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

[MrXxxx]

Anyone noticed how many articles have been talking up the FTSE for 2021 recently?...I have seen it in MoneyWeek, FT, and even MSN...methinks it may be a shoeshine scenario given the percentage of Financials in it.

[jamtomorrow]

9 hours ago, ThoughtCriminal said:

 

Replacing ICE cars with EVs just in the UK would take: 

-- 200% of the of cobalt currently mined on a global basis
-- 75% of the lithium currently mined; and
-- 50% of the copper currently mined 

It's worth looking behind those snapshot numbers, especially supply elasticity (which we usually revisit at least weekly for O&G on this thread).

Take Lithium - I had a look last year in terms of investing somewhere like Albemarle as a "decomplex" EV commodities play. Truth (at the time) was a glut of Lithium production capacity and a depressed commodity market, to the extent that marginal projects were getting mothballed e.g. https://www.abc.net.au/news/2019-11-01/wodgina-lithium-project-mothballed-and-workers-to-lose-jobs/11663726

Meanwhile, battery technology advances continue to bear down on price-performance. $100/kwh is reckoned to be the inflection point where an EV is cost-competitive with ICE, and we just reached $137/kwh.

Assuming that trend continues, and combined with mothballed production capacity like Wodgina ready to come on stream as soon as the price moves, the denominator in that 75% seems very soft indeed.

Can't speak for cobalt or copper mind, although I'd be quite happy to see a copper shortage having loaded up on BHP and RIO in March 

[Hunty]

Tesla who.

Now that's a closing price. Exxon Bid?

[jamtomorrow]

Just now, Hunty said:

Tesla who.

Now that's a closing price. Exxon Bid?

F***in 'ell

[Shamone]

20 hours ago, DurhamBorn said:

I got around £7k self employed grant,im now PAYE so i stuck the lot into physical silver.Given i have lots of friends who have been getting £2k+ a month in benefits for 15+ years i feel no guilt taking it.I of course pay everything over £12.5k in wages into my Sipp .Il probably pack in this year,maybe March.Then i might do a couple of months a year after that until 55,maybe not.In April il also claim JSA none means tested for 6 months,then ESA none means tested for a year or until booted off.System is 100% corrupt,so pay as little in and take out anything you can.

Love it. Makes my working under the tax threshold and buying practically nothing look like amateur night.

[DurhamBorn]

31 minutes ago, Hunty said:

Tesla who.

Now that's a closing price. Exxon Bid?

@Cattle Prod put in charge of exploration  @Yellow_Reduced_Sticker put in charge of expense accounts  Given the ADR isnt following i think we can take it that its a mistake,especially as BP found no gas in a massive Australian prospect today.

[leonardratso]

got to be a feed fault, look how flat the graphs been all day, looks like it never got any data all day, graphs are never that flat, even bankrupt or taken over Sps move a bit.

[Democorruptcy]

3 hours ago, Starsend said:

Anybody have any thoughts on Magellan Midstream Partners LP listed on the NYSE? Oil pipeline distribution/storage etc, similar to Enbridge I guess. Very tempted as they have a 9.61% divi at the moment. Some of the research I've read rates the divi safety as being 'very safe', safer than Enbridge. 

Is that a dividend shown on HL by any chance. Do you know how it's calculated? The company's last reported dividend  divided by current share price. In many cases it's complete and utter bollocks because the next dividend may be going to be reduced or the company has even stopped paying one, so it should state "N/A". A much loved firm is 3.27% at the moment but don't hold your breath waiting for the dividend to appear in your account! You may be OK with Magellan so don't let this put you off, just pointing out the vagaries of how misleading the dividend figure can be and no doubt the methodology applies at other places other than HL.

[Hunty]

The culprit last trade.

Order book purchase?

[leonardratso]

2 minutes ago, sam1994 said:

What's up with BP share price at close today?

I've been tracking it since it was at its 1995 low, but wasn't sure whether to buy in as it seemed volatile..

Has it actually almost doubled today!?

 

unlikely, see earlier.

[sancho panza]

6 hours ago, Starsend said:

Anybody have any thoughts on Magellan Midstream Partners LP listed on the NYSE? Oil pipeline distribution/storage etc, similar to Enbridge I guess. Very tempted as they have a 9.61% divi at the moment. Some of the research I've read rates the divi safety as being 'very safe', safer than Enbridge. 

You have to be careful with these. @Viceroy pointedout that the LP investmetns may have tax implications in terms of entering a partnertship for US tax purposes.

