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

[DurhamBorn]

6 hours ago, Hancock said:

Anything you're seeing mid/long term, or just another divvy payer.

Just another 6.5% compounding return div+capital exect div cut to 4%

[wherebee]

So many of us who picked up the oilies in the lowest lows are looking at almost 30% up in six months so far.  If there IS a BK coming, it would be rational surely to take some of that profit?

Or as no BK is baked in in todays crazy world, is holding throughout the cycle preferred.

[MrXxxx]

9 hours ago, DurhamBorn said:

BP have pulled out of a lot of schemes as they couldnt make the money they wanted.I think they want this one for strategic reasons.Its a shot across the bows of other players to make them all bid higher on other projects to get them.I think BP are looking at producing hydrogen from the power when prices drop.Watch to see what they do with hydrogen.

Remember as well.Utilities have to fund from debt mostly,big oil with Brent at $60 or above can fund from free cash.Free cash has zero coupons.

BP forcing up the price makes raising debt to compete harder for other players.You can argue on if it is the best use of shareholder capital,but i think it is.

Agree, maybe this one is a `loss leader` in BPs supermarket sweep.

[Seacrest]

Didnt they say the same over the 3G licenses i think it was,  everyone blamed everyone else for the prices paid, net result was industry consolidation?

[ThoughtCriminal]

2 hours ago, Mapper said:

Harr Dent has a ticket on the BK Express. It arrives in April apparently. All aboard!

 

You can argue with his forecasts and his timings but the leverage/debt numbers he cites are phenomenal. 

 

Short the NASDAQ and buy 30 year treasury bonds he concludes. 

 

Hmmm, didn't DB say that bonds would have one last Hurrah?? 

[BearingUp]

17 minutes ago, ThoughtCriminal said:

You can argue with his forecasts and his timings but the leverage/debt numbers he cites are phenomenal. 

 

Short the NASDAQ and buy 30 year treasury bonds he concludes. 

 

Hmmm, didn't DB say that bonds would have one last Hurrah?? 

IBTL? Some discussion a few pages back suggesting that even these will continue to fall??

[Mapper]

25 minutes ago, ThoughtCriminal said:

Hmmm, didn't DB say that bonds would have one last Hurrah??

I think he did

Re any talking head's timings, I agree, how can you be sure?

The idea of selling up and being in cash, bonds, gold etc. for me I don't think so. I am planning to hold through any BK.

Most of what I own is reflation leaning and I thoroughly enjoy recieving dividends.

[Hardhat]

2 minutes ago, Mapper said:

The idea of selling up and being in cash, bonds, gold etc. for me I don't think so. I am planning to hold through any BK.

I think it really depends what sectors you have in your portfolio - if someone was heavily invested in NASDAQ stocks, it would probably be a good idea to take some money off the table soon. 

But oil companies are likely to fare better in a crash, especially as they've been beaten down somewhat already. They don't have as far to fall. 

Personally I'll be reviewing my portfolio for anything that might be frothy / tech leaning, which might potentially get hammered in a BK, and decide whether to hold case by case.

[BearingUp]

2 minutes ago, Mapper said:

I think he did

Re any talking head's timings, I agree, how can you be sure?

The idea of selling up and being in cash, bonds, gold etc. for me I don't think so. I am planning to hold through any BK.

Most of what I own is reflation leaning and I thoroughly enjoy recieving dividends.

Agree, but I need to buy a house this year and feel like it's time to get my ISA investments into cash sooner rather than later. Debating whether to withdraw completely into Premium Bonds and/or start rotating into IBTL or $US. 

[ThoughtCriminal]

DB, what are your thoughts on bonds? Still unchanged? 

[Loki]

3 hours ago, Mapper said:

Harr Dent has a ticket on the BK Express. It arrives in April apparently. All aboard!

 

Getting a kicking in the comments

[ThoughtCriminal]

9 minutes ago, Loki said:

Getting a kicking in the comments

True.

 

And like Schiff he's been calling for a BK for a LONG time. 

 

But then most of the people slagging him off in the comments are "Bitcoin, doge, Tesla to the moon brah!", types. 

[sleepwello'nights]

44 minutes ago, ThoughtCriminal said:

You can argue with his forecasts and his timings but the leverage/debt numbers he cites are phenomenal. 

 

Short the NASDAQ and buy 30 year treasury bonds he concludes. 

 

Hmmm, didn't DB say that bonds would have one last Hurrah?? 

My Vanguard UK Gilts dropped a bit in the last few weeks. Quite pleased, perversely, because I sold some to release some money for my house purchase. 

Now waiting for the last hurrah. 

I plan to reduce my share portfolio a bit, I need to move some to use my ISA allowance more effectively. I'll wait until after April in case the BK predictions happens in line with anticipated timing.

Oh for a crystal ball, or some more investors for my time machine. More funds are needed for development research. 

[Loki]

3 minutes ago, ThoughtCriminal said:

True.

 

And like Schiff he's been calling for a BK for a LONG time. 

 

But then most of the people slagging him off in the comments are "Bitcoin, doge, Tesla to the moon brah!", types. 

Those types aren't worth listening too, but then to paraphrase Zerohedge on a long enough timeline the probability of a BK rises to 1

[ThoughtCriminal]

2 minutes ago, Loki said:

Those types aren't worth listening too, but then to paraphrase Zerohedge on a long enough timeline the probability of a BK rises to 1

Yes, what's that line from the big short? 

