# Inflation



## BSD (26 October 2007)

Inflation is approaching concerning levels in Australia. 

Inflation is a result of an economy running beyond its capacity.

Australia has not been able to respond to terms of trade booming due to massive capacity restraints. 

We cant hire enough skilled workers due to lack of training and a delayed immigration response. We haven't spent money on simple stuff like communications, rail and ports. 

The floating currency has assisted as a shock absorber but at some level this will become less effective. 

Contemplate a Yuan revaluation increasing costs of Chinese imports or a fall in commodity prices reducing demand for the AUD. If TVs (ect) that cost the same as 15 years ago join food and rents and rise by 4% annually - what happens to interest rates? 

The strong AUD has shielded us so far from oil prices and imported inflation. But when the terms of trade flatten or fall, who wants to own AU?. We are as leveraged as the Yanks and have a far smaller manufacturing base. Our current account deficit is far beyond the previously fearful 6% of GDP despite our terms of trade being multiples of past levels.

This is frightening...

What happens to our CAD when copper, coal and iron ore drop 30%? Who would want to hold AUD when we have no ability to attract FOREX. 

Whithout mining, what are we good at? 

Property speculation and banking?



We are kidding ourselves...

If we begin to import inflation from our trading partners and the stuff we buy that is the same price as 10 years ago starts rising it is not hard to see 5%+ inflation. 

The RBA will ramp rates as hard as they need-to in such a situation. 

While I dont think they will reach the 20% rates of late 80s and 90s - contemplate the average Aussie paying off his $350K mortgage at 10% - let alone higher.

We have a market trading at extremely high PEs in the face of this risk and a bunch of pollies ready to pour more fuel on the fire with $30bn worth of cash and no real reform. 

I am typically bullish by nature, but inflation worries me to the core.

Costello tells lies about his comfort in a 2% headline rate, but this is a false number. The same BS number exceeded 4% recently when the underlying was far lower and you can guess which number he chose then???

Anyone else contemplating interest rates 1%+ more than current due to inflation?


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## Julia (26 October 2007)

Some more on Mr Costello's attempts to cast the most favourable light on his own situation from today's 'Crikey.com'
Quote:
"On November 1 last year, The SMH carried a front page interview with Peter Costello in which the Treasurer said the commodities boom was over. 


Fast forward 12 months and he’s at it again, predicting a “huge tsunami” will engulf financial markets, the US economy is going down, China will weaken, Australia will fall into recession, the earth with split asunder and issue forth plagues of toads and serpents, foul wraiths and dark vapours. And boils, don’t forget boils. Australians will always suffer more boils under a Labor government than under a Coalition government. 


And that’s why the Reserve Bank shouldn’t lift interest rates. Or something like that.


Which leads to the challenge of picking the odd one out: Warren Buffett, Hu Jintao, Don Argus, Peter Costello. 


According to Buffett, the subprime wash-up will hurt for up to two years, but the US economy overall will move forward. (The Sage of Omaha is in South Korea inspecting the local subsidiary of the Israeli industrial tools company he bought last year – just another little bit of globalisation.) 


According to Argus, commodity demand and prices are staying high despite US weakness. The chairman told the BHP AGM in London overnight that Chinese growth is continuing and India is following it, 10 or 15 years behind. 


According to Hu, well, according to the Chinese government, September quarter growth printed at an annualised rate of 11.5 per cent, down a fraction from the June quarter, but the same as the annualised rate for the first nine months of the year. China’s about to overtake Germany as the world’s third biggest economy. 


And Prophet Pete Costello is predicting extreme difficulty ahead which will turn into Armageddon if Labor wins the election and he’s not given the chance to be prime minister. 


The line of the day goes to Macquarie Bank international economist Mark Tierney: “Perhaps the new Copernican revolution is the discovery that the world economy does not orbit the US.” 


Someone should tell Pete. "
End Quote


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## clowboy (26 October 2007)

Yes, I wouldnt be suprised to see rates above 10% within the next 3 years.


Same as I expect labour is likeley to win the election. 

I found this chap interesting

I am a life long Liberal voter. I have never been a swinging voter. However this election I am voting Labour.  you see I work in the mining industry and the economy is just to darn good under John Howard.  we need Labour in there so that we can get unemployment back up to 10 per cent.  This will allow us to find and hire people with realistyic expectations on remuneration.  Should do wonders for the housing crisis, too!.

Mike Young, Floreat,

A letter to the editor of the west.


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## Smurf1976 (26 October 2007)

[B said:
			
		

> BSD's post modified by Smurf to make a point or two[/B]



Not trying to be rude or funny here. I just thought changing a few words in BSD's original post was the best way to make my point without writing something long and complex. 

Inflation is approaching concerning levels in Australia. 

Inflation is a result of *an increase in the money supply*.

Australia has not been able to respond to terms of trade booming due to massive capacity restraints. 

We cant hire enough skilled workers due to lack of training *and the consequences of 1990's economic rationalism, outsourcing and privatisation*. We haven't spent money on simple stuff like communications, rail and ports *and water, gas and electricity*. 

This is frightening...

Anyone else contemplating *water and food shortages, inability to find a tradesman to do the work, housing becoming unaffordable, the lights going out and* interest rates 1%+ more than current due to *our collective short termism.*


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## Kimosabi (26 October 2007)

Inflation is such a scam by the RBA.

They're worried about inflation, but they create the Inflation be creating more money out of "Thin Air"

Mogambo Guru describes the scam of inflation best


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## BSD (26 October 2007)

Kimosabi said:


> Inflation is such a scam by the RBA.
> 
> They're worried about inflation, but they create the Inflation be creating more money out of "Thin Air"
> 
> Mogambo Guru describes the scam of inflation best




The RBA doesn't calculate inflation, the ABS does.

I hope the flat-earthers like this simpleton (in the link) don't take over this thread, I would prefer a discussion based in reality.


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## Shane Baker (26 October 2007)

BSD said:


> The RBA doesn't calculate inflation, the ABS does.
> 
> I hope the flat-earthers like this simpleton (in the link) don't take over this thread, I would prefer a discussion based in reality.




So you aren't an Austrian economist....in the GW sense


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## Kimosabi (27 October 2007)

BSD said:


> The RBA doesn't calculate inflation, the ABS does.
> 
> I hope the flat-earthers like this simpleton (in the link) don't take over this thread, I would prefer a discussion based in reality.




Hopefully Dictionary Definitions won't disturb your concept of reality.



> _in·fla·tion_
> 
> noun.
> 
> ...




It is because of people's ignorance that institutions like the Reserve and Central Banks of the World are allowed to continuously inflate money suppy which makes the money you had in your pocket in the morning, worth less by the afternoon. Have a look at Zimbabwe to see an extreme example of this happening as we speak.

If we had a "Sound Monetary" system, there would be hardly any INFLATION because there is only so much gold and silver in the World.

It's a joke how the independant RBA controls both Money Supply and Interest Rates. While the RBA has this control of Inflation and Interest Rates they can manipulate Booms and Busts. It's also a joke how the Australian Population accepts this because of their ignorance.

Now if your so worried about Inflation, you'd better get down to Parliament and start demanding answers from your politicians as to why they allow the insidious scourge of Inflation to continue by a "independant institution", of which Kevin Rudd made a number of references in the debate supporting the continuation of an "independant" Reserve Bank.


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## Flying Fish (27 October 2007)

lol. Just reading through this thread and crikey people get immotive about politics. Makes me wonder if the people posting derive there income from the great political machine.

here's an example of taxpayers money at work... I received about 6 letters from the major parties the last two weeks, each nicely addressed to moir. 

Kevin Rudd has his own web site www.rudd07.comn.au spewing forward spam on pages where I really don't want to see hes four eyed face.

Politicians are there to serve them,selves otherwise they would be out of a job. Come the next election I'm voting for myself. I'll make a box, Vote for me party.


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## numbercruncher (27 October 2007)




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## BSD (27 October 2007)

Kimosabi said:


> If we had a "Sound Monetary" system, there would be hardly any INFLATION because there is only so much gold and silver in the World.
> 
> It's a joke how the independant RBA controls both Money Supply and Interest Rates. While the RBA has this control of Inflation and Interest Rates they can manipulate Booms and Busts. It's also a joke how the Australian Population accepts this because of their ignorance.




Why stop at gold and silver? Why not have nickel, copper and oil as reserves to base a currency on? 

Gold and silver are pretty rocks, thats it. They have no underlying value beyond that prescribed by fiat - the same as paper currency. 

The gold bugs could avoid the 'daily devalution' of their beloved currency by taking it from under their mattress and holding bonds or any other investment returning a greater return than inflation. 

Sadly, gold pays no income; being only a pretty rock, it has no intrinsic value or return beyond that prescribed by speculators - the same as paper money. 

Why is it a joke that the RBA sets rates? Would you prefer politicians implemented monetary policy? 

The RBA sets interest rates by manipulating the money supply. After stating the cash rate target, they participate in the money markets to get the rate to match. The role of interest rate targetting and control of money supply cannot be seperated. 




			
				SMURF said:
			
		

> Inflation is a result of an increase in the money supply.




Not really. Inflation can be caused by increase in money supply, but only by way of the effect the increase in money supply has on demand in the economy. Inflation is a sign that activity is exceeding capacity. 

The US is a great example.

They have injected excessive amounts of money into their economy over the last five years (wrongly in my view) but this has not necessarily been inflationary because the US had an enormous amount of excess capacity, productivity growth and imported deflation from the effects of globalisation. 

Because we do not live in a closed system - inflation is created by many external factors also. 

Therein lies my original point. I am getting the feeling that we are heading for higher inflation in Australia because:

1. We do not have a lot of excess capacity at the moment.

We have not spent money on training and infrastructure to allow for the expected increase in economic activity (external demand for commodities for instance) to persist without prices rising. We need to spend money on communications, roads, ports, training etc - but we have chosen to blow money on middle class welfare and 'investing' in renovating ugly federation style homes. 

2. Domestic productivity growth has slowed considerably. This means the economy cannot grow at a faster clip without applying pressure on prices.  

3.  The deflationary effect of globalisation achieved over the last 20 years could be slowing over the coming decade. 

Electronics cost the same or less than 15 years ago and are of far higher quality. Textiles are the same, clothes are the same price as decades before. Cars, appliances, furniture; all cheaper now than before but is this effect slowing as developing countries wages increase. 

Now contemplate a sharp rise in the Yuan and the level of inflation we will import. 

Finally, developing economy demand for energy and hard and soft commodities is inflating the basics, further spiking inflation. 




			
				SMURF said:
			
		

> due to our collective short termism.




I totally agree with this statement. 

The sad thing is, when rates go up a couple of percent and the housing hoax ends in tears for many who simply wanted a place to live and not an 'investment opportunity'; the blame will be slated on whoever is in power at the time and not the parties that have allowed this short-termist thinking to prevail. 

We have grown very accustomed to low inflation and the cheap debt this has allowed. Are we prepared to accept higher interest rates and the concept of easy money from leverage not working?

I don't think so.


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## Aussiejeff (27 October 2007)

numbercruncher said:


> View attachment 14506




I'll drink to that! errr.... but NOT from one of THOSE cans! ... lol

*Serious* - Todays news that house prices in Melbourne rose 19% in the last 12 months won't help the inflation scenario either...


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## KIWIKARLOS (27 October 2007)

thw commodities boom is no where near over it may have a couple years along the track with a slower pace but overall i believe its 10-20 year phase at least!

Why. China is in a process of rapid urabanisation they still have a loooong way to go with millions of people a year flocking to citys the infrastructure required is huge. This urbanisation will take many many years. We also have to remember that the worlds population is increasing exponentially (which i dont think can be sustained) by anyhow with 10 Bill people by 2020 i would say there will be more demand for food, energy and commodities.

Australia doesn't only export iron and copper we export LNG , coal and have the worlds biggest uranium reserves not to mention the biggest geothermal reserves. Because we have such cheap energy sources energy intensive operations such as aluminum production etc will stay here.

i dont know alot about the current account deficite but i believe many countires have them and the global trade imbalances are the main cause. So if we address the imbalances we address the CAD.

also with food price infation we are in the grips of a drought and droughts dont last forever one day (prob sooner rather than later) we will have a strong El nina and crops will flourish. El nina looks to be currently forming now and NSW is 75% drought effected not 95% like a couple years back


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## ithatheekret (2 November 2007)

There's only one problem with the train of thought in this thread ..... it's focus is on inflation , which developes in it's own way , usually edged on by market forces and manufacturing/processing pass ons etc.

Being the uncontrolable beast that it is , perhaps first before we hunt it down , we should ascertain its species , size and power .

The first test shows that it is not the vanilla inflation we are so mind numbingly told of by every would be economist and market reader/analyst , it is in fact stagflation ...... a completely different animal than the one the smart money is hunting !

Whilst our dirt sales are going to hold the fort for a few more years , we will see higher prices evolve as demand soars higher throughtout the boom .

I heard many an analyst quote a 20 year boom guaranteed on the back of China , but I beg to differ , as China pushes it's way through to a net exporter , with a keen eye on India , we too will see our dirt sales take on a second innings , as China and India compete for further ore sales ,
The main winner would have to be coal by then , as costs will still be relatively cheaper for production methods used at present and don't look much like changing in the two above mentioned economies .

The key factor for any disruption would clearly be Taiwan , if China were to retake their province by force , the shock waves would be felt by every economy on the planet .Now to add flavour to a current dilema on oil , the gurus have set an inflation adjusted prices per barrel at $101 , dating back to 1971 , but true figures predating that little blip , have it at $116.85 ........
Now with CPI knocking the tiles of the roof , perhaps the focus should be defered to stagflationary pressures , which can lead on to either hyper-inflation , which smells close or puncture the waterbed and leak deflation everywhere ....... with the exporting help of Japan of course , it's not just cars they send off shore . An economic clash with China would force that issue further and make it a mandatory obligation for Japanese politicians to share the pain around globally , all with the colonizing help of the Yen .


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## Uncle Festivus (28 February 2008)

Recent inflation has even spread to home appliances, one of the most oversupplied goods in China.          

               Haier, China's biggest appliance producers and an exporter of mini refrigerators and other appliances, said last week it will raise domestic prices of refrigerators and washing machines by 7% to 10% in response to higher producing costs. 

               The price rises are notable because winter is usually the slowest season for selling appliances, according to Citi's Xue, who added that it is "probably the first time in the past 15 years that we have seen price increases" in that sector. 

               Guangdong province, whose minimum wages will be the country's highest as of April, is China's largest manufacturing center for home appliances. That could put even more upward pressure on appliance prices.


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## gfresh (28 February 2008)

It will be interesting if we ever do get to that point where the price of Chinese good really begins to accelerate - not just a few dollars, but 5-10% as discussed above.. or beyond. This can surely only be the start.. As well all know - the cost of coal, and iron ore has skyrocketed in recent months. It must only be a matter of time before these raw goods prices have to be passed on in the finished product. 

The lowest common denominator for a long time has been cheap Chinese goods - driving out our own manufacturing industries, along with many others across the world. Most of these went years ago. There is not much to replace it.

Whether it be a washing machine, clothes, or even just a basic item such a fork - people are so used to getting these basic items at bottom prices, it's been allowing them to spend money on larger ticket items such as property or new cars. 

Where does the RBA draws the line at interest rates? and when do things come back into equilibrium?  People somehow think that inflation will one day suddenly come down, and so will interest rates - but it could be years until this point comes.


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## Wysiwyg (18 March 2008)

Higher commodity prices, comes back as higher goods and services = higher wages to compensate.

Which comes first, the higher wages or the higher goods and services? The grocer says he puts the prices up to pay the higher wages.The worker says he needs the higher wages because the price of goods and services are going up.What`s the problem here?Who is fooling who?



> The President of the Victorian Farmers Federation, Simon Ramsay is calling for greater transparency in food pricing.
> 
> "Five per cent is an extreme percentage. we are finding mainly in the fresh vegetable area there are significant mark up between farmgate and shelf prices given there is little process between farmgate and the shelf you would wonder were those profits are going.


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## mayk (18 March 2008)

WYSIWYG: Is it a chicken and egg problem?


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## AnDy62 (18 March 2008)

That vicious cycle was targetted under the Howard govt ....WorkChoices etc - i.e. by linking wages to productivity. But hey, who can complain about Rudd and his superficial cliches, what a champion


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## BSD (18 March 2008)

AnDy62 said:


> That vicious cycle was targetted under the Howard govt ....WorkChoices etc - i.e. by linking wages to productivity




Just a shame he failed to spend the enormous surpluses on increasing productivity through infrastructure and education spending rather than on middle class welfare and vote buying. 

I don't know if making teenagers work Sundays with no overtime was going to tame the inflation genie.

I don't disagree with your Rudd comments.


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## Some Dude (18 March 2008)

AnDy62 said:


> That vicious cycle was targetted under the Howard govt ....WorkChoices etc - i.e. by linking wages to productivity. But hey, who can complain about Rudd and his superficial cliches, what a champion




I never quite understood this. Why are things like wages preferred to be linked to things like productivity via a legislative framework? I heard an AMP report today that indicated that since 1986, house prices had increased 400% but wages only 120%. Why should wages be constrained by anything other the same forces that constrain commodities and asset prices which can also affect inflation?


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## AnDy62 (18 March 2008)

Some Dude said:


> I never quite understood this. Why are things like wages preferred to be linked to things like productivity via a legislative framework? I heard an AMP report today that indicated that since 1986, house prices had increased 400% but wages only 120%. Why should wages be constrained by anything other the same forces that constrain commodities and asset prices which can also affect inflation?




Hmm there are good points and bad points. If wage growth becomes detached from productivity, producers will shed labour for capital - unemployment etc etc. Whether this happens in reality to a meaningful extwnt I'm not sure. Also, cost-push inflation would have crippled Australia's exporters and our CAD would be more outrageous than it already is. Overall its a balance ... and one the legislative structure has decided upon. As for the housing boom that's separate to AS/AD analysis IMO, rather a change in the economy's composition.


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## Kimosabi (18 March 2008)

*Well, well, well, what do we have here, could the Reserve Bank be the cause Inflation in Australia???*

*I wonder where all that extra money came from???*




*Definitions*

M0: The total of all physical currency, plus accounts at the central bank that can be exchanged for physical currency. 

M1: M0 - those portions of M0 held as reserves or vault cash + the amount in demand accounts ("checking" or "current" accounts). 

M2: M1 + most savings accounts, money market accounts, and small denomination time deposits (certificates of deposit of under $100,000). 

M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements. 

Source ==> http://en.wikipedia.org/wiki/Money_supply


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## noirua (18 November 2008)

UK, RPI inflation, fell from 5.2% to 4.5% in October (the retail prices index that includes mortgages, fell from 5% to 4.2%). Forecast for the lowest point in 2009 is -1% for the retail prices index.


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## Dowdy (19 November 2008)

Inflation in America is over 10% despite what the US government says.


Just go here to check it out
http://www.shadowstats.com/alternate_data


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## noirua (20 January 2009)

The headline annual rate of inflation (RPI) in the UK fell in December to 0.9% from 3%.  This is the lowest rate ever recorded.
The (CPI) which excludes mortgage costs, fell to 3.1% from 4.1%.

The £ crashed to US$1.40 on news of the banking crisis on Monday. Down from US$2.05 in 2007.

UK jobless is set to reach 3.4 million by the end of 2011, forecaster Ernst & Young Item Club predicts.  All of the UK's economic statistics are reported to be in free-fall.

The UK economy is forecast to see its largest contraction since 1946.


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## Aussiejeff (21 January 2009)

noirua said:


> The headline annual rate of inflation (RPI) in the UK fell in December to 0.9% from 3%.  This is the lowest rate ever recorded.
> The (CPI) which excludes mortgage costs, fell to 3.1% from 4.1%.
> 
> *The £ crashed to US$1.40 on news of the banking crisis on Monday. Down from US$2.05 in 2007*.
> ...




I also noted the other day that some of the world's big currency traders are advising others to toss the pound and go for the yen... how low will the stodgy Brit brick go?


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## noirua (21 January 2009)

Aussiejeff said:


> I also noted the other day that some of the world's big currency traders are advising others to toss the pound and go for the yen... how low will the stodgy Brit brick go?




My biggest worry is the Aussie economy which is about a year behind Europe.  WA is contracting sharply and QLD and NSW are also in trouble.   The Aussie$ has moved down as sharply as the British pound and Aussie banks have invested in Europe and will have write offs.

Australia failed to make as big a move away from Britain as it should have done. Bad news UK banks will send their shock waves across the pond to Aussie shores.  Mining, oil and gas etc., are in steep decline, there is no get out of jail card here, we're locked in.

On the British pound, it may be the case that the Euro is so strong, weaker countries in the Eurozone  have a quandary. Less chance of a run on the currency but exports are expensive.  Britain has a run on the pound but exports are cheap.


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## noirua (24 March 2009)

UK inflation, up to February, was zero on the RPI index, down 0.1%, this index includes Housing and mortgage costs.
The CPI index rose 0.2% to 3.2% due to higher food and drink costs. This index excludes Housing and mortgage costs.


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## Conza88 (24 March 2009)

Inflation = increase in the money supply.

If you want to be totally delusional, like every mainstream nut Keynesian / Monetarist, you'll think it's CPI.

Fail..


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## noirua (31 January 2021)




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## Dona Ferentes (31 January 2021)

> "_Inflation is a far more devastating tax than anything that has been  enacted by our legislatures. If you feel you can dance in and out of  securities in a way that defeats the inflation tax, I would like to be  your broker .... but not your partner_."



Wozza Buffett


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## noirua (13 February 2021)




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## moXJO (14 February 2021)

At 16min he rips Dan andrews. Guy is ripping on everyone.


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## satanoperca (14 February 2021)

He makes sense on CCP Dan


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## moXJO (14 February 2021)

satanoperca said:


> He makes sense on CCP Dan



I love old guys yelling at stuff. I'll have to investigate his mag. He seems to be anti political as well which is awesome.


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## satanoperca (14 February 2021)

He makes sense. I am again watching the video.

So I have questioned


Covid cases, sounds bad. 2.4M people died

From total cases of covid 2% will die, if the reporting stats are correct and then looks at the overall figures

7800 Million world popluation, with 2.39M deaths, far out, this virus must be bad, so far it has killed, 0.000..... of the world population

So lets say it was 200M deaths (the world is ending) 0.02% of the world population.

This is crazy stuff, we are happy to kill sharks at a greater rate of 2% per year, but humans (the virus of the earth) cannot deal with.


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## noirua (13 March 2021)

German Consumer Prices Rose in February, in Line With Forecasts -- Update
					

German Consumer Prices Rose in February, in Line With Forecasts -- Update



					uk.advfn.com
				



On year, consumer prices rose 1.3% measured by national standards and 1.6% by European Union-harmonized standards. Both figures were in line with the increases expected by economists polled by The Wall Street Journal.


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## tech/a (13 March 2021)

Ranting babble


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## Smurf1976 (15 June 2021)

So far as consumer prices are concerned, some random examples year on year for the exact same product from the same supplier:

Heating Oil = +12.5%
Communications (mobile) = +10%
Insurance (house & contents) = +6.4%
RAA roadside service membership = +4.4%
Insurance (health) = +3.1%
Electricity (household) = +2.3%

Vaccination (cat) = -4.7%
Insurance (car) = -10.1%

These are all prices paid by me for the exact same service from the same supplier or on a per unit quantity basis.

So from what I'm seeing there's a large discrepancy depending on what you're buying, it's not a reasonably uniform increase in consumer prices.


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## mullokintyre (24 June 2021)

I note that fed Chairman jerome Powell, keeps insisting that any inflation there may be in the US is only "transitory".
Whether this statement turns out to be true or not we will find out in due course.
The problem is, in some ways its irrelevant. 
The loss of purchasing power is not Transitory, but permanent.
The only difference is whether your loss of purchasing power keeps increasing over time, or is stagnant, but it still stays.
As Denis Miller from Birch gold


> Consider our imaginary friend Arthur. He nets $100 per month. After year of 5% inflation, Arthur’s monthly money buys 5% less. Next year, it turns out the inflation spike really was transitory, so the inflation rate goes to 0%.
> 
> Here’s the thing: Arthur’s monthly income STILL buys 5% less.
> 
> ...



For me, car registration and insurance went up by various amounts depending on the jurisdiction, as did household insurance (a whopping 29% over the past three years for a rental property in Darwin). My private health insurance has increased every year, as have local government charges. A simple filling at my dntist last week cost $440 bucks, up from the 350 I paid two years ago.
Lucky I mad some money trading.
Mick


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## bsnews (24 June 2021)

I think it will all boil down to the USD V's CNY.
If the USD holds then inflation will be transitory for the States.
If it trends down against the CNY, then China will export inflation to the world.
Reporting season will show us the real picture I think it will confirm inflation is here and growing.
Only time will tell, place your bets.
Please remember to gamble responsibly!


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## mullokintyre (3 July 2021)

Pity the poor peasants in Venezuela, After last  hitting 300,000% in 2019, inflation has been maintained at a more manageable 2,3339% a year. The government solution was to keep printing ever larger notes, but with a million  bolivars down to about 32US cents, a million noter would not buy a cup of coffee. The latest solution is to lop off six digits from the currency. With 200 million  denomination as the highest, calculators were blowing fuses and excel spread sheets were gobbling up memory faster than  a crappy windows 10 installation.
Not surprisingly, the Central bank no longer publishes monthly inflation figures, but private  entities are estimating it has come down to 20% in May after being much higher in April.  Moving from a basket case to a handbag case.
Mick


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## qldfrog (3 July 2021)

mullokintyre said:


> Pity the poor peasants in Venezuela, After last  hitting 300,000% in 2019, inflation has been maintained at a more manageable 2,3339% a year. The government solution was to keep printing ever larger notes, but with a million  bolivars down to about 32US cents, a million noter would not buy a cup of coffee. The latest solution is to lop off six digits from the currency. With 200 million  denomination as the highest, calculators were blowing fuses and excel spread sheets were gobbling up memory faster than  a crappy windows 10 installation.
> Not surprisingly, the Central bank no longer publishes monthly inflation figures, but private  entities are estimating it has come down to 20% in May after being much higher in April.  Moving from a basket case to a handbag case.
> Mick



The miracle of socialism without refuge currency status.
Yet one of the biggest known reserve of crude in the world.
A warning for any country whose economy is based on energy resources or iron ore.
Not thinking of Liechtenstein


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## Smurf1976 (3 July 2021)

mullokintyre said:


> For me, car registration and insurance went up by various amounts depending on the jurisdiction, as did household insurance (a whopping 29% over the past three years for a rental property in Darwin). My private health insurance has increased every year, as have local government charges. A simple filling at my dntist last week cost $440 bucks, up from the 350 I paid two years ago.
> Lucky I mad some money trading.



Supermarket prices are slowly but surely creeping up. Not for everything but one item at a time there's a sudden, permanent increase then a while later something else goes up.

I went to Bunnings with quite a list of things needed today. Things I recall being $14 are are now $16 and so on, a few % here and a few % there but prices are going up yes. Some items I've bought previously and they've definitely risen in price, no question.

Diesel's going up slowly too. Was 135.9 a while ago now I see it's 140.9 per litre. Since diesel around here doesn't have a regular price cycle, it only changes quite infrequently, it's a fair indication. Now diesel's the fuel that powers just about all freight transport.

I haven't seen any single item with a truly massive price hike but but by bit it's noticeable, prices are rising across a very wide range of products.


----------



## Value Collector (4 July 2021)

Smurf1976 said:


> Supermarket prices are slowly but surely creeping up. Not for everything but one item at a time there's a sudden, permanent increase then a while later something else goes up.
> 
> I went to Bunnings with quite a list of things needed today. Things I recall being $14 are are now $16 and so on, a few % here and a few % there but prices are going up yes. Some items I've bought previously and they've definitely risen in price, no question.
> 
> ...



The global economy is pretty is pretty unbalanced at the moment due to irregular supply demand patterns caused by covid, these imbalances are probably behind a lot of price movements, and should rebalance them selves given time.


----------



## noirua (7 July 2021)

In the US, inflation is currently at 5%, its highest level since the financial crisis; whilst in the UK, the Bank of England’s 2% target for 2021 has already been surpassed and there are warnings that inflation will exceed 3% by the end of the year. There are also huge global concerns around the 9% spike in production prices in China as it may be a matter of time before these costs are passed on to the consumer.

Australia's annual inflation rate is set to breach the target of 2% - 3% set by the Central Bank.  Markets look for the 2nd Quarter figure.


----------



## Value Collector (7 July 2021)

noirua said:


> In the US, inflation is currently at 5%, its highest level since the financial crisis; whilst in the UK, the Bank of England’s 2% target for 2021 has already been surpassed and there are warnings that inflation will exceed 3% by the end of the year. There are also huge global concerns around the 9% spike in production prices in China as it may be a matter of time before these costs are passed on to the consumer.
> 
> Australia's annual inflation rate is set to breach the target of 2% - 3% set by the Central Bank.  Markets look for the 2nd Quarter figure.




The Million dollar question is how much of this recent surge in price inflation generated by monetary inflation, or from temporary supply demand imbalances caused by Covid19 and the behaviour shifts it has caused.

I mean in 6 months when all consumer products and home renovations loses its appeal because we can now go to Bali, Disneyland or Europe again, will the supply demand imbalances correct themselves and cause inflation to rebalance.


----------



## noirua (7 July 2021)

Value Collector said:


> The Million dollar question is how much of this recent surge in price inflation generated by monetary inflation, or from temporary supply demand imbalances caused by Covid19 and the behaviour shifts it has caused.
> 
> I mean in 6 months when all consumer products and home renovations loses its appeal because we can now go to Bali, Disneyland or Europe again, will the supply demand imbalances correct themselves and cause inflation to rebalance.



Some of the inflation working its way through world markets is due to the increase in prices of commodities from Australia.  This must be to Australia's benefit unless the Aussie$ starts to get very strong again.


----------



## Value Collector (7 July 2021)

noirua said:


> Some of the inflation working its way through world markets is due to the increase in prices of commodities from Australia.  This must be to Australia's benefit unless the Aussie$ starts to get very strong again.



I would put the surge in prices of things like Iron Ore in the “temporary supply/demand imbalance” category, not the monetary inflation category, so it will correct itself once consumer spending returns to normal.


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## mullokintyre (21 July 2021)

One of Joe Biden's carers must think inflation is a problem in the US.
This is the only explanation I can see after they trotted out the old bugger to give the peasants the good oil on inflation.


> The White House rolled out President Biden on Monday to take a victory lap on Covid and the economy six months into his tenure. This wasn’t the best timing given that asset prices took a header on fears about Covid’s Delta variant (see nearby). But stocks fluctuate, and more notable for the coming months was Mr. Biden’s discourse on inflation.
> 
> Someone in the White House must think inflation is a growing political problem because Mr. Biden spent most of his time on the subject explaining why it’s no problem at all. “Our experts believe and the data shows that most of the price increases we’ve seen are—were expected and expected to be temporary,” Mr. Biden said.
> 
> ...



The US replaced one crazy with  another.
Mick


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## noirua (1 August 2021)

Australia - $1 in 1966 is worth in 2020 $13.46 increase of 1,246% - before 1966 it was £ - s - d




__





						Inflation Calculator | RBA
					






					www.rba.gov.au
				







__





						Inflation Calculator | RBA
					






					www.rba.gov.au
				




UK - £1 in 1966 is worth in 2020 £19.05 increase of 1,805%.








						Inflation calculator
					

Use our inflation calculator to check how prices in the UK have changed over time, from 1209 to now.




					www.bankofengland.co.uk
				




USA - $1 in 1966 is worth in 2020 $7.99 increase of 698.88%




__





						Inflation Calculator | Find US Dollar's Value from 1913-2022
					

Easily calculate how the buying power of the US dollar has changed from 1913 to 2022. Get inflation rates and US inflation news.




					www.usinflationcalculator.com


----------



## qldfrog (1 August 2021)

noirua said:


> Australia - $1 in 1966 is worth in 2020 $13.46 increase of 1,246% - before 1966 it was £ - s - d
> 
> 
> 
> ...



Very nice find.only caveat is that this uses official figures which have been heavily twisted, but it is the low range value


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## divs4ever (1 August 2021)

so exactly what  does each  dollar (pound ) buy in 2021  , when you work out what it buys NOW compared to then  , how can anyone but a Keynesian say it has increased even 100% in 55 years 
 or maybe you are talking about a rare bank note ( or stamp ) that rare  ( the silver 50c pieces have certainty gone up over the period )

 in 1966  the smallest official coin was 1 cent  , now it i 5 cents  ( pre-decimal 1966 it was a half-penny 1/24th of a 10 cent piece )

 so maybe the scrap value of 100 1 cent pieces has gone up but not the spending power of the face value of the coins


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## mullokintyre (10 September 2021)

US PPI figures up 0.7% in August, better than Julys 1.0%, but significantly higher than the consensus forecast (do they ever get it right?).
FromKitco


> For the year, headline inflation hit another record high, increasing 8.3%. The report said that this is “the largest advance since 12-month data were first calculated in November 2010.”
> 
> Looking at core producer prices, which strips out volatile food and energy costs, the index rose 0.6% last month, following a 1% rise in July. The core inflation data was also hotter than expected with consensus forecasts calling for a rise of 0.5%.
> 
> ...



Always puzzles me why a hedge against inflation goes down when the inflationary pressures start to go up.
But thats the market for you.
AUD V USD is also up .45%.
Not sure why, maybe they think the clowns at the RBA will raise rates before the clowns at the US Fed.
Mick


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## divs4ever (10 September 2021)

remember QE is basically bond buying ( normally  Treasury and Municipal  but can have some Mortgage-Backed Securities thrown in ) mostly they are soaking up government created debt  ( so the public don't work out the Government debt is unwanted  by genuine investors )

 unwanted bonds tend to force interest rates up ( once the trend becomes apparent )

 PS the market is manipulated  but the small players not only have to play fair , but  have to believe the crooked game is fair 

 OH and most of the 'official data ' is tweaked and manipulated as   well , ask the person in your household that does the shopping ( and fuel-buying )


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## Smurf1976 (11 September 2021)

divs4ever said:


> most of the 'official data ' is tweaked and manipulated as well , ask the person in your household that does the shopping



Two classic examples recently, both affecting not me but the cat.

1. I spotted cat biscuits marked as a clearance item a couple of months ago. OK, checked the cupboard and bought a bag of any variety that was running low.

The same biscuits can still be bought today - it's just that the bag is now 20% smaller and costs 10% more. So true price increase was 37.5% per kg but it's only 10% on the shelf price as sold.

2. I noticed a new label on a particular brand of tinned cat food. OK I thought, just a new label.

Nope, it's a different product and far lower quality. Could see actual meat and fish before whereas now it's just pulp that the cat not unreasonably doesn't want to eat.

There are many ways that inflation can be and is hidden in practice. Trouble is, explaining this to the cat is rather difficult. So far as she's concerned, the silly human just stuffed up and came home with poor quality food.


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## frugal.rock (11 September 2021)

Smurf1976 said:


> Two classic examples recently, both affecting not me but the cat.



Ahh, but your wrong there.
The abuse you are handing to your poor furry feline friend will haunt you when she gets a twisted gut and it's off to the vet, directly affecting via karma.

As a fellow feline fondler, I suggest you rectify the situation post haste, because after all, you are the servant and she is the master. 🙀😹😻


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## Smurf1976 (11 September 2021)

frugal.rock said:


> I suggest you rectify the situation post haste



Has been fixed yes.

No more small cans of cat food from a certain supermarket chain best known for bowling groceries through the checkout with incredible speed and selling random obscure items in the middle of the shop.


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## Value Collector (11 September 2021)

mullokintyre said:


> Always puzzles me why a hedge against inflation goes down when the inflationary pressures start to go up.
> But thats the market for you.
> AUD V USD is also up .45%.
> Not sure why, maybe they think the clowns at the RBA will raise rates before the clowns at the US Fed.
> Mick




Markets do weird things in the short term.

An asset that is a good long term hedge against inflation doesn’t always move perfectly Inline with every tick up in inflation, but over time eg years or decades it should prove to provide the hedge.

Eg, owning real things like land, buildings and businesses can be a good long term hedge against inflation, but if inflation ticks up, people in the short term can be worried interest rates will rise, which will cause real assets to fall in price temporarily, but over time as the currency devalues and the prices charged and rents paid of the land and businesses rise, they should have their asset prices rise and give you the hedge you are looking for.


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## divs4ever (11 September 2021)

maybe the RBA has fewer cronies to bail out 

 Russia already has moved rates to over 6%  and they have  ( hundreds of ) tonnes of gold to  back the currency


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## mullokintyre (12 September 2021)

Terry Mcrann  from Weekend Australian has a bit to say about US inflation.
He doesn't hold back.



> Inflation is up, up and away in the US and the Fed – their version of our Reserve Bank – is in utter, desperate, utterly pathetic, and yet inevitably disastrous denial.
> The greediest people on the planet who infest the lower part of Manhattan and try to cram into the other end of Long Island are caught between their ‘trust in the Fed greed’ and the increasingly undeniable inflation reality.
> 
> They ‘balanced that’, so to speak, with Wall St falling nervously but still only relatively marginally overnight Friday.
> ...


----------



## divs4ever (12 September 2021)

interesting ...

 i don't often  agree with Terry Mcrann

i do wonder if it is 'ineptitude'  or sheer bluff  because they are blinded like rabbits in the spotlight


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## qldfrog (12 September 2021)

divs4ever said:


> interesting ...
> 
> i don't often  agree with Terry Mcrann
> 
> i do wonder if it is 'ineptitude'  or sheer bluff  because they are blinded like rabbits in the spotlight



Inflation can only be countered via interest rate hike to be acceptable , but any hike will quickly bankrupt not only wall street but the US gov as the debt is now extraordinary massive.
And default would be catastrophic.
Not only for the USD but also Euro Yen all fiats.only gold backed currencies would survive intact: yuan and ruble which are backed by massive physical gold purchases in the last couple of years.
And maybe CAD AUD by association as gold producers.
It is a race against the clock for feds Wef to implement the Reset, all Covid pretexted population, media and financial controls before the bubble explodes..so for the time being,looking the other way...
I am long gold,silver and slightly cryptos.  
We have to be wary of the next distraction which will be created after covid:hot war with China,Iran? Who knows..another nth version of covid or Marburg virus..or just discovery that  alcoholic drinks are more dangerous than covid?


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## divs4ever (12 September 2021)

actually  , inflation can be tamed by increased productivity  and efficiency ( taking the pressure of rising costs , and increasing supply )

 but that would take control away from Central Banks  and those regulation-loving governments 

 by the way  some claim the US defaulted when they closed the gold window  many years back ( and several other nations have defaulted since )

 and i think the global economy imploded in September 2019 ( repo madness )

 watch out for greedy governments they have spent trillions of your future tax dollars


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## Smurf1976 (13 September 2021)

Look back at the mainstream media over the past ~2 years and there's been countless stories and opinion pieces to the effect of "there is no inflation, nothing to worry about".

Closest thing you'll see to someone ringing an actual bell at the bottom of a market is when the mainstream media starts repeatedly saying there's no chance of it going up.

That said, I don't think the Fed's even slightly incompetent in this. Rather, there's been a conscious decision that inflation is the least bad way out of the mess and so that's what we're in for.

Governments and consumers could default on debt outright or the central banks could inflate away its true value. They'll choose the latter for sure.

At the consumer level it's hugely mixed. We have a situation where in the space of less than one generation things like housing have gone from something that practically everyone could afford to something that's out of reach of even middle income earners. 

At the same time we have electronics and other equipment that a generation ago existed only in the professional realm but which is now so cheap that you could buy one as a consumer purely for novelty value despite having no actual use for it. 

There's been a huge bifurcation in the consumer economy. Pretty much everything seems to have become either ridiculously cheap to the point of being disposable, or so expensive that it's considered an investment. There's not much left that's in the category of depreciating assets but affordable to the average person with some effort. It's all one way or the other.


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## qldfrog (13 September 2021)

divs4ever said:


> actually  , inflation can be tamed by increased productivity  and efficiency ( taking the pressure of rising costs , and increasing supply )
> 
> but that would take control away from Central Banks  and those regulation-loving governments
> 
> ...



Increasing productivity and efficiency is indeed one way out but at the exact opposite of the current narrative and Reset target.
You do not get productivity and efficiency with universal income and "they will own nothing but be happy"
So rate hikes is the only way to control inflation...but as discussed,it can not happen so inflation will run.
Get prepared..
Question is how?
If you mix narrative/Reset and high/hyper inflation, how do you stay safe?
Inflation is the stealth tax.increasing items like rates, company taxes and gst returns, and quickly moving people in the top tax bracket while delaying wage increases.but is a great way to pay back debt..
If you mix the new fascist control laws getting passed all over the western world with coming poverty wave, you see a few clear directions:
Cash disappears, eroded to death, your atm limit of $800 or 1k a week will not even pay for your shopping: we sometimes pay $200 for a big shopping already.
Gold going over the roof..and so more reason to seize it via decree, and actually sending the cops to get it as part of nation recovery effort..or war effort..who knows
An extra reason for Gov. to remove bitcoin and crypto new gold like status..make it illegal
Lastly, better own your home ..but soon made too expensive via land tax and punitive taxes.visit France for an early taste of where housing taxes can go.
So how do you protect yourself from inflation?
I own an ip: mostly paid off via offset account should i bring back that cash and lock interest for 2y, but then what do i do with that extra cash? Buy bullions would be a big bet?
Anyway interesting discussion


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## mullokintyre (11 October 2021)

There was a significant rise in treasury yields on Friday night, they at the highest yields they have been since March this year.
If the market thinks inflation is on the rise, it is irrelevant want the CB's and treasuries think, because the big players  will have decided that inflation is here and they will react to it.
Despite the poor jobs report in the US on Friday, there is no big bets that the feds will cjange their tapering program  that was forecast a frew months ago.
Time will tell whether the Fed reserve does a sneaky and put off the tapering program for a while.
If they do, it will further boost the share market and  inflationary pressures.
Good luck contolling that.
Mick


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## mullokintyre (17 October 2021)

Once again, the experts got it wrong.
from  Kitco



> The key U.S. data point Friday is the monthly retail sales report for September, which came in at up 0.7% versus the consensus forecast of down 0.2% from August. The August report was also revised up, to a 0.9% gain from the original figure of up 0.7%.



One might read from this that consumers see inflation rising, so they buy now rather than buy later.

With oil , gas and even coal getting to giddying heights,  how can anyone argue that we do not have inflation??
Mick


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## over9k (17 October 2021)

FWIW:


----------



## Knobby22 (23 October 2021)

Alan Kohler showed a graph that show a large jump in consumption by the US population. 
So its not just supply constraints but also increased spending!

I have my theories why increased consumption is occurring. Early inheritance, bit coin and share profits, excessive money in the system, scramble for assets (get out of cash).

The question is how transitionary is this?


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## over9k (23 October 2021)

Knobby22 said:


> Alan Kohler showed a graph that show a large jump in consumption by the US population.
> So its not just supply constraints but also increased spending!
> 
> I have my theories why increased consumption is occurring. Early inheritance, bit coin and share profits, excessive money in the system, scramble for assets (get out of cash).
> ...



Nah, just the simple fact that goods are being bought but services are not. Computers, couches etc etc. People haven't been able to spend their spare cash on holidays or whatever so they're buying a new (whatever) instead. 

A lot of sales for these things are going to fall off a cliff at some point as fact is that things like furniture are not the type of thing you upgrade periodically like a laptop or whatever. Once you've got a couch or a fridge or a car you usually keep it for quite some time.


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## mullokintyre (23 October 2021)

I had a few beers with one of my sons last night .
He is is in steel fabrication industry. Two of his mates were there, one a builder, the other an electrician.
All of them have the same problem, actually getting the raw materials to work with.
Supply train issues means that they no longer have one wholesaler, they basically have to ring around to find out who has got stock, then start talking about prices.
All of their input costs have gone up, including wages, as skilled tradesmen very quickly get poached.
I would imagine this scenario is being repeated across the country, I can't believe it is just isolated to this area.
Inflation is here, its having significant impacts, and it shows no inclination to go away soon.
Mick


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## Knobby22 (28 October 2021)

mullokintyre said:


> I had a few beers with one of my sons last night .
> He is is in steel fabrication industry. Two of his mates were there, one a builder, the other an electrician.
> All of them have the same problem, actually getting the raw materials to work with.
> Supply train issues means that they no longer have one wholesaler, they basically have to ring around to find out who has got stock, then start talking about prices.
> ...



It's all supply issues though.
Once these are resolved I can't see inflation continuing.


----------



## mullokintyre (28 October 2021)

From Todays OZ


> Chief executives have warned that consumers will continue to feel the pinch of rising prices with inflation remaining elevated as the economy battles supply bottlenecks as well as rising fuel and construction material costs.
> The nation’s underlying inflation rate came in much higher than economists’ expectations in the year to September, causing the Aussie dollar to jump over expectations the Reserve Bank’s could bring forward rises in official interest rates.
> 
> Woolworths chief executive Brad Banducci said inflationary pressure had been creeping into supermarket shelves as more of his grocery suppliers were pushing for “material” price increases to recoup steeper shipping, freight and other supply chain costs.
> ...



As has been a consistent theme for some time now, the economic forecasters got it wrong.
Everyone at the coalface, including all the citizens who are paying bills  have seen inflation for a few months that is only getting stronger.
Tuesday is a defining day for the RBA and Phillip Lowe.
if he once again continues with  the charade that there will be no rate hikes till 2024,  he surely should be given the chop.
On September 14th, Lowe said he could not understand calls for rate hikes before 20124 (see AFR ).
For heavens sake, he might not agree with the conclusions drawn by others, but not understand why??
He seems to be mirroring the Fed reserve in his ostrich like pronouncements. 
Mick


----------



## qldfrog (28 October 2021)

mullokintyre said:


> From Todays OZ
> 
> As has been a consistent theme for some time now, the economic forecasters got it wrong.
> Everyone at the coalface, including all the citizens who are paying bills  have seen inflation for a few months that is only getting stronger.
> ...



