:

• Once a uranium leader, the U.S. now imports 98% of its nuclear fuel.
• The U.S. is now enjoying a nuclear renaissance, with the sector seeing a resurgence in recent years.
• Last year, the country produced almost 700,000 pounds of yellowcake, good for a more than a dozen-fold increase from the previous year.

For decades, the United States has been the world’s biggest producer of nuclear energy, accounting for 30% of global production. The country, however, currently imports 98% of the uranium feedstock it needs to power its 94 nuclear reactors. Indeed, the U.S. accounts for less than 1% of the world’s uranium output, with Kazakhstan, Canada, and Namibia accounting for nearly two-thirds of global production. 

But things have not always been this way. The country’s nuclear age peaked in the 1960s to the mid-1980s when it was the leader in uranium production. The downtrend that followed can largely be chalked up to government policy, with Washington de-prioritizing away from the uranium sector, including providing less government funding and subsidies to support it over the years. Meanwhile, several high-profile nuclear accidents took a heavy toll on public perception and tanked uranium prices, forcing many domestic uranium producers to shutter operations.

However, the U.S. is now enjoying a nuclear renaissance, with the sector seeing a resurgence in recent years. Last year, the country produced almost 700,000 pounds of yellowcake, good for a more than a dozen-fold increase from the previous year, thanks to surging uranium prices and favorable government policies. It all began three years ago, with Russia’s invasion of Ukraine triggering a global energy crisis and driving energy prices to historic highs. Suddenly, governments everywhere started encouraging more nuclear energy production to boost national energy security. Meanwhile, the rise of AI data centers, clean energy manufacturing and the cryptocurrency boom triggered a spike in global electricity demand, putting more pressure on power producers. In 2024, the Biden administration provided $2.7 billion in federal funding to expand the country’s uranium enrichment and conversion capacity, shortly after banning the import of Russian uranium. A month ago, President Donald Trump signed four executive orders that will speed up the deployment of nuclear reactors with a goal to quadruple the nation’s nuclear output from 100 GW in 2024 to 400 GW by 2050....

....MUCH MORE

From there the article devolves into a bit of a low-key tout but still interesting. For our money the names to know are Canada's Cameco and, for the more geographically adventurous, the world's largest producer Kazatomprom.

Previously:

Trans-Uranic Express: The First Uranium Boom and Lessons For Today's Investor  

Possibly also of interest:

The Geographical Pivot of History
H. J. Mackinder 

"Investors Take Israel-Iran Conflict in Stride: Gold, Oil, and the Dollar are Softer"

Maybe not in stride but as Bob Dylan says in Subterranean Homesick Blues: "You don't need a weatherman to know which way the wind blows." 

From Marc Chandler at Bannockburn Global Forex: 

Overview:  After inflicting damage on Iran's proxies (Hamas and Hezbollah), Israel turned to Iran itself following the IAEA's finding that Tehran was in violation of its uranium-enrichment targets. The war continues. The US reportedly helped Israel shoot down missiles aimed at it, but so far Russia, which signed a defense pact with Iran earlier this year has been restrained, as has China, the biggest buyer of Iranian oil. The markets' response will be studied for some time. It is not just the greenback, which seems to have mostly ignored the geopolitical developments, but gold and oil are lower, and stocks are higher. The US dollar is softer against the G10 currencies, but the Swiss franc and Japanese yen are nursing minor losses. Among emerging market currencies that are trading, only the Thai baht and Philippine peso are softer. 

Japanese and South Korean equities led Asia Pacific bourses higher today. Among the large markets, only Taiwan and Singapore did not participate in today's advance, though we note that the Taiwanese dollar rose to a new three-year high. Europe's Stoxx 600, which fell in every session last week, is about 0.25% higher today. US index futures are 0.4%-0.5% higher. Benchmark 10-year yields are mostly 1-3 bp higher in Europe, and the 10-year US Treasury yield is up nearly four basis points to 4.43%. Gold initially extended last week's gains. It poked above $3451 before selling pushed it below $3410. It has steadied near $3416. August WTI gapped higher to $75.50 but has been sold back to around $70.60. 

USD: Israel's attack on Iran lifted the dollar ahead of the weekend, but it barely rose above the previous session's high. It is trading softer today, but inside last Friday's range.... 

