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Credit deflation and the reflation cycle to come.


DurhamBorn

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46 minutes ago, Barnsey said:

, am I right in thinking that if this is indeed the 80 year deflationary bust, that PMs will fall initially in the sell off,

 

Sorry if people already know, but for myself as mostly a reader here...where does all the money go when /if there is a sell off. Is this the million $ question ?

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2 hours ago, sancho panza said:

Some brave calls,but in gerenral

Agree,rally into Chriggy

Down in New year

Not sure the fed will reverse.US labour market is tight.

I think late 19/20 will eb buying time too.

I'm not so sure.Powell was picked to undo the damage the neo Classicals had done imho.Trump wasn't daft.First non neo classical in charge of teh Fed for decades.

I'm parroting a variety of economists and traders Sancho so it's an attempt to average out interesting views and make a possible path plot, lots of error likely but glad you're in some agreement as to the pattern. 

I think Dec hike is 100%, but this tight labour market is already starting to unwind, just not showing up in the mainstream media yet.

IMG_20181127_190302.jpg.af3c09a9a88233f760b801a4178e9313.jpg

Housing really starting to roll over now as you well know, and inevitably such issues will be at the front of Powell's mind as someone who is more data dependent than predecessors. Dallas seems to be the hub of the initial housing declines this time.

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54 minutes ago, Cattle Prod said:

Vodafone closed above its 100 DMA today, and crossed on the weekly MACD. Looks like it's bottoming, glad I held and added, locking in that juicy dividend!

Yeah,we only got a small tranche in.I'll wait now and see what happens.

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5 hours ago, Gin said:

Sorry if people already know, but for myself as mostly a reader here...where does all the money go when /if there is a sell off. Is this the million $ question ?

$ treasuries.10 year mostly.

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12 hours ago, Majorpain said:

Someone who worked on the refit of the Type 45 destroyers, with Chinese steel in places, remarked they looked in worse condition after 3 years than some of the 30 year old 100% British Type 42's.  Shaving a couple of % off the initial price to add on massive costs down the line is also a favourite tactic in construction!

That’s how they ended up with combustible cladding on Grenfell.. it was something like 25k more for the fire retardant cladding. Some bean counter could see acost saving.. 

short term gains are the reason for impending economic collapse.. 

like buy to leach that rapes the tenant until they retire and all end up on benefits with £1000 a week nursing home costs and not a pot to piss in,  bankrupting the country.. 

Privatising all our services to greedy parasites makes our economy unsustainable.. 

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8 hours ago, macca said:

That’s how they ended up with combustible cladding on Grenfell.. it was something like 25k more for the fire retardant cladding. Some bean counter could see acost saving.. 

That could well be the case, but don't know which bean counter and may never do. :ph34r:

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21 hours ago, Majorpain said:

Someone who worked on the refit of the Type 45 destroyers, with Chinese steel in places, remarked they looked in worse condition after 3 years than some of the 30 year old 100% British Type 42's.  Shaving a couple of % off the initial price to add on massive costs down the line is also a favourite tactic in construction!

Well we do it with our roads!...I was driving a minibus on the M25 yesterday and running diagonally along the lane was a joint so badly worn that it grabbed/snatched the wheels worse than tramlines...had to grip the steering!...can imagine with an iced road it would be an accident waiting to happen!

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On 25/11/2018 at 20:34, spygirl said:
  On 25/11/2018 at 16:18, Barnsey said:

Expect a more dovish tone from Powell at FOMC meeting on 19th Dec, setting the scene for a rate pause as housing already rolling over quite significantly. A pause of 6 months or so and then abrupt policy reversal in the summer is well within expectations due to the dramatic pace of the unfolding deflationary bust early next year.

 

On 25/11/2018 at 20:34, spygirl said:

Disagree.

US lsbour market is still beyond red hot.

They pause for a month or two. Maybe start beating banks up on some if their lending.

