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

[geordie_lurch]

RSBB under 1035 now and pretty much everything else of mine all red today - time to get some fresh air I think 

[TNS]

bp at 250 would be a nice addition

[Democorruptcy]

2 hours ago, Panda said:

Greed is a deafly sin.

I'm happy to be in with the in crowd

If I hadn't found this thread. The SERPS cash would be sat in a non performing low risk fund with the Pru.

I'm happy at 10.40.

Greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind.

[janch]

Al this talk of RDSB..........just bought some more at £10.228.  I see it's ex-div which could be part of the reason for it sinking today.  None of the reflation stocks are very happy though.

I sense something is turning although the US stock market seems to be firing on all cylinders in the predicted melt-up.  Is this the final splurge before the talked about Labor Day rout??

[DurhamBorn]

Dollar index under 92 now so starting to head into range im still seeing 88 as a likely area though 85 might be in play.FTSE doesnt like the fact sterling is creeping up against the dollar.Looking at the liquidity lags oil might push on hard once the over supply in the US is worked through.Iv dripped out some more silver miners today and topped up the main oil companies with the money.

Apple is now worth more than the FTSE 100.Every single company in there,all of them.Not much passive money flowing into the FTSE now simply based on its relative market cap.

[wherebee]

So that's a good day, I think.  Sold 10k of GDXJ at almost double what I paid for it a couple of years ago (hit over 60), and bought 10k of Exxon at 39.49.  I'm hoping - and it's thanks to this thread I am able to be somewhat confident - that that should generate years of future dividends and value using what was effectively free money (less interest/opportunity cost in holding GDXJ for so long, of course).

GDXJ could go to 100, of course, which could mean another almost doubling.  If it touches 80 I'll self half of what I have left, and then the rest at 99 I think.

[DurhamBorn]

https://seekingalpha.com/article/4371775-death-of-u-s-shale-is-greatly-exaggerated-crippled-for-life?utm_medium=email&utm_source=seeking_alpha&mail_subject=the-death-of-u-s-shale-is-greatly-exaggerated-but-it-s-crippled-for-life&utm_campaign=nl-macro-view&utm_content=link-0

@Cattle Prod a lot of the things you have been saying in the article above.

[kibuc]

Average silver price so far in Q3 is $24/oz and keeps going up each day. Most miners I follow managed to get around $17/oz in Q2. Some of the valuations are so low it's not even funny. I don't know what the markets are expecting, whether it's a YUUUGE crash in metals or a new wave of lockdowns impacting miners profitability, but there's a massive gap between current valuations and cash flows that miners are set to report after Q3.

The way I see it, if Mexico didn't lock down in late July with cases reaching new highs, then they surely ain't locking down now. I'm buying the likes of IPT and Avino like they are on sale. Hell, they ARE on sale.

[Democorruptcy]

41 minutes ago, janch said:

Al this talk of RDSB..........just bought some more at £10.228.  I see it's ex-div which could be part of the reason for it sinking today.  None of the reflation stocks are very happy though.

I sense something is turning although the US stock market seems to be firing on all cylinders in the predicted melt-up.  Is this the final splurge before the talked about Labor Day rout??

No, it went ex-div on 13th Aug.

[leonardratso]

i manage to capture a few extra % from zoom today, but sold out quickly - within an hour of buying, tesla i binned and bought and binned and bought - few extra quid, apple i binned and bought and ive kept for a tad longer cos it all slowed to a crawl, certainly getting harder, but ive left a QQQS open to try and capture any falls that happen.

Meanwhile, i see my shitty aim stocks UFO is up +101% and hzm +156%, pah should have thrown the farm at it, hahahahaha, if id done that it would have been down -99.99%.

cest la vie eh.

 

[Errol]

4 hours ago, wherebee said:

GDXJ could go to 100, of course

Higher. Much higher. What will gdx and gdxj be when gold is rising upwards above $5000 an ounce?

[Errol]

The Fed owns 1/3 of all the U.S. mortgage-backed securities that exist. At its current pace of buying in about a year the Fed will own the entire mortgaged-backed market. The Fed provides the financing and the government provides the guarantees. Socialism created this bubble.

- Peter Schiff - https://twitter.com/PeterSchiff/status/1300870387329306627

 

[Jesus Wept]

Despite the money printing - inflation goes Negative...... 

Deflationary bust first then big inflation for rest of decade.

HOLD....HOLD....HOLD.......

[Majorpain]

#still not a bubble

[Jesus Wept]

15 minutes ago, Majorpain said:

#still not a bubble

Apple has greater value than ALL of the Russell 2000.

#notamassivebubbleabouttopop

[Chewing Grass]

Apple and Tesla push premium products on credit with interest rates at near zero, any increase in credit costs will wipe half their market out, the same applies to Mercedes and half of VAGs most profitable lines.

