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

[AWW]

I'd like to see how long those cables last when copper prices spike up.

[The Idiocrat]

43 minutes ago, DoINeedOne said:

 

Indeed. The council round here are putting charging points on some of the lamp posts. I can see them just putting them in the kerbs (from the nearest lamp post) in future. Would make for a nice public works programme.

[Democorruptcy]

59 minutes ago, DoINeedOne said:

 

That just looks incredibly stupid. All it needs is car manufacturers to agree on a uniform battery size and make it removable. Pull it out on a night and charge it indoors. Carry a spare for longer journeys. Garages don't have charging points they just swap batteries.

[kibuc]

2 minutes ago, Democorruptcy said:

That just looks incredibly stupid. All it needs is car manufacturers to agree on a uniform battery size and make it removable. Pull it out on a night and charge it indoors. Carry a spare for longer journeys. Garages don't have charging points they just swap batteries.

I don't know if that was tongue-in-cheek, but EV batteries weigh in excess of 1000lbs and play big part in car's structural integrity.

[sancho panza]

On 15/11/2020 at 20:27, spygirl said:

https://tradingeconomics.com/united-kingdom/mortgage-approvals

 

All that's happening is an ever  decreasing circle of existing home owners selling houses between each other.

Theyll die out soon, quicker with covid.

 

Bang on Spy.Picture paints a 100 words.Volumes look to have halved since 2007

 

 

On 16/11/2020 at 06:58, DurhamBorn said:

Food will be fine,just needs more potash.Food production will be a big winner in the cycle,lots of new ways of growing etc,but hard to play outside of the inputs.

naother reflection froma week of them is that I should have developed a larger potash position.Ours is pretty decent but not laddering  in Nutrien at $25.........head hits table.

[Hardhat]

1 minute ago, sancho panza said:

Bang on Spy.Picture paints a 100 words.Volumes look to have halved since 2007

Great graph @sancho panza, very  clear what is coming imo. Where is the graph from?

[CVG]

43 minutes ago, Democorruptcy said:

That just looks incredibly stupid. All it needs is car manufacturers to agree on a uniform battery size and make it removable. Pull it out on a night and charge it indoors. Carry a spare for longer journeys. Garages don't have charging points they just swap batteries.

Even better? Current service stations become battery chargers/swappers. Pop in and swap your battery for one they have charged for you.

[Chewing Grass]

39 minutes ago, Democorruptcy said:

All it needs is car manufacturers to agree on a uniform battery size and make it removable. Pull it out on a night and charge it indoors.

Some car batteries weigh 500kg

Tesla batteries are approx 254 W⋅h/kg

https://en.wikipedia.org/wiki/Watt-hour_per_kilogram

1 kWh gets you about 3 miles.

So 4kg of bare unprotected battery gets you 3 miles.

So 10 miles to work and back needs 26kg of brand new battery with no spare capacity and a full discharge which is bad for it.

EU says >25kg (full size bag cement) is bad.

[sancho panza]

On 17/11/2020 at 10:05, Cattle Prod said:

Think he had 22 wives, divorced at will. 

And there's me struggling to keep one happy.

[JMD]

On 16/11/2020 at 23:38, sancho panza said:

Been doing some reflecting on the year so far and looking back,I really wish we'd built a decent positon in copper whilst the market was low in March/April.

I bought some Freeport calls but that was about it.

Can't believe I couldn't find some of the oilies money to shuffle over.Greed/value trap/tunnel vision..................

Has anyone any experience or names that I shud keep my eye for the bottom of the crunch?

Or any good websites/blogs where I can read up on the sector?

Said i would show and tell... but from others copper responses so far, looks like i have not deviated too much from 'the crowd'. However, my regret is not buying more when cheap as they represent only 1.5% of my portfolio and i would have liked more, anyway from highest to lowest: Teck, SCCO, Antofagasta Holdings, FCX, First Quantum Minerals, Boliden. 

DB mentioned that stocks like BHP, Harmony, Yamana gold, also perhaps offer good exposure to copper. I agree, and for example one of my uranium plays - Kazatomprom - is big in copper.

(...and for amusement purposes only!!, or just to be totally wreckless??, i'll mention the highly indebted Norilsk Nickel, lse:mnod, it also has large copper, platinum reserves; decl: i own a little).

