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

[Harley]

Talking of fund shenanigans. I have a small lifestyle fund and lost a bit on the latest rebalance.  They moved some funds into a more conservative fund whose price fell significantly a few days later.  You'd never guess the manager!  I thought it was nice to have a bit of diversification in approach but you can take these things too far.

PS:  The start page has a link in large along the lines "did you get creamed on your bond holdings?".  Click on the link and it essentially says "don't worry, be happy"!

Edited February 16 by Harley

[ThoughtCriminal]

Yesterday's by-election result is fascinating. Labour only gained 107 votes, Tories just stayed home in huge numbers. Reform absolutely fucking useless with Tice the clown in charge.

Could be looking at record low turnout at the general with labour huge landslide with low numbers of votes.

 

[Democorruptcy]

3 minutes ago, ThoughtCriminal said:

Yesterday's by-election result is fascinating. Labour only gained 107 votes, Tories just stayed home in huge numbers. Reform absolutely fucking useless with Tice the clown in charge.

Could be looking at record low turnout at the general with labour huge landslide with low numbers of votes.

 

Looks like the Tories voting to get Rishi out. They didn't vote for another party but can't vote Tory while he's PM.

[Democorruptcy]

12 hours ago, Clueless Imbecile said:

@DurhamBorn, if big tech is vulnerable to telco price rises, what is to stop big tech from simply buying up the telcos? Even some of the big US telcos are only a fraction of the market cap of big tech (e.g. AT&T Inc $120.84bn, Verizon Communications Inc $168.72bn, T-Mobile US Inc $191.66bn, Alphabet Inc $1810.00bn).

One answer to that question might be "The regulator or government might block it to prevent a monopoly." However, I don't have much faith in that. In my opinion big tech has already had monopoly power.

I sometimes wondered why the US government didn't break up big tech. I wonder if the reason is that maybe US government wanted big tech to dominate so that the US could have great influence on the global media.

Cheers,
Clueless Imbecile

Disclaimer: I am not an expert. Anything I post here is just my opinions, which may not be factually correct. My posts are intended purely for the purpose of debate and are not to be taken as advice. If you act on any of the above then you do so entirely at your own risk. I do not accept any liability.

 

 

I raised that same question last year. Since then Vodafone have signed a deal with Microsoft and BT are in talks with Elon Musk's Starlink, so the tech firms are trying to get a foot in the door.

[Cattle Prod]

On 13/02/2024 at 19:42, Plan-b said:

The UKs Credit Rating may get a haircut. It turns out not everyone thinks that giving massive amounts of money you don't have to people that didn't earn it or deserve it is a good idea.

https://www.reuters.com/world/uk/fitch-fires-credit-rating-warning-shot-across-uks-bows-2024-02-12/

Of course they fire that shot as soon as Hunt threatens tax cuts. Which he has since rowed back on. Democracy my arse

[sancho panza]

15 minutes ago, Democorruptcy said:

Looks like the Tories voting to get Rishi out. They didn't vote for another party but can't vote Tory while he's PM.

I think it's a much broader problem DM.I'm not sure with naotehr leader they'll do much better.

Badenoch(whos actually quite right wing I belive) looks like getting shooed in before the GE.But the fundamental problem remains behind her in the culture of the Troy party where it's owned by financial interests and the bulk of the MP's are your classic Cameron type toffs with zero idea how real people live outsdie their bubble.

In the Wlelingoburhg result,labour turnout held up but then it would do as all lefties want to ' kcik the tories in the teeth' in the main

Zanu BBC reporting the figures on turnout and its awful in the main.The UK lacks a genuine hard right party a la wilders/le pen.I know a lot of people and very few of the people who are hard right are bothered voting reform.I think there's a huge untapped pool of native British voters,of differetn ethnicities I hasten to add,who are depserate for someone to vote for.

I'd jsut stress that in leicester during Brexit ref,some 98% asian areas voted out.The ethnic vote doesnt jsut go labour whatever the zanu say

https://www.bbc.co.uk/news/uk-politics-68305798

But apart from the gains and losses, there was another message from the ballot boxes. Voters are not rushing to go to the polls.

Turnout was down in Kingswood by 34 points compared with 2019, the fourth biggest drop since the last general election.

Although the drop in Wellingborough was, at 26 points, somewhat less, the 38% turnout was very different from the near 70% turnout recorded when the constituency last had a by-election in 1969. So high a turnout in a by-election now seems inconceivable.

