Where finance and media intersect with reality


Spot Markets Live, 24/10/23 (Argentina, Russia and Syria, North Korea)

(All comments in bold are directed towards audience members)
Julian Rimmer 10:30

Good morning, aloha and greetings, fellow market wizards.

Yesterday morning, the Japanese maple outside my study window was a blaze of autumn fire but this morning in the drear and the drizzle, there are raindrops glistening like pearls in the spiderwebs and its leaves are hanging limply.

The maple knows what’s coming.

So did Clive James, who wrote this moving farewell piece before his death a few years ago.

News Image


Good morning Dario, our geopolitical Zoomer.

Dario Garcia Giner 10:31

Good morning Julian!

Julian Rimmer 10:31

To fend off the elegiac thoughts that autumn inevitably engenders, I have Nat King Cole’s ‘Autumn Leaves on loop in the background.

News Image

Un fantastico video que todo coleccionista de este tipo de musica debe poseer, excelente interpretación del gran King de todos los tiempos. Que lo disfruten!!!

and I recommend a slug of something restorative, a Kings ginger liqueur in my instance, an espresso in yours perhaps in you’re in the office and put your feet up.

Are you sitting comfortably? Then we’ll begin.

Dario Garcia Giner 10:32


Julian Rimmer 10:33

Perhaps, you inferred a pair trade from our forum yesterday, and shorted Argentina against a long in Bitcoin? In which case, you are cracking open the champagne because that would have yielded a net return of 25% last night. XBT hit $35,000 at one stage.

Another reason to have cracked open a bottle of bubbly would have been the rumours, sadly now scotched, that Putin had suffered a heart attack yesterday.

Dario Garcia Giner 10:34

I hadn’t heard about that!

Julian Rimmer 10:34

Most likely this is psyops by the Ukrainian intelligence services but still, we can dream. It was widely reported on newswires.

A heart attack presupposes Putin, contrary to all evidence, has one. I strongly suspect anything inside his puny, homunculus frame, was inserted by a screwdriver.

It must have been sobering for Argentina’s EcoMin, Sergio Massa, that the response of Merval index to his victory in the first round of the presidential election was to promptly slump 12%.

That won’t persuade him to change his policies, though. ‘The worst are full of passionate intensity’, as WB Yeats drily observed.

Then again, Massa, might have been encouraged by the response of markets.  If one is an economic arsonist, a box of matches rather than a fire extinguisher is what sets your pulse racing.

The worst aspect of this is that other politicians in Emerging Markets will take note but draw the wrong conclusion:

Dario Garcia Giner 10:36

Which is?

Julian Rimmer 10:37

They will not see the error of Massa’s reckless,  nay suicidal spendthriftiness and cut their cloth accordingly.

(I’m thinking Julius Malema here)

What they will infer is that these policies are successful with voters (admittedly, the recurrent image of an opponent (with sideburns) wielding a literal chainsaw for metaphorical purposes might have helped dissuade neutrals)

Dario Garcia Giner 10:38

Javier Milei: The 'chainsaw' candidate challenging Argentina's left and right | CNN

Julian Rimmer 10:38

And decide that the economy of their struggling nation is of course of secondary importance to the imperative of being elected. Worry about the economic crisis from the presidential desk behind the gates of the Casa Rosada, rather than from a prison cell nearby

I spent 30 yrs in EM, patiently waiting for them to emerge and sadly this episode is all too characteristic of them, and they never did. EM is the story of everything that needn’t have been that way.

Another big move last night was in UST10YR which spiked > 5%

This despite Paul Krugman’s assertion that the war on inflation was over and had been won

The problem is food, energy, shelter and transport components are sort of important. He’s right, in one respect, though. If you don’t include everything you can no longer afford then inflation is subsiding.

Dario Garcia Giner 10:41

I have even more problems with Krugman’s statements

His extrapolation of a lowering CPI turning into a victory on “inflation” just seems straight barmy

The consumer price index was a great metric once. But it’s become sorely inadequate.

(In this very much non-economists view)

Julian Rimmer 10:42
That’s also the view of many economists

Dario Garcia Giner 10:42

And that’s because the most insidious types of inflation we’ve been seeing in the last half-decade have NOT been simple price increases.

And it’s highly unlikely these have been captured by now-de-facto-defunct CPI

Julian Rimmer 10:43

Yes, for example, the cost of a parking ticket has gone through the roof – and that’s in no index I know of but it accounts for a large percentage of my disposable income.

