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spunko

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

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Been a bit busy lately for a variety of reasons.  The virus has been a bit of a catalyst to get quite a few outstanding items done, as has been a number of local thefts and the recent storm damage.  I've been investing alright but by spending cash on important, tangible things.  Plus learning a lot of new and relevant things. 

Anyways, I'm now getting back to this financial malarkey and have just been grazing over the monthly charts to get an initial gut feel.  Things look really exciting at last, given the lack of churn over the last few years.  The virus may be a black swan, and the impact on supply chains great, but changes (retrenchment of globalisation, fiscal end game, etc) have been underway for a while now.  Virus apart, these are exciting times chart wise.  I'm looking at strengths and weaknesses suggesting more than ever the baton is being past between sectors and companies.

Plenty of due diligence to do over the next few weeks but this is probably where I'll start putting some serious money to work, with a few initial stakes first.  Past posts on this thread will be key.  The markets will no doubt be tough, but for already seeded reasons beyond the current virus threat.  But I'll rather be further invested than heavily in cash which also has its risks. 

We seem to be in the classic slack water moment when multiple currents start changing and people look to explain things in a superficial manner, usually looking at cause and effect the wrong way round, and usually under the veil of some big ticket simplistic event like the virus.  So a lot of noise to come with the fog of war and all that where your training and discipline gives you an edge.

PS: Alas I need to venture out to a highish risk area so this may all be in vain!

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3 hours ago, DurhamBorn said:

Big investment i would think.You can import parts,make the item,then export,all tax free.

Given that the EU wouldn't allow us these free ports - I assume a no-deal Brexit is a very real possibility? 

Interesting times ahead come end of year (...or is it just a Boris bargaining ploy?)

Edited by JMD

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3 hours ago, JMD said:

And Sunak's wife is the daughter of the founder of Infosys.. oh dear, couldn't make it up I suppose! 

So thats how you become an MP.

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Monday, February 10, 2020

UK Port and Property Company Sells Major Stake as Growth of Online Shopping Causes ProblemsHigh Street Woes Come Home to Roost for Investors with Sale to Pension Managers

UK – AUSTRALIA – Since the Robert Maxwell affair, the matters surrounding the large pension funds, which so many companies manage on behalf of staff, are always subject to scrutiny. Now according to a Sunday Telegraph article Peel Ports, the second largest such UK company, is apparently to divest itself of 25% of the group to Australia's biggest pension fund manager, AustralianSuper.

There is no mention of the possible deal on the Peel Ports website but, according to the report, the sale of shares by Peel Ports, which is partially owned by John Whittaker, the billionaire real estate tycoon behind Manchester’s Trafford Centre, and Deutsche Bank investment arm DWS, also attracted interest from a number of other international funds as part of a process which was run collaboratively by Rothschild and Linklaters.

The silence on the deal from all sides is deafening but the Melbourne headquartered fund manager is said to hold retirement investments for one in every ten Aussie workers. The sale is part of a flurry of activity by Whittaker who it is claimed is not only selling off the Peel Ports portfolio, a company which has interests in property and infrastructure as well as its holdings in Medway, Clyde and Liverpool ports facilities.

Whittaker’s problems have evolved after the change in the high street rental climate where his Intu group has been suffering a cash shortage following body blows such as the difficulties at Debenhams and Arcadia, which are in turn struggling with the falling footfall in their stores, a problem linked to burgeoning online shopping habits.

Intu shares are down 88% from a year ago and Whittaker has also recently sold off a 35% share in Liverpool’s John Lennon Airport to another fund manager, Ancala Partners.Peel Ports reported revenues of £760 million in 2019, growth of 6% from 2018’s figures with pre-tax earnings of £257 million.

More on Freeports - Is the Northern Power house going to take shape.?

 

US AMBASSADOR VISITS PORT OF LIVERPOOL


Liverpool’s importance in the future of transatlantic trade received a major endorsement today (Tuesday 11 February) with a visit from the US ambassador to the UK to discuss commercial opportunities.

