Credit deflation and the reflation cycle to come.

[Bobthebuilder]

ECB going printy, printy.

[Noallegiance]

2 hours ago, Bobthebuilder said:

ECB going printy, printy.

That's because it clearly worked so well. They just need to do more of it. 

Just keep going over the top lads! 

[spygirl]

3 hours ago, Bobthebuilder said:

ECB going printy, printy.

No, more complex. And stupid.

With one polciy ECB are smothering Europe with a pillow.

With another, they are giving it mouht to mouth.

Its them os gormless, fucked concept.

Again, cheap money has not helped Europe - its stopped the banks going and its stopped the German having to transfer oney to the countroes it lent money to.

Again, hey cannot let he Euro drop against tthe dollar. US is in a belligerent mood - its not just Trump.  Europe gets a massive pass on exporting German cars.

 

[sancho panza]

1 hour ago, Noallegiance said:

That's because it clearly worked so well. They just need to do more of it. 

Just keep going over the top lads! 

Probably says more about the Eurozone's growth figures than the figures themselves.

Dax taking it well.

 

Everythign responding well worldwide.Glad Mario will do whatever it takes.

[DurhamBorn]

 

The ECB is reverting to more monetary support just three months after policy makers decided to end their bond-buying program.

 

[Thorn]

Some lad once predicted this. 

Ahem... from Page 1.

…"Once this does hit the central banks will be slow to react with the right response as they themselves will be shocked at the speed and scale.They will panic and print direct into the economy by passing money/debt to governments at 0.1% or zero coupons.."

Some lad.

 

[Gin]

1 hour ago, DurhamBorn said:

 

The ECB is reverting to more monetary support just three months after policy makers decided to end their bond-buying program.

 

Silly question DB..but is this the early stage of the central banks panicking as you forecast

[sancho panza]

52 minutes ago, Gin said:

Silly question DB..but is this the early stage of the central banks panicking as you forecast

10 years off QE then three months off,then resumption.I'd say the crows are maiking a a racket.

[Harley]

Cash is trash, always was, always will be.

[DurhamBorn]

57 minutes ago, Gin said:

Silly question DB..but is this the early stage of the central banks panicking as you forecast

Yes,its exactly what we expected,though much sooner.We thought it would take 18 months to 30 months from tightening to real problems showing,so the fact the EU cant even get past 3 months shows what a basket case it is.It gets interesting though when they start to push the money direct to government instead of banks.

[DoINeedOne]

So i should buy more gold and silver right.... lol

 

Need to wait till pril new tax year funds are tied up in company account

[Thorn]

21 minutes ago, DurhamBorn said:

Yes,its exactly what we expected,though much sooner.We thought it would take 18 months to 30 months from tightening to real problems showing,so the fact the EU cant even get past 3 months shows what a basket case it is.It gets interesting though when they start to push the money direct to government instead of banks.

Do you still reckon gold still down to 1250 level?

[Harley]

38 minutes ago, Thorn said:

Do you still reckon gold still down to 1250 level?

Strengthening in GBP though.  But currently coming out of a lower low so will have to see.

US markets may be softening and don't think much of the FTSE bounce - turn on the way, or at least churning?

[DurhamBorn]

1 hour ago, Thorn said:

Do you still reckon gold still down to 1250 level?

Yes,but i dont like short term trading,my main aim is GDX to 26+ and i dont care how it gets there as long as it does.Its easy to be whipsawed out of the complex and that would be a mistake.

[sancho panza]

And we spare a thought for Helicopter Ben who was jsut plain wrong about the debt deflation in the Great Depression.

Superb piece from Wolf

 

https://wolfstreet.com/2019/03/07/us-dollar-jumps-to-52-week-high-in-cleanest-dirty-shirt-syndrome-on-new-ecb-stimulus-as-old-ecb-stimulus-fails-to-stimulate/

The real worry is the economy in the Eurozone.

