Post: #276

(02-11-2015 12:19 PM)_Cicero Wrote:  Something to watch out for in Russia: http://www.themoscowtimes.com/news/artic...15767.html

Nothing venture, nothing have

Post: #277

(01-30-2015 07:36 PM)AeroDev Wrote:  

(01-30-2015 06:55 PM)MichaelCorleone Wrote:  

(01-30-2015 02:24 PM)samsamsam Wrote:  

(01-29-2015 06:06 PM)AeroDev Wrote:  

(01-29-2015 03:08 PM)Chengiz88 Wrote:  Slightly confused by this comment. You say this is to do with fundamentals, but which invisible hand is behind those fundamentals?? You think a ~60% drop in Oil is normal and not manipulated by Saudi and their masters in Washington DC?
Secondly the ratings agencies are a joke, and were being duped left, right and centre pre 2008.

The drop in oil is actually a return to normalcy. The prices for the last decade are what was artificially manipulated.

Russia's central bank is predicting $70/barrel oil in 2016 to '17

AeroDev,

For my education could you go into detail about this? Thanks.

AeroDev is right on, the average inflation adjusted price of oil per barrel from 1946-2014 is $41.70, that's inflation adjusted, so people thinking that $75-100 is normal and that it will naturally return to $75-100 a barrel and thus save Russia are most probably wrong based on economics and history in addition demand for oil isnt exactly growing like gangbusters.

Exactly. The realistic price point for oil in 2015 dollars is around $50. Anything around $60 and you should see a boom in exploration like we have the last few years, anything around $40 and you should see some contraction which we are seeing now.

Expecting oil to "naturally" be around $80+ is ridiculous.

samsamsam - Where are you getting the idea that lifting costs are over $41? That's insane man. That's closer to total breakeven costs. Lifting costs are closer to $10 ... obviously more for shale. Of course you are correct that Saudi Arabia is cheaper with lifting costs closer to $4. When you see the doom and gloom media reports, just remember the cost analysis they are going off from is almost always years behind the current situation.

Post: #278

(01-30-2015 07:16 PM)Easy E Wrote:  Oil popped today:

Oil surges 8 percent as U.S. rig count plunges, shorts scramble

http://www.reuters.com/article/2015/01/3...5Q20150130

^The rig count in the USA is dropping like a stone. My guess is the Saudi strategy of pricing them out of the market is working like a charm.

Oil probably won't pop back up to $100/bbl, but even if it just pops up to $70-$80 later this year, that alone would buy the Russians some breathing room.

A test down to $40 (even $30s) is likely if the world economy keeps hurting - which is probable. Which is also why a real price increase in oil will await next year, possibly later in that year.

Post: #279

(01-26-2015 05:47 PM)Akula Wrote:  

(01-26-2015 04:16 PM)Chengiz88 Wrote:  Just seen this - So the attack on Putin continues

It's not going to stop I don't think. The powers that be in the west have it in for them and seem to want to do anything they can to put Russia and Putin in a bad light now.

Moody's and Fitch just recently downgraded Russia or put them on negative watch too so they will probably soon follow. This from the (US-based) ratings agencies that traditionally have acted slowly and missed the entire mortgage debt crisis.

Historically, there has been no widespread violence, nor military style aggression in Eastern Ukraine. I may only have one woman-friend from a poor farm South of Donetsk - so call me crazy - but there could be a rational basis for hating on Putin!

Post: #280

(01-30-2015 08:18 PM)Easy E Wrote:  ^It's even more complicated than that. Shale oil (tight oil) has rapid depletion rates, 70% depletion within a year and like 90% within 3 years.

These aren't wells that you just drill into and stick a pipe in and suck it dry for the next 20 or 30 years.

You have to constantly be drilling more and more wells to get production to rise. Pad drilling has made this a bit easier since you can have multiple wells on one rig, but it is still a very expensive process. Plus, all the shale oil wells in North America are horizontally drilled (expensive) and multi-stage fracked (also expensive).

That is why cheap credit is so essential: shale oil drilling only makes sense at high prices and with cheap financing.

That is also why when rig count drops, production eventually has to drop as well: because of high depletion rates, you need to be constantly drilling to have production rise...any drop in rig counts eventually has a huge impact on future production.

The Denver-Julesburg Basin has grown to more than 4 billion barrels in recoverable oil equivalents. Anadarko has cut planned spending, but break even is $50 to $60.

Producers are marking time for this year, but wary of changing market demand beyond that to place their bets.

