Credit deflation and the reflation cycle to come (part 5)

[Transistor Man]

7 hours ago, Axeman123 said:

If industrial heat users switch wholesale to modular reactors this could sustitute for a fair bit of Nat Gas. 

One problem is most of the modular reactors being proposed now are small pressurised water reactors - the wet steam produced isn’t very hot (325 deg C). It’s too low grade for many/ most industrial processes.

if you look back at the Gen IV reactor proposals from 2001, most designs were targeting industrial heat applications, but needed “new” reactor designs to do this, like the (very) high temperature reactor.

Steels and super alloys have made progress - enabling the steam conditions in a modern coal plant (600 deg C, 250 bar) - but they aren’t making it into these SMRs, which are all small, conventional PWRs.

[Kiwibobby]

2 hours ago, JMD said:

Tbf the thread prefers to be professionally recognised as 'idiot savants'!!

Call me a savant again and we’ll have a problem

[Long time lurking]

 

[Long time lurking]

Nothing to see here move along 

 

[Loki]

7 hours ago, ThoughtCriminal said:

She asked where I was getting all these ideas from and by the time I'd explained.........well she'd decided we were probably on to something but that we were all autistic spastics. 🤷😂

With clarity of perception like that she should be picking stocks for me

[CannonFodder]

8 hours ago, ThoughtCriminal said:

She asked where I was getting all these ideas from and by the time I'd explained.........well she'd decided we were probably on to something but that we were all autistic spastics. 🤷😂

Another option would be 10% in gold jewellery close to spot price.

[jamtomorrow]

55 minutes ago, Long time lurking said:

Nothing to see here move along 

 

"Temporarily" 

So when every formerly private bank is effectively a branch of the Fed, it'll be a straight-up choice between state-controlled money in the state-controlled bank (may or may not be a CBDC by that point), or self-custodied private money in the form of Bitcoin or whatever gold @Errol can fit where the sun don't shine.

I suppose they'll try and prohibit the latter, but we all know how prohibitions work out.

Edited March 21, 2023 by jamtomorrow

[Errol]

Uk borrowing in February the highest since records began.

[DurhamBorn]

27 minutes ago, Errol said:

Uk borrowing in February the highest since records began.

All before bennies and pensions go up 10% etc in April and most state workers by 5%.We would be in a hugely different place if Blair and Brown had never existed.Its simplistic,but most of the UKs probems come from mass third world immigration and in work bennies,both related.If tax credits had never been introduced and housing benefit very limited we would be in ok shape.Bennies and the expansion of the state is what funded all the lefties to take over unis,schools,civil service,quango's etc.As imports cost more and more as our currency sinks we are going to see the mess more and more.

[CannonFodder]

I remember when Switzerland was considered a serious financial haven and a serious country

World is changing

 

 

 

 

[ThoughtCriminal]

16 minutes ago, CannonFodder said:

I remember when Switzerland was considered a serious financial haven and a serious country

World is changing

 

 

 

 

Yup

 

Who in their right mind would now view them as a safe haven?

[moneyscam]

18 minutes ago, CannonFodder said:

I remember when Switzerland was considered a serious financial haven and a serious country

World is changing

 

 

 

 

So did I and I lived there for 7 years! With their action on sanctions as well they have damaged their reputation albeit not fatally.

In defence of Switzerland it is also easy to get carried away and equate its 2 and now 1 global systemic bank  with the entire Swiss banking sector. Unlike the UK, Switzerland has a much more fragmented banking sector with 24 cantonal banks, the post office and another 240 banks of small to medium size most of which do plain vanilla retail / commercial banking and wealth management. They're not playing in the casino sector of international finance and now UBS is its only significant international bank. Some of its cantonal banks do use derivatives for interest rate management but they are a fraction of CS/JPM/Citi etc. So overall its banking sector is still safe.

