TDURDEN CHAT - 1/20/10 @ 10:57am CST

10:57 AM [tdurden] ok...
10:57 AM [tdurden] their is quite a bit going on in iraq
10:58 AM [tdurden] and all of it is leading to the RV
10:58 AM [tdurden] so as many of you know I look at things a little differently than everyone else because thats just what ive been taught to do...following the money
10:59 AM [tdurden] and in that, I also try to figure out what we know as fact to justify what we are trying to figure out intel wise
10:59 AM [tdurden] so as we've talked about before their was a chain of events that started in december with the TR deals and CMS deals
11:00 AM [tdurden] we saw the ISX go down for 2 weeks, which we were thinking was to adjust for new values
11:00 AM [tdurden] they decided to go back online on the 4th and not the 3rd which would have been a normal business day for them
11:00 AM [tdurden] then we find out that the 3rd was an accounting holiday for everyone.
11:00 AM [tdurden] funny, the ISX seem to know it was coming
11:01 AM [tdurden] we also see in the papers that the Oil contracts were getting signed from the 20-30th
11:02 AM [tdurden] So on thursday the 31st we saw something strange
11:02 AM [tdurden] we saw what seemed to be a change in GCC currencies. and i know there has been debate over whether it was just a spread at the bank or not
11:03 AM [tdurden] but we checked UAE, Kuwait and Jordans buy sell values at Warka and they are the same as the new values at Wells and BOA. so I believe that argument is out the window
11:03 AM [tdurden] Now Breit and I have discussed many times what Iraq wants in rate and it has always been 3 +
11:04 AM [tdurden] so Kuwait is now 4600/1 dinar and it was 4000/1 which is about 3.90
11:05 AM [tdurden] Wells and BOA have Kuwait around 3.90 to buy, jordan around 1.65 and UAE about .30. that is about a 10-12% increase
11:05 AM [tdurden] from before
11:05 AM [tdurden] Forex does not reflect this yet because IMO they are waiting for the GCC to start the union on the 23rd.
11:06 AM [tdurden] Now going back to what Iraq wants....and please remember I by no means no what the rate is. Just watching things unfold and trying to construct an educated guess
11:06 AM [tdurden] anyway, we have always thought Iraq wanted 3+ and we heard last summer they wanted 3.41
11:07 AM [tdurden] we discussed last fall that this would work because they had hypothetically agreed with kuwait to be a couple cents lower
11:08 AM [tdurden] So back to the timeline
11:08 AM [tdurden] oil contracts are signed by dec 30th
11:08 AM [tdurden] the 3rd was an accounting holiday
11:08 AM [tdurden] the 4th banks opened late and ISX had tech problems
11:09 AM [mailman17] so they say
11:09 AM [tdurden] right mailman
11:10 AM [tdurden] I believe they were ready to go on the 4th but the other countries changing their rates screwed them up
11:11 AM [tdurden] So in the past 2 weeks we have seen a lot of strange things
11:11 AM [pyramid] so you don't think they knew about the other countries changing their rates until it happened?
11:11 AM [tdurden] im not sure, i dont think they thought kuwait would go that high
11:11 AM [tdurden] this is all speculation and ill explain why
11:12 AM [tdurden] so anyway, ive been watching the ISX and everyday the amount of listed stocks changes. only 1/2 are traded and the article came out explaining stock prices and changes in value
11:13 AM [tdurden] i have a hard time understanding why they would give an english version without that information and an arabic version with the info
11:13 AM [tdurden] arent they looking for outside investment
11:13 AM [tdurden] but then with that we saw that a share of bank of sumer is 880 fils
11:13 AM [tdurden] have we seen or heard of anyone carrying fils?
