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

[MrXxxx]

30 minutes ago, Axeman123 said:

Surely you would be even more vulnerable as a foreigner someplace else? Also we may grumble about the UK, but rule of law and property rights are about as strong here as anywhere.

Is this the case for foreigners in the UK, so why should it be any different in any other Developed country?...also, you assume that owning property is the defacto, in many countries [Germany for example] the majority of people prefer to keep their capital more liquid, and so as a result the security of tenure/renting laws reflect this...it's only in the UK [and some others] that we are preoccupied withe "A man's home is his castle", and so as a result a) are an easy target for taxation, and b) have rental laws that favour such a scenario.

[Axeman123]

2 minutes ago, Hancock said:

This seems like fraud to me, but quite why people give what is in essence interest free loans to developers by buying off plan is stupidity.

It only makes sense in a bubble, where there is an assumption of a gain before completion and/or demand outstrips supply to the point that it is hard to actually even buy anything. I doubt we will see that business model again for many years!

[Libspero]

18 minutes ago, Hancock said:

This one seems safer.

https://www.janushenderson.com/en-gb/investor/product/henderson-far-east-income-limited/

https://www.google.com/search?rlz=1C1CHBD_en-GBGB864GB864&q=LON:+HFEL&stick=H4sIAAAAAAAAAONgecRoxi3w8sc9YSndSWtOXmNU5-IKzsgvd80rySypFJLkYoOy-KV4ubj10_UNU0pKsuPTinkWsXL6-PtZKXi4ufoAALtOqj9HAAAA&sa=X&ved=2ahUKEwjPkr-7l7b1AhXDQUEAHREvDXYQsRV6BAgUEAM&biw=1366&bih=625&dpr=1

Cheers,  but is that what you meant to link ?   I like investment trusts,  but that one is fairly heavily weighted towards financials, property and tech.   Aren't those areas that will suffer in an inflationary recession ?  Apologies if I'm re-treading very worn ground 

[AWW]

1 hour ago, DurhamBorn said:

I think though you need to know early ,very early

I agree, this is absolutely key, and something that most parents (mine included) absolutely do not equip their kids to think. School is all about getting qualifications that will allow you to get a good job. The first 5-10 years of work go by in a blur. And then you start to think about what to do with your money, aged 30.  So many years wasted with money not invested well.

[geordie_lurch]

Gazprom is almost looking 'cheap' compared to other oilies now - down 4% at $8.22 currently and a fair bit recently. I'm tempted to buy more to bring it up to match my Shell and BP holdings

[Axeman123]

4 minutes ago, MrXxxx said:

Is this the case for foreigners in the UK, so why should it be any different in any other Developed country?...also, you assume that owning property is the defacto, in many countries [Germany for example] the majority of people prefer to keep their capital more liquid, and so as a result the security of tenure/renting laws reflect this...it's only in the UK [and some others] that we are preoccupied withe "A man's home is his castle", and so as a result a) are an easy target for taxation, and b) have rental laws that favour such a scenario.

Err...I think you might be reading stuff into my comment that wasn't intended!

“People are tribal. The more settled things are, the bigger the tribes can be. The churn comes, and the tribes get small again.” Amos Burton

Talk of a dog eat dog society brings to mind property crime, from outright theft to sharp practice by tradesmen and even extortion by menaces. That would be my number one concern as a foreigner (let alone being perceived as a "wealthy" one!) in tough times.

On the subject of property rights and rule of law in "developed countries", most people would include Spain in this category. I can remember reading about Brits having their Spanish holiday homes seized and flattened without compensation after years of seemingly legal ocupation and local taxes paid etc, due to irregularities in the planning etc decades earlier without their knowledge. Most southern EU countries have byzantine legal systems, and users have to rely on personal relationships to navigate it.

[Democorruptcy]

I read some investment reports, a Troy Income today. Head honcho traded out of oil, tobacco and banks over the last 2 years. Head honcho now handing over the fund after 17 years to become Executive Vice Chairman.

https://www.taml.co.uk/Portals/0/PDFs/Legal and Reg Documents/UK Equity Income Newsletter December 21.pdf?ver=2022-01-17-163219-963

[Hardhat]

Will BP pass 400p this week?

Seems to be no stopping it.

