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

[PaulParanoia]

21 hours ago, Cattle Prod said:

I saw that, I think averaged its 9.something a day. OPEC has agreed to cut in excess of that, I was shocked they agreed substantial cuts to 2021.

The-Sad-Truth-About-The-OPEC-Production-Cut

[TheCountOfNowhere]

Looking at the UK I'd have to say we are at the CV19 peak now and we should see some improvement. Italy and Spain starting to recover.

4 weeks from now things might be starting to move again in Europe.

6 weeks from now we should know when the lock down in ending.

I'd say this is the extent of the crash.

The only thing that worries me is the U.S. I mean, WTF, it's a disaster waiting to happen. The stock market recovery is remarkable and if/when it collapses it's going to take the FTSE down with it.

[CVG]

4 minutes ago, Cattle Prod said:

Anyone buying uranium at the moment? Powerful run in the last few weeks, ans signs of long term (since 2007?!) breakout. I have  a small amount of Energy Fuels and Mega Ur, looking to add Cameco and Yellow cake. Any other recommendations?Problem is, I'm trying to be sensible and wait for a weekly and or monthly close above resistance, but the bloody dailies look way overbought! How do I enter this, @Harley or others? Hope for a backtest?

Article on Moneyweek this week and mentioning Yellowcake

https://moneyweek.com/investments/commodities/601163/the-uranium-price-is-finally-on-the-rise-heres-the-easiest-way-to

[TheCountOfNowhere]

Anyone bought any interesting penny shares as a bit of a long term gamble ?

If I'd ploughed £1000 into Microsoft in 1985  ( at 10 cents IIRC )  it be worth about £800,000 now.

And they say housing was a winner.

 

 

[CVG]

Paywalled: Here's an extract

One way to play this is to speculate in uranium mining companies. “But what is the point buying a company whose operations are currently suspended or about to be suspended?” you may ask – and I tend to agree. Suspended operations can drain capital fast (though bailouts may come). 

Those companies whose mines are at the exploration or development stages may see better gains as the values of their ore bodies are being re-rated, but it’s not like a great deal of development can take place until further notice.

So the safest way to play this (to avoid operational risk) is to play the spot price of the metal itself. It’s far less racy, but your risk is lower. London-listed Yellowcake Plc (LSE: YCA) has been set up with this purpose in mind. It is, basically, a uranium holding company. You buy the shares and hope that the value of its uranium stockpiles increases. 

[sancho panza]

37 minutes ago, TheCountOfNowhere said:

Looking at the UK I'd have to say we are at the CV19 peak now and we should see some improvement. Italy and Spain starting to recover.

4 weeks from now things might be starting to move again in Europe.

6 weeks from now we should know when the lock down in ending.

I'd say this is the extent of the crash.

The only thing that worries me is the U.S. I mean, WTF, it's a disaster waiting to happen. The stock market recovery is remarkable and if/when it collapses it's going to take the FTSE down with it.

What's possibly happening now is that we're seeing a rising trend in 'non Covid' Covid deaths due to hospitals being shut down for most other patients.The amount of Covid positive people dying is rising but so apparently is the non Covid death rate.................

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/bulletins/deathsregisteredweeklyinenglandandwalesprovisional/weekending3april2020

 

[M S E Refugee]

Does anyone have any idea how long it takes for foreign dividends to be paid into my HL Sipp.

Nutrien paid out yesterday and I am curious to how long it takes.

Cheers

[Barnsey]

Interesting interview on Bloomberg TV just now with John Bilton from JP Morgan (head of Global Strategy)

- Not expecting a return to pre-virus growth until end of 2021, end of 2020 far too optimistic

- Oil to remain suppressed for some time yet (storage capacity and long period before many have the confidence to fly again)

- Deflation a normal and expected part of recession, acknowledges manufacturing recession pre-virus

- However, due to the current cutting of capacity, combined with unprecedented stimulus (which he only sees expanding - genie out of the bottle), expecting industrial reflation and inflation to make a big comeback 3-5 years from now

 

[sancho panza]

30 minutes ago, Cattle Prod said:

That's what it is, and WolfStreet points out they are tapering already (I won't steal @sancho panza thunder on his regular wolf postings ;-)). Tapering...and dollar is saying "no you f**ckwits, problem is not solved". I was wondering what the catalyst would be for further liquidity per @DurhamBorn roadmaps, maybe this is it. Making a rod for their own backs?

