Where finance and media intersect with reality


Spot Markets Live, 11/12/23 (Spotify, Staged AI’s, Chinese Imports & Exports)


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.)

ChatGPT Provided TLDR:

  • Spotify’s Sour Sounds and NFT Clowns: JR & DGG riff on Spotify’s low payouts and NFT confusion, a market’s fusion of jitters and musings.
  • EM Debt’s Bet and AI’s Fret: Markets swing with EM debt and staged AI demos, a market waltz with tech’s pulse and fiscal whims.
  • Russia-China Trade: A Muddle, a Struggle: A tango of trade between lands, balancing on geopolitical sands, a narrative of economic hands.
  • Shapiro’s Show: Debate of Fate: DGG jabs at Shapiro’s debates, while JR lauds a fallen Ukrainian soldier.
  • Egly-Ouriet’s Wine Delight: JR savors the Egly-Ouriet’s wine flight, a taste of elegance, a cellar’s delight.
10:30 JR: Good morning, Aloha and greetings fellow market wizards.

welcome to the second week of December but the final week of SML as drive relentlessly towards year-end culminating in an orgiastic frenzy on Friday morning

Good morning, Dario, welcome geopolitical zoomer sine qua non

10:31 DGG: Hello Julian!!
10:32 JR: On this day in 2017

Keith Chegwin dies at the age of 60 and the world was a poorer place for it, especially those Brits of a certain age


10:32 DGG: I have no idea who that i


who is he

10:32 JR: if you dont know, you dont need to
10:33 DGG: Right

Have you done your 2023 Spotify Wrapped, Julian?

10:33 JR: And the Boomer is immediately befuddled and disoriented by some new tech gimmick. This must be a deliberate zoomer strategy at the outset of the conversation – and moreover, it works.
10:33 DGG: Its 100% intentional

Its thing where subscribers to SPotify can see their most listened tunes and genres of the year

Do you listen to music on spotify julian?

10:34 JR: I’m a late adaptor to all technologies

 and only downloaded spotify at the end of November. I’m still on the free trial

10:34 DGG: So casettes are the rage in julian land?

10:35 JR: I suspect my wrapped – if that’s the correct terminology; grammatically it sounds as unnatural as saying ‘windows is closing – would show a good deal of Schubert, Wagner, George Melly and Gregory Porter. A psychologist would have a field day.

10:35 DGG: Well here’s mine:

( I dont know why my Spotify is French.)

I would recommend Yann Tiersen’s playlist EUSA as the perfect listen for working on a rainy day.

Hes known for making the Amelie soundtrack

10:36 JR: i did see that film. disneyfied Paris, as I recall
10:36 DGG: What, I wonder, is on Spotify’s 2023 wrapped?

Here are Spotify’s top3 favourite artists for 2023

10:36 JR: is that a band?

never heard of them

10:36 DGG: lmao

1 – Mass Layoffs are a’Comin

because Spotify’s first 2023 sound comes with a layoff of 1,500 employees or 17% of its workforce

2 – My Debt’s Eatin Me

10:37 JR: not very christmassy
10:37 DGG: because Spotify will be working overtime to pay interest on its $1.3bn of capital raised in exchangeable notes due 2026

3 – Aint Growin Like I Used To

Despite claiming that Spotify’s investments since 2020 ‘generally worked’ the streamer admitted its room for growth has diminished

But we’re bringing these news to SML not for Spotify per see – but to how artists have been reacting to news of Snoop Dogg’s recent disclosure

The artist announced that for one billion unique Spotify listens

he’s netted a grand total of

$45,000 dollars

10:38 JR: some would argue that’s $45,000 more than it’s worth
10:38 DGG: Yes, $45,000

In the days of apple music or casettes at a few dollars an album, this is obviously a bit of a climb down

10:39 JR: although we do sell his cognac in our shop
10:39 DGG: Snoop raised these figures when speaking about his growing interest in using Non-Fungible Tokens as a way for artists to keep a closer hold on royalty payments for use of their music

Is it any good?

10:40 JR: the cognac is pricy and called ‘landy’ but since an untoward incident with cognac in 1987, i’ve never drunk it since

+140% ytd

10:41 DGG: Well at The Blind Spot we believe the mainstream misunderstood the core values behind NFTs potential valuation

Which – by the way – are kinda back

Sales value jumped by 32% in October and by 50.7% in November – even if these are mostly driven by the increased value of the tokens used to price NFTs.

