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

[Castlevania]

With regards to K&S it appears BaFin didn’t like the write down they took at the back end of last year and the jist is that they should have taken it earlier. The issue with impairments is that they rely highly on judgement. Unless they’re completely crooked and there are other skeletons hiding in the books (possible but highly unlikely) it doesn’t strike me as anything to be overly worried about.

[JMD]

21 hours ago, harp said:

Yep. Had 3 valuations, all slightly lower than his offer. So on the face of it it looks good. We have both said we’ll skip searches to get in before the 31st March. My only concern is accepting 100k cash. Not even sure that’s legal? Market valuation for my would still be fine, so who would know? 

Sorry Harp - I guess everyone's definition of 'cash' is different. What I mean is i had assumed (incorrectly?) that the cash payment was in form of bank transfer (from buyers own cash savings) and also would be visible to your conveyancing solicitor. I'm no legal expert, but I think large cash payments are still legal so long as the buyers solicitor has ascertained where the cash came from, which is just a case of using a simple form (or used to be), and your own solicitor would have asked for a copy of this information.                                                          However, if we are talking about a guy who has 100k lying around the house, then might need a rethink.                                                                                                                                                                                          What does the guy do for a living? He doesn't happen to be an 'asbestos engineer' does he?!? (absolutely no offence intended to other dosboders past or present!!!)

[nirvana]

11 minutes ago, sancho panza said:

Price of Brent jsut not giving up.COuld it be on the verge of an exponential move?

probably will just to piss me off  to be fair its been going exponential all month....yeah I know it's a short month 

so I'm betting on some profit taking here...... 

[Loki]

10 minutes ago, Castlevania said:

With regards to K&S it appears BaFin didn’t like the write down they took at the back end of last year and the jist is that they should have taken it earlier. The issue with impairments is that they rely highly on judgement. Unless they’re completely crooked and there are other skeletons hiding in the books (possible but highly unlikely) it doesn’t strike me as anything to be overly worried about.

That's good to know, thanks. Where are you finding this info? Nothing on HL or MarketWatch and that's all i could find while on my phone and not able to browse quickly

[Castlevania]

9 minutes ago, Loki said:

That's good to know, thanks. Where are you finding this info? Nothing on HL or MarketWatch and that's all i could find while on my phone and not able to browse quickly

My interpretation of the Reuters article that was linked on the previous page

[Barnsey]

Inflation is coming, but perhaps not quite yet on a sustainable footing...

[harp]

35 minutes ago, JMD said:

Sorry Harp - I guess everyone's definition of 'cash' is different. What I mean is i had assumed (incorrectly?) that the cash payment was in form of bank transfer (from buyers own cash savings) and also would be visible to your conveyancing solicitor. I'm no legal expert, but I think large cash payments are still legal so long as the buyers solicitor has ascertained where the cash came from, which is just a case of using a simple form (or used to be), and your own solicitor would have asked for a copy of this information.                                                          However, if we are talking about a guy who has 100k lying around the house, then might need a rethink.                                                                                                                                                                                          What does the guy do for a living? He doesn't happen to be an 'asbestos engineer' does he?!? (absolutely no offence intended to other dosboders past or present!!!)

Things might have changed. What doesn’t bode well is that having a walk with my lad this morning thought we’d go down his road to get a feel. From the end of the road we could see two police vans. As we got closer we saw they were outside his house and a cop was searching his car, front door open with more cops inside. Not looking good. But yes, it was meant to be £100k off the books. I’ll see what happens in the next few days before pulling the plug or insisting it comes legit through solicitors. 

[AWW]

29 minutes ago, harp said:

As we got closer we saw they were outside his house and a cop was searching his car, front door open with more cops inside.

Probably having a mate round for a beer.

[leonardratso]

31 minutes ago, harp said:

Things might have changed. What doesn’t bode well is that having a walk with my lad this morning thought we’d go down his road to get a feel. From the end of the road we could see two police vans. As we got closer we saw they were outside his house and a cop was searching his car, front door open with more cops inside. Not looking good. But yes, it was meant to be £100k off the books. I’ll see what happens in the next few days before pulling the plug or insisting it comes legit through solicitors. 

quite, dont want to move into a drug dealers ex house, a lot of his rivals and clients wont have got the message and will still turn up to 'do im in' or 'buy some shit'.

