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

[JMD]

4 hours ago, Cattle Prod said:

Migrant workers are a big chunk,yes. But among the native Saudi population I imagine free money along with having 4 wives and easy divorce would do it. Ibn Saud, the father of the modern Kingdom, set the pace: he had over 50 sons, and apparently didn't count his daughters, but thought to be also around 50 (stands to reason). One of said sons, Kind Saud, outdid him, and not just by bothering to count his daughters - he had 107 children. Hence you have tens of thousands of princes now, each with a healthy stipend from the Royal purse. I doubt the poorer folks managed quite so many, but I'm sure they had a good go at it once the money started to trickle down.

Could you imagine our bennie class with 4 wives?! They'd be asking the council for 20 bedroom mansions.

Hmm, what does that do for the gene pool I wonder? You've remarked before about the mental capacity of the Saudi ruling classes. It all makes sense now.

[The Grey Man]

3 minutes ago, Yadda yadda yadda said:

For me it will be a question of prioritising paying down the mortgage or topping up investments. Depends on the length of remaining fix and value in the market at any time.

There is also the possibility of moving somewhere cheaper. There is a scenario where I could pull out 5 figures and keep the mortgage under 50% loan to value. The alternative would be reducing the mortgage by those 5 figures. That would be a major life upheaval though.

Well I gambled on this being the lowest dip.

Fucked up before on timings with the bank crash.

FTSE 100 Trackers and child investment trust this time. Figure theres another big dip to come. Not convinced about the  vaccine miracle..wait till spring and assess any backlash or refusals in uptake. By autumn next year results will be harvested on the reality. If only I knew someone with access to those government stats.

Thats my blackswan. Even without it. The two big dips this last few months means dosh. Expect a third dip based only on this.

And ..covering bases in the grey monotone I am, I over paid the mortgage.

Pushed to take business loan from the gov. I have avoided. My choice.

Leverage. Good stuff. Some cretins like me, prefer the go slow Aldi model.

 

[JMD]

7 hours ago, DurhamBorn said:

Yep and so they can reduce crop yields and starve people to death instead.We just need to road map their folly and profit from it.

DB, to me that stands out as a profound statement. And I think articulates the investment strategy of this forum. Am I wrong? In fact I'd hazard a guess that all successfull investment strategies throughout time have probably sought to do a similar thing?                                                                                                                        On a lighter note, I'd add that it sounds like something lifted from the pages of Sun Tzu's, The Art of War. Or if I was to go 'down market', maybe a line spoken by Ming the Merciless in the Flash Gordon film (the one with the Queen soundtrack), where I think Ming says something similar when describing how he'll gain the upper hand by simply exploiting human moral weaknesses, and using them against mankind. (Btw, am not comparing you to Ming!!)

[MrXxxx]

5 hours ago, sancho panza said:

Been doing some reflecting on the year so far and looking back,I really wish we'd built a decent positon in copper whilst the market was low in March/April.

I bought some Freeport calls but that was about it.

Can't believe I couldn't find some of the oilies money to shuffle over.Greed/value trap/tunnel vision..................

Has anyone any experience or names that I shud keep my eye for the bottom of the crunch?

Or any good websites/blogs where I can read up on the sector?

The one I am watching for the BK is kaz.

[DurhamBorn]

5 hours ago, sancho panza said:

Intriguing if Citigroup,20% off gets DXY to sub 80....a call which brings Citigroup into line with our own @DurhamBorn and DH.

I think their call on the dollar is a bit too low.I think between 83 and 85 is a likely area to consolidate.If we dont get another big kahuna next year then 78 would come in play.I suspect they are starting to work out the macro.We saw the dollar position over a year ago ,im available if any big institution wants to hire me  On copper i managed to get a lot of BHP below £10 back in the sell off,and Harmony Gold have a fantastic copper project.Yamana Gold also has copper prospects.COPX is the fund i used to use for exposure so a run through those companies.

