Deflationary collapse and the Reflation Cycle to Come.

[leonardratso]

3 minutes ago, durhamborn said:

$1450+ then down below $1000 yes,silver up to $24 then down to $10,oil down to $15.IF im wrong though and we go straight to inflation there will be no pull back.What i am pretty certain of is PMs are going to have a massive bull market in the next cycle.

These falls might be bought yet.I had thought we might see a 10%-15% fall in this bear that is then bought.Hopefully not straight to crash.

 

i hope so, im almost total cash now, left house money in vanguard, fundsmith and evestor - all unearned so thats a freebie. crypto again was house money, so another freebie. Im watching gold (more silver), not seeing it yet.

[Majorpain]

1 minute ago, durhamborn said:

These falls might be bought yet.I had thought we might see a 10%-15% fall in this bear that is then bought.Hopefully not straight to crash.

You may not get your wish IMO, the markets have sucked so many in who has cash left to buy?  Amazon didnt get to a 225 PE ratio on spare change

[chronyx]

7 minutes ago, sideysid said:

Is it time to resurrect the ‘We are facing another global financial crisis of epic proportions’ thread?

I reckon so. I tried but i was a bit early

Edit. I would save this thread for the specific scenarios DB discusses, and the other for all other doom discussions 

Edited February 5, 2018 by chronyx

[durhamborn]

Just now, Fence said:

Now is the time to look for the solid players.  Like a stress test.  Works every time.  I noticed GDXJ holding up well too.

GBP looking weaker against USD going forward.  Maybe topped.

Bear trap - I expected one back in 2008 to sell into - ouch, did not happen!

So many weak supports for the S&P out there.  Just sliced through one today.  Stopped at the December congestion.  2,59x next but yup,  will be bought. 

I think dollar has bottomed against European currencies,it might carry on down to 86,but mainly the Yen.My liquidity flow and cross market work last year had sterling $1.22 up to $1.40,down to $1.09.S and P is going down 70%+ i think,but the route there who knows,i even saw a chance we go to 3000 first.Many UK stocks are already down 50%+ id expect we might bottom first.

[Fence]

Just as previously mentioned.  Back from the backslapping at Davos to the backstabbing on the dealing desks!

Did the new Fed chair not get sworn in today?  Nice in-tray waiting for him!

I'll be happy buying a tranche of income stocks tomorrow.  Nothing too silly and only those which have already taken a hit but hold up OK.

VOD's having a poor time.  Need to check the others.

[Fence]

Seeing quite a few charts with a resumed downtrend on the MACD histogram.  Never a good sign.

On the bright side, emerging market equity and debt looking relatively quite strong.

[Fence]

MACD about to cross over on gold in GBP.  Could mark a bottom (with higher USD gold plus lower GBP).

Edited February 5, 2018 by Fence

[Funn3r]

Anyone any thoughts on what might happen to the Euro v. Pound ?

[Fence]

11 minutes ago, Funn3r said:

Anyone any thoughts on what might happen to the Euro v. Pound ?

A bit indeterminate.  GBP has been on a slow rise since August last year but is now on that trendline and looks like some more selling to come.  Could be more of the stair stepping up or a trend change.

[durhamborn]

17 minutes ago, Funn3r said:

Anyone any thoughts on what might happen to the Euro v. Pound ?

I think longer term sterling outperforms the Euro,but they should go down together against the dollar.

[Thorn]

Probably same as a lot of people here I've been reading every single comment on this thread right from the start and it has given me a good starting point to get researching. Been reading articles and graphs ever since on subjects nobody every taught me about.

After all the delay in getting my pension over to HL, I started today slowly getting my head the dollar Index again, then round TLT , then getting started at buying using the HL app.

I've ended up with 80% cash, ready for whatever comes next.

And 20% of the SIPP fund now in TLT, a nice group of miners, PHGP gold and SSLV Silver.

Had a good think then decided to look at the laptop and went and added a wee bit of Royal Mail and Centrica for good measure.

If I hadn't found this thread I would not have had a clue even where to start or what to think.

Watching the US news and it's looking more and more like your predictions Durhamborn. Thank You.

Be Prepared.

PS I also used to hate it when this thread wasn't in the top ten on here.  

 

Edited February 5, 2018 by Thorn

[narco]

9 hours ago, durhamborn said:

I think longer term sterling outperforms the Euro,but they should go down together against the dollar.

Considering Euro will most likely experience an extinction event,  we should see the pound over perform against it.

[cognitive dissonance]

https://www.bloomberg.com/news/articles/2018-02-06/paul-tudor-jones-says-inflation-about-to-appear-with-vengeance

[cognitive dissonance]

34 minutes ago, narco said:

Considering Euro will most likely experience an extinction event,  we should see the pound over perform against it.

