Comments of the Day
28 October 2020
Video commentary for October 27th 2020
A link to today’s video commentary is posted in the Subscriber’s Area.
Some of the topics discussed include: bitcoin breaking out, gold steady, oil stable, European stock markets rolling over, capital intensive speculative ventures continue to receive ample capital, fintech moving to outperformance.
Email of the day – on solar/wind power to generate hydrogen
The Australian government just approved fast tracking the Asian Renewable Energy Hub (asianrehub.com) proposed to be built in the Pilbara. It will generate green hydrogen from water using solar and wind energy that can produce clean ammonia to power ships, generate power and be used as a feed-stock for industrial processes. They say it will be the world’s biggest power station at 26,000MW, covering 6500 square kilometers of land. It will start exporting in 2028.
Thank you for this informative email. Among the challenges faced by renewables is the distance of the primary locations wind and solar are available from the primary consumption markets. The only way to bridge that gap is to transport the energy produced to where it is needed. Producing green hydrogen and ammonia is a solution to that challenge and both are valued added commodities with a ready evolving market.
JPMorgan Sees Cryptocurrency Commercialization As Bitcoin Rises
This article by Bill Peters for Investors Business Daily may be of interest to subscribers. Here is a section:
JPMorgan Chase’s digital currency is in commercial use for the first time, and the bank has built a new business around the technology underpinning the coin. That follows a Bitcoin price surge over this month.
JPM Coin — a cryptocurrency JPMorgan launched last year — “is being used commercially for the first time this week” by a big technology client, which the bank did not identify, CNBC reported on Tuesday. The client is using the cryptocurrency for cross-border payments.
The bank has also created a new segment devoted to cryptocurrencies and blockchain, the record-keeping technology that enables cryptocurrency transactions. That segment is called Onyx.
JPMorgan hopes blockchain could reduce errors and rejections in cross-border payments if banks are able to verify account information was accurate and regulatory compliance, CNBC said. Such payments can slow down as they pass through the global banking system.
Takis Georgakopoulos, JPMorgan’s global head of wholesale payments, told CNBC he believes the world is “shifting to a period of commercialization” of blockchain and cryptocurrency.
Eoin Treacy’s view
Banks issuing their own currency was relatively commonplace until the last few decades and the UK still has some vestiges of the practice. The ability of anyone with sufficient skill to create their own cryptocurrency is a testament to how early we are in the digital money cycle. As it matures and governments take a significant interest the range of what is possible is likely to coalesce around government sponsored digital currencies.
Rolls-Royce Gets Investor Nod for $2.6 Billion Equity Sale
This article by Charlotte Ryan for Bloomberg may be of interest to subscribers. Here is a section:
The package is aimed at seeing Rolls-Royce through to 2022, when the company expects to resume sufficient cash generation alongside a gradual recovery in demand for air travel. Chief Executive Officer Warren East has also said the company could sell assets as it repositions for the future.
“We didn’t want to put the business and our shareholders’ interests at risk by gambling on the situation next year so that’s why we chose to go with this package now,” the CEO said at an investor meeting.
Even with funding secured, Rolls-Royce still faces an uphill road to recovery. The twin-aisle planes the company supplies are predicted to take until at least 2025 to recover to pre-pandemic levels and the group has announced plans to cut 9,000 jobs.
Eoin Treacy’s view
The 10 per 3 rights issue is due to close at November 11th and will ensure Rolls Royce has sufficient capital to see it through the next couple of years come what may. It’s a worst-case scenario funding raise and will take place against a background of low interest rates and high liquidity.
Coronavirus: Government throwing ‘lit match into a haystack’ by discharging Covid patients to care homes
This article from the Independent may be of interest to subscribers. Here is a section:
The government has been warned it is throwing “a lit match into a haystack” by discharging Covid-positive patients to care homes, with politicians demanding that the safety of residents and staff is guaranteed under the new policy.
During the first wave of the pandemic, approximately 25,000 hospital patients were sent to care homes – many of whom were not tested – which helped spread the virus among residents. Around 16,000 care home deaths have been linked to Covid-19 since the start of the crisis.
The strategy was one of the government’s “biggest and most devastating mistakes” of the crisis, says Amnesty International, and questions have been raised over the decision to introduce a similar policy as the UK’s second wave intensifies.
As part of the 2020 adult social care winter plan, the government has called on local authorities and care providers to establish “stand-alone units” – so-called ‘hot homes’ – that would be able to receive and treat Covid hospital patients while they recover from the disease.
There is also an expectation that, due to housing pressures and a shortage of suitable facilities, some patients may be discharged to “zoned accommodation” within a home, before being allowed to return to normal living settings once they test negative for the virus.
Councils have been told to start identifying and notifying the Care Quality Commission of appropriate accommodation, and to ensure high infection prevention standards are met.
Eoin Treacy’s view
Battling the pandemic is as much about public relations as it is about medicine. Everyone knows elderly sick people are by far the most at-risk group. Stuffing elder care homes with people who may still be infectious is a recipe for another public relations disaster.
Eoin’s personal portfolio – new trading position opened October 21st
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.
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