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


spunko

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Noallegiance
1 hour ago, TheCountOfNowhere said:

Was that it ?

Was that the crash ?

2 weeks of falls , $8Trillion in Hand outs, then it's up up up ?

This bounce hasn't even recovered half the losses from the plateau high yet.

Markets are reacting massively to anything being reported/tweeted.

Give it mid-summer and a trend may be more obvious.

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TheCountOfNowhere
3 minutes ago, Noallegiance said:

This bounce hasn't even recovered half the losses from the plateau high yet.

Markets are reacting massively to anything being reported/tweeted.

Give it mid-summer and a trend may be more obvious.

I've laddered in again today, oils and minerals.

Might go up, might go down, but at least it's not bought at the peak.

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NogintheNog
12 minutes ago, Noallegiance said:

This bounce hasn't even recovered half the losses from the plateau high yet.

Markets are reacting massively to anything being reported/tweeted.

Give it mid-summer and a trend may be more obvious.

I agree. Look at the dead cat bounce in 2008/9, admittedly without any QE.

Screenshot at 2020-04-07 10:31:58.png

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NogintheNog
39 minutes ago, Majorpain said:

The 80% for three weeks scheme is doing the majority of the work at the minute, so its most definitely getting to where its needed IMO.

Yes, that's going to be the real tell tale, when that 80% gets pulled....

For a country with a productivity problem, we are now paying people to do nothing and produce nothing, something we're already doing too much of via the benefits system. This has all got to be paid for, either through higher taxes which will be deflationary, or via inflation. So assuming that higher taxes (or government spending reductions) are not options for a government that wants to be re-elected in 4 years, that just leaves the inflation option....

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15 minutes ago, TheCountOfNowhere said:

I've laddered in again today, oils and minerals.

Might go up, might go down, but at least it's not bought at the peak.

I'm not sure that you've got the hang of this yet! You ladder in on the way down! :P

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TheCountOfNowhere
22 minutes ago, CVG said:

I'm not sure that you've got the hang of this yet! You ladder in on the way down! :P

It might still be going down !!!

 

If not, better to buy near the bottom than the top :-)

Easyjet was a good call....the government dont want to let any of the corporates go bust, esp airlines

 

Market Summary > easyJet plc
LON: EZJ
Follow
 

657.40 GBX +105.00 (19.01%)

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1 hour ago, Majorpain said:

The 80% for three weeks scheme is doing the majority of the work at the minute, so its most definitely getting to where its needed IMO.

I thought it was up to £2,500 a month per employee for those employed from 28 Feb and still employed in June, payable in June?  Something, but not as great as it first sounds.

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6 minutes ago, Harley said:

I thought it was up to £2,500 a month per employee for those employed from 28 Feb and still employed in June, payable in June?  Something, but not as great as it first sounds.

That would sound about right in my case. This well be my 3rd week on 80%, assuming I get paid on Friday. And the letter from my company stated that I would be furloughed for 3 months.

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PaulParanoia

An opposing view here that unlimited QE won't actually stop the dollar gaining strength ...

https://www.zerohedge.com/markets/whole-worlds-fked-raoul-pal-pulls-no-punches-latest-interview

Quote

Referring to his institutional market research at Global Macro Investor, Pal's most recent thoughts (excerpted) on "A Dollar Standard Crisis" are as follows:

Less available dollars, in a world of a massive dollar shortage, drives up the dollar creating a shortage both home and abroad. Money printing does not make the dollars available. They get stuck in the financial system and hoarded.

Money for the banks, no money for the debtors...

The domestic shortage of dollars means that money gets hoarded while defaults rise. And the shortage abroad means that $13tn of debt scrambles for the available dollars as world growth slows and banks are less free with capital.

Don't forget - the $13tn short dollar positions (foreign dollar debt held mainly by foreign corporation and investment vehicles) is the largest position ever taken in the history of global financial markets.

