Weekend Reading #298

This is the two-hundred-and-ninety-eighth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 18th January 2025

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What we're thinking.

After a slow end to the year and a weak start to this one, markets are back after Wednesday’s US CPI number. Positioning into it was clearly bearish and we’ve had a nice rally. Readers of this newsletter will know we often talk about the elusive vertical phase of the bull market or the blow off top and guess what, our base case is it is here. Crypto has been a fairly good leading indicator in recent months and after selling off first in December, it bottomed first in January. Frankly, some of the crypto price action make us feel greedy – a warning unto itself! Another reminder that one can have the best thought out plans and scenarios but in the end all that matters is getting it right when it matters. Jump on the train rather than stand in front of it, just make sure you always have one eye on the exit!
 

What we're doing.

In this case, more of “what we’re going to do” - I’ll be in Barcelona from tomorrow (saturday) until the middle of next week for some meetings, coinciding with the ICE Barcelona 2025 gaming convention. It’s another faux pas of the Brexiteers, and a shame since ICE used to be hosted annually in London, bringing the biggest players in gaming (both online and offline) to the Excel centre near Canary Wharf. Unfortunately, post Brexit, the hassle around customs including shipping machines and equipment for exhibition from around the world, including from within Europe, meant that hosting ICE in London became impossible. So, adding to the litany of business lost through Brexit is Barcelona’s gain - and ours, providing us with a reason to visit! If anyone’s in town and would like to meet up, please let us know! EL 
 

What we're reading.

A hostage deal appears to have been agreed to return at least some of the hostages taken in the October 7th 2023 terrorist attacks on Israel. This piece in the Free Press by Matti Friedman elucidates the dilemma facing Israel. Does one negotiate with terrorists? Is agreeing a deal to exchange thousands of people arrested for their heinous crimes for a few dozen Israeli civilians an encouragement to terrorists to continue these types of attacks in future to extract concessions? It is an impossible quandary. This piece goes into the history of these types of exchanges and tries to work it all out. Sadly, this is not the first time such a dilemma has been faced. DC 

When we visited Buenos Aires for the first time early last year, President Javier Milei had just come into power, and his brand of laissez-faire, small government, libertarianism was frowned upon by almost every mainstream commentator around the world. While we didn’t have a base to compare the mood on the streets of Buenos Aires before/after Milei, it certainly seemed like everyone was cautiously and hopefully optimistic. Fast forward one year, and the results are in: a budget surplus in Argentina for the first time in 14 years, not to mention inflation coming down from close to 300% to a less-than-terrifying 117.8% annualised (or 2.7% per month). That’s still a pretty painful number to stomach, but the direction of travel is promising. Personally, it’s a refreshing case study against the growing creep of government intervention. At the same time, many are calling for the same to be done via DOGE in the US following Trump’s inauguration next week, in the hopes of replicating such success, though with one catch: the US Dollar will need to go way, way lower for the same effects to be seen in the US. There’s a trade for that, if it happens, but the question is how that goes down for the average man on the street. The USD behaving like ARS? Probably much more to think about! EL 

What we're watching.

I’ve always been curious about Tony Robbins. He is massive, both in frame and in fame. Coach to presidents, celebrities and normies alike. I watched to an interview with him on Chris Williamson’s podcast, Modern Wisdom. Williamson himself is interesting. His original claim-to-fame was on the UK’s nauseating reality show, Love Island, but somehow, he completely bucked the trend. He used his original fame to create him a platform for his curiosity. His pod is excellent and this one with Robbins is no exception. Robbins talks now almost paternalistically. Unbelievably he is 65 years old already. He really just wants to help people. Billions if you listen to him tell you how many people he has fed in the world this year, which is wonderful. I think it’s the American way to self-promote that just gets me – a webinar, a VIP version of the webinar for a few extra bucks, a book or two, a few shows etc. That’s just how it is I guess and in this case it all goes to incredibly good charitable causes. The man is a champion.  

I have absolutely no idea what has been going on at OpenAI over the past months but whatever it is, it stinks. From the sacking of Sam Altman to his reinstatement. To the mass departures and warnings over AI safety. To the feud with Elon. But the most disturbing of all was the death of former engineer and whistle-blower, Suchir Balaji. Balaji was found dead in his apartment in November, apparently of suicide if you believe the state authorities. Balaji, it seems, was an exceptionally bright guy and according to his family and friends was very happy. He had just been on holiday with some friends and returned just before his body was found. His mother has been raging a one-woman campaign to draw attention to the fact she believes not only did he not commit suicide, but that he was murdered for what he knew about the goings on behind the scenes at OpenAI. The family commissioned their own investigation and autopsy, and the conclusions are completely different to those of the state. Eventually she got the attention of Tucker Carlson, who interviewed her late this week. This was a bombshell interview. The accusations are flying everywhere. State complicity in a coverup. His mother, Poornima Ramarao, meanwhile is no dummy. She is direct, articulate and comprehensive and is certain that OpenAI (code for Sam Altman) had her son killed. Crazy stuff. DC 
 

What we're listening to.

There is guy on the podcast circuit named Darius Dale of a research house called 42 Macro. I’ve listened to him a few times and I really like the way he speaks and most importantly how he has correctly called the major market moves in recent times. He isn’t a Tom Lee type chap whose model is always be bullish, but rather more thoughtful. He appeared on Adam Taggart’s podcast with his 2025 outlook and despite being still bullish for now, he is expecting a major pullback (he used the word crash) in 2025 at some point. This one is really worth a listen and in fact dovetails with how we are thinking about things. DC