18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Everyone is talking about oil and gas, which are fine and I am sure you’ll make some money in them. To date, Russia hasn’t weaponized their exports — still permitting sales of oil and gas to unfriendly nations. If they really wanted scorched earth, they’d simply turn off the spigots and let Europe fend for themselves.
Lost in all of that dialogue is the specter of a trump card being played with uranium. Russia is by far the largest producer of enriched uranium and unlike gas or oil — if they cut supplies of uranium to unfriendly nations — said nations can’t simply ask their utilities to make more.
As such, a conviction trade arises with uranium stocks. At this point there are several ways to win: expansion of nuclear power plants replacing oil/gas and also massive supply disruptions causing the price for U308 to skyrocket. We are still 50% off from the 2007 highs for uranium and to be honest – I cannot think of a better trade the next month.
My uranium longs are DNN, UUUU, LEU, UEC and NXE.
We’re going fucking nuclear — armed to the teeth with weapons of mass destruction. Who’s gonna stop me?
After news that Russia was halting wheat shipments into the EU, we saw an immediate spike in fertilizer stocks like MOS, NTR and LXU. But then it took on a far more ribald nature, as Wall Street always tends to do. Any company in the Ag science business is now popping off to the upside, as if there is famine right around the corner.
I had traded in and out of several of them and stood handsomely and proudly across from my monitor at session highs of +210bps until I went to walk the fucking dogs. As I write this I am barely up 1.1%. This is standard stuff for those who monitor these things.
There aren’t many safe havens today aside from refiners, ag, and select oils. Rails are strong too, only because they ship grain. The whole market is no obsessed with the food supply.
Oil is in between spaces now, unsure which way to go. But this recent headline out of Iran is helping bid it higher — now +1.5% for the session.
IRAN’S FOREIGN MINISTER AMIRABDOLLAHIAN EU’S FOREIGN MIN. BORRELL: NEW US DEMANDS IN NUCLEAR TALKS ARE UNREASONABLE AND CONTRADICT THE US’ AIM FOR A QUICK AGREEMENT.
The cancellation of Russian crude is predicated on the notion we can gather supply elsewhere. Without Iranian crude, they will have an increasingly hard time keeping the price of WTI down.
In other news:
PUTIN SAYS ON FERTILIZER MARKETS: THE SITUATION IS GETTING WORSE
Remember, Russia-Belarus-Ukraine are chief suppliers of fertilizer. As such, we are seeing the entire complex move higher from ADM to MOS even down to some Ag science stocks like YTEN, VIVK, RKDA and AGRI.
The NASDAQ is -200 but stable, likely pausing before a total fucking collapse into the close.
For a long time vulture capitalists have enjoyed an environment of free money and soaring asset valuations — leading to big dicked paydays and exalted net worths. We can see it in almost every new IPO since 2009 — price to sales rations north of 30 was/is commonplace. That era is 100% over, as inflation grips our throats and threatens to suffocate the economy.
The CPI came in hot at 7.9% and that’s rather conservative. I imagine next month’s number will be north of 10%. How does a central bank fight hyperinflation? Simple — it crashes the economy.
Here’s a price to sales table, courtesy of Stocklabs, for the tech sector. That’s right we have at least 50% of downside to get down to 2008 levels.
Even if we do not smash lower to 2008 levels, at 2.9x sales — we are still extremely overvalued on a historical basis. I know — the average stock is down 40% from their highs and you’re sick of losses. SIR — that was a bubble. What you are seeing now is a correction. To properly correct in an environment where money isn’t free, you will begin to see companies in search of capital. Those who cannot raise dilutive offerings will go bankrupt and see their shares swim all the way to zero. Back in the dot com days, I recall seeing innumerable stocks crash to zero and just 6-12 months prior were viewed by most traders as really great companies. If you’re company isn’t free cash flow positive, its share price is in danger.
If gas is too high, get an electric car pleb.
