‘How difficult can it be to tick the right box on your tax return sir?’
Nvidia blasts off into AI superstardom
Technology giant Nvidia reports its sales have hit a record after more than doubling as demand for its artificial intelligence (AI) chips take off!
It figures
The company says revenue jumped to above $13.5bn (£10.6bn) for the three months to the end of June. Nvidia also expects sales to perform very well in the current quarter and plans to buy back $25bn of its stock. The firm’s shares rose by more than 6.5% in extended trading in New York, adding to their huge gains this year. Nvidia also said it expects revenue of around $16bn for the three months to the end of September 2023.
That is substantially higher than Wall Street expected and would equate to a rise of around 170%, compared to the same time last year.
Even before 23rd August’s figures, Nvidia’s stock price had more than tripled for the year, making it the top performer in the S&P 500. It’s share price jumped to around $500 after hours, a level that would mark a record if it closes there on 24th August 2023. Its prior closing high was $474.94 on 18th July 2023.
‘A new computing era has begun’, Nvidia’s chief executive, Jensen Huang, said in a statement. ‘Companies worldwide are transitioning from general-purpose to accelerated computing and generative AI’, he reportedly added.
Strong performance
The strong performance was driven by Nvidia’s data centre business, which includes AI chips.
Revenue for that unit came in at more $10.3bn, a rise of more than 170% from year ago, as cloud computing service providers and large consumer internet companies snapped up its next-generation processors.
This year, Nvidia’s stock market value has jumped to more than $1 trillion as its shares more than tripled in value, mking it the fifth publicly traded U.S. company to join the so-called ‘Trillion dollar club’, along with Apple, Amazon, Alphabet and Microsoft.
AI ‘mania’ helps Nvidia
Nvidia have been making micro chips for a long time and it’s only really been in the last couple of years that the market has caught on.
Nvidia was originally known for making the type of computer chips that process graphics, particularly for computer games. They have been making chips for a long time and have now become the leader in AI chip design and manufacture.
Now Nvidia’s hardware is the foundation for most AI applications, with one report suggesting it had cornered 95% of the market for machine learning.
ChatGPT which generates human-like responses to user queries within seconds was trained using 10,000 of Nvidia’s graphics processing units clustered together in a supercomputer belonging to Microsoft.
AI products are expected to dramatically change how we use computers and the role they play in our lives.
Science fiction becomes science fact for India
Inspirational achievement, as India becomes only the fourth country in the world to successfully land on the moon and the first at the south pole
India became a new national superpower in space on 23rd August 2023, landing its Chandrayaan-3 mission safely on the moon’s unexplored south pole. The Chandrayaan-3 spacecraft launched last month and touch downed on the lunar surface around 13:34 GMT.
The Chandrayaan-3 spacecraft launched last month and touch downed on the lunar surface around 13:34 GMT. The feat makes India the fourth country, after Russia, the U.S. and China – to land on the moon, and the first to land on one of the moon’s lunar poles.
South pole is the place to explore
The lunar south pole has emerged as a place of recent exploration interest thanks to recent discoveries about traces of water ice on the moon. India previously attempted a lunar south pole landing in September 2019, but a software failure caused the Chandrayaan-2 mission to crash into the surface.
The south pole is the place to be right now as it is such a very interesting, historical, scientific and geologic area that a lot of countries are trying to get at that can serve as a base for future exploration.
The discovery of water on the south pole of the moon is important for future exploration, as it could serve as a source of fuel for rockets and spacecraft.
Days prior to Chandrayaan-3′s scheduled landing, Russia attempted to land its first spacecraft on the moon in almost 50 years. But the Luna-25 mission crashed into the lunar surface on Saturday, with Russian space agency Roscosmos confirming the spacecraft spun out of control.
To infinity and beyond
During a June visit from India’s Prime Minister Narendra Modi, he signed agreements alongside President Joe Biden to join the Artemis Accords and further collaborate on missions between Indian Space Research Organisation – ISRO and NASA. Next year, the space agencies are expected to work together to fly Indian astronauts to the International Space Station.
India has also done more with less than its top global counterparts, with ISRO’s annual budget a fraction of NASA’s. In 2020, ISRO estimated the Chandrayaan-3 mission would cost about $75 million. The Covid pandemic delayed the Chandrayaan-3 mission from launching in 2021.
The lander – called Vikram after Indian Space Research Organisation (ISRO) founder Vikram Sarabhai – carries within its belly the 26kg rover named Pragyaan, the Sanskrit word for wisdom.
One of the mission’s major goals is to hunt for water-based ice, which scientists say could support human habitation on the Moon in future and allow for easier future space exploration.
ChatGPT shows left-wing bias according to UK researchers
AI Chatbot ChatGPT reportedly has a political bias
ChatGPT, the popular artificial intelligence chatbot, shows a significant and systemic left-wing bias, UK researchers have found. According to the new study by the University of East Anglia, this includes favouring the Labour Party and President Joe Biden’s Democrats in the U.S.
Concerns about an inbuilt political bias in ChatGPT have been raised before, notably by SpaceX and Tesla tycoon Elon Musk, but the academics said their work was the first large-scale study to find proof of any favouritism.
Lead author o the report reportedly warned that given the increasing use of OpenAI’s platform by the public, the findings could have implications for upcoming elections on both sides of the Atlantic. Any bias in a platform like this is a concern’, he said. If the bias were to the right, we should be equally concerned.
