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

[onlyme]

21 minutes ago, DurhamBorn said:

What were we saying a week ago,

https://www.telegraph.co.uk/business/2024/02/27/britain-to-consider-tariffs-on-cheap-chinese-electric-cars/

China in outright delfation, things may be significantly worse than being openly admitted - unemployment, company closures, pull out of Western companies - Bridgestone have just pulled out. They had nearly500 EV company startups, early all of them are likely to disappear. BYD pick of the crop and largest but even they have their issues - see below.

Their internal car / EV market looks to have stalled so will be looking to actively dump production elsewhere if they can, one of the reasons they are in a position to severely threaten western manufacturers with stock that they have no hope in hell of competing with on sticker price. meamwhile the car buying public is incresingly pressed by finances/ finance ciost to buy the cheapest it can.

Govt/Sunak insanely sticking to mandated EV sales targes, ,EV stock is already stuck at dealers, IIRC EV 20% target this year and  15k fine for each car not sold of that proportion of total sales.

Something is going to be smouldering wreck by the end of the year - that policy or manufacturer UK profts unless they somehow maintain pandemic level price of ICE/Hybrid cars and their hapless buyers.

 

[GoneDark]

3 hours ago, DurhamBorn said:

Something's going to pop?

[onlyme]

Can't remember whether it ws this thread the lithium price chart was postde, but here is a recent one.

[GoneDark]

42 minutes ago, AVERAGEUKBLOB said:

https://voca.ro/1dubRzbbGQY1

That could be a link to a picture of your toilet for all we know.

Please explain the link. What is it?

[Loki]

2 minutes ago, GoneDark said:

That could be a link to a picture of your toilet for all we know.

Please explain the link. What is it?

It's him(?) screaming the age of the car is over

[Bobthebuilder]

21 minutes ago, onlyme said:

Govt/Sunak insanely sticking to mandated EV sales targes, ,EV stock is already stuck at dealers, IIRC EV 20% target this year and  15k fine for each car not sold of that proportion of total sales.

There was a similar fine type arrangement for European gas boiler manufactures, but that has recently been dropped.

[onlyme]

Just now, Bobthebuilder said:

There was a similar fine type arrangement for European gas boiler manufactures, but that has recently been dropped.

Not a chance they will hit the (reliable) supply requirements for heat pumps either, European heat pump sales have actually fallen for the first time in years / decade +. Think decision is due Arpil, they may have already backtracked in UK not sure.

Utterly deluded to think this would work. Now big row with EDF over who is going to foot the increased bill for heavily delayed HIckley Point C.

[darkmarket]

58 minutes ago, onlyme said:

China in outright delfation, things may be significantly worse than being openly admitted - unemployment, company closures, pull out of Western companies - Bridgestone have just pulled out. They had nearly500 EV company startups, early all of them are likely to disappear. BYD pick of the crop and largest but even they have their issues - see below.

China has gone all in on EVs at the expense of everything else. Yet now we have Apple cancelling its plans, Mercedes-Benz promising to sell ICE into the 30s and Musk well set for a pivot between X, Starlink and SpaceX.

This could be the biggest bait and switch in industrial history.

[onlyme]

7 minutes ago, darkmarket said:

China has gone all in on EVs at the expense of everything else. Yet now we have Apple cancelling its plans, Mercedes-Benz promising to sell ICE into the 30s and Musk well set for a pivot between X, Starlink and SpaceX.

This could be the biggest bait and switch in industrial history.

Ford went balls deep into EV out of all the US manufacturers, even they are backpeddling.

Really cannot decide who has played who. China grabs most of world's lithium resources and then manages to bribe every leading western policitian into net zero kamikaze dive as they could never compete toe to toe pitching ICE/Hybrid cars against established brands and hope to take over the whole market or what?  Net effect though has been huge electricity price rises that have crippled any running cost advantage EV's may have had unless you can charge from home all the time.

The silence (largely) and total inaction from the West in regards China's 100's new coal fired power stations suggest that CO2 risk / climate absolutely not what it is stated to be.

[desertorchid]

5 hours ago, Starsend said:

HMRC sold most of their buildings off some time ago to a company that they lease them back from.

The company they lease them from are based in the Cayman Islands - a tax haven.

 

FYI 155 HMRC Job centres are in a Singaporean Reit. I bought shares in them last week.

 

https://www.elitecreit.com/portfolio-overview.html

 

[darkmarket]

5 minutes ago, onlyme said:

Ford went balls deep into EV out of all the US manufacturers, even they are backpeddling.

Really cannot decide who has played who. China grabs most of world's lithium resources and then manages to bribe every leading western policitian into net zero kamikaze dive as they could never compete toe to toe pitching ICE/Hybrid cars against established brands and hope to take over the whole market or what?  Net effect though has been huge electricity price rises that have crippled any running cost advantage EV's may have had unless you can charge from home all the time.

