Inflation

[waterbottle]

Is the US entering a recession? According to a Fed paper that looked at early indicators, the answer is no.

us recession what key economic indicators say

The majority of economic indicators that the NBER Business Cycle Dating Committee tracks to identify U.S. recessions are still showing growth. How have these measures behaved around past recessions?

www.stlouisfed.org

 

[wayneL]

Pro tip:

Never believe the Fed, G'mint, or CNN.

Vis a vis, the US is already in recession.

YMMV

 

[over9k]

So has anyone else been playing BOIL or am I the only one?

 

[divs4ever]

Let's see what the response is from the RBA next week with AUD falling and BoE talking up a surprise hike.

How long until the nordstream pipeline is fixed?

probably NEVER , the EU are stealing assets and complaining about paying , Russia has no incentive to repair them , there are willing/paying customers to the east and south east

some wanted to divorce from Russia energy , i am sure Russia will take that attitude into consideration ( a hint might be Putin will talk to the Saudis but not to Macron )

however i did hear an estimate of 5 years , but have no idea if that commentator was informed or just a talking head

 

[Smurf1976]

How long until the nordstream pipeline is fixed?

In my view never.

There's long (decades) been an expectation by many that Russia and the Middle Eastern countries would in due course pivot away from oil / gas exports to the West and would instead first prioritise their own (increasing) internal needs and secondly do deals with the likes of China.

We're now at that point I think.

 

[waterbottle]

So has anyone else been playing BOIL or am I the only one?

I am not boilsy enough to

 

[waterbottle]

BoE now entering the bonds market, seeks to purchase long-date gilts until 14 Oct.

Bank of England announces gilt market operation

In line with its financial stability objective, the Bank of England stands ready to restore market functioning and reduce any risks from contagion to credit conditions for UK households and businesses.

www.bankofengland.co.uk

 

[InsvestoBoy]

In my view never.

There's long (decades) been an expectation by many that Russia and the Middle Eastern countries would in due course pivot away from oil / gas exports to the West and would instead first prioritise their own (increasing) internal needs and secondly do deals with the likes of China.

We're now at that point I think.

I can't remember where I read it or heard it but it doesn't sound like there is even remotely close to enough pipeline capacity for Russia to export to China what it was to the EU for at least 5-10 years it takes to build those pipes.

Just googling "russia can't export gas to china" I found this for example:

The 16.5 billion cubic metres of gas exported by Russia to China last year is less than 10% of the 170 billion cubic metres of natural gas sent by Russia to the Europmean market.
Since less than 10 percent of Russia’s gas capacity is liquefied natural gas, so Russian gas exports remain reliant on a system of fixed pipelines carrying piped gas. The vast majority of Russia’s pipelines flow toward Europe; those pipelines, which originate in western Russia, are not connectable to a separate nascent network of pipelines that link Eastern Siberia to Asia, which contains only 10 percent of the capacity of the European pipeline network.
Also, the Asian pipeline projects currently under construction are still years away from becoming operational, and financing of these costly gas pipeline projects also now puts Russia at a significant disadvantage.

Why Russia can't bank on energy exports to India, China - Times of India

India Business News: While flows to Asia have accounted for over half of Russia's total crude flows since Vladimir Putin ordered the invasion of Ukraine, shipments to Asia

timesofindia.indiatimes.com

John Hempton of Bronte Capital shared this on Twitter a little while ago: https://jpt.spe.org/reservoir-commentary-potential-implications-long-term-shut-ins-reservoir

Very possible that the Russians could seriously ruin their reservoirs and struggle to restart them due to sanctions blocking access to machinery/expertise.

What energy exporters want to do (now) and what they can do (now) are very different things.

 

[Smurf1976]

What energy exporters want to do (now) and what they can do (now) are very different things.

Agreed.

Thing is however there was a deal done to build more pipeline capacity Russia - China just prior to the Russian invasion of Ukraine according to media reports at the time. Just prior as in days prior.

So regardless of the short term, by the time anyone in Europe's willing to buy gas from the Russians I expect they'll have that pipe built.

That's about the time Australian LNG exporters suddenly find they need to be speaking German not Chinese.

 

[over9k]

I can't remember where I read it or heard it but it doesn't sound like there is even remotely close to enough pipeline capacity for Russia to export to China what it was to the EU for at least 5-10 years it takes to build those pipes.

Correct. They're currently running oil/gas in on rail and it's nowhere near enough. They're boned.

 

[over9k]

I am not boilsy enough to

25% in a day. Not in BOIL as BOIL's an aggregate of others, but you get the idea.

