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

[DurhamBorn]

2 minutes ago, NogintheNog said:

I'm in the same boat. Currently trying to move a pension to a SIPP and Phoenix Life couldn't be more inept if they tried. I asked them to sell the assets over a week ago and still nothing has happened! But who best to complain to? The FCA?

Pension ombudsman,im also moving another very small pension,its only £5k,but its from the year i went back to work last year and its with Premier Pensions,they are beyond clueless.Iv got the managing directors phone number and address,my daughter is married to a gypsy,might get him to tell one of his cousins to give his lawn a bit of attention when they are passing.He is ruining some of my family life having to sort it,maybe il ruin some of his.

2 minutes ago, Noallegiance said:

Me, too.

Could this be a combination of the incapability of modern companies to simply do their job alongside liquidity problems?

No,they just want to feast on the fees as long as they can.They frustrate the process as much as they can.

[Harley]

32 minutes ago, CVG said:

IAG down another 7% today. I'm going to have to open a position at this price!

To think I beat myself up for missing the last run up after the strike!  You just never know!

[Harley]

1 hour ago, Agent ZigZag said:

I just wish I could buy the oil sector. Hargreaves still havent transferred my pension to my SIPP. I fear I my miss out here big time.

Haven't you done well waiting on oil?  Careful, they may ask for a cut!

I've done a few transfers in to HL, no problems.  Does take time though.  Hope you're at least getting the cash bonus!

[Democorruptcy]

48 minutes ago, Bricks & Mortar said:

Bad news sells.
Nobody wants to report that the number of active cases has been falling for more than a fortnight.

https://www.worldometers.info/coronavirus/coronavirus-cases/#active-cases

I'm not in the it's just flu don't worry about it camp. Partly due to personal circumstances, I don't want to catch a lower respiratory infection that nobody has any immunity to, unlike flu which has been around a long time! After 10 years as a betting office manager before the smoking ban came in, my chest isn't the best, I left there because of it on medical advice.

Personally I wouldn't put too much store in those figures. China is 90% of them but they have had a proper lock down and local prefects warned they will be held responsible for more infections. We don't know what will happen when they try to resume normality.

It's clearly spreading outwards now, this has the individual country figures

Re the death rate not being too bad and comparing it to SARS etc. We know the SARS death rate because it's over. The true death rate for NCV will not be known until it's over. Dividing deaths by infections ignores all the critical/severe cases that are unresolved but a lot of them will be deaths. The ongoing death rate being low can just mean more people are getting infected but haven't died yet.

Of course more old people with existing conditions are dying, they are the weakest so go first. A lot of young fit medical staff have died in China including those who tried to bring it to light.

I cannot see the NHS or contact tracing coping for a significant amount of numbers

My biggest concern is that in the UK it's going to be deliberately spread. If it becomes thought that is happening, it will lead to racial tension and civil unrest.

Pandemics usually run in waves. First wave in Winter, less problem in summer, 2nd wave in Autumn (that's usually the biggest killer).

Have a nice day. 

[Alifelessbinary]

It’s still too early to tell about Coronavirus. Personally I think it’s a good test run for a potentially more serious virus in the future. At least it gives us the chance stress test the systems and China will see that trying to cover it up has caused them much larger long term damage.

From a markets perspective it’s causing uncertainty, as it’s difficult to fully assess the impacts. The next few weeks will be critical to see whether it can be contained or not. 

The good news is that this is simply noise against the wider economic backdrop. I’ve set my ladders and will be mechanically buying to avoid emotion taking me off course. 

The consistent depth of knowledge on this thread is impressive. 

[DurhamBorn]

23 minutes ago, Harley said:

Haven't you done well waiting on oil?  Careful, they may ask for a cut!

I've done a few transfers in to HL, no problems.  Does take time though.  Hope you're at least getting the cash bonus!

Reminds me to check the latest though so a chance a p*ss post might follow!

I lost a year's tax relief with TD Waterhouse once.  I shouldn't have left it so close to the last minute though.  Agile these folk ain't!

