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


spunko

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1 hour ago, Rave said:

I must admit that I hadn't read it until just now. What it actually says, in the first few paragraphs (under "Method"), is this:

 

 

The direct link to the study is here in case anyone else wants to check for themselves:

https://www.thelancet.com/journals/eclinm/article/PIIS2589-5370(21)00324-2/fulltext

Did the fact that the graph in the initial couple of tweets references people who were hospitalised not give you a clue that the data was unlikely to just be from January and February, given that, AFAIK, nobody was hospitalised in the UK with covid at that point?

A bit further down, you can see that 81,000 people completed the questionaire after May 2020, when it was extended to inquire about their covid status.

I'm not going to go so far as to accuse you of deliberately spreading misinformation here but come on, it took me less than 10 minutes to skim the first few paragraphs and extract this pertinent information. It appears that four other people liked your post without bothering to check for themselves either.

 

 

So that's why you quoted a post that I had written to someone else and directly replied to me then, yeah?

I don't want to start deleting posts... Please post covid related posts in the correct forum (I quoted your post but there are also others).

Cheers...

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leonardratso

cant see the point in arguing the toss, some people believe one thing, others believe another, so what, everyone can be tolerant of others views, even if they strongly disagree, surely thats all it is a difference of opinion? I dont argue with my deeply religious neighbour, and he doesnt push it on me, so its all fair.

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I had a look through Telefonica Brasil and Germany results tonight and it seems their costs are going up at less than inflation but their prices are going up with inflation.That is exactly what i want to see at this start of the cycle.Free cash should start to increase for most telcos from the 2nd half of this year if that carries on.We might see some up investment though slightly,so we might not see the depreciation cash boost feeding through until another year or so,but the gains building underneath should still turn to cash as long as inflation stays above 2%.

Iv also been looking at the inflation feedback loops from renewables and i dont think the market or government understand the scale of them building.I think copper is certain to double if they stick to the climate goals.Thats before they increase carbon tax/credits.If they do it will be higher,and copper doubling will push up the costs of renewables and EVs etc by a large margin.Iv been doing a rough cross market with oil and gas on this and think $200 oil is almost certain,gas should treble from here,though might need another 18 months consolidating then a big run higher.

The interesting thing is that most of the oil and gas bears think EVs collapsing in price will speed up the transition,my take is the opposite,costs of renewables and EVs is going to increase with a lag and will go up in tandem with fossil fuels.

 

 

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6 hours ago, sleepwello'nights said:

Anyway back on thread, where are we with the road map. Gold and Silver are dropping in price and thankfully my index linked Gilts are now at their highest levels, well they were yesterday. Even higher than when I sold some. 

Yes need our own Nostradamus Mr DB, to let me know the exact date and time of the BK ... cant but help feel a interest rate rise in the next 6 months isnt going to be the great shock those claiming an 80% crash are claliming.

Anyway knocked up a list of what to spend the money formerly set aside to buy a houses on, any suggestion on how to improve it is appreciate.

Trying to do some organisation as my SIPP looks like i got a monkey to throw darts at  FTSE/NYSE companies to select them.

Harry Dent gives it another 2 and a bit months.
https://www.thinkadvisor.com/2021/07/12/harry-dent-stock-market-crash-likely-within-3-months/

image.png.cca42a879f7517a34bea8e7ec8293c3d.png

 

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I think I kicked off the COVID consideration within this thread by opining that must of the macro picture (rising oil demand against falling supply, inflation, etc) was dependent on the vaccines working.  If they are, instead, ineffective or even worse kill a lot of consumers, I was concerned the macro picture could be out 100% due to this global black swan.

I don't think this is the place to debate the vaccine plus or minus.  We have a whole sub forum for that.  But it IS the place to talk about what signals we might see that would indicate whether the macro inflation theory is going off the rails, so to speak.

 

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Lightscribe
5 hours ago, leonardratso said:

cant see the point in arguing the toss, some people believe one thing, others believe another, so what, everyone can be tolerant of others views, even if they strongly disagree, surely thats all it is a difference of opinion? I dont argue with my deeply religious neighbour, and he doesnt push it on me, so its all fair.

That’s because you have no faith in the power of the Great Panther. Repent the end is neigh and your sins will be forgiven.

Panther VI chapter 6 verse 2 - Q3 report

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Lightscribe
4 hours ago, wherebee said:

I think I kicked off the COVID consideration within this thread by opining that must of the macro picture (rising oil demand against falling supply, inflation, etc) was dependent on the vaccines working.  If they are, instead, ineffective or even worse kill a lot of consumers, I was concerned the macro picture could be out 100% due to this global black swan.

I don't think this is the place to debate the vaccine plus or minus.  We have a whole sub forum for that.  But it IS the place to talk about what signals we might see that would indicate whether the macro inflation theory is going off the rails, so to speak.

 

Let’s face it this is Dosbods imported from HPC (what was the meaning behind TOS again?). Uncensored wars over personal opinions is what makes it a unique corner of the internet. I agree with @wherebee above.

The peaceful commune of the deflation thread in the basement, is like a WW2 commander bunker bomb shelter while battles rage on around us. We discuss the overall financial battle strategies against the bankers we are all at war with, well away from the front line.

