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


spunko
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sleepwello'nights
On 20/07/2021 at 10:27, Harley said:

I've always liked the guy.  Been very useful.  I totally agree having looked at all this in detail over several months several years ago.  Fine if you build a house around the pump(!) but no way as a retrofit for many properties.

I've said before our new house has an air source heat pump, underfloor heating and is well insulated. Our electricity bill for Jan and Feb was almost £600. We will probably use about 10,000 kWh annually. 

I've switched to a lower price supplier, almost half the unit price of British Gas. Even so I reckon our electricity bill will be double the combined gas and electric bill of our more or less same size previous house.

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Bobthebuilder
34 minutes ago, sleepwello'nights said:

I've said before our new house has an air source heat pump, underfloor heating and is well insulated. Our electricity bill for Jan and Feb was almost £600. We will probably use about 10,000 kWh annually. 

I've switched to a lower price supplier, almost half the unit price of British Gas. Even so I reckon our electricity bill will be double the combined gas and electric bill of our more or less same size previous house.

Years ago, I converted someone's house from gas to electric for the heating and hot water. Now I assume things have got a lot more efficient for electric, but back then when we fired it up you could watch the old style leccy meter spinning around like a helicopter blades. They lasted a year, then converted back to gas.

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1 hour ago, Cattle Prod said:

What do you see as oversold, do you mind me asking?

Really nice to see you get me drift.

Stochastic.  CXV and ENI for example. Around 80 so on the monthlies, not massive and starting down.  And as we agree (nice reply there!), would be nice if the weekly drives the monthly down.

Ah, you do recall the HA candles I mentioned well back! :)  You gave me a rep at the time so I new then we were on the same wavelength!  I kinda wrote this post for you!  Working very well for me.  Take a look on the monthlies for the above - defo a sign of a turn.  So overall, I'm leaning more towards a further decline on the monthly.

A subtlety - the Stochastic normally turns ahead of the MACD.  HA helps tell you if it's a blip or not.

I never really got into RSI.  I optimised on a few indicators so picked the STO over the RSI for my momentum signal.

 

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DurhamBorn

https://www.telegraph.co.uk/business/2021/07/21/putins-gas-showdown-europe-risks-epic-winter-fuel-crisis/

2023 iv got for the structural bull to really get going in gas,but these are the first shots coming now.The cost of carbon credits forcing coal out a big driver.This will lead to nature based solutions becoming the biggest factor in net zero at some point.Still struggling to find a way to play that though BP have a very interesting business in the sector.

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1 hour ago, Cattle Prod said:

Check out how accurate weekly Renko is at calling trend changes in oil.

Is that available in TradingView? I assume so!  I'll look but I like the HA as I'm learning to read the candle patterns.  I've got a great dual chart layout on my new Ultrawide monitor!

I mentioned upthread about maybe needing to combine weeklies with monthlies as neither are great on their own.  Weeklies give too may false signals for what I'm after and the monthlies mean I miss too much profit or take too much loss atm.

In true iterative fashion, I came up with a combo this week which looks promising - the old confirmation approach!

PS:  I'm dying to use our similar approach on option trades for US ETFs when I have the time.  Maybe TastyWorks and more towards LEAPS.  That would complement my current activity.

Edited by Harley
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5 minutes ago, DurhamBorn said:

https://www.telegraph.co.uk/business/2021/07/21/putins-gas-showdown-europe-risks-epic-winter-fuel-crisis/

2023 iv got for the structural bull to really get going in gas,but these are the first shots coming now.The cost of carbon credits forcing coal out a big driver.This will lead to nature based solutions becoming the biggest factor in net zero at some point.Still struggling to find a way to play that though BP have a very interesting business in the sector.

Heh...is it just me or...

He (Putin the Terrible, boo hiss) is quietly orchestrating a European gas supply crisis by restricting pipeline flows.

But gas is bad and we need to be carbon neutral, can't get more neutral than no gas, which is what they seem to want.  (Ref heat pumps, no gas mains etc)

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26 minutes ago, Loki said:

Heh...is it just me or...

