Tag Archives: Oil

Time as a factor

There are a few issues, I could sum them all up, but that is actually counter productive. You see, time does not adhere to anything, it is the big brother of nature, it creeps up on you and just when you think you have time left, it pulls the rug from under you and you have run out of time. The first example is ‘Energy shortage warnings across US’ the source does not matter (they are too busy using news as advertisement tokens) but the news can be found all over the field. And it is not merely the US, the EU (a Dutch example was given by me this year), the UK as well as several other places. With the exception of Saudi Arabia, Russia and a few other players, most are running out of energy options. There is a solution and Elon Musk and his energy solutions are part of the solution, I even gave a limelight on ‘Darkness through inaction’ (at https://lawlordtobe.com/2021/10/10/darkness-through-inaction/) on October 10th 2021 and even more around June 2020 with ‘Musings’ (at https://lawlordtobe.com/2020/06/18/musings/) there was more before that. I know Time, I have seen its many sides so I do know what running out of means. I reckon Elon Musk and others too. Driven to the next milepost they give the world more and more, but the governments and the greedy wannabe’s are making deals to take a sliver of that pie, willing to sink whatever saves them, because living in poverty is worse than death, so they will do whatever they can to stop the process, but now the energy shortages are adding up. We are running out of time and we might merely have 2 summer seasons left where EVERYONE can afford energy, after that all bets are off. So when we see the BS jerking around COP26, when we realise that we cannot evade oil and petrochemical solutions for now we see that those trying to bring us solutions are getting hindered by those who want to be in charge of it all, because energy becomes the next currency. Feel free to doubt this, but Saudi Aramco is now worth $2.3 trillion dollars making it the richest corporation on the planet. In less than three weeks it grew 15%, you still think I am full of it? And the Ukrainian mess does not help, as the EU and others refuse and ban Russian oil and gas, their situation bites more. A setting that was out in the open before the Russian situation started and it was out in the open. We merely ran out of time faster and I reckon that if the media does not openly expose those hindering some solutions are not given the limelight they deserve you will learn the hard way how expensive 2023-2024 will get. As I grew up I saw prices rise, but I never considered that essential needs like power, heating and food would become unaffordable. Time learned me that lesson the hard way. No matter how we look, we cannot see all elements coming for us and I like many (unless I sell my IP) will see heating, food, and electricity needs and like many others I will only be able to pay for two of them, so what will become out of reach for me? I cannot tell, it will be a roll of the dice.

Leave a comment

Filed under Finance, Science

Retail 101

One of the oldest rules of retail 101 is that you buy cheap and sell as high as possible, that is how you create profit. Add to that the simple rule that you spend less than you earn and that will make you rich on the side. These rules are not new, they were old when the crusades started (ca.1095). 

So when the BBC (at https://www.bbc.co.uk/news/business-61188579) gives us ‘Oil prices have soared. Why won’t Opec bring them down?’ The setting of the American governmental license plate came to mind (Dee-You-Age). We get to see “Opec+ could also lower prices by putting more oil onto the market, which is what major importers like the US and UK want it to do.” Yes, and tarmac is made with liquorice. Opec+ has a good deal, there is a need for oil and they can set the price. The nations relying on oil have done pretty much ABSOLUTELY NOTHING to appease Saudi Arabia. We see the two largest suppliers (Russia and Saudi Arabia) but even though the US is not in that group, how much oil do they produce? 

And then we get “US President Joe Biden has repeatedly appealed to Saudi Arabia to increase its oil output, but to no avail. UK Prime Minister Boris Johnson also asked Saudi Arabia and the United Arab Emirates to increase production. He too was rebuffed.” In this the first part was that the US played a stupid game.

  1. A journalist no one gives a fuck about goes missing and for weeks the gossip and speculations start, even the United Nations get involved with shoddy documentation (as I personally see it). Realism tells us that something happened. Yet no one and I say again no one produced clear evidence. None gave any clear evidence of what had happened and Turkey who was playing the Iranian game made things worse. The United Nation document had issues, several players were not held to account, but that did not matter, they all got to attack the Kingdom of Saudi Arabia.
  2. The Houthi attacks and again the Iranian factor in this was openly ignored by the media. The non Arabic nations were not informed on houthi attacks with Iranian support on Saudi civilian targets. Coalition events were exaggerated, Houthi attacks were trivialised. 
  3. Saudi and SAMI needs were stopped and Saudi defence settings were halted. Now, the west can do that, they are allowed to. Yet in that, the Saudi’s have absolutely no need to increase production, do they? If the west was so clear on their needs, they would have increased non-oil options two decades ago, but that did not really happen, did it?

Three clear events that are now biting the hands of the US and the UK, Saudi Arabia is willing to look after its friends, but these two have not really shown to be friends, have they?

And in all this Russia is enjoying what is happening, because they do not have to do anything else but watch the cost of living in the US, UK and EU to rise to almost impossible levels. A stage we never wanted and perhaps those tea ladies from the CAAT are now in a stage where they can afford the tea, but they can no longer afford the cookies. There is an opposing side to almost everything and the simple truth of protesting without understanding what was going on is now taking its toll. But the CAAT had its limelight shots in the newspapers. It is lovely to see those pictures, just too bad that the price of that limelight ended up costing some people billions and under those conditions the UK can pretty much kiss their cheaper oil goodbye.

In all this, I wonder what the CIA did last month, what they offered the Kingdom of Saudi Arabia, because the current administration has pretty much destroyed whatever options they had. As I see it, by the rules of Retail 101, the US has only one option, to open whatever weapon sales it can get without restrictions and with a full service package. I reckon that alone is required to lower the oil prices by 10%, they need a lot more, but as such the players will have to offer more and they need to realise that the loud words of ‘no oil’ and ‘end petrol needs’ were merely that, words. It will happen, there is no doubt in my mind, but I doubt I will be alive to see those days, I reckon kids who were born after 2000 will have a decent chance to see the end of a petrol based economy whilst they are still alive. I doubt that it will happen before that. In this, the entire stage of the BBC article was to some degree needed, but they should have given the people a slightly better information ring. Like the interactions of OPEC and airlines. You see over the last 15 years we added a total of 41000 additional flights a day, why? There is also a lack of the American numbers, how much oil do they produce and why can they not produce more? Two simple elements in this equation missing, why is that? 

Leave a comment

Filed under Finance, Media, Politics

A symphony in only two parts?

