Glencore Stock Got Smoked Again Today

All we need now to pound the final death-nail into Glenron’s stock is for Cramer to issue an “all’s clear, time to load up on Glencore stock” call on Mad Money.

Down 4% on no meaningful fundamental news:

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Glencore has announced that it plans on “liquidating” some of its inventory in order to pay down its debt. Again, this article referenced Glencore’s debt load as $30 billion. But as I demonstrated with a graphic from Glencore’s financials, the Company has $50 billion in debt outstanding:

GlenronCF Debt

The $30 billion debt number is the number that Wall Street pimps and the financial media want market to believe, even though this number assumes that Glencore can sell its inventory at current market prices. Well, I’m hearing a lot of “noise” about this, let’s see it happen. If I were running a commodities hedge fund I would be shorting copper, zinc and iron ore futures ahead of this alleged inventory liquidation.

I think this report out of China is likely what spooked the markets and triggered the sell-off in Glencore stock – Steel demand evaporating at unprecedented speed:

On Wednesday, the deputy head of the China Iron and Steel Association warned that demand for the ferrous metal was waning fast. “China’s steel demand evaporated at unprecedented speed as the nation’s economic growth slowed. As demand quickly contracted, steel mills are lowering prices in competition to get contracts,” Zhu Jimin, deputy head of the China Iron & Steel Association, said on Wednesday at a briefing in Beijing.

Glencore is a commodities-based debt and derivatives roach motel.  I would not be surprised if a lot of funds/banks with long-side exposure to Glencore credit default swaps – as in, Deutsche Bank – start shorting the crap out of Glencore stock to try and hedge their leveraged exposure to Glencore.

And with the global economy – including the United States – quickly sliding into a nasty recession, I can’t wait to see what kind of nonsense spews out from December’s FOMC zoo gathering to justify another rate-hike deferral.

5 thoughts on “Glencore Stock Got Smoked Again Today

  1. I like the humour on this siite. But to be honest with you: I am curious about how long these crooks at the FED can keep the spirit amongst people and media that the recover y is on track and that a rate hike (that will mount an incredibly nasty .25%
    to dampen the overheated inflation …lol) is in the cards.

    1. Never
      A rate hike on that scale will implode the world financial system, we are talking about the worlds reserve currency with trillion of dollar denominated debt.
      It will eventually end in tears for the US
      Regards
      Mike Harvey

  2. I will be visiting my daughter in Denver in November and May well pay a visit to Denver zoo. I may spot one of the FoMC committee in one of the cages as this is where they should be as this whole thing on interest rates is a complete joke.
    Bottom Line
    The threat to raise rates will give the paid puppets of Wall Street an excuse to slam the only true assets which are precious metals. I wish these so called experts would stop insulting the publics intelligence.
    What goes round eventually comes round.
    Regards
    Mike Harvey
    Resident in Ireland

  3. Glencore’s frantic search for liquidity can be seen on September 28 when they announced the sale of it’s Araquaia Nickel property to Horizonte Minerals, for a reported $8 million.
    At the time, Glencore’s 5 year CDS had risen 207 to 757 points, or to put it simply credit then cost Glencore 14% as it’s stock continued to plunge. The self canibalization of assets has begun in earnest.
    The counter parties to Glencore’s trillions (notional) of CDS are now scrambling to off load risk, with very tight liquidity in the market. This is far from the end of this financial calamity, as the sheer amount of derivatives dependent upon the outcome, balance on the final word.
    As of close Friday (October 30) Glencore was trading @ $110.80 down from it’s May price of $318.46

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