Marvin’s Best Weekly Reads Apr 10th, 2022
“Scars are not signs of weakness, they are signs of survival and endurance.”- Rodney A Winters
"The #1 lesson of Europe’s natural gas dependence is this: European governments have wildly overestimated the ability of solar and wind to provide the energy they need and wildly underestimated the need for fossil fuels and nuclear to provide the energy they need.
If Europe’s level of dependence on Russia for natural gas scares you, know this: America is even more dependent on China for many of the key components of solar panels, wind turbines, and batteries than Europe is on Russia for natural gas.
The energy impotence and vulnerability to Russia caused by Europe’s solar-and-wind mandating, fossil-fuel-and-nuclear restricting policies should be a wake-up call to the US."
2. Very familiar and bullish on this region overall too. Public stocks and startup investments too for me.
"The EMEA region is sort of everything between the Americas and Asia, but our focus within that is Central and Eastern Europe, Middle East, and Africa. This is very broad and very diverse geographically, but not as evenly developed in terms of capital markets. Some countries in this region don't even have a stock market yet, but you also have Poland in there, which is now ranked as a developed country."
3."Tech: The entire point of technology is to remove the need for human effort: 1) robots = replace assembly line workers and warehouse workers;
2) software = replaces need for administrative assistants, basic accounting and even physical areas like conferences rooms due to zoom;
3) computers = replaced type writers, a large amount of mail delivery now called “snail mail” and
4) the combination of all these innovations - software, computer chips and “robots” creates self driving vehicles which replace drivers.
While these are all simple examples, over the long-term it’s practically impossible to argue that we’ll use less technology and go back to the “olden days”
4.Another reason for why understanding Russia's atrocious invasion of Ukraine is important.
"For years, this neon has also mostly come from Ukraine, where just two companies purify enough to produce devices for much of the world, usually with little issue. At least, they did until Russia invaded.
Faced with the devastating reality of war, Ukraine’s neon industry halted production.
There will be ripple effects, though. Semiconductor manufacturers rely on neon to control the specialized lasers they use to make computer chips. Right now, it’s not clear whether they have enough time to find and develop new sources of this gas before their backup supplies run out: Chip companies and industry analysts say there’s anywhere between one to six months worth of neon in reserve.
If that runs out, these companies won’t be able to make semiconductors. This means that the worldwide chip shortage — which was expected to end sometime in the next year or so — could draw out even longer, leading to higher prices, delivery delays, and shortages of critical technology.
“Whether it’s electronics, cars, computers, phones, new airplanes, anything you can think of has a semiconductor chip,”
https://www.vox.com/recode/22983468/neon-shortage-chips-semiconductors-russia-ukraine
5. This is a pretty dark take on everything on the Russian invasion of Ukraine.
I really hope he is wrong but it does seem like Russia is not going to stop & will leave Ukraine in total rubble.
I worry because this is the Russian way of war from the last 90 years.
6. "We don’t really have a precedent for what’s currently happening. This weaponization of money and finance has never been so effective, and thus, so useful in periods of war. But we also need to think about what that same weaponization means for the rules that oversee society in periods beyond war.
We’re setting a dangerous precedent against the true value of private property and the rule of law during a period of time that will likely be studied in the books of history by future generations. Independently of what we think about the freezing of Russia’s foreign reserves, about going after Russian oligarch’s assets, or using the power of financial services to isolate a group of Canadians from society and stop a protest in a developed economy – the most important idea to highlight is that the weaponization of money, reserves, and the monetary system has increased everyone’s discount rate of their assets and savings.
Remember, ‘temporary’ changes to the rule of law during times of crisis have rarely remained temporary. Governments have no incentive to give back power once they’ve claimed it.
