Credit deflation and the reflation cycle to come.

[harp]

1 hour ago, Errol said:

In case people haven't been paying attention:

 

- Emergency meeting of the EU Security Council called

- Putin cancels scheduled meeting to meet with Defence Minister and Chief of Staff

- VP Pence flight diverted - heading back to White House

- COBRA meeting called

 

Something is going down.

Source?
If it ain't on Zerohedge it's not happening

[Noallegiance]

26 minutes ago, harp said:

Source?
If it ain't on Zerohedge it's not happening

Should have checked the other Zerohedge:

https://www.zerohedge.com/news/2019-07-02/vp-pence-recalled-white-house-emergency-airforce-2-diverted

[Castlevania]

2 hours ago, DurhamBorn said:

The time to buy Imperial and BATs is from the last few months onward.Im already back in mostly,but anyone who wants them should buy a ladder now and set up more buy ladders on any falls.SP will mean that the cannabis stocks will fall 90% and then big tobacco will buy them out.Equity will be wiped out and big tobacco will get the entry for dirt cheap.I have a very good friend who puts the machines in for BATs.He used to work for Rothmans 3 miles from where i live.BAT is a money making machine.He was over in Pakistan last year putting a machine in where they still make the fags by hand.He is often in Latin America as well,they have a huge business there.People dont really grasp the power these firms have.They can squeeze people out of markets easily.The only company who managed to escape them so far and do well is JUUL in the vaping space.

The toughest thing in following my road map was selling BAT and Imperial,it really did test me to let them go,but it proved a great move.Iv got them back for -54% and -49% of what i sold them at.

The only real worry is they both have too much debt,more so BAT and they need to keep de-leveraging.Part of a balanced long term portfolio look like decent entry points.

 

So if you believe in globalisation BAT will be fine. I was in Cambodia last year. The local cigarettes were made by BAT and cost US$0.65 a pack. BAT are probably the most global company out there. I think there’s 4 countries in the whole world where they don’t sell cigarettes.

[Errol]

Panic rumors fly as Pence cancels trip after Russian sub accident

https://www.rt.com/usa/463227-panic-rumors-pence-emergency/

[Errol]

Urgent consultations in Washington, Moscow on reported US-Russian submarines in firefight

First reports reaching DEBKAfile’s military sources say that a US submarine intercepted a Russian nuclear sub in American waters opposite Alaska. The Russian sub escorting the nuclear submarine responded with a Balkan 2000 torpedo and scuttled the US vessel. Urgent consultations in both the White House and the Kremlin were taking place on Tuesday night. US Vice President Mike Pence called off an appearance in  New Hampshire after being recalled to Washington for a conference called by President Donald Trump without explanation.

https://www.debka.com/mivzak/urgent-consultations-in-washington-moscow-on-reported-us-russian-submarines-in-firefight/

[Loki]

47 minutes ago, Errol said:

Urgent consultations in Washington, Moscow on reported US-Russian submarines in firefight

First reports reaching DEBKAfile’s military sources say that a US submarine intercepted a Russian nuclear sub in American waters opposite Alaska. The Russian sub escorting the nuclear submarine responded with a Balkan 2000 torpedo and scuttled the US vessel. Urgent consultations in both the White House and the Kremlin were taking place on Tuesday night. US Vice President Mike Pence called off an appearance in  New Hampshire after being recalled to Washington for a conference called by President Donald Trump without explanation.

https://www.debka.com/mivzak/urgent-consultations-in-washington-moscow-on-reported-us-russian-submarines-in-firefight/

I read that un-cited elsewhere and assumed it was fake...blimey

[dgul]

Gold says trouble.

[Loki]

2 minutes ago, dgul said:

Gold says trouble.

Wow, I think you're right.  Hadn't thought to look at that

[CVG]

More likely?

Gold Surges After Trump Nominates Gold Standard Advocate Judy Shelton To Fed Board

https://www.zerohedge.com/news/2019-07-02/gold-surges-after-trump-nominates-gold-standard-advocate-judy-shelton-fed-board

[subutai80]

Gold to silver ratio currently 93!

[janch]

@DaveHcontrarian

Equities, bonds, gold & silver all moving higher here as investors who have been skeptical of all of these rallies begin to accept that they are all headed higher. S&P to 4000, Nasdaq to 11,000, TLT to 136, gold to $1600, silver to $26, GDX to $40 & GDXJ to $70. Much more to go.

 

Latest from DB's "friend"

4:54 AM - 3 Jul 2019

[Starsend]

1 hour ago, janch said:

@DaveHcontrarian

Equities, bonds, gold & silver all moving higher here as investors who have been skeptical of all of these rallies begin to accept that they are all headed higher. S&P to 4000, Nasdaq to 11,000, TLT to 136, gold to $1600, silver to $26, GDX to $40 & GDXJ to $70. Much more to go.

