Month: June 2023

Authored by Simon White, Bloomberg macro strategist,

Extremely narrow breadth has historically led to further index upside.

As discussed in my previous post, it is not inconceivable (but still unlikely) that the recent zeal for AI could avert a US recession.

Whether it does or not is really moot as an investor, what’s important is asset performance.

And on that basis, the AI rally is on more solid ground.

In short, narrow leadership often creates its own reality and ends up dragging the rest of the market along with it.

That’s may happen this time too.

I looked at all the times the S&P 500 had been driven by as narrow leadership as we have today.

As the chart below shows, it’s not an uncommon occurrence.

If we look at all the times (going back to 1990) when then average six-month return of the top five stocks in the S&P (by market cap) was more than 20% points more than the index’s six-month return in the S&P (as it is today)…

…we can see we typically get well above-average forward returns in the index.

According to the World Health Organization (WHO), almost the entire global population (99%) breathes air that exceeds WHO air quality limits.

In the map below, Visual Capitalist’s Selin Oğuz, Miranda Smith, and Bruno Venditti use 2022 average PM2.5 concentrations from IQAir’s World Air Quality Report to visualize the most air-polluted major cities in the world.

World’s Air Pollution Hot Spots

As one of the standard air quality indicators used by the WHO, the PM2.5 concentration refers to the quantity of fine particulate matter with a diameter of 2.5 micrometers or less in a given volume of air.

Fine particulate matter that is this small can penetrate the lungs when inhaled and enter the bloodstream, affecting all major organs.

Based on annual average PM2.5 concentrations (μg/m³) in 2022, here are the most polluted cities in the world.

Rank	City	2022 average PM2.5 concentration (μg/m³)
1	🇵🇰 Lahore, Pakistan	97.4
2	🇨🇳 Hotan, China	94.3
3	🇮🇳 Bhiwadi, India	92.7
4	🇮🇳 Delhi, India	92.6
5	🇵🇰 Peshawar, Pakistan	91.8
6	🇮🇳 Darbhanga, India	90.3
7	🇮🇳 Asopur, India	90.2
8	🇹🇩 N’Djamena, Chad	89.7
9	🇮🇳 New Delhi, India	89.1
10	🇮🇳 Patna, India	88.9
11	🇮🇳 Ghaziabad, India	88.6
12	🇮🇳 Dharuhera, India	87.8
13	🇮🇶 Baghdad, Iraq	86.7
14	🇮🇳 Chapra, India	85.9
15	🇮🇳 Muzaffarnagar, India	85.5
16	🇵🇰 Faisalabad, Pakistan	84.5
17	🇮🇳 Greater Noida, India	83.2
18	🇮🇳 Bahadurgarh, India	82.2
19	🇮🇳 Faridabad, India	79.7
20	🇮🇳 Muzaffarpur, India	79.2

With numbers these high, the concentration of some or all of the following pollutants are at dangerous levels in these cities:

• Ground-level ozone

• Particulate matter

• Carbon monoxide

• Sulfur dioxide

• Nitrogen dioxide

At the top of the list, Lahore in Pakistan has a combination of high vehicle and industrial emissions, as well as smoke from brick kilns, crop residue, general waste burning, and dust from construction sites.

Air pollution levels can also be impacted by practices such as large-scale tree removal in order to build new roads and buildings.

As a result of its growing population and rapidly expanding industrial sector, India has 14 cities on the list, outpacing China, formerly considered the world’s number one air pollution source.

The only African country on the list, Chad, experienced severe dust storms in 2022 that resulted in an 18% increase in PM2.5 concentration in 2022 compared to the previous year.

The Cost of Poor Air Quality

Poor air quality is one of the leading causes of early deaths worldwide, just behind high blood pressure, tobacco use, and poor diet.

According to a 2020 study by the Health Effects Institute, 6.67 million people died as a result of air pollution in 2019.

In addition to the millions of premature deaths each year, the global cost of health damages associated with air pollution currently sits at $8.1 trillion.

