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


spunko

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That is funny :)

3:11pm,

Breaking News

Trump Advisers Consider Interim China Trade Deal to Delay Tariffs

 https://www.bloomberg.com/news/articles/2019-09-12/trump-advisers-consider-interim-china-trade-deal-to-delay-tariffs?srnd=premium

 

40 mins later...

TRUMP ADMIN "ABSOLUTELY NOT" CONSIDERING INTERIM CHINA DEAL: CNBC BBG fake news

https://twitter.com/zerohedge/status/1172160762040770561

 

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2 minutes ago, dgul said:

It feels like there's a quiet panic going on...

 

Nothing to panic about. Economy is doing great and with 0% IR will be even greatererer. China deal absolutely nailed on. Funding secured.

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49 minutes ago, Democorruptcy said:

A couple of years ago I spoke to a friend who still manages a Coral shop and he told me they were taking more money from the machines than they were over the counter. I think the industry will cull a lot of unprofitable shops but given the rise of online betting it's no surprise. I left before the machines came in and the hours were much less. They open earlier on a morning now, are open on evenings and have Sunday racing. I think the hours have been extended and so costs increased for people to play on the machines. When I worked in the bookies they were more like social clubs with a core of regulars. According to my friend it's completely changed now and the older ones dying off aren't being replaced by young ones, who use internet betting instead. The remaining shops need the mug punters to come find them when the other local shops close!

Strangely was jsut coming to psot a random link on this.What you say makes sense.Much like pubs.Younger people drink less and when they do,it's not in dark old school boozers.Places like Nuneaton and Bimingham have loads of boarded up pubs.

 

2018 piece,hattip ToS,

 

William Hill closing 900 shops.After FOBT.

Must be a lot of business rates not going to get collected for teh Treasury........they and coffee shops dominate Leicester High St

https://www.theguardian.com/business/2018/aug/03/william-hill-could-close-up-to-900-betting-shops-after-fobt-clampdown

5 minutes ago, kibuc said:

 

 

Nothing to panic about. Economy is doing great and with 0% IR will be even greatererer. China deal absolutely nailed on. Funding secured.

You've missed your calling life life Kibuc.You should work for Trumps twitter arm.It'd be like that movie with the puppets coming to life.

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14 minutes ago, dgul said:

It feels like there's a quiet panic going on...

The market just realised Draghi was full of hot air and the ECB cant QE to infinity without Germany's say so.  Euro/USD is actually higher after they dropped interest rates and restarted the printing presses.

Central bank credibility going out the window is never going to be a good thing (wider perspective!) in these bubbletastic times.

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3 hours ago, feed said:

Decl: own wmh 

Online already huge and there has been a couple of waves of consolidation. See Betfair/Paddy 2015.  Probably one of the more mature online industries.  There is a long history to online books, from when the Vegas casinos thought they wanted an online presence.  So some mainstream have a presence near 20 years and they’re got very good at it, but as always it’s mobile/apps that expanded online business more recently.   Particularly in-play.   

They (industry in general) are in a position with a lot of high street stores from past consolidation that aren’t worth the rents now that the money laundering business has gone away.  My opinion – they’re beaten down because of this.   I think Democorruptcy worked in a shop, he maybe able to indicates how profitable they are without the machines.  

DB’s opinion on further consolidation maybe right.  But either way number of high street stores will fall markedly.   

There has been a lot of talk recently about the US opening up, but there has been that for 20 years as well, so I wouldn’t put too much in it.
 

I actually know a woman whose 2 daughters are managers at local bookies think it might be William hill I will pump her for information

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7 hours ago, Harley said:

Babcock....

https://uk.advfn.com/stock-market/london/babcock-BAB/share-news/Babcock-International-Group-PLC-Preferred-bidder-f/8071206


Bought following the sentiments on this thread (infrastructure spending) and given the yield (BAE was/is too expensive).  Run up now but thanks!  Need another one in the engineering and/or defense sector.  Suggestions?