I'll bite :-)....

I'm struggling to understand several aspects of what's going on.

What's more worrying to me is the possible drop in demand for cheap Fed money which might undermine my current thesis.I'm paddling around with the kids today so will ponder this as I walk.

Also of interest is the drop in lending to SPV's.Is this a collateral crunch? Or demand drop(I suspect not)?

 

https://wolfstreet.com/2020/04/17/fed-massively-tapered-qe-4-hasnt-bought-any-junk-bonds-yet-was-just-jawboning/

Fed Massively Tapered QE-4. Hasn’t Bought Any Junk Bonds, Was Just Jawboning

by Wolf Richter • Apr 17, 2020 • 7 Comments

Helicopter Money for Wall Street & the Wealthy: $2.06 Trillion in 5 Weeks. Regular folks, forget it.

By Wolf Richter for WOLF STREET.

Since the Fed announced its market bailouts and interventions on March 15, it has printed and handed to Wall Street $2.06 trillion. But here is the thing: This was front-loaded, and over the past two weeks, it has cut its bailouts in half, and it has stopped lending new funds to its SPVs that were expected to buy all manner of securities, including equities, junk bonds, and old bicycles. But those loan amounts haven’t moved in four weeks. What it has bought were Treasury securities and mortgage-backed securities – and it’s cutting back on those too.

Total assets on the Fed’s balance sheet rose by $285 billion during the week through April 15, reported Thursday afternoon, to $6.37 trillion. Over the past five weeks, including the partial bailout-week which started March 16 and ended March 18, total assets increased by these amounts. Note the big taper from $586 billion and $557 billion early on to $287 billion in the latest week:

• $356 billion (Mar 18, partial bailout week started Mar 16)
• $586 billion (Mar 25)
• $557 billion (Apr 1)
• $272 billion (Apr 8)
• $285 billion (Apr 15)

The $6.37 trillion of assets on the Fed’s balance sheet are mostly composed of Treasury securities, mortgage-backed securities (MBS), repurchase agreements (repos), “foreign central bank liquidity swaps,” and “loans” to its Special Purpose Vehicles (SPVs). We’ll go through them one at a time.

Treasury securities purchases get slashed.

The Fed added $154 billion in Treasury securities during the week, down 47% from the $293 billion it had added the week before, and down 57% from the $362 billion it had added two week ago. This is a major factor in the Big Taper of QE-4.

The sharp reduction in purchases of Treasuries confirms for now that the Fed is sticking to its announcement that it would drastically cut QE after the initial blast.

Fed Chair Jerome Powell in a webcast on April 10 said that the Fed would pack away its emergency tools once “private markets and institutions are once again able to perform their vital functions of channeling credit and supporting economic growth.” Whatever that means.

Repos fizzle further.

The Fed was offering gazillion per day in overnight repos plus over a gazillion a week in term repos. But since the beginning of its asset purchases, repos have receded into the background, and there have been few takers. The Fed has now reduced its offerings. And there is only a trickle of activity.  Repo balances on the Fed’s balance sheet have now dropped to $181 billion. This decline in repos also contributes to the Big Taper of QE-4:

Central Bank Liquidity Swaps: BOJ & ECB

The Fed has “dollar liquidity swap lines” with the ECB, the Bank of Japan, and the central banks of Canada, England, Australia, New Zealand, Norway, Sweden, Switzerland, Denmark, Singapore, South Korea, Brazil, and Mexico. The total on its balance sheet increased by $20 billion from the prior week to $378 billion but has been in the same range all April. Of note:

• 83% of outstanding liquidity swaps are with the ECB ($138 billion) and the BOJ ($176 billion).
• The Bank of England is far behind ($22 billion).
• And there no swaps with the central banks of Canada, Brazil, New Zealand, and Sweden.

The chart below shows daily balances by country. The balance sheet is for the week ended Wednesday. But the chart also includes Thursday (right column):

Under these swap agreements, the Fed lends newly created dollars to the other central bank and takes their newly created domestic currency as collateral. The exchange rate is the market rate at the time of the contract. These swaps have a maturity of 7 days or 84 days. When the swaps mature, the Fed gets its dollars back, and the other central bank gets its own currency back. The Fed carries these swaps on its balance sheet valued in dollars at the exchange of the agreement.

Why do the ECB and BOJ want dollars?

The ECB and the Bank of Japan – the biggest users of the swaps – preside over export-focused economies that both have large trade surpluses with the US and through those surpluses obtain a constant flow of dollars.

