Infopost | 2022.10.17

Kerch bridge burning Crimea Ukraine Russia

A few of the world/economic news storylines that I've been following seem to have intertwined. Or at least the twines are quite close to each other.

The bridge got hit as a cargo of fuel was crossing over it. Said fuel is now burning and spilling onto the bridge. A masterwork of intelligence if it was a intentional strike.
Ukraine does have like at least four or five really decent intelligence agencies feeding them all sorts of info. This is a big move and suggests that no one believes Putin is going to find a way to end this.
"Really decent" lol.
They could hack into Jesus' nudes if they tried.
dude's hung

I'm not sure the analysis is correct, I'm just here for the crude humor.
Elon & Russia & Twitter

Wallstreetbets WSB Elon Musk Russia meme

Space Daddy/Thought Leader Elon Musk decided to weigh in on the Ukraine conflict with a tweet:

Elon Musk Ukraine-Russia Peace:

- Redo elections of annexed regions under UN supervision. Russia leaves if that is will of the people.
- Crimea formally part of Russia, as it has been since 1783 (until Khrushchev's mistake).
- Water supply to Crimea assured.
- Ukraine remains neutral.

This was his peace plan. It wasn't one of those long-form multitweets with a bunch of details. It didn't have a link to a fleshed-out proposal. Simply, "stop shooting, do non-sham elections". So we can laugh this off, Meme Lorde was microdosing and thought he'd shitpost about world peace.

Elon Musk Starlink tweet

But he didn't drop the idea. And he took himself seriously enough to threaten to withdraw Starlink after the twitterverse let him know that Ukraine's citizens and borders weren't up for negotation.

At a high level, the Musk Peace Plan[TM] generally matched Putin's initial invasion goals: secure Crimea, annex Donbas, and scare Ukraine out of NATO. Peeling back just one layer, Elon's peace plan doesn't address some glaring issues:
Undeterred, Elon stuck to his guns and rephrased his peace plan as a less concise poll:

Elon Musk Twitter Crimea Russia Ukraine vote

Perhaps this was Elon's Gavin Belson moment. His earlier vision for humanity has already been fulfilled: we'll have a Mars Colony by 2030 and robotaxis by 2020. He is now metamorphosing from tech icon to global leader, one who can rescue Europe from war like he rescued those kids trapped in a cave.

In other words: it's pretty funny that he seems to take himself seriously.


VacationLover1 VacationLover1 Enron Musk Tweets about Tesla semi trucks going into production the day the judge grants his stay and giving him to 10/28 to close the deal on Twitter.. someone is trying to increase the share price to come up with the extra money

After an initial giggle, Elon seeing himself as Earth's messiah is painfully dull. As WSB power user VacationLover1 indicates, Elon's antics are more often a simple ruse (see Elongate and all of his SEC troubles). So maybe concurrent headlines will shed some light on his Ukraineposting:
  1. Days before Musk's tweet, Russia announced involuntary mobilization of its reserves. Because they're struggling to even secure a stalemate against the Ukrainian counteroffensive.
  2. On October 4, Musk announced his intention to proceed with the stalled (pending litigation) Twitter acquisition.

1. Muskow

Sven Henrich Elon Musk tweet Putin

The accusations that Musk was doing PR for Putin were sufficiently loud and plausible to earn a direct response from Elon himself: he categorically denied coordination with the Kremlin. Well, not really. He denied speaking to Putin himself about anything since 2021.

Elon Musk OJ simpson tweet media
Source. To his credit, at least Musk does self-deprecating well.

Considering Elon's apparent hatred for lies of omission and half-truths, I'm going to assume him naming Putin was simply an expeditious way to say he hadn't spoken to anyone advancing Kremlin war interests.

But there's nothing substantive here, just a couple of tweets and a tantrum that they weren't well-received. Even with Putin's immeasurable resources and power, it's hard to imagine that he has much to offer the world's richest man.

2. Elon "Cathie Wood" Musk

ARKK Ark investments performance 1 year

The other big piece of concurrent Elon news was that he announced his intention to proceed with the Twitter acquisition.

CNN Business Elon Musk appears to be closer to completing his $44 billion acquisition of Twitter than at any point since he first said the deal was "on hold" nearly five months ago. But it's not a done deal yet.

Musk earlier this week sent a letter to Twitter (TWTR) proposing to move forward with the acquisition at the original price of $54.20 per share and suggesting the litigation over his initial effort to exit the deal be dropped. Twitter (TWTR) replied saying it had received the letter and plans to close the deal on the originally agreed upon terms.

In ordinary times, Musk would be rightly motivated to source Twitter financing from absolutely anywhere else. Funding the acquisition with his own cash means incurring the tax burden of liquidating Tesla shares - I think, perhaps some creative bookkeeping can mitigate this. Selling off his Tesla holdings also brings him closer to losing controlling interest of the company that he "founded".

