Broadcom pulls out the stops. US foments uprisings, complicating Iran risks.

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Today’s Links

How do the implications multiply the longer the Strait of Hormuz remains shut?
Craig Tindale with a very thorough look, starting with the pain that is inflicted right off the bat on the immediate shock of the closure and up to two weeks and what industries are increasingly degraded from then and even out to several years, when “civilizational redesign” would theoretically become necessary. He also puts together three scenarios, with some pretty remarkable knock-on effects into surprising industries within the three month time frame as the lack of many chemicals downstream of fossil fuel production would cripple some surprising industries.

Water more than important for oil in Middle East?
For the people in many countries there that rely almost entirely on desalination plants for water, most certainly, argues Javier Blas.

Latest of US CIA’s eternal shenanigans: fomenting a Kurdish rebellion in Iran
The Kurds of Iran are Sunni and an oppressed, sizable minority in Shiite-majority Iran. Separatists Kurdish Iranian groups have organized in the Kurdish region of Iraq, where the Kurdish population is largely left to its own devices in its autonomous region there. The US and Israel are offering military aid to Iranian Kurdish separatists in hopes they can go as far as overturning the Iranian regime, but the CIA also seems to have a singular knack for not thinking through the unintended consequences of what it is doing. Let’s see where this goes.

The investor playbook for the road we are on toward global fragmentation
Another great thought piece, this one posted on LinkedIn by Man Group president Steven Desmyter on the implications of the new era we live in, one of state-driven capitalism. Unlike some of the other thought pieces out there, however, this post features some more practical and actionable advice on how to navigate this coming era, like “treat liquidity as a strategic asset” and “invest alongside political capital” among other great bits of wisdom.

You, Meta glasses owner, also have no privacy
The Swedish newspaper Svenska Dagbladet with an article about the creepy process of workers at a Kenyan company pouring over Meta glasses footage to tag everything that it is seeing for AI purposes. Apparently, the Meta license agreement is that for footage used with AI features on the glasses, Meta has the right to look at that footage (so every time you say “Hey Meta”, for example). You can only imagine the very private stuff that these workers are witness to - or just read the creepy examples in the article for an idea. What country will be the first to make these things illegal? Sales are up 139% year-on-year, of course. Who on earth is missing these things in their life? The Verge also weighs in on Meta glasses and how they can breach social norms as Zuck and company suffer from a “demagnetized moral compass”. Ouch!

Chart of the Day - Broadcom (AVGO)

Broadcom saw an enormous re-rating lower (if one that looks modest relative to its prior advance!) of some 25% from its all time highs of USD 414 a share ahead of this latest quarterly earnings report announced after the close on Wednesday. The current valuation of the company looks justified in the rear-view mirror with those accelerating year-on-year growth rates and in what lies ahead in coming quarters as the acceleration continues, especially if the CEO’s predictions of USD 100 billion in AI chip sales in its fiscal 2027 come true. A USD 10 billion buyback of shares won’t hurt either. Shares were up over 5% in the aftermarket post-report yesterday and it will be an interesting session ahead and through the weekly options expiry tomorrow after so many AI-linked stocks (not just the SaaS companies) have suffered a negative re-rating on the fears further over the horizon that growth rates can’t keep up forever and that the industry will remain a cyclical one.