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

[JMD]

1 hour ago, sancho panza said:

 

Fascinating stuff CG,when you see it in black and white you really do wonder how many cold showers/cold cups of chai latte it'll take before extinction rebellion wind their necks in.

The reliance on fossilfuels is simply breath taking given all the nosie we hear about renewables and no diesel cars by 2030.

Besides Rockhopper are there any other small companies UK based in a similar position.

Obviously this is DYOR stuff,but I'm a great believer in running some riskier leveraged trades from profits that stem form the core portfolio.Once those divi's start flowing again in oil,it's going to be too late possibly.

I've had a butcher's at Rockhopper balance sheet and there's a huge intangibles tally but I presume that's the mineral rights without looking closely-which I will.

These are serious multibagger/go bust opportunities imho.

@JMD thanks for the heads up.If there are any more oil exploreco's with a decent shout of production you know of,can you psot them if you feel disposeed too.

Sorry SP, Rockhopper is the only one I'm aware of. I seem to remember their mining rights were substantial, both in duration and area, then again I think the company has been there for decades so not sure if that is a good or a bad thing, nor of their situation today... But in terms of raw high speculation potential, at its current price its got to be a 1000x surely!?! 

[Democorruptcy]

2 hours ago, Boon said:

Lots of property-related shares down sharply today. It must be the Brexit talks turning out pear-shaped, but I thought other sectors might have been worse hit. Is going out of the EU adverse for mortgages or something?

In the old days when the main news was Brexit, on days when it looked on and even a no deal was possible those sort of shares always had a bad day. I grouped them as 'more people shares', freedom of movement good for them, no deal would be bad. If you don't have as many people you don't need as many houses or mortgages. Plus from a banking point of view if we no deal and some people bugger back off to Europe they might be happy to say goodbye to their debts and leave them in the UK.

[sancho panza]

Whilst Holger's claim that there's correlation between M2 growth and CPI takes some chartist licence,the correlation between WTI and CPI looks compelling over last 20 years corresponding with growth in nominal oil prices as a component of CPI.

 

 

[DoINeedOne]

53 minutes ago, geordie_lurch said:

Yes I keep flip flopping on this myself but I just can't quite justify paying the prices locally even with the 'security' of a 10 year fix when I really feel we will see prices fall 30% from where they are now within 5 years due to everything that's gone on this year

 

39 minutes ago, sancho panza said:

We rent,same quandary,same conclusion.

In Leicester I think 30% off in nominal terms will be lucky.Average wages around here heavily subsidized by HMG.Losses in real terms could be eye watering but nothing compared to what's facing Londinium.

As the years go by I do wonder if I will ever buy a house, If I do it will be out of the London area or even abroad I'll be 40 next year and whilst I want value for my money i don't want a home as an investment just as a base to work from and enjoy as a project to improve and i can't bring myself to pay the prices that are around me 

One of my friends bought last year the joy of having a home he is buying and the plans he has for it are great trouble is he is working 7 days a week now just to try and get ahead which means he has no time for other things kids, family, learning , investing, hobbies, drinking etc.. the list goes on just work work work to try and get ahead to enjoy those things

 

[Noallegiance]

2 hours ago, sancho panza said:

We rent,same quandary,same conclusion.

In Leicester I think 30% off in nominal terms will be lucky.Average wages around here heavily subsidized by HMG.Losses in real terms could be eye watering but nothing compared to what's facing Londinium.

Hope you're right. We're in a commuter town on local wages.

Please let the housing market die horribly.

[Democorruptcy]

Will people want this vaccine or another lockdown next summer?

Quote

 

Excess savings of about £100bn built up by UK households during Covid-19 lockdowns are now being spent and could speed up Britain’s economic recovery, according to the Bank of England’s chief economist.

Andy Haldane told the Daily Mail there was “huge pent-up demand”, and that a big spending spree could help the economy bounce back more quickly than forecasters expected.

