Credit deflation and the reflation cycle to come.

[Don Coglione]

11 minutes ago, kibuc said:

Aren't you guys worried it might get smashed in the broader sell-off? That's the main reason I've been holding off so far.

For a long time, yes. The broad indices always looked toppy to me and I was scared. Then, thanks largely to durhamborn's original thread on HPC, I started to look at the composition of those indices and the movement of individual shares. Assuming you buy into the notion that infrastructure and energy security are where the money is going to be targetted, taking Centrica as a well-used example, its share price is currently under 40% of where it was 5 years ago. If the markets take a 50% whacking, is Centrica going to get halved from where it is today? Possibly, of course, but I should have thought it more likely that other companies are likely to take the majority of the beating, looking at their P/E ratios and what underscores them. FAANGs? HSBC?

[kibuc]

OK, thanks for your input guys. Considering I'm planning to sell everything and seek safety in IBTL when things start getting ugly, maybe it's worth for me taking a punt at another potential winner in the meantime...  Probably after a correction, though  Insider trading is always nice, but it looks like the market might have overreacted, unless there are other factors in play.

[Yellow_Reduced_Sticker]

12 hours ago, sancho panza said:

https://uk.investing.com/indices/arca-gold-bugs-components

HUI components in the red to 3% today

New Gold  -20%

Couer/Hecla/Eldorado  -8%

Goldcorp/Barrick/Agncio  -6%

 

Newmont led the board at  +0.91%

Just cause they're cheap don't mean they won't drop some more.

...Oh F**K UP IN SMOKE my 8% Eldorado paper profit of 2 days ago

[Yellow_Reduced_Sticker]

2 hours ago, Barnsey said:

Just like the UK, prime areas falling first (Smart money), whilst the rest of the country remains reasonably buoyant for now (dumb money).

So, taking a step back and trying to look at where we are, to recap:

- US Q2 GDP out today will likely be amazing, but the peak, and temp boost stocks until Oct-ish

- US avg home price now 8.4% above 2007 peak

- Facebook share price saw the biggest 1 day fall in history, another FANG, Netflix, also fell considerably a few weeks back.

- Yuan continuing to weaken (13 month low), no end in sight of trade war between US and China 

- In UK, households spent more than they earned for first time in 30 years (!), debt fuelled spending soaring since 2016 to record levels

- Gold and Silver continuing to take a bit of a hit

- ECB looks like it'll never raise, despite wanting to, GDP forecasts cut

- Yield curve already flattening again despite Trump's critisms of Fed aggressively raising

- US loan covenant protections now at record weakest level

- Japan still stuck in a rut

- Momentum building for US-Iran conflict Aug/Sep

Otherwise all hunky dory! 

 

YES ...sounds all ROSEY ...what could possibly go WRONG

EDIT: BTW, INFA has been on my watch list to go down so i can move in, no such luck and with you guys going on about INFA today ...its GOING UP as ya speak!

[Barnsey]

On 23/07/2018 at 21:01, DurhamBorn said:

With fracking yes i do.Centrica have pretty much quietly moved the business into distributed energy and they just need to flog off their 20% stake in the nuclear business to clean the balance sheet of debt.Power will be coming from wind and solar right across the country.Highly likely lots of small gas plants fed from fracking will provide the emergency/float alongside nuclear.Scotland is pretty much made for producing power from wind.I think jumping ahead a full cycle and cars will be being charged during the night from wind power.Prices will move up and down all the time depending on the load and the companies in the middle of the turbines/solar and customer will make a killing.

Transport,energy and telcos are probably going to be the big winners in the next long term cycle (and mining/industrial,but with ups and downs) .A bigger part of the GDP pile is going their way.Ironic that they are mostly the lowest rated sectors in the market right now.

 

On 24/07/2018 at 00:37, Castlevania said:

Do you think we’ll go down the fracking route? I reckon we’ll need a good downturn to win the argument.

 

On 24/07/2018 at 09:26, DurhamBorn said:

Yes i do and i agree i think a downturn will be when it gets going,or maybe the recovery cycle when gas prices move north at a fast rate.

Bingo!

Twitter stock price down 15% pre-market open.

[Barnsey]

There we have it, Q2 GDP slightly lower than expectations at 4.1%.

[kibuc]

After all that chest-thumping, I expected the market to react a bit more strongly. Personal consumption exceeding expectations = people rushing to buy exported goods before tariffs kick in?

