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


spunko

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Yadda yadda yadda
14 minutes ago, sancho panza said:

Devastating when you put it like that.I've noticed at work of late (NHS )that a lot of the youngsters who are on sub £20k working nights/weekends, are living in HMO's/flat shares etc have a much harder attitude towards nbenefits than some of their older ,better paid peers(like my self).They see it right there,every shift,people who could work but dont' having a nice life,car,flat/hosue,kids,stuff they can't see themselves affording.

Don't get me wrong,life as a single person on benefitrs isn't great but for thsoe that work the system sensibly,then 16 horsu plus time with the littlies beats grafting 80 horus a week between two of you trying to raise kids

Interesting to read that. My colleagues are all older than that. Quite typical, I think, of large swathes of industry where technology has continually reduced the requirement for workers and therefore eliminated recruitment. Most own their own homes and those that don't have secure, cheap tenancies.

These people have no empathy for younger workers. This might change as some have kids coming up to working age. I have to bite my tongue when told some of the subjects chosen for university. They all have lefty views about more spending on welfare. Largely because they, through owning property for 15 years plus, have low fixed costs and therefore more spare income than most doleys.

I'm going to rephrase that last paragraph. They do have empathy. They see that house prices are too high and that student debt is a curse. What they don't do is see the bigger picture and how all these policies are linked. You can't give underemployed people a good standard of living over the long term without removing quality of life from at least some of the workers. They don't even realise that their standards of living would be higher if there was less welfare. There is no depth of thought. All they do is see a problem and say "fix it". No consideration of the effects of that action.

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sancho panza

Luke Gromen might be right even earlier than he expected with Fed pivot end Q3......can see markets rising as propsects of Fed pivot increase.

Weak dollar pahse here we come.

image.png.c261f70569e8b6c55d31de0e97134599.png

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Joncrete Cungle
2 hours ago, Noallegiance said:

Problems solved.

As you were.

Capture.PNG

https://en.m.wikipedia.org/wiki/Gideon_Gono

He sent in the police to arrest businessmen for failing to reduce their prices. On one occasion, he personally visited shop owners in Harare to demand they lower prices.

 

The parallels are getting frighteningly similar :ph34r:

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US house prices rise 21.2% in April - S&P/Case-Shiller

https://www.teletrader.com/us-house-prices-rise-21-2-in-april-s-p-case-shiller/news/details/58136001?internal=1

House prices in the United States increased 21.2% in April on a yearly basis, S&P CoreLogic Case-Shiller Indices stated in a release on Tuesday. 20-City Composite jumped 21.23% annually or 1.77% month-on-month.

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Transistor Man
7 minutes ago, Joncrete Cungle said:

https://en.m.wikipedia.org/wiki/Gideon_Gono

He sent in the police to arrest businessmen for failing to reduce their prices. On one occasion, he personally visited shop owners in Harare to demand they lower prices.

 

The parallels are getting frighteningly similar :ph34r:

 

Yep, it's a real book, written by the man himself. 

https://www.amazon.co.uk/Zimbabwes-Economy-Extraordinary-Measures-Challenges/dp/0797436790

 

61Dg+9nPs-L.jpg

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Yadda yadda yadda
2 minutes ago, sancho panza said:

Luke Gromen might be right even earlier than he expected with Fed pivot end Q3......can see markets rising as propsects of Fed pivot increase.

Weak dollar pahse here we come.

image.png.c261f70569e8b6c55d31de0e97134599.png

I see this as a really bad sign. It feels to me (gut feeling - no analysis) that the slump in demand is too swift.  The economy falling over at still very low interest rates reeks of hyperinflation and currency collapse incoming. I have understood the bullwhip concept of a product ordering cycle becoming misaligned with consumption and generating a surplus of goods. This will crush manufacturing orders for a time. Additionally excess stock will be cleared at low prices temporarily reducing inflation. However, I don't think that is the full story. It feels to me that consumption is well down. There is no bullwhip effect for food. Oil is maxxed out. Housing, especially in the US with lifetime fixed mortgages, is over the precipice and getting reacquainted with gravity.

As I see it interest rates, at least in the US, are not going much higher. They may go back down towards zero with inflation still 'elevated'. It looks like a dollar death spiral. The Euro must be in an even worse position. The Pound might be the least bad of the three as slow and steady rate rises might be maintained. Of course, it might get flushed.

Am I wrong?

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1 hour ago, Lightly Toasted said:

I have some of that which has been mentioned before LON:HFEL. 

I've been looking at India ITs as well but none I've found seems to pay a divi.  JPMorgan Indian Investment Trust plc LON:JII and Aberdeen New India Investment Trust PLC LON: ANII are two possibles. These are not recommendations DYOR.

India should do well with the cheapish Russian oil and managing to keep on side with both the BRICS and UK.

 
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1 hour ago, ThoughtCriminal said:

lol 

 

Well I'll be buying the shares for her so on my head be it.

 

Given the choice of funding asylum seekers and trannies or having an educated gamble, think I'll take the latter.

 

 

 

 

I like HL for my SIPP,the charges are very very cheap once your SIPP gets to a decent size.0.4% but £200 max fees so once it goes over £40k that falls fast.Plus a tiny bit will go to me in divis xD

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This is an IT I have held in the past and it does have a divi.  It's been on the rise for the past few days so perhaps a few others are also despairing of the west:

Templeton Emerging Markets Inv Trust plc TEM :LON      DYOR
 
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Democorruptcy
3 minutes ago, DurhamBorn said:

Not that one,the investment trust version,then no fees in your SIPP as its classes as a share not a fund.

