In the Blind Spot (Anti-fragmentation, NATO, crypto)

This edition of the Blind Spot Wrap was compiled by Izabella Kaminska (IK) and Dario Garcia Giner (DGG).

Markets, finance, economics etc…

• The Fed decision was anything but a Volcker shock.
• Basel committee goes knee-deep into overseeing climate-related financial risk.
• The Tesla Hype Complex.
• What exactly is the ECB’s anti-fragmentation instrument?
  

  The Blind Spot will be looking into the details of the “anti-fragmentation instrument” the ECB announced on Wednesday. The FT has an explainer that isn’t really an explainer. Until we get to the bottom of it, it’s worth reminding readers there’s a general perception in the meme sector that the design of the European parliament emulates that of Peter Bruegel’s artistic rendition of the “Tower of Babel” – the most famous case of anti-fragmentation schadenfreude there ever was. Funny. – IK

• UK buys option to take 20 per cent stake in Sizewell C nuclear power plant.

Crypto crisis:

• The CEO of embattled crypto lender Celsius speaks but says very little.
• A new low for Apes.
• Bill Gates pretends he saw the crypto crisis coming all along.
  

  This is a bit disingenous of Bill. I personally attended an FT125 on-the-record event c. 2015 in which Bill was waxing lyrical about the virtues of crypto, with respect to bringing down the costs of international payments. He told Bloomberg a similar thing in an interview in 2014.  Everyone can change their mind. But his comments were intrepreted at the time as being extremely bullish and “good for bitcoin” by the boosters. I myself have changed my mind on bitcoin too. But I have done so transparently, going from ardent nocoiner to a measured bitcoin realist. I now accept bitcoin has a use case as the ultimate last resort payments mechanism in a crisis. That’s not because I think bitcoin or crypto will ever offer cheaper transactions. To the contrary I believe the system will always be more expensive. But if you’re fighting for your freedom (à la Ukraine) and need unofficial channels to help fund the resistance, it’s better to have this option available to you than not at all. – IK

• Novogratz says the economy is going to collapse.
  

  What’s interesting about Michael Novogratz is how he has managed to rebrand himself into a prominent and prophetic crypto influencer, given his extremely choppy trading record in the world of tradfi. – IK

News from our friendly neighbours in the Islamic Republic of Iran

• Satellite images from Maxar Technologies show that Iran appears to be preparing for a space launch amidst high tensions over Tehran’s nuclear program.

Clogs, polders, kapsalon, and transaction round-tripping

• An investigation by a regional centre finds Dutch holiday parks are being increasingly targeted as vehicles for large-scale money laundering operations.

NATO’s not dead…yet?:

• Turkey rejects NATO offer of trilateral talks with Sweden and Finland.
  

  Turkey’s obstruction of Sweden and Finland’s accession to NATO appears to continue. Ankara has consistently sought more concrete offers from their potential counterparties to deal with its considerations over ‘terrorism’; Turkey’s by-word for the Nordic countries continuing relations with organisations affiliated with the PKK, a group of radical Kurdish insurgents who have been in conflict with the Turkish state for several decades.

  One important word to say about this oft-misunderstood conflict is that the divisions are not clearly ethnic, but they are both cultural and religious; in many ways the fight between the PKK and the Turkish state is one fought amongst Kurds. Indeed, one of the main opposers of the PKK is Kurdish Hezbollah, a Turkey-based Kurdish Islamic militant group.

  Turkish spokespersons have insisted that a negotiated agreement would allow Ankara to drop its objections to Swedish and Finnish NATO accession. Taking a cue from the United States’ parallel slow dropping of support for YPG/J territorial claims in Syria, as their proxy status diminishes in value over time concomitant to the relative appeasement of the Syrian conflict, it would be unsurprising to see such an agreement form. – DGG

• Australia finally agrees a €555mn settlement with France over the dramatically scuppered submarine deal.
• For the F-35 fanboys (trigger warning), an interview with defence analyst Pierre Sprey, who says stealth capability is a scam.
• Illicit trade of Chinese shoulder-fired surface-to-air missiles is increasing.
• The former head of the Royal Navy is concerned Britain’s forces are too weak to stop a war or protect the nation from attack.

