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

[DurhamBorn]

28 minutes ago, Harley said:

Maybe helps explain BAE's dump and pump in Oct and Nov last year?  Rubbish debt ratio but one to watch?  And/or RR (poor financials again though?)?

I was going to add a lot of Babcock but im worried about nasties in contracts there so only have a few.Need more work to see how to play this part of the cycle.

[Loki]

Re: The pipeline getting cancelled.  I saw this old pic (Mentions Obama).  The ownership bit is true anyway 

[Talking Monkey]

27 minutes ago, Harley said:

Budget first!  I'm bracing for a bad one - this is their best chance to really stick it to us before Covid quietens down, either out of reality (or is that catch up to reality?) or general fatigue.

You reckon they'll do it on this one, after trashing the economy they'll be vilified if they dish out a kicking to us. We might get lucky and the real bad stuff gets delayed a year. 

[DurhamBorn]

7 minutes ago, Talking Monkey said:

Would that then mean any huge inflationary dislocation/collapse is bought forward to closer mid decade rather than end decade, a shame if it does

Not sure on that,the oil map is more to do with governments pushing green that sees investment slump in carbon.The only thing stopping the rises on my roadmap going to incredible prices is nobody could pay for them.People are going to be shocked by the prices increases on something most think is dead.The irony is the price will go so high it will mean synthetic fuels etc will become worthwhile and that might kill off electric cars,or at least provide an alternative.The ban is on petrol and diesel engines,but a few tweaks and they can burn other fuels,especially diesel.When is a diesel engine not a diesel engine?.

[Chewing Grass]

The United States is the most corrupt country in the world at the highest level in $ and those with the money and power want to keep it that way by any and all means possible.

[Talking Monkey]

9 minutes ago, Democorruptcy said:

I didn't go 'all in' with the money outside my SIPP and ISA, possible house purchase money. I didn't want a non tax wrapped account but should have gone long on my spread account. I wouldn't have declared winnings on that. Last week before I started selling I had over £200k in BP/RDSB tax wrapped. I know you aren't supposed to put too much in one share but I get carried away if I smell value.

If its in a spread account arent profits tax free so nothing needed to be declared

[Chewing Grass]

1 minute ago, Talking Monkey said:

You reckon they'll do it on this one, after trashing the economy they'll be vilified if they dish out a kicking to us. We might get lucky and the real bad stuff gets delayed a year. 

The really bad stuff will be pencilled in for next year or the year after irrespective of any election thoughts.

[Loki]

7 minutes ago, DurhamBorn said:

The ban is on petrol and diesel engines,but a few tweaks and they can burn other fuels

Daft how they've gone all in on electric with LPG infrastructure already being available and LPG plentiful.  I know the valves need flashlube etc but compared to the work needed to build a load of electric cars and associated chargers, and the electrical infrastructure for those...

Edit: Wonder if the hydrogen blend could work just as well in ICE as boilers.  Not qualified to say but fits in with their bonkers green criteria anyway 

[Talking Monkey]

4 minutes ago, Chewing Grass said:

The United States is the most corrupt country in the world at the highest level in $ and those with the money and power want to keep it that way by any and all means possible.

We've certainly had our eyes opened to this over the last three months, it's been bloody depressing to realise the extent of the corruption. 

[Harley]

26 minutes ago, Democorruptcy said:

I didn't go 'all in' with the money outside my SIPP and ISA, possible house purchase money. I didn't want a non tax wrapped account but should have gone long on my spread account. I wouldn't have declared winnings on that. Last week before I started selling I had over £200k in BP/RDSB tax wrapped. I know you aren't supposed to put too much in one share but I get carried away if I smell value.

I'm such an effing wimp.  Deflated now after what was a good day!  Cheer me up, tell me about some losses!

[Harley]

21 minutes ago, DurhamBorn said:

I was going to add a lot of Babcock but im worried about nasties in contracts there so only have a few.Need more work to see how to play this part of the cycle.

I missed them.  I do have some legacy positions in them and BAE but defo no RR until I see sustainable positive operating cash flows (shame given the good debt ratio, etc).  I rather enjoyed being "vetted" before being able to buy BAE.  Quinetic?  It's so frustrating with a SIPP/ISA to be restricted to such financially questionable stuff.  Maybe I should get that Saxo ISA and go international, but maybe not Hong Kong on this one!

