Political Posts

[Spekulatius]

Just one mans opinion:

 

[changegonnacome]

Prediction time  , lets call it a hunch - I think a peace deal/conflict freeze whatever you want to call it………gets done before year end 22……maybe even sooner…….optimal timing based on the fact Russian casualties/shortage of soldiers/equipment means that a declaration of war from Putin is needed relatively soon if he wants to continue scaling into this conflict…..i think this is a red line for him which i dont think he’ll cross…………PLUS the point of maximum leverage for Russia will be in the early part of this winter………European political leaders will sell their soul once they get back from the beaches of Spain/France/Portugal in late August to avoid what seems inevitably a winter of discontent on the energy/inflation front & Putin knows when to press an advantage…….. all this points to Putin coming to the table I would think in November/December at the latest……I think potentially as early as August/September……..……spicy take but think it gets done…..wrinkle might the US Mid-terms & what suits Zelensky’s US partners but would expect an accerlation of talks to happen after the results are in.

[Spekulatius]

I dont predict anything other than the European leaders having very little influence on the outcome here. Russian gas is done and could be turned off at any moment, so they need to find alternative means to keep home heated the industry going. Lack of power wont be the issue, there is enough spare generation capacity in the grid to keep the light on.

[changegonnacome]

23 hours ago, Spekulatius said:

European leaders having very little influence on the outcome here.

 

Disagree - the international communities support led by the US & EU is the ONLY reason Ukraine has been able remain belligerent in the face of Russian aggression. I don't think anybody can deny that.

 

As we head into the winter......the US is an ocean away both metaphorically & in reality from dealing with the down stream impacts of the conflict and sanctions regime...this is my point....the US can take a principled approach here but European leaders will start to get very pragmatic, very soon when the consequences for them really start to bite.........Europe is facing BOTH higher energy prices than the US (exasperated by a weakening euro vis-à-vis the dollar) but also potential shortages/rationing of ACTUAL gas/heat this winter.

 

Last i checked no US citizen voter is being told to buckle up for a winter where they may not be able to turn on the heat in their homes..........or that their local governments are being told to identify municipal buildings that could be used to house 100's of senior citizens at night time in the event gas gets turned off.

 

My point is European leaders (especially Germany) will become important influencers moving into fall/winter....as these countries and electorate are at the thin end of spear......Joe Sixpack doesnt like that a tank of gas for his F150 costs $100+......but could he countenance being told he cant have ANY gas and that he should plan to sit in his home this winter watching TV with his jacket on? The US administration's attitude would shift radically if this was the case......lets see if the US/EU solidarity on the Ukraine-Russia conflict remains but I expect a splintering coming very soon....which as I've said maybe the catalyst for some imperfect end/freeze to the conflict. You can already hear the solidarity creaking with Macron's off ramp/humiliation language (https://www.nytimes.com/2022/06/04/world/europe/ukraine-macron-russia-izium.html) 

 

https://www.dw.com/en/german-residents-make-plans-amid-fears-of-a-winter-gas-shortage/a-62482737

Edited July 17, 2022 by changegonnacome

[Viking]

I think as winter approaches we are entering a phase of the Ukraine war i would describe as maximum uncertainty:

1.) how deep will the recession in Europe be if nat gas prices remain where they are today for the next 6-12 months? Can heavy industry in Europe survive? Can European governments afford the required energy bailouts, especially the southern countries?
2.) what will Europe do if Russia cuts back further on gas supplies (driving prices even higher)?
3.) the flip side of 2.) is can Russia even afford to cut off nat gas to Europe? Unlike oil, nat gas cannot be diverted to China and India (until new pipelines are built which will take years). Russia needs $ to keep its war machine going. 
4.) where does Russia take the actual Ukraine war from here? 
5.) does Western resolve hold? Do we reach a breaking point in the coming months in Europe where the economic pain starts to shift the political winds and support for the Ukraine war reverses? 

 

Currently my crystal ball is very, very murky. Normally, after analysis, i will develop a base case that i am fairly confident in. And then over time i try and figure out why i am wrong. Right now i really have no idea how the Ukraine war/ energy crisis in Europe is going to play out over the next 6-12 months. I see a lot of competing forces at work that are not sustainable (i think). The geopolitical risks are as unpredictable as i have seen them in a long time. 
 

What is the investment angle?

1.) one obvious move is to carry a higher than normal cash balance. There is a very good chance that something breaks. Cash is king when that happens.

