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

[belfastchild]

Went out early today, came back to see Centrica down 10%
Sold half of my holding yesterday (up 70% IIRC, sorry folks for bringing that up ;-)) Sold drax completely a couple of weeks ago when this sort of stuff was being hinted at. Was tempted yesterday to dump a lot of shell and bp as well. Ah well.

When they say they are looking at windfall tax on electricity producers I wonder if they will include people like me in that they will start taxing my solar rocs and export. Its been tax free up to now (although Ive not heard anything like the price rises for rocs and export compared to incoming price rises).
I get paid 4p a unit export whereas next door pay close to 30p to use it.

Of course, will wait to see what they actually do rather than what they are looking at. Good job I dont run these companies I'd be flicking switches off left, right and centre. Sorry storm damage you say? Cant get the parts mate, can you wait six months?

[M S E Refugee]

US may waive smog rules to tame gasoline prices https://www.rt.com/business/555997-us-environmental-rules-gasoline-prices/

I think they are in beaucoup trouble!

[kibuc]

Cassiar Gold's $C10mil placement announced in March apparently fell flat on its face as today they are ammending it, dropping the price from C$1.50 to C$1.00. Not massively surprising, given the current share price of C$0.77 and the overall sector sentiment. Recent drill @ South probably didn't help either.

Meanwhile, GR Silver Mining, still living on borrowed time, follows up on it's mamooth 24m @ 1kg Ag from late April with 6.5m @ 1.5kg Ag today. Not bad at all.

[DurhamBorn]

45 minutes ago, Yadda yadda yadda said:

A lot are in some way or another. Some are just saving less, some have stopped paying bills. Others are spending less - probably the worst for the economy as retailers, pubs and restaurants will shut.

I think most might shut.I was in a coastal town,every business wanted staff,but they cant compete with £400 a week bennies.The system was set up for dis-inflation by Brown,we now have rampant inflation.

I noticed today our telcos are starting to deliver,the shrewd are waking up to who stays standing as the economy is hollowed out.The government is making huge errors in almost every area.

[JMD]

2 hours ago, Chewing Grass said:

Speaking of Windfall taxes this was the verdict on 1981.

In 1981 Margaret Thatcher levied a 2.5pc windfall tax on banks who were making vast profits on their loans, after interest rates hit 17pc, while paying out little or nothing in interest to savers. It raised around £400m, or £3bn in today’s money, according to the Institute for Government think tank. 

The government of the day, which was facing record levels of inflation and vast public debt, much like now, also levied a supplementary petroleum duty on oil companies which were seen to be profiting from higher commodity prices. 

History repeating itself, and the government has shit its pants through gorging itself on cheap money which didn't exist in the 1970s.

Yes, I also think History is rhyming here.  ...I'm reminded that Thatcher was not really a conservative but more a classic liberal. Johnson is also not a conservative. Given time, he might similarly surprise us - ie Thatcher was initially seen as a failure until she garnered her fiercely loyal lieutenants. Plus the real danger here I think is who might probably replace him. ...Ultimately, the MSM all hate Johnson, so given the typical MSM appalling lack of judgment and foresight on most topics, I guess on balance a Johnson premiership must - for now at least - be a good thing.

[Yadda yadda yadda]

21 minutes ago, DurhamBorn said:

I think most might shut.I was in a coastal town,every business wanted staff,but they cant compete with £400 a week bennies.The system was set up for dis-inflation by Brown,we now have rampant inflation.

I noticed today our telcos are starting to deliver,the shrewd are waking up to who stays standing as the economy is hollowed out.The government is making huge errors in almost every area.

The other day I saw an add for £15-17 per hour for a cocktail waiter in South London! 45 hours per week.

[JMD]

2 hours ago, feed said:

Majority is gone sure. But 

 

Which is why they’ll not go (directly) after pensions or property and why we’ll see modest (nominal) increases in property prices.  And of course, they saved all the oldies from covid. 