....MUCH MORE 

"Futures Industry Association is keen on tokenized MMF as collateral"

From Ledger Insights, June 12:

The Futures Industry Association (FIA) has published a report exploring the potential of tokenized collateral to be used to post margin for centrally cleared derivatives trades.

The volumes involved are potentially significant, with the top ten central counterparties holding $915 billion in initial margin at the end of 2024, and the top five – LCH, CME, ICE, TheOCC and Eurex – making up the lion’s share. Regulatory developments have begun reshaping how these major players approach collateral management.

After the Commodity Futures Trading Commission (CFTC) announced tokenized collateral pilots, both the CME and ICE announced plans to explore the topic. In Europe, Eurex is already quite advanced and has regulatory approval. In part that’s because its parent, the Deutsche Börse, is both an investor and partner of digital collateral firm HQLAᵡ. While LCH, the largest collateral holder, hasn’t formally announced a tokenized collateral initiative, it has moved into digital assets. The firm launched LCHDigitalAssetClear for centrally cleared Bitcoin derivatives. The other member of the big five, The OCC, explored using blockchain with DLT partner Axoni for several years before pivoting away from the technology.

Against this backdrop of varying approaches, the FIA outlined its strategic recommendations, including a preference for starting with tokenized money market funds (MMFs) rather than tokenized cash. That’s partly driven by the potential for traders to continue earning yield on the collateral posted. Additionally, on the tokenized cash front, the FIA views CBDC as premature. Too few banks provide the option of tokenized deposits. And stablecoin regulations around the world are progressing, but not quite there yet....

....MUCH MORE 

Ayatollah Khamenei's "Enforcer" Making Inquiries About Room Rates At Assad's Place In Moscow

This guy is a nasty piece of work. Parlayed intelligence agent stuff into being maybe the most wired-in person in the country.

From Iran International, June 15:

Top Khamenei aide in talks with Russia for possible evacuation plan  

Iran International has obtained information indicating that Ali Asghar Hejazi, deputy chief of staff to Supreme Leader Ali Khamenei, is in negotiations with Russian officials to secure a potential exit from Iran for himself and his family if the situation deteriorates.

According to the information, a senior Russian official has assured Hejazi that in case of escalation, Moscow would facilitate his evacuation via a secure corridor.

Other senior Iranian officials have reportedly received similar contacts, with some already finalizing their own exit routes.

Israeli Prime Minister Benjamin Netanyahu said in a video statement Saturday that senior Iranian leaders were “packing their bags.”

Iran International front page 

And the former Syrian dictator?

The humiliated Assads' new life in Russia: Syrian monster, his British wife and children take their $2bn fortune to Moscow where family own '$40m portfolio of flats' including luxury apartments in Russia's eighth-highest building

 —Daily Mail

"Iran turns to Qatar, Oman in bid to halt Israeli strikes, U.S. presses for nuclear concessions"

From Tel Aviv's i24News TV, June 15:

Senior U.S. administration official to i24NEWS: “We remain committed to the talks and hope that the Iranians will come to the negotiating table soon” 

As Israeli strikes against Iran continue, Tehran has turned to diplomatic backchannels, seeking the help of regional mediators in an effort to halt the fighting and revive negotiations. 

Sources familiar with the matter tell i24NEWS that Iran has approached Oman and Qatar to act as intermediaries with the United States, hoping to broker a ceasefire that would bring an end to Israel’s military offensive.

In parallel, Saudi Arabia has also become involved in behind-the-scenes diplomatic efforts, working quietly to create conditions for a de-escalation and possible resumption of talks. The multiple mediation tracks highlight the growing international concern over the ongoing conflict, which threatens to escalate further and destabilize the region....

....MUCH MORE 

And from the Jerusalem Post, June 15:

Iran asks Cyprus to convey messages to Israel amid exchange of fire 

Christodoulides said Iran had asked Cyprus to convey 'some messages' to Israel but he did not say who specifically the messages were from or what they said. 

Iran has asked Cyprus to convey "some messages" to Israel, President Nikos Christodoulides said on Sunday, as the eastern Mediterranean island appealed for restraint in a rapidly escalating crisis in the Middle East.

