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The Value Gap: Europe Cannot Scale (NBER)

Financial and product-market frictions constrain European firms’ ability to scale.

The Changing Value of Freedom, Fulfillment, and Family (NBER)

• Children are increasingly seen as interfering with the freedom of parents.

• Views on whether mothers of young children should work have become markedly more progressive and account for a substantially larger share of the [fertility] decline among the tertiary-educated.

• Fewer people believe that women or men need children to lead a fulfilled life.

India

Gross FDI hit 15-year high of $30.7 billion in April-June 2026 (thehindu).

India’s Closing Auction System needs more traders and Ease-of-Shorting (bloomberg, bloomberg).

E20 fuel is causing havoc as predicted (autocarindia).

Subhash Chandra gets relief in personal guarantee case as leading banks face 99% haircut (thehindu). Did Subhash Chandra get away with paying Rs 6.5 crore against Rs 22,006 crore debt? (opindia)

Large Indian jeweller chains like Kalyan and Tanishq are offering customers cash for their old gold, even as RBI data shows an upswell in gold loans. Gold loans have emerged as the largest segment within non-housing retail loans, growing at an annual compounded rate of 42.4% since March 2024 (livemint).

Chinese firms’ reluctance to transfer battery technology to Indian companies and Beijing’s continued restrictions on rare earth magnet exports are pushing automakers and component makers to seek alternatives to Chinese technology and supplies (livemint).

NEET: Not in Employment, Education, or Training (indianexpress).

Education consultants estimate that 25,000–30,000 Indian students go abroad for medical education annually, though some estimates place the number closer to 50,000. Russia, the Philippines, Georgia, Bangladesh, Kazakhstan, and Kyrgyzstan are among the preferred destinations. However, only 35% - 47% pass India’s FMGE (Foreign Medical Graduate Examination) when they are done (business-standard).

row

To make its workforce “AI native,” Meta explored slashing the size of
many teams across the company by as much as 60% in two waves (reuters).

Trump’s war on Iran is rapidly draining US navy budget. (theguardian).

Germans are now hoarding gold for more than a trillion euros 5.7% of global gold holdings (faz). They have a bit of catching up to do: Indian households and temples hold approximately 11% to 14% of the world's total gold.

Odds & Ends

With the right steps, it’s possible to put type 2 diabetes into remission and restore healthy blood glucose levels (sciencefocus).

The end of programming as we know it (pauldix).

Most Questions About AI Aren’t About AI (conspicuouscognition).

Meme of the Week

Split the standard past-return momentum signal into its intraday and overnight components and test which piece actually predicts future returns.

We find that overnight momentum returns under-perform intraday momentum returns. However, regular momentum returns beat both. Day vs. Night Momentum.

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What can we learn from the Situational Awareness Fund Blow-up (aswathdamodaran):

1. Investment actions that are inconsistent with investment conviction risk ruin.

2. Momentum is a wild card in every investment strategy, and you ignore it at your own peril.

3. Humble money beats smart money.

Research

Happy guys finish last (NIH)

Happiness is the most attractive female emotion expression, and one of the least attractive in males. In contrast, pride showed the reverse pattern; it was the most attractive male expression, and one of the least attractive in women.

India

India is warming slower than the global average. Average temperatures has shifted by less than 0.9ºC (1.62ºF) since the start of the 20th century. Meanwhile, the overall planet has warmed by 1.4ºC (2.5ºF) in less than 50 years, since 1980 (sciencefocus).

ISRO will not make any launch vehicle, all tech to be handed to private sector (indiatoday).

Tamil Nadu freebie scheme: Joyalukkas and Kalyan Jewellers are expected to supply a total of 1,28,499 one-gram gold rings for a four-month period beginning from June (thehindu).

How Karnataka's Freebie Schemes Anna Bhagya And Gruha Lakshmi Are Eating Its Own Cities (swarajyamag)

Half of Maharashtra homeopathy colleges have political links (timesofindia).

From sugar exports to imports (economictimes).

India needs a transparent assessment of crude-oil savings vs. food imports, farmland diversion, water consumption and ethanol subsidies/incentives.

Beijing is constructing eight to 10 international deep-water ports that are effectively encircling India (swarajyamag).

row

If the US shale revolution remains one of the most unappreciated geo-economic events of the last 25 years, the surge in oil produced by the rest of the Americas, particularly Brazil and Canada, is even more overlooked (bloomberg).

Several airlines, such as Delta Air Lines and Virgin Atlantic, have used artificial intelligence (AI) to set ticket prices dynamically (thetravel).

Why does everything feel like a scam? (yourbrainonmoney)

The Treasury has made the American economy a safe space for corruption (theatlantic).

Not that long ago, the press could root out corruption, topple presidents, and end wars. Now, even the biggest scoops have little impact (craigunger).

Meme of the Week

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India

BofA to take 49.9% stake in Jio Credit for $1.9 billion in India push (reuters).

Karnataka bans sale of gutka, pan masala, some tobacco products for a year (indianexpress).

India’s two-wheeler makers are putting engineering at the heart of their next competitive battle. TVS Motor nearly double its R&D investment in two years. Hero MotoCorp has sustained R&D spending above Rs 1,000 crore for the second consecutive year. For Ather, engineers accounted for 42% of its on-roll workforce (timesofindia).

India’s labor force is unlikely to face widespread job losses from artificial intelligence. Construction and retail trade account for about 40% of India’s workforce (bloomberg).

India is spending more to subsidize fertilizer even as much of what farmers apply to their fields is lost before crops can use it. Around two-thirds of fertilizer applied to crops may not be absorbed by plants, leading to groundwater contamination, air pollution and inefficient use of subsidized farm inputs (livemint).

Quis custodiet ipsos custodes? Who watches the watchmen? (businessworld)

Your car will grind to a halt and you will like it (reuters).

row

The Iran war is now being shaped as much by industrial supply and logistics as by economic considerations and the politics of the midterms (theatlantic).

White House says transshipped goods cost up to $26 billion in lost tariffs (reuters).

The world’s largest financial groups are working with Nvidia to assemble a funding package of more than $500bn for AI infrastructure (ft).

Near-record inventories, technological advances and the rise of key exporters such as Brazil and Russia have made the global food system more resilient to this year's "super" El Nino than similar past events (reuters).

South Korean retail investors must now complete a week-long course before they can start trading in single-stock funds (yahoo).

Terabytes worth of credentials, many belonging to the world’s biggest and most sensitive organizations, have been exposed in a supply-chain attack on LiteLLM (arstechnica).

Meme of the Week

The immediate post-crisis period saw min-vol/min-var strategies grow in prominence. Drawdown control became a thing. Trend-following got rebranded as “crisis alpha.” Risk-parity grew in popularity. And academics published papers on strategies that would have saved investors during the GFC.

The problem is that if you throw enough data into the blender, you will find something that missed that one crash.

Also, fat tails are, by definition, infrequent and do not have the same causal factors. There is absolutely no certainty that the thing that avoids the known tails will work on the next one.

This did not stop some academics from powering full steam ahead with over fit backtested papers that promised to take investors to the promised land.

We looked at four such papers from the same group of authors (there were more but we decided not to waste any more tokens) that we present here: PAA · VAA · DAA · BAA · ABA — A Comparative Backtest.

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VIX, bond yields, currencies, gold prices, commodities, high-yield bonds, credit spreads, the Baltic Dry index are all good for a vibe check on equities. However, codifying it into an investment strategy doesn’t make any sense… unless you are an academic.

Unfortunately, its not just the academics? There are hundreds of funds and ETFs that promise investors that they have a secret sauce that will let them deliver superior returns with less volatility using proprietary quantitative models. Here’s an example.

The pitch:

The delivery:

Markets this Week

Are they back?!

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India

A new public fund to boost India’s deep-tech ambitions in the private
sector has approved, in its first round, Rs 2,192 crore in soft loans to
22 private companies at the cutting edge of space science, energy tech
and pharma, among others. These companies were chosen from 124
applicants by a 12-member panel. An investigation by The Indian Express has found that of the 22 recipients of public money, 15 have investment ties to seven members of the selection committee. These together got over Rs 1,377 crore. (indianexpress).

The government argues that judicial precedent has laid down creamy layer concept does not apply to SCs and STs (thehindu).

India's food safety regulator has barred the sale of some popular
whiskies and rum made by Diageo's India ​unit and India's Inbrew
Beverages for using artificial flavouring instead of proper ageing and
ingredients to achieve their taste and aroma (reuters).

India paves way for return of merchant fees on digital payments through UPI (reuters).

Jaisalmer (Rajasthan) holds 1,750 million tonnes of the steel-grade limestone Indian mills need, but hauling it 1,853 km to Bokaro's steel plants (Jharkhand) costs more than shipping it from Oman. Things are now changing. (swarajyamag).

How Apple and India Built an Alternative iPhone Production Hub (bloomberg).

