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

[nirvana]

14 minutes ago, SpectrumFX said:

Perhaps Mr Hunter was on the ball, and this is the bit where we watch and learn?

that's why you read the tea leaves I mean charts bro, smart money knows what's going on behind the scenes......

I wouldn't be surprised if the dark forces keep things up untll the US mid-terms in November.......

dunno though, the aliens might intervene before then too 

[stoobs]

1 hour ago, Harley said:

True but the world has moved on so I would no more trust the Western ones.  I do look for red flags, and not only in HK, these include:

. Owned by a tycoon

If only that were as I originally parsed it.

"Owned by a racoon"

[Funn3r]

17 hours ago, Harley said:

Plus it's the selection panel that needs fixing or just doing away with.

Funny how when the elites want to use the Telegraph to make a point, the paywall seems to be out of action. 

[Loki]

32 minutes ago, nirvana said:

what exactly did he say??

Money printer may, or may not, go brrrrrrrr

[nirvana]

1 minute ago, Loki said:

Money printer may, or may not, go brrrrrrrr

aye, plus ca change.....just a question of when again eh?

 

[Harley]

1 hour ago, desertorchid said:

 

Conglomerates with a diverse set of lines of business- some of these companies have their toes in telecoms, utilities, infrastructure,  property, logistics, healthcare. This seems pretty useful when combined with strong cash flow and high net assets. If taken on face value some of the P/B ratios are insanely good compared with UK stocks.(an example might be Hutchison with 0.69 P/B value, lower than anything I can find on the FTSE)

 

 

IMO, they're a hangover from 1980s Japan and make visibility hard and increase the potential for naughty accounting.  I like to roll (combine) my own pure plays.  PtBs are indeed more "normal" in these markets, one of the reasons I like them.  My screen includes a PtB below 10 or , as well as others like DTE, plus manual checks where it's not possible to screen.  Do that globally and yes, you end up in AsiaPac and few rare others, after checking for technical buy points!

[Harley]

1 hour ago, CannonFodder said:

Got any links - sounds interesting?

On the news, Hansard(!), UK Column, here, trade journals, the pub, everywhere.  There are currently three bills going through, one of which is the Online Safety one.  Then all the Covid stuff.  Purely financially, we've had all the proceeds of crime, etc (old but being applied), KYC, bank bail ins, technical changes like Open Banking and the ability to handle negative rates, etc.  Plus informal low key stuff like sounding out wealth managers on a wealth tax.  The links are everywhere if you're connected.  Plus the more freedom and social stuff bleeds into the financial world as we're talking repression here.  But Napier is the man ex my Loony Tunes!

[JMD]

6 hours ago, Alifelessbinary said:

That’s not correct. While the big investors prefer large homogeneous blocks, as they can run them as single investments with predictable maintenance costs. That doesn’t however mean that all commercial investors have the same criteria. Quite often packages of repossessed homes can create much higher returns (offset against increased risks).

Many of the family owned developers own contracting firms that can refurbish and flip homes in an efficient manner. If the market is poor, as it was in 2009, they a large percentage out and then slowly sold them into the market as it improved.

 

Its an interesting topic.

I believe Mears Group might be an example? They do diverse smaller construction, maintenance and refurbishment projects, build private homes and manage social housing/specialist community and supported accomodation.

I haven't looked at Mears company financials recently, but they seem the type of company that the big insurers - if they ever started buying up the housing sector - would partner with?

Though could be better examples out there other than Mears Group?

[Lightscribe]

@kibuc

Hope you’re feeling better with the investments now fella. Some of the miners are flying from their lows. ABRA and AXU are on the way up and recovering nicely.

[MightyTharg]

1 hour ago, janch said:

But you've entirely forgotten to include the capital in the equation.  If the house price falls in value then when she comes to sell her net position could well be negative.

There;s not much point in having a massive mortgsge wih rapidly rising inflation eating away at your debts if house prices are falling like a stone.

It worked in the 70s as it was a time when house prices were rising.......now as we have a mighty bubble it's likely they'll tumble (unless the government props them up...............again)

I think she didn’t have much capital in the first place, so in the unlikely scenario that high inflation means prices are falling, the house prices would have to fall by around 70% in real terms for her to not be in profit (which would be nice I suppose but not very likely).

