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

[Sasquatch]

3 hours ago, reformed nice guy said:

 

I bought 100 philharmonics from them in December for just under £2400 including delivery.

Same 100 would £2,602.50 with the risk of an additional 20% vat and handling charge...

I checked Chards and they are £3,498.60 for 100 maples.

Still cheaper to go for silver-to-go! About a £350 or so saving if you have to pay vat or almost £900 if your lucky and it gets through vat free

Everyone trying to buy silver at the moment should remember the capital gains tax scenario. Unless I'm mistaken, only silver britannias are excluded from capital gains tax as these coins (along with gold sovereigns) are designated as British legal currency. Not a problem of course if your gain per annum is at or below the threshold (£12,300 I think at the moment( but if silver goes to the moon......? 

[Loki]

23 minutes ago, Sasquatch said:

Everyone trying to buy silver at the moment should remember the capital gains tax scenario. Unless I'm mistaken, only silver britannias are excluded from capital gains tax as these coins (along with gold sovereigns) are designated as British legal currency. Not a problem of course if your gain per annum is at or below the threshold (£12,300 I think at the moment( but if silver goes to the moon......? 

I buy maples (cheaper) and Brits (CGT free) for this reason.

Sell the Maples up to CGT limit, then the Brits. 

[Rave]

6 hours ago, JMD said:

(Excuse thread derailment, but cars, yellow reduced stickers and pizzas are sometimes given a free pass here!)                                                                                                                                                                           Could be wrong, but wasn't the late 90's Peugeot 405 considered a sweet spot, cheap and cheerful to buy, and in that the engine required no modification, though I think it was recommended to have a separate veg oil fuel tank so could switch to diesel tank on cold mornings?

As @Knickerless Turgid has already said, PSA cars with the XUD engine are often a good bet for running on veg, yes. The received wisdom is that you want one with a Bosch pump rather than a Lucas one. The Mercedes OM605 and OM606 will apparently run on anything and are tough as old boots. And, in defiance of my 'running direct injection diesels on veg is a bad idea' rule of thumb, people seem to get away with running VW VP and even PD engines on veg.

The only car I've tried it with was a Mk1 Mondeo diesel. I don't think I ever completely got rid of a proportion of fossil diesel in the tank but I ran it on some pretty high concentrations of veg oil over a summer, with no apparent ill effects. Around October I took it down the M23 and noticed it seemed to be hesitating, which I put down to it being too cold and the oil starting to gel. I gave up on the veg at that point- however the next year it became increasingly hard to start and I eventually had to replace the fuel filter housing which contains a rubber diaphragm primer bulb which are notorious for leaking, so the hesitation on veg could simply have been an early manifestation of that problem (or equally the veg could have caused it, I suppose). Not long after that I got fed up with driving such a dreadfully slow car and replaced it with a petrol Mk3 Mondeo which did pretty much half the MPG but was of course a great deal nicer to drive!

One thing which I hadn't considered until I tried it is that it's actually a really slow, laborious and messy process to empty a load of cooking oil bottles into the tank of a car. Each bottle takes a minute or so and there are 4 1/2 litres in a gallon! I guess the process could probably be speeded up somewhat if you were to buy 3 or 5 litre bottles and empty them into a jerry can first, but even so it's a considerable faff.

[Sasquatch]

7 minutes ago, Loki said:

I buy maples (cheaper) and Brits (CGT free) for this reason.

Sell the Maples up to CGT limit, then the Brits. 

I don't have any maples but I do have a nice collection of pre 1920 silver coins which I suspect I will eventually be selling off in the same manner.

And some of them are pre 1920 by about 1,800 years 

[MrXxxx]

2 hours ago, Yellow_Reduced_Sticker said:

@Castlevania yeah saw that at other thread - hattip to @Frank Hovis

however i just prefer the Brit stuff, but must say the video below is HILARIOUS of a MULTI-Millionaire TIGHT-WAD!

 

I expect some of YOU guys are gonna go like this woman when you've made your millions come the end of the cycle?!!!

