Credit deflation and the reflation cycle to come (part 7)

[Democorruptcy]

26 minutes ago, DurhamBorn said:

Telcos and asset managers.Both at huge under-valuations for me.Different reasons of course.Its good to see others i respect like Lyn joining the dots on this.The market simply does not understand the massive increase in free cash if you can top out CAPEX then flatline OPEX in an inflation cycle.I think BT for instance is on a future free cash flow valuation of 3.4.Now of course politics can come in,pension funds can blow up,solar flares,nothing is ever certain.Once free cash increases debts will need to be paid down rather than roll them over etc as well so it wont all be for shareholders,but i could see some telcos doubling the divis,launching share buy backs and paying off debt as it comes due over time.

Asset managers having a torrid time due to structural issues ie tech and trackers,but again rising liquidity gives them a tail wind in the end with a pretty much fixed cost base.Much more risky,but EM leaning im willing to accept it.

I hope we get some two year fixes on energy come to market in the summer,i think August will be a very good time to fix.

 

 

Did you see the bit about BT and Starlink? It seems a bit of a strange one to me.

Quote

 

Telecommunications giant BT was said to be in discussions with Elon Musk's Starlink regarding a satellite phone and broadband offering aimed at servicing rural dead spots.
BT will test Starlink's equipment at its Adastral Park research centre near Ipswich, according to the Telegraph, as it looks to deliver connections to hard-to-reach areas of the UK.

While BT originally intended to use the Starlink network solely for broadband services, the firm was now said to be looking at utilising the technology in order to improve mobile signals across Britain.

If BT was to ink a direct-to-mobile deal with Starlink, which operates a network of roughly 5,000 satellites, it would possibly be required to obtain a special licence from industry watchdog Ofcom.

Talks were currently centred around BT's business offering, which allows it to deliver mobile and broadband services to remote sites such as oil rigs and mines. However, the technology was also expected to be rolled out to consumers in an effort to plug gaps that traditional cables and masts have been unable to reach.

https://www.hl.co.uk/shares/shares-search-results/b/bt-group-plc-ordinary-5p/share-news

 

 

[nirvana]

10 hours ago, Onsamui said:

The Lira always goes up in the winter for some reason.

what are villa/apartment prices doing over there at the moment?

[nirvana]

VOD sub 69........good number that, along with 42 lol

@Democorruptcy u avoiding Vod still mon ami?

[Democorruptcy]

Just now, nirvana said:

VOD sub 69........good number that, along with 42 lol

@Democorruptcy u avoiding Vod still mon ami?

I haven't owned any since I sold it (at a slight loss) early Jan 2023 and put it into BME, partly for a 20p divi with the expectation they would cover it, if more skint people shopped at cheaper places (since sold but they did another 20p special this month). Must admit I was very tempted to buy VOD again recently with that Microsoft thing but didn't.

[Onsamui]

9 minutes ago, nirvana said:

what are villa/apartment prices doing over there at the moment?

Kalkan where we used to have a villa is very popular and villas are not cheap to rent. Istanbul is not too pricey.  Depends on bookings, if people can't afford a holiday they drop the prices, like all popular resorts.

[janch]

1 hour ago, Pip321 said:

‘if I wanted a yacht I would always be poor’.

This is where most people go wrong I think.  @WICAO had the right approach in cutting living costs and saving like mad while the going is good with as high an income as you an get then get out before you get swallowed up by the rat race and the corporate world.  Most people in well-paid jobs alter their standard of living to match their salary and then you're captured and a wage slave for life.   Being older and female my main driver was my family so ego was never tied up with the job although I could have gone that way a few times.  Having children doesn't help as they always seem to have a list of "wants"

As some have said upthread life is great when you don't have to commute every day etc.  I now go on train journeys for leisure and enjoy them rather than having to go for work purposes.  For ages after I stopped working I used to lie in bed after waking listening to the traffic and thanking my lucky stars I was no longer part of it.   I won't say I FIRED as I never calculated how much I needed to save.  I just stopped when I couldn't bear it any more and will never be rich but you know what, I no longer "want" anything much apart from somewhere reasonable to live and food to eat.  All those years of frugal living trained me to manage on relatively little.  I've also had plenty of time to sort my head out which has been a long process and is all to do with family issues in my case.  I was only really able to do this when I stopped work as while I was on the work treadmill I didn't have the energy and head-space.

