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

[nirvana]

Just now, ThoughtCriminal said:

Almost halved in a month. 

 

[Loki]

Just now, ThoughtCriminal said:

Almost halved in a month. 

The halvening, it's bullish apparently

[JMD]

1 hour ago, DoINeedOne said:

I do like Australians 

 

I want that Aussie anchoring GBNews, perhaps the late-nignt/uncut version!! (anyone know when the channel is starting?).

[nirvana]

21 minutes ago, Loki said:

The halvening, it's bullish apparently

very good! the best money is made when you BTFD...then you scale in till your bollocks are about to explode 

scaling into a trade means that you enter with just a fraction of the intended amount that you wish to trade and then add to the position as the trade develops. scaling out means that you exit fractions of your position to lock in profit and leave in positions to take advantage of any further price runs

Actually I like to go 'full bollocks' at the dip then realise I've 'done my arse' as some folks say 

[Castlevania]

3 hours ago, ThoughtCriminal said:

So they're doing no exploration. At all? 

 

Not even outsourced it?

 

That seems like utter madness to my laymans brain. 

 

Do you think there's any chance that we see an oil shortage in a few years time that instead of being "Well this is a great way to make money" turns into "Well this is fucking catastrophic"?? 

Rosneft still are and BP have a 20% stake

[Starsend]

16 hours ago, Cattle Prod said:

Guys be careful with this stuff it will never go back to 2008 price because it decays. That's why it was 10 the last time we had $65 but 6 now. Designed for short term holds.

Can you elaborate a bit on this cp? So this product doesn't simply track the price of oil then?

I hold a couple of other ETFs from Wisdom Tree, copper, coffee etc. Do they not track the underlying asset properly either do you know?

Thanks for any light you can shed on the matter. Long term hold for me so if there's issues with these products better to find out sooner rather than later.

 

[nirvana]

options and derivatives decay....tis a bit complicated, you need to learn about 'the greeks' too

https://www.investopedia.com/terms/t/timedecay.asp

edit: don't forget what buffet said about derivatives, as a 'sole trader' I'd say yeah get into options by all means, derivatives, you're more of a fookin loony than me! 

“Derivatives,” Buffet wrote, “are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.” When Buffett wrote those words, the total value of all derivatives in existence was $142 trillion. ... Ten years on from the financial crisis, they are more popular than ever

[ThoughtCriminal]

1 hour ago, Castlevania said:

Rosneft still are and BP have a 20% stake

God bless mother Russia. 

 

Maybe taking a large position in them and the likes of Gazprom is the way to go. 

 

 

[DurhamBorn]

4 hours ago, Cattle Prod said:

Thanks DB. So do you think this means they are more or less likely to taper asset purchases? If the market is flooded with cash, but they not have to buy even more bonds to give to banks?! And that runs against your comment of fed having to taper soon because of inflation.

I suppose this is the definition of boxed in, just which way will they break...

The question is why,because this is where the Fed could make a massive policy mistake.If the banks are cashing in cash for treasuries,it is because they cant lend the money,or see a return in anything.HOWEVER,its not as simple as the MSM will say,oh too much cash.It could be entities wanting the cash dont have the collateral to get their hands on it.So it could be the economy needs the liquidity,BUT there arent enough solvent players to lend it too.The MSM can see this as too much liquidity,but it could be too much for the amount of solvent debtors.

This means the Fed needs to be very careful here.The market is saying we cant lend the cash,thats certain,so its cant lend to solvent not cant lend at all.This doesnt mean the economy doesnt need it,you could argue it shows the economy needs even more.Its also saying the route to market at this stage is fiscal through government.If the banks are using cash for treasuries,then the government needs to keep issuing them and spending into the economy.

Id expect the Fed to try to force people out of the short end here and push them along the curve,but they will do this by lowering the short end right down and lower the longer end much less.They need to signal that the curve says steady growth,that will encourage solvent entities to invest.

I also think they need the consumer to start taking on loans here,there might be some loan guarantees incoming from government soon,both on consumer loans for certain buys,and also for investment for companies.

The irony is the macro here says the banks are going to be big winners as the Fed tries to keep this liquidity in the system.I wont buy myself because of the risk of  BK,but outside of that the big US banks are likely to see earnings explode higher.

[ThoughtCriminal]

23 minutes ago, Cattle Prod said:

I have most of mine in the Guinness Global enegry fund, I put the holdings up here before, gives you a nice spread and pretty much covers everything.

Cheers CP, I'll definitely give that a gander then! 👍

 

I like the cut of their jib. 

