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Oil price impact.
#61
Totally unclear who these Renaissance Capital people are and if they are in a position to know anything, I only notice that the name has been chosen deliberately to confuse with another company with the same name.

The article does not make sense because the only area where it is possible that Western involvement is helpful is the Arctic exploration... and there (1) it is very long-term and (2) it is actually has not been harmed by the sanctions as intended (Exxon-Mobil is still drilling).

On the military issues: US is not planning on fighting large Iraq or Afghanistan type wars right now --- the experience has been too bad --- so large standing army right this moment is not needed and it is costly; other types of war are meant. Still, compare the size of the US army with others... and remember also that when the US started WWII the size of armed forces was negligible but it was massively increased within a year.

Quote:If you think Obama is another FDR ... or some sort of geo-strategic super genius, you are very much a minority in your thinking. Most doubt that he could find his ass with both hands on one of his good days.

No, I do not think Obama represents a non-zero value in any area, but this does not matter.

Firstly, Obama can initiate -- scrap this -- can be made to initiate instead -- a new policy at any moment, he is still capable of using a teleprompter...if not much else. Notice that he actually did -- combat missions in Afghanistan were uncancelled recently. Whoever is in control is not Obama.... let's note in passing that Nuland -- the architect of the Ukrainian coup and subsequent event -- is not an Obama protege, but perhaps Cheney's.
And secondly -- even assuming that Obama is in charge, and is incapable of anything serious -- come 2016, we shall see a republican president, someone like Graham (McCain is already campaigning for him) with McCain's type foreign policy. So
Quote:Perhaps under another leader, but certainly not this one.
perhaps indeed, but I'd not bet on this. The US is on the verge of a financial collapse and in the case of an internal crisis before 2016 we shall see very hawkish Obama.... otherwise the honors will go to the GOP substitute.
Sodomia delenda est

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#62
As I see it, it doesn't matter who is in office, there is the security apparatus that keeps a certain level of continuity in US policy even with changing elected leaders and desires.

Includes intellectual non government employees and employees, IMO.

With a guy like Obama whose entire life is one of strong skepticism towards US foreign affairs, we've seen the policy "step back", examples are Obama's desire to rapidly exit Iraq, Afghanistan, take a different tack with Russia(reset bs and all that), negotiate and not threaten Iran, etc.

With Bush, it was more overtly aggressive.

With Obama, he cares about AGW, homosexual ascendance and Sunni Islam and Palestinian Arabs, with Bush, the more normal post cold war stuff and Palestinian Jews.

Yet, the same basic themes still run through US policy:

1) If we cannot kill enough of you, we will strangle your economy if you do not do as we say

2) We get to decide who rules nations that do not kiss our tails

3) When big cash is involved in a policy and it is in most, it doesn't matter who runs the WH, the money is what drives our policies,not personalities.
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#63
mv,

The theme is that desperation can cause destruction ... pushing too hard for production, risk taking, skimping on maintenance ... all dangerous. It doesn't take much. Maybe exceeding the safe pressure level in a pipeline by a small margin to move things on a little more quickly for example.

Prices declines would not be nearly as harmful to U.S. shale production as the type of careless accident that causes the sort of environmental damage, contamination, fatal explosions and fires, etc ... that the greenies and federal regulators would absolutely love to sink their teeth into to sink the industry. The risk is not restricted exclusively to Russia ... it's just that the history of Soviet crapsmanship would make it appear more likely in pinch. Probably not too serious an issue ... as the results could easily be 'patriotically' ignored.
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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#64
mr_yak,

you are making one incorrect assumption: that Putinism is a continuation of the old Soviet system. Actually it is a different system, one that is based on the free enterprise and in a form that is superior to that currently practiced in the Western countries: flat tax. Of course it has its quirks too, and accidents may happen in every society, but I'd not rely on the "history of Soviet crapsmanship" all that much.

As one illustration: the paradigm of the Soviet system was the worker's attitude "you pretend you pay us, we pretend we work". But when I ran a business over there, I got considerably better output from people I employed than I got in the US... and most of the people came from the Soviet system too. I can go on... but hopefully what has been said is enough.

