Credit deflation and the reflation cycle to come.

[reformed nice guy]

2 hours ago, DurhamBorn said:

Yield curve inverted in the US and UK now.

https://uk.reuters.com/article/uk-britain-economy-inflation/uk-inflation-unexpectedly-overshoots-boe-target-in-july-idUKKCN1V40R5

Then as we said inflation would move higher here as a credit deflation hits trapping the BOE,raise interest rates destroy the economy,dont raise and inflation does the work anyway.

https://www.bbc.co.uk/news/business-12196322

the So-Called BBC news website has an article on inflation today. Coincidence?

[Starsend]

14 hours ago, DurhamBorn said:

The Fed is way behind the curve,they are far too tight and have been for 18 months.Its always funny watching the news and seeing lots going on,yet the MSM dont understand the cause.HK riots,Yellow vests France,car sales plunging in India,all to do with the Fed being too tight.My $ liquidity tracker was the backbone to the gold call because once they are too tight for too long cracks appear and those cracks cause gold to move,but its the liquidity the real cause (or lack of it).Everyone and his dog says higher dollar,but i expect sterling,YEN and Euro should all rally soon against it.Most of the west is already in recession,the figures will show it soon enough.

Credit market will tighten now,and that will sow the seeds of inflation 2 to 3 years down the road.

Do you still see a big bust DB? I believe you've sold some of your miners so do you still see a big old smackdown before we're off to the races?

[Starsend]

1 hour ago, Barnsey said:

Be careful Starsend, everything else has been inverted for some time! That brief inversion of 45 minutes could be all it takes, certainly been a wakeup call for the Fed, probably the signal to start cutting "bigly", I wouldn't even rule out a pre-meeting cut at Jackson Hole this month.

BRACE YOURSELF FOR SOME EXPERT TECHNICAL TRENDLINE ANALYSIS 

Maybe. My guess is they'll take too long. They need to drop rates close to zero fast to avoid collapse but even that won't be enough as they're too low already. On top of that they need to start up QE again bigtime - and they didn't unwind the last lot. I think it might take visible collapse before they go for it.  

[Harley]

2 hours ago, Barnsey said:

BRACE YOURSELF FOR SOME EXPERT TECHNICAL TRENDLINE ANALYSIS 

A kaleidoscope of awesomeness!

I give up! 😢

[King Penda]

6 hours ago, Hardhat said:

I'm holding and adding. I haven't got enough invested to make it feel "worth it" to sell now. I'm also fairly young and willing to hold for the long term.

And I get a kick out of the drama. 

The drama is good I’m watching friends spend cash they don’t have on shit they don’t need they ridicule me for my surposed tightness one bunked a night off work to go out on a bender last week with the lads result was him and his girlfriend spend 250 quid they managed to loose 80 he lost 140 quid in wages and the hotel was 80 that’s close to 500 quid for a day out on the piss I’m like I’d of rather bought 12 cans of Aldi larger and stayed in watching shit films talking crap on the internet 

[leonardratso]

8 minutes ago, stokiescum said:

The drama is good I’m watching friends spend cash they don’t have on shit they don’t need they ridicule me for my surposed tightness one bunked a night off work to go out on a bender last week with the lads result was him and his girlfriend spend 250 quid they managed to loose 80 he lost 140 quid in wages and the hotel was 80 that’s close to 500 quid for a day out on the piss I’m like I’d of rather bought 12 cans of Aldi larger and stayed in watching shit films talking crap on the internet 

this talking crap on the internet, how much does that cost then, asking for a friend.

[King Penda]

2 minutes ago, leonardratso said:

this talking crap on the internet, how much does that cost then, asking for a friend.

An occasional bunch of flowers if I realy get carried away 

[Democorruptcy]

20 hours ago, Noallegiance said:

In other news, the US 2YR/10YR yields have not only caught parity today, but the 2YR yield has shot past the 10YR by 12 basis points. Three days ago it was 10 basis points the other way round.

