Inflation

[over9k]

HMMMMMMMMMMMMMM

 

[divs4ever]

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will be watching for data on home building materials ( and home constructions ) to add to that data

 

[gartley]

There are those who look for reasons as to why markets move..... I am not one of them. Nevertheless it never ceases to amaze over and over again the timing of geo political and even short term fundemental events with price pattern formations and cycles.
In this case this pattern had been forming for quite a while and long before the war. This was going to happen either way, with or without a war. If it was not the war it would have been something else

Perhaps putin deliberately did it at a time when he knew the sanctions would be the most painful (and therefore least likely) to implement

 

[gartley]

Perhaps putin deliberately did it at a time when he knew the sanctions would be the most painful (and therefore least likely) to implement?

To be quite honest I say when comes to trading the markets " who cares what Putin did"
I think this is what makes market price structures and market cycles fascinating, as they are the language of the markets and give clues to the potential of triggers before they even happen.
The problem with triggers like war or even other economic triggers is that sometimes when they occur they move the market a lot and other times they don't. The market patterns are a painting of the collective human growth system.

We as traders need to be in front of the market and try and anticipate these potential moves. The declining wedge or (ending diagonal) in the 10 yr yield was about 5 years in the making. it's very hard to time such long term pattern exactly especially when it's ending a 40 year bear market in interest rates. But we can see it's developing and that change is coming.

Interestingly economists now talking about stagflation over the next 10 years similar to the 1970's . This is a disater for mum and dad buy and holders, better a deep and brief crash. Personally I don't think it will be another lost decade but rather lost decades.....

 

[sptrawler]

Interestingly economists now talking about stagflation over the next 10 years similar to the 1970's . This is a disater for mum and dad buy and holders, better a deep and brief crash. Personally I don't think it will be another lost decade but rather lost decades.....

As long as the buy and hold investors portfolio keeps providing a dividend, the market fluctuations can be ridden out, I still wish the MIL had bought the 1,000 CBA at $10 in 1994.
The buy and hold investor, unless they are active traders, should be sticking to shares that grow their dividend naturally as the Countries population and GDP grows IMO.
Immigration will increase, money will be poured into the transition to a renewable generation and a renewable manufacturing base, that will lead to an increase in construction and a demand for materials, which will increase the demand for labour which should form a positive feedback loop.
But I do think trading will be extremely volatile, which should help those traders with a successful system.

Just my opinion.

 

[waterbottle]

Oil seems to be following the same path as other assets - down. Recession fears are now starting to bite.
Will be interesting to see what happens to inflation data this week from UK. Will be an indicator of how much further tightening has to go....

 

[gartley]

As long as the buy and hold investors portfolio keeps providing a dividend, the market fluctuations can be ridden out, I still wish the MIL had bought the 1,000 CBA at $10 in 1994.
The buy and hold investor, unless they are active traders, should be sticking to shares that grow their dividend naturally as the Countries population and GDP grows IMO.
Immigration will increase, money will be poured into the transition to a renewable generation and a renewable manufacturing base, that will lead to an increase in construction and a demand for materials, which will increase the demand for labour which should form a positive feedback loop.
But I do think trading will be extremely volatile, which should help those traders with a successful system.

Just my opinion.

Back in the 1970s the average buy hold ( aside from the divvy) didn't achieve much .
Incidentally IR peaked in 1981 and thereafter the stocks and real estate enjoyed the largest bull in history lasting 40 years.
Now IR is reversing that 40 year downtrend. Inflation and IR are the major part of the bull equation.
We live in times where the younger generation only experienced rising prices in a long term bull with rampant speculation happening almost in every asset class.
This will bo longer be the case but there will still be lot of opportunity with rallies but markets much more volatile a choppy .
As more traders become frustrated with less returns more will look to the technical side of analysis and other methodologies

 

[over9k]

Back in the 1970s the average buy hold ( aside from the divvy) didn't achieve much .
Incidentally IR peaked in 1981 and thereafter the stocks and real estate enjoyed the largest bull in history lasting 40 years.
Now IR is reversing that 40 year downtrend. Inflation and IR are the major part of the bull equation.
We live in times where the younger generation only experienced rising prices in a long term bull with rampant speculation happening almost in every asset class.
This will bo longer be the case but there will still be lot of opportunity with rallies but markets much more volatile a choppy .
As more traders become frustrated with less returns more will look to the technical side of analysis and other methodologies

QFT

 

[over9k]

Oil seems to be following the same path as other assets - down. Recession fears are now starting to bite.
Will be interesting to see what happens to inflation data this week from UK. Will be an indicator of how much further tightening has to go....

