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

[Jesus Wept]

54 minutes ago, arrow said:

So, it looks like TC Energy's promise to invest billions in renewable energy and use all union labour for Keystone won't be enough for Biden. Will he make US/Canada relations worse by supporting Michigan's Gov Democrat Gretchen Whitmer.She wants to shut down Enbridge's Line 5 and is trying to block Line 3 pipelines. Idiocy. Becoming reliant on middle east imports instead of your ally and neighbour supplying you. Pleasing the crowd instead of putting his country first.

"President-elect Joseph R. Biden Jr. is expected to cancel the Keystone XL pipeline permit on his first day in office, quickly reversing his predecessor’s approval of a project to move oil from Canada to the Gulf of Mexico, according to a person familiar with Mr. Biden’s plans for his first days in office.

Environmentalists have long targeted the nearly 1,200-mile pipeline as both a contributor to climate change and a physical symbol of the country’s unwillingness to move away from an oil-based economy. Many Republicans, including President Trump, argued the pipeline would create jobs and help local economies.

In late-2015, former President Barack Obama rejected the permit for the project, arguing it would undermine American leadership on the transition to sustainable fuels. Mr. Trump’s administration reversed that decision in early 2017, giving a green light for construction of the project to begin.

Construction has hit other economic and legal roadblocks since then, but environmentalists were pleased when Mr. Biden said during the presidential campaign that he intended to once again cancel the permit.

That is expected to happen on Jan. 20, amid a flurry of other executive actions that Mr. Biden plans to take to demonstrate his determination to reverse Mr. Trump’s legacy. Ending the Keystone project would send just such a signal."

https://www.nytimes.com/2021/01/18/us/biden-keystone-xl-cancel.html

 

This from Canada media

"WASHINGTON — One of Joe Biden’s first actions once he becomes U.S. president Wednesday will be to slam the door yet again on Canada’s politically fraught Keystone XL pipeline expansion, transition documents suggest.

The documents, seen by The Canadian Press, feature a to-do list for inauguration day that includes signing an executive order to rescind the Keystone XL construction permit granted in 2019 by predecessor Donald Trump.

They also suggest that despite its best efforts, Canada has failed to convince the incoming administration of the virtues of importing fossil-fuel energy from a friendly ally and trading partner with similar climate change goals.

“Roll back Trump enviro actions via EO (including rescind Keystone XL pipeline permit),” the document reads.

Other entries under the “Climate” heading include, “Rejoin the Paris Agreement” and “Announce date for U.S.-hosted Leaders’ Climate Summit.”

Campaign officials promised in May that if elected, Biden would cancel the $8-billion US cross-border project, but neither the timeline nor the extent of Biden’s own commitment to the promise was clear until now.

The controversial, on-again, off-again pipeline expansion, owned by Calgary-based TC Energy, would ferry up to 830,000 additional barrels a day of diluted bitumen from Alberta’s oilsands to refineries along the U.S. Gulf Coast.

Government officials quietly refused to rule out the possibility that there might still be time to change the Biden administration’s mind.

Kirsten Hillman, Canada’s ambassador to the U.S., has argued for months that the project is not the same one President Barack Obama rejected in 2015 _ an argument she reiterated in a statement Sunday.

“Not only has the project itself changed significantly since it was first proposed, but Canada’s oilsands production has also changed significantly,” Hillman said.

“Per-barrel oilsands (greenhouse gas) emissions have dropped 31 per cent since 2000, and innovation will continue to drive progress.”

The federal Liberal government has also beefed up its climate plan in an effort to exceed the current target for cutting greenhouse gases by 2030, and to reach net-zero emissions by 2050, she added.

Ever since May, Canadian officials have been advocating for a cross-border discussion on climate and energy that would make room for both building the project and reducing emissions at the same time.

“Keystone XL fits within Canada’s climate plan,” Hillman said, adding that it promises good union jobs in both countries “at a time when our economic recovery is a top priority.”

“Underpinned by a crucial and long-standing trade and security partnership, there is no better partner for the U.S. on climate action than Canada as we work together for green transition.”

Where Ottawa was clinging to hope, however, Alberta appeared to be girding for a fight.

“We renew our call on the incoming administration to show respect for Canada as the United States’ most important trading partner and strategic ally,” Premier Jason Kenney said in a statement.