[sancho panza]

17 hours ago, TMM said:

Hello Sancho

I've been following this thread here and on TOS since the beginning (thanks to DB and all you peeps for sharing your insight/ideas and thanks to Yellow_Reduced_Sticker for the amusement factor!). I still haven't been brave enough to buy shares yet. Can I ask, what sort of annual income, would you like to think £300k divis would provide? Thank you.

Personally I aim for 5% ideally and hopefully that will be inflation proof to a degree.

Having said that currently Shell are paying circa 4% (assuming a share price at£12) with a circa $0.64 USD divi.If they get towards their old divi level of $1.88USD,we're talking 12%.

Have a look at the chart for BLT or BATs.If you'd bought late 90's when they were 5% and then held to now,the annual divi is currently £0.91 ie nearly what you would have paid for the stock.

So if £300k is your portfolio you need to balance it and for that you need to read @Harley or @DurhamBorn on the issue.

Hopefully,if divi's grow then your potential payout could be higher and obviously if you compund the divi's and buy more stock it will do so quicker.

I'm the wrong person to advise in any depth as I'm a gambler by nature and would jsut stick it all in BP/Shell/XOM/ENI/Repsol/EQNR at these levels.

17 hours ago, Cosmic Apple said:

Interesting to see this thought come up. I've been having the same thoughts looking at Barclays 7/10 year fixed.

I believe I've made a mistake paying off my fairly small mortgage early. Now I'm thinking of remortgaging, to 40-50% LTV which is only 50k and <1x household ... and shoving this in to a standalone portfolio.

I'd set the term to the end of the fix anyway, and pay it off as normal, so in 7/10 years time that portfolio would be 'paid for'.

Possibly crazy thoughts, but those rates are soo low...

As above CA,I knew there'd be a few bites and I wouldn't be the only one looking at those rates and tehn looking at teh velcoity charts a few pages back and thinking it's game on..

We rent,but if I did own a house,I';d find it hard not to take that trade out of hosuing into the black stuff.

Sometimes in life you have to have a punt but please anyone reading this,dyor...

I had a decent size punt on the US presidential,with a view to taking the profit and sticking it straight into call options on the big oilies if we won.That's obviously heading to the courts but such is life.

Two other recent trades that struck me as possible was selling our Newcrest and Barrick psotions(both in healthy profit) and going into big oil but on reflection we jsut have too much in big oil.Funny now they've come up 20%++ and the goldies are down,the attractions of the trade aren't tehre.

second was selling FCX calls now a up a lot since May and buying XOM $45 calls for a buck.Again,in one week,that's off the table.

 

Ten year fixes have been cheap for some time.I have no idea when they'll get more expensive.Maybe @DurhamBorn has a view on wehn we'll see long rates moving up.

 

[spygirl]

40 minutes ago, Hardhat said:

Great graph @sancho panza, very  clear what is coming imo. Where is the graph from?

This is a better site.

PITA until you find the menu

https://www.home.co.uk/guides/house_prices_report.htm?location=yo11&all=1

Homepage. Select Prices and Rent.

The Selling prices.

You can adjust the years. Set ~10 or 5 to get a better idea of local trends.

The use this for individual sales

https://houseprices.io/

 

 

 

https://www.home.co.uk/guides/house_prices_report.htm?location=yo11&startmonth=01&startyear=2010&endmonth=08&endyear=2020

Covid has destroyed the North's housing market.

[spygirl]

2 minutes ago, sancho panza said:

Personally I aim for 5% ideally and hopefully that will be inflation proof to a degree.

Having said that currently Shell are paying circa 4% (assuming a share price at£12) with a circa $0.64 USD divi.If they get towards their old divi level of $1.88USD,we're talking 12%.

Have a look at the chart for BLT or BATs.If you'd bought late 90's when they were 5% and then held to now,the annual divi is currently £0.91 ie nearly what you would have paid for the stock.

So if £300k is your portfolio you need to balance it and for that you need to read @Harley or @DurhamBorn on the issue.

Hopefully,if divi's grow then your potential payout could be higher and obviously if you compund the divi's and buy more stock it will do so quicker.

I'm the wrong person to advise in any depth as I'm a gambler by nature and would jsut stick it all in BP/Shell/XOM/ENI/Repsol/EQNR at these levels.

