Wednesday, January 14, 2015

COINCIDENCE

Back in the last century, when we were very young, both T & S and I were in the information gathering business, me with the military and she with...ah...a branch of the government.  In that business you learn very quickly that there is no such thing as a coincidence but if you actually run across a real one the next thing to look for is a hen with teeth.  So I must say that I look at the exquisite timing of the Saudi's decision to "protect their markets" by pumping merrily away just when the Russians are causing all sorts of grief in Europe and the Iranians have jumped into the mess that is Syria and Iraq with both feet with somewhat of a jaundiced eye.  Oh yeah, let's not forget that it's exactly the same moment that the gusher in new oil as a result of the--up until now--phenomenally successful shale drilling effort in the U.S. has come to fruition.  Coincidence you say?  Anybody see a hen?

I spoke with He Who Knows All Things about this the other day and as usual we were in agreement.  But as we talked, one thing kept nagging us.  Who put this deal together and if the fix is in how come there is zip, nada, nothing out there and even more surprising, no one speculating about this.

HWKAT:  "That's the funny thing about this, there isn't a word in D.C. concerning it.  That is simply impossible in that town with a matter so important."

ME:  "Particularly with the risks swirling around the the entire sector.  It seems to me that there has to be somebody thinking that if this continues for a period of time, it could really get nasty in a financial sense.  Surly a deal like this couldn't have been done without a couple of committees on the Hill being briefed."

HWKAT:  "I doubt that as well, but there's another explanation."

ME:  (smiling)  "We know each other too well.  Maybe there's nothing to talk about."

HWKAT:  "Yup.  You really have to ask yourself whether this mob could dream something up like this on their own.  Then there's the fact that the Saudis loath our guy to the point that it would be really hard for them to view it from their usual pragmatic approach. Then if you think about it it might serve their interests far better to simply cut production, but no, they pull this, that no one expected right out of a hat."

ME:  "Another problem.  Do you think our guys have made a full risk analysis of this?"

HWKAT:  Not a chance.  There would have been rumblings.  Not at Treasury either.  Across the river, maybe, but they're talking to nobody at this stage."

ME: " One thing I'm sure of, the House of Saud didn't do this one alone nor did they do it without something coming in return.  But who?  All the Euros or just a select few if any?   Or do we get really James Bondie and blame it on what's left of the Seven Sisters.  Gotta say, it's been damn effective up to now."

HWKAT:  "Maybe it's just a coincidence."

ME:  "Cluck, cluck."

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