On average, turnout has fallen in all by-elections since 2019 by 28.1 points. This is slightly more than the previous record of 27.8 points in by-elections in the 1997-2001 parliament. That was followed by a record low turnout of 59% in the 2001 general election.

[kibuc]

7 minutes ago, sancho panza said:

I think it's a much broader problem DM.I'm not sure with naotehr leader they'll do much better.

Badenoch(whos actually quite right wing I belive) looks like getting shooed in before the GE.But the fundamental problem remains behind her in the culture of the Troy party where it's owned by financial interests and the bulk of the MP's are your classic Cameron type toffs with zero idea how real people live outsdie their bubble.

In the Wlelingoburhg result,labour turnout held up but then it would do as all lefties want to ' kcik the tories in the teeth' in the main

Zanu BBC reporting the figures on turnout and its awful in the main.The UK lacks a genuine hard right party a la wilders/le pen.I know a lot of people and very few of the people who are hard right are bothered voting reform.I think there's a huge untapped pool of native British voters,of differetn ethnicities I hasten to add,who are depserate for someone to vote for.

I'd jsut stress that in leicester during Brexit ref,some 98% asian areas voted out.The ethnic vote doesnt jsut go labour whatever the zanu say

https://www.bbc.co.uk/news/uk-politics-68305798

But apart from the gains and losses, there was another message from the ballot boxes. Voters are not rushing to go to the polls.

Turnout was down in Kingswood by 34 points compared with 2019, the fourth biggest drop since the last general election.

Although the drop in Wellingborough was, at 26 points, somewhat less, the 38% turnout was very different from the near 70% turnout recorded when the constituency last had a by-election in 1969. So high a turnout in a by-election now seems inconceivable.

On average, turnout has fallen in all by-elections since 2019 by 28.1 points. This is slightly more than the previous record of 27.8 points in by-elections in the 1997-2001 parliament. That was followed by a record low turnout of 59% in the 2001 general election.

Once upon a time I entertained an idea of linking turnout to the number of seats available. In order to have a full house of 650 MPs, there would have to be 100% turnout, and it would scale down proportionally. It would be pretty amusing in my opinion to see all those cunts scramble to convince people to vote, as opposed to simply discouraging them from voting for the other guy. The campaing would certainly need to be kept in a more positive tone and focused on the candidate, instead of just throwing shit at your opponents.

Perhpas more difficult to organise with constituencies and FPTP, but there could be a turnout threshold that needs to be cleared in order for a constituency to have an MP.

That being said, if such link was indeed introduced, the very next piece of legislation would be to make voting mandatory. Why work hard to make something appealing to people if you have the power to simply make them do as you please.

[Democorruptcy]

6 minutes ago, sancho panza said:

I think it's a much broader problem DM.I'm not sure with naotehr leader they'll do much better.

Badenoch(whos actually quite right wing I belive) looks like getting shooed in before the GE.But the fundamental problem remains behind her in the culture of the Troy party where it's owned by financial interests and the bulk of the MP's are your classic Cameron type toffs with zero idea how real people live outsdie their bubble.

In the Wlelingoburhg result,labour turnout held up but then it would do as all lefties want to ' kcik the tories in the teeth' in the main

Zanu BBC reporting the figures on turnout and its awful in the main.The UK lacks a genuine hard right party a la wilders/le pen.I know a lot of people and very few of the people who are hard right are bothered voting reform.I think there's a huge untapped pool of native British voters,of differetn ethnicities I hasten to add,who are depserate for someone to vote for.

I'd jsut stress that in leicester during Brexit ref,some 98% asian areas voted out.The ethnic vote doesnt jsut go labour whatever the zanu say

https://www.bbc.co.uk/news/uk-politics-68305798

But apart from the gains and losses, there was another message from the ballot boxes. Voters are not rushing to go to the polls.

Turnout was down in Kingswood by 34 points compared with 2019, the fourth biggest drop since the last general election.

Although the drop in Wellingborough was, at 26 points, somewhat less, the 38% turnout was very different from the near 70% turnout recorded when the constituency last had a by-election in 1969. So high a turnout in a by-election now seems inconceivable.

On average, turnout has fallen in all by-elections since 2019 by 28.1 points. This is slightly more than the previous record of 27.8 points in by-elections in the 1997-2001 parliament. That was followed by a record low turnout of 59% in the 2001 general election.