Apparently, this inversion has correctly preceded every recession, market crash and depression without fail. Apparently.

Coincides with my 6 figure deferred pension pot landing in my SIPP as cash this very week. I'd been waiting since March. 

[King Penda]

12 minutes ago, Democorruptcy said:

Coincides with my 6 figure deferred pension pot landing in my SIPP as cash this very week. I'd been waiting since March. 

Nice I think it’s just a matter of time until they ban geting at your pension at 55 and then in time they will be looking at equity release 

[Democorruptcy]

Amerman's latest:

Negative Interest Rates In The U.S. Go Mainstream - With Some Glaring Omissions

[DoINeedOne]

Any thoughts on National Express thought it was mentioned here but can't seem to find it

[spygirl]

Im still counter to everyones opinion about FED n tightening.

I reckon US growth n wage growth will carry on.

Inflation is 1.8%

Big demographic fall back in US. Very few spare workers.

Companies are playing it safe and avoiding China.

No asian country have much in way of spare skilled Labour.

I think Europe will continue to fall apart due to gormless ECB n QE.

Wsllstreet are trying to play FED.

FED  can cut but watch for them dumping assets from bakance sheet.

 

[spygirl]

No point in looking for bond inversion.

QE has swamped that as a signal.

[Don Coglione]

2 hours ago, DoINeedOne said:

Any thoughts on National Express thought it was mentioned here but can't seem to find it

Nothing to add on the purely financial side, but I used National Express for the first time recently. Really impressed with the service for the price paid, but no idea how they can make money with largely empty coaches (this was to and from Heathrow [coach went on into and back from London Victoria], so hardly marginal routes).

[DurhamBorn]

2 hours ago, spygirl said:

No point in looking for bond inversion.

QE has swamped that as a signal.

Not sure on that spy,Fed hasnt been active at the long end for nearly two years and its the long end that has moved.Manipulation around the short end of course still.Inflation is coming,only question is how we get there i think.

[DurhamBorn]

5 hours ago, stokiescum said:

Nice I think it’s just a matter of time until they ban geting at your pension at 55 and then in time they will be looking at equity release 

They will probably move it to 8 years before state pension age so 60.Probably not for a good while though.They already announced it going to 58 in 8 or 9 years,but havent put the legislation in yet.If things stand i should have 5 months to go into draw down at 55 before it goes to 58.Unless they taper,but last time it was a cliff edge when it went from 50 to 55.

[spygirl]

7 hours ago, DurhamBorn said:

Not sure on that spy,Fed hasnt been active at the long end for nearly two years and its the long end that has moved.Manipulation around the short end of course still.Inflation is coming,only question is how we get there i think.

I ant call tis at all.

Ive be chatting to Americans for ~25 years thru work. Chit chat always picks up failings - either layoffs, slowdowns or people going nuts for housing.

Im not getting any of the normal stuff youd expect - slowdown in employment or too much money in housing.

Theres the massive noise by QE/ZIRP, as well as Trumps tax cuts.

Seeing thru them, I see an economy thats still growing.

The US has reached a stage where a lot of 55+ have dropped out - willingly or unwillingly (health - they a lot of fat bastards, or opiods).

The US has put hte brakes on allowing floods of migrants to arrive.

Besides, the bulk ofthe migrants the US has picked up are, frankly, useless.

I waiting to be proved wrong but it doesn ot feel right.

Again, the effect of Trumps tariffs on China, which has took a *huge* number of jobs..There's been a huge change in mindset to US companies -they are looking to bring a lot of stuff away from coubntries that are perceived as threats un American.

Go back 20 years and the CxO could nto wait to shuft jobs abroad - some valid, some invalid.

Now the tone ofthe country is they are seen as traitors/non-American. Bits of this are CHina, as the US business have given up on it starting to consume.

