The WC is a selection of five useful, interesting & notable insights, handpicked by our CIO Wyatt Cavalier and pumped into your inbox every Wednesday.
(The Arms) Business is good
The Russian invasion of Ukraine has brought boom times to Eastern European arms manufacturers.
In spring 2022, countries like Poland, Latvia, and the Czech Republic offloaded their mothballed Soviet-era weapons and munitions to Ukraine, which Kyiv used while it waited for the western aid to ramp up.
Over the last eight months, Poland has sent nearly $2B in weapons to Ukraine, with several other Central and Eastern European countries also contributing hundreds of millions in arms.
Those stockpiles need replacing, and companies like Poland’s state-owned PGZ are capitalizing. The company will invest nearly $2B over the next ten years, doubling its original plan.
The Czech Republic is getting in on the action as well, according to Jakub Landovsky, their NATO ambassador:
“This is a great chance for the Czechs to increase what we need after giving the Ukrainians the old Soviet-era stocks. This can show other countries we can be a reliable partner in the arms industry.”
The last thing you want is an unreliable arms dealer.
The #1 component of global trade
I used to run a coffee company, and my favorite factoid from that business was that coffee is the second most traded commodity in the world after oil.
It turns out that’s not true, and oil isn’t even number one anymore — it was taken over by semiconductors in 2015.
Did you know that semiconductors (or “integrated circuits”) are the #1 component of global trade, with a 15% share? They overtook oil in 2015. In 2020, computers were second at 12%, and oil at 9%. Cars were only #4, and then everything else quite far behind. pic.twitter.com/xzkAI6fO7N— Wasteland Capital (@ecommerceshares) November 30, 2022
Then computers came in second in 2020.
This is all super relevant, given where most semiconductors are made — Taiwan .
Tensions between the US and China over Taiwan have been growing recently, and there’s a small chance things will go south quickly there. That’s why the US Congress passed a law pumping $50B into onshoring production of the precious little circuits.
This is where all that money’s set to go.
Worth noting if you’re in the real estate game:
- Ohio — Intel is building 2 factories in Licking County at the cost of $20B.
- New York — Micron is building a factory near Syracuse, costing upwards of $100B.
- Texas — Samsung is building a $17B factory in the Lonestar state. Further, Texas Instruments is opening a $30B semiconductor campus north of Dallas that includes a total of 4 factories.
- Virginia — Micron is massively expanding its facility in Manassas.
- Arizona — Not to be left out of the party, TSMC is building a $12B factory in Arizona, and plans on at least 3 more.
- Berkshire + TMSC = 😍 — Buffett money is the smart money, and Berkshire Hathaway just invested a whopping $4B in TMSC. Maybe the oracle sees the long-term benefit of bringing chip manufacturing stateside.
Seems like Covid taught the US something about supply chain fragility after all.
Using lasers to find lost cities
Civilization in the Amazon basin was far more advanced than previously thought.
Hundreds of years ago, it contained metropolises spanning miles and housing hundreds of thousands of people. They’re all gone now due to the disease and conquest brought by Europeans in the sixteenth century, though, so how do we even know that?
LIDAR shoots harmless laser beams at an object, records how long it takes to bounce back, then creates a map based on the data. It can penetrate dense tree canopy, undergrowth, and even topsoil, to reveal the foundations of cities long gone.
In 2018, researchers identified the “ruins of more than 60,000 houses, palaces, elevated highways, and other human-made features that have been hidden for centuries under the jungles of northern Guatemala.”
The technology can be used to find smaller urbanizations as well. More than 500 ancient towns were discovered in Mexico just two years ago.
It’s a jarring revelation of just how much was lost.
The end of free cookies
Donating blood is great. You get:
- Free cookies.
- A virtue-signaling sticker.
- To save lives.
Enjoy it while you can, because this might all be a thing of the past.
Imagine if emergency rooms around the world could produce a pint of blood as quickly and easily as printing out a document.
That’s something I’d invest in.
Where to get away with murder
Imagine you wanted to commit the perfect murder. A crime so well planned you could never be convicted of your dastardly crime. Where would you do it? A clean room in a lab? The middle of the sea? On top of a remote mountain?
Nope, nope, nope.
You need to go to the Idaho portion of Yellowstone National Park in the US. There you’ll find a 50-square mile zone of death where you can commit any federal crime you’d like and escape prosecution.
The problem (or opportunity) exists because of a loophole in the US Constitution. All Americans are guaranteed a trial by twelve citizens who live in the both the state and federal district the crime was committed in.
- Yellowstone is part of a special federal district comprising Wyoming, Montana, and a bit of Idaho.
- The US Constitution says any federal crime must be tried by jurors who live in both the same district and state the crime was committed.
Lots of people live in the Wyoming part, and enough folks reside in the Montana portion, but no one lives in Idaho’s Death Zone. So, it’s impossible to convene a jury for any federal crime committed there.
Let me know if you give it a go.
One more thing.
With apologies to my wife…
I'm sporting this delightful moustache to help raise money for Tunrayo, who was diagnosed with breast cancer this year.— Wyatt Cavalier (@itiswyatt) November 30, 2022
If we can get $500, I'll keep the 'stache through Christmas.
Donate here 👉 https://t.co/SGEVhOHUh4 pic.twitter.com/2HGOXorL7K
What caught your eye this week?