John Hjorth

Wall Street Journal [July 4th 2019] : Farmers Built a Soybean Export Empire Around China. Now They’re Fighting to Save It. From the article :

Happy 4th to all!, And hereby also a special greetings to Sanjeev, turning the sharp corner of 50! -Enjoy your day! - I hope you'll be spoiled!

Scorpioncapital, I [naturally] can't quantify it, but I suppose it'll be unpleasant for somebody - perhaps very. If I knew how to play it, I would certainly do. But I don't.

European Banking Authority : EBA Basel assessment sees impact driven by large banks [July 2nd 2019].

RuleNumberOne, Please stop spamming this topic with what I consider rubbish [at least in your last post here in this topic - naturally links to articles about what's discussed are OK]. This topic is actually started by what I consider one of the most successful & competent investors here on CoBF with regard to banks, who wants to discuss. Pushback is always good. But please keep it fact based. That said, your pushback has actually been massage to my own home bias, as a Danish citizen. I appreciate your energy to post links to relevant stuff. Time for me to lookup some IMF country reports and start reading again. Thank you.

Pulled out all available cash in my fathers account again today. Sold a bit less than one third of my fathers position in SAN today [at a loss]. It appears the account won't stay under the set goal/max. exposure, set now more than 5 years ago. I will drag out the cash [for good], when it's available after two days, if things don't fall back again. ... Sold a bit more SAN today.

Thank you for your posts, Dynamic & longinvestor, By an unforced error, - and I apologize for that - I posted the Siemens Gamesa News Announcement here - I actually don't know where my head was, when I was posting it here in the "general news" topic instead of the recently started "Berkshire Hathaway Energy" topic. Let's continue talk about it there instead of here.

Siemens Gamesa News Release : Siemens Gamesa awarded the largest repowering order to date in North America by MidAmerican Energy [July 2nd 2019].

I'm sorry for double posting here in this topic. Now back to Viking's starting post here, ref. the quote above. I think it's important here to distinguish with regard to geographical areas. [For my part : Between US banks and European banks - I own both.] US Banks : There seem to be a general sentiment as of now, that US interest rates will be lowered [also here on CoBF - at least partially] - perhaps even so the steering interest rates may end up near zero, or even negative. With regard to that, I'm in the same camp as Jurgis [posted by Jurgis somewhere else here on CoBF recently] : Why should the FED lower interest rates, when USA is running at low, but still a fairly steady & positive clip, combined with a public deficit? [i don't get it, but then again : What do I know.] European Banks: I can here only speak as Danish citizen, what I can say is that the pressure on Net Interest Margin in Danish banks is very real, and as a Danish bank customer, I can feel & see it as being very real. The consequences are already here and visible : The reach for non-interest earnings in Danish banks has become more aggressive, and to me it has already crossed the line of sound, healthy, prudent & most of all : honest banking. [To me "honest banking" is in the interest the customer, not the bank.] I'll document it here, with anecdotal stuff, based on personal experiences and documentation. Stuff about Danske Bank however will go to the topic I started about Danske Bank A/S in the Investment Ideas forum today. - - - o 0 o - - - This naturally matters for investing in both US Banks & European Banks. I may be wrong about the future development of US interest rates, and what's going here may be relevant for a judgement about what will happen with the behavior of the US Banks.

Hi Jim, It's a personal pleasure for me to "meet" you for the first time here on CoBF. Here I'm just grabbing a post by RuleNumberOne in the WFC topic in in Investment Ideas forum : [Embedded quotations in RuleNumberOne's post omitted here for less dense posting.] Please note the following in the article linked to by RuleNumberOne: Add to that the 5 percent down payment of non-borrowed money imposed requirement mentioned by kab60 earlier in this topic. Please also note that most of the numbers mentioned in the article are YE2017 numbers. A lot of water has run through the river since then, and the imposed regulation has had effect, to avoid speculation, home-flipping and other similar kinds of folly going on, because a lot of interested buyers has been pulled out of the market, because they have lost the ability to bid in as prices have gone up, creating what I percieve as a high equilibrium - which was the purpose of the new regulation. So for tiny Denmark, - in short - the answer to your question is actually : No. Draghi [et al.] does not decide or have jurisdiction/power over supplementary national regulation. When looking on what's going on in EU with interest rates etc., you can't just look at it as whole. The economic situations & financial systems are only to various degrees similar among european countries.