I didn't say I thought they would do any better with another leader! They may have given up on the party as a whole but then I'd expect more votes for the other parties but they didn't get any.

 

[Noallegiance]

48 minutes ago, ThoughtCriminal said:

Yesterday's by-election result is fascinating. Labour only gained 107 votes, Tories just stayed home in huge numbers. Reform absolutely fucking useless with Tice the clown in charge.

Could be looking at record low turnout at the general with labour huge landslide with low numbers of votes.

 

Only 107 extra votes for Labour vs - 24k for Tory doesn't say 'Labour overturn' to me.

It screams voter apathy. 

Edited February 16 by Noallegiance

[Cattle Prod]

23 hours ago, Yadda yadda yadda said:

I'm getting concerned about localised Masseuse Price Inflation in the Durham area.

[feed]

6 minutes ago, Noallegiance said:

Only 107 extra votes for Labour vs - 24k for Tory doesn't say 'Labour overturn' to me.

It screams voter apathy. 

It's the political system in this country.  Conservatives lose when their voters stay home.  Fear of labour in a general will rouse some from their sofas.  Not enough to win, but it isn't going to be a labour landslide.    

 

[Yadda yadda yadda]

6 minutes ago, Noallegiance said:

Only 107 extra votes for Labour vs - 24k for Tory doesn't say 'Labour overturn' to me.

It screams voter apathy. 

It looks to me like some labour voters from the last election couldn't be bothered but they were made up by Lib Dems who wanted the Tories out. Or wanted a protest vote no more than a year before the next election. Voter apathy, voter anger and voter despair. If someone can harness the voter anger it will be interesting. Would need to be a new party. Probably not going to happen by the general election.

[PatronizingGit]

59 minutes ago, Democorruptcy said:

Looks like the Tories voting to get Rishi out. They didn't vote for another party but can't vote Tory while he's PM.

Do they see something I dont...all tory MPs are just horrific. 

But yeah....something like 1992. A landslide on 10% lower turnout than the previous election.

counting in the tories favour is that Starmer is, personality & appeal wise, no blair as he was to Major.

counting in labours favour is the fact the tories held a decent economy in 1997 rather than the train wreck of 2024. 

 

The major difference is immigration was of limited concern in 1997, whereas its full nastiness is evident everywhere now. But so long as people insist on voting red-blue it may as well not be an issue as neither show any desire to drop it. 

[sancho panza]

17 hours ago, DurhamBorn said:

Exactly as we predicted again,roadmap was clear on this.Distribution cycle.

Labour created this mess,the Tories just carried on,so Labour will deserve what they come into.We need massive investment,but they have wasted the chance thinking printing for bennies would somehow aid production.Are we close to the debt deflation,the part of the thesis we have not concentrated on.

I thought the newsflow yesterday was immense in many different ways.It was one of the msot derpessing days for my country in some time imho.

Not that the thread hasnt got a lot right and got you average basment dweller is well psotioned for whats coming,its still sad to watch the polos completely f*ck it up.

I've openly admitted over the years that it was only whne you started explaining how inflation would arrive and why,that I adapted my credit deflation prediction to run alognside price inflation.Before then I'd thought prices and credit systems moved in tandem but they don't.Credit can easilt deflate in a country while the prices of things they improt rise.It makes a lot of sense when you think about it.I jsut never had till the discussions down here.

In yesterdays newsflow Close Bros got mentioend and weve covered it last night in the banking thread.as i went through it I realsied how actually close bros typifies what the last 15 years has done to banking.

They were(back when we first owned them in 2000 or so),primarily a merchant bank.AS credit eased they delved more and more into riskier areas of ledning not only besuase thats where the profits were but also because the implicti guratntee that the BoE would step in if needed.WHich they duly did.

Yestrdays news was that since 2007,CLose bors have been incentivizing used car salesmen to sell cars to punters that effectively overcharged them on interest.The FCA investigation wnet back to 2007 ie there's a big f***ing bill inbound.

It says as much about the regulators as it does about clsoe bros.Theya re also balls deep in laons to small LL's circa £1mn portfolios and also factoring debt as well.if ever the decline of one company typified our age,it might well be them.

the key upshot is they are leveraged at a Dowd Buckner ratio of 30/1 .The FCA fine will likely see them need more capital I suspect and thats before any of their other lending areas go t1ts up.

long story short the debt deflation is inbound jsut as oil price rises and wage inflation feed in on each other.(for the boring data please see the banking thread).

