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

[Errol]

2 hours ago, Noallegiance said:

The beginning of capital flight?

Capital flight to US equities is completely stupid.

People are going to get burned. Badly.

Edited May 2 by Errol

[Mandalorian]

23 hours ago, Bobthebuilder said:

I like your posts, but I do sometimes think it would be more interesting if you had been posting here 4 years ago.

I just cant take you seriously,

That's a you problem, not a me problem

[Mandalorian]

11 hours ago, Axeman123 said:

Galloway is a fundamentally disagreeable personality, but when you see the horrors agreeable personality types have nodded along with in order not to rock the boat with regard to child transing etc, I say the importance of having a stubborn and argumentative minority of people in society is under-appreciated.

Don't really agree with much of Galloway's left wing politics.  But I do like the fact him winning that seat REALLY pissed them all off.

He's an agitator.  We need more of those.

[Mandalorian]

11 hours ago, spygirl said:

I knew it would nto be long ....

2 days later ...

SocGen trader fired for ‘unauthorised’ bets says ‘risk team and bosses’ share blame

Kavish Kataria complains he lost his bonuses and claims his options trades made money

 

He claimed he had made $50mn for the bank in eight months and complained his “previous year bonuses were also withheld and I was just paid seven days salary”. “I would like to ask during all this time there was no one to check what has been happening on the desk?” he wrote. “I accept I did trade options on Indian indices and according to me it was in my mandate and well within the trading limits.” “Trading industry is so big but there are no rules or regulations which fight for trader justice,” Kataria said. SocGen declined to comment on Kataria’s statement.

If he's made that much then he'd have done something to disguise the reveal of his egg shaped head.  Hair transplants are only about £10k for a good one.

(easier to shave it off tbh)

Edited May 2 by Mandalorian

[wherebee]

8 hours ago, DurhamBorn said:

I doubt BATs divi will grow by much more than say 2%/3% for a while as they will want to de-leverage,do 2% buybacks and maybe even buy a few companies.I would not want to pay more than around £27 to £29 for them.Low growth high div stocks its crucial do buy them when they are really out of favour.Iv bought some Woodside Energy with the divi in the SIPP seeing as the thread is pushing it,fag divi into oil and gas.ISA one withdrawn.

jesus, if @DurhamBorn is listening to me on anything financial we're all fucked.  I'm betting on the mendacity of Australian politicians under pressure when the lights go out, not some complex roadmap 

[Axeman123]

2 hours ago, Noallegiance said:

The beginning of capital flight?

Indeed.

Quite clever gamesmanship by the Tories though. Labour won't get the satisfaction of announcing a lefty "soak the rich policy" with a long phase in and then put off dealing with the fallout for later. Instead they will inherit the shitshow right at the start of their term for no political gain, and may even have to be the ones to unwind it with a politcally difficult pro-wealth change. A subsequent Tory govt will then be able to leave that in place knowing the issue will be off limits for Labour for a generation.

In an ideal world IMO the Labour fudge would be a return to 180+ days physical presence in a tax year as the only criteria for tax residency, perhaps discribed as a streamlining of complex rules that eliminates any preferential treatment for the wealthy. It could also be described as putting the UK on a level footing with many international comparables. The globally mobile wealthy would likely find London a lot more appealing on that basis.

[Mandalorian]

3 minutes ago, Axeman123 said:

Labour ....  may even have to be the ones to unwind it with a politcally difficult pro-wealth change.

Seriously?

None of them are pro wealth.  (Unless it's their own, held off shore)

[wherebee]

3 minutes ago, Axeman123 said:

Indeed.

Quite clever gamesmanship by the Tories though. Labour won't get the satisfaction of announcing a lefty "soak the rich policy" with a long phase in and then put off dealing with the fallout for later. Instead they will inherit the shitshow right at the start of their term for no political gain, and may even have to be the ones to unwind it with a politcally difficult pro-wealth change. A subsequent Tory govt will then be able to leave that in place knowing the issue will be off limits for Labour for a generation.

