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AllThingsVentured Profile picture
AllThingsVentured
@AllVentured
Trade, shipping, commodities. Not investment advice.
May 19 • 12 tweets • 5 min read
I remember in fall 2023 when the unemployment rate first spiked 40bps nearly triggering Sahm rule, delinquencies started to go parabolic, student loans were supposed to go into repayment (before 2 more years of Biden can kicking) someone said that equities couldn't go lower when EVERYONE was bearish. This turned out to be the correct take. Markets went higher -> wealth effect -> reflexive economic strength along with fiscal can kicking heroics by Yellen and the Biden Admin to get through the election.

At the time, I tried to imagine a scenario where everyone was bullish DESPITE an incredibly bearish backdrop and couldn't. But here we are.

Read the comments on any bearish data or bearish takes today. Lots of "markets only go up". No rationale other than technicals and markets usually go up.

Sure the soft data hasn't been a reliable indicator in recent years but the hard data is starting to roll but nobody cares because "markets go up". And nobody is looking forward - the headwinds to the hard data are massive and obvious.

The response to a confluence of bearish factors is always "Fiscal dominance" or "Trump will jawbone the market up" or "who cares chart says up". Nothing like price to drive sentiment.

I'm personally exhausted. I'm starting to be concerned that the degens might actually be right and we go straight to Zimbabwe without the global margin call step.

At the same time my own feelings tell me we might be near that moment where positioning is back offsides and we are due for a mean reversion.

Logic tells me to stay the course - The bearish case is far clearer than it was in 2022 or anytime since yet sentiment is the most dislocated from reality today. And although I have always thought we would get the global margin call before the Zimbabwe, the fact that the Fed is not cooperating gives me more conviction that the Fed will require things to get MUCH worse before taking action to enable the Zimbabwe regime to begin.

I can only hope that the regime shift from margin call to Zimbabwe will be obvious when all is said and done and I can nail the turn from net short to levered long. Probably naive to think I can nail the path but this feels like the juice is worth the squeeze. GLTA. Absolutely insane.
Mar 21 • 4 tweets • 2 min read
Shipping cheat codes:

In a shipping bull market, you want to own big ships.

In a shipping bear market, don't own shipping.

In neither scenario should you own small tankers. Large crude tankers fetch much higher rates and margins in a tight market and fall back to the same near breakeven levels in a bear market.

Mar 19 • 13 tweets • 3 min read
1/ FINALLY some good data on US port calls vs Chinese fleet proportion regarding the proposed Chinese ship fees.

🧵TLDR: Most shipping trades will easily find non-Chinese tonnage to call US ports to avoid the fees

h/t Omar/Jefferies the first reasonable take vs the hysterics Image 2/ Here are the ratios of non-Chinese fleet to US share of global trade to show how many times over US trade is covered for each segment by the non-Chinese fleet:

Drybulk - .5/.075 = 6.7x
LNG - .9/.2 = 4.5x
Boxships - .6/.15 = 4x
Tankers - .7/.18 = 3.9x
LPG - .85/.45 = 1.9x
Dec 5, 2024 • 8 tweets • 3 min read
The main reason #tanker rates and equities have sold off from their June highs?

➡️Huge global inventory drawdowns⬅️

The 150mm bbl drawdown since early June represents 30 VLCC equivalents that went unemployed vs a flat inventory counterfactual.

thread 🧵 2/ With inventories at bottom of 5 year averages, it seems unlikely that inventories decline meaningfully from here. Just returning to flat inventories adds back the +30 VLCCs of demand. Adding the expected 1mm b/d supply/demand growth in 2025 requires another +30 VLCCs.
Oct 8, 2024 • 8 tweets • 3 min read
1/ Buried under all of the Middle East and port strike chaos headlines, a very important debate about a carbon tax on shipping is ongoing at IMO meetings this week.

ft.com/content/407307… 2/ Support for a carbon tax is gathering momentum as it would be one of the most simple, economic, and effective ways to lower carbon emissions in the shipping industry. On the other side of the debate are middle income countries responsible for the lion's share of world trade
Feb 23, 2024 • 5 tweets • 2 min read
🚨 Breaking 🚨

Biden Admin sanctions 147 vessel Sovcomflot fleet as foretold in the below thread.

