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

[ThoughtCriminal]

Nothing to see here........... 

[ThoughtCriminal]

Classic from Lynn Alden 😂

[JMD]

42 minutes ago, sancho panza said:

It's funny talking about US yields.I wrote the following psot in Sept 2020 .My first attempt  at trying to build a checklist of stock market  BK red flags.At the time the US 10 yr yd was 0.623%-now 1.74%.

I'm trying to think of any other indicators that might provide a red flag,so please feel free to suggest any.None of these are set in stone but if/as more get ticked off then,I'll strt adjsuting I suspect.

1) oil price rise to $80+

2) copper> $3.60

3) GSR <45

4)DXY <85

5) cable >$1.65

6) UST 10 year >2%

To which I might add

EUR/USD>1.45,copper/gold ratio>0.0002,UST 10yr-2yr yd >1.

 

SP, just to say I think your red flags are fascinating, I consider them a big part of this thread thesis, and believe Durhamborn is also on the lookout for advance signs of a BK event, but he is not convinced we will actually get one. For me, as I am not a trader I don't view this as attempting to time the market in terms of actively buying and selling for profit, instead I see it as capital allocation/deallocation and as fundamental as deciding which macro cycle stocks to buy and hold in the first place. So for me buying/trimming profits/selling/rotating between up-down stock-sectors is not trading, or am I wrong? 

[Fully Detached]

Well I still have many questions, but the burning one for now is where might one procure one of these pizza ovens? I consider myself to be a bit of a dab hand on the bases myself, and would like somewhere cheap and hot to put them...

[ThoughtCriminal]

1 minute ago, Fully Detached said:

and would like somewhere cheap and hot to put them...

Inappropriate joke. In 3,2,1........... 😆

[Bricks & Mortar]

Panasonic bread machines have a pizza dough setting.  Chuck in your stuff, press button, and tip out 45 mins later.  Bit slower than DB's dough hook, but all automatic and a beeper when its done.  Most importantly, I haven't a lot of space in my kitchen as cupboards all piled up with long dated food, so one less appliance is better.

I've been using the paddle in the bread machine, but just remembered there was a weird dough hook thingie that I threw in the drawer and never thought of again.  Will try that next time.

[ThoughtCriminal]

"Reality is ours to make"

 

If ever a country deserved a reality check its the US

[sancho panza]

37 minutes ago, ThoughtCriminal said:

Nothing to see here........... 

Shaun Richards on the hunt today.As ever,rising fuel prices lead to infaltion-who'd have thunk it?

https://notayesmanseconomics.wordpress.com/2021/03/18/with-some-central-banks-raising-interest-rates-where-does-that-leave-the-bank-of-england/

Brazil

Taking into account the baseline scenario, the balance of risks, and the broad array of available information, the Copom unanimously decided to increase the Selic rate by 0.75 p.p. to 2.75% p.a. The Committee judges that this decision reflects its baseline scenario for prospective inflation, a higher-than-usual variance in the balance of risks, and it is consistent with the convergence of inflation to its target over the relevant horizon for monetary policy, which includes 2021 and, mainly, 2022. ( Banco Central Do Brasil)

 

Norway

Norges Bank’s Monetary Policy and Financial Stability Committee has unanimously decided to keep the policy rate unchanged at zero percent. In the Committee’s current assessment of the outlook and balance of risks, the policy rate will most likely be raised in the latter half of 2021.

A sharp rise in electricity prices contributed to an increase in 12-month CPI inflation from 1.4% in December to 3.3% in February, which was substantially higher than projected. Futures prices for electricity and fuel have increased since December and indicate a faster rise in energy prices in 2021 than expected earlier. CPI inflation may therefore prove to be markedly higher in 2021 than projected in the December Report.

 

USA

The US ten-year yield is at 1.72% as I type this and remember some thought it would intervene at 1.1% and then 1.2%. This is happening whilst it is buying some US $80 billion of government and US $40 of mortgage bonds a month.

