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

[reformed nice guy]

9 minutes ago, wherebee said:

(c) demolish fraud at a stroke.

Get them to hand sort recycling. There are places full of eastern europeans getting paid to sort it - why not use the eastern europeans in jail or on bennies to do it as a first step

[DurhamBorn]

20 minutes ago, Pip321 said:

They paid 14.6p in the last 12 months (or 7.3p for a half year) and the financials on HL, LSE and google finance show that as a 9% dividend yield based on its current share price ie 160p. That’s a good income. 

I mean there are no guarantees in that any yield (ie 9%)  is based on the last dividends….next set of financials and dividends could be better or much lower ie no guarantee to future dividend returns. 

One question with them is the CEO and CFO not being on the ball.They have £300mill for a share buyback (or special divi) but at the last results they said they would announce how it would be returned "at a later date".Given the share price you would think that later date would be well err now?.If not then that says they are keeping it for the results because they want something good to say if AUM is down hard etc.Iv noticed this a lot lately,CEOs who seem detached from whats going on.BP a perfect example,paying debt down when they should of being doing buybacks at £2.

Sector is likely in play for mergers,maybe friendly ones,but it will take one happening to get things moving i suspect.

[sancho panza]

trolling throuhg the DM...fear sells.

https://www.dailymail.co.uk/money/markets/article-10970123/MARKET-REPORT-Aston-Martin-shaken-stirred-finance-fears.html

Shares in Aston Martin crashed to a record low as fears mounted over the state of its finances.

Aston Martin could turn to foreign hands for help, with Saudi Arabia’s Public Investment Fund (PIF), which backed the takeover of Newcastle United last year, reported to be in talks over an investment worth up to £200million.

 

https://www.dailymail.co.uk/money/markets/article-10970383/Inflation-France-hits-record-high-amid-mounting-fears-recession.html

Inflation in France hit a record high amid mounting fears of recession across the West.

Official figures showed prices in France are now 6.5pc higher than a year earlier.

The figures came a day after Spanish inflation hit a 37-year high of 10.2 per cent but in Germany it eased slightly to 8.2 per cent.

 

https://www.dailymail.co.uk/money/markets/article-10970185/Housing-market-cools-rate-hikes-cost-living-crisis-toll.html

The red hot housing market has shown ‘tentative’ signs of cooling as rising interest rates and the cost-of-living crisis take their toll.

The average cost of a home in the UK hit a record high of £271,613 last month – up a bumper 10.7 per cent or £26,000 on a year earlier.

But that was slower than the 11.2 per cent increase seen in May, according to the report from Nationwide.

 

 

https://www.dailymail.co.uk/money/markets/article-10966469/Toxic-rents-online-competition-turn-Wigan-ghost-town.html

Where have all the High Street shops gone? How one of Britain's biggest town centres is 'dying on its feet' after spiralling rents and online competition forced all its big stores (bar Primark) to close

• Shocking pictures of deserted streets and shuttered shops in Wigan lay bare UK high street crisis
• Wigan has been hit by combination of spiralling rents, internet competition, and claims of corporate greed 
• It has led to store closures - including a Marks and Spencer, Debenhams, BHS, H&M and Next
• Though lockdown appears to have dealt the final blow, UK high streets have been in decline for years

[RJT1979]

1 hour ago, wherebee said:

(c) demolish fraud at a stroke.

Demolish Stoke. Cut fraud 

[sancho panza]

Gdenuienly pondering selling some big oil to buy big gold here(never thought I'd say that).Barrick,NewcrestAnglo,KInross,PAAS,also some second stringers eg EGO,HMY,NGD,B2G,OGC

Decl:long already,jsut they look a lot better value than big oil pound for pound

 

Mish chart.Well worth a read.A thesis that makes a lot of sense

[tank]

14 hours ago, RJT1979 said:

1 million Germans came to the uk in 1 year?

The Tories officially increased the UK population by circa 1 million NET during the last 12 months, so I wouldn't be surprised if many of these 'Germans', i.e Merkel's guests, got visas. 

Our economy is basically people farming to pump property values and the rentier service sector. 

By contrast, the EU countries generally have much lower level of net immigration. While i'm no fan of the European project, we should not forget that most of the damage has been done by our own scumbags in Westminster and Whitehall. The current German government are happy to dump most of Merkel's 'guests' onto us and the pro Brexit Tories are very keen to take them. The focus on here tends to be the channel illegals, but they make up a tiny fraction of the net intake. 

