Category: Observation

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Energy hungry data centre power solution

AI data centre

The use of nuclear reactors for data centres is a controversial and complex topic that has both advantages and disadvantages

Nuclear reactors can provide a reliable, stable, and carbon-free source of electricity for power-hungry data centres, which are essential for the operation of various applications, such as artificial intelligence (AI).

Grid overload

Nuclear reactors can also reduce the dependence on the existing grid, which may be vulnerable to blackouts, fluctuations, or cyberattacks. On the other hand, nuclear reactors require a high initial investment, as well as strict safety and regulatory standards. Nuclear reactors also pose potential risks of radiation, waste disposal, and proliferation. Moreover, nuclear reactors may not be suitable for all locations, as they may face public opposition, environmental concerns, or geopolitical issues.

Small Modular Reactor (SMR)

One of the possible solutions to these challenges is to use small modular reactors (SMRs), which are advanced reactors with about a third of the power generation of a traditional, large nuclear plant. SMRs are designed to be more flexible, scalable, and cost-effective than conventional reactors, as they can be built off-site and transported to the desired location. SMRs can also be integrated with renewable energy sources, such as solar or wind, to create a hybrid system that can balance the power demand and supply.

However, the technology of SMRs is still in its early stages of development and deployment, and there are currently no data centres in the world that use built-in nuclear reactors. Therefore, it remains to be seen whether nuclear reactors will become a common or viable option for future data centres. The decision to use nuclear reactors for data centres should be based on a careful evaluation of the benefits and risks, as well as the alternatives and trade-offs, of each specific case.

It has been calculated that a ‘norma’ data centre (whatever that is), needs 32 megawatts of power flowing into the building. For an AI data centre, it’s closer to 80 megawatts.

AI systems are using all this extra electricity simply because they are doing so much more processing than standard computing. They are chewing through far more data.

As AI continues to develop, so too will the power requirement needed to run these monsters.

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OpenAI unveils new AI software that lets you create realistic video by typing a descriptive sentence

Video

The new AI tool from OpenAI named Sora, can generate realistic videos from text prompts.

OpenAI has developed a new AI tool named Sora that can generate highly detailed videos of up to 60 seconds from descriptive text prompts.

The tool has raised concerns about its potential misuse, particularly in the creation of deepfakes and disinformation.

On the other hand, it is a remarkable achievement in the current AI arena and created in such a short space of time.

OpenAI has stated that it is working with experts in areas like misinformation, hateful content, and bias, who are testing Sora.

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Jeff Bezos sells nearly 12 million Amazon shares worth $2 billion

2 billion

Jeff Bezos filed a statement indicating his sale of nearly 12 million shares of Amazon stock worth more than $2 billion

The Amazon executive chairman notified the U.S. SEC – Securities and Exchange Commission of the sale of 11,997,698 shares of common stock on the 7th and 8th February 2024.

The collective value of the shares of Amazon, which is based in Seattle where he founded the company in a garage around thirty years ago, was about $2.04 billion.

More to come

In a separate SEC filing, Bezos listed the proposed sale of 50 million Amazon shares on or around 7th February 2024 with an estimated market value of $8.4 billion.

Taxing decision?

Jeff Bezos moved from Seattle to Miami in November 2023, shortly before he announced his plan to sell up to 50 million Amazon shares by January 2025. 

Florida does not have a capital gains tax, unlike Washington state, which imposes a 7% tax on any gains of more than $250,000 from the sale of stocks and bonds. Therefore, by moving to Florida, Bezos could save up to $600 million in taxes on his stock sale – more than enough for a luxury yacht and 2 or 3 more luxury properties.

But, of course, we do not know if this was the real reason for his move.

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Japan’s stock markets are on a tear but are the Zombies coming?

Nikkei 225 index

After a decade-long bull run throughout the 1980’s, the Nikkei 225 index reached an all-time high of 38,915 on December 29, 1989, the last trading day of the year.

Few could have imagined, on New Year’s Eve of 1989, that the index would be lower 34 years later. As the New Year arrived, the bubble burst.

And now, Japan’s stock markets are on a tear and closing in on that elusive 38195 high of 1989 – but there’s a catch – the Zombies are coming.

