Political Posts

[thowed]

@TwoCitiesCapital This is sounding more and more right to me - having capitulated & sold last year!  Was about 2-3 years of detioriation, and I couldn't see it any more.

 

I recently bought a bit of Tencent before it ran away today - always thought it was highest quality large-cap with great management, so hope it's a set and forget for a decade or two.

[Spekulatius]

1 hour ago, Xerxes said:

@Spekulatius @Hektor

 

you gents do know about Electric Boat, don’t you ?

 

no I don’t mean a boat that is electric. But rather the name of shipyard business owned by General Dynamics for decades now. 

Yes we do, but it’s diluted with Gulfstream, a mediocre military IT business and land systems (Abrahams tank, Stryker).

 

They are good operators but I don’t like many of their business they are in especially IT and Land systems.

 

Anything catering to the army will shrink, imo.

[cubsfan]

1 hour ago, John Hjorth said:

Munich Security Conference 2025 (MSC2025)[Friday, February 14^th 2:30 p.m. - 3:00 p.m.] : The U.S. in the World - J.D. Vance, Vice President, United States of America.

 

I have never before spent time really listening to Mr. Vance before. I simply must say : Godd***it he is good! He is of another, - totally different! - caliber [or breed] of a speaker than the incumbent POTUS.

 

The messages from Mr. Vance passes pretty clear and as obvious into the content inside the upper part of my Northern European, semi-thick, semi-neanderthaloid skull.

 

Does anyone hear anything in the speech by Mr. Vance below the three upper levels in Graham's Hierarchy of Disagreement? :

 

 

Before 1 year ago, JD was an unknown in the bulk of the country. But he was among the smartest in the Senate, with an impressive background of being a self-made man. If this term goes well for the current adminstration - you're looking at the next US President in my opinion.

[Hektor]

2 hours ago, Xerxes said:

@Spekulatius @Hektor

 

you gents do know about Electric Boat, don’t you ?

 

no I don’t mean a boat that is electric. But rather the name of shipyard business owned by General Dynamics for decades now.

@Xerxes Thanks for this. I've looked at EB when looking at BWXT, which is a sub contractor/supplier to EB. BWXT is a monopoly of interest to me. It's always pricey :(. 

[TwoCitiesCapital]

I think I'm fortunate in these cases because this is what I look for. Stocks down 50% from their highs, or more. Bad sentiment, negative headlines, etc. And a willingness to buy what is cheap without regards to a quality screen. 

 

I never owned the BATS when they were popular. But I started buying Alibaba last summer and have been adding to Prosus in recent months. Relative valuations were stupid and the sentiment surrounding the real estate made it clear there was an opportunity in China generally. Collectively, they're now my 3rd largest position behind Fairfax and Exor. Was happy to see Tepper buying in size recently which gave me added confidence given his track record calling these things. 

[Xerxes]

1 hour ago, Spekulatius said:

Yes we do, but it’s diluted with Gulfstream, a mediocre military IT business and land systems (Abrahams tank, Stryker).

 

They are good operators but I don’t like many of their business they are in especially IT and Land systems.

 

Anything catering to the army will shrink, imo.

yeah. IT ain’t sexy enough for me. And the prevailing view on land system is not looking bright, even with the largest land war in Europe. Gulfstream though is a gem.

 

what is striking for me about GD is that since it’s corporate transformation in the 90s and very early 2000s, (I.e exiting aerospace and coming back to it via Gulfstream purchase) has not reshaped its portfolio, except for the bolt-on w/ IT in the 2010s, in contrast to the rest of cohort. 
 

 

[nsx5200]

7 hours ago, John Hjorth said:

Does anyone hear anything in the speech by Mr. Vance below the three upper levels in Graham's Hierarchy of Disagreement? :

 

Watching the video at even 1.5x wasn't fast enough for me.

Here's the transcript for those that wants to digest it quicker.

 

Given the past history of Trump's interaction with the media and his attempts to void the results of a past election.  All I can think of is the deployment of this technique, and loyalty litmus tests in questioning the true motivation behind that speech.  If there are valid counter arguments, using the same three upper levels, I'd be glad to hear it.

[Spekulatius]

5 hours ago, Hektor said:

@Xerxes Thanks for this. I've looked at EB when looking at BWXT, which is a sub contractor/supplier to EB. BWXT is a monopoly of interest to me. It's always pricey :(. 

