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

[Libspero]

9 hours ago, Transistor Man said:

Moore’s law continued though. The important thing is: cost per transistor continued to drop exponentially. 

Do you expect that to continue, even with the increasing complexity of chips now?

I feel like I've been a chicken little on this,  but advanced lithography tools are already, what, $200m?   Then the complexity of GAA and moving to backside power?  It feels to me like chips are still getting better,  but the cost to do so is rising faster.  Am I wide of the mark?

My gut feeling is it will be uneconomic to make higher densities well before it becomes unviable.

[Ash4781b]

15 hours ago, crashmonitor said:

Quelled surprise, the new issuance of Government debt 1931 4% may be under subscribed and the BOE are allowing the public to buy direct for the first time.

Now if the 2% CPI target was real then 4% would be a steal, but the Markets aren't keen. They know that the BOE is keen on printing and the Government is keen on dreaming up inflationary  schemes to prop up the only thing that matters, namely he housing Market.

 

Who can blame them, we have the 99% Mortgage  Help for Geratrics Scheme in the offing ie. prop up Geriatrics wealth and give Millennials a good rogering. And we have the journos screaming for rate cuts when we are double CPI target.

 

Markets given up on the idea of a 2% target...well with likes of  Swati Dinghra in charge of rate setting and Liam Halligan being the Nation's conscience on where rates should be, you bloody bet 

I thought they did all public facing retail type stuff through NS&I. Imo No way they can sell them through NS&I people might get rinsed on capital losses. But the bbc said interest rates cuts were expected!

Edited February 24 by Ash4781b

[Democorruptcy]

15 hours ago, crashmonitor said:

Quelled surprise, the new issuance of Government debt 1931 4% may be under subscribed and the BOE are allowing the public to buy direct for the first time.

Now if the 2% CPI target was real then 4% would be a steal, but the Markets aren't keen. They know that the BOE is keen on printing and the Government is keen on dreaming up inflationary  schemes to prop up the only thing that matters, namely he housing Market.

 

Who can blame them, we have the 99% Mortgage  Help for Geratrics Scheme in the offing ie. prop up Geriatrics wealth and give Millennials a good rogering. And we have the journos screaming for rate cuts when we are double CPI target.

 

Markets given up on the idea of a 2% target...well with likes of  Swati Dinghra in charge of rate setting and Liam Halligan being the Nation's conscience on where rates should be, you bloody bet 

A link on retail buying debt.

Quote

 

Investors are set to get access to the primary gilt markets with investment platform Hargreaves Lansdown and will even be able to purchase and hold the bonds for free.

The primary gilt markets have long-been the preserve of institutional investors, with retail customers typically only able to access government bonds through secondary markets.

But in what is described as an industry-first, Hargreaves Lansdown users are to be given access to Debt Management Office (DMO) gilt auctions.

https://moneyweek.com/investments/government-bonds/hargreaves-lansdown-opens-primary-gilt-markets-to-retail-investors-is-it-worth-backing-government-bonds

 

 

 

[Lightscribe]

 

They are all useful idiots. She had to climb to the top of the tree to find out that the tail wags the dog?

(with a little help of grifting her upcoming book to a right wing US audience of course)

[Yadda yadda yadda]

9 hours ago, sancho panza said:

another 'no sh1t sherlock' moent amongst many.Our political eltie scratching their heads whilst we sit and say 'perfectly udnerstandable'

who said two worngs dont make a right?

https://www.telegraph.co.uk/business/2024/02/23/fertility-rate-slumps-to-record-low-in-slow-burn-crisis/

Fertility rate slumps to record low in ‘slow-burn’ economic crisis

Growth and living standards at risk as UK heads towards a baby bust

The fertility rate in England and Wales has dropped to a record low, with British women having fewer children than at any point since at least 1939 in a “slow-burn” economic crisis.

New figures from the Office for National Statistics show that the fertility rate, which measures the average number of children a woman of childbearing age will have, dropped to 1.49 in 2022.

The number, which is the lowest in 83 years, comes amid an increasingly political debate about why women are having fewer children.

