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

[sancho panza]

I saw this and thought of the UKs Net Zero commitments

 

[Yadda yadda yadda]

26 minutes ago, sancho panza said:

I saw this and thought of the UKs Net Zero commitments

 

Would you eat meat prepared by a vegan restaurant? Will vegans be so keen to eat in a vegan restaurant that also serves meat?

Close the business before creditors do it for you.

[Sue Lowe]

39 minutes ago, sancho panza said:

I saw this and thought of the UKs Net Zero commitments

 

Quote

Responding to comments they received upon sharing the news, they said: "We’ve found it pretty astonishing some of the nastiness in the comments. We have made this choice out of a place of survival for our family-run business and seeing people who are meant to ‘love all beings’ being awful to each other has really been upsetting.

Sounds about right!

[DurhamBorn]

1 hour ago, headrow said:

BT Group PLC (LSE:BT.A) eked out modest growth in revenue and earnings in the third quarter but warned performance continued to be hit by rising costs and that its broadband base would decline.

The telco said in the third quarter ending December, adjusted revenue rose 3% to £5.34 billion from £5.21 billion the year prior, while adjusted EBITDA edged 1% higher to £2.03 billion from £2.01 billion.

Delivering her first trading update as chief executive, Allison Kirkby said: “BT Group has delivered another quarter of revenue and EBITDA growth, while rapidly building and upgrading customers to our full-fibre broadband and 5G networks, and we continue to be on track to achieve our financial outlook for the year."

But BT said financial performance continued to be impacted by higher input costs, legacy declines and prior year one-offs, partly offset by cost transformation and growth in Small & Medium Business and Security.

The firm said Openreach broadband average revenue per user grew by 10% year on year but reported broadband line losses of 369,000 in the year to date, a 2% decline in the broadband base.

It warned ongoing weak broadband market conditions mean losses will exceed 400,000 in 2024.

The firm said fibre to the premises (FTTP) build rate accelerated to 73,000 per week, with a record of 950,000 premises passed in the quarter. The FTTP footprint has now been expanded to 13 million premises with initial build underway to a further 6 million.

Openreach customer demand remained strong for FTTP with net adds of 432,000 in the third quarter and a total of 4.4 million premises now connected.

The company reconfirmed all 2024 financial outlook metrics.

Great results given the fibre build.They are building at £300 per premises passed ,Cityfibre etc are spending £600,and BT are managing to build from cash flow mostly where Cityfibre and the rest its mostly debt,debt that will be looking at 7% coupons.I think BT is on a 2030 free cash multiple of 3.5 here.They should complete the fire build with around £21 bill of debt and maybe then £3.5bill free cash.If the divi then went up 50% over time that would be £1 bill,£2 bill for debt paydown,£500 mill share buy backs.I think 13% compounding for 15 years might be the outcome.Broadband losses are nothing once Fibre is finished because most will be using their network anyway,and those are on OFCOM regulated CPI increases.The only real risks are the pension scheme blows up as gilts collapse,a solar activity blows up the network,or sterling goes to shit and they are mostly sterling based.Labour worried might make them increase divi slower as well in time.They are my 2nd biggest holding now and breakeven here.I sold the first big holding of them on a near double so a repeat would be nice,but i think £2.50 to £3+ is likely if things go their way.

I just hope the new bint in  charge does not go after sport or other crap,stick to comms,build out then return the massive free cash to shareholders.

[Loki]

UK rate held at 5.25%

[Formerly]

6 minutes ago, Loki said:

UK rate held at 5.25%

I was looking for the info and the first page that popped up was this https://www.express.co.uk/finance/personalfinance/1861583/interest-rates-live-bank-of-england-base-rate

From the article

"The Bank of England has announced it will leave the Base Rate unchanged at its historic high of 5.25 percent this month."

Historic high - seriously?

[Kendo]

8 minutes ago, Loki said:

UK rate held at 5.25%

Swati Dhingra opted to cut rates to 5%. Strange, I thought she had left the committee. Catherine Mann and Jonathan Haskel voted for a 0.25% rise.

[Castlevania]

1 minute ago, Kendo said:

Swati Dhingra opted to cut rates to 5%. Strange, I thought she had left the committee. Catherine Mann and Jonathan Haskel voted for a 0.25% rise.

The Argentine who was always dovish left. 

[Kendo]

2 minutes ago, Castlevania said:

The Argentine who was always dovish left. 

Ah, that’s right. Swati was Sunak’s choice.

