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

[Bear Hug]

7 hours ago, JMD said:

The great Felix Zulauf. Brilliant description of our 'new normal' economic paradigm. Well worth the hour listen.

This is great. Last 3 minutes provide a summary roadmap for this yeae. Mostly consistent with David Hunter. 

[CVG]

15 minutes ago, Loki said:

All looks fine for me on the app

I just logged back in and everything is back to normal! Luckily I took a screenshot to prove that I wasn't going mad.

This is great preparation for how you will feel after the BK. It's just that I was anticipating 80% - not 97%. It is also good to know that my punt on AT&T was indeed the correct choice!

[jamtomorrow]

46 minutes ago, CVG said:

Quick shout. Does anyone have a HL ISA? I just did a routine check and my account shows most of my Share positions closed down to about £20 each!!! An apparent loss of £XX K. Transaction history doesn't reflect that so it must be a software glitch. Anyone else?

HL is an absolute f***ing joke. The statements are so opaque, the only way to check they haven't siphoned anything off is to run a complete set of records yourself. Which shouldn't be necessary.

IWeb much better in that regard, but unfortunately goes to sh*t in a hot market

[CVG]

Just now, jamtomorrow said:

HL is an absolute f***ing joke. The statements are so opaque, the only way to check they haven't siphoned anything off is to run a complete set of records yourself. Which shouldn't be necessary.

IWeb much better in that regard, but unfortunately goes to sh*t in a hot market

I gave them a call to make sure that they were on top of things. Apparently it was a currency conversion issue! That's not an entirely satisfactory answer given that some foreign currency stocks were unaffected, e.g. AT&T. So they probably just don't know. It's probably just the kids playing with Agile again.

[Bricks & Mortar]

8 minutes ago, CVG said:

I just logged back in and everything is back to normal! Luckily I took a screenshot to prove that I wasn't going mad.

This is great preparation for how you will feel after the BK. It's just that I was anticipating 80% - not 97%. It is also good to know that my punt on AT&T was indeed the correct choice!

I've noticed that, every day, for about an hour after the close, the numbers on the screen are complete garbage.   They seem to be okay up to the close, then totally unreliable for about an hour afterward.  Possible that some of the numbers in that hour reflect the opening prices rather than closing, but I haven't nailed wtf is going on. 
I've learned to take my dinner about that time.

[M S E Refugee]

What do people think of Cement Producers in the coming reflation cycle?

I am building a position in Steppe Cement at the moment and I also like LafargeHolcim.

[DurhamBorn]

48 minutes ago, CVG said:

I just logged back in and everything is back to normal! Luckily I took a screenshot to prove that I wasn't going mad.

This is great preparation for how you will feel after the BK. It's just that I was anticipating 80% - not 97%. It is also good to know that my punt on AT&T was indeed the correct choice!

At least the Telcos held up for us 

[feed]

9 hours ago, JMD said:

Overall I agree with that sentiment. But my thoughts are I don't think hard money and democracy need be incompatible. If the US (I know it's a republic, not a democracy), but if its founding fathers had stipulated hard money in their constitution then the country would still have its gold standard... Maybe it's (so called) democracies (whatever they are?) and constitutions that are incompatible!? - I'm serious, 'democracy' is a very nebulous concept. Instead, It is the settled rules and constraints that are the decisive factors. 'Democracy' im afraid is a political weapon of mass distraction!                                                                                                           Property rights, rule of law, (the rights/freedoms eventually codified within) The English bill of rights, covers most of what's needed. Hard code all these things on the Blockchain and youd have something epic!! 

if you go back to the founding fathers it's not democracy.  Because slavery.  

But, i think you need to look at Napiers point about when we really got democracy. The post war era.

Obviously 71 is key, but it was a result of 44, it was inevitable.  The demand on dollars would always overwhelm it. Keynes said as much in 43 i think.  44 was politically expedient at the time, the US was half of the worlds GDP, but it started us down the road of soft currencies.  

i don't know if the world needed democracy after the horrors of the wars and soft currencies were an answer, or it was all a series of unintended consequences after the US took on the roll of the reserve currency.  

but, as always there is that elephant in the room for the late 20th that comes into play. 

Oil.

The anthropologists have a theory, and i'm grossly over simplifying it here, it goes cultural complexity increases with the availability of energy. Such that the greater the abundance of cheap energy the more complex a societies culture will be. 

