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

[AWW]

2 hours ago, M S E Refugee said:

 

He is beloved by some pretty rancid characters.

I put Gary Stevenson in the useful idiot category.

 

He's made a lot of money at the expense of others and feels very, very guilty about it. He's just another champagne socialist. He was a socialist when he was poor (because why wouldn't you be) and he's a socialist now that he's very rich (because even after paying a bit more tax, he's still very rich).

Ordinary working people who aren't very rich and who are very much impacted by paying more tax to give to people who don't work don't have time to make YouTube videos about it and, even if they did, would simply be ridiculed by cunts like O'Brien.

1 minute ago, spygirl said:

You will.

But they wont be Oxford types., as implied by Gazza.

No, they're all Russian and Chinese.

[AWW]

That's what you get when the state decides that teaching proper maths that a lot of people struggle with because it is taught badly, not because it is inherently hard, is elitist, so let's not bother.

[Virgil Caine]

1 hour ago, AWW said:

He's made a lot of money at the expense of others and feels very, very guilty about it. He's just another champagne socialist. He was a socialist when he was poor (because why wouldn't you be) and he's a socialist now that he's very rich (because even after paying a bit more tax, he's still very rich).

Ordinary working people who aren't very rich and who are very much impacted by paying more tax to give to people who don't work don't have time to make YouTube videos about it and, even if they did, would simply be ridiculed by cunts like O'Brien.

No, they're all Russian and Chinese.

Not only did he make a lot of money at the expense of others but he did at a time when the taxpaying public was basically underwriting most of his trades. He could not lose unless he was an utter idiot which clearly he is not. It should be noted this happened in an era when the government was taking an ever rising amount of ordinary workers pay in taxes.

Edited May 1 by Virgil Caine

[Harley]

On 29/04/2024 at 18:21, DurhamBorn said:

If i could i would probably own 15 or so of the stocks in there direct and not bother,but i cannot access most of them.I think its problem is it sells winners and buys falling knives over and over BUT that is turned on its head when the macro lifts all the boats.Its a very easy way for UK retail investors to access EM inflation loving stocks as well without over thinking it.Likely needs the dollar to turn to advance much from here below £11 was the easy buying area.

I took a deeper dive.  It highlights the importance of doing so when comparing ETFs.  I compared it against a similar dividend focussed ETF (HDEM) and another distribution ETF but not focussed on dividends (EMGU) using JustETF.com:

. Yields: SEDY (7.68%), EMGU (2.33%), HDEM (6.10%).

. Holdings: SEDY (104), EMGU (3,130), HDEM (98).

. 5Yr Return/Risk: SEDY (0.01), EMGU (0.21), HDEM (0.11).

. 3Yr Return/Risk: SEDY (-0.05), EMGU (-0.10), HDEM (0.19).

. 1Yr Retrun/Risk:  SEDY (1.47), EMGU (0.89). HDEM (0.57).

So why?

Pretty obvious (or as expected) but essentially a bet in favour of Brazil over China and basic materials over financials and technology, something which has worked in the last year.  Per my opening comment.

Key to understanding ETFs is to understand the indices they are based upon.  Each uses a different index.  The underlying index is something JustETF.com covers very well (in summary, detail, and search).

Of course(!) no analysis would be complete without looking at a pure cap weighted accumulation fund like EMIM with a 5yr, 3Yr, and 1Yr  Return/Risk ratio of 0.21, -0.09, and 0.95 respectively.  A bit inconclusive.  EM ETFs seem the worst when it comes to having a more common definition/set of underlying indicies.  Caveat Emptor or (wow!) hold more than one for a bit of diversification in the EM space?  Or hold a regionally/sectorally broad ETF and trade the country ETFs?

In summary (note the two iShares core MSCI ETFs perform the same once dividends are included in the distributing version):

Will SEDY catch up?

Credits: JustETF.com (not paid but am a fan!).

PS:  Off to run in the new quad (more appropriate than a tractor), complete with sponsor stickers: GIGB, GDGB, GLEN, SILG, ENG, NOS, CARP, NHY, and GJGB!  Per that bloke, I left some change on the table and now it's gone!!!!!

Edited May 1 by Harley

[Libspero]

49 minutes ago, ThoughtCriminal said:

All of those entities are processing transactions banned under paragraph c. The US government KNOWS they are. This is just turning a blind eye to it.

