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

[Anglepoise]

8 minutes ago, Plan-b said:

Can I ask you where you saw this report? Thanks

Telegraph this morning. Talking about the FTSE Russell index.

[Boon]

https://www.investegate.co.uk/ftse-russell/rns/ftse-russell-indices---deletions/202203140730055805E/

Not sure if this is the same as being kicked off from trading...

[Innkeeper]

6 minutes ago, Plan-b said:

Can I ask you where you saw this report? Thanks

I think it means these shares will not be included in the calculation of indices.  The reason given being lack of depth in the market for these stocks because some brokerages aren’t dealing them.

https://www.investegate.co.uk/ftse-russell/rns/ftse-russell-indices---deletions/202203140730055805E/

I don’t think this follows that trading has been suspended but we’ll see when the market opens.  Oh, that’s now!

 

[geordie_lurch]

1 minute ago, Boon said:

https://www.investegate.co.uk/ftse-russell/rns/ftse-russell-indices---deletions/202203140730055805E/

Quote

Accordingly, FTSE Russell will delete the following constituents from all FTSE Russell indices in conjunction with the forthcoming March 2022 index reviews, at zero value (effective from the open on 21 March 2022):

· Evraz Plc. (UK, B71N6K8, FTSE All-Share, GEIS Mid Cap, FTSE 100) - currently suspended by the Financial Conduct Authority from the Official List

· Polymetal International Plc. (UK, B6T5S47, GEIS Mid Cap, FTSE All-Share, FTSE 100)

· Petropavlovsk Plc. (UK, 3154454, GEIS Small Cap, FTSE All-Share, FTSE 250)

· Raven Property Group (UK, B0D5V53 , FTSE All-Share, FTSE UK Small Cap)

For the avoidance of doubt, the index calculation will continue to use the trading price of the above constituents until the close on Friday 18 March 2022, when the close prices will be updated to zero. In the absence of a resumption of trade, Evraz will be held at 80.89p for the duration of its suspension until it is updated to zero at the close on 18 March 2022, inclusive of the 18 March 2022 expiry.

 

 

[TNS]

5 minutes ago, Boon said:

 

Think it's just talking about the 100 to 250 index drop...

[Innkeeper]

2 minutes ago, TNS said:

Also on reuters, sense a lot of people getting massively burned. I lost a bit but some on the likes of lse forums were in for tens of thousands!

Still trading this morning.  

[TNS]

Just now, Innkeeper said:

Still trading this morning.  

Yeah, think ita just the 100 to 250 drop news. Overhyped crap as always.

[M S E Refugee]

If cancel culture becomes a thing on the LSE then most of my investments going forward will be in physical Gold and Silver.

Stocks are far too risky in this environment.

[Plan-b]

4 minutes ago, M S E Refugee said:

If cancel culture becomes a thing on the LSE then most of my investments going forward will be in physical Gold and Silver.

Stocks are far too risky in this environment.

More than ever Its best to be hedged in these uncertain times

[Chewing Grass]

Good piece I missed from 2 days ago, explains where the US is perfectly and simply.

 

[Siggy]

37 minutes ago, Innkeeper said:

I think it means these shares will not be included in the calculation of indices.  The reason given being lack of depth in the market for these stocks because some brokerages aren’t dealing them.

https://www.investegate.co.uk/ftse-russell/rns/ftse-russell-indices---deletions/202203140730055805E/

I don’t think this follows that trading has been suspended but we’ll see when the market opens.  Oh, that’s now!

 

I don't fully understand the implications of this- if they are deleted from the indices at zero value doesn't that mean that brokers like HL will not be allowing trades any longer? Will they send me some certificates for my Poly shares and tell me to piss off? I suppose it's pretty academic really as they are worth zero anyway lol

[Chewing Grass]

33 minutes ago, M S E Refugee said:

If cancel culture becomes a thing on the LSE then most of my investments going forward will be in physical Gold and Silver.

Stocks are far too risky in this environment.

