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

[kibuc]

17 hours ago, janch said:

I met my son in Bath last Saturday and it seemed as if the whole world was there.  It was Brits too as at this time of year it would be mainly tourists in a normal year.  Mostly young Brits too and all eating in the many cafes/restaurants etc. 

Transport to get there was busier than earlier in the year (train me) and coach (son) from London.

Its the oldies and scaredies who are staying home.  Youngsters are out and about from what I've been seeing.

I went to London last weekend to get some escape from my family. The city partied like it was the 20s again (perhaps because it is?), Saturday morning there were young people dressed to impress all over the place clearly going somewhere fun, the place I went to there was a grand total of 5 security guys simultaneously manning the entrance AND reminding around a thousand people inside not to dance. It was purely for show and hardly anyone gave a fuck. Had a lovely night, including a "covid-unregulated" afterparty at a local brewery.

Around 20% people on the Tube had no mask at all and another 20% kept them firmly under their chins (and yes, I graduated from Spygirl's School of Made Up Stats).

[reformed nice guy]

58 minutes ago, wherebee said:

One thing I would like us to talk about is the potential for a crash in oilies prices if, come winter, some of the worst predictions of mass deaths from vaccine vulnerabilities/ADE start to come true.  

Now, I grant you it could all be bollocks, but anyone who claims 2020-21 are normal is just plain drunk.  What would be our signal for depressed demand due to mass vaxx deaths?  What's the sell point?

The oilies selling point is that demand will come back east (and west) due to declining production and the 3-5 lag in ramping up.  fair enough.  I've bought in heavily on that logical and very intelligence analysis by DB and others.  But in a world in which vaxx deaths kill substantial numbers, and the massive clusterfuck that will result, I don't see oil demand staying high, would you?

thoughts?

mine are to watch the pandemic threads for data on upticks of deaths of vaccinated people in the UK in Oct-Nov (as winter comes on and the average time from vaxxination approaches 12 months).

Cremation uses a lot of energy.....

[sancho panza]

2 minutes ago, kibuc said:

I went to London last weekend to get some escape from my family. The city partied like it was the 20s again (parhaps because it is?), Saturday morning there were young people dressed to impress all over the place clearly going somewhere fun, the place I went to there was a grand total of 5 security guys simultaneously manning the entrance AND reminding around a thousand people inside not to dance. It was purely for show and hardly anyone gave a fuck. Had a lovely night, including a "covid-unregulated" afterparty at a local brewery.

Around 20% people on the Tube had no mask at all and another 20% kept them firmly under their chins (and yes, I graduated from Spygirl's School of Made Up Stats).

Nice to hear you had a good time K.

People I speak to are increasingly getting sick of the nanny state stuff ,especially as they see different rules applying to UEFA officials and Hancock..........10 deaths a day from covid(within 28 days of a postive test).

the politcal class are losing it.

On antoehr matter,I joined @Bobthebuilder and @DoINeedOne buying goldie calls of late and some smallies.

Must say cant understand people selling goldies off because the fed wants to raise two quarter points in 2023.......whennreal rates are deeply negative.

[dnb24]

9 minutes ago, sancho panza said:

really exceellnet point.That would directly explain the complete lack of hosuing market activity in flats and terraces that ongoing.A lot of the volume is in houses with gardens.

 people in lower income deciles are even poorer than last year.

Also worth pointing out (hattip Lynn Alden) all the talk of mean and median wages going up, etc do seem to lean towards statistical anomalies- ie furlough has taken a huge swathe of the lowest earners out of the “official average wage” calculation- ie hourly wage example 8,8,8,9,9,10,12,17,17,22,22, take the bottom 3 away (on furlough) hey presto average wage increases- markets extrapolate from there.

I think this supports the above point- and something that may indicate the market is looking the wrong way once furlough fully ends and we see the realities of lockdown come home to roost. How will the markets take those “official” stats then?

[MrXxxx]

3 hours ago, nirvana said:

Why is the dollar keep going up with all this money printing?

Have the FED got it wrong yet again??? 

Because basically everyone else is doing the same, but their currency is shittier!....when you have a choice of dog shit [Euro], cat shit [Renminbi], bull shit [£UK] or sheep shit [$US] on your shoes which one would you choose?!

[MrXxxx]

49 minutes ago, sancho panza said:

Barnsey,interesting data in these charts so Im reprinting them larger so people can see the detail.Teh data only goes to Dec 20,so we don't have the recent volume data but we know it's down heavily yoy.

