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


spunko

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It seems China is also injecting huge amounts into their economy and more than was expected:

https://www.zerohedge.com/markets/china-injects-500-billion-new-monthly-credit-surge-us-real-yields-looms

in August China injected a whopping 3.58 trillion yuan into its economy ($520 billion), above the highest Wall Street estimate (1 trillion yuan above the consensus estimate of 2.585 trillion yuan) and the biggest monthly injection since the March record.

we are not about 6 months away from the next major spike in real yields, which while probably not as violent as Stanley Druckenmiller expects with his forecast of 5-10% inflation, will be sufficient to cause another crash in both risk assets and Treasurys, and spark some real confusion within the Fed which by then will have firmly cemented the perception that no matter what happens to inflation or real rates it will not tighten financial conditions.

Alas, now that China is once again injecting credit in its economy at a furious pace and has even reactivated the shadow banking spigots, it appears that the next spike higher in real rates is scheduled to hit some time in early 2021.

 

Does this tie in with your figures @DurhamBorn or have China done more than was expected and will it affect the reflation thesis? It also points to rising inflation and another crash as many have been saying on here.

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Further to my above post - and especially for nuclear/uranium investors here - i think its worth quoting an extract from the below full article link. This is from an ex XR spokes person! The 'very small number of total deaths from radiation...' part does make me chuckle... i agree with what she is articulating, but still astounds me, jumping ship so easily in 2-months!

'When a friend sent me a scientific paper on the actual impacts, including the (very small number of) total deaths from radiation at Chernobyl and Fukushima, I realised I had been duped into anti-science sentiment all this time.'

https://www.cityam.com/a-message-from-a-former-extinction-rebellion-activist-fellow-environmentalists-join-me-in-embracing-nuclear-power/

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2 minutes ago, Heart's Ease said:

BP and RDSB drifting ever lower towards (my) 2.50 and 10 psychological levels.

2.56 and 10.16, for the record.

Yes. Looking weaker and weaker

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reformed nice guy
9 minutes ago, Popuplights said:

Yes. Looking weaker and weaker

Yup, lots of investors believe that very soon billions of cars, lorries, ships, factories, industrial processes etc will suddenly stop using oil and all of the developing countries will opt for electric cars instead of cheap ICE vehicles.

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On 11/09/2020 at 12:02, jamtomorrow said:

Blimey @Loki, that's quite some timing there. Less than 24h later and Hindenberg dropped their expose/hatchet-job*

(* delete as appropriate per your preferred conspiracy)

https://hindenburgresearch.com/nikola/

Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America

(I won't paste anything other than the title, since this one has litigation written all over it)

Bugger - I can't seem to be able to open a short position on this.

Anyone else had any success?

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As per the blog's thesis in the commodities and the coming industrial cycle, I'd like to raise the topic of uranium, and the nuclear industry in general. I'm also thinking that green technology stocks/solar/wind, etc, are themselves now very expensive/in bubble territory. Whereas uranium/nuclear is still cheap.

Maybe the big oilies will come to dominate the nuclear sector, but surely a few % in some individual 'nuclear picks' is very tempting? Are there others here that are now invested in nuclear sector, or have a plan to invest after say BK perhaps? I would be very interested to hear thoughts, strategies, investment ideas.

To kick things off... 

For uranium, stocks like: Yellow Cake, Cameco, Energy Fuels have been mentioned before. Are there other/better ones to consider?

For Nuclear, companies like: Rolls Royce, Siemens have been mentioned. Are there other companies/ways to invest?               

 

For information, am also aware of the the UK government nuclear project, headed i think by Rolls Royce, with engineering partners: Assystem (french), Snc Lavalin (canadian), Wood Group (UK), Royal Bam Group (dutch)            

And other global nuclear engineering co's are: Bouygues SA, Jacobs Engineering Group, Sheffield Forge Masters, Orano, JGC Corporation

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55 minutes ago, reformed nice guy said:

Yup, lots of investors believe that very soon billions of cars, lorries, ships, factories, industrial processes etc will suddenly stop using oil and all of the developing countries will opt for electric cars instead of cheap ICE vehicles.

