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My orders might go thru..been waiting for a while
Start of the crash we needed to have?gold might be a bargain soon
February 2025
- Thread starter ducati916
- Start date
Start of the crash we needed to have?gold might be a bargain soon
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Btc etf purchased.My orders might go thru..been waiting for a while
Start of the crash we needed to have?gold might be a bargain soon
I believe the other orders on the crypto exchange might have been filled as well
Let the show begin
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Markets having a moment:
Pretty much USD up
Everything else down
jog on
duc
Pretty much USD up
Everything else down
jog on
duc
- Joined
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Tariffs:
Canadian hockey and basketball fans are booing the U.S. national anthem at games. Liquor stores in Ontario are taking American booze off their shelves. Do you know what it takes to make Canadians this mad at you?
Why it matters: It takes a trade war, apparently. And regardless of whether Trump's promised tariffs go into effect, Canadians' newfound open hostility to the United States is an example of the longer-term economic risks at play.
Between the lines: As the U.S.-China relationship has become more hostile over the past decade, Western companies have looked for ways to decrease dependence on China. A frequent solution offered by the corporate class was "friendshoring."
The bottom line: There's no such thing as friendshoring if you don't have any true friends.
Cullen Roche:
1) The Lifetime of Stocks isâŠShrinking.
I loved this chart from Bank of America which shows the average lifespan of companies in the S&P 500 since 1960. The message from the bank is that incumbent firms are being disrupted much more rapidly. And itâs true. Many of the largest firms we all know of today did not even exist 20 years ago. This is good and bad.
Higher turnover means we have a faster pace of what Schumpeter called âcreative destructionâ. That means new entrants are innovating quickly and knocking off stale incumbents. Itâs bad in the sense that this makes stock picking a lot harder because you canât just buy and hold firms you expect to be around for decades.
But the thing I really like about this chart is that, despite the shrinking lifetime, that lifetime is still extremely long at 18.3 years. We spend so much time talking about the stock market on a daily, weekly and annual basis, but this data shows that stocks are, at a minimum, multi-decade instruments. This is what I try to communicate with the Defined Duration investing strategy. Stocks are inherently long-term instruments and they need to be utilized in a portfolio in a manner consistent with long-term thinking. That means thinking in truly long-term time horizons across decades and not years. This is why I always ignore short-term market narratives about the stock market. No one knows what stocks will do in the short-term because you cannot make a long-term instrument behave like a short-term instrument no matter how much you trade it.
2) Bitcoin Going to $0?
Gene Fama kicked the Bitcoin hornetâs nest this week when he appeared on a podcast and predicted that it would go to $0 within the next 10 years. I think this prediction is likely to be wrong and indicative of the academic sort of thinking that most traditional financial theorists utilize. The thing is, from an asset pricing perspective, an asset like Bitcoin is virtually impossible to value. In traditional finance we like to use things like discounted cash flows or similar cash flow based metrics to value an asset. We assign multiples of revenue, EBITDA, etc. But when an asset doesnât generate cash flow it becomes difficult to value.
Bitcoin is more like a piece of fine art than a cash flow generating corporation. And to value something like a piece of art you need a more subjective asset pricing model. Personally, I donât have a strong opinion on that as it pertains to Bitcoinâs specific price and the primary use case I consider with Bitcoin is fiat currency insurance. That is, if you live in a 3rd world country where the risk of currency collapse is high then owning something like Bitcoin makes a great deal of sense. If youâre an American using the worldâs reserve currency I donât think that argument is nearly as compelling. But I find it very compelling from the perspective of any 3rd world economy, especially those with unstable authoritarian economies. What is insurance worth to someone? Thatâs a super personal question and one that an asset pricing model isnât going to help you quantify.
