Where finance and media intersect with reality


Spot Markets Live Transcript: 05/10/22

Screenshot 2022-10-05 at 14.37.14

Today’s Spot Markets live session is with Ben Harrington, the founder and editor of Betaville.

Comments from Izabella and Ben that address audience questions have been put in bold.

Izabella Kaminska 11:57

Hello and welcome to Spot Markets Live

The whirlwind tour of the markets.

Exciting day today… as it’s the last chance to get your free logins. After that, we are going subscriber only (both Betaville and Blind Spot subscribers) for the live Coodash sessions + access to the comments (which remember are sometimes even more insightful than us 😜). So if you made it here, you’re in for the long term. Well done 🙂

Ben Harrington 12:00

Morning all

Betaville in the house!

Izabella Kaminska 12:00

Nice to have you with us, Ben!

I last bumped into you at the Wirecard screening.

did you enjoy that?

Ben Harrington 12:00

Yes, and everybody in Mayfair can’t stop talking about it since

Izabella Kaminska 12:01

All the SML regulars were there, apart from Anjuli. We should arrange some other face-to-face soon enough?

Ben Harrington 12:01

They were still going on about it yesterday in one of the Berkeley Square drinking spots

Izabella Kaminska 12:01

Good to know. Great film. Do watch it.

I’m back from Tory party conference land in Birmingham – was up there for a panel session for Positive Money with MP John Glen, formerly the City minister.

 But he had to skedaddle to see Liz Truss halfway through.

It’s good to know the really important issues were top of the agenda.

No offence to badgers.

It’s been a funny week hasn’t it?

Ben Harrington 12:03

The politicking of politics is not easy to follow for a grubby corporate reporter like myself.

Izabella Kaminska 12:03

Meanwhile, in markets, all sorts of rumours were flying around on Sunday and it really felt like things could come very unstuck.

And yet here we are… relative calm. US Stocks were flying yesterday.

Ben Harrington 12:04

The weekend seems to best place to start the really wild rumours these days

Izabella Kaminska 12:04

It occurred to me just now that the way we have organised the banking system post-2008 ensures that banks don’t go boom anymore – they bleed out slowly until their death is so well forecast and anticipated it can’t shock anyone.

Where 2008 was a bunch of banks having a cardiac arrest, 2022 could be a bit like slow-running cancer doing its thing.

Bar a miracle.

Ben Harrington 12:05

Any more decent chat from the Tory shindig?

Izabella Kaminska 12:05

We were talking about the future of British finance and the key topic was CBDC and crypto.

The UK is apparently setting itself up to be a global crypto industry leader under the Truss government – did you know that?

Ben Harrington 12:06

I thought Crypto had gone out of fashion now?

Izabella Kaminska 12:06

On CBDCs, my big thing is that all these developments are happening behind closed doors.

The Cbanks are moving ahead because they feel if they don’t then fiat will be outmanoeuvred by private sector challengers (such as Facebook, Amazon etc) or by foreign competition such as the e-yuan…

Apparently, Chinese restaurants in Liverpool already have signs on the door that they accept WeChat Pay…

But I digress…

Ben Harrington 12:06

really? wow

Izabella Kaminska 12:06

My hunch is that the British public is very attached to the idea of paper money, and even if they are embracing digital money, they are concerned about losing total control and privacy… even if their behaviours imply they are not.

They don’t just want to wake up one day and be told the government is rolling out a digital sterling and this is how it’s going to work and that’s that. They want to be sure that the design of such a thing serves them…

Ben Harrington 12:07


sounds interesting

Izabella Kaminska 12:07

But when you ask the Cbanks why they aren’t engaging with the public and pushing into topic into Philip and Holly This Morning territory, they say that it is not up to them. It’s up to governments.

They’re right.

Ben Harrington 12:08

So yeah what did John Glen say ?

Izabella Kaminska 12:08

He said the government hadn’t yet decided if CBDCs were even a given – which I actually think is good news. But then he somewhat stubbornly also pointed out that they wouldn’t do a consultation until they had already decided to do it.

I’m not a policy guru. So perhaps this is entirely standard. I stick to my corner of markets. But the fact that the government has to decide something first to then consult the public seems a bit bonkers.

