Ukraine War... How much will S&P drop this week?

[Tim]

Majors set their “short term” capital budgets more than a year in advance Actually , 5 -10 year plans . E&P is extremely capital and personnel intensive. Quite honestly, when majors like Exxon offer early retirement packages, it’s not difficult to figure out that energy policies are driving headcount down,

[FIREshrink]

I wonder if this might be one of the most powerful weapons currently arrayed against Putin. He really, really, really needs to not lose control of the domestic narrative

https://m.jpost.com/breaking-news/article-700529

[Dont_know_mind]

Wow, that is a monster short squeeze on nickel. Someone must have got wrecked. Hopefully not a major producer getting blown to smithereens on their hedging book.

[Max Power]

The old pump fake by the market today... will it have any up days this week?

This part is annoying... buying stuff that just keeps turning red afterwards. It is the FI equivalent of eating your vegetables

[Tim]

The old pump fake by the market today... will it have any up days this week?

This part is annoying... buying stuff that just keeps turning red afterwards. It is the FI equivalent of eating your vegetables

https://www.wsj.com/amp/articles/why-mr-market-ignores-a-world-in-turmoil-11591272919

Nothing matters to Mr. Market, He will hurt as many people as possible. Just when you think you have it figured out, he crushes you. No mercy or reason.

[CordMcNally]

Wow, that is a monster short squeeze on nickel. Someone must have got wrecked. Hopefully not a major producer getting blown to smithereens on their hedging book.

https://twitter.com/methompson72/status/1501146856637751298?s=21

[Tim]

Commodities are commodities.

https://www.cnbc.com/amp/2020/06/16/how-negative-oil-prices-revealed-the-dangers-of-futures-trading.html

Contracts come to and end. If you are just trading paper, it is a whole different picture than if one is hedging. Holding an asset that is already on hand (selling short) is a zero loss. Producers just locked in a price. Just a missed opportunity.

[Dont_know_mind]

Commodities are commodities.

https://www.cnbc.com/amp/2020/06/16/how-negative-oil-prices-revealed-the-dangers-of-futures-trading.html

Contracts come to and end. If you are just trading paper, it is a whole different picture than if one is hedging. Holding an asset that is already on hand (selling short) is a zero loss. Producers just locked in a price. Just a missed opportunity.

You'd think so, but the hedgers can get margin called too, and that is a problem if they can't stump the margin call. The exchange can exempt margin requirements for a period, but this exposes them to credit risk and bankruptcy.

[Tim]

You'd think so, but the hedgers can get margin called too, and that is a problem if they can't stump the margin call. The exchange can exempt margin requirements for a period, but this exposes them to credit risk and bankruptcy.

You deliver the commodity. Easy to do a cash sale at market price. What is really hard to do is to take delivery if you are just a paper trader. Or deliver. The problem with West Texas oil was there was no place to store it. Some PR traders rented oil tankers. Get paid for parking it.
I have a cousin that routinely sells futures for 50% of his crops when planting, There is a reason for hedging. Cuts the risk 50%. My company used to hedge currencies based on exposure. Not for profit, to net to zero was the goal. Oversimplification, non speculative hedging participants do no blow up. They possess the asset or liability being hedged. It’s just business.
The margin call is covered by assets. Early or late, the time factor actually works in your favor.

[Max Power]

Commodities are commodities.

https://www.cnbc.com/amp/2020/06/16/how-negative-oil-prices-revealed-the-dangers-of-futures-trading.html

Contracts come to and end. If you are just trading paper...

Yep, same as owning actual bonds vs owning bond ETFs.

Good rally day for the market today at +2.67% (not so much for my gold and DBC, lol).

[Jaqen Haghar MD]

At this point Russia has commenced operations that are meant to drive civilians out off populated areas by making them unlivable. This includes intentionally targeting hospitals and healthcare facilities for bombing, and starving out the population.

Once these areas are relatively depopulated and everything is reduced to rubble, they will have to clear out the remaining hiding spots to prevent sniper and guerrilla attacks, which can be pretty difficult.

That’s where the current accusations of Ukraine having chemical and biological weapons come in. Russia will likely use these weapons to clear urban areas and then accuse Ukraine of bring responsible for these attacks.

It’s so ridiculous that most people couldn’t imagine anyone even trying it, or making the argument…. It’s like assembling 190,000 troops on the border, swearing you are not going to invade, then taking a few thousand up front, and having them drive to the rear, on the evening of the invasion, while saying… “Look, we are leaving now! Bye! Everything’s Good. Go back to sleep.”

It’s like a bad movie.

[FIREshrink]

At this point Russia has commenced operations that are meant to drive civilians out off populated areas by making them unlivable. This includes intentionally targeting hospitals and healthcare facilities for bombing, and starving out the population.

Once these areas are relatively depopulated and everything is reduced to rubble, they will have to clear out the remaining hiding spots to prevent sniper and guerrilla attacks, which can be pretty difficult.

That’s where the current accusations of Ukraine having chemical and biological weapons come in. Russia will likely use these weapons to clear urban areas and then accuse Ukraine of bring responsible for these attacks.