10:41 JR: i wonder how the Donal Tramp NFTs are trading?
10:41 DGG: The mainstream saw pixellated JPGs and rightly considered them an artificial bubble

News Image

The former president said his NFTs were worth on average $1,300 in April, when their value had already slid under $650.

Nobody is performing well on face value of these NFTS

Because – again – we expect the value of NFTs is not the glitzy stuff like above

The true value of NFTs is structural – it can incentivise creators to put their work on the open marketplace by promising to reward them with royalty payments on sales in secondary markets

When the main market mover – OpenSea – announced it would not enforce royalty payments this summer, it caused a rout from the platform

10:43 JR: i actually never realised there was supposed to be a return generated
10:43 DGG: ITs been experiencing consecutive declines in trading volume, while the other major NFT platform that has capped (though obligatory minimums) for royalty repayments – Blur – have driven artists away

Instead, NFT creators have joined in the launching of a marketplace that enforces high royalties

“Magic Eden Ethereum will become the first major Ethereum-based NFT marketplace that is contractually obligated to honor creator royalties”

But this is about the ned of the short term good news for NFTs. Key indicators – unique users – are still dropping like flies


10:44 JR: i’d rather have a dead fly than a Trump NFT
10:44 DGG: The real question is, if we see a rise in royalty enforcement collection online, it may only be a matter of time before we see these customs drive royalty enforcement at mainstream art auction houses

Did your son ever bother u with nft’s julian?

10:45 JR: He did not. With good reason. I think his father’s career deterred my son from an interest in investment full stop.
10:45 DGG: Speaking of being deterred from an investment, maybe Google is finally regretting their acquisition of DeepMind

The end of last week saw a trailer drop for DeepMind’s latest AI ‘Gemini’

did you see the trailer?

10:46 JR: i actually did see a brief thing about a blue rubber duck and it seemed so futile
10:46 DGG: Well, it claimed to show footage of google employees testing to see if the AI can judge what the camera was being shown
10:46 JR: so it was futile AND unreal?
10:46 DGG:


Well, staged is the better word

10:46 JR: so it wasn’t a real rubber duck?

10:47 DGG:

“Instead, the actual demo was made by “using still image frames from the footage, and prompting via text,” rather than having Gemini respond to — or even predict — a drawing or change of objects on the table in real time. This is far less impressive than the video wants to mislead us into thinking, and worse yet, the lack of disclaimer about the actual input method makes Gemini’s readiness rather questionable.”

Another notch to DeepMind’s annus horribilis, who no doubt have brilliant tech that got shafted by a google exec who wanted video proof their tech was better than ChatGPT

Last in markets miscellany, we have an anonymous reddit user who claimed to be a former employee of Lumen Tech, and claimed that Miscrosoft may be preparing an acquisition

Lumen Technologies, Inc. (formerly CenturyLink) is an American telecommunications company headquartered in Monroe, Louisiana, that offers communications, network services, security, cloud solutions, voice, and managed services.”

In short, the CEO of Lumen is one Ex Microsoft VP, who has aggressively restructured Lumen to make it a better sales provider to the American government

“My hypothesis is Microsoft wants to further their hold in the defense sectors and plans to do so by acquiring Lumen. Lumen is a consortium member of every large undersea cable and provides most of the layer 1 transport to the government. Having Microsoft purchase Lumen immediately puts them in a position to win massive multi-billion dollar contracts, and overlay their technology as a value add. This then provides the government with an easy button to not only purchase their data infrastructure but to have all the bells and whistles Microsoft provides included seamlessly. If there is one thing I learned working Fed, is that the government loves an easy button.”

Undersea cables are a fascinating thing

“Lumen is capable of pivoting and creating dense datasets due to the fact they have direct access to 70% of all global internet traffic, and have vision into another 10% through peering agreements. This gives them access to 80% of all global internet traffic. This would dramatically increase Microsofts AI offerings, and could make all their selling efforts more effective.

By Microsoft purchasing Lumen, their security, AI, government, enterprise, and all data transfer offerings would be dramatically improved based off the information they could feed into it.”