Financially speaking, the increased weaponization of money forces countries, households, and corporations, to look for alternative ways to store value whilst simultaneously avoiding mediums that can be easily confiscated by adversarial countries or institutions."
https://www.thelykeion.com/the-weaponization-of-money-and-finance
7. "That said, there are three Ukraine scenarios which currently seem most likely. The first — which is both the most tragic and the most probable — is that this war continues for many months. The second possibility — put it at maybe 30 per cent — is that there is a peace settlement. The third scenario — which is perhaps 10 per cent — is that there is some sort of political upheaval in Russia, involving the overthrow of President Vladimir Putin and a new approach to Ukraine.
The long, grinding war scenario assumes that neither Russia nor Ukraine is now capable of achieving total victory and that neither is prepared to concede defeat. Putin is fighting to save his political life and the Ukrainians are fighting to save their country."
https://www.ft.com/content/63fc662c-098d-4263-b69b-34d55c9f5e0a
8. I am praying everyday for Ukrainian victory & that the war ends soon. #StandwithUkraine
"The evidence that Ukraine is winning this war is abundant, if one only looks closely at the available data. The absence of Russian progress on the front lines is just half the picture, obscured though it is by maps showing big red blobs, which reflect not what the Russians control but the areas through which they have driven.
The failure of almost all of Russia’s airborne assaults, its inability to destroy the Ukrainian air force and air-defense system, and the weeks-long paralysis of the 40-mile supply column north of Kyiv are suggestive. Russian losses are staggering—between 7,000 and 14,000 soldiers dead, depending on your source, which implies (using a low-end rule of thumb about the ratios of such things) a minimum of nearly 30,000 taken off the battlefield by wounds, capture, or disappearance.
Such a total would represent at least 15 percent of the entire invading force, enough to render most units combat ineffective. And there is no reason to think that the rate of loss is abating—in fact, Western intelligence agencies are briefing unsustainable Russian casualty rates of a thousand a day."
https://www.theatlantic.com/ideas/archive/2022/03/ukraine-is-winning-war-russia/627121
9. Super bullish on Agfunder of course! Batch 12! Congrats Rob & Team!
10. Totally agree with this assessment.
"The libertarian in me still needs to use “USD/Woke Capital” to live life, but most of my future is stored in startup investing, alternative financing and crypto.
We are (unfortunately) just getting started.
I am immensely grateful to be on the side of history well-positioned for economic, spiritual, and intellectual prosperity."
11. This is worth watching to understand the implications of the Russian invasion of Ukraine. Pomp does a great job interviewing Zeihan.
12. Yikes! Food prices are going up sadly.
13. I am hopeful that Ukraine will come out of the Russian war of aggression victorious. I am looking forward to helping the country rebuild better than before. Good economic prescriptions for the country after the war ends (pray its sooner rather than later). Slava Ukraini!
"Certainly after the shooting stops, the first order of business — and the task of several years — will be to rebuild the parts of the country torn down by Putin’s assault. Cities like Mariupol and Kharkiv are being reduced to rubble, much of the country’s infrastructure is being torn up, and about a quarter of the entire population has been displaced.
It took Japan and Germany both slightly over a decade after the end of WW2 to reach the level of income they had enjoyed before the war. Ukraine hopefully won’t be in quite such bad shape after this conflict, but this isn’t going to be the kind of thing a country bounces back from in 1 or 2 years.
Ukrainians will work very hard to rebuild their country, but they’re going to need help. And given the U.S. and Europe’s copious military assistance, it seems likely that they’ll offer rebuilding assistance as well. In fact, the EU has just started setting up a postwar reconstruction fund, and the U.S. has already spent $13 billion helping the Ukrainians.
Both the U.S. and EU leadership know that they can’t afford to have a weak, economically backward Ukraine as the first line of defense against a newly malevolent Russia, and the Ukrainians’ cause has resonated deeply with the U.S. and EU populations alike. So expect copious economic aid to flow for at least a decade.
In any case, the models of Poland and South Korea seem like they provide the best examples for Ukraine to try to copy after the war. And indeed, Ukraine should invite advisors in from both countries. In this troubled age, democracies have to look out for each other’s economic interests as well as military ones."
