Recent Posts

Morning Sankey 4/13/21

It seems pretty blatantly obvious that Putin is going to invade east Ukraine and join Russian rebel-held territory (see map in Sunday Sankey). He did it with Crimea. Not really a lot you can do, shall we ask Ukraine expert Hunter Biden for his take? There will be a domino effect, because the next question becomes what do you do if China invades Taiwan, given troop build-ups are as big in naval terms in the […]

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9:05 AM

Morning Sankey 4/6/21

BP announced the early achievement of its 35% debt target after the strength of Q1, and we think several unhedged oil companies will surprise with the strength of their profits after a $60/bbl quarter. We believe the overall market has lost track of just how profitable major oils are when oil prices are above $60/bbl, by which we mean the entire S&P500 upstream oil sector, with the major warning on levels of hedging exposure (see […]

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9:02 AM

Sunday Sankey 4/4/21

Greetings on Easter Sunday, The oil market got excited at the end of the week with the OPEC decision, basically because the “Saudi Put” remains in place, with the tapering of OPEC and particularly Saudi cuts extended through July. While surprised at the scale of the bullish reaction, given that the market had anticipated a rollover of cuts, it has been notable that oil prices have held the $60/bbl range pretty firmly with a bouncing […]

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12:26 PM

Morning Mood Swing 3/30/21

Get ready for a dump of April Fool’s Day OPEC jokes as the Organisation meets formally this week, culminating on Thursday April 1st. Rollover is seen as the most likely outcome, which would be for April, Saudi extending its market control, with recent volatility in oil prices – ie downside moves – seen as the key concern. It’s a never-ending wonder trying to forecast oil markets, and now to be in new era. Here, we […]

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8:26 AM

Sunday Sankey 3/28/21

Hello Happy Sunday, Calling oil has become very tricky in the short term. Never mind the wider market, where the steadily winning value-over-growth trade has found a new level and turned into a daily battleground. Recently growth has taken a stand, but we think it is doomed. Basically, every time you see 40x EBITDA+ multiples, it’s just a question of how long you can stay solvent vs market irrationality. There are maybe five stocks every […]

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1:20 PM

Morning Sankey 3/26/21

My wife and I were sitting in the living room enjoying a bottle of wine. Out of the blue she said, “I love you. ” Surprised, I asked, “Is that you or the wine talking?” “It’s me,” she said, “talking to the wine.” What do you call a rich Centipede? A Dollarpede A mushroom walks into a bar and the bartender welcomes him. He’s a fun guy. A Freudian slip is where you say one […]

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9:05 AM

Morning Sankey 3/25/21

As of writing about the Suez Canal yesterday, we were very early to show how the bulbous nose of the giant ship was buried in the shoreline. That went viral, along with the shape the ship drew on satnav maps before entering the canal. The former, the buried nose of massively heavy vessel wedged in the sand, seems to be a major problem, and there was feedback on my comment that “two dudes in hi-viz […]

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8:59 AM

Sunday Sankey 3/7/21

This past week saw the worst market for US crude since modern records begin in 1990. We saw the lowest US domestic crude oil demand in thirty years or more. Who would have known it from the oil price action and oil market mood? Right when the scale of the Texas crisis hit, in terms of lost power, I was writing to you and on Bloomberg TV saying that this is a full-scale national crisis, […]

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12:19 PM

Sunday Sankey 2/28/21

One great business for sure is going to be lubricants for windmills. Guess who dominates the specialty oil lubes for windmills market? ExxonMobil. Guess who has their annual analyst day this week? ExxonMobil. March 3rd 9am Eastern, we get the latest iteration of The Big Unit’s story. Will they, like $EOG, get attracted like a moth to the flame of promising growth? We suspect ExxonMobil will, not that we have a problem with their Guyana […]

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12:01 PM

Morning QuantumScape 2/18/21

Field trip. Speaking to Devon yesterday after their results, I asked to visit the company in Oklahoma, which seemed somewhat ludicrous in the circumstances. There is an energy emergency in Texas and Oklahoma, in case you have been asleep all week. However a visit is okay to go, so if any clients wish to join me on a Oklahoma/Texas run in the week of March 15th, the plan will be to get through next week’s […]

