Credit deflation and the reflation cycle to come (part 3)

[Pip321]

52 minutes ago, ThoughtCriminal said:

I often get the crazy idea of buying farmland in North Yorkshire too.

 

When I find myself on Rightmove laughing hysterically at the prices, I find that the remedy is to look at the price of land on the continent. I soon realise I'm being a fucking idiot and punch myself in the face.

 

Here's a 27 acre farm, with 5 bed farmhouse, multiple outbuildings, 6 acres of forest, private lake in Skelleftea Sweden. Price? 78k of your English pounds.

https://www.4321property.com/sweden/ad921243/?Rental=Buy-Sell&Country=sweden&type=houses&beds=5&maxprice=200000&minprice=0&a1=Vaesterbotten&a2=Skelleftea Kommun&a3=&a4=&cn=Skelleftea&s8=

That'll get me around 3-4 acres in North Yorkshire. Complete with 50% clawback clause if planning achieved in next 50 years.

 

Each to their own, but I know which makes more sense.

I agree. Anything with a farm on it in North Yorkshire is balmy.

This was what I found to show ‘slightly better’ value. Please note though…I do agree and there were many more examples showing massive prices particularly on smaller farms….but also on big farmland plots too.
 

Derelict barn, 54 acres dodgy land £190k

https://www.rightmove.co.uk/properties/86282042#/?channel=COM_BUY

100 acres £435k (split into lots and I assume the crapper land is cheapest) 

https://www.rightmove.co.uk/properties/78578382#/?channel=COM_BUY

I will hide in a field and wait for a farmer to sell cheap….I might be a while😂

In the meantime (back in the real world) I am watching this volatile day to buy a couple of ladders on shares. 👍

[Harley]

OK, maybe a bit of licence (I don't know or need to care) but this helped open up my Overton window to the wider possibilities....

Doesn't change what I do, just makes me try to do it better! 

[Option5]

17 hours ago, snaga said:

Sunak warns of a tough few months .... so what's going to happen in a few months? a very tough few more months? then a few years? The tough times are here until wages catch up, which may be never. I really think we're being led by people that don't understand inflation. For years they misrepresented falling inflation as falling prices, rather than a reduction in rate of increase. Now they are doing the reverse?

Rishi Sunak warns of tough few months as inflation soars - BBC News

In fairness to Rishi, nowhere in that statement does he say that the months will be consecutive.

They could be:-

May 2022

January 2023

November 2023

Ad infinitum

 

[ThoughtCriminal]

5 minutes ago, Pip321 said:

I agree. Anything with a farm on it in North Yorkshire is balmy.

This was what I found to show ‘slightly better’ value. Please note though…I do agree and there were many more examples showing massive prices particularly on smaller farms….but also on big farmland plots too.
 

Derelict barn, 54 acres dodgy land £190k

https://www.rightmove.co.uk/properties/86282042#/?channel=COM_BUY

100 acres £435k (split into lots and I assume the crapper land is cheapest) 

https://www.rightmove.co.uk/properties/78578382#/?channel=COM_BUY

I will hide in a field and wait for a farmer to sell cheap….I might be a while😂

In the meantime (back in the real world) I am watching this volatile day to buy a couple of ladders on shares. 👍

Yeah, that one in arkengarthdale has been up for well over a year. Shit access, hilly and needs a bloody fortune spending on it.

 

Not knocking you as I sometimes think it myself, but the idea that that's a more reasonable price just shows you how nuts things are.

[DurhamBorn]

47 minutes ago, geordie_lurch said:

Don't think anyone has mentioned this yet... that is $1.9 trillion and a $140 billion jump in one day - yesterday

It's hard to get a handle on how big a trillion actually is but as someone else on Twitter helpfully explained: if each second counts as one:

• One million is 11 days
• One billion is 31 years
• One trillion is 31 thousand years

This is the key focus of the Fed,getting that out into the economy,if they fail they will go back to monetizing government debt instead.

[Harley]

Sanctions, so it's in red! 

[WICAO]

2 hours ago, Cattle Prod said:

Interesting, thank you. What time period does that back test cover/how far back does it go?

1871

[geordie_lurch]

31 minutes ago, DurhamBorn said:

This is the key focus of the Fed,getting that out into the economy,if they fail they will go back to monetizing government debt instead.

