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

[feed]

Or they’re positioning themselves for the leadership challenge. Their odds on being next PM halved last night. 

Rishi 13 to 6 / 7 

Javid 25 or so to 13   
 

[Lightscribe]

25 minutes ago, Lightly Toasted said:

That's a kg, though.

If it was £2.33 for a more usual 250g pack, would anyone bat an eyelid?

(still expensive, might as well buy butter, but even so).

https://www.dailymail.co.uk/news/article-10982919/amp/Sainsburys-chief-warns-pressure-budgets-Lurpak-butter-price-goes-5-90-7-25.html
 

It’s more the fact of speed of increase, £7 1kg in 2021. 

There’s a visual and psychological milestone, of the likes of 1kg butter reaching £10.

That combined with the other factors like security tags on cheese due to the price rises will cause people to tighten purse strings especially when added up and they see the real differences in weekly shop costs.

Luxuries get the elbow first, steaks, roast joints, lamb etc which reduces demand so production drops in response.

[DurhamBorn]

50 minutes ago, belfastchild said:

Something has been bugging me all morning.
Im not concerned about the people, everyone is focussing on the people.
Chancellor and health secretary jump off the titanic. What have they seen?
It cant be just prospects of power cuts this weekend (which are receeding).
Its the tell the truth bit of Sunaks letter that interests me. Probably nothing that hasnt been discussed before on this thread.

My roadmap? Systemic collapse if they carry on with Bojo's everything will be fine attitude.Dishi know the public sector and bennies are out of control whatever his faults.

[DurhamBorn]

45 minutes ago, CannonFodder said:

 

 

 

Always reminds me of a girl i dated.Her dad went to school with my dad,quiet,nice man but hard as nails,and i mean youd have to kill him hard.He lost his return bus ticket when he went to show it on the bus.Driver wouldnt let him on so he sat in seat and refused to get off.Next thing two coppers arrived and set a police dog on him.He strangled it to death.Judge let him off and gave him small token compo saying he had every right to defend himself from the dog given it was only over a bus ticket and he had shown no violence towards the driver or police and reprimanded the police.Every time he walked in the pub someone used to make a bark then whining death noise ,he used to say who did that with his fist clenched ,just joking,he took it with a smile.The west needs all its men to be like him again and it seems the struggle is starting now.

[Barnsey]

6 minutes ago, DurhamBorn said:

My roadmap? Systemic collapse if they carry on with Bojo's everything will be fine attitude.Dishi know the public sector and bennies are out of control whatever his faults.

As I highlighted, as hard as it may be to believe from a Labour MP, Rachel Reeves is determined to make work pay. Bennie campaigner groups hate her. No coincidence that her other half is Director General for Finance at Department for Work and Pensions.

[DurhamBorn]

4 minutes ago, Barnsey said:

As I highlighted, as hard as it may be to believe from a Labour MP, Rachel Reeves is determined to make work pay. Bennie campaigner groups hate her. No coincidence that her other half is Director General for Finance at Department for Work and Pensions.

Problem is though she would likely do it with more in work bennies when it needs to come from bennie cuts and tax cuts.We would need to see the policies.

[Axeman123]

3 hours ago, jamtomorrow said:

Just caught up with Dr. Tim's latest.

Let's suppose he's right about the coming sterling crisis ... what are the implications for the UK? And I mean practically speaking, once we've gotten past all the "UK is screwed" hot takes - how does it play out?

Situation is very different from the last time we went to IMF - then: 4% balance of payments defecit and North Sea oil about to ride to the rescue. Now: 8%, no oil.

Also a huge political incentive to put off the inevitable for as long as possible - "cap in hand to the IMF" still resonates powerfully in the national memory, even now.

What I'm wondering ... might we see partial currency substitution, similar to how households hoard USD in some South American countries when the national currency executes a swan dive?

Haven't seen or read what you are referring to. That said, generally:

In the scenario you describe price inflation would roar, and bennies/pensioners would clamour for rises or a dollar peg. Our whole problem lies in not saying no to them, so would that change? Not saying no would rapidly lead to Argentina etc scenarios. Argentina has had a long tradition of shit institutions and economic instability (like most ex-Spanish colonies), whereas Britain has the opposite (very broadly speaking). I therefore just don't see things getting that far.

Another thought is that the IMF can't possibly bail out every country in an equally bad position, and would likely let anyone breaking ranks to take the easy way out burn as a message to the others. Sri Lanka destroyed themselves with green bullshit, and seemingly have been abandoned to their fate. After a decade of co-ordinated policy the Fed has signalled that it is everman for himself IMO with rate rises that the EU and Japan cannot possibly match. I don't think anyone is coming to save us.

On the other hand the 1976 sterling crisis precipitated dramatic cuts in state spending, and was actually a catalyst for positive change. BJ being removed could well be a sign that our resilient institutions are taking the situation seriously, certainly a lot of the MPs are talking about a shift to low-spending conservatism.

