Credit deflation and the reflation cycle to come (part 2)

[geordie_lurch]

11 minutes ago, Cattle Prod said:

Here it is, and I don't think it's a thread derail. As bonkers as it is, possibly the biggest factor affecting macro investment right now is the number of PCR cycles being used by the lunatics in charge of the asylum:

https://drmalcolmkendrick.org/2020/12/30/what-is-left-to-say/

Thanks so much for that as that is brilliant and impossible for anyone sane of mind to dismiss as a "conspiracy theory"

[AWW]

That Euromomo data has been revised since that post - the drop at the end has gone. It still doesn't look like anything other than normal seasonal variation, obviously.

I also think we will be starting to see the effect of the health service being largely inaccessible for nine months, but of course we're supposed to pretend that won't cause an increase in mortality, with a lag.

[Bricormortis]

https://www.bbc.co.uk/news/business-55551315

New car registrations UK down by most in 30 years.

Biggest 1 year fall since the 1940's.

[Chewing Grass]

5 minutes ago, Bricormortis said:

https://www.bbc.co.uk/news/business-55551315

New car registrations UK down by most in 30 years.

Biggest 1 year fall since the 1940's.

No point in getting a new (or used) car if you are literally doing 5-10 miles per week.

Greta will be squirting her panties.

[Bricormortis]

1 hour ago, AWW said:

Back on topic, Bitcoin vs gold. FWIW, I think it unlikely that BTC has taken much money at all out of gold. Gold bugs aren't going to buy BTC, and BTC buyers (certainly the ones I know) would never consider gold - for many, BTC is their only investment, and shares are seen as "too risky" (except Tesla).

They've had a good 2020, to be fair to them.

Money rotated out of gold into a wide range of assets. Comparisons of market cap of gold v btc up thread seem valid. David Morgan sees it all that way .

[Barnsey]

 

[VeryMeanReversion]

My FTSE/PM-based SIPP is now at a new high, better than when the FTSE100 was 7800.   A rotation into commodities and PMs last year has done wonders.

I bought £20K of Imperial Brands (IMB) yesterday.  Boring divi payer that looks way undervalued. They have reduced divis to concentrate on paying down debt which is fine with me.

I hold no bitcoin and never plan to.

[Boon]

FTSE is up bigly.

Can't say I'm feeling it, not that I am complaining. 

It kind of seems like the big money has gotten impatient and is starting to be deployed.

[geordie_lurch]

4 minutes ago, Boon said:

FTSE is up bigly.

Can't say I'm feeling it, not that I am complaining. 

It kind of seems like the big money has gotten impatient and is starting to be deployed.

Well my little money I top sliced also got bored and I bought some more BP this morning as anything under 300p per share will be cheap long term we all think / hope

[nirvana]

19 hours ago, 5min OCD speculator said:

I'm beginning to think the markets are gonna go bonkers

smelt it yesterday @Loki?

 

[Loki]

3 minutes ago, 5min OCD speculator said:

smelt it yesterday @Loki?

It says something when the BUY option for the oilies is totally unavailable on T212 CFD section

[kibuc]

3 hours ago, AWW said:

Back on topic, Bitcoin vs gold. FWIW, I think it unlikely that BTC has taken much money at all out of gold. Gold bugs aren't going to buy BTC, and BTC buyers (certainly the ones I know) would never consider gold - for many, BTC is their only investment, and shares are seen as "too risky" (except Tesla).

They've had a good 2020, to be fair to them.

I don't think the golden needle gets moved by goldbugs, and I reckon the recent spike in BTC has little to do with crypto evangelists either. It's the instos who have the power to push the price one way or another, and they should be much less entrenched in their positions.

[geordie_lurch]

3 minutes ago, Cattle Prod said:

So K&S is up 24% in 3 days, some of my calls (which I bought for buttons) are up 500%. This is fun. Reward for holding through all the doom, gloom and anti-commodity consensus. Thanks to this thread for discussing potash especially @DurhamBornand @sancho panza (and @MvR for discussing options), wouldn't have occurred to me otherwise.

Only problem now is that it's already oversold on the dailies. Ah well, screw it, long term hold for me.

Yes thanks all As I mentioned the other day, top slicing my K&S is one of my most recent regrets however I put the cash into other things that have also risen just not as much... yet!

[The Idiocrat]

1 minute ago, Cattle Prod said:

So K&S is up 24% in 3 days, some of my calls (which I bought for buttons) are up 500%. This is fun. Reward for holding through all the doom, gloom and anti-commodity consensus. Thanks to this thread for discussing potash especially @DurhamBornand @sancho panza (and @MvR for discussing options), wouldn't have occurred to me otherwise.

