Credit deflation and the reflation cycle to come (part 2)

[Hancock]

Sunak is a 

[Lightscribe]

1 hour ago, Innkeeper said:

For a couple of decades employers have been riding the wave of experienced ‘home grown’ labour and younger cheaper foreign trained labour.  Both these are running out as the home grown older labour force retires and the overseas workforce finds something better/goes home/can’t come here.

Corporate board members are paid millions to sort the answer to these problems instead of moaning.  It’s tougher for small businesses but they have to adapt.  Proper training, wages and a sense that the company actually appreciates you will go a long way (even to pull some of the skivers off their sofas).  But these basic things have long disappeared in the face of cooperate greed, terrible management and hopeless self serving trade unions.

 

My nephew is a part owner of a large, family generation run haulage firm. They managed to keep hold of their EU drivers as they bought up local cheap Kent property in previous years near the depot that they offer them subsidised rent for. They also pay them good rates and OT, so the drivers have tended to stick around over the years.

I spoke to my nephew this morning, they can literally pick their contract rates at the moment.

The grandad started that company at 15 with a clapped out van, kicked out of school with no qualifications and the nan pregnant with my nephew’s dad. His acumen was always to treat the drivers right, and it went from strength to strength over the decades. 

I wonder how all those ‘lean process’ six sigma qualified project managers and highly qualified company directors with all those letters after their name will fare, when a 40 year disinflation cycle reverses the other way. 

[Heart's Ease]

 

 

[Nomad]

Seems like the banks want the taxpayer to pick the bill up for people who are struggling to repay their mortgages, what a great scheme for the banks, we'll keep the profits but if there is any debt we want to pass that on.

https://www.bbc.co.uk/news/business-57240532

 

[DurhamBorn]

6 minutes ago, Lightscribe said:

My nephew is a part owner of a large, family generation run haulage firm. They managed to keep hold of their EU drivers as they bought up local cheap Kent property in previous years near the depot that they offer them subsidised rent for. They also pay them good rates and OT, so the drivers have tended to stick around over the years.

I spoke to my nephew this morning, they can literally pick their contract rates at the moment.

The grandad started that company at 15 with a clapped out van, kicked out of school with no qualifications and the nan pregnant with my nephew’s dad. His acumen was always to treat the drivers right, and it went from strength to strength over the decades. 

I wonder how all those ‘lean process’ six sigma qualified project managers and highly qualified company directors with all those letters after their name will fare, when a 40 year disinflation cycle reverses the other way. 

Exactly and that is what is happening.All these big companies were/are in desperate need of macro strategy,not all that dis-inflation rubbish.Inflation crushes all those stupid terms and jobs,but few had any idea what was coming.

My son works in a warehouse for one of the big discounters and they cant get the low paid pickers,30 come,1 is good enough or stays,the rest leave or are let go.He said they are going to put the wages up on the agency workers to try to get more in.

Welfare needs massive reform,but i dont think we will see any with this government,at least until they get shot of Boris.That is unless the treasury forces the issue once the BOE stops monetising the welfare budget.

Since the Blair government this country slowly moved to where half the people worked to support the other half and the difference between working and not closed to the point where having a crap job wasnt worth it.

Employers have treated people badly for a long time with zero loyalty or care to staff.This cycle will make them pay for that.

Im glad im such a good cook,because a big inflation in food hits me much less when i spend £40 a week than it will these families who spend well over £100 .

[Noallegiance]

If ever an article summed up where we are on multiple fronts without unwrapping the underlying causes and inevitable outcomes:

Why small investors are piling into share-trading apps - BBC News

[JMD]

13 hours ago, Transistor Man said:

Lyn Alden on Energy. 

Very good, well worth a read.

https://seekingalpha.com/amp/article/4436929-the-case-for-a-longer-term-oil-and-gas-bull-market?__twitter_impression=true

 

Just a reminder that similar great in-depth essays can be received from Lyn Alden by subscribing to her free newsletter (she also offers a rather 'inexpensive', and in my opinion very impressive, fee based service).

 

[HousePriceMania]

On 23/06/2021 at 10:14, HousePriceMania said:

 

Inflation ?

[Hancock]

1 hour ago, Nomad said:

Seems like the banks want the taxpayer to pick the bill up for people who are struggling to repay their mortgages, what a great scheme for the banks, we'll keep the profits but if there is any debt we want to pass that on.

https://www.bbc.co.uk/news/business-57240532

 

Max Keiser was good today, all about the UK and US housing ponzi schemes.

