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


spunko

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19 minutes ago, Transistor Man said:

Coal is already finished in the UK. Now only a few percent of the electricity generation mix -- down from 40% 10 years ago.  

How Britain ended its coal addiction

The shift in the UK is an important victory for environmentalists in their fight against fossil fuels

https://www.ft.com/content/a05d1dd4-dddd-11e9-9743-db5a370481bc

What a fantastic example of a forward thinking, considerate European coutnry the UK is.

Able to rise above base political insticts to make a stand, for the good Europe.

1b0bc932-e382-11e9-9743-db5a370481bc?fit

4c0086ea-e431-11e9-9743-db5a370481bc?fit

 

I wonder if Eruope has a punishment for the dirty scummer country that is burning brown lignite after shuttign downs its Nukes.

Thats about the anti-European thing I can think of.

 

 

 

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Transistor Man
20 minutes ago, spygirl said:

 

1b0bc932-e382-11e9-9743-db5a370481bc?fit

 

 

 

The nuclear contribution should be far higher. 

The AGR was too complex, and too expensive. A flawed fleet. 

But, just at the end, they got it right. Sizewell B.

Proven US PWR design, UK consortium built -- within budget, and just 84 months to full load. 

Performance has been excellent. 

Was supposed to be the first of 4 reactors of the same type. Damn shame the others never got built.   

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2 hours ago, sancho panza said:
Contrarian, portfolio strategy, gold & precious metals, dividend investing

Thanks SP for another great resource.....and for introducing me to my type of gal: "Contrarian, portfolio strategy, gold and precious metals, dividend investing".  What's not to like!!!!!

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1 hour ago, Transistor Man said:

 

The nuclear contribution should be far higher. 

The AGR was too complex, and too expensive. A flawed fleet. 

But, just at the end, they got it right. Sizewell B.

Proven US PWR design, UK consortium built -- within budget, and just 84 months to full load. 

Performance has been excellent. 

Was supposed to be the first of 4 reactors of the same type. Damn shame the others never got built.   

(Labour conference 2022)

The UK has no more coal fired power stations.

UK energy sector is world leading in its low carbon utilisation.

Would he union leaders on stage and delegates please stand as we applaud Mrs Thatchers foresight ....

 

 

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22 hours 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

Thanks Castlemania, I admit more progress has been made than I realised and generation is cheaper than I thought, but in terms of total cost wind/solar still doesn't include linking up to the grid which the consumer pays for. And the supply isn't available 100% of time so more investment in battery or other backup/alternative is needed. These are the subsidies I was referring to.

For those of us who hold Centrica/Infrastrata, etc, I guess gas with carbon-capture tech will be needed to fill the 'energy generation gap' over the next 10 years?       

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14 hours ago, Harley said:

A classic example of the "political economy" which has been a growing feature in the UK over the decades and why my formal economic training is now largely a waste. 

This is not a political rant but a proffered example of the breadth of the subject one now needs to comprehend when undertaking this investment malarkey.  A question of dispassionately understanding how things work to better play the game.  Or choose a purely political lens and miss, or deliberately obscure, the point.

Alleged low UK productivity compared to France and others may be due in part to worker's attitudes but the impact of that falls into insignificance compared to business investment. 

The UK has a policy of a low wage economy, something pushed by business, and implemented through lax immigration, zero hours contracts, taxpayer subsidisation via benefits, citizen subsidisation via strained social infrastructure, and so on. 

If a company wants more output it just hires more people and sacks them when not needed. No need to increase costs, inflexibility, and risk by investing in plant, machinery, software, training, etc.  Sure, there is a de minimis amount of such investment but the realised potential to substitute that for people is significant. The car wash effect - "employ" cheap (in this case immigrant) labour to wash cars than invest in car wash machines given the marginal cost of labour.

Low productivity is not a "puzzle" but a consequence of policy and beating up workers for it is, to put it politely, disingenuous.  And the unions, with their support for open borders, are part of the stitch up, along with said government and business. 