I am not exactly optimistic about australia but we have one advantage, while US and europe deficit are so big they can NOT increase rates as their own interests would collapse the countries, Australia can still afford...but will our RBA have the guts to do it, or just let inflation run and say: no my problem, look at the US..I think the latter


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## mullokintyre (28 October 2021)

qldfrog said:


> I am not exactly optimistic about australia but we have one advantage, while US and europe deficit are so big they can NOT increase rates as their own interests would collapse the countries, Australia can still afford...but will our RBA have the guts to do it, or just let inflation run and say: no my problem, look at the US..I think the latter



NZ has already done it. 
Raised rates for the first time in 7 years (see Reuters ).
Don't see why the inflationary conditions in NZ are that much different to here.
Mick


----------



## qldfrog (28 October 2021)

mullokintyre said:


> NZ has already done it.
> Raised rates for the first time in 7 years (see Reuters ).
> Don't see why the inflationary conditions in NZ are that much different to here.
> Mick



No difference in facts, but difference in narrative, we are following more the bandwagon than NZ.
So whatever US do, we do...
And gov here does not need a strong dollar, the lower the better with our economy based on RE,coal and iron, anecdotally agriculture.
And inflation is good for gov.revenues are higher..than inflation ..due to tax bracket creep and automatic inflation adjustment for GST.
Inflation is a people punishing tool, some more than other but overall..you loose


----------



## againsthegrain (28 October 2021)

If rba doesn't act still a good chance the banks will make a move on their own, the media sure seem like they are trying to prepare the plebs for it


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## qldfrog (28 October 2021)

againsthegrain said:


> If rba doesn't act still a good chance the banks will make a move on their own, the media sure seem like they are trying to prepare the plebs for it



Banks will and cop the blame: clever move from Morrison 😂


----------



## againsthegrain (28 October 2021)

qldfrog said:


> Banks will and cop the blame: clever move from Morrison 😂




ohh the tyranny, current affair will love it


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## mullokintyre (28 October 2021)

qldfrog said:


> Banks will and cop the blame: clever move from Morrison 😂



Not sure if Scomo has anything to do with it.
He might think he does.
I mean after all, the RBA is an 'independent statuary Authority".
Mick


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## mullokintyre (28 October 2021)

Canada has become the next domino to fall.
In a statement from Bank of canada


> The recent increase in CPI inflation was anticipated in July, but the main forces pushing up prices – higher energy prices and pandemic-related supply bottlenecks – now appear to be stronger and more persistent than expected. Core measures of inflation have also risen, but by less than the CPI. The Bank now expects CPI inflation to be elevated into next year, and ease back to around the 2 percent target by late 2022. The Bank is closely watching inflation expectations and labour costs to ensure that the temporary forces pushing up prices do not become embedded in ongoing inflation.
> 
> The Governing Council judges that in view of ongoing excess capacity, the economy continues to require considerable monetary policy support. We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In the Bank’s projection, this happens sometime in the middle quarters of 2022. In light of the progress made in the economic recovery, the Governing Council has decided to end quantitative easing and keep its overall holdings of Government of Canada bonds roughly constant.



The Canadian CB has acknowledged that inflation is rising , and the forces are stronger and more persistent, GDP growth is strong (and forecast to get stronger). hence their plan to end QE earlier. It still thinks that inflation will ease back around 2% in late 2022,  though I will be betting that it will have act on inflation earlier than that. They have already brought forward the planned QE easing, so I expect the interest rates will also have to be adjusted earlier than they forecast.
Mick


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## mullokintyre (29 October 2021)

I just don't understand the thinking at the RBA.
As pointed out, they are adamant that they will not need to be raising interest rates until 2024.
The market has twice tested their resolve, and both times they have caved.
Last Friday they stepped in not once, but twice  into the market to buy bonds to keep the yield around their target rate.
And yet on Wednesday and Yesterday again, when the market tested their resolve, they did not step into the market to support their yield curve, and it shot up 0.5 from their preferred 0.15.
So what has changed??
Have they run out of money (ha ha)?
Are they telegraphing a rate hike come Tuesday?
Did the Federal Government (Scomo) lean on them?
Did they just get cold feet?
Did the Murdoch Press ring the RBA and tell em to back off?
Or are they just as clueless as everyone else?
Mick


----------



## over9k (29 October 2021)

mullokintyre said:


> I just don't understand the thinking at the RBA.
> As pointed out, they are adamant that they will not need to be raising interest rates until 2024.
> The market has twice tested their resolve, and both times they have caved.
> Last Friday they stepped in not once, but twice  into the market to buy bonds to keep the yield around their target rate.
> ...



They're on the take from the liberal party, who are on the take from real estate developers and also own a mountain of investment properties themselves. 

When interest rates are low, P/E is high. It's as simple as that.


----------



## mullokintyre (29 October 2021)

over9k said:


> They're on the take from the liberal party, who are on the take from real estate developers and also own a mountain of investment properties themselves.
> 
> When interest rates are low, P/E is high. It's as simple as that.



Thanks for that such a useful an insightful response.
Mick


----------



## over9k (29 October 2021)

mullokintyre said:


> Thanks for that such a useful an insightful response.
> Mick



I was being serious.


----------



## mullokintyre (29 October 2021)

How can we take someone seriously when their moniker says Forum jester??
Mick


----------



## divs4ever (29 October 2021)

mullokintyre said:


> I just don't understand the thinking at the RBA.
> As pointed out, they are adamant that they will not need to be raising interest rates until 2024.
> The market has twice tested their resolve, and both times they have caved.
> Last Friday they stepped in not once, but twice  into the market to buy bonds to keep the yield around their target rate.
> ...




 first off  both major parties are making noises like they are expecting a Federal Election , MAYBE even before Xmas ( NORMALLY the RBA avoids appearing to help any particular  election campaign )

the second factor is Tuesday is Melbourne Cup Day  when NORMALLY 2.30 pm is the time people care about is the RBA  the least ( but it MIGHT be different this time )

 now somebody like me would HIKE ( up 0.5% ) the rates on Tuesday  to SHOCK the economy ( into retiring debt  , and better  deployment of cash reserves for those that have some ) , catch them completely off guard and then CONSIDER a 0.25% rise in February ,

 but you have a better chance that Australia would go back to the gold standard  , than 'somebody like me ' getting into the RBA building ever again 

unless the faceless men suspect  BOTH parties  look toxic to voters , i suspect all you will see is a choreographed drama ( at least until after the next election )

 so is it different , this time ??


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## divs4ever (29 October 2021)

mullokintyre said:


> How can we take someone seriously when their moniker says Forum jester??
> Mick



' many a true word  said in jest '  , my  mum would say  ... however i prefer puns


----------



## Smurf1976 (29 October 2021)

mullokintyre said:


> Two of his mates were there, one a builder, the other an electrician.
> All of them have the same problem, actually getting the raw materials to work with.
> Supply train issues means that they no longer have one wholesaler, they basically have to ring around to find out who has got stock, then start talking about prices.



This is where inflation multiplies.

First the price of the item goes up by whatever amount.

Next problem however is physical availability runs short. Now instead of buying from a single supplier which is convenient to your business and getting a % discount from that supplier due to the volume of purchases you make, you're now buying a bit here and a bit there from lots of suppliers. 

None of those are going to give you a discount for the small volume of one-off purchases you're making from them.

Having to physically go around lots of places, some of which may be 10 or even 50km away, chews up time and lots of it.

Then there's administration. Depending on the nature of the business, the idea of having an account with a single supplier no longer works and it's problematic to have an account literally everywhere. All of a sudden every work team, which may mean each individual worker if they're by themselves, is going to be buying things at retail price from any shop they can get it at. Now you've got a pile of administration overheads either with corporate credit cards or reimbursement of cash.

End result is your material costs have gone up, distance put on your company vehicles has increased, your workers' productivity has gone down and you're now spending considerable time administering it all.

End result is the price you need to charge customers increases by far more than just the cost of materials alone. 

Then your staff politely remind you about all these price increases which you've surely noticed and say something about their wages.....


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## over9k (29 October 2021)

mullokintyre said:


> How can we take someone seriously when their moniker says Forum jester??
> Mick



I think it was pretty bloody obvious to anyone with even half a brain.


----------



## banco (29 October 2021)

Banks etc. are still saying no rate rises until late 2022.


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## qldfrog (29 October 2021)

banco said:


> Banks etc. are still saying no rate rises until late 2022.



But how would they know anything a year ahead...seriously


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## againsthegrain (29 October 2021)

qldfrog said:


> But how would they know anything a year ahead...seriously



it's standard banking procedure to say one thing but do the opposite I thought


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## mullokintyre (29 October 2021)

In  todays (or maybe tomorrow's OZ, there is a similar theme to the sudden change in heart of the RBA to support the yield curve.
From the Australian 



> But AMP Capital chief economist Shane Oliver said investors were likely getting ahead of themselves, amid a chaotic few days of bond trading.
> 
> Dr Oliver said such a rapid move higher in rates would be a “shock” to the economy and drive houses price down at a time when the post-Delta recovery in previously locked-down states was still in its early stages.
> 
> ...



I doubt there would be any in the real world of actually running/owning a business would take any notice of the hopelessly outdated ABS labour statistics. They conduct interviews of a fixed number of participants, then massage the data to  counteract seasonal variations, and produce stats that a lot of business people just laugh at. the Australian labour market is a  highly variable beast that only varies greatly with time, but also with region and area. This is even greater now with the various border restrictions, both state and International.
despite what the ABS might suggest, talking to people who try to get labour is extremely difficult in this market, and  it does not appear to be going away any time soon. Anecdotal  evidence can be dangerous when trying to extrapolate, but if the anecdotal evidence is only going in one direction, it can provide a pretty good approximation of real world conditions.
Mick


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## mullokintyre (29 October 2021)

over9k said:


> I think it was pretty bloody obvious to anyone with even half a brain.



Ok, will turn off half my brain when reading your contributions from now on.
Mick


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## banco (30 October 2021)

Suspect Government will flood the country with migrants to put downward pressure on wage inflation. You can already see NSW Premier etc. pushing the Feds to turn the spigot on.


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## againsthegrain (30 October 2021)

banco said:


> Suspect Government will flood the country with migrants to put downward pressure on wage inflation. You can already see NSW Premier etc. pushing the Feds to turn the spigot on.




There is already a mess (mass) of workers not wanting to work due to sitting on benefits for 1-2 years.  More cheap labour,  more lazy local workers...  I guess if they all working for the dole they not officialy unemployed


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## qldfrog (31 October 2021)

https://finance.yahoo.com/news/why-...y-about-humanity-versus-nature-093605627.html
A different look i found interesting


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## againsthegrain (31 October 2021)

the media are really starting to ramp up the inflation fear, well news.com.au is not media however it is viewed by the general public so alot of people are getting scared?









						Fears as ‘hyperinflation’ strikes
					

Former US President Ronald Reagan once said, “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.”




					www.news.com.au


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## moXJO (2 November 2021)

There's a huge shortage of goods and getting services is a 6 month waiting list. Even computers are hard to get and we are coming up to Christmas which means it's all going to get worse.


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## mullokintyre (3 November 2021)

From Todays OZ


> The governor conceded on Tuesday there was an argument that the RBA should have stayed in the market to achieve its stated objective.
> 
> “We had this target and you could argue we should keep on buying the bonds until we had formally dropped it, but there were a couple of considerations in not doing that,” he said.
> 
> ...



Looks like mr Lowe has conceded that the market always wins in the end.
The overnight market reaction to yesterdays non announcement from the RBA was to dump the AUD, because they saw the RBA response as 'too dovish".
Maybe that was Lowes idea all along. keep the AUD down, keep the Oz exports attractive to other countries, and import some more imflation so as to make the value of  debt decrease.
Mick


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## mullokintyre (5 November 2021)

CBA has become the latest  cab off the ranks in the increase the interest rate race.
From Todays OZ


> Commonwealth Bank has no advertised home loan rates under 2 per cent for the first time in a year after it hiked its fixed rates for the second time in three weeks.
> 
> On Friday morning CBA raised its one to five year fixed rates by between 0.1 and 0.5 per cent.
> 
> ...



The banks obviously expect  official rates to go higher in the near future.
Mick


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## mullokintyre (11 November 2021)

Well the proverbial hit the fan overnight when the latest inflation figures came out showing annual US inflation has climbed to 6.2%.
And once again the expert forecasters were way off the the mark.
From Kitco 


> Wednesday’s U.S. consumer price index for October came in hot, at up 0.9% and up 6.2%, year-on-year. The CPI was expected to come in at up 0.6% from September and up 5.9%, year-on-year. The October numbers are the highest U.S. CPI readings in over 30 years. Tuesday’s U.S. producer price index showed a rise of 8.6%, year-on-year.
> Meantime, China’s producer price index on Wednesday was reported up 13.5% in October, year-on-year, and up from a 10.7% rise in September. That is the fastest factory gate price rise on recent record. Extreme weather and coal shortages are being reflected in China’s rising PPI.
> Just recently, several Federal Reserve officials seemingly grudgingly are coming around to the notion that rising inflationary pressures are something more than just “transitory.”



I was listening to the ABC yesterday and the presenter was interviewing a representative from the hospitality industry. The discussion was about a new phenomenon where hospitality premises are starting to close down again, not because of Covid, but because they cannot get skilled workers. The spokesperson was bemoaning the fact that without the backpackers, foreign students, and the influx of skilled temporary or skilled migrants, the employees just could not find the staff.
The cheap labor will start coming back in dribs and drabs over time (unless of course there is another covid shutdown - always on the cards).
So the employees are going to have to start improving the wages and conditions on offer to potential employees.
Coupled with the scarcity of truck drivers, increases in fuel, transport costs are going to get more expensive, which will flow through to everything we buy or shift.
As is often the case, the authorities will not know or admit  that inflation is already away before they clumsily try to do something about it.
Mick


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## mullokintyre (16 November 2021)

The headof the RBA is still insisting that there will be no rate rises in 2022.
From Todays OZ


> Reserve Bank governor Philip Lowe says Australia will not be sucked into a “perfect storm” of global inflationary pressures, as minutes from the last RBA board meeting revealed that a rate rise in 2024 remained the “central scenario”.
> Amid fears rates could rise as soon as next year, Dr Lowe repeated that “the latest data and forecasts do not warrant an increase in the cash rate in 2022”.
> 
> “The economy and inflation would have to turn out very differently from our central scenario for the board to consider an increase in interest
> ...



Wish i could share his optimism that inflation is transitonary.
The problem is , if he has got it wrong, the reaction will be late and over the top.
Overshooting and undershooting seems to be the constant theme.
he and his cohorts need to get out more and see what the less well off are faced with.
Mick


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## Smurf1976 (16 November 2021)

mullokintyre said:


> he and his cohorts need to get out more and see what the less well off are faced with.



Without criticising anyone personally, I think a problem with all economic actions by governments and central banks is that those making the decisions often aren't seeing it first hand. 

Anyone can look at data but seeing it first hand often gives a different perspective.

The kind of inflation I'm seeing is one that's going to hit the poor harder than anyone else. For example a local supermarket hasn't changed the full price of bakery items but they've slashed the end of day discount clearing out unsold items. Etc. I'm seeing a lot of that sort of thing where the full retail price of a brand name product hasn't changed but the cheapest available, either a cheaper brand or a discounted price on special, has increased significantly. That's going to hit those who intentionally buy whatever's on special to save money but won't really show up in CPI statistics.


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## mullokintyre (16 November 2021)

I work as a volunteer with a local well known charity trying to help people in financial difficulty.
I spend a lot of time trying to explain very simple basic economic education to people who have never had it.
To be harshly frank, a lot of the time people who  are at the bottom of the economic heap get there because of poor life choices.
So much of time is spent trying to get them to change certain aspects of their life.
Some of them seem bleedin obvious .
Things like having a budget for their weekly and monthly expenses.
I used to go shopping with one guy just to show him how he could buy the ingredients for a meal at a quarter  of the price for a finished meal.
Sometimes its successful, and some clients manage to get out of a deep hole.
But they are in the minority.
There are some people who just cannot be helped.
They will make the same  obviously financial bad decisions over and over again.
But the one thing they have in common is that they are acutely affected by inflation.
It matters little whether inflation is transitionary to them.
Some of the things that are included in the CPI that have reduced the CPI have very little impact on them.
Falls in new car prices, electronic devices, travel etc are items that will rarely if ever be on their shopping list.
If they do own a car, it  will most likely be an older inefficient ICE bomb that rarely gets any maintenance.
Unlikely to have insurance of any kind, and just as likely to be unregistered.
Fuel prices are critical to them.
The costs of gas and electricity  for heating cooling or cooking will take up a good chunk of their  income.
They  have no chance of owning shares, most likely renting, do not hold education as a vitally important function in their kids lives.
In other words, they are behind the eight ball all the time.
They may vote, but there is no guarantee.
Mick


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## mullokintyre (17 November 2021)

From Todays Oz


> Westpac has lifted its fixed rates for the third time in four weeks as the major banks retreat from record low lending rates eagerly snapped up by borrowers.
> The big bank moved to hike its owner-occupier and investor rates, leaving no loan package on offer for less than 2.24 per cent.
> 
> Westpac’s three-year fixed rate loan saw the largest lift in borrowing costs, up 0.3 per cent.
> ...






> Westpac’s rush illustrates the rapid pace at which banks are rethinking their lending rates as they look to backstop margins in the face of offshore funding cost hikes.
> 
> Westpac joins a throng of other lenders, with 16 banks pushing up fixed rates at least twice in the last month.
> 
> ...




It is becoming more and more obvious that the interest rate  momentum has left the RBA behind.
I very much doubt that WBC is the only bank that  is having trouble accessing depositors funds  to lend out.
All I am waiting for now is the ba$tard$ to start increasing deposit rates.
Mick


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## againsthegrain (17 November 2021)

mullokintyre said:


> From Todays Oz
> 
> 
> 
> ...




That is a good start,  plenty fat left to carve


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## mullokintyre (21 November 2021)

Carghills is one of the larger food conglomerates on earth.
Its CEO, Dave Maclenna, has recently changed his mind about the transitory nature of inflation.
In an interview with Bloombergs
he said 


> _*I thought inflation in ags and food was transitory. I feel less so now because of continued shortages in labor markets,"*  "*That's one of the inputs to the supply chain that we're watching most carefully."*_



The global food index may break into territory not seen this decade.





I guess for the wealthy elites, this is not big deal, as long as the supply is there.
if you can pay $5,000 for a gucci handab or $10,000 for a pure Alpaca wool coat, having your food prices double or even triple is of no great concern.
For those at the bottom it is of great concern.
Mick


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## againsthegrain (21 November 2021)

mullokintyre said:


> Carghills is one of the larger food conglomerates on earth.
> Its CEO, Dave Maclenna, has recently changed his mind about the transitory nature of inflation.
> In an interview with Bloombergs
> he said
> ...




And having a whopping 50c a hr increase for min wage will make it all ok


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## over9k (21 November 2021)

But you have to remember how these things are weighted in the (fudged) official CPI etc numbers. Think about how much energy is a primary input into even food production and energy has had a massive supply crunch. The good news is that oil wells etc are coming back online (this doesn't take 5 minutes) and just talk of releasing strategic reserves has dumped the oil price and thus everything else dramatically:





You have to remember that prices are pretty sticky/slow to react in this market because you can't just reopen an oil well and ship oil across the planet in five minutes, this is a process that takes weeks. Oil companies also obviously want to know there's going to be a market for their stuff before they ship it so they need some confidence in the oil price before they pull the metaphorical trigger. 


Point is, this is far more a supply side issue than an interest rate one. Interest rates effect asset prices (p/e), commodity etc prices, not so much.


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## Smurf1976 (22 November 2021)

over9k said:


> Think about how much energy is a primary input into even food production



Something I'll add for those not aware is that ammonium is produced from natural gas.

That's not simply using gas to run the factory as an energy source but gas is the actual raw material feedstock from which ammonium is made. That's not the only way to make it but it's the major commercial process in current use.

So there's a very direct link there between natural gas prices and the cost of making ammonium fertilizer which is itself an agricultural input.

In the opposite direction, various agricultural crops can be processed to produce ethanol which can be (actually is) used as a blending component in petrol. Any rise in the price of oil thus increases the price point up to which it's profitable to add ethanol, or to add more than would otherwise be added, which then diverts some food crops into producing that ethanol.

So there's two very direct linkages between energy commodities and human food without even mentioning the fuel used in transport, farm machinery, food processing plants and so on.


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## qldfrog (22 November 2021)

Smurf1976 said:


> Something I'll add for those not aware is that ammonium is produced from natural gas.
> 
> That's not simply using gas to run the factory as an energy source but gas is the actual raw material feedstock from which ammonium is made. That's not the only way to make it but it's the major commercial process in current use.
> 
> ...



And i would add that any vegetable oil can be used in diesel engine nearly as is.
So these tractors, dozers and hauling trucks in mine can become carbon neutral tomorrow if we decide to let the (third?) World starve.
An interesting point is that ethanol mixed in petrol at the pump, when coming from corn and cereal: Europe and USA, is actually a net loss in term of fossil fuel
More black oil is consumed then saved by switching to E10 in these countries.
When using agricultural wastes, it is a positive and so different.
So E10 usually a political move aka agricultural subsidies in hiding.
Vegetable oil as fuel on the other end makes sense, but is so far only cheaper by the absence of taxes.
So people mix vegetable oil with diesel at the retail level but not at the official pump stations.
I like following these cars smelling like cheap fries.


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## over9k (22 November 2021)

Smurf1976 said:


> Something I'll add for those not aware is that ammonium is produced from natural gas.
> 
> That's not simply using gas to run the factory as an energy source but gas is the actual raw material feedstock from which ammonium is made. That's not the only way to make it but it's the major commercial process in current use.
> 
> ...



Yep, the germans had this problem in the war as all their oil was being sent eastwards to fuel their tanks etc and they ended up with serious food supply problems. 

Fertiliser costs.


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## mullokintyre (22 November 2021)

Smurf1976 said:


> In the opposite direction, various agricultural crops can be processed to produce ethanol which can be (actually is) used as a blending component in petrol. Any rise in the price of oil thus increases the price point up to which it's profitable to add ethanol, or to add more than would otherwise be added, which then diverts some food crops into producing that ethanol.
> 
> So there's two very direct linkages between energy commodities and human food without even mentioning the fuel used in transport, farm machinery, food processing plants and so on.



There have been a number of periods in North Americas most recent history when the demand for ethanol has forced up prices of  corn based foods. See  HERE, Here , and HERE .
Corn and maize  based foods  coincidently make up a staple part of lower socio economic  groups, so they are disproportionally affected.
hence it is unlikely to enter the consciousness of the MSM.
It also distorts the  mix of ag production as corn then increases as a  percentage of ag crops as seen Here.
The law of unintended consequences.
Mick


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## mullokintyre (29 November 2021)

Inflation in the EU has hit a record high in the September quarter.
From The Australian


> Consumer-price inflation in the eurozone likely hit a record high in November, but many economists think that might mark a peak for now, and therefore don’t expect the European Central Bank to raise its key interest rate next year.



And once again, the economic experts got it wrong.


> As in the US, consumer prices in the eurozone have risen faster over recent months than most economists and policy makers had expected. The data have raised questions for investors, businesses and households about the credibility of central bank assertions that this period of high inflation is likely to prove transitory.



but they are doubling down, and suggesting that inflationary pressure will ease, and like American experts, suggest its only Transitonary".


> Many private economists forecast that inflation in the eurozone will decline significantly at the start of the year, echoing the ECB’s view that the period of rapid price rises will be short-lived. The firms sharing this view include UBS, Morgan Stanley, BNP Paribas and Oxford Economics.
> The European Union’s statistics agency is expected to estimate Tuesday that prices were between 4.3 per cent and 4.5 per cent higher in November than a year earlier.
> 
> That would mark the fastest annual rise in prices since records began in 1997. During those 24 years, the inflation rate has only exceeded 4 per cent in two months, the first of those being July 2008, and the second October of this year.
> ...



I doubt that the EU experts have any more idea of future inflation  than their US counterparts.
Mick


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## mullokintyre (3 December 2021)

From  ABC NEWS


> The new EBA announced includes a wage increase between 9.25 per cent and 9.75 per cent subject to Consumer Price Index (CPI) over three years, as well as an additional 2 per cent increase in superannuation during a three-year period, reaching 13 per cent in 2023.
> 
> The agreement also includes a commitment from both parties to review the agreed wage increase at the two-year mark against the Consumer Price Index, capped at 3.5 per cent.



I would not mind betting that this will cause two things'
1. A flow on effect to first of all, other players in the delivery industry, and then spread to other inductries as the unions seek more fopr its members.
2.The extra costs in transport will increase costs for everyone and everything.

Yesterday I looked at ordering about  $900 bucks worth of  parts for my "experimental" EV sportscar from the Gold Coast. 
Freight cost was $900. my purchase doubled in price just due to freight.
Inflation? What inflation?
Mick


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## MovingAverage (3 December 2021)

Smurf1976 said:


> Without criticising anyone personally, I think a problem with all economic actions by governments and central banks is that those making the decisions often aren't seeing it first hand.




Yup, and they're always looking in the rearview mirror.

I say this somewhat flippantly, but I use my dear old Mum and Dad as a "leading indicator of inflation". They're retired and on fixed income so very sensitive to price increases in everyday items.  My dad has always been a grumpy old man and so complains about everything, but my mum is far more considered. For the past two months she's been complaining about the significant increase in her everyday shopping: the recent increases in bread from bakers delight, the exorbitant price of Brussel sprouts in Coles and that petrol is not far off $2 a litre. Their cost of everyday necessities has increased dramatically over the past few months and looks set to continue to increase. If that ain't inflation not sure what is.


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## qldfrog (3 December 2021)

MovingAverage said:


> Yup, and they're always looking in the rearview mirror.
> 
> I say this somewhat flippantly, but I use my dear old Mum and Dad as a "leading indicator of inflation". They're retired and on fixed income so very sensitive to price increases in everyday items.  My dad has always been a grumpy old man and so complains about everything, but my mum is far more considered. For the past two months she's been complaining about the significant increase in her everyday shopping: the recent increases in bread from bakers delight, the exorbitant price of Brussel sprouts in Coles and that petrol is not far off $2 a litre. Their cost of everyday necessities has increased dramatically over the past few months and looks set to continue to increase. If that ain't inflation not sure what is.



same here, once a salary stop falling there is a much more acute look at your day to day cost: the life pace is more level so your purchase more level too: you eat at home veryday so no business travel etc..as a result you can easily and relatively accurately look at your expenses and the shopping trip cost..and yes it is going up: in season tomatoes at 4 to 8$ a kg? I was thinking a month ago; meat is cheaper!!!!!
Well meat going up too based on last trip to woolies..
we do not buy either as pretty self sufficient but outch..bread at $7 a nicer loaf..seriously? etc etc
then petrol costs, etc
noone in his right mind could deny serious inflation taking place.
Lastly AUD has fallen 5% vs USD  in the last month..expect some serious related cost soon for imports


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## MovingAverage (3 December 2021)

qldfrog said:


> we do not buy either as pretty self sufficient but outch..bread at $7 a nicer loaf..seriously? etc etc



Every time I talk to my Mum she bangs on about who the hell in their right mind spends $7 on a loaf of bread...literally, she goes on about it for at least 15 mins every time I talk to her    I don't have the courage to explain to her that my wife is one of those


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## Sean K (10 December 2021)

Could the US and the West possibly go Weimer Republic in the next few years? Just as China starts taking over.

We've kicked the can down the road long enough.


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## mullokintyre (11 December 2021)

And right on cue, inflation hit came in at 6.9%, the highest since 1982.
For those ASF members old enough to rememebr, 1982 was the year in which Australian housing rates started an inexorable climb to hit 18% in 86 or 87. 
Doubt very much it will get that high unless the weimar republic comment above does play out.
From Zero Hedge


> Consumer Inflation stayed red hot in November as core CPI rose a robust 0.53% mom, which boosted the yoy rate to 4.93% from 4.56% yoy—the highest since 1991. Headline CPI jumped 0.78% mom as energy prices spiked 3.5% mom and food rose 0.7% mom. Headline % yoy similarly soared to 6.81% yoy from 6.22%—the highest since 1982.
> Outside of autos, core goods components broadly gained as apparel popped 1.3%, household furnishings/supplies rose 0.7% mom, and both recreation and other goods rose 0.3% mom. One exception was education/communication commodities which slipped 1% mom. *The breadth of gains in goods likely reflects ongoing constraints in the supply chain as well as the pull forward in the holiday shopping season, *which meant earlier discounting in October.



That "transitory" inflation has been going on now for 5 quarters since the 2020 covid contraction, and the rate  of increase is accelerating.
However, all is not lost.
if those darn inflationary figures don't come down, all you have to do is redefine the base rates you compare to, and hey presto, inflation comes down, which is exactly wat has happened in the past, and has been foreshadowed by the BLS.
Once again from Zero hedge


> as any economic history buff knows the US dramatically changed how it calculates consumer inflation back in the 1980s, an event extensively covered by AllianceBernstein former chief economist Joseph Carson on this website in the past (see "Consumer Price Inflation: Facts vs. Fiction") with the most important difference being that while the CPI of the 1970s included house price inflation, the current measure does not. Instead, home price pressures have been swept in the purposefully nebulous Owner-Equivalent Rent which can be whatever politicians wants it to be (there have been other definitional changes, see here, here, here and here for more). Bottom line, however, is that if today's CPI did include house prices in its measurement, the currently reported inflation numbers for house price inflation would push CPI (and core CPI) to double-digit gains.
> as the BLS has reported, starting next month it will adjust the weights for its Consumer Price Index basket, which will be calculated "based on consumer expenditure data from 2019-2020." Alas, there is no further detail on this critical topic, although we will take any bet that post-revision reported inflation will drop because, well, "adjustments."



It matters little to the well heeled as to what the headline or real inflation levels are, they just carry on the stress free lives as usual.
But for those people who have to live at the middle to bottom level, it is of vital importance.
It matters little to them whether rents or volatile gas prices are included in CPI figures, they still have to find the money to pay the bills.
Mick


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## Sean K (11 December 2021)

mullokintyre said:


> And right on cue, inflation hit came in at 6.9%, the highest since 1982.




"Inflation beast is out" and gold price looks to $3K in response to Fed's policy, says mining strategist​Kitco News  Friday December 10, 2021 16:47

The inflation beast is 'out of its cage,' and the Federal Reserve is now forced to respond. But a tighter monetary policy does not mean lower gold prices, says Christopher Ecclestone, Principal and Mining Strategist at Hallgarten & Co. And here's why.

"There's only one reason why the price of gold will go down, and that is if central banks soft-pedal on inflation, and that's what they have done so far," Ecclestone explained. "But as we see inflation continue to rise, particularly in the U.S. and the U.K., it has gotten out of control. Only higher interest rates will keep inflation down."

Ecclestone spoke to Michelle Makori, Lead Anchor and Editor-in-Chief of Kitco News, on the sidelines of the Mines and Money London conference. Hallgarten produces research on the natural resources sector.

In terms of inflation and its economic impact, Ecclestone stated that investors who have confidence that the Fed will be able to control inflation are mistaken.

"The inflation beast has gotten out, and it's going to take a lot of effort to get it back into its cage," Ecclestone emphasized. "This will ultimately impact property markets. It's going to impact companies that are highly leveraged. We are already seeing big property crashes in China that are linked to overextended property developers."


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## divs4ever (11 December 2021)

sounds scary until you realize the CPI ( in the US and Australia  for two ) has been manipulated  and 'modified ' for the last 40 years , and the true figure would probably mortify you 

 but heck if you didn't see it coming years back , you aren't researching for yourself  ( i have been trying to invest to offset this trend since i started  investing in 2011 , which is why i wasn't sitting on big piles of cash , when my instincts have been telling me  'to cash in and run , since September 2019  )

 the ultimate question is does this  end in a hyper-inflationary collapse , or we get a distraction via a major war , or something else ( nasty ) 

 DYOR

good luck


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## mullokintyre (11 December 2021)

divs4ever said:


> sounds scary until you realize the CPI ( in the US and Australia  for two ) has been manipulated  and 'modified ' for the last 40 years , and the true figure would probably mortify you
> 
> but heck if you didn't see it coming years back , you aren't researching for yourself  ( i have been trying to invest to offset this trend since i started  investing in 2011 , which is why i wasn't sitting on big piles of cash , when my instincts have been telling me  'to cash in and run , since September 2019  )
> 
> ...



I am going for a major war.
There are so many flash points - China VS Taiwan, US Vs Iran, Russia Vs Ukraine, South  vs North Korea,  Solomons vs themselves, and so forth.
athere is so much money to be made from wars, its hard for some to resist.
Especially if it can be fought by proxy.
That way your own dispensable foot soldiers don't get dispensed.
Mick


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## DannyB0000 (11 December 2021)

Were not to get a major war because there are nuclear weapons involved.   Thousands of nukes a piece between the Americans and the Russians combined, a few hundred nukes with the China.  If there really is a major war between these sides you won’t have to worry about rising inflation or the Stockmarket crashing anymore.


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## divs4ever (11 December 2021)

the only war i will support is one  where politicians and senior public servants and generals  are in the very front  line ( even closer to the action then Napoleon in his major attacks )

 and war is just a distraction for defaulting on the existing debt , anyway


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## Smurf1976 (11 December 2021)

Any war doesn’t necessarily need to involve nukes or even soldiers with guns.

It could well be fought by a team sitting in an air-conditioned office armed with nothing more than ordinary desktop computers and the required knowledge.


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## divs4ever (11 December 2021)

of course the war  could already be in progress  , sanctions ,  diplomatic isolation ,  a bit of strategic disclosure/omission on health issues  with maybe some supply-line glitches thrown into the mix


----------



## qldfrog (11 December 2021)

divs4ever said:


> of course the war  could already be in progress  , sanctions ,  diplomatic isolation ,  a bit of strategic disclosure/omission on health issues  with maybe some supply-line glitches thrown into the mix



no not at all we are just mankind in a fight against a pangolin, oops ,  bat oops , whatever virus of unknown origin (anything as long as it is not China), all united ..
next stage food crisis..and people tend to react to that last one


----------



## againsthegrain (11 December 2021)

qldfrog said:


> no not at all we are just mankind in a fight against a pangolin, oops ,  bat oops , whatever virus of unknown origin (anything as long as it is not China), all united ..
> next stage food crisis..and people tend to react to that last one




Back in 1930s Stalin staged a food crisis in Ukraine,  estimates range between 1m to 7m that died of starvation.  Been done before, can be easily orchestrated if needed


----------



## Sean K (11 December 2021)

Off topic from inflation but in regard to the above comments, we're already in an undeclared war. Much like the World was prior to every major kinetic conflict. At the moment, it's being played out in cyber space and in grey areas, but it's been going on for several years. Probably since China started taking reefs in the Spratlys and militarising them, stealing US IP, hacking our systems, and testing Taiwan's air defences. Unfortunately, it's just normal great power ascension but with a difference. Nuclear weapons mean that the homelands of the major powers will probably not be attacked. Yes, MAD is still a thing. So, most likely a limited war in the South/East China Sea between China and US and their allies will happen and lines drawn at some point. But attacking the mainland of either country will invoke a nuclear response which is difficult to imagine unless there's a mad man holding the codes.


----------



## mullokintyre (24 December 2021)

In a bitter blow to the  inflationary discussion, it would seem that prices for the items in the 12 days of christmas song have gone up by a mere 3% in two years. Apart from the Swans, every other bird in the index has increased significantly.
All of the gifts that included humans in some form or another were at or around the 3% mark. 
The 5 golden rings were no help at al.
Mick



Courtesy of Todays Australian


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## JohnDe (11 January 2022)

Inflation is not playing ball.

Covid has caused a massive disruption with the transport of goods, cargo ships have been stuck out at sea and unable to unload, this has caused some shortages of goods and prices to rise. But those ships are starting to unload, and during the shortage there was some panic that caused larger orders which will flow through in the next cycle.

Have a listen to Cathie Wood from the 19:14 minute mark  -


----------



## eskys (11 January 2022)

Inflation on the home front because of Covid...sick leave, logistics problems, COL, WOW  affected because of this. ING down more than 7% today because of Covid...one sector linked into another

Inghams $ING: "...the rapid spread of the Omicron variant...and the resulting staff shortages, are now also having a significant impact on the Australian supply chain, operations, logistics & sales performance of Ingham's".


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## moXJO (12 January 2022)

eskys said:


> Inflation on the home front because of Covid...sick leave, logistics problems, COL, WOW  affected because of this. ING down more than 7% today because of Covid...one sector linked into another
> 
> Inghams $ING: "...the rapid spread of the Omicron variant...and the resulting staff shortages, are now also having a significant impact on the Australian supply chain, operations, logistics & sales performance of Ingham's".



Temporary.
This wave is likely to fall hard after the peak. 
Nsw is already near peak and predictions on Vic is that the peak will come by the end of the month.

After that it's a different world (till next variant).


----------



## eskys (12 January 2022)

moXJO said:


> Temporary.
> This wave is likely to fall hard after the peak.
> Nsw is already near peak and predictions on Vic is that the peak will come by the end of the month.
> 
> After that it's a different world (till next variant).



I'm so glad you came in and pointed this out. Woke up this morning after mulling over this and thought there's a flaw in my post yesterday. Was thinking if anyone will come in and correct this mistake of mine.....the word 'inflation' the first word in the post should have been 'price hikes' As you pointed out, this price hike is only temporary. Price hikes do not equal inflation. It's about demand and supply.....this is what this forum is about.....ask and put our alternative thoughts across and we will get our brains ticking..........thank you for posting, good luck with your investments, moXJO


----------



## divs4ever (12 January 2022)

might not be so temporary  , businesses usually try to claw back cost increases  over time , and if so,  of those increased costs  are wages raised to reduce staff shortages ..  well it is hard to reduce staff wages at a later date ( and retain staff )

  other likely cost increases  include energy  , sure oil,gas , petrol might come back you still have electricity costs 

 also  there will probably be an increase in the cost of borrowing money  , currently it is very low ( in some places ) you would expect at least a return to historic averages 

   there is also a chance of increased regulation, and compliance costs ( these sort of folks just can't help themselves )


----------



## sptrawler (12 January 2022)

In W.A it seems wages are putting the pressure on inflation IMO, trying to get a tradie to do a small job at a reasonable cost just isn't happening, the housing stimulus is still running through the system. Also my son who works in mining is getting pay rises without asking for them, skills shortage is so accute, at the moment.


----------



## eskys (12 January 2022)

divs4ever said:


> might not be so temporary  , businesses usually try to claw back cost increases  over time , and if so,  of those increased costs  are wages raised to reduce staff shortages ..  well it is hard to reduce staff wages at a later date ( and retain staff )
> 
> other likely cost increases  include energy  , sure oil,gas , petrol might come back you still have electricity costs
> 
> ...



Yes, agree, divs. I was thinking more about the post of mine yesterday when I said that inflation will result because of Covid causing sick leave, hence leading to all kinds of problems, eg logistics, production,  which in turn cause shortage of supply. This I think might/may cause a rise in the price of food and merchandise. My thinking is, if Covid is not arrested and continues to cause disruption, then over years, the economy will be affected. However, I think central banks are within their means to take slow steps to cause as little disruption as possible to world economies, some of which may not be within their control........the future is not mine to see, I can only speculate.


----------



## moXJO (12 January 2022)

divs4ever said:


> might not be so temporary  , businesses usually try to claw back cost increases  over time , and if so,  of those increased costs  are wages raised to reduce staff shortages ..  well it is hard to reduce staff wages at a later date ( and retain staff )
> 
> other likely cost increases  include energy  , sure oil,gas , petrol might come back you still have electricity costs
> 
> ...



I think the situation of "covid panic" is temporary. After that it's the masses sentiment.

I've been told supply line issues should sort out by midyear. But that means nothing. It's possible we get a sugar hit if we see an end to the last 2 years of covid. But if the easy money is about to evaporate then it is what it is.


----------



## JohnDe (12 January 2022)

divs4ever said:


> might not be so temporary  , businesses usually try to claw back cost increases  over time , and if so,  of those increased costs  are wages raised to reduce staff shortages ..  well it is hard to reduce staff wages at a later date ( and retain staff )
> 
> other likely cost increases  include energy  , sure oil,gas , petrol might come back you still have electricity costs
> 
> ...




Most of those are not big enough issues to cause a major inflation risk.

Wages may increase but not until demand increases significantly, Covid is dampening demand. Besides, wages are starting from a low anyway, any increase will be just catch up.
Electricity costs will not rise significantly, there is new competition coming, wait and see. There could also be a drop in prices.
Oil and gas, yes I can see prices going up especially for lubricants.
Many businesses are flush with cash, waiting for opportunity and trades.
Not many governments will be game to increase regulation and compliance costs when they are trying to keep the economy going and trying to rev it up.

I purchased some quality wines at very reasonable prices during the Christmas holiday period, it seems that some companies have full warehouses and need to make some room.

Prices are all over the place at the moment, all dependent on the industry type and affects of Covid issues. However, there is fear in the consumer which is holding back everything. There is so much more that we haven't looked at - property prices (starting to level?), hospitality, electronics.

Just had a thought, my fuel bill has dropped by 60% since July 2021(we have a fuel card). The difference is that we now own an EV, and in comparison my electricity bill went up 10% in the same period.  

How many more EVs will be sold during 2022 and what affects will this cause?


----------



## eskys (12 January 2022)

I like you, John, you can always see outside the box Something not many are able to do so, and you can explain things more clearly, may I say more eloquent? (  By the way, nice to see you again) Well, that's all said and done, John, Well done


----------



## UMike (12 January 2022)

JohnDe said:


> Most of those are not big enough issues to cause a major inflation risk.
> 
> Wages may increase but not until demand increases significantly, Covid is dampening demand. Besides, wages are starting from a low anyway, any increase will be just catch up.
> Electricity costs will not rise significantly, there is new competition coming, wait and see. There could also be a drop in prices.
> ...



As a restaurant owner cost of business has gone through the roof.
December (and we should of done this sooner) we raised prices 10% to more than cover them all.

End result is we are doing more with less. The few staff we have get paid more but do more work. Cost of Goods absorbed by charging more.

This is just my corner atm.


----------



## JohnDe (12 January 2022)

UMike said:


> As a restaurant owner cost of business has gone through the roof.
> December (and we should of done this sooner) we raised prices 10% to more than cover them all.
> 
> End result is we are doing more with less. The few staff we have get paid more but do more work. Cost of Goods absorbed by charging more.
> ...




Yes, as mentioned hospitality is one to watch 


> Prices are all over the place at the moment, all dependent on the industry type and affects of Covid issues. However, there is fear in the consumer which is holding back everything. There is so much more that we haven't looked at - property prices (starting to level?), *hospitality*, electronics.




I also have a business, and in my industry our usual quiet months of the year have not appeared for the past two years. We are flush with funds looking to invest in our businesses, but due to uncertainty we wait.


----------



## JohnDe (12 January 2022)

eskys said:


> I like you, John, you can always see outside the box Something not many are able to do so, and you can explain things more clearly, may I say more eloquent? (  By the way, nice to see you again) Well, that's all said and done, John, Well done




Thanks eskys, nice to hear from you again.


----------



## mullokintyre (13 January 2022)

US inflation  hits 7% and is now the highest in 40 years.
ABC NEWS


> Data showed the US consumer price index surging a whopping 7 per cent in the 12 months through December, the biggest annual increase since June 1982, but in line with economists' forecasts.
> 
> The economy is experiencing high inflation — well above the Fed's 2 per cent target — as the COVID-19 pandemic disrupts supply chains. The high cost of living is also weighing on US President Joe Biden's approval rating.
> 
> ...



Glad that investors  are comforted  that it was not worse than feared.
For something that the FED insists is transitory, and is not only persisting, but keeps getting higher.
For the price makers, its great.
For the price takers, not so great.
Arguments over the level "transitoriness" of inflation are immaterial to the majority of  Americans.
It still has a profound effect on their lives.
As I wrote some time ago, the effects of inflation remain forever, they don't go away.
The fried chicken that went from a buck to a buck10  will not go back to a buck if the inflation is transitory or not.
And they will remember come election time that although some of the causes of inflation were because of the policies of previous incumbent  in the White House, pretty much all of the effects are under the watch of the existing incumbent.
Whether deserved or not, this will not play out well for democrats in the up coming mid terms,  and unless somethings change pretty quickly in the near future, it may even cross into the  2024  presidential election.
Mick


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## divs4ever (13 January 2022)

ECONOMIST SLAMS BIDEN AFTER INFLATION NEWS: YOU ARE PAYING 'BIDEN'S INFLATION TAX' | NATIONAL REPO..​


 but hopefully the older members saw this coming  , right  ??


----------



## CityIndex (13 January 2022)

The US Dollar is suffering despite CPI coming in at a 40-year high. However, given that the 7% YoY increase was exactly in-line with the market's expectation, traders probably feel like it is unlikely the Fed will accelerate their rate hike plans. 

This helped a lot of currency pairs breakout overnight, including AUD/USD, which is trading at its highest level since late November. Can the pair rally back above 0.7300 or is there a chance that tonight's US PPI release held the USD regain some strength?


----------



## JohnDe (13 January 2022)

mullokintyre said:


> US inflation  hits 7% and is now the highest in 40 years.
> ABC NEWS
> 
> Glad that investors  are comforted  that it was not worse than feared.
> ...




Don't jump in before checking the depth.

Media is doing what they do best, sharing the bad news. You may be correct, inflation may take off like a rocket and crash the economy and the market, but before we prepare for the end maybe we should research all the information, rather than just the headlines. That was Cathy Wood's point (see video in my above post).

I have some relatives in the US, so far I have not heard any complaint about food prices, though I do accept that different states would have different issues. So far a couple of my cousins are only upset about the price of 'gas', Covid restrictions, enforcement of mask wearing and vaccinations, and Biden .

We are in uncharted territory, no economist or policy maker has lived through or has an instruction Manuel of what to do during and after a world pandemic that is affecting most aspects of our lives and business.

