Where finance and media intersect with reality


Spot Markets Live, 6/12/23 (Oil, Indian rally, Baring Vostok)

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

Market Wizards: Julian & Dario’s Bitcoin Blunders, Russian Drama, and Heroic Tales

Indian and Oil Drama: Modi’s Win & Oil Discoveries Stir Curiosity

Russian Rollercoaster: Crypto Ventures, Ozon’s Saga, and Drag Queen Denials

Signals and Spies: Signal’s CIA Origins, TOR’s Spy Makeover, and Mind Tricks

Interest Inflation: US Debt vs. Defence Spending, Job Woes, and Fed Frustration

Heroes and Villains: Pedro Sanchez’s Tango and George Santos’ Drama

Wine & Whimsy: Leroux’s ‘Grand Cru’ in Pommard, Sipping Memories

Bonus: ‘India’s Overbought Market?’ and Russia’s Gas Drama

10:31 JR: Good morning, Aloha and greetings fellow market wizards

Good morning, Dario, and I’m very sorry to understand you contracted a dreadful lurgy when you came to London?

10:32 DGG: Aloha Julian

Indeed, I am nursing myself on some lovely Ukrainian homemade honey

10:32 JR: Slava Ukrainia

10:32 DGG: REALLY NICE honey

10:34 JR: In these febrile markets of intense speculative froth it’s reassuring to realise that human greed and gullibility are eternal and I was reminded by Bitcoin’s rally of the Upstart Holdings fiasco


10:34 DGG: A brilliant video well worth watching

This guy is me every time I ‘invest’ in a stock

10:34 JR: it reminds me of my Japanese trading days when I was taken short in Mitsui Oil or Nippon Oil or such like and then was instructed by the head of trading to hedge my short position by lifting the market in Fuji Oil.

I pointed out they produced cooking / vegetable oil but he was insistent. ‘They won’t know the effin’ difference’.

Dear Reader, he was right.

10:35 DGG: Thats actually insane

Maybe the real risk isn’t that we don’t understand the tail risk of algo driven trading

But that we overestimate the rationality of players in the market in general

It’s like that joke about the dollar on the street not being real because if it were, it’d be picked up

10:36 JR: Upstart is now 90% lower apparently.

10:36 DGG: They’re speculating it as a pump n dump all along – maybe giving him too much credit

He went on TV $10 from the peak its now around $30 dollars

10:37 JR: Right, nunc tempus loquendi about markets

And the highlight again provided by Bitcoin . XBTUSD traded at $44,000

10:38 DGG: And Dario is now up almost 10%!

10:38 JR: I’m indebted to my new Reddit feed for the phrase I read this AM about ‘hodlers going yolo all in’

Which I was delighted to be able to translate back into English as  Bitcoin devotees throwing all their resources behind the Bitcoin momentum trade because life’s opportunities must be seized

10:38 DGG: Of all the GenZ phrases you could have imbibed that is precisely one that I suspect was covertly written by an undercover boomer, Julian

10:38 JR: … or in Latin ‘vade ad eum, occide diem’.

Apparently, there’s something called a kimchi premium for the higher levels of live trading on Korean exchanges.

Meanwhile, in real asset markets

S&P + 10% from Oct 26th low, CTAs bought $225bn of equities in the last month,

UST10YR <4.2%, driven perhaps by fall in crude.

Saudis taking a small price cut to Asia next month, US exports at record 6bn bpd, West Texas crashing on huge build in Cushing.

11:40 DGG:

10:41 JR: now combining both the crypto and the crude stories we could look at how sanctioned entities are using tether in Venezuela to trade between Russia and PDVSA

10:41 DGG: Thats very interesting – probably related to the warning we spoke of by the US Treasury department official of potential terrorists using dollar-backed stablecoins to circumvent sanctions

Speaking of Venezuela – we will leave an in-depth update to when the moves are clearer

But for now:

  • 98% victory for the annexation fo Guyana Essequibo in Vnz
10:42 JR: no kidding

10:42 DGG:

  • Maduro officially claimed the Essequibo region for Venezuela
  • Ordered the creation of a military command structure for the region

But more critically

10:42 JR: So far, so Russian

10:43 DGG:

  • Stated he will immediately grant licenses for “exploitation of oil, gas, and mines in the entire area of Essequibo”
10:43 JR: Well, why hang about?

