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Did Trump start the oil price war?

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3 hours ago, BLA said:

Upon entering the bathroom I passed an open stall, looking into this open stall I see a restaurant employee pants down around his ankles sitting on the toilet taking a dump . . . . in front of him were two buckets. He was peeling shrimp from one bucket and putting them in the other bucket.

Must be the Chinese version of just-in-time.   High production? High volume work environment?  oh, well.

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US shale, Canadian oil sands, and the North Sea production will be the ones making cuts in the very near future. Moreover, Trump's plan to use Saudis to pressure Moscow is hurting US shale BIG TIME. Which means Saudis will soon be given a directive to stop their silliness while North America also cuts production. Why do I say Trump? Because I assume - forgive me - that Saudis would not dare do THIS right now without a go ahead from Washington, or even an actual directive. If that assumption is wrong. Ok. Then it still leaves Washington to go and tell the Saudis to stop their policy. Cuts in production and Washington's pressure on the Saudis means Moscow's estimates in early March will be borne out: OTHERS will need to cut production, and any price war will be short. Russia doesn't set oil prices, it does not resort to selling at below market price. These are Saudi tactics. I've never heard of Russia dumping oil on world markets at below market price. Moscow did NOT want to leave the older agreement where 1.7 million barrels/day were cut. Saudis stormed out when Moscow decided to not accept US mandated and Saudi delivered additional cuts.  

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1 hour ago, Jan van Eck said:

Must be the Chinese version of just-in-time.   High production? High volume work environment?  oh, well.

unfortunately I too have a story like that. a guy from the middle kingdom working at whole foods (!) on sushi, went into the bathroom WITH the huge wooden spoon they use to mix the rice in the bucket. it was hanging out of his back pocket as he went into the restroom. then he returned. a week later I saw him scratching his back - over the clothes at least - using this spoon. wtf?

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3 hours ago, Leroy Cox said:

on sushi, went into the bathroom WITH the huge wooden spoon they use to mix the rice in the bucket.

I get the impression their stndrds of sxnittion xre not the sxme xs ours. 

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(edited)

20 hours ago, Rob Plant said:

Oro I think you are super clever with anything financial, however what you put here is simply not true.

Just because many of these are immigrants from India or S.E Asia doesnt mean they arent trained to the standards required and qualified accordingly.

I can assure you that hospitals in Europe and their staff work to extremely high standards at all times.

New York is just starting to realise what this virus is all about and I predict in 3-4 weeks time its going to be in a world of pain just like Italy and now Spain are in. The UK will be there sooner approx 1-2 weeks

LIVE: New York records 5,000 cases of COVID-19 in one day as coronavirus pandemic continues

I don't know where you are in the UK, but my niece in London got infected.  She recovered in 1 day, but her friends had it worse

Edited by Hotone
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9 hours ago, Leroy Cox said:

US shale, Canadian oil sands, and the North Sea production will be the ones making cuts in the very near future. Moreover, Trump's plan to use Saudis to pressure Moscow is hurting US shale BIG TIME. Which means Saudis will soon be given a directive to stop their silliness while North America also cuts production. Why do I say Trump? Because I assume - forgive me - that Saudis would not dare do THIS right now without a go ahead from Washington, or even an actual directive. If that assumption is wrong. Ok. Then it still leaves Washington to go and tell the Saudis to stop their policy. Cuts in production and Washington's pressure on the Saudis means Moscow's estimates in early March will be borne out: OTHERS will need to cut production, and any price war will be short. Russia doesn't set oil prices, it does not resort to selling at below market price. These are Saudi tactics. I've never heard of Russia dumping oil on world markets at below market price. Moscow did NOT want to leave the older agreement where 1.7 million barrels/day were cut. Saudis stormed out when Moscow decided to not accept US mandated and Saudi delivered additional cuts.  

Right....Regardless of the issue, if things are going down the toilet, it must be Trump or those damn Yanks that are at fault or instigated the situation.

You ‘assume’ that Saudi Arabia would never act without permission from Washington...can you back that up with facts? Of course not, but your whole narrative is based on YOUR assumption!

Where did you get the idea that now, or in the past, Washington mandated production cuts to OPEC+?


I think you’ll go far in the mass media arena as facts do not matter to you, assumptions and bullshit, apparently, do.

