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


spunko

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8 hours ago, Bear Hug said:

BBC: Drax: Block on power station development overruled

More good news for you I guess.  I was actually looking at the share price around lunch on Fri and watched it run on my screen.  Probably too late now given today's news as well.

Might still get some cheap Royal Mail!  Before or after 15 Oct strike ballot results announcement, that's the question

Royal mail need to go tough on the union this time.If they strike dont put any overtime on,and go for a 1 in 8 redundancy  for starters.Turn the screw hard on them,most have mortgages and will break when they know its accept or end up working for Hermes.RM is a sleeping giant and should be 4 x the price,but they need to stop messing around with the union.

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leonardratso

hmm, well drax didnt spike this morning, maybe that news more in the 13% on friday, meaning someone had a precog on that... well dodgy.

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Democorruptcy
15 hours ago, DurhamBorn said:

Once margins fall and profits cant cover the interest bill.Debt deflation.The question is do the companies survive or not,the debt holders are stuffed.

https://www.bbc.co.uk/news/business-49957551

"its operating profits were more than offset by high interest payments on its £1.1bn debt pile."

Wetherspoons doing pizzas now has got to hurt the high street pizza places. The drink that comes with it is free compared to the pizza place prices.

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On 05/10/2019 at 13:58, DurhamBorn said:

Most get on the sick then though spy.A friend of mines partner is doing that now,two years before benefits go on her oldest child she is at the quacks ever week with "depression",seems 100% fine when i see her,but she has now being told she has some weird named mental illness and so she is trying to get PIP in her own name.She says she isnt used to working now,so it would be unfair on her to work,and it doesnt suit her life,she says other people like working but she doesnt.My mate had to do a day at the local food bank from his work,he said the amount of people getting food bags who had new iphones and new nails done etc was amazing.

This just exemplifys the way society has gone...I can remember my Grandmother trying to encourage my 93yo Great Grandmother to get some winter fuel payments, and she would `hear nothing of it, the shame!,what would the neighbours think?!`....nowadays people `wear it as a badge of honour`...The Welfare State was the best thing that could have happened for a generation, and the worst for those since!

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With Q3 in the bag, we are now entering reporting period for most miners. Many will provide operation updates this week, with financials to follow at the end of the month or early Nov, although some prefer to delay production update and release it together with the financials.

For 2/3rds of that quarter, gold stayed north of $1500/oz and silver north of $17/oz, sometimes significantly above that number. Those who have not suffered operational blows should be in very good position to beat earnings estimates.

Of the companies on my radar, Great Panther was first to deliver its Q3 production results:

Gold production: +18% QoQ

Silver production: +20% QoQ

Silver and gold grades up QoQ.

Full year guidane could still be a miss, mostly due to the weak Q2, but Q3 alone looks very good indeed.

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5 hours ago, leonardratso said:

hmm, well drax didnt spike this morning, maybe that news more in the 13% on friday, meaning someone had a precog on that... well dodgy.

It was out in the market the day before.The best way is to simply have ladder prices in place and ignore all the noise,Drax could go down to £2 or less in an oil sell off for a short period,iv got ladders in place between £2.37 and £1.94 .

This bear market in UK stocks is pretty brutal so far some really big falls across the board.

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1 hour ago, kibuc said:

With Q3 in the bag, we are now entering reporting period for most miners. Many will provide operation updates this week, with financials to follow at the end of the month or early Nov, although some prefer to delay production update and release it together with the financials.

For 2/3rds of that quarter, gold stayed north of $1500/oz and silver north of $17/oz, sometimes significantly above that number. Those who have not suffered operational blows should be in very good position to beat earnings estimates.

Of the companies on my radar, Great Panther was first to deliver its Q3 production results:

Gold production: +18% QoQ

Silver production: +20% QoQ

Silver and gold grades up QoQ.

Full year guidane could still be a miss, mostly due to the weak Q2, but Q3 alone looks very good indeed.

Currently trading at 2.8% UP... do own them within my self-build GDX ETF :)

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https://www.bbc.co.uk/news/business-49971853

Why invest when tax credits pay the wages.?

