Should we be scared of AI?

Well, not of AI. As in “Artificial Intelligence”. I’m not saying we should be scared of that.

But Artificial Super Intelligence? Perhaps we need not be literally “scared”. But concerned? Yes. We ought be concerned. We ought to consider, very seriously indeed, its potential dangers. 

I’m not talking Luddite stuff. Tolpuddle Martyrs stuff. I’m not talking “AI will take away my job” stuff. 

I’m talking existential. As in: life threatening. As in: a threat to the survival of humanity itself.

This is not being a “retard”. Plenty of super smart people worry about it. Chief amongst them Elon Musk, himself a major owner of AI. His concern about the existential threat led to his funding OpenAI, to be public, open to public scrutiny, of understanding its dangers. But which was hijacked by Sam Altman, litigated…  but that’s another story. 

I’m reposting the above video I posted in February. I rewatched it last night. It’s a good summary of the issues, in short film format. 

There’s a follow up to “Writing Doom”, by Suzy Shepherd: Seat at the Table

And for a deeper dive, there’s Roman Yampolskiy talking to Steven Bartlett about AI Safety: Only 5 Jobs left in 2030

There’s a non-zero chance ASI could wipe out Homo Sapiens. Perhaps a non-trivial chance. 

Surely we should look at it? Discuss it? Without worrying that we’re becoming EU-apparatchik worrywarts?

Huge Worldwide Poverty Reductions

 

The huge increase in the world population NOT living in poverty (the Green above) began after mid 1970s. A big chunk of it from China expanding market forces. Aka Capitalism. 

Everywhere in the world that things go better, where the poor get richer, where the rich also get richer, in every single case it’s down to capitalism. , 

“But isn’t China socialist?”. “Didn’t China have huge growth since 1980?”. Yes to both. But but…. The growth wasn’t down to socialism. It was and is, very simply, because the Communist Party allowed the market to expand. It was market expansion, aka capitalism, that grew the growth.

China has been economically successful to the exact extent that it has allowed market forces to operate. 

I saw that with my own eyes on the ground in China, from the 1970s to now. 

Whenever China shifts back to more Party control, growth stops or slows. We’ve seen it. I’ve seen it, lived it, experienced it. 

That’s the reality of the world in the last century. Capitalism works.. Socialism doesn’t.

It’s Capitalism all the time, all the way.

Capitalist United States vs Socialist Europe

 

The bigger the circle the bigger the company. The bigger the cluster, the bigger the economy. Green are high-tech, blue all others. 

This chart is from a few years ago, an MIT study. My guess is that the difference has widened.

US is like the place they “move fast and break things”. Then they fix them. 

Europe is like the place that doesn’t want to “break” things in the first place. So they regulate them.

ADDED:

Why Europe could never produce an Elon Musk. Nikos Sotirakopoulos. An ex-communist, turned Common-sensical. 

People making things vs people taking things

People making things are entrepreneurs. People taking things are civil servants.

There's not a thing I can think of that civil servants actually make. And I speak as a former Australian civil servant, son of civil servants; but also in business and an entrepreneur, if only a small one, here in Hong Kong.

I've often thought and said: there's nothing like the discipline of having to meet a payroll every month. To give you perspective. And make you truly responsible. And make you appreciate the plus side of actually making things, creating services, and selling them to people who value them.

Below is a French person, @brivael, telling a tale of two types.

Elon Musk had said something that really stuck with me about resource allocation. In essence: beyond a certain level of wealth, money is no longer about consumption—it's about capital allocation.

That sentence changes everything.

Economics, at its core, is just an allocation problem. You have finite resources and infinite uses. Who decides where what goes?

Imagine a school playground. 100 kids, packs of Pokémon cards handed out at random. You let it play out. Very quickly, an order emerges. The good players accumulate rare cards, the collectors sort, the negotiators strike deals. No one planned it. And yet every card ends up in the hands of the one who gets the most value from it. The system maximizes the total happiness of the playground. That's the invisible hand.

