Interesting that such nuance was not applied in relation to the Ukraine war.

Instead we saw immediate accusations of 'Russia did it' without any room for doubt. In Gaza it's the opposite - a reluctance to accuse Israel without evidence.

It's almost like Hamas has a long history of launching shitty, makeshift missiles at civilian targets and hiding behind human shields while Ukraine has not.

This post was edited by Black XistenZ on Oct 19 2023 05:06am

Seems Russian army got humiliated (really much)

Escalating and falling.

6:00 & 11:18








This is off topic, and Von Der Leyen is well know for not being that much competent. She's also very much criticized for her weird support to Israel, there's something fishy behind it, but this is not the topic to talk about it.

The nuance here is quickness of public statements.

In one case people seem to rush to conclusions while exercising caution in the other. We have seen many sad examples over the course of this conflict.

US is trying to get access to heavy crudes to replenish the SPR.

Seems like a compromise is being worked out with the Venezuelans. Poor Juan Guaidó, thrown under the bus of history to be forgotten as a mere pawn of US foreign policy.

https://www.reuters.com/world/americas/us-easing-venezuela-oil-sanctions-response-election-deal-official-2023-10-18/

I admit this is not directly related to Russia-Ukraine, but definitely caused by it as US needs a source of heavy crudes as they are running low on Iranian stuff from the 1970s.

Having said that I understand drawdowns have stopped lately as prices have somewhat stabilized.

From the article:

Venezuela is not really a short-term solution.



Fair enough, I indeed think that the West is sometimes a bit too quick to blame Russia for events with unclear responsibility.

I still don't really agree with why we sanction Venezuela. Like I get it that Maduro is a communist and we don't like him but is making the whole country poorer by sanctioning them really a good way to deal with it?

As far as Russia, I read articles that certain blends of theirs are actually selling at par or premium compared to other ones (i.e. ESPO). Discounts on their oil also have shrunk significantly as of lately.




https://www.spglobal.com/commodityinsights/en/market-insights/blogs/oil/091322-fft-g7-price-cap-russia-oil

Then subsequent that article a few days later:



https://oilprice.com/Latest-Energy-News/World-News/Diesel-Shortage-Pushes-Russias-ESPO-Crude-Above-Brent.html

This post was edited by ofthevoid on Oct 19 2023 10:21am

There are specific blends like Sokol and Varandey that always traded above Brent due to purity and absence of contaminants, hence they were never delivered into the Transneft system to be blended into REBCO/Urals (Russian Export Blend Crude Oil).

Urals is basically a blend of all crudes Russia produces and you get a wider spec tolerance as you cannot perfectly predict what you get while buying Urals. Urals goes WEST.

Espo is the same idea as Urals (blend of all crudes), but only crudes that go EAST.

I also see that American banks seem to have been the first ones to jump into financing Russian material again which is raising eyebrows.

https://www.reuters.com/markets/commodities/citi-buys-aluminum-russia-worth-160-million-bloomberg-2023-08-18/

This post was edited by Malopox on Oct 19 2023 12:27pm

Peak to through TLT which is a long dated bond ETF made up of US treasuries has lost approximately 50% since July 2020. That means foreign buyers, hedge funds, pension funds, banks have lost trillions in "fair value" from holding that bond. Boomers and other older people that had the 60-40 portfolio or used target market funds which with time shift towards a more conservative bond leaning mix have gotten absolutely demolished.

This has huge ramifications for our economy as well as our ability to finance and roll debt which will be way more expensive going forward. The largest buyers of US debt China and Japan, have been selling.
Long term rates keeps spiking, both due to inflation but increasingly because of the "term-premium" associated with holding long dated bonds.

This is a much bigger issue but will eventually trickle down to finally put the breaks on unbridled military spending. Hard to tell if it's 2 years, 10 or 20 but it's a matter of time.



https://nymag.com/intelligencer/2023/10/treasuries-are-a-usd24-trillion-problem-haunting-wall-street.html

This post was edited by ofthevoid on Oct 19 2023 01:33pm

My understanding is that these losses are basically a result of marking to market longer dated securities which are extremely sensitive to rates rises as they should be due to the nature of bond math and discounted cashflows. They didn’t “lose” money due to bankruptcy - its just the nature of accounting underlying assets which are rate sensitive. This will gradually normalize as maturing treasuries will be reinvested into higher yielding ones.

I also understand that a lot of countries that historically “recycled” their trade balances into US treasuries have embarked on significant domestic infrastructure projects channeling their excess funds into building bizzaroworld places like NEOM, war with Ukraine or commodities (iron, steel etc) for domestic infrastructure in China.

A better question would be the stability of the banking sector should unrealized losses in mortgages and HTM assets need to be crystallized in a liquidity run which can quickly turn into solvency issues (eg SVB). Will BTFP be enough for the next round of illiquidity events?



This post was edited by Malopox on Oct 19 2023 03:00pm