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

[Juniper]

10 hours ago, wherebee said:

Well, the Moderna share price continues to bump lower.  My canary is looking peaky.

The other thing to bear in mind is that there are more voices now saying that the jabathon mass deaths are going to be ticking up in 2022, to the level where it cannot be concealed again.

If that happens, that would be the BK catalyst.  I'm trying to work out the front indicators of that - what they would look like in terms of the market seeing it and reacting.  Lehmans collapse, for example, was not the event.  The fed bailouts in March were the event, in my view.

I'm wracking my brains how to see the same event marker here, which the market will miss until later.

There’s something hugely satisfying about comparing that Moderna chart to the performance of my ISA/pension. 

One indicator of trouble ahead that I’ve recently come across is the Eurodollars futures curve as explained by Jeff Snider 

https://alhambrapartners.com/2021/12/01/this-is-a-big-one-no-its-not-clickbait/

Inversion happened in May 2018 and Dec 2006…see this for an outline of the latter: https://alhambrapartners.com/2018/07/06/good-reason-to-fear-the-futures/

I find Jeff Snider hard work on podcasts because he knows so much (more than me), talks fast and doesn’t always explain well but this indicator seems at least notable in predicting two previous market events.

I hope a crash will come as a result of a collapse of Moderna, Pfizer and all the others…but either way some very clued up people seem to expect some kind of event this year. 

[DurhamBorn]

5 minutes ago, JMD said:

Yes, I researched the property sites some time back, and they all seemed to concur that for HMOs, apart from offering bog standard student accommodation, alternative route is to specialise in 'doing'(!!) either divorced/working older men or young/benefits single mothers. The yields are good but still have the hassle factor, unless get an agent to manage, but not easy to find good trustworthy agents willing to manage hmo's.

No hastle really,most are spot on,one got funny with my lass i went over and slung him out the door,his brother was staying every night and others ,drugs the lot.His brother was a right clever sort talking to my lass like dirt as well,i was going to give him a hiding but my lass stopped me,i also have a very good friend in Boro called The Viking who removes problem ones if needed,he would do it for free for me.She does it as its her house and if i die etc means she still has a home,iv left her extra in my will she can add to that house to get something nicer if she wants and also she can stay in mine for 5 months after i die so she can get sorted.Its actually a very good deal for the tenants as house is nice all mod cons and most use it to get on their feet for a year or two then move on.

[JMD]

59 minutes ago, Chewing Grass said:

That brought back memories, it was normal in a 1930s Semi, remember one winter when the ice was on the inside of the bedroom window (must have been less than -10C outside) putting a couple of coats on top of the bedding as extra insulation before going to sleep.

Waking up in the morning with the fancy ice patterns on the glass with sunrise coming through the window was a thing of frigid beauty.

Yes those crittall windows were a real blast!!                    ...but thank you (sincerely btw)) for reminding me of those fancy ice patterns.

[HousePriceMania]

2 hours ago, MrXxxx said:

...and this is why I 'gave up' recently and said "If I can't beat them I will join them...and if I can't join them the least I will do is pay as little to support them"...I was [naively] bought up to believe that "to get the best out of life you had to work for it", but when I looked around myself, saw that this was not the case, and that I was being 'mugged off' I decided that it just wasn't true anymore.

I remeber being told...Cheaters never win.

 

I now tell my kids....Cheaters always win, look at the government.

[CannonFodder]

Or tell them

"Dont steel, the government doesnt like competition."

[HousePriceMania]

23 hours ago, Hancock said:

We've been in Disney money land since the late 90s where people have made life changing sums of money for living in their average house .... parents were encouraged to separate and/or work part time so the govt could hand them other poeples and borrowed/printed money via working/child tax credits.

The last 2 years with Covid has been the biggest free handout of money in human history .... but from what i can make out, that epic handout now means interest rates rise and govts can't print any more.

When that finally dawns on people and the markets, financial reality kicks in for people/companies with debt and those reliant on free handouts, which included western govts who have been bribing the electorate with funds from the magic money tree.

 

They can keep printing.  Governments have done it in the past.  Collapse ultimately follows though.

