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


spunko

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1 hour ago, Hancock said:

You clearly put a lot of research into your approach,....

Yes I have, and I continue to do so.  However I would make the point that on the technical side of things I'm approaching one end of a spectrum.  There are many simpler technical approaches that can be followed to confirm the macro and fundamental pictures.  Many just use moving averages.  Danielle Steele in her book "Juggling dynamite" recommended another approach (I think MACDs).  And then there were the turtle traders.   The point being there is a tripartite approach of macro, fundamental, and technical, each with varying optional levels of detail and effort.  The key IMO is to be aware of all three when looking at an opportunity.

PS:  I would also add there seems a Pareto to effort/depth in that effort v performance is not linear.  IMO, beyond a certain point it's better to use any marginal effort on other things like asset allocation and walking the dog!

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15 hours ago, planit said:

The FED tightening has now been completely priced in

nah that's a 'not truism'.......have you ever tried trading 'short term'? Mr Market ALWAYS reacts to news....

Anyway I'll continue reading the rest of your comments and give you a cheers or maybe a bogged, see how it goes lol

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15 hours ago, planit said:

The interesting thing I have noticed is that different investors have very different views of the market this month. MeetKevin, CathyWood and @nirvana see the market is falling and in a stressed state

fkin hell I'm famous lol

ain't got a clue who MeetKevin is, but Cathy is getting fukked on the back of tech falls in particular the likes of Palantir...

yeah I have 'weird market views' cos I have to try and invest long term for my SIPPs and ISAs cos the government dictates I can't really short with them, ok I suppose I could try and use the 3x wisdom tree nasdaq short thingy but it's a bit dangerous with the FED and other CBs propping up the markets all the time :P

But I also have a very short termist view in terms of day trading with CFDs.......that's a tuff gig too, not really recommended lol Twitter can be a massive distraction it has to be said but highly entertaining too

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BadAlchemy
1 hour ago, Harley said:

 Danielle Steele in her book "Juggling dynamite" recommended another approach (I think MACDs). 

That cracked me up Harley. Thankyou. Is that the one where the successful career woman struggling to bring up her autistic child alone, falls in love with the handsome, sensitive brain surgeon? Their relationship falters as their different stock trading approaches seem irreconcilable.... 

(I checked and I think you mean Danielle Park).

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DurhamBorn
3 hours ago, Harley said:

I haven't yet compared the price performances of the trust versus the ETF but the trust I saw had a lower yield than the LTAM ETF.  I may (like I just have for Asia) hold a trust and ETF to see if the trust delivers alpha, as well as to diversify holdings. 

This is for a "fund" only account.  It holds regional and (sad face: where possible) global sector ETFs and trusts.  Some regional ones seem to be on the move so I like to tilt the sails towards them. 

There was a great Palisades interview a while ago about doing this and it was something I used to do a while back when we had access to the US ETFs.  But back then I used a blunt and not very effective macro only approach.  I now have a more technical approach to support these rotations but lack the access to those better US ETFs!

Regardless, it seemed a good way for me to run a SIPP without too much attention or churn (when I lacked the time).  That maybe is not so much of an issue now but maybe it could diversify my risk from holding a pure individual stock based portfolio.

 

The government stopping access to most US ETFs has cost me tens of thousands in lost profits.I traded many over the cycles for years,COPX ,SEA,KOL,URA etc should of scrapped the KIDD rules when we left the EU but they havent.

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2 hours ago, Hancock said:

I'm still of the opinion the FED will raise rates significantly + QT this year, which will cause a taper tantrum, and they won't capitulate like last time, causing markets to fall further

where's the evidence for that? the FED is Wall Streets BITCH.....Powell showed promise at first, said he was gonna reduce the balance sheet, bla bla but he soon buckled, it's like fukkin groundhog day with dem cunts xD

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DurhamBorn
1 hour ago, Axeman123 said:

That kind of article is generally just speculation.

Hopefully they just suspend green taxes, which then becomes permanent.

Knowing our government, more wild spending and taxe rises to pay for it.

Thats what they should do,but i fear it will be more bennies and BOE printed loans to the industry.They say to pay over 10 years as if this problem will go away after a year.They dont seem to understand this is the start of a cycle,not the end xD Likely a nice dip in prices mid 23 then a long rise up through the rest of the cycle.Its disgusting that part of peoples bills are green subs and to pay other peoples bills.I saw how much the subs were worth to DRAX until 27 so buying them at £1.60 was insane value.At least those alone should of covered people on here.

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1 hour ago, Axeman123 said:

That kind of article is generally just speculation.

Hopefully they just suspend green taxes, which then becomes permanent.

Knowing our government, more wild spending and taxe rises to pay for it.

Agree about speculation. But, If there's anything I've learned about the past two years it's that government policy is driven by the mainstream media's creation of panic and fear. The FT is now on board with inflation, tax rises and "old people will die". They even talk about cutting green levies and security of supply (said by Dale Vince, founder of the green energy supplier Ecotricity lol, lol, lol). They can blame the russians all they like, the government, greens and msm created this.