Now bring in the teacher. She finds it unfair. Leo has 50 cards, Tom has 3. She confiscates, redistributes, enforces equality. Three immediate effects. The good players stop playing—what's the point. The bad ones have no reason to improve; they'll get their share anyway. Trades collapse. The playground is equal, and dead. She maximized equality, she destroyed happiness.

The teacher's problem is that she can't have the information the playground had collectively. That's Mises' economic calculation problem, formulated in 1920. The USSR tried to solve it for 70 years with the Gosplan. Result: shortages, lines, collapse. Not because the Soviets were stupid, because the problem is mathematically unsolvable in centralized mode.

When Musk has 200 billion, he doesn't consume it—he allocates it. SpaceX, Starlink, Neuralink, xAI. Every dollar is a bet on the future. And he has a track record. PayPal, Tesla, SpaceX. He's demonstrated he knows how to spot massive problems and allocate resources to them with spectacular returns.

The state has a track record too. Hospitals collapsing, education declining, debt exploding, public services degrading despite constantly rising budgets. The market identifies good allocators; politics identifies good communicators.

Profit isn't an end goal—it's a signal. It says: you've allocated scarce resources to a use that people value enough to pay for. The bigger the profit, the greater the value created. When Starlink turns profitable, it means millions of people in rural areas finally have internet. When a ministry runs a deficit, it means it's consuming more than it produces. One creates, the other destroys, and we call that redistribution.

In our societies, there are two categories of actors. Entrepreneurs and bureaucrats. The entrepreneur takes personal risk to spot a problem, mobilize resources, create a solution. If he's wrong, he loses. If he's right, his customers win, his employees win, his suppliers win, the state collects taxes. He's the basic cell of human progress.

The bureaucrat takes no personal risk. His salary is guaranteed. At best, he maintains an existing rent. At worst, he destroys it through overregulation, forced bad allocation, perverse incentives that discourage those who produce. But in no case does he create.

Look at the last 50 years. iPhone, civilian internet, SpaceX, Tesla, Google, Amazon, Stripe, mRNA, ChatGPT. All private inventions, driven by entrepreneurs, funded by venture capital. Not a single ministry has invented anything that's changed your daily life.

France has become the world's laboratory for bureaucratic drift. 57% of GDP in public spending, an absolute record. A sprawling administration, a tax system that penalizes wealth creation. Result: falling behind the United States, Germany, Switzerland. Brain drain. Deindustrialization. Exploding debt.

And the worst part is that bad allocation self-reinforces. The more the state takes, the less entrepreneurs create. The less they create, the less tax base there is. The more the state borrows and taxes. Perfect negative feedback loop. The teacher thinks she's helping, and every year the playground produces less.

In our societies, it's always the entrepreneurs who advance civilization. Bureaucrats, at best, maintain a rent; at worst, they destroy it. No society has ever progressed by taxing its creators to subsidize its managers.

The question is never who has how much. It's who allocates the next unit of resource best to maximize humanity's future. The answer hasn't changed in 200 years. It's not the civil servants.

Reference

Nonprofits manufacture problems to stay in business

Relating to my recent post on the SPLC. The "Southern Poverty Law Centre".

And about why the Left hates Elon Musk. Basically they hate him because in his time at DOGE, he was trying to expose and cut Waste, Fraud and Abuse. 

While the Dems rely on Waste, Fraud and Abuse. It's their money machine. It's the NGO Industrial Complex. It's their laundromat. Their money laundering. 

Below some words on all this, from the four smart guys at the All-in podcast:

David Sacks:

“Here's the systemic problem with nonprofits and NGOs.

Let me just contrast it with business.

In business, you set up a company, the company has to make revenue, it has to make profits.

And if it doesn't, it's going to go out of business, right? Because it'll lose money.

So there's a feedback mechanism from the market.

With an NGO, nonprofit, what have you, they raise money. They don't sell things.