2.) oil: we are in the middle of an energy crisis that might be as bad as the 1970’s Arab oil embargo. So oil looks interesting should the war in Ukraine drag on or take a turn for the worse.

Edited July 17, 2022 by Viking

[no_free_lunch]

Is there not some risk to Russia in cutting off the natural gas?   I was under the impression that they don't have sufficient pipeline capacity to sell all that nat gas to non Europe buyers.   As a result, it seems this will hit RU quite hard economically and while they are in the middle of a war.  I guess they could just take the pain but I think it's a bluff.  Certainly if they go through it, Europe will take aggressive actions to counter it and I don't know if Russia will ever sell to them again.  On a personal note, I hope it happens, let's get this thing going.

 

There was a report yesterday that crypto transactions were outlawed recently in Russia.  The far right idiots hold Russia up as this paragon of fiscal prudence as there is some sort of gold backing to the currency.  Would such a country really outlaw crypto?  To me it points to a system in financial distress.  Again, it makes me wonder if they have the ability to stop selling to Europe.

Edited July 18, 2022 by no_free_lunch

[changegonnacome]

4 hours ago, no_free_lunch said:

Is there not some risk to Russia in cutting off the natural gas?   I was under the impression that they don't have sufficient pipeline capacity to sell all that nat gas to non Europe buyers. 

 

If you believe Soros from his Davos talk....its actually not a realistic threat from Putin but it seems to work to scare European leaders.

 

Soros's take was this (i believe he sent a letter to Mario Draghi pointing this out) and I havent done any DD on whether this is even remotely true (maybe O&G folks on here will know) but he effectively said you should think of Russian natural gas as a by product of Russian oil production........the wells they have producing oil, produce gas in Siberia.......the gas is effectively sold off at a very basic cost+ model, there is no margin on Russian gas as it isnt fungible and can be only sold to those at the end of gas pipelines like nordstream.....and anyway the real money margin is in the oil......this is fungible and can put on trucks > tankers and sold to the chinese/iranians/global markets or whatever. Refusing gas deliveries would require the shutting down on some Siberian wells.

 

I think Soros's point was that EUROPE should shut off nordstream itself or threaten too or heavily curtail usage....knowing that if Putin had nowhere to send the gas it would actually force the closure of his oil fields which would really harm him & his fiscal positon......anyway this seemed kind of fanciful but who knows.

 

https://www.businessinsider.com/soros-urges-europe-heavy-taxes-on-russian-natural-gas-putin-2022-5

[Dinar]

1 hour ago, changegonnacome said:

 

If you believe Soros from his Davos talk....its actually not a realistic threat from Putin but it seems to work to scare European leaders.

 

Soros's take was this (i believe he sent a letter to Mario Draghi pointing this out) and I havent done any DD on whether this is even remotely true (maybe O&G folks on here will know) but he effectively said you should think of Russian natural gas as a by product of Russian oil production........the wells they have producing oil, produce gas in Siberia.......the gas is effectively sold off at a very basic cost+ model, there is no margin on Russian gas as it isnt fungible and can be only sold to those at the end of gas pipelines like nordstream.....and anyway the real money margin is in the oil......this is fungible and can put on trucks > tankers and sold to the chinese/iranians/global markets or whatever. Refusing gas deliveries would require the shutting down on some Siberian wells.

 

I think Soros's point was that EUROPE should shut off nordstream itself or threaten too or heavily curtail usage....knowing that if Putin had nowhere to send the gas it would actually force the closure of his oil fields which would really harm him & his fiscal positon......anyway this seemed kind of fanciful but who knows.

 

https://www.businessinsider.com/soros-urges-europe-heavy-taxes-on-russian-natural-gas-putin-2022-5

You can simply flare gas, which is what Putin will do rather than shut down wells.  I am 99.99% confident that Soros is aware of this, the fact that he omits this fact once again shows that he is, while a great investor, not a person to be trusted in my opinion.

[changegonnacome]

2 hours ago, Dinar said:

u can simply flare gas, which is what Putin will do rather than shut down wells.

 

Got ya - yeah he sure made a big song and dance about this at Davos......whats his game.....just desperate to be 'in the room' with the powerful?

[Castanza]

16 minutes ago, changegonnacome said:

 

Got ya - yeah he sure made a big song and dance about this at Davos......whats his game.....just desperate to be 'in the room' with the powerful?

