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

[JimmyTheBruce]

1 hour ago, Hancock said:

The corporations have had it their way since companies could just hire and fire via agencies with the added bonus off mass immigration into the country, meaning workers are as dispensable as they could dream .... but the worker gets half their wage taken from them by the agency.

The agency needs to be taken out the picture, so the worker can double his day rate but be dispensable. 

Fuck the British unions those communist fucken pigs hate the British working class, they'd sooner there was no industry to get back at Thatcher and the Tories, than people actually got ahead in life. The unions supported mass immigration from the EU and everywhere else on earth, hardly a benefit to the British working man.

 

Whilst I appreciate your point, there are unions at my work, and there is the executive.  One of those (ostensibly) engage in collective bargaining, the other take multi-million salaries, prioritise share buybacks over staff reward because they're incentivised on the share price, and offshore everything, making life a misery for both those sacked and those left to deal with the incompetence of HCL, TCS, or whatever other acronym the Indians have come up with to hide the origin of their staff.

I generally focus my ire on the latter.  Not because I'm anti-capitalist, more because my interactions with them have generally confirmed my suspicion that they are greedy, ignorant, arrogant cunts.

[nirvana]

2 hours ago, Loki said:

Of course silver dropped too, that makes perfect sense if people are worried about inflation.

Markets are fooked and dumb fuks at FED just making it a lot worse.......the whips in the market when those cunts start saying anything are just feckin bonkers.... 

[BWW]

19 hours ago, Agent ZigZag said:

Just renewed my electricity and gas for a 12 month contract. An increase of 3% on the previous year. I view this as very fair and reasonable. Lets see where we are a year from now or is inflation now baked in. As someone once said inflation is like a tube of toothpaste. Once its out you cant put it back in.

Did you just accept the 3% from existing supplier or is that the comparison with others/uswitch etc?

I previously recommended green.energy here. Because they answerED the phone evenings and are chilled youth who were pleasant to deal with. They have now lost my recommendation that as they insisted I called them to do something they could have allowed me to do online. Then were 30-60mins wait time answering phones. Every time.

After that, their renewal offer came which was only valid at the moment they sent it and after that you could renew online but only find out at what rate if you called them. Ugh. Switching much easier - allowed me a real time offer to accept/reject from various different companies. No contest, switch.

I administer 3 energy accounts and have in the past checked the various low price upstarts before switching. Was caught out by the Yorkshire insolvency last year so now understand the SOLR process. [Will cost a little on the temporary SOLR high rates but much less than the year's saving on just taking the cheapest company each year.] If you don't bother doing any checks/research just switching to the cheapest from a comparison engine really does take a few minutes only. A 2min MSE search to see if gossip says they are about to declare insolvency probably makes sense though.

If your supplier goes tits up my conclusion from reading what others did on MSE is the best action is ignore all the SOLR/ofgen advice to wait before switching, start a switch as soon as you hear about the insolvency. The SOLR process will cost some time but only way to avoid is pay 200-500/year extra to one of the utterly awful big companies.

I am now intending to just spend the 15 mins switching to the cheapest offer [except those I blacklist] every year on every account if the saving is any more than 50 quid or so. No investigation, just search/switch. I have in the past had complaints out against [and thus blacklist] npower, edf, ovo [the worst] and e-on. Bottom line, they're all shit. Pursuing complaints achieves little for me other than frustration, starting the complaint gets you passed to a seperate avoid-paying-ombudsman-200-notes department who will do the minumum to provide service you're entitled to more efficently than the usual customer service idiots.

[HousePriceMania]

 

[leonardratso]

28 minutes ago, HousePriceMania said:

 

PS. northerners need not apply.

Immigrants fast tracked (must have outbound plane ticket and fake vaccine certificate as proof).

 

[Sugarlips]

17 hours ago, Loki said:

Of course silver dropped too, that makes perfect sense if people are worried about inflation.

Dropping like a stone, currently $26.27, think I’m gonna need a bigger truck..

[Funn3r]

20 hours ago, Hancock said:

Its no wonder companies hire agency staff and they get so low paid, when the Great British unions are fighting on their own your behalf. Bunch of communist and scouse agitators. 

If i was a manager at that company i'd sack every single person who joined a union.

We need to get rid of the EU employment laws so its easier to get fire people, then the money will go to workers, as opposed to agencies and other 3rd party's.

I'm afraid I'm going to have to file this under "emotional response doesn't make logical sense." It's illegal to sack people for being in a union. Even Thatcher didn't go that low. I suppose you're only against pleb unions as well; expect you're fine with things like the FDA and CBI.

