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

[TheCountOfNowhere]

15 minutes ago, DoINeedOne said:

Random 

A man smashed up a computer in the Trafford Centre as he was angry that the company's share price had dropped.

The customer, who had invested shares in the company, was frustrated that he had lost money, police said.

Posting on Twitter, officers said the man stormed into the shopping centre demanding to speak to a manager.

When he was told that wasn't possible, he damaged a computer at the customer service desk.

In a post on Twitter, put up at 12.40pm, GMP Stretford wrote: "Officers had to attend the Trafford Centre to reports of a male causing issues due him losing money after their share price dropped.

 

 

I'll raise you...

[Loki]

1 hour ago, leonardratso said:

RDSb divi just arrived, 12.68p/share

That's not a divi that's an insult  mine too. 

£8.50

Glad I bought RDSB at the bottom, but also that I've got far more in BP.

[A tremendous # on the lung]

On 20/06/2020 at 08:56, MrXxxx said:

Financial/economics newbie like me?...feel like DB el al appear to be speaking a different language?...take a look at this, one of the best articles I have read in a long time; she has a great way of explaining the complicated basics

https://www.lynalden.com/quantitative-easing-mmt-inflation/

I now understand what you guys are talking about....and it has also made me realize that QE is stealing from those who have been financially responsible to those (both companies and plebs) that haven't...

...oh, and how truly worthless FIAT is about to become!...a real `light bulb` moment.

Good article. I think this point always gets overlooked...

 

One reason that people mistakenly don’t think QE gets to Main Street, is because a lot of QE just goes to maintain existing government spending to Main Street. The government is spending more on the domestic economy (mainly on Medicare, Social Security, and the military) than they are extracting from the economy. So, it’s not like when QE occurs, everyone gets new checks; they just get to keep getting the Social Security, Medicare, military defense, and government services that they are already receiving, which is more than the tax they pay in as a nation. 

[DurhamBorn]

1 hour ago, leonardratso said:

RDSb divi just arrived, 12.68p/share

Got one of Mosaic today as well.Ok not large %,but never really expected to be getting divi's from them.Poor divi from Shell.The CEO needs to go if he doesnt crank it back up with the oil price.

Noticed BPs massive gas field in Oman is about to crank up.

https://www.bp.com/en/global/corporate/news-and-insights/press-releases/bp-starts-production-from-giant-khazzan-gas-field-in-oman-ahead-of-schedule-and-under-budget.html

Of course this ties in nicely with the above

https://www.maritime-executive.com/article/uk-secures-naval-base-in-oman

 

[Loki]

2 hours ago, DurhamBorn said:

The system has been pushed very very far yes and its disguising a lot of things,but the political cycle is meeting the macro.There is always a chance we dont get a reflation,but its a very small chance now.I think the question is only really the size,length and inflation.I tend to base off cycle inflation,and im using 76% over the cycle compounded.So from now until 2029/30

Just checked Twitter and Dave Hunter's tweet today is encouraging.  He even calls it an 'unloved rally', I know what that expression means now 

https://twitter.com/DaveHcontrarian/status/1275009938927112195

[janch]

New boss at Centrica making changes:

https://www.bbc.co.uk/news/business-53136804

New digital syatem and a jobs shake up:

Centrica's jobs shake-up was ordered by its new chief executive, Chris O'Shea. He said the company had more than 80 different employee contracts, "each with multiple variants, with many of the agreements dating back over 35 years", which, he said, needed to be modernised.

 

Good luck with that

[Loki]

1 minute ago, janch said:

Centrica

"The Macbeth share", if you don't mind 

[leonardratso]

are you saying centrica might be decentrica-lising its systems? or is that old hat now.

Bout fucking time it got a kick in the arse, its a proper piece of shit, like my little foray into ukog which was a terrible 'drunk in charge of a web browser moment'.

Still, never mind it will all come good in the end (maybe).