Youll become collateral damage.

Either that or someones grassed that hes got 100K sat around in the house, eh eh.

Like Aww says, its probably just some hurty words on twitter, or more than 2 maskless people congregating in an anti covid manner.

[JMD]

2 hours ago, DurhamBorn said:

I sold all my BHP as commods are running far too hot and 130% was a cracking profit.I think the market has been buying the big miners rather than energy as the inflation play.The other area of course to rocket, potash, where it must be shrewd money as its not been public or talked about much.K+S looks like a none cash matter and are still up 80%.

Repsol had good results today and still look like a coiled spring,i expect them to double again from here for starters.

I think the bullish buying has been from small players,the big funds have been sellers for woke reasons and it could of been a lot of shares.I think its likely that is over now,or very close.

My main problem with the companies is they should be doing buybacks now,not in a year or so.Its not the stage in the cycle to pay down debt,they should be buying up shares.However to be fair i think a lot of it is they are having to use capital to position options into renewables.

 

 

 

DB, do you think the commodity sector in general is due a pullback? I ask because you said sometime back that we might see rotation between sectors instead of a dramatic type BK event. Or is it more likely that if a pullback occurs its probably due to the commodities having run too fast, too early?

[Jesus Wept]

38 minutes ago, harp said:

Things might have changed. What doesn’t bode well is that having a walk with my lad this morning thought we’d go down his road to get a feel. From the end of the road we could see two police vans. As we got closer we saw they were outside his house and a cop was searching his car, front door open with more cops inside. Not looking good. But yes, it was meant to be £100k off the books. I’ll see what happens in the next few days before pulling the plug or insisting it comes legit through solicitors. 

Maybe he had not been wearing a mask? Possible he had gone to a local beauty spot further than 5km from his house? 

[JMD]

17 hours ago, Cattle Prod said:

Are we back to pizzas?!

...pizzas or maybe the topic of dumpster-diving!!! Thats how I initially tried to rationalize Hunty's reply to me, though upon further reflection i thinks Hunty's reply was meant as pure trash-talk?!? Never mind I shan't take it personally ...my own silly fault perhaps for asking the stupid question in the first place?

[Yadda yadda yadda]

7 minutes ago, Vendetta said:

Maybe he had not been wearing a mask? Possible he had gone to a local beauty spot further than 5km from his house? 

Not with two police vans. Coppers have probably bunged £100k into evidence bags.

[Yadda yadda yadda]

A lot of money has gone into the market from day traders and other retail in the last year. People sitting at home are trading the markets from their phones whilst doing the day. In the US this has been boosted by 'stimmy checks'.  Quite a few are trading in options and are leveraged. At some point a lot of this cash will be taken away. Those with unhedged short dated options will permanently lose.

If only I knew when this would be. Could be today or tomorrow. Would expect the next stimulus money to get pumped in first though.

[Calcutta]

1 hour ago, harp said:

Things might have changed. What doesn’t bode well is that having a walk with my lad this morning thought we’d go down his road to get a feel. From the end of the road we could see two police vans. As we got closer we saw they were outside his house and a cop was searching his car, front door open with more cops inside. Not looking good. But yes, it was meant to be £100k off the books. I’ll see what happens in the next few days before pulling the plug or insisting it comes legit through solicitors. 

You need to get the fuck away from that situation believe me. Trying to clean 100k in one lump by giving it to someone for a house is a schmuck play. Criminals are alright if they're smart, if they're that thick then you need to get to fuck. 

[Dogtania]

6 hours ago, Option5 said:

That's because the main purpose of personal cars for many people isn't transport, it's for showing off. Status symbol.

Unless of course someone offers a "high class" car service with cars that are suitable for posting on Instagram.

And the reason for that is in big part is the advertising industry, who have been masterful in shaping peoples perception in what to think and why getting a car is needed to make them superior and feel better about things.  

