US oil prices collapse; US economic activity sinks; Japanese exports dive; China cuts benchmark interest rates, adds huge new stimulus; Virgin airline toast; UST 10yr yield at 0.64%; gold up; NZ$1 = 60.7 USc; TWI-5 = 66.9

US oil prices collapse; US economic activity sinks; Japanese exports dive; China cuts benchmark interest rates, adds huge new stimulus; Virgin airline toast; UST 10yr yield at 0.64%; gold up; NZ$1 = 60.7 USc; TWI-5 = 66.9

Here's our summary of key economic events overnight that affect New Zealand, with news of a spectacular market collapse.

First up today, US oil prices have nosedived - in fact the market has completely collapsed and you can hardly give the stuff away today. Believe it or not prices are currently quoted at 50 USc/bbl. Yes you read that right, a fall of almost -US$18/bbl overnight. At one point, prices actually fell below zero. There is both no demand, and no place to store new crude. No-one is saying prices will stay this low, nor will be this low in the future. But right now there is no market for crude oil in the US, a stunning development. The Brent benchmark is down too, but there is still a functioning international market at just over US$26/bbl, down about -US$2/bbl. The US price situation is the most spectacular market collapse of a commodity ever; well, at least since tulips.

Staying in the US, their national economic activity index crashed in March and undoubtedly has fallen further in April. It is actually a very serious indicator of deep structural problems for the world's largest economy.

Japan's exports fell more than forecast in March, down almost -12% year-on-year when a -9% fall was expected and the February fall was only -1%. It is almost certain April exports will fall much harder.

China has cut -20 bps from its prime rate benchmark, taking the new rate down to 3.85%.

And China has announced a new huge NZ$250 bln infrastructure stimulus program to be operated through local governments.

Credit rating agency Fitch has cut Hong Kong's credit rating by one notch to AA as the city faces a resurgent virus and GDP that will fall by at least -5% this year.

In Australia, it looks like their second main airline, Virgin, is about to collapse later today, throwing more than 10,000 employees out of work. Virgin Atlantic is near death as well.

Worldwide, the latest compilation of Covid-19 data is here. The global tally is now 2,440,500 and up +66,500 this time yesterday which is a rising tide. Now, less than 32% of all cases globally are in the US as caseloads rise faster elsewhere. The US caseload is up and they are up 24,000 since this time yesterday to 766,200 and a slowing rate of increase. Just on 9% of all US cases have recovered so far, and virtually unchanged. The disease is now spreading into the American heartland.

It is becoming clearer now that the US virus originated in Europe and may be a deadlier mutation. New research suggests that the ability of the virus to mutate has been vastly underestimated.

Australia has now over 6500 cases and little-changed over the past week, and their recovery rate has been unchanged for a growing number of days as well.

Global deaths now exceed 167,000 and this rise is slowing although it is clear that many countries report these in quite different ways. The head of the WHO said today that "the worst is still ahead of us".

There are now 1440 Covid-19 cases identified in New Zealand, with another +9 new cases yesterday and the same as Sunday's +9 increase. The number of clusters is still at 16. Twelve people have died here now, unchanged from Sunday. There are now 14 people in hospital with the disease, with three in ICU. Our recovery rate is now up to 68% and rising.

The UST 10yr yield is holding at just on 0.64%. Their 2-10 curve is little-changed today at +43 bps. Their 1-5 curve is similar at +20 bps, but their 3m-10yr curve is up +3 bps at +54 bps. The Aussie Govt 10yr yield is now at 0.84% and little-changed. The China Govt 10yr is up +3 bps to 2.59%. The NZ Govt 10 yr yield is down -4 bps at 0.92%.

Gold fell hard yesterday but is marginally higher today, up +US$6 to US$1,693/oz.

The Kiwi dollar will start today a little firmer. We are now up at 60.7 USc. On the cross rates we are +½c firmer at 95.2 AUc. Against the euro we are also firm at 55.8 euro cents. That means the TWI-5 has risen to 66.9 and a +50 bps gain.

