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

[MrXxxx]

16 minutes ago, Pip321 said:

Many of his friends are on free tablets, free doctor visits at least once a month for numerous crap, free bus passes (which are great round here to bob to Leeds etc), heating allowances, state pensions,

..and thererin lies the problem in the UK, the 'thinking' that such things are free so either a) we accept lower levels of customer service/standards, or b) 'we' take [and often waste] these things as they are 'free'...they are not free, they have been paid for via taxation of people time/labour.

19 minutes ago, Pip321 said:

May take time but I think more and more people are wanting a third way that isn’t just voting red/blue because the6 are seeing it’s all just globalist nonsense where no one represents them. 

Agree 100%....never thought I would ever state this, but I think to change the current two party system [which is actually a one party system of those with self-serving interests] we are going to need anarchy....the system is so ingrained that it is impossible to change it through the democratic process, as it has 'evolved' [legally/legislatively] to protect those that are running the current system.

[wherebee]

3 minutes ago, MrXxxx said:

..and thererin lies the problem in the UK, the 'thinking' that such things are free so either a) we accept lower levels of customer service/standards, or b) 'we' take [and often waste] these things as they are 'free'...they are not free, they have been paid for via taxation of people time/labour.

Agree 100%....never thought I would ever state this, but I think to change the current two party system [which is actually a one party system of those with self-serving interests] we are going to need anarchy....the system is so ingrained that it is impossible to change it through the democratic process, as it has 'evolved' [legally/legislatively] to protect those that are running the current system.

The new president of Argentina has apparently banned any gvt dept from describing any service as free. 

Correct thinking.

[MrXxxx]

https://www.express.co.uk/finance/personalfinance/1875401/andrew-bailey-bank-of-england-pay-deal

Oh, the irony considering this...

https://www.theguardian.com/business/2023/apr/25/britons-need-to-accept-theyre-poorer-says-bank-of-england-economist

...that said and in fairness, since when has a 4% [and below real inflation] been a HUGE pay rise as reported in this DE article?

[ThoughtCriminal]

@sancho panzaHave you looked at Yara lately? They're the lowest they've been for five years. 

[MrXxxx]

1 hour ago, MrXxxx said:

..and thererin lies the problem in the UK, the 'thinking' that such things are free so either a) we accept lower levels of customer service/standards, or b) 'we' take [and often waste] these things as they are 'free'...they are not free, they have been paid for via taxation of people time/labour.

Agree 100%....never thought I would ever state this, but I think to change the current two party system [which is actually a one party system of those with self-serving interests] we are going to need anarchy....the system is so ingrained that it is impossible to change it through the democratic process, as it has 'evolved' [legally/legislatively] to protect those that are running the current system.

..and to just reinforce this one only needs to look at this poll figure:

https://www.msn.com/en-gb/news/other/reform-uk-hit-new-polling-high-as-voters-lose-faith-in-sunak-and-starmer/ar-BB1jALoM

...says it all really, when neither of the two parties leaders can inspire enough confidence in the electorate to get AT LEAST a third 'satisfied' with their performance; not even a [Brexit] greater than 50% majority, it is 'time for change'!

[Long time lurking]

 

[Axeman123]

9 hours ago, Funn3r said:

You bastard it's giving me a nervous fucking breakdown!

You need to adopt this mindset IMO...

[JMD]

17 hours ago, Cattle Prod said:

EU (not Europe, UK is still part of Europe 😉) turn to? It’s already chosen communism and grab everything not nailed down, I don’t know the fancy term for that. It’s really only Hungary holding back the tide now. It used to be a broader ex communist bulwark like Hungary and Poland, id be interested to hear @M S E Refugees take on developments in Poland since Tusk took over. 

I accept that my post was perhaps a (somewhat garbled?) shorthand of my view (personal bias?) for what direction Europe will eventually take. So just for clarity...

I referenced Europe because I expect the EU to at least realign politically/economically, and where a cold energy starved Britain might eventually be looking for new close friends on the continent, and so yes I was potentially including the UK.