He said the UK savings ratio, which measures how much of disposal incomes is set aside, rose to 29% between April and June, compared with 6.8% in the same period last year. The ratio is more than twice as high as the previous record of 14.4%, set almost three decades ago.

Haldane said the surge in saving had not been evenly balanced across society. While many office workers have saved money by working from home, thousands of other people – especially younger workers and women – have lost their jobs in the hospitality and retail sectors.

“Nonetheless it did mean there is a pool of excess savings – excess because they weren’t planned,” he said. “As people’s incomes held up and spending was restrained, they have amassed around £100bn of excess savings.”

The Bank’s chief economist added: “People are using their involuntarily-accumulated savings on a new house or a new car. [But] plenty of that pent-up demand is still in the tank ... there are plenty of those savings still to be used.”

https://www.hl.co.uk/news/2020/12/7/uk-publics-100bn-covid-savings-could-help-recovery-says-haldane

 

 

[Noallegiance]

1 minute ago, Democorruptcy said:

Will people want this vaccine or another lockdown next summer?

 

Lol at that excerpt!

You see! People didn't save and distaster hit! Now we've saved we should spend it all!

Fuckin gimboid.

[Yadda yadda yadda]

Excess savings. Perhaps they should rename those supernormal savings, a bit like supernormal profits that accumulate due to monopolistic behaviour. Then they can tax them with windfall taxes. We've stopped you spending and thus need to take the money and spend it for you to benefit the economy.

[Chewing Grass]

Had a look at the total capacity of UK pumped storage as the huge tap has been running all day.

Basically if they were all full this morning you could run them for max 12 hours at 2/3rds full load.

Been at 2GW more or less since 9am today and its just starting to go dark, wonder how long they take to refill?

http://www.british-hydro.org/wp-content/uploads/2018/03/Pumped-Storage-report.pdf

[Hardhat]

21 hours ago, Chewing Grass said:

Very worthy of watching especially as it reaches a climax.

 

Thanks for posting this ... this channel is great. This one is pretty interesting to me as well, as a non-boomer:

 

[Loki]

And yet Drax down by 3.3% today 

[Democorruptcy]

56 minutes ago, Loki said:

And yet Drax down by 3.3% today 

It's in good company? Cough cough cough.....

[DurhamBorn]

1 hour ago, Loki said:

And yet Drax down by 3.3% today 

Up 150% since March,remember markets are not linear,they go where they are going in their own time.Market will keep shaking out people right through the cycle.

[Loki]

9 minutes ago, DurhamBorn said:

Up 150% since March,remember markets are not linear,they go where they are going in their own time.Market will keep shaking out people right through the cycle.

Yes absolutely, sorry should have said I just found it interesting that's all, wasn't panicking or whinging.  

 

SDF for example is up by 4% for no reason I can find out

[DoINeedOne]

Read this today quite an interesting read reminded me abit of the book Mr X interviews

Almost exactly 20 years ago an anonymous writer who called himself “Another” appeared on the biggest Gold discussion board the young internet knew at that time. He seemed to be an insider with deep knowledge of history, politics and economics. He would write for many years and had an heir, called “Friend of Another” who took the torch once Another himself “retired”. To this day we don't know who Another was, where he got his information and why he chose to share it with the world. But we do know one thing: Some (not all) of his sometimes outlandish predicdtions did turn out to be true.

The body of their work streches from the Bretton-Woods-Deal to the Nixon-Shock and the introduction of the Euro. It represents one of the most fascinating perspectives of the role of Gold in the current and future monetary systems. It also makes a compelling case for a much, much higher price of Gold.

https://ingoldwetrust.report/wp-content/uploads/2019/05/IGWT_2019_SPECIAL_Freegold_EN.pdf

[AWW]

6 hours ago, sancho panza said:

We rent,same quandary,same conclusion.

In Leicester I think 30% off in nominal terms will be lucky.Average wages around here heavily subsidized by HMG.Losses in real terms could be eye watering but nothing compared to what's facing Londinium.

