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

[leonardratso]

well international paper fucked it up so looks like we will see DS smith move in lockstep with IPs share price since the deal is all share based, DS be back at pre-deal price soon, both down 4-5% this morning.

[SpectrumFX]

7 minutes ago, sancho panza said:

the maths stinks.I think youve done well to get out there.

I was very pleased with myself at the time.

A big part of my thinking was that the USS has an inflation cap (the council scheme doesn't). An issue with CARE schemes that nobody talks about is that because they build a balance each year and index it, you're exposed to indexation risk while you're working, not just after you retire as it was with the old final salary schemes. 

What are the odds of getting a couple of periods of double digit inflation to wipe you out over a 60 odd year period? To me, with all the money printing going on, it felt like playing russian roulette with an automatic.

 

[Long time lurking]

The sugar rush last week did not last long 

[Onsamui]

Banks Wage War On Gun Ownership | Armstrong Economics Governments can view your transactions. Banks globally are voluntarily providing your personal data to the government, but soon, there will be no need for a middleman through the use of CBDC as the governments can track your transactions and debank you in real time.

[JMD]

3 hours ago, Democorruptcy said:

Might need to print a few quid for all those lumpy lump sums.

Not necessarily. How about maintaining the employee lump sum future benefit - but instead of cash, 'paying' the recipient in perpetual government bonds! Could backfire I guess, then again the devil would be in the details of the perpetual contract (and of course customers never read the contract)?!

Must say this thought experiment in finding potential ways in which to cut the cost of government unfunded bloated ponzi obligations is quiet fun! 

Edited April 25 by JMD

[HousePriceMania]

Nope, it's the UK bond yield.

[Harley]

1 hour ago, sancho panza said:

4 hours ago, kibuc said:

For now, they struggle to grant proper access even to markets that they seemingly have on offer.

Just last week I learned the hard way that Impact and Defiance both became "sell only" on II and won't be available for bid anymore. And I moved to II from HL last year mostly because pickings were even slimmer there - 1 in 3 names I was interested in at most.

Expand  

you should try Interactive brokers.I have one ISA with them so far and they seem pretty good.If they cant get you what you want then it can't be done I suspect.

@Harley also uses them iirc.

Yes, generally the best, especially for forex charges which you can't avoid in any ISA, but they do have their quirks on some eligibilities.  Like no short ETFs.  Tbh, each ISA provider has different interpretations of the rules but IB has the greatest market access.  You could even buy shares on the Moscow exchange!  We still hold some!

Edited April 25 by Harley

[Harley]

2 hours ago, sancho panza said:

the uni pension scheme looks like it needs constant new entrants to keep it solvent

But where did all the cash from those massive increases in tuition fees go?!

[DurhamBorn]

42 minutes ago, leonardratso said:

well international paper fucked it up so looks like we will see DS smith move in lockstep with IPs share price since the deal is all share based, DS be back at pre-deal price soon, both down 4-5% this morning.

I sold them on the IP bid,glad i did now,i did not like the all share offer.Mind you iv just put the last third of it into Sibanye ,full loaded in them now.

Im tempted to buy some back though as shareholders might reject the bid yet and then back in play.

[Harley]

2 hours ago, kibuc said:

Cheers. I was surprised to see they're offering SIPPs, must have changed recently, as I remember researching them before my move to II and the lack of SIPP was a major factor.

I opened a trial account with them this morning to get the feel for them. Interesting that they offer AIM-listed Serabi Gold only through Toronto in CAD and Frankfurt in EUR but not London. Impact and Defiance are present, but no Discovery Metals? I guess every broker has to have its quirks

Regarding B2G, they are facing serious cost overrun at Back River. They have already upped their projected construction capex by a handsome 250mil canadian and they pre-sold $500mil of their 2025-26 gold production for around $2200/oz to fund that. Nevertheless, they look cheap IF their construction woes are over and they hit their 2025 guidance (2024 is quite a drop frop from previous years), but it's not my cup of tea anyway due to size.

If you need any support......

I recommend their trading mobile app.

That SIPP thing is new.

Update:  Nah, same old, you need to use a separate administrator...

"To access a wide range of eligible financial investments, go through any SIPP Administrator, which is our client and is authorised and regulated. See the list of SIPP Administrators".

