Where finance and media intersect with reality


Spot Markets Live Transcript (23/01/23)

Screenshot 2023-01-23 at 18.02.25
Izabella Kaminska10:59

Hello and welcome to an extremely chilly Monday morning! Brrrr…..

Today I’m joined by Anjuli Davies. Howdy Anjuli. How are you coping with the cold?

Anjuli Davies11:00

Even my 4-year old today told me he wants Summer to come.

Izabella Kaminska11:00

Apparently British Airways has cancelled at least 80 flights.

Anjuli Davies11:00

Also Happy Year of the Rabbit

Izabella Kaminska11:00

Ah yes, we had a lot of Chinese themed activities at my house this weekend.

My four-year old also insisted on taking me to a Chinese supermarket

And I caught her watching Chinese new year songs on Kids Youtube.

I think the Chinese cultural infiltration war is doing well 🙂

(At least in our house!)

But we love dumplings, so we don’t mind.

Anjuli Davies11:02

It does seem to be getting bigger every year, but then so does Halloween, Easter, Christmas…anything to celebrate mass market consumerism

Izabella Kaminska11:02

Before we crack on with markets news and how the energy grid is going to handle this latest cold snap, I have some SML and Blind Spot news.

As of February The Blind Spot will be entering into a major collaborative deal with a mainstream news name. Woo hoo.

 I can’t give you all the details yet, as they will be the ones making the announcement, but I can give a few hints about the “plan”. Let’s call them “mystery news organisation” for now.

  Anjuli Davies11:02

You heard it here first ….of course

Izabella Kaminska11:02

Essentially there’s a licensing agreement in play. My subscribers will benefit from having access not just to TBS original content, but also the paywalled content of “Mystery outfit” – which is top-quality stuff.

I will be operating in a dual role bridging both outfits, which will help my news-getting capacity but also the economies of scale at the Blind Spot.

What that means for SML is that as of Feb 6, Anjuli ascends to the hefty ranks of Spot Markets Live Editor.

 I will be moonlighting when I can. But we will also be onboarding new names to expand these sessions.

The Blind Spot wrap, which has been free until now will go behind the paywall, and turn into the main outlet for my voice. It will be published on Friday and sent out on Saturday morning.

Long-form Spotlights will continue on as they are but benefit from access to “mystery outfit” content. This will still be edited and curated by me.

So on that note, let’s crack on.

What’s going on in markets today?

Anjuli Davies11:03

European markets are mixed this morning by generally flattish.

Ocado is up 4% on the FTSE 100, that’s a relief rally after Ocado took a knock last week after its forecast fell short of expectations as “even wealthy customers” feel the squeeze from inflation.

Izabella Kaminska11:04

National Express is also up nearly 5% after winning a £880m contract to run German rail lines.

Here’s the story

The transport group’s German rail business has won €1bn contract to run the RE1 and RE11 Rhein-Ruhr-Express (RRX) lines until 2033. The Rhein-Ruhr-Express is a regional rail network in north west Germany, in the state of North Rhine-Westphalia on the border with Belgium and the Netherlands.  

Anjuli Davies11:05

In AIM-news , looks like the takeover of the funeral provider Dignity has been given the green light. We wrote last week about some concerns over the price and the debt structure but looks like its biggest shareholder and former CEO has won the day.

Shares are up 8% this morning , hovering around the offer price of 550 pence a share


Izabella Kaminska11:06

A bidding consortium consisting of SPWOne V and Castelnau Group, whose investment manager is Phoenix Asset Management Partners, made a final offer of 550p per each share, which Dignity said it had accepted.

The deal values the group at £789m when taking into account both its market cap and the cost to pay off its debts.

Gary Channon, former chief executive officer of Dignity, is working as chief investment officer for the consortium’s investment manager Phoenix, which Dignity said will allow investors to benefit from his former leadership.

Dignity also revealed that it expects its underlying operating profits to have more than halved this year compared to the previous year, after introducing cheaper funeral services.

Anjuli Davies11:07

Twitter has also been alight about talks between Brazil and Argentina to form a common currency

Izabella Kaminska11:07

“Negotiations are moving forward with the main trading partner to create a common currency without eliminating the peso or the real. People with knowledge of the matter say its implementation is “realistic” and that it could be complemented with a swap between the two countries. Bilateral meetings will be held on January 25 to “oil” the mechanism. They are already considering “Sur” (‘South’) as a possible name for it.”

So this news is quite fascinating actually. Looks to be a Lula-inspired idea mostly. And the response from all the serious people on “fintwit” is that it’s bonkers.

Anjuli Davies11:08

But some think this is all smoke and mirrors



1. Unlikely ever happens.

2. These things tend to take decades to construct.

3. It’s a common currency not a single currency which everyone thinks it is. This is not a euro equivalent. Pure faff…

Izabella Kaminska11:10

So these are quite important points. The FT is comparing it more to the CFA franc zone in Africa, but i don’t think that’s a worthwhile comparative either.

