Category Archives: Finance

Oil, Opec and the Revenge of Rosneft's Sechin

December 13, 2016 By in Oil, Finance, Economy Tags: , 2 Comments

Wednesday, November 24, 2014: Ali Al Naimi, the former Saudi oil minister, signals that Saudi Arabia was changing its oil production strategy from oligopolist – as the main swing producer that keeps oil prices high – to capitalist, and would go for market share. This would lead to lower crude oil prices. The Venezuelan foreign minister, Rafael Ramirez, replied that the prices at the time of about US$62 per barrel would not allow for the necessary investment in oil production capability and would lead to a massive price surge when oil demand increased in the future and that there wasn’t enough spare capacity to meet that demand.

This has been an oft quoted warning by many others over the years.

May, 2015: the Rosneft chief executive and close Putin adviser Igor Sechin states that Opec is dead. Rosneft is Russia’s main state-owned oil company. Opec being “dead” means that Mr Sechin does not believe that oil prices can be managed. Keep this in mind – the most powerful man in Russian oil said a little over a year ago that oil prices cannot be managed.

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A review of my financial analysis

November 29, 2016 By in Economy, Finance Tags: ,

One of the problems with news articles is that it is easy to write something and then not be held responsible for it as the story develops. I will try to change that with this article.

I wrote an article recently on how the consequences of Brexit were overblown and how the idea of an EU 2.0 might make sense. The idea of EU 2.0 evolving the current framework against Germany’s wishes to match today’s economic realities could be triggered by Italy.

Recent reports show that France is also jumping into the fray but on Italy’s side, basically over the issue of bank regulation. With Britain on the way out and Italy and now France unhappy with Germany’s overly conservative stance, we may see the more constructive evolution of the EU to version 2.0 rather than the complete meltdown that the current path is heading for, a national equivalent of Lord of the Flies.

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The Ministry of Silly Walks to battle Trump, the TRA and the UAE banks and free zones.

November 15, 2016 By in Finance Tags: , , ,

The election of Donald Trump as the next president of the US has caused a ripple or two in world political and economic markets. As I discussed about Brexit, such knee-jerk responses create opportunities.

For example, Mr Trump’s promise to ban all Muslims from America would, one might think, cause stock prices in the travel and hospitality sector to drop seeing as Muslims comprise one quarter of the world’s population. In such a case the correct response would be to short these stocks. But that is the sucker’s play because this equity trade assumes that the American travel and hospitality sector cares about its clients and provides them with some form of quality service levels. Can you see the problem here? I wonder if that is where UAE bankers go to train.

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A Tribute to Andy Rooney: A Look into the UAE's Economy.

August 2, 2016 By in Finance Tags: , 1 Comment

It’s summer, it’s hot and who wants to wade through an 800 word article? So I’ll base this article on the infamous segment “A Few Minutes with Andy Rooney” from the hit show 60 Minutes, and I’ll simply give a series of light vignettes to whet the appetite and stimulate thought, without overwhelming the senses.

The UAE’s Telecommunications Regulatory Authority frequently bans voice and video over IP (VoIP), a cheap way to communicate with the world. This is significantly beneficial to the oligopoly of Etisalat and du. Yet a regulator is supposed to be protecting the consumers. Banning VoIP because it competes with regular phones is like banning email because it competes with faxes, telegrams and letters. Dear TRA, that was a plea to allow VoIP, not an excuse to ban email. It was also a polite reminder that the consumer is your client, not the telecom companies.

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Consumer power requires unity

May 24, 2016 By in Finance Tags: ,

The editors at The National give me constant feedback on how my articles are received. A recent article of mine using game theory as a lens into the persistent over supply of banks in the UAE was widely read, garnering many hits on the online article. The National’s editors informed me that the interest was due to the consumer driven view of the article. In a follow-up article I proposed how shareholders could improve the sector via the inclusion of activist asset managers. Today I would like to touch upon how consumers, be they customers in the financial services sector or other sectors, might be able to drive improvements in products and services sold to them.

Sometimes one has to find a completely new solution. Other times one can look at analogies. In this case the solution actually exists in another market. It not only exists, it is extremely powerful. Consumers, if you have never heard of it please let me introduce you to the most powerful consumer protection product on earth – Consumer Reports, a magazine that tests, reviews and compares products and services offered in the American market.

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Why the iPhone is Feminist

January 4, 2015 By in Finance Tags:

This is going to be a short, but powerful, post.

We all know that the iPhone is a battery hog. If you use any of its features then the battery will not last for the whole day. Quite often the battery will drain even when you are not using it. This has created a massive market in mobile phone chargers.

The size of these chargers ranges from a small cigar, capable of a single recharge, to bricks that can provide four recharges to two iPhones at a time.

Men might be able to ensconce a single charge portable on their person.

Women, who are not threatened by carrying a personal container, can easily store a four charge mobile charger in their purse.

The personal advantage of women being able to communicate with the world when men have long lost their battery charge is enormous. But the true power for women comes from men requesting access to the net via their female colleague’s phone, or even more emasculating, to ask for a recharge of their phones using the second connector on their colleague’s mobile charger. Seriously, it’s like being the mistress.

Men, who have been earning far more than women not because they are better but because the world is sexist, will finally learn what it is to ask a woman to treat them as an equal.

It is not clear to me if Apple has secretly been working as the gender equaliser, or if their massive incompetence has led to this situation. A global karma possibly? Or would that be iKarma?

They say that a change in the wind creates deserts. Perhaps a change in technology can alter misconceptions held for far too long.

An economy missing half its population is running at 50% of potential. What a waste.