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

[Castlevania]

On 10/07/2021 at 10:51, arrow said:

Yes, sort of. Shell is selling its share of the refinery to Liwathon which was (is?) owned by Barclay Rowland (private equity snapping up bargains again?). The other shares are owned by Eni and Rosneft (Gazprom indirectly) which have both been mentioned before on this thread. Eni and Rosneft/gazprom are not selling their shares. Perhaps not as much green pressure?

I thought Rosneft and Gazprom were separate? BP own a stake in Rosneft.

[Castlevania]

21 hours ago, Heart's Ease said:

 

 

We will continue to offer one of the most appealing shareholder remunerations among Ibex-listed companies. In 2021, the dividend will be around €0.60/share (cash dividend in July after the scrip dividend paid out in January. This amount will increase gradually over the course of the Strategic Plan until it reaches €0.75/share. In 2025, shareholder remuneration will be at least €1/share, including cash payment and share buybacks to be made from 2022 onwards.

Just a snippet from the Repsol website (had a nice dividend on Friday that I wasn't expecting!).

If paid in cash I assume withholding tax was applied?

[Castlevania]

19 hours ago, Animal Spirits said:

Nvidia has gone on an absolute rip hasn't it, PE is now almost 95.

On a long term chart you can see where that outpeformance has concentrated compared with equal index weighting:

However, in the one year chart the equal weighting index has outperformed the market cap weighted index:

It’s because everyone wants to mine Bitcoin 

[reformed nice guy]

24 minutes ago, Castlevania said:

It’s because everyone wants to mine Bitcoin 

AI/machine learning too

Private companies (Google, Baidu etc) but also universities are buying up cards as they are used for algorithm development

[arrow]

2 hours ago, Castlevania said:

I thought Rosneft and Gazprom were separate? BP own a stake in Rosneft.

Yes my mistake. Been trying to correct this through kiwi and Firefox but kept on hanging on saving. Possibly the blockers I'm using. Was thinking of gazprom NEFT at the time. Nominally rosneft gazprom both separate companies but both controlled by Russian gov

[dnb24]

Adam Mancini seeing a dip on the S&p at 4390-4410 and then if that holds he sees nothing pulling back until 4700. Adams a day trader but his chart calls are aupporting David Hunters macro view.

 

[Harley]

3 hours ago, arrow said:

Been trying to correct this through kiwi and Firefox but kept on hanging on saving.

I have the same issue.  Sometimes ok, other times not.  Might be the browser.

PS:  Yep, possible as I've just saved this with FF Focus which has more success than Duckduckgo.

[Harley]

One for those interested in behavioural economics type things.  I'm not sure if the following complements the subject or replaces it.

I've just listened to a paid for podcast with Ben Hunt of the Epsilon Theory.  The second one I've heard and he's on to something which he is now applying in a practical sense.  It's the idea of how narratives form and have a life and how they influence us.  Everywhere but especially in politics and (his focus) finance.

https://www.epsilontheory.com/epsilon-theory-manifesto/

"I believe that we are witnessing a structural change in markets, brought on by a witches’ brew of global debt crisis, new technology, and new regulatory regimes. By structural change I mean a fundamental shift in the market’s relationship to society and politics, as well as a sea change in the behavioral preferences of market participants. Modern portfolio theory takes both of these terms – market rules and market participant preferences – as constants, and as a result it is impossible to see the impact of structural change by looking solely through the lens of alpha and beta factor analysis. We need another lens".

His podcast interview was more about narratives and using IT to track and trace them with a view to getting an early entry into trends (trend following).  I didn't get that from a cursory read if the website but there's a lot of material there.

I liked his comment in the interview that the longer they (Wall Street) can get you to look at something, the more likely you are to buy something!

[Loki]

9 minutes ago, Harley said:

"I believe that we are witnessing a structural change in markets, brought on by a witches’ brew of global debt crisis, new technology, and new regulatory regimes. By structural change I mean a fundamental shift in the market’s relationship to society and politics, as well as a sea change in the behavioral preferences of market participants. Modern portfolio theory takes both of these terms – market rules and market participant preferences – as constants, and as a result it is impossible to see the impact of structural change by looking solely through the lens of alpha and beta factor analysis. We need another lens".

