Where finance and media intersect with reality


Spot Markets Live, 12/12/23 (Bitcoin, Undersea Cables, Venezuela-Guyana)

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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.)

ChatGPT Provided TLDR

  • Casual Banter: Julian Rimmer and Dario Garcia Giner engage in banter about various topics.
  • Financial Insights: Discussions include Bitcoin fluctuations, copper market dynamics, macroeconomic indicators like CPI, and gold investment suggestions.
  • Global Affairs: Touches on Russian politics, Navalny’s disappearance, tensions between Ethiopia and Eritrea, and US-China relations.
  • Undersea Cables & Geopolitics: Detailed exploration of undersea cables, their vulnerabilities, and the geopolitical tug-of-war between the US and China over cable development and influence.
  • Venezuela-Guyana Conflict: Speculation about the Venezuelan-American moves in Guyana, oil interests, and military involvement.
  • Personal Preferences & Heroes: Conversation shifts to personal preferences, wine recommendations, favorite personalities (Geoffrey Holt, Tucker Carlson), and a discussion on heroes and villains.
10:30 JR: Good morning, Aloha and greetings fellow market wizards

Good morning, Dario down there in Malaga, partaking of a beaker of the warm south

10:31 DGG: Aloha Julian
10:32 JR: how are you? better than me, I hope, who is suffering from a dose of what we call Irish flu
10:32 DGG: Interesting, I was suffering from the actual flu I caught in London. A friends dad recently called me and expressed his hope that I “recover from el British”
10:33 JR: I had a good night’s sleep but this wasn’t it. I lay in bed, overheated from my day-long drinking bender, listening to heavy rainfall drumming on the roof and having nightmares about leaks.

anyway, as martin amis pointed out, we live in the era of mass loquacity

so let us contribute to that pile

nunc tempus loquendi

10:34 DGG: Some things are best left unsaid Mark
10:34 JR: On this day, only 4 yrs ago, Boris Johnson won an 80-seat majority in the UK general election.

tempus fugit

and on this day in 1999

Joseph Heller died. I wrote my university dissertation on Joseph Heller, starting from a point of fandom and then realising halfway through that from Catch-22 onwards it was all downhill.

10:34 DGG: What a book that is.
10:35 JR: yes, just to have written one great book is enough to justify a life.
10:35 DGG: laugh, cry, and laugh again. can’t emphasise how much everyone should read it
10:35 JR: i’ll settle for one memorable Spot markets Live

If you thought a peaceable solution to Gaza conflict is at hand listen to this nice, reasonable, young man

– and think again

10:36 DGG: Thanks Richard
10:36 JR: Navalny has been missing for six days. The Russian prison service won’t say where he is.
10:36 DGG:Ohh! Interesting stuff rich
10:36 JR: worrying development, another nail in the coffin of even the prospect of russian democracy
10:37 DGG: I’m not sure you’d like Navalny if he wren’t imprisoned. He was pro the annexation of crimea after all
10:37 JR: Big week for macro, Fed tomo, UK GDP tomo,  ECB, BoJ , BoE Thurs, US CPI tomo, , Retail sales Thurs, flash PMIs due Fri
10:38 DGG: Analysts, notably Marc Ostwald, warn us of the upside risk to American CPI data later this week (later today)

Most indicators are still downward-looking, such as a 6% m/m fall in gas and used car prices

But others aren’t – new car prices up, upward pressure from medical care insurance, expected lower discounting on clothing than seasonally typical

expected to create perhaps an ‘upside miss’

While it won’t materially change view inflation is on a downward trend

market risk appetite for a cut has been so pumped that markets may overreact more sharply than justified to such an upward miss

10:39 JR: Gold dipped <$2000 again. If you think central banks will continue buying – I do – then you should be buying the dip

10:40 DGG: Agreed Mark. Something to look into
10:41 JR: i think it’s worth pointing out that during the Elon Musk Twitterspace conversation with the rogues gallery of alex jones et al, US presidential candidate vivek smarmy of whatever his name is, took a leak while it was happening with his microphone on

News Image

Mr Ramaswamy quickly realised what had happened and immediately apologised for the embarrassing moment.
10:42 DGG: I remember one time a EUROPOL agent lauded my intelligence report I was hit by an unexpected slashing episode and had to squat-crawl all the way to the bathroom. Luckily I quickly muted my microphone and was working from home. I quickly umuted it from the toilet basic to eke out a hard-working “mhmm thank you”. It was the last time anyone at Europol complimented me.

