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


spunko

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Doesnt matter what the CBs or governments do short term,their paths are set now and nothing will change that.Thats why we are outperforming the markets.Im not bothered if im up or down each day,week,month.What matters is that we are outperforming the market because that shows the liquidity is flowing our way.

Here in the UK the government has now embraced the reflation roadmap.Freeze allowances and allow tax relief on capital investment.

The interesting bit is how much more QE.I expect CBs to concentrate on the short end,because they want people to see a right sized yield curve to encourage investment.

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At some point the lag in oil shares will be too much. The longer the gap stays put, the more money is in the bag pulling the price higher.

 

At some point there will be a rerating where the market capitulates and comes to terms with the fact oil is not $30 any more.

 

Think of the margins with all the cost cutting, - and current prices are comparable to 2018/2019 when Shell was £23

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Yadda yadda yadda
41 minutes ago, DurhamBorn said:

Doesnt matter what the CBs or governments do short term,their paths are set now and nothing will change that.Thats why we are outperforming the markets.Im not bothered if im up or down each day,week,month.What matters is that we are outperforming the market because that shows the liquidity is flowing our way.

Here in the UK the government has now embraced the reflation roadmap.Freeze allowances and allow tax relief on capital investment.

The interesting bit is how much more QE.I expect CBs to concentrate on the short end,because they want people to see a right sized yield curve to encourage investment.

Well the Fed chair just had an interview in which he did nothing. Sent yields up and shares down. Perpetual loosening appears to have been priced in. As this changes it will move more money in our direction. As will oil climbing nicely.

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3 hours ago, Bricormortis said:

Cornwall = high house prices, unemployment,  lowest wages in England, poor infrastructure,  wetter than you think, but nice people though ( mostly ), also if you like surfing its useful. 

Housing stock looked rubbish, too. Random new build estates in the middle of nowhere. Shocking roads. I can sort of understand the attraction but not for me. Scilly Isles are fantastic.

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Don Coglione
37 minutes ago, feed said:

so, oil then.

 

image.png.24e03c06d4ced7650f2980dd70a7d533.png

I piled into CRUD back in April; shame I had to sell 70% of my holding a fortnight ago to help pay for a house!

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3 hours ago, Hancock said:

Workers pay more tax, so the govt can give more money to asset owners. Irony being many of these higher earners will have been given their money back and some via HPI

More to it than his 2 tweets claim though.

In the end, they get it all. 

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31 minutes ago, planit said:

At some point the lag in oil shares will be too much. The longer the gap stays put, the more money is in the bag pulling the price higher.

 

At some point there will be a rerating where the market capitulates and comes to terms with the fact oil is not $30 any more.

 

Think of the margins with all the cost cutting, - and current prices are comparable to 2018/2019 when Shell was £23

Hopefully it goes parabolic just after we all top up our ISAs in April... ;)

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https://www.telegraph.co.uk/investing/bonds/investors-approaching-retirement-warned-18bn-bonds-time-bomb/

Another big theme of this thread for years and slowly some are waking up,but it will be years and years before this changes and most people wont have a clue.The ones in drawdown will be in a similar position,so 8% down in a year,2% fees and say 5% drawdown.Theres 15% gone in one year.

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20 minutes ago, Yadda yadda yadda said:

Well the Fed chair just had an interview in which he did nothing. Sent yields up and shares down. Perpetual loosening appears to have been priced in. As this changes it will move more money in our direction. As will oil climbing nicely.

That's a move on the 10 year. 

I don't get why they're letting it run.   

 

image.png.a43bd9529f976d1425139baca507be3f.png

 

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Just now, feed said:

That's a move on the 10 year. 

I don't get why they're letting it run.   

 

image.png.a43bd9529f976d1425139baca507be3f.png

 

They wont,they will engage at the short end around this level and keep the curve steady for now.

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33 minutes ago, feed said:

That's a move on the 10 year. 

I don't get why they're letting it run.   

 

image.png.a43bd9529f976d1425139baca507be3f.png

 

Just listened to this, I think Powell screwed up.

He has asked to be tested by the markets by saying he will ignore everything for months until there is concrete evidence in the economy over a sustained period.

Bond market might well call his bluff to let him know who is in charge. If this happens there will be a sell off on Nasdaq and then Fed will be forced to act and that will be the stage for the final blow-off*

 

* Yes - I have looked into my crystal ball.

