Have We Hit The Top?

[Spekulatius]

Oil stonks down, tech stonks up. Banks down big time, because the fed has to support war torn economies, so no interest rate rises. Back to normal.

 

Those are my cliffs notes for today.

[gary17]

3 hours ago, Spekulatius said:

Oil stonks down, tech stonks up. Banks down big time, because the fed has to support war torn economies, so no interest rate rises. Back to normal.

 

Those are my cliffs notes for today.

 

but i thought war creates inflation

 

and inflation is why rates are rising ?

 

i can't keep up with the market - and it's the Feds setting the rates, not the market !

[Simba]

Why do I feel that was the near-term / tradeable bottom for the next several weeks?

 

Bottom ticked the opening bell, and sold within 15 minutes. Wish I would of held until 400PM.

 

Shucks. Sometimes risk management system can be so tight that you do nothing, LOL. That's what happens when you get stopped out like 3-4x you just get fed up and do nothing., which is why I think today was the tradeable bottom ... sentiment is near capitulation (similar to March 2020 - hell I think it's even worse as retail traders have been absolutely slaughtered owning 50x P/S) 

 

I say tradable, because this inflation / interest rate thing is going to haunt the market for the next 3-12 months... I personally would love a double bottom, or even a crack below 4000 on the S&P (3970) as a giant headfake, before we rally to ATH again .. wishful thinking if March 2020 is any direction of how markets function, bottoms happen really really fast.. like TODAY fast.

 

QQQ +7% off daily lows

ARKK +14% off daily lows

SPY +4% off daily lows

 

 

 

Edited February 25, 2022 by Simba

[Xerxes]

3 hours ago, Simba said:

bottom, or even a crack below 4000 on the S&P (3970) as a giant headfake, before we rally to ATH again .. wishful thinking if March 2020 is any direction of how markets function, bottoms happen really really fast.. like TODAY fast.

I personally felt a great panic in the bottom of March 2020. Perhaps compounded by the unknown nature of the virus or near decapitation of my industry. 
 

Haven’t felt anything like it since. 
 

but i imagine if I was in Ukraine in 2022 and was an investor in the local stock exchange I would feel that 2020 like panic. 
 

being an ocean apart helps.
 

Folks here are buying back Sberbank. I reckon that folks here are having an “easier time” to make a rational case to buy it (even with its foreign holding risk) than a local Russian buying it off the Moscow exchange (without the foreign holding risk)

[muscleman]

19 hours ago, Xerxes said:

I personally felt a great panic in the bottom of March 2020. Perhaps compounded by the unknown nature of the virus or near decapitation of my industry. 
 

Haven’t felt anything like it since. 
 

but i imagine if I was in Ukraine in 2022 and was an investor in the local stock exchange I would feel that 2020 like panic. 
 

being an ocean apart helps.
 

Folks here are buying back Sberbank. I reckon that folks here are having an “easier time” to make a rational case to buy it (even with its foreign holding risk) than a local Russian buying it off the Moscow exchange (without the foreign holding risk)

 

buying a bank is extremely tricky, not to mention a bank in Russia, where equity financing is viewed as free capital.

March 2020 is quite different from now. In March 2020 we have Fed lowering rates and doing QE on a historical scale. Right now we have FED wrapping up QE, inflation, and raising rates. I think the 12 year bull market has ended in November 2021. We are in a period when equity returns will be very low for multiple years.

[SharperDingaan]

The reality is that the Ukraine will be invaded .... however Russia then needs to keep it. The political solution is another Ukrainian state declaring itself independent, recognition by the west, and a provisional acceptance into NATO subject to missile placement in that state. Sanctions remain, Putin goes ballistic, and the Ukraine remains a no-mans land until both sides pack up and go home. 

 

Mercenaries exist for very good reasons, and are widely used by all. Sever the Nord Stream pipelines, such that they can't pump for a while, and can't be easily repaired under sanctions. Prices go up, Germany temporarily gets its gas from the ME/US instead, and everybody but Russia makes out like bandits. Call the bluff.

 

SD  

[hasilp89]

5 hours ago, SharperDingaan said:

Germany temporarily gets its gas from the ME/US instead, and everybody but Russia makes out like bandits. Call the bluff.

Is this a realistic possibility? I don’t know the numbers but is there a coordinated way to just replace Russian exports of O&G entirely? Can pussyfoot around with all these other sanctions but seems like this would put Russia in a difficult spot?