In an ideal world IMO the Labour fudge would be a return to 180+ days physical presence in a tax year as the only criteria for tax residency, perhaps discribed as a streamlining of complex rules that eliminates any preferential treatment for the wealthy. It could also be described as putting the UK on a level footing with many international comparables. The globally mobile wealthy would likely find London a lot more appealing on that basis.

Even as a non-wealthy bod, I remain aware and cautious of the UK tax regime grabbing me if I spent too many days there.  I had a very ill aunt (died recently) who I might have had to go back and look after - one of the impacts would have been me being caught by the UK regime.

Meanwhile those who can afford tax planners breeze in and out to events all year without giving a fig

[Shamone]

11 hours ago, Loki said:

Fucking state of it

You’re just jelly cos you can’t afford sunnies like that.

[Axeman123]

3 minutes ago, Mandalorian said:

Seriously?

None of them are pro wealth.  (Unless it's their own, held off shore)

Fair enough, "pro-wealth" is what I should have put. Anti-capital-flight without getting coercive would be more accurate though.

If real capital flight sets in Labour are going to have some difficult decisions.

• Campaign on moderating the non-dom changes, or offsetting them in some way.
• Lie, and then flip as soon as they get in.
• Both these options then force tax rises or spending cuts on them to offset.
• Get backed into a corner and have a really bad economic time, without even the satisfaction of being the ones to put the boot in first.

10 minutes ago, wherebee said:

Even as a non-wealthy bod, I remain aware and cautious of the UK tax regime grabbing me if I spent too many days there.  I had a very ill aunt (died recently) who I might have had to go back and look after - one of the impacts would have been me being caught by the UK regime.

Meanwhile those who can afford tax planners breeze in and out to events all year without giving a fig

It can be as little as 16 days in the tax year AIUI, which is ridiculous.

[ThoughtCriminal]

This is a good series: Ponzi stocks and their CEO's homes.

There's a lesson in there for us.

 

[Long time lurking]

 

[DurhamBorn]

56 minutes ago, wherebee said:

jesus, if @DurhamBorn is listening to me on anything financial we're all fucked.  I'm betting on the mendacity of Australian politicians under pressure when the lights go out, not some complex roadmap 

I had been looking for LNG exposure as i think the US will limit exports in time and look decent longer term value.

[wherebee]

I fukcing love stories like this.  Macquarie Bank, the brains factory, reports a sharp drop in profits.  Key reason are the performance of their green investments.  The link below is quite mild on the impact of the green shite (other stories are behind paywalls so I didnt share):

"Lower asset realisations in green investments took its toll on Macquarie Group’s balance sheet, according to the company’s third quarter update to the Australian Securities Exchange.

The update also announced the exit of the company’s Head of Commodities and Global Markets, Nicholas O’Kane, after 28 years with the group. He will be succeeded by Simon Wright. The company’s update said financial year to date net profit after tax was substantially down on that for the same period last year “mainly due to lower asset realisations in green investments in Macquarie Asset Management (MAM) and margin compression along with the run off in the car loan portfolio, partially offset by volume growth across home loans and business lending”.

Not so fucking smart, eh.  Go woke... etc etc

https://uk.finance.yahoo.com/news/australias-macquarie-posts-32-fall-221806313.html

[belfastchild]

3 hours ago, wherebee said:

Key reason are the performance of their green investments.

Heres a headline from here yesterday https://www.bbc.co.uk/news/articles/c0kl4g2r04lo TLDR Fewer NI people willing to pay more for greener energy.
Was a debate on the local radio here (listen when Im working on the van) yesterday, noticeable there were very few voices in support, yes we must do more but with prices rising and people being squeezed they think they pay enough already.
In 2021 about a third of people said they would pay a little extra. That was 9% last year.
The headline also hides another thing that the radio was glossing over, the survey not only covered green investments but also subsidising 'vulnerable people'. Read a mumsnet thread posted on the 14p to the name thread in off topic the other day where someone was getting the equivalent of over 75k (without mentioning child support) on UC. People are realising that 'vulernable people' doesnt cover who they think it covers.

Interestingly in 2021 54% said they werent willing to pay any extra at all, its now 83%.

