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Credit deflation and the reflation cycle to come.


DurhamBorn

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5 hours ago, Barnsey said:

Just my personal opinion but once the builders have properly moved south,then it could be game on with some of these financials.

Interesting that CYBG is Clydesdale/Yorkshire BS-tow companies owned by one of the big ozzie players who lent some seriously stupid loans back in the day.iirc they tried to sell them as a going concern but obviously floated them off their books.

Not surprised,I bet they still have loads of really crap loans on their books like RBS.

Have you got a view on the two shorts he's picked barnsey?

6 hours ago, Harley said:

A great share there SP thanks.  Or should I say "awesome"!  Clearly not just computer based robotic trading - "buy the dip" hypnosis with the "key" word supplied by the talking heads.  A lesson for us all, FTSE included.  And those who thought they could be consoled over a falling share price (loss) with a high dividend yield were sorely dissapointed.  Maybe no VOD, but that thinking is currently mainstream.  Or Greene King (especially versus Weatherspoons) and several others.  And on and on.  The GE story seems to have it all: share buy backs (apparently via debt), lack of cash flow, debt, dividend trap, talking heads, buy the news, sell the dips, maybe some accounting isues......  No doubt a few more of these as a sign of a market "turn", just like every time before.  Time to be extra careful out there!   

Decl:I speak as someone who's bought the dips in Centrica and has bought his first little dip in Vod.

 

The whole thing with GE is that it's demise has been telegraphed for a long time.A lot of these sprawling industrial conglomerates have been struggling for years.It's like people investing in bricks n mortar EA's??? 

GE became a finance company with some industrial bussinesses attached in much the same way as BA became a pension liability with an airline attached.

From jan 2018

https://www.reuters.com/article/us-ge-restructuring/ge-to-take-62-billion-charge-in-its-finance-arm-in-fourth-quarter-idUSKBN1F51AP

'NEW YORK (Reuters) - General Electric Co  indicated it is looking closely at breaking itself up on Tuesday as the conglomerate announced more than $11 billion in charges from its long-term care insurance portfolio and new U.S. tax laws.

Flannery already is eliminating thousands of jobs and cutting $3.5 billion in costs as he tries to solve problems he inherited when he became CEO on Aug. 1, including falling sales of power turbines, a build-up of inventory and declining profit margins in some businesses. His turnaround effort is still likely to take a year or more to play out.'

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3 minutes ago, sancho panza said:

He's stating the obvious a bit there but as you know I dipped back into the shorts on the builders.Last week was a sea of red.Today,8/11 have moved blue.Just my personal opinion but once the builders have properly moved south,then it could be game on with some of these financials.

Interesting that CYBG is Clydesdale/Yorkshire BS-tow companies owned by one of the big ozzie players who lent some seriously stupid loans back in the day.iirc they tried to sell them as a going concern but obviously floated them off their books.

Not surprised,I bet they still have loads of really crap loans on their books like RBS.

Have you got a view on the two shorts he's picked barnsey?

Metro Bank is a good shout, massively vulnerable to a turn in property prices (residential AND commercial) and struggling to directly compete with the big mortgage market players, along with expanding far too aggressively. Would be surprised to still see them around in 5 years. DYOR of course should you wish to have a play.

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Just now, Barnsey said:

Metro Bank is a good shout, massively vulnerable to a turn in property prices (residential AND commercial) and struggling to directly compete with the big mortgage market players, along with expanding far too aggressively. Would be surprised to still see them around in 5 years. DYOR of course should you wish to have a play.

Interesting view.Just checked the chart and they have a short histroy but crossed over into long term downtrend in April 2018 with soem serious momo behind them.

I've been running my slide rule over Shcroders/Pru/Rathbone/Close etc but there's not much to go at compared to the US if there's a wiley coyote moment....if you get my drift.I'll psot some charts later.Visa

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25 minutes ago, sancho panza said:

Just my personal opinion but once the builders have properly moved south,then it could be game on with some of these financials.

Interesting that CYBG is Clydesdale/Yorkshire BS-tow companies owned by one of the big ozzie players who lent some seriously stupid loans back in the day.iirc they tried to sell them as a going concern but obviously floated them off their books.

Not surprised,I bet they still have loads of really crap loans on their books like RBS.

Have you got a view on the two shorts he's picked barnsey?