 

edit: ie what Lindsey graham has been saying. https://www.foxbusiness.com/politics/lindsey-graham-destroy-ruble-crush-russian-oil-gas-sector-putin-aggression.amp not getting political just want to know whether it is realistic or practical. Ie can US ship lng to Germany? How hard is it in the real world for a country that currently imports 500k b/d from Russia to switch.

 

 

Edited February 27, 2022 by hasilp89

[SharperDingaan]

11 hours ago, hasilp89 said:

Is this a realistic possibility? I don’t know the numbers but is there a coordinated way to just replace Russian exports of O&G entirely? Can pussyfoot around with all these other sanctions but seems like this would put Russia in a difficult spot?

 

edit: ie what Lindsey graham has been saying. https://www.foxbusiness.com/politics/lindsey-graham-destroy-ruble-crush-russian-oil-gas-sector-putin-aggression.amp not getting political just want to know whether it is realistic or practical. Ie can US ship lng to Germany? How hard is it in the real world for a country that currently imports 500k b/d from Russia to switch.

 

 

 

There is more than enough existing LNG capacity in Qatar and Oman. Tankers only need to go to/from the Netherlands &/or southern European facilities from which the LNG/gas can be subsequently piped - short trips. Tankers can also go to/from US Gulf & East Coast facilities direct to Rotterdam, at the already tested roughly 12/week - longer trips. There is a reason why the  Netherlands o/g loading facilities were recently cyber attacked.

 

https://www.spglobal.com/platts/en/market-insights/latest-news/energy-transition/091521-global-gas-power-sector-to-drive-middle-east-gas-demand-as-hydrogen-stays-small

https://www.cpomagazine.com/cyber-security/fuel-troubles-continue-in-europe-as-oil-terminals-in-netherlands-and-belgium-suffer-cyber-attacks-unclear-if-breaches-are-coordinated/

 

Physically sever the Nord Stream pipelines, and you cant bribe to let the gas through 

There will be disruption, but the Russian gas will ultimately be permanently displaced - hence the new deal with China.

 

The smart folks would also ban off-loading tankers from Russia, and physically sever the loading facilities on the Northern Sea Route to the Pacific. Russian would be forced to sell to China at a both a discount and a fearsome transportation differential - welcome to the egress bitch!. The Chinese in turn selling their now 'surplus' imports into Europe at elevated prices 

 https://en.wikipedia.org/wiki/Northern_Sea_Route

 

The banking stuff is important, but to really make it bite - states need to coordinate seizure of toys/assets/accounts, liquidate them, and keep the proceeds. Even in a Canada, protestor truck rigs are  seized and sold, with proceeds going to the City of Ottawa to pay for damages 

 

Suddenly make lots of rich people poor, and they will be quick to assign blame.

With mercenaries everywhere you go, Moscow becomes a very dangerous place.

 

SD

Edited February 27, 2022 by SharperDingaan

[Spekulatius]

17 hours ago, SharperDingaan said:

The reality is that the Ukraine will be invaded .... however Russia then needs to keep it. The political solution is another Ukrainian state declaring itself independent, recognition by the west, and a provisional acceptance into NATO subject to missile placement in that state. Sanctions remain, Putin goes ballistic, and the Ukraine remains a no-mans land until both sides pack up and go home. 

 

Mercenaries exist for very good reasons, and are widely used by all. Sever the Nord Stream pipelines, such that they can't pump for a while, and can't be easily repaired under sanctions. Prices go up, Germany temporarily gets its gas from the ME/US instead, and everybody but Russia makes out like bandits. Call the bluff.

 

SD  

 Nordstream is already shut. Germany stated that the pipeline which is largely build will not get certified. Nordstream is just a Backup anyways , the gas can flow through the Ukraine and other countries , for now.

 

Rude wake-up call for Germany and Europe, imo. I do like that Olaf Scholz (new chancellor) seem to run a much harder stance than Merkel (see that he agreed to shutting of SWIFT for Russian banks and more importantly  delivers weapons to the Ukraine military from the Bundeswehr. Merkel would never have done this, Imo.

 

Change in energy politics will take longer, but is coming as well, I think.

[hasilp89]

Thanks for the thoughts SD.

[SharperDingaan]

Physically sever where the (western) replacement parts/expertise cannot be easily replaced.

Can't bribe if the pipe is physically bust, to repair they have to cannibalize from elsewhere, and accidents happen . Cut off the money flow (oil sales, banking, etc.) and they suffocate.

