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

[JMD]

36 minutes ago, sancho panza said:

Corss post from Sceptics thread.

No wonder Rishi is getting nervous.....reality beginning to dawn.

https://www.dailymail.co.uk/news/article-9682829/Company-closures-spark-fears-surge-Covid-loans-fraud.html

Fears are growing that thousands of Covid loans were fraudulently claimed and will never be returned to the taxpayer.

Experts issued the warning after the number of companies being shut down rocketed.

Figures show that in the first three months of this year almost 40,000 firms were 'struck off', a rise of 743 per cent on the same period of last year.

Many legitimate firms have been forced to close during the pandemic, particularly smaller ones.

But there are now worries that thousands of others deliberately stopped trading so they could be struck off and avoid repaying their loans.

This could add millions of pounds of bad loans to banks' books.

Around £22billion is estimated to have been handed out through the BBLS, which was thought to be the most vulnerable scheme.

It provided up to £50,000 to small firms, with most cash going to companies with fewer than ten employees. The Government has underwritten 80 per cent of all CBILS loans and 100 per cent of BBLS lending – though banks will probably need to exhaust all their options before asking the taxpayer.

When the market crashed last March 2020 i had a very sizeable amount invested via P2P companies. I was really concerned that my exposure to SME's, etc, would mean me losing lots of capitol. Happily, but rather curiously - and probably mostly due to the government backed Rishi 'recovery loan' scheme - i managed to withdraw all my money, though it was a very slow process. Thing is some of my loans were even repaid early which i mentioned on here, as it chimed with the stories about personal CC's being paid off. Plus last year was actually my lowest year in terms of loan defaults, and i've been in P2P for 10 years... go figure?

I was obviously 'lucky' to have escaped that particular 'bear' trap. And with that luck, last September time i chucked the lot into BTC!?! Anyway, just meant as full disclosure, and shows what kind of 'investor' i am!.. I do think that calculated risks are a good thing, but we shall see how it all turns out.

[sancho panza]

Shell beginning to claw it's way back to the peloton......

going back a year the underperformers since the turn look reasonable value.

decl-long all except EQNR

[JMD]

1 hour ago, Cattle Prod said:

Think us basement dwellers called this one about a year ago. Energy substitution:

Important as this topic is... Whenever the subject of road stats/traffic policy come up - my mind frequently wanders to a Mad Max dystopian vision of the future... along with 'Barter-Town', where silver coins, cigarettes, unopened lego-sets and even pizza recipes(?) are traded!!

...but the question remains, who is Master Blaster? 

 

[Lightscribe]

https://www.hl.co.uk/shares/shares-search-results/BM90KT3
 

So whats the reckoning on this ETF fund for a hydrogen play?

Got a few names in it that I wanted to add to the portfolio anyway.

TOP 10 CONSTITUENTS (%)

Linde 4.7

Kolon Industries 4.7

Daimler 4.6

Chemours 4.6

Air Products & Chemicals 4.6

Johnson Matthey 4.5

Cummins 4.5

Air Liquide 4.2

Siemens 4.2

Uniper 4.1

https://fundcentres.lgim.com/uk/professional/fund-centre/ETF/Hydrogen-Economy/

https://fundcentres.lgim.com/srp/lit/71rvAp/Fact-sheet_LG-Hydrogen-Economy-UCITS-ETF-Hydrogen-Economy-UCITS-ETF-USD-Acc_30-04-2021_Multi-Audience.pdf

 

[Lightscribe]

1 hour ago, JMD said:

Important as this topic is... Whenever the subject of road stats/traffic policy come up - my mind frequently wanders to a Mad Max dystopian vision of the future... along with 'Barter-Town', where silver coins, cigarettes, unopened lego-sets and even pizza recipes(?) are traded!!

...but the question remains, who is Master Blaster? 

 

We’ll I’ve already got my rag-tag gothic steam punk ‘precious metal trader’ outfit sorted out thanks, I’ve bought some of these to wear about the house in preparation.

[janch]

4 hours ago, wherebee said:

If any of my kids go greenie, they lose their internet and phones, and they get no aircon in the summer.  I've already decided that's a good way to show them that choices have consequences.

It's a lost cause for me as mine are all out in the big wide world and two of them are now working in the "green" area.  Actually one of them has earned well for several years and is now a consultant to help companies go "green" and there's apparently plenty of work in this area so it's not all bad.

I tend to keep my views to myself as they have been thoroughly brain-washed by the state but if I pop my clogs and they get to see where my money is invested they will be shocked to see how much is in the oilies.

[nirvana]

hot tip for you guys 

https://www.mosmanoilandgas.com/announcements/£15m-placing-completed-helium-hydrogen-and-hydrocarbon-exploration-ep-145-and-update

[sancho panza]

@Cattle Prod,is this the one you mean? ref Eric Nuttall?

https://uk.finance.yahoo.com/quote/NNRG.NE/holdings?p=NNRG.NE

They'll be some happy campers in the basement dweller trenches today....my wind reader tells me to  we might be headed to 80 on Brent

 

[Hardhat]

36 minutes ago, sancho panza said:

They'll be some happy campers in the basement dweller trenches today....my wind reader tells me to  we might be headed to 80 on Brent

Just need RDSB to catch up with the rest...

