Credit deflation and the reflation cycle to come.

[sancho panza]

2 hours ago, DurhamBorn said:

Its no mistake my partner is a nurse in the community who's job is to get people out of hospital quick or that i guided my daughter to be a nurse,a mental health nurse in the community,both areas where demand will rocket.My son is very clever but not the uni type,my mate got him in to Aldi,good money,no debts,saving £700 a month already and if i chuck him some money should be buying a house cash in a few years once they are whacked.My daughter is 26 and will be mortgage free on a nice house by 31.They are saving enough each year to clear it once the next 5 year fix ends they are about to take (paid off 45% at end of fix in lump sum before re-fixing).My youngest daughter is with a gypsy who owns lots of land and is the best person iv ever met for making money.Hes buying up right off 4 x 4s at the moment and selling the engines and gear boxes to Kenya and weighing in the rest.He learned how to take an engine out in a day.My daughter left school at 16,real rebel,but brutal how clever she is,she does all the finances already and can see them thriving the worse the economy gets.

Some jobs,eg mental health nursing are that rough that only a small percentage of people can take the strain.I work in the NHS and some of the jobs -aside from mental health- eg A&E nurses and Drs, etc there's a limited pool of people who can take it.

I mean who'd want to be working central London in anything these days.

I saw the other day during the student loan discussion that PGCE numbers were down.Now depsite teaching being good money for round here,there are a lot of strains. and the numbers have reduced substantially over the last few years.

[sancho panza]

Some meat on the Primark story.UK sales like for like actually up 1.2%

Worth noting it has no online sales operation.

https://www.retailgazette.co.uk/blog/2018/11/primark-sales-up-despite-dip-like-for-likes/

Primark has recorded an increase in annual sales and operating profit despite a dip in like-for-likes, aided by the value retailer’s expansion throughout the year.

For the year ending September 15, the Associated British Foods-owned retail chain saw sales grow to £7.47 billion – a six per cent year-on-year increase at actual exchange rates and 5.2 per cent at constant currency.

The sales growth was driven by increased selling space, which in turn caused a 2.1 per cent drop in like-for-likes.

Primark also attributed its dip in like-for-likes to “unseasonable weather in three distinct periods during the year”.

Meanwhile, operating profit margin increased to 11.3 per cent from 10.4 per cent and, as a consequence, adjusted operating profit came in £843 million – a 15 per cent year-on-year increase at actual exchange rates or 13 per cent at constant currency.

 

In the UK, Primark said sales grew 5.3 per cent while like-for-likes increased 1.2 per cent, thanks to a “significant” increase in the retailer’s share of the country’s clothing market.

Primark’s overall retail selling space around the world increased by a net 0.9 million sq ft with 15 net new stores. The UK had three net new stores.

This brings its total estate to 360 stores worldwide – 185 of which are in the UK – trading from 14.8 million sq ft compared to 13.9 million sq ft a year ago.

Primark said full year operating margin at this stage was expected to be broadly in line with this year.'

[Harley]

3 hours ago, DurhamBorn said:

Notice today even Primark's like for like sales have fallen

I've been waiting for this "official" canary as I've seen a few worried faces in the industry for quite a while now as they adjust to a new normal.  A rock and a hard place for these types.  They can't go anywhere cheaper to produce, can't design out any more costs, and can't increase prices to a tapped out consumer (unless they totally change their USP).  Private equity is hunting but struggling with finance unless they get knock down deals. Glad I've been comprehensively hardening my finances for a good few months now.  Big bang or death by a thousand cuts, this thing (and I'm thinking more than markets) is going down unless and until TPTB kick off their next (post QE) phase of lunacy (which won't be as "nice" as the last one).  On the bright side, I'm ramping up my trading and looking forward to the old days.

[Harley]

34 minutes ago, sancho panza said:

Some meat on the Primark story.UK sales like for like actually up 1.2%

Worth noting it has no online sales operation.

https://www.retailgazette.co.uk/blog/2018/11/primark-sales-up-despite-dip-like-for-likes/

Primark has recorded an increase in annual sales and operating profit despite a dip in like-for-likes, aided by the value retailer’s expansion throughout the year.

For the year ending September 15, the Associated British Foods-owned retail chain saw sales grow to £7.47 billion – a six per cent year-on-year increase at actual exchange rates and 5.2 per cent at constant currency.

The sales growth was driven by increased selling space, which in turn caused a 2.1 per cent drop in like-for-likes.

Primark also attributed its dip in like-for-likes to “unseasonable weather in three distinct periods during the year”.