A lot. There's a lot of speculation now that central banks might try to get "ahead of the curve" in anticipation of further rising energy costs.

Doing so means recession. This IS stagflation folks, make no doubt about it.

 

[waterbottle]

A lot. There's a lot of speculation now that central banks might try to get "ahead of the curve" in anticipation of further rising energy costs.

Doing so means recession. This IS stagflation folks, make no doubt about it.

Yup, watching those numbers atm.

Not sure what the best play is here, but I'm staying in USDs for now.

 

[moXJO]

Anyone else been watching bank of Japan?

 

[Dona Ferentes]

Anyone else been watching bank of Japan?

What were you doing on Friday afternoon at 4.30 pm?

I was watching Haruhiko Kuroda.

I couldn’t understand a word he was saying, but I was watching his every move and hearing every mumble.

In fact there was a lot of mumbling.

Mumble, mumble, mumble…yield curve control…mumble, mumble, mumble…yield curve control.

The words yield curve control were said in English.

And then he started giggling.

Yes, Kuroda was giggling.

I watched $/Yen and it flickered, wobbled.

Why was the mighty Kuroda giggling?

Fortunately I had a live Bloomberg blog that was following the press conference and providing an English translation.

After an FX eternity the explanation came through on the Bloomberg Blog.

A reporter had asked if the governor can say definitely if a limit to yield curve control will come in the future.

Kuroda immediately got the giggles and his typically permanent poker face broke into a huge grin.

He replied, “that’s something of a philosophical question, but its possible to keep yield curve control going even as central banks elsewhere tighten.”

There you have it.

This man has not been shaken, or even stirred in the slightest, by the radical actions of his counterparts across the world.

He remains resolute and Churchillian and will fight them on the beaches, and in the fields and in the streets.

The battle between the bond vigilantes and the Bank of Japan has been joined.

This epic battle will help shape and define the contours of the global financial landscape in the months ahead.

In the meantime $/YEN reaches for the stars................

 

[over9k]

Anyone else been watching bank of Japan?

Yeeeeeeep

 

[waterbottle]

UK inflation at 9.1%, compared to 9% last month...

Looks like they'll need to go harder and follow the US Fed's lead of accelerating their interest rate hikes

 

[over9k]

Alright so the current dance is inflation vs recession (stagflation is when you have both and that's what they're trying to decide on) and which way the fed and powers that be want to err. As we've seen over the past week or so, after the inflation narrative was front & centre for the first half of the year, now with yellen, powell et al on record as stating they are "steadfast" in getting inflation back down to 2%, it's recession.

What us retail trading plebs need to remain cognisant of is that it is these very inflating energy costs which are actually causing the recession. We saw energy companies just scream at the start of the year because hey, the consumer had spare cash that could be squeezed out of them.

With interest rates now so much higher, we're now at the point of markets wondering if there's anything left to squeeze, and that's why we see prices dropping - there's just no spare cash left to demand oil.

So we now see a seesaw - oil prices go up, costs then increase, consumers don't buy as much stuff/demand goes down, oil prices go down, stuff gets cheaper so people then start buying/doing more stuff and around and around we go.

We obviously do not know where this is going to bottom and this is why we see the wild gyrations as the seesaw tips one way and then back the other. Hopefully everything I've pointed out so far is fairly obvious.

What is key to note here is that these are DEMAND side movements. The big fluctuations we see are demand (or lack thereof) driven. But the TREND we see energy on, that's a supply side (lack of supply side) one, and as I've pointed out in quite a few posts going back weeks, there's really nothing to suggest any real increases to the supply side of the energy equation any time soon.

