Commented elsewhere I believe, but how is debt beneficial in deflation? Seems like a slowdown would cause the real burden of debt to rise, tho I can see how lower rates that come with deflation and possibly increased demand for debt on the allocator side may be what you’re referring to
the implied carry cost decreases meaning companies will race to refi lower. Less carry -> FCF spikes -> paydown of debt happens faster -> company cleans up its balance sheet.
I do not think we are in a stagflation environment that will last a while. We have some stagflationary data points but nothing that's followed through. Its a possiblity, but I do not believe that even if we are in one we'll be in this very long. We're either deflating or Trump's policy impacts will start longer term policy affects (I think this is inflationary). Plus the rest of the world is trying to restart their economies, the US cannot be trending downward with the rest of the world trending up, its an impossible task right now given how the US is the center of the economy right now.
Sol good video man … I learnt a lot and will spend the weekend building a whole new portfolio structure plan for next 18 months. Lots of good shares on the “why” things are happening and “what” can one do from here.
One question 🙋♂️ I had on $xom, if trump wants crude to hit 50 and drill baby drill, he will get it. Would that not take xom price lower or much lower from where we are today and negate its bullish setup ?
the 50 dollar a barrel weirdly enough creates more bullishness for energy because it won't stay there long as its unprofitable to product oil at that price. So what will happen is a lot of wells will stop and the price will explode higher. That's why energy hasn't gone down anymore, the market is starting to realize the commodity is going higher, its a question if it rips higher or just grinds higher.
Commented elsewhere I believe, but how is debt beneficial in deflation? Seems like a slowdown would cause the real burden of debt to rise, tho I can see how lower rates that come with deflation and possibly increased demand for debt on the allocator side may be what you’re referring to
the implied carry cost decreases meaning companies will race to refi lower. Less carry -> FCF spikes -> paydown of debt happens faster -> company cleans up its balance sheet.
would have to think about it - seems to require the assumption that rates decline in a slowdown. So you’re ruling out stagflation
I do not think we are in a stagflation environment that will last a while. We have some stagflationary data points but nothing that's followed through. Its a possiblity, but I do not believe that even if we are in one we'll be in this very long. We're either deflating or Trump's policy impacts will start longer term policy affects (I think this is inflationary). Plus the rest of the world is trying to restart their economies, the US cannot be trending downward with the rest of the world trending up, its an impossible task right now given how the US is the center of the economy right now.
Sol good video man … I learnt a lot and will spend the weekend building a whole new portfolio structure plan for next 18 months. Lots of good shares on the “why” things are happening and “what” can one do from here.
One question 🙋♂️ I had on $xom, if trump wants crude to hit 50 and drill baby drill, he will get it. Would that not take xom price lower or much lower from where we are today and negate its bullish setup ?
the 50 dollar a barrel weirdly enough creates more bullishness for energy because it won't stay there long as its unprofitable to product oil at that price. So what will happen is a lot of wells will stop and the price will explode higher. That's why energy hasn't gone down anymore, the market is starting to realize the commodity is going higher, its a question if it rips higher or just grinds higher.