Only problem now is that it's already oversold on the dailies. Ah well, screw it, long term hold for me.

Hear, hear! With all the knowledge on here and a few tips, I’m up a substantial amount on my SIPP, which was looking threadbare this time last year. Back then I had a minimum target I wanted to hit in 5 years’ time to retire early if I want to. I think I’ll probably hit that target next year now if things stay static-ish and I keep on earning and saving (BK obviously is a risk I’m trying to mitigate). So a huge thanks to all on here, especially to the aforementioned and you too @Cattle Prod - it’s actually been, potentially, life-changing!

[leonardratso]

hunter actually replies if you dm him on twitter, i tried to rope him in over here but says hes far too busy.

Doesnt remember anyone from fidelity and hasnt talked to them for decades.

Seemed nice enough.

[JMD]

4 hours ago, dnb24 said:

My understanding on this is that current PCR testing uses CTs of over 35- therefore picks up dead viral rna(different countries use different CTs- you can see when Spain and Belgium reduced their CTs with a corresponding dip in positives back in November iirc). Therefore a huge proportion of people attending hospital are testing positive- even though they probably only have traces/dead rna of virus in their mucus membranes. This is reflected in the pneumonia/flu death stats- which have reduced by circa 90% in this last year- ergo- sars coV-2 is either taking these people earlier than flu, or it is being misconstrued with flu deaths. Therefore when lateral flow comes in, PCR testing reduces to below 35 cycles (WHO now recommend around 25)- testing will pick up only the true positives- and covid deaths will reduce, flu deaths will go back to normal= covid cured.

Thanks dnb24, i think i now understand. Its so interesting, not to mention suspicious, that flu has all but disapeared.

Which kinda leads me to ask (sorry to be a pain, but i feel i should understand) about where you mention 'sars cov2' - are these viruses and others not normally monitored within the UK population during 'normal times'? I had thought/assumed that random hospital blood samples were sent to the infectious/tropical disease unit (dont know its proper name) based in London? Perhaps that never did happen and i have just mis-read something incorrectly in the past. However, i would definitely have assumed that such extensive monitoring of all viruses would be stepped up big time - particularly during a pandemic - in order to give our scientists all the information they need (and then some). 

[Lightscribe]

33 minutes ago, Cattle Prod said:

So K&S is up 24% in 3 days, some of my calls (which I bought for buttons) are up 500%. This is fun. Reward for holding through all the doom, gloom and anti-commodity consensus. Thanks to this thread for discussing potash especially @DurhamBornand @sancho panza (and @MvR for discussing options), wouldn't have occurred to me otherwise.

Only problem now is that it's already oversold on the dailies. Ah well, screw it, long term hold for me.

I’ve now taken a nice profit on K&S. I’m sure this year with the likelihood of food shortages, being in a solar minimum combined with inflation maybe bubbling up at the beginning of the pipeline in the supply chain this sector may see big gains this year. I was in too deep at the wrong time with K&S, so have reduced my holdings and will allow Mosaic and Nutrigen be my main exposure to the sector. I will use the money for other things, HOC and CEY might be candidates. 

[JMD]

4 hours ago, Cattle Prod said:

Here it is, and I don't think it's a thread derail. As bonkers as it is, possibly the biggest factor affecting macro investment right now is the number of PCR cycles being used by the lunatics in charge of the asylum:

https://drmalcolmkendrick.org/2020/12/30/what-is-left-to-say/

Every doctor must know this, why are more of them not speaking out?

30th December 2020

I have not written much about COVID19 recently. What can be said? In my opinion the world has simply gone bonkers. The best description can be found in Dante’s Inferno, written many hundreds of years ago.

In it, Dante describes the outcasts, who took no side in the rebellion of angels. They live in the vestibule. Not in heaven, not in hell, forever unclassified. They reside on the shores of the Acheron. Naked and futile, they race around through a hellish mist in eternal pursuit of an elusive, wavering banner, symbolic of their pursuit of ever-shifting self-interest.

I find this description of the desperate pursuit of an elusive wavering banner rings rather true. This, it seems, is pretty much the place we have arrived at. Which banner have you decided to follow?

The ‘COVID19 s the most terrible infection ever, and we must do everything in our power to stop it, whatever the cost’ banner.

Or the ‘What on earth are we doing? This is no worse than a bad flu, and we are destroying the world economy, stripping away basic human rights and killing more people than we are saving’ banner.