Meanwhile, operating profit margin increased to 11.3 per cent from 10.4 per cent and, as a consequence, adjusted operating profit came in £843 million – a 15 per cent year-on-year increase at actual exchange rates or 13 per cent at constant currency.

 

In the UK, Primark said sales grew 5.3 per cent while like-for-likes increased 1.2 per cent, thanks to a “significant” increase in the retailer’s share of the country’s clothing market.

Primark’s overall retail selling space around the world increased by a net 0.9 million sq ft with 15 net new stores. The UK had three net new stores.

This brings its total estate to 360 stores worldwide – 185 of which are in the UK – trading from 14.8 million sq ft compared to 13.9 million sq ft a year ago.

Primark said full year operating margin at this stage was expected to be broadly in line with this year.'

Enough said there for me to be sure I could have an interesting time looking at the (note: ABF) accounts but not worth my time.

[sancho panza]

45 minutes ago, Harley said:

Enough said there for me to be sure I could have an interesting time looking at the (note: ABF) accounts but not worth my time.

As an aside ABF chart been declining for a year and features lower highs over three years.....'the more often resistance gets tested the more likely it is to fail.'

 

 

Interesting podcast from Wolf where he discusses rising IRs and how the fed will leave japanese CLO investors out to dry this time.

Interesting point at 3 minutes regarding floorplan finance and the costs thereof over the last few years for a car dealer.IR costs have rocketed.

Well worth 12 minutes

https://wolfstreet.com/2018/11/04/the-wolf-street-report-will-bloodbath-in-corporate-debt-rising-rates-deter-the-fed/

[kibuc]

Thank you @Admiral Pepe and @DurhamBorn for your insight.

In an unrelated news Adams, new New Gold CEO, brought in his old CFO, Robert Chausse, with whom he used to work at Richmont Mines. The news broke two days ago and so far the market seemed to like it.

Adams to solve Rainy River operational issues while the new guy tries to sort out their messy finances? I think I'll take a nibble. A tine one, as it still smells of a train wreck.

[AWW]

11 hours ago, Talking Monkey said:

The far end of the next decade is going to be the start of horrible times as we transition to a society where the majority of people are superfluous to requirements

I'd say we arrived there early this century in the advanced economies and never really made it to a majority of people being economically useful in Africa and the likes of China/Pakistan/India/Bangladesh - the former, worryingly, on course for a population of 4,000,000,000 by the end of the century, most of whom will be illiterate, innumerate and desperate to make it across the Med.  That's the most worrying stat for me.

[Barnsey]

https://www.wsj.com/articles/supply-crunch-looms-in-commodities-markets-1541505605

[Errol]

3 hours ago, AWW said:

I'd say we arrived there early this century in the advanced economies and never really made it to a majority of people being economically useful in Africa and the likes of China/Pakistan/India/Bangladesh - the former, worryingly, on course for a population of 4,000,000,000 by the end of the century, most of whom will be illiterate, innumerate and desperate to make it across the Med.  That's the most worrying stat for me.

We have more guns and military hardware than they do. With the right leaders in charge we could stop the migrants quite easily.

[MrXxx]

22 hours ago, stokiescum said:

even care jobs will be saught after in the future one for extra cash on top of univeral income and another for self esteam and to kill boredom.then in time they will make it compulsory for everyone to do some form of comunity work,big brother is comeing.

Always wondered why this wasn't the case for the physically able unemployed anyway...job club in the mornings, community service in the afternoon....but I suppose they have got to have some one watching daytime TV .

[MrXxx]

10 hours ago, Errol said:

We have more guns and military hardware than they do. With the right leaders in charge we could stop the migrants quite easily.

Maybe with their positive work ethic (unlike some of `our own`) `we` don't want to stop them, just modify our absurd benefits system...after all, who is going to pay the taxes to support our increasing elderly population?

[kibuc]

Tahoe posted its Q3 results yesterday. To no-one's suprise, they are terrible, with gold production coming in at the low end of guidance and AISC at the high end, indicating lower-than-expected ore grades. Silver production is (understandably) nil, with Escobal still suspended. Also, a impairment test was triggered in relation to Escobal, which resulted in £170m impairment loss.

What I find surprising is a rather dry and mostly factual assessment of Escobal prospects, without the usual lipstick on the pig regarding current events or hilariously short deadlines for the restart. In fact, for their impariment tests they assumed a restart date of 31st of Dec 2019 (and silver price of $18) which is probably overly pessimistic and leaves a lot of margin for error. It's in stark contrast with all previous communication from Tahoe on Escobal, or anything else for that matter.