First up,notice the huge, and I mean huge drop in remortgages.Whether thats furlough,banks tightening,who knows.Incredible seeing that drop.Someones either not applying for credit or getting rejected.

On the second chart,the other thing I note besides the collapse is the large proportionate rise in 75%-85% LTV lending that looks to be the net result of the drop in 90-95% lending

fascinating.

 

My quick interpretation of that would be two things:-

1. The FTB is now priced out due to price inflation going above salary increases, lenders 'tightening', and BOM&D now exhausted/conserving wealth due to unsure future.

2. The BTL market has dried-up given reduced yield and tightening restrictions such as eviction etc.

Indicated by reduced >90% LTV funding.

[kibuc]

57 minutes ago, sancho panza said:

Nice to hear you had a good time K.

People I speak to are increasingly getting sick of the nanny state stuff ,especially as they see different rules applying to UEFA officials and Hancock..........10 deaths a day from covid(within 28 days of a postive test).

the politcal class are losing it.

On antoehr matter,I joined @Bobthebuilder and @DoINeedOne buying goldie calls of late and some smallies.

Must say cant understand people selling goldies off because the fed wants to raise two quarter points in 2023.......whennreal rates are deeply negative.

I feel like there's a growing polarisation of attitudes towards the virus - the young are increasingly more lax, while the older are trying to defend their careful approach by doubling down on it. My daughter has an eye exam today and I was told I can only walk her in and then I'll have to wait in the car (yeah, like fuck I'm doing that).

There are some interesting vibes I'm getting from hospitality sector. In the hotel I stayed in, I only managed to reach room service once, on other days noone would pick up. I was told at the reception they had staff shortages across all posts. Shame, as they made some juicy burgers.

Then there are stories I hear from my wife, about a significant number of her clients - a lot of them working in hospitality - changing jobs because they were fed up with being overworked due to their companies being understaffed. They moved to places which paid better and, miraculously, didn't suffer quite as much from unfilled vanacies. Who would have thunk it?

A lot of job adverts posted on windows of my local Budgens and M&S, too.

[Harley]

2 hours ago, wherebee said:

.....
thoughts?

mine are to watch the pandemic threads for data on upticks of deaths of vaccinated people in the UK in Oct-Nov (as winter comes on and the average time from vaxxination approaches 12 months).

I watch the charts.  Anything else does my head in.  Talk is talk and price is price.  I have little idea of my sector split save it's mixed and all the stocks seem to be in long term price uptrends.

[AlfredTheLittle]

1 hour ago, wherebee said:

One thing I would like us to talk about is the potential for a crash in oilies prices if, come winter, some of the worst predictions of mass deaths from vaccine vulnerabilities/ADE start to come true.  
 

I'm interested in this as well, I think a lot probably are, but the reality is none of us can possibly know the answer. The thesis is that over this decade oil is going to be a great investment, but there's a lot less certainty over whether the oilies share prices this time next year will be lower or higher.

Edit to add: personally, I'm staying invested through any dip. Don't want to risk missing the big gains

[Harley]

27 minutes ago, kibuc said:

I feel like there's a growing polarisation of attitudes towards the virus - the young are increasingly more lax, while the older are trying to defend their careful approach by doubling down on it. My daughter has an eye exam today and I was told I can only walk her in and they I'll have to wait in the car (yeah, like fuck I'm doing that).

So it was only older people that decided you had to wait in the car?  Did you attend the management meeting where that decision was made?  My point is it's just a feeling, as you say.  It may well be true to some extent (although a blanket statement would be idiotic).  But what's all this got to do with macro?  I guess we could talk about feelings as a tool for macro analysis.  Again, not being funny at all as it would probably be better than some of the tools out there!  But as been mentioned upthread, there is a long tail to all this which requires some decent analysis to navigate as well as some dust to settle (virus today, a variant twist tomorrow, maybe not even medical).

PS:  Yes, my partner had an exam and it was very controlled.  They would not let people in the shop until time, etc.

PPS:  My 80+ MIL is a BBC watcher, etc but dead against all of this, especially as she has a young granddaughter she wants the best for.  But then yes, she has to be careful what she says to who in her cohort.  She is not alone though. 

Anyway, I digress and that's an anecdote not data.

[Harley]

15 minutes ago, AlfredTheLittle said:

......

