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

[Hancock]

1 hour ago, reformed nice guy said:

	L&G one: Top 10 constituents	69.0%
	Rest of Index	31.0%

No. of constituents in Index

17

 

Top 10 constituents (%)

Oasis Midstream Partners	10.7
Enterprise Products	9.9
BP Midstream Partners	9.8
Shell Midstream Partners	9.8
Genesis Energy	5.4
DCP Midstream	4.9
Cheniere Energy	4.8
Crestwood Equity Partners	4.6
Western Midstream Partners	4.6
Phillips 66 Partners	4.6

Invesco one:

Top 10 Exposures as of 22 Dec 2021 (%)

Name	ISIN	Weight
ENTERPRISE PRODUCTS PARTNERS UNT	US2937921078	10.48%
ENERGY TRANSFER UNT	US29273V1008	7.77%
MPLX COM UNT	US55336V1008	7.18%
MAGELLAN MIDSTREAM PARTNERS UNT	US5590801065	6.93%
WESTERN MIDSTREAM PARTNERS COM UNT	US9586691035	5.90%
PHILLIPS 66 PARTNERS COM UNT	US7185492078	5.84%
PLAINS ALL AMERICAN PIPELINE UNT	US7265031051	5.79%
SUNOCO UNT	US86765K1097	5.23%
BLACK STONE MINERALS UNT	US09225M1018	4.74%
NUSTAR ENERGY UNT	US67058H1023	4.14%

Cheers i bought £500 to keep an eye on it, maybe will but a few hundred quid in that one to do the same.

BP midstream partners had a good run last week, and thats one hell of a divi.

[stoobs]

Thanks to everyone for the power-cut strategy advice. 

I now have one of these and one of these.

I've just successfully used those to run the central heating boiler during a burn.

I've calculated I should get around 8 hours of boiler burn-time (at 130W) from a full battery, which if used for 15 minutes every hour for 16 hours/day would stop us freezing for a couple of days.

Also the fridge and freezer (at 90W each) could be run for maybe 15 minutes every 4 hours to extend food life without shortening the battery duration too much.

I'm now topping up the battery using this bad boy.

So for about £250 I'm now ready for the zombie apocalypse (providing they herd them all up within two days).

[MrXxxx]

3 hours ago, DurhamBorn said:

Main results will be the ones back end of next year as thats when inflation should start feeding in to free cash.Id be looking for the first year 6% to 10% increases in free cash.Also the number that matters the most,Return on Capital employed.That will start to rise as long as they arent over investing in roll outs.Crucial it does as it will signal bond holders are passing their capital to equity.For the highly indebted its the critical number.

Thanks for this [ROCE] @DB...it's when you give simple examples that I actually fully understand what I have read/learnt.

[MrXxxx]

29 minutes ago, stoobs said:

Thanks to everyone for the power-cut strategy advice. 

I now have one of these and one of these.

I've just successfully used those to run the central heating boiler during a burn.

I've calculated I should get around 8 hours of boiler burn-time (at 130W) from a full battery, which if used for 15 minutes every hour for 16 hours/day would stop us freezing for a couple of days.

Also the fridge and freezer (at 90W each) could be run for maybe 15 minutes every 4 hours to extend food life without shortening the battery duration too much.

I'm now topping up the battery using this bad boy.

So for about £250 I'm now ready for the zombie apocalypse (providing they herd them all up within two days).

That's what I like to see, far more 'manly' than bloody pizza ovens!...we're not all Fanny Craddock's you know, some of us are more Guy Martin's! :-)))

[belfastchild]

26 minutes ago, stoobs said:

Thanks to everyone for the power-cut strategy advice. 

I now have one of these and one of these.

I've just successfully used those to run the central heating boiler during a burn.

I've calculated I should get around 8 hours of boiler burn-time (at 130W) from a full battery, which if used for 15 minutes every hour for 16 hours/day would stop us freezing for a couple of days.

Also the fridge and freezer (at 90W each) could be run for maybe 15 minutes every 4 hours to extend food life without shortening the battery duration too much.