The Dollar Index (DXY), which tracks the dollar against the euro, yen, pound sterling, Canadian dollar, Swedish krona, and Swiss franc, and which is dominated by the euro, jumped 0.83% to 97.71 at the moment, hitting at least briefly its 52-week high, as the euro slumped 1.1% against the dollar, following the ECB’s announcement earlier today. But it wasn’t just a one-day event for the dollar, but an eight-day rally in an uptrend that started in early February (data via Investing.com):

The real worry is the economy in the Eurozone – despite the fabulous stimulus the ECB has heaped on it for years, including a brutal negative-interest-rate policy and massive QE that has inflated the ECB’s balance sheet to over 40% of Eurozone GDP (by comparison, the Fed’s balance sheet is down to 19.5% of US GDP).

The Eurozone economy is deteriorating rapidly. In the post-meeting press conference today, ECB president Mario Draghi announced that the ECB had slashed its economic growth forecast for the Eurozone to 1.1% for 2019, a sharp cut from its forecast of 1.7% growth at the December meeting, and down from its 1.9% growth forecast last summer.

Instead of admitting that its radical experimental monetary policies were a colossal error as the economic growth is now dwindling despite or because of the stimulus, and instead of gradually raising its policy rates above the rate of inflation to end its brutal “financial repression,” and instead of shedding the bonds on its balance sheet to push up long-term interest rates and force a restructuring of the bogged-down European economy so that it would liquidate or restructure the debts of zombie companies and lighten the load of restructured companies to allow them to have a fresh start – all of it at investors expense – the ECB does the opposite.

It promises new bank liquidity programs in the Eurozone which is already drowning in central-bank liquidity, to get banks to lend more to these zombie companies and keep them from restructuring their debts.

These targeted longer-term refinancing operations (TLTRO-III) are loans by the ECB to banks at a rate indexed to the ECB’s “main refinancing operations” rate, which is currently 0.0%. The idea is that banks would lend this free money aggressively. In the past, banks used these loans to aggressively buy the government bonds of their countries, such as shaky Italian banks buying shaky Italian government bonds, and collecting the difference while getting everyone worked up about this “doom loop.”

There will be unspecified incentives in these programs to discourage this type of thing, but good luck. The loans would start in September 2019 and end in March 2021, with maturities of two years.

But the last thing the Eurozone needs is more liquidity after having been doused with ECB liquidity. The negative-interest-rate policy and QE have repressed yields and have made dirt-cheap credit available to just about all comers. So the problem in the Eurozone is not a lack of cheap credit.

The ECB has named this program “TLTRO-III” because it’s the third such creature of liquidity injections since 2014.

But at least pushing the ECB’s deposit rate further into the negative and restarting QE are off the table. There appears to be no appetite for them.

Markets were spooked – instead of levitating due to the promised bank liquidity programs.

Stocks in Europe sold off, particularly European banking stocks, with the shares of favorite piñata Deutsche Bank – now, there’s something that needs to be cleaned out at investor expense – dropping 5.1% (to €7.75) since the announcement earlier today. The Stoxx 660 bank index, which includes banks outside the Eurozone, fell 1.1%.

The dollar index, against this background, jumped to its 52-week high, a sign that the US economy, including its manufacturing sector, is currently seen as the “cleanest dirty shirt” among the major economies.

More and more voices, including those from current and former Fed governors, are trying to prepare the markets for a Fed rate hike or two later this year — or one later this year and one next year. Yes, they say, the economy hit a soft patch in Q1 due to the government shutdown, delays and lower tax refunds, and some other factors, and Q1 GDP will be lousy. But these voices warn markets that the pace will pick up in Q2 and Q3 to a decent but not exhilarating pace, and that in this environment, the Fed isn’t quite done yet with its rate hike cycle.

[Rave]

On 06/03/2019 at 09:52, Cattle Prod said:

Mish on driverless buses

https://moneymaven.io/mishtalk/api/amp/mishtalk/economics/full-sized-autonomous-bus-test-in-singapore-wpO4tvIviEyQUe_ttQAKsg/

"Full-size bus testing is underway. Some readers tell me this could not happen for decades. My calendar says its 2019."

