Credit deflation and the reflation cycle to come (part 9)

[feed]

1 minute ago, spygirl said:

I like this. Its funny.

ECB will need more rate cuts if Fed holds back, says policymaker

Head of Italy’s central bank highlights risk of US stance pushing up global borrowing costs

https://www.ft.com/content/0112fe8d-856f-43aa-9bbb-c2106b00b5d6

The European Central Bank is likely to need extra interest rate cuts if global borrowing costs are pushed up by the US Federal Reserve maintaining its restrictive monetary policy stance, a top eurozone policymaker has said.

Fabio Panetta, head of Italy’s central bank, said in a speech on Thursday that if the Fed keeps rates on hold longer than markets expect, or even raises them, it would be “likely to reinforce the case for a rate cut [by the ECB] rather than weakening it”.

Been out there a couple of days, surprised no one really commented on it.  Guess no one cares about the ECB.  

Does this mean a reduction in interest rates in June is almost certainly on the cards?

We have been very clear: if things move in the same direction as they have in recent weeks, we will loosen our restrictive monetary policy stance in June. Assuming there are no surprises between now and then, as you say in French, it’s a “fait accompli”.

Interview with Le Monde (europa.eu)

Interview with Luis de Guindos, Vice-President of the ECB, conducted by Éric Albert on 16 April 2024 and published on 23 April 2024

 

 

 

[Harley]

40 minutes ago, Red Debt Redemption said:

Clog it up, I've rellies getting to same age but all they know about is the 25% lump sum as I said about it while they doze off to Netflix not bothering their arse. Didn't know about can take above the £12570 ish as some kind of 25% tax free amount AND a 25% lump sum later?

Cloggy here!

You'd best get that doubled checked.

Drawdown entitles you to an initial 25% tax free payment before receiving the rest as taxable income.  UFPLS entitles you to a series of payments of which 25% of each is tax free.

I'm not sure you can UFPLS and then switch to drawdown and then take the upfront 25% tax free payment, plus probably not the full 25% anyway as you have already taken some tax free.

Btw, I believe the 25% is limited in total to 25% of the (old) LTA regardless, if applicable.

PS:  Personally, I would only take such financial advice over a few sheets of blank paper and a pint!  Even here I've needed two G&Ts! 

Edited April 25 by Harley

[Harley]

29 minutes ago, spygirl said:

Fabio Panetta, head of Italy’s central bank, said in a speech on Thursday that if the Fed keeps rates on hold longer than markets expect, or even raises them, it would be “likely to reinforce the case for a rate cut [by the ECB] rather than weakening it”.

'"Oh, that was easy," says Man, and for an encore goes on to prove that black is white and gets himself killed on the next zebra crossing'.  HGTTG.

[moneyscam]

33 minutes ago, ThoughtCriminal said:

Good double post from Kathleen Tyson spelling out the implications of expropriating Russian assets. Consensus amongst US and aligned is that it's no big deal. The complacency is shocking.

 

Why am I not surprised an MIT professor would say something as stupid and hubristic as 'so what?'

Apart from trashing your reputation as a safe haven to store assets and the international reserve system established in 1922 , two can play at this game. The Russians played the long game here - they knew they were never going to see those assets again but wouldn't / couldn't reciprocate whilst they were frozen. Now they have been officially stolen they have the necessary cover to do the same to the West.

The tit for tat asset swapping here though is not as significant long term as the trashing of the reserve system IMO - we're back to the return of capital being more important than the return on capital and an acceleration of the building of an alternative global system of trade and finance outside the control of the West.

[CannonFodder]

52 minutes ago, ThoughtCriminal said:

Good double post from Kathleen Tyson spelling out the implications of expropriating Russian assets. Consensus amongst US and aligned is that it's no big deal. The complacency is shocking.

 

The bit that gets me is they vote to give weapons to Taiwan, seize russian assets then Blinken and Yellen fly to China to beg Chinese to buy USTs.

It's so out of touch.

[DurhamBorn]

1 hour ago, Bobthebuilder said:

Thank you for the reply DB, I don't want to clog the thread up, but I presume this withdrawal would be once a year rather than say monthly?

Il do a full years on my 55th birthday or the day after,then likely do them every 4 months from the following April in the next tax year.

[CannonFodder]

36 minutes ago, moneyscam said:

Why am I not surprised an MIT professor would say something as stupid and hubristic as 'so what?'

Apart from trashing your reputation as a safe haven to store assets and the international reserve system established in 1922 , two can play at this game. The Russians played the long game here - they knew they were never going to see those assets again but wouldn't / couldn't reciprocate whilst they were frozen. Now they have been officially stolen they have the necessary cover to do the same to the West.