The US has had more or less free energy for the last 50 years, due to it's reserve status, soft currencies and it's hegemonic dominance.  Democracy and the cult of the individual is an incredible complex and diverse culture. Very difficult to maintain without an abundance. It's a culture that may influence the globe, but certainly isn't universal.  Good luck trying to find trans-waffle in sub Saharan Africa.  

There is a relationship, between cheap energy, soft currencies and cultural complicity & democracies.  I have no idea how they are linked, what leads what or how they move or align.  But, fiat is in it's death throws, energy is about to get much more expensive - which i think leads us back to where most of humanity has existed.

Homogeneous, hard currency controlled societies. And most human societies have been feudalistic some sense, we are hierarchical animals.  Only this time we've developed technologies for control beyond the comprehension of our ancestors. 

And i don't think crypto's are the answer, it's availability is just as much a function of energy, maybe even more so.  And even it is the basis for a hard currency, then it's the owners setting the rules, a new elite, which isn't democracy.  

But these are just my half formed thoughts.  More than happy for someone to explain why it's utter nonsense.   
 

[Bricormortis]

 the Felix Zulauf video posted by JMD above prompted me to have a quick look at Korean ETF's available on the HL website. I thought I would post the top 10 holdings of the following ETF for anyone interested. I dont know why Samsung  are listed twice., some co's I have never heard of on that list also.

Says on the blurb they engage in securities lending, so that sounds totally iffy in the current environment, but the list of stocks is useful for anyone who has the research skills.

 

HSBC ETFS PLC KOREA CAPPED UCITS ETF USD (GBP) (HKOR)

SAMSUNG ELECTRONICS CO27.43%

SK HYNIX INC5.80%

SAMSUNG ELECTRONICS CO4.29%

NAVER CORP3.78%

LG CHEM3.72%

SAMSUNG SDI3.65%

HYUNDAI MOTOR CO3.09%

CELLTRION INC2.79%

KAKAO CORP2.27%

KIA MOTORS CORP2.01%

[DoINeedOne]

10 hours ago, JMD said:

The great Felix Zulauf. Brilliant description of our 'new normal' economic paradigm. Well worth the hour listen.

Just sat and watched this, Great video 

[ONC]

Telcos having no problems hiking prices (as predicted by DB)

From dailymail,  “Telcom giants all hike broadband cost at same time”

https://www.dailymail.co.uk/money/bills/article-9450269/Broadband-prices-rise-Heres-cheaper-deal.html

[Harley]

On 08/04/2021 at 20:43, DurhamBorn said:

Telefonica SA Brazil ADR and TIM SA ADR are the two to concentrate on ,not buying advice etc.Tickers VIV and TIMB

Not buying advice but TIMB looks interesting.  PITA regarding yield as each data source gives another figure for both the US ADR and the underlying.  One source gives 4.33% for the US ADR while another source has it as 2.74%.  Also comparing financials on the ADR to the underlying on the Brazil exchange is messy.  For example, the ADR shows flat OCF but the underlying shows a nice YOY increase.  Is that all just down to currency effects?

[Harley]

2 hours ago, M S E Refugee said:

What do people think of Cement Producers in the coming reflation cycle?

I am building a position in Steppe Cement at the moment and I also like LafargeHolcim.

I likee.  Have/had some Chinese, etc ones.  Might be seeing some new action on the monthlies.  Last I looked the European ones were expensive.

[Harley]

2 hours ago, CVG said:

I just logged back in and everything is back to normal! Luckily I took a screenshot to prove that I wasn't going mad.

This is great preparation for how you will feel after the BK. It's just that I was anticipating 80% - not 97%. It is also good to know that my punt on AT&T was indeed the correct choice!

At least TradingView seemed to have sorted out their sh*te and are now showing the correct data on their charts!

[jamtomorrow]

2 hours ago, M S E Refugee said:

What do people think of Cement Producers in the coming reflation cycle?

I am building a position in Steppe Cement at the moment and I also like LafargeHolcim.

I really fancy basic building materials for a fiscal inflation - governments love civil engineering projects, Biden's infrastructure stimulus is only the start.

I already own CRH, and Heidelberg and Lafarge are on my BK shopping list. Maybe something like Breedon if you fancy an AIM flutter.