Post: #281

Moody's is predicting recession in Russia and downgraded their debt to junk. Not good for Ruble good for holders of US Dollars.

http://www.zerohedge.com/news/2015-02-20...ssion-2015

Post: #282

(02-20-2015 05:24 PM)MichaelCorleone Wrote:  Moody's is predicting recession in Russia and downgraded their debt to junk. Not good for Ruble good for holders of US Dollars.

http://www.zerohedge.com/news/2015-02-20...ssion-2015

Everyone knew it was coming given that S&P had already downgraded them below I-grade so a lot of this was priced in. Most everyone who wanted to get out already did.

Not saying it won't continue to hurt, but the Russians have been hunkering down and preparing for this. There's 'only' 30 billion USD or so of sovereign debt in total actually. Most of the Russian USD and Euro debt is in the corporate space. That's where you will continue to see more selling I think but a lot of these companies are buying back bonds now too. Think there's like $130 billon of debt maturities in 2015 among the corporates that need to be paid down.

More US sanctions apparently on the way now if the fighting doesn't stop and the 'ceasefire' isn't being followed.

Post: #283

There will be more sanctions bcos that is all the west can do short of starting WW3. Putin has given a massive F-U to the US/EU, The 2nd Minsk agreement isn't worth the paper it's written on. The fighting in UA is not stopping, and it isn't beyond imagination for Russia to attempt a blitz and try to grab Mariupol and maybe even Odessa.

Post: #284

Seriously, Russia's economy is FUCKED big time, it is gonna get way worse, their Central Bank just cut their rate from 15% to 14% and their forecast for 2015 is a CONTRACTION of 3.5% - 4.0% in the Russian economy. You have no idea how painful a contraction of 4% will be in the economy and 2016 will be worse.

http://money.cnn.com/2015/03/13/news/eco...tral-bank/

Post: #285

(03-13-2015 04:33 PM)MichaelCorleone Wrote:  Seriously, Russia's economy is FUCKED big time, it is gonna get way worse, their Central Bank just cut their rate from 15% to 14% and their forecast for 2015 is a CONTRACTION of 3.5% - 4.0% in the Russian economy. You have no idea how painful a contraction of 4% will be in the economy and 2016 will be worse.

http://money.cnn.com/2015/03/13/news/eco...tral-bank/

MC, thanks for the article. Just the way everything is going, we should be in USD but any idea (I know, who really knows) when to the dollar's strength will start to diminish? I.e. time to exchange into Euros, zlotys, roubles if we were to get some cash denominated in the places we may be visiting?

Post: #286

Preface i have no idea really what will happen, but my current currency holdings are EUO, which is an ETF that is double short the Euro vs the US Dollar, i will hold it for all of 2015 and 2016, same holding period for YCS which is a 2x levered ETF short Yen and long US Dollar. I have held both of these for awhile the YCS etf for almost 2 years and EUO for the last year. My holdings increase in value when the US dollar appreciates against the Euro and Yen. The EU just started quantitative easing and Japan is fucked more than any economy on the earth. There really is no hope for Japan. Next week everyone wants to see if Yellen will take the word "patience" out of the Fed statement. if she does the USD will move big. Regardless, Yellen is holding pat and thinking of tightening, EU just started loosening and Japan is just a mess. YTD EUO has been making me very happy. I have no opinion on any other currencies, but all currency valuation is relative. Again this is all just my holdings and is a very short and abbreviated reason why I decided to hold those ETFs, it is not investment advice of any kind and shouldn't be construed as investment advice. I don't really like posting this stuff on boards, so this is a one time thing. Cheers, i hope that answers your question. Note both of those ETFs are 2x levered ETFs.

Post: #287

MC,thanks so much. I appreciate your willingness to share these nuggets of info.

Post: #288

(03-13-2015 05:35 PM)samsamsam Wrote:  MC,thanks so much. I appreciate your willingness to share these nuggets of info.

Not trying to derail the thread, just trying to help here by saying you should avoid leveraged ETFs at all cost. Not trying to brag here but just to show you my legitimacy, I have a master's degree in finance and have worked as an Investment Advisor for a Private Bank.

Read carefully this article just to understand why: http://www.investopedia.com/articles/exc...ed-etf.asp

If you really want to use leverage, just use an FX broker (try to find a legit one, like saxobank) which would offer way lower fees.

Post: #289

(03-14-2015 07:05 PM)AwFkBye Wrote:  

(03-13-2015 05:35 PM)samsamsam Wrote:  MC,thanks so much. I appreciate your willingness to share these nuggets of info.