[BearyBear]

Meanwhile... Halifax October HPI +0.7% m/m, +1.5% YoY

ANNUAL HOUSE PRICE GROWTH SLOWS TO 1.5% - LOWEST RATE IN FIVE YEARS

https://static.halifax.co.uk/assets/pdf/mortgages/pdf/October-2018-House-Price-Index.pdf

 

[Yellow_Reduced_Sticker]

18 minutes ago, BearyBear said:

Meanwhile... Halifax October HPI +0.7% m/m, +1.5% YoY

ANNUAL HOUSE PRICE GROWTH SLOWS TO 1.5% - LOWEST RATE IN FIVE YEARS

https://static.halifax.co.uk/assets/pdf/mortgages/pdf/October-2018-House-Price-Index.pdf

 

REALLY ?

So why is it that i'm seeing so many REDUCED properties for sale?

The HOUSE PRICE CRASH is slowly materializing...

Case in point, bungalow in wokingham SE going right NOW for: £294K ...this time last year it would have been SOLD and for around £330K

I woudn't believe any figures from Halifax/banks EA's etc...they are ALL full of sh*T!

[Majorpain]

1 hour ago, kibuc said:

Tahoe posted its Q3 results yesterday. To no-one's suprise, they are terrible, with gold production coming in at the low end of guidance and AISC at the high end, indicating lower-than-expected ore grades. Silver production is (understandably) nil, with Escobal still suspended. Also, a impairment test was triggered in relation to Escobal, which resulted in £170m impairment loss.

What I find surprising is a rather dry and mostly factual assessment of Escobal prospects, without the usual lipstick on the pig regarding current events or hilariously short deadlines for the restart. In fact, for their impariment tests they assumed a restart date of 31st of Dec 2019 (and silver price of $18) which is probably overly pessimistic and leaves a lot of margin for error. It's in stark contrast with all previous communication from Tahoe on Escobal, or anything else for that matter. 

Tahoe's assets are quite good for what im looking for at this point, its a shame about the management.  Kitchen sinking is something Id expect from a new CEO, im not sure what to make of a CEO who's been in post for a while suddenly changing his tune.  One to watch, but definitely not currently invest IMO!

[leonardratso]

1 hour ago, kibuc said:

Tahoe posted its Q3 results yesterday. To no-one's suprise, they are terrible, with gold production coming in at the low end of guidance and AISC at the high end, indicating lower-than-expected ore grades. Silver production is (understandably) nil, with Escobal still suspended. Also, a impairment test was triggered in relation to Escobal, which resulted in £170m impairment loss.

What I find surprising is a rather dry and mostly factual assessment of Escobal prospects, without the usual lipstick on the pig regarding current events or hilariously short deadlines for the restart. In fact, for their impariment tests they assumed a restart date of 31st of Dec 2019 (and silver price of $18) which is probably overly pessimistic and leaves a lot of margin for error. It's in stark contrast with all previous communication from Tahoe on Escobal, or anything else for that matter.

hmm losses of some of the dogs might be a good thing short term, im sure a few years ago URAX? URA jumped significantly when one of the producers shut down driving the price of uranium up because of the possibility of scarcity, i only remember cos i was in it at the time when we could still buy american etfs and i made a good bit off the rise. Of course i pissed it all away on scratchcards, as chavs people are prone to do.

 

Just checked, was URA, think DB was in at the time as well, so he might recall better than me. [feb 2017 spike].

[reformed nice guy]

2 hours ago, MrXxx said:

who is going to pay the taxes to support our increasing elderly population?

Charles Ponzi agrees with your logic.

[MrXxx]

2 hours ago, BearyBear said:

Meanwhile... Halifax October HPI +0.7% m/m, +1.5% YoY

ANNUAL HOUSE PRICE GROWTH SLOWS TO 1.5% - LOWEST RATE IN FIVE YEARS

https://static.halifax.co.uk/assets/pdf/mortgages/pdf/October-2018-House-Price-Index.pdf

 

So property is now giving the same return on cash in a 1yr fix building society account, the only difference is that I don't have to go and fix their roof when it leaks!...that said though, they won't let me sleep there either, not even in their doorway! :-)

[kibuc]

1 hour ago, Majorpain said:

Tahoe's assets are quite good for what im looking for at this point, its a shame about the management.  Kitchen sinking is something Id expect from a new CEO, im not sure what to make of a CEO who's been in post for a while suddenly changing his tune.  One to watch, but definitely not currently invest IMO!

