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

[ThoughtCriminal]

2 minutes ago, Sugarlips said:

I don’t understand, there is no need to throw rocks at your neighbours windows just cause they’ve got an Audi, it’s probably on PCP

He's probably smoking PCP to want an audi, they're overpriced shite these days. 

 

I'll shut up now in case anyone on here has bought one. 

[Sugarlips]

1 minute ago, ThoughtCriminal said:

He's probably smoking PCP to want an audi, they're overpriced shite these days. 

 

I'll shut up now in case anyone on here has bought one. 

I liked them in the 70’s but wouldn’t touch them now, I’ll keep the 10 yo Skoda that cost £5,000 when it only had 20000 miles on it, all modern VAG’s are a bit shit but at least mine is cheap shit 😁

[jamtomorrow]

Just now, Sugarlips said:

I liked them in the 70’s but wouldn’t touch them now, I’ll keep the 10 yo Skoda that cost £5,000 when it only had 20000 miles on it, all modern VAG’s are a bit shit but at least mine is cheap shit 😁

Amen to Skodas - daughter's 2003 Fabia cost £250, bodywork is in *miraculous* condition. 1.4 mpi, last remnants of the tractor technology before they went full VAG - absolutely love that thing

[Bricormortis]

Government’s official advisers at the Committee on Climate Change have recommended that 10 million hybrid heating systems should be installed by 2035.

https://www.msn.com/en-gb/money/other/british-gas-owner-calls-for-35m-fund-to-install-hybrid-gas-and-electric-heating/ar-AAKmAzY?ocid=msedgntp

[Harley]

1 hour ago, nirvana said:

@Harleyis getting it now, he took a bit of convincing 

TBF, it was more to do with the price!    I bought my first wallets back in 2019 or early 2020!  I then got busy elsewhere and the price had got too high by the time I got back to them.  It's been hard looking at the unopened packages on my shelf all this time! 

Plus trying to do due diligence and get it right when faced with a load of essentially dumb hypsters has been a PITA.  Was the same back in the day when PCs became a thing.  Fad versus facts.

I'm pleased I managed to hold off.  Hopefully the most profitable time I have spent doing nothing, as a holder, although I wish I had traded them over anything else I did trade.  I now have 1% in them and am debating how much I should hold.

There's being right and there's being right at the right time.  I have never seen a new chart take off like that that did not correct - IPOS, new ETFs, etc.  They all do it.  Traders only.  I find it reassuring.  If it follows the pattern, nothing substantial will happen for a while but that's OK.

IMO it's important at this time, where there are so many possible outcomes, to hedge as widely as possible.  Hedge everything in every way possible.  Important so I'll repeat it to myself - hedge everything in every way possible.

[Fully Detached]

39 minutes ago, Sugarlips said:

I liked them in the 70’s but wouldn’t touch them now, I’ll keep the 10 yo Skoda that cost £5,000 when it only had 20000 miles on it, all modern VAG’s are a bit shit but at least mine is cheap shit 😁

More often than not the people I see driving new Audis these days are young kids toward the bottom of the corporate ladder, buying on PCP and trying to look like they're doing a lot better than they are. And driving like pricks.

I sold my "nice" car a little while back, and I am bloody loving not having it. I am currently restoring a 21 year old MX5 to use as my runaround. If I can ever get the brakes unseized I'll be well away  

[Harley]

1 hour ago, nirvana said:

......I think I've seen the light

Good luck to you all 

IMO, you have (but not about posting!).  You can be an effing weird cant but IME they've proved to be the best to be around!   The best experience I've had in 10 years is opening up to a bunch of grunge type travellers.  Not that I'm Mr Stuffy by a long way but some did take a lot of faith (same reading your early posts!).  All well rewarded.  The main difference is you not just saw it but you did it.  The travel that is.  Crypto for me was, to borrow the phrase, just a haggle over price!  Maybe you were more flexible than me at the time or maybe I need that rocket of yours to get going.  TBF though I've done the best I could while staying here and I did it 10 years ago when I saw something like this happening.  But sadly, after all the work and sacrifice and given where I see things going, I don't see this will be enough for me.  But then there is no such thing as a steady state, except maybe death but who knows.  I will move once I know where best and certain things are sorted.  I may well just become a nomad if possible, that was the conclusion the last time I looked (pre cv!). Please, keep me focussed, keep me honest, and keep my mind open and alive! 

[jamtomorrow]

4 minutes ago, Harley said:

IMO it's important at this time, where there are so many possible outcomes, to hedge as widely as possible.  Hedge everything in every way possible.  Important so I'll repeat it to myself - hedge everything in every way possible.

Agree with this so strongly I thought I'd quote it.

