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Whipsaw Wednesday – Biden Calls for Unity, Markets Mildly React

Russia mobilises for assault on Kyiv as its troops storm Ukraine |  Financial TimesNothing has changed.

Russia is still advancing on Kyiv, so talking about it is not going to make it go away but, as I keep saying, Russia is just the market's excuse for a correction – not the reason for it.  It kind of worries me that NOW the Government is distributing anti-viral Covid pills to pharmacies – with the plan being you get a pill if you test positive/.  Is this too little, too late for our 952,509 dead or just too little for the next variant?  

Worldwide, 438M people got Covid, about 5% of the population.  In the US, 79M people got Covid 25% of our population – yet they will tell you how we didn't need to wear masks because they didn't work – except in the rest of the World,, of course.  If we can't learn from our mistakes, how are we going to avoid making them again?  

Of course, "Making the Same Mistakes Again" is the Republican Party's entire platform.  Putin may be a madman but Russia only had 4.5M cases of Covid and 20M deaths because they do believe in science over there.  Sure they only have half as many people as we do but still – WAY better results (1/10th as many cases) than we had in the US.  

Still Biden and his maskless audience seemed pretty comfortable hanging out and shaking hands and breathing on each other yesterday.  That must piss off Boris Johnson, who just got in huge trobule for having a maskless Christmas party just two months ago.  Covid all gone, I guess – only 59,209 dead in February – but it was a short month.  There were 3.7M new infections in February as well but everyone has decided to pretend it's over, so enjoy!

Anyway, we have bigger fish to fry now, so much so that Biden barely mentioned Global Warming, which I guess we'll put on the back burner.  On the front burner is Oil (/CL) hitting $112.50 per barrel early this morning – and the war has barely started!  That should give inflation a real boost to get March rolling and that's why Fed Chairman Powell, who testifies to Congress this morning, will still be on a path to raise rates at the March meeting.  

“We expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month,” Mr. Powell said in testimony prepared for delivery to the House Committee on Financial Services. He noted that the Fed will move toward a “predictable” shrinking of its big bond holdings after raising rates, a move that will take additional steam out of the economy.

“The near-term effects on the U.S. economy of the invasion of Ukraine, the ongoing war, the sanctions and of events to come, remain highly uncertain,” he said. “We will need to be nimble in responding to incoming data and the evolving outlook.”

So clearly Powell is going to be saying that the $4+/gallon you spend filling your tank up next week will be "transitory" which means, as we now know, that there's nothing the Fed can do about it so they'll just pretend it's not there and hope it goes away by the next meeting. 

Putin's Budget Could Get an Extra $65 Billion If Oil Rally Holds - BloombergSpeaking of meetings – OPEC (including Russia – boo, hiss) is meeting late today and the US and most of the World are BEGGING them to raise output but they too think the war is transitory (Russia certainly thought it would be over by now) and they don't want to end up over-supplying the market – especially when Vlad needs money to bomb Ukrainian civilians into submission.  By the way, what kind of BS are sanctions when you keep buying Oil from companies Putin owns?

Overall, commodities are up across the board (and /NG is at $4.80 this morning, up over $2,000 per contract – you're welcome!) as the Bloomberg Commodity Spot Index, which tracks 23 futures contracts, climbed 4.1% yesterday.  This is what I mean by reading the news and paying attention – these obvious trades pop up once in a while.  Overall, the index is up 100% since March, 2020 – driving our underlying inflation as much as rising wages.  

The sweeping sanctions on Russia from the U.S., Europe and Asia, as well as surging costs to send ships into the war zone, are bringing trade deals with the country to a virtual standstill. Russia is a major supplier of crude, natural gas, grains, fertilizers and metals such as aluminum.  The war is worsening a global cost-of-living crisis that has sent inflation rates in the U.S. to the highest since 1982 and has created a dilemma for central bankers worldwide as they weigh the need to increase borrowing costs against the risk of stunting economic growth.   

Russia and Ukraine also supply more than a quarter of world wheat exports, a fifth of corn sales and a similar share of barley shipments, plus about 80% of sunflower oil cargoes.  Europe depends on Russia for about a quarter of its crude oil and a third of its natural gas. Russian aluminum typically accounts for about 10% of U.S. imports. 

This stuff will not get better just because we clap for it at a State of the Union Address!  

Image of I do believe in fairies.

Animated GIF: Kiev, Ukraine before bloodshed, and after | MPR News

 

 


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  1. Good Morning.


  2. i wish someone would take out that convoy even the odds abit.


  3. The good news is the convoy is Russian made, bad news is so are the rockets…. :(


  4. Hi Phil, how do you feel about C?

    Pharm if you're around, KPTI? It was a great trade and are down again, thoughts on recent news.



  5. Oil backwardation is insane. Long July Short April is almost $14K! 


  6. A Tale of Two Speeches


  7. Good morning! 

    Convoy/Tommy – You would think someone could auto-pilot a plane to ram it and at least slow them down.  Or this:

    Russian made/1020 – I think that's part of the problem – it's been a long time since we've been able to test our toys against the Russians – I'm sure there's a lot of people who are very excited about fighting a proxy war.

    C/Kustomz – Good value bank but hard to say who's going to get hit by sanctions. C has not been very cheap lately so hopefully they fall back to $50, where I think the risk will be worthwhile.

    Oil/Rn – Gives you an idea of how long traders think this will last. 

