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Stock Market Crash! (merged) Pt. 10

Discussions about the economic and financial ramifications of PEAK OIL

Re: Stock Market Crash! (merged) Pt. 10

Unread postby mousepad » Tue 08 Oct 2019, 11:27:39

shortonoil wrote:
housemouse said
But how? To receive $$ you need to ship goods or services.


How? Investor sell their foreign sovereign bonds, and buy US Treasuries, and other US assets. The US Treasury bond is the only G7 bond that now pays a positive coupon. 2% on a relatively safe 30 year Treasury is better than -0.5% on a German Bund. Money goes where it brings the best return, and that is now the US.


Is that true? Can somebody who understands more than me about all this financial stuff comment on this, please?

If much more was pumped the price would fall until no one would be producing anything. The oil industry is not run as a charity.

I don't understand. If EROEI falls, pumping more will not reduce the price. Pumping more is done to offset the loss of EROEI.

If much more was pumped the price would fall until no one would be producing anything. The oil industry is not run as a charity.

I still don't understand. Didn't you say that there will be less pumping and the cost would fall?
Now you're saying pumping MORE will reduce the price?
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby StarvingLion » Tue 08 Oct 2019, 11:28:51

LOOK AT THIS WORTHLESSS SHIT "SYSTEM" COLLAPSE...hahahahahaha

The "price" of oil collapsing. XOM and EOG collapsing. The Medical "System" is collapsing. Agriculture is collapsing

Egypt is on the brink of total collapse with soon-to-be 100 million RPG toten crazies.

Egypt: children swept up in crackdown on anti-Sisi protests ...

https://www.theguardian.com › world › oct › egypt-children-swept-up-in-c...

8 hours ago - More than 100 children are among thousands of people detained in Egypt in an effort to prevent further protests against the rule of Abdel-Fatah ...

And Cog's response...here it is:

Image
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby StarvingLion » Tue 08 Oct 2019, 11:41:00

HSBC crap bank stock is in free fall...

It was the 7th largest bank in the world by 2018, and the largest in Europe,

Soon it will be worthless...

Deutsche Bank is the 17th largest bank in the world by total assets

DBK is in total collapse mode...Soon it will be worthless.

The Skank of America is failing...Soon it will be worthless.
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby shortonoil » Tue 08 Oct 2019, 11:51:09

"Close To A Standstill": IMF Warns Global Growth Will Be Cut To Lowest Since Lehman

"The global economy is now in a synchronized slowdown," she said, noting that the fund estimates that 90% of of the world is seeing slower growth.


What it failed to mention is that the real reason for the economic slowdown has nothing to do with Trump however, and everything to do with China's untenable debt load and Beijing's resulting inability to boost the credit impulse which on every prior occasions succeeded in pushing the world away from the verge of recession. Well, not this time.

https://www.zerohedge.com/health/close- ... est-lehman

The world's economy is dying of energy starvation, and they still believe it can all be fixed by shuffling around little pieces of papers? It must be true; it has fixed everything so well so far! The problem with relying on miracles is that they are so unreliable.
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby StarvingLion » Tue 08 Oct 2019, 11:54:47

The Ford Motor Company is BANKRUPT and so is COG...
General Electric is BANKRUPT and so is COG...

https://investorplace.com/2019/10/dont- ... end-yield/

Ford (NYSE:F) stock sports a high dividend yield of 6.97% with its quarterly 60 cent dividend. But this dividend is not secure. I argued in my last article that Ford cannot afford that dividend.

Ford (F)

Very little has changed since then. Ford will report its earnings on Oct. 23, so investors will be very attentive not only to Ford’s dividend payments but also to its free cash flow (FCF). FCF is the source of funds that pays for the dividends.

Top GE analyst Tusa: Pension freeze sign of 'more cuts' coming

https://www.cnbc.com › 2019/10/07 › top-ge-analyst-tusa-pension-freeze-sig...
22 hours ago - General Electric’s announcement that it is freezing pension plans for about 20,000 U.S. employees is part of the company’s “next steps in the balance sheet unwind,” J.P. Morgan analyst Stephen Tusa wrote Monday. ... “Ultimately, we see more cuts to consensus and additional resources ...
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby shortonoil » Tue 08 Oct 2019, 12:05:39

Image

Nice chicken pic there Starved.

