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The top of this cycle for ASX200, cash is king ?


kahuna1

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Howdy ....

 

Well its Sunday in the USA and as per normal no reporting of deaths or people with virus .... hence the sudden drop ... each Sunday same stuff.

Agreed they have massive issues for some time. Basically they don't care. Its only about white .... old rich people and CEO's .... nothing else.CV19 has a gift for them ... I note one of the main people and groups is led by Koch Brother Heritage foundation along with many other large self interested groups.

 

OIl .... oooh ... well technology and USA allowing the dirtiest of all oil to be produced .... Tar Sands in 2006 when George Junior declare it legal and Kyoto went out the window added part of USA's current stuff all stance. Other is of course new technology and shale oil being able to drill sideways and again no oversight and all environmental rules gone .... so they can frack till they bleed and do so.

 

Both very expensive and energy hogs so a nightmare for environment but, well .... they don't care ... about that.

 

We did have peak oil .... some time ago ... Peak Traditional oil ... that is vs a non traditional oil production say shale oil or tar sands. By opening tar sands and then fracking there now is about 150 years of supply. More than you think .... because old oil fields with tight structures ... well now you can frack them and drill and then fracture the structure and get close to 95% of the contained oil out over time.

 

This .... has come at a price and around $60- USD break even for this new production and the traditional oil is getting more expensive as well for the USA as its more than likely off shore verses onshore and that comes at a higher price.

 

USA oil production last time I looked massively up .... around 15% of global production and that's 15 million barrels a day. I think they still use somewhere near 20 million barrels so they do import .... but far far less.

 

Basically the USA and its reliance on imported oil is massively down. Demand globally despite some decent growth has been very little. Tiny in fact and the USA extra production has produced a glut. there already was a glut post 2010 ....

 

More efficient cars and so on.

 

USA response was to let Libya get invaded and cut their supply ... when that didn't work ... invent a reason to cut Venezuela off ... and since they have the largest reserves .... and Koch brothers got .... a refinery they lost there, revenge works ... well it didn't and there was no crisis ... but now there is one due to sea blockade and embargo .... Cause and effect back to front.

 

Still not enough.... so invent a crisis with Iran and they were complying with inspections for nuclear side, much like Iraq was when USA claimed ... WMD's but none were found ... and yet another oil supplier cut off.

 

Basically ... if at some stage Libya sorted itself out ... adds more supply ... Iran sanctions eased or ... better still the rest of the world Ignores the USA and its policies and then demands nuclear inspections and compliance .... its a good thing for everyone in the world. Venezuela and whilst not a fan of these regimes in Iran or Venezuela ... USA is run by a dictator who is just about to kill 150,000 more Americans.

 

Bottom line, USA really does not care about life .... for any nation and its own self interest is not about the people who would benefit from cheaper oil, its about the donations of the Koch family and oil interests.

 

USA has been trying to goad Iran into acting and taking out Saudi Arabian oil and the rest of the gulf ... which given the sociopath in the the White house is still on the cards.

If we just remain here, no change .... there is a massive already over capacity on the supply side. Yes traditional well will run out over time, but things now not operating due to low prices such as the tar sands of Canada will resume at say $60- USD a barrel and as such the topside barring a war event is limited for say 5-10 years ... and unlikely without massive currency devaluation to rise too far for too long up above say $70- USD.

 

That USA is run by self interest groups and ... well the 0.1% .... anything goes and that a million die in Libya ... so what. Oh they got NATO to green light that one ... Asked to leave Iraq after murdering an Iraqi militia leader ... USA said no ... oh and the Iranian General there as well on an official visit to Iraq Prime minister on his invitation .... Poof ... your gone.

 

Not sure any of this is relevant given the extreme events of late and USA acting more like a regime under a dictator and its genocidal actions to its own people and to basically every other nation as they go USA first, post CV19 ... I suspect the world stands united against USA and its self interest.

 

Then again ... who the hell knows.

I note and have noted a lot of hot air about fracking and whilst CSG ... coal seam gas is fracking a shallow coal deposit which is ABOVE the water table ... and as such the nasty chemicals they use can and do often seep into the water table, oil fracking is DEEP ... below the water table and as such risk of contamination is close to zero. Then again, most amusing have no idea when they write articles about the risk. Of course fracking does seem to cause earthquakes .... due to fracturing underlying structures and so on.

 

Where to from here ? Oil ... well with every tanker and storage tank at full and capacity, cut supply a mere 10% ? .... its NOT enough. Air travel unlikely to resume in any meaningful way in 2020 .... and subdued other demand so that ... stored up oil and what is still an oversupply of at least 10% for now verses demand ... needs to be shut down.

 

Compliance as always is an issue and OPEC members have a vast history of lying.

As such, nothing compelling for now about oil. Sure it may double .... it may halve .... but that over supply hang is still out there. For some OPEC members their reliance upon oil money is dire and ... well ... some can produce at double the rate they are today.

Hope that helps ?