[Harley]

25 minutes ago, Talking Monkey said:

You reckon they'll do it on this one, after trashing the economy they'll be vilified if they dish out a kicking to us. We might get lucky and the real bad stuff gets delayed a year. 

But we evidently like a good kicking!  And these wonkers now have a chance to dish out what they probably all got as schoolkids.  There is only ever one way to deal with a bully, a lesson maybe they should have learnt to make them into what they are not.

[Democorruptcy]

17 minutes ago, Harley said:

I'm such an effing wimp.  Deflated now after what was a good day!  Cheer me up, tell me about some losses!

Sorry didn't mean to deflate you. I'm £3k red on <insert name> at the current price. I should have done a @Castlevaniatook the loss and invested it in a winner. I kept it as a punishment to remind me of the mistakes I made. Purchasing 2 lots in my SIPP when I thought the 2nd was in my ISA. Realised my first mistake, made another doing the ISA purchase before selling the SIPP extra purchase. Price then dipped slightly left the extra SIPP sale for later but forgot. Hadn't noticed <insert name> were doing a trading update 2 days later, then it plunged! Catalogue of errors for which I deserve to be punished.

[Majorpain]

11 minutes ago, Harley said:

I missed them.  I do have some legacy positions in them and BAE but defo no RR until I see sustainable positive operating cash flows (shame given the good debt ratio, etc).  I rather enjoyed being "vetted" before being able to buy BAE.  Quinetic?  It's so frustrating with a SIPP/ISA to be restricted to such financially questionable stuff.  Maybe I should get that Saxo ISA and go international, but maybe not Hong Kong on this one!

https://www.qinetiq.com/en/what-we-do/services-and-products/vehicle-drive-technology

Army is seriously looking at hybrid drive on all platforms, as far as I'm aware Qinetiq are the only company that comes close to having something near market.  Its not a big market at present, but in 5-10 years time it could be a right money spinner.

If I was to buy my current ranking would be QQ>>>BAE=RR>BAB.

[Viceroy]

Some recent snippets from Armstrong. He still maintains the DOW is heading to 40K and that his model says the March 2020 low won't be penetrated again. 

February (specifically from mid-Feb) is a big turnpoint (up or down?)...;

The ECB is clearly trapped. As I have warned, they cannot allow interest rates to rise for their holdings are so vast, they will lose a fortune. The ECB is dependent upon a consensus of all member states. The Federal Reserve is independent and it need not go to Congress for approval to increase or decrease the money supply. They cannot allow rates to rise or the entire financial structure will begin to crack. The Fed also allowed its balance sheet to contract because it did not reinvest in bonds as they expired. In the case of the ECB, they had to keep rolling what they bought previously, or else the market rates would have risen if people were buying them.
Europe is in trouble. Our capital flow models show movement to the USA for higher yield, but also to the Chinese market with a yield of about 3% and a depth of $16 trillion. This is how China eventually becomes the financial capital of the world. It is a gradual process by post-2032 after the UN and World Economic Forum have undermined Western society, the only rational place will be Asia. China is also working very diligently to expand its own market to reduce its reliance on the US consumer market. Things are changing if you pay attention.

Many people have written in asking if Socrates has changed its forecast on the dollar? The answer is no! We are still in the stage where capital flows are confused and we have not yet reached the point where capital wakes up and says - OMG! Therefore, near-term the dollar has not changed. The January low may yet hold and could even form the low for the year. The shift in capital flows to the dollar remains intact as (1) political turmoil will shift to Europe, (2) confidence in government will start to decline at a more obvious pace globally, (3) capital flows to the dollar will reflect private assets rather than public.
There are many who keep preaching the demise of the dollar and fail utterly to understand even what a reserve currency is and why. All they focus on is debt and prognosticate the doom of the dollar. The IMF has acknowledged the dominance of the dollar as the reserve currency and that it is likely to endure. Yet at the same time, they are looking at a transition to digital currencies and trying to fathom if this will even change the landscape. Others are warning that now that Biden will be president, he will ensure the dollar crumbles because they will be handing out money like crazy.
The real threat has been the drive to use the Swift System as the means to punish nations that buck the trend. The IMF under Legarde threatened to block tax havens from the international economy if they did not hand over everyone who has an account there. This threat was not well-thought-out for all it did was encourage both China and Russia to set up an alternative system.
The real threat to the dollar and will not be a digital currency. Instead, it is the realization that the IMF and the West cannot be trusted. China is moving to a digital currency at lightning speed but it is also setting up through its modern silk-road the alternative to bother the US consumer market and the Western SWIFT world of control. China is developing an alternative to allow it to clear and use its own digital currency in a new world 
The DEMISE of the dollar is underway, but it will take time. It appears the dollar will lose that status by 2028 and it will be gone by 2036. What BigTech is doing right now with their insane censorship is in fact the overthrow of the United States and setting it in fact for the collapse that our Computer has been forecasting for post-2032.