 

"I might have been early but I'm not wrong" 

 

"They're the SAME FUCKING THING!!!" 

[Harley]

4 hours ago, Mapper said:

Harr Dent has a ticket on the BK Express. It arrives in April apparently. All aboard!

 

Wrong "BK"?  His is the "Big Klimax"!!!!

Thanks for posting.  Nice (plus timely) to be reminded of the clothes the Emperors of Finance aren't wearing!

More support for my change of tack.

She's great at this stuff.

[Talking Monkey]

57 minutes ago, BearingUp said:

IBTL? Some discussion a few pages back suggesting that even these will continue to fall??

I remember in March seeing some of the daily action on tlt and being surprised that there were heavy down days where it fell hard alongside the indices, but this did correct back very quickly so that across the March sell-off it did in fact overall do its hedging part.

What are peoples thoughts on rotating. On HL I am yet to do any rotation, though I will I think get round to it in the coming weeks

[Harley]

1 hour ago, Hardhat said:

Personally I'll be reviewing my portfolio for anything that might be frothy / tech leaning, which might potentially get hammered in a BK, and decide whether to hold case by case.

Oh well, one redeeming point about my portfolio - little to worry about on that frothy front!  Why I've pulled back to trading.  Emotionally hard to sell off the few value holds that have run but I have set up a warning system to tell me when to sell half my holdings, the others already having "sold" off by half+!  Very little to no value buys out there atm just progress with my current holds - Wild Coyote time?  Big issue is where to put the freed funds - too much cash risky, I agree things like PMs and BTC could sell off too (as usual, at least initially), and bonds may have one last hurrah (others like Raoul Pal have said similar).  Plus repressive regulation will no doubt follow so needs to be in the "right" place, whatever that is. 

[Talking Monkey]

2 minutes ago, Harley said:

Oh well, one redeeming point about my portfolio - little to worry about on that frothy front!  Why I've pulled back to trading.  Emotionally hard to sell off the few value holds that have run but I have set up a warning system to tell me when to sell half my holdings, the others already having "sold" off by half+!  Very little to no value buys out there atm just progress with my current holds - Wild Coyote time?  Big issue is where to put the freed funds - too much cash risky, I agree things like PMs and BTC could sell offf too (as usual, at least initially), and bonds may have one last hurrah (others like Raoul Pal have said similar).  Plus repressive regulation will no doubt follow so needs to be in the "right" place, whatever that is. 

I am reluctant to hold cash through a BK Harley, I'm tilting more to holding bonds rather than gold. Bitcoin is out for me as I don't understand it.

[Democorruptcy]

57 minutes ago, Hardhat said:

I think it really depends what sectors you have in your portfolio - if someone was heavily invested in NASDAQ stocks, it would probably be a good idea to take some money off the table soon. 

But oil companies are likely to fare better in a crash, especially as they've been beaten down somewhat already. They don't have as far to fall. 

Personally I'll be reviewing my portfolio for anything that might be frothy / tech leaning, which might potentially get hammered in a BK, and decide whether to hold case by case.

If there is a BK, oil helps cause it. The economy could stand a 1.5% Treasury yield but the markets can't. Once we get to the annual anniversary of the negative oil price, inflation rises and pushes the Treasury yield up.

[Harley]

45 minutes ago, Loki said:

Those types aren't worth listening too, but then to paraphrase Zerohedge on a long enough timeline the probability of a BK rises to 1

There is a danger of throwing the baby out with the bathwater with all these types.  It doesn't have to be that way, just as how DH apparently advised the traders on the macro but let them make the executive calls.  And regardless, portfolios should be stress tested and bug out routes set up for all reasonable risks, according to probability.  I have no need to set timelines as I now rely on my warning signals and balanced allocation rules so can comfortably cherry pick such people's views to better effect.

[Harley]

Government bonds seem a mixed bag atm, maybe due partly to currency moves, changes in which (strengthened USD in a BK?) could change things.  Maybe USTs have further to fall but some very early signs on strength in VGOV?

PS:  To add, a main concern is buying bonds in an ETF that lends them on to the very people you don't want them to - banks, etc.

[Harley]

38 minutes ago, Talking Monkey said:

I remember in March seeing some of the daily action on tlt and being surprised that there were heavy down days where it fell hard alongside the indices, but this did correct back very quickly so that across the March sell-off it did in fact overall do its hedging part.

What are peoples thoughts on rotating. On HL I am yet to do any rotation, though I will I think get round to it in the coming weeks

Not surprising really for these and gold, etc as people sell to cover margin calls at a time of maximum leverage.  The trick is to look a few days/weeks out to see how they performed.  Can be very educational.  Plenty of pasts to study!

[Harley]

29 minutes ago, Talking Monkey said:

I am reluctant to hold cash through a BK Harley, I'm tilting more to holding bonds rather than gold. Bitcoin is out for me as I don't understand it.

I increasingly hold my cash in short term government bonds, alas via ETFs but at least many.

[dgul]

5 hours ago, Mapper said:

Harr Dent has a ticket on the BK Express. It arrives in April apparently. All aboard!

 

I suppose he might be right.

It is a decent call for him -- he gets a bit of coverage (= people buying his books), with a small chance that'll emerge as the guy who saw it coming, and make millions more over the next couple of years.  (Note that it doesn't need to be April -- he'll milk it if it's March-May).

If he's wrong then it probably doesn't hit him that much (he'll probably continue to have some fans that bankroll him).

Quite a good risk/reward I'd say.  (for him).