If the original wording banned transactions,   and the new wording bans transactions.. I'm not sure how this represents an easing of sanctions or turning a blind eye?   

Not perhaps that it matters,  I thought it was worth pointing out the original text of the amendment without the suggested motives and context inferred by the Twitter user.

[spygirl]

19 minutes ago, AWW said:

He's made a lot of money at the expense of others and feels very, very guilty about it. He's just another champagne socialist. He was a socialist when he was poor (because why wouldn't you be) and he's a socialist now that he's very rich (because even after paying a bit more tax, he's still very rich).

Ordinary working people who aren't very rich and who are very much impacted by paying more tax to give to people who don't work don't have time to make YouTube videos about it and, even if they did, would simply be ridiculed by cunts like O'Brien.

No, they're all Russian and Chinese.

Well, some.

And there wont be many of those nationality at the mo.

An OXford type is usually some chinless posh moron doing PPE.

The City has been technical/meritocracy pretty much since big bang.

Its now getting more n automated - see Jane Street on making money these day.

https://www.efinancialcareers.co.uk/news/jane-street-still-expanding-fast-as-the-average-employee-makes-1m-in-profit

 

 

[spygirl]

14 minutes ago, Virgil Caine said:

Not only did he make a lot of money at the expense of others but he did at a time when the taxpaying public was basically underwriting most of his trades. He basically could not lose unless he was an utter idiot which clearly he is not. It should be noted this happened in an era when the government was taking an ever rising amount of ordinary workers pay in taxes.

He made money using the firms captital,thats all.

People say that trading is zero sum.

However, done properly, its tends to spread risk and return and liquidity around.

Tradere as some mythical being seem to have taken over open outcry pits as the daft lefties idea of finance.

Its really not.

Just racks of blinking computers.

 

 

[AWW]

30 minutes ago, spygirl said:

Well, some.

And there wont be many of those nationality at the mo.

An OXford type is usually some chinless posh moron doing PPE.

The City has been technical/meritocracy pretty much since big bang.

Its now getting more n automated - see Jane Street on making money these day.

https://www.efinancialcareers.co.uk/news/jane-street-still-expanding-fast-as-the-average-employee-makes-1m-in-profit

You keep making these bald statements about the City spy, but it sounds like you're as far from it as it's possible to be. There are plenty of successful traders who have absolutely no idea about the tech - they pay other people to know that side of things. There are lots of banks that have dumb corporate customers and make a mint simply charging them Thomas Cook spreads on their FX, or by being the only western bank with a licence to operate a particular business in a certain APAC/African/LATAM jurisdiction and therefore charging what they like, or employing traders who bring only connections to the table. If you know that the Egyptian pound is going to get devalued a month before everyone else, you can make a lot of money. None of that requires any technical ability, just connections, a brand name, or a willingness to grease some palms.

There are still plenty of Russians and Chinese coming through the doors, despite the global politics.

JSC is an impressive outfit and their employees earn good money, but there are traders who only being a black book of contacts to the table earning multiples of that, and in some very average banks.

Edited May 1 by AWW
.

[Pip321]

Just back from walking the dog. One for @DurhamBorn to boil his piss.

Spotted a chap getting out of his new (ish) Audi A8, 6 litre car (reg 23)…..he was heading to the OAP palates class at the local community centre.

He was chatting to another old guy in his tracksuit who had just got out of his Tesla (reg 24).

Both about 58/61 years old ish. . 

Heard them chatting about their pension rises this year…..and both ex coppers, I kid you not. I nearly asked for a photo for this thread. 😂😂

And here is us lot thinking the world is in bother…..life has just never been so good.🤢

[spygirl]

7 minutes ago, AWW said:

You keep making these bald statements about the City spy, but it sounds like you're as far from it as it's possible to be. There are plenty of successful traders who have absolutely no idea about the tech - they pay other people to know that side of things. There are lots of banks that have dumb corporate customers and make a mint simply charging them Thomas Cook spreads on their FX, or by being the only western bank with a licence to operate a particular business in a certain APAC/African/LATAM jurisdiction and therefore charging what they like, or employing traders who bring only connections to the table. If you know that the Egyptian pound is going to get devalued a month before everyone else, you can make a lot of money. None of that requires any technical ability, just connections, a brand name, or a willingness to grease some palms.