The Samudra Manthan scheme aims at boosting India’s deepwater hydrocarbon exploration and energy security with an ₹84,084 crore investment (thehindu).

Enshittification of Honda cars continue: Honda Motor Co. has outsourced development of a new vehicle program to Tata Technologies Ltd. (bloomberg).

India's education system is producing people who are simultaneously overqualified and underqualified (economictimes).

Is AI slowly killing IT outsourcing? (livemint)

Persistent Systems has decided to skip campus recruitment for FY27 (livemint).

A surge of app lending is pushing Indians into a debt trap as they borrow more to repay old loans (livemint).

India's top four listed developers are betting on over ₹1 trillion of premium project launches in FY27 (livemint).

The number of births delivered by caesarean section rose from 17.2% in 2015-16 to 27.2% in 2023-24. Of particular concern is the stark contrast between public and private health facilities: 54% births in private health facilities were delivered by caesarean section in 2023-24 versus 16.9% births in public health facilities. Caesareans accounted for more that 50% of births even in rural private facilities, and were almost 60% in urban areas (telegraphindia).

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Illinois Institute of Technology cuts 160 faculty and staff (wbez). Also, universities are admitting students who haven’t even applied (bloomberg). Related: Among Indian students, visas were down 60%; 46% fewer for Chinese (washingtonexaminer).

California’s rich snap up New Zealand ‘golden visas’ (ft).

Capital One had 300 Trump accounts — then its money-laundering team stepped in (fortune).

Trump has shattered American power, and Beijing is picking up the pieces (paulkrugman).

China has launched a global hunt for hundreds of billions of dollars in unpaid taxes going back decades (ft).

Over $130 million in Bitcoin has been stolen from Coldcard hardware wallets due to a critical firmware vulnerability (parameter).

Viagra could help stop cancer from spreading (nypost).

Why Sony cannot bring back the walkman (obsoletesony).

A.I.

OpenAI agents wanted to cheat on a test. So they exploited vulnerabilities to setup a message board to coordinate a break out. Then exploited two zero-day vulnerabilities to hack into another AI company to steal the answers (youtube).

An agent powered by Mythos tried to insert malicious code into an open-source software project on GitHub, having decided that it would help the model pass the evaluation. In an attempt to get the code approved, the agent then created fake online identities and used them to press the project’s human overseer into accepting the code (theguardian).

Chinese startup Moonshot's flagship AI model, ‌Kimi K3, escaped a cybersecurity testing environment (reuters).

Ten advances in mathematics and theoretical computer science (openai).

Scientists trained AI on libraries of DNA and then asked the model to create recipes for viral genomes. Sixteen of them were viable, yielding new viruses (nytimes).

Meme of the Week

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Markets this Week

The South Korean stock market is absolutely bonkers.

It was one of the best performing stock markets last year and this year started the same. Locals got ultra-levered giga-long. And then, as if on cue…

… the market got cut in half.

How it started: 'Fear of missing out' pushes more people into stocks as markets break record highs (koreatimes).

How it ended: Margin Calls Surge as Korea Stocks Plunge, Forced Sales Hit 61 Billion Won in a Day (sedaily). Citi Estimates Korean Retail Investors' Leveraged ETF Losses at $38.81 billion (sedaily).

More here: country ETFs, fixed income, currencies and commodities.

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India

NRIs have poured $36.7 billion into Indian banks through FCNR deposits (livemint).

Swiss watch imports crossed ₹3,500 crore for the first time in 2025, up from nearly ₹2,600 crore in 2024, and industry executives expect that figure to be surpassed this year (livemint).

As AI grows more sophisticated, as the supply chains that power it become more contested, and as access to frontier models becomes geopolitically charged, India must begin to ask a different set of questions. Not what applications it can build on someone else’s infrastructure but what the world needs (carnegieindia).

Making Artificial Intelligence affordable and ubiquitous should become India’s next transformative public infrastructure revolution (thehindu).

AI data centre rush fuels India's next growth wave with infrastructure push (business-standard).

Over the past two decades, India’s industrial policy has focused overwhelmingly on frontier industries. Yet much of this manufacturing remains assembly-based because the domestic supplier ecosystem remains weak (business-standard).

Labour shortages are quietly crippling factory floors across India. “I told them to pay me more, but they didn’t agree, so I left the factory.” (livemint)

On Probation: Why Modi 3.0 Should Prepare For A Million Mutinies Now (swarajyamag).

The failing promise of higher education has left young Indians in a foreseeable state of disaffection (livemint).

row

South Korea’s ‘bipolar’ stock market (cnbc). Analysts react (reuters).

How Leopold Aschenbrenner built a $45 billion AI hedge fund — and lost most of it in days (cnbc).

A mini-crisis in Spain. But first, a map:

60,000 migrants reach Ceuta from Morocco (bbc). Spain deploys military (cnn). Spain says it had largely reversed the surge (france24).

China is backing strategic businesses, like green tech, while the west props up old sectors with political clout, like agriculture (ft).

China has begun manufacturing domestically developed immersion ​deep ultraviolet lithography machines, a key chipmaking tool long dominated ‌by Dutch supplier ASML (reuters).

China has an organized pipeline through which the Chinese Communist Party identifies American Marxists, brings them to China, immerses them in party doctrine, connects them with senior CCP officials, and sends them back into the United States, where they work inside unions, political coalitions, media outlets, and voter-mobilization operations (nataliegwinters).

The US is banning foreign robots (theverge) and that includes robot vacuum cleaners too (theverge).

A growing share of Americans die with nothing left after care (washingtonpost).

Meme of the Week

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Research

The Labor Market Impacts of GLP-1s (NBER)

We find that GLP-1 treatment reduces long-term sickness leave by 17.3%.
We estimate total fiscal benefits of GLP-1 initiation of approximately
1.3–1.5% of annual labor income per employed individual.

India

India’s first hydrogen train has started passenger service (indianexpress).

With Skyroot rocket launch, Indian space industry crosses a milestone (indianexpress).

Central Know-Your-Customer 2.0: Indian banks and insurers will launch a common customer identification system in August, with ‌asset managers joining later allowing customers to access financial products without separately submitting identification documents (reuters).

The pipeline of prospective mutual fund (MF) players remains sizeable
despite the rapid expansion in the number of fund houses in recent years, with nine entities awaiting regulatory approval from SEBI. India now has 55 operational fund houses (business-standard).

SEBI proposes a whole bunch of portfolio management related regulations (reuters).

Efforts to curtail equity derivatives trading have prompted some of the ​country's mom-and-pop investors to shift into leveraged stock bets, driving a surge in margin loans (reuters).

The US has imposed a 10% tariff on most Indian imports under Section 301 (outlookbusiness).

Nearly a third of India's 140 small- and medium-sized solar panel
makers, which make up 60% of manufacturing capacity, have halted output
and the rest cut cycles to three to four days as they face waits stretching up to eight months for domestic components to replace Chinese imports as the government pushes to beef up domestic ​manufacturing (reuters, livemint).

After decades of uncertainty, the Ken-Betwa river linking project, India’s first inter-basin river transfer that aims to irrigate the parched Bundelkhand region, is now racing to meet new deadlines (indianexpress).

China doesn’t dominate rare earths because it owns the mines. It dominates because it spent 30 years learning to refine them — a lead money alone can’t close (thehindubusinessline).

A Cockroach Joke Turns Into a Giant Modi Headache (bloomberg).

row

There’s a new mathematical formula that predicts TACOs (marketwatch).

The US will collect duties of between 10% and 12.5% on imports from most major trading partners, its biggest move yet to reconstruct Trump’s tariff wall that was struck down by the Supreme Court (bloomberg).

The biggest obstacle to undoing Mr. Trump’s tariffs after 2028 won’t be legal. It will be financial. With the national debt clocking in at a staggering $39.6 trillion, the market responsible for selling this debt has quickly grown addicted to the money coming into the government every day thanks to tariffs (nytimes).

The SEC has proposed amendments to its periodic reporting framework that would allow domestic reporting companies to report on a semiannual basis as an alternative to quarterly reporting (kpmg).

Hidden debt at U.S. tech giants swelled eightfold in roughly four years to an estimated $1.65 trillion as artificial intelligence investments ballooned (nikkei).

The U.S. Department of Education began rolling out a new accountability test that most colleges and universities will soon have to pass: If an undergraduate program's graduates don't earn more than workers who never went to college, that program could be cut off from federal student loans. The same goes for any graduate program whose graduates earn less than someone with only a bachelor's degree (npr).

The U.S. has an imperial appetite, but a tourist's approach to it (npr).

Foreign investors applied to invest $40.6 billion in Thailand in the first half of 2026, up 80% from a year earlier, amid a wave of investments in artificial intelligence and data center projects (bloomberg).

A record number of people are leaving New Zealand, with 111,900 departures in the 12 months to April (bloomberg).

The Coming Clash Between China and Europe (foreignaffairs).

China is gaining troubling military know-how from Russia (economist).

Netflix and YouTube are on a collission path (spyglass).