We’re talking about one of the most important decisions for our financial system ever.

People want there to be a public discussion about this sort of stuff before anything is decided.

And then authorities are surprised when the conversation ends up being hijacked by conspiracy theorists… and, err, Russell Brand who probably by now has more followers than the Financial Times.

Ben Harrington 12:09

6 million vs 760k

Izabella Kaminska 12:09



Ben Harrington 12:10

Hang on, Bill Gates just predicted WHAT?

Izabella Kaminska 12:10

are you ok Ben?

Ben Harrington 12:10

ha. Yes. That’s a real headline from his show

Izabella Kaminska 12:10

Oh Russell, you and your SEO headlines are something else. 😂

I find his takes very amusing and entertaining –  he’s a great barometer of what public sentiment about everything from finance to nordstream is beyond the bluecheck echo chamber… even if he is getting a bit repetitive.

Ben Harrington 12:11

Izzy just wanted that preamble to point out she’s now officially a blue check mark

Izabella Kaminska 12:11

Lol. Yes. Finally and officially part of the echo chamber as of yesterday. No more insight here.


But …now markets, econ and corp news. What’s on your mind Ben

Ben Harrington 12:12

Soooooooo …

Don’t we still have a global inflation problem?

Izabella Kaminska 12:12

I believe that we do

Ben Harrington 12:13

So why are so many people talking about the Fed (and other central banks) pivoting?

Izabella Kaminska 12:13

I did not know this.

Ben Harrington 12:13

perhaps the rabble can enlighten us?

Izabella Kaminska 12:14

Here’s the main story

Australia’s central bank just surprised forecasters by raising interest rates by less than they anticipated — and that’s lifting hopes the Federal Reserve will pivot to hiking interest rates less aggressively, according to analysts.

Yeah, so I guess Ben the expectation is that they have to slowdown on the tightening to avert a deeper recession…

Ben Harrington 12:16

So apart from Germany, there is no recession at the moment in the rest of the western economies and generally strong employment with issues about the supply of labour

Izabella Kaminska 12:17

Funny you should say that because on this panel I was on yesterday this came up. And the main organiser asserted the UK was in recession.

Ben Harrington 12:17

i.e. employers/business people complain about not getting staff, not being able to hire.

I know first-hand from some of the newsrooms that are losing experienced reporters hand over fist to the Borg – that’s Bloomberg – and can’t find replacements quick enough.

Which is great for freelancers …

Izabella Kaminska 12:18

Bloomberg pays in $ revs so UK freelancers are suddenly cheap

Ben Harrington 12:18

Like little old Betaville

Izabella Kaminska 12:18

But the recession point is an important one

and when I challenged the organiser on this yesterday, she asserted very clearly that we definitely are in a recession. But then, I thought there was this last week?

UK averts immediate recession with surprise expansion in 2Q

So I am confused dot com. ARE WE, or are we NOT, in a recession? Probably by now yes? But technically, I’m confused.

Ben Harrington 12:20

But who cares if the real problem is INFLATION?

Izabella Kaminska 12:21

Indeed…. so answers on a postcard. But lets move on.

So.., the big deal news overnight relates to…


(as I like to call it)

How it started:

How it ended:

Meanwhile, Elon has reverted to his original $44bn Twitter bid.

What’s the heck is going on Ben?

Ben Harrington 12:23

Well I think only Elon Musk’s brain has the answer to that question

but …

it has been reported he is now saying he is willing to stick to his original deal to buy the microblogging site for $44 billion or $38 billion.

That sent the stock up over 20pc in late US trading and means some hedge funds and big punters, such as Carl Icahn, stand to make millions (remember though just a few hours earlier they stood to lose millions).

Izabella Kaminska 12:24

And what’s the issue now?

Ben Harrington 12:25

How does the deal get financed, and whether the banks are going to take a big hit down the line? Banks have committed to financing the deal which is effectively going to be a jumbo IPO led by Elon but will then have to syndicate the debt.

Robert Smith debt expert correspondent at the FT was already speculating this morning on, er, ironically Twitter that next year the “second lien” debt holders will be the new owners of Twitter i.e. there will be some kind of debt for equity swap via a restructuring.