Dario Garcia Giner 10:44

Lol. Now, most of you will have heard of Shrinkflation – the art of maintaining a product’s price while sneakily lowering the product’s weight.

It all started with our much beloved Toblerone bar post-Brexit

Do you remember the kerfuffle that set off, Julian?

Julian Rimmer 10:44

I never bought a Toblerone again. I ate one once that had been refrigerated and lost a filling in the process so I always bore a grudge.

Dario Garcia Giner 10:44

No matter what your ex told you, size does matter

Well, let me introduce you to shrinkflation’s even worse cousin – shitflation.

I had this realisation after I got intoxicated, alongside all my friends, for the second time after I went to my ex-local pub in central Marylebone – Sam Smith’s Angel in the Fields

Julian Rimmer 10:45

Oh, my lord. Do you actually like Sam Smith’s pubs?

Dario Garcia Giner 10:46

I used to!! Their beers were nice and thick. (and didn’t use to make me sick).

Julian Rimmer 10:46

There is a force field outside them that prevents me from entering.

Dario Garcia Giner 10:46

Now – the pints hadn’t increased in price – not by much. They were still cheaper than any other pub around. but now, they made you ill

And I wasn’t the only one noticing – here’s a Reddit thread from two years ago.

(Though they hadn’t coined situation yet)

Filled with a vengeful force by the intoxicating brews, I then wrote a little piece on shitflation for the Blind Spot where I pointed out

“What shitflation (and shrinkflation) speaks to is the dissolution of our methodologies to calculate price increases. In that regard, it is an insidious phenomenon, reminiscent of the breakdown in price signalling that helped contribute to the fall of the USSR.

It also strongly implies that the price increases we hear about in newspapers and experience on the shop front are far from reflective of the true rate of inflation.

And if you’re interested in perusing more thoughts on the putrefaction of economic data, see my article on Lebanon’s cautionary data tale to Britain’s central bankers:

Julian Rimmer 10:48

I used to drink in the Chandos on Trafalgar Sq which was a Sam Smith pub and they served this dreadful liquid called Ayingerbrau lager

2 pints of it and the effects were deleterious. I would lose all feeling from the waist down.

Dario Garcia Giner 10:49

That sounds great, actually.

Julian Rimmer 10:50

So, trying to get inflation down… what we need to explore is The Sacrifice Ratio

You heard of this?

Dario Garcia Giner 10:50

No idea but it sounds fun.

(I’d ask you for your thoughts, but you know nothing, John Snow. We’ll look into this tomorrow)

Julian Rimmer 10:51

At this time of year, you could be forgiven for thinking The Sacrifice Ratio is the requisite number of traders/ salespeople and researchers who need to be jettisoned so that one MD can give himself the bonus he deserves and you may be right (in fact you’re definitely right) but there is another:

(I can see there’s a zoomer in-joke there to which I’m not privy)

but more prosaically

(A word I always misspell)

It’s how much the unemployment rate (UNR) must rise in order to lower INF.

Excellent note on this subject from Standard Chartered yesterday in which economist Steve Englander observed

So far disinflation has been relatively painless in unemployment-rate terms but in the past it has taken significant unemployment to achieve relatively modest disinflation gains.”

He concludes:

A high cost of disinflation is the strongest potential argument for compromising on inflation targets”

So far in this cycle, inflation has come down without requiring significantly higher unemployment. There is enough momentum, in our view, to lower inflation in the coming months (Revising our US growth and Fed rate forecasts). In our baseline, we expect it to take somewhat higher unemployment to bring inflation fully back to target. But by 2008-14 standards the UR cost is modest. Commentary by Fed officials

suggests they too do not count on inflation returning to 2% without higher unemployment”

I think (not always apparent) there is a strong possibility that central banks, anxious to inflate away the debt mountains accumulated during the pandemic, start to revise their inflation targets higher.

Dario Garcia Giner 10:56

That makes a lot of sense to my untrained eye.

Julian Rimmer 10:56

This is a theme championed by Russell Napier, a man who actually understands these things.

(unlike your humble correspondent here)

so the question for central banks is how to gently massage up the expectations of bond markets to accept that the desired level of inflation will most probably be almost double what they seek now – and for governments to hope electorates don’t understand their savings are being gradually stolen.

Dario Garcia Giner 10:59

There’s another kind of inflation on the horizon – combat inflation.

