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

[wherebee]

16 minutes ago, Axeman123 said:

The best inflation assets are currently at bargain prices, from a big picture perspective, and represent an opportunity to get in at the ground floor. The best analogy would be buying long-bonds when yields peaked in the late 1980s, and just putting your feet up for 30 years. 

That is one view.  However, if the mass vaccinations across the west cause mass deaths in 2022, the inflationary assets will stutter.  I think oilies are still good, as their product will be in demand from the east, but things like telecom?  If even 5% of consumers die?

I am in oilies, miners, and not much else.

edit: in line with collapsing into the oilies and miners, sold off almost all of the scottish share last night.  Made 1500AUD including costs over the 2 month trade.  That'll do me, pig, that'll do.

[Axeman123]

1 minute ago, wherebee said:

If even 5% of consumers die?

I don't foresee mass deaths. We just aren't hearing about enough instances for it to be that common. I could certainly imagine the shot's safety causing a scandal, and some genuine individual hardships (so comparable to historically not screening donated blood for HIV). I just don't personally see it as a macro-economic factor.

[leonardratso]

8 minutes ago, Axeman123 said:

I don't foresee mass deaths. We just aren't hearing about enough instances for it to be that common. I could certainly imagine the shot's safety causing a scandal, and some genuine individual hardships (so comparable to historically not screening donated blood for HIV). I just don't personally see it as a macro-economic factor.

yeah, if the percentages vaccinated are to to be believed then id assume more would be kicking the bucket from it by now, im not in great health, but i know a lot more are worse off health wise and by the law of percentages vaccinated i assume those in worse health would be mainly vaccinated by now, i just ignored the  calls for vaccination since the stuff they are all on about being curbed from doing i dont give a shit about anyway, i havent for years before all this shit came along. Work can go and fuck itself as well as far as im concerned if they hold that over me as well.

[HousePriceMania]

2 hours ago, DurhamBorn said:

The UK government have tried to force down prices to levels that couldnt be sustained,and for me,the main reason they did it was to try to make up a bit for the council tax robbery etc going on and get idiots to pay more for a house. The civil service in this country are just a cushy group who do everything for their own interests.

EVERYTHING the government is doing is about the housing market and making sure the bankers for all of the pie and the spare eggs.

[HousePriceMania]

1 hour ago, Axeman123 said:

The best analogy would be buying long-bonds when yields peaked in the late 1980s, and just putting your feet up for 30 years. 

This is part of my plan, inflation is a nightmare but if you can time that one right you are gonna be laughing all the way through retirement.

[HousePriceMania]

2 hours ago, DurhamBorn said:

When you force own ROCE to levels where its not worth investing this is the shit show you get.Telcos were only a small way away from the same problem,but regulators are moving there just in time.

The UK government have tried to force down prices to levels that couldnt be sustained,and for me,the main reason they did it was to try to make up a bit for the council tax robbery etc going on.The civil service in this country are just a cushy group who do everything for their own interests.

The government has several things going on now that in the past would of brought governments down singular.It just shows what a printing press and a horrific opposition can do.Likely a new right leaning party will form and cut the Tories legs off.

I've said for years that the government/labour/tory/liberals/bankers were leading us down a dark path that will result in a far right wing government.

I feel like I am living in German 1920s and as the rich/bankers/establishment line their own pockets time and time again more and more people are getting angry or least starting to think something doesn't seem right. 

Any anger could spill over, especially if the £/system collapses and people are left with nothing.  I for one would be offski right now if I were not British.  I think if I was Welsh/Irish/Scottish I'd be making a plan to go back there too. Humans can be right nasty c**ts.  

Was coronavirus a test run for what's to come, just so they can see what they can get away with.

It's all going a bit totalitarian mad now.  The only thing they've not stomped on is free speech but that's coming in Jan.

[Mapper]

7 hours ago, Hancock said:

But you can legislate the asset owning middle class and the rich into prosperity, its what out govt has been doing since its inception, legislation that has seemingly been on steroids for the last 25 years.