[DurhamBorn]

1 hour ago, invalid said:

 

Your comment gave me the thought to put some context on inflation, lets look at the RPI index to see over what timescale prices have doubled:

2004 Nov - 189

2023 Dec - 379

So that's 19 years for a doubling of prices. Of course a big chunk of that increase has been condensed into the last few years.

 

Lets look at earnings:

https://www.statista.com/statistics/1002964/average-full-time-annual-earnings-in-the-uk/

2004 - £22,011 - Using this years tax, so an approximation, gives take home of £18,989

2023 - £34,963 -  Take home of 27,797.24

Appreciate that this will come as no surprise what-so-ever to basement dwellers:

Last 19 years prices have increased 100% while take home pay has increased around 50%.

 

 

 

 

And bennies increased with inflation,thats why my roadmap says the productive must lose around 60% to 70% of spending power unless bennies and public sector pensions are reformed.Its direct transfer to the none productive.Incredible.Of course hardly anyone will work when it hits,thats why none work is speeding up now,we are likely past the point where most with children are better off on bennies.The elite just say "productivity puzzel" when its very easy to see if you just cross market the above.

[invalid]

1 minute ago, DurhamBorn said:

And bennies increased with inflation,thats why my roadmap says the productive must lose around 60% to 70% of spending power unless bennies and public sector pensions are reformed.Its direct transfer to the none productive.Incredible.Of course hardly anyone will work when it hits,thats why none work is speeding up now,we are likely past the point where most with children are better off on bennies.The elite just say "productivity puzzel" when its very easy to see if you just cross market the above.

 

 

I wanted to also include the bennie figures for the same period, while the data is there it was broken down into many subsets and I was trying to find a simple per capita figure with total bennies.

Looking back its shocking what has happened.

Looking forward, it's incredibly alarming that we are continuing on the same path.

 

 

[DurhamBorn]

33 minutes ago, Kendo said:

Swati Dhingra opted to cut rates to 5%. Strange, I thought she had left the committee. Catherine Mann and Jonathan Haskel voted for a 0.25% rise.

Catherine has seen mine,the roadmap model that is.

Me to her "do you have a Ouija board Catherine?,because you could do with contacting your old boss Volcker,your going to need his advice to put this inflation fire out"  

What do you all think caused the inflation they asked.Everyone else bullshit,me,you lot monetising the welfare budget,almost pure inflation injected into the veins of the economy a direct assault on the productive.

 

 

[sancho panza]

UK companies have jsut given up clearly........

Penny finally droppoing with the polos' with another fine 'no sh1t sherlock' moment as belwo.

“We will continue to need oil and gas over the coming decades, ''

Also worth noting the labour partys firm commitment to fuel poverty for britsih people

''Last night a Labour spokesman said the new licences would be among the last ever issued should it win the coming general election.''

https://www.telegraph.co.uk/business/2024/01/31/north-sea-oil-drilling-licences-granted-overseas-firms/

Overseas oil companies dominate in North Sea drilling licence round

Korean, Malaysian and Norwegian oil companies have been granted permission to drill for oil and gas in the North Sea in the latest round of exploration licences.

Seventy four areas of the UK’s North Sea and Atlantic waters are to be opened up for new drilling, the North Sea Transition Authority (NSTA) said, with the bulk of new licences handed to foreign operators.

The NSTA issued 24 licences, each covering multiple blocks of seabed. Shell and BP each won a licence but most went to overseas firms including Equinor, the Norwegian state oil company, Malaysian-based Ping Petroleum, and Dana Petroleum, a subsidiary of the Korea National Oil Corporation.

The biggest clutch, comprising four of the 17 licences, went to Neo Energy (Zex), which is controlled by HitecVision, a Norwegian private equity investor.

 

 

Foreign ownership means any profits made will go to investors abroad. The main benefit to the UK will be the taxes collected on those profits, plus any jobs generated directly or in the supply chain.

The regulator’s announcement follows Rishi Sunak’s pledge to boost exploration for oil and gas in UK waters to “support the nation’s energy security”.

Graham Stuart, the minister for energy security and net zero, said: “We will continue to need oil and gas over the coming decades, so it is common sense to make the most of our own resources – with domestically produced gas almost four times cleaner than importing Liquefied Natural Gas from abroad.”

The latest government data shows that the UK still relies on oil and gas for 75pc of its total energy, consuming 75bn cubic metres of gas and 60m tonnes of oil a year. The UK has 32m vehicles reliant on petrol and diesel, 25m homes reliant on gas for heating – and gets 38pc of its electricity from gas fired power stations.

Last night a Labour spokesman said the new licences would be among the last ever issued should it win the coming general election.