[MrFanciful]

1 hour ago, Pip321 said:

I think when it comes to mindset there are things that take time and things that just hit you.

We used to go to Venice, like others might go on a beach holiday ie lounge around, drink coffee, Peroni after 4pm and do almost nothing and stay for 10 days. Maybe an cuppa in Harry’s bar to say we had been for €15. Orchestra in the evening in the drawing room of Europe (St Marks Sq) and watch the sun hit the gold on the cathedral. Relaxed and an overwhelming sense of well being….all whilst I was still preparing to FIRE and living relatively frugally. 

On one occasion about 10 years ago I was sitting in Venice on a sunny afternoon watching a yacht trying to dock yards away from us. It was 100 foot (might be exaggerating) pure white, had a NZ flag on it, had security guards with dark glasses watching it. Quite Beautiful.

I said to my wife ‘if I wanted a yacht I would always be poor’. And as I said it, it really hit me how true it was. Not the yacht per se but the new car, new build house for 30% more than it should be, the other trifles that many have but I don't desire

Its about what you really want and not what you think you want or what society thinks you should have because you earn XYZ. Of course you can and should push yourself…..I know many wealthy landlords who haven’t even been abroad….but I imagine if they did they would see just what they have missed.

Try work out what you love and try do those things.😉

 

A few more camera lenses and the ability to go places and use them, then enough for a comfortable retirement for me is enough now.

[AWW]

1 hour ago, Pip321 said:

Its about what you really want and not what you think you want or what society thinks you should have

This is the way to live. I have my dream car parked on the driveway of my rented house. Buying the car that was once just a poster on my bedroom wall felt like far more of an achievement than buying any house will. I took years off work in my 20s and 30s (when I could have been getting paid Stuey-level money), because I didn't want to wait until I was in my 60s to see the world. Neither of those things make financial sense. But not everything has to. Your priorities are your priorities and nobody else's opinion matters.

[nirvana]

26 minutes ago, Onsamui said:

Kalkan where we used to have a villa is very popular and villas are not cheap to rent. Istanbul is not too pricey.  Depends on bookings, if people can't afford a holiday they drop the prices, like all popular resorts.

I was meaning to buy....I recall you mentioned Kalkan before (some things stick in my head )......I remember that place very fondly

29 minutes ago, Democorruptcy said:

I haven't owned any since I sold it (at a slight loss) early Jan 2023 and put it into BME, partly for a 20p divi with the expectation they would cover it, if more skint people shopped at cheaper places (since sold but they did another 20p special this month). Must admit I was very tempted to buy VOD again recently with that Microsoft thing but didn't.

you bought B&M, hilarious.........what were Vod doing with the devils dildo???

[Castlevania]

41 minutes ago, nirvana said:

what are villa/apartment prices doing over there at the moment?

House prices in Istanbul are insane. The new head of the Turkish central bank is living with her parents (she’s 44).

[DurhamBorn]

58 minutes ago, Democorruptcy said:

Did you see the bit about BT and Starlink? It seems a bit of a strange one to me.

 

I think these things tend to be just news flow more than anything.BT might be thinking to offer the service to people out in the highlands etc,probably chicken feed amounts.I was looking at BTs build costs on FTTP,its roughly half per property passed than Cityfibre,and they are funding their network from debt.Cityfibre have deep pocket backers,but i expect given rates are much higher than expected and their build costs are double BT they will be burning cash.We will likely end up with BT,Virgin and one other FTTP company,the alt nets will all go bust,or merge down to one company i think.

People seem to enjoy knocking BT,but Openreach are doing a superb job at rolling fibre out at very good build costs.They have managed to keep costs flat even with massive inflation.