[SillyBilly]

Thought this was interesting. Small fry at the moment but it shows direction of travel for LNG powered trucks. 323% up in total tonnage sold in Germany 2019 vs this year. 

https://www.argusmedia.com/en/news/2166616-german-lng-demand-for-transport-more-than-doubles

Volvo reporting substantial shift in interest to LNG in commercial truck enquiries. Just read Asda bought 202 gas powered trucks from them. LNG for shipping is now heating up too, Gibraltar is investing to become the number 1 port in the Med for LNG refuelling, spotting the trend.

https://www.porttechnology.org/news/cma-cgm-unveils-latest-lng-powered-vessel/

CMA CGA has 9 of these bad boys on order.

Also as a big Shell investor (on top of liking the above) I can see they are pushing the hydrogen fuel option for aerospace too. Chucking some money to ZeroAvia as proof of concept. May have gone unnoticed but they (ZeroAvia) made the first hydrogen-fueled flight in a six-seater aircraft this year and have secured investment from UK government and Shell/Amazon/Gates to make a commercially viable 500 mile 20-seater by early 2023. 

https://www.greentechmedia.com/articles/read/hydrogen-aviation-start-up-raises-37.7-million-from-breakthrough-energy-ventures-amazon-shell

I also got sent some snippets of Shell's lobbying/petition to the UK gov to reduce fuel duty on GTL diesel to make it price favourable/equivalent to conventional diesel. No idea what will come of that but the power is in UK gov's hands to significantly improve air quality and not hit drivers in the pocket. This is becoming quite key as red diesel fuel relief is going 1st April 2022 for all but agricultural and one or two niche sectors. Shell wants to move them all over to GTL fuels which they are the world leader in.

 

[JMD]

16 hours ago, Lightscribe said:

It’s one topic that’s never been popular on this thread, but I’ve always posted my crypto trading updates over the years on here and HPC regardless. My work is technology based around the sector so I have an interest by default. 

I don’t see crypto in general as a fad. Digital currency is here to stay which in use with blockchain goes hand in hand. Also with the implementation of smart contracts and with continued automation and ever increasing reliance on AI, speed of transactions I would go so far as to say the future is a certainty.

Whether that translates as XRP (for example) as the next new world currency is doubtful. XRP is currently facing a SEC lawsuit (reason for price drop the last week) which will be foretelling for similar cryptos. The elites and bankers will never let a few basement dwelling teenagers become the next 1%ers. I envisage that they will have their own currency in which they retain control eventually, with mixture of other crypto technologies again which they control. 

But as hedge funds, payment companies (i.e PayPal) start to raise their head above the parapet and invest in the likes BTC, people start to take it a bit more seriously. It is another investment vehicle in the hedge against inflation after all. When that starts in earnest I expect to to see the likes of BTC go parabolic.

The governments making sure they tie up any loose ends with registration at exchanges so that no one escapes taxation is also noteworthy. They will be happy to let crypto continue in its current form whilst that continues to be the case.

I, myself have been in and out since the beginning. Yes I would have been a multimillionaire by now if I had held, but I didn’t. Nor have most, as it was early days and taking profit is the most sane thing anyone would do. The multi-millionaire stories were the likes of those who bought as a gimmick or to buy a bit of weed on the Silk Road and forgot all about their BTC wallet.

I now store what I have on a hardware wallet, with a bit for trading on both on the main exchanges and decentralised. My mantra is ‘invest in anything thats a hedge against inflation when it’s at a low’ (Doesn’t quite roll of the tongue I know). This all includes physical PMs, ETFs, miners, oil/energy/infrastructure stocks in an ISA and pension, BTC and other crypto, antique/modern Rolex watches, classic cars and even bloody rare retired collector UCS Lego sets. None are for sale...yet.

Inflation is still to come. Currently I’m probably just about the richest poor man you’ll ever meet. 

 

 

When Lyn Alden started talking about BTC I begun to take notice. When our own Durhamborn mentioned that it could potentially comprise a small speculative inflation/monetary hedge I started reading up on it. I was late in but happy with my investment because it chimes with how I think this decade will be transformed by government/private cryptos, blockchain/smart contract tech. I view it as a digital commodity and therefore for me forms part of this blog's thesis, and represents a small part of my own pm portfolio allocation. Though really need to see institutional money moving in, then would feel more confident about price direction.                                                                                                                                                     Lightscribe, you mention you trade BTC plus you hold some for long term. In term of holding for the long term do you favour any particular valuation models, such as say planB? Or maybe you have your own model or thoughts on where BTC price might be next year? Historically the price drops big time approx 12 months after each halving so I think I'll probably look to sell some of my BTC hopefully before that reversion happens. 

