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

[ThoughtCriminal]

We know what usually happens next.

[Red Debt Redemption]

14 hours 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?

Trash it? Grabbing as much as possible for the freezer 

[CannonFodder]

1 hour ago, ThoughtCriminal said:

We know what usually happens next.

But which is first - fed pivot or recession

[DurhamBorn]

6 hours ago, JMD said:

DB, I like the idea of buying asset managers especially ones having exposure to em debt, but do you think it's also worth considering buying funds that directly hold EM sovereign bonds? Only I was today reading about the Templeton EM bond fund recommended by Gavekal (they are long EM debt markets). Unfortunately this particular fund is not available in UK but looks good example type to buy because appears to only hold sovereign bond debt and no corporate bonds (portfolio section allows download of all holdings) although I do note the fund remit unfortunately allows it to buy corporate bonds. 

L&G and M&G do similar funds that can be bought here. But wondered what your general thoughts were, eg. do the asset managers perhaps offer a potentially lower risk/higher(leveraged) reward?

        https://www.franklintempleton.com/investments/options/closed-end-funds/products/555/SINGLCLASS/templeton-emerging-markets-income-fund/TEI#distributions         

Yes i do think the bond funds are worthy,but i tend to like to leverage things when i have high conviction.I just think someone like Ashmore can leverage the returns if those EM bonds go higher.If i was trying to balance my portfolio more then id likely add a couple of bond funds.

Im still formulating how to play the rest of the cycle.Very happy with the first bit,we got that right,bit more tricky now.

[ThoughtCriminal]

The once unthinkable is now the everyday and mundane.

 

I'm a stuck record, I know, but what a self made fucking disaster we're heading for.

[DurhamBorn]

2 hours ago, ThoughtCriminal said:

We know what usually happens next.

Asian bonds usually rally first,then EM equities in tandom with EM currencies.Watch Turkey their 10 year is down from 26% to 16% in four months.

[afly]

Now predicting £4,266 in Jan. £650 more than was predicted last week

https://www.bbc.co.uk/news/business-62475171

 

[DurhamBorn]

Just now, afly said:

Now predicting £4,266 in Jan. £650 more than was predicted last week

https://www.bbc.co.uk/news/business-62475171

 

Im fixed still,but calor gas bottles are £42 to refill and on one bar you would get 8 hours a day for 2.5 weeks so around £65 a month for gas.Iv got enough for next winter already,and if i needed them this year,if the gas went off for instance.

You can still pick empty ones up and Facebook marketplace for £10-£20.Even 4 full would be good backup.You can pick the fires up as well for around £50 on there,sometimes with a bottle.Id get sorted though now if anyone hasnt,they will all be like rocking horse shit by winter.

[M S E Refugee]

4 minutes ago, afly said:

Now predicting £4,266 in Jan. £650 more than was predicted last week

https://www.bbc.co.uk/news/business-62475171

 

I wonder if the dinghy people will head back South for the Winter.

[Pip321]

10 hours ago, DurhamBorn said:

This is a decent watch/listen.I think its incredible that so many on here saw the end of globalisation from different positions.Myself macro,but others spotted it for other reasons.More and more are starting to understand the roadmap we are now on.We cant know all the winners and losers,but staying de-complex seems the right policy.This still isnt a lock though,we will likely still have lots of global markets,but nothing like what we have now.The phone calls for jobs have started again,i told two in the last week phone back when the salary is 50% higher minimum.

 

Thanks for this. I thought this was fascinating.

Demographics positioned in a way I haven't heard before, so whilst we have a world population problem it is the wrong age of population and a decreasing supply of a new generation...we need more kids, that's something you don't hear every day. 

Options for the UK are there, but not great, France may do ok (after global hardship for all) and Germany fucked of course unless they change colours or stop being a manufacturing giant....neither the best options for the EU. Oh, and China demographics a nightmare with a huge shrinking population to come. 

There's a lot of food for thought and what I like is that there is a lot of factual detail and he expresses himself in a way that isn't bound by mainstream media language.

