Marvin’s Best Weekly Reads July 9th, 2023
“It’s precisely those who are busiest who most need to give themselves a break.” — Pico Iyer
"We are seeing the initial stages for the groundwork of a cross-border CBDC rails, the one that the IMF is so eagerly working on.
With the increased adoption of digital payment systems, and the reluctancy to print higher denomination bills, it will be easier to force Argentines on a CBDC once Argentina defaults.
And believe me, that will be sooner than later. The leverage there is completely on the side of the IMF, no matter how many currency swaps Argentina decides to accept from China.
So unless Argentina decides to default on the IMF loan completely and exit capital markets (like the country has done in the past), this is the more likely scenario from this Mara’s point of view:
-Default (technically Argentina is already defaulting on IMF interest payments this month);
-Debt restructuring at 50 cents on the dollar (this is the bond play covered in my previous article) - this will likely happen under the new government;
-Austerity measures + increased fiscal control over the economy - CBDC introduction and plan to eliminate cash in x years.
Now even if this is forced upon the population, I have no doubt about the ingenuity of the people to come up with circular economies.
Some absolute currency mayhem that ensued during the 2001 crisis is a good example of that, together with the omnipresent black market for US token swapping that is currently active in the country."
https://bowtiedmara.substack.com/p/individual-sovereignty-cashless-societies
2. "Today, Venture funding has become even more scarce and appears as scarce as it was during the “Dot Com Bust”. By our estimates, we are about 1/3 of the way into the fundraising desert, where maximum restructuring will be prevalent in global VC ecosystems over the next 12-18 months."
https://tribecap.co/crossing-the-desert/
3. Fascinating watching the Football (aka Soccer) leagues now from business perspective. The power is in the hands of the top players who are cutting some interesting biz deals that we can all learn from.
"If the Saudi push is to come up short, it won’t be because of any moralizing. The European clubs will be hoping many decades of sporting heritage will protect their product, though the Londoners of West Ham celebrated their victory in a two-year-old tournament a few weeks back like it was the World Cup. And why not? You’ve got to take your thrills as they come, and fans will accept anybody who supplies them.
Whether it’s an American billionaire or an oil-state emir or a president the fans elect, there’s little sign it matters to folks so long as it means a few more great days out with family and friends. Besides, they rarely get much of a choice. Messi did, and he got the best deal of all because he recognized an opportunity to go from employee to partner—to become an owner himself. More American—and even European—teams might have to offer that kind of deal to survive the Saudi flood of cash."
4. "And there are also several large VC portfolios up for sale: SVB Capital, FTX Ventures, and now Tiger Global are all in the process of unloading a number of investments in VC funds and companies. That’s a hell of a lot of inventory for the market to absorb in such a short time, and sellers who want short-term liquidity will be at a significant disadvantage.
Many companies (and funds) are going to be available at much lower prices than at any time in the past decade. Already several companies on secondary marketplaces like Forge and Equityzen are priced at significant discounts to their last round valuations, with far more sellers than buyers.
For investors and acquirers with ready capital available, Silicon Valley is about to witness its biggest half-off sale in over a decade. Smart buyers should do their homework and be prepared to grab a bunch of tech startup bargains."
https://davemcclure.substack.com/p/repricing-exuberance-part-i
5. I think this discussion is pretty important.
I clearly disagree with Sack's view on Ukraine counteroffensive so far, it's too early & he has his own narrative bias (like all of us I might add). But most of this episode is good.
Key lesson: do your homework, find different sources/views and think for yourself ie. don't trust what you read or hear especially the establishment anywhere
https://www.youtube.com/watch?v=uJQmCFTYCh8
6. What an unexpected turn of events to say the least.
"This coup is being led by the boss of the Wagner mercenaries, Yevgeny Prigozhin. At first the smart money was on his failure because the full weight of the Russian state is against him.
Before he made his moves, he was declared a traitor, his offices were raided, and his bases shelled. But the Russian state is inept and decrepit. If the aim was to catch Prigozhin unawares and shut him up it failed, because he appears to have had some notice of what was being prepared for him and so took his own initiatives. If you are going to move against your opponents you need to be decisive. Prigozhin got away.