Another day-to-day increase: that’s 46 consecutive days — longest streak of U.S. retail gasoline daily price increases in at least 16 years (and probably a lot longer). ( @JavierBlas )

25 minutes ago, JMD said:

SP, just to say I think your red flags are fascinating, I consider them a big part of this thread thesis, and believe Durhamborn is also on the lookout for advance signs of a BK event, but he is not convinced we will actually get one. For me, as I am not a trader I don't view this as attempting to time the market in terms of actively buying and selling for profit, instead I see it as capital allocation/deallocation and as fundamental as deciding which macro cycle stocks to buy and hold in the first place. So for me buying/trimming profits/selling/rotating between up-down stock-sectors is not trading, or am I wrong? 

My Plan A is to try and time an exit,buy TLT/IBTL and buy back our stocks lower.For me the BK is a deflationary event that will precede the inflationary run up to 2030.With how quick CB's are to print these days and bail out debtors,there's a chance they may stave it off.I doubt that,there's just too many parts of the equation that need bailing out.Particularly EM's if the $ is at the epicentre of the crisis-which imho it will be.

Plan B is to sit tight in what we've bought this last year and maybe hedge with some options activity.If you've been buying the shares talked about in the basement -which I have-particualrly at the prices over this last year,then it's a viable plan.as ever dyodd

[Noallegiance]

40 minutes ago, ThoughtCriminal said:

"Reality is ours to ignore and keep fudging it"

"Reality is ours to ignore and keep fudging it"

[kibuc]

15 minutes ago, sancho panza said:

Shaun Richards on the hunt today.As ever,rising fuel prices lead to infaltion-who'd have thunk it?

https://notayesmanseconomics.wordpress.com/2021/03/18/with-some-central-banks-raising-interest-rates-where-does-that-leave-the-bank-of-england/

Brazil

Taking into account the baseline scenario, the balance of risks, and the broad array of available information, the Copom unanimously decided to increase the Selic rate by 0.75 p.p. to 2.75% p.a. The Committee judges that this decision reflects its baseline scenario for prospective inflation, a higher-than-usual variance in the balance of risks, and it is consistent with the convergence of inflation to its target over the relevant horizon for monetary policy, which includes 2021 and, mainly, 2022. ( Banco Central Do Brasil)

 

Norway

Norges Bank’s Monetary Policy and Financial Stability Committee has unanimously decided to keep the policy rate unchanged at zero percent. In the Committee’s current assessment of the outlook and balance of risks, the policy rate will most likely be raised in the latter half of 2021.

A sharp rise in electricity prices contributed to an increase in 12-month CPI inflation from 1.4% in December to 3.3% in February, which was substantially higher than projected. Futures prices for electricity and fuel have increased since December and indicate a faster rise in energy prices in 2021 than expected earlier. CPI inflation may therefore prove to be markedly higher in 2021 than projected in the December Report.

 

USA

The US ten-year yield is at 1.72% as I type this and remember some thought it would intervene at 1.1% and then 1.2%. This is happening whilst it is buying some US $80 billion of government and US $40 of mortgage bonds a month.

Another day-to-day increase: that’s 46 consecutive days — longest streak of U.S. retail gasoline daily price increases in at least 16 years (and probably a lot longer). ( @JavierBlas )

My Plan A is to try and time an exit,buy TLT/IBTL and buy back our stocks lower.For me the BK is a deflationary event that will precede the inflationary run up to 2030.With how quick CB's are to print these days and bail out debtors,there's a chance they may stave it off.I doubt that,there's just too many parts of the equation that need bailing out.Particularly EM's if the $ is at the epicentre of the crisis-which imho it will be.

Plan B is to sit tight in what we've bought this last year and maybe hedge with some options activity.If you've been buying the shares talked about in the basement -which I have-particualrly at the prices over this last year,then it's a viable plan.as ever dyodd

My plan A is virtually the same - at some point I'll start moving from silver miners to IBTL, starting with the least liquid ones. Haven't decided yet whether I'll be going 100% back into miners after the bust or spread it across PMs, Oilies and Telecoms.

There's no plan B, not really, but Plan C I'm starting to consider is moving to big-cap gold miners instead of IBTL for the crash. They are much less volatile than my silver minnows so should still provide me with solid re-entry point into silver if the crash comes (think silver juniors going down 80%-90% while big-cap goldies only fall 60-70% - you can buy back up to three times as much), and if it never comes then I'm still in the inflation game. Maybe I should consider a hybrid AxC approach.