That is the question at times. We see two events, two articles and we forget that there are a dozen other connections. I am not different, at times I overlook them too, not always but frequently. It is a mix of a larger stage, more connections, more unregistered events. Yet for now we start with the first nail in the coffin of American economy. The article from Reuters (at https://www.reuters.com/world/middle-east/saudi-arabia-invites-chinas-xi-visit-wsj-2022-03-14/) gives us ‘Saudi Arabia invites China’s Xi to visit’, the article states that this could be as early as may. Right before the Midterms in November 2022 the US is now likely to face that dozens upon dozens of billions walk from the US side straight into the hands of China (and me missing out on commission, darn). Is this a given? No, of course not. There could be a dozen reasons why President Xi Jinping might be visiting. But how often has ANY Chinese president done that? And Crown Prince Mohammed bin Salman Al Saud is eager to set his defence and SAMI to higher values and I was clear in the two years that this was coming and as far as I can tell, President Biden has soured the waters enough for this to become a reality. Some focusses on weapons being sold, I say in THIS economy you should not ignore the nations Saudi Arabia, India, Egypt, who are the largest importers. In this stage where the US HELD 37% and China only 5.2% the stage is now set where China can progress a lot higher on that list and should they get the bulk of Saudi and SAMI attention there is a clear stage where the new numbers will represent (2023/2024) could state that the US hold 25% and China then could be holding 17.2%, it then places China right next to Russian exports and the US a lot more to that stage, a stage where it is now an almost fair fight between the US, Russia and China, but to be clear was that EVER an economic stage where you WANT a fair fight? A stage where China overtakes both France and Germany as supplier? This is the stage that could inhabit the Middle East and that is merely the beginning. You see the partnerships that the Kingdom of Saudi Arabia and Egypt have also sets Egypt in the sights of China as a defence trade partner, a stage a few people overlooked and that drives Chinese export achievable needs up a lot more. So the damage to the US might increase over the coming year and those who want to be in denial, go right ahead, the article with ““The crown prince and Xi are close friends and both understand that there is huge potential for stronger ties,” the report quoted a Saudi official as saying. “It is not just ‘They buy oil from us and we buy weapons from them’.”” I like the part “It is not just ‘They buy oil from us and we buy weapons from them’” the best, it might not be merely just, for China that is a good deal in several ways and when that deal gives China more oil, it will mean that it gives the US less oil a stage they feared for some time and the oil market has been volatile on these fears alone. So when I was mentioning that whatever relief the oil prices give us today, tomorrow will be different and now we see that fear come to fruition, not immediately mind you, but the price of fuel will go up again and again, how high? I cannot tell but the stage where we saw the American administration make statements like “You can pump more oil, so pump more oil!”, it was nice but there is now every chance that the extra oil (plus a little more) goes to China. Will the UAE do the same? I cannot tell, but the US better become best buddies with Sheikh Khalifa bin Zayed Al Nahyan and Sheikh Mohammed ibn Rashid Al Maktoum, because if I see this right, the US will need every friend it can muster in their oil needs (a few others too) and in that need they better realise that catering to Iran will not merely be unrewarding, it will soon become dangerous on more than one field as well. I mentioned two years ago that yielding the Middle East to China would be one of the most dangerous things ever, and that was merely economically. Now we see one field exposed and the construction opportunities in Neom could also go towards China, a stage that makes the US (EU too) more and more irrelevant, a stage the US themselves threw upon their own economic needs. Now that it is becoming more and more realistic these people will not be allowed to cry with the “Why oh why” statement like little chihuahua’s. Or as my grandmother used to say “You do not bite the hand that feeds you” a practical lesson that the US will now face within the next 3 months and the 2 years that follow. A stage that the Biden Administration failed to spot in some stage of ignorance and now as we see it optionally unfold (it might be that President Xi Jinping is visiting to buy real estate in Neom) some might see the dangers that are coming the next year or so and the impact over the next decade. I merely loose out on commission (oh, poor poor me). 

 

1 Comment

Filed under Finance, Military, Politics

Two issues connected

It is easy to see the connection, but at that point one wonders whether the real connections are made. The first article is ‘White House faces oil standoff with Saudi Arabia and UAE as prices soar’, the article (at https://www.theguardian.com/us-news/2022/mar/13/white-house-us-joe-biden-oil-output-prices-saudi-arabia-uae) gives us “Saudi Arabia’s de facto leader, Mohammed bin Salman, and his counterpart in the United Arab Emirates, Mohammed bin Zayed, are yet to agree to a phone call with the west’s most powerful man”, my takeaway is the question whether the ‘west’s most powerful man’ is actually that. We also get “Each capital is a major supplier of oil, with excess capacity, which would soften the effect on US consumers through fuel prices before midterm elections in November that threaten Democratic control of Congress” and this is enough for article one. We see a few issues, the oil pries are still soaring and so far that so called most powerful man has not really achieved anything, has he? 

In the second article called ‘Iran suspends talks with Saudi, slams Riyadh’s executions’ (at https://www.reuters.com/world/middle-east/iran-suspends-talks-with-saudi-arabia-nour-news-2022-03-13/), which is kinda hilarious, especially as Iran had 299 documented executions in 2021. Yet the story also gives us ““Iran has unilaterally suspended talks with Saudi Arabia,” Nor News said, without providing a reason. It said no specific date had been scheduled for a new round of talks”, not unexpected, but that is the effect of diplomacy with a toddler like Iran. You see I think there is more to it. I think Russia is trying to put the pressure on the west, the US is the weakest with its ‘nuclear deal’ ego. And as Iran suspends talks they continue to enrich uranium. Delay after delay until it is too late. 

Am I correct?
To be honest, I am not certain, I could very well be wrong. But consider Russia entanglement in the middle east and especially with Iran, it wants to play tits for dad (oops) by withholding the milk (oil) and this play seems to be actually working out. President Biden did this in part to himself. And now the larger stage is pushed into directions it should not have been going in. Yemeni’s and Syrians feel more and more betrayed by the west, and honestly, I cannot blame them for that. 

My issue is that Russia is playing a way too dangerous game, as they are now part of the delays, Iran might finish what it wants and when that goes the wrong way and Israel gets its first nuclear detonation, the bars are sealed. The USA must prove its word or be seen as flaccid and irrelevant on the political stage. And their play (as I mentioned in previous articles) in the Kingdom of Saudi Arabia was badly managed and even worse constructed and now that the US is desperate for cheaper oil they will feel the sting of biting the hand that was feeding them. It was bad already and now there is every indication that Russia is making matters worse via Iran. 

Russia is the connection. It is souring the Nuclear deal, and it has a handle on the Middle East to some degree, how much I cannot tell, but some who can are not talking (for obvious reasons) and that sets the sliding scales for the US who is now on a worsening scale economically. Even as some state that oil prices are going down, I personally feel that it is temporary. It is nowhere near the old price and there are chances that it will go back to $123.70 (March 8th) and optionally higher than that. President Biden could influence it positively, but if he does not succeed then the first sign of failure is shown and the Russians want that because for them the Republicans are easier to deal with (allegedly). For President Biden it all hangs here, He is down in the senate, but if he loses even one more seat the senate will be overwhelmingly republican and that COULD happen. He has a majority in the house, but only by 11 seats and there is no guarantee that he can hold onto them. When the house is lost as well, the Democratic Party will find obstacle after obstacle and that is what they signed on for. 

The failures in the middle east, especially Iran will haunt this administration for a long time to come. And the oil prices? Well that is still up n the air, but there are indications that this will not go their way either, it is wholly due to the way they dealt with the Kingdom of Saudi Arabia. 

Leave a comment

Filed under Finance, Media, Military, Politics

Seesaw without balance

This happens, a seesaw is play-toy with a shifting balance, but early in life someone thought it through, because if it works for people it works in a lot more places and balance is always option to stages. 

In this, we see two on the left and two on the right, so someone figured out that if one side is too heave, the other side will be too light, so if there is a moderator on the axial of the seesaw, that person can shift weight just before or just after the axial and the seesaw seems fair again. And it would have worked for much longer if there wasn’t someone checking the game that is being played. So today, 6 hours ago Al Jazeera gave us ‘Saudi forces destroy Houthi drone targeting airport in Jizan’ (at https://aje.io/45xbqg), so far nearly none of the western media has it, in 6 hours, no reporting and it is a repetition of an attack 2 weeks ago which came down on Abha, both attacks on civilian populations by Iranian driven Houthi terrorist forces. Yet as I personally see it there lies the rub, the media will avoid negative reporting on Iran, because there is the delusional figment of a nuclear accord shimmering somewhere and no one knows where. Yet in the meantime Houthi claimed attacks continue on Saudi Arabia and the west is not informed by its media, why is that? In this attack 16 people were wounded, and according to Saudi state TV 3 people were in critical condition. 

