Geopolitics and the global economy

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Frenchie
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Re: Geopolitics and the global economy

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He said that he would undertake the necessary studies in the course of his mandate. So we can think of a second aircraft carrier after 2022. The construction of this aircraft carrier could thus begin in 2022, for commissioning in 2030.
The withdrawal of the service will be effective, at the latest, in 2041 for the CdG, so we would have two aircraft carriers for ten years. Little prayer :D

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ArmChairCivvy
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Re: Geopolitics and the global economy

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Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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Re: Geopolitics and the global economy

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And The Guardian seems to think the uplift in production comes from the shared Qatar/ Iran resource?
" Qatar denies supporting extremists and has defended its warm relations with Iran; the two countries share a massive undersea natural gas field."
In effect, shattering the OPEC cartel and production limits, as OPEC is just about oil, but in the medium term gas and oil prices tend to equalise when adjusted for calorific value of units of measure for production.
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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ArmChairCivvy
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Re: Geopolitics and the global economy

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Worthwhile, if not to read, at least to leaf through as a huge number of competent witnesses were called to put the publication together:
In this report, the Committee considers the factors that have contributed to the decline in the EU-Russia relationship, attempt to draw lessons for the future, and consider how the EU and its Member States should respond to a changed geopolitical landscape. The Committee also asks how the EU and Member States should engage with Russia in the future

The "committee" becomes more understandable from the book identification info:

The EU and Russia: Before and Beyond the Crisis in Ukraine
Great Britain. Parliament. House of Lords. European Union Committee

The Stationery Office, 2015 - Business & Economics - 123 pages (HL 115)

The great "crisis" as to the sanctions relating to where the pipelines for (the same!) gas from the East (Azeri as well as Russian) should be drawn would draw a lot of backgrounding from the discussions (yes - they did invite "opposing " camps - academic, though - to present their cases).
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

Frenchie
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Re: Geopolitics and the global economy

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This directly affects Germany who wants to build a pipeline across the Baltic Sea.

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ArmChairCivvy
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Re: Geopolitics and the global economy

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Frenchie wrote: build a pipeline across the Baltic Sea.
There is one in place already. The thing about this one (n:o II) is that it can supply 36 million German households... if you take a v conservative 2.5 people per household, add the previous one on top - there aren't enough Germans!

So the point is them becoming the hub; who would be left (perhaps not totally) without; but having much less political leverage? Ukraine, Poland... and in the future those other countries of Three Seas partnership (where the pipeline through Turkey to Italy would in a "Trans-Adriatic" way continue on, to those countries).
- the sudden love between Russia and Turkey may have much to do with having leverage over this southern circumvention. - Turkey will start to look important again - after all the misadventures in the near-neighbourhood they have had lately - and Azerbaijan stays in the Russian orbit. That is, until the pipelines turn the flow to China (Russia is already paying 100% of the construction of their pipelines to China, to sell gas - on the cheap - over a 25 year contract period and have at least a few $$ coming in, should the sanctions build up to be about more than just capital goods, so far just preventing the "best" future from being built).

Now, or rather in the future, Russia can turn off the gas pipelines to the mentioned countries and as Germany and the other countries that will get their "surplus" would not freeze (were it happen in the winter, as it invariably has, in the past) "no one" would care too much :o
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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ArmChairCivvy
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Re: Geopolitics and the global economy

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Shell CEO: Lower oil prices for ever
Get fit for forties (goes for states too, not just oil companies)
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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Re: Geopolitics and the global economy

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Billions and billions of money was spent by the "West" - a US prgrm essentially - to safely collect and neutralise the nukes left in Ukraine and Kazakhstan. But according to this story in The New York Times (which Ukraine says has been planted by Russia, but could well - actually - be a story of some "private enterprise"), ICBM rocket engines were missed out, on the assumption that the states had turned stable and had control:

", the North [Korea] turned to an alternative font of engine secrets — the Yuzhmash plant in Ukraine, as well as its design bureau, Yuzhnoye. The team’s engines were potentially easier to copy because they were designed not for cramped submarines but roomier land-based missiles. That simplified the engineering.

Economically, the plant and design bureau faced new headwinds after Russia in early 2014 invaded and annexed Crimea, a part of Ukraine. Relations between the two nations turned icy, and Moscow withdrew plans to have Yuzhmash make new versions of the SS-18 missile.

In July 2014, a report for the Carnegie Endowment for International Peace warned that such economic upset could put Ukrainian missile and atomic experts “out of work and could expose their crucial know-how to rogue regimes and proliferators.”

The first clues that a Ukrainian engine had fallen into North Korean hands came in September when Mr. Kim supervised a ground test of a new rocket engine that analysts called the biggest and most powerful to date.

