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

[geordie_lurch]

1 minute ago, Axeman123 said:

I think this is a marker of a top of some kind, an unsustainable extreme at the end of a long term trend of some sort, in the same way Argentina being able to sell century bonds a few years ago was. The vast majority of people will always need to exchange a significant part of themselves for financial sustenance one way or another; whether that is a significant % of their waking lives to toil, a few years of absolute max effort to get a scalable business of the ground and then personally throttle back, or their total focus on acquiring and maintaining a specialised and highly valued skill to enable part self-employment. The future isn't legions of self-sufficient dog-walkers etc, IMO.

Yes see the EDIT I just added to my post above @Axeman123 Peter Turchin seems to have called this over a decade ago and his views on where we are headed aren't great

“In 2010, he [Turchin] predicted that the unrest would get serious around 2020, and that it wouldn’t let up until those social and political trends reversed. Havoc at the level of the late 1960s and early ’70s is the best-case scenario; all-out civil war is the worst.”

[Bobthebuilder]

1 minute ago, geordie_lurch said:

Yes see the EDIT I just added to my post above @Axeman123 Peter Turchin seems to have called this over a decade ago and his views on where we are headed aren't great

“In 2010, he [Turchin] predicted that the unrest would get serious around 2020, and that it wouldn’t let up until those social and political trends reversed. Havoc at the level of the late 1960s and early ’70s is the best-case scenario; all-out civil war is the worst.”

Funny you posted that, because I was just about to reply, saying that the antiwork movement reminds me of the 1960s-1970s drop out kids, hippys, punks etc. Anarchy in the UK and all that.

[Democorruptcy]

2 hours ago, Axeman123 said:

I can picture the coming calls for tax cuts as well as wage rises for all public setor staff, both to help with the cost of living.

You can see this in so many places just now. The undefined flat cladding solution announced late last week for example; no new money from treasury, flat owners not paying a penny, and a vague commitment to extract the full whack from the big builders through various forms of tax extortion. The same thing again with gas prices; no money from the treasury to pay people's bills, no more blood to squeeze from the ordinary Joe, and an assumption that Utility companies can swallow it under duress. The government is out of money, ordinary Joe is out of money, and now the private sector is in the cross-hairs.

Plus more talk of a wealth tax?

[Axeman123]

29 minutes ago, geordie_lurch said:

Peter Turchin seems to have called this over a decade ago and his views on where we are headed aren't great

That is a fascinating article, thanks for sharing.

His basic premise (as I understand it) is that an over-production of elites above the increase in elite positions for them to occupy innevitably leads to surplus elites rising up to seize positions they feel entitled to, co-opting the masses to their cause through populism. This seems quite an ideological position to take, and doesn't really stand up IMO.

I can't debate his mathematical models or detailed historical data etc, but I remain unconvinced by his premise. Certainly all revolutions need more than the proletariat to gain critical mass, but I suspect surplus elites jumping on an already rolling bandwagon are more of a symptom than a cause.

Turchin's theory is akin to the establishment myth that "Brexit wasn't even a thing that people were concerned about until Farage stirred it up", and thinking about it maybe a huge part of the establishment response was predicated on this chap's kind of thinking. Also the US establishment's reaction to Trump: "he is just doing populism, he doesn't really beleive any of it" or "he is just using division to get power" cetainly seem to share that same world view. Perhaps our elites are very influenced by him, and you can certainly see the appeal for them. No valid ideologies or ideas just the pursuit of power, lumpen masses that will take up cudgels over anything and rightly should therefore just be pacified or brow-beaten to be quiet, and the god-like elites that can so easily twist their simple peasant minds to any shape.

I will however take my hat off to Turchin for the ultimate brass neck: gaining tenured professorship as an ecologist(?), then mugging it off to do whatever he felt like while still drawing a salary.

[Axeman123]

33 minutes ago, Democorruptcy said:

Plus more talk of a wealth tax?