 

 

Just watched this and I don't this she deserves a Dosbods 'Badge of Honour'...there is being cautious/valuing money that I think a number of us do here, and there is exploiting peoples good nature that I get the impression this woman does, whether its her ex-husband, friend, or the sucker who gave her a free flight knowing she was going to a business meeting.

[MrXxxx]

The Big Short now on BBC iplayer if anybody wants to watch it...just watched it again, and it looks as though we haven't learnt from history!

[Bricks & Mortar]

52 minutes ago, MrXxxx said:

Just watched this and I don't this she deserves a Dosbods 'Badge of Honour'...there is being cautious/valuing money that I think a number of us do here, and there is exploiting peoples good nature that I get the impression this woman does, whether its her ex-husband, friend, or the sucker who gave her a free flight knowing she was going to a business meeting.

Exactly.  As the video started, I was really quite keen on her.  The exploitative aspect was when I decided not to repost in the 'undeluded non-scrapper' thread.

[Bus Stop Boxer]

2 hours ago, Sasquatch said:

Everyone trying to buy silver at the moment should remember the capital gains tax scenario. Unless I'm mistaken, only silver britannias are excluded from capital gains tax as these coins (along with gold sovereigns) are designated as British legal currency. Not a problem of course if your gain per annum is at or below the threshold (£12,300 I think at the moment( but if silver goes to the moon......? 

Its a real fucker trying to play catch up, my best mate has been stacking silver quietly, as off the books as poss for years, and im trying to get loaded up without paying VAT or CGT.

Its been a nice thought thinking you could buy £35ks worth of Brits and know that as the courier struggles down the path a week later with 45 kgs of metal, they could be worth £100k plus.

Paying £7k in VAT sort of takes the edge off but still....

I do have a nice stash of Baird rabbits and monarchs and some first day editions etc.

Seemingly impossible to do in a hurry. Could go the ETF route but not sure if that would help inflict the required damage.

1500 Brits from Germany, plus the UK added vat works out about the same as Ebay prices..

Might sit it out and buy Sovs to address the wider fuckedupedness of everything.

[leonardratso]

BAT+IMB etc;

https://www.wsj.com/articles/during-covid-19-lockdowns-people-went-back-to-smoking-11611829803

[jamtomorrow]

10 hours ago, Rave said:

As @Knickerless Turgid has already said, PSA cars with the XUD engine are often a good bet for running on veg, yes.

PSA engines from that era were quite something. I once mis-fuelled a Pug HDi with something like 50% petrol - if anything, it seemed to like it and ran better than ever afterwards. Just a pity about the rest of the car, everything outside the drivetrain wasn't attached properly. 100% clown car syndrome.

Drove it into a wall at low speed in light snow eventually, and sure enough the bodywork all but disappeared. Nice insurance payout tho.

[Yellow_Reduced_Sticker]

11 hours ago, MrXxxx said:

Just watched this and I don't this she deserves a Dosbods 'Badge of Honour'...there is being cautious/valuing money that I think a number of us do here, and there is exploiting peoples good nature that I get the impression this woman does, whether its her ex-husband, friend, or the sucker who gave her a free flight knowing she was going to a business meeting.

 

Oh yeah I wholeheartedly agree, she's certainly a deceiving... but funny milf !

 

AnyHOO...check this video out, FAST-FORWARD to 09:00...I'm sure I'm related to this woman! AND she gets my Dosbods 'Badge of Honour'! Oh the 1990's if ONLY we could have 'em BACK!

 

[Yadda yadda yadda]

15 hours ago, Cattle Prod said:

Apmex isn't, but I haven't seen premiums like that since 2011. A couple of hundred pages back someone was worrying about paying a couple of dollars over spot for coins. I said don't worry about it, the premium will inflate too, I was getting $10 over spot back then. Its $7.45 now, definitely a physical shortage.

https://www.apmex.com/category/20000/silver-bullion/all

Fwiw I've used these many times, and recommend. Probably has the biggest inventory in the US, and the best prices. Back in the last bull market, they didn't ship directly to the UK/Ireland so I set up a mailbox in Florida to route shipments through. Never had a coin go missing, amazingly. They just labelled it 'machine parts' for me.