[janch]

12 minutes ago, sancho panza said:

Brazil

Taking into account the baseline scenario, the balance of risks, and the broad array of available information, the Copom unanimously decided to increase the Selic rate by 0.75 p.p. to 2.75% p.a.

I read this today too and I see @DurhamBornis ahead of the game with the talk of investing in Brazil:

Would something along these lines be a good idea?

[invalid]

1 hour ago, JMD said:

SP, just to say I think your red flags are fascinating, I consider them a big part of this thread thesis, and believe Durhamborn is also on the lookout for advance signs of a BK event, but he is not convinced we will actually get one. For me, as I am not a trader I don't view this as attempting to time the market in terms of actively buying and selling for profit, instead I see it as capital allocation/deallocation and as fundamental as deciding which macro cycle stocks to buy and hold in the first place. So for me buying/trimming profits/selling/rotating between up-down stock-sectors is not trading, or am I wrong? 

 

I think along the same lines, looking for clues and indicators as to what lies ahead. But it often seems the case is that unexpected events are exactly as the name implies.

 

[Hancock]

1 hour ago, Fully Detached said:

Well I still have many questions, but the burning one for now is where might one procure one of these pizza ovens? I consider myself to be a bit of a dab hand on the bases myself, and would like somewhere cheap and hot to put them...

G3 Ferrari Pizza oven prices have gone through the roof. Maybe try one of these looks similar

https://www.ikohs.com/uk/buy-pizza-oven/20895-pizza-maker-electric-pizza-oven.html?id_c=41883

[sancho panza]

10 minutes ago, kibuc said:

My plan A is virtually the same - at some point I'll start moving from silver miners to IBTL, starting with the least liquid ones. Haven't decided yet whether I'll be going 100% back into miners after the bust or spread it across PMs, Oilies and Telecoms.

There's no plan B, not really, but Plan C I'm starting to consider is moving to big-cap gold miners instead of IBTL for the crash. They are much less volatile than my silver minnows so should still provide me with solid re-entry point into silver if the crash comes (think silver juniors going down 80%-90% while big-cap goldies only fall 60-70% - you can buy back up to three times as much), and if it never comes then I'm still in the inflation game. Maybe I should consider a hybrid AxC approach.

I like that Plan C.We sold some of our goldies back in Sept including a few that had become peripheral.Barrick bottomed at $18 in March 20.Newmont is now kciking out a 4% divi.Newcrest is nice and big too.

I'll only be shifting our Barrick if I'm certain a BK is inbound,otherwise,I'll keep them and Newcrest etc etc.For my mind there's real value in the big miners here,loads of FCF,bugger all debt as noone's been lending PM miners for a deccade.There are worse places to hide in a storm.

 

@Cattle Prod jsut watching WTI drop 4%.When you talk about pull back,are you measuring from intra day highs/lows or off daily closes?

[C-gull]

5 hours ago, AWW said:

I use 4G mobile broadband, however, as you'd expect, get nowhere near those speeds. I have been looking at upgrading, using a DD-WRT router tethered to a cheap 5G phone. It's the lack of being tied into a contract that attracts me to mobile vs a physical connection.

Also nice to be free from ISP provided routers and have proper control of your home network eh

[dgul]

3 minutes ago, C-gull said:

Also nice to be free from ISP provided routers and have proper control of your home network eh

You can pretty much use whatever ADSL modem/router you want to connect to the internet -- you don't have to stick with the freebee.

[Fully Detached]

51 minutes ago, Hancock said:

G3 Ferrari Pizza oven prices have gone through the roof. Maybe try one of these looks similar

https://www.ikohs.com/uk/buy-pizza-oven/20895-pizza-maker-electric-pizza-oven.html?id_c=41883

I'll take a look, thanks. Not sure if I'd really see the value as our oven goes up to 250c which is enough to give a cripsy base in about 6-7 minutes. I always wanted one of those Ooni things until I realised that when you cook a pizza in 90 seconds you're not going to get a crispy base. I get enraged when I pick up a slice of pizza and everything slides off it onto the plate 

[Hancock]

5 minutes ago, Fully Detached said:

I'll take a look, thanks. Not sure if I'd really see the value as our oven goes up to 250c which is enough to give a cripsy base in about 6-7 minutes. I always wanted one of those Ooni things until I realised that when you cook a pizza in 90 seconds you're not going to get a crispy base. I get enraged when I pick up a slice of pizza and everything slides off it onto the plate 

That oven goes to 350 degrees

Spec of that pizza oven and the G3 Ferrari is the same.

