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

[nirvana]

dunno who he is or if he's an 'advanced tea leaf reader' lol BUT

Robert Kiyosaki: ‘The biggest crash in world history’ hits this October

 

[Hancock]

33 minutes ago, nirvana said:

dunno who he is or if he's an 'advanced tea leaf reader' lol BUT

Robert Kiyosaki: ‘The biggest crash in world history’ hits this October

 

She's a delightful looking creature, put people naming the date are talking crap.

Just Googled her, she is 46!

[nirvana]

2 minutes ago, Hancock said:

She's a delightful looking creature, put people naming the date are talking crap.

aye I was gonna delete it tbh.....going against my own mantra of listening to all these a$$oles on youtube..

you need some punk NFTs to date hot birds like that nowadays, Lambos just don't cut it anymore lol

[ThoughtCriminal]

6 minutes ago, Hancock said:

She's a delightful looking creature, put people naming the date are talking crap.

My word she's magnificent. Can only imagine the size of the divorce settlement in her future. 

[Hancock]

.

[Eventually Right]

 

Hunter seems to think prices have almost peaked!

Expand  

Yeah I don't like being on the wrong side of him. But he's on record saying it's because he thinks production will respond. No shame in that if it's not your specialty, 99% of finance people think production will respond. But it won't.

 

Not sure if the above quote from @Cattle Prod will paste properly from the previous thread, but anyway...

It made me wonder how much of David Hunter's often predicted melt-up in the PM miners (GDX to $60, GDXJ to $100 etc) is dependant on declining energy prices?  If we got the $2500 gold, $45-50 silver he talks about in the next year or so, but energy prices also dramatically increase, then presumably the AISCs of the miners also increase a lot, the market takes that into account and so the miners barely go up in price.

Or, worse, gold just bounces around the $1700-1900 levels, silver $22-28, but energy prices/mining costs keep rising, and the miners tank...

I'm looking at 2024 LEAP options at the moment, and it's making me consider $SLV ones over miners/miner etfs.

Does that make sense?  or have i missed something obvious?

[Majorpain]

57 minutes ago, Cattle Prod said:

I have to disagree there, your flow chart correctly shows domestic production meeting less than half of demand, no matter how you slice it the UK is massively dependent on imports. With no stored reserves. It's beyond idiotic, and strategically dangerous imo.

Also, domestic production has declined since 2020, and will continue to do so.

I agree its far from great, but its also far better than I expected.  If you drop production to 400twh, Gas power consumption at 250, then you've still got 50% of normal home use and 27% of "everything else".  I think that can be managed with reduced home demand and imports.

Don't forget that in an emergency situation, and i think its going to be one, if you have domestic supply then you can force the producers to supply at a set price.  If you are completely reliant on imports then that is obviously not going to happen!

[HousePriceMania]

1 hour ago, reformed nice guy said:

What can the rest of the Eurozone do if Germany stops playing along?

Collapse.

[Loki]

I wonder if he could be right overall but not about the parabolic part...just wild swings until his targets hit and it all happens.  

[Funn3r]

14 hours ago, Hancock said:

If i was retired i'd be looking at a few months in the Canary Islands to enjoy life and watch Britain implode this winter.

Take your asbestos surfboard though...

[Don Coglione]

1 hour ago, Hancock said:

Germany wont stop playing along its fantastic for them to have a weak currency, best thing to have happened to them.

Germans have been pretending they're against printy printy and ZIRP since it began.

Absolutely, the Euro has been a Godsend to Germany, at the cost of the economic health of nearly all the other Euro participants. That is why they blinked when Greece told them to fuck off in 2012/13, the Euro imploding would destroy Germany's export-driven economy overnight. 

How many German cars did you see on the roads in the time of the Mark? And now...?

[DurhamBorn]

49 minutes ago, Eventually Right said:

 

Hunter seems to think prices have almost peaked!

Expand  

Yeah I don't like being on the wrong side of him. But he's on record saying it's because he thinks production will respond. No shame in that if it's not your specialty, 99% of finance people think production will respond. But it won't.

 

Not sure if the above quote from @Cattle Prod will paste properly from the previous thread, but anyway...

It made me wonder how much of David Hunter's often predicted melt-up in the PM miners (GDX to $60, GDXJ to $100 etc) is dependant on declining energy prices?  If we got the $2500 gold, $45-50 silver he talks about in the next year or so, but energy prices also dramatically increase, then presumably the AISCs of the miners also increase a lot, the market takes that into account and so the miners barely go up in price.