 

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1 hour ago, Hotone said:

I don't know where you are in the UK, but my niece in London for infected.  She recovered in 1 day, but her friends had it worse

Yeah the vast majority of people have very mild symptoms, or none at all in some cases. Other however it devastates their immune system and they drown in their own fluids.

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Imagine if Saudis find a giant gold mine under their feet and decide to flood the world with cheap gold bars. They already are doing that with their oil, I really don't understand why United States are waiting to take some action. I guess soon something is going to happen. Maybe a drone can solve the oil world war. I'd really like to see that.

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The United States must impose duties on oil imports, except for oil from Canada and Mexico. The funds raised should be used to support renewable energy. Both Republicans and Democrats will be pleased.

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11 hours ago, Roberto.Brazil said:

Imagine if Saudis find a giant gold mine under their feet and decide to flood the world with cheap gold bars. They already are doing that with their oil, I really don't understand why United States are waiting to take some action. I guess soon something is going to happen. Maybe a drone can solve the oil world war. I'd really like to see that.

Why is it always the US responsibility? Isn’t the oil price crash affecting other nations, especially those whose economies are heavily dependent on oil revenues, harder?

How about this....why doesn’t some other nation grow a set of balls and take some action (maybe a drone) to sort out the price war?

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You think Trump is creating world dominance in oil !!  

HA ! Wait till he abolishes the Federal Reserve !!!  And with that the Income Tax !!  

The US will be the number 1 tax haven in the world !! 

If your an American Citizen with no taxes except consumption taxes and the cheapest gas for your car in the world we as American Citizen's will really have it made!! 

British citizens instead of fleeing to the Cayman Islands, Switzerland or even the tax free islands off their coast to escape the banking cartel and its horrendous taxes will be coming to the United States of America !!  Just think of this the US was a British Colony before our revolution against England!!  

GO TRUMP !!!!

Cpt. Lauren N. Dowsett

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6 hours ago, Douglas Buckland said:

Why is it always the US responsibility? Isn’t the oil price crash affecting other nations, especially those whose economies are heavily dependent on oil revenues, harder?

How about this....why doesn’t some other nation grow a set of balls and take some action (maybe a drone) to sort out the price war?

It is so funny how everyone looks to us when shit needs to get done, then afterwards we are accused of imperialism and "taking over their country" like we wanted to go there and exert our will and control. You are absolutely correct, let China send their magnificent navy over and patrol the chaos in the ME. Invite Russia in to help, we'll see how that goes for them all.  Or maybe we send something a little bigger than a drone and get it all over with in 30 minutes or less, say those drones designated ICBM. That'll fix the problem for a long, long time. Oh, you thought I meant the problems over there? No, I mean the problem where everyone acts like the U.S. is SUPPOSED to be the world police and then turns it around against us later blaming us for all the turmoil.... Bet they won't be asking again!!

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And I say we need to pull out of the ME entirely with the exception of the forces we need to keep assisting Israel. Let the Iranians run all over the rest of the ME and see how they like it when the U.S. is not there to fend them off. It seems to be what they so desire lately, so why don't we play tooth fairy and grant them their wish? Would love for nothing more than to finally shit all over those bastards, considering all the crap they have done to us in the past. I REMEMBER the gas lines, and them just deciding to cut us off more than once.....

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On 3/25/2020 at 12:42 PM, Gerry Maddoux said:

I don't think so. You're right in that secondary bacterial pneumonia often follows viruses like influenza. However, this virus kills by activating a reactive bomb within the cytokine system. It in turn damages the lung parenchymal cells, then totally destroys the alveolar pockets. In other words, it's the immunologic storm that gets you, not secondary infection. 

That would explain the cases that use autoimmune disease drugs that help then.... Get the immune system to shut down for a bit and not destroy the host trying to defend itself

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On 3/20/2020 at 2:28 PM, Ward Smith said:

By the way, if it weren't for California alone, the US would be importing far less oil than we are. That's because Kalifornistan refuses to allow East West pipelines into the state, so the vast majority of their oil comes by tanker as they continue to produce less and less. That also means they never get to pay WTI prices, but are always paying Brent rates. Wouldn't it have been nice to have all that excess LTO going to the biggest market in the 50 states instead of China, India and Europe? 

