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

[Funn3r]

1 hour ago, leonardratso said:

.

no idea what happened there - ignore.

Thanks for summing up my life 

[spygirl]

2 hours ago, BoSon said:

I know someone that did, around the turn of the century, went working in Aus and didn't have time or desire to sort out the mortgaged house. He came back a few years later so presume his debt was still on the books, but if he'd gone for long enough wouldn't the 6 year rule (or whatever it is) for chasing an unacknowledged debt come into effect?

 

Its murky.

Bankrupcty is a formal legal. process that draws a line under your debts.

When you clear bakruptcy you emerge like a butterfly - with massive balck mark on your credit file.

Not going bankript doesnt wok.Leaves stuff unresolved which may come back and bite you.

There were a fair few cases of people whod defaulted on their mortgages but were allowed to stay in the house.

Not sure what happened in detail.

But the bank levied a charge then repod the house a few years alter when there was more equity.

 

 

[Stuey]

8 minutes ago, RWJ said:

I was in Morrisons last week for the first time in ages.  Not buying food but used their pharmacy.  I thought for a moment the main store was closed, as the lights were out but on closer inspection I could see they were just really dimmed down.  I had to squint to see if there were any customers in the aisles, there was. 

Dunno if it was a temporary issue or if they're dimmed for cost saving but it was quite bizarre as supermarket lighting is normally very bright.

Was it autism hour? They do this and stop tannoy announcements for some times of the day.

 

[RWJ]

3 minutes ago, Stuey said:

Was it autism hour? They do this and stop tannoy announcements for some times of the day.

 

ffs, had a Google and autism hour is indeed a thing.  Could well've been that.

[Long time lurking]

1 hour ago, Stuey said:

Energy prices are down 80+% - this will be feeding through to inflation (possibly deflation) in H2 2023. 

But the trouble is we will need a year of 15% + deflation to get anywhere near the prices pre 2020 

And rates are going in one direction and that is up for quite a while ,we might see a token short drop as it`s an election year but we are currently only at the mean of the 30+years prio to zirrp years 2010 > 

Extend and pretend has final hit the buffers ,the markets are dictating rates now not the BOE

[BoSon]

2 minutes ago, RWJ said:

ffs, had a Google and autism hour is indeed a thing.  Could well've been that.

It's one of many real uses for those virtual reality goggles. Change people's perception to suit their condition. Could also recolour stuff to make it more visible for the colour blind, and many more similar alterations of reality.

[King Penda]

2 hours ago, Stuey said:

Just what I was about to ask! Inflation and rates will be plummeting by year end. 

Will be 6% base rate by then with luck

[RWJ]

1 minute ago, BoSon said:

It's one of many real uses for those virtual reality goggles. 

Maybe the staff could use them to assist virtual customers, give them something to do.

[stoobs]

6 minutes ago, BoSon said:

It's one of many real uses for those virtual reality goggles. Change people's perception to suit their condition. Could also recolour stuff to make it more visible for the colour blind, and many more similar alterations of reality.

Just enable some instagram filters and every woman you meet will be a stunner.

High-tech equivalent of beer goggles.

[Stuey]

22 minutes ago, King Penda said:

Will be 6% base rate by then with luck

They'll be back at 1% before they hit 6% brah. 

[Long time lurking]

9 minutes ago, Stuey said:

They'll be back at 1% before they hit 6% brah. 

Another day like today and we will be at 5% by the weekend

[The Bear of Doom]

6 hours ago, azzuri82 said:

Making our world smaller, focusing on kids/family, and only doing 'easy' work with little to no stress. We're in the fortunate position to be able to do this - I actually don't know how folk on the treadmill do it - working 2 FT jobs with £400/500k mortgages etc. and looking after kids - these people must be due a mental breakdown of some sorts pretty soon due to debt stress/load.

In other words de-complexifying your life, which fits in with one of the general themes of this thread, i.e. de-complexification of supply chains, finances, government etc.

[Austin Allegro]

27 minutes ago, stoobs said:

Just enable some instagram filters and every woman you meet will be a stunner.

High-tech equivalent of beer goggles.

