Credit deflation and the reflation cycle to come.

[Yellow_Reduced_Sticker]

4 hours ago, MrXxx said:

Just 'for the record' for every missed year you will get £244 less per year...weight this up 1. Against how much it will cost to buy additional years, 2. How long you plan to live after retirement age, and 3. How you think they might 'fiddle' with the system before you get to claim it!

 

I did contract work for over 20 years, there were a few years in which i missed NI payments for several moths during a particular year, because i was abroad NOT working, anyway I'd get these letters requesting to top-up the NI contributions, and I'd just thought F*** 'em & bin the letters!

 

My understating is when you reach state pension, whatever your shortfall in pension is made up with another benefit?

[DurhamBorn]

4 hours ago, Game_of_Homes said:

@DurhamBorn Sorry to be asking you so many questions but I wanted to bring you up on this. You say you can conceive 750 oz silver (at current price) being able to buy a £300k (current price) holiday home by 2025. I am just wondering if you are saying that the silver price will go up so much that 750 oz would be worth £300k (ie. approx £400 an oz) or whether you think that house prices will fall so much and silver prices rise so much that you would be able to buy the equivalent of what today would cost £300k. Can you clarify?

Both,i see silver at perhaps $200 at the end of a reflation.

[DurhamBorn]

1 hour ago, Yellow_Reduced_Sticker said:

 

Good Evening Mr DB,

 

Which broker are you buying Sibanye & Harmony with?

 

As i checked HL ...AND they don't quote 'em they ONLY quote the ADR (American depositary receipt)

 

http://www.hl.co.uk/shares/shares-search-results/h/harmony-gold-mining-adr-each-rpr-zar.05

http://www.hl.co.uk/shares/shares-search-results/s/sibanye-gold-ltd-adr-representing-4-shares

 

I do assume you are talking about these below:

 

http://www.sharenet.co.za/v3/quickshare.php?scode=HAR

 

http://www.sharenet.co.za/v3/quickshare.php?scode=SGL

 

I'm sure its the above as they both went up today near on 5% !

 

AND ADR's ...ah they went down lol!

I buy the ADRs.I bought Sibanye today.Harmony im down around 7% on.i have room for a few more of them,but il wait.

It should be noted the Chief exec of Eldorado Gold bought another 100k shares last week.PM execs are all buying shares,housing execs selling them.

[leonardratso]

2 minutes ago, DurhamBorn said:

I buy the ADRs.I bought Sibanye today.Harmony im down around 7% on.i have room for a few more of them,but il wait.

It should be noted the Chief exec of Eldorado Gold bought another 100k shares last week.PM execs are all buying shares,housing execs selling them.

is yamana gold still good? i bailed on them last year when they shot up and insiders were filling their boots, seems to have stabilized of late.

[DurhamBorn]

@sancho panza Africa Rainbow Minerals are about as well connected as you can get.Their chairman is also chairman of Harmony and very shrewd.I think Harmony might move into Zimbabwe as well.Lots of open pit potential in those greenstone belts.In lots of ways i wish they would sell Wafi Golpu.Its probably the best copper/gold deposit in the world,but they have lots of options in SA.I think they now have over 70 million oz in resources.$13 an oz divided by their market cap.

 

[DurhamBorn]

Just now, leonardratso said:

is yamana gold still good? i bailed on them last year when they shot up and insiders were filling their boots, seems to have stabilized of late.

They have been doing well,i sold some but kept the rest and they are moving back up again.Another that would likely treble in a gold bull.They have a lot of debt,but they also have some cracking mines with a lot of life of mine potential and expanded production.

[sancho panza]

On 17/06/2018 at 11:33, Barnsey said:

For me it's a position of realism now, I've slowly begun to resign myself to this target, rightly or wrongly, of 2012 prices + rpi,  as I'm not convinced prices will fall much further in this new age of price manipulation. I'd love to be proved wrong of course! At that point, pre HTB and props, prices seemed to find a level which looking back doesn't seem too insane, especially compared to what happened in the 6 years since.

