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


spunko
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Castlevania
1 hour ago, spygirl said:

Most stuff that's been offshored is just electronics assembly.

Theres nothing complex really to the processes. 

They started off with cheap n nimble fingers(labour) , moving to v expensive pick n place machines (capital).

Off shoring started off when the East was much cheaper than the US/Europe and stuff like tellies, vids, were composed of many fiddly bits n bobs.

Heres a crt, looks 80s-

crt.jpg

Eurgh, lots of analogue n the circuits to tweak them.

Heres s a mid 90s computer-

6ec5309c-448c-405b-800b-62dfdf8a8f39.jpg

Bit better. Lot less discrete components, more semis.

Heres a 2020s computer, which is equivalent to a few 100s of the 90s computer and drives an LCD

raspberry-pi-4-labelled@2x-e74ce2a910b35

You dont need lots of cheap nimble fingers. A pick n place can make and test that.

Count the components. Not even decoupling caps on the signal lines anymore.

Couple of pull up n downs. 

You can run a production line that'll finish those off and put in a box, untouched by humans.

 

 

Most of the Raspberry Pis are made in the U.K. 

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2 hours ago, Cattle Prod said:

I think you'll get your chance, Hancock. It won't go up in a straight line. The trick is being convinced enough to buy when everyone is hating it again and laughing at the bulls.

Yes i can see it all imploding, the economy seems to be running on last years handouts, how long that goes on for is what we're waiting to find out.

Daves BK now seems to be based on sentiment, and that like lemmings everyone will follow each other out the market once it becomes apparent the FED won't print anymore.

With whats gone on, i can't but help think its inevitable the FED drops a load more helicopter money to fight the next tranche of deflation.

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6 hours ago, Cattle Prod said:

I'd ignore him Sancho, he lost the plot over Covid and has been badly wrong. I called him out on it, he blocked me. He's now a Twitter meme...

image.png.4fb5efe37d3e25d218c285dc54020299.png

I expect US production to roll over when the DUCs are used up, March/April. I finally worked out how they managed to have such a 'technological breakthrough' in drilling over Covid, the EIA is counting the DUC production into 'per rig' numbers, even though they didn't drill the DUC wells. If they don't double the rig fleet in the next 6 months, it'll fall. You can even see that they are completing crappier and crappier wells, as the per rig rate is trailing off.

image.png.fd4231f7df009436af99d531a725d472.png

image.png.de39f335f83c85aa02c611f001b3a8c9.png

 

You can see how the 'per rig' rate jumps up in April '20, with reported DUCs nosediving a month later. Nice sleight of hand guys, I wonder will XOM get sued for what they said in the investor call about 'technological drilling breakthrough' etc etc.

Plus he doesn't like (hates?) nuclear! Though imo rather weakly he mainly frames his argument around the 'court of public opinion being against nuclear', so giving himself an 'easy get out' if politicians themselves should change their minds and policy on nuclear. For an energy commentator who frequently Berman says he is a realist and pays very close attention to the data, I find his writting off of nuclear peculiar. 

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6 hours ago, stoobs said:

Just mix them in a bowl, then into the microwave for 3 minutes for a tasty treat?

Sounds nice. Please clarify whether I should use as pizza topping or pie filling?

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Bobthebuilder
1 hour ago, JMD said:

Sounds nice. Please clarify whether I should use as pizza topping or pie filling?

I think its an homage to maggie t, egg on toast for breakfast and sardines on toast for tea.

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leonardratso
1 hour ago, Bobthebuilder said:

I think its an homage to maggie t, egg on toast for breakfast and sardines on toast for tea.

and toast for lunch. With egg and sardines on it.

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I still don’t understand this wage inflation and tax increase approach U.K. gov’ is pursuing. Or is it the re-balancing between workers and benefits. If that is the case it will certainly create some very vocal people. I was surprised that they suspended the triple lock on the state pension.

Oh as an aside I can’t see the gov not lifting the cap on council tax bills. The question is if they set a cap I might deduce that this is the new inflation target e.g 5%. No cap and we get Councils increasing bills by mind bending rates.

 

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8 hours ago, Castlevania said:

Most of the Raspberry Pis are made in the U.K. 

I know. i was using it as an example of how simple modern electronics is.

 

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9 hours ago, ThoughtCriminal said:

If the top doesnt come soon then its confirmation that we now live in the Matrix

 

 

Remind me, has this company `turned` a profit yet?...like the 2000s tech bubble over again.

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moneyscam
54 minutes ago, MrXxxx said:

https://www.reuters.com/article/netherlands-pension-fund-abp-fossil-fuel/update-1-dutch-pension-fund-abp-to-sell-17-5-bln-of-fossil-fuel-assets-idUSL1N2RM0D1

What do they think these companies are going to do, wait until the last minute and then disappear overnight?

These funds that 'divest from fossil fuels therefore we are holy' really get on my wick. They change absolutely nothing apart from altering the fund's rate of return for better or worse. All they've done is sold existing shares they bought in the secondary market back on to the secondary market. Big fucking deal, what actual difference does it make to your 'we are concerned about global warming' shite or to the company in question that already got the money long time ago in an IPO or secondary market offering? The square root of fuck all.