But $0 is an extreme sort of prediction. And it misunderstands the huge underlying infrastructure and network effect that has developed around Bitcoin. This isnât merely something trading on pure speculation. Thereâs now a trillion dollar infrastructure in Bitcoin mining, embedded (incentivized wealth) and regulatory apparatus that utilizes this asset. None of that means it canât fall significantly and given its history it wouldnât be remotely surprising if it falls 80%+ at times, but for it to go to $0 youâre talking about the collapse of the entire global Bitcoin mining industry, the now billion dollar ETF structure and a complete and total collapse in the confidence that supports this asset. Could that happen? I guess it could in an environment where, for instance, the power grid went out forever, but the probability of that happening in the next ten years is extremely remote in my mind.
Of course, whether any American should own Bitcoin as fiat currency insurance is a whole other questionâŠ.Fama would probably disagree with my framing of it as fiat currency insurance, or I supposed heâd prefer other assets to insure that risk, but I guess thatâs why I donât consider myself a disciple of Modern Portfolio Theory.
3) The Return of the 2010s?
One of my dominant themes over the last few years was the theory that the post-Covid economy would eventually mean revert right back to the pre-Covid economy. In other words, once the dust settled on Covid and all that stimulus, I expected the economy to start looking a lot like it did in the period from 2015-2020 when inflation was low and growth was low, but stable. That was a perfectly good environment, despite the low growth. In fact, Iâve argued that low and stable growth is better for a big economy than experiencing high and unstable growth.
We got a pretty interesting piece of data this week in the GDP report which I believe is starting to confirm this. RGDP came in at 2.3% which was almost perfectly in-line with the average GDP we saw since 2010. So, we already know that inflation has moderated almost to the Fedâs target and now weâre seeing GDP readings that are more consistent with the pre-Covid period.
But the primary takeaway from this developing trend is that this environment isnât the return of the 1970s. Itâs actually looking like itâs not remotely close to the 1970s. And more recently weâve heard comparisons to the late 90s. But that was a true economic boom with average RGDP of 4.1%. This also doesnât look like that. So, in my view the return of the pre-Covid economy looks to be well on track. And thatâs not necessarily a bad thing. Of course, the curveball in all of this could be Trumpâs economic agenda. The tariffs combined with significant government spending cuts create some downside risk to this forecast. But weâll have to wait and see how much of this is negotiating bluster and how much of it is real.
So do you buy-the-dip?
Really, who knows, just I chop zone.
But if there is no follow through to today's close from the bears, then I think we trade higher tomorrow, but that $601 range on SPY is a major resistance point currently. That is the line in the sand. Get past that, we go higher.
Silver News:
Tariffs on US imports from Canada (25%), Mexico (25%), and China (10%) began February 1, 2025.
In 2024, the US imported 4,200 tonnes (135 million (M)) oz. of silver and using the latest available data from 2020 to 2023, approximately 44% of US silver imports came from Mexico and 17% came from Canada according to the US Geological Survey.
The 82M oz. imported annually from Canada and Mexico is now incentivized to be sourced from other cheaper sources.
As 70% of silver mine production is a minor byproduct of the mining of other primary metals, mine supply of silver from other countries simply cannot respond quickly to added silver demand irrespective of the price of silver.
Blackrock Inc. that operates the worldâs largest silver Exchange Traded Fund (ETF) in the âSLVâ iShares Silver Trust also merits close observation.
Figure 1 - Donald Trump Receives Gold Bullion Building Lease Payment - Sept. 15, 2011; photo source: Associated Press
jog on
duc
Canadian hockey and basketball fans are booing the U.S. national anthem at games. Liquor stores in Ontario are taking American booze off their shelves. Do you know what it takes to make Canadians this mad at you?
Why it matters: It takes a trade war, apparently. And regardless of whether Trump's promised tariffs go into effect, Canadians' newfound open hostility to the United States is an example of the longer-term economic risks at play.
- There are estimates floating around on what the new import taxes mean for GDP and inflation, but the numerical details miss the point.
- This will prove a very difficult bell to unring and points to a new era in which businesses cannot count on any country to be a permanent partner of the United States.
- An extended trade war would prove costly for specific sectors, including U.S. automakers (who rely on supply chains that crisscross North American borders), homebuilders (who use Canadian lumber and gypsum) and agriculture (fertilizer).