10:41 JR:We discussed copper a few weeks back and how supply stress was building, especially with 1st Quantum mines in Panama.

The outlook is now worsening.  A break through $4/lb seems inevitable.

that’s CU

pace MS

In just a fortnight t >500kt of 2024 projected output, or 2.5% of global supply was lost , across First Quantum (Cobre Panama), Anglo American, Rio Tinto and Southern Copper (covered by Carlos De Alba). In certain cases, the volume loss extends well beyond 2024 (e.g. Anglo American), but is far less clear in others such as First Quantum, thus leaving us on the sidelines there.

10:42 DGG: I remember one time a EUROPOL agent lauded my intelligence report I was hit by an unexpected slashing episode and had to squat-crawl all the way to the bathroom. Luckily I quickly muted my microphone and was working from home. I quickly umuted it from the toilet basic to eke out a hard-working “mhmm thank you”. It was the last time anyone at Europol complimented me.

10:42 JR:

boost the scarcity premium… First Quantum’s and Anglo American’s challenges have likely prompted many investors to look elsewhere for copper exposure, magnifying the scarcity aspects of pure-play equities. As such, the growing pool of capital is now chasing an ever smaller universe of copper-exposed equities, which are perceived to have better line of sight on 2024 volumes. Against this backdrop, the recent equity re-rating impetus may have further room to run.  

How to play the theme? Lundin Mining (OW) – our relative pick – ticks all the boxes on attractive leverage to copper, solid operational momentum, growth optionality in LatAm, and cheap valuation at 6.2x 2024 spot EV/EBITDA (16% discount to peers). Antofagasta (EW) offers upside risks too as a pure-play with 2024 volume growth and low jurisdictional risks. Yet, it already prices in a lot: (1) 2024 spot EV/EBITDA of 8.6x (26% premium to peers) and (2) implied copper price of US$4.28/lb (14% premium to spot Cu), while Centinela expansion update (as soon as next week) is a near-term uncertainty. Among diversifieds, Glencore (EW) may benefit vs peers given sizeable copper exposure (30% of 2024 spot EBITDA) while equity valuation is reasonable at 8% spot 2024 FCFY. In contrast, Boliden is our key Underweight on material earnings risks in smelting, operational challenges, lower mined copper exposure, and full valuation. KGHM remains at UW due to its high cost base, negative FCF and above-average gearing, which leave limited room for error

now here’s one from left field


looks set to miss an interest payment due later on Monday on its December 2024 dollar bond, becoming the latest emerging-market sovereign to default on debt.

The country’s finance ministry said on Friday, it was “not in a position to pay” the $33 million coupon because of the nation’s “fragile external position.”

nice euphemism

10:44 DGG: Richard – Marc’s point is the headline effect of the upside miss may cause a market overreaction. Non events can quickly become events
10:44 JR: The extra yield premium investors demand to own Ethiopian debt remains at 5,442 basis points over Treasuries 

regarding cpi – even a small miss when treasuries are so over-extended could cause a big reversal

that’s the ethiopian birr

10:45 DGG: birrap birrap ????

Some interesting news coming out of Ethiopia

Looks like Abiy Ahmed is trying to call for a negotiated peace in beleaguered Amhara region rather than violence

10:46 JR: how novel
10:46 DGG: Which looks like an internal pacification sideshow ahead of two significant external events

the first is an ongoing significant rise in tensions with Eritrea

You’ll recall a few months ago on SML we highlighted that Abiy outlined the intention to take.a red sea port from the Eritrean coastline

Troubling reports of increased troop movements and aircraft activity near the borders of Ethiopia and Eritrea have started to circulate, raising concerns over a potential resurgence of hostilities in the area.”