All they should be concerned with is managing their investments to deliver the returns needed to fulfil their pension liabilities full stop. Anything else is just virtuous willy waving.

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16 hours ago, sancho panza said:

Those US figures looked high to my untrained eye and the nuances you explain make a lot more sense.

I saw a Cathy Wood video earlier hence my comment,and much as she has made a lot of people a lot of moeny,she really didn't strike me as a commentator with a direct understanding of the marekts she was calling a deflationary crash for -oil and convetional cars.

Don't get me worng,leccy cars are here to stay,but Wood doesn't even gloss over the way all car production will be electric by 2030,she jsut doesn't discuss it.Focuses on the price of new leccy/diesel cars being the same in 2026 no mention of the infrastrcuture needed to refuel etc....

Here's the video-Wood predicting a deflationary collapse especially in legacy automakers.I can't say too much as I'm predicting a deflationary BK event myself,but for totally different reasons and I believe Wood will be 80% down not Volkswagen

 

Cathie Woods comes across as a loon who got v v lucky.

 

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1 hour ago, MrXxxx said:

Remind me, has this company `turned` a profit yet?...like the 2000s tech bubble over again.

Tesla is grossly overvalued  - on current production.

 

However it has made a profit -

Electric car maker Tesla has brushed off supply chain issues and the global microchip shortage to report record quarterly sales and profits.

Revenues rose to $13.76bn in the third quarter of the year, up from $8.77bn 12 months earlier.

The company, led by billionaire entrepreneur Elon Musk, posted a net profit of $1.6bn and sold 241,391 cars.

 

And when you look at its production costs, future demand and the state of its competitors - who are basically fucking useless (see chip crisis), have large low productive workforce and a large expensive management structure, you can see the attraction.

Kudos to cokey, thats hes managed to cycle thru a few designs in the time it takes a GM to decide to hage the chap of of the fag holder.

 

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HousePriceMania
Market Summary > Petrofac Limited
124.42 GBX−33.58 (21.25%)today
 
:/
33 minutes ago, Castlevania said:

American Express are increasing the interest rate on my credit card by 197 basis points! What do they know?

That poor people gotta eat ?

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2 hours ago, MrXxxx said:

Remind me, has this company `turned` a profit yet?...like the 2000s tech bubble over again.

No, they haven't. Their accounts may say that they have, but their accounts are top to bottom fraud.

https://www.sec.gov/Archives/edgar/data/1318605/000095017021002253/tsla-20210930.htm

Accounts receivable nearly $2bn, when the vast majority of their "sales" are in cash.

$13bn in accounts payable and deferred liabilities, an increase of $4bn on the last Q.

To be honest though, discussing Tesla's accounts is like debating the 0-60 time of Santa's sleigh. Since they are both essentially fantasy, they can be whatever you want them to be.

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Raising the national living wage (applies to those over 23) will reduce universal credit payments due to the minimum income floor:

https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/self-employment/minimum-income-floor/

"For UC purposes, if a person is in gainful self-employment in an assessment period, and their earned income (ie their gross profits along with any employed earnings) in that assessment period amounts to less than their individual earnings threshold (the minimum income floor, MIF), they are treated as having earned income equal to the MIF"

 

This will likely hit a lot of the nail technician, the dog walker and the cup cake makers.

 

This news about BP, British Airways and sustainable fuels may have already been covered:

 

https://www.bp.com/en/global/corporate/news-and-insights/reimagining-energy/bp-in-collaboration-with-ba-on-sustainable-aviation-fuel.html

 

Emma Delaney, bp’s EVP of customers & products, comments on the significance of our new deal with British Airways in the drive to decarbonize the skies

 

 

 

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HousePriceMania
2 minutes ago, GTM said:

No, they haven't. Their accounts may say that they have, but their accounts are top to bottom fraud.

https://www.sec.gov/Archives/edgar/data/1318605/000095017021002253/tsla-20210930.htm

Accounts receivable nearly $2bn, when the vast majority of their "sales" are in cash.

$13bn in accounts payable and deferred liabilities, an increase of $4bn on the last Q.

To be honest though, discussing Tesla's accounts is like debating the 0-60 time of Santa's sleigh. Since they are both essentially fantasy, they can be whatever you want them to be.

Musk reminds me of someone...

 

 

How FBI cocaine sting was undoing of John DeLorean and his futuristic car  firm

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belfastchild
18 minutes ago, GTM said:

No, they haven't. Their accounts may say that they have, but their accounts are top to bottom fraud.

https://www.sec.gov/Archives/edgar/data/1318605/000095017021002253/tsla-20210930.htm

Accounts receivable nearly $2bn, when the vast majority of their "sales" are in cash.

$13bn in accounts payable and deferred liabilities, an increase of $4bn on the last Q.

To be honest though, discussing Tesla's accounts is like debating the 0-60 time of Santa's sleigh. Since they are both essentially fantasy, they can be whatever you want them to be.

Take out the bitcoin sales and the selling electricity/leasing for their cars and the 'profit' is gone. Never mind being a subsidy junkie (hence the move to Texas). Jackanory springs to mind.


It wont be the first time I mention them and Worldcom in the same breath (and I used to work with Worldcom).

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