 

[DurhamBorn]

Should note on VODs results yesterday The CEO mentioned in the call he had been meeting governments and the EU etc and telling them ROCE was too low for shareholders to invest.Portugal tried to let in a new player on the cheap so VOD pulled a big investment.Big telcos are united on this now.We make more return or you can fuck off we aint investing shareholder capital.I exect we will see 100% gain on ROCE to at least 10% during the cycle.

[Castlevania]

9 hours ago, sancho panza said:

Yeah absolutely.I think if you can borrow at 2% and run a portfolio of oilies alongside at recentish prices,you'll do nicely.

Probably not the sort of punt for your average mortgagor though,but a few on ehre would likely run the numebrs nad have a bash.

That’s what I’d do if house prices were not quite so insanely priced with the added tweak of putting 10% of the house price into silver as an inflation hedge.

[Castlevania]

7 hours ago, sancho panza said:

Been doing some reflecting on the year so far and looking back,I really wish we'd built a decent positon in copper whilst the market was low in March/April.

I bought some Freeport calls but that was about it.

Can't believe I couldn't find some of the oilies money to shuffle over.Greed/value trap/tunnel vision..................

Has anyone any experience or names that I shud keep my eye for the bottom of the crunch?

Or any good websites/blogs where I can read up on the sector?

Antofagasta as a pure play on copper

[jamtomorrow]

SEED #184 up: https://surplusenergyeconomics.wordpress.com/

Long article, won't paste most of it. But good discussion of factors driving ECoE trends:

In essence, four factors determine the evolution of ECoEs. Two of these act to reduce ECoEs; one pushes them upwards; and the fourth operates in ways which are, in general, misunderstood.

ECoEs are driven downwards by geographic reach and economies of scale. Until comparatively recently, the fossil fuel industries pursued the search for new, low-cost resources in locations which had not previously been explored, and which, in some cases, had been politically inaccessible. Economies of scale operate where increasing the size of operations enables the numerator of fixed costs to be spread over a larger denominator of units of output.

With both ‘reach’ and ‘scale’ exhausted, the driving factor now is depletion, which describes the way in which, quite naturally, lowest-cost energy sources are exploited first, leaving costlier alternatives for a ‘later’ which has now arrived.    

The potentialities of the fourth determinant, technology, are often overstated, because technological progress cannot change the physical characteristics of the resource.

Fracking, for instance, has reduced the cost of accessing shale hydrocarbons in comparison with the cost of accessing that same resource at an earlier time. What technology has not done is to put the economics of shales onto the same footing as giant, technically-straightforward fields in the sands of Arabia. This is rendered impossible by the starkly differing physical qualities of the two resources.

And closing comments:

From where we are, though, we cannot assume that the outcome must be collapse. For those caught on the wrong side of fundamental changes in the past, it must have seemed that, for them, the World had ‘come to an end’. Examples from history are abundant, and include craft workers overtaken by the “dark satanic mills”, French and Russian aristocrats and functionaries swept aside by revolution, and investors destroyed by the Wall Street Crash.

Objectively, none of these events amounted to collapse. Each, moreover, included winners as well as losers, and gains, as well as losses, for the quality of life.

In the next instalment, we’ll start an analysis of how these ‘profound-but-short-of-collapse’ changes are likely to play out.

Roll on #185

[Popuplights]

7 hours ago, JMD said:

Hmm, what does that do for the gene pool I wonder? You've remarked before about the mental capacity of the Saudi ruling classes. It all makes sense now.

When I was over there in the early 2000s it was quite common to see genetic deformities like club foot or a withered arm. Things you just don't see in the white population in the UK.

[Micky Roberts]

9 minutes ago, Popuplights said:

When I was over there in the early 2000s it was quite common to see genetic deformities like club foot or a withered arm. Things you just don't see in the white population in the UK.

