DGG = Dario Garcia Giner (Resident Zoomer and former corporate investigations pro turned meme stock watcher and in-house drone expert.)
IK = Izabella Kaminska, Mother of Blind Spot Dragons.
TLDR: ChatGPT Summary:
It feels like it’s flown by. Or maybe that’s just because i’ve been in a whirl.
Up in smoke
You’ve been on the road, I hear?
10:31 IK: Yeah, well part self-inflicted travel pain from last weekend due to an overly aspirational decision to fly to Krakow for the weekend to see my dad and finally visit Wieliczka.
And part work to attend the NBP press conference in Warsaw yesterday, but more on that later
If you’ve never been I do recommend Wieliczka, world heritage site. 250 km of underwater salt cavern tunnels make it the place I want to be in the event Mr. P ever goes nuclear.
After which pretty much anywhere would seem delightful
even Stockton-on-Tees.
or that shithole as Cleverly called it
It’s like that show Silo. There are even toilets and a cafeteria.
Elon Musk’s boring company has nothing on this:
Anyway that’s a long way of saying I’m a bit out of the loop this week, so I’m going to leave my observations to the small amount of stuff I did focus on. But before that how are you and what’s caught your eye?
Which is not my forte
And mgmt at Nicolas have complained my windows are dirty
On this day… 43 yrs ago, John Lennon was shot and killed by Mark David Chapman at the age of 40. That caught my eye
However, dans les marchés..
Obviously everyone is waiting on payrolls data in a few hours.
Like they were a sandwich.
However, the big move in the last few days is the yen.
Japanese yen rallying, 3% off its lows as mkts interpret Ueda’s comments to parliament this week about his job becoming more challenging next yr, as a signal of the end of YCC.
Meanwhile, balance sheets that are strong would benefit from higher tastes and Japanese companies continue to increase share buybacks and dividend payouts.
At present consensus for scrapping the policy is April but the chances are it could come earlier.
That said, as mkts discount earlier than anticipated G7 rate cuts, there’s less pressure on the BoJ because the rate differential is reducing.
I had lunch with a HF this week and they were at pains to tell me how bullish they were on corporate Japan.
So much so, we are going to have to reinterpret the meaning of Japanification as reform really takes hold in corporate Japan
Bottom line: the end of YCC and a stronger yen is not the end of the japanese renaissance.
We arent at our heroes and villains segment yet.
However, Erdogan didn’t make my list of villains of the year because that implies a change of status. He’s a permanent member of the rogues gallery, owing to Islamofascism and his general humourless truculence.
Sadly, he’s also a permanent member of NATO and the sole obstacle to Sweden joining the alliance and after trying on everything in the last year, he’s now decided he will only agree to the accession when there is permanent peace in the Middle East, an oxymoron if ever I read one.
China remains the tail-end Charlie among global equity mkts and is ending its 3rd yr of underperformance.
Outperformance, it appears, may only result if the rest of the world takes a dive. The market’s best hope for a recovery would appear to be a stabilisation in the property mkt.
Sales this yr around RMB 6 trn are still down a third on pre-covid levels which is why the rmb 1trn promised by the govt to shore the sector up isnt enough.
As Chris Wood in G&F points out:
There has in recent weeks been a flurry of policies announced requiring banks to lend more to developers, a pressure they will go to great lengths to resist. There is certainly very little evidence as yet of a pickup in bank lending to the property sector.
He suggests the pressure will build gradually and the govt will react, in the same way that India did back in 2016 which has led to a huge recovery in the latter’s property sector. Chris Wood is still increasing India weightings at the expense of China in his model portfolios.
In his same Greed and Fear weekly note, Wood recommended
@marks – you are older than i thought. i was eating readybrek with my grandad when i heard the news before school
For those traditional investors in gold who do not trust Bitcoin, GREED & fear’s advice remains to own both. This is because of the reality that millennials are much more likely to own Bitcoin than gold. As for gold itself, the remarkable point remains that it is trading near an all-time high in US dollar terms but there have barely been any inflows into US-listed gold ETFs as yet.
He also has an 8% allocation to gold mining stocks in the global portfolio. The question is whether the allocation to Bitcoin and gold should be higher going into 2024, a year where GREED & fear is still expecting a US downturn but where it is extremely clear to GREED & fear that most investors have given up on such an outcome given the undoubted resilience of the American economy in 2023.
