Spekulatius

it is also my opinion that Russia is the primary suspect. We can't say for sure, but it just fits the pattern with Putin's cat and mouse games and history of indirect threats. KGB tactics. It's also coincidental with the Norway Poland pipeline starting up just a day or so ago. I absolutely think the NATO can easily isolate Kaliningrad, if needed. That's where the Baltic navy command sits that was involved in one way or another if indeed Russia is the culprit.

Bonds get interesting when spreads blow out. So far this has not happened. I like bonds in the BB/BB+ range (just below investment grade) and those that go from BBB- (barely investment grade) to junk often see a lot of selling. I want to see double digit (or close to) interest rates and nice spreads. Then you can get equity like returns with those and often they bounce back a whole lot quicker than stocks. I just need to be comfortable with the underlying business. The last chance were pipeline and MLP stocks in ~2015 for me. COVID-19 also represented an opportunity, but it was so short lived, that I didn't manage to take advantage of it.

Did Geico ever write homeowners? They had an affiliation with Travellers to write homeowners when I was with Geico years ago. Auto could take a decent hit, if there is widespread flooding.

Soon followed by the Campaign 7: Kesselschlacht in Lyman Campaign 8: Orcensturm - defend against the attack of the conscripts horde. 1M russian conscripts against 100k Ukrainians.

@rkbabang great guide. My son is going to college next year, so I forwarded this to him. He has trouble choosing his major, so that one looks as good as anything I have seen so far.

Time for a deep dive for sure.

We do not know for sure. Germany shut down the pipeline (never commissioned it and pledged no to do so) so it's not in operation and will never get into operation. Strictly speaking , this pipeline is a stranded asset because other pipelines could handle the contracted flows, but that's all mute because no gas is flowing. The only reason to sabotage it is to play mind games or as a covert threat. We will find out soon enough when this is investigated. We know that 2 separate pipelines are very very unlikely tot blow up at the same time, so the accident hypothesis out the window already.

A craft beer (from the larger regionals) has been $13.95/12 pack forever (when on sale). They are pretty good. Used to be $12.95 but $1 over a couple of years is not too bad. No beerflation. The small nanobreweries have increased their prices much more. I don't see much inflation with meats, beer and pizza's (frozen or when you assemble them yourself) and what else do you really need? We have seen monster inflation with imports of asian food goods from Hmart or other asian stores. I think my wife mentioned some fish or oyster sauces that went up about 3x. Walmart has the cheapest Sriracha and ran out for month. How the hell did we run out of Sriracha in 2022?

Yes, sabotaging the pipeline to Poland would have made a real economic impact, but may also be considered an act of war against NATO. This pipeline is really a stranded asset so sabotaging it has no real impact, but Putin comes from KGB, he likes to do mindgames, diversions and blackmail etc. (see the drama with the pipeline turbine as an example) If we do get a covert war in the Baltics, having the Swedes and the Fins join the NATO is coming in very handy. The Swedes have a few good submarines and anti submarine ships and a decent air force.

Interesting take from Sky news /Michael Clarke regarding the pipeline incident in the Baltics: Michael’s takes on Ukraine have been excellent so far. I highly recommend listening to his short reports on YouTube.

I have no opinion on the stock which looks expensive to me. it's a rollup in the optical field. UK management teams easily get scared in downturns and don't make much fuzz about diluting shareholders at the bottom. Something to keep in mind with the current carnage.

I personally think we are getting to the point where owning a single family home will be the exception not the rule. the building codes and lack of available land make sure of this. Short of a trend where many move back to the countryside which would reverse hundred of years of urbanization. the result is probably more multi family and apartments down the road. In a way housing demand is a bit flexible too - yes you need a roof over your head, but a family can live with 1000 Sqft of 300 sqft and the amount of living space is a lifestyle choice to some extend. Then there are factors impacting demand like institutional buying of single family homes which I actually think will lead to a higher possibility of a crash down the road, or the AirBnB trend which could run into trouble with city/town regulations.

