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

[Hancock]

16 minutes ago, planit said:

Where is the reopening boom that everyone is expecting? THE MARKETS ARE RELYING ON IT

Dont know, but im up and down the M1 several times a week and i've never seen so many LGV/HGV's.

[janch]

I met my son in Bath last Saturday and it seemed as if the whole world was there.  It was Brits too as at this time of year it would be mainly tourists in a normal year.  Mostly young Brits too and all eating in the many cafes/restaurants etc. 

Transport to get there was busier than earlier in the year (train me) and coach (son) from London.

Its the oldies and scaredies who are staying home.  Youngsters are out and about from what I've been seeing.

[JimmyTheBruce]

6 hours ago, Nomad said:

Maybe realisation is starting to kick in?

https://www.bbc.co.uk/news/business-57670734

 

3 hours ago, Hancock said:

Everyone of these central bankers that leaves the BoE calls for imminent interest rate rises ... yet when they got the job it was the polar opposite.

"In a speech to the Institute of Government, Mr Haldane, who is leaving the Bank after 32 years, said "everyone would lose" from greater inflation."

... depends how your pension is invested eh Andy?

[Harley]

And another great Palisades Radio interview.  I was making doors so only half listening but the guy seems to be quite aligned with us on oil, the macro (deflation then hyperinflation but maybe later), etc.  Interesting historic take on energy.

https://palisadesradio.ca/steve-st-angelo-americans-have-never-been-more-stock-market-exposed/

 

[nirvana]

Why is the dollar keep going up with all this money printing?

Have the FED got it wrong yet again??? 

[Loki]

1 hour ago, nirvana said:

Why is the dollar keep going up

It's mental isn't it

[Harley]

1 hour ago, nirvana said:

Why is the dollar keep going up with all this money printing?

Have the FED got it wrong yet again??? 

Because I forecasted it (DXY and now Cable, DYOR) based on the chart.  Beyond that, things go up, things go down.  Some a lot, some not so much.  We buy low,  we sell high.  We make money, the govt takes it.  We will own nothing and they will be happy.

[spygirl]

15 hours ago, janch said:

I met my son in Bath last Saturday and it seemed as if the whole world was there.  It was Brits too as at this time of year it would be mainly tourists in a normal year.  Mostly young Brits too and all eating in the many cafes/restaurants etc. 

Transport to get there was busier than earlier in the year (train me) and coach (son) from London.

Its the oldies and scaredies who are staying home.  Youngsters are out and about from what I've been seeing.

There are no young people in Bath now.

Bar the crusties.

 

[wherebee]

One thing I would like us to talk about is the potential for a crash in oilies prices if, come winter, some of the worst predictions of mass deaths from vaccine vulnerabilities/ADE start to come true.  

Now, I grant you it could all be bollocks, but anyone who claims 2020-21 are normal is just plain drunk.  What would be our signal for depressed demand due to mass vaxx deaths?  What's the sell point?

The oilies selling point is that demand will come back east (and west) due to declining production and the 3-5 lag in ramping up.  fair enough.  I've bought in heavily on that logical and very intelligence analysis by DB and others.  But in a world in which vaxx deaths kill substantial numbers, and the massive clusterfuck that will result, I don't see oil demand staying high, would you?

thoughts?

mine are to watch the pandemic threads for data on upticks of deaths of vaccinated people in the UK in Oct-Nov (as winter comes on and the average time from vaxxination approaches 12 months).

[Sasquatch]

25 minutes ago, wherebee said:

One thing I would like us to talk about is the potential for a crash in oilies prices if, come winter, some of the worst predictions of mass deaths from vaccine vulnerabilities/ADE start to come true.  

If that came to pass, I would be much more worried about getting food to eat than my stock prices dropping. Truly end of days stuff...

[wherebee]

12 minutes ago, Sasquatch said:

If that came to pass, I would be much more worried about getting food to eat than my stock prices dropping. Truly end of days stuff...

sell oilies in Oct, buy gold and bullets = PROFIT.

or something like that

[sancho panza]

On 30/06/2021 at 11:03, Barnsey said:

The market is hot no doubt, but this isn't pre GFC madness, look at the collapse of high LTV lending.

Banks are being careful, house building was shut down for months and slowly being brought back in the face of labour and commodity constraints (when did that happen last, WWII?) .

Don't fall for the stamp duty holiday bollocks as this phenomenon is global, a s**t ton of people have a f**kload of enforced savings they've used as a deposit as they reassess their priorities. Be careful with the comparisons to 2008.

From John Auther's daily email:

Barnsey,interesting data in these charts so Im reprinting them larger so people can see the detail.Teh data only goes to Dec 20,so we don't have the recent volume data but we know it's down heavily yoy.

First up,notice the huge, and I mean huge drop in remortgages.Whether thats furlough,banks tightening,who knows.Incredible seeing that drop.Someones either not applying for credit or getting rejected.

On the second chart,the other thing I note besides the collapse is the large proportionate rise in 75%-85% LTV lending that looks to be the net result of the drop in 90-95% lending

fascinating.

