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

[jamtomorrow]

31 minutes ago, Harley said:

Exactly, as I have been saying from a few years back.  The burning building metaphor, etc where the burning building is the current system.  You don't necessarily (i.e without challenging) want to be optimising things within (i.e. with reference to) the building.  Best to step outside and see the bigger picture to decide on your yardstick.  You need to choose your unit of measure very carefully at this turning and have eyes in the back of your head to consider things in the round (i.e. relativity).  And choosing a uom leads on to the whole discussion of true "value" in it's widest form.  The picture I have is of the German lady in her furs rummaging through the ruins of post war Germany or even the hyperinflation before, or worse as seen only recently in Venezuela. 

Interesting timing @Harley - I just reached my own "loss of faith in units of account" breaking point, and so I've decided I'm going to find a way to track the performance of my investments using any yardstick I like, instead of USD/GBP/whatever.

I'm thinking of using something like M2 as an initial yardstick, but maybe I'll end up with some kind of energy/currency/commodities basket. Dunno at this stage, but open to ideas.

I've not seen any off-the-shelf solutions that let you do this, and being handy with a compiler I thought I might as well lash together something of my own that does *exactly* what I want. I keep my own investment accounts in full anyway, so the data is already "there" and easy to export and process.

I'm hoping it'll be interesting. What I expect to find is that some investment pots that seemed to hold up by a fiat yardstick don't look at all as rosey through a better "lens", whilst others that appeared to grow have actually just flatlined. We'll see.

[HousePriceMania]

Finally, something that explains fully why the market went up yesterday....

 

 

[Wheeler]

7 minutes ago, DurhamBorn said:

People saving in pensions that goes into tracker type funds,60/40s have big weighting in tech.

That’s a key thing to remember; a lot of investment into big tech is involuntary. As long as people in the US (mainly) are working and contributing to a pension then the demand for big tech stocks will hold up. I know the price is set at the margin but this passive flow will mean that things will last longer than anyone rational will believe, but as collapse faster and deeper when it finally falls. Just my opinion of course.

[DurhamBorn]

18 minutes ago, Yellow_Reduced_Sticker said:

Just as predicted on here!

 

"State pension age changes keep thousands more in paid work"

 

Anyways...are YOU guys feeling chirpier today with the markets UP?

 

My tea leaves are telling me markets are down tomorrow, I'll even bet (YRS packet of pork chops ) it will happen, any takers? @MrXxxx

66 year olds paying for 25 year olds bennies because some other 66 year olds (mostly ex government/council workers) have big state funded pensions and a few BTLs.Its easier to make someone whos worked for years to work longer than make a bennie claim work.State pension is only going up to pay for working age bennies,they know it,but lie of course.

[DurhamBorn]

14 minutes ago, Wheeler said:

That’s a key thing to remember; a lot of investment into big tech is involuntary. As long as people in the US (mainly) are working and contributing to a pension then the demand for big tech stocks will hold up. I know the price is set at the margin but this passive flow will mean that things will last longer than anyone rational will believe, but as collapse faster and deeper when it finally falls. Just my opinion of course.

Thats right,and as value areas increase instead then trackers have to buy more.Thats why liquidity and inflation are key to see where the likely tailwinds are.

[Libspero]

40 minutes ago, Yellow_Reduced_Sticker said:

 

My tea leaves are telling me markets are down tomorrow, I'll even bet (YRS packet of pork chops ) it will happen, any takers?

Volatility storming the markets.. but still feels like a falling knife.   Only closed up in the US towards the close yesterday..  short covering?  I don’t think that’s a good sign of a strong / persistent recovery. 

[Loki]

3 minutes ago, Libspero said:

Volatility storming the markets.. but still feels like a falling knife.   Only closed up in the US towards the close yesterday..  short covering?  I don’t think that’s a good sign of a strong / persistent recovery. 

Not even Hunter is calling his massive melt up forecast it a strong/persistent recovery 

[HousePriceMania]

3 minutes ago, Libspero said:

Volatility storming the markets.. but still feels like a falling knife.   Only closed up in the US towards the close yesterday..  short covering?  I don’t think that’s a good sign of a strong / persistent recovery. 

It's good to see the oil/energy and telecom shares bounce back strongly today, meanwhile....

 

[Harley]

46 minutes ago, jamtomorrow said:

Interesting timing @Harley - I just reached my own "loss of faith in units of account" breaking point, and so I've decided I'm going to find a way to track the performance of my investments using any yardstick I like, instead of USD/GBP/whatever.

I'm thinking of using something like M2 as an initial yardstick, but maybe I'll end up with some kind of energy/currency/commodities basket. Dunno at this stage, but open to ideas.

I've not seen any off-the-shelf solutions that let you do this, and being handy with a compiler I thought I might as well lash together something of my own that does *exactly* what I want. I keep my own investment accounts in full anyway, so the data is already "there" and easy to export and process.

I'm hoping it'll be interesting. What I expect to find is that some investment pots that seemed to hold up by a fiat yardstick don't look at all as rosey through a better "lens", whilst others that appeared to grow have actually just flatlined. We'll see.