Back in 2012 Draghi said 'the euro is irreversible'..........the ECB is the market.......be careful betting against Central Bankers 

[Houdini]

28 minutes ago, cognitive dissonance said:

Back in 2012 Draghi said 'the euro is irreversible'..........the ECB is the market.......be careful betting against Central Bankers 

True but the ECB rules state that you can't rescue banks that fail and Deutsche Bank is going to fail at some point...

I don't believe the German Government can cope with the consequences so it will have to be bailed out. Then Italy will go ape-shit;.. 

Edited February 6, 2018 by Houdini

[GeordieAndy]

15 minutes ago, Houdini said:

I don't believe the German Government can cope with the consequences so it will have to be bailed out. Then Italy will go ape-shit;.. 

What German Government? 

https://www.zerohedge.com/news/2018-02-05/merkel-schultz-prelude-european-liquidity-shock

Edited February 6, 2018 by GeordieAndy

[zugzwang]

1 hour ago, cognitive dissonance said:

Back in 2012 Draghi said 'the euro is irreversible'..........the ECB is the market.......be careful betting against Central Bankers 

Draghi?

No individual has done more to imperil the European banking system and its currency than Stupor Mario!

[nayth]

12 hours ago, Fence said:

Pity I lacked the time to buy it.  I had spotted it's rising trend mid last week.  Oh well, only money.

VXX is one ETF.  Up 33% today!

Not, I assume, that you can buy it in the EU!

How likely are these type of ETFs to weather a market crash? (in terms of remaining liquid, rather than performance!)

[Sancho Panza]

19 hours ago, StarsEnd said:

Any thoughts on Centrica anybody? Could it fall a great deal further? Looking very tasty today at 127.60. Very tempted to start buying in now, only think that concerns me is that after a pretty big recent fall down to the 140 region they have continued falling (although more slowly). Are they decent value at this price? Certainly a nice divi in the range of 8% assuming they don't cut it.

 

As ever, DYOR. You have to understand your own personal risk profile and be comfortable with it.

Ours-We're rebalancing our portfolio away from other areas of speculation back towards equities which we pretty much exited pre 2007/8 crash post Northern Rock-aside from some historical holdings which we sat on. We're still heavily in cash.

I've explained my methodology previously when assessing stocks and it's individual to me-some charts, some numbers, some business model, some assets/liabilities etc.

Cut a long story short,I've been averaging into Centrica for a year, well aware that broader markets will sell off. I intend to create a portfolio of income stocks that are hedged by some high beta puts and substantial PM miner holdings.

Other stocks in my line of sight-off the top of my head,Vodafone/mobile telcoms,Nat Grid/utilities, oilies, Silvies, Platinum miners,Potash etc.

Centrica carries risks primarily financial eg pension liability, debts (it's leveraged at 87%), struggling in US market.

It also has strengths eg strong cashflow, real assets, strong customer base, some expanding parts of the business. some assets with $ exposure.

You pays yer money etc.We're currently down probably 35p on average.Looking to buy more over the next year.

The reason I've been so cautious investing over the last few years is the fact that I believe a big debt deflation is inbound and should have arrived post 2008.All our investments are done with that in mind.

19 hours ago, Errol said:

Isn't Centrica's pension deficit over £1 billion as well?

Pension deficits are a function of IR's and cashflow.Fence had a great list from Lemonfool of pension deficits/surpluses.

14 hours ago, durhamborn said:

The dollar hit my range dead on into the 88s (86 restated) a year later and thats when we started to see the market crack,very happy with that.Really pleased to see the GDXJ hold up in this as well.However these falls might be bought yet as i fully expect a massive bear trap before the main event.Dont want a collapse too quickly as i want these gold miners to run).

 

My spare time-which is mainly spent on looking after our invesments- is dominated by my obssession with hedging sterling vs the $.At $1.40 I feel time isn't on my side but I traditionally hedge £ via stocks................doh!

14 hours ago, Barnsey said:

Good point about the strong performance of Gold today, a positive test for the main event whenever that may kick in over the next few months.

I was really pleased with how the PM miners held up comparatively.Personally,I think thsi is a bull trap,so it may have some use as a guide come the real downturn.

Having said that,if/when we get margin calls on the NYSE then all bets are off.

[Sancho Panza]

 

13 hours ago, durhamborn said:

Yes they will,but its too late,they have already tightened us into a credit deflation.

Price inflation vs credit deflation.The Fed's hands are tied.

13 hours ago, Majorpain said:

You may not get your wish IMO, the markets have sucked so many in who has cash left to buy?  Amazon didnt get to a 225 PE ratio on spare change

At least it has a P/E ratio these days.

12 hours ago, durhamborn said:

I think longer term sterling outperforms the Euro,but they should go down together against the dollar.

Pick your poison-arsenic/cyanide?-either way there's one outcome.

