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

[sancho panza]

iirc HSBC gets 60% of profits from Hong Kong-well it did do.

Looks like they're headed for £1.

https://wolfstreet.com/2020/09/30/hong-kongs-overleveraged-commercial-real-estate-tycoons-unravel-prices-plunge-creditors-begin-to-take-over/

Hong Kong’s Overleveraged Commercial Real Estate Tycoons Unravel, Prices Plunge, Creditors Begin to Take Over

Beijing imposed capital controls on money flowing out of China, depriving the Hong Kong property market of much of its life blood. Trade tensions between the U.S and China began escalating, leaving Hong Kong slap bang in the middle. And the city was rocked by student protests, which recently met the immovable force of the Chinese Communist Party. And now, there’s the virus crisis.

The Hong Kong economy is now in the throes of its deepest ever recession on record. Office rents are slumping, vacancy rates are rising and the value of some of the world’s most expensive commercial real estate is plunging.

Values of class-A office buildings in the city fell last year by 7%, the first fall since 2008, according to Jones Lang LaSalle Inc. With Covid-19 thrown into the mixer this year, they could fall an additional 20%, the commercial real estate services company warned. With office vacancies at a 15-year high of 6% in Central, Hong Kong’s priciest office district, after rising for 13-straight months, rents are also heading down. In August alone, rates for offices fell by 2.5% compared to the previous month.

 

[Lightscribe]

1 hour ago, Panda said:

I'm tempted to whack £50k on the cards. If it goes south she'll leave me.

Umm now there's a thought. .

£50k bounce back government loan? You could maybe swing it as though you’re investing in the likes of BP to help the UK economy out.

[Lightscribe]

21 minutes ago, Vendetta said:

I have a ‘vested’ interest and connections within Rolls Royce. 

All is not well within RR. 

My buy point is 93p... ladders at 83p and 73p. 
 

 

The share rights were always coming, I’ve only got a very small allocation so far, but will take up the share offer of 10 to 3 shares.

I don’t think the government will let it fail due to the contracts it has, military, marine etc. Break it apart and sell it off maybe, but hopefully the government are now reaping what they have sown with selling the family silver off to the highest bidder in UK industry.

I wouldn’t hold my breath however as the government seems insistent that the FTSE 100 be full of house builders that pay big donations in return for lining their greasy palms with the likes of HTB schemes and such like.

https://www.independent.co.uk/news/uk/politics/tory-party-property-developer-boris-johnson-conservative-donors-a9588381.html

[Don Coglione]

26 minutes ago, Bobthebuilder said:

Peckham?

This time next year, Rodders...

[Majorpain]

2 hours ago, Panda said:

Just a thought.

Divis Dec....

Qualification day around early November...

Won't that offer a floor. I mean 5% plus and 7% is a hell of a carrot...

Gotta admit a part of me thinks who's shorting these two Oilies....

Don't think I've ever seen such a big red number in my HL portal...

What's worse sat here in the boozer. It's like Orwellian 1984...The world's gone mad...

Exact timing is very difficult, but "other" factors coming into play makes it unlikely that lockdown will continue forever.  Tinfoil hattery would suggest that post 3rd November would be a good bet.

And cheer up Citizen that the government has relaxed restrictions, if you disagree it will be off to the re-education camp with you to watch endless repeats of Whitty and Valance scare videos!

[DurhamBorn]

3 hours ago, Errol said:

BP now same price as it was in April 1995 ...

Its fantastic isnt it.Sentiment on the floor now,most hated sector in history,makes fags look like a cancer cure from the early noughties.Hopefully funds are emptying as well flushing everyone out.The worry is execs panic more than they already have on ditching assets and building windmills,they need to hold the line,Brent here is do-able for big oil and will help finish shale,vital the pain lasts long enough.Once covid is in the rear view the dash for assets will be huge.Oil and gas will follow gold and silver,they will all go parabolic late in the cycle.People need to be diversified of course,never ever go all in,but taking the energy sector to 20%+ of a portfolio might prove hugely profitable.Il likely increase to around 25% over the next week or two.

Dislocation is upon the markets,funds are full of woke platitudes,but empty of macro strategists.These times define ordinary peoples families financial futures.The sentiment and pressure is always huge and relentless as a future that doesnt exist is sold as certain and dead ahead.Its how people are whipsawed out of massive value and into massive bubbles.Its crucial to hold the line on de-complex areas because inflation is moving through the pipes.

Being a contrarian means you have to face straight into the storm and it can be a very lonely place,but the 100% certain thing is governments will inflate away all fiats value over time,once you know that you just need to know roughly where on the roadmap we are and if the liquidity will be larger than the economies productive capacity.The swing from dis-inflation to inflation.