Many politicians and economists fear that the economy will struggle to grow and living standards will stagnate or decline as the number of older people increases while fewer children are born.

 

To offset the impact of a shrinking working-age population, politicians will be forced to find solutions such as raising the retirement age or allowing greater immigration, he said.

Instead, like many rich countries, the UK is headed for a baby bust as demographers warn that high living costs, nursery fees, house prices and stagnating pay for young people mean rates will likely continue to fall.

The number of children British women have has been in decline for a long time, falling from an average of nearly three in 1964.

The answers aren't those that they want to hear so they don't even ask the right questions.

[darkmarket]

7 minutes ago, Lightscribe said:

 

They are all useful idiots. She had to climb to the top of the tree to find out that the tail wags the dog?

(with a little help of grifting her upcoming book to a right wing US audience of course)

I noticed Raheem Kassam, formerly Farage's advisor and now running The National Pulse successfully from Washington, was absolutely scathing about her. I think he may be realising Farage isn't the solution he'd hoped for either.

The attempt to portray Johnson as similar to Trump was pathetic (although it did fool many in the UK), but Truss is even worse.

[M S E Refugee]

Anyone any thoughts on this fund?

It's pretty exotic and pays monthly, but is only available in accumulation units.

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/a/aberdeen-standard-sicav-i-frontier-markets-bond-accumulation

[DurhamBorn]

9 hours ago, sancho panza said:

another 'no sh1t sherlock' moent amongst many.Our political eltie scratching their heads whilst we sit and say 'perfectly udnerstandable'

who said two worngs dont make a right?

https://www.telegraph.co.uk/business/2024/02/23/fertility-rate-slumps-to-record-low-in-slow-burn-crisis/

Fertility rate slumps to record low in ‘slow-burn’ economic crisis

Growth and living standards at risk as UK heads towards a baby bust

The fertility rate in England and Wales has dropped to a record low, with British women having fewer children than at any point since at least 1939 in a “slow-burn” economic crisis.

New figures from the Office for National Statistics show that the fertility rate, which measures the average number of children a woman of childbearing age will have, dropped to 1.49 in 2022.

The number, which is the lowest in 83 years, comes amid an increasingly political debate about why women are having fewer children.

Many politicians and economists fear that the economy will struggle to grow and living standards will stagnate or decline as the number of older people increases while fewer children are born.

 

To offset the impact of a shrinking working-age population, politicians will be forced to find solutions such as raising the retirement age or allowing greater immigration, he said.

Instead, like many rich countries, the UK is headed for a baby bust as demographers warn that high living costs, nursery fees, house prices and stagnating pay for young people mean rates will likely continue to fall.

The number of children British women have has been in decline for a long time, falling from an average of nearly three in 1964.

Incredible the solution is whats causing it.More bennies and free housing for immigrants forcing up house prices so the young working couple cannot afford the rent or mortgage.I bet the average for those on bennies is higher,around 2 because you get full bennies for two.Another big reason not mentioned is men opting out of dating and although of course women can easily get pregnant many will be having now waiting for chad or having one and being unable to form a decent relationship so never having more.Bennies have lowered the sexual market value of a lot,maybe most ordinary men.If you were a sub 5 or 6 in the past being hard working and bringing in decent money would ensure you ended up coupled,but now if your sub 5 it wont make much difference,the girl can get bennies and dream of chad.

The best thing hard working young men could do would be buy a house between four or five of them.Work hard,and have 3 months holiday in Asia every year bar fining every night.

[Sue Lowe]

9 hours ago, sancho panza said:

Instead, like many rich countries

So being rich means being unable to afford a house or children does it? That’s funny (not funny) as it sounds dirt poor to me.

Edited February 24 by Sue Lowe

[Democorruptcy]

52 minutes ago, Lightscribe said:

 

They are all useful idiots. She had to climb to the top of the tree to find out that the tail wags the dog?

(with a little help of grifting her upcoming book to a right wing US audience of course)

She should have watched an episode of 'Yes Prime Minister', to prepare herself.