 

Their reasoning regarding oil demand and supply and the reality of green energy reads like someone on here wrote it. 

 

Your Surname isn't Guinness is it CP? 🤔

 

 

[Castlevania]

1 hour ago, Starsend said:

Can you elaborate a bit on this cp? So this product doesn't simply track the price of oil then?

I hold a couple of other ETFs from Wisdom Tree, copper, coffee etc. Do they not track the underlying asset properly either do you know?

Thanks for any light you can shed on the matter. Long term hold for me so if there's issues with these products better to find out sooner rather than later.

 

As far as I’m aware none of the oil ETF’s hold the underlying commodity. The problem is one of storage. Instead they buy futures, but that isn’t the same as spot. Generally speaking (in normal circumstances but not always) the future price is higher than spot. So, you pay a premium over spot for the future and as time goes by you bleed theta. So only really worthwhile as a short term speculative vehicle.

[nirvana]

20 minutes ago, DurhamBorn said:

I also think they need the consumer to start taking on loans here

that is really blooming dangerous man! the loons are already bombed out with loons......I don't agree with this 'more drugs' analogy.....we can nay handle it captain 

[Loki]

23 minutes ago, DurhamBorn said:

The question is why,because this is where the Fed could make a massive policy mistake.If the banks are cashing in cash for treasuries,it is because they cant lend the money,or see a return in anything.HOWEVER,its not as simple as the MSM will say,oh too much cash.It could be entities wanting the cash dont have the collateral to get their hands on it.So it could be the economy needs the liquidity,BUT there arent enough solvent players to lend it too.The MSM can see this as too much liquidity,but it could be too much for the amount of solvent debtors.

This means the Fed needs to be very careful here.The market is saying we cant lend the cash,thats certain,so its cant lend to solvent not cant lend at all.This doesnt mean the economy doesnt need it,you could argue it shows the economy needs even more.Its also saying the route to market at this stage is fiscal through government.If the banks are using cash for treasuries,then the government needs to keep issuing them and spending into the economy.

Id expect the Fed to try to force people out of the short end here and push them along the curve,but they will do this by lowering the short end right down and lower the longer end much less.They need to signal that the curve says steady growth,that will encourage solvent entities to invest.

I also think they need the consumer to start taking on loans here,there might be some loan guarantees incoming from government soon,both on consumer loans for certain buys,and also for investment for companies.

The irony is the macro here says the banks are going to be big winners as the Fed tries to keep this liquidity in the system.I wont buy myself because of the risk of  BK,but outside of that the big US banks are likely to see earnings explode higher.

Absolute gold 

[nirvana]

11 minutes ago, Castlevania said:

you bleed theta

do you guys use telegram?

I've found a bot that converts tgs to gif 

 

 

[DurhamBorn]

3 hours ago, Agent ZigZag said:

If I have read this correctly you intend to liquidate all of your Shell holdings? Is it because of the poor yield it returns. I was pondering this question a while back. Whilst growth is very nice I am more concerned in developing a portfolio that gives me a healthy yield. I get more divi returns from say BAT in which I hold less capital when measured against my Shell holding.

I just think the structure with BP Repsol and ENI is better.I worry Shell is most exposed to EU woke nutters.Still think it will provide a nice return,but il sell it first out of my oilies.Others il hold for the whole cycle probably.

[Harley]

13 minutes ago, nirvana said:

do you guys use telegram?

I've found a bot that converts tgs to gif 

 

 

Phew, nano seconds away from the "Ignore" button!  Psst, got any macro on yer?

[Harley]

16 minutes ago, Castlevania said:

As far as I’m aware none of the oil ETF’s hold the underlying commodity.......

Only some silver, gold and maybe platinum/palladium ones hold physical.  Storage and rebalancing for flows.  Even many of the stock ones are derivative based and/or based on representative sampling.

[nirvana]

4 minutes ago, Harley said:

Phew, nano seconds away from the "Ignore" button.  Got any macro on yer?

yeah good point, just trying to work out what the FED are trying to do, that's the only macro in town that matters, the rest of em are just gazing at crystal balls 

soz, killing time waiting for some 'aliens' to get in touch 

Go on then, when are the FED gonna taper???

[Harley]

Watching paint dry is this.  Thank god for crypto giving me some vol.  Everything is a sea of green except some of those those legacy FTSE stocks I would avoid this time round, bond funds and, marginally, a certain Brazilian telco().