The predictions are trickier everyone knows that.  Really good listen. 

It gives me something to go away and validate elsewhere. 

[JMD]

10 hours ago, XswampyX said:

years of funny money, paying funny companies, to produce nothing. It would be funny if it wasn't so serious

Why make anything when you can print the 'money' and buy it from some where else?We ignored the fundamental problems and kept taking the pain killers.... and then dropped dead.

 

Ah i think I understand - So is Putin the West's 'addiction specialist'?!

[Sasquatch]

On 18/05/2022 at 09:19, Sasquatch said:

Currently assessing a tender for a construction project for a client. General rates (and therefore the overall cost) are about 10% up on tenders from around 6 months ago. I always carefully check back like for like items such as concrete per m3, steel per tonne etc etc. For this particular tender we had 5 prices in from builders and a spread from bottom to top of 53% .

I've got stacks of cost data and would need to do some more number crunching but I'm reasonably confident that in our small part of the construction world, we have seen at least a 20% increase in the last 2 years. 

Builders are still very busy and worried about future price increases so that might be slightly distorting current figures. Even , it's eye watering stuff.

 

Quoting myself from back in mid May.

Here we are in mid August (3 months on) and construction tender costs are up another 12%!! 

There has to be a major reaction to this in due course. Hopefully in our little world we'll be ok but this must be putting skids under a lot of projects, especially those with marginal profitability.

 

[Plan-b]

14 minutes ago, M S E Refugee said:

I wonder if the dinghy people will head back South for the Winter.

They won't care tucked up in Free 4 star hotels with room service and housekeeping

[Metalheadz]

THE GRANT WILLIAMS PODCAST: PETER ZEIHAN (August 8, 2022)

The latest episode of The Grant Williams Podcast sees the welcome return of geopolitical strategist and author, Peter Zeihan – a man who has, in his previous two appearances, shaken many long-held assumptions about the balance of geopolitical power around the world.

This time Peter trains his gaze on Europe, picking apart the strengths and weaknesses of the EU as it tries to navigate its way through the most serious energy crisis in living memory as well as inflation that is headed for double digits.

Peter’s conclusions will likely surprise many as he singles out one particular country where the problems may lead to a catastrophic outcome for the country in question and the wider European Union.

Oh, of course, there’s still time to talk about China, the US and a post-Brexit Britain which is in the middle of a political crisis all of its own.

https://drive.google.com/file/d/1aeowOrczfRWkejps0tNvQH6cKX5MrJnh/view?usp=sharing

[DurhamBorn]

9 minutes ago, Pip321 said:

Thanks for this. I thought this was fascinating.

Demographics positioned in a way I haven't heard before, so whilst we have a world population problem it is the wrong age of population and a decreasing supply of a new generation...we need more kids, that's something you don't hear every day. 

Options for the UK are there, but not great, France may do ok (after global hardship for all) and Germany fucked of course unless they change colours or stop being a manufacturing giant....neither the best options for the EU. Oh, and China demographics a nightmare with a huge shrinking population to come. 

There's a lot of food for thought and what I like is that there is a lot of factual detail and he expresses himself in a way that isn't bound by mainstream media language.

The predictions are trickier everyone knows that.  Really good listen. 

It gives me something to go away and validate elsewhere. 

What i found interesting was how South America might be very well positioned and Turkey.Iv been investing in Turkey already and own the Blackrock Latin America.I think i do need more broad exposure though.I agree with him on the UK that we could do nicely if we sort ourselves out,but huge risks until we do.Africa having a good chance of doing much better is interesting as well.

[M S E Refugee]

6 minutes ago, Metalheadz said:

THE GRANT WILLIAMS PODCAST: PETER ZEIHAN (August 8, 2022)

The latest episode of The Grant Williams Podcast sees the welcome return of geopolitical strategist and author, Peter Zeihan – a man who has, in his previous two appearances, shaken many long-held assumptions about the balance of geopolitical power around the world.

This time Peter trains his gaze on Europe, picking apart the strengths and weaknesses of the EU as it tries to navigate its way through the most serious energy crisis in living memory as well as inflation that is headed for double digits.

