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

[CVG]

45 minutes ago, Loki said:

I'm thinking of topping up my National Grid holdings as the dividend is healthy and it's a reflation share.  Currently only down 8% from original purchase, so fits in with durhamborn's ladder strategy.  Any thoughts? 

On the plus side, I own it; it has returned me (XIRR) 10%, the broker consensus is Buy.

On the negative side, I own it; it has just paid it's Final dividend for the year; dividend cover is less than 1 suggesting a possible cut in future dividend; current ratio less than1 (liabilities > assets). 

[Loki]

4 minutes ago, CVG said:

On the plus side, I own it

On the negative side, I own it

I know that feeling!  Do you think the price will increase if divis are cut?

[CVG]

19 minutes ago, Loki said:

I know that feeling!  Do you think the price will increase if divis are cut?

I've given up guessing which way prices will move. Initial knee-jerk response would probably be a fall followed by a rise as the reduced dividend appears more sustainable.

[Loki]

15 minutes ago, CVG said:

I've given up guessing which way prices will move. Initial knee-jerk response would probably be a fall followed by a rise as the reduced dividend appears more sustainable.

Can't find fault with your reasoning - now if we could just get markets to be reasonable...

[Don Coglione]

2 hours ago, Loki said:

I'm thinking of topping up my National Grid holdings as the dividend is healthy and it's a reflation share.  Currently only down 8% from original purchase, so fits in with durhamborn's ladder strategy.  Any thoughts? 

Risk (albeit insignificant, in my opinion) of re-nationalisation under a future Commie Labour government?

[Loki]

3 minutes ago, Ponty Mython said:

Risk (albeit insignificant, in my opinion) of re-nationalisation under a future Commie Labour government?

I tend to agree with your post entirely, it's possible but very unlikely(?!)

[spygirl]

5 hours ago, kibuc said:

Whoops, reality check for markets living in Chinese deal la-la-land. 

Private payrolls 96k vs 150k forecast, last month revised down from 156k to 131k.

All nonfarm 130k vs 160k forecast, including 25k temporary hires for a decennial Census. 

 

Nope.

US has run out of employable.

Employers are fighting over ex cons, almost unheard of.

 

[Yellow_Reduced_Sticker]

21 hours ago, Cattle Prod said:

Agree the best time to buy is when you have to go cap in hand to the bank manager and beg him for a mortgage, as my Dad keeps reminding me.

Houses don't always cost all your money though, and shouldn't. I went for a modest house about 40% cheaper than I could afford as I wanted to be able to pay the mortgage if I got laid off and was working in Tesco stacking shelves. Which I've done before, and quite enjoyed!

 

@CP SERIOUSLY?

 

Reason i ask (i bet ya know what i going to ask...! )

 

At our Tesco the reductions are super CRAP these days, when i say crap i mean on the scoff thats on offer its the same 'ol same 'ol day in day out, NONE of their finest brand or good stuff etc, gets reduced, sure you get at times up to 70% off...

 

From chatting with my fellow scavengers there...the word is Tesco staff are getting the BEST quality reductions!

 

Anyway...back to my question, did ya get any deals on the yellow reduced sticker bargains?!

 

Cos i'm thinking about part-time with Tesco when i move to the SW, just to top up my pension, BUT of course the REAL reason is to get my grubby hands on those YRS!

 

Do let us know, Cheers!

 

BTW, with all the recent chat about property, theres a apartment complex just finished not to far from me, saw the prices in the local FREE rag, how much do ya think for a 3 bed (tiny shoebox rooms) APT in I'd say the WORST sh*t Town in the UK, on a busy road....

 

DRUM ROLL...

 

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£5K SHORT OF 1/2 A Million quid, ... WHO the feck has £495K for an APT and is going to buy 'em???

 

 

 

[DurhamBorn]

5 hours ago, Loki said:

I'm thinking of topping up my National Grid holdings as the dividend is healthy and it's a reflation share.  Currently only down 8% from original purchase, so fits in with durhamborn's ladder strategy.  Any thoughts? 