But things aren't as ordinary now as they were in April. First, having backed out of his agreement to buy out Twitter shareholders, Elon is looking at a billion-dollar civil suit. Second, the recent market downturn may have adversely impacted his financing options:

The Guardian Is Musk's financing an issue?

The letter from the Tesla CEO's lawyers to Twitter offers to close the deal subject to the trial being adjourned and "pending receipt of the proceeds of the debt financing". Morgan Stanley is leading a consortium of banks that have pledged $13bn to help fund the deal and the market for buyout loans does not look good in an environment where global interest rates are rising.

Last month, banks including Bank of America and Goldman Sachs were reportedly hit by a loss of about $600m ? they had to sell on the debt at a discount ? on the sale of about $8.6bn in debt backing the private equity buyout of software company Citrix Systems.

I'm not familiar with the agreements required to secure billions in financing, but I expect the terms on a $13 billion loan pre-approval have an expiration date. That is, some of Elon's financiers may be looking for new terms or a more reliable investment.

And there's more. Elon's investors aren't just big US-based banks.

Business Insider Musk's plans to purchase Twitter for $44 billion with the help of foreign investors, including Saudi Arabia's Prince Alwaleed bin Talal, Qatar's sovereign wealth fund, and Binance Holdings ? which was founded by a Chinese businessman ? have concerned Biden administration officials, the people told Bloomberg.

Once again, a Putin connection doesn't make much sense. With all those financing options it seems unlikely that Elon would resort to doing PR for a Bond villain.

I want to believe

Business Insider Officials are considering which tools they could use to review Musk's ventures, including action by the Committee on Foreign Investment in the US (CFIUS), which reviews foreign takeovers of American businesses, per Bloomberg.

A CFIUS review makes sense with that lineup of foreign investors. But let's entertain a conspiracy theory for a moment.

Suppose Elon didn't want to massively overpay for Twitter but he also didn't want to pay the billion dollar penalty for renegging. What if:
  1. Elon delays the Twitter trial by announcing his intention to proceed with the acquisition. Nothing outlandish here, this was specifically called out by the Twitter attorneys.
  2. Musk tweets a believable but incendiary poll about Ukraine. Yep, did that.
  3. The backlash is swift and Elon uses it to threaten to withdraw Starlink and significantly inhibit western/Ukrainian warfighting capabilities.
  4. The US government asks Elon to keep the satellites in place in exchange for a CFIUS rejection of the acquisition.
Would CFIUS vacate Elon's legal liabilities? I am not a lawyer, but it would seem unjust to assign liability to someone for damages beyond their control. An unrelated, recent application of CFIUS with which I am vaguely familiar seemed like it could be summarized as follows: "everything is voided for both parties because the exective branch says so, have a good day".

No carrot, only stick

There are more than a few other good explanations for Elon's reversal on the Starlink thing, including that he doesn't seem to put much thought into some of his comments.

VirtualSwordfish356 VirtualSwordfish356 Uh oh. [Elon tweeting that he would keep Starlink in place] sounds like exactly the kind of thing someone would say if the USG just informed him what would happen if he continues to disrupt Starlink.

Want to be treated like other USG contractors? Fucking act like it then.

He likes to poke at other defense contractors, but how come nobody knows Raytheon's political stance? Why hasn't Boeing come out and made a case for China to annex Taiwan? Is it possible that other defense contractors understand the obligations they have to the USG?

If Musk wants to be treated like other defense contractors, he can stop doing his cute little Oleg Deripaska impression and get in line behind the U.S. and NATO.

Musk fucked himself so hard. How many counterintelligence investigations do you think are currently ongoing into Musk's contacts inside of Russia?

I don't know about you folks, but I didn't vote for Musk to be the de-facto head of the U.S. space program. I certainly never voted for him to conduct U.S. foreign policy.

Back to Putin

I mean, he's taking over a country for $2 worth of sanctions. I'd say that's pretty smart. He's taking over a country ? literally a vast, vast location, a great piece of land with a lot of people, and just walking right in.

Earlier I said the Elon/Putin connection isn't especially likely due to the lack of mutual benefit. But Putin may have an existential need to obtain a proxy stake in Twitter. That is, if resilient Ukrainians armed with NATO intelligence and anti-aircraft/anti-tank hardware can keep the stalemate going, Putin may soon find himself falling out of an eighth story window. His life may depend on his ability to install another Russia-friendly administration in Washington, one that will withdraw arms support and sanctions.

Putin has reason to be hopeful; Facebook and Cambridge Analytica turned the tides in 2016. If Twitter can be turned into the disinformation hellhole that Facebook was(/is), Putin might just convince his allies to endure two years of economic hardship. A 2024 reprise of Project Lakhta might leave Ukraine staring at a fate resembling the Kurds in 2019.