"The global economy is now in a synchronized slowdown," she said, noting that the fund estimates that 90% of of the world is seeing slower growth.

https://www.zerohedge.com/health/close- ... est-lehman

The whole world is shutting down from energy starvation, and there won't be a chicken in every pot.
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby StarvingLion » Tue 08 Oct 2019, 12:17:25

The trigger for my Oil Apocalypse thesis is a MASSIVE increase in oil decline rate from frantic desperate reckless EOR. Exxon's math is garbage. My "math" says Steel Bolt to the Temple of the Head.

https://oilprice.com/Energy/Energy-Gene ... ction.html

Therefore, the Chinese government has been pushing its state-controlled energy companies to increase production from domestic oil fields to reduce dependence.

Exxon's Math Calls For Overall Global Oil Decline Rate of ~7 ...

www.safgroup.ca › research › articles › exxons-math-calls-for-overall-glo...

Jun 20, 2019 - And what is eye opening is Exxon's estimated overall global oil decline rate, which is way higher than any we can ever remember seeing.
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby StarvingLion » Tue 08 Oct 2019, 12:23:16

The medical device manufacturers are in total collapse mode today. Boston Scientific down 6%. Waters corp down 7%.

The only "medical" device required for The Oil Apocalypse is:

A Turn Me Off Device

after the pseudos realize that their Lifeboat called The EV is full of holes and they're screwed.
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby Outcast_Searcher » Tue 08 Oct 2019, 12:27:30

mousepad wrote:
shortonoil wrote:
housemouse said
But how? To receive $$ you need to ship goods or services.


How? Investor sell their foreign sovereign bonds, and buy US Treasuries, and other US assets. The US Treasury bond is the only G7 bond that now pays a positive coupon. 2% on a relatively safe 30 year Treasury is better than -0.5% on a German Bund. Money goes where it brings the best return, and that is now the US.


Is that true? Can somebody who understands more than me about all this financial stuff comment on this, please?

mousepad, I've been investing for nearly 40 years now, and was raised in a household where things like frugality, investing, spending wisely, etc. were drilled into our heads by two depression era parents. I've read a pretty fair amount of books on investing.

I'm NOT in the financial industry and have not taken the tests to become a CFA (Certified Financial Analyst, etc., though in the 80's, I did read the book stock brokers read to prepare to pass the required test for that position.)

So I'd say I know enough about liquid mainstream markets enough to comment, re your first question above.

...

I'd say he's partly right. Which is true of many of the things he says on this site.

For absolute yield, no question, the over 2% yield advantage of the 30 year US Bond against many foreign long term bonds such as various western European, Scandanavian, etc. with negative yields will look attractive to many. Especially since (certain Trump idiotic comments aside), the US has always been really good about paying principal and interest on their treasury paper.

On the last sentence, he's wrong. Leaving out the concept of risk adjustment is nonsensical. People aren't accepting negative yields in places like Switzerland because they're all just stupid. When investing, it's ALWAYS a trade-off between (perceived) risk, and return. The more return an investor is seeking, the more risk they must take).

For one obvious example: People have to accept plenty of short term volatility (i.e. risk) to invest in the US stock market and earn a long term real (after inflation) return of over 7%, so many choose to leave much of their money in nice "safe" bank accounts and have no volatility -- and earn a real return much closer to 0%, especially after taxes on the interest. After several decades, the people in the stock market had MUCH better returns, but they had to leave the money alone and endure all those decades of a stock market that can move 50% in any given year.

Money, in a free and liquid market, goes where investors BELIEVE they will receive the best RISK ADJUSTED return. So, ALL OTHER THINGS BEING EQUAL, the 2%ish yield on the US 30 year bond looks more attractive than the negative German Bund yields.

But they're not actually completely equal. DIfferent countries -- different risk profiles -- and the bond markets are smarter at ferreting out all the risks than either short or me or any other individual investor. Of course, if investors overall believed one piece of such paper were much better than the other, they would arbitrage (trade to get the better overall return) away the difference. So shorty claiming the best yield "wins" is just NONSENSE.

(For example, there is a reason that yields get HUGE on currencies that are in trouble. Happened in Greece a while back, when it was at default risk. Happened in Puerto Rico a while back, and they're in total chaos with huge defaults happening. Zimbabwe hyperinflation completely destroyed their currency in the 00's. Taking the "high" yield there would have led to total losses. Argentina has a long history of hyperinflation risk, and it looks like they're getting close to that again.)

Things like relative bond scarcity, confidence in the underlying currency, issuing country's future inflation rate, economy, etc. influence what yield people are willing to accept.

...

Do your own research / checking before making investment decisions. There are LOTS of opinions (including short's) on the internet. Given the low bar (being able to type) to put one's opinions on the internet, healthy skepticism about ANYTHING you read on the internet is warranted. Including anything I say, of course.

