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

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  • India’s neutral position is rather interesting. Anyone have any insights?

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    • India is very dependent on Russian oil and gas, and much of their military equipment comes from Russia. Their experiences under British colonialism led them to have a slightly pro-Russian tilt during the Cold War, which has been strengthened by our support of their enemy Pakistan. And India’s current Prime Minister Modi is a Hindu nationalist who has some similarities to Edrogan and Orban. Given these factors, India’s neutrality is not surprising.

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      • Originally posted by Tim View Post
        India’s neutral position is rather interesting. Anyone have any insights?
        Russia is collecting its IOU's that it lent to India when it was the major part of USSR.

        Six times the UN security council has brought resolutions against India with the US bringing it most of the time. Two in relation to Kashmir, once for Goa and Dia, and three during the 1971 war with East and West Pakistan. And at all the times it was the USSR veto in the security council that nullified the whole thing. One has to remember than until recently US was not an ally or friend of India.

        And India has ordered advanced SAM from Russia and does not want to put its arms deals in jeopardy by voting against Russia. India's thought is USA might be here for India today but will bring an action tomorrow against it when it does not suit its purpose or a different party comes to power but USSR / Russia has struck with India through thick and thin for 70+ years.

        https://tfipost.com/2022/03/6-times-...dia-at-the-un/

        This is not my thinking, but my relatives in India who are Indians feel this way. Many times I have been shouted at for trying to explain US viewpoint while I visit India so I try and not talk US- India politics with them. I have learned to not take their bait. It is a very sensitive topic for Indians and no wonder they were very upset with the US envoy of Indian origin who tried to tell India to not depend on or support Russia and warned of dire consequences.
        Last edited by Kamban; 04-11-2022, 06:21 PM.

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        • Kamban
          Thank you. Informative for context. Your experience illustrate how difficult it is to get agreement from two perspectives even when one removes the lack of cultural knowledge.
          Appreciate the education.

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          • I love the news today:
            Brits admit that Russia may well win Ukraine,
            Russia launches new offensive,
            US and others keeps pouring in money and weapons and resources,
            Oil prices stay high.

            Financials news on one of the worst market days so far in 2022:
            "Stocks Are Selling Off as Treasury Yields Continue to Rise"

            ...What's that southern saying? "Jerome Powell was born at night, but not last night"?
            Is anyone buying the Fed effect >>> war effect? Really?

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            • Originally posted by Max Power View Post
              I love the news today:
              Brits admit that Russia may well win Ukraine,
              Russia launches new offensive,
              US and others keeps pouring in money and weapons and resources,
              Oil prices stay high.

              Financials news on one of the worst market days so far in 2022:
              "Stocks Are Selling Off as Treasury Yields Continue to Rise"

              ...What's that southern saying? "Jerome Powell was born at night, but not last night"?
              Is anyone buying the Fed effect >>> war effect? Really?
              yes, the war is potentially a game changer.

              I tend to think the Ukraine war also changes the Feds potential reaction function.
              With the war, there is the potential for a greater alliance between Russia and China (the "alliance of the autocrats", or in other words, it was wishful thinking that Putin and Xi would not stick together). There are possible long term consequences that were not considered possible previously. One such is reducing manufacturing dependency on China to avoid the type of problem the Europeans are having with energy reliance on the Russians.

              So my thought is that the Fed was nursing domestic demand previously and was able to be very behind on interest rates as there was not much risk of further fiscal stimulus in the offing. But with the Ukraine war, there is the potential for escalation of the war and some things like onshoring manufacturing back to the US and Mexico would require a huge build.

              I can't imaging the Fed getting ahead of the curve though, but the war maybe means they can't just sit out as transitory. Although it seems to have swung too much to the other end of the pendulum, and I tend to think maybe too many rate hikes are now priced in for the next year than are likely to occur (but I could be wrong there).

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              • Simply framework:

                Have the initial conditions actually changed? That is, covid, supply chains, fiscal impulse.

                Its NO, NO, and yes (starting).

                There is no reason to expect a fast about face yet, and several new wrinkles on top.

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                • "I can't imaging the Fed getting ahead of the curve though, but the war maybe means they can't just sit out as transitory. Although it seems to have swung too much to the other end of the pendulum, and I tend to think maybe too many rate hikes are now priced in for the next year than are likely to occur (but I could be wrong there)."
                  Confounding fiscal policy with the Fed's role, full employment and moderate inflation. Fed reacts and has zero tools to control impact of political and fiscal policies. There are so many huge consequences of policy decisions. That is not a political statement. Fiscal policy decisions have consequences.
                  Inflation has never been "transitory". Just a fact.