Now, there is a less obvious factor too: Soviet system toward the end of the USSR was a stagnating socialist model with little interest from anyone to do things well, more like keeping minimal effort as long as it is safe to do so. Today, it is the Western system that is similarly stagnating, more in the EU so far than in the US, but even the US society is more of a heir to USSR than Putinism.
Sodomia delenda est

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#65
Well, this will unfold over the next few years. We'll see.

Russia will see a decline in living standard. Living standards in the U.S. have on the decline for a while, I'm not arguing that we are undergoing stagnation. But I'm not exactly certain how Putin inspires a higher level of attention to detail or quality control ... and I'm not fully familiar with the foundations or ideology of 'Putinism'. It seems one standard is that even if you are excelling at "free enterprise", if you cross Putin you end up with your company transferred to the state and find your ass in prison pretty quickly. Likewise, those that are paid in rubles are likely to have seen a very rapid pay cut this year ... not very conducive to motivation.

In the oil sector ... both the U.S. and Russia are getting squeezed ... along with everybody else ... except perhaps the Sauds who produce less than either (deliberately) but can do it much less expensively. Again, there will be some level of desperation. There will be pressure to bring new projects on line with minimal expense ... or pushing existing production. Something will have to give. I would expect the first cracks to show up in places like Venezuela and Iran first ... as they are under much greater stress.

Again, crank up the popcorn machine ... it will be an interesting show.
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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#66
(12-07-2014, 04:04 PM)mv Wrote: Totally unclear who these Renaissance Capital people are and if they are in a position to know anything, I only notice that the name has been chosen deliberately to confuse with another company with the same name.

Let's see, "Russian Insider" writes article on company that has same name as Sodomite firm, so it is without a doubt about the later, eh? Makes perfect sense,...............from a Russian Perspective? S13
___________________________________________________________________________________________________
"INSIDE EVERY PROGRESSIVE IS A TOTALITARIAN SCREAMING TO GET OUT" - David Horowitz

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#67
(12-07-2014, 07:00 PM)mr_yak Wrote: Well, this will unfold over the next few years. We'll see.

Russia will see a decline in living standard. Living standards in the U.S. have on the decline for a while....

Yes, and yes, we will see.

But dropping living standards would not be limited to these two, EU will certainly do worse, and Here is a surprise from Japan: nearly 2% contraction? On cheap oil too, they are supposed to be the beneficiaries!
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#68
MV,

Would you agree Putin is probably like American leaders in the nexus of state and large corporate assets?
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#69
Not sure what you mean exactly here...

If you are talking about large corporations: not quite. In the US, large corporations are independent and transnational forces that have a large degree of control over the president and do not always act in national interests (immigration issues, as one example). OTOH, large Russian corporations are controlled to some degree by the government (government actually owns a share in all of them) and thus it is Putin that has a degree of control over what they do. John would call this fascism (not totally wrong), but this is also the system used in a number of other countries, beginning with France.

The question I more wonder about is the degree of control Putin has (or does not have) over the Central Bank. It was set up *somewhat* like the US' Federal Reserve with supposedly independent management ... now, my favorite economic blogger, Spydell, released a piece yesterday accusing Central Bank of mismanagement "unparalleled in Human History" ... he may be accurate too, but does this translate into Putin's mismanagement or an independent gang of imbeciles? -- donno.
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#70
(12-08-2014, 12:57 AM)mv Wrote: and Here is a surprise from Japan: nearly 2% contraction? On cheap oil too, they are supposed to be the beneficiaries!

Japan's initial economic problem began during the early 90s, under Bush Senior, because it allowed the World-Bank/IMF, filled with idiots like this one, to hoist the Keynesian Superstition on to them. And the rest, as they say, is history.

When the People's Republic falls victim to the same thing, expect the exact thing to be pushed on to them as well. Here's some discussion about Japan's Debt Trap.

Quote:So if my friends in Japan are wrong, and consolidation isn't in the cards, that leaves monetization of debt as the only option to avoid a sovereign default. The Bank of Japan will be asked to pick up more and more of the burden of buying Japanese government bonds. Printed money will replace corporate savings and household pension funds as the chief source of demand for bonds. This is already happening.