[tank]

9 hours ago, Lightly Toasted said:

There was a memorable post (pretty sure on TOS) suggesting having a building where claimants have to spend 8 hours each workday, just sitting at a desk. Benefits would depend on attendance.

The idea could be fine-tuned to be more useful but even as it is, it might (a) motivate people to do something actually productive and (b) provide an insight into what the world of office work is actually like 

 

That's just a waste of everyone's time when you consider those claiming the dole for a measly £75 a week are not the problem.

80%+ of the working age adult welfare budget goes to fat, lazy women with kids who sit on their arses all day ordering take aways and what not. These bints don't need to go near a Job Centre.

Simply clobbering mostly unemployed blokes over the head with this sort of bullshit is just Tory political show for the Daily Mail crowd. 'WE'RE CRACKING DOWN', while Shaz orders in another Maccy D.

[jamtomorrow]

9 hours ago, MrXxxx said:

Take him Wildcamping...start off just one night [and maybe a second in a YHA single room]....he won't 'look back', and hopefully won't miss his computer games.

100% this - and worth seeing if you can find some good spots on the secondary ridges this time of year, the main ridges can get surprisingly busy. I once rocked up at Angle Tarn (top of Langdale) in horizontal drizzle to find it looking more like the Calais Jungle than upland countryside.

Or if you don't fancy it wild, I just booked a bit of camping for £15 a night near Ulpha for late July. Been a while since I camped at a site in the lakes, but that does seem cheap and there was still lots of space available.

[King Penda]

5 hours ago, tank said:

That's just a waste of everyone's time when you consider those claiming the dole for a measly £75 a week are not the problem.

80%+ of the working age adult welfare budget goes to fat, lazy women with kids who sit on their arses all day ordering take aways and what not. These bints don't need to go near a Job Centre.

Simply clobbering mostly unemployed blokes over the head with this sort of bullshit is just Tory political show for the Daily Mail crowd. 'WE'RE CRACKING DOWN', while Shaz orders in another Maccy D.

It is I know of 1 other single dad besides me and his wife droped dead in a shop with a brain haemorrhage obviously the kids took it bad.no idea of vax status .

[Barnsey]

I just sold my small business at 40.
Think I'll retire. Not because I can afford it, but because - what's the point?
Rampant inflation, dire stock markets, ridiculously high minimum wage, straight-jacketing employment laws. Over-taxed, under-rewarded.
There is no point working, or investing, or trying to build a small business in this toxic anti-business culture that is the modern UK. Can't believe this bunch of socialists masquerading as Tories. 

Just one of many many similar replies to this article from the Telegraph

https://www.telegraph.co.uk/business/2022/06/30/surge-early-retirement-fuelling-inflation-says-top-treasury/

[Democorruptcy]

8 hours ago, Pip321 said:

They paid 14.6p in the last 12 months (or 7.3p for a half year) and the financials on HL, LSE and google finance show that as a 9% dividend yield based on its current share price ie 160p. That’s a good income. 

I mean there are no guarantees in that any yield (ie 9%)  is based on the last dividends….next set of financials and dividends could be better or much lower ie no guarantee to future dividend returns. 

I just wondered if you realised how fluid that displayed figure is, it's a moment in time. It only applies to the price it is today. There are no guarantees at all. Price goes up, dividend displayed goes down, price goes down dividend goes up. 9.3% at 160p (yesterday) was 5.8% if you had bought at the 250p earlier in the year.

[Majorpain]

Fed prints money and gives it to the banks, banks then park that money at the Fed who is currently paying $240mn a day in interest in printed money.  As much as I'm not a leftie, the average person on the street gets nothing more than screwed over by this circle jerk as their money get devalued by $87.6bn a year (and rising).

[Democorruptcy]

8 hours ago, DurhamBorn said:

One question with them is the CEO and CFO not being on the ball.They have £300mill for a share buyback (or special divi) but at the last results they said they would announce how it would be returned "at a later date".Given the share price you would think that later date would be well err now?.If not then that says they are keeping it for the results because they want something good to say if AUM is down hard etc.Iv noticed this a lot lately,CEOs who seem detached from whats going on.BP a perfect example,paying debt down when they should of being doing buybacks at £2.

