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

[Green Devil]

2 hours ago, Loki said:

 

It's a good gif, but a picture of them shoveling the money into a banksters fat pockets would actually be more accurate. 

[Van Lady]

1 hour ago, DurhamBorn said:

Its a shocking situation it really is.The whole industry is simply not good enough.I noticed today they are all trying to get the government to bring forward the move to 57 on pensions citing protecting the public,when we all know its more protecting their fees.The government is sending out a terrible message pushing back the age all the time.Im hoping they leave it as 57 in 2028 as im 55 in 2026 and would be able to go in drawn at 55 still.They shouldnt be able to change the dates on private pensions as people plan for decades.I hope you get the compo from them to cover losses.All these messages back and forth on simple questions is what frustrates things.

Yes the government never thinks through properly on how decisions affect ordinary people who have planned then the goal posts change.

Now they have the audacity to expect retired nhs workers to return to work after retirement has been delayed to backup nhs if virus takes off.

I thought this lady made some good points in this bbc interview about the government expecting retired nhs workers to oblige. Very politely it’s a big fuck off from her. However if she’d retired at her expected retirement date I’d bet she’d be one of the ones in the first of the queue to help her community/country. 

 

[Ash4781b]

On 29/02/2020 at 14:05, dgul said:

I'd suggest that we're on the cusp of emergency support (ultra cheap credit) to companies affected by nCoV (which will end up being 'all of them').  If they can get this cheap credit in time their share price will rocket.

 I see some companies can allow home working. Well that’s great if you can but if you can’t and debts still falling due. So how do you route funds to fix this  through a bank? On flip side I guess maybe a labour shortage. Maybe a debt amnesty though might have to just send cheques out to everyone?

 

[dgul]

1 minute ago, Ash4781b said:

 I see some companies can allow home working. Well that’s great if you can but if you can’t and debts still falling due. So how do you route funds to fix this  through a bank? On flip side I guess maybe a labour shortage. Maybe a debt amnesty though might have to just send cheques out to everyone?

 

Quite.  As it stands the CB actions will support the multinationals, and there's nothing out there for everyone else, other than 'stimulating demand'.

I really think they should do more -- there'll be plenty of small companies out there with fixed costs but dramatically lower turnover who'll be struggling.

[dgul]

nCoV at VOD headquarters...

[leonardratso]

i caught it thru the phone.

[MrXxxx]

11 hours ago, onlyme said:

It is probably not too far off, both techs are  improving, the Nexo is actually Hyundai's second gen FC car, 50% increase in fuel cell stack energy density, 5% overall improvement in efficiency on their second spin.

Considering the number of different new battery chemistries being investigated I think the chances of one tech leapfrogging in the other in terms cost/efficiency probably on balance in favour of the EV. H2 production, storage, distribution may get cheaper but with such a large differential it needs to get way cheaper to be even in the same ballpark.

Shows how out of touch I am, the last I knew you had to drive with a man waving a white flag in front of you! :-)

[Craig]

18 minutes ago, dgul said:

nCoV at VOD headquarters...

Was wondering why it was flagging while everything else seemed to be green today.

[Barnsey]

Markets heading into space towards US market close, futures looking upwards too. Coordinated G7 central bank action being priced in for tomorrow’s midday meeting.

[TheCountOfNowhere]

Just now, Barnsey said:

Markets heading into space towards US market close, futures looking upwards too. Coordinated G7 central bank action being priced in for tomorrow’s midday meeting.

Crooks 

[Loki]

3 minutes ago, Barnsey said:

Markets heading into space towards US market close, futures looking upwards too. Coordinated G7 central bank action being priced in for tomorrow’s midday meeting.

What site do you use to check this?

[Barnsey]

3 minutes ago, Loki said:

What site do you use to check this?

Investing.com 

[dgul]

Just when you think things have gone completely mad -- they go a bit madder.

The S&P today has been bonkers.

[Barnsey]

9 minutes ago, dgul said:

Just when you think things have gone completely mad -- they go a bit madder.

The S&P today has been bonkers.

