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

[nirvana]

1 hour ago, Harley said:

My portfolios have popped out to the wood house today and have yet to return!

checks portfolio...

 

[Democorruptcy]

5 hours ago, DurhamBorn said:

They did and that folly is now coming home to roost utter idiots the lot of them.If we take the sector though,50% up in SSE,200% up in DRAX 70% down in Centrica thats a return of 60% on the three.The question now is what next?.Iv sold some DRAX and bought a few more Centrica among others.The government are boing shown in many areas that the backbone of the economy is in a mess.They need to invest,but the ROCE isnt enough so wont.I would be 99% certain ministers are begging them right now,and will also be whispering about helping them with legislation.

That's not from the start of this thread though like @Heart's Easewas discussing? DRAX is about +50% plus divis. If you are counting from March 2020 then even Centrica is well up!

[HousePriceMania]

 

[HousePriceMania]

Sinic Holdings.

That's cynical.

[nirvana]

2 minutes ago, Cattle Prod said:

He's a former telecoms salesman. Dyodd and be careful who you listen to, chaps. He's spent years ranting about the Feb with not s fucking clue why they do what they do.

lol, you sound like you're on the side of the 'troughers'

Kaplan is ex Goldman Sachs....quel horeur, not another one! there appears to be a bit of a trend forming here, dontcha think?

https://wallstreetonparade.com/2021/09/the-justice-department-has-serious-grounds-to-subpoena-trading-records-from-dallas-fed-president-robert-kaplan/  

[sancho panza]

On 19/09/2021 at 02:27, Hancock said:

if it comes to people/firms having to sell to pay their loans in a hurry, then surely the BK will be something similar to March 2020.

ie. Another free for all.

A BK is by definition a systemic event.march 2020 wasn't systemic.

On 19/09/2021 at 09:36, ThoughtCriminal said:

Definitely no panic in government 🤡🤡🤡

That's quite a blatant bit of panicing isn't it?

I know things are getting serious.Mrs P came in the otehr day and asked how long the coal burner would take to install.At the same time,she asked about when I'd fixed our gas/leccy prices to 2023 and seemed impressed that it had been some months back when supply was cheap.

Obviously,noone....and I mean noone.... in the basement dweller community is surprised by the prospect of darkness this winter.

[sancho panza]

5 minutes ago, nirvana said:

lol, you sound like you're on the side of the 'troughers'

Kaplan is ex Goldman Sachs....quel horeur, not another one! there appears to be a bit of a trend forming here, dontcha think?

https://wallstreetonparade.com/2021/09/the-justice-department-has-serious-grounds-to-subpoena-trading-records-from-dallas-fed-president-robert-kaplan/  

CP talking about

https://www.linkedin.com/in/stevenjonkaplan

You're talking about

https://en.wikipedia.org/wiki/Robert_Steven_Kaplan

 

[sancho panza]

On 19/09/2021 at 13:20, Sidd said:

So on that basis it would be good to get ideas of what people are planning over the next 3 months, what is at stake, risk appetite and how we form the consensus opinions of all those in the macroeconomic world from Lyn Alden to Dave H and of course the analysis from this thread as it stands today, to better prepare us to set up for the next big event.

 

 

In all honesty,we'll probably stay long oilies,goldies,telecoms,potash,uranium in that order.We'll liquidate some options psotions but I'm not sure a BK is imminent (see personal definition below).Our average prices on msot stocks aside from the scottish play are decent and I think they'll be signifcantly higher in ten years.

On 19/09/2021 at 17:40, DurhamBorn said:

You save the NI on salary sacrifice,but if you have no chance with employer then you can still put all your taxable income up to £40k a year in your own SIPP.A few years would see you able to put the house money in and get the 20% tax relief back.Iv spent the last few weeks opening SIPPs for family members and working out with my dad ways to fund the kids so they can divert into their SIPPs.My partner is now putting everything in down to £1050 a month.

Bit of fun,not advice back of a fag packet DYOR etc 5%ish (theres 21) each into the below ,take divis as income or re-invest into any,but id probably be feeding divs at first into the Asian Trust and BAT.

Vodafone

Telefonica

Telefonica Brasil

TIM SA

Telefonica Germany

Orange SA

BT

BP

Shell B

Repsol

Chevron

Centrica 

Yamana Gold 

Barrick Gold

Newcrest

Harmony Gold

Buenaventura ADR

Pan American Silver

Henderson Asian Income Investment Fund

BAT Tobacco

Imperial Brands

 

Nice lsit.I must like that because there's only 5 we don't ownNCM(sold to buy other goldies),PAAS,CVX,IMB and the Henderson.

 

On 19/09/2021 at 19:38, Hancock said:

So many potential reasons for a BK, but the one great big reason why it might not happen is the amount that has already been printed.