In addition, their currencies are the second and third largest global reserve currencies (dollar’s share down to 61.8%; euro’s share at 20.1%; yen’s share at 5.6%).

Further, the BOJ’s foreign exchange reserves include $1.2 trillion in US Treasury securities.

In other words, neither the ECB nor the BOJ need the dollars for trade. They need them to support their banks and companies have large dollar-denominated debts and speculative bets that they need to refinanced with cheap dollars. And those swaps make that possible.

“Loans” stalled.

The category of “Loans” is a group of accounts that track what the Fed lends to its SPVs that it set up and what it lends to its Primary Dealers (the big broker-dealers and banks it does business with). The Fed can lend money to these SPVs which then can buy – even though it would be illegal for the Fed itself to buy – all kinds of stuff, including corporate bonds, junk bonds, equities, and what not. There was a burst of activity four weeks ago, but nothing has happened since then.

The balances of “Loans” fell to $120 billion (from $129 billion the prior two weeks). The chart is on the same vertical scale as the repo chart. After the initial burst, nothing:

As you can see in the chart above, the Fed has purchased practically nothing over the past weeks… just jawboning the markets. The loans by category:

• Primary credit: $41 billion, down from $43 billion. Expanded recently to include “fallen angel” junk bonds, but the Fed hasn’t bought any yet. The amounts outstanding predated the “fallen angel” expansion.
• Secondary credit: $0 (to purchase corporate bonds, bond ETFs, and even junk-bond ETFs). But none were purchased.
• Primary Dealer Credit Facility: $35.6 billion (up from $33 billion)
• Money Market Mutual Fund Liquidity Facility: $52 billion (down from $53 billion). This is the money market bailout where a few weeks ago the Fed bought corporate paper and other assets. No additions since the initial burst.

Note that “Secondary credit, which has been expanded to buy corporate bonds and junk-bond ETFs, has a zero balance. The Fed hasn’t bought anything yet. It has just been jawboning. And that was enough to trigger a huge rally in bond ETFs, including the iShares iBoxx high-yield corporate bond ETF.

MBS.

The Fed has drastically cut its purchases of MBS over the past two weeks, as reported by the New York Fed:

• $157 billion (week ended Mar 25)
• $145 billion (week ended Apr 1)
• $109 billion (week ended Apr 8)
• $59 billion (week ended Apr 15)

But there are two complications with MBS.

One, holders of MBS, including the Fed, receive pass-through principal payments as the underlying mortgages are paid down or are paid off. Given the boom in mortgage refinancing due to the lower interest rates, these pass-through principal payments have become a tsunami. Just to maintain its balance of MBS, the Fed would need to buy a significant amount every week.

Two, MBS trades take a while to settle, and the Fed books the trades only after they settled. So what we’re seeing on the Fed’s balance sheet lags the actual trades by some time.

The increase of $108 billion is a mix of these two: purchases from the big burst on March 25 and April 1 that finally settled minus the pass-through principal payments it received:

If…

Since March 11, the Fed printed $2.06 trillion and handed it to Wall Street and asset holders. The sole purpose of this was to inflate asset prices and bail out asset holders. The potential crumbs offered to small businesses or the real economy have not happened yet.

If the Fed had sent that $2.06 Trillion to the 130 million households in the US, each household would have received $15,800. But forget it, this was helicopter money for Wall Street and for asset holders – particular those with the riskiest bets – and for no one else.

[sancho panza]

25 minutes ago, Cattle Prod said:

Anyone buying uranium at the moment? Powerful run in the last few weeks, ans signs of long term (since 2007?!) breakout. I have  a small amount of Energy Fuels and Mega Ur, looking to add Cameco and Yellow cake. Any other recommendations?Problem is, I'm trying to be sensible and wait for a weekly and or monthly close above resistance, but the bloody dailies look way overbought! How do I enter this, @Harley or others? Hope for a backtest?

We've owned a small 0.5% position in Cameco since 2016 when we also bought position in Potash Saskatchwan.

If you look at their balance sheet it like the goldies,ie they either didn't want to borrow or noone would lend........either way,I'm very happy with where they are.

I would ladder in some now,then 8/7 handle,if we are going to get a weaker dollar phase and that's becoming more debatable than it was then,it could face another retest of the $9 level but I'm no chartist harley or @MvR might add some light.