There may be others.

Between these two, main, completely incompatible positions, lies the truth. It is in pretty poor shape. It has been crushed, and bent out of shape, smashed, and left as a broken heap in the corner. I search where I can, to find the fragments, in an attempt to bring together a picture that makes some kind of sense.

But what to believe? Who to believe?

I feel somewhat like Rene Descartes. In order to find the ineluctable truth he scraped everything away until he was left with ‘Cogito, ergo sum’. ‘I think, therefore I am.’

I have stripped away at the accuracy of PCR COVID19 testing. I found myself left with nothing I could make any sense of. I hacked down to establish the way that COVID19 deaths are recorded. All I found were assumptions and difficulties.

Did someone die with COVID19, of COVID19 – or did it have absolutely nothing whatsoever to do with COVID19? Who knows? I certainly don’t, and I wrote some of the death certificates myself.

Have we overestimated deaths, or underestimated deaths? I do not know … and so it goes on.

So, what do I know? I know that COVID19 exists – or I am as certain of this as I can be. Was it a natural mutation from a bat, or was it created in a laboratory? Well, I suppose it doesn’t really matter. It’s here, and there is no chance that any Government, anywhere, would ever admit responsibility for creating the damned thing. So, we will never know. If you asked me to bet, I would say it was created in a lab, then escaped by accident.

Is it deadlier than influenza? Well, it is certainly deadlier than some strains of influenza. Indeed, most strains. However, Spanish flu was estimated to have killed fifty million, when the world’s population was about a fifth of what it is now. So, COVID19 is definitely less deadly than that one. About as deadly as the influenzas of 1957 and 1967. Probably.

Will it mutate into something worse? Who knows.

Will the current vaccines work on mutated strains? Who knows.

Can it be transmitted by asymptomatic carriers? Who knows.

How effective are the current vaccines going to be? Who knows.

What are we left with?

At the beginning, I kept relatively quiet on how deadly COVID19 would prove to be. Because I didn’t know. The figures raged up and down. The infection fatality rate become a battle scene, with warriors lined up on either side to defend their positions.

I even got attacked by factcheckers, the self-appointed know-it-alls who are, it seems, capable of judging on all matters of scientific dispute. Truly, the Gods have descended to live amongst us. Those who can determine what is true, and what is not. No need for any further clinical trials, or any more scientific studies of any sort, ever. We just need to ask the Fact Checkers for the answer, to any given question.

Anyway, it appeared that tens of thousands died in some countries, almost none in others. What I was waiting to see, was the impact on the one outcome that you cannot alter, or fudge. The outcome that is overall mortality i.e. the chances of dying, of anything.

I did this because, when it comes to recording deaths from a specific illness, things can go in and out of fashion. A couple of years ago I looked at deaths from sepsis. At one time this was a condition of far lower priority. Doctors didn’t routinely search for it, or routinely record it, on death certificates.

Sepsis is an infection that gets into the blood, toxins are released, and people die. Everyone knew it happened. Or at least I hope they did.

Then, all of a sudden, there was a gigantic push to look for it more diligently, diagnose it more, treat it better. I think this was generally a good thing. Sepsis is eminently treatable, if you think to look for it, and lives can be saved. We now have initiatives like ‘Sepsis six’ and warnings that pop up on computers. ‘Have you considered sepsis,’ and suchlike. I love it … not. Because I do not love being told how to think, and do my job, by a computer algorithm programmed with ‘zero risk’ as their touchstone. But, hey ho.

In 2013, in the UK, a report was published by the health ombudsman ‘Time to Act – severe sepsis, rapid diagnosis and treatment saves lives.’ As the report stated.

‘Sepsis is a more common reason for hospital admission than heart attack – and has a higher mortality.’ The UK Sepsis Trust ¹

That last statement is somewhat disingenuous, as many people with sepsis are very elderly, often with multiple morbidities, and suchlike. They were probably going to die, shortly, from something else.

Anyway. With all this activity, with all this increased sepsis recognition and treatment, you would expect the rate of deaths from sepsis to fall. It did not. The rate has gone up, by around 30% since 2013. Does this mean there is far more sepsis going about? Or, that it is just more often written on death certificates? I suggest the latter. I use this example, simply to make it clear that even the cause of death written on a death certificate is far from rock solid evidence.

With COVID19, this is a massive problem. In the UK, and several other countries if you have had a COVID19 positive test (which may, or may not, be accurate) and you die within twenty-eight days of that positive test, you will be recorded as a COVID19 death. I do not know much for sure about COVID19, but I do know that is just complete nonsense.