He (Putin the Terrible, boo hiss) is quietly orchestrating a European gas supply crisis by restricting pipeline flows.

But gas is bad and we need to be carbon neutral, can't get more neutral than no gas, which is what they seem to want.  (Ref heat pumps, no gas mains etc)

That was the impression I had, he is killing 3 birds with one stone. Not paying Ukraine for the extra gas transport makes him happy, it also punishes them for the games they have been pulling over the years. At the same time the EU stocks are diminishing which shifts the power balance towards Russia. Lastly he should be able to make the money back up when the other pipeline opens.

OPEC is doing the same with oil, they are wrestling more control away from everyone else by managing stockpiles down to a place where users get nervous and are willing to pay more. I see them as completely in control now, they pretend their meetings are all serious but they are probably more like a celebration.

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Cattle Prod
52 minutes ago, Harley said:

Really nice to see you get me drift.

Stochastic.  CXV and ENI for example. Around 80 so on the monthlies, not massive and starting down.  And as we agree (nice reply there!), would be nice if the weekly drives the monthly down.

Ah, you do recall the HA candles I mentioned well back! :)  You gave me a rep at the time so I new then we were on the same wavelength!  I kinda wrote this post for you!  Working very well for me.  Take a look on the monthlies for the above - defo a sign of a turn.  So overall, I'm leaning more towards a further decline on the monthly.

A subtlety - the Stochastic normally turns ahead of the MACD.  HA helps tell you if it's a blip or not.

I never really got into RSI.  I optimised on a few indicators so picked the STO over the RSI for my momentum signal.

 

Much appreciated, Harley. Food for thought.

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Cattle Prod
37 minutes ago, Harley said:

Is that available in TradingView? I assume so!  I'll look but I like the HA as I'm learning to read the candle patterns.  I've got a great dual chart layout on my new Ultrawide monitor!

Yes it is, just learning it myself!

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Hancock
5 hours ago, DurhamBorn said:

This is the worst government iv ever seen by a very large margin

I agree.

Edited by Hancock
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Hancock
6 hours ago, leonardratso said:

More contrarian than a contrarian is a fake contrarian - hahahaha, hancock?

I've not got twitter you cheeky cunt, but id like to shag his daughter.

Edited by Hancock
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37 minutes ago, Cattle Prod said:

Yes it is, just learning it myself!

3 of us then, I was buying a book the other day:

Japanese Candlestick Charting Techniques: A Contemporary Guide to the Ancient Investment Techniques of the Far East

I got sidetracked so will finish my purchase now.

 

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46 minutes ago, Cattle Prod said:

Yes it is, just learning it myself!

All good.  The Jap stuff honed back in the day rice trading holds up well!

48 minutes ago, Cattle Prod said:

Much appreciated, Harley. Food for thought.

Please let us know your take as and when.  Interesting to compare buy signals.

Edited by Harley
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Noallegiance

@DurhamBorn just to clarify/restate; when you talk of the BoE having to stop QE, do you see this as being this end of the cycle and part of a bust, or much later? And why will this happen?

Also, does this essentially mean that ANY part of the public or private sector that currently receives cash from the government will no longer?

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DurhamBorn
30 minutes ago, Noallegiance said:

@DurhamBorn just to clarify/restate; when you talk of the BoE having to stop QE, do you see this as being this end of the cycle and part of a bust, or much later? And why will this happen?

Also, does this essentially mean that ANY part of the public or private sector that currently receives cash from the government will no longer?

We are already in the reflation now and any violent deflations will be short term events.Once QE stops government will have to borrow on the open market and pay higher rates.There are two big risks then.First is that the BOE blinks and starts printing simply to fund government deficits again.Second that government decides not to cut spending but raise tax instead.Death spiral in sterling would follow both.The government is in a terrible position.This pingdemic fiasco shows how clueless they are.

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Straingone
31 minutes ago, DurhamBorn said:

We are already in the reflation now and any violent deflations will be short term events.Once QE stops government will have to borrow on the open market and pay higher rates.There are two big risks then.First is that the BOE blinks and starts printing simply to fund government deficits again.Second that government decides not to cut spending but raise tax instead.Death spiral in sterling would follow both.The government is in a terrible position.This pingdemic fiasco shows how clueless they are.

