Credit deflation and the reflation cycle to come.

[Majorpain]

https://www.zerohedge.com/news/2018-10-17/mortgage-applications-collapse-19-year-lows

House price crash is on the way in the near future, the scale of mismanagement over the last 10 years is such that I don't think they are even going to get to 2.75% early next year before the wheels fall off.  5% on $200k average us home is a good chuck of average income, at 6 or 7% its going to cause serious problems at some point.

If I was on the committee I would be looking at how little Americans have been pushed to save (why bother when you got 0.25% interest and its inflated away) and exit stage right ASAP.

[sancho panza]

18 minutes ago, Majorpain said:

https://www.zerohedge.com/news/2018-10-17/mortgage-applications-collapse-19-year-lows

House price crash is on the way in the near future, the scale of mismanagement over the last 10 years is such that I don't think they are even going to get to 2.75% early next year before the wheels fall off.  5% on $200k average us home is a good chuck of average income, at 6 or 7% its going to cause serious problems at some point.

If I was on the committee I would be looking at how little Americans have been pushed to save (why bother when you got 0.25% interest and its inflated away) and exit stage right ASAP.

Another graph of note in there

[Barnsey]

1 hour ago, sancho panza said:

Housebuilders getting pummelled again.

Other interesting roll overs occuring

Intercontinental Hotels/LSE/Ashtead/Easyjet/Ferguson/Hargreaves/Schroders/Whitbread

Also noticeable that luxry goods manufacturers have topped out eg l'Oreal/LVMH/Burberry

https://www.investing.com/indices/investing.com-uk-100-components

 

It really is all rolling over now isn't it? Interesting to see business trip linked sectors (airlines/hotels) starting to show stress.

I think we're seeing some final bumps up and down in the US stock market towards the end of the year, I personally dont think $SPX will have much headroom above 3k, then just a matter of how low does it get before Jerome Powell reverses course, 2100, 1550?

If you're in need of some light reading, the IMF Global Stability Report is out, grim.

https://www.imf.org/en/Publications/GFSR/Issues/2018/09/25/Global-Financial-Stability-Report-October-2018

[Majorpain]

2 minutes ago, Barnsey said:

It really is all rolling over now isn't it? Interesting to see business trip linked sectors (airlines/hotels) starting to show stress.

I think we're seeing some final bumps up and down in the US stock market towards the end of the year, I personally dont think $SPX will have much headroom above 3k, then just a matter of how low does it get before Jerome Powell reverses course, 2100, 1550?

If you're in need of some light reading, the IMF Global Stability Report is out, grim.

https://www.imf.org/en/Publications/GFSR/Issues/2018/09/25/Global-Financial-Stability-Report-October-2018

I did read an interesting comment on an article on China, the economic reports are always more positive than the reality, so if 1/3 house price drops and widespread defaults on bonds are being reported, how bad are things really getting under the hood?  Can they print their way out of this one and save the world again without destroying the Yuan?

[Barnsey]

@sancho panza Re: hotel stocks on the decline as a leading indicator, this from bls.gov

[sancho panza]

38 minutes ago, Barnsey said:

It really is all rolling over now isn't it? Interesting to see business trip linked sectors (airlines/hotels) starting to show stress.

I think we're seeing some final bumps up and down in the US stock market towards the end of the year, I personally dont think $SPX will have much headroom above 3k, then just a matter of how low does it get before Jerome Powell reverses course, 2100, 1550?

If you're in need of some light reading, the IMF Global Stability Report is out, grim.

https://www.imf.org/en/Publications/GFSR/Issues/2018/09/25/Global-Financial-Stability-Report-October-2018

You've put your finger on it there Barnsey.It's what's rolling over that of interest.I hadn't put it together like that but the charts are telling.When i'm on my other PC tonight,I'll load some cahrts and the price action over the last month or two has been massively hiden by the overall index staying flattish.There's some real difference between the sectors.

Tempted to short WTB already even though it's high in  a rally phase.IHG/LSE are heading towards my entry points when the downtrend is confirmed.

