10-02-26 Merlino
| Carib, Tks for the MS post |
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10-02-26 carib
FWIW:
“Iran will imminently be resolved,” Gorka said in an interview with The Jerusalem Post, while declining to disclose details of the Trump administration’s plans.
Gorka is US counter-terrorism boss. |
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10-02-26 carib
as predictable:
Israel’s top court has overturned a ban on the country’s two main Arab parties taking part in this month’s election |
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10-02-26 spal
Cyber-Schpal on Tanker Rally:
Yes, the tanker rally will continue, though it will transition from an explosive, sentiment-driven spike into a structural, cash-flow-rich consolidation at elevated levels.
While short-term headline risk (like temporary ceasefire rumors) causes periodic pullbacks, the structural fundamentals supporting VLCCs, Suezmaxes, and product tankers (MR/LR2) remain intact.
Perplexity
Four core drivers explain why this rally has structural legs:
1. The Tonne-Mile Multiplier Is Structurally Locked In
The rally is not purely about raw barrel demand; it is driven by distance and transit time.
Rerouting around the Cape of Good Hope, the closure or extreme risk of key choke points (Hormuz, Bab-el-Mandeb, Black Sea), and Russian/Iranian sanction-driven trade re-alignments have permanently lengthened global trade routes.
Moving a barrel of crude or refined product 40% further consumes 40% more ship capacity to move the exact same volume. Even if global oil demand flattens, tonne-mile demand remains near historic highs.
2. Historical Supply Scarcity (The Fleet Age & Orderbook Defense)
Unlike prior shipping cycles where sky-high dayrates triggered massive overbuilding, the supply side today remains constrained:
Near-Zero Deliveries: The global orderbook-to-fleet ratio for crude and product tankers hovered near multi-decade lows. Because global shipyards were choked with LNG carriers and container ships ordered years prior, new tanker capacity cannot enter the market in volume before late 2027/2028.
MB Capital Strategies
Aging Global Fleet: Over 15% of the active tanker fleet is older than 20 years (the traditional scrapping age). Furthermore, the fragmentation and shadow-market isolation of dark-fleet vessels removes real, legitimate capacity from Western-insured commercial routes.
3. Asymmetric Product Mismatches (The Refined Fuel Crisis)
While raw crude logistics get the headlines, clean product tankers (LR2s, LRs, MRs—e.g., TORM, Scorpio, Hafnia) hold immense pricing power. Ukrainian strikes on Russian refining infrastructure and Middle Eastern regional refining disruptions have forced global importers to source diesel, jet fuel, and naphtha from much further distances (e.g., India and East Asia to Europe).
4. Free Cash Flow Generation & "Floor Raising" Time Charters
Top-tier operators (Frontline FRO, DHT Holdings DHT, Okeanis ECO, TORM TRMD) are using record spot earnings to lock in multi-year fixed time charters at historically high dayrates.
MB Capital Strategies
For example, locking in VLCC time charters at $100,000/day for 3-year periods against operating costs of ~$10,000/day guarantees massive cash flow baselines.
Perplexity
These companies are returning 80%–100% of net income directly to shareholders as variable dividends, creating double-digit dividend yield backstops that floor equity valuations even during temporary spot-rate dips.
MB Capital Strategies
Key Risk to Watch: The "Diplomatic Air-Pocket"
The primary near-term threat to equity prices is headline volatility. Any brief diplomatic breakthrough, truce signal, or rumor of choke-point reopenings triggers immediate profit-taking by short-term paper traders.
However, because physical ship availability cannot be manufactured overnight and global trade routes cannot un-wind instantaneously, dip sessions represent buying opportunities for high-yield, logistics-backed cash flows rather than the end of the bull cycle. |
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10-02-26 spal
If the crisis is driven by severed supply routes and transport friction rather than a deficit of raw crude, capital appreciation will not accrue evenly across the energy sector:
The strategic trade shifts decisively from owning the molecule to owning the corridor.
In an environment defined by persistent logistical bottlenecks, hydrocarbon transport, midstream infrastructure, and product-tanker equities command the ultimate structural pricing power—capturing outsized rents while upstream producers bear the brunt of local discounts and rising operational costs. |
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10-02-26 spal
| Adding to tanker positions. |
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10-02-26 spal
As the regime sees its financial runway shrinking toward zero, its willingness to take catastrophic geopolitical risks increases rather than decreases.
This is why the danger of extreme, un-attributed infrastructure attacks peaks in the final stages of economic exhaustion—the regime attempts to force a global economic crisis before its own internal security apparatus fractures.
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10-02-26 carib
| Third carrier on the way.. |
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10-02-26 spal
| Panas - yes - as we discussed. |
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10-02-26 panasonic
Spal, Iran entering desperate zone, from what I read China has widely limited withdrawals from their banks.
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10-02-26 spal
BREAKING: Iran has just struck an oil tanker conducting an outbound transit of the Strait of Hormuz under US escort in the US-backed southern Omani corridor, with a fire and a blackout on board, per UKMTO.
Holy Houthi van Toothi! |
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10-02-26 carib
| AI agents can burn through tokens — the units of information a model processes — with little human oversight. One Amazon project ran 860 per cent over budget after incomplete tasks worked in the background for five months, costing more than $1mn, according to multiple people familiar with the matter.FT |
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10-02-26 carib
| SPAL: good summary.. but a society of differently embarrassed capitalists, I guess, would be much more effective and stable if a majority actually had capital (in different amounts, of course) |
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10-02-26 carib
By Nicolle Yapur, Vinícius Andrade and Maria Elena Vizcaino
(Bloomberg) -- Morgan Stanley emerged from a series of
meetings in Washington with a positive view of Venezuela’s debt
restructuring, citing signs that parties want to advance the
process quickly and that US officials are unlikely to force
creditors to accept a predetermined recovery.