Izabella Kaminska 12:26

And Bloomberg’s Matt  Levine has found this exposure for the banks:

Ben Harrington 12:27

That might be a leap too far for the moment but we do know that Wall Street banks like Goldman Sachs, Credit Suisse and Bank of America have had to take losses on the syndication of LBO debt recently in particular with the sale of Citrix, an LBO carried out by Elliott Management and buy out shop led by another Robert Smith Vista Equity Partners, debt. According to your old colleagues the venerable FT, the banks lost $600 million last week on Citrix debt.

Izabella Kaminska 12:28

People asking if some of his recent stunts are a distraction from his Tesla shares…

Ben Harrington 12:29

Yes there were some very senior bankers who I spoke to a few months ago who saw this whole bid as a way for him to cash him some Tesla stock

But that was before he reverted back to following through with the offer.

Izabella Kaminska 12:29

I have an additional (highly speculative) theory. I scribbled it down in the Blind Spot Wrap last night.

The Twitter polls he’s been doing are a honeypot!  And it’s all part of a much bigger story related to military-grade influence ops.

Remember, Elon is engaged in some very strange tit-for-tat legal wrangling with Twitter related to the whistleblower who leaked that the platform was full of foreign spies and security issues.

The key revelations from the original whistleblower were that thousands of employees have access to sensitive user data including private messages, current locations home addresses and phone numbers.

I mean, think about it. Twitter is hardly profitable. Its last quarterly results were a disaster with a $270m loss on revenue of $1.2bn. The previous quarter it generated $513m in profits.

But how would you like your DMs (which as far as I know are not encrypted) to be leaked?

Ben Harrington 12:30

That is some serious conspiracy theory you got going there Izzy!

Izabella Kaminska 12:30

Putting my Wirecard hat on, that is some mighty sensitive and very Kompromatty data. No wonder the spies are all over the thing. He who controls the Twitter backdoors controls the world and all that.

@inquiring minds want to know if underwriters like Barclays hedged by buying Twitter calls?

Ben Harrington 12:33

No idea to be honest

Izabella Kaminska 12:33

We will inquire and get back to you. But there’s a lot more here than meets the eye, and Elon is a perpetual distraction agent.

Ben Harrington 12:33

Sure is!

Izabella Kaminska 12:33

Let’s look at markets more broadly

European stock indices are mostly down about 1%

Italy leading the fallers

Ben Harrington 12:34

Seems like the broader rally is already starting to fade unless the US rekindles it this arvo

Izabella Kaminska 12:35

Hello to stagflation.

Ben Harrington 12:36

Just keep it simple: if the fed is tightening; equity markets, well almost all markets, will go down. Everything is a bear market rally…

Izabella Kaminska 12:36

Coming back to deals…

Ben Harrington 12:37

Yes. Loyal readers will know I’m always interested in deals.

But all this recent talk about “foreign predators” from the US pouncing on cheap British companies because of the weak pound might be a bit wide of the mark. I mean, that trend has been happening already over the last eighteen months so isn’t really that new.

Izabella Kaminska 12:38

(@darren interesting stat! Last time the S&P 500 gained 2% two days in a row coming off a 52-wk low? 24/11/08 and 19/09/08 ….)

Ben Harrington12:38

If anything, lately the US private equity houses like Thoma Bravo and GTCR stalking London-listed companies, such as Darktrace, and more recently GB Group have been pulling out not pressing on with bids.

And the pound has also pretty much rallied back to where it was during Kwasi’s mini-budget so that line of reasoning for more predatory moves by foreign firms is looking increasingly redundant – perhaps worth looking at where the pound has come from since the Brexit vote in 2016 or better still since 2007 when it was 2 dollars to 1 pound!

Izabella Kaminska 12:40

But Ben, aren’t you all about these Uncooked and cooked and variably charcoaled market rumours?

Ben Harrington 12:40

yes like a good rumour!

question is … do the rabble?

Izabella Kaminska 12:41

Albeit, within the confines of journalistically qualified and vetted sourcing.

Ben Harrington 12:41

So, well, believe it or not, some UNCOOKED rumours actually get confirmed.

Take, for example, DXC Technology, the US-listed IT services company.

Betaville published a series of UNCOOKED ALERTs in September about the fact that the company was / is in play and private equity firms, such as KKR, were circling

Then last night there was a statement from DXC confirming an approach.

