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

[BearyBear]

Robinhood App got rating of 1.0 apparently?

[Noallegiance]

22 minutes ago, DurhamBorn said:

Whats going on is relevant to the thread because its classic end of cycle stuff.The actual affects on the market and the way it shows underlying sentiment.However probably not all the different tweets etc,maybe a roundup of events once a day while it runs? .The outcome of course is that all these young men need a woman and a house to bang her in and a job to pay for it.

Thats the real outcome of this and just another moment on the road to inflation.

These people are much better off than i was in the early 80s,but they dont feel like they are.What they actually lack is some certainty.

The market is actually doing its job here in a way.Shorts etc have turned the market away from where equity is used to grow a business and then shareholders are rewarded with growing dividends.Real returns instead of financial engineering is another part of the cycle as debt gets more expensive.These young people are the front end of that maybe.

This is why I love this thread.

There's usually someone who looks at things in ways I don't.

[dgul]

1 hour ago, Green Devil said:

https://cointelegraph.com/news/rob-from-the-poor-and-give-to-the-rich-robinhood-prompts-furious-backlash-after-restricting-trades

This is shocking. Pleased to see a backlash against what is clear market manipulation by robin hood probably at the request of Citadel. Pure scum. Lets hope they burn for it.

 

RH has apparently drawn on their credit lines.  How bad is this?

https://www.bloomberg.com/news/articles/2021-01-28/robinhood-is-said-to-draw-on-credit-lines-from-banks-amid-tumult

[wherebee]

More and more people are being awakened to the stacked decks of western societies.  The past 5 years (I would say starting with the Bernie/Clinton fraud in the Dem primaries) has exposed more and more how the things which most people accepted as true - free and fair elections, free press, free speech, governments acting in the interest of most people, free markets, etc - are in fact largely corrupted beyond any reasonable level of recovery through the normal mechanisms.

That makes it a very dangerous time coming up - as others have said, a better organised demagogue could arise.

In terms of this thread, and investment macros, how do we take that into account?

 

[Hancock]

30 minutes ago, DurhamBorn said:

 

These people are much better off than i was in the early 80s,but they dont feel like they are.

I grew up in NE England in the 80s, my dad worked in the shipyards getting laid off several times when he had a mortgage and 3 kids. Id say people then were better off than kids today whose parents have been renting a house for 20 odd years.

Future prospects when leaving school in the 80s early 90s didnt involve taking on epic amounts of debt to get a job that doesn't need a degree.

Leaving school in NE England with no debt and a willingness to work in the 80s/early 90s may well have been shite but the prospects were better than what's been on offer for some time.

[goldbug9999]

8 hours ago, Noallegiance said:

My silver miner gambles as per the shares forum have paused at 'submitted for dealing'.

Topped up my silver by 5k earlier today, worth a punt although I'm not convinced it will get the reddit treatment but nothing to lose really.

[Metalheadz]

MacroVoices are pushing the silver squeeze theme in their weekly chart book. Not listened yet but will top up my confirmation bias first thing tomorrow 

[Virgil Caine]

2 hours ago, wherebee said:

More and more people are being awakened to the stacked decks of western societies.  The past 5 years (I would say starting with the Bernie/Clinton fraud in the Dem primaries) has exposed more and more how the things which most people accepted as true - free and fair elections, free press, free speech, governments acting in the interest of most people, free markets, etc - are in fact largely corrupted beyond any reasonable level of recovery through the normal mechanisms.

That makes it a very dangerous time coming up - as others have said, a better organised demagogue could arise.

In terms of this thread, and investment macros, how do we take that into account?

 

The thing is for capitalism to survive it needs “bad things” to happen like recessions, unemployment, business failures, property market crashes , hedge funds going bust and the occasional billionaire losing most of their money. These are all parts of normal market functions which reallocate resources to where they can be more efficiently used. Since the mid 1990s there has been a concerted attempt to try to avoid any of these events happening. The result of of these interventions to prevent normal economic cycle corrections means that risk has been consistently mispriced for nearly two decades. The low price of debt borrowing and the constant bailouts by CBs and governments means inappropriate or incorrect speculation is not punished. The absence of moral hazard  means the financial sector up is continually being primed to blow huge bubbles and then fail systematically as it did in 2008.

[DurhamBorn]

3 hours ago, Virgil Caine said:

The thing is for capitalism to survive it needs “bad things” to happen like recessions, unemployment, business failures, property market crashes , hedge funds going bust and the occasional billionaire losing most of their money. These are all parts of normal market functions which reallocate resources to where they can be more efficiently used. Since the mid 1990s there has been a concerted attempt to try to avoid any of these events happening. The result of of these interventions to prevent normal economic cycle corrections means that risk has been consistently mispriced for nearly two decades. The low price of debt borrowing and the constant bailouts by CBs and governments means inappropriate or incorrect speculation is not punished. The absence of moral hazard  means the financial sector up is continually being primed to blow huge bubbles and then fail systematically as it did in 2008.

