USA Election 2000 – Iranian Edition (And Your $$)

The Iranian election becomes another election mess.  The American (the first edition) version requires a Supreme Court to give a final answer.  Iranian one?  A Supreme Leader gives a final say. 

And the Supreme Leader says the incumbent wins.

In a situation like, just like the American original version, a decision made by that few individuals, the decision is ultimately political, whatever the cloak it is actually.  In the American original version, it is under the cloak of law.  In the Iranian version, it is under the religious leader’s cloak.  Note that the Supreme Court Justices are life time appointments just as well.

What ticked?  Not bribe.  As usual, what is the alternative of the decision?  Supreme Leader weighted between incumbent and challenger.  Who is a bigger threat to the Islamic Republic?  Or for that matter, to the power of clergy?

Challenger is always about “change”.  Incumbent is always about “you know what you get.  Don’t rock the boat.”  This applies to any institution (note, not necessarily a country), any selection process (note, not election), any candidate. 

The next question is: what about the protests?  Supreme Leader is confident he can manage the internal crisis.  If the protests get any worse, it will be between a Tiananmen Square (Iranian Edition) and End of Soviet Union (Iranian Edition).  Certainly, Supreme Leader thinks the worst scenario is Tiananmen Square.

Alright, so what does one care about this latest news episode?  Political instability drives up the prices of commodities, in particular, the commodities the geography produces.  So, in this case, oil.

Oil will become more expensive, if this goes on.  The only way oil does not increase further is traders believe the recession is so bad there is no demand for oil anyway, i.e. demand will decrease even if the quantity of supply is not being affected by the political instability of Iran. 

Oil exploration companies’ stocks go down (not up).  The core material of their product gets more expensive, so their profit margins get squeezed.  Consider the following company, BP:

http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=1&chdet=1245437692449&chddm=10220&q=LON:BP&ntsp=0

The companies that get affected less so are the American oil exploration companies who have less exposure to Middle East (or think about the Canadian oil companies).  And if you happen to own renewable energy companies’ stock, you should see prices going up for your stocks.  Given today is Friday, one may be tempted to clear their stock inventory just in case the next episode of this Iranian Election comes up and affect the portfolio. 

The things that really distort the prices of stocks affected by Iranian election are: Obama’s announcement on health care and Obama’s announcement on the merger of OTS and OCC.

The Common Interests of BP and Georgia, And Your Money

Ever since the Russia-Georgia conflict became the hot news item, the share prices of British Petro moves as CNN news stories are read.  BP almost became the barometer of this crisis.  Why BP?  They got their pipelines there.  BP is also having a power struggle from Russian government which wishes to take more control of BP’s operation in Russia.  Therefore, if Russia will occupy the land where BP’s pipelines are, it will carry more political risk to BP.   

 

Therefore, any news of resolution will help BP’s price.  The closing price of BP on 08.08 F is US$60.86 at LSX.  The closing price on Monday is 58.7701 down 3.4%.  The good news on Tuesday brought up the price to $59.32.  Just now, Bush’s announcement helped bring up the price to US$59.60.

 

BP is not traded in the US.

 

However, all US oil companies are going up, exactly because they are away from the conflict area, consistent with the argument from Friday’s post: political risk of this conflict was already being priced in the currency market.

 

So in the short run, Chevron, Exxon, Petro Canada, Marathon and ConocoPhillips are all going up.  Of these 5 companies, 4 are US and 1 is Canada.  The other oil company that is falling is of course Shell which is much closer to the conflict area.

 

Is the cease fire going hold?  First of all, here is the six point agreement:

1)       Negotiate the status of the 2 separatists provinces

2)       Non violence

3)       Ultimately stops military actions

4)       No interruption against humanitarian aids

5)       Georgian forces returned to permanent positions

6)       Russia returns to pre conflict positions

 

Now, Russia’s intent is on regime change because the sitting Georgian president is pro West and took Georgia to NATO.  Nothing here actually addresses the core issue.  If there is more information to what is public available, then a cease fire will actually take place.  Else, this is to buy time.  Aljazeera confirms (in addition to US/UK media) Russian troops are still moving.  Therefore, EU or France actually got a worse deal than staying silent.  A broken deal just proves than EU/France is an irrelevant and ineffective broker.  

