Comment of the Day
15th February 2023
Eoin Treacy
Feb 16
Eoin's personal portfolio: commodity long initiated and stock option long initiated February 14th 2023
One of the questions subscribers ask most often is how to find details of my open trades. To make it easier I will simply repost the latest summary on a daily basis until there is a change.
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A link to today's video commentary is posted in the Subscriber's Area.
Some of the topics discussed include: bitcoin extends rally, dollar firm, gold weak, oil steady, Wall Street steady, FTSE-100 new all-time high, weak Pound, China and Australia weak, India and Mexico firm.
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Britain's Easing Inflation Puts End of BOE Rate Hikes Into Sight
This article from Bloomberg may be of interest. Here is a section:
The concern is that inflation doesn’t tick down as quickly as the BOE anticipates. Prices increased 11.1% in October, the most in 41 years. That eased in each of the past three months, but the latest inflation reading at 10.1% remains five times the BOE’s target rate.
The BOE will be heartened by news that inflation in the services sector eased in January. It’s one of the key indicators being watched by policymakers, who see it as gauge of domestically generated inflation that is hard to shift once it takes hold.
The other red flag is wage growth, which is now running at the fastest pace on record outside of the pandemic as labor shortages hand workers unprecedented bargaining power.
The BOE fears inflation could become entrenched as companies keep raising prices to cover their salary costs. There were some signs of hope in the latest data, however, with figures for December alone showing a slowdown in private-sector pay increases.
Eoin Treacy's view
The bond market is signaling it is a little early to declare victory over inflation. Gilts yields continues to steady from the region of the 200-day MA and a sustained move below 3% would be required to question potential for continued upside.
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Air India made the largest plane order in commercial aviation history
This article from Quartz may be of interest to subscribers. Here is a section:
The White House was the first to announce the deal with Boeing, releasing a statement from president Joe Biden describing the deal as evidence of a strong economic partnership between the US and India. According to the statement, all the Boeing planes will be made in America and will create over one million jobs across 44 states.
The purchase was also welcomed by Indian prime minister Narendra Modi, who said it was evidence of “the successes and aspirations of the civil aviation sector in India.”
Air India was privatized in 2022 after a long run as India’s national airline. Currently, it only has a fleet of around 100 jets, most of them leased. The first batch of planes from Airbus is expected to arrive later this year. Boeing has yet to release a timeline for production.
Eoin Treacy's view
Freedom to travel quickly, both within and outside one’s country, is a major part of entering the middle classes for many families. The investment in widebody jets may be focused on the diaspora but rising living standards within India also promise to create a large population of tourists. India is investing $11 billion through 2025 to build 21 new airports. 8 have already been completed. Here is a section from a related article.
Development plans are also underway for small, underserved and remote airports as the subsidized Regional Connectivity Scheme expands. With 400 regional routes, another 600 are planned to connect to 156 airports.
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How America Took Out The Nord Stream Pipeline
This article from Seymour Hersh’s Substack may be of interest. Here is a section:
In December of 2021, two months before the first Russian tanks rolled into Ukraine, Jake Sullivan convened a meeting of a newly formed task force—men and women from the Joint Chiefs of Staff, the CIA, and the State and Treasury Departments—and asked for recommendations about how to respond to Putin’s impending invasion.
It would be the first of a series of top-secret meetings, in a secure room on a top floor of the Old Executive Office Building, adjacent to the White House, that was also the home of the President’s Foreign Intelligence Advisory Board (PFIAB). There was the usual back and forth chatter that eventually led to a crucial preliminary question: Would the recommendation forwarded by the group to the President be reversible—such as another layer of sanctions and currency restrictions—or irreversible—that is, kinetic actions, which could not be undone?
What became clear to participants, according to the source with direct knowledge of the process, is that Sullivan intended for the group to come up with a plan for the destruction of the two Nord Stream pipelines—and that he was delivering on the desires of the President.
Eoin Treacy's view
Pardon the pun but these are bombastic claims. I do not contest that the idea to get rid of Russia’s direct route to export gas into Germany was discussed. I’m sure it has been a major topic of conversation for US planners over the last decade, as shale gas production ramped higher. However, that in no way supports the contention that the USA did in fact blow the pipelines up.
There is no doubt that the editorial quality of the mainstream media has taken a beating over the last decade. That’s doubly true since many people now get their news from Twitter or TikTok. However, the fact this story was not in a newspaper that could exert full editorial control is a red flag to my mind.
Perhaps more importantly, if this claim were true, it would result in a major breakdown in the NATO alliance. Cutting off the import capabilities of a major ally is an act of war against Germany, not just Russia.
It is risible to think Germany would knowingly accept the cost of dealing with this condition. The country had to spend $83.3 billion on energy subsidies in 2022. To think any country would accept a threat to their sovereignty like that stretches credulity to breaking.
I am a strong advocate for freedom of speech. However, that is married with the freedom to question and particularly so when there is no supporting evidence in the reactions of interested counterparties.
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© 2023 Eoin Treacy
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