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

[JMD]

On 17/03/2020 at 15:29, BearyBear said:

I wonder how many coins they had in stock before people rushed to buy? You can still buy 100oz silver bar for storage on goldcore, +10% spot price so not bad (coins were +20%)

BearyBear, have you personally used Goldcore? It looks an interesting company. I'm thinking it provides a convenient way to store and trade pms?

For silver there is a 1% storage fee I think, but I guess if an investor was looking to trade/sell it in 5 years time that wouldn't be such a bad option. 

 

[Talking Monkey]

29 minutes ago, DurhamBorn said:

I bought very little in the US,ive 6% in XOM that i have in Shell so very low exposure.I had bought a few other US stocks but sold them all on an average 10% bounce.My portfolio is now structured tobacco top,then oil,then telcos,then energy,then everything else.I have been selling some BAT though when it bounces above £28 and re-deploying into oilies mostly.Only decent US holdings are in potash,but if/when they run i doubt a 30% recovery in sterling will make much difference.They go to nothing or 1000% up for me.

I bought some BAT yesterday DB, what is your opinion on Imperial, its slipped relative to BAT. Are there any other tobacco that you see as interesting

[BearyBear]

12 minutes ago, JMD said:

BearyBear, have you personally used Goldcore? It looks an interesting company. I'm thinking it provides a convenient way to store and trade pms?

For silver there is a 1% storage fee I think, but I guess if an investor was looking to trade/sell it in 5 years time that wouldn't be such a bad option. 

 

I haven't used them but they seem legit. Keep in mind that for physical silver you need a substantial price increase to break even... unfortunately they don't show us buyback price but I think it will be well below spot...

Edit: Wow, I just can't keep up with what's happening! Poor journalists... they must be working 24h a day now.

https://www.federalreserve.gov/newsevents/pressreleases/monetary20200319b.htm

March 19, 2020

Federal Reserve announces the establishment of temporary U.S. dollar liquidity arrangements with other central banks

For release at 9:00 a.m. EDT

• Share

 

The Federal Reserve on Thursday announced the establishment of temporary U.S. dollar liquidity arrangements (swap lines) with the Reserve Bank of Australia, the Banco Central do Brasil, the Danmarks Nationalbank (Denmark), the Bank of Korea, the Banco de Mexico, the Norges Bank (Norway), the Reserve Bank of New Zealand, the Monetary Authority of Singapore, and the Sveriges Riksbank (Sweden). These facilities, like those already established between the Federal Reserve and other central banks, are designed to help lessen strains in global U.S. dollar funding markets, thereby mitigating the effects of these strains on the supply of credit to households and businesses, both domestically and abroad.

These new facilities will support the provision of U.S. dollar liquidity in amounts up to $60 billion each for the Reserve Bank of Australia, the Banco Central do Brasil, the Bank of Korea, the Banco de Mexico, the Monetary Authority of Singapore, and the Sveriges Riksbank and $30 billion each for the Danmarks Nationalbank, the Norges Bank, and the Reserve Bank of New Zealand. These U.S. dollar liquidity arrangements will be in place for at least six months.

The Federal Reserve also has standing U.S. dollar liquidity swap lines with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank.

For media inquiries, call 202-452-2955.

[kibuc]

I'm not entirely sure why, by Harmony (and Sibanye too, although for much clearer reasons) are getting their teeth kicked in.

[Castlevania]

1 hour ago, sancho panza said:

our £9 RDSB ladder got bought yesterday,£2.30 on BP today.Once BP gets back to £3 -if it does then we'll be moving our final tranches onto the table.

@DurhamBorn @Cattle ProdI've decided to stop buying US stocks with cable at £1-18 if I can find UK alternative.Have you got a view on where it ceases to be viable?Obviously depends how deeply the stock is depreciated but say when I can buy BP Shell in sterling makes little sense to buy EQNR/XOM with cable at $1.18.Obviously means I'll end up overweight BP/SHell.