Norbert Brügge, a German analyst, reported that photos of the engine firing revealed strong similarities between it and the RD-250, a Yuzhmash model."
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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ArmChairCivvy
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Re: Geopolitics and the global economy

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ArmChairCivvy wrote:Shell CEO: Lower oil prices for ever
Get fit for forties (goes for states too, not just oil companies)
Well, the fixing of the market by Russia and the Saudis together has somewhat worked over the last year (the Saudis switched to targeting Iran, by discounting in their export markets), Mr. Putin is about to be sworn in once again, and... (No! But, rather)

The head winds are due to start soon, in 2020
"The IEA has forecast that growth in non-OPEC supply--the US. Canada, Brazil and Norway--will be enough to cover the growth in global oil demand. If I were OPEC I'd start considering suicide at this point. Sure, it's only a forecast and nothing is certain."
- Which is why the "start considering" turn of phrase
- no nukes pls; too much collateral damage

The IEA annual five-year outlook published as Oil 2018 on 5 March also gives a potted history of the fundamental change in the market (US National Security Strategy termed it "Energy Superiority" but did not spell out how it would be used):
" In early 2018, the situation is reminiscent of the first wave of US shale growth that, riding the tide of high oil prices in the early years of this decade, made big gains in terms of market share and eventually in 2014 forced a historic change of policy by leading producers. Today, having cut costs dramatically, US producers are enjoying a second wave of growth so extraordinary that in 2018 their increase in liquids production could equal global demand growth. This is a sobering thought for other producers currently sitting on shut-in production capacity and facing a renewed challenge to their market share. Another sobering thought is that it is not just a matter of production: trade patterns are changing. Recently we read of a shipment of condensate from the US to the UAE. Such a development would have seemed incredible a few years ago, now it looks like the shape of things to come."

There are states in Europe that have followed Ukraine's efforts to diversify away from total energy dependence and many of them were sitting in the audience for this speech:
https://www.euractiv.com/...s.../trump- ... aw-summit/

"Jul 3, 2017 - US President Donald Trump plans to promote US liquefied natural gas (LNG) exports at a meeting [next] Thursday (6 July) in Warsaw with a dozen leaders from ... In Warsaw @potus will speak to 12 leaders of 3 Seas Conference on energy security, highlighting the first delivery of American LNG!
- a different audience from that in Hamburg G20
- but as a block, an important one
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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ArmChairCivvy
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Re: Geopolitics and the global economy

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ArmChairCivvy wrote:the Saudis switched to targeting Iran, by discounting in their export markets
The game is building up:
"Mr Rouhani also scoffed at Mr Trump's threat to halt Iranian oil exports, saying: "Anyone who understands the rudiments of politics doesn't say 'we will stop Iran's oil exports'.

"We have been the guarantor of the regional waterway's security throughout history."

Mr Rouhani has suggested Iran may block Gulf oil exports if its own trade is disrupted, a proposal backed by the country's supreme leader Ayatollah Ali Khamenei.

Iran's oil exports could fall by as much as two-thirds by the end of the year because of new US sanctions, putting oil markets under huge strain amid supply outages elsewhere."

He also warned Trump not to step on lion's tail (a better turn of phrase would have been the Chinese one: If you mount a tiger, for a ride, be sure to travel all the way - as it won't end nicely, should you decide to step off in the middle of it).
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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ArmChairCivvy
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Re: Geopolitics and the global economy

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Aside from oil (in tankers, for us also LNG) possibly (as per the above) not flowing, this is quite interesting:
https://pdf.reuters.com/pdfnews/pdfnews ... EIMAGE.jpg
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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ArmChairCivvy
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Re: Geopolitics and the global economy

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A good thing it was that the National Security Strategy that the Trump administration released at the end of 2017 was well advanced when he was still settling behind his desk. The document frames rivalries: with China as Strategic Competitor, Iran as Irritant, and Russia as Potential Opponent and lumps them under the banner of a “fundamental contest between those who value human dignity and freedom and those who oppress individuals and enforce uniformity.”

Carnegieendowment.org has noted what has actually happened since "efforts to advance democracy—however uneven and imperfect they historically have been—were one of three interlocking U.S. pursuits, alongside protecting an open international economic system and building a global network of security alliances. Trump rejects all three as a “bad deal” or as irrelevant [...] in his transactional, each-country-for-itself approach"

The order in which the three countries are listed is interesting: China first (pivot to Pacific and all that... "old hat").
Iran before Russia? As the Middle East is making headlines daily, let's revisit what happened wrt Russia between Quebec (G7) and Helsinki (Summit). Bloomberg reporters were on Air Force One in that period https://www.bloomberg.com/news/articles ... rimea-grab

"President Donald Trump left the door open to recognizing Russia’s annexation of Crimea, telling reporters that such a move would be up for discussion when he meets with Russian President Vladimir Putin next month.