If we're entering a different phase, not so consumer led (even anti consumer in the extreme who knows). I wonder how long it will take to get rid of that notion.  Don't get me wrong it's probably a basic human trait to try to outshine your neighbours etc, but it's been fine tuned by industry to get you to buy the new BMW -that you need- over say an old one.  Maybe status will be falunted in more subtle ways.  I thought already the gilded party like never before except behind high fences and hedges unlike a few years ago (I know there not the target advertising audience).

Go short on private regies!

[Option5]

45 minutes ago, Yadda yadda yadda said:

Not with two police vans. Coppers have probably bunged £100k into evidence bags.

Even more than £100k if he's a counterfeiter 

[Option5]

Slightly off topic but the largest construction company in Dubai (Arabtec) who built the silly tallest building etc went bust late last year.

I've seen very little coverage of it on the media obsessed with Dubai.

Sign of things to come?

[Harley]

I only go into K&S because of this thread.  It failed my screen.  So much for you lot!  But trust me to pick one of the rare (potentially) duff ones.  I guess you either go big into the whole thread portfolio or go home!  Don't know what the hit is but know it's going to be a small percentage of the portfolio, that's what you do dontaknow!

[Dogtania]

3 hours ago, Loki said:

Still holding. I don't know what to do. Still in blue for now

I've not checked but I'm sure it's probably in the red for me.  Just again hits home the need to diversify, well spray n pray probably more apt for me.

Like I'm sure many I lament my poor timing and bad coin tosses (picking k&s over mosiac for example looked bad from day one, same as new gold buying double that of sibanye etc etc etc😭😅)

Agree that these apparant dodgy books don't usually bode well but I'll probably hold for now all the same🤔

[Loki]

(Sharecast News) - Precious metals miner Hochschild Mining reported a drop in full-year earnings on Thursday as Covid-related stoppages dented production and offset higher gold and silver prices.

In the year to the end of December 2020, adjusted earnings before interest, tax, depreciation and amortisation fell to $270.9m from $343.3m in 2019, with revenue down to $621.8m from $755.7m. Pre-tax profit declined to $62.9m from $76.8m, even as the company saw a 28% rise in the average realised gold price achieved and a 35% jump in the silver price.

Hochschild said the year was impacted by events beyond its control and it was forced to shut all three of its operations in mid-March as both its host countries took steps to contain the spread of the coronavirus.

Despite a relatively quick restart in May, both the Inmaculada and San Jose mines experienced additional Covid-related stoppages, although Pallancata in Peru operated without interruption for the remainder of the year.

"Nevertheless, we were able to reconfigure our mine plans and I was pleased to see us meeting our revised annual production and costs targets," it said.

"We entered the crisis with a strong balance sheet which enabled us to finance the additional Covid-related expenses required by the business. In addition, with precious metal prices rising significantly, our business was able to generate strong free cashflow despite the ongoing disruption."

Hochschild also said the pandemic has resulted in substantial delays in permitting for exploration and operations for this year and beyond but that it is working hard to overcome the delays.

[DurhamBorn]

2 hours ago, nirvana said:

k.....I has been doing some Cable analysis cos methinks it's getting overvalued again 

i am happy to buy a Silver ETF denominated in USD when I can get 1.39 to the shitty quid 

Capital Economics reckons the £ might go to 1.45 vs $....also they 'forecast oil prices back up to $70/barrel by the end of the year'

Apparently the £ strength is to do with a faster rollout of Covid vaccines than the rest of clown world.....

Sooo I'm getting my cable shorts warmed up too ......actually looking at the charts 1.43 might be a ceiling but I think 1.40 is a psychological barrier 

Disclaimer: all economists are lying bastards in my world and I haven't got a clue who Capital Economics are 

Cable target on this thread was $1.41 way back when everyone said toast.Nothing to do with vaccines,all liquidity.UK has seen balance of payments deficit fall by a huge amount during lockdown relative to GDP,its something i track on my £ v $ roadmap and so less £s being exchanged for other Fiat,or more the point less £ being used to buy energy and commods.

