Media Worth Consuming – October 2022

Jonathan Rochford

Narrow Road Capital

Top 6 Articles

High frequency indicators across employment and consumer spending still point to the US economy being strong with inflation expected to remain high.

Over 1,000 US listed stocks are down at least 80% from their recent highs.

Liz Truss got the politics wrong but the economics were largely right.

Ten meaningless phrases you can use to bluff your way through conversations about the current financial climate.

The finalists in the Comedy Wildlife Photos of the Year competition.


Credit Suisse may need to raise $8-9 billion in equity in the next two years to cover restructuring costs and lending losses. Elon Musk has taken control of twitter with the CEO, CFO, General Counsel and Chief Censor all sacked. Matt Levine’s very long and detailed history of cryptocurrencies. Crypto lender Mango lost $100 million after fraudsters used futures trades to syphon off all its funds.

The use of centralised clearinghouses by UK pension funds meant they needed to post cash collateral at a time of stress, leading to forced asset sales including their CLO holdings. An asset consultant argues that American institutional investors are gaming their benchmarks to make their sub-par performance look better.

Debt investors are willingly giving up their sacred rights. How KKR used poorly structured documents to dud lenders to its portfolio company Envision. Italy is flirting with a debt crisis. After belting the British government, bond vigilantes could target the Japanese government. The Bank of England’s backstop for Gilts has been barely used. UK property funds are blocking redemptions again.

Politics & culture

Who’s in and who’s out in China’s leadership. The former leader of the Chinese Communist Party was ushered from his seat and lead out of the auditorium at the national congress, apparently because he was “not feeling well”. Satellite data points to China’s reported GDP being substantially overstated. China delayed the release of economic data during the Communist Party Congress. How the Chinese government turns a blind eye to money laundering involving their citizens and Mexican drug cartels. Workers at the Chinese Consulate in London grabbed a man protesting outside its gates and dragged him into the Consulate grounds for a beating.

Wikipedia is keeping a list of Russian Oligarchs that died in mysterious circumstances. The war with Ukraine has made Russia’s demographic problems much worse. An American citizen has been sentenced to 16 years jail by a Saudi Arabian court for negative tweets about government policies. A North Carolina man was thrown in prison for 24 hours for refusing to wear a mask in court when he turned up for jury duty. Tulsi Gabbard has quit the Democrat Party saying it is controlled by “an elitist cabal of warmongers who are driven by cowardly wokeness, who divide us by racializing every issue and stoking anti-white racism”.

Economics & work

The Fed has rapidly fallen into negative equity. Central banks are playing down the impact of being in a negative equity position after ultra-low interest rates and QE have reversed. If central banks have switched to quantitative tightening but governments keep running deficits, who will buy all the government bonds? Given high debt levels and profligate governments, we should expect ongoing financial repression. Just like today, in the 1970’s the US Government blamed everyone but themselves for inflation when cuts to both government spending and money printing were required.

Markets aren’t perfect, but imperfect markets typically produce better outcomes than governments. If right of centre parties reject free market policies, how will countries increase productivity and economic growth? Countries that cut defence spending grow faster than those that don’t. Governments experiments with MMT can be dated back to the Song Dynasty in China, around 1,000 years ago.

Greece’s decade long bailout shows no signs of austerity, rather government revenues have increased whilst spending has been steady. Belarus, Venezuela and Argentina top the list for the worst taxation systems in the world. A UN agency tells central banks to stop raising interest rates, effectively arguing for high inflation to become embedded. Income inequality peaked in the US in 2012 and has declined slightly since then.

Ben Bernanke shared the Sveriges Riksbank economics prize for his research on how bank failures exacerbate financial crises, despite his actions that have suppressed productivity and boosted inflation and are likely to end up creating their own crisis. Ben Bernanke’s theoretical knowledge of monetary policy left him blind to the reality of dodgy lending that caused the Financial Crisis. Why the Sveriges Riksbank economics prize shouldn’t exist. An argument for Thomas Sowell to win the economics prize.


Germany is planning to dismantle a wind farm to allow a coal mine to expand. A record breaking computer chip can transfer data over one millions times faster than a very fast internet connection. After Covid expanded working from home, employees swapped commuting time for more leisure activities and sleep. Two fishermen have been charged with grand theft after being caught stuffing weights inside fish to win a competition. The “world’s fattest parrot” has been excluded from New Zealand’s bird of the year competition over concerns its popularity could divert the spotlight from more ordinary birds. 

This article has been prepared for educational purposes and is in no way meant to be a substitute for professional and tailored financial advice. It contains information derived and sourced from a broad list of third parties and has been prepared on the basis that this third party information is accurate. This article expresses the views of the author at a point in time, and such views may change in the future with no obligation on Narrow Road Capital or the author to publicly update these views. Narrow Road Capital advises on and invests in a wide range of securities, including securities linked to the performance of various companies and financial institutions.

Jonathan Rochford
Portfolio Manager
Narrow Road Capital

Narrow Road Capital is a credit manager with a track record of higher returns and lower fees on Australian credit investments. Clients include institutions, not for profits and family offices.

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