In the SE (outside the M25) it means further falls of around 30% on top of the current 10% drops. I don't bother telling anyone I know this as it gets immediately laughed off, banging on about this for years etc, until I show them things are actually on the downward trend finally. In my mid thirties so feel as though I'm going to have to jump in around 2020, don't think I'll be able to wait until 2025 even though prices may be much lower then due to remaining BTL and over leveraged home buyers buckling under high rates, a long term fix seems to be a way of riding things out, and buying somewhere I can see myself for a while to come no matter what.

Mainly in cash at the moment but have all my deflation event price points for certain stocks and PMs set up (nice chunk of Silver in bullion vault my main goal) should we get a nice drop prior to inflation kicking up rapidly. 

Nice to see you over here Barnsey.

 

13 hours ago, DurhamBorn said:

Well yes,iv seen lots of performance that would be sacked in the private sector.The point is more money wont solve anything.Like you say iv seen bank nurses driving 100 miles because they are getting £30 an hour.Crazy.

 

When they work for the late notice ageneceis eg Thronbury it's more like £45 per hour....

9 hours ago, kibuc said:

My daughter sprained her ankle the other day so I took her to A&E. Took my crutches with me, too. Turned out I didn't need to - they unwrapped a brand-new ones for her. I asked whether I should return it directly to them when they'd be taking the cast off, or if I should bring it to my GP, but I think you can already guess what the answer was.

She needed it for a week and a bit, and it's been used as a flag pole/tent pole/pretend rifle ever since.

Crutches ar circa £7.It'l cost more in handling fees and storage then they'r worth.

32 minutes ago, DurhamBorn said:

@sancho panza Africa Rainbow Minerals are about as well connected as you can get.Their chairman is also chairman of Harmony and very shrewd.I think Harmony might move into Zimbabwe as well.Lots of open pit potential in those greenstone belts.In lots of ways i wish they would sell Wafi Golpu.Its probably the best copper/gold deposit in the world,but they have lots of options in SA.I think they now have over 70 million oz in resources.$13 an oz divided by their market cap.

 

Which repeats that theme of the SA miners having market caps below their revenue.Incredible.

[sancho panza]

Here I come with the obligatory reposts of Wolf St best.

Here's an issue I see playing out in the UK in terms of the big boys leaving the marginal loans to be written by the likes of Cov ,Hinkley&Rugby etc and obviously the mother ship Nationwide

Net interest margins in these BS's are rock bottom

With regard to the US he focuses on shadow bank lenders and the rise of co buying.Sub Prime never died,it jsut morphed.

https://wolfstreet.com/2018/06/17/next-mortgage-default-tsunami-isnt-going-to-drown-big-banks-but-shadow-banks/

'Next Mortgage Default Tsunami Isn’t Going to Drown Big Banks but “Shadow Banks”

by Wolf Richter

As banks pull back from mortgage lending amid inflated prices and rising rates, “shadow banks” become very aggressive.

In the first quarter 2018, banks and non-bank mortgage lenders – the “shadow banks” – originated 1.81 million loans for residential properties (1 to 4 units). In the diversified US mortgage industry, the top 10 banks and “shadow banks” alone originated 260,570 mortgages, or 14.4% of the total, amounting to $75 billion. We’ll get to those top 10 in a moment.

The Top 10 Mortgage Lenders in Q1 2018

Wells Fargo used to be the largest mortgage lender in the US until fairly recently. But it fell to second place, trounced by a “shadow bank.” In Q1, the number of purchase mortgages and refis it originated, 44,320 in total, plunged 37% from a year ago. And dollar volume of mortgages originated plunged 30% to $14.5 billion.

The largest mortgage lender in Q1 was a shadow bank: QuickenLoans. Its total mortgage originations edged down 3% to 73,896 mortgages, though dollar volume rose 4% to $17.0 billion.

Third largest mortgage lender was JP Morgan Chase. Its mortgage originations plunged 21% to 27,329 mortgages. And dollar volume plunged by 21% to $8.6 billion.