Zombie companies

Zombie firms are businesses that are unprofitable and struggling to keep afloat. They don’t have excess capital to invest and grow the business, or to pay down the loan capital.

Concerns about zombie firms are coming into focus as the Bank of Japan is tipped to raise interest rates in 2024 for the first time since 2007.

It comes as the Nikkei 225 rises to its highest point in almost 34 years

Japan’s stock markets have been on a meteoric run since the start of 2023, repeatedly breaching 33-year highs and outperforming the rest of Asia.

However, there are rising concerns that so called ‘zombie’ firms, which are unprofitable and struggling to keep afloat, could cut short that rally. The Bank of Japan is widely expected to raise interest rates this year, and that could easily tip many of these firms into bankruptcy, which could have a broader impact on the economy and stock market,

Nikkei 225 1-year chart 9th February 2024

Nikkei 225 1-year chart 9th February 2024

Bankrupt businesses

Zombie firms are nothing new in Japan. They first emerged after the stock ‘bubble’ and subsequent crash of the 1990s, when banks continued to support companies that would have otherwise gone bankrupt. 

The pandemic of 2020 accelerated the problem of zombie businesses, with the number of zombie firms in Japan reportedly jumping by around 33% between 2021 and 2022. 

At the end of 2023, Japan reportedly had around 250,000 companies that are technically zombie businesses

Some experts argue that zombie firms are a drag on Japan’s productivity, innovation, and growth, as they occupy resources and crowd out more efficient firms. The debate on how to deal with zombie firms is ongoing and may have implications for Japan’s economic recovery and future prospects.

Others suggest that zombie firms may have a positive effect, such as preserving employment, social stability, and industrial diversity.

Surely, there is no room for inefficiently run businesses making little or no profit in any economy.

Watch out for the Zombies!

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Are AI investing trading bots taking over? It’s a little bit alien to me

Alien investing

AI ‘trading bots’ are software programs that use artificial intelligence (AI) to analyse market data, generate trading signals, and execute trades automatically.

‘I meant Artificial Intelligence Investing not ‘Alien’ Investing (AI)’

AI trading bots are becoming more popular among investors who want to take advantage of the speed, accuracy, and efficiency of AI technology. But is this a good thing for the future of investing?

Pros

AI ‘trading bots’ could transform the world of investing

  • Enabling more accessible and affordable trading for everyone, regardless of their experience, knowledge, or capital.
  • Enhancing the performance and profitability of trading strategies, by optimising entry and exit points, managing risk, and adapting to changing market conditions.
  • Providing more diverse and innovative trading opportunities, by exploring new markets, assets, and strategies that human traders may overlook or ignore.
  • Reducing the emotional and psychological biases that often affect human traders, such as fear, greed, overconfidence, and regret.

Cons

AI ‘trading bots’ also pose some challenges and risks

  • Increasing the complexity and volatility of the markets, by creating feedback loops, amplifying trends, and triggering flash crashes.
  • Exposing traders to technical glitches, security breaches, and malicious attacks, by relying on software and internet connectivity that may malfunction or be compromised.
  • Raising ethical and regulatory issues, by creating potential conflicts of interest, information asymmetry, and market manipulation.

Conclusion

AI ‘trading bots’ are not a mystical ‘get rich quick solution’ that can guarantee success in the world of investing. They are tools that require careful selection, evaluation, and supervision by human input and for the human trader to maintain ultimate control.

We should always be aware of the benefits and limitations of AI technology.

Alien investing
Are AI investing trading bots taking over? ‘I meant Artificial Intelligence Investing not ‘Alien’ Investing (AI)’
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Turkey’s inflation nears 65%

Inflation climbs

In January 2024, inflation logged its biggest monthly jump since August with a 6.7% rise from December 2023.

Year-on-year inflation hit nearly 65%, according to the Turkish Central Bank’s figures released Monday 5th January 2024

The consumer price index (CPI) for the country of 85 million people increased by 64.86% annually, up slightly from the 64.77% of December.

Sectors with the largest monthly price rises were health at 17.7%, hotels, cafes and restaurants at 12%, and miscellaneous goods and services at just over 10%. Clothing and footwear were the only sectors showing a monthly price decrease, with -1.61%.