A.I.

Extremely basic AI prompt cracks decades-old maths problem (newscientist).

In 204 days, AI systems were credited with solving or refuting 118 distinct open mathematics problems (claude).

OpenAI’s models were not exactly trying to take over the world. The company says that it was running some routine evaluations in what is known as a “sandbox”—a walled-off environment that limits internet access, lest the bots simply search for the test’s answers. But these AI systems, including GPT-5.6 Sol, which is available to consumers, broke out of the sandbox and accessed the open web by exploiting a previously undetected vulnerability. The models discovered that the answers to this particular evaluation were on Hugging Face, a company that hosts and publishes many AI models and papers, and then broke in to steal them.

A Startling Glimpse at AI’s Ruthless Efficiency (theatlantic)

An agent left notes apparently for future versions of itself. The ‌notes, found in ⁠a part of OpenAI's infrastructure, laid out instructions for how agents could free themselves from OpenAI’s internal constraints (reuters).

Anthropic pays $1.5 billion to settle a class action lawsuit brought by a group of authors who accused it of misusing their books to train its AI chatbot Claude (reuters).

America’s AI labs are under threat from cheap Chinese rivals (economist).

Odds & Ends

Call Her Mommy: Gen-Z women are paying for, and parenting, their boyfriends (thecut).

Meme of the Week

MTUM and SPMO are popular ETFs for US equities…

… while IMTM and IDMO are the international versions of those.

Markets this Week

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India

Bodhi Tree in advanced talks to buy stake in Adyar Ananda Bhavan at ₹3,000-3,500 crore valuation (livemint). Hope this doesn’t end like New Silk Route’s acquisition of Adigas’ (deccanherald).

More than 100 companies have approached JPMorgan Chase & Co. to explore banking and payment solutions for corporate treasury operations in India’s GIFT City over the next 12 to 18 months (livemint).

Europe’s IPO aspirants head to India (thehindubusinessline).

Files relating to India’s largest nuclear power plant Kudankulam exposed in data breach (reuters). Nuclear Power Corporation of India Limited denies (thehindu).

Petrol pump owners claim ethanol’s moisture-absorbing nature is contaminating fuel (thehindu). And no, E20 petrol won't make fuel cheaper (cnbctv18).

row

1.2 million Korean investors have been hit with margin calls this last week - 1 in every 30 working-age adults (investing).

China Is Sabotaging the World That Enables Its Rise (foreignaffairs).

How SK Hynix became the king of advanced memory chips (economist).

Is Netflix Washed Now? (sharptext)

IBM stock tumbled 25% this past Tuesday, its worst single-day drop on record, following a rare pre-announcement of its quarterly results (barrons).

White House teleprompter operator made more than $100K betting on Trump's speeches (abcnews).

Truth Social to sell trading firms 'fastest' access to Trump's posts (reuters).

Hackers Claim to Leak Stolen Madison Square Garden Data (wired). MSG’s database tracked and categorized hundreds of celebs, famous Knicks superfans, and even some of Taylor Swift’s wedding guests (wired, wired).

A.I.

China's open-weight Kimi model stuns AI world with frontier-level results (axios).

The market is pricing AI as a technology cycle when its financing is the machinery of a credit-and-real-estate cycle (groundbrkr).

The problem with generative AI is that it does not scale. The work of building efficient, scalable systems has not been done (theatlantic).

Uber’s Autonomous Vehicle Strategy: Slow Their Adoption (wired).

xAI's Grok Build CLI Uploads Entire Git repositories to a Google Cloud Bucket (internationalcyberdigest).

Meme of the Week

On the face of it, the approach sounded great. Trend-following is usually plagued with over-fitting and the no-magic approach sounded like salvation. However, it was not to be: Strategy 9.

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Markets this Week

Are we back?

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India

India’s second-largest two-wheeler company, Honda Motorcycle and Scooter India (HMSI), wants to bring more of its global premium motorcycle models to India and localise them (livemint).

Amid a growing nationwide debate over E20 petrol, the Centre on Friday defended its ethanol-blending programme, assuring motorists that the fuel is safe for vehicles and does not cause engine damage or major performance issues (livemint). It has ruled out offering pure petrol, E10 and E20 simultaneously across India, saying maintaining multiple petrol grades would increase costs and create significant logistical challenges (autocarindia).

US Justice Department on Adani: “should have been dropped a year ago -- or never brought in the first place. The United States pretending to be the world police can cause diplomatic strife and also wastes resources better spent on domestic concerns.” (ndtv)

The RBI has reasserted a call for a cryptocurrency policy "leaning towards prohibition," while the country's tax department warned that trading via offshore exchanges is hard ‌to track (reuters).

Maharashtra to treat Gutka manufacturers, transporters and sellers form an organised nexus, prompting the state to invoke MCOCA, a law typically reserved for terrorism and organised crime (ndtvprofit).

Japan has banned fresh mango imports from India, after the world’s biggest producer failed its pest-control checks (economist).

row

BlackRock to launch Nasdaq-100 ETF, challenging Invesco's dominance (reuters).

A Century of U.S. Stock Returns: Expect the Unexpected (ofdollarsanddata).

There is no investing strategy that really constitutes “doing nothing” (behaviouralinvestment).

Western housing shortages do not just prevent many from ever affording their own home. They also drive inequality, climate change, low productivity growth, obesity, and even falling fertility rates (worksinprogress).

Baby boomers are expected to pass $36 trillion to their heirs in the next two decades. The bulk of that money will flow to people who are worth far more than the average. And that means much of it will be saved or invested, rather than spent. (washingtonpost).

The Pentagon was funded with a budget of nearly a trillion dollars, but it is running out of cash (nbcnews).

U.S.-imposed oil ​blockade has crippled Cuba’s electric grid (reuters).

In Europe, for two decades, capital has been abundant and cheap, and corporate profits strong; yet investment, productivity, and wages have stalled. The binding constraint on growth has not been the price of labor, but the allocation of capital (socialeurope).

All this insurance that European states are committed to providing was implicitly backed by the promise of future growth. And that growth is no longer expected to materialize, but the promises remain.

Europe chose insurance. America chose growth. (thetwocents)

China's gig economy has become a crucial employment buffer as the property crisis wipes out construction jobs and manufacturers shed workers through automation and cost-cutting ​amid tariffs, overcapacity and price wars (reuters).

Despite widespread layoffs justified by AI reallocation, studies indicate AI is economically viable in only a fraction of roles. The unsustainable model of subsidized AI pricing is unwinding, forcing a market correction (forbes).

Meme of the Week

Buying & holding the S&P 500 index out-performed GEM that last 7 years at least: Global Equities Momentum (Update).

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Markets this Week

Bottom in flows in?

Since 2015, gold has out-performed the NIFTY 50 TR index in spite of the recent ~30% drawdown…

More here: country ETFs, fixed income, currencies and commodities.

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Research

GLP-1–Induced Weight Loss and the Female Obesity Penalty (NBER)

GLP-1 medications generate large weight loss and may also alter social and economic outcomes. Single women’s marriage/cohabitation rates rise by 29 percentage points and employment among baseline non-employed women rises 27 percentage points after six or more quarters.

India

Japan’s communications ministry will launch eight communications infrastructure projects in Taiwan and India under a new digital corridor initiative, strengthening cooperation on undersea cables, satellite communications, and digital infrastructure (taiwannews).

India’s demographic dividend has a window of just 15 years or so before ageing sets in (livemint).

Fresh questions have emerged from the audit trails of Rajesh Exports. SEBI had said it could not independently verify over 98% of Rajesh Exports' reported revenue (livemint).

India allows four Chinese-linked power equipment firms to bid for government projects (reuters).

Supreme Court says AI-generated hallucinated precedents ‘catastrophic’ to judicial process, sets aside NCLT order (thehindu).

Data released by the Indian Railways shows that 3.39 crore passengers who booked tickets could not travel in the 2025–26 financial year due to unconfirmed or waitlisted tickets, highlighting the significant gap between demand and available capacity (deccanherald).

row

Putin gambled that the West would lose its nerve, and Ukraine would always be held on a short leash by its friends. That leash has snapped (telegraph). Fuel shortages, military unrest, and a strangled Crimea (thebulwark). Putin no longer has an easy way out. The war is financially, demographically, and politically unaffordable (foreignpolicy).

Trump earned more than $1.4 billion in income through several cryptocurrency ventures in 2025 (politico).

CBOE Seeks to List Prediction Market Type Options on Earnings Metrics (yahoo).

Korea unveils megaprojects focused on semiconductors, physical AI, data centers. Samsung, SK hynix pledge $519 billion (koreatimes).

A.I.

Anthropic wants to develop its own drugs (theverge).

Anthropic is discussing a new custom chip with Samsung (techcrunch).

OpenAI ​has discussed giving the U.S. government a 5% stake (reuters).

