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

[DoINeedOne]

2 hours ago, Noallegiance said:

All,

I've decided to stop visiting this site for a good few years.

My position is set. Aside from earn more and add to it there is nothing more that I can actively do. I understand the direction of travel. I can do no more. Continuing to beat myself over the head with multiple daily visits here is counter-productive.

I thank fortune to have stumbled upon tos and subsequently this site. I thank everybody's input. It's been part of my life for a decade.

Obvious thanks (which over the impersonal medium of t'internet is almost insulting given what I have learned) to DB. If you're still around toward the middle of the next cycle, and if I revisit here, then I look forward to your input again. If not, know that you've changed my brain in ways nobody else could that I would have otherwise come across in life.

Pretend I met you, slapped you on the back and bought you a pint.

#legend

Take care of yourselves. Sincerely.

N

Good luck, i still have a few positions and funds to allocate then add every now and again and set up some alerts 

Whilst i will still be popping in here but i do need to get back to focusing on work too and spend some more time just focusing on life

[Sasquatch]

I'm not going anywhere. This site is a vast improvement on real life.

[Loki]

3 hours ago, DurhamBorn said:

Learning macro strategy was the most liberating thing i have ever done.It let me imagine past the here and now.Direction of travel with a lag is what matters.Check back in around two years from now,we should be getting into the cycle by then and a lot of the smoke will of cleared.

A macro contrarian should be all smiles today,because Shell cutting the divi is the bell ringing on the end of the great dis-inflation.Most people are looking the wrong way,the end of oil,its structural etc.What it really means is we are at last at a key inflection point.Governments have created a welfare state debt fuelled nightmare economy.Inflation is now certain.Shell rang the bell.Good luck.

 

 

https://www.forbes.com/sites/nathanielbaker/2020/04/16/contrarian-macro-strategists-predicts-final-market-melt-up-before-bear-market-to-rival-1929/

Quote

This unwinding of decades of debt buildup and other forms of leverage. This dynamic “worked great on the way up, which is why you had the highs we had, but they really punish you on the way down — and they also speed up any declines,” says Hunter.

Central banks have “virtually unlimited” ability to print money during deflationary periods. Flooding the system with liquidity is certainly called for in these times, but once inflation returns from its 30-year hibernation, this dynamic will change and the Federal Reserve will be out of bullets.

“What I believe follows this is I believe our first inflationary recovery cycle since the 1970s.” Hunter remembers this period in history well as it was then that he cut his teeth on Wall Street. “We will see a global inflationary cycle probably even that exceeds the one that ended in 20% inflation in 1980/81,” he says. “But you’re probably two years away from that being the case.”

Mr Hunter concurs!

 

[sancho panza]

28 minutes ago, Loki said:

https://www.forbes.com/sites/nathanielbaker/2020/04/16/contrarian-macro-strategists-predicts-final-market-melt-up-before-bear-market-to-rival-1929/

Mr Hunter concurs!

 

Looks like him and David Rosenberg are very similar on the deflation/inflation scenario.I think I need to lsiten to that tomorrow.

https://contrarianpod.com/content/podcasts/season2/market-melt-up-will-continue-until-late-summer-before-onset-of-global-deflationary-bust/

Content: 

• Target of 4,000 for the S&P as part of “the final melt up” (2:23)
• The downside target. Forget the “retest narrative” in the short term (10:39). Markets should drop by 80% from the top (11:58)
• Unprecedented leverage doesn’t leave policymakers much time (14:09)
• Background on David: 47 years in financial markets (18:46)
• The current crisis in historical context (26:35)
• Deflation allows for liquidity injections. Until it creates inflation (32:01)
• Discussing the potential political and social fallout from the coming economic crisis (36:12)
• How deflation will eventually turn to inflation (40:20)
• Discussion of the U.S. dollar’s reserve currency status (45:56)
• Bullish outlook for gold and silver (51:37)

[Loki]

Just now, sancho panza said:

https://contrarianpod.com/content/podcasts/season2/market-melt-up-will-continue-until-late-summer-before-onset-of-global-deflationary-bust/

You'll love it, it's a superb listen, someone posted earlier in the thread.  

