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

[Harley]

7 hours ago, Cattle Prod said:

Fully agree, but I'm hoping the coppers are waking the f up. Of course there are less squaddies and more social science degrees in there these days, so let's see.

Squaddies, at least my lot, were clearly taught the rules of war in a no you fecking don't sort of way.  In one unit this even went further.  Sure shite may still have happened in some really shite circumstances but I'd have more confidence in the ex squaddies as coppers than the other lot.

[Yadda yadda yadda]

45 minutes ago, sancho panza said:

I find it amazing when I speak to a lot of Remoaner types who fail to appreciate the role declining disposable incomes played in Brexit and Trump.

This chart trend is still running and anyone who thinks this won't end in a large social dislocation where the bottom 50% have nothing to lose hasn't studied history-as per previous discussions @JMD. The set up here is similar to Russian revolution/rise of Hitler.

David Hunter has said he hopes he's dead before this cycle comes to an end and I can see why.I look at COP26 and it's clear our political elite have forgotten the lessons of history

This is a chart I've stumbled across but we've had similar before iirc.

https://jessescrossroadscafe.blogspot.com/2021/11/stocks-and-precious-metals-charts_4.html

Many people are stuck in their silo unable to see what life is like for others. Very often they're told what to think by the media. It is like playing a team sport with your head down. No chance of picking the right pass, you'll just run into trouble. The coach has an entirely different agenda.

A theory of mine is that the people at the top know the risks that they're playing. We hear of billionaire bunkers after all. They just aren't willing to take a step back. Some other bugger will take their place. You either move forward or you move back. Their mindset isn't capable of saying, "that is enough, better quit whilst I'm ahead". There is also the hope, from their perspective, that it is different this time.

[RJT1979]

I call bullshit on the high demand for oil. Its all just speculation that will unwind. 50 dollar is probably where its going.

[Yadda yadda yadda]

47 minutes ago, MrXxxx said:

The thing is after fuc£ing everyone/everything up he will be so toxic no one will want to listen to him, or seen to be....he will be like the man at Speakers Corner on his soap box without the crowd, this accolade usually reserved for  one shouting about God and original sin.

They need to reward him to encourage future politicians. He is doing what they want. No point withholding the spoils just because doing their bidding was unpopular. They wouldn't need to pay if their aims were popular. Popularism wouldn't be a dirty word. First action will be to print a million books and then pulp most of them.

[Animal Spirits]

Neil Howe co-author of the Fourth Turning has featured on several podcasts recently, one of which was with George Gammon. Neil suggested a future moving away from distributing benefits to one distributing pain ( e.g. benefits cuts and tax increases) similar to what @DurhamBorn has mentioned.

[Harley]

19 minutes ago, Animal Spirits said:

Neil Howe co-author of the Fourth Turning has featured on several podcasts recently, one of which was with George Gammon. Neil suggested a future moving away from distributing benefits to one distributing pain ( e.g. benefits cuts and tax increases) similar to what @DurhamBorn has mentioned.

My podcast feed is filling up with shorts from George.  Maybe just a technical change else I hope he's OK and doesn't burn himself out.

[ThoughtCriminal]

46 minutes ago, RJT1979 said:

I call bullshit on the high demand for oil. Its all just speculation that will unwind. 50 dollar is probably where its going.

Now there's a contrarian take 

[Chewing Grass]

10 hours ago, Hancock said:

Cue Fraser Nelson -

Boris Johnson recently hosted a dinner in No 10 for Tory MPs past and present who, like him, entered Parliament in 2001. To his surprise, David Cameron accepted the invitation. As they all sat down for dinner, the ever-competitive Prime Minister thought he’d have a bit of fun at his predecessor’s expense. He was about to launch a window-sill insulation scheme, he said – and he thought he’d call it “Greensill.”

When Cameron’s turn to speak came, he said that he ran No 10 in the glory days when there was food on the shelves and Tories who actually cut taxes. A decent joke. But Boris’s was better.

