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Friday's Fast Five: Week of 6.23

The Curious Incident of the Elevated Profit Margins (Advisor Perspectives): This is the first in a series of papers that seeks to explore why U.S. profit margins have remained elevated for the last 10 or so years compared to history. It transpires that fiscal deficits have been the culprit. Between 1950 and 2011, the fiscal deficit averaged just less than 3% of GNP each year. In the period from 2012 to 2022, the fiscal deficit was more than double the previous average, at 6.6%.

EV Makers Confront the ‘Nickel Pickle’ (The Wall Street Journal): Large amounts of the mineral are needed for electric car batteries, but getting it out of the ground and refining it often requires clearing rainforests and generating large amounts of carbon.

Hamish Harding, an Explorer Who Knew No Bounds, Dies at 58 (The New York Times): An aviation tycoon who pushed the limits, he went to the depths of the ocean and the blackness of space before his fateful dive to the Titanic on Sunday. Despite a life of dramatic quests that seemed drawn from boys’ adventure books, Mr. Harding was by nature “an explorer, not a thrill seeker[...]"

U.S. Allocators Grapple With the Risks of Investing in China (Institutional Investor): Opting out of investing in the region could help them avoid the kind of write-downs that some asset owners were forced to take amid Russia’s invasion of Ukraine. But if that tail risk never comes to fruition, they may also miss out on opportunities to reap the benefits of investing in such a massive market.

Europeans Take a Major Step Toward Regulating A.I. (The New York Times): The European Parliament, a main legislative branch of the European Union, passed a draft law known as the A.I. Act, which would put new restrictions on what are seen as the technology’s riskiest uses. It would severely curtail uses of facial recognition software, while requiring makers of A.I. systems like the ChatGPT chatbot to disclose more about the data used to create their programs.