You could buy BWXT for 13-14 earnings when nobody was paying attention to defense stocks. These things go around in cycles.

[Sweet]

21 minutes ago, nsx5200 said:

Here's the transcript for those that wants to digest it quicker.

Vances is right.  I don’t know what happened to us in Europe.  We’ve really lost our way.

[Hektor]

21 minutes ago, Spekulatius said:

You could buy BWXT for 13-14 earnings when nobody was paying attention to defense stocks. These things go around in cycles.

I need to revisit this one.

[Spekulatius]

10 hours ago, nsx5200 said:

 

Watching the video at even 1.5x wasn't fast enough for me.

Here's the transcript for those that wants to digest it quicker.

 

Given the past history of Trump's interaction with the media and his attempts to void the results of a past election.  All I can think of is the deployment of this technique, and loyalty litmus tests in questioning the true motivation behind that speech.  If there are valid counter arguments, using the same three upper levels, I'd be glad to hear it.

I agree, Vance/Trump can hardly take the high ground here. Trump still claims to this day that he won the 2020 election against all evidence.

 

However, Vance also brings valid points, regarding freedom of expression as well as ignoring their citizens and voters. Those are real problems in the EU. Emigration is clearly something that people in Europe want to reign in so rather than say, this is a right wing agenda, the democratic parties need to take the people will into account and act accordingly, imo.

 

But since we are talking mainly the Ukraine war here, I am perplexed about Trumps approach to end the war by giving out a bunch of free concessions to the Russia to start and basically take away Ukraines agency while basically stating that aside from negotiation they will not back any guarantees. I guess he could taking away military aide, what makes him think that the stakeholders will actually follow through with the negotiated results? Without backing up the result, Trump has no agency to negotiate imo. Will Ukraine fall apart militarily if the US aide goes away? Maybe we will find out. For sure tariffs to Russia won’t work.

 

In any case, the questions for European leaders is - well you don’t like it? So what are you going to do about it?

 

 

Edited February 15, 2025 by Spekulatius

[John Hjorth]

10 hours ago, nsx5200 said:

Watching the video at even 1.5x wasn't fast enough for me.

Here's the transcript for those that wants to digest it quicker.

 

Given the past history of Trump's interaction with the media and his attempts to void the results of a past election.  All I can think of is the deployment of this technique, and loyalty litmus tests in questioning the true motivation behind that speech.  If there are valid counter arguments, using the same three upper levels, I'd be glad to hear it.

 

Thank you for an absolutely awesome post here, @nsx5200,

 

Very good points. One could also call it hypocrisy or the application of double standards.

 

It actually made my Saturday morning reading your post and the related stuff.

 

- - - o 0 o - - -

 

Edit :

 

Also, please mind the actual narritive as discussion basis in the actual situation on the security conference in Munich contra latest known facts about defence spending by NATO member countries :

 

 

USA representatives states that Europe is the laggard and the culprit, while the fact is that USA is not even the frontrunner here, likely Canada also holding its head low in this ongoing discussion.

 

- - - o 0 o - - -

 

Pravda [Friday, 14 February 2025, 22:25] : Northern European leaders urgently meet on the sidelines of Munich Security Conference after Trump's statements.

 

Danish Prime Minister's Office [February 14 2025] : Joint Nordic-Baltic Leaders' Statement on Ukraine 14. February 2025 - Nordic-Baltic Leaders' Statement (Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway, Sweden).

 

Please note where you find these countries located in the graph above. Europe isen't just 'Europe' in this context, there are certainly shades and nuances to the situation, which there thus also should be to the discussion.

 

Edited February 15, 2025 by John Hjorth

[Charlie]

The germans federal president Steinmeiers speech from the Security Conference in Munich:

 

https://www.bundespraesident.de/SharedDocs/Reden/EN/Frank-Walter-Steinmeier/Reden/2025/250214-Munich-Security-Conference.html

 

 

Cheers!

