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Credit deflation and the reflation cycle to come.


DurhamBorn

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8 hours ago, sancho panza said:

https://wolfstreet.com/2019/03/03/us-manufacturing-growth-slowing-as-exporters-china-japan-germany-sink/

 

These PMIs are a quantified boots-on-the-ground view by panelists who see how their company are being impacted by economic developments. They can get outright gloomy in the run-up to a crisis, such as the European Debt crisis from 2010-2012, and have proven to be fairly accurate predictors of manufacturing data coming down the pike.

These PMIs are a scale for global demand and regional within the goods-based economy, giving an advance glimpse of official manufacturing data one or two months later. And for now, the US manufacturing sector is hanging on, even as manufacturers in China, Japan, and Germany are losing grip.

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Your post Sancho perfectly highlights the short term flight to $, we're in a ridiculous phase now where everyone's convinced we can have a global recession which excludes USA, when of course those of us paying attention recognise that whilst it may be one of the last to fall, it'll be catastrophic given it's current height off the ground.

Interesting to read that credit card interest rates over there are now the highest they've been in over 20 years!

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15 hours ago, StrugglingMillennial said:

Ive managed to squirrel away some silver for the rainy day that should soon be upon us but does anyone know of any solid silver miners that would be a good buy when things wobble?

There is a thread maybe a dozen pages back by either dB or others that lists a few silver heavy miners.  Honestly don't think anybody here would be able to nominate one over any others.  In my very imperfect opinion there a gamble as is so personally I would be looking to take a spread of them ( spray n pray?). 

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I probably should have bought earlier when DB first started talking about the bust but decided to get going in Jan since I needed to know how it all works with divis/fees etc being new to the game.  I don't have enough to play with to make "laddering" much good because of the costs of buying so it's straight in head-first.  So far so good except I'm down overall apart from the 2 transports (Stagecoach and Go-Ahead).  But it's all a learning curve for me so I shall bide my time.  At least I haven't got any Debenhams shares:).  Most of my funds are in cash though.

The real winners in all this are the brokers with their around £10 buy/sell fees and their admin cost for holding the account.  In the old days there were no nominee accounts and you kept the certs at home.  I once had a job filing contract notes in a stockbroker and saw some of the trades day-traders were making when it was a newish thing.  The best deals for the brokers were probates -- one lot of fees for valuing the portfolio and another lot for selling the shares.  If I'd stayed and worked my way up I'd be quids in................-_-

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19 hours ago, Errol said:

F88k the EU. We don't want an extension.

Errol, don’t get me wrong, I’m an out-out kind of guy… the point I was making about the rumoured 19-month extension was that that particular schedule would be to the benefit of the EU.

18 hours ago, Barnsey said:

Apologies for not contributing much lately, not making any criticisms whatsoever but the thread has focused greatly on gold stocks of late, not something I dare dabble in until we enter a clear uptrend and I don't think we're there yet as see it's liquidity as key in the deflationary bust as folks find their ETFs enter a coordinated algo driven death spiral.

As for where I think we are right now (ALWAYS focused on U.S.), well we've clearly seen the melt up in US stocks take place (and is as of today creaking), almost unprecedented in it's pace of recovery. We're just 3 months away now from seeing the longest growth cycle in recorded history. Recession probability for 2019 now stands at 80% (Ned Davis at 96%). Strangely, despite the incredible dovishness from the Fed which largely served to spur the rally, we're now hearing commentary suggesting we may NOT have seen the last Fed hike, well done @spygirl 🏆 for predicting this.  What's crucial to think about is that unemployment turned upwards in Sept, so must pay close attention going forward. DXY likely to strengthen given relative strength of U.S. vs rest of the world, acting as temporary safe haven status, but this could/will turn on a dime once CLOs explode. Narrative already priming a swift return to QE.

