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

[Barnsey]

https://www.theguardian.com/business/2021/may/31/uk-growth-upgraded-but-oecd-warns-of-deepest-economic-scar-in-g7-brexit-covid-19

Key part:

The OECD examined how much potential output has been lost because of the coronavirus crisis, by comparing the latest projections for national income levels in 2025 with pre-pandemic forecasts.

It found that Japan, Canada and the US will only suffer limited scarring, with the US economy expected to be larger than previously forecast in four years’ time because of massive government stimulus.

Where the U.S. leads, the ROW follows...

[Lightscribe]

8 hours ago, Cattle Prod said:

Ok, I'll bite. You're mate sounds like he's talking through his hole. Now plastics in the ocean is something I'm passionate about, I can't stand it. There is no logical reason for it to have got so bad in the last ten years, but an awful lot of it seems to come fron the Yangtse and Ganges rivers. Rivers of plastic, just disgusting. Some of it is our plastic shipped ovrr there in containersand dumped, remember that when you put your blue bin out. It should be incinerated and used for energy.

But polytunneling the ocean? Get a globe and look at all the blue. Floating pastic pollution is a tiny faction of 1% of it. And even if it was a large %, water itself acts a lens, absorbing heat. A plastic bottle isn't going be a floating magnifying glass. But it's plenty to destroy marine life 🤨

What's warming our oceans? 1. The Sun. 2. Anthropogenic activity causing atmospheric global warming which the sea absorbs.

Is this a problem? Maybe. But the oceans are basicslly a giant radiator keeping the engine from blowing up, or freezing. Oceans have been a lot warmer in the past - the white cliffs of Dover were basically the Bahamas at the time, and sea levels were a lot higher. No plastic around, plenty of greenhouse gases mind you. On the flip side, the Brits first walked here from France and had camp fires out on the Dogger Bank while waiting for the last glaciations ice to melt (still happening). The vast, deep oceans regulate all this.

So I would love China and India clean up their acts, and they will once their people demand it, like we did. But you can tell your mate he's talking shite.

The netflix seaspiracy is well worth a watch.

It exposes the sea/ocean pollution charity organisations (and they themselves being interviewed admit) that micro plastics as well as the certifications like ‘dolphin friendly’ tuna as all complete bollocks.

The majority of plastics in the ocean mainly accounts of vast broken nets and fishing equipment. But what does the real damage however is the commercial behemoth corporation fishing dredging ships. They take out vast swathes of a particular target fish in one go in an area (as well as plenty of others and plant life).

By taking out and overfishing one link in the food chain both the predators above and all the way down to the coral and plant life that rely on that chain suffers. This in turn effects the carbon absorption/process ability by the sea, which is a far greater problem than any plastic in the ocean.

But there’s far too much money involved for it to be addressed by the governments, so they’d rather the do-gooders focus handing over their money to charities peddling a micro plastic narrative for profit instead.

[nirvana]

8 hours ago, Cattle Prod said:

But sources like yours still insist on cherry picking

but I wasn't cherry picking, NOAA is part of the Yankee government...so the US goverment observed 'warmer than average temps across the globe in April' but YOU choose to ignore that, fine 

anyway it probs doesn't matter does it cos it looks to me like the planet is being destroyed anyway with deforestation, making animals extinct and too many fat arseholes saying, go on then just print more money and eat more fat bastard pies 

unless we get a massive radiation blast from a Solar Micronova...

And I don't see why you're all concentrating on co2 levels...if we're warming up, we're warming up regardless of co2 levels 

Last edit lol, did anyone see the 'sea snot' in the mediterranean last week? i guess that doesn't matter either seeing as the north sea is so cold at the mo lol

 

[nirvana]

actually I lied I'm back again....sea snot caused by fucking fertilisers!! AND this is NOW! not like last years feckin record low temperatures, wake the fuck up!

The ongoing sea snot invasion is particularly extensive for three reasons:

1. Scientists say rising water temperatures due to global warming have contributed to the increased frequency of these sea snot events, reports The Washington Post. With a mild winter this year, the Sea of Marmara has remained a few degrees warmer than average.
2. Phytoplankton thrives in waters rich in nutrients of nitrogen and phosphorous. The Sea of Marmara has high levels of both due to pollution from raw sewage dumping and agricultural runoff, reports Forbes.
3. Overfishing in the Sea of Marmara has reduced the number of filter feeders, fish that eat phytoplankton and keep populations under control, says The Guardian.

[sleepwello'nights]

On 28/05/2021 at 10:11, Cattle Prod said:

Fully agree, all I see is an Aspie child fed horseshit by her attention seeking parents. I'm sure she'll truly hate them whenever she grows up. That said, the Aussie news man was spot on!