Thank you, gfp, That explanation makes good sense.

Pulled out all available cash in my fathers account again today. Sold a bit less than one third of my fathers position in SAN today [at a loss]. It appears the account won't stay under the set goal/max. exposure, set now more than 5 years ago. I will drag out the cash [for good], when it's available after two days, if things don't fall back again. - - - o 0 o - - - It's starting to feel like raising a tent on a windy spot on sandy soil, where the tent plugs on the windy side of tent get dragged up from the soil by the wind pressure on the tent, where you use the rubber hammer again and again on the plugs. The difference between this activity and the "tent-plugs-won't-stay-in-the-sandy-soil-because-of-wind" analogy is that this activity does not feel annoying. I begin to understand how Mike [boilermaker] feels when Mike has been selling Berkshire B puts below 200.

It's time of the year for the usual gift to the five foundations from Mr. Buffett. Edit: Friggin' mind boggling numbers in that press release ... - heck, the only number related to Berkshire that I can come up with that isn't mind boggling is the number of shares oustanding! [ ; - ) ]

Thank you for the elaboration here, kab - it's much appreciated, & nice to actually know.

Great that you shed some light and nuances on the Danish situation about real estate prices, kab, thank you, I have a couple of more technical questions about how your mortgage with negative interest works : 1. In your post about your mortgage you indicated, that the negative interest isn't paid out to you, but is booked as a repayment on the principal [,so despite you have a standing loan/mortgage for the first ten years, the balance of the mortgage is going down over time with the negative interest payments]. Have I understood this correctly? [Cigarbutt actually also posted about this phenomen recently here on CoBF not so long ago.] 2. I suppose you are still charged reserve fund contributions, and are paying them. Have I understood this correctly? - - - o 0 o - - - Yes, indeed, the whole thing is very weird.

RuleNumberOne, Perhaps I misinterpret your post here, but please try to invert your post, by assuming a 10 percent price decrease instead. Draghi & Volcker do not set market prices on real estate - buyers and sellers do. This post is not meant condescending towards you. I assume we all know about the mechanics of the use of leverage, actually.

I see Denmark mentioned in the quote by Viking in the starting post in this topic. This post is about my personal perception of Danish interest rate conditions, based on my actual cursory knowledge about the Danish market for mortgage bonds etc. Finans Danmark : Bond rates. Translation of legend : Red: Short Euro rate Brown : Short rate [DKK] Grey [sort of] : Long rate [likely DKK] So the long [likely 30 years] fixed interest rate is right now 1.647 %. On top of that you have to pay a spread of ~1 % to the mortgage institution, in Danish "reservefondsbidrag" [translates to "reserve fund contribution"], which is the mortgage institutions running earnings on the mortgage. The spread can be a bit lower, based on your rating. Mortgages with variable interest are typically rolled over after 1, 3 or 5 years. In Danish called "flexloans" - F1, F3 or F5. Refinancing rates are set under bond auctions at certain dates. What happens if the Danish mortgage bond market is - perhaps more or less - frozen at the dates of the future auctions? What happened to GGP comes to mind here. To buy a home with mortgage [generally max. 80 % in mortgage] you have to have 5 % of the price as available cash, which can't be borrowed money, and after all other personal debt deducted [i think student loans in this particular calculation is excluded though.] Based on your personal budget and a standardized minimum available amount of money for consumption based on the household composition, you are eligible for the mortgage for the house, if you can afford a mortgage with repayments over 30 years [likely depending on your age also] with fixed rate. [in this budget you naturally have to include the load of repayment of student loans.] This practice is set by the Danish FSA - so to say as a "soft", but still de facto standard, meaning your bank can provide the last 15 % of the price as second layer financing, if it's willing to make a loan provision for the deviation. I'm not up to date on the actual standards for minimum available amount of money for consumption for now some years, but last time I asked about it, I was surprised how high they were. You can opt for a "punch card" on your mortgage with ten punches [each punch is a year without repayment, subject to that the mortgage is held within agreed duration], if the economic situation for the total household changes to the worse, compared to the budget [unemployment etc.]. This practice makes a lot of sense to me. So the "free" debt, that really isn't free [but still cheap], is certainly not available for everybody here in Denmark.