I spent years as a union rep and 90% of any time I got involved with some trouble it was started by the employer trying to pull something dodgy. Not that I am much in favour of unions per se as to my mind they are the very opposite of "bolshie agitators" and instead they let down their members by taking their subs but not doing anything meaningful on their behalf. Maybe we'll see changes coming if genuinely a new business cycle.

 

[reformed nice guy]

Since the Fed has said interest rates will be going up, are we going to see a temper tantrum by Wall street to test their nerve?

Judging by the US unemployment numbers it still looks messy so they must surely continue to print to pay for infrastructure programs

[sancho panza]

On 15/06/2021 at 06:34, Sugarlips said:

Still the right time to increase silver exposure by the looks of it:

https://goldsilver.com/blog/the-coming-reversal-in-the-silversp-500-ratio-will-be-shocking/

Only at the beginning of the new millennia has this ratio been lower than it is right now.

Must admit FRES starting to get my interest.

This could be a sweet spot over the next few days to pick up some PM miners.We're going to be selling our royalty streamers.With a bit of luck this could send Barrick under $20 before anyone notices they're still doing $80bn of QE per month.

[janch]

18 hours ago, Loki said:

 I guess the Fed just made an announcement 

Sterling and euro are both down too as well as gold and silver.  Sterling was $1.41 yesterday and is now $1.39.  Euro now $1.19 and was around $1.21(?)

[jamtomorrow]

4 minutes ago, janch said:

Sterling and euro are both down too as well as gold and silver.  Sterling was $1.41 yesterday and is now $1.39.  Euro now $1.19 and was around $1.21(?)

And that DXY chart after another day ...

... headfake or "fundamentals"?

[janch]

Shaun Richards gives a good take on the Fed action:

https://notayesmanseconomics.wordpress.com/

We have become used to central banking being a bit dull, certainly compared to March last year. They essentially opened the monetary taps and have spent the intervening period not doing much. We have had some fiddling at the edges and a lot of open mouth operations, but last night the stakes were higher because of the pace of the recovery in the US economy. If we move to the effect we can see that markets made an immediate response.............

 

more in the rest of the article

[sancho panza]

22 hours ago, Cattle Prod said:

Great points here from DH @sancho panza:

I'd agree with him on the garbage in/out comment.There are facts in investing and then there are guesses.

I remember a psot I put up on US Real GDP data and pointed out that the deflator is a key metric in deciding when recessions start/stop and it doesn't take much adjsutment to drop 2 quarters off the recession.Noone questions it.

I'm not Shaun Ricards by any stretch and don't know the ins and outs of how it's done,but the key thing we need to remember is that the infaltion data is heavily gamed.

It's worth noting the range of different inflation measures tthere are as well.RPI not lsited-Trading Economics.But it's funny how they use CPI for pay and the GDP deflator for GDP...........why not use the same measure?????

My own suspicion is that the rate of infaltion being experienced by lower income deciles is way higher than that for those in the top deciles.

3 minutes ago, janch said:

Shaun Richards gives a good take on the Fed action:

https://notayesmanseconomics.wordpress.com/

We have become used to central banking being a bit dull, certainly compared to March last year. They essentially opened the monetary taps and have spent the intervening period not doing much. We have had some fiddling at the edges and a lot of open mouth operations, but last night the stakes were higher because of the pace of the recovery in the US economy. If we move to the effect we can see that markets made an immediate response.............

 

more in the rest of the article

How strange I awas literally jsut mentioning him in my reply to CP.

[sancho panza]

9 minutes ago, janch said:

Shaun Richards gives a good take on the Fed action:

https://notayesmanseconomics.wordpress.com/

We have become used to central banking being a bit dull, certainly compared to March last year. They essentially opened the monetary taps and have spent the intervening period not doing much. We have had some fiddling at the edges and a lot of open mouth operations, but last night the stakes were higher because of the pace of the recovery in the US economy. If we move to the effect we can see that markets made an immediate response.............

 

more in the rest of the article

Shaun comments are bang on.Especially when he talks about how regarding 2 x 0.25% rate hikes in 2023 is somehow regard as hawkish with CPI at 5%.Spare me.

[reformed nice guy]

I think I found this alternative inflation measurement here, but it is a broader index that takes a complete "normal lifestyle" into account:

https://www.manhattan-institute.org/reevaluating-prosperity-of-american-family

[Majorpain]

1 hour ago, Sugarlips said:

Dropping like a stone, currently $26.27, think I’m gonna need a bigger truck..

They are throwing everything at it, chance to buy silver back under $20 again?

[Chewing Grass]

4 minutes ago, Majorpain said:

They are throwing everything at it, chance to buy silver back under $20 again?

