Have We Hit The Top?

[Xerxes]

you can either be long against 5,000 years of human history that involve rape, pillage, war, famine but also brought with it progress, peace, innovation, cures … or be short against it … betting that human nature is different that what it historically shown itself to be. 

 

I said this before in a different thread. We (most of us) are lucky (geographically) be living in North America with two vast oceans protecting us. But it does mean, however, that we do tend to do the espresso-sipping “ivory tower” thing. 

[DooDiligence]

12 hours ago, Xerxes said:

you can either be long against 5,000 years of human history that involve rape, pillage, war, famine but also brought with it progress, peace, innovation, cures … or be short against it … betting that human nature is different that what it historically shown itself to be. 

 

I said this before in a different thread. We (most of us) are lucky (geographically) be living in North America with two vast oceans protecting us. But it does mean, however, that we do tend to do the espresso-sipping “ivory tower” thing. 

 

ethnocentrism in a 24 hour news cycle, go figure 

 

personally, I think Putin got exactly what he wanted (without a shot being fired), when westerners left the country

 

he's an expert fiddle player

[Xerxes]

37 minutes ago, cubsfan said:

Like one of the smart guys here said - as long as Putin can get his $100 Oil, he'll be happy. 

i actually disagree with that.
 

Russian oil industry cost structure is ruble based, therefore there is an upper limit to that sweet spot before their cost starts to go up, re-start to compress their margins. Inversely the same helps them to buffer their margin in a downturn. I.e their cost goes down as the value of ruble depreciates with a falling oil price. 
 

Saudi Arabia doesn’t have that since their currency is dollar-pegged. So they really get hurt in a downturn but benefit immensely in an upside as their cost stays pinned against the dollar.   
 

lastly, big oil producers (contrary to popular belief) prefer fair price instead of high price, as “demand destruction” and “alternatives” plays a role in their calculus.

 

smaller marginal oil producers like high prices as their “vision” is as short term as their capacity to produce. 

[SharperDingaan]

Growing cross border shelling has gone on for 2-days now, and the news has been hidden behind the Olympics. Invasion delayed because the big buyer of Russian gas doesn't want an upstaging of the big event they are hosting - invade while the games are on, and the deal is off? Ukrainian officials talking 'soothingly' with the assistance of a AK-47 at their head?

 

Tanks cross the border, for whatever reason, and WTI very quickly goes > $100. And if they don't take Kyiv by nightfall on day-1, those tanks die - by the hundreds.

 

SD

 

Edited February 20, 2022 by SharperDingaan

[Xerxes]

2 hours ago, SharperDingaan said:

Growing cross border shelling has gone on for 2-days now, and the news has been hidden behind the Olympics. Invasion delayed because the big buyer of Russian doesn't want an upstaging of the big event they are hosting - invade while the games are on, and the deal is off? Ukrainian officials talking 'soothingly' with the assistance of a AK-47 at their head?

 

Tanks cross the border, for whatever reason, and WTI very quickly goes > $100. And if they don't take Kyiv by nightfall on day-1, those tanks die - by the hundreds.

 

SD

 

There is a narrow window before the spring thaw. But really who knows. Even foreign minister Lavrov doesn’t know what will be Putin’ final call

[Gregmal]

There has been obscene amounts of money, with virtually no risk, made from paying attention to the political angles. Yet, there’s still people willfully ignoring them or not wanting to hear it. Just in the last year we had

 

inflation-No!!! They told me it was transitory! Who? Lol the idiots?
 

Energy-we need to save the world! Or…no you can’t just stop drilling without creating an energy crisis.

 

housing- people really don’t want to leave high tax, shit weather, COVID lockdown places for great weather, low/no taxes, pro business and no authoritarian government? Please

 

covid- it’s going to be here forever in some regimes and it’s been gone since July 2020 in others. Take your pick 

 

 

right now it’s a pretty ugly outlook for the markets IMO because the party in power is retarded bordering on deliberately incompetent and the party holding all the cards has every incentive to let things get ugly until November. But hey, position however you want. 

[Spekulatius]

Market is doing just fine and Finnland won the Gold Metal in hockey against the Russians.

[Paarslaars]

12 hours ago, Gregmal said:

the party in power is retarded bordering on deliberately incompetent and the party holding all the cards has every incentive to let things get ugly until November.

Same people pulling the strings behind both parties though.

[Xerxes]

So much talk of Ukraine impact on the market here in this thread, yet no one is talking about its potential impact on wheat  

[Spekulatius]

9 minutes ago, Xerxes said:

So much talk of Ukraine impact on the market here in this thread, yet no one is talking about its potential impact on wheat  

Once Russia attacks the Ukraine, I think stocks are going to rally especially if the Fed uses it as an excuse to not raise interest rates after all. But who the hell knows.

[Castanza]

6 minutes ago, Spekulatius said:

Once Russia attacks the Ukraine, I think stocks are going to rally especially if the Fed uses it as an excuse to not raise interest rates after all. But who the hell knows.

