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


spunko

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M S E Refugee
15 minutes ago, Axeman123 said:

Biden starts the push for a pivot:

For Fuck's sake!

I've just bought another 2 kg of Silver today and now inflation has gone to 0%.

7048.jpg?itok=2FZJ_6Pj

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Bobthebuilder
27 minutes ago, Axeman123 said:

Biden starts the push for a pivot:

To quote my favourite band.

"Senile idiots in their seats of power,
Ancient rotting corpses breathing horror by the hour.
They're lovers of death the fucking creeps,
Screwing our earth, as our earth weeps.
Iron ladies and steel men
Waiting for their fucking war to start again."

 

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Democorruptcy
2 hours ago, nirvana said:

ok I'm back to call myself a CUNT for making that prediction :P  Tempted to post a bum but I'll behave myself xD

tough gig bros.......is it time for a holiday?

methinks markets overreacted a bit to those CPI figs but TWT eh....

I was a bit mean to a couple of cunts upstairs so I've come to hide down here again.....

It's been 'risk on' since Uncle Jay said "rates are neutral", he knew he had tamed the inflation beast. It was like when Uncle Mario said he would "do whatever it takes" and tamed the sovereign debt beast.

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3 hours ago, Pip321 said:

We bought 4 nacho boxes from Waitrose last week £2.18. They are £3.95 at the Co-op and £3 at the large asda. 

Our main shop is now M&S and often end up with yellow sticker items….if it’s a decent reduction. But haven’t notice more of them yet. 

Interestingly the Orange Juice, big milks, yogurt (proper Greek), fruit and bread are all cheaper at M&S than the local stores ie Co-op, Sainsburys, one-stop. Also their own products (yet to try) like beans are hugely cheaper than heinz. Now from a snob value The public might not buy Asda own beans but they may replace heinz with M&S.

Pretty sure all retail is doomed but I am keeping one eye on M&S…it’s an interesting proposition. I guess it’s biggest challenge is getting a younger customer base. 

 my trades in mks

b.  5000 @ 100 jul 20

b. 2500 @ 130 dec 20

also in isa 

5000

b. oct 20 @ 90

s. dec 21 @ 235

profit  taken 6500 no tax

curr holding cost 8000

val today 10500  @  140


i reckon it owes me 1500 ..cant lose unless they go bust? ..  but am considering buying back in.

price in range 135ish 150ish since may. need to buy before summer over or wait for continued crash / shorting when traders back from summer?

i agree their food is good ..their bacon and eggs and value ranges all great ...  also service station outlets must help but what pct of their turnover is food?


 

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3 hours ago, DoINeedOne said:

I shop at Waitrose weekly not a full shop but there's 4-5 things i buy weekly from there that i like and with there app i get vouchers for around 50% off 2 of those items each week

One thing i have noticed over the last couple of months is shorter dates on things normally they are pretty good but also lots of yellow stickers they really seem to be struggling to shift stock 

just me that wants to know what the 5 things are? .... because i might like them.

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HousePriceMania

Heading for a massive recession.

Inflation destroying discretionary spending.

Apple nearly back at all time highs

image.png.9b86f81ccada764e323eb3b259105419.png

 

Can someone please explain this to me ?

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8 minutes ago, HousePriceMania said:

Can someone please explain this to me ?

@Democorruptcycalled it above......it is what the FED (and therefore Mr Market) say it is :P

1397581-13367186427056375-Seeking-Benny-Frank.jpg

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1 hour ago, Bobthebuilder said:

To quote my favourite band.

"Senile idiots in their seats of power,
Ancient rotting corpses breathing horror by the hour.
They're lovers of death the fucking creeps,
Screwing our earth, as our earth weeps.
Iron ladies and steel men
Waiting for their fucking war to start again."

 

I’ve just done a search on “senile idiots in their seats of power” to find the band (Crass - Have a Nice Day) and every video returned is of Joe Biden.

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5 hours ago, sancho panza said:

Our local Waitrose became a Lidl,which tells a layman like me the direction of travel isn't going to be kind to John Lewis.Also Mrs P and her friends are the type who'd have frequented M&S and JL stores in the past in terms of earnings/disposable income and I don't think any of them shop there.Another cold winter and things will be even worse for both those co.s.

