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

[MrXxxx]

2 hours ago, Vendetta said:

For me it’s a “No” - as I reckon I’ve picked up nearly all of them at their cyclical lows and they may be insulated from the major fallout

So looking at your opening statement it means an overall drop of 10-20%...where does that take us back to in the indices, Nov 2020? [guessing]....I think you point above is the crux of the matter i.e. its not buying the index generally but the buying of specific stocks, hence the weakness of passive ETF's in such a current volatile market and the need for active buying of specific companies/sectors.

[MrXxxx]

47 minutes ago, sancho panza said:

 

A heavily reduced cross psot from the sceptics thread(don't wish to offend the long post police).Some data hot fo the press from 15 Jan regarding ICU admissions.Hattip @dnb24

Key points are exploding themyth that there's a lot more younger people going into ICU currently.Also reaffriming that being overweight remains a critical indicator for ICU admission.

Also showing that the increase in numbers going to ICU isn't that high,it's jsut that despite having 10 months to prepare,the NHS hasn't been able to cope with a 10-20% rise in demand.

https://www.icnarc.org/DataServices/Attachments/Download/4cd9c693-6657-eb11-912d-00505601089b

 

 

 

 

 

 

Figures 15,16,21 and 22 say it all.

I wonder if fig 27 has been standardized, my impression is that it hasn't as otherwise I would expect the last column [logically] to be the highest.

Thanks for this @SP...and thanks for not posting the whole document! :-)))

[DurhamBorn]

1 hour ago, Democorruptcy said:

The equivalent mother now wouldn't have to spend hours working at home for peanuts and would have a flat screen TV, Sky, mobile etc. This is because the central bankers are such goodies and created a lot of money for the governbankment to spend. DB suggests they do their good work so people like her have a better life now?

They do it so the economy can create jobs for her.How the government structures the fiscal side isnt up to them.Labour inherited the economy just as it had dealt with the early 80s defeat of inflation and as it was entering a period of steady real growth.They used that to fund welfare and state jobs instead of slowly cutting tax on work.Brown was a disaster,easily the worst no 11 has ever seen.Its not all bad,for instance our economy is very efficient,probably the best in the world in many areas.I got a good sized chicken yesterday from Aldi for £2.49 for instance.I think the Tories plan to reform welfare was along the right lines,but they bottled it under pressure.They did keep the two child limit though at least.

The cycle should see governments have to face up to structural deficits,but it cant all come from cuts,some big tax increases are certain,distribution cycle for most people.

[Loki]

32 minutes ago, Cattle Prod said:

a whole bunch of personal tragedy

Indeed but I look at suicides, ruined businesses, family breakups, children mentally effected (For life?), fear programming...

To be fair I think any 'oldies' worth a damn would rather take the risk of hugging the grandkids and just letting life carry on.  Like that lady in Yorkshire.

[Democorruptcy]

29 minutes ago, DurhamBorn said:

They do it so the economy can create jobs for her.How the government structures the fiscal side isnt up to them.Labour inherited the economy just as it had dealt with the early 80s defeat of inflation and as it was entering a period of steady real growth.They used that to fund welfare and state jobs instead of slowly cutting tax on work.Brown was a disaster,easily the worst no 11 has ever seen.Its not all bad,for instance our economy is very efficient,probably the best in the world in many areas.I got a good sized chicken yesterday from Aldi for £2.49 for instance.I think the Tories plan to reform welfare was along the right lines,but they bottled it under pressure.They did keep the two child limit though at least.

The cycle should see governments have to face up to structural deficits,but it cant all come from cuts,some big tax increases are certain,distribution cycle for most people.

In all honesty I thought bennies paying more than work was all crash Gordon's doing. I didn't realise it stretched back that far. Maybe in the future he could be looked on as a visionary? No seriously! He started paying people to reduce their hours and stay at home. Before covid I was suggesting helicopter money and basic income was coming, partly after watching this video a few years back. Automation means there won't be enough jobs. You can call it tax credits, furlough, basic income or whatever you want but it's going to be more widespread.

 

[DurhamBorn]

6 minutes ago, Democorruptcy said:

In all honesty I thought bennies paying more than work was all crash Gordon's doing. I didn't realise it stretched back that far. Maybe in the future he could be looked on as a visionary? No seriously! He started paying people to reduce their hours and stay at home. Before covid I was suggesting helicopter money and basic income was coming, partly after watching this video a few years back. Automation means there won't be enough jobs. You can call it tax credits, furlough, basic income or whatever you want but it's going to be more widespread.

