Weekend Reading #55

Photo by freddie marriage on Unsplash

This is the fifty-fifth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 15th February 2020. To receive a copy each week directly into your inbox, sign up here.

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What we're doing.

This week was massive for us.

We finally received approval from our compliance advisors to launch our 3BC platform, which aims to connect professional investors in our network across the world to private opportunities. The back end is looking good and we are excited to get going. We will be in touch with more details about the launch as well as the deals we will have live from launch date.

Also we completed the gargantuan task of preparing the PPM (private placement memorandum) for our Emerging Opportunities Hedge Fund. We will have the subscription documents available shortly as we aim to launch as soon as we can. 

We are actively engaging in discussions with strategic partners in both of these areas. If you think you’re relevant and may want to explore partnering with us on these strands of our business (or any other opportunities for that matter), please get in touch as we begin the next phase of scaling our business.

What we're reading.

This brilliant piece in the FT from Janan Ganesh – really sums it up for us. As Ganesh observes, “It takes minimal life experience to know that happiness comes from a small number of disproportionately important things. Perhaps as few as two. One is a fulfilling job. The other is a vital private life.”

This might seem intuitive, but science backs it up. In 1938, scientists began tracking the health of 268 Harvard sophomores, seeking clues to the secret of healthy and happy lives. 80 years later, one of the world’s longest studies of adult life has collected a cornucopia of data on physical and mental health, and the results are clear – it’s not money, or fame, that keeps people happy throughout their lives. Rather, it’s close relationships. These protect people from life’s discontents, help to delay mental and physical decline, and are better predictors of long and happy lives than social class, IQ, or even genes.

In their book “Good Economics for Hard Times,” two winners of the 2019 Nobel Prize in Economics, Abhijit Banerjee and Esther Duflo, point out that a larger GDP doesn’t necessarily mean a rise in human well-being, especially if it isn’t distributed equitably. They go on to argue that the pursuit of it can sometimes be counterproductive. This article in The New Yorker expands on this theme by asking a big question – can we have prosperity without growth? Once confined to the margins, the ecological critique of economic growth is now gaining more widespread attention. The so-called “degrowth” movement even has its own journals and conferences. Whether you strongly agree with it, or find it detestable, it’s becoming a narrative. Which means that investors avoid it at their peril.

This week the Greek 10-year benchmark bond fell to below 1% for the first time. That's down from 30% at the height of the financial crisis! The FT quoted BlueBay Asset Management's CIO Mark Dowding as saying that the rally in greek bonds is "an opportunity for an active manager like us because index trackers will be obliged to buy bonds off us no matter how ridiculous the price". Look no further for evidence of the strange influence of passive management on markets. It's all greek to us.
 
The Washington Post published a breathtaking piece on “How the CIA used Crypto AG encryption devices to spy on countries for decades”. It’s paywalled, but you can get the gist of the story from this bare bones write-up on the BBC’s website. To cut a long story very short, it seems that US and German intelligence services secretly gathered the classified communications of governments for decades through secret control of an encryption company – Swiss firm Crypto AG. This really is the stuff of Netflix!

And for those of you looking for proper crypto fix and all bulled up by the spectacular rally in Ethereum, check out this note on “The trillion dollar case for ETH”. It’s a thought exercise on the implications of trustless economic bandwidth and its importance within a trustless economy. Like any thought experiment, the exact numbers should be taken with a pinch of salt – but it paints a vibrant picture of a possible future of decentralized finance.

What we're watching.

This is a must watch. Eurasia Group’s Ian Bremmer (still the go-to expert on the dynamic linkage between geopolitics and markets) sits down with former White House Chief Strategist and 2016 Trump campaign architect, Steve Bannon to talk impeachment acquittal, the 2020 election, and why the U.S. should be much (much) more worried about China. 

We watched bits of the Academy awards and to be honest, it was boring. Matthew Ball, whom we often turn to for views on the entertainment space, has this Twitter thread in which he reiterates his view that while the entertainment industry has been turned on its head over the past decade or so, the Academy Awards remain an anachronism – dull, linear and static. There is so much opportunity to create a truly global and interactive event, but the Academy remains resistant to any change.