Finance, markets etc..
- Germany takes a step towards rationing over payment stand-off with Russia.
- Why is nobody talking about the fact that Russia is demanding gold for payments.
[Here’s the release from the Bank of Russia on March 28 noting that they will be buying gold at 5,000 roubles per gram.]
- Putin says Russia will enforce rouble payments for gas from Friday.
[There’s some debate over whether this is BS or not. JC Kommer, who I have a lot of respect for, says it makes very little difference to the big picture. And he’s definitely right that it mainly amounts to a reserve diversification play as well as an informal FX intervention to support the RUB. But I am interested in how it fits into Russia’s gold strategy which appears to set a floor on the price of gold in rouble terms. Someone else has pointed out that changing the currency denomination on payments for long-term gas supply deals amounts to a default.
- There was a lot of short interest in VXX, one of the ETNs that Barclays had to close down because of a “shelf registration” issue. (Just saying).
- German restaurants are allegedly removing french fries from the menu because of vegetable oil costs.
- Biden is tapping strategic oil reserves, as crude prices drop.
- Ukraine is having a nuclear reinsurance issue.
The Bank of Ukraine says:
The current situation in Ukraine has made it significantly harder to reinsure nuclear risks. The NPPs based in Chernobyl and Zaporizhzhia are temporarily under russia’s control. The invaders pose a threat to the research facility Neutron Source and the nuclear storage facility of the Kharkiv Institute of Physics and Technology, which have been taking heavy enemy fire since the war broke out.
- Edward Luttwak on how the CIA failed Ukraine.
[Fascinating account documenting the lack of situational awareness at the CIA because most agents do not bother to learn local languages. Luttwak says it’s this deficit that was responsible for agents mis-advising the US government about the commitment of the Afghan army and the likelihood of it folding in the face of trouble. Meanwhile, a lack of Ukrainian and Russian-speaking skills meant the agency failed to predict that the Ukrainian side would be willing to fight Russia. As he notes: “Hence the CIA told the White House that Zelenskyy would flee, that the government would dissolve, that the Ukrainian army would not fight, and that the Russians would control Kyiv in 24 hours.”
Luttwak concludes that: “Unless the US remedies its CIA problem by emptying out and fumigating the place, before restaffing it with people who care enough about the world to learn its languages, the US will continue to fly blind — and crash into the next Ukraine.” ]
- Meanwhile, Putin’s advisers are scared to tell him he’s wrong, say GCHQ.
- I interviewed Ukrainian playwright and film-maker Natalka Vorozhbit.
- I spoke with the CSFI about CBDCs.
From the “Fake News” zone:
- Priti Patel is pranked by Russians impersonating Ukrainian Denis Shmygal.
- Putin’s approval rating keeps going up. But it’s because of the fake news.
- The letter Z is being banned in Germany.
[I really don’t like it when people spell my name with an S though.]
- Medvedev tells RT the unipolar world dominated by the US and its allies is now over.
[This is the full transcript.]
- Award-winning investigative reporter Chris Hedges has been chucked off YouTube for merely having an association with RT.
[I’m developing a theory that the key reason the West is seemingly throwing in the towel on press freedom is because social media has destroyed media segmentation.
This, by the way, particularly applies to the financial media.
There used to be a time when financial newspapers were considered the ultimate truth speakers — read by both the left and the right — precisely because the market assumed investors could not afford to be misled by their own system’s propaganda. Greed, in other words, led to neutral media because money had to be led by dispassionate analysis and information advantage, not emotion.
But then came social media. This changed everything. First, everyone — including the financial press — wanted to succeed in the mission of achieving the ultimate number of eyeballs, clicks or viral episodes. This is because clicks meant more advertising and thus more sustainable business models. Then, they became paranoid about going viral for the wrong reasons and losing advertising altogether.
And since nobody can ever predict which story might go viral and which one will not, this led to a sort of “market for lemons” scenario for news stories. It was simply better to assume all of them might go viral than not. And if all of them might, then all stories had to be written to appeal to the broadest possible common denominator on the least controversial level. Voila. Cancel culture was born. And in this way extreme mediocrity in the “respected” channels became the norm.