Whilst the loss of CS is no doubt embarrassing the Swiss have managed to draw a line under the crisis with the shotgun marriage and the SNB giving an implicit guarantee of unlimited liquidity to the now larger UBS. UBS will benefit longer term once it has swallowed the good of CS and disposed of the bad whilst the govt and central bank back it up. Unlike CS, after GFC 2008 UBS reduced its risky investment bank side dramatically and concentrated on wealth management and is not as risky as CS was.

In the short term this does damage CHF but I don't think its fundamental safe haven status is over either. As they've managed IMO to cap off the risk to Switzerland now, no doubt the next bank to have trouble will be in US or Europe and the CHF safe haven status will reassert itself sooner or later.

[Plan-b]

At this rate systemic collapse might come sooner than anticipated...

UK Strikes To Cause A 'Tsunami' Of Unrest For North Sea Oil And Gas

Dozens of oil and gas platforms in the UK North Sea could come to a standstill in the coming weeks after 1,400 offshore workers at five contractor companies have voted to initiate strikes to demand better pay and working conditions, Unite the union said on Monday.

The industrial action is expected to hit platforms of major companies operating on the UK Continental Shelf including BP, Shell, TotalEnergies, CNRI, EnQuest, Harbour Energy, and Ithaca Energy, the union said in a statement.

https://oilprice.com/Latest-Energy-News/World-News/UK-Strikes-To-Cause-A-Tsunami-Of-Unrest-For-North-Sea-Oil-And-Gas.html

 

[MrXxxx]

20 minutes ago, moneyscam said:

So did I and I lived there for 7 years! With their action on sanctions as well they have damaged their reputation albeit not fatally.

In defence of Switzerland it is also easy to get carried away and equate its 2 and now 1 global systemic bank  with the entire Swiss banking sector. Unlike the UK, Switzerland has a much more fragmented banking sector with 24 cantonal banks, the post office and another 240 banks of small to medium size most of which do plain vanilla retail / commercial banking and wealth management. They're not playing in the casino sector of international finance and now UBS is its only significant international bank. Some of its cantonal banks do use derivatives for interest rate management but they are a fraction of CS/JPM/Citi etc. So overall its banking sector is still safe.

Whilst the loss of CS is no doubt embarrassing the Swiss have managed to draw a line under the crisis with the shotgun marriage and the SNB giving an implicit guarantee of unlimited liquidity to the now larger UBS. UBS will benefit longer term once it has swallowed the good of CS and disposed of the bad whilst the govt and central bank back it up. Unlike CS, after GFC 2008 UBS reduced its risky investment bank side dramatically and concentrated on wealth management and is not as risky as CS was.

In the short term this does damage CHF but I don't think its fundamental safe haven status is over either. As they've managed IMO to cap off the risk to Switzerland now, no doubt the next bank to have trouble will be in US or Europe and the CHF safe haven status will reassert itself sooner or later.

So basically they have [or by circumstances have been forced to] accepted a little short-term pain [financially] for the long-term gain of stability in their banking sector?...contrast this to all the 'Kicking the can down the road' approach of other and their future should look a lot brighter.

[moneyscam]

13 minutes ago, MrXxxx said:

So basically they have [or by circumstances have been forced to] accepted a little short-term pain [financially] for the long-term gain of stability in their banking sector?...contrast this to all the 'Kicking the can down the road' approach of other and their future should look a lot brighter.

Yes essentially. You can trace this back to GFC 2008 where both CS and UBS almost took Switzerland down. Their combined balance sheets were 3-4x Swiss GDP. The Swiss govt and FINMA (Swiss FCA) forced them to dramatically deleverage and encouraged them to de-risk from investment banking. UBS got the message and adapted, CS only did so partially and this proved fatal as a result as it was its IB division which took it down.

You could argue Swiss govt would have preferred for both of them to die in 2008 but couldn't afford it. Now the remaining UBS is fully tamed and quasi nationalised, CS and its dodgy IB is gone (but their wealth and retail/corporate businesses retained in UBS), it didn't cost them much and the major risk to their economy from the banking sector is gone.

