Virus, economies, and oil.

[bellisarius]

On top of all that, how do you think the economies of Venezuela, Libya, Iran, Nigeria, and others are doing during all of this? Putin has given them all a Royal fucking.

 

[icanhelp1]

I didn't say it would be easy, but all Putin has to do is have the markets reach a consensus that the US Dollar is unstable. I don't think that time has come but the ground work is being laid.

I remember back during the cold war, watching the sunday shows, Sam Nunn stating how we had to protect our manufacturing base, the base that made us Omnipotent on the world stage, the very thing that gave us real wealth, and then we let it go abroad.

Russia doesn't have a lot of friends. I guess what we need is another 4 years of an Obama style economy through Sleepy Joe.

Putin's going to be in office till 2036, wants the old USSR type government.

We need to put our debt on the front burner and start doing something about deficit spending. It won't be the Russians that destabilize our economy it will be our own politicians.

Trump's got it right, bring manufacturing back to the states, tax cuts was a good start.

I hope you're wrong. Low oil prices are devastating to Putin, ain't too good for us either. Interesting OP, SOOOO many variables.

 

[zipman]

Going to cover a lot of territory here.

First of all covid-19 isn't all that bad. Unless you're elderly and/or have underlying respiratory issues it's just another flu. Not worthy of the panic we see.

But what the virus and ensuing panic has shown is the weak links in our economy/manufacturing techniques. The first to bite the dust is JIT (just in time inventory). A major disruption in the supply chain, no matter what the cause shuts down the plant. It's like buying toilet paper one roll at a time, not all that smart in the long run. The other major flaw uncovered was single sourcing. That used to be a given that you NEVER single sourced but over time that lesson was unlearned. In this case it was China but it could have been any other nation if you were silly enough to put all your eggs in that basket. Any of those industries that were shut down due to the Chinese labor disruption could have avoided the issue by having suppliers in other nations, hell, even here in the US. I suppose all those new fangled techniques sounded good at the time. I suspect when this is all over there's going to be some major restructuring.

As if the virus wasn't bad enough Putin wants to start an oil war. A well played gambit and his timing couldn't be better. Russia wants to break the monopoly the US dollar has in the oil trading market. All oil is traded in US dollars. He also remembers back when he was a young KGB officer how the US and the Saudi's worked together to destroy the economy, and ultimately the entire government, of the USSR. That lesson was not lost on him and he's playing the same game in reverse now. China is "all in" on this one, as is Brazil (they think they're a player but they're just tools in this game), and the Indians used to be in but are having second thoughts based on China's behavior. Basically Russia and China are out to unseat the dollar as the world reserve currency. They just haven't figured out with what yet. They've talked about a bit-coin type currency but it really boils down the Russia wanting it to be the Ruble and China wanting it to be the Yuan. If they succeed in toppling the dollar they'll end up going to war with each other over that issue.

The toppling of the dollar would mean a severe contraction of the US economy if not an out and out collapse. And so would go Europe as well. The third world shit holes that would love to see this happen will remain what they are, third world shit holes. Neither the Russians nor the Chinese have any burning desire to help them out so any celebrations they might plan would be short lived.

On the bright side, you might see $1/gal. gas again.

I'm just quoting this for future reference.

 

[icanhelp1]

On top of all that, how do you think the economies of Venezuela, Libya, Iran, Nigeria, and others are doing during all of this? Putin has given them all a Royal fucking.

Could be the start of another cold war! What's puzzling is the Russian people willing to regress back to the old Soviet style totalitarian state.

 

[trysail]

Both Gazprom and LUKoil shares are higher in trading on the Moscow Exchange today (11 March).

At their current prices, they carry current dividend yields of 9.7% and 7.1%, respectively.


For comparison's sake, at their current prices, XOM, CVX, Shell(B), Total, and BP have current dividend yields of 8.2%, 6.3%, 10.9%, 8.8% and 10.2%, respectively.