Yes and all I remember about Repo rates was that there was some sort of crisis in September 2019 and then Covid appeared a few months later The following is from May 2021 just 12 months ago but yesterday the figure is nearly double at nearly  $2 Trillion

EDIT An explanation of the Repo market (and Reverse Repo) with some details on the September 2019 Repo crisis here: https://www.thelondonfinancial.com/markets/reverse-repo-and-the-collateral-crisis to help those who are easily confused like myself

REPO

"Since around September, 2019, the US Federal Reserve has been heavily and directly involved in the repo market – for the first time to this extent since the financial crisis. This was due to a severe ‘cash crunch’ at the time that caused repo rates to soar upwards of 10% (i.e. banks would not part with cash for lower than this rate). The Fed intervened with a view to reduce friction in markets, not unlike oiling a machine, before exiting out again through the first half of 2020. Of course, we all know now what was to come during this period. The shock to the economy caused by Covid-19 forced the Fed’s hand and meant there was no way they could withdraw from the repo market without causing markets to grind to a halt. What started as a $50-60 billion operation in 2019 was ramped up dramatically with the announcement of a 3-month injection of $500 billion in March 2020. The following day, the Fed reinforced their position and announced they would inject a further $1 trillion over 3-month and 1-month operations, stating they would be prepared to offer up to $1 trillion per week going forward."

Reverse Repo

"At this point it is important to note that the Fed also offers what is known as a ‘reverse repo’ via their Reverse Repo (RRP) facility. This uses the same mechanism as a repo, but rather than the Fed buying Treasury securities (T-bills), they instead exchange those same securities and receive cash on their balance sheet – purchasing them back the next day. The key difference between the two types of operations are that, while repo operations add liquidity to the financial system by providing institutions with cash, reverse repo operations instead remove liquidity from the system. According to the Fed’s own rules on repo market operations, “overnight operations cannot go over $500 billion in lending”. However, as mentioned at the start of the article, this figure has almost doubled with the recent surge in overnight reverse repo operations. So what has caused this increase and what are the potential ramifications?"

[BadAlchemy]

2 minutes ago, DurhamBorn said:

This is the key focus of the Fed,getting that out into the economy,if they fail they will go back to monetizing government debt instead.

DB, if the RRP figure is going up does that mean commercial banks are still not yet lending it out into the economy, or could they be doing that but the RRP figure is going up anyway because it is being replenished by Fed doing further TOMO / Temp open market operations (!?)

[kibuc]

15 hours ago, HousePriceMania said:

 

Very true

[Harley]

4 minutes ago, WICAO said:

1871

Ah, I remember it well, the Great Chicago Fire and opening of the splendid Royal Albert Hall.

[WICAO]

3 minutes ago, Cattle Prod said:

Great - a pointer to that dataset would be much appreciated

This was the tool I was using - https://ficalc.app/.  This explains the data used https://guide.ficalc.app/configuration/historical-data/

I believe a lot of Shiller's raw data is here - http://www.econ.yale.edu/~shiller/data.htm

[Harley]

Maybe IBTL and TLT are bouncing around because of this....

Despite the words, we live in an evolving looking glass world so it could go either way.

PS:  It's not "attempting" a breakout.  It has.  Now we need to see if it retraces and bounces off prior resistance to confirm.

[belfastchild]

9 hours ago, JMD said:

 Does anyone on the thread know about these batteries (they differ from an EV battery), the commods they require, and the likely manufacturers that will build them? If the entire EU population is mandated to use this tech it would be great to know more about it/how to invest in it.

Be careful of your definition of battery, what they actually mean are ESS energy storage systems, one part of which are 'batteries' as we know them.
My house battery is based on pylontech batteries which are rack mounted capable. They are already used in the manner you described (co-located with local transformer to smooth out supplies).

These batteries are different chemistry to the EV ones as they are designed for longevity and really one cycle per day rather than output and ability to fast charge (why I think anyone buying an EV and expecting it to be half decent after about 8 years is mad - but I digress).

What is interesting is the development of other ESS systems. Ive signed an NDA on one but roughly its a really old technology being adapted for this type of thing, it might not work but if it does it will be something that will be easily serviceable by a local tradesman.
Other things are/were being trialled and I sort of did one of them myself. I went to a series of talks on this and one of them was just using compressed air. Lossy as hell but got round the problem of overloading the local network and then delivering a IIRC 30% of the days output at evening peak (all thats really required). The problem with any of that is heat and noise as losses so other groups were looking at ways of capturing and using the heat. Of course then you have the problem of noise close to where you need the heat, but it shows lots of places are looking at it.
The great thing about that one is most people have some version of the tech in their house/car and it can be made locally out of cheap(well previously cheap) or recycled materials, with some welding and electrical knowledge.
I now charge my two garage compressors up on sunny days if I see a change in the weather and so Im not now limited to working in the garage when its too hot, yes there is some loss and leakage but its more about time shifting the energy.
People tend to narrow in on the lossy nature of all these, admitted old techs (steam engines were talked about as well) but when you have renewables you will have massive amounts of excess energy at times if you plan to cover the lull periods, so right now the infrastructure needs built and then concentrate on the losses.

Could easily see local pumped storage with tanks, large compressed air tanks, back to electric milkfloats locally (use larger diesel vehicles to deliver to local storage places kept cool with the losses etc).

