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

[Harley]

Interesting podcast along David Hunter lines from more of a trader pov: 

https://m.soundcloud.com/milesfranklinco/how-far-will-stocks-crash-michael-pento

Agree with most of what he says, apart from what he says about Indian funerals! 

Portfolio manager Michael Pento says a stock crash is coming this year. How low will the market fall? Michael expects 30% at least, but says it could fall much more. 

Quite a few commentators also mentioning the risk of a FED, etc mistake as DH has mentioned in the past.

[desertorchid]

error

[JMD]

First, we got lab grown meat (being trialed in Singapore), now we might potentially get lab grown wood. Must happen(?) - after all, if meat can be artificially grown, wood products will follow in a few short years i think. 

The so called carbon economy, and environ-'mental' politics won't save the earth - it will be tech like Carbon-Capture, artificial trees, etc, that will do all the heavy lifting.  

(hmm... I may have to sell my timber shares in a few years time!!)

Nature Makes Wood. Could a Lab Make It Better? | WIRED

 

[Optimistic]

3 hours ago, Noallegiance said:

You, sir, are quite the individual.

Emotional reading that.

I read these posts everyday, unable to contribute and just looking for a way to protect a few pounds!  But this is what makes this a great place

Now I can contribute!  You are all a load of softies at heart, makes me warm and tingly.  

[CVG]

11 minutes ago, Optimistic said:

I read these posts everyday, unable to contribute and just looking for a way to protect a few pounds!  But this is what makes this a great place

Now I can contribute!  You are all a load of softies at heart, makes me warm and tingly.  

You haven't strayed upstairs yet?

[sancho panza]

19 hours ago, planit said:

I don't know why you think $80+ guarantees another crash but it might fit in with my current predictions. I see the BK being pushed back now. If we see $80+ oil it will be part of a gigantic everything blow-off top. This is likely to take more than 6 months to play out as it would be backed by Covid retreating and constant positive economic data.

This would then fit in with DB's prediction of tightening leading to the BK and the oil crash CP predicts. I don't see how this could all play out in less than 6 months, for one thing the central banks have said they will ignore inflation as long as possible.

I don't know why you think $80+ guarantees another crash but it might fit in with my current predictions. I see the BK being pushed back now. If we see $80+ oil it will be part of a gigantic everything blow-off top. This is likely to take more than 6 months to play out as it would be backed by Covid retreating and constant positive economic data.

 

This would then fit in with DB's prediction of tightening leading to the BK and the oil crash CP predicts. I don't see how this could all play out in less than 6 months, for one thing the central banks have said they will ignore inflation as long as possible.

[Talking Monkey]

3 hours ago, Harley said:

Last month?  Was that gold or silver Britannias?  And you could still get them!  I would like some silver ones but the premiums are crazy, although those in the trade say not to worry in the long term.  Maybe I'll get gold ones instead but a bit pricey for one (that'll be a big shop!) and the smaller denominations get expensive too in total.

I had a look a couple of weeks back and concluded that with the crazy premiums the gold ones looked less silly. Was looking at the 1/4 ounces. 

[sancho panza]

 

19 hours ago, planit said:

Addressing another of your posts, this discussion and research has made me believe that the supply shortage (which is probably a year out) is more likely to happen after some kind of crash.
 

It's just the chances of the economy running sensibly for a whole year seem very slim so there will be a boom-bust or just some kind of bust if Covid makes the economy tank.

I am hoping for the BP release next week to spur a re-rate for BP and drag RDS up with it. I need to exit half of my position before a major dip (I will be patient) as I don't want to hold my entire position for the next 3 years whilst BP hits 200p again.

I'm not too focused ont eh supply shortage issue.That's the reaosn for our long term investmentin the oilies.

The supply crunch looks baked in,whetehr it happens before or after the BK is irrelevant to me.key thing in the next few months is whetehr we get that blow off signal from the oil price(probably more improtantly the dollar as the oil price runs as a function of that to a large degree ) that we're done for the melt up.

We're staying long oil for that reason here as I'm not sure were done yet.