[Transistor Man]

2 hours ago, Libspero said:

Do you expect that to continue, even with the increasing complexity of chips now?I

It’s definitely more difficult/ expensive to design-for and manufacture each new generation. 
The number of companies who can manufacture at the leading edge is down to 3. 
But progress is going to continue. 
As you say, we know what’s going to happen for the next few years. Probably the next decade.

The leading edge, state of the art, will move to GAA imminently.
Then it will be CFET which is 3D stacking of transistors. That will give a significant density increase.

Then there are new materials options. That’s the next decade covered.

I never bet against this industry, because it’s a steamroller.

the rate of progress might slow, but each new generation will be better than the last. Cost….tends to work out. 
The current hype with nvidia and ARM will leave a mess when it blows up. I didn’t see this AI thing coming. I’m still sceptical. I wouldn’t have thought the chatgpt approach would work at all.
 

 

[sancho panza]

4 minutes ago, Democorruptcy said:

She should have watched an episode of 'Yes Prime Minister', to prepare herself.

She's jsut trying to cover for the fact that she was sh1t at the job.In fact ref the westmisnter polos,they pretty much all are.

Her picks for top jobs appeared to be motivated by a need to virture signal which is possibly why they ended up coming back on her.

Kwami,the Chancellor,got caught in a cheap 'noone can be that dumb' webcam sting within a year of leaving office,totuing his advice for £10,000 a day.

this in itslef spoke volumes about him in that a) he thought he was worth that much b) he was stupid enough to say it on a cheap webcam sting which would have had joey from friends getting suspcious c) that he was busy totuing for a second job when he done his first job so badly.

as many have said,we're headed for collapse first.Schumpeter was right.the whole public sector /corporate sector reacharound needs to get broken before we can reform it.

[Libspero]

11 minutes ago, Transistor Man said:

I never bet against this industry, because it’s a steamroller.

Thanks,  you’re a lot closer to the front than me so that’s somewhat reassuring.

Just in terms of the above..  AMAT LAM et al,  I’d never bet long in either direction personally. I’d liken them more to a rollercoaster in that respect..  buy the dips and sell the highs.

[Democorruptcy]

1 minute ago, sancho panza said:

She's jsut trying to cover for the fact that she was sh1t at the job.In fact ref the westmisnter polos,they pretty much all are.

Her picks for top jobs appeared to be motivated by a need to virture signal which is possibly why they ended up coming back on her.

Kwami,the Chancellor,got caught in a cheap 'noone can be that dumb' webcam sting within a year of leaving office,totuing his advice for £10,000 a day.

this in itslef spoke volumes about him in that a) he thought he was worth that much b) he was stupid enough to say it on a cheap webcam sting which would have had joey from friends getting suspcious c) that he was busy totuing for a second job when he done his first job so badly.

as many have said,we're headed for collapse first.Schumpeter was right.the whole public sector /corporate sector reacharound needs to get broken before we can reform it.

They all have to virtue signal folk into top jobs now. I still think her and Quasi were scuppered by the BoE because they were looking into stopping the bank's interest payments on overnight deposits there. That £45bn a year saving was how she was going to pay for the tax cuts.

[Transistor Man]

11 minutes ago, Libspero said:

Thanks,  you’re a lot closer to the front than me so that’s somewhat reassuring.

Just in terms of the above..  AMAT LAM et al,  I’d never bet long in either direction personally. I’d liken them more to a rollercoaster in that respect..  buy the dips and sell the highs.

Investing in it, that’s a different question!

Forget the recent ramp to the moon, The best deal was always buying the products IMO. The phones, PCs, TVs, etc. 

Edited February 24 by Transistor Man

[belfastchild]

26 minutes ago, Transistor Man said:

I wouldn’t have thought the chatgpt approach would work at all.

Its anecdotal but I know 3 or 4 people currently involved in AI development and research. They all think its glorified search engine, garbage in garbage out but all hope it lasts long enough so that they can continue in the role to early retirement (3-5 years).
They are all roughly my age though so its a case of 'what did it used to be called' in all this stuff.