As above CA,I knew there'd be a few bites and I wouldn't be the only one looking at those rates and tehn looking at teh velcoity charts a few pages back and thinking it's game on..

We rent,but if I did own a house,I';d find it hard not to take that trade out of hosuing into the black stuff.

Sometimes in life you have to have a punt but please anyone reading this,dyor...

I had a decent size punt on the US presidential,with a view to taking the profit and sticking it straight into call options on the big oilies if we won.That's obviously heading to the courts but such is life.

Two other recent trades that struck me as possible was selling our Newcrest and Barrick psotions(both in healthy profit) and going into big oil but on reflection we jsut have too much in big oil.Funny now they've come up 20%++ and the goldies are down,the attractions of the trade aren't tehre.

second was selling FCX calls now a up a lot since May and buying XOM $45 calls for a buck.Again,in one week,that's off the table.

 

Ten year fixes have been cheap for some time.I have no idea when they'll get more expensive.Maybe @DurhamBorn has a view on wehn we'll see long rates moving up.

 

10 year fixes have disappeared again.

5 is the best you can do.

Mortgages are no longer cheap for everyone.

If youve ~40% deposit then mortgages are dirt cheap - 1.6% in some cases Ive seen.

If youve got 20% or less then you'll struggle to get a mortgage, even an expensive one.

This has only happened since Covid/March. Its not looking temporary.

 

 

 

[sancho panza]

5 hours ago, Paulie said:

How does talk of oil divs square with moves to ban internal combustion by 2030? Demand destruction surely? Or are we expecting UK will be out on a limb here? 

AS we in the UK (population 65million) sitting here starving in the darkness and unable to travel to work because the Extermination Rebellion have got everyone but govt workers furloughed,the Chinese (population 1.2 billion( and Indians (population 1 billion ) will be hoovering up $80 oil.

 

2 hours ago, jamtomorrow said:

Some signs that Boris starting to notice the coming energy crisis in the brief interludes between self-inflicted drownings: https://www.bbc.co.uk/news/business-54867442

Tells you something when "Hail Mary" might become policy -

"Although many energy industry experts remain sceptical that small nuclear reactors can play a significant role, the BBC understands that the government has big ambitions to progress this technology, and that it will form an important part of the government's long term plans."

I didn't have high hopes at all for Bozza,so it's with some sadenss for the British people that I have to say, he's managed to dissappoint me.

I don't think I've ever seen a PM that U turns with as much speed as he does on issues that matter eg energy policy and then dig his heels in on the matters that don't eg Lockdown/covid.Power stations aren't built in a weekend.

Thankfully,his days are numbered and I can't see how even the Tories will manage to pick someone as incompetent as him on the next round.

58 minutes ago, Hardhat said:

Great graph @sancho panza, very  clear what is coming imo. Where is the graph from?

They used to have an invetory section but have obvisouly binned it for whatever reason-I'd be interested to know.

 

https://www.rightmove.co.uk/house-prices-in-my-area/marketTrendsTotalPropertiesSoldAndAveragePrice.html?searchLocation=sw16&sellersPriceGuide=Update+Results

[sancho panza]

8 minutes ago, spygirl said:

10 year fixes have disappeared again.

5 is the best you can do.

Barclays are advertising .....is that jsut to draw people in and then say they can only get a 5 year?

For the equity rich,you'd have thought the ten year wouldn't be a problem.

[sancho panza]

19 minutes ago, spygirl said:

This is a better site.

PITA until you find the menu

https://www.home.co.uk/guides/house_prices_report.htm?location=yo11&all=1

Homepage. Select Prices and Rent.

The Selling prices.

You can adjust the years. Set ~10 or 5 to get a better idea of local trends.

The use this for individual sales

https://houseprices.io/

 

 

 

https://www.home.co.uk/guides/house_prices_report.htm?location=yo11&startmonth=01&startyear=2010&endmonth=08&endyear=2020

Covid has destroyed the North's housing market.

Intersting as you can see nicely the trebling in prices up to 2007 and then the plateau to today.This Barnsley,where my Mum is from.Clearly shows prices the same as 2007.Terraced hosues and flats(blue and orange lines) are actually lower than 2007.....

 

[spygirl]

6 minutes ago, sancho panza said:

Barclays are advertising .....is that jsut to draw people in and then say they can only get a 5 year?

