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

[Democorruptcy]

They are going to financialise water now

Quote

 

Water joined gold, oil and other commodities traded on Wall Street, highlighting worries that the life-sustaining natural resource may become scarce across more of the world.

Farmers, hedge funds and municipalities alike are now able to hedge against — or bet on — future water availability in California, the biggest U.S. agriculture market and world’s fifth-largest economy. CME Group Inc.’s January 2021 contract, linked to California’s US$1.1 billion spot water market, last traded Monday at 496 index points, equal to US$496 per acre-foot.

The contracts, a first of their kind in the U.S., were announced in September as heat and wildfires ravaged the U.S. West Coast and as California was emerging from an eight-year drought. They are meant to serve both as a hedge for big water consumers, such as almond farmers and electric utilities, against water prices fluctuations as well a scarcity gauge for investors worldwide.

https://financialpost.com/investing/water-joins-gold-and-oil-for-first-time-as-traded-commodity-on-wall-street-amid-fears-of-scarcity

 

 

[Harley]

10 hours ago, JMD said:

A reminder of more normal times?... Get with the (global reset) program Harley, surely that was our 'old' normal, with the 'new' normal yet to be defined!!

Cheeky b*gger - I've been warning you guys about this for yonks - and many of my words are not wasted - "a reminder of more normal times" - attention to detail me son, attention to detail. 

[Democorruptcy]

1 hour ago, DoINeedOne said:

 

Marc van Gerven, who headed the solar, storage and onshore wind businesses at Shell, Eric Bradley, who worked in Shell’s distributed energy division, and Katherine Dixon, a leader in its energy transition strategy team, have all left the company in recent weeks. Dorine Bosman, Shell’s vice-president for offshore wind, is also due to leave the company. Several other top executives in the clean energy part of the business also plan to exit in the coming months, two of the people said. I wouldn’t be surprised if we see more high-profile departures Person familiar with the internal split Not every move is known to be linked to frustration about the pace of change but people familiar with the internal debate said there were deep divisions over the timeframe for reducing the company’s dependence on oil and gas revenues

 

lol

 

 

Link https://financialpost.com/commodities/energy/shell-executives-quit-amid-discord-over-green-push

[AWW]

3 minutes ago, Democorruptcy said:

They are going to financialise water now

The unit "acre-feet" suggests that's just a weather future in a slightly different frock, to get some publicity.

[Majorpain]

39 minutes ago, spygirl said:

Japan is an export machine with a very loyal onshore debt holders. Mrs Yomoko is the modern day equivalent of the No Surrender Jap soldier on a Pacific island.

I don't think i'm going to see a more amusing description of a countries savers!

[AWW]

Can we talk about the apparent bubble that is Tesla? I'm starting to wonder if I've been thinking about it the wrong way - what if it's an energy stock? Storage and distribution of energy. The cars are just there to create demand for their storage and distribution tech. Thinking along those lines led me to open a small position at just under $500. Plus, when it joins the S&P 500 in a couple of weeks, the index tracker funds are going to have to buy gobs of it, which I thought made for a decent entry point.

Forgive me dosbods for I have sinned.

[Chewing Grass]

1 minute ago, AWW said:

Can we talk about the apparent bubble that is Tesla? I'm starting to wonder if I've been thinking about it the wrong way - what if it's an energy stock? Storage and distribution of energy.

Still not worth it as there are many other companies and many other technologies in the pond, any lead Tesla has will be short lived. Tesla is a glamour stock for bubble riders and those interested in shiny tech but are not particularly tech savvy.

[Bricormortis]

1 hour ago, Democorruptcy said:

They are going to financialise water now

 

Always was going to happen...I look at how much I pay for a tank of petrol, then think the water companies must envy that price, after all what can you live longer without...petrol or water ? I did have a holding in Mueller water which did quite good, but I transferred it to Shell in a divi seeking tidy up before the recent run up.

[AWW]

You can collect water for free when it falls from the sky though. Try that with petrol.

[Virgil Caine]

5 hours ago, jamtomorrow said:

More fluttering from the Wealth Tax kites:

https://www.bbc.co.uk/news/business-55236851

This part is comedy gold:

"A 1% per year tax rate could be imposed for five years on wealth of more than £1m per two-person household, the Wealth Commission said."

Best of luck with that one.