37 minutes ago, Majorpain said:

I did read an interesting comment on an article on China, the economic reports are always more positive than the reality, so if 1/3 house price drops and widespread defaults on bonds are being reported, how bad are things really getting under the hood?  Can they print their way out of this one and save the world again without destroying the Yuan?

That's always the problem with countries where the data is even more unreliable than the UK/US.A marked deterioration could be occurring and noone is aware until it's deeply entrenched.

[sancho panza]

14 minutes ago, Barnsey said:

@sancho panza Re: hotel stocks on the decline as a leading indicator, this from bls.gov

Picture paints a 1000...etc etc.

Where do you get this stuff?Twittersphere?

[Democorruptcy]

I wondered if this might be a turning point for Centrica?

Quote

 

We can't believe we're saying this, but... switch to British Gas (even if you're already a BG customer)

Yes, you read that right. We're not often fans of big energy firms, so there was a collective stunned silence at MSE Towers this week when we realised prices have risen so much that the new British Gas tariff is the cheapest fixed deal on the market (after cashback). Not only that, but it also throws in free boiler cover.

And when we say cheapest, that's not cheapest Big 6 fix, or cheapest big name - it's on average cheaper than even small suppliers' fixes

https://www.moneysavingexpert.com/latesttip/

 

 

[Barnsey]

26 minutes ago, sancho panza said:

Picture paints a 1000...etc etc.

Where do you get this stuff?Twittersphere?

All sorts of places, but yes the Twittersphere contains much of it, problem is it's a bit of a feedback loop so have to be very careful and balanced regarding who to follow. Bureau of Labor Statistics site is on my browser favourites list along with many others, lots of interesting stuff on there like the above, always good to read from the source rather than through Zerohedge where possible.

[DoINeedOne]

4 hours ago, Barnsey said:

Stagecoach has just dropped below the 150p mark for anyone interested

went down abit more 

 

Stagecoach Group Plc

LONDON: SGC.L (GBp)

 144.70p11.50 (7.36%)

[DurhamBorn]

Crest Nicholson saying no pick up in demand for houses,down loads again.Airlines and hotels hitting the buffers as well,deflation is upon us.I like the transports for the next cycle mainly as i think the government will help younger people with free travel (lots of unemployed) and people will have to give up their lease cars etc.Plus prices should go up quicker than costs.The key to them though is depreciation topping out at the top of the buying cycle,that could see cash flow improve and debts come down.The market is going to be horrible with sectors getting hit,the question is will sectors looking very cheap for the next cycle see 10% more falls or 30%+.My focus at the moment is holding solid in the miners,there are plenty o FTSE 100 and 250 bargains around not to rush into them,they might get cheaper yet.

[Lightscribe]

Hochschild Mining nudging upward with the rest of the PM miners. Q3 results out, costs down, production targets upped

https://www.morningstar.co.uk/uk/news/AN_1539763970565685700/top-news-hochschild-mining-ups-gold-and-silver-production-targets.aspx

Also joint venture with Mirasol in Chile

https://www.marketwatch.com/press-release/mirasol-signs-agreement-with-hochschild-mining-for-option-to-joint-venture-on-the-indra-precious-metals-project-chile-2018-10-17

[Funn3r]

2 hours ago, Barnsey said:

It really is all rolling over now isn't it? Interesting to see business trip linked sectors (airlines/hotels) starting to show stress.

I subscribe to a few cheap flight spotting lists and it's very apparent that prices have plunged over last 3 months or so. Three hundred quid ish for USA over Xmas for example. 

[Lightscribe]

14 minutes ago, Funn3r said:

I subscribe to a few cheap flight spotting lists and it's very apparent that prices have plunged over last 3 months or so. Three hundred quid ish for USA over Xmas for example. 

When the airline and hotel industry drops, they start to offer increased deals and earning point bonuses on their affiliated credit cards. I made the most of it after 2008, good opportunities for those with no debt/in control of their finances etc.

[A_P]

14 minutes ago, Funn3r said:

I subscribe to a few cheap flight spotting lists and it's very apparent that prices have plunged over last 3 months or so. Three hundred quid ish for USA over Xmas for example. 