You can also drill holes or find natural cavities and pump it in for storage. This is done pretty frequently here in the US. 

[aws]

Whether they cap wells, flare, or fill up storage, it still amounts to zero revenue instead of the $100mm+ per day they were receiving before. They have no way of selling this gas to Asia like they can with oil. It's a serious hit to their revenue, and it forces Europe to do what they should have done anyway and get off their dependence on Russian energy.

 

I think it's a bluff by Putin, but unfortunately Germany is folding anyway. In the face of this pinching of energy supplies they decided to self-inflict some more pain by closing perfectly good nuclear power plants by the end of the year, and have convinced Canada to return the natural gas turbine to Gazprom.

[Spekulatius]

20 hours ago, no_free_lunch said:

Is there not some risk to Russia in cutting off the natural gas?   I was under the impression that they don't have sufficient pipeline capacity to sell all that nat gas to non Europe buyers.   As a result, it seems this will hit RU quite hard economically and while they are in the middle of a war.  I guess they could just take the pain but I think it's a bluff.  Certainly if they go through it, Europe will take aggressive actions to counter it and I don't know if Russia will ever sell to them again.  On a personal note, I hope it happens, let's get this thing going.

 

There was a report yesterday that crypto transactions were outlawed recently in Russia.  The far right idiots hold Russia up as this paragon of fiscal prudence as there is some sort of gold backing to the currency.  Would such a country really outlaw crypto?  To me it points to a system in financial distress.  Again, it makes me wonder if they have the ability to stop selling to Europe.

I don’t think Russia is bluffing. I put a high likely hood on them turning of the NG to Europe. Once they have done so and Europe is past the winter, they have played their card and I think its unlikely that Russian gas will flow to Europe again. Russian Ng in that scenario will remain stranded for years until they can build infrastructure to move it elsewhere.

Europe will go into a recession and I expect some of the basic industries like Steel and Chemical to be hit hard. The rest has to replace the gas with oil in the short term.

 

The power grid will be fine. I have heard expectations of a recession (-1.5%  real GDP) but might look worse when compressed in a small time frame.

 

Edit - found and article that looks at the economic impact of NG from Russia going to zero. Italy, Slovakia, Hungria  will be hard hit:

https://www.welt.de/wirtschaft/article239995319/Gas-Lieferstopp-Diese-Laender-trifft-er-am-haertesten.html

 

Edited July 19, 2022 by Spekulatius

[changegonnacome]

3 hours ago, Spekulatius said:

Once they have done so and Europe is past the winter, they have played their card and I think its unlikely that Russian gas will flow to Europe again.

 

Which is driving my feeling the point of maximum opportunity for Russia to extract a good deal/peeling off of sanctions from the international community is early/mid this winter (before 2023).......at some point soon Europe will squeal in pain and will be ripe to advocate for a settlement between Putin & Zelensky.....i expect diplomacy to ramp up very soon.

[CGJB]

23 hours ago, Dinar said:

You can simply flare gas, which is what Putin will do rather than shut down wells.  I am 99.99% confident that Soros is aware of this, the fact that he omits this fact once again shows that he is, while a great investor, not a person to be trusted in my opinion.

I agree that Soros ranks as a great investor, one of the greatest of all time. But I don't think he is a force for good in the world. Putin, for whatever faults he may have, kicked Soros out of Russia some years ago. And for that he should be saluted and emulated by other world leaders, imho.

[John Hjorth]

For a while, none of the posts in this topic has had anything to do with the topic title in this topic.

 

[Spekulatius]

7 hours ago, changegonnacome said:

 

Which is driving my feeling the point of maximum opportunity for Russia to extract a good deal/peeling off of sanctions from the international community is early/mid this winter (before 2023).......at some point soon Europe will squeal in pain and will be ripe to advocate for a settlement between Putin & Zelensky.....i expect diplomacy to ramp up very soon.

I don’t think that war is over this winter. The sanctions for the most part will stay anyways. Europe does not matter in terms of the outcome all that much, its more the US is supplying the weapons. The EU helps quite a bit to keep the Ukraine’s afloat though with monetary aid.

 

I don't understand the animosity toward Soros.

[Xerxes]

17 hours ago, John Hjorth said:

For a while, none of the posts in this topic has had anything to do with the topic title in this topic.

 

in fact, this thread doesn’t even belong in this forum. This should go to the political section.  