 

 

 

 

[Transistor Man]

2 hours ago, sancho panza said:

ANy views anyone? @Transistor Man

I remember buying them with a 1 handle back in the tech bubble

I’m wary, I don’t own any, yet. I’m certain they won’t ever be allowed to fail outright, because of submarines and programmes like Tempest - replacement for Eurofighter. They possess genuine expertise in engineering, and materials science/ superalloys, which (almost) cannot be replicated. 

[Sugarlips]

14 hours ago, Gin said:

I would rather be in the UK , than a foreigner in an Asian Country or the Carribbean .

Most foreigners  especially if white , come up regularly in conversations by the local population . Everyone and his brother have a story to tell about "those foreigners"

Foreigners as in any country , get blamed for all sorts of ills and jealousy can boil over into violence toward them , if local order breaks down for whatever reason , such as a pandemic or a currency run etc .

Much better a devil I know than one I do not. I would much rather be in a system (even a corrupt one) that I was born into than one where I do not know the, often nuanced order of things .

I was walkin' down the street
Concentratin' on truckin' right
I heard a dark voice beside of me
And I looked round in a state of fright
I saw four faces one mad
A brother from the gutter
They looked me up and down a bit
And turned to each other

I say
I don't like cricket oh no
I love it
I don't like cricket no no
I love it
Don't you walk thru my words
You got to show some respect
Don't you walk thru my words
'Cause you ain't heard me out yet

Well he looked down at my silver chain
He said I'll give you one dollar
I said You've got to be jokin' man
It was a present from me Mother
He said I like it I want it
I'll take it off your hands
And you'll be sorry you crossed me
You'd better understand that you're alone
A long way from home

 

[wherebee]

9 hours ago, wherebee said:

well, jumped in again at 17.15

It's either the best investment I have made after my GDXJ trebled, or I'm going to lose it all as BP goes under.

correction got it for 17.00 in the end.  And yes, ADRs.  

Although down below 17.00 by end of day.  I've brought the average down significantly by laddering in though, to 18.5, which make me feel much happier.

now all I need is no financial disasters to force me to sell ..

[Viceroy]

For those interested, here are some recent excerpts from Martin Armstrong's private blog. He bangs on about the real cover up behind Covid and the risk to gold/crypto/bonds;

"..I will say this ONLY on this Private Blog. I was contacted and asked if I would advise on revising the world economy. I have declined. They seem to know that I have studied more monetary systems throughout history perhaps than anyone else and I was called upon when they were creating the G5 (now G20) back in 1985. That said, there is a very serious effort to take over the world and it is highly advanced. They intend to transform the United Nations into a one-world government like the EU whereby the European Commission holds all the power yet they are unelected.

This is being pushed BECAUSE the socialistic system is collapsing and governments will fail. Their way to try to keep this system is to move more authoritarian full steam ahead - one reason I have been warning that there may not be presidential elections post-2024. The patterns we are starting to see emerge in the markets will be the early warning system. Their entire agenda hinges on getting rid of Trump because he is not about to surrender the sovereignty of the United States to the United Nations.

The United Nations began its bid to become a new world order back in 2012. This is when they first began to argue for an international tax to save the world - “World Economic and Social Survey 2012: In Search of New Development Finance” (WESS 2012)
They are demanding a reduction of emissions of 50% by 2030 without regard for the economic impact. They expect Guaranteed Basic Income to compensate for the loss of jobs in fossil fuels including closing all coal mines and sacking coal workers. They expect somehow to put these people on welfare and force them to work moving them into renewables. They are demanding the end of all fossil fuel subsidies which includes the end of off-road diesel fuel rebates for farmers and miners. They want carbon taxes on everyone for use of fossil fuels which will end up taxing you on your heat and air conditioning, banning all forestry so the end of all paper, and mandating “sustainable” farming under their restrictions.
The UN Agenda also seeks to impose Marxism on all countries demanding more be spent on welfare, the abolishment of all tax cuts, and they seek to control not just the press as in Communist Russia, but restrict all social media so what we have seen already by YouTube and Facebook removing anything that is contrary to the UN Agenda will be applied to everyone and all platforms. Free Speech will come to an end. They then want a quota system under which politicians must be allocated by gender and race rather than policies. This is to ensure that no government will seek to buck the UN Agenda. While they seek to declare abortion as a human right, they will most likely adopt force implants of chips to regulate birth control already developed by Bill Gates. Of course, all paper money is to be abolished and everyone will have a bank account from which they can automatically extract taxation.

