November recommended reads

Absolutely incredible long profile of MBS, Saudi Arabia’s de facto king. He’s like Kim Jong Un, but much richer, and actually driving significant change. Significant to whom, is the question

https://www.theatlantic.com/magazine/archive/2022/04/mohammed-bin-salman-saudi-arabia-palace-interview/622822

MBS rebuked me when I called this attitude “moderate Islam,” though his own government champions the concept on its websites. “That term would make terrorists and extremists happy.” It suggests that “we in Saudi Arabia and other Muslim countries are changing Islam into something new, which is not true,” he said. “We are going back to the core, back to pure Islam” as practiced by Muhammad and his four successors. “These teachings of the Prophet and the four caliphs—they were amazing. They were perfect.”

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A great newsletter on global affairs through the lens of finance and macroeconomics. Adam Tooze’s output is astounding.

https://adamtooze.substack.com/p/chartbook-174-finance-and-the-polycrisis

The effect of US financial shocks on really large economies like China is relatively muted. So too for France and, surprisingly, the UK. But Germany feels American shocks heavily, as heavily, indeed, as Canada and almost as heavily as Mexico.

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Another great newsletter, this one on all things China, through local (Mandarin Chinese) news sources.

https://sinocism.com/p/protests-covid-xis-diplomacy-national

Since the start of the pandemic China has had several waves of massive outpourings of online anger, especially around the death of Dr. Li Wenliang, the Shanghai lockdown disaster and the Guizhou bus tragedy. But that virtual anger about Covid policies and censorship, among other things, did not cross into real world protests. Until the last few days, as people gathered publicly to express their anger and frustration in Shanghai, Beijing, Wuhan and other cities, and at many college campuses around the country.

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More on Mr. Beast and his incredible business success. Willy Wonka self-promo + Walt Disney ambition. He doesn’t capture, he IS the zeitgeist

https://www.shopify.com/blog/mrbeast-business-backstory

In the earlier days of his channel, Jimmy would spend all day on Skype analyzing videos with other aspiring YouTubers. They called their group Daily Masterminds. From 7 a.m. until 10 p.m., they would break down the anatomy of each other’s videos, study popular YouTubers, and brainstorm ideas. Jimmy credits these group calls with helping him perfect his craft and intricately understand his audience.

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Gambling gray markets + regulatory arbitrage + people desperate for economic opportunity

https://restofworld.org/2022/cambodias-scam-mills/

Linh Ne came to Bavet in 2021 at 17 years old, she said, accepting a typist job through Facebook. To cross the border, she pushed through forested areas and waded through a ditch filled with waist-high water; only on arrival did she realize she’d been recruited to a scam company that emulated the shopping platform Tiki. Her employers asked her to defraud Vietnamese shoppers, and she said that when she refused, they starved her. She was sold after two weeks to a second company conducting a romance scam, where her boss gave her a guide to manipulate clients.

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A weekly newsletter with an insider’s view of crypto news

https://page1.substack.com/p/round-tripping-677

The same relative level of energy and emotion that occurs in bull markets, has to then be inversely mirrored in bear markets for finality to occur…perhaps crypto is slowly becoming contrarian again…there will be aftershocks in the market and likely some final contagion…crypto did not need a bailout here, bad actors failed and will be punished…we have no doubt a recomposition will occur and narratives will shift again in time…’this too shall pass

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Semiconductors = the oil of the metaverse

https://www.zerohedge.com/economics/2020-most-traded-global-good-was-not-crude-oil-semiconductors

Since 2015, semiconductors have taken the top rank for the most traded good, representing 15% of total global goods trade

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I read this once every few months. I love articles that completely change your view on a topic you *thought* you understood. If you want to *actually* understand proof of work, this is a must read

https://grisha.org/blog/2018/01/23/explaining-proof-of-work

And there is the crux of it: The difficulty in finding a conforming hash acts as a clock. A universal clock, if you will, because there is only one such clock in the universe, and thus there is nothing to sync and anyone can “look” at it. It doesn’t matter that this clock is imprecise. What matters is that it is the same clock for everyone and that the state of the chain can be tied unambiguously to the ticks of this clock.