 

Use military force to physically sever the drug pipelines to the west, and the oligarchs have to react. Quickly becomes a choice of give up the Ukraine, or give up your life. Peace negotiations take time, Putin's time is rapidly running out, the failures are mounting (Kiev airport), tanks/choppers are trapped in the Ukraine, and mercenaries now have the required weaponry.

 

Ultimately the czar has to go, and everybody (oligarchs included) loses if he goes the nuclear route.

Both Cesar, and Genghis Khan, were not able to survive their hordes 

 

SD

 

 

 

 

   

[elliott]

2 hours ago, Spekulatius said:

I do like that Olaf Scholz (new chancellor) seem to run a much harder stance than Merkel (see that he agreed to shutting of SWIFT for Russian banks and more importantly  delivers weapons to the Ukraine military from the Bundeswehr. Merkel would never have done this, Imo.

 

Source?

My understanding is that they were asking for precise, targeted measures that may possibly use SWIFT, but not an exclusion like the one you mention.

 

Thanks!

[Xerxes]

1 hour ago, SharperDingaan said:

Use military force to physically sever the drug pipelines to the west, and the oligarchs have to react. Quickly becomes a choice of give up the Ukraine, or give up your life. Peace negotiations take time, Putin's time is rapidly running out, the failures are mounting (Kiev airport), tanks/choppers are trapped in the Ukraine, and mercenaries now have the required weaponry.

 

Ultimately the czar has to go, and everybody (oligarchs included) loses if he goes the nuclear route.

Both Cesar, and Genghis Khan, were not able to survive their hordes 

   

 

The oligarch were gone long ago as 'kingmakers'

 

Not sure, where you get this, but Geghiz Khan was certainly NOT overthrown by his own horde. He dies in combat. Nor was his son, Otaghi Khan, overthrown. He died as well. In fact his death in Mongolia saved Europe from destruction as Subotai and Batu had to stop their European campaign and return to Mongolia to be there for the election of the next Great Khan.

 

The only one that came close to be "removed" was the ruling Great Khan between Otaghi and Mangke, if memory serves correctly.

[Viking]

6 hours ago, Spekulatius said:

 Nordstream is already shut. Germany stated that the pipeline which is largely build will not get certified. Nordstream is just a Backup anyways , the gas can flow through the Ukraine and other countries , for now.

 

Rude wake-up call for Germany and Europe, imo. I do like that Olaf Scholz (new chancellor) seem to run a much harder stance than Merkel (see that he agreed to shutting of SWIFT for Russian banks and more importantly  delivers weapons to the Ukraine military from the Bundeswehr. Merkel would never have done this, Imo.

 

Change in energy politics will take longer, but is coming as well, I think.

How fast Germany appears to pivoting away from Russia is the shocker for me (in a good way). This has quickly resulted in a united Europe and much more support for Ukraine (weapons) and pain for Russia (sanctions) than anyone expected at this point. It appears Putin has completely misread Germany and how they would react. And Europe as well. The longer Ukraine holds out the worse this is looking for Putin. If Putin ramps up the killing of civilians in Ukraine (indiscriminate bombing) - which i think is likely the longer this goes on - the country to watch is China.
 

In the face of significant civilian deaths in Ukraine, and the rising risk of this spreading to other parts of Europe (lets actually listen what Putin is saying), China’s position of supporting Russia will become increasingly difficult - China will look complicit with Russia. And this will then draw China into the conflict (indirectly - by association). Lets face it… the ONLY REASON Russia will be able to continue with its military operations in Europe (as sanctions ramp up) is BECAUSE OF THE SUPPORT IT IS GETTING FROM CHINA (which will allow it to get around the sanctions). US companies with significant business in China will look extremely hypocritical - and subject to the risk of a big backlash in Europe and the West. I am not sure if Xi was expecting this tail risk to manifest itself so quickly (with his open support of Russia cemented right before the Olympics started).