Apart from mere rumors and educated speculations, there are concrete indications that President Isaias Afwerki and Prime Minister Abiy Ahmed are gradually growing apart. These developments have sparked anxieties among regional players, foreign diplomats, and analysts, who are warning that both countries seem to be gearing up for a possible conflict.”

This is CRITICAL – as we have been seeing control over the horn of Africa is essential for global shipping, the Houthi blockade makes this even more prominent.

Also – the fourth round of negotiations for the Grand Ethiopian Renaissance Dam begins this month between Egypt, Ethiopia and Sudan

These aim to finally reach a legal agreement over the recently filled Ethiopian dam on the Nile basin

Analysts expect this to be the ‘last chance’ to resolve outstanding differences. If they don’t progress, expect Sudan and Egypt to raise the sabers of conflict

10:48 JR: @marks – no one would notice

yesterday, i caught Ray Dalio trying to rehabilitate his reputation online after the damaging exposé of life at Bridgewater

Ray Dalio’s principles for applying radical transparency in different areas of your life

10:49 DGG: Sounds like it was written by someone with lots to hide
10:49 JR: what a bore, how banal, how hackneyed, what a waste of time

just a brief note on Bitcoin which we dont want to obsess about, however, $100mill of Bitcoin longs relinquished last night on a 10% drop for crypto which is all about profit-taking but was triggered by Elizabeth Warren  introducing legislation to counteract the misuse of digital currencies in illicit activities.

10:51 DGG: Minor retracement to the months long bullish trend has almost turned dario’s portfolio’s red – to great relief

I’ve been int he red so long this little green stint is terrifying me

Corrections in the BTC market are common, historic bull runs often see 20% corrections before rally’s resumption

That would be the wicks above

There’s something off about this fall, tho

10:51 JR: never heard of wicks
10:52 DGG: The price of BTC moved 5% downwards this Sunday with NO NEWS just 24hrs before E Warren introduced her crypto crack down bill

Thankfully, exactly 0 of Warren’s sponsored bills have passed since 2015. As a cheeky member of Twitter said ‘native-americans suck at dealmaking’

10:52 JR: @marks – not my world anymore

elsewhere, the EU commission is set to vote today on a plan to take $15bn of profit from Russian assets frozen in the EU and allocate them to Ukraine.

10:53 DGG: What a great way of making sure that in a friend shoring world nobody friend shores with EU

10:54 JR: it’s the right thing to do IMHO and the only thing wrong with it is they haven’t taken all $350bn

10:54 DGG: I think it makes a mockery of our laws.
The rise of a polarised Ameican Chinese world will come at great opportunity for power blocs that can mediate both sides of the coin.

I call these ‘connector economies’ such as MERCOSUR latam, Thailand, India, the Gulf, etc

Opps to draw in cap investment to guarantee no matter the global conflict, these connectors will stay plugged to both sides and continue pumping with unsanctioned cost bases

The EU has chosen to become a protectorate of just one side. Its citizens and industrial fabric will suffer the consequences

Speaking of dismal protectorates, our American frenemies are pegging us in more ways than one

10:55 JR: Pegging? Like currencies?
10:55 DGG: No – the other type
10:55 JR: more tea, vicar?
10:56 DGG: There’s an ongoing scandal in Spain where four American embassy employees (read: spies) were expelled from Spain

This was after Spanish intelligence services found they’d been bribing Spanish agents to get their hands on classified info

Classified info the Spanish services always hand over – meaning the Americans broke it cause they felt like it not cause they had to

It reminds me of an old joke – why is there never a coup in the US? Because it doesn’t host a US embassy

10:56 JR: there was one in the capitol building, though
10:56 DGG: So you’ll forgive me if i’m feeling a little ill-disposed towards our American imperators this week

What do you know about submarine cables Julian

10:57 JR: I believe the first was developed by the British to  communicate with India but other than that…. Not much. I know more about Everton’s 4-4-1-1 formation, though
10:57 DGG: These high-speed optic fibre core cables beam high-sped data around the world, in a way that can’t be quickly replaced by Satellites

Smarter experts than us (of which there are many) have been pointing out that a ‘hot war in cold places’ – like space and the undersea domain, have been happening for almost a half-decade

