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

[TheCountOfNowhere]

Looking at the FTSE graph, these big collapses dont bottom for a year or two.

Could be different this time ( )  I suppose, but all the people rushing into catch a fulling knife might want to step back.  

The shares have usually fallen quickly and risen slowly so more chance of losing money than making it.

 

The rout continues

Market Summary > Persimmon plc

LON: PSN

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1,591.50 GBX −152.00 (8.72%)

18 Mar, 08:21 GMT · Disclaimer

Market Summary > Barratt Developments Plc

LON: BDEV

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400.30 GBX −49.70 (11.04%)

[TheCountOfNowhere]

Funding circle not looking good...small businesses going pop left right and centre will take them down

 

Market Summary > Funding Circle Holdings PLC

LON: FCH

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28.16 GBX −5.59 (16.56%)

And one for luck

 

RIGHTMOVE PLC (RMV) ORD GBP 0.001

Sell:462.50p Buy:469.00p  41.40p (8.22%)

[TheCountOfNowhere]

 

ROLLS ROYCE HOLDINGS PLC (RR.) ORDINARY 20P SHARES

Sell:368.40p Buy:375.40p  18.50p (4.76%)

Is there any value in Rolls Royce ?

 

 

Or are they going with the airlines ?

 

 

 

 

[TheCountOfNowhere]

Dow Futures Dive as Bloomberg Leaks Mnuchin’s 20% Unemployment Fear

 

[TNS]

I'd be more concerned about cash in the bank atm than interim share losses.

[TheCountOfNowhere]

20 minutes ago, TheNickos said:

I'd be more concerned about cash in the bank atm than interim share losses.

I'd be more worried about being stuck in my shoe box persimmon new build till the day I die.

The money in the bank can be used to buy shares and anything else people are offloading in a panic.

 

[TheCountOfNowhere]

Funding Circle cant survice long can they?

 

Market Summary > Funding Circle Holdings PLC

LON: FCH

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26.05 GBX −7.70 (22.81%)

 

I reckon they were on a sticky wicket but there share price collapse is something else, even with the promise of government helping companies !!!

[M S E Refugee]

31 minutes ago, TheCountOfNowhere said:

Dow Futures Dive as Bloomberg Leaks Mnuchin’s 20% Unemployment Fear

 

20% unemployment + millions of illegal immigrants sound pretty dire for the U.S and the Democrats.

[Bricormortis]

I don't think the gubbermints will sit back and let bank runs happen at this stage, that way lies a breakdown of law and order, mass brawls in Asda*, looting, riots. I am guessing they have made facilities available to the banks so the cash keeps coming. 

* ( you get that anyway )

[TheCountOfNowhere]

15 minutes ago, M S E Refugee said:

20% unemployment + millions of illegal immigrants sound pretty dire for the U.S and the Democrats.

Google

 

"The great depression unemployment rate"

 

gives

 

"

24.9%

1933"

 

 

 

It's like they postponed the greatest depression in 2008. 

[DurhamBorn]

36 minutes ago, TheCountOfNowhere said:

Dow Futures Dive as Bloomberg Leaks Mnuchin’s 20% Unemployment Fear

 

The higher the unemployment the more they print the higher the inflation.I expect we might see western governments paying peoples wages.The macro picture said $20 trillion was needed to stop the collapse when it came,we have seen around 20% of that,much more to come.Governments have the excuse now to do whatever they want and CBs will print whatever they need.Can you imagine the demands once this is over to "bring stuff home",

Markets arent linear,they are already starting to look for the winners,Telcos are doing very well now,Telefonica is up nearly 30%,Telia similar.Transports poor,but pockets in there,Royal Mail for instance are up nearly 30% from bottom.Once the spending taps are fully turned on oil will turn,the question now isnt about being down in a stock,its  about can it get through to the reflation.The problem the governments have is retail and pubs and transport etc.Massive employment there,i expect a lot more action to come.Dont rule out direct payment of wages NI stopped,council tax holiday.The PM said yesterday "we are in a war situation".They are.

They are in the middle of an epoch defining deflation,that means unlimited printing.Government debt means nothing at this point,it will be monetized.Plus everyone is in the same boat so they can print at will knowing their currencies wont collapse,that is yet and against each other,when the dust settles and the money supply has trebled,but there is the same amount of real assets,the assets will reset to the money supply.Oil will be $200+ by 2027,silver $150+,

The virus has been the event to end the cycle,but it ending was certain as they always are.Just as certain is the reflation ahead.By 2026 it will be like the roaring 20s,people will be loving life,and of course come 2028,2029 they will get what the roaring 20s got at the end.A depression.