I bought Cargotec as it makes lots of things for ports and forestry etc but its gone up 20% in a few weeks,not defence.Iv also got ladders in place or Komatsu,but havent bought yet as first ladder is 13% below where we are now.I know you dont like ADRs,not sure if you can buy direct in Japan.

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26 minutes ago, stokiescum said:

I actually know a woman whose 2 daughters are managers at local bookies think it might be William hill I will pump her

No doubt you will!

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5 hours ago, Loki said:

Has anyone any thoughts on rising food prices within the context of this thread? 

I bought some Cresud the other week after the Argentine peso collapsed. One for the brave or foolish. They own farmland and farms in South America which I like; plus a big stake in an owner of Argentine shopping malls which I don’t. Again one for the brave or foolish.

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5 hours ago, sancho panza said:

Dread to think what the rest look like lol

I was talking to someone in the trade the other day and they were saying these companies will shrink a lot due to growing prevalence of online and the limits on the crack machines.

DM you got a view with your history in the indrusty?

@Democorruptcy

image.png.79f5c705f3dca4f85d60ce15770059e8.png

image.png.3aa6918782be2974879517a15f7e3de0.png

It’s the cash flow statement you should be looking at.

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TheCountOfNowhere

Is it still debt deflation, fill your boots then reflation. 

 

Or was the debt deflation 2007 to 2010ish and its full on crazy inflation from here on in. 

 

Answers on a postcard please. 

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On ‎11‎/‎09‎/‎2019 at 17:23, DurhamBorn said:

In short yes i did set it up to exploit the cycle.I saw many companies closing and moving production there,so i decided to learn all i could,do the whole lot myself and undercut them and thats what i did.In affect i had to be an expert in about 10 different jobs that would be senior manager level in a big business.I challenged myself in that business to a really high standard.I actually started to run it down when it was doing very well,and iv just stopped now and sold my last stock.I now have no ongoing costs apart from some income tax and NI.

Its a very good question about the next cycle.I live a very frugal life and i have enough to retire.I enjoy many things that are free and have lots of interests.However there is a part of me that says really i should do something else once i leave where im working at the minute (bust should hit them hard soon,nobody sees it coming and i feel sorry for workmates etc,though i keep quiet of course).Im not sure what though.With the standard of people on this thread perhaps we could all set up a small Ltd company doing something and see where we can take it.

thanks for reply DB,  I think this excellent blog as being a forum for ideas so that people can better anticipate, prepare and exploit the next market cycle. It necessarily focuses on investments and markets, but also highlights other themes, for example, 'frugal living' as I believe this topic links directly into the predicted upcoming market shift away from a consumer driven society. Another related topic I think useful to consider is small business ideas which are well suited for the next cycle. Just to be clear, not trying to detract from the main ethos of this thread into irrelevant business discussions, nor to encourage people away from their 'safe employment', but just to provide potential extra options/or give people a head start on ideas for additional income, etc. Not sure what others think?    

For me personally, although the next cycle is expected to punish housing values, I am attempting to 'triangulate my housing equity' - a clumsy phrase I know! - but what I hope to find is a business suited/particularly exploitative of the next cycle, that can be operated from home... the triangulation bit comes from the home/work dual aspect combined with attempting to 'protect' (re. next cycle property risks) the capital invested in the property by making it generate an income (along the lines of a 10% divi perhaps?).

Any ideas for achieving this 'ideal' are very welcome.

 

            

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2 hours ago, DurhamBorn said:

I bought Cargotec as it makes lots of things for ports and forestry etc but its gone up 20% in a few weeks,not defence.Iv also got ladders in place or Komatsu,but havent bought yet as first ladder is 13% below where we are now.I know you dont like ADRs,not sure if you can buy direct in Japan.

Thanks.  Will have a look as well as reconsider ADRs/GDRs (counter-party/liquidity risks?) in a more risky portfolio. 

Which exchange (HEX?) did you buy Cargotec on if I may ask?  

I've only just had signals (DYOR!) on the weekly and monthly charts (bullish).  You must have a superior (advanced) system to have bought at the August low!  Was it those prior long term support levels that did it for you, if I may ask?

