Jump to content
DOSBODS
  • Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

IGNORED

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


spunko

Recommended Posts

4 hours ago, Cattle Prod said:

There are more subtle effects at play too. So after the March-April shut in, I said there would be an up tick in production over the summer as the shut in wells came back on. That's happened, and I'm pleased as I want those to decline, not sit like a loaded gun. When a well is shut in, it has a fresh burst of energy, and often produces some extra at the start, and then declines quicker. That's happening now. Production declines are going to accelerate. Natural decline since the rig fleet was shut down has been 230k barrels a month. I think I estimated ~250k. But there are some bigger declines coming. So things are happening as expected really. Expect more of the US structural decline to get out into the media over the next three months, the analysts will eventually wake up to what anyone could have seen with EIA data and basic spreadsheet skills.

OPEC knows what's happening, Abdulaziz was practically purring yesterday. Vitol have gone against the physical trading consensus too warning of coming supply deficits, and they are the big dogs in that world.

I noticed that the other day from Vitol,il add the link so people can see it and Oil Trader is a useful read for people investing in the sector.

https://www.worldoil.com/news/2020/9/16/oil-trader-vitol-projects-rapidly-shrinking-stockpiles-by-year-s-end

Oil needs to stay around $40 for a few months yet,we need those rig counts to stay down and the structural decline to really stick.It will add rocket fuel to the upside later in the cycle.

Link to comment
Share on other sites

  • Replies 35.1k
  • Created
  • Last Reply

Well just pawned the missus Jewelry.

Got my average RDSB down to 10.225p

Yields @12.09p [email protected]%. Awesome.

NS&I ain't gonna match that.

If I buy any more. They'll be offering me a board seat. Dreading the missus coming home. Better run her a hot bath.

Link to comment
Share on other sites

56 minutes ago, Panda said:

Well just pawned the missus Jewelry.

Got my average RDSB down to 10.225p

Yields @12.09p [email protected]%. Awesome.

NS&I ain't gonna match that.

If I buy any more. They'll be offering me a board seat. Dreading the missus coming home. Better run her a hot bath.

My Shell average is £11.27 before divis.I think their divi will go up 30% from where it is now once things settle down,or they will launch share buy backs first.I think the market is pricing the oil business (and so the company) as worthless in 15 years,but my oil road map would suggest Shell can buy back around 70% of its shares over the cycle if it wants while also investing in renewables to the tune of $7 billion a year.A slowly declining business is usually a superb investment as nobody else bothers investing in the sector and banks and bond markets recoil and so the companies already there see free cash grow and grow.Tobacco is the best example of a business with decades of falling sales,yet free cash exploded due to price increases being slightly higher than volume falls,and the fact then very little needed to be spend on CAPEX,and a very tight OPEX.Big oil wont do a tobacco as they are starting from much higher market caps,but share buy backs are more likely.I wouldnt be surprised to see BP for instance being valued at only 20% more by cycle end but a 200% return for shareholders due to divis and share buy backs.

Sentiment is at rock bottom though so likely some funds will keep offloading and keep the prices down on the sector.Hopefully stay under pressure for a good while longer yet,though they are getting into rubber band zone now.

Link to comment
Share on other sites

3 hours ago, JMD said:

!!!...i feared where the metaphor was going.. but still i read on to the last sentence, and my worst fears were confirmed!

However i do agree with you 100% about the commodities. (as for smelly hard fixed assets with flames, do the thermal coal miners i mention in my other post float your boat? ...genuine question btw)

Anything that makes coin you filthy minded b*gger! :)  Lyn Alden mentioned she had bought a US coal miner as a value play.  Good enough for me!

Link to comment
Share on other sites

Watched Anthony on this morning's Amplify Trading briefing mention things are now ready for negative rates in the UK if desired.  Pushed me to invest some cash in short term bonds around the world.

Link to comment
Share on other sites

Filled the tank with heating oil recently almost to the brim at a nice price.  Also had the septic emptied for the same price I paid two to three years ago.  Have to think on that latter one in regards to my inflation prepping!

Link to comment
Share on other sites

43 minutes ago, Harley said:

Watched Anthony on this morning's Amplify Trading briefing mention things are now ready for negative rates in the UK if desired.  Pushed me to invest some cash in short term bonds around the world.

The main cause of the 70s inflation was when the CBs and politicians feared unemployment more than inflation.That is where we are now.Incredible amounts of liquidity is parked in the pipes (low velocity is the enemy of employment and tax take) and the CBs mean to release it one way or another.The BOE is simply telling the market the same thing the Fed is telling them.We intend to get inflation above rates right across the curve apart from the far end.If you dont invest in the economy,we will QE your currency away and pass it to government to do it for you.Thats why the Fed mentioned at its last meeting they needed government to do more.