[No One]

47 minutes ago, Loki said:

UK rate held at 5.25%

Look at the GBP/JPY as soon as BOE announced

 

Looks like my uneducated theory is right. The Yen will gain value as soon as the BOE lowers IR's. I've got 2k GBP in Yen at 187.7JPY . I plan to double down and buy more JPY for as long as the rate is this high to later sell as the BOE lowers. I expect to make 20% relatively risk free.

[Jay]

27 minutes ago, No One said:

Look at the GBP/JPY as soon as BOE announced

 

Looks like my uneducated theory is right. The Yen will gain value as soon as the BOE lowers IR's. I've got 2k GBP in Yen at 187.7JPY . I plan to double down and buy more JPY for as long as the rate is this high to later sell as the BOE lowers. I expect to make 20% relatively risk free.

The 20% relatively risk free ain’t gonna happen…you can have 5% risk free but you have currency risk in your trade and loss of the interest…and others..including the trend..

can you make 20%..sure but it has risk.. that saying the chances are good that Japan will end it’s negative rate policy..not sure when…sterling should weaken with its fiscal problems..which probably means that you should make some money..it will be interesting to see if it was worth effort rather than sticking it in the bank..Japanese stocks have been moving up and the yen does look undervalued ..your timing could be good..boj has been expected to change but they still are carrying on the old..be lucky..

[Loki]

U.K. 2 Year Gilt below where it started the day, 4.222% 

[ILikeCake]

2 hours ago, Loki said:

UK rate held at 5.25%

Poor Stuey

[sancho panza]

The Sherlocks are out in force today.Bailey saying we need wage restraint to get inflation down.

How about Bailey gets inflation down so people don't need to show wage restraint?

Or amaybe get the polos to show some bennies restraint.

 

But geneuinely find it hard to take the BoE seriously when for years they told us inflation was under control while stuffing their pension pot 90% with the govts own RPI index linked gilts..

https://www.telegraph.co.uk/business/2024/02/01/ftse-100-markets-latest-news-bank-interest-rates-shell/

Wages still too high, warns Bailey

The Governor of the Bank of England has said wages remain too high for inflation to come down sustainably to its 2pc target.

Andrew Bailey said the question of whether people should still exercise pay restraint this year was “important” after policymakers voted to hold interest rates at 16-year highs of 5.25pc.

While inflation has fallen significantly from highs of 11.1pc in October 2022 to 4pc in December, he warned that services inflation, which stands at 6.4pc, remains persistent. He services inflation “does have a big share of labour costs in it”.

Answering a question from Telegraph economics editor Szu Ping Chan, Mr Bailey said he was not going to “preach at this point” following controversy last year after he suggested people should not ask for pay rises to help bring down inflation.

Money markets predict the Bank of England will eventually cut interest rates four times this year to 4.25pc, providing relief to mortgage holders.

[sancho panza]

just flicking thru the Graf and noticed quite a few sizeable draw downs in jobs worldwide.lot of it driven by effort to maiantin margins it appears

1/2/24

https://www.telegraph.co.uk/business/2024/02/01/deutsche-bank-cut-3500-jobs/

Deutsche Bank is slashing 3,500 jobs as Germany teeters on the brink of recession.

The German lender said the redundancies, which are equivalent to 4pc of its worldwide staff, would mostly hit back office roles as automation replaces jobs that were until recently done by people.

30/1/24

https://www.telegraph.co.uk/business/2024/01/30/ftse-100-markets-latest-news-minimum-wage-tax-recessions/

UPS is to cut 12,000 jobs and end home working as the delivery giant struggles with slowing demand for parcels.

The American company said it will save $1bn (£790m) this year from the job cuts, which will be focused on management positions and contract workers.

https://www.telegraph.co.uk/business/2024/01/30/sky-cut-1000-jobs-tv-viewers-ditch-satellite-dishes/

Sky has announced plans to cut 1,000 jobs as the media group grapples with the death of the satellite dish.

Jobs will be axed across the country this year, focused on Sky’s team of engineers. The cuts represent around 4pc of the company’s UK workforce of 27,000.

26/1/24

https://www.telegraph.co.uk/business/2024/01/26/ftse-100-markets-news-latest-lvmh-bernard-arnault-us-pce/

Electric car maker Polestar plans to cut around 450 jobs globally as it grapples with “challenging market conditions”.

The Swedish company said the job cuts, amounting to about 15pc of its workforce, would be accompanied by a doubling down on cost cutting in an effort to boost margins.