Between the lines: As the U.S.-China relationship has become more hostile over the past decade, Western companies have looked for ways to decrease dependence on China. A frequent solution offered by the corporate class was "friendshoring."
- The idea is to shift supply chains toward countries with deep, stable relationships with the United States.
- The trade relationships with Canada and Mexico have been viewed as the most stable of all, built upon the North American Free Trade Agreement enacted in 1993 and an update of it, the U.S.-Mexico-Canada Agreement, signed by Trump five years ago.
- That embrace of North American trade, combined with the Biden administration's emphasis on friendshoring and deepening relationships with allies, gave a green light to companies looking to invest further in a North American supply chain.
- But now, Trump has pushed toward higher tariffs on imports from Canada and Mexico than from China.
The bottom line: There's no such thing as friendshoring if you don't have any true friends.
Cullen Roche:
1) The Lifetime of Stocks isâŠShrinking.
I loved this chart from Bank of America which shows the average lifespan of companies in the S&P 500 since 1960. The message from the bank is that incumbent firms are being disrupted much more rapidly. And itâs true. Many of the largest firms we all know of today did not even exist 20 years ago. This is good and bad.
Higher turnover means we have a faster pace of what Schumpeter called âcreative destructionâ. That means new entrants are innovating quickly and knocking off stale incumbents. Itâs bad in the sense that this makes stock picking a lot harder because you canât just buy and hold firms you expect to be around for decades.
But the thing I really like about this chart is that, despite the shrinking lifetime, that lifetime is still extremely long at 18.3 years. We spend so much time talking about the stock market on a daily, weekly and annual basis, but this data shows that stocks are, at a minimum, multi-decade instruments. This is what I try to communicate with the Defined Duration investing strategy. Stocks are inherently long-term instruments and they need to be utilized in a portfolio in a manner consistent with long-term thinking. That means thinking in truly long-term time horizons across decades and not years. This is why I always ignore short-term market narratives about the stock market. No one knows what stocks will do in the short-term because you cannot make a long-term instrument behave like a short-term instrument no matter how much you trade it.
2) Bitcoin Going to $0?
Gene Fama kicked the Bitcoin hornetâs nest this week when he appeared on a podcast and predicted that it would go to $0 within the next 10 years. I think this prediction is likely to be wrong and indicative of the academic sort of thinking that most traditional financial theorists utilize. The thing is, from an asset pricing perspective, an asset like Bitcoin is virtually impossible to value. In traditional finance we like to use things like discounted cash flows or similar cash flow based metrics to value an asset. We assign multiples of revenue, EBITDA, etc. But when an asset doesnât generate cash flow it becomes difficult to value.
Bitcoin is more like a piece of fine art than a cash flow generating corporation. And to value something like a piece of art you need a more subjective asset pricing model. Personally, I donât have a strong opinion on that as it pertains to Bitcoinâs specific price and the primary use case I consider with Bitcoin is fiat currency insurance. That is, if you live in a 3rd world country where the risk of currency collapse is high then owning something like Bitcoin makes a great deal of sense. If youâre an American using the worldâs reserve currency I donât think that argument is nearly as compelling. But I find it very compelling from the perspective of any 3rd world economy, especially those with unstable authoritarian economies. What is insurance worth to someone? Thatâs a super personal question and one that an asset pricing model isnât going to help you quantify.
But $0 is an extreme sort of prediction. And it misunderstands the huge underlying infrastructure and network effect that has developed around Bitcoin. This isnât merely something trading on pure speculation. Thereâs now a trillion dollar infrastructure in Bitcoin mining, embedded (incentivized wealth) and regulatory apparatus that utilizes this asset. None of that means it canât fall significantly and given its history it wouldnât be remotely surprising if it falls 80%+ at times, but for it to go to $0 youâre talking about the collapse of the entire global Bitcoin mining industry, the now billion dollar ETF structure and a complete and total collapse in the confidence that supports this asset. Could that happen? I guess it could in an environment where, for instance, the power grid went out forever, but the probability of that happening in the next ten years is extremely remote in my mind.