Christodoulides spoke to Prime Minister Benjamin Netanyahu on Sunday, and he has also spoken to the leaders of Egypt, the United Arab Emirates, and Greece, his office said....

....MUCH MORE 

If interested see also our earlier instanalysis:

Iran Is Struggling To Comprehend What Just Happened

Tel Aviv Stock Exchange Trading Higher

 From Israel's Globes business newspaper, June 15:

TASE EVP explains why the market is rising 
As the Tel Aviv Stock Exchange unexpectedly gains, Yaniv Pagot tells "Globes" why investors see favorable conditions ahead

Most unexpectedly, despite the numerous missile barrages launched by Iran towards Israel and the damage to lives and property, the Tel Aviv Stock Exchange (TASE) leading indices closed today with healthy gains of nearly 0.5%. The market opened the trading day with declines of over 1.5% in the leading indices, and over 2.5% in the banking indices, before swinging to gains of over 1%, but falling back to just under 0.5% before closing. 

TASE EVP head of trading, indices and derivatives Yaniv Pagot says Israel's latest military moves are a decisive step for the better: "Anyone who has lived in the State of Israel for the past 30 years knows the words the Iranian threat, and the Iranian nuclear program, which has been a kind of cancerous growth on the Israeli economy, on the horizon of the State of Israel, and we lived with this growth for all these years. The rating agencies have also talked about the Iranian threat all the time. On Thursday and Friday, Israel decided that this growth needed to be cut out. As absurd as it may sound, if Israel's geopolitical risk premium was a certain rating - today it is lower."

Pagot stresses that despite the moral difficulty of speaking in economic terms at a time like this, professional analysis is important: "It is difficult to speak in terms of a risk premium while people are dying here, and it is difficult to know what else is expected, but there are people whose job it is to look at this from a rational, cold, numerical perspective."....

....MUCH MORE 

Also at Globes June 15: 

Israel’s Consumer Price Index fell 0.3% in May 2025 according to figures released by the Central Bureau of Statistics today, below the analysts' expectations.

Electricity: "Report Says 130 New Gas-Fired Power Projects Proposed in Texas" (GEV)

If all these proposals go forward GE Vernova would probably have to buy Siemens' gas turbine business just to keep the backlog to fifteen years or less.

From Power Magazine, June13:

A nonprofit environmental group said at least 130 natural gas-fired power plant projects are planned in Texas over the next few years as part of that state’s effort to meet growing demand for energy. The Washington, D.C.-based Environmental Integrity Project (EIP), in a report published June 11, said the projects would provide more than 58 GW of new generation capacity, while noting that many of the proposed facilities may not move beyond the planning stage.

The group noted the build-out is supported by the Texas Energy Fund, a taxpayer-supported program created by state lawmakers that provides grants and loans for construction of power generation projects. The fund was created in the wake of the February 2021 Uri winter storm, when as estimated 10 million Texans lost power, prompting officials to look at how to avoid future blackouts caused by extreme weather or other events.

The group in its report said it “has created a statewide inventory of proposed gas power plant projects … using information from a wide variety of publicly available sources, including the Energy Information Administration, Global Energy Monitor, ERCOT [Electrical Reliability Council of Texas, the state’s grid manager], application documents for the Texas Energy Fund, permit documents from the Texas Commission on Environmental Quality, trade publications, and news articles.” The report focused not only on the construction of new gas-fired projects, but also on the environmental impact, saying the new facilities would, if built, emit an estimated 115 million tons of greenhouse gases (GHG).

The group said the proposed gas-burning projects are at least 108 new power plants, 17 expansions, and five projects for which specifics have not been announced. The group in a news release related to the report also said “Texas has illegally rubber-stamped permits for the construction of at least three large power plants and potentially others—without the stringent air pollution limits or public hearings required under the federal Clean Air Act.”....

....MUCH MORE including link to a spreadsheet of the projects being contemplated. 

Additionally, the Houston Chronicle has a handy map of the proposed locations, also June 13:

Houston could see a surge of gas power plants to meet AI energy demands. Here's where. 