 

I think UBI is the only long term answer,but nobody seems interested yet.The present situation means those doing most get least,those doing least get most.Thats not sustainable.I actually think cutting welfare by around half,but removing all means tested and making it a UNI for everyone would help the bottom end.Tax credits were the main disaster and of course DLA/PIP being handed out for naughty children.

[NogintheNog]

On 15/01/2021 at 10:04, Cattle Prod said:

Interesting, nice and smooth. Brent had a daily doji yesterday, and is due a pullback in my view.

One for you CP. Start at 5 mins 30. Discusses the shale oil 'boom' (and bust)

 

[Talking Monkey]

2 hours ago, jamtomorrow said:

Not namby-pamby at all. People overlook the fact that in the grand sweep of human history, concepts like "work" and "work ethic" are something of a fad.

Sure, they've been around for 10,000 years or so and are therefore deeply ingrained in human culture over hundreds of generations. But that doesn't change the essential fact that work is a temporary socio-economic and technological construct.

The adjustment to a predominantly automated world is going to occur *very* quickly relative to that 10,000 year legacy, and will f*** with many heads and many articles of faith in human affairs.

Brilliant post, I think that automation of most work could be as little as 30 years, provided it doesn't all fall over. How resources are distributed when 90% of people are deemed surplus to requirements could lead to some serious misery

[Harley]

2 hours ago, sancho panza said:

 

A heavily reduced cross psot from the sceptics thread(don't wish to offend the long post police).Some data hot fo the press from 15 Jan regarding ICU admissions.Hattip @dnb24

Key points are exploding themyth that there's a lot more younger people going into ICU currently.Also reaffriming that being overweight remains a critical indicator for ICU admission.

Also showing that the increase in numbers going to ICU isn't that high,it's jsut that despite having 10 months to prepare,the NHS hasn't been able to cope with a 10-20% rise in demand.

https://www.icnarc.org/DataServices/Attachments/Download/4cd9c693-6657-eb11-912d-00505601089b

 

 

 

 

 

 

Many thanks.  I think that post was important enough and well edited down.

Somebody will no doubt rightly be along to knock these data, such has been the sorry saga so far, but taking these as they are my immediate thought is an app that gives your risk of hospitalisation or death based on a full set of the reported parameters (rather than one at a time) such as age and obesity.  But then that'll be the last thing TPTB would want.  And therefore is really necessary!  It's shocking, as usual, that after all this time we don't have more data such as vit D levels, ethnicity, etc on admission to hospital to further refine and effectively manage things. 

Some of us in the private sector must be looking at their equivalent public sector cohort in disbelief.  The better ones collect and crunch the data and provide feedback to improve performance.  A shocking performance, maybe to be confirmed after the 25 year public enquiry unless it's all full on 1984 by then!  There are only two doors for these people: "criminally incompetent" or "evil".

[Talking Monkey]

22 minutes ago, Harley said:

Many thanks.  I think that post was important enough and well edited down.

Somebody will no doubt rightly be along to knock these data, such has been the sorry story so far, but taking these as they are my immediate thought is an app that gives your risk of hospitalisation or death based on a full set of the reported parameters (rather than one at a time) such as age and obesity.  It's shocking, as usual, that after all this time we don't have more data such as vit D levels on admission to hospital to further refine and effectively manage things. 

Some of us in the private sector must be looking at their equivalent public sector cohort in disbelief.  A shocking performance, maybe to be confirmed after the 25 year public enquiry unless it's all full on 1984 by then

 

But then that'll be the last thing TPTB would want.  And therefore is really necessary!

My money is it being full on 1984 by then Harley. An absolutely shocking performance for sure over the last year

[Bobthebuilder]

On 16/01/2021 at 12:04, DurhamBorn said:

On tobacco im really watching these vape releases by BAT in Manchester,mood enhancing vapes could be a huge business and it would be regulated so likely only the big tobacco companies would control it.

https://www.bat.com/group/sites/uk__9d9kcy.nsf/vwPagesWebLive/DOBX3MNL

Really interesting development that. When I first read your post I thought, so what they sell CBD vape oil in B&Ms already. This is different, and I quote "Initially available in Manchester, UK, it will offer adult smokers and vapers sensorial enjoyment, as VUSE CBD Zone caters to a variety of moods and moments in their busy lifestyles."

Bit of a game changer me thinks. That sounds like CBD oil with THC in it.

[dnb24]

43 minutes ago, DurhamBorn said:

I think UBI is the only long term answer,but nobody seems interested yet.The present situation means those doing most get least,those doing least get most.Thats not sustainable.I actually think cutting welfare by around half,but removing all means tested and making it a UNI for everyone would help the bottom end.Tax credits were the main disaster and of course DLA/PIP being handed out for naughty children.

