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

[Pip321]

Yes great my GJGB is up 42% since I bought it, my Black Gold is up about 37% and silver is on the way up……all super yadda, yadda. 

Can someone have a word with them bloody Mexican bandits standing above the mines and keeping my money…..come on Fres, you can do it😂😂

Fres still about 14% down for me…..

 

[Eventually Right]

24 minutes ago, Yadda yadda yadda said:

Why can't the PwC economist clearly state that UK households are poorer than two years previously? The numbers are clear. Spin the latest figures as light at the end of the tunnel if you must.

Edit to add that someone should rework the figures for workers as opposed to the inflation protected pensioners and benefits recipients. Go further and look at the position of the squeezed middle income earners who do not get percentage raises online with minimum wage. There are a lot of people who must be 5-10% worse off over those two years.

Exactly this-such a gulf between the two that you'd hope some half-decent journalist (Hello, Telegraph?) would flag the difference to the public.

[Long time lurking]

2 hours ago, belfastchild said:

Posted before about my many talks with a car salesman whilst buying my car last year. He said it was going towards a build to order model. I said oh you mean going back to that. I think he was still in nappies when I bought my car in 2000 and waited for it to be built.

He said from a personal perspective the selling on credit was dead as people couldnt afford new deals on the same car, either pay more or get a smaller car. He said the company makes more money on higher prices, smaller volume, only to order and I think in Nov when I picked it up they had been on running 90 day notice for a while. Said Monday was their busiest day, processing the weekend online orders. Very few people do what I did, just drop in and ask for a test drive.

Just in case my nephews and nieces turn out to be complete cunts to me later in life, how much are we talking?

Yep it`s exactly that volumes that were normal are not achievable due to one thing and that's the cost of money has increased  

To argue that this will not effect the more expensive EV market where there`s far less demand is nonsenses 

[DurhamBorn]

23 minutes ago, jamtomorrow said:

Also lithiums's supply elasticity is hard to love - price doesn't seem to move much before it drags out a lot of new supply quite quickly (compared to O&G at any rate).

The best way to look at lithium supply balance will be to see what Sibanye are saying.Iv bought and sold the miners over many decades,and Sibanye seem to put huge work into understanding the cycles and get it right mostly.Froneman seems to buy into mines,or develop them just at the right point in the cycles.Its why the shares always get smashed as the market thinks they are nuts to invest and grow debt when prices are on their arses,only to shoot higher just as they start to produce and the shares rocket.Of course one time this might not play out and a big diluting equity raise would happen,but iv made big big profits over the years trusting Froneman.6x profit all in so far over 3 holding periods,but original stake might go to zero one time.

[Calcutta]

20 minutes ago, Pip321 said:

Yes great my GJGB is up 42% since I bought it, my Black Gold is up about 37% and silver is on the way up……all super yadda, yadda. 

Can someone have a word with them bloody Mexican bandits standing above the mines and keeping my money…..come on Fres, you can do it😂😂

Fres still about 14% down for me…..

 

Don't worry, Mexico is essentially a narcostate. Drug dealers love money. We're little more than Turkish barbers in this equation.

[Long time lurking]

2 hours ago, feed said:

Indeed

Who wants to be in business of selling a product that lasts ten years, costs you money to sell at point of sale, you get a window of profitablity for around 5 years.  Then the product acts as a low cost competition to your own entry level products.  

That's what high volume vehicles sales have been for years.  The only thing that made it work, was the cheap credit.   
 

 

How did it work for the four decades before cheap credit as were are only at historical norms when it comes to interest rates  ?

Is credit for EV`s cheaper ? why are the Government subsidising prices by at least 20% in most places for EV`s yet they are still not selling and are just as expensive if not more so than ICE ,how is that ever going to be a sustainable model when it comes to your cheap credit argument 

That before going into the fact most of Europe and the world do not have the power generating capacity to transition to anywhere near fully to EV`s 

There is only one viable business model at this point in time regarding most of the world , yet all the governments in the west pushed the unsustainable model ,which all the manufactures are pushing back against

It was never about manufactures trying to find a better "business model" it was all about governments trying to push an agenda driven business model on to them ,why that is/was still remains to be seen 

 

[Noallegiance]

That's a big pre US trading PM move this morning.