[Democorruptcy]

18 minutes ago, nirvana said:

you bought B&M, hilarious.........what were Vod doing with the devils dildo???

Why hilarious? The fat bennies mob in the UK got their inflation rises to spend down B&M and Home Bargains!

The VOD thing was partly them hitting -25% since I sold coinciding with this MS thing:

Quote

 

Vodafone has signed a 10-year strategic partnership with American software giant Microsoft which will see the UK-listed telecoms group invest $1.5bn over the next decade.
The deal will "bring generative AI, digital services and the cloud to more than 300 million businesses and consumers", Vodafone said in a statement on Tuesday.

In return, Microsoft will use Vodafone's fixed and mobile connectivity services, and invest in its managed internet of things connectivity platform, which will become a separate, standalone business by April 2024.

Vodafone will Microsoft's Azure OpenAI to increase customer satisfaction across all digital touchpoints, including its digital assistant TOBi. The AI capabilities of Microsoft Copilot will also be used by the Vodafone workforce to boost productivity.

It will also use the partnership to further scale its M-Pesa division in Africa through to offer more digital services to the SME market, housing it on Azure to enable the launch of new cloud-native applications.

Meanwhile, Vodafone will distribute Microsoft services like Azure and Microsoft Teams to its business customers across Europe, and accelerate its cloud plans through modernising data centres using Azure.

Vodafone chief executive Margherita Della Valle said the deal marks "a bold commitment to the digital future of Europe and Africa".

She said: "This unique strategic partnership with Microsoft will accelerate the digital transformation of our business customers, particularly small and medium-sized companies, and step up the quality of customer experience for consumers."

https://www.hl.co.uk/shares/shares-search-results/v/vodafone-group-plc-usd0.20-2021/share-news

 

 

[nirvana]

2 minutes ago, Democorruptcy said:

Why hilarious? The fat bennies mob in the UK got their inflation rises to spend down B&M and Home Bargains!

yeah good analaysis.......I never knew B&M were a multi-billion pound outfit based in Luxembourg........money in them scummers no doubt PS I'm not proud, I like the cheapo shops myself......Japan has one called Daiso......my 'guide' was proudly showing me all the Daisos he knew of........I think we got cheap nuts there

[Democorruptcy]

10 minutes ago, DurhamBorn said:

I think these things tend to be just news flow more than anything.BT might be thinking to offer the service to people out in the highlands etc,probably chicken feed amounts.I was looking at BTs build costs on FTTP,its roughly half per property passed than Cityfibre,and they are funding their network from debt.Cityfibre have deep pocket backers,but i expect given rates are much higher than expected and their build costs are double BT they will be burning cash.We will likely end up with BT,Virgin and one other FTTP company,the alt nets will all go bust,or merge down to one company i think.

People seem to enjoy knocking BT,but Openreach are doing a superb job at rolling fibre out at very good build costs.They have managed to keep costs flat even with massive inflation.

It seems a bit like BT showcasing what Starlink is capable of. I saw them as a competitor, in time. It's not just rural, it mentions Starlink improving mobile signals across the UK. With Starlink/BT and Vod/MS, it seems the USA wants in on our telecoms.

BT market cap is £11bn, I remember talk of them splitting Openreach off in 2020, valuing that at £20bn.

[Democorruptcy]

2 minutes ago, nirvana said:

yeah good analaysis.......I never knew B&M were a multi-billion pound outfit based in Luxembourg........money in them scummers no doubt PS I'm not proud, I like the cheapo shops myself......Japan has one called Daiso......my 'guide' was proudly showing me all the Daisos he knew of........I think we got cheap nuts there

B&M and Home Bargains are opening up all over the place. Where I'm sat in Cheshire I've got 6 within 5 miles. Makes you wonder how many they can sustain without taking customers from existing stores and how cheaply their expansions have been funded but there's always people in them.

