Credit deflation and the reflation cycle to come (part 3)

[Democorruptcy]

7 minutes ago, moneyscam said:

Below a longer term chart of FRA-OIS spread. We are no where near historical SHTF levels yet but bears keeping an eye on.

 

Yes, it was one of those headlines to make you get the popcorn but after reading more detail, it would have been disappointing if you had bought some. Blip minor. Keep us informed, I'm not bookmarking a website with Chinese characters.

[HousePriceMania]

Shows you how quickly our investments can turn to shit if the establishment decree only they can have petrol.

 

[Democorruptcy]

Another one they have slipped out today (they like Friday) is the DMO's Business Plan for 2022/2023

Quote

 

5.3 Planning Uncertainties

17. In view of the size and scale of the debt and cash management remits, and evolving market conditions, the DMO will particularly need to retain the flexibility and capability to prioritise and to adapt quickly to changing conditions in the year ahead.

 

I think we would agree with the above?

I've emailed them and suggested instead of paying 2.46% on a 10 Year Gilt, the governbankment at least pays the base rate at NS&I, then they can issue less Gilts. You don't pay an increasing payday loan rate if you can get it cheaper elsewhere?

[JMD]

6 hours ago, Loki said:

That's near enough 100% increase needed on the NASDAQ 

Hmm, 'Sounds like you can't handle the truth!!!' (as Jacko might say)

[DoINeedOne]

Makes me want buy more miners, That kidney is still for sale anyone....

[Pip321]

54 minutes ago, DurhamBorn said:

Maybe the market expects governments to tax all the profits so they can keep high prices,get the tax for themselves,kill the industry longer term and force everyone onto a bus if they cant afford an EV.

I think that could be the plan.

At the end of the day gas and oil are a finite resource so why should we waste it on the peasants when we need it for industry and the private jets. Indeed I can see a time when some countries are so wealthy in energy supplies v the rest of the world it no longer becomes a commodity to sell but a commodity to use and for that country to produce things that they need.....which is why I find the US thinking the Middle East will help out the West almost balmy. 

Its taken me a while to get my head round some things....Bitcoin being a currency for example. I now see that and an example where we could enter a world (maybe a few decades away) where the true currency are shares in businesses and actual commodities ie assets

Anyhoo...on that note I decide my first Rio ladder was hit today so I bought 200 @ 5171. That probably means they will be sub 5000 by the end of next week.  🤦🏻‍♂️

[GoneDark]

48 minutes ago, HousePriceMania said:

Exxon Mobil Corp

86.38 USD−5.01 (5.48%)today

Not advice because I'm a clueless moron, but I guess i might be a lucky moron as I sold all my oil shares, about 10ks worth, yesterday.

I just see demand destruction ahead and a slowdown in everything. I see fewer cars on the road outside of regular work hours, everything looks bad to me at the moment and I think that the money that some saved during covid, is now starting to run out.

Also the industry appears to be hated by everyone, the fucking idiots,  for being greedy and waaaaa, oil bad, wind wind wind... stupid morons.

[Lightscribe]

1 hour ago, DurhamBorn said:

Maybe the market expects governments to tax all the profits so they can keep high prices,get the tax for themselves,kill the industry longer term and force everyone onto a bus if they cant afford an EV.

Yup pretty much this. That’s why stagecoach would have been a winner at this stage. Right sector, wrong time of how the cycle hit. Like you said before I think these sectors are going to be swiped from beneath our feet just as they come into their own.

You will be forced to invest in a 50% threshold of green bonds, and diversity support/kickstarter funds and be happy. 

 

 

[Democorruptcy]

26 minutes ago, Lightscribe said:

Yup pretty much this. That’s why stagecoach would have been a winner at this stage. Right sector, wrong time of how the cycle hit. Like you said before I think these sectors are going to be swiped from beneath our feet just as they come into their own.

You will be forced to invest in a 50% threshold of green bonds, and diversity support/kickstarter funds and be happy. 

 

 

That DMO Business Plan included them being thrilled about ripping NS&I customers off with ridiculously low fixed rates, when they knew the base rate was going up.

Quote

£0.3billion raised through sales of retail Green Savings Bonds by NS&I.

 

[Starsend]

7 hours ago, ThoughtCriminal said:

Very interesting thread and video interview.

 

Basically, green energy transition isn't happening. No ifs, no buts, no maybes. It's impossible.

Same conclusion I've come to, not enough materials, won't happen on a big enough scale to replace fossil fuels. There will be a nuclear renaissance. 

[snaga]

2 hours ago, BWW said:

Why are oilies continuing to crash the way they are the last few days. Main story for weeks - huge energy crisis and high oil prices with prospect of a horrendous winter of shortages. Nothing changed with that. Other story - an inadequate interest rate hike may cause a recession and that means oilies share prices should crash.

Seems to me the latter would usually have an effect for a day or two but traders would then look at the long term and we'd be back to stability / towards where we were.

Biden going to SA to beg the Arabs to produce more?

Worries that China will go in to another lockdown?

Worries that a big recession will reduce demand?

, is this a buying opportunity?

[Jesus Wept]

2 hours ago, BWW said:

Why are oilies continuing to crash the way they are the last few days……

 

2 hours ago, DurhamBorn said:

Maybe the market expects governments to tax all the profits so they can keep high prices,get the tax for themselves,kill the industry longer term and force everyone onto a bus if they cant afford an EV.

1 hour ago, GoneDark said:

I just see demand destruction ahead and a slowdown in everything. I see fewer cars on the road outside of regular work hours, everything looks bad to me at the moment and I think that the money that some saved during covid, is now starting to run out……

Just come in and seen the oilies have indeed shit the bed…. along with the ‘big miners’

Like @GoneDark I see the risk of a big crisis coming - a recession / depression ‘a la’ 2007-09.

