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Credit deflation and the reflation cycle to come.


DurhamBorn

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Chewing Grass
8 minutes ago, spygirl said:

Look at this.

Neither japan or china have migrant labour

http://digg.com/video/top-10-countries-by-gdp-1960-2017

What a fab video, GDP by country as a horse race, you can see the years tick by, the positions change, why we were tempted to join the EEC as a money making club, the recessions and the Chinese horse on anabolic steroids .

 

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UnconventionalWisdom

I'll be watching the SPX movement closely over the next few days. 50 day average moved below the 200 one. Bit of a head and shoulders pattern and lower than the start of the year. 

 

sc (1).png

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51 minutes ago, UnconventionalWisdom said:

I'll be watching the SPX movement closely over the next few days. 50 day average moved below the 200 one. Bit of a head and shoulders pattern and lower than the start of the year. 

 

sc (1).png

Santa Rally cancelled methinks. Fed move on the 19th already factored in.

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On 14/12/2018 at 17:12, stokiescum said:

i think the latest fastracks use yank engines,the only reason they even started building them was because a previouse supplier was prone to strikes.im going back to the late 70s early 80s.im glad to see an english producer makeing something others cant.

Ive looked at making an ICE.

With a lathe and milling machine, and hours n hours of whittling you can make one. But its more likely to be shit.

A good ICE needs skilled engineering, luck and a bit of magic. The engineering science is well short of 100%

Its why, when they hit on the a magic design, they only tweak it.

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45 minutes ago, spygirl said:

Ive looked at making an ICE.

With a lathe and milling machine, and hours n hours of whittling you can make one. But its more likely to be shit.

A good ICE needs skilled engineering, luck and a bit of magic. The engineering science is well short of 100%

Its why, when they hit on the a magic design, they only tweak it.

Quite.  I've always been interested in engine design flow.  An interesting example is the Austin seven engine, which was developed by Austin from 1922, developed for years (albeit with some serious development, like changing from 3- to 5-bearing for the crankshaft), then taken over by Reliant, given an ohv conversion in the 60's, then stayed in production (by Reliant) until 2002 or so -- 80 years of production of what was essentially the same fundamental engine design.

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54 minutes ago, dgul said:

Quite.  I've always been interested in engine design flow.  An interesting example is the Austin seven engine, which was developed by Austin from 1922, developed for years (albeit with some serious development, like changing from 3- to 5-bearing for the crankshaft), then taken over by Reliant, given an ohv conversion in the 60's, then stayed in production (by Reliant) until 2002 or so -- 80 years of production of what was essentially the same fundamental engine design.

You back 100 years, to era of static engines - threshers, pump whatnot. Every slack jawed yokel with a lathe was having a go.

These were simple designs that still work today - i love the static engine bit of the dorset steam fair. Its great.

Whittle away and even *you* can make in engine.

Its more likely to be shit, under powered, inefficient, fail over time etcetcetc.

Most of the smaller car companies have been burnt on engine development. Thats why they buy them in from elsewhere.

Once you in the area of of large diesel engines well you can see why cummins is so good.

You could throw billions at engine development and have nothing to show for it. Ive no doubt the chinese are discovering this.

Theres been a few moments of inspired genius. Honda, bmw, renault. Thats it.

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It won't be long before we mourn (or celebrate?) the passing of the internal combustion engine. My current "toy" car has a 3.5L V8 with 5 valves per cylinder and screams to 8.5k revs.  It was the first naturally-aspirated production engine to make more than 100bhp per litre. I love the noise, the peaky power delivery, the smell, the engineering... it's a work of art.  But, the air quality where I live is woeful.  Electric cars have far fewer moving parts, cost buttons to run and distribute the pollution away from towns and cities.  Range and charging speed are getting to the point where I might consider a used one in a few years.  But for thrills, give me petrol and pistons.

Most people who claim to be into cars these days are actually into the gadgets on their cars.  They can't actually drive for shit and couldn't care less what's under the bonnet, as long as it can park itself and play a Spotify stream via their mobile.

