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

[Bricormortis]

1 hour ago, DurhamBorn said:

Il have a look at that,i like investment trusts.

Deleted

[Bobthebuilder]

Just now, Bricormortis said:

Cant see it on Hargreaves Lansdown.

https://www.hl.co.uk/shares/shares-search-results/m/murray-international-trust-ord-25p-share

[Harley]

1 minute ago, Bricormortis said:

Deleted

Murray's gone?  Oh no!  Not dear Murray.

[HousePriceMania]

1 hour ago, kibuc said:

Interesting news from Poland.

They've already had a rates increase in Oct from 0.1% to 0.5%, and today there was another one, this time all the way to 1.25%.

October inflation was measured at 6.8% yoy.

This is potentially a double whammy for the UK, if the Zlotty strengthens even more then the Polish workers in the UK who came for the money might not be so keen on seeing people back home having a much better time of it.

BoE's hands at some point are going to be tied and will have to act faster and harder than they would have had to, god knows how bad things will need to be for them to act, I still see them ignoring inflation at tomorrows meeting and delaying IR rises, it'll be 0.15% in December then -ve when house prices fall off a cliff.

[Bricormortis]

4 minutes ago, Bobthebuilder said:

https://www.hl.co.uk/shares/shares-search-results/m/murray-international-trust-ord-25p-share

Yeah just found it. 

[Harley]

6 minutes ago, Bobthebuilder said:

https://www.hl.co.uk/shares/shares-search-results/m/murray-international-trust-ord-25p-share

I can't find feck all on HL these days.  Maybe I'm just too adventurous!  But I was looking for a UK ETF yesterday and they only had the USD version.  Forex fees!  But they all like funds.

[Bobthebuilder]

3 minutes ago, Harley said:

I can't find feck all on HL these days.  Was looking for a UK ETF yesterday and they only had the USD version.  Forex fees!  But they all like funds.

I just use Google, HL normally comes up in the search results.

[Harley]

An interesting MoneyWeek article with some diverging (but reasonable) macro thoughts: 

 https://moneyweek.com/investments/bonds/604053/are-investors-doomed-bond-market-crash?refid=761834486AEFABF28739DF31D5D10640&utm_campaign=money-morning-newsletter&utm_medium=email&utm_source=newsletter

Charles Gave v Anatole Kaletssky, with a contribution from Fergie. 

[Presuming Ed]

4 hours ago, DoINeedOne said:

what the fuck is this shit

 

Merryn's right about Private Equity. It's really no wonder more firms are increasingly going private, where the lack of inane government meddling, regulatory oversight and pressure from shareholders to hit short-term quarterly earnings targets means that companies can go away and patiently build profitable businesses in peace and to a long-term strategic plan.   

I've been dabbling a bit in PE funds in my portfolio allocation dedicated to more 'growthy' punts (Harbourvest Global Private Equity mainly). They mostly trade on hefty discounts to NAV, which is a bonus as you're getting assets on the cheap - which also suggests they've not reached bubble territory and Joe Public hasn't piled in yet.

That said, I think they'll probably get whacked in a BK so I'll be selling out sharpish if Davey H's 'watch and learn' prophecies finally start materialising. 

 

 

 

 

[Presuming Ed]

1 hour ago, Bricormortis said:

Yeah just found it. 

Full list of holdings on pages 12-13 of the interim report:

https://www.abrdn.com/docs?documentId=GB-240821-155764-6

[Lightscribe]

Every. Listed. Company.

If that doesn’t signal that they are trying to hoover up all capital to funnel up to the big boys and end all smaller companies, I don’t know what does.

Costs, debt, taxes, WFH, inflation = carnage

https://www.telegraph.co.uk/politics/2021/11/02/uk-listed-companies-will-forced-publish-annual-plans-will-go/

UK listed companies will be forced to publish annual plans on how they will go green

Rishi Sunak to announce that firms will be legally obliged to produce ‘transition plans’ for becoming more green or risk financial penalties

Every company listed on the UK stock exchange will be legally obliged to produce annual plans for becoming more green or risk financial penalties, Rishi Sunak will announce on Wednesday.

The firms will have to produce regular “transition plans” for how they will help Britain reach net zero in carbon emissions by 2050 – a flagship Boris Johnson climate commitment.

The Financial Conduct Authority (FCA) would oversee the requirements, meaning if companies failed to publish such plans they could theoretically be fined or kicked off UK stock markets.