They have so many other problems too, they have made it so expensive with the super regulated environment for the refineries that fuel is ridiculously expensive there, coupled with the highest gas taxes in the nation now making gas very expensive compared to say, neighboring Nevada. People on the borders will naturally go across the border and get gas, thus depriving the state of ANY gas taxes. Right now they are whining about the cost of fuel, and the state DA is starting lawsuits against the refiners claiming they are being gouged with the cost of fuel. Kinda like what they did to the electric company out there. So it wouldn't surprise me if they drove the few refineries left out of business, and because they don't like the pipelines, most of the gas coming into the state will have to be trucked in. That'll make gas cheaper, right? LMOA, it seems as if they are as dumb as a box of rocks out there, at least the politicians they put in office nowadays. Every time they stick their fingers in the pie to add more regulations for the "benefit" of Californians, they screw it up. And not just a little, these are monumental screw ups that cost the citizens so much. I have a hard time believing how anyone can even afford to live there anymore, with the exception of the rich, like all the actors living there in Dumbphuckwood. When all the lower income people decide to give up and just leave California, who will be left to do their laundry, yards, or wash their cars and babysit their children? They won't wake up until it's way too late, and then we'll have to listen to them whining, yet AGAIN!! 

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1 hour ago, Capt. Lauren Dowsett said:

You think Trump is creating world dominance in oil !!  

HA ! Wait till he abolishes the Federal Reserve !!!  And with that the Income Tax !!  

The US will be the number 1 tax haven in the world !! 

If your an American Citizen with no taxes except consumption taxes and the cheapest gas for your car in the world we as American Citizen's will really have it made!! 

British citizens instead of fleeing to the Cayman Islands, Switzerland or even the tax free islands off their coast to escape the banking cartel and its horrendous taxes will be coming to the United States of America !!  Just think of this the US was a British Colony before our revolution against England!!  

GO TRUMP !!!!

Cpt. Lauren N. Dowsett

Consumption taxes would make people think about buying all that Chinese made crap that they really don't need...

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On 3/25/2020 at 11:02 AM, 0R0 said:

I don't think that housing will be affected that much. Perhaps CA, and high priced New England. But the rest of the country never paid those kinds of prices for housing. Median home prices are $247K People in the big cities and their suburbs don't get how hysterically overpriced their real estate is. Its the 21st century, why are employers insisting that you do your work in a congested downtown that requires 4 hours of commuting or million dollar efficiency apartments. 

Can't even fathom why any company would want to move to NYC, real estate is ridiculous there. Save the company money and move corporate headquarters to some small town and really do something for that town, maybe somewhere within 1-1/2 hours or less to a major, save the company TONS of money on building and tax costs, upgrade that sleepy town to a mini metropolis, bring jobs and other amenities to them, fresh air and a ridiculously short commute to work... NYC, LA, Chicago, Houston, all of those would be off the list as a prospective place for HQ. Look at where Wal-Mart is, Bentonville Arkansas, a small town of about 35,000 with low crime, better schools, fresh air(well, fresher than any of the aforementioned cities) and of the best cities in Arkansas to live in. Most people that live there own their homes, unlike so many large cities. Win-win no matter how you look at it. Some people are just city dwellers and can't think outside the box. I know that some small towns would reject having a large corporate entity move in, but they won't all reject the idea. Oh, yeah, and the whole not being traveled over by so many people, like NYC. Makes a difference today, wouldn't you say? More COVID cases reported there today, a LOT more...

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(edited)

2 hours ago, SERWIN said:

Can't even fathom why any company would want to move to NYC, real estate is ridiculous there. Save the company money and move corporate headquarters to some small town and really do something for that town, maybe somewhere within 1-1/2 hours or less to a major, save the company TONS of money on building and tax costs, upgrade that sleepy town to a mini metropolis, bring jobs and other amenities to them, fresh air and a ridiculously short commute to work... NYC, LA, Chicago, Houston, all of those would be off the list as a prospective place for HQ. Look at where Wal-Mart is, Bentonville Arkansas, a small town of about 35,000 with low crime, better schools, fresh air(well, fresher than any of the aforementioned cities) and of the best cities in Arkansas to live in. Most people that live there own their homes, unlike so many large cities. Win-win no matter how you look at it. Some people are just city dwellers and can't think outside the box. I know that some small towns would reject having a large corporate entity move in, but they won't all reject the idea. Oh, yeah, and the whole not being traveled over by so many people, like NYC. Makes a difference today, wouldn't you say? More COVID cases reported there today, a LOT more...