I'm nicely in profit on BP and Repsol, 30% up on each now.

[goldbug9999]

6 hours ago, sancho panza said:

But there are now worries that thousands of others deliberately stopped trading so they could be struck off and avoid repaying their loans.

And why wouldnt you ? I mean if the gov is handing out free money ...

[AWW]

Family member works for a bank that offers bounce back loans. They reckon about 60% of them were fraudulent, but will of course be made whole by the taxpayer. £50k is a very nice house in a lot of eastern Europe. Plenty took the money and ran, with no intention of ever coming back to the UK.

[Jesus Wept]

3 hours ago, Hardhat said:

Just need RDSB to catch up with the rest...

I'm nicely in profit on BP and Repsol, 30% up on each now.

My RDSB is up 45%.

BP up 30%
 

I should have bought more….

 

[Siggy]

1 hour ago, AWW said:

Family member works for a bank that offers bounce back loans. They reckon about 60% of them were fraudulent, but will of course be made whole by the taxpayer. £50k is a very nice house in a lot of eastern Europe. Plenty took the money and ran, with no intention of ever coming back to the UK.

If they stick to that then that's actually 50k very well spent!

[sancho panza]

4 hours ago, Cattle Prod said:

That's his fund yes, but I think he's put an EFT for the plebs too with the same picks, I haven't sought it out. Congrats on all the green, you've had strong hands throughout.

We've had good teachers on here, @DurhamBorn on the liquidity side and yourself on the demand/supply side.Which sort of links in to the stuff below re bond yields and inflation and DB's oft repeated warnings that 60/40 funds will get hosed in a few years if inflation kciks in.

Things are really out of whack in credit markets.Junk bond yields at record lows.It's insane out there.

 

Lyn Alden said the following

'This time last year, for example, 5-year inflation breakevens were less than 1% and the 5-year Treasury note was yielding under 0.35%. During the one year since then, the consumer price index already rose by 5%. This means that inflation as officially measured already more than outpaced all five years of interest that the 5-year notes issued at that time will pay until maturity. We would need to see a significant period of outright deflation for those notes to avoid losing purchasing power by the time they mature.

Keep that in mind when it comes to the topic of the bond market being “smart money”; in reality the bond market is solving for multiple variables including collateral shortages; not necessarily trying to accurately predict inflation. This is especially true with the Fed as by far the biggest buyer and with the TGA drawdown occurring, meaning there is very little net Treasury supply for the private market to buy.

It won’t be too long, only a quarter or two from now, until 10-year Treasury notes bought in mid-2020 have their entire ten years’ worth of coupons outpaced by the increase in CPI as well. Think about that: ten years of coupons outpaced maybe 16 months into the Treasury’s existence by price inflation. At that point, nothing short of a major period of deflation would make that note whole in real terms.

In other words, Treasuries make for good collateral in financial markets but their yields are not necessarily a good gauge of forward inflation, especially in this type of environment. So, when you see an analyst say that the bond market “thinks inflation is transitory”, be aware of those limitations. The bond market can and sometimes does lose purchasing power.

https://wolfstreet.com/2021/06/11/surging-inflation-never-mind-junk-bond-yields-drop-to-record-lows-dishing-out-negative-real-yields-to-fed-whacked-investors/

[Animal Spirits]

7 hours ago, Cattle Prod said:

We have been ruled by diktat for the last year, and the majority of people support it. So yes, it's democratic in the sense that the majority happily have given up their freedoms and have accepted draconian intrusions to their daily lives. I think it has shown, quite clearly, that with a few behavioural psychologists and a decent fearmongering campain, the Carney stuff can and will happed. It's terrifying, frankly. I need to find a society where the majority aren't morons who vote me into slavery. Maybe Texas, or Denmark. Any other ideas?

@The Masked Tulip Posted this link on Saturday in the vaccine thread:

https://www.bitchute.com/video/RRr2aeDg50RZ/

[Transistor Man]

On 07/06/2021 at 10:16, Transistor Man said:

Would Sizewell C be cheaper if it was 4* 800 MW? Or 8 * 400 MW?

We don’t know. But the idea of the EPR reactor design is: no, it wouldn’t be. 

Its possible that the size is working against them. It’s a big reactor.

But I think they are really struggling on cost because it’s all new and they haven’t been building them.

 

Just looking at some problems with a Sizewell C type reactor in China on another thread.

I might have been wrong!

Hopefully RR are going to hit the sweet-spot.

 

...EDF acknowledged the difficulties it was having building the EPR design, with its head of production and engineering, Hervé Machenaud, saying EDF had lost its dominant international position in design and construction of nuclear power stations. Machenaud indicated EDF was considering designing two new lower powered reactors, one with output of 1500 MWe and the other 1000 MWe. Machenaud stated there would be a period of reflection on the best way to improve the EPR design to lower its price and incorporate post-Fukushima safety improvements.