It has ran alongside removing risk from bad choices in life as well.Knock 3 kids out and dont teach them anything,get benefits and DLA of over £2000 a month.Its fascinating how the left has taken over the institutions etc.Everyone i know who works and some who dont think benefit levels are a disgrace yet if you watch the TV you would think everyone thinks Susan really does need a food bank even though she gets double minimum wage for doing nothing.

The question is though are the left themselves being played by the 1%?,and the answer is yes.Thats because taking from hard working people keeps them working forever and the money stolen and given to the idle ends up with the 1%.

It will be interesting to see how long it can continue with structural deficits and inflation heading north.

[nirvana]

8 hours ago, DurhamBorn said:

These people are much better off than i was in the early 80s,but they dont feel like they are.What they actually lack is some certainty

how come they're 'much better off'? the benefit scroungers yeah but the rest have been totally fucked over the last few decades along with the rest of the planet!

the boomers stole the houses and the pensions...

the corporates, media and NHS has fucked their health and the poor fuckers will be lucky if they're not still working at 75.......and now the government has caged them up to save the embarrassment of a few old dead cunts piling up

Is it any surprise that the dim fuckwits sit playing on games consoles all day and look like bloated heffers on social media

God save us all, RIP planet earth 

NB oh yeah forgot to mention the piles of debt in order to get an 'education' nowadays 

[Barnsey]

Shot......and chaser 

 

[jamtomorrow]

7 hours ago, goldbug9999 said:

Topped up my silver by 5k earlier today, worth a punt although I'm not convinced it will get the reddit treatment but nothing to lose really.

Same. Transfer out of NEST just hit my SIPP. 50% straight into PSLV.

[jamtomorrow]

8 hours ago, wherebee said:

In terms of this thread, and investment macros, how do we take that into account?

Think carefully about jurisdictional risk and how market structure could evolve.

That frog has been boiled *very* slowly over the cycle, to the extent that messing with globalised free-flowing capital markets with direct access to "backbone" assets now seems unthinkable to many, even among contrarians (although it's notable that access to CB reserves has never been fully democratized).

Well they just messed with it, bigtime. And the sky didn't fall in, which means they'll keep messing with it from here.

The direction of travel is clear: you, me, and all the other retail investors are going to be herded out the door and into our own separate "markets" for financial instruments which will largely be derivatives of the underlying.

You won't be allowed to buy or sell the same assets in the same pool as institutions. Only accredited institutions will be permitted to hold instruments like government debt, corp bonds, stocks and shares. Everyone else will have to buy derivatives from the institutions.

Manipulation? They're just getting going. This Robinhood fandango is the perfect excuse for more of the same.

[Democorruptcy]

9 hours ago, dgul said:

RH has apparently drawn on their credit lines.  How bad is this?

https://www.bloomberg.com/news/articles/2021-01-28/robinhood-is-said-to-draw-on-credit-lines-from-banks-amid-tumult

Robinhood CEO was just on Bloomberg (youtube). When trades are placed they take 2 days to clear. RH have to provide margin. When nobody is selling there is nothing coming in the other way to offset it. Apparently they have raised $1bn to cover their margin. I thought this was over last night but maybe it isn't. If I was a hedge fund with positions worth fortunes, I'd be helping fund RH. Yesterday I thought this was The Big Long because it was forcing hedge funds to buy to close short positions but if it carries on and hedge funds start toppling over maybe it's The Big Short 2?

[geordie_lurch]

It's far from over IMHO - the systemic shocks and risks are only really just getting started as the people buying GME aren't selling till it hits $1000 at least so other stocks are going to be sold to cover

[Heart's Ease]

!

Added a scrappy paste of the article.

Norway Wealth Fund Dumps Oil Stocks Amid $10 Billion Loss

By 

Lars Erik Taraldsen

, 

29 January 2021, 05:00 GMT

 

Photographer: Andrey Rudakov/Bloomberg

Norway’s sovereign wealth fund has sold its entire portfolio of companies focused on oil exploration and production, marking a major step away from fossil fuels for the investing giant.

 

 

The portfolio, worth about $6 billion in 2019, was fully exited by the end of last year, Trond Grande, the fund’s deputy chief executive, said by phone on Thursday. The move completes a years-long process to reduce the giant investor’s exposure to a sector that has defined Norway’s economy for the better part of half a century.

