Wednesday, April 8, 2015

The House of Fraud: No oil glut - Saudi-Arabian oil production is falling

The narrative of a Saudi-Arabian oil glut dumping the oil price is in reality a fictional narrative. Production data on Saudi-Arabia actually shows that the crude oil production in the country is falling simultaneously with the oil price. There is no substance to the narrative that Saudi-Arabia has dumped the oilprice, unless it is paper oil or temporary oil in storage - both temporary effects.

Statistics of crude oil production in Saudi-Arabia below, via Trading Economics, who get their data from the EIA. Spot oil prices for WTI and Brent is directly from the EIA.
Saudi-bluffen: Saudi-Arabiens oljeproduktion och oljepriset.
If Saudi-Arabia has dumped paper oil in the form of financial futures, they will have to buy them back when they cannot deliver on the contracts, and the oil price will rapidly return. And if they have dumped their above ground oil reserves, the effect is temporary and exports will in fact slow down when the above ground storage will need to be replenished.

Either way, temporarily knocking out expensive North American shale oil production has been successfully achieved, either through dumping of futures, above ground storage or pure spin and hot air. The oil price will recover.

In fact, the oil production of Saudi-Arabia has fallen approximately 6% since august 2013. Any real oil glut from Saudi-Arabia is non existant.

In reality, Saudi-Arabia experienced national peak oil in november 1980 and the country hasn't managed to increase it's oil production significantly since 2013.


Friday, February 20, 2015

Scenario: The Race for the Dnepr

The following is a hypothetical scenario by novelist Lars Wilderäng, author of the Swedish military technothrillers Midwinter Dark (Midvintermörker) and Midsummer's Dawn (Midsommargryning), and the apocalyptic novel Starry Skies (Stjärnklart), having sold over 60 000 books in Sweden. International book rights through Massolit Agency.

Original blogpost in swedish may be found here. English is not my native language, and this text has not been checked for grammar and spelling by a second party, and should be considered a rough translation in Swedish Pidgin-English. My sincerest and most humble apologies for this, and please bear with me.

The scenario below covers the Ukraine war escalating and partially involving NATO forces. It is in 80:s war game fashion named The Race for the Dnepr.

Setup

The setup is much like present day. Russian army units are in place in Donbass (southeast Ukraine). In the scenario maps they are represented by the 200th Motorized Rifle Brigade from Murmansk, documented being in place in reality, and the 20th motorized rifle brigade from Volgograd (Stalingrad), as Tornado rocket artilleri has been documented in Donbass in reality. The 20th brigade is one of two russian units with these MRLS-systems. The 22nd Spetsnaz Brigade from Rostov is also in Ukraine and the 439th Rocket Artillery Brigade from the Kaukasus.

At the point of the scenario the Ukrainian 92nd, 93rd and 72nd Motorized Guards Rifle brigade have been rotated to the ATO, backed by the 55th Artilleri Brigade. All other units are non-mobilized or at their regiments and the Ukraine has only partially mobilized.

Due to increasing tension Russia has moved around 50 000 field troops to the border, from the 76:e airmobile division in Pskov, acting as a ground unit with it's lighter armoured vehicles and lighter tanks, and the 2nd and 27nd Guards Rifledivisions, the 122nd Motorized Rifle Division and Russia's shock force the 4th tank guards division.

Russian fascist and nazi terrorist batallions and their ukrainian counterparts, the volunteer batallions and home guard units on the Ukrainian side are not covered. In "war game terms" their function is that enemy field units cannot advance at will in new territory, but they cannot resist a full brigade assault and will be swept aside. The same will be apply to such units in future scenarios such as the Swedish Home Guard och Estonian och Finnish home guards.
Setup.
Day Zero: Casus Belli

The situation is becoming increasingly desperate as Russian units continue to break all attempts at a ceasefire in Donbas.

Finally desperate Ukraine decides to bring in the airforce, in spite of heavy Russian air defenses. They attack the terrorist battallions and Russian troops in a desperate attempt to stop the offensive.

In spite of several ukrainian Su-25 being shot down, a russian offensive is stopped north of Lugansk and thirty-something Russian AFV:s and tanks are destroyed and around a hundred Russian soldiers are killed in the airstrikes.