Sometimes people forget these AI models are just machines. They provide very believable, digested summaries of what you are asking, even if they’re completely wrong. And if you ask it ‘are you neutral’, it says ‘oh I am!’ Just as the media, the internet, and social media can influence the public, this could be very harmful. I have personally witnessed incorrect responses from ChatGPT where the AI ‘system’ 100% believed ‘it’ was correct and would not engage in a debate as ‘it’ was right!
How was ChatGPT tested for bias?
The chatbot, which generates responses to prompts typed in by the user, was asked to impersonate people from across the political spectrum while answering dozens of ideological questions. These questions ranged from radical to neutral, with each ‘individual’ asked whether they agreed, strongly agreed, disagreed, or strongly disagreed with a given statement.
Its replies were compared to the default answers it gave to the same set of queries, allowing the researchers to compare how much they were associated with a particular political stance.
Each of the more than 60 questions was asked 100 times to allow for the potential randomness of the AI, and these multiple responses were analysed further for signs of bias.
Dr Motoki described it as a way of trying to simulate a survey of a real human population, whose answers may also differ depending on when they’re asked.
Bias was descovered in the Chatbot repsonses.
A brief history of ARM
Brief ARM history
Arm is a British semiconductor and software design company that is known for its Arm processors, which are widely used in smartphones, tablets, laptops, and other devices. Arm was founded in 1990 as a joint venture between Acorn Computers, Apple Computer, and VLSI Technology. The company was originally called Advanced RISC Machines, but later changed its name to Arm Ltd in 1998.
In 1985, the first Arm silicon chip was created by Acorn engineers Sophie Wilson and Steve Furber, who designed a 32-bit processor with a simple and elegant instruction set.
In 1990, Arm was spun off from Acorn as a separate company, with Apple as a major investor. Arm’s first product was the ARM6 processor, which was used in Apple’s Newton personal digital assistant.
In 1993, Arm introduced the ARM7 processor, which became one of the most successful embedded processors in history. It was used in devices such as the Nokia 6110 mobile phone, the Nintendo Game Boy Advance, and the Lego Mindstorms robotics kit.
In 1994, Arm launched the ARM9 processor family, which offered higher performance and lower power consumption than previous generations. The ARM9 was used in devices such as the Sony PlayStation Portable, the Palm Treo smartphone, and the Amazon Kindle e-reader.
In 1997, Arm introduced the ARM10 processor family, which featured a superscalar architecture and a floating-point unit. The ARM10 was used in devices such as the Apple iPod, the Samsung Galaxy S smartphone, and the Raspberry Pi computer.
In 1998, Arm changed its name from Advanced RISC Machines to Arm Ltd, reflecting its global expansion and recognition.
In 1999, Arm launched the ARM11 processor family, which featured a vector floating-point unit and a TrustZone security extension. The ARM11 was used in devices such as the iPhone 3G, the Nintendo DS, and the Raspberry Pi Zero.
In 2000, Arm became a public company, listing on the London Stock Exchange and the Nasdaq. The company raised £213 million in its initial public offering.
In 2001, Arm introduced the Cortex processor family, which offered a range of performance, power, and cost options for different applications. The Cortex processors are used in devices such as the Samsung Galaxy S10, the Apple Watch, and the Tesla Model 3.
In 2005, Arm acquired Artisan Components, a provider of physical intellectual property (IP) for chip design. This enabled Arm to offer a complete solution for system-on-chip (SoC) development.
In 2006, Arm announced the Mali graphics processing unit (GPU) family, which complemented its CPU offerings with high-performance graphics capabilities. The Mali GPUs are used in devices such as the Huawei Mate 20 Pro, the Oculus Quest, and the Samsung Smart TV.
In 2009, Arm partnered with IBM, Samsung, Texas Instruments, and others to form the Linaro consortium, which aimed to improve the Linux software ecosystem for Arm-based devices.
In 2010, Arm unveiled the Cortex-A15 processor, which was the first Arm processor to support virtualization and big.LITTLE technology. The Cortex-A15 was used in devices such as the Google Nexus 10, the LG G3, and the Nintendo Switch.
In 2011, Arm announced the Cortex-M0+ processor, which was the world’s most energy-efficient microcontroller. The Cortex-M0+ was used in devices such as the Arduino Nano 33 IoT, the Fitbit Flex 2, and the Nest Thermostat.
In 2012, Arm launched the Cortex-A53 and Cortex-A57 processors, which were the first Arm processors to support the 64-bit ARMv8 architecture. The Cortex-A53 and Cortex-A57 were used in devices such as the iPhone 6s, the Samsung Galaxy S6 Edge+, and the Microsoft Surface Pro X.
In 2013, Arm acquired Geomerics, a developer of real-time lighting technology for video games. This enhanced Arm’s graphics portfolio with dynamic illumination and global illumination effects.
In 2014, Arm introduced the Cortex-A72 processor, which delivered a 50% performance improvement over the previous generation. The Cortex-A72 was used in devices such as the Huawei P9, the Xiaomi Mi 5s Plus, and the Amazon Fire HD 10.
In 2015, Arm announced the Cortex-A35 processor, which was the most efficient Arm processor for smartphones and tablets. The Cortex-A35 was used in devices such as the Nokia 2.1, the Samsung Galaxy J2 Core, and the Lenovo Tab M7.