Food, beverages and tobacco, as well as transportation, all increased between roughly 5% and 7% month-on-month, while housing was up 7.4% since December 2024.

Interest rate hike to 45%, see report here.

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Federal Reserve chair Powell insists ‘probably’ fewer rate cuts in 2024 than the market expects

Federal Reserve

Federal Reserve Chair Jerome Powell said in a U.S. TV interview on Sunday 4th January 2024 that the central bank will proceed carefully with interest rate cuts this year and likely will move at a considerably slower pace than the market expects.

Election year rate cuts?

In the interview and after last week’s Federal Open Market Committee meeting (FOMC), Powell expressed confidence in the economy. However, he promised he wouldn’t be swayed by this year’s presidential election and said the pain he feared from rate hikes never really materialised.

“With the economy strong like that, we feel like we can approach the question of when to begin to reduce interest rates carefully,” he reportedly said.

“We want to see more evidence that inflation is moving sustainably down to 2%,” Powell added. “Our confidence is rising. We just want some more confidence before we take that very important step of beginning to cut interest rates.”

Powell indicated that it was unlikely the FOMC will make that first move in March 2024, which markets have been anticipating.

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Happy days on Wall Street for BIG tech companies

Tech

It was a good day of earnings for Big Tech companies. 

Three of the Magnificent 7 results dominated the headlines: Meta, Amazon and Apple. Nasdaq and S&P 500 gained in ‘after the bell’ trading. This after a punishing day for Alphabet and Microsoft, despite good results.

Nasdaq 100 closed at: 17344 but climbed above 17500 in after-hours trading.

Wall Street seemed impressed with Meta’s results.

Meta

Shares of Meta surged 15% after the social-media giant defied analysts’ estimates. It posted earnings of $5.33 per share on revenue of $40.11 billion. The company also declared its first-ever dividend payment. Share buy-back was also announced.

Meta platforms Inc. One year chart

Meta platforms Inc. One year chart
  • The results show Meta’s online ad business continues to recover well from a terrible 2022.
  • Sales in the Q4 jumped 25% year on year.
  • Expenses decreased 8% year over year to $23.73 billion.

Amazon

Investors also enjoyed Amazon’s earnings, which easily topped Wall Street’s predictions. The ecommerce giant also provided a strong positive outlook. The stock jumped 7% in extended trading.

Amazon.com Inc. One year chart

Amazon.com Inc. One year chart

Q4 was a record-breaking Holiday shopping season in the U.S. and closed out a robust 2023 for Amazon. Amazon has much planned for 2024.

Apple

But Apple didn’t benefit from the same treatment despite posting strong results.

Apple Inc. One year chart

Apple Inc. One year chart

Apple also exceeded estimates, reporting revenue growth for the first time in a year. But shares slid more than 2% in extending trading after it posted a 13% decline in sales in China.

Apple’s outlook suggesting weak iPhones sales may have also disappointed investors.

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AMD enters AI-powered PC race as artificial intelligence demand grows

AI power

U.S. microchip giant Advanced Micro Devices (AMD) is investing in AI PCs to take on the likes of Nvidia and Intel and Arm as the AI race gains momentum.

As the AI market expands so too will AI powered personal computer (PC). These are personal computers embedded with processors specifically designed to perform AI functions such as real-time language translation. Intel has already announced its AI powered chip for the PC.

Tech research firm Canalys in a December report said the boom in generative AI is expected to boost PC sales as consumers are seeking devices with AI features, predicting that 60% of the PCs shipped in 2027 will be AI-capable.

AI tech interest explodes

An explosion of interest in AI was sparked by the launch of ChatGPT in November 2022 as the chatbot went viral for its ability to generate human-like responses to users’ prompts.

Microsoft was quick to adopt the Technolgy and incorporate AI into its Bing search engine. Other companies such as Amazon, Alphabet (Google), Arm, Meta, Tesla and Apple are all heavily involved in AI development too.

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Bank of England holds interest rate at 5.25%

BoE

UK interest rates have been left unchanged at 5.25% by the Bank of England as widely expected by commentators.

It is the fourth time in a row the Bank has held rates at 5.25%.

The Bank of England had previously raised rates 14 times in a row to curb inflation, leading to increases in mortgage rates but also creating better rates for savers.

