Credit deflation and the reflation cycle to come.

[Errol]

The Stock Market Would Crash Without Central Bank Support

http://investmentresearchdynamics.com/the-stock-market-would-crash-without-central-bank-support/

[Lightscribe]

 

3 hours ago, DurhamBorn said:

They really are great Craig.Not often id pay £80 for something like this,but worth every penny.I actually bought a good food processor as well with the dough attachment as that makes making the dough a doddle.Takes a bit getting used to how to get the temp to work best.I turn up full until light goes off,then turn down a bit and wait.As soon as it kicks back into heating i put pizza in,as that means top rings are on as well.Fantastic pizza every time.If im doing for family il have the pizza bases rolled out ready and do each one as ones cooking.12 minutes for 3.I buy a lot of toppings from the reduced counter in Tesco,bits of cooked chicken,ham,salami etc.I find the Sainsbury pasta flour is worth paying for.Its £1.10 for a bag,but about 6 pizzas from it and much better than cheaper flour.I need to practice a bit more on other breads like you say.One of the best things i ever bought.

When you say greased pizza tin,do you mean you put the tin inside the pizza maker?,

We haven't had a discount post in a while, so I take it you're still working your way through your chest freezer DB as well as your bargain pizzas. Pretty happy with my haul this evening, cleaned Iceland out of frozen low fat steak mince in their clearance section as well as the usual half price pork chops. They also decided to get rid of their frozen xmas turkey joints (a bit late I know but still) so they finally appeared in the clearance section, so along with the 10% iceland card discount in January I thought may as well so cooking one of them tonight which will last me a few dinners/lunches for work.

Investment wise I think we may be starting to see your initial run in PMs DB, I've been investing my main allocation into Hochschild (as well as GDX/J and physical ETFs) as discussed before (and which I believe MajorPain is also doing), if this is the start of a run, we'll see if they do suspend Arcata, but I like the low debt aspect, geographical area of operations and potential as well as the CEO having skin in  the game.

So now turning my attention to VOD and RM and will gradually start to increase my allocation there.

[DurhamBorn]

3 hours ago, Craig said:

Yep, just use one of those trays with the holes in it. Found getting the pizza onto the stone too problematic, and the base had a habit of burning before the top was fully cooked. This way you can put the toppings on then transfer it easily.

The other thing I've found is that the dough just gets better and better the longer you prove it for. Usually do it in the fridge for at least 2-3 hours before shaping the bases. Gives it a much better texture and rises better.

Great tip thankyou,iv just ordered a few of those trays 11" ones.That was the one downside leaving a bit on the stone then burning so great idea.

[sleepwello'nights]

Just got an email notifying me that my Freetrade application has now reached the front of the queue. Made my application on Sun 20th, my position was 75000 ish.

[Harley]

1 hour ago, Sideysid said:

We haven't had a discount post in a while, so I take it you're still working your way through your chest freezer DB as well as your bargain pizzas. Pretty happy with my haul this evening, cleaned Iceland out of frozen low fat steak mince in their clearance section as well as the usual half price pork chops. They also decided to get rid of their frozen xmas turkey joints (a bit late I know but still) so they finally appeared in the clearance section, so along with the 10% iceland card discount in January I thought may as well so cooking one of them tonight which will last me a few dinners/lunches for work.

Yet again, the yellow sticker reductions were pathetic today.  Co-op this time.  Circa 10%.  The Co-op used to be really good.  Helped me decide what to eat each night!

[Harley]

I was playing with my charts (cross market analysis) and was a bit shocked with the very long term performance of GBP.  I don't think I had fully appreciated how rubbish it has been as a store of value, way before Brexit.  No wonder people feel poor and have had such a hit to real earnings.  Taking my charts back as far as I can, cable is down 34% since 2008, the FTSE100 up an equal 34%, and gold (in GBP) is up 125%.  The S&P (in USD) is up 92%.

Things are looking a bit better for cable now but the damage has been done.  Holding GBP cash has been hideous!

Stealth devaluation (along with mass immigration, etc) seems to have kept the plates spinning.  But a facade.

 

[DurhamBorn]

2 hours ago, Sideysid said:

 

We haven't had a discount post in a while, so I take it you're still working your way through your chest freezer DB as well as your bargain pizzas. Pretty happy with my haul this evening, cleaned Iceland out of frozen low fat steak mince in their clearance section as well as the usual half price pork chops. They also decided to get rid of their frozen xmas turkey joints (a bit late I know but still) so they finally appeared in the clearance section, so along with the 10% iceland card discount in January I thought may as well so cooking one of them tonight which will last me a few dinners/lunches for work.

