Member Info for getafgrip

An obscure and irrelevant thread, but with contributors capable of changing history:

https://www.britannica.com/technology/incandescent-lamp

It is a very timely reminder - another 10 trading days at these prices and the first quarter results will be sealed & should be really good.

Predictions of higher oil prices in the second half of the year are almost unanimous, from analysts to Investment Banks. The supply side still has major issues to contend with. The only caveat for me is the range, depth and length of the banking crisis, which will provide a bumpy economic ride for everyone, because all boats will rise or fall with the tide as they say.

Boyo - I agree that gossip is powerful with social media, but any meaningful or well-informed understanding of the expanding sweep of a nascent banking crisis, or the ramifications of how the oil market is working are outside the orbit of the vast majority of individuals using these platforms.

Personally, I have never been on any social media platform, and in all likelihood I never will be. So I have virtually no idea what social media make of the current economic situation - I can have a stab at guessing the general views on social media based largely on predictability - but joining in to get half a dozen electronic likes just doesn't float my boat. This thread is the nearest I will get to any social media input & even then I have reservations.

A surprising number of US banks have collapsed in recent years. Since 2009 there have been 513 casualties:

https://www.bankrate.com/banking/list-of-failed-banks/

I completely agree that if everyone called & drew their money out of a bank tomorrow morning it would in all probability crash. Certainly my concern is that the liquidity driven banking crisis is just getting started. There is quite a cluster of banks in trouble already, and ominously Governments creating mitigating policies and "solutions" on the hoof has disaster written all over it. Ultimately, no advanced Western Government should allow a run on any of its banks, but this has already happened. At best it will take months to restore confidence in the markets.

Once confidence in the banking sector wobbles significantly, recession will likely follow, & I think this is the shadow being cast over Shell at the moment.

Previous post: Reducing inflation now will likely result in higher unemployment being necessary to ultimately help tame inflation.
Was meant to be: "Reducing interest rates now" will likely result in higher unemployment being necessary to ultimately help tame inflation.

CNN - the next bank to go maybe:

https://edition.cnn.com/2023/03/16/investing/bank-scare-credit-suisse/index.html

The sobering stark realities - the fears over the possible fallout if Credit Suisse curled up its toes are also worth a thought:

Is it too big to fail. Or is it too big to rescue! By the numbers: Credit Suisse had total assets of $574 billion at the end of 2022 — down 37% from $912 billion at the end of 2020. Its asset-management arm supervises another $1.7 trillion in assets

When you consider this in the perspective of Shell having a Market Capitalisation of around £160 billion. What if more than one bank of this size was in trouble? In two years Credit Suisse's assets fell by the value of Shell each year!!! You can see where the jitters are coming from and assess the time it will take to calm the markets and restore confidence.

Boyo - coincidentally I was looking over the EIA data yesterday morning & noted that they forecast Brent at $77 dollars through 2024, which I found reassuring, after you mentioned it had hit this level the previous night - Tuesday, I thought this must be the bottom! It certainly was not..

It is a great time for phrases & I am definitely going to use your reminding words in relation to Brent and the share price - "the tracking has been strong" - very Star Wars in that the "Force will always be with the share price," maybe even though the elastic has been as loose as a tarts knickers at times in recent months, but the relationship remains.

Another great one I saw yesterday related to Credit Suisse & the well worn phrase that a bank was" too big to fail" - an expert had paraphrased this to it being "too big to rescue.." It's interesting because if a Government rescue, or series of them fails, who rescues the Governments - is there a plan B?

An off piste thought is that, what a time it would be to diversify, linking Shell's massive cash flows with a major bank. It would frighten a Government to death and provide reassurance at the same time! Or Wael Sawan could outsource Shell's finance function by buying a bank for £1, but no he wouldn't be able to place any faith in the quality & consistency of the expertise that would then run Shell's finances! Forget that one!

A great opportunity and within a month of going xd as well! Nomad and I might be onto something here. He goes out to the pub at lunchtime & with Brent being linked to real ale consumption, Shell go up in price. I go up to the Scottish Borders every week & the Shell SP invariably goes down.

My biggest concern for the immediate future is really the shadow cast by the burgeoning "bank crisis" in the US & its ramifications. When I got up this morning, the first thing I heard was that Moody's had downgraded the banking sector to negative in the US & named several US banks likely to be caught out in the fallout.

https://www.bbc.co.uk/news/business-64949786

I posted the following on Monday, on a thread that has more clowns & one-trick circus ponies than the average big-top!

The SVB failure is not isolated. The background scenario includes Signature Bank, (the third biggest bank failure in US history), in tandem with the well documented problems at Credit Suisse (the biggest Swiss bank, one of the biggest in Europe & with $1.6 trillion in AUM at the end of 2021). These banks are just the tip of the iceberg. This crisis will run for some time yet, as all significant banks have exposure to the Tech sector & there is evidence that the contagion is quite widely spread already.

Credit Suisse default swaps hit record:

https://www.bloomberg.com/news/articles/2023-03-13/credit-suisse-default-swaps-hit-record-as-svb-failure-hits-banks?leadSource=uverify%20wall

Silvergate Bank (heavily crypto based) in the US curled up its toes on the 8th March 2023:

https://www.bbc.co.uk/news/world-us-canada-64935170

https://www.forbes.com/sites/digital-assets/2023/03/10/broken-banks-put-pressure-on-crypto-market-leaders-end-week-down-10/

First Republic Bank fell 62% on Monday the 13th March, before recovering some ground. So its not just banks beginning with an S that are the problem. Moody's warned it could downgrade First Republic Bank (FRC), Zions (ZION), Western Alliance (WAL), Comerica (CMA), UMB Financial (UMBF) and Intrust Financial.