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                  • Russia announced they're cutting gas supplies to Poland, which sounds like a serious escalation. Major recession fears now. Really since the Great Recession this has I think been the worst year for the market so far. Unlike with COVID, it seems like we're in a sustained time period where the S&P will be ~7-13% below peak, which leave a lot more time to buy equities on sale than the COVID recession left for people wanting to buy on sale. As long as unemployment doesn't sharply rise and you're at least 5-10 years from retirement, this is probably a blessing

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                    • Originally posted by JBME View Post
                      Russia announced they're cutting gas supplies to Poland, which sounds like a serious escalation. Major recession fears now...

                      ...As long as unemployment doesn't sharply rise and you're at least 5-10 years from retirement, this is probably a blessing
                      For sure.

                      Poland won't be the last place to get cut off for not subscribing to the 'pay in Rubles' directive last month. Germany, another vocal refusal to pay in Rubles, is probably sweating the same fate (ok, maybe teeth-chattering that fate?). Russian energy is not like crops that will spoil. Ruskies can play the long game and simply store it or slow production if they don't get their price. The rest of Europe/world can bail out the countries that end up with a dangerous energy deficit, but that is not done for free. The USA can't just print money to solve that one... they need to deliver real physical oil and gas by the boat and truckload from somewhere.

                      I agree it will be a solid wave of market buy opportunities for months to come. I'm honestly surprised the market didn't fall harder or quicker from the setup of the invasion of Ukraine until now. It just cracks me up that market new today blames "weak tech earnings" or "China" for the worst day of 2022 yet. Not a word of Russia. Let's get real: the world runs on oil and gas, and the war is the root cause for low productivity, higher costs, and overall concerns.

                      The biggest overall gainers in this one look like India and China to me (Brazil also?). They aren't bailing anyone out, they aren't sending supplies to either side in the war, and they aren't paying inflated Russia energy prices. They can just sit aside and quietly be productive. BIC might do good things in terms of advancements or GDP the years to come, but who knows if the market (esp USA markets) will reward that??

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                      • Originally posted by Max Power View Post
                        For sure.
                        I agree it will be a solid wave of market buy opportunities for months to come. I'm honestly surprised the market didn't fall harder or quicker from the setup of the invasion of Ukraine until now. It just cracks me up that market new today blames "weak tech earnings" or "China" for the worst day of 2022 yet. Not a word of Russia. Let's get real: the world runs on oil and gas, and the war is the root cause for low productivity, higher costs, and overall concerns.
                        You really think the ‘Putin Price Hike’ is the root cause?

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                        • Today reminds me of 2020.

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                          • Originally posted by Zaphod View Post
                            Simply framework:

                            Have the initial conditions actually changed? That is, covid, supply chains, fiscal impulse.

                            Its NO, NO, and yes (starting).

                            There is no reason to expect a fast about face yet, and several new wrinkles on top.
                            The fiscal impulse is waning, but I’m not sure it has in Europe. Maybe it still got another burst in the US, crazy as that would be (although unlikely). The Chinese say they are injecting major fiscal/infrastructure stimulus, but no one believes them.

                            What do you think of the China response to COVID? They seem to have gone over the top with trying to control it. Now hard to ignore the CCP is dominated by Xi, who may turn out not dissimilar to Putin.

                            The Russia issue is predictable, but the China issue I think is hard to know what to think of. Your thoughts ? I’m trying to think what it means for resource prices.

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                            • Originally posted by Dont_know_mind View Post

                              The fiscal impulse is waning, but I’m not sure it has in Europe. Maybe it still got another burst in the US, crazy as that would be (although unlikely). The Chinese say they are injecting major fiscal/infrastructure stimulus, but no one believes them.

                              What do you think of the China response to COVID? They seem to have gone over the top with trying to control it. Now hard to ignore the CCP is dominated by Xi, who may turn out not dissimilar to Putin.

                              The Russia issue is predictable, but the China issue I think is hard to know what to think of. Your thoughts ? I’m trying to think what it means for resource prices.
                              idk, china is strange i basically write them off. i dont trust their numbers nor anything they say intent wise. whole world is now in fomo for resources. Im super long all commodities so i am not objective.

                              Euro is crushed by inflation/energy costs and the war. that will catch up to us at some point if not fixed.

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                              • Originally posted by CordMcNally View Post

                                You really think the ‘Putin Price Hike’ is the root cause?
                                No, but it is gas on the fire.

                                Oil was already structurally tight before putin. Injected more uncertainty sure, and we are now down towards levels of where we were overnight on the invasion.

                                Honestly I think the easiest/simplest (though not necessarily all encompassingly correct) frame works is the covid fiscal/monetary boost was a one time event that is now waning slowly, getting taken off by inflation and fiscal chill, lets say we get back on trend if no recession, where is that trend?

                                Its still quite a bit lower.

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