[Harley]

Just listened to:

I've always liked Mr Faber but never subscribed.  Is his newsletter worth the $300 pa?  I've seen some very old ones and looks quite well written.  I'll ask for a more recent sample.  He is looking and sounding a bit older these days which is sad to see.  My world is changing around me!

In summary on this one:

. TLT 10 year UST may turn up soon

. PM miners same

. PMs, gold and platinum same but BTC impacting gold (watch out if BTC falls)

. Per Napier, think about diversifying assets across juristictions

 

[Harley]

12 minutes ago, jamtomorrow said:

I really fancy basic building materials for a fiscal inflation - governments love civil engineering projects, Biden's infrastructure stimulus is only the start.

I already own CRH, and Heidelberg and Lafarge are on my BK shopping list. Maybe something like Breedon if you fancy an AIM flutter.

Many have done well in the last year and are in the overbought zone on the monthlies.  But they have just entered that zone and could go higher if they break longer term resistance.  For example, LHN is up 56% for 1Y and now back at its 2017 high which is a long term support/resistance level.  Like many other stocks in this situation their MACDs have not moved much so maybe further to run?  LHN yield is currently 3.53% which is not bad (but WHT is 35%?).

[BWW]

Who else here is holding KAZ [copper FTSE]?

Friday the kaz oligarchs announced they have 82% so it will delist in May.

Choice is become a private shareholder [in bed with oligarchs - I think not for me], accept the offer of 850 [AFAIK that will again become available] or sell on open market, afaik - anyoone confirm ?... closed Fri at 868.

I have ca 15k, it owes me 12 [already took 3 profit in an isa so tax free yay]. Don't think I want to hold even though I suspect its worth 25-40k. Sell now or hold on a bit for other would be private investors to bid it up?

Am inclined now to exit but maybe wait until end week if my above list of choices is correct.

[leonardratso]

18 minutes ago, BWW said:

Who else here is holding KAZ [copper FTSE]?

Friday the kaz oligarchs announced they have 82% so it will delist in May.

Choice is become a private shareholder [in bed with oligarchs - I think not for me], accept the offer of 850 [AFAIK that will again become available] or sell on open market, afaik - anyoone confirm ?... closed Fri at 868.

I have ca 15k, it owes me 12 [already took 3 profit in an isa so tax free yay]. Don't think I want to hold even though I suspect its worth 25-40k. Sell now or hold on a bit for other would be private investors to bid it up?

Am inclined now to exit but maybe wait until end week if my above list of choices is correct.

yeah ive got a small amount of them, its up 25% as of friday, isnt it 868 at the mo cos they are offering 850+some special divi, i did know when they offered it via a corporate action but i didnt vote on it, i might flog it off next week i reckon - have to take it out of my regular buys now as well, pah, was hoping their takeover would fail or someone else would pip them and cause a bidding war, theyll probably get it now.

[DurhamBorn]

3 hours ago, Harley said:

Not buying advice but TIMB looks interesting.  PITA regarding yield as each data source gives another figure for both the US ADR and the underlying.  One source gives 4.33% for the US ADR while another source has it as 2.74%.  Also comparing financials on the ADR to the underlying on the Brazil exchange is messy.  For example, the ADR shows flat OCF but the underlying shows a nice YOY increase.  Is that all just down to currency effects?

Currency and the way they declare divis,they are yielding 5% on the ADR at the moment i think,Telefonica about 7%.

TIMB have net cash,no debts,i think Telefonica is the same.They are using the cash to buy Oi Groups mobile business.Iv been buying both heavily.I bought some Card Factory at 33p they got sold last week,that went into TIMB and i sliced a few other companies.I want a few more of both,but iv set two ladders rather than simply buy all at these levels.

I think the whole industry outside of the US is structurally undervalued.

[Barnsey]

 

[JMD]

6 hours ago, feed said:

if you go back to the founding fathers it's not democracy.  Because slavery.  

But, i think you need to look at Napiers point about when we really got democracy. The post war era.

Obviously 71 is key, but it was a result of 44, it was inevitable.  The demand on dollars would always overwhelm it. Keynes said as much in 43 i think.  44 was politically expedient at the time, the US was half of the worlds GDP, but it started us down the road of soft currencies.  

i don't know if the world needed democracy after the horrors of the wars and soft currencies were an answer, or it was all a series of unintended consequences after the US took on the roll of the reserve currency.  

but, as always there is that elephant in the room for the late 20th that comes into play. 