I prefer SSE to National Grid,or if you are prepared for a bit more risk Drax ,they have just bought some fantastic hydro assets in Scotland.Its tricky to know if electric will follow oil higher next cycle,but very likely it will do well.Not advice etc,just a couple to think about.

[Barnsey]

Another timely article about reflation policy ahead:

https://www.bloomberg.com/amp/opinion/articles/2019-08-13/bond-markets-are-begging-for-infrastructure-spending

[Loki]

1 hour ago, DurhamBorn said:

I prefer SSE to National Grid,or if you are prepared for a bit more risk Drax ,they have just bought some fantastic hydro assets in Scotland.Its tricky to know if electric will follow oil higher next cycle,but very likely it will do well.Not advice etc,just a couple to think about.

Thanks mate, duly noted.  Electric going big will need the reflation infrastructure investment you speak of, as the grid simply will not cope with more electric cars and carbon neutral nonsense for heating - in the beast from the east we were pulling over 45GW and we are at the start of a lowering solar output 

Nerd link http://www.gridwatch.templar.co.uk/

[DurhamBorn]

http://www.morningstar.co.uk/uk/news/AN_1567791950624737500/tate--lyle-to-hike-some-food--beverage-prices-in-north-america.aspx

12% increase in prices.

[Sugarlips]

9 hours ago, spygirl said:

Nope.

US has run out of employable.

Employers are fighting over ex cons, almost unheard of.

 

Does this mean they will relax rules around skilled migrants, I’d be up for a year’s career adventure on the Californian coast if I had the chance.

think I just answered my own question, if I’m reading it right this bill proposes to almost double the skilled green cards from 140,000 to 270,000

https://www.wsj.com/articles/the-other-immigration-morass-a-battle-over-workers-green-cards-11567828860

[Castlevania]

9 hours ago, Cattle Prod said:

Sure. So 'which I've done before' didn't  mean Tesco, just that Tesco is my current local. I stacked shelves in a place called Dunnes Stores, 1996-1998.

Whats funny is there were no yellow reduced stickers then. None. And I kind of forgot it till I started seeing them here. And I thought 'wow supermarkets are being more efficient now'...but I dont remember throwing out food either.

What I think it is, is that there are a) less shelf stackers around (we were sometimes called 'merchandisers') and b) people are more afraid of dates.

Best before dates to me are irrelevant, its a 'use your judgement' signal. But people avoid ...so yellow reduced stickers?? You tell me mate! Use by dates are 'avoid fish, buy beef, sniff milk' to me but almost everyone else bins off. YRS? Times have changed, eh?

Ah Dunnes Stores. They were a bit odd from what i recall, as in they did both clothing and food in one big shop. The clothing side was very M&S whilst the food side was more like Tesco.

[Harley]

50 minutes ago, Cattle Prod said:

Here's a  long term chart pattern for silver that shows where DBs roadmap targets could fit quite reasonably (say down to 10 then up to 200+. Not sure how a short term run up to 26 would fit though, maybe a false breakout of tge channel? @Harley I know you like monthly signals, what do you reckon?! And do you think log scale is appropriate?

See my previous posts for silver and gold (especially in GBP) but for the more recent period (2016+)!!!!!!

Likey likey!

Don't like log scales though!

PS: See my next post - cup and handles everywhere?

[Harley]

Half time coming up for UK gilts?

MACD crossed a bit early this time so is it different this time (about to top)?

[Dogtania]

Fwiw I've been told by someone who works in Tesco that to reduce waste (or keep staff from starving?) All reduced price stickers are free to any Tesco employee an hour before close.  Could be an angle for back shift @Yellow_Reduced_Sticker 😋

[Majorpain]

39 minutes ago, Dogtania said:

Fwiw I've been told by someone who works in Tesco that to reduce waste (or keep staff from starving?) All reduced price stickers are free to any Tesco employee an hour before close.  Could be an angle for back shift @Yellow_Reduced_Sticker 😋

Thats not a bad idea, keeps the staff happy and its only going in the bin anyway.