A nice gift on a Friday. If history is a guide and we can use COSCO sanctions as a proxy, Tanker longs should do exceptionally well next week.
Image These sanctions actually DO work.

What few vessels the US has sanctioned due to Russian oil prior to Sovcomflot have been mostly stranded due to the sanctions.
Image
Image
Oct 9, 2023 • 8 tweets • 3 min read
1/ Just like with the Russia/Ukraine conflict #tankers are likely to be the #1 beneficiary of renewed enforcement on Iran oil sanctions and associated changing trade patterns 🧵:

2/ The Biden Admin is in a tough spot. If Iran orchestrated the latest conflict in Israel, they will have to respond. How to do this without impacting oil prices? After all, turning a blind eye to existing sanctions has allowed Iran to increase exports by a huge ~500kb/d over the past year keeping a lid on prices.
Image
May 9, 2023 • 9 tweets • 3 min read
1/ Even if Biden succeeds at forgiving up to $20k of student loan debt and the Supreme court rules it as legal, it only eliminates $430B of the $1.6T of student loan balances currently in forbearance and scheduled to begin repayment by the end of August. Image 2/ Even though 71% of borrowers will still have a balance after $10k-$20k forgiveness or will not receive any forgiveness due to income, ALL eligible federal student loans currently remain in forbearance until this is resolved. Image
Apr 28, 2023 • 7 tweets • 3 min read
I had previously speculated that China's impressive >10% growth rate in coal production was unsustainable.

YOY production growth continued to decelerate in March and is now being outstripped by power demand leading to a near doubling of imports YTD.

breakwaveadvisors.com/insights/2023/… In prior years which saw abnormally large % increases in coal production like 2011 and 2015, the following year tended to be flat to down. Meanwhile China just approved the most new coal fired power gen capacity since 2015. ImageImage
Mar 11, 2023 • 5 tweets • 2 min read
1/ Regardless of what you believe about the $SIVB outcome, instead of the lazy gradual decline, deposits are about to fall off a cliff.

Depositors already had every reason to take their money elsewhere for yield, and it just became irresponsible not to:

2/ This is terrible for bank profits.

Banks will need to either pay a competitive rate on deposits or lose them.

How much of this is baked into bank earnings estimates?

Feb 15, 2023 • 9 tweets • 3 min read
1/ The rally in stocks since October has been made possible by massive liquidity injections by the BOJ, PBOC, and TGA drawdowns. Let's look at these liquidity sources going forward:

BOJ - This liquidity is tapped out. They can't buy more JGBs if they already own them all. 2/ TGA is the next easiest and totally calculable. ~$300B more of drawdowns (liquidity injections) due to debt ceiling then also tapped out.
Dec 22, 2022 • 7 tweets • 3 min read
1/ Did I bottom tick oil with my Dec 9-12 oil tweetstorm? I don't have a crystal ball but lets review why I put myself out there and made a call.

🧵 2/ China is reopening. Don't overthink this as many on Twitter are. Omicron will burn through in 3 waves culminating with the last as people bring covid back to to their workplace after visiting family for Spring festival. China fully open in March.
Nov 21, 2022 • 6 tweets • 2 min read
1/ As investors we are constantly looking for the BEST place to put our money. For philanthropy I believe microfinance to be the most impact per $ spent.

I set up a FinTwit team on Kiva and will be matching the first $100k of loans through our team page.

kiva.org/invitedto/team… 2/ I am incredibly grateful for the people and generosity of time and insight on FinTwit, and feel very privileged to be part of this community. I see so many great takes on what is wrong with the world and how it could be fixed. Discourse is good, action is better.
Nov 3, 2022 • 4 tweets • 1 min read
Wow. After seeing the tape and listening to the $BTU call I was expecting MUCH worse. I actually don't have a problem with anything said at all. Many mentions of "doing what's best best for shareholders". Confident outlook on sureties resolution by end Q1.