The question is...how far will Sunake/Powell/The Criminal Lagarde etc go before something really gives, I dont think they'll stop till something does.  Maybe house prices up 20% in a year, Inflation at 10% is a warning sign, but look at IRs and look at inflation, they aint for stopping.

Now I read insurance companies are piling into the housing market, with prices at all time unaffordable levels.

It's like they are being incentivised to do this, maybe to collect on the middle classes savings via wealth redistribution/Housing benefit.

Thatchers end game.  

 

[Democorruptcy]

10 hours ago, wherebee said:

Well, the Moderna share price continues to bump lower.  My canary is looking peaky.

The other thing to bear in mind is that there are more voices now saying that the jabathon mass deaths are going to be ticking up in 2022, to the level where it cannot be concealed again.

If that happens, that would be the BK catalyst.  I'm trying to work out the front indicators of that - what they would look like in terms of the market seeing it and reacting.  Lehmans collapse, for example, was not the event.  The fed bailouts in March were the event, in my view.

I'm wracking my brains how to see the same event marker here, which the market will miss until later.

Are you sure a problem couldn't be concealed? They have tested so many people using PCR's that give false positives but once tested positive any problem can be blamed on covid.

The thing I wonder about is productivity. It's not happened here much but won't these jab mandates mean a lot of people are going to lose their job and have to take something that pays less? In the USA airline pilots, medical staff etc losing jobs to do what? It create vacancies in their jobs but stuff like that takes years of training. Isn't that going to shrink GDP? Yet everything seems to be booming? What are our NHS staff going to do if we actually do a mandate? Become part time barista's on tax credits?

[DurhamBorn]

Interesting looking at Unilever today,one we highlighted as in the danger zone for inflation hitting them hard.Market is smacking them because they dont like the idea of them over paying for GSKs consumer business (its a good business,but pedestrian).However the real story is why? Its because most of their business is seeing margins eroded by inflation and they are desperate to move into areas that can swallow inflation more.

Fundsmith the darling of the middle class dont understand the cycle we are in,their positioning is terrible.

[JMD]

54 minutes ago, DurhamBorn said:

No hastle really,most are spot on,one got funny with my lass i went over and slung him out the door,his brother was staying every night and others ,drugs the lot.His brother was a right clever sort talking to my lass like dirt as well,i was going to give him a hiding but my lass stopped me,i also have a very good friend in Boro called The Viking who removes problem ones if needed,he would do it for free for me.She does it as its her house and if i die etc means she still has a home,iv left her extra in my will she can add to that house to get something nicer if she wants and also she can stay in mine for 5 months after i die so she can get sorted.Its actually a very good deal for the tenants as house is nice all mod cons and most use it to get on their feet for a year or two then move on.

Interesting point you make, the social positive of providing accomodation until those guys get back on their feet. Actually It's something I read landlords saying over again on those property sites I mentioned. Not a popular thing to say on here perhaps, but then again I expect your partner's 350/month rent (I think that's what you mentioned as rent?) is cheaper than your local council could provide, and at better quality, service I bet... Plus with 'the Viking' on hand to sort problems, I assume there is no downside for the neighbours, after all far more effective than the local police force/farce (those police officers who aren't already retired, and landlords themselves, of course!!!).

[Democorruptcy]

3 minutes ago, DurhamBorn said:

Interesting looking at Unilever today,one we highlighted as in the danger zone for inflation hitting them hard.Market is smacking them because they dont like the idea of them over paying for GSKs consumer business (its a good business,but pedestrian).However the real story is why? Its because most of their business is seeing margins eroded by inflation and they are desperate to move into areas that can swallow inflation more.

Fundsmith the darling of the middle class dont understand the cycle we are in,their positioning is terrible.

I noticed Terry having a go at Unilever last week, might be adding to their drop today

https://www.investmentweek.co.uk/news/4043084/terry-smith-slams-unilever-company-esg-focus

[Hancock]

56 minutes ago, CannonFodder said:

There.s a massive difference between one household on a single income of 60k, and another household on two incomes of 30k.

