by MOCKBA » Mon 24 Sep 2007, 13:28:35
$this->bbcode_second_pass_quote('MrBill', 'C')NR is going to run between N. Alberta and Prince Rubert. They are improving both ends of that line to make it more economical and increase capacity.
Still Buffet is smarter betting on US railroads. No need to look further then terrain map and or wonder why today they truck on US side of 49th.
$this->bbcode_second_pass_quote('', 'T')hanks for the heads up on Abitibi. I think the strong Loonie will devastate pulp & paper mills north of the 49th...
It did already and it would be even worse and this is why it might be interesting. As it is ABY blinked and did fire-sale merger at 30 cents on a dollar, but that is not the bottom I guess. The combined company would be 70-80 cents on a dollar and if $250M is singergies would not materialize 50-75 cents might be a good price to pay for North America 3rd largest and in control of 50+% of the market. Some people say - think about how much they could get trading carbon credits (if that would materialize).
$this->bbcode_second_pass_quote('', 'A')lthough northern Canada faces competition from places like Brazil and Indonesia that can grow trees much quicker.
Surprisingly enough it is mostly from Scandinavia and China. I am not sure about China that I guess profits from logging in Russian Far East for free, but Scandinavia... that strong Euro would make it very tough on them despite logging in Russia for free, but unlike North America they are in expanding market because Cosmopolitan is not yet translated to every European language and not every European receive as much junk mail as Swiss do.
Here is another and totaly different peak oil investment idea - oil tankers FRO, NAT, TNP, TRMD. In my opinion they are better positioned then refiners because they affected less by crude to gasoline margins and anyway you slice it both oil and product would have to be tankered to ALL major markets.
by MrBill » Tue 25 Sep 2007, 05:36:39
MOCBKA wrote:
$this->bbcode_second_pass_quote('', 'H')ere is another and totaly different peak oil investment idea - oil tankers FRO, NAT, TNP, TRMD. In my opinion they are better positioned then refiners because they affected less by crude to gasoline margins and anyway you slice it both oil and product would have to be tankered to ALL major markets.
I like tankers as well as deep sea drillers and heavy engineering firms, but it appears that I am not the only one. I have no problem finding stocks that I should have bought a year ago, or even in mid-August (as well as those I should not have sold), but it is extremely hard to find attractive stocks that are fairly valued now.
Frontline (FRO)
YTD 67-67% YOY 67%
Nordic American Tanker Shipping (NAT)
YTD 13-14% YOY 30-31%
Tsakos Energy Navigation (TNP)
YTD 58% YOY 84%
Dampkisselskabet (TRMD)
YTD 24-25% YOY 86-87%
The P/E ratios do not look too expensive between 10-15, but they are for the most part trading at or near their highs where I would see resistance and the chance for longs to take profits on the first hint of a pullback. They all have high betas against the SPX with RSIs at or close to the 60s already.
I think I shall add them to the shopping list just in case. Thanks.
The organized state is a wonderful invention whereby everyone can live at someone else's expense.
-
MrBill
- Expert
-
- Posts: 5630
- Joined: Thu 15 Sep 2005, 03:00:00
- Location: Eurasia
-
by MOCKBA » Wed 17 Oct 2007, 16:10:19
$this->bbcode_second_pass_quote('MrBill', 'M')OCBKA wrote:
$this->bbcode_second_pass_quote('', 'H')ere is another and totaly different peak oil investment idea - oil tankers FRO, NAT, TNP, TRMD. In my opinion they are better positioned then refiners because they affected less by crude to gasoline margins and anyway you slice it both oil and product would have to be tankered to ALL major markets.
I like tankers as well as deep sea drillers and heavy engineering firms, but it appears that I am not the only one. I have no problem finding stocks that I should have bought a year ago, or even in mid-August (as well as those I should not have sold), but it is extremely hard to find attractive stocks that are fairly valued now.
Frontline (FRO)
YTD 67-67% YOY 67%
Nordic American Tanker Shipping (NAT)
YTD 13-14% YOY 30-31%
Tsakos Energy Navigation (TNP)
YTD 58% YOY 84%
Dampkisselskabet (TRMD)
YTD 24-25% YOY 86-87%
The P/E ratios do not look too expensive between 10-15, but they are for the most part trading at or near their highs where I would see resistance and the chance for longs to take profits on the first hint of a pullback. They all have high betas against the SPX with RSIs at or close to the 60s already.
I think I shall add them to the shopping list just in case. Thanks.
Tankers are very poor investment idea at the moment. Basically there are too many of them chasing too few oportunities to ship extremely expensive oil that Asian don't want. Here is a blog I found
http://oiltankers.blogspot.com/ and complete list of shippers
http://shipping.capitallink.com/
by mattduke » Thu 18 Oct 2007, 15:13:41
$this->bbcode_second_pass_quote('MrBill', 'a')lmost all assets are over-priced.
$this->bbcode_second_pass_quote('MrBill', 'I')f I was not also afraid of inflation I would just sit in cash at the moment.
Classic milestone on the road to hyperinflation.
by MrBill » Fri 19 Oct 2007, 03:37:08
$this->bbcode_second_pass_quote('mattduke', '')$this->bbcode_second_pass_quote('MrBill', 'a')lmost all assets are over-priced.
$this->bbcode_second_pass_quote('MrBill', 'I')f I was not also afraid of inflation I would just sit in cash at the moment.
Classic milestone on the road to hyperinflation.