Robert Wood Johnson was making his first trip to the UK’s only west-facing deep-sea container terminal, where he was joined by several leading companies already involved in trade with North America.

Ambassador Johnson said: “It was an honour to visit Peel Ports Liverpool, a historic port with a very bright future. This was an opportunity to tour an amazing facility and meet with representatives from important transatlantic companies such as Cargill, ADM, ACL and Jenkins.

“President Trump is committed to striking a broad, comprehensive free trade agreement with the United Kingdom. Cutting-edge deep water ports like Liverpool2 will be the gateway for the increased trade, investment and jobs this agreement will bring both our countries.”

Mark Whitworth, Peel Ports CEO, said: “Liverpool is the UK’s foremost port and is ideally positioned for increased trade with the US and indeed the rest of the Americas. It has the relevant investment and infrastructure to make it the UK’s most important and valuable trade link to take our commercial activities across the Atlantic to a new level.

“As we look ahead to a post-Brexit future, we must make the most of trade opportunities across the Atlantic for the sake of our economy and the Liverpool area is ideally placed to support a positive future for the nation’s import and export activity. Attention has inevitably turned west and we are ready to play our part in ensuring a positive future for UK plc.”

The visit comes days after the UK Government launched its consultation setting out its vision for Freeports. The consultation’s findings will determine which locations could become Freeports at the end of this year, with a view to those sites being open for business in 2021.

The visit was also attended by food and agricultural goods manufacturer Cargill, agricultural bulks distributor ADM, shipping services provider Jenkins Group and shipping line ACL.

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3 hours ago, kibuc said:

A quick mining update from the last few days:

WDO - delivered yet another fantastic drilling update from Eagle River yesterday. Bonkers grades, bonkers widths, they'll be swimming in high-grade ounces for years to come.

PVG - posted 2020 guidance two days ago, grades nowhere near their reserve grade, fell like a rock and deservedly so. Expect a big cut to resources estimate in the future. Grades have been steadily falling for years now. Those guys are frauds. CEO and chief geologist out.

NGD - a bunch of releases yesterday and today: New Afton drillings, production, 2020 plan and guidance. As you would expect, everything not very impressive. Production guidance for Rainy River at 240-260k xD Fourth quarter AISC at RR $2429/oz xD Man they are so fucked that I can't even.

Harmony just bought Mponeng off Anglogold, $200m upfront for 40m ish oz of gold is a ridiculously good bit of business.  The market is currently going WTF, they wont be when they cycle turns and gold kicks off.

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1 hour ago, JMD said:

Interesting times ahead come end of year (...or is it just a Boris bargaining ploy?)

This combined with the Agents post about ports has got me visioning what could pass.  The UK could really put the willie's up the EU, a stone with fault lines waiting for a few taps with a hammer!  We have the initiative, just need no fifth column types.  Could change the regional map of the UK too.  Investing trends will follow.  Exciting.

Edited by Harley

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33 minutes ago, Harley said:

This combined with the Agents post about ports has got me visioning what could pass.  The UK could really put the willie's up the EU, a stone with fault lines waiting for a few taps with a hammer!  We have the initiative, just need no fifth column types.  Could change the regional map of the UK too.  Investing trends will follow.  Exciting.

Its very interesting, could be massive for the UK if done right. Boris needs to deliver on his promise to the North, transport and industry, we shall see. It is wonderful and hopeful to watch.

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8 hours ago, JMD said:

Tdog, I want to be optimistic and I'm hoping its more because Javid wasn't radical enough (or dare I say it intelligent enough). We need real change and although I don't go in for Boris being merely the 'bumbling buffoon' type that media characterise him as being... I am however still suspicious of him being just an opportunist without depth (after all his family are all liberal types).    

As for the mansion tax, I don't think its only the Labour party that will be mooting wealth taxes in future years.

The media are the people that know him.Without boring on,I think a lot of middle aged Tory voters are going to be dissappointed in Boris.Much like they eventually were in Rees Mogg.

Promoting Goldman alumni tells us where we're going...QE,FLS2,HTB3 etc etc.Seems they excluded a few Brexit MP's today

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8 hours ago, Tdog said:

Pound has spiked, so presumably the markets think know Boris is more for the bankers than the plebs.