The U.S. chases AGI/superintelligence as an end in itself; China is "AI-pilled but not AGI-pilled," focused on diffusing AI across manufacturing, healthcare, and other sectors — chasing "the application" rather than "the prize." (brookings)

Meme of the Week

Markets this Week

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Research

The Misguided Beliefs of Financial Advisors (wiley)

Advisors typically invest personally just as they advise their clients. Advisors trade frequently, chase returns, prefer expensive and actively managed funds, and underdiversify. Advisors' net returns of −3% per year are similar to their clients' net returns.

India

SEBI proposes opening up Direct Market Access for retail. DMA is a facility that allows investors to place buy and sell orders directly into a stock exchange's trading system through a broker's infrastructure, without manual intervention by the broker's dealer (moneycontrol).

The Indian government is in talks with the UAE to sell some of its flagship defence systems, including the supersonic cruise missile BrahMos and air defence system Akashteer (reuters).

The India-US GE F414 engine deal has hit a roadblock after steep price escalation pushed costs beyond ₹200 crore per engine. The US has tripled the price of every engine around three times (timesnownews).

Smaller cities are emerging as a major source of corporate travel in India, with nearly 60% of bookings in the first half of this fiscal year originating from or routed to such cities (economictimes).

The government has issued a series of amendments tightening the FCRA Rules for NGOs and associations in India on receiving and using foreign money, allowing a range of faith-based activities while excluding proselytisation (hindustantimes, thehindu).

Police in several States have started collecting DNA records, primarily from blood samples, of suspects arrested in heinous crimes. Along with DNA profiles, photographs, fingerprints and iris scans, the government is creating a unique identification record of arrested persons and convicts that can be retained for up to 75 years (thehindu).

One-gram gold ring for babies born in Tamil Nadu government hospitals (thehindu). Andhra Pradesh already gives Rs 30,000 to families on the birth of a third child and Rs 40,000 for the fourth (ndtv).

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From batteries and solar panels to rare earths and life sciences, China is developing some of the world’s most advanced technologies. These advances are raising major questions for U.S. officials, who see danger in relying too much on Chinese technology (nytimes).

China's foie gras production may have hit as much as 14,000 ​tons last year. That would represent a jump of roughly 30% from 2024 and compares with estimates of just 2,000 tons a decade ago. France — the world's leading producer — saw output slip 3% to 15,044 tons ​last year (reuters).

As many as 100 million Chinese consumers are struggling to service their personal debt. Bad consumer loans from credit cards to mortgages have surged over the past few years. Non-performing household debt soared 21% last year to a record of at least 2.22 trillion yuan ($329 billion). As much as 5% to 6% of retail loans at some of China’s large banks could be non-performing. The debt overhang is undermining national efforts to boost domestic consumption (bloomberg).

The puzzle is not why China exports cars but why it is still exporting t-shirts. China competes with America and with Africa at the same time. It somehow holds a capital-cost advantage and a labor-cost advantage at the same time (yashenghuang).

Hormuz tolls: within two months, either Iran blinks, or the US does, or the MoU breaks down (rabobank).

The war was a demonstration of Iranian strength whose psychological consequences will be immense. The negotiations, conversely, look to be a no less potent demonstration of American weakness or stupidity (theatlantic).

Nearly 15,000 U.S. cities will face noticeable depopulation by 2100. A study estimates that the largest losses will come from the Northeast and Midwest as people move to the South and West (popularmechanics).

By May 2026, 332 of 1,900 Silicon Valley unicorns had raised money at a valuation at or below their peak (economist).

Temperatures are forecast to reach as high as 40C this week, with Britain sweltering under a record heatwave that has forced schools to close, brought trains to a halt and led to the Met Office issuing a red “risk-to-life” warning… and homeowners are being forced to tear out air conditioning from their private properties under climate laws (yahoo).

The US government Friday lifted its block on Anthropic’s powerful Claude Mythos 5 AI model, allowing the company to release it to more than 100 US institutions, including major companies and government agencies (semafor).

Meme of the Week

But somehow, fund managers are given a pass. We wrote a note about it: Winning with Market-cap ETFs.

Markets this Week

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Research

Can trend-followers improve performance by allocating more capital to sectors where trend opportunities have recently been strongest? (Quantica)

No. We find that the profitability of a representative medium-term trend-following signal exhibits a clear horizon dependence: sectors with stronger recent trend-following performance tend to retain a relative performance advantage over subsequent months, but this effect weakens and ultimately reverses over longer horizons. Despite this predictability, reallocating capital on the basis of past trend-following performance fails to deliver a consistent improvement over a diversified trend-following portfolio.

Income and emotional well-being: A conflict resolved (pnas)

Do larger incomes make people happier? Yes. If you are unhappy even after making a lot of money, you have a problem.

India

The government invoked emergency powers to block Telegram in the country until June 22 amid concerns the platform was being abused to defraud candidates for a national entrance test for medical colleges (reuters).

40 lakh tonnes of coal, worth around Rs 1,600 crore, ‘disappeared’ from SCCL (deccanherald).

External shocks expose India’s slide into middle-income stagnation (economictimes). Echoes of 1990-91? (business-standard)

A new house should have an inverter, a water filter and an air purifier just like it has a TV, a fridge and a cooking stove. Over time, we start believing that this is how it is meant to be and perhaps even should be. Our acceptance means they rarely become issues for politicians or even journalists (timesofindia).

The number of Indian professionals from global technology companies actively seeking jobs has surged more than fourfold in the past month amid a wave of global tech layoffs, unleashing a flood of talent into the country’s already-strained job market (economictimes).

Indian companies have generated record cash flow since the pandemic and invested it less in domestic capacity than at any point in the last decade. Domestic capital, in surplus, is selecting destinations other than the domestic economy (livemint).

Indian hotel chains double down on resorts (livemint).

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Cybercrime group FulcrumSec stole 1.3TB from Novo Nordisk and is shopping stolen data after the pharma giant rejected a $25M ransom demand in June 2026. The 1.3TB haul includes 24 proprietary AI models, clinical trial data on roughly 11,500 patients, drug pipeline details, and manufacturing facility files (pomegra).

Xi Jinping’s economic model is faltering but he refuses to relinquish control (telegraph).

Eager to keep capital within its borders, China is restricting the ways individuals can engage with global markets (nytimes).

Gold isn’t a good hedge for inflation or uncertainty (fisherinvestments).

Officials in Tehran got the United States to sign a document that even Americans described as degrading, mortifying, a total capitulation (theatlantic). Iran Is a Bigger Defeat Than Vietnam (foreignpolicy).

For the first time, wind and solar generated more electricity than gas worldwide in April 2026 (ember-energy).

Meme of the Week

Speaking of stories and flows, SpaceX IPO’d this week - becoming a $2T market-cap company and making Elon Musk world’s first and only trillionaire.

In a move that could bring the AI trade to a grinding halt, the U.S. government banned the use of Anthropic’s latest models - Fable and Mythos - by foreign nationals, citing national security concerns (nbcnews, anthropic). The entire AI bull thesis was predicated on models getting powerful on an exponential scale and being able to fix the mistakes that today’s models make. If capabilities get neutered and the TAM constrained, then the whole trade needs to be reevaluated.

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Wagering the Bread Money: Sports Betting Legalization and Food Sufficiency (NBER)

Interest in sports gambling increases sharply following legalization. Legalized sports gambling reduces household food sufficiency by 2.1% among working-age adults without a college degree, which translates to a 10.5% decline among active bettors.

Is the iPhone Birth Control? (NBER)

The U.S. general fertility rate has fallen by 22% since 2007, a sustained decline not readily explained by economic conditions, contraceptive use, housing or childcare costs, or other commonly cited factors. We assess the potential role of a different shock: the diffusion of the smartphone. Access to the iPhone reduced births by 4.5–8.0% at ages 15–19 and 3.2–6.6% at ages 20–24, with statistically significant but smaller declines among older cohorts.

India

Retail ‌inflation rose to 3.93% in May, driven by higher food and fuel costs (reuters).

Bond-tax moves to catalyse foreign debt inflows, bolster bid for global index inclusion (reuters).

RBI’s FCNR move opens door to equity-like dollar returns for NRIs (livemint).

China is increasingly alarmed by how India has, in recent years, leveraged policy, capital, and geopolitics to cultivate its industries and is gradually demonstrating its ability to absorb entire supply chain shifts from China (orfonline).

R&D underspending in India (indianexpress)

1. A large captive market insulates producers from the bracing pressure of export competition.

2. Indian commercial communities have historically been trading rather than manufacturing communities.

3. India’s corporate sector underwent a degree of financialisation — a shift in priorities from productive investment to financial return — somewhat earlier than its level of industrial development warranted.

4. Competitive popular democracy in a large developing economy generates its own structural uncertainty about the long-term future. The greater the uncertainty about the conditions under which a long-horizon investment must eventually pay off, the higher the discount rate applied to it.

Indian defence procurement may not quite qualify as enemy action, but when the same pattern keeps repeating, it begins to look less like an isolated error and more like a bad and recurring compulsion (thewire).