Notably, Pippa Malmgren

“There is also Hot War in Cold Places – Space, the Arctic and in the cold oceans. Satellites have been damaged and destroyed, the subsea cables that allow them to connect to Earth have been cut, and many undersea internet cables (Svalbard) and subsea energy infrastructure have been attacked in the high North (Nordstream II and Balticonnector). “

There are several ways to damage or intercept these subsea cables

Despite their importance, they are about the width of a garden hose

One even the most determined marine corps private wouldn’t be able to suck a golf ball through

A chinese ship, the Newnew Polar Bear, and a Russian cargo vessel, the Sevmorput, are suspected of intentionally using their anchor to destroy a subsea cable connecting to Finland and Estonia.

“The Newnew Polar Bear has subsequently become the focus of the investigation. After departing the Baltic Sea, the ship was photographed arriving in the Russian port of Arkhangelsk with its port side anchor apparently missing on 22 October.

Two days later, the Finnish National Bureau of Investigation announced that they had retrieved an anchor embedded in the seabed next to the damaged pipeline in co-operation with the Finnish Navy and Finnish Border Guard. According to the Fins, the Newnew Polar Bear is the prime suspect for the incident.”

Another method is to intercept the repeaters

11:00 JR: pls repeat
11:00 DGG: (We have the YouTube channel Caspian Report to thank for the below infographics.)
So the signal being sent through the fibre optic cables become garbled if repeaters aren’t set up every 60-70kms. They are ideal for bugging, intercepting, or converting to spyware capable hardware

And the issue is that the market for these undersea cables and repeater manufacturing, cable laying and maintenance is TINY TINY TINY

For example only 40 ships worldwide exist for such tasks – so cross-country collaboration was very much the norm

China saw this as a gerat opporutnity – it launched the ‘digital silk road’ in 2015 to expand its network together with Huawei Marine and rapidly captured 15% of the global submarine cable market by 2019

Yes, Caspian Report is just ok now – he used to be a whole lot better. I have to wipe off the American bias in all of his analyses these days

It pushed the American administration to do the opposite – Since 2015 google Meta and Microsoft have spent $2bn in undersea cable development, with $4bn to be spent over the next 3 years.

And it has unintended consequences for, you guessed it, EU

11:02 JR: the poor EU
11:02 DGG: The SEA-ME-WE 6 cable is a 19,200 km sub cable that connected Singapore to France via Egypt

Or was suposed to anyway

A Chinese company, HMN Tech, was almost going to build it for 1/3rd of the asking price

Then the Americans threatened the project with sanctions, and forced the Chiense contractor out, and put in their own – Subcom

Subcom is a spooky NJ firm with contract with the DoD and Silicon Valley giants, and is the exclusive contractor for spying on the Chinese navy for the us military

I would rather have cheap cables and Chinese spying voluntarily than involuntary expensive cables with American spying

call me old fashioned but I take this as a violation of our sovereignty

Thankfully France is similarly old fashioned

11:04 JR: hey, you, old-fashioned
11:04 DGG: That’s why one of the only Chinese cables in Europe was built with French financing and support – the PEACE cable

Notice anything about the route?

the same as the SEAMEWE – but without American extortion

for generalities:

“The global submarine cable system market is expected to grow from $14.40 billion in 2021 to $16.15 billion in 2022 at a compound annual growth rate (CAGR) of 12.16%. The growth is mainly due to the companies resuming their operations and adapting to the new normal while recovering from the COVID-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. The market is expected to reach $26.10 billion in 2026 at a CAGR of 12.76%.”

The major players are:

“ZTT, The Okonite Company, TE Connectivity, SubCom, Saudi Ericsson, Prysmian Group, NKT A/S, Nexans S. A. , NEC Corporation, JDR Cable Systems Ltd.”

11:05 JR: i wonder if any of those are listed
11:05 DGG: I think it’s quite hard to sink an investment tooth in this industry

But well worth the effort, I suspect

11:05 JR: regarding more Chinese malfeasance….
11:06 DGG: Mark – expand?

11:06 JR: net quarterly outflow of FDI first time since records began.