If she has cash-flow problems she can just sell one of the properties to someone else who wants to take advantage of the lowest real interest rates in history.

Anyway, I think I’ve established that for whatever reason people just can’t see what a boon negative real interest rates are to borrowers. Interesting.

[Alifelessbinary]

5 minutes ago, JMD said:

Its an interesting topic.

I believe Mears Group might be an example? They do diverse smaller construction, maintenance and refurbishment projects, build private homes and manage social housing/specialist community and supported accomodation.

I haven't looked at Mears company financials recently, but they seem the type of company that the big insurers - if they ever started buying up the housing sector - would partner with?

Though could be better examples out there other than Mears Group?

Quite a few of the bigger firms aren’t listed, as otherwise they could be a good prospect over the next few years. Telford Homes were moving into this area and were also quite diversified as they did both public and private schemes. Sadly they were taken private around 2019, just as some of their better projects were reaching fruition (as always!).

Im not really in the market for property shares at the moment, as I’m already heavily exposed as I work in the area. If I hear of any interesting listed companies I’ll share.

In terms of standard PRS scheme Grainger Plc seem to be doing the most deals at the moment. They have a hit list of cities and have been heavily buying. 

[ThoughtCriminal]

Erdogan says Turkish banks will adopt the Russian payment system.

 

Bit by bit by bit............... 

[BurntBread]

11 minutes ago, MightyTharg said:

Anyway, I think I’ve established that for whatever reason people just can’t see what a boon negative real interest rates are to borrowers. Interesting.

Tharg, I think there are four rates to think about:

• The general inflation rate (whatever that means)
• The short-term interest rate that is fixed by CBs
• The inflation rate of the asset you have borrowed against
• The interest rate you pay on your loan

In my understanding, "negative real rates" mean that the difference between the first two is negative. On the other hand, you benefit if the difference between the second two is negative (and you don't go bust from lack of cash flow).

The issue is that in the current environment, the first couple of rates are not necessarily linked to the second couple (plus it's easy to go bankrupt in this kind of environment).

[DurhamBorn]

I decided to offload a third of my HL today,just under 20% profit in a few weeks on a big holding,keeping the rest and bought the asset manager Ninety One plc with the proceeds.I like their growing profile in EMs.

[geordie_lurch]

8 minutes ago, DurhamBorn said:

I decided to offload a third of my HL today,just under 20% profit in a few weeks on a big holding,keeping the rest and bought the asset manager Ninety One plc with the proceeds.I like their growing profile in EMs.

Nice I'm still 10% down on HL

[JMD]

3 hours ago, desertorchid said:

 

Conglomerates with a diverse set of lines of business- some of these companies have their toes in telecoms, utilities, infrastructure,  property, logistics, healthcare. This seems pretty useful when combined with strong cash flow and high net assets. If taken on face value some of the P/B ratios are insanely good compared with UK stocks.(an example might be Hutchison with 0.69 P/B value, lower than anything I can find on the FTSE)

 

 

Lynn Alden likes Japan conglomerites - Mitsui and Mitsubishi. Both have lots of debt though and currently too expensive I think?

[AlfredTheLittle]

7 hours ago, M S E Refugee said:

Because if she implemented what needs to be done she would be out on her ear by the next election.

The electorate can't handle reality.

I think the electorate are voting for reality every chance they get (Brexit, Boris, even almost Corbyn in preference to May). Unfortunately nobody in your establishment has recognised this, they're all running scared of the media and Twitter.

[DurhamBorn]

20 minutes ago, AlfredTheLittle said:

I think the electorate are voting for reality every chance they get (Brexit, Boris, even almost Corbyn in preference to May). Unfortunately nobody in your establishment has recognised this, they're all running scared of the media and Twitter.

I told this to our MP.The reason the red wall voted Tory wasnt for more bennies etc it was because they are sick of bennies.I often wonder who is advising this goverment.Boris should of been a great PM,instead he was one of the worst apart from Brexit of course.Twitter is just a few lefties and the media should be faced down.Iv done my bit by not paying the BBC anymore.If any of their goons come here il sling them out onto the road.

