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

[Harley]

10 minutes ago, M S E Refugee said:

For all of you Fresnillo fans Simply Wall St values them at £12.27.

Simply Wall St has a lot of good features but IMO that's not one of them!

[Democorruptcy]

20 minutes ago, Harley said:

Interesting you say that because my studies suggest that indeed happens as everyone still stays in equity but moves to this "safer" sector while the physical gets hit to cover equity margin calls (but will that be more BTC this time?).  But if things are bad enough the "committees" approve an asset allocation change and the physical takes over from the equities. Just my hypothesis!

In the old days a market crash resulted in lower interest rates/yields, market uncertainty rush to "safe", so PM's should do well just after the margin calls and the dust settles. Now with real yields so negative it seems like the 'rules' have changed? I remember querying in here that rates might not rise as much or as quick as suggested and said in 2011 we had 5.7% RPI and 0.5% base rate. Apparently the USA were going to force us to raise but it doesn't seem like they are very willing! 

[Harley]

1 hour ago, Harley said:

This goes out to all my Russian stocks.  You know who you are.......... 

 

Yay, they heard the love....

 

[wherebee]

https://www.globenewswire.com/news-release/2021/12/20/2355302/0/en/Shell-sets-out-expected-timetable-of-Simplification.html

 

so none of us need to do anything?  or are the fuckers going to pull some trick and give us cash in exchange for luverly shell shares?

[Harley]

19 minutes ago, Democorruptcy said:

In the old days a market crash resulted in lower interest rates/yields, market uncertainty rush to "safe", so PM's should do well just after the margin calls and the dust settles. Now with real yields so negative it seems like the 'rules' have changed? I remember querying in here that rates might not rise as much or as quick as suggested and said in 2011 we had 5.7% RPI and 0.5% base rate. Apparently the USA were going to force us to raise but it doesn't seem like they are very willing! 

Indeed.  I think the advantage of PMs has moved from protecting against inflation to protecting from outright theft!  Not to fear monger, but I'm currently concerned they may well ban purchases and/or heavily tax sales.

"To take point....is to assume the first and most exposed position in a formation....advancing through hostile or unsecured territory.  The inherent risks of taking point create a need for constant and extreme operational alertness.  However, ambushes often intend to let the point element past the prime kill zone in order to be maximally effective"!

[DurhamBorn]

55 minutes ago, MrXxxx said:

Not sure if this has been posted:

J.P. Morgan upbeat on BT Group following retail price hike

(Sharecast News) - Analysts at JP Morgan sounded an "optimistic" note on BT Group's recent decision to raise its retail prices by 9%, telling clients that "success" held the potential to support meaningful consensus upgrades.
"Whilst investors seem skeptical of both the appropriateness and sustainability of this move, our analysis offers a more optimistic read, and shows that

success has the potential to support meaningful consensus upgrades," the analysts said in a research report sent to clients.

Worth noting, that price hike came in the wake of 15 years of deflation in the industry.

Furthermore, they estimated that roughly 40% of BT customers were still mid-contract, meaning that they could not churn in order to avoid the increase in prices.

JP Morgan was also expecting a wave of similar announcements out of Vodafone, O2, and TalkTalk in February, while Virgin Media had already said that it would raise prices in March and Sky was expected to do the same in April.

"We estimate average UK household Telco spend may rise £70 per annum - arguably modest when compared to broader inflationary pressures elsewhere," they added.

In their 2022 outlook report they had already reiterated their "positive" stance for European telecoms, while adding BT Group to the investment bank's Analyst Focus List and naming it as their 'top pick'.

This time around they also highlighted the "rich" list of catalysts for BT that they saw ahead, which they expected would confirm that the company was on the cusp of a structural return to growth.

They estimated that would boost the company's equity free cash flow from £1bn at present to £3.5bn long-term.

JP Morgan was at 'overweight' on the stock with a target price of 255.0p.

Notice how they now see what the macro cross market work said nearly two years ago.They are setting up for people to buy when we were buying at 95p and some.Fantastic as well that @sancho panza coma score showed BT as the likely best buy at that time and it has indeed been the best up 100% since that day.

The reason they all missed it then is because they didnt have a macro roadmap showing inflation at this point so inflation locked contracts didnt show up to them as meaning anything.

[Majorpain]

1 hour ago, Sidd said:

I keep hearing about this JPM rigging the paper market and FBI investigations. The question is, whats going to stop it?

Welcome to clown world, JPM as part of their settlement 2020-21 into spoofing the silver market got their knuckles wrapped and promised not to do it again, at that exact time JPM exited Bank of America came in and took over the 800m oz Comex short position!  Its a big club and you are not in it.

