Recent Posts

Sunday Sankey 2/21/21

Enjoyed making the slides today, take a look. Slide 1: John Hopkins Professor expects US herd immunity by April. Remember how quickly SARS disappeared? Fingers crossed. This past week we have highlighted QuantumScape $QS the solid state battery play, and did so again Thursday, and we “found the short” as they say. The heated email from a client arrived in response with 10 minutes. “It’s a joke.” He was referring to valuation. But in this […]

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10:39 AM

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 LNG

Hi, We had legendary global gas expert Gordon Shearer on our Happy Hour – every Thursday at 5pm – this week. Writing up the notes for Friday sent me down a couple of rabbit holes, and so I put together a note with graphics on LNG, which is attached. Selected nuggets, there are more within: Natural gas as the key energy transition fuel is logical and imperative. Those that bucket natural gas, oil and coal […]

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11:54 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

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

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

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

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

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

Morning Elon Ma

Refining conference today! Not to late to register on www.sankeyresearch.com Strong delivery numbers from Chinese automakers over the weekend followed on from Tesla’s dash to the line for 2020 which fell just short – within the margin of error – for its 500,000 annual target for 2020, which is indeed a very impressive achievement. There were reports of Tesla asking existing customers for help in delivering vehicles. One mystery to us is how the company […]

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8:45 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

Morning Refining Series II

Invitation to our all-C-Level conference below. 4th January. In this note we continue our series on refining, which we started yesterday. Two key detail points that are very important, that we will cover during this series: Super bullish: Net operating losses (NOLs) for refiners from 2020 will mean they pay effectively no taxes through 2021 and beyond. On the bear side, renewable identification number (RIN) prices that prove that refiners have met their blending requirements […]

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9:01 AM

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

Friday Sankey 12/4/20

What is the most dangerous part of a car? The nut holding the steering wheel. Who is this Pavlov guy? I cannot place him. But his name rings a bell. Using a cinnamon stick to stir your Christmas party drink is not a religious act. It’s egg nog stick. They call it the Labrador market – delighted with everything it bounds after. NASDAQ yay! Bitcoin yay! Copper yay! And thus, as we said in our […]

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8:50 AM

Morning Sankey 12/3/20

Save the Date for the 11th Annual Sankey Research refiners conference January 4th & 5th 2021. We have all six major independent US refiners line up for a series of fireside chats with yours truly: Marathon Petroleum, Valero, Phillips 66, HollyFrontier, Delek and PBF, with a couple more to be added. All at C-Level. Contact me for details. Last evening rumours broke that OPEC has reached a deal to gradually increase production in a tapered […]

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9:11 AM

Morning Game Theory

“We are not going to have an easy meeting. Some members oppose extending the previous production cut. And this makes it difficult.” – Iranian oil minister Zanganeh comments this morning as the meeting kicks off in Vienna. The OPEC meeting started virtually at 8am NY time. There is no more classic modern day example of Game Theory, and more specifically the Prisoner’s Dilemma, than an OPEC meeting. Cortez burned his conquistador boats in front of […]

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9:20 AM

OPEC Special

Please find attached our OPEC Thanksgiving 2020 note. Have a great Sunday. Best regards, Paul

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10:43 AM

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

Sunday Sankey 11/22/20

Good day from Brooklyn Heights, Enjoy life, look up and consider what to you is everything right now. Live in the present. I have a professional friend who was one of the dominant hedge fund managers in oil during the legendary 2003-2008 oil bull run. As the true legend goes, he ran $1bn levered in oil equities on his right hand, and $1bn levered in oil commodity on his left. So it was understood. They […]

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1:23 PM

Morning Friday 11/20/20

Breaking news: Germany is advising people to stock up on sausages and cheese. This is starting to look like the Wurst Käse scenario. I lost 200 pounds. That’s the last time I go to a British casino. Rudy Giuliani really risked his career on this. The dye is cast. Out of all the inventions in the past 100 years, which one was the most remarkable? The dry erase board. We had a refining CFO on […]

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8:38 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