They’re idiots on the macro, but genius when it comes to getting people to vote against their own self interest.  
 

Really interesting how that chart shows how only the labour and conservative voting demographic changes significantly with age band. If political principles change with age, are they really principles in the first place?                                                                                                        (I know its mostly the result of manipulative politicians 'successfully' appealing to the base tribal fears of voters, as responsibilities and life perspectives change with age, etc, but that's going off topic so I'll shut up)

[DurhamBorn]

7 minutes ago, Yadda yadda yadda said:

The other day I saw an add for £15-17 per hour for a cocktail waiter in South London! 45 hours per week.

The economy is trying to price discover in all areas,but the government is stopping it by trying to stop anyone on the state tit losing anything.Its a disaster to do that,but they dont seem to understand it.Of course up until now it was more hidden as monetising debt was how they did it,so still taking spending power from the productive,but most dont understand that.Now QE is finished they have to tax to spend more,and it seems they are deciding to just take saved capital direct now.Windfall taxes are just nationalisation without having to even pay for our shares.

[Chewing Grass]

1 minute ago, DurhamBorn said:

Windfall taxes are just nationalisation without having to even pay for our shares.

They will drive the share price into the ground before they do that, my sis lost 100K worth of RBS shares from 25 years in their sharesave scheme in the click of two fingers.

[Yadda yadda yadda]

Here is the £15+ per hour bar job. Obviously a bit of skill required to mix cocktails and late nights Friday and Saturday. You get a cab home and keep the tips. Nowhere near central London. I wonder what they're earning there? Costa coffee was offering over £10 per hour before Christmas so it is a fair argument that this is the correct value for the role.

[Nomad]

29 minutes ago, DurhamBorn said:

The economy is trying to price discover in all areas,but the government is stopping it by trying to stop anyone on the state tit losing anything.Its a disaster to do that,but they dont seem to understand it.Of course up until now it was more hidden as monetising debt was how they did it,so still taking spending power from the productive,but most dont understand that.Now QE is finished they have to tax to spend more,and it seems they are deciding to just take saved capital direct now.Windfall taxes are just nationalisation without having to even pay for our shares.

I think we are at a crossroads and the government have the opportunity to make the right decision and back the producers (i.e. labour), I can't quite believe they don't understand the basic economic principles, or are they just too scared. If they go down the route of giving the non working inflation rises, labour will stop producing, we are already seeing it as employers are finding it difficult to recruit. I don't understand why they don't understand.

[Chewing Grass]

1 hour ago, M S E Refugee said:

US may waive smog rules to tame gasoline prices https://www.rt.com/business/555997-us-environmental-rules-gasoline-prices/

I think they are in beaucoup trouble!

We have been here before...

The dirty Republicans did the same thing 16 years ago.

[M S E Refugee]

Oil giant raises green transition doubts https://www.rt.com/business/555998-saudi-aramco-green-transition-doubts/

[Yadda yadda yadda]

17 minutes ago, Nomad said:

I think we are at a crossroads and the government have the opportunity to make the right decision and back the producers (i.e. labour), I can't quite believe they don't understand the basic economic principles, or are they just too scared. If they go down the route of giving the non working inflation rises, labour will stop producing, we are already seeing it as employers are finding it difficult to recruit. I don't understand why they don't understand.

If that happens the market should force wages higher. Push factor for more inflation.

[WICAO]

25 minutes ago, Yadda yadda yadda said:

Here is the £15+ per hour bar job. Obviously a bit of skill required to mix cocktails and late nights Friday and Saturday. You get a cab home and keep the tips. Nowhere near central London. I wonder what they're earning there? Costa coffee was offering over £10 per hour before Christmas so it is a fair argument that this is the correct value for the role.

£15 per hour x 45 hours = £35,100 per annum

2 bedroom flat in what was once probably a quite nice house (if you want to live in Norwood) at £330,000.  That means tiny 2nd bedroom, bathroom you couldn't swing a cat in...  We're at 9.4 x earnings on that.