And add: it's difficult walking the line between hedging the worst case (namely: the petrodollar system barely manages to make it into a second macro cycle before the system goes unstable) vs business as usual (namely: reflation proceeds per the thesis of this thread). Too much of one, and you expose yourself to the other.

What I know: system *stability* is very hard to keep tabs on - systems flip from stable to unstable in the blink of an eye, and even in retrospect it can be hard to see much in the way of warning signs (see: work of Lorentz, and bifurcation theory).

This is what worries me about today's macro picture: system stability is hard/impossible to measure, unlike outcomes - so guess which one gets all the policy attention?

If the system does flip out, there's no knowing where the hammer will fall - such is the nature of chaos. And this is why I too hedge for tail risks, as best I can.

[nirvana]

54 minutes ago, Sugarlips said:

all modern VAG’s are a bit shit

I think that's unfair, EA888 with 300bhp and DSG is a complete fookin weapon in the right lunatics hands 

[JMD]

11 hours ago, ThoughtCriminal said:

How's that for stealthflation? 

Lets not get too technically hung up about inflation woes... what you should really know is that Mars 'Fun Size' has got (13%) less fun... 'oh, the humanity... i can't talk ladies and gentlemen!!!'

 

 

 

[JMD]

3 hours ago, ThoughtCriminal said:

That and the fact that anyone who's looked beyond fuzzy feel good climate ideology and done basic calculations of what net zero involves for energy knows that the only way it works is if our living standards revert to the middle ages.

Maybe the ruling class really are that fucking stupid. 

Yes, both Stupid and Arrogant... for example these Cambridge students are meant to be among the best of the best (and incredibly smugly moral it seems, just watch their faces at 0:33), yet their minds are completely closed.

Worth watching as only 12 mins, but only if you don't have high blood pressure, as promise you'll end up shouting at the screen.

 

[Barnsey]

2 hours ago, jamtomorrow said:

Oh dear oh dear, if only somebody had seen this coming:

https://www.bbc.co.uk/news/business-57247757

Building projects hit by lack of supplies and price rises

But I do love the smell of 2-bagger in the morning:

Guy came to measure the kitchen to replace, says his mate quite high up in one of the smaller UK house builders, now having to pass costs onto home buyers, starting with +3%.

 

[Bear Hug]

20 minutes ago, JMD said:

Yes, both Stupid and Arrogant... for example these Cambridge students are meant to be among the best of the best (and incredibly smugly moral it seems, just watch their faces at 0:33), yet their minds are completely closed.

Worth watching as only 12 mins, but only if you don't have high blood pressure, as promise you'll end up shouting at the screen.

 

Interesting. Except that he believes in no energy shortages for the next 50 years thanks to shale (8:50 on). 

[JMD]

3 hours ago, jamtomorrow said:

So when I hear "living standards may fall", it just makes me wonder whether that's even a bad thing for the majority (let alone "everyone"). I know an awful lot of families like this pounding away on the hedonic treadmill, and none of them seem "happy" to me.

And they've only been able to get themselves into that state because the macro environment has incentivized over-production and created a consumption race. So yeah, living standards might fall, but living standards are in a bubble too so watchagunnado?

Yes i agree. Its not just the 'woke crowd' who suffer mentally in today's world, although that's all the MSM choose to focus on.

In fact, your comment reminded me of Jordan Peterson speaking couple years back quiet emotionally during interviews about the young men in his audiences, who'd approach him after his speaking tour lectures, often the men would break down, to tell him he'd given them 'meaning to their lives'.

I don't write the above because i'm a fan of Peterson (though i am one), instead i find it pretty alarming that Peterson's words had such powerful affects. It seems to me that those young men are prob. emotional/intellectual inhibited wrecks... Ok, Freud would say they just need a father figure!! - but my point is that such an emotionally and intellectually stunted generation are ripe for political manipulation, and I do fear for what follows after Biden/Harris... 

i.e. if US economy tanks, what might a Trump-part-deux look like? After all, the political stage/staging(?) must be set for another independent to 'grab the p....', ahem, 'snatch' (oops?!) the p-residency next time? I don't think Trump himself was a one-off event. Politicians just don't seem to be able to connect 'emotionally or intellectually' (yes, its a theme i tell you) with people any more... and Sir(!?) 'Keith' Starmer kinda proves my point i think.          

