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

[sancho panza]

From Mar 19

I've copied the whole piece but highlights in bold are mine.Brokers are monitored by FCA for solvency.We used to be with Man Group 15 or so years ago and they were very...ahem...cavalier.....Long since stopped.

@Ponty Mython @Talking Monkey

https://www.investorschronicle.co.uk/managing-your-money/2019/11/07/what-to-do-when-your-broker-goes-bust/

What to do when your broker goes bust

'Broker failures are rare, but happen at a rate of one or two each year. In October, discretionary fund management group Reyker Securities was placed in ‘special administration’ after it fell into financial difficulties. And there have been a number of other notable casualties in recent years: SVS, Beaufort Securities, Fyshe Horton Finney and Pritchard – enough, potentially, to trouble those holding investments with brokerage groups.

Those with assets tied up in a failed broker face a tense few months without access to their assets while administrators disentangle their portfolios. Broker failures often come out of the blue and investors will often only become aware of the problem after their assets have been frozen.

For clients, the biggest question is whether they will get their money back. Certainly, there are plenty of protections in place. Danny Cox, chartered financial planner at Hargreaves Lansdown, says that all assets held with a broker or platform have to be held within a nominee account: “All client money and assets held with a nominee service is held on trust and is segregated from the platform’s own funds in accordance with the Financial Conduct Authority’s (FCA) client money rules and guidance. Therefore, no creditors have a legal right to client money or assets and these cannot be used to cover any of the stockbroker's or platform’s obligations.”

So far, so good. The client’s only risk appears to be that their capital is tied up in an administration process for a period of time. Richard Stone, chief executive of the Share Centre, says: “At any broker, provided those customer assets are properly segregated and reconciled, then even if the firm goes bust those assets should still be there for the clients. It may take a little while for them to get access to those assets as any insolvency practitioner works through the process, but they should get them back.”

However, there is a wrinkle in the system. Mr Cox says: “If the administrator can’t recover fees from company assets, it’s legally allowed to do so from client assets instead.” In theory, the administrators can use client assets to pay their fees. Administration is a costly process with each stage of the process needing to be approved by the courts. Previous broker administrations have seen bills run into tens of millions, which can come out of investors' pension pots.

This is controversial. In the case of Beaufort Securities, investors were angered when they found that the administrator’s costs (in this case PwC) – estimated to be around £100m – would be paid for with their supposedly ring-fenced savings. Lord Lee of Trafford became involved, tabling a number of questions in the House of Lords about the practice. Costs were ultimately revised lower and capped at £10,000 per person.

There are a number of ways this isn’t quite as bad as it seems. Brokers have capital requirements placed on them by the regulator. These are designed to cover administration costs if they stop trading. Hargreaves Lansdown, for example, has net cash of £394m according to its last set of accounts.

It is possible that the capital held by the broker isn’t sufficient to cover the costs of administration. The Financial Conduct Authority is monitoring capital held by brokers all the time, but in cases of fraud and financial malpractice clients’ assets could be put at risk once again. However, should this happen, investors will be able to claim under the Financial Services Compensation Scheme (FSCS), which can pay up to £85,000 to each investor.

The system therefore offers three layers of protection: one, the client’s assets are held separately; two, the broker holds enough capital to cover its administration costs; and three, the FSCS will step in to pay the difference.

But is it still possible to lose money? FSCS compensation applies where individuals have contracted directly with the broker. The broker will need to be UK-authorised and covered by the scheme, which should be clear from its literature. It gets more complex if the client has the relationship through an intermediary, such as a self-invested personal pension (Sipp) provider. The FSCS may well be able to ‘look through’, but it will depend on the circumstances of the individual case.

Equally, the FSCS should be triggered automatically, and investors should be told how to apply. Alex Kuczynski, chief corporate affairs officer at FSCS, says: “FSCS protection is triggered by the insolvency of the firm, such as the special administration regime – which the recent broker failures have been. FSCS protection is automatic and need not wait for any payout from the firm.” That said, the FSCS does have to identify and quantify the shortfall – that will depend on the administrator reconciling the accounts to check the cash and assets are there and can take time.

There is no formal time frame for returning money to investors. Mr Kuczynski says: “Each case will be different due to the variety of reasons for which firms fail. A firm with properly segregated assets and good records is likely to be quicker than a firm where there has been a fraud or some other poor behaviour. The quality and availability of the failed firm’s systems and key people are also likely to have a significant impact. As an example, Beaufort failed in March 2018 and the first transfer took place at the end of September 2018.”