[Barnsey]

 

[jamtomorrow]

 

[DurhamBorn]

@Barnsey problem i have is id probably go for the blonde rather than the Fiat .

Its incredible how much they have stolen from people this year through printing.However a dis-inflation cycle would always end like this,they have little choice.As an ordinary person you simply have to try to hedge against it.Problem is however good you are,your children and grandchildren probably wont be.Thats how the system tends to take everything over time.

[Lightscribe]

8 hours ago, JMD said:

When Lyn Alden started talking about BTC I begun to take notice. When our own Durhamborn mentioned that it could potentially comprise a small speculative inflation/monetary hedge I started reading up on it. I was late in but happy with my investment because it chimes with how I think this decade will be transformed by government/private cryptos, blockchain/smart contract tech. I view it as a digital commodity and therefore for me forms part of this blog's thesis, and represents a small part of my own pm portfolio allocation. Though really need to see institutional money moving in, then would feel more confident about price direction.                                                                                                                                                     Lightscribe, you mention you trade BTC plus you hold some for long term. In term of holding for the long term do you favour any particular valuation models, such as say planB? Or maybe you have your own model or thoughts on where BTC price might be next year? Historically the price drops big time approx 12 months after each halving so I think I'll probably look to sell some of my BTC hopefully before that reversion happens. 

I hold BTC on a hardware wallet that’s not touched. I have ETH, LINK which I trade with each other (as they are high volume alts) and a small amount of minor cryptos.

I believe BTC will be hammered in the BK event (just like everything will be, but more so anything tech based) I don’t ever see it going to previous lows however ($6k or below) A major drop from here would see it in the lower $10-15k range.

I’ve only ever converted fiat at the very lows after the previous ATH ($4-6k). I have other aims in the tech sector for the ISA with the limited free cash that I have after the BK. These are TSMC, Texas Instruments and Nvidia (for ARM) as well as other sector stocks that are just too expensive at the moment. I’m not selling anything that I have already, as I can’t predict if the BK is definitely coming (logically it will, but we don’t live in logical times), and it’s infinity Amazon, Tesla etc to the moon from here with ‘free’ UBI helicopter money.

[Starsend]

15 hours ago, Democorruptcy said:

Is that a dividend shown on HL by any chance. Do you know how it's calculated? The company's last reported dividend  divided by current share price. In many cases it's complete and utter bollocks because the next dividend may be going to be reduced or the company has even stopped paying one, so it should state "N/A". A much loved firm is 3.27% at the moment but don't hold your breath waiting for the dividend to appear in your account! You may be OK with Magellan so don't let this put you off, just pointing out the vagaries of how misleading the dividend figure can be and no doubt the methodology applies at other places other than HL.

I got the yield from investing.com. No idea how accurate/up to date that is. I use dividenddata.co.uk for UK stocks which seems to incorporate dividend cuts into their data pretty quickly. Does anybody know of the most reliable data source for up to date dividend yields for foreign/US stocks?

[Starsend]

13 hours ago, sancho panza said:

You have to be careful with these. @Viceroy pointedout that the LP investmetns may have tax implications in terms of entering a partnertship for US tax purposes.

Thanks SP. Done a bit more reading and it does indeed mention something vague about taxes.

"MLPs can pay high dividends because they do not pay any income taxes (you pay taxes on your share of the MLP’s income instead), pay out almost all of their cash flow in the form of cash distributions (the MLP equivalent of corporate dividends), and generate fairly predictable earnings in many cases."

Doesn't really say how you pay tax but I assume some kind of withholding tax when the divi is paid. Full article is here https://www.simplysafedividends.com/intelligent-income/posts/3-high-dividend-stocks

It appears that Enbridge had a similar structure which it has now changed.

https://www.simplysafedividends.com/intelligent-income/posts/1236-implications-of-enbridge-s-buyout-of-its-mlps

I think DB holds Enbridge if I remember correctly so perhaps he can shed some further light. I'm interested in buying them for the yield and because they're listed on the Canadian exchange and I'd like some exposure to CAD.

 

 

 

 

 

 

[sancho panza]

Yelow stuff 8% off highs.

GDX 15% off highs

GDXJ 10% off highs.

QUite a few PM miners at a discount here imho.

eg Anglogold 40% off summer peak.

Decl:long AU

[sancho panza]

3 hours ago, Starsend said:

Thanks SP. Done a bit more reading and it does indeed mention something vague about taxes.