His family own a letting agency. 

corrected

8 hours ago, Democorruptcy said:

New chancellor Rishi Sunak, ex Goldman Sachs, then hedge fund.

What do the names Hank Paulson,Mario Draghi,Mark Carney,John Corzine,Jim Cramer and Steven Mnuchin have in common?

6 hours ago, kibuc said:

A quick mining update from the last few days:

WDO - delivered yet another fantastic drilling update from Eagle River yesterday. Bonkers grades, bonkers widths, they'll be swimming in high-grade ounces for years to come.

PVG - posted 2020 guidance two days ago, grades nowhere near their reserve grade, fell like a rock and deservedly so. Expect a big cut to resources estimate in the future. Grades have been steadily falling for years now. Those guys are frauds. CEO and chief geologist out.

NGD - a bunch of releases yesterday and today: New Afton drillings, production, 2020 plan and guidance. As you would expect, everything not very impressive. Production guidance for Rainy River at 240-260k xD Fourth quarter AISC at RR $2429/oz xD Man they are so fucked that I can't even.

I still can't forgive myself for not piling into Wesdome back in Nov 18 at CAD$3.70.............Thought I'd wait for a pullbackxD.That's one of those shares that I weighed up and then stuck the same amount in Hecla.............head hits table.

The only good thing about my losses on NGD are that they're more than balanced by gains in SIB.To be fair,I'll be averaging us intomorrow at an even better price than I'd have got today all being well.

 Pamplona Trader has been psuhing Osisko Ro for a while.

IKN was saying PVG will get taken out but much lower.

image.png.151aa69423eabab27181ea9b1b950bd1.png

image.png.eb119e68efe9acd87e429a832bd30c49.png

image.png.006fdbaaea5d0aabe311f978507063a0.png

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4 hours ago, Majorpain said:

Harmony just bought Mponeng off Anglogold, $200m upfront for 40m ish oz of gold is a ridiculously good bit of business.  The market is currently going WTF, they wont be when they cycle turns and gold kicks off.

Best mine in SA.Harmony now control most of the industry there.I think there is a lot of Uranium in that mine as well.Harmony made me a lot of money,but iv always admired the management there.They are real gold miners.Deep mines,experts at pillar mining etc.They have some great areas as well that might hold lots more gold.

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13 hours ago, Majorpain said:

Harmony just bought Mponeng off Anglogold, $200m upfront for 40m ish oz of gold is a ridiculously good bit of business.  The market is currently going WTF, they wont be when they cycle turns and gold kicks off.

It is a very shrewd piece of buisness indeed, but I wonder how they're gonna get moving with Wafi-Golpu if they splash cash on other assets. All that being said, HMY might be the first name on my list if gold tanks.

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11 hours ago, sancho panza said:

What do the names Hank Paulson,Mario Draghi,Mark Carney,John Corzine,Jim Cramer and Steven Mnuchin have in common?

You are only scratching the surface, it's a much bigger group than that!

https://www.independent.co.uk/news/business/analysis-and-features/how-goldman-sachs-took-over-the-world-873869.html

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

https://www.infowars.com/goldman-sachs-investing-in-political-influence/

spacer.png

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1 hour ago, kibuc said:

It is a very shrewd piece of buisness indeed, but I wonder how they're gonna get moving with Wafi-Golpu if they splash cash on other assets. All that being said, HMY might be the first name on my list if gold tanks.

Maybe sell it and then develop all the areas in SA they own.Lots of surface potential as well in the greenstone belts.

WP is an amazing asset for the future though and they might sell half their stake to finance building it.Massive amounts of copper their.

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29 minutes ago, TheCountOfNowhere said:

Would anyone disagree that after yesterday's cabinet shuffle they are about to unleash a tsunami of spending and QE theft? 

 

Db... Do you still see an asset pruce collapse or is it straight to insane inflation as I feared? 

