| SNEAK PEEK |
— ADM’s accounting scandal has seen its stock plummet. But this isn’t the first time the agricultural giant has been tied to dodgy mark-up pricing practices.
— Dario outlines why the Houthi Red Sea crisis is unlikely to lead to regional escalation.
— Saudi Arabia’s move to legalise alcohol signals the kingdom is serious about disrupting Dubai as the region’s top tourism and business hub.
We hope you haven’t had your travel blocked this weekend by protesting French farmers up in arms over rising fuel costs and environmental regulations. One thing’s for sure, they certainly know how to make an impact:
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| THE BIG BLIND SPOT THIS WEEK |
WHAT IS GOING ON AT ADM? One of the world’s biggest agricultural commodity companies, Archer Daniels Midland, better known as ADM, found itself in the midst of an escalating accounting scandal, after it was revealed late Sunday that its CFO and senior VP, Vikram Luthar, would be put on administrative leave with immediate effect. He has since been replaced on an interim basis by Ismael Roig. The shares have understandably taken a beating:
But is ADM’s nutrition division to ADM really what Waystar Roco’s Parks and Cruises division was to the fictional Waystar?
Up until October 2023, ADM was embroiled in litigation with Kazakhstan’s BTA Bank over allegations that it had used sham transactions to help the bank’s former owner, Mukhtar Abylazov, funnel hundreds of millions of dollars in stolen funds through legitimate businesses, according to Bloomberg Law.
For years now, BTA Bank has been on the hunt to claw back hundreds of millions allegedly stolen from it by its former owner Mukhtar Ablyazov. The current owners claim these sums were distributed with the help of major commodities traders, such as ADM.
But the plot thickens. While Ablyazov was subject to a U.K. worldwide asset-freezing order in 2009, a case initiated by the City of Almaty in conjunction with BTA Bank in 2019 alleged Ablyazov worked with former Almaty mayor Viktor Khrapunov to get around the restrictions. The case specifically alleges that Khrapunov used his son, Ilyas, to help launder the money through thousands of shell entities, including in the U.S. Ilyas, in turn, depended on help from Felix Sater and Daniel Ridloff.
The reason that’s interesting is because, well, just check out Felix Sater’s Wikipedia entry:
But no, that’s not all. There’s a mighty plot twist in current proceedings. According to the Kazakhstani Initiative on Asset Recovery (KIAR), which styles itself as an anti-corruption watchdog, Sater now claims that the campaign against him and Trump was coordinated by none other than Kenes Rakishev — who, as well as being BTA’s big boss, was previously a prominent stakeholder in gold miner Petropavlovsk and continues to style himself as a cryptocurrency visionary and blockchain investor. But also, by Karim Massimov, a former Kazakh prime minister who was arrested for treason by Kazakh authorities in January 2023 during the country’s ‘bloody January‘ unrest. Massimov has since been sentenced to 18 years on treason and coup charges.
As the lawsuit notes:
“Arcanum and the Kazakh Parties, under the guise of working together with Sater pursuant to a confidential assistance agreement signed in June 2015 for Sater to help recover assets belonging to fugitive Kazakh oligarch Mukhtar Ablyazov and his associates, conspired to leak false and defamatory information about Sater to media outlets including ABC News. This was part of a concerted effort to falsely (and absurdly) portray Sater, a longtime business partner of Donald Trump, as a Russian agent and Kremlin stooge.”
Sater himself was also a key witness in Special Prosecutor Robert Mueller’s investigation into Russian interference in the 2016 election.
But it gets even more extraordinary. According to KIAR, Sater also sets out that rather than being a stooge for the Kremlin, his work for US intelligence and law enforcement agencies meant that the Russians wanted to execute him for treason.
Via the lawsuit:
Felix Sater is a legendary figure in the U.S. Intelligence Community. He is known for risking his life conducting espionage operations against North Korea, Taliban- controlled Afghanistan, al Qaeda, Russia and Russian hacking networks, including operations he executed on the ground in Russia and Afghanistan.
“Massimov and Rakishev were actively seeking influence with American politicians,” the lawsuit states. “In 2016, they believed that they would be rewarded for helping the Hillary Clinton campaign (who was considered certain to win the election) by smearing Sater and Trump. Massimov and Rakishev’s efforts to curry favor with prominent American politicians included lavishing money on Hunter Biden, who called Rakishev a ‘close friend’.”