The Dow closed 2020 at 30606.48 below our breakout momentum so we are not yet looking at a runaway market to the upside. We still see this market moving upward with a test of first the 40,000 level and later the 65,000 level by 2032. The pattern recognition models came up with the low of 2020 holding which is interesting since this is the first time such a pattern of this magnitude has taken place in the Dow historically. This strongly suggests that we will not see the 2020 low penetrated.
Stocks rise for one of two reasons. First, is the traditional investment looking at gains and returns. Second, stocks rise in value during periods where the perceived risk is on the government side. The historic high in the PE Ratio was 2009 at the crash-bottom of the stock market. That is when people feared Quantitative Easing and bank failures. At that point, they park money in blue chips just looking to break even. It becomes a safe harbor. That is what we are facing as we have chaos in politics around the world and politicians deliberately trying to crush the economy for the excuse to bring in the New Green World Order

In all my studies, the critical factor has never been the quantity of money. That is always what people point to with hindsight. It is the crack in CONFIDENCE that starts the process and then as governments are confronted by capital fleeing, that is when the debasement begins. It appears that the election of Biden is indeed the crack in confidence we have been waiting for. The markets will reveal their true vote perhaps in February/March.
This election has been the crack in confidence we have been waiting for. Trump came in on the Pi target right to the day - 2017.05 inauguration of Trump. Now the next two waves will be authoritarian and they intend to eliminate "populism" which means ending free elections. Harris will take the presidency from Biden and two terms of 4 years takes her into 2032.

[Castlevania]

8 hours ago, Harley said:

I missed them.  I do have some legacy positions in them and BAE but defo no RR until I see sustainable positive operating cash flows (shame given the good debt ratio, etc).  I rather enjoyed being "vetted" before being able to buy BAE.  Quinetic?  It's so frustrating with a SIPP/ISA to be restricted to such financially questionable stuff.  Maybe I should get that Saxo ISA and go international, but maybe not Hong Kong on this one!

What’s this vetting?

[DoINeedOne]

Norway awarded 61 offshore exploration blocks to 30 oil firms in its latest pre-defined areas (APA) licensing round as it seeks to find more resources close to existing fields, Energy Minister Tina Bru said on Tuesday.

Last December, the country’s top court dismissed a lawsuit by environmental groups against oil exploration in Arctic waters.

Norway is western Europe’s largest oil and gas producer, with a daily output of around 4 million barrels of oil equivalent.

https://www.reuters.com/article/uk-norway-oil-idUKKBN29O0O2

[Harley]

4 hours ago, Castlevania said:

What’s this vetting?

I had to call my broker before I could buy to confirm I was a UK national and presumably not a spy.  Probably a lot more such was his affable manner, clever bods these interrogators!

[planit]

Update on the Covid deaths

 

The trend (of weekly percentage increase) has been nicely down the last 2 weeks. I expected the fall off to be a bit faster but when I looked back I realise we are working against a 70% weekly increase in cases mid Dec-5th Jan so these fast increases [unfortunately] kept the death rate growing.  

Todays figure will need to be under 600 to be lower than last week. If this happens it looks like we have been through the peak. Hopefully the markets will start noticing within a week and we could see a nice rally into March.

Up to now the crazy valuations have been limited to a few stocks and sectors. If this rally brings up everything else [recovery rally] the indices could go much higher than most people are expecting because:

Loads of savings around

Loads of liquidity generally

Feedback loop with gains and speculators

Loads of stocks well under their peak from last year

 

Or I could be completely wrong and everything crashes next week (at some point people are going to notice that the government finances and economy are up shit creek).

 

 

[JMD]

16 hours ago, Harley said:

I voted today and stuck it to the man.  Bought my first crypto today!  I'm going to ladder in, buying each time TPTB do another annoying/scummy thing!

PS: Is there some sort of secret handshake?

I fear that in coming years, when we look back, we humble hodlers may come to realise that buying was the 'most meaningful vote' we made in our entire lives!! 