With large families and the tendency for cousins to marry it occasionally happens that the offspring from first cousin marriages also breed with their first cousins. The progeny of these unions are almost always ' genetically challenged'. They are known as "Double Firsts".

[kibuc]

11 hours ago, AWW said:

The free marketeer in me thinks it's a great idea to charge for road use based on demand. You want to drive around the M25 at 8am? 50p a mile seems fair.

Don't know how it's "fair", it's a public road and I'm already paying my fucking taxes am I not? There's no reasoning behind it other than "we ran out of dough and this is the easiest way to get some more". How about cutting on £100bn welfare spending instead.

[AWW]

11 minutes ago, kibuc said:

Don't know how it's "fair", it's a public road and I'm already paying my fucking taxes am I not? There's no reasoning behind it other than "we ran out of dough and this is the easiest way to get some more". How about cutting on £100bn welfare spending instead.

Roads aren't cost-free one you've built them.

It's already well proven in studies done before all the green crap came along that drivers don't cover anywhere near the costs of all the externalities. Is it really fair that people who can afford newer cars pay less VED and fuel duty than owners of older cars? That drivers rat running through residential streets to take kids half a mile to school pay the same as those using the motorways in the dead of night?

I'd like to sort out the welfare bill as well, but it's not going to happen.

...and I say that as someone who loves cars and driving. I just don't think they're a great way to get around cities.

[Loki]

One of my old dog shares

Quote

AFC Energy PLC

("AFC Energy" or the "Company")

Manufacturing Contract with BK Gulf

AFC Energy (AIM: AFC), a leading provider of hydrogen power generation technologies, is pleased to announce it has signed a binding Agreement with BK Gulf LLC ("BK Gulf") to support the immediate scale up of manufacturing capacity for delivery of its proprietary H-PowerTM fuel cell system. 

Highlights

·      BK Gulf, a wholly owned subsidiary of Middle Eastern conglomerate, Dutco Group, is one of the region's largest specialist mechanical and electrical contractors.

 

·      BK Gulf provides specialist design, engineering and fabrication services for bespoke, modular containerised systems.

 

·      AFC Energy and BK Gulf have signed a binding Agreement for the scale up in manufacturing capacity for the Company's containerised fuel cell balance of plant.

 

·      BK Gulf to invest in a detailed value engineering process to further optimise H-PowerTM system layout and drive cost reduction commencing immediately.     

 

·      Existing capacity to deliver several hundred fitted out containerised modules per annum to address future customer demand with first fabricated units expected in Q1 2021.  

 

·      Strong procurement strength, world class fabrication facilities and capacity to grow make BK Gulf an excellent partner.

 

AFC Energy and the Dutco Group commenced commercial discussions in November 2015 by signing a Heads of Agreement to review the potential for Hydrogen fuel cell deployment in the Middle East.  Since this time, both companies have continued to constructively engage in parallel with the growing worldwide momentum behind the use of Hydrogen as a key enabler to a decarbonised society.

Today, AFC Energy and BK Gulf, a wholly owned subsidiary of the Dutco Group, and former joint venture partner of Balfour Beatty in the Middle East, are pleased to confirm the signing of an Agreement whereby BK Gulf will commence immediate work on a full value engineering study into the configuration and layout of the containerised H-PowerTM system with a view to further cost reduction. 

As a leading provider of containerisation engineering and fabrication, BK Gulf have a strong supply chain with procurement leverage to provide a value for money solution for AFC Energy. 

Under the Agreement, BK Gulf will not only provide investment in time and resources into the value engineering review, but also create a full turn-key solution for the balance of plant which AFC Energy will then assemble alongside fuel cell stacks, power conditioning and control systems. 

BK Gulf's Dubai based facilities offer material scope for growth with the potential for hundreds of systems to be fabricated on site as future demand for AFC Energy's system grows. 

Having investigated several suppliers, BK Gulf offered the most competitive solution, affording the highest levels of European standards in health and safety with a strong reputation for the quality of its work. 