Would also require tactile re-calibrating with special gloves to enable a 20st land whale to feel like a size 8 cutie. I don't think the technology will be around for decades yet, by which time most heterosexual males that could benefit will have transitioned and those who still have testosterone in their bloodstream won't have any energy left due to polygamy.

[The Bear of Doom]

On 15/06/2023 at 21:17, Wight Flight said:

My FIL and his father worked for Hawker Sidley at Brooklands.

Interesting stories.

I'm going to be a pedant here, but Brooklands / Weybridge was Vickers, and then British Aircraft Corporation (BAC). IIRC, it has the dubious honour of being the first major site to be closed by BAe (I think Brooklands may have served as the BAe HQ for a while after the were company was created by Nationalisation of BAC and Hawker-Siddeley Aviation (HSA) in 1977). Sadly not the last site to be closed 

Incidentally, HSA, which was formed by the merger of the Hawker Aircraft Company (founded by Thomas Sopwith after his company was wound up due to a large tax bill or similar from the government) and some of the companies founded by John Siddeley, was the worlds largest aircraft manufacturer for a short while in the 1930s.

By the 1960s HSA had taken over more UK based companies and were re-organised into several divisions; Hatfield-Chester ,formerly De-Havilland, the Hatfield site is now housing / FE college campus; Manchester, formerly Avro with factories at Chadderton and Woodford (now a housing estate); and Kingston-Brough, which was an amalgamation of Hawker at Kingston (now gone) and Dunsfold (where Top Gear is filmed), and Blackburn Aircraft at Brough (I don't think they have any manufacturing at that site now).

The wider Hawker-Siddeley group, under the direction of Thomas Sopwith became a very large engineering conglomerate with extensive interests in railways, large Diesel engines, electrical switchgear and plant, and speciality metals. They also had a large presence in Canada. Its now pretty much all gone, so it goes to show how a large and successful LSE listed company of national strategic importance can fade away over the years.

 

[Stuey]

19 minutes ago, Long time lurking said:

Another day like today and we will be at 5% by the weekend

Do you think the markets drive the BoE? 

[Wight Flight]

35 minutes ago, The Bear of Doom said:

I'm going to be a pedant here, but Brooklands / Weybridge was Vickers, and then British Aircraft Corporation (BAC). IIRC, it has the dubious honour of being the first major site to be closed by BAe (I think Brooklands may have served as the BAe HQ for a while after the were company was created by Nationalisation of BAC and Hawker-Siddeley Aviation (HSA) in 1977). Sadly not the last site to be closed 

Incidentally, HSA, which was formed by the merger of the Hawker Aircraft Company (founded by Thomas Sopwith after his company was wound up due to a large tax bill or similar from the government) and some of the companies founded by John Siddeley, was the worlds largest aircraft manufacturer for a short while in the 1930s.

By the 1960s HSA had taken over more UK based companies and were re-organised into several divisions; Hatfield-Chester ,formerly De-Havilland, the Hatfield site is now housing / FE college campus; Manchester, formerly Avro with factories at Chadderton and Woodford (now a housing estate); and Kingston-Brough, which was an amalgamation of Hawker at Kingston (now gone) and Dunsfold (where Top Gear is filmed), and Blackburn Aircraft at Brough (I don't think they have any manufacturing at that site now).

The wider Hawker-Siddeley group, under the direction of Thomas Sopwith became a very large engineering conglomerate with extensive interests in railways, large Diesel engines, electrical switchgear and plant, and speciality metals. They also had a large presence in Canada. Its now pretty much all gone, so it goes to show how a large and successful LSE listed company of national strategic importance can fade away over the years.

 

You could well be right. He also worked at Dunsfold, and i know he worked on the harrier. I may well have confused employers / locations.

[spygirl]

36 minutes ago, Stuey said:

Do you think the markets drive the BoE? 

Yes, and tge Fed.

CBs can only mess around on the short dated bonds.

Soon the fuckwittery catches up.