There are still plenty of Russians and Chinese coming through the doors, despite the global politics.

JSC is an impressive outfit and their employees earn good money, but there are traders who only being a black book of contacts to the table earning multiples of that, and in some very average banks.

Youll be waxing about open outcry next....

All regulation has added transparency and took more n more leverage out of trading.

SW has long driven trading.

Sure, theres a few spaces for humans but the rise of SW platofmratons automation is unstaoppable.

Helped by a disaster every ~5y where a trader will basically blow up an orgs profits for the last ~10y.

In terms of traders and JSC.

Regulators want stuff cleared. and they want rid of of any nontraded/non transparent crap.

JSCV are becoming more n more tha market as days go by. Sure, they are mainly ETF. 

HSC profits cannot be ignored. Sure there might the odd genius - or lucky - trader.

However JSC consistently  produces v large returns.

Traders dont.

 

 

 

 

 

 

[AWW]

3 minutes ago, spygirl said:

Youll be waxing about open outcry next....

All regulation has added transparency and took more n more leverage out of trading.

SW has long driven trading.

Sure, theres a few spaces for humans but the rise of SW platofmratons automation is unstaoppable.

Helped by a disaster every ~5y where a trader will basically blow up an orgs profits for the last ~10y.

In terms of traders and JSC.

Regulators want stuff cleared. and they want rid of of any nontraded/non transparent crap.

JSCV are becoming more n more tha market as days go by. Sure, they are mainly ETF. 

HSC profits cannot be ignored. Sure there might the odd genius - or lucky - trader.

However JSC consistently  produces v large returns.

Traders dont.

I really won't... I'm on the tech side myself.  I've worked on algo trading platforms at T1s, vendors, a hedgie, UK retail banks.

Tech does indeed drive trading, but you totally underestimate the amount of human contact still involved and the ability for very average people with zero tech knowledge to make large sums of money.  They're still on the phone, on IM (e.g. BBG chat), and yes still networking in the pubs, which I'm sure you'll tell us are always empty after Covid.

Believe me, machines make bigger mistakes than human traders.  I've seen auto-hedgers hedging the wrong way.  I've seen massive positions and entire order books erroneously go missing after a platform restart. Guess who recognises those issues and reports them to the tech teams - that's right, those obsolete meatbag traders.

Regulators want a certain thing and the banks are very happy to show the regulators what they want to see. I know of plenty of places where even MiFID 2 isn't properly implemented after, what, 6 years?  Those exemptions (which are usually based on a tech limitation!) are still getting rolled...

[Funn3r]

10 minutes ago, AWW said:

I really won't... I'm on the tech side myself.  I've worked on algo trading platforms at T1s, vendors, a hedgie, UK retail banks.

Tech does indeed drive trading, but you totally underestimate the amount of human contact still involved and the ability for very average people with zero tech knowledge to make large sums of money.  They're still on the phone, on IM (e.g. BBG chat), and yes still networking in the pubs, which I'm sure you'll tell us are always empty after Covid.

Believe me, machines make bigger mistakes than human traders.  I've seen auto-hedgers hedging the wrong way.  I've seen massive positions and entire order books erroneously go missing after a platform restart. Guess who recognises those issues and reports them to the tech teams - that's right, those obsolete meatbag traders.

Regulators want a certain thing and the banks are very happy to show the regulators what they want to see. I know of plenty of places where even MiFID 2 isn't properly implemented after, what, 6 years?  Those exemptions (which are usually based on a tech limitation!) are still getting rolled...

So if you're nothing special in terms of ability but are well-connected then you can get one of these jobs - so what is the real story of this bloke everyone is suddenly talking about? Surely being brought up in poverty in cockneyland he didn't get a valuable black book of contacts?

[Noallegiance]

3 minutes ago, Funn3r said:

So if you're nothing special in terms of ability but are well-connected then you can get one of these jobs - so what is the real story of this bloke everyone is suddenly talking about? Surely being brought up in poverty in cockneyland he didn't get a valuable black book of contacts?

Indeed.

It's like moaning that being black is a problem.

What's the excuse for all the successful black people then?