 

Had a look just now and it was almost all 'alert me' when back in stock. Have they had massive overnight sales? I looked down the first page and there were only a few coins available and all of them priced at multiples of spot so must have collector's value.

[DurhamBorn]

Part of the thesis to buy the telecoms was because during an inflation period regulators would want investment,and they would take their foot off the necks of telcos on price etc to get it.In allowing them 2%+inflation etc it would mean massive increases in free cash as inflation ran higher and telcos networks were mostly paid for,or the debt was well structured at very low rates.

Some people are now starting to pick up on the regulator bit,

https://www.telegraph.co.uk/investing/shares/questor-watchdogs-taking-heat-vodafone-getting-grip-costs-buy/

What they are still missing is that inflation will be higher than anyone expects and the affect of price increases on telcos is huge as they are depreciating assets at a set rate.

I got most of my stakes in the sector at the bottom after holding a few from higher up,but its still a sector that looks great for the cycle.IF we get inflation over 3% and averaging 6% over the cycle ,and IF they keep paying down debt as a sector as it comes off i think we should see maybe 250% returns including divis over the cycle.

[Castlevania]

6 minutes ago, DurhamBorn said:

Part of the thesis to buy the telecoms was because during an inflation period regulators would want investment,and they would take their foot off the necks of telcos on price etc to get it.In allowing them 2%+inflation etc it would mean massive increases in free cash as inflation ran higher and telcos networks were mostly paid for,or the debt was well structured at very low rates.

Some people are now starting to pick up on the regulator bit,

https://www.telegraph.co.uk/investing/shares/questor-watchdogs-taking-heat-vodafone-getting-grip-costs-buy/

What they are still missing is that inflation will be higher than anyone expects and the affect of price increases on telcos is huge as they are depreciating assets at a set rate.

I got most of my stakes in the sector at the bottom after holding a few from higher up,but its still a sector that looks great for the cycle.IF we get inflation over 3% and averaging 6% over the cycle ,and IF they keep paying down debt as a sector as it comes off i think we should see maybe 250% returns including divis over the cycle.

Telcos is the one sector where I’ve pretty much gone nowhere. I’m down (around 10% after dividends so not that bad considering where I first started buying) on all of Vodafone; Telefonica and BT which is offset by big gains in Airtel Africa. I’m happy to hold and it’s one sector over the past couple months where lots of stuff has flown that still looks good value.

[DurhamBorn]

10 hours ago, leonardratso said:

BAT+IMB etc;

https://www.wsj.com/articles/during-covid-19-lockdowns-people-went-back-to-smoking-11611829803

I really like Imps new CEO.His plan looks right to me.Pay down debts to 2x from 2.7x then use the £1.3 billion a year after the divi for share buy backs or special divis.

I expect it will take 2 years,then they will buy back shares if under around £22,or if over maybe small buy backs and special divis.They have a bond coming off next year for £1 billion at nearly 9% interest.I expect they will pay that off without rolling over,there is £90 million straight to profits.

If they can keep profits flat even at the operating level they should be able to return around 18% a year to shareholders from here.If operating profits fall in a few years time,say 3% a year,they should still be able to pay the divi,buy back 3% of stock to hold eps steady and special divs of 6%.

The last CEOs strategy was crap.Increasing the divi 10% a year with £13bill of debt was stupid.Imps should carry around £7bill debt and then have a flexible capital plan depending on the share price.The new plan is exactly that.

Iv been buying both BAT and Imps back after selling them all near their 17 highs.Sold them,bought gold miners,sold some of them bought potash sold some of them bought back BAT and Imps.I intend to buy back around 70% of the capital value i sold but they have halved and more from when i sold and gold potash doubled and trebled,so a fantastic bit of work.

 

[DurhamBorn]

9 minutes ago, Castlevania said:

Telcos is the one sector where I’ve pretty much gone nowhere. I’m down (around 10% after dividends so not that bad considering where I first started buying) on all of Vodafone; Telefonica and BT which is offset by big gains in Airtel Africa. I’m happy to hold and it’s one sector over the past couple months where lots of stuff has flown that still looks good value.