Edited March 21, 2023 by moneyscam

[MrXxxx]

3 minutes ago, moneyscam said:

Yes essentially. You can trace this back to GFC 2008 where both CS and UBS almost took Switzerland down. Their combined balance sheets were 3-4x Swiss GDP. The Swiss govt and FINMA (Swiss FCA) forced them to dramatically deleverage and encouraged them to de-risk from investment banking. UBS got the message and adapted, CS only did so partially and this proved fatal as a result as it was its IB division which took it down.

You could argue Swiss govt would have preferred for both of them to die in 2008 but couldn't afford it. Now the remaining UBS is fully tamed and quasi nationalised, CS and its dodgy IB is gone (but their wealth and retail/corporate businesses retained in UBS) and it didn't cost them much and the major risk to their economy from the banking sector is gone.

So the Swiss government [or the Swiss people] have had the 'courage'/fortitude to do the right thing....I'm not sure if I am projecting a stereotype here, but the Swiss people/nation [and their behaviour] appear to have a societal maturity that supports a stronger [happier?] collective society rather than a weaker individualistic one.....be  interesting to know your viewpoint [or others] @moneyscam as someone who has lived there, rather than just visited like myself.

[moneyscam]

3 minutes ago, MrXxxx said:

So the Swiss government [or the Swiss people] have had the 'courage'/fortitude to do the right thing....I'm not sure if I am projecting a stereotype here, but the Swiss people/nation [and their behaviour] appear to have a societal maturity that supports a stronger [happier?] collective society rather than a weaker individualistic one.....be  interesting to know your viewpoint [or others] @moneyscam as someone who has lived there, rather than just visited like myself.

Don't want to veer too much off topic but briefly I would describe it as a society that protects individual freedoms with a politically weak federal centre and power delegated to cantonal level with the people able to check state power with binding referenda and a strong rule of law.

It, as you have noticed when you have visited, simply just works all together and is balanced appropriately. When needed, as with CS, the central powers that couldn't be handled properly at cantonal level i.e SNB, FINMA step up, do their job quietly and then fade back into the background until needed again. 

It is generally a more mature society and was amongst the most pleasant places I've lived.

[Noallegiance]

I'll just leave this here from LinkedIn.....

[Sidd]

12 hours ago, harp said:

Anyone got First Majestic? Not looking good for them.

 

I do, its already down 16% pre market...

 

@kibuc whats your take on this? Cut any losses and sell now?

[Kiwibobby]

1 hour ago, moneyscam said:

In the short term this does damage CHF but I don't think its fundamental safe haven status is over either. As they've managed IMO to cap off the risk to Switzerland now, no doubt the next bank to have trouble will be in US or Europe and the CHF safe haven status will reassert itself sooner or later.

I disagree.  Switzerland, HK, and sing attracted billions in wealth because the rich believed their money was safe.  Safe from other gvts, safe from home country courts, angry ex wives, etc. billions n billions over the years.

now hk fucked it when the CCP made it clear they ruled the streets, with the rule of law becoming the rule of beijing in about 2011-12-13ish.  Money started to leave.  Switzerland fucked it when they rolled over to the US on tax evasion - after 500 years of telling other gvts to fuck off, the swiss caved.  I think that was about 2014-15?  The recent sanctions and now the CS law breaking to keep the globalists happy are the latest flashing light that the rule of law on private money ownership is dead.  I expect the outflows have accelerated.  Singapore is still pretty good, and I would guess their bankers are going to do very well now.

[MrXxxx]

28 minutes ago, Noallegiance said:

I'll just leave this here from LinkedIn.....

£29pcm for 'Chav speak', bargain!...where do I sign?

[Noallegiance]

4 minutes ago, MrXxxx said:

£29pcm for 'Chav speak', bargain!...where do I sign?