[sleepwello'nights]

On 05/09/2019 at 22:05, Napoleon Dynamite said:

Before my time too, but I think unions had a lot to do with it.  Government Policy to full employment too.  Productivity was high, so pay could be increased. 

5% inflation, leading to workers demanding a 7% payrise, leading to 8% inflation leading to workers demanding a 9% payrise.  Repeat adnauseum until productivity can no longer be improved at a sufficient rate.

This guy explains it well, watch for a minute or two from 15mins:

 

If only I could understand some of the theories he summarises. My issue with him is that he is at core a socialist and therefore each individuals self interest is the reason for the global economy not working for everyone's good.

He also ends up paraphrasing John Milton Keynes; "in the long run we're all dead"

[Errol]

These are the only gold charts you need:

 

https://www.clivemaund.com/article.php?id=5144

 

And the updated chart for September 2019:

[Harley]

The long US bond. 

A lesson in continuation (tbd reversal!) patterns?

 

[Yellow_Reduced_Sticker]

15 hours ago, Cattle Prod said:

YRS? Times have changed, eh?

Thanks for reply & Yep they certainly have!

1 hour ago, Dogtania said:

Fwiw I've been told by someone who works in Tesco that to reduce waste (or keep staff from starving?) All reduced price stickers are free to any Tesco employee an hour before close.  Could be an angle for back shift @Yellow_Reduced_Sticker 😋

...late shift for me then!

[Harley]

Forget bonds, my perfect trade, as was,......

[Harley]

Getting a bit toppy on Gold in GBP. 

A broadening wedge triangle pattern (often bearish reversal) forming with weakening MACD, stochastics and RSI signalling exhaustion?

But silver.........well.....?

PS: Oh well, the wind is down so back to my roofing job!

[Barnsey]

Some great charts there, thanks @Harley & @Errol 

Another tweet regarding timing of U.S. recession (already underway?)

Seems there's a building consensus that the U.S has probably just entered recession or will imminently, so I've looked back at the price action of Silver during the last one, because I think there are smarter folks and other forces behind the scenes of all this, and I'm a little obsessed with loose patterns, bearing in mind of course that this could be/is the end of a 40 year deflationary cycle, and things will no doubt be even crazier as things play out.

Sequence of events 2007 - 2008:

August 2007 - BNP Paribas blocks withdrawals from it's 3 hedge funds (Woodford anyone?), Fed cuts discounted rate (temporary loans for banks) by 50bps = Silver begins it's ascent from $11.80

September 2007 - Fed cuts funds rate (credit for everyday folks) by 50bps = Silver $13.17

October 2007 - Dow Jones/S&P peaks = Silver reaches $14.82

November - December 2007 - Silver pulls back to $13.98 (are we here now?) as Fed institute Term Auction Facility on 12th December (things are going to be fine). Very important to note, the recession began right here, but won't be confirmed by the NBER to the masses until 1 year later! However, it's also at this very point that Silver heads from $13.98 just before Christmas 2007, to $20.25 mid March 2008, pretty much straight up. As does Gold and Platinum.

March 2008 - Stocks catch a breath and halt their decline (coinciding with Bernanke's famous "sub prime is contained" speech), silver pulls back to around $17 and hovers there until mid July when it bounces back up to $18.67 but then...

BOOM! July - October 2008 - Silver hand in hand with the stock market, jump off a cliff together into the abyss, Silver falling from $18.67 to $9.09 in just 3 months!

December 2008 - March 2009 - Just before the recession is officially confirmed by the NBER, Silver catches it's breath, and heads up to $14.28 by Feb 2009 as the S&P resumes it's downward momentum (bottoms out March 2009 at 756, down from a peak of 1535).