 

 

Who knows .... its a seriously nutty world and I took my loss on the single oilier I had. I do not like the optics longer term in the say 2-3 year region with oil likely to be subdued for some time and their needs and financing .... requires much higher oil prices. Some seem to think this will go away, oil .... with CV19 .... but sadly ... the oversupply side has been going on for some time.

 

 

Have fun

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During the GFC the Russians put out a report stating, amongst other things, that a likely outcome of the crisis was the likelihood that many US states would become bankrupt and have to adjoin with other states.

 

 

The outcome would be, a concentration of power

 

I would also imagine the states most likely to be bankrupt are the Democratic states.

 

Every election from here on in to eternity will be won by a Republican president.

 

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First clue US geography and politics will be forever changed.

Donald J. Trump@realDonaldTrumpÃâہ¡ÃƒÆ’‚·5hWhy should the people and taxpayers of America be bailing out poorly run states (like Illinois, as example) and cities, in all cases Democrat run and managed, when most of the other states are not looking for bailout help? I am open to discussing anything, but just asking?

 

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He clearly has something in store for the media industry as well given the antagonistic relationship he has with them.

It could be a licencing regime but it could be something far more dramatic than that.

I will go with the dramatic option.

 

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USA just passed Italy at CV19 infection rates !!!

 

Trumps new press secretary âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚¦. declared Trump never has told a lie and always tells the truth. She proclaimed she will not lie in her first press conference. Sorry if you needed laxative, well we now have it via the 31 year old propagandist.

 

I note USA has 36,000 new cases 1st May 2020 and 66,000 deaths. I also note their models which were touted to the press are all broken and one has total deaths adjusted up 5 times to now 72,433- seems to have all death stopping in USA as ordered by the resident idiots.

 

 

 

https://covid19.healthdata.org/united-states-of-america

 

 

 

USA and Gilead drug that supposedly helps CV19 the peer reviewed scientific paper on its trial, shows NO change to anything other than adverse reactions. This was released on the 29th April the day after it was claimed it was of some use.

 

 

 

We await the actual USA trial and removing 10% of patients from the trial with extreme reactions of which 8 at least died, makes the actual mortality rate 16% verse 11% âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚¦ WORSE âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚¦ not better WORSE.

 

Australia and its numbers remain encouraging. As does NZ. USA with a broken system and seriously infected presenting latter and often beyond much hope other than let the virus run its course already has a sobbingly awful mortality rate.

 

Some states, Florida has taken to deliberate not reporting CV19 as cause of death. If they die as often is the case via heart attack as the lungs stop functioning via CV19, stress on the heart cases a heart attack, cause of death ? Even if your postie for CV19, medical examiners put heart attack as cause of death !!

 

USA, has not a hope. For their medical system and society with 11 million illegals who unless nearly dead will not get tested for fear of being deported is one issue. Second is 80 million on Medicaid which is an awful cover leaves them also unlikely to be tested because they will get smacked with a massive bankrupting bill on the side. Medicare not much better for 60 million. Then those insured, with deductibles of $3,000- needed to be paid first by the patient and then $1,500 co payments and this is the type of cover for say 100 million out of 130 million, the visit to the doctor or emergency room is last resort.

 

Basically a perfect breeding ground for a virus. If your poorer more than likely you live in a big household. If your poor you have little savings and need to work. I will have a sandwich please with virus on the side !!

 

I think it would be fair to say the USA is a âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Failed Stateâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ right now in terms of its role as a government for the overall people. Its failed. Open and exposed. CV19 for now is just exposing the medial side of things. Society will not be the same for the USA post CV19. The indifference of the fate of the majority and seeing food banks swamped by people of all colours, astounding.

 

Last point and this also is clear is that USA not only is failed state, USA is a âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Rouge Stateâââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚ for the rest of the world. USA policy under Trump not much different than Obama and Bush and Clinton. USA first. Open economic terrorism has abounded for many years. Actions of USA based and controlled credit rating agencies are absurd. USA state sponsored tax theft is assumed will continue post CV19 when all nations are faced with 50% more debt to GDP ? USA has been the worlds policeman post WW2 but increasingly more a brutal monster with some actions.

 

 

 

In 2019, USA was ranked number one in terms of being prepared for a pandemic. Ranked in the very upper end of medical systems when recently in 2020 many ER people were wearing garbage bags as protective gear. People who should have been in hospital for weeks were and still are arriving dead or near dead in ambulances with blood oxygen levels in the 60's.

 

USA openly and actively is not only slashing funding to say the UN or WHO, its trying to destroy them. World Bank and IMF are adjunct USA policy arms and their statistics are a joke when what one nation calls one statistic is vastly different to another. Without fail, they favour the USA for these institutions.

 

I am sure, USA will as always attempt to assert its authority. Its actions post 2016 with threatening virtually every nation with actions, will, of course continue but with, I suspect, virtually zero tolerance as time goes on for tax theft via the likes of Microsoft and Amazon, FB and Google.