In Europe, Wood’s bullish position on Southern Europe is in diametric opposition to the bearish stance on Germany:
Greece got preliminary approval last week for its next €3.64bn tranche from the EU Recovery Fund. The country has already received €11.1bn, or almost a third of the €36bn total expected to be received between 2021 and 2026. These flows are significant relative to GDP.
If this is one reason why Greece remains the European economy about which GREED & fear is most positive, the other is that Greece has Europe’s most pro-business government whereas Germany, obviously, has the opposite. The Greek Finance Ministry has reportedly initiated discussions on the gradual early repayment of part of the €53bn bilateral sovereign borrowings from other Eurozone members, disbursed under the so-called Greek Loan Facility in 2010-2012
@johndc77 – are you sure you werent with learning difficulties and this was your mum,’s alibi?
The contrast with Greece’s renaissance and Germany’s current plight is amazing given the totally contrasting situation prevailing ten years ago. Meanwhile, of the many own goals committed by the current German government in recent years, the greatest has been the precipitous decision to deprive German business of cheap Russian energy. This is why future historians will likely conclude that Germany will end up the biggest loser out of the current Ukraine conflict
Since Dario curated my Reddit feed
I keep reading about people who have just yoloed their life savings on META calls and such like.
It’s very instructive
As for gold, the chart does look mighty spikey:
So Gold hit a record but short-lived high on December 3, just in time for the London Bullion Market Association’s annual dinner at Mansion House on Wednesday evening.
Which I was lucky enough to attend.
You never know who you are sitting next to at these events that’s for sure.
Though the weird thing about the gold market is not just that the key protagonists (from dealers, refiners to central banks) make for a very small and tight community, it’s that the market can be both super alluring in its mystery and insanely boring at the same time. Even a record high fails to really ruffle anyone’s feathers.
So what’s behind all the demand?
The China premium is still a thing and there is growing concern that the flailing economy and a weak renminbi are making gold a very attractive diversification asset for those about to be purged.
Speaking of purging, i hope everyone caught this mysteriously Unbylined Politico story yesterday?
(Sadly my China connections aren’t that good to write that story)
10:54 IK:
In a sign of instability in Beijing’s top ranks, foreign policy and defense officials are vanishing as Xi roots out perceived enemies.
Something is rotten in the imperial court of Chairman Xi Jinping.
While the world is distracted by war in the Middle East and Ukraine, a Stalin-like purge is sweeping through China’s ultra-secretive political system, with profound implications for the global economy and even the prospects for peace in the region.
The signals emanating from Beijing are unmistakable, even as China’s security services have ramped up repression to totalitarian levels, making it almost impossible to know what is really happening inside the country.
Anyway, lots of people seem reluctant to believe this. But I urge you to do some research on who our editor-in-chief is and where he spent a substantial chunk of his career. If anyone has the journalistic expertise to publish such a thing it is he.
.
10:56 IK: Just that the war on candles rages on.
I find it a terrible shame, as they’re so beautiful.
A reflection of our safety-first times. There must have been some candle directive a few years ago which banned public establishments (and public black-tie dinners) from using actual open fire. So now everything is lit with those little faux blinkery things that look cheap and awful.
I’m in touch with my feminine side
I have a coffee-scented candle on my desk in front of me as i type
You can’t go wrong! It’s like the Turing test for women.
If you don’t like candles YOU’RE NOT A WOMAN.
There, Keir Starmer, I’ve defined what it means to be a woman.
The candle business, however, seems to be on the up and up.
Are candles commodities?
Posh-scented ones not so sure.
The global candle market size was valued at USD 12.88 billion in 2022 and is expected to register a compound annual growth rate (CAGR) of 5.7% from 2023 to 2030. High consumption of candles as an aesthetic-appealing product among female millennials for household application is anticipated to drive the growth. Candles are increasingly being adopted in home décor to enhance the overall ambiance. The rising popularity of scented candles, in line with the wellness trend, is further expected to boost industry growth.
That’s from something called Grand View Research.
(Anyway, If anyone wants to buy me a candle, hint hint, I am currently a fan of the NEOM ones. But i’m also a fan of the traditional ones, like Charles Farris. Literally amazing.)
Are there any listed Candle makers? Sadly not that I can find. You can expose yourself via Estee Lauder I guess, which owns Jo Malone, to some degree. But that probably wouldn’t be a good idea because of its other baggage:
I also recommend a portfolio constructed of bonds, stocks, bitcoin, gold and candles.