My use of Ordoliberalism was meant to draw attention to the distinct and I think crucial capitalist divide between it and neo-liberalism, ie between the European and the USA models. Germany loves a rigid system of government (hmm!?), and I think it will double down on what served it so well post WW11. I believe you suggest that Ordoliberalism is merely communist. I would disagree and think it allighns far more with how Russia is operating today, which is not communism. Ok, another pet theory I subscribe to (mitteleuroper) is that Russia and Germany (and Poland) will eventually join forces and effectively dominate Europe. For example the attempted German coup last year I think was significant, but it and the political affiliations of its participants went 'strangely' under reported?!

Tbc I don't like these trends. But do think they at least offer the prospect of a peaceful Europe. And given that we predict on this thread a future of authoritarian government and financial crises, a stable Europe might be the best we can hope for. Of course will the US let Europe of its leash, that is also a big question, who knows... interesting times.

Edited March 9 by JMD

[DurhamBorn]

4 hours ago, Ash4781b said:

https://www.bbc.co.uk/news/business-68516710
 

To be fair to the BBC Faisal Islam has written an article on the budget etc and captures the odd position of the Tory party and mentions knocking down something productive manufacturing and replacing it with well nothing ?  It’s really end of days type stuff for the party coming for savings and pensions. I’m hearing huge discontent from grey / older vote. Unfortunately it does mean that both parties will be on a tax raising plan. Do need to plan for this. the article highlights the fiscal drag - tax rises. I imagine both parties will be campaigning on the tax rise plan. Great. I can’t believe the Tories would campaign on a NI cut to near zero platform. 

All setup for the UK lagging behind for decades. Make sure you fill up the BRISA ! 

 

“The diggers were knocking down the town's Honda factory, 35 years after Margaret Thatcher lured the Japanese car giant to the UK. There are hopes that the redevelopment of the site will lead to thousands of new jobs, but it is still unclear what they might be.

Here is what is very curious. The Conservative strategy on tax has completely turned on its head. 

Not far from the old Honda factory in Swindon, David Cameron launched his 2015 election manifesto with a commitment to raise income tax thresholds above inflation to take people out of the income tax system, and to prevent many upper-middle earners paying higher-rate tax. 
 

 

 

….

It was the absolute cornerstone of Conservative tax strategy in 2017, too. 

What we see now is pretty much the entire reversal of that. "U-turn" does not really capture the galactic extent of this change in direction. In 2010, there were three million higher taxpayers, by 2029 there will be 7.3 million.”

Im convinced its to capture back public sector pension increases and also a lot of the state pension increases instead of tackling those issues.The problem is it really hits hard lower paid workers and the NI does not make up for it.I would argue not index linking allowances is the biggest theft of them all,and should be illegal.They have created a disaster with the freeloaders and with present policy they are going to take 40% spending power from the productive and private sector retired.Its hardly talked about,but the gilt hit was the biggest theft of saved labour in history,yet ignored.what really worries me is my kids and grandkids.They would not be able to stay ahead of all this.I know Osborne isnt liked on here,but i think he did a very good job.Made some mistakes,mostly around housing,but some very good policy.This Tory government has destroyed it all.Labour will likely be as bad.The huge problem we have are allowance freezes,but im working on it.

[DurhamBorn]

4 hours ago, Pip321 said:

 

Re state pensions and taxing ‘pensioners’ I have a friend who is ‘fairly well off’ with a private DB pension paying around £30k and his state pension kicking in soon. And he was fuming (really fuming) about the entitlement of all his friends who are living on public sector pensions which I found really interesting that some people get it.

So my friend had his 5% capped pension raise for the last 2 years (ie 10%) , whilst his public sector friends got 18/19% inflation linked increases. And his public sector friends are moaning about tax….and even moaning they weren’t benefitting re national insurance cuts, think about that….they don’t benefit cos they pay 0% but that isn’t good enough. 

