Credit deflation and the reflation cycle to come.

[Talking Monkey]

3 minutes ago, DurhamBorn said:

yes in basic terms.There is cross market stuff going on like currency etc,but thats the sort of basic road map.The US is seeing dollars return from China so that is easing things for them,but not enough.How they ease and tighten counts.The next cycle we expect them to inject direct into the economy,and this can see velocity move much quicker.

If i dont buy a tin of beans at the corner shop the farmer and the big factory dont feel it yet.The shop does.Next the wholesaler,then the factory,then the farmer,then the chemical feed company.That might be 3 months.Other things in the economy take much longer.

Cheers DB makes sense

[MrXxxx]

5 hours ago, reformed nice guy said:

This is one thing that I have been thinking about recently.

If you feel that the FAANG stocks Burberry etc, or any particular component of a major index is going to fall significantly then is it worth investing in an index tracker?

Or as an alternative pick and choose those index trackers that are regional (list as mentioned a couple of pages ago) and get your US exposure via sector ETFs and individual stocks...granted not as easy as buying a single world ETF though, but a good way of getting broad exposure/diversification.

[MrXxxx]

Kust seen @Harleys post above...there you go, another (and easier) way to resolve the same issue.

[Errol]

Gold, Silver, Mining Stocks: Get Ready For A Huge Ride Higher

http://investmentresearchdynamics.com/gold-silver-mining-stocks-get-ready-for-a-huge-ride-higher/

[Harley]

Well, well, well......

And now today Stobarts shares suspended, CEO gone, accounts delayed, and:

'The group added: “The board is applying a more prudent approach to revenue recognition, re-assessing the recoverability of certain receivables, as well as considering the appropriateness of certain provisions.”'

I'm getting that familiar end of cycle feeling.

[Castlevania]

4 minutes ago, Harley said:

Well, well, well......

And now today Stobarts shares suspended, CEO gone, accounts delayed, and:

'The group added: “The board is applying a more prudent approach to revenue recognition, re-assessing the recoverability of certain receivables, as well as considering the appropriateness of certain provisions.”'

I'm getting that familiar end of cycle feeling.

Guess who invested in Stobart?

[Harley]

Maybe an appropriate time to mention security lending by ETF providers? For example, I understand lending bonds in bond ETFs to banks for them to improve (derisk) their apparent capital position.  My understanding is they provide riskier securities (e.g. equities) as collateral at coverage of > 100%.  Presumably, that's been updated to reflect tecent price changes.  Not relevant to all ETFs though and the amounts vary.  Plus the ETF holders get a bit of the income.

PS: This auto merging of disparate posts sucks so please ignore.......

27 minutes ago, Castlevania said:

 

[Harley]

28 minutes ago, Castlevania said:

Guess who invested in Stobart?

Icarus?

[Harley]

In case these Ray Dalio pieces haven't been posted before:

https://www.linkedin.com/pulse/paradigm-shifts-ray-dalio/

https://www.bridgewater.com/big-debt-crises

So buy hard assets = gold.  Ok, but that's a bit lame.  What else?

Maybe some select equities.  My concern though is getting through the transition period.  Hold cash until a big reset on the equity markets before buying but maybe lose cash to bail ins first.

[dgul]

Interesting article:

https://ftalphaville.ft.com/2019/08/22/1566491938000/There-s-a-black-hole-in-the-dollar-funding-market/

Looks like they've got additional 'invisible' tightening that needs a rate cut just to get back to neutral...

Quote

It’s an important point because even if the Fed were to stop tapering (a monetary tightening measure which sees central banks absorbing the proceeds of maturing Treasuries rather than reinvesting them in further asset purchases), tightening would continue for as long as the uncapped foreign RRP facility attracts inflows. Which it would, says Pozsar, because of the curve inversion.

He predicts such inflows could eclipse $200bn by the year’s end with the consequence of pricing Treasury supply out of the market.

 

[JMD]

18 hours ago, Barnsey said:

If anyone is looking for broad exposure to commodities (including agriculture) for the next cycle, the WisdomTree Enchanced Commodity ETF (WCOB) looks pretty good

https://www.wisdomtree.eu/en-gb/etfs/commodities/wisdomtree-enhanced-commodity-ucits-etf-usd-acc

Barnsey, this did look good (and thanks for the tip because i'm always on look out for this type of product), but upon looking into this it was a salutary lesson for me of the dangers of synthetic etf's. Unfortunately it doesn't give exposure to commodities but instead holds US treasuries. The etf aims to beat the performance of the 'Bloomburg commodity index' (which I guess is a clever marketing ploy by Bloomburg's, only ever existing in spreadsheet form on a pc?).

I couldn't find an etf that physically holds assets of the Bloomburg commodity index (the Invesco Bloomburg commodity etf is itself a similar product) - but if anyone knows of etf's that do hold commodity allocations please can you let me know.