I hope this helps a bit.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby StarvingLion » Tue 08 Oct 2019, 12:35:30

I just intercepted Cog's last telephone transmission:

"Hello, is this the Plunge Protection Team. Your services are required again"

OMG, this sham gets more desperate by the day. Not that the Facebook Dullards have noticed. Last night, the young chick at the grocery store asked me:

"Why do you keep coming every night at 8:30PM to buy toilet paper, canned goods, and bottled water?"

They'll be gawking at their tiny screens right to the very end. They still haven't figured out that Facebook currency is worthless.
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby StarvingLion » Tue 08 Oct 2019, 12:44:01

I laugh at the Slow Decline and Collapse is a Process Morons. They'll be staring at their broken gauges in the financial "system", doing analysis, and whatnot just like some gufus in an old Cessna 172 wondering why the engine is sputtering and looking at everything besides the gas gauge showing empty.

I know exactly how this shitshow in this bankrupt computer gaming "society" is going to end. One day, out of the blue, this will appear on all their screens. The grocery stores will immediately close and they'll all starve to death in a month.

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Re: Stock Market Crash! (merged) Pt. 10

Unread postby mousepad » Tue 08 Oct 2019, 12:52:48

Outcast_Searcher wrote:
I'd say he's partly right. Which is true of many of the things he says on this site.

For absolute yield, no question, the over 2% yield advantage of the 30 year US Bond against many foreign long term bonds such as various western European, Scandanavian, etc. with negative yields will look attractive to many. Especially since (certain Trump idiotic comments aside), the US has always been really good about paying principal and interest on their treasury paper.



Thank you for the detailed answer Outcast. I appreciate that. However, I have some follow up questions.

If it's true what short claims, and inflow of $$ is enormous, how is that an issue?
Wouldn't the world wide shortage of $$ then simply increase its value? (which would be good for importers, but bad for exporters)
If this inflow is an issue, why is the bond yield not lowered to be inline with europe, for example?
Does this inflow offset the trade deficit, or are trade vs bond two different pairs of shoes that have to be looked at separately?
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby Outcast_Searcher » Tue 08 Oct 2019, 13:25:57

mousepad wrote:
Outcast_Searcher wrote:
I'd say he's partly right. Which is true of many of the things he says on this site.

For absolute yield, no question, the over 2% yield advantage of the 30 year US Bond against many foreign long term bonds such as various western European, Scandanavian, etc. with negative yields will look attractive to many. Especially since (certain Trump idiotic comments aside), the US has always been really good about paying principal and interest on their treasury paper.



Thank you for the detailed answer Outcast. I appreciate that. However, I have some follow up questions.

If it's true what short claims, and inflow of $$ is enormous, how is that an issue?
Wouldn't the world wide shortage of $$ then simply increase its value? (which would be good for importers, but bad for exporters)
If this inflow is an issue, why is the bond yield not lowered to be inline with europe, for example?
Does this inflow offset the trade deficit, or are trade vs bond two different pairs of shoes that have to be looked at separately?

I didn't say anything about the truth (or not) about anything else specific that short said.

The treasury sells the amount of treasury paper it needs to pay the expenses (including the ongoing deficits and interest) of the US. Just because rates are low (or high compared to some other countries) doesn't imply that there are some sort of "massive inflows" of dollars to the US. If people are TRADING US bonds because they're more attractive, then that is good for US bond holders -- not the US treasury.

There's nothing magical about the rates now, and the bond and note markets are the best indicators of supply and demand. If there isn't demand enough for the treasury paper the US needs to sell -- interest rates on US treasuries will rise. It's as simple as that. It's a globally competitive marketplace for capital.

Look, short and his ilk constantly bray that there is economic doom right around the corner for reason X. Facts be damned. Economic logic be damned. And when people correct them with facts and economic logic, they ignore all such input, and bray about the next thing, when their earlier claim re short term calamity is, as usual, proven wrong. This goes on for years and years.

I don't even read much of what short says anymore, as it's not worth my time. So I haven't carefully analyzed whatever statements he's made upthread, beyond thinking for a bit about the specific (first) question you just asked above.

Oh, also, despite the constant braying about how the dollar is doomed, the dollar is trash, hyperinflation is imminent, etc. the DXY (dollar index) looks just fine whether short term, intermediate term, or long term, and inflation remains quite muted. Complaining about both high inflation and low interest rates being "risks" is a complete oxymoron, because where any bidding goes on, buyers of debt WILL factor their perception of future inflation into the interest rate they demand for their money. (In other words, interest rates, including long term interest rates, are highly correlated with investors' perception of future inflation.) And inflation in the short term, tends to be highly correlated with recent inflation.

