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

[reformed nice guy]

8 minutes ago, ThoughtCriminal said:

Government revenue from north sea oil has plummeted.

 

Interesting effect of green obsession? Diminishing return from old fields? Or bit of both. 

Is there a more up to date one? Thats only 2016

[ThoughtCriminal]

8 minutes ago, reformed nice guy said:

Is there a more up to date one? Thats only 2016

Even more horrendous

[M S E Refugee]

This was posted on the Coronavirus Forum by @Transistor Man.

PHE has similar data for England, it looks like the Jabs are useless and possibly dangerous.

Could this be the Big Kahuna trigger?

[sancho panza]

On 09/07/2021 at 09:16, Boon said:

Suspect some of the price points will be psychological, think that is why shrinkflation is chosen as opposed to simply charging more for the same item. A lot of products I think have some big ties to a price. For instance a 4-pack of chocolate bars in the supermarket has been £1 for as long as I can remember, obviously the size has changed in that time.

I'd love to get my hands on some old receipts as I'm sure some things have not changed in price and have not been shrunk. Pasta, milk, lettuces for instance.

As for eating out I have been thinking they are in for a rude awakening at some point as people see the markups. Haven't been to Harvester for years but used to go regular for their early bird deals, but the prices seem shocking considering this is not a top-range place. The mains are mostly £13-16 now, by the time you had a drink you're dropping £20+ for 1 person.

It's not jsut shrinkfaltion tho Barnsey.Ingerdient disinflation is another issueMrs P is a food scientist,lots of products get re engineered ith more cost effective ingredients.

On 09/07/2021 at 11:39, Cattle Prod said:

This chart explains all you need to know about WTI pricing. It converts oil inventory into days supply, which is a much better metric. You'll hear 5 year averages discussed, or the inventory levels in the 2009-2014 period, but these are not corrected for what consumption was back then. Days supply incorporates that. It's effectively a 'twitchiness' measument: because supply is inelastic, price gets bid up when days supply drops. 

There are too many years on here, but you can see clearly that periods of high prices like 2006 to 2014 are around 20 days supply, and we are currently at 28 days. Price is front running inventory levels to some extent. I think it's pricing the trajectory of this drop: you can see it's already cut through 2016 and 2017. It's dropped about 5 or 6 days since May. If the trend continues, we'll be back to the low 20s by the end of summer, and we haven't been there since the days of $100 oil. That said, I think the dollar will have to drop for this trend to continue, to keep oil consumption high outside of the USA, and stop imports flooding in. WTI is priced off US inventories. I suggested a while back that WTI would close the gap to Brent or even exceed it, and that is happening now. That will attract imports. Unless other countries buy it first!

Dyodd

ABsolutely fascianting chart.Really speaks a 1000 words.Given what you've explained about the supply problems that are looming,this trend towrds 20 days looks baked in for some time yet,given CB's are reflating heavily at the same time as the marginal supply of US shale is crimping.I've wodnered if you have an insight into where US shale is on it's trip to it's bottom in terms of priduction.

Iirc you were predicting 3mn plus bpd dropping off US production by around now.Prices have obviously recovered some but then a lot of US shalers haven't enjoyed the full price upflift due to hedging losses.Wull that deprive the treadmill of the capital it needs to get production moving as prices stay above $70 WTI?

WIll a weaker dollar hamper the efforts of US shale to reinvigourate produtcion?

On 09/07/2021 at 23:12, Transistor Man said:

Tech/ Semiconductors - on this, Mr Hunter has been bang-on for the past 15 months. I can’t believe the parabolic ramp of, Nvidia.

I think wathcing the semicon ETF SOXX/SMH for some monthly weakness along with teh FAANG stocks won't do you any harm in this crash

On 10/07/2021 at 10:23, DurhamBorn said:

https://wolfstreet.com/2021/07/09/container-freight-rates-hit-new-extremes-up-6x-asia-to-us-europe-peak-shipping-season-still-ahead/

I sometimes forget,but i had a very successful one man band import business that i ran down and closed to get all the capital out because my roadmap showed that model was about to be destroyed.Most of the capital from that ended up in the goldies and silvers etc.

I was paying around £2000 for a 40 foot high cube container to ship,sometimes a little more.There is also VAT on the cost,so any increase in the cost sees an even bigger increase from extra tax.Thats before shipping from the port of course,you have trunking costs on top.

I used to get 550 firepits on a container so the port to port cost was about £4 a unit.Today it would be £24 a unit.

I used to land each unit and onto a pallet for an all in cost of between £35 to £38 and sell for £79

Here is one i used to sell now

https://www.amazon.co.uk/INMOZATA-Garden-Outdoor-Brazier-Firepit/dp/B07MP399R9/ref=sr_1_62?dchild=1&keywords=firepit&qid=1625908493&sr=8-62

£130

I can tell you that you can now manufacture almost all goods that are that size and over in the UK for cheaper than shipping from China.In some cases a lot cheaper,for insance shipping a washing machine will now be around £80 a unit,just the port to port.