10:43 DGG: As we’ve speculated on here before, I think this is the key bits that Maduro will seek to get (aside from electoral legitimacy)

Bullish on PDVSA. Mark my words (please don’t) they’ll muscle in on some offshore Essequibo oil claims

Well, Julian, it wouldn’t surprise me if Russia had a hand in this

But not every time that Russia wins a fight does Russia wield the fighting hand

For instance, Spain has imported more Russian gas than ever before – multiplying its dependency on the stuff more than six times with respect to 2018

10:44 JR: Shame on the Spaniards

10:44 DGG: By September of this year, proprotion of Russian gas imports as total of all Spanish gas imports already exceeded 2022

The culprit is Algerian-Moroccan tensions, which led to the close of the Magreb gasoduct in November 2021, shuttering a significant bit of the 45.7% of Algerian gas imports which traditionally occupied the Spanish purchase list

10:45 JR: Never seen the word ‘gasoduct’ before

New one

10:45 DGG: Maybe its a Hispanisisation

Sometimes there are discoveries that make you go ‘yay my country is great’

Most of the time, being Spanish, it’s quite the opposite

But not all unexpected discoveries are bad – especially if you’re not Spanish

China claimed to have found a 100m tonne untouched oil reserve in Changqing

10:46 JR: Well, if you were British you would thrill at the litany of your nation’s crimes. It’s what we do best.

10:46 DGG:

“PetroChina has allegedly unearthed a remarkably preserved oil field boasting geological reserves of over 100 million tons, as reported by the XinhuaChina’s state-run news agency.

PetroChina’s subsidiary, Changqing Oilfield, has substantiated proven reserves of 50.24 million tons, with an anticipated additional 56.2 million tons yet to be confirmed in the region.”

Last in markets miscellany

Kits Klarenberg’s Substack has surprised me by letting us know that Signal is a CIA-baby, basically

Did you know this Julian?

10:48 JR: I didn’t but this is a bizarre coincidence because I’d never heard of Klarenberg before and I reply to people on Twitter about once a year but he wrote something the other day so offensive I actually replied to him in non-complimentary terms

Anyhow, don’t let me distract you

10:48 DGG: So Signal was launched by Open Whisper Systems (a dodgy name in retrospect). The founder of OWS claimed he would never seek VC funding but didn’t openly disclose he received millions from the Open Technology Fund – a pilot program of Radio Free Asia (RFA) launched in 2012 as an asset of the US Agency for Global Media

“In August 2018, its then-CEO openly acknowledged the Agency’s “global priorities…reflect US national security and public diplomacy interests.”

RFA’s own origins harken back to 1948. That year, National Security Council Directive 10/2 officially authorised the then-newly created CIA to engage in operations targeted at countries behind the Iron Curtain, including propaganda, economic warfare, sabotage, subversion, and “assistance to underground resistance movements.” The station was a core component of this wider effort, along with Radio Free Europe, and Radio Liberation From Bolshevism. “

Interesting – it’s like when you learn a word and suddenly you see it everywhere

Does that have a name?

10:49 JR: I know what that is called

It’s the Baader Meinhof effect

10:50 DGG: The terrorist gang?


10:50 JR: Great triv

10:50 DGG: The spread of shadow mobile systems that could unite dissenters in countries opposed to US geopolitical objectives, while being covertly spied on by American agencies, makes a lot of sense

“Accordingly, Signal was and remains very prominently used and promoted by dissidents and protesters backed by the National Endowment for Democracy (NED), a US government agency explicitly created to do overtly what the CIA once did covertly. This was the case in Hong Kong, where Endowment funding serendipitously began flowing to opposition groups a year before Signal’s launch. In July 2020, it became the island’s most downloaded app, after the controversial National Security Law passed.”

The worst part, dear SMLers

Is that I had NO IDEA about it as a daily user of Signal

More proof of my ignorance is the TOR Browser that you use to buy drugs online

ahem I mean which I totally know from a friend

10:51 JR: Thank God you’re only a daily user of signal

10:51 DGG: It was first developed by the US Naval Research Lab in the 90s, and then supported by DARPA before going mainstream

“Tor’s original purpose was to shield American spies from detection while deployed overseas. It was opened up to wider public use due to fears that if an enemy spy agency broke into the system, it could deanonymize users – all of whom would be CIA operatives – and monitor their statements and movements. “Democratising” Tor was intended to spread the risk of exposure, thereby insulating US intelligence and military assets.”“

Which should make you think – how much of the software you use is American (or other) spyware?

“Documents leaked by Edward Snowden reveal US and British intelligence agencies devote considerable time and resources to deanonymizing Tor users. Simultaneously though, they go to great lengths to ensure people aren’t discouraged from using the browser. One file – titled ‘Tor: Overview of Existing Techniques’ – reveals GCHQ and the NSA actively attempt to direct traffic toward servers they operate, attack other privacy software used by Tor visitors, and even undertake efforts to influence Tor’s future development.

