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

[Majorpain]

1 hour ago, Harley said:

Yet another awful one.  A good poster child for our hopeless administration (including seemingly every public service and beyond) which has been stress tested and found to be beyond contempt.  Hidden until now during an apparent benign period of spin but now so exposed, taking to trying to hide behind printed money.

Windmills are the latest scam to transfer money from the poor to the already rich via energy costs, build costs, running (e.g. debt) costs, and subsidies.  I take that bit seriously.  But what does it mean, and how much, for the macro investing trends?  O&G not going away soon but maybe better to buy companies under less "woke" pressure?  Supply crunches as reality hits and just with any transition?  The growth of alternatives to the alternatives?!...........

Your not thinking on a long enough time scale, in 2020 at $40 oil wind is expensive, at $300 a barrel oil in 2030 however?  That "free" wind is going to look pretty good.

Just need RR to sort out the small modular reactors for base load and UK will be in a pretty good place.

[NogintheNog]

1 hour ago, MrXxxx said:

Does anyone take anything he says seriously now?...the guys a dreamer who thrives on deflecting the publics attention from the `balls up` he makes of everything he does, which explains why he has only ever found employment in politics and journalism.

Yes let's be honest. BJ was voted in on the ill wind of Brexit, it was the overriding issue of the 2019 election and he was saying 'let's get it done'. Something that won him seats in those old Labour stronghold ex mining towns and cities of the North.

In terms of all those windmills and 5% mortgage down payments I think Majorpain is right;

9 minutes ago, Majorpain said:

Your not thinking on a long enough time scale, in 2020 at $40 oil wind is expensive, at $300 a barrel oil in 2030 however?  That "free" wind is going to look pretty good.

Just need RR to sort out the small modular reactors for base load and UK will be in a pretty good place.

Not that BJ has worked that out though, he is just doing what he did in 2019, telling peeps what they want to hear (but with no detail attached).

They are gonna spend no doubt, and we may get to those green uplands. However there is gonna be some large doses of inflation on the route to get there.

I hope the price of the oilies stays low for a while yet though.

[Harley]

38 minutes ago, Majorpain said:

Your not thinking on a long enough time scale, in 2020 at $40 oil wind is expensive, at $300 a barrel oil in 2030 however?  That "free" wind is going to look pretty good.

Just need RR to sort out the small modular reactors for base load and UK will be in a pretty good place.

Fair point to an extent.  But windmills are not the only show in town, another PFI?, "accuracy" of windmill costings (like the huge costs of storage and/or backup), etc.  However, maybe building all those windmills will see $300 per barrel sooner than later!  Best I ride the gravy train with some O&G divs?!

[wherebee]

3 minutes ago, Harley said:

Fair point to an extent.  But windmills are not the only show in town, another PFI?, "accuracy" of windmill costings (like the huge costs of storage and/or backup), etc.  However, maybe building all those windmills will see $300 per barrel sooner than later!  Best I ride the gravy train with some O&G divs?!

What I find encouraging is the Aussie fed budget released last night is saying the same thing - massive infrastructure builds paid for by borrowing loads whilst rates are low, and making the debt v long term.  That is another flag raised that for me confirms the macro view of inflation as the chosen route out.

[DurhamBorn]

2 hours ago, wherebee said:

What I find encouraging is the Aussie fed budget released last night is saying the same thing - massive infrastructure builds paid for by borrowing loads whilst rates are low, and making the debt v long term.  That is another flag raised that for me confirms the macro view of inflation as the chosen route out.

Exactly and its what we said on the first page of this thread.The macro position was clear,and is still clear.They need inflation to trend around 3% to 4% above trend to stop everything crashing down.Trend inflation is 3%,though we could argue for 2.5%.

Its how macro cycles work,when you can borrow below inflation at the bottom of the cycle then that is what the economy does as ww e

[geordie_lurch]

The local BBC lunchtime news up in the North East just had a large feature on Hydrogen powered trains starting next year, the expected size of the Hydrogen industry by 2050 (2.5 trillion) and how the region has the chance to be "the beating heart" of the tech. There's also some new hydrogen research hub being opened in Middlesbrough.

[Chewing Grass]

1 minute ago, geordie_lurch said:

The local BBC lunchtime news up in the North East just had a large feature on Hydrogen powered trains starting next year, the expected size of the Hydrogen industry by 2050 (several trillion) and how the region has the chance to be the leader in the tech.