Noticed that antique silver coins have almost dropped back to where they were 18 months ago as well, thought I'd broken the 'collecting' habit but might dip my toe back in at less than £20 for average condition.

[sancho panza]

12 minutes ago, Majorpain said:

They are throwing everything at it, chance to buy silver back under $20 again?

We did a partial sale of som PM miners holdings back in Aug/Sept and not really redeployed them back in yet.This has the hallmarks of an opportunity.Markets talking about hawkish fed(please don't laugh),but QE still being pumped,stimulus package still coming.

I'll take my chances if FRES gets to 750/Barrick $15 etc.I don't see us getting back below $23 on silver in the next month or three by which time everyone will have realsied the fed jsut printed another $240bn and added it to the national debt.

sijnce Mar 20 low

[Majorpain]

18 minutes ago, sancho panza said:

We did a partial sale of som PM miners holdings back in Aug/Sept and not really redeployed them back in yet.This has the hallmarks of an opportunity.Markets talking about hawkish fed(please don't laugh),but QE still being pumped,stimulus package still coming.

I'll take my chances if FRES gets to 750/Barrick $15 etc.I don't see us getting back below $23 on silver in the next month or three by which time everyone will have realsied the fed jsut printed another $240bn and added it to the national debt.

sijnce Mar 20 low

Not sure what is going on with FRES, $12 AISC with $26+ AG price is quite tasty when you produce 60m+ Oz so I picked some up in low 800's.  PM's do seem more out of favor on the ftse than US/Can.

[JMD]

On 11/06/2021 at 14:09, Harley said:

PS: Last I looked Morningstar age the long term debt balance.  

Harley, i tried to take a look at that Morning Star aged long term debt balance, but couldn't find it on their site - i guess you need to be a subscriber to see all of their data/maybe they have now moved this data into their subscription service? If however you can still see this data, would it be possible for you to post a link to it to help me locate where it lives? 

[JMD]

2 hours ago, reformed nice guy said:

I think I found this alternative inflation measurement here, but it is a broader index that takes a complete "normal lifestyle" into account:

https://www.manhattan-institute.org/reevaluating-prosperity-of-american-family

That was an interesting read, in regard to (mis)calculating inflation.

Has always struck me as such a stupid idea to attempt to include 'standard of living increase'/'product improvement' metric, into price increases. Its done for 'very convenient' economic reasons i know!!... but the thing is everything these days seems to be veering into the surreal and complex, and having no connection to the 'real world'?     

I was aware of technology improvements being 'discounted', therefore effectively lowering the price inflation figure. But, from the extract below, improvements in medical treatments must have a far greater effect. i.e. cancer drugs may have doubled in price, but if the new improved drug extends a life by say 20 years (opposed to 10 years previously), then the drug price increase is discounted 100%!! (As an aside, the American health system really does need radical reform, its so expensive, but that's a different topic).

 

Medical Care. Health care provides a quintessential illustration of the potential gap between price increases perceived by households and inflation perceived by economists. The BLS estimate for medical inflation appears far lower than the rate at which households are seeing health-care costs rise. BLS reports that medical-care prices have risen 93% from 1999 to 2018;[20] but during the same period, the average family health-insurance premium has increased by 239%.[21] 

Two key factors help to explain this gap: first, when medical care increases in price because it has improved in quality—for instance, thanks to the introduction of a superior but costlier procedure, drug, or device—those price increases are not considered inflationary because the patient is getting greater value for the greater cost. This is an example of quality adjustment.

Second, many purchases of medical care are intermediated by insurance, which inflation analyses strive explicitly to disregard. But the presence of insurance has critical implications for a household. Its costs are determined by the behavior of all participants in their risk pool rather than thier own choices. When people across society consume greater quantities of medical care, the cost of health insurance will rise even if the prices of individual medical services have not, and even for households that consume a lower quantity. Both market and regulatory forces will typically preclude a household from consuming its own preferred bundle of health-care services as opposed to the one reflected by the standard set of insurance offerings.

[jamtomorrow]

Systemic instability might reveal itself like a pot coming to the boil. Little incidents here and there. Then a smattering of incidents. Then before you know it, incidents everywhere you look.

Words like "whipsaw" and "snapback" certainly seem to be cropping up more frequently in the punditsphere. Maybe a useful metric?

 

[ThoughtCriminal]

David Hunter 

 

Summary: Everything is GREAT 

[Loki]

23 minutes ago, ThoughtCriminal said:

David Hunter 

 

Summary: Everything is GREAT 

Great!

[Yadda yadda yadda]

2 hours ago, ThoughtCriminal said:

David Hunter 

 

Summary: Everything is GREAT 

Has he added + to a couple of those numbers? Hunter upgrade.