[leonardratso]

1 hour ago, Castlevania said:

Guess who invested in Stobart?

was it wood-head

[Castlevania]

11 minutes ago, leonardratso said:

was it wood-head

Bingo!

[dgul]

China bites back...

China introduces retaliatory tariffs.

Interesting timing...

[leonardratso]

2 hours ago, Castlevania said:

Bingo!

that guys a winner all round.

[kibuc]

47 minutes ago, dgul said:

China bites back...

China introduces retaliatory tariffs.

Interesting timing...

But but but I thought they were talking again? Like, a week ago? 

[Barnsey]

3 hours ago, JMD said:

Barnsey, this did look good (and thanks for the tip because i'm always on look out for this type of product), but upon looking into this it was a salutary lesson for me of the dangers of synthetic etf's. Unfortunately it doesn't give exposure to commodities but instead holds US treasuries. The etf aims to beat the performance of the 'Bloomburg commodity index' (which I guess is a clever marketing ploy by Bloomburg's, only ever existing in spreadsheet form on a pc?).

I couldn't find an etf that physically holds assets of the Bloomburg commodity index (the Invesco Bloomburg commodity etf is itself a similar product) - but if anyone knows of etf's that do hold commodity allocations please can you let me know.

Good point, as also made by @Harley, looks like going for separate funds may he the answer.

[DoINeedOne]

Bad news for Woodford

Woodford is Eddie Stobart’s largest shareholder. His fund’s 22.9% shareholding was worth about £60m before today’s news, following a stock sale I estimate at £5.8m in early July. Stobart shares are likely to fall heavily when they return from suspension in September.

Woodford may find it difficult to find buyers for further large chunks of stock. I think these problems could add to his difficulties in reopening his Equity Income Fund in early December, as currently planned.

Posted this in the Woodford forum of what his suspended fund held

[leonardratso]

he loves the builders dont he? that way is massive more pain i reckons.

[Bear Hug]

I assume some of those individual stocks my be struggling thanks to association with Woodford. Could there be some interesting opportunities when fund crashes on reopen? 

[dgul]

21 hours ago, dgul said:

I have this feeling that that is what they know they have to do -- it isn't enough to just do what the market wants -- they've got to make it clear to everyone that it is what the market needs.

Dunno though -- we'll see tomorrow.

Funny -- I thought Powell sounded very committed to 'everything is okay, but we'll respond to market changes', while the market was expecting 'we're ahead of the curve here'. 

Yet the market has responded as though he'd committed to 100 basis point reduction over 6 months.

I guess it is the usual 'bull market' psychology -- 'we'll look for the positives'.

[DurhamBorn]

Notice today lots of the stocks i like doing well.Even Centrica is in the winners.Best FTSE stock SSE.Cyclicals starting to go up as well as expected.Never mind the MSM,sterling moving up really helps them.

Does anyone know the best way to buy Telefonica?.Is it through the crest depository interest ?.Im tempted to open first ladders,but sterling is a worry.

@sancho panza what telcos are you looking at/liking? I think the whole sector is near an inflection point and want to add a few more companies.

[kibuc]

On 07/08/2019 at 17:41, kibuc said:

I've sold all my Harmony today and redistributed between Yamana-ooh-na-na and Guyana-na-na-na. Of all pure gold miners on my radar, Guyana seems the most likely not to lag too much behind its silver-oriented counterparts. Yamana is mostly there for diversification (hahaha) between gold miners, and it's silver output should give it a slight edge over other choices. Both should outperform Harmony if the run continues IMHO. 

That didn't age well. 

However, it's worth taking note of Harmony's 10% spike on yearly results announced eariler this week. Current gold price still hasn't filtered into quarterly earnings and the earliest it should show will be in Q3 results, reported usually early Nov. Harmony reports at a different cadence and its H2 results had a small but measurable overlap with the curent gold run. If - and that's a big if - those levels can be sustained until Q3 reports from other miners, we should see some juicy earnings. 

[dgul]

39 minutes ago, dgul said:

Funny -- I thought Powell sounded very committed to 'everything is okay, but we'll respond to market changes', while the market was expecting 'we're ahead of the curve here'. 

Yet the market has responded as though he'd committed to 100 basis point reduction over 6 months.

I guess it is the usual 'bull market' psychology -- 'we'll look for the positives'.

Ah, that's more like it.

eds -- no!  That's Trump!  So difficult to keep up these days...

[kibuc]

41 minutes ago, dgul said:

Yet the market has responded as though he'd committed to 100 basis point reduction over 6 months.

That would've lifted the stocks instead of sinking them even deeper. 

The actual reaction is one of a market that sees the most important central banker having no fucking clue about what's going on or how to react to it.