[nirvana]

3 minutes ago, Democorruptcy said:

B&M and Home Bargains are opening up all over the place. Where I'm sat in Cheshire I've got 6 within 5 miles. Makes you wonder how many they can sustain without taking customers from existing stores and how cheaply their expansions have been funded but there's always people in them.

yeah in Europe they have Action.......it's bloody ace

https://en.wikipedia.org/wiki/Action_(store)

[belfastchild]

Starlink is roughly 500 quid for the kit and 75 quid a month.
Its only ever going to be very niche here. Reach a critical mass and someone will stick a microwave link up and local distribution.

2 hours ago, Pip321 said:

I said to my wife ‘if I wanted a yacht I would always be poor’.

Depends on the size of the yacht though. The problem is people get big ideas. I took a friend out on my boat years ago, his wife met us and came out for a spin. They went home and started to look at 40 grand boats but wised up.
I met them for coffee in my campervan which cost 5 grand. They went and bought a motorhome on credit for 45k.
Im spending about 2k completely revamping the camper, new panels all round, complete service, new suspension and brakes etc. Doing it as a hobby over 6 months (or maybe 9) and I'll have something I can travel round it for at least 5-10 years with no real worries at all. Of course, it will still look like a 26 year old campervan and some people just dont see the value in it, rather than the cost.

[montecristo]

25 minutes ago, belfastchild said:

Starlink is roughly 500 quid for the kit and 75 quid a month.
Its only ever going to be very niche here. Reach a critical mass and someone will stick a microwave link up and local distribution.

Depends on the size of the yacht though. The problem is people get big ideas. I took a friend out on my boat years ago, his wife met us and came out for a spin. They went home and started to look at 40 grand boats but wised up.
I met them for coffee in my campervan which cost 5 grand. They went and bought a motorhome on credit for 45k.
Im spending about 2k completely revamping the camper, new panels all round, complete service, new suspension and brakes etc. Doing it as a hobby over 6 months (or maybe 9) and I'll have something I can travel round it for at least 5-10 years with no real worries at all. Of course, it will still look like a 26 year old campervan and some people just dont see the value in it, rather than the cost.

I would think that is a good thing.  Less likely to get broken into etc than a flash one.

[Van Lady]

1 hour ago, Democorruptcy said:

B&M and Home Bargains are opening up all over the place. Where I'm sat in Cheshire I've got 6 within 5 miles. Makes you wonder how many they can sustain without taking customers from existing stores and how cheaply their expansions have been funded but there's always people in them.

A anecdote to make you happy.

Last November I went to home bargains with a friend and a friend of hers when we were out. My friend is a long term stay at home mum of 2 teenagers and supported by husband. Paid off house, savings etc. Her friend is a single mum of 2 younger kids on benefits/rent paid and one genuinely ill child. Very different circumstances but both had money to spend. They regularly go to home bargains, probably about once a month.

They both had trolleys and filled them with xmas stuff, household cleaning items, shampoo etc, general household decorative tat items, a few food items but mainly sweets/cakes…… 

I didn’t bother even getting a basket. Several times they both said to me how can you come in here and not buy anything. My response was I haven’t seen anything I need or want to buy. I always have £100’s of pounds cash in my purse so money wasn’t an issue for me.

Don't know how much they spent because I went outside for a roll up cig but I’d guess at least £50/£60 each. The place was heaving with lots of full trolleys.

 

[Royston]

40 minutes ago, Van Lady said:

A anecdote to make you happy.

Last November I went to home bargains with a friend and a friend of hers when we were out. My friend is a long term stay at home mum of 2 teenagers and supported by husband. Paid off house, savings etc. Her friend is a single mum of 2 younger kids on benefits/rent paid and one genuinely ill child. Very different circumstances but both had money to spend. They regularly go to home bargains, probably about once a month.

They both had trolleys and filled them with xmas stuff, household cleaning items, shampoo etc, general household decorative tat items, a few food items but mainly sweets/cakes…… 

I didn’t bother even getting a basket. Several times they both said to me how can you come in here and not buy anything. My response was I haven’t seen anything I need or want to buy. I always have £100’s of pounds cash in my purse so money wasn’t an issue for me.