He missed the main target which was the parents spoiling their children. They wouldn't go to school in a caravan of cars if their parents didn't take them, they wouldn't spend all day on an electronic device if their parents didn't buy it for them, etc.. 

Anyway back to topic, will the children revert to a less energy intensive way of life?

[sancho panza]

On 28/05/2021 at 13:29, DurhamBorn said:

The question is why,because this is where the Fed could make a massive policy mistake.If the banks are cashing in cash for treasuries,it is because they cant lend the money,or see a return in anything.HOWEVER,its not as simple as the MSM will say,oh too much cash.It could be entities wanting the cash dont have the collateral to get their hands on it.So it could be the economy needs the liquidity,BUT there arent enough solvent players to lend it too.The MSM can see this as too much liquidity,but it could be too much for the amount of solvent debtors.

This means the Fed needs to be very careful here.The market is saying we cant lend the cash,thats certain,so its cant lend to solvent not cant lend at all.This doesnt mean the economy doesnt need it,you could argue it shows the economy needs even more.Its also saying the route to market at this stage is fiscal through government.If the banks are using cash for treasuries,then the government needs to keep issuing them and spending into the economy.

Id expect the Fed to try to force people out of the short end here and push them along the curve,but they will do this by lowering the short end right down and lower the longer end much less.They need to signal that the curve says steady growth,that will encourage solvent entities to invest.

I also think they need the consumer to start taking on loans here,there might be some loan guarantees incoming from government soon,both on consumer loans for certain buys,and also for investment for companies.

The irony is the macro here says the banks are going to be big winners as the Fed tries to keep this liquidity in the system.I wont buy myself because of the risk of  BK,but outside of that the big US banks are likely to see earnings explode higher.

Cheers for thsi DB. This addresses one aspect I often forget which is the credit worthiness of borrowers.We all have our weaknesses and I tend to focus on credit demand without remembering that that's only one side of the loan.
This becomes particualry relevant in a post covid world where people are getting laid off post furlough and companies are looking at battered balance sheets particualrly in the hospitality. sector

[UnconventionalWisdom]

On 29/05/2021 at 16:29, Clueless Imbecile said:

Got a huge dilemma....

I've got 3 problems:

1) Tired of worrying about being left behind by rising house prices, and seeing apparently endless government support driving them up faster than my salary. (Or flip that around: I'm tired of working for a very slowly rising amount of a raplidly devaluing currency; it's the same difference!). Waiting for a HPC seems to be a losing strategy in England. I don't fancy emigrating.

2) Tired of worrying about passive vs active investment, big kahuna bust & bear market, bail-ins, financial repression, woke mob trying to destroy oil companies, counter-party risk, etc, etc.

3) Tired of struggling in my career. Got made redundant from a long term job 4 years ago. Had 3 new jobs since then and found all of them quite stressful. Ended up leaving the first 2 because I was taking too long to complete tasks (not lazy, just really struggled). Been in current job about 9 months. Work seemed extremely difficult for first 6 or 7 months, since then very difficult. Had hoped it would have got easier by now. Done a lot of studying over past 12 months to improve my skills, but that only helps so much. Not sure how much longer I can tollerate the pressure before suffering burnout (maybe a few more weeks or months).

 

I'm worried that if I go off sick with stress (private sector, no sick pay) or get sacked for slow performance, I would then end up burning through savings on basic living costs. Having savings has prevented me from getting any benefits in the past when I've been out of work. Feel like a mug when I read about people who don't work/didn't save getting loads of benefit money from the state. I doubt they suffer the stress that I've suffered over the past few years.

I'm thinking maybe I should buy a house and then it solves problems 1) & 2). Also, if I had a house and no savings, I might be eligible for benefits if I end up out of work (for whatever reason, except maybe quitting voluntarily).

Does anyone know if a single, childless, home-owning man (with little or no savings) would get benefits if out of work?

I'm approaching 50 so not young but still a long way from retirement. I could hold on and keep working for another year or two maybe, but probably not another fifteen years, unless it was in a much easier job.

Currently living cheaply with elderly parents. At current rate of outgoings I could last a long time on my savings (several years at least), but it's taken over 20 years to accumulate them and would be a shame to lose them all on basic living costs, particularly whilst I hear that people who never bothered to save get loads of benefits from the state.

My job is very good technical experience (an opportunity I've waited many years for), the salary is pretty good (40K ish) and the people I work with are great. However, I'm finding the work very tough, and every day is a struggle. Beginning to wonder how much longer I can tollerate the pressure before suffering burnout.