14. A perspective from a US army vet and writer I think very highly of.
"The United States needs to step up to protect a free and functioning democracy in Ukraine. As a combat veteran, I’ll choose this war over 20 years in Afghanistan and Iraq with no purpose behind it. Critics will point to Ukraine and say its democracy is flawed and corruption is rampant, but I would just reply, “Can you name a Democracy that isn’t?”
https://sofrep.com/news/americas-bite-bigger-than-bark-time-to-enter-war-in-ukraine
15."Tamerlane is always over the horizon, waiting to strike. There will always be conquerors waiting for the chance to conquer and pillage the soft civilized nations of the world. If you think Tamerlane is ancient history, just look up Pol Pot, Joseph Kony, Hitler, etc. This is a recurrent phenomenon. The only thing that can protect people against the Tamerlanes of the world is a strong, economically prosperous, well-organized nation state.
And the only way you get a strong, economically prosperous, well-organized nation state is to have a strong, centralized government that provides lots of public goods. Roads, ports, schools, technological R&D. You need these things because everything we know about economic development says that these things are absolutely essential for a nation to have a high GDP. And a high GDP is necessary for a nation to win wars with hypothetical Tamerlanes.
This is why modern American libertarianism is so very, very flawed. The ideology professes to value liberty above all else, but it ignores the dynamic aspect."
16.Even if this is half right....wow.....
"A senior administration official told reporters that independent assessments indicate Russia’s last 15 years of economic gains will evaporate this year and inflation will spike to 15%.
Russia, which had the world’s 11th largest economy before the invasion, will fall out of the top 20, according to the official. At the same time, the official said, sanctions are cutting off all sources of potential growth, including blocking Russia from purchasing cutting-edge technology."
https://news.yahoo.com/biden-meet-nato-european-leaders-074514058.html
17.Good stuff here on what’s happening in Crypto.
18. This is an amazing discussion on what’s happening in the tech industry public & private markets.
These guys are sharp and it’s a damn insightful conversation.
19. A frontline perspective of the war in Ukraine from BBC journalists.
"The war has changed everything for Ukraine, and for Russia. The world now feels more dangerous. Whatever happens on the battlefields of Ukraine, it is clear after a month that the Russian invasion is the biggest threat to international peace and security since the end of the Cold War.
Its consequences are already being felt beyond the borders of Ukraine, in the shape of European security, the politics of the Nato alliance and the growing pressure on economies and food supplies. UN Secretary General Antonio Guterres warned this week that disruption to Ukraine and Russia's agricultural exports could increase world hunger."
https://www.bbc.com/news/world-europe-60874223
20. This is sad that this is happening. Musicians turned soldiers in Ukraine. It does not seem right.
“Being honest,” he adds, “I can’t say I miss music now. At all. I miss peace. When we’ll get it — then I’ll think about music.”
"Russia’s invasion of Ukraine has upended and ravaged the nation in innumerable ways. The country’s thriving, eclectic music scene hasn’t been immune: Musicians have fled or gone underground, venues have closed, festivals are up in the air. But the most striking transformation involves those who have been transformed overnight from creatives to soldiers.
Although it’s impossible to ascertain a precise number, everyone from metal, rock, and folk musicians to electronic DJs has put aside their day jobs and taken up arms against an invading force. “You’re leaving your home and your family,” says Boole from western Ukraine, where he is stationed. “Suddenly you discover yourself in a completely unknown place. New rules, strict discipline, new people. A bit different surrounding [than] I got used to from working as a musician.”
21. "We believe we are at the onset of a global famine of historic proportions. In a staggering defiance of logic, many US politicians are still attacking the lifeblood of our own energy production infrastructure, looking to score political points against “the other team,” blaming price-taking producers of global commodities for gouging, threatening producers of energy with windfall profits taxes, resisting calls to remove bureaucratic hurdles to new production, and refusing to open an introductory physics textbook to help guide them through the suite of policy choices that require true leadership to get right. They remain stuck in an endless loop of platitudes, blamestorming, corruption, and ignorance.