Fourth largest was a shadow bank, LoanDepot. Its mortgage originations soared 27% to $24,691 mortgages. And Dollar volume soared 29% to $6.4 billion.

Fifth largest was also a shadow bank, United Wholesale Mortgage. Its mortgage originations skyrocketed 55% to 20,387 mortgages. Dollar volume skyrocketed 67% (!) to $6.0 billion.

Sixth largest was Bank of America. Its mortgage originations plunged 43% to 14,325 mortgages. Dollar volume plunged 37% to $5.9 billion.

Seventh largest was a shadow bank, Caliber Home Loans. Its mortgage originations rose 4% to 18,629 mortgages. Dollar volume jumped 14% to $5.4 billion.

Eighth largest was also a shadow bank, Fairway Independent Mortgage. Its mortgage originations soared 28% to 14,655 mortgages. Dollar volume soared 37% to $3.8 billion.

Ninth largest was – you guessed it – a shadow bank, Guaranteed Rate. Its mortgage originations rose 4% to 11,525 mortgages. Dollar volume rose 7% to $3.6 billion.

Tenth largest was – surprise, surprise – a bank. US Bank’s mortgage originations plunged 24% to 10,817 mortgages. Dollar volume plunged 19% to $3.6 billion.

This is the trend: Banks are pulling back from mortgage lending in a big way, likely cherry-picking their customers to curtail the risks amid inflated prices and irrational exuberance in an environment of rising mortgage rates; and non-bank lenders aggressively chase everyone else. And since these “shadow banks” not regulated by bank regulators, they’re free to do as they please.

This chart shows the top 10 mortgage lenders in the US in Q1, by dollar volume, shadow banks in red:

ATTOM obtained this data from publicly recorded mortgages and deeds of trust in more than 1,700 counties accounting for more than 87% of the US population.

It also pointed at the curious dynamics of co-buyers – defined as multiple, non-married buyers listed on the sales deed – in the most expensive markets. Nationwide in Q1, 17.4% of all single family homes were purchased by co-buyers, up from 16.3% a year ago, and up from 14.9% two years ago. But the national averages paper over the vast differences in individual markets.

The chart below shows a sample of the 184 metropolitan statistical areas (MSAs) analyzed in the study by percentage of co-buyers. Not surprisingly, the most expensive housing markets rank at the top, where people have to gang together – such as resorting to the “bank of mom and dad” – to be able to afford a home. Nevertheless surprisingly, nearly half of all homes in Silicon Valley were purchased by co-buyers and nearly 38% in the San Francisco MSA:

 

In terms of down-payments, forget 20%. The average co-buyer down-payment amounted to 15.3% of the average sales price. For all other homeowners, it amounted to 11.4%. This does not include the possibility that the down payment has been at least partially borrowed. And down-payment lending is becoming a hot business in this market.

The “waterbed effect” of money flows. Read…  How Chinese Investors Inflate Housing Markets in the US, Canada, and Australia, as Governments Try to Stem the Tide 

[sancho panza]

This piece highlights the issue of judging this downturn by more recent ones.US rates-as DB said,are set long term by the market.As the risk free rate goes up,it'll force rates up worldwide.

When the leverage unwinds and who knows when/why it will,the ramifications as @Majorpain alluded re derivatives are jsut totally unpredicatble.

As I've said previously, rates can head higher whilst we have a credit deflation

https://wolfstreet.com/2018/06/15/who-the-heck-bought-the-1-2-trillion-in-new-us-treasuries-over-the-past-12-months/

'Who the Heck Bought $1.2 trillion in New US Treasuries over the past 12 Months?

by Wolf Richter • Jun 15, 2018 • 59 Comments

Russia, Japan, and the Fed dumped. So who bought?

China’s holdings of US Treasury bonds, notes, and bills, after rising in February and March, fell by $5.8 billion in April to $1.18 trillion. Thus, China’s holdings have remained within the same range since August 2017, despite threats of a trade war and rumors that it would dump US Treasuries. China remains the largest holder, a position it had lost during its era of peak capital-flight from October 2016 through March 2017.

