Credit deflation and the reflation cycle to come (part 2)

[wherebee]

14 minutes ago, Castlevania said:

Have you seen the price action in GameStop shares the past two days? Insane.

I don't mind that, actually.  Wall Street has had the game sewn up legally for far far too long.  If some Gen Zers and Millenials have worked out a way to fuck them in the back passage, I am all for that.

I'm invested for the long term, no shorts, no leverage, no margin calls possible.  I hope that the financial whizzkids on Wall Street start jumping off buildings...

[Napoleon Dynamite]

13 minutes ago, geordie_lurch said:

The Big Short Squeeze took down a hedge fund recently

https://www.zerohedge.com/markets/first-casualty-big-short-squeeze-melvin-capital-gets-275bn-bailout-citadel-point72-after

Am update on their put positions too...

"Last Friday, in the aftermath of the Gamespot's historic eruption which sent the stock from $40 to the mid-70s (before it doubled again on Monday rising as high as $158), we had a feeling which way the wind was blowing and laid out all the Russell 3000 stocks that had the highest Short Interest (50%> of float)."

https://www.zerohedge.com/markets/here-are-all-melvin-capitals-crushed-put-positions

 

Fascinating story that when you look into it.  Surprised there's no mention of Reddit and WallStreetBets (WSB) in there, as I think that's who's driving it.

More detail here:

https://www.bloomberg.com/news/articles/2021-01-25/how-wallstreetbets-pushed-gamestop-shares-to-the-moon

From my limited understanding of it: Gamestop's a brick and mortar retailer.  Looked to be in a terminal decline. An investor (Ryan Cohen) sees value in it and starts buying in. 

A mass of retail investors from the Reddit WSB become interested (I think there's 2 million or so subscribers).  They start buying and making leveraged bets from the likes of Robinhood. 

A couple of weeks back a notorious short seller ( https://twitter.com/CitronResearch ) attempts a hit piece on the stock saying he's shorting it. This angers the WSB bet mob who start piling in further pumping the stock even more.

It's now gone on for long enough that big (old money) hedge fund's been damaged by it.

Is an interesting one to watch.

[jamtomorrow]

2 minutes ago, wherebee said:

I don't mind that, actually.  Wall Street has had the game sewn up legally for far far too long.  If some Gen Zers and Millenials have worked out a way to fuck them in the back passage, I am all for that.

I'm invested for the long term, no shorts, no leverage, no margin calls possible.  I hope that the financial whizzkids on Wall Street start jumping off buildings...

Does this mean the kids have finally found an effective form of civil disobedience for the 2020s?

Twas ever thus - it's not enough for the new to take over from the old, the new has to be seen to kill the old.

Turns out the kids are alright, after all.

[Popuplights]

1 hour ago, DurhamBorn said:

He wants you to buy a 60/40 fund and have 40% of your wealth in gilts and treasuries.Then charge a 1% fee+ platform fees + fund fees etc and see 2% a year gone before you start.Those fees plus and flatline at best over a decade are whats going to kill people in drawdown.

Yep. That's exactly what he wants. I'm very lucky, these investments are not going to have to carry the heavy load, my final salary pension will do that.  I think I will take my chances! I will post more on stealth in the near future, with some numbers, and ask for some opinions. 

[geordie_lurch]

24 minutes ago, jamtomorrow said:

Does this mean the kids have finally found an effective form of civil disobedience for the 2020s?

Twas ever thus - it's not enough for the new to take over from the old, the new has to be seen to kill the old.

Turns out the kids are alright, after all.

Yep that's why I posted some more about it all above as I think such thoughts are VERY important considering how we are all trying to project 5 - 10 years ahead to hopefully protect whatever wealth we currently have.

For example imagine what happens if they all turn their attention properly to supporting Bitcoin etc rather than the "boomers" old gold & silver idea of wealth

If these lot grow up using Robinhood and Bitcoin I really don't think they will mind 10% (or more!) per day swings in order to get ahead as they have very little to lose seeing as a lot of them start life with 50k college / University debts, work prospects are crap and house prices are so high.
 

[jamtomorrow]

8 minutes ago, geordie_lurch said:

Yep that's why I posted some more about it all above as I think such thoughts are VERY important considering how we are all trying to project 5 - 10 years ahead to hopefully protect whatever wealth we currently have.

For example imagine what happens if they all turn their attention properly to supporting Bitcoin etc rather than the "boomers" old gold & silver idea of wealth

If these lot grow up using Robinhood and Bitcoin I really don't think they will mind 10% per day swings in order to get ahead as they have very little to lose seeing as a lot of them start life with 50k college / University debts
 

It's the possibility of flash-mob disruption to markets through collective action I find interesting.