This is understandable, given Tor – along with many other “Internet Freedom” tools championed by OTF – congregates anyone and everyone with something to hide on a single network, to which Western spying agencies have ready back-door access. Surveilling user activities and monitoring their conversations is thus made all the easier. Now, recall how “two-thirds of all mobile users globally have technology incubated by OTF on their device”?”

If you really wanna keep something a secret, a retired Spanish naval intelligence officer once told me, it should only exist in your mind

10:53 JR: I was told by a friend of mine that if I had a real secret then not only should I not tell my wife (‘because they have minds like the FBI’) I shouldnt even tell myself

10:53 DGG: John – that is a fascinating rabbit hole my memory doesn’t serve me too well on. The German RAF certainly has some interesting bits, particularly from the angle of GLADIO – that the organisation was rapidly infiltrated and hijacked by the parallel security state in Europe and used for the purposes of the strategy of tension.

10:53 JR: overnight, India’s mkt cap exceeded $4trn

I suppose if I were a serious person I would have started with that headline rather than the meretricious pap about Bitcoin hitting $44k

Over the weekend, Modi’s victory in state elections gave investors confidence he will do similarly well in next year’s natl elections

And now the mkt is really flashing overbought

India is up 33% in the last 3yrs, it’s enjoyed 8 successive up years, it’s the world’s 5th lgst stockmkt now

And this yr alone witnessed an influx of $15bn from intls and $20bn domestically

10:56 DGG: Markets overweight on China collapse story, underweight on India’s collapse

10:57 JR: @johnk – jap red army inspired by baader meinhof no doubt?

I read another great note from Trade Routes last night in which they reiterated, very convincingly, that inflation is dead

And very much a 2022/ 2023 story but not 2024

Pressures have played themselves out after Covid supply then demand shock. Freight and logistics prices falling, durable goods same.

Inflation in consumer services / consumer space is price gouging.

10:59 DGG: It’s that story of the olive oil dealer I met who I asked about whether he was struggling because of the lack of olive oil being produced in Spain. Nope! he laughed. We just mark it up a lot more – we’ve never made more money, he said.

10:59 JR: Housing the biggest factor. Or rent at least, but now subsiding. Central banks will target 2-3% inflation. Higher cmdty prices could cause an inflation scare in1H24 but that’s all it will be – a scare

10:59 DGG: Speaking of housing – new report showed that 44% of all single family home purchases were conducted by PE firms in 2023 in Canada

No secret the Canadian housing market is a total dumpster fire but rise of PE firms as landlords is unsurprising considering the dismal renting laws in most western countries

I’ve always been a renter and bar a flung cigarette butt or two, I’ve always fulfilled the terms of my contract

But we’ve all heard of nightmare tenants and the myriad ways in which they can abuse the system to unfairly protect themselves from the common decency of fulfilling your word

Shoudln’t be surprised when these regulations designed to protect tenants are abused by smart undesirables , evicting single landlords and replacing them with faceless corpoations

11:02 JR: (last week Donald Trump Junior, that cretin, referred to colleagues forgetting the ‘fundamental tenants of Republicanism’ rather than tenets)

11:02 DGG: Who’s that? The FOX-addicted, porch-sitting, shotgun-wielding boomer called Douglas?

Affectionately known as Doug by nobody in the community

11:02 JR: Back onto Trade Roputes strategy… US and G7 in deflationary mode. 2024 slow, sub-par growth, high rates, depressed consumer, higher UNR to impact economic growth. Structural growth stocks to outperform still — i.e. The Big Seven

Broadening of the mkt only takes place when the path of rates is clear.  S&P index may not move therefore, owing to Big 7 being 28% of index. US leads on growth, rest of G7 several quarters behind.

11:03 DGG: That’s actually nuts

Have we ever seen something like this before?

11:03 JR: No, this concentration is unprecedented

I think we showed a GS chart the other day to illustrate this point

Last point here… Inverted yield curve has persisted 2yrs now without a recession taking place, significant upside in the long end of the UST curve. EPS growth estimates for 2024 S&P too ambitious @ 11%.

11:04 DGG: Speaking of the S&P

JPM’s head of technical strategy Jason Hunter claimed it’s in for a sharp reversal to bearish lows, tumbling all the way to 3,500

He also claimed it will top out soon, and that we’re still stuck in a secular bear market – and has been saying the same since August

Do we like his opinion? or do we still hate chartists?

11:05 JR: We don’t hate chartists or the bendy ruler brigade

But for the most part we disregard them and only use charts when

a) it suits our argument

And b) more realistically, when charts confirm something one already intuits.