By the time anything like this is implemented, they'll have "discovered" that pinning down the net worth of truly wealthy individuals is like nailing the proverbial to the wall. So they'll be coming after mugs like us instead - it'll be more like: anything over £100K and it'll be the SIPPs and ISAs they go for, because they're sitting ducks.

Wealth taxes are notoriously difficult to assess and they never rarely raise the amounts claimed. The biggest laugh about these stories is that some cited Argentina one of the planets perennial financial basket cases as an example of a how the money might be raised. These exercises also involve a lot of double counting of wealth such as money in savings and pensions. For example, I would hazard a guess quite a bit of money held in savings accounts by those over 65 are in fact lump sums taken at retirement from pensions. It therefore counts as part of the lifetime allowance used when valuing a pension. The money does not exist twice.

[Harley]

1 hour ago, AWW said:

You can collect water for free when it falls from the sky though. Try that with petrol.

Isn't that forbidden in some part(s) of the US? 

[spygirl]

3 hours ago, AWW said:

Can we talk about the apparent bubble that is Tesla? I'm starting to wonder if I've been thinking about it the wrong way - what if it's an energy stock? Storage and distribution of energy. The cars are just there to create demand for their storage and distribution tech. Thinking along those lines led me to open a small position at just under $500. Plus, when it joins the S&P 500 in a couple of weeks, the index tracker funds are going to have to buy gobs of it, which I thought made for a decent entry point.

Forgive me dosbods for I have sinned.

 

2 hours ago, Chewing Grass said:

Still not worth it as there are many other companies and many other technologies in the pond, any lead Tesla has will be short lived. Tesla is a glamour stock for bubble riders and those interested in shiny tech but are not particularly tech savvy.

I'm not interest in Tesla as an investment.

It is interesting as a company.

They genuinely do have a lead of electric vehicles. Iirc Tesla market cap is worth multiples of Ford n GM combined.

Even the non leccy bits are clever - body assembly etcetc.

Just goes to show how shut entrenched management are.

Tesla offers growth.

Ford n GM offers pension liabilities.

[Chewing Grass]

15 minutes ago, Harley said:

Isn't that forbidden in some part(s) of the US? 

The only funny buggers are Colorado who limit it to two Barrels (110 US Gallons), Georgia (you can only water plants with it) and Arkansas where the collection system has to be designed by a certified professional engineer. Everywhere else is free 'n' easy.

[janch]

Higher rate pensions tax relief could face the chop

The Government is facing a large hole in its finances, and while it’s not yet acknowledging the elephant in the room, this almost certainly means tax rises in the near future.The Conservative election manifesto rules out rises to income tax, National Insurance or VAT, which are the three big levers the Chancellor could otherwise pull. That leaves the burden falling squarely on other areas, and pensions could be one of them..........

.............Each £100 contributed to a pension costs a basic rate taxpayer £80, a higher rate taxpayer £60, and an additional rate taxpayer £55.

 

This is from last week's Shares magazine from AJ Bell.  Maybe this is to prepare us for what's to come (instead of a wealth tax?)

[Green Devil]

17 minutes ago, janch said:

Higher rate pensions tax relief could face the chop

The Government is facing a large hole in its finances, and while it’s not yet acknowledging the elephant in the room, this almost certainly means tax rises in the near future.The Conservative election manifesto rules out rises to income tax, National Insurance or VAT, which are the three big levers the Chancellor could otherwise pull. That leaves the burden falling squarely on other areas, and pensions could be one of them..........

.............Each £100 contributed to a pension costs a basic rate taxpayer £80, a higher rate taxpayer £60, and an additional rate taxpayer £55.

 

This is from last week's Shares magazine from AJ Bell.  Maybe this is to prepare us for what's to come (instead of a wealth tax?)

Id say the odds on cutting are 90%. Highly likely IMO. Can't see a wealth tax as too many tories mates affected. Gotta be a pension grab as that is paid by the squeezed middle not the 1%. 

[Virgil Caine]

Just now, Green Devil said:

Id say the odds on cutting are 90%. Highly likely IMO. Can't see a wealth tax as too many tories mates affected. Gotta be a pension grab as that is paid by the squeezed middle not the 1%. 

Unlike a wealth tax cutting pension tax relief requires minimal effort for the government with no new tax computer systems or complex and costly valuations of assets before  assessments can be raised. 

[AlfredTheLittle]

2 minutes ago, Virgil Caine said:

Unlike a wealth tax cutting pension tax relief requires minimal effort for the government with no new tax computer systems or complex and costly valuations of assets before  assessments can be raised. 

