Dire Straits -- March 8, 2022

I don't want to alarm folks but remember all those "fallout bomb shelters" in the 1950s. Something tells me we need to start hoarding non-perishable staples for the empty shelves that we will see this summer. Just saying. Rice, beans, that would be a good start. Spam. Bottled water.

I keep hoping that things will stabilize, but even after-hours, crude oil continues to rise. 

Crude oil:

• WTI: $125.00; up another $1.31 since the close.
• Brent: $129.90; up another $1.88 since the close. Let's call it $130 to keep it simple.

First group "financial / economic" indicators:

• 10-Year Treasury: link here. Yield pretty much unchanged, at 1.847%.
  
• DXY: link here. Getting ever closer to 100. Now at 99.02.
  
• Silver: link here. Up another 1/3%; now at $27.
  
• Gold: link here. Up $43. Wow, wow, wow, the y-axis had to be changed; gold now solidly above $2,000; hit a high of $2,605 before dropping back to $2.040.
  
• CBOE volatility index: link here. Explained at Investopedia. Surprise, surprise, actually dropped back a bit, at the close, 35.13, down 3.62%. 

If we survive this, and I'm not sure we will, those holding gold, silver, nickel, oil in almost any form should do very, very well. 

I think the tipping point was the story of the day: international leaders no longer taking phone calls from Washington, DC.

Actually, there were two stories.

First, the aforementioned telephone story. 

But even bigger, this story. 

Quick, name any western leader, other than Zelenskyy that is seen as a leader in this crisis. Right now, Putin and Muhammed Bin Salman are the leaders from the East; they're the only ones I can name. And, right, wrong, indifferent, by definition they must be the only two adults in the room. But, from the west, quick! Name any western leader with any gravitas right now. Macron is the only European leader I can actually name. Boris is a Brit, not a European. Quick, name the German leader. The Spanish leader. The Italian leader. Who is head of the UN? The west has no leader.

So, if the tipping point was today when the lead story was that international leaders won't take Biden's phone calls. What comes next? 

That's pretty pessimistic, isn't it?

The good news? Right now I don't see any of the adults leading in Washington. If the likes of Biden, Kamala, Pelosi, Schumer, Elizabeth Warren are the varsity team by virtue of where they stand (or sit), the junior varsity team looks pretty darn good: the likes of Warren Buffett, Tim Cook, Elon Musk, Harold Hamm, Jeff Bezos, Mark Zuckerberg, Bill Gates ad infinitum. The junior varsity team won't let things collapse. And these guys are backed up by the best military and intelligence agencies in the world. 

Not to worry. At some point, our junior varsity team, like the oligarchs in Russia, will say enough is enough. And then the adults in Washington, DC, will take over.

Things had to have looked awful bleak December 7, 1941, but somehow the junior varsity team turned things around and things finally got back on track. This might be as good a time as any to read the biography of Admiral Nimitz. 

A footnote:

Nimitz was court-martialed and found guilty of neglect of duty, but due to his otherwise excellent record and willingness to admit his own fault, was only issued a letter of reprimand.

And, of course, the rest is history.

But, wow, it's going to take a lot of loud rock 'n roll music to put me in a good mood.

Put your headphones on and play this really, really loud:

Sultans of Swat, Dire Straits

I started this essay about twenty minutes ago. Let's check the price of crude oil:

• WTI, up 80 cents, now trading at $125.80
• Brent, up 80 cents, now trading at $130.70.

WTI: over $125.
Brent: over $130.

Gotta play the music louder.

Five minutes later:

• WTI: $126.20.
• Brent: $131.10

Next morning, Wednesday, March 9, 2022: oil "crashes." Well, sort of.

• WTI: down $3.53, trading pre-market at $120.20
• Brent: down $3.08, trading pre-market at $124.90

Putin's reality: I have no idea what the truth is coming out of the Ukraine, but it certainly appears that Ukraine, with minimal help from NATO, the west, or the US, in part or in whole, has significantly slowed Russia's advance. 

I don't know if that's true, but that certainly seems to have a kernel of truth, as they say. Let's say that's accurate. Putin had 50% of his entire mechanized tank inventory invade Ukraine. Everyone knows that US A-10s with US F-15s providing air support could have taken that convoy out in a heartbeat. 

Official date of invasion, February 24, 2022. I said it was a "race against time" for Putin. I said he had ten days. It's now been, since the invasion began, thirteen days: four days in February, nine days in March. Maybe I was a bit optimistic. Smarter folks than I now say Putin's Russia will be insolvent by the end of March. 

But if that's true, something suggests to me that North Korea, China, and Putin know the military and economic strength of the west.