Wildebeest

Wildebeest
Contributor since: 2009
if you are running a perpetual current account deficit you aren't accumulating sovereign wealth. period.
structural current account deficit. not much else needs to be said.
this comment stream has been about iron ore. You lied about stuff in your article and you backed down from your claim that the majors would fall by 50% and then started talking about 10%. But you are debating yourself on that point -- and even then the change in price has been due to currency not performance of iron ore.
If readers go to their broker and say they are considering buying a foreign listed company their broker will probably raise the matter of hedging the currency. It depends on whether the reader wants to assume currency exposure as well as exposure to that sector.
It is clear that despite your "after the event" conviction about your 10% call you never put your money on it. You just keep making things up so as to try and portray yourself in the best light. You are hopeless at business analysis but a career in politics beckons.
But in any case, as anyone can see in these comments I have asked you about your 50% claim.
So man up and put a date on it.
1. When will these stocks fall by 50%
2. Do you claim victory if it occurs as part of another global meltdown (i.e. when everything is dropping by 50% like late 2008 early 2009)
Man up.
You have not declared investments in either the AUD/USD cross or Rio, Vale, BHP. So that means you are either lying again in your article by failing to declare and interest or lying about the so called profit you have made. This is why no one trusts you Santos.
Most pundits predicted the AUD/USD cross. That is why it is so typically disingenuous of you to cite a +10% drop in e.g. NYSE:Rio vs S&P. The difference in the change in the ADRs vs the home exchange listing was the same amount as vs the S&P -- i.e. the difference solely due to a currency effect. You just make it up with every comment but still won't acknowledge lying in your article.
You are such a buffoon. Wise readers take no notice of you. You back away from being exposed about lying in your article. You back away from your claim about a 50% drop in the share price.
Now you pull this 10% crap from where the sun doesn't shine. Informed readers know that the major iron ore producers trade ADRs on the NYSE. Claims on earnings from those foreign companies are therefore dependent on fluctuations of the US vs the home currencies for those companies. We are in a risk off environment and the US dollar has strengthened. Given the betas for these companies and the current strength of the US dollar the price for these stocks is totally expected. You continue to keep raising these diversions so as to escape scrutiny for lying in your article.
Still waiting for the 50% price fall. Until that occurs you should just shut up and stop embarrassing yourself.
The trouble is Santos that since you have shown yourself to be untrustworthy by lying about data in your articles, who would pay any attention to any of your claims about how much you are making. Just stop lying and focus on trying to build some credibility by being honest.
Anytime you want to actually put your money where your mouth is about your claim of a 50% decline let me know. Until then continue to babble if you want to but we can see through it -- it is all about covering up for lying in your article.
your ability to tell lies knows no bounds. This comment stream started when you lied about import numbers to make your own arguments seem valid. Now you seem to want to lie about what I have said in these comments. You only mentioned 10% after I called you out on your 50% claim and you backed down. Nowhere in this comment stream did I dispute a change of 10%. Price fluctuate all the time. My challenge to you has been about the lies you tell, the fact that you claim these stocks will drop by 50%, and that new entrants are queueing up to enter the iron ore market. Stop lying.
you said they will fall by 50%
Anyone who calls a recession and keeps repeating that when asked will eventually be right. It has been over 6 months since the ECRI first made the call. It is looking like a bad call.
The ports of Dampier and Cape Lambert ship iron ore not copper.
SHFE stocks are rising. LME stocks are falling. I haven't looked at prices on the 2 exchanges lately but this behavior tends to be driven by the LME/SHFE spread.
like I said I guess you didn't read the article. You clicked the link, saw the equation absent net exports, didn't read, came back here and posted your comment. You're also building enough straw men to be a farmer. Nowhere does the author say that S=I.
Had you actually read you would have seen this:
"Beginning with the simple identity for GDP in a closed economy, we have..."
followed by a balanced equation. So the author has decided to take a step by step approach to arrive at the national accounting equation. We then read further on and we see:
"How do the financial flows that occur in an open economy impact the previous discussion of a closed economy? This questions leads to analysis of the more realistic open-economy in which we actually live."
**a more realistic open economy.** So here the author adds the external sector and introduces the national accounting identity. Which balances.
It actually sounds like you realize you got it wrong and are dismissive as a way of backing out. Why not go and read the full article and address the point that John raised?
all you have to do to stop looking silly is just say which equations are unbalanced. But I guess what happened here is you decided to tell us about the flaws in the article without actually reading the article. Hence you are unable to produce these unbalanced equations.
My PhD was in math. What was yours in?
you stated the equations in the article John linked didn't balance. All I've done is ask you which equations didn't balance. You seem to be very defensive. If there is an equation or equations that don't balance why can't you list them so we can all have a look and discuss?
