Credit deflation and the reflation cycle to come (part 8)

[Axeman123]

The overton window is shifting, and thread talking points are being laundered via International Organisations so they can enter the input for national policy making. The ship is starting to turn, although almost certainly too late to make a difference

Slash benefits to get more men into work, IMF urges

https://uk.finance.yahoo.com/news/slash-benefits-more-men-imf-120000618.html

Another "no shit Sherlock" headline:

Germany will never fully recover from energy crisis, warns power chief

The game theory explanation for actually coming out and saying this IMO is they are pleading with the US to take its boot off their throat regarding nat gas.

https://uk.finance.yahoo.com/news/germany-never-fully-recover-energy-103041434.html

[Axeman123]

DDMB shows that Truflation is strongly correlated with CPI, with a lag

Which is interesting, as theTruflation figure for the US right now is a 1yr low of 1.78%.

I still think the Fed will cut in June, and that they will be just as selective with stats and willing to "look through" as they were when inverting the yield curve.

https://twitter.com/DiMartinoBooth/status/1778012307794149430

 

[Long time lurking]

 

[Long time lurking]

44 minutes ago, Calcutta said:

Saw on Bloomberg this morning some coked up funboys saying the UK could cut interest rates before the US.

Now, I understand these boys are either clueless or talking their book, but it got me thinking that it's mean Sterling getting a proper kicking? Parity has been on the cards for a long time and the stupid cunts might just go for it.

It isn't going to happen for the very reasons you outline ,the game they are playing requires all of the chain to be on the same page ,and it`s still failing ,if they step away it just happens a hell of a lot quicker and far more disorderly

If there`s any rate cut it will be politically driven ,small and short lived ,they have very little control over the price of their debt now ,just words

Edited April 10 by Long time lurking

[DurhamBorn]

https://www.telegraph.co.uk/business/2024/04/10/slash-benefits-to-get-more-men-into-work-imf-urges/

So the answer is more men in work (not fat Shaz),,,stop you getting your pension and import more Abduls to molest your granddaughters.Talk about doubling down.

 

The IMF said: “Policies designed to facilitate the flow and integration of migrant workers, alongside measures to boost labour force participation among older workers in advanced economies – through retirement reforms and labour market programs – could mitigate the increasing demographic pressures on labour supply.”

[spygirl]

Markets slash rate cut bets after US inflation rises to 3.5%

Figures exceed expectations as Federal Reserve considers how long to keep rates at 23-year high

30 minutes ago, Axeman123 said:

The overton window is shifting, and thread talking points are being laundered via International Organisations so they can enter the input for national policy making. The ship is starting to turn, although almost certainly too late to make a difference

Slash benefits to get more men into work, IMF urges

https://uk.finance.yahoo.com/news/slash-benefits-more-men-imf-120000618.html

Another "no shit Sherlock" headline:

Germany will never fully recover from energy crisis, warns power chief

The game theory explanation for actually coming out and saying this IMO is they are pleading with the US to take its boot off their throat regarding nat gas.

https://uk.finance.yahoo.com/news/germany-never-fully-recover-energy-103041434.html

Men?????????????

 

~3/4+ of bennies go to wimmin.

 

[DurhamBorn]

18 minutes ago, Axeman123 said:

DDMB shows that Truflation is strongly correlated with CPI, with a lag

Which is interesting, as theTruflation figure for the US right now is a 1yr low of 1.78%.

I still think the Fed will cut in June, and that they will be just as selective with stats and willing to "look through" as they were when inverting the yield curve.

https://twitter.com/DiMartinoBooth/status/1778012307794149430

 

I think they will cut in June because the reverse repo is nearly empty and they need to kick in a private sector credit cycle or the US government goes bust.Inflation will not come into it now.PMs know the above.This shake out will clear some weak hands and might throw up the chance to add to some positions before the real moves begin.

Edited April 10 by DurhamBorn

[spygirl]

31 minutes ago, Axeman123 said:

The overton window is shifting, and thread talking points are being laundered via International Organisations so they can enter the input for national policy making. The ship is starting to turn, although almost certainly too late to make a difference

Slash benefits to get more men into work, IMF urges

https://uk.finance.yahoo.com/news/slash-benefits-more-men-imf-120000618.html

Another "no shit Sherlock" headline:

Germany will never fully recover from energy crisis, warns power chief

The game theory explanation for actually coming out and saying this IMO is they are pleading with the US to take its boot off their throat regarding nat gas.

https://uk.finance.yahoo.com/news/germany-never-fully-recover-energy-103041434.html

Of source Germany  wont recover.

The German economy has taken a similar size hit as the UK di in the late 80s/80s.