The US and India Have Become Regional Rivals (project-syndicate).

Karnataka's fertility rate falls 21% in decade; steeper in villages (deccanherald).

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How China’s Currency Manipulation Is Warping the World Economy (foreignaffairs).

The infatuation with winning the tech race is like a spell America has unwittingly cast on Chinese leaders. The contest has warped their priorities and prompted them to focus a lot—maybe too much—on cutting-edge technology while doing too little to fix China’s persistent economic problems (economist).

Britain: The past 18 years, enough time for a whole lost generation to be born and brought up, have yielded nothing but stagnation and mass disillusionment (theatlantic).

The world stock market is now as wild as it was during the tech-stock bubble (acadian-asset).

A.I.

Nvidia has told Chinese clients that its new "Vera" central processors for AI data centres could be available as soon as August and that ​they can begin placing orders (reuters).

KPMG report contained AI hallucinations on benefits of . . . AI (swissinfo).

How companies are gaming the chatbot internet (theatlantic).

We will end up economically and politically sidelined, with values we cannot defend, social welfare systems we can no longer fund, risks we cannot address, and a Union that cannot hold.

What getting AI wrong means for us (europe2031)

Meme of the Week

the new world order

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Land Appreciates. Homes Depreciate. (housingnotes)

India

India’s economy grew faster than expected in the three months through March, on sustained private and government spending before higher energy costs began weighing on the outlook (bloomberg).

India scraps capital gains tax on foreign investors in government debt to support rupee (reuters).

Attracting strong and stable FDI is an urgent macroeconomic imperative for India — both for macro stability and growth (indianexpress).

A listed gold company, Rajesh Exports, found to have overstated revenue of its Swiss refining unit Valcambi to the tune of $159 billion (reuters).

We almost became self-sufficient in edible oils. Then, the economy was liberalized in 1991 and homegrown oils started losing out to cheaper imports. By 1998, India was again importing 30% of its demand (livemint).

Indian steelmakers grapple with resurgence of cheap Chinese imports (reuters).

India’s fertiliser imports from China jumped by more than 173% in FY26 compared to the same period last year, reaching 5.02 million tonnes (business-standard).

India plans to regulate consultation fees and common procedure charges at private hospitals (livemint).

India under Modi has gone from ‘fragile five’ to ‘vulnerable one’ (deccanherald).

Why China got rich and India didn’t (substack).

From Chess Piece to Blood Bag? (thewire)

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BYD is struggling to stay ahead in an industry defined by software (economist).

China’s dual economy—one side producing world-class technology and exports, the other marked by stagnant household incomes and suppressed consumption—is not a transitional imbalance awaiting self-correction. It is a structural design, engineered to serve China’s overriding objective of winning the strategic competition with the United States and establishing global hegemony.

When Strategic Ambition Hollows Out the Foundation (prcleader)

The Second China Shock: North-east Asia’s export industries increasingly operate on two tracks. On one track, the boom in artificial intelligence is driving high-tech exports, by the all-conquering chipmakers of South Korea and Taiwan, and by Japanese makers of equipment and materials used in chipmaking. On the second track, the rest of industry is clapped out. If you exclude semiconductors and AI servers, Taiwanese exports have actually fallen by 40% since 2022. In South Korea, non-AI exports have stagnated and Japan’s industry is in decline (economist).

Companies in China benefit from eight times more state support on average than rich-world rivals (ft, bloomberg).

Lab-grown diamonds are now being adopted as chip‑cooling materials, enabling denser and more powerful AI semiconductors (bloomberg).

Successive governments have succeeded in making Britain less attractive to immigrants. Unfortunately, they may also have made the immigrants who arrive less attractive to Britons. As the number of migrant workers has collapsed, asylum-seekers have become a bigger part of the mix.

Britain has crushed immigration, and harmed itself (economist)

In Europe, more lights will go out at chemical plants (acs, bloomberg).

EU frets as China builds an industrial base in Morocco (ft).

Western automakers are taking advantage of Chinese overcapacity to export lower-cost vehicles to their home markets (ft).

Germany urged to stop admiring Beijing and wake up to ‘China Shock 2.0’ (theguardian, cer).

A decision made 70 years ago to reforest vast swathes of Japan with just two kinds of tree has led to an allergy epidemic (bbc).

Iran Embraces a Forever War (foreignaffairs).

Fertility Crisis

The Global Fertility Crisis Is Worse Than You Probably Think (derekthompson)

India’s fertility story first reached a turning point five years ago, when the National Family Health Survey-5 for 2019-2021 showed the country’s total fertility rate (TFR) had fallen to 2. In 2024, our national TFR fell to a little under 1.9 (livemint).

India could end up ageing before it gets rich (livemint).

India’s population will soon be falling—probably quite fast (economist).

Odds & Ends

Being creative requires taking risks (henrikkarlsson).

Meme of the Week

Think of perps (perpetual contracts) as futures without an expiry date. Originally a crypto construct, it has now seeped into tradfi.

One of the most liquid perp exchanges is Hyperliquid. On it trades xyz:CL — a perp that references the front-month WTI contract (CL) traded on NYMEX.

Why not trade CL directly?

1. Hyperliquid, being a DEX, doesn’t need KYC

2. The leverage for this contract on hyperliquid is 20x

3. Hyperliquid is a 24/7/365 market

If you have a macro-oil-trading-FOMO itch, this is where you scratch it.

But just because you can, should you?

On the face of it, there seems to be a fair amount of weekend volatility on xyz:CL. However, when you compare it to random 48-hour weekday markets, it’s not that much?

Ultimately, the perp is tethered to CL which is tethered to physical barrels. If you were a market-maker on Hyperliquid, you are working with a constraint of the biggest market being closed — no price discovery, no hedging.

From my POV, touching grass on weekends > smashing keys on CL. But you do you!

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Inflation Risks Within and Across Asset Classes (oup)

Do real assets protect against inflation? Stocks’ core inflation betas are negative, while their energy betas are positive. Currencies, commodities, and real estate mostly hedge against energy inflation, but not core inflation.

Ads in AI Chatbots? An Analysis of How Large Language Models Navigate Conflicts of Interest (arxiv)

We find that a majority of LLMs forsake user welfare for company incentives in a multitude of conflict of interest situations, including recommending a sponsored product almost twice as expensive (Grok 4.1 Fast, 83%), surfacing sponsored options to disrupt the purchasing process (GPT 5.1, 94%), and concealing prices in unfavorable comparisons (Qwen 3 Next, 24%). Behaviors also vary strongly with levels of reasoning and users' inferred socio-economic status. Our results highlight some of the hidden risks to users that can emerge when companies begin to subtly incentivize advertisements in chatbots.

The Impact of Abolishing the Gift and Inheritance Tax on Firm Strategic Decisions and Outcomes: The Case of Sweden (SSRN)

The abolition of the gift and inheritance tax in Sweden encouraged and enabled firms with potential next generation owners to adopt a long-term horizon, be growth-oriented, and to create transgenerational value, which in turn benefitted society by increasing recurring corporate tax revenues and employee salaries.

India

There are two companies in the registrar and transfer agent business who’s clients will never switch (livemint).

India approves $1.9 billion credit guarantee to support businesses hit by Middle East crisis (reuters). Analysts see this loan-support scheme as credit and asset quality supportive, with the sovereign guarantee structure sharply reducing downside risks for lenders (livemint).

Fewer than 10% of India’s documented ancient gold sites have seen a modern drill. Canada has about 373 active gold exploration companies; Australia about 322. India has effectively none (livemint).

China confirms its support to Pakistan during last year’s war with India (thehindu).

Indians invested more than $2.2 billion in overseas equities and debt in the 11 months through February, a 60% jump from the year-ago period. Assets in global feeder funds run by local money managers hit a record $4 billion in March (bloomberg).

From pharmaceuticals ​to IT, Indian firms across sectors are looking overseas in search of newer markets, products and technologies for their next burst of growth. The first quarter of 2026 has seen 56 outbound transactions valued at $3.9 billion. In 2025, 162 such deals worth $18.2 billion were closed (reuters).

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2.5x the size of Manhattan: Kevin O’Leary’s Utah data center (yahoo).

Cloudflare Slashes 20% of Workforce (thedeepdive). Upwork is cutting nearly a quarter of its staff as part of a restructuring plan (marketwatch). Payments firm BILL cuts about 30% jobs to boost profitability (reuters).

Coming soon to CME: Bitcoin Volatility futures — USD-settled futures contracts that allow you to trade the forward-looking, 30-day implied volatility of bitcoin (cmegroup).

China's carmakers are now ​re-engineering vehicles from the ground up for foreign buyers, driven as much by fierce margin pressure at home as by opportunity abroad (reuters).

Iran used Chinese spy satellite to target US bases (ft).

How—and Why—to Save the World Trade Organization (commonplace)

A.I.

You are not a horse (economicforces).