7 hours ago, DurhamBorn said:

I had been looking for LNG exposure as i think the US will limit exports in time and look decent longer term value.

Someone mentioned this to me yesterday, about how to get US LNG exposure in their SIPP. No idea but interesting that it was something someone else is looking in to.

On another unrelated anecdote, two people in the last month have asked me if I was looking to get rid of some of my silver coins for cash as they wanted to start an off the books stash for the kids. Ive been gifting their kids silver ounces for years at Christmas etc. Bit fecking late to be asking now!

[headrow]

8 hours ago, Errol said:

Capital flight to US equities is completely stupid.

People are going to get burned. Badly.

Shell PLC (LSE:SHEL, NYSE: SHEL) would cause the FTSE 100 to experience an 8% drop should it leave for the US.

At the start of April, Shell’s boss Wael Sawan warned the oil giant would ditch the LSE if its market valuation didn’t improve.

Since then the shares have edged around 5% higher, but at its first quarter update, the question of a US switch popped up.

Sawan expressed he was still unhappy with the group’s valuation and said it was keeping the issue “under review”.

Should Shell finally call it quits on London, it would be bringing with it £180 billion of the FTSE 100’s value.

The LSE would then be forced to replace this with FTSE 250 digger Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF), which has a market cap of around £4.1 billion.

This means some £176 billion would be wiped from the blue-chip index, which would cause the valuation of the overall index to drop by 8%.

An 8% drop would be the worst fall of the index since it dropped 9% during the pandemic and worse than any day during the financial crash in 2008.

London’s FTSE 100 is already scheduled to shed more than £22 billion when Paddy Power owner Flutter Entertainment PLC (LSE:FLTR) ditches its UK listing for the US.

Shareholders of the gambling firm voted overwhelmingly in favour of a primary New York listing on Wednesday, thereby meaning it will exit the FTSE 100.

With a market cap of around £26.4 billion, the group ranks as one of the top 25 largest stocks in the index.

Replacing the departing group would be the largest FTSE 250 company, which as of Thursday is Darktrace PLC (LSE:DARK).

However, the cybersecurity firm is also quitting its UK listing to go across the pond, albeit through the purchase by US private equity fund Thoma Bravo rather than a move to the NSYE.

Next in the FTSE 250 rankings is Hiscox Ltd (LSE:HSX), the insurance provider, which has a market cap of just under £4.2 billion, meaning when it replaces Flutter the FTSE 100 will drop in value by £22.2 billion.

While £22.2 billion represents a small portion of the nearly £2 trillion made up by the companies, things would be significantly worse should Shell ditch the UK.

More immediately, Shell’s share price requires some self-help.

“The whole issue is not one of the London market, there are just basic fundamentals we have to work on,” Sawan said.

[Errol]

Royal Mint stating they are seeing record levels of people selling gold to them.

Excellent news. Clear sign that sentiment remains completely disconnected from what is actually going on. With people queuing up to sell this is more like a bottom.

[ThoughtCriminal]

This is comedy gold.

Starbucks CEO goes on TV with Jin Cramer to steady nerves and the share price. Share price falls 5% as he's speaking. 😂

 

[Harley]

8 hours ago, DurhamBorn said:

I had been looking for LNG exposure as i think the US will limit exports in time and look decent longer term value.

I see it bounced on @wherebee tip (oh yes, holding you to that one 'cause a larf trumps fair!) and your purchase but IMO still a (slightly less) shite time to buy.  But what do I know, you can't time the markets,.....! 

Edited May 3 by Harley

[ThoughtCriminal]

This seems like one of the best summaries of money creation I've seen. Has he been featured on here before?  Starts at 5.50

 

[M S E Refugee]

I raised some cash this morning and got rid of some funds exposed to China,Hong Kong and Taiwan.

After the Russia debacle I'm a bit jittery about owning assets in those Countries.

[Pip321]

18 hours ago, DurhamBorn said:

.Iv bought some Woodside Energy with the divi in the SIPP seeing as the thread is pushing it,fag divi into oil and gas.ISA one withdrawn.