Inflation could continue to climb, or it could jump around affecting different parts of the economy in different ways, it could be a blip and then back to normal. We don't know, so lets not through all our eggs into one basket, at the moment.

I am watching with a very keen eye.

Meat and chicken, price per kilogram​
Chilled boneless beef 7 - 8 USD
Pork fillet 4 - 5 USD
Sliced beef, fillet 6 - 8 USD
Ribeye beef steaks 9 - 10 USD
Marinated beef for barbecue 8 - 11 USD
Chicken Breasts 3,3 - 4 USD
The whole chicken 2,6 - 3 USD
Prices for fish and seafood per 1 kg​
Salmon filet 17 - 30 USD
Salmon steaks 12 USD
Fillet of catfish 8 USD
Tuna fillet 28 USD
Trout ocean filet 40 USD
Shrimp 12 - 14 USD
Crab 22 USD
Vegetables and fruits​Prices of vegetables per 1 kg​
Potato 1 USD
Onion 1 - 1,5 USD
Tomatoes 1 USD
Broccoli 0,80 USD
Peppers 3 - 5 USD
Salad mix 150 gr 3,3 USD





__





						Food Prices in USA grocery stores
					

A sample of food prices from several stores: how much is meat and milk, vegetables and fruits, alcohol, bread and other food products in America



					www.globalprice.info


----------



## mullokintyre (13 January 2022)

JohnDe said:


> Don't jump in before checking the depth.
> 
> Media is doing what they do best, sharing the bad news. You may be correct, inflation may take off like a rocket and crash the economy and the market, but before we prepare for the end maybe we should research all the information, rather than just the headlines. That was Cathy Wood's point (see video in my above post).
> 
> ...



 The picture you posted is a sapshot in time, it does not say whether the prices are going up down, or staying the same.
From US Inflation Calculator
Food  increased 6.3% for the year, Energy by 29.3%, and the rate for all items in the basket, 7%.
The average monthly increase for the year was 3.9%, with all of the big increases in the backend of the year.
We will have to wait for some time to see which way this will all go.
Mick


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## PetEarwig (14 January 2022)

I'm currently in the US and have been for the past 8 months. I would say the stats say inflation is rising, but it isn't until you 'feel' the impact of price rises that you start caring. I haven't 'felt' any adjustments in food prices at either grocery stores or restaurants. However, construction materials I do see some changes, and significant shortages of some items. Depending on your link in the chain you may be feeling inflation in different ways. I'm just a consumer.


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## noirua (14 January 2022)

Back in the 1970s there was a situation that came about due to the 350% to 400% increase of the oil price and in those days oil was far more critical than today though the basics are still in place.
Inflation rose far above interest rates the UK had 25% inflation with interest rates in the 7% to 8% range on an as-bad-as-it-gets scenario at its peak.
Australia's inflation peaked at 15.42% in 1974 and averaged over 10% for 9 years until 1983. Interest rate in 1974 was 8.38%.  Interest rates averaged over 10% from 1974 to 1996.




__





						Interest Rates Australia
					

Historical Interest Rates for Australia since 1959. See how bank lending rates have changed over time. It clearly shows we are at or near historical lows.




					www.orangefinance.net.au
				







__





						Australia Inflation Rate 1960-2022
					

Inflation as measured by the consumer price index reflects the annual percentage change in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at specified intervals, such as yearly. The Laspeyres formula is generally used.




					www.macrotrends.net
				




So we can see how disaster can befall and recovery takes very many years.

Today very many countries are hit with high gas prices increasing nearly as much as oil did in the 1970s.

Has the world learnt from all of this history. In a nutshell 'NO'! They never seem to realise that the basics are never different even if the basics  are 50 years or more later. They are in fact Always the Same.


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## JohnDe (14 January 2022)

noirua said:


> Back in the 1970s there was a situation that came about due to the 350% to 400% increase of the oil price and in those days oil was far more critical than today though the basics are still in place.
> Inflation rose far above interest rates the UK had 25% inflation with interest rates in the 7% to 8% range on an as-bad-as-it-gets scenario at its peak.
> Australia's inflation peaked at 15.42% in 1974 and averaged over 10% for 9 years until 1983. Interest rate in 1974 was 8.38%.  Interest rates averaged over 10% from 1974 to 1996.
> 
> ...




Yes, and don't forget the 1990's 'The recession we had to have'. No inflation an economy that was a mess and caused a lot of heartache and bankruptcy.


> The Hawke Labor Government initially responded to the crisis by asking the Conciliation and Arbitration Commission to defer its national wage case. Commodity prices dropped and the Australian dollar sharply declined. The Reserve Bank conducted a $2 billion intervention to hold the dollar at 68c but it crashed to 51c. In December 1987, Keating said that the Australian economy would weather the storm because the Hawke Government had already balanced its Budget and brought down inflation




The point is that no one really knows what the whole outcome of the Covid pandemic will bring individual counties and the whole world.

Property sales are starting off slow this year. If property prices crash will that cause inflation?

Natural gas sales are ramping up, competition is increasing. Developed countries, including China, are moving to new forms of energy. How will this affect the pricing of natural gas?

Let's wait till all the numbers and information is out before jumping to conclusions about inflation. There are a lot of factors to take into account and a new dilemma that no economist, government or treasurer have a manual for.





__





						Early 1990s recession in Australia - Wikipedia
					






					en.wikipedia.org


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## JohnDe (14 January 2022)

PetEarwig said:


> I'm currently in the US and have been for the past 8 months. I would say the stats say inflation is rising, but it isn't until you 'feel' the impact of price rises that you start caring. I haven't 'felt' any adjustments in food prices at either grocery stores or restaurants. However, construction materials I do see some changes, and significant shortages of some items. Depending on your link in the chain you may be feeling inflation in different ways. I'm just a consumer.




My wife's cousin is married to a Texan, he is in the building trade and says that timber is more expensive than gold. However, home renovations and additions are booked for the next 24 months.


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## eskys (14 January 2022)

I thought of this thread this morning at the vegetable patch. 

The patch is bordered by Sir Walter Buffalo, healthy and green.
I saw 2 strong shoots poking out from the bed, and without looking deeper, assumed the Buffalo grass had infiltrated the bed, as they often do if left unchecked. Lo and behold, I'd destroyed the promising ginger which had been growing unnoticed until now. 

Inflation has scared the daylights out of us, causing some of us into inaction and inertia. Maybe we should be thinking now of what are the sectors/stocks we can look at so we can prosper once this Omicron is over, production and logistics back to normal etc....We can watch and monitor, no need for jump in now. I see Sean K is doing just that, good on him.


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## mullokintyre (14 January 2022)

One of the Myriad of reasons why goods are slow/hard to come by could be just plain theft.
Containers Busted Open

Mick


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## divs4ever (14 January 2022)

mullokintyre said:


> One of the Myriad of reasons why goods are slow/hard to come by could be just plain theft.
> Containers Busted Open
> 
> Mick



 interesting  i hadn't thought of 'theft in motion'  like that 

 i was more thinking  of out-dated stock  written off and insurance  claimed


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## Smurf1976 (14 January 2022)

JohnDe said:


> Electricity costs will not rise significantly, there is new competition coming, wait and see. There could also be a drop in prices.



Average annual wholesale spot prices (calendar years):

Queensland:
2019 = $86.30
2020 = $52.65
2021 = $119.89

NSW:
2019 = $90.29
2020 = $74.30
2021 = $85.82

Victoria:
2019 = $129.38
2020 = $66.07
2021 = $59.84

Tasmania:
2019 = $111.37
2020 = $53.96
2021 = $49.96

SA:
2019 = $135.99
2020 = $53.98
2021 = $70.45

WA (South-West Interconnected System only):
2019 = $48.18
2020 = $50.95
2021 = $52.33

The big inflationary pressure in the industry at present is fuel costs. The present LNG netback price being $41.24 / GJ (ACCC data) and projected to remain over $30 through to the end of March 2030.

Putting that into perspective, $40 is simply "off the charts" sort of crazy, indeed the $20 reached briefly last year was off the charts at the time and seen as a crisis of sorts when it happened. Price in December 2019 was $6.53 and the low point was $2.29 in July 2020.

LNG netback prices don't directly flow through to the domestic market but they do influence it in the context of uncontracted gas. If someone can export something for $30 - $40 then it's a tough gig to persuade them to sell it for less - they'll only do that if demand stays down low enough that there's no physical means to export it due to capacity constraints which puts a volume cap on the quantity available at lower prices.

The thermal coal price presently in the high AUD $200's per tonne is likewise a very real cost pressure especially in Queensland and, when contracts expire or for above contract volumes, NSW. It's cheaper than gas at those prices,

There's some very real inflationary pressure there, presently being hidden by fixed price contracts and so on but it's there that's for sure and will flow through in due course if the underlying circumstances don't change since contracts don't run forever. 

In due course fossil fuels will become mostly irrelevant to the input costs for electricity but we're a long way from that at present, in practice black coal and gas set the marginal price much of the time and right now they're getting expensive.


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## Smurf1976 (14 January 2022)

JohnDe said:


> Natural gas sales are ramping up, competition is increasing. Developed countries, including China, are moving to new forms of energy. How will this affect the pricing of natural gas?



Australian east coast LNG netback prices (Source = ACCC data):

November 2019 = $6.72
December 2019 = $6.53
January 2020 = $6.29
February 2020 = $5.86
March 2020 = $3.86
April 2020 = $3.73
May 2020 = $3.50
June 2020 = $2.44
July 2020 = $2.29
August 2020 = $2.36
September 2020 = $3.14
October 2020 = $4.71
November 2020 = $5.71
December 2020 = $7.61
January 2021 = $8.73
February 2021 = $19.62
March 2021 = $8.56
April 2021 = $6.44
May 2021 = $7.64
June 2021 = $9.69
July 2021 = $11.74
August 2021 = $14.38
September 2021 = $14.85
October 2021 = $22.18
November 2021 = $39.35
December 2021 = $35.53
January 2022 = $41.24

At the present price diesel or even jet fuel are cheaper to burn than gas is and there's some concern starting to arise around that. I'm not aware of any financial blow ups in Australia over it but there's been some major drama overseas with about 40% of all energy retailers now having officially collapsed (financially) in the UK and more expected to follow.

Price data source = ACCC. 
Other comments source = my own knowledge and some from UK media.


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## divs4ever (14 January 2022)

given SKI  has already  been taken-over  , and AST  will probably follow  ,  i don't  know where this beneficial  competition  is coming from


----------



## frugal.rock (14 January 2022)

South Korea Raises Interest Rates Back to Pre-Pandemic Level​








						South Korea Raises Interest Rates Back to Pre-Pandemic Level
					

The central bank increased its benchmark seven-day repurchase rate by 0.25 percentage point to 1.25%.




					www.wsj.com
				




LPG fuel is the highest I've ever seen it, Sydney/Regional NSW


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## JohnDe (14 January 2022)

Smurf1976 said:


> Australian east coast LNG netback prices (Source = ACCC data):
> 
> November 2019 = $6.72
> December 2019 = $6.53
> ...




Australia price for gas may go up, but that alone will not cause our inflation rate to increase substantially, and it definitely will not effect the US's inflation.



> US natural gas futures plunged more than 12% to below $4.3 per million British thermal units, as new weather forecasts showed that temperatures won’t be as low as previously expected in the ten days ahead. Weather updates are poised to make prices more volatile than usual, after expectations of extreme cold at the end of the month drove a 14% jump to seven-week week highs last session.














__





						Natural gas - 2022 Data - 1990-2021 Historical - 2023 Forecast - Price - Quote - Chart
					

US natural gas futures soared 10% to above $6.2/MMBtu on Monday, the highest in two weeks due to a rebound in LNG exports and expectations of higher domestic demand. Average US gas demand, including exports, is set to rise to 101.2 bcfd next week, from 98.3 bcfd this week. Berkshire Hathaway...




					tradingeconomics.com


----------



## JohnDe (14 January 2022)

frugal.rock said:


> South Korea Raises Interest Rates Back to Pre-Pandemic Level​
> 
> 
> 
> ...




LPG is a dying fuel for consumer vehicles. Which vehicle manufacturer produces an LPG model, and when was the last Holden & Ford LPG model?

Watch LPG prices go up and availability wither, this is an example of what will happen to fuel in the next 20 years, it'll be slower for fuel but the same will happen when vehicle manufacturers slow down production and eventually stop.


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## JohnDe (14 January 2022)

Smurf1976 said:


> At the present price diesel or even jet fuel are cheaper to burn than gas is and there's some concern starting to arise around that. I'm not aware of any financial blow ups in Australia over it but there's been some major drama overseas with about 40% of all energy retailers now having officially collapsed (financially) in the UK and more expected to follow.
> 
> Price data source = ACCC.
> Other comments source = my own knowledge and some from UK media.




That's a pretty tall 'comment'  

Considering that the average Australian LNG user goes through about 22Gj's per year, and "_One gigajoule of natural gas is approximately equivalent to 27 litres of fuel oil, 39 litres of propane, 26 litres of gasoline or 277 kilowatt hours of electricity_." And the wholesale price of LNG is "_$10.10/GJ - $11.51/GJ _", so at most the consumer is paying $25 for the equivalent of 26L of petrol in LNG.









						Wholesale statistics
					

The AER monitors the performance of wholesale electricity and gas markets and publishes data from that monitoring in reports such as the annual State of the Energy Market and Wholesale Markets Quarterly report. This page provides the key data series' for these markets; the charts and tables, as...




					www.aer.gov.au


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## Smurf1976 (15 January 2022)

JohnDe said:


> That's a pretty tall 'comment'
> 
> Considering that the average Australian LNG user goes through about 22Gj's per year, and "_One gigajoule of natural gas is approximately equivalent to 27 litres of fuel oil, 39 litres of propane, 26 litres of gasoline or 277 kilowatt hours of electricity_." And the wholesale price of LNG is "_$10.10/GJ - $11.51/GJ _", so at most the consumer is paying $25 for the equivalent of 26L of petrol in LNG.




Ampol terminal gate pricing for diesel is presently in the range of 155 to 160 cents per litre from most terminals nationally. Source = Ampol website.

Note those prices include GST and excise which to compare as a fuel for industry, power generation etc will need to be removed.

Taking the price as 156 cents per litre less GST and excise (43.3 cents per litre) brings that down to 98.5 cents per litre.

38.6 MJ per litre of diesel so that's $25.52 per GJ for diesel at the terminal.

Versus LNG netback price presently $41.24 per GJ and with the forward outlook being:

February 2022 = $40.49
March 2022 = $34.02
April 2022 = $31.14
May 2022 = $31.03
June 2022 = $31.36
July 2022 = $31.93
August 2022 = $31.90
September 2022 = $32.00
October 2022 = $31.89
November 2022 = $32.89
December 2022 = $33.54

Source = ACCC

Now in both cases there's a need to add transport costs to those prices. That is gas pipeline charges and fuel tanker costs for gas and diesel respectively. Both will vary considerably with location and range from trivial to significant.

For the large gas and diesel fired power station that's literally walking distance from the oil terminal it won't cost much at all to run a tanker back and forth.

For one that's 165km away by road and rather near the gas source the opposite is true.

It varies....

Same with industrial users. The cost of transporting the fuel will vary with location. Plus there's the question of whether they're even set up to use something other than gas in the first place - a significant volume of power generation is, some other users are too, many aren't.

The one thing that's avoiding a price spike on the domestic market _at present_ is seasonality. It's summer so in the Australian context that's the season of low gas demand and quite simply production capacity exceeds domestic demand + liquefaction capacity for export, leading to a large price differential between the netback value and the current spot price. Or in simpler terms there's an abundance of gas domestically and a bottleneck which precludes all that being exported, thus leading to a price differential.

Spot prices in Victoria over the past two days being in the $8 to $10 range whilst SA, NSW and Qld it's in the $9 to $10 range.

BUT.....

That's with very low demand. A mere 582 TJ forecast for today for NSW, ACT, Vic, Tas and SA combined versus winter daily demand which routinely runs at roughly three times that level. For example, 1870 TJ on 7 July 2021 - a randomly chosen day of no particular significance, any other mid-winter day will be similar. Data source = AEMO gas bulletin board (which to be fair probably isn't being looked at by anyone outside the energy industry but it's publicly accessible online, just agree to the terms and all good, the data's there for all to see).

Now where the issue emerges is simply that there's a need to curtail gas input to LNG production in order to meet domestic demand in full during the colder months since gas production capacity isn't sufficient to do both at once. That is, gas needs to flow from Qld to SA during winter to meet demand in the southern states (incl NSW) whereas right now flow is from SA to Qld in order to run the LNG plants flat out. The physical capacity to do both at once isn't there.

Now if a GJ of gas is worth $31 to an LNG producer then how likely is it for that gas to be diverted into the domestic market at a far lower price, say $10?

Time will tell but I'm sure I'm not the only one with serious doubts about that happening. Many are thinking that, given the opportunity to export at $31, they'll want the same price domestically and if so we have a huge price shock straight ahead.

That the issue hasn't emerged previously is simply because the LNG wasn't worth overly much. That being the case, the LNG producers willingly sold gas back into the domestic market cheaply rather than putting it into the LNG plants. Not really a problem if the stuff is worth $8 but very different if it's worth $40.

That said.....

Even if I'm 100% wrong on that point and it doesn't end up flowing through to the Australian domestic market, it's still a real, actual price shock that's already occurring for those buying LNG. It's already a price shock across the EU, UK and much of Asia including China and that's a significant event in itself regardless of what happens in Australia. Rather a lot of things are made in China....







Bearing in mind there that it's not about someone cooking dinner at home since the bulk of it's going into heavy industry and power generation. Hence the recent shutdowns of urea production in Europe and elsewhere - it simply isn't profitable to pay that price for feedstock gas unless the price of the product (urea, that's fertilizer and AdBlue in practice) rises to a point where production returns to profit. So it's still adding to price inflation via fertilizers, chemicals, agriculture etc even if Australia escapes it domestically. 

A key point about gas is that it isn't a single market. The market I'm referring to is LNG and LNG-linked pricing which in practice is the EU, UK, Japan, China, India, South Korea and a few others as LNG importers and Australia as an exporter with pricing linked to LNG during winter but not during summer on account of capacity constraints.

Somewhere like the US is irrelevant in that context since their market is effectively an island due to limited import and export capacity relative to production and consumption. They do have export and import, just not enough to bring about price linkage unless the margin between domestic production capacity and consumption were to become sufficiently slim that exports could bring about a physical shortage locally. At present that isn't the case in the US.


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## Smurf1976 (15 January 2022)

Addition to previous post, regarding the source of gas price charts:

International Monetary Fund, Global price of Natural gas, EU [PNGASEUUSDM], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/PNGASEUUSDM, January 14, 2022.

International Monetary Fund, Global price of LNG, Asia [PNGASJPUSDM], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/PNGASJPUSDM, January 14, 2022.

To the underlying issue though, I do acknowledge there's always uncertainty with anything looking ahead. I've said a lot about it but I could be wrong in the context of the Australian market. Time will tell, we'll know at the end of winter..... 

For those in the EU, UK, China and so on however, it's a definite price shock actually happening.


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## over9k (15 January 2022)

Posted all these in the virus thread, but the "economic consequences of a virus outbreak" is essentially just inflation now:


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## JohnDe (15 January 2022)

Smurf1976 said:


> Ampol terminal gate pricing for diesel is presently in the range of 155 to 160 cents per litre from most terminals nationally. Source = Ampol website.
> 
> Note those prices include GST and excise which to compare as a fuel for industry, power generation etc will need to be removed.
> 
> ...




Regardless of how you word it, it is still a lot cheaper for the majority of households in Australia to use natural gas rather than your examples of diesel and jet fuel. As you mention, transport and taxes are involved. The only price households care about is the final bill, not the 'what if, scenarios.

I don't believe that LNG prices in Australia is not a major inflation contributor, our winters not cold enough to cause the issues that Europe and the US have when heating fuel prices go through the roof, but as my previous examples showed, LNG prices have stabilised and even dropped in the US.





Below is my personal natural gas bill.






Saying all that, I will watch the inflation figures closely but I will not panic, because panic causes opportunities to be missed.


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## Smurf1976 (16 January 2022)

JohnDe said:


> Regardless of how you word it, it is still a lot cheaper for the majority of households in Australia to use natural gas rather than your examples of diesel and jet fuel. As you mention, transport and taxes are involved. The only price households care about is the final bill, not the 'what if, scenarios.




It's not households I'm thinking about however. At the national level households are only 10.6% of gas consumption after all so whilst it may be an issue for some individuals in terms of personal finances, particularly in Victoria where household use is far higher than elsewhere, overall households aren't the issue.

It's the other 89.4% of gas consumption being used outside the residential sector I'm thinking about and how that may have broader implications.

When business faces a cost increase then they'll pass that onto consumers if they can get away with doing so. They'll only go down the track of cutting profit if they don't have any choice.

Residential as a % of total gas use from Australian Government statistics for 2019-20:

National = 10.6% of gas consumed is used by households

NT = rounds to zero 
Queensland = 1.2%
Tasmania = 1.5%
WA = 1.6% 
SA = 11.7% 
NSW = 21.4%
Victoria = 42.0% 

So in economic terms gas is primarily an input to business for the production of something else either goods or services and from an inflation perspective my thinking is that business will at least try and claw back any cost increase by raising prices to consumers of those goods and services. Anything from processed vegetables to plastic pipe, if it's costing them more to produce it then they'll want to recover that cost via higher prices for the product.

Same as things like transport or commercial rents. If the cost goes up then business will at least try and pass that on as a price rise to consumers.

Agreed it's not in the same league as wages etc but I can see it possibly having some impact. Time will tell.


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## over9k (16 January 2022)

Is there a BTU to KWH conversion or equivalent I could use to do some heating calculations or whatever with?


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## sptrawler (16 January 2022)

1 Btu is , 0.001055 MJ

1 MJ is 0.277kwh

1 Btu is 0.000293 kwh
If my thermodynamics serves me correctly.


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## Smurf1976 (16 January 2022)

Smurf1976 said:


> When business faces a cost increase then they'll pass that onto consumers if they can



Expanding on that point a bit and sticking to the subject of inflation not gas per se, some things are common inputs to virtually all businesses or at least the majority.

Capital - someone has invested money, either their own or borrowed, into the business. Either way a return on that capital is expected.

Labour - someone works in the business and labour isn't free. Even if there's no employees, just the owner, they still need to earn enough to live on.

Energy - almost all businesses require some form of energy input be it electricity, petroleum based fuels, gas, coal or whatever but there aren't many that don't have at least some expenditure in this area. It's obviously far more significant for manufacturing than it is for a legal firm but there are very few for whom it's zero.   

Now that's perhaps stating the obvious for many but I've mentioned it simply to point out that those three are inputs to virtually every business. Everything from farming to accounting to tourism to dentists have at least some expense in those three areas. They are central pillars for all economic activity.

If any of those rise in cost then it affects the input costs for practically every business and most will at least try to recover that from their customers.


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## Smurf1976 (16 January 2022)

over9k said:


> Is there a BTU to KWH conversion



1 kWh = 3412 BTU = 3.6 MJ


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## over9k (16 January 2022)

Smurf1976 said:


> Expanding on that point a bit and sticking to the subject of inflation not gas per se, some things are common inputs to virtually all businesses or at least the majority.
> 
> Capital - someone has invested money, either their own or borrowed, into the business. Either way a return on that capital is expected.
> 
> ...



I just thought I'd post the corresponding graph: 




Simple movement of the supply curve upwards as you've now added X amount (in this graph it's 2 of price) more to the production of each good/service and thus there's less of both producer and consumer surpluses. 

Aka everyone loses.


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## divs4ever (16 January 2022)

over9k said:


> I just thought I'd post the corresponding graph:
> 
> View attachment 135910
> 
> ...



and what if ?
 there are artificial constraints on supply ?
and/or  limits on prices ?

 and NO  , i do not expect a pleasant answer to that , but that is where we are likely to be very soon


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## JohnDe (16 January 2022)

It looks like everyone has forgotten about *productivity*. Most people do, so don't feel bad 

There is always going to be increases in some part of a businesses cost base, the business that can counteract increases with other measures such as 'productivity' will be the most successful. These are the companies that investors look for.



> Productivity is a measure of economic or business performance that indicates how efficiently people, companies, industries and whole economies convert inputs, such as labor and capital, into outputs, such as goods or services. Productivity can be measured at any of these five levels.












						The Key to Productivity
					

Explains how to measure and monitor productivity to improve your workforce.




					www.netsuite.com


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## sptrawler (16 January 2022)

Smurf1976 said:


> 1 kWh = 3412 BTU = 3.6 MJ



It has been a long time. 🤣


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## divs4ever (16 January 2022)

JohnDe said:


> It looks like everyone has forgotten about *productivity*. Most people do, so don't feel bad
> 
> There is always going to be increases in some part of a businesses cost base, the business that can counteract increases with other measures such as 'productivity' will be the most successful. These are the companies that investors look for.
> 
> ...



 depends on what YOU call 'productivity '   , i haven't forgotten 'productivity ' as described in the 1980's 

 but the Keynesians  know as much about 'productivity ' as they do about 'truth in advertising '  or real economics   ( when their theory became a train-wreck they created MMT  to fool some more over-educated  clowns .)

 so yeah , when  i see 'productivity gains ' that DON'T increase product sold or reduce costs  , my mind registers 'BUZZWORD  ' and moves on 

 if you think i am being harsh  check out how many nations define their GDP


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## noirua (17 January 2022)

Jim Grant on What Inflation Means for Asset Values, Crypto, and Meme Stocks
14 January 2022
Https://youtu.be/9xQ4_xtUtqg​


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## JohnDe (17 January 2022)

divs4ever said:


> depends on what YOU call 'productivity '   , i haven't forgotten 'productivity ' as described in the 1980's
> 
> but the Keynesians  know as much about 'productivity ' as they do about 'truth in advertising '  or real economics   ( when their theory became a train-wreck they created MMT  to fool some more over-educated  clowns .)
> 
> ...




I supplied an example of productivity. 

Productivity is real, it can be achieved in many ways - reducing waste, improving energy efficiency, improved working conditions, and so on. 

I'm currently reading Power Play: Tesla, Elon Musk, and the Bet of the Century, there is an example from early 2000 of an electroplating company that due to state labour laws could only operate for 16 hours per day.  However, one smart cookie worked out a program that allowed the robotics to operate unattended, start up and at the end of its shift prepare for servicing when staff came in. Affectively improving productivity by a very large amount. I don't have the book in front of me so can't quote his name but he went on to help set up the Tesla plants.

Productivity is real, anyone trying to fake it will be caught out pretty fast.


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## mullokintyre (17 January 2022)

There are many examples of productivity improvements, and they are still happening.
The problem is, the huge increases in red tape, OHS regulations, permits, registrations etc are swamping whatever can be achieved through any productivity gains.
Talk to anyone  who runs a business, especially if they have employees as distinct from a sole trader.
When we hade had a business, we used to have these A-frame signs that the staff put out in the street  every morning announcing we were open, what specials were on etc..
After  few years, the local council inspector came around and told all the businesses in the street that they now had to pay $150 a year to have signs put out. 
When I asked what do we get  for our 150 per sign , I was told so the council  would know how many signs there were in the town.  
So I waited six months and  sent a letter to the council asking how many there were. The response I got back was that they could only give an estimate, as there some exemptions. Not for profit, community orgs, and not surprisingly, council owned premises were exempt. 
So I asked why did they need to know how many signs there where, and how would council services be improved  by it?
Would the council be sending someone out every morning to count how many signs there were versus how many had been paid for?
Of course not they said, it would be a waste of council resources.
So what was the point I asked? Lots of waffle , but no real reason.
I could make another 8,000 examples, but you get the drift.
Mick


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## over9k (17 January 2022)

divs4ever said:


> and what if ?
> there are artificial constraints on supply ?
> and/or  limits on prices ?
> 
> and NO  , i do not expect a pleasant answer to that , but that is where we are likely to be very soon



Supply curve moves further upwards.


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## JohnDe (17 January 2022)

mullokintyre said:


> There are many examples of productivity improvements, and they are still happening.
> The problem is, the huge increases in red tape, OHS regulations, permits, registrations etc are swamping whatever can be achieved through any productivity gains.
> Talk to anyone  who runs a business, especially if they have employees as distinct from a sole trader.
> When we hade had a business, we used to have these A-frame signs that the staff put out in the street  every morning announcing we were open, what specials were on etc..
> ...




Sounds like your productivity was low, due to time wasted on thought and discussion with council about a $150 yearly fee. Yes, that contributes to inflation and poor business profits.

Others businesses may have gone through another process and increased productivity, maybe by paying the $150 and then actively chasing work or looking at ways to improve savings in idle work hours and and then used those extra hours to produce or sell.

My council fees went up a few years back, most of the time there is no point trying to argue about it, so I looked at how I could increase income to pay the added council fee. 
The first thing I did was to approach all my suppliers and discuss price reductions. Most of the suppliers cooperated, they gave me a % discount on purchases which had the added bonus of increased sales due to some of the discount being passed onto our customers, and my purchases increased. In the end everyone was happy and my productivity and profits were improved.

There is always good and bad examples.


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## mullokintyre (17 January 2022)

JohnDe said:


> Sounds like your productivity was low, due to time wasted on thought and discussion with council about a $150 yearly fee. Yes, that contributes to inflation and poor business profits.



Big call there mate, but I see little point in discussion, its not productive.
Mick


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## divs4ever (17 January 2022)

over9k said:


> Supply curve moves further upwards.



not if you apply price caps , 

 you will find businesses unwilling to supply/produce at a loss and MIGHT even choose to close  or cease making unprofitable products ,

 now i can't guarantee price caps will be widespread , but Left-leaning governments  and those facing  an imminent election  , have some history of applying them for political gain


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## over9k (17 January 2022)

divs4ever said:


> not if you apply price caps ,
> 
> you will find businesses unwilling to supply/produce at a loss and MIGHT even choose to close  or cease making unprofitable products ,
> 
> now i can't guarantee price caps will be widespread , but Left-leaning governments  and those facing  an imminent election  , have some history of applying them for political gain



Causing a shortage and only making something like an energy crisis worse. 

If you're worried about a full on energy crisis, it's a very real possibility yes.


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## divs4ever (17 January 2022)

over9k said:


> Causing a shortage and only making something like an energy crisis worse.
> 
> If you're worried about a full on energy crisis, it's a very real possibility yes.



 yes i am  , i hold several that rely on high energy use  ( gold producers , various manufacturers  , and some transport related  companies )

 and to make it worse the crisis is by design  , not  endemic incompetence  , so is this incentive to follow the 'climate change agenda '  or foment a major war  , somebody is planning for a BIG win


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## Smurf1976 (17 January 2022)

JohnDe said:


> Productivity is real, anyone trying to fake it will be caught out pretty fast.



I think it depends on the situation.

Small business probably true. Either the business is profitable or it's not and if not then it fails fairly quickly.

Big business or government however, and that's my personal background in terms of work, well suffice to say some really odd things do happen and it goes to both extremes. Some brilliance does happen but so does some shockingly bad stuff and it comes down to the reality that large organisations, be they government or listed companies, all too often suffer from internal politics which prevents things happening even when "everyone wins".


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## moXJO (17 January 2022)

Business is screaming out for workers at the moment. You can command a decent wage if you know what you are doing. And price is going up for services.

If they do push immigration. It's going to be an upward push on housing prices and rents again.


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## Smurf1976 (17 January 2022)

divs4ever said:


> you will find businesses unwilling to supply/produce at a loss and MIGHT even choose to close or cease making unprofitable products



I don't wish to harp on about one industry, the thread is inflation not energy supply, but if I was to pick an industry where that scenario's most likely then energy would be it.

I say that since there are countless precedents globally for price regulation and I'm also extremely well aware of the politics of the industry in Australia and the cost pressures which exist.

About 40% of all gas and electricity retailers in the UK have failed financially in recent months. They're stuck in a "buy high, sell low" loss making proposition, unable to pass on cost increases to consumers due to a combination of fixed price contracts on the sell side not backed by fixed contracts on the supply side, and government price regulation which has financially blown them up.

There's quite a bit of stuff in the industry at present which is reliant on legacy contracts to be viable. That is, the selling price of gas or electricity is lower than the spot market price of the commodity on the supply side. The only thing that's avoiding a crisis being that there's a contract in place which prevents the fuel supplier passing through the spot price. Trouble is, contracts like that always have an expiry date, you can't forever buy a commodity at a quarter of the prevailing market value that ends at some point.


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## divs4ever (17 January 2022)

and in certain  areas  rising energy costs is a  big component in the current  inflation , that energy bottle-neck  , may easily become a food supply  bottle-neck ,  and be seen as another sign of inflation

 ( i see inflation as an erosion of buying/spending power )


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## over9k (17 January 2022)

Yeah, leftists don't understand economics and you'll never be able to convince them that they don't, more news at 11.


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## frugal.rock (17 January 2022)

@mullokintyre 
I won't go into it, but I detest LGA'S... corruption left, right and centre. 
What the Muppets should have told you about your signs is....
Legal liability. 
If Aunty Jack falls over and smashes his dentures out on your sign, Council is liable.
Whether they put the money into actual insurance or not is the question one might be concerned about. 
My local council had over $10 million invested in Lehmann etc
They got back around 15 cents in the dollar. I reckon they should all be paraded in the village square so we can pelt them with rotten veggies and a few rocks here and there... 😂😠


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## over9k (17 January 2022)

frugal.rock said:


> @mullokintyre
> I won't go into it, but I detest LGA'S... corruption left, right and centre.
> What the Muppets should have told you about your signs is....
> Legal liability.
> ...



I point this kind of stuff out to the leftards with their "democratic socialism" all the time - we currently already run at about 30% "democratic socialism" and just look at the amount of money wasted already.


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## frugal.rock (17 January 2022)

A local takeaway shop has just reopened recently after being closed for around a year or so due to "family reasons".
I happened to wander in there this arvo looking for a quick snack as I was peckish.
I checked the menu, now $12.50 for a burger with the lot. Up 20% from before.
20% seems to be a standard price rise that I have found across other takeaway food outlets also.
Getting unaffordable.


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## over9k (17 January 2022)

frugal.rock said:


> A local takeaway shop has just reopened recently after being closed for around a year or so due to "family reasons".
> I happened to wander in there this arvo looking for a quick snack as I was peckish.
> I checked the menu, now $12.50 for a burger with the lot. Up 20% from before.
> 20% seems to be a standard price rise that I have found across other takeaway food outlets also.
> Getting unaffordable.



Yeah, I saw $2/L fuel the other day too. It's definitely noticeable. 

And as I've pointed out, we aren't seeing a commensurate rise in wages. Pump those up and things would inflate even more.


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## divs4ever (17 January 2022)

from previous experience  , wages ( rises ) lag inflation 

 one reason is you need the CPI rises  to justify asking for the wage  increase , so that makes wages at least six months behind 

 and most  governments find it ' politically necessary ' to  to fiddle with the CPI ( allegedly to reduce public panic . and voter alienation )
 BUT if the masses have less disposable income .... what do they buy , and what do they resist buying ( at previous rates )


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## over9k (17 January 2022)

divs4ever said:


> from previous experience  , wages ( rises ) lag inflation
> 
> one reason is you need the CPI rises  to justify asking for the wage  increase , so that makes wages at least six months behind
> 
> ...



bingo


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## Smurf1976 (17 January 2022)

divs4ever said:


> from previous experience , wages ( rises ) lag inflation



Most of my working life has been under 3 year agreements which specifically preclude any consideration of being changed during that time meaning they're locked in.

There'd be a great many on those sort of arrangements in big business and government.

Within that structure as an individual you can negotiate classification but you can't change that classification xyz = $abc. The room to change that latter point is zero, it's set in stone down to the cent.


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## divs4ever (17 January 2022)

Smurf1976 said:


> Most of my working life has been under 3 year agreements which specifically preclude any consideration of being changed during that time meaning they're locked in.
> 
> There'd be a great many on those sort of arrangements in big business and government.
> 
> Within that structure as an individual you can negotiate classification but you can't change that classification xyz = $abc. The room to change that latter point is zero, it's set in stone down to the cent.



  i have usually worked outside that framework  ,  and when there has been a formal wage agreement that rarely worked to the employee's advantage either  ,

 the upside of that is  i frequently   found a 'side-hustle '  to solve MY problems  ( short-term or mid-term ) 

 i made fluid and flexible work for me


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## divs4ever (18 January 2022)

THE US IS A LEVERAGED BASKET CASE - PETER SCHIFF #5385



 DYOR 

of course little of this is news to those who understand real economies


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## ducati916 (18 January 2022)

JohnDe said:


> It looks like everyone has forgotten about *productivity*. Most people do, so don't feel bad
> 
> There is always going to be increases in some part of a businesses cost base, the business that can counteract increases with other measures such as 'productivity' will be the most successful. These are the companies that investors look for.
> 
> ...




Productivity:




Moving in the wrong direction.

jog on
duc


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## JohnDe (18 January 2022)

ducati916 said:


> Productivity:
> 
> View attachment 135992
> 
> ...



Better late than never, welcome to the party.

Of course it’s in the wrong direction, we have Covid, and before that we had poor policy from a few governments.

My point was only that all the recent posts had mentioned everything but productivity, which is one tool that can counteract inflation. Smart companies are and can improve productivity, find them and that’s a great investment.


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## JohnDe (18 January 2022)

This article is a few years old but still worthy of a read - 

_*PRODUCTIVITY AND INFLATION*

That inflation has costs is widely accepted. What is less clear is the path by which inflation generates these costs – there are many alternative theories. The interaction of inflation with the tax system, the reduction in the value of the price mechanism, the diversion of resources from productive activities to managing inflation, or even the cost of adjusting prices on menus have all been posited as costs of high inflation.1 However, quantifying these channels empirically is much harder than describing them theoretically. Regardless, whatever the channel of effect, they must all ultimately reduce output. And inflation’s negative effect on output is most likely to be reflected in lower productivity growth.2 Consequently, in considering the costs of inflation, the relationship between inflation and productivity is key.
This paper investigates this relationship without attempting to isolate the strength of any particular channel. Notwithstanding this, our results suggest something about the characteristics of the channel and we discuss these in some detail later in
the paper.

At the simplest level, broad historical correlations suggest a negative relationship between productivity and inflation (Table 1). Most OECD countries had low productivity growth and high inflation in the 1970s and, to a lesser extent, the 1980s. Productivity growth then generally increased through the 1990s at the same time as inflation generally fell....._



			https://www.rba.gov.au/publications/rdp/2003/pdf/rdp2003-10.pdf


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## mullokintyre (18 January 2022)

mullokintyre said:


> One of the Myriad of reasons why goods are slow/hard to come by could be just plain theft.
> Containers Busted Open
> 
> Mick



As a corrollary to this tweet comes the news that  Union Pacific is threatening to move out of shifting stuff from LA because of theft.



A top Union Pacific Railroad official threatened to leave Los Angeles over the District Attorney's progressive measures to lower criminal theft offenses amid a wave of criminal gangs looting rail cars. 

Adrian Guerrero, Union Pacific's director of public affairs, wrote a letter to LA County District Attorney George Gascón, denouncing the local government's relaxed criminal policies, or rather "well-intentioned social justice goals," as a catalyst for a wave of rail car thefts. 

"*We find ourselves coming back to the same results with the Los Angeles County criminal justice system. *Criminals are caught and arrested, turned over to local authorities for booking, arraigned before local courts, charges are reduced to a misdemeanor or petty offense, and the criminal is released after paying a nominal fine," wrote Guerrero.

He said most criminals robbing trains search for Amazon and UPS packages, are released back onto the streets within a day.
Its the unintended consequences that just get you every time.
Mick


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## over9k (18 January 2022)

Standard democrat state going to hell in a handbasket then, what else is new? 

Sea traffic will just get redirected as the costs of this crime continues to rise. Simple economics.


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## JohnDe (18 January 2022)

What affect on inflation will this cause - 



> _*January consumer confidence at 30-year low as Omicron spread smashes spending outlook*
> 
> Consumer confidence has slumped to its lowest level for the month of January in the past 30 years, as a surge in Omicron cases dashes spending intentions.
> 
> ...









						NoCookies | The Australian
					






					www.theaustralian.com.au


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## Smurf1976 (18 January 2022)

JohnDe said:


> _At the simplest level, broad historical correlations suggest a negative relationship between productivity and inflation (Table 1). Most OECD countries had low productivity growth and high inflation in the 1970s and, to a lesser extent, the 1980s. Productivity growth then generally increased through the 1990s at the same time as inflation generally fell....._



A question there is which leads which?

Surest way to get frontline workers unhappy is to take something away. Doesn't matter what it is, if they're losing something then they will be unhappy.

Failing to increase pay in line with CPI is taking something away in practice.

Unhappy workers are almost always less productive than happy ones. Lack of enthusiasm, time spent chatting among themselves about the situation, if the situation escalates then it's union meetings during which work ceases and worst case actual industrial action becomes the outcome. 

Note that I'm not advocating anyone goes on strike etc, just noting how these things can unfold.

At the moment everyone's too distracted by the pandemic but once that's in the past, other matters will come into focus and I'm expecting workers' pay demands to be among them.


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## Smurf1976 (18 January 2022)

Smurf1976 said:


> Unhappy workers are almost always less productive than happy ones.



Forgot to include staff turnover in that. Another productivity killer.


----------



## sptrawler (18 January 2022)

Smurf1976 said:


> Forgot to include staff turnover in that. Another productivity killer.



Which tends to drive wages growth, as employers try to hold staff, especially when the job requires training.
If the workers personal cost keep rising, they will try to push for a payrise, failing that they will look for higher paying work.
The last thing a worker wants to do is go backwards, that usually involves losing something they have worked to purchase, if prices keep going up it is a certainty wages will follow.
The last few years rising prices of certain things, have been offset by prices of other consumables falling, with the supply chain problems pushing up the wholesale prices and fuel costs pushing up the overheads I can't see a lid being kept on prices.


----------



## moXJO (18 January 2022)

JohnDe said:


> What affect on inflation will this cause -
> 
> 
> 
> ...



Rba will possibly hold off on a rate rise.


----------



## over9k (18 January 2022)

Meanwhile, brent crude closes in on $90 a barrel.


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## divs4ever (18 January 2022)

sptrawler said:


> Which tends to drive wages growth, as employers try to hold staff, especially when the job requires training.
> If the workers personal cost keep rising, they will try to push for a payrise, failing that they will look for higher paying work.
> The last thing a worker wants to do is go backwards, that usually involves losing something they have worked to purchase, if prices keep going up it is a certainty wages will follow.
> The last few years rising prices of certain things, have been offset by prices of other consumables falling, with the supply chain problems pushing up the wholesale prices and fuel costs pushing up the overheads I can't see a lid being kept on prices.



 now maybe i have worked for some dumb companies , pay rises for solid staff  seems to be rare 

 they just  churn staff  , the quality ones usually find a better position elsewhere  ,  so the productivity  falls when training the new employees 

 ( have been at some places , i don't even try to remember their name for the first two weeks  , just remember  how many noses need to leave the building  before i lock-up  )

 but sadly i never get to calculate the salaries  , so the good staff move on  ( as do i , in my own sweet time )

 yes prices up  ( because of supplier increases and costs ) but wages at the end of town i used to work  were always lagging ( as was productivity , because the best staff moved on , unless they were trapped because they were substance abusers  , and hardly anyone else would look past that )


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## mullokintyre (19 January 2022)

Was last night another turning point??
After the US holiday, a slew of data came out and most of it was not pretty.
Silver up a good chunk, gold virtually unchanged, 
USD flight to safety back on, AUD down, DJIA down another 450 points.
Both 2year and 10 year TSY rates  continuing their climb, the empire Fed Manufacturing survey  had its third biggest month on month fall  in history with a contraction at -7 versus the experts consensus forecast of +25.
An index of new orders dropped 32.1 points in January to -5, while the shipments gauge slumped 26.1 points to +1.
The average workweek and employment also showed a slower rate of expansion.
The price outlook also firmed, with indexes of future prices paid and received climbing the highest in data back to 2001.
Theres probably more, but  I reckon thats enough for today.
Mick


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## over9k (19 January 2022)

However:


----------



## JohnDe (19 January 2022)

A nice short point of view -


----------



## ducati916 (19 January 2022)

JohnDe said:


> Better late than never, welcome to the party.
> 
> Of course it’s in the wrong direction, we have Covid, and before that we had poor policy from a few governments.
> 
> My point was only that all the recent posts had mentioned everything but productivity, which is one tool that can counteract inflation. Smart companies are and can improve productivity, find them and that’s a great investment.




While I do not disagree, improved productivity, in the face of a pernicious and (probably) increasing inflation, is not an easy task in the majority of sectors. All of the factors of production (land, resources, labour and capital (technology)) are all trending in the wrong direction.

A sector where the productivity will increase due to loss of purchasing power will be the commodity sector. Many of these have already made pretty big moves.

jog on
duc


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## JohnDe (19 January 2022)

More fuel but what will burn, China's or the US's economy, world economies, inflation ?

Interesting times we live in, there is always opportunity. Anyone care to offer their thoughts on which industry's to keep an eye on? I'm not convinced that inflation is going to cause an issue just yet, but one just in case I am looking at industries that are not affected by it.





> When Chinese President Xi Jinping addressed the World Economic Forum this week he could not have realised that US bond holders were about to sell down and push up interest rates. In addition, he did not know that Microsoft was planning a takeover that would have long term implications for China and world technology.





> The US bond sell down raised yields on the US 10 year bond to a two year high and triggered a Wall Street fall that naturally hits Australian shares.
> 
> Xi not only urged the US not to lift official interest rates in that speech but suddenly a new China trading line emerged. If it is maintained Australia stands to benefit.
> 
> ...









						NoCookies | The Australian
					






					www.theaustralian.com.au


----------



## Smurf1976 (19 January 2022)

ducati916 said:


> While I do not disagree, improved productivity, in the face of a pernicious and (probably) increasing inflation, is not an easy task in the majority of sectors. All of the factors of production (land, resources, labour and capital (technology)) are all trending in the wrong direction.



