Author: admin

Evidence of deflation in China – %Arabica coffee

I met %Arabica Coffee in Hong Kong.

I liked it, especially the design of the coffee shop; I still kept its physical customer loyalty program card.

The coffee chain expanded in mainland China in 2018.

I have been to several of its stores in mainland China and it’s one of my favorites.

In mainland China, the %Arabica coffee loyalty program is more digital (I am using its mini-program on WeChat) and ran separately from the HK one.

The mini-program kept my previous purchases and the Grande Ice Americano is 35 rmb.

You know what, I am buying the %Arabica Grande Ice Americano with delivery to my door for 24 rmb (on weekend) !

As Meituan should also take a cut, the net price for %Arabica is much lower than 23 rmb.

That’s 1/3 cut for consumers and 40-50% cut for %Arabica!

 

That even makes the housing price decline in China “normal” and “not sufficient”.

Bond yield becomes a topic? looks fine for Europe

Benchmark 10-year yield ranges:

Period Germany Italy Spain Background
Late 1970s–1980s 6–11% 10–14% 11–14% High inflation and nominal growth
Early 1990s peak ~9% 14.2% 14.0% Currency/ERM crisis
2000–07 3–5% 3.5–5.5% 3.5–5.5% Euro convergence
2011–12 crisis peak ~2% 7.3% ~7.6% Euro break-up/default risk
2020–21 low −0.8% 0.45% Around 0% ECB QE and pandemic policy
August 2026 3.26% 4.08% 3.72% Fiscal expansion, inflation and supply

How did European stocks perform?

 

Year STOXX Europe 600 price return Total return Broad environment
1988 +22.2% +25.4% Growth and yields rising
1989 +24.5% +28.0% Reunification optimism
1990 −17.8% −15.3% Bund yields/rates peak; recession fears
1991 +12.5% +15.8% Partial recovery
1992 +1.6% +5.8% ERM currency crisis
1993 +35.9% +40.7% Rate cuts and collapsing yields

 

Index 2011 2012
STOXX Europe 600 price −11.3% +14.4%
STOXX Europe 600 total return −8.6% +18.2%
Germany DAX −14.7% +29.1%
Italy −25.2% +7.8%
Spain IBEX −13.1% −4.7%

Note that 2011-12 is different – one key evidence is German yield yield was falling, while now it’s rising in 2026. Note that 2012 stock increased due to euro-breakup crisis being contained.

Germany’s 10-year yield has increased from about 2.86% at end-2025 to 3.26%, or roughly +40 bp YTD.

Year-end Germany Italy Spain STOXX 600 price return
2008 3.05% 4.47% 3.86% −45.6%
2009 3.14% 4.01% 3.80% +28.0%
2010 2.91% 4.60% 5.37% +8.6%
2011 1.93% 6.81% 5.50% −11.3%
Jul-12 1.24% 6.00% 6.80% Crisis peak
2012 year-end 1.30% 4.54% 5.34% +14.4%

 

Governments, tax, shareholders

Isn’t governments the invisible shareholder of all corporations?

Say tax is 25% , essentially gov will take 25 of 100 profit before tax, and the rest $75 are called profit after tax and is distributed to shareholders.

Does it sound odd?

Isn’t governments essentially a permanent 25% shareholder of the company, and the ratio is net by itself.

How convenient.

Btw, shareholders are should give their shares a 25% hair cut.. if they own 50% of a company, they just own 37.5% in case of 25% tax.

Thoughts from people more than 75 year ago

Where is our thought leader these days?

Moreover, if we move in the direction of making machines which learn and whose behavior is modified by experience, we must face the fact that every degree of independence we give the machine is a degree of possible defiance of our wishes. The genie in the bottle will not willingly go back in the bottle, nor have we any reason to expect them to be well disposed to us.

Wiener_Norbert_The_Machine_Age_v3_1949

Meanwhile,

I think affluent middle class is key to a lot of things, especially for the US.

The rise of cheap Chinese open-weight models is a shock, if not an “attack”.

“Middle class” that is merely existing without a lot of options in life is not affluent middle class. Free will doesn’t prevail in this case.

About AMD

1/ OpenAI warrants and target price

OpenAI’s AMD warrant (max 160 million AMD shares) agreement says the first tranche follows delivery of the first 1 GW and full vesting requires purchases reaching 6 GW. AMD also disclosed that the stock-price targets rise to $600 for the final tranche.

AMD last year talked about $20 non-gaap EPS within the next three to five years. And now it says it will be significantly above $20.

Using the Nov 2025 stated goal of $20, OpenAI’s last tranche of $600 is 30x, and given it maybe $30 non-gaap eps, it’s just 20x.

2/ Lisa Su doesn’t own much?

Lisa Su currently owns approximately 3.61 million AMD shares outright, equal to about 0.22% of AMD.

AMD’s March 2026 proxy disclosed that Su also held 413,529 options exercisable within 60 days. Adding those to her currently reported actual shares gives approximately 4 milion beneficially owned shares or approximately 0.247% of AMD.

However, she came as CEO. She is not the founder.

What concerns me (3)

Is that today’s major platforms like X and TikTok/Douyin can be used as “thought weapons”.

People/organizations can push a post (twit or video) to millions of people if it fits their interest, regardless of who creates the post in the first place.

At certain scale and with enough repetitiveness, this action can alter a person’s or a group of people’s thoughts.

This influence is sold.

People/organizations can buy the influence without disclosing the intention.

Common folks are blindfolded.

It’s not like an influencer wants  more people to see his/her posts to grow impact.

It’s paying for “thought weapons” to achieve certain goals inexplicitly.

And sometimes, these goals could be evil, or self-interested.

Meanwhile, users who “owns” the attention “sell” their attention for nothing; payers pay to the platforms – they are not even bribing the ones that have original ownership.

What concerns me (2)

Is that current companies or leader of companies at the frontier of AI and robotics talks about advancement everyday, but they said little about ethics, at least in the public domain.

Who to provide jobs if factories are run by robotics? and decisions are made without human in the loop?

How to preserve humanity in a world with automatic war machines / weapons?