Based on the Company's current commercial pipeline, AFC Energy expects to place multiple orders of containerised balance of plant in 2021, including the ACCIONA project set for delivery in 2021.

BK Gulf will also work alongside AFC Energy in the provision of more bespoke skid mounted solutions where containers are not deemed appropriate for a given use case, building upon the value engineering work expected to be completed over the next couple of months.

Basheer Massad, General Manager of BK Gulf, said "We are extremely pleased to be signing this Agreement with AFC Energy today, bringing our world class engineering and fabrication capability in support of AFC Energy's ambitious goals for fuel cell system deployment over the coming years.  Having worked alongside AFC Energy now for the past five years, we have witnessed first-hand the evolution of its fuel cell system and the compelling opportunities for it in displacing temporary off-grid power as the nearest zero emission alternative to the diesel generator.  BK Gulf, as one of the region's largest contractors with over 6,000 engineers, is strongly aligned with this decarbonisation agenda and looks forward to partnering with AFC Energy as its presence, not only in the Gulf region, but internationally, continues to grow". 

Adam Bond, Chief Executive Officer at AFC Energy, said "Today's Agreement with BK Gulf is a further important step in cementing AFC Energy's manufacturing strategy aligned with the growth in our commercial pipeline and in bringing down response time and cost in meeting customer expectations.  Dutco Group and BK Gulf have long been strong allies of AFC Energy in the region and with their leading engineering and fabrication capability, are an ideal partner in supporting a strong commitment to the growth of the Hydrogen economy in the Gulf region and world-wide.  We look forwards to delivering on our partnership with BK Gulf and in working with their team in taking our fuel cell system to market". 

 

About AFC Energy

AFC Energy plc is commercialising a scalable alkaline fuel cell system, to provide clean electricity for on and off grid applications. The technology, pioneered over the past twelve years in the UK, is now deployable in electric vehicle chargers, off-grid decentralised power systems and industrial gas plants as part of a portfolio approach to the decarbonisation of local electricity needs.

 

[kibuc]

3 minutes ago, AWW said:

Roads aren't cost-free one you've built them.

It's already well proven in studies done before all the green crap came along that drivers don't cover anywhere near the costs of all the externalities. Is it really fair that people who can afford newer cars pay less VED and fuel duty than owners of older cars? That drivers rat running through residential streets to take kids half a mile to school pay the same as those using the motorways in the dead of night?

I'd like to sort out the welfare bill as well, but it's not going to happen.

...and I say that as someone who loves cars and driving. I just don't think they're a great way to get around cities.

Neither are hospitals, museums, playgrounds or pavements. Maintenance is an ongoing cost across the board, but we also keep paying taxes every day, not just as a one-off.

You're stepping on a very shaky ground here, mixing "fairness" with taxation of wealth. Making certain people pay more simply because "they can afford it" is quite a departure from "the free marketeer" in you, I'd say.

Increased traffic during rush hour pisses me off mostly because of increased air and noise pollution, but that has nothing to do with taxing it just for the sake of it. Is it fair that people who drink and smoke pay the same NI as I do? Do such cateogries as "fair" and "unfair" even apply here?

[Loki]

No-one "wants" to be driving the M25 at 8am 

[Sasquatch]

6 minutes ago, Loki said:

No-one "wants" to be driving the M25 at 8am 

From 'Good Omens'

Many phenomena - wars, plagues, sudden audits - have been advanced as evidence for the hidden hand of Satan in the affairs of Man, but whenever students of demonology get together the M25 London orbital motorway is generally agreed to be among the top contenders for Exhibit A.

[The Idiocrat]

25 minutes ago, AWW said:

Roads aren't cost-free one you've built them.

It's already well proven in studies done before all the green crap came along that drivers don't cover anywhere near the costs of all the externalities. Is it really fair that people who can afford newer cars pay less VED and fuel duty than owners of older cars? That drivers rat running through residential streets to take kids half a mile to school pay the same as those using the motorways in the dead of night?