 

Latest from DB's "friend"

4:54 AM - 3 Jul 2019

He also states:

"10yr heading for 2% in June & ultimately will fall to 1/2% in the bust."

So this will presumably push up the price of IBTL even further? IBTL currently yields about 2% so those bonds will become more valuable?

IBTL has already had a very good run recently but it looks like the time to sell is when it all goes kaboom as they'll be one last big move higher.

 

 

[Noallegiance]

Come the next set of rates cuts, is the expected vault in stock markets going to negatively affect reflation stocks?

[Bricks & Mortar]

2 hours ago, janch said:

Latest from DB's "friend"

DB told us a while back his friend isn't DaveH himself, but someone who once worked with him and uses the same indicators/methods to make their predictions.

Still someone who's, (understandably), in synch with the thread premise however.  I sometimes look up his twitter myself.  DB's been better at timing recent moves though.

[JMD]

23 hours ago, DurhamBorn said:

The time to buy Imperial and BATs is from the last few months onward.Im already back in mostly,but anyone who wants them should buy a ladder now and set up more buy ladders on any falls.SP will mean that the cannabis stocks will fall 90% and then big tobacco will buy them out.Equity will be wiped out and big tobacco will get the entry for dirt cheap.I have a very good friend who puts the machines in for BATs.He used to work for Rothmans 3 miles from where i live.BAT is a money making machine.He was over in Pakistan last year putting a machine in where they still make the fags by hand.He is often in Latin America as well,they have a huge business there.People dont really grasp the power these firms have.They can squeeze people out of markets easily.The only company who managed to escape them so far and do well is JUUL in the vaping space.

The toughest thing in following my road map was selling BAT and Imperial,it really did test me to let them go,but it proved a great move.Iv got them back for -54% and -49% of what i sold them at.

The only real worry is they both have too much debt,more so BAT and they need to keep de-leveraging.Part of a balanced long term portfolio look like decent entry points.

 

DB thanks for explanation.

[DurhamBorn]

1 hour ago, Bricks & Mortar said:

DB told us a while back his friend isn't DaveH himself, but someone who once worked with him and uses the same indicators/methods to make their predictions.

Still someone who's, (understandably), in synch with the thread premise however.  I sometimes look up his twitter myself.  DB's been better at timing recent moves though.

Yes they worked together at Fidelity back in the 80s on the equity team handling UK pension assets in the US,hence why my friend was at Glaxo (now Glaxosmithkline) when i met him investing their pension assets in the US.That team was probably the best equity team there was during the cycle from the late 70s.Davids work is macro road maps.He doesnt do any timing work (although people reading his tweets probably wouldnt understand that as they look like buy/sell signals).Timing is done by homing down on the cross market stuff.My friends work tends to be more liquidity driven.The irony is none of them used to pick the equity buys.They had a couple of other members of the team who did that.The macro strategists job was to try to work out the line of travel and likely destinations.

The PM space road map is pretty clear.They are probably in a long term bull market.However there will be many big falls along the way.Im slowly taking profits as the complex moves higher and will of sold most if GDX hits $28 and would look for a big pull back below $23.I would then re-enter.If thats wrong id miss a lot of profit,but thats the game we are in.

So far since around 2016 im very happy how things have gone.Some big falls mixed in as expected,Centrica down 28% for instance,but the likes of Go Ahead up 50%+,Standard Life +30%,many gold miners up 50%+ (some sold and re-entered 3 times now).How the debt deflation plays out will be key going forward.

[Democorruptcy]

4 hours ago, Starsend said:

He also states:

"10yr heading for 2% in June & ultimately will fall to 1/2% in the bust."

So this will presumably push up the price of IBTL even further? IBTL currently yields about 2% so those bonds will become more valuable?

IBTL has already had a very good run recently but it looks like the time to sell is when it all goes kaboom as they'll be one last big move higher.

 

 

Amerman's latest article about US bonds in their next recession, more QE, negative rates etc

The Lucrative Profitability Of A Move To Negative Interest Rates

[DurhamBorn]

1 hour ago, Democorruptcy said:

Amerman's latest article about US bonds in their next recession, more QE, negative rates etc

The Lucrative Profitability Of A Move To Negative Interest Rates

Fully expect the above,and bond proxies and reflation stocks should end up the big winners.The only difference is that i see governments diverting a lot of the printed money direct into the economy.

[Talking Monkey]

20 minutes ago, DurhamBorn said:

Fully expect the above,and bond proxies and reflation stocks should end up the big winners.The only difference is that i see governments diverting a lot of the printed money direct into the economy.