[sancho panza]

12 hours ago, sancho panza said:

https://www.macrovoices.com/834-macrovoices-216-david-rosenberg-stagflation-is-coming-but-not-yet

 

Beyond three years hard to read but then demand will stabilize,supply side is going to get crunched due to capital investment getting nailed,which will lead to productivity down/just in time inventories/more local supply chains

Trend toward populism/protectionism/socialism/isolationism which means supply side shocks likely.

DR predicts beyond three years stagflation....

 

4 hours ago, DurhamBorn said:

Learning macro strategy was the most liberating thing i have ever done.It let me imagine past the here and now.Direction of travel with a lag is what matters.Check back in around two years from now,we should be getting into the cycle by then and a lot of the smoke will of cleared.

A macro contrarian should be all smiles today,because Shell cutting the divi is the bell ringing on the end of the great dis-inflation.Most people are looking the wrong way,the end of oil,its structural etc.What it really means is we are at last at a key inflection point.Governments have created a welfare state debt fuelled nightmare economy.Inflation is now certain.Shell rang the bell.Good luck.

 

Something that maybe didn't get much light as I didn't highlight it but was Rosenberg's views on the supply side crunch that he sees looming the other side of the deflation and it's a key plank of his stagflation call.It makes a lot of sense........multiple factors conspiring eg  more local supply chains,manufacturing jobs coming back, invesment dropping,deflation clearing out a lot of zombie companies.So whilst demand may well drop off,supply will likely drop more and then whenn demand turns,there'll be no supply.

Very,very convincing and that's withoutthe CB's spewing trillions from the presses.

I agree on RDSB divi cut,we're in for the long term on the lower ladders and given how many companies will be going cheap in the next 6 months,I hope they pick some up.Might have been opportune for BP to cut too.

9 minutes ago, Loki said:

You'll love it, it's a superb listen, someone posted earlier in the thread.  

there's been about 7 pages of comments today..an old man is gonna miss the odd post..............I've been doing a uni essay as well

[sancho panza]

5 hours ago, Cattle Prod said:

Congratulations, and I really mean that.

I'm leaning the same way myself. I spent about 4 hours today (when I should have been working and earning money), looking for investment decisions and trades. And despite the swings of a reasonably volatile day, there was nothing I wanted to sell, and nothing I really wanted to buy. I made no changes all day, time could have been better spent. My position is also set.

All the best fella

I won't be selling any oilies for some time,but I have been tempted to shift a few PM miners around the last two days.Take profits in MAG silver and plough into Newcrest or another goldie.I didn't tho which probably says a lot about where we are.

Need to offload our Guyana Godlfields before silvercrest pull their bid tho.......

worth noting XOM barely down a buck today.If we get one last visit to $42 I'll load up on some calls.

[Loki]

4 minutes ago, sancho panza said:

there's been about 7 pages of comments today..an old man is gonna miss the odd post..............I've been doing a uni essay as well

This thread is my Uni now 

[Shamone]

5 hours ago, Noallegiance said:

All,

I've decided to stop visiting this site for a good few years.

My position is set. Aside from earn more and add to it there is nothing more that I can actively do. I understand the direction of travel. I can do no more. Continuing to beat myself over the head with multiple daily visits here is counter-productive.

I thank fortune to have stumbled upon tos and subsequently this site. I thank everybody's input. It's been part of my life for a decade.

Obvious thanks (which over the impersonal medium of t'internet is almost insulting given what I have learned) to DB. If you're still around toward the middle of the next cycle, and if I revisit here, then I look forward to your input again. If not, know that you've changed my brain in ways nobody else could that I would have otherwise come across in life.

Pretend I met you, slapped you on the back and bought you a pint.

#legend

Take care of yourselves. Sincerely.

N

He never had any allegiance, anyway.

[Democorruptcy]

13 hours ago, DurhamBorn said:

Learning macro strategy was the most liberating thing i have ever done.It let me imagine past the here and now.Direction of travel with a lag is what matters.Check back in around two years from now,we should be getting into the cycle by then and a lot of the smoke will of cleared.

A macro contrarian should be all smiles today,because Shell cutting the divi is the bell ringing on the end of the great dis-inflation.Most people are looking the wrong way,the end of oil,its structural etc.What it really means is we are at last at a key inflection point.Governments have created a welfare state debt fuelled nightmare economy.Inflation is now certain.Shell rang the bell.Good luck.