[DoINeedOne]

UK government gives security green light to Vodafone and Three merger

Following a national security assessment, the UK government made a final order yesterday in relation to section 26 of the National Security and Investment Act 2021, decreeing that the merger can go ahead – subject to some conditions.

First of all, a National Security Committee must be established within the new merged entity to oversee ‘sensitive work which has an impact on or is in respect of the national security of the United Kingdom.’ This committee will be required to provide regular updates and information to the government.

A technical group within this National Security Committee must also be set up, tasked with monitoring a specified list of topics relating to ‘cyber, physical and personnel security’ and which will also have to report back regularly.
The merged entity’s network migration planning is also subject to review by an external, Government-approved auditor, and it must put in place ‘specified arrangements for the governance of MergeCo.’
We’re told that The Secretary of State considers that these measures mitigate any risks to national security in relation Vodafone’s role as a strategic supplier of services to various parts of the government, as well as the security of UK networks and data ‘resulting from the process of merging two large, complex organisations and their respective staffing, policies, processes and networks.’ 

A joint statement by Vodafone and Three said: “We are pleased our proposed joint venture has been approved by the Government under the National Security and Investment Act.

“We are continuing to engage collaboratively with the Competition and Markets Authority to inform its ongoing review of our merger, which we strongly believe will strengthen competition in the UK’s mobile sector and enable a significant step-up in the UK’s mobile network infrastructure.”

The Competition and Markets Authority began Phase 2 of its separate investigation into the proposed £15 billion merger in April, following the conclusion of the preliminary Phase 1 probe in which the watchdog warned the tie-up could leave consumers and businesses paying higher prices for lower-quality services.

The second deeper investigation into the deal was ‘an expected next step’ in the process and is within the anticipated timeframe for completing their merger, said Vodafone and Three in joint statement at the time. The CMA has until 18 September to complete it.  

When it started the process, the CMA insisted that this assessment is strictly on the grounds competition, and It cannot consider other aspects like access to personal data and national security concerns, which it says are a matter for the UK government, ‘which may choose to intervene under the National Security and Investment Act if it finds concerns.’ Any fears of that happening, perhaps in relation to the fact Three is owned by Hong Kong-based CK Hutchison, would seem to have been alleviated with today’s announcement.

Three and Vodafone for their part take any opportunity that presents itself to make the case that the merger will be good for the UK sector and that without it both firms will struggle to carry on investing in networks. Despite clocking a 9% revenue and margin jump during Q1, Three’s Chief Executive Officer Robert Finnegan said yesterday: “Our EBITDA-CAPEX remains negative, as it has been since 2020, which is unsustainable long-term. I believe that merging with Vodafone is vital to give us the required scale to invest, grow and compete to create a best-in-class network for the UK.”

https://www.telecoms.com/regulation/uk-government-gives-security-green-light-to-vodafone-and-three-merger

[Plan-b]

1 hour ago, snaga said:

be aware that Soduim batteries are coming soon, I wouldn't bet on long term lithium prices right now.

CATL gears up for next-gen SIBs and global licensing | electrive.com

Poor but increasing energy density at the moment, new developments could see that improve.

'The first generation had an energy density of 160 Wh/kg, but CATL was already aiming for 200 Wh/kg at the time. By comparison, lithium-ion batteries with liquid electrolytes deliver around 350 Wh/kg max.'

On the plus side cheaper and safer. 

[feed]

15 minutes ago, Long time lurking said:

How did it work for the four decades before cheap credit as were are only at historical norms when it comes to interest rates  ?