Investment wise I think we may be starting to see your initial run in PMs DB, I've been investing my main allocation into Hochschild (as well as GDX/J and physical ETFs) as discussed before (and which I believe MajorPain is also doing), if this is the start of a run, we'll see if they do suspend Arcata, but I like the low debt aspect, geographical area of operations and potential as well as the CEO having skin in  the game.

So now turning my attention to VOD and RM and will gradually start to increase my allocation there.

I do see a possible up to $1350 in gold then down to $1240 into May/June before we really start to trend up to $1500+.The range out to 2028 points to $6800 gold as likely ($10,000 outlier) and silver $200,maybe $700 outlier.If PMs do go up then down into May that will provide a perfect set up to go long for anyone who isnt.GDX perhaps to $23+ then down to $19.80,then trend up.Life changing amounts will probably be made in the sector in the next cycle as the biggest silver bull in history unfolds.

On discounts im still getting plenty,i just dont go as often as im working shifts at the moment and had my contract extended.Suits me for now,first few months went into silver miners that have bounced very nicely.Iv also been busy getting a few years worth of clothes in on Ebay.I buy in Jan on auctions as i find lots selling and few bidders as all skint.Got a load of stuff for pennies,really nice coats for £1.70 bids etc.

 

[VeryMeanReversion]

9 hours ago, Harley said:

I was playing with my charts (cross market analysis) and was a bit shocked with the very long term performance of GBP.  I don't think I had fully appreciated how rubbish it has been as a store of value, way before Brexit.  No wonder people feel poor and have had such a hit to real earnings.  Taking my charts back as far as I can, cable is down 34% since 2008, the FTSE100 up an equal 34%, and gold (in GBP) is up 125%.  The S&P (in USD) is up 92%.

It was in 2008 that I finally realised what was going to happen to my sell-to-rent fund and other savings. I decided to minimise spending and dump everything I could into real assets (rather than the government wish that I spend it all on consumer stuff).  My only debt is a mortgage at <20% LTV.  I have very little cash (just enough for bills) and very little cash in pension (<3%).

50% of assets is house equity. Paid £X, worth £1.5X now but development plot in garden worth another £1.5X. So 3X overall. (Subject to a housing crash)

45% of assets is in SIPP (mostly UK based equities with foreign earnings but some silver/platinum ETFs at ~10% of SIPP) - spinning off 5% divis per year. Risk of a stock market crash.

5% of assets is cars etc. (two depreciating quickly, two appreciating slowly).

I just don't fancy cash or bonds. Seems like a guaranteed loser.

 

 

 

 

 

[Harley]

10 hours ago, Harley said:

Taking my charts back as far as I can, cable is down 34% since 2008, the FTSE100 up an equal 34%, and gold (in GBP) is up 125%.  The S&P (in USD) is up 92%.

Apologies, FTSE100 up 15%.  It was another market (DAX?) up 35%.

[Craig]

15 hours ago, Bobthebuilder said:

An old pizza shop trick is to leave the dough to prove for 24 hours in the fridge. Puffs up a treat in the pizza oven, they do this as you get a bit more out of your dough. It really does work.

Indeed. This website - https://slice.seriouseats.com/2010/09/the-pizza-lab-how-long-should-i-let-my-dough-cold-ferment.html - suggests up to five days of cold fermentation. Never tried it, will get round to it one day.

Apologies for turning this into a pizza chat forum. Now how about that reflation cycle?!

[Harley]

5 minutes ago, VeryMeanReversion said:

It was in 2008 that I finally realised what was going to happen to my sell-to-rent fund and other savings.

.....

Well done!  I knew cash was trash the first time the BoE did QE but was like a rabbit in the headlights, did not have my financial sh*t together, and had other things going on.  I stayed mainly in cash.  It was an expensive lesson, but 3 months hard graft researching and building my systems, etc got me sorted.  I've still got much to do but at least I learnt, picked myself up, focussed, and got on with it.  It's really important to do this sort of comparative analysis as the value of anything is always relative.  Just basing everything in GBP terms is a bit like bubble thinking.  You always need to be watching your back!

[Harley]

6 minutes ago, Craig said:

........

Apologies for turning this into a pizza chat forum. Now how about that reflation cycle?!

