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

[Eventually Right]

On 16/11/2021 at 10:24, Eventually Right said:

I entered the Telegraph Fantasy Fund manager competition a few weeks ago with a 5 share portfolio of:

Vodafone

BT

Airtel Africa

Telecom Plus

The Scottish share (I couldn't see any more teleco stocks in the selection available!)

Currently 7th out of 5450... 

Just an update, in case anyone is interested.

I switched out all my telecoms shares for PM mining shares a couple of days ago:

 

It won't last, but if I'm somehow number 1 in three weeks time, the £5k prize will make it a good Christmas! 

 

[DurhamBorn]

Lots of smackdowns over this cycle,lots bigger than this one.I hope BP stays down while they are printing cash i want those buybacks cheap as possible.Imperial etc was also starting to go up,id prefer they stay down until buybacks kick in.This is an inflation cycle,the more bought back early cheaper the better.

Markets are worried about countries becoming insular as well.The immigrant problems a prime example where France just wants to pass the problem on.Of course they are right to do so,but more and more countries will look to their own needs.All part of the cycle.

[Hancock]

11 minutes ago, Eventually Right said:

Just an update, in case anyone is interested.

I switched out all my telecoms shares for PM mining shares a couple of days ago:

 

It won't last, but if I'm somehow number 1 in three weeks time, the £5k prize will make it a good Christmas! 

 

Good luck to you, maybe this is the time you are ....

[JMD]

1 hour ago, planit said:

The FT article was pretty scary in it's wording and imagery

 

But this virus is accelerating from almost zero cases (and the previous variants are under control) so it's not very surprising that nearly all cases are the new variant

The worrying part is this variant seems to render the vaccines less effective so this could be a wave that sweeps everywhere. It is already in a few countries.

 

Stupid comment of the day:

How does she know we are ahead of the variant? Seems a good probability that someone infected from South Africa has travelled to UK (which must be one of the top destinations from SA)

 

As I said earlier, I am expecting a US increase too due to the vaccines wearing off so if there is a bit of a stock market recovery in the next couple of trading days I will be selling. Everyone was getting a bit over-confident in the markets.

 

 

Yes, so much media manipulation. I wonder what the suicide rates will be as a result of all this end-of-days propaganda.                                                                                                                                                                                  But isn't the increase in communicability for each new variant expected - It's what virus mutations typically do isn't it? ...Ie over time virus's mutate so they can spread more easily and also become milder. However there is no mention - in any reporting I've seen or heard - of the potential health-harms, illness/death etc, of this variant. Funny that!

[Starsend]

10 hours ago, JMD said:

My 'friend'(?!) thanks you for the info. Though apparently for CGT, selling and then immediately buying back, say for example half the weight in the same commodity, makes you liable in tax terms for only 50% of the sale. 

I never knew that! I'm assuming that you have to buy back at exactly the same price so it's almost like a partial exchange really. Useful to know and I'll look into this further. 

[wherebee]

28 minutes ago, Hancock said:

Whats so good about 60, it was 52 just 3 months ago!

because 60 is on the way to 52, and I sold a bunch at 64

 

[ThoughtCriminal]

FinTwit consensus seems to be that this is the start of deflation 🤔

[JMD]

25 minutes ago, Starsend said:

I never knew that! I'm assuming that you have to buy back at exactly the same price so it's almost like a partial exchange really. Useful to know and I'll look into this further. 

Same price and time and dealer I think, to make it fully transparent, but I'm no expert. I was told this on here by two knowledgeable contributors to the thread, approx 18 months ago if I recall correctly. Sorry, but I can't now remember their names or find the posts. Double the buy/sell charges of course, plus always the danger that the cgt tax rules will change.

[HousePriceMania]

21 minutes ago, ThoughtCriminal said:

FinTwit consensus seems to be that this is the start of deflation 🤔

I was just going to ask....does anyone think this might be the start of a larger collapse.  

 

It wont take much for panic selling to kick in in the US with the crazy highs they have

[Noallegiance]

Nice to see what's up when everything's down

[Majorpain]

3 minutes ago, HousePriceMania said:

I was just going to ask....does anyone think this might be the start of a larger collapse.  

Things are degrading slowly, and have been since 2018, but its not reached the critical "oh shit" mass yet. That IMO comes when the Fed stops pumping dollars into the world economy and will probably be when the political impact of inflation in US can't be ignored any more so "something must be done".  As to when that happens is a complete guess, but a nice round 10% CPI would be a good start.

[planit]

1 hour ago, JMD said:

  But isn't the increase in communicability for each new variant expected

That's the point, at this stage they don't know the R number of the virus, what they have done is shown % of cases that are the new variant.

But if you think about it, with the alpha strain 100% of cases were this strain on day one, the line would have gone from 0 to 100% on the graph they posted but they left that one off.

The graph is completely meaningless as the current state of the previous strain and current number of cases (of previous strains) dictate how fast the line can rise for the new variant.

 

Quote

- It's what virus mutations typically do isn't it? ...Ie over time virus's mutate so they can spread more easily and also become milder. However there is no mention - in any reporting I've seen or heard - of the potential health-harms, illness/death etc, of this variant. Funny that!

Yep, they also don't know how dangerous this is.

 

It could take a couple of weeks to find out this information, in the mean time it is going to be found in loads of new places so the state of worry will continue. Fear/VIX will probably continue to rise.

Within a couple of weeks loads of countries will show rising Covid cases including the US and that is when I think people will be worrying the most.

After that once everyone realises it is not worse than the current variants and they have updated the vaccine for it things will return to normal.