“We’re going to have to see,” Trump told reporters Friday on Air Force One when asked if the U.S. would accept Russia’s claim on the territory it seized from Ukraine in 2014.

[...]

Trump has shown a willingness to embrace positions favored by Russia. During the Group of Seven nations summit in Quebec earlier this month, Trump mentioned that Russia has invested heavily in Crimea since the annexation.
“They’ve spent a lot of money on rebuilding it,” Trump said on June 9, declining to criticize Russia for annexing its neighbor.
He also called for Russia to be allowed back into the group, which was formerly the G-8. Russia was expelled from the body over Crimea."

Is this co-opting Russia (and at what price; if the price is right, anything goes?) while dealing with the other "fronts"? I can see the headlines : "Remember, Hillary tried these resets so many times..."
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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Re: Geopolitics and the global economy

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Bank of England and the ECB rolling back quantitative easing? Well that will go into roundation errors as China just eased for the 4th consequtive time, to guard against investment slowdown brought about by the threat of a trade war - why invest if you can't sell?

Even that is peanuts, when you consider
"The Congressional Budget Office estimates that federal deficits will average $1.2 trillion a year from 2019 to 2028, according to its April economic outlook. Its 2018 deficit estimates rose by $242 billion over previous forecasts made in June 2017. The federal agency said the revision was mainly owing to lower projected revenues tied to tax reform.
[...]

The Fed is more than two years into its rate-hiking cycle. In conjunction with rate hikes, the Fed is also unloading assets from its balance sheet, which expanded to $4.5 trillion during its post-financial crisis quantitative-easing program."
- so in just a couple of years the injected stimulus will equal what was done in response to a major crisis (minus the "unloading" referred to in the above, which will meet with less and less receptive takers).

Well, there will be no rolling back here, either, as
- Italy (its banks) will not stay afloat without the ECB continuing to roll over their short-term financing... so that much for the Continent
- and Mark Carney has been kept on, to be at the ready to turn the taps back on should it look like Brexit will tip the country into a recession
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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ArmChairCivvy
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Re: Geopolitics and the global economy

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Relating to the above, a couple of pieces over the recent days when the world (mainly central bankers and finance ministers) has been reflecting on Bali have caught my eye, starting with this list:

The surge in US bond yields, close on its heels the escalating trade war and the instability in emerging market currencies. The probably most unpredictable is the current face-off between the Italian government and the European Commission on Italy's budget deficit.

Separately, but against this background, the head of IMF remembered: ahh, Brexit! Well it is fairly predictable, but a messy one could be the last straw (while not a major event on the world scene) that tips the balance, helping the world to head towards a recession.

It is not helping, either, that the US is trying to crash the Chinese stock market by inducing massive overcapacity in exporting firms, while China is trying out abstinence in buying US Treasury bonds & bills.
- they (the latter) are forgetting though that the green back is still in demand, and there is only one factory in the whole world making them
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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Re: Geopolitics and the global economy

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One closing statement from the twice a year IMF global meeting:

"The risk premia are very difficult to incorporate because risk premia are responding to geopolitical, responding to trade tension" as so many countries (esp. developing ones ) have to battle capital flight by raising interest rates and thereby hitting growth on the head.

A JPMorgan Chase participant offered a better translation for "spillover" risks :"When elephants fight, the grass suffers."
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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Re: Geopolitics and the global economy

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Houston Chronicle unusually calls for OPEC to rescue oil companies:

"Energy companies lost $1 trillion in oil price slide. The global oil and gas sector has lost $1 trillion in value over a 40-day period since October after crude prices fell by about $20 per barrel. U.S.-listed companies in the S&P 500 shed $240 billion. ExxonMobil (NYSE: XOM), for instance, lost $35 billion in value. Some analysts are warning that OPEC+ will need to cut output to balance the market."
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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Re: Geopolitics and the global economy