If the Leviathans of the banking world are hit by the contagion - it seems highly unlikely - but certainly everything is going to be a bit shaky until this is resolved & confidence returns!!!!!!

As blind as your namesake, but completely clueless! You are right in that many simpletons will lose their home, but it will be hugely disappointing for you that I will not lose any of mine!

Reducing interest rates to take the pressure off tight household budgets, is what I would expect from you SW77. That is a the massive oversimplification of your proposed solution to inflationary issues, compounded by your extremely tenuous grip on how economic theory works, and which you demonstrate repeatedly.

Higher interest rate policies are targeted to reduce inflation for the greater general benefit of all, before it becomes more entrenched in the system. Also there is a less cavalier attitude to the money supply element in this. or Quantitative Supply. Very few MP's, or indeed members of the general population have any clue what Quantitative Easing to give its more familiar recent title, actually involves. But it sounds pink, fluffy and harmless to them, so it must be!

The Bank of England has been quantitative tightening' (QT) i.e. reversing QE by selling the assets the Bank purchased previously, and began this process in November 2022.

Inflation has remained stubbornly high as has the high employment level & the Government may well have to increase the level of unemployment substantially to further impact inflation. Obviously this would also detrimentally impact household budgets. Although it is a sensitive area , particularly with an Election looming on the horizon. Reducing inflation now will likely result in higher unemployment being necessary to ultimately help tame inflation.

CNN Business are quite good on this - "US banks sitting on unrealized losses of $620 billion."

https://edition.cnn.com/2023/03/12/investing/stocks-week-ahead/index.html

TikTok only has around 23 million users in the UK, added to 136 million in the US, so perhaps Governments will just wait until TikTok has 8 billion users (the population of the planet) before they are interested in investigating what they might be up to!

With your graph you should have added "Warning - some viewers may find this distressing!"

Silvergate Bank (heavily crypto based) in the US curled up its toes on the 8th March 2023:

https://www.bbc.co.uk/news/world-us-canada-64935170

https://www.forbes.com/sites/digital-assets/2023/03/10/broken-banks-put-pressure-on-crypto-market-leaders-end-week-down-10/

SW77 - is it dawning on you yet that effective regulation might have had a part to play in preventing/redressing this crisis? From a previous post you seem to have noted the general information that indicated Regulators are passing the buck in a typical CYA exercise. But you failed to to see that this is what they were doing!

Credit Suisse default swaps hit record:

https://www.bloomberg.com/news/articles/2023-03-13/credit-suisse-default-swaps-hit-record-as-svb-failure-hits-banks?leadSource=uverify%20wall

A little judicious hedging & a superficial analysis might indicate that this would have papered over the ultimately terminal cracks that manifested themselves at SVB or "perhaps" there was a serious acceleration of the volume of risky loans going sour, fuelling the liquidity crisis.

The SVB failure is not isolated. The background scenario includes Signature Bank, (the third biggest bank failure in US history), in tandem with the well documented problems at Credit Suisse (the biggest Swiss bank, one of the biggest in Europe & with $1.6 trillion in AUM at the end of 2021). These banks are just the tip of the iceberg. This crisis will run for some time yet, as all significant banks have exposure to the Tech sector & there is evidence that the contagion is quite widely spread already.

Apologies repeated link posted!

Forbes view on SVB warning signs:

https://www.forbes.com/sites/mayrarodriguezvalladares/2023/03/11/warning-signals-about-silicon-valley-bank-were-all-around-us/

Trumps expert hand on the tiller, relaxing regulations:

https://www.forbes.com/sites/mayrarodriguezvalladares/2023/03/11/warning-signals-about-silicon-valley-bank-were-all-around-us/

The Fed did not necessarily cause the collapse of SVB by over-tightening interest rates. This is because - as with the Bank of England, the Federal Reserve's stress tests assess whether banks are sufficiently capitalized to absorb losses during stressful or extreme conditions, whilst meeting obligations to creditors and counterparties adequately. The Fed is responsible for implementing the stress tests that determine the general resilience of the US banks.

The primary reason for the failure of SVB is that the Fed stress tests were clearly not fit for purpose. The second is down to the abject inadequacy of the SVB management & directors. It is they who ultimately bear responsibility for the design of the SVB business model & assessment of loan risks etc.

The key questions for the coming week(s) relate to the level/risk of the exposure to Tech lending of the rest of the banking sector & whether the contagion will spread. Or how can Government's contain it & how?

Boyo - you are absolutely right - some significant editing has taken place. Its just one of those websites that throws out a few misleading words and opinions, in the hope that readers can arrange them into meaningful & factually correct sentences for the author!

Although the figures have suddenly been changed for AstraZeneca on your website, in terms of market capitalisation, they conflict dramatically with the Published London Stock Exchange data taken at close of play today:

https://www.londonstockexchange.com/stock/AZN/astrazeneca-plc/company-page

Again taken at close of play today, the following is the London Stock Exchanges market capitalisation for Shell plc:

https://www.londonstockexchange.com/stock/SHEL/shell-plc/company-page

In fairness let's give you 3 x guesses, which company has the larger market capitalisation!!!!