Mr Kuczynski is clear that there shouldn’t be a situation where an individual client dealing with a UK-authorised financial services broker has uncompensated losses for a broker failure. The only circumstances in which it might happen is when a client has a very large portfolio and their allocation of the administration costs – which are charged as a percentage of the fund held – exceeds the £85,000 limit.

It is important to note that this hasn’t happened with recent broker failures and is only likely to happen in very specific cases where the administration is lengthy and expensive. The process will cost more where assets are invested in ‘exotic’ investments – individual smaller company shares, shares in emerging markets – rather than, say, collective funds. Equally, it will cost more if record-keeping has been poor. Administrators charge by the hour, so the longer and more complex the process, the more it will cost and the greater the risk of loss to investors.

Another potential route to losses is that the FSCS won’t compensate for investment losses except when clients have been victims of mis-selling (such as assets being put in high-risk illiquid areas when clients had requested a low-risk portfolio). In all other cases, while their assets are tied up in administration, the stock market could slide and they wouldn’t be able to take action. Of course, the opposite could happen as well, but investors lose agency over their assets. This can be a particular problem with smaller companies or other illiquid investments. In Beaufort’s case, there was also a problem with the valuation of some of the assets, so some investors saw apparent losses from a revaluation.

Most investors would rather avoid bad brokers altogether. It goes without saying that investors should ensure that a broker is regulated by the FCA, covered by the FSCS and operates through nominee accounts. However, this applies in the majority of broker failures, so is not protective in itself.

Beyond that, it is not easy to generalise about the reasons for broker failure: in Beaufort’s case it fell under investigation by the US Department of Justice, prompting the FCA to declare it insolvent. The US agency accused six individuals of “deceit and manipulative stock trading” and then laundering the fraudulent proceeds through offshore bank accounts and the art world. For SVS, the regulator found it had “questionable commission arrangements” and had promoted high-risk bonds to retail investors. In the case of Reyker and Fyshe Horton Finney, financial difficulties led to the closure.

That said, Richard Stone believes there are certain factors that should flash red for investors: “One of the key issues that has led to failures is where companies' business models result in potential conflicts, in particular where firms act as both agent and principal – trading on behalf of clients and trading on their own account. Personal investors should be wary of firms where this is the case and focus on those firms that only ever act as an agent for its clients. In this case, it is always therefore acting in its clients’ interests and not placing itself in a position where those interests may be conflicted with the trading interests of the firm.”

He believes personal investors should also look at the business model of the broker – is it sustainable, how does it make its money, is it profitable? In the case of Fyshe Horton Finney, the firm had been in financial difficulties for some time, with its final year of trading showing losses of £565,701. It can be easier to find this information for larger companies. Listed brokers need to publish audited accounts, which can provide greater transparency on their financial situation.

Spreading assets across multiple brokers may bring complexity and may not make a significant difference. Given that the risk is around the £85,000 compensation limit, that broker failures are rare and that no-one can know the administration costs ahead of time, it may be worth finding the right broker rather than trying to manage multiple accounts.

A final note would be that the failure of a broker often prompts a raft of scammers and claims management companies to appear offering to help investors receive compensation. Investors can end up losing twice. It is highly unlikely that a third-party claims organisation would be able to get money out of an administration process any faster and they may charge a vast fee for the attempt.

Investors can rest assured that in most cases the system works well and they should receive their money back in full in the event of broker failure. The FSCS will even pay for the assets to be transferred to a new scheme. Even so, it's worth checking a broker’s strength before investing. '

 

[sancho panza]

32 minutes ago, janch said:

In accordance with the DOSBODS tight-wad principles I'm in the habit of a daily walk to the shops (obviously no-longer daily) and to pick up a FREE Metro from the station en route.  The police were out yesterday stopping everyone going into the station to see where they were going and to see if their journey was necessary.

I was informed that posting one letter and picking up the Metro did not constitute an "essential journey".  Are we no longer allowed a daily walk?  Does everything we do have to be essential?

This is beyond heavy-handed.

I thought droning dog walkers in the countrysie was bad but it's as if they haven't got loads of serious criminals to deal with in Londinium.I suppose it's easier harassing people posting letters than dealing with organised crime gangs from Europe and of course our own home grown scum.

I'm lsoing the will to live with all the hysteria about being the statistical outlier and dying-it's one of life's certainties-and the use of the police to suppress religious and political freedoms by banning meetings of more than two people.