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RE: the post of above, that unlikely pact (OPEC with the "devils" that were the reason for it being formed in the first place) will not be needed as there are "higher forces" working towards the same effect. Agreement on an aggressive production cut at the upcoming OPEC+ meeting looks more unlikely now that President Trump has, for one, protected Saudi Arabia from international outrage over the Khashoggi murder, while at the same time that he has pressured them into keeping oil prices low... both of these to be able to carry on with the policy on Iran. Russia is also not keen on a large production cut. Why is that?
- Russian economy is struggling with oil (gas prices are closely linked) under $80. So for as long as that state of affairs lasts, volume is everything - to compensate for the "lost" revenues. The "new Russian empire" project - of which NovoRossija formed only a small part - is faltering without enough money to pay for, not just the tanks, planes and subs (as ships have tanked already), but also for "soft influence". Funnily enough, the US official in charge of Syria negotiations said that " as Russia - and Iran - have done a good job in wrecking the place, do not expect us to step in, to rebuild it".
- and Saudi public finances will go quickly bust if oil goes and stays under $50
- that leaves Saudi Arabia and its "partner in crime" preferring a “quiet cut,” which would mean taking production back down to 10 mb/d, down from the current "limit" 11 mb/d - production itself has never been exactly in line, but with the Russo-Saudi coordination now more so (OPEC needing the + suffix due to its global share and therefore pricing power being on a downward trend).

Trump wants low oil prices, but U.S. shale could take a hit. This would come in the shape of an impact on forward capex budgets over the next few months if the prices trend lower still.
- those who believe the US is already THE swing producer expect prices to rebound for that capacity being held back, but they live in the years ahead (not that many years to go, though: a very good reason for UK's increased presence in the wider Gulf region. If we go with 'burden sharing' with the US, where are the rest of the Europeans, sharing with us? Ahh, they rely on Russian gas :) ).

Over the longer term many believe oil demand and hence more fragile prices to be the case anyway. Saudi Aramco’s CEO recently announced that the company will spend $500 billion over the next decade to transform itself into a major refiner and petrochemical maker, not just an oil producer. How much were the planned proceeds from floating the company again?
- notably, of that the share abroad,with global investments in the chemicals sphere, is set at roughly $100 billion over the next 10 years (add any acquisitions of opportunity)
- that strategy working is crucial for the external and fiscal balance (= domestic stability)... with the oil price dipping, and then settling, below $50. And the country's external image is crucial... for that "crucial" strategy
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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ArmChairCivvy
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Re: Geopolitics and the global economy

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I was just about to go for my dinner... and then I remembered it is G-20 (not a day, but two).

And about: Governor Carney getting 'shot' here at home for telling the truth.

He was very kind to the 'Kiddios' ie. the folks from the press when he said not in 'our' professional lives - I mean 'kind' by not including himself in the "crowd" - have we got experience from supply-side shocks. You will have to go back to the ... 1970's :o :shock:

Let me tell you (before Brexit happens... and) all that folks know about supply-side is what was in the press during the Reagan years.
-Which in the main did not happen.
-But oil shocks, before then, did happen. Lights did go out. And work weeks were... whatever the French Socialists would like them to be now :D )

Here goes:
"Natural gas prices [at the Waha hub] in the Permian fell into negative territory this week amid a worsening glut. A lack of pipelines to ferry away natural gas has some producers essentially paying other companies to take the product."

It won't be like that - negative prices - with Brexit.

But that is how supply side shocks work. No passporting... err: cannot do anything today. Or tomorrow. Or...
- but everyone in Europe was happy doing things with us? Yes: they were
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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Re: Geopolitics and the global economy

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ArmChairCivvy wrote: Ahh, they rely on Russian gas :) ).
Yesterday's article from Carnegie Europe puts "that" at
"Russia is in a strong position to keep dominating gas supplies to the EU, which amounted to 40 percent of extra-EU imports in 2016—although new developments could upset the current situation, such as a rapid development of LNG exports to Europe from other sources."


Out of sight... only just outside of Europe: November 19, in Istanbul.

" Russian President Vladimir Putin and Turkish President Recep Tayyip Erdoğan held a ceremony marking the completion of the first underwater segment of the Turkish Stream gas pipeline, linking Russia to Turkey’s European shores. The project is a vivid illustration of Moscow’s strategy to strengthen its position in supplying gas to Europe while reducing its reliance on the Ukrainian transit corridor."

Whatever happened to the pipeline that was going to enable those ex-USSR republics that broke away, to break free from transiting the Russian territory, in order to reach their markets?

"However, Turkish Stream will also increase Ankara’s dependence on Moscow for its energy needs."
- this dependency was v high to begin with; after the shooting down of the Russian fighter, all that Putin would have needed to do (to shut Erdogan up) was to turn the gas off. He didn't... here's why:
" a symbol of how efficiently Moscow has been using Ankara’s relative diplomatic isolation to its advantage. For Ankara, this was another way of telling the world: Turkey matters."
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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Re: Geopolitics and the global economy

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'Big Short' Steve Eisman was just on R4, bets against UK economy generally, through a basket of banks (who in aggregate are, of course, exposed to the whole economy). He says that which banks does not really matter (as his deal is on the Brexit battle uncertainty creating - at least a temporary - dip)
- it does help that Trump's trade war with China will reach a climax , in one way or the other, over the same, small number of months (again the tactics are irrelevant... though he seems to agree with them).