Msm are now driving the issue, only matter of time before "something must be done". Curious as to what.

"Millions of British households face further crippling rises in their electricity and gas bills next winter, with the latest projections suggesting the energy price cap will nearly double to £2,400 a year from October. The calculation by energy consultancy EnAppSys for the Financial Times underlines that the country’s looming cost-of-living crisis is likely to be protracted as wholesale gas prices continue to trade at historically high levels.

The price cap, introduced in 2019 to protect the bills of roughly 15m households who do not opt for fixed-price deals, is already set to rise by more than 50 per cent in April to £2,000 a year from £1,277, based on average usage. Ofgem, the energy market regulator, sets the level of the cap twice a year with the next change after April’s due in October. Using the latest market pricing, EnAppSys estimates that later this year the cap could hit between £2,300 and £2,400, unless the government and regulator intervene to relieve pressure on consumers.

The cost of gas contracts for delivery later in 2022 have jumped markedly in the last two months, implying that energy prices will remain high into next year. A drop in gas supplies from Russia to western Europe contributed to the initial spike in energy prices last summer and the squeeze has worsened in January. Earlier this week, the head of the International Energy Agency accused Moscow of throttling gas supplies to Europe to use as leverage in the the stand-off between Nato and Moscow over Ukraine. The market has also reacted to expectations that the approval of the Nord Stream 2 pipeline to Germany — which Russia has indicated is a condition of it increasing sales to Europe — will be delayed further.

“EnAppSys are right, this is not just a short-term problem,” said Philippe Commaret, managing director for customers at EDF Energy, Britain’s fourth biggest energy supplier. “Immediate support for customers remains critical this winter and for the steep rise expected this April, but the need for change doesn’t stop there.”

Economists have warned of a looming cost-of-living crisis from April when the hike in energy bills is due to coincide with increases in national insurance and income tax and inflation reaching its highest in a decade. Ministers have been examining relief measures including a cut to the 5 per cent value added tax rate on energy bills, government-backed loans to suppliers so they can keep customers bills down as well as more help for vulnerable households. A cut in the so-called “green” levies on electricity bills, which subsidise renewable energy project, is also under consideration. Ofgem is due to set the level of April’s price cap on February 7.

The EnAppSys analysis tallies with estimates of some energy suppliers shared privately with the FT. One senior industry source said that, based on current forward energy prices, the cap next winter could reach £2,600. Phil Hewitt, director at EnAppSys, cautioned that the wholesale price-setting period used to calculate the price cap from October still had “six months to run” and prices could decrease in that time. But he added that even if wholesale gas prices stabilised or decreased, they were “likely to remain higher than historic levels”, meaning domestic energy bills would still be at a “higher level” than consumers were used to.

The charity Age UK warned on Thursday that rising energy costs could trigger a “national emergency” for older people and said many were already putting their health at risk by rationing their heating. Peter Smith of the fuel poverty charity National Energy Action said the EnAppSys analysis suggested that “without a proportionate and ambitious set of interventions [by government] the misery caused by cold homes could become the norm for years to come”.

Dale Vince, founder of the green energy supplier Ecotricity, on Friday called for a public inquiry into the roots of the energy price crisis, which blamed on a combination of poor regulation and a lax approach to security of supply. “The roots of this crisis must be properly examined, to learn from mistakes and help rebuild the energy market to better protect ourselves from future shocks,” he said."

 

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Axeman123
26 minutes ago, nirvana said:

..it's a shit way of life to be perfectly frank, you can try and think for yourself but inevitably your female partner will be full of shite cos of her mates...

Yeah, most people's idea of a social life is based on showing off purchases to a peer group defined by previous spending etc.

18 minutes ago, DurhamBorn said:

They dont seem to understand this is the start of a cycle,not the end xD

Aye, lots of short-term solutions being offered to long-term problems.

Green levies were based on an assumption that energy was too cheap, and that raising prices would incentivise efficiency. Now we have energy that is (politically speaking) too expensive, and hence calls for subsidy. A rational approach would be to cancel green levies first, but we all know we will end up with a government driving along with both the gas and brake pedals pressed all the way down!

 

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47 minutes ago, nirvana said:

where's the evidence for that? the FED is Wall Streets BITCH.....Powell showed promise at first, said he was gonna reduce the balance sheet, bla bla but he soon buckled, it's like fukkin groundhog day with dem cunts xD

Some Pikey woman at the fair told me.;)

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CannonFodder
36 minutes ago, Axeman123 said:

Yeah, most people's idea of a social life is based on showing off purchases to a peer group defined by previous spending etc.

Aye, lots of short-term solutions being offered to long-term 

Lol, its quite hard to meet up with someone for 10 years absence without it turning into a pissing contest.

So what are you up to; great job versus unemployed

Where do you live, what car

Married, number of kids

Far simplier to just grunt 'alright' at each other and see you in 10 years time

 

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1 hour ago, BadAlchemy said:

That cracked me up Harley. Thankyou. Is that the one where the successful career woman struggling to bring up her autistic child alone, falls in love with the handsome, sensitive brain surgeon? Their relationship falters as their different stock trading approaches seem irreconcilable.... 

