Digest 12: Leopard tanks; Nord Stream culprit; strategic naivety
My favourite highlights from the past few weeks…
I hadn’t realised the full impetus for Spotify pushing its Discover Weekly and Release Radar playlists (which are awesome, and I’m a major user of).
Spotify pays the three big record labels 70% of revenue for songs they control the rights to, but a lesser percentage to smaller labels/artists.
With these playlists, Spotify’s simultaneously making a better personalised user experience, and tilting the balance to songs it pays a lesser percentage on.
There’s a darker consideration here though, as the video goes on to ask (at 16:38): how far away are we from totally AI-generated music? (On which Spotify and other like platforms will presumably pay ~0% to labels or artists.)
Spotify has a significant financial incentive to crack this.
Nord Stream culprit
In mid-October, shortly after it happened, I posed the question: does something look suspect about Russia blowing up its own pipelines?
This might have sounded conspiratorial at the time, but the idea has gotten mainstream traction this week.
If you’re inclined, you can read the Seymour Hersh piece here.
I don’t think it’s by any means conclusive. Seymour’s evidence (detailed though it is) hinges on one main anonymous source.
But it’s beginning to feel +50% likely to me.
This feels like the military equivalent of the lab leak hypothesis. Very strong signs pointing to it. Very big elephant in the room nobody is allowed to point to. We can’t yet be totally sure.
I am of course on the side of NATO, but if there’s any hint of truth in Seymour’s reporting, this is a mightily dangerous form of Western escalation – arguably an act of war against a nuclear superpower.
Now – playing this out – might the U.S. have actually had a legitimate/justified case for doing it?
The pipelines should never have existed in the first place. And the degree of corruption at the top of the German government that allowed their development was staggering. Gerhard Schröder – the German Chancellor preceding Angela Merkel – signed the Nord Stream deal days before departing office he had been voted out of, and immediately became chairman of Nord Stream/Gazprom to see through the implementation.
Leaving the pipelines in place could have led to an apathetic Europe, reliant on Russia for winter energy, that thus wouldn’t help Ukraine, further setting precedence for invasions being tolerated.
And, pre-Ukraine invasion, Biden having promised the world ‘we will bring an end to it [the pipelines]’ if Russia invaded – would it not have undermined the US’s own word (and thus all assurances/ambiguity in supporting Taiwan) not to do it?
I still question whether this justifies blowing up energy pipelines of a nuclear superpower, but I can see a line of argument that it would have been a last resort and the U.S. had legitimately exhausted all alternatives (having pleaded with Germany to stop the pipelines for years).
If it does turn out to be true, however, it’s an eye-opener to the level of disinformation we as citizens can be subject to – and how readily en masse we will consume it. (This video is stylistically wacky, but a remarkable complication of media clips at the time.)
As the suggestion the U.S. might have been involved gains prominence, it will be very interesting to see the reaction of other countries.
‘Thank God I have done my duty’
Famous last words from Nelson:
‘Thank God I have done my duty.’
What a way to go out.
Orient your life now to be able to say the same?
Sam Altman (2014) on seed rounds
I’ve been thinking a lot about what these investments have in common, and what about them was different from other investments. The most striking observation is that, in my experience, the “hot seed rounds” that everyone is fighting to get in are anti-correlated with very successful investments. (It’s probably different for A and B rounds because the best companies often have exponential growth at that point.) The hotly-competed seed investments I’ve made have underperformed.
For all of the really good seed investments I’ve made, other investors I respected thought they were bad ideas. Stripe started before it was cool for very young founders to take on very established industries, and the prevailing thoughts from people I asked about were that it was never going to work (the initial plan was to be a bank) because Patrick knew nothing about the industry.
(I’m mid-way through reading Sam’s blog back to front.)
Lord of the Roths
I did not know an article about tax could be so fascinating.
A look at how Peter Thiel, and a number of early Paypal team members, used Roth IRAs to fuel their lifetime investing near tax-free.
How Humdrum Retirement Accounts Become Mega Tax Shelters for the Rich
Contributions to a Roth IRA are capped at $6,000 per year for most people. But some of the wealthiest Americans found ways to grow their Roth IRAs to millions — or even billions — of dollars, tax-free. Here’s how.
You contribute $1,000 to a Roth IRA.
Then, in a scenario that only a handful of people have access to, you use that money to buy 1 million shares in a new startup company for just a fraction of a penny per share.
A few years later, that company goes public and the value of each share rises to $50.
Now your Roth IRA is worth $50 million.
Normally, when you sell those shares, you would owe the IRS 20% of your gains. But since this all happened inside a Roth IRA, you don’t pay any taxes.
Next, you use that $50 million to invest in more companies.
When those companies go public or their stock increases in value, your Roth IRA keeps growing.
As long as you wait to cash out until you’re 59 and a half years old, that money will never be taxed.
Reading about the short-sightedness of the George W. Bush administration’s tax breaks was also head in hands depressing.
Niall Ferguson on Ukraine
Two things in these few minutes resonated:
The kind of enthusiasm for Ukraine... has had a certain ‘strategic naivety’.
The worst of all possible strategic outcomes. The decision to escalate in Vietnam is probably the worst strategic decision the United States has made in its history. But what’s amazing to me are the ways in which this could have similar disastrous consequences – and it’s very hard to get anybody to talk about that.
- Wang Huning (who there was an excellent 2021 Palladium magazine profile of, I know many people read) has been put in charge of Taiwan unification.
I sincerely hope Kevin McCarthy (who succeeded Nancy Pelosi as House Speaker) does not visit Taiwan and further inflame the situation.
- An important phrase from Graham Allison, speaking on Nixon/Kissinger’s opening to China: ‘Irreconcilables didn’t turn out to be unmanageables’.
- A thoughtful reflection from a foreign correspondent (Tania Branigan) in China: ‘After a month you could write a book on the country. After a year, you could write an essay. After five, perhaps a sentence.’
- I’m an enthusiastic champion of de-escalation, negotiation and bringing an end to conflict as quickly as possible. But, this video from Wladimir Klitschko is powerful:
Thank you for reading. If you got something out of this, please share it with one person you know who might benefit from it.