We've discussed before but it's worth reiterating,the JL leadership team have very little retail experience.Diverse though.The only two males seem to carry the bulk of said experience.FInance lady has been there 14 years too.But otherwise the other 4,look very lightweight imho especially going into the recession that will likely take it down.

https://www.johnlewispartnership.co.uk/about/meet-the-board.html

I think Shaun Ricards nailed the essence of the western sanctions when he said

'the only people we seem to be sanctioning is ourselves.'

ReVisiting DFS furniture plc. Up today but trend isn’t great. So big ticket item.

I’ve not looked at John Lewis In a while. I think the brand has value but I could see in the future ends up as part of the Next plc website thing. 

45B632FF-EC9A-4522-911E-0C0D78A129B3.jpeg

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8 hours ago, Starsend said:

Sold the last of my SSE this morning. Too many unknowns for my liking going forward if millions of people can't pay their bills next year. Up about 35% inc. divis over two and a bit years so prob kept up with inflation at least.

Still holding National Grid. Not decided on what do with them yet. Anybody else holding?

Both have similar charts in that the weekly has been on an up against a falling monthly (momentum wise) so for me a question of whether the weekly will have enough strength to move the monthly for a longer term run.  I sold down both and am waiting for clarity as well as ex div dates.

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37 minutes ago, Ash4781b said:

ReVisiting DFS furniture plc. Up today but trend isn’t great. So big ticket item.

I’ve not looked at John Lewis In a while. I think the brand has value but I could see in the future ends up as part of the Next plc website thing. 

45B632FF-EC9A-4522-911E-0C0D78A129B3.jpeg

They’ll survive, after all they’ve currently got a sale one xD

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The collapse is baked in now surely. Fed under pressure to stop raising rates, winter coming, Chinese banks imploding. 

These things usually happen september/October, I don't really know why. 

I'm lost, I can feel there's something coming and can't work out when it's going to happen. 

The shares are down to a select few. Some will do well if there's a melt up/ recovery from here. Some will do well if they print a load more fake money. The rest is cash waiting on the sidelines. 

I'm half tempted to take out a mortgage incase they decide to write off everyone's debts. 

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HousePriceMania
1 hour ago, Ash4781b said:

ReVisiting DFS furniture plc. Up today but trend isn’t great. So big ticket item.

I’ve not looked at John Lewis In a while. I think the brand has value but I could see in the future ends up as part of the Next plc website thing. 

45B632FF-EC9A-4522-911E-0C0D78A129B3.jpeg

Im waiting for the sale to start.

25 minutes ago, Calcutta said:

The collapse is baked in now surely. Fed under pressure to stop raising rates, winter coming, Chinese banks imploding. 

These things usually happen september/October, I don't really know why. 

I'm lost, I can feel there's something coming and can't work out when it's going to happen. 

The shares are down to a select few. Some will do well if there's a melt up/ recovery from here. Some will do well if they print a load more fake money. The rest is cash waiting on the sidelines. 

I'm half tempted to take out a mortgage incase they decide to write off everyone's debts. 

I said that they'd stop raising rates at the slightest sniff of a drop in the rate of inflation.

 

Prices are still going up 8.5% FFS.

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28 minutes ago, Calcutta said:

The collapse is baked in now surely. Fed under pressure to stop raising rates, winter coming, Chinese banks imploding. 

These things usually happen september/October, I don't really know why. 

I'm lost, I can feel there's something coming and can't work out when it's going to happen. 

I personally think we have several months of stock market melt-up ahead (while the real economy melts down).

Just on the subject of the bolded part, here is a useful chart:

858589224.gif.4ecfd3e27eca75be78566ebe1f3282e0.gif

Peak in Sept, 2 months for the first leg down, 5 months to retrace ~50% and make the lower high, and then 2+ years of slow grind down. Not saying that will repeat eactly, but these things are a process rather than an event. Also worth noting that "black Tuesday" was a random big down day late in a much bigger down trend, and followed by a big up day.

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Yellow_Reduced_Sticker

Blackout Britainthreat as households face energy rationing!

"People will relearn lots of things about daily rhythms of life before they had central heat or cheap electricity," Nelson adds.

"It's a hard way to live and, as a society, Britain hasn't had to do this for a very long time. Tea will become one of the main sources of warm comfort because it doesn't take that much energy to boil a bit of water for tea...xD

"Of course it's too late for this decade, but key decisions can be made now for a bright, warm 2030s." 😂

 

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3 hours ago, BWW said:

 my trades in mks

b.  5000 @ 100 jul 20

b. 2500 @ 130 dec 20

also in isa 

5000

b. oct 20 @ 90

s. dec 21 @ 235

profit  taken 6500 no tax

curr holding cost 8000

val today 10500  @  140


i reckon it owes me 1500 ..cant lose unless they go bust? ..  but am considering buying back in.

price in range 135ish 150ish since may. need to buy before summer over or wait for continued crash / shorting when traders back from summer?

i agree their food is good ..their bacon and eggs and value ranges all great ...  also service station outlets must help but what pct of their turnover is food?