Massive demand destruction until 2024…. history shows BP, Shell etc can drop 50% when this happens. 

[Starsend]

5 hours ago, Eventually Right said:

Are you tempted by the streamers/royalty cos at all DB?

I listened to a Lyn Alden podcast the other day, and something she said struck a chord-to paraphrase: "if you're bullish precious metals, and bearish energy, look at the miners, if you're bullish on energy look at the royalty companies"

If silver (and gold) go nuts, then I figure energy, or any other costs, won't matter-silver at $40 or $50 will overpower all that, and make miners multi-bag. But if energy/skilled labour costs etc also balloon, margins won't expand by as much as expected.  Plus, miners have additional risks (accidents/labour strikes/permitting problems/revised resource estimates/potential windfall taxes etc).

When I look at Wheaton's share price performance over the last 5 years (96% up) compared to some of the mining etfs (GDXJ 10%, SILJ -13%, SIL -17%) it does make me wonder whether the risk/reward is better in the royalty cos.  But I guess the other way to look at the figures above would be, "If we do get a bull run in PMs, and money finally starts to move to the sector, are the miners so beaten down that they go parabolic?"

I keep a chunk of my PM allocation in the royalty companies for exactly those reasons, to balance out risk a bit with the juniors. I hold Wheaton, Royal Gold and Sandstorm.

[Starsend]

1 hour ago, DurhamBorn said:

Maybe the market expects governments to tax all the profits so they can keep high prices,get the tax for themselves,kill the industry longer term and force everyone onto a bus if they cant afford an EV.

Shit, we'll all be bus wankers.

[Bobthebuilder]

I notice crude oil has fallen a similar percentage to the majors today, nat gas even more. I have no idea what this means, but it intrigues me some what

[BWW]

Just now, DurhamBorn said:

Maybe the market expects governments to tax all the profits so they can keep high prices,get the tax for themselves,kill the industry longer term and force everyone onto a bus if they cant afford an EV.

I think the "windfall tax" involved a behind closed doors deal between ministers and BP/Shell where the UK investments deduction will mean they don't actually pay very much at all if anything. What was not said at announcement time is that Rishi will pay for the handout [in part] with increased VAT and duty receipts which are a % of energy/fuel prices. The presentation of it as a windfall tax was just to shut Liebore and the media up about it.

And supporting that view is the fact there was no reaction  in SP when that windfall tax was announced.

The scenario you suggest of 100% tax or any sort of draconian idiocy from our gov will surely cause the big oilies to move head office out of the UK pronto. [ROYAL DUTCH as was] Shell already left Holland. That would mean loss of what our gov currently get from them and I'm sure that was pointed out. They are dumb as but I don't believe they're dumb enough to ignore that warning.

My village [a mile walk on a partly unsafe road] has one bus a week. Not super unusual.

[23rdian]

3 hours ago, Democorruptcy said:

Taking a windfall tax off the oil sector and then making sure people who can't really afford to switch from ICE to Electric cars get easy credit. Some people have no shame!

 

And that's in addition to taking a double tax at the pumps.

[Lightscribe]

18 minutes ago, Starsend said:

Shit, we'll all be bus wankers.

Yes you will and you’ll be happy

 

[Lightscribe]

26 minutes ago, Bobthebuilder said:

I notice crude oil has fallen a similar percentage to the majors today, nat gas even more. I have no idea what this means, but it intrigues me some what

It means the markets are pricing in demand destruction through recession/stagflation, at the same time the plebs freeze and draw back on energy use all the whilst the governments inflate their balance sheets away.

[DurhamBorn]

36 minutes ago, Starsend said:

Shit, we'll all be bus wankers.

"my Vauxhall Viva's covered in rust,but you cant fuck your bird on the 29 bus"

The Macc Lads.

[Jesus Wept]

How much ‘value’ has been wiped off global stock markets so far in 2022  ?

ANSWER :    $24 TRILLION DOLLARS !! 

$ 12 TRILLION alone was from US equities. Vast proportion Mega Cap Tech stocks. 

The chart below shows global equities yearly  gain / loss.

Each bar is a year starting 2004.

You can see the $28 trillion wiped back in 2008 in the GFC.

(Granted we are only 6 months in for 2022 so could get better…. or worse…. )

[Lightscribe]

15 minutes ago, DurhamBorn said:

"my Vauxhall Viva's covered in rust,but you cant fuck your bird on the 29 bus"

The Macc Lads.

Different days. I’m sure I could of given you a run for your money DB, being the incredibly devilish fellow I am.
Still got a tiny bit left however even nowadays as I’m sure you have on your finasteride. 😁 

[ThoughtCriminal]

😂

[MrXxxx]

3 hours ago, DurhamBorn said:

and force everyone onto a bus if they cant afford an EV

You mean the bus/transportation companies that are being 'hoovered' up by overseas interests from the hands on retail investors?

[DurhamBorn]

48 minutes ago, Jesus Wept said:

How much ‘value’ has been wiped off global stock markets so far in 2022  ?

ANSWER :    $24 TRILLION DOLLARS !! 

$ 12 TRILLION alone was from US equities. Vast proportion Mega Cap Tech stocks. 

The chart below shows global equities yearly  gain / loss.

Each bar is a year starting 2004.

You can see the $28 trillion wiped back in 2008 in the GFC.

(Granted we are only 6 months in for 2022 so could get better…. or worse…. )

The difference this time as we predicted is that bonds have gone down with equities,that is whats shocking people,they forgot there is a third,rare cycle,inflationary.