#Liquidity, nothing more nothing less. Heck of a rally, Dow up 5.1% today. The risk now is whether the G7 central banks don’t follow through tomorrow, the meeting taking place pre US market open, which is why we’ve seen this action.

[BadAlchemy]

2 hours ago, Green Devil said:

"holy shit, people are dying in the streets. Its a good excuse to make our bankster mates richer" 

Fuckers. 

Not to mention all the suckers with pensions etc invested in the over valued deflation cycle stocks who have just been panicked into selling at a loss and have eaten their share of all that QE debt. Nice one. Probably have to work longer and pay more taxes now as a result. If I were really tin foil hatted I might wonder if this Corona virus had been manufactured just for such ends. It's a gift to the bankers/elites either way.

[Barnsey]

That 5.1% jump in the Dow today was the biggest since 2009 btw

[M S E Refugee]

Paper loss today after being short the market still mostly in cash though.

It looks like the FED is going head to head with COVID 19 not sure that the FED can win this one.

[StrugglingMillennial]

12 hours ago, DurhamBorn said:

 

Im in a similar boat in a way as im waiting on a transfer.It is seperate to my portfolio,but still iv never known anything more frustrating that these pension transfer.It has nearly driven me mad sorting it out.What hope the lads i used to work with?.

Is now really the time to buy anything?

I thought we were still on the way down

[sancho panza]

6 hours ago, kibuc said:

Things are still all over the place. New Gold +10%. Alexco -5%. Eldorado +5%. Impact -7%. 

It's tempting to trim my goldies and go very heavy on Alexco.

I think gold is looking good to go from here.stay strong there K

My  reasoning thus

1) gains to 2020 from 2018 have been in spite of strong dollar,plenty of risk out there

2) QE/ZIRP looks likely to weaken dollar which could create strong tailwind for the yellow stuff

3) weak dollar will also contribute to inflationary pressures which could be positve for yellow stuff

We bought the dip today.

Must say tho,depsite having sworn not to buy any more smallies,I was lookign at AXU/ITR and got to say I like the look of em at this price.

[sancho panza]

8 hours ago, DurhamBorn said:

@sancho panza agree,every profit downgrade will be blamed on it.Easy way out for a CEO.Printing was needed 18 months ago,so it will not stop the damage the economy is in,but will see people wake up to the inflation threat.Im not going to do any road map work for a while as im pretty much now concentrating on buying companies and allocation,but il probably keep doing oil for the interest of the thread.Also my $ is showing down 10% from here,so around 90

Big oilies showing disticnt signs of life today.......Exxon up 4%

[Loki]

17 minutes ago, StrugglingMillennial said:

Is now really the time to buy anything?

I thought we were still on the way down

Laddering, to take timing out of the equation so you don't have to worry about hitting the bottom exactly

I think.

(Of course you could just start laddering from now, or the next drop.  Don't forget you'll get dividends from the point you buy)

[sancho panza]

https://wolfstreet.com/2020/03/01/chinas-non-manufacturing-manufacturing-pmis-show-to-what-unfathomable-extent-the-economy-has-collapsed/

And in China, both, the PMI for the non-manufacturing sector and the PMI for the manufacturing sector, released on March 1, have collapsed to unfathomable lows, showing to what extent the measures to impede the spread of the coronavirus have shut down the economy.

Even non-manufacturing activity collapses.

The official Non-Manufacturing PMI, released by the National Bureau of Statistics, collapsed from 54.1 in January (still well into expansion mode) to a previously unthinkable low of 29.6 in February. The horizontal gray line at 50 in the chart indicates stagnation. Below 50 means contraction. Since 2007, China’s non-manufacturing sector has grown every single month. Until February:

The non-manufacturing PMI is broader than just services. It also includes the retail sector and construction. Here are some other standouts:

• New orders plunged to 26.5, with export orders plunging to 26.8
• Employment, which had already been in contraction in January (48.6) dropped to 37.9
• Input prices fell to 49.3 (from 53.3)
• Output prices fell to 43.9.
• Confidence plunged from 59.6 in January to 40.0 in February.