So I'm not really up to answering all your questions, at least in the short term. It can take a bunch of research to intelligently answer such questions, and I'm not into doing that unless I want to for my own investments. (They're good questions. In my opinion, the answers aren't obvious.)

Overall, the markets are very good at being as "rational" as they can be re looking at all the available information, and placing the best bets they can -- as investors are looking out for their own interests. It's the concept of "wisdom of the crowds".

That should say something about why the folks who constantly claim they know what's about to happen re global or US economics and doom, have terrible track records over time.

Sorry I can't be more helpful -- but NOT pretending I know things I don't and being as honest as I can is, in my mind, being helpful, even if I don't answer your detailed questions.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby mousepad » Tue 08 Oct 2019, 13:45:12

Outcast_Searcher wrote:Sorry I can't be more helpful -- but NOT pretending I know things I don't and being as honest as I can is, in my mind, being helpful, even if I don't answer your detailed questions.


Thank you for your answer.
I understand that short is a tool on practically all fronts.

But I also understand that I lack much in understanding financial issues. That's why I ask. And I rather ask somebody a bit smarter than short :-)
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby shortonoil » Tue 08 Oct 2019, 14:03:57

So shorty claiming the best yield "wins" is just NONSENSE.


OK, OK so the best "risk" adjusted yield wins. Confuse the poor kid some more, why don't you. Now explain to him how a European Union that is on the brink of collapse, or how China's credit impulse going to crap, or Japan's perpetual deflation is a credit risk.

The US Treasury bond is the only G7 bond that now pays a positive coupon. 2% on a relatively safe 30 year Treasury is better than -0.5 on a German Bund. Money goes where it brings the best return, and that is now the US.


See the part that says "relatively safe 30 year Treasury". That means low risk! Got it? Instead of the CFA certification, you should have concentrated on Remedial Reading.

The US is still the cleanest dirty shirt in the laundry, and that is why the money is going there. How long that will continue is an upcoming problem that has no immediate solution. The economy of the entire world is now in decline from energy starvation, and that will eventually being coming to the US. Trying to bash the messenger is not going to effect it one iota! Neither will printing up some more vapor ware. There is a solution, but with the ongoing denial that is in progross we'll be back to the jungle before it can get here!
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby StarvingLion » Tue 08 Oct 2019, 14:07:01

There is a solution


OMG, its Fusion...thats always it....or Solar Cell bottom feeding
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby shortonoil » Tue 08 Oct 2019, 14:52:07

But I also understand that I lack much in understanding financial issues. That's why I ask. And I rather ask somebody a bit smarter than short


You sure didn't pick an up, and coming Steven Hawkins to do the explaining!

The problem we are facing is not a volume problem. Lake Erie has all kinds of spare volume. It is an energy problem. The world burns 5.4 billion tons of petroleum a year to produce the energy it requires to power its civilization (mostly in the transportation sector) That is the same amount of energy that is found in 33 tons of Helium 3. Sort of a cup of water in Lake Erie. Using units of volume gives a completely skewed perspective of petroleum usage, and its problems. After the world cranks to a halt, it will still have lots of volume in Lake Erie. If NASA was using Furlongs Per Forth Night units they would be looking for the Pluto probe in Cincinnati. Using the correct unit is very important especially when it comes to buying fish.

It couldn't get much simpler. Doing a Rain Dance is more complicated!

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Re: Stock Market Crash! (merged) Pt. 10

Unread postby Yoshua » Tue 08 Oct 2019, 14:52:17

The Fed just announced that QE4 is coming. The Fed will expand its balance sheet by buying treasuries from the banks to build up their reserves.

Although JPowell said that this isn't QE. Well... whatever...
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby shortonoil » Tue 08 Oct 2019, 15:36:15

OMG, its Fusion...thats always it....or Solar Cell bottom feeding


Just following the BiG money. It smells like a rabbit trail to a hound dog. You know what is at the end of the trail; if you can get there? This time it will be more wealth than the world has ever, even imagined. As a civilization we will have our own System's Lords. Of course if you don't get up steam early, the rabbit will out run you.

The Fed just announced that QE4 is coming.


How much confetti do they have to invent to prevent a collapse this time? Theoretically they can invent until interest rates reach 0%. The point where money has no future value. It won't make any difference if you are paid today, or next year? Time has been taken out of the equation. In practice it is probably more. So we again become the FED's new guinea pig. Crank it until it breaks. How reassuring!
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Re: Stock Market Crash! (merged) Pt. 10

Unread postby mousepad » Tue 08 Oct 2019, 17:54:42

What I really find puzzling is that we have such low interest rates, yet there's barely any economic growth. Has that ever happened in the past?
Could there be some truth to it, that energy is the limiting factor?
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