They fundraise from donors in order to engage in an activity, but what happens over time is the actual activities may stop mattering, and all that really matters is they're able to keep fundraising, right?

Because they're just trying to figure out a justification to keep going back to donors to get more and more money out of them.

That's what perpetuates the organization.”

Chamath:

“ Why wouldn't the Southern Poverty Law Center focus on southern poverty? Which is an issue that actually still exists in some shape or form.

Why do you call it one thing, focus on racism, and then all of a sudden whip up fake racism?”

Sacks:

“I do think that at one time in this country, civil rights was a noble cause, a very legitimate cause.

We had the legacy of segregation and Jim Crow, and there were groups that were set up to basically change that, and they succeeded.

But again, no one in an NGO or a nonprofit ever declares victory.

When Obama got elected in 2008, regardless of whether you liked Obama or not, or agreed with his politics, I thought that at that point, most people could see that this was not a racist country.

Whatever else you could say, the fact that the highest office in the land was not denied to anybody showed that this country was not holding people back based on their skin color.

And instead of just basically packing up shop and saying, ‘Okay, we've achieved our goal,’ the goalposts all got moved.

Remember, that's when the whole anti-racism thing started, was around Obama's second term.

If they just said at that time, ‘You know what, we're going to move the goalposts from equality of opportunity to equality of results. We're going to basically make everyone equal at the finish line,’ which is to say, identity socialism.

People would've said, ‘Eh, no, we're not on board for that.’

So instead, they created this whole new terminology to justify it.

And it's taken us years to unpack that and realize what's really going on.

ADDED: SPLC creating the racism it was set up to fight.  

“Beijing’s message is clear: Hong Kong must shape up and speed up” | SCMP

There is the usual praise for the Hong Kong government and Chief Executive John Lee Ka-chiu's leadership. One striking difference is that Premier Li Qiang included in his annual work report, delivered at the opening session of the National People's Congress (NPC), a call on Hong Kong to improve its governance and align itself with the national plan. Li has made the central government's position clear: improve the city's governance and get with the programme already. [Link]

I don't like this. "National Plans"? That's for socialist economies. Top-down economies. Not capitalist ones like us here in Hong Kong.

I know there are many in the west, in capitalist economies, that are in love with similar things. Like "industrial policy". I'm not sure any has been hugely successful. 

Rather leave things to the genius of the market. Of the pricing mechanism. It's the market that’s really best at "shaking up". It’s the most successful of all systems in "speeding up". 

Remember how China sped up in the late 1970s? It wasn't by National Plans, but by releasing market forces. I was there when it happened.i saw it with mine own eyes. 

It's the market, baby!

Election results 2024. (And Bad Bunny’s halftime show at the NFL)

For the record. 2024 election results by ethnicity. 

 A record 54% of Latino Men voting for Trump is — we know this from exit polls— because they are against illegal immigration, even though they know the majority of illegals are Hispanic. Reason: the illegals take Latino working-class jobs and drive down wages. Fewer illegals => pressure for higher working class wages. Latinos living legally in the U.S. like ICE. They like illegals being deported. They support all that stuff that Dems are so busy telling us is horrible.

Bad Bunny's half time NFL show was Latinos cutting sugar cane, Latinos selling tacos from street carts. Was Latinas twerking their butts and Latinas pole dancing, like Ho's. Pretty demeaning stuff. 

Bad Bunny told us all at the recent Grammy’s that he loves illegals and hates ICE. 

How do Latinos in America, the legals, the citizens, view this? The opposite, I should think. Given their voting record. 

The Bad Bunny show would have been absolutely hammered if it'd come from a white band, like Kid Rock. It’s only not condescending and demeaning, one assumes, because Bad Bunny performed it, he being Puerto Rican and all….

All the half time show was in Spanish, even Lady Gaga. Which is a movement in the U.S. — to make Spanish the official tongue.