All depends on the nature of the industry in question, and the preferences of the demographics (even how many workers) said industry needs:

https://www.bloomberg.com/graphics/2019-us-gdp-concentration-counties/

Even Walmart is an interesting case, as they've become more technology/digital oriented lately like the rest of the economy, they've (Walmart Labs/Jet.com) expanded like crazy in places like the bay area, nyc, austin, etc. It's a relatively low amount of workers but high capital spend because it's were much of the growth of the business is in. These organizational units would likely employ people who would never move to Bentonville because the clustering of jobs is concentrated elsewhere.

Edited by surrept33

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1 hour ago, surrept33 said:

All depends on the nature of the industry in question, and the preferences of the demographics (even how many workers) said industry needs:

https://www.bloomberg.com/graphics/2019-us-gdp-concentration-counties/

Even Walmart is an interesting case, as they've become more technology/digital oriented lately like the rest of the economy, they've (Walmart Labs/Jet.com) expanded like crazy in places like the bay area, nyc, austin, etc. It's a relatively low amount of workers but high capital spend because it's were much of the growth of the business is in. These organizational units would likely employ people who would never move to Bentonville because the clustering of jobs is concentrated elsewhere.

That is rather short term thinking on their part. The young people they need are maturing, having kids and can't afford to live in the Valley, NYC etc. (Austin area is fine) and leaving town. Yet their employers are not moving out with them, so they commute endlessly in their autopilot cars so are less effective. The technology hubs are around long established university technology departments. Funding research hubs in the heartland, which is entirely empty on CA or New England standards, could have the technology companies with a new supply of graduates and research centers within a decade, well distributed throughout the country. They don't need to have everyone piled up in million dollar home country, where the entirety of giant states are sucking off of them, and most of all their workers. 

These locations at the tech hubs simply can't pay their workers enough to cover the cost of living there. They are already in flat shares with multifamily households being the norm in the Valley and in LA etc. not to speak of SF. And Seattle is horrible on housing. 

High end tech people in software are starting to negotiate offsite contracts, where they take a $100k annual penalty to work offsite. One I talked to moved to Thailand. The Amazon HQ2 search process was also majorly disappointing because they did not take any partners along with them nor offer mechanisms to fund infrastructure necessary to service them (like expanded airports to allow direct transpacific or transatlantic flights). They were looking for concessions and subsidies thinking that they bring a great revenue source to the localities and states, but the actual reason those places are attractive is the low tax rates, which after a concession to the HQ2 project would not cover the costs of accommodating them. So they ended up with no big deal and split up the HQ2 project distributed all over NYC area. 

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(edited)

Trump didn't start any oil price war since the U.S. has no power on market share for all intents and purposes.  In 2019 according to the EIA the U.S. consumed 20 million bbls of crude and produced 13 million bbls a day.  We export what we can't refine, so the Administration can't stop the Saudis from adding another 3 million bbls of oil to the market together with Russia's 500,000 bbls next month.  The price war started as a pissing match between Salman and Putin.  It's now turned into an opportunity for market dominance by crushing the U.S. oil industry. They tried it in 2014-2016 and it didn't work. Now there is a double whammy with sliding demand from the COVID-19 and a huge oil glut. 

El Nikko's link-

 was an eyeopener to see the Administration beginning to realize that the "energy independence" they are so proud of is going to crash and burn.  We also know Iran is ticked and flying ballistic missiles from Yemen into SA, Russia is nationalizing its oil assets in Venezuela to capture product they claim is not under U.S. sanctions, and the Trump Administration is threatening to withhold military equipment and troops to Salman.

We may just have a pandemic that grows into something much larger than a virus.  

  

Edited by JoMack
Include El Nikko's link

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(edited)

On 3/21/2020 at 3:58 AM, 0R0 said:

The general problem was a drop in demand vs. incomes, and thus an increase in saving rates. It was driven by demographic shifts, and coincided with the Chinese growth and commodity bubble and then its straight out credit bubble, The commodity bubble squashed margins so that hardly anyone on the planet could make a profit of any substance away from commodity production. It started in 1999. But the main component of it was during the 2002-2008 period when Europe had already peaked and the US was scrambling to build housing for families while China had transitioned to super high savings as its boomers aged, and its Millennials came to work during 2000-2008. 