Another issue there is where improving the productivity of one thing comes at the expense of lower productivity of something else.

The example I'm most familiar with being improving the productivity of energy use at the expense of having to invest more capital, sometimes a lot more, and in some cases also increasing labour costs. If energy's the only thing becoming more costly then the decision to use it more efficiently tends to stack up financially but if labour and especially capital is also becoming more costly then that isn't necessarily the case, the least bad option may well be to just pay the increasing energy cost.

No doubt there's many more examples like that, energy's just the one I'm personally most familiar with.


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## divs4ever (19 January 2022)

from my experience    in an inflation climate ( but then nothing i have studied has paralleled this one )

 the best 'bang for the  buck ' fighter of inflation  is reduced regulation ( now i mean  simple and stream-lined , but that never seems to be the final outcome )

 i very much doubt this strategy will be used widely  ,  but i will throw it out there because i am an optimist


----------



## over9k (19 January 2022)

JohnDe said:


> More fuel but what will burn, China's or the US's economy, world economies, inflation ?
> 
> Interesting times we live in, there is always opportunity. Anyone care to offer their thoughts on which industry's to keep an eye on? I'm not convinced that inflation is going to cause an issue just yet, but one just in case I am looking at industries that are not affected by it.
> 
> ...



Anything which provides that which is inflating  

(energy)


----------



## ducati916 (20 January 2022)

Smurf1976 said:


> Another issue there is where improving the productivity of one thing comes at the expense of lower productivity of something else.
> 
> The example I'm most familiar with being improving the productivity of energy use at the expense of having to invest more capital, sometimes a lot more, and in some cases also increasing labour costs. If energy's the only thing becoming more costly then the decision to use it more efficiently tends to stack up financially but if labour and especially capital is also becoming more costly then that isn't necessarily the case, the least bad option may well be to just pay the increasing energy cost.
> 
> No doubt there's many more examples like that, energy's just the one I'm personally most familiar with.




As Europe is finding out, the Greenies massively underestimated the energy green energy could produce relative to the baseload demand. Energy being roughly equivalent to life, cannot be reduced without significant losses in quality of life for all. The lower on the totem pole that you are, the more egregious will be your losses.

Productivity in the West is being suppressed due to:





China has pretty much used up its 'low wage' advantage re. productivity and have zombie issues of their own.

Africa is nowhere near replacing China as a 'low wage' producer, thus no productivity gains remain to labour.

Capital investment across all resources has been massively under CAPEX for probably a decade, hence the supply shortages that are engulfing the supply chains currently. With the politics associated around permits, regulations, low prices, etc, no new supply will be anytime soon.

The capital allocation system, due to CBs and governments, is so badly broken due to the suppression of the 'natural rate of interest', that getting capital to where it is actually needed is not and has not been happening since 2008.

Productivity, as a suppressor of inflation, is simply a non-starter. The 'answer' lies elsewhere.



jog on
duc


----------



## JohnDe (20 January 2022)

ducati916 said:


> As Europe is finding out, the Greenies massively underestimated the energy green energy could produce relative to the baseload demand. Energy being roughly equivalent to life, cannot be reduced without significant losses in quality of life for all. The lower on the totem pole that you are, the more egregious will be your losses.
> 
> Productivity in the West is being suppressed due to:
> 
> ...




Somewhat true. Yes cheap labour is not the way to productivity in the 21st century, yes 'zombie' companies are an issue. However, there are multiple means in achieving productivity.

Tesla is proof, they found an obvious way to design and manufacture vehicles at a fraction of the cost and time that all the other major vehicle manufacturers have not been able to do. Read the book *Power Play: Tesla, Elon Musk, and the Bet of the Century*

Keep an eye out for investments in artificial intelligence, robotics, energy storage, DNA sequencing, and blockchain technology. 



> Technology will and is bringing new measures of productivity.
> 
> Manufacturing is in the midst of a profound period of change, characterised by dramatic gains in productivity powered by technology. It’s seen small and medium sized manufacturers gain access to innovations previously available only to their heavily capitalised enterprise competitors, levelling the playing field and bringing new and better products to consumers.












						The Technologies that Improve Manufacturing Productivity
					

We look at affordable new technologies lifting productivity for manufacturers, from robotics and cloud apps, to ERPs and networked PLCs – and see how they’re used




					www.unleashedsoftware.com


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## JohnDe (20 January 2022)

_"We are living in a time of exciting technological innovations. Digital technologies are driving transformative change. Economic paradigms are shifting. The new technologies are reshaping product and factor markets and profoundly altering business and work. The latest advances in artificial intelligence and related innovations are expanding the frontiers of the digital revolution. Digital transformation is accelerating in the wake of the COVID-19 pandemic. The future is arriving faster than expected.

The new technologies hold great promise. They create new avenues and opportunities for a more prosperous future. But they also pose new challenges. While digital technologies have dazzled with the brilliance and prowess of their applications, they have so far not fully delivered the expected dividend in higher productivity growth. Indeed, aggregate productivity growth has slowed in the past couple of decades in many economies. Consequently, economic growth has trended lower.

Firms at the technological frontier have broken away from the rest, acquiring dominance in increasingly concentrated markets and capturing the lion’s share of the returns from the new technologies. While productivity growth in these firms has been strong, it has stagnated or slowed in other firms, depressing aggregate productivity growth. Increasing automation of low- to middle-skill tasks has shifted labor demand toward higher-level skills, hurting wages and jobs at the lower end of the skill spectrum. With the new technologies favoring capital, winner-take-all business outcomes, and higher-level skills, the distribution of both capital and labor income has tended to become more unequal, and income has been shifting from labor to capital.

One important reason for these outcomes is that policies and institutions have been slow to adjust to the unfolding transformations. To realize the promise of today’s smart machines, policies need to be smarter too. They must be more responsive to change to fully capture potential gains in productivity and economic growth and address rising inequality as technological disruptions create winners and losers..........."_









						How digital transformation is driving economic change
					

Zia Qureshi introduces a new book that examines the implications of the unfolding digital metamorphosis for economies and public policy agendas.




					www.brookings.edu


----------



## mullokintyre (20 January 2022)

JohnDe said:


> Tesla is proof, they found an obvious way to design and manufacture vehicles at a fraction of the cost and time that all the other major vehicle manufacturers have not been able to do. Read the book *Power Play: Tesla, Elon Musk, and the Bet of the Century*



I know you are a tesla owner, and thus may be a little biased, but i fail to see how you can justify that statement about cost. 
I looked up some US car prices, so they are in USD.
The base price for Tesla Model 3 is given as $44,990, with the "fully loaded " at $58,490
A Chevvy bolt, which is also electric, comes in at $32,495
A regular gas powered Equinox comes in at $26,995.
Geez, even a base model Camaro is $26,195.
Even the time aspect is a tad questionable.
We are still waiting for the Cybertruck, the EV semi big truck.
Ford and Rivian have both beaten them to it in terms of production and delivery, and there is a good chance that GMC will as well.
Tesla may have done some great things from a technology perspective, but productivity improvements in building cars is not one of them.
Mick


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## sptrawler (20 January 2022)

mullokintyre said:


> I know you are a tesla owner, and thus may be a little biased, but i fail to see how you can justify that statement about cost.
> I looked up some US car prices, so they are in USD.
> The base price for Tesla Model 3 is given as $44,990, with the "fully loaded " at $58,490
> A Chevvy bolt, which is also electric, comes in at $32,495
> ...



Has Tesla car division turned a profit from selling cars yet? If it hasn't it appears it soon will. My guess is Tesla's dominance in the EV space will fall as other manufacturers gear up, the question is can Tesla stay ahead of the pack.
With regard inflation, legacy car makers are pushing up the price of their ICE vehicles obviously to improve the profit margin to subsidies EV development, but the side effect is it is another source of inflation as people still need cars and there isn't the ability to make enough EV's to fill demand.
Tesla’s lofty stock performance — up 743% in 2020 — makes it one of the most valuable US companies in the world. Yet the 500,000 cars it sold in 2020 were a sliver of more than 70 million vehicles estimated to have been sold worldwide.









						Tesla’s dirty little secret: Its net profit doesn’t come from selling cars
					

Eleven states require automakers sell a certain percentage of zero-emissions vehicles by 2025. If they can’t, the automakers have to buy regulatory credits from another automaker that meets t…




					www.mercurynews.com
				



From the article:
_Tesla posted its first full year of net income in 2020 — but not because of sales to its customers.

Eleven states require automakers sell a certain percentage of zero-emissions vehicles by 2025. If they can’t, the automakers have to buy regulatory credits from another automaker that meets those requirements — such as Tesla, which exclusively sells electric cars.

It’s a lucrative business for Tesla — bringing in $3.3 billion over the course of the last five years, nearly half of that in 2020 alone. The $1.6 billion in regulatory credits it received last year far outweighed Tesla’s net income of $721 million — meaning Tesla would have otherwise posted a net loss in 2020.

“These guys are losing money selling cars. They’re making money selling credits. And the credits are going away,” said Gordon Johnson of GLJ Research and one of the biggest bears on Tesla shares.

The company reported 2020 adjusted net income, excluding items such as $1.7 billion stock-based compensation, of $2.5 billion_.
_Its automotive gross profit, which compares total revenue from its car business to expenses directly associated with the building the cars, was $5.4 billion, even excluding the regulatory credits sales revenue. And its free cash flow of $2.8 billion was up 158% from a year earlier, a dramatic turnaround from 2018 when Tesla was burning through cash and in __danger of running out of money_.


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## JohnDe (20 January 2022)

mullokintyre said:


> I know you are a tesla owner, and thus may be a little biased, but i fail to see how you can justify that statement about cost.
> I looked up some US car prices, so they are in USD.
> The base price for Tesla Model 3 is given as $44,990, with the "fully loaded " at $58,490
> A Chevvy bolt, which is also electric, comes in at $32,495
> ...




That's ok Mick, simple mistake made by a few investors while they research.

My quote "found an obvious way to design and manufacture vehicles at a fraction of the cost and time" relates to the 'technical design' and the 'manufacturing of components and assembly'.

The usual practice in designing a new vehicle model is to have a team of 100 engineers, Tesla reduced the bureaucracy and created an engineering team of about 45. They then designed and created factory with new ideas in assembly manufacturing to reduce the number of processes required, also new materials to stiffen core components, and so on.

Read up, you'll find all the information.

Just to be clear - Tesla implemented technology to improve manufacturing and at the same time increase productivity. Tesla was the first out of all the current vehicle manufacturers and Tesla is now building cars faster and at a lower cost than their competitors.

PS as for pricing, well it's not as simple as comparing apples and oranges, a comparable EV to the Tesla M3 is the BMW, which requires a lot of options which increases the base price -


----------



## JohnDe (20 January 2022)




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## mullokintyre (20 January 2022)

JohnDe said:


> That's ok Mick, simple mistake made by a few investors while they research.
> 
> My quote "found an obvious way to design and manufacture vehicles at a fraction of the cost and time" relates to the 'technical design' and the 'manufacturing of components and assembly'.
> 
> ...



You suggest Tesla is now building cars faster and at a lower cost to their competitors without actually providing  any proof of that statement.  I will stick to  some data.
If your statement above is true,  and looking at the prices charged for the Tesla vehicles versus other vehicles,  one would assume that Tesla must be making an absolute  killing on their sales  margins. 
As sptrawler pointed out, revenue does not back up that  sales  margin call.
So what do we have left to support your statement?
Mick


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## JohnDe (20 January 2022)

Just to be clear, I am not saying that we don't have an issue with inflation. What I am sharing is that there are many ways that inflation can be distorted and controlled. One is technology. 

While the news cycle is doom and gloom, inflation and fear, there are people and organisations quietly achieving great things. Who here purchased shares in the beginning of companies such as PayPal, Google, Apple, Amazon, Tesla, Afterpay? These companies where ignored by most but they created something that people wanted which contributed to productivity. 

There is more to investing than just finding a few mining companies. Inflation will affect many investments but some will thrive. an investors job is to find them.


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## JohnDe (20 January 2022)

mullokintyre said:


> You suggest Tesla is now building cars faster and at a lower cost to their competitors without actually providing  any proof of that statement.  I will stick to  some data.
> 
> Mick




Dear Mick, I have given you proof, it just that you do not want to see it.

I gave you the name of the book which has documented all the facts. I gave you a video with a well known US engineer discussing some of the achievements of Tesla's technology.

What proof have you given to your statements?


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## JohnDe (20 January 2022)

JohnDe said:


> Inflation is not playing ball.
> 
> Covid has caused a massive disruption with the transport of goods, cargo ships have been stuck out at sea and unable to unload, this has caused some shortages of goods and prices to rise. But those ships are starting to unload, and during the shortage there was some panic that caused larger orders which will flow through in the next cycle.
> 
> Have a listen to Cathie Wood from the 19:14 minute mark  -





For Mick, more proof.


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## mullokintyre (20 January 2022)

JohnDe said:


> Dear Mick, I have given you proof, it just that you do not want to see it.
> 
> I gave you the name of the book which has documented all the facts. I gave you a video with a well known US engineer discussing some of the achievements of Tesla's technology.
> 
> What proof have you given to your statements?



I never questioned the technology, I questioned your ability to understand economics.
You said that Tesla builds cars cheaper and faster than  anyone else.
I quoted car prices from the  US that show that is a questionable statement at the very least.
Mick


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## Dona Ferentes (20 January 2022)

May as well throw something minor into the mix.  *Bond Markets; *Bond Yields. Big dump on market valuations, I'd reckon, especially for the 10 Years

Early December 2021

  2 year yield: US 0.69% ; Australia 0.66% 
  5 year yield: US 1.25% ; Australia 1.34%       
 10 year yield: US 1.48% ; Australia 1.64% ; Germany -0.38%    

and a little over 6 weeks later

 2 year yield: US 1.03% ; Australia 0.84%
 5 year yield: US 1.62% ; Australia 1.63%
10 year yield: US 1.83% ; Australia 1.99% ; Germany -0.02%


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## JohnDe (20 January 2022)

mullokintyre said:


> I never questioned the technology, I questioned your ability to understand economics.
> You said that Tesla builds cars cheaper and faster than  anyone else.
> I quoted car prices from the  US that show that is a questionable statement at the very least.
> Mick




As I have repeatedly mentioned to your comments in relation to me - read the facts. And then get back to me.

However, to add to the discussion - *Economics and technology is now fully connected* in almost every aspect. And that is why looking for companies that are using technology to improve and create can help an investors portfolio.

As for building a car cheaper than your competitors and then setting a price; what are you saying?

Your statement makes no sense, in an economic manner - "_I quoted car prices from the  US that show that is a questionable statement at the very least_."

The GM's and Mercedes of the world have the power of size on their side, they can get the price of a bolt down by ordering triple the amount compared to their smaller competitors. Add that to every part used and the savings is considerable.
Where Tesla has managed to get pricing down to compete is by reducing the time it takes to design and then build. This has allowed Tesla to compete against every major vehicle manufacturer and stay viable, something that no one has been able to do since Chrysler -  June 6, 1925


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## JohnDe (20 January 2022)

Mick, which manufacturer is adding to the price inflation of their product -


----------



## Dona Ferentes (20 January 2022)

Dona Ferentes said:


> May as well ..



Ah yes; BOND MARKETS. an excerpt from the Fed's _*Beige Book *_published on 12 January.



> _“Tightness in labor markets drove robust wage growth nationwide, with some Districts highlighting additional growth in labor costs associated with non-wage benefits.  While many contacts noted that wage gains among low-skill workers were particularly strong, compensation growth remained well above historical averages across industries, across worker demographics, and across geographies.” _



You can read the full report:   https://www.federalreserve.gov/monetarypolicy/beigebook202201.htm


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## mullokintyre (20 January 2022)

JohnDe said:


> Mick, which manufacturer is adding to the inflation of their product -
> 
> View attachment 136168



Nice chart, but nothing to do with discussion.

Mick


----------



## JohnDe (20 January 2022)

mullokintyre said:


> Nice chart, but nothing to do with discussion.
> 
> Mick




_"Inflation is a measure of the rate of rising prices of goods and services in an economy."_

Advertising is an added expense which must be recovered by charging the consumer a higher retail price. Higher retail prices means that a workers wage buys less, wages need to increase to keep up. 









						What Causes Inflation?
					

In this article, we examine the fundamental factors behind inflation, different types of inflation, and who benefits from it.




					www.investopedia.com


----------



## mullokintyre (20 January 2022)

As seems to be a consistent theme recently,  economists were surprised at the Jobless rate that came out today at 4.2%.
From Todays Australian


> The unemployment rate has smashed expectations, falling in December to 4.2 per cent, the lowest since the GFC in 2008.
> The number of employed increased by 64,800, a monthly change of 0.5 per cent. While the underemployment rate fell 1.9 per cent to 6.6 per cent. The participation rate remained constant at 66.1 per cent.
> The positive figures continued the tightening of the Australian labour market, after the rate fell to 4.6 per cent in November. It has raised expectations that the Reserve Bank of Australia will increase the cash rate earlier than anticipated.
> 
> ...



The next survey will be interesting when  the  full affects of the OMICRON outbreak are seen.
Mind you, according to  Trading Economics there were a smidgin under 400,000 job vacancies at the start of January.
So, one might see a continuing tightening of the labour market, which will surely put pressure on the wages expectations.
The unions are already starting to flex their muscles partly to get pay rises for their members, and partly to make the Feds look even more inept as we head to the elction.
Mick


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## JohnDe (20 January 2022)

mullokintyre said:


> You suggest Tesla is now building cars faster and at a lower cost to their competitors without actually providing  any proof of that statement.  I will stick to  some data.
> If your statement above is true,  and looking at the prices charged for the Tesla vehicles versus other vehicles,  one would assume that Tesla must be making an absolute  killing on their sales  margins.
> As *sptrawler* pointed out, revenue does not back up that  sales  margin call.
> So what do we have left to support your statement?
> Mick




Tesla did make a profit, and not a bad one for a company just about to open two more factories.

And as you mentioned sptrawler, he did say "_With regard inflation, legacy car makers are pushing up the price of their ICE vehicles obviously to improve the profit margin to subsidies EV_". 

ICE vehicle manufacturers are not making a lot of profit on their EVs, some are having to subsidies their EV to make prices competitive.

*Inefficiency*, another contribution to *inflation*.

_"Electric car maker Tesla has brushed off supply chain issues and the global microchip shortage to report record quarterly sales and profits.

Revenues rose to $13.76bn in the third quarter of the year, up from $8.77bn 12 months earlier.

The company, led by billionaire entrepreneur Elon Musk, posted a net profit of $1.6bn and sold 241,391 cars."_









						Elon Musk's Tesla reports record sales and profits
					

The electric car maker recorded its highest quarterly profit of $1.6bn and sold more than 240,000 cars.



					www.bbc.com


----------



## sptrawler (20 January 2022)

For those who think inflation isn't an issue, how long the RBA keeps kidding people is the real issue IMO.








						Fears for more industry collapses in 2022 as big builders go bust
					

The Master Builders Associations warn more firms could follow BA Murphy, Privium and Tasmanian Constructions as rising costs take a heavy toll.




					www.abc.net.au
				



From the article:
More construction companies will fold this year as lock-in contracts leave builders unable to pass on the rising cost of labour and supplies, the Master Builders Association warns.
Two Queensland firms, Privium and BA Murphy, went into liquidation just before Christmas, with customers and subcontractors waiting to find out how much, if anything, they will get from the wash up
Liquidators FTI Consulting told the ABC that Sunshine Coast-based BA Murphy owed almost $11 million to about 550 creditors.

The company's 30 employees were owed more than $400,000.

BA Murphy also had 50 unfinished building projects across Australia, including 21 in Queensland, 18 in Victoria and about 11 in New South Wales.

Meanwhile, the final amount owed by Privium is likely to be more.
The company has 831 unfinished contracts around Australia and records show a $28m dollar loss in the 2020 financial year.

Sunshine Coast regional manager for Master Builders Queensland, Nicola Scott described the collapse of BA Murphy as "absolutely devastating".

She said the prices of supplies, from timber and steel to plumbing and tapware, had risen substantially over the past 12 months amid increased home building demand globally.

"I think it would be a miracle if somebody wasn't affected by that, because they're continually having to absorb the cost," Ms Scott said.

Lawyer Steven Burton deals with builders trying to adjust or get out of contracts.

As a partner in the Construction and Infrastructure Group at Holding Redlich, he said he was seeing a growing number of builders struggling with prices of supplies and labour.


----------



## Smurf1976 (21 January 2022)

Another thought on inflation is what for want of a better term I'll call automatic compounding.

Examples:

Councils often use CPI as a basis for rate setting, on the logic that so long as they don't increase rates by more than CPI then they haven't increased them at all in real terms.

Wages in large organisations, especially government, tend to be negotiated for the entire workforce at one and either CPI is a reference point in those negotiations or the outcome includes CPI as a reference for the calculation of increases beyond the first year of the agreement. Eg x% now plus CPI after 12 months and again after 24 months.

Regulated monopolies, for example gas and electricity networks, very commonly use CPI as a reference in the calculation of permitted rate increases.

Things like bus fares, parking fees, fixed rate government charges (eg car registration) tend not to be directly linked to CPI but it does form the basis when a periodic review is done. Whoever's in charge works on the basis that they can hike the price by CPI and, since that's not a "real" increase, they can easily defend doing so.

I've just become aware that in some countries consumer mobile phone and similar contracts commonly include a clause for CPI indexation. So you've signed up to a (say) $50 per month plan but that's automatically annually incremented by CPI and as a customer you're deemed to have agreed to the new rate.

And many more.

The common theme and my underlying point being a positive feedback loop. As CPI increases that of itself automatically triggers, or at least opens the door to, further price rises. The higher CPI goes, the higher will be the increase in those things for which it forms the basis of determining.

I suspect that sort of arrangement was far less common last time inflation was a problem since the basis of price setting was quite different. Years ago manufacturers commonly "recommended" what price shops should sell products at and things like utilities were based on actual costs with or without a fixed profit ratio. CPI wasn't a direct reference in the setting of prices, the statistic itself didn't directly feed in to future prices whereas now it does. 

Even the excise tax on petrol automatically goes up with CPI whereas that used to be a purely political decision to change it. The higher CPI goes, the higher petrol goes and that pushes the CPI up. Feedback loop.


----------



## divs4ever (21 January 2022)

Smurf1976 said:


> Another thought on inflation is what for want of a better term I'll call automatic compounding.
> 
> Examples:
> 
> ...



 you forgot the 'extra sting ' ... plus GST 

 interesting times coming


----------



## ducati916 (21 January 2022)

JohnDe said:


> _"Inflation is a measure of the rate of rising prices of goods and services in an economy."_
> 
> Advertising is an added expense which must be recovered by charging the consumer a higher retail price. Higher retail prices means that a workers wage buys less, wages need to increase to keep up.
> 
> ...




This definition is simply incorrect. Rising prices (CPI) are the symptom, not the disease.

Excessive currency and credit creation are the cause of the disease (inflation). You can have credit creation for productive assets, whereby the asset can pay for itself + interest, which is the type of inflation which productivity will ameliorate.

But when you have credit creation for consumption...then you get the inflation that drives currency devaluation and debasement. This drives PPI inflationary pressures which bleed into CPI pressures. If continued unabated, this can and will lead into a collapse of the fiat currency, which is a hyper-inflation.

The COVID hand-outs were the classic version of currency/credit creation for consumption worldwide.

Inflation is simply a loss of purchasing power of the currency due to debasement of the currency via credit creation.

jog on
duc


----------



## ducati916 (21 January 2022)

JohnDe said:


> Tesla did make a profit, and not a bad one for a company just about to open two more factories.
> 
> And as you mentioned sptrawler, he did say "_With regard inflation, legacy car makers are pushing up the price of their ICE vehicles obviously to improve the profit margin to subsidies EV_".
> 
> ...




Looking at some of the competition.

If you were going to buy today:

TSLA, F, GM, TM.







The best of the bunch is TM from an investment perspective.

Of course if you are buying simply on marque preference, well everybody has their own preference. On the numbers, whatever technical brilliance TSLA may/may not have, TM is right there with them, based on the numbers.

Of course if you bought TSLA stock back in 2015 or earlier and held it till today:




Of course, you are laughing all the way to the bank.

But to the argument of 'productivity', TSLA does not seem to be that far ahead of the industry.

jog on
duc


----------



## JohnDe (21 January 2022)

ducati916 said:


> Of course if you bought TSLA stock back in 2015 or earlier and held it till today:
> 
> 
> Of course, you are laughing all the way to the bank.
> ...




Not 2015 but still laughing.

_“But to the argument of 'productivity', TSLA does not seem to be that far ahead of the industry.”_  Anything is possible, the majors have had a few years to catch up, though taking the chip shortage during 2021 into account your conclusion is lacking evidence.  Show me your reasoning and and figures.


----------



## JohnDe (21 January 2022)

ducati916 said:


> This definition is simply incorrect. Rising prices (CPI) are the symptom, not the disease.
> 
> Excessive currency and credit creation are the cause of the disease (inflation). You can have credit creation for productive assets, whereby the asset can pay for itself + interest, which is the type of inflation which productivity will ameliorate.
> 
> ...




"_This definition is simply incorrect. Rising prices (CPI) are the symptom, not the disease._" I am not sure what you're saying, it could be that I am a bit foggy being a Friday and I've had a very busy week, or you are the foggy one  

It has been a long time since my High School Economic Study's, I remember the definition in the same way that my first link describes it and also as the RBA puts it -

"*How is Inflation Measured?*
Inflation is an increase in the level of prices of the goods and services that households buy. It is measured as the rate of change of those prices. Typically, prices rise over time, but prices can also fall (a situation called deflation).

The most well-known indicator of inflation is the Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households...."









						Inflation and its Measurement | Explainer | Education
					

This series provides short, concise explanations for various economics topics.




					www.rba.gov.au


----------



## ducati916 (21 January 2022)

JohnDe said:


> Not 2015 but still laughing.
> 
> _“But to the argument of 'productivity', TSLA does not seem to be that far ahead of the industry.”_  Anything is possible, the majors have had a few years to catch up, though taking the chip shortage during 2021 into account your conclusion is lacking evidence.  Show me your reasoning and and figures.





The numbers are already provided, but here they are again:





So in the same order moving L to R: TSLA, F, GM, TM:

Return on investment (ROI) has TSLA slightly ahead at 5%, which is still a real negative return if using CPI inflation at 7%. But of course the more accurate figure is the PPI number which for 2021 was 9.7%. Which provides a return of (- 4.7%). The reason that we use the PPI is because TSLA is a manufacturer sourcing raw materials and selling to consumers, the CPI number.

The PPI is knifing higher, which is why CPI numbers are driving higher: producers are trying to pass their cost structure forward to the end consumer.

So TSLA is the best of a bad bunch (industry) at least as far as these examples demonstrate. Possibly Volkswagon might have better numbers.

So as regards 'productivity' TSLA does not outrun inflation. Not even close.

jog on
duc


----------



## ducati916 (21 January 2022)

JohnDe said:


> "_This definition is simply incorrect. Rising prices (CPI) are the symptom, not the disease._" I am not sure what you're saying, it could be that I am a bit foggy being a Friday and I've had a very busy week, or you are the foggy one
> 
> It has been a long time since my High School Economic Study's, I remember the definition in the same way that my first link describes it and also as the RBA puts it -
> 
> ...





Your memory may well be reliable. Your High School however was deficient in its understanding.

CPI prices measure inflation much the same way as a thermomemeter measures your temperature. It does not however disclose the cause of your fever.

jog on
duc


----------



## JohnDe (21 January 2022)

ducati916 said:


> Your memory may well be reliable. Your High School however was deficient in its understanding.
> 
> CPI prices measure inflation much the same way as a thermomemeter measures your temperature. It does not however disclose the cause of your fever.
> 
> ...




Sorry I still am not understanding your analogy. 

Are you saying that the RBA is incorrect?

PS.  I did no mention CPI, you have.



> *How is Inflation Measured?*
> *Inflation is an increase in the level of prices of the goods and services that households buy.* It is measured as the rate of change of those prices. Typically, prices rise over time, but prices can also fall (a situation called deflation).
> 
> The most well-known indicator of inflation is the Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households.












						Inflation and its Measurement | Explainer | Education
					

This series provides short, concise explanations for various economics topics.




					www.rba.gov.au


----------



## JohnDe (21 January 2022)

ducati916 said:


> The numbers are already provided, but here they are again:
> 
> View attachment 136212
> View attachment 136213
> ...




Sorry but they are just numbers with no reference. Anyone worth half their salt would give some sort of proper information with either 

company names linked to the figures, with a source reference or
a link to the information so as it can be confirmed.
What you have supplied is just a pictures with numerical figures with no dates, no references and your description that we are supposed to take for granted.

I have seen the figures for the automotive industry ad it does not look good. They are only just starting to ramp up production due to the chip shortage, something that Tesla was able to work around. Tesla vehicle production was at full capacity, they sold everything that they build. No other manufacturer could claim that, many had to shut down lines while they waited on parts.


----------



## ducati916 (21 January 2022)

JohnDe said:


> Sorry I still am not understanding your analogy.
> 
> Are you saying that the RBA is incorrect?
> 
> ...




Yes, that is exactly what I am saying.

jog on
duc


----------



## ducati916 (21 January 2022)

JohnDe said:


> Sorry but they are just numbers with no reference. Anyone worth half their salt would give some sort of proper information with either
> 
> company names linked to the figures, with a source reference or
> a link to the information so as it can be confirmed.
> ...





Fine: https://finviz.com/quote.ashx?t=TSLA. For the rest just type in: F, GM, TM.

jog on
duc


----------



## MovingAverage (21 January 2022)

Smurf1976 said:


> Average annual wholesale spot prices (calendar years):
> 
> Queensland:
> 2019 = $86.30
> ...




Any insight into what gives in QLD...most states trending downwards or flat but QLD is bucking the national trend and climbing.


----------



## JohnDe (21 January 2022)

ducati916 said:


> Yes, that is exactly what I am saying.
> 
> jog on
> duc




_"CPI definition - the RBA is incorrect"_

Big call. 

Shame all those past and present RBA people have wasted their education


----------



## JohnDe (21 January 2022)

ducati916 said:


> Fine: https://finviz.com/quote.ashx?t=TSLA. For the rest just type in: F, GM, TM.
> 
> jog on
> duc




None of that shows that the other manufacturers are producing vehicles at a more efficient rate than Tesla, and that was/is my original theme.

Your link does go further by giving links to related news proving that the manufacturers had issues producing vehicles, thus not able to sell. And as I mentioned before, Tesla increased its production and sold everything that they produced. Have a look at the last quarter figures.

*Produce less = sell less + factory idle time + staff idle time = poor efficiency = poor productivity*

_TOKYO (Reuters) - Toyota Motor Corp is *slowing production at as many as 11 plants in Japan* because of rising COVID-19 infections among its workers and those at parts suppliers, it said on Thursday.

That disruption, which comes amid a shortage of semiconductors that is already forcing it to *curb output, could cut production plans this month by about 47,000 vehicles*, a Toyota spokesperson said.

Toyota on Tuesday said it expects to *fall short of an annual target to build 9 million vehicles* because it did not have enough chips. The company's business year ends on March 31._





__





						TM Toyota Motor Corporation Stock Quote
					

Stock screener for investors and traders, financial visualizations.




					finviz.com


----------



## ducati916 (21 January 2022)

JohnDe said:


> None of that shows that the other manufacturers are producing vehicles at a more efficient rate than Tesla, and that was/is my original theme.
> 
> Your link does go further by giving links to related news proving that the manufacturers had issues producing vehicles, thus not able to sell. And as I mentioned before, Tesla increased its production and sold everything that they produced. Have a look at the last quarter figures.
> 
> ...



http://


JohnDe said:


> None of that shows that the other manufacturers are producing vehicles at a more efficient rate than Tesla, and that was/is my original theme.
> 
> Your link does go further by giving links to related news proving that the manufacturers had issues producing vehicles, thus not able to sell. And as I mentioned before, Tesla increased its production and sold everything that they produced. Have a look at the last quarter figures.
> 
> ...









The issue was whether 'productivity' could ameliorate the effects of inflation.

The numbers clearly indicate that TSLA currently cannot.



jog on
duc


----------



## JohnDe (21 January 2022)

ducati916 said:


> http://
> 
> View attachment 136220
> View attachment 136221
> ...




Which numbers?

the number of vehicles build at or near factory capacity?
the manufacturing cost per vehicle compared to competition?
the number of idle staff per shift per month?
the number of days that production is stopped or dialed down?
the number of vehicles sitting in storage waiting for semiconductors?
The above are all issues that the other manufacturers are suffering. those issues increase the cost of each vehicle, which they may or may not pass on which causes other issues.

Regardless of the inflation rate, Tesla will be able to maintain a better control over pricing of its product compared to the competition. Which means that inflation will not be as big of an issue to Tesla.

My point that you quote still stands, inflation can be reduced by improving productivity and there there are companies that will continue to profit when others suffer through high inflation (I did use incorrect wording in my rush due to work commitments, but basically the same) -

_Somewhat true ducati916. Yes cheap labour is not the way to productivity in the 21st century, yes 'zombie' companies are an issue. However, there are multiple means in achieving productivity.

Tesla is proof, they found an obvious way to design and manufacture vehicles at a *reduced* cost and time that all the other major vehicle manufacturers have not been able to do. Read the book Power Play: Tesla, Elon Musk, and the Bet of the Century

Keep an eye out for investments in artificial intelligence, robotics, energy storage, DNA sequencing, and blockchain technology._


----------



## sptrawler (21 January 2022)

This is an article on how CPI and inflation is calculated, it isn't a one line thing and the basket of goods changes also.








						Inflation and its Measurement | Explainer | Education
					

This series provides short, concise explanations for various economics topics.




					www.rba.gov.au
				




So if for example the RBA feels fuel or electricity prices are a spike and not a permanent trend, they wont be counted in the CPI calculation from what I understand.


----------



## divs4ever (21 January 2022)

JohnDe said:


> _"CPI definition - the RBA is incorrect"_
> 
> Big call.
> 
> Shame all those past and present RBA people have wasted their education



 i don't know about their education , but they sure have wasted their breath on me .. i haven't believed them for decades


----------



## JohnDe (21 January 2022)

sptrawler said:


> This is an article on how CPI and inflation is calculated, it isn't a one line thing and the basket of goods changes also.
> 
> 
> 
> ...




I posted the same link on the previous page and ducati916 told me that it is wrong.

_Are you saying that the RBA is incorrect?_​​_Yes, that is exactly what I am saying._​


----------



## ducati916 (21 January 2022)

JohnDe said:


> Which numbers?
> 
> the number of vehicles build at or near factory capacity?
> the manufacturing cost per vehicle compared to competition?
> ...






jog on
duc


----------



## sptrawler (21 January 2022)

JohnDe said:


> I posted the same link on the previous page and ducati916 told me that it is wrong.
> 
> _Are you saying that the RBA is incorrect?_​​_Yes, that is exactly what I am saying._​



I'm sure you guys will come to consensus.


----------



## JohnDe (21 January 2022)

ducati916 said:


> View attachment 136225
> 
> 
> jog on
> duc




OK, so let me get this right - you have finally agreed that Tesla productivity is better than the competition. Wow that was long winded.

*"TSLA is the best of a bad bunch (industry)" ducati916*

And for the record (again) I did not mention anything about a company that can "outrun inflation", my point has always been that the companies that can improve productivity over its competitors should be able ride through a high inflation economy, and what will help the company is new technology. Thus my examples of which technology to look at and one company and a company using new ways, TSLA, which has ridden through the Covid-19 induced shortages that have caused all its competitors to slow production and reduce operation hours.


----------



## JohnDe (21 January 2022)

divs4ever said:


> i don't know about their education , but they sure have wasted their breath on me .. i haven't believed them for decades




No one is perfect, just like no institution is. However, the RBA has helped keep Australia out of recession for the longest period in recorded history, when other countries went into recession. We've had some luck on the way, but luck doesn't come without hard work. And nothing good lasts forever.


----------



## qldfrog (21 January 2022)

sptrawler said:


> I'm sure you guys will come to consensus.



For what it is worth:
Avocado at corner fruit shop were $4 a kg up to 6 months ago,lately $5 and today $7.95
We can say seasonal variation, but with these avocadoes, you get them for 6m+ a year, plus in a cold room seasonal variation are minimal.
And we produce tons of avocadoes locally so not a supply issue.
Add tomatoes at $7 a kg, meat price up the sky...when will RBA release the next meaningfull figures..?


----------



## againsthegrain (21 January 2022)

some interesting claims here:









						Westpac predicts six interest rate rises by March 2024
					

Australian borrowers could see their monthly repayments rise by about $500 over the next two years, with the central bank tipped to begin jacking up interest rates as early as August.




					www.news.com.au
				





won't believe it until I see it, but I like it



> Westpac is now predicting six interest rate rises between now and early 2024 – in August 2022, October 2022, March 2023, June 2023, December 2023 and March 2024 – to bring the cash rate from 0.1 per cent to 1.75 per cent.


----------



## JohnDe (21 January 2022)

againsthegrain said:


> some interesting claims here:
> 
> 
> 
> ...



Same. I’ve been waiting 5 years.


----------



## ducati916 (22 January 2022)

JohnDe said:


> OK, so let me get this right - you have finally agreed that Tesla productivity is better than the competition. Wow that was long winded.
> 
> *"TSLA is the best of a bad bunch (industry)" ducati916*
> 
> And for the record (again) I did not mention anything about a company that can "outrun inflation", my point has always been that the companies that can improve productivity over its competitors should be able ride through a high inflation economy, and what will help the company is new technology. Thus my examples of which technology to look at and one company and a company using new ways, TSLA, which has ridden through the Covid-19 induced shortages that have caused all its competitors to slow production and reduce operation hours.





So TSLA is the best of a bad bunch. TSLA's ROCE is over the last 3 years 7.88%. With inflation at 3.3% over the same time period, your ROCE is under 5%. That is woeful. Currently at 11.83% - 7%, we have 4.83% ROCE. Still woeful.

Take AAPL which has x3 (+/-) the market cap of TSLA. It has a ROCE of 50% net 43% after inflation on current numbers.

Although TSLA 'thinks' it is a tech company, at the end of the day it is just another car company.

Productivity has been falling across the board:







Productivity, broadly speaking, is doing nothing to ameliorate inflation.

There are some very good companies out there, but, their share prices unsurprisingly were bid to bubble levels and are now coming down with the general market. Definitely worth buying at some point. Just not atm.

jog on
duc


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## divs4ever (22 January 2022)

JohnDe said:


> No one is perfect, just like no institution is. However, the RBA has helped keep Australia out of recession for the longest period in recorded history, when other countries went into recession. We've had some luck on the way, but luck doesn't come without hard work. And nothing good lasts forever.



 but the list  is getting longer , the RBA , BoM ( Bureau of Meteorology ) Treasury  , and several more  and sadly most are tax-payer funded


----------



## JohnDe (22 January 2022)

ducati916 said:


> So TSLA is the best of a bad bunch. TSLA's ROCE is over the last 3 years 7.88%. With inflation at 3.3% over the same time period, your ROCE is under 5%. That is woeful. Currently at 11.83% - 7%, we have 4.83% ROCE. Still woeful.
> 
> Take AAPL which has x3 (+/-) the market cap of TSLA. It has a ROCE of 50% net 43% after inflation on current numbers.
> 
> ...




You're drifting way off target. This discussion started with me basically saying - 'Tesla productivity is better than its competition, I believe  that will help it survive any massive inflation hit of the international economy, while the competition will struggle'.

This article was published in late October 2021, before Tesla's glowing sales numbers where release at the end of 2021 -

_*The secret behind Tesla’s 30% gross margin

The company's Q3 sales rose 58% year-on-year despite a 6% decrease in average selling price, allowing for high margins for the electric vehicle manufacturer*

Manufacturers of vehicles using internal combustion engines say large investments funded by revenue from selling gas and diesel vehicles can make up for the deficit incurred by the production of electric vehicles (EVs).

This is why governments worldwide offer huge subsidies to buyers of such eco-friendly vehicles, which are not profitable for manufacturers, to expand the supply of EVs.

US-based Tesla, the world's largest EV maker, however, has broken this paradigm in the sector. Its recent report on its third quarter performance refutes the idea that the company cannot earn huge profits by selling EVs.

*Gross sales margin that outstrips that of luxury automakers*

Tesla's car sales in the third quarter rose to an estimated US$12.1 billion, up 58% or US$4.4 billion won from the same quarter last year, as the number of units sold from July to September this year was around 240,000, up 100,000 over the same period.

A noteworthy detail is that automotive gross profit — overall sales minus manufacturing costs — surged 74% over the same period. The automotive gross margin of such vehicles — the ratio of gross profit divided by sales — also rose from 27.7% to a record-high 30.5%, meaning Tesla earned a profit of around US$25,000 for every roughly US$90,000 vehicle it sold.

Im Eun-young, a senior analyst at Samsung Securities, told the Hankyoreh over the phone, "The gross sales margin of 30% is higher than those of German luxury carmakers BMW and Mercedes-Benz, and this standard is exclusive to the best luxury automakers like Porsche and Ferrari."

Germany-based Daimler AG, which owns Mercedes-Benz, had a gross sales margin of 23% in this year's second quarter, while Toyota — nicknamed the "master of cost reduction" — had 21% and Hyundai Motor only 19%.

The average selling price (ASP) of Tesla EVs is also falling. The figure fell 6% in a year from around US$54,000 in the third quarter last year to around US$50,000 in the same quarter this year. This is because the Tesla Model S and Model X — each priced around or over US$90,000 — saw their share shrink to about 4% of overall sales, but the lower-priced Model 3 and Model Y saw jumps in sales.

Despite this, the company's profit margin improved because manufacturing costs decreased significantly more than sticker prices. Over the cited period, the cost per unit decreased 12% from around US$40,000 to roughly US$35,200.

The Tesla report said, "Our operating margin reached an all-time high as we continue to reduce cost at a higher rate than declines in ASP." Thus, cost cutting seems to be the secret to achieving high profitability.

*The "economy of scale" effect and a low-cost plant in China*

How did Tesla earn such a high margin by selling electric vehicles, which are traditionally money losers?

The first factor is its economy of scale. In industries with a large proportion of fixed costs such as facility investment and development expenses such as cars, profits surge when sales increase due to the profit-leverage effect, in which the manufacturing cost per unit falls with high sales volume.

Tesla makes four models: the Model S, Model X, Model 3 and Model Y. Lower production costs are made possible through efforts like cutting the unit price of parts and maintaining fixed costs due to rising sales. Makers of cars using internal combustion engines that entered the EV market late face different circumstances, however. Until sales of electric vehicles reach a given scale, losses are inevitable due to massive investment costs.

Koh Tae-bong, head of research at Hi Investment and Securities, said, "The profitability of EVs basically depends on the scale of output using the EV-only framework [platform] developed by the manufacturer," adding, "Tesla will produce about a million units this year, resulting in economies of scale, but Hyundai is only capable of doing the same by 2025."

Also helping Tesla's margins is the company's expansion of factories in China, where labor and logistics costs are relatively cheap. Output capacity at the automaker's Shanghai plant, which went online in late 2019, is 450,000 units, and production there growing enough to cover the recent scale of exports to Europe.

*The magic of "giga casting"*

Analysts point to another factor behind Tesla's high profit margin. Park Hyung-keun, a senior researcher at POSCO Research Institute, said, "Through vertical integration by directly being involved from floor design to parts supply and demand, production and service, Tesla has helped reduce costs by raising the degree of its parts integration and cutting overlapping costs."

Tesla's unique structure of vertical integration, ranging from the development of semiconductor chips, software and batteries for electric vehicles, to charging, unmanned driving and insurance services, helps lower costs. Its “do-it-all” approach simplifies the automotive production process in a manner resembling that of electronic products. In contrast, other automakers actively utilize production outsourcing to diversify vehicle quality risks and raise output efficiency.

A leading example is Tesla's “giga” aluminum die-casting process. A Giga Press weighing more than 1 giga pound (400 tonnes, or around 900,000 pounds) stamps the entire rear chassis of a car with a large aluminum alloy. About 70 metal plates can be welded to the chassis, but giga casting can simplify the process and slash production costs by about 40%. This is why Tesla electric vehicles have recently reduced panel gaps issues — defects caused by misaligned steel plate seams.

The company plans to expand the use of giga casting, which it began applying last year, to the front of its EVs.

By Park Jong-o, staff reporter









						The secret behind Tesla’s 30% gross margin
					

The company's Q3 sales rose 58% year-on-year despite a 6% decrease in average selling price, allowing for high margins for the electric vehicle manufacturer




					english.hani.co.kr
				



_


----------



## JohnDe (22 January 2022)

Performance Summary

Tesla's latest twelve months return on capital employed is 12.4%.
How does Tesla's Return On Capital Employed benchmark against competitors?​
We've identified the following companies as similar to Tesla, Inc. because they operate in a related industry or sector. We also considered size, growth, and various financial metrics to narrow down the list to the ones listed below.
Tesla Return On Capital Employed Benchmarks

NameTickerReturn On Capital EmployedWorkhorse Group Inc.NASDAQCM:WKHS-97.2%Rivian Automotive, Inc.NASDAQGS:RIVN-57.0%Virgin Galactic Holdings, Inc.NYSE:SPCE-35.7%Electrameccanica Vehicles Corp.NASDAQCM:SOLO-30.5%Netflix, Inc.NASDAQGS:NFLX0.0%Ford Motor CompanyNYSE:F1.8%Consumer DiscretionarySECTORSCY.US5.7%General Motors CompanyNYSE:GM7.7%Tesla, Inc.NASDAQGS:TSLA12.4%





__





						The Complete Toolbox For Investors | finbox.com
					






					finbox.com


----------



## sptrawler (22 January 2022)

IMO and it is only my opinion, as we said on here when Tesla first came to prominence, the main advantage they have is they aren't carrying the baggage that the legacy manufacturers are.
That advantage will only last so long, the legacy manufacturers are already counteracting the albatross effect of the ICE product, by deleting the cheap and cheerful models and only selling the the up spec models where the profit margin is greater.
The legacy companies are also going into partnerships to share development and research costs of the EV product, retooling and model changes to keep the product aligned to changing consumer tastes is also reduced, whereas Tesla will have that carrying cost, unless they go into partnerships but that in itself would erode its advantage.
So the legacy manufacturers may be making a smaller percentage profit, but it is still a much larger pool of money they are playing in, 1m EV's sold in a pool of 70m sales, so whether Tesla can stay ahead of the pack remains to be seen, but they certainly have changed the face of motoring and in the process got rid of our cheap and cheerful drive away cars which just adds to the inflation basket.