BoE: plagued by gilt

Sleeping QT

https://www.ft.com/content/b556a91b-99a1-48f9-b3c3-b0e1c0731859

Goldman Sachs has also chipped in today with a timely look at the Bank of England’s quantitative tightening framework, under which the Andrew Bailey bunch are reducing their pandemic-era stockpile through a combination of active selling and allowing mature gilts to roll off their portfolio.

When we wrote about QT back in the halcyon days of last September, Liz Truss had only been prime minister for three days (about 6 per cent of her time in office), but some systemic problems within the gilt market were already clear: the Bank was preparing to actively dump gilts at the same time the government was preparing for a huge wave of further issuance.

Market gets flooded with supply, prices go down, simples. The ‘fiscal event’ of late September led to a delay in active sales, but they’re now firmly under way, and the stock of gilts held through the Bank’s asset purchase facility is now £808bn, down from £875bn last February. Chart from NatWest:

 

The Bank wants to get that number down to £325bn–£480bn, depending on conditions — but that’s looking like more and more of a challenge, reckon Goldman’s analysts:

Going forward, we think it is likely that the BoE will slow down the pace of active sales from October for three main reasons. First, net gilt supply to the private sector is poised to increase meaningfully over the upcoming years due to a combination of higher net gilt issuance and higher APF redemptions. Second, continued upside surprises in inflation and labour market prints have led to increased volatility and reduced liquidity in UK gilt market. Third, the repricing in gilt yields—if sustained—also implies higher debt interest costs and BoE losses, and thus higher gilt issuance.

They add that, like with just about everything, it’s very hard to make estimates currently:

But uncertainty around the extent of the slowdown in the pace of active sales is high. Our baseline is that the BoE will reduce the pace of active sales to around £7.5bn/qtr and keep the annual stock reduction target unchanged at £80bn next year. However, given that this pace is ultimately going to be determined by the BoE’s conversation with market participants and the latter’s willingness to digest gilt supply, we see the hurdle for the BoE to reduce the speed of active sales even further to somewhere around £5bn/qtr as low.

Currently gilt yields are primarily creating political pressure for the Government, but that could easily spill on to Threadneedle Street. The Bank has shown signs of being reactive to issues in the gilt markets already, with last Autumn offering an extremely early and extremely fire-y trial by fire.

[Long time lurking]

38 minutes ago, Stuey said:

Do you think the markets drive the BoE? 

Bond yields are rising and the pound is strengthen ...go figure whats causing that anomaly that will answer that question

 

 

[Long time lurking]

1 minute ago, spygirl said:

Yes, and tge Fed.

CBs can only mess around on the short dated bonds.

Soon the fuckwittery catches up.

BoE: plagued by gilt

Sleeping QT

https://www.ft.com/content/b556a91b-99a1-48f9-b3c3-b0e1c0731859

Goldman Sachs has also chipped in today with a timely look at the Bank of England’s quantitative tightening framework, under which the Andrew Bailey bunch are reducing their pandemic-era stockpile through a combination of active selling and allowing mature gilts to roll off their portfolio.

When we wrote about QT back in the halcyon days of last September, Liz Truss had only been prime minister for three days (about 6 per cent of her time in office), but some systemic problems within the gilt market were already clear: the Bank was preparing to actively dump gilts at the same time the government was preparing for a huge wave of further issuance.

Market gets flooded with supply, prices go down, simples. The ‘fiscal event’ of late September led to a delay in active sales, but they’re now firmly under way, and the stock of gilts held through the Bank’s asset purchase facility is now £808bn, down from £875bn last February. Chart from NatWest:

 

The Bank wants to get that number down to £325bn–£480bn, depending on conditions — but that’s looking like more and more of a challenge, reckon Goldman’s analysts:

Going forward, we think it is likely that the BoE will slow down the pace of active sales from October for three main reasons. First, net gilt supply to the private sector is poised to increase meaningfully over the upcoming years due to a combination of higher net gilt issuance and higher APF redemptions. Second, continued upside surprises in inflation and labour market prints have led to increased volatility and reduced liquidity in UK gilt market. Third, the repricing in gilt yields—if sustained—also implies higher debt interest costs and BoE losses, and thus higher gilt issuance.