Persoanlly,I'd gain exposure to the ones with robust balacne sheets

Useful list here

https://www.etfchannel.com/lists/?a=stockholdings&symbol=URA

[JMD]

15 hours ago, TheCountOfNowhere said:

My strategy is based on better 30% of something than 100% of nothing.

Most of the stocks I've bought were/are down 50% from a peak, some like Centrica have gone about 50%+ past that, but at least 50% off already mitigates the losses.  I dont think it matters much what you buy now, so long as the company is solvent and has an actually place in a real economy.I got caught with the oil falling knife too but not far off even on those.

When we are coming out of lock down I'll pile a lot more into oil etc with a view to selling it when/if the 2nd wave starts hitting.  Stuff that should get back to normal quickly should be a good bet for a quick profit, EasyJet, Rolls Royce, Cineworld, Wetherspoons, but I'd buy and sell shortly after.

I expect losses for sure.  I should see any shares go into profit if DB's reflation takes off or I live long enough, or the economy doesn't imploded, so buying now is one of the few best options I see. 

I've not utilized a SIPP yet, as I did not want my money tied up in a stock market/pension that was going to fall at some point.  I'll move my £40K allocation in this year which will give me a healthy tax handout to mitigate my losses, I should use my wive's too when i think about it

I've got a lot of cash that's been coming out of 5 year fixed rated savings bonds for the last 2 years and I emptied peer 2 peer money in the nick of time.  Those rates were all very good and beat or kept up more or less with inflation ( that's the name of the game for me ).

For sure though, this cash is now earning below inflation rates but is easily accessible but it is beating housing for sure, probably up 10% on housing in 2 years ( down south ) with zero effort or risk, I'll plough a lot/most of that into land/housing here and abroad it collapses further, if not then I am left with a quandary of how best to try and protect it.  If house prices drop substantially I will take out a massive mortgage backed by my savings on the longest fixed I can get and pray that DB is right.  The savings would then go back into short term bonds, with get out clauses, maybe even some corporate bonds.  

I'm happy to buy into DBs long term view so will do what most on here are doing for now.  I've got some physical gold and silver, enough to live on for a year or two if need be.  I'm lucky to hold loads of index linked savings certs but even those are being hammered now as they are moving from RPI to CPI so will keep an eye on that.  

It's all about the timing now, when to get out of cash safe and with as few a losses as possible.

This is why I always go on about timing.

How does that sound ?

Count, thank you for the expansive reply. Unfortunately, I personally don't have the analysis skills to trade, so I am just buying to hold 'em. Though I do agree that timing, simple laddering or other methods, is a great way of extracting more value from a stock purchase. A big lesson from this blog for me was importance of maintaining capital across the next cycle, but hopefully also beating inflation by owning the 'reflation stocks' discussed here. Of course, if silver/other assets should fly, then we may even get rich - though timing the selling of the asset would then become our next problem (before next cycle ends/collapse, etc)!

You mention taking out a big mortgage backed by savings. I don't mean to pry but that sounds intriguing. But is that type of borrowing possible, or is it restricted to special commercial/business loan arrangements? i.e. I had thought the rules for property mortgages were now very regulated and lenders took strict salary criteria into account only, when deciding who to lend to?     

[NogintheNog]

https://www.reuters.com/article/us-health-coronavirus-elliott-exclusive/exclusive-hedge-fund-elliott-says-stocks-could-fall-50-from-february-highs-letter-idUSKCN21Y23O

Quote

“This is a perfect environment for gold to take center stage,” the letter said, as spot gold traded at about $1,741 an ounce. Fair value for the metal, the fund believes “is literally multiples of its current price.”

Quote

Ever since the 2008 financial crisis, Singer has written in client letters that asset prices were overvalued as governments flooded the market with cheap money to revive growth.

Now with millions unemployed, the letter said emergency actions are needed. “Deficit spending and massive monetary expansion are called for to prevent total collapse,” it said.

Sounding a note of caution for policymakers, the letter added that “monetary soundness is the key to financial system soundness.”

 

[TheCountOfNowhere]

25 minutes ago, JMD said:

You mention taking out a big mortgage backed by savings. I don't mean to pry but that sounds intriguing. But is that type of borrowing possible, or is it restricted to special commercial/business loan arrangements? i.e. I had thought the rules for property mortgages were now very regulated and lenders took strict salary criteria into account only, when deciding who to lend to?     