[Barnsey]

Yield curve continuing to flatten slightly as a response, suggests this is a blip and won't likely be sustained, bring on October.

[Festival]

4 hours ago, Solzhenitsyn said:

A broader sell-off could be years away though. Yield curve for instance looks like it could be 6-months away from inverting at least - then typically have a delay between timing of inversion and recession. The economy is in a bad way, but the markets still look strong, for now. We have no way of knowing the timing, but just to be cautious and looking out for it. That's a lot of potential growth to miss out inbeteween. Think of it this way. Had you bought in a .25p, you'd now have a close to 200% buffer against any future falls (price is 0.73 as I type).

The average delay between a yield curve inversion in the US and a stock market downturn is 8 months I believe but it has been longer and was nearly 18 months last time I think Feb 2006 to October 2007. We should reach inversion with a 25 bps rate rise in the US this September? Does that mean we are circa a year away from the downturn and why DB thinks there is still room for gold to run and the dollar to fall between now and then?

[kibuc]

6 hours ago, kibuc said:

Apparently their CEO doubled his stake, buying over £1mil worth of shares recently. No wonder everyone and their dog is jumping on it. Amazing call by @Solzhenitsyn at 0.25, well done.

I cannot edit, so to clarify: it was around 1.8mil shares, so somewhat short of £1mil. Bloody GBX got me again. Then again, £1m purchase with a £7.7m market cap never made sense.

[Democorruptcy]

6 hours ago, kibuc said:

Apparently their CEO doubled his stake, buying over £1mil worth of shares recently. No wonder everyone and their dog is jumping on it. Amazing call by @Solzhenitsyn at 0.25, well done.

Did he? Got a link to that?

I looked at director deals yesterday but might be looking in the wrong place, saw him buying 86k to take his holding to 205k

https://www.sharesmagazine.co.uk/shares/share/INFA/director-deals

[kibuc]

1 minute ago, Democorruptcy said:

Did he? Got a link to that?

I looked at director deals yesterday but might be looking in the wrong place, saw him buying 86k to take his holding to 205k

https://www.sharesmagazine.co.uk/shares/share/INFA/director-deals

Yeah, those numbers are off by a factor of 100. I copied it thoughtlessly from a source that made the same mistake of taking GBX for GBP.

[DurhamBorn]

1 hour ago, Festival said:

The average delay between a yield curve inversion in the US and a stock market downturn is 8 months I believe but it has been longer and was nearly 18 months last time I think Feb 2006 to October 2007. We should reach inversion with a 25 bps rate rise in the US this September? Does that mean we are circa a year away from the downturn and why DB thinks there is still room for gold to run and the dollar to fall between now and then?

I think the inversion would of happened if the Fed hadnt been messing around with the short end.I still think we see gold at $1450-$1560 and expect the dollar to go down to at least 86.Everyone is a dollar bull of course.Some good numbers from Yamana Gold today,up around 12% at the moment.Some of the miners have fantastic technical set ups if gold can just turn higher.

[leonardratso]

meanwhile, NGD takes another dive today, pah.

a good 30% down now, probably no worse than weve seen on other shares, but its quite a shock when it takes over 2 days, can be quite deceptive when its ove 2 months or even 2 years, as in 'the new normal'.

No worries, looks like the FANG's are up for a thumping as well, even amazon lost its gains today, tesla too.

[Bear Hug]

BT and Vodafone did well today. 

My random (inspired by this thread) gold miners portfolio also went up (unlike GDXJ).  So, I am outperforming ETF (for one day: )

Only regret so far is not putting a chunk away in IBTL.  Feel like I missed that particular bus now.

[Democorruptcy]

32 minutes ago, Bear Hug said:

BT and Vodafone did well today. 

My random (inspired by this thread) gold miners portfolio also went up (unlike GDXJ).  So, I am outperforming ETF (for one day: )

Only regret so far is not putting a chunk away in IBTL.  Feel like I missed that particular bus now.