25/1/24

https://www.telegraph.co.uk/business/2024/01/25/ftse-100-markets-latest-news-inflation-ecb-interest-rates/

Lloyds Bank will axe 1,600 jobs from its branch network as it shifts more deeply into online banking.

The lender has already announced it will close more than 120 branches over the course of this year as more of its customers switch to digital banking.

12/1/24

https://www.telegraph.co.uk/business/2024/01/12/ftse-100-market-news-live-economic-growth-boost-gdp-latest/

Citigroup is to cut 20,000 jobs after the Wall Street bank suffered its worst quarterly loss since the financial crisis.

The company will cut about 10pc of its workforce over the next two years as part of drastic measures to strip out costs.

[Axeman123]

1 hour ago, ILikeCake said:

Poor Stuey

https://uk.finance.yahoo.com/news/nationwide-raises-mortgage-prices-bank-150924484.html

Nationwide raises mortgage prices as Bank of England holds interest rates

I wonder if this will ripple accross other lenders...?

[Cattle Prod]

2 hours ago, sancho panza said:

Foreign ownership means any profits made will go to investors abroad. The main benefit to the UK will be the taxes collected on those profits, plus any jobs generated directly or in the supply chain.

Hey, Telegraph, you missed the entire story. First, it’s 74 blocks out of 900 offered. What’s that as an uptake rate? 9%?. Second, you are talking about profits, taxes and jobs generated, are you smoking crack? None of these licences will result in commercial discoveries at current tax rates. None. There will be no profits, taxes or jobs. Don’t believe me? Look at the work programmes. If a company is serious they will bid a “firm well”. There are none. It’s all nickel and dime desktop studies and seismic repro: the purpose of this is to tart an old prospect up and sell it to a bigger fool. This licensing round is a total failure, and shows that the UK oil and gas sector is univestible. Better check those LNG contracts with the yanks … 

Here is the work offered:

[AWW]

47 minutes ago, sancho panza said:

The Sherlocks are out in force today.Bailey saying we need wage restraint to get inflation down.

How about Bailey gets inflation down so people don't need to show wage restraint?

Or amaybe get the polos to show some bennies restraint.

He must know the truth, it's obvious. Wage increases have largely lagged inflation, but which income streams have kept pace with it?  Public sector pensions and benefits. In fact, benefit claimants are ahead of inflation, as they have also enjoyed a series of one off "cost of living" payments too.

So, the pertinent question is, why is he still banging on about wage restraint rather than government borrowing to fund benefits?

[DurhamBorn]

54 minutes ago, sancho panza said:

The Sherlocks are out in force today.Bailey saying we need wage restraint to get inflation down.

How about Bailey gets inflation down so people don't need to show wage restraint?

Or amaybe get the polos to show some bennies restraint.

 

But geneuinely find it hard to take the BoE seriously when for years they told us inflation was under control while stuffing their pension pot 90% with the govts own RPI index linked gilts..

https://www.telegraph.co.uk/business/2024/02/01/ftse-100-markets-latest-news-bank-interest-rates-shell/

Wages still too high, warns Bailey

The Governor of the Bank of England has said wages remain too high for inflation to come down sustainably to its 2pc target.

Andrew Bailey said the question of whether people should still exercise pay restraint this year was “important” after policymakers voted to hold interest rates at 16-year highs of 5.25pc.

While inflation has fallen significantly from highs of 11.1pc in October 2022 to 4pc in December, he warned that services inflation, which stands at 6.4pc, remains persistent. He services inflation “does have a big share of labour costs in it”.

Answering a question from Telegraph economics editor Szu Ping Chan, Mr Bailey said he was not going to “preach at this point” following controversy last year after he suggested people should not ask for pay rises to help bring down inflation.

Money markets predict the Bank of England will eventually cut interest rates four times this year to 4.25pc, providing relief to mortgage holders.

Incredible how idiotic they are.They monetised the welfare budget for governments.Governments then inflation linked bennies and more.Nobody wants to work anymore so government racks up NMW etc,but that forces business to cut back,so even more on those bennies.

The truth in since around 97 all production growth has been given to none producing,bennies,publc sector pensions,public sector managers,BTL rentiers etc,so workers saw zero pay growth.Once that reached the inflection point everything turned vertical.Bailey is useless.Their models are useless in a cost push inflation cycle,they really do think monetising bennies will create demand that will grow production.What are they going to do when a gilt sale fails?.

Edited February 1 by DurhamBorn

[Errol]

Bayer at 28 now. 

[Democorruptcy]

6 hours ago, Joncrete Cungle said:

BATS divi just landed in T212.

Hang on, I'll give him a shout..... @Mandalorian!!!!