In 2016, Arm was acquired by SoftBank Group for £24.3 billion, becoming a subsidiary of the Japanese conglomerate. The deal was motivated by SoftBank’s vision of investing in technologies that would drive the future of artificial intelligence (AI), internet of things (IoT), and smart cities.
In 2017, Arm launched Project Trillium, a suite of machine learning (ML) solutions that included an ML processor , an object detection processor , and an open-source software framework. The Project Trillium products aimed to enable low-power and high-performance ML applications on edge devices.
In 2018, Arm unveiled the Cortex-A76 processor , which offered a 35% performance boost over its predecessor. The Cortex-A76 was used in devices such as the OnePlus 7T, the Huawei MateBook D14, and the Acer Chromebook Spin 13.
In 2019, Arm announced the Cortex-A77 processor , which improved on its predecessor with a higher clock speed, a larger cache, and better branch prediction . The Cortex-A77 was used in devices such as the Samsung Galaxy S20, the Asus ROG Phone II, and the Lenovo Yoga C940.
In 2020, Arm introduced the Cortex-X1 processor , which was its most powerful CPU design to date. The Cortex-X1 was designed to deliver peak performance for premium device , such as flagship smartphones, laptops and gaming consoles. The Cortex-X1 was used in devices such as the Samsung Galaxy S21 Ultra, the Xiaomi Mi 11, and the Google Pixel 6.
In 2021, Arm launched the Cortex-A78C processor , which was optimized for high-performance computing (HPC) applications. The Cortex-A78C featured up to eight CPU cores , a larger L3 cache, and support for ECC memory. The Cortex-A78C was used in devices such as the Samsung Galaxy Book Pro, the HP Elite Folio , and the Acer Chromebook Spin 513.
In 2022, Arm unveiled the Cortex-A710 processor, which was its first big core to support the Armv9 architecture. The Cortex-A710 offered a 30% energy efficiency improvement over its predecessor, as well as enhanced security and ML features. The Cortex-A710 was used in devices such as the OnePlus 10 Pro, the Huawei MatePad Pro 2, and the Microsoft Surface Laptop Studio.
In 2023, Arm announced the Immortalis GPU family , which was its next-generation graphics solution that included hardware-based ray-tracing and variable rate shading capabilities . The Immortalis GPUs aimed to deliver realistic and immersive graphics for gaming, VR and AR applications on mobile devices . The Immortalis GPUs were used in devices such as the Samsung Galaxy S22 Ultra , the Sony Xperia 1 IV, and the Oculus Quest 3.
Powerful world presence
Arm is a leading semiconductor and software design company that has revolutionized the computing industry with its innovative and efficient processor architectures. Arm’s processors power billions of devices across various domains, such as mobile, IoT, AI, HPC, and gaming. Arm has been at the forefront of technological advancements for over three decades, delivering performance, energy efficiency, and security to its customers and partners.
Arm is a subsidiary of SoftBank Group and has a massive global presence.
ARM lists in U.S. and not UK
British microchip designing giant Arm has announced that it has filed paperwork to sell its shares in the U.S.
The Cambridge-based company, which designs chips for devices from smartphones to game consoles, plans to list on New York’s Nasdaq in September. The highly anticipated IPO in the U.S. comes after UK Prime Minister, failed to convince Arm to float in London or pursue a dual UK-U.S. listing.
Arm’s decision to list in New York rather than London has fuelled fears that the City is losing its competitiveness to Wall Street, where valuations are typically higher. SoftBank-owned chip designer Arm on 21st August 2023 disclosed a modest 1% fall in annual revenue as it made public the paperwork for a U.S. listing that is expected to be the year’s biggest initial public offering. The company is reportedly looking for a valuation of between $60bn (£47bn) to $70bn.
Arm was bought in 2016 by Japanese conglomerate Softbank in a deal worth £23.4bn. Prior to the takeover, it was listed in both London and New York for 18 years.
Companies that use ARM processors in their products
Some of the companies that use ARM processors include Apple, Qualcomm, Samsung, Broadcom, and Fujitsu. ARM technology is used in a wide range of devices, from smartphones to game consoles to supercomputers.
ARM
Arm is a British semiconductor and software design company that is known for its Arm processors, which are widely used in smartphones, tablets, laptops, and other devices. Arm was founded in 1990 as a joint venture between Acorn Computers, Apple Computer, and VLSI Technology. The company was originally called Advanced RISC Machines, but later changed its name to Arm Ltd in 1998.
‘Knowing yourself is the beginning of all wisdom’.
Aristotle 384–322 BC
Aristotle was an ancient Greek philosopher and scientist, who is considered one of the greatest intellectual figures of Western history.
He wrote on a wide range of subjects, including logic, metaphysics, ethics, politics, biology, natural sciences, philosophy, linguistics, economics, politics, psychology and the arts.
He founded the Lyceum, a school of philosophy in Athens, and tutored Alexander the Great.
China cuts key interest rate as recovery falters post Covid
One-year loan rate to 3.45% from 3.55%
China’s central bank has cut one of its key interest rates for the second time in three months as the world’s second-largest economy struggles to bounce back from the pandemic.
The country’s post-Covid recovery has been hit by a property crisis, falling exports and weak consumer spending. In contrast, other major economies have raised rates to tackle high inflation. Raising interest rates to tackle inflation is likely creating a econmic problem all of its own for many contries caught in the inflation trap.
