Deflationary collapse and the Reflation Cycle to Come.

[stoobs]

10 hours ago, durhamborn said:

My target 14 months ago was $1.22 up to $1.39 then down to $1.10 - $0.90 in a debt deflation .Its close enough now for me to start buying $ treasuries.

DB, what level of USD Treasuries are you targeting as a proportion of your overall pot? (obv tell me to get stuffed if you'd prefer to not say!)

[stoobs]

(duplicate)

Edited January 14, 2018 by stoobs

[pmgdawau]

1 hour ago, Thorn said:

I am watching Carillion play out to see if some form of government intervention happens and it is effectively to become a semi-state organization. Even if different name, management, etc, that would fit with the premise of this thread.

maybe a different government say chinese or qatari

[durhamborn]

28 minutes ago, stoobs said:

DB, what level of USD Treasuries are you targeting as a proportion of your overall pot? (obv tell me to get stuffed if you'd prefer to not say!)

Im not sure yet.It depends on if i sell all my gold miners or not.Il probably be looking at around 18%,i hold zero corporate bonds,zero gilts.I already hold around 6% in TLT.Im actually going to sell FCG this week (its up 15%) and switch that in treasuries.

 

[Eventually Right]

Anybody think the longest comment on this telegraph article on btl  (article is firewalled, comments aren’t) sounds familiar? 

Someone’s been copy pasting from this thread-unless it’s you of course, DB!

http://www.telegraph.co.uk/property/buy-to-let/end-britains-buy-to-let-love-affair/

thanks to all contributors to this thread btw-best on the site imho!

[durhamborn]

8 minutes ago, Eventually Right said:

Anybody think the longest comment on this telegraph article on btl  (article is firewalled, comments aren’t) sounds familiar? 

Someone’s been copy pasting from this thread-unless it’s you of course, DB!

http://www.telegraph.co.uk/property/buy-to-let/end-britains-buy-to-let-love-affair/

thanks to all contributors to this thread btw-best on the site imho!

Cheeky monkey eh,thats a complete copy and paste of this thread.Not to worry though,BTL investors could do with hearing what the macro picture is.The more it gets out there the better.Few will accept it of course.Cant happen.In 1982 with rates at 20% would people of thought they would end up at near enough zero?.If these BTLs are on yields of 8% or less they will be underwater on cashflow in the next cycle before voids.

[Fence]

2 hours ago, durhamborn said:

Cheeky monkey eh

"@Anne Dearden  - you must be one of these experts I keep hearing about."!

[suresh786]

17 hours ago, durhamborn said:

My target 14 months ago was $1.22 up to $1.39 then down to $1.10 - $0.90 in a debt deflation .Its close enough now for me to start buying $ treasuries.

do you think that the dollar will start to rise from here

[StrugglingMillennial]

And finally carrilion flops, how i wish i had shorted it lol

[Democorruptcy]

13 hours ago, durhamborn said:

IBTL is quoted in sterling but not hedged i dont think.If you look at the price graph it went up 20% the week from 23rd June 16,the Brexit vote week as sterling fell against the dollar.

OK thanks to you and NWM.

[durhamborn]

3 hours ago, suresh786 said:

do you think that the dollar will start to rise from here

No,i think it goes to my target from 14 months ago 88 or 86.Those are targets though.I use them as direction of travel for investments.I dont try time to the letter because nobody can,once in range things can change.Sterling is close to my target now,close enough to buy dollar assets in steps.These calls were all based on macro work and cross market analysis,the picture can change,but so far iv seen nothing to change anything.

 

[durhamborn]

37 minutes ago, StrugglingMillennial said:

And finally carrilion flops, how i wish i had shorted it lol

Debt deflation in action.Used debt to secure work from rivals because coupon rates were so low,money didnt cost what it should.The convertible debt was priced at 2.5% coupon when it should of been 8%+.Once cash flows slow and margins come down then its all over.First of many.Government will likely take a lot in house from the wreckage and use it in the next cycle to pump money through.

Those pension problems should also start to make investors wake up to the risk on many balance sheets from that as well.The economy needs inflation,we will get it in buckets,just the biggest debt deflation since the war to get through first.

 

[stuckmojo]

4 minutes ago, durhamborn said:

Debt deflation in action.Used debt to secure work from rivals because coupon rates were so low,money didnt cost what it should.The convertible debt was priced at 2.5% coupon when it should of been 8%+.Once cash flows slow and margins come down then its all over.First of many.Government will likely take a lot in house from the wreckage and use it in the next cycle to pump money through.

Those pension problems should also start to make investors wake up to the risk on many balance sheets from that as well.The economy needs inflation,we will get it in buckets,just the biggest debt deflation since the war to get through first.

 

Agree on the "first of many" comment: All those who borrowed to get ahead and subsidise business (and won big contracts). Some of my competitors in the logistics world have done that too. I can't wait to say goodbye to them

[durhamborn]

4 minutes ago, stuckmojo said:

Agree on the "first of many" comment: All those who borrowed to get ahead and subsidise business (and won big contracts). Some of my competitors in the logistics world have done that too. I can't wait to say goodbye to them

Yes they are all going to get found out soon.Companies that used capital to grow and not debt will reap the rewards in the next cycle,they just need to get through a really tough couple of years.