I see the bigger picture as the government having started to realise that their own formerly bottomless pocket is empty, but they are still thinking in terms of just needing a different pocket to reach into. It is very telling that they see the world as a place of bottomless pockets still, the fun starts when the realisation that isn't the case sets in.

Another way to look at it is the bargaining stage of bereavement. Anger/despair etc still to come.

Edit to add: Wealth tax was one of many kites flown recently, doubt it ever happens though.

[Joncrete Cungle]

5 minutes ago, Axeman123 said:

I see the bigger picture as the government having started to realise that their own formerly bottomless pocket is empty, but they are still thinking in terms of just needing a different pocket to reach into. It is very telling that they see the world as a place of bottomless pockets still, the fun starts when the realisation that isn't the case sets in.

Another way to look at it is the bargaining stage of bereavement. Anger/despair etc still to come.

Edit to add: Wealth tax was one of many kites flown recently, doubt it ever happens though.

The elites own most of the land & buildings so I can't see them being really taxed in a way that the elites can't avoid. The bennies class can't really be taxed either.

So that leaves..... Those in the middle with pensions, stocks & shares, ISA, Bitcoin etc....

[Democorruptcy]

11 minutes ago, Joncrete Cungle said:

The elites own most of the land & buildings so I can't see them being really taxed in a way that the elites can't avoid. The bennies class can't really be taxed either.

So that leaves..... Those in the middle with pensions, stocks & shares, ISA, Bitcoin etc....

Housing? Poor form I know but I've suggested a new tax. A Holiday Home Tax paid on the capital gain on any holiday home/let sold, that was previously used for residential purposes, i.e. those that have displaced a resident.

[CannonFodder]

Regarding antiwork, I view it as a side effect of unfairness, eg lack of ambition

There were folk who retired day they left school in my year, perhaps few hours pocket money for beer. That was many years ago, i can only see it being so muxh worse now.

Live with mum and dad , no ambition to move out.

Benefits on top and no ambition to climb ladder and comsume.

No ambition to have kids, cult of the individual 

All summed up to no ambition to be in the rat race and a realisation that houses etc are so out of reach, that seems pointless to even try.

I see a lot of this antiwork as loss of motivation and ambition due to generational inequality. Really people are subconsiously throwing the towel in. And reducing their expectations to single living at home with parents, few cans with mates and an alter ego online. Perhaps bounce up and down on partner on weekend too. Things in life are free and so on.

I think many are very happy this way, no wish to compete for a shrunken carrot and retired from 18.  Incentive is gone.

Problem is once they get to 30 plus and change their minds but no people or pressure management skills developed.

 

[ThoughtCriminal]

Now that's what i call schadenfreude.

[Axeman123]

26 minutes ago, ThoughtCriminal said:

Now that's what i call schadenfreude.

"them's the bastards that bombed me granny!"

Edit to add:

Luckily Berlin is currently a balmy 2c, dropping to a fresh -2c overnight.

[Harley]

4 hours ago, JMD said:

I like Stock Exchanges. They will continue earning their fees no matter what, and some pay good divis, plus they are decomplex. Is that your thinking here Harley? However how to value them and what entry price to buy at is difficult, ie if we get a DH style meltup and crash with most global market sectors not recovering for many years, wouldn't the exchanges themselves suffer similar fate? ... Historical charts wouldn't show a tight correlation but my thinking is that under extremes the exchange price would be coupled with its own underlying market and follow it down?

Apologies for not being clear. 

That first table shows the number of potential opportunities (number of stocks) by stock exchange.  It highlights the dearth of opportunities, according to how I personally rate things, in say the US versus say some Asian countries. 

I produced tables (not posted) showing the % of opportunities based on the number of "value" type stocks (i.e. excluding any technical filters) and the number of total stocks (i e. excluding any filters save market cap) for each exchange which further drew the point home.