Sorry to be political but I was reading a rather enlighened report on how Singapore has dealth with the outbreak without shutting schools and the economy.Mainly based on aggressive testing-I mean who could have thought that might work when noone in the NHS has been routinely tested yet despite being vulnerable patient facing

https://choice.npr.org/index.html?origin=https://www.npr.org/sections/goatsandsoda/2020/03/26/821688981/how-south-korea-reigned-in-the-outbreak-without-shutting-everything-down

The Coronavirus Crisis

How South Korea Reined In The Outbreak Without Shutting Everything Down

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March 26, 20202:41 PM ET

Jason Beaubien

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Don't see the graphic above? Click here.

As of this week, South Korea had just over 9,000 confirmed coronavirus cases, which puts it among the top 10 countries for total cases.

But South Korea has another distinction: Health experts are noting that recently the nation has managed to significantly slow the number of new cases. And the country appears to have reined in the outbreak without some of the strict lockdown strategies deployed elsewhere in the world.

"We've seen examples in places like Singapore and [South] Korea, where governments haven't had to shut everything down," said Mike Ryan, head of the World Health Organization's Health Emergencies Programme. "They've been able to make tactical decisions regarding schools, tactical decisions regarding movements, and been able to move forward without some of the draconian measures."

Speaking this week to journalists, Ryan said that countries that have tested widely for the virus, isolated cases and quarantined suspected cases — in the way that South Korea and Singapore have done — have managed to suppress transmission of the virus. President Trump has also praised South Korea's handling of the health crisis and even asked President Moon Jae-in for help with medical equipment to fight the outbreak in the United States.

 

The head of the WHO, Tedros Adhanom Ghebreyesus, has called on other countries around the world to "apply the lessons learned in [South] Korea and elsewhere" in their own battles against the coronavirus.

South Korea's foreign minister, Kang Kyung-wha, speaking to the So-Called BBC last week, said the key lessons from her country are that it developed testing for the virus even before it had a significant number of cases.

"In mid-January, our health authorities quickly conferred with the research institutions here [to develop a test]," Kang said. "And then they shared that result with the pharmaceutical companies, who then produced the reagent [chemical] and the equipment needed for the testing."

So when members of a religious sect in Daegu started getting sick in February, South Korea was able to rapidly confirm that it was COVID-19.

"Testing is central" to the outbreak response, said Kang, "because that leads to early detection. It minimizes further spread." And it allows health authorities to quickly isolate and treat those found with the virus.

Hong Kong and Singapore have followed similar paths in responding to this outbreak.

They've used testing aggressively to identify cases — not only testing people who are so sick that they're hospitalized but also mild cases and even suspected cases. They've quarantined tens of thousands of people who may have been exposed to confirmed cases.

The vast majority of the people ordered to quarantine at home are perfectly healthy and never do get sick, but the few who do develop symptoms can be quickly isolated further. Tedros of the WHO refers to this as cutting off the virus at the bud — basically stopping the virus from spreading further and preventing community transmission.

Hong Kong also reacted with incredible speed in the outbreak's early days. On Dec. 31, 2019, Hong Kong's Centre for Health Protection, the city's health department, sent out an alert to its doctors telling them to be on the lookout for patients presenting with fever, acute respiratory illness, pneumonia and/or shortness of breath — and particularly patients with these symptoms who'd recently traveled to the Chinese city of Wuhan, the initial epicenter of the pandemic. Prior to this crisis, a high-speed rail line went directly from downtown Hong Kong to Wuhan (it was shut down on Jan. 30 and hasn't run since).

The other thing that South Korea, Hong Kong and Singapore have in common is that they've been able to keep most factories, shopping malls and restaurants open. Singapore has even kept its schools open at a time when nations around the world are shutting down classrooms.

Japan is another Asian country notable for its response. Although Japan has more than twice the population of South Korea and also has strong ties to China, it has recorded only a fraction of the cases that South Korea has — just over 1,000 as of Thursday. Japan hasn't been testing nearly as widely as South Korea, but it appears to have fended off significant community transmission by quickly investigating any flare-ups of cases, identifying who exactly is infected and then monitoring their contacts.

Despite the successes in Asia in containing this virus, recently several places have seen surges in imported cases from Europe. This week, after Singapore saw an uptick in cases among people who'd recently flown into the country, it announced new restrictions on travelers, blocking all short-term visitors from entering.

"Part of the reason for the tougher border measures is to ensure we keep Singapore as safe as possible," Singapore's minister of education, Ong Ye Kung, wrote this week in a Facebook post. He said the highly restrictive entry rules are "so that daily activities, like going to work, eating out and attending school, can go on."

He argued that children are safer and more productive in school and that closing schools places a significant burden on working adults, including health care workers.