This has now led to an even weirder scenario where the bulk of high-signal stories — even in the most respected publications — don’t get read at all. In fact, most of the best content is routinely under-absorbed and digested by only the tiniest specialist audiences, even at very popular titles. I know, because I’ve seen the numbers myself. But this state of affairs has also created a type of information blowback. The broader “intelligentsia” has not caught up with the reality that you can’t stay informed if you don’t read the newspaper from front to back. Nor do they understand that the stuff they see highly circulated on social media tends to be the common denominator filler that isn’t very meaningful at all.
What we have as a result is a super-star economy where a handful of stories increasingly crowd out the really informative ones in ways that mislead critical decision makers and influencers.
How this has come about is a function of how journalists have had to adapt to the “great social media filter” themselves. Anything actually capable of generating information advantage (or moving the Overton window) errs towards being under promoted or toned down to ensure it doesn’t go viral for the wrong reasons. Alternatively the news is packaged in highly caveated language or jargonised terms (sometimes Aesopian) just to ensure it doesn’t resonate with the common denominator who might misunderstand it at all.
On the rare occasion something controversial leaks through the filter the instinct for the rest of the pack is to deny or reframe it.
What all this proves, I think, is that in an age when all stories, information and news are potentially accessible to everyone — there’s an instinctive preference to guard against the adage that a little knowledge can be very dangerous in the wrong hands.
In the days of physical newspapers this was a naturally occurring phenomenon. The news was segmented and carefully packaged to suit specific audiences — and there was rarely any spillover. Highly contentious stuff — say like the stuff you might find in Jane’s Defence — was priced at subscriptions rates that were entirely inaccessible.
But all of this becomes much harder with the internet.
Even expensive paywalls are not enough to protect quality news outlets from dispensing inconvenient truths in ways that might upset a lot of people.
What’s more, just admitting that some audiences can’t handle the truth is taboo in its own right in a democracy. This is, after all, not Maoist China where the news was strategically tiered — propaganda for the masses, and truth for the elite.
The instinctive system-reaction as a result is to suppress controversial news stories across the board. Doing so, however, assures that even the “right hands” and key decision makers are deprived of the stories they need to make informed decisions.
To deal with this information trap we seem to have created a bizarre (albeit I think unwitting) public initiation ritual. Inconvenient or controversial stories are first flagged by system radicals. Anyone who dares to report them further, however, is suppressed, lambasted or stigmatised as a conspiracy theorist. This induces a public hazing ritual
for those who stick to their guns.
Then, over months, the news is slowly normalised as a possibility. By the time it’s widely confirmed — like with the Hunter Biden story — it’s not considered shocking anymore and thus deemed fit for public consumption. The hazed become heroes and the didactic process is completed.
Which is a long way of saying that the famous newspaper scene from Yes, Prime Minster is much less relevant today than it used to be, and that this — kind of — is the problem. But it’s maybe also the case that segmentation is slowly reasserting itself through independent media personalities who know their audiences — and what they can handle — better than their mainstream rivals do. They’ve also given up on trying to be everything to all people, just for the clicks.]
Previously in the “Fake News” Zone:
- Washington Post review confirms key details and offers new documentation of Biden family interactions with Chinese executives.
[I’m sure I’ve heard about this before. You know, around October 2020. The key detail: “Over the course of 14 months, CEFC, the Chinese energy conglomerate and its executives paid $4.8 million to entities controlled by Hunter Biden and his uncle”. Also, a substantial part of the money came from someone called Patrick Ho, a CEFC official, who has since been sentenced to three years in prison in connection with a multimillion-dollar scheme to bribe leaders from Chad and Uganda. Also, Hunter seems to have struck the deal in the midst of personal debt trouble. Also, he was given a 2.8-carat diamond ring worth $80,000 by Ye Jianming, the founder and chairman of CEFC, which he later claimed was only worth $10,000 and that he didn’t know what he did with it. Also, Hunter requested changes to the building he rented for business including new signage referencing CEFC and new keys for himself, his father, Joe Biden, his step-mother Jill, his uncle James and the Chinese executive Gongwen Dong. This was never followed through on. ]
Covid is still a thing:
- Lockdowns cost more lives than they saved and must not happen again, scientists tell MPs.
- There’s a chap called Sahil Gupta, who once interned at SpaceX, who is convinced Elon Musk is Satoshi Nakamoto. I’m not personally convinced that the case he has made amounts to cold hard proof of the connection. But the coincidences are interesting enough to put in today’s Blind Spot wrap.