The big break in the growth cycle was when China had managed to break the margins of the global economy just in time for the US to join the demand decline of boomers moving into the savings cohort dominating the demographic structure. It was in 2007. What that means is that the natural real rates of return on business were negative during the commodity bubble. It meant that real interest rates had to be averaging  negative globally (1) due to elevated savings vs. consumption, (2) and thus due to lower final product costs vs. commodity input costs. 

In the financial world, there was much leverage compensating for the decline in returns. The sources were the low interest countries, first Japan, then Europe post 2002, then China post 2005. The Eurodollar system was growing rapidly with the help of the volatility and correlation statistics powered asset pricing models derived from Rubenstein and Merriweather's work. That made a number of incorrect market assumptions, including continuity and lack of correlation between markets and individual securities (e.g. mortgages having different default risks from each other at a given credit rating - rather than all of their default rates being correlated in time). That model allowed banks and other financial players to build credit default swaps that would make bank's obligations to each other count as high grade (AAA) assets, and allowed packages of assets to be rated according to the statistics of the portfolio and then hedged. What happened on the way to 2008 is that AIG was turned into a trash can of CDS issues such that risk was transferred to it. It was the largest unused balance sheet on earth at the start of the bubble, they tried pressing Buffet into using Berkshire's enormous asset base to issue some of them too. But he figured out that they were far underpriced and called them "weapons of mass destruction". 

To go by Jeff Snider, the pre Bear Stearns and post Bear Stearns Eurodollar systems were a clear 180 degree turn in risk perspectives inside it. In his words it went from a world of risk free returns allowing infinite balance sheet leverage to returnless risk prohibiting any leverage at all. The models applied in all financial institutions and embedded within Basel III regulations for mark to market practices turned out to have no validity in real markets. 

Europe's consumer to saver+retiree  demographic ratio peaked in 2002, and in 2008 for the US. But the US has a large millennial generation to drive consumption forward The rest of the world doesn't. China may have had one, but the one child policy prevented that from happening, so rather than a broad rise in the consumer demographic group, they have a sharp short rise that moves into the saving demographic in just the space of 5 years, and has already started doing so. The older and larger China boomer demographic is moving from savings to retirement so their savings are not going to be there to support continued stimulus by credit expansion. The Millennial  bump will just barely fill in the missing savings lost to retirements up to 2024, after which the financial system would be cash flow negative with more flowing out to retirees than coming in from savers. All that coupled with a very rapidly declining consumer demographic, Same as in future Europe, current Japan, future ASEAN, only the US and NAFTA group and India will have a growing consumer demographic.  

That was a very interesting lesson on the macro economic trends, past and future.  

In my field of IT services and software solutions, the business tends actually followed technology and innovation cycles and not the above.  1999 was an extremely good year for the Nasdaq listed company I worked at, due to a rush of orders for Y2K compliant software.  It was also the year that awakened the nascent Indian IT industry as global enterprises outsourced Y2K compliance work to them.  During the period, 1999 to 2008, there was the Dot-com bust, but otherwise business volume and margins were healthy.  

The European IT services company that I worked for, failed because they couldn't successfully execute an India strategy, which their major multinational clients insisted upon.  One reason they closed offices in Asia was because we were losing business to Indian competitors. 

I can relate to Americans feeling an existential threat first from the Japanese and then from the Chinese.  I used to feel that way about the Indians taking away our business.  I lost my bigotry towards them (mea culpa), after I joined one of their technology companies, and found that they are actually pretty good.

One reason for the decline of the Europeans is that they are complacent and lacked urgency.  At one of the companies I worked for, we used to joke that it takes 6 months to say 'No' to customer Change Requests.  In IT, the Europeans lost out first to the Americans who are more innovative and agile, then to the Indians who are cheaper and have hunger.

In terms of the Chinese, my experience is that they are quite incompetent when it comes to IT services.  They may have good technology and technical people, but they have communication and cultural issues. Their governance for multi year complex projects is very poor.  Their project managers work to please their superiors in HQ rather than being able to control the project. The fiasco with the Coronavirus outbreak doesn't surprise me because I have seen it happen on IT projects.  Shit hits the fan and then HQ sends in a huge hit squad on-site to fix the problems. A friend who worked in a Chinese firm told me that they are incapable of change because of their top down Communist culture. Soak, rinse, repeat.

Edited by Hotone

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