Catching up with the news cycle

1. The British government has done a fiscal policy U-Turn, but yields are back up again.  I am not suggesting those market prices are the final verdict, but I do take that as a sign that the issue all along has been a) the competence of the government and its decision-making procedures, and b) general difficulties facing the UK, and not the absolute size of the fiscal policy changes under consideration.

2. The U.S. semiconductor chip controls on China are quite significant.  Like price controls on Russian gas, they will either raise or lower the probability of war, and thus I find them difficult to evaluate.  That does not mean we should do nothing, but it does mean I don’t have a very strong judgment.  It might accelerate Chinese self-sufficiency in chip development, or perhaps accelerate an attempt to seize TSMC in Taiwan.  Or it might simply cripple a major geopolitical rival.  How good are the models and the empirics that we use to evaluate such situations?  Not very good.

3. I’ve long considered Sunflowers a much overrated van Gogh painting.  There were even longstanding debates over whether one version of it (not the version that was just attacked by eco-terrorists) was a fake, a sign that it actually isn’t the artist’s most subtle work.  It seems it was a fake, but it took people a long time to figure this out.  His portraits or sketches of shoes are often much better.

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