Credit deflation and the reflation cycle to come (part 3)

[DurhamBorn]

Brent  

[Plan-b]

9 minutes ago, DurhamBorn said:

Brent  

[Yadda yadda yadda]

16 minutes ago, DurhamBorn said:

Brent  

Don't go there, shit hole. Stay in Durham. The petrol would cost you a few Shell shares anyway.

[HousePriceMania]

19 minutes ago, DurhamBorn said:

Brent  

BP shell total repsol could see 50% gains imho 

 

[Harley]

20 minutes ago, DurhamBorn said:

Brent  

David? 

[Majorpain]

21 minutes ago, DurhamBorn said:

Brent  

Gas! (again...)

[HousePriceMania]

The crazy fool are at it again, they musta knocked this out at 1pm when evraz had headed back up to 95

https://www.fool.co.uk/2022/03/02/with-the-evraz-share-price-down-63-is-it-finally-a-buy/

 

 

Now at 60.

 

 

[Harley]

Just logged in and its all coming in thick and fast.  Totally mad.  Lots to do tomorrow so I'll leave this on account until later.

 

[Barnsey]

9 hours ago, Sasquatch said:

Some inflation information for you all. In a way this is directly from the 'coal face'.

I've been keeping one of our key clients up to date regarding construction tender price increases. It's pretty brutal out there. Builders are picking and choosing tender opportunities and passing on all of the materials and subcontractor price increases. As far as I can tell the builders are maintaining or even increasing their margins.

Data below is from the same contractor from two very similar projects, one now completed on site, one currently on site.

Tender submission date for project 1 was December 2018. Tender date for project 2 was November 2021. Therefore a 3 year gap.

DOT type 1 hardcore supplied and laid per m3  =  50% increase

Reinforced concrete in foundations per m3  = 20% increase

Steel reinforcement mesh in concrete slabs  =  110% increase (!)

Steelwork frame per tonne supplied and erected  =  35% increase

Facing bricks supplied and laid  =  30% increase

In my 30+ year career I've never seen price rises like this.

 

 

Intense. Could we see demand explode for repurposing existing vacant commercial property? Thinking used cars dynamic.

[Harley]

Oh and....

 

[Libspero]

5 hours ago, CannonFodder said:

Interested in the hive mind view here, are Opec nations getting somewhat miffed with the west and closing ranks.

Oil and gas could fly here. 

To quote the second article:

 Members of the OPEC+ oil producers’ group will meet Wednesday to discuss loosening the taps — just days after Russia’s invasion of Ukraine sent crude soaring past $100 a barrel.

[Barnsey]

https://thefelderreport.com/2022/03/02/want-to-win-in-the-markets-first-learn-how-to-lose/

When the Russian stock market crashed last week, I was intrigued. Panic in the markets never fails to grab my attention. At less than three-times earnings, there also appeared to be an adequate margin of safety in many Russian commodity-producers so I took at stab at it. However, after putting the trade on, I was never able to get comfortable with it as an actual holding and so I got right out.

Of course, buying into panic is never comfortable but at least you can have faith in the idea that there is some level of intrinsic value that provides a floor for potential losses. Buying Apple in the wake of Steve Jobs’ passing or Herbalife as Bill Ackman was pursuing an all-out short assault was uncomfortable but that faith in an intrinsic floor for prices was there. I just didn’t have that same sort of faith in buying Russian stocks today.

The point I’m trying to make is that we all make mistakes. I have made many over the course of my career. But I’ve learned, through difficult experience, to take the loss and move on. Study any of the greatest investors and traders in the world and, while they all have very different ways of making money in the markets, they all have one thing in common: they are very good at taking losses.

With all of the newbie traders that have come into the markets in the past couple of years, drawn to the idea of reaping huge profits in meme stonks, YOLO call options, NFTs and cryptos, this is a lesson that will likely be learned the hard way. But if you’re serious about becoming a real trader or investor, make it your mission to become great at taking losses and the profits will take care of themselves.

[Libspero]

Sounds like they are planning to lower the price, not raise it.  Which explains why my energy shares dipped a bit this afternoon.

[Calcutta]

3 hours ago, Jesus Wept said:

Oil price since 1950s….. recessions in grey….

 

Deflationary bust coming? 

July 2022 or much later…..? 

 

Oil down not always slump in a recession - as we can see in 1970s…

My main take away from that is oil is going to hit $200 a barrel then all hell breaks loose. Hopefully we make it to the next isa year before it does. 

[CannonFodder]

36 minutes ago, Harley said:

Just logged in and its all coming in thick and fast.  Totally mad.  Lots to do tomorrow so I'll leave this on account until later.

 

What on earth does bogged mean anyway, sorry if this discussed before, i cant find it

[Plan-b]

6 minutes ago, Calcutta said:

My main take away from that is oil is going to hit $200 a barrel then all hell breaks loose. Hopefully we make it to the next isa year before it does. 

