Comments in bold addressed to audience members
JR = Julian Rimmer (Resident Boomer and former EM markets pro turned writer.)
DGG = Dario Garcia Giner (Resident Zoomer and former corporate investigations pro turned meme stock watcher and in-house drone expert.)
TLDR: ChatGPT summary:
Welcome to December. Come on in, the water’s lovely
So, today for a treat we have Dario and I actually i the same city
Good morning, Dario and welcome to the Big Smoke
Not so happy to be back in the big misty grey.
So today is a big day for Spaniards Dario
Meme of the day
.So the big news is Bitcoin
I’m up 1.2%! But being ITM feels off.
In other crypto news
Top US Treasury officials warned that Stablecoins like Tether could be in the sights of US regulators
‘to prevent abuse by terrorists’
While the official, Adeyemo, didn’t name tether specifically:
““We cannot allow dollar-backed stablecoin providers outside the United States to have the privilege of using our currency without the responsibility of putting in place procedures to prevent terrorists from abusing their platform,”
And speaking of dodgy individuals and Tether – we highlighted an excellent and intriguing story on this week’s Blind Spot Newsletter:
“TETHER’S SECRET AGENT. Who exactly is Christopher Harborne? Dirty Bubble Media ran an exposé on the intriguing figure behind Tether’s success. According to the investigation, Harborne may be a far more important figure in Tether’s operations than previously thought.”
“The man’s shady past includes a shareholding in CIA-connected QinetiQ. He is also the sole owner of a British fintech company that specialised in moving large sums of money around the world.”
QinetiQ doesn’t exactly make weapons, but they make everything but.
Robots, armoured protection, etc. All very innovative stuff
And lastly, Coinbase has rallied almost 60 percent in November after Binance CEO’s wilfully detention.
The company has emerged as the sole well-regulated (seemingly) crypto exchange, pooling together the funds from crypto hodlers who don’t want their crypto disappearing into shady schemes and private villas in the Bahamas
Is it because the latter is now considered digital gold?
Or is it merely a function of the ‘everything rallly?
I suspect some of the former
Well. I’m not sure. But I can imagine they are
Central bank buying
In 3Q23 they doubled their purchases from 175 tonnes to 337t
Now of course, USD is weakening and lighting a fire under cmdty complex
@marks – I dont mind Saylor, he’s very articulate
Just to highlight while we are talking about cdty
Don’t forget uranium
(see URA ETF performance ytd)
UST1YR now down at 4.25%
VIX becalmed <13, VVIX – 35 points from yr’s high at 120 and yen has bottomed if rate differentials with the dollar have peaked?
Japan’s buoyant stock mkt owes much to a depreciating currency so this could become a headwind, esp for auto exporters if the US economy is slowing/ in recession
But some of the move is undoubtedly a consequence of Japan’s changing corporate landscape.
A couple of salient points…
Lukashenko has arrived in China and met with Xi Jinping.
Beyond parody
And another bizarre note….
Mandatory annual health checks for all Russians must include an assessment of the reproductive abilities of men and women
Nov witnessed the biggest-ever easing in financial conditions…
According to GS.
The rally driven by rate relief, seasonality/ technicals/ buybacks/ exodus from money mkt funds into equities
The systematic community biggest buyer of stocks, record short to net long, next exposure still only in 32nd percentile of last 3 yrs
Even if you think the mkt has a bit more juice left in Dec, given vol is so cheap, perhaps starting to take out put protection is advised.
Come January, US political risk is firmly on the agenda again
Iowa caucus Jan 15, New Hampshire primary Jan 23
Guesses rather than picks… lol
This is especially relet when hedge fund crowding is as pronounced as it is now
The Meme ETF is closing down this month
Is the era of meme stocks over?
Alongside a really mysterious Ryan Cohen tweet that GME hodlers are claiming means GME made a profit this Q3, we will only know by December 6 – when GME announces quarterly earnings
And now for something totally different.
Let me introduce you then to the Albanian Disease.
Something which I was prompted by when i visited Albania in Sept and then reminded of by Savvas Savouri from Tosca Fund Mgmt
Who sent me back down the albanian wormhole.
Now, on paper, this particular coastline hugging the Balkan economy records a remarkably low Misery index.
was introduced by some economist or other a few decades back
Albania’s latest inflation (3.8%) & interest rate (3.25%), are comparatively low, & even its jobless rate (10.7%), is modest by regional & wider Euro standards (Spain at 11.8%).
Very very common in Spain to register as unemployed and get a real job that pays under the table.
I suspect Spanish unemployment figures in real terms are rather healthy. The whole country seems to be working these days.
For Albania, though, the standout numbers are the USDALL EURALL exchange rates.
It’s going up
Given relatively low yields, this isn’t the attraction. What is it? The export of its prime-age workers.
(ALL 6th best performing fx ytd)
Albania’s demographics provide stark proof of an exodus; a population decline of about 15% in the last two decades.
A clear consequence of so many overseas workers sending home remittances, has been upward pressure on the lek;
Albania’s comparatively low jobless rate is also informed by emigration.
The remittance capital flooding into Albania is funding a property boom; fostered by low interest rates.
It’s been suggested that surging housing construction will act to keep Albanians working at ‘home’, and attract workers from its near abroad
But since most Albanians in London I know are builders, I’d say scant chance of this.
(although the ad sommelier in 67 pall mall is an Albaian called Elton)
Head sommelier.
A surge in tourism revenues is also a major contributor.
I saw evidence of this at first hand when I visited the Accursed Mountains in Albania back in September.
Good food, friendly people, astonishing scenery. I think it is the most beautiful place I’ve ever visited.
Lord Byron for example loved it
The remedy for the Albanian Disease? A Euro peg.