Occasionally however the battle lines do get overrun. Fall back gentlemen! 

I’ll take the indemnity card of crypto here to mention sparingly, because I consider it will almost definitely be financially related to all of us in the future. (Oh yes and Lego) YRS can have dumpster diving. DB gets special allowances as he started this thread, he can have pizzas/pie making, M&S out of season clothes, reduced sticker bargains. Errol can have gold, blocks of gold and gold furniture.

If anyone else has any more indemnities let me know and I’ll jot them down and remind everyone If anyone objects.

 

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7 minutes ago, Lightscribe said:

Let’s face it this is Dosbods imported from HPC (what was the meaning behind TOS again?). Uncensored wars over personal opinions is what makes it a unique corner of the internet. I agree with @wherebee above.

 

give me an upvote then you fucker.  I'm a rep whore. xD

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Shell updates on gas this morning could be eye watering, BP are reporting out NBP of 86,  you have to go back to 2008 to see those prices - coupled with a 14% drop in storage at a time of normal increase. 

Medium/small business that have not hedged or forward purchased are going to feel some real pain here 

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21 minutes ago, Seacrest said:

Shell updates on gas this morning could be eye watering, BP are reporting out NBP of 86,  you have to go back to 2008 to see those prices - coupled with a 14% drop in storage at a time of normal increase. 

Medium/small business that have not hedged or forward purchased are going to feel some real pain here 

I wonder if retail consumers can lock in energy prices the same as businesses can.  I know you can in the USA.

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The MOD takeover of Sheffield forgemasters , some information in the story relates to previous discussions, small nuclear reactors, dogger bank and turbine manufacture. 

Quote

Steve Hammell, the company’s chief financial officer, said it was hopeful of securing work on small modular reactors. Forgemasters has provided technical support to the consortium, led by Rolls-Royce, its largest customer. Rolls-Royce hopes to use the reactors in 16 small power stations around the UK. The project has not yet received the full go-ahead, but Hammell said it could be an opportunity for the company within five years.

Hammell said the company also hoped to take advantage of the government’s desire to use more British steel in projects such as the enormous Dogger Bank offshore windfarm. Forgemasters will try to use its new government links to build the 150-tonne hub castings that sit at the centre of the huge turbines.

If it's not already been posted This Statistical Review of World Energy 2021 from BP pulls together some information relevant to the thread

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Shell results - $5.534bn for the qtr. 

$2bn of buybacks in the second half and 40% increase in dividend.

Beats the [outdated] analyst estimates. Trading profits were low and they still don't seem confident in their language or their strategy.

If this was repeated each quarter for the year, it gives a PE ratio of under 7. Completely crazy, these companies are prices as declining businesses.

 

I am hoping the BP results will be even better, they have a clearer strategy (which not everyone will like - but at least it's clear) and more positive attitude. I also hope that their trading arm has had another bumper qtr as the momentum in fuel prices continued from the first half. As I said before, anything less than $1bn of share buybacks for the qtr I will be disappointed with but in order form them to keep up with their promises, I am looking for $1.3-1.5bn.

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7 hours ago, DurhamBorn said:

 

I had a look through Telefonica Brasil

 

Anecdotal- I had an interesting conversation with some fund managers on the weekend at a one year olds birthday party! one guy ran the long investment part for pension funds in a Brazilian bank- we had a few words about how things were working- and how there might be some value in some parts of the Brazilian telecoms etc. He was pretty adamant the whole Brazilian economy was shot, people are getting their money out and he didn’t see value anywhere in their economy due to the political state. 
It was an interesting take, as these guys were very confident that the economy was coming back as pre pandemic, they were sure the London property market was going to bounce back very quickly, and that finance in the city and the commercial units would also bounce back very well. 
I didn’t want to point out DBs roadmap and how accurate it’s been so far, or point to the direction of change that i can see- as who knows what’s round the corner- but the vibe I got was “more of the same” and not any feeling of things have changed.

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9 minutes ago, dnb24 said:

He was pretty adamant the whole Brazilian economy was shot, people are getting their money out and he didn’t see value anywhere in their economy due to the political state. 

Sounds like a contrarian's wet dream

 

Quote

I didn’t want to point out DBs roadmap and how accurate it’s been so far, or give them a link to DOSBODS but the vibe I got was “more of the same” and not any feeling of things have changed.

 

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leonardratso
3 hours ago, Lightscribe said:

That’s because you have no faith in the power of the Great Panther. Repent the end is neigh and your sins will be forgiven.

Panther VI chapter 6 verse 2 - Q3 report

i have faith, i have faith, i have seen the light, oh lordy lordy lord.

 

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sleepwello'nights
1 hour ago, Seacrest said:

Shell updates on gas this morning could be eye watering, BP are reporting out NBP of 86,  you have to go back to 2008 to see those prices - coupled with a 14% drop in storage at a time of normal increase. 

Medium/small business that have not hedged or forward purchased are going to feel some real pain here 

Oh fuck. I bought a thirsty V8 as fuel prices dropped. Trouble was there was nowhere to go as my travel plans for a road trip were stalled by covid (sorry) travel restrictions. 