​

 

[ishtat]

For comparison's sake, at their current prices, XOM, CVX, Shell(B), Total, and BP have current dividend yields of 8.2%, 6.3%, 10.9%, 8.8% and 10.2%, respectively.
​

And an unlooked for consequence of Putin's oil price move will be that big US oil is going to clean up some cheap shale assets over the next few weeks and months. The marginal US producers will feel the immediate pain but in the medium to longer term Putin's move could well strengthen the big US players.

Not his intention perhaps, but when policemen start playing in business!

 

[Ziggins]

In some areas, everyone has some type of impaired breathing due to polluted air. Smokers and industrial workers may also rack up some numbers.

 

[Wrong Element]

First of all covid-19 isn't all that bad. Unless you're elderly and/or have underlying respiratory issues it's just another flu. Not worthy of the panic we see.

An awful lot of people fall into one or both of those categories.

I'll be polite and leave it at that.

 

[butters]

people 60 and over, those with issues of obesity, diabetes, copd, fighting cancers, hiv positive, heart disease, those recovering from operations and flu, all these are at heightened risk.

pregnant women, contrarily, seem to have an extra defense against the virus. this one is about killing off the weaker members of society while keeping its healthy hosts alive so it can survive, transmit, and probably mutate over time.


anyone whose immune systems are weakened at all--and that's a figure that crosses age barriers--need to be very careful

 

[IrezumiKiss]

Both Gazprom and LUKoil shares are higher in trading​

https://media0.giphy.com/media/hNehVYrXALgn6/giphy.gif

Luk had his fingers in the oil biz all this time?

Ain't that some shit!

 

[sygn]

Originally Posted by sygn View Post
2. How exactly are Russia-China-Brasil trying to use the crisis to disrupt US's dollar monopoly?

When the Saudis demanded OPEC cut production to maintain high oil prices (and their coffers full), the Russians recognized a chance to make short term gains and sabotaged the Saudi deal.

The Saudis decided to teach Russia a lesson and opened up their production spigots full blast. The Saudis are going to teach Russia an expensive lesson. The world will benefit from cheap oil prices in the very near term, at the expense of the long term outlook.

The outbreak already had markets jittery, Putin's stunt at OPEC came down like a hammer blow. Gutted the oil market and the rest followed. This was an opportunity made in heaven (or hell) for him to put the ball in play. The Saudi's immediately reacted by opening the taps but a longer term response is required.

Yes, this has hurt China greatly, but it's only short term and the Chinese know that. This covid virus too will pass. There's only been some 4200 deaths in China total to date. And they will certainly benefit from buying oil at a 50% discount from their neighbor. Hell, at that discount rate we may end up buying Russian oil too.

The down side domestically is that it will shut down our Shale Oil production. Yes, I know that many will celebrate that. Shell, Exxon, etc. will buy up the leases and cap the wells. What was beginning to be a competitive market will once more be in the hands of the few.

Then there's the question of whether Putin can back up his play? Russia has plentiful oil reserves but it's deep oil not cheap oil. How much can he really sell at $25/bbl before he's selling at a loss?

I kindof struggle to understand economic issues generally.
But to me it seems like both of you seemed to concurr on 'how the current oil prices drop came to be',
but have diveegent opinions on the long-term consequences.

Yet both explanations fit.

 

[RobDownSouth]

Originally Posted by sygn View Post
2. How exactly are Russia-China-Brasil trying to use the crisis to disrupt US's dollar monopoly?







I kindof struggle to understand economic issues generally.
But to me it seems like both of you seemed to concurr on 'how the current oil prices drop came to be',
but have diveegent opinions on the long-term consequences.

Yet both explanations fit.

After reading this article, I have to admit Grampa Boxwine may have more of a point than I first thought.

Putin's power grab might have been done with the intent of triggering the Saudis to open the spigots...but the desired end result may be carefully timed to disrupt the US economy in an election year.

The US oil shale producers are protected in the short term against such Saudi over-reactions (hedged prices and financial reserves for about 90 days) but if this goes on longer the domestic energy sector in America is seriously fucked. This will exacerbate the markets and Wall Street is preparing for a bloodbath now, knowing Trump really doesn't have a clue as to what is going on. Sadly, since Trump has basically politicized the commerce, state and interior department with political hacks, this is likely to be really really bad.