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8:26 AM

Morning Sankey 2/17/21

The current energy crisis is much bigger than most people realize. This is a global crisis. The largest energy outage in US history. In the middle of a brutal winter, globally. Stay tuned, this crisis is just starting. An outage of this scale in Texas is world scale. The entire US and Atlantic Basin energy market is based on a core of Texas/US Gulf Coast. A lot of the debate currently is, as so often […]

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8:37 AM

Sunday Sankey 2/7/21

Snowing again here in Brooklyn Heights. One thing that is very striking in this week’s charts is the 6-10 Day weather forecast for North America. It is freeeeezing. Bluest map I can remember publishing, and we publish it just about every week in mid-winter and high summer. As noted our Happy Hour this past week was very bullish oil, basically the call is that oil just went up 15% in a month and is rising […]

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11:32 AM

Morning Sankey 2/5/21

Max bullish oil here, buy oil leverage. That was the Happy Hour call last evening. By November last year we were saying “All in on the equities” and we ended the year with six investment grade oil stocks and six speculative oil stocks with the call: “buy both groups.” Key specifics: 2022 oil futures a bargain at $52/bbl, Oxy for operational (Brent) and financial (massive debt) leverage. MEG in Canada. Watch out for natgas exposure […]

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8:34 AM

Morning Sankey 2/3/21

Pondering the results and performance of Marathon Petroleum and ConocoPhillips, led me to thinking to what is really working for clients. The answer below is solar, but onwards! The issue is that Marathon Petroleum is mildly outperforming the XLE energy ETF, ConocoPhillips under-performing, so what? This is a swing for the fences market. Note we do have speculative stock picks, and investment stock picks every week in the Sunday Sankey, and these are both on […]

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9:40 AM

Sunday Sankey 1/31/21

The feeling is that oil price action this past week was very bullish given that it is traditionally-weak January and it held up vs US$ up and market down moves. Major clients are highlighting SPACs. We see the SPAC route as a major outlet to address the market imbalance between investment $ seeking renewable energy opportunities, and lack of renewable energy market cap plays. In today’s Sunday Sankey we replicate several slides published by Houston […]

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11:55 AM

Friday Sankey 1/29/21

Yep! It’s Friday! I called the RobinHood helpline about Gamestop and they said “Please Hold”. Got it. I want to put my life savings into the stock – its called Gamespot Total Landscaping right? The Biden team is monitoring the Gamestop situation and will let the American people know when it is time to buy a Legend of Zelda chess set in a dented box. AMC is issuing a ton of stock, but Gamestop is […]

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8:50 AM

Morning Sankey 1/28/21

Quote of the day: SINGAPORE, Jan 28 (Reuters) – Shares in small Australian nickel and cobalt explorer GME Resources GME.AX jumped as much as 53% on Thursday, apparently driven by the similarity of its stock ticker code to U.S. retail investor darling GameStop GME.N. Looking forward to Happy Hour tonight! This should be a good one. As always 5pm – please register interest. Just ping me an email to join, it is a great client-only […]

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8:45 AM

Morning Egregious 1/26/21

Quote of the day: “Will the SEC step in to protect Wall St from aggressive Mom & Pop traders?” – Joe Weisenthal A client who was long a lot of Concho stock for many years, bitterly opposed the company selling itself. In the context of the decision by Concho management to sell at the bottom, completely against my client/Concho shareholder’s view of best shareholder interests, the payment by ConocoPhillips of around $10m to three top […]

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8:31 AM

Sunday Sankey 1/24/21

“Does anybody in Washington care about the deficit? I mean 25% of all dollars ever printed were printed in 2020, and the total stimulus at $5trn, so far, exceeds the GDP of Germany… and Biden plans more…” I asked Frank Kelly, head of government affairs at DB, as we sat in Great Falls, just outside Washington DC, in a gastropub. We had driven past the preposterous mansions that line the road of this former farming […]

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12:33 PM

Morning Methane Limits

DC chat today, it’s Friday! Travelling to Atlanta via Washington and Durham today with son Max. I accidentally sprayed my son’s deodorant into my mouth this morning. Now when I talk I have this weird Axe scent. If you lose one of your senses, your other senses are heightened. That’s why people with no sense of humour have a heightened sense of self-importance. I told my wife I was making a bicycle out of spaghetti. […]