An expanding rentier system increasingly on steroids.  The people are, as in so many other areas, being mugged by quite a cabal of self and short sighted servers who, faced with the challenge, and for right or wrong, chose the unimaginative lowest possible denominator. 

There is a social and individual psychological impact of such a choice given the human ability (need?) for knowledge, stimulation and challenge.  Remove that and there are consequences.  Maybe a better avenue of study than traditional, now very naive, economic theories.

Dispiriting but true Harley. Part of my original question mentioned the British/French comparison because it always make me snigger to my self when I hear it made. For me its the lack of investment and training. As you say no real puzzle. When I first saw one of those hand-car-washes my heart sank, and that's before I understood the deeper implications re. crime, wage stagnation, societal dislocation. So much going on her and as you say this isn't about politics, personally i'm with others who maintain its social degeneration (but the fish rots from the head down and one look at the 'calibre' of our politicians says it all).  

And yes its not just the corporates at fault here, one of those other areas is state education where the results in terms of the international education league tables speaks for itself. Of course being poorly educated, after 12-years full time education, is a damning indictment in itself - but being mis-educated is another thing entirely... but this is not the place for elaborating on those topics.   

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4 hours ago, Sugarlips said:

I’m going to let the experts answer this, long but very informative, coal is going to be finished sooner than anyone realises:

https://www.macrobusiness.com.au/2019/10/coal-finished-as-renewable-costs-crash/

thanks Sugarlips, very interesting i'm half way through reading this.

 

DB does this information - regarding the speed of alternative energy sector reducing its costs - alter your opinions any?  I'm thinking in terms of your predictions for gas being the 2nd best performing commodity in next cycle?

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14 minutes ago, JMD said:

thanks Sugarlips, very interesting i'm half way through reading this.

 

DB does this information - regarding the speed of alternative energy sector reducing its costs - alter your opinions any?  I'm thinking in terms of your predictions for gas being the 2nd best performing commodity in next cycle?

Probably ties in with gas turbines being the most responsive to load variations compared to coal. Nuclear is run flat out all the time anyway

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2 hours ago, JMD said:

thanks Sugarlips, very interesting i'm half way through reading this.

 

DB does this information - regarding the speed of alternative energy sector reducing its costs - alter your opinions any?  I'm thinking in terms of your predictions for gas being the 2nd best performing commodity in next cycle?

No,India will drive oil prices 1000 times more than the UK for instance.Gas will remain the base load for power.

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6 hours ago, spygirl said:

How Britain ended its coal addiction

The shift in the UK is an important victory for environmentalists in their fight against fossil fuels

https://www.ft.com/content/a05d1dd4-dddd-11e9-9743-db5a370481bc

What a fantastic example of a forward thinking, considerate European coutnry the UK is.

Able to rise above base political insticts to make a stand, for the good Europe.

1b0bc932-e382-11e9-9743-db5a370481bc?fit

4c0086ea-e431-11e9-9743-db5a370481bc?fit

 

I wonder if Eruope has a punishment for the dirty scummer country that is burning brown lignite after shuttign downs its Nukes.

Thats about the anti-European thing I can think of.

 

 

 

Look at that coal output chart.

Falls 90-97.

Levels til 2010, then falls.

Vote Conservative, vote Green!

Labour have sone explaining.

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5 hours ago, JMD said:

Thanks Castlemania, I admit more progress has been made than I realised and generation is cheaper than I thought, but in terms of total cost wind/solar still doesn't include linking up to the grid which the consumer pays for. And the supply isn't available 100% of time so more investment in battery or other backup/alternative is needed. These are the subsidies I was referring to.

For those of us who hold Centrica/Infrastrata, etc, I guess gas with carbon-capture tech will be needed to fill the 'energy generation gap' over the next 10 years?       

15% of the market will be fast response gas /hydro pumped storage/biomass maybe.That 15% will make very nice profits.It will be 50 years before we can give up that 15%.