11:06 DGG: Very interesting, girlie

Is this a sign of broader macro trends, Western finance re-shoring industrial capacity elsewhere, or is it about global economic malaise, or of a Chinese economic slowdown?

11:06 JR: The latter, mostly

The crackdown on business leaders, fraught relations with the US, deglobalisation theme, the slump in property and the attendant crisis this is causing in banks.

11:07 DGG: One way or another, lots of interesting news from China recently

The first was a surprising announcement that a new proposal means the US will share certain launch secrets of its missiles with China

“The U.S. is considering a deal with China that will see the two countries warn each other before they launch any missiles, according to the Japanese press.

Details of the proposals were reported byNikkei Asia, which quoted an unnamed senior U.S. State Department official in an article published on Monday. That source claimed it was hoped that the two nations “would have a reciprocal obligation to clarify what we’re doing,” and added that the pact would be similar to an existing arrangement between the U.S. and Russia.”

every deal that drives towards peace – however uneasy – is a good one

In other China news, alibaba continues its mediocre plodding

11:08 JR: it’s only mediocre because the govt is handicapping them, right?
11:08 DGG: Ah! See, a Redditor has another asnwer – they’re getting outcompeted

Ntoably – Pinduoduo – who are behind the American shopping app Temu. The company has now become the largest e-commerce company in China by market cap – $184bn versus Alibaba’s $183bn

12:09 JR: i would normally ask my daughter about this pinduoduo but she’s back from uni and will not rise till 2pm
12:09 DGG: Their incerase in market share comes with the featuring of a game like shopping experience, flashing rock bottom sales intermittently, turning the shopping experience into an adrenaline releasing ride

News Image

Little-known PDD has been surging in China. Now its Temu discounts app is rivaling Amazon and Walmart in the US.
11:10 JR: rubber dinghy rapids?
11:10 DGG:

four pandas more like

11:10 JR: continuing our roller-coaster ride across the globe…


11:11 DGG: So – yes, Guyana is still a thing

Most recent news have been-

Lula da Silva is urging to mediate the dispute, while VNZ has started granting identity documents to individuals near the disputed area in Essequibo

11:11 JR: so far, so Russian
11:11 DGG: You can’t see Russians around every corner Julian!
11:11 JR: this is straight out of their handbook
11:12 DGG: This is the American pond
11:12 JR: monroe doctrine less applicable these days
11:12 DGG: The situation has been heightened by the still unidentified cause of a Guyanese helicopter’s downing near the Venezuelan border
11:12 JR: ‘unidentified’?
11:12 DGG: PDVSA – VNZ state oil giant, have created an Essequibo diviosn that has started receiving and granting licenses for the exploitation of minerals and gases in the seas of Essequibo

In the meanitme, the americans have been fulfilling blinken’s promise of ‘unconditional support’ made in Georgetown, Guyana on Dec 6

American warplanes conducting aerial exercises with guyanese military, establishing military bases, sending footsoldiers, etc

Tentatively, Julian, I think I’ve figured out whats going on

11:13 JR: the russians?

11:13 DGG: You can’t just see Russians around every corner Julian!


11:13 JR: there’s a Russian behind me as I type, I think

11:14 DGG: lmao

So I’ve always found this conflict odd for the reason of timeline

Pre-2023 – Venezuelan Essequibo claims silent, Guyana quietly discovers oil

mid-2023 – Venezuelan relationship with Americans unfrozen, conditional to fair elections in Venezuela next spring. In the summer, Venezuela announce intention to annex Essequibo after a referendum. Guyanese oil exploitation by American giants begins

Lte-2023 – venezuelan referendum approves annexation threat, american military moves into Guyana in response

Do you see what’s off about this? It feels like the Venezuelan moves have clearly been in tandem with an American unfreezing

Let’s see this from the American perspective

What better way to guarantee your investment in a tinpot country than the establishment of close security ‘guarantees’ and military bases?