Can you imagine how profits would increase if you don't have to pay drivers? Who'd be a driver now. I think someone a couple of hundred pages ago was looking for work as a bus driver, and I don't mean to offend them or other people who drive for a living. But this is happening.

I won't be sorry to see the back of tube drivers paid 80k a year to push a button either, especially when the DLR has been driverless for years. It's going to be some fun with the unions. 

Here's an anecdote on how changes can happen quickly, despite entrenched an politically supported unions:

Prior 2000, there were 2500 or so taxis in Dublin. No new licences were issued, and they changed hands for over 100k. Taxi queues at night could take 3 hours. They has a total monopoly on the city, and the public was sick and tired of it as the population grew. A junior coalition govt partner forced the deregulation (against the cabal who protected the taxi industry) and overnight, anyone with 5k and a licence could get a plate. Cue uproar, taxis blockading the airport, the Dail (parliament), motorways etc. 

But here's the interesting thing: no one cared. The public had been held to ransom, and were delighted at the deregulation. I distinctly remember it being a topic of much hilarity, despite the inconvenience. After about two weeks, they gave up and went back to work. Soon enough, there were 25,000 taxis in Dublin.

An extreme example pehaps. But when people want something to change, the unions won't be able to prevent it. Interesting times ahead.

 

I think that was me, in response to a chap who reckoned that a coach company he knew were having to pay £200+ a day in the summer to attract competent drivers. As it stands I plan to go back to work in August as I'm near certain that I with a valid bus licence I could walk into a job in any garage in London, but for a grand a week I'd probably go back sooner...

I certainly don't take any offence, I have no more right than anybody else not to have my job taken away by automation (or have the skill I'm trained in devalued etc.). I actually started doing the London taxi knowledge but gave up pretty quickly, partly because it was hard work, but also because I could see that Uber (and possibly automated vehicles) were already meaning it was not going to be a licence to print money for much longer. If I can't make a living driving buses at some point in the future, I'll accept that with good grace.

However, I don't share your optimism that driverless vehicles will quickly and seamlessly replace human drivers. As it stands, a few isolated driverless vehicles can negotiate suburbs and open roads quite safely, using radar and image recognition to negotiate obstacles. I think it will be a very difficult kettle of fish getting them to negotiate cities like London where much of the road layout predates powered vehicles, let alone autonomous ones. There are thousands of sections of road in London that cannot be negotiated by two vehicles travelling in opposite directions at the same time, meaning that drivers have to pull in to gaps to allow the oncoming car to pass. There's a road 200 yards from my house which occasionally snarls up because it's S-shaped and people go piling round the corners without checking to see if the middle section has an oncoming car in it; if they're being followed by another car they then can't reverse and a torturous process of pulling mirrors in and inching past ensues. Unless every driverless car talks to every other constantly using a standardised system then they will inevitably get themselves into similar situations, and the level of processing power required to compute how to get themselves out of that situation must be astronomical. Maybe I'm behind the times on how well 'neural network' computers are coming along, but I don't think they'll be up to it. I also think that as soon as driverless cars become widespread, game theory will kick in and people will start taking advantage of them. Very few people would just stroll out in front of a human driven car to cross the road, partly because they don't trust the driver to slam the brakes on, and partly because even if they did it would be likely to result in an angry confrontation. With a driverless car that can react and brake in 20ms, and won't threaten to thump you for being a twat, they'd be far more likely to (or pull out of a side road in front of it, etc.). My opinion is that drivers and driverless cars sharing the roads will never work well, and when we do inevitably go over to having autonomous vehicles it will have to be a wholesale change, with human drivers outlawed, new laws against 'jaywalking' etc. I'm 39 and I'm really not sure that it will happen in my lifetime, at least not worldwide.