Are you selling up to get out of the market or do you have a substantial amount of your wealth in cash, in expectation for a BK?

Pound falling could be another reason to get sterling savings into the markets!
https://www.telegraph.co.uk/business/2021/09/19/mounting-fears-1970s-style-three-day-week-britains-energy-crunch/

For me a BK is a credit deflation within the banking sector(Dowd Buckner ratios going sky high).What opportunities flow from that is what I'm trying to guesstimate.

A stock market crash would likely accompany it but by my definition isn't a necessity.Similarly a drop in real estate wiould liekly accompany it too ubt isn't a necessity(if that didn't though,I'd be stunned)

[nirvana]

29 minutes ago, Cattle Prod said:

No idea what you're talking about. As ever!

luv u too! not posting in here anymore, stick yer head up yer ass! 

PS I called the dump last week so stick that up yer ass too! 

[Noallegiance]

21 minutes ago, sancho panza said:

In all honesty,we'll probably stay long oilies,goldies,telecoms,potash,uranium in that order.We'll liquidate some options psotions but I'm not sure a BK is imminent (see personal definition below).Our average prices on msot stocks aside from the scottish play are decent and I think they'll be signifcantly higher in ten years.

Nice lsit.I must like that because there's only 5 we don't ownNCM(sold to buy other goldies),PAAS,CVX,IMB and the Henderson.

 

For me a BK is a credit deflation within the banking sector(Dowd Buckner ratios going sky high).What opportunities flow from that is what I'm trying to guesstimate.

A stock market crash would likely accompany it but by my definition isn't a necessity.Similarly a drop in real estate wiould liekly accompany it too ubt isn't a necessity(if that didn't though,I'd be stunned)

 

[MrXxxx]

16 minutes ago, nirvana said:

luv u too! not posting in here anymore, stick yer head up yer ass! 

PS I called the dump last week so stick that up yer ass too! 

Sorry, I don't read any of your posts....

 

 

.......I just look at the 'Titty pictures' :-)

[Hancock]

1 hour ago, sancho panza said:

In all honesty,we'll probably stay long oilies,goldies,telecoms,potash,uranium in that order.We'll liquidate some options psotions but I'm not sure a BK is imminent (see personal definition below).Our average prices on msot stocks aside from the scottish play are decent and I think they'll be signifcantly higher in ten years.

 

But would you buy at current prices.

 

[Hancock]

1 hour ago, Noallegiance said:

 

He makes that many short term calls, that its inevitable he'll get one right.

[Democorruptcy]

Shell Enterprises LLC, a subsidiary of Royal Dutch Shell plc, has reached an agreement for the sale of its Permian business to ConocoPhillips, a leading shales developer in the basin, for $9.5 billion in cash. The transaction will transfer all of Shell's interest in the Permian to ConocoPhillips, subject to regulatory approvals.

"After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition," said Wael Sawan, Upstream Director. "This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital.  This transaction, made possible by the Permian team's outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions."

Shell's Upstream business plays a critical role in the Powering Progress strategy through a more focused, competitive and resilient portfolio that provides the energy the world needs today whilst funding shareholder distributions as well as the energy transition.

The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions after closing, with the remainder used for further strengthening of the balance sheet.  These distributions will be in addition to our shareholder distributions in the range of 20-30% of cash flow from operations.  The effective date of the transaction is July 1, 2021 with closing expected in Q4 2021.

https://www.hl.co.uk/shares/shares-search-results/r/royal-dutch-shell-plc-b-shares-eur0.07

[sancho panza]

On 19/09/2021 at 22:41, DurhamBorn said:

On the energy situation,the media seem to think the government will bail out the companies etc to get them through winter,but i think that is the wrong read on things.I think the government will simply be trying to find a way to get the big companies to take on the customers and let the small ones go under.The governments energy policy is in tatters now of course,a complete disaster that we all saw coming here in the basement.The price cap is proving one of the big problems,fancy that.

I think government will find a way to get the big companies to take on the customers,and then will introduce rules etc to make the market much harder to enter for small players.

I'd agree,the govt going to circle the wagons around the big boys that have form for buying futures senssibly.

Having said that I have wondered whther the scottish play will have to honour all these small companies fixed contracts to retial customers. anyone else know @Castlevania?

If they do it'll be a back door subsidy to all these small players that sold long bought spot as their CEO's have rinsed taxpayers effectively for the bail outs.

51 minutes ago, Hancock said:

But would you buy at current prices.

 

Key thing here is what @DurhamBorn said,you have to weigh the opporutnies of BK in the banking sector/credit markets with the damage inflation will do to your spending power.Trades like BATs below from 2000 is what we're looking for

I think shares like BP/RDSB/XOM/Rep/ENI/Total are pretty reasonable at today's prices.Not super good value but reasonable over the next ten.