The problem here is that we rely on people giving us ‘Nuclear talks with Iran enter the endgame’, but not the larger game that Iran is playing and it will cost us, it will cost us all. I would not be surprised if someone at Aramco closes the European and American tap for 2-4 weeks, it would wake up useless politicians getting calls from people in their district that fuel prices have doubled, they would suddenly call crime on every street and as loud as they can, but at present the attacks on Saudi Arabia can continue, can they not? And in this we can ignore the Ukraine and the ‘danger’ that oil prices could go up by $20, if some have had enough oil prices could go up by 200%-300%, but are the people at Aramco willing to go there? Some of the big boys think that they are too big to fail, but in the Netherlands the SNS bank made that very same mistake in 2013. So when someone figures out that there are two parties, the heavy players on one side and the moderator in the middle pretending that this is a fair setting are part of the problem, we will see a much more intense and volatile setting come into play and in this Aramco closing the tap might become the least volatile of all moves. 

This is not speculation, this is merely the optional stage of available strategies that the Kingdom of Saudi Arabia has at its disposal, you see, the west ignoring and refusing to give the people all the information is becoming a larger problem. Beside the fact that the KSA has embassies everywhere, and as such they see all the papers. The internet is showing everyone the lack of reporting and as such we all have access to Al Jazeera and Arab News. The idea that these news bringers are backwards was proven incorrect for well over a decade and as such people can look beyond their own papers to get a much better view of what is going on and when the people wake up to some media whoring to digital dollars, they could optionally stop looking there for filtered information and look in other places for actual news and at that point the game changes, the axial grinders for the seesaw become no longer needed, but the people employing them will have to keep on paying them, they saw too much. They took calls from stake holders, they took meetings with media parties and they have seen the larger field. I say this not in some speculation, or hiding behind some conspiracy theory. This is simple tactics. The seesaw principle when you start taking notice of all the news that was ‘filtered away’. And when we consider the media greed ‘If it bleeds, it leads’ we see that ignoring international events made no sense. It cannot be because they ran out of space (internet space is obscenely cheap), it cannot be because people did not care (see a casualty and a thousand eyes become instantly interested), someone was filtering. You see tactically speaking Aramco can make a move, or the KSA can force the hand of someone else, and there is every chance that they know who the stakeholders are. So the game is soon coming to fruition and I personally believe that any Nuclear accord that is too weak will suddenly get the larger interest of the KSA and the state of Israel. Thee two settings are a larger play and the media ignored these settings for too long. How long can you say ‘nothing is happening there’ whilst smoke is coming from there? How long until people will take another look via other means? I think we are getting close to that point at present, but that would be speculation. There is no way to tell at present, but the fact that those we trusted to bring us news, those who seemingly shifted to bring us presentations, those are becoming a larger problem and the people seem to be walking up to that part, but that could be my delusional insight in this. 

There is a larger play afoot and we are not given the real deal, a mere ‘Putin is testing ‘how far he can push us all’, US tells Ukraine crisis talks’, not that that statement was wrong, but the story we were given by many over time is watering down, it is how the game is played say some. I wonder what else we are not told, and that might just be me.

Leave a comment

Filed under Finance, Media, Military, Politics

When a war is called

The thought started when I saw an article by Yahoo Finance pass by, it was named ‘Why Saudi Arabia May Be Forced To Start Another Oil Price War’, two thing came to mind, it is October, and the northern hemisphere is now going into Winter, it seems trivial, but 700 million Europeans and well over 50% of Americans (and also all Canadians) will need heating and oil is more often than not the essential fuel used. The second part is seen but perhaps missed, as we are given “The threat of European lockdowns is real, hitting global demand again while taking a heavy toll on the economy. Financial easing and subsidies worldwide have kept some demand in place, but the financials of major economies are bleak, which can be seen in the rising level of unemployment” what everyone forget is that in the past most of these people were in offices and shops, places of employment. During the lockdown all these people will stay at home and their houses, places that usually tends to be 5-8 degrees colder because they are at work, these houses will now need heating for all that time. In addition there are in the US over 1,050 power plants operated by oil, all these houses need power, all whilst many shopping centre needs less power, yet the need for power and heating will seem to rise, especially when the cold days come through. Even as some question “Global oil storage levels are still high, while the world is awash with oil and gas. International traders are openly questioning the current OPEC+ move to put extra oil on the market”, I am not convinced. Yes there is less fuel needed for jets, but jetful is only 2% of crude oil production, so I have been told in school (a long time ago), yet power and heating needs oil and there will be a shift, summer is gone, autumn is squarely here and we see a few hundred million places now needing power and heating most of the day, which stands against the needs of a working environment. As such the statement seen here “Saudi Arabia, supported by its main ally UAE, and Russia are both looking at a financial crash of unknown magnitude if oil markets don’t recover soon. Oil prices are currently too low to sustain the government strategy of both nations” becomes one of debate. I cannot counter it, but when we think things through, oil needs are essential during winter, and I see it, these people will not need gas for cars, so where is the tradeoff? Well, mot of these houses still need food, so the car remains used, to a lesser state. Yet heating and power will be needed to a much larger degree, so even as we can assume to some degree that there will be a lesser need, it will at best be a ‘somewhat lesser need’, in light of all this, why is there a call for a war (well, a pricing war)? The article still gives a truth, several in fact. We cannot disagree with “Without higher crude oil prices, not only is the Kingdom’s flagship Saudi Aramco suffering but most government projects too. The world’s largest oil company has already put several major new projects on hold, while at the same time reassessing investment levels of others. High-profile offshore projects” yes there will be an impact, and the impact will optionally continue into 2021, yet the larger stage is not how Saudi Arabia will do, the question becomes when the EU collapses after another lockdown, how will those government foot the bill for essential services (power and heating) when the trough (finance coffers) run dry?

So as we get to “If the threats made by Saudi Arabia’s Minister of Energy Prince Abdulaziz Bin Salman that the Kingdom has had enough of profit takers, short investors, or lack of support of members, are to be taken face value, the market should not be surprised if the OPEC leader decides again to go its own way. A more aggressive move by Riyadh towards market-share or oil prices is not at all unthinkable”, I start to wonder who the writer Cyril Widdershoven is and I see that he is linked to Verocy and that he oversees Mediterranean Energy Political Risk Consultancy. As such, I wonder if he hopes to create a pre-creationary wave, or that there is a stage which in the article is assigned to Prince Abdulaziz Bin Salman. I do not know (I honestly do not know), yet any quick or knee-jerk action required by others, tends to set a different stage in all this and when someone gives me ‘Why Saudi Arabia May Be Forced To Start Another Oil Price War’, I tend to wonder why something like that I needed. Yes from our side a lockdown is not good news, but who considered that they would be warming the house an additional 12-15 hours each day? 

It is well over half a day more, as such heating is required, as well as additional power, because these people will need their TV, their computer, their radio, their console and in many houses they need need close to one of each and with an additional 12 hours a day that drives up the need for power too. So yet there is every indication that there is some level of downturn for Saudi Arabia, I am merely not convinced that it will be as bad as me predict, yet I am willing to admit that I might be wrong. So I will let you do the math on what you need in your house, and consider, will it be more or less than before and when you consider that part, consider the thousands, nay millions of additional homesteads in Europe, the US and Canada. That is what went through my mind, and overall there is an impact for Saudi Arabia, but I am not convinced that it will be as dire as some say. When someone calls for a pricing war, they tend to multiple motives, that I what history taught me, I am merely thinking things through, but as stated, I might be wrong.  