Russia calls this a massive breach of the "ceasefire", and calls for "war crimes" and "civilian massacre". The Kremlin says that they will enter the Ukraine with "peace-keeping forces" in order tå "kick out the fascistregime and nazis in Kiev and protect civilians from genocide and ethnic cleansing".

Russia sends in their own air force and the first air-to-air combat between equal fighters take place in Ukrainian airspace. Due to the Russian numbers Ukraine take massive losses and loses air superiority.

The president of Ukraine orders full mobilization, while the first Russian units officially crosses the border and units further back from the border are advancing towards Ukraine. During the night recon units and special forces seize important crossroads and choke points close to the border after having crushed the last intact border posts.

Dag One: The Battle for Kharkiv
The situation morning day one.
Initially Russia moves lighter units like their airmobile VDV divisions and Spetsnaz brigades, while the heavy divisions are regrouping to the border. During the night the 73rd VDV have crossed the broder and har heading south towards Kiev and the 27th Motorized Guards Rifle Division sweeps away all resistance north of Lugansk.

Ukraine mobilizes the 25th Airborne and stops Spetsnaz infilitration north of Mariupol.

Under a screen of massive airstrikes and carpets of artillery the 122nd Motorized Rifle Divison attacks Kharkiv while the 4th Tank Guards Division crushes all resistance in an offensive towards Kiev, in parallell with the 2nd Motorized Guards Rifle Division.

Ukraina succeeds in mobilizing parts of the 1st Tank Brigade outside Kiev and initially stops the Russian offensive, but the sound of battle is heard in the silent Kiev, where the power is out. The 1st Tank Brigade is hard pressed and risks being surrounded and overrun.

In the south Russian marine infantry enters the Ukraine and makes it's way towards Mariupol.

Towards the evening the Ukrainian president calls out to the international community for aid against the neighbour's invasion, while the Ukrainian mobilization continues.

The international community isn't silent, but no-one comes to the aid of Ukraine.

Except Poland.

The Polish president and prime minister makes a common appearance and says that Poland will never again be neighbours with the Russian mainland and will stand for Ukraine. Poland orders partial mobilization.

Dag två: The Cavalry is coming
Situation morning day three.
Ukraine still hasn't mobilized enough, but the first more mobile units have started to regroup towards the front, primarily the 3rd Helicopter Regiment.

Russian marine infantry is about to cut of Mariupol, and the defense of the city is abandoned. The initially orderly retreat turns into a rout as Russian airstrikes slauther the 72nd Mechanized Brigade, which practially is wiped out as a combat unit.

Kharkiv falls and the two motorized rifle divisions advances towards Poltava, without anything but light militia resistance.

In the north the retreating 1st Tank Brigade is wiped out and the road to Kiev is seemlingly open.

The first Polish elite units crosses the border.

2nd, 9th and 18th recon regimets rushes over the west Ukraine with their lighter vehicles, while the 1st Air Brigade and the 25th Airborne Cavalry Brigade swiftly airlifts and takes position by the southern crossings of the Dnepr and secures these before Russian special forces arrives.

Day three: The Kiev Offensive
The situation morning day three.
Ukrainian mobilization is almost done and the last units are moving towards the front, followed by two Polish armored brigades, which completes the Polish partial mobilization together with a mechanized brigade arriving later.

The Russian offensive stops in the south, with Russian units on one side of the Dnepr, hesitating on attacking the Polish NATO units. The same occurs along the Dnepr in the middle section of the front. Instead the Russians start an offensive towards Kiev, where they reach the suburbs, only defended by the Ukrainian 95th and 79th light airmobile brigades, backed by the 3rd helicopter regiments attack helicopters and the 26th Artillery Brigade.

Around Zaporizh the Ukrainian field units are retreating, stopping by the Dnepr crossings.

Dag 4: The Dnepr Line
The situation on the morning of the fourth day.
The assaults on Kiev continue, but the Dnepr line remains intact.

The first combat between Russian and Polish units occur as Polish and Russian units fight over air supremacy as Poland has proclaimed a Russian no-fly zone west of the Dnepr. On the grounds shots are exchanged and artillery duels occur, as Polish counter-artillery radar and coordinated artillery batallions take a heavy toll on Russian artillery.