No secret handshake, but welcome all the same, i think its Michael Saylor/Microstrategy that says: ‘Everyone buys bitcoin at the price they deserve’; sounds critical, but not meant to be, i myself bought in late. 

In the meantime people (cant be said enough times!!!)...

Let's Be Careful Out There | 'Hill Street Blues' Supercut - YouTube

 

[jamtomorrow]

13 hours ago, Loki said:

Daft how they've gone all in on electric with LPG infrastructure already being available and LPG plentiful.  I know the valves need flashlube etc but compared to the work needed to build a load of electric cars and associated chargers, and the electrical infrastructure for those...

Edit: Wonder if the hydrogen blend could work just as well in ICE as boilers.  Not qualified to say but fits in with their bonkers green criteria anyway 

That got me wondering ...

By my fag-packet calculation, we could go all-EV in the UK, generate all the electricity to charge them from big diesel gennies (like the 25MW setup in Stornoway), and still be slightly up on the deal by 5 to 10% in terms of mpg. And that's before you throw any nuclear and/or renewable into the generating mix.

Assumptions: 60mpg diesel, 4 mile per kwh EV, 30% diesel genny efficiency, 10% transmission/charging loss from genny to EV battery.

[Yellow_Reduced_Sticker]

14 hours ago, DurhamBorn said:

...The ban is on petrol and diesel engines,but a few tweaks and they can burn other fuels,especially diesel.When is a diesel engine not a diesel engine?.

 

Stan Meyer's Water Fuel Technology Car GENIUS?!

 

 

14 hours ago, Harley said:

I'm such an effing wimp.  Deflated now after what was a good day!  Cheer me up, tell me about some losses!

 

Oh...sh*t I'm off topic again with a dab of conspiracy thrown in, 

 

I know I'll CHEER UP @Harley

 

Our sainsburys are doing WELL up to £2.50p today... did ya buy MORE at the double-bottom at: £1.79p?

 

Damn i FORGOT to get my limit order on at 1.79p ...what a BUGGER!!!

 

 

 

[Bobthebuilder]

14 hours ago, DurhamBorn said:

When is a diesel engine not a diesel engine?

When it's running on vegetable oil.

[leonardratso]

lard.

[sancho panza]

On 23/01/2021 at 23:37, dnb24 said:

This exactly, the quillette piece alluded to previously was a hatchet job on a number of people who are sceptics of lockdown- not covid. Lockdown is and will be seen by history as a significant failing of the woke/weak west once the dust has settled. Stockholm syndrome is always a risk- and even now I have times when I think- maybe we are doing the right thing- until I deal with the suicidal patient with 2 under 12s on a Friday afternoon, or when my friend tells me of their 5 year old who has had a nervous breakdown due to fear of the virus,  all the way through to the ONS data showing home deaths are the highest they’ve ever been on record, or the data showing that UK deaths in 2020 are no worse than 12 years ago-  then I see straight again and realise what a capricious group of politicians and scientists we have leading our country.

Exactly,I couldn't agree more DNB.I'm seeing a lot more seriously ill mental pts at work.Anecdotally,talking to Police that I see (mainly wehn patients are getting sectioned),a fair few have talked about increased suicides and rapes(of all things) as a result of Lockdown.We've yet to get the data,so time will tell if it's a reality across the country or not or whther it may be a more localiased phenomenon.

Within my social circle,I have a friend whose teenage son ahs started self harming because he's just not coping with being cooped up at home all day.Similarly,a teacher I know was telling me that one or two of her young children are developing OCD with regard to hand washing and layering on disinfectant hand rub.The problem is that these mental health issues can last a lifetime once they've developed(Decl:I'm not trained in mental health,so am jsut conjecturing)

At work,I've been to patients who haven't seen a GP in months(dementia patients particularly suffer because they can't articualte what's wrong with them) and we end up transporting to A&E because we're querying cancer(I jest you not).

I think Covid has manifested people's fear of their own mortality in a way people just don't normally think about it.I've been first on scene at fatal RTC's,been to stabbings,patients on the edge of life,patients who have on occasion passed away on the back of the ambulance etc etc.Life generally ends in sadness.

But what really grates me is the way the Lockdown has denied people someone to hold their hand when they pass to the other side.The banning of family/friends/religious leaders from hospitals and care homes I think is one of the cruellest aspects of Lockdown(among many).

