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

[Loki]

LIBOR is starting to be transferred over to SOFR this weekend

 

[Errol]

UK Downgraded To Aa3 By Moody's

https://www.zerohedge.com/markets/uk-downgraded-aa3-moodys

[Sugarlips]

BP flirting with March lows, surely it can only bounce off them as a retest, it’s hard to envisage it becoming the next stock that can’t be named..👀

[TNS]

1 hour ago, Sugarlips said:

BP flirting with March lows, surely it can only bounce off them as a retest, it’s hard to envisage it becoming the next stock that can’t be named..👀

Silence! 

[wherebee]

4 hours ago, Sugarlips said:

BP flirting with March lows, surely it can only bounce off them as a retest, it’s hard to envisage it becoming the next stock that can’t be named..👀

oh for fucks sake.  do you want to try 'they could never shoot me from that far away' next, or 'it's not going to rain, I'll leave the umbrella at home'.

[sancho panza]

On 14/10/2020 at 17:40, Cattle Prod said:

Interested that you sold Hochschild, Sancho, I recently added as I thought it looked quite bullish. Though I am very limited by choice in my SIPP.

I was jsut tinkering with our PM miners,moving marginal holdings into companies that offer more leverage.We have a core holdings of the larger ones(incl Hochschild) so we lightened up a bit and dropped it from a 0.5% position to 0.2%.We had some profit in there too.

We took some profits in the space in Sept and I've struggled to redploy it .Can't see much value beyond EGO/BVN at $12,RIO2,OGC(??),NCM.

Think Hoch is at a discount to FRES which has run a lot more.

On 14/10/2020 at 16:47, Cattle Prod said:

Much of it - oil is in everything. Though I'm also watching their nuclear building. Here's what they did when prices cratered:

That to me is the oil consumer equivalent of street kids rushing to gather loaves of bread that have fallen off the bakers truck. It's what you do when you're hungry.

They bought so much most of it ended up in floating storage outside Chinese ports. Most of that is drawn down though. I note this graph has exports to China peaking at just over 10mbbl, which is less then than the ~11 mbpd I get from the BP data, must be refinery gains or something.

 

Incredible chart .SO while oil was plummeting to -$37,the CHinese were buying up as much as they coud store......?

I've added some more oilies over the last week.The value in the sector makes buying PM miners a real struggle.

[MrXxxx]

13 hours ago, UnconventionalWisdom said:

What are people's thoughts on transport like go-ahead, stagecoach, national express? 

There was a lot of talk after corona hit and the they took a drumming. I didn't get any as I wasn't sure things would be good in the short term. The price then recovered but is now heading back towards the march lows. Long term I do think there will be demand. The only way governments can save the economy from our debt- reliant position is infrastructure improvements fueled by fiscal spending. Take on debt and then inflate it away. 

That would require getting people working and moved around- big demand for transport. 

Covid is now not new so I think they want take such a loss as before (lockdowns are now done in stages so there's more time for them to plan) but they could go down a lot when the BK hits.

I have no exposure so will prob get some soon, just not sure if Covid is going to cause them too much pain in the short-term.

GOG and NEX very different company structures I.e GOG uk centric in trains and local busses; govt changing rail franchise model so GOG will be pain a per passenger rate thus limiting profits. NEX more worldwide I.e US Greyhound and school buses, Germany local rail. Also NEX don't own/have cost of vehicles, use local firms more like subcontractors.

[sancho panza]

On 15/10/2020 at 00:56, JMD said:

 Tbh, despite watching this unfold, I still can't believe the crazy politics we now find ourselves in - this 'search for identity' - but this time by the majority, will in my opinion only snowball. It is a poisonous concept, introduced by the far left, and it will fracture society for a generation. The only think of light is that I think our first past the post system will at least 'save us' from getting any charismatic Weimer types. And the US has its own checks and balances. However the rest of Europe is I think fair game for far right/left politicians to hoover up the many unrepresented voters there, ie those who merely want a decent job. Tragically such 'luxuries' are no longer in the gift of our politicians and time will tell if it will end up with 'history repeating' on the continent.

I think the UK is more leveraged than say Europe where various types of PR systems allow disparate groups a voice in parliament.