World will be full on spending,they have no choice,politics and the cycle demands it.Remember governments arent driving the cycle,they are simply responding to its effects.Its like the spending coming in the north.I said that would happen right back on page one of this thread on HPC.The politics demand it due to the affects of the long dis-inflation.When the Tories won my seat here in the north for the first time ever,it was because rates topped out in the US in the early 80s.That seems crazy to people,but its true from a macro position.The rest is all cross market to that fact.Tax credits that pulled in mass immigration etc happened because of dis-inflation for instance.That then led to Brexit etc.

I expected lots of stocks to sell off to PE ratios between 5 and 9 and thats exactly where we are now with masses of companies.The headline indexes have kept up due to a very small number of glamour stocks.

I dont know if all stocks will get whacked down,or if there will be sector rotation instead.Thats why i start buying when im happy with price and place buy ladders.I remove all that emotion.

I think most shares will continue lower,but im also pretty convinced inflation loving sectors will be much much higher come 2027/28.So im buying now,with ladders.

I have no worries of been down 20%+ across my portfolio if it happens.Given all the investments are throwing off decent dividends as well i could end up down 10% after divis on a turn and id take a cycle turn on those terms every day of the week.

Edited by DurhamBorn

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With the amount of debt at all levels of society what breaks the debt trend?

Central banks refuse to raise interest rates as it will be like them removing their own control of the debt expansion.

I'm having difficulty with this aspect.

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30 minutes ago, Noallegiance said:

With the amount of debt at all levels of society what breaks the debt trend?

Central banks refuse to raise interest rates as it will be like them removing their own control of the debt expansion.

I'm having difficulty with this aspect.

I'm having difficulty with all of it. 

I keep coming back to... We'll see massive inflation....the British sheeple will pay whatever they want for a house, the see it as a one way bet, no one much cares about shares. 

If the ex goldman sachs banker is handing out money like sweeties their aint going to be a house price crash, it's going going to collapse the currency follower by major social problems 

Next months budget it the most important one in our life time 

The question only remains... When to get all your cash out the bank and go all in. 

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12 hours ago, sancho panza said:

The only good thing about my losses on NGD are that they're more than balanced by gains in SIB.To be fair,I'll be averaging us intomorrow at an even better price than I'd have got today all being well.

Interesting insight from IKN hey. Can’t believe I’m considering another nibble at New Gold ffs :S 

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1 hour ago, Noallegiance said:

With the amount of debt at all levels of society what breaks the debt trend?

Central banks refuse to raise interest rates as it will be like them removing their own control of the debt expansion.

I'm having difficulty with this aspect.

the problem comes with how the MMTers think that inflation is purely monetary in nature.Yes they can control the supply of money.

 

What they can't control is velocity.If we get inflation resulting from rising velocity then quite simply they're play books won't work.
faced with a crashing currency or rasing rates.History shows us most western politicians will raise rates.

 

Our mistakes made by me post 2009 have been to totally underestimate a) how most politicians will selfishly pursue their own interests at the costs of wider society b) how little real world experience some of the msot powerful people in the world have.

This will end in disaster for msot British people(many already suffering despite the supposed headline growth in wealth for the 1% masquerading as wealth for the 99%).My only aim these days is to give my kids options....and food on the table.

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1 hour ago, DurhamBorn said:

World will be full on spending,they have no choice,politics and the cycle demands it.Remember governments arent driving the cycle,they are simply responding to its effects.Its like the spending coming in the north.I said that would happen right back on page one of this thread on HPC.The politics demand it due to the affects of the long dis-inflation.When the Tories won my seat here in the north for the first time ever,it was because rates topped out in the US in the early 80s.That seems crazy to people,but its true from a macro position.The rest is all cross market to that fact.Tax credits that pulled in mass immigration etc happened because of dis-inflation for instance.That then led to Brexit etc.

I expected lots of stocks to sell off to PE ratios between 5 and 9 and thats exactly where we are now with masses of companies.The headline indexes have kept up due to a very small number of glamour stocks.

I dont know if all stocks will get whacked down,or if there will be sector rotation instead.Thats why i start buying when im happy with price and place buy ladders.I remove all that emotion.

