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


spunko

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DurhamBorn
1 hour ago, DoINeedOne said:

Vodafone Group Chairman bought 305,000 shares 

Aggregated price: GBP 1.350

BT CEO bought another £2 million of shares as well straight after results.The top brass know exactly what happens once prices rise and depreciation stays steady.I noticed today VOD cost of debt was now about 2.8% across the debt.Key is that they can pay a lot off due to profile as it comes due and not roll over if they want.

Notice Imperial Brands decent results as well,and going along nicely.Paying down £3bill of debt to around £10bill.I think they will want to pay off another £2 bill yet,but might start share buy backs in around 10 months and another £1 bill of the debt and do half and half for a couple of years.

Imperial will also have to be careful not to pay too much debt off before share buy backs because if they do they would be a sitting duck to be taken over by someone like China Tobacco.I think the CEO has it right though in aiming for around £8 bill debt then buybacks and maybe then tickle the debt down slowly.

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3 hours ago, Castlevania said:

It’s Tuesday. We all know what happens on a Tuesday.

 

68D54AC2-32E6-4E80-8C12-B5BEA6ADDEE8.gif

Agreed... but is it real, or is it manipulated?.. oh well, so long as today's audience (Roman circus?) are kept entertained.     (i know obvious joke, but couldn't help myself!!)

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1 hour ago, planit said:

energy is energy and it is precious. The bollox about mining using green pisses me off as that is just taking green capacity off someone else who could use it to replace coal.

Nothing wrong with pointing this out

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reformed nice guy
3 hours ago, planit said:

Any VOD holders here got any comments, was a revenue decline expected and is this temporary?

I have been watching for a while and thought this might be a good entry point .

Dropped from 142 to 132.

 

Got a decent holding but il wait til it's back to two digits before adding more

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2 hours ago, Harley said:

Really?  Has he not hedged the risk he's wrong as well?  And those ultrashorts (why would he use an ETF, that's more for the likes of me) implies he expects the mother of all declines and/or it to happen very soon.  Just sounds odd, maybe not the full picture?

Hmm... Not really what you were getting at Harley, but Kaplan in his latest newsletter discloses, as per usual, his investment allocations (generous thing to do i think; and notice he also shorts Tesla) - but anyway I thought i'd use the link he provides to watch Kaplan's new short 'comedy play' - as i thought it might give me insights into the man's investment psyche(?!)... unfortunately, i can report back to the thread that it did not help one jot. (not sure what i was expecting, but the play itself was ghastly btw).

True Contrarian: “Don't panic. The time to sell is before the crash, not after.” --John Templeton (truecontrarian-sjk.blogspot.com)

 

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jamtomorrow
20 minutes ago, Loki said:

Nothing wrong with pointing this out

I like Bitcoin's energy use - it's what makes the network hard to attack, and that seems valuable to me as a user.

More generally, the idea we should start squabbling amongst ourselves over end-uses of energy because we've f***ed up supply-side policy is just plain daft - to my mind, that just represents civilizational retreat.

If anything, we could do with a good energy crisis to properly focus minds on supply-side. So I'm just nipping away to buy more Bitcoin, open some windows and turn the thermostat up.

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what the hell is happening today?  everything is green; I'm up across the board and the numbers are jumping by the minute.  Did the fed just announce more money printing?

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Noallegiance
11 minutes ago, wherebee said:

what the hell is happening today?  everything is green; I'm up across the board and the numbers are jumping by the minute.  Did the fed just announce more money printing?

Well, yesterday I was well up on my SIPP which is all value, no momentum stocks, and the major indices were down.

Today indices are up and my SIPP is continuing up.

To my inexperienced mind, this is what the beginning of rotation looks like.

Time will tell.

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Bricormortis
37 minutes ago, wherebee said:

what the hell is happening today?  everything is green; I'm up across the board and the numbers are jumping by the minute.  Did the fed just announce more money printing?