Re VOD I expected the 16:35pm HL large trade to be a buy today because the price increased. Seems strange it was yet another huge sell 20m shares for £36m about 25% of the daily volume https://www.hl.co.uk/shares/shares-search-results/v/vodafone-group-plc-usd0.20-2021

Re IBTL although up this year, it's back to where it started in 2015 https://www.hl.co.uk/shares/shares-search-results/i/ishares-iv-plc-usd-treasury-bond-20-year sterling v USD down from 1.51 to 1.31 since then https://uk.reuters.com/business/currencies/quote?srcAmt=1&srcCurr=GBP&destAmt=&destCurr=USD

[Bear Hug]

 

22 minutes ago, Democorruptcy said:

Re VOD I expected the 16:35pm HL large trade to be a buy today because the price increased. Seems strange it was yet another huge sell 20m shares for £36m about 25% of the daily volume https://www.hl.co.uk/shares/shares-search-results/v/vodafone-group-plc-usd0.20-2021

Re IBTL although up this year, it's back to where it started in 2015 https://www.hl.co.uk/shares/shares-search-results/i/ishares-iv-plc-usd-treasury-bond-20-year sterling v USD down from 1.51 to 1.31 since then https://uk.reuters.com/business/currencies/quote?srcAmt=1&srcCurr=GBP&destAmt=&destCurr=USD

That's interesting because there is also ~£36m "sell" on BT at the same time, and also for a round price.  I have no idea what it all means.  Institutional investor buying some "discounted" Twitter today?

[Bear Hug]

5 hours ago, DurhamBorn said:

I think the inversion would of happened if the Fed hadnt been messing around with the short end.I still think we see gold at $1450-$1560 and expect the dollar to go down to at least 86.Everyone is a dollar bull of course.Some good numbers from Yamana Gold today,up around 12% at the moment.Some of the miners have fantastic technical set ups if gold can just turn higher.

 

20 minutes ago, Democorruptcy said:

Re IBTL although up this year, it's back to where it started in 2015 https://www.hl.co.uk/shares/shares-search-results/i/ishares-iv-plc-usd-treasury-bond-20-year sterling v USD down from 1.51 to 1.31 since then https://uk.reuters.com/business/currencies/quote?srcAmt=1&srcCurr=GBP&destAmt=&destCurr=USD

I struggle to reconcile these 2 views.  Is dollar going to fall but not just yet?  

Or is dollar going to fall but pound will fall even more?

[leonardratso]

1 minute ago, Bear Hug said:

 

That's interesting because there is also ~£36m "sell" on BT at the same time, and also for a round price.  I have no idea what it all means.  Institutional investor buying some Twitter today?

are they not end of day clearing auctions?

 

[Bear Hug]

On 26/07/2018 at 00:25, Democorruptcy said:

...

Is 16:35 the time the days buys/sells are netted off, perhaps by HL themselves?

At exactly the same time a BT £19m buy, Centrica £8m sell, Lloyds £25m Buy

 

On 26/07/2018 at 08:06, Lavalas said:

LSE closes at 16:30 so maybe?

 

1 hour ago, leonardratso said:

are they not end of day clearing auctions?

I should have read previous pages - this seems to have already been covered.  Appears to correspond to "Closing Price Crossing Session (16:34:31 - 16:40:00)" as per https://www.daytradetheworld.com/wiki/lse/

Apologies for moving slightly off-topic, I'll ponder why the biggest trades happen on close elsewhere.

[Green Devil]

Some interesting points in this video about the current state of the economy and how we got to where we are.

Personally, I dont agree with the goldbugs selling their gold line, and the inveitable collapse, but DYOR.

http://www.veoh.com/watch/v102298173txrYMYsH

[Barnsey]

8 hours ago, Bear Hug said:

I struggle to reconcile these 2 views.  Is dollar going to fall but not just yet?  

Or is dollar going to fall but pound will fall even more?

I'm only guesstimating here, but I think the DXY will turn once we get our inverted yield curve and the Fed hints at easing off the gas, which could be as early as Q4 2018, depends on whether Q3 GDP will benefit (or not) from pre-tariff inventory build expenditure as Q2 has, and if the consumer has any remaining available credit left. At that point I'd think Gold really starts climbing, Silver too possibly.

Due to Brexit chaos I wouldn't expect to see the £ strengthen much against the dollar from here. As @DurhamBorn points out, euro and yen likely to strengthen as this unfolds (only temporarily, especially the euro), once the recession kicks in globally, the usual safe haven flight to the $ will apply and thus DXY/treasuries will strengthen considerably until the dust settles and QE printy panic starts.

Gold and Silver fall as people sell everything to try and stay afloat, and then (hopefully) we see Silver start to climb as QE gets pumped directly into a modern industrial revolution.