How Will This Work For Dafur?

The arrest of Karadzic removes the condition for Serbia to join European Union.  This arrest is another evidence an individual cannot escape the will of a state.  Karadzic has been successful to remain free for 13 years (since 1995).  What makes arresting war crime suspect so difficult?  What does this arrest say about Dafur?

 

A NATO raid back in 2005 July could not capture Karadzic.  That is because one can only evade this long if state institutions are protecting him.  Once the incentives of arresting him, i.e. European Union membership for Bosnia, out weighs the incentives of protecting him, i.e. protecting the co-founder of Serbian Democratic Party and the intellectual advocate of Serbian nationalism. 

 

Of all the war crimes, genocide has the most difficulty to try because of the definition of the crime.  Genocide is defined as “acts committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group”.   The difficulty lies with the word “intent”.  The wording “in part” also gives trouble to prosecutor. 

 

Karadzic will be tried by the International Criminal Tribunal for the former Yugoslavia (ICTY), i.e. not International Criminal Court.  Why is that?  Well, the United States of America never supported the idea of Internal Criminal Court.  America favors courts appointed for a specific war conflict.  In doing so, America has a better control as to the scope of the trial, the suspects the court will try, the timing of court creation, budgeting, judge appointments and so on.  What risks do these items pose to America that America would want to assert so much control rather than simply control the funding of ICC?  America is involved in a lot of military conflicts.  It is only a matter of time that someone will fall under the definition of war crime.  Having a court that is originated from one military event makes the court to have defined end.  Thus, it is far safer than having a court that serves a never ending purpose (as long as there are military conflicts, there will be potential of war crime).  Besides, once an international court gets its own budget, it becomes institutionalized and it has own life that America can never truly end.  It has been said that Kissinger does not travel overseas because he wants to avoid being served for war crime arrest from individual countries (not ICC). 

 

The prosecution of Omar al-Bashir will make the Sudan government elite more insecure.  This in turn will make the government more inflexible in any peace negotiation.  If not, then what will happen to Dafur if indeed there will be no UN presence?  How bad will it be?  Who will then be responsible elevate the pain and suffering in that area?  There will not even be a third party to monitor and document the activities in Dafur.  How will the prosecution be helpful in elevating atrocities then?  If the purpose of trial cannot be achieved by this prosecution and this prosecution will serve as an impediment to peace process, then what purpose does it serve?

 

Exactly for that reason, African Union wants a delay in this prosecution.  So are Arab League and Organization of the Islamic Conference.  Of course the latter two have other motives as well, namely Sudanese government is run by Muslims. 

 

What, then, motivates the timing of this prosecution?  China’s veto against the resolution against Zimbabwe in UN.  Britain has a strong motive for this tick for tack in another African country where China has a strong interests, i.e. oil.  Zimbabwe serves the interest of Britain since British descents control majority of farm land in Zimbabwe and they continue to enjoy the rights to become British citizens.  This prosecution sets the stage for more embarrassing public relations episodes for China during this Olympics. 

 

Combating Oil Prices? Italians Got It Right

Everyone has been blaming speculators as the source of oil price increase.  No one has a clue what to do with it yet.  CNN’s news story contributes the fall of prices on dollar increases, among others, while saying these factors are all short term.  If speculation is the reason, then Italians got it right this time.  And Italians got a solution that can last for more than a few days. 

 

Most politicians blame speculation as the greatest contributing source to increase in oil prices.  To combat this price increase, environmental groups point out that this is time for renewable energy while politicians contemplate tax rebate.  This is nothing new.  The new part is these argument get media attention, i.e. oil price increase is strengthening the cause of environmental groups.  To combat this price increase, Italian finance minister Giulio Tremonti proposed to increase the margin requirement for futures trading.  By increasing the margin, the amount of money required to speculate the same volume of commodity increases as well.  This suppresses the quantity of speculative trades.  Therefore, the oil prices will go down, if indeed speculation trading is the cause of high oil prices.  This is a very effective way to combat oil prices and working against the interests of the environmental groups because a lower oil price diminishes the incentives of renewable energy.  No money can buy this much media coverage for the environmental groups.  No money can buy (or political donation) this much air time from the politicians, even if they were committed to the cause.  On the issue of renewable energy, speculation trading is an important ally of environmental groups.  