If you look at the 2005 result.LAbour got a working majority with 35% of the vote.Therein lies the weakenss of FPTP.Ukip polled 4 million votes ,tories got 11.3 million

On 15/10/2020 at 03:44, Tingles said:

Short sighted, tiresome and inconvenient:

https://www.fca.org.uk/news/press-releases/fca-bans-sale-crypto-derivatives-retail-consumers

trying to steer you into 30 year bonds at 1%

 

On 15/10/2020 at 13:13, kibuc said:

Wesdome comes up with 3Q production numbers that disappoint for the first time in human memory. Mill maintenance in August resulted in big drop in ore tonnes processed, and grades are also down from absurd 18g/t to 13.8g/t, resulting in 20koz production (compared to 25koz in Q1 and Q2 each). Annual guidance of 90-100koz not threatened at all but it's likely that I won't be beaten for the first time in years, a mid-point more likely.

WDO is obviously a fantastic company, very well run and with great potential in Kiena, but there's a risk that it's all been priced in already, along with specatular beats on production guidances. I wouldn't be surprised if these results brought a short-term correction.

All these companies have the end of their 'sweet' run when everything goes right.Even AAPL.One day

[Castlevania]

47 minutes ago, sancho panza said:

I was jsut tinkering with our PM miners,moving marginal holdings into companies that offer more leverage.We have a core holdings of the larger ones(incl Hochschild) so we lightened up a bit and dropped it from a 0.5% position to 0.2%.We had some profit in there too.

We took some profits in the space in Sept and I've struggled to redploy it .Can't see much value beyond EGO/BVN at $12,RIO2,OGC(??),NCM.

Think Hoch is at a discount to FRES which has run a lot more.

I ran out of patience with Centamin so redeployed that a couple of weeks ago along with some William Hill gains into Harmony; Sibanye; Hochschild; Elderado; Iamgold and uhh Great Panther. At current spot prices they’re all reasonable value in my opinion. 

If you’re willing to look into the cesspit that is AIM Shanta Gold still looks cheap despite solid gains over the year - it’s my largest holding yet I’m unwilling to sell given their low (in my opinion) valuation. Clearly do your own research and don’t take my views as advice as I’m often very wrong.

 

 

[Barnsey]

15 hours ago, BurntBread said:

As soon as I read that central banks were thinking of issuing digital currencies - and in particular digital currencies that are not block-chain based - my immediate reaction was: isn't that what we already have?

Am I missing something here, or is the only novel aspect of these currencies the fact that there is no way to remove them, even temporarily, from a bank? If so, that's not too far from what we have now, as only a small fraction (1%?) of currency circulates as coins and notes, and if the bank wants to charge (for example) a negative retail interest rate, that would be no harder, and no less likely to induce a bank run, than implementing a wealth tax. We already have negative real interest rates anyway.

Been mulling over this myself as I think it's much closer than folks expect, no doubt launched with helicopter/UBI money to encourage most to adopt early on. At the moment I'm just thinking it's an inflation tool, for example time expiry deposits which can only be used for certain sectors could be potentially very inflationary indeed. Then the concept of bail ins or highly variable personal interest rates come into play later on. Certainly going to be paying attention from now on, but what can one do to avoid it's greater control? Perhaps part of the means to facilitate a global debt reset?

[geordie_lurch]

50 minutes ago, Barnsey said:

Been mulling over this myself as I think it's much closer than folks expect, no doubt launched with helicopter/UBI money to encourage most to adopt early on. At the moment I'm just thinking it's an inflation tool, for example time expiry deposits which can only be used for certain sectors could be potentially very inflationary indeed. Then the concept of bail ins or highly variable personal interest rates come into play later on. Certainly going to be paying attention from now on, but what can one do to avoid it's greater control? Perhaps part of the means to facilitate a global debt reset?

No Government can pay back all the current made up money so all they have to do to get people on board is say we will write off all your existing old money debt if you use our new digital money and only pay benefits etc via this new digital money. 90% of people would bite your arm for an offer of writing off their debts etc.

The following came my way the other day which although it contradicts itself in many ways and is very tin foil hat like never mind the alleged source it does touch on and expand on some of what we are hypothesing

https://nexusnewsfeed.com/article/geopolitics/canadian-control-measures-just-the-tip-of-the-earth-sized-iceberg
 

Quote

What we were told was that in order to offset what was essentially an economic collapse on a international scale, that the federal government was going to offer Canadians a total debt relief.

This is how it works: the federal government will offer to eliminate all personal debts (mortgages, loans, credit cards, etc) which all funding will be provided to Canada by the IMF under what will become known as the World Debt Reset program.

In exchange for acceptance of this total debt forgiveness the individual would forfeit ownership of any and all property and assets forever.