"Keeping our healthcare system strong is paramount in the fight against COVID-19," he said. "Our frontline warriors will be much more assured if their children are in school, meaningfully engaged, in a safe and healthy environment."

He also pushed back against the idea that schools could be breeding grounds for the virus, saying there is little "evidence to show that the young are vectors or spreaders of the virus. The reverse appears to be the case, where the young get infected by adults at home." (Health agencies such as the Centers for Disease Control and Prevention do note that even though children may often present with milder symptoms than adults, "There is much more to be learned about how the disease impacts children.")

Another thing that links Hong Kong, Singapore and South Korea is that they've all had bad coronavirus outbreaks in the past. Hong Kong and Singapore were hit hard by SARS in 2003, and South Korea came to a standstill during a MERS outbreak in 2015.

Their experiences with these past outbreaks may have made officials more aggressive in responding to COVID-19 and possibly made residents more willing to accept intrusive measures to contain the virus.

The aggressive efforts by Hong Kong, Japan, Singapore and South Korea to investigate and isolate every possible infection is exactly what the World Health Organization has been calling for since January.

The WHO's Maria Van Kerkhove acknowledged this week that for countries dealing with hundreds and even thousands of new cases every day, "finding every case" can be difficult.

"We hear you. This is overwhelming," Van Kerkhove said on Wednesday. "But it's really important for us to take the examples of all these countries, look at what they did as it relates to the epidemiology in their country and learn from them."

[DurhamBorn]

22 minutes ago, NogintheNog said:

Oil back down to $21. Historically inflation adjusted back to late 90's price. I think there is further to go, maybe DB will be right again with his $10 call!

The funny thing with oil is that right now it has everything against it,as it does at the end of dis-inflation cycles.However the next cycle should see everything in its favour.Given this virus has now nailed on the fact the next cycle will be industrial and not consumer driven,energy use will explode.Im mostly positioned now in the area and very happy with the prices.My lower target of between $10 and $15 is still very possible,but waiting for the last $5 in an area that will increase by $280 over the next cycle isnt prudent.

Iv been looking at the political side a bit more the last few days,and i think that i have probably under estimated those affects going forward.Its highly likely the west will pull back from China,and both blocks will then enter a reflation race.Im not 100% sold on Russia backing the Chinks .They might side with the west yet.

[Don Coglione]

21 minutes ago, sancho panza said:

From Mar 19

I've copied the whole piece but highlights in bold are mine.Brokers are monitored by FCA for solvency.We used to be with Man Group 15 or so years ago and they were very...ahem...cavalier.....Long since stopped.

@Ponty Mython @Talking Monkey

https://www.investorschronicle.co.uk/managing-your-money/2019/11/07/what-to-do-when-your-broker-goes-bust/

What to do when your broker goes bust

'Broker failures are rare, but happen at a rate of one or two each year. In October, discretionary fund management group Reyker Securities was placed in ‘special administration’ after it fell into financial difficulties. And there have been a number of other notable casualties in recent years: SVS, Beaufort Securities, Fyshe Horton Finney and Pritchard – enough, potentially, to trouble those holding investments with brokerage groups.

Those with assets tied up in a failed broker face a tense few months without access to their assets while administrators disentangle their portfolios. Broker failures often come out of the blue and investors will often only become aware of the problem after their assets have been frozen.

For clients, the biggest question is whether they will get their money back. Certainly, there are plenty of protections in place. Danny Cox, chartered financial planner at Hargreaves Lansdown, says that all assets held with a broker or platform have to be held within a nominee account: “All client money and assets held with a nominee service is held on trust and is segregated from the platform’s own funds in accordance with the Financial Conduct Authority’s (FCA) client money rules and guidance. Therefore, no creditors have a legal right to client money or assets and these cannot be used to cover any of the stockbroker's or platform’s obligations.”

So far, so good. The client’s only risk appears to be that their capital is tied up in an administration process for a period of time. Richard Stone, chief executive of the Share Centre, says: “At any broker, provided those customer assets are properly segregated and reconciled, then even if the firm goes bust those assets should still be there for the clients. It may take a little while for them to get access to those assets as any insolvency practitioner works through the process, but they should get them back.”

However, there is a wrinkle in the system. Mr Cox says: “If the administrator can’t recover fees from company assets, it’s legally allowed to do so from client assets instead.” In theory, the administrators can use client assets to pay their fees. Administration is a costly process with each stage of the process needing to be approved by the courts. Previous broker administrations have seen bills run into tens of millions, which can come out of investors' pension pots.