Decl:I speak as someone who's bought the dips in Centrica and has bought his first little dip in Vod.

 

The whole thing with GE is that it's demise has been telegraphed for a long time.A lot of these sprawling industrial conglomerates have been struggling for years.It's like people investing in bricks n mortar EA's??? 

GE became a finance company with some industrial bussinesses attached in much the same way as BA became a pension liability with an airline attached.

From jan 2018

https://www.reuters.com/article/us-ge-restructuring/ge-to-take-62-billion-charge-in-its-finance-arm-in-fourth-quarter-idUSKBN1F51AP

'NEW YORK (Reuters) - General Electric Co  indicated it is looking closely at breaking itself up on Tuesday as the conglomerate announced more than $11 billion in charges from its long-term care insurance portfolio and new U.S. tax laws.

Flannery already is eliminating thousands of jobs and cutting $3.5 billion in costs as he tries to solve problems he inherited when he became CEO on Aug. 1, including falling sales of power turbines, a build-up of inventory and declining profit margins in some businesses. His turnaround effort is still likely to take a year or more to play out.'

Post 08, Yorkshire and Skipton BS were the worse/best lenders, depending on where you stand.

Skipton have seriously pulled in its horns. Its either had a scare or been shouted at by the BoE.

YBS. Not sure, as it was owned by RBA i.e. not a mutual.

 

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32 minutes ago, Barnsey said:

Metro Bank is a good shout, massively vulnerable to a turn in property prices (residential AND commercial) and struggling to directly compete with the big mortgage market players, along with expanding far too aggressively. Would be surprised to still see them around in 5 years. DYOR of course should you wish to have a play.

More so from my own personal perspective, I’ve seen Metro bank somewhat lax in regards to their account screening process, and how many ne’er-do-wells have managed to open up current accounts with them. Aggressive expansion would tally up with my view.

Certainly doesn’t bode too well in a financial downturn.

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Democorruptcy

Another daily double digit downer.

Quote

 

British American Tobacco and Imperial Brands had £7bn wiped from their stock market value as US regulators prepare to crack down on the sale of flavoured e-cigarettes and menthol cigarettes.

Shares in BAT, the sixth-biggest company in the FTSE 100 and the maker of brands including Lucky Strike, Dunhill, Rothmans and Benson & Hedges, tumbled by 11%, sending its market value plummeting from £76bn at the close on Friday to £69bn on Monday. The tobacco company’s share price has slumped by almost 40% over the past year, putting it on track for only its third annual decline in the last two decades.

https://www.theguardian.com/business/2018/nov/12/tobacco-shares-us-bat-imperial-brands-fda-menthol-ban

 

 

 

 

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On 09/11/2018 at 23:45, Cattle Prod said:

I've opened a long Brent position today, and will be holding till next year, I'm delighted to have this opportunity. I thought I was out. I'll staircase down as necessary.

You may have nailed that (WTI but same for Brent)......

Capture.thumb.PNG.9ad99b288fcb81fccced00e32e3b4418.PNG

What else you up to!!!!!!!

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1 hour ago, Democorruptcy said:

Another daily double digit downer.

Quote

 

British American Tobacco and Imperial Brands had £7bn wiped from their stock market value as US regulators prepare to crack down on the sale of flavoured e-cigarettes and menthol cigarettes.

Shares in BAT, the sixth-biggest company in the FTSE 100 and the maker of brands including Lucky Strike, Dunhill, Rothmans and Benson & Hedges, tumbled by 11%, sending its market value plummeting from £76bn at the close on Friday to £69bn on Monday. The tobacco company’s share price has slumped by almost 40% over the past year, putting it on track for only its third annual decline in the last two decades.

https://www.theguardian.com/business/2018/nov/12/tobacco-shares-us-bat-imperial-brands-fda-menthol-ban

 

I couldn't help myself......as an ex-smoker knowing how hard it is to stop......and that this is US stuff......and I made out well in the past on days like this (e.g. Tesco).....and needed to add a little bit more of BATS and IMB.....and £7bn, do I look scared?

PS: I hate smoking (of course), but respect everyone's freedom!

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Not strictly the place for it but as I know they've come up here, thought I'd share a short tale about Goldcore.

Ordered some 2018 Brits at the end of last month and was notified that they were out of stock, and that instead, 2019 coins would be shipped mid-November. Was quite excited to open the shiny new 2019 coins that arrived today... only they are 2017, and appear to be "used"*.

