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Credit deflation and the reflation cycle to come.


DurhamBorn

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Democorruptcy
8 minutes ago, Ponty Mython said:

Cheer up, it was down 75% an hour ago!

It does rather look that way.

They are going to steal it (Brexit), aren't they?

I've never thought that Bexit would happen, the establishment don't want it. The irony now is that Blair's New Labour was more big business/financial sector Conservative than the Tories. I don't think a Corbyn more Socialist party should want to stay in - but needs must? I don't want to turn this into a Brexit/Political thread but it seems relevant re Credit Deflation, sterling etc.

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8 minutes ago, Democorruptcy said:

I've never thought that Bexit would happen, the establishment don't want it. The irony now is that Blair's New Labour was more big business/financial sector Conservative than the Tories. I don't think a Corbyn more Socialist party should want to stay in - but needs must? I don't want to turn this into a Brexit/Political thread but it seems relevant re Credit Deflation, sterling etc.

We do well to avoid politics on here but some discussion is essential at the moment as this could go so many ways and is clearly having a huge effect in the short term at least, tomorrow's vote is the biggest thing to happen since the original one.

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For info, G10 spot desk and the propheads on the eTrading desk at my bank expect little if any movement in GBPUSD in the event of May's deal being rejected; in their opinion, it's already priced in.

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Democorruptcy
3 hours ago, Barnsey said:

We do well to avoid politics on here but some discussion is essential at the moment as this could go so many ways and is clearly having a huge effect in the short term at least, tomorrow's vote is the biggest thing to happen since the original one.

Vote just cancelled according to FT

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14 hours ago, Democorruptcy said:

Not long apparently

https://wolfstreet.com/2018/12/05/san-francisco-house-condo-bubble-prices-fall/

House prices down $265,000 from peak, down $60,000 from year ago. America’s most majestic housing bubble begins to deflate.

In San Francisco, the median price of single-family house sales that closed in November fell to $1.435 million. This is down a blistering $265,000 or 15.5% from the crazy peak in February of $1.7 million – a time when only the sky was the limit. And down by $60,000 from November 2017. This puts the median house price below where it had first been in May 2017. Note the steep slope from the peak in February:

US-San-Francisco-Housing-Median-Price-houses-2018-11-1-1.png

 

https://wolfstreet.com/2018/12/04/california-housing-market-in-for-serious-trouble-foreign-home-buyers/

Why California’s Housing Market is in for Serious Trouble

by Wolf Richter • Dec 4, 2018 • 112 Comments

Homebuilder Toll Brothers just said it out loud.

High-end homebuilder Toll Brothers, when it announced earnings this morning, made some peculiar comments.

Not so peculiar was the plunge in new orders in its fourth quarter, ended October 31: New orders dropped 13.3% from a year ago to 1,715 units. In California, Toll Brothers’ largest market by revenue, new orders plunged 39.4% to just 226 units. Toll Brothers also slashed its guidance for home sales in its fiscal year 2019. This is not so peculiar because I already reported on the drop in new home prices across the US, amid unsold inventory of new homes that has ballooned to 7.4 months supply, the highest since February 2011, toward the end of Housing Bust 1.

Here is the peculiar part in its announcement concerning new orders (emphasis added):

“California has seen the biggest decline. Significant price appreciation over the past few years, fewer foreign buyers in certain communities, and the impact of rising interest rates all contributed to this slowdown.”

In-migration: In 2017, a total of 523,000 people moved from other states to California. These are the top states from where people moved to California (data provided by the Census Bureau and real state brokerage Compass) :

  1. Texas: 41,000
  2. New York: 34,300
  3. Washington: 33,100
  4. Illinois: 27,100
  5. Arizona: 26,900
  6. Colorado: 25,000
  7. Florida: 24,600
  8. Nevada: 23,800

Out-migration: In 2017, a total of 661,000 moved from California to other states. These are the top destination states for Californians:

  1. Texas: 63,200
  2. Arizona: 59,000
  3. Washington: 52,500
  4. Oregon: 50,100
  5. Nevada: 47,500
  6. Florida: 30,900
  7. Colorado: 27,000
  8. New York: 25,000

 

 

Great po0dcast from Wolf here.Title tells you what's in it.

https://wolfstreet.com/2018/12/09/west-coast-housing-bubble-bursts-even-without-tech-bust/

The West Coast Housing Bubble Bursts Even Without Tech Bust, which is still to come.