As Eisenhower aptly identifies in our opening quote, distance has an anesthetizing effect on the observer of any occurrence. One wonders how many people will starve before our politicians get serious. The populations most at risk of falling off the edge are half a world away and we worry that that number is uncomfortably high."
22. I hope this leads to the end of the war soon.
"An assessment from the Institute for the Study of War found that Ukrainian forces had forced Russian troops into defensive positions, while Putin's forces had "continued to settle in for a protracted and stalemated conflict."
Ryan said the Russian army "has a huge personnel problem."
"There is no significant military unit left in Russia outside of Ukraine. They are all in the fight," he said.
"There is almost no part of the Russian military that's not dedicated, committed to Ukraine, so if he has to escalate, how does he escalate?" he added, referring to Putin.
At this point, Ryan said it would be "impossible" for Russia to take control of all Ukraine like Putin hoped to.
"He does not have the military forces to take all of Ukraine and occupy it," Ryan said, adding: "Russian leadership overestimated what their military was capable of."
https://news.yahoo.com/putin-soon-no-choice-stop-150314332.html
23. This is the hard lesson: don't get high on your own supply. Relevant whether you are a dictator, CEO or leader of any organization. Who and where you get your info is important. Criticism is not always a bad thing.
"The information environment that a leader builds in any context can succumb to this dynamic. But if you’re operating in a broader authoritarian context, then there are no checks on that. That’s the worst of every world. It’s the perfect storm for dictators, because they insulate themselves from criticism internally. But then they also, as a result of their strategies to maintain power among the population, also remove criticism externally."
24. This is an interesting take on the new world of war we are in. An Economic one.
Granted, author seems to be a gold bug so that’s the bias. But it's definitely an orthogonal view here. Not sure I agree with his conclusion but worth reading.
25. "Their maximalist strategy of swiftly capturing Kyiv and regime change has no chance of occurring. The second plan is to break morale through protracted sieges, the encirclement of cities and the occupation of enough Ukrainian land to force concessions. The Russian army has proven to be unable to take any major cities outside of the strategically advantageous southeast. Kharkiv and Sumy remain under Ukrainian control. Kyiv stands. Kherson, which was taken, is now contested. Western intelligence estimates 40,000 Russian casualties (15k killed). Prominent military officials in the Kremlin have been missing for weeks. Time is not on their side, and they know it.
So, make no mistake, this is most definitely an improvised plan B to accommodate for the woeful underperformance of Russia and exceptional Ukrainian defence so far. The new plan: annexation of land by any means necessary, be it empty or full.
this is most definitely Russia’s suicide via Ukraine; the question is now only of a timeframe. What we should focus on is: what is Russia’s appetite for punishment, and how much does it value the soon-to-be desolate wasteland of the Novorossiya it is trying to build? Can plan B deliver Putin a quick victory to save face? Can Putin even survive a Plan B, even if it is successful?"
26."Q? So where is this conflict going now?
Answer - it seems as though Putin will focus on Donbas, and encircling the 40-50,000 Ukrainians troops in the JFO. He hopes to devastate the JFO, while engaging in long range artillery and missile strikes against Ukrainian cities to sap confidence. His troops around Kyiv are digging in for the long haul but surely are vulnerable to insurgent attacks, with supply lines stretched.
Likely Putin hopes the destruction of the JFO and the attacks on cities will eventually force the Ukrainian leadership to concede defeat.
I also expect Russia to hit Western supply routes into Ukraine to try and dry up arms deliveries that are the life line of Ukrainian defenders.
But it is now clear that Russia cannot take he whole of Ukraine, or even Kyiv. A free Ukraine will endure, remain, even if Russia continues to occupy large swathes of Ukrainian territory for some time to come. The free Ukrainian territory will be a strident buffer against Russia - supported by the West. It will be exactly the anti Putin’s Russia that the Russian President fears."