----------



## over9k (22 January 2022)

Lots of mean reversions going on at the moment.


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## over9k (22 January 2022)

JohnDe said:


> No one is perfect, just like no institution is. However, the RBA has helped keep Australia out of recession for the longest period in recorded history, when other countries went into recession. We've had some luck on the way, but luck doesn't come without hard work. And nothing good lasts forever.



The RBA has created a debt and housing bubble leviathan that will take a great depression style event to undo.


----------



## JohnDe (22 January 2022)

over9k said:


> The RBA has created a debt and housing bubble leviathan that will take a great depression style event to undo.




It takes more than just one organisation to do that.

Federal governments from the past 20 years have been spending like there is no tomorrow, and then the State governments got involved, I am still flabbergasted with East West Link: Cost of scrapping project more than $1.1 billion
And lets not forget us the citizens that like to mortgage their home for more than it's worth so they can buy a new car and boat. Or the second mortgage for the holiday home with pool and gourmet kitchen.

Everyone is at fault here, just like all great recessions and depressions.

When a flood is coming nothing can stop it, measures can be put in place to slow it and to minimise damage and protect critical infrastructure but that is all. That is what most Reserve Banks have been doing, protecting the critical parts of the economy and minimizing the harm to the people.

_The Reserve Bank of Australia (RBA) is Australia's central bank and derives its functions and powers from the Reserve Bank Act 1959. Its duty is to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people. It does this by conducting monetary policy to meet an agreed medium-term inflation target, working to maintain a strong financial system and efficient payments system, and issuing the nation's banknotes._

_The RBA provides certain banking services as required to the Australian Government and its agencies, and to a number of overseas central banks and official institutions. Additionally, it manages Australia's gold and foreign exchange reserves._









						About the RBA
					

Overview of Functions and Operations; History of the RBA; Governance and Accountability of the RBA; Structure of the RBA; Reserve Bank Act 1959; Freedom of Information; Archives; International Financial Sanctions and Cash Reporting




					www.rba.gov.au


----------



## sptrawler (22 January 2022)

over9k said:


> The RBA has created a debt and housing bubble leviathan that will take a great depression style event to undo.



Only on the East Coast, specifically Sydney/ Melbourne and if interest rates do take off, it will only be the ponzi members in Sydney/Melbourne who will bear the brunt of it.
Australia doesn't need a great depression, only 10 million people live in Sydney/ Melbourne, how many of  those are in debt upto their eyeballs and how many of them will default?
It isn't a disaster, it is a localised wealth redistribution, for everyone who can't afford the payments, there will be someone who picks up a bargain on the mortgagee sale, no point being emotional that's the way life is when investing.


----------



## againsthegrain (22 January 2022)

sptrawler said:


> Only on the East Coast, specifically Sydney/ Melbourne and if interest rates do take off, it will only be the ponzi members in Sydney/Melbourne who will bear the brunt of it.
> Australia doesn't need a great depression, only 10 million people live in Sydney/ Melbourne, how many of  those are in debt upto their eyeballs and how many of them will default?




Once the fed raises rates we can take example from Turkey what happens to the currency if we don't follow, somebody will get screwed over either way


----------



## sptrawler (22 January 2022)

againsthegrain said:


> Once the fed raises rates we can take example from Turkey what happens to the currency if we don't follow, somebody will get screwed over either way



We will still be digging up minerals and shipping them, whether the people in Sydney/Melbourne lose their house or not, means zip to the big picture. 
Sad but a fact, no different to margin calls that wipe people out, it's just a margin call on your house, the house doesn't produce anything it just provides shelter for your $hit.
Reality has to hit eventually, it's just a matter of when.


----------



## over9k (22 January 2022)

sptrawler said:


> Only on the East Coast, specifically Sydney/ Melbourne and if interest rates do take off, it will only be the ponzi members in Sydney/Melbourne who will bear the brunt of it.
> Australia doesn't need a great depression, only 10 million people live in Sydney/ Melbourne, how many of  those are in debt upto their eyeballs and how many of them will default?
> It isn't a disaster, it is a localised wealth redistribution, for everyone who can't afford the payments, there will be someone who picks up a bargain on the mortgagee sale, no point being emotional that's the way life is when investing.



Nah, not with you here trawler, it might be worst in the biggest cities but it's still bad elsewhere. Maybe not AS bad, but still bad.


----------



## over9k (22 January 2022)

JohnDe said:


> It takes more than just one organisation to do that.
> 
> Federal governments from the past 20 years have been spending like there is no tomorrow, and then the State governments got involved, I am still flabbergasted with East West Link: Cost of scrapping project more than $1.1 billion
> And lets not forget us the citizens that like to mortgage their home for more than it's worth so they can buy a new car and boat. Or the second mortgage for the holiday home with pool and gourmet kitchen.
> ...



Agreed, but the RBA has contributed massively through running on the official stats mandate. As soon as the politicians fudge the numbers, appropriate policy goes out the window. 

There's no way they didn't know better (what the politicians have been up to). No way.


----------



## sptrawler (22 January 2022)

over9k said:


> Nah, not with you here trawler, it might be worst in the biggest cities but it's still bad elsewhere. Maybe not AS bad, but still bad.



At the end of the day it is a house, it isnt making any export dollars, it isnt puttiing goods in stores, it does nothing but absorb money.
The banks will get a hit if prices fall below book value, shares will get a hit as people dump their portfolios to save their house, but I think you really dwell on it way too much, life goes on look at the U.S 10 years after the subprime disaster.
We will be but a small speed bump that wont even register on a World scale.
There will be some once in a lifetime bargains though, as it will be one of the once in lifetime events that happen evey 7 to 10 years IMO. Lol


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## divs4ever (22 January 2022)

over9k said:


> Agreed, but the RBA has contributed massively through running on the official stats mandate. As soon as the politicians fudge the numbers, appropriate policy goes out the window.
> 
> There's no way they didn't know better (what the politicians have been up to). No way.



 the numbers in certain areas have been fudged for decades  at least since 1990 in one important department  so  i suspect the fudging  is elsewhere as well  and maybe continuing  in selected areas 

 however  it only takes a little observation to see how the masses are really doing  ( those who overspend  those who MIGHT be maintaining a balanced budget ) a second hint  can be seen in the shopping malls  , a less easy assessment is the industrial properties 

 remember all these sectors are interconnected  , even in a resource driven economy like Australia


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## divs4ever (22 January 2022)

sptrawler said:


> At the end of the day it is a house, it isnt making any export dollars, it isnt puttiing goods in stores, it does nothing but absorb money.
> The banks will get a hit if prices fall below book value, shares will get a hit as people dump their portfolios to save their house, but I think you really dwell on it way too much, life goes on look at the U.S 10 years after the subprime disaster.
> We will be but a small speed bump that wont even register on a World scale.
> There will be some once in a lifetime bargains though, as it will be one of the once in lifetime events that happen evey 7 to 10 years IMO. Lol



 it does create employment  and demand  , but yes i mostly agree  even allowing some houses will  be used for short term migrants ( like international students )  now you might have to dig deep for the data  but i suspect the sub-prime disaster is still bubbling along underneath  with SOME still trying  to pay out that mortgage  , although i suspect others  would have sold into the bubble ( much to the relief of smaller banks)


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## divs4ever (22 January 2022)

over9k said:


> Nah, not with you here trawler, it might be worst in the biggest cities but it's still bad elsewhere. Maybe not AS bad, but still bad.



it MIGHT be a glimpse of hope for some small towns though , and some of those small towns  have been doing in tough for more than a decade  , so bad for them is just another day


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## sptrawler (22 January 2022)

divs4ever said:


> it does create employment  and demand  , but yes i mostly agree  even allowing some houses will  be used for short term migrants ( like international students )  now you might have to dig deep for the data  but i suspect the sub-prime disaster is still bubbling along underneath  with SOME still trying  to pay out that mortgage  , although i suspect others  would have sold into the bubble ( much to the relief of smaller banks)



The difference between the U.S subprime and us is, in the U.S the loan was against the house, here the loan is against the person.
So in the U.S once the house value dropped below the loan value the borrower just handed the house over to the bank, it was called jingle mail the sound of the house keys in the envelope.
In Australia the borrower owns the debt, when the house is sold, the borrower still owes the shortfall, unless it has insurance to cover that eventuality.
So the banks still have exposure here, but nothing like the subprime loans.
That is also why the European banks suffered so much in the GFC, the yanks were bundling up these crap house loans in big packages and onselling them to the EU banks as CDO's, which actually had no underpinning collateral, Australia was fortunate our banks were too small to get involved.


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## Smurf1976 (22 January 2022)

divs4ever said:


> the list is getting longer , the RBA , BoM ( Bureau of Meteorology ) Treasury , and several more and sadly most are tax-payer funded



What’s the issue with recording and forecasting the weather?

Doesn’t every country, or at least anyone who isn’t broke or at war, do that as a relatively inexpensive but useful service funded by taxpayers?


----------



## divs4ever (22 January 2022)

they sold the CDOs in Australia  to councils and NGOs   , so don't worry we got a share of the pain ( from the GFC ) as i hear it most in Australia  were lobbed at 'sophisticated investors '  ( aka big piles of money advised  by financial advisers and tax consultants )

 but i guess  we will find out next time when  our insurance companies beg for mercy ( like AIG did in the GFC )

 i suspect the mortgagees will all end up in the same place  just through different processes ( in most nations ) i will be watching with curiosity  how the Muslim communities cope , just in case they have a better system 

 unless  mortgage insurance has changed  a bit  , it seems it is only there to protect the lender from a major harm 

 i have watched carefully  how 'income protection insurance'  has played out ( or resisted paying ) on a buddy who had multiple Super funds and personal insurance  , so can imagine what happens during mortgage stress ( after all the second mortgage   provider normally requires such extra insurance )


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## Smurf1976 (22 January 2022)

sptrawler said:


> So if for example the RBA feels fuel or electricity prices are a spike and not a permanent trend, they wont be counted in the CPI calculation from what I understand.



Trouble is, just about every individual and business has at least some expenditure on fuel and/or electricity and any increase in cost is absolutely real there.

Same goes for many things, paying is non-optional in practice.


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## sptrawler (22 January 2022)

Smurf1976 said:


> Trouble is, just about every individual and business has at least some expenditure on fuel and/or electricity and any increase in cost is absolutely real there.
> 
> Same goes for many things, paying is non-optional in practice.



That's ecactly what I was getting at, just because the authorities say that cpi or inflation is running at x%, means very little at street level, it depends what is in their sample basket.
Much the same with wages, there may not be wage inflation somewhere in Australia, but it sure as hell isn't in W.A.
Wages here are going stupid.


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## divs4ever (22 January 2022)

Smurf1976 said:


> What’s the issue with recording and forecasting the weather?
> 
> Doesn’t every country, or at least anyone who isn’t broke or at war, do that as a relatively inexpensive but useful service funded by taxpayers?



 you haven't bought land in a dubious  area  , i guess 

 i don't need to go far to find a major shopping area  built in a flood plain ( and i do NOT mean those 'one in one hundred year ' zones )

 the same with 'record temperatures ' and ' record rainfalls ' or even cyclones  coming down to Southern QLD ( and Northern NSW )

 now if you don't build to cyclone-resistant standards when you should ( despite official regulations )

 and  actually QLD has a very expensive super computer that does all that modelling ( as do several nations )  now of course these computers might not  be used for the purposes they are claimed to  be designed for 






						November 2021 | TOP500
					






					top500.org
				




from 2010


RankSystemCoresRmax (TFlop/s)Rpeak (TFlop/s)Power (kW)51*Vayu* - Sun Blade x6048, Xeon X5570 2.93 Ghz, Infiniband QDR, Oracle
National Computational Infrastructure (NCI Australia)
Australia11,936126.4139.988HP Pod BL2x220, X5660 2.8 Ghz, Infiniband QDR, HPE
iVEC
Australia9,60087.2107.5146*CSIRO GPU Cluster* - Supermicro Xeon Cluster, E5462 2.8 Ghz, Nvidia Tesla s2050 GPU, Infiniband, Xenon Systems
Commonwealth Scientific and Industrial Research Organisation (CSIRO)
Australia4,60852.5143.394163*SOLAR* - Sun Blade x6048, Xeon X5570 2.93 Ghz, Infiniband QDR, Oracle
Bureau of Meteorology / CSIRO HPCCC
Australia4,60049.653.9220

now you can bet these have been upgraded but slid  down the lists  and some would have been replaced by cloud access .. but how were our weather forecasts  in 2010  ( considering QLD had it's own lesser ranked computer  to assist  No 163 )


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## divs4ever (22 January 2022)

sptrawler said:


> Wages here are going stupid.



of course they are , more people are productive over there  , good workers get good wages in sensible companies


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## Smurf1976 (22 January 2022)

divs4ever said:


> you haven't bought land in a dubious area , i guess



I haven't but even if I did, how would that be the fault of the BOM?

They record and forecast weather.

If governments, land developers and property owners collectively make decisions to build in bad locations which are prone to flooding, burning or otherwise being destroyed by nature then that's not due to weather forecasting.

Perhaps I'm missing your point but I'm not seeing how the BOM is causing inflation?


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## qldfrog (22 January 2022)

sptrawler said:


> The difference between the U.S subprime and us is, in the U.S the loan was against the house, here the loan is against the person.
> So in the U.S once the house value dropped below the loan value the borrower just handed the house over to the bank, it was called jingle mail the sound of the house keys in the envelope.
> In Australia the borrower owns the debt, when the house is sold, the borrower still owes the shortfall, unless it has insurance to cover that eventuality.
> So the banks still have exposure here, but nothing like the subprime loans.
> That is also why the European banks suffered so much in the GFC, the yanks were bundling up these crap house loans in big packages and onselling them to the EU banks as CDO's, which actually had no underpinning collateral, Australia was fortunate our banks were too small to get involved.



The story about leaving the house and the mortgage behind was not true USA wide, some states yes, others no.....
Another reason not to judge US as a whole
Another factor many Australians do not realise is that in many parts of Europe, loan interests are NOT variable;
so you buy a house in France at 100k Euro with a 1.5% loan (currently) on 20 or 25y, any inflation will be a major win for these borrowers..
the high inflation in the 70s/80s in France allowed a whole generation a painless access to property...
Compare this to Australia where we were supposed to pay nearly 18% interest on HL;
even much later , my first heavily discounted HL rate in the late 90s was >8% thanks to Aussie HL, some of the banks were still above 10%
so HL in europe: inflation is great for the borrower. here it is a killer


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## divs4ever (22 January 2022)

Smurf1976 said:


> I haven't but even if I did, how would that be the fault of the BOM?
> 
> They record and forecast weather.
> 
> ...



insurance ratings  for one  .. the key word is RECORD , if the historical data is flawed  ,  well best of luck

 higher costs ( like insurance premiums ) do nothing helpful to inflation , whereas a better informed  builder/buyer can get an early jump on efficiencies ( stuff like double-glazing , home insulation  , window tinting and much more like concrete stumps   in ground that retains excessive moisture for long periods )

 less buildings needing repairs from avoidable damage  , means more workers building new constructions ( and less resources wasted )

  i noticed earlier in the week  the old high school  has been renovated ( despite efforts by some to just sell it for residential ) but the gut buster   was the old 'home room'  building  which should have been bulldozed  before it even saw a full year of use  they probably quintupled the value  by putting solar arrays on the roof ( because it tilted north )  ... will be interesting to see if it is blown flat in the next real cyclone , all the surrounding trees  were removed  ( and they provided a  wind break from the South and West  ) but i guess the kids will enjoy vibrating class rooms as a bonus  ( i can't believe that garbage survived 50 years )


----------



## frugal.rock (22 January 2022)

sptrawler said:


> The company has 831 unfinished contracts around Australia and records show a $28m dollar loss in the 2020 financial year.



It begs the question, why wasn't it shut down, prior to going belly up, by legislation?

Surely a loss that big rings alarm bells, that for the company to continue, it essentially must operate as a Ponzi scheme to have a reasonable survival chance, and possibly was (Ponzi), before even reporting that loss?

As they say, consumers have more protection buying a toaster than a house... or subsiding cracking unit...etc
Sad.


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## divs4ever (22 January 2022)

as i was saying in several places  , Evergrande  is an example  , not an outlier 

 watch out for contagion ( and tighter credit ) in by-gone days the sub-contractors get squeezed first 

 by the same token  , those who like REITs ( and i sure do ) might have some buying times ahead in the next three years ( maybe the regional banks will look more attractive as well )


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## ducati916 (23 January 2022)

JohnDe said:


> Performance Summary
> 
> Tesla's latest twelve months return on capital employed is 12.4%.
> How does Tesla's Return On Capital Employed benchmark against competitors?​
> ...





At the top of this post you claim a figure of 12.4%.

So I went to the link x2 that you kindly provided, unfortunately, this is what came back:






So clearly your number cannot be verified from this source.

To save time I went directly to the horse's mouth:



			https://www.sec.gov/Archives/edgar/data/1318605/000095017021002253/tsla-20210930.htm#consolidated_statmnts_of_cmprehnsve_loss
		




			https://www.sec.gov/Archives/edgar/data/1318605/000156459021004599/tsla-10k_20201231.htm#ITEM_8_FINANCIAL_STATEMEMTS_SUPPLEMENTAR
		


TSLA has not put out its 2021 10K statement yet, so you have to combine the 10Q's. Therefore my original figures of 5% represent the 2020 numbers.

Anyway what your website 'seems' to have done to get to the 12% is average 2020 with 2021, which is fair. That brings us to the 12%. It looks from the numbers that 2021 will come in at 18%, unless that is an after inflation adjusted number. Then it is 11%

That is a big jump. Almost suspiciously so. Anyway, I digress.

Using either number, is that the number that indicates something special in terms of productivity?

The answer is no. Even using the 18%, that only just barely clears the minimum requirement of 15% before inflation is deducted. A real ROCE is 11%. So TSLA can beat inflation currently, but not much more.

TSLA moves from woeful to below average.

I have provided a scan of 41 of 150 companies that have a ROCE of 50%+






All of these would need to be looked at properly before you could conclusively say that they were great companies. However, the point is that these (on paper) demonstrate that TSLA is very, very average, which isn't really surprising given the industry. Car manufacturing is a notoriously poor industry to operate in.

Just picking 1 at random from page 1




Has a ROCE of 187%. It is an industrial (same as the car-makers) but in the aero-space segment. You now have a list of 150 companies and industries that can potentially ameliorate through productivity, the ravages of a high (increasing?) inflation rate.

Therefore, TSLA when discussing 'productivity' moves from woeful to piffling.

jog on
duc


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## JohnDe (23 January 2022)

ducati916 said:


> At the top of this post you claim a figure of 12.4%.
> 
> So I went to the link x2 that you kindly provided, unfortunately, this is what came back:
> 
> ...




That clears everything up, your research skills are at fault and is the reason you keep chasing your tail.

Bellow is a screenshot taken 99 seconds ago from my phone  -


----------



## ducati916 (23 January 2022)

JohnDe said:


> That clears everything up, your research skills are at fault and is the reason you keep chasing your tail.
> 
> Bellow is a screenshot taken 99 seconds ago from my phone  -
> View attachment 136369





LOL.

So the link that I provided to you was the 'official' TSLA website:





You (should) see that the 2021 10K will be released 26 Jan. 2022.

Which means....it has not yet been released. As I said, what your website has done is simply average 2020 10K results with 3Q of 2021 results, which....gives you your 12%.


For real 'productivity' (12% - 7% inflation) you end up with 5% ROCE, which is just not very good.

Why is it no good?

Any company that has to produce goods with a large amount of physical plant and land investments, will always have lower productivity than a company that is asset lite (ie. no physical plant) and produces a good that can be distributed digitally.

TSLA may (or may not) be the best in the car industry, but the car industry is a TERRIBLE industry to try and find productivity gains.


jog on
duc


----------



## JohnDe (23 January 2022)

ducati916 said:


> LOL.
> 
> So the link that I provided to you was the 'official' TSLA website:
> 
> ...




You're still chasing your tail.

You are making this all about Tesla, when I gave an example to my reasoning that there are industries and companies that can survive a world with high inflation -

"_Tesla is proof, they found an obvious way to design and manufacture vehicles at reduced cost and time that other major vehicle manufacturers have not been able to do. Read the book Power Play: Tesla, Elon Musk, and the Bet of the Century

Keep an eye out for investments in artificial intelligence, robotics, energy storage, DNA sequencing, and blockchain technology._"

The only way to assess a business and an economy is by looking at the most up to date figures and information available. I have looked at the current information, you are looking at the last financial year. The latest update is only for *Q3 2021* the next will be
*Tesla Announces Date for Fourth Quarter and Full Year 2021 Financial Results and Webcast *on Wednesday 26th January. that will be an interesting day, with all the information required to assess whether Tesla is going forwards or backwards.


As for your ROCE -

*5 Businesses That Almost Failed and Showed Us Why It Pays to Keep Going*

Tesla did not start with Elon Musk, both are no angel but they have transformed the automotive industry as they promised. Read the book by Tim Higgins - *Power Play Elon Musk, Tesla and the Bet of the Century.*

_*The secret behind Tesla’s 30% gross margin*_

_The company's Q3 sales rose 58% year-on-year despite a 6% decrease in average selling price, allowing for high margins for the electric vehicle manufacturer

Manufacturers of vehicles using internal combustion engines say large investments funded by revenue from selling gas and diesel vehicles can make up for the deficit incurred by the production of electric vehicles (EVs).

US-based Tesla, the world's largest EV maker, however, has broken this paradigm in the sector. Its recent report on its third quarter performance refutes the idea that the company cannot earn huge profits by selling EVs.

*Gross sales margin that outstrips that of luxury automakers*

Tesla's car sales in the third quarter rose to an estimated US$12.1 billion, up 58%

A noteworthy detail is that automotive gross profit — overall sales minus manufacturing costs — surged 74% over the same period. The automotive gross margin of such vehicles — the ratio of gross profit divided by sales — also rose from 27.7% to a record-high 30.5%, meaning Tesla earned a profit of around US$25,000 for every roughly US$90,000 vehicle it sold.

Despite this, the company's profit margin improved because *manufacturing costs decreased significantly* more than sticker prices. Over the cited period, the cost per unit decreased 12% from around US$40,000 to roughly US$35,200.

*How did Tesla earn such a high margin by selling electric vehicles, which are traditionally money losers?*

The first factor is its economy of scale. In industries with a large proportion of fixed costs such as facility investment and development expenses such as cars, profits surge when sales increase due to the profit-leverage effect, in which the manufacturing cost per unit falls with high sales volume.

Tesla makes four models: the Model S, Model X, Model 3 and Model Y. Lower production costs are made possible through efforts like cutting the unit price of parts and maintaining fixed costs due to rising sales. Makers of cars using internal combustion engines that entered the EV market late face different circumstances, however. Until sales of electric vehicles reach a given scale, losses are inevitable due to massive investment costs.

The profitability of EVs basically depends on the scale of output using the EV-only framework [platform] developed by the manufacturer," adding, "Tesla will produce about a million units this year, resulting in economies of scale, but Hyundai is only capable of doing the same by 2025."

*The magic of "giga casting"*

Through vertical integration by directly being involved from floor design to parts supply and demand, production and service, Tesla has helped reduce costs by raising the degree of its parts integration and cutting overlapping costs."

Tesla's unique structure of vertical integration, ranging from the development of semiconductor chips, software and batteries for electric vehicles, to charging, unmanned driving and insurance services, helps lower costs. Its “do-it-all” approach simplifies the automotive production process in a manner resembling that of electronic products. In contrast, other automakers actively utilize production outsourcing to diversify vehicle quality risks and raise output efficiency.

A leading example is Tesla's “giga” aluminum die-casting process. A Giga Press weighing more than 1 giga pound (400 tonnes, or around 900,000 pounds) stamps the entire rear chassis of a car with a large aluminum alloy. About 70 metal plates can be welded to the chassis, but giga casting can simplify the process and slash production costs by about 40%. This is why Tesla electric vehicles have recently reduced panel gaps issues — defects caused by misaligned steel plate seams.

The company plans to expand the use of giga casting, which it began applying last year, to the front of its EVs._

Comparing Spending on R&D and Marketing Per Car





Return On Capital Employed for Tesla, Inc.

Tesla, Inc. designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems in the United States, China, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers electric vehicles, as well as sells automotive regulatory credits. It provides sedans and sport utility vehicles through direct and used vehicle sales, a network of Tesla Superchargers, and in-app upgrades; and purchase financing and leasing services. This segment is also involved in the provision of non-warranty after-sales vehicle services, sale of used vehicles, retail merchandise, and vehicle insurance, as well as sale of products through its subsidiaries to third party customers; services for electric vehicles through its company-owned service locations, and Tesla mobile service technicians; and vehicle limited warranties and extended service plans. The Energy Generation and Storage segment engages in the design, manufacture, installation, sale, and leasing of solar energy generation and energy storage products, and related services to residential, commercial, and industrial customers and utilities through its website, stores, and galleries, as well as through a network of channel partners. This segment also offers service and repairs to its energy product customers, including under warranty; and various financing options to its solar customers. The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was founded in 2003 and is headquartered in Austin, Texas.


----------



## ducati916 (23 January 2022)

JohnDe said:


> You're still chasing your tail.
> 
> You are making this all about Tesla, when I gave an example to my reasoning that there are industries and companies that can survive a world with high inflation -
> 
> ...





LOL.

So let's work backwards here:




So 2 claims here:

1. I am making this all about TSLA. So let's (again) examine the evidence:




So the issue was (a) smart companies that can (b) counteract inflation through productivity.




You raised TSLA as an example in this post, of a company that has made strides in productivity.




The numbers demonstrate that TSLA may (or may not) lead the car industry in productivity.

Fine. So we move on to see whether those numbers are actually any good. They are not, demonstrated from TSLA's own financial reporting, taken from the official TSLA website.

You provide your own numbers:




Which demonstrate just how bad, historically and currently, the numbers are.




Then just to remind you for:

2. Until I told you, you didn't even know that TSLA hadn't reported its 10K yet. LOL.

I'm guessing that's because you rely on 3rd parties for your information and from the evidence, prefer the quick, low effort way:





jog on
duc


----------



## JohnDe (23 January 2022)

ducati916 said:


> LOL.
> 
> So let's work backwards here:
> 
> ...




Your post is incoherent in that format. I’ll have a beer first & try to decipher the rambling & misquotes.


----------



## Country Lad (23 January 2022)

Bored with this pi$$ing contest which bears no relationship to the inflation topic. Not reading it just visiting to see if you are finished yet and now discussing inflation.  

As a wise man once said about hijacking a thread , _"*You have flown it to a desert outside Amman and blown the ******* thing up**"*_


----------



## JohnDe (23 January 2022)

Country Lad said:


> Bored with this pi$$ing contest which bears no relationship to the inflation topic. Not reading it just visiting to see if you are finished yet and now discussing inflation.
> 
> As a wise man once said about hijacking a thread , _"*You have flown it to a desert outside Amman and blown the ******* thing up**"*_




Agreed.
Now where is your input about inflation ☺️

Mine is that I think that there will be companies that can ride out a high inflation environment and create wealth for share holders, I even gave some examples of industry categories and a video from Cathy Wood giving reasons.


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## Wedgy (23 January 2022)

I am a bit concerned that any attempt to kerb inflation could be a disaster, the issue being the cause of inflation, which in my opinion is caused by supply chain issues, increased transport costs and increased costs due to covid compliance requirements. It is not being caused by wage increases, low unemployment and an over-heated economy. Some sectors have seen wage increase but not many, yes the official unemployment rate is low but that is probably due to lack of foreign workers who can't get in the country, once they are allowed in, unemployment is likely to increase. I suspect that profit margins for most business have, due to increased costs, declined since Covid. So my view is that increasing interest rates now to reduce inflation, could prove to be a big mistake.


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## frugal.rock (23 January 2022)

Wedgy said:


> yes the official unemployment rate is low but that is probably due to lack of foreign workers who can't get in the country, once they are allowed in, unemployment is likely to increase



Hmm, I think the unemployment rate is low because apparently a lot of people aren't looking for a job, which even though they may be of working age, the government removes them from the stats. Smoke and mirrors...

Scummo offering reimbursements of visa costs to foreign workers soon on arrival here, and apparently there's 10k people with visas ready to go.
These foreign workers will hardly fill the gap, and the majority will be going into areas where employers are finding it hard to find people. Eg; hospitality, agriculture, distribution etc
So unlikely to affect unemployment rate, however you can be sure the gov will spruik about more jobs filled/ created, just like their US counterparts already have.

There have been reports of employers poaching people by means of  offering a better wicket, grass is greener style scenario, better money, better perks.


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## Tyre Kicker (23 January 2022)

Wedgy said:


> I am a bit concerned that any attempt to kerb inflation could be a disaster, the issue being the cause of inflation, which in my opinion is caused by supply chain issues, increased transport costs and increased costs due to covid compliance requirements. It is not being caused by wage increases, low unemployment and an over-heated economy. Some sectors have seen wage increase but not many, yes the official unemployment rate is low but that is probably due to lack of foreign workers who can't get in the country, once they are allowed in, unemployment is likely to increase. I suspect that profit margins for most business have, due to increased costs, declined since Covid. So my view is that increasing interest rates now to reduce inflation, could prove to be a big mistake.




Good points. Money printing throughout the world, esp US, has/is contributing too.

Australians have on average, saved 3x as much of their household income in the past 2yrs compared to pre pandemic. You would think a lot of that money is going to find its way into the economy at some stage stimulating demand and growth in lots of sectors.

Boom times ahead?






						Australia COVID: How households plan to spend their pandemic savings
					






					amp.smh.com.au


----------



## Garpal Gumnut (23 January 2022)

Tyre Kicker said:


> Good points. Money printing throughout the world, esp US, has/is contributing too.
> 
> Australians have on average, saved 3x as much of their household income in the past 2yrs compared to pre pandemic. You would think a lot of that money is going to find its way into the economy at some stage stimulating demand and growth in lots of sectors.
> 
> ...



One of the big problems is that those "savings" are in cash, and governments have been diluting cash by printing money, so when the time comes to pay the tiller man, the cost of goods will have inflated greatly, more than any rise in intrinsic price of those goods. 

Governments will need to get the money back somehow. 

gg


----------



## sptrawler (23 January 2022)

qldfrog said:


> The story about leaving the house and the mortgage behind was not true USA wide, some states yes, others no.....
> Another reason not to judge US as a whole



There was enough worthless crap home loans wrapped up in the CDO's to send plenty of U.S and EU banks to the wall, whether it was U.S wide or only part of the U.S is a mute point, it was enough to cause havoc and a global financial crisis.


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## divs4ever (23 January 2022)

Wedgy said:


> I am a bit concerned that any attempt to kerb inflation could be a disaster, the issue being the cause of inflation, which in my opinion is caused by supply chain issues, increased transport costs and increased costs due to covid compliance requirements. It is not being caused by wage increases, low unemployment and an over-heated economy. Some sectors have seen wage increase but not many, yes the official unemployment rate is low but that is probably due to lack of foreign workers who can't get in the country, once they are allowed in, unemployment is likely to increase. I suspect that profit margins for most business have, due to increased costs, declined since Covid. So my view is that increasing interest rates now to reduce inflation, could prove to be a big mistake.



well my answer to inflation , has always  been improved efficiency ( and therefore  better productivity for the buck ) however i seem to be a tiny minority  , because large grandiose plans keep getting  muppets employed  and clowns elected 

 our reliance on foreign workers has been the showpiece of our incompetence , now sure some migration  is healthy , but to NEED temporary migration ( even as tourists and international students ) shows our whole economy is flawed , and the constant outflow of rising talent ( ever since i left high school .. because the ones a little older were sent to a pointless war in Vietnam ) was the first major sign our system was failing ( no room for quality )

 give up on the Employment figures they are nothing like real  they have manipulated since at least 1990 to fit various political agendas  the easy way is to ask the personnel officer at a solid company ( that treats employees as assets )  how many job applications they get , many other businesses just churn staff ( and sometimes board directors as well ) hoping for a shiny star to pass through and lift morale  for a while .

 or  failing that listen to the youngsters in their 20s and 30s , who has a job they hate , who has 3 , 4 , or 5  jobs , trying to get ahead ( and who uses the job as a front for illegal activities  which is the real income )

 so yes Wedgy , those who helped to descend us into the current mess ( over several decades ) are hardly the best choice to guide you out 

 for example do you realize how little fuel we now refine in Australia ( despite being a gas and oil exporter )

 we could  make our own electric vehicles , we mine most  of the resources here REE , lithium , silver gold , copper aluminum  , we have plenty of oil , gas , coal , uranium and sunshine  and all we need to make is an electric SUV  , or panel van to make a viable industry ( all it needs to be is an over-sized golf buggy  , or mobility scooter )

 after all the recent supply chain issues  , how many steps have we made toward self-sufficiency in the last two years


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## Tyre Kicker (23 January 2022)

We could do and make a lot of things to improve our self sufficiency in this the ‘lucky’ country but unfortunately we continue to be the ‘dumb’ country in so many ways, many of which you have touched on above divs.


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## divs4ever (24 January 2022)

we have the talent  , i have ridden with at least 3 cab-drivers  studying automotive engineering ,  i bet we could find other useful people doing  non-essential jobs , they are out there painting houses  , working in warehouses , driving cabs , etc etc etc


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## over9k (24 January 2022)

divs4ever said:


> we have the talent  , i have ridden with at least 3 cab-drivers  studying automotive engineering ,  i bet we could find other useful people doing  non-essential jobs , they are out there painting houses  , working in warehouses , driving cabs , etc etc etc



Can't put the best people on the job divs, we have diversity quota's to fill.


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## Jeda (24 January 2022)

JohnDe said:


> You're still chasing your tail.
> 
> You are making this all about Tesla, when I gave an example to my reasoning that there are industries and companies that can survive a world with high inflation -
> 
> ...




I thought that GM had the record for highest R&D dollars. Learn something new everyday


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## Jeda (24 January 2022)

Too much fear around inflation when no one know's what will happen with covid in the mix. Relax & prepare 

I found this a good read - Will We Go From Pandemic to Recession?


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## divs4ever (24 January 2022)

over9k said:


> Can't put the best people on the job divs, we have diversity quota's to fill.



 yes , i used to make some managements cringe  when i would proudly proclaim i was the ' token Australian ' ( and it wasn't that far from the truth  , even back in the 1980's )

 it took a long time to get where we are , now


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## divs4ever (24 January 2022)

Jeda said:


> Too much fear around inflation when no one know's what will happen with covid in the mix. Relax & prepare
> 
> I found this a good read - Will We Go From Pandemic to Recession?



 i am not convinced that we are avoiding a Recession currently ( so much other current data is fudged , why not that as well ??)


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## divs4ever (24 January 2022)

EXPOSING THE TRUTH BEHIND FOOD SHORTAGES​


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## qldfrog (24 January 2022)

I can not stop LOL ROL at the fact that we have having beef supply and meat /beer shortage due to "Lack of CO2"


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## divs4ever (24 January 2022)

oh yes the irony 

 luckily i prefer spirits


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## mullokintyre (24 January 2022)

tomorrow is a big day when the December Inflation data comes out from the ABS.
According to Chaennel 7


> This week's latest inflation figures are likely to fuel speculation of an interest rate rise by the Reserve Bank of Australia this year, coming just days after an unexpected rapid drop in the unemployment rate.
> 
> The Australian Bureau of Statistics will release the consumer price index for the December quarter on Tuesday.
> 
> Economists forecasts point to a one per cent increase in the quarterly CPI, largely reflecting higher petrol prices and the increased cost of new housing.



Then of course on Wednesday, having digested this news with their spicy beef snags they have for Australia Day, the RBA will release their deliberations on the Interest Rates.



> This would take the annual rate to 3.1 per cent, up from three per cent as of the September quarter, and just above the RBA's two to three per cent target.
> 
> The more interest-rate sensitive underlying measure of inflation - which smooths out sharp price swings - is forecast to rise 0.7 per cent in the December quarter.
> would take the annual rate to 2.4 per cent and up from 2.1 per cent as of the previous quarter, which was the first time it had been within the target since 2015.
> ...



The inflation figures may not come in at `%, could be higher or lower.
But given the RBA has consistently underestimated the  CPI and employment figures, I know where I will be putting my money.
Mick

Edited . The RBA will give its decision NEXT Thursday, not this Thursday.
Mick


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## JohnDe (25 January 2022)

A quote from Warren Buffett, the Chairman of Berkshire Hathaway  in 1994, he wrote:

_“We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%.” (emphasis added)._

Panic and fear earns you nothing, research and diligence creates opportunity.


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## Jeda (25 January 2022)

JohnDe said:


> A quote from Warren Buffett, the Chairman of Berkshire Hathaway  in 1994, he wrote:
> 
> _“We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%.” (emphasis added)._
> 
> Panic and fear earns you nothing, research and diligence creates opportunity.




I like panic and fear, offers better discounts  keep an eye on investing forums for a general guide on which way the public is going.


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## JohnDe (25 January 2022)

Jeda said:


> I like panic and fear, offers better discounts  keep an eye on investing forums for a general guide on which way the public is going.




True, but picking the peak is the tricky part.

_*Investors hold nerve on ASX 200 but strategists warn of rocky year*_​​_Investors have held their nerve, pouring money back into shares after a worrisome start to the year._​_However, leading strategists and fund managers warned of a rocky year ahead as rising inflation and a peak in the Covid-19 pandemic leads to a faster withdrawal of policy support._​​_After falling as much as 7 per cent in the past three weeks as US shares had their biggest fall in more than a year, Australia’s benchmark S&P/ASX 200 share index mostly recovered from a 1.2 per cent intraday fall to an eight-month low of 7086.8 points on Monday...._​





						NoCookies | The Australian
					






					www.theaustralian.com.au


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## CityIndex (25 January 2022)

The Q4 CPI print came in higher across the board, and together with the strong employment figures last week, it’s looking increasingly likely that the RBA will end QE at their February meeting.

Speculation of a rate hike by the Aussie central bank could also cause the equity market to diverge from AUD/USD, with the currency pair trading higher on the data release, while the ASX200 is seemingly eyeing a break below 7000.

All trading carries risk, but should be interesting to see how the two markets play out over the rest of the week with the Fed’s interest rate decision on Thursday morning as well.


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## mullokintyre (25 January 2022)

CityIndex said:


> The Q4 CPI print came in higher across the board, and together with the strong employment figures last week, it’s looking increasingly likely that the RBA will end QE at their February meeting.
> 
> Speculation of a rate hike by the Aussie central bank could also cause the equity market to diverge from AUD/USD, with the currency pair trading higher on the data release, while the ASX200 is seemingly eyeing a break below 7000.
> 
> All trading carries risk, but should be interesting to see how the two markets play out over the rest of the week with the Fed’s interest rate decision on Thursday morning as well.



Yes, once again the experts got it wrong.
Inflation is not only rising, but it is rising more quickly every month.
if the December figure of .5% were repeated every month we would have 6% inflation per year.
RBA gov Lowe's statements about no interest rate rises till the end of 2024 look more and more  embarrassing.
Mick


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## Tyre Kicker (25 January 2022)

Writing as been on the wall re inflation for some time now.

Those leveraged to the hilt after purchasing property for insane prices will be feeling a little ill with the genie well and truly out of the bottle.

Interesting times ahead.


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## JohnDe (25 January 2022)

Tyre Kicker said:


> Writing as been on the wall re inflation for some time now.
> 
> Those leveraged to the hilt after purchasing property for insane prices will be feeling a little ill with the genie well and truly out of the bottle.
> 
> Interesting times ahead.




It will be interesting.

There are many that have mortgaged themselves to the hilt thinking that low interest rates would last long enough for them to not care. Then there are the savers, the many who have squirrelled away all their money waiting for an opportunity.

_Treasurer Josh Frydenberg has repeatedly told us about the“damn lot of money” Aussies have stashed away over the last few Covid years. As of late last year, this stash was valued at $260bn. And the nation’s number one seed when it comes to crunching money believes this will power the expected booming economic recovery. But could this optimism be trumped by a stock market crash?_​​_Overnight, the US stock market was in slide mode, which is bound to take our share prices down today. And a former big call merchant, Boston’s Jeremy Grantham, has tipped a 45% crash! Happily, the 83-year old Grantham has had a bad run for some time._​​_Incidentally, he’s been tipping a huge Australian property crash for over a decade. When it comes to predictions, you have to get the timing right._​​_The CBA economics team calculated that we’ve saved about $260bn since the Coronavirus hit us and the economy._​








						Will our pandemic-induced savings motherload kill talk of a 45% crash of stocks?
					

CBA’s economics team calculated Aussies have saved about $260bn since Covid hit. Will this mountain of money protect us from a crash?



					switzer.com.au


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## JohnDe (25 January 2022)

CityIndex said:


> The Q4 CPI print came in higher across the board, and together with the strong employment figures last week, it’s looking increasingly likely that the RBA will end QE at their February meeting.
> 
> Speculation of a rate hike by the Aussie central bank could also cause the equity market to diverge from AUD/USD, with the currency pair trading higher on the data release, while the ASX200 is seemingly eyeing a break below 7000.
> 
> All trading carries risk, but should be interesting to see how the two markets play out over the rest of the week with the Fed’s interest rate decision on Thursday morning as well.




Fuel, housing push inflation to 3.5pc

_Inflation has accelerated sharply to 3.5 per cent over the year to December, from 3 per cent, underpinned by further large increases in petrol and housing construction costs._​​_The latest figures from the Australian Bureau of Statistics showed a significantly larger than expected 1.3 per cent increase in the December quarter, after lifting by 0.8 per cent over the three months to September._​​_The biggest inflationary drivers over the quarter were for new dwelling purchases, up 4.2 per cent, and a 6.6 per cent lift in petrol prices over the three months._​​_Underlying inflation – which strips out more volatile goods such as fuel and groceries – lifted to 2.6 per cent over the year, from 2.1 per cent, based on the ABS’s trimmed mean measure._​​_Trimmed mean CPI grew by 1 per cent for the three months – also well higher than predicted by economists._​​_This core consumer price growth measure is now firmly within the Reserve Bank of Australia 2-3 per cent target range, and climbing consumer price pressures raise the spectre of earlier than anticipated rate rises, with the RBA due to hold its first meeting of the year next Tuesday._​​_RBA governor* Philip Lowe* has maintained that rates will not rise until late next year._​​_Wages lifted by 2.2 per cent over the year to September, on the latest ABS figures, underlining the challenges for policymakers to boost pay amid rising cost-of-living pressures._​​_The national average weekly retail unleaded petrol price rose by 3.3 cents to an equal record high of 170.4c per litre last week, according to the Australian Institute of Petroleum._​​This is another issue to factor in -

*Business confidence sinks under Omicron wave: NAB business survey* 

_The Omicron outbreak has sent business confidence plunging into negative territory in December and below the low recorded during the Delta wave as companies fret the surge in Covid cases will flatten the nation’s economic recovery from lockdowns._​​_NAB’s monthly business survey showed a spike in corporate pessimism across the country, with the bank’s national business sentiment index dropping 24 points to -12pts, where a reading below zero reflects more pessimists than optimists._​


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## Smurf1976 (25 January 2022)

Tyre Kicker said:


> Those leveraged to the hilt after purchasing property for insane prices will be feeling a little ill with the genie well and truly out of the bottle.



An issue there is I expect many won't have done the maths and simply don't comprehend what an x% interest rate increase means to them in actual $.


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## divs4ever (25 January 2022)

Smurf1976 said:


> An issue there is I expect many won't have done the maths and simply don't comprehend what an x% interest rate increase means to them in actual $.



 many will not work out ( quickly ) there will be more than one increase  ( and NO , i have no idea how many more after 2 increases  , the system might implode after two  , or might stagger on  for four or six or ten )


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## Smurf1976 (25 January 2022)

In the short term, next few months, we may see some improvement in data from the US. If that's so, well there's fuel for a change in sentiment and a decent rally in stocks.

Note that doesn't mean anything fundamental has changed at all, it's just about the math.

US CPI (annual rate)

January 2021 = 1.4% with previous months similarly low

February 2021 = 1.7% the first uptick albeit not much

March 2021 = 2.6%

April 2021 = 4.2%

May 2021= 5.0%

June 2021 = 5.4%

July 2021 = 5.4%

At the moment we're seeing 7% (December 2021) based on what was an essentially flat baseline of minimal CPI inflation 12 months prior. Once we get to February and especially March onwards though, the annual figure will be from a higher baseline and my expectation is we'll see less than 7% year on year growth from that already higher base. 

Or in other words, the statistics should show a decline at that point and therein lies fuel for the Fed / market to say "look it's working, we only hiked rates once and it's already getting it sorted" and with that comes an assumption that there won't be many rate hikes at all and there comes a major rally in stocks.

Then in due course the reality that the problem hasn't really been fixed ripples through, my expectation being that energy prices will be the key trigger there, and then the real panic starts.

Just my two cents. I could well be completely wrong.


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## qldfrog (25 January 2022)

Smurf1976 said:


> In the short term, next few months, we may see some improvement in data from the US. If that's so, well there's fuel for a change in sentiment and a decent rally in stocks.
> 
> Note that doesn't mean anything fundamental has changed at all, it's just about the math.
> 
> ...



Makes perfect sense and a potential scenarios.never underestimate the to put it lightly low mental sharpness of the huge majority, and this is not even linked to education level:
Covid scams, CC narrative, even covid arrival..months behind and sometimes unable to get big pictures.they will react when too late..and "they" includes many miversand shakers of the larkets, your super and fund managers as well as your smsf etc 
You should always play the masses in shares, not try to,  God forbid, guess or plan their behaviour..just be in front of the Lemmings, ride the wave...