 

Thanks; interesting and understand your position….👍

I think for me (with no holding) it’s one of those shares (and there are many) I look at after any BK. Ie see which get hit the most and offer the best long term upside at that point. Money better at the moment following this thread. 

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HousePriceMania
11 minutes ago, Yellow_Reduced_Sticker said:

Blackout Britainthreat as households face energy rationing!

"People will relearn lots of things about daily rhythms of life before they had central heat or cheap electricity," Nelson adds.

"It's a hard way to live and, as a society, Britain hasn't had to do this for a very long time. Tea will become one of the main sources of warm comfort because it doesn't take that much energy to boil a bit of water for tea...xD

"Of course it's too late for this decade, but key decisions can be made now for a bright, warm 2030s." 😂

 

They've not realized, this is how the dosbodders roll.

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"i should get to Durham by 6pm,iv got the shoes on you asked me to wear.Yes i noticed Ashmore were up 15% from the lows.I told Dishi he had to stay south of the River Tees yes.I cant wait to go to The Durham Miners gala and sing Gresford with you on the Magdalene steps..Yes iv stopped the pensions of all the police who stabbed the miners in the back,Durham miner sinking his shaft this weekend eh,,haha cheeky.Get some coal on the fire,see you soon"

trussphone1.jpg

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sancho panza
8 hours ago, Lightscribe said:

Yup. Here’s where the miners should run (along with everything else). If DH is going to be in any ballpark of being right with his call it’s going to be from here.
 

Look at the FT comments, they all think inflation is over. Well done to the Fed a couple of rate rises to 2.50% have sorted 10% inflation right out. One more to go and everything will be fixed.

Except it won’t. Oh no, oil price was a lead, really just pricing in lower demand in a recession not down to fantastic Fed policy decision and high employment was just a lag to higher unemployment when the recession takes hold thanks to high costs and people with no money to spend. Stagflation.

Oh shit market tanks, BK, Fed pivot, QE to hyperinflation.

 

Agreed on DH,I  think we should see the Fed pivot in line with Luke Groemns end Q3( I suspect the jobs situation is much worse than the BLS numbers are stating(lot of people in part time jobs),thanks to @ThoughtCriminal psot we can see the uptick in default rates in teh US across multiple loan types-mortgage,credit card etc.

In terms of where we're putting our meony ,then I think Fed pivot begets weak dollar phase.Weak dollar phase begets more inflation and ultinately a BK in the credit markets.

We're jsut at the beginning of what could be a generational sell off dwarfing the coof and 2008.Last time around jsut the banks were screwed, now it's banks govts and individuals but even worse in an environement where aging populations and declining energy supplies give the polo's/CBers no way out.

Fisher wrote debt deflation cycle psot 1932(Ive jsut printed it in the property crash thread but worth looking again now .) I f we get a credit delfation and price inflation running alongsdie it,then it'll be the sort of stuff future generations will study.

Time will tell.

https://en.wikipedia.org/wiki/Irving_Fisher

According to Fisher, once the credit bubble bursts, this unleashes a series of effects that have serious negative impact on the real economy:

  1. Debt liquidation and distress selling.
  2. Contraction of the money supply as bank loans are paid off.
  3. A fall in the level of asset prices.
  4. A still greater fall in the net worth of businesses, precipitating bankruptcies.
  5. A fall in profits.
  6. A reduction in output, in trade and in employment.
  7. Pessimism and loss of confidence.
  8. Hoarding of money.
  9. A fall in nominal interest rates and a rise in deflation-adjusted interest rates.
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7 hours ago, sancho panza said:

 

The zero covid policy, militant lockdowns, resource stockpiling, export slowdown and shipping cancellations, manufacturing slowdown except warship building all make sense.

The Evergrande catalyst never went away, the Chinese government have just been desperately keeping a lid on it. They are trying to hold out for the US economy to crack first.

This would obviously stop any ‘melt up’, we’d be straight to the BK.

War is the ultimate preferred course of action to rebuild failed economies whilst providing the reasoning for doing so.

War with Taiwan could go ‘hot’.

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