If you don’t believe me check out Mark Haefele’s UBS House View investment note for 2024:
The dawn of a new year is a time to reflect and to make plans for the year ahead. In
this letter, we present 10 New Year’s resolutions aimed at helping your portfolio navigate.
Spend more time with family and friends – best wishes for the year ahead
2. Take up yoga – get in balance, and stay disciplined yet agile
3. Go for quality over quantity – buy quality in both bonds and stocks
4. Embrace change – pick leaders from disruption
5. Prepare for a rainy day – hedge market risks
6. Don’t put all your eggs in one basket – diversify with alternative credit
7. Try to see things from both sides – trade the range in currencies and commodities
8. Think about the long term – capture growth with private markets
9. Build a plan – a strategy for achieving your goals is key
10. Seize the moment – manage liquidity
This brings us on very smoothly to my latest wine of 2023:
Urbina Rioja 2006 Gran Riserva
It’s a truth universally acknowledged you can get the best wines in Spain for a fraction of the best wines in most other countries and this mostly Tempranillo (with a bit of Mazuelo) is the most amazing value at ~£25 roughly.
In fact, even with a discount from Nicolas, I can buy it cheaper elsewhere.
Extracted, smooth, blackcurrant fruit, lots of vanilla from new oak and slips down like a silk camisole
@marks – some overdo it for sure but generally i like the coconut/ vanilla overtones it imparts. if the fruit is good enough to withstand it and the oak is judiciously applied then I love it
I was beginning to take it personally.
Then finally, I got an answer this week, including the actual details for the monthly press conference.
So I decided to head over just to make my face known, as an investment in a promising new relationship.
The incoming coalition government want to hold the president, who they believe is a PiS crony, accountable for the double-digit inflation of 2022.
The other bit of context is that he is possibly one of the most memorable central bankers in the world since he looks a bit like Darth Vader when he takes his helmet off, but with an amazing capacity to never stop talking.
His press conferences usually go on for a minimum of 2 hours, during which time he can opine on almost anything. He just stands there and shoots from the hip. Complete opposite of say the Christine Lagarde style.
This has got him into trouble a few times.
Indeed Glapinski has already sought legal opinion about the lawfulness of being removed and Christine wrote him a letter confirming he would be able to take the case to the Court of Justice, implying that the ECB will back him vs Tusk. Awkward.
But of course, it would, because the ECB would not want to start a precedent where central bankers are removed for failing to prevent inflation, since that would mean the removal of pretty much all the central bankers.
Glapinski has a reputation for mouthing off against all Western media claiming we are in cahoots and biased.
This is how I rationalised being ignored.
But it’s also why i decided the opportunity to attend a press conference was too good to miss.
Luckily, I somehow managed to get there in time, and good thing I did too.
Because the story this week was…
Glapi delivered an unprecedented 7-10 minute presentation!!
(None of them from me). Such a troll.
Glapi, I daresay, was clearly on instruction from the new press person to rein it in. Try not to give the Tribunal even more rope to hang you with, sort of thing.
(I asked Izzy to choose a villain because if she chose hero she’d have to pick me and I’d be uncomfortable and bashful about that)
11:23 IK: hahaha,
Very funny
OK, so I was going to pick Glapinski
But then I had a last-minute change of heart, after looking him in the eyes directly and seeing the Anakin in him.
Also he looked so beleagured, I just couldn’t do it him. Don’t kick a villain while he’s down
It is…. THE EXECUTIVE WOMAN
I was going to personify her as Nicola Horlick, but she’s old news.
Anyone from this list (other than Margot Robbie) will do:
My hatreds flourish in their specificity.
And just make normal women feel bad about themselves.
My hero is Steve Rosenberg, BBC correspondent in Moscow who does a singularly brilliant job of covering the war in Russia and holding the Kremlin to account without being arrested or murdered.
He strikes you as kinda boring but he’s a brilliant pianist (who can play the MOTD theme tune in the manner of a Russian classic)
And there’s a wry humor in some of what he broadcasts. He’s buttonholed Putin on more than once occasion, is clearly a Russophile (like me) but who is unable to contemplate the tragedy of Russia, nation in thrall to a mafia class. He’s been the Russia correspondent for 24 years. Years in Russia are much longer than anywhere else.
And just yesterday he did a brilliant demolition job on that wretched harridan Karin Kneissl, the austrian foreign minister who danced w Putin at her wedding.
She describes Putin as “the most intelligent gentleman” she’s ever met. So Steve, kinda boring guy, I salute you.