[jamtomorrow]

26 minutes ago, DurhamBorn said:

Page one of the thread.Consumers wont be driving this next cycle.Of course they will consume,but probably in different ways,and not as much credit driven.The cycle will be industrial,driven from governments mostly.The CBs are putting back all the dis-inflation into the system and a very large part of it is to government.The state stepped back from driving the economy in the late 70s and early 80s mainly because of inflation and the political cycle.Unions and workers were taking too much and investment was collapsing.Today they are at the opposite end of that cycle.The reason Cummings wasnt sacked for instance is because he delivered the northern Labour seats to the Tories.He 100% understands what needs doing.My prediction is places like Teesside will be booming later in the cycle.Spygirl might even move to Boro 

 

My fear is they'll build an arc furnace on Teeside that's so automated it requires only a smattering of staff to run it, and  prosperity never really leaves the factory gate.

My hope is we're a business cycle or two away from that kind of end game.

[Talking Monkey]

35 minutes ago, jamtomorrow said:

My fear is they'll build an arc furnace on Teeside that's so automated it requires only a smattering of staff to run it, and  prosperity never really leaves the factory gate.

My hope is we're a business cycle or two away from that kind of end game.

Good point that, there may be a flurry of activity and lots of jobs to get the industrial capacity up, but if it is highly automated there may not be many long term jobs to run that capacity

[Castlevania]

2 hours ago, DurhamBorn said:

Got one of Mosaic today as well.Ok not large %,but never really expected to be getting divi's from them.

K&S paid out a tiny dividend last week. Which surprised me because they paid it within a week of going ex dividend which is quick and they have a lot of debt. €0.04 but worked out at around 2.5p a share after withholding taxes.

[Castlevania]

2 hours ago, Loki said:

"The Macbeth share", if you don't mind 

Can you explain? You have blood on your hands? It’s sent you mad?

[Loki]

1 minute ago, Castlevania said:

Can you explain? You have blood on your hands? It’s sent you mad?

The share that cannot be named  like the Scottish play

[reformed nice guy]

1 hour ago, Talking Monkey said:

Good point that, there may be a flurry of activity and lots of jobs to get the industrial capacity up, but if it is highly automated there may not be many long term jobs to run that capacity

This is not necessarily a bad thing long term. Less jobs means less supportive arguments for immigration

[Popuplights]

5 hours ago, sancho panza said:

They're also looking at Sweden and realising the Marxists at Imperial have had them over.Imperial still havent released the code they used to predict 500,000 deaths in the UK if our govt didn't lock down. as far as Im aware.

I'll need to get in touch with our resident hospital informant and find out what the current thinking is,but I think a lot of Drs are beginning to question the govts method and hence we're getting the debate over 2m rule.Lock down opponents such as Swdeish Public Helath officals said some time back that getting out of a lock down was a lot easier than going into it.

I was chatting to and A&E consutlant and his GPwife at the park yesterday as our kids played together on the swings (well whats left of the play equipment) and he didn't seem too fussed.

Quick report from Winchester hospital. Daughter says there are ZERO Covid patients.

[Loki]

1 minute ago, Popuplights said:

Quick report from Winchester hospital. Daughter says there are ZERO Covid patients.

I can hear the doomers in the pandemic thread screaming already

 

[Cosmic]

3 hours ago, TheCountOfNowhere said:

I'll raise you...

While the subject of CRE is being bought up... @DurhamBorn You've previously mentioned Newriver, what would your thoughts be on them in a post covid world? I believe you favored them as they'd secured longer term debt at low rates and their centers were more B&M than Habitat (do they still exist?), which should do better than the high end fancy debt fuel'd more upmarket placees?

[Majorpain]

3 hours ago, Talking Monkey said:

Good point that, there may be a flurry of activity and lots of jobs to get the industrial capacity up, but if it is highly automated there may not be many long term jobs to run that capacity

You want to compete in the 21st century its got to be automated and/or maximum productivity.  UK trying to compete wage wise will get creamed.

There is a big advantage to starting from scratch, you get brand new modern facilities and no pesky long term pensions etc.  Its how Germany/Japan recovered from WW2 whilst UK was stuck with uncompetitive British Leyland and British Shipbuilders through the 1960-80's.