"Pizza, pizza, pizza" is the mock emergency call in the PADI practical dive rescue course (to avoid initiating a real emergency) so not all together irrelevant!

[sancho panza]

12 hours ago, DurhamBorn said:

I do see a possible up to $1350 in gold then down to $1240 into May/June before we really start to trend up to $1500+.The range out to 2028 points to $6800 gold as likely ($10,000 outlier) and silver $200,maybe $700 outlier.If PMs do go up then down into May that will provide a perfect set up to go long for anyone who isnt.GDX perhaps to $23+ then down to $19.80,then trend up.Life changing amounts will probably be made in the sector in the next cycle as the biggest silver bull in history unfolds.

 

Worth noting GDX/XAU/GDXJ all only recovering losses since July/Aug 18.Within those frameworks there's still a few decent looking charts,but there's undoubtedly upward pressure now.Long term, all those charts are pretty beaten up,especially if you go back to 2000 which was the last big dip before 2015.

I've been buying individual stocks-sometimes to our cost eg Eldorado/New gold but considering starting to buy the ETF's so we're taking a punt and trying to create some alpha with individual stocks but then backing up those with some passive investments to reduce beta.

After the recent steep climb,we're due a pause for breath imho but then with these PM stocks you never quite know.

Worth noting the sharp rally in FTSE 100 stocks including some favourite yoyo shorts eg BDEV which I've been in and out of 3 times since mid 2018.My trip away was fortuitously timed to keep me out of getting hosed......

As ever,not a lot of media coverage that we're in a bear market but going to be interesting to see how the PM miners perform when we get another sell off.

[sancho panza]

@Barnsey

Wolf covering a few airlines heading sotuh.Doesn't mention Flybe.

https://wolfstreet.com/2019/01/26/low-cost-airlines-crash-into-bankruptcy-one-after-the-other-as-financial-conditions-tighten-in-europe/

But these “loss-making” airlines have started to feel the pinch, more from their own assorted financial shenanigans and excessively ambitious expansion plans than from tightening financial conditions.

Small Planet Group, the Lithuania-based owner of the Small Planet-branded family of airlines, announced on 24 October 2018 that it was seeking bankruptcy protection. The group had already accumulated over €17 million in debt by the end of 2017.

Germania, a Berlin-based airline once known as SAT (Special Air Transport), announced on 8 January 2019 that it may have to liquidate “short-term” unless a buyer is found due to having accumulated heavy losses for every operating year starting in 2013 and being short on liquidity.

Germania used to be an unexciting but profitable airline until the owners fell victim to a common disease in the airline business: overexpansion. This frenzied expansion may have brought higher revenues, but completely wiped out profits and turned them into steady losses, which have oscillated between €7 million and €26 million for every year since 2013.

This same monetary lunacy has fueled all sorts of financial shenanigans and lent credibility to dubious business schemes that would have otherwise found nobody willing to finance them.

VLM Airlines, for example, which is already defunct. Brussels-based VLM was born in 2014, when the Air France-KLM Group decided to sell off their CityJet subsidiary to a group of private investors. These new owners split CityJet in two, with VLM Airlines becoming the leasing arm of the group. However, in late 2014, VLM Airlines became an independent entity following a management buyout and started to implement what I can only call an interesting business model: taking over routes that had been dropped by other airlines for being unprofitable and/or in low demand.

VLM’s second short life...  In September 2016, SHS Aviation, a Dutch company, announced the purchase of VLM Airlines while the industry scratched its collective head over the reasons behind this purchase.

Following an ill-judged bout of expansion which saw among other things VLM take over the remains of Thomas Cook’s Belgian operations in October 2017, the airline started to have serious liquidity issues which a desperate change of ownership in August 2018 could not solve, so in December 2018, VLM Airlines finally filed for bankruptcy.

Norwegian Air Shuttle, the airline version of Netflix, announced on 19 January 2019 the closure of its bases in Rome (Italy), Providence and Stewart (USA), Gran Canaria, Palma de Mallorca and Tenerife (all in Spain) as a cost-cutting measure. 

And as Norwegian’s financial woes continue (2018 financial results will be released in February, as is usual with Norwegian public companies), the whole maxi-order for 95 Airbus A320neo is being “reconsidered.”

Very much like Netflix, Norwegian is a media darling that can do no wrong. The closure of these bases and the financial backing (or lack of) for such a huge aircraft order have been completely buried by a far more important piece of news: Norwegian will be upgrading the free WiFi service on many of their flights. Obviously, no mention of how a company with serious cashflow issues is going to be able to offer customers more freebies.