Japan has been systematically reducing its Treasury holdings. In April, it disposed of another $12.3 billion, according to the Treasury Department’s TIC data released Friday afternoon. Over the past six months, it shed $63 billion. Since July 2016 it has slashed its holdings by $123 billion, the lowest since October 2011:

This trend is even clearer when the holdings by China and Japan are expressed as a percent of the US gross national debt: Their importance has creditors to the US, while still large, has been dwindling for two reasons:

1. The US gross national debt has soared.
2. The holdings of China and Japan have fallen over the past two years.

China’s holdings (red line) as a percent to US gross national debt fell from 6.7% in May 2015 to 5.6% in April 2018. Japan’s holdings (blue line) fell from 6.1% to 4.9%. Their combined holdings (green line) fell from 12.8% to 10.5%:

 

And a sharp-edged curiosity: Russia.

Russia is a rather insignificant holder of US Treasuries. In March it was in 16th place with $96.1 billion in Treasury holdings. But in April, it cut its Treasury holdings in half, to $48.7 billion in one fell swoop, which put it into 22nd place behind the UAE and Thailand. Since August last year, it slashed its holdings by 55%. Some kind of message?

The good thing is that Russia doesn’t have that many Treasuries left to sell – unlike China or Japan. It China and Japan started to pull a Russia, the scenario would be different.

Other countries added to their holdings, and the “grand total” of Treasuries held by official (central banks, governments, etc.) and non-official foreign investors fell by $47.6 billion to $6.17 trillion, smack-dab in the middle of the range of the past year.

Many of the top holders of Treasuries – after China and Japan – are tiny countries or jurisdictions with inexplicably huge balances. They include tax havens and alleged money laundering centers.

For example, Ireland, in third position behind China and Japan. It’s where Corporate American likes to register its “overseas cash.” It held $300 billion of Treasuries in April, about the size of its GDP. But this amount has plunged by $17.5 billion during just the month of April, and is down by $27 billion from January this year, presumably as US corporations began “repatriating” their “overseas cash” by selling those Treasuries and using the proceeds to buy back their own shares.

The largest holders of US Treasuries, after China and Japan.

• Ireland: $300 billion
• Brazil: $294 billion
• UK (“City of London!”): $263 billion
• Switzerland: $242 billion
• Luxembourg: $214 billion
• Hong Kong: $194 billion
• Cayman Islands: $181 billion… down from $250 billion a year ago!
• Taiwan: $168 billion
• Saudi Arabia: $160 billion
• India: $152 billion
• Belgium: $137 billion
• Singapore $118 billion

Germany, fourth largest economy in the world and running a massive trade surplus with the US, only held $86 billion in Treasuries in April. But that was up by $12 billion from March.

So who holds the rest of the US gross national debt?

By the end of April – to stay within the time frame of the TIC data – the US gross national debt had reached $21.07 trillion. This was up by $1.22 trillion from a year earlier! So who bought this $1.22 trillion of new US Treasuries? Someone must have!

The gross national debt and its surge over the 12-month period are split in two ways:

• Debt held “internally” by US government entities rose by $181 billion to $5.73 trillion.
• Debt that is publicly traded soared by $1.05 trillion to $15.34 trillion.

This publicly traded debt of $15.34 trillion was held by these entities at the end of April:

• 15.6% or $2.39 trillion by the Fed as part of its QE
• 40.2% or $6.17 trillion by foreign entities (see above).
• 44.2% or $6.78 trillion by Americans, directly or indirectly.

And who bought $1.22 trillion in new debt over the past 12 months?

Not the Fed. Its Treasury holdings fell by $70 billion from the beginning of the QE-Unwind through April. Foreign holdings have only picked up $109 billion over the period. Leaves $1.01 trillion that someone else must have bought over those 12 months.

But who? Mostly American institutional and individual investors, directly and indirectly, through bond funds, pension funds, and other ways.