Is credit for EV`s cheaper ? why are the Government subsidising prices by at least 20% in most places for EV`s yet they are still not selling and are just as expensive if not more so than ICE ,how is that ever going to be a sustainable model when it comes to your cheap credit argument 

That before going into the fact most of Europe and the world do not have the power generating capacity to transition to anywhere near fully to EV`s 

There is only one viable business model at this point in time regarding most of the world , yet all the governments in the west pushed the unsustainable model ,which all the manufactures are pushing back against

It was never about manufactures trying to find a better "business model" it was all about governments trying to push an agenda driven business model on to them ,why that is/was still remains to be seen 

 

When I joined Ford in the mid 90's, the first presentation i went to covered 2 things. 

1. The East is coming for our business.  At that time, it was Toyota.  We all know what happened there..  

2. We need to move away from small passenger vehicles in the EU, they're not profitable. 

When I left last year

1. The east are coming for our business.   This time it’s China and India.  

2. We're not selling small passenger vehicles in EU. 

It took 30 years to stop selling the Fiesta. 

Why.  Because it was a well liked, good product.  No one wants to stop selling a product people want.  But it didn’t make any money.  

As for the Wests auto industry in the past.  Monopoly and longevity of product.  Less of an issue when the products floor rusts out after 5 years or the engine seizes at 100k miles..  The entire industry would move back to this is a heartbeat if it was even vaguely possible, but it isn't.  

It is entirely about business model and corporate profits.  

 

[snaga]

4 minutes ago, Plan-b said:

Poor but increasing energy density at the moment, new developments could see that improve.

'The first generation had an energy density of 160 Wh/kg, but CATL was already aiming for 200 Wh/kg at the time. By comparison, lithium-ion batteries with liquid electrolytes deliver around 350 Wh/kg max.'

On the plus side cheaper and safer. 

density is less of an issue for static energy storage, but could be used for cheaper, short range EVs.

[Bear Hug]

3 minutes ago, feed said:

When I joined Ford in the mid 90's, the first presentation i went to covered 2 things. 

1. The East is coming for our business.  At that time, it was Toyota.  We all know what happened there..  

2. We need to move away from small passenger vehicles in the EU, they're not profitable. 

When I left last year

1. The east are coming for our business.   This time it’s China and India.  

2. We're not selling small passenger vehicles in EU. 

It took 30 years to stop selling the Fiesta. 

Why.  Because it was a well liked, good product.  No one wants to stop selling a product people want.  But it didn’t make any money.  

As for the Wests auto industry in the past.  Monopoly and longevity of product.  Less of an issue when the products floor rusts out after 5 years or the engine seizes at 100k miles..  The entire industry would move back to this is a heartbeat if it was even vaguely possible, but it isn't.  

It is entirely about business model and corporate profits.  

 

I always assumed that government are driving the increased cost and complexity in the name of green agenda and safety.  Now that you point it out, I guess the driving force could be the manufacturerers. Thanks, just never considered this angle. 

[feed]

1 minute ago, Bear Hug said:

I always assumed that government are driving the increased cost and complexity in the name of green agenda and safety.  Now that you point it out, I guess the driving force could be the manufacturerers. Thanks, just never considered this angle. 

Industry lobby's government.  And the auto industry is incredible powerful.  Not so much here, but Germany and the US. 

None of the governments polices would be going ahead without big auto approval.  

  

 

[Long time lurking]

17 minutes ago, feed said:

When I joined Ford in the mid 90's, the first presentation i went to covered 2 things. 

1. The East is coming for our business.  At that time, it was Toyota.  We all know what happened there..  

2. We need to move away from small passenger vehicles in the EU, they're not profitable. 

When I left last year

1. The east are coming for our business.   This time it’s China and India.  

2. We're not selling small passenger vehicles in EU. 

It took 30 years to stop selling the Fiesta. 

Why.  Because it was a well liked, good product.  No one wants to stop selling a product people want.  But it didn’t make any money.  

As for the Wests auto industry in the past.  Monopoly and longevity of product.  Less of an issue when the products floor rusts out after 5 years or the engine seizes at 100k miles..  The entire industry would move back to this is a heartbeat if it was even vaguely possible, but it isn't.  