In terms of sequencing would this mean at the same time as the stock market is falling hard  US bonds would be rallying

I'm guessing any pullback we see in the next while in TLT be a good time to buy

Trying to understand this stuff in simple terms

[DurhamBorn]

2 minutes ago, Talking Monkey said:

In terms of sequencing would this mean at the same time as the stock market is falling hard  US bonds would be rallying

I'm guessing any pullback we see in the next while in TLT be a good time to buy

Trying to understand this stuff in simple terms

Yes,a pullback in TLT etc would be a good point to buy and then sell later.Balanced portfolio of course.

[sancho panza]

On 02/07/2019 at 19:08, DurhamBorn said:

The time to buy Imperial and BATs is from the last few months onward.Im already back in mostly,but anyone who wants them should buy a ladder now and set up more buy ladders on any falls.SP will mean that the cannabis stocks will fall 90% and then big tobacco will buy them out.Equity will be wiped out and big tobacco will get the entry for dirt cheap.I have a very good friend who puts the machines in for BATs.He used to work for Rothmans 3 miles from where i live.BAT is a money making machine.He was over in Pakistan last year putting a machine in where they still make the fags by hand.He is often in Latin America as well,they have a huge business there.People dont really grasp the power these firms have.They can squeeze people out of markets easily.The only company who managed to escape them so far and do well is JUUL in the vaping space.

The toughest thing in following my road map was selling BAT and Imperial,it really did test me to let them go,but it proved a great move.Iv got them back for -54% and -49% of what i sold them at.

The only real worry is they both have too much debt,more so BAT and they need to keep de-leveraging.Part of a balanced long term portfolio look like decent entry points.

 

That was what I meant DB,cheers.it's a prospect .Interesting to think if you get the tobacco big boys 50% off peak and then the cannabis shares 90%,that's some dsicount.Cannabis stocks have all the hallmarks of a bubble

[DurhamBorn]

1 minute ago, sancho panza said:

That was what I meant DB,cheers.it's a prospect .Interesting to think if you get the tobacco big boys 50% off peak and then the cannabis shares 90%,that's some dsicount.Cannabis stocks have all the hallmarks of a bubble

Lots of risk in the tobacco area due to smoking rates falling,probably in terminal decline.However with the amounts of cash flow these companies have they should be able to expand into new markets like cannabis.Highly likely they will be selling cannabis vape.I would expect we might see the first moves from the likes of Imperial once Canada goes legal in October on Cannabis variants.They will be careful though being PLCs not to get ahead of the legislation.

[Talking Monkey]

4 minutes ago, DurhamBorn said:

Yes,a pullback in TLT etc would be a good point to buy and then sell later.Balanced portfolio of course.

Thank you DB

[sancho panza]

10 minutes ago, Talking Monkey said:

In terms of sequencing would this mean at the same time as the stock market is falling hard  US bonds would be rallying

I'm guessing any pullback we see in the next while in TLT be a good time to buy

Trying to understand this stuff in simple terms

Time to buy was June 07 or may 08

worth checking DXY which sbegan it's run up in June 08.People don't want dollars and then they do.Until they don't.

 

 

Worth noting GDX begain it's run down in June 08

12 minutes ago, DurhamBorn said:

Lots of risk in the tobacco area due to smoking rates falling,probably in terminal decline.However with the amounts of cash flow these companies have they should be able to expand into new markets like cannabis.Highly likely they will be selling cannabis vape.I would expect we might see the first moves from the likes of Imperial once Canada goes legal in October on Cannabis variants.They will be careful though being PLCs not to get ahead of the legislation.

I think they'll hoover up the cannabis business and in the second and third worlds,if they can keep it cheap enough,people will smoke tobacco.

I'm a long term bull on BATS and Imp but not buying long term yet.

[sancho panza]

On another matter I saw a moneyweek piece that cited Japan as having notes and coins in circulation as 20% of GDP.Switz,India,China all above 10%.Worth noting that the country that has experienced deflation most recently is the least likely to have moved over to cashless cards.

Tried to find the link but couldn't

 

 

https://wolfstreet.com/2019/07/02/trucking-veers-into-ditch-class-8-orders-boom-bust/

Orders for heavy trucks plunged by 69% in June compared to June last year, to 13,000 units, after having plunged by 71% in May, to just 10,400 units, FTR Transportation Intelligence reported today. It was the eighth month in a row of year-over-year declines. So far in 2019, the year-over-year declines in orders for Class-8 trucks ranged from -52% to -71%, which, as FTR said in the statement, makes it “the weakest six-month start to a year since 2010”:

Orders for Class-8 trucks experienced a historic boom last year, reaching over 52,000 orders in both July and August, in a burst of ordering amid what was then called a “capacity panic.” But this boom is now getting unwound: