Credit deflation and the reflation cycle to come (part 6)

[King Penda]

10 minutes ago, Plan-b said:

Just watching the Martin Lewis TV Live Shit Show.

Lewis to Hunt:' When do you think we will see mortgage rates come down ?'

Hunt to Lewis: 'I dont have a Crystal Ball (no shit Sherlock) the view is that inflation will come down to around 5% by the end of this year and around 3% next year'

What?

That wasn't answering the question and nobody batted an eyelid.

Go long wipes . They need to go to 10%  so far all they have done is tickle inflation .

[DoINeedOne]

Ignore

 

 

 

Edited July 11, 2023 by DoINeedOne

[Loki]

7 minutes ago, Long time lurking said:

all the Assad`s around my way

 

[King Penda]

51 minutes ago, King Penda said:

This sounds most excellent and all the parts of my jigsaw are slowly coming together.I did not work 54/60 hours a week for years and destroy my morgage for nothing then .even the total fucking up of the economy enters into my abiet calous plans or hopes .I’ve always admited I want this country to get this bad that even Abdul’s don’t want to come here . I’ve also pointed out and many years ago that my type of jobs are safer than most .it’s not bullshit it’s not arogence it’s a fact 

Answering myself but people used to laugh at me overpaying my morgage when I was only getting charged 2% . I’m like because I can’t get any amount of interest by saving . They spunked their extra cash on going out and holidays hot tubs you name it they did it .  They are not fucking laughing now but I am . Fuck em 

[Pip321]

49 minutes ago, Red Debt Redemption said:

I don't mind working but overtime is on my terms can't buy more time. My time isn't some free commodity to be abused to suit business needs. If I leave early they wouldn't be happy so why the vice versa running into my time is ok? They won't give a shit about an employee once gone or retired, forgotten like yesterday's crew room bin bag, just a job.

If you chose a job that included overtime and this was made clear in the interview / contract then suck it up but a lot just expect it.

Agree and perhaps this is the shift we have seen and been eluded to.

The most precious thing I had was time and I gave it up (often unpaid) to my employer but not because I was stupid…..but because I got something in return.

My employer was just a number crunching finance business. But in 1986 whilst the pay was shit that still meant a really good pension, staff mortgage, share schemes, bonus schemes, 25 moving to 30 days holidays, bank holidays off, job security, discounted canteens, 12 months full sick pay, family health care, career progression…oh and they paid for my professional degree level qualifications and gave me 1/2 a day a week off for studying.

This was not just  a job it was a symbiotic relationship and I needed them so I made sure they needed me.

That contract has gone….by the time I left I had been through at least a dozen restructures designed to intimidate younger staff and make them worry about job security, the pension was shite, the family health care was just for directors etc etc and the younger guys all started with student debts.

Well if those are the ‘new’ terms then I wouldn’t give anymore than I was being paid for…..it’s a two way deal. 

[Long time lurking]

 

[King Penda]

3 minutes ago, Pip321 said:

 

This was not just  a job it was a symbiotic relationship and I needed them so I made sure they needed me.

 

I’m trying to make my agency understand this . They need to be a calm and thoughtful mothra and I can unleash the Godzilla in me that’s capable of working 72 hours a week . Yes I’m greedy I don’t care about sharing the hours or jobs all the other staff have other jobs I have no other job . Thus I realy can work 6 nights a week the others can’t . I’m there most valuable asset for making them money has an individual they just ain’t realised it yet .

[sancho panza]

Some ALden take ref oil

Some newsletter wirter backing for @Cattle Prod thesis that big capex cycle inbound.

Also worth noting anotehr great exposition of @DurhamBorn Indian frdige thesis.I swaer she reads these pages

A number of variables have pressured the oil price over the past year. The U.S. drained its strategic petroleum reserve by unprecedented amounts. Iran’s oil exports hit 5-year highs, as China’s partnership has enabled Iran to sell oil around sanctions. Europe partially de-industrialized. However, I expect Saudi Arabia’s current output cuts and a double-top in U.S. shale production to firm up the supply side, which should help oil find a price floor.

Taking into account both the demand side (possible recession) and supply side (the factors above), I don’t have a firm view on the price over the next 6 months, although I’m not bearish. Looking further ahead, I expect another large energy bull market within the middle of this decade, driven by tight supply. We’ll likely need another big capex cycle to fill that gap.

