A question to zoom out: Did high energy prices embolden Putin? Are the commodities markets responsible for Russia’s invasion of Ukraine? @rupert_russell’s timely new book 'Price Wars' says: YES. penguinrandomhouse.com/books/622647/p…
2/ Moscow’s military interventions have come at times of historically high oil prices. And right now, energy prices are approaching triple digits for the second time in a decade. Previous highs:
1979 - Afghanistan invasion
2008 - Georgia invasion
2014 - Ukraine "
2022 - Ukraine "
3/ The Oil price - Conflict relationship is not unique to Russia. Russell draws on @cullenhendrix’s discovery that as oil prices increase, oil exporting petrostates are more likely to initiate military conflict. sci-hub.se/https://journa…
4/ High oil prices lead to conflicts because
- Petrostates get WINDFALL of $$ to spend on their military & FX to buffer sanctions
- Limited supply acts as SHIELD from sanctions on oil exports
- In Russia’s case, the GAS WEAPON becomes more potent
- Which combine into CHESTINESS
5/ So High oil prices-> Conflicts. But why volatile oil prices?
2000's Commodity Futures Modernization Act. It created over-the-counter derivatives. Allowed WallSt to make "commodity index funds". Oil,Food,Metals-previously uncorrelated- turned into another volatile asset class.
6/ In effect, the West’s financial centres inflated an oil bubble that in turn, inflated Putin’s chestiness.
⇒ Doesn't mean Putin's brinksmanship is rational
But it informs his sense of confidence. Behind Russia's Nuclear WMD are Wall St Financial WMD willamette.edu/law/resources/…
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The market: Electricity hungry BigTech created a credits "system is akin to buying the right from a fitter colleague to say you have cycled to work, even though you arrived by a car that runs on petrol." @CamillaHodgson ft.com/content/2d6fc3…
“The market will solve climate”
The market: Oil Pipelines are ESG and low carbon! This giant tub of ice-cream won't make you fat because the tub is made of zero-calorie material & by athletes.
Netanyahu assassinates Haniyeh in Tehran & Hezbollah’s Shukr in Beirut. We are on cusp of regional war in Middle East. Forces are being deployed, Defences readied, Redlines of targets communicated.
2/ In Israel's corner are US, UK, Egypt, Saudis, Jordan &Abraham Accord (informal milvalliance) with oil Kingdoms - UAE, Bahrain.
They have communicated to Israel that they will defend Israel if it is attacked by Iran axis but will not participate in a war initiated by Israel
3/ "US is expecting the anticipated Iranian attack may be similar to the barrage of ballistic missiles & drones launched against Israel on April 13...But this attack could be larger...including the possibility of a coordinated attack with Iranian proxies from multiple directions"
The vibe shift, on the ground, in swing state Wisconsin
" Kamala Harris electrified the crowd in her first campaign rally as presumptive Democratic nominee. "I haven’t felt anything like this in many, many years,possibly since President Obama’s first run" therecombobulationarea.news/p/in-west-alli…
For 2yrs, gap between sentiment & economics widen. Did Kamala end vibecession? @kylascan
"There's layers to the cake:
How people expect things to be (expectations)
How things are supposed to be (theory)
How things are (reality)"
2/ Ecology: With super hot oceans, we are very worried about this Atlantic hurricane season. THIRTY storms are predicted plus minus 5, depending on el nino
3/London, Zurich, Bermuda are home of reinsurance.
Insurance model rely on risks being 1 Uncorrelated 2 Calculable 3 Paid for by mkt returns elsewhere
But #globalwarming upends Insurance
It correlates risks (global!); creates catastrophic fat-tails; and crimps returns everywhere.
what reading one book by Brett Christophers does to a mf
‘while it is possible to prevent businesses from doing profitable things, it is impossible to make them do things they consider insufficiently profitable’. Why do all this 'market failure' nonsense ft.com/content/b2b6fb…
Brett Chrisopher's work on Rentier Capitalism has been eyeopening. Asset Managers like Blackrock now run the roads we drive on; the pipes that supply our drinking water; the farmland that provides our food; electricity & heat. Nice profile
Under capitalism, profit expectations drive companies’ invstmt decisions. Building solar/wind & selling the electricity they generate, however, generally is not a very profitable business What sort of returns do investors earn, asks Brett Christophers time.com/6958606/climat…
Yes, BJP still sets the terms in the Indian parliament. But it will not have the decisive electoral majority of 2019-2024 lok sabha where it ran bills with zero opposition or consultation. After this election it will have to respect India’s opposition and democracy
India's stock market slides. Their logic?
BJP not winning in a landslide -> forced to have a NDA coalition government that will inevitably have to be more pro-welfare
--> hence the BJP cannot do nakedly pro-rich liberal reforms --> Oops, sell sell sell
Adani's reversal tells you everything.
"In 9yrs of Modi’s tenure, Adani’s wealth grew from $8bn to $137bn. In 2022 alone, he made $72bn, which is more than the combined earnings of the world’s next 9 billionaires" ht @AnnPettifor