Even if Wagner is defeated quickly, which I would not take for granted, then this is still a big shock to the regime and it will have been weakened. If the confrontation goes in the other direction then all bets are off and panic may start to grip the Kremlin. The problem for autocrats like Putin is that they don’t really know what is going on among their people, and that tends to add to the panic."
https://samf.substack.com/p/prigozhins-mutiny
7. "It’s far too early to tell what’s really going on. All eyes are on Russia now. But rather than thinking of this as a simple internal argument, it may be useful to think of this as a way the superpowers solve the larger problems Putin was creating for everybody well outside of Ukraine. Ukraine will be a beneficiary of all this, no doubt, but the invisible war beyond Ukraine may now subside too.
As I finish writing this, I see a great line in a news story. It reads, “Prigozhin said that his call to action against the Russian military was not a mutiny but a “march for justice.” It seems a long way from his previous “we will destroy everything” remarks. That should hold up well in the FSB court process that is already charging him for “calling for an armed mutiny.” The key question remains, where is Mr Putin? It could be that Gerasimov loses this fight. Stories are circulating that the military refused his orders to attack Wagner by air. But, if he wins, I am betting on a serious peace dividend and a Russia that is brought back into the family of nations at least until Gerasimov gets comfortable.
Don’t forget that the Gerasimov Doctrine holds that anything goes. He is not to be underestimated. If Putin emerges still standing, we’ll have a problem Houston. Prigozhin is in trouble either way. China will figure out how to align with the winner, whoever that is. There’s going to be a run on popcorn, that’s for sure."
https://drpippa.substack.com/p/coup-detat-putin-prigozhin-gerasimov
8. "Now’s a great time to assess every functional area of the business and spend internal cycles leveling up people, processes, and technology. Cruft builds over time and needs to be revisited on a regular basis. Now is an exceptionally good time to upgrade functional areas."
https://davidcummings.org/2023/06/24/time-to-upgrade-the-startups-functional-areas/
9. "Venture capital is one of those dependencies. If you pick up one end of the stick (raising venture) you automatically HAVE to pick up the other end of the stick (needing a large outcome for anyone to make money.)
The music stopped when the market corrected. Whether it’s smaller, commoditized companies that can’t persist and need to get acquired, or it’s fake hyped-up consumer companies. Some of those outcomes hurt way more than my temporary face slam in the suped-up game of musical chairs."
https://investing1012dot0.substack.com/p/the-scramble-landscape
10. "There are a few figures in the tech world who staunchly insist that Russia is winning the war. But after the events of the past couple of days, how reasonable is it to keep believing that? As international relations scholar Paul Poast points out, you don’t tend to see infighting behind the lines in countries that are winning wars.
(Also, note the double standard here; the same people declaring Russia is “winning” in Ukraine tend to say America “lost” in Iraq despite pacifying the entire country with only a small fraction of the casualties Russia has sustained so far. Such is the power of motivated reasoning.)
Russia’s poor performance in this war has starkly illustrated the weakness of the right-wing romantic notion that traditional masculinity and the trappings of traditional religiosity will lead a society to triumph over decadent, effeminate democracies. Despite its manly recruitment ads and its military culture of machismo, aggression, and sexual violence, and despite its professed support for the Orthodox Christian church, Russia has repeatedly shown battlefield incompetence. Were it to face an actual NATO country in battle, Russia would be in even greater trouble.
Liberalism doesn’t act tough, but it is tough when it needs to be."
“Right now, China spends less on its military than the U.S. does. In wartime, though, it will ramp up defense production by enormous orders of magnitude, just as it has ramped up production of cars, of trains, of solar power, etc. China will do exactly what the U.S. did in WW2, and unless we make big big changes, it will overwhelm us exactly the way we overwhelmed Germany and Japan.
Ultimately it is China, not Russia, that presents the real challenge to America and our allies. Russia is a chaotic, militaristic, economically incompetent, declining medium-sized country that just happens to have a lot of old Soviet equipment. China is the world’s factory, ten times Russia’s size, at the peak of its power, national unity, and state capacity.
If the U.S. is going to meet that challenge, we’re going to have to do better than a robust economy and a strong currency. We’re going to have to remember how to build things again. So ignore the doomers and declinists on Twitter, but don’t ignore this."
https://www.noahpinion.blog/p/hey-tech-folks-the-west-is-not-failing
11. "Earlier in life, my eyes were fixed on finding new summits. Peaks offered peak experiences with rare and wonderful views. Yet with age and wisdom, I learned that life couldn't be sustained in the uninhabitable lands of hard-to-reach peaks. The peaks defined my past, but they wouldn't define my future.