It was so werid you mentioning debt deflation last night as I was discussing Fisher last night with a couple of friends who are developing an interest in the hive minds work.

here's some detail on fisher whos work has largely been ignored (except for MV=PT)but the banks in the UK and the west more generally are setting up for a significant debt deflation.

I know there are lot on here familair with thsi stuff but worth looking at for any newer readers

https://en.wikipedia.org/wiki/Irving_Fisher

 

its improtbat to remember that 95% of academic econmists and vrtually 100% pf CBers are neo classical who have base their modelling on some dodgy logci.

https://www.investopedia.com/terms/n/neoclassical.asp

1 hour ago, DurhamBorn said:

My technical stuff on it was oh its back to where iv made a shit load a few times before,il buy a shit load again.They will probably go a lot lower if the results are really poor as they might be,they are very much PGM based now more than gold.The new mines look very interesting and as usual with them they are building and should open them just as the prices are rocketing,they are very good at investing during the bad times and catching the upside.Its one of the reasons they get smashed every cycle because they invest and borrow during the down part and the market gets worried,but the managment know what they are doing.The $500 convertible bond for instance they issued last Sept smacked them down,but it was the right thing to do,keeps the balance sheet intact to fund those new mines even if they fall into loss or breakeven for a few years.

Ref sibanye,I dug through the equity raising at the time as did a couple of otehrs and it was noticeable to me that due to the equity buy in date,the big instos who were buying in were heavily incetivized to drive the price as low as possible by the closing date as that was the price new equity would be issued at.Bad news for holders but thats life.

anyway they got it down to $4.40 or so which is where it bounced before the last few days.I would suspect we'll see the big isntos step in here.

https://www.investing.com/equities/sibanye-gold-chart

https://www.mining.com/web/sibanye-shares-plunge-on-convertible-bond-sale/

Sibanye shares plunge on convertible bond sale

Bloomberg News | November 21, 2023

Sibanye Stillwater Ltd. plunged the most since March 2020 after the South African miner of platinum-group metals said it will raise $500 million by selling bonds convertible into its shares, a move that will dilute existing investors’ holdings.

The stock sank as much as 25% in Johannesburg, wiping out about 15.2 billion rand ($824 million) of its market value. The use of the bond proceeds includes funding the Nov. 9 purchase of US metals recycler Reldan Group of Companies for $155.4 million in cash, Sibanye said in a statement Tuesday.

[Cattle Prod]

IEA catches up with the basement...if you didn't believe me that oil stocks were dropping, the IEA of all people has sounded the alarm:

 

 

[Castlevania]

14 minutes ago, sancho panza said:

.I would suspect we'll see the big isntos step in here.

Yes. JPMorgan 5.64% stake in Sibanye was disclosed earlier this week.

https://www.moneyweb.co.za/mny_sens/sibanye-stillwater-limited-notification-of-an-acquisition-of-beneficial-interest-in-securities-by-the-jp-morgan-chase-co/

[Castlevania]

@spunkowith regards to putting your savings in Aldermore, they were purchased by FirstRand who’s U.K. operations at the time specialised in car financing, so given the travails of the companies in the FCA’s cross hairs I’d avoid.

[Plan-b]

1 hour ago, Cattle Prod said:

Of course they fire that shot as soon as Hunt threatens tax cuts. Which he has since rowed back on. Democracy my arse

Hunts chickened out on Tax Cuts because of course the UKs in recession, obviously the recession has been caused by 'Worklessness In Britain'  ..

The real reasons people are dropping out don't get a mention - Bennies - Immigration - Public sector Pay and Pensions etc...

Blame everybody and everything except themselves, the Tories have gone against every pledge they made at the last elections. Labour will probably win the next election (hope not) and then set about making things even worse.

We're Fuct.

Edited February 16 by Plan-b
Cuts not Rises

[GoneDark]

^ fuck me is that picture real?

[Axeman123]

12 hours ago, nirvana said:

what's the excitement with VPNs? I've seen the latest 'dodgy app' on a firestick, it's fukkin unreal......£30/year and you get everything and it runs fine without a VPN

Presumably ISPs will crack down on that too. Before long you could see cheaper/default broadband packages that restrict you to all internet connections going through the ISPs own locked down app or browser. You might even see packages offered that restrict access to approved locked down devices too. After a while the traditional "anything goes" packages could then be withdrawn.