1 hour ago, CannonFodder said:

DXY approaching 97 today (not quite there yet), this will cause grief for the rest of the world who need more dollars to buy resources and pay down dollar denominated debt.

I dont see how they can tighten into this. It will collapse nations across the globe.

I dont see how they can not tighten due to inflation.

Holding was probly the best outcome.

This current situation cant go on, it really cant. 

The system needs a purge every once in while to keep it stable.  The problem is that the 2008 problems (derivatives mainly) were simply papered over and not fixed, so now there is the "too much money chasing too few assets" inflation drama combined at the exact same time with not enough dollars in the world for everyone.  Fed in snookered in that fixing one problem blows up another.

[Harley]

6 minutes ago, DurhamBorn said:

Notice how they now see what the macro cross market work said nearly two years ago.They are setting up for people to buy when we were buying at 95p and some.Fantastic as well that @sancho panza coma score showed BT as the likely best buy at that time and it has indeed been the best up 100% since that day.

The reason they all missed it then is because they didnt have a macro roadmap showing inflation at this point so inflation locked contracts didnt show up to them as meaning anything.

And respect due because TBH identifying and then confirming that in specific cases takes imagination and effort because there's a lot of debt out there atm of the bad kind.  Plus I heard someone (a seasoned old hand) mention your derivative point of caution in a podcast this week.  That was the first time ever.  Most would have missed it!

[nirvana]

3 hours ago, Lightscribe said:

Silver has been manipulated for such a long time, that once it breaks free from the JPM shackles it won’t be coming back down anywhere near to the current prices

silver is dogshit for exactly that reason......there's no liquidity in the fekin market so they manipulate the fuk out of it...

if you're playing poker and you don't know who the patsy is, it's fukin YOU you knobber! lol (not a personal insult that goes for all silver holders....me included )

anyway, bottoms in according to Uncle Dave now so let's all be rich(er) this year eh? 

[Starsend]

14 hours ago, Libspero said:

The narrative seems straight out of the fed playbook.    They’re going in aggressively on the talking,  while simultaneously doing little or nothing to actually raise rates.  
 

So who will blink first..

That's their playbook and will be for years to come. Any interest rate increases will be the smallest they can get away with and only when they are forced. Real rates will be negative for years.

It never ceases to amaze me that people cannot see the game being played - they are delighted with the current inflation eroding unpayable levels of debt, it's all going exactly as planned. They just need to keep the sheep quiet for a few years while they get the debt levels down to sustainable levels in real terms. I hear a lot of financial commentators who seem to actually believe the FED don't know what they're doing - I think they know exactly what they're doing - although I think they could easily lose control if the sheep wake up to their fleecing.

 

 

 

[Starsend]

15 hours ago, leonardratso said:

diamond hands there, gold to the moon, they are trying to get your gold bars cheap, whales are building.....

hmmm eh.

You gotta hodl the godl.

Don't fodl.

[Harley]

4 minutes ago, nirvana said:

silver is dogshit for exactly that reason......there's no liquidity in the fekin market so they manipulate the fuk out of it...

if you're playing poker and you don't know who the patsy is, it's fukin YOU you knobber! lol (not a personal insult that goes for all silver holders....me included )

anyway, bottoms in according to Uncle Dave now so let's all be rich(er) this year eh? 

The lesson to learn regarding silver is that there are two prices for everything: the quoted price and the one that's paid.  We're going to see a lot more of that right across the board in our investing and personal lives.

[nirvana]

4 minutes ago, Harley said:

We're going to see a lot more of that right across the board in our investing and personal lives.

it depends on the supply and demand yes captain?......how much are you paying for a cubic meter of wood? a mate has just found a guy selling for 35 yuros...that's less than I paid in North Yorkshire 10 years ago......I'm still getting salad and veg for free.....as always it's not what you know it's WHO you bloody know! That's why the bankers always win man! 

[nirvana]

15 hours ago, leonardratso said:

diamond hands there, gold to the moon, they are trying to get your gold bars cheap, whales are building.....

hmmm eh.

you've been listened to crypto rampers for too long Leonard......

[nirvana]

I'm going 10x long Nasdaq lol......what's Uncle Dave got to say?

Why do you think they sold Silver after Uncle Jerome had his say? None of this shit matters anymore, you just need to follow the pigeon droppings......

[DurhamBorn]

27 minutes ago, Harley said:

And respect due because TBH identifying and then confirming that in specific cases takes imagination and effort because there's a lot of debt out there atm of the bad kind.  Plus I heard someone (a seasoned old hand) mention your derivative point of caution in a podcast this week.  That was the first time ever.  Most would have missed it!