Recent interesting quotes: “Trust your instincts. Don’t think, just do.” – Tom Cruise in Top Gun

If we want everything to remain as it is, everything must change. – Giuseppe Tomasi di Lampedusa

Trust your instincts. Don’t think, just do. – Tom Cruise in Top Gun: Maverick

A true believer, that one. There are few things so dangerous in a man as lack of doubt – from God of War

Today Jack (Nicklaus) plays such sensational golf with such apparent ease that many people who watch him probably gain the impression that his skills are heaven-sent rather than self-developed. That isn’t true. No one ever worked harder at golf than Nicklaus during his teens and early twenties. At the age of ten, in his first year of golf, Jack must have averaged three hundred practice shots and at least eighteen holes of play daily. In later years, he would often hit double that number of practice shots and play thirty-six — even fifty-four — holes of golf a day during the summer. I have seen him practice for hours in rain, violent winds, snow, intense heat — nothing would keep him away from golf. Even a slight case of polio failed to prevent him from turning up for a golf match.

Excellence is the capacity to take pain – Four Seasons founder

I think I could potentially train harder, because you wanna be as close as possible to being injured, without actually being injured. And I haven’t pushed it as far as being injured yet, so, maybe I haven’t pushed it enough. – Magnus Mitdbo

The reality is that everyone is a basket case on the inside. Some people just hide it better. Find me a normal person and I’ll show you someone you don’t know that well. – Scott Adams

One lesson I’ve learned is that if the job I do were easy, I wouldn’t derive so much satisfaction from it. The thrill of winning is in direct proportion to the effort I put in before. I also know, from long experience, that if you make an effort in training when you don’t especially feel like making it, the payoff is that you will win games when you are not feeling your best. That is how you win championships, that is what separates the great player from the merely good player. The difference lies in how well you’ve prepared. – Nadal

From the seed-bed
The Dharma raises flowers.
Yet there is no seed
Nor are there flowers.

Ser Otto Hightower : And yet I’ve never seen that side of you, my daughter. I even doubted its existence.
Queen Alicent Hightower : It was an ugly thing. I regret it.
Ser Otto Hightower : We play an ugly game. And now, for the first time, I see that you have the determination to win it.

Happiness is a perfume you cannot pour on others without getting some on yourself.

As you start to walk on the way, the way appears. – Rumi

The financial casino isn’t over; The financial casino will only grow

The explosion of risk assets during covid was but an amuse bouche for what is going to happen this decade and probably beyond.

GME and Dogecoin and Rolexes and Air Jordans were just a precursor for a world where just about every imaginable asset (of *some* value and duration) has a real-time price and is traded on a global digital marketplace. This will include trading of people (their income streams, anyway), memes, all forms of property, prediction markets, and much more.

The financial casino isn’t over. It’s still in the early innings. Everyone is becoming an investor, and they have no choice.

Some trends driving this:

1. Given the enormous debt and lack of real (productivity driven) growth constraining the world’s richest nations (especially the US), currency debasement is the only practicable long-term political choice; thus, the money printers will continue to brr brr, and probably at an accelerating rate. Liquidity won’t be the problem; capturing and retaining real value will be

2. Software is steadily creating digital representations of all physical assets; once digitalized, these assets are easily financialized, securitized, traded, whatever. Trust isn’t the issue here, since physical assets ultimately derive legitimacy from the meat world of local governments and law enforcement

3. Blockchain (encompassing NFTs and tokens) is creating trustworthy representations of all digital assets. And as is pretty clear from what’s happening in cryptos thus far, the financialization of these assets will blow peoples’ minds. These digital assets will explode in quantity and aggregate value as the world increasingly moves its economic, political, and social activity onto the digital layer (ie the metaverse)

So we’ve established that there will be a lot more capital in the system (1). There will be a lot more assets (2 and 3). The arena will become increasingly global (despite all this recent talk of de-globalization which largely benefits conservative politicians and onshore industries, aggregate human self-interest will win out eventually and that is towards a better, faster, and cheaper global marketplace). And all of this will be enabled and accelerated by software and digitization.

Yes I sound like an off rocker tech permabull. I’ve also placed my bets accordingly.

There’s a lot more to write about here, mostly downstream effects of (1), such as widening income inequality and sustained real inflation (due to financial repression) growing the number of have-nots, and forcing those have-nots to make ever riskier financial choices.

I’ve been on cold medicine for the past few days and my head is foggy so there may be more nonsense here than usual, and as before, these thoughts are worth what you’re paying for them

cheers I love you

Incredible story of Legoland Korea and financial contagion

In short, a local government built an unprofitable Legoland, said local governor threatened not to repay the loans, and now the entire Korean municipal + corporate bond market is at risk.