Cheers,
Clueless Imbecile

Disclaimer: I am not an expert. Anything I post here is just my opinions, which may not be factually correct. My posts are intended purely for the purpose of debate and are not to be taken as advice. If you act on any of the above then you do so entirely at your own risk. I do not accept any liability.

This is the sad state of affairs in the UK. I am also worried but am 15 years younger than you so am still hoping for a HPC to levels i'd feel comfortable buying.

My backup plan if it continues is to buy a narrowboat and live on that- maybe have a look. 

A lot of people think they aren't good enough for their job.

https://www.techrepublic.com/article/why-58-of-tech-employees-suffer-from-imposter-syndrome/

But for you it seems you are stressed by it, not sure what to suggest. It will get easier with time and we say that new employees aren't productive until 6 months. 

Good luck!

[UnconventionalWisdom]

On 30/05/2021 at 10:32, DurhamBorn said:

food is dirt cheap

I did site visits in the north-east, portion size is also much much bigger!

[sleepwello'nights]

On 29/05/2021 at 16:29, Clueless Imbecile said:

 

Currently living cheaply with elderly parents. At current rate of outgoings I could last a long time on my savings (several years at least), but it's taken over 20 years to accumulate them and would be a shame to lose them all on basic living costs, particularly whilst I hear that people who never bothered to save get loads of benefits from the state.

 

On a purely mercenary basis it depends whether you have brothers and sisters. If you are an only child and your parents will leave their house to you then you don't really have to worry about having a house to live in. Obviously some caveats. You will have to look after them if they become unable to look after themselves to prevent the house being sold to provide care for the surviving parent. 

If you have siblings then you have to factor in their interests. If you have enough money to buy their house then why not. They will get a lump of cash now which may suit their plans. It might involve selling their existing house and buying another to circumvent tax legislation. https://www.taxationweb.co.uk/tax-articles/inheritance-tax-iht-trusts-estates-capital-taxes/gifts-with-reservation-the-rules-explained.html

As always the snags are the emotional factors that make it difficult to use the most financially worthwhile objectives

[sancho panza]

On 28/05/2021 at 18:31, PrincessDrac said:

Fingers crossed. I'm watching the miners.

Oddly recently. First HOC fell out of love. Castillo winning office apparently. Next up FRES falling out of love. Leaving the main MSCI UK index. Then yesterday CEY. Some analyst re pricing CEY at 82p the same day a positive RNS was released.

So we have all three on their asses prior to Basell 3.

Coincidence or manipulation.

Next week it'll be POLY turn. Putin turns on miners and watch it fall.

Still great prices to average in.

Fres still sub 9. That'll be 13 by August.

CEY under 110p. Not a bad entry price.

For me FRES will stretch it's legs, big potential there.

I've been eyeing some options trades off Fres,looks to be reasonable value play here.

One of the more expert opinions on mining companies(amongst the hive mind anyway) eplained that there were issues with CEY sometime back and it was riskier than most iirc it centred on it being a one horse miner or something like that.I'm a spray n prayer so know little.I think it was eitehr @Majorpain@kibucor @DurhamBorn

On 29/05/2021 at 09:41, DurhamBorn said:

The sector hasnt performed well since the crash mainly due to woke sentiment.I wish id bought more potash for instance instead of big oil,trebles and more there ,25% on BP,though Repsol is 60%.DRAX and Royal Mail treble and more and many many more examples.The two sectors i think where the undervaluation is structural,energy and telcos have actually been poor performers relative since the crash,though some shine through like BT up 65%.

Things will go where they are going in their own time,and one good thing is that some of the huge gains has meant you can rotate into other areas.We are always learning arent we and one certain part of this game is we will never get everything right.

One of the ibggest mistakes of teh last year was to focus too much on oilies and neglect the potash miners.Even had some calls that we could have excercised on mosaic and nutrien that we just sold on.

I leanred from it though.

On 29/05/2021 at 12:25, Democorruptcy said:

In theory you can opt out online here https://www.nhs.uk/your-nhs-data-matters/manage-your-choice/ however there are caveats attached on the previous pages

cheers DM,done.

[DurhamBorn]

24 minutes ago, UnconventionalWisdom said:

I did site visits in the north-east, portion size is also much much bigger!

Local pub near me,right opposite one of the oldest Saxon Church's in the country,right next to the river,Lunch menu £3.50 or roast of the day in a big yorkshire pud mash and veg £5,drinks £2.50.