Syria’s been heating up slowly over the past year – and like central bankers’ nonchalant increases in their targets – nobody seems to have cared.

That is until the chickens started coming home to roost this weekend.

Julian Rimmer 11:00

You did it again. They are pigeons!

Dario Garcia Giner 11:00

Goddamit. the pigeons*.

Julian Rimmer 11:00

Those wayward chickens of yours…

Dario Garcia Giner 11:00

I ought to have been a chicken farmer. The stars are clearly aligned.

Julian Rimmer 11:00

you would need a sheepdog or better still a chicken-dog for your poultry.

Dario Garcia Giner 11:01

Lol. A spade of attacks by Iran-backed militias against American bases across Syria, and also Iraq

These are the bases in Erbil International Airport in Iraq’s KRG, as well as several bases in Kurdish-held Deiz Ezzor and the border crossing of Syria/Jordan, Tel Rifaat

But the really interesting factoid is a new angle to the Russian/American conflict there

Normally, these troops, bar a flareup a few years ago where Wagner got trounced, are never in direct conflict. Not even close.

But this may be changing because of Russia’s clear slant in the Israel/Hamas conflict – a total novelty for Russia (at least, since the USSR)

For example, Israeli strikes have taken out Aleppo and Damascus airports. So now, Iranian resupply planes are landing in Khmeimim airbase in Syria’s western Lattakia province, which is held by Russia

And it’s also interesting to note that Hamas’ website is hosted on a Russian Yandex email server

Julian Rimmer 11:03

I am not surprised by that revelation, but revelation it is nonetheless.

The heightened presence and engagement of the US in the ME has the highly desirable side-effect of entangling Russia more deeply into Syria at a time when, for understandable reasons, it would prefer to reduce its resources deployed there and shift them to Ukraine.

The USS has despatched USS Thomas Hudner (Who he? He who?) off the coast of Lebanon and also sent F-22 Raptor jets to the region

Until the war in Ukraine, Russia was primarily using its navy to exercise control over the region but now it’s diverted to Ukraine, it’s obliged to use the air force

The number of aggressive fly-bys / buzzing near US installations has proliferated lately and Iran too is using proxies to harass US forces, so tension is rising once more here.

The giraffid and wholly repellent Al Assad has control over most of his country but not all of it and there is genuine economic distress in many parts, even those that are loyal to his regime.

Dario Garcia Giner 11:06

He’s also taken over my social life as I keep running into distant family members…

Julian Rimmer 11:06


Sam Smith’s pubs?

Dario Garcia Giner 11:06

Lol, no. Marbella

Julian Rimmer 11:06

Do they drink ayingerbrau?

Dario Garcia Giner 11:06

Dont think so. They mostly smoke copious quantities of hashish.

Julian Rimmer 11:07

Go figure.

The US will be keen to apply maximum pressure here and alleviate some of the potential pressure that could be brought to bear in Ukraine

Dario Garcia Giner 11:07

Well, I’m not sure I agree Julian.

Because of course, the US is far more powerful than Russia should it concentrate forces

And Russia’s resources are extremely limited in comparison

But America’s presence in Syria is of very limited strategic use

Currently, despite holding the meagre oil fields of Deiz Ezzor, American troops are solely focused on controlling the Jordanian and Iraq borders into Syria

The Russian presence, on the other hand, is their Hail Mary.

Julian Rimmer 11:08

(@johndc77 rough college if only one communist there. the posher they are the more commies in my experience)

Dario Garcia Giner 11:08

For the first time in history – Russia has a real warm water port. One that isn’t an inland sea, and which isn’t controlled by the Bosphorus.

Furthermore, the American bases are very lightly manned – their allies are extremely unreliable. Most don’t show up to work

And they are also consumed by infighting.

And, lastly, they’re infiltrated with Islamist turncoats. They’ve had a few friendly fire incidents in the last few years

I wouldn’t want to be an American soldier – or ally – at a Syrian base. The US has a history of abandoning its troops and esp allies in formerly critical regions turned secondary

Julian Rimmer 11:09

Yes, a posting to Hawaii better

Dario Garcia Giner 11:09

On the other hand, Russia must seek to maintain its presence there as an utmost priority.

Now Russia’s meandering into Israel/Hamas isn’t the only novel actor.