Source: https://foreignpolicy.com/2022/11/10/legoland-south-korea-bond-market-crisis/

But the fallout is not limited to local government bonds; it impacts the whole of South Korea’s bond market, worth more than $2 trillion. Corporate bonds are considered less safe than local government bonds. If few buyers are brave enough to buy local government bonds under these conditions, even fewer buyers can muster enough courage to buy corporate bonds. One of the safest corporate bonds in South Korea is issued by Korea Electric Power Corp. (KEPCO). The returns for KEPCO’s three-year bond had climbed from 2.184 percent to 5.825 percent since the beginning of this year. But in its latest issuance, the KEPCO three-year bond worth 200 billion won (about $146 million) could not find a buyer.

And

To prevent the credit market from seizing up completely, the South Korean government stepped in by providing a liquidity facility of more than 50 trillion won (about $35 billion). The Bank of Korea also injected 42.5 trillion won (about $31 billion) to stabilize the short-term bond market, and South Korea’s five largest banks also pledged to provide up to 95 trillion won (about $67 billion) in liquidity. There is an absurdist quality to these measures: On the one hand, the Bank of Korea has been aggressively raising the benchmark interest rate to curb inflation by reducing liquidity, but on the other hand, the South Korean government is injecting liquidity to the market to stave off a total economic collapse.

Podcast notes – philosopher Simone Weil on attention, human dignity, and factory work

“philosopher simone weil teaching a class of students under a big tree, photorealistic, renaissance art style”

Link to episode: https://philosophizethis.libsyn.com/episode-172-simone-weil-attention

Podcast: Philosophize This!
Topic: Simone Weil (SW)

1928 – Simone accepted to Ecole Normal Superior – Sartre, Derrida, Foucault
One of 11 in her class, only woman
Scored highest marks – second was Simone de Beauvoir

SW tried to live by the values she espoused – a living philosophy
Died at 34 from tuberculosis, arguably from hunger bc she wouldn’t accept more food due to the widespread famine

As a teen, taught herself Sanskrit so she could read Bhagavad Gita

Camus said she was “the only great spirit of our time”

Importance of attention, the ethics of attention
The quality of attention dictates every experience that you have

Different experience of everything you do is available to you – depending on how you choose to pay attention
ONLY if you’re open to receiving it

Most people fall into default state of attention – based on biology and habits

School education – one of first places we learn to pay attention

After graduation, SW gets a job teaching, unique style
Her class would sit under a tree and just think about new problems in a field (eg, geometry)
Encouraged students to think openly and creatively

For complex problems, by default, people search for answers, and settle into incomplete answers, and then it’s about defending your position and finding people who just agree with you
Hardest job of teaching is to change this collectivist way of thinking

Instead, accept that everything you believe is a partial truth, seek new experiences, without agenda

Our thought should be empty, open, not seeking, ready to receive

Concept of “passive activity”
Strike a balance between completely passive and completely in control / aggressive activity
Middle path – put in effort, but remove your personal prejudices, detached from your self

“The great human error is to reason in place of finding out”

She could’ve lived a very comfortable life, but chooses adventure / new experience
Went to the trenches, joined front of Spanish Civil War, lies and says she’s a journalist! Despite being far sighted
Act of courage based on moral conviction
Accidentally steps into pot of boiling oil, scalded badly

Quit job as a teacher
For months, she does physical labor in an auto factory to better understand the working class / worker life
Learns that the main priority of these jobs is the “quota”, the output – matters more than the people
Impossible for these workers to think about other stuff – must meet quota
Thinking is the first thing to go
Means to an end for someone else’s economic goal
Made into a modern day slave / robot
Zero connection to what you’re producing

Concludes that the biggest thing these factories produce (in workers) is affliction, a spiritual malaise
Affliction is when people are transformed from human begins into things – and they’re incapable of thinking their way out of this stuck place of existence

Force is to humans as gravity is to physical world – what makes things happen
Power itself isn’t the problem; the problem is the “pursuit of power”, in this pursuit people will be turned by others into instruments

As remedy, could focus on Political change vs. Spiritual change

All it takes is one person to see things differently to inspire change in others

Suspend your own personal agenda, see others as they are