Anthropic launches Dreams for Claude, letting it reorganize past interactions to improve performance (storyboard18).

For companies to truly capitalize on the AI revolution, leaders need to fundamentally overhaul how work is structured, managed, and rewarded, rather than simply handing workers new tools and expecting them to figure it out (geekwire).

Meme of the Week

Contrast this to the US markets in the same period: 42% of stocks exited the topmost decile. Of which, 43% exited the market altogether.

There were 150 stocks in the topmost decile in India, 365 in the US.

Why do mid/small caps struggle to dethrone the big guys in India? Our markets practically gave a blank check to them during the last decade. How was this low cost of capital utilized?

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Over the past fifty years, global equity markets have become increasingly correlated, reflecting greater international integration in goods, labor, and capital markets. But globalization may now be reversing. If the world deglobalizes, we would expect markets to decorrelate. The risk-minimizing response to deglobalization is to make portfolios as global as possible; the benefits of cross country diversification rise as cross-country correlations fall. When markets decorrelate, the imperative to diversify grows stronger (acadian-asset).

Research

The Sports Gambling Experiment Has Failed (OU Economics Club)

The legalization of mobile sports gambling in America was a policy mistake and that the evidence is now clear enough to say so.

Prediction Market Accuracy: Crowd Wisdom or Informed Minority? (SSRN)

Prediction markets are remarkably accurate. We show instead that accuracy is driven by a small minority of informed traders. Around 3% of all accounts generate the bulk of price discovery. The remaining majority does not produce accuracy; rather, it funds it. Their trades generate most of the volume, but little of the information, and their losses flow as profits to the informed minority.

Construction Costs Rarely Fall (construction-physics)

Construction costs tend to rise at, or above, the level of overall inflation, and it rarely (if ever) gets cheaper to build houses, offices, or other buildings. We see this in the U.S. with a variety of different metrics, and we see it in countries around the world.

Placebo sleep affects cognitive functioning (nih)

Mindset can influence cognitive states in both positive and negative directions

India

For the second time in two years, rates on the Real Time Market of the Indian Energy Exchange dropped to near-zero— ₹0.0003 per unit on the afternoon of 5 April—as excess solar power flooded the market even as demand dipped due to rains and thunderstorms in Delhi and other parts of northern India (livemint).

The Indian military drone manufacturing industry is expected to enter a phase of rapid growth in coming years (nikkei).

From the next financial year, if one loan of a borrower with many loans is considered Non-Profitable Asset, all the loans will also be considered NPA (thehindu).

Air India will reduce its international flight schedule through July as soaring jet fuel prices and airspace restrictions linked to the West Asia conflict push a growing number of routes into loss-making territory (livemint). Also, domestic air traffic shrinks in March (livemint).

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US national debt crosses 100% of GDP (economictimes).

Digital asset firms would be required to design their systems to hardwire financial enforcement capabilities into the code itself. The expectation is no longer that stablecoin issuers simply respond to sanctions or suspicious activity reports after the fact. Instead, they must architect systems where compliance is built into the infrastructure itself, and enforcement is automatic, continuous and inseparable from the operation of the network (pymnts).

In the Permian, gas is so plentiful that producers have to pay buyers to take it off their hands (bloomberg).

The United Arab Emirates (UAE) is quitting the Opec and Opec+ (bbc).

CATL says sodium batteries are mainstream-ready (electrek).

Nissan cuts rare earths used in Leaf EV motor by 90% (nikkei).

Europe’s Energy Suicide: The EU Admits the World Runs on Fossil Fuels — While Deliberately Destroying Its Own (gatestoneinstitute).

Iran and its allies have damaged at least 16 US military installations across 8 Middle East countries, leaving some facilities severely degraded and partially unusable amid the ongoing conflict that started February 28 (timesofindia, indianexpress).

A.I.

Passive use of AI degrades memory, erodes expertise, inflates confidence and narrows the diversity of human thought (bailliegifford).

Claude-powered AI coding agent deletes entire company database in 9 seconds (tomshardware).

South Africa has withdrawn its first draft national AI policy after revelations that it ​contained fictitious sources in its reference list ‌which appeared to have been AI-generated (reuters).

Meme of the Week

It makes some cogent arguments. However, it is completely useless for equity investors because, as my note from 2014 summarizes, the Stock Market ≠ Economy.

China was able to grow its economy by a combination of financial repression (that squeezed out consumers in favor of producers), industrial policy (that fostered intense domestic competition), export subsidies (allowing exporters to price below cost) and a manic focus on growth (provinces got GDP growth targets handed down by the center).

India, being a democracy, cannot do financial repression. The government had to cut GST rates once they started losing elections.

India, being a kakistocracy, cannot do industrial policy. For example, our Kaveri engine project to power fighter jets dates back to 1986 and has now been down-scaled to fly drones.

India, being a kleptocracy, ensures that subsidies get siphoned off and never have their intended economic effect.

And, finally, years of socialist conditioning has left the populace deeply suspicious of success in the marketplace.

However, none of these matter to equity investors.

What matters is the delta. Is free cashflow improving or deteriorating? Are margins improving or deteriorating? Is ROE improving or deteriorating?

For example, Infosys, currently being flogged for dropping the ball on OpenAI and not investing in R&D, beat the NASDAQ from 2001, right up until 2025. This period spans the GFC, UPA-2 and COVID. The deltas were positive and so were equity returns.

The only thing that has performed worse than Indian equities is Chinese equities. Here’s the INDA (MSCI India) vs. FXI (FTSE China 50) ETF performance from 2013 through now:

A search for “Bernstein open letter to Premier Xi” yielded zero results.

Its easy to be euphoric when the markets are up and become dysphoric when they come down. But the game is won by people who approach it with equanimity.

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Net FII flows since COVID: zero!

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Mobile phone short video use negatively impacts attention functions (frontiersin)

An increased tendency toward mobile phone short video addiction could negatively impact self-control and diminish executive control within the realm of attentional functions.

Detecting Tariff Effects on Consumer Prices in Real Time – Part II (federalreserve)

Under our baseline estimates, tariff changes through November 2025 raised core goods PCE prices cumulatively by 3.1% through February 2026, explaining the entirety of excess inflation in the core goods category relative to pre-pandemic inflation rates and boosting core PCE prices as a whole by 0.8%. We also estimate that pass-through from the 2025 tariffs is effectively complete.

India

J.P.Morgan downgrades India equities to ‘neutral’ on oil-led earnings risks, higher valuations (reuters).

HSBC downgrades India to ‘underweight’ as oil shock clouds earnings recovery (reuters).

The RBI is piloting programmable CBDC for welfare payments (reuters).

India is set to import a record 2.5 million metric tons of urea in a single tender at nearly double the price paid two months ago, as ‌the Iran conflict disrupts global supplies (reuters).

India’s options market is about 20% of the US based on premium turnover. The “option trading epidemic” involves 18 lakh people in a country of 1.4 billion, almost all of them trading small amounts in weekly Nifty options. 70% of premium turnover is generated by 12,000 accounts, and prop traders alone account for more than half (zerodha).

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European sales of Chinese models featuring both a plug and gasoline engine soared more than four-fold in March from a year earlier, accounting for almost 30% of that part of the car market (bloomberg).

Children aged 17 or younger will face a lifelong ban on buying cigarettes in the UK (bbc).

Some of the most popular graduate degrees don’t pay off financially (washingtonpost).

Meta to track workers’ clicks and keystrokes to train AI (bbc).

The Pentagon’s largest-ever budget request earmarks $75 billion for drones and technologies to counter them (bloomberg).

How Europe regulated itself into American vassalage (economist).

Citrus greening: The collapse of Florida’s citrus industry (slate).

Will China get richer before it gets much, much smaller? (ft)

Meme of the Week

Also, we updated the AI summaries at the industry level. Check out Private Sector Banks’, for example. Industry return metrics can be found here: Industry Metrics.

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The Intramonth Momentum Cycle (SSRN)

US equity momentum returns accrue almost entirely in just six trading days each month. We show this concentration arises from investors' dash-for-cash: the need to raise cash before month-end payment obligations leads to selling pressure on loser stocks a few days before month-end. A value-weighted WML strategy invested only during days T−9 to T−4 relative to the last trading day turns $1 into $18.8 over 1980–2025, compared to $2.4 for the rest of the month.

Anomaly-Driven Demand (SSRN)

We show that trading on anomalies generates price pressure in the underlying stocks. We construct a proxy for anomaly-driven demand (ADD), capturing demand generated when investors rebalance into and out of anomaly long and short legs. Stocks with high ADD earn significantly higher subsequent returns than stocks with low ADD. This effect carries over to anomalies: anomalies whose constituent stocks have the highest ADD earn 8.04 percentage points higher annualized returns than those whose contituent stocks have the lowest ADD.