Yes, I'm a SIPP tart (well actually not me)!

I think a lot depends now on if they are in the Origo system or not.Those that are seem to be around 10 days,those that arent take forever.Always asking for this signed,that signed,a copy of this and that.It will never be a day for safety reasons,as some checks do need to be done,but 5 days should be the max.When talking to them though they dont seem to have any thoughts on why people might want speed.My last one i said i wanted to move now while the 15 year gilt was at 500 year lows on the yield,they couldnt understand why that mattered.Incredible.Its an amazing industry to work in though,it seems like the last great area (outside of house builders of course) where you can fleece the public in gigantic proportions.The industry has pretty much put everyone in 60/40 or 40/60 funds assuming they can return 7% so they can skim their 2.1% fees,tell the punter,theres your 5% drawdown,alls good.The problem is when it isnt of course,as i think the next cycle will show people.

[Harley]

3 minutes ago, DurhamBorn said:

....It seems like the last great area (outside of house builders of course) where you can fleece the public in gigantic proportions......

My journey started with the supermarkets, moved swiftly on to financial firms, then broadband, then tax, then the So-Called BBC.  I've probably missed out many others as it is now, to borrow a current phrase, endemic!  I swear if I had a new child, I'll call it "Aldi"!  But I won't because some things are still worth paying top dollar for!

PS:  Loving my new FT subscription.  Have to dodge the woke stuff but some jewels, the best being their stock screener.  Yeh, no more glacial Morningstar! 

[DurhamBorn]

4 minutes ago, Harley said:

My journey started with the supermarkets, moved swiftly on to financial firms, then broadband, then tax, then the So-Called BBC.  I've probably missed out many others as it is now, to borrow a current phrase, endemic!  I swear if I had a new child, I'll call it "Aldi"!  But I won't because some things are still worth paying top dollar for!

PS:  Loving my new FT subscription.  Have to dodge the woke stuff but some jewels, the best being their stock screener.  Yeh, no more glacial Morningstar! 

I used to buy the FT when i was in my early 20s in the paper shop on the way to work.They used to have 3 copies,and that was Staindrop,a posh place around here.

My son works for Aldi,he was deciding what to do and my mate is a gaffer there and said he would get him on.He isnt on big money £11.20 an hour,but loves it.He is in a distribution centre.The beauty is Aldi let you go as high as you want.They have offered to train him for his HGV in another year and he can then work for them doing that,He is going to do it.

Iv got tax down to as low as i can now,zero income or NI,very little VAT (buy everything 2nd hand) and fuel is £10 a week.Cant do anything with council tax though.To get that back i had to get myself a partner who works at the council and so il get her pension,

[JMD]

12 hours ago, Noallegiance said:

All this talk of electric and/or hydrogen vehicles got me wondering what future 'money' will look like.

The %age of vehicles (new or second hand) bought with savings must be miniscule these days. So who the fuck is going to have equivalent £35k to get an eco-friendly chariot after the biggest credit event in history?!

Surely car ownership is 'old hat' and the lease model will be further adapted. Car manufacturers already prefer this way of operating, and with future cars having less engine parts to maintain they will like renting their assets to you - at an even higher  premium - all the more.    

[Noallegiance]

Just now, JMD said:

Surely car ownership is 'old hat' and the lease model will be further adapted. Car manufacturers already prefer this way of operating, and with future cars having less engine parts to maintain they will like renting their assets to you - at an even higher  premium - all the more.    

Well, that's kinda my point. More credit after a credit bust.

Awesome.

[DurhamBorn]

@Democorruptcy Cineworld £1.42 ,all that debt might be a bit of a problem 

[TheCountOfNowhere]

3 minutes ago, Tdog said:

Carney and the gang to the rescue.

https://www.bbc.co.uk/news/business-51700935

Will they bail out the investors while peopke cant get into hospital? 

 

The bankers ought to be careful the public could turn on them. 

[Boon]

Bought BP, Shell and Aviva this morning on market open....typical that the market gives up its gains almost immediately after!