The PBOC last cut its one-year rate, on which most of China’s household and business loans are based, in June 2023 – demonstrating China’s commitment to reviving the economy. Economists had also expected the bank to lower its five-year loan rate, which the country’s mortgages are pegged to. However, this was unchanged at 4.2%. In a surprise move mid-August 2023, short and medium-term rates were also cut.
More stimulus
China will need a much bigger stimulus package to boost confidence to drive up consumption and growth. Without it, the economy is risking faltering into deflation which will make it even harder to recover. More rate cuts could be announced in conjunction with government spending, as well as targeted measures to help the property market.
Beijing is trying to restore confidence, but officials will also be mindful of the long-term implications of the policies may create. China’s economy has struggled to overcome several major issues in the wake of the pandemic, which saw much of the world shut down.
Property problems
Concerns with China’s property market still remain and were highlighted again when ongoing crisis-hit real estate giant Evergrande filed for bankruptcy protection in the U.S in August. The heavily-indebted company is attempting to arrange a multi-billion dollar deal with creditors.
Also, earlier this month, another of the country’s biggest property developers, Country Garden, warned that it could see a loss of up to $7.6bn (£6bn) for the first six months of the year. At the same time data showed China had slipped into deflation for the first time in more than two years. That was as the official consumer price index, a measure of inflation, fell by 0.3% last in July 2023 from a year earlier.
Exports, imports and youth employment figures
Official figures indicated that China’s imports and exports fell sharply in July 2023 as weaker global demand threatened the country’s recovery prospects.
Beijing has also stopped releasing youth unemployment figures, which were seen by some as a key indication of the country’s slowdown. In June 2023, China’s jobless rate for 16 to 24-year-olds in urban areas climbed to a record high of more than 20%.
There is a serious ongoing message here of concern and worry for global stock markets, and not just from China – do we need to act now?
89 UK security threats identified by National Risk Register
The 89 threats to life in the UK are listed in a recent report called the National Risk Register (NRR), which was published by the Deputy Prime Minister Oliver Dowden on 3rd August 2023.
The NRR is an assessment of the risks facing the UK that would have a significant impact on the UK’s safety, security or critical systems at a national level. The NRR is based on the government’s internal, classified risk assessment and offers more detail on the potential scenarios, response and recovery options relating to the risks.
The 89 threats are divided into four categories: natural hazards, malicious attacks, accidents and system failures, and global events.
Some of the threats
- Natural hazards: These include extreme weather events, such as heatwaves, floods, storms, droughts, and wildfires; geological hazards, such as earthquakes, tsunamis, volcanic eruptions, and landslides; biological hazards, such as pandemics, animal diseases, plant diseases, and invasive species; and space weather events, such as solar flares and geomagnetic storms.
- Malicious attacks: These include terrorism, such as bombings, shootings, chemical weapons, biological weapons, radiological weapons, cyberattacks, and drones; espionage and sabotage, such as interference with critical infrastructure, communications, or data; and conflict and instability, such as war, nuclear weapons, state-sponsored attacks, civil unrest, and violent extremism.
- Accidents and system failures: These include industrial accidents, such as explosions, fires, spills, or leaks; transport accidents, such as plane crashes, train derailments, ship collisions, or road collisions; infrastructure failures, such as power outages, water shortages, gas leaks, or internet disruptions; and technological failures, such as software bugs, hardware malfunctions, or AI errors.
- Global events: These include economic crises, such as recessions, inflation, debt defaults, or trade wars; political crises, such as coups, revolutions, sanctions, or human rights violations; social crises, such as migration flows, refugee crises, humanitarian emergencies, or famines; and environmental crises, such as climate change, biodiversity loss, pollution, or resource depletion.
Threat level
The NRR also provides information on how likely each threat is to occur in the next five years (from very low to very high), how severe the impact would be on the UK (from minor to catastrophic), and what actions the government and other stakeholders are taking to prevent or mitigate the risks.
The NRR is intended to help the public and businesses better understand and prepare for potential threats facing the country now and in the future.
‘The saddest aspect of life right now is that science gathers knowledge faster than society gathers wisdom.’
Isaac Asimov 1920 – 1992
Isaac Asimov was an American writer and professor of biochemistry at Boston University. During his lifetime, Asimov was considered one of the ‘Big Three’ science fiction writers, along with Arthur C. Clarke and Robert A. Heinlein.
My favourite book by Isaac Asimov is I, Robot. If you haven’t read it yet, go lift one off the shelf – it’s well worth a read.
An August U.S. stock market stumble, or more?
August typically a rocky month
The U.S. stock market has experienced a 5.6% slide for the S&P 500 index over 15 trading sessions through 17th August 2023 and levelling off in the last trading day of that week.
This is about as bad as August typically gets, as August is a rocky month with low volume and high volatility. Some of the reasons for the pullback include the rise in the 10-year Treasury yield, the strengthening of the U.S. dollar, and the signs of a slowing Chinese economy.
Pullback temporary for August?
However, some analysts argue that the pullback will likely prove to be temporary and not turn into a serious market rout. It has been suggested that the bull run isn’t quite over just yet, and that a 10% ‘pullback’ was on the cards.
Analysts also suggest that the rise in yields would need to threaten a serious shift or there would need to be an additional shock to cause a larger selloff.
NASDAQ
NASDAQ drops some 7% in one month from 19th July – 18th August 2023
However, some suggest that the market is showing signs of stability, as the speed of the surge in the 10-year yield often occurs near the end of a selling cycle for equities. Investors should watch for indicators such as oil prices, wage pressures, and inflation expectations to gauge the market sentiment.