Indeed that’s Rakishev on the left and Massimov on the right in this famous picture first published by KIAR:
Another extraordinary factoid is that Kenes Rakishev was the buyer of Prince Andrew’s former Sunninghill Park estate in Ascot in 2008, for what was at the time considered a bit of a markup (about £3 million) on its value.
Ablyazov, on his part, told my former colleague Tom Burgis (a victim of lawfare on his own part) in 2017 that he has been “a victim of a strategy, common in former Soviet states, of deploying commercial litigation to crush political opponents — using the world’s most respected courts to confer legitimacy. He says his extensive use of financial subterfuge is not a means to abet the amassing of illicit wealth but to prevent it.”
The reason that might resonate more in 2024 than ever before is because that “repression machine” playbook is exactly what’s now being deployed against Donald Trump according to his most ardent supporters. And indeed, even others.
| BUSINESS, ECON AND FINANCE |
Critical to these growth figures — which are only topped worldwide by Guyana’s >30 percent oil-led growth — is the Nigerien oil industry. Significant investments in Niger’s oil economy, supported by the China National Petroleum Corporation, have exploded its growth figures at an average of 20,000 bpd since 2011, while production this year will increase to around 110,000 bpd. National estimates place the country’s crude production forecast at around 200,000 bpd in 2026.
Furthermore, the Nigeriens have also invested in the Niger-Benin oil pipeline, which will allow Nigerien crude to be sold on international markets for the first time via the Seme port in Benin.
What regional watchers won’t have missed is the seemingly mediocre impact of what should have been crippling regional sanctions from ECOWAS members — the Economic alliance of West African States — especially since Niger’s growth has far outstripped them all. They also couldn’t have missed the curious coincidence in China’s recent exploitation of Nigerien uranium after a nine-year hiatus coincided with the military coup, both happening in the final days of July, 2023.
What the story critically points to, regardless of whether these growth figures are being fiddled (likely), or whether the impact of ECOWAS sanctions is being underreported (very likely), is the lessening importance of Western alignment for African nations, and the ability of Chinese investors to provide life-changing investments to impoverished countries that merely limped on under much-vaunted Western alignment.
CHINA INVESTORS HAVE BEEN WRONGFOOTED BY PERCEPTION OF CHINESE AUTHORITIES as better at managing the economy than their Western counterparts, noted Socgen’s Albert Edwards. On the contrary, the inconsistent attitude of Chinese policymakers to fight deflation suggests they’re just as fallible — something that is proving hard to digest for some.
TESLA REGISTERED ITS FIRST ANNUAL PROFIT DECLINE SINCE 2017 in 2023, according to its fourth quarter report, while signalling it was likely to experience a slowdown in 2024. Overall, the company generated $25.2 billion in revenue in the period, less than the $25.9 billion expected by analysis. This is despite Tesla’s topline breaching records, as it reached $96.8bn in revenue, 19 percent higher than 2022’s previous record. Shares slumped.
NOKIA STOCK WAS UP 7 PERCENT after it announced a $653m share buyback program following news that 2023 profits had plunged and that 2024 was gearing up to be challenging.
| CBANKING |
THE FEDERAL RESERVE CLOSED THE BTFP ARBITRAGE by cutting the rate it would pay for new loans to ‘no lower’ than interest on reserves.
OVERNIGHT REVERSE REPOS with the Fed continued to plunge, with latest figures out Thursday showing a drop of almost 11 percent on the week. Analysts now expect it will be fully drained by about the end of March, which is just after the Bank Term Funding Program (BTFP) expires on March 11. As reported by The Blind Spot last week, this comes at the same time that the Fed is trying to destigmatise usage of the Discount Window.
CHRISTINE LAGARDE WAS BASHED BY ECB STAFF in a trade union report, which called out her leadership as autocratic and politicised. When asked about the report in this month’s monetary policy press conference she, however, stressed that “I am irrelevant” in the grander picture of what’s going on at the ECB, not least because the ECB’s own in-house surveys showed staff were very satisfied. The ECB had previously told POLITICO (which broke the story) that the trade union survey had used an imperfect methodology and could have been gamed.
| GEOPOLITICAL HOT SPOTS |
HOUTHI’S DECLARED SAFE PASSAGE FOR ALL RUSSIAN AND CHINESE SHIPS passing through the Red Sea, in a further blow to US and Western-flagged vessels.