The issue of dividend withholding tax (unless you hold them in a recognised retirement account) puts me off US dividend payers. A 30% hair cut on dividends is a lot. I do have some Exxon in my SIPP. 

[DurhamBorn]

3 minutes ago, Talking Monkey said:

I bought some BAT yesterday DB, what is your opinion on Imperial, its slipped relative to BAT. Are there any other tobacco that you see as interesting

BAT is the best money making machine in the world,i have friends who worked for them,and one who works for himself fixing their machines all over the world.Imperial dont have the emerging market exposure BAT do they are more Europe and Saudi/Algeria etc.My friend told me BAT make 1/2 a US cent per ciggie profit.Imagine if they can get 1 cent .

 

[Talking Monkey]

1 hour ago, sancho panza said:

Every day I come on here lately I come to find inspiration and by something other than BP/XOM/EQNR/RB plus assorted Goldies.Unfortunately,I look at the charts,consider my thesis and jsut end up with even more big oil.Reality is that even with a divi slash,we'll have plent yof income to pour into other viable sectors.

I can well believe Shell would do that,why not?Makes perfect sense if you believe the thesis of tight oil/higher prices-and I do.We've set a limit of cash we're going to keep back jsut in case but up to that it's oil/gold and divis into transports/telecoms/potash/copper.

Interesting to see FCX down by 50% on what we sold at 2 weeks back.I'm hoping for s teeper drop in copper so we cna get some Fags cheap.

Exactly this SP I probably will end up overweight to a large degree to oil and use the dividends to buy other sectors, and heavy mostly against BP and Shell rather than others

[Castlevania]

5 minutes ago, kibuc said:

I'm not entirely sure why, by Harmony (and Sibanye too, although for much clearer reasons) are getting their teeth kicked in.

Isn’t it the Johannesburg market catching up with the prices of the ADR’s which got spanked in the US yesterday? 

[kibuc]

1 minute ago, Castlevania said:

Isn’t it the Johannesburg market catching up with the prices of the ADR’s which got spanked in the US yesterday? 

In the last few weeks it was kind of hard for me to keep track of which market was leading and which one was following tbh.

[Democorruptcy]

RMG is on the virus play list. With people less willing to travel and have face to face contact, surely more stuff will be going in the post?

[DurhamBorn]

3 minutes ago, Democorruptcy said:

RMG is on the virus play list. With people less willing to travel and have face to face contact, surely more stuff will be going in the post?

Yes and telcos,problem is if 20% go bust thats a lot less post.Government need to act,they are way too slow over this.They need to pay wages for 3 months really,scrap VAT,reverse NI for employers etc.They need to remove all costs on top of a business.If they dont,the economy will be set back 40 years.They are in the biggest deflation since we deflated China's silver currency during the opium trade

[Castlevania]

6 minutes ago, Democorruptcy said:

RMG is on the virus play list. With people less willing to travel and have face to face contact, surely more stuff will be going in the post?

How do you seal a letter if you can’t lick it?

[reformed nice guy]

1 hour ago, sancho panza said:

our £9 RDSB ladder got bought yesterday,£2.30 on BP today.Once BP gets back to £3 -if it does then we'll be moving our final tranches onto the table.

@DurhamBorn @Cattle ProdI've decided to stop buying US stocks with cable at £1-18 if I can find UK alternative.Have you got a view on where it ceases to be viable?Obviously depends how deeply the stock is depreciated but say when I can buy BP Shell in sterling makes little sense to buy EQNR/XOM with cable at $1.18.Obviously means I'll end up overweight BP/SHell.

I have been continuing to buy the US stocks to act as a currency hedge. Short term pain but I continue to have trust in the Americans (ability to project power...)