[DoINeedOne]

38 minutes ago, JMD said:

Surely car ownership is 'old hat' and the lease model will be further adapted. Car manufacturers already prefer this way of operating, and with future cars having less engine parts to maintain they will like renting their assets to you - at an even higher  premium - all the more.    

Saw this yesterday don't need a license just 19.99 a month

https://techcrunch.com/2020/02/27/citroen-introduces-a-two-seat-ev-that-costs-e19-99-a-month/

 

[JMD]

20 hours ago, Harley said:

Great to have you back on board.  No idea why you thought you were fired!  Spot on about the power of what it shows, rather than what I was aiming for it to show.  And that's a worthy exercise to me.  Just to re-iterate, the three top holdings in the global Communications ETF (IXP) are Facebook (12%), Alphabet Inc Class A (11%), and Alphabet Class B (11%).  That's a 32% holding of those three (two!) US stocks.  Vodafone is 1.6%.  The segment benchmark for the US region is 38% and the IXP actual allocation is 69%, although I accept (as you say) regional splits are very difficult (these actually represent company domicile).  Essentially, IMO, "Communication" (and to some extent "Global") is so broad as to be meaningless.

PS: BTW can you imagine how hard some of these collective instruments will fall if a select few stocks (e.g. FANGS) should fall hard even though you bought one for diversification?  How will liquidity hold up?  Will you be able to sell the ETF, fund, etc or will you be locked in?  Hell, do you even know what's in your fund (Woodford at least listed his holdings)?  And so on.  I'd rather the pain of selecting individual stocks (although I do hold some ETFs) than that potential exit pain (been there already!).  Each to their own.  Just worth thinking about, eyes wide open and all that.

Yes, same here. But i must admit that I was a reluctant convert to shares. They still sorta scare me (!?) as I realise I haven't got the skills to adequately rate them. But i'm still learning and am very grateful to the very knowledgeable experts here for their views and generous explanations (obviously no advice, is definitely never ever-ever, given or taken!).

But one of the main takeways for me personally is that - with a good understanding of the next cycle and its themes / plus the correct selection of which type of companies will likely benefit from next cycle - I actually think that etfs/funds can be adequately and preferably replaced, within a portfolio, by big oil stocks (I view them as energy funds without the charges), telecom stocks (communications funds), etc. I'm still trying to develop this idea for other sectors, i.e. commodities/miners, etc. The metric/theme i'm using is to find those companies with next-cycle strategic assets, companies '... close to the sources' - I realise this is very generic but it works for a basic buy-and-hold investor like me, along side of course the macro/next cycle themes expressed within this blog.

[dgul]

5 minutes ago, Tdog said:

With the utterly useless east European Juggernaut drivers on our roads you'd need a death wish to drive that.

I say East European as lorry drivers never used to be so utterly useless, and pull out to overtake regardless of whether a car is driving past them ... back in the day.

They're designed for towns as a replacement for the moped.  Seems reasonable for that role.

[Well, it is for the UK, where people don't ride mopeds as even if the cars weren't trying to kill you, the weather isn't up to it.  If all the city commutes and kids went to one of those then it would be broadly positive for UK roads]

[Loki]

8 minutes ago, dgul said:

They're designed for towns as a replacement for the moped.  Seems reasonable for that role.

[Well, it is for the UK, where people don't ride mopeds as even if the cars weren't trying to kill you, the weather isn't up to it.  If all the city commutes and kids went to one of those then it would be broadly positive for UK roads]

There was a Top Gear where James May (the sensible one) said small cars don't make much difference in city traffic as they are still too big compared to a bike.  Parking spaces notwithstanding i can see his point

[Democorruptcy]

54 minutes ago, DurhamBorn said:

@Democorruptcy Cineworld £1.42 ,all that debt might be a bit of a problem 

You nearly weakened my resolve in shorting it but I just wouldn't listen!

NCV obviously helping. The prospect of debt to service and vanishing customers isn't going to help a lot of firms. CB's might reduce rates to make debts a little cheaper but that won't improve demand enough. It's going to have to be helicopter money this time?