Their main asset is great when it's producing, and their debt level is minimal. They are 55% down in the last 6 months alone, mostly due to uncertainty of Brexit Escobal. Investors didn't like the fact that Tahoe was determined to fight the losing battle, which only resulted in delaying any potential restart. It looks like they have now accepted their fate and are focusing on making the process go smoothly, which would at least allow to set a reasonable deadline for the restart and start re-pricing the company in relation to that.

Having said that, the process is bound to take at least 5-6 months and there's nothing Tahoe can do about it, so there will be no production coming from Escobal for the next two quarters, basically guaranteeing that the next two sets of quarterly result will be very modest, although probably better than the current ones. Another problem, which tends to be overlooked, are road blocks. There are groups actively blocking the highway leading to Escobal, even now when it's only on maintenance, and there's no guarantee they will disperse once the mine is operational again.

Maybe it's all been priced in and the only way is up. Unlike New Gold, they are not in danger of crumbling under the weight of their debt and they will get back to full strenght eventually. Their gold output should improve in Q4 thanks to completion of their expansion programs in Canada and Peru. Still, the biggest price move will be Escobal and there is probably still plenty of time to play it.

[janch]

Has anyone seen "Aussie Gold Hunters" on Quest.  Seems there is gold on the surface in the Australian outback and people are going armed with metal detectors and finding their own nuggets.  Some are doing OK too although the 50 degree temps and dust would put me off.  I imagine it could become quite addictive...........

[sancho panza]

https://www.retailgazette.co.uk/blog/2018/11/mulberry-posts-8-2m-loss-house-fraser-collapse-hammers-margins/

'Mulberry has been hammered by the collapse of House of Fraser as it revealed multi-million-pound losses in its interim results.

In the six months to September 30, the fashion retailer posted a total revenue drop of eight per cent to £68.3 million, despite international sales growth of 13 per cent and global online sales growth of five per cent, now accounting for 17 per cent of sales.

In the UK, Mulberry saw sales dive 11 per cent year-on-year, though it insisted its local operations remained profitable.'

https://www.retailgazette.co.uk/blog/2018/11/ms-interim-results-grim-reading-sales-across-divisions-fall/

'Marks & Spencer has reported sales declines in both its grocery and fashion arms while warning that it expected “little improvement” in the near future.

For the six months to September 29, the retailer reported a like-for-like sales decline across its clothing and home division of 1.1 per cent, while total revenues dropped 2.7 per cent.

Hargreaves Lansdown’s senior analyst Laith Khalaf said: “The most recent missive from M&S makes for grim reading, despite the headline rise in profits.

“However expectations are already low, and while there are few signs of relief in its latest numbers, the broad direction of travel at M&S won’t come as a shock to anyone.

 

https://www.retailgazette.co.uk/blog/2018/11/new-look-eyes-store-closures-planned-cva/

'New Look’s boss has suggested that almost 100 of its UK stores may end up closing down as part of its ongoing turnaround scheme, much more the 60 that was originally earmarked earlier this year.

Earlier today New Look unveiled a return to profitability in its first half, with the firm booking underlying operating profits of £22.2 million, up significantly from a £10.4 million loss the same period a year earlier.

Its adjusted EBITDA also more than doubled compared to last year, rising from £24.2 million to £49.8 million.

This is despite revenues continuing to fall 4.2 per cent to £656.9 million and like-for-likes dropping 3.7 per cent, although this is a major improvement on the 8.6 per cent decline seen in the previous year.

[Democorruptcy]

Wetherspoon profit warning, shares down 11.5% at the moment.

https://www.telegraph.co.uk/business/2018/11/07/wetherspoon-warns-profit-growth-will-fizzle-puts-wages/

[Harley]

2 hours ago, Democorruptcy said:

Wetherspoon profit warning, shares down 11.5% at the moment.

https://www.telegraph.co.uk/business/2018/11/07/wetherspoon-warns-profit-growth-will-fizzle-puts-wages/

I dodged a bullet there.  Nearly bought some yesterday instead of Greene King.  Decided on GK but then called the whole thing off after looking at their balance sheet (debt I think).

[Agent ZigZag]

Was looking at Weatherspoon only last week. Decided against as whilst a steady as she goes share over the last ten years poor yield for me.

[Harley]

1 hour ago, Agent ZigZag said:

Was looking at Weatherspoon only last week. Decided against as whilst a steady as she goes share over the last ten years poor yield for me.

I've just checked and my concern with GK was the cash flow statement with a significant increase in the 2018 financing charge, causing a negative cash flow.  I should look closer as the 6.88% yield looks good as do the other metrics like dividend cover.  JDW only offers 1.05% (with a massive 5.20% dividend cover).  Clearly ones a div payer (falling share price) while the other is more a growth stock.