[AWW]

11 minutes ago, Funn3r said:

So if you're nothing special in terms of ability but are well-connected then you can get one of these jobs - so what is the real story of this bloke everyone is suddenly talking about? Surely being brought up in poverty in cockneyland he didn't get a valuable black book of contacts?

The two aren't mutually exclusive. There are capable people with zero connections who do well, and there are morons with connections who do well.

[reformed nice guy]

5 hours ago, Lightscribe said:

He then veers of saying that capitalism is widening the gulf between rich a poor. It’s not capitalism doing that it’s the state. By edging towards socialism stripping out competitive markets and the restriction of natural growth of companies to bring prosperity (profit sharing, jobs, reinvestment infrastructure) through over taxation to pay for the country’s, public sector and welfare debt.

I think that we are forgetting one very important point.

The word 'capitalism' was invented by Marx and it is used to describe simple human nature. In all the world you found it and it was not a Western thing. The sea faring Polynesians would swap fish for spears, African tribes people swapped gun powder for slaves, Amazonian tribes people would swap parrots for 3g phone services,  the Silk road existed without knowing the word capitalism. It is the natural human state of affairs to swap value for value.

These people moaning about "socialism versus capitalism" are doing a sleight of hand. What they really mean is that rather than stuff being predominantly owned by individuals, they would rather as much as possible was owned by the state and dished out how the state saw fit. The real difference is "privately held capital versus state held capital".

It just so happens that those people would be the ones that decide how the state help capital would be used, so power would be centralised to the political elites.

Sadly we are seeing this today. Policemens pensions depend on state held capital. Motability cars depend on state held capital. Single mums on bennies depend on state held capital. Migrants living off the government tit depend on state held capital.

More and more people are dependent on getting their dole from the state held capital and they are the ground troops to defend it. These people want to keep getting their handouts so they will support the ever increasing force used to defend and grow the state held capital.
Wealth tax needed? If it keeps me getting my pension then yes il support that.
Mass migration? If I think that it keeps me getting my free healthcare then I wont moan.
House prices unaffordable for the young? If it keeps me getting my motability car then they will just need to rent.
Wages are pitiful compared to last generation? I wont make a peep as they might need to take something from me.

The capital never disappears. These people just don't want us to have it. The same people that run councils and buy failing shopping centres want to manage all the capital. The same people that done British Leyland and other fuck ups. The same people that have grown the budget of the NHS faster than its productivity.

 

Edited May 1 by reformed nice guy

[MrFanciful]

ChatGPT's summary of today's GBP 10Year Gilt auction:
 

The results of today's UK 10-year bond auction compared to the previous auction indicate a rise in yield and a drop in bid-to-cover ratio. Here’s a detailed analysis:

Increase in Yield:
Previous Yield: 4.01%
Today's Yield: 4.37%
The yield has increased from 4.01% to 4.37%, which is a significant uptick. This increase suggests that investors are demanding a higher return for investing in UK 10-year bonds, possibly due to perceived increased risk or inflation expectations.

Decrease in Bid-to-Cover Ratio:
Previous Bid-to-Cover: 3.3
Today's Bid-to-Cover: 3.1
The bid-to-cover ratio, which indicates demand by comparing the amount of bids received to the amount of debt offered, has decreased from 3.3 to 3.1. Although this is a slight decrease, it still shows strong demand but indicates a cooling compared to the previous auction.

Implications:
Market Sentiment: The rise in yields and slight decrease in the bid-to-cover ratio might reflect a change in market sentiment towards UK government debt, possibly due to factors like changes in monetary policy expectations, fiscal outlook, or broader economic conditions.
Government Cost: Higher yields mean that the UK government will have to pay more to service its debt. This can affect government spending or fiscal planning.
Investor Perspective: For investors, higher yields could represent an opportunity for higher returns. However, the increase also comes with higher risk, which may be a factor in the slightly reduced demand seen in the bid-to-cover ratio.
This snapshot provides a broad view of how the bond market is reacting to the economic and political climate in the UK. Monitoring these trends over time can offer deeper insights into market dynamics and expectations.

[ThoughtCriminal]

These MMT threads are fascinating. Swathes of academia etc who believe in the "self financing state": that government can simply create money and never go bust because they issue their own currency.