11:06 DGG: We are champions of integrity here at Spot Markets Live

11:06 JR: Remember: consistency is the hobgoblin of small minds

11:07 DGG: New numbers showed that annualised interest expense on US federal debt is nearing $1.1tn, outstrippign American defence spending

11:07 JR: Niall Ferguson crazy about this

11:07 DGG:

It means the US will spend 34% more on interest servicing than defence spending

Other US-centric data showed that job openings aren’t doing so well

“Job openings tumbled in October to their lowest in 2½ years, a sign the historically tight labour market could be loosening.

Employment openings totaled a seasonally adjusted 8.73 million for the month, a decline of 617,000, or 6.6%, the Labor Department reported Tuesday. The number was well below the 9.4 million estimate from Dow Jones and the lowest since March 2021.”

And here’s a handy chart

11:08 JR: I think this partly informed the UST rally yesterday but I think it’s difficult to infer much for NFP on Friday which is what really drives the mkt

11:08 DGG: Mark – like we’ve said a million times – this market is so blooming confusing

At least for me

11:09 JR: Apropos of nothing… In 2016 when I was working at Jefferies (before getting sacked by the most charmless, inarticulate, thick as a dumbbell head of equities I ever had the misfortune to work with)

I took Mike Calvey from Baring Vostok investment fund around London to see EM fund managers and try to drum up some mandates.

He was a big fish in private equity in those days

11:10 DGG: My own experience with Jefferies is befriending a guy who got rejected from an interview there and came over to my house sullen, sat in a corner, and told me he wanted to ‘burn them all’ rather eerily.

The last I heard of him, he now works at Jefferies

11:10 JR: Considered a guru in Russian private equity and the company had made a large fortune from investments in things like Yandex, Tinkoff and Russia’s version of Amazon, known as Ozon.

In one of those meetings Calvey, a decent bloke and clearly pretty savvy, was asked what he thought about Putin and he surprised me by opining he thought he’d been one of Russia’s great leaders.

It’s not a competitive field

Barely three years later, Calvey was arrested on suitably ludicrous grounds and spent 2.5 yrs incarcerated in prison or at home before eventually receiving a 5-yr suspended sentence and fleeing the country. And he was well-connected

11:11 DGG: What was he done for?!

11:12 JR: Usual rubbish and flimsy charges – embezzlement

This is standard shakedown procedure in Russia

The reason this is interesting now

Is that Baring Vostok is still trying to exit its stakes in Russian companies but the 27% stake in Ozon is valued at $1.6bn and I doubt the Russians will allow that kind of value to leave the country.

11:13 DGG: Did the investments do well?

11:13 JR: Generally they did v well

The problem is the Russians will not allow them, like all western companies – McDonalds, Carlsberg – to extract their cash

11:14 DGG: Sounds like they succeeded all the way to failure

Reminds me of me

11:14 JR: Calvey and his cohorts were tremendously well-connected but honour among thieves is a rare commodity and now they are forced sellers. Barings Vostok has few genuine friends, it seems. A third of Russians use Ozon.

Why should the world care?

from The Bell…‘Baring Vostok was one of the largest and most important investors in modern Russia, playing a key role in establishing many leading Russian companies. But its history counts for nothing now that the fund has decided to leave and is forced to deal with a government commission with the power to delay sales or block them entirely. As the Carlsberg saga shows, nobody is safe from nationalisation while a decision is still pending.

More on private equity

I loved this chart from the redoubtable Simon French of Panmure Gordon

While discussing the paltry valuations ‘commanded’ by UK plc. It explains why all companies want to list in the US which creates a virtuous circle of investors, liquidity, higher valuations and more everything.

Just this morning Ten Entertainment was taken over at a 33% premium to its closing price

That’s Ten Entertainment chart for you

11:17 DGG: 33 is a beautiful number – wisdom

11:17 JR: With the board forced to acknowledge the valuation discount and thin liquidity as the reason behind their capitulation.
A bit from my old Mo at Queens’ College

El Erian, who has I think massively increased his credibility in the last few years with his calls on inflation

He warned that the Fed needs to recover its credibility on forward guidance with the markets or the recent “tremendous loosening of financial conditions” will undermine its policy.

“I do believe the Fed is done raising rates, but I don’t think that validates what is in the markets about rate cuts next year,” he said. “They still have a significant communication problem and they still have a credibility problem.”

“The whole point of forward guidance is for the markets to listen to you and for the markets to do the heavy lifting for you. What we’re seeing now is forward guidance, as we saw last Friday, is being completely ignored by the market.”

