Monday, February 08, 2016

Watch out for this space - Big predictions coming up soon

Well! since the time, i wrote last time, i was wondering why people are taking so long to understand the basics of distressed finance. I see the TV anchors of business channels shouting over the roof to buy this and that stock, with logic as funny as this is V shaped, this is W shaped.

I am seriously at loss of understanding, why there is no "NO NONE SENSE BUSINESS NEWS CHANNEL".


Anyway, there is something exciting happening in other part of the world

Venezuala gold reserves are down by $3bn and it is being rumored that they are going to pay of the Deutsche Bank with the gold swap. What we might see is a situation similar to India in 1991, when gold was sent in plane. But with Venezuala, the situation is different as this gold was never with them. Chavez struggled hard to protect this gold from bankers and he was quite successful, but his successor Mudro, lost it all.

What will be implications on Canadian Dollar ? Watchout

One more exciting thing is Allepo fall to the Assad. This is hinted by rumors of "Ballon drops practice for ground drops" by Qatar and Saudi. This is exciting as US has raised its hands way back in October, when it was rumored that Kerry has conveyed to Assad - "boy u can stay, but give me some face saving story".

What will be the implications on Oil? OPEC is no longer there, everyone is on their own

Scenario 1 - Shia v/s Sunni - Competition for gaining market share increase, which means Iran gets the Euro payments, it has been shouting for.

Strategy - Simply short oil again but not below $20 as they can't sustain this for long.


Scenario 2 - Shia v/s Sunni - Saudi takes the nonsense step of blocking some Iranian tankers or Persian Gulf traffic. This will temporary lead to increase in prices as signal of conflict but then "Big Daddy is not stupid". They increase flows from Africa and the inventories again will pile up. So, such an event can't sustain prices for more than 6 months.

Strategy - Long for 3/6 months and then again start shorting by taking into account the inventory levels

Scenario 3 - US/EU plays a foul - stops Euro settlement or SWIFT access by using some alibi or sanctions clause or highlight Iran-North Korea link. This can either lead to a arm-twisting scenario or a full blown out war. This will be a really dangerous scenario.

Strategy - Long














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