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

[Bobthebuilder]

6 minutes ago, Libspero said:

Sorry..  not familiar with the terminology.   BK list?

Big Kuana = massive stock market crash.

[BadAlchemy]

BK list. All the things you're gonna put in your BK truck...

[Loki]

Apologies for slight derail but does anyone know if it's possible to see how many margin calls were issued/positions closed by the recent correction?

[HousePriceMania]

Someone send me this link...on tonight

 

[Majorpain]

1 hour ago, CannonFodder said:

This seems an interesting link, over 94% chance of holding rates they say

https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html#

Edit to say if you click on different meeting dates, you get those odds too

If they hold rates this week Fed inflation credibility must surely be shot, stock markets will go up but i cant imagine the market waking up to inflating the debt away is going to do bonds any favours.

[sancho panza]

4 hours ago, CannonFodder said:

There was a time that talented females had very few options and teaching was one of those options. a womans place was assumed by society to be connected to children 

Intelligent and wanting to do something mentally stimulating then teaching was the route.

As the private sector has opened up and society changed, teacher intake has suffered as candidates have better options now. 

On the matter of resignations,the revolving door is seeing more people exit the Ambulance service this month.Vaxxed leaving due to stress,hatred of nights and unvaxxed leaving for those two reasons plus getting out ahead of the hangmans chop.

Never seen sentiment so negtive and that's in a sector that likes a moan(much like the military).Currently,the cracks are being covered,by replacing 6/10 year experienced staff with trainees fresh from the basic training,but we're starting to push on a string.From what I'm hearing from coppers I meet on shift,there are huge retention issues in places like Birmingham as well.It's not just us.

The bulk of the people defying the vaxx mandate that I know are all 5+ year expereinced but given the youth of the mabulance service ,it's about 10% of the workforce and some are succumbing to the fact that they have bills to pay.

Some leaving the sector all together,others looking for an easier time elsewhere doing days.

If Bj's wish was to break the NHS,then I think the Big Pharma overlords will be pretty happy.

2 hours ago, CannonFodder said:

This seems an interesting link, over 94% chance of holding rates they say

https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html#

Edit to say if you click on different meeting dates, you get those odds too

It's the old Luke Gromen 'Fed trying to ride two horses with one ass' quote.I have a feeling they won't be as agressive as they've claimed they will be for a variety of reasons,not least that they'll be hoping the inflation is transitory,so I suspect they'll be behind the curve raising.Fed generally use hope as a strategy and I see no reason to alter that view

Other coutnries are raising which will reinforce the down trend in the $

52 minutes ago, Loki said:

Apologies for slight derail but does anyone know if it's possible to see how many margin calls were issued/positions closed by the recent correction?

Doug Short tracks it but a month behind,that's all the data available

https://www.advisorperspectives.com/dshort/updates/2022/01/19/margin-debt-down-0-93-in-december

 

[Loki]

@sancho panza nice one cheers!

[sancho panza]

27 minutes ago, Majorpain said:

If they hold rates this week Fed inflation credibility must surely be shot, stock markets will go up but i cant imagine the market waking up to inflating the debt away is going to do bonds any favours.

The Fed will have credibility for some time as the big bank economists are beholden to them.

At some point the bond market will catch pneumonia metaphorically speaking and willbe coughing red phelgm for some time

[HousePriceMania]

It seems Microsoft just tanked after trading based on actual earnings....

 

MSFT

Microsoft Corporation Common Stock

$276.75 -19.62 6.62%

[Majorpain]

29 minutes ago, sancho panza said:

The Fed will have credibility for some time as the big bank economists are beholden to them.

At some point the bond market will catch pneumonia metaphorically speaking and willbe coughing red phelgm for some time

Other way round, the big US Banks own the fed, so that should not be a surprise!  Was the same in UK until Attlee nationalised BOE.

https://en.wikipedia.org/wiki/Bank_of_England_Act_1946

Bit of rock and hard place really, small hike for fig leaf inflation and stock market goes pop, stay put and bonds blow up or lower and kneecap dollar (and everything blows up?)!

[HousePriceMania]

6 minutes ago, Majorpain said:

Other way round, the big US Banks own the fed, so that should not be a surprise!  Was the same in UK until Attlee nationalised BOE.

https://en.wikipedia.org/wiki/Bank_of_England_Act_1946

Bit of rock and hard place really, small hike for fig leaf inflation and stock market goes pop, stay put and bonds blow up or lower and kneecap dollar (and everything blows up?)!

it's having to pick hanging or lethal injection.  You're trapped, you know the end results but you gotta pick.

Always worth remembering, greedy people will always pick the path that keeps their wealth in tact.

So assets/hyperinflation it is,m expect -ve rates and another $10Tn QE...I wish I was joking.

[CannonFodder]

1 hour ago, Loki said:

Apologies for slight derail but does anyone know if it's possible to see how many margin calls were issued/positions closed by the recent correction?