[Lightscribe]

4 hours ago, Starsend said:

Hopefully they'll be some good riots this Winter, I've always wanted to trash a Lidl but I'd never have the balls to start chucking avocados around by myself.

 

What did Lidl ever do to you?
Why not kick off in a Waitrose instead and use one of those overpriced multi-seeded ancient grain artisan loaves as a baton to hit the middle class wannabe BTL landlords with?

[Democorruptcy]

3 hours ago, nirvana said:

what exactly did he say??

https://www.bloomberg.com/news/articles/2022-07-29/summers-says-powell-s-call-on-neutral-fed-rate-indefensible

[sancho panza]

1 hour ago, Lightscribe said:

@kibuc

Hope you’re feeling better with the investments now fella. Some of the miners are flying from their lows. ABRA and AXU are on the way up and recovering nicely.

Just had a quick look and sea of green .The really big move I'm noting is that some of the tier twos are catching bids eg Anglogold.Bottomed at $14 on the monthlies $13.50 dailies.$16.25 puts some of our calls in the money after a few months of red.Been apinful

Still some good value there imho-NCM/KGC/EGO/BVN/GOLD/NEM plus a few more

Decl:long

1 hour ago, ThoughtCriminal said:

Erdogan says Turkish banks will adopt the Russian payment system.

 

Bit by bit by bit............... 

Biden still thinks he's bossing Putin.From what I've read our own future leader is still intending to boss Putin as well.Which you can't fault the logic of because it worked out so well for the germans last time.

4 hours ago, Harley said:

But I saw a chart only last week or the week before saying the opposite!  So much noise out there.

Yeah there is and the stat quoted is more a function of reduced buys than excess sales.

[DurhamBorn]

44 minutes ago, Lightscribe said:

What did Lidl ever do to you?
Why not kick off in a Waitrose instead and use one of those overpriced multi-seeded ancient grain artisan loaves as a baton to hit the middle class wannabe BTL landlords with?

I got some from Lidl today for 20p,getting a lot of reductions in there during the week now.The more expensive stuff seems not to shift so getting reduced.Then i had a chat with Scarlett Moffatt in Wetherspoons  

[Lightscribe]

2 minutes ago, DurhamBorn said:

I got some from Lidl today for 20p,getting a lot of reductions in there during the week now.The more expensive stuff seems not to shift so getting reduced.Then i had a chat with Scarlett Moffatt in Wetherspoons  

She’s defo got morefatt of recent years, probably still would.  Did you offer to put some reflation into her portfolio? 

[Bobthebuilder]

1 minute ago, Lightscribe said:

She’s defo got morefatt of recent years, probably still would.  Did you offer to put some reflation into her portfolio? 

I used to bump into Sandra Martin from Gogglebox quite often.

Never tried to chat her up mind.

[BurntBread]

On 07/08/2022 at 18:17, jamtomorrow said:

Bought a stack of these 100 x 1g Valcambi CombiBars last year - really convenient to store until you need them, and then you just snap off the 1g chunks in whatever denomination you want

Those look very handy (if a bit expensive and difficult for the average Joe to identify). If the Royal Mint had a soul and an interest in the people (I'm dreaming, I know), they would re-issue something like Offa's silver penny, complete with the cross design so you could cut them into ha'pennies and farthings. I'm sure @King Penda would approve. That was 1.3g of silver, I think.

It's difficult to measure inflation over long periods, because some things that are common now were rare then. In the middle ages you could buy marmalade at the great fairs, but it cost the same as saffron, by weight. The big thing though is that we have been through a transition (due to nearly free energy, as CP keeps reminding us) to a world where people are relatively expensive and things are cheap. Back in the day, a pound of nails (for example) would cost you the equivalent of a day of skilled labour, and that would be a penny.

Hence each of those Britannias would buy you the best part of a month's labour from some poor sod would have to eat nothing but pease pudding and a few eggs. It was only a handful of lifetimes (and a fossil fuel revolution) ago.