Credit deflation and the reflation cycle to come (part 5)

[Axeman123]

In terms of black swans Tether or Binance are strong contenders, recent fed talk about wanting crypto not to destabilise the banking system shows they are taking it seriously. The question remaining though is how exposed is the legacy ("real") financial economy to crypto?

Recent gatings of REITs seem to be snowballing, and certainly have systemic threat written all over it. I wonder if that will be the "...until something breaks" the fed have been waiting for?

[Red Debt Redemption]

On 04/01/2023 at 08:33, Errol said:

What's the best Middle East focused ETF or investment trust?

Jema? 

[Red Debt Redemption]

On 04/01/2023 at 12:04, jamtomorrow said:

100% this - it's the main reason I'm hanging onto the old Landy (although I'd quite like to trade "down" for an N/A diesel at some point, because ECU + piezo injectors + turbo looks increasingly like a liability in terms of supply-chain risk and/or ability to self-overhaul)

Zooming out, it's fascinating seeing a system collapse up close, and the sequence in which stuff unravels. It's looking like the "real" capital of the nation (roads, energy infrastructure, health of the working age population) needs to be consumed before the masses finally let go of their prosperity LARP (the massive TVs, the nearly-new car on the drive). Maybe house prices will be the last to go if that's how it unravels.

Decl: I'm short lowered suspension and low-profile tyres, long gigantic sidewalls and sump guards

Who makes n/a diesels apart from 90's pugs?

Some simple to maintain n/a petrol still about even some of the newer stuff.

[Stuey]

8 hours ago, M S E Refugee said:

I watched the latest Market Sniper video and he thinks that there will be a massive deflationary event (possibly March)where everything goes down including commodities but he doesn't think they will go down to the lows of March 2020.

He is long term bullish on PM's and Commodities so I will continue to hold through any BK.

 

Gas for summer23 (Apr to Sep) deliveries has halved in price in barely a few weeks. Still above the usual "crisis level" of £1/therm but another two-three weeks of mild & windy weather should see this breached. 

The domestic government price cap is looking like it won't be needed as the incumbent (as still-existing) Ofgem one could be below it.

Oil is at one year lows.

Energy efficiency has become more embedded so costs of production will be lower like-for-like. 

Interest rates falling in 2023 - how I got abused for this irrational and contrary thinking just a month or two back 

Last chance to Buy The Dip in the housing market. 

[Lightscribe]

6 hours ago, Axeman123 said:

In terms of black swans Tether or Binance are strong contenders, recent fed talk about wanting crypto not to destabilise the banking system shows they are taking it seriously. The question remaining though is how exposed is the legacy ("real") financial economy to crypto?

Recent gatings of REITs seem to be snowballing, and certainly have systemic threat written all over it. I wonder if that will be the "...until something breaks" the fed have been waiting for?

I’ve said on this thread for years, regulation will break crypto, it’s coming and it’s intentional that’s why my call was BTC below $10k even when it was at $60k.

That paper digital wealth served its purpose of expanding the technology of the ISO compliant crypto infrastructure of CBDCs, its can now be destroyed. Imagine if it had flowed into physical gold/silver.

Edited January 6, 2023 by Lightscribe

[Lightscribe]

25 minutes ago, Stuey said:

Interest rates falling in 2023 - how I got abused for this irrational and contrary thinking just a month or two back 

Last chance to Buy The Dip in the housing market. 

Yes energy, oil and gas all drops in a recession (less demand for stuff) nothing magical or anything to do with Wingnut Sunak as much as these bastards claim credit.

Mortgage rates will hardly move however (e.g. a percent or so drop), they are based on swap rates, and will still be multiple times what they were in 20/21. This will cause contagion in the housing market by itself with 100,000’s due to remortgage this year,

As much as the BoE and the political class can pull the wool over the public eyes, money sees straight through it. A secondary inflationary spike is coming.

Buy the dip in energy not houses, house prices are intrinsically linked to debt, credit availability and costs. These will remain high and house prices are only going one way, like the Titanic we’ve only just hit the iceberg, it’s the longest lag indicator due to the sheer amount of vested interest in the game.

Edited January 6, 2023 by Lightscribe

[jamtomorrow]

7 hours ago, Red Debt Redemption said:

Who makes n/a diesels apart from 90's pugs?