Manufacturing collapses, but it’s worse than it looks.

The official China Manufacturing PMI, released by China’s National Bureau of Statistics, had already been either in the doldrums or in outright contraction for the past 14 months. In January it was at 50.0, the stagnation point. In February it collapsed to a previously unfathomable 35.7:

 

According to Nomura’s report, if the supplier delivery times index hadn’t surged, but had remained at the same as in January, the headline PMI index would have dropped to 33.

And the sub-index for manufacturing exports orders collapsed to 28.7:

This plunge in the non-manufacturing PMI and the manufacturing PMI shows the mindboggling extent to which China’s economy has been disrupted by the coronavirus-containment methods in February.

And there is something else.

 

ANZ banking group estimated, based on migration data of workers returning to the city from their villages, that about 50% of the workers had returned to their jobs as of this weekend, but that China’s economy was operating at only 20% capacity, hampered by issues ranging from lacking parts to other workers not having returned to work. But work resumptions are rising rapidly, ANZ said, and the March PMIs are expected to bounce off those catastrophic lows.

[kibuc]

26 minutes ago, sancho panza said:

I think gold is looking good to go from here.stay strong there K

My  reasoning thus

1) gains to 2020 from 2018 have been in spite of strong dollar,plenty of risk out there

2) QE/ZIRP looks likely to weaken dollar which could create strong tailwind for the yellow stuff

3) weak dollar will also contribute to inflationary pressures which could be positve for yellow stuff

We bought the dip today.

Must say tho,depsite having sworn not to buy any more smallies,I was lookign at AXU/ITR and got to say I like the look of em at this price.

Don't worry, I stay fully invested. The only question is at which point should I tip the balance in favor of pure silver miners (Impact, Alexco) as currently I'm gold-heavy and these two seem like proper bargains.

[Bricks & Mortar]

The one thing this last week has taught me... I knew before, but now I REALLY get it... taught me the value of stop losses.
I'm 100% in PM miners.  I had stop losses set, but the rapid gains of the last few weeks meant they were far too low.  I should have re-adjusted.
Going forward, I'll be staying in the miners and hope to get out near the top before the big crash.  I plan to set stop losses at 10% and re-set them to 10% each time a stock rises 10% or so.
I've noted HL can't offer stop-loss on 3 of my shares, Endeavour, First Majestic and Mako Mining, as they're traded in overseas markets, so guess they're candidates for early liquidation.  Might hold Mako right through, as I think they're a special case, with a gold mine they've started mining, but not yet producing gold from.

[BadAlchemy]

2 hours ago, StrugglingMillennial said:

Is now really the time to buy anything?

I thought we were still on the way down

I'm a rookie at this stock investing malarkey and I only just got around to looking at what actually comprises the Dow Jones index that the MSM etc scream about having falling last week. There's a lot of deflation (?) cycle companies (Coca Cola, Walt Disney, McDonalds, Nike etc) tech and finance companies (Apple, Visa, Goldman Sachs etc) in there. They nearly all share the exponential looking stock price chart.... I guess that is where a lot of the QE money has ended up as Joe Average just sticks his cheap credit leveraged property gains etc "into the Dow" without much thought or research. The prices go up, luring more suckers in.

Now we have a big sell-off / shake out. Those overvalued companies are still overvalued even after a ten percent fall. Hated, undervalued, reflation stocks and miners are also taken down in the panic but are now even better value than they already were. They may not be at the bottom yet but when things turn they will snap back fast. Meanwhile Joe Average will now probably spend the next  few years watching their deflation cycle stock prices slowly decline....

I have a picture in my head of "Mr Dow Jones"... a fat man eating  a MaccyD burger and drinking Coke while he orders a pair of Nike trainers on his iPhone using his Visa card... That is not where humanity's efforts need to be focussed right now and so I am not that bothered that my mining, oil, transport etc stocks are taking a hit right now. I'm personally not buying more just yet but will wait and see.

Sorry if this is a misinterpretation, or is  correct but blindingly obvious to most here, but it is a fascinating insight for me; the picture somehow became a lot clearer to me because of this sell off.