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## over9k (25 January 2022)

Smurf1976 said:


> In the short term, next few months, we may see some improvement in data from the US. If that's so, well there's fuel for a change in sentiment and a decent rally in stocks.
> 
> Note that doesn't mean anything fundamental has changed at all, it's just about the math.
> 
> ...



Yep, yellen's on record forecasting this entire year to be a mess but next year to be back to something more normal, take that for whatever you think it's worth.


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## over9k (25 January 2022)

divs4ever said:


> many will not work out ( quickly ) there will be more than one increase  ( and NO , i have no idea how many more after 2 increases  , the system might implode after two  , or might stagger on  for four or six or ten )



Three 25 basis point hikes have been forecast by the fed itself I believe. The current debate is whether there will be any more than that and/or whether the hikes will be higher.


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## divs4ever (25 January 2022)

unless the market ( and possibly bond market ) have a 'taper tantrum '  ( and ruin the Democrat chances of a mid-term victory ) they ideally need a rate above 2%  ( whether that is 4% , 6% or more  ,time will tell )

 but the government needs to inflate all that easy money away , because no way US tax-payers will tolerate the tax hikes necessary 

 AND the RINO Republicans probably only have war as an answer as well 

but i guess time will tell world war or civil war ??


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## divs4ever (25 January 2022)

Rapid rise in mortgage rates startles homebuyers, who blame inflation fears​








						Rapid rise in mortgage rates startles homebuyers, who blame inflation fears
					

The average 30-year rate was 3.08% in November but shot up to 3.54% by mid-January. The speed is a bit startling, but so was the spike in inflation.



					www.usatoday.com
				




 DYOR

 ( they may be right , or they may be wrong )


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## over9k (26 January 2022)

Take and apply for all kinds of stuff and then you'll understand why we're seeing so much inflation. It's *all *supply side.


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## Knobby22 (26 January 2022)

over9k said:


> View attachment 136538
> 
> 
> View attachment 136539
> ...



Yes, that's my problem. It's mainly supply side.
And any rate hikes in the present fragile environment will bring a recession. So many businesses are in debt due to Covid. Home buyers also. A small rise is likely to send the economy over the cliff.

The inflation feels transitionary to me.


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## sptrawler (26 January 2022)

divs4ever said:


> unless the market ( and possibly bond market ) have a 'taper tantrum '  ( and ruin the Democrat chances of a mid-term victory ) they ideally need a rate above 2%  ( whether that is 4% , 6% or more  ,time will tell )
> 
> but the government needs to inflate all that easy money away , because no way US tax-payers will tolerate the tax hikes necessary
> 
> ...



Capitalism doesn't work without inflation, a business can't operate over the long term, if its income doesn't increase and its input costs keep rising IMO.


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## waterbottle (26 January 2022)

Knobby22 said:


> Yes, that's my problem. It's mainly supply side.
> And any rate hikes in the present fragile environment will bring a recession. So many businesses are in debt due to Covid. Home buyers also. A small rise is likely to send the economy over the cliff.
> 
> The inflation feels transitionary to me.




Agreed. Supply side problems as employees have died or production shut down due to restrictions/lockdowns. 
Now we're adding higher costs of debt to the mix? That will only exacerbate the problem....

If the issue is supply side, then what credible solutions do they have?


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## over9k (26 January 2022)

Knobby22 said:


> Yes, that's my problem. It's mainly supply side.
> And any rate hikes in the present fragile environment will bring a recession. So many businesses are in debt due to Covid. Home buyers also. A small rise is likely to send the economy over the cliff.
> 
> The inflation feels transitionary to me.





waterbottle said:


> Agreed. Supply side problems as employees have died or production shut down due to restrictions/lockdowns.
> Now we're adding higher costs of debt to the mix? That will only exacerbate the problem....
> 
> If the issue is supply side, then what credible solutions do they have?



Hence me saying stagflation is coming


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## waterbottle (26 January 2022)

P


over9k said:


> Hence me saying stagflation is coming



It's possible. Do we have the right components though? 
Unemployment is low, growth is up. Sure, that may reverse if interest rates increase but that would be a reason for reserve banks not to increase them.


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## waterbottle (26 January 2022)

Just to add, PBOC has been reducing rates with plans for further policy easing, despite being exposed to the same inflationary pressures as the US


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## over9k (26 January 2022)

waterbottle said:


> P
> 
> It's possible. Do we have the right components though?
> Unemployment is low, growth is up. Sure, that may reverse if interest rates increase but that would be a reason for reserve banks not to increase them.



Demographics, debt.


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## waterbottle (26 January 2022)

over9k said:


> Demographics, debt.



Demographics is inevitable and being addressed via automation (if you're referring to its impact on production). 
Debt is also inevitable. Zero debt is a pipe dream.


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## divs4ever (26 January 2022)

automation brings it's own issues ,(try to explain to your lender or lessor ) that you want to cut back on the machines/payments during the tough cycles , ( sadly it is MUCH easier to lose jobs )


sptrawler said:


> Capitalism doesn't work without inflation, a business can't operate over the long term, if its income doesn't increase and its input costs keep rising IMO.




 i disagree  capitalism ( although they call it entrepreneurial spirit ) works fine in such times  , productively is increased , costs lowered , new markets and strategies  found , it sorts the ambitious and intelligent  , from the rest

 unfortunately  currently capitalism is ham-strung, red-taped and crippled  , and incentive has been sucked from the workforce  ( which IMO makes it a great time to be retired  .. or a 'rag and bone man ' )

 BTW all that automation  is removing CONSUMERS from the economy 

 it is the Super investments propping up the markets and capital investments


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## sptrawler (26 January 2022)

divs4ever said:


> automation brings it's own issues ,(try to explain to your lender or lessor ) that you want to cut back on the machines/payments during the tough cycles , ( sadly it is MUCH easier to lose jobs )
> 
> 
> i disagree  capitalism ( although they call it entrepreneurial spirit ) works fine in such times  , productively is increased , costs lowered , new markets and strategies  found , it sorts the ambitious and intelligent  , from the rest



What I was meaning by the statement was, a lot of the inputs into a business can't be controlled they are regulatory or influenced by outside forces e.g rates, rents, electricity, insurance, shipping costs, port handling charges, increased price of the product from the source.

I would assume those costs continually rise ( I know my rates, rego's, insurance etc have), a point must be reached where those costs erode a businesses margins to the point they either have to pass on those costs or go broke.

If a business buys in a product to sell and can't sell it for enough profit to cover their outgoings they will go broke eventually, so in reality the price of that product must go up as a function of increased costs, or the system fails.

Well that's my working out, the capitalist system we in Australia work in, whereby the private sector provide the countries trade and industries and the Govt provides services, unless the private sector can make money the system fails.

Which is why the Govt had to pour so much money into jobkeeper, otherwise there wouldn't be any goods available, when shoppers came out to shop, because the businesses wouldn't have been able to pay their suppliers and it would have imploded.

So really unless you can stop the price of statutory costs, energy costs, insurance costs etc rising, inflation is a naturally occurring event in the capitalist system.
I we had a socialist system, where the Govt owned everything, that's different. The Govt can just regulate the prices and take the loss into consolidated revenue, but that ends up with a dilemma when the taxes have to be so high to cover the loses, there is no point in striving to get ahead because you taxes become too onerous. 
Just my thoughts.


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## Smurf1976 (26 January 2022)

sptrawler said:


> So really unless you can stop the price of statutory costs, energy costs, insurance costs etc rising, inflation is a naturally occurring event in the capitalist system.



Agree with the rest but it could be argued that the existence of central banks with their tendency to debase the currency is not something that naturally occurs in a capitalist system.

As a case in point, in a true free market interest rates would go wherever the market sends them. They'd never be "announced" and certainly not by someone appointed by government.


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## sptrawler (26 January 2022)

Smurf1976 said:


> Agree with the rest but it could be argued that the existence of central banks with their tendency to debase the currency is not something that naturally occurs in a capitalist system.
> 
> As a case in point, in a true free market interest rates would go wherever the market sends them. They'd never be "announced" and certainly not by someone appointed by government.



That's true but we don't live in a true capitalist system, we actually have a hybrid system which works extremely well and why we in Australia enjoy such an affluent lifestyle.
In a true capitalist system, the Govt wouldn't be involved in providing services, services would be a private sector user pays system, rather than a system that is taxpayer subsidised.
Unfortunately many don't appreciate how well our system works IMO.
The central bank has to debase the system to try and maintain relitivity with our trading partners as far as I know. Which became a huge problem in the GFC, when the U.S used its advantage as the reserve currency, to make its product cheaper than currency linked competitors, well that's what I read into it.


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## divs4ever (26 January 2022)

sptrawler said:


> What I was meaning by the statement was, a lot of the inputs into a business can't be controlled they are regulatory or influenced by outside forces e.g rates, rents, electricity, insurance, shipping costs, port handling charges, increased price of the product from the source.
> 
> I would assume those costs continually rise ( I know my rates, rego's, insurance etc have), a point must be reached where those costs erode a businesses margins to the point they either have to pass on those costs or go broke.
> 
> ...



 yes many of those cost rises are indexed ( plus the GST shell game )

 HOWEVER an adaptable business  will find ways to cope ( which may or may not please the government ) , and yes passing on costs is always an ( unpleasant ) option , you would rather produce more ( IF you can be sure of profitable sales )

 the Socialist system ( notice the capital 'S' ) is coming  with all it's flaws and repercussions  , prepare for oligarchs and cottage ( probably illegal ) industries and a super-bloated bureaucracy 

 option B. is close ( or sell ) the business  while you can without having crippling debt  , and plan your next step  ( maybe migrate , maybe retire while you still have some Super , maybe become a professional student  .. Leftists adore them )

remember if the government could do a good job running a business , it would still own CBA , TLS , CSL ,AZJ., MPL  , Australia Post ,to name a few and  have a very nice regular income ( so it would need to raise less in taxes ) you don't have to guess here , we have a track record


----------



## sptrawler (26 January 2022)

Absolutely @divs4ever the system which has served Australia so well, can only cope with so much, eventually the point is reached where the few who contribute are overwhelmed by those that don't.
The funny thing is, those that contribute say little, those that don't complain endlessly.
As you say the socialist system will eventually succeed and then there will be happiness, everyone will be equal as is the case in China and the USSR, I mean Russia. 🤣


----------



## divs4ever (27 January 2022)

actually North Korea was springing to mind , remember there will be Cancel Culture as well so only beautiful people will be allowed to live in the cities ( out to the sticks with you when you are a little old  and not connected enough for cosmetic surgery )

 i do NOT see equal 'as in Cuba '  after all we are  already over-spending in fancy war machines , so no pretense of self-sufficiency 

 China will still want entrepreneurs they plan to expand to the Moon and beyond


----------



## mullokintyre (27 January 2022)

last night the Fed fessed up and admitted that inflation is " slightly worse  " than expected, though still transitory.
So now they expect a rate rise in March.
From Kitco News



> (Kitco News) Federal Reserve Chair Jerome Poll described the current inflation situation as "slightly worse" than in December, stating that there is …. Without hurting the labor market.
> "There's quite a bit of room to raise interests without threatening the labor market. This is by so many measures a historically tight labor market — record levels of job openings, quits, wages are moving up at the highest pace they have in decades," Powell told reporters.
> All eyes were on the Fed chair Wednesday afternoon after the U.S. central bank held rates steady but singled a rate hike in March.
> Powell clarified the Fed's thinking around the March rate hike, stating: "The committee is of the mind to raise the federal funds rate at the March meeting."
> In response to Powell's message, gold plunged more than $35, with February Comex gold futures last trading at $1,815.70, down 2% on the day. The U.S. stock market also reversed gains following Powell's press conference, with the Dow falling 0.9%, the S&P 500 down 0.8%, and the Nasdaq dropping 0.6%.



So the markets response was to drop everything and run to the USD. 
A fiat currency that has been severely  devalued by  QE and inflation.
Makes so much sense.
Mick


----------



## waterbottle (27 January 2022)

mullokintyre said:


> last night the Fed fessed up and admitted that inflation is " slightly worse  " than expected, though still transitory.
> So now they expect a rate rise in March.
> From Kitco News
> 
> ...




The flight to USD is transitory


----------



## sptrawler (27 January 2022)

Someone knows something.








						Australia central bank to scrap QE on Feb. 1, wait with rate hikes till November: Reuters poll
					

Australia's central bank will end to its bond-buying programme on Tuesday, but is expected to wait till this November before it responds to higher inflation with its first interest rate rise in over a decade, a Reuters poll showed.  While Governor Philip Lowe was suggesting as recently as last...




					au.news.yahoo.com


----------



## over9k (27 January 2022)

But I thought it was going to be transitory?


----------



## divs4ever (27 January 2022)

mullokintyre said:


> last night the Fed fessed up and admitted that inflation is " slightly worse  " than expected, though still transitory.
> So now they expect a rate rise in March.
> From Kitco News
> 
> ...



 to a major extent that is to pay down debt , because a lot of it is denoted in US Dollars ( including a slab of Aussie Bank debt )

 yes it makes sense IF you have a large amount of debt , not so much sense if you are low debt ( or debt in the local currency ) and have no intention of buying US assets or US stocks 

 HOWEVER it MIGHT signal a genuine crash or credit crunch coming ( because similar happened in the GFC and some big crashes before that )

 now what i haven't seen ( evidence of ) so far ,is a rush into US Treasury Bonds ( by investors large and small ) ( which looks equally nuts to me at current rates )


----------



## over9k (28 January 2022)

Flowers hey? Not tulips?


----------



## waterbottle (28 January 2022)

over9k said:


> View attachment 136641
> 
> 
> Flowers hey? Not tulips?




BTC already down 50% from all time highs.

Meanwhile, jaw-boning from the Fed has seen a 15% drop from ATHs on the NASDAQ....

Then there's this guy - https://www.cnbc.com/2022/01/26/bil...nt-sell-off-becomes-a-top-20-shareholder.html - who drops a cool $1 billion on NFLX. Same guy who bought the dip in march 2020....


----------



## qldfrog (28 January 2022)

On inflation
"
COVID-19 stimulus fuels US growth​Fourth-quarter GDP in the US showed growth of 6.9 per cent, which was mostly attributed to businesses replenishing stock to meet strong demand for goods.

Annually the US economy grew 5.7 per cent, which is the strongest lift since 1984. It followed the government providing nearly $US6 trillion in pandemic relief."
Full article there.https://www.abc.net.au/news/2022-01-28/markets-wall-street-dow-jones-asx/100787008

Sure ,this is their ABC so can not expect much but if inflation is at 7% annually and gdp growth at 5.7%, does not this mean a going backward move?
My business sells $100 last year, i sell $107 this year but my costs raised $7..
Did my business grow?


----------



## divs4ever (28 January 2022)

qldfrog said:


> On inflation
> "
> COVID-19 stimulus fuels US growth​Fourth-quarter GDP in the US showed growth of 6.9 per cent, which was mostly attributed to businesses replenishing stock to meet strong demand for goods.
> 
> ...



 i can't tell you any more in the 2 + 2 = 5 world  maybe you will when when the total is 6  ( 2 +1+ 1 tax )


----------



## qldfrog (28 January 2022)

Th


divs4ever said:


> i can't tell you any more in the 2 + 2 = 5 world  maybe you will when when the total is 6  ( 2 +1+ 1 tax )



Thanks for the feds all over the world, any extra tax is part of GDP


----------



## divs4ever (28 January 2022)

yes i HAD noticed that , that is why i do more 'eyeball surveys ' and use that as an important indicator


----------



## over9k (28 January 2022)

waterbottle said:


> BTC already down 50% from all time highs.
> 
> Meanwhile, jaw-boning from the Fed has seen a 15% drop from ATHs on the NASDAQ....
> 
> Then there's this guy - https://www.cnbc.com/2022/01/26/bil...nt-sell-off-becomes-a-top-20-shareholder.html - who drops a cool $1 billion on NFLX. Same guy who bought the dip in march 2020....



He's also calling for a 50 basis point rise at the next meeting. He did something similiar with the first lockdowns and credit spreads. He basically bets on the powers that be making realisations or actions too late and thus having to overreact (ounce of prevention vs pound of cure and all of that). 

Dude's smart. 


I'd be willing to bet a very significant sum of money he has some kind of position betting on a 50 basis point rise.


----------



## divs4ever (28 January 2022)

over9k said:


> He's also calling for a 50 basis point rise at the next meeting. He did something similiar with the first lockdowns and credit spreads. He basically bets on the powers that be making realisations or actions too late and thus having to overreact (ounce of prevention vs pound of cure and all of that).
> 
> Dude's smart.
> 
> ...



 cynic  ( that does NOT mean i disagree  , but absolutely not betting against you )


----------



## JohnDe (30 January 2022)

Can a company that significantly improves its productivity reduce the effects of inflation? Of course it can, and in an industry of similarity it will thrive while others struggle.  



> ducati916​The issue was whether 'productivity' could ameliorate the effects of inflation.
> 
> The numbers clearly indicate that TSLA currently cannot.




_Last year, Tesla’s Fremont Factory averaged a weekly production pace of 8,550 vehicles. That’s about 1,221 cars per day, 51 cars per hour, or about .85 cars per minute. However you break it down, the Fremont Factory’s manufacturing prowess showed its domination in 2021, as it was the most productive automotive factory in the United States in 2021, outpacing Toyota, BMW, and Ford factories that have long created the most robust figures of car production in previous decades.

While Tesla has only one operational U.S. plant as Gigafactory Texas nears production soon, its North American customer base has been accepting cars from the Northern California plant. However, this one plant has managed to avoid heavy delivery delays due to bottlenecks in the supply chain and parts shortages and become the most proactive American automotive manufacturing facility in 2021.

Most impressively, Tesla has continued to expand its yearly production capacity as a company. Last year, it was mostly due to Gigafactory Shanghai’s massive production figures, which accounted for a majority of vehicle deliveries as it is Tesla’s main export hub to the extremely competitive European market. Tesla managed 936,172 deliveries in 2021, a 47 percent increase from a year prior.
More here - Tesla discussion_









						Tesla's Fremont Factory was the most productive auto factory in the U.S. in 2021
					

New data from Bloomberg states that Tesla’s Fremont Factory in Northern California was the most-productive automotive plant in the U.S., outpacing 70 other plants in the country. Last year, Tesla’s Fremont Factory averaged a weekly production pace of 8,550 vehicles. That’s about 1,221 cars per...




					www.teslarati.com


----------



## sptrawler (30 January 2022)

JohnDe said:


> Can a company that significantly improves its productivity reduce the effects of inflation? Of course it can, and in an industry of similarity it will thrive while others struggle.



Absolutely, I was down the corner shop a Vietnamese guy runs it, he turns up 4.30 a.m to make sausage rolls and pies, that he doesn't run through the till. 
When his wife comes in after taking the kids to school, he goes to the industrial area to buy his fruit and veggies that he sells in the shop, lovely bloke I was chatting with him the other day he says everything is going up.
He closes the shop at 9.00p.m, I told him his productivity will improve when his kids grow up and help out, his eyes rolled back in his head. 😂


----------



## mullokintyre (1 February 2022)

From Todays OZ


> The Reserve Bank at its first board meeting of the year has held rates steady at 0.1 per cent and declared an end to its $350bn bond-buying stimulus program.
> In a statement accompanying the widely anticipated decisions, RBA governor Philip Lowe said underlying inflation was now expected to climb from 2.6 per cent to 3.25 per cent “in coming quarters”.
> 
> Despite the materially upgraded inflation outlook – the central bank in November forecast core inflation would only be 2.25 per cent by the end of the year – Dr Lowe gave no firm sign of a rate hike in the second half of this year, instead reiterating that the RBA board “prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve”.



So what will that do to the price of Bonds, and how much more evidence does he want before raising rates?
Maybe he has a house to sell.
I am glad that the   rates talk is on the back burner again, as I am trying to sell a house in Darwin, and  one of my kids trying to sell a house in Melbourne.
Mick


----------



## InsvestoBoy (1 February 2022)

mullokintyre said:


> From Todays OZ
> 
> So what will that do to the price of Bonds




As usual, exactly the opposite of what everyone (even the RBA) says QE/bond buying does.

Bonds fell quite a lot since the start of QE (which is according to the RBA supposed to increase bond prices/decrease yields).

Immediately after the news that RBA was ending QE, bond prices shot up (yields fell).

(speaking as someone who holds 25% of their net worth in long duration Government bonds and tracks their pricing closely across the yield curve)


----------



## mullokintyre (1 February 2022)

InsvestoBoy said:


> As usual, exactly the opposite of what everyone (even the RBA) says QE/bond buying does.
> 
> Bonds fell quite a lot since the start of QE (which is according to the RBA supposed to increase bond prices/decrease yields).
> 
> ...



Great, seeing as you track their pricing closely, perhaps you could explain this small anomaly.
When the announcement came out that the RBAb was going into QE according to ABC News


> It wants the whole structure of interest rates in Australia to be lower, to make it cheaper for governments, businesses and households to borrow and invest, and to keep the value of Australia's dollar down, to support economic growth.
> 
> It plans to do that by buying $100 billion of government bonds over the next six months.
> 
> Specifically, it will focus on buying government bonds with maturities of around "five to 10 years," but it may also buy bonds outside that time range, depending on market conditions.



So when I look the yield on 10 year bonds over the past year, according to Trading economics
The RBA announcement was either on or just prior to November 4th 2020.
If you look at the chart, it seems that the yield did indeed go up.


Mick


----------



## Value Collector (1 February 2022)

sptrawler said:


> What I was meaning by the statement was, a lot of the inputs into a business can't be controlled they are regulatory or influenced by outside forces e.g rates, rents, electricity, insurance, shipping costs, port handling charges, increased price of the product from the source.
> 
> I would assume those costs continually rise ( I know my rates, rego's, insurance etc have), a point must be reached where those costs erode a businesses margins to the point they either have to pass on those costs or go broke.
> 
> ...



But those rising costs are inflation, a business will do just fine if there were no inflation and there fire all their costs stayed the same.

But of course if your costs are rising due to inflation, then you will need to inflate your own prices to maintain your profitability.

A worse scenario though is the deflation of the currency, eg prices dropping while there is also less cash circulating, and those with cash won’t spend or invest because they believe in a few months prices will be even lower.


----------



## Value Collector (1 February 2022)

mullokintyre said:


> From Todays OZ
> 
> So what will that do to the price of Bonds, and how much more evidence does he want before raising rates?
> Maybe he has a house to sell.
> ...



What it means is that bond prices will start to drop, and so the actual interest rates on those bonds will rise.

There are two ways to raise interest rates, 1st way is to change the actual interest rate written on the bond, the 2nd way is to change the price the bond sells for.

For example, the government can offer a 10 year $1000 bond with a 10% interest rate (coupon rate), on it but if the market only wants to pay the government $500 for it, then the actual interest rate is much higher than the 10% written on the bond.

So if the RBA stops buying bonds, there will be down ward pressure on bond prices, which means actual interest rates earned on the bonds will rise, even though they are not changing the states interest rate.

Think of it like them taking their foot off the accelerator, but not quite stepping on the brake yet.


----------



## InsvestoBoy (1 February 2022)

mullokintyre said:


> Great, seeing as you track their pricing closely, perhaps you could explain this small anomaly.




The explanation is both simply and extremely complicated.

Simply put, Central Banks and modern "Economists" do not understand the economy or how the monetary system functions at all. 

If you want to dive further I suggest https://www.macrovoices.com/aia/321...eaturing-alhambra-partners-cio-jeffrey-snider and https://alhambrapartners.com/commentaryanalysis/ and all the Making Sense episodes at https://www.youtube.com/channel/UCp8Xi-sPTL9VyZpHTPfLA-g/videos


----------



## mullokintyre (1 February 2022)

Well, I was hoping for the simple part, as the data points I put up were quite simple, and showed that post  announcement of QE, the yields gave a damn good impression of going up, which is the opposite of what you posted (without any supporting data I might add  ).
Mick


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## InsvestoBoy (1 February 2022)

mullokintyre said:


> Well, I was hoping for the simple part, as the data points I put up were quite simple, and showed that post  announcement of QE, the yields gave a damn good impression of going up, which is the opposite of what you posted (without any supporting data I might add  ).
> Mick




um no that is literally what I said. Read it again and make sure you know the difference between bond price and bond yield.



InsvestoBoy said:


> As usual, exactly the opposite of what everyone (even the RBA) says QE/bond buying does.
> 
> Bonds fell quite a lot since the start of QE (which is according to the RBA supposed to increase bond prices/decrease yields).
> 
> ...


----------



## mullokintyre (1 February 2022)

It would seem we are arguing the same point.
Mick


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## over9k (2 February 2022)

cross-post:

Jobs report in, is awful, futures flipped from +0.6 to -0.6, more no **** sherlock analysis:




As I keep saying, we've had our inflation, now here's your stagnation.

Hence why we now get statements from the fed like this:




If that doesn't tell you firstly that A: they're absolutely bricking it and B: they're going to err on the side of hot inflation than high unemployment, nothing will.


----------



## Value Collector (2 February 2022)

A good example of actual interest rates being different from stated interest rates are what they call “Zero Coupon bonds”.

A zero coupon bond has a stated interest rate of 0%, but they always sell at a discount to its face value, meaning the owner will make a capital gain when the bond is finally paid at maturity, rather than monthly interest.

For example a 10 year 0% interest $1000 bond might sell in to the market for $500, when the bond matures in 10 years the owner gets paid the full $1000 face value, even though they only paid $500 for the bond upfront, meaning their actual interest rate was a 7% compounded return.

The closer the bond gets to maturity the closer the market price moves towards its face value, so you don’t have to wait the full 10years to earn a profit.

—————————

In recent times reserve banks have been both lowering rates, and buying bonds to support their prices which lowers yield, their first step is to reduce the price support, then they will start to raise face value interest rates.


----------



## over9k (2 February 2022)

Oh and just in case anyone's still unclear on how to profit from inflation, just think about what actually drives inflation:


----------



## Smurf1976 (3 February 2022)

over9k said:


> Oh and just in case anyone's still unclear on how to profit from inflation, just think about what actually drives inflation:



On a directly related subject, household energy bills to rise 54% in the UK from April:



			https://www.bbc.com/news/live/uk-60236456
		


For those on lower incomes who already choose between heating or eating, it's all going to be rather miserable.

For everyone else well more money spent on energy means a corresponding reduction in spending on discretionary things and/or investments with the resulting flow on effects economically.

Here in Australia well I wouldn't expect to see a 54% jump in one hit but there's definitely cost pressure in the industry. The LNG netback price is presently $39.11 / GJ versus domestic market prices between $9.52 and $11.25 depending on state. Given the increasing linkage of the Australian market to international markets, that huge gap won't persist - either international prices are coming down or Australian market prices are going up rather a lot.


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## divs4ever (3 February 2022)

well i hold( held ) both SKI and AST  ( both take-over victims  ) i have held ORG  in the past  but would really need a Leninist Purge  before i would even think about crunching the numbers again  , and AGL is on my AVOID list , leaving APA on the watch-list  but IMO  over-priced 

 now i hold BPT ( 'free-carried')  and WPL   , but don't expect  a big gain ( apart from WPL getting those BHP assets  )

 now MAYBE GTK  ( i have a low-ball top-up order in the market ) and HSN  ( both ' free-carried' ) might get a boost  ( provide services to utility companies  , and others )

 but currently NZ   is my main exposure to utility companies  ( i hold CEN , GNE , MCY , and MEZ )

 now food RETAILERS ( since they exert immense  pressure on manufacturers/producers/processors ) might be one sector  ( but don't neglect pressure from the governments , if inflation really gets going   ) 

 BTW keep an eye on the Aussie Dollar   a weak ( local ) dollar  makes SOME producers more profitable when they export


----------



## divs4ever (3 February 2022)

Soaring Energy Prices Fuel Mayhem For The Metals Industry​








						Soaring Energy Prices Fuel Mayhem For The Metals Industry | OilPrice.com
					

High energy prices are beginning to take a heavy toll on power-hungry industries such as aluminum smelting, sending prices for this crucial metal up




					oilprice.com
				




 DYOR


----------



## noirua (3 February 2022)

Turkey's inflation hits nearly 50%, highest in two decades
					

Prices of consumer goods spiked 11% from the previous month, according to the Turkish Statistical Institute, higher than analysts' predictions.




					www.cnbc.com
				




Turkey’s central bank has cut interest rates by 500 basis points since September to 14%.


----------



## over9k (3 February 2022)

Smurf1976 said:


> On a directly related subject, household energy bills to rise 54% in the UK from April:
> 
> 
> 
> ...



And this is the other reason why my crypto mine is in tasmania


----------



## divs4ever (3 February 2022)

BOE Hikes Rates as Four Officials Push for 50-Basis-Point Rise









						BOE Hikes Rates as Four Officials Push for 50-Basis-Point Rise By Bloomberg
					

BOE Hikes Rates as Four Officials Push for 50-Basis-Point Rise




					www.investing.com
				




DYOR


----------



## waterbottle (3 February 2022)

divs4ever said:


> BOE Hikes Rates as Four Officials Push for 50-Basis-Point Rise
> 
> 
> 
> ...




BoE leading the way...


----------



## divs4ever (4 February 2022)

i hope we don't  follow ( but there is  every chance we are handcuffed   to the impending train-wreck )


----------



## over9k (4 February 2022)

Australia is actually pretty good when it comes to self sufficiency in raw materials. But this is smurf's wheelhouse so I'll let him answer.


----------



## over9k (4 February 2022)

Aaaand WTI just cracked $90/barrel.


----------



## Smurf1976 (4 February 2022)

over9k said:


> Australia is actually pretty good when it comes to self sufficiency in raw materials. But this is smurf's wheelhouse so I'll let him answer.



The short answer is Australia's a major producer of natural gas but, since the ability exists to export gas that creates a partial linkage of Australian prices to international prices.

If gas is selling for $x internationally then that's going to be a very relevant factor for anyone negotiating a new contract with a producer. Both parties will be very consciously aware that, up to the limit of the capacity of the LNG facilities, they can sell an effectively unlimited amount on the international market at the prevailing price as there's no shortage of buyers.

For that reason the ACCC calculates what they refer to as the netback price. That's not the international market price as such but it seeks to answer the question of how much gas is worth to the LNG producers taking into account the cost of liquefaction in order to be able to ship it. In other words, what's the upper limit they could pay and break even?

Some recent data there:

December 2019 (pre-pandemic) = $6.53 per GJ

July 2020 (pandemic low) = $2.29

April 2021 = $6.44
May 2021 = $7.64
June 2021 = $9.69
July 2021 = $11.74
August 2021 = $14.38
September 2021 = $14.85
October 2021 = $22.18
November 2021 = 39.35
December 2021 = $36.30
January 2022 = $41.24
February 2022 = $39.11

In the short term Australian users are protected by contracts and so on so there's been no real impact thus far but contracts don't run forever. As they come up for renewal, the international pricing situation is going to be a factor in negotiations between gas producers and retailers who sell it to consumers.

How significant is gas?

For some businesses and individuals it's basically irrelevant but for various manufacturing businesses etc it's highly significant and it's also of significance for many households.

Of itself gas won't make or break inflation, I'm not suggesting it will, but but whether it's Australia or the UK (or anywhere else) it's another straw on the proverbial camel's back, it's another thing where there's upwards price pressure. In the UK's case that's now flowing through to consumers whereas in Australia the effects are thus far contained due to existing contracts etc but those don't last forever, the price pressure is there as they come due for renewal.

Price data I've quoted is from the ACCC website.


----------



## Value Collector (4 February 2022)

Smurf1976 said:


> The short answer is Australia's a major producer of natural gas but, since the ability exists to export gas that creates a partial linkage of Australian prices to international prices.
> 
> If gas is selling for $x internationally then that's going to be a very relevant factor for anyone negotiating a new contract with a producer. Both parties will be very consciously aware that, up to the limit of the capacity of the LNG facilities, they can sell an effectively unlimited amount on the international market at the prevailing price as there's no shortage of buyers.
> 
> ...



Also, australia now has a east coast natural gas grid, with all major pipelines being interconnected, so trading gas from any of the production zones into the LNG facilities is possible, there is no stranded gas that local buyers can screw down the price on.


----------



## mullokintyre (4 February 2022)

Fresh from having the BOE announce its second consecutive rate increase since 2004, the ECB have started to join the about face.
From Reuters


> FRANKFURT, Feb 3 (Reuters) - The European Central Bank finally acknowledged mounting inflation risks and even opened the door a crack to an interest rate increase this year, marking a remarkable policy turnaround for one of the world's most dovish central banks.
> 
> The ECB has long argued that high inflation will fall back below its 2% target on its own later this year but a string of record-high readings have challenged a narrative that other central banks abandoned months ago.
> 
> ...



None of them ever admit that they got it wrong, just  change their stance to accomodate the new reality.
Mick


----------



## sptrawler (4 February 2022)

Further to @mullokintyre  post.








						Bank of England raises interest rates to 0.5pc, Meta faces historic market wipeout, ASX higher on late rally
					

Australian shares close in positive territory after a choppy session. Meanwhile, global equity markets tumble as frightened investors digest disappointing updates from major central banks about the outlook for inflation and interest rates.




					www.abc.net.au
				




Bank of England raises interest rates to 0.5pc​


----------



## Garpal Gumnut (4 February 2022)

sptrawler said:


> Further to @mullokintyre  post.
> 
> 
> 
> ...



It’s on.

Our twiddling board will be be next.

gg


----------



## Country Lad (4 February 2022)

Smurf1976 said:


> February 2022 = $39.11




That's a long way from the $1.80/Gj in a gas supply agreement contract I was involved in.  Mind you, that was 2002 when coal seam gas was in its infancy.


----------



## over9k (4 February 2022)

The one thing I'll add is that transporting gas is very, very, very difficult (expensive) so I suspect that will provide some kind of cushion to domestic prices.


----------



## over9k (5 February 2022)

On the topic of energy: 

Just before the vaccines were announced to now. Not a single trade, not a single swing play, nothing:


----------



## over9k (5 February 2022)

It's been well & truly risk-on in response to the news, with crypto in particular running HARD: 




So I'm hoping that these two join back together at some point: 




As you can see there was a beautiful correlation up until the new year, I'd bet on yields rising and then it busted correlation


----------



## over9k (5 February 2022)

over9k said:


> It's been well & truly risk-on in response to the news, with crypto in particular running HARD:
> 
> View attachment 137058
> 
> ...



Ok so I might have been absolutely raging about this for the last month after I dumped 6 figures into it only to see it not only bust correlation but actually move in the opposite direction to the 10 year but shhhh don't tell anyone


----------



## Value Collector (5 February 2022)

Country Lad said:


> That's a long way from the $1.80/Gj in a gas supply agreement contract I was involved in.  Mind you, that was 2002 when coal seam gas was in its infancy.



I remember when Queensland gas was proving up so much gas that they literally could not sell it all because the domestic market couldn’t absorb it, so they started building their own gas fired power stations to convert it to electricity just so they could sell it.

They also were part of the JV that built one of the first LNG facilities.


----------



## over9k (5 February 2022)




----------



## Knobby22 (6 February 2022)

A small amount of inflation supported by growth as appears to be occurring in Australia, and if it translates to wage rises can only be a good thing long term.
Retired people reliant on interest are winners, people with loans getting more cash.

In Europe negative interest rates ending with all the damage related to this, is another good thing.

I know in the US wage rises probably won't occur so harder for them.


----------



## Value Collector (6 February 2022)

Knobby22 said:


> Retired people reliant on interest are winners, people with loans getting more cash.



Not really, inflation and taxes is always likely to cause their principle to take a bigger hit than the interest they receive can offset anyone with investments in fixed dollar amounts should not see inflation as their friend.

The people with the least concern of inflation are the ones with investments where the revenue rises with inflation, and the capital value of the assets goes up with inflation.

even then the capital value increase will cause a tax hit, due to the capital gains tax taxing the rise in value caused by inflation, but atleast that is discounted by 50% if it’s a long term investment, which makes it much better than a cash investment threat stays the same.


----------



## Knobby22 (6 February 2022)

Value Collector said:


> Not really, inflation and taxes is always likely to cause their principle to take a bigger hit than the interest they receive can offset anyone with investments in fixed dollar amounts should not see inflation as their friend.
> 
> The people with the least concern of inflation are the ones with investments where the revenue rises with inflation, and the capital value of the assets goes up with inflation.
> 
> even then the capital value increase will cause a tax hit, due to the capital gains tax taxing the rise in value caused by inflation, but atleast that is discounted by 50% if it’s a long term investment, which makes it much better than a cash investment threat stays the same.



There are a lot of pensioners who may get .5% on their money who may soon get 1%. I know they are financially illiterate but it will make a big difference to them.


----------



## sptrawler (6 February 2022)

Knobby22 said:


> There are a lot of pensioners who may get .5% on their money who may soon get 1%. I know they are financially illiterate but it will make a big difference to them.



You are spot on Knobby, my MIL has always had a term deposit, when the FIL died she asked me for a bit of guidance. I suggested she pull out her $100,000 term deposit in CBA and buy 10,000 CBA shares, well she still has her CBA term deposit many years later.


----------



## Value Collector (6 February 2022)

Knobby22 said:


> There are a lot of pensioners who may get .5% on their money who may soon get 1%. I know they are financially illiterate but it will make a big difference to them.



If inflation rises 1% from 3% to 4%, the buying power of their capital base is reduced by far more than the additional 0.5% of income they will receive.

Especially when that additional 0.5% of income is taxed.

of course they will feel good, because the income numbers will be higher than last year, but over all they are worse off, their $100K or what ever amount now has far less purchasing power, and the additional income didn’t come close to offsetting it’s erosion.


----------



## Knobby22 (6 February 2022)

Value Collector said:


> If inflation rises 1% from 3% to 4%, the buying power of their capital base is reduced by far more than the additional 0.5% of income they will receive.
> 
> Especially when that additional 0.5% of income is taxed.
> 
> of course they will feel good, because the income numbers will be higher than last year, but over all they are worse off, their $100K or what ever amount now has far less purchasing power, and the additional income didn’t come close to offsetting it’s erosion.



However they are on a pension which rises with inflation and they are psychologically incapable of spending their capital.


----------



## sptrawler (6 February 2022)

Knobby22 said:


> However they are on a pension which rises with inflation and they are psychologically incapable of spending their capital.



Again you are spot on Knobby, referring back to the MIL, she qualified for the age pension years ago, but she refuses to apply and now she is 89 years old I don't think she will.
She would rather live on bread and jam than apply for the pension, some people are like that, she manages on $700/fortnight super from the FIL old Gov super and the term deposit.


----------



## qldfrog (6 February 2022)

sptrawler said:


> Again you are spot on Knobby, referring back to the MIL, she qualified for the age pension years ago, but she refuses to apply and now she is 89 years old I don't think she will.
> She would rather live on bread and jam than apply for the pension, some people are like that, she manages on $700/fortnight super from the FIL old Gov super and the term deposit.



Do not expect this attitude to grow...
Australians in general are  becoming a bunch of entitled spoiled brats: media and education to blame as the cause more than governments imho.but honestly, while i might have had that grand attitude 10y ago, i will not now and will suck back any dollar i am " entitled" to.
Covid handling and reactions has been enlightening.


----------



## Value Collector (6 February 2022)

Knobby22 said:


> However they are on a pension which rises with inflation and they are psychologically incapable of spending their capital.



I guess if they are never going to spend their capital, and intend to die with it, then a system higher inflation and interest rates might be good for them because they are technically eating their capital without knowing it, because they are spending the interest which is intended to offset the principle loss.

However, it is not an ideal situation to be in, no one should really be planing to die with money on the table, and you would be better to own assets that have a good chances of being hedges against inflation.

————————
dying with capital left in term deposits on the table is pretty silly for the following reasons.

1, by avoiding spending it you might be missing out on living your best life, and if you really don’t care about it’s capital value, would be better holding it in higher income thing like a share market index and earning 5% franked dividends, because you don’t care about is capital value the market ups and downs shouldn’t bother you

2, if you are leaving it there because you want your kids to inherit it, you are letting your kids inheritance erode in value, while also missing the chance to give them money that might be more valuable earlier in their life, eg giving them money when they are in their 60’s when you die at 90 is not going to help them as much.

3, if it’s insurance for something in the future, inflation eating the capital value might actually mean on the day you need it, the capital value no longer covers what you need.


----------



## over9k (7 February 2022)




----------



## JohnDe (7 February 2022)

If you have time - 

_Inflation, Interest Rates, Retail Sales, Crypto_​_ ARK CEO/CIO, Cathie Wood, weighs in on the workweek drop, the 90s vs. today, inflation, interest rates, and more. As always, she also discusses fiscal policy, monetary policy, the economy, market signals, economic indicators, and innovation._​


----------



## divs4ever (7 February 2022)

Knobby22 said:


> However they are on a pension which rises with inflation and they are psychologically incapable of spending their capital.



 unless things have changed since mum was on a pension  ( there was OFFICIALLY  inflation back then ) , those increases  are based on CPI  which is late and less than the increases  on the cost rises currently  ... a bit like chasing the bread vendor for crumbs 

the indexation of Pension rises  would be bad enough  just being 3 to 6 months after the price rises  , but the CPI  is only a parody of ordinary living cost increases 

 and who can blame them for being cautious , the weather  bureau  can't predict the weather regularly  7 days in advance ( with a super computer )  expecting a pensioner to forecast the day they die ( without resorting to suicide ) is a bit much


----------



## Knobby22 (7 February 2022)

JohnDe said:


> If you have time -
> 
> _Inflation, Interest Rates, Retail Sales, Crypto_​_ ARK CEO/CIO, Cathie Wood, weighs in on the workweek drop, the 90s vs. today, inflation, interest rates, and more. As always, she also discusses fiscal policy, monetary policy, the economy, market signals, economic indicators, and innovation._​




She is excellent,  long watch though.
0.5% rise in interest rates, oil price is should be thought of as a tax, economy is weak so inflation will end quickly. Retail will fall. This was my thinking,  so good to see a professional thinking this (but with better analysis). I just don't believe these inflation pundits. And as a result we will see a big boom is share prices later this year in certain fields.


----------



## mullokintyre (9 February 2022)

From The Australian


> Two-thirds of Australians expect rate hikes in the coming 12 months, and more than one in four believe rates will climb by more than a percentage point, according to a new survey.
> The latest Westpac consumer sentiment report revealed another dip in confidence in February, despite declining Omicron case numbers and talk of unemployment heading to near 50-year lows later this year.
> 
> The bank’s confidence index eased from 102.2 points in January, to 100.8pts in a survey conducted over the week to February 6.
> ...



Perhaps these citizens of OZ read the economic indicators and say what they actually mean to them, rather having an economic/political/financial agenda that so many of the professional players seem to have.
Mick


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## mullokintyre (11 February 2022)

That darn transitory inflation just won't go away.
From theWall Street Journal


> A relentless surge in U.S. inflation reached another four-decade high last month, accelerating to a 7.5% annual rate as strong consumer demand collided with pandemic-related supply disruptions.
> 
> The Labor Department on Thursday said the consumer-price index—which measures what consumers pay for goods and services—in January reached its highest level since February 1982, when compared with the same month a year ago. That put inflation above December’s 7% annual rate and well above the 1.8% annual rate for inflation in 2019 ahead of the pandemic.
> 
> ...



The average US household is now spending $250  more per month on an average basket of items compared to what they spent in 2018/2019 according to the New York Post
Even if the pundits who suggest inflation is only transitory are correct, it will not give back the extra  250 per month these households are paying, and will continue to pay forever, which makes it a boot of a moot point for those doing all the paying.

Mick


----------



## Tyre Kicker (11 February 2022)

But, but … it’s transitory.

Close relative in the US was saying he can’t believe the increase in food and eating out. Has noticed it acutely.

Interesting times ahead.


----------



## over9k (11 February 2022)




----------



## over9k (11 February 2022)

U.S numbers in case anyone's interested:


----------



## CityIndex (11 February 2022)

Despite Australian inflation looking tame relative to the 40-year highs in US, the difference in outlook between the RBA and Federal Reserve could be worth watching

Earlier this morning, Governor Lowe spoke about his willingness to temporarily tolerate inflation above the 3% target, on fears that raising interest rates too soon might hinder employment. Although stating that a rate hike is still possible this year, the RBA will remain patient and watch how local CPI figures develop before making any decisions.

This is in stark contrast to the Federal Reserve who are looking increasingly hawkish after last night’s hot CPI print. Fed President Bullard even added to recent speculation, stating that a 50bps rate hike in March and interest rates at 1% by July are now possible.

All trading carries risk, but it should be interesting to see if this divergence in policy plans results in broader gains for the US Dollar against the Aussie Dollar over the mid-term.


----------



## sptrawler (11 February 2022)

CityIndex said:


> Despite Australian inflation looking tame relative to the 40-year highs in US, the difference in outlook between the RBA and Federal Reserve could be worth watching
> 
> Earlier this morning, Governor Lowe spoke about his willingness to temporarily tolerate inflation above the 3% target, on fears that raising interest rates too soon might hinder employment. Although stating that a rate hike is still possible this year, the RBA will remain patient and watch how local CPI figures develop before making any decisions.
> 
> ...



Maybe the RBA want the AUD in the US60- 70c range, rather than the US70-80c range?


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## qldfrog (11 February 2022)

sptrawler said:


> Maybe the RBA want the AUD in the US60- 70c range, rather than the US70-80c range?



I think the rba will take what it gets.if AUD is at 69c, that is a big jump in inflation here: fuel, meat, importS aka everything consumed but fruit and vegies and local services..which are already going up the roof


----------



## DannyB0000 (11 February 2022)

CityIndex said:


> Despite Australian inflation looking tame relative to the 40-year highs in US, the difference in outlook between the RBA and Federal Reserve could be worth watching
> 
> Earlier this morning, Governor Lowe spoke about his willingness to temporarily tolerate inflation above the 3% target, on fears that raising interest rates too soon might hinder employment. Although stating that a rate hike is still possible this year, the RBA will remain patient and watch how local CPI figures develop before making any decisions.
> 
> ...