Leave a comment

Filed under Finance, Politics

Name of the game

We all played monopoly, we all played a number of board games where we were taught that there is a balance, a level of fairness about. The game Hotel lets us build a hotel, get a permit, get clearances and as the players get to our hotel, it will cost them, there is a similarity to monopoly, but Hotel plays a lot faster. We all agree that there should be balance in all this. Now let’s take you back 15 years ago, suddenly we are forced to pay an additional fee to be allowed on an airplane. The issue was that fuel had suddenly doubled in price. Fuel is the strongest and clearest view towards greed and exploitation. Forced in cars we are pushed towards spending more and more on fuel. The entire virus situation has changed the position of the seesaw, now there is another matter and the traders who have filled their pockets for decades are now in another stage. So when we are told “US Senator Ted Cruz told the Saudis to ‘turn the tankers the hell around’ on wednesday” we get the first indication on the support that politicians give the oil barons in the US. And as we are told “traders have scrambled to get out of the contract to avoid taking delivery of barrels because of a lack of storage”, it is another example of short sighted spreadsheet thinking, oris it? I will accept that the entire Coronavirus situation is totally unforseen, yet in all this, the speculators and traders are seemingly getting support on both sides of the seesaw,and that is not right. It is as I personally see it, just another version of ‘too big too fail’, and the approach that banks used before, now also applies to traders. They might make a statement on ‘stopping Saudi Shipments’, yet the opposite also remains true, if the Saudi government decides to deliver merely 80%-90% of the normal shipments for the next two years, the impact will be disastrous, fuel prices will go beyond insane and the US government only has its own shortsighted thinking to thank in that case. So as Ted Cruz ‘hides’ behind “this is SEVEN TIMES the typical monthly flow”, I merely ponder the question, what did the original contracts say? We heard last year that the Saudi’s were ‘told’ to increase production. Perhaps the Saudi government, or an official at Aramco might be kind enough to put those contracts on the internet for all of us to observe. Is it not interesting that oil ha to be ordered?  So where is that purchase order? I reckon that Aramco could optionally store some of that oil in Rotterdam, the petrochemical plants there have lots of storage (I do not know how filled they are), the Americans would have to pay as they refused the ordered delivery, so the ships would have to go via an American harbour towards Rotterdam with alternative routes to Hamburg, in the end these places would end up with free oil, America has to pay for its contracted purchase of oil. 

And I get it, no one saw the Corona issue explode the way it did, but that is the nature of the game, win big, lose big, but too many people won’t allow for the lose big and to some degree there are situations that can be adjusted for, but the need for 2 million barrels of oil per day, now in a nation where there is a lockdown, and not just in the US, all over the world, things will have to give in, yet what the media reports a whole range of wrong actions are being taken. So as we see in the Guardian ‘Trump considers block on crude oil imports to prop up US markets’, so that might be the short term, but consider that the Middle East decides due to these actions to limit export to the US to 80% of nominal, or what was initially agreed on. On one side, the Middle East takes a hit, on the other side if that limit applies, by the end of the year, heating and car fuel will go through the roof, how will that come across? And when it comes to ‘exploitation’, consider FXCM.com “Discover Potential opportunities and Trade your Opinion 24/5. Fast Execution and low Spreads. Trade Oil, Forex, indices and more” yes these traders had all kinds of options, but now, they need to get out, they do not want to pay the ferryman. I accept that, because the entire Corona issue could not be predicted, not to this degree, but how often do we get to hear, ‘there is one winner and one loser’ and this time around Wall Street (to name but a financial dimension), gets an invoice it never saw coming. Not just Wall Street, the financial districts on a global scale are getting a pummeling it has never had before. Is it just? That is a moot question, it is not about justice, there is no just, this is about the contract of oil delivery, they have pushed in the past again and again and the short story is, where are the contracts that the US has with Saudi Arabia? Last year they wanted it cheap, they wanted more and they demanded it their way. Now they have to pay.

Justice is not part of the deal, it never is when Wall Street potentates are involved. So why is it important? The issue is not merely the oil, there are all kinds of long term impacts on goods and manufactured items that will impact our lives, yet the oil traders demand their full margin of profit, even if nature banks against them.

As I see it, and under the present situations (as far as the information is known to me) the entire response from Ted Cruz was stupid, plain and simple. He turned to emotion whilst this was about a contract, is there a contract, is it valid? None of the media reports on this. The fact that a boat representing $50 million in goods leaves a port implies that this a contract or a purchase is attached to it, if not, Ted Cruz still does not have a leg to stand on, because he never made mention of that, politicians hiding behind emotions and outbursts tend to have lost the higher ground and it shows here.

And the media is (as I personally see it) in on it, none of them are asking about the contracts, no one is looking at the oil contracts whether Saudi Arabia is having an alleged hostile act, and in this, the turnabout is harsh, when Saudi Arabia limits delivery for years, the US will have a massive industrial problem. Is that not an interesting view? In the entire oil contracts, I saw nothing on the BBC, the Guardian, and a few other papers too, there is no show of the contracts and perhaps you remember that no one ships $50 million in goods unless there is a contract or a purchase order. It is not about the dumping, it is about the paperwork around it and no one is asking.As I was watching an interview with Ted Cruz, I see that he is in a bad place, his state (Texas) is the oil producing heart of America, they do not like the situation and I agree that he must do what is best for his constituents, yet in all this someone signed a contract with Saudi Arabia (a fair assumption) and no one is asking for that document, not even the media, is that not surreal?

If we are going to hide behind emotion with the hope that the invoice flys by, we ned to realise that this will hit on the flip side, and the consequence of 80% delivery after Corona is equally dangerous, but if this is a game, you should accept a lack of foresight attached to this, in business there are purchase orders and sales contracts, Especially in oil where prices can go through the roof, in this case the oil traders will take a hit unlike they have ever had, it comes with those 7 figure bonuses.

At some point regression to the middle also indicates that profit falls can fall to zero. Those not seeing that were standing on a bear trap hoping no bear would come by as they were unable to move and optionally unable to flee the environment.

 

 

Leave a comment

Filed under Finance, Media, Politics

The assumption of right

This happens, it happens almost every day and we all (including me) see that happen. My view was that oil prices would go up. It is a logic set to demand and supply, a basic principle. As OPEC cut production by 1.2 million barrels a day, we would have expected a rise, maybe not directly, but overall when you get less of a product, the prices rise. It is the basic foundation of commerce; shortage tends to drive prices up. Yet a Forbes article proves me wrong (at https://www.forbes.com/sites/gauravsharma/2018/12/10/opecs-output-cut-not-enough-to-provide-short-term-70-oil-price-floor/#668312a8d58d).

This is fine, I never proclaimed to have all the answers, yet it does seem odd that less oil still drops the price from $80 to $51 in one month, and the logic is gone at my end of the table, yet I also know that oil prices are a little more complex, so I took this moment to learn a little. Gaurav Sharma gives us: “oil price is not just a story of supply; it is also a story of demand“. That part makes sense, yet this part only gives rise to changes if demand dampens and dampens by a whole lot. We see that with: “It cannot be ignored that Eurozone growth continues to disappoint, global trade is decelerating and China’s slowdown is a visible fact, and not just a forecast. We haven’t even mentioned the words “trade wars” and a prospect of further U.S. interest rate hikes“. Yes, so far I am on board, yet does that dampen the need for oil to THAT degree? This is precisely the setting when we consider: “If anything OPEC’s move provides U.S. drillers with a further incentive to pump more, and they already are, having made America the world’s largest producer of crude oil.” This implies that the need is changing; America needs less as they become self-reliant more. This explains the setting in the short term, yet it also gives rise to other dilemmas. As the US is using its own stock to keep cheap oil, we also see the change in the dynamics. Less money in the treasury through cheap oil, more costs (and optionally more jobs mind you), yet the budget and shortages of America (like $21 trillion debt) now has another not so nice tail. The interest on 21 trillion can no longer be fuelled with fuel. With a downwards economy, the debt will rise a little faster and there will not be anything left for infrastructure. Now, in this case none of this is the fault of the US Administration, or the current administration to be a little more precise. There is a lot wrong as the Clinton administration left the nation with surplus. I am not ignoring that 9/11 changed the game, yet the Obama administration had a clear directive to do something and that was not done. We can argue whether they had the options or not, we know that the war on terror has had a long-lasting impact. And the downward fuel price does not help. Yet cheap fuel is good for all the non-petrochemical industries and the people requiring cheap oil for heating.