Clorox bleach prices have doubled since before the epidemic. A can went from $2.5 to ~$5. The only thing in the super market that never went up in price is beer, especially the larger regional craft beers.

I do think the interest rate rises will slow down. maybe 50bps or 25 bps next. The first interest rate rises just started a bit ore than 6 month ago and start to have an impact now. Biggest mistake would be to ease to early. The 70's was the time when inflation was flaring up again and again, partly because the Fed never held course. Better to slay the inflation dragon once and for all and keep the interest rate at a certain level for a while, even if economy weakens. As for inflation, if prices for let's say houses go up by 30% and then go down by 10-15%, is this deflation? I don't think so. Same with energy, food prices, cars, steel and many other goods.

It will take a long time to get a true picture of what really happened and is happening during the war. I think about one generation. Historians works best when everyone involved in an event is already dead. Getting access to US assessments, the Ukrainian side and most importantly material from the Russian side will require a long time. We probably get to see some movies with very subjective views first. Maybe Rambo comes out of retirement and does another tour there.

Looks to me like the GBP and the UK economy is melting down. I follow GHH (Gooch and Housego) simply because I dealt with them in the past with my job and a new some folks working there and the stock has lost half it's value this year and then there are the GBP losses on top. The stock looked quite overvalued and I can't make a valuation case even now, but that performance is really something to behold.

No question that war only makes sense with a valid objective. otherwise you can win all the battles and lose the war, just like what happened in Vietnam. I think in the end some wars are worth fighting and getting involved in and others are not, WW1 and WW2 was worthwhile for the US to get involved in, Korea as well, Vietnam was not, Irak (imo was not) and Afghanistan highly questionable. I think Ukraine is worth getting involved in because it affects security in a very broad sense for Allies and the US eventually and there is a ruthless dictator on the prowl. Furthermore, we do not have to put boots on the ground, we just have to supplies the means to do so to a very capable and hard fighting nation (the Ukraine), which also makes the situation unlike Vietnam. Now there are other wars like Birma / Myanmar (military junta), Armenia vs Azerbaijan, Syria, Houthi , Kashmir and what not. in each of these cases, it is not clear to me that the US or Nato could help and what the objective should be. So in my opinion saying - look there are many wars going on why do we something here and not there - is a strawmans argument that doesn't hold water. By the way, this perfectly holds true for Taiwan. US should absolutely support Taiwan's independence, because there is a clear objective, it is doable, there is a will from the population to stay independent and fight for it and it also serves our interest, as well as it seems the right thing to do from a western moral POV. Some may not agree here, but that's how I see it.

Luckily, we can have either inflation or deflation, but we can't have both at the same time. One thing that people don't realize that as far as economic growth was concerned in the US and Europe, the 70's were actually better than the last decade. the issue was that the growth was extremely uneven and short burst of growth were followed by sharp recessions. just look at the economic indicators during 1978-1981 if you want to have some fun. You literally had 180deg turns in the economy several times back to back during this short time period, basically a wild roller coaster ride.

@Castanza, I predict that the Russian conscripts are getting massacred if they indeed hit the front line. They Motivation and equipment is abysmal. If they indeed get used on the front line, I think we are seeing 30% casualty rates if not higher. We do not know how many have been drafted burnside clear that it’s way more than 300k, probably between 500k and 1M, so you can do the math here how many dead and severely wounded we will see. The Russian army has already been constraint by logistics before, so now with many mor soldiers , they will be even slower moving. So, I think the Ukraine could be able to take huge amounts of prisoners here if they can most an offensive and encircle some of those static troop concentrations. If Russia were smart, they would use these troops just to improve logistics and as a backup but then again, it wouldn’t make all that much of a different. My bet is they are trying to do a Volkssturm here and that will end up with a disaster. Another interesting fact - apparently some conscripts have already reached the Ukraine. You can do the math here, these guys can’t have 2 weeks of training yet, possible nothing. Also, somewhat independent of this, the Russian economy will take a huge hit from this mobilization. Expect double digit declines in economic activity just from that, then add sanctions, lower energy prices, no money from NG exports to Europe, lower weapon exports. The list goes on and on.