So work like an idiot to spend the rest of your life paying for a shit flat in a shit neighbourhood.  Those tips better be good...

Yeh, sounds like a great deal.

No thanks.

[M S E Refugee]

EU president accuses Russia of energy ‘blackmail’ https://www.rt.com/news/556008-russia-oil-gas-blackmail/

[Lightly Toasted]

47 minutes ago, Nomad said:

I think we are at a crossroads and the government have the opportunity to make the right decision and back the producers (i.e. labour), I can't quite believe they don't understand the basic economic principles, or are they just too scared. If they go down the route of giving the non working inflation rises, labour will stop producing, we are already seeing it as employers are finding it difficult to recruit. I don't understand why they don't understand.

They've never recovered from Theresa May's "Nasty Party" jibe, they daren't do anything that would make them look mean, even when "mean" is the only approach left.

 

[Pip321]

3 minutes ago, M S E Refugee said:

EU president accuses Russia of energy ‘blackmail’ https://www.rt.com/news/556008-russia-oil-gas-blackmail/

Thx....unfortunately I cant see RT news...clearly because it would influence me too much and fill my mind with communism. 

However, I assume the 'blackmail' is by manipulating the buying process and currency markets by insisting on roubles for energy rather than manipulating the buying process and currency markets by insisting on a third party currency eg dollars. 

Seemingly the vast majority just don't think this through and accept the western narrative, I saw something today and it suggested Russian manipulation when referring to currency markets....I mean whilst sanctions and boycotts are going on etc surely people can see the irony. Its like the risk of default....if you close your bank account and wont accept my cash, that isn't default its refusal to accept my payment. 

I think genuinely Putin just needs to wait for the West to get bored of the dying people and be more focused on Wimbledon, Simon Cowell or in the US Johnny Depp etc. Then the West might start thinking about the next step.

Politics has been a farce for decades....my only interest now is to perhaps have a sweepstake on whether Boris, Biden or Putin dies first. They all look fooked. 

[Yadda yadda yadda]

36 minutes ago, WICAO said:

£15 per hour x 45 hours = £35,100 per annum

2 bedroom flat in what was once probably a quite nice house (if you want to live in Norwood) at £330,000.  That means tiny 2nd bedroom, bathroom you couldn't swing a cat in...  We're at 9.4 x earnings on that.

So work like an idiot to spend the rest of your life paying for a shit flat in a shit neighbourhood.  Those tips better be good...

Yeh, sounds like a great deal.

No thanks.

The point is the wage spiral not whether you could attain your lifestyle on the wage.

I've never been a cocktail bar tender but I suspect buying a home has never been the norm. £35-40k plus tips and a meal five days per week is not bad for bar work. The fact that the wage is the biggest text on the advert demonstrates that it is the selling point. It is also a job that a 22 year old could do and is hardly working like an idiot as the job finishes at home time. No emails to check at home.

We're not going back to the working classes buying a home on one wage any time soon. Not in the UK. Supply is constrained and will remain so. In a crash interest rates will be higher, lending tougher and the monthly cost similar. Some people will take advantage, those with lots of cash.

[Democorruptcy]

4 hours ago, feed said:

Majority is gone sure. But 

 

Which is why they’ll not go (directly) after pensions or property and why we’ll see modest (nominal) increases in property prices.  And of course, they saved all the oldies from covid. 

They’re idiots on the macro, but genius when it comes to getting people to vote against their own self interest.  
 

% of only 42,000 people, youguv polls haven't proved very accurate in recent times. Founded by a Tory Nadim Zahawi.

Won't go after pensions? They scrapped the 'triple lock' last year. It was a temporary measure but we now how they turn out. I'm not convinced the oldies might think they were saved by government policy. A lot of the infected were chucked  into care homes. A lot were Mattazolamed. Average age died "with" covid was 80 last time I checked. 