 

Only time will of course tell. Not an environment easy to navigate.

 

Retail sector for those with virus issue till a vaccine a USA restaurant already likely struggling paying a waitress $3.40 an hour plus tips ? To get infected with say 33% of the customers ? Amusing and once habits change, as they have been forced to, the longer it goes on, the longer it takes to even think about going back.

 

My model still optimistic with 1.7 million reported as seriously infected in the USA by June 30th 2020 and 128,000 REPOTED deaths.

 

Of course, its now a race for who can be more dishonest, China or USA with its reporting.

 

With now 19 states after a mere 3 weeks break and infections at 4 times any EU nation right now being currently, CURRENTLY reported, lets go back to work.

 

As such science meets stupidity yet again âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚¦.

 

Likely double the numbers even reported by end of 2020 for USA and 3.4 million seriously infected, likely 250,000 deaths end of 2020 and well âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’‚¦ who shall we blame ?

 

It is science. It is maths. Things ultra far right deny and do so with revisionist propaganda to try and cover the graves.

 

Right now, USA has more infections per capita than even Italy !!

 

https://www.worldometers.info/coronavirus/#countries

 

It is testing at per capita similar levels to Italy finally, but has tested merely 66% as many overall !!

 

Its likely its current infection rate is close to Spain and worlds worst.

 

Italy locked down on the 3rd March and Maybe relaxes a bit by 8 weeks. USA well it only locked down for 20 states April 3rd and opened back up for 19 on the 26th to 29th April. Active unidentified cases are 4 times MORE and clearly so being identified each day in the USA. Outcome does not take a rocket scientist or anyone with an IQ over 50 to work out.

 

CV19 is a virus. It is immune to political bull. It thrives upon stupidity.

 

Calling USA a failed state, is mild. Whilst CV19 would have hit the severity already of USA actions to date have it at DOUBLE where it should have been. Since that will double by June 30th 2020 and quadruple by end of 2020, what does one call this regime ?

 

Actions of USA pre CV19 to the rest of the world pre CV19, were rogue and designed with contempt for all non USA people not in the top 1%. These ranged from de-funding aid programs to trying to destroy the UN and EU at any and all opportunities to tearing up mutual non proliferation treaties for missiles and weapons to any other thing that suited the USA. USA was standing alone pre CV19 on many issues and post CV19, even late 2020 I fear the worst. I hope for more, but fear what a sociopath will do.

 

Declaring 10 out of 10 for his efforts on CV19 when 400 were dead and still doing it with 66,000 dead is absurd and disturbing.

 

I note today magically Trump who defeated the virus at 15 cases, was stuck on 60,000 deaths magically went to 100,000 verses Mondays estimate of 60,000.

 

At least most despot genocidal maniacs did not appear on TV to display their contempt and absolute contempt for human life.

 

Welcome to 2020 !!

 

A "Failed State" that clearly does not care about the welfare of its people is being nice.

Comparing it to a genocidal maniac state would be far more accurate. Its not as though they are not aware how the virus spreads and what need to be done to protect the people. Back to WORK now for $3.40 an hour as a waitress plus tips with 33% of the seating ... then again 16 States dont even have that !!

 

Take care

 

Mark K.

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... and yet the stock market is firing, real estate prices in Sydney and Melbourne have gone up in recent weeks, the AUD has totally recovered. All those things that are supposed to be leading indicators are indicating that the very low interest rates and the billions of additional liquidity have beene enough to pull us back from the cliff.

 

Could we have been lucky again, and dodged yet another bullet? I don't think so but I've been so wrong so many times now.

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prepared for the market to retest recent lows

 

When this thing started, I made a "sort of" plan for 12 months. Basically pull enough money out to live on for the while, and not be in a position of having to sell good assets at bad prices. That was in the bull market, and as it was, by 24 Feb I got to where I wanted. Hold a bit of gold for insurance, trim some holdings, maintain diversification and sit it out.

 

Now 2 and a bit months in, it's tricky just sitting, could have sold more earlier to clip a few SPPs coming along but in I didn't.

 

Still got nine months to go. Interesting times.

 

And that has happened. Now, how to position for the future, cos it isn't going to be like it was.

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This thread started when cash was worth something

In 2005 you could get 5.5%+

Today you get effectively a negative interest rate

CBA settlement account pays 0% and their Saver account pays 0.05%

There is a lot of cash earning less than nothing

Cash may be still be king because you are "guaranteed" to maintain the face value of your stash

Whereas the alternatives are more likely to erode it away.

 

What do you do with it?

Bank deposits - hard to find a term deposit that pays 2%

ASX - Dividends shot, banks provisioning for Armageddon, iron ore price at whim of china, oil price kaput with 2nd order effects coming

Property - Immigration the driver of the market to be cut, mortgage defaults , rent defaults, few international students wanting units, too many units in pipeline

Gold - always around but subject to big swings

Spend It -?

 

Once the covid emergency is over reality and its judgement will return.

 

 

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