Of course, whether any American should own Bitcoin as fiat currency insurance is a whole other questionâŠ.Fama would probably disagree with my framing of it as fiat currency insurance, or I supposed heâd prefer other assets to insure that risk, but I guess thatâs why I donât consider myself a disciple of Modern Portfolio Theory.
3) The Return of the 2010s?
One of my dominant themes over the last few years was the theory that the post-Covid economy would eventually mean revert right back to the pre-Covid economy. In other words, once the dust settled on Covid and all that stimulus, I expected the economy to start looking a lot like it did in the period from 2015-2020 when inflation was low and growth was low, but stable. That was a perfectly good environment, despite the low growth. In fact, Iâve argued that low and stable growth is better for a big economy than experiencing high and unstable growth.
We got a pretty interesting piece of data this week in the GDP report which I believe is starting to confirm this. RGDP came in at 2.3% which was almost perfectly in-line with the average GDP we saw since 2010. So, we already know that inflation has moderated almost to the Fedâs target and now weâre seeing GDP readings that are more consistent with the pre-Covid period.
But the primary takeaway from this developing trend is that this environment isnât the return of the 1970s. Itâs actually looking like itâs not remotely close to the 1970s. And more recently weâve heard comparisons to the late 90s. But that was a true economic boom with average RGDP of 4.1%. This also doesnât look like that. So, in my view the return of the pre-Covid economy looks to be well on track. And thatâs not necessarily a bad thing. Of course, the curveball in all of this could be Trumpâs economic agenda. The tariffs combined with significant government spending cuts create some downside risk to this forecast. But weâll have to wait and see how much of this is negotiating bluster and how much of it is real.
So do you buy-the-dip?
Really, who knows, just I chop zone.
But if there is no follow through to today's close from the bears, then I think we trade higher tomorrow, but that $601 range on SPY is a major resistance point currently. That is the line in the sand. Get past that, we go higher.
Silver News:
Tariffs on US imports from Canada (25%), Mexico (25%), and China (10%) began February 1, 2025.
In 2024, the US imported 4,200 tonnes (135 million (M)) oz. of silver and using the latest available data from 2020 to 2023, approximately 44% of US silver imports came from Mexico and 17% came from Canada according to the US Geological Survey.
The 82M oz. imported annually from Canada and Mexico is now incentivized to be sourced from other cheaper sources.
As 70% of silver mine production is a minor byproduct of the mining of other primary metals, mine supply of silver from other countries simply cannot respond quickly to added silver demand irrespective of the price of silver.
The Bank of England that coordinates the multi-decade London price rigging of silver and gold in London is going to have a very rough time in the weeks and months ahead.
Blackrock Inc. that operates the worldâs largest silver Exchange Traded Fund (ETF) in the âSLVâ iShares Silver Trust also merits close observation.
 |
Figure 1 - Donald Trump Receives Gold Bullion Building Lease Payment - Sept. 15, 2011; photo source: Associated Press
jog on
duc
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Oil News
Canadaâs oil industry has dodged the bullet with the United Statesâ 25% tariff threat, only to be penalized by a 10% levy on Saturday and then subsequently lifted for a grace period of 30 days, taking oil sands producers to a rollercoaster of emotion this week.
- Almost all of Canadaâs 4 million b/d flow to the United States, with some 65% of those exports taken in by refiners in the Midwest, a region that has no other supply route because infrastructure in the Gulf Coast is geared towards exporting light barrels from the US.
- Analysts have found that Canadian tariffs would have the biggest impact on US Atlantic coast gasoline markets, with a 25% tariff on imports hiking prices by $0.50 per gallon to $2.5/USG, whilst higher oil sourcing costs adding some $0.20 per gallon to Midwest gasoline prices.
- Bypassing US sanctions would be easier for Mexico as all its US-bound flows are seaborne and could be re-routed to Asia, however Valero Energyâs term contract with Pemex could become a point of legal contention.