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1 hour ago, DurhamBorn said:

15% of the market will be fast response gas /hydro pumped storage/biomass maybe.That 15% will make very nice profits.It will be 50 years before we can give up that 15%.

I've said this before on here but I have a large amount of Siemens shares, by far my largest holding as I get 1 free for every 3 I buy..

Siemens are massively in to renewables.

Turbine manufacturing wind/water.

They own Lighting division OSRAM

They own HVAC division

They own building automation division and have a building called the crystal opposite the o2

Hospital scanners, 3D full body

Train manufacturing

Are these not good shares to hold considering the sectors you champion as inflationary?

 

 

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5 hours ago, DurhamBorn said:

No, India will drive oil prices 1000 times more than the UK for instance. 

So to get exposure to India/Chinese energy consumption are the uk/us/french big oil conglomerates such as shell/exxon/total, or others, the ones to own. Or perhaps even Gazprom/Lukoil given Russia is China's biggest provider of oil.

Or are there Indian/Chinese explorers/producers that would be good to have? For example there is Chinese PTR, CEO listed on the NYSE. And Indian RIGD listed on LSE.     

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8 hours ago, macca said:

I've said this before on here but I have a large amount of Siemens shares, by far my largest holding as I get 1 free for every 3 I buy..

Siemens are massively in to renewables.

Turbine manufacturing wind/water.

They own Lighting division OSRAM

They own HVAC division

They own building automation division and have a building called the crystal opposite the o2

Hospital scanners, 3D full body

Train manufacturing

Are these not good shares to hold considering the sectors you champion as inflationary?

 

 

Yes, a quality company,its just at 80 billion probably wont deliver the uplift others will.Id be happy to buy it though below around 80 euros.

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10 hours ago, JMD said:

So to get exposure to India/Chinese energy consumption are the uk/us/french big oil conglomerates such as shell/exxon/total, or others, the ones to own. Or perhaps even Gazprom/Lukoil given Russia is China's biggest provider of oil.

Or are there Indian/Chinese explorers/producers that would be good to have? For example there is Chinese PTR, CEO listed on the NYSE. And Indian RIGD listed on LSE.     

Our resident geologist @Cattle Prod has warned against the Chinese producers. We've been buying the bigger Western Oilies eg XOM/TOT/EQNR/ENI/RDSB etc that are looking cheapish.Co.s liek CVX look high in their charts.Lukoil too imho.

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^

Fed is way behind the curve and should be printing now,they are still far too tight.The market will wake up to that when the big capital goods manufacturing companies announce results going forward,they will all guide lower with their earnings.Then they will miss those lower targets probably by a long way.

US is close to recession,nobody sees it,but my road map is flashing recession across almost every metric.Some are showing quicker falls than the financial crisis.I have a feeling insurance companies etc are likely candidates for trouble.

There isnt enough liquidity in the dollar system.

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Popped into town to buy a 2020 desk diary this morning. WH Smith/Paperchase = approx £7. Card Factory = £2. Guess which one I bought?

...and guess which shop will potentially survive in the long run?

It's so end of cycle out there it almost hurts to witness it.

 

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10 minutes ago, Sasquatch said:

Popped into town to buy a 2020 desk diary this morning. WH Smith/Paperchase = approx £7. Card Factory = £2. Guess which one I bought?

...and guess which shop will potentially survive in the long run?

It's so end of cycle out there it almost hurts to witness it.

 

I quite like cheap diaries.  I'm reminded of Colin Chapman on racing cars -- he said something like the perfect racing car  should be designed to go the distance and then fall apart just after crossing the finish line.  Same with diaries -- I'd think I've got good value if halfway through December the binding starts falling apart.  I certainly don't want to pay extra for one that'll still be in good shape after 24 months.