Telecoms-Vod/orange/Tlefonica Deutsch look really good value at today's prices,things like BT/TIM/Telefonica//VIV/Turkcell look okish at today's prices.

Potash is too high(but we bought in cheap)

Uranium too pricey but we bought in cheap.

Goldies you have to pick through but we bought in cheap but even so I'd take postions in NCM/Barrick/Kinross/Anglogold without too much anxiety.Then maybe a raft of smaller ones .

We tend to run a basic portfolio then I run some leveraged trades off the back of the scrum in options

[sancho panza]

got sent this DM article from Sat by me ma.

She reckons the word is getting out there amongst her crew

Things starting to get real for a lot of people.

https://www.dailymail.co.uk/news/article-10003047/Household-bills-soar-1-500-year.html

Household bills will soar by more than £1,500 a year with families on the cusp of the biggest spending squeeze in nearly a decade, experts warn

• 'Perfect storm' of price and tax hikes could push family finances to the limit' 
• Energy prices have rocketed this week leading to suppliers pulling deals 
• And inflation jumped from 2 per cent in July to 3.2 per cent last month 

A year ago, the best one-year fixed deal on comparison website Energy Helpline was £855 – but last night the cheapest available was more than double that at £1,895.

Analysts Baringa projects that some 39 suppliers could collapse in the next 12 months, leaving just 10 firms dominating the market.

To help those companies deal with surging costs, regulator Ofgem will raise its price cap again, according to the Times, meaning 15 million customers on variable tariffs face paying hundreds of pounds more.  

The price of food and drink in shops and supermarkets rose by 1.1 per cent in August – the highest rate since 2008 – as retailers battled supply shortages and higher costs.

Train fares, telephone and internet bills, and other day-to-day expenses are also increasing, while Boris Johnson's health and social care levy means workers will have to pay an extra 1.25 percentage point in tax from next year.

[The Grey Man]

I havent checked the latest winter forecast predictions.

The last a few weeks ago, were strong signals for cold.

Posted on fucking weather thread.

No one has control of the weather.

Been warning folks for weeks on the future prices for energy.

@Roger_Mellie give me a wake up call and all the other posters who contributed and set off various threads. Thanks guys.

Well let us see what happens.

Half expect Rishi to drop some VAT on fuel....to add the cost to long term issues such as pensions and kick it down the road. Idiots will make him a hero.

For sure this is a Nicki Minaj moment, albeit slower.

More regular folk are noting the hikes at the shelves at the shops. This is not the banking crisis. No one noticed the devaluation of Sterling. Just the house is richer. 

As forewarned on this thread, it is no longer just asset prices. The central printers have sent this direct to immediate spending  now.

Coupled with the start of the cold war II from last year and supply chains.

For me time to drop a few things to cover the costs.

Many wont be so lucky.

If there is to be gain from the impending pain, it is more folk being aware of the bigger bullshit that might engulf them. 

 

[JMD]

10 hours ago, reformed nice guy said:

Yes, 'indulgencies' they were called, the Catholic church in the middle ages sold them to the repentant sinner, to enable the cleansed soul of the sinner to enter heaven. Today we have a secular society, but strangely we still have modern day untouchable saints like Gretta and Attenborough.

[Loki]

2 minutes ago, JMD said:

Today we have a secular society, but strangely we still have SCIENCE©

[Hancock]

1 hour ago, sancho panza said:

I'd agree,the govt going to circle the wagons around the big boys that have form for buying futures senssibly.

Having said that I have wondered whther the scottish play will have to honour all these small companies fixed contracts to retial customers. anyone else know @Castlevania?

If they do it'll be a back door subsidy to all these small players that sold long bought spot as their CEO's have rinsed taxpayers effectively for the bail outs.

Key thing here is what @DurhamBorn said,you have to weigh the opporutnies of BK in the banking sector/credit markets with the damage inflation will do to your spending power.Trades like BATs below from 2000 is what we're looking for

I think shares like BP/RDSB/XOM/Rep/ENI/Total are pretty reasonable at today's prices.Not super good value but reasonable over the next ten.

Telecoms-Vod/orange/Tlefonica Deutsch look really good value at today's prices,things like BT/TIM/Telefonica//VIV/Turkcell look okish at today's prices.

Potash is too high(but we bought in cheap)

Uranium too pricey but we bought in cheap.

Goldies you have to pick through but we bought in cheap but even so I'd take postions in NCM/Barrick/Kinross/Anglogold without too much anxiety.Then maybe a raft of smaller ones .

We tend to run a basic portfolio then I run some leveraged trades off the back of the scrum in options

Kind of what im thinking, after looking at my holdings.

Telcos and a nibble at some oilies at these prices is what i'm considering.

Though if a HPC happens tempted to buy half a house and leverage up on the rest and become a rentier!