[Hardhat]

1 hour ago, BadAlchemy said:

Small (5 acre) land ownership worked great for us for years... until suddenly it didn't! Beware an asset turning into a massive fucking liability, overnight.

What's the story there ? 

[belfastchild]

15 hours ago, Cosmic said:

Can't you just, you know, turn them off? Or just stop feeding if the voltage increases past X.

Thats the way it works but some devices are more sensitive to overvoltage than the DNO. Couple of burglar alarms went off, RCD tripped and microwave a couple of doors up packed in.

[Transistor Man]

10 hours ago, JMD said:

Yes, I think Rick Rule (pretty certain it was him) said recently to invest in copper, plus the local-grid-battery (I don't know their technical name) manufacturers and the commods to make these type of batteries. He was dismissive of EV batteries because electric cars won't sell in huge numbers, but unfortunately didn't elaborate much on the local grid batteries. The problem you cite is apparently solved by using such a type of shared local battery system.                                                                                                                                                  Does anyone on the thread know about these batteries (they differ from an EV battery), the commods they require, and the likely manufacturers that will build them? If the entire EU population is mandated to use this tech it would be great to know more about it/how to invest in it.

There has to be an opportunity for flywheel energy storage here.

With the rotating inertia, they could be increase grid stability as well. 

I'm surprised it isn't getting anywhere.

[DurhamBorn]

40 minutes ago, BadAlchemy said:

DB, if the RRP figure is going up does that mean commercial banks are still not yet lending it out into the economy, or could they be doing that but the RRP figure is going up anyway because it is being replenished by Fed doing further TOMO / Temp open market operations (!?)

Could be or the other as you say,il look at the numbers later today to try to see.Its the Feds key focus i think to ensure enough is there to lend to fund onshoring.

[Plan-b]

46 minutes ago, Harley said:

Sanctions, so it's in red! 

[Harley]

Balance sheets, the Achilles Heel via a number of ways.  If you're not looking at them, and critically, you're not looking to the future.

Spoiler:  Most are FUBAR.

[M S E Refugee]

Russian exports can solve global food crisis – UN https://www.rt.com/business/555729-food-fertilizers-russia-food-crisis/

Reality is starting to sink in, I just hope there are enough Roubles to pay the Russians.

[BadAlchemy]

45 minutes ago, Hardhat said:

What's the story there ? 

I've removed this now. Too much info on a public forum...

[Yellow_Reduced_Sticker]

Good morning boys & girlies!

 

Hope YOU are all enjoying the... MELT-UP!

 

 

Best Regards,

 

SIR David Hunter.

 

 

[Democorruptcy]

8 minutes ago, Yellow_Reduced_Sticker said:

Good morning boys & girlies!

 

Hope YOU are all enjoying the... MELT-UP!

 

 

Best Regards,

 

SIR David Hunter.

 

 

Watch & learn, just means Uncle Dave will be setting his melt-up targets higher.

[sancho panza]

9 hours ago, Cattle Prod said:

So there is a lot of money on the sidelines. I can't see how the market is going to hurt the most people till that money is in. Blood on the streets today, bought a few SPX Dec calls for lottery ticket fun. Cheap as chips, too.

 

That said, in March 2000 there was clearly a lot of money out waiting for the dotcom to bust. The current stupidity hasn't fully capitulated yet.

 

I'm in the same camp ie I don't think we're at capitulation point.

Looks like the Big Tech top is definitely in.Sorry if it sounds like stating the obvious,but it's only viewable in the rear view and with newsflow imho confirming no higher high is on the table.If we are to get a melt up in the S&P a la DH or at the least a lower high (my view and the one that correlates with hsitory most closely),then it will have to run alongside a growth in energy sector as a proportion of teh S&P.

Looks like Dec 21 was the monthly top which I'll be running with for now.Means the clock is ticking.For me,the time to short/move to cash is as we move into lower high on the monthly Heiken Ashi hattip @Harley.If we don't get one then I'll jsut sit in what we've got-oilies,goldies,telecoms,baccy.

Worth noting that previously,in both 08 and 00,the Heiken Ashi showed a lower high before the collapse.I've watched things over the years and there are always some people calling to short every bad week for years.You'd go bankrupt well before your bets land.

I tend to find weeklies are noisy and prefer less bets over longer timeframes.

It's important to remember as well that the Fed sets the  cadence of any marekt rout there may be and the Fed still has some tools at it's disposal to try and fight the rout(and their recent playbook confirms they will at least try,) because quite simply the US stock market has a far greater effect on consumer spending than it's European counterparts.

Decl:All in all, we remain net long by some distance-oilies,goldies,telecoms,baccy in that order.Narrow breadth admittedly,but ones we can sit in if we miss the turn.