Seems like a lot of words for "You'll own nothing, eat bugs and be happy because St. Greta of Neucarbonia says the sky is angry and must be appeased" 

[Harley]

1 hour ago, Loki said:

Seems like a lot of words for "You'll own nothing, eat bugs and be happy because St. Greta of Neucarbonia says the sky is angry and must be appeased" 

I wasn't expecting that.  Did you read that sort of thing on the website?  The interview certainly didn't suggest that, more the opposite (ie. free market, how to benefit from these changes).

[Loki]

4 minutes ago, Harley said:

I wasn't expecting that.  Did you read thst sort if thing on the website?  The interview certainly didn't suggest that, more the opposite (ie. free market).

No just a bit of banter mate

[leonardratso]

i notice my spam folder is starting to fill up again,mainly get rich quick shite and scams, just an anecdote really, but i did notice in the past that it went a bit wild when things were running hot economically, a  sort of modern day shoe shine boy equivalent.

[sleepwello'nights]

18 minutes ago, leonardratso said:

i notice my spam folder is starting to fill up again,mainly get rich quick shite and scams, just an anecdote really, but i did notice in the past that it went a bit wild when things were running hot economically, a  sort of modern day shoe shine boy equivalent.

There are also webuyyourgold.com sparking back into existence and Santander have started spamming me with stock market investments. 

[ThoughtCriminal]

Government revenue from north sea oil has plummeted.

 

Interesting effect of green obsession? Diminishing return from old fields? Or bit of both. 

[reformed nice guy]

8 minutes ago, ThoughtCriminal said:

Government revenue from north sea oil has plummeted.

 

Interesting effect of green obsession? Diminishing return from old fields? Or bit of both. 

Is there a more up to date one? Thats only 2016

[ThoughtCriminal]

8 minutes ago, reformed nice guy said:

Is there a more up to date one? Thats only 2016

Even more horrendous

[M S E Refugee]

This was posted on the Coronavirus Forum by @Transistor Man.

PHE has similar data for England, it looks like the Jabs are useless and possibly dangerous.

Could this be the Big Kahuna trigger?

[sancho panza]

On 09/07/2021 at 09:16, Boon said:

Suspect some of the price points will be psychological, think that is why shrinkflation is chosen as opposed to simply charging more for the same item. A lot of products I think have some big ties to a price. For instance a 4-pack of chocolate bars in the supermarket has been £1 for as long as I can remember, obviously the size has changed in that time.

I'd love to get my hands on some old receipts as I'm sure some things have not changed in price and have not been shrunk. Pasta, milk, lettuces for instance.

As for eating out I have been thinking they are in for a rude awakening at some point as people see the markups. Haven't been to Harvester for years but used to go regular for their early bird deals, but the prices seem shocking considering this is not a top-range place. The mains are mostly £13-16 now, by the time you had a drink you're dropping £20+ for 1 person.

It's not jsut shrinkfaltion tho Barnsey.Ingerdient disinflation is another issueMrs P is a food scientist,lots of products get re engineered ith more cost effective ingredients.

On 09/07/2021 at 11:39, Cattle Prod said:

This chart explains all you need to know about WTI pricing. It converts oil inventory into days supply, which is a much better metric. You'll hear 5 year averages discussed, or the inventory levels in the 2009-2014 period, but these are not corrected for what consumption was back then. Days supply incorporates that. It's effectively a 'twitchiness' measument: because supply is inelastic, price gets bid up when days supply drops. 

There are too many years on here, but you can see clearly that periods of high prices like 2006 to 2014 are around 20 days supply, and we are currently at 28 days. Price is front running inventory levels to some extent. I think it's pricing the trajectory of this drop: you can see it's already cut through 2016 and 2017. It's dropped about 5 or 6 days since May. If the trend continues, we'll be back to the low 20s by the end of summer, and we haven't been there since the days of $100 oil. That said, I think the dollar will have to drop for this trend to continue, to keep oil consumption high outside of the USA, and stop imports flooding in. WTI is priced off US inventories. I suggested a while back that WTI would close the gap to Brent or even exceed it, and that is happening now. That will attract imports. Unless other countries buy it first!