 

[montecristo]

52 minutes ago, Axeman123 said:

Racheal Reeves tax avoidance plans analysed:

https://www.newstatesman.com/politics/labour/2024/04/will-rachel-reeves-plan-to-take-on-the-tax-dodgers-work

It looks like she is hinting it will be corporates that are targetted, eg:

...and suddenly this recent headline takes on a new light:

Former Shell chief stokes London listing departure fears

https://www.cityam.com/former-shell-chief-stokes-london-listing-departure-fears/

Putting it all together I expect Labour will try and tax worldwide profits of UK listed companies, and then allow a credit for taxes actually paid elsewhere - rendering off-shore shenanigans moot. No wonder firms are hinting they may relocate!

The plus side from the first article is that allegedly Labour aren't going to muck about with the tax system itself - although I will beleive that when I see it!

I read this that they will just double down on the wee man via IR35. 

[Long time lurking]

6 minutes ago, DurhamBorn said:

https://www.telegraph.co.uk/business/2024/04/10/slash-benefits-to-get-more-men-into-work-imf-urges/

So the answer is more men in work (not fat Shaz),,,stop you getting your pension and import more Abduls to molest your granddaughters.Talk about doubling down.

 

The IMF said: “Policies designed to facilitate the flow and integration of migrant workers, alongside measures to boost labour force participation among older workers in advanced economies – through retirement reforms and labour market programs – could mitigate the increasing demographic pressures on labour supply.”

Well whats news that has been glaringly obvious for years now 

The only question is will it work ,Merkel said it had failed in Germany almost two years ago 

#Desoperation&Fools 

[Democorruptcy]

54 minutes ago, Axeman123 said:

Racheal Reeves tax avoidance plans analysed:

https://www.newstatesman.com/politics/labour/2024/04/will-rachel-reeves-plan-to-take-on-the-tax-dodgers-work

It looks like she is hinting it will be corporates that are targetted, eg:

...and suddenly this recent headline takes on a new light:

Former Shell chief stokes London listing departure fears

https://www.cityam.com/former-shell-chief-stokes-london-listing-departure-fears/

Putting it all together I expect Labour will try and tax worldwide profits of UK listed companies, and then allow a credit for taxes actually paid elsewhere - rendering off-shore shenanigans moot. No wonder firms are hinting they may relocate!

The plus side from the first article is that allegedly Labour aren't going to muck about with the tax system itself - although I will beleive that when I see it!

End of 2023 Shell made up 8.77% of the FTSE

https://research.ftserussell.com/analytics/factsheets/Home/DownloadConstituentsWeights/?indexdetails=UKX

Top 5 made up 32%

[HousePriceMania]

Brown pants time....

 

[DurhamBorn]

6 minutes ago, Jesus Wept said:

If they cut in June I will doff my cap (again) to you. Market says 20% chance of that. We shall see. 

 

“This shake out will clear some weak hands and might throw up the chance to add to some positions before the real moves begin”.

I hope that to be the case. 

Will continue to ladder into commodities.

You dipping back into Potash at all (MOS, SDF, Nutrient etc?).

They need to cut early to mid summer or they will will see government finances spiral out of control and the repo empty.They know this but are looking for something to say its ok to cut.The irony is the only ways to get inflation down from here are a massive crash,or investing in production and accepting higher inflation to do it.They will have to pick their poison.

[DurhamBorn]

10 minutes ago, Jesus Wept said:

If they cut in June I will doff my cap (again) to you. Market says 20% chance of that. We shall see. 

 

“This shake out will clear some weak hands and might throw up the chance to add to some positions before the real moves begin”.

I hope that to be the case. 

Will continue to ladder into commodities.

You dipping back into Potash at all (MOS, SDF, Nutrient etc?).

No,they are not hated enough.Mosaic will give us an entry at sub $15 one day,i wont own again until then.They are a once every 10 years sector really.

[HousePriceMania]

I've started smoking again

 

[crashmonitor]

7 minutes ago, HousePriceMania said:

Brown pants time....

 

They's gone a lot softer on the UK where 2 year swaps have merely edged up a couple of a percent to 4.76%. Market still convinced that the Bank will jettison their 2% target in favour of propping up the economy and cut by June. Core inflation by then will still be around 3% even if the headline temporarily dips below 2% because of cheap fuel. And will ruse back over 3% and it's long term average shortly after.

Can understand why the Markets think that, Bailey has printed 22.5% inflation in short order, averaged 3% ( or 50% over target) for the last 20 years. So why expect them to stick to target now. Beggar's belief anybody would still buy pounds with our inflation record.

[HousePriceMania]

Just now, crashmonitor said:

They's gone a lot softer on the UK where 2 year swaps have merely edged up a couple of a percent to 4.76%. Market still convinced that the Bank will jettison their 2% target in favour of propping up the economy and cut by June. Core inflation by then will still be around 3% even if the headline temporarily dips below 2% because of cheap fuel. And will ruse back over 3% and it's long term average shortly after.