The EU central bank is reluctant to raise interest rates as well despite record inflation, 5.1%.  Am not sure what’s wrong with normalising interest rates for a change.


----------



## divs4ever (11 February 2022)

sptrawler said:


> Maybe the RBA want the AUD in the US60- 70c range, rather than the US70-80c range?



that won't take much of a nudge  , but MAYBE  they should attach a safety line first , lest it continue sliding into the 50s  and beyond


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## divs4ever (11 February 2022)

DannyB0000 said:


> The EU central bank is reluctant to raise interest rates as well despite record inflation, 5.1%.  Am not sure what’s wrong with normalising interest rates for a change.



far from normal times  .. so many ( Central ) banks buying bonds  to keep up the appearance that the bond market is invest-able  ( AKA the mug instos will still buy this stuff )


----------



## over9k (11 February 2022)

CityIndex said:


> Despite Australian inflation looking tame relative to the 40-year highs in US, the difference in outlook between the RBA and Federal Reserve could be worth watching
> 
> Earlier this morning, Governor Lowe spoke about his willingness to temporarily tolerate inflation above the 3% target, on fears that raising interest rates too soon might hinder employment. Although stating that a rate hike is still possible this year, the RBA will remain patient and watch how local CPI figures develop before making any decisions.
> 
> ...



Same story in aus as usa: 





They've been telling us they're going to err on the side of too hot inflation than too low unemployment ever since the pandemic began. 

The only question is where the line for overdoing it is.


----------



## over9k (15 February 2022)

Speaking of which, brent crude is now knocking on the door of $97/barrel


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## CityIndex (15 February 2022)

over9k said:


> Speaking of which, brent crude is now knocking on the door of $97/barrel




WTI also began testing $95 today as tensions in Eastern Europe continued to escalate this morning, adding to the speculation of further supply disruptions.

If Russia does move ahead with their invasion of Ukraine as many reports are suggesting, we could see both WTI and Brent Crude test $100 and potentially breakout in this week. However, a more diplomatic approach by the parties involved could cause those supply fears could quickly cool, resulting in oil prices pulling back.

All trading carries risk, but it’ll definitely be worth keeping oil on the watchlist as this story unfolds.


----------



## mullokintyre (16 February 2022)

Damn that persistent inflation!/
Why can't it be transitory like its supposed to?
From Zero Hedge


> January saw US producer prices rise 1.0% MoM (twice the expected 0.5% jump) and is the 21st straight month of MoM rises. This sent prices up 9.7% YoY (record highs and well above the expected +9.1% YoY)...
> 
> 
> 
> ...



OOI prices rising at 1% MOM translate into some larger increases in final prices, so inflation will not be going away any time soon.
And just to add to the misery, 


> *The pipeline for PPI continues to suggest more upside to come as Intermediate demand prices are soaring still...*




There still seems to be plenty of pent up inflationary effects in coming months.

Mick


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## over9k (17 February 2022)

OK NOW THINGS ARE REALLY DIRE


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## mullokintyre (17 February 2022)

From  Todays Australian


> Unemployment was steady at 4.2 per cent in January but hours worked across the country plunged by 9 per cent, as the Omicron wave which triggered severe staff shortages across many industries did not translate into job losses.
> The number of employed Australians lifted by 12,900 to 13,255,000 people, seasonally adjusted figures from the ABS showed.
> Full-time employment was down by 17,000 people, and part-time employment increased by 30,000 people.
> The Reserve Bank expects the jobless rate to reach 3.75 per cent by the end of the year.
> ...



The worry is the hours worked. 
A drop of 9% is significant. It suggests that employers are trying to keep the workers they have, rather than  cutting staff.
Job ads increasing the most in the 25 year history of them keeping them is also a sign that the labour market is still pretty tight.
So long will it be before workers start demanding significant pay rises?
Mick


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## over9k (18 February 2022)

Oh in case anyone is wondering, russia invading ukraine = sanctions = lots of oil supply gets cut off


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## frugal.rock (18 February 2022)

mullokintyre said:


> The worry is the hours worked.



Maybe.
I think the real worry is politicians grandstanding about low unemployment rates without mentioning participation rates creating a false picture.

It's all too common these days for metrics to be redefined so they look better.
"Lies, damn lies, and statistics"

Comparing current unemployment rates to being near all time lows is an absolute farce, as unemployment itself has been redefined.

How can unemployment be so low with job vacancies at highs.... the wool is being pulled over our eyes.

The reality is a lot of people are now unable to work due to being medically or mentally unfit. Then there are those that have retired early, some will re enter the workforce over the coming years, but not the majority, imo.


----------



## JohnDe (18 February 2022)

frugal.rock said:


> The reality is a lot of people are now unable to work due to being medically or mentally unfit.




Yes, it seems like every third person has an issue these days. Everyone complains and whines about everything, and  then wonder why they have mental and health issues.


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## Dona Ferentes (18 February 2022)

JohnDe said:


> Yes, it seems like every third person has an issue these days. Everyone complains and whines about everything, and  then wonder why they have mental and health issues.



Economics 101: _People respond to incentives_


----------



## mullokintyre (18 February 2022)

JohnDe said:


> Yes, it seems like every third person has an issue these days. Everyone complains and whines about everything, and  then wonder why they have mental and health issues.



As someone who professes to drive a Tesla,  I would suggest that you have been less affected  financially as compared to  so many others not so well off as yourself.  
There are people who inhabit the bottom 50% of the the income pile whose lives have been shattered, not so much by the pandemic, but by the plethora of over the top regulations and rules imposed by the elites. And the elites never seem to understand why the subjects are not grateful.
Mick


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## JohnDe (18 February 2022)

mullokintyre said:


> As someone who professes to drive a Tesla,  I would suggest that you have been less affected  financially as compared to  so many others not so well off as yourself.
> There are people who inhabit the bottom 50% of the the income pile whose lives have been shattered, not so much by the pandemic, but by the plethora of over the top regulations and rules imposed by the elites. And the elites never seem to understand why the subjects are not grateful.
> Mick




You Know What They Say, “When You Assume, You Make An …”

You have no idea about my life, other than I "professes to drive a Tesla"

Most of the whining is coming from these pages, from people that 'profess' to be great investors


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## mullokintyre (18 February 2022)

JohnDe said:


> You Know What They Say, “When You Assume, You Make An …”
> 
> You have no idea about my life, other than I "professes to drive a Tesla"
> 
> Most of the whining is coming from these pages, from people that 'profess' to be great investors



You said on this forum that you drive a Tesla, I took your word for it.
You  don't drive a Tesla and live in the bottom half of the income pile.
Mick


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## JohnDe (18 February 2022)

mullokintyre said:


> You said on this forum that you drive a Tesla, I took your word for it.
> You  don't drive a Tesla and live in the bottom half of the income pile.
> Mick




Yes and that was all I said. From that you have assumed my wealth, age, and life circumstances during the period of my time on this planet.

“When You Assume, You Make An …”


----------



## mullokintyre (18 February 2022)

JohnDe said:


> Yes and that was all I said. From that you have assumed my wealth, age, and life circumstances during the period of my time on this planet.
> 
> “When You Assume, You Make An …”



I never mentioned anything about your age or your life circumstances.
I made an assumption on your wealth given you said drive a Tesla.
Given the cost of teslas, I would suggest its a reasonable assumption.
Mick


----------



## JohnDe (18 February 2022)

mullokintyre said:


> I made an assumption on your wealth given you said drive a Tesla.
> 
> Mick




Exactly. "As someone who professes to drive a Tesla,  I would suggest that you have been less affected  financially as compared to  so many others not so well off as yourself."


----------



## eskys (18 February 2022)

JohnDe said:


> Yes, it seems like every third person has an issue these days. Everyone complains and whines about everything, and  then wonder why they have mental and health issues.



Haha, John, what a classic! I'm having mental issues but I'm not worried about inflation. How's that, and how did that work?


----------



## divs4ever (18 February 2022)

eskys said:


> Haha, John, what a classic! I'm having mental issues but I'm not worried about inflation. How's that, and how did that work?



 effective medications , perhaps  

 or maybe you have been so worried previously that you have prepared  soundly  , after all this inflation has been a consequence of the GFC bail-outs ( with no actual remedies  applied ) it was always coming due , eventually


----------



## eskys (18 February 2022)

divs4ever said:


> effective medications , perhaps
> 
> or maybe you have been so worried previously that you have prepared  soundly  , after all this inflation has been a consequence of the GFC bail-outs ( with no actual remedies  applied ) it was always coming due , eventually



Your second sentence hits a note with me, div. I've been prepared for the market to retrace but not inflation..........inflation is the least of my problems....my issues is not having enough faith in the stocks I choose..........too much fear is just as harmful to my mental well being I've discovered.......my mind is willing, but at the same time, it's also playing games with me


----------



## divs4ever (18 February 2022)

i remember the 1970's very well (  i wasn't abusing substances/herbs like many of  my associates back then )

  but the retrace AND inflation  can co-exist  , HOWEVER that is not totally bad for the agile investor  ( between 2011 and 2016  i was having a ball with corporate debt/hybrids  , not actually junk but companies with  higher perceived  risk , many were 'blue chips but NOT the big 4 banks   )


eskys said:


> my issues is not having enough faith in the stocks I choose



 a healthy amount of caution is useful as well   . i NORMALLY prefer to nibble rather than 'back up to truck ' 

 the market  is awash with over-valued/under-performing  stocks  and ALL investing  entails risk , otherwise they wouldn't pay  interest/divs to 'borrow your money '

 finding the balance between greed and fear  is the true art of investing  ( the risk v. reward  ratio )

 if all else fails do what i  , do resort to , .... your trusty calculator  ( SOMETIMES the math is just compelling )


----------



## frugal.rock (18 February 2022)

mullokintyre said:


> And the elites never seem to understand why the subjects are not grateful.


----------



## JohnDe (18 February 2022)

frugal.rock said:


>


----------



## eskys (18 February 2022)

divs4ever said:


> i remember the 1970's very well (  i wasn't abusing substances/herbs like many of  my associates back then )
> 
> but the retrace AND inflation  can co-exist  , HOWEVER that is not totally bad for the agile investor  ( between 2011 and 2016  i was having a ball with corporate debt/hybrids  , not actually junk but companies with  higher perceived  risk , many were 'blue chips but NOT the big 4 banks   )
> 
> ...



There are good opportunites in times of volatility, divs, if we can find the stocks in a tradeable zone for a profit. Takes a lot of resolve and hard work to make it happen, also, not forgetting faith in one's judgement/ assessment of that stock. The most difficult thing for me is how to stay on course and have the faith, and get the most out of it. Was reading Skate's post today; resonates with me but I need to find a solution to have that 'faith' in myself to trade well. (I have somewhat fallen off the bandwagon lately, spent too much time at work on another site)


----------



## frugal.rock (18 February 2022)

I was looking for Blackadder and Baldrick. 
The peasants are revolting, oh, come on, their not that bad...😅


----------



## divs4ever (18 February 2022)

eskys said:


> There are good opportunites in times of volatility, divs, if we can find the stocks in a tradeable zone for a profit. Takes a lot of resolve and hard work to make it happen, also, not forgetting faith in one's judgement/ assessment of that stock. The most difficult thing for me is how to stay on course and have the faith, and get the most out of it. Was reading Skate's post today; resonates with me but I need to find a solution to have that 'faith' in myself to trade well. (I have somewhat fallen off the bandwagon lately, spent too much time at work on another site)



i don't have faith to trade  , but i CAN see opportunities  stock ZYX  has the potential to be a solid company ( maybe even grow a bit )

 IF it GROWS  then i still have enough caution to think about taking SOME money off the table  , that is very different from planning for an exit in a week or month ( whether green or red )


----------



## JohnDe (18 February 2022)

This adds some light on a lot of the issues floating on this thread -


----------



## mullokintyre (18 February 2022)

Not sure if Cathy Wood  will get a guernsey as my go to girl for economic advice.
the ARKK  ETF that she run hit a high of a Tad over 154 bucks US last February, but is back to 68 now.
As an acive fund manger, hre most recent record is not good.
ARKG, her genomiv ETF fund is down from a high of 115 about the same time last Feb, but sits way down at 46 at last nights close.
Goes to show anyone can make money in a bull market, its when things are going the other way that the best players shine.
ARKG, Mick


----------



## divs4ever (18 February 2022)

JohnDe said:


> This adds some light on a lot of the issues floating on this thread -




 to  translate that into redneck ...... jobs are going to disappear 

 the consequence of fewer jobs is less consumption  AND the US is a consumer-driven economy 

i mightn't have a degree in economics  but sometimes i sat next to   a future  triple PH. D ( including Economics ) at high school 

 sorry Cathy you didn't sell me


----------



## JohnDe (18 February 2022)

Just been speaking to one of the prominent 'auctioneers and valuers', said, sadly, business is booming. A lot of businesses have reached the limit, doors are closing, creditors are moving in, equipment is being auctioned off. Pubs, cafe's, fast food shops, even franchises.

What does this mean?

According to some - There is a multi-faced economy; struggling stores can't put prices up as much as they need, unemployed and under-employed can't don't have the buying power. Then you have the other side with people having built up a nice stash of cash over the Covid lockdowns, ready to spend but few opportunities for various reasons including supply shortages. those supply shortages caused by slow production and slow and expensive shipping have not been felt in full yet, again because of Covid limiting buying opportunities and struggling business unable to pass on the full costs.
Soon the cork will be released, ships will be rolling in and unloading, manufacturing will be at full production. There could be an oversupply problem and dampened demand due to low wages.

However, this scenario also opens up a lot of opportunity for the cashed up entrepreneur and young business minded people; take over and modernise.


----------



## divs4ever (18 February 2022)

JohnDe said:


> Soon the cork will be released, ships will be rolling in and unloading, manufacturing will be at full production. There could be an oversupply problem and dampened demand due to low wages.




 that assumes  there will be suitable staff to unload and some to deliver  , it will NOT be as simple as it looks 

 i have already heard of two companies poaching truck drivers


----------



## JohnDe (18 February 2022)

divs4ever said:


> that assumes  there will be suitable staff to unload and some to deliver  , it will NOT be as simple as it looks
> 
> i have already heard of two companies poaching truck drivers




History, since the industrial revolution, shows that problems with production and delivery will be overcome by science and technology. That's Cathy's point, and Elon is one of the many working on solutions.

The cork will pop, it is inevitable. What is not known is whether the champagne cork will be pulled off slowly as required for all good champagnes, or if it will be party pop like a grand prix win.


----------



## divs4ever (18 February 2022)

JohnDe said:


> History, since the industrial revolution, shows that problems with production and delivery will be overcome by science and technology. That's Cathy's point, and Elon is one of the many working on solutions.
> 
> The cork will pop, it is inevitable. What is not known is whether the champagne cork will be pulled off slowly as required for all good champagnes, or if it will be party pop like a grand prix win.



 i disagree with history this time 

 the science is becoming increasingly flawed and rushed  , and the technology less based in reality


----------



## waterbottle (18 February 2022)

divs4ever said:


> i disagree with history this time
> 
> the science is becoming increasingly flawed and rushed  , and the technology less based in reality




I don't know how you can claim that when for the past two years, most white collar industries have been able to maintain productivity by working from home....


----------



## sptrawler (18 February 2022)

waterbottle said:


> I don't know how you can claim that when for the past two years, most white collar industries have been able to maintain productivity by working from home....



Absolutely and university are increasing throughput, by outsourcing assignments, why do people think productivity isn't increasing?
The reality is the standard is the inverse function, but hey don't bring reality, into discussion about lifestyle choices.
How many blocks of flats built in the 1960's are falling over from structural problems?


----------



## divs4ever (18 February 2022)

have spent a lot of time in service industries and 'blue collar '  jobs  ( you know the guys that get screamed at when office workers  and technology 'experts ' stuff up  ) my views will differ markedly from yours , by the sounds of it 

 about my only previous jobs that would have  been affected  by the virus debacle   would have been as  school cleaner and office/bank cleaner  , all the rest involved real people  sweating in the workplace/ work-site  ( because there ain't no air-conditioning )


----------



## waterbottle (18 February 2022)

JohnDe said:


> This adds some light on a lot of the issues floating on this thread -





Interesting video. I think that there are still people out there who would claim that the current inflationary environment is transitory.

And I'd be lining up to agree with the them (depending on the day of the week).

I think the situation is alot more complicated then what is currently being discussed in public media. I say this because many who argue that inflation is truly here to stay point to statistics that compare humanity post-covid to humanity pre-COVID...

Yes. Post-COVID and pre-COVID. I use those terms as 2019-202x have been a defining moment in human history, regardless of whether or not you believe the politics /science /podcasts. The facts are that this period coincided with socio-economic upheaval that probably has not yet ended and will likely have implications for years to come. It's akin to 9/11 (the only event I could remember with a similar societal impact) and would be close to a few international wars.

How then, could you possibly compare post-COVID economics to the Pre-COVID era?

I personally don't think you can. Nor do the politicians, despite how much they are keen to use the nostalgia of yesteryear to placate people.

The reality is there has been a fundamental shift in how modern human society functions. Credit is easily accessible. Work can be done remotely. Density limits (whether legislated or not) will apply as human behaviour has changed. Healthy systems have been permanently disrupted (flu waves + covid waves). These are fundamental shifts, and so it's natural to expect a shift in the economic response.

Monetary easing to date has been extremely accommodative. The past 2 years have shown us that traditional tech, fintech, green energy and healthcare have managed to attract money. Because they have enabled the economy to continue function during a period where modern society was disrupted.

And now we face an economic test just as we (possibly) emerge out of the pandemic. The question will be whether or not we will return to regular society ala 2019 or we continue on some similar trajectory that was ignited during 2020. 

Only time will tell, but if the past 2 years have taught us anything it's that there is no straight line to walking along. If anything it will turbulent and volatile. And if so, how could anyone NOT expect inflation/deflation.


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## sptrawler (18 February 2022)

divs4ever said:


> have spent a lot of time in service industries and 'blue collar '  jobs  ( you know the guys that get screamed at when office workers  and technology 'experts ' stuff up  ) my views will differ markedly from yours , by the sounds of it



It isn't always the dude working at home, that is wearing the backlash for producing something substandard, there is no point employing people when you are responsible for their output but have no control over their input.
I've been in the position where you have to give autonomy to workers in critical industries, I've got to say, on most occasions the trust was misplaced.
Unfortunately Australia has become mostly a country of people having a million reasons why the couldn't do something, rather than as it was, where they just found a way to do it. 
The problem in Australia is no one gives a $hit anymore, the media tell everyone they are a losers if they haven't got a property in Sydney/Melbourne, the breakfast guy on the radio on $80k a month is telling all the wage slaves how Flcked life is, everyone is told to blame someone else for their predicament. Tradies on $180k a year committing suicide I mean what are we doing to people?
From this conditioning, people are expected to be upbeat and perform well on the treadmill?
Australia has gone mad IMO.
I don't know what is happening, but the media needs to stop this down beat depressing coverage of everything, it isn't healthy. 
The only highlight in my life, is when one of the flckers is sacked or has to retire, from depression from  regurgitating the shyte.
My rant for the year, hopefully. If anyone disagrees feel free to engage.


----------



## waterbottle (18 February 2022)

divs4ever said:


> have spent a lot of time in service industries and 'blue collar '  jobs  ( you know the guys that get screamed at when office workers  and technology 'experts ' stuff up  ) my views will differ markedly from yours , by the sounds of it
> 
> about my only previous jobs that would have  been affected  by the virus debacle   would have been as  school cleaner and office/bank cleaner  , all the rest involved real people  sweating in the workplace/ work-site  ( because there ain't no air-conditioning )




I can't speak to your experience and I haven't walked in your shoes so I'm not going to pretend I know what you know.

But the reality is - covid disrupted all sectors of society. Whether that was virus related or political is arguable but that isn't the point.

It's existence meant that all industries in one way or another were affected. Some service industries managed to survive. Others such as hospitality died out or were forced to innovate and reimagine their business model. Others still such as primary industries, were still affected by employees calling in sick (whether directly involved in a work site or indirectly involved in the manufacture of upstream goods).

All industries were affected, but those who managed to innovate and work around it survived. And the reality is those who were able to commandeer technology managed survive and thrive. Those that couldn't either went bankrupt or were dependent on government stimulus.


----------



## waterbottle (18 February 2022)

[QUOTE="sptrawler, post: 1161608, member:] 
The problem in Australia is no one gives a $hit anymore, the media tell everyone they are a losers if they haven't got a property in Sydney/Melbourne, the breakfast guy on the radio on $80k a month is telling all the wage slaves how Flcked life is, everyone is told to blame someone else for their predicament. Tradies on $180k a year committing suicide I mean what are we doing to people?
From this conditioning, people are expected to be upbeat and perform well on the treadmill?
Australia has gone mad IMO.
I don't know what is happening, but the media needs to stop this down beat depressing coverage of everything, it isn't healthy. 
The only highlight in my life, is when one of the flckers is sacked or has to retire, from depression from  regurgitating the shyte.
My rant for the year, hopefully. If anyone disagrees feel free to engage.
[/QUOTE]


This is a problem with all of Western society, unfortunately.


----------



## sptrawler (18 February 2022)

waterbottle said:


> This is a problem with all of Western society, unfortunately.



It is going to end western society IMO, discontent leads to people being disenfranchised and looking elsewhere for options, the problem is where the options lie everyone is fleeing in boats to come here.
The Australian media has a lot to answer for, in making a truly wonderful country where people can achieve reward for endeavour, into a country where everyone feels they are failing.
It is so sad, when I remember what I left behind as an 8year old, in the U.K.


----------



## frugal.rock (18 February 2022)

sptrawler said:


> The Australian media has a lot to answer for, in making a truly wonderful country where people can achieve reward for endeavour, into a country where everyone feels they are failing.



Them and the politicians.
I first noticed political negativity from that worm Bill Shorten, however I believe it may have started before him. Perhaps Abbott? However, Shorten took it to new levels I believe.

Anyway, saw this, which answered a few questions I've had in my mind. I had noticed money leaving funds over the last few months and going to EUro's.
"Inflation Risks New Era of Currency Tensions For Central Banks"





__





						Bloomberg - Are you a robot?
					





					www.bloomberg.com


----------



## divs4ever (18 February 2022)

sptrawler said:


> It isn't always the dude working at home, that is wearing the backlash for producing something substandard, there is no point employing people when you are responsible for their output but have no control over their input.
> I've been in the position where you have to give autonomy to workers in critical industries, I've got to say, on most occasions the trust was misplaced.
> Unfortunately Australia has become mostly a country of people having a million reasons why the couldn't do something, rather than as it was, where they just found a way to do it.
> The problem in Australia is no one gives a $hit anymore, the media tell everyone they are a losers if they haven't got a property in Sydney/Melbourne, the breakfast guy on the radio on $80k a month is telling all the wage slaves how Flcked life is, everyone is told to blame someone else for their predicament. Tradies on $180k a year committing suicide I mean what are we doing to people?
> ...



 i had been retired   before the 'working from home  era '  and maybe those working from  home were more productive  ( and accurate )  i can't imagine the  distractions at home being  much worse than ones i observed walking through various offices (  when i was working )

 HOWEVER i see  many of those 'work at home ' jobs being exported internationally   or significantly automated ( or both )

 now while this was an interesting adventure ( work from home ) i wonder about the need for CBD office space  ( and dedicated  furniture and services .. you know  , the guy the changes the water cooler , cleaners  , on site security  etc etc etc ) in the future 

 now i think  Australia  had lost the plot  ( in many places  ) after 2001 

 BTW the media industry wasn't healthy   even back in 1995  , but the momentum was for the worse ,  and will get worse still as they finally realize they have suicided their industry/careers .

 Trump was their last big hope  and they HATED that .

 BTW  i have a VERY dark sense of humor  that has been a big help at various  workplaces , it works much better than screaming , crying and ranting ( especially if you can find the right cartoon )


----------



## divs4ever (18 February 2022)

waterbottle said:


> I can't speak to your experience and I haven't walked in your shoes so I'm not going to pretend I know what you know.
> 
> But the reality is - covid disrupted all sectors of society. Whether that was virus related or political is arguable but that isn't the point.
> 
> ...




 my talent was for being officially  forbidden   to use innovative, creative fixes  , now to be sure  they were CRUDE , but they were quick , cheap and effective  .. my best one took them 4 years to notice  i had fixed a recurring problem ( happened once or twice a night before the  fix  ) it took other 4 hours to unfix the problem  ,  to solve another issue  ( which i had been working around with a six inch nail  when needed  for about 3 years )

 the official option was the call the contractor  who would arrive  between 2 and 24 hours after the  call  charge a $75 call-out fee + hours on site 
 ...   and fix it to the extent the same problem might recur that shift or the next shift .. now officially they could have bought a new handle and retaining collar ( or had one made by any competent fitter )  .. but they had rules and protocols  and budgets 

 my fix cost less than $10 including the wages for the time taken to apply the fix actually closer to $20 if you account for the roasting i got when the hasty fix was discovered 

 so YEP i love retirement  , i can patch and fix my own stuff , my own way  , and watch Australia strangle in rules and regulations , safety courses and site inductions


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## sptrawler (19 February 2022)

Absolutely @divs4ever , I have a laugh with my best mate, we did our apprenticeships together in the 70's, we would have races to overhaul CW pump motors. They were vertically mounted 1MW electric motors, it used to take us one day to strip, clean, put on new bearings and seals, check end floats, Megger and do a polarisation index reading then have it ready to go back onto the pump.
In the 80's I became a planner and had to allow three days, because the guys said that's how long it takes, then in 2000 it was sent off site for overhaul because it was half the price of using our own tradesmen. Now the place is closed.
Yes Australia is an amazing place, it's a shame everyone is so determined to stuff it up IMO


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## divs4ever (19 February 2022)

yes sadly my experiences were not unique  , i also got to watch obvious talent get poached to ( mostly  ) international companies and shores


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## qldfrog (19 February 2022)

waterbottle said:


> I don't know how you can claim that when for the past two years, most white collar industries have been able to maintain productivity by working from home....



I would actually genuinely type the above but add a ROL.
Before covid, there was a bit of talk in the corporates about BS jobs ..jobs which are in essence useless just parasite on a company/state..
Well guess what, these are the very jobs which are being WFH without any productivity fall.
In a nutshell.
And with a bit of exaggerated license..
The less affected by WFH your job is, the more BS it is....
🙄


----------



## mullokintyre (19 February 2022)

waterbottle said:


> I can't speak to your experience and I haven't walked in your shoes so I'm not going to pretend I know what you know.
> 
> But the reality is - covid disrupted all sectors of society. Whether that was virus related or political is arguable but that isn't the point.
> 
> ...



The disruption of sectors of society pales in comparison to the disruption  caused  by over the top reactions from  the  governments.
The one size fits all approach  is a magnificent example of why centralised planning is an abject failure.
The closure of artificial borders when those borders had little or no bearing on the day to day lives of those living along it is a prime example.
Stupid comments  like  the QLD premiers statement that Queensland hospitals are for Queenslanders. Creation of artificial bubbles along border towns with ridiculous  unwieldy systems in place. Checkpoints in  regional areas manned by out of area police or military personel who had no idea where towns where making the queues longer. The forcing and enforcing of curfews on swathes of the population for no discernable benefit. The ridiculous notion that each state had to approve various treatments, RAT tests, and border entry protocols.
The locking up of the elderly  when in many cases their only reason to even stay alive was visits from friends and relatives.
Society is angrier and less tolerant, less forgiving and less generous.
We are forever changed.
Mick


----------



## qldfrog (19 February 2022)

When saying"
All industries were affected, but those who managed to innovate and work around it survived. And the reality is those who were able to commandeer technology managed survive and thrive. Those that couldn't either went bankrupt or were dependent on government stimulus."
That's the official BS.
A good example i know: mine..
Startup in China, world patents just 3y ago working in AI and AR.
Government restrictions put an halt: i had 2 options.move permanently there or give up.
At 55, and able to do it, i just gave up.
Folding company: pty ltd..which is actually quite a lot of paperwork and costs.
The chinese part going on, mostly unaffected within China after mid 2020.
Australian company closing 0 income and myself retired. China one Australia 0.
And no.you can not efficiently manage a company tech in leading edge fields 100pc remotely during 2 years.
Maybe i am not tech savy enough....LOL
So that's a nice narrative to tell to shift the blame away from politicians, but not much substance...
I am sure the apples unpicked on the trees could have been picked by Zoom conferences....or the restaurants should be all booming doing takeaway..
The Australian politicians were able..and still do .. to destroy the economy for a few votes, as Australian population is generally uninformed and in the absence of border with "the rest of the world" were able to go along with the upmost BS.
Travel blocks also prevented retourning residents from spreading news and facts about what life outside the curtain was.or is...


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## divs4ever (19 February 2022)

qldfrog said:


> Maybe i am not tech savy enough....LOL



 or too tech savvy ( i am assuming bloatware is still a popular trend )


----------



## Value Collector (19 February 2022)

mullokintyre said:


> The disruption of sectors of society pales in comparison to the disruption  caused  by over the top reactions from  the  governments.
> The one size fits all approach  is a magnificent example of why centralised planning is an abject failure.
> The closure of artificial borders when those borders had little or no bearing on the day to day lives of those living along it is a prime example.
> Stupid comments  like  the QLD premiers statement that Queensland hospitals are for Queenslanders. Creation of artificial bubbles along border towns with ridiculous  unwieldy systems in place. Checkpoints in  regional areas manned by out of area police or military personel who had no idea where towns where making the queues longer. The forcing and enforcing of curfews on swathes of the population for no discernable benefit. The ridiculous notion that each state had to approve various treatments, RAT tests, and border entry protocols.
> ...



As a person that lives in QLD though, I was pretty happy to be Covid and lock down free for a good 6 months while down south were being smashed with lock downs, I mean I was talking to friends and family from Sydney, and they were shocked that we were going about with business as usual up here while they were locked down.


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## mullokintyre (19 February 2022)

Value Collector said:


> As a person that lives in QLD though, I was pretty happy to be Covid and lock down free for a good 6 months while down south were being smashed with lock downs, I mean I was talking to friends and family from Sydney, and they were shocked that we were going about with business as usual up here while they were locked down.



Were you happy that people from other states were locked out?
How about the ones who lived and worked along the  borders to other states?
Mick


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## Value Collector (19 February 2022)

mullokintyre said:


> Were you happy that people from other states were locked out?



I wasn't happy that Covid existed in the first place, but it did exist so hard decisions had to be made if we wanted the population of Qld to have freedom for some extra time.

It's just the way it had to be, most of the other states were in lock down anyway, So we had a choice of closing the border and staying free or opening the border and 1 month later putting us into hard lock down like Sydney and Melbourne, opening up to early wouldn't have achieved anything besides plunging us into the hard lock downs and mask wearing for months when we didn't need to be.

Most of Australia had a pretty good run because we shut our international border and kept the virus out, but once NSW was out of control we had to shut the Queensland border if we wanted that good run to continue for another 6 months, and it did.



> How about the ones who lived and worked along the  borders to other states?
> Mick




Well you have to draw the line some where don't you, and we did have a travel bubble with northern NSW until outbreaks started happening there.


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## mullokintyre (19 February 2022)

Value Collector said:


> I wasn't happy that Covid existed in the first place, but it did exist so hard decisions had to be made if we wanted the population of Qld to have freedom for some extra time.
> 
> It's just the way it had to be, most of the other states were in lock down anyway, So we had a choice of closing the border and staying free or opening the border and 1 month later putting us into hard lock down like Sydney and Melbourne, opening up to early wouldn't have achieved anything besides plunging us into the hard lock downs and mask wearing for months when we didn't need to be.
> 
> ...



And that for me, highlights the change in the OZ character.
I'm alright jack , and beggar the rest.
Mick


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## frugal.rock (19 February 2022)

Back to inflation...

@moXJO 
I still think Biden is ranting about Russia invading Ukraine for another purpose other than trying to be populous. 
It's out of their jurisdiction really isn't it?

My thoughts go to the USD which as we all know is, well, in a predicament.
A stronger US dollar helps their inflation situation by being able to import stuff cheaper.

So, my thoughts are, does Russia going to war with Ukraine potentially give a platform for a stronger US dollar?

It would seem history suggests that currency manipulation is frowned upon, however, could this be a card, perhaps the only decent card, that the US has to assist their predicament?

I just don't know enough about currency and currency shenanigans to know, either way.


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## divs4ever (19 February 2022)

Value Collector said:


> As a person that lives in QLD though, I was pretty happy to be Covid and lock down free for a good 6 months while down south were being smashed with lock downs, I mean I was talking to friends and family from Sydney, and they were shocked that we were going about with business as usual up here while they were locked down.



that was a result of pivotal elections that might have inconvenienced the state government and  totally stuffed the tourist industry 

 only a subtle hint , but a hint the virus wasn't as  urgent as retaining power


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## divs4ever (19 February 2022)

frugal.rock said:


> Back to inflation...
> 
> @moXJO
> I still think Biden is ranting about Russia invading Ukraine for another purpose other than trying to be populous.
> ...



that depends on who is manipulating the currency 

 but effectively Joe was the unelected president of Ukraine  , i suppose it was a warm-up for being the unelected President of the US


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## divs4ever (19 February 2022)

Value Collector said:


> I wasn't happy that Covid existed in the first place, but it did exist so hard decisions had to be made if we wanted the population of Qld to have freedom for some extra time.
> 
> It's just the way it had to be, most of the other states were in lock down anyway, So we had a choice of closing the border and staying free or opening the border and 1 month later putting us into hard lock down like Sydney and Melbourne, opening up to early wouldn't have achieved anything besides plunging us into the hard lock downs and mask wearing for months when we didn't need to be.
> 
> ...



 not so , we simply didn't have the test kits to inflate the figures  ever notice flu disappeared as well even without the extra testing


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## Value Collector (19 February 2022)

divs4ever said:


> not so , we simply didn't have the test kits to inflate the figures  ever notice flu disappeared as well even without the extra testing



Not sure what you are talking about?

who is we? What test kits inflated which figures? What has the flu got to do with anything?


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## Value Collector (19 February 2022)

mullokintyre said:


> And that for me, highlights the change in the OZ character.
> I'm alright jack , and beggar the rest.
> Mick



It’s pretty common sense I think, Us closing the border didn’t make the situation for the rest worse, it just protected us a bit longer.

NSW and VIC also shut their borders too the rest of the world too when they were covid free, what is the difference?


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## divs4ever (19 February 2022)

Value Collector said:


> Not sure what you are talking about?
> 
> who is we? What test kits inflated which figures? What has the flu got to do with anything?



 we as in Queensland ( or more specifically the Brisbane -Gold Coast corridor )

 the very simple maths of the more you test the more you find ( ignoring the false positives ) , the other problem of test results coming back up to 3 days after being tested  which made contract-tracing ridiculous  , and many folks  who had either Covid or the flu ( or both  because the test couldn't differentiate , and they normally DIDN'T use the separate (proven ) flu tests 

 oh oh  some strains of the Flu are Corona viruses as well   because the Flu  is a cluster of symptoms   that can be caused by different types of virus 

Types of Influenza Viruses​








						Types of Influenza Viruses
					

Learn more about the types of influenza viruses that cause seasonal flu illness in humans each year.




					www.cdc.gov
				








__





						influenza viruses structure at DuckDuckGo
					

DuckDuckGo. Privacy, Simplified.




					duckduckgo.com
				












						Types of Flu
					

Learn more from WebMD about different strains of flu and how they can be prevented.




					www.webmd.com
				




 but we no longer have to worry about the Flu is has virtually vanished  for two years after running amok  in humans for more than 100 years previously 

 and if you think i am  joking what about Peter Dutton's flight home to QLD on a commercial flight  , between the air passengers , Brisbane Airport  where was the super-spreader event there


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## Value Collector (19 February 2022)

divs4ever said:


> we as in Queensland ( or more specifically the Brisbane -Gold Coast corridor )
> 
> the very simple maths of the more you test the more you find ( ignoring the false positives ) , the other problem of test results coming back up to 3 days after being tested  which made contract-tracing ridiculous  , and many folks  who had either Covid or the flu ( or both  because the test couldn't differentiate , and they normally DIDN'T use the separate (proven ) flu tests
> 
> ...



We (Qld) we’re doing plenty of tests, and if we did have an outbreak we would have known it by the number of cases presenting in hospital.

(Remember I am talking about last year when our borders were closed and we were pretty much zero covid, I am not talking about after the outbreak took off, that was after the border opened)

The flu has been suppressed by because of all the mask wearing for covid, it will be back though.

the flu and covid are two different things, completely different viruses.


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## divs4ever (19 February 2022)

and on top of that  in the early stages  only selected folks were even tests 


 A. have you been to China recently  

 B.   have you been in contact with anyone recently returned from China 

 C. have you been in contact  with someone diagnosed with Covid 

 IF all three answers are NO , please move on  ( i assume they did test suspect hospitalized  folks )

 and that was the early days up to the  2020 local government elections ( and two crucial state government by-elections )

 so basically the virus had a very easy time until the end of March 2020  in QLD , unlike much  of the world who were encouraged to go to Chinatown  for the Lunar New Year Celebrations  in 2020


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## divs4ever (19 February 2022)

and i am talking about 2020 when there was a virus spreading   ... back in the '14 days to flatten the curve ' era 

 every wonder why the virus surges in Summertime in the Southern Hemisphere  , but in the Winter  in the Northern Hemisphere  but is apparently sensitive to heat 

 just asking


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## frugal.rock (19 February 2022)

Off topic people's...

Inflation ?


----------



## moXJO (19 February 2022)

frugal.rock said:


> Back to inflation...
> 
> @moXJO
> I still think Biden is ranting about Russia invading Ukraine for another purpose other than trying to be populous.
> ...



He is tanking in the polls. And yes, the "drums of war" generally bring on a stronger US dollar. It also tends to unify Americans. 

Russia is a known shtstirrer though and now have a Chinese backing.  There is that much propaganda going around it's hard to know where it's at.


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## Value Collector (19 February 2022)

divs4ever said:


> and i am talking about 2020 when there was a virus spreading   ... back in the '14 days to flatten the curve ' era
> 
> every wonder why the virus surges in Summertime in the Southern Hemisphere  , but in the Winter  in the Northern Hemisphere  but is apparently sensitive to heat
> 
> just asking



Well I am not talking about 2020, QLD had lock downs along with the rest of the country in 2020 and  we got rid of the virus, and eventually most of the country was pretty much covid free.

In 2021 however, NSW dropped the ball covid numbers went through the roof, and the hardest lock downs of the entire pandemic were put in, How ever we were pretty much untouched (except of an 8 day lock down, and one other long weekend lockdown).

we lived 2021 pretty much free from covid and free from lock downs, without shutting the border we would have spent a large chunk of 2021 in lock down just like NSW.

NSW actually benefitted from QLD border closures, it meant that more vaccine could be sent to NSW, if Queensland was spiking with covid at the same time, NSW would have received less vaccine.


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## Value Collector (19 February 2022)

moXJO said:


> He is tanking in the polls. And yes, the "drums of war" generally bring on a stronger US dollar. It also tends to unify Americans.
> 
> Russia is a known shtstirrer though and now have a Chinese backing.  There is that much propaganda going around it's hard to know where it's at.



I don’t think Russia has as much support from China as people think, China is smart it will support Russia with words, but it knows it’s economy is tied to western trading Partners.

it will play hard ball, but won’t want to risk its economy.


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## divs4ever (20 February 2022)

but much of the West are debt pigs  run by greedy kleptocrats ( the Taiwanese  got that right )

 if you were a drug lord   would you keep selling to folks that have future troubles in paying  , because that is the scenario China is looking at  

 yes Australia  has plenty of desired minerals  ( that could be bought elsewhere  at a lesser quality/high transport costs ) , but is behaving like a brat without alternate customers ready if China calls their bluff  ( now if 30% of our exports went to India already , MAYBE we could play that game with a chance of winning )

 Russia can supply plenty ( and eventually so will Mongolia and Afghanistan  )  lesser quality  in some cases   , and a less critical trading partner  , for all his flaws  Putin treats business like business not some political photo-op 

 China has the West captured  because the West made it unprofitable to manufacture at home  , China could easily focus on Russia  and Asia  for it's exports  and concentrate on better quality goods  , letting India grab the bargain basement markets and take the debt risks 

 i know a former  business man who needed software tested  PROPERLY  in the end India and Vietnam  won the contracts ( they both tested the same software  to double-check .. aka no fudging the results ) yes it could have been done here  but nowhere nowhere the  same price OR as quickly


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## moXJO (20 February 2022)

Value Collector said:


> I don’t think Russia has as much support from China as people think, China is smart it will support Russia with words, but it knows it’s economy is tied to western trading Partners.
> 
> it will play hard ball, but won’t want to risk its economy.



Not militarily. Russian gas will flow to china. Any sanctions won't affect Russia as greatly as before. There's are a few countries creating their own bloc.


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## Value Collector (20 February 2022)

moXJO said:


> Not militarily. Russian gas will flow to china. Any sanctions won't affect Russia as greatly as before. There's are a few countries creating their own bloc.



They have to build the infrastructure for that first, gas pipelines are not easy to move.

All these squabbles are minor in my opinion compared to the long term trend of growing co-operation and trade, it’s a side show.


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## moXJO (20 February 2022)

Value Collector said:


> They have to build the infrastructure for that first, gas pipelines are not easy to move.
> 
> All these squabbles are minor in my opinion compared to the long term trend of growing co-operation and trade, it’s a side show.



Russia is building huge amounts of infrastructure. Also what basically equates to an artic "silk road".

Agree with the squabbling.


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## sptrawler (20 February 2022)

Sounds as though inflation is firing up in Europe.








						Europe’s soaring inflation is driving the latest protest convoy: tractors
					

In Greece’s rural heartland, tractors have become a symbol of anxiety. Now they’ve started forming truck-style protest convoys.




					www.smh.com.au
				



From the article:
*Tyrnavos:* In Greece’s rural heartland, tractors have become a symbol of anxiety.

For weeks, they have been parked along the country’s highways, their owners threatening to block traffic. Farmers are desperate for additional financial aid to cope with surging energy prices that are pushing up their costs for fuel and fertiliser, posing a sudden threat to their livelihoods.

“Take fertiliser. Last year, we were paying €500 [$788] a ton. Now, it’s as if we’re buying a piece of land. It’s €1700 to €1800,” said Dimitris Kakalis, a 25-year-old farmer from central Greece who has joined the protests.
The spike in energy prices and its ripple effects, he says, touch every part of his vineyard and peach grove business — it costs more for gasoline needed for farming machinery, electricity to power irrigation pumps and weed killer.

“At these [prices], we’re headed for ruin,” he said.
The sting of high energy prices — which are driving decades-high inflation numbers — is being felt across Europe and around the world, piling financial stress on governments, businesses and households. Countries are scrambling to address expensive utility bills and rising prices for food as farmers and supermarkets pass along their costs to customers, many of whom are facing a cost-of-living crisis.


----------



## mullokintyre (20 February 2022)

sptrawler said:


> Sounds as though inflation is firing up in Europe.
> 
> 
> 
> ...



Its ok, these inflationary things are only transitory.
Just like a lot of the businesses that drive the economies.
Mick


----------



## over9k (21 February 2022)

Here's a bit of a different inflation play for you, artworks:


----------



## eskys (21 February 2022)

JohnDe said:


> Just been speaking to one of the prominent 'auctioneers and valuers', said, sadly, business is booming. A lot of businesses have reached the limit, doors are closing, creditors are moving in, equipment is being auctioned off. Pubs, cafe's, fast food shops, even franchises.
> 
> What does this mean?
> 
> ...



We're opening up now, John. The road ahead will brighter............surely we can't get worse can we?


----------



## waterbottle (21 February 2022)

Someone had commented Eastleigh that they were surprised by the lack of industrial action that workers were taking... Well, Sydney trains were halted today due to an industrial dispute, and last Tuesday we had nurses on strike...


----------



## sptrawler (21 February 2022)

waterbottle said:


> Someone had commented Eastleigh that they were surprised by the lack of industrial action that workers were taking... Well, Sydney trains were halted today due to an industrial dispute, and last Tuesday we had nurses on strike...



All part of the inflationary cycle.


----------



## moXJO (21 February 2022)

sptrawler said:


> All part of the inflationary cycle.



Or the election cycle


----------



## sptrawler (21 February 2022)

moXJO said:


> Or the election cycle



No better time to push for a pay rise, especially when there is a Liberal Govt in office.  
You have to use whatever advantage you can, while you can.


----------



## Smurf1976 (21 February 2022)

sptrawler said:


> No better time to push for a pay rise



As an observation - pretty much nobody seems worried about costs these days.

Government, business, consumers - money's no object it seems. Government and business just spends whatever it costs and to considerable extent consumers seem to be throwing money around too.


----------



## sptrawler (21 February 2022)

Smurf1976 said:


> As an observation - pretty much nobody seems worried about costs these days.
> 
> Government, business, consumers - money's no object it seems. Government and business just spends whatever it costs and to considerable extent consumers seem to be throwing money around too.



Yes smurf the days days of somebody has to pay for this, what about the debt etc, seems to be long gone.


----------



## qldfrog (21 February 2022)

sptrawler said:


> Yes smurf the days days of somebody has to pay for this, what about the debt etc, seems to be long gone.



That is what happens when fiat currency become worthless.money is...what you value it for..just a sign on a screen or a dirty paper bill until it is swapped for something real:work, food ,stuffs.
The devaluation ( in term of society values) of money has deep implications economically..why bother gathering more than your day to day needs? And see it seized by a gov or being inaccessible at the ATM? As for savings ......


----------



## sptrawler (21 February 2022)

qldfrog said:


> That is what happens when fiat currency become worthless.money is...what you value it for..just a sign on a screen ir a dirty paper bill until it is swapped for something real:work, food ,stuffs.
> The devaluation ( in term of society values) of money has deep implications economically..why bother gathering more than your day to dzy needs? And see it seized by a gov or being inaccessible at the ATM? As for savings ..