Edit to add: personally, I'm staying invested through any dip. Don't want to risk missing the big gains

My biggest problem with not being invested is where to put it if not.

[HousePriceMania]

52 minutes ago, Harley said:

My biggest problem with not being invested is where to put it if not.

NS&I is the only place to store your cash now, though getting it out isn't the quickest I've found, but that's maybe not a bad thing.

Oddly my premium bond win rate is up, not down 

[Majorpain]

1 hour ago, HousePriceMania said:

NS&I is the only place to store your cash now, though getting it out isn't the quickest I've found, but that's maybe not a bad thing.

Not quite, there is also the central banks nemesis:

 

[MrXxxx]

2 hours ago, kibuc said:

My daughter has an eye exam today and I was told I can only walk her in and then I'll have to wait in the car (yeah, like fuck I'm doing that).

I think this is part of the issue, companies/people are making up or overzealously applying rules and no one is challenging them/pushing back, so it gets more and more absurd/ingrained. My dentistry had a facemask and handwipe policy, I ignored it and when challenged said I was exempt, they then didn't `bat an eyelid`

[MrXxxx]

2 hours ago, Harley said:

My biggest problem with not being invested is where to put it if not.

Agree, in a similar position...my approach is to occasionally buy good stocks at low prices, accepting that whilst inflation is having an erosive impact on the cash reserves, in the short term due to current levels its not as much as BK drop would be.

[kibuc]

19 minutes ago, MrXxxx said:

I think this is part of the issue, companies/people are making up or overzealously applying rules and no one is challenging them/pushing back, so it gets more and more absurd/ingrained. My dentistry had a facemask and handwipe policy, I ignored it and when challenged said I was exempt, they then didn't `bat an eyelid`

It can have some serious effect on economy, too. The hotel I stayed in refused to accept cash (never mentioned it anywhere during the booking) "becasue covid" and simply told me to go somewhere else where they might accept it. Hadn't I been so desperate for my weekend out of town, I would have simply returned home. The very same day my wife was roaming our local hight street and saw a rainproof jacket she liked. She went inside, tried it on, wanted to buy it - sorry, no cash "becasue covid". So she got the fuck out of there and £170 stayed in her pocket. Baffling approach to doing business, really.

[planit]

4 hours ago, wherebee said:

One thing I would like us to talk about is the potential for a crash in oilies prices if, come winter, some of the worst predictions of mass deaths from vaccine vulnerabilities/ADE start to come true.  

Now, I grant you it could all be bollocks, but anyone who claims 2020-21 are normal is just plain drunk.  What would be our signal for depressed demand due to mass vaxx deaths?  What's the sell point?

The oilies selling point is that demand will come back east (and west) due to declining production and the 3-5 lag in ramping up.  fair enough.  I've bought in heavily on that logical and very intelligence analysis by DB and others.  But in a world in which vaxx deaths kill substantial numbers, and the massive clusterfuck that will result, I don't see oil demand staying high, would you?

thoughts?

mine are to watch the pandemic threads for data on upticks of deaths of vaccinated people in the UK in Oct-Nov (as winter comes on and the average time from vaxxination approaches 12 months).

 

I am expecting some kind of pullback in the next few months, there are loads of possible reasons but mass vaccine deaths is not currently on the list.

I would guess a spike up followed by realisation that the economy is not doing as well as imagined as the highest reason.

 

Sentiment against the oilies is so bad that I am prepared for the punishment to be extreme. I would hope to have sold some in the mean time so I can buy back on a sharp correction.

 

I am tuned in to the DOSBODS massive to get forewarned of the pullback.

 

[DurhamBorn]

3 hours ago, dnb24 said:

Also worth pointing out (hattip Lynn Alden) all the talk of mean and median wages going up, etc do seem to lean towards statistical anomalies- ie furlough has taken a huge swathe of the lowest earners out of the “official average wage” calculation- ie hourly wage example 8,8,8,9,9,10,12,17,17,22,22, take the bottom 3 away (on furlough) hey presto average wage increases- markets extrapolate from there.

I think this supports the above point- and something that may indicate the market is looking the wrong way once furlough fully ends and we see the realities of lockdown come home to roost. How will the markets take those “official” stats then?