Are you buying the Woodside Energy listed on LSE under the ticker WDS or another version held elsewhere….

Imagine @wherebee has the Australian listing. 

Asking for a friend 😉

[Pip321]

46 minutes ago, ThoughtCriminal said:

This seems like one of the best summaries of money creation I've seen. Has he been featured on here before?  Starts at 5.50

 

Thanks for posting……nice to hear an ‘argument’ where the listener listens.

Lots of interesting points and money creation is clearly the point….particularly when used for financial transactions ie buying assets rather than for production/technology innovation etc..

But my favourite

”Has the UK got a finance curse?”

“Is this a trick question, because the UK doesn’t have finance. The city of London has and it’s not part of the UK”

“It’s also not even part of the EU…it’s the banks that have the vote” Since 1688 the banking system is not part of the sovereign state.

Gold it is then…..😂

 

[sancho panza]

10 hours ago, Axeman123 said:

Quite clever gamesmanship by the Tories though. Labour won't get the satisfaction of announcing a lefty "soak the rich policy" with a long phase in and then put off dealing with the fallout for later. Instead they will inherit the shitshow right at the start of their term for no political gain, and may even have to be the ones to unwind it with a politcally difficult pro-wealth change. A subsequent Tory govt will then be able to leave that in place knowing the issue will be off limits for Labour for a generation.

In an ideal world IMO the Labour fudge would be a return to 180+ days physical presence in a tax year as the only criteria for tax residency, perhaps discribed as a streamlining of complex rules that eliminates any preferential treatment for the wealthy. It could also be described as putting the UK on a level footing with many international comparables. The globally mobile wealthy would likely find London a lot more appealing on that basis.

thought someone would have psoted on this.Blackpool SOuth went labour from 2019 tory win.

turonout 32%,tory beat reform by 100 votes or so.

I agree on labour having to go pro welath or shall we say pro middle calss.Everyone I'm speaking to who earns over the 40% level is working out how they can unwind their position.

the fiscal position is deterirorating extrememly fast before our eyes.it's caught me by the speed of it if even 30% of these people talking their economic activity down actually move to earn less.especailly as the amount of bodies trying to get on PIP rises ecponentially.

https://news.sky.com/story/labour-wins-blackpool-south-by-election-taking-seat-from-conservatives-13127714

Labour has won the Blackpool South by-election from the Conservatives in yet another blow for Rishi Sunak's leadership.

The party's candidate Chris Webb received 10,825 votes after Thursday's contest - a 58.9% vote share - with the Tories trailing far behind with just 3,218.

 

Reform UK were hot on their heels, getting 3,101 votes, while the Liberal Democrats got 387 votes and the Green Party won 368.

2 hours ago, headrow said:

Shell PLC (LSE:SHEL, NYSE: SHEL) would cause the FTSE 100 to experience an 8% drop should it leave for the US.

At the start of April, Shell’s boss Wael Sawan warned the oil giant would ditch the LSE if its market valuation didn’t improve.

Since then the shares have edged around 5% higher, but at its first quarter update, the question of a US switch popped up.

Sawan expressed he was still unhappy with the group’s valuation and said it was keeping the issue “under review”.

Should Shell finally call it quits on London, it would be bringing with it £180 billion of the FTSE 100’s value.

The LSE would then be forced to replace this with FTSE 250 digger Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF), which has a market cap of around £4.1 billion.

This means some £176 billion would be wiped from the blue-chip index, which would cause the valuation of the overall index to drop by 8%.

An 8% drop would be the worst fall of the index since it dropped 9% during the pandemic and worse than any day during the financial crash in 2008.

London’s FTSE 100 is already scheduled to shed more than £22 billion when Paddy Power owner Flutter Entertainment PLC (LSE:FLTR) ditches its UK listing for the US.

Shareholders of the gambling firm voted overwhelmingly in favour of a primary New York listing on Wednesday, thereby meaning it will exit the FTSE 100.

With a market cap of around £26.4 billion, the group ranks as one of the top 25 largest stocks in the index.