11:11Since that’s a mechanism that outsources sovereign control over the local currency by linking it to french reserves.

Dario went deep into this last year. You can read all about it here

Chief exemplary of this continued colonial dominance is the CFA Franc. This currency is still used by eight West African countries and six central African countries, being imposed in 1945. An abbreviation of Franc des Colonies Francaises D’Afrique, it remained a clear example of old-school French dominance of African economies.

The agreements underpinning the currency forced the following;

  • Central banks keep 50 percent of foreign assets in the French treasury.
  • FOREX cover of minimum 20 percent to cover for ‘sight liabilities’ in the French treasury.
  • Each signatory government is limited to a ceiling of 20 percent of its revenue from the previous year.

De facto, 70 percent of the signatories’ hard currency had to be kept in French banks, only being reduced to under 50 percent in 2012 after unrelenting regional pressure. In many cases, CFA countries could only access further funds by effectively getting their own money loaned back at interest near commercial rates from French banks – which led them to increasingly depend on funding from international markets. And this is only scratching the surface of criticisms that have been leveled at the CFA Franc in its decades-long history.

But it was seen as hugely advantageous to France and there have been continuing efforts to disband it.

The Brazil Argentina tie up, well, what can I say, we have very little detail about any of it.

But the two countries have one thing in common: inflation.

11:14And actually, when I was at a Santander conference late last year, the governor of the Central bank of brazil was there — tho he is a bolsonaro hangover – and highlighting that South American countries saw the global inflationary turn coming, and acted far more preemptively than the western central banks.

Not sure if the old regime will go for this new concept though.

Anjuli Davies11:15


Not new and not discussing a currency union. The new “currency” would be an accounting unit with trade settled in BRL and ARS through currency swaps. CB of Brazil likely doesnt want to accumulate ARS reserves and they axed the same discussions 4 years ago.

One more “expert” view…


Many reasons to be wary 1) currency union w/out fiscal and economic union 2) argentine macro and currency policy 3) which Brazil macro policy will this govt pursue 4) liquidity in this channel. But am interested in what new channels open up even if volumes likely low

Izabella Kaminska11:17

That sounds about right. It’s all fairly mysterious though, but the idea seems based on this article published last year by finance minister Fernando Haddad: https://www1.folha.uol.com.br/ilustrissima/2022/04/criacao-de-moeda-sul-americana-pode-acelerar-integracao-regional.shtml

11:19What is interesting though, is that it does tie into the Zoltan Pozsar thesis that there will be more tie-ups between emerging markets and BRICS countries as they try to find alternatives to the dollar. This isn’t entirely a reserve based announcement or even a CBDC, but it’s still indicative of the mood. What I will say is that this isn’t the first time these sorts of things have been announced. I’m sure commenters will remember better than me other attempts at forming common currency zones.

But there were many.

Anjuli Davies11:19

Meanwhile sticking with South America, have you seen what’s going on in Peru?

Izabella Kaminska11:20

@helmholtz – does sound like a bit of an anchor.

Izabella Kaminska11:21

I need to read up on the Peru story, all I know is that they closed off Machu Picchu.

As a South American aside, it was recently pointed out to me that the creator of Inspector Gadget and The Mysterious Cities of Gold, is the head of one of those crypto-friendly banks.

This dude

Jean Chalopin (born 31 May 1950) is a French bank executive.[1][2] During the 1980s and early 1990s, he produced a range of successful animated series, first as the founder and president of the production company DIC, then at his newly created company C&D from 1987. He is probably most well-known as the co-creator of Inspector Gadget, as well as the co-writer and producer of The Mysterious Cities of Gold. He currently heads Bahamas-based Deltec Bank.

So from looking for mysterious cities of gold, in Japanese animation mode, to founding a crypto bank.

Quite a story!

Anjuli Davies11:23

Quite a career!

Izabella Kaminska11:23

Though I have to say, Big fan of the cartoons

“ah,.. ah ah ahhh .. ah – some day we will find the cities of gold. And put the gold in a reserve, and then issue digital tokens against it, from the Bahamas….””

El Dorado instead El Salvador tho.

Also, didn’t realise there was a weird alien subplot in the whole thing where it turns out the people who made the golden pyramids were a weird ancient alien race. So there you go…

Moving on from fantasy to reality…

Just to note, Zoltan has been getting a lot of hate online. Last week, Michael Pettis did a long thread debunking the multipolar thesis.

He makes some very good points, in response to Zoltan’s latest oped in the FT. But I still think he is missing the impact of confiscation and non-neutrality risk. Yes, it won’t be easy for surplus generating countries to move off the dollar, but I do think there is going to be a lot more creativity and diversity.