Primary Risks

As the country’s largest bank, and one that does not trade cheaply, HDFC Bank is exposed to any macro risk that could slow down India’s growth or cause a financial crisis in the country.

Mainly, India’s ability to import enough energy and other commodities to fuel a 1.4 billion person country remains its key vulnerability (and by extension, one of the reasons I remain bullish on hydrocarbons over the next decade). To roughly quantify things, India consumes less than a third of the oil that China consumes per capita, and China consumes less than a fifth of the oil that the United States consumes per capita. By extension, India consumes less than 1/15th of the oil that the United States consumes per capita.

As another quantitative point, both Brazil and Mexico consume comfortably more oil per capita than China, and by extension consume 4x-5x as much as India. India could multiply its resource intensively significantly and still be at developing country consumption levels.

If India were to consume as much as China does per capita, that would require about 8 million more barrels per day, which basically requires finding another Saudi Arabia worth of oil supply. Some western nations may reduce their overall consumption, but then again countries like Indonesia and Nigeria and Pakistan are very large-population countries with very low per-capita consumption that could climb up the ranks as well.

India continues to trade significantly with Russia, and indeed has absorbed a large portion of the Russian energy exports that Europe has given up. India tends to use a pragmatic approach to foreign trade, being willing to trade with anyone that has commodities, including Russia and Iran. India and China are on tense political terms as two major regional powers sitting right next to each other, and yet India is part of the BRICS and the Shanghai Cooperation Organization anyway, and tends to align with China on various mutual economic interests.

[Yadda yadda yadda]

34 minutes ago, King Penda said:

Answering myself but people used to laugh at me overpaying my morgage when I was only getting charged 2% . I’m like because I can’t get any amount of interest by saving . They spunked their extra cash on going out and holidays hot tubs you name it they did it .  They are not fucking laughing now but I am . Fuck em 

Surely there aren't hot tubs in the back yards of Stoke terraces?

[King Penda]

4 minutes ago, Yadda yadda yadda said:

Surely there aren't hot tubs in the back yards of Stoke terraces?

You would be surprised and they might have elevated themselves to a 2/3 bed x council semi . The odds on me living in a 2 bed terrace and having bullion bars and close to 50k of cash must sound insaney far fetched  has a single person working dead end jobs  . There’s a price to pay for easy credit and living the dream they are soon going to find out the cost 

[Yadda yadda yadda]

Just now, King Penda said:

You would be surprised and they might have elevated themselves to a 2/3 bed x council semi . The odds on me living in a 2 bed terrace and having bullion bars and close to 50k of cash must sound insaney far fetched  has a single person working dead end jobs  . There’s a price to pay for easy credit and living the dream they are soon going to find out the cost 

Ex-council semis usually have proper gardens. A hot tub would look ridiculous in the yard of a terrace. Although you could probably hide some bullion underneath.

[No One]

@DurhamBorn you are going to love this story of the bright diverdity the polos have let in

 

https://www.itv.com/news/granada/2023-07-11/man-stabbed-exs-son-to-death-then-tried-to-cross-english-channel-on-a-dinghy

[working woman]

It is sad to think many families renting, who have kids are going to find themselves homeless for a while.
Council's putting them into a hotel is grim and stressful.

The Govt. / Local Councils should do a deal with static caravan holiday parks. Keep the swimming pool and play areas open and the kids would think they were on a permanent holiday. Takes pressure off the families. If the Govt. can do deals with whole hotels to house people, then they can do it for homeless families.  Whilst a great temporary solution, for many it may end up as permanent.

There are 1000's of these caravans up and down the country. Everytime I am on a motorway I see several heading off to somewhere. 

[working woman]

2 hours ago, King Penda said:

This sounds most excellent and all the parts of my jigsaw are slowly coming together.