[nsx5200]

https://www.nbcnews.com/politics/politics-news/zelenskyy-tells-aides-reject-trump-pitch-ukraine-mineral-reserves-rcna192426

"Ukrainian President Volodymyr Zelenskyy has told his aides to reject Trump administration officials' proposal that would grant the United States significant access to Ukraine’s rare earth minerals...[as] a form of repayment for the support Washington has provided Kyiv since its war with Russia began"

"proposed the draft agreement, which would have granted the United States 50% ownership of Ukraine’s rare earth minerals...[,] titanium and iron ore, both of which are used to make a variety of technology products.  Many of the minerals, however, are in areas now controlled by Russian troops, according to U.S. officials."

 

It looks like Zelenskyy's found Ukraine's version of the silicon shield as a bargaining chip.  I hope Trump makes Russia give up at least those regions that are rich in the minerals that the US is interested in.  It'll give US some vested interest in keeping those region away from Russia's control, especially now that Russia is some form of China proxy.

[Xerxes]

20 minutes ago, nsx5200 said:

https://www.nbcnews.com/politics/politics-news/zelenskyy-tells-aides-reject-trump-pitch-ukraine-mineral-reserves-rcna192426

"Ukrainian President Volodymyr Zelenskyy has told his aides to reject Trump administration officials' proposal that would grant the United States significant access to Ukraine’s rare earth minerals...[as] a form of repayment for the support Washington has provided Kyiv since its war with Russia began"

"proposed the draft agreement, which would have granted the United States 50% ownership of Ukraine’s rare earth minerals...[,] titanium and iron ore, both of which are used to make a variety of technology products.  Many of the minerals, however, are in areas now controlled by Russian troops, according to U.S. officials."

 

It looks like Zelenskyy's found Ukraine's version of the silicon shield as a bargaining chip.  I hope Trump makes Russia give up at least those regions that are rich in the minerals that the US is interested in.  It'll give US some vested interest in keeping those region away from Russia's control, especially now that Russia is some form of China proxy.

imagine if Putin comes back with a counter offer:  I will give 60% control to the U.S. of rare earth in the Donbas (occupied by Russia or not) if U.S. formally recognize Russia’ annexation and halt all aides 

 

what a world 

[Pelagic]

This is to my knowledge the first time Ukraine has targeted a major oil pipeline, certainly the first successful strike on one. Ironically it primarily carries Kazakh oil through Russia for export from Novorossiysk. Crude export capabilities were a major red line under the Biden admin, he even had Harris discuss Ukraine's strikes on refineries last year at the Munich conference, asking them to focus their efforts on the battlefield rather than Russian energy assets. Perhaps a policy shift from Trump, perhaps Ukraine deciding to plot its own course. 

 

 

 

 

[mt04]

China to lift restrictions on foreign capital - Chinadaily.com.cn

Major plan aims to ensure stable A-share market

 

have been increasing my investment in China significantly recently - Taiwan risk should be very low over the short to mid-term as the country is in the process of opening up (to foreign capital)

 

would not be sensible to propagate an approach of opening up just before willfully ending it through the destruction of trust

 

we seem to be facing major pumping

[Spekulatius]

58 minutes ago, mt04 said:

China to lift restrictions on foreign capital - Chinadaily.com.cn

Major plan aims to ensure stable A-share market

 

have been increasing my investment in China significantly recently - Taiwan risk should be very low over the short to mid-term as the country is in the process of opening up (to foreign capital)

 

would not be sensible to propagate an approach of opening up just before willfully ending it through the destruction of trust

 

we seem to be facing major pumping

Why not lay a trap and get foreign capital suckered in before letting it snap shut. It makes perfect sense to me.

[Xerxes]

7 hours ago, Pelagic said:

This is to my knowledge the first time Ukraine has targeted a major oil pipeline, certainly the first successful strike on one. Ironically it primarily carries Kazakh oil through Russia for export from Novorossiysk. Crude export capabilities were a major red line under the Biden admin, he even had Harris discuss Ukraine's strikes on refineries last year at the Munich conference, asking them to focus their efforts on the battlefield rather than Russian energy assets. Perhaps a policy shift from Trump, perhaps Ukraine deciding to plot its own course.

 

 

The Enemy  [I mean, Zelenskyy]  gets a Vote too.

 

[Dinar]

22 minutes ago, Xerxes said:

 

The Enemy  [I mean, Zelenskyy]  gets a Vote too.

 

Could be the carrot and the stick approach.  If Moscow does not settle, Ukraine (with Western weapons) can apply more pressure + I think Trump/Vance/Rubio floated additional sanctions.  