There are so many cases where – even if the COVID19 test was accurate – COVID19 would have had nothing whatsoever to do with the death. Another thing known, or at least we probably know, is that the vast majority of people who die had many other things wrong with them.

In the US, the Centre of Disease Control (CDC) found that ninety-four per cent of people who died of COVID19 ‘related deaths’ had other significant diseases (co-morbidities) ².  This ninety-four per-cent figures would only be the co-morbidities that were known about – who knows what lurked beneath? Especially as people stopped doing post-mortems (i.e., autopsies in the US).

So yes, they had COVID19 (or at least they had a positive test – which may not be the same thing), but they were often very old, and already severely ill. Using an extreme example, someone with terminal cancer who is a week from death, catches COVID19 in hospital, and dies. What killed them? The statistics say COVID19. I say, bollocks.

When I started in medicine, ‘bronchopneumonia’ (a bad chest infection) used to be known as the ‘old man’s friend.’ For those who were very old, and frail, often demented, lying in care homes, often incontinent, a chest infection represented a reasonably painless way to die.

Very often we would not actively treat it, instead we allowed for a peaceful death. Indeed, this still happens. Less so now, as someone, somewhere, often a relative from a country far, far, away – who has not visited for years – is far more likely to sue you.

Did they really die of bronchopneumonia? You could argue yes, you could argue no. Yes, it was the thing that finally pushed them over the edge. No, they were already slowly dying as their body gave out. In the end, what does anyone actually die of? My Scottish grannie, who lived to one hundred and two, used to say ‘they die frae want of breath.’ Entirely accurate, but, alas, also completely useless.

So, what you need to do, is look beyond what is written on death certificates. You need to look at what is happening to the overall mortality. Whilst you can argue endlessly, pointlessly, about specific causes of death. What you cannot argue about is whether or not someone is alive, or dead. Even I usually get this one right. No pulse, no breathing, no reaction of the pupils to light, no response to pain… and suchlike. Yup, dead. Now… what they die of? Um… let me think.

Thus, I have tended to look to EuroMOMO. The European Mortality Monitoring project. As they say, of themselves:

‘The overall objective of the original European Mortality Monitoring Project was to design a routine public health mortality monitoring system aimed at detecting and measuring, on a real-time basis, excess number of deaths related to influenza and other possible public health threats across participating European Countries.

Mortality is a basic indicator of health. Therefore, understanding its epidemiology is fundamental for effective public health planning and action.

Mortality monitoring becomes pivotal during influenza or other pandemics for several reasons. In a severe pandemic, mortality monitoring can be a robust way to monitor the pandemics progression and its public health impact when other systems are failing, due to an overburdened health care sector. Decision makers will require data on the pandemics impact and on deaths by age and geographical area in various stages of the pandemic. Mortality monitoring can provide such estimates, which will be important to guide and prioritize health service response and decision-making, i.e. use of antivirals and vaccines.’ ³  

Here are the data that you can therefore, pretty much, fully rely on. It is where I go to see what is really happening across Europe. Not all of Europe, as some countries do not participate. However, there are more than enough, to get a good picture. It encompasses key countries such as Spain, Italy, the UK (split into four separate countries), Sweden and suchlike.

Here is the graph of overall mortality for all ages, in all countries. The graph starts at the beginning of 2017 and carries on to almost the end of 2020.

As you can see, in each winter there is an increase in deaths. In 2020, nothing much happened at the start of the year, then we had – what must have been – the COVID19 spike. The tall pointy bit around week 15.

It started in late March and was pretty much finished by mid-May. Now, we are in winter, and the usual winter spike appears. It seems to be around the same size as winter 2017/18. It also seems to have passed the peak and is now falling. But it could jump up again. [The figures in the most recent weeks can always be a bit inaccurate, as it can take some time for all the data to arrive]

Two things stand out. First, there was an obvious ‘COVID19 spike’. Second, what we are seeing at present does not differ greatly from previous years. The normal winter spike in deaths.

If we split this down into individual countries, this reasonably clear pattern falls apart.

Here are the figures from England

Unlike the first graph, the scale on the left is not absolute numbers. It is a thing called the Z-score. Which means standard deviation from the mean. Sorry, maths. If the Z-score goes above five, this means something significant is happening. The red, upper, dotted line is Z > 5. As you can see, despite the howls of anguish from England about COVID19 overwhelming the country, we are really not seeing much at all.