The writer also gives us: “As things stand, a sustainable $70 oil price doesn’t look certain at all for 2019“. OK, I can only support that for as long as the US can keep up with the reductions that OPEC and Russia implement, when that stops working prices will go up, just how fast is unknown. It depends on the current storage and demand and I am not certain that this will not bite in 2019. I cannot academically argue with Gaurav Sharma and his 20 years of experience. His point might be valid, yet the Economic Times gives us: “WTI is forming Doji candlestick pattern and also near its long term Fibonacci retracement. Both are positive signs for crude oil prices“, If this happens within the next two weeks, my predicted increase of 15% comes true. Yet how is that chance? Focussing on merely my point of view tends to be delusional, which is why I liked the view by Gaurav Sharma. He gave me something to think about. It is Mike Terwilliger, portfolio manager, at Resource Liquid Alternatives, in New York who gave us (last week): “It’s a stunning market backdrop where everything from the adjectives used by the Fed chairman to whom is appointed head of trade negotiations can roil the markets. While the macro backdrop remains firm, with strong earnings and historically low unemployment, sentiment is unquestionably vulnerable. That would, in my view, fit the definition of an opportunity – a disconnect between the underlying and perception.” (at https://economictimes.indiatimes.com/markets/stocks/news/us-wall-st-tumbles-growth-trade-unnerve-investors/articleshow/66946928.cms)

I have always considered and known about ‘the underlying‘ and or versus ‘perception‘, no mystery there, yet are there factors we see to forget about? Part we get from the Guardian (May 2018) when we were given: “Demand is expected to average 99.2mb/d this year.” I am adding the part where that demand is not going to diminish over at least part of 2019. Even as we see more and more drive towards sustainable energy, most players are still all about presenting and not completely in the realm of achieving, hence oil demand remains stable (as far as stable tends to be), in addition we need to look at the oil futures. S&P global (at https://www.spglobal.com/platts/en/market-insights/latest-news/oil/121018-crude-oil-futures-stable-to-higher-on-opec-production-cuts) gives us: “risk sentiment remained heightened after US Trade Representative Robert Lighthize Sunday said that he considers March 1 to be a hard deadline for a trade deal to be reached with China and that tariffs will be imposed otherwise“. So basically the futures are rolling towards the up side making me correct, yet as long as the US can keep up with demand and as long as we see this continue, oil will remain stable and not push beyond $60 per barrel in the short term. MatketWatch is actually more optimistic towards the consumers of fuel. With: “Oil futures fell Monday to settle at their lowest in about a week on growing concerns surrounding a slowdown in energy demand“.

Why do we care?

We care because the drop in demand as projected and given by several sources is also the economic indicator that not all is well. This is seen in several sources. Goldman Sachs, via CNBC gives us: “We expect the U.S. to slow down to less than 2 percent by the end of next year and as a result of that you could see the market getting quite scared“, yet would be an overly optimistic view. We saw last week that the US Economy gained 43,000 jobs less than last year giving us a much less optimistic view on that part of the equation. Apple is falling down, tension on the Economy (specifically the US economy) is on the rise, some might say sharply on the rise. In addition, the Financial Post gives us: “Wall Street ignored trouble signs for months. Now it sees risks everywhere Markets face stomach-churning swings as economic uncertainty grows“. Even when we stick to the headlines, it was nothing really breathtaking. The US trade deal with China, the growth fears in the EU, they all link into a negative setting of the economy. Not recession, yet a negative impact due to no growth (too little growth is more accurate) and the events in France do not help either. In addition, there is now a realistic chance that Italy is entering recession territory. Even as it is possible to avert it, it will means that the Italian economy will end at a standstill (which is not a recession), yet in all this, with the Two large EU economies at 0 (France and Italy), it falls to Germany to bring home the bacon and sausages, implying that they are all eager and desperate to sink any notion of Brexit as soon as possible. As we see the jesters giving us that the UK can exit Brexit, that whilst they are seemingly unable to get a handle on the ECB and their everlasting lack of transparency, so whilst we see (at https://www.euractiv.com/section/politics/news/ecb-chief-rejects-chance-to-adopt-eus-transparency-register/) the unsettling part “The European Central Bank’s President Mario Draghi has rejected calls from European lawmakers to have financiers who give advice and feedback to the ECB register as lobbyists, saying they merely provide “information”.” I merely see an extended reason to pursue Brexit stronger. I actually am in a state of mind to demand the right for targeted killing these so called ‘informers’, which is a massive overreaction, yet the need to get these information givers listed next to the lobbyists is becoming more and more essential. If any nepotism, or if any under the table deal is found within the EU, their exposure is essential. I believe that this will flush greed out into the open rather fast, but then I am merely one voice in all this.

It connects

You see, the QE is supposed to come to an end this Thursday, or at least the formal announcement to end it at the end of this month. However, when we consider Reuters: “the economy weakening, trade tensions darkening the outlook and headwinds still on the horizon in the shape of Italy and Brexit, financial markets are looking ahead to next year and just how the ECB will protect the bloc from a severe downturn“, not only does the rejection to officially end QE have an impact, it also means that suddenly demand for things like oil will suddenly spike, that means that reserves go down, oil prices go up and there the cost of living will impact harshly on Europe in winter and as such on American soil the need for a price hike will not really be one that people will cherish, and when we add to that the part that Germany also has a depressed economy to look forward to, we see the three great economic players all in a diminished form, implying that the economy will tank on the low side not merely in this year, it will have a depressed form of growth in 2019 as well. There will be all kinds of lessened good news, whilst the good news is not that great to begin with. It gives rise to the point that I might be wrong on the oil price as I expected it to grow by 15%, it might still go up yet not that much and it will come at a really high cost this time around.

Right or Wrong?