Dunno - I'm thinking more in terms of something like an early/mid-80's ex-MOD Series. But they seem to be attracting a bit of classic premium so I'm sitting on my hands until there's signs of greater sanity in the classics market.

Zooming out again ... I have a few wishlist items like this waiting for the last of the QE mania to fizzle (jobs on the house, inflation stocks I didn't snap up in 2020). I suppose they're effectively part of the asset allocation in the "credit deflation event thesis" part of my portfolio - sat mostly in cash, crocodile in the weeds etc. But I'm also well-positioned in inflation-loving assets.

What I don't have is much - if anything - in the middle. I seem to have ended up with a "polarized portfolio".

[No One]

2 hours ago, Lightscribe said:

Yes energy, oil and gas all drops in a recession (less demand for stuff) nothing magical or anything to do with Wingnut Sunak as much as these bastards claim credit.

Mortgage rates will hardly move however (e.g. a percent or so drop), they are based on swap rates, and will still be multiple times what they were in 20/21. This will cause contagion in the housing market by itself with 100,000’s due to remortgage this year,

As much as the BoE and the political class can pull the wool over the public eyes, money sees straight through it. A secondary inflationary spike is coming.

Buy the dip in energy not houses, house prices are intrinsically linked to debt, credit availability and costs. These will remain high and house prices are only going one way, like the Titanic we’ve only just hit the iceberg, it’s the longest lag indicator due to the sheer amount of vested interest in the game.

Didint it come out form the FOMC meeting that they will IR5.5% for prolonged time? Maybe JP knows about double inflation spikes and to prevent it he wants to keep rates at 5% for a long time rather than doing the yo-yo.

[Plan-b]

Sustained housing falls now, having to publish this by the Prime Pumpers at the Halifax must have caused some sleepless nights and anxious moments.

[DurhamBorn]

9 hours ago, Axeman123 said:

In terms of black swans Tether or Binance are strong contenders, recent fed talk about wanting crypto not to destabilise the banking system shows they are taking it seriously. The question remaining though is how exposed is the legacy ("real") financial economy to crypto?

Recent gatings of REITs seem to be snowballing, and certainly have systemic threat written all over it. I wonder if that will be the "...until something breaks" the fed have been waiting for?

I think Crypto has zero affect on the economy,its all worthless in the end and as it sells off it will go into other assets,bag holders will lose everything,but it just means they are left behind in life as other move forward,crypto is a 100% fraud and scam at the moment.I think REITs could be a problem.The most likely area for me is a big counter party failure on interest rate derivative swaps.If that market locks as big corporates try to refinance big debts it could set off a lot of pain.

[Lightscribe]

32 minutes ago, No One said:

Didint it come out form the FOMC meeting that they will IR5.5% for prolonged time? Maybe JP knows about double inflation spikes and to prevent it he wants to keep rates at 5% for a long time rather than doing the yo-yo.

https://12ft.io/proxy?q=https%3A%2F%2Fwww.ft.com%2Fcontent%2Fa5c50f32-1188-4f13-8939-06a40c0904e5
 

Yeah it will just really be the UK on the shorter terms fiddling around the edges.

[Long time lurking]

11 hours ago, M S E Refugee said:

I watched the latest Market Sniper video and he thinks that there will be a massive deflationary event (possibly March)where everything goes down including commodities but he doesn't think they will go down to the lows of March 2020.

He is long term bullish on PM's and Commodities so I will continue to hold through any BK.

 

This is why Sunak pledged to cut inflation to half of what it is he's doing fuck all in reality as demand destruction is well underway 

[MrXxxx]

21 hours ago, Noallegiance said:

She's now stuck with a place she doesn't want to/can't sell but can't afford to keep either.

She can always sell it BUT she will have to be prepared to 'give it away'!

[DurhamBorn]

3 hours ago, Lightscribe said:

Yes energy, oil and gas all drops in a recession (less demand for stuff) nothing magical or anything to do with Wingnut Sunak as much as these bastards claim credit.

Mortgage rates will hardly move however (e.g. a percent or so drop), they are based on swap rates, and will still be multiple times what they were in 20/21. This will cause contagion in the housing market by itself with 100,000’s due to remortgage this year,

As much as the BoE and the political class can pull the wool over the public eyes, money sees straight through it. A secondary inflationary spike is coming.