 

The pro is great.  What about the con?

 

Increase the margin requirement makes money more expensive.  This will exacerbate the credit crunch.  A lot of these hedge funds and speculators are pension funds and mutal funds.  Making speculation expensive is to depress the returns on pension plans.  Who suffers?  Pensioners suffer the most. 

 

The other con is that this is still short term.  A solution is still not on the table.  This is a buy-time solution.

 

Every crisis is an opportunity to stay ahead of competitors.  Japan is trying to stretch this technology gap against America.  G8 is, like any other high publicized event, an excellent opportunity to promote products.  Japan is doing exactly that to promote their zero emission cars and buses.  Will this energy crisis get America to some action?  Both McCain and Obama are still thinking about what to do with the tax money.  This is so 1980’s: supply side economics.  Commercializable solution comes when there is sufficient demand for a product.  This high price is helping the demand for the green collar jobs Obama is talking about, not refunding the consumers.  

 

The possibility that green collar jobs may be years away is the source of talks about nuclear energy cooperation.  While it is true that one disaster event is too many, nuclear technology is available (versus renewable energy), operational and the cost being predictable and controllable.  Environmental groups focus should not be why nuclear energy is bad.  Environmetal groups focus on making the solution works: what will make the renewable energy technology commercializable and how to create those conditions.  If it is about the game rules of the market set-up (as in the case of margin requirement), then this is the prime to mobilize the organizational infrastructure, since it is election time.  

 

Environmetal Groups Mis-focused G8

CNN’s G8 summit news story focuses on the criticisms against the emission control proposed by G8.  Both CNN (and other news sources) and environmental groups fail to recognize other more important items, some of them relevant to this climate change topic.  As a result, they misfired. 

 

While the G8 agreement is unproductvie, something else actually may have an impact.  This something else is against the interests of environmental groups.

 

Most politicians blame speculation as the greatest contributing source to increase in oil prices.  To combat this price increase, environmental groups point out that this is time for renewable energy.  This is nothing new.  The new part is this argument gets media attention, i.e. oil price increase is strengthening the cause of environmental groups.  To combat this price increase, Italian finance minister Giulio Tremonti proposed to increase the margin requirement for futures trading.  By increasing the margin, the amount of money required to speculate the same volume of commodity increases as well.  This suppresses the quantity of speculative trades.  Therefore, the oil prices will go down, if indeed speculation trading is the cause of high oil prices.  This is a very effective way to combat oil prices and working against the interests of the environmental groups because a lower oil price diminishes the incentives of renewable energy.  No money can buy this much media coverage for the environmental groups.  No money can buy (or political donation) this much air time from the politicians, even if they were committed to the cause.  On the issue of renewable energy, speculation trading is an important ally of environmental groups.  

 

G8 is, like any other high publicized event, an excellent opportunity to promote products.  Japan is doing exactly that to promote their zero emission cars and buses.  Every crisis is an opportunity to stay ahead of competitors.  Japan is trying to stretch this technology gap against America.  Will this energy crisis get America to some action?  Both McCain and Obama are still thinking about what to do with the tax money.  This is so 1980’s: supply side economics.  Commercializable solution comes when there is sufficient demand for a product.  This high price is helping the demand for the green collar jobs Obama is talking about, not refunding the consumers.  

 

The possibility that green collar jobs may be years away is the source of talks about nuclear energy cooperation.  While it is true that one disaster event is too many, nuclear technology is available (versus renewable energy), operational and the cost being predictable and controllable.  Environmental groups focus should not be why nuclear energy is bad.  Environmetal groups focus should be what will make the renewable energy technology commercializable and how to create those conditions.  If it is about the game rules of the market set-up (as in the case of margin requirement), then this is the prime to mobilize the organizational infrastructure, since it is election time.  