Interest rate chart from 2007 to January 2024 demonstrates just how low interest were between 2009 and 2022

Interest rate chart from 2007 to January 2024 demonstrates just how low interest were between 2009 and 2022

Attitude shift

There is a noticeable shift in opinion as the committee entertained the possibility of discussing the feasibility of cuts.

There was a three-way split, with two members of the Monetary Policy Committee (MPC) voting to increase the bank rate to 5.5%; one to reduce it to 5%; and six were in favour of sticking with 5.25%.

With inflation falling it is very likely the interest rates will be reduced by 0.25% by March 2024. Just take a look at the reduction in savers rates that have already occurred.

The anticipation is for a rate reduction soon.

The clue is that savers rates are being cut.

But

The Bank of England Governor, Andrew Bailey, has made clear that for him the key question is: ‘For how long should we keep rates at the current level?’

There may be disappointment ahead then – but a rate cut is next and I still expect it by Easter.

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Not so FINE at HSBC – £57.4m fine for depositor protection system failings

Bank system failings.

HSBC fined £57.4m by the Bank of England for ‘serious failings’ to protect customer deposits.

The bank failed to accurately identify deposits eligible for the UK’s Financial Services Compensation Scheme, the Bank’s Prudential Regulation Authority (PRA) announced.

HSBC was fined by the Bank of England’s Prudential Regulation Authority (PRA) for failing to properly implement the depositor protection rules, which are meant to safeguard customer deposits in case of a bank collapse. 

Serious concerns

The PRA said the failings were ‘serious‘ and ‘materially undermined the firm’s readiness for resolution’. HSBC reportedly said it was pleased to have resolved the ‘historic matter’ and cooperated with the investigation. The ‘failings’ occurred between 2015 and 2022. The fine is the second highest to date imposed by the regulator.

Protected up to £85,000 per person per institution

Under the scheme, customer deposits are protected up to the value of £85,000.

Under depositor protection rules, banks must have systems and controls in place to make sure that financial information is logged correctly. This information is needed if the FSCS has to make payments to customers upon a bank collapse.

However, the PRA said HSBC Bank incorrectly marked 99% of its eligible beneficiary deposits as ‘ineligible’ for FSCS protection.

Unfortunately this episode doesn’t give me much faith in the banking system that is supposed to protect the ‘saver’. At least the PRA discovered the failings.

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Neuralink implants brain tech device in human for the first time

Brain tech implant

Elon Musk’s neurotech startup Neuralink implanted its device in a human for the first time on Sunday 28th January 2024, and the patient is ‘recovering well,‘ the entrepreneur said in a post on X, on Monday 29th January 2024.

The company is developing a brain implant that aims to help patients with severe paralysis control external technologies using only neural signals.

Neuralink began recruiting patients for its first in-human clinical trial in the autumn after it received approval from the U.S. Food and Drug Administration to conduct the study back in May 2023, according to a blog post.

Musk, in an X post on Monday 29th January 2024 said that Neuralink’s first product is called Telepathy.

If the technology functions well, patients with severe degenerative diseases such as motor neurone disease could someday use the implant to communicate or access social media by moving cursors and typing with their minds.

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World’s largest sovereign wealth fund announces record $213 billion profit

Fund manager

Norway’s giant sovereign wealth fund reported record profit of 2.22 trillion kroner ($213 billion) in 2023, supported by returns on its investments in technology stocks.

Despite high inflation and geopolitical unrest, the equity market in 2023 was strong, compared to a very weak year in 2022. It follows a record loss of 1.64 trillion Norwegian kroner for the whole of 2022, which the fund attributed to ‘very unusual’ market conditions at the time.

Norway’s sovereign wealth fund on Tuesday 30th January 2024 reported a record profit of 2.22 trillion kroner ($213 billion) in 2023, supported by robust returns on its investments in technology stocks.

Government Pension Fund Global

The ‘Government Pension Fund Global’, one of the world’s largest investors, reportedly said the fund marked its highest return in kroner ever, with the fund’s return on investment last year coming in at 16% for the year.

Norway’s sovereign wealth fund, the world’s largest, was established in the 1990s to invest the surplus revenues of the country’s oil and gas sector. To date, the fund has put money in more than 8,500 companies in 70 countries around the world.