Bitcoin has gone the other way, now at US$6,858 and a -4.3% fall from this time yesterday. The bitcoin rate is charted in the exchange rate set below.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

Our exchange rate chart is here.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

126 Comments

In fact CNN is reporting HERE that fuel dropped below $0 to -$37.63. I guess that means someone will pay you to take the oil away! For someone sitting on unused oil storage, and with a tanker or two available this could be a gold mine, but i suspect that these prices mean that even the short term mobile storage is full.

It will be interesting to see what the impacts on atmospheric carbon will be, and over all climate impact, but these will not happen immediately, at least not all.

Exactly, but the May contract expires 21/04/20 and June, the new front month WTI contract trades`~$21.00 a barrel . Whole strip

Witnessing how Oil cant live with sentiment in a crisis, stock markets on the other hand.....

There's a lot of oil in the middle of the US and remote to any port. That oil cannot go anywhere and there is no storage.

I used to design oil storage long ago and it takes a lot of engineering design and time to construct storage sites. I bet oil producers are wishing they were back in the days of $120/barrel.

"I bet oil producers are wishing they were back in the days of $120/barrel."

Everyone should wish we were back in those days. Because the industrial economy had road in front of it

So at this moment in time I could buy a contract for $1 WTI crude? It was $20 yesterday! Absolutely crazy. I can’t see oil ever going above $50 us a barrel (Brent crude) bar a Middle East war. Think more people worldwide will adjust habits, work from home more and governments will go wow look at what our cities look like with no smog - maybe we shouldn’t amp up renewable energy.

Until there is an excess of renewable energy here, gas priced here (and to a certain extent coal prices) set the marginal price of electricity. Gas prices here will still be pretty high due to the governments decisions. Electricity use will probably stagnate for the next few years.
So there are various factors at play here.

Saudi has missed a big opporchancity last year then. At the last moment they opted to sell only 1.5% of their Aramco asset on an IPO which then valued the whole company around $US 1.7 trillion. If these prices hold Saudi is in trouble.
Remarkably the bit they sold is hiding up well.
https://www.saudiaramco.com/en/investors/investors/share-price#

10
up

Saudi in trouble ? Very good, as this means less money available to finance international terrorism.

That goes for the US as well.

The reality isn't nearly as spectacular as the headlines would have you believe. It was only the spot price that went negative, oil out of June is US$22 and September is US$29 per barrel. By early next year we are at $33 p/b. This is a futures expiry and short term storage issue.

Not really-it was the May/June contract roll where the action was. Spot was relatively stable.

by Audaxes | 21st Apr 20, 8:04am
Exactly, but the May contract expires 21/04/20 and June, the new front month WTI contract trades`~$21.00 a barrel . Whole strip

Think about it, you're wrong. The oil curve is super-Contango and spot is the most impacted, so deeply negative. If storage is the issue, spot has to be more discounted than a May contract, notwithstanding the non-trivial fact that May sets off spot anyway.

The reality isn't nearly as spectacular as the headlines would have you believe. It was only the spot price that went negative, oil out of June is US$22 and September is US$29 per barrel.This is a futures expiry and short term storage issue.

No it's not - June crashed as well in the roll, - June WTI crude oil on Monday plunged by -18.38% to $20.43 - some spot prices have been negative for a while, hence longer dated contracts are moving towards that status, not just the nearby month. Which suggests an enduring problem.

Exactly. WTI crude is land-locked, and it's hard to stuff more product down already-full pipes and into already-full tanks (including the Strategic Reserve). Whereas Brent is shipped, and prices are exhibiting quite different behaviours there.

The Cushing delivery system consists of 24 pipelines and 15 storage terminals. The hub has 90 million barrels of storage capacity and accounts for 13% of U.S. oil storage. The inbound and outbound capacity is 6.5 million barrels a day. Cushing is known as "The Pipeline Crossroads of the World."

Like Henry Hub for US Gas.