Yields have risen over the past 12 months, and these “risk free” Treasury yields are now competitive with the average S&P 500 dividend yield. For yield investors, Treasuries are a way to lower their risk profile, while earning higher yields than two years ago. In other words, for many American investors, rising yields have made Treasuries attractive.

Gone are the kid gloves. Read…  This Fed Grows Relentlessly More Hawkish  
 

[sancho panza]

https://www.themaven.net/mishtalk/economics/yield-curve-gets-serious-10-year-to-7-year-treasury-spread-collapses-to-4-bps-RpB7gi2xCEWLncIty0-I2A/

'Yield Curve Gets Serious: 10-Year to 7-Year Treasury Spread Collapses to 4 BPs

 

byMike Mish Shedlock

17 hrs-edited

 

JP Morgan is following yield spreads on the GBI broad bond index. Things are getting serious says one analyst in a Tweet

Holger Zschaepitz on Twitter

“Yield curve gets serious, JPM says: Last time 7-10y minus 1-3y yield spread of our GBI Broad bond index turned neg was in 2007, ahead…

 

twitter.com

 

That Tweet by Holger Zschaepitz got me thinking more about the flattening US treasury yield curve. Most analysts follow the 10-year to 2-year spread. The Tweet mentioned 10-year to 7-year and 1-year to 3-year spreads. Here are some charts I created in Fred.

10-Year Minus 7-Year Spread

 

This portion of the yield curve looks highly likely to invert soon. That said, predicting recessions off such divergences is clearly problematic.

3-Year Minus 1-Year Spread

 

This is another unusual spread to watch. It's currently at 34 basis points. Assuming the 1-year yield rises 25 basis points on a Fed hike (probable), but the 3-year yield doesn't (questionable), the Fed could get in no more than one more hike before this portion of the yield curve inverts.

10-Year Minus 2-Year Spread

 

 

This chart is so popular that Fred has it precalculated. I created the first two charts and the following chart using Fred tools.

The last three recessions all started with 10-2 spreads higher than 35 basis points. Thus we are already well into recession territory. The one missing ingredient is a prior 10-2 inversion.

10-Year Minus 1-Year Spread

 

As long as we are investigating unusual ranges I thought I would post one of my own. The "Great Recession" started with a spread 14 point higher. The Dot-Com recession started with this spread 11 points lower, and the July 1990 recession started with the spread 17 points lower.

This spread went negative at some point before each of the last five recession. Unlike the 10-2, 3-1, and 10-7 this indicator gave no false positives an it also gave plenty of warning.

Missing Warning Signal

Will we have a recession without the yield curve inverting?

I don't know, nor does anyone else.

Fundamentally, there is no reason to believe an inversion is a necessary ingredient for a recession. Japan offers proof enough unless we are to assume Japan is different.

One strong reason to suspect we may be similar to Japan is the length of time the Fed held rates close to zero. That certainly was different. Tests of zero-bound constraints are different as well.

Everyone Guessing

Everyone is guessing. But interestingly, nearly everyone seems to be guessing the same way: There will be a warning signal.

What if there isn't?

We may find out soon enough. If the Fed gets in two more hikes, I suspect that some portions of the curve will invert.

But even so, I also suspect the vast majority of investors will ignore that signal too.

In fact, I know they will. Mathematically they must. For everyone trying to time the top, there will be a dip buyer buying the dip. Mathematically, there cannot be a stock market escape in aggregate.

Mike "Mish" Shedlock'

[sancho panza]

ref earlier discussion re China stimulus.I referred to Hodges

Especially noteworthy is the poart about high risk loans being repackaged and sold to retial punters as low risk investments.

What Sub Prime????

https://www.icis.com/blogs/chemicals-and-the-economy/2018/05/chinas-lending-bubble-is-history/

'China’s shadow banking sector has been a major source of speculative lending to the global economy. But 2018 has seen it entering its end-game, as our first chart shows, collapsing by 64% in renminbi terms in January to April from the same period last year (by $274bn in dollar terms).