Wouldn’t you know it – North Korean weapons were spotted amongst Hamas arms caches – notably NK fragmentation and rocket-propelled grenades

Now – I would warn you away from the relevancy of this news

As seen above – Hamas militants also have copious amounts of Western weapons – these are AT-4 anti-tank rocket launchers.

But the foray of North Korean arms into recent conflict doesn’t stop there.

American satellite intelligence has been notified of increased rail traffic between Russia and Pyongyang since early October.

Julian Rimmer 11:11

Wasn’t their fathead dictator part of that traffic?

Dario Garcia Giner 11:12

Well, like the Great Wall of China, he too can probably be seen from space

(though you can’t actually see the Great Wall from space, that’s a myth)

Julian Rimmer 11:12

I was never going anyway

Dario Garcia Giner 11:12

But when it comes to NK, there’s a more worrying development. And that’s regarding the Western conflicts seeping into Korea, rather than the other way around

There are two worrying things to watch out for:

The first is that Pyongyang recently enshrined its first-use nuclear doctrine as part of its constitution

The second was that South Korea’s defence minister sought to suspend a 2018 inter-Korean military agreement which placed buffer zones of non-surveillance between the two countries – as a result of the Hamas offensive

SK leaders claim they are worried that Hamas’ successful incursion means NK could do the same – much as they did in the Korean war

On the other hand – the first trilateral exercises between the Japanese, SK, and US militaries happened just last week

This is totally unprecedented – some have called it the start of Asian NATO – mostly because Japanese crimes in SK have not been forgotten.

Julian Rimmer 11:14

Oh no…

Dario Garcia Giner 11:14

Yeah. Horrible, horrible stuff.

Julian Rimmer 11:14

The comfort women…

Dario Garcia Giner 11:14

And the killing, the burning, etc etc

And Lavrov was just in Pyongyang also

Julian Rimmer 11:14

So far, so Hamas.

Dario Garcia Giner 11:14

Funnily enough, dear watchers

I actually got wind of the Russia-North Korea agreement before probably most people. Even before myself – because I hadn’t realised it at the time.

In 2018, I was fortunate enough to visit the magnificent (not) regime of North Korea.

Julian Rimmer 11:15

Good golly.

Dario Garcia Giner 11:15

Julian Rimmer 11:15

Holidays in hell?

Dario Garcia Giner 11:15

Some of the places were at least designed in a lovely, brutally cold, sort of way.

Julian Rimmer 11:16

(although that doesn’t look any worse than the Butlins holiday centre I once visited in Skegnesss one summer back in the 80s)

Dario Garcia Giner 11:16

As you can imagine – all of our luggage was taken to a separate area of the airport and thoroughly unpacked by border security.

Julian Rimmer 11:16

They’d have found my ladies’ underwear.

Dario Garcia Giner 11:16

When we were ushered in for questioning, I stood surprised as the border guards only seemed interested in our books – not our phones, iPads or laptops.

Julian Rimmer 11:17

What books were you reading?

Dario Garcia Giner 11:17

Thankfully I had left all my books by Thomas Sowell at home. It was only fictional novels of the Spanish Golden Age.

Julian Rimmer 11:17

Ah the conquistadors.

Dario Garcia Giner 11:17

My favourite type of ruthless invader.

I later learned why they weren’t worried about our laptops and phones – the country’s 3G and mobile network is actually an intranet, which our tech could never connect to.

Now, North Korean tourist trips are organised in rotations – with tourist groups rotated between the country’s visitable destinations.

As luck would have it, we were stuck in the same rotation as a bored Russian Air Force general, who was led around by two North Korean generals at all times, uhming and ahhing as forcefully as we did at their lacklustre museums, food, and drink.

And what would you know – on our last day, exiting the mausoleum of NK leaders Kim Jong Il and Kim Il Sung, I spied this general gingerly sitting on an overdecorated pouffe through a doorway, signing a large battery of documents together with grinning NK generals around him.

I was tempted to take a picture. Thankfully, 23-year-old Dario wasn’t that much of an idiot.

Julian Rimmer 11:18

Did you get the children to sing for you?

That’d a staple surely?

Dario Garcia Giner 11:19

All the time

They’re by far the trip’s highlight. Everything else is depressing.

Julian Rimmer 11:19

Did they do requests?

Dario Garcia Giner 11:19

No, unfortunately. They played a funny lire.

Julian Rimmer 11:19


Dario Garcia Giner 11:19

Oops. yes.

