Credit deflation and the reflation cycle to come.

[CVG]

5 hours ago, DoINeedOne said:

I know it went Ex-div today but never thought it would drop that low

 (CNA.LN)

96.080 -8.920 (-8.50%)

 

 

Still all just part of my learning 

Triggered my ladder 4 purchase, so a 'good news' story for me. Just another 10% drop and I'll be fully invested! I'm obviously hoping its a bargain but my losses will be limited (in terms of portfolio %) even in the event of a wipeout.

[Hardhat]

I've got a position in CNA. Not worried about the drop really.

I bought CNA based on the ideas in this thread that it could be a reflation stock - not expecting to make any money short term, and fully expecting a paper loss before any upside.

For me it will be if/when the cycle turns that I will know whether it was a good purchase.

[Lightscribe]

1 hour ago, sancho panza said:

Possibly from a technical perspective.

From a fundamental perspective CNA is forecast £938mn pre tax to 31/12/19 on revenue £29,537mn.Whereas  Countrywide is forrecast to make £0.43mn on rev £609mn.

Yeah I just meant in regards to how quickly the share price has dropped. Obviously from a fundamental perspective, it’s completely different and Countrywide certainly isn’t in the running to appear in my ISA any time soon. 

I’m still looking to get an allocation in my ISA for Centrica, due to the sector and position for the future upside, just trying to judge if it’s balancing on the bust side before then! I may likely keep adding to my Drax allocation in the meantime.

On LSE chat there’s even talk of possible takeover in the future.

[Castlevania]

Centrica have a trading update on Monday. I don’t think they’re doing as badly as the market thinks, anyhow we’ll see.

[sancho panza]

2 hours ago, Sideysid said:

Yeah I just meant in regards to how quickly the share price has dropped. Obviously from a fundamental perspective, it’s completely different and Countrywide certainly isn’t in the running to appear in my ISA any time soon. 

I’m still looking to get an allocation in my ISA for Centrica, due to the sector and position for the future upside, just trying to judge if it’s balancing on the bust side before then! I may likely keep adding to my Drax allocation in the meantime.

On LSE chat there’s even talk of possible takeover in the future.

CNA is cheap.Even allowing for it's not inconsiderable debts which are financed at a reasonable sum.personally,I think the CEO is doing the right thing letting all the marginal players go under,especially given the way they've been cutting each others throats and working for nothing.

I wouldn't be surprised if someone took it out as it's a) cheap b) got a lot of premium customers c) got some great potential for growth longer term.Debt needs reducing but if they cut the divi,make a few sales,the balance sheet would be comparable to many utilities.

 

I thought it was fair value at £2,cheap at £1.5 and even cheaper at £1.Markets are irrational at times but like DB says,they set up to hurt the most people.They're a long term hold for me/us and I intend to buy more utilites over the next couple of years if they get cheap enough.

[harp]

Go on then, who's laddering in on Helca Mining? Killing me so far

We haven't even entered a crash yet and I'm being arse raped by all my shares. So far down over 20% overall. Now, either this is a good thing to buy more? But it's hard to buy and catch a falling knife...or be a genius? 

[Castlevania]

22 minutes ago, harp said:

Go on then, who's laddering in on Helca Mining? Killing me so far

We haven't even entered a crash yet and I'm being arse raped by all my shares. So far down over 20% overall. Now, either this is a good thing to buy more? But it's hard to buy and catch a falling knife...or be a genius? 

I was planning on buying some for my pension as a speculative punt, but they seem to rely a bit too heavily on by product for my liking, and after almost halving over the past couple of months repurchasing Acacia seemed a better bet.

[Lightscribe]

In other news BTC seems to be motoring and holding through supports. Tether, Bitfinex saga and now Binance being hacked and getting 7000btc stolen still has not caused a pullback. Binance have suspended all withdrawals/deposits due to the hack so normally stable alt coins in relation to BTC are currently at all time lows. These should have a massive rebounds next week.

[Majorpain]

23 minutes ago, Cattle Prod said:

No offence intended, and I admit to a fair amount of ignorance in this space, but I find the whole thing bonkers. Why on earth would I want to convert my hard earned to a string of 1s and 0s, that a smart hacker can nick without a trace? And there will always be hackers smarter than the people who design security. I can see the value in blockchain, but I really don't get what people see in a bitcoin. Or a 1011001101010111000011111100101011000 😉

The biggest problem with bitcoin mining is its horrifically energy inefficient, the network has a boatload of processing power and yet can only process 5 transactions a second.  The Chinese have a lot of the capacity with their cheap subsidised leccy and are getting a bit annoyed at it being wasted in such a fashion. 

 https://www.wired.com/story/china-says-bitcoin-wasteful-wants-ban-mining/

What people really see in blockchain is greed, a quick look at the the other site's bubbly bitcoin thread and a lot of the devoted still see it going to $100k +.