You're probably right Matt Duke. I am not predicting Weimar Republlic hyper-inflation, but even Greenspan sees long-term rates above 10%, so we could see an uncomfortable return to high inflation environment of the 1970's or 80's. That might not seem too bad to many, but we are collectively a lot more indebted in absolute terms than then, so the burden of servicing that debt will be larger. Just think zero equity and $500.000 mortgages instead of $50.000.
The death spiral comes when homeowners start defaulting and walking away from negative equity situations leaving those remaining homeowners, who for example pay municpal taxes for local services, to pick-up the bill even though their own homes are decreasing in value as well. There is a reason why some call the real-estate bubble the biggest bubble in history.
I have been thinking long and hard about this with my colleagues, but our thoughts are still incoherent on the subject. But here is a snapshot.
The central banks lost control of money supply when traditional bank lending was replaced with the credit expansion via the capital markets in the past decade or so. So-called disintermediation. In principle through the concept of credit as money (thanks mmasters) investment banks and their hedge fund compatriates were able to issue almost unlimited amounts of credit and derivatives that were then turned into positions with claims on the real underlying assets. But the rub is that those liabilities always have to be re-paid with real money. So when the size of those liabilities of off-balance sheet transactions are larger than the real economy's ability to produce profits then they are in trouble. The central bank then has to square the circle even if they do not want to. Inflationary.
In the past central banks would have been able to rein in the problem by raising minimum reserve requirements; raising their discount or fed funds target rate for interbank borrowing; doing reverse repos where they drain liquidity, etc. Now technically they still can and will do all those things.
However, the problem now is that third party contracts have been struck that create demands on the central bank to supply liquidity. Originally this was the argument that the system is more stable because the risk is more widely dispersed to those that can afford to carrry it. But as we see with the bank's conduits, or SIVs, that risk is only so far divorced from the bank as the bank can afford to cut them loose and refuse to lend them anymore money.
So if Citigroup lends IKB Bank (not its conduit, but a German bank involved in subprime itself) $500 million then Citigroup can let them hang, but then Citigroup will have to write that $500 million loan off as a loss, too. So far so good, but when you have the same situation throughout the whole industry then there are dozens of Citigroups and hundreds of IKB banks or pocket hedge funds.
Yes, the central bank can refuse to bail them out. That would avoid creating a moral hazard of course. But then those banks that are taking losses on those poor lending decisions simply will not have the liquidity to lend money to those that can afford to repay loans with interest. Good borrowers. The result is not only a credit crisis, but then good assets have to be sold to pay for losses and all asset prices ultimately decline or even collapse.
Even in a best case scenario you may have an investor borrowing at 5-6% p.a. to fund an investment that has gone down 5%. Or a negative 10-11% return. If the asset price drops even more then the loss is larger.
I have to clarify that. There is obviously someone that is lending money at 5-6%, and someone else that sold that asset at 100%, so the money is not 'lost'. But the risk is asymmetric. Those who can afford to lose might not be the ones stuck with a loss.
As Doly said, that is where Main Street nips Wall Street, but I would go one further and say that is where Main Street nips Wall Street and Wall Street turns around and bites Main Street.
How many existing home owners can afford the real cost of credit? Not ARMs, no principle loans or NINJA loans. Falling lending standards not only got a lot of unqualified homeowners into houses they could not afford, but that massive increase in global liquidity pushed up the price of all assets from Shanghai to San Diego and everywhere in between. I do not think that Canada is immune from the downward correction either.
This may be 'The Japan Moment' for the USA and by extension world economy. When asset prices are so high there is only one place for them to go. And a zero interest rate policy (ZIRP) may mask over the problem for a while, ultimately it will only shift the imbalance somewhere else. Any attempt by the world's central bankers to reflate will end in high inflation and then even higher interest rates.
The organized state is a wonderful invention whereby everyone can live at someone else's expense.
by Starvid » Wed 31 Oct 2007, 20:19:50
$this->bbcode_second_pass_quote('MrBill', 'U')PDATE: here is a link to a paper called
The Economic Effects of Energy Price Shocks that tries to explain just that. Cheers.
THANK YOU!
Now I have some reading to do.
Peak oil is not an energy crisis. It is a liquid fuel crisis.
-
Starvid
- Intermediate Crude
-
- Posts: 3021
- Joined: Sun 20 Feb 2005, 04:00:00
- Location: Uppsala, Sweden
-
by MrBill » Thu 01 Nov 2007, 04:19:12
$this->bbcode_second_pass_quote('Chesire', 'I')nvite the chinese to build some military bases in Canada.
Tell your american consumers you expect to be paid in euros, yen , yuan , gold , silver or grain P Tell your goverment to fuck itself then replace it if it tries to hassle you about this.
![[smilie=hello2.gif]](https://udev.peakoil.com/forums/images/smilies/hello2.gif "hello2")
Actually if China was such a great place to live I might invite them over to try to reorganize Canada, but actually China is totally fucked up, so let them live in their own Hell. Canada does convert their US dollars into CAD, so actually exporting to them is not a problem either. That is why the Loonie is appreciating vis a vie the US dollar. I would suggest the Chinese do the same. I certainly would not waste my time and money investing in yen! ; - )
The organized state is a wonderful invention whereby everyone can live at someone else's expense.
-
MrBill
- Expert
-
- Posts: 5630
- Joined: Thu 15 Sep 2005, 03:00:00
- Location: Eurasia
-