[Xerxes]

Revealed: Trump's confidential plan to put Ukraine in a stranglehold

 

Donald Trump’s demand for a $500bn (£400bn) “payback” from Ukraine goes far beyond US control over the country’s critical minerals. It covers everything from ports and infrastructure to oil and gas, and the larger resource base of the country.

The terms of the contract that landed at Volodymyr Zelensky’s office a week ago amount to the US economic colonisation of Ukraine, in legal perpetuity. It implies a burden of reparations that cannot possibly be achieved. The document has caused consternation and panic in Kyiv.

 

The Telegraph has obtained a draft of the pre-decisional contract, marked “Privileged & Confidential’ and dated Feb 7 2025. It states that the US and Ukraine should form a joint investment fund to ensure that “hostile parties to the conflict do not benefit from the reconstruction of Ukraine”.

 

The agreement covers the “economic value associated with resources of Ukraine”, including “mineral resources, oil and gas resources, ports, other infrastructure (as agreed)”, leaving it unclear what else might be encompassed. “This agreement shall be governed by New York law, without regard to conflict of laws principles,” it states.

The US will take 50pc of recurring revenues received by Ukraine from extraction of resources, and 50pc of the financial value of “all new licences issued to third parties” for the future monetisation of resources. There will be “a lien on such revenues” in favour of the US. “That clause means ‘pay us first, and then feed your children’,” said one source close to the negotiations.

 

It states that “for all future licences, the US will have a right of first refusal for the purchase of exportable minerals”. Washington will have sovereign immunity and acquire near total control over most of Ukraine’s commodity and resource economy. The fund “shall have the exclusive right to establish the method, selection criteria, terms, and conditions” of all future licences and projects. And so forth, in this vein. It seems to have been written by private lawyers, not the US departments of state or commerce.

 

President Zelensky himself proposed the idea of giving the US a direct stake in Ukraine’s rare earth elements and critical minerals on a visit to Trump Tower in September, hoping to smooth the way for continued arms deliveries.

Volodymyr Zelensky proposed a US stake in Ukraine’s minerals production when he met Donald Trump in September 

 

He calculated that it would lead to US companies setting operations on the ground, creating a political tripwire that would deter Vladimir Putin from attacking again.

 

Some mineral basins are near the front line in eastern Ukraine, or in Russian-occupied areas. He has played up the dangers of letting strategic reserves of titanium, tungsten, uranium, graphite and rare earths fall into Russian hands. “If we are talking about a deal, then let’s do a deal, we are only for it,” he said.

 

He probably did not expect to be confronted with terms normally imposed on aggressor states defeated in war. They are worse than the financial penalties imposed on Germany and Japan after their defeat in 1945. Both countries were ultimately net recipients of funds from the victorious allies.

 

A new Versailles

 

If this draft were accepted, Trump’s demands would amount to a higher share of Ukrainian GDP than reparations imposed on Germany at the Versailles Treaty, later whittled down at the London Conference in 1921, and by the Dawes Plan in 1924. At the same time, he seems willing to let Russia off the hook entirely.

 

Donald Trump told Fox News that Ukraine had “essentially agreed” to hand over $500bn. “They have tremendously valuable land in terms of rare earths, in terms of oil and gas, in terms of other things,” he said.

He warned that Ukraine would be handed to Putin on a plate if it rejected the terms. “They may make a deal. They may not make a deal. They may be Russian someday, or they may not be Russian someday. But I want this money back,” he said.

 

Trump said the US had spent $300bn on the war so far, adding that it would be “stupid” to hand over any more. In fact the five packages agreed by Congress total $175bn, of which $70bn was spent in the US on weapons production. Some of it is in the form of humanitarian grants, but much of it is lend-lease money that must be repaid.

Republican Senator Lindsey Graham suggested at the Munich Security Conference over the weekend that Trump’s demand was a clever ploy to bolster declining popular support for the Ukrainian cause. “He can go to the American people and say, ‘Ukraine is not a burden, it is a benefit,’” he said.

 

Sen Graham told the Europeans to root hard for the idea because it locks Washington into defending a future settlement. “If we sign this minerals agreement, Putin is screwed, because Trump will defend the deal,” he said.