[Sound Money]

2 hours ago, Cattle Prod said:

No offence intended, and I admit to a fair amount of ignorance in this space, but I find the whole thing bonkers. Why on earth would I want to convert my hard earned to a string of 1s and 0s, that a smart hacker can nick without a trace? And there will always be hackers smarter than the people who design security. I can see the value in blockchain, but I really don't get what people see in a bitcoin. Or a 1011001101010111000011111100101011000 😉

 

1 hour ago, Majorpain said:

The biggest problem with bitcoin mining is its horrifically energy inefficient, the network has a boatload of processing power and yet can only process 5 transactions a second.  The Chinese have a lot of the capacity with their cheap subsidised leccy and are getting a bit annoyed at it being wasted in such a fashion. 

 https://www.wired.com/story/china-says-bitcoin-wasteful-wants-ban-mining/

What people really see in blockchain is greed, a quick look at the the other site's bubbly bitcoin thread and a lot of the devoted still see it going to $100k +.

I don’t want to derail the thread, but I’m a big proponent of bitcoin. It’s a little ingenious to say it’s just 1s and 0s (like anything digital... like your bank account or share balance in your isa... like a Blu-ray movie)

And whilst I agree there’s a lot of greed around I honestly got into it for the technology. A limited supply money (like gold) that you can hold yourself (like gold/cash) that you can instantly directly transfer to anyone worldwide without a third party, without censorship. I value tha but I understand not everyone will agree.  Remember this came right after the financial crisis and QE.

And bitcoin itself has never been hacked, exchanges have. If my private key is on a piece of paper and never been on a computer then you have to break into my house, you can’t hack it.

[Sound Money]

1 hour ago, Sound Money said:

ingenious

Disingenious  I can’t edit  

[Lightscribe]

4 hours ago, Cattle Prod said:

No offence intended, and I admit to a fair amount of ignorance in this space, but I find the whole thing bonkers. Why on earth would I want to convert my hard earned to a string of 1s and 0s, that a smart hacker can nick without a trace? And there will always be hackers smarter than the people who design security. I can see the value in blockchain, but I really don't get what people see in a bitcoin. Or a 1011001101010111000011111100101011000 😉

No offence taken 😉

With crypto you have to ask yourself what is money?

When I was in Fiji, I was surprised that communities still have a barter system in place in some places, so 3 fish = a couple of kava roots (national drink) etc.

Crypto in Venezuela is actually used, because obviously the currency is toilet paper.

Myself and my daughter collect pre-1920 coins as the silver content was .925% before that date. After that it went to 50% then later to none (real world devaluation of currency).

Now 1s and 0s are precisely what your bank account ever is, when you get paid, spend on bills etc. The government is all for moving to a cashless society, as everything is more easily tracked than using paper promise notes (or plastic - who had thought we would be passing bits of plastic around as a form of money).

In the event of panic QE, and worst case scenario of hyperinflation, a store of wealth that everyone agrees is worth something and can’t be increased (21 million max) has to be a hedge against it. 

As real world use increases away from the dark web (and like I posted the other day, real world funds including allocations of BTC) more regulated banks/exchanges will be governed by existing financial regulatory standards making it more accessible for the average person.

Until that time, you can use hardware wallets (Nano Ledger S) to store your main stack of crypto which is incredibly secure, or even paper wallets (private keys printed on a bit of paper kept somewhere safe) which means they are offline and can’t be hacked.

Big exchanges like Binance have several security protocols in place. To access my account I have to have a Google Authenticator, 2FA, password and pattern lock to enter. In the latest hack, only Binance hot wallet (online wallet) was affected, no user accounts.

[Lightscribe]

3 hours ago, Majorpain said:

The biggest problem with bitcoin mining is its horrifically energy inefficient, the network has a boatload of processing power and yet can only process 5 transactions a second.  The Chinese have a lot of the capacity with their cheap subsidised leccy and are getting a bit annoyed at it being wasted in such a fashion. 

 https://www.wired.com/story/china-says-bitcoin-wasteful-wants-ban-mining/

What people really see in blockchain is greed, a quick look at the the other site's bubbly bitcoin thread and a lot of the devoted still see it going to $100k +.

Mining will tail off eventually (already is) as the likes of even in China it gets too expensive to mine using ASIC (special hardware designed for that only purpose). You have ASIC resistant coins, and algorithms are changed to keep on top of this (so it can only be mined with GPUs etc), but inherently that’s the PoW (proof of work) currency. You also have PoS (proof of stake) in which you receive a subsidiary amount of either the same or another currency for running nodes (to process transactions) or just holding the coin.

Yes there’s lots in it for greed, (some see massive upside as real world currency devalues - as explained above). However for some that are enthusiastic for crypto, it’s sticking a sharp decentralised pointy stick in the eye of the banker elites, saying we don’t need your fixed system. The younger generation that have inherited a lifetime of debt and servitude will increasingly realise this and could start to distance themselves from the traditional monetary system.

