Where finance and media intersect with reality

In the Blind Spot (Pancake swaps, productivity, vaccines)

Credit: Chris Yarzab (Flikr creative commons license)

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

Economics, markets, and money

  • An excellent talk on the future of money by all-round banking expert Huw Van Steenis.
  • A Trail of Bits report commissioned by the Pentagon questions how decentralised blockchains really are.
  • Electronic vehicles are increasing in price, not decreasing.

    For a long time it was a known fact that electric vehicle sales at most legacy auto manufacturers were being cross-subsidised by traditional combustion sales. I’m struggling to find any up-to-date data on the degree to which this is or isn’t still the case. If anyone has seen any, do feel free to ping me. – IK

  • Nouriel Roubini writes on the incoming stagflationary debt crisis.
  • BNP Paribas abandons commodities finance business in the US.
  • The WSJ claims President Biden doesn’t appear to know anything about how the private economy works.
  • Germany’s Uniper in bailout talks to plug $9.4bn hole.

    First the government bailouts came for the banks but I did not say anything because frankly they were insolvent; then they came for the airlines and I did not say anything because Lufthansa was never going to make a profit; then they came for the gas utilities and I did start to wonder if there would be anything left for the government to come for at all by December … – IK

  • The BIS goes deep into DeFI in its annual report.

    I never in a million years thought I would see the term “pancake swap” in a BIS report. And yet here it is:But they are keeping a nice on eye on institutional involvement in the whole sector:

  • Will the inflation crisis solve productivity?

    This is a really important piece which spells out how vaporware-ish the post-2008 recovery has been. I did not appreciate, by the way, that there was such a thing as a ‘Productivity Commission’, or that it had traced the beginnings of the productivity crisis to 2008.

    Regardless, the productivity puzzle has troubled me for a long time. I’ve always been inclined to argue that it results from the productivity illusion created by the big tech companies, which rather than make things more efficient have actually “un-scaled” the economy by making it more dependent on cheap labour not less. This is the case from Amazon to the gig economy. The “new app-based economy” is more zero sum than many appreciate. And if the inflation crisis actually forces true efficiency on the system, could actually stimulate some real innovation. (Necessity is the mother of all invention and all that.) –  IK

 

Hiring, firing, buying, and dying.

  • Meta announces plans to cut their hiring plans by at least 30 per cent this year.
  • Berkshire Hathaway purchased an additional 9.9mn shares of oil firm Occidental Petroleum Corp, bringing its total holdings to 17.4 per cent. The Omaha Sage’s firm made the move on Saturday for around $582mn
  • Permabear Peter Schiff’s Euro Pacific International Bank in Puerto Rico has been shuttered by local authorities despite Schiff saying there is “no evidence of crimes”.

The Malthusians are back:

  • Matthew Ehret’s essay delves into the roots of a claimed imposition of technocratic and transhumanist policies by tracing centuries of British imperial grand strategists’ implementation of Malthusian scientific (or ‘scientific’) governance practices.

Covid is still a thing:

  • The WSJ also goes on the hunt for a more effective vaccine and in so doing inadvertently admits government officials lied to people.

    From the WSJ: “Breakthrough infections that had been rare became common, while protection based on having the virus itself similarly diminished. Many researchers agree that the developments weren’t well-communicated to the public; it was difficult for the federal government to walk back promises about how strongly infection and transmission would be blocked. “There were members of the administration that went too far about what the vaccines could do, that it was a magic force field that would prevent infection,” said Vin Gupta, a pulmonologist who served as a health adviser to President-elect Biden’s transition team.”

  • The FT presents a u-turn on covid vaccine effectiveness.

    Was there a memo to @all the media? If so who sent it? And do those who were cancelled for pointing the above out now get to be uncancelled?

Caspian summits (and tables)

We recently covered this topic in today’s Spot Markets Live. Be sure to check the transcript for today’s session.

EMEA tension:

Developing world developments:

  • China’s ambassador to Tonga denies their consistent extension of loans to the indebted and devastated economy of Sierra Leone is in any way ‘debt trap diplomacy’.

To be fair to China, this seems one of the least egregious aspects of CCP power projection. I would not hesitate to qualify it as less intrusive than the techniques many Western states use in their rise to power.

Despite the strategy’s exceptionally broad reach — currently centred across South East Asia and Sub Saharan Africa — it is ultimately consensual – DGG.

Perhaps, alongside this development, Uganda will also discover they are in dangerous need of “freedom”?

Dangerously fact-light speculation

  • Reddit post on Wall Street Bets commenting on the apparent emptiness of the North Carolina coast on July 4.

During a recent trip to Corsica, I spoke with the owner of a popular beach bar who was lamenting the strange lack of tourists (and even locals) this season.

My friends and I had a similar experience in Marbella (before you judge, it is my hometown – and I would not recommend visiting), where several of the oft-lit clubs were in fact empty.

Considering the impact inflation is having, perhaps this is an early indicator. Much like the smoke billowing from the Russian embassy prior to the Ukraine invasion?

That said, the reports are not an entirely consistent. But it is worth keeping an eye one – DGG.

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