No one forgets a lobbying scandal. Cameron won two elections, he transformed both welfare and secondary schooling. But he will spend the rest of his days tainted by his lobbying for the now-collapsed Greensill. Sir Malcolm Rifkind, Stephen Byers and Neil Hamilton all ended up with similar stains on their reputations. When Owen Paterson accepted £9,300 a month from corporates – far more than his MP’s salary – scandal was sure to follow. A scandal now magnified several times over by No 10’s ineptitude, with career-ending effect.

ADVERTISING

Like so many political misjudgments, this started with an attempt at decency. Johnson likes to stand by his friends and allies even (perhaps especially) when that means taking fire. When Priti Patel’s former civil servants were accusing her of bullying, he asked MPs to “form a square around the Prittster” to defend her.

He thinks Paterson was wrongly accused of breaking lobbying rules by a biased Westminster sleaze watchdog – one who was, once, out to get him. He felt a particular sympathy for Paterson whose wife had taken her own life as this investigation dragged on. His majority meant the Tories could change the rules, which would create a fuss. But then again: so what?

It is not clear how much thought was given to all of this. It seems to have followed the Richard Branson logic of “Screw it: let’s do it” – or, as Jacob Rees-Mogg later put it, “Let justice be done, though the heavens fall.” Various Tory MPs pleaded with the whips not to go through with this madness. Whatever the details of the case, they said, people would just see a Tory caught with his snout in the trough, then let off the hook by his fellow Conservatives. How could they vote for what would be seen, by the public, as a stitch-up?

As with the National Insurance tax rise, the Conservatives were given no time to think – or rebel. They were given their orders and obeyed, knowing it would be another Charge of the Light Brigade. It was bound to fail. And even the attempt would cause permanent damage, making it easier to cast Tories as cheats and liars: dodging sleaze rules, reneging on manifesto pledges. They were doing it because a Westminster victory was guaranteed: they are up against a Labour Party so inept as to be a danger only to itself. Sir Keir Starmer actually had the votes to defeat the Government over the Paterson affair, but failed to organise his own troops on time. Only public outcry forced No 10 to change its mind.

Power corrupts, absolute power corrupts absolutely – and a majority of 80 gives the Prime Minister the kind of power that turns a brain fart into law within 24 hours. There is pitifully little scrutiny or questioning. No one to point out that this demented plan would fail because all parties needed to agree any changes to a parliamentary watchdog. No one to point out that, like the expenses scandal, this isn’t about the technicalities but a wider principle. About trust in politics.

Most of the expenses transgressions were within the rules. The helipad maintenance, the moat-dredging and even the sleazy video – all were approved by the relevant authorities, bought at the taxpayers’ expense. Perfectly legal, but still outrageous. The distinction between the two was lost on politicians so settled in the Westminster bubble that they could not see how all of this looked to people outside it. Back then, Johnson – as Mayor of London – was one of those who grasped this at once. He still teases Michael Gove about the “financial origins” of his £331 Chinon chair.

I am among Paterson’s admirers: he is a man of energy and tenacity. But on this issue, his judgment failed him. The rules might have permitted him to double his salary by shilling for corporates, but should he have done so? To accept £100,000 a year for advising any corporation was always going to raise questions about where his loyalty lay. The Prime Minister ought to have known this. As he wrote in these pages at the time, the expenses scandal showed that “the public is utterly fed up with politicians who seem to be actuated by their financial circumstances”. True then, and true now.

Much of this is classic overcorrection in No 10. This time last year, what the Prime Minister thought was seen as an almost peripheral issue in a machine run by Dominic Cummings. Now, what he says is enacted at once – even if it’s sure to end in disaster. Mark Spencer, the Chief Whip, assured Downing Street that the mission to save Paterson would be fine. Even the Tory party machine was not consulted.