This is controversial. In the case of Beaufort Securities, investors were angered when they found that the administrator’s costs (in this case PwC) – estimated to be around £100m – would be paid for with their supposedly ring-fenced savings. Lord Lee of Trafford became involved, tabling a number of questions in the House of Lords about the practice. Costs were ultimately revised lower and capped at £10,000 per person.

There are a number of ways this isn’t quite as bad as it seems. Brokers have capital requirements placed on them by the regulator. These are designed to cover administration costs if they stop trading. Hargreaves Lansdown, for example, has net cash of £394m according to its last set of accounts.

It is possible that the capital held by the broker isn’t sufficient to cover the costs of administration. The Financial Conduct Authority is monitoring capital held by brokers all the time, but in cases of fraud and financial malpractice clients’ assets could be put at risk once again. However, should this happen, investors will be able to claim under the Financial Services Compensation Scheme (FSCS), which can pay up to £85,000 to each investor.

The system therefore offers three layers of protection: one, the client’s assets are held separately; two, the broker holds enough capital to cover its administration costs; and three, the FSCS will step in to pay the difference.

But is it still possible to lose money? FSCS compensation applies where individuals have contracted directly with the broker. The broker will need to be UK-authorised and covered by the scheme, which should be clear from its literature. It gets more complex if the client has the relationship through an intermediary, such as a self-invested personal pension (Sipp) provider. The FSCS may well be able to ‘look through’, but it will depend on the circumstances of the individual case.

Equally, the FSCS should be triggered automatically, and investors should be told how to apply. Alex Kuczynski, chief corporate affairs officer at FSCS, says: “FSCS protection is triggered by the insolvency of the firm, such as the special administration regime – which the recent broker failures have been. FSCS protection is automatic and need not wait for any payout from the firm.” That said, the FSCS does have to identify and quantify the shortfall – that will depend on the administrator reconciling the accounts to check the cash and assets are there and can take time.

There is no formal time frame for returning money to investors. Mr Kuczynski says: “Each case will be different due to the variety of reasons for which firms fail. A firm with properly segregated assets and good records is likely to be quicker than a firm where there has been a fraud or some other poor behaviour. The quality and availability of the failed firm’s systems and key people are also likely to have a significant impact. As an example, Beaufort failed in March 2018 and the first transfer took place at the end of September 2018.”

Mr Kuczynski is clear that there shouldn’t be a situation where an individual client dealing with a UK-authorised financial services broker has uncompensated losses for a broker failure. The only circumstances in which it might happen is when a client has a very large portfolio and their allocation of the administration costs – which are charged as a percentage of the fund held – exceeds the £85,000 limit.

It is important to note that this hasn’t happened with recent broker failures and is only likely to happen in very specific cases where the administration is lengthy and expensive. The process will cost more where assets are invested in ‘exotic’ investments – individual smaller company shares, shares in emerging markets – rather than, say, collective funds. Equally, it will cost more if record-keeping has been poor. Administrators charge by the hour, so the longer and more complex the process, the more it will cost and the greater the risk of loss to investors.

Another potential route to losses is that the FSCS won’t compensate for investment losses except when clients have been victims of mis-selling (such as assets being put in high-risk illiquid areas when clients had requested a low-risk portfolio). In all other cases, while their assets are tied up in administration, the stock market could slide and they wouldn’t be able to take action. Of course, the opposite could happen as well, but investors lose agency over their assets. This can be a particular problem with smaller companies or other illiquid investments. In Beaufort’s case, there was also a problem with the valuation of some of the assets, so some investors saw apparent losses from a revaluation.

Most investors would rather avoid bad brokers altogether. It goes without saying that investors should ensure that a broker is regulated by the FCA, covered by the FSCS and operates through nominee accounts. However, this applies in the majority of broker failures, so is not protective in itself.

Beyond that, it is not easy to generalise about the reasons for broker failure: in Beaufort’s case it fell under investigation by the US Department of Justice, prompting the FCA to declare it insolvent. The US agency accused six individuals of “deceit and manipulative stock trading” and then laundering the fraudulent proceeds through offshore bank accounts and the art world. For SVS, the regulator found it had “questionable commission arrangements” and had promoted high-risk bonds to retail investors. In the case of Reyker and Fyshe Horton Finney, financial difficulties led to the closure.

That said, Richard Stone believes there are certain factors that should flash red for investors: “One of the key issues that has led to failures is where companies' business models result in potential conflicts, in particular where firms act as both agent and principal – trading on behalf of clients and trading on their own account. Personal investors should be wary of firms where this is the case and focus on those firms that only ever act as an agent for its clients. In this case, it is always therefore acting in its clients’ interests and not placing itself in a position where those interests may be conflicted with the trading interests of the firm.”