[TNS]

What's the best way for silver exposure ? bullionvault? or is there a better ETF kicking around?

[Democorruptcy]

12 hours ago, DurhamBorn said:

"it will be funded by the issuance of additional central bank reserves"

Todays the day the reflation begins.As the thread always said,direct printing into the economy was the way it would play,and we got it today,for a start anyway.Im trying to go through the different countries.Uk is a massive rates relief for all retail etc.Thats a big one,needed of course,but making it across the board is huge.Might it be the end of the rates system to save high streets?,maybe.The unlimited loan scheme needs detail,but looks like they are going to let companies borrow direct from the government at really nice rates.Looks like its saying paper up to one year?..Its a very good move from the government

There seems to be two separate schemes. Larger crucial firms get commercial paper direct from the BoE. These firms should have less risk. The smaller firms that could go bust get lending from banks underwritten by taxpayers. The scheme announced last week was 80% taxpayer guaranteed not sure if this extension is the same or 100%. It's obviously to try avoid a serious credit crunch.

Decisions decisions. I'm viewing a small holding this morning. Buy that or put the cash in a non tax wrapped share account?

[NogintheNog]

22 minutes ago, DurhamBorn said:

I expect we might see western governments paying peoples wages

It's no surprise yesterdays announcements of government 'loans' have not calmed the markets. I'm sure many businesses will take these loans but you still have to pay it back! Of course many businesses will survive this, but they will lose loads of employees on the way through this deflation event. Unless as DB says, they pay peoples wages instead of the companies involved. Until they guarantee that, peeps will lose their jobs, which is of course deflationary.

Universal Basic Income for everyone?

5 minutes ago, Democorruptcy said:

Uk is a massive rates relief for all retail etc.Thats a big one,needed of course,but making it across the board is huge.Might it be the end of the rates system to save high streets?

For sure this is a big help, but where did that revenue go to before? Who loses this revenue? They haven't got a cupboard somewhere with a load of saved business rates. More monetization of debt!

In 2008/9 they bailed out the financial industry by giving them free money. That created huge moral hazard that everyone ignored (apart from occupy Wall Street!) - Now due to those actions and the huge bubble it created, they need to bail everyone else out!

[NogintheNog]

18 minutes ago, TheNickos said:

What's the best way for silver exposure ? bullionvault? or is there a better ETF kicking around?

ETF's are paper. Bullionvault. But watch out for the Silver charges, you need a fair amount in there to cover the minimum storage fixed charge.

If not physical via Coininvest.

[DurhamBorn]

6 minutes ago, Democorruptcy said:

There seems to be two separate schemes. Larger crucial firms get commercial paper direct from the BoE. These firms should have less risk. The smaller firms that could go bust get lending from banks underwritten by taxpayers. The scheme announced last week was 80% taxpayer guaranteed not sure if this extension is the same or 100%. It's obviously to try avoid a serious credit crunch.

Decisions decisions. I'm viewing a small holding this morning. Buy that or put the cash in a non tax wrapped share account?

I think the loans like you say the commercial paper are stage one.That will be unlimited and in the end monetized.It says paper for up to a year,so it suggests its for working capital more than offloading long term debt.However i expect that will change and be simply rolled over each year.

They need to also inject direct liquidity.That is next.It could take a few forms,first direct to consumer,could be council tax scrapped,then direct into employers not to finish people.Could be they scrap employers NI,or even off to pay ways for 6 months in certain sectors.

I thought we would get a trillion in the UK,we have a third of that,the macro position is they need another £700 billion to turn things,US similar,they need between $12 and $18 trillion.

I was actually very impressed with Rishi Sunak,i think he actually gets it,unlike most.Future PM i expect,but he needs to take more action.

[NogintheNog]

On 13/03/2020 at 19:52, TheCountOfNowhere said:

STOP BUYING YOU MAD BASTARDS 

I'm starting to think the Count is right on the money!

Next ladders knocked down another 10%.

[TheCountOfNowhere]

Just now, NogintheNog said:

I'm starting to think the Count is right on the money!

Next ladders knocked down another 10%.

I posted earlier, these things seem to tend to take a year or two to play out.

Sharps falls then a long slow recovery.

All bets are off right now tho.  Could just as easily go hyper,

Has anyone asked the question tho...when the collapse comes who'll still be standing and what will the shares be worth.

The gold bugs might have got it right.