Friday Sankey 11/13/20

Friday jokes: I lost all my sense of taste, I think I have COVID! Oh no wait, this is Bud Lite. My son said he was quitting college to move to the Arctic Circle. I said “I don’t like your latitude.” A kid goes to a Halloween party. The host asks him what he is dressed as, kid says “A harp.” The host rudely says “Your costume is too small to be a harp.” The […]

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8:24 AM

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

Sunday Sankey 11/1/20

Good day, A quick note today, there are slides highlighting yesterday’s note on XOM that got a lot of traction. There was criticism for not specifically calling out Rex Tillerson, and skepticism on my bull call for refining in summer 2021. Let’s be honest, I made the call for summer 2020, and that worked great when we made the call in April. But turned out to be a disaster by May. We were a year […]

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2:02 PM

Friday Saturday Sankey

Yesterday was tricky to publish a worthy note, until conference calls were complete. So this is the Friday Sankey on a Saturday. Happy Halloween! If life gives you melons you may be dyslexic What’s Sherlock Holmes’ favourite tree? A lemon tree Daddy, do all fairy tales start with “Once upon a time”? “No kid, there’s a whole series of fairly tales that start with “If elected, I promise…”” There were two key takeaways from ExxonMobil’s […]

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2:51 PM

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

Sunday Sankey 10/25/20

The Sankey Research website was down this morning, and there is absolutely no truth in the rumour that this is somehow related to Hunter Biden. Rather, the website may have crashed on ANOTHER BIG OIL DEAL, this one a bit of a shock. Years ago, ConocoPhillips announced a massive deal to buy Burlington Resources, a $36bn deal that was announced on 13th December 2005, literally the day before US natgas prices hit their all-time record […]

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2:02 PM

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

WEO Woah Woe Sankey

One of the cool things about experience in energy that goes back 30 years now, is that long term energy forecasts have come, and gone. Fifteen years ago, I obtained ExxonMobil’s 1980 energy outlook (to 2010), which was fascinating. It correctly predicted $100/bbl oil prices, but unfortunately missed the first move to $10/bbl (1986). CEO Lee Raymond swore never to use an oil price forecast again. At the IEA in the early 1990s, I worked […]

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8:47 AM

Sunday Sankey 10/11/20

Good Day, Guess what, we are back to results. In the week ahead Q3 EPS starts. Crazy to think, Schlumberger reports Friday; nothing much on Monday but watch JP Morgan report massive trading results on Tuesday – work from home right – starting off the week. Also Citi reports Tuesday, and important for Bail Out, Delta Airlines too, with United Airlines Wednesday alongside some bank called Goldman. Could be a bullish week for the market, […]

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1:40 PM

Morning Bullish Sankey

Very interesting Happy Hour yesterday… and an overwhelming sense of bullishness swept over me! How can this be when the oil market is still struggling so badly? Well… a couple of things. But first, it’s Friday, and this is the Friday Sankey, so its JOKE TIME. What’s the biggest lie in American politics in 2020? You have 2 minutes uninterrupted.Please respond to your opponent’s total ignoring of the question. You have two minutes.A fly on […]

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8:27 AM

Tesla vs ExxonMobil Porcupine Battle I

Looking at the future of US gasoline demand, I got sucked into the history of Tesla’s SEC filings essentially with a view to replicating my notorious chart of ExxonMobil’s volumes since 2000, vs their annual analyst meeting target for volumes. The dreaded porcupine chart, which has no more inappropriate quill than the last, which was repeated at the March 2020 analyst meeting at peak COVID in NYC. ExxonMobil’s volumes vs their analyst meeting targets As […]

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10:25 AM

Friday Air Sankey

Well indeed, there are a lot of jokes out there this morning… you can say the news has gone viral. However, given our self-imposed standards of taste and decency, we will limit the news jokes to non-Presidential. If you’re driving a stolen Tesla… Would it be called an Edison? Mark Zuckerberg is in a car accident. Guy : “Let’s exchange personal details” Mark : “You are Scott Thomas, you have 237 friends out of which […]

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10:23 AM

Propane Sankey

Yet another bull point on propane. The Morning Sankey goes down the rabbit hole. New York City has made outdoor dining permanent, and the City has lifted the post-911 ban on propane canisters in Manhattan (welders were excepted). With indoor dining limited to 25% capacity, operating restaurants are dependent on outdoor dining, and there has been a scramble to buy propane heaters. My neighbour manages three restaurants and said he was about to buy 15 […]