Not trying to derail the thread, just trying to help here by saying you should avoid leveraged ETFs at all cost. Not trying to brag here but just to show you my legitimacy, I have a master's degree in finance and have worked as an Investment Advisor for a Private Bank.

Read carefully this article just to understand why: http://www.investopedia.com/articles/exc...ed-etf.asp

You are correct from a long term perspective because of the decay of the derivatives used to get the 2x, and they also don't work in volatile instances, but over a long steady move that is almost one directional for the Yen and Euro they are set up very very well for me. You are correct in the general sense that levered ETFs are trading vehicles and not buy and hold but in certain circumstances they are great for me. Thank you for your input and judging of my choices, if you look at their historical charts over my hold, the chart speaks for itself. I shouldn't have posted as it was thread jacking my own thread.

I also understand how a retail investment advisor would never in a million years ever tell any of their clients to get into these long term. And any Private Bank guy would never put their people in these, I know that and understand. Bottomline you are correct in almost all circumstances. You are correct most people should probably never buy levered ETFs for long buy and holds. That's why I emphasized they were levered.

I wasn't advising anyone to do anything, all I was doing is saying what I am currently doing. I advised no one in any way and made no predictions. Believe me I will never post any investment stuff here again.

Can the thread please stay on topic of Russia and the Ruble? Thank you

If I could delete my post I would, but I can't and I knew it would invite scrutiny by people that don't understand the entire thesis and why certain vehicles were chosen and my circumstances. Look at the EUO and YCS charts over the last 12-18 months and the % move. No need to reply to my justification or tell me why you think it was a bad choice because I don't care what anyone else thinks, its my money and I made a ton of it on these two holds. Thanks, lets move on.

Post: #290

(03-13-2015 04:53 PM)samsamsam Wrote:  

(03-13-2015 04:33 PM)MichaelCorleone Wrote:  Seriously, Russia's economy is FUCKED big time, it is gonna get way worse, their Central Bank just cut their rate from 15% to 14% and their forecast for 2015 is a CONTRACTION of 3.5% - 4.0% in the Russian economy. You have no idea how painful a contraction of 4% will be in the economy and 2016 will be worse.

http://money.cnn.com/2015/03/13/news/eco...tral-bank/

MC, thanks for the article. Just the way everything is going, we should be in USD but any idea (I know, who really knows) when to the dollar's strength will start to diminish? I.e. time to exchange into Euros, zlotys, roubles if we were to get some cash denominated in the places we may be visiting?

I like Michael's reply, and think that Japan is a good case to watch. Jim Rickards has said that Japan is the US' canary in a coal mine, so if they go ...

One analyst that is worth a follow on Twitter is Jesse Colombo. I don't see eye to eye with him on everything, but he's been very accurate so I've had to make sure that if I am going to take a position that he's warning about, I better have a very good reason. Soros said that one of his keys to successful trading was always trying to argue against what he was about to do, and Jesse is good for that.

Some of his predictions for instance:
https://twitter.com/TheBubbleBubble/stat...3658419201 (this was when people were warning about hyperinflation and telling everyone to buy gold and silver and run for the hills).

http://www.forbes.com/sites/jessecolombo...or-a-bust/ (his caution about oil prices, a month before they began their fall; I honestly thought he was out of his mind at the time - oil, in my mind, could never fall 50% again).

Financial media is like a mother's dating advice to her son; usually the people who suck at math and analysis go into journalism, so it's rare to read someone who's good at both. Colombo, Rickards and Soros, from time to time, seem to have an eye for things.

Post: #291

(01-30-2015 08:26 PM)AeroDev Wrote:  

(01-30-2015 07:42 PM)Easy E Wrote:  ^The boom in exploration was driven by two factors: high oil prices and cheap credit.

Without cheap credit, you need really high oil prices to sustain a boom.

With the Fed tightening, the cheap credit is coming to an end.

Bent oil will be at $70-$80 by year end.

You're correct here up until your prediction. Best guess is $60-70 by year end. About $10 of that being artificially higher than it needs to be but that's the current reality of the industry.

Did I say year end 2015? I must have meant year end 2016... Damn I was off on this one. As much as we were at artificially inflated prices for years, I fear we are now at artificially deflated prices.

Frankly, I'm amazed the Ruble has held up as well as it has. I expected it to be a good 20% worse off by now.

Post: #292

AeroDev there is so much oil o/supply that tanker storage rates are at their highest.