Interesting to see that US government receipts in April increased by $482 bn compared to March.
Perhaps it's a one off or perhaps tariffs are having an effect.
That number annualised would be $6tn of additional receipts combined with lower expenditure via DOGE would massively change the calculus here. US bond yields are irrelevant if the US government needs no bonds.
A good point - will be worth keeping an eye on next month's figures to see what the impact is. If the tariffs stay however, then goods costs will rise for consumers so the end result may be a market correction as numbers filter through to guidance.
Only thing for sure is the world is uncertain - and that undervalued UK companies and investment trusts will continue to see PE takeover pressure
' over the past five months, the net percentage of institutions underweight US equities has dropped by roughly 70 points, the steepest decline on record'.
I think this should read .. OVERWEIGHT US Equities. Just a typo, but a significant one.
thanks oak bloke! Currently my three biggest holding are AMRQ (gold mining) AVAP (air leasing you have covered previously) and Filtronic (space/satellite tech). I do actually hold SEIT but its a very small position (circa 2%) maybe i should review this?
Currently a 51.7% discount to NAV where that NAV includes a -12p per share penalty based on (in my view) an unwarranted discount rate for boring energy conservation or generation assets. A 64.9% discount if you agree that the discount is bogus.
Yields 14.4% a year so 3.6% per quarter currently fully covered.
But is a solution to the Bond Market squeeze really as simple as crashing the stock market?
Consider some of the effects of that
- Bankruptcies and commercial credit defaults
- Commercial real estate crack up.
- Pension Funds waterboarded
- US retail investors, already maxed out on their credit cards, kicked out of their own homes.
Not to mention of an out-of-control wave of asset write downs, crushing the banks..
Imo the entire paper credit system is as bent as a nine bob note. Rather than slagging off gold, these dreamboat apparatchiks are better off getting religion quick, and resetting the system around gold while they still have a measure of control.
Yep, it's not going to be fun. But the bond market rules the world. Every time the stock market recovers a little, the bond investors demand a higher yield in return for the changed risk premium vis-a-vis stocks to bonds.
The problem with changing to a gold standard is that while I think it's likely the long-term answer (see recent work), China has most of it!
Mr Archer
Interesting to see that US government receipts in April increased by $482 bn compared to March.
Perhaps it's a one off or perhaps tariffs are having an effect.
That number annualised would be $6tn of additional receipts combined with lower expenditure via DOGE would massively change the calculus here. US bond yields are irrelevant if the US government needs no bonds.
Best wishes for your new contract.
OB
A good point - will be worth keeping an eye on next month's figures to see what the impact is. If the tariffs stay however, then goods costs will rise for consumers so the end result may be a market correction as numbers filter through to guidance.
Only thing for sure is the world is uncertain - and that undervalued UK companies and investment trusts will continue to see PE takeover pressure
' over the past five months, the net percentage of institutions underweight US equities has dropped by roughly 70 points, the steepest decline on record'.
I think this should read .. OVERWEIGHT US Equities. Just a typo, but a significant one.
CIAN OHEIGEARTAIGH
Where do you put your money currently then based on this?
Real assets and businesses that are highly cash generative and essential.
LON:SEIT is one such, in my opinion.
https://theoakbloke.substack.com/p/more-twists-at-seit
thanks oak bloke! Currently my three biggest holding are AMRQ (gold mining) AVAP (air leasing you have covered previously) and Filtronic (space/satellite tech). I do actually hold SEIT but its a very small position (circa 2%) maybe i should review this?
Currently a 51.7% discount to NAV where that NAV includes a -12p per share penalty based on (in my view) an unwarranted discount rate for boring energy conservation or generation assets. A 64.9% discount if you agree that the discount is bogus.
Yields 14.4% a year so 3.6% per quarter currently fully covered.
OB
But is a solution to the Bond Market squeeze really as simple as crashing the stock market?
Consider some of the effects of that
- Bankruptcies and commercial credit defaults
- Commercial real estate crack up.
- Pension Funds waterboarded
- US retail investors, already maxed out on their credit cards, kicked out of their own homes.
Not to mention of an out-of-control wave of asset write downs, crushing the banks..
Imo the entire paper credit system is as bent as a nine bob note. Rather than slagging off gold, these dreamboat apparatchiks are better off getting religion quick, and resetting the system around gold while they still have a measure of control.
Yep, it's not going to be fun. But the bond market rules the world. Every time the stock market recovers a little, the bond investors demand a higher yield in return for the changed risk premium vis-a-vis stocks to bonds.
The problem with changing to a gold standard is that while I think it's likely the long-term answer (see recent work), China has most of it!