DXY is 89 something, maybe there is anticipation that this shakes people out of cash ?  It will / should propel the metals. ( upwards ! )

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DoINeedOne
On 16/04/2021 at 07:38, planit said:

Shell To Put Energy Transition Plan To Shareholder Vote

The problem is here:

"Shell is also set to tie the bonuses for its top executive directors more closely to the group’s performance in reaching its net-zero goals, if shareholders approve the plan at the annual general meeting in May"

 

There can't have a situation where directors win bonuses by sabotaging the company profits. The oil companies are now counting Scope 3 emissions - they include those that aren’t produced at a company’s facilities and that customers produce when they burn fossil fuels. So the less oil they produce the lower the emissions.

There will be a small number of vocal activist investors plus all the woke fund managers (where it is not their money) voting this through. I am not sure if I know of another situation where directors are rewarded contrary to company performance.

 

Pretty shocking if this gets voted through, does anyone have any suggestions of companies where this might not happen?

So this is today was listening to the AGM this morning but it was a bit of a snooze fest of woke questions 

How the voting went i don't know ended up taking the dog for a walk 

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DoINeedOne

Net zero: IEA calls for an immediate halt to new oil and gas developments

Paris-based organisation says an immediate halt to fossil fuel development is needed if global temperature rises are to be limited to 1.5 degrees

https://www.upstreamonline.com/energy-transition/net-zero-iea-calls-for-an-immediate-halt-to-new-oil-and-gas-developments/2-1-1011584

 

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27 minutes ago, wherebee said:

what the hell is happening today?  everything is green; I'm up across the board and the numbers are jumping by the minute.  Did the fed just announce more money printing?

Parabolic melt-up!

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leonardratso

agronomics took a fundraiser lately, looks like they are offering it to current holders as well, this came as a corporate event to my lloyds s&s isa;

AGRONOMICS LIMITED - Offer for Subscription

AGRONOMICS LIMITED is proposing an Offer for Subscription on the following basis:

Broker Option.

New Agronomics Limited Ordinary shares at a cost of 22 pence per share.

Investors can subscribe for any amount of new shares.

Please express your election as the number of shares you wish to apply for.

Please note that any elections made will not be submitted to the Company until after our internal election deadline has passed. If the Broker Option is closed prior to our internal election deadline, we will not be able to submit your election.

By participating in this event and to enable us to execute your instruction it may be necessary for us to give your name and address to this company or its agents.

You Have The Following Option:

1 Accept the Offer and apply for shares at the price specified above.
   

Important Information & Other Key Dates:

On 12th May 2021, Agronomics Limited (Agronomics) announced that they had completed a conditional placing of and subscription for 284,090,910 new shares with existing and new investors at a price of 22 pence per share, to raise gross proceeds of GBP62.5 million.

The Company is now giving existing shareholders the opportunity to participate in the fundraising, on the same terms as the investors, through a Broker Option (the Offer).

Under the terms of the Offer, shareholders can subscribe for new Agronomics shares at a price of 22 pence per share up to an aggregate maximum amount of GBP 2 million.

For every share successfully subscribed for, you will also receive 1 warrant which will grant the holder the right to subscribe for an additional share at a cost of 28.5 pence.

If the Offer is over-subscribed and the allocation of new shares is scaled back, any cash consideration owed to you will be returned to your account when received back from the Registrar.

Please note that as your shares are held through a nominee, all elections to subscribe will be treated on a nominee level and MAY therefore be subject to scaling back (reduction in the number of shares applied for) to a greater degree than that of an individual shareholder.

Should you wish to apply for new shares, we will endeavour to make an election to the Company on your behalf. If for any reason this is not possible, the funds will be returned to your account.

If you wish to accept the Offer and intend to fund the take up of the new shares by selling existing shares held in your portfolio, you will need to ensure that the trade is executed on or before Friday 21st May 2021 to ensure funds are available by our deadline.