WHITE HOUSE: IF YOU DRIVE AN ELECTRIC CAR, HIGH GAS PRICES ARENT AFFECTING YOUpic.twitter.com/n2nPvW7j81
A couple years ago the US came to terms with Russia’s Rosatom to stop sending us to much damned enriched uranium. It was causing America to be fat and docile.
The agreement was set to expire on 31 December this year, which the DOC said would have resulted in “unchecked” imports of Russian uranium, “potentially decimating” the front-end of the nuclear fuel cycle in the USA.
Secretary of Commerce Wilbur Ross said: “This landmark agreement will contribute to the revitalisation of [the] American nuclear industry, while promoting America’s long-term strategic interests. It represents yet another success for the Trump Administration’s America First approach to international trade agreements.”
Prior to the amendment, the agreement allowed Russian uranium exports to meet about 20% of US enrichment demand, but now this figure will drop to an average of about 17% over the next 20 years, and will be no higher than 15% starting in 2028. The DOC says that, by extending and reducing the agreement’s export limits, the final amendment will enable the US commercial enrichment industry “to compete on fair terms”.
Get familiar with the name Rosatom — because this company is responsible for roughly 40% of the world’s enriched uranium — the type of stuff used to power your local nuclear power plant.
Breaking Uranium-GOLDEN SWAN EVENT- If Russian Uranium Enrichment is banned & U.S. Utility contracts into 2028 default & Utilities have to replace these. 700 M lbs of contracting is coming up not including these or new plants. Will U.S. Or Putin ban them first? #russia#Uraniumpic.twitter.com/6pEZPKfWkH
You're not going to believe these numbers!? US #Nuclear fuel brokers @EvoMarkets & 'Uranium Markets' have posted their closing Spot #Uranium Price as…. ?….. $59.00/lb #U3O8 ???? UP +$6.40 +12.2% with sellers now Asking $60.???? UNbelievable!! 10X Yee-Haws! ?? pic.twitter.com/mgXsSSA0OH
Spot U308 ht $125 back in 2007. Presently trading at $60, up 12% over the past day, given the circumstances — one could see the price magnetize back towards those 2007 levels.
I actually lost money like a clown, since I was in all of these fucking ag and oil names — which as you know were clown-shoed lower on rumors of more oil magically appearing out from the darkest corners of the planet.
None of that is important anymore — for war is still very much on the horizon and the idea of peace, although nice and fanciful, is most likely on par with gay giraffes driving iced cream trucks around SOHO.
RUSSIAN DELEGATION WILL NOT CONCEDE ANYTHING AT PEACE TALKS
Towards the end of the session in between licking my wounds, I was able to close out numerous day trades at a profit and halved my losses to just over 2% for the day — bad but not disastrous. I know the market was up most since March 2021 — but I wasn’t playing the bounce and I have been up everyday the past two weeks whilst markets for drubbed. I am now EAGERLY long uranium stocks after news and chatter that Russia might restrict their export of the resource — due to US sanctions. Russia is the chief exporters of downstream uranium, enriched, even supplying US with roughly 20% of its annual needs. The play here isn’t Russia alone but Kazakhstan too — who is by far the largest exporter of upstream Uranium. It should be noted Russia is more or less in control of the country, although they’ll pretend to be independent. If Russia forms a block with its allies to restrict all of their resources, namely uranium, the price is going to fly.
Hence the outsized gains in stocks like DNN, UEC, UUU, LEU, CCJ, NXE and URG today.
Also after the close, I got dumb lucky with a CRWD long, spiking hard on an earnings win.
Yesterday there were reports the House of Saud didn’t pick up the phone when Biden gave a ring for more oil — because there was nothing to be done. Today, suddenly, the UAE and Iraqi ministers offered up more crude and the price of WTI and Brent have collapsed in kind.