It does not matter in this case; the issues seen are openly visible and heralded throughout the net, magazines and newspapers. The issue of ‘the underlying‘ and or versus ‘perception‘ is at the heart of the matter. Even as energy and oil prices show certain paths in all of this, it does not make it a correct view (which is neither right not wrong), what we perceive in opposition to the underlying elements connected, that is the bigger picture of impact. It is also a new stage. As the politicians are fighting over the carcasses of opportunity and bonus structures, we see that Germany has a few other elements in play. It is not merely the manufacturing part of it all, it is infrastructure as well and that is where we get my earlier statement, a statement I gave 3 days ago in ‘Behind the facade‘ (at https://lawlordtobe.com/2018/12/08/behind-the-facade/), if Huawei (minus one arrested exec) shows their value in Germany with the given quote, which came well over a day after my article (at https://foreignpolicy.com/2018/12/09/germany-is-soft-on-chinese-spying/), where we see: “In the terms of reference published last week by the German Federal Network Agency for its 5G auction, security was not even included in the conditions for awarding the contract. In October, the government announced: “A concrete legal basis for the complete or partial exclusion of particular suppliers of 5G infrastructure in Germany does not exist and is not planned.”“, as well as “For Deutsche Telekom and other network operators, the situation is clear: Huawei offers innovative and reliable products at highly competitive prices. Legally, Deutsche Telekom does not bear any liability for the security risks associated with Huawei technology. And the company does not care about the fact that Huawei’s price advantage is the result of a highly skewed playing field in China. In the world’s largest market, domestic providers control 75 percent of the market, giving them unbeatable economies of scale“, we see the hidden trap that some people related to Mr S. Tupid are now in hot waters (optionally with the exception of Alex Younger). Not only have they not given any evidence regarding the security risk that Huawei is supposed to be. Foreign Policy also gives us: “Given the massive cybersecurity and national security risks, the only responsible decision is for Berlin to follow the Australian, New Zealand, and U.S. lead and ban Chinese providers from the German 5G network“, yet there is no evidence, that was always the problem and so far there is more and more indicators (especially in Australia) that the claim “In none of these three countries will domestic suppliers be the primary beneficiaries“, which I regard to be false, on paper it does not impact ‘primary beneficiaries’, but it does harshly (in Australia at least) negatively impacts the competitors of Telstra, which amounts to the same thing (TPG, Vodafone, Vodafail et al). And when we go back to my writing in ‘Behind the facade‘, where I give the reader: “You see, Huawei can afford to wait to some degree, as we see the perpetuated non truths of devices being pushed forward, the replacements better do a whole lot better and they are unlikely to do so. When we see another failure in 5G start and we see transgressions and those screaming that ‘Huawei’ was a danger, the moment they cannot prove it and their ‘friends’ give us a device that is malicious, the blowback will be enormous. There is already cause for concern if we go by CNBC. They give us a few points that show the additional fear that America has on Huawei“, when the intrusions are not proven and Huawei shows to be a strength for consumers and businesses, heads will roll, there will be a demand for blood by the people, which means that politicians will suddenly hide and become ‘on the principle of the matter‘ and transform their perspectives into in all kinds of lethargic versions of denial.

That too is impacting the economy, because those on track to start pushing out new innovations on 5G will have a clear advantage over the other players and that pushes for success even more, will it come to pass? I cannot tell as there are too many elements in motion and the policies now in place are off course under optional revised in the future as Annegret Kramp-Karrenbauer will replace Angela Merkel if her party is re-elected as the biggest one.

We are seeing a few versions in the assumption of right, and we need to realise that the assumption of right and speculative version of what will happen overlaps one another, but they are not the same thing. States of delusion tends to be an impacting factor. Am I delusional to think that big business gives away greed? Am I delusional to consider that Huawei is not a danger? If we go by ‘the underlying‘ and or versus ‘perception‘ I am correct. You see, would China endanger the true power of economy where Huawei would become the biggest brand on internet and 5G requirement, using it for espionage when there are dozens of other methods to get that data (including Facebook policies implemented by Mr S. Tupid and Mrs M. Oronic). As this sifting of data exists on many levels in several ways, not in the least that the overly abundance of TCP/IP layer 8 transgressions happening on a daily basis and at least twice on Sunday), when we realise that, why would any Chinese governmental (namely Chen Wenqing) endanger a Chinese technological powerhouse? The logic is absent in all this. This gives us the light of Alex Younger opposing the others. He gave a policy setting of national need, whilst the others merely voiced all this ‘national security‘ banter on risks that do not even exist yet. Especially when we saw the Australian version of: ”5G will carry communications we “rely on every day, from our health systems … to self-driving cars and through to the operation of our power and water supply.”” Perhaps anyone can tell me how many self-driving cars there are at present or within the next 10 years?

And none of these клоуны (or is that Sarmenti scurrae) considered the step to start with Huawei 5G and replace them at the earliest convenience whilst you work out the bugs of your currently incomplete 5G solutions, the few that are out there for now, a simple business decision that is at the heart of any daily event, including military ones. A nice example there is the ugliest dinghy in US history (aka the Zumwalt class) where we see: “Zumwalt-class destroyers are armed with 80 missiles in vertical-launch tubes and two 155-caliber long-range guns“, which is an awesome replacement from the previous version that was regarded as a Ammo less Gun edition, in the face of continuing budget shortfalls, personnel problems and of course the fact that the previous edition was $1 million per shell, for its smart (GPS) capability. The mere elements that some sources gave out that shooting straight was an ability it naturally acquired as well as the fact that a $440 million ship was not given the budget to get its unique, 155-millimeter-diameter cannon that can shoot GPS-guided shells as far as 60 miles the 600 rounds of ammo at a total cost of $600,000,000. And that is apart from the $10 billion the Navy spent on research and development for the class. So perhaps people still have questions why I considered this monstrosity to be regarded as a ‘sink on the spot‘ project. The fact that The Drive gave us a year ago: “the Navy has steadily hacked away at various requirements, stripping planned systems from the design, in no small part to try and control any further cost overruns and delays. Close-in protection, ballistic and air defense capabilities, and various other associated systems are no longer part of the base design, something The War Zone’s own Tyler Rogoway explained in detail in a past feature, leaving it with limited utility despite its size and cost” (and apart from some minor issue regarding stability and stealthablity which we shall ignore for now) in that light the entire 5G redeployment after the fact and the ability are acquired, tested and evaluated, at that point re-engineering away the advantage that Huawei had built, did that not make sense within 10 seconds?

It is common business practice in IT, and has been for over 2 decades, that is why ASUS and not IBM rules the lay of the desktop land nowadays. so getting even would not have been the dumbest idea either, but no, we see all kinds of unfounded accusations and that is where those people are most likely to lose and out in the sunlight, when they cannot prove that claim, that is when we see on how some elements will soon be disregarded. In this Huawei has a nice advantage in Germany and Saudi Arabia. When they prove the elements there, we will see a large driven technology shift and those making the claims at recent days better have their stories straight.

Yet again, I might be wrong, my assumption of right might get sunk on false premise and nepotism, I do recognise that this has happened before and will happen again.

The assumption of right is at times hindered on delusional thoughts, as well as the need that the other players are straight shooter, and that definitely applies to all politicians, does it not?

 

Leave a comment

Filed under Finance, IT, Media, Military, Politics, Science

The Iranian funds play

Today is all about Iran, the Washington Post and many others are giving the world the information that the previous president misled congress. Yet the Washington Post phrases it as ‘Obama administration misled Congress on possible Iranian access to U.S. financial system‘, they also mention that it is a Republican investigation. There are two issues, right off the bat, even before you read the article, the question becomes, where were the FBI and the CIA in this?

So when we get the first lines with “The Obama administration went out of its way in early 2016 to help Iran recoup previously sanctioned oil revenue stranded in an overseas account after the nuclear deal went into effect and actively misled Congress regarding those efforts, according to the results of a nearly two-year Republican investigation released early Wednesday“, we need to realise that the setting is wrong from the very start.