Or, worse, gold just bounces around the $1700-1900 levels, silver $22-28, but energy prices/mining costs keep rising, and the miners tank...

I'm looking at 2024 LEAP options at the moment, and it's making me consider $SLV ones over miners/miner etfs.

Does that make sense?  or have i missed something obvious?

Makes perfect sense.David is a liquidity guy,and id say probably one of the best in the world at understanding Fed leads and lags.I mean that,one of the best in the world.He is using that knowledge to try to work out where the liquidity will go to ,where is will come from (when Fed tightens) and bases calls on that.However he is a macro guy.If he was still at Fidelity on the macro team there (he was actually a junior there,then a portfolio manager in pensions) he wouldnt make big asset allocation calls,he would pass his work to others,who would then add to other work etc.It would then go to the stock picking team and they would decide allocation.My friend used to pull it all together,he was the chief strategist,and then drop it on someones desk.The really interesting bit though is he told me people stopped using the macro roadmap stuff.Sometimes they didnt even read them,and now they dont even have them.They are actually economists dressed up as macro strategists,or as they call them,macro tourists,they can tell you the pyramid is big,where it is,its colour etc,but have no idea how it was built etc.

David will base his oil call on when he sees the economy rolling over with a lead,but wont understand if there are things going on on the ground that werent in other cycles.In affect his work would go to someone,as would say @Cattle Prod and then that person would have to decide how to allocate.

[jamtomorrow]

1 hour ago, Cattle Prod said:

It does, to the West! Ukraine is a misbehaving province of Russia to them, you're looking at it with European eyes. It's delivering on all contracts to the UK and Europe, just not adding the non contractual extras.

Historically, yes. But to assess how future performance in that respect is likely to reflect past performance, it's important to consider why.

The answer is not that the Russians are "good sorts", or that there's some unwritten chivalric special treatment for the West at work. To mangle Kissinger: Russia has no permanent friends or enemies, only intetests.

And it has been in Russia's interest to be a dependable energy partner to the West for as long as Russia has needed the West's foreign exchange i.e. a long time. That benign period is now coming to an end, and there's some geopolitical chess afoot.

So it's all very well saying we shoulda gone and got a fix from Gazprom while we could, but it'll have the calorific value of the paper it's written on if DXY tanks and the "interests" change quite suddenly. There's now quite a few UK retail customers finding out the hard way about the true value of a fixed-price energy contract - if the supplier can't or won't deliver, you're screwed.

I can't say whether policymakers are wise to this (and were wise to this months ago), but in some ways paying spot for gas from Russia better reflects the realpolitik, even if the short term pain is awful. The alternative of increasing dependence just as Russia's need for Western currency dwindles is a recipe for energy security disaster as great as the decarbonization debacle.

[HousePriceMania]

How high can the Scottish share go ?

 

 

[DurhamBorn]

39 minutes ago, HousePriceMania said:

How high can the Scottish share go ?

 

 

Its like a Pheonix rising again.Though my dad isnt convinced,he says its like that ex who you always give one last chance to then regret it in the trousers,head and pocket  .To be fair to the company ,although they made some bad choices the government and regulator have been a disaster.Its a classic dis-inflation example where slowly pushing down on price meant less and less investment and in the end you have to pay back all of it and more.

I still think a big oily should buy them out and get access to nuclear that way.They might be waiting until they sell Spirit Energy.

 

[stoobs]

Just a basic currency failure question for a Friday afternoon.

Say you bought an asset for £1000.

Then the pound stops working and is replaced by a new currency, the Johnson Independent Zloty.

Now you sell your asset for 10 JIZ.

How would they work out the Capital Gains on that? Would they convert £1000 into JIZ at a published fixed rate at the point the JIZ was created, and then compute from there?

[TNS]

55 minutes ago, HousePriceMania said:

How high can the Scottish share go ?

 

 

High enough to dump it I hope 🤣 I'll take evens.

[HousePriceMania]

10 minutes ago, stoobs said:

Just a basic currency failure question for a Friday afternoon.

Say you bought an asset for £1000.

Then the pound stops working and is replaced by a new currency, the Johnson Independent Zloty.

Now you sell your asset for 10 JIZ.

How would they work out the Capital Gains on that? Would they convert £1000 into JIZ at a published fixed rate at the point the JIZ was created, and then compute from there?