[Axeman123]

2 hours ago, DurhamBorn said:

I find a baseball bat gives too much time for someone to get inside the swing to you...

Never put it to the test myself, but I would favour a ball-pein hammer. If it was good enough for the Yorkshire Ripper, its good enough for me.

 

[Bus Stop Boxer]

I heard Farage on GB News last night being interviewed by Michelle Dewbery. He seemed to use the word "reset" outside of the current political context several times.

Dog whistle warning?

[Long-game]

1 hour ago, One percent said:

Making your own butter seems easy. I’ll give it a go 

https://www.bbcgoodfood.com/recipes/home-churned-butter

It's very easy just the double cream and an empty jar and you can whip it up to butter with some elbow grease, easy for some of the single dosbodders whom are single 🤣

[HousePriceMania]

1 hour ago, One percent said:

Making your own butter seems easy. I’ll give it a go 

https://www.bbcgoodfood.com/recipes/home-churned-butter

It's very easy, especially with a mixer.

Keep on eye out for reduced double cream, then it's worth while

[Barnsey]

32 minutes ago, DurhamBorn said:

Problem is though she would likely do it with more in work bennies when it needs to come from bennie cuts and tax cuts.We would need to see the policies.

Good point, although she is much more pro unions than the Cons which should aid wage growth.

[Noallegiance]

1 hour ago, belfastchild said:

.
Its the tell the truth bit of Sunaks letter that interests me. Probably nothing that hasnt been discussed before on this thread.

If any current politician even comes close to mentioning the issues understood hear I'll eat my own shit. Twice.

[Calcutta]

For defending yourself indoors you want a steak knife. Go in with your left arm high, grab whatever you can then aim the blade for their chest. 

You're probably not facing one attacker so you need them incapacitated and dying in one hit each. 

The beauty of the steak knife is that it doesn't snap or bounce off when hitting the rib cage. 

Best defence really tho is a lot of mates with ya. 

 

[reformed nice guy]

I think I have seen another thread prediction coming true.

I signed up years ago to a thing called PrimaryBid. It allows you to buy into IPOs.

For the last few years it has been mainly smaller speculative companies but also some smaller miners or oil companies. Petro Matad, Haydale Graphene Industries, Greatland Gold, Zinnwald Lithium, First Tin, Melody VR etc.

There have been the odd familiar names - Begbies Traynor in March 2021, Jet2 in February 2021, Yellowcake February 2021.

The last two have been AO World and Ocado group. Rather than bond issuance they are raising money with equity.

[Axeman123]

24 minutes ago, Calcutta said:

For defending yourself indoors you want a steak knife.

ITS HAMMER TIME!

[JMD]

2 hours ago, DoINeedOne said:

Posted this nearly a year ago, as far as i aware its accurate

 

 

Nadhim Zahawi also started YouGov 

His wife Mrs Zahawi’s firm purchased the £3.5m Channel industrial estate in Ashford, Kent, by the Eurotunnel train station. It was bought mortgage-free days before the Government secured the trade deal with the EU in December.

He also was part of a company SThree who got alot NHS contracts 

And also set up a medical company "Warren Medical Ltd" which doesn't seem like it got use for anything maybe because people started asking questions he said it was for a property deal just before becoming the Vaccines minister 

 

I bet a good deep dive on him would be amazing 

 

Fair play but sometimes you have to wonder..... who's the idiot 

Exactly. So how might we 'go long' Zahawi? Serious question btw, and I'm not talking a visit to Paddy Power! ...after all Zahawi has bought property, trading estates, medical companies... What next I wonder?  Pity the MP members interests doesn't include his share portfolio!

[Democorruptcy]

2 hours ago, DurhamBorn said:

From 3.5 years ago i had around 11.6% top out this year then down to 7.2%,then 5.5%,4.9% the rest fuzzy but between 60% and 70% compounded for the cycle.I care more about the total than the yearlies.Our stocks gain more from steady because wages lag the inflation.BT puts price up with inflation,but wages and contracted services only go up between 6 months and 12 months later etc.Thats why our areas stuff bubble tech.Amaons prices mostly go up before they can sell the service etc.

Crude just dropped below $100. It was $80 in Oct, $120 in March, If it was still $100 in October it would add to higher inflationary pressures for that reading. However it wouldn't if it was still $100 next March. Your figures imply oil is going nowhere in the short term?

[sancho panza]

9 hours ago, WICAO said:

So rates up yesterday and today the banks have started announcing mortgage rate increases so they're not messing around.  Commonwealth Bank (CBA), one of the big banks here, passing on the full 0.5%.  Standard variable interest rate becomes 5.8%.  The rate for "investors" (read BTL landlord) will be 6.38%.

https://www.abc.net.au/news/2022-07-06/cba-passes-on-rba-rate-hike-to-mortgage-borrowers-savers/101210412

Positively, it also looks like they're passing on the 0.5% to some savers as well although savings rates from CBA still ridiculously low.

Interesting Wicao.