Fascinating speculaiton

And looks like if it did go ahead, MSFT would be able to cinch the acquisition for potentially pennies on the $


10:51 JR: moving from the digital to the analogue world I inhabit (Keith Chegwin references etc etc )

let’s start with the obvious

NFP was pretty darned Goldilocks

reading GS strategy this weekend, the leading market forecaster, Pasquariello was at pains to point out just how the US economy was very resilient in 2023.

Fed shrank B/S by $800bn and it raised rates four times yet GDP was still a very respectable 2.5%  & 2.7mill jobs were added.

10:53 DGG: You also had higher labour force participation rates – which ticker up higher to 62.8% up from 62.7% last month, with average weekly hours worked moved up slightly from 34.3 to 34.4

10:53 JR: it’s amazing to think a year ago headline inflation was 9.1% and Fed Funds were 1.5%

10:54 DGG: Wages also didn’t do badly – increased 0.4% on a monthly basis, with 4.1% total over the last year

Whereas economists had expected them to only rise by 0.3% and rise 4% for the year

10:54 JR: G7 economies now have base effects helping inflation, there’s a background decline in energy/ gas prices, core good normalisation/ relief of supply bottlenecks etc etc.

Stocks troughed Oct 22, eps growth bottomed 2Q23.

The S&P started 2023 on 17x, index now +22% ytd, starts 2024 on 19x

4Q GDP is tracking 1.4%, and FY 24 estimates are 2.1%.

I suspect the big rally in the bond mkt is behind us, removing one tailwind for equities.

and buyers of the mkt at present seem to be household and corporate

HFs have sold for 3 straight weeks though so the pain trade remains upward

into year-end

The Big Seven + 74% ytd and the S&P 493 +8%!

10:57 DGG: 74% wow!

Huge discrepancy!

10:58 JR: Energy sector was +131% in the last 3 yrs but we had a 25% underperformance in 2024

GS (e) $80 Brent in 2024, so much OPEC spare capacity, so upside risk to crude is limited.

So on Friday I had intended to write about the milestone of Sino-Russian trade exceeding $200bn

$218bn to be precise

but we had some technical issues, of which I’m still not cognisant, and everything I wrote seemed to have dematerialised in a dog-ate-my-homework kinda way.

I’m going to ignore my grandad’s advice

(‘if at first you don’t succeed, f*** it, just give up’)

11:00 DGG: lol

11:00 JR: and try again. I’ve already given the headline away.

The trade is split quite evenly and denotes the huge shift in Russia’s trading priorities and its pivot to the east.

11:01 DGG: yes – it’s been a huge shift. Chinese imports of Russian goods are up 100% since 2020

more than 100%*

11:01 JR: @richard – agreed, i think i intend to make same point a bit later

 China’s deflation dropped to -0.5% yoy last week so there are benefits to be derived from screwing cheap gas out of Russia, the forced seller

11:02 DGG: And analysts -notably marc ostwald – letting us know that China has changed its reference to ‘forceful’ monetary policy, replacing it with ‘flexible, appropriate, targeted and effective’ suggesting no chance of an unexpected rate cut from the current 2,5% at this weeks’ PBOC 1-year MTLF operation
11:02 JR: It’s not quite a monopsony as India is also hoovering up Russian energy
11:03 DGG: And Spain ! as we saw here last week
11:03 JR: as India is also hoovering up Russian energy but China is the easiest, logical place for Russia to export its hydrocarbons

now that Europe is out of bounds, of course.

11:03 DGG: (most!)
11:03 JR: spot on

Hopefully, Putin is having second thoughts about his pivot east because as of Weds, China’s weighting in the MSCI has slumped to 25% from 40% barely three years ago. Illustrated here in a chart from Gavekal.

That’s $1.8trn of mkt cap eradicated by the CCP crackdown on capitalism.

a whole lot of mkt cap

11:04 DGG: Richard – India will surefire be a place for good drone development because of terrible overcrowding on highways

The upper class will choose to fly

11:04 JR: @richardh – remind me not to fly in India again
11:05 DGG: In more China news – Chinese exports to the Untied States are down -20% from their all time peak, while Chines exports to the rest of the world are just down 5%

11:05 JR: deglobalisation in practice

did you catch the NapolElon Musk Twitter Spaces ‘conversation’, Dario? A quintet of the most appalling specimens of humanity..,. ?