[wherebee]

Who thinks we're getting close to a point for a sale of some oilies?  The shootup in recent weeks has been notable.

I'm thinking of maybe selling all my BP as they seen most woke and fucked at the board level.

edit: up 48% inc divvies.

[Bobthebuilder]

37 minutes ago, wherebee said:

Who thinks we're getting close to a point for a sale of some oilies?  The shootup in recent weeks has been notable.

I'm thinking of maybe selling all my BP as they seen most woke and fucked at the board level.

edit: up 48% inc divvies.

I have  a similar feeling about Repsol, up 60% so far, what to do with it?

[JMD]

7 hours ago, Cattle Prod said:

That's his fund yes, but I think he's put an EFT for the plebs too with the same picks, I haven't sought it out. Congrats on all the green, you've had strong hands throughout.

Is this the Nuttal etf?  Any views on his top 10 holdings CP? Not asking for specific investment advise, rather just a summation of what that mix of stocks represents. They all appear to be Canadian small caps?                                                                                                                              https://www.ninepoint.com/funds/ninepoint-energy-fund/

[JMD]

10 hours ago, Lightscribe said:

https://www.hl.co.uk/shares/shares-search-results/BM90KT3
 

So whats the reckoning on this ETF fund for a hydrogen play?

Got a few names in it that I wanted to add to the portfolio anyway.

TOP 10 CONSTITUENTS (%)

Linde 4.7

Kolon Industries 4.7

Daimler 4.6

Chemours 4.6

Air Products & Chemicals 4.6

Johnson Matthey 4.5

Cummins 4.5

Air Liquide 4.2

Siemens 4.2

Uniper 4.1

https://fundcentres.lgim.com/uk/professional/fund-centre/ETF/Hydrogen-Economy/

https://fundcentres.lgim.com/srp/lit/71rvAp/Fact-sheet_LG-Hydrogen-Economy-UCITS-ETF-Hydrogen-Economy-UCITS-ETF-USD-Acc_30-04-2021_Multi-Audience.pdf

 

Looks good, though unfortunately I couldn't get the full list of stocks to open. Many of the top 10  holdings are on my watch list. I notice its a new etf which is interesting - I'm really begining to think there must be something to DBs idea of hydrogen being the next big thing!?! Legal and General are I think good managers and it's a physical etf which is also good, and so its 0.5% charge is reasonable.

[Sugarlips]

Still the right time to increase silver exposure by the looks of it:

https://goldsilver.com/blog/the-coming-reversal-in-the-silversp-500-ratio-will-be-shocking/

Only at the beginning of the new millennia has this ratio been lower than it is right now.

[spongeh]

7 hours ago, JMD said:

Looks good, though unfortunately I couldn't get the full list of stocks to open. Many of the top 10  holdings are on my watch list. I notice its a new etf which is interesting - I'm really begining to think there must be something to DBs idea of hydrogen being the next big thing!?! Legal and General are I think good managers and it's a physical etf which is also good, and so its 0.5% charge is reasonable.

JLR think there may be something in Hydrogen aswell.

https://www.autocar.co.uk/car-news/new-cars/jaguar-land-rover-test-fuel-cell-powertrains-within-year

We can't generate enough electricity, without building a load of new nukes, for millions of cars to be 100% electric. There is no chance the charging infrastructure could be expanded to cope with millions of electric cars either. 

[AWW]

Did the guy in the mustard t-shirt imply that wearing a mask was effectively an anti-racism protest for him? Leaving aside the fact that a protest is only useful if others realise that you're protesting, why does he think that breathing freely is a privelege? Truly eye opening stuff.

[geordie_lurch]

I think the following video posted by @Bus Stop Boxer in another thread touches on so many things a lot of the people in this thread are trying to prepare against but sadly might be missing at the much larger macro picture i.e. CBDCs and Blackrock and others buying masses of real estate

 

[DurhamBorn]

8 minutes ago, Cattle Prod said:

Can anyone explain to me why 10 year breakeven inflation rates have been dropping for the last month?!

Definition:

I guess it means that market participants currently expect inflation to have peaked, or is transitory? Strange, with the CPI numbers coming in the way they are, but markets are not rational I suppose. What could make them change their views...I suppose Powell's comments at FOMC.

 

They are going to get a classic head fake here.Inflation will move up to a new,higher base first,then it will stop increasing much for a window,a window that looks permanent,then it will enter a cycle long increase.The short end isnt pricing inflation its just being used to park liquidity.The Fed is fighting to keep it down as well to force money into investment instead as one policy aim.Key point is that when the 10 year is way below inflation government is getting more in tax than the debt is costing at some point and thats exactly what the Fed is trying to set in place.To remove or actually inject less liquidity the Fed needs the government to see receipts growing faster than spending so they stay solvent,at least in a Fiat system.

As people on the oilies il be holding all mine,the only one il sell is Shell,but not without another 15%+ on them