Zombie economy and end of dis-inflation.No point investing,no money to be made,low inflation means low velocity.Trillions parked in almost zero paying bonds etc because its easy and safe.Until it isnt.

Classic signs of the end of dis-inflation.The amounts out there that could start to chase after inflation after it arrives are eye popping.

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14 hours ago, Barnsey said:

I'm probably stating the obvious here but have you considered Morpeth?

Barnsey, thanks i'll take a look, do you know if it has good demand for potential holiday letting? 

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5 hours ago, Tdog said:

Either Jesmond or Whitley Bay if its airbnb. Not sure if anyone on earth has ever been to Hartlepool on their holidays.

thanks Tdog, re. Hartlepool... didn't they hang a French spy there 200 years back, but it turned out to be a monkey? Or is that just an urban myth? 

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Chewing Grass
1 minute ago, JMD said:

thanks Tdog, re. Hartlepool... didn't they hang a French spy there 200 years back, but it turned out to be a monkey? Or is that just an urban myth? 

Been done to death, that one on here, just search for monkey hangers and enjoy.

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13 hours ago, Sugarlips said:

This list of countries to invest in for green energy is from Bloomberg, quite insightful from an economic standpoint

 

02632207-1454-45DD-B9A0-F6FB71647831.png

Sugarlips, interesting table, but what conclusions do you draw?  i.e. i'm not sure how to read it as wind/solar is heavily subsidised.

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25 minutes ago, JMD said:

Barnsey, thanks i'll take a look, do you know if it has good demand for potential holiday letting? 

I'd imagine so being a reasonably picturesque historic market town on the East Coast mainline, have stopped off a few times now, really like the place. Suffered badly from flooding but I believe that's been largely sorted out with millions of £££ going into flood defence.

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41 minutes ago, DurhamBorn said:

https://www.bbc.co.uk/news/business-49971853

Why invest when tax credits pay the wages.?

Zombie economy and end of dis-inflation.No point investing,no money to be made,low inflation means low velocity.Trillions parked in almost zero paying bonds etc because its easy and safe.Until it isnt.

Classic signs of the end of dis-inflation.The amounts out there that could start to chase after inflation after it arrives are eye popping.

DB, is the UK's relative low productivity just a function of low investment in automation and technology or is there more behind it? Just that it seems we get these type of reports regularly, and I can recall them since the early 1990's. Moreover we are usually placed behind France which surprises me because I had always considered the French workforce as very resistant to change. 

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42 minutes ago, DurhamBorn said:

https://www.bbc.co.uk/news/business-49971853

Why invest when tax credits pay the wages.?

Zombie economy and end of dis-inflation.No point investing,no money to be made,low inflation means low velocity.Trillions parked in almost zero paying bonds etc because its easy and safe.Until it isnt.

Classic signs of the end of dis-inflation.The amounts out there that could start to chase after inflation after it arrives are eye popping.

.......

"This sustained period of declining labour productivity represents a continuation of the UK's 'productivity puzzle'."

I've attended a few presentations from the various economic institutes who have mentioned this "puzzle".  There is no puzzle, just an unwillingness to join up the dots which to me shows where they are coming from.

The answer lies in the elephants in the room like benefits, a low wage economy, income and wealth inequality, and now you can add a social dimension with dissatisfaction with politics, the political economy, etc.

It is caused by a multi faceted substitution effect and you know it, or ought to.

 

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1 hour ago, JMD said:

DB, is the UK's relative low productivity just a function of low investment in automation and technology or is there more behind it? Just that it seems we get these type of reports regularly, and I can recall them since the early 1990's. Moreover we are usually placed behind France which surprises me because I had always considered the French workforce as very resistant to change. 

But although French workforce are resistant to change (especially increasing hours), when they are at work they are more productive, and studies have shown the `sweet spot` is about 35, which is the average French working week...it makes me laugh, my bosses think they are getting more by insisting their salaried employees do excessively long hours through an unhealthy work culture, but even I can see this is not the case, especially where quality is concerned.

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2 hours ago, JMD said:

Sugarlips, interesting table, but what conclusions do you draw?  i.e. i'm not sure how to read it as wind/solar is heavily subsidised.