My take on the Spanish issue: The extent to which Spanish becomes the common language in America will be the extent to which the American economy stops performing. English is the world language; the international language. The lingua Franca. The language of trade, economy, education and science. It's good to have an international language and it's good for one’s people to speak it. Not to go backwards to making us understand each other less well. 

I speak here as someone whose mother tongue was Italian, who learned French and German as a kid, and Chinese as an adult. I'm pro learning languages, Spanish included. Just not as a lingua franca. 

So what are they NFL up to? If the average fan doesn’t like Bad Bunny, and even Latinos don’t, then why? 

Adam Carolla says it’s to sell the game worldwide. The game already has its American market locked up. Now let’s go for the international Brown market. Well good luck with that, as they seem to be losing the American market, the one they appear to believe is their rusted-on core. 

We shall see.

“Trump” on various Rabbits. Bad, Good and Nasty. (Funny). 

United States Allies remain United States Allies....

China aside, all other countries increased their 
holdings of US Treasuries in 2025

President Trump is the the World Economic Forum in Davos, where he apparently (we don't have details), ended up with some sort of deal agreed with NATO over US involvement in Greenland. 

This is -- of course!  -- being mocked on the likes of CNN. Whose latest go-to talking point is that "Allies are deserting the US, and making up with China". [E.G.]

Do tell. 

One of the best ways to measure just how much countries trust the United States, how much they trust any given administration, or any given set of economic circumstances in the United States, is how much money they have invested in US Treasuries. Since I learned to walk it's been one of the most quoted stats by the cognoscenti. "How are Treasuries doing?"

"Treasuries" just being the American name for US Government Bonds issued by the Treasury Department. Where they borrow your money, promise to pay you a certain amount of interest (the "Coupon") and to give you your Principal back at the end of the term. 

If the US economy is not trusted, countries will pull their money out of US Treasuries. If they don't like an administration, or how it's handling the economy, they'll pull money out of Treasuries. If countries Sell Treasuries, their price will go down, and the interest rate on the basis of that price will go up (because the Coupon remains the same)*. Hence the importance of the trend of Treasuries. They affect the overall creditworthiness of the US and of its short and long-term interest rates. 

So, now back to the reality of what the likes of CNN and other Trump-haters are saying. Which, to repeat, is along the lines of: "American allies hate what Trump is doing, they don't like his grab for Greenland, and are going to look elsewhere, like to China, for support and economic engagement. Meantime they're dumping their Treasuries, which will put upward pressure on US interest rates."

Well... no. 

The Treasuries tell a different story.

 U.S. Treasury International Capital (TIC) site (of the US Treasury Department) has a Table of the monthly Treasury holdings by country. I've taken out some of the main players and summarise them below to 2025, up to the latest, which is to end November 2025: 

Key points I notice: 

1. All countries except one, have increased their holdings of US Treasuries in the last year. On average by nearly 10%. 

2.  China is that one country that has reduced its holdings in the same period, by 10%. 

3. Overall, countries, including all US Allies, have increased their holdings, by a total of $US 738 Billion. 

4. Japan and the United Kingdom have always been, and remain, the largest holders of US Treasuries. All US allies have substantial holdings of Treasuries. 

5.  Denmark, suzerain of Greenland, holds only $10 B in Treasuries, while the bottom of the Top Twenty chart above, Israel has $107 B, ten times more. So, Denmark threatening to sell down its holdings, is, as Treasury Secretary Scott Bessent said, “irrelevant”. 

6.  China has not just recently started to reduce its US Treasuries holdings. It has done so since it reached its highest holdings in 2013, in the middle of the Obama presidency:

The only time China holdings went up since 2013
was during the Trump first administration

China's reduction of US Treasuries beginning in 2013 was signalled a the time. I remember it. It correlates closely with the arrival of Xi Jinping to the leadership in 2012. Xi is temperamentally anti-west (See "Document 9"), pro China's self-reliance, pro finding investments for its massive surpluses other than buying the "World's safest investment", US Treasury Bonds. 