 

 

Trond Grande

Photographer: Odin Jaeger/Bloomberg

Grande spoke after the fund revealed a roughly $10 billion loss on oil and gas holdings in 2020 that had been valued at over $40 billion at the start of the year. The fund still holds integrated oil companies, with Royal Dutch Shell Plc its seventh largest equity investment when it last disclosed its holdings at the start of last year.

 

 

 

The fund declined to comment on the size of the oil exploration and production portfolio.

 

 

Overall, 2020 was one of the investor’s best years ever, with the total portfolio generating $123 billion in returns, buoyed in particular by its holdings of tech stocks.

 

Read: Norway Wealth Fund CEO Says This Market Can’t Continue Forever

Norway’s wealth fund, the world’s biggest, started turning its back on oil and gas more than three years ago. The intention back then was to diversify away from an industry to which Norway’s economy was heavily exposed, with a view to addressing a key financial risk.

But the fund’s new CEO, Nicolai Tangen, has now made sustainable investing an explicit focus of his strategy, and says all portfolio managers who work for the fund need to operate with that in mind.

Renaissance Man

The 54-year-old former hedge fund manager, who’s also a trained chef with degrees in art history and social psychology, says his expectations around ESG skills extend to the external managers, who now oversee about $60 billion of the fund’s total assets.

 

Tangen needs to operate within a complex governance structure that includes an ethics council, as well as Norway’s central bank, government and parliament. So there are limits to how much he can change. But he says a key contribution the fund can make to ethical investing, without needing to change any mandates, is by digging a lot deeper into how companies actually run their businesses.

“On the forensic side, that is where we can add value,” he said during an interview with Bloomberg Television on Thursday. “We do ESG, risk-based assets, and we have done a range of those over the last few years.”

 

 

Tangen has also assigned about 10 asset managers to hunt down investment opportunities in renewable infrastructure. The fund, which the CEO says has yet to invest a single cent in the area, wants the portfolio to eventually reach about 1% of the total $1.3 trillion fund. Tangen has already admitted that might prove hard, with demand for renewable infrastructure assets driving up prices.

“We’re working relentlessly to get something under our belts here, and we hope that will happen this year,” he said in an interview. “We’re looking for wind and sun projects in Europe and America.”

 

Back in October, Tangen said “there’s a lot of competition” for the kind of projects the fund would be interested in buying.

 

[Craig]

12 minutes ago, geordie_lurch said:

It's far from over IMHO - the systemic shocks and risks are only really just getting started as the people buying GME aren't selling till it hits $1000 at least

I'd have thought this will inevitably Peter out as there must come a point when these kids start to lose their principled stand and take profits? Unless there's some big backer behind this, certainly Musk has been pretty vocal for example. 

[Hancock]

20 minutes ago, Heart's Ease said:

!

 

Thats just bloody ridiculous, it was created with oil money and if Norway as a nation stopped producing they'd go back to being Eskimos.

[Democorruptcy]

4 minutes ago, Hancock said:

Thats just bloody ridiculous, it was created with oil money and if Norway as a nation stopped producing they'd go back to being Eskimos.

Are they going to FIRE using the income from the wealth fund? (FIRE and igloos.... ooopsss!)

[Castlevania]

38 minutes ago, geordie_lurch said:

It's far from over IMHO - the systemic shocks and risks are only really just getting started as the people buying GME aren't selling till it hits $1000 at least so other stocks are going to be sold to cover

It’s today’s option expiry where it will get interesting and does create a catch 22 situation. If enough people take delivery it could lead to a scramble for shares to deliver, but then on Monday you’ll have a load of shares that you’d probably want to sell. Conversely if people cash settle the option dealers will have a load of shares that they’d been using to hedge to dump. Could go either way.

[Castlevania]

9 minutes ago, Hancock said:

Thats just bloody ridiculous, it was created with oil money and if Norway as a nation stopped producing they'd go back to being Eskimos.

Depends if their own oil and gas reserves run out. There’s wrong way risk in being exposed to both their own resources and also owning other oil and gas stocks. Then again if their own reserves run out - you’d want exposure.

I think they did things the wrong way around. They should never have bought any oil and gas stocks until their own reserves start running down I.e. now would be a good time to start buying.

[DoINeedOne]

16 minutes ago, Hancock said:

Thats just bloody ridiculous, it was created with oil money and if Norway as a nation stopped producing they'd go back to being Eskimos.

Its all weird im i getting this mixed up the countries wealth fund dumps oil (sending the message we are green don't hate us)

But....