What of Sweden, that pariah country? They did not fully lock-down, the irresponsible fools (all they did was follow WHO guidance – by the way), and we are now told they are suffering terribly, they should have enforced far more rigid lockdown, their ‘experiment’ failed etc. etc. COVID19 shall have its vengeance. Or to quote Arnie – I’ll be back.

As you can see, nothing much happening in Sweden either.

Then, if you look further, there are anomalies all over the place. Northern Ireland, which is part of the UK, and did exactly the same things as the rest of the UK with regard to lockdown, masks etc. At least it did in the earlier part of the year. However, it shows a completely different pattern to England. Or, to be fully accurate, it shows no pattern at all. No waves, and nobody drowning.

What of Slovenia?

As you can see absolutely nothing happened earlier in the year in Slovenia. Now, it has the biggest spike of all – apart from, maybe, Switzerland. Earlier in the year it was held up as a great example of how brilliantly effective masks were. Now… you don’t hear so much about masks. Maybe masks only work in months beginning with M. [Maybe, whisper it, they don’t work at all].

So, what have I learned from euroMOMO? First that it appears to have made absolutely no difference if a country locked down hard, and early, or did not. Everyone points at Norway and Finland as examples of great and early government action, and how wonderful everything would have been if we had done the same.

Well, look up at Northern Ireland. Then look at Finland

Spot the difference. There is none.

Of course, much of the most heated debate surrounded what happened during the so-called first wave. Who dealt with it well, or badly. Now, everyone in Europe is doing much the same things. Lockdown, restrictions on travel, restrictions on meeting other people, everyone wearing masks, etc. etc. Yet some countries are having a new wave, and others are not.

There is a special prize for anyone who can match up the severity of restrictions in various countries, to the Z-score. I say this, because no correlation exists.

So, again, what have I learned about COVID19? I learned that all Governments are floundering about, all claiming to have exerted some sort of control over this disease and ignoring all evidence to the contrary. In truth, they have achieved nothing. As restrictions and lockdowns have become more severe, in many cases the number of infections has simply risen and risen, completely unaffected by anything that has been done.

The official solution is, of course, more restrictions. ‘We just haven’t restricted people enough!’ Sigh. When something doesn’t work, the answer is not to keep doing it with even greater fervour. The real answer is to stop doing it and try something else instead.

I have also learned that, in most countries, COVID19 appears to be seasonal. It went away – everywhere – in the summer. It came back in the autumn/winter, as various viruses do.

On its return is has been, generally, far less deadly. Much you would expect. The most vulnerable died on first exposure, and far fewer people had any resistance to it, at all. Now, a number of people do have some immunity, and may of the vulnerable are already dead.

Which means that, in this so-called second wave COVID19 is of no greater an issue than a moderately bad flu season.

If I were to recommend actions. I would recommend that we stop testing – unless someone is admitted to hospital and is seriously ill. Mass testing is simply causing mass panic and achieves absolutely nothing. At great cost. We should also just get on with our lives as before. We should just vaccinate those at greatest risk of dying, the elderly and vulnerable, and put this rather embarrassing episode of mad banner waving behind us.

Hopefully, in time, we will learn something. Which is that we should not, ever, run about panicking, following the madly waved banners… ever again. However, I suspect that we will. This pandemic is going to be a model for all mass panicking stupidity in the future. Because to do otherwise, would be to admit that we made a pig’s ear of it this time. Far too many powerful reputations at stake to allow that.

1: https://www.ombudsman.org.uk/sites/default/files/Time_to_act_report.pdf

2: https://www.cdc.gov/nchs/nvss/vsrr/covid_weekly/index.htm?fbclid=IwAR3-wrg3tTKK5-9tOHPGAHWFVO3DfslkJ0KsDEPQpWmPbKtp6EsoVV2Qs1Q&_ga=2.83596054.1497558416.1598967201-386365132.1598967194#Comorbidities

3: https://www.euromomo.eu/about-us/history/

 

 

I agree, the management/policy response to the corona virus is not a thread derailment.

As the article itself says, future crises will be now be handled by government in this corona-chaotic-control-style-pandemic way. But we have at least now been warned and know what's ahead... I joked yesterday about Corona's next mutation morphing into a Russian/Chinese cyber attack virus. Wont happen in isolation, but i expect such new dangers and government policy responses to form part of the mix for when economic/social problems begin to hit. Government have tested the gullibility of the public and know what works and how easy it is to manipulate us.