In short, there's no evidence, from the holdings of US Treasuries, that US allies are upset by Trump's agressive moves like his one on Greenland. 

And the China divestment has been going on for over a decade.

 

==============================

* The inverse relationship between Bond Prices and Interest Rates: 

One of the first things I learned in Economics 101, in 1969. 

When Bond prices go up, interest rates go down.

When Bond prices go down, interest rates go up. 

EG: There's a Bond issued with a price of $100 and a Coupon of 5%. That means you pay $100 for the Bond and you get paid $5 every year. i.e. 5%.

If the price of the Bond goes down in the secondary market, to, say, $90, the Coupon remains 5% (it never changes), and so the buyer of that Bond, paying just $90, would still get the $5 every year for which he has paid only $90.  $5 divided by $90 = 0.0556, or 5.56%. 

"Massive Somali Fraud in Minnesota..." | All-in Podcast

 

The All-in Podcast bros, the "besties": Jason Calecanis; Chamath; David Sacks; David Friedman. Talk about Nick Shirley, the exposer of Minnesota Somali fraud. And more. 

There's a lot that's disturbing and worrying on this video, a record of the thinking of some of the brightest minds in tech America. They worry about the viability of America if states continue on the California-type line, of ever increasing taxes to fund ever more far-left causes. But also.. we now know... to fund so much fraud, in the "Charity Industrial Complex", aka the "NGO Industrial Complex". 

And we end up thinking: THAT's why they hated it, the Dems and TDS people, back in Feb-March, when Elon Musk pursued DOGE, tried to cut off clearly fraudulent or wasteful spending of government charitaable funds. Because it was all -- and remains all -- a huge money laundering operation. 

And yet.. if the amount of fraud were stopped in its tracks, it's likely that the US could cut its annual deficit to zero. That would surely help with the viability of America.  A country with over $US 37 Trillion on debt. 

But the Dems don't want that. Because the money is too good. 

Shame. 

See also: "The basic canon of Arab life"

Is it better to own property direct or indirect via a REIT?

We have properties here in Hong Kong. Which we rent out. That's us owning property direct. It's been pretty good for the best part of two decades. But recently, I calculated that it would be better, for us, to own property INdirect. That is, via a fund of properties, like the REITS, which are Real Estate Investment Trusts. These invest in a portfolio of properties and divide up the net rental returns, after taking a management fee, between all the share owners. 

I calculated that it would be better to own property INdirect: 

(1) Easier. Less hassle

(2) More money. About $HK 1 million more per year.

This is not accepted by my partner in all this. 

I asked Grok. 

Look at hong kong property. Compare owning of apartments direct, leasing them out to ordinary people. Compare that with putting the same amount of money into a REIT, like the LINK Reit. Compare for the period 2008 to 2025. Compare CAGR and ROI (Net rent divided by value of the property).  

Tell me if you think it would have been better to invest in property direct, or in property indirect, like in a REIT.

Here's the answer. 

Direct Ownership of Residential Apartments (Buy and Lease Out) vs. Investing in Link REIT (2008–2025)To compare these two approaches over the period from the start of 2008 to the end of 2025 (approximately 18 years), we focus on key metrics: CAGR (Compound Annual Growth Rate of total return, including capital appreciation and income) and net rental yield (net rent as a percentage of property value, averaged or representative over the period).Note: Direct residential ownership involves buying apartments and renting them to ordinary tenants. Link REIT (0823.HK) is primarily a retail-focused REIT (shopping malls, car parks, some office/logistics), not residential, so it's an indirect property investment but in a different sector. This is an apples-to-oranges comparison in asset type, but as requested.1. Direct Residential Property Ownership (Buy-to-Let)