Supply chains built on destroying ordinary peoples jobs have just walked direct into a reflation cycle wall.They are fucked.

The survivors need to pull back production quickly in bulky items and out survive their competitors and they need workers,but workers arent interested,

Thats why my phone rings every day offering job after job after job,and these are massive blue chip companies.Lower down the pecking orders the job sites are rammed with production operator jobs that they cant fill.The wages arent enough compared to retiring or welfare.

As i turn every job down i tell them the wages are far too low given the inflation in the economy (even the ones that would be considered very high wages for the NE) and i think to myself maybe you should of come to this thread in 16 and offered us 10x those wages,but not for engineering,for macro strategy.

I should add,the reason we are in the sectors we are is because they arent affected much by the above in a negative way,but they can bump up the prices with the inflation.BAT for instance gets millions of fags on a container and the shipping unit cost is tiny.

 

Fascianting insight DB,when you tell it like that in ways a laymen can understand ,it really spells out how powerfull the forces of inflation are.

WHilst a lot of banking big wigs have been saying it's transitory,I supect they may get a surpriese

 

[ThoughtCriminal]

26 minutes ago, M S E Refugee said:

This was posted on the Coronavirus Forum by @Transistor Man.

PHE has similar data for England, it looks like the Jabs are useless and possibly dangerous.

Could this be the Big Kahuna trigger?

Yeah, theres a lot of worrying data coming through now. 

 

26 countries went from having little to no deaths to seeing huge spikes after having the vaccination

[sancho panza]

On 10/07/2021 at 11:13, JMD said:

I agree. Plus India (or 'project delta'?!) didn't have a lockdown. And yet, like a modern fairy tale, the virus withered away. I know that people died and their tragic stories were important to see... But the rampant propaganda coverage the so called BBC put out daily about India during May still makes my blood boil. 

https://www.spectator.co.uk/article/lockdown-didn-t-save-lives-from-cancer

Everyone understood the government message in March 2020 to stay at home, protect the NHS and save lives. Yet the lives that we knew were being saved were ones from Covid-19. Anything more long-term than daily figures never registered. The concept of other causes of death – most devastatingly cancer – were secondary concerns. We may be about to see the consequences of this Covid solipsism.

The recent cross-party parliamentary report “Catch Up With Cancer – The Way Forward” showed that UK lockdowns had resulted in a staggering drop in cancer treatment. There were 350,000 fewer urgent cancer referrals in 2020, and 40,000 fewer cancer diagnoses, compared to 2019. These delays to diagnosis will lead to worse cancer survival rates, which were already mediocre compared to many Western countries.

Politicians, and plenty of scientists, like to talk as if there was only ever one option. But there was an alternative. In Sweden, where lockdown was less strict than the UK, there is evidence that patients with prostate cancer had their treatment protected during the first wave. While the number of new prostate cancer cases decreased by 36%, the number of patients treated by radical prostatectomies only fell by 3% compared to previous years and the number of patients having radical prostate radiotherapy actually increased by 32%. So how does the UK measure up against this?

 

 

 

The first wave saw a 43% reduction in patients undergoing prostatectomies for prostate cancer in the UK, a significant contrast to the 3% decrease in Sweden. These are devastating statistics. It is well recognised that delays in cancer treatment often lead lead to poorer prognoses. Any future assessment of the UK’s lockdown approach must include the devastating impact that lockdown has had cancer patients.

 

 

This backlog will take a long time to clear. There are more than 5 million people waiting to start NHS treatment. The divide between those who can and can’t afford private healthcare has seldom been starker. There are signs that more people are going private. By October 2020, London’s private hospitals reported a doubling in the number of patients prepared to pay for their own surgical procedures. Private insurers expected to see a long-term increase in demand as the NHS takes time to become fully operational again.

In the last 20 years, much effort and funding has improved cancer waiting times. UK cancer survival rates have improved, but at a reduced rate to many European countries. We had made substantial improvements in screening, diagnosis and treatment. But many of the gains achieved over years have been reversed in months. 

There will also be increased pressure from patients and charities to tackle a growing divide between NHS and private healthcare in the coming years. That gulf has been accelerated by the government’s decision to allow the treatment of patients with serious and urgent conditions other than Covid to be curtailed during the first and subsequent lockdowns. 

Covid-19 is not the only killer. Cancer continues to kill around 166,000 people annually in “normal years" – one shudders at the thought of the preventable deaths that will have been caused by lockdowns. Policymakers may like to tell the nation and themselves that there was no alternative, but there was. Cancer healthcare should never have been stopped. The data from Sweden shows that these patients could and should have been protected.