DB, and anyone else who cares to chip in, velocity is key when we get released from these lockdowns and CB fiscal policy and M1 gets sucked out into the economy. As far as I can see - inflation is going to be a seen as requirement (from central planner). Government spending is going to be front and centre, but surely (my emphasis) there will be areas in the economy that will run hot as people spend- especially in the early days while old habits exist, has any of your cross market work highlighted these areas at all? 

[Harley]

3 hours ago, Cattle Prod said:

The benefits culture here really is something else. Maybe it's just been here longer than most places. 

The polos (all) have grown it (dependency culture) to create their ideal client state.  It can only end in tears.

[MrXxxx]

15 minutes ago, Bobthebuilder said:

https://www.bat.com/group/sites/uk__9d9kcy.nsf/vwPagesWebLive/DOBX3MNL

Really interesting development that. When I first read your post I thought, so what they sell CBD vape oil in B&Ms already. This is different, and I quote "Initially available in Manchester, UK, it will offer adult smokers and vapers sensorial enjoyment, as VUSE CBD Zone caters to a variety of moods and moments in their busy lifestyles."

Bit of a game changer me thinks. That sounds like CBD oil with THC in it.

Why is it initially being limited to Manchester, why not UK wide?

[Bobthebuilder]

3 minutes ago, MrXxxx said:

Why is it initially being limited to Manchester, why not UK wide?

Some sort of government test I presume. It says a UK wide roll out later in the year if all goes well.

[Yadda yadda yadda]

1 hour ago, Cattle Prod said:

Clear link there between morbid obesity and serious corona infection. Another factor confirming that this disease wouldn't have registered even 20 years ago. In times past, we neither had the fat people nor the very old people that the virus is bringing down. This is of course why it's barely noticeable in Africa. 

So looking at it as an objective Darwinian - the virus is attacking the weakest, as has been happening since time immemorial. The problem is we are making our societies weaker. This is perhaps a new element to factor into future macro roadmapping: as we facilitate obesity and strive to perserve life in the aged way beyond it sensibily would have been in the past, we are leaving ourselves indefinitely open to the prospect of governments destroying our economies on a periodic basis every time a virus does what viruses do in taking out the weak.

I'm aware that sounds callous and there is a whole bunch of personal tragedy in there, but that's whats happening. Our carb and sugar heavy diets pushed by the nhs downwards, and moralising about quantity over quality of life is weakening us. My grandad lived till 92. Drove a car till 89, self sufficient till 91, a year in a care home listen to the matches on the radio and drinking cans of beer we'd bring him. Planned out his funeral, then died. He was probably lucky, but he always ate good unprocessed food, never too fat, physical work his whole life. Not rocket science. I don't think we're supposed to have death dragged out for 5+ years, the economic implications of this are terrifying. And to anyone who says all life is equal, I say would you rather your elderly mother or your son died. I won't be burdening anyone when I'm old, one way or another.

 

 

The NHS has long used the concept of Quality Adjusted Life Years when allocating funding. Just needs tinkering with.

[Yadda yadda yadda]

4 hours ago, jamtomorrow said:

Not namby-pamby at all. People overlook the fact that in the grand sweep of human history, concepts like "work" and "work ethic" are something of a fad.

Sure, they've been around for 10,000 years or so and are therefore deeply ingrained in human culture over hundreds of generations. But that doesn't change the essential fact that work is a temporary socio-economic and technological construct.

The adjustment to a predominantly automated world is going to occur *very* quickly relative to that 10,000 year legacy, and will f*** with many heads and many articles of faith in human affairs.

Thought provoking post. Employment and currency may be relatively recent developments. Work isn't. Not if you include foraging, hunting, making weapons, cooking and fighting as work. I don't know how prehistoric societies dealt with those who didn't contribute. I suspect they looked after the elderly but I doubt anyone would have been allowed a free ride if they were capable of work of some sort.

If employment largely disappears those that own the means of production are unlikely to be benevolent towards the now  unneeded. At least not beyond the need to pacify whilst they're perceived a threat. Quite likely that 'other' humans will be regarded as an environmental problem.

[DurhamBorn]

29 minutes ago, dnb24 said:

DB, and anyone else who cares to chip in, velocity is key when we get released from these lockdowns and CB fiscal policy and M1 gets sucked out into the economy. As far as I can see - inflation is going to be a seen as requirement (from central planner). Government spending is going to be front and centre, but surely (my emphasis) there will be areas in the economy that will run hot as people spend- especially in the early days while old habits exist, has any of your cross market work highlighted these areas at all? 