If you are scratching your head as to why stock markets are partying like it’s January 2018 while bad news pile up from China to Germany, look no further.

Joon… Air France announced that it is shutting down its Joon brand: The aircraft and the crews will be quietly absorbed back into Air France and the experiment hopefully forgotten. Joon operations began in December 2017.

Joon was an attempt to build a “fashionable” low cost carrier which failed miserably due to no real cost savings over any legacy carrier: Flight crews were paid exactly the same as Air France’s but were made to wear uniforms made from 60% recycled plastic, aircraft were mostly older Airbus models with ever increasing maintenance costs, and catering turned out to be a financial black hole.

Instead of either giving passengers simple prepackaged food and drinks (like Peach) or just having them pay for refreshments (like Ryanair), Joon offered a choice of highly fashionable organic food and drink, including craft beer “loaded with obscene amounts of hops” according to those who tried it.

Joon was instantly branded “a flying rooftop bar” and made the butt of endless jokes but, most critically, turned out to be an embarrassing failure for Air France’s old management, now firmly in the sights of the new CEO, Benjamin Smith (formerly of Air Canada).

And remember: In spite of all the wailing and gnashing of teeth, these are still good times. Credit conditions throughout Europe remain extraordinarily favorable and any Quantitative Tightening is still in the distant future together with any interest rate “normalization.” Passenger numbers, no doubt buoyed by incredibly low fares offered by low cost carriers, keep on rising.

But the “profitless growth” model has finally started to show its limits, and I fully expect many other airlines with questionable business models to join the Small Planet, Azur Air Germany, Primera Air and SkyWork of this world in bankruptcy court.

[Democorruptcy]

12 hours ago, DurhamBorn said:

I do see a possible up to $1350 in gold then down to $1240 into May/June before we really start to trend up to $1500+.The range out to 2028 points to $6800 gold as likely ($10,000 outlier) and silver $200,maybe $700 outlier.If PMs do go up then down into May that will provide a perfect set up to go long for anyone who isnt.GDX perhaps to $23+ then down to $19.80,then trend up.Life changing amounts will probably be made in the sector in the next cycle as the biggest silver bull in history unfolds.

On discounts im still getting plenty,i just dont go as often as im working shifts at the moment and had my contract extended.Suits me for now,first few months went into silver miners that have bounced very nicely.Iv also been busy getting a few years worth of clothes in on Ebay.I buy in Jan on auctions as i find lots selling and few bidders as all skint.Got a load of stuff for pennies,really nice coats for £1.70 bids etc.

 

I thought you had a potential big drop down after the initial rise? Is that still on after the 1500 or is the bottom now just the 1240?

[Lavalas]

2 hours ago, Craig said:

Apologies for turning this into a pizza chat forum. Now how about that reflation cycle?!

I get right irked if the thread ever deviates onto people arguing about Brexit (or arguing about anything) but honestly for me we could just forget deflation and talk about pizza all day.

[Thorn]

1 hour ago, Lavalas said:

I get right irked if the thread ever deviates onto people arguing about Brexit (or arguing about anything) but honestly for me we could just forget deflation and talk about pizza all day.

I agree.

Was just in Tesco checking out their 31cm pizza base trays for the pizza machine- £3.... 

whilst mulling how on how the pm miners will fare if gold hits 1340.

might then be time to sell half of them and maybe buy them back again if gold drops to 1260.

[Lightscribe]

48 minutes ago, Thorn said:

I agree.

Was just in Tesco checking out their 31cm pizza base trays for the pizza machine- £3.... 

whilst mulling how on how the pm miners will fare if gold hits 1340.

Why not combine both? A bit steep at £500 and even looks like their standard spongey foam base though unfortunately.

http://www.pizzagogo.co.uk/gold-pizza

[kibuc]

16 hours ago, DurhamBorn said:

I do see a possible up to $1350 in gold then down to $1240 into May/June before we really start to trend up to $1500+.The range out to 2028 points to $6800 gold as likely ($10,000 outlier) and silver $200,maybe $700 outlier.If PMs do go up then down into May that will provide a perfect set up to go long for anyone who isnt.GDX perhaps to $23+ then down to $19.80,then trend up.Life changing amounts will probably be made in the sector in the next cycle as the biggest silver bull in history unfolds.

