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

[janch]

Talking of Japanese stocks, I decided a while back to diversify out of UK markets a bit and bought a Japanese Investment Trust which seems to be OK:

JPMorgan Japanese Investment Trust PLC (JFJ)

I think for those of us with smaller pots this could be an easier route to owning than individual shares although not as exciting perhaps.

[Harley]

5 hours ago, Cattle Prod said:

Just browsing https://www.worldometers.info/coronavirus/ to scratch my stats itch (should I move this to a coronavirus thread?).

I'll take excellent analysis from anywhere!  I bet you find a lot of oil!  Ta.

[Option5]

17 hours ago, Hardhat said:

Imagine the romance of Cuba's 1950s Cadillacs, but with 2010s Range Rover Evoques... 

A  2010 Range  Rover Evoque would always be worth a lot. They didn't come out until 2011 .

[sancho panza]

5 hours ago, Cattle Prod said:

I'm really torn between 'can they be that stupid' and 'they have to be using this as an excuse to print money'. I just don't know! I think it's still worth thinking about this going into winter, as the bat flu is still going to be a big macro driver for the next while.

Indeed,it really is the question.From my limited clincial understanding,we've known for some time that this disease wasn't a pandemic by the Spainish Flu measure.I wouldn't pay too much heed to the Chinese figures.I'd pay more heed to the heavily distorted UK figures(but they're a lot nearer the truth than Chinas) as some need to be added from before Feb -it was here in November according to someone who has seen the same pneumonia in X Rays from that time as Feb/March and some need taking off as they died of other things.

Talking to a friend who's an A&E consultant,his off the record assessment was that 3 times as many will die from the lockdown as died of covid due to cancled curative cancer procedures,suspension of chemo,cardiac problems etc.

I include below an interview with prof John Lee who has called this from the start in Feb.He has a great quoteWell worth a watch.

''Politicians are doing amateur science, and scientists are doing amateur politics'

 

[sancho panza]

4 hours ago, DurhamBorn said:

@Cattle Prod i think its getting pretty obvious now that the UKs policy has been a disaster.It really has been incredible to watch.When i see all those young partying im like good,the quicker the virus runs through them the better.It will hate it once all those younger people are a barrier to it.They had a chance to let it run over summer while shielding older at risk people,the fact they didnt is crazy.Old fella in the club even said to me he was out and about because if he was going to get it he wanted it in August "not f+cking January",ordinary people nearly always have the common sense answer.

The thing is they didn't shiled the old people.They carted covid positve patients back to care homes where the staff didn't have the training or PPE to handle them.

I love that quote in bold.The people are beginnign tos ee through it.Funny that 60% want lockdown but govt statsd show that only 18% of people are adhering to self isolation rules.

Riddle me that...

At work,I'm heartened by some young Paramedics calling it out for what it is and seeing the damage govt policy is doing to Joe Public more generally.

[sancho panza]

2 hours ago, JMD said:

 

CP, I'd kinda only respond to you where you say '...if it is highly contagious' - but is it? I'm no doctor, but it doesn't seem like Corona is especially contagious to me. 

 

It is very contagious.A Kidney specialist I know told me that normally with the flu a few people in the ward get it but that with covid,the whole ward was getting it.

Again though,these people are more likely to get it.We had a coupole of mild flu seasons 2018/2019 so there was a lot of what's termed 'dry tinder'.

 

Aslo worth noting @Cattle Prod I've psoted in teh sceptics thread but Carl Henghan has done some great work exposing the flaws in the testing regime(PCR's) and the fact that amplification cycles are being used hence increasing false positive rate.His estimate iirc is that something like 80% of pillar 2(community) tests are actually false postives which would explain low death hospitaliztion rate (alongside virus mutating into less deadly form as they do)

 

discussion false postives here

 

[Loki]

 

[Loki]

4 minutes ago, Cattle Prod said:

Thanks Loki. Do you think one of us should tell them they're rapidly running out of disinflation headroom?

Thought-provoking comment, I wonder at what point we could expect trouble if they continue to drag their heels? (I am just basing that on the DXY).  Weeks or months?

[Loki]

7 minutes ago, Cattle Prod said:

the first thing they might do is grab some gold and silver, if they have any sense. Paper money only has value in the sense of trust in the issuer, i.e. the government. How could you trust them with anything after this?