I doubt deaths will increase much and lockdowns will not go back to what they were but that doesn't stop the markets panicking.

 

Edit - to put the word 'don't' in - duh 

[Barnsey]

Bought more BP, love me a good black friday sale.

Randomly had an Amazon parcel delivered today by our RM postie, first that's happened. 

[Yellow_Reduced_Sticker]

23 minutes ago, Barnsey said:

Bought more BP, love me a good black friday sale.

Randomly had an Amazon parcel delivered today by our RM postie, first that's happened. 

AH...that must be why RMG.L are up ...when the market today is in FREE-FALL!

[Sugarlips]

Aaand it’s gone.

 

[sancho panza]

random post from the propert y thread,when will RM follow?

[AlfredTheLittle]

Great to see that comments in the online papers are pretty much unanimous that the new variant is just made up scare tactics, I can't see there being another big panic about the same thing, it's been done too many times now. The concern would be over what restrictions governments bring in, but again they're going to run out of money if they keep trying that one. If travel's restricted it could affect oil in the short term but must make producers think twice about investment, just as things were starting to pick up.

[HousePriceMania]

1 hour ago, Majorpain said:

Things are degrading slowly, and have been since 2018, but its not reached the critical "oh shit" mass yet. That IMO comes when the Fed stops pumping dollars into the world economy and will probably be when the political impact of inflation in US can't be ignored any more so "something must be done".  As to when that happens is a complete guess, but a nice round 10% CPI would be a good start.

When's the next election !!!

[Castlevania]

2 hours ago, JMD said:

Same price and time and dealer I think, to make it fully transparent, but I'm no expert. I was told this on here by two knowledgeable contributors to the thread, approx 18 months ago if I recall correctly. Sorry, but I can't now remember their names or find the posts. Double the buy/sell charges of course, plus always the danger that the cgt tax rules will change.

HMRC don’t count it as a disposal for CGT purposes if you sell and then buy back the same asset within 30 days. It’s to stop people from crystallising CGT losses a day before the end of the tax year and then buying the same stock back the next day in the new tax year.

[sancho panza]

19 hours ago, Cattle Prod said:

Alot of fun chatter in the last few days about King Canute.

"I command the oil price to stay under $80"

These people simply haven't a fucken clue.

Very much feels like that.Uncle Joe -despite hating oil-wants the price down so he can buy more cheaply.

Bit in bold seems spot on to me.

 

10 hours ago, wherebee said:

The new Botswana variant of COVID is causing futures to crater and oil is likely to follow.  If you want to back up the truck on oilies, this next trading session could be a nice one.

If XOM goes back below 59, I'll get some more.

Set your targets.We've got some options moeny to redeploy that's been sat waiting for a target for a month.

I'm in the @AlfredTheLittle @BadAlchemy school of thought.

2 hours ago, JMD said:

                                                                                                                                                                        But isn't the increase in communicability for each new variant expected - It's what virus mutations typically do isn't it? ...Ie over time virus's mutate so they can spread more easily and also become milder. However there is no mention - in any reporting I've seen or heard - of the potential health-harms, illness/death etc, of this variant. Funny that!

yes and yes.I can't believe the panic.

[sancho panza]

1 hour ago, Majorpain said:

Things are degrading slowly, and have been since 2018, but its not reached the critical "oh shit" mass yet. That IMO comes when the Fed stops pumping dollars into the world economy and will probably be when the political impact of inflation in US can't be ignored any more so "something must be done".  As to when that happens is a complete guess, but a nice round 10% CPI would be a good start.

Good assessment there MP.Fed still has the capacity to step in here and backstop,which their playbook says they will.When the Fed can no longer backstop,then the real fun will begin.

We'd also need a broader sense of panic.At the moment,90% of market participants believe the govts are in control.

having said that I should declare my interest that we'll be buying this dip/swapping horses.,

22 minutes ago, AlfredTheLittle said:

Great to see that comments in the online papers are pretty much unanimous that the new variant is just made up scare tactics, I can't see there being another big panic about the same thing, it's been done too many times now. The concern would be over what restrictions governments bring in, but again they're going to run out of money if they keep trying that one. If travel's restricted it could affect oil in the short term but must make producers think twice about investment, just as things were starting to pick up.

Really does have the feel of the boy who cried wolf doesn't it?

Think you're right.Sunak is out of moolah.

[Harley]

2 hours ago, HousePriceMania said:

I was just going to ask....does anyone think this might be the start of a larger collapse.  

 

It wont take much for panic selling to kick in in the US with the crazy highs they have

I've been lightening up today.  I don't follow covid and the markets as a combo.  I just look at the longer term charts.

[Harley]

3 hours ago, ThoughtCriminal said:

FinTwit consensus seems to be that this is the start of deflation 🤔

In assets or cost of living?  I assume assets.

[Harley]

1 hour ago, Castlevania said:

HMRC don’t count it as a disposal for CGT purposes if you sell and then buy back the same asset within 30 days. It’s to stop people from crystallising CGT losses a day before the end of the tax year and then buying the same stock back the next day in the new tax year.

But there is some flexibility with say gold - physical, ETFs, etc?  Or just wait the 30 days and hedge in the meantime if worried?  The beauty of CGT, the voluntary tax of the wealthy.  

PS:  There are detailed CGT guidance notes on the HRMC website.

[Harley]

59 minutes ago, sancho panza said:

Very much feels like that.Uncle Joe -despite hating oil-wants the price down so he can buy more cheaply.

Best I heard was on Macrovoices - just a gesture with the SPR so he could then blame others.  Pure politics.