[Errol]

[suresh786]

3 hours ago, durhamborn said:

No,i think it goes to my target from 14 months ago 88 or 86.Those are targets though.I use them as direction of travel for investments.I dont try time to the letter because nobody can,once in range things can change.Sterling is close to my target now,close enough to buy dollar assets in steps.These calls were all based on macro work and cross market analysis,the picture can change,but so far iv seen nothing to change anything.

 

what you think will be pound/dollar in next 12 months? $1.30? or even lower

[Majorpain]

Quote

There are also thousands of small firms that carry out work on Carillion's behalf - many of those have contacted the BBC with concerns about whether they will be paid.

One company, which provided services for Carillion's prisons contract, told the BBC that it might fail if it is not paid the £80,000 owed to it.

How many of Carillion's suppliers are waiting on invoices to be paid so they can pay their bills?  That's the next part of this sorry saga.  Contagion is the magic word today.

[durhamborn]

14 minutes ago, suresh786 said:

what you think will be pound/dollar in next 12 months? $1.30? or even lower

I have no idea,it depends on when the bust hits.My target is roughly parity so il be buying some $ assets now and up to $1.39,then sit back and wait.Im not interested in the tape short term.It can do what it wants.

[Fence]

listened to Puplava's weekend podcast in the car this morning.  Themes he's touched on before but worth pointing out again - that retail investors have not really participated in this bull run.  Of the monies they've put into the market, 90% have gone into bond funds!  He and a few other interviewed managers seem to have had a few retail clients wanting to get back into the market (and Bitcoin!) having been burnt in 2007 and out since then.  The run has been due to corporate buy backs of their own shares.  Indeed some analysts have spoken of the privatisation of the market.  Also, means this rally could possibly last at least a few more months as the tax cuts filter into more of the same.  What will the corporates do with increased profits (lower corporate tax rates) and the repatriation of overseas funds?  To my mind, either "finance" necessarily lower margins, invest (buy) overseas, or engage in more share buy-backs and acquisitions, plus the usual executive compensation of course.  Of course this could be short term as a couple of the interviewees mentioned the fillip lasting only in the first quarter or so of 2018.  Interesting comment from him and his interviewee that maybe the best tactic for those late to the party is to invest like a rifle (stock pick) rather than a shotgun (passive index trackers).

[Fence]

15 minutes ago, Majorpain said:

How many of Carillion's suppliers are waiting on invoices to be paid so they can pay their bills?  That's the next part of this sorry saga.  Contagion is the magic word today.

Sorry but Carillion issued three profit warnings and was widely shorted by the market.

My understanding of the creditor ranking in a liquidation:

. Secured creditors with a fixed charge (e.g. banks and invoice factors holding security over a company’s sales ledger).

. Preferential creditors (including employees up to certain limits).

. Secured floating charge creditors and the ‘prescribed part’.

. Unsecured creditors (including trade suppliers, contractors, HMRC, suppliers, and customers).

. Connected unsecured creditors (including a director’s family and maybe a member of staff who lent money).

. Shareholders (if there are sufficient funds!).

Contagion?  Quite possibly.  Sadly, the banks may call in their loans or threaten the government with such in some form of attempted bargaining.

Edited January 15, 2018 by Fence

[Thorn]

If that happens surely that will force the DOW upwards. 

DOW tracker again?

[durhamborn]

18 minutes ago, Fence said:

Sorry but Carillion issued three profit warnings and was widely shorted by the market.

My understanding of the creditor ranking in a liquidation:

. Secured creditors with a fixed charge (e.g. banks and invoice factors holding security over a company’s sales ledger).

. Preferential creditors (including employees up to certain limits).

. Secured floating charge creditors and the ‘prescribed part’.

. Unsecured creditors (including trade suppliers, contractors, HMRC, suppliers, and customers).

. Connected unsecured creditors (including a director’s family and maybe a member of staff who lent money).

. Shareholders (if there are sufficient funds!).

Contagion?  Quite possibly.  Sadly, the banks may call in their loans or threaten the government with such in some form of attempted bargaining.

It will be interesting to see how they unwind this.The contracts are the assets,the government needs to sue the company for breach of contract so that the banks and secured creditors dont extract the value.The banks and bond holders shouldnt be getting anything back.

[kibuc]

I have to say I'm rather disappointed with silver performance, with DXY going down so much and gold doing quite well in comparison.

Also, Blackrock Gold and General (the only gold-related fund available in my SIPP) still manages to drop in value despite gold surge.

I don't understand any of it.

[Errol]

Petro yuan contract is apparently still being launched on 18/1/18, so expect some fireworks if that happens.

Edited January 15, 2018 by Errol

[Thorn]

3 hours ago, kibuc said:

I have to say I'm rather disappointed with silver performance, with DXY going down so much and gold doing quite well in comparison.

Also, Blackrock Gold and General (the only gold-related fund available in my SIPP) still manages to drop in value despite gold surge.

I don't understand any of it.

Seems like a lot of manipulation of the price. I spent an evening googling it and the price, volumes being traded etc seem to be controlled by some big companies who can keep the price down or let it rise as they wish, so far preventing price discovery. Worth a google.