[JMD]

2 hours ago, Harley said:

IMO, you have (but not about posting!).  You can be an effing weird cant but IME they've proved to be the best to be around!   The best experience I've had in 10 years is opening up to a bunch of grunge type travellers.  Not that I'm Mr Stuffy by a long way but some did take a lot of faith (same reading your early posts!).  All well rewarded.  The main difference is you not just saw it but you did it.  The travel that is.  Crypto for me was, to borrow the phrase, just a haggle over price!  Maybe you were more flexible than me at the time or maybe I need that rocket of yours to get going.  TBF though I've done the best I could while staying here and I did it 10 years ago when I saw something like this happening.  But sadly, after all the work and sacrifice and given where I see things going, I don't see this will be enough for me.  But then there is no such thing as a steady state, except maybe death but who knows.  I will move once I know where best and certain things are sorted.  I may well just become a nomad if possible, that was the conclusion the last time I looked (pre cv!). Please, keep me focussed, keep me honest, and keep my mind open and alive! 

Interesting Harley what you say about perhaps one day moving on, because you seem very settled in your homestead. Tbh certainly makes me think. But anyway how about the Hebrides (its an island, just not a tropical one!)? Not as mad an idea as you might first think, after all the islanders hate the current Sturgeon/Scotland political mash-up, so seem a sensible bunch.

 

[JMD]

Lots and lots (72 pages!!, and worth i think taking a copy as might not be there for ever) of Gavekal charts, graphs and tables. Basically summary notes of their research and very generous of them i think.

Slide 1 (secureservercdn.net)

[Barnsey]

Commodities buying opportunity approaching if ROW can't offset China's credit impulse diving?

 

[JMD]

1 hour ago, Bear Hug said:

Interesting. Except that he believes in no energy shortages for the next 50 years thanks to shale (8:50 on). 

Yes, but no one's perfect. Plus i think it was back in 2017 so probably wouldn't still be illustrating his point regarding there being 'no such thing as peak oil' using the shale explosion today. 

[Harley]

The thing to be appreciated is that whatever the system, consumption/GDP driven or not, the majority are there to be farmed and always will be.  There is no social contract, just indenture

[Harley]

39 minutes ago, JMD said:

Yes, but no one's perfect. Plus i think it was back in 2017 so probably wouldn't still be illustrating his point regarding there being 'no such thing as peak oil' using the shale explosion today. 

I saw shale as a short adrenaline shot back then and I don't even pretend to be clever. 

[Harley]

48 minutes ago, Barnsey said:

Commodities buying opportunity approaching if ROW can't offset China's credit impulse diving?

 

There does appear to be some commodity/resource weakness brewing atm.  I hope so at last so I can top up.

[Harley]

1 hour ago, JMD said:

Interesting Harley what you say about perhaps one day moving on, because you seem very settled in your homestead. Tbh certainly makes me think. But anyway how about the Hebrides (its an island, just not a tropical one!)? Not as mad an idea as you might first think, after all the islanders hate the current Sturgeon/Scotland political mash-up, so seem a sensible bunch.

 

Yep, a wrench but pretty much sums up the extent of my fears.  Maybe I can sell mine as a turnkey operation to some townie and move to a mini version of those ex hedge funders' Carribbean gaffs, the ones with the beach at the bottom of the beautiful garden.  I'm getting old enough to sit it out in such a place.  Should have bought back in the day when on me travels.

 

 

[Barnsey]

16 minutes ago, Harley said:

Yep, a wrench but pretty much sums up the extent of my fears.  Maybe I can sell mine as a turnkey operation to some townie and move to a mini version of those ex hedge funders' Carribbean gaffs, the ones with the beach at the bottom of the beautiful garden.  I'm getting old enough to sit it out in such a place.  Should have bought back in the day when on me travels.

 

 

Seems to be more English up there than natives these days, supercharged by the working from home phenomenon. The new Cornwall/Pembrokeshire?

On property:

Thing is, friends of mine are being denied a mortgage for anything above 4x earnings so can't buy despite being able to afford monthly on a long fix, banks continuing to be very strict, this may feel like the lead up to GFC but lenders are well aware of those events in recent history and are significantly more sensible. Will higher rates be the way this market calms down?

[Harley]

8 minutes ago, Barnsey said:

Seems to be more English up there than natives these days, supercharged by the working from home phenomenon. The new Cornwall/Pembrokeshire?

On property:

Thing is, friends of mine are being denied a mortgage for anything above 4x earnings so can't buy despite being able to afford monthly on a long fix, banks continuing to be very strict, this may feel like the lead up to GFC but lenders are well aware of those events in recent history and are significantly more sensible. Will higher rates be the way this market calms down?

There may well be a solvency crisis.  People's and corporate balance sheets need cleaning out.  High rates, a new monetary regime, whatever, same bottom line.  The young have the advantage - a future in which to rebuild.

[Starsend]

15 hours ago, ThoughtCriminal said:

How's that for stealthflation? 

This proves what I already knew beyond doubt; nobody likes fucking jaffa cakes.