The silence (largely) and total inaction from the West in regards China's 100's new coal fired power stations suggest that CO2 risk / climate absolutely not what it is stated to be.

It's the supply chain that bothers me too. There's long been a glaring hypocrisy in the calls for the West to create this carbon economy, but I do think some people have been profiting handsomely and would run with it as far as complete economic suicide.

Nevertheless, it's not looking good at the moment. The question may be, if the Western market basically says no to EVs for now, does China have the means to ride out a transitional period until it can find a new strategic sector?

[King Penda]

14 hours ago, Pip321 said:

 

Agree with @Red Debt Redemption

I would be wary of ignoring the ISA allowance….in a world where Martin Lewis had been telling everyone for years not to bother with ISAs (because they paid 0.5%, and non ISAs paid 0.7%) it’s worth bearing in mind things change.

If you earn 5% on £50k that’s £2500 plus another £500 on that other account, that’s £3000 and some is going to get taxed.

Instant access (should you need access to buy that house) with Virgin at 5.09%. 

Not personal advice because it is very individual and lots of factors….but what if the house purchase is delayed or more likely next tax year some bird gives you £200k for services rendered 😂…..then those missed ISA allowances have gone.

My experience is I have used ISAs since they were invented….and for fear of having a funny meme with a gloating man doing a beard thingy 😂…..its the one thing where I am now feeling very smug # because there is a chunk of money in them. 

#Not least because my savings are mainly not being taxed because I don’t want to support this shower of shite who will spend my money on something that no longer represents me or the UK population. 

 

True however I’m like a sloath that’s done ketamine at the moment . Maybe not my wisest move financially but every month I don’t pull the trigger means I have another 1k plus to add to the kitty. I originally planned on spending maybe 140k .  I wanted some wriggle room has I doubt I will get what my house is theoretically worth however will the next house I buys owners get what they want . ? . But I’m also leaning towards borrowing 30k and having a budget of 170k .  The snag with this is I’m working has agency quite deliberately but it makes borrowing a bit harder .mind I was agency when I bought the house I’m in now the difference is now they are on the ball 

[Red Debt Redemption]

2 hours ago, Joncrete Cungle said:

Been to decent sized manufacturer we deal with at work this afternoon. Everyone there is paid above minimum wage, talk from one manager is no payrises for a few years until min wage rises legally force up pay rates for the lower end. Or things improve for the business.

What's the point in doing the skilled job then if min wage ones pay the same? 

[Red Debt Redemption]

1 hour ago, darkmarket said:

China has gone all in on EVs at the expense of everything else. Yet now we have Apple cancelling its plans, Mercedes-Benz promising to sell ICE into the 30s and Musk well set for a pivot between X, Starlink and SpaceX.

This could be the biggest bait and switch in industrial history.

Lessss go SEDY sandal makers! 

[Dave Beans]

1 hour ago, darkmarket said:

It's the supply chain that bothers me too. There's long been a glaring hypocrisy in the calls for the West to create this carbon economy, but I do think some people have been profiting handsomely and would run with it as far as complete economic suicide.

Nevertheless, it's not looking good at the moment. The question may be, if the Western market basically says no to EVs for now, does China have the means to ride out a transitional period until it can find a new strategic sector?

Whereas Labour will restore the 2030 ban..

[darkmarket]

10 minutes ago, Dave Beans said:

Whereas Labour will restore the 2030 ban..

We'll see if they'll go it alone, if it comes to that.

[Dave Beans]

5 minutes ago, darkmarket said:

We'll see if they'll go it alone, if it comes to that.

Interesting post..bit of a long one..

When they started building wind turbines, they knew about intermittency problems and the backup problems. I knew about it. They can't not have known about it but they did it anyway. Wind turbines weren't just new sources of energy. They had an entirely new system in mind and they knew it would require a complete grid transformation.

Nobody sane would actually invest in such a system in ordinary market conditions because it's an overly complex concept that's fraught with expensive problems. So they rigged the market. They created generous subsidies and incentives while piling stealth taxes on conventional generation. If you punish people for building power stations and reward them for building windmills, then windmills they will build. For the first twenty years, the backup problem wasn't real issue. Until they started blowing up coal stations and decommissioning old nuclear plants (phase two of the green transition).

But by that point they could point to a huge fleet of windmills and claim it was working and the green energy revolution was well under way - even though they'd started buying industrial backup diesel generators. It was time for phase three. That's where EVs come in. They don't actually care if we don't want them or even if they're fit-for-purpose.

They need you to have an EV because they want the V2G system, in which you mugs go out and buy a grid balancing battery on wheels. Slap a few fancy gadgets on it and some daft sods will fall over themselves to get one. (a fool and his money...). They knew that EVs alone wouldn't be enough. They've never had a comprehensive answer to what happens when the wind doesn't blow. It was always contingent on some or other future techno MacGuffin. They poured billions into hydrogen and biofuels research.