A quick search shows Virgin Australia have 5b in debt and 6b in assets. But those assets are likely planes, which currently probably command the same selling price as oil - nobody will buy them. If the Australian Government throw them a lifeline, it will have to be massive. Which is why they are likely to go under.

More importantly - if you bailout one carrier, you have to bailout the other.
This isn't only a bailout for Virgin; it will inevitably result in Qantas sticking their hands out, too.

New headline NZ only place in the world oil prices frozen in 2019 prices still at $2../ liter for petrol must have gone into lockdown early .
Level 3 unworkable for most industries tradies having to wash their tools twice a day extra staff to monitor hand sanitizers only one trade on site at a time !!!building costs go up by how much ?

Summarized 1st paragraph for you - NZ Cartel

And the government despite all it's hollow rhetoric, says nothing and turns the other way. As it does with all the other monopolistic cartels in NZ.

I don't see this is pertinent to my comment, but alas.

I also don't see why petrol prices should drop substantially here in the short term, either. Our market isn't designed that way.
What I do know is that if these prices hold here for much longer, Gull will be absolutely creaming it.

"Site Owner should coordinate works to ensure, unless unavoidable, that only one
trade is operating on a single house site at any given time. "

doesn't seem a biggie. Sure a pain compared to pre-covid times, and will push out timelines a bit, but 'unless unavoidable' give you a huge out clause. It's only a week or two that you'd have the sparkie and plumber on site at the same time.

You would prefer to keep construction closed down than have to provide hand san?
"Make alcohol-based hand sanitiser available throughout the construction site and
show staff where their location."

https://secure.chasnz.org/downloads/resources/COVID19_Health_and_Safety_...

10
up

As if.
Went past a 2 level commercial building site in AKL last summer. Large safety board out front showed all the dangers and PPE required. Included safety boots, hearing protection, eye protection, head protection and others. Were they being used? No, kiwi builders are bullet proof, that stuff is for girls.

Don't forget workers smoking pot on their smoko...

Plasters and painter's. Not many carpenters or other trades puffing durring work hours.

Pots the least of the construction sector's concerns. Meth is becoming a real problem in the trades

Level 3 is just L4 is disguise..but they needed to be seen to do something..but as soon as L3 comes into place you watch it unravel at a great pace. How many tradies building on a remote location will adhere to these rules....none. How many teenagers do you think won't meet up or go walking together. Hunters be back out, trampers can go on local hikes..some can some can't go to school. So many grey areas that you may as well go L2, whatever that will be.

37
up

I dont have a lot of sympathy for bailing out businesses built on debt.

Please governments of the world let the charlatans of the world be found out.

Let the ants that hoarded for a rainy day not have to carry the grasshoppers that sat around playing with sparkly toys and saying look at me look at me.

Then you don't understand Debt.
The whole financial system is based on debt - that's how complex supply chains can function … IOUs/promises can pass seamlessly anywhere.

What you probably mean is businesses with excessive leverage...
But in a deflationary environment … that means everyone

15
up

As opposed to Bill Gates always planning for Microsoft (in the earlier years, when building) to be able to run and pay its bills for a year with no income. Problem seems to be in recent years that companies have spent their cash reserves (and even borrowed more) to fund share buybacks.

Over-financialisation instead of building great companies that do great things.

I guess that's why his 'Bill' Gates - he knew from childhood how to manage $ in traditional means, Not by any means comparable to Neoliberal, get rich quick scheme by NZ OZ US UK Canadian ruling elites, politicians - guaranteed fall back into 'land asset phantom valuation'.

Pointless comment. I've deleted myself.

Most governments of the world are also based on debt, operating deficits year in year out. The USA, despite a "republican" President and Upper House, were already running a multi trillion dollar deficit.

14
up

Richard Branson is a UK tax exile , who sued the NHS, there is very little appetite from the UK tax payer to give him a bail out, perhaps he should ask the BVI for a bailout instead.

Perhaps he feels because he's in the British Virgin Islands and not the US Virgin Islands that it's only fair the taxpayers of Britain should be donating to his lifestyle in these troubled times. That's sufficient reason, surely?