I also learned to admire the river and to seek its guidance. By surrendering to its flow, I could find my way toward a more peaceful and hospitable place where life flourishes. And from that lower valley flush with abundance, I could look back and admire the peak from a distance, thanking it for the rare experience it offered me, yet vowing to never return to the place that nearly drained me to the point of non-existence.
Peaks are for the young, unwise, and hungry. Rivers are for the mature, wise, and absolved. Both can be navigated so long as you learn to surrender to their unbeatable resistance. One offers momentary peaks. The other offers lasting calm and solace. Together, they make up the landscape of a life."
12. "Putin’s Position - this was a direct and open attempt to undermine Putin and he blinked. He avoided a military confrontation knowing full well that he could have lost it. Any dictator worth this salt, including the ruthless Vlad himself, would have ended this in the bloodiest way possible and purged anyone who could even remotely be associated with the mutineers. A page from Stalin’s handbook would have sufficed. But he couldn’t this time and he had to let his rival off the hook. Bad mistake.
Of course you could argue Prigozhin blinked too and maybe he caved under pressure, but appearances matter and it was the Russian president who looks to be the weaker one here. So, not only has Putin delivered his nation a disastrous war, he has now also signalled that he lacks the resolve to decisively crush domestic pushback. The next group to use the war to rearrange power in the Kremlin can get to work, their target has far less political and military clout now."
https://pieterdorsman.substack.com/p/what-happened-in-russia-just-now
13. “Don’t take your eye off Ukraine,” Polymeropoulos advises. “I mean, this is a massive opportunity for the Ukrainians…In Russian military units, morale is gonna be in the toilet… They're gonna be focused on what's happening back home” instead of what’s in front of them, he thinks.
As for Washington, “there's nothing really we can do other than Ukraine,” Polymeropoulos added. “Now's the time to help the Ukrainians kill more Russians. You gotta have the Ukrainian boot on Russia's neck and fucking press it down.”
Where Putin’s boot lands—that’s the next plot twist in this very unpredictable story."
https://www.spytalk.co/p/russia-coup-pop-goes-the-weasel
14. "Mediocre man is one who learns to trust the journey because he is fully aware that one cannot quite know what will result from any specific effort. Society tells him he is lazy and that he is a fool and that he should have goals, big goals! But he has stumbled upon a secret: mediocre effort beats extreme effort for most people, most of the time."
This is the secret of mediocre man: liking what you do. For years, I have had a mantra, write most days. I probably write four or five days a week on average but sometimes zero days per week. To the person living in the world of grind, this would be terrifying. How do you measure, track, and keep yourself accountable? Don’t you have goals? But my method has worked. How? By liking what you do, you will inevitably form a positive relationship with your work and want to do more of it. Then the only challenge is creating space in your life to let it happen."
https://boundless.substack.com/p/the-way-of-mediocre-man-228
15. Don't agree with their political views but do like their life values in general. These are good role models for young men.
Great case for Dubai as a major center for business as well. Marbella sounds interesting too.
https://www.youtube.com/watch?v=nwmJhDpwHSE
16. "First, I think events this weekend have just underscored how bad the war in Ukraine is going for Russia.
It's been a disaster on all counts: military, human, economic, diplomatic/prestige and political.
As I have long argued, Russia has no path to victory in Ukraine, the longer it goes on the worse it gets for Russia. Indeed, the longer it goes on, with all the negative consequences, the more the risk of backdraft to Russia itself and risks of political upheaval at home in Russia. This is what we saw this weekend.
Second, Putin might have survived - just about. But he is now fatally weakened. His credibility is at a low point."
https://timothyash.substack.com/p/putin-is-vulnerable
17. "Prigozhin stopped at the Rubicon and then slithered away—Julius Caesar as rendered by Monty Python. No telling where this is going now.
Whatever, Russia’s disarray is Ukraine’s gain. I’d be surprised if Western intelligence agencies aren’t already reaping an espionage windfall from the chaos, with Kremlin rats pelting Western spies with offers of secrets in exchange for safe passage out of the madness. It’s no time for either side to be timid."
https://www.spytalk.co/p/a-spy-windfall-looms-from-russian
18. "People feel like if they go to broad, rather than niche, they will dilute themselves to the point of not making any money.