 

[sancho panza]

On 30/06/2021 at 12:47, Harley said:

I'm just back from from the merchants.  Went to buy 2x1.  Out of stock with no replenishment date.  2x1 FFS.  Will try a mill but may just rip what I've got.

The worst part was I was replenishing the pile I bought back in Mar 20 in anticipation of shortages which have only just happened!  Not that I've been a keen buyer lately but my pile is now low and any jobs may have to be put on hold. 

I've already repurposed a lot of used wood which was nice to do, although won't last as long.

WHen lumber gets back to 300,I'll wake up.We had an exponential squeeze psot lockdown lift,we now need to see where it settles.

[sancho panza]

On 30/06/2021 at 15:12, Boon said:

I too think there is a lot of excess saving hanging around, trouble is most of that will be concentrated in the top 50%.  If you were struggling before the pandemic financially, chances are you are no richer now. But if you had a reasonable level of investment in almost anything apart from cash, it must be quite hard to be poorer. Those would could average down into the dip will be a lot better off.

really exceellnet point.That would directly explain the complete lack of hosuing market activity in flats and terraces that ongoing.A lot of the volume is in houses with gardens.

 people in lower income deciles are even poorer than last year.

[kibuc]

17 hours ago, janch said:

I met my son in Bath last Saturday and it seemed as if the whole world was there.  It was Brits too as at this time of year it would be mainly tourists in a normal year.  Mostly young Brits too and all eating in the many cafes/restaurants etc. 

Transport to get there was busier than earlier in the year (train me) and coach (son) from London.

Its the oldies and scaredies who are staying home.  Youngsters are out and about from what I've been seeing.

I went to London last weekend to get some escape from my family. The city partied like it was the 20s again (perhaps because it is?), Saturday morning there were young people dressed to impress all over the place clearly going somewhere fun, the place I went to there was a grand total of 5 security guys simultaneously manning the entrance AND reminding around a thousand people inside not to dance. It was purely for show and hardly anyone gave a fuck. Had a lovely night, including a "covid-unregulated" afterparty at a local brewery.

Around 20% people on the Tube had no mask at all and another 20% kept them firmly under their chins (and yes, I graduated from Spygirl's School of Made Up Stats).

[reformed nice guy]

58 minutes ago, wherebee said:

One thing I would like us to talk about is the potential for a crash in oilies prices if, come winter, some of the worst predictions of mass deaths from vaccine vulnerabilities/ADE start to come true.  

Now, I grant you it could all be bollocks, but anyone who claims 2020-21 are normal is just plain drunk.  What would be our signal for depressed demand due to mass vaxx deaths?  What's the sell point?

The oilies selling point is that demand will come back east (and west) due to declining production and the 3-5 lag in ramping up.  fair enough.  I've bought in heavily on that logical and very intelligence analysis by DB and others.  But in a world in which vaxx deaths kill substantial numbers, and the massive clusterfuck that will result, I don't see oil demand staying high, would you?

thoughts?

mine are to watch the pandemic threads for data on upticks of deaths of vaccinated people in the UK in Oct-Nov (as winter comes on and the average time from vaxxination approaches 12 months).

Cremation uses a lot of energy.....

[sancho panza]

2 minutes ago, kibuc said:

I went to London last weekend to get some escape from my family. The city partied like it was the 20s again (parhaps because it is?), Saturday morning there were young people dressed to impress all over the place clearly going somewhere fun, the place I went to there was a grand total of 5 security guys simultaneously manning the entrance AND reminding around a thousand people inside not to dance. It was purely for show and hardly anyone gave a fuck. Had a lovely night, including a "covid-unregulated" afterparty at a local brewery.

Around 20% people on the Tube had no mask at all and another 20% kept them firmly under their chins (and yes, I graduated from Spygirl's School of Made Up Stats).

Nice to hear you had a good time K.

People I speak to are increasingly getting sick of the nanny state stuff ,especially as they see different rules applying to UEFA officials and Hancock..........10 deaths a day from covid(within 28 days of a postive test).

the politcal class are losing it.

On antoehr matter,I joined @Bobthebuilder and @DoINeedOne buying goldie calls of late and some smallies.

Must say cant understand people selling goldies off because the fed wants to raise two quarter points in 2023.......whennreal rates are deeply negative.

[dnb24]

9 minutes ago, sancho panza said:

really exceellnet point.That would directly explain the complete lack of hosuing market activity in flats and terraces that ongoing.A lot of the volume is in houses with gardens.

 people in lower income deciles are even poorer than last year.

Also worth pointing out (hattip Lynn Alden) all the talk of mean and median wages going up, etc do seem to lean towards statistical anomalies- ie furlough has taken a huge swathe of the lowest earners out of the “official average wage” calculation- ie hourly wage example 8,8,8,9,9,10,12,17,17,22,22, take the bottom 3 away (on furlough) hey presto average wage increases- markets extrapolate from there.

I think this supports the above point- and something that may indicate the market is looking the wrong way once furlough fully ends and we see the realities of lockdown come home to roost. How will the markets take those “official” stats then?