Don't know how much they spent because I went outside for a roll up cig but I’d guess at least £50/£60 each. The place was heaving with lots of full trolleys.

 

Yes I usually go in Home Bargains and B&M, they're not really any cheaper than supermarkets for most stuff but there's usually something I specifically need from one of them.

They are always full of what are quite obviously bennie claimants buying pointless tat and shite food, the perfect illustration of how the benefits system is designed to remove money from the prudent and hand it over to the feckless to spaff away on shite. 

[DurhamBorn]

2 hours ago, Democorruptcy said:

It seems a bit like BT showcasing what Starlink is capable of. I saw them as a competitor, in time. It's not just rural, it mentions Starlink improving mobile signals across the UK. With Starlink/BT and Vod/MS, it seems the USA wants in on our telecoms.

BT market cap is £11bn, I remember talk of them splitting Openreach off in 2020, valuing that at £20bn.

I think BT is worth £2.50 to £3.50 once they get CAPEX down from £5bill to £4bill.At that point i expect £500 mill extra free cash from price increases and OPEX falls or flatline.The worries are the pension scheme blows up by gilts collapsing or political actions.The idiot polos in Europe have over regulated to the point now EM wealth funds are buying them up.

If net neutrality goes i think BT is worth £4.30 to £6 in ten years.Just my opinion.

[Long time lurking]

 

[Cattle Prod]

On 16/01/2024 at 15:53, Lightscribe said:

I normally agree with a lot of what you say, but leaving the EU was far from the root of the issue, in fact it highlighted exactly why it didn’t matter.

The vote was never meant to swing that way. The polls didn’t forecast it, it was never meant to happen, it was meant to be a sure thing to shut the rebellion up. You could see the panic in the media and politicians when the vote came in (Boris doing a disappearing act) it was palpable.

What that has done since, is only underline that we were on rail tracks regardless. We were going to have unfettered immigration just like the rest of the western world (just now at a different angle). Limits to Growth and all that.

It showed up politics to be exactly what it is, a sham. Many have seen since that the answer doesn’t lie in the current political system (hence the farmers party in the Netherlands and now Germany etc) and to make an omelette you have to crack a few eggs.

(sorry if discussed I’m 30 pages behind) 

I think something has switched in the last few weeks. Has anyone else noticed the war drums beating? It’s almost like they’ve realised unfettered immigration isn’t going to rescue high debt low growth economies after all and that the natives are going to string them up eventually for allowing it. Sooo war it is. Which has happened over and over and over again throughout history.

https://www.bbc.com/news/uk-68097048

Why are all these people suddenly talking about conscription and civilian armies this at the same time? I do not like it. I spot patterns for a living, this is not random in fact it smells of that Army propaganda unit that got involved with covid scaremongering.

Ukraine was just the start and that historically we are at the end of a big cycle here with tradiationally ends in war, 4th turning etc etc. A lot of it about debt: western countries are indebted and have no way to pay it back or buy the resources they need (we here know that’s what net zero/climate change is all about: to condition us to use less and be poorer). Russia is the bogeyman because they have no debt, lots of resources and can’t be invaded as they have nuclear weapons. Western countries have already stolen sovereign Russian reserves, and now they are talking about citizen armies. They are running out of road.

Resources are the reason why Russia has been invaded by the West 4 times in the last 200 years (Crimea by UK and others, France/Napoleon, Germany in both world wars) as well as the Swedes and Poles having a go before that. It was not the other way around: imagine you are a Russian looking west, knowing your history?!

https://en.m.wikipedia.org/wiki/Invasion_of_Russia

You’d want protection from the invading hordes of course, hence Putin. I’m no apologist for him but I do understand why he has such widespread support there, every present day Russian has a recent relative who died in the “Great Patriotic War” ffs including Putin. And of course most of those invasions came through…. Ukraine.

