Weekend Reading #354

This is the three-hundredth-and-fifty-fourth weekly edition of our newsletter, Weekend Reading, sent out on Saturday 7th March 2026.

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What we're thinking.

And so here we find ourselves. The culmination of many threads weaving together, we are now in the midst of a serious war. Is it a world war? Is it a regional war? Is it the next leg of the new cold war? Does it matter what it's called? We have had everyone and their dog opining on what happens next, who is right, who is wrong, who is winning, who is losing. Who knows? Not us. Only the passage of time will reveal the answers. What we do know is that risk is in the midst of being repriced LIVE and the range of outcomes just got a whole lot wider.

What we're meme-ing.
 

We came across a Naval X post today saying, "The human brain isn't designed to process all of the world's breaking emergencies in real time". To which our response is, "That is why we have a market. The market tells us what to do if we only listen". One cannot have hubris with markets as markets don't care what anyone thinks.
 
The thing about the way we look at markets is we look at price action first. And price action has been suggestive of bad stuff for some time now as we have written in this newsletter. We often don't know what exactly it is that will unfold but the market usually tells us something is going on. Up until this past few days, the price action was clearly telling us that tech broadly will weaken, and commodities and EM will perform well. This theme continued all the way up until the end of last week. But this week something changed. While tech has been weak, commodities and EM are getting hammered. This makes sense in the context of the war. Trade disruption, rising energy prices and a big move in the USD on a base of really vertical performance and fuller positioning in most of these places. And the price action is telling us that it wants to get a lot worse.
 
There have been comparisons to 2022. It's not 2022. Furthermore, many market participants are assuming Trump will TACO. We still think this is a stupid concept. Trump may be many things, but he is not stupid, and neither is his team. They have played their hand though. He can't withdraw now without removing credibility and deterrence. This is shaping up to be very messy. Once again, we will simply reiterate - This is not a time to be a hero in markets. In fact, it's not a time to be a hero in anything. This is not a case of what stocks or assets to own. It's a case of whether to own anything at all.

What we're reading and watching.

2 very similar pieces, both excellent mind - one from Niall Ferguson and one from Velina Tchakarova. The theme being that this is NOT WW3 but rather another act in the ongoing Cold War 2.0. They see it as a flashpoint rather than something existential in itself. And then a final piece from the upstart Prof Jiang, who I have referenced before in this newsletter. He believes it very much IS World War 3. There are two videos on the war that must be watched. Here and here. He has now become much more famous and is quoted all over X to such a degree that he is now influencing the minds of many. This is important because his theories are somewhat unusual. I quite enjoy watching as there is lots of food for thought. The problem is there is a LOT of reaching involved. Many things he takes as granted are actually not necessarily historically accurate or exaggerated to some degree. I don't think its deliberate but it's worth bearing in mind especially given his hypothesis behind the reasons for the war is the US and Israel are attempting to create what he calls "Pax Judaica". Despite this there is a lot of really good thinking. His overriding view on this war is that Iran will win it as eventually the US will be forced to send ground troops in, and those ground troops will suffer given the inferior numbers compared to the size of the Iranian force. He thinks they will be trapped in Iran's mountainous geography and be cut off from supply lines. He sees similarities with previous historical battles where a declining empire, against all odds, lost to a minnow with more zeal. I'm not sure I agree but I have already seen stories doing the rounds mentioning 100,000 ground troops being prepped for entry so maybe he is right!
 
In completely unrelated news, Netflix has bought Ben Affleck's AI production startup called InterPositive. After missing out on Warner to Paramount, they seem to have a made a blinder of an acquisition if these numbers check out! A very clever business and a very good deal it seems.
 
And after a reasonably long absence from public pronouncements since Trump's election, here is GOAT Stan Druckenmiller's views on markets, his process and a few other bits. He believes technical analysis is 20% as effective as it used to be. This in itself is worth listening for. DC
 
Over the past few years, private credit has been sold as the magic solution to having the best of both worlds, supposedly “equity-like returns for credit-like risk”, so the tagline goes. What was missing from that tagline is “at private equity-like liquidity aka almost none”. As the strain on the system mounts, that very much dreaded word that any manager drafting a PPM would avoid like the plague has now come back into use: “gating”. And we’re not talking a small fund – Blackrock’s flagship HPS Corporate Lending private debt fund, facing a surge in redemption requests, paid out $620m in response to $1.2bn of redemption requests. Earlier in the week, Blackstone had to lift its redemption limit to 7% from 5% in response to growing redemptions, with the company and its employees chipping in US$400m to provide liquidity for redemption requests. And we haven’t even seen the defaults come through yet. It goes to show ultimately that sticking a label “long-term” on a strategy doesn’t really work to make it long-term if it doesn’t make money, or if the money it supposedly made can’t be taken out. Returns are everything at the end of the day. EL

What we're listening to.
And if you want to hear the GOAT of geopolitics on the war and what America's objectives are, then here is George Friedman himself on this. Once again, no emotion, just simply good common sense analysis. Most questions you want answered are in here. DC