[Democorruptcy]

3 minutes ago, DurhamBorn said:

Yes and telcos,problem is if 20% go bust thats a lot less post.Government need to act,they are way too slow over this.They need to pay wages for 3 months really,scrap VAT,reverse NI for employers etc.They need to remove all costs on top of a business.If they dont,the economy will be set back 40 years.They are in the biggest deflation since we deflated China's silver currency during the opium trade

I heard a figure mentioned yesterday that paying wages would cost £40bn but wasn't sure it it was a week or month? It's only at least £120bn difference per month if it was weekly, I'm sure they can adjust the "printer" 

 

[The Idiocrat]

Loving this thread, although I don't post much. Special hat tip to @DurhamBorn! Bought oilies a couple of weeks ago at a "bargain price" and now down 25%. 

Im thinking about buying back in, but keep feeling it's too soon and the US will go through the Italian covid-19 experience. I can't see how they (or we) can avoid it. So I'm thinking we've got a lot lower to fall and then it'll be the Rothschild's "the time to buy is when there's blood on the streets". I'd be interested in why I might be wrong! I appreciate ladders means you're averaging down and reduces risk. 

[Democorruptcy]

10 minutes ago, Castlevania said:

How do you seal a letter if you can’t lick it?

My envelopes all have a piece of paper to pull off the sticky bit. Do you still live in cave mate?

Edit to add: How much would you sell your cave for? We might all be going back to one?

[leonardratso]

i use sellotape on old envelopes that i recycle (ie used once already). Ive done this for years, im a right tight bastard me.

i nick the sellotape from work.

[Harley]

1 hour ago, Yellow_Reduced_Sticker said:

BTW, Guys today bought more BP at £2.30 ....so ya know what that means!

Thought you were good at this sticker stuff.  £2.30 a litre is not cheap (yet!), although better quality.

[Castlevania]

9 minutes ago, leonardratso said:

i use sellotape on old envelopes that i recycle (ie used once already). Ive done this for years, im a right tight bastard me.

i nick the sellotape from work.

What if you’ve been sent home from work and forgot to take some sellotape on the way out?

[BearyBear]

I think big boys like Shell or BP are well protected against oil price fluctuations, the real question is how they'll perform when all planes are grounded and we don't use cars/buses to commute to work every day..?

[TNS]

Hope the prices stay low for the new isa year in 2.5 weeks! 

[Harley]

33 minutes ago, Democorruptcy said:

RMG is on the virus play list. With people less willing to travel and have face to face contact, surely more stuff will be going in the post?

I saw that price move and thought that was pretty juvenile of Mr Market if so.

3 minutes ago, TheNickos said:

Hope the prices stay low for the new isa year in 2.5 weeks! 

They never do!  Mr Market makes money from this and the other key retail timing points.

[Democorruptcy]

5 minutes ago, Harley said:

I saw that price move and thought that was pretty juvenile of Mr Market if so.

Ocado is another virus play, up 40% since the initial big down.

[Talking Monkey]

44 minutes ago, DurhamBorn said:

Massive shortage,if the Fed dont QE $3 trillion,it will be $5,then $20 within a few weeks.Powell is asleep at the wheel.Dollar is screaming at him,its schoolboy stuff to be honest.They are using the 08 playbook instead of the macro picture.If he doesnt act soon it will be 80% private sector unemployment.The $ is telling them this is systemic.

He is like a farmer whos barn is on fire.He puts a bucket of water on,when it needs 5 buckets,goes to bed and lets the embers spread the fire again and again until there is no barn.$3 trillion needed and increasing fast.

It is his lack of action that makes me wonder are the elites deliberately trying to crash the economy. Coupled with this lockdown thing it really is strange the way they are destroying millions of lives and futures. 

[JMD]

On 18/03/2020 at 10:11, TheCountOfNowhere said:

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.

How about the possibility of Airlines being 'let go'? ...I think government's may see it as an easy 'decarbonisation policy'. Of course in the short term such industries might be nationalised, then later wound up.

Anyone have other examples/sectors?