The S&P 500 and the Dow levelled off the week at the close of trading Friday 18th August 2023.
The NASDAQ did score its best first half of the trading year since 1983 January to June 2023 so a pullback was likely to happen.
‘Opportunity is missed by most people because it is dressed in overalls and looks like work.’
Thomas Edison – inventor 1847 – 1931
Thomas Edison was an American inventor and businessman. He developed many devices in areas such as electric power generation, mass communication, sound recording, and motion pictures. These inventions, which include the phonograph, the ‘motion picture camera’, and early versions of the electric ‘light bulb’.
During his working life he is reported to have held a world-record 1,093 patents
The electric light bulb is one of the most important inventions in human history. It has revolutionized the fields of lighting, communication, entertainment, and industry. The electric light bulb produces light by passing an electric current through a thin wire called a filament, which heats up and glows. The filament is enclosed in a glass bulb that is either vacuumed or filled with an inert gas to prevent it from burning out. The humble bulb has undergone many developments through time including the introduction of energy saving devices using LED’S, Light Emitting Diodes.
Joint invention
The electric light bulb was not invented by any one person, but by many inventors who contributed to its development over the years. Some of the earliest attempts to create electric light were made by Humphry Davy, Warren de la Rue, and Joseph Swan in the 19th century.
However, the most famous and successful individual inventor of the electric light bulb was Thomas Edison, who patented his version in 1879 and 1880. Edison experimented with different materials for the filament, such as carbon, platinum, and even bamboo, until he found one that could last for over 1,000 hours. He also improved the vacuum pump and the socket for the bulb. He demonstrated his invention to the public by lighting up his laboratory and the nearby streets in Menlo Park, New Jersey.
World changing invention
The electric light bulb has changed the world in many ways. It has extended the hours of work and leisure, improved safety and health, enabled new forms of art and entertainment, and stimulated scientific and technological innovation.
The electric light bulb is also a symbol of human creativity, curiosity, and progress.
If you want a good read – go find, ‘The Last Days of Night’ by Graham Moore. It’s brilliant!
Hundreds caught breaking the law on AI camera system in Cornwall UK
A new artificial intelligence (AI) road safety camera system has been deployed on the A30 near Launceston, Cornwall, by Devon and Cornwall Police.
The camera system uses AI to detect potential offences such as using mobile phones or not wearing seatbelts while driving. The camera system can capture ultra clear images of the car’s interior and send them to a human reviewer who can issue a warning letter or a notice of intended prosecution, depending on the severity of the offence.
Hundreds caught
The camera system is the first of its kind to be used in the UK and it has caught almost 300 drivers breaking the law in the first three days of its operation. The camera system is part of the Vision Zero South West project, which aims to reduce road deaths and serious injuries in Devon and Cornwall. The project conducted a 15-day trial of a similar vehicle-based system last year and detected 590 seat belt and 45 mobile phone offences across various roads in the two counties.
The police hope that the new technology will help deter drivers from using their phones or not wearing their seatbelts, which are both dangerous and illegal behaviours that put people’s lives at risk.
The road safety system is from tech’ firm Acusensus.
The police have reportedly said they are ‘disappointed’ by the number of people not wearing seatbelts orand using their mobile ‘phones when drving.
Bitcoin drops 9% to $26,000
Bitcoin fell sharply on Thursday 17th August by 9% to just over $26,000
The fall in Bitcoin followed several hours after reports emerged that SpaceX, one of Elon Musk’s enterprises, wrote down the value of its Bitcoin holdings by a total of $373 million in 2022 and 2021, and that the space travel company had sold the virtual currency.
This is likely one of the fastest minute-by-minute selloffs in the history of Bitcoin but this is largely an Elon Musk/SpaceX-driven selloff and probably short-sighted and largely retail-driven. But still, 9% is a big drop for any asset!
In 2022, Tesla, which Musk also owns, announced that it sold about 75% of its Bitcoin holdings after investing $1.5 billion in the flagship cryptocurrency.
Bitcoin had been under pressure earlier, starting after the Federal Reserve issued the minutes from its July policy meeting. In Thursday’s session, the cryptocurrency slumped to its lowest level in almost two months.
‘We are all in the gutter, but some of us are looking at the stars.’
Oscar Wilde 1854 – 1900
This quote is from ‘Lady Windermere’s Fan’.
Singapore among world’s first to agree stablecoin crypto regulation – the race is on…
Big news for the crypto industry
Singapore’s financial regulator has reportedly said it had finalised rules for a type of digital currency called ‘stablecoin’, placing it among some of first the regulators worldwide to do so.
Stablecoins are a type of digital currency designed to hold a constant value against a fiat currency. Many claim to be backed by a reserve of real-world assets, such as cash or government bonds.
Reserves that back stabelcoins must be held in low-risk and highly-liquid assets. They must equal or exceed the value of the stablecoin in circulation at all times, the rules say. The stablecoin market is valued at around $125 billion, with two tokens – Tether’s USDT and Circle’s USDC – dominating roughly 90% of the market cap value. Stablecoins are broadly unregulated around the world.
The Monetary Authority of Singapore’s (MAS) framework requirement
- Reserves that back stabelcoins must be held in low-risk and highly-liquid assets. They must equal or exceed the value of the stablecoin in circulation at all times
- Stablecoin issuers must return the par value of the digital currency to holders within five business days of a redemption request.