Buy the dip in energy not houses, house prices are intrinsically linked to debt, credit availability and costs. These will remain high and house prices are only going one way, like the Titanic we’ve only just hit the iceberg, it’s the longest lag indicator due to the sheer amount of vested interest in the game.

 

Some countries are way ahead and have positive rates.The best setup for me is Brazil,inflation below.Interest rates are high due to worries the new government will increase inflation through fiscal spending,but setup is for foreign currency to flow in 

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Annual
2022	10.38%	10.54%	11.30%	12.13%	11.73%	11.89%	10.07%	8.73%	7.17%	6.47%	5.90%

[M S E Refugee]

With regard to the Market Sniper calling for a BK in March I think I prefer my portfolio to Warren's.

41% of his portfolio in Apple looks a bit risky.

https://hedgefollow.com/funds/Berkshire+Hathaway

What do you good people think of the Oracle of Omaha's portfolio?

I prefer to listen to the Deity of Durham!

 

Edited January 6, 2023 by M S E Refugee

[Long time lurking]

10 hours ago, Red Debt Redemption said:

Who makes n/a diesels apart from 90's pugs?

Some simple to maintain n/a petrol still about even some of the newer stuff.

The simple answer is no one since 1995 ish that's when low blow turbo's became a thing as they were needed to reduce emissions along with exhaust gas recirculation

The best case for simplicity is the first vw tdi's with rotary pumps pre PD engines and the later common rail 

You have the best of both worlds electronic control but low pressure Bosch ve rotary pumps they are pretty basic regarding ECU controls 

If you can't find one the next best bet is a well looked after late vw PD engine  2009 ish was about the last of them they have no dpf add blue shit which is the main ball ache along with injectors on common rail engines the later the car the more important it is to look after the fule side regular filter changes are a must forget the long service intervals the manufacturer recommend 6-8k max just like it was for decades they want the things to die early with 15-20k service intervals 

 

 

[Transistor Man]

18 minutes ago, M S E Refugee said:

41% of his portfolio in Apple looks a bit risky.

What do you good people think of the Oracle of Omaha's portfolio?

He will do fine, as always.

Don't forget: those are just his/ Berkshire's share holdings, not the utilities, power generators, trains, shoe shops, candy stores, insurance, precision engineering companies, .... he owns outright.  

[Democorruptcy]

25 minutes ago, M S E Refugee said:

With regard to the Market Sniper calling for a BK in March I think I prefer my portfolio to Warren's.

41% of his portfolio in Apple looks a bit risky.

https://hedgefollow.com/funds/Berkshire+Hathaway

What do you good people think of the Oracle of Omaha's portfolio?

 

I think the filing date is 30th Sept.

[leonardratso]

38 minutes ago, Long time lurking said:

The simple answer is no one since 1995 ish that's when low blow turbo's became a thing as they were needed to reduce emissions along with exhaust gas recirculation

The best case for simplicity is the first vw tdi's with rotary pumps pre PD engines and the later common rail 

You have the best of both worlds electronic control but low pressure Bosch ve rotary pumps they are pretty basic regarding ECU controls 

If you can't find one the next best bet is a well looked after late vw PD engine  2009 ish was about the last of them they have no dpf add blue shit which is the main ball ache along with injectors on common rail engines the later the car the more important it is to look after the fule side regular filter changes are a must forget the long service intervals the manufacturer recommend 6-8k max just like it was for decades they want the things to die early with 15-20k service intervals 

 

 

was looking at simple newer cars last night strangely enough, theres really only 1 manufacturer who hasnt gone completely mad with electrics and small turbo engines that will probably blow up just as warranty expires, i think the yanks understand this or dont seem as blinded by getting 200bhp out of 1.2L. That seems to be mazda by the way - mazda petrols.

[Noallegiance]

I may have just watched a thing of interest.

I had the Investing.com page open to update the QoQ UK Housing Equity Withdrawal figure. It was due an hour ago. It stayed blank. I came off the page, went back to see if it updated and the data line had disappeared completely.

The data is estimated by taking the difference between net lending secured on dwellings and households' gross investment in housing. 

A reading weaker than expected in bearish for GBP.

Perhaps sticking it out on the same day as another leg down in construction PMI wasn't tasting too good. I'm going to assume until a reading is provided that it was a dire figure.