Tax thresholds will hit anyone single disportionately. Even more if children in household and child benefit removed

You'd think to encourage the family unit, that our beloved govt would allow married couples to merge their tax allowances.

[Hancock]

55 minutes ago, JMD said:

I heard a commentator say that for the average elec/gas consumer, their bill was 20% green levies. Not sure if that is accurate. Does anyone know the elec and gas breakdown figures for the UK?

The average house has gone up by circa 40/50k in 18 months, funny how TPTB never mention this rise in what people have to fork out to survive.

[kibuc]

1 hour ago, AWW said:

£60k is only £3.5k a month in your hand. It's not much. We spend nearly that much in a month just on rent, bills, food and diesel. With real inflation at 10%, that "not much" will become "not enough" very quickly.

I know there are some very frugal people on here, but I can't see how you can retire at 50 on such a small amount of money, unless you own a house outright.

For me and my family the two biggest-ticket items are 1) Bills & rent, obviously but also 2) good-quality food.

We eat a lot of nuts and seeds, and these are expensive. Free-range eggs and beef, duck instead of chicken, pole-and-line fish, organic fruit and veg for our family of 4 is easily over £1000, close to 1200-1300.

We are frugal as in we don't splash out on things we don't need or consider overvalued. We holiday in Wales (£1100 for 2 weeks), don't eat out, spend weekends on long walks or bike rides, buy clothes & books in charity shops, drive under 4k miles a year in our second-hand car and keep our tech for years... BUT we're not afraid to spend where it makes clear difference to our quality of life, and not many things affect it more than the food you eat.

£60k should just about cover it, but I cannot see ourselves saving a whole lot on that kind of income.

[DurhamBorn]

1 minute ago, JMD said:

Interesting point you make, the social positive of providing accomodation until those guys get back on their feet. Actually It's something I read landlords saying over again on those property sites I mentioned. Not a popular thing to say on here perhaps, but then again I expect your partner's 350/month rent (I think that's what you mentioned as rent?) is cheaper than your local council could provide, and at better quality, service I bet... Plus with 'the Viking' on hand to sort problems, I assume their is no downside for the neighbours, after all far more effective than the local police force/farce (those ones that aren't already retired landlords themselves of course!!!).

It includes all bills as well,so its a bargain,cheapest rent including bills would be £600 a month in a shithole.If i was advising any young guys id say rent a room and save like crazy.Most we get are spot on etc.We have given people free months rent etc if they got laid off,treat as i would want to be treated.

[JMD]

12 minutes ago, DurhamBorn said:

Interesting looking at Unilever today,one we highlighted as in the danger zone for inflation hitting them hard.Market is smacking them because they dont like the idea of them over paying for GSKs consumer business (its a good business,but pedestrian).However the real story is why? Its because most of their business is seeing margins eroded by inflation and they are desperate to move into areas that can swallow inflation more.

Fundsmith the darling of the middle class dont understand the cycle we are in,their positioning is terrible.

I understand that Johnson & Johnson are also splitting off their own consumer division next year.

[AWW]

1 hour ago, DurhamBorn said:

I never earned more than £36k a year retired at 49,and had 12 years off between 21 and 49,5 of them travelling around the UK shagging women .Owning my house outright was key.BAT paid half of it off with divs,the other half Arriva shares,5 x them in a short period and paid mortgage off with it.I started saving and investing at 14 with my milk round money.My home town was brutal in the early 80s,80% unemployment and crap bennies then.You had to learn quick how to survive and make money outside of employment.

Exactly. This option is not available to people earning £60k a year in large parts of the country.

[AWW]

1 hour ago, CannonFodder said:

There.s a massive difference between one household on a single income of 60k, and another household on two incomes of 30k.

Tax thresholds will hit anyone single disportionately. Even more if children in household and child benefit removed

The government wants both parents working, as that then creates another job (and source of taxation) in the form of childminders.  I'm the sole earner in my household.  We don't get child benefit, we don't get tax relief on nursery fees, I don't even get a personal allowance FFS. It's our choice, as we want our kids to be brought up by their parents, not childminders.

