Tag Archives: markets

I Can’t Think of a Reason

Posted on by
Reply

Mark Zuckerberg wants to automate ad-creation in his Meta.

That’s not all he wants to do, though. Zuckerberg said this at his recent shareholder meeting (keep in mind that the these meetings generally are Zuckerberg talking to himself since he owns the controlling number of voting shares) [emphasis added].

In the not-too-distant future, we want to get to a world where any business will be able to just tell us what objective they’re trying to achieve, like selling something or getting a new customer, how much they’re willing to pay for each result, and connect their bank account and then we just do the rest for them[.]

Which of those processes—customer convenience or Meta convenience—is the one intended to be jumped on with both feet, and which is the one intended to be slipped past us?

I, for one, have no reason at all to let anyone other than myself or my wife have whenever-they-feel-like-it access to my financials.

Nvidia and Investing in the PRC

Posted on by
Reply

Nvidia‘s honcho, Jensen Huang, says it’s not straightforward for his chipmaker to leave the People’s Republic of China altogether. Many of his arguments, though, are irrelevant.

In the end, the platform that wins the AI developers wins AI. Export controls should strengthen US platforms, not drive half of the world’s AI talent to rivals.

You bet. But our chipmakers don’t need to be in the PRC to win the race—which isn’t a race, anyway, since technology always advances. It’s a never-ending journey. American chipmakers need to be elsewhere, tapping other talent, including American talent that still is second to none.

The US government’s decision in April to stop the company from selling its H20 chips to the Chinese market cost the company about $2.5 billion in lost sales in the April-ended quarter and will cost another $8 billion in the current period ending in July. That is because the H20 chip was designed specifically for the Chinese market to comply with then-current export restrictions, so it isn’t really salable anywhere else.

Avoiding export restrictions is entirely legal, but this is a trade and technology war that the PRC has been inflicting on us for years. Huang had to know that export restrictions would evolve in that war, just as weapons technology and export restrictions evolve in shooting wars. Again: American chipmakers don’t need to be in the PRC. American chips, of any generation, don’t need to be in the PRC.

Also, an irrelevancy from the peanut gallery:

“China is a quarter of the market. It’s a big number,” UBS analyst Tim Arcuri said in an interview. He added that Nvidia would have a “dominant hold” on that market if it were able to compete there.

Here’s a bigger number. Three-quarters of the market is not in the PRC. Nvidia would have a dominant hold on that market if it wanted to.

Dominant hold in the PRC chip market? What about all that PRC techie talent about whom Huang worries so much if left in isolation? Won’t they move even faster with American chips in their suite? Beside that, other companies, American and European, have held a variety of “dominant holds” there: GM, Tesla, Volkswagen, Nokia, Ericsson, and on and on, all had dominant holds, until they didn’t. And the reason they don’t anymore isn’t because they can’t compete on technology and market skill, it’s because they can’t compete with PRC government subsidies of domestic companies and PRC naked theft of intellectual property.

And this, from Huang, again:

China’s AI moves on with or without US chips[.]

Of course; that’s obvious. The PRC, though, does not need easy access to American chips—or those of other Western chipmakers’ chips—in order to do that. The presence of American chips (and others’) inside the PRC only makes it easier for PRC techies to “move on” through their reverse-engineering, theft of techniques, software, intellectual property, and so on.

Certainly, switching out of the PRC would be short-term disruptive to American chipmakers, but it would be mid- and long-term beneficial to them and to our nation. Especially if our chipmakers, and our government, were to arrange coalitions of Western chipmakers to do development and marketing rather than working strictly alone. There would be anti-trust problems here if the coalitions aren’t set up properly, but that’s doable, and has been done in many other venues.

Ending a Market Distortion

Posted on by
Reply

The Trump administration is moving to eliminate tax credits for buying battery cars. The Left and their news writers don’t like this.

The removal of the credit, created to incentivize US consumers to purchase electrified vehicles, would likely lead to a drop in EV sales and production.

NSS. The credit was created explicitly to “encourage” purchase of battery cars. On the other hand, Lauren Fix, a co-host of Talk 2 DIY Automotive, has this:

Getting rid of this $7,500 tax credit should not impact [Tesla] sales. People buy Teslas because they like the product…. They know what their customers want, and those that like Teslas will continue to purchase that product.

And [phrase substitutions in the original, emphasis added]

Once that tax credit goes away, I’m expecting [electric vehicles] to be about 2% of sales. There will still be electric vehicle sales, Tesla will still survive, and [Elon Musk] will do well. And other brands will make what consumers want.

There’re hints there. Get rid of government-created market distortions, and the market will produce economically viable products at far less cost without our tax dollars added in. That product mix will include plenty of battery cars as soon as they become technologically and economically viable—and are what us consumers want at prices we’re willing to pay without taxpayer handouts.

A Useful Self-Identification

Posted on by
Reply

The People’s Republic of China has decided not to apply its across-the-board 125% tariffs on certain goods that it imports from the US.

China’s government has exempted some US imports that the country would struggle to immediately source from elsewhere from its retaliatory tariffs, people familiar with the matter said.
Chinese authorities have told some importers of American goods that they would waive the most recent 125% increases in tariff rates for certain US imports. Those products include certain semiconductors and chipmaking equipment, medical products, and aviation parts, the people said.

These, then, are precisely the goods that we should cut off from exporting to the PRC.

On the other hand,

The Trump administration, similarly, announced exemptions on its “reciprocal tariffs” for China-made smartphones, laptops, and other electronics earlier this month, a recognition of the US’s reliance on China for such goods.

This is a mistake if the purpose is anything other than a negotiating tactic. There is a critical difference between the two sets of goods. The goods the PRC is exempting are critical components and component-making goods whose cutoff would severely impact that nation’s ability to make downstream products. The goods the Trump administration is exempting are finished products. Their supply chains can be adjusted to flow from non-PRC sources, including domestic, an adjustment that might be difficult, but an adjustment that both is eminently possible and is absolutely necessary: we should never have ourselves dependent on an enemy nation for such goods.

Republican Silliness

Posted on by
Reply

This time it includes more than just a few members of the Republican Chaos Caucus. The Senate passed its version of a reconciliation bill that includes a suitable start on tax rate reductions, and the House Republican caucus agrees with that—those reductions are consistent with the earlier House-passed reconciliation bill. However, the Senate’s bill doesn’t include enough spending cuts to suit the House Republicans, and the House Republicans are right on that.

This is where the silliness comes in. A few Republicans, including some from outside the Chaos Caucus, have announced enough “No” votes before the Senate bill comes to the House floor to kill the bill outright. That’s silly.

Instead of just killing the bill, or refusing to take it up at all, the House Republicans and those one or two Progressive-Democrat Representatives capable of reasoned argument should debate the Senate’s reconciliation bill—they’d be the big boys in the room, since the Senate Republicans ducked away from the House’s bill altogether—and then pass the Senate bill amended to include spending cuts acceptable to the House. That would create a House-Senate disagreement in the same bill, which would send the modified bill to the normal House-Senate Conference, wherein the tax rate cuts would be preserved, and badly needed much larger spending cuts could—should—be inserted into a Conference-approved bill for up-or-down majority votes in each house. Likely the much larger spending cuts still would be less than the House so correctly wants, but they’d likely be much larger than the Senate’s going-in proposal.

And, as is the case with budget framework reconciliation bills, it would set the terms of debate for those spending cuts in each appropriation bill. The difference this time, though, would be those much larger spending cuts in the framework would set a much higher floor than heretofore for spending cuts in those dozen appropriation bills.