Weekend Reading #231
This is the two-hundred-and-thirty-first weekly edition of our newsletter, Weekend Reading, sent out on Saturday 19th August 2023.
To receive a copy each week directly into your inbox, sign up here.
*****
What we’re thinking
The selling in markets continues. Bull market correction, bear market resumption? Who knows. As we wrote last week, positioning had become extended and markets somewhat euphoric so it's not major surprise. The thing is that these things do snowball as markets are made up of the emotions of the collective imagination of its participants. For every Tom Lee (eternal bull) there is a David Rosenberg (eternal bear). Markets are about stories and the story of the decline of the US, with its rising deficits, political infighting etc is permeating deeper and deeper. Epsilon Theory writes about narratives and recently this one in particular. This one can snowball because there is not direct way to stop it. On the flipside the fear around the moves in the longer dated US bonds are valid, but what would happen should we see recession odds being brought back to the limelight? For every positioning chart showing short positioning there is one showing long positioning, so genuinely it's not time to be too heroic. There is no magic answer. Only price action can give us clues. The tech stocks are pulling back after a massive, uninterrupted rally. What’s interesting is despite some good results, the selling is unabated. The last man standing is Nvidia, which reports results this coming week. Can there be a single stock bubble?
What we’re reading
If there was any hope left that the LK-99 material was a superconductor at ambient temperature and pressure, this article published in Nature thoroughly kills it. The Max Planck Institute for Solid State Research in Stuttgart synthesised pure crystals of LK-99 following the formulation of the original authors, interestingly in the form of a transparent, purple crystal. And in its purest form, it was found to not only not be a superconductor, but it was also in fact a pretty high resistance insulator, in the millions of ohms, so very much the opposite of a superconductor. It turned out that it was the presence of impurities in the samples manufactured in crucibles that led to the readings which led the LK-99 researchers to conclude the material exhibited potentially superconducting properties. And thus comes the final nail in the LK-99 coffin.
Or so one would think - some contend that the debate is far from over. Either way, one can only wonder how much science would advance if attention and resources could be focused on new discoveries the same way they were on LK-99. Ultimately, if there’s one thing LK-99 did, it was to get a whole lot of people interested in scientific research that nothing else has managed to in years. EL
What we’re watching
After a few years break, a brand new season of Black Mirror is on offer. It's as dystopian as ever. Each episode this time is a feature length film. Big-name stars are in it too – Josh Hartnett, Aaron Paul (Breaking Bad), Salma Hayek, Annie Murphy and more. We watched 3 of them so far and they were exactly what you’d expect – clever and unsettling. Episode 3 the strangest by far, though its close. This one features Hartnett and Paul as astronauts who inhabit something similar to the International Space Station, but through some kind of consciousness transfer device can shut their minds down and transfer them to their physical “replica” bodies on earth and live happily with their families. It gets really weird and messy needless to say. Not for children. DC
The name “Vivek Ramaswamy” may not immediately conjure up mental images of a US presidential candidate, and while I’d heard the name in passing in conversations about US politics before, these are conversations I tend to escape rather promptly. In the end, it was Twitter that got me. This tweet from Tucker Carlson features an hour-long video of an interview with Ramaswamy. At 38, he appears to have achieved much (not without some controversy) and is now campaigning to be the Republican candidate for the US presidency, making him the youngest Republican presidential candidate ever. The conversation with Carlson is riveting, for lack of a better word, and what started off as a “quick listen” became a full “proper” listen to Ramaswamy go through a plethora of topics from 9-11 to US foreign policy and interventions to everything in between.
Make no mistake, he’s as right-wing conservative as it gets, but like he unashamedly proclaims, he’s also from outside the Washington establishment, and outsider not bound by huge donor obligations to toe any line, effectively making him free to speak, calling out faults in BOTH parties of government in the US. As Carlson points out at one point, while uncomfortable to listen to, there is really nothing controversial about anything Ramaswamy says. With Trump now indicted for a laundry list of felonies, it’s just that much less impossible that Ramaswamy could win the Republican ticket. EL
What we’re listening to
Tyler Cowan’s conversation with Paul Graham on his podcast, Conversations with Tyler, was just mad. He launched an all-out assault of questions on Graham, who to his credit spent most of the podcast answering, “I don’t know, why are you asking me these questions?”. It is a fantastic listen as they cover what is a long and rapid bout of seemingly unrelated questions. Graham is the co-founder of Y-Combinator amongst many other things and is also well-known for his essays, some of which I’ve read before. Pick your topic here. This was a real exercise in high-IQ repartee.
Dan Snow’s podcast, History Hit, is one of my favourites. This week he covered one of my all-time favourites, Genghis Kahn. His guest was a Professor at Tulane University, a chap named Kenneth W. Harl. Harl’s most recent book is called Empires of the Steppes and features amongst others, Genghis Kahn, Attila the Hun and Tamerlane, who quite possibly was given the best name of all by his followers - Lord of the Auspicious Conjunction. I’m not going to read it as at this stage 400 more pages of non-fiction history is a bit daunting. It turns out Harl is prodigious and has a long list of books and lectures on almost everything related to ancient empires and civilisations. As I’ve written before, many westerners consider Genghis to have been a true barbarian but the truth is that apart from war and plunder, he ran a pure meritocracy, was tolerant of all religions, introduced reading and writing, as well as the almost religious documenting of the events of his people, which became The Secret History of the Mongols, a text now much studied by scholars. Next up is Attila the Hun, a previous episode which I’ll get stuck into during next week’s running.
Last up on the podcast front is Empire, the crypto podcast, which this week featured Anatoly Yakovenko, the founder of Solana. Solana has seen its share of chaos and disappointment. After being the poster child of 2021’s crypto bubble, its token price lies 92% below its highs back then. Although in fairness the overshooting nature of markets along with crypto’s volatility means it wasn’t a fair reflection then anyway. Solana is interesting to me because it is a completely different approach to building a blockchain than Ethereum. It prioritises speed and scalability. It turns out this is really hard to do and there have been many bumps along the way with likely more to come. But amongst the blockchain options other than Ethereum, it stands out given its completely different architecture as a bet on another approach. It suffered materially from its association with Sam Bankman-Fried but now is rebuilding its brand organically and slowly. As with all things crypto, it's just so early and uncertainty is so high that its high risk, but the reward may well be there to compensate. Yakovenko gets fairly technical in this, but his message is clear. He believes that when we see real demand for blockchain in years to come the only way to scale is his way. He believes Ethereum with its layer 2 scaling through the likes of Arbitrum and Optimism amongst others will struggle to scale. Time will tell. DC