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08 July 2020
Video commentary for July 7th 2020
Eoin Treacy's view
A link to today's video commentary is posted in the Subscriber's Area.
â€‹Some of the topics discussed include: Clear need for additional stimulus to support prices, gold firm, oil quiet, renewables outperform, Dollar eases, emerging markets steady,
White House Wants Stimulus by August Recess With $1 Trillion Cap
This article by Jordan Fabian and Kevin Cirilli for Bloomberg may be of interest to subscribers. Here is a section:
President Donald Trump and senior White House officials have said a payroll tax cut, liability reform, tax incentives for businesses to adapt to the pandemic and a potential back-to-work bonus are priorities for the administration.
Short said the White House views liability protections as “essential” for companies to bring workers back and fully re-open the economy.
The administration wants to be sure it’s “striking the right balance between income replacement on the one hand, and ensuring that we don’t have excessively high implicit tax rates on the return to work, on the other hand,” Tyler Goodspeed, acting chairman of the president’s Council of Economic Advisers, said in a separate interview with Bloomberg Radio.
Implicit tax rates can’t exceed 100%, he said, meaning it can’t be more lucrative for workers to stay at home. But any plan will require “not allowing a big blow to household income,” which is core to the economy, Goodspeed added.
Ohio Republican Brad Wenstrup, a member of the House’s tax-writing committee, said the package should address the ability of working parents to find childcare and helping schools to reopen.
“We have a shortage of day care providers,” he said in another Bloomberg Radio interview. “I am going to look for incentives for those type of programs.”
Congress in March passed a $2.2 trillion pandemic relief program, with carve-outs for small businesses and the airline industry as well as multiple lending programs for corporations and Main Street businesses through the Federal Reserve. Treasury Secretary Steven Mnuchin sent out nearly $1 trillion in the first month after that bill became law, through checks directly to American families, forgivable loans to companies and unemployment insurance.
Still, much of that money remains unused. The Treasury Department has yet to disburse any loans from a $25 billion pool for airlines, and most of a $17 billion carve-out for firms deemed critical to national security remains untapped.
Eoin Treacy's view
The idiosyncrasy of how data sets are reported means the rebound in economic activity probably looks better than it is. If an historic decline occurs it will necessarily result in a deep decline. If the rebound from that low is in the order of 10% it will come through as an historic percentage advance and yet the absolute level of activity may still be well below the peak.
Bank Indonesia Agrees to Buy Government Debt to Fund Budget
This article by Grace Sihombing and Tassia Sipahutar for Bloomberg may be of interest to subscribers. Here is a section:
Governor Perry Warjiyo said at Monday’s briefing that inflation is under control and the central bank regularly assesses price and growth dynamics.
“We see so far that demand is not yet strong and inflation is low,” he said. “However, if inflation recovers and the economy picks up, Bank Indonesia has the tools ready, we have
The agreement between the Finance Ministry and central bank allows the bonds to be tradable and marketable, Indrawati said, so Bank Indonesia can use the securities for its monetary
The burden-sharing scheme caps the upside risk for bond supply in the near term, as the bulk of the securities will be privately placed with Bank Indonesia, according to Citigroup Inc. economist Helmi Arman. There’s less likelihood of the central bank unwinding the securities this year or next even
though the notes are tradable, he said in a report.
Bank Indonesia already had been taking a more aggressive role in providing stimulus to the economy, buying sovereign notes directly from the government at primary market auctions since April. Under the latest agreement, Indrawati said the government will double the size of its auction, held every two
weeks, to 40 trillion rupiah.
Eoin Treacy's view
Emerging markets are currently free to engage in quantitative easing because they are experiencing the same deflationary forces of developed markets. That’s an odd set of circumstances but it speaks to the deleterious effects of the global response to the coronavirus and the impact it has had on near-term inflationary expectations.
Eoin's personal portfolio: stock market index long initiated July 6th 2020
Eoin Treacy's view
One of the most commonly asked questions by subscribers is how to find details of my open traders. In an effort to make it easier I will simply repost the latest summary daily until there is a change. I'll change the title to the date of publication of new details so you will know when the information was provided.
Great Bear Expands LP Fault Gold System at Depth: 10.06 g/t Gold Over 31.25 m, Within 4.07 g/t Gold Over 80.50 m, and 57.32 g/t Gold Over 3.95 m, Within 7.26 g/t Gold Over 53.50 m
This press release may be of interest to subscribers. Here is a section:
Chris Taylor, President and CEO of Great Bear said, "The most recent drilling along 650 metres of strike length of the multi-kilometre LP Fault gold system has shown mineralization typically expands at depth. As the system broadens, we generally observe an increasing number of high-grade gold intervals within broader halos of moderate gold grades. Gold mineralization continues to show excellent continuity within and between drill sections in all locations tested to date. A new gold zone adjacent to the LP Fault zone was also discovered at approximately 750 metres vertical depth, consistent with our model of a greater than one kilometre wide structural zone at Dixie that has the potential to host additional new gold discoveries."
The Company has completed 120 of approximately 300 planned drill holes into the LP Fault target, as part of its 5 kilometre long by 500 metre deep grid drill program. Current drill hole locations and results are provided in Figure 1, and in Table 1, respectively.
Eoin Treacy's view
Great Bear’s resource base is next door to the historic Red Lake mine in Ontario. However, the company’s marketing department is almost as valuable as the resource they are proving up. Every time the results of a new drill hole are found, they issue a press release. Those eye-catching results continue to spur interest in the share as a high probability project that will eventually deliver on gold to the market.
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