🌍 India’s expanding navy

Hi Intriguer. Legendary US investor Charlie Munger passed away yesterday at 99. Reading the obituaries on his remarkable life, it all brought to mind an example of how mistakes can shape history:

In 1888, a French paper accidentally published an (unflattering) obituary on arms dealer Alfred Nobel when he was still alive, apparently inspiring the guy to leave his vast fortune to establish the Nobel Prizes.

Another? Egypt’s then president (Sadat) reportedly took advice from a mystic when making his historic 1977 visit to Israel. The specific prophecies proved wrong, but his visit still paved the way for a peace deal a year later.

Maybe I’m pre-emptively excusing any typos you might find in today’s briefing below (featuring India’s naval expansion, by the way). But honestly, mistakes can be okay. Charlie Munger said as much himself.

– Jeremy Dicker, Managing Editor

Biden pivots? President Biden tweeted yesterday that “to continue down the path of terror, violence, killing, and war is to give Hamas what they seek.” White House officials reportedly said later that this wasn’t a change in policy. But his words seem designed to pressure Israeli leader Benjamin Netanyahu not to resume full ground operations in Gaza when the Hamas truce expires tonight, given the extent of civilian casualties and the humanitarian crisis in the strip.

Suspect poisoning. Ukraine claims the wife of its military intelligence chief has been poisoned with heavy metals not found in “ordinary civilian or military life”. At this point, it’s fair to say the list of suspects isn’t very long.

US aircraft crash. A US military aircraft has crashed in waters off Japan killing at least one, with search and rescue operations currently underway for the seven others on board. The incident appears to involve an Osprey (a sort of helicopter-plane hybrid), which has been at the centre of several crashes in recent years.

Haley wins key endorsement. Republican presidential hopeful Nikky Haley has received the support of a key super political action committee (PAC) backed by billionaire Charles Koch. Haley (a former US ambassador to the UN) is hoping to pass Florida governor Ron DeSantis and go head to head with clear Republican frontrunner Donald Trump in the 2024 primary race.

A Saudi Expo. Riyadh has won the hosting rights for the 2030 World Expo, beating rival bids from Rome and the South Korean port city of Busan. It’ll be the second World Expo ever hosted in the Middle East (after Expo 2020 Dubai).

INTRIGUE’S TAKE

Let’s run some quick numbers here.

India is now one of only ~seven countries that can build a carrier. And it’s now got the same number of carriers as China. Sounds good, right?

• But China’s third carrier is already in testing, while India’s won’t be ready until the 2030s (by which point its oldest will likely be retired)

• China already has the world’s largest navy (370 ships and subs, ~90 more than the US), and

• China’s navy is growing more quickly on the back of a production capacity that’s reportedly now 200 times that of the US.

So this proposed new aircraft carrier is a big deal for India. But on balance, naval momentum in the region still looks to be heading the other way.

Also worth noting:

• Based on tonnage, the US Navy (with 11 carriers) is still double the size of China’s. The US continues to retain certain tech edges also.

• But one historical study suggests the number (not quality) of vessels is the most important factor in determining a naval victory.

• India says up to 70 different navies sail in the Indian Ocean. It wants three carriers to ensure it has at least one off each of its two main coasts maintaining a continuous presence in the Indian Ocean.

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MEANWHILE, ELSEWHERE…

1. 🇦🇿 Azerbaijan: The US embassy in Baku cancelled an event featuring US-educated Azerbaijanis after a pro-government outlet suggested the students were American spies. Relations between the countries have deteriorated since Azerbaijan seized Nagorno-Karabakh in September. 

2. 🇲🇰 North Macedonia: The Baltic nations – Estonia, Latvia, Lithuania – say they’ll skip an upcoming security summit in North Macedonia if Russia’s foreign minister Sergey Lavrov is allowed to attend. Lavrov has only visited two other NATO countries – Turkey and the US (for the UN General Assembly) – since Russia invaded Ukraine. 

3. 🇵🇭 Philippines: Norwegian mediators announced Tuesday that the Filipino government will resume peace talks with communist rebels. The conflict between the two sides started in 1969 and has resulted in the deaths of tens of thousands of combatants and civilians. 

4. 🇵🇪 Peru: The country’s top prosecutor has blamed Peru’s president, Dina Boluarte, for the deaths of dozens of protestors over the past year. Boluarte rejects the accusation as “despicable” and accuses the prosecutor of seeking to distract from her own legal woes (including allegations of corruption). 

5. 🇸🇱 Sierra Leone: The information minister says the attacks by armed men on military outposts and prisons over the weekend represented a failed coup attempt. The entire country has been under curfew since the attacks, which allowed 2,000 inmates to escape prison. 

EXTRA INTRIGUE

What we’re reading about initial public offerings (IPOs) 

• Shein files for U.S. IPO as fast-fashion giant looks to expand its global reach

• Reddit might once again be flirting with an IPO

• Huel* plays down London listing as IPO market stutters

• From Zero To IPO: Lessons Learned From The World’s Most Successful Startups

• IPO Stories: ESG, from private to public

*Huel is a UK-based meal replacements company

PHOTO OF THE DAY

Aviation history is full of firsts. You’ve got the first flight (Wright brothers); the first solo transatlantic flight (Lindbergh); the first FBI agent forced to take control of a flight filled with venomous snakes (Samuel L Jackson); and now, the first sustainable-fuel-powered transatlantic flight (Virgin Atlantic).

Fuelled with processed waste and cooking oils, the jet flew from London to New York yesterday (Tuesday). These fuels can emit 70% less than traditional fuels, but they’re still too costly to support widespread adoption at this stage.

DAILY POLL

Yesterday’s poll: Do you think a high debt burden is inherently bad?

🟩🟩🟩🟩🟩🟩 💸 Yes, the chicken must come home to roost sooner or later (78%)

🟨⬜️⬜️⬜️⬜️⬜️ 📈 No, as long as an economy is healthy it's fine (20%)

⬜️⬜️⬜️⬜️⬜️⬜️ ✍️ Other (write in!) (2%)

Your two cents:

•  📈 S.B: “Quite literally modern capitalism for most countries is founded on debt based growth, in which all is okay as long as growth is achieved.”

• ✍️ A.A: “Depends on the clout of the economy. China and the US can get away with things Sri Lanka could never dream of.”

• 💸 W.G: “Spiralling interest costs on ever higher debt burdens soak-up funds that could otherwise be invested in growth and social programs. Additionally, high interest obligations inevitably fuel inflation that is an underlying factor in currency devaluation. See Argentina et al.”