For the equity rich,you'd have thought the ten year wouldn't be a problem.

Barlcays pulled it range for 75% LTV.

Not sure if theyve acutally started writing these again.

https://www.mortgagestrategy.co.uk/news/barclays-to-pull-75-ltv-resi-deals-to-manage-demand/

Their min mortgages l9mit is stunning - 5k.

One of my current eye brow raising stats is checking what banks min mortgage is.

Most seem to want ~50k.

In some places that min will be a problem with MMR/incomes.

 

 

[spygirl]

3 minutes ago, sancho panza said:

Intersting as you can see nicely the trebling in prices up to 2007 and then the plateau to today.This Barnsley,where my Mum is from.Clearly shows prices the same as 2007.Terraced hosues and flats(blue and orange lines) are actually lower than 2007.....

 

You need to project a straight line, from ~04ish, that reduces the real price by ~30%.

Same everywhere in the north afaict.

Theres going to be places selling for the same nominal price they sold at in the 80s boom.

 

 

[sancho panza]

1 minute ago, spygirl said:

You need to project a straight line, from ~04ish, that reduces the real price by ~30%.

Same everywhere in the north afaict.

Theres going to be places selling for the same nominal price they sold at in the 80s boom.

 

 

Indeed,hadn't thought about using a deflator.

Check this one,out,my last,I need to sdo some proper work.

Gonna be some big losses in the smoke with Tarquin trying to sell the pied a terre to someone who's stepped off the beach at Dover-

[Democorruptcy]

1 hour ago, kibuc said:

I don't know if that was tongue-in-cheek, but EV batteries weigh in excess of 1000lbs and play big part in car's structural integrity.

It wasn't tongue in cheek but admit I wasn't thinking they would weigh so much! Battery sizes seem to have reduced over time so I assumed the same would become true of car batteries.

Integrity is a good point. I took my car battery out to recharge it and haven't been able to use the Radio/CD player since! I don't know the security code and the youtube video of pulling the dashboard apart to get the serial number off the back didn't enthuse me.

 

[Noallegiance]

18 minutes ago, Cattle Prod said:

Tesla battery weighs ~ 500kg! I suppose I could get a pack of huskys to drag it up the driveway every night 

At least Huskies already have a built in plug socket for charging.

[JMD]

5 hours ago, Sideysid said:

The west will further box themselves into there own political agenda whilst China (as well as India) does what the fuck it likes as it’s the worlds manufacturer. Peak oil is some way off for them and by then the big oil companies will have muscled out the competition into hydrogen.

I am a big investor in the oilies, so this is a genuine question.

What about the risk of governments across the world such as US/Biden one, of pumping lots/most of their MMT money into the renewable sector? Such policies will buy these governments votes, show them too be the 'good guys' and pacify people (whilst they become more authoritarian in other sectors/areas, which is my personal fear). Anyway, might the renewable sector then be in prime position to absorb the oilies - which is i guess the opposite of what you propose might happen - helped of course with new US/Biden type clean energy legislation which favors the renewables. 

Or are my fears 'Western centric', and China/India real-politik will override the silly notions of the West, and its arrogant climate morality (and ironically shortsighted, because if global warming is a real thing then the solution imho is the use of tech to achieve carbon sequestration).

 

[Democorruptcy]

14 minutes ago, sancho panza said:

Indeed,hadn't thought about using a deflator.

Check this one,out,my last,I need to sdo some proper work.

Gonna be some big losses in the smoke with Tarquin trying to sell the pied a terre to someone who's stepped off the beach at Dover-

"Due to the small amount of data available for this graph...."

[Democorruptcy]

23 minutes ago, Cattle Prod said:

Tesla battery weighs ~ 500kg! I suppose I could get a pack of huskys to drag it up the driveway every night 

You aren't thinking ahead. We will all have a synth soon to do the daily chores etc. just add swapping the battery to their daily to do list. Exoskeletons have been around for years to enable people to carry heavy weights.

[JMD]

2 hours ago, The Idiocrat said:

Indeed. The council round here are putting charging points on some of the lamp posts. I can see them just putting them in the kerbs (from the nearest lamp post) in future. Would make for a nice public works programme.

I'm not an electrician, but would that kind of energy demand on street lighting circuits, even if using overnight trickle charging, work when there are 10's of millions of electric vehicles plugged in?