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

[geordie_lurch]

Anecdotal but since the kids went back around 8th March online sales have dropped 20% across several non food sectors I am aware of and not picking back up. Anyone else in any such sectors or others and notices things slow down a fair bit the last few weeks?

[Barnsey]

25 minutes ago, DurhamBorn said:

I take it they are dollar loans Barnsey?.Looks like the government has been using the dollars in the private banks to prop up the currency.Nice fat dose of inflation heading their way now.

Some, but mainly euros I believe. BBVA by far the most exposed. Forgot to mention ING exposed too.

[DurhamBorn]

@Cattle Prod i think the above will be a huge part of the cycle.From investing, like you say India is getting exposed and i think they will lean on Bp more.Boris going to India first is a big sign.I also expect BAE and others to gain from this.

Its incredible to think where the sentiment and narrative is right now on carbon energy.

The market will likely whipsaw out as many as possible in the stocks,and i suspect that process is nearly over outside of a BK.Then they will move up hard and fast making sure people dont get a chance to get back onboard.

 

[Sugarlips]

Istanbul stock market down 9% 🤔

[JMD]

2 hours ago, Cattle Prod said:

For 'may' read 'is':

China May Be Taking Rebranded Iran Oil Amid Increased Scrutiny (msn.com)

They're sticking 'Pumped in Iraq' labels on it. This why the Iranians are in no hurry to do a deal with Biden, they are selling their oil anyway. They'd prefer it wasn'd discounted, and they'd prefer to be paid in dollars, but they're not desperate. Good to see this in the MSM, it means politicans can't turn a blind eye anymore. The Chinese must be laughing their holes off at us.

Saudi Aramco to prioritise energy supply to China for 50 years, says CEO | Reuters

A while back I wrote about how strategically exposed China was to oil. That they had Iran sewn up, but needed more. That they'd be competing with India and eventually the US in the Middle East for supplies. I thought they might have to lock up Iraq, but the seem to have got a lever into Saudi too. Saudi has been the US ally for decades, this is potentially an important signpost, 'priority' is a strong word. It's very likely because of Biden's snub to MbS, who likely ran straight to China. Biden (meaning his administration, the poor man is clearly not all there is simply an avatar for a rebadged Obama admin). This administration genuinely doesn't think it needs Saudi oil, and is in for a rude awakening. Meanwhile, India is shouting from the sidelines about prices, but there is nothing they can do about it. Either they compete, or stagnate.

 

Scary stuff! But events are playing out as predicted by the thread, re China oil. I always wondered why Trump went dancing (literally!!) in Saudi after hed taken office, looked so out of character, but they (presidents) are all stooges of US foreign/security policy are they not?                                                                               As for Biden, he has been in office 2 months but has effectively become the 'Man (President) who wasn't there'? What are the bookies odds for Kamala Harris taking over this year I wonder?, notice she too is being rather silent, 'avoiding' difficult questions perhaps?                                                                                                        ...so might these US domestic and US foreign policy 'unravellings' be the 'coincidental' timing for the BK?

[Bricormortis]

19 hours ago, Harley said:

And someone (I have a few candidates!) to say "let them eat cake", the more modern saying more likely to be something along the lines of "let them ride bicycles" or "let them wear jumpers"!  Plenty of other candidates. 

Let them eat insects......do keep up at the back sonny.

[BoSon]

22 hours ago, Calcutta said:

Spent some time living in a slum, the differences between here and there are vast, but eroding. 

The real indicator I'm looking for is when it becomes standard for people to burn our rubbish rather than leave it for the council to pick up. 

 

In cornwall the council takes it to the local incinerator to generate leccy instead of landfill. We have to take other stuff to the local recycling, so maybe they'll say we need to take our rubbish to the incinerator instead of them coming around for us. Will still have to pay ever increasing council tax though.

Suez £141 million incinerator in Cornwall has not generated any electricity since June

Built and run by a french company. Exporting the profits. Seems the government wasn't happy just privatising the infrastructure, they decided to sell it off to foreign entities too. I suppose if there is a conflict it will be harder for those foreigners to do anything about it, if the government confiscates it all back, but then where will they get the expertise to keep it all running and building replacements when it reaches end of life. Maybe they'll bring in rules about requiring a certiain percentage of locals in the team like some want in the premier league footy that is owned, managed, and played by mostly foreigners.