The last picture paints a 1000 words

oilprice.com ran the following headline yesteraday

Oil Down 2% on Talk of Imminent Deal for Iran to Export Crude Again  but reading that excellent oxrfored report you've psoted goes to show why @Cattle Prod has a dim view of their offerings.

https://www.oxfordenergy.org/wpcms/wp-content/uploads/2021/04/OIES-Oil-Monthly-Issue-3.pdf

 

other bits of note(some you've referred to already

 

 

18 hours ago, DurhamBorn said:

You will get shares.Its so you can make lots of money selling coal,but Anglo can pretend they are all woke.I expect in a decade or two the big oilies might do similar.

I'll be chaecking that stock out.Very few decent coal plays out there.

 

 

[Bobthebuilder]

10 hours ago, DurhamBorn said:

I took a payoff because i had cancer and wanted the moneyinstead of nothing in case i died for my kids.I told my dad i heard a Thrush singing when i was in hospital and i hadnt heard one for years.He said this to me "youve heard a thrush many a day,you just stopped listening you silly cunt and its about time you started listening again"

Wonderful post DB, must admit to shedding a tear this morning reading all this.

Your comment above reminds me of the very reason why I am here, but it was my Dad in the hospital bed dying of cancer. He had full on dementia and was not talking a lot of sense most of the time. The evening he died we had a bit of a joke and a laugh, he became quite aware then said to me, "is everything sorted?". What do you mean? I replied. He got a bit angry and repeated "is everything sorted", I said yes, and he was happy.

That was 2018, I received the inheritance and have since been trying to get it sorted best I can, knowing he is checking up on me from time to time.

I don't want to get rich, quite happy as I am. I'm 52 this year and grateful for any more years ahead.

Its like @Harleysays, there's more to this than value of stocks etc, important to have all those other little investments sorted x, y, z etc.

Keep on posting please people, you have all really helped these last couple of years, its incredible really how all this hive mind stuff helps you think.

I wish I could add more useful comment and feel a bit useless at times. But I think my time may come to be of a more useful poster, who knows what's gonna happen.

Take care all, best wishes, and all that.

[Bricormortis]

2 hours ago, Loki said:

Same thing happened to a mate of mine. I told him to put it down to luck and not to count on it happening again

Maybe coininvest are seeing how many "aministrative errors" they can get under the radar.

[wherebee]

I think this thread is one of the best examples of what the internet could be at it's best - contributions from a wide, wide range of people which collectively are more valuable than gold dust.

I've been increasingly thinking that two sentiment indicators for me which I find useful are GDXJ and INFL.  GDXJ shows the fear in the market and belief in gold, and INFL the inflation wave belief.  When I see INFL start a steady downwards turn, I will know something has changed.  When GDXJ breaks above 60, I'll know the shit is hitting the fan somewhere.

 

[CVG]

On your marks. Get set. Go!

https://www.theargus.co.uk/news/19251609.co-op-begin-trial-selling-date-food-20p/

[AWW]

On 21/04/2021 at 08:57, Fully Detached said:

I seem to be largely alone in my opinion but I think this WFH thing is temporary, and the push to return to the office won't necessarily come from employers but from employees themselves. I've been long term WFH and it takes a certain personality type - I'm about as well suited to it as anyone I've ever met and even I find it hard at times.

But here's what convinces me. The corporate world is full of little bastards who would rape their grandmother for a job title, let alone a pay rise. I look at how my own contacts shamelessly promote themselves on LinkedIn, and how cutthroat many of them are with any interaction unless there's something in it for them. I swear many of them would tear their own colleagues throats out for a little bit of kudos within the business. These are the ones who will return to the office to crawl up the bosses arse (whether the boss is there or not), and at that point, everybody else is going to feel the pressure to do the same. If you're not seen you're going to get forgotten, and worse, you're going to get fucked by the type I describe above.

I'm seeing this play out in a very small way with a friend. One of his colleagues has continued to provide services and projects for their employer throughout the lockdown while all the others sat on furlough, and surprise surprise, now has some mickey mouse new job title which means nothing, but has riled the hell out of everybody else. Everybody else now complaining that they weren't given the chance to do anything over lock down 

Put those people now in an environment where they are worried about paying their mortgage and other debts. I don't see them quietly sitting at home hoping for the best.

Granted, it still needs employers to provide office space and see the value in it, but I reckon that will come soon enough too.

I agree, but think that a couple of days a week in the office will satisfy the scenario you outline. It does for me, anyway, and I don't exactly love WFH. Going in twice a week then makes moving out for more space and a nicer environment for the kids much more of a viable prospect, given the reduced need to commute.