NATO article 5 doesn't apply as it only covers attacks on NATO home countries. Poland has on it's own taken the Ukrainian side.

The 95th Ukrainian airmobile brigade ceases to exist as a functioning unit after massive casualties in the Kiev suburbs, but reinforcements arrive and the Russian offensive is stopped. The Ukrainian presidents hold a speech in Kiev, wearing a helmet outside, while combat is heard in the background.

The Russian General Staff considers if a possible dead-lock may be broken by a massive offensive across the polish defended middle front across the Dnepr. They are starting talks about tactical nukes for securing a swift breakthrough and crush the central front in an attempt to surround Kiev.

Dag 5: Ceasefire
The situation morning day five.
Through intensive diplomacy a temporary ceasefire is reached, in order to enable negotiations. Both sides lick their wounds and start digging in.

Russia enters the negotiations demanding the entire Ukraine east of the Dnepr to become a sovereign republic, and have proclaimed a "referendum" about this. Kiev refuses.

Polish special forces, having infiltrated east of the Dnepr, sends an encrypted message that they have observed tactical nukes being loaded in the heavy howitzers of an artillery batallion east of Kremenchuk.

Below we find unused standing Russian field units in the west, south and central military districts below, and remaining polish units (mostly not mobilized, except some units towards the border of Kaliningrad).

No units have been transported from the eastern military district. Two remaining brigades on the Kola peninsula not shown below.

The main point is that Russia, without transporting units from the eastern military district, can only go on the offensive on a single front if NATO gets even partially in the game, like the polish army in this scenario. Unless Russia brings out the tactical nukes.

Russia hardly will remove all units from the Baltic border, the Kola peninsula and especially from the Kaukasus. Moving greater amounts of units from the east military distrikt takes time and requires huge transport resources, although companies or maybe battalions already have been moved to the Ukraine war in reality, based on the etnicity in photos of Debaltseve and Donetsk "concerned miners".

Wednesday, June 11, 2014

P/E-ratio for Dow Jones, june 10th 2014 - 2014e: 17 2015e: 15

The weighted P/E-ratio for Dow Jones Industrial Average on the tenth of june 2014 is 16.9 for estimated earnings 2014 and 15.3 for estimated earnings 2015.

Estimates are retrieved from 4-traders.com and the index P/E is weighted. Individual P/E-ratio estimates from 4-traders.com below.

Sunday, March 30, 2014

Russia shortens crimean life expectancy by two years

The population of Crimea might shorten their lifespan by two years, by joining the Russian Federation. The life expectancy of dysfunctional Russia is below the global average, at a level where you find developing countries, and two years lower than Ukraine.

It is not a question of the old Soviet Union and socialism, as functional countries like Estonia have increased their lifespan since the fall of the Soviet Union. As for the heritage of socialism, one of the last socialist dictatorships, Cuba, has an life expectancy on par with the United States.
Click on the graphic for sharper resolution

Even though there has been positive developmens in the Russian Federation the last years, the life expectancy is still lower than it was at it's height during the Soviet Union. The russian society is highly dysfunctional.

It is understandable why Ukraine looks towards the west, and why Georgia is willing to fight for it's life, literally, to not become part of Russia, russian standard of living and russian healthcare. They think of their children.

It is noteable that the life expectancy started to fall during the Soviet years, three years before the dissolution of the Soviet Union. This might be an interesting indicator of impending collapse.

If you want to live longer, you do like Estonia and look westwards and not towards dysfunctional Russia. Or you just follow the general development of the world.

Data from the World Bank.

Tuesday, February 18, 2014

Apartment price indices for Sweden 1970 - 2013

Some people, especially Swedes heavy in debt in the largest Swedish cities, the banks, politicians, most economists and the real estate agents, claim that there is no housing bubble in Sweden because this time is different.

Below is apartment price indices for Sweden, spanning the period 1970 - 2013. Normally, when you see housing prices for Sweden you see prices for non-apartments, single standalone houses. The pricing bubble is even worse for apartments, which almost exclusivly are condominiums in Sweden, and not owners apartments, ie not real assets. A condominium is essentially only a club membership, and the club is frequently heavily in debt by itself. The club debts are not taken into account in the graphs below.

