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Leviathan

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  1. https://www.zerohedge.com/news/2018-04-04/russell-napier-feds-ammuniction-just-ran-out This latest article from Russell Napier is well worth a read. Similar take to DB ie that Fed is tightening while the economy has excessive leverage and this is likely to led to rates falling rather than rising. He identifies a few possible triggers in emerging markets. Lev
  2. Maybe talkingmonkey. I'm not sure whether a top in equities is in yet - it looks like it is in the UK and there is some evidence that FTSE can lead S&P down in previous crashes. However, I still think most of the major central banks are loosening not tightening and that may move the markets up a little longer. Final issue is the yield curve - normally it inverts before markets fall and we are still a way off here. Maybe it wont this time given the amount of manipulation that has gone on since 2009. I think oil will probably be the last to roll over probably after equity markets have a
  3. Great thread - the most interesting read on the HPC forum - thanks to all the posters. I don't get much time to comment unfortunately but a few bullets of where I think we are and what might happen next: - US is the key market to watch as it leads the others up and down - US yield curve is flattening - short term rates are rising as the market prices in rate rises whereas 10UST yield may have peaked. If so another 2 rates rises should see the yield curve invert. Will we get there? - I think we will as the Fed sees but doesn't understand why inflation is so low outside of asset prices
  4. https://www.bloomberg.com/view/articles/2017-12-18/yield-curve-inversions-and-stocks-are-a-toxic-mix Yield curve getting closer to inversion in US when measuring 2 year vs 10 year Treasuries.
  5. Yep well put Gribble I remember being told by my parents a list of European countries not to visit because they were so expensive in the 70s and early 80s. North Sea oil changed that but it’s gone now and it was masking a serious trade imbalance.
  6. It’s bonkers they have thrown so much at keeping house prices up - yesterday’s SDLT change being the latest example. However with a third of MPs having buy to let’s and the other pro older homeowner and anti renter policies out there it’s no surprise. The voter demographics will change this soon. We left the Uk for sunnier climbs in 2009 although I came back to work in the Uk from time to time my wife has been out 8 plus years and we look back with increasing incredulity at the UK. We were lucky to buy a house at 1.40 euros to £ in 2015. If the Uk carries on down the current road I think
  7. Don’t have a huge amount to add to this excellent thread ATM other than to express thanks to the regular contributors. Two things I note with interest - first the yield spread of the 10 year UST over the 2 year UST is now down to 0.67 the lowest it has been so far in this bull market. Second an oil price spike does tend to be followed by a recession and correction or even crash in stock prices. Odds of a correction/crash seem to be increasing as the US stock market makes new highs with fewer stocks now lifting the index. This is a traditionally strong time of year for markets will we see
  8. Thanks Db - Likewise I've made some small TLT purchases but have the majority still to buy. I think like you I will continue to drip in probably without hedging first as I have a reasonable USD position in the meantime. I don't think the stock markets are quite ready to roll over yet causing the flight to UST but the sterling risk to capital feels pretty close by. Like you I don't want to get caught the wrong side of any local currency depreciation.
  9. Db and all If DXY does head to 88 it doesn't appear to be taking sterling with it for the ride. Any views on where next with Sterling vs the dollar? I was hoping we would get a bit of a rally into the Autumn for sterling maybe as far as 1.38 to 1.40 on dollar weakness before it turned round but that seems less and less likely by the day. I can see a smaller chance we may get to the top of the channel at c 1.35 now but I'm struggling to see any more upside here and the downside risks (economy slowing, domestic credit risks increasing, trade deficit worsening etc) are creating a
  10. TLT making a second attempt to break out of the downtrend at 126.50. Gold also pushing a third attempt to break above 1290. Maybe DXY will start heading down below 93 again soon or maybe the channels will hold for now. Interesting watching
  11. I've long been of the opinion that the cycle is going to play out in three overlapping parts, first a currency war, then a trade war and then war kind of rhyming with the 30s-40s. I see the ending of the currency war coinciding with a deflationary bust as per DBs posts with money flowing to US Treasuries and the Dollar for a final time. I believe the trade war has started with some evidence that tariffs have been on the rise globally since 2011, Brexit, Trump, US/EU sanctions against Russia etc recently taking this to the next level. Perhaps we will see tit for tat moves between China and US n
  12. Thanks for the response Durham - on the currencies how I have interpreted what you are saying is that the upward movement in the dollar once it reverses later in the year in a deflation will be such that investors wont want to be in another currency. Hope the £ makes it to 1.40 in the interim as this would be a good turning point. I think the euro will also turn down around September. I agree with you on oil - lots of leverage in oil and oil services. Less leverage maybe in tech but some very stretched valuations to be wary of when the market turns. Great thread this first thing i r
  13. Pretty much my thoughts on leads and lags - employment is the biggest economic lag item there is - perhaps along with GDP. $ is rising today, TLT in $'s is falling today with no real impact if you measure TLT in sterling. Interested in any thoughts on what the lag times are between currencies, what is happening with financial stocks and which sectors will lead the decline? On currencies my recollection from 2007 is that the £ topped in $'s in late 2007 at just over 2. It then fell all the way to $1.38 with the deflation in 2008. Then the US property market topped in summer 2006 and
  14. Thanks for the reply durham much appreciated. I tend to agree with your call re sterling down to 90 cents - I think this will shock the vast majority of people if and when the currency breaks through parity and through the previous bottom at 1.05 cents. Money will flow to the strongest currency in a deflation and especially to US Treasury bonds. I would have thought given the valuations of companies and in parts of the property market (in the Uk and in a number of other markets) are so stretched and given it costs next to nothing to borrow ATM that a crisis or deflationary event is
  15. Durhamborn First of all my thanks to you for this thread which is an excellent read plus your other contributions to the board. A few quick questions for you if I may. The first relates to your macro call of deflation linked to the long term debt super cycle ( circa 75 years). Is your take that the deflationary assessment starting with the US as the leading equity market is based on a similar analysis to Ray Dalio who is effectively calling time on the long term debt super cycle as IRs globally really can't go below zero? To precis his view I hear him to be saying that the Fed are ra
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