As for doctors knowing how crazy the Covid testing regime is, flu dissapearing from their wards, etc - but not speaking out. I am reminded of how the German middle-classes and intelligentsia didn't speak out in the 1930's. Is this an unfair or hyperbolic comparison to make? Please do shoot me down if you disagree, after all i don't like having such thoughts, so a good counter argument would at least might make me feel better about things.

[sancho panza]

21 hours ago, geordie_lurch said:

 

What was that roughly?

ref David Hunter,( @DurhamBorn has quoted him many times on this) but one video put up[ a while back,he said the economic mess that is coming in the 2020's is nothing comparing to what's coming in the 40's,by which he stated he hoped to be dead.

21 hours ago, JMD said:

I've just posted something (long and convoluted?!) about WW11 above. I don't know the context of your Steve Keen comment SP, but i shall now read back on the thread to find out... in the mean time i'll put it down to synchronicity!!

It was synchronicity.

Steve Keen  basically said in 2009 that 'the last time we had a deleveraging like this,it ended after ten years with WW2'.

Obviously in retrospect,we haven't had the deleveraging,instead they've blown the bubble even more bigly into corporate credit markets where zombie companies/govts are borrowing to their hearts content and paying it out like every day is Christmas.

I'm firmly in the camp that they will keep the plates spinning a bit longer.But all hell could break loose at a moments notice.US seems on a slippy precipice.Some late vote dumps of 117k (sorry 'technical error',number was actually 171k,votes have come from deep blue county in Georgia to win them the senate....)

21 hours ago, Cattle Prod said:

You know, I lazily didn't fact check that number before posting it, so I just did, @ 186,000 tonnes physical above ground:

So $11.6 Tn 'market cap' for physical, so it's perhaps ok to compare that to the 'physical' BTC market cap of...20m coins? How many have been lost? $640bn for 20m coins, or 5.5% of golds physical market cap.

 

Interesting perpsective CP.I hadn't thought of looking at it this way.It puts Bitcoin into perpsective.I thought it would be higher tbh

20 hours ago, Majorpain said:

Just out of interest do you know what the current NHS PCR cycle # is?  I had a look on the PHE website, but whilst it provided a lot of interesting stuff the actual numbers were a little thin on the ground.  I haven't seen anything to stop them doing "dial a pandemic" by ramping the cycles.

The Pfizer second dose had a notable kick to it for even the young, the timing of dropping to only one dose a few weeks after the first "vulnerable" people got it was mighty suspicious.  I just hope there are not metaphorical or literal bodies being buried there.

Decent govt paper here.Looks like the upper limit is 40.but some relevant bits worth reading below.

Cycle thresholds are key to understanding that all positives aren't as postive as each other.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/926410/Understanding_Cycle_Threshold__Ct__in_SARS-CoV-2_RT-PCR_.pdf

[sancho panza]

 

18 hours ago, Barnsey said:

The issue I have with David's thesis is that the memory of the huge plunge due to Fed tightening still very vivid, and huge % of population unable to handle rising rates and won't be participating in any recovery anytime soon unless rates kept as low as possible.

Crazy theory from rockstar Glaswegian Hugh Hendry, Fed go massively negative.

Fed will have a choice between trying to moderate a debt deflation or watching the dollar get smashed.ergo,try and moderate the defaltion.

I love Hugh hendry but he got shown up a bit when he stepped up the plate with Lyn Alden.At the end of the day,he went bearish way too early(can't critiscise as logically I was with him) but that's why she's got a growing subscriber base and he's runnign a hotel in the Windies I bleieve

https://www.bloomberg.com/news/articles/2019-08-29/hugh-hendry-swaps-hedge-fund-for-hot-spot-in-caribbean-comeback

15 hours ago, The Idiocrat said:

My monthly SIPP payment has hit my account and I’m wondering what to buy. As we’ve said on here, it’s proving difficult finding value. I still like the oilies but am well overweight on those. I’ll probably do a few good divi payers, but I’m also thinking of emerging markets, excluding China, and more specifically India and Russia. Does anyone have any thoughts on those, or share/fund ideas?

There's not much value left,we're loaded up with oilies too.

Worth looking at Vodafone though,

Decl:already long,likely going to pick up some more today.

15 hours ago, spygirl said:

 

Pants on fire!

 

That's one of those 1000 words pictures.

[Rave]

5 hours ago, ThoughtCriminal said:

You mean Ferguson who resigned in name only but stayed in place despite government assurances he was gone? 

Yes, that Ferguson, whose continued presence as a government advisor is what precipitated JMD's original post that I responded to. I took no issue with his observation of this fact.