I just mean but a house or two with 60% mortgages.  The house prices will drop ( I hope ) but savings ( at higher savings rates ) and investments ( reflation stocks ) will clear the mortgage from a fraction of the cash.  A bit like an endowment mortgage without the miss-selling :-) If there is a debt jubilee you cash will be trashed but you'll get the back via the mortgage.

 

e.g. £500K house, £300K mortgage, £50K invested....when the reflation comes then that £50K is going to clear the £300K in a few years.  Result, your house cost you £250K + your fixed rate interest.  House now valued at £250K most likely.  Net gain, 0, net loss 0.  If you do the £500K house and £300K mortgage us £0 invested than you have a potential £250K loss.

Does that make sense to anyone ?

As we agree, it's all about the timing.

I bought some more shares today, schlumberger and repsol as I'm more convinced that we are now not far off the bottom in the UK,l barring the US collapse.

The silly money is starting to get dished out ( See the Funding circle news today ).

Im quite tempted to apply for a £2M commercial loan from FC and them f**k off with it  Im sure plenty will.

 

I should add.... I have no idea what I am doing really :-) 

[JMD]

15 hours ago, Democorruptcy said:

Greatest return on investment I've ever seen. A bloke on the news has made plenty.

I'm going to buy two

 

Buyer Beware! Who are his backers, counter-party risk, etc, are the Chinese involved somehow?

[Talking Monkey]

35 minutes ago, sancho panza said:

We've owned a small 0.5% position in Cameco since 2016 when we also bought position in Potash Saskatchwan.

If you look at their balance sheet it like the goldies,ie they either didn't want to borrow or noone would lend........either way,I'm very happy with where they are.

I would ladder in some now,then 8/7 handle,if we are going to get a weaker dollar phase and that's becoming more debatable than it was then,it could face another retest of the $9 level but I'm no chartist harley or @MvR might add some light.

Persoanlly,I'd gain exposure to the ones with robust balacne sheets

Useful list here

https://www.etfchannel.com/lists/?a=stockholdings&symbol=URA

SP whats leading you to think that the weak dollar phase may not come about, with an elevated dollar index wouldn't stresses remain in the system. I would have thought the Fed would be incentivised to push on till they got it to 95 at least maybe it doesnt go to the 85 but rather drift a bit lower than the 100 where it is now

[DurhamBorn]

2 hours ago, Cattle Prod said:

Anyone buying uranium at the moment? Powerful run in the last few weeks, ans signs of long term (since 2007?!) breakout. I have  a small amount of Energy Fuels and Mega Ur, looking to add Cameco and Yellow cake. Any other recommendations?Problem is, I'm trying to be sensible and wait for a weekly and or monthly close above resistance, but the bloody dailies look way overbought! How do I enter this, @Harley or others? Hope for a backtest?

Harmony Gold ,they have bags of the stuff in their deep mines and tailings,plus the only cake making plant in Africa i think.

[DurhamBorn]

51 minutes ago, TheCountOfNowhere said:

I just mean but a house or two with 60% mortgages.  The house prices will drop ( I hope ) but savings ( at higher savings rates ) and investments ( reflation stocks ) will clear the mortgage from a fraction of the cash.  A bit like an endowment mortgage without the miss-selling :-) If there is a debt jubilee you cash will be trashed but you'll get the back via the mortgage.

 

e.g. £500K house, £300K mortgage, £50K invested....when the reflation comes then that £50K is going to clear the £300K in a few years.  Result, your house cost you £250K + your fixed rate interest.  House now valued at £250K most likely.  Net gain, 0, net loss 0.  If you do the £500K house and £300K mortgage us £0 invested than you have a potential £250K loss.

Does that make sense to anyone ?

As we agree, it's all about the timing.

I bought some more shares today, schlumberger and repsol as I'm more convinced that we are now not far off the bottom in the UK,l barring the US collapse.

The silly money is starting to get dished out ( See the Funding circle news today ).

Im quite tempted to apply for a £2M commercial loan from FC and them f**k off with it  Im sure plenty will.

 

I should add.... I have no idea what I am doing really :-) 

My son is buying a house right now,£127k 3 bed nice house ,he has bought some silver (about £25k i think).He has got a 10 year fixed rate mortgage for 2.68% can over pay 10% a year for first 5 years,next 5 no ties at all,but still fixed.They are going to over pay and if/when silver hits near to what they owe sell it and pay off.Beauty is if inflation does hit 15%+ in 8 years they will be in the fix,but able to clear so covered nicely.