 

[Wheeler]

Wolfstreet posted an interesting article on bankruptcies in US oil and gas this week:

 

https://wolfstreet.com/2020/10/14/great-american-oil-gas-massacre-bankruptcies-hit-new-milestone-now-bigger-companies-let-go/

The amount of secured and unsecured debts, such as loans and bonds, listed in bankruptcy filings in the third quarter by US oil and gas companies, at $34 billion, pushed the total oil-and-gas bankruptcy debt for 2020 to $89 billion, according to data compiled by law firm Haynes and Boone. And this nine-month total already surpassed the full-year total of oil-bust year 2016.

 

More at the link.

[NogintheNog]

56 minutes ago, geordie_lurch said:

No Government can pay back all the current made up money so all they have to do to get people on board is say we will write off all your existing old money debt if you use our new digital money and only pay benefits etc via this new digital money. 90% of people would bite your arm for an offer of writing off their debts etc.

In principle I totally agree with this statement, however Alan Greenspan once said that the US government could pay back any debt in US$ simply by running the printing press. This was back in the 2005, at that time of course the west had not deployed QE!

So I would change the above to;

No Government can (legitimately) pay back all the current made up money

He also said in 2011 inflation is always a result of the ratio of a 'good' (item, service) to the amount of money.

https://youtu.be/7BG0NbsCSEg?t=80

[Castlevania]

5 minutes ago, NogintheNog said:

In principle I totally agree with this statement, however Alan Greenspan once said that the US government could pay back any debt in US$ simply by running the printing press. This was back in the 2005, at that time of course the west had not deployed QE!

So I would change the above to;

No Government can (legitimately) pay back all the current made up money

He also said in 2011 inflation is always a result of the ratio of a 'good' (item, service) to the amount of money.

https://youtu.be/7BG0NbsCSEg?t=80

 

11 hours ago, Errol said:

UK Downgraded To Aa3 By Moody's

https://www.zerohedge.com/markets/uk-downgraded-aa3-moodys

Yeah these two items tie in, in that as long as a country issues debt in it’s own currency then they can’t default. The value of that currency can plunge relative to other currencies but they can always print some more. So Moody’s exercise is pointless. Countries only default when they’ve borrowed in a foreign currency that they have no control over. See the perpetual defaulter Argentina who invariably default on USD denominated borrowings.

[NogintheNog]

18 minutes ago, Castlevania said:

 

Yeah these two items tie in, in that as long as a country issues debt in it’s own currency then they can’t default. The value of that currency can plunge relative to other currencies but they can always print some more. So Moody’s exercise is pointless. Countries only default when they’ve borrowed in a foreign currency that they have no control over. See the perpetual defaulter Argentina who invariably default on USD denominated borrowings.

Yes, but there is a effectively still a default. The holders of GB£(or Euro, $, Yen etc) have paid for the default.

[geordie_lurch]

Obviously there have been currency wars for years but the current international 'stimulus' packages that pretty much all of the G20 etc are doing at such ridiculously large numbers does make me suspicious they all know it's all going to be wiped out anyway when they roll everything over to the new world (order?) digital currencies as part of a global 'reset'

[MrXxxx]

On 15/10/2020 at 10:56, DoINeedOne said:

Ricks not a gretta fan

around the 32:00 talks about oil and gas and estimates peak oil around 2035 and that we will have a price recovery in oil and gas that will take your face off 

 

 

I found this a really worthwhile listen with many 'wise words' (although this could be confirmation bias!)., especially around minute 32 and 35. What I would like to know is the three main Uranium miners he mentions at minute 38 so i can investigate further; he doesn't mention them by name...any ideas folks?

[Loki]

4 minutes ago, geordie_lurch said:

Obviously there have been currency wars for years but the current international 'stimulus' packages that pretty much all of the G20 etc are doing at such ridiculously large numbers does make me suspicious they all know it's all going to be wiped out anyway when they roll everything over to the new world (order?) digital currencies as part of a global 'reset'

If (IF!) there's any truth in the past couple of pages I suppose all we can do is hope our current investments slip through the net and as most of us are very debt averse we will be left alone for now.

The next phase, whatever it is, will still need the infrastructure spending in order to have the real-time control systems that 5G could support better than 4G.  (No tinfoil hattery - it's just a fact that 5G is better than 4G)

 

[Wheeler]

55 minutes ago, MrXxxx said:

I found this a really worthwhile listen with many 'wise words' (although this could be confirmation bias!)., especially around minute 32 and 35. What I would like to know is the three main Uranium miners he mentions at minute 38 so i can investigate further; he doesn't mention them by name...any ideas folks?

I would imagine he's talking about BHP Billiton, Rio Tinto and Cameco. 

