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

[Long time lurking]

[sleepwello'nights]

On 08/08/2023 at 17:12, DurhamBorn said:

So  16 years in,they could of took a 10 year fix at year 15 and been paid off.Oh,but they decided to go interest only,no doubt to put photos on Facebook about making memories or some other such shite spunking the money on holidays.Well now they can make memories of packing boxes and renting or living in a smaller home.Zero sympathy.

Depends on your objective. All our BTL properties were IO. It maximised the rental income. It was never our intention to own them. The last one we've just sold we paid a 10% deposit and the rental yield averaged at 40% a year after costs on the cash deposit. We completed on its sale last week with a capital gain of 30% on the notional purchase price. 

I wish any of my other investments had performed as well. Most of this stuff depends on how you look at the return made. For example the Index Linked Gilts I still hold in my Vanguard ISA look as if they have not performed well after the 30% drop over the last two years. I did the sums recently and although the figures quoted in my personal dashboard don't look good they're still 20% up on the cash I paid. I think Vanguard base their calculations on the number of units held at the average purchase price and the current market price now. I did my calculations on a first in first out basis and I'm pleased to see I'm still in profit. 

Then again when I want to beat myself up I look at how much I could have made if I used the money to buy Bitcoin.  

[Harley]

19 hours ago, sancho panza said:

BoE chap at the open forum type thing I attended a few konths back told me there were records amounts of cash out there.He seemed confused as to why that would be given the BoE et al has been moving to cashless....go figure

Lowa worth a nudge but pricey circa £200

Otherwise cheaper  Haix £50. Ive had a pair for ten years,they do 12 miles a week on and off, but havent worn them for long periods and suspect they wouldnt agree with me.

Lowa boots black circa £160,indestructible .Had some of these.relaible comfy shoe but not as good as

Best boots imho Altberg have had a few of these over the years,comfy,hard wearing and you cna wear them 24 hours no probs.Wear these for work

@Harley @harp may have a more educated view

 

 

Been to a few care homes lately where a lot of the staff have been imported from abroad it would seem.Lot more males doing it than before,I'd presume for visa reasons.Not all care homes jsut some of the ...ahem...less salubrious places.

Is this something you've noticed as well?

I go for fit first and that's brand dependent so Salamon for me (hiking and skiing).  Hard to get atm so just cheap but decent fitting boots are fine given their light use.  Just back from a 5k dog walk in the hills, my cheap trainers were fine.  That said, I had my first sprained ankle during a leisurely day long hill hike after many crazy decades so you can never be too careful, although a stick would have been better (concealed hole).

Edited August 9, 2023 by Harley

[Long time lurking]

25 minutes ago, Harley said:

Cross fingers but the ETFs and a sample of individual stocks still look a bit overbought momentum wise on their monthly charts so this could just be a bounce.  But then they had a sustained rally from similarly a high base before.  Looking at our preferred ETF, the weekly is doing fine and this has bled through to the monthly (at least as best we can see as it's a young ETF with limited data, hence us looking at a sample of stocks).

Russia and Saudi are saying they are going to cut production buy 1.5 million bpd next month between them 

[Harley]

15 minutes ago, Long time lurking said:

Russia and Saudi are saying they are going to cut production buy 1.5 million bpd next month between them 

Yea, but it's only the stock prices that matter for me!  I have no need to be right, wrong, or understand and leave that to others.  Of course, big picture, the oil price is going up (and I need to hedge my heating oil) but this game is littered with twists and turns, else it'll be easy.

[Long time lurking]

16 minutes ago, Harley said:

Yea, but it's only the stock prices that matter for me!  I have no need to be right, wrong, or understand and leave that to others.  Of course, big picture, the oil price is going up (and I need to hedge my heating oil) but this game is littered with twists and turns, else it'll be easy.