All us old farts assuming the kids were on RH for the mad gainz. Which is maybe what many of them came for. But then they realise that collectively they might be capable of f*cking the system. 

Which is what kids should be doing. Conforming to the rules and expectations of the previous generation is a terrible waste of a good youth.

[Democorruptcy]

Have we had this BP:

Quote

 

bp has begun to directly supply gas customers in China with gas from liquefied natural gas (LNG) that it has imported into the country. This is the first time that bp has created a fully integrated gas value chain into China, directly connecting upstream resources, transportation and trading with downstream gas customers.

The first cargo of gas delivered under bp’s new terminal usage agreement at the Guangdong Dapeng LNG Company Limited (GDLNG) import terminal in Shenzhen, Guangdong Province, arrived on 24 January. Under the agreement, bp has 600,000 tonnes a year tolling regasification capacity at GDLNG.

https://www.bp.com/en/global/corporate/news-and-insights/press-releases/bp-completes-integrated-gas-value-chain-in-china-with-delivery-of-lng-for-downstream-customers.html

 

 

[Don Coglione]

49 minutes ago, geordie_lurch said:

Yep that's why I posted some more about it all above as I think such thoughts are VERY important considering how we are all trying to project 5 - 10 years ahead to hopefully protect whatever wealth we currently have.

For example imagine what happens if they all turn their attention properly to supporting Bitcoin etc rather than the "boomers" old gold & silver idea of wealth

If these lot grow up using Robinhood and Bitcoin I really don't think they will mind 10% (or more!) per day swings in order to get ahead as they have very little to lose seeing as a lot of them start life with 50k college / University debts, work prospects are crap and house prices are so high.
 

I think this is an incredibly prescient post. For Bitcoin, see also Tesla and other rock-star "investments".

The $64 thousand trillion question is whether they have sufficient numbers to affect big oil? Tens, if not hundreds, of millions of woke "investors", combined with moronic fund managers desperately scrabbling to out-woke one another, could mean a lot of pain for many on this thread, at least in the short term.

I had a recent Road to Damascus conversion re wokedom (Netflix, Sex Education, Series 2, if interested). I am starting to wonder whether the morons might win...

[Loki]

2 minutes ago, Knickerless Turgid said:

I think this is an incredibly prescient post. For Bitcoin, see also Tesla and other rock-star "investments".

The $64 thousand trillion question is whether they have sufficient numbers to affect big oil? Tens, if not hundreds, of millions of woke "investors", combined with moronic fund managers desperately scrabbling to out-woke one another, could mean a lot of pain for many on this thread, at least in the short term.

I had a recent Road to Damascus conversion re wokedom (Netflix, Sex Education, Series 2, if interested). I am starting to wonder whether the morons might win...

No energy, no Netflix 

[Democorruptcy]

1 hour ago, Castlevania said:

Have you seen the price action in GameStop shares the past two days? Insane.

I read an article about oil and gas firms (posted it on here) one was Tellurian. I think it's comparable to yours on the monthly charts. I did a watchlist of all the firms and it's up 265% since I created it 20th Nov. (No I didn't )

[Harley]

1 hour ago, jamtomorrow said:

Does this mean the kids have finally found an effective form of civil disobedience for the 2020s?

Twas ever thus - it's not enough for the new to take over from the old, the new has to be seen to kill the old.

Turns out the kids are alright, after all.

Market stability, protect Doris, blah, blah, blah.........we must change the rules, oh sorry, I mean regulate!

[Loki]

20 minutes ago, Democorruptcy said:

Have we had this BP:

 

Nope, great bit of info that thanks 

[Don Coglione]

1 minute ago, Loki said:

No energy, no Netflix 

Absolutely, but a dozen or more years of indoctrination by a hobbled education system throughout the west has led to an entire generation being utterly incapable of joining the dots.

Perception = reality. 

[BurntBread]

4 minutes ago, Knickerless Turgid said:

I think this is an incredibly prescient post. For Bitcoin, see also Tesla and other rock-star "investments".

The $64 thousand trillion question is whether they have sufficient numbers to affect big oil? Tens, if not hundreds, of millions of woke "investors", combined with moronic fund managers desperately scrabbling to out-woke one another, could mean a lot of pain for many on this thread, at least in the short term.

I had a recent Road to Damascus conversion re wokedom (Netflix, Sex Education, Series 2, if interested). I am starting to wonder whether the morons might win...

