No Sunk Costs

China's Financial and Fiscal Decay China’s financial and fiscal systems are increasingly inefficient tools to maintain domestic economic growth, making China’s economy far more dependent upon exports in 2026 than in previous years.

Full piece here

rhg.com/research/chi...

The Chinese Personal Income Tax Rate is a one-way bet

bsky.app/profile/nosu...

I coined this term 5 years ago when Chinese real estate market started collapsing -- that China was entering its "Just Another EM" era: it now faced tradeoffs between rising taxes and economic growth

Rhodium agrees

x.com/nosunkcosts/...

Great @rhg.com piece on the Fiscal Revenue challenges facing China

- Fiscal revenue grew less than 1% last year after declining in 2024
- The total Deficit is ~10% of GDP vs. NGDP growth of ~4%
- The largest increase in deficits over the last few years has been due to collapsing Land Sales

China Internet Index is at its Liberation Day Lows

The total collapse is somewhat astonishing in both absolute and relative terms -- every other broad Chinese index is up ~18 to 35%

EM ex China is up 58%

China is the anti-AI trade apparently

BofA saying payroll growth accelerating

How to lose money in megacaps

Snookering an “ally” into an unnecessary offensive war is probably not the way to regain public opinion

Translated: “We are going to buy them out of Ch. 11”

bsky.app/profile/carl...

Jettisoning perhaps his only non-psychopathic instinct from his first term — getting into actual fights is harder than talking shit — is going to be an interesting experiment for him

Dubai is the real-life Mos Eisley Cantina

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It has been a bleak year, but there is joy to be found in the world -- for example, the whole internet has come together in delirious schadenfreude at the fate of Dubai

‘Marty Supreme’ Is the Moment, With Josh Safdie! Sean and Amanda dream big on today’s show because they’re breaking down one of their most anticipated movies of the year with Josh Safdie’s ‘Marty Supreme,’ starring Timothée Chalamet. They make the…

Also filmmakers need to stop explaining their movies on podcasts - be like Kubrick, create and then disappear. The ambiguity of the ending was one of its stronger features but apparently he’s just a #girldad

pca.st/episode/4373...

I did like the subversion of the traditional sports drama so that by the end you’re actually rooting *against* the supposed protagonist

I admired the filmmaking and it’s undeniably an enjoyable experience, but I think all of Safdie’s stuff is heavily internet influenced — it’s a collection of long form short form videos with characters’ “realism” so heightened that it’s assuringly unrealistic

EU banking sector trades at 1.3x P/B

It hasn't traded below 1x since mid 2025

They are ~12% below US banks

Margins are too high, too many players are making excess returns

Surprising that more Fintechs aren't trying to go after every European bank revenue stream

For anyone who has followed European & Italian banking, this is just such an incredible outcome -- I think 5 years ago 0 people would have predicted that Monte dei Paschi would be absurdly profitable and swimming in excess capital

Makes me think European banking is too profitable right now

I think a SpaceX IPO and index inclusion at the stated valuation will do permanent damage to the reputation of indexing and passive investing generally

bsky.app/profile/cono...

Quite the divergence between different Chinese equity indices

It’s heartening to see a company demonstrate principles — and stick by them in the face of threats.

www.anthropic.com/news/stateme...

Disengagement: if you don’t do it, you’re what’s for dinner

bsky.app/profile/raph...

$NFLX going to buy them out of Ch. 11

China has had zero EPS growth over the last decade -- compare to India and the US, which have both increased >100%

Every year, people hope for EPS growth, and by year-end, their hopes are dashed

(ht @volgajam.bsky.social for the correction)

Time to find out

Update - it was, in fact, over

So the implication is that OAI and Gemini have already agreed to demands that Anthropic thinks cross its red lines?