3 hours ago, cognitive dissonance said:

https://www.bloomberg.com/news/articles/2018-02-06/paul-tudor-jones-says-inflation-about-to-appear-with-vengeance

https://wolfstreet.com/2018/02/02/wage-inflation-is-finally-here-and-its-toxic-for-the-fed/

'But it’s the most fervent “doves” – when they start getting cold feet as doves – that matter the most when it comes to tightening monetary policy.

One of the most persistent, most vocal doves on the policy setting FOMC has been Minneapolis Fed President Neel Kashkari. He voted against all three rate hikes in 2017, and was vocal about why he did: inflation was too “low.”

That’s the kind of fervent dove he is. But today, he started looking over his shoulder.

There was a number in the jobs report this morning that got his attention: Average hourly earnings in January gained 2.9% year-over-year, the largest gain since June 2009, hallelujah, finally.

Yet the moment wages tick up, suddenly it gets his attention. It gets every Fed governor’s attention. Wage increases give them the willies.

Creating asset price inflation, including the most glorious housing bubble imaginable, became the Fed’s publicly stated policy goal under Chairman Bernanke – his infamous “wealth effect” doctrine. And consumer price inflation must always be high enough to eat up wage gains and help companies show growing revenues, but not so high that it blows down the whole house.

But wage inflation is toxic for the Fed. Wage inflation means that people get paid more for the same amount of work.

 

1 hour ago, nayth said:

How likely are these type of ETFs to weather a market crash? (in terms of remaining liquid, rather than performance!)

Someone was saying a VIX inverse ETF got Credit Suisse a hosing.

[Sancho Panza]

15 hours ago, Lavalas said:

New blog from True Contrarian...

 https://truecontrarian-sjk.blogspot.co.uk/2018/02/when-tide-goes-out-you-can-see-who-isnt.html?m=1

And he's on good form.

' This was equivalent to Wile E. Coyote surging off the mountain's end, but just as in the cartoon nothing terrible occurred immediately. Then the coyote couldn't help but look down, and during the past week the collapse began. Unlike the cartoon it will take roughly two years before we hear the sound of the U.S. stock market finally hitting the earth far below. Whenever that occurs, we will almost certainly experience all-time record outflows which crush the previous records from the first quarter of 2009, along with incredibly bearish sentiment, massive insider buying, and the media telling everyone why it will take years for the U.S. stock market to recover. Naturally this will be followed by one of the strongest multi-month rallies in history. '

 

' Now that investors are able to purchase U.S. Treasuries and other safe time deposits at their highest yields in a decade, investors will have a valid reason to get out of the stock market in order to pounce on these yields.

Even "boring" bank certificates of deposit are paying nearly two percent for one year and more than two percent for longer maturities.

 

'' Here is one little-appreciated fact about the financial markets: they will always harm the greatest number of investors. The markets waited for the maximum intensity of inflows before starting to move lower. Whenever there have been recent massive outflows the next rebound will begin. Before the final bottom of the bear market we will have by far the biggest outflows so that most investors sell just before the biggest percentage gains occur. This pattern has been true for centuries and is an inherent feature of the financial markets which they usually don't teach you in school when you are learning about the glories of capitalism. '

 

' The same investors who were wildly bullish toward the U.S. dollar when it was completing a major topping pattern versus European currencies at the start of 2017 are now almost unanimously bearish toward the greenback. '

'I expect the S&P 500 to eventually lose more than two thirds of its value from its all-time top, whether that level has or hasn't already been reached, with its next bear-market nadir occurring roughly two years following its zenith. '

 

Edited February 6, 2018 by Sancho Panza

[durhamborn]

2 hours ago, nayth said:

How likely are these type of ETFs to weather a market crash? (in terms of remaining liquid, rather than performance!)

2nd derivatives are where the bombs are i think.Very similar to the program insurance that caused the 87 crash.$1.2 quadrillion in notional derivatives are out there.There were massive shorts on the volatility index,someone will of took a big bath there.

[Ash4781]

New Look numbers look dreadful . Heavy discounting , pretax loss.  I’ll have a look later at detail . Obviously bigger things going on with financial markets today!

http://www.telegraph.co.uk/business/2018/02/06/new-look-losses-continue-retailer-attempts-turnaround/

[Fence]

5 hours ago, nayth said:

How likely are these type of ETFs to weather a market crash? (in terms of remaining liquid, rather than performance!)

No way.  A few days trade at most.

[winkie]

1 hour ago, Ash4781 said:

New Look numbers look dreadful . Heavy discounting , pretax loss.  I’ll have a look later at detail . Obviously bigger things going on with financial markets today!

http://www.telegraph.co.uk/business/2018/02/06/new-look-losses-continue-retailer-attempts-turnaround/

From what I see there is excess stock in many retail places.......now is the time to buy what you need for the next few years at below discount prices, they can't in some cases give it away.