 

5 hours ago, ThoughtCriminal said:

Dont piss down my leg and tell me it's raining. 

Who's doing that then mate? Because if you think it's me, you very clearly need to try and improve your reading comprehension skills beyond primary school level.

[sancho panza]

12 hours ago, JMD said:

SP I don't follow why flu cases would increase, or the get out of jail point. Do all nations use the same PCR test sensitivity (15?)? If they don't, I understad that this would presumably register different infection rates/covid cases - and that the stats would then change for the better and the R rate would fall. That's good for massaging the stats. However changing the PCR test scale wouldn't change the number of seriously ill covid patients from entering hospital, and where their high viral infection level would be correctly measured/diagnosed. If these patients died, it would surely be recorded as a covid death. Have I misunderstood you? Why would the number of flu cases increase? 

 

7 hours ago, Barnsey said:

Dems look like they've possibly just about clinched both Senate seats, 10 yr popped it's head above 1%. If true, we're entering interesting territory. $2000 cheques going out to retail investors, insiders rotate out heavily realising implications of complete Democrat control? Rotation into growth? Classic pump and dump? Then Chinese devalue Yuan?

Simplest soultion is the best and fits with the predictions of some good minds looking at it from other angles.

5 hours ago, dnb24 said:

Therefore when lateral flow comes in, PCR testing reduces to below 35 cycles (WHO now recommend around 25)- testing will pick up only the true positives- and covid deaths will reduce, flu deaths will go back to normal= covid cured.

It's utterly depressing when you put it like that.This has all been for virtually nothing.All the arguments/money/goodwill blown for nothing.....Dr Clare Craig was saying the other day that deaths are normal for this time of year.John Lee fromer prof of pathology was on JHB this morning saying the same thing.2 mins long but confirms what we're being told is utter bollocks.

4 hours ago, AWW said:

That Euromomo data has been revised since that post - the drop at the end has gone. It still doesn't look like anything other than normal seasonal variation, obviously.

I also think we will be starting to see the effect of the health service being largely inaccessible for nine months, but of course we're supposed to pretend that won't cause an increase in mortality, with a lag.

It's not going to be pretty.GP's have virtually moved to a phone service.No eyes on patient.Won't end well.

 

[JMD]

43 minutes ago, Cattle Prod said:

As long as it's staying in the right sectors, I think slicing is good and sensible. You'll never get the full amount in or out at the top or bottom, and ladders seem to be the best way to at least get some in. I read a very good post from that Trader Ferg chap about a money gripping nuts in a coconut, too greedy to let go, and couldn't get his hand out. It reminded me of getting out of Bitcoin $15,000 dollars ago, but so what? Some of that went into K&S, and I've just rolled my options out to December, doubled the size with the shorter duration profits, and took my initial investment off the table. Free ride, no panic, no greed, no fomo.

https://traderferg.com/avoiding-the-monkey-trap/

Avoiding The Monkey Trap

The monkey trap involves making a hole in a coconut large enough to fit the monkey’s hand through, but not large enough to pull it back out with a handful of nuts.

The trap relies on greed because the monkey refuses to let go of the nuts to free himself which results in him being captured or killed.

 

As you probably could have guessed, I’m using this as an analogy for getting killed in a bull market as a result of being greedy and unwilling to leave any gains on the table.

 

 

A plan for hopping off this train (once things start to get a bit crazy)

The first strategy I plan to use is scaling out slowly. There will be no binary decision where I plan to sell everything at once.

These cyclical sectors are inevitably going to overshoot the mark, so selling out slowly is the best way to ease the pain that hindsight bias will bring i.e. selling at 5x and watching it go to 10x.

 

 

To have a good outcome in a market that goes parabolic we need to accept we will get out early and be ok with it. 

This means leaving money on the table- maybe even a lot of it… which is fine.

 

Otherwise, you risk one of two alternatives:

• Trying to catch the top, which dooms you to ride it down the other side.
  
  Similar to thinking you can watch the entire show and still leave before everyone, it’s not going to happen.

 

• Or risking Druckenmiller’s fate in the Tech Boom of getting out early and then jumping back in at the top.

“I didn’t learn anything. I already knew that I wasn’t supposed to do that. I was just an emotional basket case and couldn’t help myself. So, maybe I learned not to do it again. But I already knew that.” – Stanley Druckenmiller

 

Or take the other famous example of Issac Newton losing his shirt

“I can calculate the motion of heavenly bodies, but not the madness of people‘

 

If you think you can remain objective in a crazy bull market, get out early, and sit on the sidelines, just remember these two examples.