Sector is likely in play for mergers,maybe friendly ones,but it will take one happening to get things moving i suspect.

Nothing to do with BP but it's all a bit Ponzi though isn't it? Firms buying their own shares when they have lots of debt. How can you trust a share price that has been manipulated by a firm pushing it up with borrowed money, particularly if the cost of borrowing was increasing? Part of the problem is that executives get multiples of their salary based on share price performance. They are incentivised to drive the price up in the short term, while they collect their bonuses and share option money. Their share price performance is also only measured against a comparator group of companies, their company selects, not the market as a whole. Pick some dogs in their comparator group and they get bonuses for being the best of the worst. It seems like an epic fail in regulation to me.

[DurhamBorn]

11 minutes ago, Majorpain said:

Fed prints money and gives it to the banks, banks then park that money at the Fed who is currently paying $240mn a day in interest in printed money.  As much as I'm not a leftie, the average person on the street gets nothing more than screwed over by this circle jerk as their money get devalued by $87.6bn a year (and rising).

Yes,and its how the system works,and why the Fed is 100% trying to move the reverse repo into the real economy.Price signals are there from inflation,job done, BUT the problem is government have destroyed the work ethic,or build a business etc.There is simply no point working or growing a business as tax and reward are too low.The state is simply way too big.We are even worse in the UK.Sunak was at a local factory yesterday,usual levelling up crap and smiles.No questions from the media on why hundreds of bennie claimants in the same town got more than the workers in the factory for doing nothing.No questions on why they werent tackling systemic inflation by lowering bennies and public sector pensions and jobs.

The liquidity is in the system,the price signals are telling entities to invest,government is stopping it.

[WICAO]

I am still trading some of my valuable time for $'s which means all my lovely end of Q2 dividends aren't needed to eat.  So instead they've been put to use in three ways - some held back in cash for the home build, some deployed into gold and some deployed into Japan equites.

With half of the year gone it looks like my half year return measured in £'s is going to end up down around -7.9%.

I'm never one to let a good crisis go to waste so I'm really pleased that in the first half of the year I've been able to use the downturn to move a significant chunk of wealth from the UK and now have it nicely tax sheltered in the Australian Superannuation system with zero capital gains tax to pay for my efforts.  Don't feed the beast...

Amazingly, this current market sees me still sleeping very soundly.  I don't know whether it's that I've very likely finally found home or whether it's that I've finally realised I might just have won the financial game...

[ashestoashes]

Jacob Reese Mogg has said the government is doing fiscal tightening and not spending money to keep pace with inflation

[DurhamBorn]

2 minutes ago, Democorruptcy said:

Nothing to do with BP but it's all a bit Ponzi though isn't it? Firms buying their own shares when they have lots of debt. How can you trust a share price that has been manipulated by a firm pushing it up with borrowed money, particularly if the cost of borrowing was increasing? Part of the problem is that executives get multiples of their salary based on share price performance. They are incentivised to drive the price up in the short term, while they collect their bonuses and share option money. Their share price performance is also only measured against a comparator group of companies, their company selects, not the market as a whole. Pick some dogs in their comparator group and they get bonuses for being the best of the worst. It seems like an epic fail in regulation to me.

If not some companies splurge on daft expansions or buys.Some companies are better growing,some are better standing still.As an investor the only real number that matters over the long term is that the dividends across my portfolio increase,if thats from the business growing,or the share count falling it doesnt really matter.There is a problem with executives gaming it of course

Some industries become very mature and simply tick along,baccy being one,insurance another,3% buybacks,3% inflation 6% divi makes a great compounding return over the long term.

[Sugarlips]

Capitulation?

[Pip321]

22 minutes ago, Democorruptcy said:

I just wondered if you realised how fluid that displayed figure is, it's a moment in time. It only applies to the price it is today. There are no guarantees at all. Price goes up, dividend displayed goes down, price goes down dividend goes up. 9.3% at 160p (yesterday) was 5.8% if you had bought at the 250p earlier in the year.

Yep, was aware. Once purchased the current share price and the current dividend yield advertised (whilst relevant and interesting) disconnect for that holder.

So those who bought Rio @ £30 are raking in almost 20% dividends now.  

So if in my case I am just am trying to beat cash…if I buy today and assuming the dividend £ amount stays about the same (which is what I mean it isn’t guaranteed ie real time earnings and divi change) then it smashes cash income.