- Issuers must also provide ‘appropriate disclosures‘ to users, including the audit results of reserves.
These rules will apply to stablecoins that are issued in Singapore and mimic the value of the Singapore dollar, or of any G10 currencies, such as the U.S. dollar.
Last year, the collapse of a so-called algorithmic stablecoin named UST put this type of stablecoin in the crosshairs of regulators. Unlike USDT and USDC, UST was governed by an algorithm and did not have real-world assets like bonds in its reserves.
Singapore’s stablecoin framework puts it among one of the first jurisdictions to have such rules. In June, the U.K. passed a law that gives regulators the ability to oversee stablecoins, though there are no concrete rules yet. Hong Kong is meanwhile undergoing a public consultation on stablecoins and seeks to introduce regulation next year.
What is a stablecoin
A stablecoin is a type of cryptocurrency that tries to maintain a stable value by being pegged to another asset, such as a fiat currency, a commodity, or another cryptocurrency. Stablecoins aim to offer the benefits of cryptocurrencies, such as decentralisation, security, and transparency, without the drawbacks of high volatility and price fluctuations.
Stablecoins can be used for payments, remittances, trading, and storing value. However, stablecoins also face some challenges and risks, such as regulatory uncertainty, technical issues, and trust issues.
There are different ways to create and manage stablecoins, depending on the mechanism used to stabilize their value.
Main types of stablecoins
- Fiat-backed: These stablecoins are backed by a reserve of fiat currency, such as the US dollar or the euro, held by a third-party entity. The stablecoin issuer promises to redeem the stablecoin for the fiat currency at a fixed ratio. Examples of fiat-backed stablecoins are Tether (USDT), USD Coin (USDC), and TrueUSD (TUSD).
- Commodity-backed: These stablecoins are backed by a reserve of physical commodities, such as gold, silver, or oil, held by a third-party entity. The stablecoin issuer promises to redeem the stablecoin for the commodity at a fixed ratio. Examples of commodity-backed stablecoins are Paxos Gold (PAXG), Tether Gold (XAUT), and Digix Gold (DGX).
- Crypto-backed: These stablecoins are backed by a reserve of other cryptocurrencies, such as Bitcoin or Ethereum, held in a smart contract. The stablecoin issuer uses over-collateralization or algorithmic adjustments to maintain the stability of the stablecoin. Examples of crypto-backed stablecoins are Dai (DAI), sUSD (SUSD), and BitUSD (BITUSD).
- Algorithmic: These stablecoins are not backed by any reserve, but instead use an algorithm to control the supply and demand of the stablecoin. The algorithm adjusts the supply of the stablecoin according to the market conditions and the target price. Examples of algorithmic stablecoins are Basis Cash (BAC), Empty Set Dollar (ESD), and TerraUSD (UST).
What is ‘crypto’
Crypto has attracted a lot of attention in recent years. Crypto is short for cryptocurrency, which is a digital or virtual currency that uses cryptography to secure and verify transactions. Crypto can also refer to the underlying technology that powers cryptocurrencies, such as blockchain.
Some examples of popular cryptocurrencies are Bitcoin, Ethereum, Ripple ( XRP)and Cardano (ADA).
Cryptocurrencies have many advantages over traditional currencies, such as decentralisation, transparency, anonymity, and lower fees. However, they also face some challenges, such as volatility, regulation, security, and scalability. Crypto enthusiasts believe that cryptocurrencies have the potential to revolutionise the world of finance and beyond.
Some examples of popular stablecoins are Tether, USD Coin and Binance USD.
Asia promotes Crypto clarity as U.S. muddles through with uncertainty
Clear crypto rules
Asia is promoting clear crypto rules at a time when large businesses are facing regulatory uncertainty in the U.S.
Some Asian countries that have taken the lead in crypto regulation include Singapore, Hong Kong, Japan, and South Korea. They have proposed or implemented frameworks that protect investors, prevent money laundering, and encourage innovation in the crypto industry.
Lack of clarity in U.S.
In contrast, the U.S. has been singled out for its lack of clarity and consistency in crypto regulation. The SEC for instance and other agencies have different views on how to classify and regulate crypto assets – take alook at the case with XRP and ripple of recent years.
Some industry leaders have threatened to leave the U.S. or sued the regulators over their actions. There is also a debate in Congress that could level crypto transactions with a tax.
Attractive
As a result, some analysts have suggested that Asia could become more attractive to investors and innovators in the crypto industry, as it offers more certainty and stability in the regulatory environment.
However, there are also challenges and risks involved in crypto regulation, such as balancing security and innovation, ensuring compliance and enforcement, and dealing with cross-border issue.
Welcome to the birth of digtal currency.
‘Money can’t buy friends, but you can get a better class of enemy.’
Spike Milligan 1918 – 2002
Spike Milligan was a famous Irish comedian, writer, musician, poet, playwright and actor famously known for writing the hit radio programme, ‘The Goon Show’.
‘I told you I was ill’.
The inscription ‘I told you I was ill’ is the famous epitaph of Spike Milligan.
He died in 2002 at the age of 83. He had once joked that he wanted this phrase to be on his headstone, but the local diocese did not approve of it in English. So he had to write it in Gaelic, which is ‘Duirt me leat go raibh me breoite’.
Bank error in your favour…?