Cancelling the project would “kill jobs” in both countries, “weaken” cross-border ties and “undermine U.S. national security” by making the country more dependent than ever on oil imports from OPEC countries, he said.

“Should the incoming U.S. administration abrogate the Keystone XL permit, Alberta will work with TC Energy to use all legal avenues available to protect its interest in the project.”

Biden campaign officials did not immediately respond to media queries Sunday.

TC Energy, however, confirmed an ambitious plan to spend $1.7 billion US on a solar, wind and battery-powered operating system for the pipeline to ensure it is zero-emission by 2030, and to rely exclusively on union labour — all of it clearly aimed at winning Biden’s favour.

“Since it was initially proposed more than 10 years ago, the Keystone XL project has evolved with the needs of North America, our communities and the environment,” project president Richard Prior said in a release.

“We are confident that Keystone XL is not only the safest and most reliable method to transport oil to markets, but the initiatives announced today also ensure it will have the lowest environmental impact of an oil pipeline in terms of greenhouse gas emissions.”

Federal Conservative Leader Erin O’Toole echoed Kenney’s concerns, describing the U.S. decision as counter to economic recovery efforts and urging Biden and Prime Minister Justin Trudeau to sit down at the earliest opportunity.

“I call on the prime minister to immediately reach out to the incoming U.S. administration to stop this from happening and stand up for working Canadians across Canada,” O’Toole said.

“I also call upon the incoming U.S. administration to meet with our prime minister and affected workers prior to making this decision.”

Some 200 kilometres of pipe have already been installed for the expansion, including across the Canada-U. S. border, and construction has begun on pump stations in Alberta and several U.S. states.

Biden was vice-president in 2015 when Obama initially rejected Keystone XL for fear it would worsen climate change. Trump approved it again in 2019.

The Biden campaign team appeared to slam the door on the expansion in May with an unequivocal statement committing the president-elect to “proudly” sign an order that would “stop it for good.”

But observers and experts alike continued to hold out hope, even after Biden named John Kerry — the climate hawk who as secretary of state recommended that Obama reject the permit — as a special presidential envoy on climate change.

Environmental groups, meanwhile, cheered Biden’s decision and encouraged federal leaders in Canada to follow suit.

“It’s time for Canadian politicians to stop beating this dead horse and get on with building a clean energy future,” said Keith Stewart, Greenpeace Canada’s senior energy strategist.

“The Biden administration offers us a fresh start on addressing the climate crisis with a willing partner, so let’s not blow it by pushing pipelines.”

Thanks for posting the above.

I wonder how this will pan out for Enbridge. 

How much of their share price is tied up in these pipeline deals? 
 

Seems reasonably ok today? 
 

[Jesus Wept]

3 hours ago, Starsend said:

I no longer short anything no matter how overvalued it looks. You can't short when the Government is printing money, the deck is stacked against you.

I learnt this the hard way 20years ago. 
 

Going LONG you have a definite total loss.

Going SHORT your losses are theoretically infinite.

One has to set stop losses going short. 
 

I’d love to short the NASDAQ and TESLA. Tried a couple of times. That collapse is coming soon....

[Errol]

1 minute ago, Vendetta said:

I learnt this the hard way 20years ago. 

The markets can remain irrational longer than you can remain solvent.

- John Maynard Keynes

[Jesus Wept]

11 minutes ago, Errol said:

The markets can remain irrational longer than you can remain solvent.

- John Maynard Keynes

The only way I have ever taken advantage of a market that is about to collapse is riding up with it and selling at the top. Best one was the Nasdaq reaching 5000pts (April 2000).

Think we are back there again.
 

“Nobody ever lost money taking a profit.”

— Bernard Baruch.3 Dec 2014

[Don Coglione]

23 minutes ago, Vendetta said:

I learnt this the hard way 20years ago. 
 

Going LONG you have a definite total loss.

Going SHORT your losses are theoretically infinite.

One has to set stop losses going short. 
 

I’d love to short the NASDAQ and TESLA. Tried a couple of times. That collapse is coming soon....

Tell me about it...

[DurhamBorn]

I wouldnt worry about Biden and pipelines,Canadian heavy crude will be in big demand in the cycle and the US will need it.Repsol are signing long term supply deals for Canadian crude,they know amounts are going to drop from South America.Enbridge has to limit how much oil it carries,demand outstrips its capacity usually.