Norway awarded 61 offshore exploration blocks to 30 oil firms in its latest pre-defined areas (APA) licensing round as it seeks to find more resources close to existing fields, Energy Minister Tina Bru said on Tuesday.

Norway, which began to extract oil and gas from its offshore continental shelf 50 years ago, believes it has still only pumped about half of its available resources.

Firms that won stakes in the licences included Equinor, Shell, Aker BP, ConocoPhillips, Total, Lundin Energy and Eni’s Vaar Energi

[Harley]

1 hour ago, Heart's Ease said:

!

Added a scrappy paste of the article.

Norway Wealth Fund Dumps Oil Stocks Amid $10 Billion Loss

By 

Lars Erik Taraldsen

, 

29 January 2021, 05:00 GMT

 

Photographer: Andrey Rudakov/Bloomberg

Norway’s sovereign wealth fund has sold its entire portfolio of companies focused on oil exploration and production, marking a major step away from fossil fuels for the investing giant.

 

 

The portfolio, worth about $6 billion in 2019, was fully exited by the end of last year, Trond Grande, the fund’s deputy chief executive, said by phone on Thursday. The move completes a years-long process to reduce the giant investor’s exposure to a sector that has defined Norway’s economy for the better part of half a century.

 

 

Trond Grande

Photographer: Odin Jaeger/Bloomberg

Grande spoke after the fund revealed a roughly $10 billion loss on oil and gas holdings in 2020 that had been valued at over $40 billion at the start of the year. The fund still holds integrated oil companies, with Royal Dutch Shell Plc its seventh largest equity investment when it last disclosed its holdings at the start of last year.

 

 

 

The fund declined to comment on the size of the oil exploration and production portfolio.

 

 

Overall, 2020 was one of the investor’s best years ever, with the total portfolio generating $123 billion in returns, buoyed in particular by its holdings of tech stocks.

 

Read: Norway Wealth Fund CEO Says This Market Can’t Continue Forever

Norway’s wealth fund, the world’s biggest, started turning its back on oil and gas more than three years ago. The intention back then was to diversify away from an industry to which Norway’s economy was heavily exposed, with a view to addressing a key financial risk.

But the fund’s new CEO, Nicolai Tangen, has now made sustainable investing an explicit focus of his strategy, and says all portfolio managers who work for the fund need to operate with that in mind.

Renaissance Man

The 54-year-old former hedge fund manager, who’s also a trained chef with degrees in art history and social psychology, says his expectations around ESG skills extend to the external managers, who now oversee about $60 billion of the fund’s total assets.

 

Tangen needs to operate within a complex governance structure that includes an ethics council, as well as Norway’s central bank, government and parliament. So there are limits to how much he can change. But he says a key contribution the fund can make to ethical investing, without needing to change any mandates, is by digging a lot deeper into how companies actually run their businesses.

“On the forensic side, that is where we can add value,” he said during an interview with Bloomberg Television on Thursday. “We do ESG, risk-based assets, and we have done a range of those over the last few years.”

 

 

 

Tangen has also assigned about 10 asset managers to hunt down investment opportunities in renewable infrastructure. The fund, which the CEO says has yet to invest a single cent in the area, wants the portfolio to eventually reach about 1% of the total $1.3 trillion fund. Tangen has already admitted that might prove hard, with demand for renewable infrastructure assets driving up prices.

“We’re working relentlessly to get something under our belts here, and we hope that will happen this year,” he said in an interview. “We’re looking for wind and sun projects in Europe and America.”

 

Back in October, Tangen said “there’s a lot of competition” for the kind of projects the fund would be interested in buying.

 

FFS.  So they have fully exited their portfolio except they still hold integrateds such as Shell and have yet to invest in renewables.  Then add some blah, blah, ESG, blah, blah, chef, blah, blah.  A minute of my life wasted reading that!

PS: Not digging at you @Heart's Easejust the jurno class.  They are so in bed with the finance industry, as they currently are with the government, etc over Covid, etc.  I just watched the IB CEO interview and several other similar ones yesterday - glam girls cutting off some serious people and them and the rest of their cohort pushing a vested narrative.

[Option5]

31 minutes ago, Hancock said:

Thats just bloody ridiculous, it was created with oil money and if Norway as a nation stopped producing they'd go back to being Eskimos.

It's a business decision, the fund is independent of the oil industry and is just looking to make money, they may buy the stocks back later if they think it's a good idea.

[DoINeedOne]

3 minutes ago, Harley said:

FFS.  So they have fully exited their portfolio except they still hold integrateds such as Shell and have yet to invest in renewables.  Then add some blah, blah, ESG, blah, blah.  A minute of my life wasted reading that!

Thats the problem clickbait headlines always assume the worse