The start of the year is usually a peak period for lending, with banks getting new quotas for the year.

The downturn was also noteworthy as it marked the end of China’s lending bubble, which began in 2009 after the financial crisis. Before then, China’s total social financing (TSF), which includes official and shadow lending, had averaged 2 times gross domestic product in the period from 2002 to 2008. But between 2009 and 2013, it jumped to 3.2 times GDP as China’s stimulus programme took off.

It is no accident, for example, that China’s Tier 1 cities boast some of the highest house price-to-earnings ratios in the world or, indeed, that Chinese buyers have dominated key areas of the global property market in recent years.

The picture began to change with the start of President Xi Jinping’s first term in 2013, as our second chart confirms. Shadow banking’s share of TSF has since fallen from nearly 50% to just 15% by April, almost back to the 8% level of 2002. TSF had already slowed to 2.4 times GDP in 2014 to 2017.

The start of Mr Xi’s second term has seen him in effect take charge of the economy through the mechanism of his central leading groups. He has also been able to place his supporters in key positions to help ensure alignment as the policy changes are rolled out.

This year’s lending data are therefore likely to set a precedent for the future, rather than being a one-off blip. Although some of the shadow lending was reabsorbed in the official sector, TSF actually fell 14% ($110bn) in the first four months of the year. Already the economy is noticing the impact. Auto sales, for example, which at the height of the stimulus programme grew more than 50% in 2009 and by a third in 2010, have seen just 3% growth so far this year.

The downturn also confirms the importance of Mr Xi’s decision to make “financial deleveraging” the first of his promised “three tough battles” to secure China’s goal of becoming a “moderately prosperous society” by 2020, as we discussed in February.

It maps on to the IMF’s warning in its latest Global Stability Financial Report that:

“In China, regulators have taken a number of steps to reduce risks in the financial system. Despite these efforts, however, vulnerabilities remain elevated. The use of leverage and liquidity transformation in risky investment products remains widespread, with risks residing in opaque corners of the financial system.”

The problems relate to the close linkage between China’s Rmb250tn ($40tn) banking sector and the shadow banks, through its exposure to the Rmb75tn off-balance-sheet investment vehicles. The recent decision to create a new Banking and Insurance Regulatory Commission is another sign of the changes under way, as this will eliminate the previous opportunity for arbitrage created by the existence of separate standards in the banking and insurance industries for the same activity, such as leasing.

As the IMF’s chart below highlights, lightly regulated vehicles have played a critical role in China’s credit boom. Banks, for example, have been able to use the shadow sector to repackage high-risk credit investments as low-risk retail savings products, which are then made available in turn to consumers at the touch of their smartphone button. This development has heightened liquidity risks among the small and medium-sized banks, whose reliance on short-term non-deposit funding remains high. The IMF notes, for example, that “more than 80% of outstanding wealth management products are billed as low risk”.

Mr Xi clearly knows he faces a tough battle to rein-in leverage, given the creativity that has been shown by the banks in ramping up their lending over the past decade. The stimulus programme has also created its own supporters in the construction and related industries, as large amounts of cash have been washing around China’s property markets, and finding its way into overseas markets.

But Mr Xi is now China’s most powerful leader since Mao, and it would seem unwise to bet against him succeeding with his deleveraging objective, even if it does create short-term pain for the economy as shadow banking is brought back under control.

As Gabriel Wildau has reported, the official sector is already under pressure from Beijing to boost its capital base. Analysts are suggesting that $170bn of new capital may be required by the mid-sized banks, whilst Moody’s estimates the four megabanks may require more than double this amount by 2025 in terms of “special debt” to meet new Financial Stability Board rules.

Essentially, therefore, China’s lending bubble is now history and the tide of capital flows is reversing. It is therefore no surprise that global interest rates are now on the rise, with the US 10-year rate breaking through 3%. Investors and companies might be well advised to prepare for some big shocks ahead. As Warren Buffett once wisely remarked, it is “only when the tide goes out, do you discover who’s been swimming naked”.