Viking, In the "Buffett/Berkshire - General news" topic some of us discussed recently the issuance by Berkshire of 20 & 40 years debt at very low rates. There, shalab proposed, that what's going on with the US yield curve [at least partly] may be explained by capital inflow from Europe seeking better yields [perhaps both short and long yields]. That explanation makes sense to me, at least as an explanation partly. The sentiment now popping up about rate cuts in the US by FED certainly also has moved the USD/EUR pair a bit, making the USD weaker relatively. When I look at my portfolio, I was at all-time-high on April 29th, measured in DKK [, pegged to EUR]. - - - o 0 o - - - No matter that, it feels discomforting to observe this phenomen. Personally, I try not to think too much about it, trying to tune out all the noise, simultaneously improving my internal rating & popularity by taking care of my other compounders : Roses [mainly climbers & ramblers] and hostas, and building up the lawn again after last years drought. [ : - ) ]

"The resources sector is like a bad girlfriend. She's volatile, inconsistent, and sometimes she treats you good but most of the time she's crazy. And while you're wasting your time with her, there's all these other beautiful women you're missing out on." H/T Pytia Cap(ital).

This post by Paul combined with the last post by Richard brings up a question for Paul: Wikipedia : Euphoria Isen't there an element of multidimensional relativity to the phenomen? -I mean : 1. It can be related to several kinds of activity, ref. the Wikipedia article, 2. Some persons engage in it, some don't [, perhaps because the euphoria isn't triggered or an effort is done keep it under control]. In casu for Paul, I think that it's likely that 20+ years of investment experience has made Paul less detached to things going in certain areas in the stock market, i.e. - & here, - under the tech bubble in 1999? [Meant as another way of saying : "Paul does not "feel" [perhaps the word "perceive" would be better] the euphoria because he "minds his own business" to a greater extent than earlier with regard to investing, likely based on experience & training."]

WayWardCloud, In a humble manner I will suggest that they are perhaps hard to spot because they stand behind others. If you read the last shareholder letter by Larry Fink you'll see that he is of the opinion that there is an urgent, almost desperate, endless & ever growing/expanding need for help. If you read the shareholder letter, please bear in mind what Mr. Buffett has written about helpers. Perhaps that also leads to the conclusion that those people are not optimistic, more like "un-opinionated" [<- or something like that].

I will here suggest reading the posts recently, with links and attachments, by ajc, here on CoBF.

Pulled out all available cash in my fathers account again today.

It's not that kind of real estate that I prefer to own, that the Danes are doing this with, Jurgis, [ : - ) ] They are [generally speaking] doing it with that kind of real estate, that is called homes, which have the properties of not being cash generating - only cost generating. So basically it's borrowing with a liability posted as collateral. Cigarbutt's post made me look around [we have public records here about how real estate is mortgaged]. That action caused a grenade shock. - - - o 0 o - - - Perhaps we should continue this discussion in Seth's topic about cost of capital instead of here.

Your analysis of what's been going on with the Himalaya Capital Management portfolio is just straight out awesome, Dynamic. I also hold your work in this topic with the Berkshire portfolio very high, now during almost three years. To me, it's a gem - nothing less. Thank you for sharing.