AZERBAIJANI PRESIDENT ALIYEV ESCALATED the country’s conflict with Armenia, and declared the Armenian capital of Yerevan as part of Azerbaijani territory.
EGYPT IS READY TO INTERVENE IN FAVOUR OF SOMALIA should there be a military conflict between Ethiopia and Somalia over the recent recognition of Somaliland, Egypt’s President Abdel Fattah el-Sisi has said. Somaliland recently granted Ethiopia access to its coastline for the building of a marine force base.
OIL TRADERS AREN’T PANICKING OVER HOUTHI ATTACKS since global intelligence firms have consistently pointed out that none of the involved actors seek an escalation in the region. Rather than escalatory attacks, most incidents in the Red Sea between the United States and Iranian proxies have been “calibrated”, according to a research note from Macquarie, making an all-out war seem unlikely.
That doesn’t mean the conflict isn’t escalating. In fact, since the American and British strikes, Houthi attacks on commercial shipping have increased by something like 400 percent. The Houthis notably targeted the Ocean Jazz this week, a US-owned and flagged ship that is manned by US Merchant Mariners and routinely carries military equipment for US TRANSCOM across the globe. Furthermore, a recent attempt by American patrollers to break the blockade by escorting two Maersk ships through the Bab el-Mandab straits ended in a whimper after several Houthi strikes and near-misses forced the convoy to turn around, leading the Maersk subsidiary to again halt transits through the contested area.
BLACK-ON-BLACK VIOLENCE IN PHILADELPHIA may be a proxy war between Mexican cartels and a Chinese pharmaceutical corporation funded by the Wuhan Institute of Virology to control the flow and price of xylazine in Philadelphia, according to a report by Channel 5
AFD LEADER ALICE WEIDEL hailed Brexit as a ‘model for Germany’, and said she will hold a referendum on EU leadership if she is elected to the Chancellorship.
THE SURGE IN ILLEGAL BORDER CROSSINGS across Europe in 2023 was confirmed by Frontex, which noted the year saw the highest level of crossings since 2016, marking a 17 percent increase from 2022.
KIM JONG UN MAY BE PREPARING FOR WAR claimed 38North, with Western observers potentially underestimating the degree to which North Korea’s foreign policy has fundamentally shifted towards confrontation as a result of the failure of the 1990-2019 rapprochement towards the West initiated by Kim Il Sung.
THE HEAD OF THE BRITISH ARMY CALLED ON MINISTERS TO MOBILISE THE NATION after he claimed the British military is ‘too small’ to handle a conflict on its own, citing the need to shift the public’s mindset to be willing to defend the United Kingdom against foreign adversaries.
Even the mainstream press, by way of the Washington Post, is now flagging that the border dispute breeds loose talk of civil war and resistance on the right.
The memes tell the story best:
WILL THE UNITED STATES WITHDRAW FROM SYRIA asked ForeignPolicy, and if so would that create a dangerous power vacuum in the region? Charles Listers’ controversial thought piece echoed multiple American administrators who claimed the Biden administration is reconsidering its military priorities in the region.
| CRYPTO EVANGELISM |
A COLORADO PASTOR ADMITTED HE MAY HAVE ‘MISHEARD’ God’s instructions to engage in the sale of $3.2m in a bogus cryptocurrency scheme that state regulators have claimed is “practically worthless.”
“The Lord said: I want you to build this, we took God at his word and sold a cryptocurrency with no clear exit.”
(Gen. 4-20)
THE SEC EXTENDED THE REVIEW PERIOD FOR ETHEREUM ETF PRODUCTS TO MARCH. Originally filed on November 2023, the application by BlackRock’s Ethereum Spot reflected some ongoing hesitancy by the SEC, in the approval of an ETH ETF.
| MEDIA MATTERS |
THE CANADIAN FEDERAL COURT RULED that Trudeau’s decision to invoke the Emergencies Act in response to the 2022 Freedom Convoy protests was unreasonable, unjustified, and violated the constitutional charter as it did not rise to the level of a threat to national security as defined by the law. This was interestingly timed with the departure of Liberal MP David Lametti, former Justice Minister and Attorney General since 2019, whose last day of office will be January 31.
A BRITISH TOURIST WAS JUDGED BY SPANISH COURTS AS LIABLE to pay a €22,500 fine for joking about a bomb threat. Most worrying for privacy advocates, the youngster only joked about a bomb threat in a private WhatsApp chat with his friends, which was intercepted by security services who dispatched a Eurofighter jet to intercept the EasyJet plane that was destined to Menorca. Yes, really.