印度洋的暗湧—–辛巴威、肯亞、中聯石化及印度

 original (2008.04.10, 2008.04.11)

 

 

 

中非洲國家辛巴威(ZIMBABWE)的選舉已經結束，但迄今仍未公佈結果，個中原因大家當然心中有數，鄰國贊比亞(ZAMBIA)為此舉辦高峰會，辛國總統穆加比將不會參加，但反對黨的黨魁卻出席是次會議，這將會是反對黨一次宣傳他們的政治抱負、向鄰邦宣示友好、尋求支持的大好機會。

辛巴威與贊比亞毗鄰而居，共同擁有一條漫長的邊界，他們的政治安定是唇齒相依的，如果辛國的政治不穩，贊國將會有大批難民壓境，這不光影響贊國的政治，更嚴重是影響贊國的經濟，更有甚者影響世界的資源供應。 

事緣位於非洲內陸的贊比亞是產銅國，名列全球第十位。這個被鄰國包圍的贊比亞，不論那一邊邊界的鄰國有戰亂那麼嚴重，即使有點兒風吹草動，贊國不能維持正常的生產量，銅價焉能不波動。再者贊國位於內陸，由於沒有出口港，它的銅須經肯亞(KENYA)出口，長路漫漫，交通稍有延誤，國際銅價會怎樣，自然不言而喻。幸好肯亞有良好的基礎建設、深水不涷港、政治經濟穩定，一向是東非和中非的貨物集散地、東非的金融中心，可是這個除南非以外的非洲桃源同樣面對政治危機。因此贊比亞政府真是寢食難安。

 

由肯亞往東南走，便是非洲第一大島，馬達加斯加(MADAGASCAR)，石油蘊藏量為二十億桶，二零零七年九月中聯石油化工國際有限公司 (簡稱「中聯石化」，股份代號：0346)取得與馬國合作開採油田工程合約、興建250個加油站，以及擁有石油產品批發、零售的專營權。

這個合約對中、馬而言都是一大喜訊。中國是貧油國，為了找尋油源而苦惱，中國不但戰略儲備油不足，最近連日用油也告急。向海外收購石油公司，也受西方國家處處掣肘，現在能與馬達加斯加合作，是用油的一大突破。至於馬達加斯加，它的油田停產了六十年，如今有中國的資金與技術，對馬島的經濟當然有裨益。

 

看見中國在印度洋西岸機遇處處，引起印度的不安。印度在資源方面雖不及中國的緊絀，但印度一向為南亞的第一大國，西起非洲東岸、東至大小摩洛哥群島印度裔人口最多，雖然沒有在印度洋建立殖民地，但卻以印度洋為其禁臠，如今中國涉足於此，頗叫印度坐立不安。中國現在擁有十三億人口，核子武器，更何況印度的近鄰：東北的孟加拉、西藏；東鄰的緬甸，西接的巴基斯坦與中國都有或深或淺的友誼，印度如何是好呢﹗稍後，印度有需要和中國共商印度洋的安全事務，希望兩國均能各安並事。但如此一來，將會做成中國大陸找尋資源的「不便」。

大陸的石油公司出國收購西方的石油公司時屢屢遭遇挫折，外交上又經常碰壁，大陸的石油公司有須要學會降低政治風險，而此中佼佼者不是甚麼高人、教主，而是匯豐銀行。

 

當年，匯豐銀行為了減低因「九七」問題所衍生出來的政治風險，雖然以第一時間遷冊加勒比海，但遷冊不能提供足夠的政治保障，匯豐才又分別在倫敦、紐約掛牌，目的是要吸納更多的英美投資者。這些英、美籍的投資者會利用不同的渠道、正式或非正式的途徑遊說政府保護他們的既得利益，匯豐看準中國大陸是一個「錢」途無限的新興市場，但又怕五十年代的歷史重演，所以把匯豐的利益與英美投資者的利益結合，融為一體，做到你中有我、我中有你，敵我不能再分時，抗拒意識便會淡化，這是另一種的和親政策。

 

  大陸在贊比亞有許多銅礦，倘若印度現在插手肯亞及辛巴威的事務，無異是向中國施壓，目下印度已來不及了，也犯不著在現階段挑釁大陸，但隨著中國在非洲的影響力日增，印度插手這類資源供應國事務的動機和誘因只會愈來愈大，中印的齟齬將會不絕於耳。

 

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original:

https://royho.wordpress.com/2008/04/11/madagascar-oil-has-gone-chinese/

https://royho.wordpress.com/2008/04/10/kenya-zimbabwe-and-your/