11:06 DGG: I didn’t quite realise it had happened until this morning, tbh

Now I gotta say

Don’t care much for the members of that quintet

Bar Alex Jones. Sigh. He’s become SO BORING

I loved my vintage alex jones – he was a true hero

An anti-everything

11:07 JR: i would like Alex Jones to be killed with an assault rifle then we could all deny it happened
11:07 DGG: He’s just become your latest right-wing talk show host


11:08 JR: @izzyk – demis hassabis is another alumnus of my college. supposed to be a terribly nice fella

not much value added there, though

11:09 DGG: Well – a few years later, they don’t seem off the mark

DeepMind still hasn’t provided anything beyond their enzyme/cell simulator

11:09 JR: i wanted to discuss EM debt, a subject I’ve broached several times of late…

Well, in 2023, EM debt didnt do much as a whole but divergence was pronounced with latam benefiting to the tune of 24% with MXP and COP the two-best performing EMs ytd

EMFXs I mean

EMEA was flat, dragged down by Russia, Turkey, South Africa (RATS)

(glad to get my RATS asset class promo in)

11:10 DGG: ????

does that even work as an acronym

11:11 JR: it doesnt however, it makes much more sense than jim o neill’s bric rubbish and he made a career from that

 Asia returned about 2.4%.

11:12 JR: People are talking about Turkey as the turnaround story for 2024 with Erdogan taking a step back (now that he’s won the election and ruined the country and is guaranteed another five years of corruption and cronyism and nepotism)

but he’s allowing a credible team to restore central banking credibility and economic orthodoxy.

There may be a  lot more issuance in 2024 (2023’s $1.5trn was +4% yoy) but the expected G7 rate- cutting cycle should favour EM. EM debt is a derivative bet on EM and a way to play the Nov moves in G7 rate expectations.

which are demonstrated here

In Oct, Euro mkts expected 2024 cuts: 75bp and a terminal rate: 2.85%. In Dec 2024, cuts: 135bp and a terminal rate: 2.19%

11:13 DGG: is that a massive move?
11:13 JR: relatively speaking, in such a big mkt in a short space of time, emphatically yes

 Final central bank meetings of the year this week from BoE, Fed, ECB and the BoJ.

The danger to rate expectations at this stage, after they have been brought forward several quarters in the space of a few weeks, surely has to be slip back

China growth data due Friday will be pretty instructive here.

@izzyk – i guess they would do since he was first mover and made all the money

Rate cuts expected in Brazil and Peru this month, Mexico on hold and Russia, the bastards, hiking 100bp.

Inflation in Russia hit 11.66% in Nov

Pretty clear what the triggers have been for Russia’s inflation spikes – its congenital malefaction.

11:15 DGG: Their ideology primarily was the opposite of OpenAI. They went everywhere BUT in one specific direction, unlike OPenAI which solely focused on getting an LLM out
11:15 JR: One nation that won’t be cutting any time soon is the largest economy in Africa:  Nigeria.

A shortage in USD saw the naira fall 23% on Friday, a fairly major deterioration in a trend that began last summer when the govt eased currency controls.

Inflation is a problem, surprise, surprise, oil price weakness hurts and the confusion caused by parallel/  black markets versus the official rates (at times inflated by 25%)

USDNGN chart

That’s what easing fx control brought about. That’ll learn yer.

11:17 DGG: In other Nigeria news – and more evidence of the OPEC-BRICS crossover – Nigeria announced plans to join the BRICS bloc in two years, as they announced at the end of November
11:17 JR: they wanna join BRICS not RATS?
11:17 DGG: Tied to this, their foreign minister also claimed the country has the conditions to join the G-20
11:18 JR: (im coming second again)

11:18 DGG:

News Image

Nigeria will seek to become a member of the BRICS group of nations within the next two years as part of a new foreign policy push to have its voice heard in important global organizations.

There are many times when it’s enviable to be coming second, Julian.

as my ex always reminded me

11:18 JR: Opec’s mkt share and production are declining and it’s finding it difficult to balance supply-demand when everyone wants to keep pumping. Oil traded with a big figure of $6 last week.