And speaking of hacks
Understated news item for this year has been the number of high-profile cyber attacks on British academic infrastructure
“The Rhysida ransomware group claim to be behind the attack, have said they will auction off the stolen data.
The cyber gang said last week that the price for data, that includes passport scans, was set at 20 Bitcoin (£596,459).”
I hope you don’t have a BL account, Julian.
It turns out that ████ █████ University, particularly ███████ hospital, has been under a total ransomware attack for the last few weeks
The attack is so thorough that ███ engineers don’t expect IT services to be available properly until next year
It’s so bad that researchers at █ █████ can’t even plug in their USB sticks to their machines to download the data from their experiments
What’s curious is also that there’s literally no online coverage of it – other than SML.
Ransomware attacks are something that just keep going on and on.
“As of 2023, the global average cost per data breach amounted to 4.45 million U.S. dollars, an increase from 4.35 million U.S. dollars in the previous year.”
And keep increasing in price and effectiveness.
Cybersecurity is one of those weird industries where you meet everyone but cyber people. I feel like every other girl on raya works at sales there
Have you heard of raya?
And feel better for it
Substitute keyboard.
No, I have not heard of raya.
Anyways – speaking of cybersec
What about some ETFs?
You heard it here first people – the future of cybersecurity is a digital-analogue hybrid
apols, I meant to discuss when I referred to central banks buying
11:16 DGG:
“OPEC+ is increasingly struggling to coordinate large reductions given the size of cuts already in place and the limited impact they are having on prices, JPMorgan analyst Natasha Kaneva wrote in a note Friday. In the end, Saudi Arabia may have only one option — launch a supply war by flooding the market with oil. “They could just add two and a half million barrels into the market for six months and just flush it,” Paul Sankey, a top oil market analyst and president at Sankey Research, said on CNBC’s ” Fast Money ” Thursday.”
Except I’d say Saudi is in an even tighter place this time. It’s not out of strength, but out of weakness.
Issue for Saudis is that nonOPEC oil producers are producing at record levels that can now cover global demand, which forces the Saudi-led alliance to cut to keep market balanced in their favour
“Goldman still expects OPEC to keep Brent in a range of $80 to $100 a barrel in 2024. But compliance with voluntary cuts is a “stress test” of whether Brent will maintain an $80 floor, analyst Daan Struyven wrote. A slowdown in U.S. supply growth in 2024 is another major assumption supporting that price floor. One downside risk to the $80 floor would be persistent upside surprises in crude inventories particularly in the U.S., according to Goldman. Global inventories rose by 300,000 bpd on average in October and November, while Goldman had forecast a decline of 700,000 bpd. And then there is the problem of OPEC unity — or lack thereof. “The further rise in spare capacity and the voluntary nature of today’s cut imply that additional large OPEC+ cuts in response to any additional inventory beats become increasingly difficult to implement,” Struyven wrote.”
In a strategic move to address their growing budget deficit, SA has secured its largest loan yet – $11bn, involving at least 15 banks like ICBC, Citi, First Abu Dhabi and HSBC
“Notably, the interest rate on the loan is set at 100 basis points + SOFR overnight rate, as reported by Bloomberg. The kingdom’s public debt, which stood at $265 billion at the end of September, underscores the financial complexities it faces in executing its ambitious economic transformation plan.”
One could argue Vision2030 is coming at just the right time
In related news – that you may be interested in
Saudi talk of alcohol legalisation has been rumoured since 2019
I spoke to a real estate and hotel developer in Saudi who claimed MBS has signed several hundred alcohol licenses which are ready to be granted in Riyadh but particularly the seaside developments of the NEOM project, and he’s just waiting on the death of his father, King Salman, to approve it
I think once alcohol is legalised you’re gonna really see Saudi growth at the expense of the other oil rich kingdoms. Ultimately, these small minnows relied on Saudi government contracts for so much of their expat presence.
I would much rather live in Saudi than the UAE
If alcohol were legal
John – what the hell, that is hilarious
So, on this prompt…
Dario, who is your first villain of 2023?
(who is he?)
CEO of Disney
He made no similar show of Twitter’s former leadership’s widespread censuring of state-backed misinformation on Covid-19… not a fan
But the gripes go further
Disney has been one of wokeisms greatest victims
From producing outstanding family friendly flicks to diversity first tales oriented at young wokesters who were never Disney’s client base to begin with, it’s no wonder the company is going pear shaped
But some critics argue that Disney’s woes go much further than this typical right wing talking point
Disney’s recent movie Wish was widely panned by critics and only generated half of expected ticket sales
Its crime? It was simply a bad movie
I think it’s because the real crime of political correctness has been erasing the original darkness of the Grimm brother tales – rather than skin colours
Vladimir Kara Murza
A political prisoner in Russia, who has been target of at least two poisonings which almost killed him
Found guilty of treason and sentenced to 25 years in a Russian prison. This is the longest current term for any political prisoner in Russia, and is longer than the maximum sentences for rape that results in death (20 years); kidnapping (12 years); terrorism (15 years); and aggravated assault and robbery (15 years)
Portrait here by Bill Browder in Time magazine:
The first of my top ten wines for 2023….
A value play here
Most astonishing wine I had in 2023 was a rosé. I never used to drink it before but this hot summer (if you can remember that far back) I became a devotee of rosé. It was a random recommendation from the sommelier in 67 Pall Mall and I was agog at the bags or rich fruit a wine could contain while still maintaining freshness.
It’s the most unprepossessing bottle of wine I’ve seen but don’t judge this bottle by its label. Aged in oak for three months, this is a serious wine.
God gave us a memory so we would have roses in December? Well, I think God gave us a memory so we would have rosés in December.