I'm now topping up the battery using this bad boy.

So for about £250 I'm now ready for the zombie apocalypse (providing they herd them all up within two days).

If its below 4-5C constantly outside, you dont need the fridge ;-)
If you have spare space in the freezer, fill it with those frozen cool packs, either leave them in there or transfer them to the fridge to let them defrost there and keep it cool.

If the leisure battery goes flat, if you have jump leads you can start the car and charge the leisure battery a bit that way. Not ideal scenario but if you need it to sit in the car for 15 mins to get a heat, that might get you a bit of charge in the battery at the same time, although probably not get a lot for an hour but better than nothing.

[Harley]

1 hour ago, stoobs said:

Thanks to everyone for the power-cut strategy advice. 

I now have one of these and one of these.

I've just successfully used those to run the central heating boiler during a burn.

I've calculated I should get around 8 hours of boiler burn-time (at 130W) from a full battery, which if used for 15 minutes every hour for 16 hours/day would stop us freezing for a couple of days.

Also the fridge and freezer (at 90W each) could be run for maybe 15 minutes every 4 hours to extend food life without shortening the battery duration too much.

I'm now topping up the battery using this bad boy.

So for about £250 I'm now ready for the zombie apocalypse (providing they herd them all up within two days).

Toasty!  Nice idea and thanks for posting.  Impressed you actually did it and tested it in advance!  I planned something similar but suffered scope creep (and blinded the partner with the science a la SAGE!)!  The maths are not my strong point and I calculated 1.25 "days" (i.e. 16 hour period) for just the boiler.  But I assumed a 50% DOD limit (but then a 100% inverter efficiency).  Regardless, an option worth considering, especially given the price of the battery. 

  Badge on the way....

PS:  You nailed it with Toolstation.  My usual place so I'm shocked I missed these items!  They both look the DBs (includes the usb)!  I found a local supplier of the correct batteries for resilience.

[leonardratso]

and an exemption lanyard to boot;

[Funn3r]

On 21/12/2021 at 19:14, dnb24 said:

Both are alloys -silver .999 or 925 (sterling) so not 100% silver and gold even at 24 carat isn’t pure gold- it’s .999

They make it sound like they are selling you actual gold though don't they. Cheating bastards.

[Axeman123]

Coming soon to the UK?

 

[Democorruptcy]

3 hours ago, belfastchild said:

If there were one telco in the world you asked me not to invest in it would be argentina telecom!

If there were one telco in the world you had to invest in, which would it be?

[Boon]

18 minutes ago, Axeman123 said:

Coming soon to the UK?

 

TBH I doubt it, maybe if there was a period where the wind didn't blow.

What doesn't seem to be touched on at all is that there seems to be some big price increases for power bills about to roll in, for some people it will be ruinous.

I think the government's answer here will be to be to expand the warm homes scheme upping the amount and number of people it covers, and reforming billing to disincentivise heavy use. Because why not? Using more than your fair share is not green anymore, the perfect decoy.

Something like £10bn could give the most vulnerable households £1000 credit on their bill, and those fat fucks can claim 'we care about the people'.

[Loki]

6 minutes ago, Boon said:

TBH I doubt it, maybe if there was a period where the wind didn't blow.

What doesn't seem to be touched on at all is that there seems to be some big price increases for power bills about to roll in, for some people it will be ruinous.

I think the government's answer here will be to be to expand the warm homes scheme upping the amount and number of people it covers, and reforming billing to disincentivise heavy use. Because why not? Using more than your fair share is not green anymore, the perfect decoy.

Something like £10bn could give the most vulnerable households £1000 credit on their bill, and those fat fucks can claim 'we care about the people'.

I think @DurhamBorn basically said they were almost out of room to 'print' any more.

But then maybe if it indirectly goes back into infrastructure via the energy firms that would be different

[ThoughtCriminal]

I'd say you can't make this up, but you don't need to.

 

We really are governed by utter fucking cretins.

 

Im deadly serious when I say I could form a better cabinet out of the members of this place, and we're just working class nobodies.

 

Some of us aren't even clinically sane.