Professor Gordon Wishart is Chief Medical Officer at Check4Cancer and Visiting Professor of Cancer Surgery at Anglia Ruskin University.

[sancho panza]

1 hour ago, M S E Refugee said:

This was posted on the Coronavirus Forum by @Transistor Man.

PHE has similar data for England, it looks like the Jabs are useless and possibly dangerous.

Could this be the Big Kahuna trigger?

A couple of the vaccine sceptics at work were telling me that a large proportion of recent cases had been vaccinated.nice to see it in black & white and thank s  @Transistor Man

[sancho panza]

latest Acadata series.Markets are moving at hte margins-I'd love to see the volume data nationwide.

backs up what ive been seeing on my travels.

terraces suffer next or the top of the market

http://www.acadata.co.uk/assets/uploads/2021/07/e.surv-House-Price-Index-England-and-Wales-June-2021.pdf

worth noting in LE2 that detached outsold flats even thought they probably are outnumbered 10 to 1

[reformed nice guy]

1 hour ago, ThoughtCriminal said:

Even more horrendous

Holy moly, that probably doesnt even cover our ADHD kids bennies bill

[sancho panza]

1 hour ago, ThoughtCriminal said:

Yeah, theres a lot of worrying data coming through now. 

 

26 countries went from havingworyin little to no deaths to seeing huge spikes after having the vaccination

these are cases not deaths.needs to be borne in mind.

[ThoughtCriminal]

1 hour ago, sancho panza said:

these are cases not deaths.needs to be borne in mind.

The spikes were immediately after the vaccinations. 

 

Also the numbers of double vaccinated dying/seriously ill are peculiar in some countries. 

 

Lot of noise to be sifted through. Thats the story of this entire hysteria induced phenomenon. 

[M S E Refugee]

5 minutes ago, Cattle Prod said:

Not sure where you're getting the useless jabs conclusion MSE, those numbers are statistical noise on a population level. And as 80-90% of the pop is vaccinated, most of the noise (like a person with underlying probelms or one of the 5% that the vaccine doesn't work for) is in that group. Proportionately, more cases are still in the unvaccinated group. And the vast majority won't die or be hospitalised. No BK for me, there are too many parts of the world fully open like Texas or Florida for months with no problems.

It is more how the market would react if these Jabs are of no or limited use as Governments have went all in on the Vaccines.

To a rational person what is happening in Texas and Florida is good news but too many people think that Covid is a big deal.

[M S E Refugee]

3 minutes ago, Cattle Prod said:

The vaccines are very effective at preventing deaths and hospitalisation, you just have to look at the UK numbers.

I'm not sure we will know if that is true until Autumn/Winter.

[planit]

2 minutes ago, M S E Refugee said:

It is more how the market would react if these Jabs are of no or limited use as Governments have went all in on the Vaccines.

To a rational person what is happening in Texas and Florida is good news but too many people think that Covid is a big deal.

There is too much evidence that the vaccines are effective. If new strains come along that render existing vaccines ineffective, they will tweak the vaccine to work with the new variants.

We are a long way away from the general consensus being that the vaccines are ineffective or cause more problems than they solve. As time goes on the scientists are managing to explain the causes of the side effects so the risks go down of a serious side effect. 

ps I am not arguing for or against, that discussion is for elsewhere, the above is just what is most likely to be believed.

[M S E Refugee]

Just now, planit said:

There is too much evidence that the vaccines are effective. If new strains come along that render existing vaccines ineffective, they will tweak the vaccine to work with the new variants.

We are a long way away from the general consensus being that the vaccines are ineffective or cause more problems than they solve. As time goes on the scientists are managing to explain the causes of the side effects so the risks go down of a serious side effect. 

ps I am not arguing for or against, that discussion is for elsewhere, the above is just what is most likely to be believed.

Who says they are effective Pfizer, Moderna, AstraZeneca?

[leonardratso]

hmm, just signed into my lloyds bank account and thats littered with advertising for its own share dealing stuff now, not seen that pushed so heavily before, more shoe shining. What do they know? why push it now, is it the transitory (ie permanent) inflation? Maybe they see accounts awash with cash.

(like mine).

 

[Transistor Man]

30 minutes ago, Cattle Prod said:

The vaccines are very effective at preventing deaths and hospitalisation, you just have to look at the UK numbers. 

I hope that’s true. But do we know that? 

[Majorpain]

5 minutes ago, Transistor Man said:

I hope that’s true. But do we know that? 

Doesn't matter if they don't, how much longer can the economy keep functioning normally without something breaking?  I very much doubt that printing past December will be on the table, at least not without staring into the Weimar/Zimbabwe abyss.

I really need to find the propaganda poster from 1919 with the government telling the young it was their patriotic duty to risk going to work to stop the economy from collapsing, funnily the exact opposite to this time round.