11:14 AM [fritzidinar] no
11:14 AM [tdurden] thats not even including lower denoms of dinars
11:14 AM [tdurden] so how does that make sense
11:14 AM [tdurden] then we see that oil contracts were getting amended and signed
11:14 AM [tdurden] but werent they just signed 3 weeks ago
11:14 AM [mailman17] seems to me the smalls are on their way out to get fresh air
11:15 AM [tdurden] what has to be amended only 3 weeks after it was signed
11:15 AM [tdurden] and why would it need to get amended
11:15 AM [fritzidinar] rate?
11:15 AM [tdurden] thats my thought
11:15 AM [tdurden] cause they arent negotiating a better deal after they just signed them
11:15 AM [mailman17] been my line of thinking also td...kudos
11:16 AM [tdurden] because what is being amended has been kept a secret
11:16 AM [tdurden] now throw in the budget getting delayed and amended over and over again
11:16 AM [tdurden] and asking for more money
11:17 AM [tdurden] that could be looked at in 2 ways...a higher rv or the difference in the price of oil.
11:17 AM [tdurden] either way i dont care becuase i believe all this stuff going on is telling us what they are doing
11:17 AM [mailman17] tdurden i would say rv...cause the difference in oil price doesnt justify a 40% increase in the budget
11:18 AM [mailman17] jmo
11:18 AM [tdurden] there budget is based on 60-62 a barrel. oil is at 78. its about 30% but either way they can plan for the difference
11:18 AM [tdurden] anyway, here are things to watch.
11:19 AM [tdurden] Biden and chris hill are in iraq
11:19 AM [tdurden] barzani and hashemi are in the US
11:19 AM [tdurden] GCC goes live with the currency on the 23rd
11:19 AM [tdurden] Budget supposidly tomorrow
11:19 AM [tdurden] Final oil contract amended on the 24th
11:19 AM [mailman17] true, but once they lock in that budget and if oil were to dip for some reason, they would be screwed seeing as production is stagnated at 1.9mbd
11:20 AM [tdurden] yeah...see i believe they are getting everything done so they can rv. get out of chapter 7. watch production explode as a result of the contracts and bam. they are one of the richest countries in the world
11:20 AM [mailman17] agreed
11:20 AM [tdurden] all the while they have had trillions in debt erased and now are on speaking terms with kuwait
11:21 AM [tdurden] kuwait said this weekend they dont care about the debt
11:21 AM [tdurden] wasnt that the chapter 7 sticking point
11:21 AM [mailman17] well thought out my friend...me likey
11:21 AM [tdurden] I think Kuwait is feeling the pressure of Iran and wants Iraq to be strong enough to be a buffer if things go down
11:22 AM [tdurden] hence not needing the money but want imporved security
11:22 AM [mailman17] also agree
11:23 AM [tdurden] Now i still dont know whats going on in regards to timing of getting things done before elections
11:23 AM [tdurden] and the IMF loan
11:23 AM [tdurden] there are other people here that know a lot more about that than me
11:24 AM [tdurden] but when watching whats going on with the money. It has been a very interesting past month and a half
11:24 AM [tdurden] now a couple other things to ponder
11:24 AM [tdurden] the article that came out the other day about the CBI wanting to raise the value
11:24 AM [tdurden] that is a new article because it mentions 200 billion dinar auctions...which are fairly new...as well as electronic trading
11:25 AM [tdurden] and also we have watched Bank of Baghdad put on there site about a week or two ago that they can communicate with banks all over the world and do transfers....this is new
11:26 AM [tdurden] with ATM's going live, this also tells us they can communicate electronically
11:26 AM [tdurden] these I believe were one of the hang ups
11:26 AM [tdurden] that didnt make sense
11:26 AM [tdurden] I believe not having the systems in place to communicate electronically was a hang up
11:26 AM [tdurden] but it seems they are live now
11:27 AM [tdurden] but they still have to fix the other contractual issues that have arisen over the past 2 weeks.
11:27 AM [tdurden] So with all that said. I think we really are there
11:28 AM [tdurden] I hope that all makes sense. feel free to ask questions or challenge my thought process if something doesnt make sense