 

[Jesus Wept]

15 minutes ago, DurhamBorn said:

I wouldnt worry about Biden and pipelines,Canadian heavy crude will be in big demand in the cycle and the US will need it.Repsol are signing long term supply deals for Canadian crude,they know amounts are going to drop from South America.Enbridge has to limit how much oil it carries,demand outstrips its capacity usually.

 

Yes - I agree.
 

They might get a short downturn and they might be hit more substantially by a wider market collapse - but given the fact that I’m holding Repsol, ENB, BP, RDSB, SDF, VOD, GSK, IMB, BAT for the long term in ISA’s I’m happy to ride out any ‘noise’.

The road map says that these companies should do ok over the next decade of inflation.

I’m sitting on the sidelines now waiting for a crash - and try and time picking up some more OPTIMiSM.

[RJT1979]

6 hours ago, DoINeedOne said:

 

I still have to get around to reading his books but i was following him on Twitter but he just comes across as a bit of a tit on there either arguing with anyone who disagrees with him or just blocking people for even questioning him

 

Ended up unfollowing him, sure i will enjoy the books though

 

 

Fucking knew there was a simpler way....

They must be on this forum

[geordie_lurch]

I think this is a good summary of where all the current QE and stimulus money is leading which might help those here who haven't read as much as some on all this

https://www.goldmoney.com/research/goldmoney-insights/the-destructive-force-and-failure-of-qe

[Barnsey]

Can't help thinking we have one final leg down when I see things like this, maybe I'm just a chronic contrarian.

 

[Loki]

10 minutes ago, Barnsey said:

Can't help thinking we have one final leg down when I see things like this, maybe I'm just a chronic contrarian.

 

It's never a straight line and as durhamborn says the market likes to hurt as many as possible so you could well be right

[AWW]

I wonder if most of those surveyed 92% think that inflation will move from 0.5% to 1 or 2%. It's hard to draw any conclusions when the question is binary.

[Harley]

A detailed observation for anyone in the financial weeds..... 

I was looking at the cash flow statements for XXXX.  One source shows their "Cash From Operating Activities" as XXX c.8B which suggests this covers their dividend of XXX c.6B.  But when I look elsewhere the "Cash From Operating Activities" is only XXX c.4B which means it does not (on its own) cover dividends. 

Trawling through the accounts suggests this is because the source's figure has not (whereas the XXX accounts have) been reduced for the share of the results of associates, or joint ventures, etc or some such mix (viz accounting for associates and joint ventures).  Similar for other years. 

I'm not suggesting the source is in error (no clue) but this is important if you value the ability of a company to pay their dividends out of organic operating cash flows?  Looks like I should treat the source financial data (and others?) with caution in this area?  TBF, I often have a job reconciling a lot of reported data from the various sources. 

I'm not recommending this (now in fairness anonymised!) company either way but highlight it (or rather some reported data on it) as an example of taking care with some of the reported data out there.  To be clear, the XXX accounts (which seem very well presented) used the lower figure and clearly showed the adjustments. 

It also highlights the care to take with associates and joint ventures and their associated accounting treatment.

OK, back to bennies and bitcoin......

[supernaut]

Had a look this morning at my portfolio with a view to taking some profits. Didnt take any action.

Mostly in the sectors talked about here. Oil. Telecoms. Gambling tobacco etc. 

William hill and entain(gvc) up over 200% each look the obvious ones but dont have much of my own money invested in them ( about 1k each ) but worth a lot more now. 

BP and shell although up very nicely dont look that high when compared to previous highs and of course the divis. 

Tobacco down slightly but the divis. 

Kind of feel stuck .like I would be tinkering around the edges just to be doing something.

Very close to break even on that share not mentioned too.

I reiterate I am fairly new at this so in an unfamiliar position.

 

 

 

[Harley]

10 minutes ago, supernaut said:

Had a look this morning at my portfolio with a view to taking some profits. Didnt take any action.

Mostly in the sectors talked about here. Oil. Telecoms. Gambling tobacco etc. 

William hill and entain(gvc) up over 200% each look the obvious ones but dont have much of my own money invested in them ( about 1k each ) but worth a lot more now. 

BP and shell although up very nicely dont look that high when compared to previous highs and of course the divis. 

Tobacco down slightly but the divis. 

Kind of feel stuck .like I would be tinkering around the edges just to be doing something.