Dyodd

ABsolutely fascianting chart.Really speaks a 1000 words.Given what you've explained about the supply problems that are looming,this trend towrds 20 days looks baked in for some time yet,given CB's are reflating heavily at the same time as the marginal supply of US shale is crimping.I've wodnered if you have an insight into where US shale is on it's trip to it's bottom in terms of priduction.

Iirc you were predicting 3mn plus bpd dropping off US production by around now.Prices have obviously recovered some but then a lot of US shalers haven't enjoyed the full price upflift due to hedging losses.Wull that deprive the treadmill of the capital it needs to get production moving as prices stay above $70 WTI?

WIll a weaker dollar hamper the efforts of US shale to reinvigourate produtcion?

On 09/07/2021 at 23:12, Transistor Man said:

Tech/ Semiconductors - on this, Mr Hunter has been bang-on for the past 15 months. I can’t believe the parabolic ramp of, Nvidia.

I think wathcing the semicon ETF SOXX/SMH for some monthly weakness along with teh FAANG stocks won't do you any harm in this crash

On 10/07/2021 at 10:23, DurhamBorn said:

https://wolfstreet.com/2021/07/09/container-freight-rates-hit-new-extremes-up-6x-asia-to-us-europe-peak-shipping-season-still-ahead/

I sometimes forget,but i had a very successful one man band import business that i ran down and closed to get all the capital out because my roadmap showed that model was about to be destroyed.Most of the capital from that ended up in the goldies and silvers etc.

I was paying around £2000 for a 40 foot high cube container to ship,sometimes a little more.There is also VAT on the cost,so any increase in the cost sees an even bigger increase from extra tax.Thats before shipping from the port of course,you have trunking costs on top.

I used to get 550 firepits on a container so the port to port cost was about £4 a unit.Today it would be £24 a unit.

I used to land each unit and onto a pallet for an all in cost of between £35 to £38 and sell for £79

Here is one i used to sell now

https://www.amazon.co.uk/INMOZATA-Garden-Outdoor-Brazier-Firepit/dp/B07MP399R9/ref=sr_1_62?dchild=1&keywords=firepit&qid=1625908493&sr=8-62

£130

I can tell you that you can now manufacture almost all goods that are that size and over in the UK for cheaper than shipping from China.In some cases a lot cheaper,for insance shipping a washing machine will now be around £80 a unit,just the port to port.

Supply chains built on destroying ordinary peoples jobs have just walked direct into a reflation cycle wall.They are fucked.

The survivors need to pull back production quickly in bulky items and out survive their competitors and they need workers,but workers arent interested,

Thats why my phone rings every day offering job after job after job,and these are massive blue chip companies.Lower down the pecking orders the job sites are rammed with production operator jobs that they cant fill.The wages arent enough compared to retiring or welfare.

As i turn every job down i tell them the wages are far too low given the inflation in the economy (even the ones that would be considered very high wages for the NE) and i think to myself maybe you should of come to this thread in 16 and offered us 10x those wages,but not for engineering,for macro strategy.

I should add,the reason we are in the sectors we are is because they arent affected much by the above in a negative way,but they can bump up the prices with the inflation.BAT for instance gets millions of fags on a container and the shipping unit cost is tiny.

 

Fascianting insight DB,when you tell it like that in ways a laymen can understand ,it really spells out how powerfull the forces of inflation are.

WHilst a lot of banking big wigs have been saying it's transitory,I supect they may get a surpriese

 

[ThoughtCriminal]

26 minutes ago, M S E Refugee said:

This was posted on the Coronavirus Forum by @Transistor Man.

PHE has similar data for England, it looks like the Jabs are useless and possibly dangerous.

Could this be the Big Kahuna trigger?

Yeah, theres a lot of worrying data coming through now. 

 

26 countries went from having little to no deaths to seeing huge spikes after having the vaccination

[sancho panza]

On 10/07/2021 at 11:13, JMD said:

I agree. Plus India (or 'project delta'?!) didn't have a lockdown. And yet, like a modern fairy tale, the virus withered away. I know that people died and their tragic stories were important to see... But the rampant propaganda coverage the so called BBC put out daily about India during May still makes my blood boil. 

https://www.spectator.co.uk/article/lockdown-didn-t-save-lives-from-cancer

Everyone understood the government message in March 2020 to stay at home, protect the NHS and save lives. Yet the lives that we knew were being saved were ones from Covid-19. Anything more long-term than daily figures never registered. The concept of other causes of death – most devastatingly cancer – were secondary concerns. We may be about to see the consequences of this Covid solipsism.