Please note that if you submit your election by post that your election must reach us by no later than Sunday 23rd May 2021. Any elections received after this date will not be accepted. If you have any concerns that your election will not reach us in time, please contact us directly by phone prior to the deadline and we will log your election manually.

Should you choose to take up the Offer, the new shares are expected to be received on or after 1st June 2021.

Please note that this correspondence is not to be taken as a recommendation to subscribe or otherwise.

Before making any decision, please take into consideration all relevant factors of the event including the current share price and any possible tax implications. If you require any further information in making your decision, please contact an appropriate professional advisor.

For further details about the Offer, we recommend you read the various Regulatory News Service (RNS) announcements related to the Fundraising which can be found on the Company website at, www.agronomics.im/latest-news/


What Happens If I Don't Elect ?

If you do not wish to apply for extra shares you should take no action.


When Is The Last Time I Can Elect ?

Please ensure you submit your option before 23 May 2021 23:59 to enable us to process your instruction in accordance with the Company's current published timetable for this event. This timetable may change as explained above.

How Will Payment Be Made ?

Your Share Dealing ISA Account must be funded with sufficient cash by 23 May 2021 23:59 subject to available headroom.
 

  • The most efficient way to fund your Share Dealing ISA Account is by using a debit card, where you can fund your account immediately using the 'Fund and Withdraw' facility online or by contacting our call centre.
  • If you do not have a debit card set up on your account, simply contact our call centre and we can set this up immediately.
  • If you choose to sell shares held in your Share Dealing ISA to raise funds required for this Offer the Settlement Date of the sale will need to be by 23 May 2021 23:59.

    Please note that it is your responsibility to ensure sufficient cleared funds are available in your Share Dealing ISA Account by 23 May 2021 23:59. Payment will NOT be taken from your bank account automatically.

    If you do not have sufficient cleared funds then we will take up the maximum numbe

     


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3 hours ago, Hancock said:

 

https://www.telegraph.co.uk/business/2021/05/18/net-zero-means-no-new-oil-gas-fields-warns-iea/

Net zero means no new oil and gas fields, warns IEA

IEA calls for abrupt halt to fossil fuel era as it warns demand must fall by 75pc to attain climate goals

ByRachel Millard18 May 2021 • 6:00am

The age of oil and gas exploration is already over and no new fields will need to be developed if the world succeeds in bringing global warming under control, the International Energy Agency has said.

In a landmark report on the path to net zero carbon emissions by 2050, the organisation (IEA) says that oil demand will need to drop by 75pc over the next three decades - rendering the need to exploit new reserves obsolete. No further coal mines will be needed either.

Its forecasts suggest that the age of fossil fuels is coming to an abrupt end, and could raise fresh fears that investors have ploughed billions of pounds into worthless oil and gas projects.

The IEA - whose 30 member states include the UK, US, Germany and France but not China, the biggest carbon emitter - also calls for a worldwide ban on new petrol and diesel cars from 2035, and says that a dramatic increase in solar power will be needed to turbocharge the green revolution.

Panels equal in size to the world's largest solar park must be added every day as part of a colossal overhaul of power sources, it says in the report released today.

It expects natural gas use to drop 50pc as batteries replace petrol and diesel in cars, and hydrogen and electric pumps take a bigger role in home heating.

Gas and renewables have largely replaced coal

Bar chart with 6 data series.

The IEA report says: “Fossil fuel use falls drastically in the net-zero emissions scenario by 2050 and no new oil and natural gas fields are required beyond those already approved for development. 

“No new coal mines or mine extensions are required. Low-emission fuels - biogases, hydrogen, and hydrogen-based fuels - see rapid growth.”

The global energy system is already undergoing a huge overhaul, with money pouring into renewables and oil and gas behemoths such as BP and Shell pledging to slash their carbon emissions.

But the stark vision of an end to the development of new oil and gas fields is likely to send tremors through the industry, and bolster calls from activists for projects to be ditched now. The IEA said investment in existing projects will continue to be needed.

