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

[Bobthebuilder]

1 minute ago, MrXxxx said:

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

HMRC tax relief payment I expect.

[Democorruptcy]

Re Drax it's recently hit the same price as that in a rumoured takeover last June

Quote

 

Shares of North Yorkshire-based power company Drax Group have soared almost 20% so far this week on speculation that it could be a takeover target.

The firm declined to comment on weekend reports that it was being lined up for a deal by an unnamed energy group.

The reports claimed talks are taking place on a potential 340p-a-share deal that would value Drax at around £1.35 billion.

Drax shares, which closed around 223p on Friday, have since risen 19% to 267p.

https://northernfinancialreview.com/2020/06/30/drax-shares-up-20-on-takeover-speculation/

 

 

 

[Transistor Man]

4 hours ago, Chewing Grass said:

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

I think Dinorwig can refill in 6 hours. Overnight. 

[MrXxxx]

10 hours ago, Cattle Prod said:

Arg are still making claim to the islands, so that includes the oil, but they are still a self governing British overseas territory defended by Typhoons and a Type 42 destroyer! I don't think it makes much difference apart from making operations more expensive, as you can't use South American ports. The sensible thing to do would be for Arg national oil company farm into the project, but that would be a tacit acknowledgement of FI independence I suppose. It would be developed with FPSOs (floating production storage and offloading) units, as you see in places in the North Sea or Brazil, and shuttle tankers would come to pick the oil up and ship it to market. It's not particularly difficult engineering wise, just a bit more expensive due to logistics, having to ship everything in from the UK/South Africa.

This is what I like about this place...someone asks a question that I didn't realise I was interested in, and then along comes an expert that then gives me the answer that I didn't realise I needed to know, but am now glad I am informed! :-)

[DurhamBorn]

16 minutes ago, Democorruptcy said:

Re Drax it's recently hit the same price as that in a rumoured takeover last June

 

 

I cant quite believe some of the prices going back in March.Incredible really.Other stand outs were William Hill and Playtech,Hills offloaded and Playtech top sliced.

I think Drax is probably fairly valued around £3.70,but it has some nice options around expanding pumped storage and maybe burning hydrogen later in the cycle.Much riskier than many of course,but happy to hold now for the cycle.

[sleepwello'nights]

9 hours ago, sancho panza said:

 

Near us there are fields of half built houses with £400k/500k off plan price tags.

When the furlough ends-and it will- and when the £15,000 per household increase in govt debt for this year becomes clear,we could see the beginning of the end in the property insanity.

 

House prices depend on availability of finance. I wouldn't be surprised to see mortgages provided by the government. There is no reason why they can't just use the endless supply available through Modern Monetary Theory (MMT).

[Noallegiance]

9 minutes ago, sleepwello'nights said:

House prices depend on availability of finance. I wouldn't be surprised to see mortgages provided by the government. There is no reason why they can't just use the endless supply available through Modern Monetary Theory (MMT).

That would be incredible, but not unbelievable.

[sleepwello'nights]

1 hour ago, Cattle Prod said:

Thread way ahead again:

 

 

National Grid share price 15% down against last January! and have been falling the last few weeks.

[wherebee]

9 hours 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

 

You can hold both opinions: houses are massively overpriced and now is a good time to buy, if you believe inflation is coming and you can fix for 10 years.

My dad bought a huge mansion in the 1970's for about 30k.  It was right at the edge of his borrowing.  When he sold it in the mid 90's it was worth over a million.  Due to wage and other inflation, that 30k looked like pennies at the end.

We've had a long period with no wage inflation for most workers.  That's why houses were a gamble, in my view, as the debt was a millstone and if you missed two payments it would sink you.

If inflation comes roaring back, a house overpriced by 20% now  - to take the above example - would be only 36k debt against 30k debt.  Nothing, if you wages double over 10 years.

[AWW]

2 hours ago, Boon said:

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...

My thoughts now are that if London hasn't started a very obvious correction by next summer, then it never will.

[Wheeler]

1 hour ago, sleepwello'nights said:

House prices depend on availability of finance. I wouldn't be surprised to see mortgages provided by the government. There is no reason why they can't just use the endless supply available through Modern Monetary Theory (MMT).

Modern Mortgage Theory!

[HousePriceMania]

15 minutes ago, AWW said:

My thoughts now are that if London hasn't started a very obvious correction by next summer, then it never will.

If only someone outside of the MsM, rightmove and the bankers produced an index that people could trust and that showed london prices falling.... 

 

 

But at least the lower interest rates will save it. 

 

 

 

Good luck, 2021 is going to be very interesting, but you should all keep one eye on UK property lion. 

 

 

[Bandit Banzai]

Can anyone really see wage inflation anytime soon? What with globalisation and all that?

My parent's generation had thier debt wiped out by wage inflation (try getting them to acknowledge it, mind). But I can't see how it can ever come back today. I suppose if sterling collapsed then maybe?

[Hunty]

~18 Trillion of US

M3 sitting in at 0.25% interest rates.

10 year notes at ~1.00 %

The uninvested M3 is going to move into risk; when January 2020 rolls around.