 

[Barnsey]

Bloomberg TV binge continues, ConocoPhillips CEO Ryan Lance just on

- Expects further cuts into summer

- It’ll take approx 1 year to clear excess supply (back to 5 yr average) once things start to recover, he stressed not weeks or months

[TheCountOfNowhere]

34 minutes ago, DurhamBorn said:

My son is buying a house right now,£127k 3 bed nice house ,he has bought some silver (about £25k i think).He has got a 10 year fixed rate mortgage for 2.68% can over pay 10% a year for first 5 years,next 5 no ties at all,but still fixed.They are going to over pay and if/when silver hits near to what they owe sell it and pay off.Beauty is if inflation does hit 15%+ in 8 years they will be in the fix,but able to clear so covered nicely.

 

I dont see how he can lose now.  

Just spoke to my accountant.  He is perplexed by their QE move.  He is pretty worried about whats coming

[MvR]

3 hours ago, sancho panza said:

I would ladder in some now,then 8/7 handle,if we are going to get a weaker dollar phase and that's becoming more debatable than it was then,it could face another retest of the $9 level but I'm no chartist harley or @MvR might add some light.

The weekly and monthly Cameco charts both show clear W%R vs price divergence ( see below ), which means the bottom is probably in. The Kumo Clouds on the Weekly and Monthly haven't yet twisted to show some green in the future though. This suggests some choppiness here for a few months, between around 8 and 12.

I think your ladder plan and levels aren't bad. I'd buy a little now, but personally I might set the second ladder around 9, then 8, and then 7, though that might not fill.

I wouldn't pile in, given the recent bounce and potential for a pullback, but accumulating here and below seems reasonable. Options spreads are wide right now, but lets see where they are when the markets open in 1/2 an hour. If I was accumulating this, I'd probably do it by selling puts at 9, 8.5, 8 and 7.5, for a month out.. possibly waiting to enter orders for the lower puts until price approaches these levels ( if they do )

 

[JMD]

2 hours ago, TheCountOfNowhere said:

I just mean but a house or two with 60% mortgages.  The house prices will drop ( I hope ) but savings ( at higher savings rates ) and investments ( reflation stocks ) will clear the mortgage from a fraction of the cash.  A bit like an endowment mortgage without the miss-selling :-) If there is a debt jubilee you cash will be trashed but you'll get the back via the mortgage.

e.g. £500K house, £300K mortgage, £50K invested....when the reflation comes then that £50K is going to clear the £300K in a few years.  Result, your house cost you £250K + your fixed rate interest.  House now valued at £250K most likely.  Net gain, 0, net loss 0.  If you do the £500K house and £300K mortgage us £0 invested than you have a potential £250K loss.

Does that make sense to anyone ?

Thanks Count, yes does make sense. I think buying northern property would massively limit potential reductions in house capitol values.

The reason I asked was because I'm on the lookout for ideas for how to fully exploit the benefits of taking a 10-year fixed rate loan (and watch it inflate away as per this blog). For me it would be a commercial loan and i'd be providing a large deposit (i'm thinking 50% ltv or more). Ideally I would buy a residential property which I could also operate a business from, as i've become rather stuck on the idea of investing part of my cash savings into a property that would provide me with both home and an income opportunity (plan to allocate 50% of my savings into a property, 50% in stock market). I know this is not a property discussion forum - but I cant help thinking that living in, and earning from, a property that you have borrowed money against (with debt 'eaten' by inflation), would be kinda like achieving this threads Holy Trinity for the next cycle! 

Anyway, I keep waivering between a storage business (but would require additional land/outside space), or some form of vanilla holiday let/annex type setup. Not very exciting ideas I know but want low-risk, and also something I can continue to do into my 'retirement years' (whatever that means these days?). 

Just that i've had enough of being a company employee, and am (I know very) fortunate to have the savings to do this... once I have identified the right opportunity, I can then sit back and watch this crazy cycle play out from the comfort of my own little kingdom!.. I know nothing's that simple, but any ideas that people may have, or perhaps their doing similar already, for a 'home/business' tuned to the next cycle would be very welcome.

[TheCountOfNowhere]

5 minutes ago, JMD said:

Thanks Count, yes does make sense. I think buying northern property would massively limit potential reductions in house capitol values.