The amount of tax that is taken off me is, frankly, sickening. Obviously, we're pretty comfortable, but we're not rich by any means, and while the loss of child benefit is obviously unwelcome, I can understand it. The loss of personal allowance, however, just boils my piss, and it happens right around the salary range to properly fuck over those who are doing alright.

[dnb24]

2 hours ago, Cattle Prod said:

Russell Napier has pointed out this happening during the covid crash:

Written almost exactly one year ago. Magic money tree in the UK to get around BOE withdrawl QE? As he says, politicans are going to love doing this, and now they know they can get away with is. Create an energy crisis, loan them money to fix it. I wonder do they realise that this is the a Mafia model of business?

Do you have a link CP? Cheers

[HousePriceMania]

42 minutes ago, Hancock said:

You'd think to encourage the family unit, that our beloved govt would allow married couples to merge their tax allowances.

What if you were running a scam on behalf of your mates and wanted to increase demand for housing whilst limiting supply ?

We dont have a government running the country is a sensible sustainable manner, we have a government hell bent on profitting 1% of the population.

[Juniper]

Nasty oilies buying offshore wind farms again:

ScotWind offshore auction raises £700m https://www.bbc.co.uk/news/uk-scotland-scotland-business-60002110 

Some classic snippets in that article too:

“But we've already largely decarbonised our electricity sector. So, why build more offshore wind farms?”

To be fair he then references green hydrogen for storage.

also:

“The auction was originally meant to close at the end of March last year, but was delayed after a parallel English and Welsh auction resulted in far higher prices than expected. At risk of losing out on hundreds of millions of pounds if it stuck to its original auction price guidelines, CES raised the cap for the auction bids from £10,000 to £100,000 per square kilometre.“

[CannonFodder]

1 hour ago, AWW said:

 

The amount of tax that is taken off me is, frankly, sickening. Obviously, we're pretty comfortable, but we're not rich by any means, and while the loss of child benefit is obviously unwelcome, I can understand it. The loss of personal allowance, however, just boils my piss, and it happens right around the salary range to properly fuck over those who are doing alright.

Not that it applies to you but If you have a 3 or 4 year old; you loose the 30 free hours childcare as well as personal allowance. That means you dont actually keep anything from 100 to 125 after paying for the childcare from own pocket

[Harley]

1 hour ago, DurhamBorn said:

Interesting looking at Unilever today,one we highlighted as in the danger zone for inflation hitting them hard.Market is smacking them because they dont like the idea of them over paying for GSKs consumer business (its a good business,but pedestrian).However the real story is why? Its because most of their business is seeing margins eroded by inflation and they are desperate to move into areas that can swallow inflation more.

Fundsmith the darling of the middle class dont understand the cycle we are in,their positioning is terrible.

ULVR gaps down while GSK gaps up! 

[AWW]

5 minutes ago, CannonFodder said:

Not that it applies to you but If you have a 3 or 4 year old; you loose the 30 free hours childcare as well as personal allowance. That means you dont actually keep anything from 100 to 125 after paying for the childcare from own pocket

Yes, I have two under 5s. I'd forgotten that some of their nursery was funded - I lost that and tax relief on what they call the "quality premium", i.e. the amount on top of the government funding that's actually required to provide a good quality environment in which the kids learn, rather than being shoved in front of a screen.

[Harley]

1 hour ago, Hancock said:

The average house has gone up by circa 40/50k in 18 months, funny how TPTB never mention this rise in what people have to fork out to survive.

Classic.  People get the noddy appreciation (not real as in you need somewhere to live) while having to pay out real money on real things they need.  Fake asset rich, real cash poor.  TPTB have played a blinder as most sucked it up.  Economic lesson in real value, etc incomming.  Per my earlier post, don't cry into their stale beer.

[Harley]

1 hour ago, Hancock said:

You'd think to encourage the family unit, that our beloved govt would allow married couples to merge their tax allowances.

In Germany they would apportion married joint income in such a way as to minimise the move into the higher tax bands.  Contrasted with a well paid singleton who got relatively shafted.  Another example where the talk of the UK having internationally low tax rates was mostly BS.