An example of economic daftness (as usual not inherent daftness just inherited daftness from those who take it too far!) is the assumption we're all rational actors constantly seeking to maximise our objective (note not normally subjective) function.  OK, technically "utils" whatever those are or how they are judged in a standardised form!  But not a bad concept at all, even if 90% of people optimise what they're "given" (i.e. someone elses function!), especially at the level of the self (which is a bit of a bugger for economics!).  So yes, define objectives, tradeoffs, relative values, degrees of freedom, etc and invent a yardstick to measure that (spoiler: it involves a lot more than "economics"!).  I'm off to split logs before the rains.  Objectively these logs will be consumed for heat and save money after some sort of cost accounting.  But then I'm also going out to split logs because I choose to and can and that also fills me with warmth, a warmth I can increasingly measure, relatively speaking.  Increasingly so as the oppression grows and the building burns some more.

Tl,dr:  it's a turning, all bets are off!

[Harley]

39 minutes ago, HousePriceMania said:

Finally, something that explains fully why the market went up yesterday....

 

 

Fine saying that but my Russian assets aren't doing so well atm!

[AWW]

42 minutes ago, HousePriceMania said:

Finally, something that explains fully why the market went up yesterday....

 

 

Disclaimer: Over time those assets can go down.

[manservantjerkins]

1 hour ago, Cattle Prod said:

It's interesting to parse that article, isn't it. BBC spouting the govt line, or thick journalist? Who knows.

Is shortly followed by:

Really? Give me some of those gilts baby, I'll load the f'n boat! A bit further down:

Ah dammit, only a quarter now. Who are the lucky sods who have those gilts, can't be all NS&I, can it?

So if a quarter are RPI linked, it means that three quarters are not. So three quarters of the debt is below the level of inflation. Because it's government debt, they get nice low fixed rates, it's being eroded away at a rapid pace. The three quarters being eroded far exceeds the quarter that is going up with inflation. Now do you have to be thick, or a propagandist to not notice this?

And there is a monumental gaslighting threaded through it: owners of that debt (such as the BOE pension fund) have their savings protected from inflation. But YOU don't, plebs:

https://www.theguardian.com/money/2022/jan/23/hopes-shattered-as-banks-fail-to-pass-on-interest-rate-rise

"Hopes shattered" .. wft? Ok, again, thick journos aside, who was really banking on a .25% rise in deposit interest to save their asses? Inflation has just wiped out ~30 years of that interest income in the year you've been waiting for it. In a related matter, my son has recently started secondary school, and I've had to write to his maths teacher twice to ask why he doesn't have a textbook. There isn't one, apparently. When the f'n hell did that happen?? 

I'm 32 now, but our secondary school had a stupid self directed maths system called SMILE for years 7, 8 and 9. No textbooks, just "cards" with various problems that you'd get assigned and work through. Everyone in the class was doing a different thing.

Lazy 11 year old me thought this was a godsend as no one noticed how little work I was doing.

[Harley]

37 minutes ago, Libspero said:

Volatility storming the markets.. but still feels like a falling knife.   Only closed up in the US towards the close yesterday..  short covering?  I don’t think that’s a good sign of a strong / persistent recovery. 

Does my head in.  Best I wait until the end of week and decide then what trades for next week.  I do have a few positions where I'm over allocated for the current setup.  Like ABDN where I'm three of three ladders in when I should be two max.  That comes from hanging around with the wrong sorts and them leading me astray! 

[Harley]

1 hour ago, jamtomorrow said:

What I expect to find is that some investment pots that seemed to hold up by a fiat yardstick don't look at all as rosey through a better "lens", whilst others that appeared to grow have actually just flatlined.

Pretty much guaranteed.  Just measure longer term UK house prices in say gold. They've played a blinder.  Even better, they've roped the young in to play in that boxed narrative too rather than take a step back and realise they can't afford a house for far more profound reasons.  People are fighting over a smaller share of the (real) pie.  But what you don't measure (properly).......

[Lightscribe]

Looking like another 2%er downwards today. Excellent for trading the volatility swings.

[HousePriceMania]

Worth a read

https://www.fool.co.uk/2022/01/24/where-will-the-bp-share-price-go-in-the-next-10-years/

Where will the BP share price go in the next 10 years?

 

All things considered, I remain cautiously optimistic about this firm’s future. There is no shortage of challenges for management to overcome. But suppose the company can fulfil its green energy ambitions. In that case, the BP share price could be trading at a much higher valuation by 2030
 

Time to sell, the fools have jinxed it.

[Harley]

4 minutes ago, HousePriceMania said:

Worth a read

https://www.fool.co.uk/2022/01/24/where-will-the-bp-share-price-go-in-the-next-10-years/

Where will the BP share price go in the next 10 years?

 

All things considered, I remain cautiously optimistic about this firm’s future. There is no shortage of challenges for management to overcome. But suppose the company can fulfil its green energy ambitions. In that case, the BP share price could be trading at a much higher valuation by 2030
 

Time to sell, the fools have jinxed it.