Massive contrarian sentiment signal just before a reflation cycle gets underway.Perfect isnt it.Hopefully they stay down as long as possible,lots of dividends flowing in need a home.

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reformed nice guy

On a different note, the economic warfare between China and America is heating up. 

Blocking China from using first TSMC and now Arm (via Nvidia takeover) will be a major slow down in the short term for their companies that use microchips such as Huwaei. 

The Chinese arm of Arm has even refused to resign which may lead to that part of the company "succeeding". 

https://www.bloomberg.com/opinion/articles/2020-07-01/main-street-doesn-t-want-weird-loans

This is another major indicator of the shaking up of the global balance of (trade) power.

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3 hours ago, DurhamBorn said:

Massive contrarian sentiment signal just before a reflation cycle gets underway.Perfect isnt it.Hopefully they stay down as long as possible,lots of dividends flowing in need a home.

I hope Zero Cred is the contrarian's contrarian

https://www.zerohedge.com/energy/bp-comes-clean-energy-admits-oil-demand-growth-dead

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6 hours ago, JMD said:

Even the Ex-Extinction Rebellion spokesperson - Zion Lights (yes that really is her name!; see link below) now having joined another think-tank - she now speaks up in favor of nuclear. If she can change her mind so quickly, then surely everything is in flux? 

Or perhaps it just means that she didn't research her opinions very thoroughly and is just a `Weather cock`?

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6 hours ago, JMD said:

Anyway who'd be a politician these days? A simple cost/benefit would reveal too much scrutiny and too little reward (so unfortunately, the ideal candidature find more appealing careers elsewhere).

Well half right...the cost/benefit part of the equation is when they leave office and go and work for the company's whom they have kindly legislated for during their tenure in ministerial office.

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Transistor Man
4 hours ago, reformed nice guy said:

On a different note, the economic warfare between China and America is heating up. 

Blocking China from using first TSMC and now Arm (via Nvidia takeover) will be a major slow down in the short term for their companies that use microchips such as Huwaei. 

Trump already had Huawei and associated HiSilicon, plus Chinese foundry SMIC, under huge pressure from design tool and equipment restrictions. As you say, now this on top. CCP must be desperate for Biden to win.

I wonder what Apple think of this Nvidia move. It’ll be interesting. 

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Transistor Man
5 hours ago, JMD said:

As per the blog's thesis in the commodities and the coming industrial cycle, I'd like to raise the topic of uranium, and the nuclear industry in general. I'm also thinking that green technology stocks/solar/wind, etc, are themselves now very expensive/in bubble territory. Whereas uranium/nuclear is still cheap.

Maybe the big oilies will come to dominate the nuclear sector, but surely a few % in some individual 'nuclear picks' is very tempting? Are there others here that are now invested in nuclear sector, or have a plan to invest after say BK perhaps? I would be very interested to hear thoughts, strategies, investment ideas.

To kick things off... 

For uranium, stocks like: Yellow Cake, Cameco, Energy Fuels have been mentioned before. Are there other/better ones to consider?

For Nuclear, companies like: Rolls Royce, Siemens have been mentioned. Are there other companies/ways to invest?               

For information, am also aware of the the UK government nuclear project, headed i think by Rolls Royce, with engineering partners: Assystem (french), Snc Lavalin (canadian), Wood Group (UK), Royal Bam Group (dutch)            

And other global nuclear engineering co's are: Bouygues SA, Jacobs Engineering Group, Sheffield Forge Masters, Orano, JGC Corporation

I can’t see the big oil going near nuclear myself. And Centrica want out.

I’ve come around to thinking, basically, the state has to do nuclear, in one form or another. CEGB 2 would be best, but I guess, there’s no chance of that. 

I’m watching Wylfa. Let’s see what happens. Big subsidies probably. 

We’re already way behind where we should be on new build.

I looked at the RR modular reactor a couple of months back.

I concluded getting one of those going is a long way off. (It’s pretty big, and a new design. I.e. It’s not a submarine reactor in a shipping container.) 