Well p[rices never really started to move until Saudi broke there stale mate on the cuts ,and Russia agreed to cut by 500k instead of 300 

Both have made it very clear they will set a floor to prices sometimes they can do that via words other times they need to act 

To me it looks like the floor is at the $70-80 mark

Edited August 9, 2023 by Long time lurking

[Harley]

 

 

 

5 minutes ago, Long time lurking said:

Well p[rices never really started to move until Saudi broke there stale mate on the cuts ,and Russia agreed to cut by 500k instead of 300 

Both have made it very clear they will set a floor to prices sometimes they can do that via words other times they need to act 

 

 

Edited August 9, 2023 by Harley

[M S E Refugee]

They can't help themselves

 

The European Union is preparing to impose sanctions on the new military government in Niger, European sources told Reuters on Wednesday.

An EU diplomat and an official involved in formulating the sanctions confirmed the bloc was devising criteria for punishment, set to include the “undermining of democracy.” 

The formula is likely to be agreed upon soon, the official told the news outlet.

 

The next step would be sanctions against individual members of the military government, said to be responsible for the ousting of former president Mohamed Bazoum last month,” the diplomat said.

No date has been supplied for when these sanctions might materialize, though foreign ministers from the bloc’s 27 countries are expected to discuss potential sanctions as well as other Niger-related issues when they meet in Toledo on August 31.

The EU has suspended security cooperation and financial support in response to last month’s seizure of power by a military faction led by General Abdourahamane Tchiani, cutting Niger off from hundreds of thousands of euros in aid. The US and Canada have also suspended some assistance programs, and several European countries - led by France, the former colonial ruler of Niger - have also cut the country off. 

Credit rating agency Moody’s downgraded Niger’s credit rating last week just days after the country banned uranium and gold exports to France, cutting Paris off from the world’s seventh-largest producer of the nuclear mineral - and the second-largest supplier to the EU. The World Bank has also terminated public-sector payments to Niger.

West African regional partnership ECOWAS devised a plan for military intervention in the country last week, giving the new government until Sunday to reinstate Bazoum. 

However, that deadline has come and gone without the threatened invasion, as ECOWAS is reportedly unprepared for a full-scale military intervention, according to senior military sources who spoke to the Wall Street Journal. 

Neighboring Burkina Faso and Mali have warned ECOWAS against military intervention, stating this would “amount to a declaration of war” on both countries and trigger self-defensive responses. Bazoum, currently in prison, has urged Washington to intervene, lest all of the Sahel “fall to Russian influence” - despite a lack of evidence Moscow played a role in the coup. US Deputy Secretary of State Victoria Nuland personally flew to Niger to pressure the new government, warning them against striking any deals with Russian private military company Wagner and urging them to restore the Washington-friendly status quo.

Nigeriens largely supported the coup, according to a recent survey by The Economist - 78% backed the takeover, while 73% wanted their new leaders to retain power “for an extended period” or “until new elections are held.”

 

[Don Coglione]

2 hours ago, belfastchild said:

Ask for a menu.
Worked for me.
Couldnt be arsed with that shit.

In Mexico City last year, no menus, only QR codes, because COVID. Had to borrow the waiter's phone to order.

Happy to take cash for payment though.

[Harley]

17 minutes ago, M S E Refugee said:

They can't help themselves

 

The European Union is preparing to impose sanctions on the new military government in Niger, European sources told Reuters on Wednesday.

An EU diplomat and an official involved in formulating the sanctions confirmed the bloc was devising criteria for punishment, set to include the “undermining of democracy.” 

The formula is likely to be agreed upon soon, the official told the news outlet.

 

The next step would be sanctions against individual members of the military government, said to be responsible for the ousting of former president Mohamed Bazoum last month,” the diplomat said.

No date has been supplied for when these sanctions might materialize, though foreign ministers from the bloc’s 27 countries are expected to discuss potential sanctions as well as other Niger-related issues when they meet in Toledo on August 31.

The EU has suspended security cooperation and financial support in response to last month’s seizure of power by a military faction led by General Abdourahamane Tchiani, cutting Niger off from hundreds of thousands of euros in aid. The US and Canada have also suspended some assistance programs, and several European countries - led by France, the former colonial ruler of Niger - have also cut the country off. 