One thing I will say to round this off – there ARE rich people in North Korea.

I spotted several mercs, BMWs, and even a Hummer!

Having a cigarette indoors at a Pyongyang hotel (one of the only perks of the country), I sat next to a very fat local man wearing a Rolex and an impeccable shirt and tie, with his bored wife grasping a designer bag sat nearby.

Waddling out of the hotel, a blacked-out Mercedes picked them up. The scene wouldn’t have raised eyebrows in Russia. But I was surprised to see this in North Korea. To this point, Izabella recommends you watch this:

North Korea was a lesson in the power of belief in shaping – or misshaping – a society, no matter the costs

Julian Rimmer 11:20

I believe, Lord, help thou my unbelief.

Dario Garcia Giner 11:21

Either way, I think the power of belief is remarkable and should be learned by Bitcoin bears

Weird segway, I know.

Say what you will about ideology and ideals – like the Juche ideology, Bitcoin stands for something, at least in the minds of the crypto community.

Julian Rimmer 11:21

Seamless transition. (Most readers won’t even notice).

they’re still at Butlins Skegness in their mind

Dario Garcia Giner 11:22

And that ideological purity – regardless of the true reality (because Bitcoin whales can effectively manipulate the price by buying and selling large amounts on exchanges) is as good as gold.

At least, for a generation primed to distrust centralisation and increasingly worthless FIAT.

Julian Rimmer 11:22

I can tell you in my wine shop I’m very reluctant to accept cash – it causes havoc with my till.

I always add it up incorrectly…

I would prefer bitcoin.

Dario Garcia Giner 11:23

But still – I hear you guys say – Bitcoin as good as gold? Come on.

Julian Rimmer 11:23

I don’t like gold either

Dario Garcia Giner 11:23

Well, I think the comparison makes sense. Without hyperbole either.

Gold is NOT some be all end all metal remember?

Its simply very shiny, and doesn’t stop shining, and it’s hard to come by.

Julian Rimmer 11:23

And ductile.

Dario Garcia Giner 11:24

There’s rly not that much more to it. That’s the extent of its intrinsic value. Similarly, Bitcoin technically cannot be centrally run by anyone – so it can continue shining – unlike Ethereum since its latest update – and it has a limited supply

So, I would say I’m a Bitcoin bull

Not for any real fundamentals or economic/intelligent reason

But because I fundamentally believe that belief is far more important than reality.

That is my belief..

Julian Rimmer 11:25

My whole career was an object lesson in that theory.

Dario Garcia Giner 11:25

For investments, I trust ideologists – if the 20th century has proven anything, it’s an ideologist’s tenacity in holding to their set of beliefs regardless of reality or facts.

Julian Rimmer 11:25

Last item on the agenda…


Dario Garcia Giner 11:26


Julian Rimmer 11:26

The dread hand of the Chinese govt was making its presence felt again yesterday as first of all they launched investigation into Terry Gou’s Foxconn subsidiary in China,

For supposed/ imagined transgressions in taxes and land use and on the same day arresting a couple of WPP executives Foxconn is the iphone manufacturer, previously led by Terry Gou who gave it up, while retaining a 12% stake, to run for the Taiwanese presidency in 1Q24 as an independent.

The story jars a little because Gou was hitherto thought of as pro-business, pro-China and even something of an appeaser for the latter but irrespective of the nuances of the CCPs power politics, markets are very trepidatious of another crackdown on corporates and the chopping off of heads that refuse to bow.

Coupez leurs les tetes!

The Shanghai Comp dropped below 3000 yesterday in response but the manipulation of markets has, of course, not ended and a Chinese SWF was visible in the market yesterday.

“Central Huijin Investment Ltd, part of the $1.4 trillion China Investment Corp, bought an undisclosed amount of ETFs and promised to increase holdings for good measure in a public statement.

It appears to me China cares less about the direction of asset markets than it does about controlling them. Order must be maintained above all else – and this is why the Chinese index has gone nowhere for the last few years

Dario Garcia Giner 11:30

Much like us, who will be back here tomorrow!

Julian Rimmer 11:30

Although, for me, nowhere has often had to stand in as somewhere – au revoir for now.

Dario Garcia Giner 11:30

Adios amigos!

The Daily Blind Spot newsletter

Latest blog posts

If viewing on a mobile simply tap the QR code

Leave a Reply

Your email address will not be published. Required fields are marked *