[HousePriceMania]

 

 

WTF !!!

[Democorruptcy]

1 hour ago, WICAO said:

£15 per hour x 45 hours = £35,100 per annum

2 bedroom flat in what was once probably a quite nice house (if you want to live in Norwood) at £330,000.  That means tiny 2nd bedroom, bathroom you couldn't swing a cat in...  We're at 9.4 x earnings on that.

So work like an idiot to spend the rest of your life paying for a shit flat in a shit neighbourhood.  Those tips better be good...

Yeh, sounds like a great deal.

No thanks.

Single income is a bit yesterday?

2 x £35,100 = £70,200 x BoE's no more than 15% of mortgages over 4.5x income = £315,900 which is where the price comes from not 9.4x single income.

[feed]

12 minutes ago, Democorruptcy said:

% of only 42,000 people, youguv polls haven't proved very accurate in recent times. Founded by a Tory Nadim Zahawi.

Won't go after pensions? They scrapped the 'triple lock' last year. It was a temporary measure but we now how they turn out. I'm not convinced the oldies might think they were saved by government policy. A lot of the infected were chucked  into care homes. A lot were Mattazolamed. Average age died "with" covid was 80 last time I checked. 

https://www.mirror.co.uk/money/state-pension-hit-10465-next-26580448

The state pension is due to rise by more than seven per cent next year after the Chancellor confirmed the triple lock would be reinstated.

Rishi Sunak said the rise in April 2023 would be in line with the inflation rate in September this year, which is expected to be around 7.4 per cent, according to Bank of England forecasts.

Under the terms of the triple lock formula, the state pension must rise by the highest out of average earnings growth, 2.5% and inflation, but this year it was suspended due to skewed earnings growth during the pandemic.

If it had gone ahead, it would have brought a rise of more than 8% for pensioners battling a fast-rising cost of living crisis. Instead, it will rise by just 3.1% on April 11.

Mr Sunak forecast the increase on Monday, telling MPs the triple lock mechanism for determining annual pension rises would be restored until at least 2024.

Remind me, when is the election.  

MP Harriett Baldwin asked the Chancellor: "For pensioners this year, you're guaranteeing the triple lock again?"

Mr Sunak replied: "Yes." Asked what the Treasury was budgeting for the pension rise, he added: "It will be whatever the estimated Consumer Price Index is in September - seven-ish per cent."

 

 

[Loki]

3 minutes ago, HousePriceMania said:

 

 

WTF !!!

some gentle encouragement to sell up to the big investors (Insurance cos etc)?

[Democorruptcy]

3 minutes ago, feed said:

https://www.mirror.co.uk/money/state-pension-hit-10465-next-26580448

The state pension is due to rise by more than seven per cent next year after the Chancellor confirmed the triple lock would be reinstated.

Rishi Sunak said the rise in April 2023 would be in line with the inflation rate in September this year, which is expected to be around 7.4 per cent, according to Bank of England forecasts.

Under the terms of the triple lock formula, the state pension must rise by the highest out of average earnings growth, 2.5% and inflation, but this year it was suspended due to skewed earnings growth during the pandemic.

If it had gone ahead, it would have brought a rise of more than 8% for pensioners battling a fast-rising cost of living crisis. Instead, it will rise by just 3.1% on April 11.

Mr Sunak forecast the increase on Monday, telling MPs the triple lock mechanism for determining annual pension rises would be restored until at least 2024.

Remind me, when is the election.  

MP Harriett Baldwin asked the Chancellor: "For pensioners this year, you're guaranteeing the triple lock again?"

Mr Sunak replied: "Yes." Asked what the Treasury was budgeting for the pension rise, he added: "It will be whatever the estimated Consumer Price Index is in September - seven-ish per cent."

 

 

That article is from March softening them up just before they got the below inflation rise in April. There could still be time for a U turn on it. It depends how much they are prepare to thieve from others to pay for it.