 

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5 hours ago, Democorruptcy said:

Thread favourites CNA, SSE & RMG having a bad day so far. Presumably due to fear of a general election and Corbyn getting in. EU judges rule we can unilaterally exit the Brexit exit, so Labour could win the election with staying in the EU as their manifesto and the Tories in disarray.

I have a view that Corbyn won't be PM.His main achievemnet has been to make Theresa competitive.Same for her really-I don't/won't vote for either btw.I suspect the Tories will deliver brexit as the option of ducking out just isn't really on the table.And I don't think we'll eb having a GE anytime soon.

The first rule of Tory politics is to survive,second to control.They are the giant squid of British politics.Thus I think they'll ditch may as leader,either take a no deal or take a slightly modified one(the EU won't concede much more,talking to my dad who's prop EU and lives over there,the desire to keep us in has waned) and then in a year or 2022 we;'ll get our GE when their new leader has settled in.

4 hours ago, Barnsey said:

Interserve down 46% this morning :ph34r:

That's a fair effort even by Thomas Cook standards.

image.thumb.png.1b05f6f83ff6049c83c16c964588d598.png

 

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What a Monday this is turning out to be! As @Democorruptcy points out, vote delayed/cancelled, £ hits 18 month low, Qualcomm win their sales ban on iPhones in China, Interserve shares crashed and ISS announced 100,000 layoffs, Paul Tudor Jones has said he doesn't expect any Fed hikes in 2019, and in the chaos of today Sadiq Khan slips Crossrail another £1bn.

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Democorruptcy
30 minutes ago, sancho panza said:

I have a view that Corbyn won't be PM.His main achievemnet has been to make Theresa competitive.Same for her really-I don't/won't vote for either btw.I suspect the Tories will deliver brexit as the option of ducking out just isn't really on the table.And I don't think we'll eb having a GE anytime soon.

The first rule of Tory politics is to survive,second to control.They are the giant squid of British politics.Thus I think they'll ditch may as leader,either take a no deal or take a slightly modified one(the EU won't concede much more,talking to my dad who's prop EU and lives over there,the desire to keep us in has waned) and then in a year or 2022 we;'ll get our GE when their new leader has settled in.

The Tories did call the last election when they already had a majority, so I wouldn't rule anything out now.

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1 minute ago, Democorruptcy said:

The Tories did call the last election when they already had a majority, so I wouldn't rule anything out now.

If they went now,they'd lose control.Why would they go?

 

I'm open to your logic Dm and here to learn, but I can't see any viable reason for them to do it? 

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Democorruptcy
3 minutes ago, sancho panza said:

If they went now,they'd lose control.Why would they go?

 

I'm open to your logic Dm and here to learn, but I can't see any viable reason for them to do it? 

They lost control when they called the last election and now have to depend on the DUP. There are 2 reasons to call an election now, one is to try win back a majority, the other is to scupper Brexit. I'm not suggesting they should call an election, if I were them I'd try muddle on with a new leader. All I'm trying to do is look at why some shares are acting the way they are. Clearly utilities are not doing well today and I think that could be because someone thinks there might be an election.

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5 minutes ago, Democorruptcy said:

They lost control when they called the last election and now have to depend on the DUP. There are 2 reasons to call an election now, one is to try win back a majority, the other is to scupper Brexit. I'm not suggesting they should call an election, if I were them I'd try muddle on with a new leader. All I'm trying to do is look at why some shares are acting the way they are. Clearly utilities are not doing well today and I think that could be because someone thinks there might be an election.

Roger that,

My strategy at the moment is trying to work out all the angles and then pick the most likely course.

Both of those reasons you cite,make sense but I don't see them bvringing the tories into a GE.Fisrtly,chance of a majority is very slim.Second,I'm not sure the remianer rump is brave enough to face their memberships(who are mostly Eurosceptic).The latter is the more compelling reason.

I think they'll follow your logic and try to mddle on with new leader.If I wasn't paying 25% commission on BF I'd be laying johnson.

 

Have you got a view on where your money would be?Edit to add-I'm clueless on that score at the mo.

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https://www.cnbc.com/2018/12/10/tudor-jones-predicts-fed-will-not-hike-rates-in-2019-after-raise-in-december.html

Quote

"The one thing I would say is there's a high probability that this hike, assuming they hike, will be the last one for a long time," Jones told CNBC's Andrew Ross Sorkin during a "Squawk Box" interview.