See wealth fund rankings table here

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What is Quiet Luxury?

Quiet Luxury

Quiet luxury is a fashion trend that emphasizes understated elegance, timeless style, and high-quality materials.

It is the opposite of flashy logos, loud colors, and fast fashion. Quiet luxury is about investing in pieces that are durable, versatile, and refined. 

Some examples of quiet luxury brands are Hermes, Prada-owned Miu Miu, Brunello Cucinelli, Compagnie Financière Richemont and Swatch Group, The Row, Totême, Tove and LVMH. Quiet luxury is also influenced by social changes, popular culture, and economic factors. It reflects a desire for simplicity, sophistication, and sustainability in a seemingly never-ending chaotic world.

Quiet luxury was one of last year’s biggest viral fashion trends, but unlike other short-lived fads on TikTok or Instagram, this one has made its way into investor portfolios and shown lucrative returns.

Luxury stocks have long been regarded by some as an effective hedge against inflation.

LVMH success – one way to invest in luxury

LVMH shares jumped more than 8% on Friday 26th January 2024, after the world’s largest luxury group posted higher-than-expected sales for 2023 and raised its annual dividend.

The owner of Louis Vuitton, Moët & Chandon and Hennessy, as well as brands including Givenchy, Bulgari and Sephora, on Thursday night 25th January 2024 reported sales amounting to 86.15 billion euros ($93.34 billion) for 2023, forecasts. This equated to a 13% growth from the previous year.

The result was boosted in particular by 14% annual growth in the critical fashion and leather goods sector, along with 11% growth in perfumes and cosmetics. Wines and spirits meanwhile posted a 4% decline.

Bernard Arnault is one of the top 10 wealthiest people in the world.

Is there room in your portfolio for a luxury brand?

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Samsung joins forces with Baidu’s Earnie AI chatbot

Baidu Ernie Chatbot

Chinese tech giant Baidu will partner Samsung to integrate its Ernie chatbot capabilities into Galaxy S24 smartphones.

The collaboration with Baidu will facilitate Samsung’s latest Galaxy S24 smartphone series with advanced features such as advanced typesetting, real-time call translation and intelligent summarization.

Samsung recently revealed its latest Galaxy S24 lineup with AI-powered features as it attempts to overtake the Apple iPhone.

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Apple takes top spot in China’s smartphone market

Apple iphone

In 2023 Apple became the biggest smartphone vendor by shipments in China for the first time.

Last year, Honor, a spin-off from Chinese company Huawei, held the second spot with almost a 17% market share, followed by Vivo, Huawei and then Oppo.

One of the biggest changes in 2023 was Huawei’s return to the top five in China in the Q4. The iphone has been one of the world’s best-selling selling products of all time.

Since the introduction of the Apple iphone in 2007 by Steve Jobs, its inventor and company joint founder, it has gone on to sell 2.3 billion and has over 1.5 billion ‘active’ users. Not bad for a product that investors initially called ‘dead on arrival’ due to lack of interest and sales.

Nokia 3310

In 2007 the Nokia 3310 was the clear market leader and easily king of the mobile phone market. Nokia sold 7.4 million units in 2007 – Apple sold just 1.4 million. Nokia was the ‘go to product’. But not for long.

Oh my, how things have changed. Apple is the now the world’s best-selling product (not just the world’s best-selling phone) – with Nokia and many others left trailing in the dust.

Apple app store

It was the apps that done it; having a product that could be any number of different ‘products’ in one and held in your hand was a game changer – and that changed the world.

The rest is history.

Apple share price chart from 1984 (the year the Apple Macintosh was introduced)

Apple share price chart from 1984 (the year the Apple mac was introduced)
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The U.S. GDP up in Q4 as economy grew at a 3.3%

U.S. GDP

The U.S. economy grew at a much faster pace than expected in the final three months of 2023.

The U.S. easily avoided a recession that many had forecast as inevitable, the U.S. Commerce Department reported Thursday 25th January 2024.

Gross domestic product (GDP), a measure of all the goods and services produced, increased at a 3.3% annualised rate in the final quarter of 2023, according to data from the Commerce Department.

Wall Street consensus was for a figure of 2%.