So my play is still "buy the dip", it's just buy the dip in energy rather than tech now.

 

[3 hound]

View attachment 143189

Alright so the current dance is inflation vs recession (stagflation is when you have both and that's what they're trying to decide on) and which way the fed and powers that be want to err. As we've seen over the past week or so, after the inflation narrative was front & centre for the first half of the year, now with yellen, powell et al on record as stating they are "steadfast" in getting inflation back down to 2%, it's recession.

What us retail trading plebs need to remain cognisant of is that it is these very inflating energy costs which are actually causing the recession. We saw energy companies just scream at the start of the year because hey, the consumer had spare cash that could be squeezed out of them.

With interest rates now so much higher, we're now at the point of markets wondering if there's anything left to squeeze, and that's why we see prices dropping - there's just no spare cash left to demand oil.

So we now see a seesaw - oil prices go up, costs then increase, consumers don't buy as much stuff/demand goes down, oil prices go down, stuff gets cheaper so people then start buying/doing more stuff and around and around we go.

We obviously do not know where this is going to bottom and this is why we see the wild gyrations as the seesaw tips one way and then back the other. Hopefully everything I've pointed out so far is fairly obvious.

What is key to note here is that these are DEMAND side movements. The big fluctuations we see are demand (or lack thereof) driven. But the TREND we see energy on, that's a supply side (lack of supply side) one, and as I've pointed out in quite a few posts going back weeks, there's really nothing to suggest any real increases to the supply side of the energy equation any time soon.

So my play is still "buy the dip", it's just buy the dip in energy rather than tech now.

I think the true driver behind this is that western governments want fossil fuel prices to keep increasing forever until nobody is left on the planet able or willing to buy it.

The only constraint is to avoid total economic collapse causing widespread anarchy and public uprising directly against own governments.

The juggling act is keeping the pain going just enough to prevent chaos while forcing the transition to renewables.

There's no problem to fix, we are this way on purpose and will continue down this path until we have transitioned completely to renewables and most likely full socialism.

 

[waterbottle]

Not sure if buying the dip is going to be wise.

Every asset has started/is starting to fall based on tighter monetary policy leading to an expected recession. Oil is no exception.

The oil embargo involving Russia will eventually fade. Russians continue to export oil to China and India. Options to increase supply are being actively pursued. None of this IMO looks conducive to sustained, high prices for oil.

 

[over9k]

Not sure if buying the dip is going to be wise.

Every asset has started/is starting to fall based on tighter monetary policy leading to an expected recession. Oil is no exception.

The oil embargo involving Russia will eventually fade. Russians continue to export oil to China and India. Options to increase supply are being actively pursued. None of this IMO looks conducive to sustained, high prices for oil.

Lower oil prices would reduce inflation, which would bounce economies back into growth again. Hence the see-saw.

 

[Smurf1976]

None of this IMO looks conducive to sustained, high prices for oil.

The thing about oil is it's much like something kids often try doing with escalators.

Running up the one that's going down.

Every barrel of oil taken from any given well is one less barrel left and as pressure drops and water cut increases, production inevitably tapers off. Slowly but it happens.

Or in simpler words, it's either keep drilling or production slides which then sets up for a renewed spike in prices.

A complicating factor there being that incredibly low interest rates have themselves encouraged drilling. When stocks are at extreme values and money in the bank pays nothing, an oil well needs only to make a small profit to be worth drilling and plenty have done exactly that over the past decade. Now however, with money starting to have at least some value in terms of interest, that comes into question. A well that is marginally profitable is now competing with cash or bonds that, whilst not paying much, do at least pay something.

My thinking being that at least partly explains the sluggish resumption of drilling. Paying down debt becomes a credible alternative use of funds if you're actually going to be charged interest on it.

 

[over9k]

The oil companies all getting together and conspiring not to drill, up supply etc etc isn't exactly unrealistic either.

There's a reason why GUSH hasn't followed NRGU nearly as high.