Edited April 25 by Harley

[DurhamBorn]

Looking at the US numbers,CBs including the Fed will need to move to Average Inflation Targets i suspect.Lets see if they start getting it out there with the nudge units.They need AIT to make sure financial repression is locked in.Rocket fuel to the metals once the dust settles.

"we are aiming for an average inflation target of 2% over the cycle"  its coming i think.

[Onsamui]

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[ThoughtCriminal]

Looks like stagflation is here.

 

 

[Harley]

4 minutes ago, DurhamBorn said:

"we are aiming for an average inflation target of 2% over the cycle"  its coming i think.

Reminds me, how is Gordon doing these days?

[Harley]

1 hour ago, ThoughtCriminal said:

Looks like stagflation is here.

 

 

Been the case for a while if you dyor!

The beaute is higher real than reported inflation works to both jimmy gdp (so lower than reported - stag) and reduces the 'flation out of stagflation.

Things are really bad by the time these mystery numbers show it!

Edited April 25 by Harley

[Onsamui]

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[ThoughtCriminal]

4 minutes ago, Harley said:

Been the case for a while if you dyor!

I know it felt like stagflation, but did the data show it previously? This seems more categorical.

[Harley]

Been poorly lately so been doing portfolio construction work.  PP, backtesting, and all that.  Was listening to a financial advisors podcast by Lance's RIA and the penny dropped.  Gotta look at it more from a tax efficiency pov when retired or have little employment income.  It's as much about maximising cash flows as it is about investment performance.  Not that the tax tail should wag the investment dog but more options to learn about and assess. 

Edited April 25 by Harley

[Harley]

7 minutes ago, ThoughtCriminal said:

I know it felt like stagflation, but did the data show it previously? This seems more categorical.

I have a habit of updating/completing my posts (due to previously losing too many prior to posting!) so addressed that particular point on an update.  Bottom line, by the time it shows, indeed it really is "categorical"!

[BurntBread]

34 minutes ago, Harley said:

But where did all the cash from those massive increases in tuition fees go?!

Where did all the money go that came from selling debt to minors as though it were sweeties?

(1) Building flashy new departments and student accommodation (which also required the universities to take on large amounts of debt). In the case of Nottingham, the flashy new "net-zero" wooden chemistry department had to be built twice, as it burned to the ground the first time around.

(2) Paying the salaries of an increasing army of new administrators, plus paying vice-chancellors six-figure salaries (because they are now equivalent to entrepreneurs and private-sector captains of industry). However, probably most of the money went on large numbers of lower-paid people.

Anyway, that's my impression from the outside, but as someone who does have contact with a couple of universities.

[DurhamBorn]

49 minutes ago, Harley said:

But where did all the cash from those massive increases in tuition fees go?!

seeking.com 

[Harley]

16 minutes ago, BurntBread said:

Where did all the money go that came from selling debt to minors as though it were sweeties?

(1) Building flashy new departments and student accommodation (which also required the universities to take on large amounts of debt). In the case of Nottingham, the flashy new "net-zero" wooden chemistry department had to be built twice, as it burned to the ground the first time around.

(2) Paying the salaries of an increasing army of new administrators, plus paying vice-chancellors six-figure salaries (because they are now equivalent to entrepreneurs and private-sector captains of industry). However, probably most of the money went on large numbers of lower-paid people.

Anyway, that's my impression from the outside, but as someone who does have contact with a couple of universities.

I'd say "go woke, go broke" except given they managed to wrangle the new fees maybe they can get a bailout too.

[SpectrumFX]

6 minutes ago, BurntBread said:

Where did all the money go that came from selling debt to minors as though it were sweeties?

(1) Building flashy new departments and student accommodation (which also required the universities to take on large amounts of debt). In the case of Nottingham, the flashy new "net-zero" wooden chemistry department had to be built twice, as it burned to the ground the first time around.

(2) Paying the salaries of an increasing army of new administrators, plus paying vice-chancellors six-figure salaries (because they are now equivalent to entrepreneurs and private-sector captains of industry). However, probably most of the money went on large numbers of lower-paid people.

Anyway, that's my impression from the outside, but as someone who does have contact with a couple of universities.

The university sector is hilarious.

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.

[Harley]

10 minutes ago, DurhamBorn said:

seeking.com 

Guys, man down, Big Boy's been hacked!

[Harley]

1 minute ago, SpectrumFX said:

The university sector is hilarious.

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.

£9k was meant to be the upper limit, for the real best ones!

TLDR: become a plumber!