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

[leonardratso]

23 minutes ago, AWW said:

My Argentinian Netflix account (£4 a month) is shared with three other households, but because I'm so generous, I let them off the quid a month that they should be chucking my way.

ive reported you to the corpse of eva peron - expect a visit. Probably never.

[With a crooked smile]

39 minutes ago, Yellow_Reduced_Sticker said:

Surely nothing to do with folks clubbing together and sharing the username and password what a bunch of TIGHTWADS

Why bother? 0% inflation on the cost of my iptv subscription for 12month. Still £50 a year, all the sky channels including ppv plus all the movies / series you want ect

[JimmyTheBruce]

47 minutes ago, With a crooked smile said:

Why bother? 0% inflation on the cost of my iptv subscription for 12month. Still £50 a year, all the sky channels including ppv plus all the movies / series you want ect

Who do you get it from?

[With a crooked smile]

28 minutes ago, JimmyTheBruce said:

Who do you get it from?

I pay to someone I used to work with he runs his own servers v reliable and been doing it for years. Lots of people online seem to be selling subs no idea how legit they are. I'd imagine they are OK. Some offer free trial for 24 hours. I use an amazon stick to install the app on. 

[CVG]

3 minutes ago, With a crooked smile said:

I pay to someone I used to work with he runs his own servers v reliable and been doing it for years. Lots of people online seem to be selling subs no idea how legit they are. I'd imagine they are OK. Some offer free trial for 24 hours. I use an amazon stick to install the app on. 

I tried asking one and I'd need a sub for every simultaneous device using it. Not great for a family

 

[With a crooked smile]

Just now, CVG said:

I tried asking one and I'd need a sub for every simultaneous device using it. Not great for a family

 

I used to pay and extra £25 for a second sub but don't any more. I think 50 is great value 

[Democorruptcy]

9 hours ago, DurhamBorn said:

The thing to remember and is always forgot by people,IFAs,MSM etc on very highly rated stocks/growth is that they have no or tiny dividends.Total return works both ways.If Microsoft pays less than 1% div and flatlines for 10 years,doesnt even go down then your return if you x out from the likes of Fundsmith will be zero after their fee,down 10% if you use an IFA,down 60% if you are in drawdown.This is the danger people miss.Companies valued so highly on earnings that what they hand to shareholders is also tiny.Companies that can sustain a divi from a much lower rating can chug along.I notice Fundsmith call them poor companies,etc and they dont want them.Mostly thats because they dont understand the macro and its affects,they think they do,but they dont.

I've just been reading Troy's latest update, what do you think of this? Microsoft got a mention!

https://www.taml.co.uk/Portals/0/Literature/Investment_Report/1 Investment Report/Investment Report No 71.pdf

[Libspero]

3 hours ago, Yellow_Reduced_Sticker said:

Surely nothing to do with folks clubbing together and sharing the username and password what a bunch of TIGHTWADS!

Losing market share to Amazon more likely..  that and people watching everything over lockdown and subsequently cancelling their subscriptions.

[Hancock]

2 hours ago, JimmyTheBruce said:

Who do you get it from?

Google Sly TV, and firebreaking a Fire TV stick.

[Innkeeper]

1 hour ago, Hancock said:

Google Sly TV, and firebreaking a Fire TV stick.

I remember reading a news piece around the time when Netflix was the only game in town for streaming ( about 4 years ago) and they had pretty much everything you could want to watch.  The author said that this would never last and in the future we would have to pay multiple vendors for the same content.  He/she was bang on.  I would never pay for a Netflix now and I have access through a multiple subscription but there’s nothing worth watching.  All the good stuff I get through NOW who will always give you a deal if you when you try to cancel and you don’t pay to watch Netflix style dire woke crap.  Currently watching The Wire and Curb Your Enthusiasm.  Proper grown up telly before it all went to shite.

[DurhamBorn]

3 hours ago, Democorruptcy said:

I've just been reading Troy's latest update, what do you think of this? Microsoft got a mention!

https://www.taml.co.uk/Portals/0/Literature/Investment_Report/1 Investment Report/Investment Report No 71.pdf

Better than Fundsmith at least.I remember last October most of the MSM were telling people to get in to the Scottish Mortgage Investment Trust and divs didnt matter you just sell some of the growth if in drawdown.1/3 down since.Still it has a 0.3% divi to cover 20% of the IFA fees.

 

 

[sancho panza]

On 20/01/2022 at 19:25, Froggy2000 said:

This comment reminds me of my mother.