[MrXxx]

9 hours ago, Cattle Prod said:

No offence intended, and I admit to a fair amount of ignorance in this space, but I find the whole thing bonkers. Why on earth would I want to convert my hard earned to a string of 1s and 0s, that a smart hacker can nick without a trace? And there will always be hackers smarter than the people who design security. I can see the value in blockchain, but I really don't get what people see in a bitcoin. Or a 1011001101010111000011111100101011000 😉

You could say the same for FIAT, especially if we all go the way they are trying to leed us I.e cashless...so its got to be physical, finite and not perish/rust/fall-down...so PMs then :-)

[Majorpain]

I wonder what effect 25% tariffs on $200bn + of US imports is going to have on US inflation??!!

[Bricks & Mortar]

2 hours ago, Majorpain said:

I wonder what effect 25% tariffs on $200bn + of US imports is going to have on US inflation??!!

Total US imports is about $2400 billion, so this $200 billion is 1/12, but lets call it 10% cos it makes the riffmatick easy, and this is rough as hell anyway.
25% on 10%, would be 2.5% on the inflation rate.  Unless the Americans find other sources. 
Are there other sources for most Chinese imports that are less than 25% more expensive?  I think, in many cases the competition for Chinese goods, is other Chinese goods, but in most cases, they'll find some alternative.

My guess is 0.5 - 1  %

How about the oil price?  https://www.washingtonexaminer.com/policy/energy/government-raises-oil-price-forecast-in-response-to-iran-sanctions

[spunko]

15 hours ago, Cattle Prod said:

No offence intended, and I admit to a fair amount of ignorance in this space, but I find the whole thing bonkers. Why on earth would I want to convert my hard earned to a string of 1s and 0s, that a smart hacker can nick without a trace? And there will always be hackers smarter than the people who design security. I can see the value in blockchain, but I really don't get what people see in a bitcoin. Or a 1011001101010111000011111100101011000 😉

But everything is binary now, pretty much. A regular interbank bacs/fx transaction will use binary in much the same way.

The best explanation I found of this is on the So-Called BBC Bitesize website: https://www.bbc.com/bitesize/guides/zwsbwmn/revision/1

 

[0x80]

Just saw this on my twitter timeline ......

Interesting (IMHO) interview with CEO of Sandstorm gold

https://www.youtube.com/watch?v=wwdPGcBMvd4

[Solzhenitsyn]

Just read this report about how the Fed has already started easing, in spite of apparently keeping the Fed Funds rate static, they are lowering the “Interest Earned on Excess Reserves” rate or “IEOER” 

this has the effect of encouraging capitalised banks to lend to distressed banks, thus lowering the cost of capital.

an interesting and educational (for me) read!

http://www.myrmikan.com/pub/Myrmikan_Research_2019_05_10.pdf

[janch]

Interesting headline and article:

                https://www.zerohedge.com/news/2019-05-10/get-popcorn-ready-why-worlds-most-bearish-hedge-fund-thinks-biggest-crash-almost

[Bricks & Mortar]

On 10/05/2019 at 10:45, Bricks & Mortar said:

On 10/05/2019 at 08:23, Majorpain said:

I wonder what effect 25% tariffs on $200bn + of US imports is going to have on US inflation??!!

...

My guess is 0.5 - 1  %

I made this guess yesterday.  I think its far too high.  I only thought about imported goods, not all goods sold in the US economy. 

[sleepwello'nights]

On ‎10‎/‎05‎/‎2019 at 08:23, Majorpain said:

I wonder what effect 25% tariffs on $200bn + of US imports is going to have on US inflation??!!

 

 

I wonder what affect it will have on US jobs. If the stuff that is imported is replaced with US manufactured products. That would be beneficial for the US economy and population surely? 

[Craig]

On 10/05/2019 at 00:40, Sound Money said:

And bitcoin itself has never been hacked, exchanges have. If my private key is on a piece of paper and never been on a computer then you have to break into my house, you can’t hack it.

Looked awfully to me like CZ from Binance and his six mates could've quite easily amended the ledger if they'd wanted to. That to me rings serious alarm bells. 

[Bricks & Mortar]

13 minutes ago, sleepwello'nights said:

I wonder what affect it will have on US jobs. If the stuff that is imported is replaced with US manufactured products. That would be beneficial for the US economy and population surely? 

If you can the workers.  Might have to pay more...
Everywhere you look, it's inflation.

[Lightscribe]

1 hour ago, Craig said:

Looked awfully to me like CZ from Binance and his six mates could've quite easily amended the ledger if they'd wanted to. That to me rings serious alarm bells. 

I assume you mean by that in rolling back the block that was spouted around? If so I’ll answer my thoughts on that a bit more in depth. 

But coming back to previous points, at first they ignore you, then they laugh at you....