They add that, like with just about everything, it’s very hard to make estimates currently:

But uncertainty around the extent of the slowdown in the pace of active sales is high. Our baseline is that the BoE will reduce the pace of active sales to around £7.5bn/qtr and keep the annual stock reduction target unchanged at £80bn next year. However, given that this pace is ultimately going to be determined by the BoE’s conversation with market participants and the latter’s willingness to digest gilt supply, we see the hurdle for the BoE to reduce the speed of active sales even further to somewhere around £5bn/qtr as low.

Currently gilt yields are primarily creating political pressure for the Government, but that could easily spill on to Threadneedle Street. The Bank has shown signs of being reactive to issues in the gilt markets already, with last Autumn offering an extremely early and extremely fire-y trial by fire.

The long and the short of it when the music stops 

[spygirl]

4 minutes ago, Long time lurking said:

The long and the short of it when the music stops 

Yep.

Best early description of QE was - cutting a cake into more slices rather making a bigger cake,

 

[Stuey]

28 minutes ago, spygirl said:

Yes, and tge Fed.

CBs can only mess around on the short dated bonds.

Soon the fuckwittery catches up.

BoE: plagued by gilt

Sleeping QT

https://www.ft.com/content/b556a91b-99a1-48f9-b3c3-b0e1c0731859

Goldman Sachs has also chipped in today with a timely look at the Bank of England’s quantitative tightening framework, under which the Andrew Bailey bunch are reducing their pandemic-era stockpile through a combination of active selling and allowing mature gilts to roll off their portfolio.

When we wrote about QT back in the halcyon days of last September, Liz Truss had only been prime minister for three days (about 6 per cent of her time in office), but some systemic problems within the gilt market were already clear: the Bank was preparing to actively dump gilts at the same time the government was preparing for a huge wave of further issuance.

Market gets flooded with supply, prices go down, simples. The ‘fiscal event’ of late September led to a delay in active sales, but they’re now firmly under way, and the stock of gilts held through the Bank’s asset purchase facility is now £808bn, down from £875bn last February. Chart from NatWest:

 

The Bank wants to get that number down to £325bn–£480bn, depending on conditions — but that’s looking like more and more of a challenge, reckon Goldman’s analysts:

Going forward, we think it is likely that the BoE will slow down the pace of active sales from October for three main reasons. First, net gilt supply to the private sector is poised to increase meaningfully over the upcoming years due to a combination of higher net gilt issuance and higher APF redemptions. Second, continued upside surprises in inflation and labour market prints have led to increased volatility and reduced liquidity in UK gilt market. Third, the repricing in gilt yields—if sustained—also implies higher debt interest costs and BoE losses, and thus higher gilt issuance.

They add that, like with just about everything, it’s very hard to make estimates currently:

But uncertainty around the extent of the slowdown in the pace of active sales is high. Our baseline is that the BoE will reduce the pace of active sales to around £7.5bn/qtr and keep the annual stock reduction target unchanged at £80bn next year. However, given that this pace is ultimately going to be determined by the BoE’s conversation with market participants and the latter’s willingness to digest gilt supply, we see the hurdle for the BoE to reduce the speed of active sales even further to somewhere around £5bn/qtr as low.

Currently gilt yields are primarily creating political pressure for the Government, but that could easily spill on to Threadneedle Street. The Bank has shown signs of being reactive to issues in the gilt markets already, with last Autumn offering an extremely early and extremely fire-y trial by fire.

That reads more like the BoE drives the market. 

[Underwhelmed]

2 hours ago, Stuey said:

They'll be back at 1% before they hit 6% brah. 

back to your usual shit, just ignore this cunt

[AlfredTheLittle]

2 minutes ago, Underwhelmed said:

back to your usual shit, just ignore this cunt

I think it's nice to have a different view, pretty much everyone here agrees completely with each other, which can't be healthy.

[Underwhelmed]

2 minutes ago, AlfredTheLittle said:

I think it's nice to have a different view, pretty much everyone here agrees completely with each other, which can't be healthy.

i agree, but it's not about having a different view, it's trolling

[spygirl]

30 minutes ago, Stuey said:

That reads more like the BoE drives the market. 

No, it reads like the market responds to over supply of bonds.