My parents are mid-60's.  Both have only ever worked in government jobs.  My father retired in his early 50's on a pot worth 2 million if valued properly.  Literally 70k a year equivalent of contributions starting from day one as an inexperienced hire.

Cheap housing with mortgages inflated away.  Free university education (in fact they had grants).  3 kids starting from their mid 20's. My mother worked part time for a bit but not for long.  They consider themselves frugal but fritter money away on pointless junk.  

My grandmother passed away a few years ago and left a large inheritance (London property from x3 to x30 salary).  My mother has spent half of it "doing up the house" including several thousand pounds on taps for the second bathroom.  My father keeps the rest in bank accounts where it just sits there getting inflated away.  He considers stocks etc. "too risky" and thinks he's being sensible and in any event claims "it's not a lot of money in the scheme of things".

I avoid talking about finance or jobs or anything like that with them but they insist on bringing it up.  They start boasting about how hard they had it and then start offering unsolicited "advice".  When you try explaining a few things to defend yourself from their condescending remarks they start rolling their eyes and claim they are "only trying to be helpful".  They then start making disparaging remarks about the younger people they now sponge off.

My brother once made the mistake of asking my father for a loan for 6 months to help with stamp duty, moving costs etc. when buying a house.  My father went ballistic and started giving lectures about "sacrifice", "entitlement" etc.  They don't talk at all now.

Of course not all boomers are like the above but as a group they had some fantastic opportunities and squandered a lot.  Overall I would say their reputation is deserved.

 

It's really startling to me how few of that boomer generationare aware of how easy their generation had it in terms of hosue prices paid by inflation,final salary pensions schemes,free uni,North Sea oil etc etc.My Mum is different in that respect and often laments the cost of uni,declinign disposable incomes,HPI for the younger age deciles.

One thing that is looming is the demogrpahic timebomb which should see a repricing of young people's labour but as ever,boomer chasing politicians in London prefer to import cheap foreign labour than pay our own people a living wage.

I've laid out my doom monger thesis on here many times but I do think part of future problems will be that the expectations of elder generations won't be met by the younger ones.

I tell my eldest all the time to advise all hsi genereation to default on the princely pension promises previous generations have made in his genereations name.

On 20/01/2022 at 20:23, AWW said:

As a parent myself, I just do not understand this desire in some parents to see their kids "make sacrifices" or have life as hard as they perceive they themselves did.  I'm putting money away for my kids now.  I want them to have an easier life than me.  I want them to learn financial lessons in their teens that I didn't learn until my thirties.

Seriously, what is it? A personality defect?

I think there's some perception risk here.My Mrs had a tough life growing up in SA and all she wants is thte kids to appreciate the value of moeny and then have an easy life.I'm the same.

My Grandad raised me that way before he died.He was a big one for passing money while people needed it and not when they didn't.Quite startling to hear Froggy's story.If you don't help your kids at crucial junctures,then why bother?

I msut say though,I think teaching kids the value of moeny when young is crucial to a fuldilling adult life.I've seen spoiled rich kids and they're as unhappy as the people with nothing sometimes.

On 20/01/2022 at 22:06, Noallegiance said:

There is the 4 generation rule.

Gen 1 busts their arse and gets themselves a decent living standard.

Gen 2 sees the hard work and appreciates it but doesn't work as hard. No need.

Gen 3 sees jollying with this money stuff that seems cool.

Gen 4 is clueless about effort and sounds what's left.

My kids are gonna work for what they get.

Clogs to clogs in three generations is the old saying.That does presume though that you can't educate your way around the cyle which I think you can.I was at boarding school with some old money types and they were lovely people with their feet on planet earth.The new money was somewhat brasher .

I also remember the 80's recession when there wasn't much work.3.5 milion unemployed as I remember.Stark times if you lived somehwere that had 20 applicants for every job.

[sancho panza]

14 hours ago, HousePriceMania said:

Pishi Sunake urged to give everyone £500 because prices have gone up....because of all the money he's handed out already

 

https://www.dailymail.co.uk/news/article-10422877/Rishi-Sunak-urged-families-500-cost-living-bonus.html

 

 

You couldn't make this shit up.

Schemes like this will jsut make the eventual crash in sterling and people's expectations even worse.The only way they end is in less of the underlying commodity being available at the given price for consumers.

14 hours ago, Cattle Prod said:

"Excluding the 1914-20 and the 1939-53 periods from the post 1870 sample"

Sorry, no, Mr. Hunt, you can't do that ffs. Bad, bad, statistics. He's even rubbed them out on the graph! They are the most relevant periods to now: governments printed money for the 'national effort', suppressed rates, and then deliberately inflated away war debt (apart from the UK choosing deflation after WW1 which was a disaster, and Churchill eventually caved).

