Festival

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  1. Some interesting trends in markets this week - possibly a bottom in silver and gold, maybe a higher low in in TLT and perhaps some relief for EM currencies and stock markets coming from a weaker dollar as predicted by DB? Think we should know within a week or so but my feel is that US ten year won’t break 3% which I think is the key to the near term for gold and DXY. Chance for sterling to run up now this autumn which might be the last chance to get out at around 1.40 to the USD there’s certainly some shorts to be squeezed there to generate that kind of move.
  2. "As for the dollar my target was 96.5 and we are there now and i think the follow through might see it hit 97.6.We have a 36 month bullish extreme on the dollar.The 9 day sentiment reading is at 91% bullish,and the numbers i run are exactly where they were when the dollar topped at 103.That is the kind of sentiment you see in a cycle rebound,thats all this is.Everyone wants to be bullish on the dollar,but that will prove very un-profitable from here i think.I expect the dollar to turn lower,a lot lower." Looking like another great call on the dollar DB of a turn around 96/97. Do you have a target in mind for where DXY might fall back to now and are you still bullish about an ultimate rise for DXY to 120 or thereabouts?
  3. The average delay between a yield curve inversion in the US and a stock market downturn is 8 months I believe but it has been longer and was nearly 18 months last time I think Feb 2006 to October 2007. We should reach inversion with a 25 bps rate rise in the US this September? Does that mean we are circa a year away from the downturn and why DB thinks there is still room for gold to run and the dollar to fall between now and then?
  4. The market always wins out in the end SP we just haven’t got there yet - the foreigners do hold uk assets and investments in businesses but I wonder with recent announcements on reviews of foreign stakes in businesses whether that will gradually roll back. Will look at stocks in those sectors plenty of value there to be going at i think
  5. Interesting article I think Brexit is impossible to call too many options still in play and too much political risk to have an investment strategy specifically for. I hedge persistent GBP weakness through overseas property, foreign currency, some us govt bonds and some gold but my circumstances are different to many in that 80 percent of my costs are in EU but 50 percent plus of income is in GBP. The gap between the two gives me the cause for concern. Others will have more of a GBP cost base and so their risks and opportunities will be different I expect.
  6. Big push on offshore wind in the FT today - do you think it’s enough though to meet our own energy needs DB? - the article was talking about the capacity being here by 2030 - we don’t want any more Hinkley Point deals IMO
  7. Agree it’s been spent on benefits and on consumption and not on investment - let’s hope this changes this is the hope of the thread
  8. Yep it’s uneconomical with oil at 50$ a barrel and a bit more attractive at current oil prices but given this we won’t pump anywhere near the volume we did between 1980 and 2010
  9. Don’t disagree Banned think the Uk’s problems go way back to the empire decline and the failure to compete on a national level with Germany in high tech manufacturing and engineering which has led us to financialise more and more of the economy and invite capital (and labour) in whilst running a serious balance of payments deficit. My belief is that North Sea oil has prevented a more drastic currency decline in the past three decades but that is nearly done now and we need something to replace it. If capital takes flight for whatever reason it’s game over for sterling. However because the Brexit outcome is so uncertain short term markets are not pricing sterling for what’s coming in the medium and longer term. Sooner or later the currency market will look beyond Brexit and the economic fundamentals will be the focus
  10. I’d be surprised if he gets elected but if his election was to follow a government falling with a global bear market in stocks then I’d fear for where sterling would catch a bid. Normally the FTSE rises when sterling is falling but the one period I can find where it didn’t was 1973/4 - 75 percent off in UK stocks and a 20 percent fall in sterling vs the DM. That’s the kind of risk I’m worried about where capital flight leads to stagflation and the politicians let the £ go as the path of least resistance. How do you protect yourself for that set of outcomes do you get funds completely out of the U.K. and if I’m thinking that are others planning for a similar outcome?
  11. Hi all First if all thanks to the regular contributors like them I’m over from TOS. The quality of ideas and debate is excellent here and very thought provoking. I have one question today regarding sterling. I’m increasingly of the view that a currency collapse is close at hand for the £. Whether it’s the relative decline in North Sea oil exports, the effect of a yield inversion and deflationary event on bank profits, the coming Brexit dislocation or the failure to raise interest rates I’m seeing no good outcomes for the £ within the next year. The £ lost 65 percent of its value against the DM between 1967 and 1977 so there is some precedent for a collapse the kind of which we haven’t seen for decades. There seems to be strong resistance just above £:$ 1.40 but not much by way of support below that I can see. Parity would be psychological support as would be the 1985 bottom at £:$ 1.05. i have two questions - firstly is anybody concerned about the probability of a currency crisis? Secondly how would you hedge against it investment wise. I’ve been thinking the best bet is to go overweight TLT, gold and FTSE companies with large overseas earnings recognising that some of these companies eg Victrex have already gone up a considerable amount. Currently I have a GBP cash holding but I’m getting nervous that this won’t provide the protection I have thought it would. Ie so despite a deflationary event GBP cash won’t help much to get through it.