Before I go there, let’s follow the trail of crumbs that we get offered. next there is “Iran wanted to convert the money into U.S. dollars and then euros, but top U.S. officials had repeatedly promised Congress that Iran would never gain access to America’s financial system“, which is followed by “the Obama administration secretly issued a license to let Iran sidestep U.S. sanctions for the brief moment required to convert the funds through an American bank, an investigation by Senate Republicans released Wednesday showed. The plan failed when two U.S. banks refused to participate” and finally we get: “the revelation is re-igniting the bitter debate over the nuclear deal and whether former President Barack Obama was too eager to grant concessions to Tehran“. The full story (at https://www.washingtonpost.com/politics/federal_government/obama-era-license-aimed-to-let-iran-convert-money-in-dollars/2018/06/06/60be6d36-6971-11e8-a335-c4503d041eaf_story.html) gives us a lot more, but initially, we get ‘The plan failed‘. So this was seemingly (according to a previous Obama official) about the Iranian money held overseas. The issue seems seen with “No one involved seems certain whether Iran has yet received all of its $5.7 billion“, yet as I see it, that does not seem to be the case. When you think this through, $5.7 billion amounts to 11.2 million barrels based on the average oil price, this amounts to funds equal to 26 hours of oil production in Saudi Arabia, 26 hours! Now we are not debating whether Iran is allowed access to the funds, the fact that we see that this much oil (or so little in Saudi Arabia), whilst in Iranian production it amounts to 4 days of oil production is a Joke. Oil still goes to Asia, so all this fanfare for 4 days of oil production? This is about something else entirely, or it is about a very different amount of money. I let you mull that part over, so when we look at the second article (also Washington Post), we see in the article called ‘Secret Obama-era permit let Iran convert funds to dollars’ where we are ‘treated’ to “Iran had been promised access to its long-frozen overseas reserves, including $5.7 billion stuck in an Omani bank“, which we knew to some extent, yet the full economic value is not given, which is also an issue, you see that stuff makes interest, so at that point who gets that money? Is it locked in the Iranian account, or was it the balancing act to the seesaw that is going up and down on €11 trillion in essential European and American debt guarantees? The second article has pretty much what the first one had, but we also see (slightly more clearly) “And when questioned by lawmakers about the possibility of granting Iran any kind of access to the U.S. financial system, Obama-era officials never volunteered that the specific license for Bank Muscat in Oman had been issued two months earlier. According to the report, Iran is believed to have found other ways to access its money, possibly by exchanging it in smaller quantities through another currency“, this now gives us the part (when going back to the first article: “Lew, according to documents reproduced in the report, had been given Treasury talking points explaining the Omani conundrum, he chose not to mention it in a House hearing in late March“, this reference to former Treasury Secretary Jack Lew, where we wonder that if this is about the question, was the question correctly phrased, or perhaps the better setting is, was he breaking any laws not mentioning the ‘Omani Conundrum’?

I cannot state without the full text and even if we agree that there is an issue, we now get back to the very core of the matter. If it involves US Banks and when we reconsider ‘the plan failed when two U.S. banks refused to participate‘, two out of exactly how many banks? That part is also not revealed here. So now we get to the part where it becomes either the US treasury AND the FBI who seemingly did not act here, the Omani Conundrum implies that the CIA turf was trodden on and the communications (in several levels) give us that the NSA ignored it. So what is going on? Did anything actually happen? Because that question is becomes valid when we reconsider ‘the plan failed‘. If that is true, then why is the Washington Post, one of the most revered newspapers in the USA not giving the correct light on this? In addition, the outstanding questions that we get from the mere substance given becomes an issue when we see the words of President Trump “this disastrous deal gave this [Iranian] regime — and it’s a regime of great terror — many billions of dollars, some of it in actual cash — a great embarrassment to me as a citizen and to all citizens of the United States,”. Yet how much money was actually released, through the deal and from 2015 onwards? None of that data is available through the articles. So what exactly is US congress playing with now, because this all looks like a really loud smokescreen, all emotion and no contributable facts on the matter. How many banks were part of it (and their names), which two banks refused (double plus points for them two) and in light of merely one $5.7 billion source we need to see the scope of the money, especially in light of the setting that Iran is even now shipping oil to Asia. Are those not valid questions? In all this, where were the FBI and CIA when this was going down and more importantly why is there no mention of their part in all this, or were they not part of any of it? That is equally an issue, because if there is evidence that they were in different states of activity and actionable requirements regarding Iran during the two presidencies, the people have an equal right to know, do they not? You see, in the larger scope that matters, because the Yemeni issue is covering two presidencies, so if (a very clear if) the CIA was less vigilant during the previous presidency, it might also explain a few things on how missiles are getting shipped from Iran to Yemen, if the manifest states 1013 barrels of oil for humanitarian aid, it might explain a little more than we bargained for. Now the last part was speculative and knowingly incorrect, yet the question remains valid. This was not some article from the enquirer, or the Canton Cherokee Tribune, it is the Washington Post. In many (global) cases that newspaper is seen as gospel right next to the Financial Times, so when two articles give us so many questions in all this, I need to wrap my head around the option that Martin Baron is either on vacation or perhaps down with the flu. The man who inspired Tom McCarthy to make Spotlight should have a better grasp on the entire Iranian fund issue and how it should be made visible in my Hummer opinion.

Because behind all this is not merely the oil, or the Iranian uranium enrichment plans. It in equal measure gives another light that we get from “The draft involved a general license, a blanket go-ahead that allows all transactions of a certain type, rather than a specific license like the one given to Oman’s Bank Muscat, which only covers specific transactions and institutions“, you see, if that is in play and when we remember the G30 bankers group, the one that got some limelight, for ONE DAY. After that all the media dropped the issues when the people were given the sight of Mario Draghi being a member of this insiders only club, a club that he had to give up and no one (except for me that is) followed up on that. All the media left it alone. So when we see that part from April 18th 2018, where Reuters and the Financial Times give us that he would remain a member, the ECB and others never acted on it and silently wait it to go away, now we see the Omani Conundrum issue and I have to wonder, as bankers will do trade with anyone, what licenses are out there that no one knows about, more important, whoever the owner of the funds are that they get to play with ahead of all other banks, with close to €3 trillion in extra printed money for the game of bonds, in all this, what else are we not seeing and as this optionally directly reflects on Iran’s and all the billions we are left unaware of, how is it that the Washington Post seems to not care (or rather stated, believingly unimportant issues that are therefor not investigated) are out there with two pages set to issues in a setting of ‘the plan failed‘ and ‘at the end of the day, nothing worked‘. Which makes me wonder if any transgression was committed and what it was all about. Time will tell whether we see more revelations tomorrow and more important if it leads to anything actionable, because that will be come the heart of the matter soon enough.

 

1 Comment

Filed under Finance, Law, Media, Military, Politics

The Labour Manifesto

Ed Miliband presented his Manifesto Res Rei. In light of what we here in Australia laughingly refer to as ‘the Labour party’, it seemed like a good idea to take a closer look at the speech. The full speech can be seen here http://labourlist.org/2015/03/miliband-launches-labours-business-manifesto-full-speech-text/.

So let’s take a dip into the claims pool.

‘Playing by the rules and paying the taxes that support our public services’, Really Mr. Miliband? So how will you solve the issues involving Apple, Google, Amazon et al? What measures are currently in play, what measures did Labour in its previous governing term put into play. I say naught!

The second part is found soon thereafter ‘With a government that balances the books, invests in infrastructure and works with you to improve skills and open up more competitive markets‘. The Tories are trying to get the books balanced, which means austerity. Labour had a massive hand in giving the UK that debt, so we can offer that Labour has no ability to balance books and the investment that they talk about will drive the UK into deeper debt.

Then the story changes a little and Ed Miliband goes into waffle mode. We see ‘despite the odds‘, ‘too many obstacles‘, ‘the lack of certainty about the long term‘ and my favourite: ‘Our productivity gap is at its highest level for nearly a quarter of a century‘. That last one is full of fun, because what is it based on? Weighted numbers, a lack of insight or the added anchor of virtual corporations?

Now he gets to the promise: “So we’ll balance the books and cut the deficit every year“, yes, how will you do that by investing and balancing the books at the same time? The current debt spring is loaded, because the UK has to come up 23 billion every year to pay the interest of the current deficit, so good luck with that statement, you do remember that your predecessor was cause to a massive slide in debt Mr. Miliband?