So if things snap prior then it's a severe 180, otherwise 1 more hike quite possible, TLT has pulled back from 121 to 119. Pay little attention to the trade war progress as has very little to do with global synchronised downturn now underway, despite the rhetoric. In the UK, manufacturing PMI was positive at 52.0, but don't be misled by this apparent strength vs EU manufacturing PMI in contraction as this is due to historically/RIDICULOUSLY high stockpiling in UK. £ little too optimistic at moment, don't think there's much headroom unless May's vote goes through next week, anything else and I think we're heading back down.

I could go on for hours, but to summarise, we are seriously f*****g close now, so position defensively (I'm a coward so all in premium bonds, waiting patiently) :Old:

Barnsey, thank you for this. I’m trying to position for what’s looming ahead, but as the time-frames tighten, the more I think of just going full on defensive and diving into cash.  

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15 hours ago, sancho panza said:

I'm currently short a couple of choice US stocks but looking to shrot their indices as per your view.2019/20 will see a large dopwntrun in stocks i suspect but I'm not sure which year.Previoous recessions hav played out with diffferent kinks in the curves.I've been on nights so aside from scannign the odd post on here,have read,researched little over the weekend.Looking forward to soem time this week to reassess where we are.

 

Like you Im looking for those first proper chinks in the Chrsitmas rally we were discussing early Dec time-ok it turned out to eb a New Year rally-but still be long and strong and taken out a couple of my ladders in my Boeing shorts.

Like you were; holding the bulk with NS&I ,not prepared to gamble on metor bank coming out the other side of the wave lol

 

Ref QE,I'm not sure it'll come as before,they may try another more Keynesian route but the last ten years of monetary policy is now accepted as poor value politically,.

I would wet myself laughing if Trump did start an EU trade war, it would be the end.I think the Krauts are poop creek sans paddle,

SP is Metro Bank toxic? I ask because I was going to open a savings account with them.

6 hours ago, Cattle Prod said:

I think the fundamental problem with the EU is that it's leaders and policymakers have no skin in the game. There is no love of country, desire to see members of your society do better, leave a better world for your children. Being highly paid beaurocrats (with undemocratically elected leaders), they are detached. Just doing a job, phoning it for the most part, collecting a quarter mill a year. So their families are taken care of, but there is no vision or direction for the continent. Germany, as paymaster, has taken advanrage of this apathy and bent it to its will. This is also why the small members routinely get stomped on.

EU in a nutshell: "I don't really care".

And as was pointed out there are bigger beasts lurking like Russia and China, who simply can't believe how easy it is to divide and conquer when they see fit (e.g Nordstream to Germany). There is no real unity because the decision makers dont represent their people. They only represent themselves.

It makes me sad because it could have been great (pause it at Maastrict please). But they wanted more and more. They'll end up with nothing

Cattleprod, yep they had me at Maastrict also, especially with promises of subsidiarity…. whatever happened to that concept I wonder? Was a fan, but since mid-90’s I’ve been eu-septic.

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25 minutes ago, JMD said:

SP is Metro Bank toxic? I ask because I was going to open a savings account with them.

They accidentally mislabelled some loans as less risky then they should have been (less collateral needed), was only to the tune of £866 million!

Needless to say they currently have a rather large hole in the balance sheet to fill.

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8 hours ago, Barnsey said:

Most folks would scream STAGFLATION but I take it we're still expecting a deflationary bust and then reflationary policy? And just to clarify, are you thinking we're now looking at a slightly postponed deflationary bust toward year end?

The debt deflation is already underway,company after company going under,and lots on obvious life support.Id expect housing to crack now as well,slow falls at first of course.A lot could depend on when the US bear market speeds up.You would think late 19/early 20 looks the most obvious time for things to really kick in.Reflation is already underway in certain sectors,but it wont really get going until zombie companies go down,and governments go loose again.The key is the way they print.This time it will be government debt getting the QE treatment.

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2 hours ago, JMD said:

SP is Metro Bank toxic? I ask because I was going to open a savings account with them.

I would also add that they are heavily weighted in BTL loans. Obviously in the event of the forthcoming financial downturn, this would hit house prices and especially over leveraged BTL landlords which in turn would render Metro bank as the next Northern Rock.