Adding here. People are freaking out about North Goonyella vs share repurchases. THESE ARE NOT MUTUALLY EXCLUSIVE. They are getting the ball rolling on the best capex per ton met expansion out there. Capex will be back weighted. A DELUGE of FCF for share repurchases in the interim.
Oct 13, 2022 • 7 tweets • 2 min read
1/ Let's talk about the right tail risk 🧵

Not only was I taking short exposure down this week, I was also buying some right tail insurance. 2/ The bears have crushed it this year. Congrats to us.

But it's important to remember: had JPow pulled the Burns card instead of Volcker in the Fed charades game, this year could have gone very differently.

And central bakers can still flip that switch whenever they want.
Jul 31, 2022 • 5 tweets • 1 min read
1/ SHORT ideas 🧵:

I don't see nearly enough short idea generation outside of the usual battlegrounds (i.e. $TSLA) on fintwit. I thought I'd share the current themes and securities I'm currently short or thinking of shorting in the coming week.

Feedback appreciated. 2/ THEME - Capital intensive new economy cash incinerators:

📉 $NKLA & $LCID - why roll the dice on highly manipulated $TSLA when you can short these?
📉 $WE
📉 $BYND
📉 $PLUG
Jul 28, 2022 • 4 tweets • 2 min read
1/ If it weren't for the recent merger of the two largest US listed tanker cos $EURN and $FRO, $NMM would be the by far largest US listed shipping co by # ships.

But whereas $EURN and $FRO trade at >$.90 per $1 of NAV, $NMM trades at just ~$.27 per $1 of NAV and a fwd PE of ~1X 2/ $NMM has traded at a huge discount to both NAV and its peer group due to management concerns and skepticism that huge profits would ever be returned to shareholders.

With the $NM hangover resolved, and a $100M buyback (~15% of shares) authorized this discount seems overblown.
Jul 13, 2022 • 4 tweets • 1 min read
Railroad strikes in the US and UK. Unresolved contract negotiation for West Coast port workers. This could send floating warehouse rates to the moon.

Might finally be time for a $ZIM punt. Container dwell times are now back near all time highs and are the leading indicator for port gridlock with peak season just starting.

If you can't get the boxes out of the port then you can't unload ships and the ships begin stacking up offshore.

freightwaves.com/news/long-beac…
Jul 6, 2022 • 6 tweets • 2 min read
1/ 2022 is on pace to see the lowest level of ship demolition since 2008.

This is into a global merchant fleet that has more than doubled in size over the same period.

High rates have ships out trading longer which means the fleet is getting older... for now. 2/ Although high shipping rates are likely to keep demolition muted for the balance of 2022, at some point this trend will need to reverse as 22% of the global fleet is now over 15 years old.

May 22, 2022 • 6 tweets • 3 min read
1/ Doing a deep dive into recent $BTU earnings calls to see if we can piece together PRB coal pricing for 2023:

On the October call, $BTU was still pricing the balance of 2022 volumes and trying to leverage it into multi-year contracts: 2/ On the February call we learned that around 55% (50M tns) of 2023 PRB coal was priced, some meaningful portion of which was priced in Q4.

Seeing as how spot prices more than doubled days after the Oct call, $BTU likely had serious leverage to push for much higher 2023 prices
May 6, 2022 • 5 tweets • 2 min read
1/ Ok... so $BTU had an epically bad quarter. Negative cash flows, shareholder dilution, yada yada. BAD.

Still trying to understand what I am missing here.

$462 million of cash outflows in Q1 were hedges and working capital all of which comes back with shipments + hedge unwind 2/ About 1/3 of the hedges unwind in Q2 and if inventory ships and normalizes, this will be >$200m of added cash flow to Q2 in addition to normal cash generation so >$500M in FCF in Q2 easy?