U.S. BEA Bureau of Economic Analysis

Bureau of Economic Analysis

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U.S. inflation pullback

U.S. Inflation down

Progress on U.S. inflation

Core prices for personal consumption expenditures (PCE), a preferred measure by the Federal Reserve as a longer-term inflation calculation, rose 2% for the period, while the rate was 1.7%.

On an annual basis, the PCE price index rose 2.7%, down from 5.9% a year ago, while the core figure excluding food and energy posted a 3.2% increase annually, compared with 5.1%.

Good news

Inflation falling, GDP rising, stabilizing interest rates and no recession thus far the U.S. economy is looking rock-solid despite all the negativity.

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Turkey hikes interest rate to 45% after inflation touches 65%

Turkey inflation high

Turkey’s central bank on Thursday 25th January 2024 hiked its key interest rate to 45%.

It comes amid an ongoing struggle against double-digit inflation for Turkey’s policymakers, with the rate hike the latest step in that ongoing fight.

30 Turkish Lira to 1 U.S. dollar

Inflation in Turkey increased nearly 65% year-on-year in December 2023, up from 62% in November, and the country’s currency, the lira, hit a new record low against the U.S. dollar earlier in January 2024 at 30 Lira to $1.

Analysts predict this will be the last hike for some time, especially with local elections approaching in March 2024

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Bitcoin, the SEC, ETFs and Volatility

Bitcoin

What a difference a day makes

Bitcoin climbed to touch $49,000 after the SEC recently gave the go ahead for the Bitcoin ETF. The last time I checked it was at $39,000 (23rd January 2024). Oh, dear me – the dramatic pain of volatility.

Bitcoin volatility has increased after the launch of the first spot Bitcoin ETFs in the United States. The price of Bitcoin (BTC) rocked wildly, reaching a high of $49,000 and a low of $46,000 in just hours of trading. 

Liquidation

This caused liquidations of millions in the Bitcoin market. Some analysts predict that the ETFs will bring more institutional investors and liquidity to the Bitcoin market, while others warn of the risks and challenges of the new investment vehicle. 

Bitcoin ETFs are funds that track the price of Bitcoin and trade on stock exchanges, allowing investors to gain exposure to Bitcoin without buying or storing it directly.

Bitcoin chart – 3 months 24th January 2024 at 15:26

Bitcoin chart – 3 months 24th January 2024 at 15:26
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A new powerful AI is coming but the techies have no clue as to what it will look like

AGI

That’s reassuring then, and they are creating it

Leaders at some of the world’s leading artificial intelligence (AI) companies are expecting a form of AI on a par with, or even exceeding human intelligence to arrive sometime in the near future. But what it will eventually look like and how it will be applied are unknown.

Artificial General Intelligence or AGI is coming soon

Leaders from OpenAI, Microsoft and Google’s DeepMind, and many other major tech companies debated the risks and opportunities presented by AI at the World Economic Forum in Davos, Switzerland in January 2024.

AI has become the talk of ‘town’ around the world through 2023, mainly due to the success of ChatGPT, OpenAI’s popular generative AI chatbot, brought to us by Microsoft. Generative AI tools, like ChatGPT, are powered large language models, algorithms trained on vast quantities of data, but are not AGI.

Executives at some of the world’s leading artificial intelligence companies see ‘artificial general intelligence,’ or AGI, a hypothesized form of AI with intelligence on a par or better than humans. This prospect is both exciting and worrying.

Concern

AI and AGI have created concern among governments, corporations and public consultation groups worldwide, owing to the risks around the lack of transparency of AI systems; social manipulation through computer algorithms; job losses due to increased automation; surveillance; and data privacy and worse… the lack of human control!

Extinction event possible

Many industry leaders in technology have warned that AI could lead to an ‘extinction-level’ event where machines become so powerful they get out of control and wipe out humanity.

A new powerful AI is coming but the techies have no clue as to what it will look like

Several prominent technology leaders, including Elon Musk and Steve Wozniak for example, have called for a pause in AI development, stating that a moratorium would be beneficial in allowing society to catch up.

Turing test

AI chatbots like ChatGPT have passed the Turing test, a test called the ‘imitation game,’ which was developed by British computer scientist Alan Turing to determine whether someone is communicating with a machine and a human. The one big area where AI is lacking is common sense.