Thanks for that point CP.So obvious now you point it out.I was sat there listneing away thinking there's something worng here...but these sorts of interviews plague me because Lacy Hunt is very easy lsitening and as a former paid up member of their deflationista stable,I struggle to work out why I'm in disagreement with them,even though I know I am.I cant see any way we don't get price inflation here particularly in imported commodities

 

[Hancock]

8 minutes ago, sancho panza said:

I also remember the 80's recession when there wasn't much work.3.5 milion unemployed as I remember.Stark times if you lived somehwere that had 20 applicants for every job.

Was just discussing this earlier, i left school in 1991 during a recession, and to be offered a job as an apprentice plumber was bordering on the impossible. 

But i'd imagine the numbers unemployed would be close to 3.5 million if people had to work full time, as opposed to 16 hours to get tax credits, along with the people being paid to go to university for 3 years.

Still choose being 16 in 1991 than in 2022, as if you did settle down by the 1998/99 you'd have just about been able to afford to buy a house.

[sancho panza]

12 hours ago, DurhamBorn said:

Like me.I look after the grandkids so no childcare costs,but only if they use the savings to pay the mortgage off and they nearly have,they should be mortgage free at 33 on a nice house.They are also already building ISAs and SIPPS.When my dad goes i might by-pass myself with a lot of the money to them all,but my worry is there that divorce etc comes along and they lose it so might drip feed it to them all instead.Iv got 3 grandkids already and im only 50,my daughters are birthing well.

i worry about the kids coming into money too young and the divorce risk is ever present,

11 hours ago, JMD said:

I haven't watched the video in full yet, but in some interviews he did last year, Lacey himself admitted that his disinflation prediction won't work if Fed breaks its own rules and creates CBDC's, spends into the economy, etc. I actually think it is an important point he makes about governments breaking their own rules. However in the small part I have watched of the video they do discuss how the Fed is buying mbs's and which is apparently against the US constitutional rules - which sounds kinda serious - and yet they kinda laugh this off... Thing is, I don't think Lacey believes his own theory any more, but is too old to change his mind about his own government going 'banana republic'.

Im beginning to view the hardline deflationistas as akin to the hardline hyperinflationistas ie that the likely result will be somewhere in the middle .

I think theres a real issue that they're trying to use playbooks from the last 80 years when the economic running order that has underpinned that timeframe-the Dollar Hegemony is coming to an end.Too much focus on the Fed and not enough on where the resources are and aren't eg US birth rate circa 1.4 per woman iirc,average age creeping up,debt ballooning,printing presses running hard etc..

[JMD]

1 hour ago, sancho panza said:

Im beginning to view the hardline deflationistas as akin to the hardline hyperinflationistas ie that the likely result will be somewhere in the middle .

I think theres a real issue that they're trying to use playbooks from the last 80 years when the economic running order that has underpinned that timeframe-the Dollar Hegemony is coming to an end.Too much focus on the Fed and not enough on where the resources are and aren't eg US birth rate circa 1.4 per woman iirc,average age creeping up,debt ballooning,printing presses running hard etc..

Yes, it is why I find Victor Shvets compelling, although tbh slightly over complex for my simple brain! Anyway imho he 'gets it' in that In the near term he says the major economic/financial fallout and effects will be the result of political decision making, mmt, ubi, etc (Lacey Hunt would not be amused!). But by decade end he expects what he calls a 'great rupture' - which will usher in a new economic paradigm, effectively communism in all but name. He says these changes will happen to avoid wars or monetary collapse.                                                                                              He is a deflationist over the long term, due to tech disruption/financialisation/debt/demographics, but he sees commods and especially energy running up hard this decade. I think this chimes with this thread's focus on certain reflation assets. Not saying of course that Shvets can be 100% correct, but do think his macro landscape is worth paying attention to.                                        He's actually on the latest episode of macro voices...  https://m.youtube.com/watch?v=Q6TWk6LBxVs            ...thanks @Juniper for the link

[WICAO]

14 hours ago, HousePriceMania said:

There's no where to hide.

 

Maybe houses are the way to go now....

Real life example.  I take a snap shot of my financial position weekly and I've just updated for this week.  Wealth since peak down 1.1% measured in my new home currency AUD.

Diversified asset classes, diversified regions, minimising expenses, minimising taxes, spending only on what we value and earning a bit...

Of course none of that is going to make MSM headlines or sell clicks on Twits, Facecloth or similar.

[WICAO]

14 hours ago, AWW said:

Why don't these think tanks ever recommend a simple tax cut?