You could say that about a few more events over the years...

I'm not sure the culture here still points to gold/silver as an insurance (Compared to say the Indians) - more likely to be bricks and mortar as everyone knows it's a safe investment!

I suppose when the gold and silver adverts start will be when the big players (Including us on this thread ) will have positioned ourselves accordingly and the dumb money will be allowed in to inflate our assets...

 

[DurhamBorn]

Fed is buying TIPs because they are inflation linked and once inflation starts to move they want less on the open market for people to hide in.Removing more and more before inflation moves means when it does other inflation hedges will attract the money and then set off a velocity chain reaction.Hiding in TIPs is almost risk free during an inflation,but the Fed (and all CBs) want velocity moving forcing investment to enter supply chains.

[Loki]

17 minutes ago, DurhamBorn said:

Fed is buying TIPs because they are inflation linked and once inflation starts to move they want less on the open market for people to hide in.Removing more and more before inflation moves means when it does other inflation hedges will attract the money and then set off a velocity chain reaction.Hiding in TIPs is almost risk free during an inflation,but the Fed (and all CBs) want velocity moving forcing investment to enter supply chains.

If I understand you correctly, there's not much point us buying TIPS as we're already positioned for the other inflation hedges, it's just a case of being patient as the TIPs get the early action but we get the biggest gains?

[DurhamBorn]

56 minutes ago, Loki said:

If I understand you correctly, there's not much point us buying TIPS as we're already positioned for the other inflation hedges, it's just a case of being patient as the TIPs get the early action but we get the biggest gains?

TIPs will protect from inflation and are perfect for people simply wanting to protect buying power,though governments will likely under state inflation.However they wont leverage inflation.The assets we have been buying should outperform inflation by a high measure because they amplify.5% increases pa in inflation might increase a telcos profits by between 15% and 20% for instance.Oil at $55 instead of $40 means BP can double its divi from now (it wont it will buy back shares instead)

Inflation makes a massive difference to a lot of areas of the market,but they need to be the areas where price elasticity means people pull away from the products slower than the inflation.A good example is telcos.A 20% industry price increase would see a tiny fall in demand.However a 20% increase in a car might see a similar cut in demand.

Oil use might slowly fall as prices increase,but a 100% increase might only see a 10% demand pull.It how tobacco companies have always made massive money and had people scratching their heads,4% fall in use a year,but 6% price increase.

[MvR]

I notice National Express and Stagecoach spiked up today. National Express in particular is putting in a nice Adam&Eve bottoming pattern.. ( sharp spike down - Adam, and then a shallower rounder bottom - Eve ), and has risen over the the last couple of the weeks on increasing volume on the weekly chart.

Curious, considering the apparently imminent lockdown.. unless they're looking at some sort of bailout... or something else...like a government contract to ferry police, army and "covid marshals" around the country to where they're needed?

With the geopolitical situation, possible chaos in the States, possible civil unrest here, and possible moves from China.. I started looking at defence stocks too. They look very cheap right now..  I'm considering buying LEAPS ( any option that expire more than 12 months out ) in some of these in case something kicks off. 

[Popuplights]

https://www.ccn.com/exxon-mobils-dividend-yield-tempt-you-value-trap/

More anti-oil sentiment.

 

 

[Metalheadz]

Hey all, long time lurker, HL comments interest me as I've been trying to find some Canadian tiny-cap miners to put in my ISA around the US election.

It seems pretty random as to whether a stock is actually listed so I sent them a secure message asking about a few stocks and what the process is for listing them... their reply:

Quote

 

"In general we can add Stocks to our platform, this is based around client demand.

I will ask our Stockfile team to investigate the holding you have mentioned and see if it can be added to our platform.

Once they have concluded their investigation I will get back to you with the relevant information."

 

I asked them to add Banyan Gold Corp (BYN) but their computer said no. I'd say maybe they had about 10% of the tickers I looked up... god knows how they get in there.

[Loki]

@Metalheadz Nice arrival mate, welcome 

[Bear Hug]

20 minutes ago, Metalheadz said:

Hey all, long time lurker, HL comments interest me as I've been trying to find some Canadian tiny-cap miners to put in my ISA around the US election.