Since we keep digging into this BNB rabbit hole, it is interesting to note that BNB was a very boring dividend stock for most of its history dating back decades. They paid a slowly growing dividend until 2008. In 2008 the GFC happened and BNB on behalf of the government (I presume) let their balance sheet mushroom, I guess that was sort of a QE. I am not really sure why they did that as the European central bank does monetary policy, but ma be these smaller satellite banks did thismon top of the ECB for local needs, although they had a a lot of USD assets at some point. Initially this was great and interest income mushroomed (the BNB dividend gets paid a share of the fixed income form their bond portfolio ) and so disintegrated dividend in 2009/10. However then , the income started to drop (lower interest rates) over the year and the stock price reflects that. Nw we got huge MTM losses in fixed income apparently that prevents BNB from paying out dividend but I think eventually, the higher interest rate (should they persist ) should lead to higher interest income and hence dividends eventually. That assumes that the left tail (BNB goes broke or more likely gets taken under) does not happen. So with a longer perspective and knowledge of the local idiosyncrasies (which I don’t have) this could be an interesting Investment eventually. I also think it’s possible that these thinly traded shares gets washed out totally before that in some sort of liquidity event. So, it’s an interesting one to watch.

The USD is quite something and is quite a deflationary force, if you live in the US (or have assets denominated in USD) going forward. look for example at the Price of VISA stock, one time quoted in Euro (German stock exchange) and one time quoted in the US (in USD - blue line). Looks like a nothingburger in Euros and a disaster in USD. Visa does ~50% of their revenues in non-US currencies for reference. Same with some manufacturing. The company I work for has companies and assets in Europe (mostly Germany) and the US (where I work) and there some overlap to what we are doing. Well their cost structure just went down almost 20% by means of the exchange rate. Now it is true that energy costs went up, but this is light manufacturing , so energy is maybe a few percent of the BOM. They still are way cheaper now than they were 12 month ago. I think some people that talk about near- shoring are forgetting that it does not work from cost POV with the exchange rate. maybe it works for some energy intensive goods like basic chemicals, but light manufacturing has just gotten one hell of competitive boost in Europe, if they work in export business in the dollar space. Besides that, we don’t have the labor pool anyways in the US. I think the exchange rate angle is underestimated, because the average person in the US doesn’t tend to deal much with them. I think however that soon, a few EM‘s start to blow a gasket (Turkey, Pakistan etc) and that will lead to demand destruction for commodities (which are quoted in USD). I also think that there is a strong possibility that China needs to drop the USD- Yuan peg and let the Yuan slide because they might have trouble keeping their currency tied to the USD, because their economy is weak and they export anlogt into other EM‘s or Europe with weaker currencies. For this reason, I don’t think interest rates in the US may not rise that much. They may have to rise more in Europe but that will only happen after the winter. GBP looks screwed, they are getting hit from multiples angles and @SharperDingaan house in London has lost and will lose a lot of value in USD (trigger alert).

@Viking thx for the color. I hold just a bit of PBR and a tiny slice of SU (so far) Holding them all in IRA's and would prefer dividends. CNQ might be a good bet here. They have been doing much better than CVS or SU over time. CVE had some ill timing and SU operational issues. I do know SU best as I followed it for years. I held Petro Canada and Canadian Oil sands back in the day and they both ended up there.

No surprise here. Russian gas to Europe is done for the foreseeable time. Everyone who thought differently hasn't paid attention. A new Iron curtain is what we have in Europe. Gladly it was pushed towards the East, compared to the cold war 1.0.

Energy securities are for trading not owning. I do agree they are starting to look cheap here.