(I checked and I think you mean Danielle Park).

th?id=OIP.KoxJ74bod7TkEM3fWM1k0gHaET%26p

Indeed, Park!

 

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22 hours ago, HousePriceMania said:

Here's DB at home....

 

In the Shawshank Redemption, wouldn't the guards and whomever else let Andy  to do their annual taxes have had to worry about changes in tax laws that  Andy wouldn't be up on,

Actually I think that DBs garage... if you squint you can just about see the edge of one of his fabled fridges!!

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3 hours ago, arrow said:

Story from Reuters from bbc. If it's true about loans wonder how much the interest rate will be. Centrica should benefit and how will they define gas companies. Producers too, like BP? Will they really cut taxes as reuters suggests? Unlikely. Government needs the money

Another part of the article is Inflation 6% in spring, Boe agrees with this. Increasing taxes and higher energy costs when the energy cap is raised. Major decrease in disposable income for many people.

 

LONDON (Reuters) - Britain's government is considering plans to smooth a sharp rise in energy costs which is due to hit households in April, the BBC said.

Under a cost deferral mechanism, big banks would lend billions of pounds to energy companies, allowing them to spread the increase in gas bills over five or 10 years, the broadcaster reported.

Britain's finance ministry could play a role by guaranteeing the loans to the energy firms.

Government officials were also considering using the Bank of England, which provided emergency loans to businesses during the coronavirus pandemic, to provide upfront funding, the BBC said late on Friday, without citing its sources.

Other options for the government to reduce the impact of the tariff hike - which could see bills rise by 50% after a surge in international energy prices - include an expansion of a discount scheme for low-income households or cuts to taxes on energy.

Prime Minister Boris Johnson is under pressure to act before an expected rise in the fuel price cap which is set to take Britain's inflation rate to 6% or higher in April, when tax payments are also due to go up for workers and employers.

Wow, big-state interventionist corporatism incoming?!           ...or 'Bandits, 12'oclock high!!',  as they used to shout duing ariel conflicts in WWII.

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2 minutes ago, JMD said:

Wow, big-state interventionist corporatism incoming?!

All as I expected. Expect more as the socio-political-health things bleed into the financial.  Arguably though just coming home if you buy it's all mostly rooted in the financial to start with.

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4 minutes ago, Chewing Grass said:

This is what you get with no sensible energy policy for the last 30 years.#

Shame people can't burn their expensive houses to keep warm!  Now you start to see what a real asset and value doesn't look like!

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2 hours ago, Harley said:

Yes I have, and I continue to do so.  However I would make the point that on the technical side of things I'm approaching one end of a spectrum.  There are many simpler technical approaches that can be followed to confirm the macro and fundamental pictures.  Many just use moving averages.  Danielle Steele in her book "Juggling dynamite" recommended another approach (I think MACDs).  And then there were the turtle traders.   The point being there is a tripartite approach of macro, fundamental, and technical, each with varying optional levels of detail and effort.  The key IMO is to be aware of all three when looking at an opportunity.

PS:  I would also add there seems a Pareto to effort/depth in that effort v performance is not linear.  IMO, beyond a certain point it's better to use any marginal effort on other things like asset allocation and walking the dog!

Harley, Is book 'Juggling Dynamite' any good? I've heard good things about it and its on my to-buy list, because I am looking for a 'simple' technical approach '3rd leg' to learn (as you say it is wise to combine macro, fundamentals, technical).

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1 hour ago, Chewing Grass said:

Communism from the state central planners.

The UK is a failed capitalist state printing money like the Weimar.

This is what you get with no sensible energy policy for the last 30 years.#

Low Energy input costs = booming economy

High Energy input costs = failed economy

Yes, but it's not just here in the UK... It is actually rather frightening to hear this 'doom/gloomers' predictions, particularly as Viktor Shvets is still actively employed as a banker! Ie he's not just a  financial commentator, though how long before he's fired from his post, when he says things like he'd never again own a bank stock(!), its only matter of time I guess.                                                                                                                                His thesis on deflation vs inflation is also interesting, for alternative view point.                                                                 Macro voices podcast:  https://m.youtube.com/watch?v=07Lq7ysCfBkown

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Axeman123

Just in case anyone wants their piss boiling:

"Next month brings the likelihood of a 0.25% interest rate rise from the Bank of England, and possibly two more over the rest of the year, as Threadneedle Street seeks to dampen Britain’s overheating economy.

At least that would be the reason if the economy were overheating and in need of higher interest rates. In fact, the central bank is simply revealing itself to be weaker than it was in 2011, when inflation jumped to 5% and investors, fearful of runaway prices encouraging workers to demand sky-high wages, demanded action. Interest rates then remained at historic lows.

The logic of the position the Bank took last year – that inflation would be temporary and externally driven, and for that reason beyond its influence – was reminiscent of 2011. And given the underlying weakness of the economy, that same logic still applies."

https://uk.finance.yahoo.com/news/another-interest-rate-looms-britain-170028041.html

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