He says they are all so entitled, totally uneducated financially and just expect everything on a plate. They have a seemingly total disregard for workers (includes their own kids) and the struggle they are having. 

Many of his friends are on free tablets, free doctor visits at least once a month for numerous crap, free bus passes (which are great round here to bob to Leeds etc), heating allowances, state pensions, bloated assets mainly in house prices, spurious disable badges, council tax reductions due to a pretend disability eg adapted toilet for a bad knee.

I agreed….middle class boomers aren’t despised per se,  if they are like him ie they take what they can…..but at least do it gratefully. 

It seems the worst ones are those who never really worked for it all but it has all just fallen into their lap whilst they were administrators in the public sectors whose roles went from £25k equivalent junior type roles to perceived ‘management roles’ on £50k just with the evolution of ‘the office mentality and extra value given to it’ over the past 3 decades.

We are seeing interesting divides….and those who are starting to get it are questioning almost everything, ie the media, the wars, the printing of money, the excess of politicians etc.

May take time but I think more and more people are wanting a third way that isn’t just voting red/blue because the6 are seeing it’s all just globalist nonsense where no one represents them. 

I guess the battle is being drawn and the government are doing this so 53% benefit ie bennies, public sector and vote for status quo. 🤷🏻‍♂️

 

The problem is it will not stop until total collapse and they take everything from the private sector first.That is where the roadmap says we are going.There is no escape valve due to index linking.The only way they can make changes is push back the state pension age as public sector pensions are tied to it,but for those retired already they wont do anything.Its incredible to think the police precept and council tax can just go up whatever they choose so they can have huge unfunded pensions.Its destroying our society,and its the 2nd biggest driver of our collapse.That and bennies,but in many ways its worse than bennies,because the extra tax on lower paid workers is whats forcing them almost to not bother.

The people running the show of course get the same inflation linked theft,so they have no incentive to change anything.Such is the huge chasm they are also helping their kids jump into houses etc.Nothing wrong with that with their own money,but its not their own,its the money of everyone else working.Labour of course expanded this problem hugely,but they thought inflation would be 1% to 2% etc so people would not notice,but with inflation at 6% average through the cycle they do.If i didn not have the kids i would remove myself and my capital from this country and be gone,but i cannot as i might have to be around to protect them.The only good thing is Labour really created this shitshow,and for the first time ever,they will come in to it all a disaster.It might be we rid ourselves of the Tories and then forever,but likely getting there will be horrific.

[DurhamBorn]

Only last week we mentioned this likely playing out and the Graph are on it.

Its why Sibanye keep the US palladium mine running rather than care and maintenance ,they want the Lithium mine on US subs etc.

https://www.telegraph.co.uk/business/2024/03/09/how-china-crushed-west-power-electric-cars-minerals/

[Harley]

3 hours ago, DurhamBorn said:

Im convinced its to capture back public sector pension increases and also a lot of the state pension increases instead of tackling those issues.The problem is it really hits hard lower paid workers and the NI does not make up for it.I would argue not index linking allowances is the biggest theft of them all,and should be illegal.They have created a disaster with the freeloaders and with present policy they are going to take 40% spending power from the productive and private sector retired

My own circumstances aside, I kind of get it.  TBF, the pensionable is about the only UK growth sector atm so taxes will follow as they always do!  Also the realpolitik of the relatively easy option of taxing the output rather than (doing the right thing of) reforming the input.  But yes, unfair collateral damage (that's what regulation does, expect more of it), although this could be mitigated by appropriate NI changes (indeed it is highly likely this will be the ongoing change, maybe as large in effect as removing the pension dividend credit).  Maybe they should index the NI reductions down rather than the allowance thresholds up!  For me, how upset I'll be depends on the seesaw which atm is firmly stuck with the "fat lady" singing from the NI rather than allowance end!

3 hours ago, DurhamBorn said:

The huge problem we have are allowance freezes

Yep, the above only applies to income tax.  Plenty of others (CGT not even just froze but massively reduced).

3 hours ago, DurhamBorn said:

im working on it.