Credit rating agency Moody’s downgraded Niger’s credit rating last week just days after the country banned uranium and gold exports to France, cutting Paris off from the world’s seventh-largest producer of the nuclear mineral - and the second-largest supplier to the EU. The World Bank has also terminated public-sector payments to Niger.

West African regional partnership ECOWAS devised a plan for military intervention in the country last week, giving the new government until Sunday to reinstate Bazoum. 

However, that deadline has come and gone without the threatened invasion, as ECOWAS is reportedly unprepared for a full-scale military intervention, according to senior military sources who spoke to the Wall Street Journal. 

Neighboring Burkina Faso and Mali have warned ECOWAS against military intervention, stating this would “amount to a declaration of war” on both countries and trigger self-defensive responses. Bazoum, currently in prison, has urged Washington to intervene, lest all of the Sahel “fall to Russian influence” - despite a lack of evidence Moscow played a role in the coup. US Deputy Secretary of State Victoria Nuland personally flew to Niger to pressure the new government, warning them against striking any deals with Russian private military company Wagner and urging them to restore the Washington-friendly status quo.

Nigeriens largely supported the coup, according to a recent survey by The Economist - 78% backed the takeover, while 73% wanted their new leaders to retain power “for an extended period” or “until new elections are held.”

 

 

I wonder if those Eurocrats when young ever had the nightmare thought of throwing a party and no-one showing up.  There's still time!

..... although bullying a small kid might work this time.  You can take France out of a colony but you can't take the colonists out of France!

Edited August 9, 2023 by Harley

[Harley]

Dunno, donnacare, now feck off and let me look at some price charts and then walk the dog ..

 

 

[Axeman123]

1 hour ago, Long time lurking said:

To me it looks like the floor is at the $70-80 mark

The west set a ceiling, now they are setting a floor above it.

2 hours ago, Long time lurking said:

I never thought I would say these words: based Diane Abbot

 

[sancho panza]

As an aside Mrs P works in the food manufacturing world so is all over this sort of thing. 

Basically,  for those that don't know big manufacturers pay the likes of tesco for shelf space, more for the busier aisles etc.Tesco also pressure the brand name manufacturers not to supply the aldis of this world .

Long story short, picked up sone nespresso compatible pods in aldi.Mrs P says these are being sold with the approval of nespresso and that is a sign times are getting hard for a posh brand like that to be allowing aldi to use their name. Also maybe hints that aldi picking up some posh customers

Also ,aldi have been stocking some branded items in the regular aisles as shown below,notoced heinz a while back.coke has been available in the regular aisle for yonks but today saw Pepsi for first time(it's been in the fomo aisles before as has walkers crisps)

For my money,this is a good move by big brands otherwise they'll end up with the Tories /M&S problems demographically

The time c they are a changin' 

[AWW]

4 hours ago, ThoughtCriminal said:

Interesting chart. Looks like we may be at the start of the energy run up

...or a big drop in the S&P. Suspect it'll be a combination of the two.

[reformed nice guy]

https://www.thisismoney.co.uk/money/pensions/article-12390805/Pensions-cost-taxpayers-defence-policing-education-combined.html

Pensions to cost taxpayers more than defence, policing and education combined, figures show

The Government has said it will reach £124billion in the current financial year and is expected to stand at £135billion by 2025.

That would mean more public money spent on the state pension than on the combined day-to-day budgets of the Department for Education (estimated at £84.9billion in 2024-25), Home Office (£15.5billion) and Ministry of Defence (£32.8billion).

[desertorchid]

I continue to raise the Chinese Telecoms companies on here as I think it is a gap in the industry overlooked by DB. Latest results by their 3rd largest carrier (328 milion customers):

https://www.thestandard.com.hk/section-news/section/2/255041/China-Unicom-ups-payout-as-net-hits-12.4b-yuan

* China Unicom (0762) said its interim profit rose 13.1 percent to 12.4 billion yuan (HK$13.5 billion) from a year ago, a double-digit growth for the seventh consecutive year.

*The telecom giant declared an interim dividend of 20.3 fen, up by 23 percent year on year.

 

[CannonFodder]

 

Its kicking off Pru...