Apparently the US government is giving California 6 billion dollars of taxpayers money, to pay backdated rent to landlords. i.e. taking from the poor to give to the rich!

... with the added bonus of inflating property prices, so the poor are even more priced out, all profits are obviously privatised.

Just read that begging article for banks and mortgage holders, then after scrolling down, noticed the "house prices rise at fastest pace in 17 years" story.  Its all about property prices, absolutely fucken everything.

[planit]

I wanted to illustrate the current situation and where we are heading with regards to oil balances.

Section A in the chart of US oil stocks below is the last 3 months. The grey shadow is the average inventory for the last 5 years.

From the chart it is not very obvious how fast stockpiles are declining compared to the 'normal' for this time of year so I have extrapolated forwards.

For both the last 3 months (A) and the next 3 months (B) I have drawn in the 5 year average range boundaries. From this I can work out the 3 months drop from this 'expected' value. Then I apply the same drop on top of the average range  movement for the next 3 months. At current rate of shortfall of supply we end up at point X.

 

 

Now this clearly is a crude (pun intended) analysis mainly because I am using the range movement rather than the average movement.

The biggest reason I can see for the drop is oil transport has not shifted enough to make up for the drop in shale production. With the US self sufficient under Trump, there was no need to transport much oil to US. Now world oil flows will have to rebalance to address where the oil is needed and supply everywhere is tight (article).

The change in policy with Biden compared to Trump has also not helped and they seem to have their heads buried in the sand and be helping Russia and OPEC+. The balance of power has shifted towards OPEC and Russia for both oil and gas, Germany is as bad as the US. 

OPEC will keep oil supplies tight, they are quietly leading the world in the current situation and the squeeze is going to show up in the best location for them as the chart above predicts. This situation can't turn around quickly (like an oil tanker LOL) because we are already in the draw down season, shale is not ramping up and Biden is shutting oil down. There is no line of oil tankers on it's way to the US.

If everyone keeps ignoring the issue (hard to address 'dirty' oil and gas), I doubt the battered industry are going to come to the rescue (as they have a 'you deserve this' attitude) so in 4-6 weeks we should see the result.

  

 

[Hancock]

1 hour ago, DurhamBorn said:

 

My son works in a warehouse for one of the big discounters and they cant get the low paid pickers,30 come,1 is good enough or stays,the rest leave or are let go.He said they are going to put the wages up on the agency workers to try to get more in.

 

Thats exactly as im seeing it, in the factory im currently at. I'm outsider contracted by another company to work there, but i speak to the lads and its minimum wage agency work for most, when it needs to be £15 to keep them.

Agency staff come in for an hour, dont like it then go home ... that wouldnt happen if the wage was as i state, which could be attained by cutting the agent out the picture.

[JMD]

OK, this is kinda about Covid, and i know there is a covid thread - however i don't think this is off-topic because it relates directly to the macro - in terms of the potential political 'battle/control fronts' looming on the horizon. I'm not a prepper, but i do accept the long slow 'Total War' of economic/financial attrition thesis yet to be waged upon us, as mentioned regularly here by Harley and others.

I commented recently about trying to get my head round what form our next 'plan'tomime - the pandemic, might take on next. The below podcast goes someway toward answering those questions for me... So if the concerns presented happen, perhaps the timing of the BK will be when the next ultra-virulent-variant hits? (though not that helpful in terms of timing i guess).    

Long video, but the interesting bit starts: 1:53-2:05, so quiet short (followed by his research to 2:33 if interested).

So is this mere conspiracy? Or perhaps others might like to comment more on the topics mentioned. After all MSM won't inform us of any of this stuff. i.e Ivermectin, a legacy drug i'd not heard of, and is apparently a possible treatment, as well as being a form of immunisation. Or how Covid testing has been so suspiciously(?) awful. Or how the rapid development/specialist focus of the created immunisations will actually result in more virus mutations happening. Perhaps @dnb24 and @sancho panzaand others have informed medical views?    

Bret Weinstein is a biologist, and found himself at the centre of the Evergreen College/'BLM first engagement' 3-years ago - worth looking up if your not familiar with that shocking examplar of our increasingly retarded society!