The tit for tat asset swapping here though is not as significant long term as the trashing of the reserve system IMO - we're back to the return of capital being more important than the return on capital and an acceleration of the building of an alternative global system of trade and finance outside the control of the West.

Guess that's my Gazprom finally gone.

Perhaps I should just have gone to Moscow afterall to Gazprom offices lol.

Don't blame Vlad for that, just our idiot leaders.

Not only is it tit for tat, it's 288 billion unfrozen which will pay for a few years of the Russian defence budget.

[Pip321]

50 minutes ago, CannonFodder said:

Guess that's my Gazprom finally gone.

Perhaps I should just have gone to Moscow afterall to Gazprom offices lol.

Don't blame Vlad for that, just our idiot leaders.

Not only is it tit for tat, it's 288 billion unfrozen which will pay for a few years of the Russian defence budget.

Anyone seen my Poly.?

 

[wherebee]

3 hours ago, ThoughtCriminal said:

Good double post from Kathleen Tyson spelling out the implications of expropriating Russian assets. Consensus amongst US and aligned is that it's no big deal. The complacency is shocking.

 

I know through friends of friends some people who are involved in that level of gvt planning, etc.  I can see from their LINKEDIN posts that they think the seizure of russian assets is fine, long overdue.  There is NO thinking about the negatives and what it means for western wealth long term.

These are people you will see appointed to top government roles, board of public organisations, etc.

 

fucking clown world.

[MrPin]

2 hours ago, Pip321 said:

Anyone seen my Poly.?

 

It's due to the downsizing of the Royal Navy. I'm shorting canonballs, telescopes, and gin.

[Jay]

8 hours ago, CannonFodder said:

Guess that's my Gazprom finally gone.

Perhaps I should just have gone to Moscow afterall to Gazprom offices lol.

Don't blame Vlad for that, just our idiot leaders.

Not only is it tit for tat, it's 288 billion unfrozen which will pay for a few years of the Russian defence budget.

The Russian maybe the latest….return of capital and counter party risk..I have lost investments and loans to private individuals and businesses in Europe, Asia and the U.S..ok not surprising as it happens..but I have had investments appropriated or reneged or just stolen by government entities in Asia Middle East and in France..that was a bit of a shocker and pre 2020..

I have lost a decade of time and wealth and fortunately when I was young..the kicker is I am still a trusting stupid di*k..what’s that about good times create…

why am I going on about this..just to provide a real life example of what’s possible…Cyprus has done it, Canada has threatened it and the US has done it..developed nations..

Db and other posters gone on about that in the uk, workers will be made to pay for the non productive..I fully agree along with asset holders..

the uk state is coming for your assets in one form or another..way worse..be aware, be planned and be lucky..quite sad I as still believe in the integrity of the uk state institutions..

counter party risk exists at all levels, trust no one..protect and preserve your capital..stories about Russia stealing assets is a story that will grow and in the meantime your assets will be diminished..

gold really is an insurance policy..but even that..

I hope that the Russians leave poly alone..

[Harley]

10 hours ago, DurhamBorn said:

Il do a full years on my 55th birthday or the day after,then likely do them every 4 months from the following April in the next tax year.

.

Edited April 26 by Harley

[dnb24]

7 hours ago, wherebee said:

I know through friends of friends some people who are involved in that level of gvt planning, etc.  I can see from their LINKEDIN posts that they think the seizure of russian assets is fine, long overdue.  There is NO thinking about the negatives and what it means for western wealth long term.

These are people you will see appointed to top government roles, board of public organisations, etc.

 

fucking clown world.

Biggest lesson I learnt from covid- the supposedly top brains in the working world- banking/medicine/education all went mental and could not think of how current actions after future outcomes. 

[MrXxxx]

18 hours ago, MrXxxx said:

Agree, but this is as a result of AAL portfolio issues i.e. major holding by SA govt pension so they are unlikely to vote against their own interests, DeBeers link to Botswantan govt etc...these are the factors that BHP insist are 'sorted' prior to deal. That said, if AAL could get them sorted fairly quickly other miners i.e. Rio, Glen may be interested in making a counter offer and this could then change the valuation upwards.

AAL now rejected BHP offer, basically saying BHP were taking the pi$$....I agree!

[Alifelessbinary]

10 hours ago, moneyscam said:

.

What’s shocking in the pie chart is how little assets sit with the US on both sides. As ever they’ve instigated a strategy which has massive impact on the vassal states, while they have limited skin in the game. Where they may have miscalculated is the destruction of trust in the dollar moving forward. While Russia will continue as a commodities super power the rest of the economy will be blighted.