Im up on them all apart from TEF,thats down 4% after divis but i got lucky in a way as i bought a few ladders all at once on VOD and BT and tagged the bottom (so far) on them.I also bought more BT below £1 on @sancho panza coma scores as his work showed them cheapest.

I dont think the sector will do much until profits start to move higher,maybe another year,but once it starts it should be sustained.Debts are too high,but they all seem to be tackling this now.

Could be a big takeover happens in the sector as well to get things rolling.

[leonardratso]

WSb has 7.3 million members now, (from the original 1.8 or 2.3 M), quite an audience, so any suggestion with legs is likely to cause a bid, even if only maybe 20% of them can 'whale' in. Who knows whats really happening though numbers wise, imaging 7M people just buy a few $1-500 worth. Bit optimistic i know, would be nice to see some aggregates.

[No One]

52 minutes ago, leonardratso said:

WSb has 7.3 million members now, (from the original 1.8 or 2.3 M), quite an audience, so any suggestion with legs is likely to cause a bid, even if only maybe 20% of them can 'whale' in. Who knows whats really happening though numbers wise, imaging 7M people just buy a few $1-500 worth. Bit optimistic i know, would be nice to see some aggregates.

If they are smart they won't bet the ranch. Maybe if they want to stick it to the man they'll put in a tenner each and see what happens.

 

But people expecting to get rich, that will be bad.

[JMD]

3 hours ago, Yellow_Reduced_Sticker said:

 

Oh yeah I wholeheartedly agree, she's certainly a deceiving... but funny milf !

 

AnyHOO...check this video out, FAST-FORWARD to 09:00...I'm sure I'm related to this woman! AND she gets my Dosbods 'Badge of Honour'! Oh the 1990's if ONLY we could have 'em BACK!

 

YRS, I see what you mean about that woman, maybe you are indeed related to her - but genetics aside, what a truly inspirational person she is.                                                                                                                                'I only want two carrier bags of hard core' (now that's what I call a decomplex trade!!!)... Anyone intrigued needs to watch from 9:00 mins.

[JMD]

3 hours ago, DurhamBorn said:

Part of the thesis to buy the telecoms was because during an inflation period regulators would want investment,and they would take their foot off the necks of telcos on price etc to get it.In allowing them 2%+inflation etc it would mean massive increases in free cash as inflation ran higher and telcos networks were mostly paid for,or the debt was well structured at very low rates.

Some people are now starting to pick up on the regulator bit,

https://www.telegraph.co.uk/investing/shares/questor-watchdogs-taking-heat-vodafone-getting-grip-costs-buy/

What they are still missing is that inflation will be higher than anyone expects and the affect of price increases on telcos is huge as they are depreciating assets at a set rate.

I got most of my stakes in the sector at the bottom after holding a few from higher up,but its still a sector that looks great for the cycle.IF we get inflation over 3% and averaging 6% over the cycle ,and IF they keep paying down debt as a sector as it comes off i think we should see maybe 250% returns including divis over the cycle.

DB, the one sector I didn't buy anywhere near enough of was in Potash. I own, oil, telecoms, PM's, and others, etc, and am happy with them. I have also got some forestry investments because I am trying to 'fill up my soft commodity sector allocation' with other alternative decomplex industries, as I think I have maybe missed the boat in Potash (I was caught out by their early run up). I know I can't directly substitute Potash with another industry but do you - or others here - have some ideas perhaps regarding other potentials within the soft commodity sector? I'm thinking seeds and water, but not sure best way to invest in those, especially when trying to comply with the decomplex of which I am a 'big fan'.

[Majorpain]

Quote

I have been following GME since mid-September and over that time I have banked myself a %1300 return in the process. However, the whole time I was a little puzzled with how severe the reactions from Wall Street have been, especially this week. "The company had more than 100% of its stock sold short! That's never happened before!", you say. I know, I know, but that's not actually not a new thing. A short squeeze, even one of this magnitude, should have squoze by now with GME up more than 10x in the span of weeks. Something is just not right. I think there is something much, much bigger going on here. Something big enough to blow up the entire financial system.