• Price Appreciation:
  • Hong Kong residential prices rose dramatically from 2008–2013 (~+134%).
  • Peaked around 2021 (BIS index ~263 vs. base periods).
  • Then declined sharply due to high interest rates, economic pressures, and policy changes: ~25–30% drop from 2021 peak by mid-2025, with ongoing year-on-year declines (e.g., -7.76% y-o-y in Q1 2025).
  • Overall from 2008 to 2025: Strong gains early, but recent corrections mean net appreciation is positive but moderated. Estimated total capital growth: ~150–200% (rough, based on index from low post-GFC to current levels around 190–200 on various bases like BIS 2010=100 or RVD 1999=100 equivalents).
• CAGR (Capital Only): ~5–7% annually.
• Rental Income:
  • Rents followed prices upward but with less volatility and lagged during downturns.
  • Gross rental yields have been consistently low in Hong Kong: Averaged ~3–4% over the period, recently ~3.9% (Q2 2025), with ranges 2.4–4.99% depending on size/location.
  • Net yield (after management fees, maintenance, vacancy, rates/taxes, but before financing costs): Typically ~2–3% (gross minus ~1% costs).
• Total Return CAGR (capital + reinvested net rent): Estimated 7–9% annually, driven mostly by early appreciation. Recent years have lower/negative capital returns, dragging overall performance.
• ROI as Net Rent / Property Value: Average ~2.5% annually (varying from ~2% in high-price periods to ~4% recently as prices fell faster than rents).

Challenges: High transaction costs (stamp duties), leverage risks (many use mortgages, amplified losses in downturns), management hassle, vacancy risks, and illiquidity.2. Investing in Link REIT (Indirect via Retail-Focused REIT)

• Price Appreciation:
  • IPO in 2005; from 2008 lows (post-GFC dip to HK$0.65 adjusted) to 2025 prices (HK$35–42 range in recent data).
  • Peak 2019 (HK$89–90).
  • Recent declines due to retail challenges (post-COVID, mainland competition, negative reversions).
  • Overall capital growth from 2008–2025: Positive but lower than residential peak-to-trough swings.
• CAGR (Capital Only): ~4–6% annually.
• Distribution Income (DPU):
  • Consistent growth historically (e.g., from ~HK$1.8 in mid-2010s to peaks ~HK$2.7–3).
  • Yield typically 5–7% (higher than residential due to commercial efficiencies and mandatory 90%+ payout).
  • Recent: Some declines (e.g., -5.9% in H1 FY2026), but resilient with diversification (China, Australia, etc.).
• Total Return CAGR (price appreciation + reinvested distributions): Estimated 8–10% annually over long periods (since IPO ~10–12% in some analyses, adjusted down post-2019). Link has delivered stable income even during property downturns, outperforming direct in volatile periods due to professional management and diversification.

Advantages: Liquidity, diversification (portfolio of 150+ assets), no management hassle, higher yields.Comparison Summary

Metric	Direct Residential (Buy-to-Let)	Link REIT (Indirect Retail)
Total CAGR (2008–2025)	~7–9% (strong early gains, recent drag)	~8–10% (steadier, income-driven)
Net Rental/Distribution Yield (Avg.)	~2–3% (low due to high prices)	~5–7% (higher efficiency)
Volatility	High (price swings, leverage risks)	Medium (stock-like, but income buffer)
Key Driver	Capital appreciation (boom-bust)	Consistent distributions + moderate growth

Conclusion: Which Was Better?Over 2008–2025, investing in Link REIT (indirect via REIT) would likely have been better overall for most investors.

• It provided higher and more consistent income yields.
• Total returns were comparable or slightly superior, with lower hassle and risk (no single-property exposure, professional management).
• Direct residential benefited hugely from the 2009–2021 bull run but suffered sharp corrections recently, compressing yields and eroding gains for late entrants or leveraged buyers.

If you were unleveraged and held through the full period, direct might edge on capital gains—but factoring in costs, time, and recent performance, Link REIT offered a superior risk-adjusted return. For pure residential exposure, direct ownership captured the boom better early on, but REITs like Link provided smoother, more passive returns.This is based on aggregated historical data; individual results vary by timing, location, and leverage. If you'd like more precise calculations with specific indices or assumptions, let me know!