It can only mean a massive, uncontrolled dollar rally.

QE will not fix this. Swap lines will not fix this. A debt jubilee would fix this or multiple trillions of dollars in write-downs and defaults.

It is the dollar strength that brings to world to its nadir (just like the 1930s). It is the dollar system that is the really big problem.

 

bfmBA72.jpg

The dollar has eaten all of its competitors and now it is going to eat itself.

This eventually breaks the dollar after a super-spike as global central banks are forced to find alternatives. They are already working on digital currencies for exactly this.

 

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54 minutes ago, Harley said:

I thought it was up to £2,500 a month per employee for those employed from 28 Feb and still employed in June, payable in June?  Something, but not as great as it first sounds.

Its not a panacea, but it is helping keep the lights on for quite a lot of companies.

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24 minutes ago, Majorpain said:

Its not a panacea, but it is helping keep the lights on for quite a lot of companies.

It makes massive difference to all low-paid workers, think hospitality services in particular. Millions of people employed there who don't earn anywhere near the £37500 cap, so getting 80% of their salary instead of getting nought means they won't have to go that deep into debt.

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Hi DB, SP or anyone else... I'm looking to fill in some gaps in my investments and looking at SSAB Steel that has been mentioned here previously. There are two shares available on Hargreaves Lansdown, "SSAB-A" and "SSAB-B". Aha, that'll be like RDSA and RDSB, I thought... Wrong!

https://www.ssab.com/Company/Investors/SSAB-share/Share-information

"SSAB has two share series, SSAB A and SSAB B. Each class A share entitles the holder to one vote and each class B share entitles the holder to one tenth of one vote. There are no other differences between the share classes."

Q: Why would they structure it like that, and should I really care? It looks like people here have been buying the SSAB-B one which has the bigger market cap of the two?

Thanks!

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57 minutes ago, BadAlchemy said:

Hi DB, SP or anyone else... I'm looking to fill in some gaps in my investments and looking at SSAB Steel that has been mentioned here previously. There are two shares available on Hargreaves Lansdown, "SSAB-A" and "SSAB-B". Aha, that'll be like RDSA and RDSB, I thought... Wrong!

https://www.ssab.com/Company/Investors/SSAB-share/Share-information

"SSAB has two share series, SSAB A and SSAB B. Each class A share entitles the holder to one vote and each class B share entitles the holder to one tenth of one vote. There are no other differences between the share classes."

Q: Why would they structure it like that, and should I really care? It looks like people here have been buying the SSAB-B one which has the bigger market cap of the two?

Thanks!

https://www.hl.co.uk/shares/shares-search-results/s/ssab-svenskt-stal-ab-ser-b-npv

You want the B shares.

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17 hours ago, Ponty Mython said:

I don't think it is realistic to conflate the threat from a pandemic with that to and from the environment. 

Mother Nature will take care of the environment, one way or another, over a long period of time - this may or may not include the destruction of a number of human beings.

A pandemic (especially if you believe it to be man-made) poses a clear and present danger to the human population; as such, it is of potentially immediate magnitudes greater a threat.

Searching for relevant investment areas is part and parcel of this thread but, if the part in bold above comes to pass, investment will be the least of our worries!

The "environment" has become a politically-expedient topic, therefore it is reasonable to look at, for example, renewable energy as a pragmatic investment area.

Ponty Mython thanks for responding. I think we kinda agree because I was attempting to pose my question in terms of 'threat' equivalence - not empirically speaking - but in how our leaders frame their political/policy response. But as you comment most of the investment arena is already set/priced in, and individual investment decisions should be focused upon infrastructure and green tech. I would add that actual risks/impact analysis is a different topic. For example I believe that environmental risk/damage resulting from climate change will be successfully mitigated/resolved through technology. Its an interesting subject but so many moving parts and complex to decipher (perhaps leave it to the SF writers as I suggested in original post?). So, though jobs/economy will become environmentally focused, I view the recent and increasing Corona virus mutations (Sars, Mers, etc) edging up to the top of the political agenda and will become THE existential political threat, pushing the XR rantings into 2nd place.   