My very simplistic view of what may pan out, do I really know what I'm on about, not too sure 

[DurhamBorn]

16 minutes ago, Barnsey said:

I'm only guesstimating here, but I think the DXY will turn once we get our inverted yield curve and the Fed hints at easing off the gas, which could be as early as Q4 2018, depends on whether Q3 GDP will benefit (or not) from pre-tariff inventory build expenditure as Q2 has, and if the consumer has any remaining available credit left. At that point I'd think Gold really starts climbing, Silver too possibly.

Due to Brexit chaos I wouldn't expect to see the £ strengthen much against the dollar from here. As @DurhamBorn points out, euro and yen likely to strengthen as this unfolds (only temporarily, especially the euro), once the recession kicks in globally, the usual safe haven flight to the $ will apply and thus DXY/treasuries will strengthen considerably until the dust settles and QE printy panic starts.

Gold and Silver fall as people sell everything to try and stay afloat, and then (hopefully) we see Silver start to climb as QE gets pumped directly into a modern industrial revolution.

My very simplistic view of what may pan out, do I really know what I'm on about, not too sure 

Thats exactly how i see it.The Yen,Euro later,and for now even the commod currencies like the CAD and AUS strengthen.I see dollar 96.5 top,down to 86,maybe even 74 if the full cycle played out in normal terms,if a recession turns quickly to a debt deflation then the dollar turns up then.There is a chance sterling could run higher at points.The PM complex is a coiled spring.Results slightly better than expected are seeing big moves up,and worse than expected big moves down.Once gold gets moving there should be some very big moves up in the miners.As ever a good spread is needed as where i fully expect some to 2 of even 3 x+ there will be laggards that could end up down.

 

[Yellow_Reduced_Sticker]

4 hours ago, DurhamBorn said:

Thats exactly how i see it.The Yen,Euro later,and for now even the commod currencies like the CAD and AUS strengthen.I see dollar 96.5 top,down to 86,maybe even 74 if the full cycle played out in normal terms,if a recession turns quickly to a debt deflation then the dollar turns up then.There is a chance sterling could run higher at points.The PM complex is a coiled spring.Results slightly better than expected are seeing big moves up,and worse than expected big moves down.Once gold gets moving there should be some very big moves up in the miners.As ever a good spread is needed as where i fully expect some to 2 of even 3 x+ there will be laggards that could end up down.

 

 

@DurhamBorn So lets say GOLD gets going and hits around $1500, would YOU DB sell ALL your mining companies at this point if they'd had a decent run-up?

 

Then once the WORLD-WIDE panic & recession starts...you'd wait for the dust to settle ...would YOU move back into the mining companies at this point? Sorry to ask again but a bit confused with the other post CHEERS!

 

BTW, nipped into tesco during the thunder-storm yesterday evening on my push-bike  lovely & cool a drop in temp for a change as we've had HEAT to 34c here!

 

Couldn't believe the amount of EU vultures queing by the reduced fridge so i mosey on over to another section AND picked up all remaining 7 boxes of PUKKA motherkind pregnancy tea reduced from £1.99 to 50p!

 

The sell by date is stamped to 2020 so obviously a lost leader and the company f**ked up on the marketing for pregnant women, but i can tell ya thia tea has numerous organic fruit herbs and is DELICIOUS!

 

 

when i went to the check-out (near reduced fridge) I could see they put the reduced food out AND it was a FREE for all as everybody was scrambling to grab stuff so i rush over to join them! I mean you would not believe this place it is HILARIOUS ...i should do a video and post it here, i mean some of these people are like mental patients! Still i expect some of them think the same about ME

 

Have a GREAT week-end folks, toodle pip...

[Nicolas Turgeon]

On 26/07/2018 at 16:17, DurhamBorn said:

On New Gold id be happy to buy here for one of the more risky stocks,but it would be a smaller holding within a portfolio of the complex.Its probably teething problems with the mill etc the days when operating show 22k tonnes through the and thats decent.Market will be worried as the Rainy River project has cost a lot of capital and the companies future depends on it.Results days are always interesting in gold mining stocks,Yamana and Eldorado usually upset everyone at theirs and they go tomorrow i think,could they please the market once?

 

The results are in with Yamana up 9% over Friday and Eldorado up 1% .  New Gold fell another 12% on top of the 20% drop from the previous day.  Like you say DurhamBorn, a good spread is needed if you're buying these volatile PM's!

It looks like Sandstorm Gold and Endeavour Silver are due to declare some results late next week. The question is .... will they be doing a NGD or a YRI ?!?!?!