Videos Of The Week
US Military Draft Bill, Putin's Peace Proposal & A Look At Commodities
Last week was rough for stocks in the commodities sector, but sentiment on oil stocks in particular seems pretty washed out right now. We will see if that changes heading into the summer, but it was an interesting week to say the least. This week the first video is Daniel Davis’ thoughts on Putin’s conditions for peace talks in Ukraine. The second video is a look at oil, copper, and other commodities.
Daniel Davis Deep Dive
I thought Ukraine would start to wind down at some point this year, but it seems like that assumption was wrong. Now it looks to me like NATO and the West are looking to get involved directly after using the Ukrainians as cannon fodder for the last couple years. We also had news that National Defense Authorization Act passed the House, which includes an amendment to automatically register all males from 18 to 26 for the draft. It has been voluntary up to this point, but I would rather see news that politicians must have at least one family member in the military so they at least have some skin in the game.
We all know that won’t happen, but I don’t think younger generations of men are going to go overseas to fight willingly, and you see it in the recruitment numbers. If things deteriorate and the US gets involved, it will be interesting to see what happens if they try a draft. I’m over the age limit, but I’m not interested in seeing my younger brothers (or cousins) get drafted for a pointless war, whether it’s Ukraine, Taiwan, or some other foreign boondoggle. Now we can get into Putin’s conditions for peace talks. I figured I would include Mark Wauck’s take on the conditions because he sums up the situation well.
Recognition that the four regions that held referendums and voted to join Russia are part of Russia.
De-NATOization, de-militarization, neutrality, de-Nazification.
Those are simply the starting points for negotiation. They’re entirely reasonable, in light of events since the end of the Cold War. I assume that Putin advanced them once again mostly for consumption in the non-NATO world. I do also tend to agree with Larry Johnson’s view that Putin once again enunciating this position at this particular juncture may be a signal that the war is about to entire a new and more intense phase.
- Mark Wauck on Putin’s Conditions For Peace Negotiations, Meaning In History
He also points out that Zelensky is no longer a legitimate head of state since his term has expired without a new election. Davis said that we might look back at the current terms in the future and wonder why we didn’t take the offer. The conditions seem reasonable to me, but we all know that we aren’t being led by reasonable people at this point. I agree with Davis that the West should engage in peace talks, and if Wauck is right that we could see a phase shift in the conflict, the next couple months in Eastern Europe are going to be interesting.
Macro Voices w/ Jeff Currie
Now we get into a video focused on the investment space. They talk about oil, copper, and other commodities. Copper has pulled back recently but long term I’m bullish on most commodities. I can’t get as excited about copper for a variety of reasons, namely that I haven’t found a clean way to play rising copper prices over the next three to five years. I’ll keep looking, but it might just stay in the too hard pile like natural gas. Oil on the other hand, seems like an interesting setup with poor sentiment and consolidation across the energy space. That doesn’t mean oil and energy stocks are going to start working this week and for the rest of the year, but I think the risk/reward for energy is skewed to the upside over the next three to five years.