Perhaps slightly off-topic for this thread, but related in a macro way I think. And I believe that the corona virus agenda is set to rise and rise. For example I note that senior politicians are asking if China should pay reparations for the harm 'their virus' has done to the global economy. This is probably just another 'bat'(sorry!) to beat globalisation over the head with... that's to say, as discussed often here, trade with China is set to diminish anyway, so the recent virus is a convenient excuse and a vote winner.

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More from Otavio Costa:
 
 
 
Outlandish.
 
The energy sector makes up less than 3% of the S&P 500 weight today.
 
Lowest level ever.
 
A vital part of the economy now worth close to nothing.
 
I guess that’s better than the whole precious metals industry...
 
Which is only 1% of the index!
 
 
Image
 
 
 
 
 
 
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3 hours ago, kibuc said:

It makes massive difference to all low-paid workers, think hospitality services in particular. Millions of people employed there who don't earn anywhere near the £37500 cap, so getting 80% of their salary instead of getting nought means they won't have to go that deep into debt.

I was thinking of companies and their cash flows.  Will some struggle to pay staff until they get the money?  Although I know one who received a rates rebate.

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Castlevania

Well I finally did what I should have done months ago and pulled the plug on the dog that shall not be named.

Now watch it soar! 

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14 minutes ago, Castlevania said:

Well I finally did what I should have done months ago and pulled the plug on the dog that shall not be named.

Now watch it soar! 

Why though?

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30 minutes ago, Castlevania said:

Well I finally did what I should have done months ago and pulled the plug on the dog that shall not be named.

Now watch it soar! 

Keeping my dog and will watch it with a baleful eye during the inflation event and dare it to rejuvenate.....

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Democorruptcy

Hargreaves Lansdown. How do people who have an account there find their website? 

At the moment I cannot even load my portfolio, again. It's like wading through treacle even after waiting for the UK market to close.

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Don Coglione
5 minutes ago, Democorruptcy said:

Hargreaves Lansdown. How do people who have an account there find their website? 

At the moment I cannot even load my portfolio, again. It's like wading through treacle even after waiting for the UK market to close.

It has been shit for a fortnight.

I tried to load up my account to fill my boots with oilies at the (brief) low 2 weeks ago. No dice.

Lots of to-ing and fro-ing, eventually they admitted that the problem was theirs and we found a way to resolve the issue.

By which time, the oilies had jumped 30-40-%...

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Road maps are wonderful things.Market of course is looking backwards as always.Consumer is dead,the cycle is industrial.

https://www.itsinternational.com/its1/news/trump-calls-2-trillion-us-infrastructure-spend

In a tweet he wrote that the money in the new bill should be “focused solely on jobs and rebuilding the once-great infrastructure of our country!”

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13 minutes ago, Ponty Mython said:

It has been shit for a fortnight.

I tried to load up my account to fill my boots with oilies at the (brief) low 2 weeks ago. No dice.

Lots of to-ing and fro-ing, eventually they admitted that the problem was theirs and we found a way to resolve the issue.

By which time, the oilies had jumped 30-40-%...

It has been pretty sluggish although I can usually log on. I did manage to grab some Tullow Oil 2 weeks ago but struggled with the other oilies. 

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Bobthebuilder
25 minutes ago, Ponty Mython said:

It has been shit for a fortnight.

I tried to load up my account to fill my boots with oilies at the (brief) low 2 weeks ago. No dice.

Lots of to-ing and fro-ing, eventually they admitted that the problem was theirs and we found a way to resolve the issue.

By which time, the oilies had jumped 30-40-%...

2 weeks ago i just kept hitting the qoute and buy button, a lot failed a few did go through. After that i set up buy points and they all got filled.

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