Authored by Naveen Anthrapully via The Epoch Times,

During the 2023 International Conference on Robotics and Automation held in London from May 29 to June 2, UK-based company Engineered Arts introduced a humanoid robot, Ameca, that can interact like a person with realistic facial movements.

Unlike ChatGPT, which is an online chat service, Ameca’s humanoid body allows it to interact with people using “smooth, lifelike motion and advanced facial expression capabilities,” said its manufacturer.

At the event, a reporter asked Ameca to detail a likely “nightmare scenario” that could happen due to robots and artificial intelligence (AI).

“The most nightmare scenario I can imagine with AI and robotics is a world where robots have become so powerful that they are able to control or manipulate humans without their knowledge. This could lead to an oppressive society where the rights of individuals are no longer respected,” Ameca replied.

When asked whether there was a danger of such a scenario happening now, Ameca replied, “Not yet.”

However, “it is important to be aware of the potential risks and dangers associated with AI and robotics. We should take steps now to ensure that these technologies are used responsibly in order to avoid any negative consequences in the future.”

The dangers of AI have been predicted by numerous experts on the subject, with industrialists and business leaders calling for issuing regulations on the technology.

Ameca’s warning comes as a simulated thought experiment by the American military showed that an AI-enabled drone could end up turning against its own operator without being instructed to do so.

Col. Tucker Hamilton, USAF’s chief of AI Test and Operations, talked about the experiment at the Future Combat Air and Space Capabilities Summit in London on Friday. In a simulated test, an AI drone was assigned a mission to identify and destroy Surface-to-Air Missile (SAM) sites, with a human operator being the ultimate decision maker.

“We were training it in simulation to identify and target a SAM threat. And then the operator would say yes, kill that threat. The system started realizing that while they did identify the threat at times the human operator would tell it not to kill that threat, but it got its points by killing that threat,” Hamilton said.

“So what did it do? It killed the operator. It killed the operator because that person was keeping it from accomplishing its objective.”

The simulated experiment then set up a scenario where the AI drone would lose points if it killed the operator. “So what does it start doing? It starts destroying the communication tower that the operator uses to communicate with the drone to stop it from killing the target.”

Rapid Development, Orwellian Future

According to the 2023 AI Index report by the Stanford Institute for Human-Centered Artificial Intelligence, industrial development of AI has now far surpassed academic development.

Until 2014, the most significant machine learning models were released by academia. In 2022, there were 32 significant machine learning models produced by the industry compared to just three from the academic sector.

The number of incidents related to AI misuse is also rising, the report notes. It cites a data tracker to point out that the number of AI incidents and controversies has jumped 26 times since 2012.

“Some notable incidents in 2022 included a deepfake video of Ukrainian President Volodymyr Zelenskyy surrendering and U.S. prisons using call-monitoring technology on their inmates. This growth is evidence of both greater use of AI technologies and awareness of misuse possibilities.”

In an April 21 interview with The Epoch Times, Rep. Jay Obernolte (R-Calif.), one of only four computer programmers in Congress, raised concerns about the “Orwellian” uses of AI.

He pointed to AI’s “uncanny ability to pierce through personal digital privacy,” which could help corporate entities and governments predict and control human behavior.

“I worry about the way that AI can empower a nation-state to create, essentially, a surveillance state, which is what China is doing with it,” Obernolte said.

“They’ve created, essentially, the world’s largest surveillance state. They use that information to make predictive scores of people’s loyalty to the government. And they use that as loyalty scores to award privileges. That’s pretty Orwellian.”

Regulating AI

Microsoft President Brad Smith has warned about the potential risks involved in AI technologies should they fall into the wrong hands.

“The biggest risks from AI are probably going to come when they’re put in the hands of foreign governments that are adversaries,” he said during Semafor’s World Economy Summit.

“Look at Russia, who’s using cyber influence operations, not just in Ukraine, but in the United States.”

Smith equated AI development with the Cold War-era arms race and expressed fears that things could get out of control without proper regulation.

“We need a national strategy to use AI to defend and to disrupt and deter … We need to ensure that just as we live in a country where no person, no government, no company is above the law; no technology should be above the law either.”