The worry though is its turning into a flood moving up here,it started with bennie claims moving north after the benefit cap,but now its people selling down south and moving here.Likely they have made a great choice,but not so good for us in time as house prices shoot up and other prices.Bring back Eric Bloodaxe i say and slaughter the lot of them just south of the Humber 

[nirvana]

Coal is rallying and taking WTI with it........in fact everything is fooking rallying, I guess the money is getting out the pipes 

And it looks like 'guru Dave' was talking shite with his 55 dollar oil call......guess you can't trust anyone nowadays 

[HousePriceMania]

https://www.aljazeera.com/news/2021/5/31/china-eases-birth-limit-allows-couple-to-have-3-children

China allows families to have 3 children in major policy shift

[nirvana]

you think you've done alright out of crude but look at the price of coal....

 

[nirvana]

26 minutes ago, Cattle Prod said:

I didn't say you were cherry picking, I said your source was

he's not! he's a bit mad BUT he's got a masters in Geology!!!

He enjoys explaining to me how Blair was/is an absolute cunt cos he's a 'irish catholic' and he's a an IRA sympathiser 

He knows shitloads about El Nino, various plateaus, climate cycles bla bla bla.....and he knows lots of latin names for plants, so there!!!

Again, it was me who is quoting the US Government, if you can't trust them who can't you trust? Don't answer, I know they all talk shite

Anyway I'm off to research some more crypto so tata 

[Majorpain]

1 hour ago, sancho panza said:

I've been eyeing some options trades off Fres,looks to be reasonable value play here.

One of the more expert opinions on mining companies(amongst the hive mind anyway) eplained that there were issues with CEY sometime back and it was riskier than most iirc it centred on it being a one horse miner or something like that.I'm a spray n prayer so know little.I think it was eitehr @Majorpain@kibucor @DurhamBorn

One of the ibggest mistakes of teh last year was to focus too much on oilies and neglect the potash miners.Even had some calls that we could have excercised on mosaic and nutrien that we just sold on.

One of the issues with "one trick ponies" like CEY is if there is any problem with the main asset then then there is nowhere for the company to go.  Production can go from (say) 200,000 oz a year to 100,000 or less with one stoppage.  

https://www.proactiveinvestors.co.uk/companies/news/938808/centamin-reports-lower-production-as-remedial-work-starts-at-sukari-938808.html

I've set my allocation (mainly PM/Oil/some telcos), and was lucky enough to pick up the oilies at the lows, so as far as I'm concerned the only way is up with a nice divi yield on the way!  Didnt pick up any potash yet although, if we are "lucky" enough to get another 2020 smackdown then then some money will be going their way.  Timing is very difficult if its not obviously wrong like Shell/BP/co last year.

[Heart's Ease]

@Cattle Prod Hi CP - I'm looking into the Guinness Global fund you've talked about - just double checking which one I need to have my eyes over - the Class X or the Class C. Cheers.

[Cosmic]

24 minutes ago, Heart's Ease said:

@Cattle Prod Hi CP - I'm looking into the Guinness Global fund you've talked about - just double checking which one I need to have my eyes over - the Class X or the Class C. Cheers.

X is income, C is accumulation. Depends if you need/want dividends.

[leonardratso]

27 minutes ago, Heart's Ease said:

@Cattle Prod Hi CP - I'm looking into the Guinness Global fund you've talked about - just double checking which one I need to have my eyes over - the Class X or the Class C. Cheers.

dunno what the difference between X & C is, but lloyds offers me I and R so might be same, i know I is for institutional investor and R for retail, i could buy either but R has higher OCF fee but a lower price, whereas I has lower OCF fee but slightly higher price.

edit : ah, apples knows there above. the lloyds ones are both Accumulate, i hardly ever buy income ones.

 

[AWW]

3 hours ago, sleepwello'nights said:

He missed the main target which was the parents spoiling their children. They wouldn't go to school in a caravan of cars if their parents didn't take them, they wouldn't spend all day on an electronic device if their parents didn't buy it for them, etc.. 

Anyway back to topic, will the children revert to a less energy intensive way of life?

It could be argued that they already have. I know it's the modern moan that kids spend too much time on their phone or tablet. But that one device replaces probably ten that we had as kids/teens. Walkman. Gameboy. Telly. 110 camera. Mega Drive. PC. VHS. Ghettoblaster. Rack of CDs and DVDs. Shelves full of books. Yes, even the house phone.

Nobody would have batted an eyelid if we spent half an hour using each of those everyday, either.

[Majorpain]

Spikey.  Anyone order a fed policy mistake?