 

 

 

[Axeman123]

8 minutes ago, ThoughtCriminal said:

Some of us aren't even...

[belfastchild]

31 minutes ago, Democorruptcy said:

If there were one telco in the world you had to invest in, which would it be?

I posted about it before I think. On phone so don't have the figures off the top of my head but have 25k out of 125k in my isa/sipp in bt vod and Telefonica. There may be another in there but would need to check but they are rough ballpark figures.

I think db posted a list the other day and the only one I personally wouldn't consider touching would be at+t but I've mentioned before thats a personal thing. I'm happy enough with what I have without a crash or more cash moved and I'm not doing that until next financial year at least. I'll wait to see what happens with net neutrality to see if I shift the balance.

29 minutes ago, Boon said:

TBH I doubt it, maybe if there was a period where the wind didn't blow.

Nothing in telco equipment other than via Siemens but didn't buy them for that.

Wind doesn't blow enough for 60 days on average in the UK. Doesnt matter how much you install, x times nothing is still nothing.

As for the point about rolling blackouts in the UK. For the last 5 years its not been a question of if, its been a question of when. Simply put, the UK does not have the infrastructure to cope with more than 3 days cold and calm. We were redlined this week. France and mild weather has bailed the UK in recent years, but now they have their own problems.

[mcdongle]

Trying to work out what effect these LNG cargoes will have on Europe.

 

 capacity of the Yamal pipeline is 32.9 billion cubic meters (m3) per year, or about 90 million m3 per day. A Bloomberg article on the LNG tankers said that 20 tankers carry only 3.3 million m3. So if these figures are accurate, the LNG tankers supplying Europe shouldn't have much of a long-term effect if Europe doesn't order more gas thru the Yamal pipeline.

https://www.bloomberg.com/news/articles/2021-12-22/a-flotilla-of-u-s-lng-cargoes-is-headed-to-fuel-starved-europe

Not a lot it seems. Anyone know if this is right?

[DurhamBorn]

5 hours ago, ThoughtCriminal said:

I'd say you can't make this up, but you don't need to.

 

We really are governed by utter fucking cretins.

 

Im deadly serious when I say I could form a better cabinet out of the members of this place, and we're just working class nobodies.

 

Some of us aren't even clinically sane.

 

 

 

Its all due to the printing press.They are so used to dis-inflation they think the BOE can keep printing the structural deficit.They simply cant accept that during a reflation the cycle becomes one of distribution.They need to take to give,and that changes the politics.The entire welfare budget including pensions is being printed right now.Once the press stops they will go after capital i think.They hope inflation will do the job then come under control,but the structural issues are huge.Mininsters and the regulator should be in jail for how they handled the energy market.They pretty much told the main players you cant make a return,so they didnt invest anymore,and instead a load of sharks arrived to make their directors rich ,stuff their pensions then fail.Peoples bills are now giving money to bennie claims and the debts of those companies.It seems problems that would bring governments down in the past are now regular events with no media scrutiny.They just say bung some extra bennies,that of course makes it worse and worse.

The BOE is out of road on printing but will likely keep going for now due to a bankrupt government,but they really need the Germans to allow the Iti's and Frogs to keep stealing their savings.

The state is now pretty much trying to take all the wealth to give to itself.Its like Operation Sealion has started but the ordinary private sector worker has no Hurricanes or Spits.

[Harley]

Harley is going to have a great family Christmas and a glorious New Year, all year!  May you all too.

[DurhamBorn]

18 hours ago, MrXxxx said:

Thanks for this [ROCE] @DB...it's when you give simple examples that I actually fully understand what I have read/learnt.

Its why inflation is critical for companies like telcos.Capital employed could be £30 bill equity £30 bill debt,so £60 bill capital employed.Being able to increase prices on that capital employed while debt coupons are low and fixed for a long time means quickly growing free cash.Of course during a long dis-inflation its much much harder.I see no mention anywhere of this and a complete lack of understanding of the way inflation works.

[BurntBread]

10 hours ago, DurhamBorn said:

Once the press stops they will go after capital i think. They hope inflation will do the job then come under control, but the structural issues are huge. [...]