It’s surprising how many Russian assets sit in Cyprus. I imagine these belong to Russian nationals who have benefited from the Cypriot golden visa programme, so they are really just repatriating them back to Russia.

I don’t believe this is a good move for any nation, as it will only benefit the ruling elite. 

If I get through the next 10 years beating inflation, avoiding GDP currency debasing and dodging 3rd party risk then it will be a minor miracle.

[Pip321]

Abdn pays its Divi in a few days….of course nothing to do with going ex dividend but I thought at 136p it might dip a little further almost on a physiological viewpoint as investors see the divi land and it reminds them to perhaps then sell and trade

Well there are many well researched trading theories, methods, analysis structures and physiological principals, and just for the record….this one of mine is shit and didn’t work  😆😆

I think I might buy an extra ladder of BT instead and try get a 6/7% nudge up trade…..that’s doing shit and I like shit.

Could be worse…I could have bought Superdry.🤦🏻‍♂️

[DurhamBorn]

1 minute ago, Alifelessbinary said:

What’s shocking in the pie chart is how little assets sit with the US on both sides. As ever they’ve instigated a strategy which has massive impact on the vassal states, while they have limited skin in the game. Where they may have miscalculated is the destruction of trust in the dollar moving forward. While Russia will continue as a commodities super power the rest of the economy will be blighted.

It’s surprising how many Russian assets sit in Cyprus. I imagine these belong to Russian nationals who have benefited from the Cypriot golden visa programme, so they are really just repatriating them back to Russia.

I don’t believe this is a good move for any nation, as it will only benefit the ruling elite. 

If I get through the next 10 years beating inflation, avoiding GDP currency debasing and dodging 3rd party risk then it will be a minor miracle.

Iv come to the full conclusion that what is driving the collapse of the west is the inflation protecting of the polos,elites and the whole government set up.They lose nothing (until the end,then they lose everything) from their hubris but gain.UK car production fell 27% mostly due to lunatic net zero policy,yet that will not make any difference to those civil servants or their handlers.They will be glad of less traffic.The amount of theft is incredible.Or in macro terms saved labour transfers.Its not current labour/work taxation anymore,thats past its limit and cannot fund anywhere near the costs.They are taking savings through huge financial repression,and i think we will see them change to "an average inflation target" so they can keep real rates negative.

Still we will keep fighting,we are at war ,but at least we know their battle plans.

 

[headrow]

31 minutes ago, Pip321 said:

Abdn pays its Divi in a few days….of course nothing to do with going ex dividend but I thought at 136p it might dip a little further almost on a physiological viewpoint as investors see the divi land and it reminds them to perhaps then sell and trade

Well there are many well researched trading theories, methods, analysis structures and physiological principals, and just for the record….this one of mine is shit and didn’t work  😆😆

I think I might buy an extra ladder of BT instead and try get a 6/7% nudge up trade…..that’s doing shit and I like shit.

Could be worse…I could have bought Superdry.🤦🏻‍♂️

Superdry was toast when middle aged people starting wearing their gear

[DurhamBorn]

29 minutes ago, Pip321 said:

Abdn pays its Divi in a few days….of course nothing to do with going ex dividend but I thought at 136p it might dip a little further almost on a physiological viewpoint as investors see the divi land and it reminds them to perhaps then sell and trade

Well there are many well researched trading theories, methods, analysis structures and physiological principals, and just for the record….this one of mine is shit and didn’t work  😆😆

I think I might buy an extra ladder of BT instead and try get a 6/7% nudge up trade…..that’s doing shit and I like shit.

Could be worse…I could have bought Superdry.🤦🏻‍♂️

10.5% outperformance of the mystical S&P 500 since @Mandalorian refused my bet.I knew i should of said a week instead of 3 years   .

There is chatter BT might cut the divi to speed up fiber rollout as VOD has given them the cover.The shares would likely be hit if they did,the flip side is if they dont (they have no reason to on the balance sheet) and they move to offering mid term guidance instead of short term they should move higher.I think they are worth £2.50,but how and when we ge there i dont know.Labour government is also a worry.

[Yellow_Reduced_Sticker]

42 minutes ago, Pip321 said:

Abdn pays its Divi in a few days….of course nothing to do with going ex dividend but I thought at 136p it might dip a little further almost on a physiological viewpoint as investors see the divi land and it reminds them to perhaps then sell and trade

Well there are many well researched trading theories, methods, analysis structures and physiological principals, and just for the record….this one of mine is shit and didn’t work  😆😆

I think I might buy an extra ladder of BT instead and try get a 6/7% nudge up trade…..that’s doing shit and I like shit.