He believes personal investors should also look at the business model of the broker – is it sustainable, how does it make its money, is it profitable? In the case of Fyshe Horton Finney, the firm had been in financial difficulties for some time, with its final year of trading showing losses of £565,701. It can be easier to find this information for larger companies. Listed brokers need to publish audited accounts, which can provide greater transparency on their financial situation.

Spreading assets across multiple brokers may bring complexity and may not make a significant difference. Given that the risk is around the £85,000 compensation limit, that broker failures are rare and that no-one can know the administration costs ahead of time, it may be worth finding the right broker rather than trying to manage multiple accounts.

A final note would be that the failure of a broker often prompts a raft of scammers and claims management companies to appear offering to help investors receive compensation. Investors can end up losing twice. It is highly unlikely that a third-party claims organisation would be able to get money out of an administration process any faster and they may charge a vast fee for the attempt.

Investors can rest assured that in most cases the system works well and they should receive their money back in full in the event of broker failure. The FSCS will even pay for the assets to be transferred to a new scheme. Even so, it's worth checking a broker’s strength before investing. '

 

Thanks again, sancho, that is reasonably reassuring.

[TheCountOfNowhere]

Own up, who piled in yesterday ?

 

Royal Dutch Shell Plc

LON: RDSA

Follow

 

1,271.50 GBX −142.70 (10.09%)

 

I thought about it, was wondering if we'd reached the bottom.

It's just too volatile to call.

[Democorruptcy]

I wouldn't rely on this segregated cash idea. I once had £8k that went AWOL one morning when the Sporting Options betting exchange went bust. Luckily Betfair were still a decent firm then and took over their customer base, letting SO customers retrieve their losses via free commission there.

RMG on a downer. No divi, expecting a loss and reorganisation will take longer

[Don Coglione]

7 minutes ago, DurhamBorn said:

Iv been looking at the political side a bit more the last few days,and i think that i have probably under estimated those affects going forward.Its highly likely the west will pull back from China,and both blocks will then enter a reflation race.Im not 100% sold on Russia backing the Chinks .They might side with the west yet.

DurhamBorn,

It takes a good man to admit that he may have missed something; your macro calls, and others, have been stunning, but I did wonder how you could divorce politics from the bigger picture.

Either way, would you agree that Russia is in a good place for the reflation? I have a strong bias towards the Russians as I have found them amongst the smartest and easiest people with whom to do business, though I accept that my experiences may well have been unusual. In my view, the only thing that can queer their pitch is the aforementioned politics - if they are declared a tier one pariah state, that could seriously fuck them up. Unlikely, in my view, simply because the world needs their energy.

I have some Gazprom and will go for more, also looking for other Russia plays.

[BearyBear]

1 minute ago, TheCountOfNowhere said:

Own up, who piled in yesterday ?

 

Royal Dutch Shell Plc

LON: RDSA

Follow

 

1,271.50 GBX −142.70 (10.09%)

 

I thought about it, was wondering if we'd reached the bottom.

It's just too volatile to call.

Sold them yesterday... 

[sancho panza]

https://moneymaven.io/mishtalk/economics/us-output-drops-at-fastest-rate-in-a-decade-1azwV0Qwv0CmJ33bTNwMYg

US Output Drops at Fastest Rate in a Decade

[Democorruptcy]

What do the property watchers think of the housing market being shutdown today? People told not to complete. BBC lot made me laugh. "It might also affect the rental market?". Well yeah, as some buyers might have given notice to leave rental and some sellers might be moving into rented. Chaos ensues?

[TheCountOfNowhere]

41 minutes ago, Democorruptcy said:

What do the property watchers think of the housing market being shutdown today? People told not to complete. BBC lot made me laugh. "It might also affect the rental market?". Well yeah, as some buyers might have given notice to leave rental and some sellers might be moving into rented. Chaos ensues?

Its an odd one, the market was shut down by the lock down.  

What comes next is anyones guess but my guess is BoE soldiers going round offer 2x current asking prices off the back of magicked up cash.  Just to "help" people, you know

 

[Noallegiance]

I was due to be moving rental-to-rental tomorrow. Cancelled it. Could have moved but the uncertainty of income and market conditions means staying put.

We were being evicted for the landlord to put the place on the market. That isn't happening now, either.

Bring it on.

[PaulParanoia]

1 hour ago, TheCountOfNowhere said:

Own up, who piled in yesterday ?

 

Royal Dutch Shell Plc

LON: RDSA

Follow

 

1,271.50 GBX −142.70 (10.09%)

 

I thought about it, was wondering if we'd reached the bottom.