Debt!!!! its a killer

I would be picking half of all airlines around the world gone inside of 6 months but on a positive note the remaining shall be able to slowly build back up.
AIR share price will be interesting to watch price target 50-75cents and more loans and layoffs to get company down to 30 percent of 2019 size but this will happen over next 2-6 months as most staff have rather large redundancy payments and they will wait as long a spossible just in case of a miracle drug/vaccine.

AIR most profitable division was always its domestic fleet, so as long as we get back to level two quickly enough and people can start to fly locally again they will survive ok

Yes agee with that I use to work for them but the domestic flights have been destroyed by having no tourists and now local industries will be slashing all costs and using skype etc and only flying as last resort.
Most of the profit on AIR makes domesticly was last minute bookings for mostly business i.e 90seats sold to cover costs and 5-10 seats sold at premium was the profit but now that model in my view is screwed for a longtime.

Quick, start Indy & Nascar back up!

will oil refinery shares tank today?tankers swinging on the hook in bream bay will they become orphans if their cargoes have become worthless.crazy world.

A supportive factor for crude is today's surge in the crack spread to a 1-3/4 year high, which encourages refiners to purchase crude to refine into gasoline.

Chris Cook

Wow! This WTI expiry looks like the Squeeze to end all Squeezes. Seems to me the oil market paradigm of benchmark futures contracts is definitively f...ed. We need a temporary resolution (cf 1985 Tin Crisis Ring Out) while a new paradigm develops/evolves. No way back, guys #OOTT

"This WTI expiry looks like the Squeeze to end all Squeezes"

https://twitter.com/CNBCnow/status/1252303745628680199/photo/1

Pretty wacky to see oil futures at negative value, let alone the magnitude of the price change. Something that many won't get to see - a financial instrument has a price change of NEGATIVE 302%, in one day ..

For those who don't understand how futures work, it may be difficult to understand how the price of a barrel of oil can be negative.

King Trump and his paper thin ego trying to make himself look good. BBC Coronavirus: Reporter challenges Trump over Cuomo praise clip. "A CNN reporter asked if the clip was appropriate given the US had reached the "grim milestone" of 40,000 deaths." https://www.bbc.com/news/av/world-us-canada-52361742/coronavirus-reporte...

23
up

Egotist nut job. They are likely looking at hundreds of thousands of deaths as Trump encourages his dumb supporters to gather and protest. And all he can concentrate on is his own self delusions!

Perfectly said. I agree 100%.

Surely correct, but I knew where his headings though galvanised local opinion, the masses then the world shall follow to find scapegoat. Some already uttering this is as another Pearl Harbour moment, hope world start to get a clue on that.. Hitler, Japan, 9/11 - history shall repeat. Those gungho blazing, flag patriotic.. fanatic Americans - but hey, what can I say? when you waking up the sleep/drunken giant again..Dr.Evil anyone?

Anything with CNN attached to it, is taken with a heap of salt.

yeah everything orange man does is the worst thing ever....

14
up

NZX50 now the same as November last year.... it was arguably over-valued then. So no damage to our economy, right?

Depending on how much the FED buys up is the key to everyone else.
I am still picking 6000 points NZX just needs some reports showing how screwed our economy now is so give it 1-2 months and max on the first sign of chaos and fear people will sell down even faster that the first time.

From what I've been watching on social media, there have been a lot of 'new investors' jumping into the market after the crash. 'I've never purchased shares before, whats the best way to do it'. Perhaps we've seen the worst, but I personally don't believe it yet.

If ever you see people on facebook talking about anything to do with investing you know the asset class is about to take a bath.

Sell when social media is pumping, buy when social media is dumping.

I guess many people signed up in lockdown to make some money ??? maybe even used the wage sudsidy to buy stocks they believe are undervalued. Using facebook groups is crazy to decide what to buy as I could buy 100k say AIR and them pump them next day on sharsies facebook group and cleanup so sad lambs to the slaughter.
Next 2-3 days may get very messy again keep an eye on oil price which is not pretty and US 10 year yields for next dump.