After say 8/9 years the dividends (again not guaranteed) have paid the £1.60 back. The cash is still standing earning @1% (again I make another  assumption that interest rates are static) maybe 20p interest during that time on my £1.60. 

An aside, but interesting….I was listening to an US investor (I have forgotten his name, big mutual fund chap) and he was comparing funds held by asset managers/insurers and their shares. 25 years ago he bought several shares in these insurers and today those (without exception) now pay him more a year than his original investment. So the funds they manage did ok…but the high yielding shares better. Not an investment strategy….but an interesting observation. 

[Democorruptcy]

1 minute ago, DurhamBorn said:

If not some companies splurge on daft expansions or buys.Some companies are better growing,some are better standing still.As an investor the only real number that matters over the long term is that the dividends across my portfolio increase,if thats from the business growing,or the share count falling it doesnt really matter.There is a problem with executives gaming it of course

Some industries become very mature and simply tick along,baccy being one,insurance another,3% buybacks,3% inflation 6% divi makes a great compounding return over the long term.

I'm not suggesting you can't make money from it, if you choose the right firms! Since my post, you did one about Sunak. I think there are parallels with some company execs and politicians. They are only looking at the short term. Last year I remember reading on average a FTSE boss earns the annual median wage in 34 hours. The execs will be off with their loot, when later the workers will be left out of a job when the firm goes bust.

[Boon]

14 minutes ago, DurhamBorn said:

Yes,and its how the system works,and why the Fed is 100% trying to move the reverse repo into the real economy.Price signals are there from inflation,job done, BUT the problem is government have destroyed the work ethic,or build a business etc.There is simply no point working or growing a business as tax and reward are too low.The state is simply way too big.We are even worse in the UK.Sunak was at a local factory yesterday,usual levelling up crap and smiles.No questions from the media on why hundreds of bennie claimants in the same town got more than the workers in the factory for doing nothing.No questions on why they werent tackling systemic inflation by lowering bennies and public sector pensions and jobs.

The liquidity is in the system,the price signals are telling entities to invest,government is stopping it.

That Zerohedge article implies that the Fed are paying 5-15 basis points over the base rate = 1.55-1.65%.

If the government wanted to get these monies into the real economy why wouldn't this incentive be removed altogether? Or make that interest rate negative.

Later in that article it says that if (or when) interest rates double the Fed will then be spending half a billion a day on this. So I don't know if it's a case that they cannot or if it this incentive is removed there will be some kind of second order effect. I suspect that for the average American $10 gas would seem to be worse than 10% inflation.

[ThoughtCriminal]

What a shit show winter is going to be. 

[RJT1979]

2 minutes ago, ThoughtCriminal said:

What a shit show winter is going to be. 

We won't but European mainland probably will.

[Cheese Limit]

On 08/05/2022 at 10:48, Lightscribe said:

That’s why it depends on the watch.

Tudor (sister company of Rolex) and say Rolex entry level Explorer/Air King I would say yes.

That also includes all those ridiculous priced Hublots, Tags, Breitlings etc. 

However Rolex is one of the only brands (in the mid sector) that uses solid precious metals rather than plate (which the above do).

https://www.montredo.com/how-much-gold-is-in-a-solid-gold-rolex/

I think going forward when PMs run, (depending on the watch) they could be another potential hedge against inflation. Not due to the PM amount, but the ability of authentication and known workmanship.

This is predominately the reasons I sold my GMT Master II BLNR - Batman (way too early mind you ) and kept the white gold DateJust II (white gold flies under the radar).

Popular Rolex sport / tool watches are 10 to 15% down over the last few months apparently. I am considering buying a bog standard mint Submariner but don't want to catch the knife while it is falling.

What are peoples thoughts?

[Plan-b]

25 minutes ago, Boon said:

That Zerohedge article implies that the Fed are paying 5-15 basis points over the base rate = 1.55-1.65%.

If the government wanted to get these monies into the real economy why wouldn't this incentive be removed altogether? Or make that interest rate negative.

Later in that article it says that if (or when) interest rates double the Fed will then be spending half a billion a day on this. So I don't know if it's a case that they cannot or if it this incentive is removed there will be some kind of second order effect. I suspect that for the average American $10 gas would seem to be worse than 10% inflation.

Stealth QE for the benefit of family and friends