 

[Hugh_Essay]

I remember back during the cold war, watching the sunday shows, Sam Nunn stating how we had to protect our manufacturing base, the base that made us Omnipotent on the world stage, the very thing that gave us real wealth, and then we let it go abroad.

Russia doesn't have a lot of friends. I guess what we need is another 4 years of an Obama style economy through Sleepy Joe.

Putin's going to be in office till 2036, wants the old USSR type government.

We need to put our debt on the front burner and start doing something about deficit spending. It won't be the Russians that destabilize our economy it will be our own politicians.

Trump's got it right, bring manufacturing back to the states, tax cuts was a good start.

I hope you're wrong. Low oil prices are devastating to Putin, ain't too good for us either. Interesting OP, SOOOO many variables.

Ok, boomer.

 

[sygn]

1. It's more than a little risible to suggest that the ruble might displace the US$.
The Chinese are the only ones remotely close and they need another 25 years minimum to even get parity. The Oil trade will continue to be priced in US$ for the foreseeable future.

Putins oil play will likely produce some rationalisation of the US shale producers but not much else in the long run. He is also desperate for the new Baltic gas line to work as Russia has already dropped behind Qatar and Australia in LNG exports.

China is the USA's rival for the next couple of generations. They will almost certainly challenge Russia's right to territory in the far North East at some stage and it's going to be very hard to prevent them dominating the very rapidly growing economies in SE Asia. China might give Putin limited support but ultimately they will be enemies and the Chinese will do nothing to promote Russian delusions in the longer term.

Putin is the big boss of a very small mob. If he makes a big enough nuisance of himself one of his dissident minority groups might be encouraged to 'retire' him.

2. The USA administration has got to recognize the fundamental and relative unimportance of nations like Russia, North Korea, Iran etc and let them know clearly that there is only one, possibly two bullies in the International economic and political playground.
'Speak softly and carry a big stick.'

Fantastic comments, except for the typical GB crap:
1. that's NOT what bellisarius implied.
2.

The down side domestically is that it will shut down our Shale Oil production. Yes, I know that many will celebrate that. Shell, Exxon, etc. will buy up the leases and cap the wells. What was beginning to be a competitive market will once more be in the hands of the few.

And an unlooked for consequence of Putin's oil price move will be that big US oil is going to clean up some cheap shale assets over the next few weeks and months. The marginal US producers will feel the immediate pain but in the medium to longer term Putin's move could well strengthen the big US players.
Not his intention perhaps, but when policemen start playing in business!

How?

 

[sygn]

After reading this article, I have to admit Grampa Boxwine may have more of a point than I first thought.

Putin's power grab might have been done with the intent of triggering the Saudis to open the spigots...but the desired end result may be carefully timed to disrupt the US economy in an election year.

The US oil shale producers are protected in the short term against such Saudi over-reactions (hedged prices and financial reserves for about 90 days) but if this goes on longer the domestic energy sector in America is seriously fucked. This will exacerbate the markets and Wall Street is preparing for a bloodbath now, knowing Trump really doesn't have a clue as to what is going on. Sadly, since Trump has basically politicized the commerce, state and interior department with political hacks, this is likely to be really really bad.

taa.. Will have to read & research around all these posts tonight

 

[icanhelp1]

Fantastic comments, except for the typical GB crap:
1. that's NOT what bellisarius implied.
2.






How?

The shale industry is a $200 billion dollar drag on our banking system. Banks or the gov or both are going to have to provide cash in the form of 0% interest across the board to carry them for a while, and fend off bankruptcy. US oil producers break even point is $50 bucks a barrel. The Russian economy isn't like ours, the gov owns pretty much everything. Even If China buys from Russia the global glut will keep prices low putting a strain on our banking system. The Russian 570 billion dollar reserve will eventually dry up hopefully before too much damage is done to our dollar or oil industry and global commodity markets. Over simplification at best.

