2023 in review
Up and to the right
Figure 1: AI interpretation of man riding rocket in style of dr Strangelove
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To evaluate 2023, lets take the perspective of a historian sitting fifty years in the future. Whats important? Well in the last 300 years, humanity has been on an absolute tear. In the 2.5 million years before that? Not so much.
Figure 2: Population growth through human history
Humans still have much of the same genetic code of Neanderthals hundreds of thousands of years ago so we still did some stupid stuff in 2023. But did we continue making exponential progress? Absolutely. And if anything, that progress accelerated.
How Ad Astra did in 2023
Topically, as the possessor of 5% Neanderthal DNA (per 23 and Me), your humble editor exceeded the rock-bottom, paleolithic expectations of his genetic code in the Ad Astra 2023 forecast. In 2023, we gave guidance in 4 areas:
1) the US economy, 2) the New Cold War, 3) global energy and 4) the media transition
Recalling late-2022, 85% of economists[i] said a recession was coming in 2023. As the year played out, despite structural inequality and high prices, the economy has exceeded all expectations. We said then:
really smart people disagree on the prospects for the US economy in 2023. Anyone who says they know whats going to happen is full of it
That ended up being good guidance.
Regarding the New Cold War between the US and China, we said to watch three areas:
There will be three main theaters where proxy forces duke it out: 1) the China Wars, 2) Soviet Union Aftershocks, and 3) the post-American Mideast
The China Wars: The US enacted more semiconductor and investment bans on China, continued to sell weapons to its allies in the region, and kept encircling the country with an anti-China alliance network. Meanwhile, states like Japan, South Korea, and Australia rearmed. Various states had disputes with China in the South China Sea. The region is a powder keg bursting with arms, people, and the fastest growing economies in the world. Its only a matter of time before all that pressure relieves itself through war.
Soviet Union Aftershocks: A hot war continued between Russia and Ukraine and a war broke out between Armenia and Azerbaijan.
Post-American Mideast: A major war broke out in Israel, with attacks across the region and against commercial ships in the Red Sea. Equally stunning was a China-brokered peace between blood rivals Saudi Arabia and Iran.
Regarding global energy, we said:
In 2023, there will be two stories in global energy. The first is the energy transition i.e. the adoption of green-tech like wind and solar. This story is overblown, but will be important at the margins. Countries may compete over green-tech supply chains and access to rare earth metals, lithium, and the other raw materials necessary for a decarbonized economy.
The other story will be of the out-of-fashion but essential fossil fuels that power the modern economy. To illustrate this point, we will use more oil in 2023 than weve ever used in human history.
That was a good forecast, as the US set an all-time oil production record at over 13 million barrels/day[ii] powered by shale oil and the world used 101.9 million barrels/day[iii], the most ever.
Finally, regarding the media transition, trust in media continued to plummet, falling 2 additional points in 2023 to 32%[iv]
fueling the growth of podcasts and independent journalism on places like Substack. This trend will continue in 2023 and accelerate with the release of the Twitter Files, which show that the US Government conspired with the big technology companies to shape public opinion.
Figure 3: Declining trust in media
In 2023, #twitterfiles documents supported Missouri v. Biden over the First Amendment, which the government lost in federal district court. The federal government was enjoined from colluding with social media companies. The Fifth Circuit Court of Appeals upheld the ruling and the Supreme Court will hear the governments appeal in its 2023-2024 term.
The age of AI
The reader may be asking now that youre done gloating, what else happened in 2023?
In perhaps the greatest technological innovation since the printing press (1440 AD), AI continued its exponential development. ChatGPT was released in November 2022, and by January 2023 hit 100 million users, the fastest growing consumer app of all-time[v]. Since then, its progress has been compounding, with giant search browsers like Google and Bing including AI in their search engines, AI-chipmakers like Nvidia failing to keep up with soaring demand, and Silicon Valley startups adding -AI to their company names to raise millions.
But all of this innovation hasnt just been in consumer tech. AI is also being used to make better weather forecasts, discover new drugs, and synthesize new materials.
Ozempic
From the perspective of a historian looking back, the development of birth control was among the most significant technological breakthroughs of the 20th century. Looking forward, rising medical costs threaten the balance sheets of most of the developed world (the US spends 20%+ of its GDP on healthcare), an issue that will be exacerbated in the 21st century by aging populations. Chronic conditions like heart disease, strokes, diabetes, and dementia are among the greatest burdens on the healthcare sector and are all associated with obesity.
In 2023, a class of weight-loss drugs called GLP-1 agonists, the most recognizable being Ozempic, attained widespread adoption. A two-hundred-pound person might easily lose thirty pounds on the medication. People who had struggled to lose weight since childhood suddenly could.[vi] Though initially approved for weight-loss, the drugs promise to reduce the costs of chronic disease on the healthcare sector.
Novo Nordisk, the maker of Ozempic and Wegovy (another GLP-1), was responsible for nearly all of its home country Denmarks economic growth in 2023[vii]. Anti-GLP-1 Big Snack stocks lost billions in market value. Sales of GLP-1 medications reached $6 billion in 2023, according to Bloomberg. Goldman Sachs estimate the industry could be worth $100 billion by 2030. Morgan Stanley estimates that 24 million people, or 7% of the US population, will be using the drugs by 2035.[viii]
Ad Astra Person of the Year
The US military plans to buy 2,456 F-35s by 2044[ix]. At around $100 million each[x], the program is the most expensive weapons system ever built[xi]. But before taxpayers question the expense, they must know that the F-35 is the most advanced fighter ever made, achieving a top speed of Mach 1.6, air superiority against all opponents, and most importantly, achieving a level of stealth that renders the plane as a hummingbird on enemy radar.
Figure 4: Lockheed Martin F-22A Lightning II
But therein lay the problem: the stealth technology can be a double-edged sword and in September, the US Marines lost and could not find an F-35 near Charleston, South Carolina.
Enter Randolph White. Mr. White found the missing stealth jet while shaving at his home in rural South Carolina.
Congratulations Randolph White, youre the Ad Astra Person of the Year.
[ii] https://www.forbes.com/sites/rrapier/2023/12/15/us-producers-have-broken-the-annual-oil-production-record/?sh=212ec9e26cc6
[iii] https://www.statista.com/statistics/271823/global-crude-oil-demand/
[iv] Gallup
[v] https://www.reuters.com/technology/chatgpt-sets-record-fastest-growing-user-base-analyst-note-2023-02-01/
[vi] https://www.newyorker.com/culture/2023-in-review/the-year-of-ozempic
[vii] https://www.newyorker.com/culture/2023-in-review/the-year-of-ozempic
[viii] https://www.ig.com/au/news-and-trade-ideas/macro-intelligence--wegovy--ozempic-and-mounjaro-transform-obesi-231115
[ix] https://en.wikipedia.org/wiki/Lockheed_Martin_F-35_Lightning_II
[x] https://www.cnn.com/2023/09/18/politics/f-35-missing-jet-what-matters/index.html
[xi] https://www.gao.gov/products/gao-23-106047