Surely, at worst, investors leaving big oil would put a dent in capital appreciation. However, it would have minimal impact on dividends; and if dividends are unaffected and the share price stays low, the dividend yield would be very high.

Perhaps the lesson here is don't rely on huge capital appreciation of oil stocks. I think DB has indicated this too, when he says that they will keep on shaking out the weak hands, at least until later in the cycle.

Once the dividends get high enough, of course, people's moral righteousness will start to waver. Once it also becomes clear that BP and Shell are the foundations of the green energy infrastructure, then any money that principled investors still have left, after selling Tesla, Zoom, Amazon and Peloton, is likely to end up in big oil & gas, but maybe rather late in the cycle?

[Loki]

3 minutes ago, Knickerless Turgid said:

Absolutely, but a dozen or more years of indoctrination by a hobbled education system throughout the west has led to an entire generation being utterly incapable of joining the dots.

Perception = reality. 

Don't forget the contrarian aspect of this thread, although I agree there could be short-term pain due and the reasons why.  Long-term the smart money will just quietly head back into oil and gas.  They can cite National Security, or as with COVID, just start telling the truth (Radical I know) about climate change  Once the goals have been reached it doesn't matter if the plebs know or not.  Game over suckers.  Thanks for playing, points for trying.

[Harley]

1 hour ago, geordie_lurch said:

If these lot grow up using Robinhood and Bitcoin I really don't think they will mind 10% (or more!) per day swings in order to get ahead as they have very little to lose seeing as a lot of them start life with 50k college / University debts, work prospects are crap and house prices are so high.

As an oldie, best I mention back in the 1980's+ Japan asset boom the youngsters (similar profile to those elsewhere today) had money but not enough to buy major assets such as houses so would indulge in significant frivolous spending like a craze of sprinkling gold dust on their food.  The economists sort of (needs revision) have a name for this phenomena.  Roll on and maybe the same, only to a far more powerful effect.  We need regulation, we need more non-asset (food, etc) inflation to mop up this dangerous excess!!!!! 

[Harley]

12 minutes ago, Loki said:

No energy, no Netflix 

Dynamos as the most woke of the woke like to cycle!

[Harley]

11 minutes ago, Democorruptcy said:

I read an article about oil and gas firms (posted it on here) one was Tellurian. I think it's comparable to yours on the monthly charts. I did a watchlist of all the firms and it's up 265% since I created it 20th Nov. (No I didn't )

Oh yes you did, you're just trying to be "sensitive" bless you!

[Don Coglione]

1 minute ago, Harley said:

Dynamos as the most woke of the woke like to cycle!

And we are back to Black Mirror! Smart guy, that Charlie Brooker.

[Democorruptcy]

8 minutes ago, Loki said:

Nope, great bit of info that thanks 

Another BP:

 

Quote

 

Refinitiv Newscasts – BP all but stops looking for more oil

25 Jan 2021

Click the following link to watch video: https://share.newscasts.refinitiv.com/link?entryId=1_hdboiziv&referenceId=tag:reuters.com,2021:newsml_OVDWPJC0B_930&pageId=RefinitivNewscasts Source: Reuters

Description: UK oil major BP has drastically scaled back the team that looks for more oil as part of its plan to transition to renewable energy sources, according to company insiders. Julian Satterthwaite reports. Short Link: https://refini.tv/3peqK04 Video Transcript:

It was always the engine of profits at BP. But now the UK oil major has drastically scaled back the team that looks for new reserves of crude. Company sources have told Reuters that the unit has been cut to fewer than 100 people. That's down from a peak of more than 700 a few years ago. The firm wouldn't comment on the report. But it's all part of a big upheaval triggered by Chief Executive Bernard Looney.

The world does have a carbon budget. It is finite, and it is running out fast and we need a rapid transition to net zero. Society has got to deliver on the Paris goals.

Over the next decade, he wants to cut BP's oil output by a million barrels per day or about 40%. At the same time, its output of renewable energy is supposed to rise 20-fold. Looney is driving the exploration budget down to around $400 million per year. That's less than a tenth of what it was in 2010. Investment is flowing into new sources of revenue instead. Last year, BP said it had bought a majority stake in Finite Carbon. The US firm pays landowners to manage forests, generating so-called "carbon offset credits" that can be sold to polluters. For all that, oil and gas will remain BP's main source of income until at least 2030. Beyond that date though, it could start to look like a very different company.

 

 

[Harley]

13 minutes ago, Knickerless Turgid said:

Perception = reality. 

It's called postmodernism, really!