The easing of currency controls, however, was a necessary medicine and  was praised by Moodys Friday as they upgraded the sovereign outlook to positive, although this is of marginal benefit to a credit 7 notches into junk at Caa1.

The CB governor is pledging to  curb inflation  but the currency move makes this difficult and the growth dividend is not yet apparent.

let’s move onto more enjoyable markets

Last week saw the Hospices de Beaune annual wine auction, selling  750 barrels of Burgundy’s most prestigious wines.

It was the second highest auction total on record, $27.4 mill but still down 15% on last year which is worse than major fine wine indices’ performance ytd

Burgundy -5% ytd, top claret the same, champagne, Rhone and cult US wines -4%

Chart courtesy of Cult Wines.

That’s not so bad given the runaway success of previous years and that if you’re a private investor it’s tax free and a lot nicer to look at in your cellar than share certificates

but the five-year record is a trifle underwhelming unless you were exploiting the scarcity value and the influx of Asian buyers into the Burgundy grand crus in that specific, rarefied world

Wine investment, it transpires, is also a function of low interest rates and  disposable income with two crucial qualifications: it’s perishable but in the absolute worst-case scenario, you can always drink it.

The best performing wine of 2023 is Egly-Ouriet Brut Millesime Grand Cru

but I doubt I will ever get to drink it unless there’s someone present in The Rabble who owns a bottle and invites me to share it

this brings me onto the latest in my top wines of 2023

Abelard & Heloise by Chene Bleu

these two beauties, satnding side-by-side, like the star-crossed lovers of the same name

11:24 DGG: looks delicious
11:24 JR: although things didnt ‘end’ too well for Abelard who was emasculated by Heloise’s angry family

I first visited this vineyard, owned by Xavier Rolet, the bloke who used to be chairman or CEO of the LSE and run by his ensorcelling wife, Nicole  on 1st Oct 2017.

i remember the date because it had a profound effect on me

i was profoundly jealous

11:25 DGG: I also have received a brilliant strategy on how to actually become a multi millionaire by owning a vineyard Julian
11:25 JR: I was in the depths of a nimbostratus-like depression and found myself immediately cheered
11:25 DGG: Its a 100% guaranteed method:

you start with a billion

11:25 JR: by the location, an amphitheatre on the top of a hill surrounded by forest,

 by the sunlight-buttered walls of the winery,

by the churchy, high windows of the tasting room,

and by the fragrance and the radiance of Mrs Rolet who let us explore her range from entry-level all the way top the top-end cuvees.

Abelard, a grenache-dominated super Rhone and Heloise, a syrah-dominated super-Rhone in that they have been taken out of the local classification so they can be more creative with their wine-making.

Perfume, structure, body, dark berry flavours and an endless finish are what Mrs Rolet’s best pair offer

I’ve waited about six years since getting my hands on them and plan to enjoy them this Christmas. You should too.

@izzyk – some people think the petrol smell is a fault in the wine but it’s very distinctive and it makes it easy to spot in a blind tasting

i prefer the sweet rieslings myself

last 2 mins, Dario, we have one minute each for a hero and a villain. you’re picking a villain today?

11:29 DGG: Uh huh

A mediocre one but well worthy of the title

Ben Shapiro

11:29 JR: good. I hate him.
11:29 DGG: A man who formerly garnered much prominence for his ability on the debate stage, but has been steadily losing it after viewers discovered his brilliant methodology involves only facing off against clueless students

The one time Shapiro debated an actual professional in 2019 – Andrew Neil – he was roundly humiliated

later admitting he was ‘destroyed’ by Neil

11:30 JR: @izzyk – ‘hatred can give a life meaning, of which it’s otherwise bereft’
11:30 DGG: The point of Shapiro is – if you’re supporting any of this positions, such as pro-Israel positions, or pro-abortion, please keep in mind that avoiding Shapiro’s positions will likely mean you are on far more solid ground
11:31 JR: and my latest hero of 2023 is Oleksandr Matsievsky a 42 year-old Ukrainian soldier

murdered in cold blood by Russians in Bakhmut, ‘Slava Ukraini’

they have now erected a statue of him in kiev

and I thought this image of his mother coming face to face with her son

was incredibly moving and summed up the barbarity of this pointless conflict

slava ukraini

nunc tempus taciendi

11:32 DGG: goodbai!

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