 

On 24/01/2021 at 08:22, jamtomorrow said:

SP, without wanting to derail the thread too much more, but ... what is the lockdown-sceptic take on New Zealand? Their domestic economy has seemingly been operating near normal (in terms of civic freedoms) for a few months now, capacity crowds at Rugby matches etc.

To the extent that a single case of community transmission is now news-worthy in NZ: https://i.stuff.co.nz/national/health/coronavirus/300213129/covid19-northland-woman-tests-positive-for-covid19-after-leaving-managed-isolation

My layman's view: an elimination strategy *can* work if you live on an island and you're willing to do what's necessary (rather than what's popular).

Edit to add: the real mistake is weak/partial reactive measures with no strategic framework. Elimination can work. "Live with it" could have worked. This make-it-up-as-we-go-along middle ground we find ourselves in in the UK is the real disaster: neither fish nor fowl.

I don't think this is thread derailment JT.Covid is the most important driver of economic newsflow at the minute.

As a clinician,I always practice reflection after jobs ie what did we do right,what did we do wrong.To do it you need to be honest with yourself on a fundamental level.Reflection is part of any clinicians development but particularly crucial for autonomous practitioner's eg Doctors/Nurses/Physio's/Ambulance staff etc.I'm not sure Chris Whitty and Patrick vallance have been reflecting much this past year.

If I can point out the central problem with your question is that it's all about covid(which is understandable).We've seen from the UK ICU data posted last week,that ICU admissions for MI's,strokes etc is down but covid up, and more widely ICU admissions 10-20% higher than the Covid peak in Mar/Apr.Nothing much unusual there unless you work in those depts like @Presuming Eds wife and are getting smashed physically and emotionally.

NZ all cause mortality is the highest since 2009.A fact you don't see printed in the media that much if this data is accurate.Demographic warning natch.

https://knoema.com/atlas/New-Zealand/Death-rate

 

With regard to Covid in NZ there are a number of issues that might explain the low incidence of covid.

1) the travel ban worked.NZ has always had a strong border guard for agricultural produce,so it was easy for them to step up a gear.I don't know when their travel ban kicked in but looking at point two below,I suspect that would be a key date to reflect on.The UK was letting people travel in during the lockdown iirc.BBC says 2 Feb 2020.

https://www.bbc.co.uk/news/world-asia-53274085

On 2 February, a man in the Philippines became the first person outside China to die of Covid-19.

At this point, there were no reported cases in New Zealand, but the next day, the country began banning entry to any foreigner coming from or via China. Any New Zealander returning from China had to isolate for 14 days.

2) viruses mutate and different strains spread at different speeds in different countries(most likely there is corss over in border areas but that's data we don't have).For a Uni essay,I studied scarlet fever outbreaks in SE Asia.What was intriguing was how different strains predominated in countries that were geographically proximate to each other thsu explaining the varying severity of the disease and success in treating it.

3) Geographical/Seasonal variation:The first wave occurred during the kiwi summer,so the pool of susceptible people may have been small.In addition,the second wave has occurred during their summer.Having said that,the Kiwi's have been successful at stopping the virus getting in to the country which makes a huge difference and they've lasted long enough to get the vaccine out.

4) Lockdown isn't one homogenous policy:There's a possible reflection here that people are conflating NZ's success in keeping viral spread low with it's domestic lockdown.When you look at the countries/US states with the highest covid death rates,some had the strictest domestic lockdowns-Italy,Spain,Belgium,UK,some US states.The key is to work out which policy was successful and replicate that elsewhere.

There is a logic to assuming that domestic lockdowns result in patients ending up with higher viral loads.You referred earlier to a family of 6 all getting hit hard with covid.It could well be that being couped up together for prolonged periods actually increased the severity of the outbreak in their household.High viral load has played a part in the susceptibility of clinicians to the disease.

Certainly when you examine some US states side by side,no firm conclusions can be drawn about domestic lockdowns-either way.But there's an obvious conclusion here if we accept that as a fact.

5) There's a danger comparing covid rates by country we have to be aware of.I say this because countries like the UK are clearly misdiagnosing a large number of covid deaths that are actually due to other reasons(I've seen this myself,taking really sick patients in who are covid +ve but suffering with other illnesses not respiratory).That means our numbers are skewed higher than they should be.

NZ has had a very low figure,but Australia/Japan/ has too.Lots to learn from if we're honest with ourselves.

 

Looking at NZ their travel ban looks key.