Anjuli Davies11:28

Was there anything about this at Davos?

Izabella Kaminska11:29

Not directly. The overall view from Davos was that everything wasn’t as bad as feared in general, from the economy to energy resilience and populism etc. But, I did catch an interesting panel with Thomas Jordan, head of the SNB, where he was being pressed about the bank’s recent losses on its exotic reserve portfolio.

He was very defensive, saying you have to see the losses in the context of many years of profits. But also that it’s a function of the Swiss exchange rate, and that they don’t expect deterioration any time soon. But also that, if they had not invested in global equities, they might have performed even worse.

In another panel, Christine Lagarde dodged every worthwhile question about the eurodollar exchange rate.

11:32Kuroda, meanwhile, said he was committed to ongoing accommodative policy, and was not phased by illiquidity in the bond markets, because Japanese inflation still warranted the policy.

And last of all, the general view regarding the economic outlook was completely uncertain. Most of the panellists were confused why western economies had escaped recession so far, and Larry Summers in particular seemed to be questioning everything.

He said that having been very sure about secular stagnation in the post GFC era, and then equally convinced of the inflationary case post Covid — he now had no clear view on what was to come.

which for Larry Summers, i guess, is a quite an admission. The view was it could go either way, and that perhaps there were mysterious forces at work that were now boosting the economy after all.

Anjuli Davies11:35

Mysterious forces at work?

Izabella Kaminska11:35

I think in terms of targets, there was some talk about “not as bad as we expected” but not quite at upgrade mode. Tho Christine Lagarde implied strongly that the ECB was going higher rather lower.

But it’s worth noting that the New York Fed swap line system is still being tapped on a regular basis.

11:38@chris Cook – yes that was the brainchild of andres arauz no?



Anjuli Davies11:39

Izzy has always had a good take on ESG investing. Her latest here:


So, when I stumbled across this, I had to put it to her


ESG labels anyone:

Izabella Kaminska11:40

(Oh one thing more regarding outlook, i think the opinion may also have been that we stole growth from China, and that once China properly gets going again, all the weird figures will go back to norm.)

(@bruce – I believe there is a lot of snow now)

Anjuli Davies11:40

I remember my Dad when I was at school trying to do a “green” label to sell to businesses…it never took off . He was too ahead of the curve…

Izabella Kaminska11:41


well I personally tend to think a lot of this is bullshit and greenwashing, mainly because a lot of the metrics are actually unknowable.

11:42Some aren’t. For example, companies should be able to figure out the proportion of women who work for them quite easily. But when it comes to carbon footprint or waste production in tonnes, or whatever GHG emissions are, it’s all a bit of a fudge.

It was interesting that last week Bloomberg seemed to finally acknowledge a lot of issues across the ESG complex.

11:43“Tracy” on Twitter, self described as the CEO and Chief Energy and Materials Strategist at Hightower Resource Advisors LLC/Hightower Capital Advisors, noted this which i thought was interesting

And here’s the relevant Bloomberg story:

11:45But that hasn’t stopped money flowing into the sector. CityAm reports this morning that Milltrust Ventures and Earth First Food Ventures are set to launch a $300m smart protein fund tomorrow to back alternative proteins and decarbonise the food industry.

The conspiracy theorists are big on “alternative proteins” because they believe it confirms their fears that the WEF is forcing an “eat ze bugz” agenda on the world.

Here’s a bit from the story:

Over $600m was invested in total in the cultivated meat sector last year, and the alternative protein market, which includes imitation meats made from plants, fungus and meat grown in a lab, is only set to grow as consumers are predicted to move away from eating meat for environmental reasons.

The new fund aims to “disrupt” the food industry by directing climate capital towards scaling up new alternative meat companies. 

This piece of European legislation is also getting some attention. Apparently it approves the use of house cricket, a.k.a acheta domesticus, as a partially defatted powder to be used as a novel food ingredient in the EU.

Anjuli Davies11:46


Apparently fake eggs are all the rage too

with 16 ingredients to make it gloopy

Izabella Kaminska11:47

The problem with all this alternative protein stuff, is that when it comes to the crunch, most people do not want to eat bugs.

Wherever they do eat bugs, they do so usually because they have no better alternatives.

And there is no way of selling Westerners bugs or other vegetable proteins without it being part of some fashionable trend or fad, because by and large everywhere else it is considered a symptom of a society that is becoming poorer rather than richer.

Anjuli Davies11:48

The biggest trend of the century has been the increased consumption of meat protein by China as it has got richer. In the west, we are trying to follow exactly the opposite trend.

Izabella Kaminska11:49

Anyway as Bloomberg notes, it’s been a disaster for most of these companies of late.