AI: Anthropic's Bliss Attractor

From Astral Codex Ten, June 12:

The Claude Bliss Attractor 

This is a reported phenomenon where if two copies of Claude talk to each other, they end up spiraling into rapturous discussion of spiritual bliss, Buddhism, and the nature of consciousness. From the system card:

 

 

 ....MUCH MORE

"Europe's top tech hubs: Paris tops London as UK capital startups face funding lows"

From EuroNews, June 13:

Meanwhile, Kyiv is positioning itself as the most important rising star in the European tech ecosystem. 

This year's Global Tech Ecosystem Index has crowned Paris as the top tech hub on the continent.

The report analysed tech talent, innovation and investment in 288 cities and 69 countries.

The French capital also placed fourth in the global ranking, while London ranked 6th.

Cambridge, Munich, Stockholm and Grenoble were the only other European cities to make it to the global top 20....

*****

.... Cambridge shows best talent concentration in Europe

Analysts say the UK has been attracting fewer funds in recent years. Its startups raised just slightly more than €19 billion in 2024, reportedly the lowest amount since 2020.

Nonetheless, the UK remains a driving force of Europe's tech scene.

According to the report, Cambridge has the highest concentration of tech talent in Europe, with an enterprise value of over €162 billion, with a population of just around 150,000 people.

Density leaders are "ecosystems that outperform relative to their population size, showing exceptional innovation output per capita."

"These hubs are marked by high startup activity, research intensity, and strong university linkages, proving that world-class ecosystems can emerge anywhere", says the report....

....MUCH MORE 

Apollo Global Management President James Zelter: "Monetization is going to be more challenging. Returns will be lower"

From Neue Zürcher Zeitung's TheMarket.ch, June 11:

James Zelter expects a negative impact from higher rates for the private equity industry in the coming years. The President of Apollo Global Management sees opportunities in European credit markets and explains where Apollo wants to invest up to 100 bn. $ in Germany over the next decade. 

Deutsche Version

Apollo Global Management is preparing for the next economic downturn by shunning riskier parts of credit markets, says James Zelter. The president of the S&P 500 company has led the expansion of the credit business of Apollo, which today manages more than 600 bn. $, before becoming President and the second highest executive at the firm after CEO Marc Rowan in January.

For private equity, where Apollo has invested a large part of its other more than 150 bn. $ of assets under management, Zelter is more cautious due to high prices paid in the zero interest rate era by some competitors and the high indebtedness of some of their portfolio companies.

Zelter sees the infrastructure and defense investment plans of the new German government as a large opportunity for the firm and its clients. Apollo is looking to deploy up to 100 bn. $ in Germany over the coming decades. In an interview at the sidelines of SuperReturn International 2025 conference in Berlin on June 4, he explained which areas are most attractive from Apollo's view.

Mr Zelter, what is the view on Europe when you discuss with your clients? Do you hear demands for more investment opportunities in Europe and especially in Germany?

I do. The demand to increase exposure is very strong from non-European investors, particularly in the US but also in the Middle East. We are a big player in Europe, we’ve been operating here for almost 25 years. We have more than 100 bn. $ invested across the continent. We’re excited by the domestic changes that are going on by the current administration of leadership in Germany. We are having a lot of very active dialogues about having Apollo be a partner in a variety of financing solutions, much more so on the funding and financing side than the equity side. We think it is a real turning point and opportunity set.

The German infrastructure fund will have 500 bn. € to spend, spread out over ten years. Do you see opportunities to invest alongside that?

Very much so. When I think about the German economy today, it is a little bit above 4 tn. $ in size with aspirations to go to 6 tn. $ over the next decade. We feel that we can be a a major part of that and with the plan that has been put forth. We can see ourselves investing up to 100 bn. $ in Germany over the next decade across debt financing, investment grade and some portion of equity. We are a very active player today and want to expand that.

Which subsectors or areas for investing to you find particularly interesting in Germany?

The whole area of energy transition, energy sustainability and energy transmission. A variety of areas in general industrial businesses. The revitalization of the defense industry. There is a variety of activities.

Are you talking to any local partners about your investing plans?

Germany is fortunate to have a very large domestic Development Bank, the largest on the globe, with an AAA balance sheet and a variety of debt capacity opportunities. So we think we are well positioned and want to be part of this evolution. We have deep relationships with many of the largest banks and serve a large number of German corporates and sponsors.

Where would you invest in the energy sector? In the electricity grid? In electricity generation, or rather storage? What is most attractive?.... 

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