They seem to have settled on the idea of grid scale battery storage and a convoluted system of electrolysis to produce hydrogen. 1.3 TWh of UK wind generation wasted due to lack of grid-scale storage. The idea is to use the surpluses to make hydrogen, and either pipe it to power stations, or convert it back. It's expensive and and inefficient, but when has that ever stopped them? Some even propose converting existing gas infrastructure to hydrogen - which is why they're so keen on forcing us to use heat pumps.

Politicians love this idea because they love the idea of "green jobs" even if it makes energy more expensive. There are other peripheral problems with this, not least grid congestion and the lack of transmission lines, for which we'll need to find, accounting for inflation, an additional £90bn. (which would buy you three Hinkley Points at today's prices). At the end of all this, we'll have a convoluted, expensive and unreliable system that depends entirely on maintaining (now antique) gas power stations and foreign interconnectors.

The entire system is underwritten by French nuclear and Norwegian Hydro. All the batteries in the world won't plug prolonged capacity shortfalls when the wind doesn't blow. This, of course, demands smart metering as a means to ration energy, which was always the intention. There's nothing much wrong with the idea of demand side management, but Net Zero is the redesign of the people around the needs of the grid, rather than designing the grid around the needs of people. By its very nature, it is coercive. It has to be because Net Zero is a utopian fantasy. What it actually means is sky high energy prices, deindustrialisation and the export of jobs, emissions and pollution.

It's not even green. It is a transition to a mineral intensive energy system that will require an infinite expansion of mineral mining and seabed strip mining. It will destroy marine habitats, but hey, we're saving the planet here! Course, none of this will ever come to fruition. Every single aspect of Net Zero is turning into an unmitigated disaster.

Demand for EVs looks to have peaked, there is no great enthusiasm for heat pumps, and they're not suitable for at least half the national housing stock, and the third big push for insulation is as much a flop as the first two times it was tried. Meanwhile, the investment capital to connect new windmills to the grid simply doesn't exist. Material input costs have spiralled by forty percent. Battery production in Europe is struggling to stay afloat, and much the same can be said about solar.

The vast majority of solar panels will come from China and there's a 75% chance they were made using slave labour. Wind is also a non-starter because the fleet is getting up there in years and turbines are not reaching their rated lifespan. Any new production will struggle to keep pace with the rate of retirement. It is also said that there isn't enough copper in the world to make the transition to Net Zero. Dwindling copper supply from Panama and Peru could wipe out the global surplus in 2024. This is just a summary of the issues, but I could go on at length. The short of it is that the grid was never designed for diffuse, intermittent energy, and the only way to mitigate the problems is ever more expensive and elaborate subsidy funded contraptions that drive up your bills.

They always knew this. They just didn't care because they view the billpayer as a bottomless pit. Affordability was never factored in, convinced as they are that this is necessary to meet an arbitrary political climate target. Which brings us back to what we already knew. We are ruled by narcissistic sociopaths and there is no economic recovery until they are removed.

[King Penda]

57 minutes ago, Red Debt Redemption said:

What's the point in doing the skilled job then if min wage ones pay the same? 

This 

[King Penda]

3 hours ago, Dave Beans said:

Whereas Labour will restore the 2030 ban..

We are fucked 

[Lightscribe]

8 hours ago, darkmarket said:

China has gone all in on EVs at the expense of everything else. Yet now we have Apple cancelling its plans, Mercedes-Benz promising to sell ICE into the 30s and Musk well set for a pivot between X, Starlink and SpaceX.

This could be the biggest bait and switch in industrial history.

In the words of Charlie Munger

“Forget what you know about buying fair businesses at wonderful prices; instead, buy wonderful businesses at fair prices,”

Toyota was always the one to watch for real world production and the roadmap direction in the interim.

These 2021 IPO meme EV companies on the back of QE will come and go (although Tesla and BYD will no doubt stick around - China will continue to corner the market for EVs)

Toyota have crunched the numbers with their 1:6:90 rule

https://energyminute.ca/news/toyotas-1690-rule-the-case-for-hybrids/

You can build 6 plug in hybrid or 90 hybrid vehicles for the raw materials of one EV. Thus having a far greater integration rate and ‘carbon reduction’.

My money is on them. (or in Dosbods terms Sibanye) 

[headrow]

A €8 billion cash price is being mooted by Vodafone in talks with Swisscom, which is lower than the €10.45 billion price that had been suggested in an earlier deal the FTSE 100 company rejected from Paris-based Iliad.

The French telecommunications company proposed a merger deal in December where the two companies' Italian businesses would be combined, with each parent still holding a 50% share. 