I was also separately also looking at Asian orientated funds and they looked oversold.  Of course oversold things could sell off even more!  But this is the pool I like to fish in - primae facia value companies currently oversold, all according to my own preferred metrics (others available!).

The screens are wide nets so only take me so far, requiring a manual look at the charts to see if they're on the turn.  If so, I do a deeper dive on their financials.  But those wide nets (like a debt to equity ratio up to 150%) shows just how bad things are in some markets!

Takes a few hours and I'm easily bored and distracted, hence my trips here!

PS:  Given we seem to be in a more volatile tail end I'm very tempted to drop the value bit and sprint for some profitable trades before any pop.

[Harley]

59 minutes ago, CannonFodder said:

I see a lot of this antiwork as loss of motivation and ambition due to generational inequality.

Partly, but as I have mentioned before, the size of the pie just has not been growing in real terms for a while so those elites used to wealth growth have been doing it at the expense of the rest having a smaller share of said pie.  QED the relative enrichment of 1%.  Actually, they are now even taking from the 1%, hence the 0.1%!

PS:  Like the rat experiments they do in the lab, although I'll spare the gory details.

[The Bear of Doom]

1 hour ago, Democorruptcy said:

Housing? Poor form I know but I've suggested a new tax. A Holiday Home Tax paid on the capital gain on any holiday home/let sold, that was previously used for residential purposes, i.e. those that have displaced a resident.

Another possibility would be a general revaluation of residential property for Council Tax banding purposes.  IIRC, a property is only revalued/re-banded when it is sold, so a lot of the uplift in property value due to extensions etc is currently not captured by the government.

[Harley]

34 minutes ago, The Bear of Doom said:

Another possibility would be a general revaluation of residential property for Council Tax banding purposes.  IIRC, a property is only revalued/re-banded when it is sold, so a lot of the uplift in property value due to extensions etc is currently not captured by the government.

Feck it, CGT on all property, end of.  Why should a renter pay on investments while OO's, etc don't.  It's a gain, tax it or tax none! 

And now another logical but "such are folk" proposal on IHT.......! 

I'll get me coat!

[ThoughtCriminal]

Holy shit, a mainstream journalist who actually gets it. 

 

Full thread is worth a read.

[Axeman123]

36 minutes ago, The Bear of Doom said:

Another possibility would be a general revaluation of residential property for Council Tax banding purposes.  IIRC, a property is only revalued/re-banded when it is sold, so a lot of the uplift in property value due to extensions etc is currently not captured by the government.

I imagine that would come as part of a whole new replacement for council tax, with the revaluation snuck in. It certainly seems likely as a source of funds, of course at the moment the revenue would be going to councils rather than Westminster but that could easily change.

Perhaps it might hypothetically be a straight % of the valuation, more like US property taxes. Even 1% levied annually on the UKs ~7.5 trillion pound housing stock would yield 75 billion per anum. Locking in the peak valuation about now would be an obvious trick.

[The Bear of Doom]

7 minutes ago, Harley said:

Feck it, CGT on all property, end of.  Why should a renter pay on investments while OO's, etc don't.  It's a gain, tax it or tax none! 

And now another logical but "such are folk" proposal on IHT.......! 

I'll get me coat!

Yes, that would also be a good idea, but how it could be structured so it doesn't discourage landlords from selling up would need to be considered.  Having a CGT taper based on the length of owning would mean that long-term OOs wouldn't be penalised, whereas flippers would have to pay the most tax, however this may discourage LLs from selling up, and if an OO has to move due to work etc., they would either be penalised with higher tax, or just rent it out, thereby reducing the number of houses for sale.

Maybe the best option would be a proper Land Value Tax.

[MrXxxx]

On 07/01/2022 at 23:33, Cattle Prod said:

Speaking of Centrica, here you go. Remember when @DurhamBorn told us they weren't allowed to make a profit? They were being trashed and demonised by politicians for profiteering, do you remember? Gaslighting fuckers

Oh it's all coming out now, isn't it? 