Trump has smart people around him. If you read Trump bashing, just walk on by, isn't worth reading.

 

[DeluxAuto]

 

[bellisarius]

The shale industry is a $200 billion dollar drag on our banking system. Banks or the gov or both are going to have to provide cash in the form of 0% interest across the board to carry them for a while, and fend off bankruptcy. US oil producers break even point is $50 bucks a barrel. The Russian economy isn't like ours, the gov owns pretty much everything. Even If China buys from Russia the global glut will keep prices low putting a strain on our banking system. The Russian 570 billion dollar reserve will eventually dry up hopefully before too much damage is done to our dollar or oil industry and global commodity markets. Over simplification at best.

Trump has smart people around him. If you read Trump bashing, just walk on by, isn't worth reading.

Most likely nothing's going to happen in our lifetime, but the BRICS are playing a long game. One disruption after another. The goal hasn't changed.

Having the Chinese addicted to cheap Russian oil and gas also plays into Putin's hands long term. But when two gangsters make deals eventually there's going to be a gang war.

Gas is down to a $1.80 locally now.

Again a good point, how long can Putin hold out? In his mind through the elections he's hoping. I think he may have wanted to wait until the next OPEC meeting to play this card but the disruption from the virus was just too great a temptation for him to pass up. If I'm right it's one of the few bad moves I've seen him make.

 

[Conager]

After reading this article, I have to admit Grampa Boxwine may have more of a point than I first thought.

Putin's power grab might have been done with the intent of triggering the Saudis to open the spigots...but the desired end result may be carefully timed to disrupt the US economy in an election year.

The US oil shale producers are protected in the short term against such Saudi over-reactions (hedged prices and financial reserves for about 90 days) but if this goes on longer the domestic energy sector in America is seriously fucked. This will exacerbate the markets and Wall Street is preparing for a bloodbath now, knowing Trump really doesn't have a clue as to what is going on. Sadly, since Trump has basically politicized the commerce, state and interior department with political hacks, this is likely to be really really bad.

Now the evil Rooskies are meddling in the election to throw Putin's Puppet out of office? How Machiavellian of them!

 

[colddiesel]

I kindof struggle to understand economic issues generally.

Not just economics sunbeam!

 

[SpeareChucker]

On top of all that, how do you think the economies of Venezuela, Libya, Iran, Nigeria, and others are doing during all of this? Putin has given them all a Royal fucking.

In his defense, and it is an unworthy defense,
but those places have been royally fucking themselves
for some time now. All that wealth proved to be too
irresistible to the worst instincts of the ruthless and ambitious.

 

[SpeareChucker]

I remember back during the cold war, watching the sunday shows, Sam Nunn stating how we had to protect our manufacturing base, the base that made us Omnipotent on the world stage, the very thing that gave us real wealth, and then we let it go abroad.

Russia doesn't have a lot of friends. I guess what we need is another 4 years of an Obama style economy through Sleepy Joe.

Putin's going to be in office till 2036, wants the old USSR type government.

We need to put our debt on the front burner and start doing something about deficit spending. It won't be the Russians that destabilize our economy it will be our own politicians.

Trump's got it right, bring manufacturing back to the states, tax cuts was a good start.

I hope you're wrong. Low oil prices are devastating to Putin, ain't too good for us either. Interesting OP, SOOOO many variables.

I don't think he wants to go back to the USSR
but rather to establish a crony nominally Capitalist
Oligarchy that closer resembles organized criminal enterprises
such as the Mafia, the Cartels and



the Democrat Party...

 

[bellisarius]

In his defense, and it is an unworthy defense,
but those places have been royally fucking themselves
for some time now. All that wealth proved to be too
irresistible to the worst instincts of the ruthless and ambitious.

True enough. China's put a lot of $$$ into Venezuela in the form of "loans" with the payback 'currency' oil at market price.

 

[SpeareChucker]

They want ports to project power
just like Russia in Syria...

 

[bellisarius]

They want ports to project power
just like Russia in Syria...

That seems to be their thinking. Too bad it's on the wrong side of the canal.