The Pained Trader: moral sell

The Pained Trader discourses on geopolitics

  • By The Pained Trader
  • 08 Mar 2018
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Have you ever eaten in Zizzi? I know some people who ate there and three days later were still in hospital fighting for their lives.

Because nomenclature is so important to me, I’d never dine in an establishment named after a French euphemism for penis but it looks like its marketing department is going to have bigger issues to contend with in coming weeks. 

Perhaps they should consult with Itsu which, a decade back, developed a sudden if unmerited association with radioactive sushi, after a visit from Russian agents.

That the nosh served up in this modest chain of Italian eateries is potentially fatal, is what Vlad "The I’m Paler" Putin would have you believe but one would need a very low threshold for credulity to fall for that old chestnut. 

At university, I would regularly chow down on things which were called kebabs from something known as “Martin’s Death Van” which always had a deleterious impact on one’s short-term physical wellbeing but despite the moniker, I don’t recall anyone actually dying from it.

No, the gullibility required to believe Russian denials of culpability in the attempted assassination of a former spy is of Trumpian dimensions. “It’s not a deadly nerve gas, Donald. It’s just Mace because I thought you were going to grab my pussy.” 

One can imagine the US president, with his organs failing and his eyes streaming from the virulent poison, asking Vlad, who has the deadly spray can in his hand, if he did it.

“No, I did not," would come the reply. "Absolutely not.”

If a Russian offers you a cup of tea in which a lump of yellow sugar is glowing suspiciously, you should thank him and decline. 

Similarly, if five Russian, drop-dead gorgeous belles-de-nuit knock on your hotel room door, desperate to use the toilet, you should hang up the sign saying "Do Not Disturb" and let them in.

The first casualty of war, especially this new Cold War looming, is truth but the second victim is often the blameless, stockbroking community reliant on that geography for commission and now finding its investible universe suddenly uninvestible. Again. 

I’ve lost count of every crisis through which I have soldiered, or brokered, on, blithely dismissing the inescapable truth that I was promoting financial assets in one of the world’s most corrupt and odious regimes. 

I’ve been broking this market since the summer of 1998 and from the first week, when it defaulted on me (I took it very personally), I have wrestled with the ethical dilemma of presenting the investment case for a sovereign whose congenital traits are cheating and malevolence.

Good buy, Lenin!

Since emerging markets assets bottomed in January 2016, Russia has more than doubled and hugely outperformed its peers, mostly because the oil price doubled and hugely outperformed its peers and everyone who’d sold it was obliged to buy it back.

Russian stock valuations are among the lowest in the world. The country's assets yield more dividends than almost anywhere else and offer extremely high real interest rates. 

However, I find myself in the invidious position of having to have make dual recommendations on shares along the lines of, “This thing is screamingly cheap, could easily treble and using conventional punting parameters is a big, fat buy but at the same time it is a moral sell.” 

Everyone knows you can’t make a living in the City taking an altruistic approach but how to pretend what you are peddling is just the same as what everyone else is peddling, except more evil? 

How to qualify a call suggesting a fund manager should load up on some Russian bonds or buy a chunk of Gazprom shares by pointing out the caveat emptor that we could be at war with Russia before the bargain has settled?

Warren Buffett, that rather irritating dispenser of folksy, homespun wisdom was fond of saying that to make money all you needed to do was “Go to Wall Street and hold your nose” but I’ve been dealing with Russia and inhaling its sulphurous stench for two decades and have yet to make any.

It would require naivety of infinite elasticity to imagine that there is anything which can be done to retaliate against this congenital malevolence other than cancelling the World Cup altogether. 

England’s threat to boycott the tournament is ineffective because no sooner than our team has landed wherever it takes place then they are preparing to take off again anyway. I can guarantee as I type that the UK government is desperately racking its collective brain to match the promise of a “robust and appropriate response” and irrespective of what they come up with, I can guarantee Putin will shrug his shoulders and give it the 'Am I even bovvered though?' thousand-yard stare.

Putin’s current standing in the polls a week before Russia goes to the ballot box to reselect him is 70%. That other major deterrent to investing in global markets, Donald Trump, has a disapproval rating of about the same proportions (“Make America Vote Again” is what I say) and the trade wars which threatened to break out this week and cause more damage than the Anglo-Russian variety is a direct result of that voter opprobrium.

In tragedy, the hero is always brought down by his fatal flaw. In the tragi-comedy of Trump, his seven deadly sins compete with a low cognitive ability for the honour of the fault which ultimately brings him down.

While we have always thought it may be avarice, wrath or envy which would be Trump's undoing, it could now be lust as the front-runner with the Stormy Daniels affair threatening to spiral out of his control. 

The markets seemed more upset about Gary Cohn's exit this week but the tussle on tariffs probably provided a welcome pretext for the resignation he has sought to tender for months and I don't think this has the capacity to end his administration in the way a showgirl scandal might.

Trump should have listened to Alan Clark's wife: "If you bed someone of below-the-stairs class, they will go to the papers."

For Trump, Putin —“strong leader, smart guy, tough cookie, says nice things about me” — is a paradigm of good governance and watching military parades in aviator shades like a mafia don is everything he aspires to.

Putin may have heartsease while Trump is up to his neck in sleaze but my recommendation is a strong moral sell on both.

  • By The Pained Trader
  • 08 Mar 2018

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 345,651.05 1349 8.09%
2 JPMorgan 341,748.87 1469 8.00%
3 Bank of America Merrill Lynch 306,869.45 1064 7.18%
4 Barclays 258,170.48 974 6.04%
5 Goldman Sachs 227,691.73 773 5.33%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 BNP Paribas 48,038.21 201 6.58%
2 JPMorgan 46,115.73 103 6.31%
3 UniCredit 39,566.35 173 5.42%
4 Credit Agricole CIB 37,118.63 184 5.08%
5 SG Corporate & Investment Banking 36,637.33 141 5.02%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 JPMorgan 14,111.63 62 8.97%
2 Goldman Sachs 13,469.15 66 8.56%
3 Citi 9,971.36 58 6.34%
4 Morgan Stanley 8,572.10 54 5.45%
5 UBS 8,391.04 36 5.33%