On the plus side, it reminds me of DBs cigarette point, that you could add a penny a fag and no one would notice? Utilities could double their profit and no one would notice either.

This is why I avoid Utilities, although they were privatised being [and viewed as] essential the government still treats them as if they are nationalised. Note, this is less so with the Telecoms.

[MrXxxx]

On 07/01/2022 at 21:24, JimmyTheBruce said:

"Scott Wheway, Centrica’s chairman, said she would bring a “wealth of real-world experience in energy”"

Oh the irony.

No, he was misquoted by the media, he actually said " She will bring a wealth of energy but no real-world experience".

P. s despite what I have just written above about Utilities if @Yellow_Reduced_Stickeris selling on Monday I am buying! :-)))

[MrXxxx]

On 08/01/2022 at 21:19, planit said:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1045329/Vaccine_surveillance_report_week_1_2022.pdf

 

Page 42

They even give reasons LOL

 • people who are fully vaccinated may be more health conscious and therefore more likely to get tested for COVID-19 and so more likely to be identified as a case (based on the data provided by the NHS Test and Trace)

• many of those who were at the head of the queue for vaccination are those at higher risk from COVID-19 due to their age, their occupation, their family circumstances or because of underlying health issues

• people who are fully vaccinated and people who are unvaccinated may behave differently, particularly with regard to social interactions and therefore may have differing levels of exposure to COVID-19

• people who have never been vaccinated are more likely to have caught COVID-19 in the weeks or months before the period of the cases covered in the report. This gives them some natural immunity to the virus for a few months which may have contributed to a lower case rate in the past few weeks

 

and the one they forgot that explains higher rate in 'unvaccinated under 18s':

More of them "being underage have yet to be vaccinated and so are not protected"...wait a moment?!

[MrXxxx]

11 hours ago, Democorruptcy said:

Labour has called for a windfall tax on North Sea gas and oil producers to help limit the expected rise in household gas and electricity bills by £200

The party says its £6.6bn plan would also remove VAT on domestic energy costs for a year and increase the warm homes discount for poorer households.

Shadow chancellor Rachel Reeves told the BBC the UK was "uniquely exposed" to global energy price rises.

But the government said it was working to manage the impact on consumers.

And Prime Minister Boris Johnson has not ruled out taking steps to tackle the rising cost of energy, amid pressure from some of his own backbench MPs.

https://www.bbc.co.uk/news/uk-politics-59927575

I would like to propose a windfall tax on Big Pharma, that way we can reduce the price of woolen jumpers, leave our windows in offices/universities/homes full open, and all avoid contracting Covid as the government  'Scientists' tell us!

[MrXxxx]

4 hours ago, Joncrete Cungle said:

The elites own most of the land & buildings so I can't see them being really taxed in a way that the elites can't avoid. The bennies class can't really be taxed either.

So that leaves..... Those in the middle with pensions, stocks & shares, ISA, Bitcoin etc....

P & P...Pensions and Property as they are the two 'investments' in the UK where a) the majority don't have any choice, the majority are highly invested, and they are both iliquid so difficult to 'get out of' quickly!

[ThoughtCriminal]

Fucking mental.

[MrXxxx]

2 hours ago, Axeman123 said:

"them's the bastards that bombed me granny!"

Edit to add:

Luckily Berlin is currently a balmy 2c, dropping to a fresh -2c overnight.

Perhaps it wont be a Dutchman [supposedly] that sets fire to the Reichstag this time?...either way, we wouldn't want what followed the last time!

[King Penda]

2 hours ago, The Bear of Doom said:

Another possibility would be a general revaluation of residential property for Council Tax banding purposes.  IIRC, a property is only revalued/re-banded when it is sold, so a lot of the uplift in property value due to extensions etc is currently not captured by the government.

They would love that no investment in houses everyone rents and invests in shares and pensions which are far easier to rob at a whim and care costs won’t eat the mad gains from increased house prices