In 2019, then-Bank of England Governor Mark Carney said that millions of savers' pension funds could lose their value because of the switch away from oil and gas development.

The IEA report has been published six months ahead of the United Nations' Cop26 international climate change conference, which will be hosted in Glasgow by Prime Minister Boris Johnson.

Countries from around the world will meet to try and build on the agreements set out at Cop21 in Paris in 2015 to limit global warming to well below 2C, and preferably to 1.5C. 

The UK two years ago became the first major economy to pledge to slash greenhouse gas emissions to net zero by 2050. 

The IEA said several other countries have since followed suit, with net zero pledges now covering around 70pc of global GDP and CO2 emissions.  

But executive director Dr Fatih Birol warned global greenhouse gas emissions continued to grow and  said: “This gap between rhetoric and action needs to close if we are to have a fighting  chance of reaching net zero by 2050 and limiting the rise in global temperatures to 1.5 degrees.  

“Doing so requires nothing short of a total transformation of the energy systems that underpin our economies. We are in a critical year at the start of a critical decade for these efforts.”

The UK is already ahead on some of the IEA’s calls, with its own ban on the sales of new petrol and diesel cars bought forward to 2030. It has also set out plans to quadruple the amount of offshore wind.

However, ministers have so far stopped short of naming a date for when oil and gas exploration licences in the North Sea will no longer be allowed. 

Instead, new licencing rounds will be subject to a ‘climate compatibility checklist’ and will not go ahead if they are deemed to be incompatible with the UK’s net zero goals. 

The IEA said it is mindful that any overhaul of the energy system needs to be fair and that developing economies must get any help they need to help provide energy in a sustainable way. 

Greenpeace said the report makes clear that there is no need or justification for new oil and gas wells in the North Sea. 

Charlie Kronick, senior climate adviser for Greenpeace UK, added: “Yet the UK government undermines any claims to climate leadership by planning to press ahead with more oil and gas extraction. 

“To deliver on this government’s own climate rhetoric, and what the IEA now demands, Business Secretary Kwasi Kwarteng must rule out new oil and gas licences.”

Crikey absolutely no let up, hope its just the usual barmy brigade getting uppity and strident ahead of the COP conference.

But to paraphrase Pulp Fiction... the environmentalists increasingly  'want to go medieval on our assets!!!

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Don Coglione
5 minutes ago, JMD said:

Crikey absolutely no let up, hope its just the usual barmy brigade getting uppity and strident ahead of the COP conference.

But to paraphrase Pulp Fiction... the environmentalists increasingly  'want to go medieval on our assets!!!

The composition of that word tickles me daily.

Just caught something about this on Radio 2, bloke was saying that swapping domestic gas boilers for heat source pumps to hit their target would mean installing 1.7m pumps every year. Like that is going to happen. Blokey also reckoned that hydrogen was not the answer, as it could not be transported long distances - any knowledge on that?

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2 hours ago, Loki said:

Honestly?

Because i saw it tweeted along with Arch and saw my SIPP as free punt money😂😂😂

Rub it why don't you Loki!!, not really i asked for the full disclosure, so thank you. But the thing is that Arch Resources was the other coal miner i neglected to use/buy!! 

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10 minutes ago, JMD said:

Rub it why don't you Loki!!, not really i asked for the full disclosure, so thank you. But the thing is that Arch Resources was the other coal miner i neglected to use/buy!! 

Oh no xD sorry mate

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1 hour ago, jamtomorrow said:

I like Bitcoin's energy use - it's what makes the network hard to attack, and that seems valuable to me as a user.

More generally, the idea we should start squabbling amongst ourselves over end-uses of energy because we've f***ed up supply-side policy is just plain daft - to my mind, that just represents civilizational retreat.

If anything, we could do with a good energy crisis to properly focus minds on supply-side. So I'm just nipping away to buy more Bitcoin, open some windows and turn the thermostat up.