[sancho panza]

 

6 hours ago, Loki said:

Just checked Twitter and Dave Hunter's tweet today is encouraging.  He even calls it an 'unloved rally', I know what that expression means now 

https://twitter.com/DaveHcontrarian/status/1275009938927112195

Be interesting to see where the rally would be if you exclude the FAANGs

 

[sancho panza]

8 hours ago, jamtomorrow said:

Wondering the same. To extend the "pipes" analogy ... the system will only respond as quickly as the pipes can deliver the liquidity. So how big are the pipes these days?

Or to put it another way: to what extent is the "real economy" of pay packets, mortgage payments and food shopping sufficiently coupled to the financialised corporate economy of stocks, bonds, swap lines, ETFs, commodities, derivatives etc that we might expect liquidity to move between one and the other like it has done before?

The following is from the daily shot as well.Perhaps explains why the Govts will be looking to find other ways to grease the wheels of commerce.The recent sharp upturn in the UK savings rates woud put most govts interested in pursuing stimulus of finding other routes to market thn giving it to consumers.

Also worth noting that negative rates destroy bank margins,many banks are alreayd constrained by high leverage ratios  and have a poor history of delivering credit growth in such circumstances..If govts pursue them then that's possibly antoher reason why they'll channel the stimulus themselves.

 

[Loki]

15 minutes ago, sancho panza said:

 

Be interesting to see where the rally would be if you exclude the FAANGs

 

It will be even sweeter when that means Fresnillo Anglo-American New Gold

[JMD]

9 hours ago, sancho panza said:

They're also looking at Sweden and realising the Marxists at Imperial have had them over.Imperial still havent released the code they used to predict 500,000 deaths in the UK if our govt didn't lock down. as far as Im aware.

I thought the code had been released and was found to contain bugs (not thankfully no viruses!), one team that tested it found that the model gave different results when run on different computer platforms. I believe that the computer program was originally developed in the 90's and has been variously updated and patched-up since then. However my view is that the computer model was just a tool, and the real problems stemmed from the  deficiencies in the basic science... It seems the science of virology is far from 'settled', I wonder if we will be making the same critical judgements about the man-made global warming 'settled climate science' in 20 years time? 

[AWW]

The original code was given to Microsoft, who had a number of people try to refractor it into something that looked vaguely professional. That code was then released, still full of bugs. The model gave different results for the same inputs, which is a huge red flag. Rather than fix their thread sync issues, they would just run the model a number of times, take an average and wave away the issue as being due to the stochastic nature of the model.

Unfortunately for our economy, the average of wrong is still wrong.

[JMD]

3 hours ago, Majorpain said:

You want to compete in the 21st century its got to be automated and/or maximum productivity.  UK trying to compete wage wise will get creamed.

There is a big advantage to starting from scratch, you get brand new modern facilities and no pesky long term pensions etc.  Its how Germany/Japan recovered from WW2 whilst UK was stuck with uncompetitive British Leyland and British Shipbuilders through the 1960-80's.

I agree. Companies will be encouraged to invest big in the UK, in return for allowing them to make large profits from automation. I think the political/commercial compromise will be that company profits and more importantly the taxes must remain in the country.                                                                                                                                                                      As you state, modernisation/automation is not all bad, you mention Germany and Japan, which did this admittedly from the ground up, post war. But I would also add the mooted 'Singapore on Thames' idea of our own Boris Johnson... looks like he might still get his 'Boris island' idea in some shape or form, one way or the other, but maybe on a far grander scale than originally conceived!

[sancho panza]

17 minutes ago, AWW said:

The original code was given to Microsoft, who had a number of people try to refractor it into something that looked vaguely professional. That code was then released, still full of bugs. The model gave different results for the same inputs, which is a huge red flag. Rather than fix their thread sync issues, they would just run the model a number of times, take an average and wave away the issue as being due to the stochastic nature of the model.

Unfortunately for our economy, the average of wrong is still wrong.

AWW you might understand some of the nuances in this Lockdown sceptcis review.They state the story as you do,about microsoft tarting it up,but I they say say only certain bits of the code have been released or has it all been released now?

https://lockdownsceptics.org/code-review-of-fergusons-model/

 

In your opinion,how bad was the Imerial model?Have you looekd at it much?Sue Denim states there were several things that would have given professionals in teh industry warnings.Would you agree with that?Have you any idea why the govt advisors didn't tell Bozza?