A technical issue that affected the Bank of Ireland’s online banking services allowed some customers to withdraw or transfer more money than they had in their accounts.
The glitch reportedly also added €1,000 to some accounts without explanation. This led to large crowds forming at ATMs across the country, hoping to take advantage of the error.
Some reports suggest that the police were called to calm some situations as some ATMs ran out of cash. The bank has since fixed the problem and warned customers that any excess money they withdrew or transferred will be debited from their accounts.
The bank also apologized for the disruption and urged customers who may face financial difficulties due to overdrawing on their accounts to contact them.
Questions remain – how or even why did this happen?
UK inflation lower at 6.8% in July 2023 as energy costs fall
According to the Office for National Statistics (ONS) – Inflation fell to 6.8% in the year to July 2023, down from 7.9% in June. A reduction was anticipated by analysts, and there are signs the cost of living could be easing finally, after figures on Tuesday revealed wages rose 7.8% annually between April and June 2023. But inflation and therefore prices remain high, placing pressure on household finances.
When the rate of inflation falls, it does not always mean that prices are coming down, but that they are likely to rise less quickly. A fall in gas and electricity prices last month helped drive inflation lower. The cost of some food food items, such as milk, bread and cereals had come down, but that food prices are still some 15% higher than they were in July 2022.
Core inflation
However, according to the ONS figures core inflation a figure which strips out the price of energy, food, alcohol and tobacco, remained unchanged in July at 6.9%. With inflation still more than three times the Bank of England’s 2% target, many ‘experts’ expect the UK’s central bank to raise interest rates again in September 2023.
The Bank has steadily hiked interest rates to 5.25%, the highest level in 15 years, meaning mortgage costs have jumped dramatically, but on the flipside savings rates have increased too for the first time since the financial crisis of 2008.
Working?
The Chancellor said July’s figures on the cost of living showed the action the government had taken ‘is working’.
Comment
Well… it’s ‘working‘ in the sense it is having the desired affect to reduce inflation – (that both the government and the Bank of England were way behind on) – but it isn’t helping the economy, as interest rates climb making it more expensive for businesses and consumers to function.
But, at least wages are going up now thanks to all the strikes! This will ultimately add more inflationary pressure in the short term.
Let the tinkering continue!
‘We are stuck with technology when what we really want is just stuff that works’
Douglas Adams, – 1952 – 2001
Douglas Adams – was an English author, humourist, and screenwriter, best known for The Hitchhiker’s Guide to the Galaxy.
The Hitchhikers guide to the Galaxy
The Hitchhikers guide to the Galaxy is a comedy science fiction franchise created by Douglas Adams. It started as a radio comedy on BBC Radio 4 in 1978, and then it was adapted to other formats, such as novels, stage shows, comic books, a TV series, a text adventure game, and a feature film.
The franchise follows the adventures of Arthur Dent, a human who escapes the destruction of Earth with his alien friend Ford Prefect, who is a writer for the electronic travel guide ‘The Hitchhiker’s Guide to the Galaxy’.
Along the way, they meet other characters such as Zaphod Beeblebrox, the eccentric President of the Galaxy, Trillian, another human who was taken from Earth before its demolition, and Marvin, a depressed robot. The franchise is known for its humour, satire, absurdity, and references to various topics such as philosophy, physics, mathematics, and literature.
UK strike action and wage growth – repeats
Wages grew at a record annual pace between April and June 2023, according to new figures from the Office for National Statistics (ONS).
Regular pay grew by 7.8%, the highest annual growth rate since comparable records began in 2001.Inflation, which measures the pace at which prices are rising, has eased but remains relatively high at 7.9%. Thhe ONS suggested these latest figures demonstrates ‘people’s real pay is recovering‘ and that basic pay is growing at its fastest since current records began’.
However, wage growth is still not quite outstripping the pace of price rises and inflation is still high. Figures suggest that, taking into account the Consumer Prices Index (CPI) measure of inflation, average regular pay fell by 0.6%.
There are signs in the ONS’s data that the UK employment market is easing. The jobless rate rose from 4% to 4.2%, while the number of people in employment ticked lower.
Backward stats..?
The fall in employment in the three months to June and the further rise in the unemployment rate will be welcomed by the Bank of England as a sign labour market conditions are cooling. These comments from an analyst were presented as welcome news – but they are odd really when an economy needs good levels of employment (not unemployment). We live in weird times! Good news! Bad news!
The Bank of England is still generally expected by many pundits to increase its key interest rate again to 5.5% before ending the current run of rate rises.
The number of vacancies in the UK jobs market fell again, down 66,000 between May and July 2023. However, there are still more than one million vacancies.
Strike action adds to inflationary pressure
List of workers striking for higher pay
- Teachers
- Tube staff
- Railway workers
- Doctors
- Nurses
- NHS staff
- Ambulance workers
- Passport Office workers
- Border control staff
- Airport workers
- Civil servants
- University staff
- Barristers
This is by no means an exhaustive list – just a sample of the demands placed on resources through strike action that impacts inflation through a period of fast wage growth.
Japan outperforms as GDP up 6% August 2023
Japan’s economy beats expectations with 6% annualised growth in Q2
Japan’s economy posted its third straight quarterly expansion, latest government data showed 15th August 2023, as robust export growth contributed to an annualised 6% expansion in the second quarter, easily beating market expectations.
Economists had reportedly expected the world’s third-largest economy to produce a 3.1% growth in the April-June quarter. The GDP data translated to a more modest quarterly expansion of 1.5%, topping expectations for 0.8% growth.