It’s so ridiculous that most people couldn’t imagine anyone even trying it, or making the argument…. It’s like assembling 190,000 troops on the border, swearing you are not going to invade, then taking a few thousand up front, and having them drive to the rear, on the evening of the invasion, while saying… “Look, we are leaving now! Bye! Everything’s Good. Go back to sleep.”

It’s like a bad movie.

I don't think we're starting WW3
But I think this is the actualization of WW2.5, or Cold War 2.0.

For years both Russia and China have been taking increasingly repressive steps and acting more and more flagrantly against international law. This is the most visible manifestation of such lawlessness but there are plenty of examples to choose from.

Russia gravely miscalculated and will need to engage in Syrian theater tactics to finish this up. They will rule smoldering rubble; meanwhile they've consolidated NATO and decimated their own economy and the western-oriented gains of the last thirty years.

The west also miscalculated. They appeared to overestimate the odds of diplomacy and underestimate the savagery of the war which came. They have responded boldly but this has created a no exit situation for a malignant despot, and unfortunately also appears to be consolidating the Russia-China détente.

This leads to a new world in which the west is allied against an axis of repression (China, Russia, North Korea, Iran, Cuba, Syria, Venezuela appear to be the major parties) most either nuclear or aspiring to be, which also control large quantities of natural resources (oil, gas, rare earth minerals) the west desperately wants. The confrontation deepens because the west has to pay a high economic and political price to take a moral and military stance. This leads to societal disorder and probably heightened authoritarianism in currently democratic western countries.

This plays out over decades, mostly avoiding major shooting wars but with occasional flare-ups. Chemical, biological, and tactical nuclear strikes are fair game as far as this Axis is concerned.

The west has to prioritize a new economic order which extricates themselves from economic enmeshment with old school repressive regimes. Furthermore it is imperative that we strike alliances even with conflicted neutrals - Saudi Arabia, Iraq, Israel, Vietnam, the Phillipines, India, Brazil, especially African countries) because the alternative is Chinese/Axis hegemony over large portions of the globe.

We know where the future hot spots will be: the Baltics, Finland, Moldova, Georgia, Taiwan, the South China Seas, Iran, Afghanistan, Arctic shipping lanes. Are we prepared to defend them, even militarily?

We are back in the guns of August. Missteps will be catastrophic.

[Max Power]

At this point Russia has commenced operations that are meant to drive civilians out off populated areas by making them unlivable. This includes intentionally targeting hospitals and healthcare facilities for bombing, and starving out the population.

Once these areas are relatively depopulated and everything is reduced to rubble, they will have to clear out the remaining hiding spots to prevent sniper and guerrilla attacks, which can be pretty difficult...

Yep, they are truly playing the very long game here.

Probably 5-10M of the 45M people in Ukraine were pro-Russia anyways, so they will hope those can eventually rebuild it in conjunction with millions of Russians. They might pick up another 5M refugees via evac routes who are indifferent and just want this to be over (easier to speak Russian or Belarusian than Polish or Czech on the language tree... much easier than Romanian or Euro tongues). I've dated a few women who spoke many Slavic languages fairly well, and most Ukrainians will probably prefer those Slavic landing spots... but it would be hard for most to go anywhere else and start over linguistically, socially, financially, business, etc.

I don't know if there was any way to have a takeover of Ukraine without destroying nearly everything, though. It is obviously Crimea amplified 10x. Ukraine nationalism would fight and fight and fight if Russia tried to keep factories, buildings, structures, etc intact for later use. More likely, the Ukraine would vandalize and guerilla attack the things that were formerly theirs anyways... so it makes sense to level them and rebuild later if you're Russia. It will take at least a decade or two for these events to fade from memory and for the men strong enough to fight now to age and find other things to focus on. These same things were going on on USA soil a couple hundred years ago.

They will develop the Ukraine resources again, but it is unlikely to really bear fruits until after Putin's life. Even though the takeover might be "over" by summer, it is absolutely a slow burn with an end game that is currently unseen. We see Russia spending resources and getting the media black eye, but we don't see the ultimate benefits to them. With Ukraine area production eventually tapped, Russia can heavily influence the oil and other commodity prices, though... esp if the NATO continue to sanction them (and therefore must produce their own or clean energy - either at very high costs). We will also see if OPEC begins to align with the Ruskie pricing or re-works the petro dollar. Maybe Russia plans to (or has agreement to) sell China oil for gold? This was obviously not just a conflict about land... we can only follow the money and see how it unfolds in the long term.

It is a shame from a human standpoint.

[Lithium]

I think I’m going to try to hold off on doing any more tax loss harvesting until the end of the month. I’ve switched from VTI to SCHB to ITOT already, and I could try to move again on a small loss, but I think I’m going to try to sell right before the ex-eff date and buy something that’s already distributed the March dividend if possible. that might save me $100 or so in dividend taxes.

[bovie]

I think I’m going to try to hold off on doing any more tax loss harvesting until the end of the month. I’ve switched from VTI to SCHB to ITOT already, and I could try to move again on a small loss, but I think I’m going to try to sell right before the ex-eff date and buy something that’s already distributed the March dividend if possible. that might save me $100 or so in dividend taxes.

Sounds like you just need to adjust your threshold for taking a loss in the first place.

Increase it—by a lot, from the look of things.

Way less work, exact same result…