Credit deflation and the reflation cycle to come (part 3)

[Hancock]

2 hours ago, Lightscribe said:

On Tuesday, Mr Johnson defended his net zero target, saying he believed the “great wisdom” of the British people meant they appreciated the importance of acting.

 

Yes the British people used their great wisdom to vote for Caroline stupid cow from the Green Party in 2019, well at least it seems as if they did.

41 minutes ago, HousePriceMania said:

Unfortunately I bought some VIV last week 

Wouldnt let me buy any on Monday, fucken AJ bell shite.

[sancho panza]

9 hours ago, DurhamBorn said:

Some of the Brasil stocks are getting into nice areas to open positions for anyone who wants exposure and who can live with the volatile nature.Not for widows etc etc DYOR.

AGRO,CIG,VIV,TIMB iv been adding to or set more ladders at 4% drops.

Iv sold out of Alcoa Corp pretty much 4x on that,though didnt buy a vey big holding, and iv moved 1/2 into TEF Germany this morning and im going to get a few Verizon later.

 

I see you've already  highlighted VIV n TIMB but you're obviously more widely read than we realsied.

4 hours ago, kibuc said:

Interesting news from Poland.

They've already had a rates increase in Oct from 0.1% to 0.5%, and today there was another one, this time all the way to 1.25%.

October inflation was measured at 6.8% yoy.

K will this incentivizeBritish based Poles to return home before things get more expensive?

Is there a nascent PEXIT movement in Poland or is it still a happy member of teh EU? What's the general mood like there,does it feel like the economy's running well?

[Hancock]

20 hours ago, sancho panza said:

 

A deflationary BK event looks highly likely,stock market drop will follow imho.Retail sales are an indicator but stock markets may get driven higher by commodity prices.Still lots of bulls out there and others believing the Fed has this under control

For me junk bond yields running negative in real terms and the US govt interest bill being 111% of tax receipts only ends one way.It's jsut the timing.For now I remain long the oils/telecoms/potash/goldies etc but reserve the right to be worng

But this is the thing, a BK is seemingly reliant on inflation continuing to run at current levels, so they have to raise interest rates and end printy printy.

But another recession on the horizon is surely deflationary, and just what the central banks want .... as it then enables them to keep interest rates on the floor and print some more.

I know sooner or later this all implodes on them ... but if a recession happens in 2022, then its what the market wants ... as it enables the status quo to continue ... for a while longer! 

If i'm missing a part of the puzzle, i'm happy to be shown where!

[sancho panza]

1 hour ago, Hancock said:

But this is the thing, a BK is seemingly reliant on inflation continuing to run at current levels, so they have to raise interest rates and end printy printy.

But another recession on the horizon is surely deflationary, and just what the central banks want .... as it then enables them to keep interest rates on the floor and print some more.

I know sooner or later this all implodes on them ... but if a recession happens in 2022, then its what the market wants ... as it enables the status quo to continue ... for a while longer! 

If i'm missing a part of the puzzle, i'm happy to be shown where!

BK(my defintion is a deflationary wave of defaults in the banking sector/corp bond markets).The secondary effects of that deflationary wave will be stock market drops.

For  a BK/credit deflation to occur we don't need price inflation to keep running but if it does,it will make the BK an even more powerful wave.

Recessions are by their nature deflationary but here I think it's worth noting the importance of separating price inflation/deflation from credit deflation/inflation.

CB's playbooks are very nuch based on QE/Zirp but the reality is that rampaging price inflation will restrict their room for manouvre.Hyperinflation is always and everywhere a political choice.I don't see it in the West.

I think 2022 will see the beginnings of the unwind in junk bonds.......then the fun will begin.

[Lightscribe]

3 hours ago, Loki said:

My own personal reaction (perhaps my constitution is weaker after 18 months of the world wide gaslighting) is that if the announcements on the back of COP-VID (even just those from the last 2 pages of this single thread!) don't scare the shit out of you, you haven't joined all the dots yet.

Might be time for a 'stiff drink' as GG says...

Hope I'm wrong.