    Click for
    Chart
    Current Session Prior Day Opt's
    Open High Low Last Time Set Chg Vol Set Op Int
    Cash - 103.41 103.41 103.41 20:59
    Mar 01

    103.41s*
    7.69

    -
    95.72

    -
    n/a
    Apr'22 107.12 112.51 105.35 107.45 09:50
    Mar 02

    -
    4.04 387365 103.41 294694 Call Put
    May'22 103.43 108.47 102.03 104.01 09:50
    Mar 02

    -
    3.80 113699 100.21 230104 Call Put
    Jun'22 99.00 103.38 97.82 99.28 09:50
    Mar 02

    -
    3.04 109870 96.24 216242 Call Put
    Jul'22 94.90 98.52 93.92 94.98 09:50
    Mar 02

    -
    2.34 45234 92.64 85342 Call Put
    Aug'22 92.14 94.67 90.85 91.45 09:49
    Mar 02

    -
    1.91 35188 89.54 74267 Call Put
    Sep'22 89.50 91.80 88.60 89.16 09:50
    Mar 02

    -
    1.82 39282 87.34 94042 Call Put
    Oct'22 88.00 89.98 87.00 87.51 09:28
    Mar 02

    -
    1.62 14837 85.89 61271 Call Put
    Nov'22 86.31 88.43 85.71 86.39 09:46
    Mar 02

    -
    1.68 9589 84.71 55196 Call Put
    Dec'22 85.50 87.23 84.44 85.01 09:50
    Mar 02

    -
    1.33 63192 83.68 246541 Call Put
    Jan'23 84.29 85.84 83.64 83.64 09:39
    Mar 02

    -
    0.96 3492 82.68 49501 Call Put
    Feb'23 83.33 84.66 82.56 82.76 09:39
    Mar 02

    -
    0.99 3109 81.77 39936 Call Put
    Mar'23 83.32 83.70 81.58 82.40 09:33
    Mar 02

    -
    1.47 8800 80.93 45751 Call Put
    Apr'23 80.70 81.40 80.17 80.17 17:47
    Mar 01

    80.17s*
    1.12 8092 79.05 26312 Call Put
    May'23 80.28 80.38 79.48 79.48 19:09
    Mar 01

    79.48s*
    1.09 6125 78.39 29107 Call Put

  8. Powell is doing well – keeping a positive tone.

       

    Still, you have to zoom out:  

       

    Oil couldn't hold up on the inventory report – still $106+ though

    CL1:COM +2.86%Mar. 02, 2022 10:30 AM ET14 Comments

        


  9. Inflation, explained by eggs


  10. Those Russian tanks are hybrids compared to the Abrams, which takes 2 gallons to go a mile. 

    An armored division of the Army can use as much as 600,000 gallons of fuel a day. A tank like the M1 Abrams gets about .6 mpg, and a cargo vehicle like the M-1070 semi-trailer (designed to haul tanks) gets approximately 1.2 mpg. 

    That's a lot of extra oil Putin is burning.



  11. Phil / PARA – Moving up pretty well from 28 to 34….. do you see any news or do you see any reason for this to continue?


  12. PARA/Batman – I just thing people were very uncertain about what they were going to do and, as it turned out – they just changed their name so now they can value the stock as it is – which is a hell of a lot higher than where it's been trading (as I may have mentioned once or twice).  

     

    Top Trades for Wed, 13 Oct 2021 09:16 – BYD, GOLD, HPQ, PFE, SPWR & VIAC

    Top Trades for Wed, 01 Dec 2021 12:52 – VIAC, INTC, MO, WBA and IBM (again)

    Top Trades for Tue, 04 Jan 2022 13:17 – VIAC

    As long as they are below $40 they are an excellent buy-out candidate.


  13. Not as bad as feared:

    The Fed chairman said it was too soon to tell how Russia’s invasion of Ukraine and its repercussions would influence the U.S. economy, but his remarks suggested growing urgency to tighten policy.5932 min ago 4 min read

    All our times have come
    Here but now they're gone
    Seasons don't fear the reaper
    Nor do the wind, the sun or the rain
    We can be like they are
    Come on, baby (don't fear the reaper)
    Baby, take my hand (don't fear the reaper)
    We'll be able to fly (don't fear the reaper)
    Baby, I'm your man – BOC 



  14. Geez .. PARA now stands for Parabolic!


  15. A lot of stocks getting bought with abandon now that 0.5% is off the table.  

    War must be over too.

    Webinar time!


  16. Sorry, power cut out – back now.


  17. So, between the Top Trade Alerts and the Dec 30th Watch List, we decided there are still tons of things we can buy cheaply – which means we are in no hurry to buy since there is still a War, Inflation, Global Warming, Supply Chain Issues, Debt, Rising Rates and a Slowing Economy – even if we pretend 2,000 people a day dying means Covid is over – like everyone seems to want us to do.

    Image

    Sure, less than 0 is a recession but fuggedaboutit…


  18. Phil / COID deaths…. I know this could change based on efficacy agains new strains….  but most of the deaths are self inflicted by choosing not to ge vaccinated 

    Fully vaccinated people are 93% less likely to die of COVID compared to unvaccinated people

     

    https://fortune.com/2022/02/04/fully-vaccinated-93-percent-less-likely-covid-death-compared-unvaccinated/


  19. Phil COVID – better data on vacinated vs un vaccinated 

    How do death rates from COVID-19 differ between people who are vaccinated and those who are not?

    https://ourworldindata.org/covid-deaths-by-vaccination


  20. How to Defeat Russia


  21. Batman thanks for the link to good Data


  22. So, natural selection in action, right Batman?  cheeky