[MrXxxx]

3 hours ago, nirvana said:

Why is the dollar keep going up with all this money printing?

Have the FED got it wrong yet again??? 

Because basically everyone else is doing the same, but their currency is shittier!....when you have a choice of dog shit [Euro], cat shit [Renminbi], bull shit [£UK] or sheep shit [$US] on your shoes which one would you choose?!

[MrXxxx]

49 minutes ago, sancho panza said:

Barnsey,interesting data in these charts so Im reprinting them larger so people can see the detail.Teh data only goes to Dec 20,so we don't have the recent volume data but we know it's down heavily yoy.

First up,notice the huge, and I mean huge drop in remortgages.Whether thats furlough,banks tightening,who knows.Incredible seeing that drop.Someones either not applying for credit or getting rejected.

On the second chart,the other thing I note besides the collapse is the large proportionate rise in 75%-85% LTV lending that looks to be the net result of the drop in 90-95% lending

fascinating.

 

My quick interpretation of that would be two things:-

1. The FTB is now priced out due to price inflation going above salary increases, lenders 'tightening', and BOM&D now exhausted/conserving wealth due to unsure future.

2. The BTL market has dried-up given reduced yield and tightening restrictions such as eviction etc.

Indicated by reduced >90% LTV funding.

[kibuc]

57 minutes ago, sancho panza said:

Nice to hear you had a good time K.

People I speak to are increasingly getting sick of the nanny state stuff ,especially as they see different rules applying to UEFA officials and Hancock..........10 deaths a day from covid(within 28 days of a postive test).

the politcal class are losing it.

On antoehr matter,I joined @Bobthebuilder and @DoINeedOne buying goldie calls of late and some smallies.

Must say cant understand people selling goldies off because the fed wants to raise two quarter points in 2023.......whennreal rates are deeply negative.

I feel like there's a growing polarisation of attitudes towards the virus - the young are increasingly more lax, while the older are trying to defend their careful approach by doubling down on it. My daughter has an eye exam today and I was told I can only walk her in and then I'll have to wait in the car (yeah, like fuck I'm doing that).

There are some interesting vibes I'm getting from hospitality sector. In the hotel I stayed in, I only managed to reach room service once, on other days noone would pick up. I was told at the reception they had staff shortages across all posts. Shame, as they made some juicy burgers.

Then there are stories I hear from my wife, about a significant number of her clients - a lot of them working in hospitality - changing jobs because they were fed up with being overworked due to their companies being understaffed. They moved to places which paid better and, miraculously, didn't suffer quite as much from unfilled vanacies. Who would have thunk it?

A lot of job adverts posted on windows of my local Budgens and M&S, too.

[Harley]

2 hours ago, wherebee said:

.....
thoughts?

mine are to watch the pandemic threads for data on upticks of deaths of vaccinated people in the UK in Oct-Nov (as winter comes on and the average time from vaxxination approaches 12 months).

I watch the charts.  Anything else does my head in.  Talk is talk and price is price.  I have little idea of my sector split save it's mixed and all the stocks seem to be in long term price uptrends.

[AlfredTheLittle]

1 hour ago, wherebee said:

One thing I would like us to talk about is the potential for a crash in oilies prices if, come winter, some of the worst predictions of mass deaths from vaccine vulnerabilities/ADE start to come true.  
 

I'm interested in this as well, I think a lot probably are, but the reality is none of us can possibly know the answer. The thesis is that over this decade oil is going to be a great investment, but there's a lot less certainty over whether the oilies share prices this time next year will be lower or higher.

Edit to add: personally, I'm staying invested through any dip. Don't want to risk missing the big gains

[Harley]

27 minutes ago, kibuc said:

I feel like there's a growing polarisation of attitudes towards the virus - the young are increasingly more lax, while the older are trying to defend their careful approach by doubling down on it. My daughter has an eye exam today and I was told I can only walk her in and they I'll have to wait in the car (yeah, like fuck I'm doing that).

So it was only older people that decided you had to wait in the car?  Did you attend the management meeting where that decision was made?  My point is it's just a feeling, as you say.  It may well be true to some extent (although a blanket statement would be idiotic).  But what's all this got to do with macro?  I guess we could talk about feelings as a tool for macro analysis.  Again, not being funny at all as it would probably be better than some of the tools out there!  But as been mentioned upthread, there is a long tail to all this which requires some decent analysis to navigate as well as some dust to settle (virus today, a variant twist tomorrow, maybe not even medical).

PS:  Yes, my partner had an exam and it was very controlled.  They would not let people in the shop until time, etc.

PPS:  My 80+ MIL is a BBC watcher, etc but dead against all of this, especially as she has a young granddaughter she wants the best for.  But then yes, she has to be careful what she says to who in her cohort.  She is not alone though. 

Anyway, I digress and that's an anecdote not data.

[Harley]

15 minutes ago, AlfredTheLittle said:

......

Edit to add: personally, I'm staying invested through any dip. Don't want to risk missing the big gains

My biggest problem with not being invested is where to put it if not.