Market Movers
- US offshore producer Talos Energy (NYSE:TALO) appointed Paul Goodfellow, formerly the global deepwater chief of UK-based energy major Shell (LON:SHEL), as its new chief executive.
- Azerbaijanâs state oil firm SOCAR has agreed to purchase a 10% stake in Israelâs offshore Tamar gas field from Union Energy, the investment vehicle of Israeli businessman Aaron Frenkel.
- US oil firm EOG Resources (NYSE:EOG) won production sharing contracts for two offshore blocks in Trinidad and Tobago, with the Caribbean nation seeking to halt production declines and allocating one block each to BP and Shell in 2024.
Tuesday, February 04, 2025
The US-Canada tariff flare-up lifted oil prices for a brief period, but with the 30-day postponement of those restrictive measures, the oil markets are now assessing the impacts of another trade war, a potentially even bigger one between the United States and China. With ICE Brent dropping dramatically to $74 per barrel, the main fear is that the US-China spat could seriously damage oil demand growth this year, already under pressure from weakening margins.
Gold Prices Hit Record Highs on Tariff Frenzy. Prices of the bullion skyrocketed to an all-time high this week, with Monday seeing gold hitting $2,830.49 per ounce in intra-day trading, driven by market uncertainty surrounding Donald Trumpâs tariffs and the probability of retaliatory trade wars.
OPEC Ditches The EIA as Secondary Source. In its Monday JMMC ministerial meeting, OPEC+ agreed to stick to its policy of gradually returning cut production from April 2025 onwards, all the while scrapping the US Energy Information Administration and Rystad Energy as secondary sources.
Ukraine Hits Major Russian Refinery, Again. Following last weekâs strik on Russiaâs Ryazan refinery, Ukrainian forces struck another refinery in the Volga region, the 300,000 b/d Volgograd plant that is the largest in southern Russia, whilst also targeting a condensate splitter in the city of Astrakhan.
Trafigura Top Official Gets Jail Time for Bribes. Switzerlandâs top criminal court convicted Trafigura and its former chief operating officer Mike Wainwright, sentencing the latter to 32 months in prison for bribing Angolan officials in exchange for oil contracts between 2009 and 2011.
Iraq Moves Closer to Settle Kurdish Row. Iraqâs parliament approved a budget amendment that would allow Baghdad to subsidize production for international oil firms operating in the semi-autonomous Iraqi Kurdistan region, setting the rate at $16 per barrel and edging closer to the restart of Kurdish exports.
Beijing Retaliates with Oil and Gas Tariffs. In retaliation to Donald Trumpâs across-the-board 10% tariff on any Chinese product, Chinaâs State Council imposed a 15% tariff on coal and liquefied natural gas imports from the US, and a 10% tariff on crude oil and heavy machinery.
Nigeria Mandates Domestic Supply Quotas. Nigeriaâs upstream oil regulator NUPRC said it would deny export permits for oil cargoes for producers that fail to meet stipulated supply quotas to local refineries, as the country ramps up long-stalled NNPC plants in Port Harcourt and Warri.
Wright Confirmed As US Secretary of Energy. Former chief executive officer of drilling firm Liberty Energy, Chris Wright was confirmed as the US Secretary of Energy by a vote of 59 to 38, using the agencyâs 50 billion budget, pledging to unleash a new LNG expansion and modernize the power grid.
Norwayâs Largest Oilfield Suffers Power Outage. Europeâs largest producing oilfield, the Equinor-operated (NYSE:EQNR) Johan Sverdrup, has suffered a power outage that left the platform without electricity for 8 hours, just two months after a similar incident in November.
EU Struggles to Meet Its Own Inventory Targets. Europe is struggling to meet its self-declared natural gas inventory targets as regional storage levels were 53% full as of February 1, only slightly above the 50% goal set forward by the EU, with Franceâs gas stocks as low as 35% in recent days.
ADNOC Eyes Canadian Petrochemical Producer. ADNOC, the national oil company of the UAE, is considering the joint acquisition of Canadian petrochemical firm Nova Chemicals alongside Austriaâs OMV (VIE:OMV), with the Calgary-based firm currently owned by UAEâs sovereign fund Mubadala.
