Weekend Reading #240

This is the two-hundred-and-fortieth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 21st October 2023

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What we’re thinking. 

Markets continue to whipsaw with the price action looking grim. Nowhere has really escaped the selling. The problem is that it doesn’t look great even from here. Another reminder that sometimes it’s best to reduce risk or sit it out. Opportunities will present themselves.

Speaking of opportunities presenting themselves, a topic that has come up recently in conversations that we've had is that of credit being withheld/withdrawn from industries that banks deem "unethical" or non-ESG, typically in sectors such as coal and oil. We increasingly hear of businesses in the space effectively being starved of simple working capital just because of what they do, with banks telling them that they need to "diversify" and "go green" otherwise they won't be able to get credit. The entire notion of commercial banks - who should be risk managers and providers of capital with respect to financial risk - starting to tell business owners how to do their business is absolutely ridiculous, if not irresponsible. Is it just a polite way of saying to no to clients? Perhaps, although that would be shirking fiduciary responsibility to their shareholders since this is very standard (and profitable) trade financing. On the flipside, this opens up an opportunity for alternative sources of capital to fill the gap. One man's meat quite literally turning out to be another man's poison.

What we’re doing. 

I spent last weekend in the countryside in a little coastal village called Orford in rural Suffolk. This weekend away with some friends was a much needed relax and provided a great opportunity for a digital detox given the village’s lack of mobile reception. In the mornings, I started the day with a freezing jump into the sea off the end of the local sailing club’s pontoon before heading into the village square to stock up on supplies at the local producer's market. We were fortunate to have the last of the warm weather with shorts weather throughout. A real shocker for mid-October in the UK! Other highlights included the smoked fish bar at the beach, and watching two of the rugby World Cup quarter final matches from the local pub. There were many pints enjoyed, and perhaps some of the best beer battered fish and chips I’ve had. HS

As I write this now, I’m sitting on a flight to Istanbul. Unfortunately, my layover is just a couple of hours and so I won’t have enough time to go out into the city, but you can be rest assured I will be enjoying some delicious Turkish food from within the confines of the departure terminal. HS

Last week I was in Dubai for a couple of meetings, and it was quite an interesting experience given it was my first time there. I’d long heard about the gigantic buildings, including the famous (or infamous?) Burj Khalifa, and the entire idea of a city that was simultaneously a coastal one (off the coast of the Arabian Gulf) and essentially a desert was always a bit of a paradox. I’d long heard about the UAE, but the closest I’d ever been to it was transiting through Doha on Qatar Airways. Additionally, Dubai also has its reputation as a financial hub in the Middle East, complete with its reputation for the ostentatious – including, according to the legends, Lambo police cars.

Seeing it for the first time was interesting to say the least. For one, I didn’t spot any police Lamborghinis, and while the jungle of steel and glass buildings could be said to be similar to London, New York or Singapore, there was a very different feel to Dubai, and I’m not sure it’s a feel that’s likeable. The Burj Khalifa was impressive in its architecture, the water fountain show accompanied by music made for nice pictures (what more flex could one have than spraying water into the air in a desert?) and Dubai Mall was so huge that I clocked in my 11k steps for the day just going in, getting lost and trying to get out. Food was very international, perhaps too international, with every chain under the sun from Din Tai Fung to Five Guys available.

Dubai I think stands as a shining example of what you get when sheer willpower and financial capital faces off against a naturally hostile environment: nature can be tamed (to some extent), and Dubai’s skyscrapers and megamalls attest to that.

All that said, while some may claim to love Dubai, with families happily moving there for eternal sunshine, for me, Dubai gets filed into the “would go for work, but only if necessary” section of the travel planning notebook. EL

I was in Cape Town this week. As always friends and family alike legitimately complain about the direction of the country but as I am these days a visitor, I can simply enjoy all its delights without the accompanying baggage. The weather was beautiful, and we had the same spectacular sunsets I remember from my long university days on Clifton. As I sit here, I stumbled upon an article from Timeout listing Sea Point as one of the top 40 neighbourhoods in the world. Can’t argue with that! DC

What we’re reading

As the horror of last week's Hamas atrocities gets sadly diluted in the media by the simple passage of time and shift of attention, this week's disgraceful coverage of a tragic hospital explosion in Gaza showed how far media outlets like the New York Times and the BBC have fallen in the search for journalistic truth. This superb piece in The Free Press shows the diabolical reporting of the blast as the headlines were changed on the NYT website and it became clearer what unfolded. The problem is that inflammatory reporting like this creates a further spiral of hate and even though the surreptitious changing of the headlines happens, the damage is long done. So, so desperately sad.

I also flew through Adrian Tchaikovsky’s Arthur C. Clarke award winning book, Children of Time. It’s the first in his sci-fi trilogy and depicts a world where humans have destroyed earth and are traversing the universe looking for their new terraformed home. The only problem is that thousands of years earlier the terraformed experiment went wrong unbeknownst to its creator. Instead of seeding monkeys with a bespoke nanovirus to accelerate evolution as was thought, the virus reached the invertebrates, spawning a world of intelligent arthropods. Highly sophisticated spiders dominate the landscape. While they have been evolving, the last ship from earth has travelled the universe hosting a mass of humans and their offspring. It is genius world building and storytelling. The level of detail in the imagination required to build the spider civilisation is simply wonderful. Massively recommend this one. DC