They will simply declare WITHOUT notice that all government outstanding debt will be converted to Perpetual Bonds and they will only be liable to pay interest each year but you will NEVER be able to redeem them. They will MOST LIKELY also impose digital currency at the same time announcing that all outstanding paper money will expire. They are PRAYING that Trump will lose and the Democrats will also take the Senate. The Democrats have already attempted to create the digital dollar and will join this ASAP. Biden already said he will rejoin the Paris Accord.They are counting on the Democrats stealing the election and they are hoping to impose this by January 1st, 2021. 

I STRONGLY advise to sell government debt and at least convert to private AAA corporations. Still, keep the maturity short-term for rates will rise. The Central Banks will be able to raise rates again under Keynesian Economics once the government sovereign debt is converted to PERPETUAL BONDS

In January 1975, M1 money stock was 273.4 billion (see Fed St Louis). That rose to 385.5 in January 1980 - a gain of about 141%. Gold rose from nearly $200 in 1974 to $875 which was a gain of about 437% - obviously greater than the increase in the money supply. Now the M1 reached 5,574 billion as of September 14, 2020. If the entire theory that gold rises in proportion to inflation were true, then it should be trading at $12,668.00. 

All of these scenarios are just sophistry - they are just a gold mask to hide the true face behind. They sell newsletters and are in search of a new crop of unsuspecting investors to keep the scene going. I was a bullion market maker during the 1970s. The scenarios put out today are the very same they have been using all along for decades.

Gold will rise not because of the money supply, but because of a collapse in confidence in the government. These people have everything ass-backward, as they say. It is NOT the hyperinflation that causes gold to rise, the hyperinflation takes place because people no longer trust the government, have hoarded their wealth in gold, tangible assets, or converted to another currency when the problem is isolated as with Zimbabwe or Germany during the 1920s post the Communist Revolution of 1918.
The future rise in gold will have NOTHING to do with the money supply, hyperinflation, or any of that nonsense. These people do not understand that the central banks cannot increase the money supply enough to even match the destruction in capital formation which has taken place on a global scale with over 300 million unemployed. We are in the midst of a real live invasion, but this is not an army landing on the beaches, this is money being used to bribe our pretend "representatives" who run government no different from the collapse of the Roman Republic that forced Julius Caesar to cross the Rubicon. But the fake news back then painted him as the tyrant as they do today with Trump. The people cheered Caesar and the senators had to flee Rome because they were the corrupt oligarchs. Once more, this invasion of our future is being carried out by American oligarchs.

Gold will rise BECAUSE of a collapse in the confidence of governments on a global scale. Just as the Roman Republic fell and became Imperial Rome, we face the same crisis on a grand scale post-2032

..The risk for gold is more regulation because these people need to control the monetary system by using Modern Monetary Theory. They are canceling currency and if the Democrats win, they already have proposed a digital US dollar. They will not tolerate gold and private cryptocurrencies to circumvent their grand plan.

Therefore, a Trump victory would force them to impose these digital currencies and perpetual bonds in Europe. The US would not follow at first. This is part of the reason a Trump victory would be bullish on US assets in general. A Biden victory would probably also involve a Senate flip and then we have real problems with all three in the hands of Globalists. Just find a hole to hide in - it will get very bad.
 

I am not being POLITICAL here. I have little respect for career politicians. This is simply a matter of who is the lesser evil from an economic perspective. Trump is at least not going to do something that would hurt his own businesses compared to career politicians who simply collect for life and get free health care. This is a battle where there is a globalist agenda and unfortunately we live in a Republic where the politicians are for sale just as they were in the Roman Republic which also collapsed and then became an imperial monarchy.

So this is not a matter if you like Trump or hate him. This is an agenda that is coming BECAUSE borrowing year after year is collapsing and all the social programs collapse if they have to keep borrowing. Their ONLY escape is MMT to keep the welfare flowing and destroying jobs to save the planet requires Guarantee Basic Income. A Trump victory buys us perhaps 2 years. I have been WARNING that what comes AFTER Trump is my great concern.

 

We are building an index on stocks that would benefit from war. This may be an important way to look into the cycles for if there is a deliberate conspiracy to push for World War III, those behind the scheme will move their money strategically - just like how Bill Gates dumped stocks in December 2019 which we have VERIFIED. 
This should provide another important perspective on how to strategically shift investments accordingly.."

[Option5]

In the Norwegian press this morning:

"E24 has gained access to the report, where Equinor emphasizes that they drill fewer wells than before and invest far less in oil exploration, and that they therefore want to become more efficient "based on the current level of activity".

The cuts mean that the global workforce in Equinor's exploration activities will be cut by "about 30% by the end of 2022".

[wherebee]

Trump tested positive for COV19 today.  Is this the BK event?  Big crash on US opening (in <7 hours)?