Looking at depth on AIR now 932 buyers at 1.41 I guess the sharsies group is still saying buy AIR today if this holds above 1.00 dollar by Friday it will be a miracle.

Crazy stuff they pushed it up to 1.485 and now heading south again as buy side dropped away??? now only 89 total buyers..
They have 58000 users and only 78 000 000 in funds at average 1344 dollars per user which in my view is being used just like a casino red or black.
https://www.moneyhub.co.nz/sharesies-review.html

And speaking of airlines. How about that AIR NZ share price!?
$1.38 giving it an implied 'value' of $1.6 bn.
Take out any debt-to-equity conversion by the Government of its $900mn facility and it's 'worth' $700mn.
At 80 cents share price; 2 weeks ago, it was worth ~$900mn - the entire commitment to the Government = Shareholder value = $0.
So. Why is the share price where it is?
I'd guess there is some sort of hurdle in the facility documentation that the Government has to meet if it wants to convert its loan to equity - say, the average of the last 30 days trading. That would preserve some sort of value for shareholders.
But...
The risk they run in ramping the share price ( if that's what it is) is that the Government SELLS its existing stake at what could be seen as a 'last chance price' to get out with some sort of value and convert whatever it sells (the loan + any $0 valued equity) at $0 in due course. Nationalisation, in other words.
Lots of room for thought and mystical plays by all involved.

BW, there is merit in your general view about the increasing role of government in economy and the real prospect of more nationalized businesses. I also find your theory about why Air NZ prices are where they are and the significant role of NZ government convertible loan facility in that relation, very informative. However, for the life of me, i do not understand why you keep referring to a state owned enterprise as example of nationalization? What NZ government will achieve by owning 100% of the shares that it is unable to achieve now? what will motivate the government to do it?

The Government bailed out AirNZ some years back and looked to return it to Private ownership - where it should be; Government do not make better pilots than airlines, or better bankers than banks etc.
But on the odd occasion of businesses of National Importance the current crop of shareholders NEED to get wiped out ( they've driven the company to that point etc and need to be held to account).
Nationalisation gives that business the necessary 'clean-out' that the company needs without removing it from the planet. ie; It's still there and it's still ours; not out of our control.
In quieter times, as happened last time, it's re-privatised.
So I don't advocate Nationalisation willy-nilly; just selectively where we couldn't do without the business, but need new shareholders, and not losing control of the business in the meantime.

How private shareholders who do not control Air NZ, have run it? Are there any shareholder agreements that NZ Government as the majority shareholder has agreed to stay as a silent shareholder? I am not fully familiar with all the background, my comment is based on the face value that a majority shareholder owning more than 50% of shares of a company will control virtually all the affairs of the said company. To the best of my knowledge there are no shareholders with more than 20% shareholding that can select even 1 director themselves.

Interesting theory, but surely the Government putting 51% of the issued shares up for sale will collapse the share price so a bit counterproductive.

Also, that loan facility is just that, a facility. Not sure if any of it has even been drawn down yet. Anyone know?

12
up

- $56 a barrel, Powerdownkiwis $1,000,000 a liter looking a bit off this morning.

Truth please.

For the last decade I have been pointing out that society cannot afford oil beyond a certain 'price'. If we factor debt-repayment in properly, that price is probably south of $80/barrel.

I thought like Goldman Sachs back in '08, I've learned since that economists don't understand that energy underwrites 'the economy' 100%. We will NEVER see $200/barrel. Our 'economy' can't afford it.

Which has serious ramifications for (a) reducing EROEI remaining stocks, and (b) renewables.

But don't misquote me, eh? Lets stick to fact. :)

I have been commenting on the oil price and retail sales for over a week on this forum , pointing out that petrol was 12cents a gallon wholesale a week ago in the US

Its 99 cents a litre in parts is Aussie

Why is petrol and diesel in NZ still the same as before lockdown?