I think it will work but at low level with defined data sets. It will automate out some jobs but again it will be those that can be automated within that definition.

Ironically going back to what search engines should be instead of the shite we have now where you cant find anything relevant or anything 'off message'. Though they will all probably follow that route as well, hence the defined data set.

[JMD]

1 hour ago, Yadda yadda yadda said:

The answers aren't those that they want to hear so they don't even ask the right questions.

Your absolutely correct of course. But with both a broken economic system and a broken social contract, where on earth would our politicians even start?

How did we get here? The harms happened over many decades of course but IMO there was a crucial period of opportunity. In the 1990s it was clear that the geo-political tectonic plates had dramatically shifted - with the looming rise of China and the sudden fall of the USSR - but instead of attending to the widening systemic economic faults and fissures, and fixing the build up of political pressures, our politicians instead just doubled down and kicked the can some more. So a massive wasted opportunity imo.  ...But it gets worse, where today our imperial master seems happy to merely sit back on its throne and intone 'Magma(!) America great again'.

It appears there are now no palatable political solutions for our useless politicians, they really have given up, and things will almost certainly end in economic collapse. And then an awful 'reset period' (but difficult to judge how awful?) will be forced upon us. Another depressing thought is that we will of course be expected to be very greatful for 'our rescue' by TPTB, plus most people will be totally unaware that the crises collapse and it's successive hard measures need never have happened in the first place.

 

[JMD]

1 hour ago, Democorruptcy said:

She should have watched an episode of 'Yes Prime Minister', to prepare herself.

The great thing about having 'Yes Prime Minister' as a reference is that Truss sounds exactly like a character from that show!

Because of TV, books, internet, and other information sources, it is far more difficult for TPTB to corral the public these days. However worryingly maybe that's why TPTB now favour going direct for the vax/slaughter(!) option instead?

[DoINeedOne]

A friend of the family said they pay £1100 a month for nursery of one child and that's part-time

Apparently and correct me if I'm wrong as I have no child in nursery but the Government free hours costs are just being passed onto those who pay and I assume with the increases in the minimum wage

Honestly, who can afford a kid these days

They would love another child, both work in decent jobs but doubt they will because of costs 

[janch]

3 hours ago, Sue Lowe said:

So being rich means being unable to afford a house or children does it? That’s funny (not funny) as it sounds dirt poor to me.

A discussion about the low UK fertility rate on the R4Today programme this morning had all sorts of reasons but no-one mentioned the elephant in the room ie the cost of housing.  No-one working can afford kids because their rent or mortage is so high and it takes two people to pay for it so no-one to look after the kids.

Childcare is very expensive so not an option for a lot of people plus most want one parent to be able to be at home and not compelled to be out in the rat race.

Many people wait longer than they want to, to have a child as they can't afford it. The birth rate would go up if the cost of housing came down....simple.

Just read your comment @DoINeedOne agree 100%

Edited February 24 by janch

[janch]

Japan still has a negative interest rate plus the BOJ holds a lot of equities.  Shaun Richards follows them in his blog:

The Tokyo Whale is having a ball as Japanese equities finally reach a new high

According to the February 20th update the Bank of Japan owns some 37,186,178,276,000 Yen of Japanese equities.

 

It all has an effect on the value of the yen of course.......

 

for those who do not follow such matters the stock market usually moves inversely with the Yen exchange rate.

[Hardhat]

2 minutes ago, janch said:

A discussion about the low UK fertility rate on the R4Today programme this morning had all sorts of reasons but no-one mentioned the elephant in the room ie the cost of housing.  No-one working can afford kids because their rent or mortage is so high and it takes two people to pay for it so no-one to look after the kids.

Childcare is very expensive so not an option for a lot of people plus most want one parent to be able to be at home and not compelled to be out in the rat race.

Many people wait longer than they want to, to have a child as they can't afford it. The birth rate would go up if the cost of housing came down....simple.

This is it. Despite all the hand wringing about immigration etc, this is the fundamental issue.

Myself and most of my friends are in the "having young kids" stage of life, and the main barrier to having more is the cost of housing and childcare, and the relationship between the two.