[MrXxxx]

12 hours ago, sancho panza said:

think with these psots you bring a lot of your marekt experience to bear so you're introducing concepts to people experienced/inexperienced alike and you're also introducing some fresh ideas in terms of possivble sectors.

This is what I like about this thread, lot of specialist experience and lots of viewpoints perspectives, helps me reinforce, develop and reject some of mine...just what a good `sounding board` should be about.

[MrXxxx]

12 hours ago, sancho panza said:

Any good Aussie companies worth running the slide rule over?

It's not putting everything on black.Gambling has binary outcomes,buying shares doesn't.There are a range of otehrs eg capital growth,dividend growth,or capital loss.

 

True, but its not diversified either...first rule of investing, "Don't be a distressed seller"...all in on one stock/sector is great until it goes `tits up`, you need the money, and the market will pay you what it wants to.

[MrXxxx]

11 hours ago, sancho panza said:

ANy views anyone? @Transistor Man

I remember buying them with a 1 handle back in the tech bubble

You know why today? RI, 10 @ 32p for every 3 held...could it go bust?..unlikely as government hold golden share and just finishing off worlds most advanced engine test tunnel...civil is about 50% of revenue, and base on wide bodies PAYG maintenance, engine sales are loss leader..with new funding enough cash burn for 24 months...just a few facts to consider.

[CVG]

1 hour ago, wherebee said:

Trump tested positive for COV19 today.  Is this the BK event?  Big crash on US opening (in <7 hours)?

Nah. Probably marks the bottom! Everything positive from here.

[JREWING]

23 minutes ago, CVG said:

Nah. Probably marks the bottom! Everything positive from here.

Be nice to see these lows hold for a while. Provides some wonderful entry points.

Would love £50k @ 8.5. 

My yield would go stratospheric if divis go back to 0.36...

[Loki]

RDSB below 900

[geordie_lurch]

41 minutes ago, Loki said:

RDSB below 900

I'm already down 20% on them so am going to keep away from them for now 

[DurhamBorn]

1 hour ago, Panda said:

Be nice to see these lows hold for a while. Provides some wonderful entry points.

Would love £50k @ 8.5. 

My yield would go stratospheric if divis go back to 0.36...

I think the divi will go back up to 0.24 in a few years,likely they will use buy backs on top of that.

[Chewing Grass]

Just this minute had a company email through, they are abandoning their lease on the 450 seat satellite office block they were in and moving everyone back into the mothership. The mothership had nearly 1500 seats pre-covid and now has 900 so that's 50% reduction in bum-count through a combination of binning people and normalisation of WFH.

Another nail in Commercial Property.

As an aside they have also announced that they are cutting their employers Pension contribution from a maximum of 9% to 5% across the board irrespective of the employees contribution.

The big retrenchment has started.

[JREWING]

40 minutes ago, geordie_lurch said:

I'm already down 20% on them so am going to keep away from them for now 

My prediction.

Five weeks today that 20% will turn positive...

Got my lucky pants on.....

Managed to beg borrow and steal £10k for a 16.29pm entry point on RDSB.

I hoping if low enough it'll bring my average below 10....

That'll do me Rodder's..

[nirvana]

Getting more RDSB sub £9! Glad I dumped that load at £9.60, shame I've still got bag loads from over a tenner 

Yeah, oh
Yeah, oh
Yeah, oh
Yeah, oh
Yeah, oh
Yeah, oh
Mmmm
Yeah, oh
Mmmm
Yeah, oh
Mmmm
Yeah, oh
Mmmm

 

[JREWING]

11 minutes ago, 5min OCD speculator said:

Getting more RDSB sub £9! Glad I dumped that load at £9.60, shame I've still got bag loads from over a tenner 

Yeah, oh
Yeah, oh
Yeah, oh
Yeah, oh
Yeah, oh
Yeah, oh
Mmmm
Yeah, oh
Mmmm
Yeah, oh
Mmmm
Yeah, oh
Mmmm

 

You lucky barsteward..

I had an opportunity to dump the lot at 9.71 Wednesday morning..Should av, cud av..Never had the balls....

Good luck today buddy..Enjoy you're harvest...

[nirvana]

4 minutes ago, Panda said:

You lucky barsteward..

I had an opportunity to dump the lot at 9.71 Wednesday morning..Should av, cud av..Never had the balls....

Good luck today buddy..Enjoy you're harvest...

you wouldn't think I was lucky if you saw my BP holding 

We need to be careful, this is an 'investors thread'.......

I'm struggling with my 'trader's mindset' here BUT I do keep coming back to thinking stop loss, stop loss, stop loss 

Good luck to you too! I'll be getting off my tits later with 'the harvest' too