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Agent ZigZag
30 minutes ago, DurhamBorn said:

The debt deflation is already underway,company after company going under,and lots on obvious life support.Id expect housing to crack now as well,slow falls at first of course.A lot could depend on when the US bear market speeds up.You would think late 19/early 20 looks the most obvious time for things to really kick in.Reflation is already underway in certain sectors,but it wont really get going until zombie companies go down,and governments go loose again.The key is the way they print.This time it will be government debt getting the QE treatment.

There is an interesting article I read on the train today by the President of the RICS arguing the need for Better infrastructure in the developed nations having been neglected for decades, from  cleaner water and air, better roads, better sewage etc. The question he asks his professional body is do surveyors have the skill set to meet and manage this new and up and coming challenge, but also were is the money going to come from?

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5 hours ago, JMD said:

SP is Metro Bank toxic? I ask because I was going to open a savings account with them.

 

Cattleprod, yep they had me at Maastrict also, especially with promises of subsidiarity…. whatever happened to that concept I wonder? Was a fan, but since mid-90’s I’ve been eu-septic.

 

They are fucking careless innumerate.

And theyve spent a fortune rolling out very e pensive branches.

Doubt theyll last 12 months.

The bigger issue is the smaller older banks have been doing similar and riskier loans.

BoE looking to chuck a bank under the wheels.

 

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2 hours ago, Agent ZigZag said:

There is an interesting article I read on the train today by the President of the RICS arguing the need for Better infrastructure in the developed nations having been neglected for decades, from  cleaner water and air, better roads, better sewage etc. The question he asks his professional body is do surveyors have the skill set to meet and manage this new and up and coming challenge, but also were is the money going to come from?

Surveyors, as covered by RICs, are a made up job, created by tge building socities in tge 70s 80s.

Surveyors, as in people who feed the geographical data into civil engineering and planning are a total different thing. And its mainly digital now.

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leonardratso
7 hours ago, Dogtania said:

There is a thread maybe a dozen pages back by either dB or others that lists a few silver heavy miners.  Honestly don't think anybody here would be able to nominate one over any others.  In my very imperfect opinion there a gamble as is so personally I would be looking to take a spread of them ( spray n pray?). 

Alexco Resource Corp
Endeavour Silver Corp
Fortuna Silver Mines
Great Panther Silver
International Tower Hill Mines
Coeur Mining
Hecla Mining
First Majestic
vista gold corp
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4 hours ago, Agent ZigZag said:

There is an interesting article I read on the train today by the President of the RICS arguing the need for Better infrastructure in the developed nations having been neglected for decades, from  cleaner water and air, better roads, better sewage etc. The question he asks his professional body is do surveyors have the skill set to meet and manage this new and up and coming challenge, but also were is the money going to come from?

The money bit is easy.It will be borrowed by the government at 0.1% or something over 30 years+.Monetized by the BOE.It will be right across the west.China will be doing the same but in the countries along the one belt one road project.In return those countries will buy Chinese goods.

Those yellow vests in France are actually a reflation cycle starting.The people in power now can do it,or someone else will.The cycles have turned and the politics looks like it is leading the economics,but really its the economics forcing the politics.

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StrugglingMillennial
1 hour ago, leonardratso said:

 

Alexco Resource Corp
Endeavour Silver Corp
Fortuna Silver Mines
Great Panther Silver
International Tower Hill Mines
Coeur Mining
Hecla Mining
First Majestic
vista gold corp

Thankyou good sir 🍻

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Agent ZigZag

For a young person with the right skill set from welder, to crane driver to logistics their future looks potentially bright

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Bricks & Mortar
2 hours ago, spygirl 🏆 said:

Surveyors, as covered by RICs, are a made up job, created by tge building socities in tge 70s 80s.

Surveyors, as in people who feed the geographical data into civil engineering and planning are a total different thing. And its mainly digital now. 

I think you're missing a large part of the RICS membership.  The Quantity Surveyors, who are the bean-counters on every construction project.