Gym bro had it all sewn up in 2020

 

[BWW]

5 hours ago, Axeman123 said:

Yeah, cos he knows it would be 90:10 against this rubbish. Was this even hidden away in his manifesto, or is he just assuming the right to remake our economy and civil liberties without debate? Net zero is going to mean rationing of travel, energy consumption, and many types of food just for a start.

Well there will be a GE within 3 years and seems there's a huge opportunity for a new party given the awfulness of SirK+co.

Looks like it should be called the freedom party and can simply abolish any undemocratic nonsense Boris has imposed. But what public figure could lead such a party?

[Barnsey]

Short term not looking too great...

 

[Bricormortis]

8 hours ago, BWW said:

Well there will be a GE within 3 years and seems there's a huge opportunity for a new party given the awfulness of SirK+co.

Looks like it should be called the freedom party and can simply abolish any undemocratic nonsense Boris has imposed. But what public figure could lead such a party?

 

 

[Harley]

12 hours ago, Axeman123 said:

It honestly feels like the EU all over again. Somehow we are joining something that will trump national politics without any meaningful debate or mandate, and on which both parties will form a united front at election time anyway going forward. Innevitably the scope will creep massively, and be almost unrecognisable within a decade with it's tentacles in every corner of our lives. None of the people running it will be elected and none of it's policies will ever be debated, instead just presented as a fait acompli.

It even has many of the same ghouls previously associated with the EU. Just as the EU was a gravy train for failed national politicians, will the church of climate be the next level beyond that for failed EU ones?

I always thought the real battle would be after Brexit.  So it is and we're losing because most don't even realise.

[Harley]

8 hours ago, BWW said:

Well there will be a GE within 3 years and seems there's a huge opportunity for a new party given the awfulness of SirK+co.

Looks like it should be called the freedom party and can simply abolish any undemocratic nonsense Boris has imposed. But what public figure could lead such a party?

They're acting like there won't be another GE, or it'll be irrelevant, or fixed.

[Hancock]

38 minutes ago, Harley said:

They're acting like there won't be another GE, or it'll be irrelevant, or fixed.

Seems since 1997 (Brexit aside) they have become irrelevant, have to remember the Tories supported all Labours spending and bailout ... and since they've been in charge have then gone on to copy all Labours manifestos pledges on spending ... apart from since 2019 where they've obviously spent hundreds of billions more than Corbyn could have ever dreamed.

[headrow]

BT dividend is back

Telecoms giant BT reported a fall in profit in the first half of the year as higher finance expenses and a weakness in its enterprise and global business weighed on performance. 

for the half year to 30 September 2021, pre-tax profit fell 5% to £1,009 million, while revenue fell 3% to £10,305 million

The fall in revenue was driven by a decline in its enterprise and global, and flat growth in its consumer business. 

An interim dividend of 2.31p per share was declared, 

'Openreach has now rolled out full fibre broadband to almost 6m premises and continues to lower its build cost,' the company said.

Looking ahead, the company confirmed its financial outlook for FY22 and FY23, and brought forward its savings target. 

'We have hit our £1bn cost savings target 18 months early, which allows us to bring forward our FY25 target for £2bn of savings to FY24,' the company said.

[kibuc]

For both of you that are still holding, the greatest and pantherest of all miners reported, erm, negative profit of $18mil for the quarter, with revenues more than halved due to "operationally challenging" Q3 and with Q4 also expected to be a "challenging quarter". Fookin' hell, that a depressing quarterly report if I ever saw one.

[headrow]

Just need Carnival , Go Ahead and  Stagecoach to resume payments now. I really should dump them 3 dogs , along with Vodafone easily the biggest drag on my portfolio. Wish i'd never invested in any of them! New River Reit has cost me a fortune too.

Them 5 shares are 20k in the red , might take the loss and offset it for my tax return. Can't see any of them ever getting back to what i paid for them.

[jamtomorrow]

54 minutes ago, Harley said:

I always thought the real battle would be after Brexit.  So it is and we're losing because most don't even realise.

The Culture War is bread and circuses for the politically aware, designed to keep distracted those who would otherwise be dangerous to the interests of the establishment factions that fan its flames.