*OIL SUPPLY AND DEMAND ARE BALANCED: IRAQ MINISTER
*THERE’S NO SHORTAGE IN OIL MARKETS: IRAQ MINISTER
*IRAQ PRODUCING 4.4M B/D OF OIL: MINISTER
*IRAQ HAS ABOUT 6% OF PRODUCTION AS SPARE CAPACITY: MINISTER
*IRAQ CAN INCREASE OUTPUT IF OPEC+ REQUIRES: MINISTER
BLINKEN SAYS UAE IS GIVING SUPPORT FOR INCREASED OIL PRODUCTION
UK’S FOREIGN MINISTER TRUSS: WE WOULD LIKE TO SEE A COMPLETE AND IMMEDIATE BAN, AS WELL AS THE G7 DISCONTINUING ITS USE OF RUSSIAN OIL AND GAS.
UAE TO CALL ON OPEC+ TO INCREASE OIL PRODUCTION: FT
At the moment WTI is -11.3%, off the lows of -16% to $109. The complex was rallying intra day, got back up to $119-120 and now we are seeing hot money flee en masse due to a potential OPEC increase in supply.
Markets love this shit and the NASDAQ is +444 while the German DAX closed higher by 7.9%. The war trade is being unwound and you really have to place a lot of faith on several things here for things to go ‘back to normal.’
Russia and Ukraine agree on terms and end the war.
Russian oil off the market isn’t missed. They are the largest producer in the world.
Ancillary effects of canceling an entire nation of 140m people incurs a negative feedback loop.
My sense is people are being far too optimistic here and that’s okay for a trade — classic Wall Street bullshit. This rally can last for the balance of the week, or based off 1 bad headline can end by the close.
When cryptos first came to the scene it was viewed as this Wild West frontier of finance where people could be free from the yoke of government regulation. It was good while it lasted, but now they’re just like any other asset and the government in fact has their beak just as far up Coinbase’s ass as it does Jp Morgan.
In view of the sanctions applied on Russia by the US govt, Coinbase blocked over 25,000 accounts for the crime of being Russian.
Coinbase indicated that the 25,000 blocked accounts were “related to Russian individuals or entities we believe to be engaging in illicit activity.” It didn’t specify when precisely they’d been blocked or how many of the restrictions were related to the current sanctions — in one example, for instance, Coinbase cited a 2020 sanction against a specific Russian national with 1,200 potentially linked accounts.
“COINBASE FULLY SUPPORTS THESE EFFORTS BY GOVERNMENT AUTHORITIES”
And that’s that.
In more interesting news is China. So far they are ignoring US requests to sanction Russia. It’s truly remarkable to see the weaponization of money and resources.
“China is definitely against unilateral sanctions that are not based on international law. Brandishing a sanctions baton will not bring peace and security. It will only lead to serious issues for the economy and the quality of life in the corresponding countries,” Chinese FM
The US threatened China yesterday to fall in line else get sanctioned too. Markets do not seem to care at all, with the Dow now higher by 660, oil down more than 5%. The 10yr is inching back closer to 2% now and 30yr mortgages approach 4.5%.
This is a pretty binary market. There is immense risk premium in commodities now while having an extremely oversold tape due to risk of war. Any news that is viewed constructive towards peace is going to unwind this trade and that’s exactly what’s happening this morning.
AIDE TO ZELENSKIY SAYS UKRAINE READY FOR DIPLOMATIC SOLUTION
Whether or not if this is a real outcome is immaterial for at least right now. Markets love to dream and presently the DAX is +6.3% and commodities are through the ringer. It would seem there is about $20-25 in additional premium on WTI, so buying up here on this dip might in fact prove unprofitable should Ukraine and Russia come to terms.
Naturally, if you took time to think this through you’d realize the risk to supplies are still present even after a peace accord, since the west has chosen a scorched earth approach to Russian relations. Ergo, all of those basic materials we need will still be off the market even after peace in the Ukraine.
But we’re heard this before and I find it hard to believe Russia is going to stop short of Kiev. If we pop at the open and then fade and God forbid close red — it will be a disastrous outcome for bulls. This is not a likely scenario, as this types of rallies usually hold up, barring some bad news.