The reason I asked was because I'm on the lookout for ideas for how to fully exploit the benefits of taking a 10-year fixed rate loan (and watch it inflate away as per this blog). For me it would be a commercial loan and i'd be providing a large deposit (i'm thinking 50% ltv or more). Ideally I would buy a residential property which I could also operate a business from, as i've become rather stuck on the idea of investing part of my cash savings into a property that would provide me with both home and an income opportunity (plan to allocate 50% of my savings into a property, 50% in stock market). I know this is not a property discussion forum - but I cant help thinking that living in, and earning from, a property that you have borrowed money against (with debt 'eaten' by inflation), would be kinda like achieving this threads Holy Trinity for the next cycle! 

Anyway, I keep waivering between a storage business (but would require additional land/outside space), or some form of vanilla holiday let/annex type setup. Not very exciting ideas I know but want low-risk, and also something I can continue to do into my 'retirement years' (whatever that means these days?). 

Just that i've had enough of being a company employee, and am (I know very) fortunate to have the savings to do this... once I have identified the right opportunity, I can then sit back and watch this crazy cycle play out from the comfort of my own little kingdom!.. I know nothing's that simple, but any ideas that people may have, or perhaps their doing similar already, for a 'home/business' tuned to the next cycle would be very welcome.

That might be something else I should consider.  Buying a business that might boom under real austerity, such as UK holiday campsite in the lakes etc might be a very good use of funds.

As far as I can tell the best hope of a of decent pension is to join the tory party, dontate £200K and get a peerage, then head off to the HoL till you die.

[RickyBacker]

3 hours ago, TheCountOfNowhere said:

Anyone bought any interesting penny shares as a bit of a long term gamble ?

If I'd ploughed £1000 into Microsoft in 1985  ( at 10 cents IIRC )  it be worth about £800,000 now.

And they say housing was a winner.

 

 

I've got some cash spread across some graphene companies. My main hopes are 'Versarien' which is a UK based company that have numerous interesting collaborations with big global companies. One such example being with 'Aecom' . They used Versarien's propriety graphene to produce a signal arch that will hopefully be used on railways/subways in the UK and possibly globally... no commercial agreement yet, but the testing phase is almost complete.
The other is 'Directa Plus' which is an Italian company, again with interesting collaborations. Last week they signed a commercial agreement with a company that adds their graphene to bitumen to create environmentally friendly, recyclable road surfacing. Trials had been going for a few years with really positive results.

I believe that we are on the cusp of a graphene revolution... it really is an incredible material. Add this with Durhamborns infrastructure spending and... well... let's see what happens.
*Not investment advice DYOR

[CVG]

Moneyweek article this week on our favourite stock. Actually, DB, did you write this?

"Centrica, which owns British Gas, has promoted finance director Chris O’Shea to CEO, says Camilla Canocchi on This Is Money. O’Shea has replaced Iain Conn, who was criticised for a tenure that saw “the exodus of three million customers” as Centrica struggled with the advance of smaller competitors such as Ovo Energy, Bulb and Octopus. 

Falling energy prices, along with a government-imposed cap on energy bills, have also led to a series of profit warnings, culminating in total losses of £1.1bn in 2019.

O’Shea may have been confirmed in the top job, but he faces a “baptism of fire” as the company has been hit by the pandemic, which has “left customers struggling to pay bills”, says Emily Gosden in The Times. In the past two weeks he has already been forced to cancel Centrica’s dividend, slash costs and place 3,800 staff on government-paid furlough. 

In the longer term the company has been “under pressure” from both competition and the government’s price cap on bills. He also faces a tough fight to offload its nuclear and oil and gas businesses. The new leader of “Britain’s most unloved company” certainly has his work cut out for him, says Jim Armitage in the Evening Standard. 

Still, he “may not have just got the worst job in the City” as many of the company’s difficulties are now reflected in the share price, which has fallen by nearly 90% over the past few years. 

The stock is now so low that it would take a “Herculean effort” to disappoint investors from here. What’s more, Centrica could prove a “tasty takeover candidate”. A deal would enable O’Shea to end up being seen as the hero in this “grim tale”."

[Transistor Man]

Can I ask what the thinking is with Uranium? 

isn’t it a metal who’s future demand is straight forward to work out?

I remember the price going crazy in 2007, but that was a time when a world-wide nuclear renaissance looked like it was ramping up. With Perhaps 100+ reactors being built.

(I left my job, and went to work in the nuclear industry in 2008. Went back to microelectronics in 2010.)