Here is my hypothesis: I think the hedge funds, clearing houses, and DTC executed a coordinated effort to put Game Stop out of business by conspiring to create a gargantuan number of counterfeit shares of GME, possibly 100-200% or more of the shares originally issued by Game Stop. In the process, they may have accidentally created a bomb that could blow up the entire system as we know it and we're seeing their efforts to cover this up unfold now. What is that bomb? I believe retail investors may hold more than 100% of GME (not just 100% of the float, more than 100% of the actual company). This would be definitive proof of illegal activity at the highest levels of the financial system.

For you to follow this argument, you need to go read the white paper "Counterfeiting Stock 2.0" so you understand how the hedge funds can create fake stock out of thin air and disguise it so it looks like real shares. They use these fake shares in short attacks to drive the price of a company down until they put them into bankruptcy. This practice seems to be widespread among hedge funds that go short. There is even a term for it, "strategic fails–to–deliver." Counterfeiting shares is extremely illegal (similar level to counterfeiting money) but it's very difficult to prove and even getting the court to approve subpoenas because of the way the financial industry has stacked the deck against investigations.

This completely explains why so many levels of the financial system seem to be actively trying to get in the way of retail investors purchasing more GME. It's not just about a short squeeze, it's about their firms' very existence and their own personal freedom. We have the opportunity to put all these people in jail by proving that we own more than 100% of shares in existence.

There are are 71 million shares of GME that have ever been issued by the company. Institutions have reported to the SEC via 13F filings that they own more than 102,000,000 shares (including the 13% of GME stock is owned by Ryan Cohen). Now, I don't know the delay/variance on these ownership numbers, but I think there is a pretty solid argument that close to 100% of GME is owned by these firms, if not more.

Moreover, there are now more than 7 million people subscribed to r/wallstreetbets~~. I know lots of people here are sitting on a few hundred shares that they bought back when it was under $50. Some of us are even holding thousands. If the average number of shares owned by each subscriber is even close to 5-10, we have a very good shot at also owning a similarly enormous amount of GME.~~ Even if the average was just 10 shares per legit subscriber, that puts the minimum retail position at about 30-50% of the entire company.

GME has been on the NYSE threshold list for almost a month. We don't have January data yet, but I just analyzed the data from the SEC's fails–to–deliver list for December (all 65,871 lines of it) and looked up the number of shares that were likely counterfeit. For comparison, I did the same for a couple random tickers. Most companies have close to no shares not show up. Of those that do, it's a relatively small number of shares. For example, two random companies: Lowes ($LOW, ~$125B market cap) had 13,960 shares fail to be delivered at its highest point that month, Boston Beer Company ($SAM, $11.5B market cap) had 295 shares fail to be delivered.

How many shares of GME failed to deliver? 1,787,191. As the white papers points out, the true number of counterfeit shares can be 20x this number. How bad do you think that number will be when we get the numbers for January? I'm willing to bet its many times that. Look at how that compares to other companies' stock:

Histogram showing number of shares that weren't delivered in December (x-axis) vs the number of companies that fall into that bin (y-axis). GME is an extreme outlier.

I think this explains all the shenanigans going on the last few days. There is way too much counterfeit GME stock out there and DTC, the clearing houses, and the hedge funds are all in on it. That's why there has been such a coordinated effort to disrupt our ability to buy shares. No real shares can be found and it's about to cause the system to fall apart.

TLDR; We probably own way more of GME than we think and that is freaking out Wall Street because it could prove they've been up to some extremely illegal shit and the whole system could implode as a result.

This is starting to get very interesting, posted here because if it comes true it could cascade into BK event.  Something to watch at the very least IMO.

Because GME had greater than 100% short interest (peaked at 130% IIRC), the only way that could occur is if hedge funds were using naked shorts (shares magicked into existence).  After all, you cant loan out the same share to multiple people right?  That's not usually a problem if there is enough churn that they can buy shares to erase the naked short at a later date.