This chimes with an article by Alvaro de Menard referenced in Dominic Cummings Substack. He gives links to 'Some interesting things I've read recently'.  I would highly  recommend a monthly subscription. There is so much good information which more than justifies the cost of subscription.

God alone knows how he can keep across so many important developments in politics, economics and science. I genuinely believe he is one of the most important thinkers living in our times.

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Sugarlips

Steven Van Metre predicting US 30y mortgages rates to fall from current 2.9% to just 1%

 

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5 hours ago, Straingone said:

This chimes with an article by Alvaro de Menard referenced in Dominic Cummings Substack. He gives links to 'Some interesting things I've read recently'.  I would highly  recommend a monthly subscription. There is so much good information which more than justifies the cost of subscription.

God alone knows how he can keep across so many important developments in politics, economics and science. I genuinely believe he is one of the most important thinkers living in our times.

link?

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Noallegiance
7 hours ago, DurhamBorn said:

We are already in the reflation now and any violent deflations will be short term events.Once QE stops government will have to borrow on the open market and pay higher rates.There are two big risks then.First is that the BOE blinks and starts printing simply to fund government deficits again.Second that government decides not to cut spending but raise tax instead.Death spiral in sterling would follow both.The government is in a terrible position.This pingdemic fiasco shows how clueless they are.

Thanks.

I'm struggling with why the QE habit will be stopped, though. Can you explain and tie in with CB printing overdrive if the bust occurs? 

E.g. stop soon, restart when there's no other option? Why?

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Majorpain

Construction Product Availability Statement » Construction Leadership Council

Quote

 

Overall, prices for products and materials have increased by a reported 10-15%, consistent with the Office of National Statistics figure for May of 10.2% overall with 12.8% for those most commonly used in RMI.  Specific products, especially timber, has seen increases of 20-50% for most products and over 100% for OSB and other sheet materials. For the first time we have had reports that some merchants are destocking certain products that are no longer economic.

Quick update on UK raw material prices, more info in link.

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DurhamBorn
45 minutes ago, Noallegiance said:

Thanks.

I'm struggling with why the QE habit will be stopped, though. Can you explain and tie in with CB printing overdrive if the bust occurs? 

E.g. stop soon, restart when there's no other option? Why?

Inflation mostly.With dis-inflation they have massive room to print.Thats what the whole last cycle was about.The west,and the UK have pretty much printed while the Chinese worked.That is coming to an end now.This started in 82 and ends in 21 or 22.There is massive liquidity in the system ,enough for velocity to get moving as it will.They will re-start if we get a crash ,but if inflation is still high it will be one off bursts.Inflation causes all kinds of problems.Even today NHS managers get 3%,police nothing in pay increases.Tensions everywhere.CBs have been taken over by governments for fiscal injections as we predicted,but they are close to the point where it will move to tax rather than print.

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DurhamBorn

Interesting from the Scottish Share today.Nuclear is the real winner from the energy transition and its highly likely the below is due to government having a word and asking them not to sell to the Chinese.It also suggests that they think the new Rolls Royce small reactors could be a go,maybe government subs?.

"We have been re-considering whether Nuclear can play a role for Centrica in the future, having announced in 2018 that we intended to divest of 20% interest in the UK's operating nuclear fleet. Our focus remains on the customer, and as we look to help our customers reduce their carbon emissions, our Nuclear stake provides us with an important source of zero carbon electricity. Therefore, we may decide to retain our 20% interest."

 

 

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Underwhelmed
8 hours ago, Straingone said:

This chimes with an article by Alvaro de Menard referenced in Dominic Cummings Substack. He gives links to 'Some interesting things I've read recently'.  I would highly  recommend a monthly subscription. There is so much good information which more than justifies the cost of subscription.

God alone knows how he can keep across so many important developments in politics, economics and science. I genuinely believe he is one of the most important thinkers living in our times.

Is it this article?

https://fantasticanachronism.com/2021/06/14/on-the-pension-apocalypse/

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