(Btw, I like the Lex Fridman podcasts, he's become the latest long-form interview you tube star. He is a MIT A.I. researcher and so does come across bit eccentric, maybe think of him as the thinking man's Joe Rogan!)           

 

[HousePriceMania]

3 hours ago, Nomad said:

Seems like the banks want the taxpayer to pick the bill up for people who are struggling to repay their mortgages, what a great scheme for the banks, we'll keep the profits but if there is any debt we want to pass that on.

https://www.bbc.co.uk/news/business-57240532

 

https://www.theguardian.com/us-news/2021/jun/22/california-rent-forgiveness-plan-coronavirus-pandemic

 

California has a $5.2bn plan to pay off unpaid rent accrued during the pandemic

The rent forgiveness SUBSIDY FOR THE RICH program would pay landlords all of what they are owed while simultaneously giving tenants a clean slate LAND LORDS TAX PAYERS MONEY SO THEY DON'T LOSE OUT.

[DoINeedOne]

18 hours ago, Transistor Man said:

Lyn Alden on Energy. 

Very good, well worth a read.

https://seekingalpha.com/amp/article/4436929-the-case-for-a-longer-term-oil-and-gas-bull-market?__twitter_impression=true

 

Great article, just annoys me alot companies are not available via my ISA

--------------------------------------------------------------------------------

Interesting i think some of you discussed this before about companies profiting and using alot of a telecoms networks

https://telecoms.com/510357/netflix-ordered-to-pay-for-network-usage-in-korea/

A South Korean court has ruled against Netflix in a case over its payment – or lack thereof – of network usage fees.

The decision essentially means that the video streaming specialist will now have to pay the network operators to carry its traffic, pending the result of what is being seen as an inevitable appeal.

[sancho panza]

On 27/06/2021 at 18:59, Animal Spirits said:

The repricing and liquidations havent really got going yet either. Monetary policy has forced market participants to chase yield and own instruments where the underlying credit risk of the asset is not accurately reflected in it's price or yield.

Below investment grade bond index effective yield is a bit above 4% at the moment.

You can see how quickly things blow out when the overnight markets seize up. Very quickly only the most liquid instruments will be accepted in repo (T Bills etc). Then market participants are presumably forced to raise funds by liquidating other positions and then all heck breaks loose as Wolf Richter likes to put it.

They have the option to transact with the Fed in one of its loan facilities which might send the wrong signal to other participants and theres your banking system seized up. Would like to know who is still using these facilities assuming they've been turned away in repo...!

 

 

That's an absolutely fascinating chart in so many ways AS.As you say,this is before the birds hit the turbines.What's strange is that post covid ,insto's have piled back into these intrsuments when the effect of a deflationary shock on them has been throughly demonstrated....???

This has Fishers theory of debt deflation written all over it.The end will be epic.Solvency risk will reappear.

On 28/06/2021 at 12:05, Cattle Prod said:

What strikes are you thinking, if you don't mind me asking? 

Just be aware that my options trading is not that sophisticated unlike @MvR,is a spray n pray operation to a degree,uses ladders and uses my own unique method of measuring leverage/placing bets/hedging sector exposure.I mainly play with profits generally but with these goldie positions,I am hedging exposure to the wider PM sector and storing $ that we otherwise would have used to buy stcok in the PM miners.

Currently, we've Barrick set up thus,2 ladders in.

Sept 22,23,24,25,26(looks like we'll lose a chunk on this one)

Oct 22,23

Nov 20,21

Anglogold-2 ladders

Oct 20,21,22

Jan 19/20

Kinros

Nov 7,8

Fresnillo

Nov 850,900,950.

 

3 hours ago, JMD said:

So is this mere conspiracy? Or perhaps others might like to comment more on the topics mentioned. After all MSM won't inform us of any of this stuff. i.e Ivermectin, a legacy drug i'd not heard of, and is apparently a possible treatment, as well as being a form of immunisation. Or how Covid testing has been so suspiciously(?) awful. Or how the rapid development/specialist focus of the created immunisations will actually result in more virus mutations happening. Perhaps @dnb24 and @sancho panzaand others have informed medical views?    

 

Weinstein is really worht a watch and was recently interviewed by Joe Rogan I believe.

He has a great interview with Dr Robert Malone who ivented mRNA vaccine technology here

He has a great explanation about why PCR test results published without cycle counts are questionable at best,a blatant misrepresentation at worst here.

