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In the Blind Spot (Another parallel universe holiday edition)

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Dear Subscribers,

This is another ‘lite’ (and therefore free) edition of the newsletter as I finish off my annual leave. Thanks to Dario Garcia Giner for putting the bulk of it together. We will be back with proper analysis and commentary next week. For those curious about my thoughts on the Farage affair, you can check out my latest Twitter X extended post thingy here. But there’s nothing in it I haven’t stated in this newsletter before.

In other news it was a big week for UAPs. I still can’t make heads or tails of the issue, so I decided to take a fintwit poll about how seriously to treat the matter. So far, the majority of the finance community that follows me thinks it’s a government distraction op. I am sympathetic to this idea.

I find myself wondering how listed companies like Lockheed Martin can get away with black budget R&D secret projects in the post-Theranos age. Turns out, there are massive exceptions for investor disclosure under NISPOM, which is the National Industrial Security Program Operating Manual.

And these exceptions don’t just apply to defence contractors. Even a company like McDonalds, which provides contracting services to the US military, is given an information cloaking allowance under the regime. You can read more about it here. It’s amazing when you think about it. We talk about military civil fusion in China all the time, but the fact that investors have and always have had zero scrutiny over classified programmes at US defence contracting firms must have some bearing on efficient capital allocation and pricing. Or so you would think.

In other news that you might have missed this week, the heat on Hunter Biden turned up many notches as his plea deal fell through, a superconductivity breakthrough had everyone wondering if levitation might be possible soon, and Facebook was shamed for purging posts at the US government’s behest.

More importantly, the ECB lifted its key deposit rate to 3.75 percent this week but it also decided to re-jig how it remunerates the minimum reserves it requires from commercial banks.

As my Politico colleague, Johanna Treeck, reported… until now, the ECB had paid interest on such balances at the same rate as its deposit facility. But now it will pay them nothing. It will, however, continue to pay interest on excess reserves, which remain “ample”.

Until next week, adieu.

Izzy

ESG backlash:

  • Energy Minister Greg Shapps vowed to ‘max out’ oil and gas reserves in Britain’s North Sea. Shapps stated that Britain has ‘no option’ but to extract these reserves to obtain energy security.
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  • The Telegraph’s Catherine McBride called for a British referendum on net zero. The article pointed out how similar net-zero policies in the Netherlands and Germany, which often seem irrational to the average voter, have caused severe blowback against the political establishment.
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  • UK Prime Minister Rishi Sunak signalled a readiness to soften his green policies, being eager to create a distinction between the Tories and Labour on environmental policies.
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  • Russell Brand’s videos have been getting a bit predictable and formulaic in their sensational spin on most things. But his latest takedown of climate tsar John Kerry’s hypocrisy about his private jet is a must watch, and sees the comedian back on fine form.
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  • Merryn Sommerset Webb noted that Coutts’ compulsive focus on inclusive values was likely linked to it having become a “B Corp” in recent years. Companies receive a B Corp certificate if they commit to operating as inclusive, equitable and regenerative.

Business, Economics, Finance etc …

  • The Telegraph revealed that high street lenders had introduced the right to monitor customers’ social media accounts, on the back of major banks being placed under increasing pressure to outline the amount of checks they carry out on their customers.
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  • CNBC revealed that Gabe Bankman-Fried, FTX Sam’s brother, attempted to purchase the island nation of Nauru to construct a fortified bunker-state and spa before FTX’s collapse.
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  • There was another reversal of fortune for Europe’s convicted and charged Libor traders, this time in Germany. A German labour court concluded there had been organisational lapses at Deutsche Bank leading to a working environment that could have encouraged Libor rigging. According to Reuters, the Frankfurt labour court said Deutsche Bank had itself contributed to the problems which it had blamed the traders for when dismissing them.
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  • Mining.com revealed that European warehouses had stored up to €7bn worth of Chinese-manufactured solar panels, in response to suspiciously low Chinese solar panel prices, which have been flooding Western markets.
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  • The ECB’s move to cut payments on minimum reserves followed a research paper from the St Louis Fed, which prescribed a similar pill for the US.
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  • The Bank of England revealed it had appointed former Fed chairman Ben Bernanke to lead a review into the Bank’s inflation forecasting record.
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  • ICYMI: The case against anti-money-laundering regulations: David Birch’s piece from two years ago on the pitiable state of anti-AML and KYC policies is a relevant read today. Birch quoted several high-profile studies on these policies, showing they are incredibly ineffective and expensive.
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  • Prosecutors dropped campaign finance violation charges against FTX boss Sam Bankman Fried.
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  • The price of orange juice soared to another all-time high due to the outbreak of a citrus-targeting disease in Florida.

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Cryptocurrency evangelism:

  • On day three of Sam Altman’s Worldcoin launch, massive queues of people lined up with the promise to receive some cryptocurrency in exchange for an iris scan.
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  • Noted ‘alternative media’ voice and chronicler of the deep state, Whitney Webb, wasn’t too impressed with technologist Sam Altman’s ambition to scan everyone’s retinas with a silver orb in exchange for cryptocurrency. Neither was Twitter founderJack Dorsey.