Here are some other headlines.
“China is definitely against unilateral sanctions that are not based on international law. Brandishing a sanctions baton will not bring peace and security. It will only lead to serious issues for the economy and the quality of life in the corresponding countries,” Chinese FM
CHINA’S FOREIGN MINISTRY SPOKESMAN ZHAO: CHINA AND RUSSIA MAINTAIN ENERGY AND TRADE COOPERATION.
GERMAN CHANCELLOR SCHOLZ SAYS WE ARE CERTAINLY NOT SENDING WARPLANES TO UKRAINE
RUSSIAN FOREIGN MINISTRY SAYS: UNITED STATES MUST EXPLAIN THE BIOLOGICAL PROGRAMMES IN UKRAINE
KREMLIN SAYS: UNITED STATES HAS DECLARED ECONOMIC WAR ON RUSSIA
CHINA HAS ORDERED REFINERS TO HALT EXPORTING GASOLINE AND DIESEL IN APRIL
RUSSIAN DEFENSE MINISTRY SAYS: HAS OBTAINED DOCUMENTS THAT PROVE UKRAINE PLANNED AN ATTACK AGAINST DONBASS IN MARCH
She served under every President since Clinton and this Ukrainian American bitch keeps popping up on my radar, always meddling and always seemingly evil.
Here’s Victoria Nuland circa 2015 caught on tape in what appears to be her appointing politicians in Ukraine. She was the architect of this whole grand experiment.
“I think Yats is the guy who’s got the economic experience, the governing experience. He’s the… what he needs is Klitsch and Tyahnybok on the outside. He needs to be talking to them four times a week, you know. I just think Klitsch going in… he’s going to be at that level working for Yatseniuk, it’s just not going to work.
He’s now gotten both Serry and [UN Secretary General] Ban Ki-moon to agree that Serry could come in Monday or Tuesday. So that would be great, I think, to help glue this thing and to have the UN help glue it and, you know, Fuck the EU.”
Before that she was the principal deputy foreign policy adviser to Vice President Dick Cheney — helping him craft his fucked war in Iraq and then Bush made her the Ambassador to NATO where she spearheaded the task of gathering the ‘coalition of the willing’ to fuck Iraq and Afghanistan over in a most egregious way — both failed ventures, it should be noted.
During the 2014 coup in Ukraine, Nuland was appointed lead for the “Revolution of Dignity” taking at least $1 billion in American tax payers coin and giving it to Ukraine in order to arm them. In 2016 she started to saber rattle against Russia, detailing a plan for our new vassal state:
Deter further aggression through the projection of strength and unity with allies;
Build resilience and reduce vulnerability among friends and Allies facing Russian pressure and coercion;
Cooperate on core national security priorities when U.S. interests and Russia’s do align;
Sustain ties to the Russian people and business community to preserve the potential for a more constructive relationship in the future.
The main goal of her plan was not to bring Ukraine and Russia together, but instead to arm them to the fucking hilt — and judging by what we are seeing in the war now — she was successful in doing so.
At the onset of the war nut jobs were running rampant with a theory that Putin acted on Ukraine to destroy biolabs in Ukraine that were creating NEW COVID strains that was to be leaked into Russia. Why? Perhaps Moloch.
I, like many other normal people, dismissed it as more QAnon bullshit, until this dropped today in her testimony to congress.
Why the fuck does the US and Ukraine have joint biolabs and does she really think we’re stupid enough to believe Russia upon entering said labs will find something like anthrax or ‘The Plague’ and release it into the country? THEY ALREADY HAVE THAT SHIT IN RUSSIA and likely have more biological weapons than we do. The idea that Russia would leak already known pathogens into a country they consider part of Russia is ridiculous.
So what are we hiding there?
China seems concerned.
China accuses the U.S. military of operating “dangerous” biolabs in Ukraine #