 After Beyond went public in 2019—at the time the most successful major initial public offering since the 2008 financial crisis—competitors rushed into the space, followed by a categorywide pandemic surge. Since then the industry has plunged. Supermarket sales of refrigerated plant-based meat plummeted 14% by volume for the 52 weeks ended Dec. 4, according to retail data company IRI. Orders of plant-based burgers at restaurants and other food-service outlets for the 12 months ended in November were down 9% from three years earlier, according to market researcher NPD Group.

Beyond lost sales in almost every channel last quarter. Over the past year it laid off more than 20% of its workforce, lost more than half of its C-suite and halted projects including vegan hot dogs and the next alt-protein frontier of cell-cultured meat, according to people with knowledge of the matter, who asked not to be named discussing private information about the company.

None of the biggest fast-food chains that had announced partnerships with Beyond—KFC, Pizza Hut and, most important, McDonald’s—have put a single permanent item on their US menus. While an index of packaged-food companies on the S&P 500 was up about 4% from a year ago, as of Jan. 17, Beyond’s stock price is now hovering around $16, down about 76% from a year earlier and roughly 93% from its peak in the summer of 2019.

Anjuli Davies11:49

Moral capitalism is all well and good but doesn’t translate always to bottom line

Izabella Kaminska11:50

@david yeah good point.

Anjuli Davies11:50

Talking of the environment, how much can we trust EPC ratings on homes

A recent report by Legal & General group found a 34% uptick in searches for eco-friendly homes last year.

When polled by Legal & General, buyers said they are willing to pay a 10.5% price premium for a low-carbon home, while renters said they are willing to pay a 13% rent premium for more energy-efficient homes.

Eco-friendly homes are weathering the housing market better than period properties, new data has suggested.

Six out of ten (61pc) of estate agents believe energy-efficient homes are holding their value, according to a survey by the Royal Institution of Chartered Surveyors, a trade body.

Izabella Kaminska11:52

Again, you have to be very moral indeed to pay a 10% premium for a home. I am suspicious of this survey. I think more likely the premium is driven by market fears that local councils will penalise non-efficient homes with higher council rates, and so it’s all about a discounted cash flow calculation which accounts for being utterly slammed by the council on your rates.

11:53It’s all a bit depressing because fundamentally it implies even if you 100 per cent own your home, the council can still make it cost prohibitive to run based on the energy efficiency charges.

Anyway, just to close shop. There are three other bits of significant news to note.

Anjuli, how’s your bitcoin portfolio doing?

Anjuli Davies11:55

I do wish I had bought in 12 years ago…

And sold last year…

Izabella Kaminska11:55

Well you may have missed another op again, as bitcoin is on a tear.

This despite Genesis, the Barry Silbert outfit, filing for bankruptcy and all manner of investors being caught out.

Though chances are the upturn is actually connected to news that FTX US might restart operations.

SBF has been arguing for ages that the evil John Ray should not have shuttered the exchange, that it was solvent, and had the means to pay back customers all this time.

Anjuli Davies11:57

And as a counter-cyclical indicator JPMorgan CEO Jamie Dimon has called it worthless

Izabella Kaminska11:57

Yep. That was lol.

The other piece of news was the big scoop from The Times at the weekend that Asda would be merging with EG Group to create a massive combined retain unit with 581 supermarkets and 700 petrol stations.

Anjuli Davies11:58

Don’t you mean a massive debt pile with a supermarket and petrol station attached

Izabella Kaminska11:58


Yeah it’s a £11bn deal.

Both groups are controlled by Mohsin and Zuber Issa, of TDR Capital.

Tell me, why are the most prominent billionaires always brothers?

Anjuli Davies11:59

True, where are the sisters?

Izabella Kaminska11:59

Barclays, Candy, Chandler etc etc

Anjuli Davies12:00

To finish, is everyone switching their lights off tonight?

Izabella Kaminska12:01

Up to a million households in England, Scotland and Wales will be paid to use less electricity on Monday evening as part of a scheme to avoid blackouts.

National Grid said the scheme, which has only been used in tests so far, would run between 17:00 and 18:00 GMT.

Those who have signed up will get discounts on their bills if they do things like delay using their oven or washing machine.

The cold snap has seen energy use rise as more people turn on the heating.

National Grid will decide this afternoon whether it will need to run the scheme again tomorrow.

I have my pre-charged battery packs at the ready.

12:04Worth checking in on natgas prices this week. The big news obviously over Christmas was the collapse of the NBP and Henry Hub, but this cold snap could be testing. And it will be worth watching what the demand from Japan is as a result as well, as it could influence LNG prices.

Three days ago they were still pretty low.

On that bombshell (in memoriam Jeremy Clarkson) that’s it from us today. See you next Monday.

Anjuli Davies12:05

Wrap up warm everyone !

The Daily Blind Spot newsletter

Latest 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 *