[jamtomorrow]

8 minutes ago, Harley said:

Market stability, protect Doris, blah, blah, blah.........we must regulate!

Yes, it might get worse before it gets better.

Way I see it, it's the responsibility of the previous generation to lay foundations for the next generation to thrive, with the moral hazard that if/when that doesn't happen it's the responsibility of the next generation to tear down eveything the previous generation holds dear and remake it.

The generational contract has been in default for some time, but I suppose we'll find a way of putting off the inevitable a while longer.

[Loki]

2 minutes ago, Harley said:

Dynamos as the most woke of the woke like to cycle!

They like you and me to cycle! 

I can charge for a horse and cart (Carbon neutral, sustainable, congestion exempt) to lug tonnes of gear to site on my next job in London I suppose.  Hay extra, no poop scooping priced for.

[Democorruptcy]

3 minutes ago, Harley said:

Oh yes you did, you're just trying to be "sensitive" bless you!

Oh no I didn't, not a penny. In second place is Antero +60% (Not a penny). There's only one big loser NextDecade -41%, don't know how they managed it looking at the list but up 9% yesterday (Not a penny)

[Democorruptcy]

I was wondering who gained from Biden cancelling the Keystone pipeline. BP in there again, you can't keep the little bugger down!

 

Quote

 

RPT – Canada's Trans Mountain pipeline sees fortunes shine after KXL's demise

25 Jan 2021

(Repeats Jan 24 story for additional subscribers; no changes)

By Rod Nickel and Steve Scherer

WINNIPEG/OTTAWA, Jan 24 (Reuters) – The expansion of Canada's government-owned Trans Mountain pipeline assumes greater importance for the oil sector after the cancellation of rival Keystone XL reduced future options to carry crude, potential buyers say.

Trans Mountain Corp TMC.UL , a government corporation, is spending C$12.6 billion ($9.9 billion) to nearly triple capacity to 890,000 barrels per day (bpd), a 14% increase from current total Canadian capacity.

Prime Minister Justin Trudeau's government bought the 68-year-old pipeline in 2018 when previous owner Kinder Morgan faced legal hurdles to expand the 1,150-kilometre (715-mile) line running from Alberta to the British Columbia coast. Ottawa has always said it would find new owners.

This week, U.S. President Joe Biden revoked the presidential permit for TC Energy's Keystone XL pipeline (KXL), undoing efforts by former President Donald Trump to build the line that would have supplied U.S. refiners with 830,000 bpd of Canadian oil. ...

That decision has made the case for completing Trans Mountain's expansion stronger.

"This pipeline is even more valuable now," said Joe Dion, chief executive of Western Indigenous Pipeline Group, one of several First Nations groups interested in buying Trans Mountain.

"Everybody thought Trudeau wasn't going to get things done in Canada, and he's the one who successfully got a pipeline over Trump." Trans Mountain takes on more strategic importance with KXL cancelled, but it does not mean his group would pay more for it, Dion said.

Trans Mountain has completed 22% of the expansion project, called TMX, which is scheduled for service in December 2022. Suncor Energy Inc , Canadian Natural Resources Ltd and BP PLC are among the committed shippers who have secured 80% of its additional capacity long-term.

"All eyes are on TMX," said Delbert Wapass, executive chair of Project Reconciliation, a First Nations coalition that hopes to buy 51% this year.

Sharing Trans Mountain's profits would help improve living conditions on First Nations, he said.

Canadian companies have long struggled to secure top price for their crude as pipeline congestion forced them to sell at a discount.

However reduced fuel demand due to pandemic travel lockdowns and advancing pipeline expansions have eased the flow. Even without KXL, Canada may have surplus export pipeline capacity once TMX enters service, said Matt Taylor, director of infrastructure research at investment bank Tudor Pickering Holt, who expects modest oil production growth to 2025.

Ottawa plans to sell the pipeline once there are fewer risks to completion and consultations wrap up with First Nations, said Finance Ministry spokeswoman Katherine Cuplinskas. TMX has faced stiff opposition over spill concerns.

A second government source said it bought Trans Mountain for its strategic importance, as its Pacific Ocean connection enables shippers to move oil to Asia, as well as the United States, which buys most Canadian crude.

Now its importance is even greater, the source said.

Enbridge Inc , which runs North America's Mainline oil network, also stands to gain from KXL's demise. It intends to sell long-term contracts for most of the Mainline's capacity, pending regulator approval, rather than continue to ration it on the spot market.

KXL's cancellation frees up long-term commitments by shippers who may now sign Mainline contracts, Taylor said. ($1 = 1.2710 Canadian dollars)