It has been reported on many occasions, that the tech world is taking steps to ensure that the AI race doesn’t lead to a ‘Hiroshima moment.‘

Will AGI be created in the image of humans?

Let’s hope not.

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Polluting coal users and renewable producers

Coal fired power

The highest coal using countries in the world

  • China, which consumes over half of the global coal demand and produces over 4 billion tonnes of coal per year.
  • India, which consumes about 14% of the global coal demand and produces over 900 million tonnes of coal per year.
  • The United States, which consumes about 9% of the global coal demand and produces over 600 million tonnes of coal per year.
  • Japan, which consumes about 3% of the global coal demand but imports most of its coal.

These countries accounted for about 82% of the global coal production in 2021 according to 2021 data set. China alone produced more than half of the world’s coal, followed by India with nearly 10%.

Global coal use in 2023 hits few high

Global coal use in 2023 has hit a record high, surpassing 8.5 billion tons for the first time, on the back of strong demand in countries like India and China, said IEA. These countries are the world’s largest consumers of the dirtiest fossil fuel, and continued modernization puts their energy consumption on a rapid growth trajectory.

China

China and India’s growing economies will continue to fuel demand for coal even as they set ambitious renewable energy targets, according to experts.

While China is the world’s largest energy consumer, India is ranked third globally, and both countries are the top consumers of coal as they strive to fuel economic growth. 

China’s share of global electricity consumption, 60% of which is coal, is set to jump to one-third by 2025, compared with a quarter in 2015, according to projections by energy watchdog International Energy Agency (IEA).

Global coal usage in 2023 hit a record high, surpassing 8.5 billion tons for the first time, on the back of strong demand in emerging and developing countries such as India and China, IEA noted in a recent report. 

China’s electricity sector has been in the throes of a clean revolution over the past few years, with an almost five-fold growth in wind and solar generation since 2015. As a result, the share of coal generation has fallen by 17 percentage points, from 78% in 2000 to 61% in 2022. 

China has suffered from drought in recent years, which reduced hydroelectric power generation in its southern provinces. To maintain the necessary power output, the country had to turn to coal. 

United States

By contrast, U.S., which is the world’s second largest consumer of coal, has seen a decrease in its usage of the fuel. According to the Institute for Energy Economics and Financial Analysis, the amount of coal that the superpower consumes each day recorded a 62% drop from 2.8 million to 1.1 million tons a day.

75% of India’s power is derived via coal-fired plants. Coal accounts for 61% of China’s power generation, even though the country is recognized as the indisputable leader in renewable energy expansion. It has been adding new projects to the grid almost as fast as the rest of the world combined in 2022 and has ambitions of becoming carbon neutral by 2060.

Annual average capacity additions by country and region, 2016-2023

See IEA report

India’s coal production rose to 893 million tons during the financial year ending March 2023, jumping nearly 15% from a year earlier. China’s raw coal production in 2023 went up by 2.9% compared with the same period in 2022.

There are no signs of a slowdown, with the IEA saying coal consumption in India and Southeast Asia is projected to grow significantly.

Coal won’t go!

But the lack of reliability of renewables means coal has still very much been a critical fallback option for the two countries.

Top five coal producing countries in the world

  • China: 4,126.0 million tonnes
  • India: 762.0 million tonnes
  • Indonesia: 614.0 million tonnes
  • United States: 523.8 million tonnes
  • Australia: 467.1 million tonnes

Five of the Greenest energy producers in the world

  • Sweden
  • Norway
  • Denmark
  • Finland
  • Switzerland

The greenest were based on these five criteria: carbon emissions, energy transition, green society, clean innovation, and climate policy.

Top countries by renewable energy production

  • China: 2,271.9 TWh (28.2% of total electricity)
  • United States: 804.8 TWh (20.5% of total electricity)
  • Brazil: 491.9 TWh (83.3% of total electricity)
  • Canada: 433.6 TWh (66.9% of total electricity)
  • India: 303.5 TWh (24.5% of total electricity)

Note: three of the world’s worst offenders of fossil fuel use are also in the top five for energy production by renewables – China, U.S. and India.

So, are things changing slowly?