[Democorruptcy]

Latest Hussman downdate:

https://www.hussmanfunds.com/comment/mc200901/

[DurhamBorn]

https://electrek.co/2020/09/01/tesla-tsla-5-billion-capital-raise/

As we mentioned yesterday and now Tesla has done just that,raising $5 billion "at market" by selling more shares.In affect Tesla is raising money for free and equity is willing to hand over $10 notes for 50c back down the road.Its nuts,but just another fantastic contrarian signal that we are at the end of the cycle.

[Jesus Wept]

51 minutes ago, Cattle Prod said:

Bought a long dated QQQ put today, the stock split madness was the last straw. Reckon there is 25% max upside left in a blowoff top, so I hope to add more.

"AAPL is up one Exxon in the last 48hrs" - Zerohedge tweet today.

The last bear turned bull....? 

Seriously good luck! 
 

I might buy in too...... 😳

 

[Noallegiance]

1 hour ago, Majorpain said:

#still not a bubble

If this is to be like 1929, the crash started in September and lasted until November.

From the Wiki entry:

"Despite the dangers of speculation, it was widely believed that the stock market would continue to rise forever: on March 25, 1929, after the Federal Reserve warned of excessive speculation, a small crash occurred as investors started to sell stocks at a rapid pace, exposing the market's shaky foundation.^[5] Two days later, banker Charles E. Mitchell announced that his company, the National City Bank, would provide $25 million in credit to stop the market's slide.^[5] Mitchell's move brought a temporary halt to the financial crisis, and call money declined from 20 to 8 percent.^[5] However, the American economy showed ominous signs of trouble:^[5] steel production declined, construction was sluggish, automobile sales went down, and consumers were building up high debts because of easy credit.^[5]

Despite all the economic warning signs and the market breaks in March and May 1929, stocks resumed their advance in June and the gains continued almost unabated until early September 1929 (the Dow Jones average gained more than 20% between June and September). The market had been on a nine-year run that saw the Dow Jones Industrial Average increase in value tenfold, peaking at 381.17 on September 3, 1929."

381.17?!

Pff.

Amateurs.

[leonardratso]

amazing parallels.

Of course its different this time init.

To the fookin' moon.

[Jesus Wept]

8 minutes ago, Noallegiance said:

If this is to be like 1929, the crash started in September and lasted until November.

From the Wiki entry:

"Despite the dangers of speculation, it was widely believed that the stock market would continue to rise forever: on March 25, 1929, after the Federal Reserve warned of excessive speculation, a small crash occurred as investors started to sell stocks at a rapid pace, exposing the market's shaky foundation.^[5] Two days later, banker Charles E. Mitchell announced that his company, the National City Bank, would provide $25 million in credit to stop the market's slide.^[5] Mitchell's move brought a temporary halt to the financial crisis, and call money declined from 20 to 8 percent.^[5] However, the American economy showed ominous signs of trouble:^[5] steel production declined, construction was sluggish, automobile sales went down, and consumers were building up high debts because of easy credit.^[5]

Despite all the economic warning signs and the market breaks in March and May 1929, stocks resumed their advance in June and the gains continued almost unabated until early September 1929 (the Dow Jones average gained more than 20% between June and September). The market had been on a nine-year run that saw the Dow Jones Industrial Average increase in value tenfold, peaking at 381.17 on September 3, 1929."

381.17?!

Pff.

Amateurs.

The run up is uncannily similar.... could play out the same.....

[Noallegiance]

2 minutes ago, Vendetta said:

The run up is uncannily similar.... could play out the same.....

*Shudder*

[Chewing Grass]

Railway Locomotive manufacturing company in my home town built 110 locomotives in 1929, 85 in 1930, 41 in 1931, 3 in 1932, 3 in 1933 recovering to 53 in 1934.

That's going from full production to 4% for two years then back to 50% capacity.

Not many businesses could survive that with salaried staff in this day and age, this was the days of hourly paid labour.

No work = no pay.

[jamtomorrow]

1 hour ago, Democorruptcy said:

Latest Hussman downdate:

https://www.hussmanfunds.com/comment/mc200901/

Good read. The barely disguised contempt for the Fed in those last two paras is quite something - and zombification, again.

It’s a nefarious delusion to believe that direct effects on inflation and unemployment are the sole considerations for monetary policy. As we saw in the global financial crisis, it’s the later, indirect effects of easy money that are most destructive to employment and economic stability. The Fed is like a guy who imagines that repeatedly pushing a button will control the economy, when the button is actually wired to the pleasure center in Davey Day Trader’s brain, along with millions of other speculators whose bubble-chasing behavior creates the setup for yet another financial collapse.

Nobody needs your promise to lay on that button, Jay. The only activities enabled by zero yields are those that can’t survive even a tiny hurdle rate. They’re activities where leveraged finance is the primary cost of doing business. That’s how an activist Fed has created a yield-seeking bubble and the issuance of a mountain of low-grade debt that puts 1929 to shame.

Capital needs to cost something for a dynamic economy to work.
– Sheila Bair, former FDIC Chair