[DurhamBorn]

2 hours ago, ThoughtCriminal said:

Classic from Lynn Alden 😂

According to my roadmap the US and the west in general need rates around 2.8%pa below real inflation for the cycle so that governments look less bust,consumers and companies can de-leverage,and all the money thats ended up in bonds instead of useful investment can be inflated away.

The message is loud and clear from the Fed and government.The real economy needs investments and for people to have money to spend.If you park capital into bonds rather than create growth and jobs we will do it for you.That is the cycle underway.People who refuse to accept this are fighting the Fed,and also a big chunk of other central banks.

[Fully Detached]

3 minutes ago, Hancock said:

That oven goes to 350 degrees

Spec of that pizza oven and the G3 Ferrari is the same.

Interesting, definitely some Youtube surfing coming up on that one and then possibly buy myself a little present. Like the old song says, it's five o'clock somewhere, so it's probably my birthday somewhere too 

[DurhamBorn]

1 hour ago, Cattle Prod said:

Intraday, as long as they knock stops out and shake weak hands it's fine with me. Delighted with that today, it's been coming, and needed. Another 5% from here I think, another 10% is possible.

Yes just as expected and hopefully slam it down some more.I think the $58 on WTI is likely here or maybe $55.That should shake out people who bought on the way down before who believe the EV oil is debt narrative.

Once this is over i expect a very fast and hard rally in the stocks.The market wont give people a chance to get back onboard.We might see 8%+ jumps in the big oilies a day,and maybe 35% in a month.Fed will stamp down on the short end,it doesnt want money parked.

[DurhamBorn]

17 minutes ago, Fully Detached said:

I'll take a look, thanks. Not sure if I'd really see the value as our oven goes up to 250c which is enough to give a cripsy base in about 6-7 minutes. I always wanted one of those Ooni things until I realised that when you cook a pizza in 90 seconds you're not going to get a crispy base. I get enraged when I pick up a slice of pizza and everything slides off it onto the plate 

Im so greedy you wouldnt believe,,but the Ferrari oven is the best thing iv ever bought.That extra 100c makes all the difference.That Create one looks very similar though and i like the fact you can see in with the lid down.I bought 4 pizza trays that fit inside and i make the pizzas on them so i can fire one in after another.What i do though is heat to 2.5 on the dial until the light goes out,then put first pizza in ant turn to 3,that means top and bottom elements are on,then when i take first one out i leave the lid up for around 30 seconds with the next pizza on its tray in the oven so the bottom is heating up for 30 seconds before putting lid down.Iv found repeating that means it never quite reaches top temp and knocks off so you can do 4 pizzas one after the other.

The only problem i have is my kids are always arranging to come around on Friday nights etc and saying oh will you make pizzas .

Iv actually been learning chinese cooking the last few weeks,you need to visit a chinese supermarket etc for the right soy sauces,noodles etc,but im making takeaway standard now for around £1.50 a head on most meals.

I had two agencies ring me today with job offers,i turned them both down.Told them the wages were minimum 50% short.I enjoy telling them that now.You can tell by their voices they are starting to struggle to get decent people.

[Noallegiance]

34 minutes ago, DurhamBorn said:

Once this is over i expect a very fast and hard rally in the stocks.The market wont give people a chance to get back onboard.We might see 8%+ jumps in the big oilies a day,and maybe 35% in a month.Fed will stamp down on the short end,it doesnt want money parked.

Flippin eck.

You mean as part of the melt-up?

[DurhamBorn]

1 minute ago, Noallegiance said:

Flippin eck.

You mean as part of the melt-up?

Just in the oil sector.

[AlfredTheLittle]

49 minutes ago, Hancock said:

That oven goes to 350 degrees

Spec of that pizza oven and the G3 Ferrari is the same.