"MLPs can pay high dividends because they do not pay any income taxes (you pay taxes on your share of the MLP’s income instead), pay out almost all of their cash flow in the form of cash distributions (the MLP equivalent of corporate dividends), and generate fairly predictable earnings in many cases."

Doesn't really say how you pay tax but I assume some kind of withholding tax when the divi is paid. Full article is here https://www.simplysafedividends.com/intelligent-income/posts/3-high-dividend-stocks

It appears that Enbridge had a similar structure which it has now changed.

https://www.simplysafedividends.com/intelligent-income/posts/1236-implications-of-enbridge-s-buyout-of-its-mlps

I think DB holds Enbridge if I remember correctly so perhaps he can shed some further light. I'm interested in buying them for the yield and because they're listed on the Canadian exchange and I'd like some exposure to CAD.

 

 

 

 

 

 

The key thing is that when you sign your W8 BEN,there's a bit where you have to state you're not in a partnership or some such.Ergo,I'm not going to risk it as LP invesments would be a smal part of portfolio but could casue 50% of the hassle or more.

Happy to be educated by thsoe that know.

[Bobthebuilder]

56 minutes ago, sancho panza said:

Yelow stuff 8% off highs.

GDX 15% off highs

GDXJ 10% off highs.

QUite a few PM miners at a discount here imho.

I was looking at HMY again today, I am getting an itchy buy finger.

Wonder if we will be able to buy GDX and GDXJ again soon?

[Democorruptcy]

2 hours ago, sancho panza said:

Yelow stuff 8% off highs.

GDX 15% off highs

GDXJ 10% off highs.

QUite a few PM miners at a discount here imho.

eg Anglogold 40% off summer peak.

Decl:long AU

Alternatively it's hugely more expensive than this time last year.

Where do you see the yield on US 10 yr going at the moment?

[Jesus Wept]

11 hours ago, Lightscribe said:

I hold BTC on a hardware wallet that’s not touched. I have ETH, LINK which I trade with each other (as they are high volume alts) and a small amount of minor cryptos.

I believe BTC will be hammered in the BK event (just like everything will be, but more so anything tech based) I don’t ever see it going to previous lows however ($6k or below) A major drop from here would see it in the lower $10-15k range.

I’ve only ever converted fiat at the very lows after the previous ATH ($4-6k). I have other aims in the tech sector for the ISA with the limited free cash that I have after the BK. These are TSMC, Texas Instruments and Nvidia (for ARM) as well as other sector stocks that are just too expensive at the moment. I’m not selling anything that I have already, as I can’t predict if the BK is definitely coming (logically it will, but we don’t live in logical times), and it’s infinity Amazon, Tesla etc to the moon from here with ‘free’ UBI helicopter money.

I traded my silver bought in April for a Bitcoin Miner (ARGO) in October. Silver had had a nice run and I took profits.

Again it was @DurhamBornwho sparked my interest in it (as well as silver) -  and the  @deathfunkadded the detail. 

“12 months after the halving” I’ll keep a wary eye out.  
 

So much has been said about the BK... will it happen? If so when? Do we need to go through 10 - 15 years of inflation first ? Or is the BK coming first? 

[Viceroy]

9 hours ago, Starsend said:

Thanks SP. Done a bit more reading and it does indeed mention something vague about taxes.

"MLPs can pay high dividends because they do not pay any income taxes (you pay taxes on your share of the MLP’s income instead), pay out almost all of their cash flow in the form of cash distributions (the MLP equivalent of corporate dividends), and generate fairly predictable earnings in many cases."

Doesn't really say how you pay tax but I assume some kind of withholding tax when the divi is paid. Full article is here https://www.simplysafedividends.com/intelligent-income/posts/3-high-dividend-stocks

It appears that Enbridge had a similar structure which it has now changed.

https://www.simplysafedividends.com/intelligent-income/posts/1236-implications-of-enbridge-s-buyout-of-its-mlps

I think DB holds Enbridge if I remember correctly so perhaps he can shed some further light. I'm interested in buying them for the yield and because they're listed on the Canadian exchange and I'd like some exposure to CAD.

 

 

 

 

 

 

To my basic understanding, if any fund (etf or mlp) needs a K1 form then I steer clear.

 

https://www.google.co.nz/amp/s/www.barrons.com/amp/articles/mlp-investings-pros-and-cons-51550754048

 

https://www.investopedia.com/ask/answers/09/k-1-tax-form.asp

 

https://thecollegeinvestor.com/5202/investing-mlps-yields-high-complications/

 

https://www.google.co.nz/amp/s/seekingalpha.com/amp/article/4342555-enbridge-undervalued-returns-like-mlp-and-no-kminus-1