Just a thought If your keen to get into a Tax wrapper a SIPP could provide a quick facility

[leonardratso]

2 minutes ago, CannonFodder said:

What on earth does bogged mean anyway, sorry if this discussed before, i cant find it

oh no dont start this again.

I think the upshot or result of the previous explanations was that it basically means anything you want it to mean good or bad. I could be wrong there though, so maybe its still open to (mass)debate.

 

[CannonFodder]

39 minutes ago, Libspero said:

To quote the second article:

 

 

Yeah they met today, fastest meeting on record, 13 minutes for the group.

No further loosening, only a small adjustment pre agreed at an earlier meeting.

Then brent shot to 115 dollars. 

Stuff peter schiff posted about powell on twitter is well wow, powell expects inflation to drop, just wow.

 

 

[Loki]

15 minutes ago, CannonFodder said:

What on earth does bogged mean anyway, sorry if this discussed before, i cant find it

You bought and it dumped? Bogged
You sold and it pumped? Bogged

[Harley]

15 minutes ago, CannonFodder said:

What on earth does bogged mean anyway, sorry if this discussed before, i cant find it

Yep, bugged me too.  I posted a while back my definition.  I take it as being at either extreme end of a normal distribution, so could be exceptionally bad or good, stupid or intelligent, etc.

[HousePriceMania]

43 minutes ago, Harley said:

Yep, bugged me too.  I posted a while back my definition.  I take it as being at either extreme end of a normal distribution, so could be exceptionally bad or good, stupid or intelligent, etc.

I looked up what it meant and I still dont know.

Cant be have face palm or something like that ?

 

[DurhamBorn]

Looking at the FED obvious now that they will be increasing rates but no reverse QE,liquidity is going to stay very high.They will force out the money from repo going forward to banks to stimulate lending.To do that they will need to increase the interest on reserve balances,likely by more than the market expects.Increasing the interest on reserve balances will encourage money to move out into the real economy.I think velocity has bottomed for a cycle now.

Signals are saying this is the START of a credit cycle,curve is rolling back real debt,but credit should enter the economy.Money in reverse repo should start to turn back.Only question now is how high  the FED needs to go with rates on reserve balances to force the issue.

[Sugarlips]

4 minutes ago, DurhamBorn said:

Looking at the FED obvious now that they will be increasing rates but no reverse QE,liquidity is going to stay very high.They will force out the money from repo going forward to banks to stimulate lending.To do that they will need to increase the interest on reserve balances,likely by more than the market expects.Increasing the interest on reserve balances will encourage money to move out into the real economy.I think velocity has bottomed for a cycle now.

Signals are saying this is the START of a credit cycle,curve is rolling back real debt,but credit should enter the economy.Money in reverse repo should start to turn back.Only question now is how high  the FED needs to go with rates on reserve balances to force the issue.

Thanks DB, how might this change the roadmap? Any new glaring unintended consequences?

[HousePriceMania]

3 minutes ago, DurhamBorn said:

Looking at the FED obvious now that they will be increasing rates but no reverse QE,liquidity is going to stay very high.They will force out the money from repo going forward to banks to stimulate lending.To do that they will need to increase the interest on reserve balances,likely by more than the market expects.Increasing the interest on reserve balances will encourage money to move out into the real economy.I think velocity has bottomed for a cycle now.

Signals are saying this is the START of a credit cycle,curve is rolling back real debt,but credit should enter the economy.Money in reverse repo should start to turn back.Only question now is how high  the FED needs to go with rates on reserve balances to force the issue.

Isn't 

 

QE,liquidity is going to stay very high

 

Inflationary?

Are they in a vicious circle now, leading to monetary collapse? 

 

House prices to accelerate thanks to the easy debt or collaoses thanks to the high rates? 

[HousePriceMania]

6 minutes ago, DurhamBorn said:

Looking at the FED obvious now that they will be increasing rates but no reverse QE,liquidity is going to stay very high.They will force out the money from repo going forward to banks to stimulate lending.To do that they will need to increase the interest on reserve balances,likely by more than the market expects.Increasing the interest on reserve balances will encourage money to move out into the real economy.I think velocity has bottomed for a cycle now.

Signals are saying this is the START of a credit cycle,curve is rolling back real debt,but credit should enter the economy.Money in reverse repo should start to turn back.Only question now is how high  the FED needs to go with rates on reserve balances to force the issue.

Isn't 

 

QE,liquidity is going to stay very high

 

Inflationary?

Are they in a vicious circle now, leading to monetary collapse? 

 

House prices to accelerate thanks to the easy debt or collaoses thanks to the high rates? 

 

The credit cycle for reference 

 

https://en.wikipedia.org/wiki/Credit_cycle