It is entirely about business model and corporate profits.  

 

And where do the government pushing EV`s come into to that ?  as that was my only point and it was a very speculative point to the reason why, hence why i said with a small tinfoil hat on 

 

 

 

[Yadda yadda yadda]

28 minutes ago, feed said:

Industry lobby's government.  And the auto industry is incredible powerful.  Not so much here, but Germany and the US. 

None of the governments polices would be going ahead without big auto approval.  

  

 

IIRC you have previously stated that rental was a big part of the planned model. I initially thought you meant by the hour or day but later it appeared to be much longer term. I could have got the wrong end of the stick but I don't see how that helps, the consumer would still only have a budget of x per month. If it were car sharing, which fits more with a work from home model, then the each car can take a smaller sum of money from multiple people and thus generate more in total.

There is little doubt that a lot of people will be priced out of car ownership. Electric vehicles don't need to drive that change. Higher purchase prices and insurance costs can do that. Taxing old cars off the road is where electric ties in but the electric infrastructure isn't there to do this any time soon.

[Long time lurking]

Interesting article ,another political party about to be born ? 

 

https://www.politico.eu/article/dominic-cummings-volodymyr-zelenskyy-ukraine-war-corruption/

[ThoughtCriminal]

6k each for those robots, 10 people reduced to one. Plus the machines work 24/7 and don't take holidays. In Britain we import 10 third worlders instead.

 

 

Edited May 10 by ThoughtCriminal

[feed]

4 minutes ago, Yadda yadda yadda said:

IIRC you have previously stated that rental was a big part of the planned model. I initially thought you meant by the hour or day but later it appeared to be much longer term. I could have got the wrong end of the stick but I don't see how that helps, the consumer would still only have a budget of x per month. If it were car sharing, which fits more with a work from home model, then the each car can take a smaller sum of money from multiple people and thus generate more in total.

There is little doubt that a lot of people will be priced out of car ownership. Electric vehicles don't need to drive that change. Higher purchase prices and insurance costs can do that. Taxing old cars off the road is where electric ties in but the electric infrastructure isn't there to do this any time soon.

There are more than few people here that have quite a lot of money that run old cars, with non oem parts and 3rd party servicing.  In fact the average age of a car on the UK road today is 8.4  years.  

This generates no revenue for the original manufacturer.  If people get priced out, who cares, they weren't generating profit anyway and there be some people that have to move over, even if it's lower end or infrequent.  

There is definitely a drive towards non-ownership of the vehicle, longer term lease or short term rideshare.  All part of the same cars as a service model. Contractual.  Sell software/licensing.  Servicing, renewal and replacement and even insurance can all sit inside the control of the manufacturer.  Same reason for removing the dealerships.   Passenger vehicles drive a lot of revenue, very little of it currently goes to the original manufacturer.   

You don't buy a car. You buy a transportation package.  Terrible words, but you the get the picture.  EV's facilitate the move this model.  You can do it with ICE, but people are used to the ownership model and you need to kill the secondary/tertiary markets, much easier to do with a tech change.   So tell them it's for the good of mankind or something..   

 

 

[Loki]

52 minutes ago, feed said:

So tell them it's for the good of mankind or something..   

Evs are safe and effective

[Plan-b]

2 hours ago, DoINeedOne said:

UK government gives security green light to Vodafone and Three merger

Following a national security assessment, the UK government made a final order yesterday in relation to section 26 of the National Security and Investment Act 2021, decreeing that the merger can go ahead – subject to some conditions.

First of all, a National Security Committee must be established within the new merged entity to oversee ‘sensitive work which has an impact on or is in respect of the national security of the United Kingdom.’ This committee will be required to provide regular updates and information to the government.