Working through the markets now, as I do each week.  88 US stocks passing a very basic fundamental screen.   10 are OTC, secondary listings, etc.  I hold 8.  13 have poor detailed fundamentals. 4 have good detailed fundamentals but poor price action.  And the rest are below my £1B minimum cap value (I shall flex that to look).  Of the 8 I hold,  I may top up 3 at a price higher than my original stake, and the rest are too pricey atm

Only 30 or so exchanges to go, plus the commodities, etc!  Hoping AsiaPac continues to prove more interesting.  At least some vol there so maybe scope for some top ups.

PS:  Pretty much bonds are the only thing on my radar in the oversold zone with most still grinding down.

[Harley]

31 minutes ago, nirvana said:

yeah good point, just trying to work out what the FED are trying to do, that's the only macro in town that matters, the rest of em are just gazing at crystal balls 

soz, killing time waiting for some 'aliens' to get in touch 

Go on then, when are the FED gonna taper???

I don't give an eff about that headfake.  I just trade the data.  The Fed and co just provide the chaff (cheap talk) while I seek out the stealth bull runs.  Yep, killing time atm.

[Harley]

17 minutes ago, Cattle Prod said:

No I wish, they're all loaded! These are the holdings from a few months ago. But there are good names in there we don't often discuss, like the Canadians Suncor and Imperial Oil. Very good csh rich businesses. It has Enbridge for a bit of midstream, Gazprom and Reposl for gas, and all the supermajors.

Now now, don't start blabbering away!

[ThoughtCriminal]

22 minutes ago, Cattle Prod said:

 

No I wish, they're all loaded! These are the holdings from a few months ago. But there are good names in there we don't often discuss, like the Canadians Suncor and Imperial Oil. Very good csh rich businesses. It has Enbridge for a bit of midstream, Gazprom and Reposl for gas, and all the supermajors. This is a large % of my SIPP, buy and long term hold. I have options in XLE and CL futures contracts to amuse myself in the meantime. I have a handful of small companies too in my ISA for big capital growth potential, but I decided early on to not share these ones as there is way too much share ramping going in the AIM as it is. And you can lose all your money very easily in small oil and gas.

Not advice, dyodd

That's absolutely spot on CP, exactly what I've been looking for to put the bulk of my money in then just have a bit of fun with options as I learn more about them. 

 

I'll do my own research before I pull the trigger, natch. 

 

Does it make any difference who you get your SIPP with? Or all much the same? 

[sancho panza]

17 hours ago, Loki said:

I bought more RDSB today FWIW

dated from the mar high.RDSB underperfomrance from March to now in this piccie

17 hours ago, Cattle Prod said:

It increased by 7.5% today, has been flat/consolidating for the last two months. It doesn't really need to increase furtger though, just stay there. With a $5 backwardation over 12 months, you are incentivised to pull oil out of inventory (oil is worth $5 more now than in a years time, plus storage costs). As the same time you can't hedge production (youd lock in prices $5 below what you're getting now, so much less commercial hedging pinning prices down).

Backwardation started 24 Nov 20 on my chart (CL1 - CLM2022).

So 12 months on that and it all looks like it's coming together for a bitter winter for those long big tech.

dyodd natch,but the oil price showing no signs of pulling back and if you're statemetns about reserves is right(and it's compelling logically)then we could be gettign a spike inbound.

I knw you were joking a few pages back about a test of the infaltion adjsuted 2008 high but I'm not seeing either a demand side drop or supply side hilke that's going to derail the bull yet.allowing for pull backs of course.

 

16 hours ago, ThoughtCriminal said:

Nice list from Lyn Alden showing which countries sold the family silverware for one more dose of crack. 

 

Spoiler alert: we're sucking off sailors at the docks 

That's a great chart.compelling reading.

[janch]

1 hour ago, DurhamBorn said:

I also think they need the consumer to start taking on loans here,there might be some loan guarantees incoming from government soon,

More "help" for house buyers perhaps.  I know you are talking about the Fed but it applies here too and if memory serves correct I think we already had gvt underwriting mortgages announced a month or so back.

Just found it: www.gov.uk/government/publications/the-mortgage-guarantee-scheme

I wonder what else they could "help" us with?  Electric cars?  It would help me if they could give me some more dosh to invest with.   I suppose some have already had that too if they were furloughed or got the business loans guarantees.

[Castlevania]

1 hour ago, DurhamBorn said:

I just think the structure with BP Repsol and ENI is better.I worry Shell is most exposed to EU woke nutters.Still think it will provide a nice return,but il sell it first out of my oilies.Others il hold for the whole cycle probably.

Agreed on Shell. I don’t really understand their strategy.