This edition of the Blind Spot Wrap was compiled by Izabella Kaminska (IK) and Dario Garcia Giner (DGG).
Econ, Finance & Business etc:
- An announcement by Bed, Bath, and Beyond (BBBY) management prior to market open on Wednesday has the Wall Street Bets community all excited. The stock’s price has now recovered from August lows of less than $10 a share to about $13.35.
- The EU is to intervene in energy markets as it braces for energy shortages across Europe.
- Homeowners are queuing for days to buy fuel in Poland.
- The Fed says it has accelerated its quantitative tightening programme. But the NY Fed now reports that it has had to conduct a small value overnight repo operation with primary dealers and standing repo facility counterparties in signs that the financial system is already struggling to cope.
I have a Bloomberg Opinion column out this week arguing that quantitative tightening will inevitably lead to pressure in the market for intraday funding, which has the capacity to bleed into overnight funding shortfalls and onwards. But I also highlight that there are now financial tools available — ironically stemming from crypto markets — that can help markets navigate these waters by creating a far more active and distributed market for intraday funds. – IK
- Chinese banks are experiencing mortgage asset stress on their balance sheets. But why is there so little concern about western delinquencies in the face of spiralling energy costs and higher interest rates?
- Check Point Software Technology warns that an active crypto mining malware is targeting victims posing as a fake Microsoft Translator tool. Once installed, the malware begins mining the Monero (XMR) cryptocurrency.
- Iran legalises the use of digital assets to import goods and services in the Islamic Republic.
- Online attention focuses on a video featuring a radio squabble between two pilots active around the Taiwan Straits this weekend.
- India has accused China of militarising the Taiwan Strait due to a Chinese military research vessel docking at a Sri Lankan port, igniting fears Beijing intends to use the port as a naval base.
- The New York Times reports reveals a culture of hardship and drug use in the US Navy seal training programme.
- Bashar al-Assad issues an administrative order ending the retention and recall of reserve officers and students for military service.
- The United States is to appoint an ambassador to the Arctic Circle.
- Russia has closed off entry to the Crimean Peninsula via the Crimean bridge.
- The Biden administration has asked Congress to approve of $1.1 bn arms sale to Taiwan.
- The Royal Navy’s HMS Prince of Wales has broken down after departing from the south coast of the UK.
The incident set off an interesting discussion on our Discord server related to the effectiveness of aircraft carriers in modern warfare. Evidence implying they may be obsolete includes a disastrous US exercise in 2002, where a tiny force of OpFor, organised as a small conventional force, smashed a US carrier group within moments. The following podcast from “The Red Line” covers many of these issues and is worth a listen. – DGG
- The Solomon Islands are banning entry of foreign navy ships until new processes for admittance of foreign military craft are drafted. The declaration comes after an incident five days ago when a US Coast Guard ship tried and failed to gain access to dock in the Solomon port.
Death & Taxes:
- French tax authorities have deployed Google AI to detect thousands of undeclared swimming pools. The move has so far netted them around $10mn in previously uncollected tax revenues.
- Mikhail Gorbachev, the former Soviet president that brought in perestroika and in so doing took down the iron curtain, has passed away. Memorable public performances included a starring role in a Russian Pizza Hut commercial, which openly mocked the impact of his reforms on the economy.
The X Files:
- A Senate Intelligence Authorisation bill notes that “cross-domain trans-medium threats to United States’ national security are expanding exponentially.”
- A pilot captures St Elmo’s fire on video.
- Donald Trump apparently bragged that he held intelligence on French President Macron’s sex life.
- A top-level FBI agent who played a key role in suppressing the Hunter Biden laptop story has resigned.
From the “Fake News” zone:
- Twitter bots labelled factual information about Covid-19 as misinformation.
- Twitter and Meta have shut down several dozen accounts linked to a pro-US propaganda campaign.
- If you can’t beat them join them. France and Germany look to recruit online influencers in their bid to counter Russian propaganda activities.
- Craig Pirrong argues that Alexander Dugin’s influence on Putin has been highly exaggerated.