I think most shares will continue lower,but im also pretty convinced inflation loving sectors will be much much higher come 2027/28.So im buying now,with ladders.

I have no worries of been down 20%+ across my portfolio if it happens.Given all the investments are throwing off decent dividends as well i could end up down 10% after divis on a turn and id take a cycle turn on those terms every day of the week.

I increasingly keep looking back at tech bubble charts.It's got some of the hallmarks of that bubble.Old economy stocks on the floor,New names riding high ,way past where normal pricing would put them.

Difference this time is the leverage in China and much of the Western world.People keep telling me the banks are more ready this time,but I'm not so sure.

All it takes to destroy wealth is for marginal prices to move eg 100 house estate all sold at £400k,then one sells for £300k and one for £200k and probably 35-40% of the net wealth of most hosueholds on the estate has been destroyed for a period of time until prices move higher.

Personally Im anticipating some sector rotation to occur before the big kahuna.We're already seeing the goldies move higher.Turn in the dollar could set that off.

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1 hour ago, DurhamBorn said:

World will be full on spending, they have no choice, politics and the cycle demands it. Remember governments arent driving the cycle, they are simply responding to its effects. Its like the spending coming in the north.I said that would happen right back on page one of this thread on HPC. The politics demand it due to the affects of the long dis-inflation. When the Tories won my seat here in the north for the first time ever,it was because rates topped out in the US in the early 80s.That seems crazy to people,but its true from a macro position.The rest is all cross market to that fact.Tax credits that pulled in mass immigration etc happened because of dis-inflation for instance. That then led to Brexit etc.

DurhamBorn, comments like the above always fascinate me - there must be a book on this subject just waiting to be written - I wonder, have you thought about writing it? 

There are so many cynical and/or trite socio-political books out there with doomsday themes - however, you could be the first(?) to write one from the perspective of how markets, malinvestment and short-sighted political policies drive toward eventual outcomes (so crucially you needn't go into any cross market/trading specifics that you might rather not divulge (save that for your follow up best seller!)).

I'd wager that 6-months of your time 'invested' in writing would be worth it, especially as book would also be relevant to the huge US readership. Maybe pad it out with historical examples, and lots of charts. You could then promote yourself as an academic type and further clean up on the lecture tour circuit! But seriously, if Thomas Piketty can write the dry tome 'Capital', i'm sure you could create something far more punchy... anyway just saying. 

   

Edited by JMD

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48 minutes ago, TheCountOfNowhere said:

I'm having difficulty with all of it. 

I keep coming back to... We'll see massive inflation....the British sheeple will pay whatever they want for a house, the see it as a one way bet, no one much cares about shares. 

If the ex goldman sachs banker is handing out money like sweeties their aint going to be a house price crash, it's going going to collapse the currency follower by major social problems 

Next months budget it the most important one in our life time 

The question only remains... When to get all your cash out the bank and go all in. 

Markets always hurt the most people possible.The fact "everyone" will pay whatever for a house shows who will be hurt hard.

As for a HPC, its ongoing.My son is looking at a house tomorrow,3 bed semi,built early 2000s sold for £139k then,its up for £110k.Add the inflation from 2002 ,18 years inflation + £29k nominal down thats a hell of a fall.It it has kept up with inflation it would be £227,827.Its down by over 50%.Now i dont expect that house to go up in price,i expect it to maybe hold steady and fall against inflation,maybe another inflation adjusted 50% over the cycle.However my son has £8k in silver.He can fix at 2.14% for 5 years with 10% over payments.Him and his partner will overpay by around that each year so as rates rise at the end of the 5 year fix they would owe half.If rates are 7% by then silver will likely of 400% up,he will sell the silver and clear the mortgage.Is so he will be mortgage free on a decent 3 bed semi at 28 years old.

The fact nobody cares about shares is true,its always like that just before that asset class delivers the goods.

Its like energy now.Everybody hates it because we are going green.To get green demand for other energy will go up by a lot,just after nobody has invested.Oil will be $250+ by 2027/28.

 

 

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