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7 hours ago, Harley said:

Yes, but agri commodities are quite cheap ATM.  More due to sterling falls which may have bottomed now.  I'm looking for agri and food processing companies but little at good divs.  Looks better with my value investor hat on though.  Also ready to jump on commodities should that time come.  Holding PMs has been a good sterling hedge but any further rise may more be due to fundamentals (i.e gold in USD goes up faster than cable).

Ha, said that and then softs and livestock had a fair day today with my HOGS up 9%.

CRB up with WTI down - something is going up in compensation (plats and plads?) - time to 'ave a look!

CRB might even beginning to look bullish.

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32 minutes ago, Harley said:

Thanks.  Will have a look as well as reconsider ADRs/GDRs (counter-party/liquidity risks?) in a more risky portfolio. 

Which exchange (HEX?) did you buy Cargotec on if I may ask?  

I've only just had signals (DYOR!) on the weekly and monthly charts (bullish).  You must have a superior (advanced) system to have bought at the August low!  Was it those prior long term support levels that did it for you, if I may ask?

Yes on the HEX through Hargreaves.I need to go through a lot of the stocks on other markets,but simply havent had the time,hopefully i will soon.

I never buy on charts Harley,i buy from my cycle and liquidity road maps,though i do have some sentiment numbers i use on first ladder buys.I bought all the reflation stocks i put up a few pages back all on the same day and within a few minutes.I simply went through them buying.Some i didnt even go into their balance sheets too much.I look at sectors,then decide on a few companies.Iv actually sold a couple already (oil companies) and taken profits as my road map says oil can go much lower.I dont usually trade at all,its just at cycle turns we get a lot of large swings.

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1 hour ago, JMD said:

thanks for reply DB,  I think this excellent blog as being a forum for ideas so that people can better anticipate, prepare and exploit the next market cycle. It necessarily focuses on investments and markets, but also highlights other themes, for example, 'frugal living' as I believe this topic links directly into the predicted upcoming market shift away from a consumer driven society. Another related topic I think useful to consider is small business ideas which are well suited for the next cycle. Just to be clear, not trying to detract from the main ethos of this thread into irrelevant business discussions, nor to encourage people away from their 'safe employment', but just to provide potential extra options/or give people a head start on ideas for additional income, etc. Not sure what others think?    

For me personally, although the next cycle is expected to punish housing values, I am attempting to 'triangulate my housing equity' - a clumsy phrase I know! - but what I hope to find is a business suited/particularly exploitative of the next cycle, that can be operated from home... the triangulation bit comes from the home/work dual aspect combined with attempting to 'protect' (re. next cycle property risks) the capital invested in the property by making it generate an income (along the lines of a 10% divi perhaps?).

The ideas I am researching are holiday-letting business and storage business. Any other ideas for achieving my 'ideal' would be very welcome.

 

            

 

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5 minutes ago, DurhamBorn said:

Yes on the HEX through Hargreaves.I need to go through a lot of the stocks on other markets,but simply havent had the time,hopefully i will soon.

I never buy on charts Harley,i buy from my cycle and liquidity road maps,though i do have some sentiment numbers i use on first ladder buys.I bought all the reflation stocks i put up a few pages back all on the same day and within a few minutes.I simply went through them buying.Some i didnt even go into their balance sheets too much.I look at sectors,then decide on a few companies.Iv actually sold a couple already (oil companies) and taken profits as my road map says oil can go much lower.I dont usually trade at all,its just at cycle turns we get a lot of large swings.

Thanks, DB. With what you and Cattle Prod have stated, I am of the mind that the risk on oil is all to the down-side at present; I have traded PMO several times, finally got out of a tricky position in the green yesterday. Doubtless oil's time will come, but for me that time is not now.