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10:02 AM

Mid-Morning Sankey

Tonight, Happy Hour Zoom, contact me for details. It’s 5pm and always fun and interesting, always frankly to my surprise. All welcome to a maximum of eight. In due course this 5pm meeting will feature corporate access guests. Tomorrow 5:20am CNBC with Brian Sullivan. Brian was interested in yesterday’s Morning Sankey which made the Renaissance argument for “orderly liquidation” of major oils. So this week the Dallas Fed published a survey that had me just […]

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10:23 AM

Morning Mini Sankey 9/22/20

Today, on Tesla battery day, a quick look at electric car economics. Why are so few electric cars sold? Because they are more expensive. Why when the fuel economics are so over-powering, are so few taxis electric? Because electric cars take too long to fill for taxi drivers. Why does this matter? Because the single largest part of the world oil market is US gasoline. As shown below, the red balloon is North American gasoline, […]

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9:15 AM

Sunday Sankey 9/20/20

Good day! A chill September wind is blowing across Brooklyn Heights, as summer officially ends and fall very much starts. The market is feeling chills too, with COVID continuing to present a major challenge to policy-makers globally. We remain extremely frustrated by the excessive lock down requirements in New York despite effectively zero COVID. With massive testing, less than 1% positives are being found, and essentially no deaths (statistically speaking). This past week we quoted […]

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11:37 AM

Let me fly!

The future of global energy, key focus points: Battlegrounds: EU, US, China, India. Reminder: nearly 60% of Chinese and Indian energy still comes from coal. Or, as a refining CEO tells us “China has more coal-fired power plants under construction, than the US has coal-fired power plants”. Noted, US is still 12% coal-fired, vs 9% renewable (total energy balance). In this note, jet fuel demand. Jet is the key to the future of global oil. […]

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9:04 AM

Morning Sankey 9/14/20

Start your engines, or rather, share your computers as part of our future, for the longest analyst meeting in history starting this morning at 8:30am Eastern Time, as BP commences “BP Week.” We have five hours today, followed by three hours each on Tuesday and Wednesday. To kick things off, BP has released its World Energy Outlook. One of these outcomes fits our world view for energy to 2050. Can you guess which one it […]

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7:54 AM

Sunday Sankey 9/13/20

“One thing I know for sure, In the battle between humans and the environment, the environment will win.” This has been one of my standard lines for more than a decade. It sits alongside “environmentalism is a luxury” in terms of the parameters for considering the subject of alternative energy. Another an old line: “the only barrier of entry to being an oil analyst is units.” In this edition of the Sunday Sankey we lay […]

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10:50 AM

Morning Saudi US$ Sankey

There is a glaring omission from McKinsey’s Vision 2030 for Saudi Arabia. It does not mention the Saudi Riyal – Dollar peg, other than in a footnote to indicate that the modelling in the outlook assumes the long-standing $3.75 peg is maintained. We are just wondering if a Biden Presidency would engage Iran, and if Saudi retaliation could take the form of dropping the Riyal-Dollar peg. Our understanding is that while the Saudi Arabian Monetary […]

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9:14 AM

Sunday Sankey 9/6/20

G’day and happy holiday weekend, Middle son Max is studying at Atlanta’s famous college Emory from home, which is deeply unfortunate. I am hoping to have him intern at Sankey Research once I get more organized about office space. Youngest son Harry headed to college at Northeastern in Boston for the first time yesterday, naturally excited, with NY news reporting that 11 Northeastern students had been sent home for having a party in a local […]

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9:50 AM

India vs China; Silk, Opium, and Internet Access

This note started in an effort for the Morning Sankey to explain the current military skirmishes between India and China in the Himalayas. I went down a rabbit hole. It took me on a journey back some 8,000 years, across Empires, continents, religious histories, syncretic philosophies, and to my personal favourite, Bangladesh’s submarine base. Why did it take so long and get to 30 pages? There is a mega-theme behind the confusion of headlines pertaining […]

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7:32 PM
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