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Agent ZigZag
3 minutes ago, Bricks & Mortar said:

I think you're missing a large part of the RICS membership.  The Quantity Surveyors, who are the bean-counters on every construction project.

They are very good at setting up the contract between all the parties and the contractual running of the project itself

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leonardratso
4 minutes ago, StrugglingMillennial said:

Thankyou good sir 🍻

i meant to start a new tracking spreadsheet for those, ive got a few others, but ive been having a hard time since 1st january, im getting old and my health is starting to catch up on me, so ive not done a lot lately, need to give up everything basically and lose weight to boot, hard going while still having to go to work, no matter, just carry on.

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Agent ZigZag
1 hour ago, leonardratso said:

 

Alexco Resource Corp
Endeavour Silver Corp
Fortuna Silver Mines
Great Panther Silver
International Tower Hill Mines
Coeur Mining
Hecla Mining
First Majestic
vista gold corp

A few others to throw into the mix

Mag Silver Corp - in a bit of a downward channel

Anglogold Ashanti - great potential

Hecla mining - good potential

For those who remember Dr Bubb from TOS who now resides at Greenenergyinvestors, McEwan mining is one on his radar as is GranColum'

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12 minutes ago, leonardratso said:

i meant to start a new tracking spreadsheet for those, ive got a few others, but ive been having a hard time since 1st january, im getting old and my health is starting to catch up on me, so ive not done a lot lately, need to give up everything basically and lose weight to boot, hard going while still having to go to work, no matter, just carry on.

Carry on always Sir. Here- don’t know if this would help but I lost 2 stone by fasting from 8pm til 12 noon the next day and not eating too much then from 12 til 8... not medical advice, but was do-able while still working etc .. coffees and teas grand in the morning then sort of had breakfast -muesli- at 12... just saying- hope that helps!

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Does anyone have a current view on Crypto currency?

For me it seems something that will go too the moon or go to being worth absolutely nothing..

Of course it does fit the establishments objective to remove paper money and move us to digital currency.. I see cash points are depleting by the day..

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Green Devil
31 minutes ago, macca said:

Does anyone have a current view on Crypto currency?

For me it seems something that will go too the moon or go to being worth absolutely nothing..

Metal investing has probably had its day. Its a traders market. Id say crypto is prolly you best best best bet of a moonshot play. But you might lose it all. 

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leonardratso
7 hours ago, Thorn said:

Carry on always Sir. Here- don’t know if this would help but I lost 2 stone by fasting from 8pm til 12 noon the next day and not eating too much then from 12 til 8... not medical advice, but was do-able while still working etc .. coffees and teas grand in the morning then sort of had breakfast -muesli- at 12... just saying- hope that helps!

hmm, worth a go, i never have breakfast anyways, Ive stopped drinking coffee (almost), just have a black one in the morning to kick start it (then have a coffee hehehehe). Got 3 stone to lose, was 14 stone for 20 years, then weighed myself last time i had a working weighing scale which was 5 years ago was 15 1/2 stone, thought id be about 16 now, but was shocked to see i was 17, fat bastard. Knee started hurting on 1st jan, thought it was just my usual yearly calf cramp so just stretched it out, then had all sorts of problems including nearly passing out from not being able to breath, heart racing 10 to the dozen. After about 3 weeks of going to hospital, going to doctors right calf decides to swell up, different doc finally worked out was probably a dvt so off to hospital for an ultrasound scan - yes was dvt. So on the blood thinners and give up everything and wear support stocking for 3 months. Pain in the arse, and my good (strongest) leg burns like buggery (like huge lactic acid build up) if i start climbing any gradient. Anyway, swellings subsided but im sure that being 17 stone doesnt help it, god knows ive given up all my bad habits now, so hard slog to bin off the stodge as well.

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14 hours ago, Sideysid said:

I would also add that they are heavily weighted in BTL loans. Obviously in the event of the forthcoming financial downturn, this would hit house prices and especially over leveraged BTL landlords which in turn would render Metro bank as the next Northern Rock.

...and they have recently `won` £100M to promote SME lending...so unlike NR they have been given the bailout before rather than after! :-)

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