A technical group within this National Security Committee must also be set up, tasked with monitoring a specified list of topics relating to ‘cyber, physical and personnel security’ and which will also have to report back regularly.
The merged entity’s network migration planning is also subject to review by an external, Government-approved auditor, and it must put in place ‘specified arrangements for the governance of MergeCo.’
We’re told that The Secretary of State considers that these measures mitigate any risks to national security in relation Vodafone’s role as a strategic supplier of services to various parts of the government, as well as the security of UK networks and data ‘resulting from the process of merging two large, complex organisations and their respective staffing, policies, processes and networks.’ 

A joint statement by Vodafone and Three said: “We are pleased our proposed joint venture has been approved by the Government under the National Security and Investment Act.

“We are continuing to engage collaboratively with the Competition and Markets Authority to inform its ongoing review of our merger, which we strongly believe will strengthen competition in the UK’s mobile sector and enable a significant step-up in the UK’s mobile network infrastructure.”

The Competition and Markets Authority began Phase 2 of its separate investigation into the proposed £15 billion merger in April, following the conclusion of the preliminary Phase 1 probe in which the watchdog warned the tie-up could leave consumers and businesses paying higher prices for lower-quality services.

The second deeper investigation into the deal was ‘an expected next step’ in the process and is within the anticipated timeframe for completing their merger, said Vodafone and Three in joint statement at the time. The CMA has until 18 September to complete it.  

When it started the process, the CMA insisted that this assessment is strictly on the grounds competition, and It cannot consider other aspects like access to personal data and national security concerns, which it says are a matter for the UK government, ‘which may choose to intervene under the National Security and Investment Act if it finds concerns.’ Any fears of that happening, perhaps in relation to the fact Three is owned by Hong Kong-based CK Hutchison, would seem to have been alleviated with today’s announcement.

Three and Vodafone for their part take any opportunity that presents itself to make the case that the merger will be good for the UK sector and that without it both firms will struggle to carry on investing in networks. Despite clocking a 9% revenue and margin jump during Q1, Three’s Chief Executive Officer Robert Finnegan said yesterday: “Our EBITDA-CAPEX remains negative, as it has been since 2020, which is unsustainable long-term. I believe that merging with Vodafone is vital to give us the required scale to invest, grow and compete to create a best-in-class network for the UK.”

https://www.telecoms.com/regulation/uk-government-gives-security-green-light-to-vodafone-and-three-merger

In the Telecoms world this is seen as a bad thing. Three and its owner the Hutchison Group are classed as good companies. Vodafone are shite in comparison its a loss for the UK I'm afraid. Hutchison which is a Hong Kong corporation wants out of the UK - its a failed state everyone worldwide can see it.

Edited May 10 by Plan-b

[feed]

1 minute ago, Loki said:

Evs are safe and effective

Big Auto wishes it had the same influence as big pharm.

But remember the GFC era auto bailouts. Strategic importance.  That hasn't changed.  

[Loki]

1 minute ago, feed said:

the GFC era auto bailouts

All those perfectly usable vehicles from the golden age of modern motoring scrapped  (just enough tech for excellent reliability and driveability) 

[Long time lurking]

1 hour ago, ThoughtCriminal said:

6k each for those robots, 10 people reduced to one. Plus the machines work 24/7 and don't take holidays. In Britain we import 10 third worlders instead.

 

 

£6k where did you get that number from ,it`s a genuine question as that sounds incredibly cheap 

Then i`m more than a tad sceptical regarding that video ,i`m not saying China are using huge amounts of automation as they clearly are ,they installed more industrial robots last year than the rest of the world combined there are more than a few reasons for that though 

  But that video looks off as it has high end robots feeding what looks like 1960`s manual/mechanically automated machine tools, there's some very clever integration going on there if it is legitimate 

[Castlevania]

1 hour ago, Plan-b said:

In the Telecoms world this is seen as a bad thing. Three and its owner the Hutchison Group are classed as good companies. Vodafone are shite in comparison its a loss for the UK I'm afraid. Hutchison which is a Hong Kong corporation wants out of the UK - its a failed state everyone worldwide can see it.

They’ll still be shareholders in the merged entity, no?

[Plan-b]

.

Edited May 10 by Plan-b