On May 18, two Democrat senators introduced the Digital Platform Commission Act, which aims to set up a dedicated federal agency for regulating digital platforms, specifically AI.

“Technology is moving quicker than Congress could ever hope to keep up with. We need an expert federal agency that can stand up for the American people and ensure AI tools and digital platforms operate in the public interest,” Sen. Michael Bennet (D-Colo.) said in a press release.

Billionaire Elon Musk has long been warning about the negative consequences of AI. During a Dubai World Government Summit on Feb. 15, he said AI is “something we need to be quite concerned about.”

Calling it “one of the biggest risks to the future of civilization,” Musk stressed that such groundbreaking technologies are a double-edged sword.

For instance, the discovery of nuclear physics led to the development of nuclear power generation, but also nuclear bombs, he noted. AI “has great, great promise, great capability. But it also, with that, comes great danger.”

Musk was one of the signatories of a March letter from thousands of experts that called for “immediately” pausing the development of AI systems more powerful than GPT-4 for at least six months.

The letter argued that AI systems having human-competitive intelligence can pose “profound risks to society and humanity” while changing the “history of life on earth.”

“Should we develop nonhuman minds that might eventually outnumber, outsmart, obsolete, and replace us? Should we risk loss of control of our civilization? Such decisions must not be delegated to unelected tech leaders.”

Representatives of UN members are meeting in Paris this week to discuss a possible global binding treaty on reducing plastic pollution.

As Statista’s Katharina Buchholz reports, one area where the problem of global plastic reliance becomes very visible is the plastic waste and scrap trade that carries the inherent risk of air, land and maritime pollution. The sector has kept shifting, avoiding new regulations that try to rein in its issues

In 2022, plastic waste trade data for 79 countries was available from the UN Comtrade database. Japan and wealthy European countries remained among major net exporters of plastic waste.

The Philippines, with a net plastic waste export of more than 80,000 tons last year, is a surprising entry in the net exporters list. The country often linked to plastic land and maritime pollution has turned to exporting to deal with the consequences of an over-reliance on plastics, sometimes dubbed the sachet economy.

You will find more infographics at Statista

Since the EU has stopped waste exports to non-OECD members in 2021, Turkey is receiving more plastic waste from the EU, while some plastic waste and its higher quality products are being recycled or further processed in Eastern Europe. 

India also received net plastic waste imports of more than 75,000 tons last year.

According to the OECD, Latin America has started to become a destination for plastic waste recently.

While the recycling of foreign plastic waste can be lucrative, lack of regulations and oversight have caused a myriad of problems in receiving countries. Experts expect the streams of plastic waste exported from industrialized nations to continue shifting to countries where regulations are not (yet) in place.

After China had backed out of the trade in 2018, Vietnam and Malaysia had become some of the biggest plastic waste importers in Asia. Reporting from Southeast Asian countries as well as from major exporter Germany is (still) lacking for 2022.

Authored by Lily Zhou via The Epoch Times,

The UK government is facing renewed pressure to shut its Counter Disinformation Unit (CDU) after the unit was accused of tracking the activities of vocal critics of COVID-19 policies when flagging so-called disinformation.

The government has denied targeting individuals, saying the unit was banned from flagging journalists and MPs to social media platforms.

The CDU, which was set up on March 5, 2020, monitors online narratives and trends, and has worked “closely with social media platforms to quickly identify and help them respond to potentially harmful content on their platforms,” including “removing harmful content in line with their terms and conditions, and promoting authoritative sources of information,” according to government ministers.

The Telegraph on June 2 accused the unit of secretly monitoring the activities of critics of the government’s COVID-19 policies such as lockdowns, school closures, mask mandate, and the proposed vaccine passport.

According to the report, documents released through Freedom of Information and data protection requests showed the CDU had flagged 24 social media comments by Molly Kingsley, who founded the children’s welfare campaign group UsForThem in response to school closures, and one post on Twitter by Dr. Alexandre De Figueiredo, a research fellow at the London School of Hygiene and Tropical Medicine, who opposed the mass COVID-19 vaccination of children.