Izabella Kaminska 12:44

ASHBURN, Va. October 4, 2022 — DXC Technology (NYSE: DXC), confirmed today that management has been approached by a financial sponsor regarding a potential acquisition of the Company. Management remains focused on the Company’s transformation journey. Consistent with its fiduciary responsibility to maximize shareholder value, the Company is engaged in preliminary discussions and is sharing information.


As a reminder:

UNCOOKED: Market gossip as Betaville receives it. This scuttlebutt has just come in and hasn’t been checked with all of Betaville‘s well-informed RARE sources let alone formal journalistic channels (public relations executives, bankers etc). The rumour might be total codswallop, rubbish or nonsense – but then again there may be something in it, so it’s worth airing on Betaville.


RARE: Market gossip that has been tested with some of Betaville‘s USUALLY WELL-INFORMED sources. In fact, Betaville might have spent several days or weeks working on this story. However, the rumour hasn’t been tested through formal journalistic channels (public relations executives, bankers etc). The scuttlebutt might be complete rubbish – but then again there may be something in it, so it’s worth airing on Betaville.

There is also WELL-DONE

Best top-notch sources.. and multiple.

ok – what else ?

Ben Harrington 12:45

in the US there are a few more UNCOOKED bid tales circulating

around Akamai Technologies

Izabella Kaminska 12:46

And what do they do?

Ben Harrington 12:46

A US-listed cloud technology business

Izabella Kaminska 12:46

Love a bit of cloud

Ben Harrington 12:47
Yes and there is some UNCOOKED talk about Denbury closing in on a sale following a strategic review
Izabella Kaminska12:47

And what’s Denbury?

Ben Harrington 12:47

It’s an independent US-listed resources company

Izabella Kaminska 12:48

Anything on this side of the pond?

Izabella Kaminska
Redbox Headline RedBox Global
Izabella Kaminska 12:48

Truss flyby

My standwithGBP position is looking shaky again

Ben Harrington 12:48

In Europe, there are some UNCOOKED rumours about a French property company Nexity.

The talk in the market is that there are two private equity firms looking at the business – one from France and the other one said to be CVC Capital Partners.

Ooh Liz back with the same old lines eh

Izabella Kaminska 12:49
Redbox Headline RedBox Fixed Income
Ben Harrington 12:49

yeah it’s up 10pc over a week

Izabella Kaminska12:49

They only care about the down news.

Ben Harrington 12:49


Izabella Kaminska 12:50

It’s so unfair!

Because Ben, every reporter in the UK seems to want to trash Britain. Regardless. It’s a weird psychological thing. If it bleeds it leads, and that’s especially the case if it’s anything to do with Britain. And I think that predates Brexit.

@darren wow!

But sorry Liz interrupted you. What else is going on down grub street?

Ben Harrington 12:51

well in Belgium

Izabella Kaminska 12:51

@darren {R2}😂

Ben Harrington 12:52

UNCOOKED rumours abound that Liberty Global, the cable group controlled by John Malone, is looking out buying out the remainder of Telenet it doesn’t own.

Izabella Kaminska 12:52

And finally, anything going on in the UK?

Ben Harrington 12:52

Yeah well, the Livingstone Brothers turned up with a 3.5pc stake in Whitbread yesterday.

which seemed to have been missed by quite a few of the daily newspapers business sections.

Quite what their angle is, remains to be seen …

but a few investors have been talking about property angles around Whitbread

and whether things can be done to “increase value”.

Izabella Kaminska 12:55

It’s been a while since we’ve seen stake building in a FTSE 100 listed company by a wily entrepreneur…

Anything else? Because I have some stuff on Japan to finish off with and a quick energy thing…

Ben Harrington 12:57

Well, the UK M&A market appears to lack a bit of confidence at the moment and arb funds have been complaining there aren’t enough announced deals, which is never a good sign. The Smith & Nephew UNCOOKED bid rumour doesn’t seem to want to go away and neither does the takeover talk enveloping Bunzle – one has to assume both of those deals would be trade buyers though, giving the speculation an extra bit of plausibility.

Izabella Kaminska 12:57

They would be mega deals if those happened.