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7:12 AM

Morning Acronyms

One of the great recent charts has been the index performance of unprofitable stocks shown below. It is notable that this index has basically doubled since the last quarterly reporting season. We expect the current reporting season to underline how insane valuations have become across non-profitable sections of the market. Furthermore, quarterly results will provide full year 2020 results and some kind of outlook for 2021. Equally, for the oils, what might be good results […]

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8:40 AM

Sunday Sankey 1/17/21

Trying to get up this morning, I was pondering whether the US military could split and part go renegade. However we continue to believe the US constitution will prevail. Rather a negative start to the day, but I moved on to put together the Sunday Sankey for you, with energy, be it alternative, or regular oil and gas, starting the year very well. We continue to be obsessive about the US$ impact on oil prices, […]

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12:06 PM

Morning $NOG

Yesterday was one of those thematic days. “You don’t buy a cheap oil stocks, you buy good management.” We started with an activist getting aggressive on Ovintiv, had a great conversation with the CEO of Northern Oil & Gas, had another activist letter to Delek USA from Carl Icahn’s CVI Refining, and rounded out with Happy Hour. But first, it’s Friday, and that means we start with… What do you call a mythical beast that […]

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8:25 AM

Morning Oxy

Really strong relative day for oils yesterday, in fact all energy is running as the Biden administration battles its way to the inauguration. I’m driving my son Max to Emory for college on 21th January, through Washington, and one plan was to drop in and see the action on Inauguration Day, a moment in history and all, but DC has been declared a Federal Emergency Zone for the event and we figure that two mysterious […]

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9:00 AM

Sunday Sankey 1/10/21

Good morning, The first working week in January is always a crazy week for this analyst, and by Monday afternoon, having run five 1×1 fireside chats with five refining CEOs, I was already joking that I was ready for my year end vacation. Then, from nowhere, Saudi unilaterally cut production on Tuesday 5th January at the now-monthly OPEC+ meeting, the afternoon as we rounded out the conference with a 1×1 with Valero management that morning. […]

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12:40 PM

Morning Saudi Did What?

Sankey raising Brent oil price forecast to $54/bbl for 2021 (from $45) and $58/bbl for 2022 (from $56). Sankey raising WTI oil price forecast to $52/bbl for 2021 (from $42) and $55/bbl for 2022 (unch). It’s difficult to unpack what just happened to oil markets in terms of Saudi Arabia’s shock move to unilaterally “gift” cut production by 1mb/d for February and March; right down to 8.1mb/d, the very low of their historic production levels. […]

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8:41 AM

Sunday Sankey 12/20/20

Special Sunday Sankey featuring the legendary oil’s share of the S&P500 vs oil’s share of the S&P500 earnings charts! Sadly, it was not worth running them all year, given the horrendous earnings of the sector in what will be the worst year in the history of oil relative to expectations. Now, as we look directly into 2021, the charts are beginning to make sense. More inside this note but a couple of starters for you, […]

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11:09 AM

Friday before Xmas Sankey

Call to start 2021: our refining conference features all six independent refiners at CEO level. Sankey fireside chats back to back. Please join, you will start 2021 with a great understanding of markets, notable oil and and renewable diesel, but much more besides. I’ve got a case of Corona and I am not going to work today. I’m not sick, I’m just taking the day off to drink the whole case. Customer at a farmer’s […]

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8:28 AM

Sunday Sankey 12/13/20

Last week we highlighted the difference between speculation and investment. We continue that theme with six Big Oil investment picks for 2021, and six speculative picks. We defer on refining until our January 4th refining conference. NOTE we have verbal confirmation from Greg Goff, that he will join the conference for a fireside chat. See inside for details, and register on the website www.sankeyresearch.com Greg and I have to discuss what we discuss, as there […]

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12:18 PM

Sunday Sankey 12/6/20

New mega-theme: Big Doctor is watching you. See below. Note also that for all the words in this letter, the attached presentation is all pictures. We know you are busy and need the key ideas fast. Thanks for reading. Sankey Research subsists entirely by taking Excel, Word, Powerpoint, a Bloomberg Terminal, leading journal subscriptions, and the internet, and writing research from scratch, for sharing ideas. Please support me, aka PAY. Otherwise you are stealing my […]