A DEMOCRATIC CONGRESSMAN VISITED TRUMP RALLY and claimed his party was “completely delusional” for underestimating Donald Trump or his support, which he described as surprisingly diverse, “thoughtful, hospitable and friendly.”
TORY RUMOUR MILL SWIRLED WITH TALK that Penny Mordaunt is set to replace Rishi Sunak, who is seen as a ‘greater headache’ for Labour to face than the current PM.
VIVEK RAMASWAMY HINTED of a plot to keep Nikki Haley in the Republican primary race as a back up in the event that Trump as found guilty in any of his numerous legal standoffs.
HONG KONG PROTESTERS SUNG AFTER PIANOGATE erupted through the internet, following a group of Chinese individuals who bizarrely walked up to a pianist’s camera and instructed him to stop filming them.
ARIZONA REPUBLICAN PARTY CHAIR JEFF DEWITT resigned after a recording appeared online in which he conveyed a job offer to Kari Lake from “very powerful people” in exchange of staying out of the 2024 Senate race, to which Lake replied “I can’t be bought.”
| Technological developmentS |
TOKYO LANDED A SPACECRAFT ON THE MOON and thus joined the small club of nations which have made it to the lunar surface. However, issues with solar power generation on the spacecraft’s panels means its mission to study the Moon may be jeopardised.
GERMANY’S ESPIONAGE HEADQUARTERS decided to reverse a decision to phase out its historic pneumatic tube messaging system in 2024. Ongoing issues with the securitisation of German e-messaging and email systems means German spies still prefer to rely on centuries-old technology to defeat potential hackers’s interceptions.
A RECORD NUMBER OF FIRES WERE STARTED BY ELECTRIC BIKES in New York City, which has been responsible for over one hundred deaths in the city, the Telegraph reported.
NVIDIA, MICROSOFT, GOOGLE PARTNER WITH US GOVERNMENT’s AI research program to launch the National Artificial Intelligence Research Resource, which is designed to create a national resource for researchers and educators to access high-powered AI tech with the goal of ensuring America’s continued lead in AI research.
| CiVILISATION |
FRANCE’S NEW PRIME MINISTER GABRIEL ATTAL announced key concessions on Friday to protesting farmers promising an end to high fuel costs and growing industry regulation, after farmers blocked key roads and sparked chaos. “We will put agriculture above everything else,” he promised during a visit to a cattle farm in a mountain village near the Spanish border.
SAUDI ARABIA WILL OPEN ITS FIRST LIQUOR STORE in decades as the country increasingly loosened social restrictions – though the alcohol will only be sold to foreign diplomats.
A Lebanese real estate developer based in Canada claimed that MBS had already signed several hundred alcohol licenses which are ready to be granted in both Riyadh and the seaside developments of the NEOM project, but the Crown Prince is waiting patiently on his father’s death, King Salman, to approve it.
Much of Saudi Arabia’s lackluster appeal, if not all of it, seems to come from the lack of nightlife. While it’s true that unmarried men and women can’t exactly waltz around together in the country’s restaurants without worry, the gigantic leaps MBS is taking to make the country more appealing to Western individuals can’t go unnoticed.
While Dubai often takes the crown as the Middle East’s most desired destination for Westerners, I can’t help but feel this crown will quickly be yanked away by Saudi Arabia. The Kingdom, after all, accounts for a monster chunk of the revenue of Dubai’s foreign corporations — and is being increasingly insistent on them moving most of their presence to Riyadh. This pressure will only increase as the country moves further towards Westernisation.
And, unlike Dubai, Saudi Arabia is a real place with a real history — a vibrant culture that isn’t solely based on prostitution and low taxes. Just look at pictures of Jeddah’s Old Town, its ancient trading capital:
But it’s precisely these Westernising moves that trouble me. Saudi Arabia, unlike other Muslim countries, holds the heavy crown of being Islam’s birthplace. As such, it also hosts a politically and demographically significant group of religious and cultural conservatives who are anything but happy at Saudi’s Western turn. A group that has been disgusted with Saudi royalty’s general debauchery for a long time — and only placated by this royalty’s continuation of rather strict Islamic rules.
Should Saudi Arabia continue on its Westernising path and insist on crafting its independent foreign policy, it should be wary of the very large batch of its population that will take it as a patriotic and religious duty to oppose their new way, even if funded by foreign powers to do so.