It's just too volatile to call.

Sold to short on Wednesday.  Waiting for a good spot to get back in.

[DurhamBorn]

1 hour ago, Ponty Mython said:

DurhamBorn,

It takes a good man to admit that he may have missed something; your macro calls, and others, have been stunning, but I did wonder how you could divorce politics from the bigger picture.

Either way, would you agree that Russia is in a good place for the reflation? I have a strong bias towards the Russians as I have found them amongst the smartest and easiest people with whom to do business, though I accept that my experiences may well have been unusual. In my view, the only thing that can queer their pitch is the aforementioned politics - if they are declared a tier one pariah state, that could seriously fuck them up. Unlikely, in my view, simply because the world needs their energy.

I have some Gazprom and will go for more, also looking for other Russia plays.

Very good position yes,and i think they might side with the west,as long as we play ball of course.I think they would quite like the status quo to remain them and the US,China would be harder to deal with.Far better to let China and India struggle against each other in the region.

[Don Coglione]

4 minutes ago, DurhamBorn said:

Very good position yes,and i think they might side with the west,as long as we play ball of course.I think they would quite like the status quo to remain them and the US,China would be harder to deal with.Far better to let China and India struggle against each other in the region.

My view also.

I knew you were only kidding when you said you disregarded politics!

[DurhamBorn]

Short term oil movements should be ignored,as should their stocks,they should be being bought in ladders and Shell last hit £9.30 and BP £2.24 so well above bottom ladders bought.

Oil target on WTI is $34 by mid summer,maybe $39 .Big oil will go up 400% from here into the end of the cycle.Watching movements now should be avoided apart from to execute buy ladders.Its time to let the cycle play out.

[DurhamBorn]

4 minutes ago, Ponty Mython said:

My view also.

I knew you were only kidding when you said you disregarded politics!

I disregard it in that i always think the macro drives the politics,and thats the same going forward.The political situation though might mean the cycle plays out quicker,and along a much more certain path.Very interesting to see how things play out.

[Don Coglione]

4 minutes ago, DurhamBorn said:

I disregard it in that i always think the macro drives the politics,and thats the same going forward.The political situation though might mean the cycle plays out quicker,and along a much more certain path.Very interesting to see how things play out.

Ordinarily, yes - but in extraordinary times, a strong political tail can wag the macro dog.

This is one of those times; the question is whether the politics are sufficiently strong. So far, I reckon they are.

[Bricks & Mortar]

Conversations today.
One, with a local lady, opened a shop last autumn.  Just a one person, lady behind the counter sort of thing.  She's getting nothing from the bailout, because the small print on the small business grant reads "trading for one year", and as the business is young, she's not taking a wage yet.  Her husband is an oil worker, with a contract in the middle east.  He works as a limited company, but without UK premises,and is getting nothing from the bailout
Shortly after,  in the bakers, a customer says her husband is getting nothing, as a self-employed plumber, and a older lady chips in that her son is in the same boat.
I'm getting nothing myself, since my sick pay ran out in January, but my injury wasn't fully healed and I took February as unpaid leave - and the 80% wages is a % of your February this year wage, so my accountant says.

That's a lot of people realising they're getting nothing.  The only other person I spoke to today, a self-employed gardener, told me he's just keeping on working.  We didn't talk about bailout, but I assume he's in the same boat, as I'd expect he mostly gets paid in cash.

Sounds pretty deflationary, if you ask me.

 

[TheCountOfNowhere]

1 minute ago, Bricks & Mortar said:

Conversations today.
One, with a local lady, opened a shop last autumn.  Just a one person, lady behind the counter sort of thing.  She's getting nothing from the bailout, because the small print on the small business grant reads "trading for one year", and as the business is young, she's not taking a wage yet.  Her husband is an oil worker, with a contract in the middle east.  He works as a limited company, but without UK premises,and is getting nothing from the bailout
Shortly after,  in the bakers, a customer says her husband is getting nothing, as a self-employed plumber, and a older lady chips in that her son is in the same boat.
I'm getting nothing myself, since my sick pay ran out in January, but my injury wasn't fully healed and I took February as unpaid leave - and the 80% wages is a % of your February this year wage, so my accountant says.

That's a lot of people realising they're getting nothing.  The only other person I spoke to today, a self-employed gardener, told me he's just keeping on working.  We didn't talk about bailout, but I assume he's in the same boat, as I'd expect he mostly gets paid in cash.

Sounds pretty deflationary, if you ask me.

 

Politicians lie, tell people what they want to hear.