Up is down and down is up! Who would have though a global pandemic would send stocks and indices to record highs. Wouldn't be surprised if you're right on this.

[Xerxes]

I meant “wheat” the commodity. not financial markets. 

A good quarter of global wheat production is from Ukraine and Russia. 

[Castanza]

18 minutes ago, Xerxes said:

So much talk of Ukraine impact on the market here in this thread, yet no one is talking about its potential impact on wheat  

Can't find the post but I know someone a few pages back mentioned wheat and fertilizer as a play. Looking at all the wheat producers...they are all trading at 52 week highs (some all time highs). 

[Spekulatius]

13 minutes ago, Xerxes said:

I meant “wheat” the commodity. not financial markets. 

A good quarter of global wheat production is from Ukraine and Russia. 

And both are going away, if Russia were to invade Ukraine?

[Xerxes]

My uneducated guess is the inflationary pressure that we feel in North America & Europe (because we cannot get our gadgets fast enough) will be felt more globally at the most basic level. Egypt I think (for instance) is one of the largest importer of wheat. As well as so many other countries. 
 

as far as the stock market (besides the “news” impact when it happens). Who knows … this should be tailwind for defence  industry but headwinds for others

 

I tend to see war and pandemic in having the same impact (I.e need to build inventory, ration, duplicating infrastructure thus inflationary)

Edited February 21, 2022 by Xerxes

[Spekulatius]

4 minutes ago, Xerxes said:

My uneducated guess is the inflationary pressure that we feel in North America & Europe (because we cannot get our gadgets fast enough) will be felt more globally at the most basic level. Egypt I think (for instance) is one of the largest importer of wheat. As well as so many other countries. 
 

as far as the stock market (besides the “news” impact when it happens). Who knows … this should be tailwind for defence  industry but headwinds for others

 

I tend to see war and pandemic in having the same impact (I.e need to build inventory, ration, duplicating infrastructure thus inflationary)

I think Ukraine's wheat production could be impacted if the war lasts a long time (unlikely), but Russia's production won't be.

 

On another note, seems like people are trading futures in Pyjamas today, since the main gambling parlor is closed today . Futures went from -30 last night to ~ +25 later that evening now back to ~-30. Someone is having fun, I guess.

 

Playing the USD.RUB currency pair is even more fun. It was a bit negative last night and up 2.7% today.

Edited February 21, 2022 by Spekulatius

[JAK]

Sadly, I think Barley prices (in Europe at least), are linked to wheat prices. Malting barley futures for 2022 were already higher than in 2021 heading into 2022 due to elevated fertiliser / energy prices etc. And European brewers are already talking about raising prices. Issues with Ukraine / Russia may just fan the flames. At least that's what I'm going to tell my wife when I place my next bulk beer order. 

[boilermaker75]

1 hour ago, Spekulatius said:

Once Russia attacks the Ukraine, I think stocks are going to rally especially if the Fed uses it as an excuse to not raise interest rates after all. But who the hell knows.

 

"Buy when there's blood in the streets, even if the blood is your own," Baron Rothschild.

[Gregmal]

Further kinda putting the absurdity into context, look at the map, and then look at the areas in question. Outside of 1) areas basically being pro Russian and a continuation of Russia, you ask 2) how does this concern the US? 

 

I mean these regions are more Russian than Alaska or Hawaii are a US territory but who’s counting?
 

But hey at least now we have an excuse for the high energy prices! Damn darn commies!

 

[muscleman]

10 hours ago, boilermaker75 said:

 

"Buy when there's blood in the streets, even if the blood is your own," Baron Rothschild.

 

I do think timing matters. "Buy when there is blood" is still far from now. This is more like April 2000. 2 years from the bottom.

[gary17]

it's very difficult to look at macros and i've done well in the past ignoring-

but this time it does feel like all the headwinds are here, inflation / fed raising rates / conflict with Russia, etc.  China property market is in the back drop - could be a perfect storm for stock to do poorly for a while.  my 2 cents.

[muscleman]

3 hours ago, gary17 said:

it's very difficult to look at macros and i've done well in the past ignoring-

but this time it does feel like all the headwinds are here, inflation / fed raising rates / conflict with Russia, etc.  China property market is in the back drop - could be a perfect storm for stock to do poorly for a while.  my 2 cents.

 

inflation / fed raising rates have been pretty obvious since 6 months ago. It takes a while to build the top before the quick descent starts. We are in April 2000. Still two more years of bearish market

[gary17]

7 hours ago, muscleman said:

 

inflation / fed raising rates have been pretty obvious since 6 months ago. It takes a while to build the top before the quick descent starts. We are in April 2000. Still two more years of bearish market

 

It's difficult to be smart during this time i think.   my thinking is during periods of inflation, we want to own assets but stock market would under perform, which suggests perhaps holding cash is better-- which is counter to what one should do in an inflationary period.

[Xerxes]

 

[Xerxes]

Sad things is Ukraine was a nuclear armed nation in the 90s. Nuclear proliferation ain’t good for the world but it does serve you (an individual nation) well when confronting a bully superpower or regional power.