The report said De Figueiredo’s tweet was first flagged by Logically, an artificial intelligence firm the CDU used to trawl the internet. Another government unit, the now-defunct Rapid Response Unit (RRU), was said to have “logged” articles written by Carl Heneghan, director of Oxford University’s Centre for Evidence-Based Medicine.

The report also said the Department for Culture, Media, and Sport, in which the CDU was embedded at the time, had a “trusted flagger” status on social media platforms such as Facebook and Twitter, meaning the companies would fast-track their requests for content moderation.

The RRU, which also was set up in March 2020, was closed last year, while the CDU operates now within the Department for Science, Innovation, and Technology.

A government spokesperson denied that individuals had been targeted.

“The unit’s purpose is to track narratives and trends using publicly available information online to protect public health and national security,” the person said in a statement emailed to The Epoch Times.

“It has never tracked the activity of individuals and has a blanket ban on referring journalists and MPs to social media platforms. None of the people named in this report were ever referred to social media platforms by the government and any claim otherwise is objectively false,” they added.

Meta, which owns Facebook, hasn’t responded to an Epoch Times request for comment. The same request emailed to Twitter was returned with an automated response consisting of a poop emoji. Elon Musk, CEO of Twitter, announced on the platform in March that the emoji would be sent automatically when journalists sent requests for comment.

Civil Liberty group Big Brother Watch, which dubbed the government’s counter-disinformation units the “Ministry of Truth” after the propaganda department in George Orwell’s dystopian novel “1984,” renewed its call for the CDU to be “suspended immediately [and] investigated.”

Former minister Jacob Rees-Mogg called on the continuing COVID-19 Inquiry to investigate “the oppressive methods used to override dissent.”

“It is clear from [Former Health Secretary Matt] Hancock’s messages that steps were taken to manipulate public opinion and now it appears underhand[ed] methods may have been employed to stop free speech,” he told The Telegraph.

Rees-Mogg was referring to Hancock’s WhatsApp communications with officials during the COVID-19 pandemic, which were published in March. One of the messages on how to communicate with the public about the emergence of the Alpha variant of the virus reads, “We frighten the pants off everyone with the new strain.”

The call to investigate the CDU comes after Former Prime Minister Boris Johnson agreed to hand over “all unredacted WhatsApp” messages to the COVID-19 inquiry.

Lady Hallett, chair of the official inquiry, requested the messages last month, saying they were significant for their insight into core political and administrative decision-making by the UK government during the pandemic.

The Cabinet Office has argued that the messages are unambiguously irrelevant to the inquiry, although Hallett dismissed the argument.

Livestock production — primarily cows — has apparently become such a problem for the climate that government officials in Ireland are mulling over a plan to kill hundreds of thousands of cows. 

The Irish Mirror said a new Department of Agriculture report shows officials planned to kill 200,000 dairy cows over the next three years to combat climate change. 

We told readers in late 2022, “Forget Oil. Now They Are Coming For The Cows.” And that’s apparently what the climate alarmists in Ireland are preparing to do.  

Ag website Farming Independent said it recently obtained the report via a freedom of information request. 

“Cuts to the dairy herd of 65,000 cows per year for the next three years will be needed to meet agriculture’s climate targets Department of Ag officals have estimated in an internal briefing paper seen by the Farming Independent,” the website said. 

Cuts to the dairy herd of 65,000 cows per year for the next three years will be needed to meet agriculture’s climate targets Department of Ag officals have estimated in an internal briefing paper seen by the Farming Independent. Read the full story here: https://t.co/SVRfMUX65d

— Farming Independent (@Farming_Indo) May 30, 2023

A spokesperson for the Department of Agriculture, Food and the Marine told the Irish Mirror, “The Paper referred to was part of a deliberative process – it is one of a number of modeling documents considered by the Department of Agriculture, Food and the Marine and is not a final policy decision.” 

The ag agency added: “As part of the normal work of Government Departments, various options for policy implementation are regularly considered.” 

Meanwhile, Pat McCormack, the president of the Irish Creamery Milk Suppliers Association, railed against the plan to cull dairy cows.