The BOE is out of road on printing but will likely keep going for now due to a bankrupt government, but they really need the Germans to allow the Iti's and Frogs to keep stealing their savings.

DB, what form do think the appropriation of capital will take? Countries on the continent are charging 0.5% or 1% on bank balances over a certain amount (EUR100k, I think), but that won't raise much here, as very few people have large bank balances, except briefly during house transactions. Are you thinking a windfall tax on private pensions? That would surely be counter-productive quickly, as most people with big pensions will retire soon, so reducing their spend into the economy. What about an extra tax on housing? That would be very unpopular, but it's where most people have a large part of their wealth, so at least a big target.

On your last paragraph about Italy stealing German's savings. Is that a reference to Target 2 flows and therefore the regional imbalances in the Eurozone? Are you saying that the UK needs European QE to continue as a cover for our own, otherwise we'll land in a currency crisis? I have noticed in previous pages the throwaway remark from DH that he doesn't think the Euro will survive "the bust" (which he is now estimating might begin the first half of 2022).

These are all pretty momentous issues. It would be nice to have a couple of weeks where we don't have to use the word "unprecedented". All the same, it must be absolutely fascinating (as well as horrifying) for you to see your models getting stress-tested.

[sancho panza]

Where Hungary goes,the rest of the non USD currencies will follow(one way or another-traditional tighening versus alt tightening)

Could we be about to see a stronger Euro,weaker dollar for a period?For me,I don't think we're finioshed with the weak dollar phase ahead of the BK

 

[DurhamBorn]

52 minutes ago, BurntBread said:

DB, what form do think the appropriation of capital will take? Countries on the continent are charging 0.5% or 1% on bank balances over a certain amount (EUR100k, I think), but that won't raise much here, as very few people have large bank balances, except briefly during house transactions. Are you thinking a windfall tax on private pensions? That would surely be counter-productive quickly, as most people with big pensions will retire soon, so reducing their spend into the economy. What about an extra tax on housing? That would be very unpopular, but it's where most people have a large part of their wealth, so at least a big target.

On your last paragraph about Italy stealing German's savings. Is that a reference to Target 2 flows and therefore the regional imbalances in the Eurozone? Are you saying that the UK needs European QE to continue as a cover for our own, otherwise we'll land in a currency crisis? I have noticed in previous pages the throwaway remark from DH that he doesn't think the Euro will survive "the bust" (which he is now estimating might begin the first half of 2022).

These are all pretty momentous issues. It would be nice to have a couple of weeks where we don't have to use the word "unprecedented". All the same, it must be absolutely fascinating (as well as horrifying) for you to see your models getting stress-tested.

Yes the BOE needs cover to continue now.I think they will use fiscal drag on capital.The IHT and pension lifetime allowance freezes are terrible and make a huge difference in an inflation.The welfare bill will just keep growing because so many in dont own houses and rent.HB should be diverted from BTL to social housing for instance,but nobody governs for the future in the west now.Most of the problems are down to our polos being so terrible since the end of Majors government.

[Lightscribe]

5 hours ago, Harley said:

Harley is going to have a great family Christmas and a glorious New Year, all year!  May you all too.

A glorious new year looking forward to Armageddon judging by the picture? Or have I been on the Covid-1984 part of the forum for too long…

[sancho panza]

For thsoe thinking a BK is imminent,blow off top (TM David Hunter) looks more likely.

First chart idea shamelessly stolen from Lyn Alden twitter thread

Other charts worth considering for those moving to cash/short-Repos were trending up by Q3/4 in 2007 and by Q1 08.

[DurhamBorn]

Just in time for xmas economists and the MSM reach our 6.8% inflation target we provided 3 years ago 

https://www.telegraph.co.uk/money/consumer-affairs/inflation-hit-68pc-will-affect-mortgage-savings-investments/

 

Have a nice crimbo everyone,im off to get ready then out on the lash,with dad then down the town with my son,women will be making snail trails behind me i reckon tonight and thats before they see how much i got in Mosaic at the bottom.