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There seems to be a liquidity crisis developing


The Masked Tulip
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The Masked Tulip

According to the financial guys on a private finance forum that I frequent - still have no idea how I am there - they seem to think that there are signs of a liquidity crisis developing.

Something to do with margin debt and thoughts that someone - a hedge fund, bank, property or pension fund - is in trouble.

They said that bonds, oil and markets all being hit indicate this - someone or someones needing to raise cash.

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One percent
28 minutes ago, The Masked Tulip said:

According to the financial guys on a private finance forum that I frequent - still have no idea how I am there - they seem to think that there are signs of a liquidity crisis developing.

Something to do with margin debt and thoughts that someone - a hedge fund, bank, property or pension fund - is in trouble.

They said that bonds, oil and markets all being hit indicate this - someone or someones needing to raise cash.

Are their discussions as wide ranging, profound and as entertaining as ours.

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The Masked Tulip
1 hour ago, One percent said:

Are their discussions as wide ranging, profound and as entertaining as ours.

 

No. I do my bit but they are mostly rich yanks and it goes over their heads.

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The Masked Tulip
1 hour ago, spunko2010 said:

Yes, it has beem mentioned that it could be China related. Fear of deflation has also suddenly reared its head in the past 48 hours. Also US Fed still threatening to raise rates in June. Someone could be trying to sell up before June comes. No one knows exactly but something is going on.

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One percent
1 minute ago, The Masked Tulip said:

Yes, it has beem mentioned that it could be China related. Fear of deflation has also suddenly reared its head in the past 48 hours. Also US Fed still threatening to raise rates in June. Someone could be trying to sell up before June comes. No one knows exactly but something is going on.

Whatever it is, you can be sure that the little people will catch the fallout. Again. 

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Chewing Grass

Well if there is less demand for cars there will be less demand for chinese electronicery as well. I think the phone bubble has burst and other credit driven areas such as housing have been effectively toast for a while.

Many turkeys are coming home to roost.

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The Masked Tulip
Just now, Chewing Grass said:

Well if there is less demand for cars there will be less demand for chinese electronicery as well. I think the phone bubble has burst and other credit driven areas such as housing have been effectively toast for a while.

Many turkeys are coming home to roost.

 

Oil looks as if it is heading back down again to low 40's.

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Chewing Grass
1 minute ago, The Masked Tulip said:

 

Oil looks as if it is heading back down again to low 40's.

Not good for Saudi then, what about the supposed float of Aramco?

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The Masked Tulip
Just now, Chewing Grass said:

Not good for Saudi then, what about the supposed float of Aramco?

 

Well, the Saudi prince who came up with the idea said 2 days ago that that oil will probaby go no higher than 55 bucks - not the brightest thing to say.

Btw, when they float Aramco I bet those sheiks will buy up the other half of London.

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One percent
10 minutes ago, The Masked Tulip said:

 

Well, the Saudi prince who came up with the idea said 2 days ago that that oil will probaby go no higher than 55 bucks - not the brightest thing to say.

Btw, when they float Aramco I bet those sheiks will buy up the other half of London.

And if our government had any sense they would slap a massive tax on foreign ownership of property or anything else uk based. 

It would certainly win votes 

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The Masked Tulip
Just now, One percent said:

And if our government had any sense they would slap a massive tax on foreign ownership of property or anything else uk based. 

It would certainly win votes 

 

I suspect there is too much money for these former politicians to make from such people.

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One percent
1 minute ago, The Masked Tulip said:

 

I suspect there is too much money for these former politicians to make from such people.

For themselves personally yes.  I also thought when I was composing that, that they would not want reciprocal arrangements as then they may get taxed by other countries on their multiple foreign homes. Scratching backs amongst the elite and all that. 

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1 hour ago, The Masked Tulip said:

 

Oil looks as if it is heading back down again to low 40's.

Goodie. A 2p a litre drop at the pumps in 2 weeks time, I'm already deciding what to spend the extra cash on.

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Green Devil

Can't be. Dow limps to new record according to.BB. 21k again. Usually is there is liquidity everything drops at the same time as margin calls are hit. 

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  • 4 weeks later...
Frank Hovis
52 minutes ago, The Masked Tulip said:

He's a lot more nuanced than that in the article:

 

Tech stock over-valued?  Yup.

Quote

Who knows when this will happen? But the omens are telling me that it can’t be too far away. After all, the key measure of volatility, the VIX, is at all time low levels, indicating that investors are far too complacent about market risk. PE ratios are high, particularly in the US, and especially for boring, slow growing so-called consumer staple stocks. And don’t get me started on the FANG tech stocks, which are absolutely priced to a perfection that doesn’t and won’t exist.

Amazon is a great business, but its valuation beggars belief; Facebook and Alphabet can carry on growing, but I am certain they will end up being regulated, crimping profits; and Apple and its shiny repertoire of gewgaws, can surely only pedal away for a while longer. Toys get discarded, and new ones come along.

I also think he's right on currency:

Quote

Well, sterling looks undervalued and could rise another 5-10% against the dollar. The Euro, doomed at some date in the future, remains a speculative buy (see my last two letters) against the dollar, but not against the pound.

 

And his message about buying things like medical / helathcare stocks is something I did ages ago (not everything but a decent chunk at the time) as that's where the future money is.

I think a correction is due, on one portfolio I'm up £15k in the last three or four weeks which is just silly, but I''m not a sufficiently active investor to get in or out at the right time so I'll ride it out and keep collecting the dividends.

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