Very close to break even on that share not mentioned too.

I reiterate I am fairly new at this so in an unfamiliar position.

Metoo!  I was actually thinking about adding to select (IMO macro favourable) positions at the expense of the ones that have done well but are in not so favourable sectors.  As a rule, I don't like to see price action on investments like Hill's regardless of reason.  Many of the macro favourable ones look like they have further to go so I'm tempted to break my rules and add some more.  Maybe I just need to get on with my myriad of other chores instead!  The real issue is that November rush has mucked up calm thinking, etc.  Too much too soon.  Will it pull back or continue albeit maybe at a calmer pace?  I wish it had been a more gentle rise in November as that would have provided a more solid foundation.  

[AWW]

This is not investment advice, but most retail investors overtrade. If you can't see a reason to do anything, sit on your hands. It's difficult, I know - personally, I find it much harder to sit on a profit than a loss. Discipline is required.

[wherebee]

Got an alert that some of the tax rules in Spain have changed and the gvt is imposing an additional tax on stocks.  As telefonica was just in the green despite everything else in my sector bucket doing well, dividend being toilet in Jan, I don't love it, and additional tax is just another headache re paperwork, I bailed.  Made 5% (edit - just checked, 5 not 2) in 4 months inc commission costs.

I'll just hold the cash now until a chance for some more miners or potash in a BK or miniBK.

[Harley]

....

[Craig]

17 hours ago, Vendetta said:

I learnt this the hard way 20years ago. 
 

Going LONG you have a definite total loss.

Going SHORT your losses are theoretically infinite.

One has to set stop losses going short. 
 

I’d love to short the NASDAQ and TESLA. Tried a couple of times. That collapse is coming soon....

Well this Israeli company claims to have a five minute charging battery ready to go, backed by a number of industry giants. Could turn the electric car market on its head, potentially...

https://www.theguardian.com/environment/2021/jan/19/electric-car-batteries-race-ahead-with-five-minute-charging-times

Also intrigued by their use of germanium as an electrode, although a quick Google search tells me that it's fairly abundant and a by-product of zinc production, so probably not worth investigating further.

[Chewing Grass]

10 minutes ago, Craig said:

Well this Israeli company claims to have a five minute charging battery ready to go, backed by a number of industry giants. Could turn the electric car market on its head, potentially...

https://www.theguardian.com/environment/2021/jan/19/electric-car-batteries-race-ahead-with-five-minute-charging-times

Also intrigued by their use of germanium as an electrode, although a quick Google search tells me that it's fairly abundant and a by-product of zinc production, so probably not worth investigating further.

I'm intrigued as to how you get it from the charger at ~400V and 1MW using unskilled labour and a flex.

[Craig]

8 minutes ago, Chewing Grass said:

I'm intrigued as to how you get it from the charger at ~400V and 1MW using unskilled labour and a flex.

Need to bring back pump attendants?

[Barnsey]

Might just be noise but this is quite something if it comes to fruition, the tide is turning, what do you do when you've been digging for so long...

 

[Democorruptcy]

34 minutes ago, AWW said:

This is not investment advice, but most retail investors overtrade. If you can't see a reason to do anything, sit on your hands. It's difficult, I know - personally, I find it much harder to sit on a profit than a loss. Discipline is required.

I just don't have this buy and hold in me. When stuff has gone up a years of expected dividends in such a short time, it defeats me. I can ignore a red but the blue figure is real money, sat there on the table. I suppose it's partly circumstance as I have no other income. It's comforting to know that in Jan, the year is already sorted.

[jamtomorrow]

1 hour ago, Chewing Grass said:

I'm intrigued as to how you get it from the charger at ~400V and 1MW using unskilled labour and a flex.

It's either 5 pairs of these or a 10 year research project to cost-reduce a superconducting cable. Or have the car mate onto the charger via a busbar. Hmmmm, what could possibly go wrong?

[janch]

2 hours ago, Barnsey said:

Might just be noise but this is quite something if it comes to fruition, the tide is turning, what do you do when you've been digging for so long...

 

This was covered by Shaun Richards today and does seem to be significant.  I'm not sure about the implications and would welcome some thoughts from @DurhamBorn.  Is it a big deal in the scheme of things and has it been factored into the roadmap?

https://notayesmanseconomics.wordpress.com/