Member Info for john46

This mess is going to escalate , ME now have no purchasing power . No sane person is going to purchase Aramco going forward .:-

"The meltdown in oil markets is turning back the economic clock for Saudi Arabia, putting it on track for the deepest contraction in two decades.

Already under lockdown to contain the spread of the coronavirus pandemic, the world’s largest crude exporter is bracing for a second impact from the oil rout and unprecedented production cuts negotiated by OPEC and its allies. Both will slash government revenue, and in turn derail a fragile economic recovery. Brent crude traded at under $19 a barrel on Tuesday -- a quarter of the level Saudi Arabia needs to balance its budget -- leaving officials with limited options to offset economic pain without crippling public finances.

Read more: Oil Meltdown Spreads Beyond Expiring Contracts as WTI Slumps 42%

“This has changed everything,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. “So much of the recent recovery was based on the fact that the oil price had been above $50-$60, providing support to economic activity, and that’s just been decimated.”

https://www.bloomberg.com/news/articles/2020-04-21/-this-has-changed-everything-saudi-economy-shaken-by-oil-crash

Wids ,

Saudis hold ~$650 BN of US debt , they will have to offload at some stage , FED can't buy , yields on 10 yr T notes should rise significantly . Trump won't be happy with knockon effect on DOW . It'll be interesting how he gets out of this one .

James,

Your prose is worthy of Editor material ! For 2 decades I have strived to buy British made/ grown/ manufactured wherever possible . I've noticed this yr so far , local BMW and Mercedes franchises have closed . Folk are voting with their feet . We now need to add Chinese to list . What disappoints me is ~50% of building material I have to purchase , though British sourced , is owned by our EU neighbours .

Alex Brummer , Financial Editor of DM has written a book " the fall of British Industry " , a very good read . In the book it explains the sale of 50 top U.K. Businesses to competitors . The one correlation with each sale is a complacent BOD , solely concerned with lining their pockets at the expense of their workforce .

Hopefully Dyson is setting our future template , " sell my business ? Over my dead body ! " let's hope our offsprings are appreciative of the importance of feeding British families .

Rafafan,

Long time no hear . The US /China deal was signed on 15th Dec '19 , 6 weeks after the Chinese realised they had a pandemic on their hands . Prior to signing the agreement , they asked to incorporate a clause that stated " should an act of God or Pandemic strike , the agreement would be nil and void " . Hence why the Chinese held off for 6 weeks , with WHO connivance , to play down the Pandemic ravaging their land .It will all come out in the laundry in due course .

For the Chinese , this will be a major self inflicted wound . Trump needs to start naming and shaming the likes of Apple , etc , who are exploiting Chinese cheap labour and lack of regulation . All of us as a Society should start demanding it . We can't compete with Chinese cheap labour , but we're World leaders in AI , automated processes and a corresponding improvement in national productivity . Not to mention our BOP improvement .

Off my chest !

Off topic folks , but we need more people like this fella in politics . German Bild Editor reply to Chinese Embassy , a classic !

Bild's editor Julian Reichelt has since responded with his own letter, published in German and English and addressed directly to Chinese leader Xi Jinping.

'You rule by surveillance. You wouldn't be president without surveillance. You monitor everything, every citizen, but you refuse to monitor the diseased wet markets in your country,' Reichelt wrote.

'You shut down every newspaper and website that is critical of your rule, but not the stalls where bat soup is sold.

'You are not only monitoring your people, you are endangering them - and with them, the rest of the world.'

The exact source of the virus remains unclear, but many of the early cases were linked to a live animal market in Wuhan.

Reichelt also highlighted claims that a Wuhan laboratory had been researching bat viruses without sufficient safety standards, hinting at a possible alternative cause.

China rejects this theory, but it has been touted by US President Donald Trump among others.

Reichelt continued: 'Your embassy tells me that I am not living up to the traditional friendship of our peoples.'

'I suppose you consider it a great friendship when you now generously send masks around the world. This isn't friendship, I would call it imperialism hidden behind a smile - a Trojan Horse.

'You plan to strengthen China through a plague that you exported. You will not succeed. Corona will be your political end, sooner or later.'

https://www.dailymail.co.uk/news/article-8244487/China-blasts-Bild-newspaper-demanding-coronavirus-reparations.html

LS,

"IPA Bellwether: marketing budgets decimated by Covid-19, but optimism still strong"

Yes , lloy leading the way , looks like they're spending Div cancellation on mainstream TV adverts .

If anyone is bored and has 1.5 hrs to spare , below is the best interview on US FED I've ever seen . Towards the end of interview it explains why China held off for 6 weeks telling the world they had a problem in Wohan with the virus . It also explains why not to trust Huawey 5G . Very informative !

https://m.youtube.com/watch?v=jsV_YXq-1x4

Mick / James ,

One of Eisenhowers , versatile in analogy .