So within the space of a few weeks, the Prime Minister went from needling Cameron about lobbying scandals to plunging the Tories into a scandal of his own. Had he sought advice, he would have told Paterson to take his punishment quietly and be back by Christmas. The watchdog could have been reformed a few months later, in consultation with Labour, at a time when neither party would have anyone under investigation. The Johnsonian impulse, this time, ended up crushing the man he intended to help.

Thoughtlessness, arrogance, complacency, being tone deaf to public opinion – in the past few days, the Tories have exhibited the traits of an exhausted government in its dying days. And that’s before the inflation that the Bank of England now expects to eat away any rise in wages for the next two years (if it doesn’t tip the economy into another crash). The difference from the 1990s is that there is no Tony Blair to capitalise on these errors. But now, as then, it’s becoming easier to see how a Tory government ends.    

 

 

and there is more

Marina Purkiss on Twitter: "Here’s a picture of the corruption we’re dealing with: - Owen Paterson paid £500ph to advise for Randox - Randox wins £133m contract for Covid testing without any other firms getting chance to bid - Govt makes Randox tests mandatory for travel - Randox reports £218m revenue (+85%)" / Twitter

 

[ThoughtCriminal]

Ive tried finding the options thread on here but no luck. 

 

Can any of the options boys share which service they use for trading?

 

Ive looked at interactive brokers and they look decent. 

 

Any others? 

[ThoughtCriminal]

12 minutes ago, Chewing Grass said:

and there is more

Marina Purkiss on Twitter: "Here’s a picture of the corruption we’re dealing with: - Owen Paterson paid £500ph to advise for Randox - Randox wins £133m contract for Covid testing without any other firms getting chance to bid - Govt makes Randox tests mandatory for travel - Randox reports £218m revenue (+85%)" / Twitter

 

Little leftie minx. She can report on my corruption any day 😍

[DoINeedOne]

12 minutes ago, Chewing Grass said:

and there is more

Marina Purkiss on Twitter: "Here’s a picture of the corruption we’re dealing with: - Owen Paterson paid £500ph to advise for Randox - Randox wins £133m contract for Covid testing without any other firms getting chance to bid - Govt makes Randox tests mandatory for travel - Randox reports £218m revenue (+85%)" / Twitter

 

Not sue if true but another tweet

 

[AlfredTheLittle]

27 minutes ago, Chewing Grass said:

and there is more

Marina Purkiss on Twitter: "Here’s a picture of the corruption we’re dealing with: - Owen Paterson paid £500ph to advise for Randox - Randox wins £133m contract for Covid testing without any other firms getting chance to bid - Govt makes Randox tests mandatory for travel - Randox reports £218m revenue (+85%)" / Twitter

 

The corruption in government is surely the massive story that's so far been missed, even by Keir Starmer and his 'forensic' brain

[DurhamBorn]

13 hours ago, Barnsey said:

Stroppy teens all over the city, hilarious 

 

Questions around his credibility  have they not seen his track record,he has been a disaster everwhere he has worked.Of course the thing they are missing is inflation this cycle will do what rates at higher levels would of done,they are both part of the process.I dont actually think they are bothered about putting rates up,i think they are worried about stopping QE because the government cant fund its structural deficit without it.

Of course even small increases will wipe out peoples wage increases with  mortgages,£140k at 2.8% rather than 2% means an extra £90 a month.Thats before all the infation in bills etc.

The problem is that people have only looked at the size of the monthly payment and ignored the fact paying the mortgage down on a £60k house is much easier than on a £200k house.

 

[RJT1979]

54 minutes ago, ThoughtCriminal said:

Now there's a contrarian take 

I think that's why interest rates not rising. Govt know its all speculation and hording and city making out like bandits. You cannot have runaway inflation without wage increases. They will engineer a bust of the stock markets to ensure inflation falls.

[steppensheep]

19 hours ago, JMD said:

PhD's in parapsychology and comparative wokism

One to save for later.