Ben Harrington 12:58

There has also been talk about National Express, the bus and rail company being a takeover target. Given the recent activity in the sector i.e. DWS Infrastructure buying Stagecoach, which National Express tried to merge with before the German group’s approach and the failed approach from Isquared for FirstGroup … you can see why. But what with the financing markets where they are and the threat of Labour government the market is buying that rumour at the moment …. Let’s see … no smoke without fire as they say!

Izabella Kaminska 12:58

Cool, great sweep of corp stuff.

Worth mentioning Liz Truss. The full speech is here.

Izabella Kaminska
Redbox Headline RedBox Global
Izabella Kaminska 12:59

Pound didn’t really like it, but let’s face it the pound just doesn’t like her at all.

The stormy stuff is compounded by a cold weather forecast for Europe.

But it’s not just the UK facing stormy times, of course. There are ongoing developments over in Germany. I’m being told the situation there is really risking division across the Eurogroup.

Ben Harrington 13:00

As far as I can see it seems like old Crispin Odey is driving the short-term direction of the pound…

it went up 10pc on him closing his short bet on it

Izabella Kaminska 13:00

This is in Italian

Izabella Kaminska 13:01

BRUSSELS – “The editorials are personal initiatives of the competent commissioners. They do not bind the Commission”. The spokesman of the EU Commission, Eric Mamer, said about the letter written by Paolo Gentiloni and Thierry Breton on the need for European solutions on the implementation of the Sure fund. “Obviously the president herself spoke of the need for European solutions and the protection of the single market in her speech on Saturday in Sofia,” he stressed.

Sounds esoteric right? but apparently a big deal.

Izabella Kaminska 13:05

Politico has the context:

LUXEMBOURG/BERLIN — Germany on Tuesday poured cold water on a proposal by France and Italy’s European commissioners to issue new EU-denominated debt to tackle the economic fallout from the energy crisis.

Berlin is in the eye of a growing political storm after it unilaterally announced a cash injection of up to €200 billion into its own economy to help cushion the blow of soaring energy prices on consumers and industry. France and Italy have warned that such a massive intervention could create an unfair imbalance in Europe’s single market, with German companies gaining a state-funded advantage over EU rivals.

It appears the Italian and French commissioners Paolo Gentiloni and Thierry Breton made a call for greater European financial solidarity … which upset the Germans.

So there’s potential fallout to watch there.

Last and not least as we are 7 mins over… I just wanted to draw attention to Steven Englander’s piece on Japan.

The Standard Chartered macro strategist thinks the BoJ’s intervention in the yen a couple of weeks back wasn’t the disaster everyone thinks it was.

We think Japan’s currency intervention was more successful than many in the market
give it credit for. Well more than a week after the intervention, the JPY is about 0.75%
stronger versus BBDXY compared to just prior to the intervention; for the first five days
after the intervention, the JPY traded 1.5% stronger (Figure 1). To us, this looks like a
reasonable return on the one-off USD 20bn reportedly spent on the intervention.

We rate the intervention as reasonably successful – neither a failure nor a rip-roaring
success. Our takeaways are threefold. (1) Intervention could be successful but will
require many more resources. (2) It is more likely to be successful if seen as part of
the process of exiting yield curve control (YCC), rather than as an effort to prolong
YCC. (3) If successful, the Bank of Japan (BoJ) and Ministry of Finance (MoF) should
be able to buy back the sold USD reserves more cheaply than it sold them. On the
whole, we are sceptical that the weak yen is doing Japan much good, and as in the
US, we doubt that the impact on inflation will be permanent (see Reverse currency
wars less than meets the eye

Anyway here’s a nice chart to finish things off

Ben Harrington 13:12

Got to go … thanks for having me Izzy

Izabella Kaminska 13:12

Ben’s obviously on the end of some exciting deal news, as his phone was endlessly ringing and he had to pop off. But I see he has already said goodbye.

@frederic – I will have to investigate further, but was told it is indicative of widening troubles.

Anyway on that note, thank you for all your contributions and we will wrap it up here. We are back next Monday with Anjuli Davies at 11am. Do spread the word 🙂

Ciao from me

And remember we are closing free signups as of tonight. After that you will need to be a subscriber to take part in the live sessions.

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