Public remarks from Secretary of State Marco Rubio and
private comments from State Department officials suggest the
restructuring talks are “unofficially on” even as investors
await for a long-delayed debt sustainability analysis, the
bank’s emerging-market trading desk wrote in a note to clients
seen by Bloomberg. That is expected to give a clearer picture of
the size of the economy and how much debt it can sustain.
“We do not anticipate a ‘cram down’ of terms,” desk analyst
Raul Gallegos wrote in a Thursday note following the bank’s
meetings with officials from the International Monetary Fund and
World Bank, US government officials and other experts. “We came
away with a reinforced, credit-positive view of the Venezuela
debt restructuring.”
A representative for Morgan Stanley declined to comment.
The bank still expects the debt restructuring, one of the
biggest in modern financial history, to be completed by June
2027. Centerview, Venezuela’s financial adviser, should come up
with with a macro framework and a debt sustainability analysis
“very soon,” while a license by the US Treasury’s Office of
Foreign Assets Control allowing bondholders to engage in
negotiations would be issued concurrently, Gallegos wrote.
The note comes amid recent speculation around the delays in
the process, which has been putting pressure on the nation’s
bond prices. An article in local media last week reinforced
investors’ jitters by saying the Venezuelan government was
putting debt talks on hold for now to focus on oil projects,
sending dollar notes slumping. A broader rout in global markets
is also pushing Venezuela bonds due in 2027 — some of the most
liquid — below 50 cents on the dollar for the first time in more
than a month.
Venezuela started to default on its dollar bonds in 2017.
Unpaid interests accumulated since have taken the nation’s
financial debt to over $100 billion, but total commitments,
including bilateral loans and arbitration judgments, are
estimated to reach as much as twice of that. The lack of
official data makes the debt assessment by Centerview key to
understand the size of the restructuring and estimate potential
recovery scenarios. The so-called DSA was initially expected for
June.
Investors have also been gauging potential involvement by
the IMF in the process, but Gallegos is skeptical that they
would take the lead.
Read more: IMF Mulls Opening Caracas Office as Venezuela
Engagement Deepens
“We do not expect a material delay to the process, despite
recent news coverage to that effect,” he wrote. “We think the US
government wants to get this process finalized during the life
of the Donald Trump and Delcy Rodriguez administrations, as has
been our base case.”
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10-02-26 spal
| Tankers remain on the rise |
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10-02-26 spal
Unemployment rate 4.2%, Exp. 4.1%
Participation rate 61.8%, Exp. 61.6%
Average hourly earnings 0.1% MoM, Exp. 0.3% |
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10-02-26 spal
"I guess the trouble was that we didn't have any self-admitted proletarians. Everyone was a temporarily embarrassed capitalist."
Steinbeck reflecting on the Great Depression |
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10-02-26 spal
| That exists already in some markets. But it will not be a generalized trend yet IMO and there are way around in or to deal with it. |
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10-02-26 carib
Spal: I cannot disagree with you on facts.
;-)
The political corollary of that fact, however, is that is not impossible to imagine that one day the votes of the 50% without capital will bring about some obnoxious policies such as.. rents control... |
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10-02-26 spal
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10-02-26 spal
| Being a landlord is the functional equivalent of being a high yield lender. |
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10-02-26 spal
3.
This is 50% of all Americans.
End of story. |
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10-02-26 carib
Spal: I think the issue of rent vs purchase can occasionally be an issue of individual preferences, but fundamentally remains an issue of finance. If renting costs you 12% of purchase price, it makes sense only in three cases:
1) you are staying short term, and buying would not be a reasonable option
2) your capital yields much more than 12%
3) you have no capital
I tend to believe tenants who accept to pay 12% moslthy fall under case 3.
Am I mistaken? |
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10-02-26 spal
I never liked US real estate because of all the tax.
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Hann - what tax? Property taxes are passed on. Income taxes are sheltered. Capital gains taxes are avoided.
Did I miss any? |
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10-02-26 spal
Savo - it is not that complex or demanding.
Hann - what you outline is fair and happens a lot. I have never bought into anyone else's RE deal and I do not work with partners - except banks. |
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10-02-26 panasonic
France's CDS rising sharply, doubled in the last 6 months.
Oh là là |
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10-02-26 spal
Spal: congrats.
But, if rent is 12% of value, I would certainly buy rather than rent.
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Yes - you would, but this is actually how the market works so what you would do is simply an isolated preference. |
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10-02-26 spal
Carib - I did - I did a refi and cash out. These are commercial loans and you - normally 3 or 5 year fixed.
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10-02-26 carib
| SPAL: PS. may I ask why you did not refinance the entire asset when mortgage rates were at 3% or lower? |
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10-02-26 hann
US CRE
A friend of mine got offered 20% yield by a US property fund gp. As I understand they've done ok, multi fam + retail.
Automatically felt iffy. Running it through Gemini, typically 5-10 year loans. If u have to refi in this environment even w only minor rental softness, capital values can decline precipitously so lender demands instant equity top up or default. Gemini says best approach for GP is to separate into assets u can save and assets u can't. 20% is band aid and will blow up eventually.
I never liked US real estate because of all the tax.
Is this a fair, correct interpretation?
Tx |
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10-02-26 carib
Spal: congrats.
But, if rent is 12% of value, I would certainly buy rather than rent. |
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10-02-26 savo
spal...just curiosity... do you enjoy the complexity and admin demand of that kind of business?
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10-02-26 spal
Spal, that is what I call a conviction trade.\
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Either that or I am mad - which is always a possibility.
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