Edit: All he needed to do was say he was "Remaining Vigilant" **Copyright Mervin

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18 minutes ago, feed said:

That's a move on the 10 year. 

I don't get why they're letting it run.   

 

image.png.a43bd9529f976d1425139baca507be3f.png

 

DXY has spiked higher too, 91.52 at the moment.

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Has anyone else had trouble buying Yamana recently? I'm on HL, and have a small amount already, bought last year, and wanted to top up by a similar amount now. However, for the last two days, I just get a pop-up message saying they can't get a live quote. Other goldies are not a problem.

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Yadda yadda yadda
2 minutes ago, BurntBread said:

Has anyone else had trouble buying Yamana recently? I'm on HL, and have a small amount already, bought last year, and wanted to top up by a similar amount now. However, for the last two days, I just get a pop-up message saying they can't get a live quote. Other goldies are not a problem.

Bought some yesterday through T212. HL are usually better than T212.

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37 minutes ago, DurhamBorn said:

https://www.telegraph.co.uk/investing/bonds/investors-approaching-retirement-warned-18bn-bonds-time-bomb/

Another big theme of this thread for years and slowly some are waking up,but it will be years and years before this changes and most people wont have a clue.The ones in drawdown will be in a similar position,so 8% down in a year,2% fees and say 5% drawdown.Theres 15% gone in one year.

Seems as if the spending spree that went insane under Nulabour has almost finished with the 2020/21 Tory handout extravaganza, with reality on the way. 

I for one do hope so.

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Castlevania
9 minutes ago, BurntBread said:

Has anyone else had trouble buying Yamana recently? I'm on HL, and have a small amount already, bought last year, and wanted to top up by a similar amount now. However, for the last two days, I just get a pop-up message saying they can't get a live quote. Other goldies are not a problem.

For less liquid shares this is pretty common with HL. Set a fill or kill order.

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Castlevania
19 minutes ago, PrincessDrac said:

Gold into the 16's.

Silver into the 25's.

My fault. Bought my Fres and Cey shares today.

Wondering whether they are allowing yields to rise. Pop the tech and crypto bubble. Money should flow in to the more unfashionable stocks like energy and pms. More into pms.:D

Strangely PM miners have barely dropped. Potash miners on the other hand...

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Castlevania
Just now, Cattle Prod said:

Yea, same. Bought Anglogold instead thanks to the SCS, but would have rather diversified away from South Africa. Re  liquidity, it thought Yamana was UK listed now?

It is, but volumes aren’t that high. HL don’t have direct market access (and their IT isn’t the best) so there are times they can’t get you a quote. As I mentioned up thread set a Fill or Kill order. Whenever I’ve had to do one, they’ve entered the trade within 20 minutes and at the market price.

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14 minutes ago, Castlevania said:

It is, but volumes aren’t that high. HL don’t have direct market access (and their IT isn’t the best) so there are times they can’t get you a quote. As I mentioned up thread set a Fill or Kill order. Whenever I’ve had to do one, they’ve entered the trade within 20 minutes and at the market price.

Awesome, thank you! It was filled within 20 minutes. I've never done that before; I guess I assumed it was a kind of fast-food/contract-killing service for their more disreputable clients, and wanted to be sure I had a good target first. It turns out to be just about shares, though.

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Bricks & Mortar
26 minutes ago, Castlevania said:

Strangely PM miners have barely dropped. Potash miners on the other hand...

Oh good!  I was wondering if HL was broken.  My portfolio of 15 silver miners/explorers has been sat on the same exact value for last few hours.

Is this the point that paper hands have been cleared out, and all that's left are diamond hands?

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Green Devil
32 minutes ago, Castlevania said:

Strangely PM miners have barely dropped. Potash miners on the other hand...

AG (first maj) has crashed 5.5%  to 15$

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DurhamBorn.  I'm always intrigued about these predictions for how the Fed will react.  They seem very successful!  Could you elaborate on what your thought process is on why fed will target particular parts of the curve and what knock on impact that has on the economy/investments/us. E.g. why 10yr not 2yr,  why taper etc.  

Also, if there is any reading material you would recommend in order to help us get to grips with this and macro economjc cycles in general that would be fantastic!

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