tag:blogger.com,1999:blog-11027528911364475.post6015175755195411059..comments2024-02-18T21:10:05.205-08:00Comments on EconomPic: Russia-China Oil DealJakehttp://www.blogger.com/profile/07946497592651234440noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-11027528911364475.post-22509329486411400882009-02-28T10:02:00.000-08:002009-02-28T10:02:00.000-08:00Sprizouse- thanks for the extra info.I still belie...Sprizouse- thanks for the extra info.<BR/><BR/>I still believe my analysis is correct. Assuming one leg of the deal is exposure to oil prices vs. LIBOR and the second is the one I detailed above, you get the same conclusion ASSUMING the market price to get an oil swap is LIBOR (I do know that the embedded financing cost of the S&P 500 futures contract is LIBOR, so I'll assume oil is roughly the same).<BR/><BR/>Thus the first leg can be hedged out, meaning it has an NPV of zero, leaving only the $20 billion for the 300,000 per day of oil for 20 years...<BR/><BR/>Make sens?Jakehttps://www.blogger.com/profile/07946497592651234440noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-82086476534178045392009-02-27T13:13:00.000-08:002009-02-27T13:13:00.000-08:00Actually the Chinese loan buys access to the oil b...Actually the Chinese loan buys access to the oil but not the oil itself, with the price being obtained monthly from Argus and Platts quotes and the interest rate pegged to LIBOR.Sprizousehttps://www.blogger.com/profile/06764449113845175440noreply@blogger.comtag:blogger.com,1999:blog-11027528911364475.post-82171360503923355962009-02-27T11:41:00.000-08:002009-02-27T11:41:00.000-08:00I read something about this being a barter transac...I read something about this being a barter transaction without the use of the American Dollar. Will try to find original article.<BR/><BR/>Great Blog!Anonymousnoreply@blogger.com