I called bullshit on this early.
Every single big YouTuber, podcaster, or other pseudo-celebrity is broad. Go look at Iman Ghadzi or Hamza.
They focus on beginner-level education on top-of-funnel social media.
They focus on intermediate to advanced in their low-ticket to high-ticket products and services.
They are somewhat holistic in the things they talk about. They understand that business or self-improvement demands that health and lifestyle be talked about.
They are far ahead of the curve because they understand human nature.
Think of it like this:
Most brands are a building within a community in the world of social media.
I want my brand to be a community in the world of social media. My newsletters, lead magnets, and products are the buildings, or digital real estate.
But, you clearly have to establish a building first, then expand."
https://thedankoe.com/letters/niche-down-is-terrible-advice-for-smart-people/
19. Good rundown of Dalio's Changing Global World Order in cartoon form. It’s really good for those who want to understand geopolitics and cycles.
https://www.youtube.com/watch?v=xguam0TKMw8
20. Soft landing in the USA? Good case for it here for all fellow global macro investors.
https://twitter.com/chamath/status/1673223002966708225
21. Very well thought thru thread on the present US dollar dominated monetary system.
https://twitter.com/peruvian_bull/status/1673418225672163329
22. I learned this later in my career.
"Main Issues: The main problems with a W-2:
1) you do not work for yourself, you are being watched by layers of management causing limited autonomy,
2) you *don’t* get paid what you are worth since everyone above you needs to generate a profit. The Company goes out of business if they hire a bunch of unprofitable employees and
3) if you ever get moved into a non-revenue generating part of the firm you’re crushed in terms of upward mobility. Income barely keeps up with inflation in a huge number of industries.
Now before moving on, remember that a W-2 is not safer. You can be cut at any time. Taking zero risk just ensures you live a boring life of coffee, avoiding HR and laughing at awful jokes that are not funny made by upper management."
"Anyone smart knows that distribution is a billion times harder than making the perfect product.
The perfect product doesn’t sell anything if no one hears about it. It would be similar to having a $10M diamond buried 100 feet below your house. Just because it exists doesn’t mean it has value. You have to find it to monetize value.
Benefits of Online Income: 1) you work alone for the most part, 2) you have limited operating expenses - limited overhead, 3) you can move the income anywhere and 4) no face to face human interaction - alright that last one is just a benefit for anti-social autists like us.
Main Issues: 1) it requires actual work. If you are in a non-revenue generating role like investment banking analyst/associate this will be a massive wake up call. No sales = no money. Period, 2) you see no results at the beginning - some rockstars pop in the first year but generally speaking when you get to year 3 you have line of sight to winning."
https://bowtiedbull.substack.com/p/when-5000-isnt-the-same-as-5000-and
23. This is an important discussion on Defense-tech and one of the most important founders and companies around: Palmer and Anduril.
https://www.youtube.com/watch?v=w6kxxtoxeGc
24. Always learning new things in our business.
This was a good interview re: the state of venture capital at the moment.
https://www.youtube.com/watch?v=gZVeRQkxCdc
25. Sober assessment of the Ukrainian counter offensive so far. Still early days is the point.
https://www.youtube.com/watch?v=pt3sQ_CN69s
26. SO many nuggets of wisdom here on self improvement.
https://www.youtube.com/watch?v=T6XGoSsFxJg
27. "In his analysis, the combination of India’s deep-rooted caste system that was an enemy of meritocracy, its massive bureaucracy, and its elites’ unwillingness to address the competing claims of its multiple ethnic and religious groups led him to conclude that it would never be more than “the country of the future”—with that future never arriving. Thus, when I asked him a decade ago specifically whether India could become the next China, he answered directly: “Do not talk about India and China in the same breath.”
Since Lee offered this judgment, India has embarked on an ambitious infrastructure and development agenda under a new leader and demonstrated that it can achieve considerable economic growth. Yet while we can remain hopeful that this time could be different, I, for one, suspect Lee wouldn’t bet on it."
28. A balanced view & assessment of Ukraine's counter offensive from a former US soldier.
https://www.youtube.com/watch?v=vWhgcOYsMLw
29. "The basic argument that the FTC is making is that Microsoft is buying Activision so it can take popular games, most notably Call of Duty, away from its rivals. In doing so, it will be able to monopolize a series of gaming markets by forcing users to play on Microsoft platforms. Most gamers think this means that Microsoft wants to privilege its own Xbox consoe over Sony’s Playstation, and make it so that you have to buy an Xbox to play Xbox-exclusive games.