Like it or not.

This inflation will lift institutional asset prices.

It's unlikely, it will NOT lift wages!

[Talking Monkey]

35 minutes ago, Bandit Banzai said:

Can anyone really see wage inflation anytime soon? What with globalisation and all that?

My parent's generation had thier debt wiped out by wage inflation (try getting them to acknowledge it, mind). But I can't see how it can ever come back today. I suppose if sterling collapsed then maybe?

I really can't see huge wage inflation, yes it will drift up but I can't see how wages will keep up with general inflation, technology and globalisation will surely mean labour's bargaining power is very weak. Automation and tech are taking out loads of jobs

[Rave]

16 hours ago, sancho panza said:

 

@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.

Have I read this right...you're looking for a risky punt?

I've had a few BPC ever since I sold my RM shares a couple of months after the float for a 40% profit and had it burning a hole in my ISA account.

https://www.lse.co.uk/SharePrice.asp?shareprice=BPC&share=Bahamas-Petrol

In those 7 years or whatever it is they've tried and failed to farm out to a major oil company; now they've issued a load of new shares and raised some other expensive money, and managed to hire themselves a top drawer drill ship at a relatively bargain day rate. As I type it's two-thirds of the way across the Atlantic, due to arrive in Freeport in a week, then after loading up supplies it should be spudding the well some time shortly before Christmas Day. 

They're hoping to find 700mn barrels of oil; if they do the price should really ten bag. There's apparently a 25% chance they will, which makes it a value bet as far as I'm concerned. The chat on the LSE page, which obviously is not to be relied upon, is that there's a last ditch legal attempt by environmentalists to block the drill, and Greenpeace may or may not be thinking of trying to disrupt them with the Rainbow Warrior. Anyway for whatever reason the share price is not rising even though the well spud should be imminent.

I've doubled down on them a couple of times and my average is about 2.4p. Current share price is about 2.6, but over the years at various points I've been 200% up and 70% down!! It's literally shit or bust now, with no farm in they retain a 100% interest in the well, so any strike means SP should multiply, and if the well's a duster it'll completely tank, probably to 0.25-0.5p...they have a few little wells in Trinidad acquired when they merged with CERP, and a few other licences, but it ain't much.

[wherebee]

4 hours ago, Talking Monkey said:

I really can't see huge wage inflation, yes it will drift up but I can't see how wages will keep up with general inflation, technology and globalisation will surely mean labour's bargaining power is very weak. Automation and tech are taking out loads of jobs

If you don't have wage inflation, the west collapses.  end of story.  The powers that be HAVE to generate wage inflation - or more accurately income inflation, might be via helicopter money - or they lose everything.

 

Just my view, mind.

[geordie_lurch]

2 hours ago, wherebee said:

If you don't have wage inflation, the west collapses.  end of story.  The powers that be HAVE to generate wage inflation - or more accurately income inflation, might be via helicopter money - or they lose everything.

Or the current monetary system collapses and we all get moved over to the new Central Bank digital coins with X amount of your debt wiped out to bribe the plebs to use their new fully trackable 'money'?

[Noallegiance]

 

Calling for Fed tightening after BK.

Is that the bit where they start to chase rates higher?

[DoINeedOne]

13 hours ago, Bobthebuilder said:

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."

There’s a interesting company on the London stock exchange who have been buying up lots of song catalogues 

https://www.hipgnosissongs.com

Ticker SONG

Its one I still want to research pays around a 4% dividend 

but looks interesting 

[Noallegiance]

Hydrogen power: Firms join forces in bid to lower costs

https://www.bbc.co.uk/news/business-55218573

 

[wherebee]

33 minutes ago, DoINeedOne said:

There’s a interesting company on the London stock exchange who have been buying up lots of song catalogues 

https://www.hipgnosissongs.com

Ticker SONG

Its one I still want to research pays around a 4% dividend 

but looks interesting 

I don't see how songs make money in a future with digital piracy ever wider and faster?

 

My kids haven't bought a record in years and years.  It's all free streaming radio and youtube?

[Harley]

On 31/08/2019 at 09:35, Democorruptcy said:

In t'other thread someone posted a link to a making the most of reflation pdf

That's got Telco's, Utilities, Transport all Negative?

Just a re-post from page 2! 

PS:  Not so sure atm but a reminder of more normal times?

[M S E Refugee]

For any anybody that owns RMG, last night was the busiest I have seen it for at least 15 years for Christmas Cards.

They have been steadily dropping off for years, it looks as if sending Christmas Cards has made a comeback due to Coronavirus.

[Harley]

Anyone gone back to look at their own (and others) posts on this and the preceding thread (part 1) in their perennial search for self improvement?  The good, the bad, the ugly.  Noticed I was talking a lot about out there stuff way back (regulation, meaning of money, coming reset, stores of value) that is all centre stage now in our viral wonderland.  And boy, haven't we been talking about reflation stocks (e.g. energy for a while)!  Buying some of the talked about reflation stocks back in say 2019 would have given you a white knuckled ride early this year but many have pulled back well.  Like we've already had the shake out in some sectors/stocks.