[DoINeedOne]

Good video unfortunately it’s seems most of the companies booming are all the same 

losing money with a shit business

honestly makes me want increase gold and silver positions at times all these shit companies will have to collapse 

then you have companies making decent free cash flow and their stocks hardly move 

 

 

 

 

 

 

[Axeman123]

2 hours ago, Yadda yadda yadda said:

They need to reward him to encourage future politicians...First action will be to print a million books and then pulp most of them.

I think you are spot on there re the book sales. As I said the other day BJ will embrace net zero in hopes he can make it his legacy, and have a second political life off it after number 10.

[Animal Spirits]

Bank of England sorry for rising cost of living

https://www.bbc.co.uk/news/business-59173293

[sancho panza]

1 hour ago, Chewing Grass said:

and there is more

Marina Purkiss on Twitter: "Here’s a picture of the corruption we’re dealing with: - Owen Paterson paid £500ph to advise for Randox - Randox wins £133m contract for Covid testing without any other firms getting chance to bid - Govt makes Randox tests mandatory for travel - Randox reports £218m revenue (+85%)" / Twitter

 

There's a really good video,3 minutes long on corruption in UK PPE contracts.

I suspect this is the bit of the iceberg you can see.This guy won contracts for £102.6mn and £26mn,got handsome middle man payments etc etc former tory councillor/adviser to Priti Patel/Tory donor

Shockingly blatant.

 

1 hour ago, ThoughtCriminal said:

Ive tried finding the options thread on here but no luck. 

 

Can any of the options boys share which service they use for trading?

 

Ive looked at interactive brokers and they look decent. 

 

Any others? 

It's here but we mainly chat on here @MvR is the go to,people like me and @Cattle Prod have the odd play.

We use Intereactive Brokers who MvR regards as the best for a host of technical reasons.However,their interface is not as user friendly as say saxobank.We use both,but much as I hate to say it,I find IB is a bit above my pay grade at teh minute.

If you can cope with the interface then IB is the professionals choice.

[Chewing Grass]

1 hour ago, DoINeedOne said:

Not sue if true but another tweet

 

She seems to be in the 'right place' to sniff out 'the juice'.

https://the-dots.com/users/marina-purkiss-174187

[JMD]

10 hours ago, Cattle Prod said:

Looks like I'm not the only one who doesn't trust Chinese companies now. Think that's the first time a bond market has ever agreed with me

Yes, I don't 'do China', but I was glad to be educated about the China risk element early on in this thread mainly from other posters here who were much more knowledgeable about these things. Having said that I guess their is scope for active traders, however I am long everything and also still accumulating, but have taken a  pause while awaiting the (stay puff!!) BK. Though once fully invested I might experiment with options, they do look fun if you have money to risk (which I do have), however at the moment I don't want to be distracted to much.                                                                                                                                                Back to bonds - I'm reminded that Louis Gave of GaveKal, has a theory that China will let its equity market fail, go big corporatism, protect its workers at all costs, etc. The flip side of the strategy he says is that China will protect its bond market, which he comments is already at present the most attractive one for bond investors. I can't find the original article he did that went into details... But the below article touches on bonds a bit, plus although a year old, it shows why I rate his macro thinking, he covers a lot of subjects and well worth a read... and interesting to see how accurate his predictions were...                                                                                                                        https://themarket.ch/interview/louis-gave-inflation-will-come-back-with-a-vengeance-ld.3307

[MvR]

1 hour ago, ThoughtCriminal said:

Ive tried finding the options thread on here but no luck. 

 

Can any of the options boys share which service they use for trading?

 

Ive looked at interactive brokers and they look decent. 

 

Any others? 

Yes... sorry, I haven't really kept up with my options trading thread.  Sometimes I start things then get distracted with other things and lose momentum.  I'm always happy to talk about options though, so give me a mention and I'll usually reply quite quickly.