Just looked at my Pension Pots, as of today they are worth the same amount they were exactly 12 months ago, so adding in the contributions and zero growth I'm down £34,000 excluding inflation.

[kibuc]

17 minutes ago, Siggy said:

I don't fully understand the implications of this- if they are deleted from the indices at zero value doesn't that mean that brokers like HL will not be allowing trades any longer? Will they send me some certificates for my Poly shares and tell me to piss off? I suppose it's pretty academic really as they are worth zero anyway lol

Indices are synthetic instruments and have little to do with your ability to trade a share. Being part of a popular index provides greater liquidity as stocks gets traded indirectly through inflows and outflows to passive index funds, but that's about it. "Assigning zero value" doesn't mean your stock is worth zero either, it's worth exactly the amount someone on the exchange is prepared to pay for it, which in case of POLY seems to be around £2 per share at the moment. Luckily for everyone, share prices are not yet determined by a single private entity declaring their current value.

Imagine you have a record collection, and every day you calculate their overall value by looking at how much they would fetch on ebay. That's your Siggy Record 250 Index. However, one day you start getting worried that your pristine-condition Baby It's Cold Outside 45 might become outlowed due to it's promotion of toxic masculinity - in fact, you notice gumtree has already banned it from listing. Even though the record still fetches £50k on ebay, you decide to assign a value of £0 to it in your calculations. It doesn't stop anyone from trading it or enforce any specific trade value. That's more or less what FTSE did.

[Siggy]

2 minutes ago, kibuc said:

Indices are synthetic instruments and have little to do with your ability to trade a share. Being part of a popular index provides greater liquidity as stocks gets traded indirectly through inflows and outflows to passive index funds, but that's about it. "Assigning zero value" doesn't mean your stock is worth zero either, it's worth exactly the amount someone on the exchange is prepared to pay for it, which in case of POLY seems to be around £2 per share at the moment. Luckily for everyone, share prices are not yet determined by a single private entity declaring their current value.

Imagine you have a record collection, and every day you calculate their overall value by looking at how much they would fetch on ebay. That's your Siggy Record 250 Index. However, one day you start getting worried that your pristine-condition Baby It's Cold Outside 45 might become outlowed due to it's promotion of toxic masculinity - in fact, you notice gumtree has already banned it from listing. Even though the record still fetches £50k on ebay, you decide to assign a value of £0 to it in your calculations. It doesn't stop anyone from trading it or enforce any specific trade value. That's broadly what FTSE did.

Thank you for the explanation, I follow that.

How does this impact the broker, say HL which I use,  having the share available to trade on their platform? I note that all the shares on there at the moment are part of some index or other, so if they are not then what happens?

[Plan-b]

5 minutes ago, kibuc said:

Indices are synthetic instruments and have little to do with your ability to trade a share. Being part of a popular index provides greater liquidity as stocks gets traded indirectly through inflows and outflows to passive index funds, but that's about it. "Assigning zero value" doesn't mean your stock is worth zero either, it's worth exactly the amount someone on the exchange is prepared to pay for it, which in case of POLY seems to be around £2 per share at the moment. Luckily for everyone, share prices are not yet determined by a single private entity declaring their current value.

Imagine you have a record collection, and every day you calculate their overall value by looking at how much they would fetch on ebay. That's your Siggy Record 250 Index. However, one day you start getting worried that your pristine-condition Baby It's Cold Outside 45 might become outlowed due to it's promotion of toxic masculinity - in fact, you notice gumtree has already banned it from listing. Even though the record still fetches £50k on ebay, you decide to assign a value of £0 to it in your calculations. It doesn't stop anyone from trading it or enforce any specific trade value. That's more or less what FTSE did.

Many Thanks for that!

[kibuc]

6 minutes ago, Siggy said:

Thank you for the explanation, I follow that.

How does this impact the broker, say HL which I use,  having the share available to trade on their platform? I note that all the shares on there at the moment are part of some index or other, so if they are not then what happens?