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5 hours ago, sancho panza said:

Our resident geologist @Cattle Prod has warned against the Chinese producers. We've been buying the bigger Western Oilies eg XOM/TOT/EQNR/ENI/RDSB etc that are looking cheapish.Co.s liek CVX look high in their charts.Lukoil too imho.

thankyou SP, I didn't see Cattleprod's warning about Chinese oil/gas. Not sure if it was for technical reasons, but assume because of fears of government interference/malfeasance/or worse?

Do you have thoughts on the Indian Reliance Industries (rigd)? Its also expensive at moment but the idea was to get some domestic exposure to Asian big energy co's, I just wanted to put them on my watchlist for now in case market turns down.

...but not much luck as it looks even Petronas Gas isn't even available here to buy? 

   

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3 hours ago, dgul said:

I quite like cheap diaries.  I'm reminded of Colin Chapman on racing cars -- he said something like the perfect racing car  should be designed to go the distance and then fall apart just after crossing the finish line.  Same with diaries -- I'd think I've got good value if halfway through December the binding starts falling apart.  I certainly don't want to pay extra for one that'll still be in good shape after 24 months.

 

3 hours ago, Sasquatch said:

Popped into town to buy a 2020 desk diary this morning. WH Smith/Paperchase = approx £7. Card Factory = £2. Guess which one I bought?

...and guess which shop will potentially survive in the long run?

It's so end of cycle out there it almost hurts to witness it.

 

I suppose you could be 'kinda generous' and say someone had to design, print and bind that diary.... but I did nearly pass out when I saw the price of their Post-IT pads - £5 per pad!

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3 hours ago, Sasquatch said:

Popped into town to buy a 2020 desk diary this morning. WH Smith/Paperchase = approx £7. Card Factory = £2. Guess which one I bought?

...and guess which shop will potentially survive in the long run?

It's so end of cycle out there it almost hurts to witness it.

 

Exactly.Card Factory is a fantastic business.The one near me always has people in,steady stream.Their new range priced at the higher end at £1.69 etc is way superior to anywhere else for twice the price.Everyone goes there for balloons etc as well for kids birthdays.They are about to upgrade their website to multi channel,so im guessing they are about to launch click and collect.I would expect that will do very well once people know about it for occasions buying /kids birthday/hen night/key birthdays etc.Market has kicked them down due to profits flat lining even though they are expanding shops,but id say holding steady in a brutal market is a good performance.They have signed a deal to supply half of Aldi's stores now (400+) after a trial in 100.They need to keep the debt down though as its a bit too high for a low asset business,but free cash should remain robust.Key danger to them is probably the other discounters increasing their ranges,but its unlikely anyone will get close to them in price/quality/range.I would expect theor EPOS data is giving them a lot of info now as well.Increases in NMW will hit them though,they might have to increase prices at somepoint,though id expect they could move things up 10% without much trouble.

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45 minutes ago, JMD said:

thankyou SP, I didn't see Cattleprod's warning about Chinese oil/gas. Not sure if it was for technical reasons, but assume because of fears of government interference/malfeasance/or worse?

Do you have thoughts on the Indian Reliance Industries (rigd)? Its also expensive at moment but the idea was to get some domestic exposure to Asian big energy co's, I just wanted to put them on my watchlist for now in case market turns down.

...but not much luck as it looks even Petronas Gas isn't even available here to buy? 

   

No, it was more to do with reserves,the way they're run etc.Key take home for me as a speculator was to leave well alone.I defer to posters with a deep insider understanding of an industry,especially when they've a history of posting constructive,informative stuff.There are better,less risky ways to play the oil/gas market eg have a look at a few of the better shares listed in the XOP/FCG ETFs for mid size producers+nat gas.mainly US listed.Some down 90% off peak and nowhere near insolvent.

Big problem with emerging market shares is the forex risk.At the mo,I'm buying $ shares at with cable at 1.22.Knowing 1.40 is highly likely.But I see more upside in the stocks than I do downside in cable.I could be wrong there.

I'm happy to take forex risk in AUD/CAD/USD/EUR.

 

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