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

[honkydonkey]

3 minutes ago, Yadda yadda yadda said:

Never been to a food bank. People don't have smoking breaks half way round a supermarket. Is it a social thing? Go down the food bank, meet your mates, have a smoke and talk about the football or benefits claims. That sort of thing. Or do they queue up before opening for the best freebies? Bit like waiting for the yellow label mark downs for those spending their own money.

 

Bit of both going by the video. They were all white English but another guy was complaining all the people inside were foreigners (Russians according to him, so you can guess freeloading E.Europeans). Of course we never saw any of those in the video and he was told to come back when he'd calmed down lol.

[sancho panza]

BP puts shareholders first ahead of the green transition.....good.

Nice to see theyve upset the chocloate Greenies by doing so

Market likes it

https://uk.finance.yahoo.com/news/bp-share-buybacks-falling-profits-091704352.html

BP expands share buybacks despite falling profits

BP (BP.L) has reported a sharp drop in profits after oil prices fell last year but is pushing ahead with further shareholder returns.

BP made underlying profits of $3bn (£2.4bn) in the final three months of the year, exceeding analyst estimates of $2.8bn, and taking earnings for 2023 to $13.8bn (£11bn). However, this is down by half from the record of $27.7bn set in 2022.

Despite the plunge, the energy firm will continue to pump money back to shareholders. It has announced a new $1.75bn share buyback — larger than the $1.5bn it executed in the last quarter — and is committed to $3.5bn worth of buybacks for the first half of this year. Overall, the plan is to buy back at least $14bn over 2024-25.

BP also hiked its dividend by year-on-year 10%to 7.27 cents a share in the fourth quarter.

The company is being criticised for expanding its share buybacks, with Global Witness claiming that the oil major’s shareholder payouts have increased by 43% compared to a five-year average — in 2023 totalling $12.7bn (£10.2bn).
 

Joseph Evans, researcher at IPPR, asked if BP couldn’t find a better use for the money.

He said: “BP has decided to prioritise its shareholders over investing in the green transition. With profits down on last year, you might expect BP’s executives to be looking for profitable investments in the growing industries of the future, like renewable energy. Instead, they’ve chosen to enrich their investors.

“It’s clear that BP and other fossil-fuel giants can’t be trusted to drive the green transition.”

Shares in BP have jumped over 6% at the start of trading in London. They’re up 28p to 482p, a one-month high.

[sancho panza]

#debdeflationcometh series

UK banks and pension funds are balls deep in some of these CRE laons ,and soem council tax payers have unwittingly been lined up to headge some others.

The finacial system faces a severe dislocation in the not oo distant imho given msot banks are operating at Dowd Buckner levearage ratios circa 30/1.

 

https://www.telegraph.co.uk/business/2024/02/06/ftse-100-markets-latest-news-net-zero-germany-bp/

Canary Wharf office sold at £160m discount - latest updates

A Canary Wharf office building that fell into receivership last year is poised to be sold for a 60pc discount on its last sale price in a sign of the downturn suffered by London’s commercial property market.

Located in the heart of the capital’s financial district, 5 Churchill Place was put up for sale last year after being placed in receivership when its owner Cheung Kei Group, a Chinese investor, defaulted on loans backed by the property.

Israeli businessman Haim Taib’s Menomadin Group has agreed to buy the building for £110m, according to React News, in a sale brokered by Savills.

 

Edited February 6 by sancho panza

[JMD]

3 hours ago, BurntBread said:

Lyn Alden has a nice analogy on this one. In a fiat money system (where you are being paid in "melting ice cubes"), then fiat savings obviously erode, and precious metals keep up with inflation. However, if you look at historical long-term returns, then scarce, desirable real estate (e.g. waterfront properties) and stocks run ahead of inflation.

The best returns are therefore from "shorting" fiat in order to invest in real estate and businesses. By "shorting" in this case she means taking on cheap debt.

The analogy she used is black-jack: you want to borrow as much as possible to do that investment, but not go "over 21" -- i.e. not get sunk by cash flow problems if there is a spike in financing costs.

In her book she talks about how all this would change if there were a fast-transactable (and verifiable) hard money. Debt would become generally undesired as a financial strategy, and would only be taken on by productive enterprises where it was clear they could repay it though the outcome of investment. Nobody would choose to the play the debt black-jack game, and the whole system would be come much more stable. Its one of the key reasons she is a bitcoin advocate.

I agree with that. It was the 32% allocation to private residence on the link i posted that I couldn't quite accept. 