Me too.  Wack a mole!

Edited March 9 by Harley

[Harley]

1 hour ago, DurhamBorn said:

If i didn not have the kids i would remove myself and my capital from this country and be gone,but i cannot as i might have to be around to protect them.

Maybe the best way to protect them is indeed to go overseas and create a base so they have some (better) optionality.

PS: Still a few seats left for the moving to Portugal seminar in London on the 14 March (run by the Portuguese Chamber of Commerce, booking via Eventbrite).

 

Edited March 9 by Harley

[Harley]

1 hour ago, DurhamBorn said:

Only last week we mentioned this likely playing out and the Graph are on it.

Its why Sibanye keep the US palladium mine running rather than care and maintenance ,they want the Lithium mine on US subs etc.

https://www.telegraph.co.uk/business/2024/03/09/how-china-crushed-west-power-electric-cars-minerals/

I hear China moved into the Afgan lithium mines shortly after the US left.  Plenty about it on the net.

[sancho panza]

14 hours ago, Funn3r said:

I try to keep up in this thread and don't ask for spoon feeding, honestly, but have lost it on this one. Could you help me along a bit what does this mean?

based on the system used for assessing neuro impairments in patients.gcs is scored ebtween 3 and 15-15 where we are,3 is dead/unresponsive.

I assess share chart,balance sheet,income statement,free cash flwo and the secotr its in.

all are scorred between 1 and 5.5 being the strongest,1 being weekest.lowest coma csore you can get is 5 highest 25.the scores are given on the absis of set levels but there is some leeeway for movement on my assessment if there's-for instance-potential upside due to forex.but mainly it's pretty mathematical.

only used with 'spray and pary' investing ie buying little holdings in a range of companies acorss a sector,but effectievvly its a valeu guide.25 is good valeu for what it is ,5 bad value.

no use with explorecos or small compnaies .

17 and above is my general buying level.but balance sheet is graded using yellow when goodwill is over 50% of equity and red for >75%.

 

hope thats of some help,.please feel free to ask .I have in the past run the coam ascores through a whole sector but it takes time as you can iamgine

[sancho panza]

5 hours ago, ThoughtCriminal said:

@sancho panzaHave you looked at Yara lately? They're the lowest they've been for five years. 

yeah we've got a 1.4% psotion at $16.over last 6 months.prev trade was $16-$27.also bought nutrien back at $50 after previosuly selling $50-$95 bucks.happy to get them back.also bought SDF back at E12.50 after prev trade E6-E24.

we completely sold up potash but glad to buidling it back up.

one of the biggest mistake we made post coof was only having small potash postion and then watching things like mosaicintrepid 6 bag.i know others eg @DurhamBornwent bigger. we went into oil big time

also bought a 1.5% postion in inctiec pviot.aussie potash.

talking of coma scoring I may run some on these next week to see where we are.potash trades have been the oppostie ofour telcoms trades over last 4 years ie they made money

I did have a look at that that serica you mentioend the otehr day but it looks too small so coma scoring it could give a deceptive reading.

I defer to @Cattle Prod on the oilies and his guidance has been to stick to the big boys in the sctor.

Edited March 9 by sancho panza

[JMD]

20 hours ago, Yadda yadda yadda said:

Kids of the future won't twoc cars, they will create a disturbance and then shoot the first responder drones. Not sure what they will shoot them with but they will find a way to take them down.

Your probably correct there, regarding police 'first responder' drones, recently announced in Hunt's budget.

How about the following unlikely(?) scenario...  In the future this country will probably be operating an even more rediculous immigration policy - so maybe we'll have our own large community of Houthi's, all of them specialists in drone warfare (btw, technology which our liberal judges allowed them to bring in on human rights grounds!) - anyway if Houthi's can mastermind Red Sea shipping blockades, I'm guessing that outwitting PC plod, remotely policing via drone from his home-office, would be a walk in the park.

[JMD]

20 hours ago, Yadda yadda yadda said:

The first kid to joyride a police drone has already been born.