The never-ending "battles" are a feature, not a bug. You will be presented with "battle" after "battle" until you realise the only winning move is not to fight.

[Heart's Ease]

12 minutes ago, headrow said:

BT dividend is back

Telecoms giant BT reported a fall in profit in the first half of the year as higher finance expenses and a weakness in its enterprise and global business weighed on performance. 

for the half year to 30 September 2021, pre-tax profit fell 5% to £1,009 million, while revenue fell 3% to £10,305 million

The fall in revenue was driven by a decline in its enterprise and global, and flat growth in its consumer business. 

An interim dividend of 2.31p per share was declared, 

'Openreach has now rolled out full fibre broadband to almost 6m premises and continues to lower its build cost,' the company said.

Looking ahead, the company confirmed its financial outlook for FY22 and FY23, and brought forward its savings target. 

'We have hit our £1bn cost savings target 18 months early, which allows us to bring forward our FY25 target for £2bn of savings to FY24,' the company said.

Ta for posting. Ex div 30 Dec, payment 7 Feb 22. Our last bt div payment was around that date in 2020.

[Majorpain]

15 minutes ago, kibuc said:

For both of you that are still holding, the greatest and pantherest of all miners reported, erm, negative profit of $18mil for the quarter, with revenues more than halved due to "operationally challenging" Q3 and with Q4 also expected to be a "challenging quarter". Fookin' hell, that a depressing quarterly report if I ever saw one.

The Mighty Panther (Pantherus Nonminus) has just gone critically endangered.  For just £100 a month you can help keep the Directors living in the manner to which they are accustomed.

[M S E Refugee]

28 minutes ago, kibuc said:

For both of you that are still holding, the greatest and pantherest of all miners reported, erm, negative profit of $18mil for the quarter, with revenues more than halved due to "operationally challenging" Q3 and with Q4 also expected to be a "challenging quarter". Fookin' hell, that a depressing quarterly report if I ever saw one.

This came up in subscriptions yesterday.

 

[CVG]

54 minutes ago, headrow said:

An interim dividend of 2.31p per share was declared, 

Exactly half the old interim in 2020, so perhaps the final in Sept will be 5.39?

[MrXxxx]

On 02/11/2021 at 16:04, JMD said:

Ok maybe the link below is only a minor financial podcast, but I like to imagine that this is how Grant Williams and Luke Gromen talk between themselves when they are off camera!!                                                                                                 The interesting/scary(?) thing is that these podcast guys are currently very much part of the financial establishment, partners/directors at two different finance outfits (price-value asset managers/think trading.com). Here they interview an ex Best-Invest VC guy who's 'gone sole trader' and now just invests his own money, so real skin the game... walking his own talk so to speak. Please ignore the pod-cast crypto title, it was only a small part of the content. For me it was fascinating to hear the frustrations/fears/predictions of these people, who as i say are all currently operating at relatively senior levels within our ossified financial system. It's a long podcast, but I think very refreshing to hear from people within the industry, who's thinking chimes with this thread.                                                                                                                 https://m.youtube.com/watch?v=EVKW-M4HKHk

Although quite long, well worth a listen...helped me put the 'final piece in the Covid jigsaw'...less about Crypto/finance perse, but helps with the Macro 'Big Picture'

The crux is between 45-60 minutes, where especially 'The people' are 'hanging themselves' by adopting contactless payment because its trendy; helps you understand why the government has recently been so supportive of increased maximum for contactless payment [despite fraud implications], little by little it will be nudged up until there is no maximum and all transactions are made via contactless...a cashless society then means CBDC can be applied without anyone being able to revert to the old system....'no way back'

What I didn't agree with was his insistence on Crypto becoming the 'new' gold....the Asian countries still value gold as a deposit of wealth, and have always done so, it will take decades for this to change if it ever does.

[Barnsey]

Key final point from Sam, and exactly why the BoE won't go fast with rate rises...

 

[Harley]

1 hour ago, headrow said:

Just need Carnival , Go Ahead and  Stagecoach to resume payments now. I really should dump them 3 dogs , along with Vodafone easily the biggest drag on my portfolio. Wish i'd never invested in any of them! New River Reit has cost me a fortune too.