I think £300 is fairly normal for a few seats these days thanks to Norwegian. BA used to do (don't know if they still do as my long haul flying has curtailed) business flights over xmas matching the year eg was two for £2014 or a single could be picked up for £1007, this included a first class connecting ticket to another destination within the US. I don't think it's really good guage overall.

[sancho panza]

@Barnsey talking of underfire sectors I was interested to see Inchape down £0.80 at 536 today

https://uk.reuters.com/article/britain-stocks/update-1-ftse-100-swings-back-down-as-earnings-cause-havoc-airlines-dive-idUKL8N1WX5DE

'Shares in car dealership Inchcape tumbled 13 percent after HSBC analysts slashed their target price on the stock, flagging risks to earnings as new car volumes in the UK and Australia are falling.

Inchcape’s decline contributed to a 2 percent fall in European auto and suppliers’ shares after Goldman Sachs warned of a “challenging” quarter for the sector.'

[dgul]

9 hours ago, Banned said:

Get as much debt s possible to pay it off then go bankrupt ... get rid of any assets or put them in a trust whilst planning this.

It might work with other debt, but the student loan isn't discharged on bankruptcy.

[sancho panza]

3 hours ago, Funn3r said:

I subscribe to a few cheap flight spotting lists and it's very apparent that prices have plunged over last 3 months or so. Three hundred quid ish for USA over Xmas for example. 

https://www.investing.com/equities/flybe-group

 

As well as EZY dropping 5% Flybe dropped 40% .All time low of 18 pence. ..............................I use them for travelling as much as I can.Great little airline....I'll miss them if they go pop.

[Band]

6 minutes ago, dgul said:

It might work with other debt, but the student loan isn't discharged on bankruptcy.

You pay it off with borrowed money then go bankrupt.

[Hardhat]

21 minutes ago, Banned said:

You pay it off with borrowed money then go bankrupt.

I'm quite keen on this idea. Put all assets in gold. Bury gold in safe location. Take out huge unsecured loans. Pay off student debt. Go bankrupt. X marks the spot.

How's that for a debt deflation ? 😉

[MrXxx]

7 hours ago, UnconventionalWisdom said:

It also says a lot about our society that not that many people actually know that's what young people are forced to pay (if so, where is the uproar). They just don't care about the future. Eventually, everyone with a brain will give up if the odds stack up even further against them.

I think it says a lot about our students and their lack of critical thinking skills that the majority don't know (until it's too late) they are getting shafted for 6.5% whilst RBS get away with 1%...if they did they wouldn't allow themselves to get sidetracked with the minor `political` issues, and would be lobbying both their home and term time MPs!

[Band]

7 minutes ago, Hardhat said:

I'm quite keen on this idea. Put all assets in gold. Bury gold in safe location. Take out huge unsecured loans. Pay off student debt. Go bankrupt. X marks the spot.

How's that for a debt deflation ? 😉

Good contribution towards a retirement plan if youre that way inclined.

[DurhamBorn]

8 minutes ago, MrXxx said:

I think it says a lot about our students and their lack of critical thinking skills that the majority don't know (until it's too late) they are getting shafted for 6.5% whilst RBS get away with 1%...if they did they wouldn't allow themselves to get sidetracked with the minor `political` issues, and would be lobbying both their home and term time MPs!

The market will educate them like it always does.

[UnconventionalWisdom]

24 minutes ago, MrXxx said:

I think it says a lot about our students and their lack of critical thinking skills that the majority don't know (until it's too late) they are getting shafted for 6.5% whilst RBS get away with 1%...if they did they wouldn't allow themselves to get sidetracked with the minor `political` issues, and would be lobbying both their home and term time MPs!

I agree with you. Like getting a house as quickly as possible, no matter the price, young people have success defined for them. Family member,s school and TV/films tell them the path they should follow and it's only decades later, saddled with stupid levels of debt that it dawns on them that this may not actually be the right path. By that time it's too late

[King Penda]

1 hour ago, dgul said:

It might work with other debt, but the student loan isn't discharged on bankruptcy.

and in theory they can extend it at will,hell if they chose they might even change it so they can put a charge on your assets at death.could be amuseing to see them batteling it out with the local council who are trying to get your carehome fees lol.