I hope Shell have got their bells well labelled so they know which is which. We don't want them to have rung the 'another decade of disinflation' by mistake?

[Harley]

Well, start of a new month and so a critical time to look at the monthly charts (the monthlies). 

I still have lots to look at but have looked at one FTSE income portfolio so far (the usuals) and the FTSE100 itself.  No good, not good at all.  Some signs of life in tobacco and casualty insurers but the rest I have, according to my stretched technical model, are weakening.  They either have been in a relief rally or are already on the way down.  Essential momentum (Stochastics) has driven any rallies while the averages (MACDs) still head down.  There were some (still are a few) divergences with the dailies and weeklies so trading opportunities but hard for me to put long term funds to work.  The FTSE has had a nice run on the daily MACD but this translated into only a small 5% uptick in price, given most of the rise happened on 24 to 26 March with the 26 March becoming resistance, subsequently tested 3 times and failing today.  That drew out an ascending triangle chart pattern which is usually a bullish continuation pattern.  Well it did break out a bit but then fell back.  The most bullish interpretation would be a retest.  Go figure!

Bonds, commodities, etc to go.  Requests?

 

[DoINeedOne]

So BT results on 7th May whilst i am still yet to buy any BT, but I wonder if they will announce a dividend cut, I will buy some after everyone sells or if they don't on the 7th

 

[DurhamBorn]

6 minutes ago, DoINeedOne said:

So BT results on 7th May whilst i am still yet to buy any BT, but I wonder if they will announce a dividend cut, I will buy some after everyone sells or if they don't on the 7th

 

Certain to cut i think and hopefully they do.A good result would be 30%,but we might see 50%.Vod cut 40% last year so the question really is will they cut again?.Telcos are at or reaching the end of Capex growth mostly,BT needs more for fiber.They all need to de-leverage quicker.A few years out though Capex should be falling and income rising.Im expecting free cash to double to treble in the next cycle.I expect the main players to go up 150% to 400% before dividends for the cycle.Mergers in the sector are certain as well,though probably once debts are lower and equity higher.

[Hardhat]

Deflation portfolio has fallen about 6% today. Looks like I might get a chance at another ladder into RDSB 

So much short-termism when people will sell off on a Divi cut... even at 2/3rds cut the divi is still higher than most savings accounts...

Will be fully deployed in oil soon, and ready to start targeting Telcos.

I will also be looking to add some tech stocks, such as ZM, AMZN, PLCM, which for me go hand in hand with the telcos, as they are all "remote" technologies, and healthcare / chemical companies.

Does anyone hold Cisco Systems? Are you holding on NASDAQ? Cisco are essentially an infrastructure company for the internet, which would seem to be a sector ready to hoover up even more investment if a fibre rollout comes about. Any thoughts on them next cycle?

[Democorruptcy]

1 hour ago, DoINeedOne said:

So BT results on 7th May whilst i am still yet to buy any BT, but I wonder if they will announce a dividend cut, I will buy some after everyone sells or if they don't on the 7th

 

I think the yield on gilts will mean they will have a bigger pension deficit to plug? Somebody has to pay for that.

[Yellow_Reduced_Sticker]

Morning ALL!

 

Quiet here this morning where are the NUTTER 5 minute traders?

 

I expect they have run out of coka- sherbets?!  @confused etc ...etc,...

 

Shell has indeed dropped to a few pennies of my top-up price £11.69!

 

 

Though this morning i'm feeling EXTRA stingy and may wait for it to go under a tenner!

 

BTW, I was thinking about getting into home-brew, and remembered the old carry-on from years ago when Sid James and his mate were making it in the shed and it BLEW UP!

 

Been looking for the film for ages and it wasn't a carry-on (similar) film was called:  Bless this House - The Movie

 

Bloody EXCELLENT stuff from the 70's...!

 

Here it is, GRAB ya-self some beers and ENJOY!

https://www.youtube.com/watch?v=TU7BePMR6tg&list=PLctNM794qqoHZurwwfKnT17rhAScMWaDe

 

 

 

[spygirl]

18 hours ago, confused said:

Amazon trading update out soon?

 

Or.

Amazon look to offer better value and save millions of consumers money.

Seriously. before supermarkets, a lot of small shops ripped off the local population royally.