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1 hour ago, JMD said:

thanks for reply DB,  I think this excellent blog as being a forum for ideas so that people can better anticipate, prepare and exploit the next market cycle. It necessarily focuses on investments and markets, but also highlights other themes, for example, 'frugal living' as I believe this topic links directly into the predicted upcoming market shift away from a consumer driven society. Another related topic I think useful to consider is small business ideas which are well suited for the next cycle. Just to be clear, not trying to detract from the main ethos of this thread into irrelevant business discussions, nor to encourage people away from their 'safe employment', but just to provide potential extra options/or give people a head start on ideas for additional income, etc. Not sure what others think?    

For me personally, although the next cycle is expected to punish housing values, I am attempting to 'triangulate my housing equity' - a clumsy phrase I know! - but what I hope to find is a business suited/particularly exploitative of the next cycle, that can be operated from home... the triangulation bit comes from the home/work dual aspect combined with attempting to 'protect' (re. next cycle property risks) the capital invested in the property by making it generate an income (along the lines of a 10% divi perhaps?).

The ideas I am looking at are holiday-letting business and storage business. Any other ideas for achieving my 'ideal' would be very welcome.        

 

Everyone - Sorry for double/triple posting this, the edit function temporarily didn't work... and instead generated new posts.

 

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8 minutes ago, Ponty Mython said:

Thanks, DB. With what you and Cattle Prod have stated, I am of the mind that the risk on oil is all to the down-side at present; I have traded PMO several times, finally got out of a tricky position in the green yesterday. Doubtless oil's time will come, but for me that time is not now.

I see oil and gas huge winners in the next cycle,oil will go over $200,probably over $300.However i think in the deflation ahead it will get smacked down.Demand will fall quick and fast,too fast almost.People need to remember that what the ECB was really saying today was we know deflation is upon us.The market thinks rates will be minus in 2025 in the EU.They will be 5%+ and on their way to double figures.

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25 minutes ago, DurhamBorn said:

I see oil and gas huge winners in the next cycle,oil will go over $200,probably over $300.However i think in the deflation ahead it will get smacked down.Demand will fall quick and fast,too fast almost.People need to remember that what the ECB was really saying today was we know deflation is upon us.The market thinks rates will be minus in 2025 in the EU.They will be 5%+ and on their way to double figures.

So in theory you could go for a 15 year mortgage at fuck all interest potentially see a 40% house price crash but instead of overpaying you buy gold wait for that to increase sell it and buy oil at its lows then just sit there and wait for your assets to outstrip your loses on the house em

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53 minutes ago, stokiescum said:

So in theory you could go for a 15 year mortgage at fuck all interest potentially see a 40% house price crash but instead of overpaying you buy gold wait for that to increase sell it and buy oil at its lows then just sit there and wait for your assets to outstrip your loses on the house em

Yes you could.I paid my house of with my BAT shares i bought for £7k,house was £50k.The way to look at the next cycle is everything going backwards from where we are at 4x the speed back to the early 80s.

If i was going to do it again,id look to buy perhaps 1/3rd the value in a mix of PM miners and/or oil and gas companies.Quality mid sized ones.Re-invest the dividends and hold until around 2026/7 then sell and pay off the house.

The risk is you cant meet the mortgage payments in the period of course,but always ways around that like letting rooms etc.

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2 hours ago, TheCountOfNowhere said:

Is it still debt deflation, fill your boots then reflation. 

 

Or was the debt deflation 2007 to 2010ish and its full on crazy inflation from here on in. 

 

Answers on a postcard please. 

Debt deflation to come.Interest rate position is hugely deflation inducing.Its the CBs action when the deflation hits that causes the reflation cycle.What you are seeing now is markets miss reading where we are in the cycle.They think QE will cause the economy to pull ahead again,but its too late.Fed hasnt acted and its lack of dollar liquidity that will strangle things.Markets arent linear,you need to step back and look at the lags.Fed went tight two years ago.Bear market rallies can be very profitable,and many stocks might be close to bottom even with a crash they are so beat up.Positioning isnt a science and the aim is to avoid most of any falls,but capture most of the next cycles increases.If we are right there will be huge profits,but only in certain sectors.Others will struggle with falling profits and a distribution cycle.

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