The recent cross-party parliamentary report “Catch Up With Cancer – The Way Forward” showed that UK lockdowns had resulted in a staggering drop in cancer treatment. There were 350,000 fewer urgent cancer referrals in 2020, and 40,000 fewer cancer diagnoses, compared to 2019. These delays to diagnosis will lead to worse cancer survival rates, which were already mediocre compared to many Western countries.

Politicians, and plenty of scientists, like to talk as if there was only ever one option. But there was an alternative. In Sweden, where lockdown was less strict than the UK, there is evidence that patients with prostate cancer had their treatment protected during the first wave. While the number of new prostate cancer cases decreased by 36%, the number of patients treated by radical prostatectomies only fell by 3% compared to previous years and the number of patients having radical prostate radiotherapy actually increased by 32%. So how does the UK measure up against this?

 

 

 

The first wave saw a 43% reduction in patients undergoing prostatectomies for prostate cancer in the UK, a significant contrast to the 3% decrease in Sweden. These are devastating statistics. It is well recognised that delays in cancer treatment often lead lead to poorer prognoses. Any future assessment of the UK’s lockdown approach must include the devastating impact that lockdown has had cancer patients.

 

 

This backlog will take a long time to clear. There are more than 5 million people waiting to start NHS treatment. The divide between those who can and can’t afford private healthcare has seldom been starker. There are signs that more people are going private. By October 2020, London’s private hospitals reported a doubling in the number of patients prepared to pay for their own surgical procedures. Private insurers expected to see a long-term increase in demand as the NHS takes time to become fully operational again.

In the last 20 years, much effort and funding has improved cancer waiting times. UK cancer survival rates have improved, but at a reduced rate to many European countries. We had made substantial improvements in screening, diagnosis and treatment. But many of the gains achieved over years have been reversed in months. 

There will also be increased pressure from patients and charities to tackle a growing divide between NHS and private healthcare in the coming years. That gulf has been accelerated by the government’s decision to allow the treatment of patients with serious and urgent conditions other than Covid to be curtailed during the first and subsequent lockdowns. 

Covid-19 is not the only killer. Cancer continues to kill around 166,000 people annually in “normal years" – one shudders at the thought of the preventable deaths that will have been caused by lockdowns. Policymakers may like to tell the nation and themselves that there was no alternative, but there was. Cancer healthcare should never have been stopped. The data from Sweden shows that these patients could and should have been protected.

Professor Gordon Wishart is Chief Medical Officer at Check4Cancer and Visiting Professor of Cancer Surgery at Anglia Ruskin University.

[sancho panza]

1 hour ago, M S E Refugee said:

This was posted on the Coronavirus Forum by @Transistor Man.

PHE has similar data for England, it looks like the Jabs are useless and possibly dangerous.

Could this be the Big Kahuna trigger?

A couple of the vaccine sceptics at work were telling me that a large proportion of recent cases had been vaccinated.nice to see it in black & white and thank s  @Transistor Man

[sancho panza]

latest Acadata series.Markets are moving at hte margins-I'd love to see the volume data nationwide.

backs up what ive been seeing on my travels.

terraces suffer next or the top of the market

http://www.acadata.co.uk/assets/uploads/2021/07/e.surv-House-Price-Index-England-and-Wales-June-2021.pdf

worth noting in LE2 that detached outsold flats even thought they probably are outnumbered 10 to 1

[reformed nice guy]

1 hour ago, ThoughtCriminal said:

Even more horrendous

Holy moly, that probably doesnt even cover our ADHD kids bennies bill

[sancho panza]

1 hour ago, ThoughtCriminal said:

Yeah, theres a lot of worrying data coming through now. 

 

26 countries went from havingworyin little to no deaths to seeing huge spikes after having the vaccination

these are cases not deaths.needs to be borne in mind.

[ThoughtCriminal]

1 hour ago, sancho panza said:

these are cases not deaths.needs to be borne in mind.

The spikes were immediately after the vaccinations. 

 

Also the numbers of double vaccinated dying/seriously ill are peculiar in some countries. 

 

Lot of noise to be sifted through. Thats the story of this entire hysteria induced phenomenon.