It's a rabbit warren going into this stuff.Prof John Ioannidis wrote a great piece here in 17/3/2020 regarding his prediction for the IFR which was 0.125% based on the Diamond Princess Cruise ship here

 

I think there are issues with vaccine safety and there are some very educated opinions on that not least from Dr Robert Malone himself,made in conjunction with Bret Weinstein and also a guy called Steve Hirsch in the video I put up first.

My own experience at work has very much reinforced my vaccine hesitancy.The other night I diagnosed two patients with new onset Atrial Fibrillation(and they were symptomatic with it).I normally see one case every three months maybe...key thing is that it's mainly treated with .........blood thinners because there's a clotting risk that the blood thinners reduce.

On taking the second one to hospital,I had a chat with the A&E sister and she said that they were getting a lot of new onset AF of late in older patients of late.

 

 

[Transistor Man]

35 minutes ago, Cattle Prod said:

- Why did the $ weaken from Feb 06 to Jul 08?

That’s the US housing bust, isn’t it? Jan 2006. 

[Transistor Man]

17 minutes ago, Cattle Prod said:

Nice. Did the Fed do something in response to the housing bust? I think QE started after all that...

 

“The greenback dropped against all major European currencies during 2006, pushed lower by the prospect of the Federal Reserve remaining sidelined or even cutting interest rates to spur growth while interest rates in Europe continued to move higher.”

[sancho panza]

1 hour ago, Cattle Prod said:

Thanks, I prefer longer dates as these things always take longer than I think it will, so I'm in Nov and Jan GDXJ, and SLV. I was going to roll them out a bit, but this PM dump has a smell of a sharp down and up (coincident with Basel III and opex tomorrow). Lets see. I need to get better organised with ladders.

So many interesting psots today that I'll return to later tonight.

On this point,it's why I'm using options on PM miners.If PM's dump we've still got the dollars.If they go up,then we win.Stay flat we lose but I think we're going up or down here.Flat jsut isn't how these things work.if they get cheaper,we'll buy the stocks.

I can hear the kids screaming down the drive.Gotta go.....

[Democorruptcy]

On 27/06/2021 at 16:38, AWW said:

Went to a party last night and got chatting to a guy who'd just qualified as a financial advisor. I asked him what his views were on some of our favourite subjects. The cycle turn. Housing. Equities. ESG. He didn't really have a view on any of it: "I'm just trained to choose a risk profile based on the person's age and risk appetite, then put them into the appropriate funds."

And people PAY for this advice!

There must be some good IFA's about but a lot are chancers. A good few years ago I had a gambling mate who sold camping gear in a local shop. He scraped through a couple of exams and became an IFA. He wanted me to invest some money but as I knew he was such a mug punter I decided against it. Unfortunately he talked my parents into it and lost them a good few quid in funds run for a firm he worked for but then left. Last time I spoke to him he had become a mortgage broker selling mortgages to single women on tax credits.

[planit]

I also think Bret Weinstein is good, his approach is very careful and methodical. Even so he has just been demonetised by YouTube for a month (I think the last one was a week)

Once people become political targets for the woke it is only a matter of time. There are other people showing evidence on Ivermectin etc that are untouched - like Dr John Campbell.

Absolutely shocking the control of information at the moment.

[ThoughtCriminal]

When they start saying shit like that its time to worry. 

 

I wonder how Lagarde's savings are doing. 

[Option5]

7 hours ago, Noallegiance said:

If ever an article summed up where we are on multiple fronts without unwrapping the underlying causes and inevitable outcomes:

Why small investors are piling into share-trading apps - BBC News

Lambs, slaughter are the words that spring to mind.

Now those at the top have got all the big money they start sifting through the dregs until they have everything. 

[Loki]

7 minutes ago, ThoughtCriminal said:

When they start saying shit like that its time to worry. 

 

I wonder how Lagarde's savings are doing. 

I wonder why she thinks people go to work in the first place

Only joking, I don't wonder at all, I know they only say dumb shit to keep up appearances 

[Froggy2000]

52 minutes ago, planit said:

Even so he has just been demonetised by YouTube for a month

Never heard of him but being demonetised by YouTube is a pretty good endorsement in my opinion.

I'll take a look.  Thanks!

[leonardratso]