Socialism for the rich.

[Mapper]

4 hours ago, Cattle Prod said:

What the FAANGMAN hides ..

Look at Nikola down there in the penny dreadfuls! -87%

Weren't they as big as Tesla at one point, but never having produced anything?

[Loki]

2 minutes ago, Mapper said:

Look at Nikola down there in the penny dreadfuls! -87%

Weren't they as big as Tesla at one point, but never having produced anything?

They're working on the "making up for it in volume" part

[Eventually Right]

1 hour ago, wherebee said:

That is one view.  However, if the mass vaccinations across the west cause mass deaths in 2022, the inflationary assets will stutter.  I think oilies are still good, as their product will be in demand from the east, but things like telecom?  If even 5% of consumers die?

I am in oilies, miners, and not much else.

edit: in line with collapsing into the oilies and miners, sold off almost all of the scottish share last night.  Made 1500AUD including costs over the 2 month trade.  That'll do me, pig, that'll do.

If your base case is at least 5% of the adult population is likely to die from vaccines in the next year or so, I think it makes normal investing rationales (“inflation would do x, currency would do y, therefore invest in z”) moot.
 

In that scenario, you’d have utter chaos-fear/anger/violence on a scale not seen for a couple of centuries. Oil prices would crater (along with most things) as markets discount future perceived likely deaths, as well as potential civil wars etc. gold might get a bid, but miners would probably be at very high risky of nationalisation (even in safe N American/European jurisdictions).

I’d be limiting my investments to PM coins, a fully stacked larder, and relocating somewhere as rural as possible if I believed that-I’d want minimal exposure to financial assets.

[wherebee]

3 hours ago, Axeman123 said:

I don't foresee mass deaths. We just aren't hearing about enough instances for it to be that common. I could certainly imagine the shot's safety causing a scandal, and some genuine individual hardships (so comparable to historically not screening donated blood for HIV). I just don't personally see it as a macro-economic factor.

well, jury is out, but don't forget even the early adopters of the vaccines have less than 12 months so far for any sizeable numbers of jabbed.  

On the one hand, I hope I'm wrong as if I am right as someone posted above, everything will go to shit

On the other hand, I hope I am right as if not, democracy and personal freedom is fucked (see austria, australia, germany, etc etc)

[Don Coglione]

4 hours ago, Mapper said:

Look at Nikola down there in the penny dreadfuls! -87%

Weren't they as big as Tesla at one point, but never having produced anything?

IG cunts wouldn't let me short it at $35.

Cunts.

[Barnsey]

[jamtomorrow]

DXY crossing 96.5 this morning.

I wonder to what extent the ongoing collapse of the Turkish Lira is an unexpected factor? Turkish M2 is supposedly in the region of 450bn, so would any meaningful rate of replacement by USD work as extra taper (since it seems like the effect will be "pure" liquidity absorption by Turkish economy)?

Just 1.5% per month would put it right in the middle of current monthly taper rates, so a steady flow at that rate effectively bringing the entire taper program forward by a month. And 1.5% seems on the low side given the rate of collapse and what that must be doing to sentiment within the Turkish economy.

[MrXxxx]

Some considerations on where your miners of all commods may be located?

 

BoA downgrades Hochschild Mining to 'underperform' after Peru announces plans to close two mines

(Sharecast News) - Analysts at Bank of America downgraded their recommendation for shares of Hochschild Mining from 'buy' to 'underperform', marking down their target price from 280.0p to 90.0p in the process.
The latter, they said, valued the company at 0.5 times its net present value, which was at the trough end of its historical price-to-net present value valuation range.

They specifically cited the Peruvian government's announcement that it would close four mines for the move.

Two of those, Inmaculada and Pallancata, represented roughly three quarters of their net present value-to-discounted cash flow valuation for the company and approximately 70% of its earnings before interest, taxes, depreciation and amortisation.