For contextual reference I have provided the historic 15 year chart below showing that out of the previous 55 quarters since the 08 crash, only 4 have see more equity put into housing than withdrawn. Which is pretty astonishing.

As you can see at the bottom of the screenshot the entry that was supposed to be for Jan 6th 9.30am is now Jan 9th.

What credit bubble?

 

Or it may be nothing. Perhaps there's a power cut at the BoE...

Edited January 6, 2023 by Noallegiance

[Boglet]

57 minutes ago, Long time lurking said:

The simple answer is no one since 1995 ish that's when low blow turbo's became a thing as they were needed to reduce emissions along with exhaust gas recirculation

The best case for simplicity is the first vw tdi's with rotary pumps pre PD engines and the later common rail 

You have the best of both worlds electronic control but low pressure Bosch ve rotary pumps they are pretty basic regarding ECU controls 

If you can't find one the next best bet is a well looked after late vw PD engine  2009 ish was about the last of them they have no dpf add blue shit which is the main ball ache along with injectors on common rail engines the later the car the more important it is to look after the fule side regular filter changes are a must forget the long service intervals the manufacturer recommend 6-8k max just like it was for decades they want the things to die early with 15-20k service intervals 

 

 

I think a lot of it was always to do with making the cost of ownership look attractive to fleet buyers, who won't keep them long enough to give a shit about long term durability anyway.

I service my '03 2.0hdi pug (no DPF or DMF) every 8k latest (book is 12500) and it's still going strong at nearly 200,000

Edited January 6, 2023 by Boglet

[Long time lurking]

10 minutes ago, leonardratso said:

was looking at simple newer cars last night strangely enough, theres really only 1 manufacturer who hasnt gone completely mad with electrics and small turbo engines that will probably blow up just as warranty expires, i think the yanks understand this or dont seem as blinded by getting 200bhp out of 1.2L. That seems to be mazda by the way - mazda petrols.

Not diesels though turbo petrol cars are pretty reliable as long as you avoid direct injection which suffer from the inlet track filling up with carbon deposits 

The problem with all turbo cars is the turbo dies quickly if you fail to change the oil regularly 10-20 k service intervals are bollocks , that is why the longevity of modern engines are not what it used to be 20 years ago

[JMD]

11 hours ago, Red Debt Redemption said:

Jema? 

Hmm... That JEMA Trust (the old JPM Russian securities trust) is apparently paying 27% divi, and trading at 95% discount to nav.!!!             However those are HL stats so guessing are not to be taken as accurate?

The top listed holding at 89% is: JPM GPB liquidity LVNAV X (dist).   Does anyone know what that means?

https://www.hl.co.uk/shares/shares-search-results/j/jpmorgan-emerging-europe,-middle-east-and-afr

 

[leonardratso]

9 minutes ago, Long time lurking said:

Not diesels though turbo petrol cars are pretty reliable as long as you avoid direct injection which suffer from the inlet track filling up with carbon deposits 

The problem with all turbo cars is the turbo dies quickly if you fail to change the oil regularly 10-20 k service intervals are bollocks , that is why the longevity of modern engines are not what it used to be 20 years ago

the only thing saving my car is the fact i went from 20-25K a year to 1500-2500 miles a year for last 3 years, the engine isnt liking it much (short journeys) and i have to blast it out every 6 or so weeks to get the dpf light to go off, it usually starts trying to regen after 4 weeks but doesnt get the chance until i blast it out and waste a tenners worth of diesel on a pointless run up and down the motorway, im pretty sick of it. The only problem i saw with the normally asperated mazdas i was looking at was the fact i didnt like them, cx5 too big, cx30 meh, c3 even more meh, but then i discovered the c3 saloon, now that i think looks fairly good, plus no one wants saloons so they are a little cheaper. To be honest i might as well just keep running my old TDI running as long as possible, i wont be getting £20 a year tax again on anything, more like £185 is minimum, not to mention that the mileage drop has cut the insurance in half as well.

Edited January 6, 2023 by leonardratso

[Long time lurking]

9 minutes ago, Boglet said:

think a lot of it was always to do with making the cost of ownership look attractive to fleet buyers,

It's both as it's an easy sell as the buyer of a new car will almost certainly not be the owner at the end of the cars life 

A mate is a taxi driver they always get 350k plus out of VAG diesels just by regular servicing which was common whe they all had a recomended  6-8 k service interval