The struggle to find the workforce they need‘, which sounds nice in theory, but many corporations hire young unexperienced people to get away with what some want to slide under that table, when we see the issue where Ross Etherson, who admitted 21 counts of making or supplying articles for use in fraud, cost the NHS more than £37,000, Isleworth Crown Court heard, we clearly see that there are other issues at play, when we take the info from the BBC at http://www.bbc.com/news/10604117, we see that unemployment has steadily dropped under the Tory government. Now, I will in all fairness state that labour was confronted with the 2008 problems, but that mess was not properly dealt with under labour either. The mess left from their debacle 1997-2010 is still getting cleaned up half a decade later.

Now we get to the fishy side of it all: ‘It is a partnership for a purpose. We will give you control of the money for apprenticeships and in exchange we will say that any firm that gets a major government contract will have to provide apprenticeships to the next generation‘. How is this even realistic? Giving control of the money means that all kinds of accounting irregularities are likely to surface, then what? And in regards to ‘major government contract‘ and ‘provide apprenticeships to the next generation‘, how is that not discrimination towards the current aging workforce? In addition, we see that there are situations where apprenticeships are not a solution in the first place, which is just the reality. Consider a new frigate that is getting build with 500 engineers and 10 apprentices on the job, how many delays and what security breaches could the new frigate face? So not apply this rule to all fields? That is just a mess waiting to explode in the faces of those proclaiming it to be a solution.

Then we get (after another wave of waffling by Ed Miliband) ‘the priority for business tax cuts‘, yes, that has always been a good idea, especially as Google and Apple seem to pay 0.1% in taxation. How about infrastructure? Ah, that is next, where we see: ‘That’s why we’ll follow the recommendation of Sir John Armitt and set up a new independent National Infrastructure Commission‘, yes, spending more money on something that will not prove to be a solution, whilst the UK is down a trillion, so at this point, after we saw tax cut and infrastructure and invest, let us remember the earlier promise “So we’ll balance the books and cut the deficit every year“, which I see as:

  1. No balancing the books
  2. Increasing, not decreasing the deficit.

Now we get to the ideological part, which Ed Miliband is of course entitled to: “There could be nothing worse for our country or for our great exporting businesses than playing political games with our membership of the EU“. that is partially true, yet as the EU is unable to muzzle Greece with their flim flam rock band approach of not dealing with their debt and whilst several players are now willing to push Greece into deeper debt, both the UK and Germany need to realise that Greece is getting their credit for nothing and their luxuries at the expense of the other EU nations. How long until it is just safer to let the rest of the EU drown in their inactions against Greece? Which by the way has every likelihood of pushing both Italy and France over their maximum debt threshold, which has massive implications for any member remaining within the EU, all because no one was willing or able to stop Greece?

Now we get back to part of the speech that is an issue ‘Two years of uncertainty in which businesses will not be able to plan for the future‘, how about the fact that most of Europe in a denied recession, due to massive debt dealing is not the way to get any level of certainty? In the Netherlands, unemployment is at 7.2%, In Belgium it is 8.5% and in France it is at 10.4%, so when we look at what business options there are in Europe, we will see a cold turkey that comes home to voluntarily roost in the oven at 190 degrees, because the crispy warmth is loads better than the cold outside, even if the turkey is about to get eaten in the process.

If there is ONE business plan, that that would be the one, where the UK gets by for now, trying to grow, but most importantly is reducing the debt it has, so it does not have to fork out +20 billion in interest to banks for money the Labour party had spent.

So as he goes on reminding us on ‘We need to be a country that rescues our NHS with more doctors and nurses‘, yes, we all remember the NHS 12 billion computer scheme, that did not go too well for all parties involved, perhaps listening to others would have helped the Labour party heaps, but that was in those days never an option, so why trust them now? so the phrase ‘Not what we have seen over the last five years where the NHS slides into crisis‘ is a little misplaced as it was Labour who did messed up 12 billion, an amount that could have kept loads of nurses into jobs and grown the NHS. It was not meant to be!

So when we see the following quote: ‘To carry on with a Conservative plan based on the idea that as long as the richest and most powerful succeed, everyone else will be OK, or a Labour plan, a better plan, that says it is only when working people succeed that Britain succeeds

We ought to consider another option. To cut drastically on medical services for those on drug and alcohol based events. These people only get treatment if they can pay in advance for treatment.

Let’s take on the binge drinking issue heads on!

Those who fail the first two parts are thrown into a drunk tank like in the old days. If they die, well that is just too bad, we can blame the parents, we can rejoice on a growing number of available housing (the deceased do not need them) and the nations has even more jobs available and the cost of the NHS goes down.

Now, it will be fair if you disagree with me on this and I admit that this step is hugely inhumane, but consider: these people cost the society 21 billion on an annual base, which includes the 3.5 billion to the NHS. To protect the victims of their crime and violence, they will be remanded into prisons/work houses. So, you see, production will be better off if we change that workforce too!

Yes, I agree it is inhumane, but why must the people at large suffer for those who think that the rules do not apply to them? I have no issue with these people receiving treatment, however, if you are so willing to binge yourself for £39-£69, you can either fork out the £78 for treatment, or sleep it of in a drunk tank, either way, we reduce spending on NHS, which helps towards the actual spending balance Labour is actively ignoring.

So as I ended the look at the Speech of Ed Miliband, I must conclude that it reads political and in addition, decently devoid of realism. Which is a shame, because UK Business is in dire need of realism, which means the solution will come from somewhere else.

Which now gets us to part two of this event. It seems that Nicola Sturgeon is all about getting Labour into No10. It sounds nice, but how is the Scottish National Party any help there? Now, it is fair that they feel a lot more comfortable with their future if Labour is in charge. It is a valid call to make and it is theirs to make it to begin with. Yet, we must not forget the issues that Scotland is already short 11% on their budgets and with oil prices the way they are, their independent future is a lot less certain. This is a shame and I mean that. I was all in favour of Scotland attracting all kinds of Businesses from all over the Commonwealth to grow their economic footprint. I am still reasonably certain that Indian generic medication could grow all over Europe if they have a foothold in Scotland, which allows easy access to places all over Europe. With Oil being a problem and not a solution, other fields must be tackled to grow Scottish interest and the Labour party is nowhere near able to help Scotland there. If we revisit the issue of balancing the books, it will take less than 6 months for Ed Miliband to find way to move business out of Scotland, just to make his side look better, I wonder if Nicola Sturgeon is realising the trap she is setting herself up for.

So if we look at the Guardian article, which is less than 24 hours old, we see ‘Scotland’s SNP revolution terrifies the main parties’ (at http://www.theguardian.com/commentisfree/2015/apr/05/scotland-snp-revolution-terrifies-main-parties), which is an interesting light to see after the Labour-SNP link. There is one debatable quote that caught my eyes was: “Underpinning these analyses is a barely concealed narrative of contempt, which says they will all come to their senses when they realise there will be no land of milk and honey in a Scotland under the absolute control of the SNP“, this is fair enough, but I do not think that this is due to the SNP, I firmly believe that independence too late saved Scotland, if Scotland had been independent whilst the oil prices went into the basement, the damage would have been unimaginable. I remain in faith that growing business in England and Scotland is the only solution, it will be important for both (mostly Scotland) to look at fields they had not considered before. The Indian generic medicine growth is only one branch. The open remoteness (hence securable locations) Scotland has to offer, could spell interesting times for any manufacturing option that does not require the pressure of London, with added benefit of the lower costs that Scotland brings. Consider the Ferry from Scotland to the Netherlands, opening additional paths of revenue. Scotland can grow options, it is just the question whether the Labour party is truly a solution here.

So as we all get to ponder the choices the voters face for England and Scotland, I do hope that they will all look seriously at these flimsy speeches that rattle on all sides. This applies to all parties, not just Labour!

 

1 Comment

Filed under Media, Politics