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@spygirl  Its interesting your saying that the jobs are coming back from China, the industrial production index looks very artificial, I imagine its pure coincidence it keeps steadily growing at around the target area!  However, if it didnt flatline and instead the decline kept going at the same rate from 2009 then YOY it shouldnt be far off negative by my reckoning.

Whatever happens, its a given that China will not grow its GDP at 5-6% for the next 100 years, when they have a recession how will the CCP deal with the consequences of a 30 year build up of debt?  The army training for a working class insurrection wouldnt be a waste of time!

ABOOK-Dec-2018-IPRSFAI-IP-PMI.png?itok=P

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2 minutes ago, Majorpain said:

@spygirl  Its interesting your saying that the jobs are coming back from China, the industrial production index looks very artificial, I imagine its pure coincidence it keeps steadily growing at around the target area!  However, if it didnt flatline and instead the decline kept going at the same rate from 2009 then YOY it shouldnt be far off negative by my reckoning.

Whatever happens, its a given that China will not grow its GDP at 5-6% for the next 100 years, when they have a recession how will the CCP deal with the consequences of a 30 year build up of debt?  The army training for a working class insurrection wouldnt be a waste of time!

ABOOK-Dec-2018-IPRSFAI-IP-PMI.png?itok=P

Not a single figure from china should be trusted.

I dont even think theres 1bln popukation. 100m running around, putting fake noses on.....

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1 hour ago, AWW said:

It won't be long before we mourn (or celebrate?) the passing of the internal combustion engine. My current "toy" car has a 3.5L V8 with 5 valves per cylinder and screams to 8.5k revs.  It was the first naturally-aspirated production engine to make more than 100bhp per litre. I love the noise, the peaky power delivery, the smell, the engineering... it's a work of art.  But, the air quality where I live is woeful.  Electric cars have far fewer moving parts, cost buttons to run and distribute the pollution away from towns and cities.  Range and charging speed are getting to the point where I might consider a used one in a few years.  But for thrills, give me petrol and pistons.

Most people who claim to be into cars these days are actually into the gadgets on their cars.  They can't actually drive for shit and couldn't care less what's under the bonnet, as long as it can park itself and play a Spotify stream via their mobile.

Actually, that's something I find rather depressing.  Years ago the typical petrolhead would be buying up an older car, then keeping it going, doing stuff to the engine (fancier carb, camshaft change, etc).  These days most are just buying fancy cars on HP and it's all about how much debt you can take on.  The occasional person interested in 'doing stuff' might rechip (hardly engineering), but otherwise it's cosmetics.  I'm sure it doesn't really make any difference (why is it good to keep an older car going...?), but it just all seems so fake to me.

[Sure, there are people actually into rebuilding and tuning, but it is the minority -- for most it is about buying the M230 not the M220 and dreaming that you could have got the M240.]

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40 minutes ago, spygirl said:

Not a single figure from china should be trusted.

The Chinese certaintly agree with you, anyone with money has been trying to get it out of China for years!

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5 hours ago, Sideysid said:

Santa Rally cancelled methinks. Fed move on the 19th already factored in.

Aye - the INDU, SPX, VUSA, VUKE, VFEM and when you look at the DOW components, Verizon, Boeing... all look to be starting to roll over the top of their hills...

I'm out of all of them and expecting a massive drop now. Pretty much just IBTL, GDX look attractive at the moment, as well as some of the pm miners that might just get greener and greener.

Just watched The Big Short again, this time was the first time though with my better half. She suddenly isn't looking at me with that sort of look she had before. 

I'm off to adjust the chinstraps on my tinfoil helmet. 

And build a tinfoil hut for the whole family now under the table. 

 

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3 hours ago, AWW said:

It won't be long before we mourn (or celebrate?) the passing of the internal combustion engine. My current "toy" car has a 3.5L V8 with 5 valves per cylinder and screams to 8.5k revs.  It was the first naturally-aspirated production engine to make more than 100bhp per litre. I love the noise, the peaky power delivery, the smell, the engineering... it's a work of art.  But, the air quality where I live is woeful.  Electric cars have far fewer moving parts, cost buttons to run and distribute the pollution away from towns and cities.  Range and charging speed are getting to the point where I might consider a used one in a few years.  But for thrills, give me petrol and pistons.