Ukrainian officials had to tiptoe though this minefield at the Munich forum, trying to smile gamely and talking up hopes of a resource deal while at the same pleading that the current text breaches Ukrainian law and needs redrafting. Well, indeed.

 

Talk of Ukraine’s resource wealth has become surreal. A figure of $26 trillion is being cast around for combined mineral reserves and hydrocarbons reserves. The sums are make-believe.

 

Ukraine probably has the largest lithium basin in Europe. But lithium prices have crashed by 88pc since the bubble burst in 2022. Large reserves are being discovered all over the world. The McDermitt Caldera in Nevada is thought to be the biggest lithium deposit on the planet with 40m metric tonnes, alone enough to catapult the US ahead of China.

The Thacker Pass project will be operational by next year. The value of lithium is in the processing and the downstream industries. Unprocessed rock deposits sitting in Ukraine are all but useless to the US.

It is a similar story for rare earths. They are not rare. Mining companies in the US abandoned the business in the 1990s because profit margins were then too low. The US government was asleep at the wheel and let this happen, waking up to discover that China has acquired a strategic stranglehold over supplies of critical elements needed for hi-tech and advanced weapons. That problem is being resolved.

Ukraine has cobalt but most EV batteries now use lithium ferrous phosphate and no longer need cobalt. Furthermore, sodium-ion and sulphur-based batteries will limit the future demand growth for lithium. So will recycling. One could go on. The mineral scarcity story is wildly exaggerated.

As for Ukraine’s shale gas, a) some of the Yuzivska field lies under Putin control, and b) the western Carpathian reserves are in complex geology with high drilling costs, causing Chevron to pull out, just as it did in Poland. Ukraine has more potential as an exporter of electricity to Europe from renewables and nuclear expansion, but that is not what is on Donald Trump’s mind.

The second violation of Ukraine

Ukraine cannot possibly meet his $500bn demand in any meaningful timeframe, leaving aside the larger matter of whether it is honourable to treat a victim nation in this fashion after it has held the battle line for the liberal democracies at enormous sacrifice for three years. Who really has a debt to whom, may one ask?

“My style of dealmaking is quite simple and straightforward,” says Trump in his book The Art of the Deal. “I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after.”

In genuine commerce the other side can usually walk away. Trump’s demand is iron-fist coercion by a neo-imperial power against a weaker nation with its back to the wall, and all for a commodity bonanza that exists chiefly in Trump’s head.

 

“Often-times the best deal you make is the deal you don’t make,” said Trump, offering another of his pearls.

Zelensky does not have that luxury. He has to pick between the military violation of Ukraine by Putin, and the economic violation of Ukraine by his own ally.

[crs223]

They'll let the foreign capital in... but will they let it out when it comes time to pay dividends or sell your shares?  My understanding is that CCP permission is needed to exchange Yuan for USD.  Also: will they allow BABA to pay dividends and/or make buybacks on the NYSE in USD?  Or will BABA have to continue issuing convertible bonds (denominated in USD) to fund the share buybacks (a paradox... presumably because CCP blocking exchange of Yuan for USD).

[winjitsu]

2 hours ago, crs223 said:

They'll let the foreign capital in... but will they let it out when it comes time to pay dividends or sell your shares?  My understanding is that CCP permission is needed to exchange Yuan for USD.  Also: will they allow BABA to pay dividends and/or make buybacks on the NYSE in USD?  Or will BABA have to continue issuing convertible bonds (denominated in USD) to fund the share buybacks (a paradox... presumably because CCP blocking exchange of Yuan for USD).

 

Enter the role of HKD and Hong Kong, basically the mechanism to acquire offshore dollars.

 

[John Hjorth]

Upon the MSC2025 conference, I was this morning met by the following cartoon on JP.dk - what a great start on the day!  :

 

[Hektor]

9 hours ago, crs223 said:

hey'll let the foreign capital in... but will they let it out when it comes time to pay dividends or sell your shares?  My understanding is that CCP permission is needed to exchange Yuan for USD.  Also: will they allow BABA to pay dividends and/or make buybacks on the NYSE in USD?  Or will BABA have to continue issuing convertible bonds (denominated in USD) to fund the share buybacks (a paradox... presumably because CCP blocking exchange of Yuan for USD).

After the not so distant episode of muscling business leaders, will capital flow in?