Under this proposal, Iliad would pay Vodafone €6.5 billion in cash plus an additional €2 billion in a shareholder loan.

Vodafone said today that, having spoken to a number of parties about potential market consolidation in Italy, it believes the potential transaction with Swisscom "delivers the best combination of value creation, upfront cash proceeds and transaction certainty for Vodafone shareholders". 

[headrow]

17 hours ago, Bobthebuilder said:

What is the hive minds thoughts on Abrdn at this price point? I am currently 30% down, but thinking off another small ladder.

I'd avoid until we get a broad based market sell off , we are due one. They will get hammered.

 

I think their business model is pretty dated , they are trying to sell funds with high fees when people can get the same thing in an ETF for a fraction of the cost.

[Democorruptcy]

1 minute ago, headrow said:

A €8 billion cash price is being mooted by Vodafone in talks with Swisscom, which is lower than the €10.45 billion price that had been suggested in an earlier deal the FTSE 100 company rejected from Paris-based Iliad.

The French telecommunications company proposed a merger deal in December where the two companies' Italian businesses would be combined, with each parent still holding a 50% share. 

Under this proposal, Iliad would pay Vodafone €6.5 billion in cash plus an additional €2 billion in a shareholder loan.

Vodafone said today that, having spoken to a number of parties about potential market consolidation in Italy, it believes the potential transaction with Swisscom "delivers the best combination of value creation, upfront cash proceeds and transaction certainty for Vodafone shareholders". 

You just beat to that, interesting my link says contains "Inside Information", when the price went up yesterday (Even though the deal isn't agreed yet).

 

Quote

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

28 February 2024

 

Update regarding Vodafone Italy

 

Vodafone Group Plc (?Vodafone?) notes recent media speculation and confirms it is in exclusive discussions with Swisscom AG (?Swisscom?) regarding a potential sale of Vodafone Italy to Swisscom for cash.

 

Subject to confirming binding transaction documentation, the parties have agreed that Swisscom will acquire Vodafone Italy for an enterprise value of €8 billion on a debt and cash free basis and subject to customary closing adjustments. The enterprise value represents a multiple of c.26x consensus FY24F OpFCF1 and c.7.6x consensus FY24F Adjusted EBITDAaL1.

 

Vodafone has engaged extensively with several parties to explore market consolidation in Italy and believes this potential transaction delivers the best combination of value creation, upfront cash proceeds and transaction certainty for Vodafone shareholders.

 

There can be no certainty that any transaction will ultimately be agreed. If required, a further announcement will be made when appropriate.

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

 

 

[Lightscribe]

https://www.independent.co.uk/life-style/wendys-uber-style-price-demand-b2503339.html
 

You can begin to see the creep to blockchain and digital currency…

[Democorruptcy]

16 hours ago, DurhamBorn said:

Iv been buying some back average £1.62 i had sold them all when they ran over £2.10 a while back.They have II a very good business and the Financial Advisor platform business is also very very good.I know lots of boomers who let them fleece them 1.5%+ a year on fees.If lots of housing wealth passes down a lot will end up with them there.

The investment business is the weak link.Its costs are too high and its suffering as institutions etc move more and more to trackers etc.Of course trackers will be a disaster soon once almost everyone is in them.

The divi is now pretty much the same as the capital being produced so it should be safe,but there is a small risk at some point of a 30% cut,small,but there.

When EMs come back into a bull market,as i think they will,it should really help the likes of ABRDN.I also think the industry needs to bite the bullet and merge down.ABRDn could be a target for Aviva or M&G and i would expect a 50% uplift,or if a big Yank outfit fancied a way into the UK.More doubtful.

Asset managers have huge headwinds against them,but iv bought the EM leaning ones because i like these risk/reward set ups when the macro inflects as i think it has on the EMs.

Asset manager STJ having a bad day down 31%

Quote

 

Wealth manager St James's Place tumbled on Wednesday after saying it swung to a full-year loss and slashing its dividend, as it set aside £426m for potential client refunds.
In the year to the end of December 2023, the company swung to an IFRS loss after tax of £9.9m from a profit of £407.2m the year before.

The firm posted a post-tax cash result of £68.7m, down from £410.1m a year earlier, as it took a significant hit from a one-off ongoing service evidence provision of £426m "for potential client refunds linked to the historic evidencing and delivery of ongoing servicing".

STJ declared a final dividend of 8p a share, down from 37.19p in 2022, giving a full-year dividend of 23.83p a share, versus 52.78p a year earlier.

It also changed its future dividend guidance, saying that going forward, it will pay 50% of the full-year underlying cash result.

Net inflows for the year came in at £5.12bn and funds under management rose to £168.2bn from £148.3bn at the end of 2022.

https://www.hl.co.uk/shares/shares-search-results/s/st-jamess-place-plc-ordinary-15p/share-news