Good innit?!

[ThoughtCriminal]

2 hours ago, moneyscam said:

So did I and I lived there for 7 years! With their action on sanctions as well they have damaged their reputation albeit not fatally.

In defence of Switzerland it is also easy to get carried away and equate its 2 and now 1 global systemic bank  with the entire Swiss banking sector. Unlike the UK, Switzerland has a much more fragmented banking sector with 24 cantonal banks, the post office and another 240 banks of small to medium size most of which do plain vanilla retail / commercial banking and wealth management. They're not playing in the casino sector of international finance and now UBS is its only significant international bank. Some of its cantonal banks do use derivatives for interest rate management but they are a fraction of CS/JPM/Citi etc. So overall its banking sector is still safe.

Whilst the loss of CS is no doubt embarrassing the Swiss have managed to draw a line under the crisis with the shotgun marriage and the SNB giving an implicit guarantee of unlimited liquidity to the now larger UBS. UBS will benefit longer term once it has swallowed the good of CS and disposed of the bad whilst the govt and central bank back it up. Unlike CS, after GFC 2008 UBS reduced its risky investment bank side dramatically and concentrated on wealth management and is not as risky as CS was.

In the short term this does damage CHF but I don't think its fundamental safe haven status is over either. As they've managed IMO to cap off the risk to Switzerland now, no doubt the next bank to have trouble will be in US or Europe and the CHF safe haven status will reassert itself sooner or later.

I think the Russia decision alone was enough to be fatal, but this is the icing on the cake.

 

We'll see how much international money they attract going forward of course.

[MrXxxx]

3 minutes ago, Noallegiance said:

Good innit?!

Blindin bru, blindin! :-)))

[kibuc]

1 hour ago, Sidd said:

I do, its already down 16% pre market...

 

@kibuc whats your take on this? Cut any losses and sell now?

Bold move asking for my opinion. Have you seen my portfolio's performance?

Mark (of IKN's fame) summarized the purchase of Jerritt Canyon recently and the numbers are absolutely staggering:

https://iknnews.com/first-majestic-ag-fr-to-and-the-price-it-has-paid-for-jerritt-canyon/

TL;DR: First Majestic's losses on that transaction so far amount to almost half of the entire market cap of the company.

However, the past is in the past and we try to look into the future. Two main questions are:

1. How much of that loss has been already reflected in the share price.

2. How will this stoppage affect future cashflow.

Answer to (1) is way too complex for me to get anywhere near correct. On the face of it, FM should have tanked way, way lower already, I mean slap another -20% easily (on top of the forecasted -15% to -20% at today's open). However, FM is not your usual silver stock - it has near-cult status among retail investors and it's usualy one of the main positions of many mintwit "gurus" which basically allows it to do a Tesla and detach its share price from the underlying financial and operational reality. As poor as I am with evaluating financials, my incompetence in that area pales in comparison to how unbelievably awful I am at understanding people and predicting their behaviour. It might very well be that retail will buy into any dumping from insititutional investors and the share price will more or less survive. Then again, it may not.

(2) is a bit easier to figure out - opex loses should now cease as mining operations are stopped, and the processing of stockpiles that will still continue for the next few months is much less cost-intensive (after all, digging up the dirt is the most expensive part of the process). That being said, both the accounting losses of depreciacion and amortization should continue, and the very real cost of capex spending should also continue in some capacity, as FM plans to perform optimization works in and around the mine. , even with mining on hold, this thing will most likely continue to be a money pit, albeit a smaller one.

I'm not a shareholder and have no plans to start a position, over 2.5bil CAD market cap is way outside my range. TBH, if I wanted to hold anything of this size, I'd probably just buy the index - I appreciate SIL & SILJ are unavailable in UK but GDX and (to an even larger extent) GDXJ also hold some silver miners, including PAAS, FM, Endeavour, MAG and many other usual suspects.

Edited March 21, 2023 by kibuc