There is and its critical first that free cash will be there to pay coupons and that it can be paid off or part paid off and some rolled over however bad it gets.Derivatives on those debts are my worry.Hedge currency etc is fine,but not if the currency rockets your debts are in and counter parties fail.Its the main worry i have for my holdings because i cant quantify it.Its like putting a few guys down in a scrap and walking out the pub all smug then the one you didnt see wacks you from behind with a chair.

[Harley]

26 minutes ago, nirvana said:

it depends on the supply and demand yes captain?

Usually yes, but the real question is what drives that?  The usual stuff, but then we have regulation, liquidity, etc, all coming to a price equation near you (both up and down!).

PS:  And that'll be "marm" thank you!

[DurhamBorn]

29 minutes ago, Starsend said:

That's their playbook and will be for years to come. Any interest rate increases will be the smallest they can get away with and only when they are forced. Real rates will be negative for years.

It never ceases to amaze me that people cannot see the game being played - they are delighted with the current inflation eroding unpayable levels of debt, it's all going exactly as planned. They just need to keep the sheep quiet for a few years while they get the debt levels down to sustainable levels in real terms. I hear a lot of financial commentators who seem to actually believe the FED don't know what they're doing - I think they know exactly what they're doing - although I think they could easily lose control if the sheep wake up to their fleecing.

 

 

 

Exactly,they are doing amazing once you know what it is they are after.They need tax receipts to grow faster than spending for governments,thats the aim for CBs.Its always been the case they would print back the 40 years of dis-inflation.Early i saw the fact they needed to lift everything 30% to stop systemic collapse.

We are entering the part of the roadmap now where inflation pushes up profits of inflation areas.The key is that they use the cycle to pay down debts as much as they can.If the stocks we bought ended the cycle ahead with the debt they have now they would be stuffed then.Its all about where you sit on the roadmap.

There is huge risk still though we get a massive credit deflation alongside that would be very difficult for CBs to contain.

[JMD]

For thread dividend 'junkies'...  stock screeners to play with!!                                                                                           UK only stocks but good data: https://www.dividenddata.co.uk/dividendyield.py?market=ftse100                                Global stocks (this link posted again for completeness): http://www.dividendsranking.com/industry-Telecommunications.html

[Harley]

43 minutes ago, Starsend said:

It never ceases to amaze me that people cannot see the game being played - they are delighted with the current inflation eroding unpayable levels of debt, it's all going exactly as planned.

First you have the good inflation and then you have the bad.  You grow your assets on the way up, preserve them, and then draw on them on the way down.  But if you start with net debt......!

[Democorruptcy]

40 minutes ago, DurhamBorn said:

Notice how they now see what the macro cross market work said nearly two years ago.They are setting up for people to buy when we were buying at 95p and some.Fantastic as well that @sancho panza coma score showed BT as the likely best buy at that time and it has indeed been the best up 100% since that day.

The reason they all missed it then is because they didnt have a macro roadmap showing inflation at this point so inflation locked contracts didnt show up to them as meaning anything.

It's always the prices in the crash now, not average ladder price on the way down! 

[JMD]

While I'm posting financial sites, this is what they used to look like back in the naughties, very clunky!! Pease note it is only updated weekly, but still has some good ratios, metrics, etc.                                          http://topstocktable.com/index.html

[Harley]

3 hours ago, Democorruptcy said:

The rate rises are always coming!

That article https://12ft.io/proxy?q=https%3A%2F%2Fwww.ft.com%2Fcontent%2Fc5a4d9ea-36e0-47ca-8433-f01be19e6980 says Silver is 33% FRES revenues and 15% of POLY

Just had a look to see where POLY comes in behind FRES, number 8 in Kitco's 2020 top 10

Good luck with your plan.

 

That was a nice Kitco link thanks.  It reminds me of many years ago when I "cleverly" bought a (reputable) report on PM miners and went out and bought them.  And lost a ton.  Maybe they had great fundamentals but I knew nothing about price action back then.  I thought if I buy them I'll do OK 'cause that's what the smart guys in the room said.  It's been such a very long journey......!  Many years later, I think I might be finally ready to read the link!  

[M S E Refugee]

1 hour ago, Harley said:

Simply Wall St has a lot of good features but IMO that's not one of them!

Yes, I learned that pretty quickly,still it's nice to dream.

[geordie_lurch]

BP's trade high so far today 399.85p - looks like it will get back over 400 again soon