When the UK is a shell company owned by the rest of the world will its population be just the worker slaves, and how close to that are we already?

[JMD]

1 hour ago, DurhamBorn said:

@Cattle Prod i think the above will be a huge part of the cycle.From investing, like you say India is getting exposed and i think they will lean on Bp more.Boris going to India first is a big sign.I also expect BAE and others to gain from this.

Its incredible to think where the sentiment and narrative is right now on carbon energy.

The market will likely whipsaw out as many as possible in the stocks,and i suspect that process is nearly over outside of a BK.Then they will move up hard and fast making sure people dont get a chance to get back onboard.

 

DB, I recall you mentioning some time back that Japan and India will/are forming closer relations. And  that maybe Japan will even become the conduit/political/economic spur (along with covert US backing) for India to really start ramping up political/military tensions with China.                                                                                           With the post covid Chinese economy going for broke compared to us in the locked-down West, I am now very intrigued how this may now actually begin to play out. I wonder are there other sources where I can read more about this Japan/India 'meld'? 

[StrugglingMillennial]

Thinking of topping my physical silver holdings with some coins.

Does it matter that much if its britannias or maple leafs? Quite a price difference between the two.

[Loki]

Just now, StrugglingMillennial said:

Thinking of topping my physical silver holdings with some coins.

Does it matter that much if its britannias or maple leafs? Quite a price difference between the two.

I hold both. Very briefly abridged my plan is to sell the ML up to CGT limit then the Brits

[Hancock]

2 hours ago, Sugarlips said:

Istanbul stock market down 9% 🤔

Good time to buy Tupras and one or 2 others.

[Castlevania]

6 minutes ago, Hancock said:

Good time to buy Tupras and one or 2 others.

Tupras?

[Harley]

2 hours ago, Bricormortis said:

Let them eat insects......do keep up at the back sonny.

Funny, I nearly mentioned them but the list could have got out of hand.  A depressing number of possibles highlighting how out of touch "they" are!

[Hancock]

3 minutes ago, Castlevania said:

Tupras?

Energy company
https://www.tupras.com.tr/en/default

[Harley]

2 hours ago, Sugarlips said:

Istanbul stock market down 9% 🤔

Hopeful as the good stocks went overvalued a few months back and nothing has popped up since. 

[ThoughtCriminal]

Well I guess he's about to find out if he's right 🤔😆

[ThoughtCriminal]

Well I've discovered why the price of polythene is through the roof, worldwide shortage of one of the main chemicals used in its production. 

 

Supplier said to expect even more price increases. 😳

 

It's already up over 35% in a year! 

 

Adds to the feeling there's lots of shit going on behind the scenes. 

[JMD]

This site is interesting -               https://marathonresourceadvisors.com/                                                              ... in particular they have their '2021 take ahead for natural resources' pdf download located near bottom of web page, which broadly supports this thread in the macro. I haven't read all of it yet, but I do notice they depart from this thread in one very noticeable way - they don't particularly like the big oil cos, and instead they favour the oil/gas royalty sector. I have mentioned these royalty cos before but not in regard to this money manager (so I personally thought it interesting that same topic was appearing in difference sources). Btw I own lot of the energy companies we talk about here, but I also  think other/contrarian views are valuable to hear about. I would be interested in what others here think after reading the pdf, if they have time to do so that is, pdf is quite long but it does also go into some interesting macro also.

[working woman]

On 21/03/2021 at 16:49, Harley said:

"let them eat cake",........ the more modern saying more likely to be something along the lines of "let them ride bicycles" or "let them wear jumpers"!  Plenty of other candidates. 

I think "let them holiday at home". 

Many people are going to be really upset if they can't go on holiday to Europe this year.

Several people I know have booked themselves on flights, holidays, cruises and weddings abroad.

[Hancock]

59 minutes ago, working woman said:

I think "let them holiday at home". 

Many people are going to be really upset if they can't go on holiday to Europe this year.

Several people I know have booked themselves on flights, holidays, cruises and weddings abroad.

If they book a dental appointment at their destination they'll tick the travelling for a medical box.