Not a problem for the purposes of my purchase but I don't much being fibbed too! Probably won't use them again.

Incidentally they shipped from Poland, not Ireland.

 

* Maybe the mint puts them in the tubes haphazardly but I doubt it.

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Never used Goldcore but you should raise it with them. If you have your request in writing (evidence) then at the least they should recognise their error and apologise.

But apart from that, Bullion is bullion. It really doesn't matter what age or condition it is in.

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5 minutes ago, Errol said:

Never used Goldcore but you should raise it with them. If you have your request in writing (evidence) then at the least they should recognise their error and apologise.

But apart from that, Bullion is bullion. It really doesn't matter what age or condition it is in.

I didn't specifically request 2019s, but 2018s was what the website specified, during the order process it told me they'd be 2019s.

However the invoice states "Silver 1 oz Britannia Tube of 25". I did check as if the price had dropped I'd be tempted to kick up a fuss and return them :)

My sentiments exactly ultimately... more an issue of principle!

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4 hours ago, Democorruptcy said:

Another daily double digit downer.

Any menthol ban would take a decade to come into force and probably will be diluted before it gets to that point (as there's no real evidence proving menthol cigarettes encourage smoking or that such smokers wouldn't just transfer to a non-menthol tobacco).  I can't see how the BAT fall is justified.

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1 hour ago, Cosmic Apple said:

I didn't specifically request 2019s, but 2018s was what the website specified, during the order process it told me they'd be 2019s.

However the invoice states "Silver 1 oz Britannia Tube of 25". I did check as if the price had dropped I'd be tempted to kick up a fuss and return them :)

My sentiments exactly ultimately... more an issue of principle!

@Cosmic Apple I've "tried" buying from them, however  my experience stopped at the online help.

The chat went more or less like this:

Me - " hello, thanks for your help. Can you tell me if you have the xxx coins available to prompt deliver?"

GC - " shipping normally takes 7-10 business days..."

Me - "ahh ok, thanks - I guess I will try another supplier then :-) "

GC - " Our silver Britannia's are VAT free and you won't find that everywhere!"

Me - "Coininvest? VAT free and quick delivery :-)"

GC - "Can I help you with anything else?"

Me - "no many thanks.If I may suggest, could you [GC] please add this information upfront next to the coins on sale? (i.e. about the delivery time - that would had saved me a lot of time :-) )"

GC - "How would I know where they are being shipped? Best of luck to you."  --> literally what the customer support representative typed....

After that , I said "thanks" and left the site - not sure I will be back to be honest....    (that is maybe me just being a bit to "fussy" I guess o.O)

M.C.

 

 

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The dollar index has touched my top target today and my figures show it going down to 85 from here.Interesting to see if that call works out as its pretty much opposite what the market sees.Roadmap says dollar 85 gold $1500+,Silver $22.Those seem crazy calls right now,but iv been buying some more silver miners shares today (Endeavour and Majestic).

Lots more sectors here in the UK getting hit hard.Gambling companies seem to be the last lot to get whacked down.The likes of William Hill and Playtech down over 50% now from highs.

Our bear seems to be going sector by sector.It will be very interesting to see if we continue to fall as the US does or not.Tobacco taking a big whack today.

Debt to GDP in the US is now at 240% where just before the Great Depression it was at 180%.A debt deflation and/or massive inflation are the only ways out.BTL and housing still look the most likely place for the pain in the UK.

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5 hours ago, Cattle Prod said:

@sancho panza I don't read too much on energy SP, and I'm no expert on tge trading side. But I respect Art Berman. He has a bunch of freely available slide decks on his website, should be good for a layman. He has a solid track record of price directions by tracking the comparative inventory of oil stocks. i.e. how the paper market shoves the price up and down by tens of dollars based on relatively tiny stock fluctuations (10s of m barrels in a 100mbbl a day spot market. ie a 10mbbl stock increase can knock $5 off the price in a 10 day period when 1 billion barrels are burned!!). Hes also a working geologist, and scientific in his approach. Just googke him, I have no idea why his stuff is free. Probably because he enjoys it.

I do my own analysis on supply, as its part of my job anyway. I use the EIA data for the shale stuff, its very comprehensive. Just google "eia shale production data" and download the latest spreadsheet. Plot up the 'legacy production rate' column, and have a think about what's underpinning the 'shale oil 4 eva' narrative!