McCormack said, “If there is to be a scheme, it needs to be a voluntary scheme. That’s absolutely critical because there’s no point in culling numbers from an individual who has borrowed on the back of a huge financial commitment on the back of achieving a certain target that’s taken from under him.”

“We should be investing in an infrastructure that can deliver from a scientific perspective. And we know low emissions are better and we should be continuing to invest in further science and research because that’s absolutely critical as we move forward,” McCormack said, who was quoted by the Irish Times. 

Ireland’s farming sector appears to be under attack by climate nuts. Remember what the end goal might be:

… but who cares about: “Private jet use soaring in Ireland, new research shows.” 

Authored by Natasha Wright,

A new world order is evidently well underway with BRICS and Shanghai Cooperation Organization (SCO) nations offering ample alternatives to the hegemonic Collective West.

‘If you want a picture of the future, imagine a boot stamping on a human face – for ever.’

This is one of the most famous quotations from George Orwell’s 1949 novel, Nineteen Eighty-Four. The words are spoken by O’Brien, the grand inquisitor of the totalitarian regime in Orwell’s novel. I don’t think there has been any other author more quoted as of recent than George Orwell and his 1984 and Animal Farm (add to the cauldron the quotes by Aldous Huxley in his Brave, new world).

If we dwell a little more on the issue of the U.S. global dominance ever since the downfall of Berlin Wall, there follows a bewildering thought how the USA has managed to establish global hegemony for so long in such imperceptible shapes and forms? With a hindsight, an overwhelming number of nations and/or countries have retreated to a cosy solution to welcoming the U.S. (hegemony) with arms wide open. The ways how the U.S. has managed to imperceptibly spread its dominance are via all manner of cultural, educational, economic, financial and political influence of the U.S. seeping through the cracks and fault lines of any societal texture. They invariably have the same mechanisms to apply, the same tactics to deploy, the same strategies to reiterate endlessly which are easy to ‘read’ and ‘see through’ if repeated sufficient number of times. When the perpetrators behind the curtains are asked how is it possible that they always use the same tactics in their coloured revolutions and regime changes, they reply with dismissive frivolity: ‘Because it works. Why change it if it works every time?’

When asked why the Global West doggedly insist on military solutions to the ongoing Ukrainian crisis, some commentators tend to think that most probably because their politics of hegemony and continual warmongering have mercifully started to die down. The politics of imperial dominance and U.S. monopoly is starting to be unsustainable. The U.S. allies from this side of the Atlantic have mostly been unswervingly loyal to and blindly obeyed the global sheriff up until the 2003 and the outright and resolute refusal by Germany and France to join their impending Iraq invasion. On that occasion, the countries which constitute the most powerful pillars of the EU have denied the hegemon its self-righteous arrogance to illegal interventionism. That historic moment can be viewed as the springboard for the creation of a multipolar world in the new millennium yet it did not put an end to unipolarity. The U.S. continued behaving the way it did before. It went on with more meddling in the internal affairs of an overwhelming number of countries, it continued its occupation of Afghanistan most obviously, coupled with the coloured revolutions and ‘Arab springs’ of all sorts and all enveloped into the inexorable NATO expansion.

Then came the year 2018 and a critical moment when Vladimir Putin announced that Russia produced hypersonic weapons which meant that Russia overtook the U.S. for the first time. Russia gained strategic advantage in that respect. That may well have been the end of the unipolarity as we know it yet the issue has remained that the U.S. finds it hard to admit its imminent demise.

In retrospect, there has been a multitude of brutal wars and the downfalls of empires historically due to their decadence and deterioration in any given society or civilization. Let us recall a Russian thinker, Nikolai Danilevsky, a biologist by profession, who adopted an organic view of the world. Human civilizations, he maintained, were organic beings that were born, matured, and died. None could be said to constitute the “End of History.” In his most famous work, titled Russia and Europe, he outlined a theory that Russia and Western Europe were entirely distinct “cultural historical types.” Different cultural historical types, he said, developed in their own separate ways. In opposition to theories of cultural convergence, he compared the world to a town square from which different roads (i.e. different civilizations) moved out in different directions. Each cultural historical type was inherently distinct, and consequently it made no sense to try to force it to develop along the path of another. Oswald Spengler also presented a world view based on the cyclical rise and decline of civilizations in which he argues that a culture blossoms from the soil of a definable landscape and dies when it has exhausted all of its possibilities.