It actually sounds like you realize you got it wrong and are dismissive as a way of backing out.
spaid_fr the reason Keen makes the distinction is because private debt as a % of GDP is so many times larger than public debt as a % of GDP. By obsessing with public debt when private debt is multiples larger the discussion is missing major aspects of what the underlying problem(s) are.
So Keen isn't saying it better to die from a heart attack than cancer, he is saying that it is not helpful to obsess about a heart attack if you have a short time left to live from (undiagnosed and untreated) cancer. i.e. you might want to focus on treating the cancer.
In a closed economy -- which is what they *explicitly* discussed, and what you reproduced from John -- there is no X and M.
Further into the article they introduce global trade. So where are the equations that do not balance? It might be more useful to actually list them rather than keep us guessing.
...and what was your S doesn't equal I point about?
"None of the equations in "Money and Trading 101" balance!!!!"
I just read Johns link. The equations are *definitions* of GDP in a closed economy.
GDP = C + I + G
GDP = C + S + T
what is your basis for saying these equations don't balance? How do you define GDP?
"S doesn't equal I"
I didn't notice anything in the article that said S = I.
"...in this case, it has helped to keep prices higher than they would be as demand is also falling, especially in China, which has been a major buyer until now"
Imports of iron ore by China last quarter were up by ~8% year on year.
Additionally both Rio and BHP have publicly stated in the last 4-6 weeks that they expect demand to continue to grow.
WTF!
And if interest rates are zero then an infinite amount of debt is serviceable. Would that make infinite debt advisable?
His point was about expansion of money supply in a gold system.
"Yes, it will happen at some point. "
thanks for your insight. :)
I'll try again:
2 b) So does that mean that this increased local product which is growing faster than steel production will mean imports are reduced -- I mean if they are substitutable and local production is growing faster than local needs that will happen right?
"Yes, the local product can substitute imports, but you can't compare the tonnage directly because of the lower grades. "
As you know I was asking specifically about processed beneficiated magnetite not the raw dirt out of the ground. I find it interesting that you think beneficiated magnetite is replacing, or will replace, or can replace DSO use by steel mills?
So when a mill runs down its stock of DSO it just shovels in beneficiated magnetite??
Is there some reason why you won't answer 2b?
"But in overall terms, they aren't mining ore in China to build piles of it. It gets used, and it displaces other ores."
So you think beneficiated magnetite is replacing, or will replace, DSO use by steel mills?
...interesting.
Still would like an answer to 2b though. You wrote "2b" in your comment but it avoids what I specifically asked you above.
$35 is a bit dated but thats ok because my point is about the upper bounds.
How long a $140 producer keeps producing at a loss clearly depends on the magnitude of the loss. e.g. if they receive $130 then they can "last" longer than if the price is $50.
As I have commented before your doomsday scenario for iron ore lacks internal consistency.
...can you answer 2 and 2b above?
okay let me try and make the question a bit clearer for you because I would like an answer.
1) what is the typical cash cost of this new chinese production that you have mentioned in your article. How long will they continue to produce if the price is below this level?
2) So you believe that a steel mill that uses DSO from Australia or Brazil in their furnaces can stop using that imported ore and switch to the local stuff after beneficiation...and vica versa?
2 b) So does that mean that this increased local product which is growing faster than steel production will mean imports are reduced -- I mean if they are substitutable and local production is growing faster than local needs that will happen right?
1) It was a simple question but a rambling answer. Are you saying that chinese miners are producing at a loss? If not then who exactly is going to "continue producing at a loss" "early in this kind of situation".
...and what kind of situation are you referring to. I've only asked a simple question about cash cost not about situations.
==========
but as part of your non answer to my question you talk about capacity leaving in 1-2 years if the price doesn't recover. What is the price going to drop to such that capacity leaves? At the moment the price is 3 times cash coast. What price is required to stop capacity leaving?
2) So you believe that a steel mill that uses DSO from Australia or Brazil in their furnaces can stop using that imported ore and switch to the local stuff ...and vica versa?
"Sure, these are usually (but not always) less valuable, lower grades of iron ore. Still, they get turned into steel and should displace imports to some extent"
Q1. What is the typical cash cost of this new Chinese production?
Q2. What is the basis for believing that this chinese product competes with imports?
China's imports of iron ore were up year on year in Q1 as well.
Wow an article about demand for copper from China without a single mention of import quantities of refined copper. It is not as if this data is secret.
Apparently the scrap market is news as well. For me the funniest moment was:
"So far, the metal has not reached the $8,445 price in 2012.
If the trend continues, some copper producers could scale back production. "
So prices at >$3.50lb, cash cost at signficantly less than $1lb, import volumes into China strong -- yep that is certainly an environment in which you would scale back production.
...where do these "writers" come from?