What I've Learnt About Relationships, De-Dollarization, News You Might Have Missed, Ethereum

August 31, 2021

Welcome to the +150 new subscribers since last Monday’s email! If you’re reading this but haven’t subscribed yet, do it!

Each week, I write an email that mixes technology, markets and worldly wisdom.

It’s been called “the best signal-to-noise ratio of any email”


“Pressure is a privilege - it only comes to those who earn it.”

- Billie Jean King

“A genius is the one most like himself” 

- Thelonious Monk

“Isn't it ironic... we ignore those who adore us, adore those who ignore us, hurt those who love us, and love those who hurt us”

- Ellen Hopkins

 “The secret of getting ahead is getting started.”

- Mark Twain

“The main thing is to keep the main thing the main thing.”

- Steven Covey


A. A Few Things Worth Checking:

1. When I was first starting out on Wall Street, twenty years ago, my manager told me something that has stayed with me.

I shared it on Twitter this weekend, and it ended up being re-shared +3k times and seen by +1.3mm people.

Here’s what I’ve learnt about relationships over twenty years:

2. This podcast featuring Louis Gave on Afghanistan, China and “De-Dollarization” is a thought provoking, one of the questions he asks is “what if, instead of China becoming more western, is the west becoming more Chinese?”

he states:

1) Do average citizens in the west today have more free speech than two decades ago? About the same? Or do they have to be more careful about what they say and write?

2) In recent years, and especially through the Covid pandemic, has it felt in western countries as if the mainstream media has become more of a government mouthpiece? Or has it felt as if journalists were still going out of their way to hold policymakers to account?

3) In recent years, have banks been strong-armed by governments into uneconomical lending decisions?

4) Have the rights of landlords been “modified” to placate tenants?

5) Have residents of western democracies been arrested for holding religious services?

6) Are vaccines being imposed on individuals for the greater good of society?

His conclusion:

The point is that after 18 months of Covid lockdowns, in which governments sacrificed supposedly sacrosanct individual rights on the altar of the common good, there is a case to be argued that the west has become more Chinese, rather than the other way round.

Right now, Chinese tech stocks and US tech stocks are priced as if this kind of predatory behaviour from governments could only happen in China. Just like the arrest of priests for saying mass, the closure of churches, draconian lockdowns, forcing banks to lend to unprofitable businesses, the imposition of vaccines on skeptical populations and the freezing of rents, this could never happen in the west, right?

After the last 18 months, it takes great courage to assert with any confidence what could or could not happen when it comes to policy in western countries. In fact, perhaps the single most important takeaway from the last 18 months is that it is remarkable what governments can get with when they press ahead with policies “for the greater good”.

Today, the bet investors are making by fleeing Alibaba and Tencent and flocking into Google and Facebook is that the trend towards policies driven by the perception of the greater good, overriding the rights of the individual, will stay confined to China. On current political trends, such a belief might be a little bit like a second marriage: the triumph of hope over experience.

3. Super wise Infinite Loops podcast with Tom Morgan and Jim O’Shaughnessy discussing the importance of Curation in the Age of Abundance.

and a great article by Tom Morgan: The Attention Span. “Be the Butterfly.”

A quote:

But on a personal level, it’s about finding your own unique capacity for “genius,” then co-creating with the environment. It might be the most optimistic idea I’ve ever encountered. This is because it frees us from the sense of powerlessness we can feel in the face of such an enormous and complex world. It may not require a huge, obvious intervention to save us from catastrophe. The tiniest act from a sage acting as a butterfly may be all we need. By becoming uniquely yourself, you merge with the system and help it evolve.

The podcast is jam packed with goodness, so a twitter summary might help:

4. If you want to master investing or just improve any skill this talk by Yen Liow at the CFA Society is great - about how to train your mind, the ultimate compounding machine.

5. Sounds like this worked out for the founder….. (thank you Yaser)


B. What I Learnt on The Sell Side:

I worked for fifteen years at Lehman and Goldman. These are the lessons I picked up along the way, neatly summarised into tweets!


C. News You Might Have Missed:

“Saudi deputy minister of defense signs military cooperation agreement between Saudi Arabia and Russia”

On August 23rd, Saudi Arabia’s Vice Minister of Defense tweeted that he had signed a defense agreement with Russia. The agreement was signed at an arms expo outside Moscow.

Historically, the United States has been the top arms supplier to Saudi Arabia. According to the Stockholm International Peace Research Institute, Saudi Arabia was the main recipient of U.S. arms transfers in 2016–20, accounting for 24 percent of U.S. arms exports.

Saudi Defense Minister bin Salman noted that Russia had many new weapons systems that have “proven themselves well in Syria," where Russia's military intervened to support President Bashar al-Assad in that country’s civil war

While most of the world was focused on Afghanistan this week, a very big chess piece appears to have been moved on the geopolitical chessboard. This appears to be a direct violation of the “Carter Doctrine”, which to oversimplify said “No Russians in the Middle East.”

Why would the Saudis choose Russian weapons?