Recently the Swedish organisation for accountants tried to impose stricter rules for write-offs and depreciations for condominium clubs, as the clubs frequently never amortize and put away much too small funds for future necessary remodelling, renovations and standard maintenance. This was stopped short, as there was an outcry. The necessary higher condominium membership fees would crash the condo prices, but remember, there is no bubble in Sweden!

The lack of maintenance of Swedish condominium houses is a ticking bomb in itself, and on top of that you have the housing bubble as displayed below. Still, the international financial community is more than willing to finance this, as most of the financing is taking place outside of Sweden, and should be considered external debt. At present Swedish households alone have a debt of about 86% of Swedish GDP, almost all of it housing debt in various forms. The Swedish banking system is one of the largest in Europe, even the World, compared to GDP. Iceland, anyone?
Real apartment price index Sweden 1970 - 2013 (year 2000 = 100). "There is no housing bubble in Sweden!"
The inflation-adjusted prices were somewhat stable up until 1986. Since then real prices have increased by 754%. Compared to the average inflation-adjusted price 1970 - 1999, prices are up 521%. Yet, this is supposedly no bubble!

Nominal price index below.
Nominal apartment price index Sweden 1970 - 2013 (year 2000 = 100). "There is no housing bubble in Sweden!"
The indices above are for Sweden as a whole. The situation is much worse in particularly the capital, Stockholm, as well as in the second largest city1., Gothenburg.

1. By international standards, Gothenburg should more be considered a town, and calling Stockholm a city is stretching the imagination a little bit too far. On the other hand residents of Stockholm do have a very vivid imagination, considering that they generally deny the housing bubble.

Wednesday, December 11, 2013

Disqus admits security flaw - MD5-hashes disabled

Disqus admits that the MD5 security flaw exists and has removed the function från their API, disabling Gravatar support. Using the API in the manner of Researchgruppen or their employees or contractors is a breach of Disqus privacy policy and the account has been terminated.

The complete statement from Disqus regardning the MD5 flaw is available on their website.
"Disqus offers an API service that includes MD5 hashes of email addresses in order to use Gravatar, a commonly used third party service that enables users to display a consistent avatar across platforms. This appears to be a targeted attack on a group of individuals using pattern matching of their activity across the web, associated with email addresses used by those individuals. [...] ​Further, we are disabling Disqus’ use of the Gravatar service and removing the MD5 hash email addresses from the API."
Help Net Security has an article about the flaw, in which I, Lars Wilderäng, is quoted from this blog. I must re-iterate that it was the security engineer David Remahl (@chmod007 on Twitter) who made the the security flaw public. I only spread the news when I discovered what I considered real news and a serious breach of privacy in Disqus. My Swedish blog is the largest independent (not affiliated with any employer, media house, political party or other outlet) Swedish blog on serious subjects (ie not fashion, celebrities or sports), mainly economy, finance, environment and politics, and as such news published by me can spread fast.

Ordinary Swedish journalists generally lack the technological know-how to understand the technology and the serious implications of security flaws, and I've been consulted, but not quoted, by journalists in several other related cases. Mainly the Snowden files and the fact that many Swedish government organisations, municipalities and companies are open for industrial espionage by using Google or Microsoft e-mail services, even for internal organisation mail, which NSA have full access to.

Industrial espionage is one of NSA:s tasks, and may be used in order to let american companies have an advantage when placing bids on contracts, as they may see other bidders offerings to for example Swedish government organisations. NSA may also get intimate knowledge of key individuals private lives, which also can be used to the advantage of US companies and foreign policy, for example by easier making friends with politicians by discussing their hobbies or favourite subjects when meeting informally. The man on the street may very well lose his job due to unfair competition practices on behalf of US companies cooperating with the NSA, but most people don't think they have anything to fear from the monitoring of the Internet.

Back in Sweden, the Bonnier Group tabloid Expressen is now publishing names of private individuals, not politicians, who have commented on hate speech sites, identified by the Disqus security flaw.