Inmaculada alone was responsible for 60% of the miner´s EBITDA.

Hochschild's remaining mine, San Jose, was located in Argentina.

"While the company will likely dispute this decision we don't see equity outperforming until the dispute is resolved."

The analysts also weighed in on the possible implications for copper miners in the country.

Copper accounted for about 40% of Peru's exports and gold for 16%.

"No information suggests that the government will close other mines but we cannot rule out it will go after large(r) mines. Other companies with exposure to Peru: Southern Copper, Glencore, Anglo American (inter alia). We also note that Peru is one of the world's larger producers of copper (c. 11% of global output)."

[geordie_lurch]

So it seems I should have sold my Petrofac shares when they were up 80% or more after the court stuff as my stop losses were triggered this morning on the offer ones I bought when I offloaded the others at 130 or so 

I'm going to add some more stop losses to a load of other shares to try and lock in some profits this week as I have a feeling there's no good news coming before March 2022

[jamtomorrow]

Sweet baby Jesus

[Harley]

1 hour ago, jamtomorrow said:

DXY crossing 96.5 this morning.

I wonder to what extent the ongoing collapse of the Turkish Lira is an unexpected factor? Turkish M2 is supposedly in the region of 450bn, so would any meaningful rate of replacement by USD work as extra taper (since it seems like the effect will be "pure" liquidity absorption by Turkish economy)?

Just 1.5% per month would put it right in the middle of current monthly taper rates, so a steady flow at that rate effectively bringing the entire taper program forward by a month. And 1.5% seems on the low side given the rate of collapse and what that must be doing to sentiment within the Turkish economy.

I parked money into Lira to buy stocks but they closed trading due to the volatility.  I wasn't paying attention and got well caned on the forex.  Lesson learned.

[Harley]

44 minutes ago, MrXxxx said:

Some considerations on where your miners of all commods may be located?

 

BoA downgrades Hochschild Mining to 'underperform' after Peru announces plans to close two mines

(Sharecast News) - Analysts at Bank of America downgraded their recommendation for shares of Hochschild Mining from 'buy' to 'underperform', marking down their target price from 280.0p to 90.0p in the process.
The latter, they said, valued the company at 0.5 times its net present value, which was at the trough end of its historical price-to-net present value valuation range.

They specifically cited the Peruvian government's announcement that it would close four mines for the move.

Two of those, Inmaculada and Pallancata, represented roughly three quarters of their net present value-to-discounted cash flow valuation for the company and approximately 70% of its earnings before interest, taxes, depreciation and amortisation.

Inmaculada alone was responsible for 60% of the miner´s EBITDA.

Hochschild's remaining mine, San Jose, was located in Argentina.

"While the company will likely dispute this decision we don't see equity outperforming until the dispute is resolved."

The analysts also weighed in on the possible implications for copper miners in the country.

Copper accounted for about 40% of Peru's exports and gold for 16%.

"No information suggests that the government will close other mines but we cannot rule out it will go after large(r) mines. Other companies with exposure to Peru: Southern Copper, Glencore, Anglo American (inter alia). We also note that Peru is one of the world's larger producers of copper (c. 11% of global output)."

I sold HOC a while back on weak technicals.  I never knew the government was so flushed with cash to close mines, or had a mining specialism.  Maybe they'll ask the Maoists to have a word with the Chinese.

[DoINeedOne]

Whilst I don’t hold it shows from what I assumed to be a reasonably decent business who are struggling with shipping costs, availability of products and costs etc… caused by all the shit that’s going on now

I was browsing there website last week as was thinking getting a new fridge half the products were out of stock  

seems a common thing with even a lot clothes websites hardly any stock

AO is down nearly 78% over the past year 

Today didn’t help

 

 

[MrXxxx]

46 minutes ago, geordie_lurch said:

So it seems I should have sold my Petrofac shares when they were up 80% or more after the court stuff as my stop losses were triggered this morning on the offer ones I bought when I offloaded the others at 130 or so 

I'm going to add some more stop losses to a load of other shares to try and lock in some profits this week as I have a feeling there's no good news coming before March 2022

My personal opinion on PFC is that at the moment the price is low due to the 'flushing out' of those investors who held at a loss and are now happy to get rid at break even. Looking forward they a) they have got all the bad news [SFO fine, share issue] out of the way, and b) as energy markets develop mid/long-term [i.e. oil up then down, green up] contracts will increase...so basically a hold. This same sentiment can apply to their competitors i.e. wg. who have just gone through a similar scenario.....but as always DYOR.