Now that it looks like travel restrictions are going to be relaxed fuel prices are going up. 

My timing definitely out of step 

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23 minutes ago, planit said:

Shell results - $5.534bn for the qtr. 

$2bn of buybacks in the second half and 40% increase in dividend.

Beats the [outdated] analyst estimates. Trading profits were low and they still don't seem confident in their language or their strategy.

If this was repeated each quarter for the year, it gives a PE ratio of under 7. Completely crazy, these companies are prices as declining businesses.

 

I am hoping the BP results will be even better, they have a clearer strategy (which not everyone will like - but at least it's clear) and more positive attitude. I also hope that their trading arm has had another bumper qtr as the momentum in fuel prices continued from the first half. As I said before, anything less than $1bn of share buybacks for the qtr I will be disappointed with but in order form them to keep up with their promises, I am looking for $1.3-1.5bn.

Moar tasty dividends heading my way im loving it!  :Beer:

10% yield is within reach, might just be keeping up with inflation ;)

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10 hours ago, sleepwello'nights said:

I bought them through a Vanguard fund. £180 ish in 2017, current value £230. Capital appreciation only as there is no yield from them. I sold some in January at just over £220. The low of the year so far was £200 at end of Feb.

Overall I'm content with performance, better than leaving in a bank deposit account. 

2017.  That's OK.  Wasn't on my radar that much then.  But well done you, good move.

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IMO/IME, we're in a lab, not a church, where everything is a hypothesis.  That's what "DYOR" means.  You don't have to believe in a hypothesis, indeed it probably helps not to, but do have to work it's probabilities and implications as you see them.

Anyway, no harm in clearing the air now and then to remind ourselves of such things.  So that just leaves one outstanding item - someone snitched to the headmaster! :)

th?id=OIP.TZQ2PmOLfB7DomyiYHD_EgAAAA%26p

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4 hours ago, Rave said:

Also, further to my answer above about why I think covid discussion on this thread is justified, can I point out that as far as I can see, three people (in the form of Cosmic Apple, Sasquatch and Noallegiance) have so far made it clear that they don't want covid discussion on this thread. However, if you look at the likes on Thought Criminal's original post that I responded to:

Some Covid discussion is of course necessary, however the vaccines, efficacy etc have been picked apart in an entire sub forum of their own, so perhaps take such in depth discussions over there?

Furthermore, what prompted my 'vocal' singular post was the petty name calling and personal insults.

29 minutes ago, Noallegiance said:

This thread has gone years without being derailed.

Pizzas not withstanding.

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16 minutes ago, Cosmic Apple said:

Pizzas not withstanding.

It's an in joke isn't it?  Pizzas are the staple of all city finance folk who work into the early hours on the latest hot shot deal.  I thought we were all ex-GS and co here! ;)

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1 hour ago, Majorpain said:

Moar tasty dividends heading my way im loving it!  :Beer:

10% yield is within reach, might just be keeping up with inflation ;)

Gapping up this morning, currently by c.4%.  Will that gap get filled?  FY yield 3.63% but presumably does not include any forward increase. 

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1 hour ago, dnb24 said:

Anecdotal- I had an interesting conversation with some fund managers on the weekend at a one year olds birthday party! one guy ran the long investment part for pension funds in a Brazilian bank- we had a few words about how things were working- and how there might be some value in some parts of the Brazilian telecoms etc. He was pretty adamant the whole Brazilian economy was shot, people are getting their money out and he didn’t see value anywhere in their economy due to the political state. 
It was an interesting take, as these guys were very confident that the economy was coming back as pre pandemic, they were sure the London property market was going to bounce back very quickly, and that finance in the city and the commercial units would also bounce back very well. 
I didn’t want to point out DBs roadmap and how accurate it’s been so far, or point to the direction of change that i can see- as who knows what’s round the corner- but the vibe I got was “more of the same” and not any feeling of things have changed.

Brasil goes through this on a regular basis as do several other emerging markets like Turkey.Steve Kaplan has used political based falls as key contrarian buying points for many years.Brasil has some of the best demographics and energy production resource (hydro) in the world,but also huge social problems.The liquidity flows on the Real from a macro point are usually positive after the Fed prints big,and remain positive for around three years though i expect 6 years this time.The Real has lost 2/3s of its dollar value since the financial crisis,but has been stable for a year now to slightly positive.Those fund managers are wrong on everyone getting their money out because liquidity flow is positive.That says for everyone buying dollar assets and getting out,slightly more are buying Brasilian goods,especially ones priced in dollars.Social problems etc can mask this.

I think what fund managers miss is the macro lead and lag.They simply dont use macro strategy anymore,and unlike us cant hold through volatility and wait for the gains.Big drawdowns see them out of a job.

I think in sterling terms TEF Brasil will deliver 100%+ gains over the cycle including dividends.The key though is not to re-invest dividends into the country and pull them out through the cycle.

There could be big pullbacks yet but il be buying more of a select few Brasil shares if there is a 15% drawdown.

I bet it was very interesting listening to them.

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