Well it certainly will be interesting to watch how they address all the debt, in a believable manner, I think people are realising that fiat money is like monopoly money and as you say are just trying to convert it into something useful. 
No one is taking debt seriously, because they see the Governments not taking it seriously, it is hard to see how credibility can be restored without a lot of pain IMO.


----------



## waterbottle (22 February 2022)

First wave of sanctions are due to be announced in response to Russia recent actions.

My bet is Russia will limit access to crude/gas, pushing the price of oil well past $100/bl. Futures seem to agree.

The trouble here is what this does for inflation as energy costs have been a huge contributer, I'd expect them to pay an even bigger role.

With the Fed due to meet in 3-4 weeks, the likelihood of a larger than expected rate rise is increasing.

What does that mean for markets? Probably a continuation of the down trend since late 2021. Take a look the IMOEX.ME.... It's about to hit the lows of the covid pandemic!


----------



## divs4ever (22 February 2022)

Russia doesn't have to do anything  about the gas   

 Russia is patiently  waiting for the Germans to CERTIFY  Nordstream 2  before  passing gas through it  , it COULD pump gas before certification but that would run litigation risk , but have decided the EU legal system  is rather partisan rather than pragmatic 

  that certification might take years but chances are Russia can sell the gas elsewhere at higher prices than the existing German contract


----------



## divs4ever (22 February 2022)

Russia's Yamal-Europe gas pipeline flows east as Ukraine crisis escalates









						Russia's Yamal-Europe gas pipeline flows east as Ukraine crisis escalates By Reuters
					

Russia's Yamal-Europe gas pipeline flows east as Ukraine crisis escalates




					www.investing.com


----------



## Smurf1976 (22 February 2022)

divs4ever said:


> chances are Russia can sell the gas elsewhere at higher prices than the existing German contract



Power of Siberia 1, a gas pipeline from Russia to China, opened in 2019 and already there are plans to build Power of Siberia 2 as a duplicate.

So Russia's already pivoting there slowly but surely.


----------



## waterbottle (22 February 2022)

divs4ever said:


> Russia doesn't have to do anything  about the gas
> 
> Russia is patiently  waiting for the Germans to CERTIFY  Nordstream 2  before  passing gas through it  , it COULD pump gas before certification but that would run litigation risk , but have decided the EU legal system  is rather partisan rather than pragmatic
> 
> that certification might take years but chances are Russia can sell the gas elsewhere at higher prices than the existing German contract




Looks like the Germans have said NO to Russian gas









						Germany halts Nord Stream 2 approval – DW – 02/22/2022
					

German Chancellor Olaf Scholz has said the gas pipeline project cannot go ahead now in these crisis circumstances. He said the approval process has been halted.




					m.dw.com


----------



## JohnDe (22 February 2022)

waterbottle said:


> Looks like the Germans have said NO to Russian gas
> 
> 
> 
> ...




Yes, we’ll pointed out. 

The US, NATO countries & Germany came to an agreement last week, a few reputable media sources reported it on Friday & Saturday.


----------



## JohnDe (22 February 2022)

“The consequences of massive sanctions would be severe, and perhaps as damaging to Europe as to Russia”



			https://www.theaustralian.com.au/commentary/ukraine-russia-tensions-global-bluster-more-a-whimper/news-story/d9ce00a9d44cb2b8b557740f7dada841


----------



## Smurf1976 (22 February 2022)

Just reminding anyone investing in it that gas is a regional commodity.

LNG, Liquefied Natural Gas, is a global one due to the ability to transport it but natural gas itself is a regional one absolutely. To the point that it's entirely possible that the LNG sitting in a tank has a very different value than gas in the pipeline connected to the same facility.

It's not a market like gold or oil where it's a similar price everywhere so if you’re going to invest in anything relating to it then location is critical.


----------



## Gunnerguy (22 February 2022)

divs4ever said:


> Russia doesn't have to do anything  about the gas
> 
> Russia is patiently  waiting for the Germans to CERTIFY  Nordstream 2  before  passing gas through it  , it COULD pump gas before certification but that would run litigation risk , but have decided the EU legal system  is rather partisan rather than pragmatic
> 
> that certification might take years but chances are Russia can sell the gas elsewhere at higher prices than the existing German contract



Nordstrom 2 won’t be certified now 









						Nord Stream 2: how Putin’s pipeline paralysed the west
					

Gazprom’s $11bn project to deliver gas from Russia to Germany seems impossible to abandon and impossible to carry forward




					www.theguardian.com
				




Gunnerguy


----------



## divs4ever (23 February 2022)

Germany blocks Nord Stream 2 gas project as Ukraine crisis deepens









						Germany freezes Nord Stream 2 gas project as Ukraine crisis deepens By Reuters
					

Germany freezes Nord Stream 2 gas project as Ukraine crisis deepens




					www.investing.com


----------



## divs4ever (23 February 2022)

JohnDe said:


> “The consequences of massive sanctions would be severe, and perhaps as damaging to Europe as to Russia”
> 
> 
> 
> https://www.theaustralian.com.au/commentary/ukraine-russia-tensions-global-bluster-more-a-whimper/news-story/d9ce00a9d44cb2b8b557740f7dada841



 Russia was already moving strongly towards self-reliance  , so there is every chance they are half a move ahead , well Europe  .. they will have to sort their own problems   , i doubt Russia will be swift to help next time 

 i WOULD expect Russia to move away from trading in euros ( as a precaution  against sanctions   on that )


----------



## waterbottle (23 February 2022)

Biden promised to keep a lid on rising energy prices. Not sure how effective that would be given its essentially controlled by OPEC... Perhaps waiving federal taxes?


----------



## frugal.rock (23 February 2022)

divs4ever said:


> i WOULD expect Russia to move away from trading in euros ( as a precaution against sanctions on that )



So, if not euro's, what then?
Russia has been moving away from USD. Perhaps the Yuan...


----------



## mullokintyre (23 February 2022)

frugal.rock said:


> So, if not euro's, what then?
> Russia has been moving away from USD. Perhaps the Yuan...



China needs energy, grains, Russia needs electronics cars, just about everything else.
Should be a win win for both of them.

Mick


----------



## qldfrog (23 February 2022)

divs4ever said:


> Germany blocks Nord Stream 2 gas project as Ukraine crisis deepens
> 
> 
> 
> ...



And gas price jumped higher:
Germany 0, Russia 1..
With sanctions like that...


----------



## mullokintyre (23 February 2022)

From  The OZ


> New figures from the Wage Price Index show wages grew 0.7 per cent in the December quarter of 2021.
> 
> The data means wages grew by an overall rate of 2.3 per cent last year, with the December quarter being the fastest period of quarterly growth since March 2014.
> 
> ...



Wages growth is creeping up ever so slowly, but the rate increase is getting quicker each quarter.
Annualised,  the rate is 2.8%, but I would bet next quarter it will be higher again.
MICK


----------



## over9k (25 February 2022)

Oil has moved 5-7% up and then down ON THE DAY today:





Coins now seem to be inversely correlated with inflation, for whatever reason: 




So crypto is still your inflation play, just in the other direction now. 

(Because f**k logic)


----------



## over9k (25 February 2022)

Oil also in massive backwardation as april futures are just under $93/barrel so tonight was a hell of a night if you were up for it. 

I'm just kicking myself for not buying any 3LNI the other day


----------



## over9k (25 February 2022)

Good afternoon panic sellers, how are we feeling now?


----------



## mullokintyre (25 February 2022)

Food Inflation is one of the biggest worries for all countries except perhaps those on a subsistence level agricultural commodity.
Both Sobean futures and Pal ol futures have hit record highs.
From Bloombergs


> Vegetable oil prices are booming around the world, raising costs of the raw materials used for everything from frying food to powering engines.
> From soy to palm oil -- a product used in about half of all supermarket goods -- prices have surged to records or near multiyear highs this week. Cooking oils go into biodiesel and are churned into goods from soaps to salad dressings and sweets, so the rallies are more bad news for consumers and sectors also being hit by higher transport, energy and labor costs.
> 
> Drought crimping South American soybean crops has been the latest blow to supply. Rival oilseeds like palm and canola are also suffering shortfalls from adverse weather and worker shortages. And escalating tensions over Ukraine are stoking worries about sunflower-oil exports from the key Black Sea region.
> ...



I suspect that the grain grown in Ukraine will find its way into Russia rather than the open market.
Mick


----------



## over9k (25 February 2022)

mullokintyre said:


> Food Inflation is one of the biggest worries for all countries except perhaps those on a subsistence level agricultural commodity.
> Both Sobean futures and Pal ol futures have hit record highs.
> From Bloombergs
> 
> ...



Lots of energy goes into food production though.

Energy is THE inflation driver of the world.


----------



## JohnDe (25 February 2022)

"Step aside from the horrors of the Russian actions and we have a sharemarket that is in correction mode but not in collapse. And the bond market is telling us that the interest rate rises will not be as severe as many expect."

"If the situation deteriorates markedly and forces much higher interest rates then it will be an entirely different ball game for sharemarkets."



> Wall Street has placed clear bets on the outcome of the Ukraine war and the sanctions against Russia – it will be business as usual for most global corporate giants outside the international banking system.
> 
> This is not the outcome that western leaders are looking for.
> 
> ...






			https://www.theaustralian.com.au/business/the-sharemarket-is-in-correction-mode-not-collapse/news-story/0d63be04d661fe87403ce7cbf5eff379


----------



## Knobby22 (27 February 2022)

JohnDe said:


> "Step aside from the horrors of the Russian actions and we have a sharemarket that is in correction mode but not in collapse. And the bond market is telling us that the interest rate rises will not be as severe as many expect."
> 
> "If the situation deteriorates markedly and forces much higher interest rates then it will be an entirely different ball game for sharemarkets."
> 
> ...



Agree with that article. 3.89% for 3 years fixed from Athena. Doesn't suggest the market expects large rises either.


----------



## divs4ever (27 February 2022)

frugal.rock said:


> So, if not euro's, what then?
> Russia has been moving away from USD. Perhaps the Yuan...



 China SEEMS to avoiding it's chance of being the benchmark currency  so probably not the yuan 

 for several years  they tried to get a BRICS common currency  afloat , but BRICS  has  some troubles  ( although all this distress might be the perfect opportunity  , they might have to boot India and replace it with Iran  to get it up and running )

 if BRICS  can claim  two billion citizens ( between them )  i think they can make it a goer 

 however both Russia and China are exploring their options ( and neither are stupid governments )


----------



## divs4ever (27 February 2022)

mullokintyre said:


> Food Inflation is one of the biggest worries for all countries except perhaps those on a subsistence level agricultural commodity.
> Both Sobean futures and Pal ol futures have hit record highs.
> From Bloombergs
> 
> ...



but wasn't there a risk of that  before  the Eastern part  does tend to be more fertile  ( hinting the ethnic Russians  are likely to be SOME of the farmers )


----------



## waterbottle (10 March 2022)

US inflation numbers out tonight...

Retail may take a hit but energy prices have been on an upward trend for the past month, and that's ignoring the Russian spike!

Any bets? I'm going for 0.8-1% for Feb


----------



## mullokintyre (10 March 2022)

1.1%, to really  put the cat among the pigeons.
And then on the 15th (beware the ides of March) , PPI for goods rises 1.6%, and for services 1.1%.
Mick


----------



## waterbottle (10 March 2022)

mullokintyre said:


> 1.1%, to really  put the cat among the pigeons.
> And then on the 15th (beware the ides of March) , PPI for goods rises 1.6%, and for services 1.1%.
> Mick




That's a 0.5% rate rise.... Maybe 0.75%


----------



## over9k (10 March 2022)

The fed's all but said it's going to be a 0.25 rate rise just in case you're wondering. As soon as war broke out all the hike bets etc that had effectively priced in a 0.48 or thereabouts change plummeted back to 0.25. 

It's somewhat difficult to coordinate monetary policy with war.


----------



## qldfrog (10 March 2022)

waterbottle said:


> That's a 0.5% rate rise.... Maybe 0.75%



BTD on gold,silver and index shorts  IMHO
PS i doubt we will see any significant rate rise in the US...just hyperinflation on its way, but we could see some here.


----------



## macca (10 March 2022)

waterbottle said:


> That's a 0.5% rate rise.... Maybe 0.75%




Should be, won't be..................

At the most 0.25 but IMO very unlikely, 0.01 will be closer to the mark, 

Hyper inflation is required to reduce the  debts to something that can be repaid within our grandchildren's lifetime.

The whole thing is a stinking pile of s...


----------



## Smurf1976 (10 March 2022)

As a real world example of hidden inflation, a simple consumer product - a solar powered garden light.

Needing to replace a failed one, and wanting to match the others for purely aesthetic reasons, I went in search of an identical new one. That turned out to be unavailable but I did find one that looks almost the same apart from colour and on inspection all the parts are interchangeable and fit - it comes from the same factory almost certainly.

However, with detailed examination at home I can confirm that:

The colour change from stainless steel to black for the top and body has been achieved simply by omitting the stainless steel parts which fitted over a black plastic base. Now it's just the bare plastic.

The plastic piece to which the LED and switch are mounted was white plastic with the old one and fitted well. The new uses softer black plastic and is a poor fit, requiring some effort to reassemble.

The stake which goes in the ground contains 30% less plastic by weight with the new one when compared to the old but is otherwise the same design and material, just thinner.

The tube which forms the stem of the light has been changed from stainless steel to powder coated steel and is substantially thinner. The old one is quite firm whereas the new is easily deformed simply by squeezing it between fingers and thumb.

The old one had two modes - white light or multi-colour changing. The new has one mode only, white.

The old one had a 600mAh battery. The new one comes with a 400mAh battery.

The three screws which secure the top section, housing the electronics, have been reduced in length by approximately 30%.

The new one cost 20% more than the old.

So what's the real rate of inflation there?

It's drastically more than the 20% price increase alone. The materials in the product have been reduced in mass by making it thinner, lower quality materials have been used and and it has only one function instead of two with the associated parts simply omitted.

My best estimate is that true inflation for this product would be around 80% over three years, primarily due to the reduced quality, noting that it's no longer possible to buy the original.

Now realise that this situation is in no way unique to a garden light and applies across the board to a vast range of consumer products. Thinner or lower capacity components made of cheaper materials and with functionality reduced but done in a manner so as to conceal the change so far as possible given that most consumers won't disassemble the product and weigh the components.

Now I dare say that when some central banker does a "hedonic adjustment" to account for changes in product quality, they won't be picking things like this up and saying that oh yeah, inflation's actually higher than the headline figure because product quality has reduced.


----------



## qldfrog (10 March 2022)

Smurf1976 said:


> As a real world example of hidden inflation, a simple consumer product - a solar powered garden light.
> 
> Needing to replace a failed one, and wanting to match the others for purely aesthetic reasons, I went in search of an identical new one. That turned out to be unavailable but I did find one that looks almost the same apart from colour and on inspection all the parts are interchangeable and fit - it comes from the same factory almost certainly.
> 
> ...



As an aside, i so like to see people acting as i do😁
We should form a tribe!!!!
Anyone knowing exactly when US cpi figures are released?
I expect bad numbers, and we should remember these do not reflect yet the Ukraine war effects.
US futures down again but these can be manipulated,oil and gold silver up again


----------



## qldfrog (10 March 2022)

qldfrog said:


> As an aside, i so like to see people acting as i do😁
> We should form a tribe!!!!
> Anyone knowing exactly when US cpi figures are released?
> I expect bad numbers, and we should remember these do not reflect yet the Ukraine war effects.
> US futures down again but these can be manipulated,oil and gold silver up again



Actually PM down now.. volatility...


----------



## waterbottle (10 March 2022)

qldfrog said:


> As an aside, i so like to see people acting as i do😁
> We should form a tribe!!!!
> Anyone knowing exactly when US cpi figures are released?
> I expect bad numbers, and we should remember these do not reflect yet the Ukraine war effects.
> US futures down again but these can be manipulated,oil and gold silver up again




12:30AM Friday AEST


----------



## qldfrog (10 March 2022)

waterbottle said:


> 12:30AM Friday AEST



Thanks @waterbottle
 so after today's US session but in the middle of our last day of the week.will be interesting and a wild guess.


----------



## qldfrog (10 March 2022)

qldfrog said:


> Thanks @waterbottle
> so after today's US session but in the middle of our last day of the week.will be interesting and a wild guess.



Apologies got confused currently in US time zone so
	

		
			
		

		
	



I believe it will be above these expectations...


----------



## qldfrog (11 March 2022)

qldfrog said:


> Apologies got confused currently in US time zone so
> 
> 
> 
> ...



Official 7.9%
US market down, PM up, Frog has no complaint


----------



## mullokintyre (11 March 2022)

From  Trading Economics
Annual inflation rate in the US accelerated to 7.9% in February of 2022, the highest since January of 1982, matching market expectations. Energy remained the biggest contributor (25.6% vs 27% in January), with gasoline prices surging 38% (40% in January). Inflation accelerated for shelter (4.7% vs 4.4%); food (7.9% vs 7%, the largest since July of 1981), namely food at home (8.6% vs 7.4%); new vehicles (12.4% vs 12.2%); and used cars and trucks (41.2% vs 40.5%). Excluding volatile energy and food categories, the CPI rose 6.4%, the most in 40 years. Still, the surge in energy costs due to war in Ukraine is still to come. The inflation was seen peaking in March but the recent developments in Europe coupled with the ongoing supply constraints, strong demand, and labour shortages will likely maintain inflation elevated for longer. source: U.S. Bureau of Labor Statistics​
Whichever way you look at it, things are getting tougher for the US consumer.This transitionary inflation is not only persistent, it keeps getting larger margins.
The Fed will not raise rates until too late, and the US consumers are in for a period of high inflation.
Mick


----------



## waterbottle (11 March 2022)

0.8% for the month. Critically, inflation is rising across all components, not just energy.

Also worth noting that the recent increase in the price of oil only occured in the last week of February. Continuation of the war (likely to take a few weeks) and disruption to Ukrainian and Russian commodity supply/access will last months.


----------



## waterbottle (11 March 2022)

US inflation at a 40-year high and the only way is up
					

Consumer price inflation hit a new 40 year high and will soon get close to 9% as businesses' surging commodity and labour costs get passed onto…




					think.ing.com


----------



## macca (17 March 2022)

macca said:


> Should be, won't be..................
> 
> At the most 0.25 but IMO very unlikely, 0.01 will be closer to the mark,
> 
> ...



Wrong again 

Glad to be wrong actually, hyperinflation is really bad for retired folk


----------



## mullokintyre (17 March 2022)

US producer prices rose again Feb, but not as much as forecast.
From Investing dot com


> Prices paid to U.S. producers rose strongly in February on higher costs of goods, underscoring inflationary pressures that set the stage for a Federal Reserve rate hike this week.
> 
> The producer price index for final demand increased 10% from February of last year and 0.8% from the prior month, Labor Department data showed Tuesday. That followed an upwardly revised 1.2% monthly gain in January.
> 
> ...



So, one can assume there will be further  inflation in the pipeline.
Mick


----------



## mullokintyre (18 March 2022)

Interesting take on yesterdays announcement in U about the 25 basis points rise in US rates.
from Their ABC


> ASX to climb as Wall Street stocks, oil prices rise on outlook after aggressive Fed rate hike​



If they regard a 25 basis point rise in interest rates as "aggressive", I wonder what they would have thought of one the Fed members getting his wish for a 50 point rise??
Mick


----------



## over9k (19 March 2022)




----------



## sptrawler (23 March 2022)

__





						Bloomberg - Are you a robot?
					





					www.bloomberg.com
				




Losses in global bond markets have marked a milestone as central banks including the Federal Reserve look to tighten policy to combat surging inflation. 

The Bloomberg Global Aggregate Index, a benchmark for government and corporate debt, has fallen 11% from a high in early 2021. That’s the biggest decline from a peak in data stretching back to 1990, surpassing a 10.8% drawdown during the financial crisis in 2008.
The Fed raised interest rates by 25 basis points last week, and Chair Jerome Powell said this week it is prepared to increase them by a half percentage-point at its next meeting if needed. Higher borrowing costs risk further dampening the return on debt, eroded by the fastest pace of consumer-price increases in decades.
It’s a blow to money managers accustomed to years of consistent gains, backstopped by loose monetary policy. Stocks are staring down a bear market, upending the dynamics of a classic 60/40 portfolio that is meant to balance out any losses from riskier equities with the more stable cash flow of bonds.


----------



## divs4ever (23 March 2022)

macca said:


> Glad to be wrong actually, hyperinflation is really bad for retired folk



 having only lived through the '70's ( in Australia )  , and that was only ordinary inflation  ,  i suspect hyperinflation will be bad for everybody except debt-pigs ( who somehow have unlimited credit-worthiness )

 remember the CPI is a  (farcical ) estimate  of PAST price rises   so all indexed rises ( like wage and pension increases ) are trailing any living cost increases 

 and retail folks  will ( nearly ) always be eating dust from the carnage up ahead 

 now a more interesting  question is will the retired folk ( and i am one of those )  suffer more than the worker ( and family  man/woman )

 as a retiree  i can still trim costs  , ( hunt for bargains ) and consider forward expenses  , carefully , 

 living in Southern Qld   i can reduce my heating and cooling costs  going forward  ,


----------



## over9k (1 April 2022)

Anyone else noticed not so much prices going up but quality going down? 

All my favourite food places have kept pretty much the same prices but have clearly changed their ingredients. Everything's gone so downhill


----------



## Smurf1976 (1 April 2022)

One thing I've definitely noticed is supermarket products on special are selling out.

That's a new thing at least for the supermarket I normally go to. Something's on special, people buy all the stock, that leaves the only option for a similar product as being some other brand that probably costs more than the standard price of the sold out one without the discount.

I interpret that as more people looking to save money and buying items on special than used to be the case.


----------



## Smurf1976 (1 April 2022)

over9k said:


> Anyone else noticed not so much prices going up but quality going down?



Haven't noticed quality but I've noticed that quantity is definitely dropping.

A product that used to be 1kg is now 800g and so on.


----------



## bsnews (1 April 2022)

Supply side prices have gone up for retail. Some only a nibble some $1-2 per item plus freight has increased. 
Although that does not sound a lot it snowballs sell price just to enable the same GP to be kept.
Are people not buying as much? From my small POV for sure this started around a month ago & still ongoing.
As for quality some leading brand items I have returned due to bad manufacturing.
One was the whole manufactured line every item must of added up to millions in cost and lost sales.


----------



## againsthegrain (1 April 2022)

I have noticed personally the quality of services is hitting a low also. Unless it is easy and pays a good quick buck nobody is keen to do it


----------



## JohnDe (1 April 2022)

againsthegrain said:


> I have noticed personally the quality of services is hitting a low also. Unless it is easy and pays a good quick buck nobody is keen to do it




This is where quality well staffed businesses will thrive and set themselves up for a long term future with repeat customers and word of mouth recommendation’s.


----------



## againsthegrain (1 April 2022)

JohnDe said:


> This is where quality well staffed businesses will thrive and set themselves up for a long term future with repeat customers and word of mouth recommendation’s.



natural selection of trimming the fat


----------



## over9k (1 April 2022)

Well worth a watch


----------



## Dr.Stock (1 April 2022)

JohnDe said:


> This is where quality well staffed businesses will thrive and set themselves up for a long term future with repeat customers and word of mouth recommendation’s.



This is where the immigration doors open!
Have to staff the kitchen and front sections of food outlets etc..
small business owners need physical help

its all about to happen


----------



## JohnDe (1 April 2022)

Dr.Stock said:


> This is where the immigration doors open!
> Have to staff the kitchen and front sections of food outlets etc..
> small business owners need physical help
> 
> its all about to happen




There's more businesses out there than just food. I'm more looking at builders, maintenance, mechanical, vehicle repairs/servicing, and so on. 

The quality and wise ones will maintain their service level by taking on what they can, explaining in simple terms, increasing costs in a fair manner, keep staff turnover to a minimum. These business will have a high level of customer satisfaction, which helps staff morale, people will recommend them for years to come.

Some businesses may see this as a time to increase profits and gouge their customers. These companies will have to deal with irate customers, putting pressure on frontline staff. Work quality will suffer, staff turnover will increase, customers will not recommend them and not return when time get tough.


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## Macquack (3 April 2022)

JohnDe said:


> "increasing costs in a fair manner"
> 
> "Some businesses may see this as a time to increase profits and gouge their customers"



It is a fine line between those two scenarios.


----------



## over9k (3 April 2022)

over9k said:


> Anyone else noticed not so much prices going up but quality going down?
> 
> All my favourite food places have kept pretty much the same prices but have clearly changed their ingredients. Everything's gone so downhill



Update: portions are getting smaller too. I have to order two "main" sizes to actually get fed properly


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## over9k (3 April 2022)

NO I'M NOT FAT


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## sptrawler (11 April 2022)

Sounds like inflation and supply issues are hammering the building companies. Two in Brisbane and two in Perth.


			https://www.couriermail.com.au/subscribe/news/1/?sourceCode=CMWEB_WRE170_a&dest=https%3A%2F%2Fwww.couriermail.com.au%2Fbusiness%2Fqld-business%2Ftwo-building-firms-hit-the-wall-as-perfect-storm-continues%2Fnews-story%2Fde2a1ca0effcd44433100f2ef8c37d8f&memtype=anonymous&mode=premium&v21=dynamic-hot-test-score&V21spcbehaviour=append
		










						Another Australian building company collapses
					

Australian building companies are going bust in the face of rising costs, with a second Perth construction firm going under in days.




					www.dailymail.co.uk


----------



## over9k (12 April 2022)

Alternatively they've just been sued into oblivion for all their dodgy work and have just dissolved themselves after transferring everything to the cayman islands.


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## moXJO (12 April 2022)

A lot got caught with a combo of delays, lack of workers, lack of supply chain. Some projects lost 6 months to 1.5 years. 
And yes, mismanagement and dodgy work helped play their part. 

I heard delayed payments started blowing out past 60 days as well.


----------



## Gunnerguy (12 April 2022)

moXJO said:


> A lot got caught with a combo of delays, lack of workers, lack of supply chain. Some projects lost 6 months to 1.5 years.
> And yes, mismanagement and dodgy work helped play their part.
> 
> I heard delayed payments started blowing out past 60 days as well.



My 12 month small house build is 24 months in now. About 3 months work yet to do. House selected was one of the companies ‘standard’ houses in their inventory of houses. All building plans/design were ‘in house’ already. No variations made by me at any stage.
Contract signed 1st April 2020 (the fool was I). Before the shortages and building stimulus so there should have been no delays. Took 12 months to get the pad down.
I hope this experience clears out all the dodgy $hite builders. They deserve it !!!!!

Gunnerguy


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## moXJO (12 April 2022)

Gunnerguy said:


> My 12 month small house build is 24 months in now. About 3 months work yet to do. House selected was one of the companies ‘standard’ houses in their inventory of houses. All building plans/design were ‘in house’ already. No variations made by me at any stage.
> Contract signed 1st April 2020 (the fool was I). Before the shortages and building stimulus so there should have been no delays. Took 12 months to get the pad down.
> I hope this experience clears out all the dodgy $hite builders. They deserve it !!!!!
> 
> Gunnerguy



It was busy before covid hit. Most builders were already 6 months behind at that time.


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## macca (12 April 2022)

Been a good surf running of late, no concrete poured while the surf is up, sorry 

(this is true around here and anywhere else that has a good wave)


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## moXJO (12 April 2022)

moXJO said:


> It was busy before covid hit. Most builders were already 6 months behind at that time.



Supply chain hit was brutal though. Price rises on materials was insane.
So were wages though.


----------



## sptrawler (12 April 2022)

moXJO said:


> Supply chain hit was brutal though. Price rises on materials was insane.
> So were wages though.



I just bought some stainless steel handrail and hardware to finish off the bottom two steps on the stairs, didn't realise I needed it until I broke my leg.
Anyway, the cost of the stainless fittings had doubled, since I bought the last lot about two years ago.


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## Tyre Kicker (12 April 2022)

US CPI for March = 8.5%.


----------



## waterbottle (12 April 2022)

Tyre Kicker said:


> US CPI for March = 8.5%.




Not as bad as I thought... Given the war + embargo on Russian oil, loss of food supply....
So 8.5% is what we get post COVID reflation + potential ww3? Now oil prices heading downwards, potentially to pre war levels, and the markets have already corrected approx 20%....

Is this peak inflation?


----------



## Gunnerguy (13 April 2022)

waterbottle said:


> Not as bad as I thought... Given the war + embargo on Russian oil, loss of food supply....
> So 8.5% is what we get post COVID reflation + potential ww3? Now oil prices heading downwards, potentially to pre war levels, and the markets have already corrected approx 20%....
> 
> Is this peak inflation?



I hope it’s not.
Any suggestion and the can gets kicked down the road again.
I hope to hear ‘the recession we needed to have’ again.
Get the interest rates back up to 3% / 4% / 5% were they belong. Suck up the excess money in the system. Money chasing non productive projects.  Get the stock market PE’s back to ‘normal’. Get bonds back to a competitive alternative to excess money in the stock market.
It’s been too long since the GFC.

Gunnerguy


----------



## frugal.rock (13 April 2022)

waterbottle said:


> Is this peak inflation?



It's looking a little like it might be.
But of course, it's probably just transitory....


Gunnerguy said:


> I hope to hear ‘the recession we needed to have’ again.
> Get the interest rates back up to 3% / 4% / 5% were they belong. Suck up the excess money in the system.



I remember it as "the recession we had to have". Keating.

Yeah, but, what about us poor pricks...?
Junk debt, defaults etc the plan could well backfire.
GFC Mach II.
"Better get a bigger can to kick"


----------



## Tyre Kicker (13 April 2022)

waterbottle said:


> Not as bad as I thought... Given the war + embargo on Russian oil, loss of food supply....
> So 8.5% is what we get post COVID reflation + potential ww3? Now oil prices heading downwards, potentially to pre war levels, and the markets have already corrected approx 20%....
> 
> Is this peak inflation?



Oil still high and back to $100.


----------



## Tyre Kicker (13 April 2022)

Will be interesting to see Aus inflation.

The public sector will be ramping up with plenty of strikes in search of decent wage rises, possibly in unison ie nurses, teachers, transport etc very soon. If successful, will that put further pressure on our inflation number over the next 12+ months?


----------



## mullokintyre (13 April 2022)

waterbottle said:


> Not as bad as I thought... Given the war + embargo on Russian oil, loss of food supply....
> So 8.5% is what we get post COVID reflation + potential ww3? Now oil prices heading downwards, potentially to pre war levels, and the markets have already corrected approx 20%....
> 
> Is this peak inflation?



Sometimes you need to look behind the  headline figures,
the 8.5% figure is pretty bad in its own right, but when you look at the month on month figures it looks even worse.
As can be seen from the graph below taken from Trading Economics , Inflation from May thru to September last year was pretty flat, so most of that 8.5% has occurred sice October  last year. And  to top it off, the monthly increase has been in an upward trend as well.
The  latest March increase was 0.6 %, Feb was 0.4% , Jan 0.5% , Dec 0.2%.
The other Interesting Phenomenon is that at six month intervals, in May 2020 and October 2020, there big jumps of 0.8%.
It could correspond to six monthly price reviews or rebalancing etc. Be interesting to see if this is repeated in May this year.
Mick


----------



## qldfrog (13 April 2022)

mullokintyre said:


> Sometimes you need to look behind the  headline figures,
> the 8.5% figure is pretty bad in its own right, but when you look at the month on month figures it looks even worse.
> As can be seen from the graph below taken from Trading Economics , Inflation from May thru to September last year was pretty flat, so most of that 8.5% has occurred sice October  last year. And  to top it off, the monthly increase has been in an upward trend as well.
> The  latest March increase was 0.6 %, Feb was 0.4% , Jan 0.5% , Dec 0.2%.
> ...



Fully agree, people are claiming we have reached the peak..because.

.well maybe because they still have portfolios to offload?
There is no objective indication we are at any peak yet


----------



## 3 hound (13 April 2022)

qldfrog said:


> Fully agree, people are claiming we have reached the peak..because.
> 
> .well maybe because they still have portfolios to offload?
> There is no objective indication we are at any peak yet




Can't figure out if people that think inflation could ever peak are deluded and low IQ, ignorant or just being manipulators.

Correction,  inflation will and does "peak" just before a currency collapses, dies and gets replaced. 

Evidence: history.


----------



## qldfrog (13 April 2022)

3 hound said:


> Can't figure out if people that think inflation could ever peak are deluded and low IQ, ignorant or just being manipulators.
> 
> Correction,  inflation will and does "peak" just before a currency collapses, dies and gets replaced.
> 
> Evidence: history.



Indeed CPI can not even slow down unless it catches up with PPI.
If a factory has to pay 20% more today for its input, it is a given that a cpi of 8% on the current month is just begin to increase as on the next contract, the factory will have to increase its price or close.
Or slash its margins but rare are 20 or so % net margins so even in socialist lala land..CPI will rise.not to forget your rates next year following land valuations or PS and employees demanding higher wages etc etc.
Once the devil is out of the bottle, badically the currency has to fold or a long painful slow process engaged.decades...


----------



## 3 hound (13 April 2022)

qldfrog said:


> decades





.....and that's why it kinda looks like it works. We avoid the big hit because the burden is transferred to our kids & grandkids.


----------



## Smurf1976 (14 April 2022)

qldfrog said:


> There is no objective indication we are at any peak yet



Peak of actual inflation or peak of the headline statistic?

The latter will wobble around simply due to math given that the ramp-up thus far hasn't been linear which is about to become a factor in the year on year comparisons.

For actual inflation though well my anecdotal observation is that rather a lot of the population seems to have an incredible amount of money to throw around on all manner of things. Something really doesn't add up there looking at the sorts of cars and houses being sold versus statistical average earnings meanwhile everyone seems to be buying new this, that and something else. It's all way out of whack and seems like pretty much everyone must've just won the lottery or something.

My strong suspicion being that it's all built on an enormous amount of debt.....


----------



## qldfrog (14 April 2022)

Smurf1976 said:


> Peak of actual inflation or peak of the headline statistic?
> 
> The latter will wobble around simply due to math given that the ramp-up thus far hasn't been linear which is about to become a factor in the year on year comparisons.
> 
> ...



I definitively noticed this as well. And I cringe when i look at advertised price of cars. RE, or kg of tomato at $7 and lettuce at $4 to $6 a piece ..and wonder the same.. probably not a good timing with retirement.
i also noticed hourly rate jumping up in all conversations.
Debt probably based on HL withdrawal and the feeling rich when receiving home valuation jumping 30%
And maybe also the buy it before you can't anymore or it is 20pc more next year feeling ....for cars and durable items.
IMHO, the GFC QEs then covid scam devalued the remaing notion of work, money, assets..what is value..?
The government stopped you from working and throw money at you.so no surprise the welfare worst consequences become societal.
Savings, persistence, efforts but also ethics just pushed down the drain.
COVID de facto established the universal income as included in the Reset program.wait for the next step...you own nothing..inflation can lead us there pretty quickly too.
This is actually not a joke but Macron is sending everyone an inflation cheque in France, and Germany is giving away 100 billions to companies,with another 100 billions loan in euro, to help them survive inflation.throwing money..at inflation
Wtf? Are they joking?  Is the asylum in charge?


----------



## waterbottle (14 April 2022)

qldfrog said:


> COVID de facto established the universal income as included in the Reset program.wait for the next step...you own nothing..inflation can lead us there pretty quickly too.
> This is actually not a joke but Macron is sending everyone an inflation cheque in France, and Germany is giving away 100 billions to companies,with another 100 billions loan in euro, to help them survive inflation.throwing money..at inflation
> Wtf? Are they joking?  Is the asylum in charge?




It would depend on what is actually causing inflation, wouldn't it?
No point ignoring the logistical problems that were being blamed for inflation in late 2021 - suppliers will need funds to adapt their business models.
But now we have a war going on that is driving up oil prices because - no point handing out money to purchase oil, but it'd make sense if that some money was spent on making businesses less dependent on oil.


----------



## 3 hound (14 April 2022)

Smurf1976 said:


> like pretty much everyone must've just won the lottery or something




They did, the new name for lottery is stimulus cheques.

My area your house would have sold for less than you bought it for the last 10 years.

Now every house that was for sale is sold and every vacant block is sold and is getting a house built on it.

 People are paying for builders a couple hours drive away, every local builder is booked up for next 4 years.

Our local services are over in and cannot keep up with demand. You see it in the small things like In the main shopping area you would rarely get to half the car parks being full now they are all full all the time. Another example is waiting at an intersection, the most you would ever wait is 3 cars to go past, now you can wait 10 minutes  for a break in the traffic.

Judging from the rego plates all the new people are refugees from facist Victoria.


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## mullokintyre (14 April 2022)

3 hound said:


> Judging from the rego plates all the new people are refugees from fascist Victoria.



I would join them in leaving fascist Victoria, but it would cost me a divorce, which would be far more expensive than the GFC and the great depression combined!
Mick


----------



## 3 hound (14 April 2022)

mullokintyre said:


> I would join them in leaving fascist Victoria, but it would cost me a divorce, which would be far more expensive than the GFC and the great depression combined!
> Mick




There are situations where being penniless and flat broke is the better option.


----------



## Garpal Gumnut (14 April 2022)

mullokintyre said:


> I would join them in leaving fascist Victoria, but it would cost me a divorce, which would be far more expensive than the GFC and the great depression combined!
> Mick



I would stick around Victoria, Mick, the Age reckon it is not replacing it's population, lowest birthrate in Australia. 

Anyways inflation in moderation is good, Paul Keating, one of our greatest PMs used it judicially to curb Australians spending on silly things. 

I cannot believe what young families here in North Queensland spend money on for their children.

As a nation we need to spend more on affordable housing and better public transport, not on foreign franchise toys and takeaways for lardarses. 

gg


----------



## mullokintyre (14 April 2022)

The US PPI was released last night, and not surprisingly, was up big tim.
From Invesopedia 



> In March 2022, the Producer Price Index (PPI) for final demand increased by 1.4% on a seasonally adjusted basis. This follows monthly increases of 1.2% in January 2022 and 0.9% in February. On an unadjusted basis, the PPI has risen by 11.2% for the 12 months ending in March 2022, the largest 12-month increase since the data was first compiled in this manner in November 2010.1
> 
> The monthly rise of 1.4% in March also equates to a compound annualized growth rate (CAGR) of 18.2%. In general, the PPI is a gauge of inflation that measures increases to input costs faced by the producers of goods and services. Because it measures price changes before they reach consumers, some analysts see it as an earlier predictor of inflation than the CPI.
> 
> ...



As has occurred with the CPI figures,  the rate of increase has been rising  steadily, so there is plenty in the pipeline.
This transitory Inflation  is putting a new meaning to the word Transitory.
How long does it take for Inflation to keep rising  before the Fed heads and others who  trotted out the tag line admit they got it wrong??
Mick


----------



## 3 hound (14 April 2022)

mullokintyre said:


> transitory Inflation





I have to find a good image to go with that phrase and put it all together on a T-shirt.

It's kind of the most cynical phrase ever thrust into the public and shows how much contempt these idiots have for everyday people and how protected and immune they are to the consequences of their actions.


----------



## Garpal Gumnut (14 April 2022)

mullokintyre said:


> The US PPI was released last night, and not surprisingly, was up big tim.
> From Invesopedia
> 
> 
> ...



I for one will welcome interest rates of 8-12%. 

Too much easy money atm. 

Even dimwit corrupt Liberal, National and ALP politicians can enter parliament bare-a.sed and end up after six years multi-millionaires. 

gg


----------



## againsthegrain (14 April 2022)

Garpal Gumnut said:


> I for one will welcome interest rates of 8-12%.
> 
> Too much easy money atm.
> 
> ...



yeah good times but how could that be even possible with so much debt


----------



## mullokintyre (14 April 2022)

3 hound said:


> I have to find a good image to go with that phrase and put it all together on a T-shirt.
> 
> It's kind of the most cynical phrase ever thrust into the public and shows how much contempt these idiots have for everyday people and how protected and immune they are to the consequences of their actions.



How about These??


----------



## Garpal Gumnut (14 April 2022)

Inflation is NEVER transitory. 

Similar to toilet paper during Covid  

Buy today or it will be 20% more in 3 mo. time will be what drives it. 

gg


----------



## Value Collector (14 April 2022)

3 hound said:


> I have to find a good image to go with that phrase and put it all together on a T-shirt.
> 
> It's kind of the most cynical phrase ever thrust into the public and shows how much contempt these idiots have for everyday people and how protected and immune they are to the consequences of their actions.



A bit of inflation is not to big a price to pay if a world filled with war and a pandemic.

I mean whole cities are basically being destroyed in the Ukraine, and thousands being killed and families ripped apart, and if the largest effect it has on you is a higher fuel price and some extra inflation I think you are doing very well and shouldn’t really be complaining.

For as long as human society has existed our production has been impacted by floods, droughts, disease, war etc etc and during those times there is less to go round, in modern society you just get some supply chain disruptions and some inflation, it could be a lot worse.


----------



## 3 hound (14 April 2022)

Value Collector said:


> A bit of inflation is not to big a price to pay if a world filled with war and a pandemic.
> 
> I mean whole cities are basically being destroyed in the Ukraine, and thousands being killed and families ripped apart, and if the largest effect it has on you is a higher fuel price and some extra inflation I think you are doing very well and shouldn’t really be complaining.
> 
> For as long as human society has existed our production has been impacted by floods, droughts, disease, war etc etc and during those times there is less to go round, in modern society you just get some supply chain disruptions and some inflation, it could be a lot worse.




No, just no.

Do you work for Joe Biden?

I think you have listened to one too many virtue signalling millionaire celebrities that say stuff like they are happy to pay $60 a gallon for fuel because war in Ukraine....and then finish the sentence with "I own a Tesla" and give a smug smile.


----------



## Value Collector (14 April 2022)

3 hound said:


> No, just no.
> 
> Do you work for Joe Biden?
> 
> I think you have listened to one too many virtue signalling millionaire celebrities that say stuff like they are happy to pay $60 a gallon for fuel because war in Ukraine....and then finish the sentence with "I own a Tesla" and give a smug smile.



Ok, feel free to complain about prices being a little higher when others are having their country destroyed. 

We live in the real world, bad stuff happens and if the only effect you get is some higher prices so be it, you will have to look for sympathy some where else.


----------



## mullokintyre (15 April 2022)

mullokintyre said:


> Sometimes you need to look behind the  headline figures,
> the 8.5% figure is pretty bad in its own right, but when you look at the month on month figures it looks even worse.
> As can be seen from the graph below taken from Trading Economics , Inflation from May thru to September last year was pretty flat, so most of that 8.5% has occurred sice October  last year. And  to top it off, the monthly increase has been in an upward trend as well.
> The  latest March increase was 0.6 %, Feb was 0.4% , Jan 0.5% , Dec 0.2%.
> ...



One of the things we need to remember is that historical comparisons sometimes need to be  looked at with a the consideration of changes in definitions in mind.
the headline shouted that inflation was the highest since 1980. But its much worse than that.
if the same manner of calculatiing the PI that was used in 1980 were to be used today, inflation would be much greater.
According to a podcast by Peter Schiff 



> *Forty years ago, we used entirely different CPI than we use today. And as far as I can tell, we are generally missing the mark by about half, meaning that if we use the 1981 CPI to measure the 2022 price increases, we probably would see a year-over-year rise of 17%, which is twice eight-and-a-half.”*





> *Families can’t strip out food and energy. They can’t survive without food and energy. When food and energy prices are up year-over-year big, that’s not volatility. That’s a trend. And you can’t ignore that trend when you’re trying to calculate inflation and determine whether or not you have a problem. You have a big problem.”*



Peter noted that in 1981, the last time CPI was this high, interest rates peaked at 20%. Today, interest rates are at 0.25%. Then, we had real rates of over 6%. Today, real rates are deeply negative.


> Is inflation going to peak when interest rates are at -8.25% when it took positive 6.5% to get inflation to peak in 1981? And of course, if we are measuring prices accurately, as I said earlier, we’ve got 17% inflation, which means we have -16.75 real interest rates — inflation is far more likely to accelerate than come down when you have a negative interest rate that high. Instead of being at the end of an inflationary period, we’re just beginning. … All of the people who are saying inflation has peaked they’re just saying that because they hope it’s peaked.




Phew, we are so lucky that deffiniton was changed, otherwise we would be in serious trouble!
Mick


----------



## 3 hound (15 April 2022)

Value Collector said:


> Ok, feel free to complain about prices being a little higher when others are having their country destroyed.
> 
> We live in the real world, bad stuff happens and if the only effect you get is some higher prices so be it, you will have to look for sympathy some where else.




If you accept the war in Afghanistan was a success and the current  inflation trajectory was caused by the Ukraine war then we have nothing left to discuss. Life is too short.

Have a good night.


mullokintyre said:


> One of the things we need to remember is that historical comparisons sometimes need to be  looked at with a the consideration of changes in definitions in mind.
> the headline shouted that inflation was the highest since 1980. But its much worse than that.
> if the same manner of calculatiing the PI that was used in 1980 were to be used today, inflation would be much greater.
> According to a podcast by Peter Schiff
> ...




Reminds me of a certain transport system that was plagued with faults - the faults were all fixed instantly by changing the name to "non-compliance issues". 

The reporting that followed was about how all the faults had been fixed.


----------



## moXJO (15 April 2022)

Value Collector said:


> Ok, feel free to complain about prices being a little higher when others are having their country destroyed.



There's been wars for the last 20 or more years. Maybe the ghost of Europe past is rattling markets.


----------



## moXJO (15 April 2022)

Garpal Gumnut said:


> I would stick around Victoria, Mick, the Age reckon it is not replacing it's population, lowest birthrate in Australia.



Is there too many basket weavers grouped together GG?


----------



## Value Collector (15 April 2022)

moXJO said:


> There's been wars for the last 20 or more years. Maybe the ghost of Europe past is rattling markets.



This time it’s disrupting energy markets, particularly the Oil Market.


----------



## