Where finance and media intersect with reality


In The Blind Spot (City Regulation, Coal, Anon Archaeology)


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

Business, Econ & Finance:

  • Walmart’s CEO claims they could shut stores and hike prices due to the spate of thefts at their stores, stating that prosecutors’ lax’ approach towards thieves needs to harden.
  • The Bank for International Settlements claims that pension funds and ‘non-bank’ financial firms have over $80tn of hidden, off-balance sheet dollar debt in FX swaps.
  • Tesla breaks their own records by producing 100,000 cars a month from its Giga factory in Shanghai.
  • City strategist Albert Edwards is interviewed by Will Dunn for the New Statesman, and claims that Rishi Sunak’s economic policies are ‘lunacy’.
  • Amazon layoffs expected to mount to 20,000 employees across the company, including senior managers.
  • Northwest Biotherapeutics accuses market makers like Citadel Securities and other big traders of manipulating its stock price by ‘spoofing’ orders.
  • In-depth article on InvestorTurf on the dodgy Wall Street practice of using synthetic shares to conduct naked shorting.
  • UK banking rules are set for one of the largest overhauls in over three decades with what is being dubbed the ‘Edinburgh Reforms’.

    And so the endless cycle of over-regulation followed by under-regulation continues. But will any of these changes make a difference given the retrospective “precedent” introduced with the Libor case? Tom Hayes, the former Libor trader who served nearly six years in prison for manipulating Libor but who is now seeking a quashing of his case, doesn’t think so.

    Hayes told The Blind Spot:The Libor rules that never existed were introduced by the courts in my case and a legal duty to comply with them constituted the ‘fraudulent misrepresentation’ used to prosecute us. The unlawful means deployed in the Libor cases was ‘deliberate disregard’ of the rules. Rules introduced retrospectively in 2015 by the court when in reality they never existed and in fact were the other way round as confirmed by the founders of Euribor. That’s because we never submitted numerically false rates, they had to create a non-existent rule and tell the jury if we didn’t follow it we were guilty of a fraudulent misrepresentation!” – IK

  • Texas subpoenas BlackRock for the company’s promotion of allegedly biased ESG policies that aren’t in the best interests of their investors.
  • Vanguard Group quits a major financial sector alliance on net-zero climate-friendly policies, becoming the largest defection yet.

Too Big To Fail:

  • BlackRock has frozen hires, reduced spending, says CFO. (Just how well capitalised is Blackrock itself? – IK)

Commodity Conundrum:

  • For the first time in 30 years, the British Government has approved the opening of a new coal mine.
  • The FT finally catches up on how Germany’s industry is in dire straits due to the lack of cheap Russian gas.
  • What is going on in coal markets?

    The relatively tiny Newcastle coal (from Australia) is trading at a huge premium to API2/API4 coal (from Europe/South Africa). The disconnect is even becoming a talking point in Glencore investor updates. (Chart via Marketwatch).

    During this week’s Glencore investor update, UBS analyst Myles Allsop asked the following: “Maybe first of all, can you talk a little bit about coal prices and why we’ve got such a huge difference between the Newcastle 6000 benchmark and API2 and some of the other benchmarks, what’s driving that big differential in the high CV market?Glencore’s CEO Gary Nagle:
    “Not just our CV market Myles, it’s specific for the Newcastle spec. It’s a very specific spec, there’s a limited volume of it. It’s, you know, certain boilers, certain utilities can only buy and use Newcastle spec. Some — it also is critical in blending into certain markets where certain markets perhaps need a 5,7 material and there’s an abundance of 5,5 material around, but they can’t take the 5,5, so they have to pay premiums for a 6000 to be able to blend down to a 5.7.

    “So as Tor [Peterson] used to say he ran the coal department, there’s markets within markets, and there’s markets. And that’s very true in the coal market today, whether you’re looking at a high quality Newcastle, whether you’re looking at that versus the API2 delivered into northwest Europe, versus the 5,5 material, those sorts of things. So the the markets that really — you’ve got to look at markets within markets and Newcastle itself is really the premier market where the quality is terrific, and is a very sought after coal because, A, for blending, and B, because certain boilers absolutely need that material.

    Glencore’s CFO, Steve Kalmin:
    “It’s also a relatively small market in overall percentage.”

    Speaking as a former Platts reporter with commodity market assessment experience, it’s always noteworthy when an entire commodity complex is led higher by what looks like something of a squeeze in a much smaller and arguably easier to push around market.  – IK

Media Matters:

  • Meta warns it may remove news from its platform if the United States Congress passes a media bill that would force it to compensate news content on its sites.
  • Twitter Files moves into its third chapter: The Donald Trump removal affair.

    I will be returning to the Twitter Files in greater detail shortly. For now, I want to share an anecdote about the time a questionable source who was trying to influence my coverage at the FT accidentally let slip that he “had ways of making his critics on Twitter disappear or get banned” (or words to that effect). When I pressed him on it, he said: “Sorry I can’t tell you exactly how. But trust me we have our ways.” The accounts he was referencing were indeed expired shortly thereafter. The guy’s own Twitter meanwhile remained fully operational despite being laden with equally venomous (if not more venomous) hate speech as the accounts he was complaining about. He also had no moral issue about sharing illegally hacked emails with me.

    In short, I think everything being alleged in the Twitter Files is very plausible. – IK

Crypto News:

  • Nigeria severely limits the availability of cash withdrawals to force usage of the new Nigerian CBDC. But some say this may have been fake news, and is simply the product of Nigeria being a bit cash-strapped at the moment because they’re changing the currency.
  • The UK government is looking for suppliers to help conduct a CBDC proof of concept.
  • Monero continues to increase in usage and price on the darknet, now second only to Bitcoin.

    Dark marketplace AlphaBay, today’s Silk Road equivalent, has been gaining in market share over competing dark marketplaces during 2022. AlphaBay achieved notoriety for selling stolen Uber accounts in 2015, and for sales of a “School Email Bomb Threat” service in 2017. Perhaps the key to Monero’s record usage levels are tied to this marketplace, as AlphaBay is one of the few dark marketplaces that only accepts this privacycoin. – DGG

Politics, Politics, Politics:

  • Peruvian President Pedro Castillo’s attempt to carry out a self-coup d’etat fails, resulting in his arrest.
  • Iranian authorities executed four individuals that were allegedly spying for Israel.
  • Saudi Arabia and China sign a Huawei deal, in a show of deepening ties between China and the Kingdom amidst a state visit by Xi Jinping.
  • White House press secretary claims that Musk’s ‘Twitter Files’ are an unhealthy ‘distraction’.
  • It turns out the daughter of Anthony Fauci worked at Twitter. As did John Podesta’s niece.
  • Merkel “admits” that the Ukraine-Russia Minsk Agreements were a stalling tactic to allow a fortification of Ukrainian defences and to strengthen its position as a key anti-Russian proxy.
  • Polish Prime Minister Morawiecki claims that to stop the EU sliding into a “centralised bureaucratised behemoth”, Europeans must choose Republicanism over bureaucratic centralism.
  • Germany arrests coup plotters. But was the threat from the supposed extreme-right Reichburger plotters in Germany more politically useful fiction than fact?

WW3 Watch:

  • Indian Army trains eagles to take down drones and carry out surveillance, equipping them with live cameras.
  • Researchers from the University of Adelaide find a large pro-Ukrainian bot army that is allegedly used to influence Western policymakers online.
  • China unveils a new drone type capable of accurately firing a fully automatic rifle.
  • ComputerWeekly has a big scoop outlining how former UK spy boss Richard Dearlove leaked names of MI6 secret agent recruiters in China to back an aggressive right-wing US campaign against tech company Huawei.
  • The FT gets a special invitation into MI6’s core training and recruitment base — but what was the conditionality?
  • Izzy sits down for a Leaked Lunch with economist and author Pippa Malmgren.

One Big Utility Mess:

  • American federal authorities are investigating a spate of reported acts of sabotage on utility companies in South and North Carolina, where some electrical substations were recently riddled by gunfire.
  • The ever-controversial Canadian Keystone oil pipeline has been shut over reports that over 14,000 barrels of crude spilled into a Kansas creek, making it one of the largest crude spills in the United States in recent history.

Our Contested Past:

  • Amidst the online discussions ignited by Graham Hancock’s new Netflix documentary, an anonymous archaeologist writes for Unherd on the rise of Archaeologists Anonymous – groups of dissident archeologists who have created a shadow research network to push ahead with inquiries mainstream academia cannot cope with.

    Why are archaeologists so reticent to consider alternative viewpoints? After all, it’s a field whose major findings are consistently shifting every half-century. Surely archaeologists should seek to hedge their bets and consider these trends by understanding their knowledge will never be complete? The real tale of the backlash against Hancock’s new documentary, though, is not one exclusive to archaeology. It’s a tale of how our supposed centres may have fallen out of love with bold inquiry.  – DGG

  • Can we use gravitational waves to detect extraterrestrial craft?

Is Covid Finally Over?

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