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

[Barnsey]

4 minutes ago, confused said:

Give it a year, when the dead bodies feed through and the economy is on its knees, I can't even see 0% IRs holding house prices up....

Been waiting so long that I can probably just about wait another 6-12 months 

[DoINeedOne]

RUSSIAN FINANCE MINISTRY SAYS RUSSIA CAN WEATHER OIL PRICES OF $25-$30 PER BARREL FOR 6-10 YEARS

[Talking Monkey]

2 hours ago, sancho panza said:

paid 320....hopefully there'll be some more of these sell offs

selling frenzy appears to be over for today.US shoudl open down so we can line up our US purchases

copper will be interesting to watch here

you buying the ADR on gazprom?

SP I think earlier you mentioned you dont think this is the big Kahuna, could you elaborate on why.

Would you hold your reflation stocks through the big Kahuna or lighten up and rebuy after the falls

[BearyBear]

16 minutes ago, Barnsey said:

With the UK 10 yr yield dropping from 0.6 to less than 0.1 in a matter of a month, I guess we'll start to see cheaper mortgage deals feed through the market?

Not much room for a drop IMO, rates already are super-low... which is why certain banks are withdrawing from the mortgage market.

[reformed nice guy]

2 minutes ago, DoINeedOne said:

RUSSIAN FINANCE MINISTRY SAYS RUSSIA CAN WEATHER OIL PRICES OF $25-$30 PER BARREL FOR 6-10 YEARS

BP prices on HL - Sell:330.65p Buy:305.55p

 

[TheCountOfNowhere]

41 minutes ago, confused said:

Any Ray Dalio fans?

Writing in the FT today he thinks we're fucked....

Quote
Anyone who is knowledgeable and plain-speaking will tell you that the negative economic impact of the coronavirus outbreak will probably be big, that monetary policy will be of little use to counteract it, and that co-ordination between political leaders and central bankers is both essential and unlikely.

https://www.ft.com/content/069caf6c-6135-11ea-abcc-910c5b38d9ed
 

Im surprised no one saw tgus coming.... 

 

🤣🤣🤣🤣🤣

[BearyBear]

2 minutes ago, DoINeedOne said:

RUSSIAN FINANCE MINISTRY SAYS RUSSIA CAN WEATHER OIL PRICES OF $25-$30 PER BARREL FOR 6-10 YEARS

Yeah that's possible never underestimate Russians... Saudi Arabia can't sustain that price

[TheCountOfNowhere]

4 minutes ago, DoINeedOne said:

RUSSIAN FINANCE MINISTRY SAYS RUSSIA CAN WEATHER OIL PRICES OF $25-$30 PER BARREL FOR 6-10 YEARS

We have a price target, thanks 

[TheCountOfNowhere]

14 minutes ago, BearyBear said:

Not much room for a drop IMO, rates already are super-low... which is why certain banks are withdrawing from the mortgage market.

While the others hand out money like sweeties to anyone who will risk everything to buy basic shelter 

[TNS]

finally got my shell order filled at £13.70. Damn you iweb!

[Castlevania]

Betfred (Done Brothers (cash betting) Limited of Warrington) have taken a 3% stake in William Hill. I’m struggling to see the rationale?

[reformed nice guy]

For anyones ladders, pre markets suggesting:

Chevron opening at 79.90

Exxon opening at 40.70

 

[DurhamBorn]

 

30 minutes ago, Castlevania said:

Betfred (Done Brothers (cash betting) Limited of Warrington) have taken a 3% stake in William Hill. I’m struggling to see the rationale?

To double their money when a big yank casino group buy out Hills?

[sancho panza]

2 hours ago, DurhamBorn said:

Yes i think thats right,the bigger drop is likely sentiment,and you cant measure it right now.Liquidity pulls say the dollar is going down,and fast.Iv got some work somewhere on oil when big consumers currency goes up against the dollar,but cant find it ,i do know it shows them buying oil while they can etc.

Yeah I think if they can't cut rates the Fed will double down with some other failed BoJ policies as @Errol alluded to the other day eg buying ETF's,taking dogdirt MBS as collateral etc 

 

It's all about the dollar here.Gold/oil will become functions of the dollar market in a way they haven't been for a few years

2 hours ago, Harley said:

Think big me son, think big!

I'm watching the 15m charts.  A looong time since I did this.  Hope me ticker can still take it!

Yep, firm bounce.  Will the US markets knock it down again or fire it up?

Note to myself:  If you wanna trade short term, get a real brokerage account!

know that feeling..

This morning has some typical hallmarks of capitulation selling in the oils but time will tell.BP down 25% then rebounds 10%.These sort of trading days are once in a blue moon event.As long as the kids aren't tripping me up we'll be buying XOM/EQNR at the US open.

59 minutes ago, Talking Monkey said:

SP I think earlier you mentioned you dont think this is the big Kahuna, could you elaborate on why.

Would you hold your reflation stocks through the big Kahuna or lighten up and rebuy after the falls

Debt deflation is the big kahuna ,this current crisis is about a drop in aggregate demand.That in turn could lead to a debt deflation.worth a quick read up on Irving Fisher theory of debt deflation to decide if it's here.

As I've said,we'd need corporate bond market dislocation to intitiate this as thats where the bulk of the dogturd bonds are.

