Skip to main content

Known unknowns! Iran flexes its muscles

Rumsfeld famous quote "for there are things we know, there are things we know we don't know and then there are things we don't know we don't know" (better known as: Shit happens!).  Still, we've know for some time now that things in Iran were heading on a collision course.  Stuxnet was clearly part of a "dirty covert war" no one knows who started it all -- but there are only a few place were such a sophisticated worm program could have been written (and the delivery system was amusing -- apparently via peer to peer sites! you know these sites were you download movies illegally!).  Then not so subtle was death; for a time the world's most dangerous profession was Iranian nuclear scientist -- several died from bullets, other via bombs and one apparently from gas attack!

No doubt this slowed down the Iranian's "peaceful" objective to gain nuclear technology, now buried in 20 different sites across the country.  Iran has been seething at this "cold war" with few weapons at its disposal (although rumors are that they've been arming the Taliban and other "anti-Western" freedom fighter (ok so they call them that, we call them terrorists -- its a matter of where you sit in the debate).  The stakes were just raised last week when the UK imposed an embargo on all oil products from Iran (BP is still a British company -- so the embargo stung). This morning Iran decided to "invade" the British Embassy and take hostages (anywhere between 6 and 8 people were abducted).  

Iran is not loved, first of all the rest of the Middle East hates their guts, Iran is not an Arab country its Persian, its dominant religion is Shi'a Muslim, not Sunni -- ok same branch, but tell that to the protestants and Catholics -- some rather impressive wars have been fought on that difference (BTW they are also divided, Sunnis are mostly in the South and are mostly Arab...).

So, the Brits are really pissed, the American never in love with Iran (at least not since 1979 -- that's when the Iranian monarchy was deposed -- puppet regime of the U.S. CIA), a good chunk of the 6th fleet "happens" to be around the corner (just outside the Syrian border and in the Persian gulf).  Israel is really getting nervous (there are apparently 10,000 missiles aimed at Israel), the rest of the gulf would really like a regime change in Iran (see above), but will not actively participate (but will not get in the way either).  Russia's just had as much fun as it can stand from Iran.  Don't forget that it was Iran that was supporting the Chechen movement (and Putin just got the president's job back).  

No, the stars are not in a very good position for a peaceful resolution.  BTW if "war" is declared (really antediluvian concept), or an border accent occurs (more than likely) you can bet that oil prices will shoot up dramatically.  Finally, a note on the 6th fleet thing; that was made public last week, and everyone assumed that this was a direct consequence of the recent events in Syria -- no one made a move to change that narrative, although it made zero sense for America to get involved in that fight, but Syria is the direct path to Iran (Iran is basically just behind Syria.


Popular posts from this blog

Trucker shortage? No a plan to allow driverless rigs

There are still articles on how America is running out of truckers -- and that its a huge problem, except its not a problem, if it was a problem salaries would rise to so that demand would clear. Trucking is one of those industry where the vast majority of participants are owner/operators and therefore free agents.

Salaries and cost are extremely well know, "industry" complains that there are not enough truckers, yet wages continue to fall... Therefore there are still too many truckers around, for if there was a shortage of supply prices would rise, and they don't.

What there is though is something different; there is a push to allow automatic rigs to "operate across the US", so to encourage the various authorities to allow self driving rigs you talk shortage and hope that politicians decided that "Well if people don't want to work, lets get robots to do the work" or words to that effect.

This has nothing to do with shortage of drivers, but every…

Every punter says oil prices are on the rise: Oil hits $48/bbl -- lowest since September 2016

What the hell?

How could this be, punters, advisors, investment bankers all agreed commodity prices  in general and oil prices in particular are on the rise...its a brave new era for producers and exporters -- finally the world is back and demand is going through the roof, except not so much!

What happened?  Well energy is complicated, the world operates in a balance -- 30 days of physical reserves is about all we've got (seriously) this is a just in time business.  So the long term trend always gets hit by short term variations.

Global production over the past 12 months has risen by somewhat less than 1.5% per annum.  As the world market changes production becomes less energy intensive (maybe), but the reality is that the world is growing more slowly -- America Q4 GDP growth was around 1.9% (annualized) Europe is going nowhere fast (the GDP growth in Germany is overshadowed by the lack of growth in France, Italy, Spain (lets say 27 Euro members generated a total GDP growth of 1.2…

Paying for research

This morning I was reading that CLSA -- since 2013 proudly owned by CITIC -- was shutting down its American equity research department -- 90 people will be affected!

Now the value of a lot of research is limited, that is not to say that all research is bad. In fact, I remember that GS's Asia Aerospace research was considered the bible for the sector.  Granted, there was little you could do with the research since the "buy" was for Chinese airlines...that were state owned.  Still it was a vey valuable tool in understanding the local dynamics.  It seems that the US has introduced new legislation that forces brokers to "sell" their research services!  Figures of $10,000 an hour have been mentioned...

Now, research can be sold many times; if GS has 5000/6000 clients they may sell the same research 300x or 400x (I exaggerate) but this is the key -- Those who buy the research are, I presume, prohibited from giving it away or selling it, at the same time the same rese…