Using the Goldman Sachs commodity index as a baseline, Jones said prices are down 15 percent over the past 40 days. That gives the Fed no impulse to rate rates, he added.

"Never in the history of the Fed have we had that kind of deflationary impulse eight days before a hike," he said.

Markets largely agree with that call.

Gotta admit the much touted Santa rally (even by the bears) is looking less likely, but you never know, if Powell says he's pausing on Dec 19th then maybe it'll provide the ammo needed, otherwise can't see a way out.

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Democorruptcy
9 minutes ago, sancho panza said:

Roger that,

My strategy at the moment is trying to work out all the angles and then pick the most likely course.

Both of those reasons you cite,make sense but I don't see them bvringing the tories into a GE.Fisrtly,chance of a majority is very slim.Second,I'm not sure the remianer rump is brave enough to face their memberships(who are mostly Eurosceptic).The latter is the more compelling reason.

I think they'll follow your logic and try to mddle on with new leader.If I wasn't paying 25% commission on BF I'd be laying johnson.

 

Have you got a view on where your money would be?Edit to add-I'm clueless on that score at the mo.

If I was forced to put a bet on the next Tory leader it would be Sajid Javid. I think he's just thrown his hat in the ring. £1bn for Crossrail and a pollution tax. I see that as him trying to win over big business by making the little people pay more.

I don't favour any party in our broken system so don't vote. Though I did put my name on the electoral roll this year because I think I will have to be on it for my helicopter money.

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2 minutes ago, Democorruptcy said:

If I was forced to put a bet on the next Tory leader it would be Sajid Javid. I think he's just thrown his hat in the ring. £1bn for Crossrail and a pollution tax. I see that as him trying to win over big business by making the little people pay more.

I don't favour any party in our broken system so don't vote. Though I did put my name on the electoral roll this year because I think I will have to be on it for my helicopter money.

Sajid Javid has a lot of promise, but he's a remainer, so we'll have to see what happens next...

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Democorruptcy
34 minutes ago, Barnsey said:

https://www.cnbc.com/2018/12/10/tudor-jones-predicts-fed-will-not-hike-rates-in-2019-after-raise-in-december.html

Gotta admit the much touted Santa rally (even by the bears) is looking less likely, but you never know, if Powell says he's pausing on Dec 19th then maybe it'll provide the ammo needed, otherwise can't see a way out.

The FTSE heat map looks like a bloodbath today but at the moment it's only down 13pts  -0.13%

Randgold (RRS) has gone up about 4% so +240 points.

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25 minutes ago, Democorruptcy said:

The FTSE heat map looks like a bloodbath today but at the moment it's only down 13pts  -0.13%

Randgold (RRS) has gone up about 4% so +240 points.

SPX just broke through 2600 :ph34r::ph34r::ph34r:

£ now at 20 month low

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4 hours ago, Barnsey said:

SPX just broke through 2600 :ph34r::ph34r::ph34r:

£ now at 20 month low

FED rate rise still coming 18th/19th dec? 

BOE 20th Dec?

There is much more going on in the Economy than Brexit, you can see that across the world.. 

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5 hours ago, Democorruptcy said:

If I was forced to put a bet on the next Tory leader it would be Sajid Javid. I think he's just thrown his hat in the ring. £1bn for Crossrail and a pollution tax. I see that as him trying to win over big business by making the little people pay more.

I don't favour any party in our broken system so don't vote. Though I did put my name on the electoral roll this year because I think I will have to be on it for my helicopter money.

I've jsut had a whizz on BF and the top spots all look uninspriing and poor value.

Bojo-just not gonna happen

Raab-he'll be competitive

Sajid-competitive

Hunt-maybe 20 years ago

Gove-can't see it

Rudd-No and her seat will likely be lsot at eht next GE

Davis-missed his chance ten years ago

Leadsom-had her best shot 2016,failed to beat one of the wrost candidates for the office....ever.

Mogg-doesn't want it

Geoffrey Cox-never heard of him

Mordaunt-could be a surprise

Lidington-Never heard of him

McVey-no

Hammond-not competitive

Priti Patel-I think she'd be competitive

Tugendaht/Stewart/Williamson/Grieve/Hancoick/Truss/Hinds/Fox/Brokenshire-not competitive

 

Among the also rans are some pontetial outliers

Mercer/Kwarteng/Davidson/Gyimah

 

As I've said,not a strong field and could beg thrown wide open.

 

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