See here

https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/timeseries/d28l/pnbp

Notice last time this happened was when it jumped from 1974 to 81 during the inflation,and then from 81 after it spiked to 2.9 sterling went on to fall and hit an all time low of $1.05.That was more dollar strength of course.

More cross market involved,but big risk sterling sees 30% falls by mid cycle and that will see inflation roar even more.

 

 

[reformed nice guy]

I have some family in America and I was looking at what is happening in Texas. I think that has been a week now and the situation is still dire in some areas. The weather looks poor for the next while as well.

Could something like this be a big spanner in the works?

They have been printing like crazy to keep the plates spinning from a man made situation (everyone being forced to down tools for covid) and now we have a natural disaster.

Will it mean that money will be diverted away from planned improvements to help with the recovery or will they just print more? Will it speed up inflation due to unforseen demands to help repairs? What about banks/finance with unpaid loans from flooded businesses going bust, increased insurance claims.

1 hour ago, Yadda yadda yadda said:

A lot of money has gone into the market from day traders and other retail in the last year. People sitting at home are trading the markets from their phones whilst doing the day. In the US this has been boosted by 'stimmy checks'.  Quite a few are trading in options and are leveraged. At some point a lot of this cash will be taken away. Those with unhedged short dated options will permanently lose.

If only I knew when this would be. Could be today or tomorrow. Would expect the next stimulus money to get pumped in first though.

Will more of the stimmy checks be used to repair burst pipes rather than buy Tesla?

[Harley]

Now I know I post often saying it could go either way but so it is for the oillies.  Big picture montly charts say massive room to go up.  The daily charts show most are overbought but history for the likes of RDSB say they can stay this way for quite some time, sometimes just treading water but other times seeing large gains.  Price (candles) have hit prior support levels so need to break through this resistance.  To (recent) date, every successive overbought situation has led to a higher high except the current one (if it has indeed uncharacteristically completed).  Today's candle for RDSB suggests market indicision.  A pullback, as is happening, seems quite reasonable.  A more sustained, material, pullback is possible but things certainly are interesting.  A great time to be timing further entries since the lows.  I'm maybe fully allocated to RDSB (need to reconsider) but am eyeing up other plays to extend into Europe, Asia and Russia.  The latter two are moving but could be signalling the tail end of the run up, or a more broader move.   REP does seem to be moving but the very big picture is lower lows, although plenty of upside each time to be worth it.

PS:  Maybe simliar in some of our other beloved sectors, I need to check, but right now I have logging and 142 trade signals from Japan to work through - Nochihodo!

 

[Harley]

31 minutes ago, Loki said:

(Sharecast News) - Precious metals miner Hochschild Mining reported a drop in full-year earnings on Thursday as Covid-related stoppages dented production and offset higher gold and silver prices.

In the year to the end of December 2020, adjusted earnings before interest, tax, depreciation and amortisation fell to $270.9m from $343.3m in 2019, with revenue down to $621.8m from $755.7m. Pre-tax profit declined to $62.9m from $76.8m, even as the company saw a 28% rise in the average realised gold price achieved and a 35% jump in the silver price.

Hochschild said the year was impacted by events beyond its control and it was forced to shut all three of its operations in mid-March as both its host countries took steps to contain the spread of the coronavirus.

Despite a relatively quick restart in May, both the Inmaculada and San Jose mines experienced additional Covid-related stoppages, although Pallancata in Peru operated without interruption for the remainder of the year.

"Nevertheless, we were able to reconfigure our mine plans and I was pleased to see us meeting our revised annual production and costs targets," it said.

"We entered the crisis with a strong balance sheet which enabled us to finance the additional Covid-related expenses required by the business. In addition, with precious metal prices rising significantly, our business was able to generate strong free cashflow despite the ongoing disruption."

Hochschild also said the pandemic has resulted in substantial delays in permitting for exploration and operations for this year and beyond but that it is working hard to overcome the delays.

HOC has not been a great trade but should hopefully make a great investment!