Most people who claim to be into cars these days are actually into the gadgets on their cars.  They can't actually drive for shit and couldn't care less what's under the bonnet, as long as it can park itself and play a Spotify stream via their mobile.

Spyder or Berlinetta?

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13 hours ago, Majorpain said:

@spygirl  Its interesting your saying that the jobs are coming back from China, the industrial production index looks very artificial, I imagine its pure coincidence it keeps steadily growing at around the target area!  However, if it didnt flatline and instead the decline kept going at the same rate from 2009 then YOY it shouldnt be far off negative by my reckoning.

Whatever happens, its a given that China will not grow its GDP at 5-6% for the next 100 years, when they have a recession how will the CCP deal with the consequences of a 30 year build up of debt?  The army training for a working class insurrection wouldnt be a waste of time!

 

They'll deal with it the same way everybody else has, by printing money! Since the banks are already quasi-nationalised restructuring their balance sheets shouldn't prove difficult. Coping with a nationwide house price crash and a concomitant collapse in economic activity will be the challenge. 

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2 hours ago, zugzwang said:

They'll deal with it the same way everybody else has, by printing money! Since the banks are already quasi-nationalised restructuring their balance sheets shouldn't prove difficult. Coping with a nationwide house price crash and a concomitant collapse in economic activity will be the challenge. 

Their big problem is the west will be putting them back into their box in the next cycle.Lots of manufacturing coming back.Without western tech they will be back to making plastic toys and xmas decorations.They are in a very difficult place.Most wealthy Chinese are and have been trying to get as much money as they can out of China.Its likely the Fed is tightening the world into a debt deflation so that there is massive demand for treasury notes,just as China will need to sell a lot.The only way to stop a dollar collapse is to make sure the biggest forced seller is selling into massive demand.I see the dollar going to 86 then 107 on the dollar index.Slight chance it undershoots to 76 first.

UK domestic stocks without exposure to the Chinese credit cycle have been smashed down to multi decade lows in some cases.Its ironic that a lot of these stocks will actually be facing into a much better macro picture than the stocks who need China to keep doing well and growing credit.The UK is lucky in lots of ways that the only real bubble it has is in house prices.Due to the structure of the mortgage market its likely only around 10% to 20% of mortgages will struggle in a house price crash.BTL of course will suffer the most pain,but their equity and their own home can go under.The other big problem the UK has is welfare spending and public pensions.Likely inflation will do the job of cutting those.

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Inoperational Bumblebee
22 hours ago, Thorn said:

She suddenly isn't looking at me with that sort of look she had before.

Is that a good thing or a bad thing? :D

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4 minutes ago, Inoperational Bumblebee said:

Is that a good thing or a bad thing? :D

Too early to say!😎

Just been over at ToS and given up because it looks crap now.

... so...can anybody remind me of that website- mentioned before on the earlier thread- for that lad who reports of macro trends in chemical supply and demand worldwide? 

I fancy having a look at what he is seeing...? 

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40 minutes ago, Thorn said:

Too early to say!😎

Just been over at ToS and given up because it looks crap now.

... so...can anybody remind me of that website- mentioned before on the earlier thread- for that lad who reports of macro trends in chemical supply and demand worldwide? 

I fancy having a look at what he is seeing...? 

Used to be you looked at US transports as the lead indicator for end demand, with reduced local production some say Chinese manufacturing output with just in time trends is the global weather vane for the market and that is where you will see the tell first, though stands to reason chemicals and there raw material demand would lead that too so something like the copper price would be another to look at.

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6 hours ago, Thorn said:

Too early to say!😎

Just been over at ToS and given up because it looks crap now.

... so...can anybody remind me of that website- mentioned before on the earlier thread- for that lad who reports of macro trends in chemical supply and demand worldwide? 

I fancy having a look at what he is seeing...? 

 

https_%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F663d94eb-62b7-4a89-8276-cb549da7bce8_FINAL.png

https_%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F996c45e5-ac9c-4b4e-8650-30d22959b6b0_FINAL.png

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