What will be the result of debt monetization? That depends on whether it leads to inflation. Without inflation, interest rates will simply go lower and lower, and the government will be able to roll over its debt more and more cheaply. In other words, the situation that has prevailed for the past two decades will continue. But if inflation strikes, it could rise high enough to hurt growth, and therefore tax revenue, severely. That would mean game over -- Japan’s government would be forced to default (or to hyperinflate, which amounts to a messier version of the same thing).

Does that sound like someone else, who is doing this? S18

Sovereign Debt: Eroding Japan’s National Security: Japan’s rising public debt has implications that go beyond its economy.

Is China Following in Japan's Footsteps?

And now for some sanity, instead of superstition: Forget Debt As A Percent Of GDP, It's Really Much Worse
___________________________________________________________________________________________________
"INSIDE EVERY PROGRESSIVE IS A TOTALITARIAN SCREAMING TO GET OUT" - David Horowitz

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#71
... more unintended consequences ...

Allowing crude oil exports would compliment U.S. exports of LNG slated to come on line in 2017. Gotta love diversification!
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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#72
(12-08-2014, 10:00 PM)mr_yak Wrote: ... more unintended consequences ...

Allowing crude oil exports would compliment U.S. exports of LNG slated to come on line in 2017. Gotta love diversification!

Getting McDaddy to go along with that may be almost impossible, but I could be wrong. I wonder how many big Jackass contributors are into that line of work? S6

Incidentally, did you see this cartoon at that same site?

[Image: 7%20cartoon%202_635534243207747268_main.jpg]
___________________________________________________________________________________________________
"INSIDE EVERY PROGRESSIVE IS A TOTALITARIAN SCREAMING TO GET OUT" - David Horowitz

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#73
Baker Hughes in a report on Friday Wrote:The U.S. shale industry has yet to be hit by the slump in crude prices, , ,

three new U.S. oil-drilling rigs had been added in the last week.
link
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#74
(12-09-2014, 01:07 AM)John L Wrote: Incidentally, did you see this cartoon at that same site?

No thanks for pointing it out. I don't that the one on the left has any real teeth.
Fairer fight that way? S6
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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#75
(12-09-2014, 07:55 PM)Fredledingue Wrote:
Baker Hughes in a report on Friday Wrote:The U.S. shale industry has yet to be hit by the slump in crude prices, , ,

three new U.S. oil-drilling rigs had been added in the last week.
link

ConocoPhillips announced today that it is cutting it's 2015 capital budget a bit. Probably won't have much in the way of practical impact until a year or two out. Most projects underway will still get done. It's still planning on spending $5 Billion next year on Eagle Ford, Bakken ... etc.. (That's $5 Billion that won't be coaxed out of things like government currency reserves BTW). S5
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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#76
Yes, but meanwhile Oil crashes 5 pct, nears $60.

IMO, we enters oversold territory. Especialy true for oil stocks.

This decline seems a little bit artificial to me. There are too many political interrests for the US and the Saudis to bring oil prices down.
It works like ecnomic sanction, except that this is the only efective one.

I do think that the Saudis hope to crash US shale industry even if they may fail in that respect. But that it's not the only reason.

Lot of BS about 2015 projection going lower and how the world's economy is slowing...
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#77
Quote:This decline seems a little bit artificial to me.

More than a little bit, especially that the numbers of consumption and production did not seriously change.

Meanwhile, watch the US stock market. For all the talk about the goodness of low oil prices, oil companies are going south and the market follows....

and BP is doing fine, about to spend $1B on job cuts.
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#78
No blame for the Chinese mv?? Is this part of their diabolical plan to destroy Western Economies?
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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#79
I cannot see how China could have managed this.... but sure, they are the biggest beneficiaries.
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#80
They are managing it by importing less oil. There is a 2 million bbl a day excess in global production. If they only imported another 2 million bbls a day, problem solved!! There are Chinese fingerprints all over this one. Can't you see that they are being maliciously frugal!?
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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