Can be found at 162.9 in Napier today...

Agree. Something smells fishy and it’s not NZF this time. The cheapest 98 is $2.26 locally.

Because the petrol being sold was purchased before the lockdown - greatly reduced consumption - for my wife and I from about $100pw to $0 - cars parked and getting dusty. If my theory is correct expect pump prices to decline late next week.

Petrol companies work on a replacement cost model so in normal circumstances any change in the wholesale price should come through quickly to retail.
Revenue will have collapsed both for fuel and all the other over-priced goods they stock. However, fixed costs remain pretty constant. The retail fuel price probably remains sticky as all companies are trying to cushion the blow.

But when prices go up on the international market they go up at the pump about 3.5 seconds later.

Because oil prices make up less than 1/3 of our pump price: https://www.aa.co.nz/cars/owning-a-car/fuel-prices-and-types/how-petrol-...

Taken money out of bank. Now what should I do with it, what is safest. Stashed cash, bonds, gold, bitcoin or other?

The 30-year US Treasury Bond plus some USD in paper.

12
up

If you have taken it out of the bank then it must be in cash? We have taken rates and insurance off periodic payment and paid in a lump sum for the year. We are struggling to get cash out of ATMs in good volume (BNZ ATM wouldn’t do more than $300 yesterday) but are aiming for six months expenses held in folding. The rest is going into Kiwi Bonds as it comes off TD. Luckily we didn’t renew the TDs for as long as previously. I’m hoping this is a huge overreaction and we will look like muppets because if it isn’t then NZ is fubar.

I'm hearing this all over. Banks began making cash withdrawals harder even before the lockdown and have since continued reducing ATM limits. Not hard to interpret what that means.

Knowing that Kiwi Bonds can be liquidated in 7 days makes me less nervous about cash withdrawal constraints

Have China and Russia just taken down the ICE?

Unintended consequences? Overplayed their hand? Or by quite intentional design?

I'm young.. Does government and the public sector downsize in a recession?
Is it acceptable that the issuance of currency, raising of debt and bailouts are performed without communication of consequence. Are we an educated democracy and free market capitalists, that's what it is called right?
Do we have a plan and a choice?

All sources of tax have dramatically decreased. Fuel taxes, GST and all forms of income tax. There will be pressure to both fund projects but also cut any fat out of government departments (and there's a lot of fat in those). Expect downsizing and cost cutting along side spending.

Generally the bad times are the right time for government borrowing, and reducing the debts in the good times. This is contrary to how the US government operates where they borrow record amounts in the good times and even more in the bad times. That is causing a massive problem in the bond market that the Federal Reserve is trying to solve, but that's a separate topic.

What we may see in action is more of Ray Dalio's approach to deleveraging in the US in the link below. Some of the principles will be applied here depending on how bad everything gets.
https://www.youtube.com/watch?v=PHe0bXAIuk0&t=2s

I did a back of the envelope the other day and in the bigger scheme of things cutting the bureaucracy back doesn't make a huge difference, especially if calculated on a net basis.
I am sorry to say that as there is a lot of wastage and inefficiency.

10
up

Any organisation tends to be run primarily for the benefit of its management. The government bureaucracy is particularly talented in this regard. Thus working for them is seen as safe. Cutting government jobs is not usual at all, as management prestige is measured by how many underlings you have. We need more of them to look after us when things go wrong.

The world looks different depending whether you are in the government bubble or in the private sector bubble.

Do these principles apply to human rights and transparency watch dogs?

This is a prelude to what "running out" of Oil looks like..
No viable supply chain

Some say it will delay renewables, but the chances are that there will be questionings of 'investment' in the likes of tar-sands, too.

Almost never does the prior paradigm return following a hiatus. It's a bit like buying a blacksmith's in the 1930's.

Ahh. So the goalposts have now changed?

First it was "We only have a finite amount and its consumption is growing exponentially."
Now it is "Oh, actually, we are going to run out because of the lack of demand."