Wages are going up a lot and the lowest earners included.Iv never known the amount of factory jobs  here in the NE.Every employer it seems is trying to get staff and you see in the adverts terms like,must want to stay long term,must turn in every shift,must do nights and turn in etc etc.Amazon have planted 2000 jobs onto the area and its decent money if you do some overtime and thats making the crap low paid factories who used to lay people off whenever work dropped stuffed.They simply cant get decent people.Younger are mostly on tax credits etc and dont give a shit,older getting access to their pensions and jacking in,or taking easier low paid work.Im getting calls almost every day,and you can hear they know the games up,if they want decent staff they need to pay more.Lots more.

 

[janch]

Possible new tax on meat??  Would they dare?

https://meatmanagement.com/meat-tax-may-be-necessary-says-governments-food-tsar/#:~:text=In a leaked draft report seen by The,necessary’ in order to help tackle climate change 

Maybe time to look at those companies which make fake meat.  This is what google came up with but I've no view on any of them.

https://brandessenceresearch.com/blog/top-10-plant-based-meat-companies

 

Then there's Agronomics ANIC.  I think someone on here has invested in them if my memory serves correctly.   DYOR etc.  This is not advice.

[janch]

Taxing the tech giants will make a hole in their profits and help to pay down all the government debts worldwide if they can make it work:

https://www.bbc.co.uk/news/business-57573380

Officials from 130 countries have agreed to overhaul the global tax system to ensure big companies "pay a fair share" wherever they operate.

[Harley]

1 hour ago, DurhamBorn said:

Wages are going up a lot and the lowest earners included.Iv never known the amount of factory jobs  here in the NE.Every employer it seems is trying to get staff and you see in the adverts terms like,must want to stay long term,must turn in every shift,must do nights and turn in etc etc.Amazon have planted 2000 jobs onto the area and its decent money if you do some overtime and thats making the crap low paid factories who used to lay people off whenever work dropped stuffed.They simply cant get decent people.Younger are mostly on tax credits etc and dont give a shit,older getting access to their pensions and jacking in,or taking easier low paid work.Im getting calls almost every day,and you can hear they know the games up,if they want decent staff they need to pay more.Lots more.

 

Maybe shows what they were getting away with using foreign labour and the key real shadow force behind Remain.  Alas, I expect the government to sort that out in their favour.  Or we get some proper overdue investment, hopefully out of profits and not taxpayer pockets. 

[Harley]

37 minutes ago, janch said:

Possible new tax on meat??  Would they dare?

https://meatmanagement.com/meat-tax-may-be-necessary-says-governments-food-tsar/#:~:text=In a leaked draft report seen by The,necessary’ in order to help tackle climate change 

Maybe time to look at those companies which make fake meat.  This is what google came up with but I've no view on any of them.

https://brandessenceresearch.com/blog/top-10-plant-based-meat-companies

 

Then there's Agronomics ANIC.  I think someone on here has invested in them if my memory serves correctly.   DYOR etc.  This is not advice.

Climate emergency followed by a tax(es) to save the climate.  Who would have thunk it.

[Harley]

1 hour ago, kibuc said:

It can have some serious effect on economy, too. The hotel I stayed in refused to accept cash (never mentioned it anywhere during the booking) "becasue covid" and simply told me to go somewhere else where they might accept it. Hadn't I been so desperate for my weekend out of town, I would have simply returned home. The very same day my wife was roaming our local hight street and saw a rainproof jacket she liked. She went inside, tried it on, wanted to buy it - sorry, no cash "becasue covid". So she got the fuck out of there and £170 stayed in her pocket. Baffling approach to doing business, really.

Top.  It's your money and you don't have to spend it.  And TBH a large part of the fun is the chase, which is for free!  Add the joy of exercising a frugal and principled moment and my total utility is higher than actually buying the stuff!

[23rdian]

4 hours ago, Harley said:

My biggest problem with not being invested is where to put it if not.

I sort of have this problem too. I transferred a decent amount in from a cash ISA, invested half now but have the other half sitting in the cash account earning 0pc. I don't really want to transfer it out again but I want it ready for a BK. Are bonds viable? Liquid enough for this? Any other alternatives?

[Harley]

4 hours ago, MrXxxx said:

Because basically everyone else is doing the same, but their currency is shittier!....when you have a choice of dog shit [Euro], cat shit [Renminbi], bull shit [£UK] or sheep shit [$US] on your shoes which one would you choose?!

I think they say "the best house in a bad neighborhood", but I prefer your explanation!  It's also going up because it's been going down!