In think it significant that most global wealth is held in real estate. This article is interesting, and highlights how big real estate is compared to other assets classes. It also shows how big the Chinese property market is today.

https://www.savills.com/impacts/market-trends/the-total-value-of-global-real-estate-property-remains-the-worlds-biggest-store-of-wealth.html

 

I haven't read Aldens book yet. Does she mention land value tax at all? Only i note the book doesn't have an index!? If allowed by governments, I do think BTC could solve many problems (I own some as a speculative bet and/or insurance hedge, etc), but I don't think crypto P2P self-custodied money can solve all our economic/social problems.

I consider the accumulation and concentration of wealth as the other problem area. Most wealth is held in real estate because over time it outperforms all other asset classes. It achieves these gains mostly by leveraging the 'free' productivity gains made during each business cycle - by benefiting from government infrastructure projects and other externalities. Ok the owner's property gains are multiplied by banks because they lend too much and create speculative bubbles, whilst at same time benefiting from the property collateral because they can then make more loans. I'm not against people getting rich but gaming the property system is not fair and ultimately causes destructive economic harm.

I think the 18 year real estate cycle is fascinating. After all each property bubble does coincide with every major recession and then takes other productive businesses down with it. Economists conveniently ignore the workings of the property market and it's suspicious how Adam Smith/Henry George writings regarding how property is actually as important factor as capitol and labor in all economies. However in late 1800s economic texts were mysteriously(?) rewritten to redefine property as being just another form of capitol. The breakout of WW1 prevented the liberal government from implementing it's land value tax reforms, and after the war the 'temporarily suspended' tax laws were repealed. Funny that!    ...Anyway please excuse my above diversion but as I say i believe this is an important topic.

Edited February 6 by JMD

[Long time lurking]

1 month

I have the same question as the poster 

 

[Long time lurking]

 

[BurntBread]

48 minutes ago, JMD said:

Does she mention land value tax at all?

No. it's essentially a book about money in all its forms, and other economic issues are covered only insofar as they relate to the nature of money.

I agree with you that property (or rather scarce land) is likely to be a means for the wealthy to extract from the less-wealthy, regardless of the money system. However, Lyn is clear that fiat+finance greatly accelerates this process, because the runaway values of property are partly down to the erosion of fiat, and the landed have access to cheap finance, which the poor don't, and this lets them "short" fiat for extra cherries on the top of that trade.

Thus, LVT is probably the only actual solution, but hard money and less financialisation would still be a restraining force.

[Plan-b]

48 minutes ago, Long time lurking said:

1 month

I have the same question as the poster 

 

Looks like a glitch

They seem to happen occasionally

[TNS]

46 minutes ago, Plan-b said:

Looks like a glitch

They seem to happen occasionally

bit of a bummer, i was hoping for an imminent shit storm.

[Long time lurking]

Playing games now 

 

 

Edited February 6 by Long time lurking

[AlfredTheLittle]

5 hours ago, Long time lurking said:

Just a fine here ,which is no more than a factored in cost

Until there are proper repercussions nothing will ever change 

 

What's the two year reprieve, are they going to kill him in two years?

 

Edit: I found the answer if anyone's interested: the sentence may be commuted to life imprisonment after two years if he does not commit any serious crimes during the two-year period.

Edited February 6 by AlfredTheLittle

[Royston]

20 hours ago, JoeDavola said:

Change the 'or' to an 'and' - I think we have a solution!

 

...ah man I love ChatGPT....

Just needs the regulation dole pole swinging uselessly in the crook of her arm.

[Red Debt Redemption]

6 hours ago, DurhamBorn said:

I was really pissed off once when i saw a car on my estate older than mine.Luckily it was just visiting and things went back to mine being the oldest.The two money sinks i find the most insane are expensive cars that sit on a drive and expensive holidays to sit on some sand.I think i have spent less than £20k all in on cars and repairs in 30 years .

You should buy an EV think of all the money you would save.

[Axeman123]

1 hour ago, AlfredTheLittle said:

What's the two year reprieve, are they going to kill him in two years?

 

Edit: I found the answer if anyone's interested: the sentence may be commuted to life imprisonment after two years if he does not commit any serious crimes during the two-year period.

If you were under sentence of death, what crimes would you have the opportunity to commit? You might strangle another inmate, if you weren't under solitary confinement but you wouldn't be roaming free etc, and if you were who the hell would turn themselves in for life imprisonment at the end of two years?

Maybe they really mean if he signs the legal papers to transfer offshore assets and doesn't make a fuss or appeal the conviction...