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12:40 PM

Morning X-Ys Club

Last week we published a chart showing the x-y plot of trailing year-to-date free cashflow vs volume growth for the big oil group. This if you remember, prompted Silvio’s legendary joke when I called him to tell him I was having a nightmare with x-y charts, which he misheard to be “having a nightmare with ex-wife chat”. Anyway, a major Long Only investor replied immediately to the note last week pointing out that the chart […]

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8:47 AM

Morning Sankey 11/24/20

The oils continue to be lively driven by the surprising up-move in Brent & WTI crude prices, that has come at a point that looked by some measures to be max bearish. If you recall, over the last days of October, Brent fell from $43/bbl to $37/bbl and looked like it might have a run at $30/bbl, COVID resurging, Europe shutting down. Libya roaring back with 1mb/d incremental light-sweet supply. That bearish Atlantic Basin picture […]

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8:18 AM

Morning Sankey 11/18/20

There are lots of interesting stories out there to consider, hoping to publish on Iran later this week, a sort of primer. Also in this note: UK Energy Policy, Bitcoin, Non-OPEC Guyana & Norway. As tweeted yesterday on my Sankey Research Twitter @crudegusher it only takes a 10% rotation OUT of Tesla into oils, to generate $36bn of buying pressure on this emasculated S&P Energy sector with a $694bn market cap. Energy (S&P ex utilities) […]

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9:02 AM

Morning Iran 11/17/20

Deciding what the rumour has priced into the market price, then watching the actual news hit, always tends to be a surprise, in that the market ripped yesterday on a second vaccine announcement from Moderna, even though it felt like vaccine news was all whispered all over the market just prior to the election, so prior to both announcements. As with these markets, you buy the rumour and buy the news, (you don’t fight the […]

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8:44 AM

Sunday Sankey 11/15/20

I’ve been at the computer working like a chickenhawk on Adderall this morning and it still got late in the Sunday. Patricia is having a lovely time in beautiful weather in Mexico at San Miguel de Allende – an absolutely fantastic place with my globally top five favourite hotel – the Rosewood – right there. It might be my favorite, that is how wonderful that place is. Another top five is the Imperial Palace Hotel […]

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2:46 PM

Morning Sankey 11/11/20

Well for sure my timing in the Sunday Sankey making the uber-bear call for oil was completely destroyed one day after I made it, on Monday, by Pfizer’s announcement of a 90% effective COVID vaccine. My old joke is that I am never wrong, it’s just sometimes my timing can be WAY off. And the question of this note, given oil dynamics next move is positive, is timing of entry. Clearly the market was coiled […]

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8:16 AM

$EOG Groan

Here’s the thing with $EOG, and I have expressed this view to the company in several ways. is they keep setting the bar too high. And I mean that in a negative sense. It’s the first round of limbo dancing at a party when everyone gets under the pole. Like, even your grandmother. And this is not a party right now, in oil. What is the oil problem? We think OPEC might have a market […]

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3:27 PM

Morning Sankey 11/6/20

Reminder that we still do “Quote of the Day” as the header on Sankeyresearch.com where this note was just published. Today in history, 1860, Abraham Lincoln was elected President, with just 40% of the vote, to become the first Republican President. Noted that his second inaugural address (you can read his long-hand original, easy to find online) is one of the all-time great oratories and a masterpiece of unity in the face of division. Unfortunately, […]

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8:56 AM

Election-free Sankey

*** This note is election commentary-free. We got definitive results last night. From Pioneer $PXD, Marathon Oil $MRO, Apache $APA, Energy Transfer $ET, and Delek $DK, boom, boom! Really notable sell-off on solar stocks which came into the past month flaming hot, and have seen major corrections led by Sunrun $RUN – 31% past month, SolarEdge -22% which compounded $RUN’s weakness with a guidance warning this week, and First Solar $FSLR down -15% this past […]

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8:17 AM

Morning No EPS note

SHANGHAI, Oct 29 (Reuters) – China’s major state-owned banks have been swapping U.S. dollars for yuan this week, traders said on Thursday, suggesting monetary authorities are trying to rein in the sharply appreciating currency. Those operations in the onshore currency swap market have caused the value of the yuan to fall in the forwards market, tamping expectations that it will appreciate further and simultaneously making it more expensive for investors to borrow yuan. Two other […]