It seems pretty random as to whether a stock is actually listed so I sent them a secure message asking about a few stocks and what the process is for listing them... their reply:

I asked them to add Banyan Gold Corp (BYN) but their computer said no. I'd say maybe they had about 10% of the tickers I looked up... god knows how they get in there.

It is on Degiro, can't see on Trading 212

[leonardratso]

20 minutes ago, Bear Hug said:

It is on Degiro, can't see on Trading 212

but t212 has bynd - near enough eh? hahaha, beyond meat - as in mushrooms or some such soy shoite.

[Errol]

 

[JMD]

8 hours ago, sancho panza said:

'Politicians are doing amateur science, and scientists are doing amateur politics'

 

Yes those daily briefings triggered me back in April, along with their crude graphs and the incessant journo ppe parroting. I think George Orwell might have said something along the lines of looking from politician to scientist, and then from scientist back to politician... 

[Harley]

7 hours ago, Errol said:

 

But gold went down 29% in 2013.  Just imagine if you had bought all your gold in 2012.  And down another 5% in 2015.  It would have been a disaster. 

[Democorruptcy]

18 hours ago, sancho panza said:

The thing is they didn't shiled the old people.They carted covid positve patients back to care homes where the staff didn't have the training or PPE to handle them.

I love that quote in bold.The people are beginnign tos ee through it.Funny that 60% want lockdown but govt statsd show that only 18% of people are adhering to self isolation rules.

Riddle me that...

At work,I'm heartened by some young Paramedics calling it out for what it is and seeing the damage govt policy is doing to Joe Public more generally.

All we had to do was lockdown care homes and shield older people. Of our 52k deaths with covid mentioned on the death certificate (they died with it not necessarily of it) over 15k were in care homes. That's a larger proportion died in care homes than all causes of death during the same period.  ONS stats summed

		Age       Totals 0 to 9   >   4 10 to 19   >   12 20 to 29   >   74 30 to 39   >   218 40 to 49   >   738 50 to 59   >   2377 60 to 69   >   5026 70 to 79   >   11688 80 to 89   >   20498 90 or more   >   11282 All Ages   >   51917           Under 10   >   4 Under 20   >   16 Under 30   >   90 Under 40   >   308 Under 50   >   1046 Under 60   >   3423 Under 70   >   8449 Under 80   >   20137 Under 90   >   40635 All Ages   >   51917
		My fag packet average age at death is 80.5 years using the midpoint of each age group. The Eat Out to Help Out seemed a deliberate policy to keep it going, could they really be that dumb to cram 64m into eateries?

[JMD]

50 minutes ago, Democorruptcy said:

All we had to do was lockdown care homes and shield older people. Of our 52k deaths with covid mentioned on the death certificate (they died with it not necessarily of it) over 15k were in care homes. That's a larger proportion died in care homes than all causes of death during the same period.  ONS stats summed

		Age       Totals 0 to 9   >   4 10 to 19   >   12 20 to 29   >   74 30 to 39   >   218 40 to 49   >   738 50 to 59   >   2377 60 to 69   >   5026 70 to 79   >   11688 80 to 89   >   20498 90 or more   >   11282 All Ages   >   51917           Under 10   >   4 Under 20   >   16 Under 30   >   90 Under 40   >   308 Under 50   >   1046 Under 60   >   3423 Under 70   >   8449 Under 80   >   20137 Under 90   >   40635 All Ages   >   51917
		My fag packet average age at death is 80.5 years using the midpoint of each age group. The Eat Out to Help Out seemed a deliberate policy to keep it going, could they really be that dumb to cram 64m into eateries?

Thanks Democorruptcy for the detail on the figures. The 'long-covid' argument is also a bit of a red-herring as many viral diseases inflict long term health consequences on their victims. 

Dumb politicians? Maybe, however i do suspect that these characters are intelligent, but lack crucial perspective and moral courage - Tragically, that's a big ask in our modern chaotic nihilistic age. Perhaps a return to the wisdom of the ancients is required... 'Judgment of Solomon' anyone? (certainly would put a new spin on austerity 'cuts'!!!)

[Heart's Ease]

 

Have not yet listened but thought I'd add to thread.