Are there any specific silver plays you have in mind? Mine was planned to be Tahoe, but it's been taken off the table and I don't think PAAS offers the same amount of leverage. A properly beaten-up, indebted silver intermediate would probably be best, but I have zero knowledge of that sector. First Majestic perphaps? I'm a bit weary of them after that pumpy-dumpy earlier in the Summer.

[DoINeedOne]

Eldorado Gold Corporation

NYSE: EGO (USD)

 $3.68 0.75 (25.17%)

I am still down 20% 

 

[DurhamBorn]

3 hours ago, sancho panza said:

Worth noting GDX/XAU/GDXJ all only recovering losses since July/Aug 18.Within those frameworks there's still a few decent looking charts,but there's undoubtedly upward pressure now.Long term, all those charts are pretty beaten up,especially if you go back to 2000 which was the last big dip before 2015.

I've been buying individual stocks-sometimes to our cost eg Eldorado/New gold but considering starting to buy the ETF's so we're taking a punt and trying to create some alpha with individual stocks but then backing up those with some passive investments to reduce beta.

After the recent steep climb,we're due a pause for breath imho but then with these PM stocks you never quite know.

Worth noting the sharp rally in FTSE 100 stocks including some favourite yoyo shorts eg BDEV which I've been in and out of 3 times since mid 2018.My trip away was fortuitously timed to keep me out of getting hosed......

As ever,not a lot of media coverage that we're in a bear market but going to be interesting to see how the PM miners perform when we get another sell off.

Iv taken some profits out SP and sold a few miners.Iv just a few minutes ago sold Yamana.Id had them a while and had 6 ladders in them and they finally pushed into a 15% profit today.Il re-enter if they go down 20%.They have been a long haul,i entered them too early,but happy to get out now with a profit.No problem with the stock,but i have a big PM portfolio and happy to lock that in and re-enter,and if not and it keeps going happy anyway.The only one im down on now is Eldorado and i actually sold a few of those down 30% and put the capital into some silver miners before they started to run up.I also top sliced Harmony as they went over 2.00.Big holding and the profits taken mean i can see a 25% cut in the price from here to break even.Happy with that and now the amount owed. (i had slightly too big a weighting)

Iv still got most of my miners ,leaning to silver and all in good shape,with capital on the side if there is a pullback.One thing im pretty sure of is that if there is then around May gold and the miners will then trend in a strong wave with GDX to around 36.Reason is i see the dollar really starting to go down around that time frame.So id be happy if they keep trending now,but if they do pull back il be happy to take the chance to add to some miners for probably the last chance.

Like you say nobody seems to see we are in a bear market.The mega caps holding up had hidden the fact.In $s though many decent quality FTSE 100/250 stocks are down 70%+ from highs.

 

[DurhamBorn]

13 minutes ago, kibuc said:

Are there any specific silver plays you have in mind? Mine was planned to be Tahoe, but it's been taken off the table and I don't think PAAS offers the same amount of leverage. A properly beaten-up, indebted silver intermediate would probably be best, but I have zero knowledge of that sector. First Majestic perphaps? I'm a bit weary of them after that pumpy-dumpy earlier in the Summer.

Endeavour Silver,Coeur mining,Hecla Mining and several others depending on pricing and what i already own as i already own most and it would be top ups.

 

[DurhamBorn]

3 hours ago, Democorruptcy said:

I thought you had a potential big drop down after the initial rise? Is that still on after the 1500 or is the bottom now just the 1240?

I still think it is on after $1500,though im no way certain.My main concern is not seeing falls,its not owning the complex when it runs.Its highly likely if we do hit the $1500 level il sell some,but hold the rest.

[DurhamBorn]

22 minutes ago, DoINeedOne said:

Eldorado Gold Corporation

NYSE: EGO (USD)

 $3.68 0.75 (25.17%)

I am still down 20% 

 

Rubber band stock dogs doing what they do snap back.I sold some of mine and im still down a bit on them,but now not a big amount so thank goodness they scrapped that mill project in Turkey and the leaching is working.They couldnt afford to build a mill,hence the market being happy.If they get the Greek permits next they could fly.Eldorado top dog 

[DoINeedOne]

1 minute ago, DurhamBorn said:

Rubber band stock dogs doing what they do snap back.I sold some of mine and im still down a bit on them,but now not a big amount so thank goodness they scrapped that mill project in Turkey and the leaching is working.They couldnt afford to build a mill,hence the market being happy.If they get the Greek permits next they could fly.Eldorado top dog 

Yeah I didn't put much into them was more of a little bet for me if the Greece project finally came through