 

[Loki]

22 minutes ago, Hardhat said:

Deflation portfolio has fallen about 6% today. Looks like I might get a chance at another ladder into RDSB 

So much short-termism when people will sell off on a Divi cut... even at 2/3rds cut the divi is still higher than most savings accounts...

Will be fully deployed in oil soon, and ready to start targeting Telcos.

I will also be looking to add some tech stocks, such as ZM, AMZN, PLCM, which for me go hand in hand with the telcos, as they are all "remote" technologies, and healthcare / chemical companies.

Does anyone hold Cisco Systems? Are you holding on NASDAQ? Cisco are essentially an infrastructure company for the internet, which would seem to be a sector ready to hoover up even more investment if a fibre rollout comes about. Any thoughts on them next cycle?

Never thought I'd get a chance at single digit RDSB again this soon.  I think Cisco are a great suggestion and have a place in a sensible reflation portfolio.

[Harley]

13 minutes ago, Yellow_Reduced_Sticker said:

 

Shell has indeed dropped to a few pennies of my top-up price £11.69!

At key support, or is that now resistance on the hourly.

Monthlies while not great have good room to strengthen.

[A tremendous # on the lung]

5 minutes ago, Loki said:

Never thought I'd get a chance at single digit RDSB again this soon.  I think Cisco are a great suggestion and have a place in a sensible reflation portfolio.

What price is it worth picking up RDSB (I don't own any)? Should I wait for sub 1000?

[Loki]

5 minutes ago, BBH said:

What price is it worth picking up RDSB (I don't own any)? Should I wait for sub 1000?

Until today, my RDSB holdings had been in the blue throughout all of this turmoil.  Bought at 1349, 1017 and 1041.

Up to you if you think it will go lower...I would happily buy at this price and have set a buy order for 900 on my own portfolio on the chance it drops further.

[Harley]

Loving the 30/60 minute RDSB candles.  Explored the depths 14:00 yesterday before a higher close, then went down there and beyond today.  Gapped down at the open this morning but filled the gap pretty quickly (keen dip buyers?) only to be pulled down.  Some money been made.  Now on the up - profit taking before the weekend?   Should pay this month's leccy, or better, a refill of the oil tank!

[JMD]

21 hours ago, Loki said:

I don't like the population control/nasty evil humans spin, but he's right about it being a con.  It's about control, same as everything.

Got fed up of being called a science denier though so I'll just take the money.

Exactly, I also don't think carbon is the full story, perhaps its just down to the earth's natural cycle/or sun spots/or volcanoes/or maybe its just Piers Corbyn!!

So for me, I invest in those darn renewables - as this sector will become the new jobs economy - so why not - but in the mean time I sit back and hopefully (and I admit, ever so smugfully!) wait for my investment gains/divis to roll in.

 

On a connected note, and during this virus period we are all living through, its certainly illuminating to watch and listen to all the scientific 'opinion' coming from the epidemic science experts, both from here and from abroad. I get that its a new disease, but after all who knew there was no scientific consensus among the experts?!?.... However, what I find particularly dispiriting is watching those government science advisers at the daily Carrona briefings - after all, If you didn't know their job titles you'd swear that the science advisers were themselves politicians, they just seem to continually speak the bleeding obvious (reminds me somewhat of that line from Orwell's 'Animal Farm', about looking from man to pig, and then back from pig to man, and already not being able to tell the difference).     

[Loki]

https://www.macrovoices.com/838-macrovoices-217-dr-lacy-hunt-the-road-through-deflation-toward-eventual-hyperinflation

This looks like it could be a great listen.  Only just seen it myself.

[AWW]

10 minutes ago, JMD said:

However, what I find particularly dispiriting is watching those government science advisers at the daily Carrona briefings - after all, If you didn't know their job titles you'd swear that the science advisers were themselves politicians, they just seem to continually speak the bleeding obvious

I don't think you can blame them - the questions they are asked are banal in the extreme, and the press just looking to pick on any small slip-up. I'd be in full-on arse-covering mode, too. Just look how much they're being pilloried for the death toll exceeding the 20,000 "good outcome" that was mooted several weeks ago - that death toll being people who died "with" (not of) CV.

The problem is that we have a bunch of useless political journalists covering what is essentially a specialist public health story.  Although it's always enjoyable to watch Peston get his arse handed to him by someone considerably cleverer than he thinks he is...