Paul Hodges and Daniël de Blocq van Scheltinga publish The pH Report.

[DurhamBorn]

https://www.telegraph.co.uk/business/2018/06/19/mccarthy-stone-shares-slump-warns-profits/

Margins the problem,prices have stuck and input costs still going up as expected.Next prices will fall and they will build less houses trying to hold their margins.

https://news.sky.com/story/trump-threatens-10-tariff-on-200bn-of-chinese-goods-11409237

Reflation cycle stuff this.Politics has moved to a point where inflation isnt a problem.The US will inflate,Chine will have to (through the One Belt one Road mostly).Emerging market currencies are being hit hard.

[Yellow_Reduced_Sticker]

10 hours ago, DurhamBorn said:

I buy the ADRs.I bought Sibanye today.Harmony im down around 7% on.i have room for a few more of them,but il wait.

It should be noted the Chief exec of Eldorado Gold bought another 100k shares last week.PM execs are all buying shares,housing execs selling them.

 

Thank you for your reply SIR.

 

I may be able to buy the stock via my old broker from 20 years back, though i expect the spread and charges will be astronomical..!

 

However looking at a 1 year chart of Sibanye & Harmony ADR's - they are both on the years low, and when they got to these prices before, they bounced UP...will have to do some more research but i may dip my toe into these two ADR's...

 

MUST Say this thread has become "supercalifragilisticexpialidocious" since its been moved over to this forum!

 

 

[DurhamBorn]

10 minutes ago, Yellow_Reduced_Sticker said:

 

Thank you for your reply SIR.

 

I may be able to buy the stock via my old broker from 20 years back, though i expect the spread and charges will be astronomical..!

 

However looking at a 1 year chart of Sibanye & Harmony ADR's - they are both on the years low, and when they got to these prices before, they bounced UP...will have to do some more research but i may dip my toe into these two ADR's...

 

MUST Say this thread has become "supercalifragilisticexpialidocious" since its been moved over to this forum!

 

 

You can buy both with Hargreaves and most brokers.With gold miners its best to understand they tend to drift lower and lower and its best to staircase in.When they turn it tends to be explosive.30% down becomes 300% up.The rand has fallen a lot and gold is now 570k a kg Harmony produce at around 480k all in cost,Sibanye about 500k.If the rand gold price goes over 600k they will likely start to run.

[201p]

We not at the right point in the Presidential cycle I believe for a credit deflation. This will come, but not after a huge bubble. And we can't see it until AFTER it pops. The latest Bitcoin crash from $20K to $6K is just the warm up.

[Yellow_Reduced_Sticker]

18 minutes ago, DurhamBorn said:

You can buy both with Hargreaves and most brokers.With gold miners its best to understand they tend to drift lower and lower and its best to staircase in.When they turn it tends to be explosive.30% down becomes 300% up.The rand has fallen a lot and gold is now 570k a kg Harmony produce at around 480k all in cost,Sibanye about 500k.If the rand gold price goes over 600k they will likely start to run.

DB, I've looked on HL AND they only have the ADR's...am I missing something ...MAYBE COS I'm lol...anyway PLEASE could you post a link from HL with the stock? CHEERS!

[darkmarket]

10 hours ago, sancho panza said:

As the IMF’s chart below highlights, lightly regulated vehicles have played a critical role in China’s credit boom. Banks, for example, have been able to use the shadow sector to repackage high-risk credit investments as low-risk retail savings products, which are then made available in turn to consumers at the touch of their smartphone button. This development has heightened liquidity risks among the small and medium-sized banks, whose reliance on short-term non-deposit funding remains high. The IMF notes, for example, that “more than 80% of outstanding wealth management products are billed as low risk”.