I would also say that this is primarily a problem for middle class working people. People on benefits and the very rich don't have the consider the housing / childcare balance in the same way.

For me personally I think the genie is out of the bottle in terms of demographics. My children are mixed race as are many of their friends. The UK is never going back to a single culture / race society with so many kids growing up in mixed households. But most of my generation grew up like that anyway. I don't think it's a reason people aren't having kids.

[Lightscribe]

3 hours ago, DurhamBorn said:

Incredible the solution is whats causing it.More bennies and free housing for immigrants forcing up house prices so the young working couple cannot afford the rent or mortgage.I bet the average for those on bennies is higher,around 2 because you get full bennies for two.Another big reason not mentioned is men opting out of dating and although of course women can easily get pregnant many will be having now waiting for chad or having one and being unable to form a decent relationship so never having more.Bennies have lowered the sexual market value of a lot,maybe most ordinary men.If you were a sub 5 or 6 in the past being hard working and bringing in decent money would ensure you ended up coupled,but now if your sub 5 it wont make much difference,the girl can get bennies and dream of chad.

The best thing hard working young men could do would be buy a house between four or five of them.Work hard,and have 3 months holiday in Asia every year bar fining every night.

My recently divorced brother has done just that. Minimal munter matches on Tinder over here, over 50 in a single day in Pattaya.

Hes been over there a year now running his business remotely over here (and very good staff who he has kept sweet with big bonuses). He’s loving it. He says that waking up to a firm 20 something woman’s bottom sleeping next to you every day is the best remedy for getting over divorce.

Edited February 24 by Lightscribe

[Lightscribe]

4 hours ago, Transistor Man said:

Investing in it, that’s a different question!

Forget the recent ramp to the moon, The best deal was always buying the products IMO. The phones, PCs, TVs, etc. 

But not the companies themselves. The 40 year disinflation cycle reversion into inflation isn’t going to be kind to these companies at a retail consumer level.

We are reaching a leveling off period in the s-curve in tech (recessions make people make do with last years model, get a device repaired etc etc)

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

The market eventually gets saturated. Organisations are jumping on the cloud/AI remote working bandwagon which is keeping the party pumping.

Dont get me wrong that is most certainly the direction of the future. We’re going back to the mainframe days of the 80’s to do the processing heavy lifting with front ends requiring minimal power requirements for battery life gains.

To me it’s the perfect embodiment of Cisco and the dot com. Cisco did nothing wrong, its networking infrastructure equipment was built into everywhere. It produced profit every quarter. 

But markets follow the Gartner Hype Cycle. 
 

Appliances used to be made to last, the disinflation cycle made that slowly disappear into a throw away society as product manufacturer was outsourced as cheaply as possible. Repair shops and parts were no longer needed.

The opposite of this is true in Asia, which I’ve spoken about before. They would think nothing at a local phone shop of using a reworking station to remove a memory chip for example to re-ball and solder an upgraded one rather than throw a phone/laptop (with soldered SSDs) and buy a new device.

As I said previously I like top end Sony TVs. I would never invest in them. You have half arsed technology like 3D, curved screens etc etc which all come and go. CRT to plasma/LCD was a real world leap. OLED was the peak (but expensive to produce) and now Sony is going down the path of mini-LED at the expense of contrast and black levels (which are much cheaper to produce) and sales will most likely fall because AV nuts won’t buy them.

That’s an example of the s-curve. 

Edited February 24 by Lightscribe

[Long-game]

2 hours ago, DoINeedOne said:

A friend of the family said they pay £1100 a month for nursery of one child and that's part-time

Apparently and correct me if I'm wrong as I have no child in nursery but the Government free hours costs are just being passed onto those who pay and I assume with the increases in the minimum wage

Honestly, who can afford a kid these days

They would love another child, both work in decent jobs but doubt they will because of costs 

Would be near a grand for 1 child for me. I am now part time missus took on full time. I am now part of the less productive, when the wee one turns 3 it will be 350 or so a month saved. It feels good to give less in tax to this bunch of thieves, as in the  Scottish government.