Could be worse…I could have bought Superdry.🤦🏻‍♂️

ffs its 1.47 this morning!

theres us TIGHTWADS thinking we can slip in and pick some up at 10% discout to DB recent buying price lol!

ah well,i'm off to carry on with my gardning wearing my tall hat with a capital D on it!

btw, rumour has it @MrXxxx has recently bought Superdry

Edited April 26 by Yellow_Reduced_Sticker
.

[sancho panza]

17 hours ago, SpectrumFX said:

They brought in the £9k fee back in 2012, and they were suddenly all flush. They then spent years having a big party, pissing it all up the wall on fancy white elephant buildings and other frippery.

And then the vice started to close.

The fee isn't indexed. Every year the costs go up, but the income doesn't. The response from pretty much every university was a plan to grow their way out of trouble. In practice that's led to massive over capacity in the sector. There are a number of institutions now doing the Wiley Coyote thing where they've gone off the cliff, but haven't noticed yet.

Coventry Uni is a classic case.Used to have loads of factories in and around the inner ring.Now it's virtually all Uni accomodation and new buildings.

It was all based on ever rising student numbers and income.First sign of a downturn in UK taxpayers willingness to fund the ponzi and some of them will go pop.

Here's some data from Cumbria,a marginal player-TLDR -key take home doemstic student numbers dropping& costs rising particualrly where the Uni has inflation linked contracts in place..... which is all confirming the direction of travel as Spectrum outlined.

Quite if/when it bites,who  knows..?

https://www.cumbria.ac.uk/media/Annual-Report--Financial-Statements-2022_23-FINAL.pdf

Page 11-Income
The University’s income has increased by 24% across the last five years, with overall income
growth this year of £3.3m (4.7%) compared to 2021/22

While apprenticeship delivery has continued to expand, and international student
recruitment grew, full-time home student intakes in 2022/23 were lower than the prior two
years.

Expenditure
The University’s costs rose significantly in 2022/23, with the key increase seen within
operational staff costs, which increased by £3.9m (9%) and operational non-staff
expenditure, which saw a £1.2m (6%) rise. After a period of historically low inflation,
2022/23 saw pressure on the cost base

Aside from staffing, most areas of the University saw rises in operational costs. This was
particularly acute in Estates and IT where many contracts rose by inflation linked escalators
and utility costs increased at a steeper rate, with, for example, electricity outlays increasing
by 36% to £0.9m.

15 hours ago, Pip321 said:

They have monetised education….money just swishing around not adding value but increasing the GDP. Lecturers, light bulbs, books, student loans, fees etc etc all generating paper money and tax thereon albeit at a cost. 

Thats why they want everyone to have a degree even just for a basic analyst job which could be done on an old style apprenticeship. Even nursing etc could all be done to degree standard but on the job….but they want to make everyone battery hens.

The students leave with debts so have to work for life…it’s a fantastic scam. It even manages to gather back some of the printing by collecting in in tax and spending by all involved. 

@spygirl has had some excellent rants on the issue ,suggesting they link Unis to their students employability at the end iirc.

QUite how they get to rinse taxpayers for £50k (bills in) for a histroy degree I'll never know.but what I do know is that it isnt sustainable.

worked the otehr night with a girl who's got £80k of debt for paramedic degree......earning £27k ffs.....

 

1 hour ago, dnb24 said:

Biggest lesson I learnt from covid- the supposedly top brains in the working world- banking/medicine/education all went mental and could not think of how current actions after future outcomes. 

it was shocking the way we let ourselves be led into lockdowns by a Prof of Physics.I can give out more durgs thna him ffs.

at the same time we ingored world renowned Profs of Medicine saying it would have the fatality rate of flu.

when the dust settles and all the egos that led us into lockdown have left politics,they will study the psychology of it for centuries.

it goes to show that some things eg mass psychosis are eternal and the risk of them never fades no matter how much we educate ourselves.

Edited April 26 by sancho panza

[belfastchild]

14 hours ago, Bobthebuilder said:

WE must have a similar birthday I had the 6 month to go email the other week. At the moment I would like to just withdraw divis on a regular basis not go into drawdown. I must look into all this, time is fast approaching.

 

14 hours ago, Harley said:

Terrible compared to the others.  Not a fan of AJB based on personal experience.  Also far better (and up to a point tax free) rates outside the tax wrapper.

This highlights the need for planning (as I mentioned upthread today) if you want to minimise tax later on.   

