Monday, March 16, 2020

Oil Shock And Market Meltdown 2020 -- Update -- March 16, 2020

Summary:
This is quite fascinating. After listening to that one-hour energy podcast and reading the 2009 Rolling Stone article on Goldman Sachs, plus everything else, it appears that this can be boiled down pretty quickly:

1. All agree that the Russians' / Rosneft response -- walk away from OPEC meeting -- precipitated this. Like WWI "we" were just waiting for the "Prince Franz Ferdinand" moment. That moment came when Russia walked away. [Russia was only being asked to cut back 300,000 bopd -- I have to verify that, it might have been 500,000 bbls; whatever it was, it was a Hitchcock McGuffin.]

2. The Russian / Rosneft response. In a binary world, only two possibilities:
  • Putin misjudged. 
  • Putin did not misjudge; Putin intended to put the world into a global financial crisis.
3. It may result in a great book; and, geo-political wonks can discuss ad nauseam on NPR how this all started, who is to blame, and whether Putin misjudged, but for the rest of us, we are now dealing with the hand [that has been] dealt [to] us. It will be interesting to see who folds, who stays in the game, who survives to play the next hand.

4. Listening to the podcast, reading the Rolling Stone article, watching the 10-year Treasury implode, last and definitely not least, watching the Federal Reserve meet on the weekend and announceing within hours another cut (to zero), suggests that this is now much more than something confined to the oil sector. The Federal Reserve might actually be concerned that the global banking system is at risk.

5. Perhaps stocking up on toilet paper is not such a dumb idea.
Additional comments and background: in progress.

First, the Columbia Energy Exchange podcast from a couple of days ago -- my takeaways as well as the podcast link itself. My hunch is that most folks will "blow off" the Rolling Stone article I'm curious if anyone has different takeaways or a different reading from the Columbia Energy Exchange than those that I posted.

Later: if Russia won't talk with Saudi Arabia, there's no way Russia will talk with the US. Saudi Arabia is in a fight for its life. I don't think a lot of folks see it coming, but it certainly looks like Russia is pushing for a global banking crisis.

2 comments:

  1. if "Putin misjudged", then they'll meet again fairly quickly and reverse it...otherwise, we have to figure it was intended...

    ReplyDelete
    Replies
    1. ... a riddle, wrapped in a mystery, inside an enigma ...

      Delete

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