The following link lists the traded companies I believe. It is very slow to open so give it a minute or two (copied and pasted to save some time)

https://www.miningfeeds.com/uranium-mining-report-all-countries

URANIUM MINING COMPANIES LISTED IN ALL COUNTRIES

Category/Country Filter

           Gold                     Silver                     Copper                         Uranium                     Diamonds                     Coal                     Potash                     Tech Metals                             --Platinum Group                                              -----Palladium                                         -----Platinum                                         -----Rhodium                                                --Lithium                                                     --Rare Earths                                                     --Strategic Minerals                                              -----Vanadium                                         -----Cobalt                                        Base Metals                             --Nickel                                                     --Iron                                                     --Zinc-Lead                                                     --Tungsten-Tin                                    all-countries australia Canada United Kingdom United States of America united-kingdom united-states-of-america All Countries   

 

Basic Data Points

 Ticker   Last Price (native)   Change (native)   Change (%)   Day Low   Day High   52 Week Low   52 Week High   Volume   MC (M CAD$)  

 

Compare (Show all)	Company	Ticker	Last Price (native)	Change (native)	Change (%)	Day Low	Day High	52 Week Low	52 Week High	Volume	MC (M CAD$)
	BHP Billiton Ltd.	BHP.AX	42.04	0.040	0.10%	42.07	42.33	30.31	42.33	4,028,709	197,087.0
	Rio Tinto Ltd.	RIO.AX	106.45	0.600	0.56%	106.80	107.94	69.41	107.99	946,244	163,376.0
	Cameco Corp.	CCO.TO	14.04	0.020	0.14%	13.98	14.17	12.31	17.12	403,495	5,564.7
	Uranium Participation Corp.	U.TO	4.20	-0.010	-0.24%	4.16	4.21	3.99	5.14	75,527	578.5
	Altius Minerals	ALS.TO	12.72	0.390	3.07%	12.80	13.11	10.04	13.93	50,151	561.9
	Fission Uranium Corp.	DML.TO	0.70	0.000	0.00%	0.68	0.70	0.59	0.89	82,839	412.4
	Uranium Energy Corp.	UEC	1.36	-0.050	-3.68%	1.31	1.37	1.12	1.89	2,000	298.7
	Antoro Resources	ORE.V	0.64	0.040	6.25%	0.60	0.68	0.39	0.85	164,300	144.4
	Starfire Minerals Inc.	SFR.V	0.18	-0.015	-8.33%	0.15	0.18	0.06	0.22	129,374	135.0
	Liontown Resources Ltd.	LTR.AX	0.11	0.000	0.00%	0.11	0.11	0.02	0.13	2,541,399	127.1
	Berkeley Resources Ltd.	BKY.AX	0.35	0.000	0.00%	0.35	0.35	0.14	0.88	1,485	83.1
	Arafura Resources Limited	ARU.AX	0.10	0.005	5.00%	0.10	0.11	0.04	0.14	2,983,424	80.8
	Wealth Minerals Ltd.	WML.V	0.35	0.150	43.48%	0.33	0.48	0.31	1.05	292,115	66.9
	Deep Yellow Ltd.	DYL.AX	0.34	0.000	0.00%	0.34	0.35	0.30	0.58	173,394	66.7
	UEX Corp.	UEX.TO	0.17	0.000	0.00%	0.17	0.17	0.14	0.26	486,979	64.8
	Ucore Rare Metals Inc.	UCU.V	0.23	-0.025	-10.87%	0.20	0.24	0.09	0.34	170,620	58.0
	Golden Valley Mines Ltd.	GZZ.V	0.35	-0.020	-5.71%	0.33	0.34	0.22	0.39	24,100	44.2
	Toro Energy Ltd	TOE.AX	0.02	0.000	0.00%	0.02	0.02	0.02	0.04	494,292	40.0
	A-Cap Resources Ltd.	ACB.AX	0.04	-0.002	-5.71%	0.03	0.03	0.03	0.07	11,000	31.9
	Consolidated Abaddon Resources	ABN.V	0.25	0.000	0.00%	0.24	0.25	0.11	0.49	152,190	28.5
	Matrix Metals Ltd.	MRX.AX	0.01	0.000	0.00%	0.01	0.01	0.01	0.01	715,250	24.5
	Wind River Resources	WRR.V	0.19	-0.005	-2.70%	0.18	0.19	0.05	0.27	162,500	24.0
	Azimut Exploration Inc.	AZM.V	0.40	-0.020	-5.00%	0.38	0.38	0.22	0.52	7,000	20.3
	Globex Mining Enterprises Inc.	GMX.TO	0.37	0.000	0.00%	0.37	0.38	0.25	0.42	3,400	18.7
	Red Metal Ltd.	RDM.AX	0.09	0.000	0.00%	0.09	0.09	0.09	0.14	359,512	17.6
	Encounter Resources Ltd.	ENR.AX	0.07	0.001	1.43%	0.07	0.07	0.04	0.12	81,158	17.1
	Adelaide Resources Ltd.	ADN.AX	0.02	0.000	0.00%	0.01	0.02	0.01	0.02	5,755,799	17.0
	Purepoint Uranium Group Inc.	PTU.V	0.08	-0.005	-6.67%	0.07	0.08	0.06	0.11	43,258	15.0
	Jindalee Resources Ltd.	JRL.AX	0.34	0.065	19.12%	0.40	0.42	0.23	0.45	121,062	13.2
	Pinetree Capital Ltd.	PNP.TO	1.53	-0.150	-9.80%	1.29	1.50	1.20	2.29	3,800	12.5
	Quaterra Resources Inc.	QTA.V	0.06	0.000	0.00%	0.06	0.06	0.05	0.13	58,000	12.3
	Energy Ventures Ltd.	EVE.AX	0.01	0.000	0.00%	0.01	0.01	0.00	0.01	1,373,946	10.4