However, it's also important to appreciate the unique risks arising once gone into drawdown

Yes, my plan is to take the tax free amount only. I only started the pension 5 years ago so tax free amount is only about 20k. Current plan is for that to go straight into one of my isas. I have a cash isa renewing about the same time paying 4% but the AJB s+s isa isnt paying very well. Ive been transferring from that into the pension to mostly cash over the last year just for the tax free figure, although the oilies I bought in Dec 2019 were headlined for that (up 100% and 70% not including divis at the minute).

Im not planning to take anything else out of it. The original plan was set up when mpaa was the 3k odds and tax thresholds were rising. I ordered a new car 'for the business' last year before they raised the mpaa threshold and locked in allowances so thats sort of fecked that original plan rightly. As mentioned before it was just to use the interest/divis from the various isas tax free and when my residual income drops down below the threshold to top it up with drawdowns from the sipp. I mention the car as that was going to be my tax write off but I didnt look before ordering that the writedown is now only 6% per annum instead of the 20-25% I had original thought ;-) Still, could have bought an electric car at 100% write down but I would have needed my head read to do that!

The current plan is just to take the tax free amount, transfer it to one of the isas and then start taking a small income from that (or use the 5k interest free allowance and keep it out of a tax wrapper). Ive reduced my premium bonds holding from 50k down to around 33k now with no plans to bump that back up again.

I get a fixed non-index linked pension from my other one, which was only one of two options available at the time, although the tax free lump sump was a no brainer at the time. It was a pension I never thought I would see (years of legal wrangles) so Id made arrangements outside of it. Who knows, maybe they will change the rules in future so I can get access to the pot. Thats a lot of money the government can get VAT, premium tax, rates and all sorts from.

[RupertT]

36 minutes ago, DurhamBorn said:

10.5% outperformance of the mystical S&P 500 since @Mandalorian refused my bet.I knew i should of said a week instead of 3 years   .

There is chatter BT might cut the divi to speed up fiber rollout as VOD has given them the cover.The shares would likely be hit if they did,the flip side is if they dont (they have no reason to on the balance sheet) and they move to offering mid term guidance instead of short term they should move higher.I think they are worth £2.50,but how and when we ge there i dont know.Labour government is also a worry.

I see alphabet/Google announced it's first ever divi yesterday.  I assume Mandalorian will be dumping them now that they clearly have nothing better to do with the cash. 

[MrXxxx]

46 minutes ago, Yellow_Reduced_Sticker said:

ffs its 1.47 this morning!

theres us TIGHTWADS thinking we can slip in and pick some up at 10% discout to DB recent buying price lol!

ah well,i'm off to carry on with my gardning wearing my tall hat with a capital D on it!

btw, rumour has it @MrXxxx has recently bought Superdry

Cheeky bugger!...prices do the opposite when I buy...just call me Mr 'Buffet' Xxxx.

[sancho panza]

49 minutes ago, DurhamBorn said:

Iv come to the full conclusion that what is driving the collapse of the west is the inflation protecting of the polos,elites and the whole government set up.They lose nothing (until the end,then they lose everything) from their hubris but gain.UK car production fell 27% mostly due to lunatic net zero policy,yet that will not make any difference to those civil servants or their handlers.They will be glad of less traffic.The amount of theft is incredible.Or in macro terms saved labour transfers.Its not current labour/work taxation anymore,thats past its limit and cannot fund anywhere near the costs.They are taking savings through huge financial repression,and i think we will see them change to "an average inflation target" so they can keep real rates negative.

Still we will keep fighting,we are at war ,but at least we know their battle plans.

 

you've madea  series of compelling arguments to support that thesis DB.I'm a watcher here and much as the posts themselves inform,so does the frequecny and tone in which they are made.

if we went back to early 22 and 2021,there was little talk of coallpse but as policy arror has compounded policy error,I've noticed the SME's in their fields get collectively more gloomy about the outcome.

the west is headed directionally inot a seismic crash and is possibly about to reach a velocity where it cant pull back from the impact.

I saw an old buddy the other night.he was bemoaning the state of Brimingham(he grew up in a serious sh1thole bit of it and it's got even worse with the enrichment thats followed).bags of rubbish and rats all over.he was also telling me about his mate's kid who has blagged an English degree without any GCSE's( don't ask).He was incredulous that a Uni wouldnt carry out some basci checks but the kid got £50k in loans he wont be paying back.

insto decay if ever I heard it @ThoughtCriminal

reading that psot above about real rates staying negative jsut made me think I might actually hang onto some of our goldies.

intetresting to newmont getting bid heavily last night.we're now nearly in the green on that.is that the insto money arriving?