Seems there  was a call on tiktok to loot JD sports.

police still ablt to cope with this one it seems

Long arm of law can stop shoplifting - front page news

Edited August 9, 2023 by CannonFodder

[Long time lurking]

 

[Virgil Caine]

2 hours ago, reformed nice guy said:

https://www.thisismoney.co.uk/money/pensions/article-12390805/Pensions-cost-taxpayers-defence-policing-education-combined.html

Pensions to cost taxpayers more than defence, policing and education combined, figures show

The Government has said it will reach £124billion in the current financial year and is expected to stand at £135billion by 2025.

That would mean more public money spent on the state pension than on the combined day-to-day budgets of the Department for Education (estimated at £84.9billion in 2024-25), Home Office (£15.5billion) and Ministry of Defence (£32.8billion).

Looking at past Budgets and spending rounds I think the annual cost of the state pension has been more than Education, Defence and the Home Office for quite a long time. Just adjusted for inflation the increase from 2022-23 would be about £8-9 billion. What the article fails to mention is that the total cost of working age welfare spending is nearly as much as the cost of the state pension. The killer in the forecast is actually the debt interest to be paid which is estimated to be more than the whole education budget

https://obr.uk/forecasts-in-depth/brief-guides-and-explainers/public-finances/

[onlyme]

6 hours ago, sancho panza said:

As an aside Mrs P works in the food manufacturing world so is all over this sort of thing. 

Basically,  for those that don't know big manufacturers pay the likes of tesco for shelf space, more for the busier aisles etc.Tesco also pressure the brand name manufacturers not to supply the aldis of this world .

Long story short, picked up sone nespresso compatible pods in aldi.Mrs P says these are being sold with the approval of nespresso and that is a sign times are getting hard for a posh brand like that to be allowing aldi to use their name. Also maybe hints that aldi picking up some posh customers

Also ,aldi have been stocking some branded items in the regular aisles as shown below,notoced heinz a while back.coke has been available in the regular aisle for yonks but today saw Pepsi for first time(it's been in the fomo aisles before as has walkers crisps)

For my money,this is a good move by big brands otherwise they'll end up with the Tories /M&S problems demographically

The time c they are a changin'

 

Went to an event that covered supermarket promotions, quite of often apparently it is the supermarket that dictate the timing / type of offer with price they were willing to pay.  The suppliers wish to keep their favourable shelf positioning so are not in a position to really say no so pony up stock at heavily reduced margins but I suppose do get the additional exposure, for whatever that is worth in follow on sales.

Things certainly are changing, Aldi/Lidl seem to have middle isles either stuffed with more tat than useful stuff compared to pre-pandemic / inflation stocking or more selected food lines whch are not exactly cheap in many cases. A move to more branded product runs the risk of not really appealing to any particuar core group in some ways,  last visit to Aldi (admittedly after peak rush) the place was strewn with boxes, obviously understaffed and stock items (presumably the popular / in demand items) missing  all over the place - not sure this would appeal to the upper shopper segment whilst also not providing the product for sale to the lower / budget conscious shopping there in the first place.

Also quite noticeable is staff turnover. A few years ago you'd see the same core group running the local Aldi/Lidl  year in year out. Now it seems a complete set of new faces and they don;t stay there long either.

[Harley]

1 hour ago, onlyme said:

Went to an event that covered supermarket promotions, quite of often apparently it is the supermarket that dictate the timing / type of offer with price they were willing to pay.  The suppliers wish to keep their favourable shelf positioning so are not in a position to really say no so pony up stock at heavily reduced margins but I suppose do get the additional exposure, for whatever that is worth in follow on sales.

Things certainly are changing, Aldi/Lidl seem to have middle isles either stuffed with more tat than useful stuff compared to pre-pandemic / inflation stocking or more selected food lines whch are not exactly cheap in many cases. A move to more branded product runs the risk of not really appealing to any particuar core group in some ways,  last visit to Aldi (admittedly after peak rush) the place was strewn with boxes, obviously understaffed and stock items (presumably the popular / in demand items) missing  all over the place - not sure this would appeal to the upper shopper segment whilst also not providing the product for sale to the lower / budget conscious shopping there in the first place.