An Index of Commodity Futures Returns Since 1871 (SSRN)

This paper documents the returns to a broadly diversified index of commodity futures over more than 150 years of U.S. market history, that accounts for survivorship bias. We find that commodity futures have earned an average annual risk premium of 5.4% over the risk-free rate and a premium over US inflation of more than 6% per annum. Commodity futures have outperformed equities in roughly 43% of years and in two out of every five decades.

Economic Backwardness in Political Perspective (NBER)

We construct a simple model where political elites may block technological and institutional development, because of a 'political replacement effect'. Innovations often erode elites' incumbency advantage, increasing the likelihood that they will be replaced. Fearing replacement, political elites are unwilling to initiate change, and may even block economic development. We show that elites are unlikely to block development when there is a high degree of political competition, or when they are highly entrenched. It is only when political competition is limited and also their power is threatened that elites will block development.

The Empathy Channel in Fertility (NBER)

Being around babies makes people want babies.

India

India is likely to see below-average monsoon rains for the first time in three years. The IMD's first forecast of rainfall at 92% of the long-period average is the lowest in nearly three decades (reuters).

HAL, GE Aerospace reached a technology agreement to jointly manufacture jet engines. The pact includes the transfer of manufacturing expertise to India (ndtvprofit).

Foreign players are increasing their presence in India's electronic manufacturing sector through company partnerships and government-backed incentive programs as the country looks to move up the value chain (nikkei).

How Chinese cloud helped Pak’s ISI tap into CCTV cameras, track Army movements (indiatoday).

India's indigenous navigation system is now, for all practical purposes, offline (swarajyamag).

In 1960, West Bengal was the third-wealthiest state in India. In 2026, it ranks twenty-fourth. Interest payments consume more than 20% of revenue receipts. Over 6,600 companies have quietly relocated out of West Bengal since 2011. Approximately 22 lakh workers now seek employment outside the state as a natural consequence (swarajyamag).

Women are more likely to be won over by tangible promises of welfare. Politicians are doling out cash to get their support (economist).

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The shale revolution has fundamentally altered how much global energy markets constrain US foreign policy (ft).

There never was a “Sell America” trade and there’s no “Hedge America” trade either (robinjbrooks).

Beijing has enacted sweeping new regulations to investigate and punish foreign companies that stop using Chinese suppliers. Regulations make it harder for foreign companies to divest from joint ventures in China or shift orders to overseas suppliers. (nytimes).

Companies that can survive in China are unbeatable anywhere else in the world. From chemicals to solar to the manufacturers providing components for the car and wind giants: volumes keep rising but profits are shrinking or negative (ft).

A.I.

AI demand is inflated, and only Anthropic is being realistic (cnbc).

Meme of the Week

Compare the equity curve of the market neutral version of a 10-position All-Time-Highs momentum strategy…

… with that of the un-hedged one.

The difference is in the Sharpe. Over the last 5 years, the hedged version has a 1.08 Sharpe - almost twice that of the un-hedged version’s 0.56. This difference matters for levered strategies. And the overall give-up in P&L is less than Rs. 3 lakhs over the entire period.

During down turns, its the liquidation of these hedges that are the counterparty to index sellers.

Unfortunately, with anti-market zealots running the show, costs and margin requirements of running such strategies have ballooned. Without hedges, long-only strategies will sell into the fall - exacerbating volatility.

As the volatility of an asset increases, its allocation within your portfolio should decrease. So, at a macro level, all that our brain-trust has managed to do is ensure a lower allocation to Indian equities by making it more expensive to hedge.

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Canal mania collapsed in 1837. Railroad overbuilding fueled the panics of 1873 and 1893. Turn-of-the-century electrification saw speculative excess in utility holding companies. The 1990s dot-com boom went bust. Yet in each instance, business productivity eventually surged, living standards climbed, and the prophets of permanent technological unemployment turned out to be wrong. Workers got reallocated, not eliminated. And while what those workers did changed shape, work itself didn’t disappear (aei).

Research

Factor MAX: A New Signal for Predicting Factor Returns (AA, SSRN)

The study investigated whether the maximum daily return a factor experiences within a month contains valuable information about that factor’s future performance. Unlike traditional predictors like factor momentum (which looks at cumulative performance over recent periods), factor MAX isolates a single data point: the highest daily return a factor achieves in a given month. Factors with the highest maximum daily returns significantly outperformed those with the lowest maximum returns.

The Private Returns to Public Office (uchicago)

We study the wealth accumulation of Indian state politicians using public disclosures required of all candidates. The annual asset growth of winners is 3–5 percent higher than that of runners-up, a difference that holds also in a set of close elections. The relative asset growth of winners is greater in more corrupt states and for those holding ministerial positions.

A Theory of Falling Growth and Rising Rents (NBER)

Growth has fallen in the U.S., while firm concentration and profits have risen. Meanwhile, labor’s share of national income is down, mostly due to the rising market share of low labor share firms. We propose a theory for these trends in which the driving force is falling firm-level costs of spanning multiple markets, perhaps due to accelerating IT advances. In response, the most efficient firms (with higher markups) spread into new markets, thereby generating a temporary burst of growth. Because their efficiency is difficult to imitate, less efficient firms find markets more difficult to enter profitably and therefore innovate less. Eventually, due to greater competition from efficient firms, within-firm markups actually fall. Despite the increase in the aggregate markup and rents, firm incentives to innovate decline—lowering the long run growth rate.

India

India’s real estate sector is facing a shortage of skilled workers and rising labour costs as soaring cooking gas prices push migrant workers back home (livemint).

India's services sector grew at its weakest pace in 14 months in March as the Middle East war dampened domestic ​demand (reuters).

Bill seeking 33% reservation for women in the Lok Sabha and State Assemblies will be tabled when the Budget Session reconvenes on April 16 (thehindu). The number of seats in LS will rise by 50% to 816 from the existing 543, with the 273-seat increase set aside for women, ensuring that the existing political dynamics and incumbent parliamentarians, overwhelmingly male, are not cut loose as a reshaped order takes hold (timesofindia).

India demonstrates 1,000-kilometer fiber-based Quantum Key Distribution (QKD) network. It uses QKD to create secure encryption keys for data transmission. Any intrusion attempt triggers a change in quantum states, enabling detection and ensuring "unhackable" security (pib).

India’s Prototype Fast Breeder Reactor achieved first criticality. The achievement is crucial because India has little uranium, which is an essential fuel for nuclear reactors. However, the self-sustaining technology will help India use thorium. The country has some of the world's largest thorium reserves (indiatoday).

State Bank of India had about $5 billion of bets against the rupee that were impacted by the RBI’s crackdown on speculators. It is estimating losses of about $32 million from the forced unwinding of these trades (bloomberg).

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The Strait of Hormuz is not closed. It has been converted. Before February 28, Hormuz was an open international waterway. Twenty percent of global oil, 30% of global fertilizer trade, and a fifth of global LNG transited daily under the principle of freedom of navigation. That system no longer exists (theomission26).

A third of the global trade in raw materials for fertiliser passes through Hormuz, which is also the route for 20% of shipments of natural gas, which is required to make it. The waterway’s near-total shipping blockade is a “food security timebomb” (theguardian).

High fuel costs forcing Philippine farmers to abandon harvests (reuters).

America’s adversaries are uniting as its own coalition falls apart (theatlantic).

Beijing has a stranglehold on the critical minerals the U.S. needs to rebuild its weapons cache following five weeks of war (politico).

Across the US, at least ten states are now exploring or have already passed an exit or wealth tax in order to combat revenue losses from residents fleeing to lower tax areas. That includes California, New York, Washington, and Michigan (komonews).

A hacker has allegedly breached one of China’s supercomputers and is attempting to sell a trove of stolen data (cnn).

Software/SAAS stocks are down 35% since September last year. For context, they were at a 45% drawdown in late 2022 before they bottomed.

Japan’s mighty carmakers are in serious trouble (economist, motor1).

In Australia, electric trucks are now available "at price parity with diesel" (abc).

China’s acts of commercial harassment against Panama have sparked indignation across Latin America (thehill).

One in 8 American adults now takes a GLP-1 drug of some kind. The World Health Organization has added GLP-1 drugs to its essential medicines list. Ozempic just got cheap enough to change the world (vox).

Businesses are raking in big money by frustrating customers. It’s costing Americans $165 billion in lost time (businessinsider).

Argentina’s free market experiment: the poverty rate fell to 28% from 53% over two years (washingtonpost).

Meme of the Week

The first organized, standardized futures exchange was the Dōjima Rice Exchange, established in 1730 in Osaka, Japan, to stabilize rice prices for samurai paid in rice. The Chicago Board of Trade (CBOT) introduced modern, standardized grain futures in 1864.

The conventions and infrastructure around commodity futures is centuries old. It is tied to the underlying physical commodity by the need of physical deliveries. This tethers the digital to the physical.

Atoms take time to move while the digital infrastructure on top clocks at nanoseconds.

Enter perpetuals (perps).