Credit is endemic in China these days. Every elevator you get in has offers for car finance and new build properties, sometimes in different provinces. When you stay in hotels, you used to get cards from prostitutes slipped under the door, these days it's all ads for credit. Once your phone number is registered, you start getting SMS spam with credit offers. Students take high-interest loans for lifestyle costs using naked selfies and their families wechat contacts as collateral. After graduation, a good salary is around £10k, and to get married you'll need a car loan and a mortgage. Apartments in tier 1 cities cost close to London, salary multiples go up to ~75x. Everyone in your social circle is gambling hundreds or thousands on world cup matches every night. Older people take equity loans to fund deposits for their kids and keep up with their neighbours. I've had two friends contact me this month stressed about their repayments. Everyone is addicted to debt, and that's just the consumer sector. Business is just another level.

Hard to see a good outcome now.

[Option5]

Is there any chance that instead of reflation we get "slumpflation" where the economy falls but inflation rises?

[Cosmic]

11 hours ago, DurhamBorn said:

I buy the ADRs.

^^^^

13 minutes ago, Yellow_Reduced_Sticker said:

..am I missing something ...

 

[Majorpain]

19 minutes ago, darkmarket said:

Credit is endemic in China these days. Every elevator you get in has offers for car finance and new build properties, sometimes in different provinces. When you stay in hotels, you used to get cards from prostitutes slipped under the door, these days it's all ads for credit. Once your phone number is registered, you start getting SMS spam with credit offers. Students take high-interest loans for lifestyle costs using naked selfies and their families wechat contacts as collateral. After graduation, a good salary is around £10k, and to get married you'll need a car loan and a mortgage. Apartments in tier 1 cities cost close to London, salary multiples go up to ~75x. Everyone in your social circle is gambling hundreds or thousands on world cup matches every night. Older people take equity loans to fund deposits for their kids and keep up with their neighbours. I've had two friends contact me this month stressed about their repayments. Everyone is addicted to debt, and that's just the consumer sector. Business is just another level.

Hard to see a good outcome now.

Thought so, its why a good recession is required every once in a while to clear out the bad investments.  Credit growth has been off the chart in China for years.

China will obviously get hammered, but im still not sure if its going to be Italy or China which sets it off...

[darkmarket]

2 minutes ago, Majorpain said:

China will obviously get hammered, but im still not sure if its going to be Italy or China which sets it off...

I don't think either the EU or China could handle a major event in the other right now, and I don't think the US could handle a major event in both. Once the cards start falling and deflation kicks in, I'm not sure it'll matter.

[Yellow_Reduced_Sticker]

23 minutes ago, Cosmic Apple said:

^^^^

 

oh...i thought db meant the stock as well..?

[DurhamBorn]

39 minutes ago, Yellow_Reduced_Sticker said:

DB, I've looked on HL AND they only have the ADR's...am I missing something ...MAYBE COS I'm lol...anyway PLEASE could you post a link from HL with the stock? CHEERS!

No you buy the ADRs,they perform just the same over the short term.It looks like a few percent both ways,but that is the currency swings.

[A_P]

4 minutes ago, Yellow_Reduced_Sticker said:

oh...i thought db meant the stock as well..?

Might be worth reading this link

https://www.investopedia.com/terms/a/adr.asp

[Yellow_Reduced_Sticker]

32 minutes ago, darkmarket said:

Credit is endemic in China these days. Every elevator you get in has offers for car finance and new build properties, sometimes in different provinces. When you stay in hotels, you used to get cards from prostitutes slipped under the door, these days it's all ads for credit. Once your phone number is registered, you start getting SMS spam with credit offers. Students take high-interest loans for lifestyle costs using naked selfies and their families wechat contacts as collateral. After graduation, a good salary is around £10k, and to get married you'll need a car loan and a mortgage. Apartments in tier 1 cities cost close to London, salary multiples go up to ~75x. Everyone in your social circle is gambling hundreds or thousands on world cup matches every night. Older people take equity loans to fund deposits for their kids and keep up with their neighbours. I've had two friends contact me this month stressed about their repayments. Everyone is addicted to debt, and that's just the consumer sector. Business is just another level.

Hard to see a good outcome now.

Do the hookers give out credit for their services, essentially for tight wad Brits ?