Peter’s conclusions will likely surprise many as he singles out one particular country where the problems may lead to a catastrophic outcome for the country in question and the wider European Union.

Oh, of course, there’s still time to talk about China, the US and a post-Brexit Britain which is in the middle of a political crisis all of its own.

https://drive.google.com/file/d/1aeowOrczfRWkejps0tNvQH6cKX5MrJnh/view?usp=sharing

I watched a little bit of Zeihan on Trigonometry and he seemed keen to put the blame on Brexit even though the EU isn't faring any better.

He is a bit full of himself.

[geordie_lurch]

Stonks are back apparently - this is what the internet is best at

 

[Axeman123]

3 minutes ago, geordie_lurch said:

Stonks are back apparently

melt-up?

[geordie_lurch]

1 minute ago, Axeman123 said:

melt-up?

Only in meme stocks but hopefully margin calls for Wall St and then maybe that triggers the BK? This Zerohedge post will get you up to speed: https://www.zerohedge.com/markets/amc-gamestop-bed-bath-soar-meme-stock-frenzy-returns-leaving-hedge-funds-confused-baffled

From the first paragraph...

"For those who made a killing last week after buying and then (hopefully) selling such names as Hong-Kong's recently IPOed, zero revenue AMTD Digital (ticker HKD), which exploded 32,000% to surpass $400BN market cap before plummeting, we have some good news: the most-shorted, meme stock mania is back, as is FOMO."

[stoobs]

50 minutes ago, afly said:

Now predicting £4,266 in Jan. £650 more than was predicted last week

https://www.bbc.co.uk/news/business-62475171

 

Does the price cap now serve any useful purpose?

It was meant to be a long-term upper limit to stop utility companies fleecing people who find it difficult to monitor their contracts.

Now it is just the average market price updated at ever-increasing frequency.

Once they are updating it hourly do you think they might give up on their folly?

[HousePriceMania]

Sunak's decided by the looks of it that he prefers hyper inflation to raising interest rates....

 

 

[JMD]

3 hours ago, M S E Refugee said:

https://www.ishares.com/uk/professional/en/products/251824/ishares-jp-morgan-emerging-markets-bond-ucits-etf

https://www.ishares.com/uk/individual/en/products/296441/ishares-j-p-morgan-em-bond-ucits-etf-gbp-hedged-fund

Are these fund worth a punt?

It looks like it pays out monthly.

Firstly I should say i'm definitely no expert and am currently still learning/trying to develop a strategy for bonds (hence my above earlier post question to DB).

But for what it's worth I'm personally looking at bond funds that pivot toward Malaysia and Brazil, etc. @Viceroyposted an excellent Lynn Alden article yesterday where Lynn explained the foreign debt vs fx reserves a country has, and Malaysia etc came out well. I was aware that some commentators think that if/when em bond debt is re-rated relative to Western debt, the debt risk profile for countries with good fx ratio will be seen as a big positive.

That's kinda my starting point when selecting bond funds. However, I could be wrong in my thinking and would welcome correction from those far wiser experienced minds on here...?

I don't like etfs because they just buy the market. Or ones that hold lots of em corporate bonds, I really  just want sovereign bonds. So far the following fund looks pretty good...  https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/l-and-g-emerging-mkts-govt-bond-local-curr-index-c-income

[Stuey]

1 hour ago, ThoughtCriminal said:

The once unthinkable is now the everyday and mundane.

 

I'm a stuck record, I know, but what a self made fucking disaster we're heading for.

Our November baseload is £670/MWh

[ThoughtCriminal]

7 minutes ago, Stuey said:

Our November baseload is £670/MWh

Yup. It's a big shit sandwich and everyone's going to have to take a bite.

 

Now open wide..........

[Stuey]

1 minute ago, ThoughtCriminal said:

Yup. It's a big shit sandwich and everyone's going to have to take a bite.

 

Now open wide..........

At some point demand destruction will have to kick in. I reckon from early September people will cut back on everything.