Also quite noticeable is staff turnover. A few years ago you'd see the same core group running the local Aldi/Lidl  year in year out. Now it seems a complete set of new faces and they don;t stay there long either.

Seen that down South and in the cities but not here.  There you go!  Same with the centre isle though.  Now renamed from "the money isle" to the "Isle of Dogs"!

PS:  Tbf , the overused central Reading one was like that but the one further out near Morrisons was nice.

Edited August 10, 2023 by Harley

[crashmonitor]

"Tine"and "Norm" again.. This time wondering how they fair in the assets league table for a household aged 65. Well we all wonder whether we are Premier League or Vauxhall Conference ( they talk median not mean). In Canada it is just over half million dollars in the US just over quarter of a million.

 

 

 

Edited August 10, 2023 by crashmonitor

[TNS]

5 hours ago, Virgil Caine said:

Looking at past Budgets and spending rounds I think the annual cost of the state pension has been more than Education, Defence and the Home Office for quite a long time. Just adjusted for inflation the increase from 2022-23 would be about £8-9 billion. What the article fails to mention is that the total cost of working age welfare spending is nearly as much as the cost of the state pension. The killer in the forecast is actually the debt interest to be paid which is estimated to be more than the whole education budget

https://obr.uk/forecasts-in-depth/brief-guides-and-explainers/public-finances/

yep, I didn't realise until i saw this comment, that there are that many single mums of 3 or more kids!

Forgot to mention 135bn for people who have paid into the system is less than the 144bn and climbing of those who choose not to work. A perfect example is the 780000 single mums of 3 or more who recieve over 35k a year in handouts now that's more than 3 times a person's state pension . Says alot really

[Harley]

7 hours ago, desertorchid said:

I continue to raise the Chinese Telecoms companies on here as I think it is a gap in the industry overlooked by DB. Latest results by their 3rd largest carrier (328 milion customers):

https://www.thestandard.com.hk/section-news/section/2/255041/China-Unicom-ups-payout-as-net-hits-12.4b-yuan

* China Unicom (0762) said its interim profit rose 13.1 percent to 12.4 billion yuan (HK$13.5 billion) from a year ago, a double-digit growth for the seventh consecutive year.

*The telecom giant declared an interim dividend of 20.3 fen, up by 23 percent year on year.

 

Nice to see steadily rising operating cash flow and low debt and intangibles.  Not the norm!  The HK market has been good to us and we've had none of the problems people like to warn us about, so far.

Our dilema atm is it and others pay just a few percent over the cash rate (6% here and biannually rather than 4% monthly).  I wonder if a mix of cash and an ETF would be better than a diversified number of stocks to manage for an income/capital preservation type portfolio. 

Now if/when it and others had an 8% yield well....!  But then hopefully the divs will increase with inflation but that's not a given and would be covered by an ETF to some (diluted?) extent. 

For now, we'll be picky, buying such stocks at higher yields to compensate for the risk while playing the ETFs for the sector, etc gains. Hard to find a global telco ETF though, just a US and a European one.

[DurhamBorn]

8 hours ago, reformed nice guy said:

https://www.thisismoney.co.uk/money/pensions/article-12390805/Pensions-cost-taxpayers-defence-policing-education-combined.html

Pensions to cost taxpayers more than defence, policing and education combined, figures show

The Government has said it will reach £124billion in the current financial year and is expected to stand at £135billion by 2025.

That would mean more public money spent on the state pension than on the combined day-to-day budgets of the Department for Education (estimated at £84.9billion in 2024-25), Home Office (£15.5billion) and Ministry of Defence (£32.8billion).

The State pension is not a problem,,its the in work bennies and all the other bennies for retired with nothing else.There are millions who retire at 18 .They are trying to set up for where they cut,but only for those who have other pensions etc Im seeing lots of Africans around here now,within the last 6 months,big obese women dragging a few kids around who mostly look retarded.These are not coming in on boats,so where are they coming from?,all massive drains on the taxpayer.We are watching them destroy our country that took 1700 years to get where it did in a couple of decades.