[Axeman123]

Hardly a big deal, but somehow seems noteworthy as a cultural/political milestone

 

[geordie_lurch]

Tucker is going to interview Putin which should be interesting especially as the changes coming from the Ukraine war are reshaping the world quicker than we can say macro Well worth watching this short explanation clip.

 

Edited February 6 by geordie_lurch

[Hardhat]

16 minutes ago, geordie_lurch said:

Tucker is going to interview Putin which should be interesting especially as the changes coming from the Ukraine war are reshaping the world quicker than we can say macro Well worth watching this short explanation clip.

 

I imagine it will be heavily stage managed and the Russian side will get to sign it off before it's broadcast, so I doubt we will learn anything new or that any revelations will come off it. Bit of a coup for Tucker Carlson though, which is I suppose why he's doing it. 

[Noallegiance]

39 minutes ago, Axeman123 said:

Hardly a big deal, but somehow seems noteworthy as a cultural/political milestone

 

Interviewer: "What changed you from a Marxist to a Libertarian?"

Thomas Sowell: "Facts".

[honkydonkey]

50 minutes ago, Axeman123 said:

Hardly a big deal, but somehow seems noteworthy as a cultural/political milestone

 

I'd imagine her billionaire husband Nick Candy would be more noteworthy.

[TNS]

31 minutes ago, honkydonkey said:

I'd imagine her billionaire husband Nick Candy would be more noteworthy.

And who says money can't buy happiness...

Edited February 6 by TNS

[AlfredTheLittle]

1 hour ago, Axeman123 said:

If you were under sentence of death, what crimes would you have the opportunity to commit? You might strangle another inmate, if you weren't under solitary confinement but you wouldn't be roaming free etc, and if you were who the hell would turn themselves in for life imprisonment at the end of two years?

Maybe they really mean if he signs the legal papers to transfer offshore assets and doesn't make a fuss or appeal the conviction...

it only 'may' be commuted in two years, maybe depending on whether anyone needs his organs.

[Axeman123]

44 minutes ago, honkydonkey said:

I'd imagine her billionaire husband Nick Candy would be more noteworthy.

I can't imagine she has done this without his blessing, her fronting up at the event is likely intended as a signal that big money individuals are backing the Truss camp. I can't imagine Candy striking out against the entire rich strata that buys his ultra premium developmenst either, so to me it implies the overton window for London's ultra rich stretches as far as Truss.

I could imagine non-dom status would be safe under Truss, and that luxury development would be easier than under Starmer. Stomp out Rolex rippers and pacify the "far right" with some red meat policies and you likely have the London based billionaires dream platform for political donations.

[DurhamBorn]

When government force buyers into their debt (in the UK forcing pensions into Gilts,in the US primary dealers etc) it removes investment from the productive economy.The polos and central banks thought it did not matter because the liquidity would go to consumers through government spending on bennies and pensions that would be spent and end up in growth in the private sector they could tax.They thought they could simply be first in the chain instead of last.What they did not understand is this is a cost push inflation cycle and when they and their clients get the cash before the inflation it makes everyone want in on the deal.The private sector has no incentive to invest,unless they can capture inflation and increase prices faster than inputs.Iv said before,but what i track in the UK is now vertical.The state is consuming so much the productive economy cannot compete.Im almost pleased Labour get to inherit it,because their work during Brown created it.

 

 

[Cattle Prod]

20 hours ago, wherebee said:

Other cultures have food kitchens/soup kitchens.  It's what the west used to have in depressions and economic crisis - the community would cook and the poor would come and sit in good order, whilst sermons and lectures were read to them.

Food kitchens destroy societies, soup kitchens unify them

This is undoubtedly true, in that it can unify the poor against the sermoniser! Believe it or not I used to hear a playground taunt in school in the late 80s e.g of “You took the soup Mahon ya prick” … took me a while to figure out it went back to 1847 when the Protestants ran soup kitchens in famine Ireland in return for renouncing your Catholic faith and anglicising your name. So an O’Mahony became “Mahon” and a 150 odds years later kids are still taunting and shaming each other over how their poverty forced them to renounce who they were. That kind of forced unification of society backfired spectacularly, sadly. If you kick someone when they are really down they won’t forget it for generations - that’s a lesson our current governments need to re learn.

[Axeman123]

1 minute ago, Cattle Prod said:

This is undoubtedly true, in that it can unify the poor against the sermoniser!

iirc Down and out in Paris and London had some good insights on that issue.