I guess Mining would be where I’d look. Many of the service companies are also oil and gas and have been hammered down. 

Sorry not be more help!

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9 hours ago, TheNickos said:

I'm curious as to peoples thoughts on the oilies when the fact appears that battery disposal is probably more costly environmentally compared to good old combustion vehicles. It'll be brushed under the carpet to start with but it will rear up eventually I think. 

I was chatting to a biz dev friend the other day and apparently there's a big race on to develop an easily recyclable battery.. lots of companies throwing a lot of money at the problem right now.

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Just now, MvR said:

I was chatting to a biz dev friend the other day and apparently there's a big race on to develop an easily recyclable battery.. lots of companies throwing a lot of money at the problem right now.

Hopefully needs lots of oil.

1 hour ago, Loki said:

lets hope so.

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58 minutes ago, Transistor Man said:

I can’t see the big oil going near nuclear myself. And Centrica want out.

I’ve come around to thinking, basically, the state has to do nuclear, in one form or another. CEGB 2 would be best, but I guess, there’s no chance of that. 

I’m watching Wylfa. Let’s see what happens. Big subsidies probably. 

We’re already way behind where we should be on new build.

I looked at the RR modular reactor a couple of months back.

I concluded getting one of those going is a long way off. (It’s pretty big, and a new design. I.e. It’s not a submarine reactor in a shipping container.) 

I guess Mining would be where I’d look. Many of the service companies are also oil and gas and have been hammered down. 

Sorry not be more help!

Actually that is useful, thank you for your insight. I asked an open question on purpose so not to bias responses. I would have liked to have invested 'in nuclear' but accept what you say about government taking up the reigns/nuclear control rods! Never mind I shall concentrate on the uranium miners, and also the service cos which will no doubt receive nice gov. subsidies and in any case are good next cycle engineering reflation plays.

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48 minutes ago, Transistor Man said:

Anyone watch The BP week videos? Have to say, I was amazed at the waffle.

 

 

image.jpeg

Actually I was offended that Giulia did not begin her presentation by Taking the Knee. (I have already messaged Lewis Hamilton's TikTok page in case he can aid in resolving this most solemn issue)

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reformed nice guy
1 hour ago, Transistor Man said:

Anyone watch The BP week videos? Have to say, I was amazed at the waffle.

Such utter bollocks. All this nonsense about saving the planet but how many barrels of oil dig they need to suck out the ground and sell to burned just to make that shite? Think how more environmentally friendly the world would be if they got rid of all those hanger onners

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40 minutes ago, reformed nice guy said:

Such utter bollocks. All this nonsense about saving the planet but how many barrels of oil dig they need to suck out the ground and sell to burned just to make that shite? Think how more environmentally friendly the world would be if they got rid of all those hanger onners

I worked with one company where they hired a director on green affairs and carbon, and she (quelle surprise) had a team underneath her.  Company was all green this and carbon credits that.

Then something happened to the way that carbon credits worked in the market and they were not making money, apparently (not sure of the details - i'm not a speccie twat).  sacked her and her team overnight.  all the carbon stuff across the corporation disappeared. greenwashing at its finest.

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6 hours ago, Loki said:

hey don't diss Tyler! I've had hours of entertainment reading the comments section on there.....

That article was written by some bird called Irina Slav.....sounds like a joke name to me....

Jokes on me at the mo with all my BP and RDSB shares........fkin hell, STOP LOSS, STOP LOSS, STOP LOSS xD

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Well, I decided I was a bit light on silver exposure after selling my SIL holdings, so I decided to get some local - Aussie - small cap silver miners.  Boy you get a lot of shares down the bottom end of the market.  2,500 Aussie now leaves me holding over 40,000 shares across two small miners.  

 

The boards on them in various places are - of course - saying they are '200 baggers' which is crazy talk, but as they both own real land with real silver underneath it, if there is a reset and silver/gold shoot up as some are saying, I'd like a chance for some of that....

Of course, I might lose it all, thats the risk with small caps, but this bit of my portfolio is the 'fun money'.  So... we will see.

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