You two crack me up.

"First it was "We only have a finite amount and its consumption is growing exponentially."
Now it is "Oh, actually, we are going to run out because of the lack of demand.""

Sorry - not quotes of mine

Yeah - the first was true until very recently. For obvious reasons, it's on hold.

The second is a figment of an ideology-demanding imagination.

An 'economy' not using energy, is increasingly virtual, increasingly tulips.

But 'the economy' was predicated on a finite stock of reducing quality. It was damned if it did, and it's damned as it's didn'ting.

Is it not surprising that dramatic price swings make it impossible to run the industry on the previous models, where investment in extraction requires the ability to sell the product at a profit? If there's no profit to be had. There's no investment, and because it can take 5-10 years to bring new production on line, lack of investment today = production crunch and price spike in the future.

Eurodollar University’s Making Sense; Episode 4: Oil, Oil, Oil
]
https://alhambrapartners.com/2020/04/20/eurodollar-universitys-making-se...

What is the best way to invest in Oil if I take the view that prices will rebound in the future?
Serious, knowledgable comments only please
Thanks

Yvil- I subscrible to a couple of US macro economics sites. Plenty of comments from them on Twitter this morning. Have asked your question So will let you know if a response comes through. Was wondering the same thing myself.

Thanks VI

Right now you would not want to take physical delivery of oil. It's a worthless commodity and you need direct processing capacity and a supply chain to make use of it. Therefore investing or trading for profit would be by using options. The following video is George Gammon interviewing Patrick Ceresna from Macrovoices. Patrick Ceresna does some seriously large trades and has a large amount of knowledge about commodities including gold. The video is a 4 part educational series.
https://www.youtube.com/watch?v=5zBuErUgr6E

A documentary about the largest commodity traders in the world if this does interest you.
https://www.youtube.com/watch?v=WaZUpVX3FAQ

Thanks dictator

Serious, knowledgable comments only please - your a funny chap Yvil demanding such things

There's always the one...

This is from Keith McCullough at Hedgeye.com

Want to talk about oil? Talk about crashes!

It was down almost 20% last week. WTI is obviously crashing again this morning. You had the biggest moves in terms of contango, or at least one of the biggest moves ever.

Isn’t it an amazing thing how gravity wins when the Federal Reserve isn't buying? The Fed is bailing out their cronies in Junk bond debt or super late cycle bad investments, which would include crappy credits and levered equities.

A lot of people say “Don’t fight the Fed.” We’re of course long Treasuries alongside the Fed, so we’re not fighting them there. But we’re fighting them in a lot of different places. These are all big problems.

Don’t forget immediate term downside in the low end of the risk range for WTI today. No, I’m not buying it. It is deep #Quad4 at its core. Don’t forget Quad 4 is defined as growth and inflation slowing at the same time.

In Deep Quad 4 you don't touch Oil.

Yvil - rather than 'investing in', try thinking of 'having'. As in physically.

Too many folk have though like you for too long - artificially tapping into reality in a non-productive manner, then expecting to exchange those bets for something real. That epoch is looking like coming to an end - physical possession of the item will, I suspect, be the new 'invest'.

IG Markets

News from India.... They have built a firewall to keep Chinese investments in check. If your business is getting money from China in any shape or form it needs to go through the government of India.

I take it with a pinch of salt. Not that they do not want to do that or that they do not mean it, but Indian government have zero capability in doing anything.

News from India is that muslims aren't getting equal share of medical care. Modi is evil.

https://www.google.com/amp/s/www.telegraph.co.uk/news/2020/04/19/indian-...

You can't make this stuff up.

The ministry told RNZ in a statement on Friday that two-thirds of the contact details of all New Zealanders in its databases were correct, but one third "may be out of date", and it was still trying to find technology to fix that.

https://www.rnz.co.nz/news/political/414707/contact-tracing-capacity-a-m...

Why is this surprising?

Who regularly updates their electoral role record, for example, when they move? They only do it when the elections come around.