I'd like to sort out the welfare bill as well, but it's not going to happen.

...and I say that as someone who loves cars and driving. I just don't think they're a great way to get around cities.

There’s already heavy tax on fuel. So those night time motorway drivers are already paying per mile into the government’s coffers. Doesn’t apply to electric cars of course, so that’s why the government will try to move the goal posts, just to keep up their revenues from fuel duty, no other reason.

[Noallegiance]

1 hour ago, Loki said:

One of my old dog shares

 

Brucie! Got a decent chunk of these. Up 44% on them right now!

[AWW]

1 hour ago, kibuc said:

Is it fair that people who drink and smoke pay the same NI as I do? Do such cateogries as "fair" and "unfair" even apply here?

Depends what you think NI pays for. Both those activities are heavily taxed and I would wager that someone who smokes 40 a day or drinks heavily will cost a lot less in state pension than someone who doesn't.

We should probably move this discussion to a new thread.

[Craig]

1 hour ago, The Idiocrat said:

There’s already heavy tax on fuel. So those night time motorway drivers are already paying per mile into the government’s coffers. Doesn’t apply to electric cars of course, so that’s why the government will try to move the goal posts, just to keep up their revenues from fuel duty, no other reason.

Suspect the electric car is a classic bait and switch. Get everyone in on the promise of cheap motoring, then crank up the taxes on electricity.

Thiugh to be fair, that would still be a more progressive tax than road tolls or VED. 

[AWW]

1 hour ago, The Idiocrat said:

There’s already heavy tax on fuel. So those night time motorway drivers are already paying per mile into the government’s coffers. Doesn’t apply to electric cars of course, so that’s why the government will try to move the goal posts, just to keep up their revenues from fuel duty, no other reason.

Yeah but my point is that they're paying the same to drive on an empty motorway in the Highlands as someone driving around the north circ in rush hour, despite very different demand.

[Noallegiance]

HZMs come alive too. Up 122% for me right now. All four small hydrogen players I hold are boosting:

AFC up 44%

Ceres up 82%

ITM Power up 74%

Powerhouse up 97%

Overall portfolio is only up 3.5% but it's been dragged down with unlucky timing of transport, telcos and oil buys.

So far, this novice is happy.

Massive thanks to all here

 I've learned so much.

[NogintheNog]

29 minutes ago, Craig said:

Suspect the electric car is a classic bait and switch. Get everyone in on the promise of cheap motoring, then crank up the taxes on electricity.

Thiugh to be fair, that would still be a more progressive tax than road tolls or VED. 

This is exactly what I started thinking, and actually I think is the 'fairest' option, even if I don't like taxes. (Certainly a lot fairer than the notion of track and toll!) I'm sure also that the current 'emissions' tax will translate to a road maintenance tax as well.

As the percentage of electric/hydrogen cars increases, the government pulls that back by an increase taxes on electricity. I use approx 100KWhr per month without charging an electric car. Add in a Nissan Leaf and I suspect that would easily be 200KWhr. Simples!

I'll stick to the MX5 mk1 with pop up headlights, and I'll cut my own hair!

[JMD]

10 hours ago, sancho panza said:

Been doing some reflecting on the year so far and looking back,I really wish we'd built a decent positon in copper whilst the market was low in March/April.

I bought some Freeport calls but that was about it.

Can't believe I couldn't find some of the oilies money to shuffle over.Greed/value trap/tunnel vision..................

Has anyone any experience or names that I shud keep my eye for the bottom of the crunch?

Or any good websites/blogs where I can read up on the sector?

SP, I've been thinking the same about the copper miners. I was late into them and have been picking over the copper 'filings'(!?) ever since. I will post what I ended up buying later, it might be of interest (or it might just amuse some!!). But your idea of a watchlist of what copper miners that may become cheap if/when we get a market correction is a good idea... second bite en all.