Idiocy = someone predicting a share price in the next 10 years.  I have productive work if they are in need of it!

[HousePriceMania]

9 minutes ago, Harley said:

Idiocy = someone predicting a share price in the next 10 years.  I have productive work if they are in need of it!

Are you having a go at DB ?  

[AWW]

My eldest starts school in September. Having visited all the local primaries and spoken to the people who might teach her, frankly, I'm dreading it. It's abundantly clear to me that she would learn far more in an hour or two at home than she will in a full day of school. Of course, academic progress is only part of it; kids need to be able to make friends, work with others, deal with conflict etc.  I wish a hybrid model was more widely available - say, 3 days a week in school, 2 days at home doing some real learning!

[Hancock]

2 hours ago, Cattle Prod said:

, my son has recently started secondary school, and I've had to write to his maths teacher twice to ask why he doesn't have a textbook. There isn't one, apparently. When the f'n hell did that happen?? 

I done the same, as ive no idea what they're up to.

I've been paying for maths private tuition, and its paid dividends as she's in set 2 out of 9 ... but as i can still just about do year 7 maths, i'm going to pay for one of these online learning courses .. just need to find out which is the best.

Something like this one - https://uk.ixl.com

[Harley]

19 minutes ago, HousePriceMania said:

Are you having a go at DB ?  

No, I consider cleaning out your pond for the frogs to be productive work! 

[Axeman123]

46 minutes ago, Lightscribe said:

Looking like another 2%er downwards today. Excellent for trading the volatility swings.

retesting yesterdays interday lows maybe?

[MrXxxx]

17 hours ago, CannonFodder said:

There is huge rotation happening as sp500 not much changed.

Take a look at the unweighted S&P 500...those  FANGS have a lot to answer for!

[sancho panza]

On 22/01/2022 at 10:35, DurhamBorn said:

Regulator gave BT inflation+ increases when they thought the BOE told the truth  Everyone in telcos follows the backbone network incumbents.BT would just go to court and win.Telco contracts are cheap,i think government will be looking elsewhere.Lewis is a twat,he spends his life trying to get shirkers bennies paid from tax and NI of young white men working in warehouses on low wages.Just another woke warrior bankrupting the currency.

I thought it was very interesting that yesrday when the market tanked,the telecoms had a fair amount of green on screen.

 

I've got teh rpofits from Total/ENI we took last week to plough into telecoms(base bet went back into shell/bp),I was hoping for some red to pick up more orange/tef/tef deutsch but not much movement and they're all up again today.Vod also at 125....I wonder if we've seen the bottom for telecoms now and we're going to be laddering up as opposed to ladering down?

Was hoping oilies would stay down some time here as Id like to rebase my options game but straight back up today

On 22/01/2022 at 10:43, AlfredTheLittle said:

I think this has actually stemmed from the police. If the police refuse to even attend, let alone prosecute, shoplifting, then there's not a lot the supermarkets can do. 

I see this as part of the general breakdown of public services, which are sucking more and more out and giving less and less in return. People will respond by opting out so we become more like an old southern European economy with high tax rates, low productivity, and nothing functioning.

We will have societal breakdown at some point and the police will be revealed as impotent.

a) there's not enough of them,there really isn't.Big cities circa 300,000 may have 10-15 cops on at night depending and that's before you need some help in rural areas miles away from the conurbations

b) they've gone from taking ex para regt and teaching them some law to wanting graduates with diversity training.The latter are fine while the streets are calm but we saw with the BLM riots how they were easily outgunned if the mob fights back.

I wouldn't want to be a shop keeper in 5 years when inflation up 6% pa and wages/benefits haven't kept pace

On 23/01/2022 at 17:41, Axeman123 said:

Gove's cunning plan to solve the flammable cladding remediation crisis looks to be "shake down private companies". I wonder how many other difficult issues will be reframed in the same way by governments over the cycle, now that just writting a big cheque isn't such an appealing option?

https://uk.finance.yahoo.com/news/gove-threatens-trading-ban-cladding-165436368.html

They could have solved the cladding crisis with 10% of the track n trace budget.

[manservantjerkins]

26 minutes ago, Cattle Prod said:

It's nuts, his is all online 3rd party websites with questions set by randomers. He gets thrown a problem covered 8 months ago so I go 'where is your textbook' so we can flick back and check the method, as has been done since Gutenberg invented the printing press. No more...

I'm all over him like a rash on maths, which he doesn't much like, but will thank me for later. Whenever I see this kind of stuff I just think "ah well, less competition for him from his peers in the future". As the innumeracy of that BBC article shows, being numerate will put you at a massive advantage over most of the population. As almost everyone on this thread knows, of course.

Trying to revise for exams was ridiculous. Luckily we had a semi militant maths teacher living across from us and we were friends with his son.

It also came with literally having to queue up to ask the teacher questions, as everyone would be getting stuck on different things and you could easily waste over half the lesson. You couldn't even ask someone else, as they were doing something different.