[DoINeedOne]

1 hour ago, MrXxxx said:

I found this a really worthwhile listen with many 'wise words' (although this could be confirmation bias!)., especially around minute 32 and 35. What I would like to know is the three main Uranium miners he mentions at minute 38 so i can investigate further; he doesn't mention them by name...any ideas folks?

Even about the population the world is getting better believe it or not but still alot people living in what the book calls level 1&2  a book i was recomended to read is 

Factfulness - https://www.amazon.co.uk/Factfulness-Illustrated-Hans-Rosling/dp/1529387159/

I still need to finish it but it has some interesting charts information etc... couple random pages

 

The author also did a few Ted talks one from 2010 about green movement and energy use

 

[Errol]

IMF CALLS FOR 'A NEW BRETTON WOODS'

https://www.imf.org/en/News/Articles/2020/10/15/sp101520-a-new-bretton-woods-moment

[Long time lurking]

 

[Loki]

53 minutes ago, Errol said:

IMF CALLS FOR 'A NEW BRETTON WOODS'

https://www.imf.org/en/News/Articles/2020/10/15/sp101520-a-new-bretton-woods-moment

Quote

 

To reap the full benefits of sound economic policy, we must invest more in people. That means protecting the vulnerable. It also means boosting human and physical capital to underpin growth and resilience.

COVID19 has underscored the importance of strong health systems.

Rising inequality and rapid technological change demand strong education and training systems—to increase opportunity and reduce disparities.

Accelerating gender equality can be a global game-changer. For the most unequal countries, closing the gender gap could increase GDP by an average of 35 percent.

And investing in our young people is investing in our future. They need access to health and education, and also access to the internet—because that gives them access to the digital economy – so critical for growth and development in the future.

Expanding internet access in Sub Saharan Africa by 10 percent of the population could increase real per capita GDP growth by as much as 4 percentage points.

Digitalization also helps with financial inclusion as a powerful tool to help overcome poverty.

Just as the pandemic has shown that we can no longer ignore health precautions, we can no longer afford to ignore climate change—my third imperative.

We focus on climate change because it is macro-critical, posing profound threats to growth and prosperity. It is also people-critical and planet-critical.

In the last decade, direct damage from climate-related disasters adds up to around $1.3 trillion. If we don’t like this health crisis, we will not like the climate crisis one iota.

 

They're obsessed.  Anyone who can't join the dots now...I don't know what to say.

[MrXxxx]

On 15/10/2020 at 11:03, Loki said:

I am hesitant to post this, but it specifically mentions documented Fed policies, and we talk about the Fed on this thread.   I am posting it as I am Interested in others thoughts on this vid, rather than it being 'proof' of anything.

 

Thanks for posting this @loki, I would never normally come across such vids and it was really thought provoking. The only weakness/barrier here is that it requires 100% compliance, and as we have seen in such restrictive scenarios (i.e Communist countries, wartime restirictions) the use of a Black Market can circumvent these i.e people buying commodities and trading/bartering them:

 

[Loki]

4 minutes ago, MrXxxx said:

The only weakness/barrier here is that it requires 100% compliance, and as we have seen in such restrictive scenarios (i.e Communist countries, wartime restirictions) the use of a Black Market can circumvent these i.e people buying commodities and trading/bartering them:

That might be it's weakness...I have at the back of my mind the Pareto principle...the system should be able to sustain itself with 80% compliance.  Here's to us hopefully being the 20% that end up getting by just fine with our Britannias and Sovereigns...if things end up that bad.