I dont do any work on short term things like that because im more interested in the money base itself and the structure.Its that where you can roadmap out prices on key inputs.However id go back to the roaring 20s and take a look at the data there.It would say,having a bloody good time and all that goes with it.You cant drive around our shopping park now as the cars are always backed up for Mcdonalds drive through.Iv never seen it not backed up.We just need to capture the inflation as close to source as we can.You can double potash's price yet a Big mac only go up a few pence,we want that double.

[DurhamBorn]

27 minutes ago, MrXxxx said:

Why is it initially being limited to Manchester, why not UK wide?

To iron out any problems i suspect and get customer feedback.Then roll out.BAT can pretty much do what they want with their billions of free cash flow.I think once the debt is down a bit more they will roll out new areas,and probably lots of small bolt on buys.They were always my biggest holding until i sold the lot and they are now 7th biggest again.They will be back in the top 3 soon i think.They also own 30% of the big Indian fag company and are a good play on India as well.

[Talking Monkey]

11 minutes ago, Yadda yadda yadda said:

Thought provoking post. Employment and currency may be relatively recent developments. Work isn't. Not if you include foraging, hunting, making weapons, cooking and fighting as work. I don't know how prehistoric societies dealt with those who didn't contribute. I suspect they looked after the elderly but I doubt anyone would have been allowed a free ride if they were capable of work of some sort.

If employment largely disappears those that own the means of production are unlikely to be benevolent towards the now  unneeded. At least not beyond the need to pacify whilst they're perceived a threat. Quite likely that 'other' humans will be regarded as an environmental problem.

On this I think once bad times globally hit, 'other' humans will slowly start being seen as an environmental problem

[Harley]

1 hour ago, dnb24 said:

DB, and anyone else who cares to chip in, velocity is key when we get released from these lockdowns and CB fiscal policy and M1 gets sucked out into the economy. As far as I can see - inflation is going to be a seen as requirement (from central planner). Government spending is going to be front and centre, but surely (my emphasis) there will be areas in the economy that will run hot as people spend- especially in the early days while old habits exist, has any of your cross market work highlighted these areas at all? 

Agreed.  Velocity is a funny thing, a behavioural, psychological thing.  So much has happened that it would be potentially naive to model behavior based solely on the past consumption dynamics  Also, the amount of money you have influences what you spend it on (e.g. pure consumption (frivolous versus less so) versus capital).  I'm sure a large cohort has done very well out of Covid, holding income with a reduction in costs and opportunities to spend.  Might those with a serious ability to marginally consume focus proportionately more on such items as debt pay downs and other financial improvements, as well as other more capital items, rather than pure frivolous consumption?   After all, it's no secret we're all effed!  The consumer was tapped out before all this (interesting?) so it's over to governments with the consumer being a marginal player?  Did the Romans end up just spending on bread and circuses or did they also spend somewhat less "recklessly"? 

I'll continue to move my core allocations to the sources of the value chains and just trade the noise.  I still have much to do given the current equity sector/regional allocations resulting from my legacy FTSE income investing approach:

The devil is in the detail though.  For example, "Transportation" contains what are (currently?) legacy dogs like SCG but also now have some Chinese ports.  A lot of the "Finance" are insurance/assurance companies so the recent @DurhamBorn comment has me doubly concerned.  Interestingly though some of these companies (globally) may have been strengthening technically in the last few weeks.  The regional split is a bit confusing as the last seven are regional ETFs (so across sectors) but I'm trying to internationalise my individual equity holdings via international exchanges which is hard given the constraints of most ISAs/SIPPs.   DYOR!

[Hancock]

4 minutes ago, Talking Monkey said:

On this I think once bad times globally hit, 'other' humans will slowly start being seen as an environmental problem

If peoples basic necessities are covered by the state, then they'll be breeding like rabbits ... thus creating billions more "other humans"

[Harley]

3 hours ago, Chewing Grass said:

This was the interesting one for me and probably more significant with age.

25 - 30 is blatantly overweight

>30 is obese

So that is 79.3% are overweight and 47.5% are obese land whales

There you have it in a nutshell, sedentary lifestyles and poor cardio-vascular fitness.

[Harley]

1 hour ago, NogintheNog said:

One for you CP. Start at 5 mins 30. Discusses the shale oil 'boom' (and bust)

 

Suncor showed me a bit of skirt last week.  Should I stop and chat or walk on by?

[Option5]

46 minutes ago, MrXxxx said:

Why is it initially being limited to Manchester, why not UK wide?

You haven't been to Manchester have you?