Oh, and for a general read, the pulitzer prize winning "the prize" is a superb history. I'm also reading the recent "Saudi Inc" atm, nothing revelatory so far.

Cheers CP,  @kibuc   put me onto IKN twitter and High Grade Luis who have bopth been interesting to follow and have enligtened me no end.I've had a quick look at Art and have bookmarkeed him.

Read this one and it was superb

http://www.artberman.com/oil-markets-recover-from-panic-attack-but-prices-will-go-lower/

Looks like exactly the sort of thing I was after.Many thanks.

As for the last bit in bold,that's a bit abovve my level.....

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24 minutes ago, DurhamBorn said:

The dollar index has touched my top target today and my figures show it going down to 85 from here.Interesting to see if that call works out as its pretty much opposite what the market sees.Roadmap says dollar 85 gold $1500+,Silver $22.Those seem crazy calls right now,but iv been buying some more silver miners shares today (Endeavour and Majestic).

Lots more sectors here in the UK getting hit hard.Gambling companies seem to be the last lot to get whacked down.The likes of William Hill and Playtech down over 50% now from highs.

Our bear seems to be going sector by sector.It will be very interesting to see if we continue to fall as the US does or not.Tobacco taking a big whack today.

Debt to GDP in the US is now at 240% where just before the Great Depression it was at 180%.A debt deflation and/or massive inflation are the only ways out.BTL and housing still look the most likely place for the pain in the UK.

It does feel like that doesn't it? Building shares-UK- are moving on incredibly similar rhythms at the mo.They got whacked as well as the baccy shares today

Funny seeing CNA moving up of late.Still down on my average buy in circa £1-70(post scrip).But the markets alreayd given them a beating over the last two years.

I think as the US and UK markets haven't run up together,it follows,their track down may be dissimilar.Interesting times,

 

Ref that last bit in bold,it's quite incredible where we are and how much deeper in the doodoo we are than in 08 imho.....situation might be even worse if imputed rents were still 2% of GDP like in the 60's instead of the 10-12% thy are these days

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Eventually Right
32 minutes ago, DurhamBorn said:

The dollar index has touched my top target today and my figures show it going down to 85 from here.Interesting to see if that call works out as its pretty much opposite what the market sees.Roadmap says dollar 85 gold $1500+,Silver $22.Those seem crazy calls right now,but iv been buying some more silver miners shares today (Endeavour and Majestic).

Lots more sectors here in the UK getting hit hard.Gambling companies seem to be the last lot to get whacked down.The likes of William Hill and Playtech down over 50% now from highs.

Our bear seems to be going sector by sector.It will be very interesting to see if we continue to fall as the US does or not.Tobacco taking a big whack today.

Debt to GDP in the US is now at 240% where just before the Great Depression it was at 180%.A debt deflation and/or massive inflation are the only ways out.BTL and housing still look the most likely place for the pain in the UK.

I’m very interested in seeing whether you’re right on this DurhamBorn! I’m seeing plenty of predictions for DXY going well above 100 on twitter (by macro guys) but nobody predicting sub 90 in the short to medium term. Your dollar calls have been spot on so far, so it will be interesting to watch how it plays out.

Have you heard of Brent Johnson’s “dollar milkshake” theory by any chance?

His thesis is that the central banks have injected a huge amount of liquidity into the financial system since 2008, and by tightening, the US is going to suck that liquidity into the dollar, and dollar assets. So DXY and US equities way up in the next year or so, because the rest of the world is even more of a financial basket case than the US.

Short 3 min video here of him explaining it: https://m.youtube.com/watch?v=6mkV-c0mlZE

written explanation here: https://www.capitalandconflict.com/investing-in-gold/a-most-destructive-milkshake/

I can see some logic in his argument, so would be interested in why you think he’s wrong, if you’ve got time.

 

 

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2 hours ago, dgul said:

Any menthol ban would take a decade to come into force and probably will be diluted before it gets to that point (as there's no real evidence proving menthol cigarettes encourage smoking or that such smokers wouldn't just transfer to a non-menthol tobacco).  I can't see how the BAT fall is justified.

Aren’t they already banned in the U.K.? How long did that take?

