Wrap
Today was a risk on day:
- bitcoin up 1.8%,
- Euro up 0.4%,
- global equities all up,
- energy (except NG!) up, Brent by 1.5% to $48.8,
- all government bond yields up (except the EU core),
- curves up (US).
The SPX hit an all-time high. GS gave $TSLA a new price target of $780? Anyway, somewhere far north of where it is now.
Kleptocracies
I listened to (most of) an interview with Tom Burgis of the FT. I have to admit that although I’ve read the FT for decades, I’ve never come across him. He writes about what kleptocrats do with their money. It seems that the answer is that they lend it to people like Donald Trump. Burgis has written before on how Africa has been systematically plundered by dictators who have sold the wealth of their countries to multinationals. I haven’t read these books, although they seem to say the same sort of thing as Misha Glenny’s McMafia and Bill Browder’s Red Notice.
It seems obvious that the wealth of the developing world is being plundered, and is leaking out of the countries where it originates into the West. It also seems obvious that there must be many professionals throughout the world who are assisting in this process for what is probably a modest cut. Certain cases, such as that of ENRC, come to light, which confirm how terrible governance is in these places. Everyone knows that much of Africa is “fantastically corrupt” (in the overheard words of David Cameron). And yet, officially, we continue to do businesses with these countries, turning a blind eye to the lack of democracy (and the systematic dismantling of the institutions that might get democracy started or restarted).
We have many anti-bribery laws. It’s almost impossible to get enough cash out of the bank to buy an old banger. But Putin has stolen a huge part of the total output of his country and yet our government treats him as the legitimate leader of the country. I get it that they have no real option. But to see the oligarchs slug it out over who owns their ill-gotten gains in UK courts seems somewhat surreal.
Part of the problem is that national laws are, well, national. And international laws are weak, because they require a very wide consensus and so run up against the problem that the majority of the countries in the world are run by crooks. And, of course, in country to country dealmaking, it’s really a great deal easier to do business with a crook than with a democracy. When you deal with a dictator like, for instanced, MBS, you get certainty, and a person who is easy to buy off. Buying off a whole population which votes freely is a whole lot harder. So, the leader of the free world much prefers a world which is really a lot less free than the country he happens to run. More than anyone, he understands how maddeningly difficult it is to get support from the electorate. I am sure the CIA and NSA know perfectly well what is going on, and like the situation very well, as, well, kompromat is the most powerful lever of all.
In somewhere like Nigeria, to do any sort of business, it’s necessary to pay the odd bribe. So everyone is complicit, and is guilty, and, if necessary can be arrested and imprisoned. At the will of the top guy. How envious of this must POTUS always be!
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