[Majorpain]

1 hour ago, jamtomorrow said:

DXY crossing 96.5 this morning.

I wonder to what extent the ongoing collapse of the Turkish Lira is an unexpected factor? Turkish M2 is supposedly in the region of 450bn, so would any meaningful rate of replacement by USD work as extra taper (since it seems like the effect will be "pure" liquidity absorption by Turkish economy)?

Just 1.5% per month would put it right in the middle of current monthly taper rates, so a steady flow at that rate effectively bringing the entire taper program forward by a month. And 1.5% seems on the low side given the rate of collapse and what that must be doing to sentiment within the Turkish economy.

Quick reminder as to why USD is demanded, since its used in vast majority of commodity trading (crude alone $4.6T majority dollars) people must have dollars to buy the goods.  That causes a problem if the US isn't creating more dollars, as pure demand/supply causes the price of the dollar to rise, but equally since the only real way to create dollars is Fed prints them and gives them to banks/govt to spend also has direct impacts on US economy.  That impact is becoming greater over time as US GDP shrinks in comparison to the rest of the world, and the US economies ability to absorb more dollars than its world % would otherwise require becomes more strained.

End result IMO is dollar continues to rise whilst Fed printing causes increasing problems for US economy, mainly inflation.  Its also another reason why the Fed cant raise rates, if they do and those dollars start to sit in banks in US they are not available for markets to use for trading.  Powell is balanced on a pinhead, and its only going to get worse.

[jamtomorrow]

19 minutes ago, Majorpain said:

Powell is balanced on a pinhead, and its only going to get worse.

Exactly what I was thinking, and with the markets already on a hair trigger over The Dreaded Taper, I imagine Powell needs a surprise amounting to "a few months ahead of schedule" (because of Turks sucking up USD liquidity) like a hole in the head

[Majorpain]

7 minutes ago, jamtomorrow said:

Exactly what I was thinking, and with the markets already on a hair trigger over The Dreaded Taper, I imagine Powell needs a surprise amounting to "a few months ahead of schedule" (because of Turks sucking up USD liquidity) like a hole in the head

Turkey is small fry, after a bit more thought high commodity prices are going to be doing much more damage.  I think you can see it in the DXY chart, it peaks and falls after Mar 20 as lockdowns slam commodity prices, with the slow and steady grind higher from Jun 21 as rising commodities (esp oil) start to bite. 

[DurhamBorn]

1 hour ago, DoINeedOne said:

Whilst I don’t hold it shows from what I assumed to be a reasonably decent business who are struggling with shipping costs, availability of products and costs etc… caused by all the shit that’s going on now

I was browsing there website last week as was thinking getting a new fridge half the products were out of stock  

seems a common thing with even a lot clothes websites hardly any stock

AO is down nearly 78% over the past year 

Today didn’t help

 

 

Kids used them and they were great.Very easy.Long supply chains as you say.When i was 17 my first proper job was with Electrolux in Spennymoor,cooker plant.It was huge and they had a washing machine plant and fridge/freezers.All closed during the Blair disaster and new build housing now.

However it wont be long before we are making all those things again over here.Ebac are already doing it in Newton Aycliffe,and CELLO are making TVs in Bishop Auckland.When i was importing from China  my contact over there used to say "you crazy in west,you pay to ship fresh air around world"

She meant bulky goods who had a lot of the volume empty space.