For example, I cycle to work. Up to now, that's meant being within 10-15 miles of the office. If I only have to do it twice a week, that goes up to 25-30 miles.

[sancho panza]

sorry @planit for some reason my previous post lost my commentray

I was trying to answer your question @Cattle Prod about why $80 oil begets recession/BK

See bleow chart comparing oil/CPI al tiems/CPI less food and fuel/GDP growth all %age yoy change.CPI less food and fuel is to demosntrate how much more volitile things are without it in.(fuel a decent size variable cost of food produtcion)

The last three all times by 15 to demontsrate my point.I was tryuing to answer you on the why $80++ oil gives a BK.

1990-rise in oil price exacerbated already falling GDP grwoth and corealtion with spike in CPI

2000-I have my doubts about the GDP data around this recession but point remainsthe spike in oil preceeded drop in GDP grwoth and rise in CPI

2008-correlations here as quite tightoil rises,CPI rises and yet CPI less F+F remains flat.then GDP growth CPI/oil all bottom together.

2021-CPI yet to spike but it's started.Bigger recession lies behind the looming peak.

[DoINeedOne]

Talking about the INTL ETF, Still only few changes percentage wise thought i would add a image to show nothing major just increase in cash mostly

column 1 percentages when i started tracking it for changes a few weeks back

column 2 current percentages as of today

column 3 the difference between columns 1 and 2 

 

[Harley]

2 hours ago, CVG said:

You haven't strayed upstairs yet?

I did something very stupid and deleted it! 

[Chewing Grass]

4 minutes ago, AWW said:

I agree, but think that a couple of days a week in the office will satisfy the scenario you outline. It does for me, anyway, and I don't exactly love WFH. Going in twice a week then makes moving out for more space and a nicer environment for the kids much more of a viable prospect, given the reduced need to commute.

For example, I cycle to work. Up to now, that's meant being within 10-15 miles of the office. If I only have to do it twice a week, that goes up to 25-30 miles.

Just been in a meeting at work and the feedback the management got went something like this.

1) We have met all deadlines to the agreed quality and in most cases exceeded them WFH.

2) You only have half the desks you used to have now because you surrendered the lease on a building.

3) If you think I'm going to sit for 8 hours (or choose another number) in a car burning fuel every week, think again.

4) You have not upped wages for 4 years, see 3) above.

The mileage some of the skilled workers do is high and would cost something like £750 per month after tax (PAYE) just to sit at a desk and be watched. Before tax it would be knocking on £20K per year of effort to cover of wasted time for the individual so attitudes to commuting are becoming more financialised.

Why not ditch the job, take a cut (or not) and sack off the unpaid commute.

[Hancock]

35 minutes ago, Chewing Grass said:

Just been in a meeting at work and the feedback the management got went something like this.

1) We have met all deadlines to the agreed quality and in most cases exceeded them WFH.

2) You only have half the desks you used to have now because you surrendered the lease on a building.

3) If you think I'm going to sit for 8 hours (or choose another number) in a car burning fuel every week, think again.

4) You have not upped wages for 4 years, see 3) above.

The mileage some of the skilled workers do is high and would cost something like £750 per month after tax (PAYE) just to sit at a desk and be watched. Before tax it would be knocking on £20K per year of effort to cover of wasted time for the individual so attitudes to commuting are becoming more financialised.

Why not ditch the job, take a cut (or not) and sack off the unpaid commute.

That is the workers playing their hand ... but the companies card up their sleeve will be getting rid of those who they had to watch for 8 hours, and any staff whose work can be offshored.

Whilst it may not apply directly to your company, it will to many others.

After seeing how lazy and incompetent people who WFH have been in the last year, i'd prefer to deal with an Indian who fears getting the sack for being incompetent, as opposed to a Brit who believes no matter how useless they are, that they've a job for life.

(this is an extract of what i emailed a bureaucrat in the police yesterday, i need a simple yes or no answer but its gone on for almost 4 months), "I am tired of talking to your colleague who no matter what day i call will say you are away until Monday, and then when i call on Monday you do not answer".