That's not going to give you a 6 figure salary for doing f*ck all is it?

[jamtomorrow]

5 hours ago, JMD said:

Yes, it is why I find Victor Shvets compelling, although tbh slightly over complex for my simple brain! Anyway imho he 'gets it' in that In the near term he says the major economic/financial fallout and effects will be the result of political decision making, mmt, ubi, etc (Lacey Hunt would not be amused!). But by decade end he expects what he calls a 'great rupture' - which will usher in a new economic paradigm, effectively communism in all but name. He says these changes will happen to avoid wars or monetary collapse.                                                                                              He is a deflationist over the long term, due to tech disruption/financialisation/debt/demographics, but he sees commods and especially energy running up hard this decade. I think this chimes with this thread's focus on certain reflation assets. Not saying of course that Shvets can be 100% correct, but do think his macro landscape is worth paying attention to.                                        He's actually on the latest episode of macro voices...  https://m.youtube.com/watch?v=Q6TWk6LBxVs            ...thanks @Juniper for the link

Saw this on ZH and thought of Shvets:

https://www.wired.com/story/rent-robot-worker-less-paying-human/

Summary if you can't be bothered to click the link: companies are now offering robots on a PAYG basis at $8/hour (compared to $15/hour for the replaced worker in one example).

Question is when the adoption of automation becomes widespread enough to affect the macro picture. Maybe we're a cycle early for the final Marxist crisis of capitalism, but exponentials and all that.

In the meantime, this might start to do weird things with wage inflation. You can see how the wages for jobs that can be automated today are going to end up capped by the cost of capital if it's just a case of picking up the phone to your friendly PAYG robotics company, especially if the employer is already being lightly roasted by labour shortages.

[Lightscribe]

18 hours ago, Axeman123 said:

Covid reopening and the fed sticking to its plan for the first rate rise in March, rather than the rumoured emergency January one.

I am considering putting this year's ISA money in an S&P500 ETF, the question is today or Monday? 

Nope can’t see it happening.

Doesn’t matter if the January rise comes now or in March. It’s coming regardless, inflation is everywhere for everyone to see and sentiment is key. Covid ending and the economy resuming will only lay bare the economic aftermath in plain sight.

The only thing that can save it now is the Fed coming to the rescue with more QE.

The expectation of the crash of the super bubble is now all over the media which may well lead to self-fulfilling prophecy. The general masses don’t know that includes their house prices yet.

I think we are very near ladies and gentlemen. The magnus kahuna could well be on the way.

[Barnsey]

33 minutes ago, jamtomorrow said:

Saw this on ZH and thought of Shvets:

https://www.wired.com/story/rent-robot-worker-less-paying-human/

Summary if you can't be bothered to click the link: companies are now offering robots on a PAYG basis at $8/hour (compared to $15/hour for the replaced worker in one example).

Question is when the adoption of automation becomes widespread enough to affect the macro picture. Maybe we're a cycle early for the final Marxist crisis of capitalism, but exponentials and all that.

In the meantime, this might start to do weird things with wage inflation. You can see how the wages for jobs that can be automated today are going to end up capped by the cost of capital if it's just a case of picking up the phone to your friendly PAYG robotics company, especially if the employer is already being lightly roasted by labour shortages.

Funny how the likes of Aldi and Tesco have just announced their first check out free stores isn't it? And we've also got the 4 day week being trialled across numerous companies, many as little as a couple years ago thought that was a pipe dream.

[JimmyTheBruce]

8 hours ago, sancho panza said:

I was at boarding school with some old money types and they were lovely people with their feet on planet earth.

Boarding school Sancho!? And there was me thinking you were a salt of the earth type 

[Lightscribe]

12 minutes ago, Barnsey said:

Funny how the likes of Aldi and Tesco have just announced their first check out free stores isn't it? And we've also got the 4 day week being trialled across numerous companies, many as little as a couple years ago thought that was a pipe dream.

I may be a month or so out on the melt up and BK etc but I’m sticking with my original timeline

 

[jamtomorrow]

14 minutes ago, Barnsey said:

Funny how the likes of Aldi and Tesco have just announced their first check out free stores isn't it? And we've also got the 4 day week being trialled across numerous companies, many as little as a couple years ago thought that was a pipe dream.

Good point. Makes me wonder how long before they take a serious crack at automating shelf stacking

[Lightscribe]

5 minutes ago, jamtomorrow said:

Good point. Makes me wonder how long before they take a serious crack at automating shelf stacking

Why would you need anyone to stack shelves, it’s just soooo pre 2020