This still requires a complicit (or ignorant) Elon Musk. How badly he needs the financing is tough to know, but Elon has almost as much interest in steering political changes as anyone. He could be further enticed by access to Russian markets for his social media platform, his semi-self-driving cars, and his space company. Or something else, I don't know his business.

This situation certainly warrants a CFIUS review.

X, the everything app

Silicon Valley Hooli Portfolio powerpoint

The most likely story (imho) is that Elon simply wanted to buy his favorite media platform and he couldn't wait for the market downturn that absolutely everyone saw. He then completed his Gavin Belson LARP by suggesting he'd RIF 75% of Twitter's employees and stating his ambitious and uninventive vision for the platform:

CNBC On Tuesday, Musk tweeted that buying Twitter is an "accelerant to creating X, the everything app." He did not provide further details.

Musk may be hinting toward so-called "super apps" which are popular in China and other parts of Asia and pioneered by the likes of Chinese technology giant Tencent

Super apps is a term to describe an app that often acts as a one-stop shop for all your mobile needs. For example, you might order a taxi or food via the app and at the same time do payments and messaging. This eliminates the need to have multiple apps for different functions.

Update with another angle

jerm-warfare jerm-warfare He didn't mean to buy Twitter but secretly bought enough stock to get himself on the board. The secret part made it illegal and he was about to go under SEC investigation here's an article from the time.

He then avoided the SEC by committing to buy all of Twitter. As a consequence he got stuck with a price set by the market which he personally inflated with his initial stock purchases. Then he tried to back out with a bunch of bluffs and bullshit only to finally give in because even he knew he didn't have a leg to stand on and he couldn't afford to lose in an actual court.

Now he's successfully destroyed any value Twitter had, gutted it's ad revenue and is scrambling to make Twitter 2.0 in the hope he can salvage something from is $44 billion dollar mistake.

It's amazing to me that fan boys either already forgot the basics or they're trying to retcon the whole thing. He stumbled into this because he thought he was too clever and then he found out.

Autotune Elon, Bed Bath and BElond

Amazing: Kanye West to buy free speech platform Parler
The question is how nuts will he go? Sants
I like how every eccentric nut job can just have their own version of Twitter. Including Twitter itself
I can't wait for MyPillowTalk
Midterms and oil

Clutch3131 Clutch3131 Energy independence used to be cool...

Moving over to stonks, energy has been a pretty good place to put money. The rest of the market has swung wildly - like gas prices - since March. Since we're nearing midterms, even anti-political WSB catches (and rebuffs) the occasional propaganda post (such as the one above, posted with a pretty low-effort meme). Mods quickly tagged the post: "Exports > imports. It's very simple buddy." and this response was informative:

usernamesareclass usernamesareclass How short do my legs need to be to drag my knuckles this badly?

No POTUS has the kind of energy market manipulation input you perceive, no president changes the course of energy independence exponentially. US Oil extraction has only increased under Biden, it is literally a Republican talking point to obfuscate reality.

U.S. Field Production of Crude Oil (Thousand Barrels per Day)

- June 2019 (Trump) - 10,897 (Pre Covid)
- June 2022 (Biden) - 11,800 (Post Covid)

The same Republicans who are now receiving funding in Midterms from the Saudi investment fund. You almost couldn't make it up - but they have and fooled millions of people who know jackshit about energy.

As usual, the real DD is in the comments.
Inflation, interest rates, and qt

Federal reserve rate cut pivot Tweet FXHedge

Don't fight the fed, as they say. A dude on the investments mailing list at work was absolutely convinced that recession would spur the fed to resume QE. But it seems like inflation is their top priority. So we're in for a long-overdue market correction.

The most convincing indicator of a 2023 recession, for me, has been the commentary from tech CEOs. Tech CEOs are optimistic to a fault; every rosy picture they paint drives shareholder value, serves as marketing, and helps retain employee talent. So when I see droves of them go against their own script and warn of a 2023 recession, I'm inclined to listen.
Law & Order: Palm Beach

Serious Trouble (episodes) Sep 22 | 11th Circuit Smackdown
Key elements of Judge Aileen Cannon's orders are stayed on appeal; Special Master Raymond Dearie says Trump can't have his cake and eat it; Alex Jones is still a handful in court.

Sep 19 | 'Sir, this is a Hardee's, and you are served.'
Trump lawyer Chris Kise collects a $3 million fee deposit; Trump's associates keep getting served, in one case at a drive-thru; Judge Aileen Cannon continues to frustrate the DOJ.

Sep 6 | Judge Aileen Cannon's Shot Across the Bow
She will appoint a special master, and has enjoined the government from using the seized documents during the review. How will this affect the case?

I don't listen to podcasts mostly, but Serious Trouble is interesting. Thanks, Mark.
It may have been ahead of its time

Killed by Google flu vaccine finder

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