Ive some Imperial, but as an ex-smoker don't fancy investing too much in them.

[DurhamBorn]

I dont think the new supplier has to honour contracts,only cash balances and they are funded by claiming back from a levy.Once you move you go on their standard rate,but once on are free to move anywhere else.The standard rate will be the new cap of course and that will likely be slightly loss making even for the well hedged.

25% of electricity price is now green subs and social subs,just another example of the middle being creamed for the scroungers at the top and bottom.

Great to see the politicians at last experience what happens when you have massive structural problems hidden for decades by dis-inflation.

Just wait for the uproar when energy bills land and then council tax and then NI.

[wherebee]

3 hours ago, DurhamBorn said:

I dont think the new supplier has to honour contracts,only cash balances and they are funded by claiming back from a levy.Once you move you go on their standard rate,but once on are free to move anywhere else.The standard rate will be the new cap of course and that will likely be slightly loss making even for the well hedged.

25% of electricity price is now green subs and social subs,just another example of the middle being creamed for the scroungers at the top and bottom.

Great to see the politicians at last experience what happens when you have massive structural problems hidden for decades by dis-inflation.

Just wait for the uproar when energy bills land and then council tax and then NI.

That's my understanding too, in a fire sale.  When mortgage books are sold, existing contracts remain IF the mortgagee has been informed of the sale and agreed/not documented objection and remortgaged elsewhere.  When mortgage books are transferred due to collapse of the lender, mortgage contracts go to the great graveyard in the sky and standard variable rate comes in (well, in most countries).

 

Anyway, re inflation: wife has been phoning round aussie energy companies for two days for fixed deals.  Longest is 12 months.  Spend 5 minutes with that one, as they refused to say 'maximum term is' but kept saying 'minimum 12 months fixed'.

[Castlevania]

@sancho panza The Scottish play or another provider has to agree to take on the customers. If you end up in a situation where wholesale prices are elevated and you have to buy more power at spot to fulfill the new customers who’ll be paying less you might not want to take on all those customers. That’s why there’s chatter of the government having to set up their own provider if several more providers go under.

[Boon]

Seems to be a shitshow in the making.

Is keeping the energy cap credible if costs don't come back down? Just seems to be making the problem worse.

One solution may be to roll out the warm home discount scheme to everyone, basically a form of UBI by the back door.

[belfastchild]

10 hours ago, Cattle Prod said:

David stood up in a room full of bankers at one of those wanker breakfast meetings in Dublin around 2007, before the big property bust and said "I like my house and I don't want to sell it, but I'll sell it today if any of you finance a lease for it with a buyback clause in a few years time. Any takers?". Stunned silence. He was one of the few who called out the madness back then, a very smart guy, youngest MD in UBS history. He's s good laugh, too  But he's also an ex central banker and Davos man, and some of recent stuff is a little bit tinged with Great Reset - ish stuff.

I met him at one of those wanker all day business events (my first and last thank fuck) down in Dublin just after the crash. Was just sitting chatting at the table over breakfast then got up and give a near hour talk on everything that happened.
Wanted to chat to him more but got latched on to by a website salesman from Derry who wouldnt take the hint to eff off.

His early stuff is still up on youtube and agree with CP, a lot of the later stuff is great reset stuff, I dont know how much of it he actually believes or is just following the winds, hence the reason for posting, its good to get a view on many streams. I listen to him then read Dimitry Orlov or Dave Collum for the same sort of craic insights ;-)

David was very pro vax then in one of the recent podcasts in the last few minutes went all serious to say that in a few years time we will all look back and say we got this horribly wrong... I (mis)read that as him getting hints to change horses.

Going back On topic ish, bought centrica yesterday, up 4% on the day, expect a full market melt down this morning. Im late to the whole shares thing (wanted to get my house in order first - in every sense of the term) so only opened a sipp and s/s isa 2019. Did parallel stuff to people on here (telcos - my original background once BT stopped overbidding for football, oilies, potash - bailed on k+s too soon I think but mosaic and nutrien did well, drax, gsk and have mates that work for siemens in germany so bought them before they split off the energy bit, also put money in some clients who no longer use me due to cost reductions - figured Id make up the difference that way!). Im up 30% overall but at one point was 35% and considered bailing out totally then and letting it ride for a year. Nervous at the minute because 30% is not to be sniffed at but also have a cash isa with about the same level of investment sitting getting 0.4%.
I talk a lot with small business owners here in NI and was out and about yesterday (and will be today). One of the people I spoke to yesterday was b2b exclusively before covid, now its entirely b2c, b2b has died. Worryingly he said even b2c died june/july this year and I suggested it might have been the end of furlough/self employed payments. He didnt disagree. It wasnt a cheery conversation about what we think will happen over the winter and thats without any 'circuit breaker'