Just as "restricting carbon emmisions" is an excuse to regulate all economic and individual activity, "restricting streaming bandwidth usage" would potentially turn the internet into a corporate intranet. In that scenario dodgy apps and rooted firesticks would cease to be an option. Govts might be doing these deals to get their hands on big techs profits by taxing telecoms, but along the way you could see those telecoms gain real censorship power of most people's web access.

[Plan-b]

19 minutes ago, GoneDark said:

^ fuck me is that picture real?

Feck knows, its from a year or 2 ago, some kind of woke pride march or something.

Who knows what's real anymore, everything is Fake and Gay.

[Axeman123]

2 hours ago, sancho panza said:

Badenoch(whos actually quite right wing I belive) looks like getting shooed in before the GE.

Allegedly Gove's puppet, very much the disguised-continuity candidate.

[JMD]

15 hours ago, Clueless Imbecile said:

@DurhamBorn, if big tech is vulnerable to telco price rises, what is to stop big tech from simply buying up the telcos? Even some of the big US telcos are only a fraction of the market cap of big tech (e.g. AT&T Inc $120.84bn, Verizon Communications Inc $168.72bn, T-Mobile US Inc $191.66bn, Alphabet Inc $1810.00bn).

One answer to that question might be "The regulator or government might block it to prevent a monopoly." However, I don't have much faith in that. In my opinion big tech has already had monopoly power.

I sometimes wondered why the US government didn't break up big tech. I wonder if the reason is that maybe US government wanted big tech to dominate so that the US could have great influence on the global media.

Cheers,
Clueless Imbecile

Disclaimer: I am not an expert. Anything I post here is just my opinions, which may not be factually correct. My posts are intended purely for the purpose of debate and are not to be taken as advice. If you act on any of the above then you do so entirely at your own risk. I do not accept any liability.

 

 

Yes the US did break up big oil and telecoms last century. But it hasn't done the same with the tech behemoths. Big tech is obviously far to powerful and pervasive, and that its size and influence hasn't been addressed I do find alarming.

Interestingly I think the EU has done more to to control tech monopolies than the US. But the EUs attempts have been quiet feeble. However I think these small policy differences between US and EU serve to highlight the tensions that have always existed between the US (empire) and some of its vassel states. Unfortunately it looks like the EU has been punished(!?) by having it's energy supplies completely upended.    ...I wonder what this summer's EU elections might tell us about the future direction of European politics? I don't mean as a direct result of the so-called 'democratic vote', but more the policy shifts or realignmen/deals done between the EU political parties. 

[Castlevania]

2 hours ago, Castlevania said:

Yes. JPMorgan 5.64% stake in Sibanye was disclosed earlier this week.

https://www.moneyweb.co.za/mny_sens/sibanye-stillwater-limited-notification-of-an-acquisition-of-beneficial-interest-in-securities-by-the-jp-morgan-chase-co/

The Agnelli family and UBS have also bought stakes of just over 5% each in the past few months.

[JMD]

16 hours ago, tank said:

I suspect Tory Boy Allister looked at his rag's latest opinion poll and can foresee what many on here can't and that is Labour steering the rickety UK ship back into the nearest European port for urgent repairs. 

Not a popular view on here, but I think the UK's demise as he puts it can be traced back a lot further than May 1997. 

Further back than the Blessed Margaret even. Probably the Blitz but definitely Suez. That marked the official end of empire but it takes generations of decline for it to become eventually apparent to those higher up the social ladder. There is no doubt the UK is in terminal decline, so its a case of whether that decline is managed or disorderly. I suspect Starmer, with Blair lurking in the shadows, will opt for the former.

Personally I don't have a political fixation with Margaret Thatcher. In fact I posted an article by Hitchens recently and he is far from being a fan of Thatcher despite being himself a conservative. 

And picking up on your other point, for example I would say that UK decline started with us participating militarily in WW1 (and btw dragged too early into WW11). But Is that a left or right wing view? I am on the 'right' (what ever that means today) politically, however it is also the view of the left-wing historian Dominic Sandbrook.

Ok history and hindsight, etc is a wonderful thing, but my point is that the political argument is far more nuanced than what i think you are suggesting.

...Plus of course this thread teaches that its mostly about having sound economics. And that the politics is very much downstream ...amongst the weeds and the effluent!

Edited February 16 by JMD