The Buildings Are Leaving The Rats

Posted on Mar 11, 2022. by NTI

We are being frowned at from across our sitting rooms all over the UK again. First it was Brexit; lots of glowers across the airwaves as we were dealt blow-by-blow explanations of how life would end if we did; and if we didn't. Almost immediately after that the BBC did a little jig as Covid took over and we were glared at from our TV screens as certain death and an end to life as we know it celebration was played out in high dependance units and care homes, the whoosh of ventilators in the background.

No sooner had Omicron set in and started to (annoyingly) bring those dreaded daily numbers down than Putin steps up (otherwise we could barely see him) and declares war on the world. We are now loured at from across the room against a backdrop of a city we do not only have to learn to pronounce properly, but our chicken filled with garlic will never be the same.

Once again we are the puppets of broadcasters and the news wires. Once again they are tugging hard at our emotional strings.

We are faced with an unusual situation where the buildings are leaving the rats. Hotel chains and pharmaceutical companies joining Mickey Mouse in the desertion of the Russian population who can only internalise their thoughts and feelings about what is being forced upon them. The next great Liquidation job could be Russia itself, if Roman can wriggle his way out of a tight spot.

GlaxoSmithKline was among the first big corporates to publicly condemn the ... whatever President Xi of China is now allowing himself to call the rape of Ukraine, and now they are taking “a precautionary approach to stop ... any direct involvement and support to the Russian government and military”. It is continuing to supply medicines in Russia, however, as “everyone has the right to access healthcare”.

"And you have the right to charge for it, right?"


If we miss it at six, we can catch it at seven, then again at nine and ten, but we will certainly know by now that Russia is a leading exporter of raw materials, and sanctions are putting those supplies in doubt and pushing up prices. The situation has been exacerbated by moves by western buyers to shun Russian commodities. Extreme prices can trigger “margin calls” for traders to put up more cash as collateral to back up their positions and cover potential losses. Fuel hit £2.00 a litre at a petrol station in Chelsea this week (but, to be fair, there was a free Mason Mount with every visit to the pumps) and Andy heard today that the gas and electric at his house will be a grand more expensive this year than last.

Last Tuesday, the London Metal Exchange took the rare step of suspending nickel trading after the price of the metal briefly doubled to more than $100,000 a tonne helping us to come to terms that sanctions on the world’s single-largest commodity producer will change all of our lives (although not in the same way as carrying your sobbing granny over a rickety wooden bridge in freezing temperatures to a place where safety may only briefly reside).

Someone called Zoltan Pozsar, an investment strategist at Credit Suisse who is having to more frequently explain the origins of his surname, told clients this week that “sanctions-driven commodity price moves threaten financial stability in the West”.

“Is there enough collateral for margin? Is there enough credit for margin? What happens to commodities futures exchanges if players fail?” he asked.

"What?" we said.

"Something to with 'hedging'," he replied as no missiles whistled overhead.

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