As SP says IB is very good and I use it as my primary platform.

I also use TastyWorks, a US platform, because the interface is very fast/responsive on my 7 year old MacBook Pro and it's great for setting up various combos to see how they'll react to price moves. IB does this too, but is a bit more clunky on my computer.  I'll generally work out a combo trade on TastyWorks, but then make the trade itself in IB.

A huge benefit with IB is its reporting, very useful when it comes to doing my tax return. TastyWorks reporting is terrible for non-US taxpayers, and it only supports dollar denominated accounts. 

[JMD]

11 hours ago, wherebee said:

Try holding a sit down outside Parliament to protest the mass rape of children by immigrants.  See how long you sit there.

I agree but some tried more than sit down protests. The BNP repeatedly called out the child grooming gangs in the early 2000's, but it was their leader who found himself prosecuted for 'hate crime'!! He was was found not guilty. I never supported the BNP (because i am 'one of the good people'!!??, Triggernometry podcast joke) but it is 'events' like these that encourage - left and right leaning people - to vote for Trump-like figures... but just stating the bleeding obvious I suppose.

[sancho panza]

2 hours ago, Animal Spirits said:

Neil Howe co-author of the Fourth Turning has featured on several podcasts recently, one of which was with George Gammon. Neil suggested a future moving away from distributing benefits to one distributing pain ( e.g. benefits cuts and tax increases) similar to what @DurhamBorn has mentioned.

I think that's spot on.The piper wants paying and they're gradually running out of suckers to do it.

Here's a taster.Daily mail hattip my mum who reads it and sends me the things worht noting.Increasingly less and less people are paying the full amount.

The trick here is clearly to stop work.Only way around it.

https://www.dailymail.co.uk/news/article-10146085/Rise-2-000-council-tax-bills-Families-half-English-districts-set-hammered.html

• 104 out of 309 council tax districts charge families with Band D bills over £2,000
• This could increase by 50 to 154 out of 309 districts charging excess of £2,000

Families in half of English districts look set to receive council tax bills exceeding £2,000 next April, analysis revealed yesterday.

At present, just a third of areas have bills higher than that.

The staggering increase, uncovered following a Daily Mail study, will add further to the pressure on hard-working families.

1 hour ago, DurhamBorn said:

Questions around his credibility  have they not seen his track record,he has been a disaster everwhere he has worked.Of course the thing they are missing is inflation this cycle will do what rates at higher levels would of done,they are both part of the process.I dont actually think they are bothered about putting rates up,i think they are worried about stopping QE because the government cant fund its structural deficit without it.

Of course even small increases will wipe out peoples wage increases with  mortgages,£140k at 2.8% rather than 2% means an extra £90 a month.Thats before all the infation in bills etc.

The problem is that people have only looked at the size of the monthly payment and ignored the fact paying the mortgage down on a £60k house is much easier than on a £200k house.

 

Worth noting that the govt borrwoed something like £270bn in 2020/21 tax year and printed £250bn.........they absiolutely can't stop printing as we'd have a massive crisis.

Obviously they use hope as a strategy and clearly think if they can do this for a few years the hole below the sips waterline will fix itself.

Ref that last bit in bold,bang on.It's looking now that it won't need IR rises for a recession as the public are that leveraged,the inflation will send the economy over the edge.

1 hour ago, RJT1979 said:

I think that's why interest rates not rising. Govt know its all speculation and hording and city making out like bandits. You cannot have runaway inflation without wage increases. They will engineer a bust of the stock markets to ensure inflation falls.

Genuine question,have you seen a US M1/M2 chart for the last two years?

[Yadda yadda yadda]

20 minutes ago, Chewing Grass said:

She seems to be in the 'right place' to sniff out 'the juice'.

https://the-dots.com/users/marina-purkiss-174187

I think she will have little difficulty inserting herself anywhere she wants to be.