Anyway if you read this CP I've been meaning to ask your expert opinion on BPC: http://www.lse.co.uk/SharePrice.asp?shareprice=BPC

...given your previous comments on junior oilies. Having opened a share ISA to stag the Royal Mail float, I rolled over my profits from selling near the top into buying some of their shares for no better reason than that I'd seen Tom Bulford tip them years before, and that the chat on LSE was full of amusingly optimistic pumpers. I've spent most of the intervening years underwater, with the occasional spell in the black when some good news temporarily causes a buying frenzy. They've been plodding along for years trying to get a farm in deal done to try and drill for the potential 16bn barrels under the Bahamas. I've mentally written off the small amount of money and I'll just hold them until they do a deal or go bust; just wondering if you think there's any chance of them actually getting it done before I retire...

[lid]

I've enough money to live comfortably for the rest of my life, provided I die next Wednesday

I need to read this thread 

[leonardratso]

1 hour ago, lid said:

I've enough money to live comfortably for the rest of my life, provided I die next Wednesday

I need to read this thread 

long gamer eh!

[Yellow_Reduced_Sticker]

Meanwhile back on the high street...

"High street retailers suffer WORST February in a decade!"

https://uk.finance.yahoo.com/news/high-street-retailers-suffer-worst-000100533.html

"LK Bennett COLLAPSES to become latest high street fashion victim"

https://uk.finance.yahoo.com/news/lk-bennett-collapses-become-latest-154211422.html

 

 

[King Penda]

1 hour ago, Yellow_Reduced_Sticker said:

Meanwhile back on the high street...

"High street retailers suffer WORST February in a decade!"

https://uk.finance.yahoo.com/news/high-street-retailers-suffer-worst-000100533.html

"LK Bennett COLLAPSES to become latest high street fashion victim"

https://uk.finance.yahoo.com/news/lk-bennett-collapses-become-latest-154211422.html

 

 

They could learn to code

[DoINeedOne]

Yamana Gold to develop Argentina mine with Glencore, Goldcorp

(Reuters) - Miners Yamana Gold Inc, Glencore and Goldcorp Inc said on Thursday they signed an agreement to develop and operate Yamana’s Agua Rica gold and copper mine in Argentina using infrastructure and facilities of the three companies’ existing venture in the country.

https://www.reuters.com/article/us-yamana-gold-argentina-deals-idUSKCN1QP04K

[Lightscribe]

Fresnillo looks to have bottomed from the recent dip, scalped the gains from Hochshild in my daughters ISA and bought FRES so I could balance out the ISA more in the PM miners. The main issue Fresnillo has is the Mexican government, otherwise its a solid pick for when PMs run.

[spygirl]

Metro Bank SP falling again.

Maybe its SP will follow its newspaper name sake - cost 0p?

[spygirl]

18 hours ago, DurhamBorn said:

 

The ECB is reverting to more monetary support just three months after policy makers decided to end their bond-buying program.

 

The ECB and Euro and European fuckup is down to the gormless central banks/economic theory.

Idiots.

ECB giving banks money, who just buy their host countries bonds and sit on it, concetrating the risk - banks blows, country blows.

No money exist to the economy. Banks get to skim a very thin profit using cheap ECB cash - beats working for a living.

Whilst the real European economy is starved off funds - as they dont call in the bad loans, or transfer money to the struggling areas.

 

[Majorpain]

24 minutes ago, spygirl 🏆 said:

The ECB and Euro and European fuckup is down to the gormless central banks/economic theory.

Idiots.

ECB giving banks money, who just buy their host countries bonds and sit on it, concetrating the risk - banks blows, country blows.

No money exist to the economy. Banks get to skim a very thin profit using cheap ECB cash - beats working for a living.

Whilst the real European economy is starved off funds - as they dont call in the bad loans, or transfer money to the struggling areas. 

 

The new ECB loans are less generous than the previous TLTRO's, so its a small step in the expected direction but there is a long way to go till the kraken is released.