I know in Oz BTLers are allowed to offset losses in cashflows on lets and this has been one of the factors pushing up capital prices in a virtuous circle.

To what extent will this dampen BTL demand do you think? The impact on banks balance sheets will be substantial if they allow asset prices to fall.This move effectively seems to guarantee that.

RBA taking a strong stance with that move as are CBA etc.

Anecdotally,are you hearing more people tchange tack on property as an invesment or do you think this will take some time to work through to that?

alos @wherebee

4 hours ago, jamtomorrow said:

What I'm wondering ... might we see partial currency substitution, similar to how households hoard USD in some South American countries when the national currency executes a swan dive?

I thinkyour average basment dweller is already doing that via a few mechanisms aside from say CHF reserves.

I think it's a matter of time before the idea catches on but likely very few people will have the wherewithal to do it on a substantial basis.

2 hours ago, Lightscribe said:

I’ll stick to Aldi’s Nordpak, works out £4.30 for 1kg and tastes pretty much indistinguishable.

https://groceries.aldi.co.uk/en-GB/p-nordpak-spreadable-slightly-salted-500g/4088600041445

Mrs P is a food scientist.Checks the ingredients on the Aldi stuff I bring home and says they're pretty similar.

More broadly she's been saying for years that the own brand stuff is catching up with premium brands in terms of taste/texture in a lot of areas as the big guys like Aldi hire more ex Unilever/Mondelaise staff.

[JMD]

2 hours ago, Barnsey said:

The sooner Rachel Reeves is in the better. From her wiki page (must read)

Appointed Shadow Secretary of State for Work and Pensions in 2013, Reeves proposed that anyone unemployed for two years, or one year if under 25 years old, would be required to take a guaranteed job or lose access to benefits. She caused controversy within the Labour Party by stating Labour would be "tougher" than the Conservative Party in cutting the benefits bill.^[29] She caused further controversy in early 2015 by stating "We [Labour] don’t want to be seen, and we're not, the party to represent those who are out of work".^[30]

In an interview with the Financial Times, outlining her forthcoming speech in Bury on strengthening the economy, Reeves said a Starmer government would be pro-business and committed to fiscal discipline. She said Britain had seen a Japanese-style Lost Decades of growth, which she said a Labour government would reverse through following fiscal rules and eliminating borrowing for day-to-day spending, with no unfunded election spending commitments. This she asserted would enable government capital spending, above the current 3% of GDP per year limit, to promote growth. Labour would be both pro-worker and pro-business. Reeves did not think Britain would rejoin European Union or its single market in the next 50 years. She said she was against the return of freedom of movement for workers between the UK and EU.^[38][39]

^{https://en.wikipedia.org/wiki/Rachel_Reeves}

 

I'm sure Reeve says/has said all manner of serious sounding politically tough things and themes - and what's more fully intends to implement those ideas once in power!                     ... I note her husband was private secretary to Gordon Brown. But maybe I'm just being cynical, however can't help it as a quick look at her wiki bio shows Rachel's own sister, Elie Reeves also happens to be a Labour MP, and (guess what?!) Ellie herself is married to John Cryer Labour MP!         Is it only me, or is anyone else creeped out by this increasingly common incestuousness of political thought and action!?

[leonardratso]

politicians policies and their actual execution of said policies are 2 completely different things, most manifestos arent worth the paper they are written on, short of direct action (sri lanka/netherlands) the only way to show displeasure is via voting the fuckers out and keeping them out, but as is said here - who the feck else is there thats going to be any different?

[Barnsey]

How we all feeling about Jupiter? I'm down 31% but reluctant to buy any more even though its hard to see it heading much further south. I'd like it to form a bit of a base first, Chrysalis seems to be at the core of it's woes.

[ThoughtCriminal]

12 minutes ago, JMD said:

I'm sure Reeve says/has said all manner of serious sounding politically tough things and themes - and what's more fully intends to implement those ideas once in power!                     ... I note her husband was private secretary to Gordon Brown. But maybe I'm just being cynical, however can't help it as a quick look at her wiki bio shows Rachel's own sister, Elie Reeves also happens to be a Labour MP, and (guess what?!) Ellie herself is married to John Cryer Labour MP!         Is it only me, or is anyone else creeped out by this increasingly common incestuousness of political thought and action!?

They go to the same schools, universities, give each other jobs, fuck each and marry each other.

 

We're governed by a cabal of a few thousand families. They're the journalists who tell us lies and the politicians who rob us.

 

They despise the working class with a passion, labour or Tory.

[CannonFodder]

DXY touched 107

As usual i didnt keep enough cash back - so much i want to buy as cheap prices but no money for more shares

[CannonFodder]

2 minutes ago, ThoughtCriminal said:

They go to the same schools, universities, give each other jobs, fuck each and marry each other.

 

We're governed by a cabal of a few thousand families. They're the journalists who tell us lies and the politicians who rob us.

 

They despise the working class with a passion, labour or Tory.

The 'establishment' was the term in my parents generation.