 

I'd edit that we are all looking at your portfolio now

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1 hour ago, Yadda yadda yadda said:

...It feels to me (gut feeling - no analysis) that the slump in demand is too swift.  The economy falling over at still very low interest rates reeks of hyperinflation and currency collapse incoming....

Am I wrong?

I am actually finding the above playing out very comforting, as it is exactly what various macro people etc were predicting starting from around a couple of years back. The consensus on this thread was largely in accord.

AIUI at near zero rates monetary policy no longer functions like a dial that can be tweaked up and down, but instead an on/off switch, and the neutral rate is actually very close to zero. These factors combined mean that the rate rises the fed have already been doing are effectively infinite, and now the impact is coming through with a lag as always. The fed has always had incredibly blunt tools, a cudgel rather than a scalpel if you will, but now it seems closer to an atomic bomb!

I remain in the imminent pivot camp, and again would expect any pause etc to function like an infinite rate cut in the short term (again like an on/off switch) resulting in the melt-up. The second policy error will then be to slam the brakes on again, and we get the BK.

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2 hours ago, janch said:

I have some of that which has been mentioned before LON:HFEL. 

I've been looking at India ITs as well but none I've found seems to pay a divi.  JPMorgan Indian Investment Trust plc LON:JII and Aberdeen New India Investment Trust PLC LON: ANII are two possibles. These are not recommendations DYOR.

India should do well with the cheapish Russian oil and managing to keep on side with both the BRICS and UK.

 
 

Also no divi on this Indian Trust, but has very low charge. Also appears to hold different stocks, newish trust which I haven't heard of before tbh, but they have produced relatively better results so far on their holdings.                                                                                                            https://www.hl.co.uk/shares/shares-search-results/a/ashoka-india-equity-inv-trust-ord-gbp0.01

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26 minutes ago, HousePriceMania said:

 

 

On the contrary, he's probably laughing as he has plenty of money to pay the coupons according to the article but the US won't let him:

Russia’s finance minister Anton Siluanov has called the situation a “farce”, claiming it is not a true default but rather a piece of financial engineering by the White House. Russia has tried to pay creditors with roubles, but doing so violates the bond terms.
 

Russia’s coupon payments were rendered impossible by the United States. The Office for Foreign Asset Control – the branch of the US Treasury Department that deals with financial sanctions – had allowed Western investors to continue to receive debt payments as part of the initial volley of sanctions at the start of the war in Ukraine.

That exemption was allowed to lapse last month, meaning payment became effectively impossible.

 
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1 hour ago, Bricormortis said:

https://www.hl.co.uk/shares/shares-search-results/v/vinacapital-vietnam-opportunity-usd0.01

Vina capital vietnam opportunity. Any opinions ? Stable govt. ( unless China Invades ) Big population excellent demographics.

The charges on the above one always put me off tbh. I am taking another look at the following fund I put on my watch list some time back, lower charges and more diverse, focuses on the riskier (frontier) EMs, including Vietnam, Kuwait, etc. Performance not good but might be worth considering.                                                                      https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/t/t.-rowe-price-frontier-markets-equity-q-gbp-accumulation/charts                                              https://www.troweprice.com/financial-intermediary/dk/en/funds/sicav/frontier-markets-equity-fund.html

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Agent ZigZag
1 hour ago, DurhamBorn said:

Not that one,the investment trust version,then no fees in your SIPP as its classes as a share not a fund.

https://online.hl.co.uk/my-accounts/security_movements/sedol/B1GXH75

Still a bit confused as which holding you hold. The ticker on Hargreaves HFEL which I assume you are refering to shows a different top ten holding to the one you showed earlier. 

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ThoughtCriminal
2 hours ago, MrXxxx said:

Oh dear...so you appreciate if they 'ten bag' it would have been her brilliant idea, and if they 'sink to the bottom' its down to my idiot brother!

Yup, absolutely. 😂

 

I just can't stand the thought of all that money being wasted by the chancellor. I take it as a personal affront that those fuckwits take money from decent people and piss it up the wall.

 

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10 minutes ago, Agent ZigZag said:

Still a bit confused as which holding you hold. The ticker on Hargreaves HFEL which I assume you are refering to shows a different top ten holding to the one you showed earlier. 

 

Check the comments after that post 

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Agent ZigZag

Thanks Honkey I have seen that. It appears that Hargresves dont do the Fund Trust you refer to above. I will go back on the forum a read up what people have written

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31 minutes ago, Agent ZigZag said:

Still a bit confused as which holding you hold. The ticker on Hargreaves HFEL which I assume you are refering to shows a different top ten holding to the one you showed earlier. 

Its outdated on HL ,if you go to the Henderson Asian Income Fund Investment Trust official site you can see the top 10 holdings,they will update on HL at some point.The present top 10 is the one i put on the thread.They sold a lot of China last year,but have been buying back in.I love the makeup now,its exposure to Asia,but with a big inflation stock leaning.

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Agent ZigZag

Thought that was the case as HL really do need to up their game on data information. Even checked AJ Bell and they were the same. HENDERSON FAR EAST INCOME LTD (HFEL) ORDINARY NPV for the avoidance of doubt and that I was not going mad

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