Media matters:

  • The New York Times reported that after almost a decade of owning the Washington Post, Jeff Bezos had become more involved this year, outlining ambitions to make The Post profitable, despite it currently being on track to lose $100 million.
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  • Twitter users pointed out how Elon Musk’s vague promise that paying subscribers may earn thousands of dollars through advertising was similar to “the stuff of Nigerian prince email scams.”
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  • British YouTubers planted a mole within Just Stop Oil, the controversial anti-oil activist group that has blocked highways and vandalised museum paintings.
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  • The BBC’s Business Editor, Simon Jack (also on holiday this week), apologised to Nigel Farage over his role in the recent Coutts-Farage debacle. Jack had publicly suggested, with false evidence that came from the private bank, that Coutts had cut ties with the former UKIP leader based on a lack of funds.
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  • Nigel Farage, meanwhile, said he stood with historic nemesis Gina Miller after she revealed that neo bank, Monzo, had unbanked her True and Fair party.
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  • Just as the ‘Twitter files’ officially turned into the ‘X-files’, congressman Jim Jordan unveiled his own equivalent, ‘Facebook Files‘, in which internal Facebook documents subpoenaed by the Judiciary Committee seemed to prove that Facebook and Instagram censored Americans because of White House pressure. Some of the posts the White House wanted taken down were memes about vaccines. Among those pushing back against those requests at Facebook, at least initially, was unlikely free speech hero (and former deputy UK Prime Minister) Nick Clegg. “These documents, AND OTHERS that were just produced to the Committee, prove that the Biden Admin abused its powers to coerce Facebook into censoring Americans, preventing free and open discourse on issues of critical public importance,” Jordan Tweeted.
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  • In the second part of Jordan’s exposé, the Chair of the weaponisation of government committee also revealed this wasn’t the first time such requests had been made by the White House. Previous requests had centred on blocking discussion about Covid origins. The WSJ has more on the story.
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  • Unherd delved deeper into now public secret messages between virologists, showing how they conspired to misdirect public Covid discussion away from lab leak theories in 2020.

Climate Crisis:.

  • Former Greenpeace activist and ecologist turned climate crisis critic, Patrick Moore, flagged a chart from a Lancet study, which had compared cold deaths to heat deaths in Europe with an unequal Y-Axis. This unequal axis appeared to show heat as comparably deadly as cold, though cold deaths exceeded the former by 10x. The adjusted chart is next to it.

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  • Moore had previously commended Dr. John F. Clauser, Nobel Prize winner of Physics in 2022, for claiming in May that “there is no real climate crisis”. Clauser had, at the time, stated that, “climate science has metastasised into massive shock-journalistic pseudoscience.”
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  • Authorities in Italy and Greece blamed the month’s devastating wild fires on arsonists rather than climate change, though the extreme heat will have made things worse. One arsonist was caught on camera by a drone.

American political drama:

  • The New York Post reported that a testimony by Hunter Biden’s ex- business partner, Devon Archer, before Congress next week is expected to show that Biden’s then-VP father was on speakerphone with Hunter’s business associates at least 24 times. A judge has since scuppered Hunter Biden’s plea deal, which would have let the President’s son get off with misdemeanour charges.
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  • The White House Press Secretary stated that President Biden was “never in business with his son” but did not clarify whether the former VP had been put on speakerphone while Hunter was conducting business.
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  • Twitter sleuths drew attention to the mysterious circumstances surrounding the death of former President, Barack Obama’s private chef, who was recently found drowned after a midnight paddle-boarding excursion. (A Russian chef vendetta perhaps?)
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  • Mitch McConnell suffered a malfunction while speaking at the podium on Wednesday, forcing fellow Senators to lead him away.
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  • Presidential challenger Robert Kennedy Jr complained about the White House blocking his requests for Secret Service protection, but not everyone agreed he was entitled to the protection, despite his unique circumstances.

Politics, politics, politics:

  • The FT’s Janan Ganesh revealed the unthinkable about French President Emmanuel Macron. He might not have been a  ‘Davos man’ all this time after all.

Geopolitical hot spots:

  • A Swiss intelligence report concluded that Ukraine’s Volodymyr Zelensky may be showing some ‘authoritarian traits’, as some Swiss parliamentarians call on Ukraine to carry out some democratic reforms to halt this backsliding.

Technological changes:

  • Chinese officials reportedlychanged the weather‘ to avoid rain on Xi Jinping’s parade according to a Beijing University study. The study alleged the government induced rain the night prior to the parade and then laced the clouds with chemicals to reduce air pollution and guarantee clear skies for the day of the celebrations.
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  • Google put in place a pilot program for 2,500 of its employees to operate their work PCs without external internet access, as the company ostensibly tries to put additional safeguards in place against cyberattacks.
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  • Korean scientists claimed they had made a room-temperature superconductivity breakthrough. But there were reasons to be sceptical.

UAP in the House:

  • Three former high-ranking personnel from the American military, including Dave Grusch, David Fravor, and Ryan Graves, testified under oath of their knowledge of UAP before a House committee. Most notably, Grusch reiterated that parts of the U.S. Government had ‘intact’ non-human vehicles, and had recovered some ‘non-human biologics’ at alleged crash sites.

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