Short tracker useful for uk shares for history of any one company

https://shorttracker.co.uk/

[MrXxxx]

5 hours ago, DoINeedOne said:

Partner is a TA at a primary school, honestly the stories i hear from her not only about the budget, but kids, parents and staff always leaving its like a shitty run company 

Even she who loves working with the kids is now looking else where

I think just in the last year they have lost 4 of there best teachers and 2 TA's

 

The weird one for me was when she told me the school just bought a shit ton of iPads even though they were not needed, why i asked?

if they don't use up the budget they won't get the same next year 

So you're not rewarded for spending money efficiently or making savings, no that comes from the trust its under they want to spend as minimum as possible per school they run, no doubt so they can pay them selfs better

 

But currently they don't have money for anything staff member off can't afford cover 

Kids with special requirements or behaviour issues Trust gets extra funding but they spend so much time on these kids that the rest of the class suffers but hey we got extra funding 

 

Honestly you couldn't make some of the stuff up if you ran a company like it it would be bankrupt 

 

Like most government services its easy spending someone else's money

..and then I 'laugh' when people harp on with the Daily Mail narrative "Teachers have got it easy, they only work from 9-3.30, only work 30 weeks of the year, and are on 'holiday' for two months in the summer" YET a) don't ask why there is a shortage of teachers, and b) if it's so 'cushy' why they haven't become a teacher/are teaching....I would suggest that your partner tries another school before leaving the profession as we need good/motivated teachers, and the rewards can be beyond financial ones.

[MrXxxx]

4 hours ago, Joncrete Cungle said:

In the 90's under Blair the government decided everyone had to do one technology subject when taking their options in year 9, however the school I was at didn't have enough woodwork / metalwork kitted out classrooms or teachers.

I was off the week the letter went home, so by the time I returned it all the woodwork and metalwork classes were full. So the head of year burst into the lesson I was in and announced as punishment for being off farming I HAD to do food technology.

I asked him to explain to me and the rest of the class how 2 years in a class with the better looking lasses in the year was supposed to be a punishment. He slammed the class room door and stormed off. I learned how to cook and had a very good time with one of the better looking lasses who was out of my league for the next two years. 

Serendipity...funny how life sometimes works out for the best! :-)

[HousePriceMania]

Love Sven

 

 

[DurhamBorn]

6 hours ago, Lightscribe said:

Interesting spoons has always been on my watch list.

Everyone likes cheap booze in a recession (as cheap as inflation allows compared to other establishments which will be closing down due to footfall and costs).

Could give Martin a bit of a monopoly. Haven’t got any exposure to the sector as Diageo was always too expensive so spoons could be worth a punt for me.

Was out in Durham today for a meal with the other half and called in Spoons for two refillable coffees,£1.98 for two .It was really busy at 5pm,coffees,meals,older,lots of younger,,some having a few pints.Pint of carlsberg £2.49,bottle of wine in an ice bucket £6.99.Lots of youngsters having a gin etc.Fantastic business and provides a fantastic service for people.

[mcdongle]

21 hours ago, WICAO said:

The last couple of weeks have been an absolute blood bath for me.  Measured in AUD my total portfolio is now back to where it was at the end of October 2021...

On a more serious note I am watching the falls as it might give me a chance to sell down some assets held in Aus taxed UK wrappers and move them into something similar in my Australian Superannuation with no capital gains to be paid.  Need another few percent yet though.  

Inflation higher than the reserve bank thought?  What a surprise

[DurhamBorn]

2 hours ago, HousePriceMania said:

Someone send me this link...on tonight

 

It was utter bullshit,no mention of Brown and Labour allowing it and pushing it,just nasty Tories for cutting spending.The left can never ever link and roadmap cause and affect.Brown was the biggest disaster to hit the decent people in this country for 100 years.The coalition government for me did some fantastic work following them.

[HousePriceMania]

23 minutes ago, DurhamBorn said:

It was utter bullshit,no mention of Brown and Labour allowing it and pushing it,just nasty Tories for cutting spending.The left can never ever link and roadmap cause and affect.Brown was the biggest disaster to hit the decent people in this country for 100 years.The coalition government for me did some fantastic work following them.

Thanks, will save me watching it, my hearts not what it used to be

[Libspero]

Morsel of bear food from Bloomberg:

”Stock Rebound Fails and Futures Plunge on Earnings: Markets Wrap

An afternoon rebound for stocks proved short-lived, with major averages ending lower as investors remained on edge over the Federal Reserve’s inflation-fighting stance and Russia’s saber-rattling against Ukraine. Selling worsened after the close as disappointing tech earnings sent futures plunging.“

[AWW]

1 hour ago, MrXxxx said:

..and then I 'laugh' when people harp on with the Daily Mail narrative "Teachers have got it easy, they only work from 9-3.30, only work 30 weeks of the year, and are on 'holiday' for two months in the summer" YET a) don't ask why there is a shortage of teachers, and b) if it's so 'cushy' why they haven't become a teacher/are teaching....I would suggest that your partner tries another school before leaving the profession as we need good/motivated teachers, and the rewards can be beyond financial ones.