Whiulst I think the Fed/BoE/boJ have the ammo left to QE their way out of this but there's an increasing chance that they may not.dyor natch.this is a big decision

My original intention was to buy the oilies and goldies while cheap,then as dollar weakens they will strengthen(this as @DurhamBorn says above is likely inbound).During this phase headline S&P may look ok but will cover intense sector rotation behind the scenes as oilies etc rise.Then we'll get the dawning reality that corporate debts can't/won't be paid and debt deflation kicks in.time to buy dollars/USTs and sell stocks.

said plan getting reviewed.May jsut sit in these oilies and goldies from here.

 

Fisher from wiki

'In Fisher's formulation of debt deflation, when the debt bubble bursts the following sequence of events occurs:

Assuming, accordingly, that, at some point in time, a state of over-indebtedness exists, this will tend to lead to liquidation, through the alarm either of debtors or creditors or both. Then we may deduce the following chain of consequences in nine links:

1. Debt liquidation leads to distress selling and to
2. Contraction of deposit currency, as bank loans are paid off, and to a slowing down of velocity of circulation. This contraction of deposits and of their velocity, precipitated by distress selling, causes
3. A fall in the level of prices, in other words, a swelling of the dollar. Assuming, as above stated, that this fall of prices is not interfered with by reflation or otherwise, there must be
4. A still greater fall in the net worths of business, precipitating bankruptcies and
5. A like fall in profits, which in a "capitalistic," that is, a private-profit society, leads the concerns which are running at a loss to make
6. A reduction in output, in trade and in employment of labor. These losses, bankruptcies and unemployment, lead to
7. pessimism and loss of confidence, which in turn lead to
8. Hoarding and slowing down still more the velocity of circulation.

   The above eight changes cause

9. Complicated disturbances in the rates of interest, in particular, a fall in the nominal, or money, rates and a rise in the real, or commodity, rates of interest.'

 

4 minutes ago, reformed nice guy said:

For anyones ladders, pre markets suggesting:

Chevron opening at 79.90

Exxon opening at 40.70

 

Let's hope so.Open wil see whats left of retail sellers in oilies selling using limits.US has bigger retail particiaptionm.if that pans out then we may see a potential bottom on XOM here if ti trades similar to BP/RDSB this morning.

[Ellandback]

Schlumberger 30% down at open. Trading halted.

[Heart's Ease]

https://fofoa.blogspot.com/?m=1

I don't think we've had Thoughts from Another, FOA or FOFOA on Dosbods yet? Seeing as there was a new post yesterday from FOFOA I thought I'd throw it in the mix.

Anyone follow the Thoughts of Another from way back? The clip @201p linked to from Rollover made me think of Another's thoughts on gold and the gold/$ trade for oil with KSA.  Spent a few bewildering hours in the company of those trail guides a few years back. 

https://www.usagold.com/goldtrail/archives/another1.html

https://www.usagold.com/goldtrail/archives/goldtrailone.html

[Agent ZigZag]

Managed to get all my oil orders in this morning and have concentrated on only the big players. I am 30% allocated to oil and gas now. Shell were a bugger to get. One minute the order was accepted then it was not, so was not able to get the bottom. Overall I am very happy as this is a long term hold 5 years before I need to look at it again and then there are the great divis rolling over year on year. 

 

My next tranche will be the miners again so will be looking for a sell off and if oil sells off I will redeploy the last of my capital to this area. I am bringing my retirement forward and will be out in June were the next journey in my life will begin. I can not wait

 

 

 

 

[nirvana]

7 minutes ago, Ellandback said:

Schlumberger 30% down at open. Trading halted.

THAT'S NOT A FREE MARKET!!! GET ON WITH IT FOOKERS, I WANT TO SEE BANKERS JUMPING OUT OF WINDOWS!!! 

[BearyBear]

14 minutes ago, Ellandback said:

Schlumberger 30% down at open. Trading halted.

Wow... back to where it was 17 years ago!

[kibuc]

A few more press conferences like this current one and Powell will become a bigger meme than the Iraqi Information guy or that "everything fine" doggy.

[Transistor Man]

4 minutes ago, Tdog said:

Just got an email from AJbell saying its delisted

I bought 1500 only last week#

I think that's just London, LSE. Not NYSE.

[Agent ZigZag]

13 minutes ago, Tdog said:

Just got an email from AJbell saying its delisted

I bought 1500 only last week#

They were a share I was never interested in. Im only interested in oil/gas, mining. telecommunications and looking for ideas on food

[BearyBear]

18 minutes ago, Tdog said:

Just got an email from AJbell saying its delisted

I bought 1500 only last week#

Interesting... looks like I can still buy them on IG..???

[BearyBear]

CoronaVirus doesn't care if you are a banker or not

https://www.reuters.com/article/us-health-coronavirus-sweden-cenbank/swedish-central-banker-tests-positive-for-new-coronavirus-idUSKBN20W1UF

 

[sancho panza]

49 minutes ago, Ellandback said:

Schlumberger 30% down at open. Trading halted.

impressive stuff.XES at $3..............

42 minutes ago, Agent ZigZag said:

Managed to get all my oil orders in this morning and have concentrated on only the big players. I am 30%

allocated to oil and gas now. Shell were a bugger to get. One minute the order was accepted then it was not, so was not able to get the bottom. Overall I am very happy as this is a long term hold 5 years before I need to look at it again and then there are the great divis rolling over year on year. 

 

My next tranche will be the miners again so will be looking for a sell off and if oil sells off I will redeploy the last of my capital to this area. I am bringing my retirement forward and will be out in June were the next journey in my life will begin. I can not wait

24 year low in shell.good call.you're timing has worked out nicely ref that transfer