[DoINeedOne]

Saw this last summer, then dropped the car of to the mechanics few weeks later and because it was a nice day thought i would walk home because i had recently seen this image i noticed more and more how many cars i was walking past as they were stuck in traffic just had 1 person 

Even the local school you see mums driving 5-10 minutes down the road 

 

I now refuse if i can to go anywhere during rush hour as working from home has spoiled me, the traffic at rush hour blows my mind and people do that every day just as i used too

[JMD]

5 hours ago, MrXxxx said:

This is the issue with (some) ETFs, not that all ETFs and/or passive investing is bad. In fact can give those with relatively small sums access to greater diversification. I also read somewhere that you can get DIY ETFs in the US, where you pick the company's and % of ETF...not sure of the fees on these, and how you would check their respective performance against an index (I.e what index?), but it seems to solve the main issue of market cap.

Yes your correct, I should have clarified things more - that so many of these type of funds are now risky due to lazily mimicking the malaise of stock market mis-investment, but at some point after the looming market shake down, I will be looking into EM funds/etfs and other thematic funds/etf's if they provide access to 'difficult to invest in' markets, but will be keeping my shares. 

Good point about diy etf's, if only these were available for us here. Perhaps after our new US trade deal...?

[Loki]

5 minutes ago, JMD said:

Perhaps after our new US trade deal

Good point! Will we get access back to things like URA, I wonder

[DurhamBorn]

20 minutes ago, Democorruptcy said:

You nearly weakened my resolve in shorting it but I just wouldn't listen!

NCV obviously helping. The prospect of debt to service and vanishing customers isn't going to help a lot of firms. CB's might reduce rates to make debts a little cheaper but that won't improve demand enough. It's going to have to be helicopter money this time?

Id expect the CBs to act the same as normal and the market to think that will sort things,only for it not to.Governments need to ramp up spending quickly for a decade.They will,just not quite yet.

[JMD]

3 hours ago, NogintheNog said:

I'm convinced it will be a combination of both technologies due to the inherent synergies. (My god, I'm starting to sound like my managers at work!) Plug in Battery for short distance commutes, and Hydrogen reverse electrolysis for the long hauls.

As MrXxxx says this technology will have improved multitudes in the next ten years.

Very interesting car hybrid ideas there. I hope it happens.

But my view is that If 'only' road haulage and sea shipping (expanded due to less plane freight/but diminished due to less offshoring?) were the only up-takers, hydrogen would still I think have big investment potential.  

[Democorruptcy]

Surplus Economics latest 

https://surplusenergyeconomics.wordpress.com/2020/02/29/165-to-catch-a-falling-knife/

 

[Talking Monkey]

3 hours ago, Democorruptcy said:

I'm not in the it's just flu don't worry about it camp. Partly due to personal circumstances, I don't want to catch a lower respiratory infection that nobody has any immunity to, unlike flu which has been around a long time! After 10 years as a betting office manager before the smoking ban came in, my chest isn't the best, I left there because of it on medical advice.

Personally I wouldn't put too much store in those figures. China is 90% of them but they have had a proper lock down and local prefects warned they will be held responsible for more infections. We don't know what will happen when they try to resume normality.

It's clearly spreading outwards now, this has the individual country figures

Re the death rate not being too bad and comparing it to SARS etc. We know the SARS death rate because it's over. The true death rate for NCV will not be known until it's over. Dividing deaths by infections ignores all the critical/severe cases that are unresolved but a lot of them will be deaths. The ongoing death rate being low can just mean more people are getting infected but haven't died yet.

Of course more old people with existing conditions are dying, they are the weakest so go first. A lot of young fit medical staff have died in China including those who tried to bring it to light.

I cannot see the NHS or contact tracing coping for a significant amount of numbers

My biggest concern is that in the UK it's going to be deliberately spread. If it becomes thought that is happening, it will lead to racial tension and civil unrest.

Pandemics usually run in waves. First wave in Winter, less problem in summer, 2nd wave in Autumn (that's usually the biggest killer).

Have a nice day. 

Why does the second wave kill more