More war drums here: even drawing invasion schematics.

https://www.telegraph.co.uk/world-news/2024/01/25/putin-sparks-fears-war-with-nato-with-visit-to-kaliningrad/

Totally insane. And Russian presidents have been flying to Kaliningrad along this same route since 1945 it’s nothing new or illegal. If the democrats get re-elected in the US we are in trouble. We’d better hope for the republicans, Trump or not, but I think this is unstoppable. I don’t think we get a reset (ie debt Jubilee) without a major conflict. 

And if you saw this straw in the wind, or more likely heard of it, well, you might instruct your central bank to buy gold, right?

Edit

I’m in a Muslim country here it’s very early morning and the call to prayer has just gone up. It strikes my that they couldn’t care less about what I have just written. The west is becoming like the crazy uncle you lock up in the basement, just look at Grant Shapps sending divisions to the eastern front with his toy soldier helmet on while half the country sits around doing nothing. End of a long cycle here, time to dig out Marcus Aurelius and see what he has to say because its that time again really.

End Pax Romana, end Pax Americana.

Edited January 25 by Cattle Prod

[Funn3r]

7 hours ago, Pip321 said:

I think when it comes to mindset there are things that take time and things that just hit you.

We used to go to Venice, like others might go on a beach holiday ie lounge around, drink coffee, Peroni after 4pm and do almost nothing and stay for 10 days. Maybe an cuppa in Harry’s bar to say we had been for €15. Orchestra in the evening in the drawing room of Europe (St Marks Sq) and watch the sun hit the gold on the cathedral. Relaxed and an overwhelming sense of well being….all whilst I was still preparing to FIRE and living relatively frugally. 

On one occasion about 10 years ago I was sitting in Venice on a sunny afternoon watching a yacht trying to dock yards away from us. It was 100 foot (might be exaggerating) pure white, had a NZ flag on it, had security guards with dark glasses watching it. Quite Beautiful.

I said to my wife ‘if I wanted a yacht I would always be poor’. And as I said it, it really hit me how true it was. Not the yacht per se but the new car, new build house for 30% more than it should be, the other trifles that many have but I don't desire

Its about what you really want and not what you think you want or what society thinks you should have because you earn XYZ. Of course you can and should push yourself…..I know many wealthy landlords who haven’t even been abroad….but I imagine if they did they would see just what they have missed.

Try work out what you love and try do those things.😉

 

Something I heard once 50 years ago has stuck in my mind all my life. "Poverty is your treasure - never exchange it for an easy life." To be honest I always thought bollocks that is yoga crystal temple bells new age joss stick woo - who the hell wants to be poor?

I have a lot more time for it now though especially in context

 

Quote

Zengetsu, a Chinese master of the T’ang Dynasty wrote the following for his pupils:

Living in the world yet not forming attachments to the dust of the world is the way of the true Zen student. When witnessing the good action of another, encourage yourself to follow his example. Hearing the mistaken action of another, advise yourself not to emulate it.

Even though alone in a dark room,be as if you were facing a noble guest. Express your feelings, but become no more expressive than your true nature. Poverty is your treasure, never exchange it for an easy life.

A person may appear a fool and yet not be one. He may only be guarding his wisdom carefully.

Virtues are the fruit of self-discipline and do not drop from heaven of themselves as does rain or snow. Modesty is the foundation of all virtues. Let your neighbors discover you before you make yourself known to them.

A noble heart never forces itself forward. Its words are as rare gems, seldom displayed and of great value.

To a sincere student, every day is a fortunate day. Time passes but he never lags behind. Neither glory or shame can move him.

Censure yourself, never another. Do not discuss right or wrong. Some things, though right, were considered wrong for generations. Since the value of righteousness may be recognized after centuries, there is no need to crave immediate appreciation. Live with cause and leave results to the great law of the universe. Pass each day in peaceful contemplation.

 

[MrXxxx]

UK economy in a 'nutshell'?

https://www.msn.com/en-gb/money/other/six-graphs-that-explain-the-uk-economy-ahead-of-bank-of-england-s-interest-rate-decision/ar-BB1hg4Hb

...but just look at the figures and ignore the [overly optimistic] narrative; obviously written by someone who is 'owned' by TPTB!