Go figure

Meanwhile, the bankers magicked up money money is very real

[Noallegiance]

4 minutes ago, Bricks & Mortar said:

Conversations today.
One, with a local lady, opened a shop last autumn.  Just a one person, lady behind the counter sort of thing.  She's getting nothing from the bailout, because the small print on the small business grant reads "trading for one year", and as the business is young, she's not taking a wage yet.  Her husband is an oil worker, with a contract in the middle east.  He works as a limited company, but without UK premises,and is getting nothing from the bailout
Shortly after,  in the bakers, a customer says her husband is getting nothing, as a self-employed plumber, and a older lady chips in that her son is in the same boat.
I'm getting nothing myself, since my sick pay ran out in January, but my injury wasn't fully healed and I took February as unpaid leave - and the 80% wages is a % of your February this year wage, so my accountant says.

That's a lot of people realising they're getting nothing.  The only other person I spoke to today, a self-employed gardener, told me he's just keeping on working.  We didn't talk about bailout, but I assume he's in the same boat, as I'd expect he mostly gets paid in cash.

Sounds pretty deflationary, if you ask me.

 

This is why socialism doesn't work.

A small group can't implement decisions that take into account millions of fluctuating variables. Only free markets do that.

[Loki]

[sleepwello'nights]

47 minutes ago, Bricks & Mortar said:

Conversations today.
One, with a local lady, opened a shop last autumn.  Just a one person, lady behind the counter sort of thing.  She's getting nothing from the bailout, because the small print on the small business grant reads "trading for one year", and as the business is young, she's not taking a wage yet.  Her husband is an oil worker, with a contract in the middle east.  He works as a limited company, but without UK premises,and is getting nothing from the bailout
Shortly after,  in the bakers, a customer says her husband is getting nothing, as a self-employed plumber, and a older lady chips in that her son is in the same boat.
I'm getting nothing myself, since my sick pay ran out in January, but my injury wasn't fully healed and I took February as unpaid leave - and the 80% wages is a % of your February this year wage, so my accountant says.

That's a lot of people realising they're getting nothing.  The only other person I spoke to today, a self-employed gardener, told me he's just keeping on working.  We didn't talk about bailout, but I assume he's in the same boat, as I'd expect he mostly gets paid in cash.

Sounds pretty deflationary, if you ask me.

 

Perhaps they haven't looked fully at the proposals?

The government has tried to include most people but inevitably some will not be eligible. There is a fall back position of Universal Credit, I have no idea of the eligibility rules. 

The self employed plumber should get something from yesterday's proposal If he is self employed, has submitted a tax return for 2018/19 and has traded in 2019/20.

No idea about your situation, if you're no longer eligible for SSP then you can go on Universal Credit or JSA can't you? The oil worker in the Middle East isn't working in the UK so why should he be eligible for UK support? 

[Bricks & Mortar]

10 minutes ago, sleepwello'nights said:

Perhaps they haven't looked fully at the proposals?

The government has tried to include most people but inevitably some will not be eligible. There is a fall back position of Universal Credit, I have no idea of the eligibility rules. 

The self employed plumber should get something from yesterday's proposal If he is self employed, has submitted a tax return for 2018/19 and has traded in 2019/20.

No idea about your situation, if you're no longer eligible for SSP then you can go on Universal Credit of JSA can't you? The oil worker in the Middle East isn't working in the UK so why should he be eligible for UK support? 

Well, yes, we could all get universal credit of £94 a week.   That's hardly going to pay the mortgage.  I don't have a mortgage myself and have savings and several months food in, but most of the other people I met have mortgages, car loans, credit cars and whatnot.   For myself,  I'm just going to keep working and taking a wage - I just meant I wouldn't qualify for anything if I decided to stop, or if the government later forces me to.  I didn't mean it as a complaint.  More an observation of how the government support is by no means comprehensive.

Edit to add - the plumber is young, and recently gone self employed.  Not sure what he may or may not have submitted, but its possible thats how he falls foul.

 

[sleepwello'nights]

1 minute ago, Bricks & Mortar said:

Well, yes, we could all get universal credit of £94 a week.   That's hardly going to pay the mortgage.  I don't have a mortgage myself and have savings and several months food in, but most of the other people I met have mortgages, car loans, credit cars and whatnot.   For myself,  I'm just going to keep working and taking a wage - I just meant I wouldn't qualify for anything if I decided to stop, or if the government later forces me to.

Yes I understand and don't mean to sound heartless. There is a limit to how much the government can hand out, and I'm sure that stories will emerge of those who didn't get any aid together with stories of those who took advantage. 

Even if a citizens income was brought in it wouldn't be perfect.