South Korea Eyes First Ever Oil Discoveries. US geoscientists have appraised and identified 14 oil and gas prospects in South Koreaâs East Sea, potentially containing between 0.7 and 5.2 billion boe, raising hopes of an upstream breakthrough for a country that has never produced oil in its history.
Beijing Tightens Export Controls on Defense Metals. Chinaâs Commerce Ministry announced export restrictions on five metals used in defense and clean energy in response to US tariffs, ranging from tungsten and tellurium all the way to molybdenum, prompting a price rally outside China.
Tariffs
Trump campaigned on using tariffs to revive domestic industry and fill America's coffers.
That appears to be the ideal outcome. Speaking in the Oval Office yesterday, Trump suggested the tariffs were a negotiating tactic.
jog on
duc
Canadaâs oil industry has dodged the bullet with the United Statesâ 25% tariff threat, only to be penalized by a 10% levy on Saturday and then subsequently lifted for a grace period of 30 days, taking oil sands producers to a rollercoaster of emotion this week.
- Almost all of Canadaâs 4 million b/d flow to the United States, with some 65% of those exports taken in by refiners in the Midwest, a region that has no other supply route because infrastructure in the Gulf Coast is geared towards exporting light barrels from the US.
- Analysts have found that Canadian tariffs would have the biggest impact on US Atlantic coast gasoline markets, with a 25% tariff on imports hiking prices by $0.50 per gallon to $2.5/USG, whilst higher oil sourcing costs adding some $0.20 per gallon to Midwest gasoline prices.
- Bypassing US sanctions would be easier for Mexico as all its US-bound flows are seaborne and could be re-routed to Asia, however Valero Energyâs term contract with Pemex could become a point of legal contention.
Market Movers
- US offshore producer Talos Energy (NYSE:TALO) appointed Paul Goodfellow, formerly the global deepwater chief of UK-based energy major Shell (LON:SHEL), as its new chief executive.
- Azerbaijanâs state oil firm SOCAR has agreed to purchase a 10% stake in Israelâs offshore Tamar gas field from Union Energy, the investment vehicle of Israeli businessman Aaron Frenkel.
- US oil firm EOG Resources (NYSE:EOG) won production sharing contracts for two offshore blocks in Trinidad and Tobago, with the Caribbean nation seeking to halt production declines and allocating one block each to BP and Shell in 2024.
Tuesday, February 04, 2025
The US-Canada tariff flare-up lifted oil prices for a brief period, but with the 30-day postponement of those restrictive measures, the oil markets are now assessing the impacts of another trade war, a potentially even bigger one between the United States and China. With ICE Brent dropping dramatically to $74 per barrel, the main fear is that the US-China spat could seriously damage oil demand growth this year, already under pressure from weakening margins.
Gold Prices Hit Record Highs on Tariff Frenzy. Prices of the bullion skyrocketed to an all-time high this week, with Monday seeing gold hitting $2,830.49 per ounce in intra-day trading, driven by market uncertainty surrounding Donald Trumpâs tariffs and the probability of retaliatory trade wars.
OPEC Ditches The EIA as Secondary Source. In its Monday JMMC ministerial meeting, OPEC+ agreed to stick to its policy of gradually returning cut production from April 2025 onwards, all the while scrapping the US Energy Information Administration and Rystad Energy as secondary sources.
Ukraine Hits Major Russian Refinery, Again. Following last weekâs strik on Russiaâs Ryazan refinery, Ukrainian forces struck another refinery in the Volga region, the 300,000 b/d Volgograd plant that is the largest in southern Russia, whilst also targeting a condensate splitter in the city of Astrakhan.
Trafigura Top Official Gets Jail Time for Bribes. Switzerlandâs top criminal court convicted Trafigura and its former chief operating officer Mike Wainwright, sentencing the latter to 32 months in prison for bribing Angolan officials in exchange for oil contracts between 2009 and 2011.