Likewise, I don't believe we currently have information sharing across all agencies for a master record of individuals in NZ, and an approach to managing that master record? That would likely have to jump through a bunch of privacy hoops to get close to being achieved.

Perhaps NHI data would be more accurate, but there would still be a bunch of folk who have incorrect addresses or have changed phone numbers after moving or changing their doctor.

It is the NHI data that's being referred to.

And in other news...(Why this is not a daily headline on this site amazes me..this is bigger then the BTC price etc)
Total paid to date on wage subsidy hits $10.21 Billion.
Application paid for $1,651,410 from 410,984 applications.
205,854 of these self employed.

Lets us not forget a criteria was 30% decline in revenue.

How many of these you think will bounce back up to pre virus levels let alone survive?

Got to admit the criteria bugs me. Except for the minor fact that is caused by the dry weather rather than covid we easily fit the criteria over a number of months. As would many thousands of farms this year.

https://www.theage.com.au/national/flu-season-that-looked-like-a-big-one...

Not only are we winning against Wuhan, normal flu is getting smashed. Hopefully hygiene learnings will become part of our life going fwd.

I've been asking people about the normal flu for a while. My wife goes to get a vaccination and I comment that the trip is the only think likely to infect her right now. What else might we be setting back? Aids in some places (cannot see that one going away). Certainly the flu, could we remove a few strands or indeed encourage some. Head lice? Other STD's? Seems like an opportunity to kill off various things. What might we be encouraging like weeds, insects. I note a load of cats seem to have got less road savvy recently. Will fishing be amazing for a short while just due to fish coming closer to shore more often etc.

I asked people, do you expect we will kill off the flu in lock down? They pretty much all said no, so I said what makes you think it will work on this virus then?

Hooton talking great sense again. Looking forward to hearing how the govt will mitigate the economic carnage, especially on the younger generations....

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=123...

Liked that remarks David.. Tulips - but please, don't say it to the RE production industries here in NZ.
This is great news for China, will snub all those oil reserves cheaply, gearing up for their production machinery.
But who's the customer now? 2020,2021 onward - I'm sure our TWI maintained by worldwide known sentiments about NZ fresh/primary produce status.

So do I assume that with the lack of CO2 in the atmosphere that world temperatures will start to decline?

More likely to go up in the short term due to less particulates in the air.

And the carbon cycle will take a long time to reduce the amount of CO2 in the air even if emissions drop to zero anyhow.

"Breaking news: The Reserve Bank is proposing to remove mortgage loan-to-value ratio (LVR) restrictions, will consult on proposal More soon."
Ffs........ as if the reserve bank's intentions weren't clear enough yet. Let's make that one trick pony jump a few more times.

12
up

Think of all those people who won't be going back to work, the demand shock is going into the record books.
I don't know why the RB feels it needs to support unaffordable house values.

One trick pony indeed! Is this all New Zealand has! What will the pony do though when the fireworks go off?

"It is becoming clearer now that the US virus originated in Europe and may be a deadlier mutation. New research suggests that the ability of the virus to mutate has been vastly underestimated."

I've not come across any research on which mutation of the virus family tree Oz or NZ has? (maybe both). Has anyone come across any information on this?

Tony Alexanders recession advice...

https://www.stuff.co.nz/business/industries/121129119/coronavirus-busine...

Includes
- trim every expense
- make cost cuts
- trim back advertising ….

And so the deflationary pressure builds ...

-

"9. Stop following negative media, speculation on how bad things might get, and measurements of the depth of downturn. Pessimism leads to inaction."

How can people receive Tony's advice if they're avoiding the media?
Positive thinking and avoiding reality is not going to help people avoid financial stress.
Positive thinking and avoiding reality was how people took on too much debt and put themselves into vulnerable financial circumstances which led them to financial stress

Investors vs gamblers... Guess which group doesn't want to hear about the risks and losses.

'U.S. oil prices fall below zero before settling at minus $37.63 per barrel'
WTH ? Better than Negative Rates.
#FillupAndGetPaid.