Where it does become a problem is if a bunch of deplorables come in and buy up all the shares on the market, it can go wrong by pushing the price up short squeeze wise BUT it can also go wrong if they buy up enough of the naked shorts that the die hard holders have more than 100% of the actual issued shares.  In a nutshell, people could have shares in their brokerage account that have been magicked into existence by a hedge fund, which hold no voting or dividend rights (because they don't actually exist).  

Needless to say, trying to unf*ck that situation would be emotional: angry mob Robinhooders, Hedge funds with an unlimited liability and law breaking, Banks ultimately on the hook and other investors wondering if the other shares in their portfolio actually exist.  Market breaking stuff.

[DurhamBorn]

@Clueless Imbecile the Fed do operate along the curve,but the short end tends to control money in the economy more because people park it short term until they use it.Forcing down the short end tends to encourage entities to invest on other things instead for better returns.The long end tend to be pension funds etc and the Fed knows if the money supply goes up a lot it ends up in the long end anyway through savings.All "money" ends up in assets at some point,and all money flows up to long term assets over time.A pebble in the middle of a pool makes waves quicker in the middle,but they end up at the shore.If its a small pebble just a ripple at the edge,a boulder a big wave.

The cycle ahead though should be a distribution cycle,a rare beast,and thats where money flows from those longer term assets down the chain to be consumed.Thats why the assets closest to source of needs should outperform.

[leonardratso]

this should halt them in their tracks, lol.

 

[DurhamBorn]

29 minutes ago, JMD said:

DB, the one sector I didn't buy anywhere near enough of was in Potash. I own, oil, telecoms, PM's, and others, etc, and am happy with them. I have also got some forestry investments because I am trying to 'fill up my soft commodity sector allocation' with other alternative decomplex industries, as I think I have maybe missed the boat in Potash (I was caught out by their early run up). I know I can't directly substitute Potash with another industry but do you - or others here - have some ideas perhaps regarding other potentials within the soft commodity sector? I'm thinking seeds and water, but not sure best way to invest in those, especially when trying to comply with the decomplex of which I am a 'big fan'.

Im stuck on that myself as well to be honest.I got big holdings away in Mosaic,Nutrien etc,but didnt get enough in K+S.I did consider Scandi fish companies etc,but already sky high.Im looking at new areas like warehouse farming etc where food is grown but its a difficult sector to work out.

[JMD]

11 minutes ago, Majorpain said:

This is starting to get very interesting, posted here because if it comes true it could cascade into BK event.  Something to watch at the very least IMO.

Because GME had greater than 100% short interest (peaked at 130% IIRC), the only way that could occur is if hedge funds were using naked shorts (shares magicked into existence).  After all, you cant loan out the same share to multiple people right?  That's not usually a problem if there is enough churn that they can buy shares to erase the naked short at a later date.

Where it does become a problem is if a bunch of deplorables come in and buy up all the shares on the market, it can go wrong by pushing the price up short squeeze wise BUT it can also go wrong if they buy up enough of the naked shorts that the die hard holders have more than 100% of the actual issued capital.  In a nutshell, people could have shares in their brokerage account that have been magicked into existence by a hedge fund, which hold no voting or dividend rights (because they don't actually exist).  

Needless to say, trying to unf*ck that situation would be emotional: angry mob Robinhooders, Hedge funds with an unlimited liability and law breaking, Banks ultimately on the hook and other investors wondering if the other shares in their portfolio actually exist.  Market breaking stuff.

That's interesting Majorpain. Maybe a bit off topic, and I am certainly no expert here - but I wonder can 'restricted shares' be shorted? All the tradeable shares which can be bought and sold are I believe called the 'float'. But restricted shares are owned/potentially owned by co. directors, or not yet released by the company, and which can often amount to a staggering 20% of total shares. Just wondering if the 'invented shorted shares' mentioned above - and which is I accept an illegal activity to do - but might they just have something to do with restricted shares and the Hedge funds have invented a new outrageous derivative to include them?