Exactly. I'd love to teach Maths and Physics, properly, in a completely different way to how I was taught at school.  I got good results, but I could see lots of kids' eyes glazing over, and I only knew my stuff; I didn't understand it.  The magic of quantum mechanics boiled down to a dot-and-cross diagram of an atom, which is a) dull and b) not even close to reality.  An emphasis on "hard maths" i.e. Newtonian mechanics for those taking physics, while those doing social sciences learn "soft" maths i.e. stats, which turns out to be just as useful, if not more so, when you get into real physics. Teachers concentrating their efforts on teaching pupils how to navigate past exam papers so that they can pass the test even if they don't grasp the subject matter.  The whole edifice is a shitshow and I'd love to get stuck in and start changing a small part of it, but not for 25 to 40 grand a year and the ever-present risk of losing my job for misgendering someone.

[DurhamBorn]

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-lifestrategy-60-equity-accumulation/charts

One of the big themes i see from my roadmap is pensions just entering drawdown being emptied nominal at worst,inflation adjusted at best over the cycle.I take this as 5% drawdowns and 1.8% fees (usual IFA and platform fees).Of course some who self manage will be more 0.4% fees.

Looking a year back from today the 60/40 has only delivered 4.41%,so nominal in drawdown the pension will be down -2.39%,inflation adjusted -9.39%.Bang on my roadmap.This shows in the reflation after a long disinflation cycle bonds cant take up the slack of falling equities.At some point dividends and coupons will deliver positive returns,but it could be aa good while and in the meantime the fund to provide those divis is falling.

As my friend used to say on our jollies to Ibiza one swallow doesnt make a summer,but my inflation portfolio is up 54% in 15 months.Interesting to see how things develop from here,but i think a lot of pensions are joining cash on being destroyed.BTL next.

[sancho panza]

2 hours ago, Majorpain said:

Other way round, the big US Banks own the fed, so that should not be a surprise!  Was the same in UK until Attlee nationalised BOE.

https://en.wikipedia.org/wiki/Bank_of_England_Act_1946

Bit of rock and hard place really, small hike for fig leaf inflation and stock market goes pop, stay put and bonds blow up or lower and kneecap dollar (and everything blows up?)!

Point taken MP but either way they're in it together,each owing the other the keys to their continued existence.

There's potnetial for a small hike as you say but I'd be surprised at them making a substantial move given their histroy of timidity in the face of a squealing 1%.The big issue for is the other CB's hiking.Even if the Fed does a fig leaf,the rest are going higher,especially in per centage terms.For me,I'd feel more content moving to cash/shorting if we've had a sustained period of dollar weakness and the last trend on the monhtlies was up not down.

Key thing is that whatever they do,it likely won't change what's coming.

1 hour ago, DurhamBorn said:

Was out in Durham today for a meal with the other half and called in Spoons for two refillable coffees,£1.98 for two .It was really busy at 5pm,coffees,meals,older,lots of younger,,some having a few pints.Pint of carlsberg £2.49,bottle of wine in an ice bucket £6.99.Lots of youngsters having a gin etc.Fantastic business and provides a fantastic service for people.

The thing with the Spoons is that they msut be hammering the old pub co.s that lived off the fat of the land for years.The opposition haven't helped themselves and have made it easy for Tim Martin.

This is from teh Wiki entry for EI group(old Enterprise Inns)

https://en.wikipedia.org/wiki/Ei_Group

'the committee found that pubco tenants are initially attracted to run pubs by low entry costs, but soon find that making a decent living is very difficult. Tenants' leases oblige them to buy alcoholic drinks from nominated suppliers at up to twice the open-market price.'

 

 

Round here it's Everards and I msut say,given the quality and value of ye olde spoons,it's hard for me to go anywhere else.Local Everards to me charges nearly £5 a pint ffs.I remember when I was younger,the pubs in Leicester were rammed,loads of good food pubs but now I can think of very few making a living.Loads getting boarded up.

In a way though,it's not a bad thing as it stops people getting shafted by the pub co.s

 

[JREWING]

Live by the sword die by it. All oil and tobacco sold now; sorry DB, but BP at ~398p and BATS over 3100p I ducked out. Gone in balls deep in miner's. Gold and Silver I feel is going on a tear. If it play's out I get my house half price, either here or Oz. If it don't I've still got my health and a boat load of knowledge. More than most at nearly 55. 

[MrXxxx]

1 hour ago, AWW said:

The whole edifice is a shitshow and I'd love to get stuck in and start changing a small part of it, but not for 25 to 40 grand a year and the ever-present risk of losing my job for misgendering someone.

I think half of this is true [the salary], but the other half is 'Tabloid hearsay', granted it may occasionally happen but on the whole is not really reflective of the truth. As for the financial cost, what price happiness and fulfilment in your job?...a job lacking in these only means that you spend the extra money trying to find it elsewhere i.e consumerism, and/or ackowledgement from your peers, who may be on a similar 'journey' themselves.