There's no telling what HL is going to do. The share is still traded on LSE and will keep getting traded even after its removal from the index, unless there's a separate decision taken by LSE to suspend it. However, liquidity might take a hit. Whether it would be enough for HL to take action is anyone's guess, I reckon as long as the share is tradeable on a major exchange like LSE they would be denying themselves business by not allowing to trade it, but those decisions have less to do with business and more with politics nowadays.

[Sasquatch]

Just been copied in to a formal announcement from British Steel from a building contractor. With immediate effect, British Steel is increasing the price of new orders by £250/tonne.

https://www.constructionenquirer.com/2022/03/11/british-steel-imposes-biggest-ever-instant-price-hike/

The builder has requested that they pass this price increase on to the client. Very little choice I think.

This is not boding well for the construction industry........

[Chewing Grass]

10 minutes ago, Sasquatch said:

Just been copied in to a formal announcement from British Steel from a building contractor. With immediate effect, British Steel is increasing the price of new orders by £250/tonne.

https://www.constructionenquirer.com/2022/03/11/british-steel-imposes-biggest-ever-instant-price-hike/

The builder has requested that they pass this price increase on to the client. Very little choice I think.

This is not boding well for the construction industry........

Aluminium is interesting (not as volatile) but up 100% on price 12 months ago.

Think of all those die-castings and electric cars.

[Giraffe]

51 minutes ago, kibuc said:

 decisions have less to do with business and more with politics nowadays.

I would say that both businesses and politicians now follow the woke social media mobs. Very disturbing. 

[marceau]

23 minutes ago, Sasquatch said:

Just been copied in to a formal announcement from British Steel from a building contractor. With immediate effect, British Steel is increasing the price of new orders by £250/tonne.

https://www.constructionenquirer.com/2022/03/11/british-steel-imposes-biggest-ever-instant-price-hike/

The builder has requested that they pass this price increase on to the client. Very little choice I think.

This is not boding well for the construction industry........

The state needs to step up. Unfortunately the state is in an ideological hole designed by its enemies and isn't even capable of telling men and women apart, let alone engaging in a massive and complex reindustrialisation effort.

We are in deep, deep shit.

[HousePriceMania]

Petrol prices at all time highs...Shell and BP falling.

 

WTF is going on ?

[Chewing Grass]

Just now, HousePriceMania said:

Petrol prices at all time highs...Shell and BP falling.

 

WTF is going on ?

Doesn't matter how expensive your 'product' is if nobody can afford to buy it and your costs are going through the roof on a plant/factory that is designed around a certain throughput.

[Lightscribe]

1 hour ago, kibuc said:

There's no telling what HL is going to do. The share is still traded on LSE and will keep getting traded even after its removal from the index, unless there's a separate decision taken by LSE to suspend it. However, liquidity might take a hit. Whether it would be enough for HL to take action is anyone's guess, I reckon as long as the share is tradeable on a major exchange like LSE they would be denying themselves business by not allowing to trade it, but those decisions have less to do with business and more with politics nowadays.

I suspect that they will do what they did with XBT Bitcoin and ETH trackers on HL. Obviously having funds like that available in an ISA tax wrapper when trillions of QE was going to be flowing into speculation and tech wasn’t going to be ideal.

That got knocked on the head pretty sharpish and you was only able to sell and not buy.

 

[Lightscribe]

4 minutes ago, HousePriceMania said:

Petrol prices at all time highs...Shell and BP falling.

 

WTF is going on ?

Stagflation fears (rate rises Fed meeting today) and wokeism in the US of dems bringing in windfall taxes on oil.

https://www.forbes.com/sites/davidblackmon/2022/03/12/democrats-file-new-tax-on-alleged-windfall-profits-by-big-oil/?sh=e0320f97a86e

[Yadda yadda yadda]

Just noticed that the Hong Kong Hang Seng closed down over 1,000 points this morning at 19,500. Down over 10,000 from a year ago. Just how bad is the Chinese economy?