[DurhamBorn]

7 hours ago, JMD said:

DB, I recall you mentioning some time back that Japan and India will/are forming closer relations. And  that maybe Japan will even become the conduit/political/economic spur (along with covert US backing) for India to really start ramping up political/military tensions with China.                                                                                           With the post covid Chinese economy going for broke compared to us in the locked-down West, I am now very intrigued how this may now actually begin to play out. I wonder are there other sources where I can read more about this Japan/India 'meld'? 

Quadrilateral Security Dialogue is the term the diplomats are using for it.

https://www.americansecurityproject.org/possible-results-of-the-quadrilateral-security-dialogue/

[sancho panza]

On 19/03/2021 at 02:37, JMD said:

Thanks SP, yes I bought my PM's, oil, telecoms, at low prices so personally I will be looking to only trim some profits and park that cash along with my existing cash pile. My portfolio will then be 30% cash waiting to pounce on cheap stocks after BK. Similar to Kibuc's thinking ref junior Silvie's, I may if we get more run up, sell most/all of my silver+gold juniors because these will be viewed as highly speculative and so I think that asset class will be heavily sold during a BK. So I have a rather basic plan and the only risk element will be exiting the juniors, in order to hopefully buy back in cheaper. Oh and sitting in cash/suffering opportunity costs? However I am very grateful to this thread for the valuable discussions and info that have allowed me to buy most of my portfolio at low prices, this has meant that I don't need to take big risks (ie hopefully I have already bought my oil, telecoms at/near their all time lows?).                                                                                                     The difficult bit for me is what to do with my commodity stocks, copper, potash, etc. I bought mine, due to lack of funds, only after they had started their bull run. Commodities are the type of asset that will continue to do well the other side of any BK. But even so I am tempted to sell 50% and look to buy back in when/if cheaper. I'm thinking BK liquidity/forced selling may hit the commodity/mining sector hardest, because investors will favour their income/divi stocks. Do others here have own ideas on which sectors might do better/worst than other sectors during a BK scenario?

Expand  

The key concept I think you're hitting on there JMD is to introduce some leverage plays to your portfolio.The juniors as @kibuc says (and he knows) you jsut won't get a bid in a down market.

However you introduce that leverage is a metter of your risk reward but I think it's good to have some.

I would say generally,the price you paid for an investment is a key determinant to what will do best in a BK event.If you're in BP sub £3(like we now are) then I wouldn';t be sweating that psotion.

A lot of teh stocks discussed on ehre are alreayd good value.

On 19/03/2021 at 12:20, Cattle Prod said:

Doing a SIPP tidy, and BT has somehow grown to my second biggest holding at 7.68%...how did that happen, @sancho panza?! Need a trim already though it's barely off the lows on a monthly chart.

It's a had a ncie run.We only got a 1% psotion.I'm jsut prepping teh coma scores but both BT and Vod year end is Mar 31 so could be a while yet.

Ideally,would have preferred a 2%-3% position but it wasn't to be.,We may get anotehr bite but I think the days of £1 BT are gone.

On 19/03/2021 at 15:24, Bobthebuilder said:

I am out working again, self-employed tradesman. Seems to be a bunch of people happy to sit at home wanting government hand outs and another lot who have decided just to get on with it.

A lot of the people sat at home either have a nice inflation proof income from the people out working or they have no plan B.

I dealt with a stabbing during a shift a few days back.When the furlough ends,I really think the lid is going to come off.Lot of bad boys are going to come out settling scores and alot of otehr people are going to be desperate in any number of ways.

Sad times are coming I think

[Bobthebuilder]

5 minutes ago, sancho panza said:

I dealt with a stabbing during a shift a few days back.

I really enjoy your posts, always informative. Just wanted to say I really respect what you and your fellow medics do. Thank you sir, really appreciated

 

9 minutes ago, sancho panza said:

When the furlough ends,I really think the lid is going to come off.Lot of bad boys are going to come out settling scores and alot of otehr people are going to be desperate in any number of ways.

I've noticed a change in my neck of the woods. Fast food delivery now all London boys, noticed a few street fights.

Had a chat with a customer that does online credit card fraud. Massive up of course but, he said it's all petty crims that cannot do their usual at present.

 

[Loki]

23 minutes ago, Bobthebuilder said:

Had a chat with a customer that does online credit card fraud

That's very honest of them I have to say.

[Bobthebuilder]

Just now, Loki said:

That's very honest of them I have to say.

Down to my usual poor grammar I'm afraid.