Iraq Moves Closer to Settle Kurdish Row. Iraqâs parliament approved a budget amendment that would allow Baghdad to subsidize production for international oil firms operating in the semi-autonomous Iraqi Kurdistan region, setting the rate at $16 per barrel and edging closer to the restart of Kurdish exports.
Beijing Retaliates with Oil and Gas Tariffs. In retaliation to Donald Trumpâs across-the-board 10% tariff on any Chinese product, Chinaâs State Council imposed a 15% tariff on coal and liquefied natural gas imports from the US, and a 10% tariff on crude oil and heavy machinery.
Nigeria Mandates Domestic Supply Quotas. Nigeriaâs upstream oil regulator NUPRC said it would deny export permits for oil cargoes for producers that fail to meet stipulated supply quotas to local refineries, as the country ramps up long-stalled NNPC plants in Port Harcourt and Warri.
Wright Confirmed As US Secretary of Energy. Former chief executive officer of drilling firm Liberty Energy, Chris Wright was confirmed as the US Secretary of Energy by a vote of 59 to 38, using the agencyâs 50 billion budget, pledging to unleash a new LNG expansion and modernize the power grid.
Norwayâs Largest Oilfield Suffers Power Outage. Europeâs largest producing oilfield, the Equinor-operated (NYSE:EQNR) Johan Sverdrup, has suffered a power outage that left the platform without electricity for 8 hours, just two months after a similar incident in November.
EU Struggles to Meet Its Own Inventory Targets. Europe is struggling to meet its self-declared natural gas inventory targets as regional storage levels were 53% full as of February 1, only slightly above the 50% goal set forward by the EU, with Franceâs gas stocks as low as 35% in recent days.
ADNOC Eyes Canadian Petrochemical Producer. ADNOC, the national oil company of the UAE, is considering the joint acquisition of Canadian petrochemical firm Nova Chemicals alongside Austriaâs OMV (VIE:OMV), with the Calgary-based firm currently owned by UAEâs sovereign fund Mubadala.
South Korea Eyes First Ever Oil Discoveries. US geoscientists have appraised and identified 14 oil and gas prospects in South Koreaâs East Sea, potentially containing between 0.7 and 5.2 billion boe, raising hopes of an upstream breakthrough for a country that has never produced oil in its history.
Beijing Tightens Export Controls on Defense Metals. Chinaâs Commerce Ministry announced export restrictions on five metals used in defense and clean energy in response to US tariffs, ranging from tungsten and tellurium all the way to molybdenum, prompting a price rally outside China.
Tariffs
Trump campaigned on using tariffs to revive domestic industry and fill America's coffers.
- In the last 24 hours, the tariff strategy looks more muddled than ever.
- A trade war is underway with China, though every instance of tariff threats before that â Colombia, Canada and Mexico â has ended with Trump backing off, following concessions on areas of policy unrelated to trade.
- The economic impact of tariffs might prove minor if they are merely a negotiating tactic to extract non-trade-related concessions. But if they become a permanent feature of U.S. policy, they'll have a more lasting impact on the economy, markets, and business decision-making.
- "But if you have tariff rates that are so high that it leads to more domestic production, well, now you can't generate revenue. These two things are not mutually consistent with one another," Thomas adds.
- But the 10% tariff on all imports from China took effect this morning. No product is exempted from the import tax, unlike in Trump's first term.
- Overnight, China hit back, threatening retaliatory 15% tariffs on a slew of U.S. imports, including farm machinery, coal and natural gas. It will also restrict exports of crucial minerals.
That appears to be the ideal outcome. Speaking in the Oval Office yesterday, Trump suggested the tariffs were a negotiating tactic.
- "China hopefully is going to stop sending us fentanyl, and if they're not, the tariffs are going to go substantially higher," Trump told reporters.
- "I think that there is this presumption that revenue associated with tariffs will offset some portion of those tax cuts," Carlyle's Thomas says.
- "As we get closer to that, we'll have to see more evidence of what really intends to be permanent, as opposed to which tariffs are more trying to shape the behavior of foreign governments."
jog on
duc
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