The reason they will leave the long end (once they take their foot off it in a few months) to give a slight real return is so that companies who wish to can re-finance over a longer period.

Of course every time this has been tried inflation increases much more than expected,and this time will likely be the same.They will allow inflation to run ahead of rates,even letting the gap expand before they try to pull it back,but the cycle will be starting to run hot by then.

The time to sell will be when we hear the term again "the roaring 20s",because im pretty sure we will hear it down the road.

As you say could be one last day in the sun for bonds before they suffer a decade decline.

Link to comment
Share on other sites

3 hours ago, reformed nice guy said:

This is a big fear of mine, especially with the tensions in America. If it went to shit there then all of the politicos around the world would start seizing assets like there is no tomorrow.

I was wondering this morning if this CV stuff being prolonged as much as possible (as others have highlighted) is to provide the necessary tools to deal with a stormy Q4.  That we're currently in the eye of the storm.   Especially as it's best for the polos to get bad things done while they're still early in office.   Brexit negotiations (sellout?) concluded and the "hit the prudent but nasty" Budget to name just two things.  Nothing better than the legal, physical, etc infrastructure provided by CV (and the prior tupperist stuff) to stop those remaining Hull fishermen and/or formerly wealthy but disgusted from the shires picking up their pitchforks and marching. 

Link to comment
Share on other sites

18 minutes ago, DurhamBorn said:

As you say could be one last day in the son for bonds before they suffer a decade decline.

OK, I'll admit to buying some long bonds today too!  Just for balancing purposes, and of course to try to stop any thieving and ride out the 2021ish bust.  Targeted wealth taxes and negative rates are one way to increase money velocity.  I'll also not be surprised to see a negative discount for cash should a government backed crypto currency get introduced in a few years (as suggested by the IMF!).  That'll make anything possible.  Until then....

I'm currently prepping for the 2021ish bust and will trade any blow-off top.  Sure, I'm taking initial reflation positions as never good to go all in one way or the other.  Been doing some proper financial planning so know where I need to be on the risk:reward curve and can feed that data into my investing.  Couldn't help but think of the neanderthal like advice that gets trotted out like bond allocations based on your age, etc.  As crude as thinking you won't get pregnant standing up!

Link to comment
Share on other sites

@HarleyI've got a 3 meter long fuel oil tank you can have.....

I ripped out the central heating.....in mid winter you can chuck an extra log on and a fleece

Maybe we need a 'hardcore preppers' thread? :P

 

Link to comment
Share on other sites

2 minutes ago, 5min OCD speculator said:

@HarleyI've got a 3 meter long fuel oil tank you can have.....

I ripped out the central heating.....in mid winter you can chuck an extra log on and a fleece

Maybe we need a 'hardcore preppers' thread? :P

 

What colour?!

Whose house was it?!

:)

Link to comment
Share on other sites

9 minutes ago, Harley said:

What colour?!

Whose house was it?!

:)

errr dark metal and dirty fuel oil coloured.......the scrap man took the fuel and never came back for the tank :PissedOff:

It's my house but it's surrounded by a metal fence and wild cats so don't try and get in uninvited :P

Link to comment
Share on other sites

I bought some more BP today sub 2.50, happy with that in the pension. I am around 50% of what i want in oil now, waiting for lower lows.( I am learning to be patient).

Once again i have nothing to add to the thread, only updates on the Hydrogen crossover within the gas installer industry when they happen and pizza tips.

Thanks everyone this thread is education on so many levels.

Link to comment
Share on other sites

if you chop and saw your wood in winter that keeps you warm too :)

I had an accident with a stihl saw a while back and a large thorn from a branch went into my wrist as the branch fell.....when I 'pulled out' the blood spurted about 6 inches into the air before I threw the saw out the way and put my other hand on it......

I seriously thought I might bleed to death cos I was in a remote location but actually it stopped quite quickly, stung for a while though and I limit myself to lawnmowers now xD

Link to comment
Share on other sites

5 hours ago, DurhamBorn said:

Yes a nice thud as that one landed.Shell is my least favourite of my oilies,but its also a much lower sized holding so i added it to a 10% slice i took off Mosaic and picked up some more just over a tenner.Im 18% in the oilies now and happy to let that get to 20%.

A lot of divis landing around the 29th as well so have to decide on homes for them.

 

Why has RDSB fairly recently become your least favourite of the oilies? It always seemed to be more favoured than BP

I was over 50% up on my MOS which seems too much too fast. Sold the lot this afternoon and put it all in BP. When you get to the stage where you daren't add up how much you have in oil, it's fair to say it's too much. Where are those nice OPEC gentlemen, isn't time they had chat over lunch?

Link to comment
Share on other sites

9 minutes ago, Democorruptcy said:

Why has RDSB fairly recently become your least favourite of the oilies? It always seemed to be more favoured than BP

I was over 50% up on my MOS which seems too much too fast. Sold the lot this afternoon and put it all in BP. When you get to the stage where you daren't add up how much you have in oil, it's fair to say it's too much. Where are those nice OPEC gentlemen, isn't time they had chat over lunch?

I just prefer Repsol and BP more because i think its a little easier for them to transition,i like them all though for the cycle.Iv also sold down Mosaic a lot.I nabbed the bottom on them and had a big holding so a very big profit.Oil im just over 18% now and happy to get to 20%,maybe 22%.

A swap out on Mosaic into BP on those numbers seems fair enough to me.

 

OPEC dont need to do anymore,you could tell yesterday they know US shale is in sturctural decline now,they will sit back a little longer yet i expect.

Link to comment
Share on other sites

16 minutes ago, DurhamBorn said:

I just prefer Repsol and BP more because i think its a little easier for them to transition,i like them all though for the cycle.Iv also sold down Mosaic a lot.I nabbed the bottom on them and had a big holding so a very big profit.Oil im just over 18% now and happy to get to 20%,maybe 22%.

A swap out on Mosaic into BP on those numbers seems fair enough to me.

 

OPEC dont need to do anymore,you could tell yesterday they know US shale is in sturctural decline now,they will sit back a little longer yet i expect.

By the way my decision to buy BP had nothing to do with you being less keen on RDSB lately, my previous oil purchase was also BP as I decided I have enough RDSB.

There is no reason why MOS should drop in the current environment except in a general sell off. Plus I could see oil still dropping with more covid woe and lockdowns reducing demand. My only excuse is that I just cannot resist taking profits off the table, it was such a nice round figure xD

Link to comment
Share on other sites

US indices are looking heavy....well Nasdaq is O.o .....

Trump might have to call in the PPT next week or things will be getting even cheaper

Don't forget cycling at the weekend xD

 

download (9).jpeg

Link to comment
Share on other sites

Thought Provoking....

 

YOU ARE EXPERIENCING THE BEGINNING OF THE END OF DAYS

 

Here's the problem the Central Banks are fighting (a battle they will of course lose):

 

- Conventional (easy cheap oil) peaked in 2005

- To compensate we smash rocks and suck out the oil --- we steam oil out of sand - we drill miles beneath the ocean for oil

-  of course the EROEI from those 3 is very low ---  but fortunately we still have some high energy return oil that subsidizes those 3 so civilization has continued (with massive amounts of stimulus to help us cope with this low EROEI oil mix (the global economy does NOT like low energy return oil because it leaves less to run the world...) 

- in 2019 shale was peaking so the party was ending

- trot out the debate on UBI and MMT to prep us for what we are experiencing now 

- trot out Greta to prepare us for shutting down the planet 

 

OIL GLUTS - many point to periodic gluts as 'we are swimming in oil'.  A glut does not mean we have found more oil - it simply means producers are pumping their reserves out faster.  They usually do this when prices are low as they need the cash flow to pay the bills so they need to push more volume

 

 

 

PUNCHLINE - there is very little new oil being found.   What would you do if you were on your last tank of gas?   Of course you would ration it.   

 

Covid was created in a lab to provide cover for this new normal --- it also has allowed the central banks to roll out MMT UBI Helicopter Money.

 

Enjoy this phase of the End of Days while it lasts. 

 

PREDICTION - we are being groomed to accept lockdowns.  Anyone who resists is met with a big fine, arrest and in some countries beatings.   Your neighbour will be told by the authorities to rat on you going forward. Why?   Because when the Central Banks lose control of this situation they will enact martial law -- a total lockdown.  

 

They will at least initially deliver food to everyone but then that will stop.  They will promise 'the deliveries will resume in a couple of days'.   You, like good sheep, will trust them and wait... and wait... and wait...  and when you realize there is no food coming you will be too weak and exhausted to do anything (and in any event there will be nothing you can do - there will be no food because the system is collapsing).    