The majir cause of the last 20y  low wage griwth has been China. The rate at which works coming back to US is incredible. Its a flood.

I disagree.

https://www.nytimes.com/2018/11/26/business/general-motors-cutbacks.html

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On 26/11/2018 at 00:08, macca said:

Well Russia and China think gold and silver is going up.. they are buying tons of it.. 

 

 

On 26/11/2018 at 07:07, spygirl said:

No.

They backing out of dollar denominated/influenced assets.

 

Surely that's an oxymoron to coin a phrase. Why would they back out of these dollar holdings if the dollar is going to be the last man standing???

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4 minutes ago, NogintheNog said:

GM is fucked up compnay.

Itsl ike saying US is doing shit because GE has fallen.

The US labour market is beyond red hot.

GM is just full of idiot managers and old, unionised workforce.

This commentartor nails it:

https://www.bbc.co.uk/news/business-46350057

Wonderful photo shot of the GM Oshawa car park. A Range Rover, BMW and Audi all prominent and "hopefully" a GM truck? My god even the employees don't drive GM, so can't complain about redundancies if they don't even support their own company with subsidised cars.

GM, Chrysler and Ford "super executives" all flew in to Washington on Corporate Jets separately to plea for BILLIONS in subsidies.

1 minute ago, NogintheNog said:

 

Surely that's an oxymoron to coin a phrase. Why would they back out of these dollar holdings if the dollar is going to be the last man standing???

Becasue Russai and IRan - or rather any country that trades with them, doesnt want to risk the US goign after them.

You can trade with Russia or Iran or whoever is on the US bad boy list.

Just dont use dollars when doing it.

The ECB has decided that the Euro is not going to be a reserve currency.

 

 

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Everyone is watching Powell and the dollar, the Trump tax cut should be spent now so it will be interesting to see if he starts singing a different tune as the US economy weakens!

https://www.cnbc.com/2018/11/27/everyone-is-going-to-be-watching-powell-deliver-his-most-important-speech-yet.html

Quote

"We think Powell is a solid pragmatist who made one significant error this fall — declaring that 'we're a long way' from a neutral Fed funds rate," wrote Greg Valliere, chief global strategist at Horizon Investments. "That spooked the markets, which weren't prepared for such a hawkish pronouncement. The markets are looking for assurances that the Fed won't move too quickly — and Powell may offer some assurances on Wednesday."

 

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2 minutes ago, spygirl said:

GM is fucked up compnay.

Itsl ike saying US is doing shit because GE has fallen.

The US labour market is beyond red hot.

GM is just full of idiot managers and old, unionised workforce.

This commentartor nails it:

https://www.bbc.co.uk/news/business-46350057

Wonderful photo shot of the GM Oshawa car park. A Range Rover, BMW and Audi all prominent and "hopefully" a GM truck? My god even the employees don't drive GM, so can't complain about redundancies if they don't even support their own company with subsidised cars.

GM, Chrysler and Ford "super executives" all flew in to Washington on Corporate Jets separately to plea for BILLIONS in subsidies.

I certainly agree that GM is a fcuked up company. It reminds me a bit of the UK governments involvement in British Leyland all those years ago! GM, Chrysler-Fiat and Ford all got bailed in the 2008/9 financial crisis, and lets not forget the US import tax of 25% on imported trucks that 'protects' these producers in the US;

https://www.forbes.com/sites/doronlevin/2018/03/27/want-to-sink-detroit-automakers-make-a-trade-deal-that-weakens-tariff-protecting-pickups/

Quote

The tariff, established in 1963 as retaliation against European tariffs on imported chickens, has underpinned strong North American production of Ford F Series, Chevrolet Silverado and Ram pickups – extremely profitable vehicles that are the financial anchor of a U.S. industry which earns very little on passenger cars.

I'm sure these workers will get another job  when they are turfed out, but will they be manufacturing something, or will they be flipping burgers at MacDonalds?