[mcliu]

Good topic to see psychology at work. Herd mentality, confirmation bias, etc.

 

May: https://ca.news.yahoo.com/putin-very-ill-blood-cancer-070511658.html

July: https://www.politico.com/news/2022/07/20/cia-putin-health-00047046

 

In other news, the CIA Director William Burns appeared to pour cold water on widespread rumors that Russian President Vladimir Putin could be ill, saying there was no evidence backing up such speculation. He added that Putin was “entirely too healthy.”

[Dinar]

On 7/19/2022 at 5:16 PM, Spekulatius said:

I don’t think that war is over this winter. The sanctions for the most part will stay anyways. Europe does not matter in terms of the outcome all that much, its more the US is supplying the weapons. The EU helps quite a bit to keep the Ukraine’s afloat though with monetary aid.

 

I don't understand the animosity toward Soros.

Spek, I respect Soros as a great investor, and I appreciate what he had tried to do in Eastern Europe after the collapse of the Soviet Union.  I do not appreciate his funding of people like Chesa Boudin and Alvin Bragg and other leftins.  Crime in NYC is going up very sharply, at least in part in my opinion, caused by Bragg's refusal to prosecute criminals for many crimes, and end of cash bail.  When I am worried about taking a walk in one of the wealthiest neighborhoods in NYC, I do not appreciate people who created the situation.  

[Gregmal]

4 hours ago, mcliu said:

Good topic to see psychology at work. Herd mentality, confirmation bias, etc.

 

May: https://ca.news.yahoo.com/putin-very-ill-blood-cancer-070511658.html

July: https://www.politico.com/news/2022/07/20/cia-putin-health-00047046

 

In other news, the CIA Director William Burns appeared to pour cold water on widespread rumors that Russian President Vladimir Putin could be ill, saying there was no evidence backing up such speculation. He added that Putin was “entirely too healthy.”

Yea this is a new media tactic Ive noticed over the past 3-5 years. Spreading the disinformation about the health of our "enemies"...Remember when North Korea was in the news? Every other week was a new "where's Kim Jong Un?" article or speculation about his health. They did it with Xi, and now with Putin. Lame and see through. Not really sure what the point is either. 

[Spekulatius]

1 hour ago, Dinar said:

Spek, I respect Soros as a great investor, and I appreciate what he had tried to do in Eastern Europe after the collapse of the Soviet Union.  I do not appreciate his funding of people like Chesa Boudin and Alvin Bragg and other leftins.  Crime in NYC is going up very sharply, at least in part in my opinion, caused by Bragg's refusal to prosecute criminals for many crimes, and end of cash bail.  When I am worried about taking a walk in one of the wealthiest neighborhoods in NYC, I do not appreciate people who created the situation.  

Thanks - makes sense. Soros is funding a lot of things and some probably shouldn't be funded. Good to see Chesa Boudin getting canned for example. We visited my wife's family in the Bay area this spring and never went to SF, because of the prevalent crime. It's shameful to let things slide that far.

 

[CGJB]

22 hours ago, Gregmal said:

Yea this is a new media tactic Ive noticed over the past 3-5 years. Spreading the disinformation about the health of our "enemies"...Remember when North Korea was in the news? Every other week was a new "where's Kim Jong Un?" article or speculation about his health. They did it with Xi, and now with Putin. Lame and see through. Not really sure what the point is either. 

Here's a link listing 50 headlines of media outlets pushing the idea of Putin being in poor health.

https://www.moonofalabama.org/2022/07/50-sick-headlines-about-vladimir-putins-health.html#more

[Gregmal]

18 minutes ago, CGJB said:

Here's a link listing 50 headlines of media outlets pushing the idea of Putin being in poor health.

 

 

https://www.moonofalabama.org/2022/07/50-sick-headlines-about-vladimir-putins-health.html#more

Yup. Either some weird coincidence, or the definition of collusion. 

[Spekulatius]

Intriguing:

 

[shru]

7 hours ago, Spekulatius said:

Intriguing:

 

Quite an interesting idea.

This sparks a new idea in my mind which is quite pacifist.

And that is to use drone to deliver messages of brotherhood and humanity to Russian army. As at the end, Ukrainian and Russian has a lot in common then not. When two people fight over differences, it is better to count their similarities in order to make their differences quite insignificant.

And current war is a Putin's war rather than it is of war between two different tribes people.