[Chewing Grass]

1 minute ago, Hancock said:

After seeing how lazy and incompetent people who WFH have been in the last year, i'd prefer to deal with an Indian who fears getting the sack for being incompetent, as opposed to a Brit who believes no matter how useless they are, that they've a job for life.

We have Indian IT, they don't fear anything and solve very little, anything complex goes to Australia, Poland or the UK.

The management presumably use them as a cheap filter just like NHS Direct.

[Hancock]

7 minutes ago, Chewing Grass said:

We have Indian IT, they don't fear anything and solve very little

They sound like prime candidates for the British Police force.

But surely they can export the jobs to Poland, Romania etc.. pay them local wages, as opposed to importing them to the UK and it costing them several time more.

[feed]

I have some Indian IT. They’re great, compared to the half wits I get here.  The last agency I had here, was breathtakingly incompetent.  He ended up leaving and going to work on track and trace. 

[Hancock]

28 minutes ago, feed said:

I have some Indian IT. They’re great, compared to the half wits I get here.  The last agency I had here, was breathtakingly incompetent.  He ended up leaving and going to work on track and trace. 

My experience of working with Jinglys is there are many that are as competent if not more than us Brits, but thrown in with them is a large quantity who have bought their qualification certificates at Mumbai market.

But at least they'll turn up, which is more than can be said for those WFH in Britain.

[DurhamBorn]

I think a lot of the reason oil running high tends to lead into a downturn is because of where it happens in a cycle rather than the fact if pulls money from business/consumers,although that is part of it.Rising oil usually indicates an economy running hot and so its at that point that the CBs,Fed mainly start to tighten.So just as input costs are rising hard the CBs remove liquidity from the market.Oil moves at the margins,maybe even 1% margin and liquidity being removed easily crosses that line.At the moment heavy machinery companies are going bangbusters,there is huge demand landing on their order books and its obvious everyone is going for construction.We said long ago the west would launch its own One Belt one Road etc.

This time massive demand is coming just after production has been taken out,my basic roadmap shows oil going off the chart,but thats before cross market effects of course.I think the $75 area is certain on oil,but mid $80s could easily land then its a case of how far it falls back before its run up to over $200 a barrel.The longer term is likely to see oil around $55,maybe $50 but the industry will see lower costs.Its crucial they use the massive cash coming to buy back shares and built the right sort of renewable companies.Its highly likely they will slit themselves in two down the road as well,though gas use will be growing,so that might keep them together.

The oil shares performance has been a bit poor,and we could of made a lot more having that capital in other areas and then be buying now.However we still have decent profits,and the fact the companies can start buybacks at these levels is very bullish down the road.

[planit]

4 hours ago, JMD said:

First, we got lab grown meat (being trialed in Singapore), now we might potentially get lab grown wood. Must happen(?) - after all, if meat can be artificially grown, wood products will follow in a few short years i think. 

The so called carbon economy, and environ-'mental' politics won't save the earth - it will be tech like Carbon-Capture, artificial trees, etc, that will do all the heavy lifting.  

(hmm... I may have to sell my timber shares in a few years time!!)

Nature Makes Wood. Could a Lab Make It Better? | WIRED

 

Made me laugh, I just watched a video on artificial bacteria.  They have grown bacteria in a lab by chucking together 4 hundred genes.

It's the second story here (although the first story seems even cooler)

Scientists Create an Artificial Cell With Synthetic Genome

 

[planit]

3 hours ago, sancho panza said:

 

Thanks again @sancho panza.

I get that the spikes seem to correlate with recessions but between 2011-2014 oil prices averaged $95 which would translate to $117 at today's prices (using 3% inflation).  I can remember at the time commentators saying that oil prices had decoupled from the economy because we are now a technology and service economy. At the least there is less dependence on oil. 

2000 spike is far ahead and since the bust was dotcom probably not useful here. 

1990 the spike does coincide with the recession but it is a bit quick for it to have caused it.

2008 seems closer to our current situation. 

Overall perhaps the things that cause oil spikes also cause economic problems which I suppose is what you are alluding to. In that case it isn't really the level oil gets to, its whatever causes the price shock that counts.

 

I agree that if we suddenly see $80 soon there is something serious going on which will not be good and is likely to also result in a downturn.

But I also feel when people start to realise OPEC+ have maxed out, prices will inevitably go over $80 and this will not cause a recession. But not this year.