—————

Are Europeans going to want to buy and iPhone that is made in China when China is the country propping up Russia’s invasion of Ukraine? (And with Putin aspiring to return Russia to its former Soviet footprint - meaning Ukraine is just the start for him.) This is the chess part of investing… the thinking ahead a few moves part. The problem with wars is once they start… where they go is UNKNOWABLE. Putin is now learning this lesson. China is probably starting to sweat just a little. Western companies with significant operations in China…. well, as i have said before, i have no idea what they are thinking…

—————

That ESG thing that is so important these days to investing is about to get a whole lot more interesting when you add the Ukrainian layer… Climate change is one thing. Civilians dying daily in Europe is quite another. BP offloading its Russia interests is just the start…

—————

Germany to set up €100bn fund to boost its military strength

- https://www.theguardian.com/world/2022/feb/27/germany-set-up-fund-boost-military-strength-ukraine-putin

 

During his half-hour address, Scholz said Putin’s decision to launch a war “marked a turning point in the history of our continent”. The military conflict would be a lengthy one, he said, stressing that he saw it as “Putin’s war” and “not a war of the Russian people”. He said the conflict would alter the world and called it “a catastrophe for Ukraine”, but said it would “also prove to be a catastrophe for Russia”.

 

Scholz issued five “mandates for action”, including: the delivery of weapons to Ukraine, which he said “can be the only answer to Putin’s aggression”; supporting sanctions against Russian interests, including the suspension of the Swift payment system; ensuring the war does not spill over into other countries, citing the importance of Nato’s article 5; a significant increase in German military spending as well as other strategic changes, including an effort to decrease German dependence on Russian gas, and the construction of two terminals allowing the import of liquid petroleum gas in the ports of Brunsbüttel and Wilhelmshaven.

Edited February 27, 2022 by Viking

[Xerxes]

Putin has made NATO great again !! 

 

i put this miscalculation on his part on having a middle-age crisis as a autocrat. (i.e. wanting to accomplish something, mortals buy Tesla cars to combat their middle-age crisis, for autocrats it is different, it is about legacy)

 

Ukrain has been re-born again in the fires of the last couple of days  ! kudos to them.

[Xerxes]

Unf***beivable

They destroyed An-225 !!! RIP

[Spekulatius]

I predict that the Ruble could collapse tonight or tomorrow morning once it starts trading. With collapse I mean >20% loss against USD/ Euro.

Edited February 27, 2022 by Spekulatius

[james22]

Have to wonder if the wind/solar TOP is behind us now.

[Spekulatius]

6 minutes ago, james22 said:

Have to wonder if the wind/solar TOP is behind us now.

Why would that be?

[wabuffo]

I predict that the Ruble could collapse tonight or tomorrow morning once it starts trading. With collapse I mean >20% loss against USD/ Euro.

 

Early forex quotes by a Russian bank I've never heard of are indicating that the Ruble has been cut in half vs USD (now 171 rubles to the dollar from 83-84 on Friday.  But I'm sure that's just the ask of a very wide bid-ask of a suddenly illiquid market.

Bill

 

 

 

[james22]

12 minutes ago, Spekulatius said:

Why would that be?

 

Because the risks of being dependent upon others for one's energy needs have been exposed.

[Xerxes]

James

Perhaps not for Germany, because they cannot do an immediate 180 degree, but i would say nuclear (uranuim) is the one that will get a bid. A true base-load source of energy. 

[hasilp89]

3 minutes ago, james22 said:

 

Because the risks of being dependent upon others for one's energy needs have been exposed.

This is interesting. I’m the near term sure and I agree with you. Lots of folks have effed up and dug themselves into a hole. you need o&g in the ST. But in the LT what is  more self reliant than wind and solar. This will only push people to develop more for the LT. Even nuclear, you need to get the uranium from some where. 

Edited February 27, 2022 by hasilp89

[Spekulatius]

28 minutes ago, wabuffo said:

I predict that the Ruble could collapse tonight or tomorrow morning once it starts trading. With collapse I mean >20% loss against USD/ Euro.

 

Early forex quotes by a Russian bank I've never heard of are indicating that the Ruble has been cut in half vs USD (now 171 rubles to the dollar from 83-84 on Friday.  But I'm sure that's just the ask of a very wide bid-ask of a suddenly illiquid market.

Bill

 

 

 

I am thinking of this step which essentially would freeze Russians foreign currency reserves. I don’t know if they can pull this off, but if they can, Russia is basically broke.

https://www.whitehouse.gov/briefing-room/press-briefings/2022/02/27/background-press-call-by-a-senior-administration-official-on-imposing-additional-severe-costs-on-russia/

[Spekulatius]

Just saw this in IBKR when I looked at my exchange rate tab. The USD.RUB pair doesn’t trade yet, apparently  because they can’t open it in Asia:

 

This is going to be interesting. First time I have seen this. Even the Turkish lira kept trading through all this craziness with Erdogan.