Pump & Dump that one, we have electric trains already that do not require 'energy conversion' twice extra.

Hydrogen is only a storage medium when it has to be made from electricity and is more complex than a battery on all fronts.

Makes a great headline though.

[janch]

1 hour ago, geordie_lurch said:

The local BBC lunchtime news up in the North East just had a large feature on Hydrogen powered trains starting next year, the expected size of the Hydrogen industry by 2050 (2.5 trillion) and how the region has the chance to be "the beating heart" of the tech. There's also some new hydrogen research hub being opened in Middlesbrough.

Believe it or not but Woman's Hour on R4 today featured two lead women engineers who were involved with the test run of the prototype the other day.  One thing I gleaned from the interview was that hydrogen will be most useful on the minor routes as converting to electric trains is very costly and awkward with having to adapt tunnels etc because they are too narrow. 

I live on the GWR route which was electrified recently but with long delays because eg they had to dig out the Box tunnel near Bath in order to make room for all the overhead cables etc.

I can forsee a reversal of the Beeching cuts of the 60s with a re-opening of minor routes many of which still have th track in place.  This would fit in with the government's green agenda and increase use of public transport (post Covid of course).

I still have my stakes in GOG and SGC and I think I may as well keep them and see if they may yet come good.

[janch]

5 hours ago, Cattle Prod said:

Since Japan was mentioned a few pages back, it's probably a good one to look at for demand, as it has no production. Zero. Hence Pearl Harbour, but I digress... They seem to have largely dealt with the virus, or at least not had it affect the country too much. They seem to wear masks all the time anyway!

 

This is the kind of thing which has influenced me to think some countries in the east are doing well and don't seem to be suffering as much as we are in UK/US and Europe.

Look at this for example and see how little the dip was in March:

[nirvana]

Yankees bought the dip......AGAIN!

You know how we have these buttons...'Informative 'LOL' 'Cheers' and 'Agree'?

I think we need an extra one 'stop being a pufter' 

 

[JMD]

Good BTC podcast, explaining how trends like recent corporate purchases, eg Microstrategy (not to mention institutional money when it happens) will push price up. Some good macro discussion also. 

However, it is long (but can play 1.5x as these guys speak really slowly). W(H)ealth Warning, if you already have some btc, this video will seriously tempt you into doubling your holding!!

 

[nirvana]

Leonard will like this.....mate how many trades have you done on the shitter today? @leonardratso

Ok this is a silver chart, 5min......just as I was throwing in my metaphorical towel last night, Silver was bottoming....and look where it's gone since.......I know it's the 'macro thread' but other threads are like tumbleweeb....

click on the 'feck off you knob' bUtton if you want 

 

[JMD]

23 hours ago, Harley said:

Here's my list for the Investing.com Natural Gas Utilities industry.  Same criteria as before.  DYOR as before!

A few of the missing ones on your list but many failed with bad current ratio scores.  Some real dogs!  C****** was in there briefly but there were bigger boys, just as well given its 508% debt ratio!  However, a couple on the list are eye watering too.  One company seems to have 83% of its assets as goodwill and/or intangibles!  Generally a bit of a dog sector (polarised scores) based on my limited review requiring some careful footwork, unless a rising tide floats all boats or, as Buffet would possible say,  covers up the naked swimmers!

Warning:  My prior list, which I deleted, contained errors.  Maybe this one does too so please DYOR.

Harley, many thanks. Will you be posting your final table showing scores, like for the forestry+products one you posted a few days back? 

I think ENI is more like a BP, it has refineries and even its own petrol stations.

[nirvana]

@JMDdude are you seriously watching some 'trendy dudes' on youtube talking bollocks about bitcoin for 2 hours?

Overlay a bitcoin chart vs S&P or Nasdaq or something else and tell me if there is a major difference?

When BIG KAHUNA arrives, you won't get out of cryptos in time......then there's the robbery aspect...crypto exchanges keep getting hacked or just fall over...check out Mount Gox....

EDIT again:

bitcoin tossers expression of the year 'store of value'

also happens to be the gold bugs 'expression of the last 30 years'

Yeah FIAT is 'bogroll' but you need to keep it in perspective.......