Oil.

The anthropologists have a theory, and i'm grossly over simplifying it here, it goes cultural complexity increases with the availability of energy. Such that the greater the abundance of cheap energy the more complex a societies culture will be. 

The US has had more or less free energy for the last 50 years, due to it's reserve status, soft currencies and it's hegemonic dominance.  Democracy and the cult of the individual is an incredible complex and diverse culture. Very difficult to maintain without an abundance. It's a culture that may influence the globe, but certainly isn't universal.  Good luck trying to find trans-waffle in sub Saharan Africa.  

There is a relationship, between cheap energy, soft currencies and cultural complicity & democracies.  I have no idea how they are linked, what leads what or how they move or align.  But, fiat is in it's death throws, energy is about to get much more expensive - which i think leads us back to where most of humanity has existed.

Homogeneous, hard currency controlled societies. And most human societies have been feudalistic some sense, we are hierarchical animals.  Only this time we've developed technologies for control beyond the comprehension of our ancestors. 

And i don't think crypto's are the answer, it's availability is just as much a function of energy, maybe even more so.  And even it is the basis for a hard currency, then it's the owners setting the rules, a new elite, which isn't democracy.  

But these are just my half formed thoughts.  More than happy for someone to explain why it's utter nonsense.   
 

You say '...not democracy. Because slavery.' (!!!) Well yes, my whole issue with democracy is that it is a busted flush, but not because of that unsavoury slavery point you make btw. Politicians love to talk about extending the franchise, it's all so meaningless imo. Anyway thanks for your response, but discussion obviously not for this thread.

[DurhamBorn]

To save democracy longer term they need to abolish the welfare state and replace with a Universal Basis Income alongside a land value tax.It needs to be set lower than welfare benefits now so that you can only live a very frugal living on it.The thing that stops it coming in is housing.To counter that the state needs to build lots more housing with shared facilities.The state should pay zero rent to private landlords.

The state is making people poor by choosing who it gives resources too.An example only today.My neighbour has retired from the police,looks very young,55? and has used a pension lump sum to give his daughter a 50% deposit on a house.He will be getting a massive tax payer funded pension now.

If your ordinary and dont work for the state,or get welfare from it you have little chance of getting on.

[Harley]

2 hours ago, Barnsey said:

 

I think she's right.  Both demand and supply point to higher prices in the immediate term. These tend to be very sticky going down so I expect them to more or less stay at their new level or rise and margins to increase via cost reduction and any fall(?) in material prices.  Reminds me of Germany moving to the Euro when there was one big hit in higher prices.

Many companies have marginal lines of business, plus we have the zombies who are susceptible to a solvency crisis which is highly likely despite all the liquidity. The winners will have pricing power and the focus may be on the quality of earnings.  Then we've had so much hidden inflation such as shrinkflation this is a time to rebase prices.  Too good an opportunity.

I guess their hope is we have a rebase, a plateau in prices, and then the inflation falls out the numbers over time.  Even then, if so, everyone will take another, more concentrated cut in living standards, unless they finally have labour power for some reason, but too much WFH makes people's jobs more vulnerable. 

I see no real growth, just like the past few decades, without a war and/or other form of destruction.  This means increasing poverty, as has been the case for a while now, with certain sections of society taking an increasing size of the pie to compensate and increasing authoritarianism to make this possible.  A phoney war on say climate change or a pandemic to me mirrors the Nazi regime building all those autobahns, etc which gave a fake boost but ultimately had to be paid for by Lebensraum and war.

Now deflation in asset prices is a whole other story and I can't see the discounted value of future earnings (their absolute value and the discount factor used) being helpful, plus money will be needed by all to live and by the increasing number of retired and unemployed.  There's always some action though but you'll need to be active not passive once this melt up finishes and the fire brigade has gone home.  

Just my going in assumptions and the basis on which I'll proceed.  Portfolio wise, for me this is a time to get asset allocations nailed down.

[feed]

Lyn today

 

Talks about the inflation vs deflation at around the 41 minute mark, if you don't time for the full hour.

But worth the time as always