Yes. And of course you could argue that Bitcoin is actually rather pristine and even rather 'environmental, given that it doesn't seek to 'pollute or debase' the money supply or currency system!!! 

However, i'd still like to know 'which side' (ie the bitcoiners or their detractors) is correct: Where does the BTC miners' energy mostly come from - does it come from so called 'off-grid green energy' sources (eg geothermal, solar, dams, gas flaring, etc); or does it come mainly from the grid? Difficult to quantify i guess, but saying that mining consumes the equivalent of half of the UK's electricity supply (this is the latest BBC stat) just doesn't sound right to me. What i mean is there are many moving parts - the BTC miners seek out the lowest cost energy and that is never direct from the grid, which is after all why their DC's are usually located in the remote regions of the earth.   

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Castlevania
4 hours ago, Harley said:

Ta.  My real question was do we get the same nice WHT exemption for Canadian stocks (wherever listed) as US stocks - ie.  Is Canadian tax law the same as the US?

I think it’s reduced if held in a SIPP. I tried to work it out on some dividends I received a few months ago, but got confused on currency - the dividend i was looking at was simply stated as being in $ but didn’t specify whether that was Canadian or US Dollars.

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Castlevania
3 minutes ago, JMD said:

Of course you could even argue that Bitcoin is actually environmental, given that it doesn't seek to pollute or debase the money supply or currency system!!! 

However, i'd still like to know 'which side' (ie the bitcoiners or their detractors) is correct: Where does the BTC miners' energy mostly come from - does it come from so called 'off-grid green energy' sources (eg geothermal, solar, dams, gas flaring, etc); or does it come mainly from the grid? Difficult to quantify i guess, but saying that mining consumes the equivalent of half of the UK's electricity supply (this is the latest BBC stat) just doesn't sound right to me. What i mean is there are many moving parts - the BTC miners seek out the lowest cost energy and that is never direct from the grid, which is after all why their DC's are usually located in the remote regions of the earth.   

Could you view Bitcoin as a store of energy?

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DoINeedOne

Need to add a link as this is such a great site and their free weekly email https://telecoms.com/509801/vodafone-hikes-capex-for-connectivity-and-new-growth-platforms/


Vodafone spooked the market on Tuesday with the announcement that it will hike spending levels in the coming year.

The telco group puts capital spending at around the €8 billion mark for financial year 2022, up from €7.9 billion in the year to the end of March and €7.4 billion in fiscal 2020.

“The pandemic has effectively accelerated digitalisation by five years,” Read said on the operator’s full-year results call, at which he presented a set of mid-term targets that included revenue growth in both Europe and Africa, and mid-single digit growth in both EBITDAaL and free cash flow.

“We have a window of opportunity to deliver this growth and we are choosing to invest more,” he said. While incremental 5G investment will be continue to be funded via “internal efficiencies,” as Read put it, “we do plan to step up investment in high-return opportunities, particularly Vodafone Business and Vantage Towers,” he said.

Around a third of the extra capex will go into connectivity, explained finance chief Margherita Della Valle, noting that customer behaviour has changed as a result of the pandemic and that change is likely to be permanent. “We are spending more to service our network performance, which in turn will support our commercial momentum,” she said.

The remainder will be ploughed into new growth areas, split between digital platforms and services and growth capex for Vantage Towers; the latter “is going to give us returns in excess of our cost of capital,” she said.

Read, meanwhile, hammered home the message on growth, pointing out that Vodafone posted a 1.7% growth rate in Q4, excluding roaming. Given that at group level full-year revenues were down 2.6% to €43.8 billion, while adjusted EBITDA fell by 1.2% to €14.4 billion, ‘growth’ might not have been the first reaction of many industry watchers.

“We are growing,” Read said. “This is not capex to create growth, it’s capex to accelerate that growth profile.”

Despite his best efforts to highlight Vodafone’s “resilient” performance in a Covid-hit 2021 financial year, shares dropped by 7% on Tuesday morning. As the financial analysts on the results call pointed out, the group’s free cash flow came in behind consensus at €5 billion – excluding spectrum, restructuring and integration costs – last year, although for Vodafone that was in line with expectations.