 

Technical considerations for exiting?

For this, I’m going to use the uranium sector and Andrew Weekly’s guide to illustrate. Andrew has put together this slide deck which has a number of primary and secondary considerations for when to start exiting the trade which I think is smart.

 

Primary exit considerations

1. Two to three consecutive years of term contract volume in excess of 170mlbs annually.

2. Spot price exceeds the term price by $20/lb or more during the excess of the ~$50/lb incentive price.

3. Spot price exceeds $90/lb.

4. Market listings reach ~150 aspiring hopefuls.

5. Spot & SWU price high-level convergence or spot exceeds. 

 

Secondary exit considerations

1. Annual production + near term (2-3 yrs) in-construction buildout is confirmed to match current consumption at incentive price or higher.

2. Nuclear reactor accident at any time during the cycle.

3. Broad stock market crash during mid-late $50+/lb uptrend.  

 

While I like these exit considerations, I wouldn’t let them make up more than 50% of my scaling out. 

The reason being is that I believe it’s highly likely this rally overshoots all reasonable assumptions. 

As I see this being Soro’s theory of reflectivity on steroids with the addition of:

• Social media
• Smartphones
• Everyone connected 24/7
• Notifications and commission-free trading
• Stimulus cheques in the hands of Robinhood traders

 

 

Behavioral considerations for exiting?

This is where it becomes more art than science. 

Examples might be; 

– A friend you mentioned the sector to a while ago reaching out and asking how to invest in it = sell 10% 

– Hear it being discussed at a BBQ or party = sell 10% 

– Taxi driver/ plumber mentions it = sell 10% 

– See it mentioned on news/magazine cover = sell 10% 

– Have dozens/hundreds of @uraniumtothemoon types joining twitter and trolling anyone recommending caution = sell 10% 

 

As a thought experiment, just think back to the crypto boom and how many of the above examples occurred to you personally?

 

I remember clearly heading to a New Years’ festival with a good friend and a number of his friends.

And when my friend introduced me as, ”someone who trades for a living” the group’s eyes lit up. Two of them stated they planned to do the same with crypto and everyone nodded their heads in approval.

But, when I was asked for my opinion and shared my thoughts (quite hesitantly, it was NYE and I did not want to talk about crypto)- mainly how I thought that crypto was a bubble and wouldn’t end well… the room’s mood changed.

The reception to this statement was the same I imagine as kicking the family’s dog off the balcony.

There was silence then someone said; “What sort of trader was I, missing returns like this“, and finally they all concluded I was just sour I’d missed it.

We left it at that and after a few beers, the guys seem to have forgotten everything about their trading aspirations and my ”lack of vision for the future”.

That was the 30th of December 2017.

I figured even if I was in bitcoin I would have been out before $10,000 applying the above rules.

 

 

I like to do this whole exercise ahead of time as I do think it will be far harder to rationalize exits when the euphoria has taken hold. 

Just remember…

People quickly forget how crazy things get. And I am aware I might (which is why I’m mainly writing this post as a reminder to myself).

Just take these projections below. They all seemed possible at the time and only with hindsight bias do we write them off as crazy.

 

 

 

History will repeat itself in the Uranium market as everyone becomes an overnight expert about the supply deficit and drives prices to crazy levels in what is a tiny and illiquid market. 

 

 

It will be essential to go in with a plan, otherwise, the odds are we’ll become a victim of our own ”monkey trap”.

So, my advice is: Mentally prepare to leave some nuts on the table.

 

Cheers, 

Ferg

I think Ferg is good to follow. Lots of sensible down to earth advice. He specialises in what he terms assymetric trades, ones with little downside risk, but with massive upside. He is big into uranium, currently 80% of his portfolio i think. He also likes US offshore oil drillers that have taken bankruptcy to shed debt, he waits, then reinvests when the newly created company re-emerges pheonix like , and unencumbered, from the flames. But he has a general down on the integrated oilies, thinking most of them to woke.

CP, you might recall i posted Ferg's article couple months back about him thinking BP/ESG policies will be the ruin of the company. We both disagree with him i know, but shows he doesn't get everything right - i know, who does - but worth remembering he is more of a trader, so i suppose long-term big oil holds are not really his bag.

[Errol]

4 hours ago, Bricormortis said:

Money rotated out of gold 

Nobody sane 'rotates' out of gold. Particularly not in the current environment. Unless you are talking about separate trading funds, entirely segregated from the physical gold you have in your vault and any gold stocks etc.

[Barnsey]

Hmmmmmmm...