Them 5 shares are 20k in the red , might take the loss and offset it for my tax return. Can't see any of them ever getting back to what i paid for them.

At least nice to hear I'm not alone, although no New River for me.  Probably about the same amount too.  No tax loss selling for me though as they're all in an ISA.  VOD is still up as it's a long term hold and is a div player.  I could have covered the losses of them all by trading the bounces but I had other things to do.  I just leave them there as a reminder that a good story isn't enough!

[Adarmo]

On 04/10/2021 at 23:35, JMD said:

Yes, it always makes me chuckle when commentators disingenuously describe Russia having similar GDP to Italy so implying the country is somehow irrelevant. The next cycle will I'm sure rank countries with commodities much higher, but it's an interesting debate as to how/where Russia 'fits'. Ie No longer a super power like USA/China, but compared to other Western nations/world powers such as UK or Germany, surely Russia is up there?

I like to think of it like a game of Poker. Each country has it's hand to play and then some other 'skills' like working out what hands others have, as well as bluffing. 

I'd say UK has a fairly strong hand and is very good at bluffing. The  Russians tend not to bluff so much but have a couple of very good cards there like natural resources, strongest army in the world (no doubt they could march to Western France if they fancied it - see Operation Unthinkable and they're even stronger now!). GDP is a fairly lame measure when you consider what that money will buy in Russia itself. You can get a nice apartment on the outskirts of Moscow (largest city in Europe by far) for $100K..... what can you buy  in some shithole in England for that?

I think I'd say that Super Power status truly is only for the USA at this time. It's defined as the ability to project power around the world and I'm not sure any other country can do so. Maybe China can soon. Maybe that term is outdated? Maybe the USA would fall behind economically and still maintain a military far beyond others as a % of GDP, a bit like USSR tried to do when it failed. 

[Mapper]

19 hours ago, DurhamBorn said:

Its the excuse to divert capital from consumption to investment.Inflation / distribution cycles always need an enemy to declare war on as the excuse to inflate to rescue bankrupt governments.Now they cant do that due to mutual assured destruction they need a global enemy.

They have a massive problem with people with brains becoming rentiers and removing themselves from work.They need to reverse that.Its why they will keep rates way below inflation.They will also find ways to kill BTL.Tax,regs etc as well.

In simple terms they want to divert ordinary peoples savings to the green agenda.They want saved accumulated labour to be used to "save" the planet so the rich can enjoy it.They would turn earth into an exclusive holiday venue if they could and stick all us underground in cities on Mars .

In simple terms they want to remove the ability of ordinary people to be able to make an income from capital.

They will of course force up the prices of everything they hate.BP will be supplying 20% of India's gas mid cycle.

Sunaks nut job idea means Tesco has to comply,Aldi and Morrisons dont.

Very very sinister.

 

 

 

This kind of post is fantastic! So to the point it's amazing.

But, how do any of you guys get this stuff across to close family etc? Do you even try these days?

I just cannot seem to get it through to people how fucked the middle is.

They don't seem to care. It makes me a bit mad and that doesn't help in trying to get my point across.

[Harley]

1 hour ago, Heart's Ease said:

Ta for posting. Ex div 30 Dec, payment 7 Feb 22. Our last bt div payment was around that date in 2020.

Up 5.45% atm!  With VIV and TIMB up big yesterday, start of a run?  I'm watching telcos hoping for better technicals.  Mine could be an interesting review next week.

PS:  DYOR, not trading advice, discussion only, etc but IMO a fake buy on the daily last month, weekly now strengthening but needs more time, monthly still looking weak.  Bounced off the Jan21 high on the weekly which is good.  I might be long term fully allocated but generally I now buy my first ladder on a weekly buy confirmed by a daily buy and another on a follow through monthly buy.  I'm more interested in the other telcos though and am behind DB as I'm waiting for more technical strength (plus adversion to debt).  It'll be interesting to see how wrong I am, again!  Quite possible as things technical are very odd and more unpredictable than usual atm.