"Well, it is very important, and the great idea of setting up an organism is so as to defeat the domino result. When, each standing alone, one falls, it has the effect on the next, and finally the whole row is down. You are trying, through a unifying influence, to build that row of dominoes so they can stand the fall of one, if necessary."
The President's News Conference of 5/12/54 Audio clip

https://www.eisenhowerlibrary.gov/eisenhowers/quotes

None of us should have been surprised at crude @ these prices .

Darth,

Re , Earth , apologies , predictive txt , as OXO would say , sacked secretary .lol . No harm meant !

https://www.bbc.co.uk/news/business-50681159

Saudi Aramco 1.5% sale , purely taken up by locals . The West should perceive it as a 1 month bridging loan . The war with Yemen will become unfinanceable , hence peace . Countless burnt fingers in ME . Hopefully a long term status quo in that God forsaken land . Hard to believe c 100 yrs since TE Lawrence wrote his 7 pillars of wisdom and told us all "this land isn't worth the life of a single Englishman ", lack of Finances will finally bring peace .

Roll on renewables !

Earth,

"Banks are expected to use their liquidity buffers in doing so, even if it means liquidity coverage ratios (LCR) go significantly below 100%,” the PRA said in guidance to lenders."

Exactly , Divs will be used to replenish bank liquidity when this mess is over , now is not the time to buy lloy .Dow still has 33% to fall .

Darth,

I don't know what age you are , but as a young teenager I recall everything being made in Japan , they even made a song about it . The Japanese took out 75 yr mortgages over 3 generations thinking the good times would last forever . Their debt to GDP approaching ~280% and no value appreciation in those property valuations .

The same is occurring in China now , mega inflated property prices , worse than ours , financed on debt . Asset price correction occurring as we speak , Chinese bank liquidity coming to the fore , so who is going to finance foreign purchases ? Specially when sound businesses suddenly become high risk in the West .

History has a habit of repeating itself

Darth,

"hmmm, it's thinks to China that we the Markets had a 11yr Bull run..."

Assume the above was addressed to me . Judging by the above statement , wealth wasn't created in the West , hence the distortion in Financial gauges with knockon distress consequences .

Theo,

Wrong bud ,

"Thanks for the link.. They don't miss a trick... Next thing buying up cheap UK businesses"

China debt to GDP ~270% , capital preservation will be their #1 priority , specially if we all start boycotting their goods . They will have a Dollar liquidity crisis . It will be interesting to see what Apple do with their Chinese production , that should be a gauge .

Motbuck,

As I have been pointing out over the last 2 yrs , our housing market is well overvalued . If Barc underwrites my portfolio @ 8% yield and houses sell for 5% yield there is a big disparity , logic dictates a correction has to occur somewhere in time . Our Gov created this anomaly with help to buy , they distorted free market forces and hence inflated property prices . We are now told house prices have dropped 3.5% in the last 2 months , how much further to drop during this mess ? Lloy has the most exposure to this market , a drop of 10% and countless youngsters starting off don't have any equity , we've been here before , CET will be compromised and lloy plus other FI will be forced to conserve liquidity , postponing Div . How long is a guessing game .

Permian Basin sat on $1.3 Tn of junk bonds at present WTI price , will cause a domino effect across US . It will be interesting to see if FED takes them under their umbrella , if they do , we then know they've lost the plot , they're distorting the market again , more debt , further taxpayer problems .

ERV , OXO , some great posts this morning , no child should pass away before their parents . God bless you both !!

Just watched Gordon Brown on hard talk/BBC , he wants lockdown till vaccine developed . He's already bankrupted UK once and within 10 yrs is willing to do the same . I can't believe anyone looks up to that fool .

Chasing losses in this market is gormless in extreme . If one hadn't done research leading to this black swan event and made deductions , they'll continue to be behind the curve . Use the Dow as a gauge .

Console yourselves , Globally we have QE to infinity , for 2 generations they might manage to keep financial system afloat , and when law of diminishing returns becomes non existent , our offsprings are knackered .

Teach them to hold on to physical assets , property and PM .

Lloy CET is going to be affected by cv19 , by how much will dictate how long Div postponed .

Keep well all !!

Nash2020,

Most appropriate link , thank you ! Relying on analysis , in what time frame do you envision 21 and 40p respectively ?

LTI,

Keep well bud !!!!!

Very interesting read.

"It was to be thousands of years before medical immunity was properly understood, but the historian implies that historical hindsight can itself be a kind of vaccine. History need not simply recall the horrors of the past. It can guide us towards adopting precautions, remind us that accurate observation is vital to ensure a better response in future, and reassure us that normal life will one day return."

https://www.bbc.co.uk/news/uk-52236388

NIRP will ensure the days of 63p are a generation away . HTF G Osborne sold Billions of pounds worth of lloy to pension funds in 60's , when on a peak , we'll find out in due course , similar to Browns sale of our Gold . Some folk should know better !!

It's beyond humorous what they've done to the populace .