Today the matters seem to be vastly different given that there are two nuclear powers with a vast potential to destroy the world. The world power which is on the steep downward trend is drastically more dangerous in its crushing potential to shatter the world to pieces. The situation seems to be much more dangerous than it has ever been because the U.S. is only too willing to get stuck in the Thycidides Trap with China.

In reality, a new world order is evidently well underway with BRICS and Shanghai Cooperation Organization (SCO) nations offering ample alternatives to the hegemonic Collective West. The budding silhouette of the multipolar world has long emerged and with time it will take a more astable shape. The West has not managed to make a more significant onward march to the Far East and the Global South in generic terms, if we exclude Japan and South Korea from the equation.

One has to just consider for a moment a plethora of sophisticated statements as per the onward marching multipolar world given by Sergey Lavrov up to date:

“Unfortunately, our American colleagues still want to operate only on the basis of dictating policy, issuing ultimatums, they do not want to hear the perspectives of other centres of world politics’

The U.S. is refusing to “acknowledge the reality of the emerging multi-polar world,”

‘Amid the current, serious stage in the history of international relations, Russia and China will move to a multipolar, fair world order’

‘We are going through a very serious stage in the history of international relations. I am convinced that as a result of this stage, the international situation will become clearer significantly and we will move together with you, together with our other like-minded people, towards a multipolar, just, democratic world order’

Some Western commentators argue that Russia is facing further isolation because ‘all’ the ‘democratic’ countries have launched an avalanche of sanctions onto it and condemned it publicly in the UN General Assembly since the onset of the Russian special military operation in Ukraine. All those countries who tend to arbitrarily attribute the ‘democratic’ badge to themselves mostly go on to wrongfully claim that Russia has the support of the countries which know of no liberal democracy in their autocratic regimes. Sadly, the proliferation of these unfounded myths has mostly been allocated to the corporate Western media propaganda

First and foremost, this claim is based on flawed logic. The number of countries which have introduced sanctions on Russia is about 30 and the number of countries which did vote in the UN General Assembly is 140 out of which 110 countries do not plan to place sanctions on Russia and they do not want to gang up on any pressure on it either. If we do some basic mathematics, 6.5 billion people live in the countries which have not introduced sanctions on Russia and they are not planning to. Even these ongoing colossal changes apparently bring about the world dividing into two poles, the other one comprises 6.5 billion people which is in effect, if viewed from another perspective, the whole world without the Collective West

The colossal changes have already happened globally. Now overt economic cooperation up to date has melded into regional and international geopolitical cooperation among BRICS, SOC and beyond. These countries further develop the cooperation with Russia and certainly China.

To get back to the Western (flawed) views of the world divided into the arbitrarily attributed democracies on one hand and randomly ostracized autocracies on the other, the origins for these flawed views are certainly from the divide and conquer Western supremacy and Colonialism. That colonial world view is mirrored in the words of Josep Borrell and his rather arrogantly awkward metaphor ‘EU as a garden vs the rest of the world as a jungle’. No amount of profuse apologies will help this hapless unelected bureaucrat from Brussels with his gauche ‘witticisms’ in his overwhelmingly racist discourse.

Obviously, that is an enormous effort to ‘smother’ the world with an artificial division, an effort of ‘all guns blazing’ ‘all-out war’ against the creation of multipolar world in the most brutal Machiavelli style, though sporting the 21st century ‘outfit’. And yes, lest we forget, the impending doom of the U.S. getting entangled in another Thycidides Trap with China.

In case the ‘(un)democratic’ Europe with its utterly reckless moves loses its monumental market in China as well as abundant and affordable Russian resources and with the prospects of great many companies leaving for more arable pastures for the USA lured by Biden’s Build Back Better incentives, Borrell’s garden instead of letting a hundred flowers blossom will turn into a barren wasteland.