It means companies involved in the mining, drilling for oil, burning coal to produce power and other carbon intensive activities will have to prove they are planning to go green.

All financial institutions in Britain would also be bound by the new rules, meaning banks and pension funds will come under pressure to make eco-friendly investments.

‘More than $130 trillion of financial assets’

The new rules could come in as early as 2023, with a consultation being published and talks beginning with the FCA, who will have a key role in shaping any changes adopted.

Mr Sunak will be at the Cop26 UN climate conference to discuss plans to make the UK what the Treasury has dubbed “the world’s first net zero aligned financial centre”.

In a linked announcement, the Chancellor will also say that more than 450 firms from all parts of the financial industry have signed up to climate change goals.

It means more than $130 trillion of financial assets – some 40 per cent of the world total – will be controlled by financial services firms committed to reducing global warming.

Mr Sunak will talk about the progress made to “rewire the entire global financial system for net zero” in his speech to Cop26 in Glasgow on Wednesday.

The Prime Minister was newly optimistic in his comments over Cop26CREDIT: Christopher Furlong/Getty News

It comes after Boris Johnson struck a more upbeat tone about Cop26 progress on Tuesday, saying world leaders had scored a goal or two after his metaphor at the weekend of being 5-1 down in the contest against climate change.

But he also kept up the pressure as he left the summit, warning that targets could be “100 per cent pointless” if not followed up with action, and saying “economic catastrophe” awaited if global warming is not curbed.

There was also a blow to the Prime Minister’s hopes of limiting global warming to 1.5C as China, the world’s largest polluter, called for a less ambitious target of 2C.

The UK has vowed to become “net zero” in carbon emissions by 2050 and urged other countries to do likewise.

Scores of Western countries have also made the commitment, but developing, high-polluting countries have not gone that far, with China targeting 2060 and India picking 2070.

Hundreds of companies would be impacted by the new rules if adopted, with every UK financial institution and listed company being bound by them.

A Treasury press release said the companies would have to publish “net zero transition plans” but it remains unclear how much detail would be required.

It is expected such plans would need to involve “high-level targets” for becoming greener, “interim milestones” and “actionable steps” on delivery, according to the Treasury release.

The details will be worked out by a Transition Plan Taskforce made up of industry and academic leaders, regulators and civil society groups.

Environmental campaigners will watch closely to see the specifics of what is demanded, given past criticism of “greenwashing” – appearing to be more eco-friendly than is true.

The requirements are not expected to see each company promise to become net zero itself, but show how it is contributing to the UK’s push to hit the target to do so by 2050.

On Tuesday, Mr Johnson defended his net zero target, saying he believed the “great wisdom” of the British people meant they appreciated the importance of acting.

“If we don't do this, if we don't fix our climate it will be an economic catastrophe as well as an environmental catastrophe,” the Prime Minister said.

He added: “The only way to fix this is to reduce CO2 and tackle climate change.”

Mr Johnson’s message was aimed at both sceptical voters and Tory MPs who have questioned the economic hit of transitioning the UK economy away from carbon.

The Prime Minister also rejected a suggestion that a referendum should be held on his “net zero by 2050” target, arguing the country had experienced enough in the way of referendums in recent times.

[Animal Spirits]

On 02/11/2021 at 13:50, Cattle Prod said:

Check out this comment from a former Fed trader, replying to a chart posted by Lyn Alden further up thread. The pennies in my head are dropping faster now, this is a great explanation of how QE was different this time.

Here is the graph:

I pulled it up myself to check the time series - it's accurate to Q2 2021. My mind is a bit blown, my comments:

- QE is different this time, as @DurhamBorn and some of you other smarter people have been telling us, because the Treasury decided to direct the money to households.

- The spike is because this money is an addition to the system, not just moving money around

- The level hasn't dropped yet, though other graphs show that the stimmy money has been spent. Is that because it's just gone into someone elses account?

- It's almost a 3x increase since pre covid

- Janet Yellen is currently in charge of the Treasury, and the Democrats have 3 and a bit more years in term. They are not going to stop handing out money, as long as they can get the Fed to print it.

- This explains to me the clearout of the hawkish Fed members. Powell's term expires in February, and Biden is expected to announce his nominees in the next few weeks.

- I suspect that this is what PMs have been waiting for (as well as this weeks meetings). Gold front ran inflation pretty accurately last year.

A recession in the US where real disposable income per capita rose, although the inflation is eating into that now.

[Axeman123]

4 minutes ago, Lightscribe said:

The Prime Minister also rejected a suggestion that a referendum should be held on his “net zero by 2050” target, arguing the country had experienced enough in the way of referendums in recent times.