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Elon Musk’s wealth is just crazy!

Wealth

According to the Bloomberg Billionaires Index, Elon Musk is the wealthiest person in the world, with an estimated net worth of $243.46 billion USD as of 8th Jan 2024.

Musk is the founder and CEO of Tesla and SpaceX, X and X.ai as well as the co-founder of PayPal and Neuralink. He made his fortune from various business ventures, starting from a web software company called Zip 2 that he sold in 1999 for around $307 million. He also inherited some wealth from his father, who owned an emerald mine in South Africa.

Think about this for a moment

It’s a little difficult to imagine such wealth so, maybe think of it like this… If you had been given $10,000 every day since the birth of Jesus Christ, 2024 years ago – you would have accumulated some $7.4 billion (without interest and leap years etc).

So, Mr Elon Musk has a net worth of around $243 billion and you would have $7.4 billion and that equates to only 3% of his current wealth.

Or, if you had been given $10,000 every day since the pyramids were built in Egypt around 4500 years ago – you would have accumulated $16.4 billion. That’s still only 6.75% of Elon Musk’s current wealth.

One last thought

A recent report conducted by Oxfam calculated that just 5 of the world’s richest men (including Musk) are worth $869 billion between them.

Your $16.4 billion accumulated over 4500 years would equate to less than 2% of that combined wealth.

Now that’s crazy!

Final thought

8 of the top 10 current billionaires made their money in… technology.

Please note: figures are estimated, but it perfectly demonstrates my point.

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Oxfam report says world’s five richest men have more than doubled their wealth in 3 years

Wealth

The world’s five richest men have increased their combined fortune from $405 billion in March 2020 to $869 billion in November 2023, according to a report from Oxfam.

Wealth increased at a rate of $14 million per hour for 5 people

A report by the charity highlighted the wealth of Tesla CEO Elon Musk, LVMH boss Bernard Arnault and family, Amazon founder Jeff Bezos, Oracle founder Larry Ellison, and investor Warren Buffett.

Oxfam is calling for restrictions on ‘corporate power’ to reduce the massive inequality between the super-rich and the rest of society. Two of the suggestions to correct the inequality is through capping CEO pay and introducing taxes on permanent wealth and excess profits.

This report was released to coincide with the Davos meeting as the rich and wealthy business leaders and bankers gather.

Oxfam says

  • Fortunes of five richest men have shot up by 114% since 2020.
  • Oxfam predicts the world could have its first-ever trillionaire in just a decade while it would take more than two centuries to end poverty. 
  • A billionaire is running or the principal shareholder of 7 out of 10 of the world’s biggest corporations.
  • 148 top corporations made $1.8 trillion in profits, 52% up on 3-year average, and dished out huge payouts to rich shareholders while hundreds of millions faced cuts in real-term pay.
  • Oxfam urges a new era of public action, including public services, corporate regulation, breaking up monopolies and enacting permanent wealth and excess profit taxes.

Full report here

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Japan Nikkei index hit an all-time high of 38915 in December 1989, will it ever be broken?

Nikkei

Japan’s Nikkei 225 index set a new record in nearly 34 years last week, breaking the 35000 barrier for the first time since February 1990. Its all-time high of 38915 was hit in December 1989? That’s a 35 year old record!

Some analysts think that the long-term prospects for the Japanese markets look good.

The Nikkei 225 index is a benchmark of the Japanese stock market. It is composed of 225 large companies listed on the Tokyo Stock Exchange. The index has been fluctuating between 20000 and 30000 points for most of the past decade. It recovered from the lows of the global financial crisis in 2008 and 2009.

According to some market strategists, the Nikkei 225 index could reach 40000 points in the next 12 months. Fundamentals are ‘pointing in the right direction’ and investor interest in Japan is increasing. 

This would breach the Nikkei’s all-time high of 38915 reached in December 1989. However, others suggest the rally will struggle somewhere between 36000 and the all-time high. This suggest that much of the good news is already priced in.

I think I could probably have guessed that too. The Nikkei hasn’t reached the original high of 1989 for 35 years!

It’s due a new record, isn’t it?

Nikkei index chart from 1984 to 2024 – 40 years

Nikkei index chart from 1984 to 2024 – 40 years