What does your "jigsaw" look like? Buy a 2nd house when prices crash? Sounds like a plan  

My husband is also a Care Worker (Learning Disabilities)  I'm not so sure it is such a safe job. I remember as a child in the 70's going into the local "hospital", for old people which was formerly the towns old work house. It was a home, rather than a hospital for the elderly.  Long wards full of beds with all the elderly in.  Grim. Then Maggie came to power and things changed. Care homes sprung up where people had their own rooms. I can see a time, when money gets tight, the Govt may go back to these "wards". Remember those stupid Nightingale Hospitals in the Covid days? The Govt. will think If it is good enough for Covid patients, it is good enough for the oldies. If that happens, yes there will be work in Care, but maybe not so many jobs. 

 

[King Penda]

5 minutes ago, working woman said:

What does your "jigsaw" look like? Buy a 2nd house when prices crash? Sounds like a plan  

My husband is also a Care Worker (Learning Disabilities)  I'm not so sure it is such a safe job. I remember as a child in the 70's going into the local "hospital", for old people which was formerly the towns old work house. It was a home, rather than a hospital for the elderly.  Long wards full of beds with all the elderly in.  Grim. Then Maggie came to power and things changed. Care homes sprung up where people had their own rooms. I can see a time, when money gets tight, the Govt may go back to these "wards". Remember those stupid Nightingale Hospitals in the Covid days? The Govt. will think If it is good enough for Covid patients, it is good enough for the oldies. If that happens, yes there will be work in Care, but maybe not so many jobs. 

 

I’m adaptable I can go from

 one goes over the cuckoos nest to a care home or to fostering or comunity care . The irony is people with money are Subsidising those with none anyway .ie make zero effert in life you still get the same care . The council will just say we can get you 20 clients and demand a huge discount 

[GoneDark]

1 hour ago, Long time lurking said:

 

Flint 'dropping like a' stone.

[King Penda]

33 minutes ago, working woman said:

It is sad to think many families renting, who have kids are going to find themselves homeless for a while.
Council's putting them into a hotel is grim and stressful.

The Govt. / Local Councils should do a deal with static caravan holiday parks. Keep the swimming pool and play areas open and the kids would think they were on a permanent holiday. Takes pressure off the families. If the Govt. can do deals with whole hotels to house people, then they can do it for homeless families.  Whilst a great temporary solution, for many it may end up as permanent.

There are 1000's of these caravans up and down the country. Everytime I am on a motorway I see several heading off to somewhere. 

I want people to grow up that question the system and the way it favours imigrents .  They can draw their own conclusions. Like wize we can’t have a house price crash without victims.  We can’t destroy btl without destruction. Has in the film the crow Eric said victims arnt we all 

[DurhamBorn]

1 hour ago, No One said:

@DurhamBorn you are going to love this story of the bright diverdity the polos have let in

 

https://www.itv.com/news/granada/2023-07-11/man-stabbed-exs-son-to-death-then-tried-to-cross-english-channel-on-a-dinghy

She was an immigrant as well,its incredible what is going on.Given most of them i see arriving are the ugliest men on earth they are going to get frustrated and angry very quickly,even most of the hookers wont see them .

[DurhamBorn]

5 hours ago, Plan-b said:

Kinell .. The shit will hit the fan sooner or later. There will be a lot of angry people especially when its families with kids. For people here who are parents you'll know what this means when your kids are affected.

Even though most of them are scroungers as well,they will see all the newcomer scroungers getting looked after.BTL is going to be removed from the market,but millions dont work etc and wont be able to buy.The good thing is lots of working younger people will be able to.Its obvious big insurnace etc and banks will get involved,but a big lag.Even our terraces at £75k break even on 6.5% rates and thats before repairs,voids etc.Some will sink capital in of course to keep going,but it will become obvious soon to almost everyone that BTL is a mugs game now.I knew when my builder mate sold the lot late last year,he knows property inside out.I see a lot of southern estate agent signs going up around my home towns,looks like southerners trying to get out,always with sitting tenant,they probably cant afford to serve a S21 and have no rent for 6 months.

Key though is LHA,Labour will likely jack it up and the Tories might yet.

Edited July 11, 2023 by DurhamBorn

[Eventually Right]

6 hours ago, DurhamBorn said:

This is what scares me most on what my roadmap is showing.Its not likely that sterling goes down 80%,but there is still a decent chance it does,maybe in the 15% chance range.I looked at our portfolios,and simply decided im much happier with a 20%+ downside risk on an EM etc equity portfolio than i am holding UK assets.Our macro position is shocking,i dont think many understand just how bad.We do have chances still to reverse,tax take might grow due to thresholds being frozen faster than bennies etc,but its very very risky on present policies.I have just been to the tip.Two obvious recent African illegals sat on roadside with big backpacks,just how many of these parasites are flooding in,must be millions given they are everywhere just wandering around.