[JREWING]

https://www.ft.com/content/1394d8a1-6e85-451b-a858-ac6218b79d06

 

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https://www.ft.com/content/1394d8a1-6e85-451b-a858-ac6218b79d06

Rosneft warns BP and Shell creating ‘existential crisis’ for oil supplies Russian group says shift towards renewables could lead to supply shortages and higher crude prices An oil worker on a rig operated by Rosneft. Didier Casimiro, one of the top executives at Russia's state-backed group, has warned of a potential supply crunch © Bloomberg Share on Twitter (opens new window) Share on Facebook (opens new window) Share on LinkedIn (opens new window) Share on Whatsapp (opens new window) Save David Sheppard and Anjli Raval in London YESTERDAY 94 Russia’s Kremlin-controlled oil company has warned that BP and Royal Dutch Shell are creating an “existential crisis” for oil supplies that will lead to higher prices, attacking their shift towards renewables when demand is still growing. Didier Casimiro, one of the top executives at Russia’s state-backed Rosneft, said national oil companies would take a greater share of the market if energy majors cut investments as supply shortages were almost inevitable should demand return to pre-pandemic levels. “I think that to go away from your core business, which is what they are doing, somebody will need to step in . . . somebody will need to take that responsibility,” Mr Casimiro told the Financial Times Commodities Global Summit. “It is an existential threat for supply. It is an existential threat for price volatility . . . we will have a [supply] crunch, price volatility, and yes higher prices.” His comments illustrate a growing divide between state-backed oil companies and the energy majors that have helped shape the modern oil industry, as European operations such as BP, Shell, France’s Total and Italy’s Eni pledge to redirect investments towards renewables. There will be no oil or gas country that is not affected by the clean energy transition Fatih Birol, head of the International Energy Agency BP, which holds a 20 per cent stake in Rosneft as a legacy of its investments in Russia, has said it will produce less oil and gas in the future and only invest in the highest returning projects under the leadership of chief executive Bernard Looney. The company and its peers have faced pressure from investors, activists and the wider public to reduce their contribution to climate change and to invest in wind, solar and hydrogen projects. But the move has not been universally embraced, with BP’s share price hitting a 25-year low last Thursday to 232.40p. It was trading at 234p on Monday afternoon in London. The decline has not been unique to BP. Other oil companies, including US majors largely sticking with oil and gas, have also suffered share price declines because of the widespread uncertainty about the future of the energy market.  Analysts say state-backed oil companies such as Rosneft, which pumps about 6 per cent of global crude supplies, could stand to benefit if European energy majors back away from marginal oil and gas projects. But they may face a graver longer-term threat should oil demand peak in the coming years, with hydrocarbon revenues key to the financial health of countries such as Russia, Saudi Arabia and Nigeria. Recommended AnalysisOpec Opec keeps strategy under wraps in oil stumble De La Rey Venter, Shell’s head of Integrated Gas Ventures, said there was little doubt “demand for oil products will eventually decline” but conceded there was significant doubt around timing. “Whether it is this decade or next is anybody’s guess,” Mr Venter told the FT conference. The energy majors’ shift away from oil has coincided with prices falling sharply as coronavirus has crimped demand. Some analysts have warned the pandemic may have brought forward a plateau in oil consumption, if people fly and travel less. But a significant part of the industry still believes oil demand will return to expansion once the pandemic is under control, storing up problems if investments in new supplies remain depressed. The 100m barrel a day pre-pandemic oil market required 3m-5m b/d of new supplies to be found each year just to keep up with depletion at existing fields. Twice weekly newsletter Energy is the world’s indispensable business and Energy Source is its newsletter. Every Tuesday and Thursday, direct to your inbox, Energy Source brings you essential news, forward-thinking analysis and insider intelligence. Sign up here. Mr Casimiro, who was sanctioned by the US earlier this year as part of penalties targeting Rosneft’s trade with Venezuela, said the fall in prices was restricting production in the US, though he said it may start to recover if crude gets back to $50 a barrel from $40 today. “The question is to what extent they can regain the market share that was previously there?” Mr Casimiro said. But Fatih Birol, head of the International Energy Agency, cautioned, however, that oil-dependent countries must concentrate on diversifying their economies as the risk of a peak in demand was very real. “It has never been so urgent as it is today,” Mr Birol said. “There will be no oil or gas country that is not affected by the clean energy transition.”