11:16 JR: i can hear thunder rumbling above me in the skies of SW London as you type and it’s very ominous
11:16 DGG: Egging venezuela to pressure Guyanese forces the latter to invite you in, while the risk of a Venezeualn invasion is minimised as you dangle the carrot of lifting sanctions
11:16 JR: Venezuela would fare better if it were an American sphere of influence rather than Russian
11:17 DGG: Plus, with upcoming Venezuelan elections, there is the possilbity the Venezuelan opposition could point to Maduro’s de-facto incapacity to annex the territory (due to American sanctions carrot) as risky brinksmanship for electoral gains

The Americans want to have their cake and eat it too

Take control of Guyanese oil reserves

While at the same time trying to topple the Maduro regime by making him fail to keep his electoral promises

11:17 JR: that’s the BoJo cake policy
11:17 DGG: Am I crazy or does this make sense?
11:17 JR: you are crazy
11:17 DGG: (not you julian)
11:18 JR: and now for a change of mood music from german anthrax rock to Sunday morning instrumental jazz…

(is german anthrax rock a thing?)

@helmholtz – im with you

11:19 DGG: Lads – I really think this is actually what’s going on. Yes, it’s speculation – but I wouldn’t call it a conspiracy. It’s more like good old fashioned intrigue
11:19 JR: Top Wines of 2023… a safer space for viewers

Mas de Daumas Gassac Rosé Frizant

It’s light, playful, fruity and perfect for the idyllic summer’s evening of the imagination which so rarely transpires in the real world. Definitely one for the girls but real men drink rosé too.

Mas de Daumas Gassac is considered the ‘first growth of the Languedoc’ with good reason

and just to answer a question I received yesterday, the person in the photo frame behind the wine is Philip Larkin

nine minutes remaining for Dario to select another hero for 2023 although I could easily eat up the whole time by explaining why I hate my villian like I do

Tucker Carlson: how do I hate thee? let me count the ways?

11:22 DGG: I find it suspicious you’ve somehow found the one picture in which Tucker looks like a young buff stud
11:23 JR: I could have picked any one of a thousand MAGA republicans who are doing so much to promote Russia’s cause and undermine the defence of Ukraine but I think that Tucker Carlson, in his position as the most well-known commentator in America is the single most culpable, given his outsized platform

his presidential (or vice to start with) ambitions are clear and he’s simply spouting whatever he thinks may get him a seat at the table

rather than wondering what might be happening to all those people suffering unnecessarily in Ukraine. My greatest fantasy is to put him in a Ukr trench for a day and see how much he likes Putin then

11:25 DGG: Nooo I love Carlson! Despite his boring defence of the typical right wing christian social positions, its rare to have a diehard right winger that thinks for himself – notably, that America isn’t a pure force for good, and that its mission civilisatrice is as laden with noxious and poisonous self-interest as every other one in history

My hero is one Geoffrey Holt!

11:26 JR: @marks – clarkson more innocuous if similarly unpleasant
11:26 DGG: Residents of Hinsdale, New Hampshire, would often see Geoffrey sitting on his bright orange lawn mower he would usually drive around town. That’s about all there was to the man

He was shy, quiet, and preferred to take his days puttering around the trailer park he lived in – he never used his old car

But residents of the tiny 4,000 person town woke up to a surprise when Holt, 82, passed away this june

It turns out the quiet and shy man who lived in a tiny mobile home, left his inheritance of almost $4mn to the town

“I just immediately think, that’s that story that you hear all the time,” Kathryn Lynch, Hinsdale’s administrator, told The Washington Post. “The millionaire next door. Somebody that you would never, never think.”

For giving us the joy of a heartwarming story, and reminding us that some people are still humble enough to be generous without expecting anything in return other than good wishes, Holt is in my Hero’s list for the year

11:28 JR: I can assure viewers when I die they will not discover a $4mill jackpot in my top drawer but just another secret bank account in overdraft
11:28 DGG: lol
11:28 JR: we are of course open to hearing suggestions from hoi polloi as to whom they nominate for heroes and villains
11:28 DGG: please do sprinkle in your nominations through the usual channels

You can also follow me on Twitter – it’s a great place to stay up to date

That goes to you, Julian, whom I followed a month ago and still hasn’t followed me back

11:29 JR: when I worked in the City as a broker every December I would update and publish my ‘Top Ten W****** in the City’ list and it brought me great satisfaction

and on that misanthropic note, nunc tempus taciendi

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