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Bricks & Mortar

From wikipedia page on mentol cigs:

On 21 June 2013, EU health ministers agreed on a directive to ban menthol cigarettes; this decision might be implemented within three-and-a-half years.[25] In response, the former German chancellor Helmut Schmidt,(1918-2015), was reported to have hoarded 200 cartons of his preferred menthol cigarette brand in his house.[26]

On October 8, 2013 the European Parliament agreed by voting to ban menthol and other flavored cigarettes as of 2022.[27]

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I want to buy some Alexco Resources as a rubber band stock and they were down 13% today. Quarterly results out on Wednesday so going to wait and see what happens. Definite potential to go lower on the expected news but that might be what the market is baking in. I suppose if you truely believe it’s a rubber band then you’ll be confident that the potential gains outweigh small early dips. Tricky init.

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Talking Monkey
6 hours ago, DurhamBorn said:

The dollar index has touched my top target today and my figures show it going down to 85 from here.Interesting to see if that call works out as its pretty much opposite what the market sees.Roadmap says dollar 85 gold $1500+,Silver $22.Those seem crazy calls right now,but iv been buying some more silver miners shares today (Endeavour and Majestic).

Lots more sectors here in the UK getting hit hard.Gambling companies seem to be the last lot to get whacked down.The likes of William Hill and Playtech down over 50% now from highs.

Our bear seems to be going sector by sector.It will be very interesting to see if we continue to fall as the US does or not.Tobacco taking a big whack today.

Debt to GDP in the US is now at 240% where just before the Great Depression it was at 180%.A debt deflation and/or massive inflation are the only ways out.BTL and housing still look the most likely place for the pain in the UK.

On a broader note both leveraged and unleveraged BTL needs to be cleared out, this hoarding of a basic of life has wreaked havoc on many lives as those with access to money have bought up and hoarded a necessity of life, pushing up the prices beyond the reach of regular folks. I can see leveraged BTL being absolutely hammered, but hope those with several paid of properties are pushed to sell by it becoming uneconomical to hoard housing, don't know how that second situation would come about

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7 hours ago, Lavalas said:

I want to buy some Alexco Resources as a rubber band stock and they were down 13% today. Quarterly results out on Wednesday so going to wait and see what happens. Definite potential to go lower on the expected news but that might be what the market is baking in. I suppose if you truely believe it’s a rubber band then you’ll be confident that the potential gains outweigh small early dips. Tricky init.

Il be adding some,i added a few other silver miners yesterday that im stair casing into (Endeavour Majestic).Im actually hoping they can stay down a while as im SIPPing my salary from my new job each month and its mostly going into silver miners xD.Im taking home the tax allowance only.Il be buying them as long as i keep this job (max 18 months) or they shoot higher.one of the main reasons i took this job was to buy more as PMs had reached the % limit in my portfolio and i wouldnt break allocation rules.Im classing buying from going to work seperate as if they went to zero id simply lose a year or so's getting out of my chair (and still taking tax allowance as wages).

Just a quick note from Vods results today "our EBIT improved as out depreciation lowered".Thats the thing to watch in a reflation from asset heavy companies,and it should expand a lot more as inflation starts to run hot a few years out.

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3 hours ago, Talking Monkey said:

On a broader note both leveraged and unleveraged BTL needs to be cleared out, this hoarding of a basic of life has wreaked havoc on many lives as those with access to money have bought up and hoarded a necessity of life, pushing up the prices beyond the reach of regular folks. I can see leveraged BTL being absolutely hammered, but hope those with several paid of properties are pushed to sell by it becoming uneconomical to hoard housing, don't know how that second situation would come about

It would require a punitive taxation regime, or a sea change in the mindset of the man in the street. At the moment, property (even highly-leveraged BTL) is seen as a safe, wise investment, while unleveraged stocks and commodities investments are seen as very risky. Most people aren't very imaginative with their money and see owning a couple of houses as a passport to a life of ease.

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21 minutes ago, AWW said:

It would require a punitive taxation regime, or a sea change in the mindset of the man in the street. At the moment, property (even highly-leveraged BTL) is seen as a safe, wise investment, while unleveraged stocks and commodities investments are seen as very risky. Most people aren't very imaginative with their money and see owning a couple of houses as a passport to a life of ease.

I completely agree -- that's why I see UK property as following a decade+ slow grind down.  There might be a bit of a crash to start with, but we've got millions of people prepared to BTFD, and plenty of them with the funds to do so.

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