[DurhamBorn]

7 minutes ago, NogintheNog said:

It's no surprise yesterdays announcements of government 'loans' have not calmed the markets. I'm sure many businesses will take these loans but you still have to pay it back! Of course many businesses will survive this, but they will lose loads of employees on the way through this deflation event. Unless as DB says, they pay peoples wages instead of the companies involved. Until they guarantee that, peeps will lose their jobs, which is of course deflationary.

Universal Basic Income for everyone?

For sure this is a big help, but where did that revenue go to before? Who loses this revenue? They haven't got a cupboard somewhere with a load of saved business rates. More monetization of debt!

In 2008/9 they bailed out the financial industry by giving them free money. That created huge moral hazard that everyone ignored (apart from occupy Wall Street!) - Now due to those actions and the huge bubble it created, they need to bail everyone else out!

Nobody loses it,it has been deflated over the cycle already.They are simply printing what the economy was crying out for the last 15 years.I agree there is moral hazard,but those arguments are for when life is normal,not when your facing the destruction of the western way of life.Government exists for times like this.

I expect the people to pay longer term though will be people who over paid for shoe boxes as rates increase later and BTL.They will see rising rates,falling demand over the cycle.

[TheCountOfNowhere]

https://www.professionaladviser.com/news/4012615/janus-henderson-kames-capital-suspend-property-funds-follow

[Noallegiance]

1 minute ago, DurhamBorn said:

I was actually very impressed with Rishi Sunak,i think he actually gets it,unlike most.Future PM i expect,but he needs to take more action.

You've come out with a few interesting lines over the last few days. This is one of them.

When I was watching he was making my skin crawl with the standard scripted pacifying language being used.

Surely he gets it because he's an integral part of upper society that are both arsonist and fireman?

To me, he's no different to the rest. I recognise that they're carrying out these actions because they have no choice, but their ilk are the ones who created this mess. They've forced society into this corner and are now providing 'the solution'.

'Impressed' is a word I'd use for Derren Brown and his feelings toward this grand illusion. It's like one of his psychological tricks on a global scale.

[TheCountOfNowhere]

1 minute ago, DurhamBorn said:

Nobody loses it,it has been deflated over the cycle already.They are simply printing what the economy was crying out for the last 15 years.I agree there is moral hazard,but those arguments are for when life is normal,not when your facing the destruction of the western way of life.Government exists for times like this.

I expect the people to pay longer term though will be people who over paid for shoe boxes as rates increase later and BTL.They will see rising rates,falling demand over the cycle.

Bollocks.  What we have here are a few thousand greedy bastards using a system to  keep them up and you down.

We dont have a government, we have over lords.  Telling us one thing and doing the other.

We are slaves, one way or another.

You might think it's okay but I bloody dont.

The whole structure of government needs to change, there's too many people, too few resources and unfairness at every turn.

[TNS]

Just now, TheCountOfNowhere said:

Bollocks.  What we have here are a few thousand greedy bastards using a system to  keep them up and you down.

We dont have a government, we have over lords.  Telling us one thing and doing the other.

We are slaves, one way or another.

You might think it's okay but I bloody dont.

The whole structure of government needs to change, there's too many people, too few resources and unfairness at every turn.

That is how it has always been for 0000's of years, It ain't going to change.

[DurhamBorn]

 

 

2 minutes ago, Noallegiance said:

You've come out with a few interesting lines over the last few days. This is one of them.

When I was watching he was making my skin crawl with the standard scripted pacifying language being used.

Surely he gets it because he's an integral part of upper society that are both arsonist and fireman?

To me, he's no different to the rest. I recognise that they're carrying out these actions because they have no choice, but their ilk are the ones who created this mess. They've forced society into this corner and are now providing 'the solution'.

'Impressed' is a word I'd use for Derren Brown and his feelings toward this grand illusion. It's like one of his psychological tricks on a global scale.

Of course,we all know they created it,thats past,what matters is where we go now.

Once the dust settles society will change.Its always the case,the old why waste a good crisis.They will use this situation to monetize all the debt out there,criminal yes,but 100% as certain as night and day.The fact is where we are right now he is doing (or more starting to do) whats needed.The morals of this are open for huge debate,and will be in the future.

[TheCountOfNowhere]

4 minutes ago, TheNickos said:

That is how it has always been for 0000's of years, It ain't going to change.

It might do, when a really serious virus hits

 

Anyway, two you cant lose on pwoperty funds now suspended.

https://www.ft.com/content/aca77f28-6878-11ea-800d-da70cff6e4d3