This edition of the Blind Spot Wrap was compiled by Izabella Kaminska (IK) and Dario Garcia Giner (DGG).
Markets, finance, economics etc…
- Russian rouble hits near 7-year high vs dollar as tax payments loom (chart courtesy of CNBC).
Putin has been indulging in the schadenfreude. Here’s what he’s been saying in his domestic channels. The following is via RT: “Anti-Russian sanctions backfired on the West When the US and its allies launched the campaign to “cancel” Russia over the conflict in Ukraine, they hoped to crash and undermine the Russian economy and society. The sanctions have instead boomeranged on their creators, aggravating social and economic problems, driving up the cost of food, electricity and fuel, and hurting the quality of life across the West, but especially in Europe. “The European Union has completely lost its political sovereignty, and its bureaucratic elites are dancing to someone else’s tune, accepting whatever they are told from above, causing harm to their own population and their own economy,” Putin said. EU citizens will pay the price for “decisions divorced from reality and taken contrary to common sense,” he added, as direct losses from the sanctions alone could exceed $400 billion in a year.” – IK
- Ignazio Visco, Governor of the Bank of Italy, speaks about inflation and long-term interest rates.
Visco provides further clues about the mysterious anti-fragmentation tool the ECB is designing. From the speech: “As early as last December, the Governing Council stated that flexibility in the use of its instruments would remain a key element of monetary policy whenever there are threats to monetary policy transmission. President Lagarde clarified that this included the possibility of deploying existing instruments or introducing new ones to prevent the risk of market fragmentation within the euro area from materializing. The second instrument, currently being designed, will serve to increase – and to lay lasting, solid foundations for – the ECB’s capacity to ensure that the impact of monetary policy is as uniform as possible across the entire euro area. I would like to clarify two aspects of this decision and these instruments. First: their aim is purely one of monetary policy, intended to facilitate the pursuit of price stability; they have no other purpose, much less that of financing imprudent and unsustainable fiscal policies. Second: the gradual normalization of monetary policy and the action taken to fight fragmentation are fully complementary. The former cannot proceed in an orderly fashion without the latter; in order to defend the appropriate monetary policy stance, we must prevent malfunctions or interruptions in its transmission mechanism.” – IK
- More thoughts on the anti-fragmentation tool, this time from Breugel here.
- Larry Fink and the financial industry’s new emperors.
The topic of the “Power of the Twelve” has in the last couple of weeks been very much normalised at the FT. This interests me because one of the last columns I wrote for the FT was on this very topic. And it was spiked. (lt was later published at MoneyWeek). The editors objected to me using Pfizer critic Robert Malone’s comments about the excessive market concentration of Vanguard and Blackrock on the Joe Rogan Show as a lead, despite them being incredibly topical at the time. The whole point of the column, of course, was to flag the ridiculousness of finance twitter coming to the defence of Vanguard and Blackrock in its rush to cancel Robert Malone. Go figure. – IK
- Coinbase job tracker as an indicator of crypto health (courtesy of Globaldata):
- The Ginean military junta continue to wrack the nerves of the mining industry by increasing the pressure on companies Rio Tinto Simfer and Winning Consortium Simandou to pay larger royalties.
- Bellingcat on irregular troops backing up Russia’s army in the Kharkiv region.
Are we still in Kansas?
- HTC promises release of a curious ‘metaverse smartphone.’
- A ‘fact checker’ from USA Today forced the journal to delete 23 articles from their page, following an investigation that determined one of its reporters had fabricated sources.
The extent to which this fact-checker to fabricate sources, such as tampering with recordings of interviews, is hardly anything new in the media landscape – remember Der Spiegel’s award winning journalist, Claas Relotius, who was found to have made up stories and invented protagonists in at least 14 articles?
The issue becomes particularly pertinent when the need to control information in an emergency, such as in COVID-19, encourages private companies to attach overdue gravitas to any one journalistic source. For instance, Facebook used USA Today’s ‘fact-checking’ stories to determine the algorithmic power it would provide to other outlets’ posts. Such scandals are inevitable when the divine onus of factualism is burdened on an ultimately small and self-selecting group of individuals. – DGG
From the fake news zone:
- WHO official now backs Wuhan lab leak theory too.
Big Brother Watch:
- There’s a plan to expand the nationwide collection of citizens’ internet records.
- Panic buying in Kaliningrad as Lithuania bans rail cargo from Russia.
- China prepares to launch its third aircraft carrier.
I still fondly remember browsing chest-beating American YouTubers’ videos denouncing the sorry state of the Chinese navy in the mid 2010s. Stories that repeated old tales, such as the odd saga of China’s first aircraft carrier purchase, the Liaoning, or the conversion of another aircraft carrier, the Kiev, into a luxury hotel in Tianjin, are now well and truly obsolete.
China’s progression from a brown-water to a true blue-water navy in the span of a short decade has of course not really surprised any serious analysts on the topic.
It remains to be seen how their new power-projection capabilities will be exercised in reality, especially in view of the United States’ continued strong military commitments to its agreements with fellow states in the East Asian region.
We must not forget that the original contemporary great-power naval arms competition, that between Germany and the United Kingdom in the late 19th to early 20th centuries (which many credit with having initiated the arms race that led to WW1), ended up as ‘much ado about nothing’. The brand-spanking-new German navy, which had so inflamed the insecurities of the British Empire, ended up spending most of the war hiding away in safe harbours.
Boys with new toys hardly want them broken. Regardless, such developments should not stop us from realising the potential obsolescence of carrier-led fleets in an age of available hypersonic and cheap anti-ship missiles.- DGG
- Leaked audio recordings show TikTok employees in China had access to personal and proprietary data on US citizens.
‘Stop the steal’ steals few spotlights:
- Texas Republicans enacted a resolution at their GOP state convention this weekend to declare President Joe Biden as ‘not legitimately elected’.
Though the Trump camps’ curious and dangerous claims regarding the illegitimacy of Biden’s win in 2020 received little serious attention from the mainstream and European presses, we must not forget the traction such claims received throughout some red states.
The support from 17 red states’ attorney generals given to Texas’ efforts at the Supreme Court to sue the states of Michigan, Georgia, Wisconsin and Pennsylvania in a bid to overturn Biden’s win in December 2020 was widely ridiculed as a last-ditch, long-shot attempt by desperate Trumpians . Indeed, these efforts were quickly nixed by the Supreme Court.
However, and unfortunately, the decisions of attorney generals, state senators and congressmen, and of the red-leaning American public, are not decided in the well-heeled bureaus of major newsrooms (or even in the Supreme Court); to deride such efforts is to ignore the slow cracking that is taking place at the heart of the States’ social contract with the Feds. The more such efforts are ignored or dismissed as folly by the well-meaning majority, the faster they may grow. – DGG