Replacing the departing group would be the largest FTSE 250 company, which as of Thursday is Darktrace PLC (LSE:DARK).

However, the cybersecurity firm is also quitting its UK listing to go across the pond, albeit through the purchase by US private equity fund Thoma Bravo rather than a move to the NSYE.

Next in the FTSE 250 rankings is Hiscox Ltd (LSE:HSX), the insurance provider, which has a market cap of just under £4.2 billion, meaning when it replaces Flutter the FTSE 100 will drop in value by £22.2 billion.

While £22.2 billion represents a small portion of the nearly £2 trillion made up by the companies, things would be significantly worse should Shell ditch the UK.

More immediately, Shell’s share price requires some self-help.

“The whole issue is not one of the London market, there are just basic fundamentals we have to work on,” Sawan said.

Intersting post.

I think Londinium is in some big trouble given we're very much seen as a US poodle.companies are aware by jsut moving there they can raise their share price.

lots of reasons from Brown tax changes to the UK being in a really awful fiscal postion,windfall taxes etc...

If I was shell,I'd go.

[DurhamBorn]

2 hours ago, headrow said:

Shell PLC (LSE:SHEL, NYSE: SHEL) would cause the FTSE 100 to experience an 8% drop should it leave for the US.

At the start of April, Shell’s boss Wael Sawan warned the oil giant would ditch the LSE if its market valuation didn’t improve.

Since then the shares have edged around 5% higher, but at its first quarter update, the question of a US switch popped up.

Sawan expressed he was still unhappy with the group’s valuation and said it was keeping the issue “under review”.

Should Shell finally call it quits on London, it would be bringing with it £180 billion of the FTSE 100’s value.

The LSE would then be forced to replace this with FTSE 250 digger Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF), which has a market cap of around £4.1 billion.

This means some £176 billion would be wiped from the blue-chip index, which would cause the valuation of the overall index to drop by 8%.

An 8% drop would be the worst fall of the index since it dropped 9% during the pandemic and worse than any day during the financial crash in 2008.

London’s FTSE 100 is already scheduled to shed more than £22 billion when Paddy Power owner Flutter Entertainment PLC (LSE:FLTR) ditches its UK listing for the US.

Shareholders of the gambling firm voted overwhelmingly in favour of a primary New York listing on Wednesday, thereby meaning it will exit the FTSE 100.

With a market cap of around £26.4 billion, the group ranks as one of the top 25 largest stocks in the index.

Replacing the departing group would be the largest FTSE 250 company, which as of Thursday is Darktrace PLC (LSE:DARK).

However, the cybersecurity firm is also quitting its UK listing to go across the pond, albeit through the purchase by US private equity fund Thoma Bravo rather than a move to the NSYE.

Next in the FTSE 250 rankings is Hiscox Ltd (LSE:HSX), the insurance provider, which has a market cap of just under £4.2 billion, meaning when it replaces Flutter the FTSE 100 will drop in value by £22.2 billion.

While £22.2 billion represents a small portion of the nearly £2 trillion made up by the companies, things would be significantly worse should Shell ditch the UK.

More immediately, Shell’s share price requires some self-help.

“The whole issue is not one of the London market, there are just basic fundamentals we have to work on,” Sawan said.

I cannot remember the last polo i heard mention people should build up capital in UK equity.Since Brown they have all slowly turned the system to direct most saved labour in pensions into gilts.It pains me how stupid most ordinary people are,but the 2nd leg of the polos actions is to get more and more on the state.They have pretty much stopped capital formation.The companies leaving earn profits abroad and pay divis here.Take BAT and me.I come from the poorest town in England.My BAT divis used to come in,made abroad,i spent some in my local pub,helping create business and jobs.

Whats happened is,government has instead taken that capital into gilts,then inflated it away to give to Abdul and fat Shazz.In the short term nothing changes,the demand remains,its just given to Shazz.However longer term the macro is very very different.Why?.Because BAT grows its business and divi,but the gilt just goes down to nothing inflated away.

Its why when i started 53% of my home town where on the state tit,one of the worst in the country then.Now its over 80%.