Right, ten minutes remaining

Just enough time for Dario to select his latest villain of 2023 and me to highlight a hero of mine and another top ten wine rec

So, Dario: your villain is?

11:21 DGG: Villain number 9 of 2023 for me is clearly Pedro Sanchez, Spanish PM

11:21 JR: Educate me. ‘I know nothing’ in Manuel accent (Fawlty Towers ref. – sub-ed)

11:21 DGG: I still remember when this man was little more than a hopeful spring chicken, the harder-left candidate of a beleaguered Spanish socialist party, whose primary electoral quality was widely admitted to be his good looks

You’ll find no shortage of people disparaging the man

11:22 JR: He’s imported a lot of Russian gas too, as we have seen

11:22 DGG: He’s runt he (typo: DGG meant “run the” – sub-ed) most unstable and thin of Spanish coalition governments, presided over remarkable breaches of protocol in ministerial standards (like using private jets and helicopters for personal events) and oscillated dangerously close to a breakdown with our constitutional court

I can’t help but admire someone who has so tenaciously clung to power while being the most unpopular of all Spanish elected leaders – smallest number of votes cast for him

It’s no wonder Spanish netizens have started favourably comparing him to Frank Underwood

11:23 JR: (‘he’s runt he’ – freudian typing slip)

11:23 DGG: The meme’s quality is bad – there’s a Pedro Sanchez-induced pixel shortage in Spain

But because Spain is my country, he’s on this villain list. But only at number 9. I don’t mind you that much, Pedrito

11:23 JR: Small fry

11:24 DGG: How about you, Julian

You’ve kept your hero suspiciously secret

11:24 JR: It’s so much easier to find a villain rather than a hero, which I suppose is the point Bonnie Tyler was making more melodically all those years ago
YouTube11:24Bonnie Tyler – Holding Out For A Hero (Official HD Video) – YouTube

News Image

My second hero of 2022 is … daramatic drumroll, tarantara of trumpets…


George Santos!

11:25 DGG: LOL

11:25 JR: Now I know the disgraced former congressman told a few fibs / embellished a fairly squalid existence into a glittering academic and professional career on his CV, then he stole money from veterans and allowed their pets to die from cancer

That he claimed to be Jewish, he denied being a drag queen in Brazil, that he spent campaign funds on Botox and Only Fans, but I bow down in admiration before the sheer chutzpah of the man to take on the establishment

And the real establishment, not a metaphor for it

11:26 DGG: I think the drag queen in Brazil is the best part

11:26 JR: Against insurmountable odds, to suffer the slings and arrows, the withering contempt of the media and the body politic, he dared to challenge reality…

And then he lost

And lost quite badly

And he probably ends up in the slammer where I’m not sure he’ll go down too well

If you’ll pardon the expression

He put on a great show of defiance and when most members of congress are ridiculous but deny it, he seemed refreshingly open about his all-too-human propensity to try and fail.

He lived his life like a scandal in the wind…

watch this afterwards from SML – vg

One minute left for Wine No3 of Top 2023 wines…

11:28 DGG: You’ve changed my mind on Santos. Well fitting pick for our heroes of the year

11:29 JR: Clos des Epenaux 2009 by Benny Leroux in Pommard

There are no Grands Crus in Pommard, Burgundy, but this is priced and tastes like one

I actually tasted with the winemaker Benjamin Leroux about fifteen years back and when this was launched in 2011 I was in the rare position of actually having some money and bought three magnums.

My son turned 21 this June 1st, a cloudless, sun-baked high-summer day and we drank this with close friends over my burnt barbecue offerings.

11:30 DGG: That’s a good point Mark – a wine by a man called Benny isn’t exactly shouting premium from the rooftops.

11:30 JR: 2009 was a millesime solaire and you could taste it in the ripe redcurrant flavours and long silky, perfumed finish.

Life’s all about memory and loss on day when your little boy becomes a fully-fledged adult and you lose him, it’s a consolation of sorts to have the memory encapsulated in the empty bottle.

11:30 DGG: You sell it deliciously

11:30 JR: And, if you can afford it, here’s the link, and invite me round

News Image

If there was a Grand Cru in Pommard this would undoubtedly be it, and in years like 2009 you could make an argument for it. This is where Ben Leroux really puts his genius to work; the completeness is overwhelming. As in 2005, Ben has crafted something quite magical. (Joss Fowler, Cellar Plan Account Manager) A very i

@marks – thx for the brightwell link yest, v interesting

On that wistful note, nunc tempus taciendi

11:32 DGG: Sayonara

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