Civil war watch:

• 31 members of the white supremacist Patriot Front organisation were arrested at a pride event this Saturday in Idaho.
  

  Though the arrest of members of white supremacist organisations is hardly newsworthy, the recurrent appearance of this curious organisation in the news certainly is. The Patriot Front has been widely condemned in the fake news-o-sphere as a ‘fed front’, particularly owing to their members’ similarity in appearance (bottom left) to the widely disseminated ‘undercover fed’ meme (bottom right):

  

  A questionable taste in sunglasses and an attempt at uniformed anonymity does not make of the Patriot Front a front for the ‘feds.’  However, it does open up the interesting discussion of the use of far-right organisations as some Western countries’ sword in the so-called ‘strategy of tension’ – the most famous arguably being the Italian Nuclei Armati Rivoluzionari’s Bologna massacre, a bomb attack which killed 85 innocent civilians in 1980.

  The subsequent investigation led the public to discover that behind this fascist militia there lay the hidden hands of Propaganda Due, a pseudo-Masonic lodge, with members including a young Berlusconi, who had inflitrated NATO stay-behind army structures (the Italian node was called GLADIO) to effectuate false-flag terrorist attacks aimed at discrediting the Communist left, among other obscure objectives. Whether such strategies are still used is open to question. – DGG

Covid is still a thing:

• Was Omicron yet another leak?  Lab leak 2.0 theory.
• China bank protests stopped by QR health codes turning red.
  

  In another unfortunate episode of the fake news-o-sphere turning real, a protest planned by bank depositors faced with deposit freezes in central China was apparently nixed after authorities turned their health code apps ‘red’. Such actions, even when unsurprisingly conducted by the heavy-hand of the CCP, show the alarming ease with which emergency health infrastructure can be effectively utilised by official institutions to subvert the rights of its citizenry. – DGG

From the X-files:

• More UAP normalisation, Bloomberg edition.

Vatican intrigue:

• The pope says “war cannot be reduced to a distinction between good guys and bad guys”.
• Regime change for the Knights of Malta.
• The pope tells the editors of the European Jesuit Journals that the world is at war.
  

  The eye-brow raising bit is the following: “The world is at war. A few years ago it occurred to me to say that we are living the third world war piece by piece. For me, today, World War III has been declared. This is something that should give us pause for thought. What is happening to humanity that we have had three world wars in a century? I lived the first war through my grandfather’s experience on the Piave River. And then the second and now the third. This is bad for humanity, a calamity. To think that in one century there have been three world wars, with all the arms trade behind them!” – IK

• Louise Mensche is no longer a fan of the pope.
  

  You might be wondering why the market should care about Vatican affairs or anti-war proclamations by the Pope. As The Blind Spot has argued before, spiritual matters have a nasty habit of bleeding into geopolitical affairs, which of course influences markets. In the last cold war, Pope John Paul II, who was Polish, played a critical role in upending communism, notably by taking a clear pro-Western and pro-Nato stance, which offered Poles a focal point to organise around. That Pope Francis’ loyalties to the West are more ambiguous is meaningful. There are still millions of Catholics out there. –  IK

Media matters:

• The Blind Spot’s new podcast is a go, co-hosted by Izabella Kaminska and former Bitcoin Uncensored host Joshua Unseth, a.k.a Junseth.
  

  You may have heard me complaining about how YouTube randomly and inexplicably decided to shut down my pre-existing YT channel, which already had 560 subscribers. After waiting nearly two weeks for a reply from YouTube I finally capitulated and started a new account to host the pilot (before it got utterly stale). As if by magic, this morning I got a note from YouTube saying the account was reinstated. So do check out the podcast on the new account, but subscribe to the old channel, as I will be reverting to it for future episodes. – IK