A dividend of 9 cents per share was also part of the plan, although the telco reiterated its ongoing message on improving shareholder returns.

“We are firmly focused on continuing to delever without our targeted range, primarily as a function of growth,” Read said. “This growth strategy ultimately translates to driving shareholder returns.”

Repeating the word “growth” was not enough to allay the market’s wobbles on the capex increase, lower free cash flow and so forth, but the coming quarters will show whether that growth really is taking place and whether it does drive the telco’s dividend policy.

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Castlevania
1 hour ago, DoINeedOne said:

Net zero: IEA calls for an immediate halt to new oil and gas developments

Paris-based organisation says an immediate halt to fossil fuel development is needed if global temperature rises are to be limited to 1.5 degrees

https://www.upstreamonline.com/energy-transition/net-zero-iea-calls-for-an-immediate-halt-to-new-oil-and-gas-developments/2-1-1011584

 

This chap on Twitter (he used to be a macroeconomist on Wall Street) is worth following. 

 

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Bobthebuilder
53 minutes ago, Don Coglione said:

Blokey also reckoned that hydrogen was not the answer, as it could not be transported long distances - any knowledge on that?

Yeah. They will stick it in the gas pipe network, no need to transport anywhere.

I, like many other heating engineers this morning, had a good laugh at this "no gas" by 2025 and took another bite of me bacon and egg sarnie. The sums just don't add up without gas. The smallest combi boiler you can buy is 24 kilowatts, that's 104 amps, we are going to need a nuclear reactor in every town in 3 years time to achieve that plus rebuild the entire countries electric net work and re plumb everybody's house.

I will be using a unicorn to travel to work on by then.

 

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2 hours ago, JMD said:

Hmm... Not really what you were getting at Harley, but Kaplan in his latest newsletter discloses, as per usual, his investment allocations (generous thing to do i think; and notice he also shorts Tesla) - but anyway I thought i'd use the link he provides to watch Kaplan's new short 'comedy play' - as i thought it might give me insights into the man's investment psyche(?!)... unfortunately, i can report back to the thread that it did not help one jot. (not sure what i was expecting, but the play itself was ghastly btw).

True Contrarian: “Don't panic. The time to sell is before the crash, not after.” --John Templeton (truecontrarian-sjk.blogspot.com)

 

I was a bit slow this morning.  I later saw he used options on the ETFs.  But I still wonder if he had hedged his positions just in case. 

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1 hour ago, Cattle Prod said:

Well put. The problem is that the shale business is largely unprofitable, it should only have been drilled at much higher prices as it's crap rock. If producing oil from a regular reservoir is like squeezing water from a sponge, producing from a shale reservoir is like squeezing water from a ... rope. Taking money out means cratering production which means higher prices, as it should be.

The eagle eyed among you will notice that the production peaks across the US basins in my previous post (with the exception of the Permian) occurred in 2019. This is not a covid issue, it's a structural supply issue. And that was when they had plenty of money to keep drilling wells, and had 750 rigs drilling, rather than 350 today. The Permian is the biggest, and I don't when that'll peak, but as I say it's currently just offseting declines across the other basins. And that's with drawing down c. half of the likely useful DUC inventory over the last 9 months. Well done, guys. I'm sure no one will notice :ph34r:

This is perhaps very detailed for considering the macro problem of world oil production, but US shale has been the only supply growth in the last ten years. I think I said in one of my first posts on here that world oil supply growth currently depends on two states in the US. Now it's probably a few counties within those states.

CP, i'm sure you have written about it before, but can i ask is gas fracking here on the UK mainland also a similarly uneconomic activity? Just wondering if say gas was maybe easier/cheaper to extract than the denser oil? Or is the whole 'fracking' industry (i said fracking!) just based on (business) hype and (nefarious) cheap refinancing? 

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