We rent in London and are waiting to buy. It's not so much wanting to time the market, but not wanting to buy when you get ten minutes to look round a place and have to submit a sealed bid. Why people put up with this, I don't know.

Prices would have to drop 40% round us to make me a cash buyer of somewhere I actually want to live. Even then there's a big question mark about committing to London. Feels a bit like committing to Rome in the late fifth century.

[leonardratso]

der return key is kapputen

[Noallegiance]

On another subject, Mrs N got a text just now from UK Power Networks saying there's an unexpected power cut affecting 33% properties in our area.

 

We're fine at the mo, but the wind ain't gonna blow for another 3 days...

[Bobthebuilder]

Dash for assets?

https://www.bbc.co.uk/news/entertainment-arts-55213529

I am only half joking.

"The sale of song catalogues has become a booming business during the Covid-19 pandemic, with investors seeing music as a relatively stable asset in an otherwise turbulent market. The likes of Blondie, Barry Manilow and the estates of John Lennon and Kurt Cobain have all sold the rights to their music in recent years."

[Boon]

1 hour ago, AWW said:

We rent in London and are waiting to buy. It's not so much wanting to time the market, but not wanting to buy when you get ten minutes to look round a place and have to submit a sealed bid. Why people put up with this, I don't know.

Prices would have to drop 40% round us to make me a cash buyer of somewhere I actually want to live. Even then there's a big question mark about committing to London. Feels a bit like committing to Rome in the late fifth century.

I am the same, renting in London. Have the money to buy something modest but it just seems crazy to commit your life away to something that I believe will depreciate against other assets.

Lockdown has meant that we don't actually need to stay in London, but somewhere with fast trains in might do. I thought I would start to look once prices went down around 20% from the start of this year - don't think I'm asking much considering the very high levels. But it's actually gone the other way, with stamp duty holiday and furlough. Maybe next year...

At some point I doubt whether it'll happen and whether I would be best just moving to some ultra-cheap parts and riding it out.

If I were Sunak it is just seems so simple. House prices shouldn't be political but they have become so as so much of the average persons wealth is tied up in them. They should allow the markets to dip a little bit while the pandemic can be blamed, maybe 15% would be enough to not unsettle people. 

Then use the taps to generate 1-2% house price growth for the rest of the decade. Most of the plebs will be happy as they have no concept of the difference between nominal and real and will just be happy to see their asset 'increasing in value'.

[Bobthebuilder]

2 minutes ago, Boon said:

I am the same, renting in London. Have the money to buy something modest but it just seems crazy to commit your life away to something that I believe will depreciate against other assets.

I never look at my home as an investment, just four walls with a roof on that I can eat, sleep and sh#t in. I consider the money I spent on it gone.

It's a mighty decision for a first time buyer at the moment, not sure I could commit if I was younger.

[Bricks & Mortar]

9 hours ago, Boon said:

Lots of property-related shares down sharply today. It must be the Brexit talks turning out pear-shaped, but I thought other sectors might have been worse hit. Is going out of the EU adverse for mortgages or something?

DH recent tweet drew attention to rising bond yields and the effect that has on housebuilders.  I guess it's not good for other business that depend on debt either.  (a debt deflation catalyst?)
 

 

[DurhamBorn]

@Cattle Prod Drax has been running at 100% all week and their pumped storage as well.Gosh i love leads and lags.Im trying to use those skills on betting on the xmas number 1.My cross market says Ariande Grande has a sneak at 20/1 ,that is really not advice 

[Loki]

3 minutes ago, DurhamBorn said:

My cross market says Ariande Grande has a sneak at 20/1

Where's the PPT (Pop protection team) when you need them

[MrXxxx]

23 hours ago, AWW said:

Anyone know why my HL balance is up £600 since yesterday evening? There are only European and US/Canada equities in it.

Our glorious chancellor Rishi has taken over your account management?.......not helpful I know but it tickled my sense of humour! :-) :-) :-)