The only reason to write about this is that R4 (after the news everyone else tunes off) OAP following will now go and sell UK bank shares like lemmings
- the role of public broadcasting?
- in this case will help Mr. Eisman to turn his positions at a profit sooner than otherwise (or ceteris paribus)
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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Re: Geopolitics and the global economy

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Trumps' "deal" for Iran seems to be moving ahead on multiple fronts:
- in Canada (putting China/ Huawei on the spot with sanctions busting), and
- in Vienna, where the newly-found Saudi-Russian axis seems to be coming apart: https://www.reuters.com/video/2018/12/0 ... World+News

Would think that the next news will come out of Yemen (err... Stockholm)

Worth remembering though that despite Rouhani's fiery words, the Revolutionary Guard has their own navy and are not subject to effective political control... so an 'engineered' incident in Hormuz is not to be fully discounted
- compared to consequences the "whose dunnit" - afterwards - will be of little interest
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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Re: Geopolitics and the global economy

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The so called high-absorbtion countries naturally want to make the most of any oil they've got
- Corby's newly elected pal has set this in motion: " Mexico hopes to boost oil and gas production by 50 percent. Mexico’s government aims to boost oil and gas output by 50 percent over the next six years. The new government wants to revive Pemex and has planned to increase the state-owned oil company’s exploration"

The three top producers of carbon fuels (US, Saudi and Russia) all found, surprise, surprise that the UN reports for the just-ended climate meeting were, errr, inaccurate.
- not that the finding would direct their policies that much
- except the USA driving the price down (bankrupt Russia)
- and the Kingdom trying to find the "middle ground": not to get bankrupted itself, but keep America as " a friend"
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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Re: Geopolitics and the global economy

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price down (bankrupt Russia)
- and the Kingdom trying to find the "middle ground": not to get bankrupted itself, but keep America as " a friend
Funnily enough, the fiscal break-even for both countries is around $80. The difference is that that the Kingdom has not borrowed much and can do so (more likely to get the first $100 bn or so through listings), whereas Russia would find that difficult

This tit-for-tat RT-BBC -something-SWIFT could (if escalating) be just one interim step away from cutting Russia off SWIFT payments
- funny that: like the sequestership of Iranian assets a long time ago, global finance - even in the form of mundane payments - can be a weapon
= weaponise what you like; but be careful with what you choose (B or C from NBC... or even unidentified drones, instead of little men in green :wave: )

As for now: OPEC+ to release country-specific production quotas, recognizing that the lack of detail in Vienna earlier this month has hurt its efforts to convince the market.
- and the waivers will run out 3 monthly, so how many waivers will there be
- and will there need to be any; if China decides to buy the "whole lot"?
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

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Re: Geopolitics and the global economy

Post by ArmChairCivvy »

Italy's budget was passed (errm: the deadline was "during this year" :D ) and the Beep gives some background:
"In cash terms it's the biggest government debt in the EU at €2.3 trillion ($2.6tn; £2tn). The debt burden as a percentage of annual economic activity is second only to Greece in the EU at 132%.
What about the Italian banks?
- They own more than a quarter of Italian government debt, so they would be hit hard by a default."

What is not said is that 2/3 of the Gvmnt bonds held by banks have actually ended up in the ECB, held as collateral against ECB lending. Here we come to the old saying:
- if you owe the bank a mln and can't pay, then you have a problem
- if you owe 100 mln, then the bank has a problem

Anyway, situation in hand... until the euro-elections. That's where the timelines (Brexit, cliff, and all that) become intertwangled - as noted on that thread
Ever-lasting truths: Multi-year budgets/ planning by necessity have to address the painful questions; more often than not the Either-Or prevails over Both-And.
If everyone is thinking the same, then someone is not thinking (attributed to Patton)

Lord Jim
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Joined: 10 Dec 2015, 02:15
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Re: Geopolitics and the global economy

Post by Lord Jim »

The EU implodes, has to change the way it runs things and ends up a lot like what the UK wanted before the referendum took place. In the mean time we leave off a cliff just as the above is happening, Labour wins the inevitable general election because everyone has had enough of the bickering in the Conservatives, and begs the EU to let us back in as BREXIT was all a mistaken Conservative plot. After much deliberation the EU agrees but we have to join the Euro, no longer have any rebate and out influence in just above Malta's for at least a decade.

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