It's hugely complicated because how do you withdraw higher rate relief for defined benefit pension? They already had to change the annual allowance because of doctors, this would be a hundred times more complicated, I don't think they'll do it 

[sancho panza]

How do you explain that at first which appears a paradox?

 

https://www.investing.com/news/commodities-news/oil-stockpiles-rose-an-unexpected-152-million-barrels-eia-2365265

Investing.com -- Crude oil stockpiles rose far more than expected in the latest week the Energy Information Administration said on Wednesday.

Crude inventories spiked last week, adding 15.2 million barrels compared with analysts' expectations for a 1.42 million-barrel drawdown.

Distillate stockpiles, which include diesel and heating oil, rose by 5.2 million barrels in the week against expectations for a 1.41 million barrel increase, the EIA data showed.

Refinery crude runs rose by 424,000 barrels in the last week, EIA said. The weekly refinery utilization rate was 1.7%, according to the report.

U.S. gasoline inventories rose by 4.22 million barrels last week the EIA said, compared with expectations for a 2.27 million-barrel build.

 

 

 

versus...

of note OXY has near doubled in a month.

[Castlevania]

56 minutes ago, Virgil Caine said:

Unlike a wealth tax cutting pension tax relief requires minimal effort for the government with no new tax computer systems or complex and costly valuations of assets before  assessments can be raised. 

I don’t think you’ve ever dealt with the U.K. government.

I read that a change to pensions tax relief would take up to three years to implement due to having to update systems.

[Virgil Caine]

Just now, Castlevania said:

I don’t think you’ve ever dealt with the U.K. government.

I read that a change to pensions tax relief would take up to three years to implement due to having to update systems.

I worked for the Inland Revenue for nearly a decade in the 1980s so I know exactly how government works.  In fact I helped write one of the first computer systems for the  Revenues Pension Scheme Office. The issues with Pension Tax relief largely revolve around the computer systems run by Scheme Administrators not HMRC. If you think Pension Tax relief is complicated imagine how difficult a wealth tax would be to assess. For a start HMRC holds no upto date valuation of domestic properties in the U.K. The last one was done over 20 years ago. Then there are the problems with assets which might be double counted as savings  such as Pension Lump  sums. This is without considering things such as the valuation of  shares in non listed companies, capital investments in things like art, Jewellery, antiques etc.

[DurhamBorn]

6 hours ago, Democorruptcy said:

Link https://financialpost.com/commodities/energy/shell-executives-quit-amid-discord-over-green-push

Great news,means they are keeping oil and expanding gas,they can buy all the clean energy companies up with the massive free cash flow mid cycle when they cant re-finance at 7%+

Big oil doesnt need to build it,they can let other build it,then buy it cheap as the only ones with the cash.

[Democorruptcy]

22 minutes ago, Virgil Caine said:

I worked for the Inland Revenue for nearly a decade in the 1980s so I know exactly how government works.  In fact I helped write one of the first computer systems for the  Revenues Pension Scheme Office. The issues with Pension Tax relief largely revolve around the computer systems run by Scheme Administrators not HMRC. If you think Pension Tax relief is complicated imagine how difficult a wealth tax would be to assess. For a start HMRC holds no upto date valuation of domestic properties in the U.K. The last one was done over 20 years ago. Then there are the problems with assets which might be double counted as savings  such as Pension Lump  sums. This is without considering things such as the valuation of  shares in non listed companies, capital investments in things like art, Jewellery, antiques etc.

They could put the onus on people to declare their wealth and do spot checks, with huge fines to deter people from falsifying their declaration.

[Bricormortis]

Maybe a tax on bank and savings balances. I think Norway take 1% of your spare annually.

[Castlevania]

8 minutes ago, Democorruptcy said:

They could put the onus on people to declare their wealth and do spot checks, with huge fines to deter people from falsifying their declaration.

Alternatively charge an imputed rent on housing, based on housing benefit rates. There’s data for that.

[Democorruptcy]

5 minutes ago, Castlevania said:

Alternatively charge an imputed rent on housing, based on housing benefit rates. There’s data for that.

10 minutes ago, Bricormortis said:

Maybe a tax on bank and savings balances. I think Norway take 1% of your spare annually.

There's all sort they could do. They just have to make sure it doesn't apply to assets hidden offshore, so really wealthy people don't have to pay it.