Can understand why the Markets think that, Bailey has printed 22.5% inflation in short order, averaged 3% ( or 50% over target) for the last 20 years. So why expect them to stick to target now. Beggar's belief anybody would still buy pounds with our inflation record.

Someone posted something yesterday, cant remember where, BoE QE'd £895B and were already £200bn into QT and they were on course to reduce the QE numbers to around £200Bn in a couple of years.

Is that figure true ?

IIRC The powers that be said QT was around +1% on interest rates.

How does that compare to the US ?

US QT in one easily to understand gif....

[Long time lurking]

24 minutes ago, Jesus Wept said:

he Fed is in murkier territory where credit conditions could suddenly be adversely affected, as happened in late 2019

That was 16/17 09 2019 ,they day "the coof "really began  2.5% ish to well over 10% overnight  trillions was printed from that day on 

[Lightscribe]

The western economists have learnt nothing. This is the perfect moment when they thought they could short gold/silver and that everything would tank against USDT and DXY.

Countries are protecting their own economies. Traditional correlation has gone out the window.

Thats the beauty of stagflation vs deflation, rising against a rising $, not rising against a falling $. Loss of faith in fiat. That was always going to be the bull-run catalyst.

[Long time lurking]

1 hour ago, DurhamBorn said:

I think they will cut in June because the reverse repo is nearly empty and they need to kick in a private sector credit cycle or the US government goes bust.Inflation will not come into it now.PMs know the above.This shake out will clear some weak hands and might throw up the chance to add to some positions before the real moves begin.

The fed raising interest rates has zero to do with inflation ,it`s all about defending the $ and UST`s market ,the US government need to borrow vast sums ,the rate they pay now represents the perceived risk  and that risk determines the Feds base rate  

The UK/EU etc need to do the same = Risk vs Reward vs Supply there has to be a pretty clear divergence regarding the three before any of them can go their own way 

[Long time lurking]

7 minutes ago, Jesus Wept said:

It’s a long read and the Feds version of events….

https://www.federalreserve.gov/econres/notes/feds-notes/what-happened-in-money-markets-in-september-2019-20200227.html
 

 

June 2019 the BIS 

https://www.bis.org/publ/arpdf/ar2019e.pdf

August 2019 the BIS calling for unconventional monetary policy

 

https://www.bis.org/publ/work804.pdf

 

August the 15 Balckrock 

https://www.blackrock.com/corporate/literature/whitepaper/bii-macro-perspectives-august-2019.pdf

Quote

 

 

[Axeman123]

Silver up over 2% so far on "hot" CPI numbers. If this ain't a bull market, it will do until one shows up!

[DurhamBorn]

2 minutes ago, Lightscribe said:

The western economists have learnt nothing. This is the perfect moment when they thought they could short gold/silver and that everything would tank against USDT and DXY.

Countries are protecting their own economies. Traditional correlation has gone out the window.

Thats the beauty of stagflation vs deflation, rising against a rising $, not rising against a falling $. Loss of faith in fiat. That was always going to be the bull-run catalyst.

I grabbed some more Sib at the open down 6%,inflation is the government spending and the CBs are in a right pickle because rates are less and less of the economy.

[Pip321]

4 minutes ago, Jesus Wept said:

Fascinating to see how the FTSE Gold / Silver / PMs have responded to the higher than expected US inflation data.

I was in the gym - and watching Sibanye fall 7% on opening - and PM and commodity ‘plays‘ take a sizeable hit’(@Pip321 did you get in?) as soon the US market opened. FTSE dropped over a 1% giving up all its gains and going negative.

I know it’s short term but this is where we are an hour later .

Gold rises

 

FTSE up again from -0.20 back to + 0.40%

Sibanye up 4-5% from its -7% opening dip. (Still slightly negative -1%).

It’s as if the market has just shrugged it off. 

Maybe they also believe IR cut in May / June still no matter what @DurhamBorn? 
 

 

 

2 minutes ago, DurhamBorn said:

I grabbed some more Sib at the open down 6%,inflation is the government spending and the CBs are in a right pickle because rates are less and less of the economy.

Did I fuck....I was being a twat opening a cash ISA and checking what rate what available on another maturity ISA. 😂😂

Note to slap myself and get a mate to kick me hard in the knackers. @DurhamBornwas in like a rat up a drain pipe

I know someone who trades and we remind each other of missed opportunities....his favourite at the moment is to remind me I sold HOC at 65p after a 15% gain.  

Fish and Chips tonight...so at least I can look forward to that 😉

[ThoughtCriminal]

This is a superb thread from Kuppy in which he asks "which commodity is the real Central Banker?". He's brutally honest here about what's coming and how difficult it's going to be. Most of it feels like it could have been written by DB.

His advice? "Survive".