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3 minutes ago, NogintheNog said:

I certainly agree that GM is a fcuked up company. It reminds me a bit of the UK governments involvement in British Leyland all those years ago! GM, Chrysler-Fiat and Ford all got bailed in the 2008/9 financial crisis, and lets not forget the US import tax of 25% on imported trucks that 'protects' these producers in the US;

https://www.forbes.com/sites/doronlevin/2018/03/27/want-to-sink-detroit-automakers-make-a-trade-deal-that-weakens-tariff-protecting-pickups/

I'm sure these workers will get another job  when they are turfed out, but will they be manufacturing something, or will they be flipping burgers at MacDonalds?

Nope.

Lets take Joe GM, age 55.

He''ll be pensioned off with full ehalthcare.

If he's inclined he'll take a job that pays waaaay more than MaccyDs.

One of the misconcpetions about AMerican wrokers is that they work themselves int othe grave.

SUre they work more hours than Europe - you can debate is they are productive or not.

But one of the things that I noticed, chatting to pepole, is they want to retire much earlier.

Teh US state pension is pretty good if youve worked. Combine that with a IRA or compnay pension and they are pretty flush.

(Northern) Europena workers wor to a much odler age than the US.

The US employment participation is much lower than Europe. One, lot of bennies suckers, Two, lot of people retired off i ntheir early 60s.

 

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2 minutes ago, Majorpain said:

US-new-house-supply-months-2004_2018-10.

https://wolfstreet.com/2018/11/28/supply-of-new-houses-spikes-to-highest-since-housing-bust-1/

Teeny tiny increase in interest rates and its like the world is ending.

Intu smashed today,car sales falling,Fed tightening the world into a debt deflation.Go Ahead decent however.Nice comment free cash flow is increasing due to falling investment and that the Pickmeup service now has 15k users in Oxford.It is likely still loss making,but its doing very very well.Macro conditions will ensure car ownership falls going forward and public transport rise again.Sharing is going to be a massive growth area in the next cycle over owning.Transport,and energy will see many more local solutions.

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Democorruptcy
17 minutes ago, DurhamBorn said:

Intu smashed today,car sales falling,Fed tightening the world into a debt deflation.Go Ahead decent however.Nice comment free cash flow is increasing due to falling investment and that the Pickmeup service now has 15k users in Oxford.It is likely still loss making,but its doing very very well.Macro conditions will ensure car ownership falls going forward and public transport rise again.Sharing is going to be a massive growth area in the next cycle over owning.Transport,and energy will see many more local solutions.

I came across with of these pickmeup services on holiday in Dovedale recently. Derbyshire council do one, book between 7 and 1 day in advance. Of course I didn't know about it until going to the bus "stop" when it was pissing it down. I had to carry on walking, there's no such thing as inclement weather, only incorrect clothing!

https://www.derbyshire.gov.uk/transport-roads/public-transport/news-notices/derbyshire-connect/derbyshire-connect.aspx

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58 minutes ago, DurhamBorn said:

Intu smashed today,car sales falling,Fed tightening the world into a debt deflation.Go Ahead decent however.Nice comment free cash flow is increasing due to falling investment and that the Pickmeup service now has 15k users in Oxford.It is likely still loss making,but its doing very very well.Macro conditions will ensure car ownership falls going forward and public transport rise again.Sharing is going to be a massive growth area in the next cycle over owning.Transport,and energy will see many more local solutions.

Intu is a big stinking dogturd, owned/controlled by an idiot who thinks its still 1987.

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Intu plunge quite something, had a price alert to buy some at 150p and it's sitting at 124p right now, staying on the sidelines even if the dividend yield is now close to 12% xD

Few other warning signs to watch today, WTI continues down despite Santa rally, Deutsche bank offices being searched this morning in money laundering probe (Lehman moment?), Swedish economy contracts for first time since 2014 (good leading indicator for eurozone), and UK consumer borrowing growth slowest since 2015.

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