 

[Smurf1976]

In regard to the discussion about gas:

Mongolia says Russia-China gas pipeline will break ground in 2024

Prime minister Luvsannamsrai tells FT that Rio Tinto’s Gobi Desert copper mine is on track

www.ft.com

Power of Siberia 2 will connect Siberian fields that supply Europe — which has pledged to end its dependence on Russia’s state-backed Gazprom — to China, where demand for gas is rising.

The key being the bit about connecting gas fields which traditionally supplied Europe.

Alexei Miller, Gazprom chief, has suggested China will become its cornerstone customer in the future.

Whilst this is an assumption on my part without proof, I expect that gas and other things (notably oil and coal) supplied to China from Russia will have two fundamental characteristics which differentiate it from the traditional approach.

The currency used will be whatever the two agree on but realistically it'll be Russian or Chinese, it sure won't be any Western currency.

It will not be for sale to others at any price unless the buyer, China, deems it surplus to requirements and chooses to sell in which case it'll likely be offered to "friendly" countries first. In this case see point above regarding acceptable currencies.

The real game here as I see it is a geostrategic and financial one, it's not simply an energy supply arrangement. It's about taking resources off the market, locking them up under long term deals, and removing Western currencies from the equation entirely. That's my interpretation of it at least.

 

[qldfrog]

Correct. They're currently running oil/gas in on rail and it's nowhere near enough. They're boned.

Building infrastructure China way is not following the same timeline than in the West. China self interest is to make sure Russia holds,but does not benefit too much .
Ukrainians and Russians..which btw are the same culture and hated by the Western états-majors as commies 40y after the wall fall, will be cannon fodders for a long while.
But why should anyone care as yhe world will be powered by the sun and windmills ROL
I just wonder who is they in they are boned.
Got the feeling it will not be just the Russians

 

[waterbottle]

10 yr bonds pulling back. Bear rally?

 

[over9k]

In regard to the discussion about gas:

Mongolia says Russia-China gas pipeline will break ground in 2024

Prime minister Luvsannamsrai tells FT that Rio Tinto’s Gobi Desert copper mine is on track

www.ft.com

The key being the bit about connecting gas fields which traditionally supplied Europe.



Whilst this is an assumption on my part without proof, I expect that gas and other things (notably oil and coal) supplied to China from Russia will have two fundamental characteristics which differentiate it from the traditional approach.

The currency used will be whatever the two agree on but realistically it'll be Russian or Chinese, it sure won't be any Western currency.

It will not be for sale to others at any price unless the buyer, China, deems it surplus to requirements and chooses to sell in which case it'll likely be offered to "friendly" countries first. In this case see point above regarding acceptable currencies.

The real game here as I see it is a geostrategic and financial one, it's not simply an energy supply arrangement. It's about taking resources off the market, locking them up under long term deals, and removing Western currencies from the equation entirely. That's my interpretation of it at least.

Yeah we're entering a bifurcated world in this way. It's kind of like the cold war all over again except over energy. The one big difference is that things like international trade, oil pipelines etc can't just be resecured and/or built quickly.

The one thing I would point out is that the americans had an active interest in containing the soviets before whereas now they largely couldn't give a f**k. Russia's of no threat to them at all. Neither is china or anyone else for that matter.

This is in stark contrast to how the japanese, koreans, poles, germans and so on feel about the situation though.

 

[over9k]

10 yr bonds pulling back. Bear rally?

Speculation that BOE intervention will (especially if it works) trigger similiar actions from other central banks. We'll see.

 

[wayneL]

Speculation that BOE intervention will (especially if it works) trigger similiar actions from other central banks. We'll see.

It certainly has the aroma of intervention.

 

[over9k]

It certainly has the aroma of intervention.

"Unlimited" buying.

 

[CityIndex]

10 yr bonds pulling back. Bear rally?

The US Dollar can typically be used as a decent gauge of global sentiment, so it wasn't surprising to see the overnight rally on Wall Street coincide with a pullback in DXY.

However, with this stemming from the BOE's intervention sparking a decline in bond yields it will be interesting to see if this one just a one-off bounce3 for the time being, or if sentiment is rebounding and this is move is actually sustainable over the near-term.

 

[Dona Ferentes]

In regard to the discussion about gas.

Whilst this is an assumption on my part without proof, I expect that gas and other things (notably oil and coal) supplied to China from Russia will have two fundamental characteristics which differentiate it from the traditional approach.

The currency used will be whatever the two agree on but realistically it'll be Russian or Chinese, it sure won't be any Western currency.

It will not be for sale to others at any price unless the buyer, China, deems it surplus to requirements and chooses to sell in which case it'll likely be offered to "friendly" countries first. In this case see point above regarding acceptable currencies.

The real game here as I see it is a geostrategic and financial one, it's not simply an energy supply arrangement. It's about taking resources off the market, locking them up under long term deals, and removing Western currencies from the equation entirely.

I still think a Fiat currency is better than a Lada one