scrog

Help for the Guarantors - From an Unexpected Source

I'm no expert, but it seems to me that many players sitting on big unrealized, but marked, losses are hoping for them to reverse so they can get big unrealized, marked, gains back to where they started. Surely there is plenty of bad paper, but some babies are being tossed with the bath water. Unwinding the deal now means turning possible (probable?) paper loses into certain realized losses. Hope springeth eternal.

Investing in a Resource-Constrained World (Part IV)

Resource scarcity is tricky. Statistics about having x years of resource left are not very helpful, because for some resources time, technology and price will increase reserves. For others, there are few lower grade resources and no magic of technology to be had.

Potash is, I think, an example where there is a fixed and well-identified supply of cheap resource, mostly in Saskatchewan. Evaporating sea water to get a PCl precipitate has to be a lot more expensive than just grabbing the precipitate where it accumulated millions of years ago. Other resources with an organic origin--oil--are ultimately similar.

For minerals like copper, iron and uranium, on the other hand, there is a relatively even distribution of ore grades and it is more a matter of learning how to make the best of lower-quality ores. Time, price and technology resolve "shortages" of that sort.

Success in investing for the long run in commodities depends on knowing the difference.

China: Inhibited Growth, But Too Early To Short

While agreeing with the obvious, that China is on a roll for now, what is wrong with pointing out that China's unique population policy may have long-term demographic consequences?