[DurhamBorn]

 

25 minutes ago, Democorruptcy said:

I read some investment reports, a Troy Income today. Head honcho traded out of oil, tobacco and banks over the last 2 years. Head honcho now handing over the fund after 17 years to become Executive Vice Chairman.

https://www.taml.co.uk/Portals/0/PDFs/Legal and Reg Documents/UK Equity Income Newsletter December 21.pdf?ver=2022-01-17-163219-963

Their top 10 holdings  dis-inflation central .

[Yadda yadda yadda]

2 hours ago, Cattle Prod said:

I've banged on in the past about China's strategic weakness wrt to oil and gas, and the only place for them to secure supplies is in the Middle East. Emmm....

I also said that in time the USA would too, and that that would put China and the US in direct competition for the master resource. The US is asleep at the wheel, currently, literally when looking at Biden. The administration doesn't even think it's relevant to their energy policy. They either think the US is self sufficient in oil and gas / its a dead industry and should be replaced by windmills / the industry should be destroyed and let people starve or freeze / fracking will save them again. None of these things are true. 

What's interesting is that Biden is sensitive to local gas prices, in that he ordered an SPR release to quell them a couple of months ago, which of course has had zero effect. This cognitive dissonance will have to be resolved soon. There has to be a bunch of people, perhaps in the Pentagon (certainly in the Republican side of the Senate) tearing their hair out about this. This is big: The US/Saudi/GCC alliance has been in place since 1945:

If GCC countries no longer trust the US, for obvious reasons, that is possibly the biggest macro shift happening right now, i.e. the petrodollar.

Things I'll be watching for:

- Any change in US policy after the Dems hopefully get thrashed in the midterm elections

- Gas prices in the US

- Any mention of gold in GCC-China transactions. I still don't think they'll take Yuan for their oil, they have little the want to buy with Yuan (except maybe gold from the Shanghai exchange).

- Chinese arms purchases or Chinese bases becoming established in the region.

And of course, watching the dollar itself. The world currenly needs to find ~ 3 trillion dollars a year to pay for oil. What if it doesn't?!

Edit:

For the history nerds:

https://www.history.com/news/fdr-saudi-arabia-king-oil

Saudi Arabia could easily become destabilised. The Al Sauds are just the current local hegemon. Other families would happily take their local area back and then eye all Arabia.

As well as gold China could sell the Saudis a lot of solar panels. Perhaps send some near slaves over to construct and run some infrastructure too.

Taking over from America as the guarantor of Saudi security would be a big ask. That has worked very well for the Saudis. They're not going to switch horses unless they're convinced the USA can no longer be relied on to provide that protection.

Whatever Biden mutters the US must have been awakened to the dangers of rising prices recently. Although the WEF openly speaks of reducing US power as that suits big business who would usurp them as power brokers.

Edit to add that I can't see how China can be very close to both Iran and Saudi Arabia. Religious zealots have far too much power in each country.

[Yadda yadda yadda]

30 minutes ago, DurhamBorn said:

 

Their top 10 holdings  dis-inflation central .

They can buy into inflation stocks late. Someone has to. 2028 will do nicely.

[AWW]

1 hour ago, belfastchild said:

I remember almost moving to Texas once, was initially going to be on my UK T+Cs with a per diem (which was more than my entire UK salary) with movement to US T+Cs after green card/visa. I saw the 6 days a year annual leave and thought fuck that!

I used to run teams in London, New York and France.

The New Yorkers were paid about 50% more than the Londoners and French, but only got 10 days a year of annual leave. You could effectively sack the bad ones on a whim.

The Londoners got 25 days leave when they started, rising to 30 days after 5 years' service.  You could sack the bad ones, as long as you could prove to some HR drone that they were underperforming.

The French got, as far as I could work out (because it was completely opaque), around 40 days annual leave, because the French get additional days' leave if they work "long hours", which means anything more than 35 hours a week.  The bad ones were effectively unsackable.

[DurhamBorn]

15 minutes ago, Yadda yadda yadda said:

They can buy into inflation stocks late. Someone has to. 2028 will do nicely.

Interesting to see the outperformance,its been very stark the last few weeks.The amount of capital in growth and bonds is incredible so even a small outflow into value was always going to make a big difference.Hopefully it means most wont now get taken out by takeovers.That Unilever bid is shocking from their board.GSKs consumer business isnt much to talk about.I used to make some products when they needed help.Over the counter stuff is really easy to make for any pharma,feet up on the tablet machine once it was running.Generics will be able to make them much cheaper.GSK think its worth £60 billion for that part,they having a laugh.Unilever must be under massive pressure from inflation and desperate.Their woke crap turned my stomach,glad to see them squirm.