This move, to deny a key input to a rival, is known as foreclosure. And it’s part of the claim from the FTC. But this case isn’t just about Sony and console markets, it’s about the future, and in particular what video gaming will look like in a few years, when the technology for gaming is radically different. To understand that requires looking at a different industry that went through a similar transition: Hollywood.
The transition to streaming is not a technology story, it’s a political and legal one. Everyone knew movies and TV would be delivered over the internet, the question was always what the market structure would look like. Streaming is just another way to distribute content, similar to TV networks and movie theaters.
Traditionally the distributors in Hollywood have been powerful, but stayed mostly out of the content game, buying their content from content makers. With streaming, would Hollywood remain an industry with lots of independent producers who sold to distributors? Or would the distributors demand to own everything themselves?
The answer, as it turns out, was the latter. Hollywood vertically integrated, with streamers both making and distributing their own content. For a time it looks competitive, because there are a multiple streamers, but it’s a group of giants fighting with each other, instead of a vibrant set of content creators selling into an open market."
https://www.thebignewsletter.com/p/will-the-biggest-tech-merger-of-all
30. This was a fun episode of NIA.
https://www.youtube.com/watch?v=dqxhqy-NAUg
31. "We talk a lot about product-market fit, but founder-market fit is arguably more important to investors in the early stages of a company.
As a VC, I want to understand why you chose this particular problem. Of all the things that you could devote your life to, what started you down a path that will potentially lead to you spending the next 7-10 years (or more) on this?
Ultimately, VCs are looking for a passion that goes beyond just numbers. Far too many founders I meet have thoughtful business plans and product roadmaps, but can’t articulate in a convincing way why they’re doing this instead of any number of other things (beyond money). As a former founder, I know how hard things get and how lonely and exhausting the CEO journey is.
I need to have conviction that 5 years down the road, when things get tough, early employees (and potentially cofounders) move on and the level of competition has you feeling like you’re like a back alley knife fight, you’re still going to push ahead because this problem matters so much to you."
https://chrisneumann.com/blog/its-not-just-what-you-say-its-how-you-say-it
32. "This stunning revelation of Russian weakness calls into question not just Moscow’s status as a great power but also the very concept of a great power. Even realists who frequently use the term have never provided a clear and convincing definition of what makes a power great. Rather, they tend to use the term to describe everything from true superpowers such as the United States and China, which wield the full spectrum of economic, technological, and military might, to better-than-average military powers such as Russia, which have nuclear weapons but little else that would be considered indicators of great power.
Such imprecision not only distorts analysis of state power and its use in war but can also make countries seem more militarily threatening than they really are. For these reasons, analysts should stop asking what makes a country a great power and start asking what makes it a “full spectrum” power. Doing so would have helped avoid overestimating Russia’s might before February 2022—and will help avoid exaggerating the threat posed by China, going forward.
More useful than the concept of a great power is that of a full-spectrum power, which takes into account the diverse factors that create military might, not just its outward manifestation in weapons. Few countries have ever achieved all the fundamentals on which superior military power is built and sustained; most that have been described as great powers were in fact midranking Potemkin states whose militaries served as façades for otherwise weak power bases. This was true of Benito Mussolini’s Italy, and it is true of Putin’s Russia.
In the last 150 years, there have been only a handful full-spectrum powers. One is obviously the United States, which became the largest economy in the world sometime in the 1890s and had few security concerns compared with most countries. The United Kingdom was certainly a full-spectrum power from the late nineteenth century until 1943, when it had to subordinate its preferred grand strategy to accommodate U.S. interests.
What made them full-spectrum powers, however, was not only their military might but also the economic and technological prowess that enabled their armed forces. Military power is to a large degree based on the ability to make the best, most advanced military equipment, from small arms to highly complex aircraft and naval vessels. This ability cannot be faked, and it must have the capacity to scale up quickly when the need arises. A military is only powerful if it can be equipped—and then re-equipped."
https://www.foreignaffairs.com/ukraine/theres-no-such-thing-great-power
33. Loved this conversation. Maniacs on a mission. This is the future. Only the most committed people will win. David Senra is intense and I love it!