Depends who's in charge after the revolution

Up The Republic

[HousePriceMania]

11 minutes ago, DurhamBorn said:

Its like a Pheonix rising again.Though my dad isnt convinced,he says its like that ex who you always give one last chance to then regret it in the trousers,head and pocket  .To be fair to the company ,although they made some bad choices the government and regulator have been a disaster.Its a classic dis-inflation example where slowly pushing down on price meant less and less investment and in the end you have to pay back all of it and more.

I still think a big oily should buy them out and get access to nuclear that way.They might be waiting until they sell Spirit Energy.

 

Google says...

 

[wherebee]

1 hour ago, HousePriceMania said:

How high can the Scottish share go ?

 

 

I'm up 270 quid.

I'll just keep posting this stuff because..... it's damn funny.

[ThoughtCriminal]

Was someone on here singing the praises of CNOOC recently? 

 

Im seeing lots of people recommending it on twitter. Zero debt, good dividend, undervalued etc. 

[sancho panza]

1 hour ago, ThoughtCriminal said:

Was someone on here singing the praises of CNOOC recently? 

 

Im seeing lots of people recommending it on twitter. Zero debt, good dividend, undervalued etc. 

I suggested it on about page 500 of the first thread and was rapidly brought to my senses by @Cattle Prod who said you couldn't trust the Chinese accounts/asset values/stated reserves etc and jsut to stick to the big US/EU oilies.

Evergrande suggests he was probably right to be so circumspect.

 

[Castlevania]

1 hour ago, stoobs said:

Just a basic currency failure question for a Friday afternoon.

Say you bought an asset for £1000.

Then the pound stops working and is replaced by a new currency, the Johnson Independent Zloty.

Now you sell your asset for 10 JIZ.

How would they work out the Capital Gains on that? Would they convert £1000 into JIZ at a published fixed rate at the point the JIZ was created, and then compute from there?

There would be an agreed FX conversion rate. For example if you were Dutch and had bought some shares in a company for x Dutch Gilders pre Euro there’d be an agreed conversion rate to Euro to use.

[Presuming Ed]

19 hours ago, sancho panza said:

Goldies had a run today,but have been battered of late.Given how deep in the red real rates are that surprised me but the hopium is strong in New York and quarter point there offsets 1%of CPI......go figure.

Would be interested to know if the hive mind has a viable explanation for their underperformance?

Some random (and possibly bullshit) theories:

Yields ticking up - I think gold loves zero/negative rates (see spring/summer 2020). People/institutions are happy to hold gold in a zero/negative rate environment as the carrying cost has disappeared. This perhaps changes once there are positive yields on offer elsewhere.

Gold should act as an inflation hedge but the inflation that we're seeing at the moment is primarily related to supply-side bottlenecks - there's no shortage of gold or business need for it. 

[JMD]

On 29/09/2021 at 19:30, BurntBread said:

If I didn't have a fair chunk already, I would probably be buying a slice at these levels. I think one of the great insights from this thread is "laddering", to try to take some of the emotion out. Especially with a BK possibly coming, but possibly not, it seems a good way of spreading risk: if the price just keeps on going up, then at least you have a first allocation bought, and you're not completely left struggling to time an entry, and can look a bit more dispassionately at other opportunities (maybe that should be called something like "trying to catch a thrown spear"?). Conversely, if there is a BK, you haven't poured all your resources in at a high price, and you've got the comfort of following a plan: "plan the trade; trade the plan". If he will forgive me for saying it, I think @Hancock is wrestling with the psychology of it (although I think he has a more impressive amount of wealth to conjure with than I do).

Obviously I'm just a beginner, but I've found it much easier -- in fact almost reassuring -- looking at red numbers when I know I still have some money I want to put into that stock. I bought a bit more Rio recently, which might not have been a good idea, but I was happy with the price first time round, and I'm even more happy now.

I haven't tried to use Graham's formula to value stocks yet, and I don't have DB's skills nor confidence in his models, but I do have a reasonably good memory. I will therefore take DB's name in vain and quietly quote something he said that might be out of date, but might help with difficult decisions ... namely that he would happily buy BP below £3.50.

You mention Grahams formula for valuing stocks. I found this screener that does just that. Interesting thing is that on its first page it lists some of the stocks we talk about here.                                                            https://www.wallstreetzen.com/stock-screener/ben-graham-stock-screener?t=4&p=1&f