Where finance and media intersect with reality


In the Blind Spot (Protests, Stockpiles, Bunds)


The Blind Spot was off on Monday commemorating Her Majesty Queen Elizabeth II’s funeral. In this edition of the wrap, we catch up on the news you may have missed during the mourning period (especially if you were in the UK).

Econ, Business, Finance etc…

  • Study by the Australia Institute suggests inflation is not wage-led, but profit-led.
  • Russia’s huge budget surplus has vanished.
  • Macron proposes using migrants to repopulate rural areas.
  • An SEC ombudsman was found to have misled Congress and an Inspector General.
  • Huge losses incurred by a Danish pension fund in 2022 shine a light on Europe’s troubled pension fund sector.
  • The European Union outlined the Single Market Emergency Instrument, the EU’s new supply chain-related emergency powers.

    The legislation channels regulation that already compels energy firms to set aside a certain share of their product as reserves for emergency use – but will this time apply to a much broader set of essential goods.

    A good way to think of the move is as the real economy/resource equivalent of post global financial crisis regulation that forced banks to increase their liquidity capitalisation ratios. Going from a just-in-time (thinly capitalised/reserved) structure to one that is far more capital intensive but also more resilient to shock.

    As with banking regulation, however, all of this reserving is expensive as it amounts to an opportunity cost  – IK

  • Der Spiegel analyses how badly German industry will react to the incoming recession.
  • Low-priced Ukrainian grain entering European markets irks French and Polish producers.
  • Biden has some thoughts on inflation.
  • The wage spiral is here courtesy of the Netherlands.
  • The Bund yield is at a 9-year high.

    European periphery debt has historically been the driver of Eurozone fragmentation and default risk. Bunds, to the contrary, have always been considered the benchmark safe asset rate for Europe. The fact that Germany is now at the front-end of European economic distress stands to totally reverse this relationship. Did anyone in the sovereign debt market foresee a scenario where German debt becomes the problem factor for the Eurozone not the Italian, Greek or Spanish debt? We doubt it.

    Betting on contracting European spreads due to German debt deterioration is probably the outlier trade of the decade. And it might just come good. – IK

  • YouTuber outlines why China is in terrible political, cultural, and social shape because of its zero-covid policies.
  • Janet Yellen reads sensitive economic documents in economy class on planes.

Geopolitical Pivots:

  • Lizz Truss considers attending the first meet-up of Macron’s “European Political Community” club.
  • The Moscow market tanked on news Putin’s speech was delayed.
  • Wolfgang Schauble admits Lech Kaczynski was right about Putin.

Energy issues:

  • The Queen’s funeral causes grid anomalies.
  • Germany nears nationalisation of gas giant Uniper.
  • Neil Collins pitches the issuance of “Elizabeth bonds” to fund the energy cap.

Bitcoin Stuff:

Beyond Normal:

From the Fake News-o-Sphere:

What You Missed: (Buried along with the Queen):

  • Putin lets it be known he is not at all happy he was not invited to the Queen’s funeral.
  • De Santis sent a bunch of migrants to Martha’s Vineyard.
  • John Lydon accuses Sex Pistols of cashing in on late Queen’s death.

    Lydon, who penned the lyrics to the anti-establishment punk-rock classic “God Save the Queen”, put out a statement saying he wishes to distance himself from any Sex Pistols activity which aims to cash in on Queen Elizabeth II’s death. His statement read: “In John’s view, the timing for endorsing any Sex Pistols requests for commercial gain in connection with ‘God Save The Queen’ in particular is tasteless and disrespectful to the Queen and her family at this moment in time.” Does that mean in the battle between punk rock and the establishment, punk rock fought the the monarchy but ultimately the monarchy won? Certainly looks like it. – IK

  • Republicans are up in arms about “censorship” of anti-monarchist protest.

    What’s been fascinating to watch more broadly is the about-turn on free speech the whole spectacle has ignited, nicely encapsulated by this meme:

    For a writer who is usually allergic to all forms of mass groupthink and hysteria, it’s been very interesting to watch those who were more than happy to engage in such practices over the course of 2020-2022 suddenly change tack.

    On the thorny issue of the right to protest the monarchy during a period of national mourning, The Blind Spot sides with Jemima Kelly’s take on the whole matter. As Kelly notes in last week’s column, those on the right — from Piers Morgan to the Telegraph — have mostly stood side by side with those defending the right to protest the monarchy even if they themselves do not agree with the position. Jemima urges the left to be equally respectful of protest they dislike. “Both left and right are guilty of endorsing free speech only when it suits them — and the Tory government has displayed a total lack of ideological coherence on the issue. But it is only the left that mocks “free speech warriors” and seems to have lost interest even in defending freedom of expression as a principle.” She’s right.

    The strangest thing about the death of Queen Elizabeth for me is that after decades of not really caring about the monarchy I discovered that in my heart of hearts I must have been some sort of closet royalist all along. This was an odd realisation because I was entirely anti-consensus on the death of Diana and remember very vividly marvelling at the mass hysteria back then. Even stranger for me was the fact that my usual compulsion to go against the grain was entirely contained. I surprised even myself by how touched and moved I was by the Queen’s passing. It was an entirely involuntary action.

    As a result, I’m sympathetic with Lydon’s stance that there is a time and place for protest and vulgarity. All that being said… I am still of the view that protesting the monarchy — if that is what you are inclined to do — is just fine. II’m even not against doing it in a highly visible way that offends others. Protest that is strategically hidden from sight defies the point of protest.

    That makes me think the left are right to be outraged by the fact that their protest is being airbrushed out of history by mass media channels that are more concerned about causing offence than reporting on reality. They are also right to oppose the fact that those bearing placards are being moved aside by the police on sensitivity grounds.

    However…! If the above is to be considered fair, the same position must also apply to causes the left holds dear. But this is too often not the case. Take the example of Christian groups protesting outside abortion clinics. It was a Labour-majority West London council that in 2018 originally introduced the concept of a protest “buffer zone” around an abortion clinic in a move to protect women from being intimidated or mentally distressed by entirely peaceful Christian protestors bearing placards. This has now created a legal precedent for geographically limiting any form of visible protest on “sensitivity” grounds anywhere in London.

    Here at the Blind Spot we take no position on the rights and wrongs of abortion itself. Nor do we think it makes sense to make subjective judgments about the scale of the respective distress. We just note that you cannot have it both ways. You either hold the principle of free speech dear or you don’t. If you start applying it only to causes you agree with, you’re clearly much less liberal than you think you are. As the adage goes: “If liberty means anything at all, it means the right to tell people what they do not want to hear.”

    That, however, does not amount to defending protest that takes the shape of criminal behaviour, such as pelting eggs or milkshakes at people/vehicles or any other form of criminal damage or assault. Nor does it amount to preventing judgment of those who choose to protest in an insensitive manner.

    This, after all, is why Royals developed etiquette and protocol. Centuries worth of inadvertently getting their heads chopped off has taught them that sometimes one’s cause is better served by taking the more responsible and less antagonistic pathway. – IK

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