No. Wind and solar are now cheaper than fossil fuels for countries with either an abundance of wind or sun. The last round of the U.K. government’s auction for offshore wind power came in at around £40 per MwH. 

https://www.current-news.co.uk/news/offshore-wind-smashes-price-records-in-third-cfd-auction-round

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2 hours ago, Harley said:

.......

"This sustained period of declining labour productivity represents a continuation of the UK's 'productivity puzzle'."

I've attended a few presentations from the various economic institutes who have mentioned this "puzzle".  There is no puzzle, just an unwillingness to join up the dots which to me shows where they are coming from.

The answer lies in the elephants in the room like benefits, a low wage economy, income and wealth inequality, and now you can add a social dimension with dissatisfaction with politics, the political economy, etc.

It is caused by a multi faceted substitution effect and you know it, or ought to.

 

Agreed. The only puzzle is why it is still a puzzle to anyone.

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45 minutes ago, Castlevania said:

No. Wind and solar are now cheaper than fossil fuels for countries with either an abundance of wind or sun. The last round of the U.K. government’s auction for offshore wind power came in at around £40 per MwH. 

https://www.current-news.co.uk/news/offshore-wind-smashes-price-records-in-third-cfd-auction-round

And there's no way this could be them doing an Amazon (Deliberately low prices until the competition is bust or has to charge excessively compared to an artificially low price?)

Genuine question, I haven't got a clue.

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10 minutes ago, Loki said:

And there's no way this could be them doing an Amazon (Deliberately low prices until the competition is bust or has to charge excessively compared to an artificially low price?)

Genuine question, I haven't got a clue.

Market is too big and too fractured i think, even with a cartel of wind energy producers the energy companies  still have nuclear/gas power stations going as base load.

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3 minutes ago, Majorpain said:

Market is too big and too fractured i think, even with a cartel of wind energy producers the energy companies  still have nuclear/gas power stations going as base load.

Thanks, I was just curious but might help someone make an investment decision 

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1 hour ago, Castlevania said:

No. Wind and solar are now cheaper than fossil fuels for countries with either an abundance of wind or sun. The last round of the U.K. government’s auction for offshore wind power came in at around £40 per MwH. 

https://www.current-news.co.uk/news/offshore-wind-smashes-price-records-in-third-cfd-auction-round

It is an odd one though.  Is it 'effectively subsidised' because it is an inconvenient form of energy?  It comes when it wants to, doesn't when you want it to, and you still require all of your original power generation infrastructure anyway, only they now can't make the return because the 'inconsiderate generators' flood the market with energy on a whim.  With the end result being that 'the fossil fuel approach' finds it relatively more difficult to make a return on investment, so you've got to pay them more than you would have done without the renewables...

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4 hours ago, Harley said:

.......

"This sustained period of declining labour productivity represents a continuation of the UK's 'productivity puzzle'."

I've attended a few presentations from the various economic institutes who have mentioned this "puzzle".  There is no puzzle, just an unwillingness to join up the dots which to me shows where they are coming from.

The answer lies in the elephants in the room like benefits, a low wage economy, income and wealth inequality, and now you can add a social dimension with dissatisfaction with politics, the political economy, etc.

It is caused by a multi faceted substitution effect and you know it, or ought to.

 

It sure is,even the fact people retiring early etc,running down what they have.Almost all risk and hard work is worthless now,so why bother?.Utter mess.

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10 minutes ago, DurhamBorn said:

It sure is,even the fact people retiring early etc,running down what they have.Almost all risk and hard work is worthless now,so why bother?.Utter mess.

I've never seen your thoughts on the societal side of things durhamborn. Understand if you prefer to stay private and stick to numbers.  But given your calls so far I'd love to know your thoughts.

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Just now, Loki said:

I've never seen your thoughts on the societal side of things durhamborn. Understand if you prefer to stay private and stick to numbers.  But given your calls so far I'd love to know your thoughts.

Well mostly that welfare spending is wrecking the country.So at the moment id be voting right of centre.Corbyn would be a disaster for the UK,one that would take 50 years to put right,if ever.Brown got us where we are now,Corbyn would finish the job.Its ironic,but tax credits caused Brexit,yet the left cant see it.

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