Yeah, cos he knows it would be 90:10 against this rubbish. Was this even hidden away in his manifesto, or is he just assuming the right to remake our economy and civil liberties without debate? Net zero is going to mean rationing of travel, energy consumption, and many types of food just for a start.

[HousePriceMania]

Token Taper from the criminal US bankers

 

 

 

By the time they get to Jun the wheels will have come off and it'll be +50Bn a week

[Animal Spirits]

https://www.federalreserve.gov/newsevents/pressreleases/monetary20211103a.htm

November 03, 2021 Federal Reserve issues FOMC statement

The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.

With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved in recent months, but the summer's rise in COVID-19 cases has slowed their recovery. Inflation is elevated, largely reflecting factors that are expected to be transitory. Supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to sizable price increases in some sectors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.

The path of the economy continues to depend on the course of the virus. Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation. Risks to the economic outlook remain.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation having run persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In light of the substantial further progress the economy has made toward the Committee's goals since last December, the Committee decided to begin reducing the monthly pace of its net asset purchases by $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities. Beginning later this month, the Committee will increase its holdings of Treasury securities by at least $70 billion per month and of agency mortgage‑backed securities by at least $35 billion per month. Beginning in December, the Committee will increase its holdings of Treasury securities by at least $60 billion per month and of agency mortgage-backed securities by at least $30 billion per month. The Committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook. The Federal Reserve's ongoing purchases and holdings of securities will continue to foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller.

[Bobthebuilder]

9 minutes ago, Axeman123 said:

Yeah, cos he knows it would be 90:10 against this rubbish. Was this even hidden away in his manifesto, or is he just assuming the right to remake our economy and civil liberties without debate? Net zero is going to mean rationing of travel, energy consumption, and many types of food just for a start.

Spot on and, let's face it this is already happening.

I recall quite a few posters on this forum saying convid restrictions would lead us straight into carbon restrictions. Bloody obvious now ain't it?

[HousePriceMania]

The Motley Crew again...

 

[Axeman123]

15 minutes ago, Bobthebuilder said:

Spot on and, let's face it this is already happening.

I recall quite a few posters on this forum saying convid restrictions would lead us straight into carbon restrictions. Bloody obvious now ain't it?

It honestly feels like the EU all over again. Somehow we are joining something that will trump national politics without any meaningful debate or mandate, and on which both parties will form a united front at election time anyway going forward. Innevitably the scope will creep massively, and be almost unrecognisable within a decade with it's tentacles in every corner of our lives. None of the people running it will be elected and none of it's policies will ever be debated, instead just presented as a fait acompli.

It even has many of the same ghouls previously associated with the EU. Just as the EU was a gravy train for failed national politicians, will the church of climate be the next level beyond that for failed EU ones?

[Loki]

My own personal reaction (perhaps my constitution is weaker after 18 months of the world wide gaslighting) is that if the announcements on the back of COP-VID (even just those from the last 2 pages of this single thread!) don't scare the shit out of you, you haven't joined all the dots yet.

Might be time for a 'stiff drink' as GG says...

Hope I'm wrong.

[Lightscribe]

32 minutes ago, Bobthebuilder said:

Spot on and, let's face it this is already happening.

I recall quite a few posters on this forum saying convid restrictions would lead us straight into carbon restrictions. Bloody obvious now ain't it?

yup.

[DurhamBorn]

[Axeman123]

I can totally see the appeal of "net zero" for BJ: a political legacy that isn't "problematic" like Brexit, A cushy unelected job for life after number 10, pockets stuffed with gold by corporations for speaches on climate change original sin, lots of First class travel on some other mugs dime, red carpets and motorcades, the chance to come back and haunt his sucessor from a position of power etc.

[Loki]

2 minutes ago, Axeman123 said:

I can totally see the appeal of "net zero" for BJ: a political legacy that isn't "problematic"

Because most of the population are fucking imbeciles 

[HousePriceMania]

25 minutes ago, DurhamBorn said:

Unfortunately I bought some VIV last week 

[Animal Spirits]

Oil giant Shell says it needs oil output to fund green shift

Ben van Beurden dismissed splitting its legacy oil and gas business from its renewables investment, a move urged by activist shareholder Third Point.

Talking exclusively to the BBC, he said the company's plans for greener energy could only be funded by oil and gas.

https://www.bbc.co.uk/news/business-59154930