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7:51 AM

Morning Iran

Iran – clients are asking, naturally worried that 1mb/d+ of oil exports will be added to glutted markets in the case of a Biden win. Comments on Foreign Policy under Biden below. Noted Enterprise posts good results. $EPD has been one of our few recommendations these past months. We have particularly highlighted the units to investors questioning ExxonMobil’s 10% yield, that $EPD offers a higher yield, with a more focused, secular-bull business model (see our […]

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9:26 AM

Pioneer-Parsley & History

Breaking news: WSJ October 18th 2020 Pioneer Natural Resources is in talks to buy Parsley Energy, according to people familiar with the matter, as a wave of consolidation takes hold in the beleaguered oil patch. Word from the oil field is the deal was due to be announced last week and got sidelined by COP-CXO. (Twitter). M&A stories in the WSJ are considered the most reliable of any business new source. Last week they were […]

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8:11 AM

Sunday Fall Sankey

Good Day The Sunday Sankey is macro heavy but starts with the micro oil story of the past week and quite possibly next week: Conoco-Concho. The rumored (Bloomberg) takeover was covered in three consecutive notes last week, and is now rumoured (Bloomberg) to be imminent. We shall see. That starts, but there is a ton of macro stuff in the Sunday Sankey ppt. Take a look. As the market closed Friday, $EOG spiked, and the […]

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11:57 AM

“Happy” Hour & Friday

When Kasparov beat Carlsen I cheered so much I lost my voice. Now I am a hoarse chess nut. Kermit the Frog playing Hamlet got great reviews. It was a ribbeting performance. My friend wants to dress as an island off the coast of Italy for Halloween. I told him not to be Sicily. Happy Hour Comments and Why is Concho selling itself? We had a real live oil trader to start Happy Hour last […]

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9:10 AM

Conoco Poncho

$EOG was the name most speculated about as likely to MAKE a takeover in the wake of the Conoco-Concho story yesterday; the stock that reacted most was $XEC, perceived as the most likely next TAKE over company. Continental CLR is seen as needing to deal, $MRO too, $OVV potentially to offer a blizzard of stock, $FANG and Parsley $PE potentially to join the consolidation fray one way or the other; $CDEV is due to be […]

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9:22 AM

ConocoConcho

ConocoPhillips $COP for Concho $CXO does not generate the “why oh why” outrage of the seemingly ludicrous rumours at the time of Occidental for Anadarko, by any means. Last evening, just as we pondered a solidly in-line-with-expectations Q3 guidance from Diamondback $FANG, Bloomberg published a story claiming that ConocoPhillips is taking over Concho, which was a whole lot more exciting for a Tuesday evening, notwithstanding my wife Patricia getting liquidized chilli directly in her eye, […]

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9:23 AM

Sunday Sankey 10/4/20

Obviously, the week ahead will be dominated by the twin horsemen of COVID and bailout. We are making history. In this note, XOM is now worth less than Jeff Bezos, even after his divorce. Nextera has become the largest energy stock in the US. We also show XOM compared to Big Tobacco, to show this is not all ESG. The oil market looks rough, as we had warned all summer, it would be post Labor […]

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11:24 AM

Total Podium End Quarter

It was an especial pleasure to see a leader speaking at a podium with a TOTAL command of the current complex situation, with a complete grasp of facts and figures, a near-term and long-term vision that is both pragmatic and exciting. The fact that the entire presentation was delivered with charm and wit in the speaker’s second language, made it all-the-more impressive. I am of course speaking of TOTAL’s CEO Patrick Patrick Pouyanné , at the […]

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5:45 PM

Morning Renaissance

Good news for the industry. Rationalisation. Where does it leave Cimarex and Marathon? We first outlined our “Renaissance of US E&P” thesis in 2017, arguing that the problem with US oil stocks was not the industrial opportunity, led by the greatest oil field in the world – the Permian, securely located in Texas adjacent to the world’s largest refining center. The problem at the time it was not the oil price, which was $50/bbl and […]

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8:41 AM

Sunday Sankey 9/27/20

Back in the day, the Sunday Sankey had to go through a Big Bank approval process, and that effectively met the deadline for submission was Friday evening at 6pm. There was always a concern that something big would happen after 6pm on Friday and before the automatic release at 10am Sunday. On the Friday of the first Sunday Sankey in May 2016, we put the thing to bed, went home, and the newswires flashed “Saudi […]

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11:57 AM
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