 

 

[MrXxxx]

19 hours ago, Harley said:

 Personally, I'd rather cherry pick an ETF holdings list.  Plus broad trackers could be WMDs some time in the future if it becomes a more stock picking market and/or a crash and no-one to sell to.    

Blimey, just as I was thinking I understood this financial malarkey (after lots of reading!) and was ready to put some `skin in the game` you highlight there is so much more to think about!

I was particularly interested in this statement, can you expand....do you mean a broad, index tracker ETF will be good as they will have greater liquidity over single shares OR the opposite?...also, if the latter, can the provider not split the ETF into individual shares in times of trouble and vary the components (or their weightings)?

[MrXxxx]

13 hours ago, stokiescum said:

The drama is good I’m watching friends spend cash they don’t have on shit they don’t need they ridicule me for my surposed tightness one bunked a night off work to go out on a bender last week with the lads result was him and his girlfriend spend 250 quid they managed to loose 80 he lost 140 quid in wages and the hotel was 80 that’s close to 500 quid for a day out on the piss I’m like I’d of rather bought 12 cans of Aldi larger and stayed in watching shit films talking crap on the internet 

I have a simple viewpoint towards expenditure...I don't care what others spend their money on as it's none of my business and it's their choice...unfortunately, whether they are a pisshead or a failing bank they expect me to pay for their lavish lifestyles/mistakes, it then becomes my business but I don't have a choice!

[MrXxxx]

13 hours ago, stokiescum said:

Nice I think it’s just a matter of time until they ban geting at your pension at 55 and then in time they will be looking at equity release 

Good point, and relates to a previous discussion on this site where is it better to take a private pension at 55 with a penalty (`bird in hand` etc) OR wait until official state retirement age without penalty.

[A_P]

35 minutes ago, MrXxxx said:

Blimey, just as I was thinking I understood this financial malarkey (after lots of reading!) and was ready to put some `skin in the game` you highlight there is so much more to think about!

I was particularly interested in this statement, can you expand....do you mean a broad, index tracker ETF will be good as they will have greater liquidity over single shares OR the opposite?...also, if the latter, can the provider not split the ETF into individual shares in times of trouble and vary the components (or their weightings)?

Are you not the pink MrXxx?

This was discussed quite early on in the thread if iirc.

[A_P]

@MrXxxx

To elaborate a little further. It already is a stock pickers market, always has been and will likely always be so.

Passive investors are price takers. We take the price set by the trading activity. the trackers will merely track that price.

[DurhamBorn]

1 hour ago, Cattle Prod said:

https://www.bloomberg.com/opinion/articles/2019-08-13/bond-markets-are-begging-for-infrastructure-spending

Now Bloomberg warming us up

Amazing isnt it how far ahead of the curve we are,our main problem is not being too far ahead.Thats exactly whats coming,but they neednt worry about negative yielding debt,in 8 years it will probably be up to 6% to 10% coupons.It will be world wide as well.China through its one belt one road,US roads,bridges,general stuff but large scale.UK transport,telcos green energy.On this i expect BT to ring a bell on it and them to get a good deal on future fiber roll out,we will know if they sell the Spanish business and/or South American one,that will be because they can get a better return rolling out fiber.

Bonds might have a final patch in the sun,but the next cycle will destroy their value for people at the long end.

[macca]

I’m going to say something stupid.. 

If an economy is an invention, A made up game.. Why can’t they invent their way out of trouble by changing the rules of the game.. 

surely with a fictional unicorn such as an Economy there should never be a boom or bust unless they want there to be one.. 

[dgul]

29 minutes ago, macca said:

I’m going to say something stupid.. 

If an economy is an invention, A made up game.. Why can’t they invent their way out of trouble by changing the rules of the game.. 

surely with a fictional unicorn such as an Economy there should never be a boom or bust unless they want there to be one.. 

I think that's called 'the last 10 years'.

We're about to get the next 'rules change', but it'll take a little more incentive for the incumbents to accept the change.