 

[JMD]

On 06/10/2020 at 14:14, kibuc said:

Well, if anyone offered me a 95% LTV reasonable fixed-rate loan on a house I'm renting at the moment (it's around £500k) I'd very strongly consider it. I'm not really bothered with potential price drops, I can see myself staying in this place for the next 20 years anyway. It's the fact that I'd have to shell out most of my savings and miss the inflation cycle opportunities that's putting me off, but a 5% deposit changes that equation.

 

I wonder what the 'selection-criteria' will be (are you/or do you intend in the near future to become part of our red wall?)!!

Kibuc, i agree, people would be silly not to take advantage, but I do expect when the details of this government program are released, the announcement will go hand in hand with new property taxes. I'm thinking even levied on owner/occupied homes - beginning with those signing up to the new mortgage/housing deal. Of course over time, such taxes would be extended to everyone and all homes. 

[leonardratso]

32 minutes ago, 5min OCD speculator said:

Leonard will like this.....mate how many trades have you done on the shitter today? @leonardratso

Ok this is a silver chart, 5min......just as I was throwing in my metaphorical towel last night, Silver was bottoming....and look where it's gone since.......I know it's the 'macro thread' but other threads are like tumbleweeb....

click on the 'feck off you knob' bUtton if you want 

 

usual, 12 trades a day.

peck now owes me 5 loaves, was 8 earlier.

 

[nirvana]

19 minutes ago, leonardratso said:

usual, 12 trades a day.

lol, how about the Nasdaq? I'm eating dates myself, might have to squeeze one out soon...

 

[leonardratso]

9 minutes ago, 5min OCD speculator said:

lol, how about the Nasdaq?

it doesnt want to give up by the look of it, we might make daveh's crazy valuations after the election, but im poised over the sell button to ditch the lot issac newton style before hoying back in and losing it all in the south sea tulip mania

 

[Loki]

14 minutes ago, leonardratso said:

im poised over the sell button to ditch the lot...before buying back in

I am struggling with this myself.  Sector rotation or Big Kuhana...that is the million dollar question.

[MrXxxx]

3 hours ago, janch said:

can forsee a reversal of the Beeching cuts of the 60s with a re-opening of minor routes many of which still have th track in place

Is this the case?...my understanding was that they were all lifted hence why we have so many cycle paths on old track routes.

[Bobthebuilder]

6 minutes ago, MrXxxx said:

Is this the case?...my understanding was that they were all lifted hence why we have so many cycle paths on old track routes.

Loads still owned by the national railway, A few have been re opened already with many more on consultation. We had a chat about it a few hundred pages back. I am still hoping the Somerset and Dorset joint railway may re open one day.

[Bobthebuilder]

I am currently buying a new combustion analyser for gas boilers. Have noticed all the new ones state they are Hydrogen ready.. Interesting.

[nirvana]

31 minutes ago, Bobthebuilder said:

I am currently buying a new combustion analyser for gas boilers. Have noticed all the new ones state they are Hydrogen ready.. Interesting.

be careful out there

 

[Bobthebuilder]

44 minutes ago, 5min OCD speculator said:

be careful out there

 

Note how the Hydrogen burns from the open end of the ship. Hydrogen needs to mix with Oxygen to become cumbustive (15%), 100% pure Hydrogen will not explode but burn as it mixes with air. Same for natural gas (Methane).

Still, a crazy idea for a aircraft.

[DoINeedOne]

 

Came across this today while searching about Siemens again talking about converting Europes gas pipelines 

https://assets.siemens-energy.com/siemens/assets/api/uuid:3d4339dc-434e-4692-81a0-a55adbcaa92e/200915-whitepaper-h2-infrastructure-en.pdf

 

Random bits

In practice, UGS hydrogen capability was successfully tested years ago in two large caverns near Houston and a smaller cavern in Teesside, United Kingdom.

 

Between Lingen and Gelsenkirchen, the companies BP, Evonik, Nowega, OGE, and RWE Genera- tion are currently developing the first publicly-accessible hydrogen infrastructure over a length of 130 kilometers in the GET H2 Nucleus project. 

 

Due to the existing gas infrastructure, the transportation, storage, and distribution of hydrogen can also be carried out beyond Germany – at short notice and with little investment.

 

There are still challenges with the efficient compression of hydrogen. However, the tech- nologies and materials required for this are already in development.

 

Against this backdrop, the costs for retrofitting the lines – including decommissioning, water pressure tests, replacement of fittings and blowers and dismantling of connections, etc. – can be estimated at around 10-15% of a new construction according to current estimates by transmis- sion system operators