The underlined point above about “Russia had many new weapons that have ‘proven themselves well in Syria’” is a potential hint, particularly when paired with the geopolitical realities of who Saudi Arabia’s biggest client is (China, by far)…

Last month, the kingdom directed at least 1.8 million barrels a day of crude oil to China, the highest deliveries since a surge in buying back in April and May when prices crashed.

Meanwhile, daily exports to the U.S. slumped to a paltry 97,000 barrels.

For over a decade, western leaders and their Middle Eastern allies have been saying “Assad must go.” And ever since 2015, when Russia got directly involved in Syria, Assad has outlasted all of those who said he “must go”…effectively protected by Russia.

What do we know about geopolitics today:

1. China is by far Saudi Arabia’s biggest client.

2. China wants to buy oil in its own currency; indeed, it is a matter of Chinese national security that they do so over time.

3. For 50 years, under the terms of the so-called “Petrodollar system”, Saudi Arabia has only priced oil in USD, effectively trading this concession for US security protection.

4. If Saudi was going to start openly selling oil to China in CNY instead of USDs, it would need someone else to protect it, as the US would likely be less willing to defend Saudi under such circumstances.

5. The Saudi Defense Minister said Russian weapons “proved themselves in Syria”…where they were matched against American weapons.

Points 1-5 above are all fact-based…so here’s some speculation: Perhaps Saudi signed a military cooperation deal with Russia because Saudi knows they are going to openly price oil in CNY (or EUR, like Russia) sooner rather than later.

I suspect an open announcement along these lines, were it to come, would mark another major signpost in geopolitics.

Hidden Forces has two great podcasts on Afghanistan:

America’s Withdrawal from Afghanistan & Implications for U.S. Policy in Asia | Laurel Miller

How America Lost the ‘Good War’ in Afghanistan | Jonathan Schroden

 “Moscow and Beijing are meticulously stage-managing the Taliban’s reinsertion in regional and global politics. This means that the SCO (Shanghai Cooperation Organisation) is stage-managing the whole process: Russia and China are applying consensual decisions that have been taken in SCO meetings.” 

- Pepe Escobar, Asia Times 

Also on Afghanistan, a thoughtful article titled: The Ides of August by Sarah Chayes. She spent time reporting on Afghanistan for NPR, lived in Kandahar from ‘02 to ‘09, from 2010 she was a special adviser to Admiral Mike Mullen (the chairman of the Joint Chiefs of Staff) she is now a fellow at the Carnegie Endowment.

A key passage:

Americans like to think of ourselves as having valiantly tried to bring democracy to Afghanistan. Afghans, so the narrative goes, just weren’t ready for it, or didn’t care enough about democracy to bother defending it. Or we’ll repeat the cliche that Afghans have always rejected foreign intervention; we’re just the latest in a long line.

I was there. Afghans did not reject us. They looked to us as exemplars of democracy and the rule of law. They thought that’s what we stood for.

And what did we stand for? What flourished on our watch? Cronyism, rampant corruption, a Ponzi scheme disguised as a banking system, designed by U.S. finance specialists during the very years that other U.S. finance specialists were incubating the crash of 2008. A government system where billionaires get to write the rules…..

How many times did you read stories about the Afghan security forces’ steady progress? How often, over the past two decades, did you hear some U.S. official proclaim that the Taliban’s eye-catching attacks in urban settings were signs of their “desperation” and their “inability to control territory?” How many heart-warming accounts did you hear about all the good we were doing, especially for women and girls?

Who were we deluding? Ourselves?

What else are we deluding ourselves about?

One final point. I hold U.S. civilian leadership, across four administrations, largely responsible for today’s outcome. Military commanders certainly participated in the self-delusion. I can and did find fault with generals I worked for or observed. But the U.S. military is subject to civilian control. And the two primary problems identified above — corruption and Pakistan — are civilian issues. They are not problems men and women in uniform can solve. But faced with calls to do so, no top civilian decision-maker was willing to take either of these problems on. The political risk, for them, was too high.

Today, as many of those officials enjoy their retirement, who is suffering the cost?


D. The Tech and Crypto Section:

1. Great tweet storm on Ethereum

2. There are lots of Marc Andreessen interviews and podcasts around including a recent one on Invest Like the Best but this one on the CSPI podcast with Richard Hanania was so good. It’s called Flying X-Wings into the Death Star.

3. Raoul Pal on the Bankless Podcast: Ethereum is the greatest trade.

4. Apple just declared war on your privacy by Edward Snowden

5. Bloomberg Odd Lots podcast: How Solana and Pyth Aim To Take DeFi to the Next Level


“There was a beautiful phrase that was shared with me by another great investor that I write about, a guy called Nick Sleep—a very remarkable guy who was really into cycling. And Nick Sleep talked about the aggregation of marginal gains, which is a very fancy-sounding term. But if you unpack it, what he’s basically saying is: There are all of these places, all of these habits, that give you a marginal advantage. You eat well consistently, it’s a marginal advantage. You exercise consistently, it’s a marginal advantage. You meditate every day—12 minutes a day, 10 minutes a day—it’s a marginal advantage. None of these things seem that big a deal on the day. But it’s the aggregation of all of these marginal gains. It’s when you combine them all that they become very powerful. And then when you combine them all over decades, it’s unstoppable.”

- William Green

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