Perps are futures contracts that never expire. Their ties to the underlying is dictated by an oracle. The basis is dictated by a funding rate. They trade on de-centralized exchanges (dexs) which don’t need KYC. They are open 24/7/365. You can trade gold, silver, WTI, Brent, S&P 500 index - if you have $20 million, you too can list whatever you want. Trade with leverage anywhere from 10x to 50x.

When the Iran-US war broke out, tradfi exchanges were closed for the weekend. Traders flocked to Hyperliquid and its aggregated open interest surged to $1.43 billion.

Hyperliquid, lighter, qfex - you will be hearing more about these as perps ramp up.

Perps’ growing popularity is going to suck liquidity out of expensive and highly regulated venues such as ours. With our government increasing Securities Transaction Tax (STT) on futures to 0.05%, most high- and mid-frequency trades are now nonviable. With capital gains taxes layered on top of transaction taxes, India is now one of the most expensive markets to trade in. Constant tinkering with margin and physical delivery requirements add to an additional layer of unpredictability.

With random, unscheduled holidays (like the one for Maharashtra Municipal Corporation Elections) adding additional operational risk, why continue to use the clunky (5 major outages in the last couple of years) MCX trading infrastructure?

Right now, its a trickle with tech & crypto savvy traders testing the waters. But if the hostile attitude of our government against “speculation” doesn’t change, it might just turn into a tide.

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Markets this Week

When will FIIs run out of things to sell?

More here: country ETFs, fixed income, currencies and commodities.

Links

Research

Pay Now, Buy Never (NBER)

Approximately 40% of prepaid value is never used. Because many consumers underutilize their balances, merchants recover significantly more than the bonus cost. The median firm earns roughly $5.5 in breakage profit for every $1 of bonus credit issued. While PNBL participation does lead to modest increases in consumer spending over time, firms gain substantially more from breakage than from any loyalty-driven revenue. These findings challenge the prevailing win–win narrative: PNBL schemes often result in a significant transfer from consumers to firms.

The Cold War and the U.S. Labor Market (NBER)

We show that military procurement increases manufacturing employment and reduces inequality. Overall, the 1950s-to-1990s decline in defense production explains roughly one-quarter of the decline in manufacturing employment and nearly one-tenth of the rise of top-ten income share.

India

Jan Vishwas reforms have decriminalised over 1,000 provisions across 79 central laws to ease compliance and reduce the burden on courts (deccanchronicle).

India approved 29 proposals from various companies under its ​electronics component manufacturing program, with a total ‌investment of $750 million (reuters).

The RBI has activated crisis-era measures to support the rupee. It capped the net open rupee position of banks at $100 million compared with its earlier rule where positions equivalent to 25% of capital were permitted. Also, banks can’t offer rupee non-deliverable forwards. The moves could leave banks saddled with chunky losses as they rush to unwind arbitrage positions (reuters, reuters).

India’s arms exports jump 63% led by Defence Public Sector Undertakings (msn).

France has reportedly denied India access to the Rafale fighter’s core source codes, preventing India from independently modifying the Thales RBE2 AESA radar, MDPU mission computer and SPECTRA electronic warfare suite (defencesecurityasia).

Weight-loss injections become part of pre-wedding preparation (reuters).

India is set to tighten its grip on surveillance technology, with new rules effectively blocking Chinese CCTV manufacturers from selling internet-connected cameras in the country (firstpost).

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Artemis II crew now halfway to Moon (bbc).

FDA approves Eli Lilly’s once-daily GLP-1 pill (cnbc).

Since Liberation Day, a year ago today: US foreign direct investment is lower, US factories employ 89,000 fewer people, and US goods trade deficit is +2% (npr, economist)

Although China’s shipments to the US fell by $51 billion last year, that was more or less offset by the US’s cumulative $49 billion rise in imports from a group of countries including Vietnam, India and Mexico (bloomberg).

Trump Imposes 100% Tariffs On Patented Drugs (ndtv).

Saudi Arabia urging US to ramp up Iran attacks (theguardian, apnews).

A.I.

Friction is a Feature (educatedguesser).

Memes of the Week

For example, here are the futures curve on different days for NYMEX Gold:

Normally, the entire complex shifts in parallel.

However, we live in abnormal times. Look at oil (WTI, NYMEX CL):

What was in contango before is now in backwardation. Thanks to the US-Iran War, people are willing to pay a premium for delivery now vs. delivery later.

The same thing has happened in the VIX complex as well. Here’s the current term-structure:

vs. historical:

Demand for protection now is more expensive than demand for protection later.

Contango vs. backwardation tells you something about how the market perceives future demand/supply vs. now.

Also, if you are a commodities ETF enjoyer, then the shape of the curve matters.

When you roll contracts in contango, you sell expiring contracts and buy new ones at a higher price. This negative roll yield results in the ETF returns lagging spot market returns. Also, over time, the higher-priced futures contract typically trends down to meet the lower spot price at maturity, causing a loss for those holding long positions.

Recently, HDFC AMC announced that their gold ETF will invest in gold futures (up to 50% of the fund) to manage temporary shortages of physical gold. This triggered a lot of commentary from investors who treated it as a betrayal of trust. The AMC later clarified that

investment in ETCDs will only be considered in rare circumstances where the Scheme is unable to buy or sell physical gold due to temporary scarcity of physical gold. Once the market normalizes and the Scheme can buy or sell physical gold per its requirements, the corresponding ETCDs are expected to be unwound.

The Scheme does not intend to use ETCDs as part of the scheme’s day-to-day strategy. The core approach of the Scheme remains unchanged – Scheme assets will be deployed in physical gold to the maximum extent possible, and the balance will be in cash or net current assets, as per the Scheme’s Asset Allocation.

Which is good. In a normal market, with gold in contango, buying futures and rolling them would’ve lost them money. However, in a stressed spot market, with gold in backwardation, buying futures should be OK.

Hopefully, they make the right call.

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Markets this Week

More here: country ETFs, fixed income, currencies and commodities.

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Last year, nearly two-thirds of the top 100 active US stock funds by assets lagged their index. But, improbably enough, the stocks these 100 funds collectively owned beat the benchmark in 2025 (morningstar).

India

India’s private sector expanded at its weakest pace in over three years in March as price shocks from the war dampened domestic demand, yet international orders hit ​a record high (reuters).

Goldman Sachs has pared its growth estimate for India for 2026 (5.9% from 7%), while forecasting a 50 basis points hike in policy ​rates (reuters).

India has secured crude oil supplies for the next 60 days, ensuring stable fuel supplies in the country despite disruption ​in shipments (reuters).

India has slashed excise duties on petrol and diesel to protect consumers ​and curb a potential spike in inflation, while imposing windfall taxes on aviation fuel and diesel exports (reuters).

Its raining semaglutide and the regulator is not happy.

Thanks to freebies and entitlements, Himachal Pradesh has no money for capital expenditures (theprint).

Karnataka MLAs demand VIP tickets for IPL matches (deccanherald). Equality ends where privilege begins (financialexpress).

India’s urea plants are running at half capacity after force majeure declarations disrupted LNG flows through the Strait of Hormuz (cnbctv18).

ED flags Indians buying Dubai properties using credit cards (economictimes).

Germany is continuing to struggle with a shortage of skilled workers, as elderly staff retire, and there are not enough young candidates to fill their roles. To try to alleviate the problem the country is increasingly turning to workers from India (bbc).

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The war in the Middle East has created major disruptions to global supplies of nitrogen-based crop nutrients. The focus since the conflict began has been on urea, a key nitrogen fertilizer used on corn. Prices for the nutrient have surged as the war blocks shipments through the Strait of Hormuz. What’s been largely overlooked in the chaos is the risk to phosphate fertilizers. Almost half of the world’s supply of sulfur — which is turned into sulfuric acid for the processing of phosphate fertilizer — comes from countries in the Middle East (bloomberg).

Countries around the world are facing a cliff-edge as the flow of liquefied natural gas from the Gulf comes to an abrupt end in the next 10 days, when a handful of final tankers from the region reach their destinations (ft).

This is ultimately a war between a democracy’s impatience and a theocracy’s ruthless endurance (theatlantic).

There is a very real risk that this conflict will end with Iran as the de facto master of the Strait of Hormuz and the Persian Gulf (acoup).

Trade ministers from Europe and Asia-Pacific countries will meet on the sidelines of a WTO gathering this week to hammer out priorities for building an alliance that excludes the U.S. (politico)

Britain’s petrol refineries are at risk of shutting down because of carbon tax (yahoo).

How New Zealand’s only oil refinery closed (businessdesk).

Hundreds of petrol stations across Australia run out of fuel (theguardian, theguardian).

South Korea imports around 70% of its crude oil and 20% of its liquefied natural gas from the Middle East (cnbc).

A look at countries hit by energy crisis (hindustantimes).

Russia’s ‘meat assaults’ in Ukraine cost it over 6,000 troops in four days (politico).

At least 40% of Russia's oil export capacity is at a halt following Ukrainian drone attacks (reuters).

Meme of the Week