 

This will be for your own good.  Resisting is futile.   Nobody wants extreme violence and cannibalism.   You and your family will lie down and wait to die from starvation.   


Oil Discoveries are at record lows (even when oil was $147)  https://assets.bwbx.io/images/users/iqjWHBFdfxIU/icbkDFACM4iA/v2/800x-1.png

But what’s most striking is that new discoveries aren’t even close to keeping pace with the loss of conventional resources. According to Rystad, the current resource replacement ratio for conventional resources is only 16 percent. In other words, only one barrel out of every six consumed is being replaced with new resources.

 

So not only has our pace of discovery declined, but discoveries are also in much more challenging geological venues and typically offshore, which means it could take many years just to bring new resources online.

https://oilprice.com/Energy/Energy-General/The-Biggest-Oil-Gas-Discoveries-Of-2019.html

 

 

Link to comment
Share on other sites

8 hours ago, BadAlchemy said:

Yes £10-12K per acre is about the going rate, in the south east anyway. Oop north, and other less pricey areas of UK, it can be nearer half that amount... that was the case when we were looking about 8 years ago and it sounds like prices haven't changed that much. You will typically pay less per acre the more land you buy, and there are even some half acre/one acre plots which are very pricey for what they are...I don't see the point of those. For me, when I was working 5 days a week, I wouldn't have wanted anything bigger than our 5 acres - that was more than enough to maintain (unless you are going to outsource some of the upkeep to someone else of course). I'm working two days a week now and could probably manage something two or three times bigger, if I wanted too (which I don't). I think I read somewhere that four or five acres of broadleaf/hardwood woodland is considered just enough to provide sustainable supply of wood fuel to heat a typical house... can't remember the details/calculations though so worth bearing that in mind if that's part of the plan.

Yes, www.woodlands.co.uk and (imaginatively enough), www.forests.co.uk are the two websites where you will find most woodland sold through. Yes, we saw some on Rightmove occasionally too so worth keeping an eye on there also.

Great discussion everyone. Thank you! I can't contribute much as I am a financial dunce compared to you lot and this year has been a challenging one too... in a good way though, and following the frugal, self sufficiency themes of this thread I have been busy replacing rotten windows in my house... DIY of course! Got them done just in time before the weather and light deteriorates too much.

Anyway, back to lurker mode. Now what's all this about RDSB and BP.....

Yep, the required area very much depends on the calorific value of the wood.  There's a list on the internet of the value per species.  And a trade off between speed of growth and calorific value.  Usually five sets are planted, to rotate, one cut per year.  A fair amount of work but I love trees.  I planted a few small copses as shelter belts and have loads from various prior work but wasted some through poor storage when I first started.  I want to buy a woodland but you need to tread carefully in regard access, covenants, wood types, growth stages, rights, getting ripped off as a dreamy townie.  Stihl all the way but they can be very fuel fussy.  Plus a chipper and splitter, big expensive ones, or rent. Oh, and scavenge for fallen trees.  Usually can do a deal with the landowner.  Nothing goes to waste.

Link to comment
Share on other sites

6 hours ago, DurhamBorn said:

My Shell average is £11.27 before divis.I think their divi will go up 30% from where it is now once things settle down,or they will launch share buy backs first.I think the market is pricing the oil business (and so the company) as worthless in 15 years,but my oil road map would suggest Shell can buy back around 70% of its shares over the cycle if it wants while also investing in renewables to the tune of $7 billion a year.A slowly declining business is usually a superb investment as nobody else bothers investing in the sector and banks and bond markets recoil and so the companies already there see free cash grow and grow.Tobacco is the best example of a business with decades of falling sales,yet free cash exploded due to price increases being slightly higher than volume falls,and the fact then very little needed to be spend on CAPEX,and a very tight OPEX.Big oil wont do a tobacco as they are starting from much higher market caps,but share buy backs are more likely.I wouldnt be surprised to see BP for instance being valued at only 20% more by cycle end but a 200% return for shareholders due to divis and share buy backs.

Sentiment is at rock bottom though so likely some funds will keep offloading and keep the prices down on the sector.Hopefully stay under pressure for a good while longer yet,though they are getting into rubber band zone now.

Cheers DB. Stuff I didn't know. Divi day Monday. Not for me as I bought ex divi.

Wondering whether a bounce might occur post divi payment.

RDSB is great value sub 10.00. 

Funny. Trying to explain to err in doors how the price paid only matters if you intend to sell, and is more importantly a function of the yield you expect, .I.e. Divi.

Like finding rockin horse shit.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.

×
×
  • Create New...