[WICAO]

2 hours ago, Axeman123 said:

...

Sometimes its best not to think about it, except if you can use that to motivate reducing that figure going forward.

...

Agreed.  I knew in earning I was being taxed into oblivion but there wasn't much I could do about it as I was chasing the £'s and a fraction of a £ earned going into my pocket was still moving me closer to the goal.  When it came to investing there was something I could do about it and I made it my mission to do so.

[WICAO]

2 hours ago, HousePriceMania said:

Forget all this oil pish, property is the way to go.

 

 

Wonder if it was 'savings' or debt that was invested...

[DurhamBorn]

4 minutes ago, WICAO said:

Wonder if it was 'savings' or debt that was invested...

Iv seen over the years it tends to be an inheritance.A family member works hard and saves,then the people inheriting spunk in on some get rich quick scheme.A lot of government and council pensions 25% tax free lump sums go that way as well.Unis are just another bubble sector.

[WICAO]

2 hours ago, CannonFodder said:

I agree with this. 

I was very happy in my job from graduation until mid thirties, it entertained me and it was a great place, never thought about retiring. Just drifted along 

Then big fall out between directors and I was collateral damage as the full reporting chain of directors left and business  imploded badly. It was an epic own goal of ceo.

Moved somewhere else, they were bought out, again i was collateral damage so i quit as new management were not nice people. 

In another firm now and i quite like the role but now I focus heavily on being financially secure as I fully appreciate the randomness and precarious nature of needing a wage.

Focus and work produces huge benefits, surprising how fast wealth accumulates.

it shocked me just how much random arbitary left field curves balls can rock a career. They really come out of nowhere too.

I like my job but I.M also realising that they be a time that i will be unable to haul my carcass out of bed at 5.00 am to shiver on a train platform with my suit and laptop.

Absolutely agree with this.  One of the big motivators (there were a few other us such as the realisation my company had absolutely no allegiance to me and would throw me under a bus if they could make £1 more profit by doing so) was experiencing China for the first time and realising that it was highly likely my job would be outsourced to one of these types of countries and their probably wouldn't be another one to go to.  One option was to retrain but instead I vowed at that time to remove the sword of Damocles from above my head as soon as possible by making work 100% optional.  From that fateful day it took me a little under 9 years to re-engineer my life and become financially independent. 

[WICAO]

2 hours ago, Funn3r said:

I've always felt a bit dislocated when working for a large company with its ultimate management in another country. I've had several. It's amazing how clueless they can be in attempting to export their own work cultures to UK. American multinationals are the worst with their "my way or the highway" thing. They just refuse to accept UK laws don't necessarily allow the kickass hire and fire that they are used to.

The different company cultures based on where HQ is located can indeed be stark and I've experienced some extremes (and taken advantage of how they operate to get what I need as you need to behave differently within them to succeed).  The other big one is whether they are the public make the quarter type organisations vs the company trying to pass on intergenerational wealth.

[WICAO]

1 hour ago, Hardhat said:

Will BP pass 400p this week?

Seems to be no stopping it.

£3.9955 just now.  Just passed what I paid for them in 2015.

RDSB at £18.848 which is still well below my 2014  buy price in the mid £20's.

[WICAO]

20 minutes ago, DurhamBorn said:

Iv seen over the years it tends to be an inheritance.A family member works hard and saves,then the people inheriting spunk in on some get rich quick scheme.A lot of government and council pensions 25% tax free lump sums go that way as well.Unis are just another bubble sector.

I've heard it said that the first generation makes the wealth.  The second generation sees what effort it took to make the wealth so they preserve it while not doing the work.  The third generation loses it as they never saw what went into getting it in the first place.

[HousePriceMania]

PMSL

 

 

[CannonFodder]

Is there why the silver chart is gonw vertical this lunch time?

[Castlevania]

2 minutes ago, CannonFodder said:

Is there why the silver chart is gonw vertical this lunch time?

US has woken up. They were closed yesterday.

[janch]

4 hours ago, DurhamBorn said:

Interesting dont you think,top risers in the FTSE 

Nice one I've got them all including RDSA which was one of the first shares I bought and I didn't know about the withholding tax (rookie error).  I never changed over as it's always been in the red (I bought before March 2020). Since the two types of share are amalgamating soon I don't need to bother

[HousePriceMania]

2 hours ago, Hardhat said:

Will BP pass 400p this week?

Seems to be no stopping it.

 

Will it pass 500p this week