Does the risk of that 80% decline have a time frame/limit DB?

If you were to say that 1/6 chance exists for the next 3 years, the greedy part of my brain would think that whatever the tool you’d use to insure against that risk (currency futures/options etc) it is almost definitely not pricing that outcome at anywhere near a 15% probability. I suspect it would be orders of magnitude smaller than that, and so the payout of that ‘bet’ would inversely be astronomical.

[DurhamBorn]

3 minutes ago, Eventually Right said:

Does the risk of that 80% decline have a time frame/limit DB?

If you were to say that 1/6 chance exists for the next 3 years, the greedy part of my brain would think that whatever the tool you’d use to insure against that risk (currency futures/options etc) it is almost definitely not pricing that outcome at anywhere near a 15% probability. I suspect it would be orders of magnitude smaller than that, and so the payout of that ‘bet’ would inversely be astronomical.

No,its a risk,could be tomorrow,next week,three years,thirty years.The point is,although i dont expect it to happen,it is a real risk and im not going to risk losing 80% of our wealth overnight.I would rather take a bath on equities if i have to.Im at the stage where my main concern is keeping capital over the rest of the cycle at inflation returns.Im not sure of course if i will.Its telling i was going to add to BT today,but didnt.Its one of the few UK nearly all earning that should keep in front of inflation over the cycle,but i noticed Hunt mention regulators "putting hard pressed families first" and didnt like the sound of that.I bought some more SK Telecom instead.Im full on BAT about 4% above these prices so wont buy more,but notice others buying on here.It has risks aroun debt and regulation,but its a fantastic currency hedge.Its why so many South Africans own the stock.

[King Penda]

2 minutes ago, DurhamBorn said:

No,its a risk,could be tomorrow,next week,three years,thirty years.The point is,although i dont expect it to happen,it is a real risk and im not going to risk losing 80% of our wealth overnight.I would rather take a bath on equities if i have to.Im at the stage where my main concern is keeping capital over the rest of the cycle at inflation returns.Im not sure of course if i will.Its telling i was going to add to BT today,but didnt.Its one of the few UK nearly all earning that should keep in front of inflation over the cycle,but i noticed Hunt mention regulators "putting hard pressed families first" and didnt like the sound of that.I bought some more SK Telecom instead.Im full on BAT about 4% above these prices so wont buy more,but notice others buying on here.It has risks aroun debt and regulation,but its a fantastic currency hedge.Its why so many South Africans own the stock.

White South Africans lol

[Eventually Right]

4 minutes ago, DurhamBorn said:

No,its a risk,could be tomorrow,next week,three years,thirty years.The point is,although i dont expect it to happen,it is a real risk and im not going to risk losing 80% of our wealth overnight.I would rather take a bath on equities if i have to.Im at the stage where my main concern is keeping capital over the rest of the cycle at inflation returns.Im not sure of course if i will.Its telling i was going to add to BT today,but didnt.Its one of the few UK nearly all earning that should keep in front of inflation over the cycle,but i noticed Hunt mention regulators "putting hard pressed families first" and didnt like the sound of that.I bought some more SK Telecom instead.Im full on BAT about 4% above these prices so wont buy more,but notice others buying on here.It has risks aroun debt and regulation,but its a fantastic currency hedge.Its why so many South Africans own the stock.

Cheers DB, not something that can be insured against then, other than pointing your portfolio away from the UK.

[Long time lurking]

 

[Joxer]

3 hours ago, sancho panza said:

 

.

If India were to consume as much as China does per capita, that would require about 8 million more barrels per day, which basically requires finding another Saudi Arabia worth of oil supply. Some western nations may reduce their overall consumption, but then again countries like Indonesia and Nigeria and Pakistan are very large-population countries with very low per-capita consumption that could climb up the ranks as well.

 

That snippet blows my mind. An extra 8 mbd is unbelievable. 

We should go for broke and put all government spending in to sending an armada to the gulf to secure a supply of oil for ourselves.