[Barnsey]

https://www.bbc.co.uk/news/business-57314678

However, the survey indicated that many suppliers are struggling to keep up with the increased demand, which is pushing up the average delivery times to manufacturers.

Businesses particularly highlighted shortages of electronics, plastics and metals, and there were also delays in transport.

In turn, this has led to the highest rise in the cost of supplies since the survey began in 1992, causing manufacturers to increase their own prices.

[DurhamBorn]

38 minutes ago, Barnsey said:

https://www.bbc.co.uk/news/business-57314678

However, the survey indicated that many suppliers are struggling to keep up with the increased demand, which is pushing up the average delivery times to manufacturers.

Businesses particularly highlighted shortages of electronics, plastics and metals, and there were also delays in transport.

In turn, this has led to the highest rise in the cost of supplies since the survey began in 1992, causing manufacturers to increase their own prices.

65% for the cycle my roadmap said when everyone said it was 10 more years of deflation.CBs need to lift the size of the liquidity by around 30%,they have nearly got that now,and then a few more boosters of 5%.That will see tax intake increase faster than spending in around 4 months,then both tax intake and GDP will grow faster than spending,saving governments from going bankrupt.Its a bit fuzzy,but i think they will likely need to de-value bonds in real terms by between 25% and 38% over the cycle,with an outlier of 47%.Cash slightly higher numbers by around 2%.

I dont think a 60% bond,or even maybe a 40% bond lifestyle type fund can show a positive return from here over the cycle.Thats an amazing situation.Distribution cycle as we always said,wealth/capital slowly given to inflation loving assets and their owners,and of course right now they are the least owned assets.

[reformed nice guy]

Another data point, cant confirm if the guy is legit of course

[sancho panza]

On 30/05/2021 at 14:09, Bobthebuilder said:

I have a few telco shares but would like to add more. Anyone know a decent ETF that covers the sector well? Not advice etc.

Here's the msot recent batch of coma scores Bob,as ever dyodd.I haven't really been that interested in them because of other things that have been happening and available but will defo build our positons up.Since the last time when the coma scores flagged BT at around 21 iirc(they were near a quid),they've pulledback now to a more mdoerate 17 score.I've added some colour to the balance sheet figures to indicate those where the goodwill is 50% of the equity(green) and thsoe where it's 75% or above(red)-lessons from the Scottish play.

one of the big issues with filtering the ETF's is that some of them are entertianment companies nowadays as much as telecoms.

it doens't take much to relaise the balance sheets are battered but as @DurhamBorn and @Democorruptcy et al have pointed out,they've levered up on some eye wtaeringly low coupons.

Company	Share price	Date	Chart	Inc	BS	CF	Sector	SCS
Airtel Africa								0
Americ Movil
AT&T	USD 30.04	17/03/21	3	1	2	5	4	15
Bell Canada
Bharti Airtel
BT	GBP 1.75	01/06/21	4	4	2	3	4	17
Charter Comms
China Telecom
Cincinnati Bell
Deutsche tel	E 16.655	17/03/21	1	3	1	3	4	12
Drillisch							4	4
KDDI							4	4
Koninklijke	E 2.923	17/03/21	4	3	2	5	4	18
KT	Korea 26900	17/03/21	3	4	3	5	4	19
LM Ericsson B	Skr 115.80	18/03/21	2	3	2	3	4	14
LG Uplus
Lumen
MTN	ZAR 8809	18/03/21	3	4	2	5	4	18
Nippon Telegraph							4	4
Nokia	E 3.505	18/03/21	4	1	3	3	4	15
Orange	E 10.51	18/03/21	4	5	1	5	4	19
Proximus	E 18.29	18/03/21	4	4	2	3	4	17
Rogers Comms
Singtel	S$ 2.43	01/06/21	4	2	4	4	4	18
SK Telecom
Swisscom	CHF 489.1	18/03/21	2	3	3	3	4	15
Telecom Argentina
Telecom Italia	E 0.4646	18/03/21	4	5	2	5	4	20
Telefonica	E 4.077	18/03/21	5	3	2	5	4	19
Telefonica Brazil
Telefonica Deutsch
Telenor	Nkr 151.05	18/03/21	2	4	1	2	4	13
Telia	Skr 37.06	18/03/21	3	1	2	4	4	14
Telkom Indonesia
Telstra	AUD 3.19	18/03/21	4	3	2	4	4	17
Telus
T-Mobile
Turkcell	USD 5.55	18/03/21	5	5	2	5	4	21
United Internet							4	4
Veon
Verizon	USD 55.83	18/03/21	1	3	2	3	4	13
Vodafone	GBP 1.28	01/06/21	5	2	3	5	4	19