Absolutely bonkers.

 

[DurhamBorn]

1 hour ago, Pip321 said:

Just back from walking the dog. One for @DurhamBorn to boil his piss.

Spotted a chap getting out of his new (ish) Audi A8, 6 litre car (reg 23)…..he was heading to the OAP palates class at the local community centre.

He was chatting to another old guy in his tracksuit who had just got out of his Tesla (reg 24).

Both about 58/61 years old ish. . 

Heard them chatting about their pension rises this year…..and both ex coppers, I kid you not. I nearly asked for a photo for this thread. 😂😂

And here is us lot thinking the world is in bother…..life has just never been so good.🤢

Its off the scale the theft.They are likely too young,but i remember the coppers waving wads of overtime money in striking miners faces when i was a kid,most of my friends and towns people hate them.Same now of course beating up Brits while holding the red carpet out for Muslims etc.There is no escape valve thats the problem just rocketing up with inflation.With state pension most will be on £50k a year unfunded.Public sector should get a wage and a SIPP and get on with it.They might not keep voting for inflation and saved Labour theft after that.The rich are fleecing the workers of course like that guy above says,but the real theft is by the bennies and retired public sector,and the things like Housing Associations.Thats where workers money is going.

[HousePriceMania]

MMT is a mechanism of slavery.

There, I've said it.

[StrugglingMillennial]

Small update on the housing situation in my area (south Leicestershire).

Chatting to a few landlords and they've admitted they couldn't sell their houses at the price they wanted so they're back on the rental market at a loss making price, allegedly. A few houses in the area are up for auction that have been on the market for over a year so they are either repossessions or landlords getting out fast.

[Pip321]

2 minutes ago, StrugglingMillennial said:

Small update on the housing situation in my area (south Leicestershire).

Chatting to a few landlords and they've admitted they couldn't sell their houses at the price they wanted so they're back on the rental market at a loss making price, allegedly. A few houses in the area are up for auction that have been on the market for over a year so they are either repossessions or landlords getting out fast.

I am getting a real mixed bag of property data locally (North Yorks). I am closer than I would be normally because my sister is trying to buy somewhere so I have been viewing 5/6 per week. 

The market was really sticky around December when we were selling my mums house. Its a decent place, our family home for 55 years but my mum died in August and the 5 of us are selling it. 

However the market definitely lifted in February and we ended up with a couple of decent 90% offers of which we took the one from the owner occupier family. 

Now my sister is looking for a 2 bed flat (garage, nice location) and everything that was a decent price has gone. Stuff that was sticking at lowered winter prices of £200/£210k (that was maybe £240k last summer) all gone and the new stock that's coming on is £250k and whilst its not flying away it is selling. Its a mix of the decent weather and almost nothing on the market, so maybe that will slow again.

The rental market is balmy.....almost nothing on and things I would say are £700 pcm are coming on at £1000 and going. They have to be in decent nick though....no one takes a dirty house with woodchip and dirty carpets at any price. 

However the investor stuff to sell ie HMO, houses converted into flats and higher priced stuff ie £700k upwards is struggling. 

[AWW]

21 minutes ago, StrugglingMillennial said:

Small update on the housing situation in my area (south Leicestershire).

Chatting to a few landlords and they've admitted they couldn't sell their houses at the price they wanted so they're back on the rental market at a loss making price, allegedly. A few houses in the area are up for auction that have been on the market for over a year so they are either repossessions or landlords getting out fast.

Round me, rents continue to hold at the bottom end, but the middle and top are falling fast. Houses that would have been £2,750 a month this time last year now getting reduced to £2,250. Top end rentals (there is a street near me that commands £20k PCM) are just sitting - no bid.

[AWW]

Also a ton of supply for sale going nowhere, at least 3x what's normally available. Usually, desirable stuff goes very quickly. Now, all those nice detached and semi-detached houses in the £1-1.5m bracket in a nice bit of suburbia are just sitting.

[DurhamBorn]

Up here decent family houses are now like rocking horse shit.We are being flooded by southerners selling up and moving here so can easily outbid locals and we are being swamped with all in black muslims and huge fat African women with kids for some reason.I suspect southern councils are shipping them here with a bung of money.Without BTL of course this would never of happened.

[Onsamui]

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