If his name was John Connor (terminator resistance leader) that would be a positive thing. But unfortunately it will probably be Mustafa Bene-Chek.

[Lightly Toasted]

17 hours ago, Funn3r said:

There is something wrong with this. His voice keeps changing. I have no problem with the sentiment but it is expressed in a funny way. At one point about halfway his voice just suddenly drops an octave then picks up again. I can't disagree with much but is he really saying it, is this AI?

Spliced together with silence inserted between each of the (many) takes. I didn't listen to much though, the audio was too distracting.

A competent sound guy would paste studio background noise over any silence-insertions; leaving it as silence sounds horrible.

[Plan-b]

On 08/03/2024 at 08:31, DurhamBorn said:

See,its always in The Titanic story.Its a cycle pressed down into one fateful night.

Here's another Titanic analogy, this time from Dr Tim Morgan on his surplus energy economics site.

[goldbug9999]

9 hours ago, DurhamBorn said:

Im convinced its to capture back public sector pension increases and also a lot of the state pension increases instead of tackling those issues.The problem is it really hits hard lower paid workers and the NI does not make up for it.I would argue not index linking allowances is the biggest theft of them all,and should be illegal.They have created a disaster with the freeloaders and with present policy they are going to take 40% spending power from the productive and private sector retired.Its hardly talked about,but the gilt hit was the biggest theft of saved labour in history,yet ignored.what really worries me is my kids and grandkids.They would not be able to stay ahead of all this.I know Osborne isnt liked on here,but i think he did a very good job.Made some mistakes,mostly around housing,but some very good policy.This Tory government has destroyed it all.Labour will likely be as bad.The huge problem we have are allowance freezes,but im working on it.

Public sector pension  indexation effectively insulates the entire civil service against recessions and passes the cost onto everyone else.

[Chewing Grass]

3 minutes ago, goldbug9999 said:

Public sector pension  indexation effectively insulates the entire civil service against recessions and passes the cost onto everyone else.

UniParty Members are More Equal than Others.

[Castlevania]

1 hour ago, goldbug9999 said:

Public sector pension  indexation effectively insulates the entire civil service against recessions and passes the cost onto everyone else.

The thing is when they decided to index everything productivity growth was still a thing. Wages rose above inflation so indexing was cheaper than tieing to wages. The problem is that we hit peak prosperity some 20 odd years ago. We’re all getting poorer but it’s not being evenly spread.

[ThoughtCriminal]

Spurious correlation? Or pieces falling into place and history about to repeat?

 

[King Penda]

10 hours ago, DurhamBorn said:

The problem is it will not stop until total collapse and they take everything from the private sector first.That is where the roadmap says we are going.There is no escape valve due to index linking.The only way they can make changes is push back the state pension age as public sector pensions are tied to it,but for those retired already they wont do anything.Its incredible to think the police precept and council tax can just go up whatever they choose so they can have huge unfunded pensions.Its destroying our society,and its the 2nd biggest driver of our collapse.That and bennies,but in many ways its worse than bennies,because the extra tax on lower paid workers is whats forcing them almost to not bother.

The people running the show of course get the same inflation linked theft,so they have no incentive to change anything.Such is the huge chasm they are also helping their kids jump into houses etc.Nothing wrong with that with their own money,but its not their own,its the money of everyone else working.Labour of course expanded this problem hugely,but they thought inflation would be 1% to 2% etc so people would not notice,but with inflation at 6% average through the cycle they do.If i didn not have the kids i would remove myself and my capital from this country and be gone,but i cannot as i might have to be around to protect them.The only good thing is Labour really created this shitshow,and for the first time ever,they will come in to it all a disaster.It might be we rid ourselves of the Tories and then forever,but likely getting there will be horrific.

Indeed we are fucked . I’m low paid scum the 2 ways I can increase my earnings when the shit hits the fan ie shield myself is find a partner or get a lodger .obviously I’m going to get a lodger and the amount you will get for one is only going one way and that’s up .