[MrXxxx]

Thought for the day based on an interesting quote from an FT article today:

'A pound invested and reinvested in 1900 would have become £572 pounds by 2020, after adjusting for inflation. A dollar invested and reinvested would have become $2,291. A pound invested in UK government bonds would have become £10.40 and a dollar invested in US bonds would have become $12.50.'

[Lightscribe]

27 minutes ago, planit said:

There is too much evidence that the vaccines are effective. If new strains come along that render existing vaccines ineffective, they will tweak the vaccine to work with the new variants.

We are a long way away from the general consensus being that the vaccines are ineffective or cause more problems than they solve. As time goes on the scientists are managing to explain the causes of the side effects so the risks go down of a serious side effect. 

ps I am not arguing for or against, that discussion is for elsewhere, the above is just what is most likely to be believed.

There’s also no evidence of longer term side effects, especially in a newer form of delivery like in mRNA. Limited papers so far, but studies like the one below, suggest it doesn’t stay where it’s supposed to. It may indeed be effective at preventing deaths with Covid (bearing in mind most of the older/vulnerable adults would have received the AZ jab), but the resulting over production of spike proteins may cause issues further down the line.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7786155/
 

https://www.ema.europa.eu/en/documents/assessment-report/spikevax-previously-covid-19-vaccine-moderna-epar-public-assessment-report_en.pdf

[MrXxxx]

On 10/07/2021 at 17:07, Loki said:

I bought cigars with my medical exemption card around my neck

Even i cringed a bit but fuck em

...but did you not explain to the checkout girl that the bumper pack of condoms that you always buy was the cause of the issue/need for the card i.e. breathlessness?

[MrXxxx]

13 hours ago, sancho panza said:

It's not jsut shrinkfaltion tho Barnsey.Ingerdient disinflation is another issueMrs P is a food scientist,lots of products get re engineered ith more cost effective ingredients.

I find this interesting [and off topic], and you don't have to answer if you don't want to, does this mean that you don't eat processed food and/or does shopping take twice as long as Mrs P looks at all the labels?....must be great learning for your kids in nutrition....MrS P covers healthy diets and Mr P covers a healthy bank balance/investment strategy!

[MrXxxx]

27 minutes ago, Cattle Prod said:

The % of hospitalisation and deaths/cases in the UK. Totally different to previous case waves. Unless that data is made up, thats what says it. That, and the empty hospitals. This winter will be carnage for sure, with flu alone, and I'm sure that'll be spun into whatever. But I really don't think there is any great drama with the vaccines. I'll leave my 2c there and take it to the corona thread,sounds fun over there!

But bear in mind pre-vaccine and during the first round of Covid populations were being 'purged' of the weakest, so come the second and subsequent rounds [Post-vaccination] a) the populations are 'fitter', and b) Covid has had natural selection acting on serotypes making it less virulent [harmful] but more transmissible....remember correlation doesn't necessarily imply cause/effect....

 

...anyway, back to making money...trying to teach myself TA, what does the Blue circles with 'D', and the Red circles with 'E' represent in the figure below? @Harley?

[DurhamBorn]

What matters is that Covid etc is only the trigger for the end of the last cycle,it was coming whatever as all the macro said dis-inflation had ran its course,from economic indicators,political and social.Covid,could of been a war,a collapse,anything.

This is all classic looking for a reason stuff when the cycle is already underway.Liquidity drives everything,that and the cost of money.An interesting part to this cycle though,and one i didnt expect or even think about was the demand for money/credit falling very hard in the bond markets.Im trying to understand that now and add to roadmaps,but the main thing is it seems to push the cycle even more to a fiscal government injection cycle and CBs having bigger balance sheets.

Key things are the same as this thread always said.Western economies cant produce the wealth to sustain the demands.That means more production coming back,more investment in the backbone of the economy,and thats exactly what is happening behind the noise.

Companies who had to spend massive amounts building out physical assets during the dis-inflation were hated by the market because they dont understand how much inflation matters to these companies.Cost of capital can nearly be as much as return on capital employed and they run to stand still,or leverage to stand still.

The government is going to be fighting massive problems and at a time when the CBs stop printing.They need inflation to be higher than spending increases.The struggle of employers to get workers is classic stuff.I said to many people wages were going up and they thought i was mad,but welfare,retirement and wellbeing surpass wages for very large numbers of people.Government needs to reform welfare quickly,but im not sure they have the political will.

[wherebee]

1 hour ago, MrXxxx said:

Thought for the day based on an interesting quote from an FT article today:

'A pound invested and reinvested in 1900 would have become £572 pounds by 2020, after adjusting for inflation. A dollar invested and reinvested would have become $2,291. A pound invested in UK government bonds would have become £10.40 and a dollar invested in US bonds would have become $12.50.'

and a gold dollar would be worth 1800+

just sayin'