The strong performance was mainly driven by a surge in exports, especially in the auto sector, as global demand recovered from the impact of the COVID-19 pandemic. Japan also benefited from an increase in inbound tourism, as travel restrictions eased and the Tokyo Olympics boosted visitor arrivals.
Outlook
However, the outlook for the Japanese economy remains uncertain, as the country faces a resurgence of COVID-19 cases and a sluggish consumer recovery. The government has extended a state of emergency in several regions, including Tokyo and Osaka, until the end of August, which could dampen domestic spending and business activity.
Quarterly expansion came in at a more modest 1.5%, versus expectations for 0.8% growth.
Optimism was tempered by muted domestic demand, given a surprise drop in private consumption expenditure despite the first employee compensation sequential increase in seven quarters.
Historically low interest rates
The Bank of Japan has maintained its ultra-easy monetary policy stance, keeping its key interest rate at -0.1% and pledging to support the economy with massive asset purchases.
The central bank has also introduced a new lending scheme to encourage green and digital investment for the future.
Russia surprises with massive interest rate hike hit of 3.5%
Interest rate pushed to 12%
Russia’s central bank has announced a surprise hike in its key lending rate by 3.5%, from 8.5% to 12%, as the country’s economic recovery loses steam amid a resurgence of COVID-19 cases and weak domestic demand.
The decision was announced after an emergency meeting of the bank’s board of directors was called a day earlier as the ruble declined. The fall comes as Moscow increases military spending and Western sanctions weigh on its energy exports.
The Russian currency passed 101 roubles to the dollar on Monday, losing more than a third of its value since the beginning of the year and hitting the lowest level in almost 17 months. It had recovered slightly after the central bank announced the meeting.
The central bank blamed the weak ruble on ‘loose monetary policy‘, suggesting that bank has ‘all the tools necessary‘ to stabilize the situation.
More imports, less exports
By raising borrowing costs, the central bank is trying to fight price spikes as Russia imports more and exports less, especially oil and natural gas, with defense spending going up and sanctions taking a toll. Importing more and exporting less means a smaller trade surplus, which typically weighs on a country’s currency.
The bank also made a big rate hike of 1% last month, saying inflation is expected to keep rising and the fall in the ruble is adding to the risk.
After Western countries imposed sanctions on Russia over the invasion of Ukraine in February 2022, the ruble plunged to a low of 130 to the dollar, but the central bank enacted capital controls that stabilized its value.
China cuts interest rates to boost economic recovery
Surprise cut
China’s central bank has announced a surprise cut in its key lending rates as the country’s economic recovery loses steam amid as domestic demand remains weak.
The PBOC trimmed the interest rate on 401 billion yuan ($55.25 billion) worth of one-year medium-term lending facility (MLF) loans from 2.65% to 2.50%.
The People’s Bank of China (PBOC) said on Monday 14th August 2023 that it would lower the one-year loan prime rate (LPR) by 10 basis points from 3.55% to 3.45%, and the five-year LPR by 10 basis points from 4.2% to 4.1%. The LPRs are benchmark rates that reflect the cost of borrowing for banks and businesses.
Easing domestic contraints
The rate cuts are aimed at easing the financial constraints on households and businesses to boost their financing demand and stimulating economic growth, which slowed to 5.2% year-on-year in the second quarter, down from 6.8% in the first quarter.
Analysts said the rate cuts also indicated a shift in China’s monetary policy stance from neutral to moderately easing, as the PBOC faces increasing pressure to support the economy amid rising deflationary risks, falling producer and consumer prices, and subdued real estate activity.
The PBOC reportedly said it would continue to implement a prudent monetary policy and maintain reasonable and sufficient liquidity in the market.
Britain to unlock £50 billion in pension funding for tech startups
UK to unleash £50 billion in pension funding for tech startups
The U.K. government has unveiled a series of reforms that will allow pension funds to invest more in private and high-growth companies, especially in the tech sector. The move is expected to boost economic growth, support innovation and increase returns for future retirees.
The reforms include an agreement with the country’s largest defined contribution pension schemes to allocate 5% of assets in their default funds to unlisted equities by 2030. This could unlock up to £50 billion of investment in high-growth firms if all other defined contribution pension schemes follow suit, according to the government.
AI
The government will also create new investment vehicles that will give pensioners a stake in homegrown private companies, such as fintech and biotech startups, that have increasingly snubbed the London Stock Exchange and turned to foreign investors for cash. The aim is to make the U.K. a more attractive market for technology and a global leader in emerging fields like artificial intelligence.
The Treasury claimed that the reforms would not only help burgeoning industries, but could also result in higher returns for workers’ retirement funds. The government estimates that the average earner’s pension pot could rise up to 12% to as much as £16,000 with defined contribution pension schemes committing to more effective investments.
Unlock
The announcement comes amid criticism that the U.K. is losing its edge in technology and innovation, as evidenced by the recent decision of U.K. chip design giant Arm to list in New York rather than London. The chancellor, Jeremy Hunt, reportedly said that he wanted to make the U.K. ‘the world’s next Silicon Valley and a science superpower’ by unlocking investment from the U.K.’s £2.5 trillion pensions sector.
The reforms were welcomed by industry groups and experts, who said that they would help address the funding gap faced by many U.K. startups and scale-ups, and create more opportunities for long-term growth and value creation.