A global recession is on the horizon - please read OP for mod warning

What about that f***er in Azarbaijan he just cut of 120,000 Armenians from gas 5 days ago. They are all freezing to death, another one who needs sanctions that bloke.

Looks like Germany want to keep this scandal separate from it's recent 15 year gas deal it just struck a few weeks ago.

Hopefully for consumers struggling with energy bills something gets sorted today. It looks like a price cap of 190 is now talked about which will be the max charged. This means that if consumers and businesses are needing support it will be down to individual countries as the max allowed is 60% higher than today's price.

Not even in the midst of winter yet and the bill is 1 trillion already.

Surely the EU as a whole consumes to the extent that they can dictate the price?

Not sure what to make of it to be honest. Will it apply to LNG from the States also?

Could you explain what is so funny about it all (the whole "crying laughing")?

Am I right these gas + electricity markets operating internal to the EU are complex artificial creations dreamed up in the time (90s - early 10s) where trying to turn everything in Europe that was once kept under state control no matter how critical (like energy production & distribution) into a "free market" was the ultimate way to make it work efficiently (or maybe also extract a higher % profit for commercial interests, depending on your cynicism levels about the whole process)?

I think (?) there were crazy prices run up in these markets in the Autumn in expectation of large winter shortfalls of gas and rationing of gas/electricity supplies around the EU, which has not happened as yet.

These systems were not made for current situation where "normal" trade is made impossible. The EU is currently in an economic war with its old main gas supplier Russia. (Leaving aside the threats of moving this mainly economic war/struggle to a "hot" war that have come regularly from Moscow), it is also up to its neck in a real war that seems to be devolving towards a long process of attrition where it cannot afford the side it is backing to lose because European countries cannot support them any more.

imo this kind of stuff (interfering in pricing) is just part of bringing the energy supply & distribution far more under control of the states, or perhaps the EU in aspects where they can come to collective agreements about it. I think these EU internal "free" market systems will end up being heavily modified, replaced, or maybe even killed off during this crisis.

ICE the operators of the Euro gas market did warn last week that they may have to relocate outside of the EU if a cap was brought in due to financial risks involved and looks like they are looking into that now. Some concerns about a lack of a risk asessment not being carried out to justify today's decision also.

With 6 trillion euro's of derivatives in play it's no surprise really.

Would the global price actually be 250 if the richest continent are refusing to pay above 180 though? Its nowhere near as straight forward as you're making out.

Do you think it is a good idea to put a cap on what companies can pay for something as essential as natural gas ?

Today the price is higher in Asia than Europe and the criteria needed was met for 40 days this year when demand was at it's highest. What happens if wild swings happen again when everyone starts scrambling to fill storage and the price is higher in Asia than the max price European countries are allowed to buy at ?

If the EU criteria is met then all the Asian countries have to do is bid above the cap price to take the gas. So by setting a maximum price it could create a shortage in supply.

All hypothetical but it won't help to bring prices down for anyone by setting it at 80% higher which should be the whole idea. Now if they set the price at $50 that would bring prices down because producers have been told what they must sell for.

Given limitations of system they are working with, yes it is a good idea (to try it anyway). As said, if price that importers need to be paid is higher my reading is the cap is meaningless then.

Maybe that will happen at some point, who knows? I don't think the Asia-pacific countries will wish to drive up price of gas like that in a bidding war to try & screw Europe, I mean they are only screwing themselves too + its the producers generally (and Putin in particular edit: affecting cost of energy in Europe is the only economic weapon he has) who benefit from it.

Whether it will work to contain volatility I don't know as the whole free market trading system inside the EU seems to me to be something that is irreparably broken while the EU is defacto at war with the (old) main gas supplier to which it is connected by pipelines. When crises like wars and plagues and other acts of god and human insanity + malice hit, the govt. (usually) steps in to manage.

The member state govts (or the EU) may need to take over supply and distribution directly during this crisis.

I assume this market system in the EU is extremely complex and it is of such long standing now that it is just impossible to do anything more drastic to it quickly without potentially causing even more of a mess. So they are doing smaller measures like this "price cap" for now.

Talking to a business associate today, hes the financial controller for the largest copper producer in Africa, production in January will be down 50% on last year. Bonkers

I wonder is it a case the demand is still there but a combination of high input costs, supply chain issues, staff shortages, etc has throttled the company back? I see this in our own business and others, there's no appetite to expand or even chase new work at the moment, only keep the show ticking over in the hope costs fall next year. Demand is still there in some sectors yet these sectors have stagnated. It's a strange one

Or ... has the arse just fallen out of the copper market? I'd find it hard to believe that demand would plummet for a material as important as copper

So what's the consensus on a recession in Ireland in 2023?

Personal view is that we will 100% see a global recession.

As ireland is so interconnected globally this will have a knock on affect here and we will see a recession, nothing as bad as 08 I hope, but a recession nonetheless.

My biggest fear is the SME sector which is the main employment sector in Ireland. If you ask me the SME sector is already in a recession and if things get bad then the real laymans view might be very grim but on paper we might have a 'mild' recession.

The one thing that could f'up the whole lot was if the interest rate increases trigger a black swan event that could cause another GFC. The probability of this happening will get higher and higher the longer interest rates remain high or go higher. In my opion this would definitely be the worst case scenario in the short term but may be the only solution for the long term, as things stand the western worlds economies are totally unviable and unsustainable.

A bit of a tempter for those countries looking to get energy bills and inflation down. Probably the US and SAS will be on a chopper heading there with sticks on dynamite in the backpacks.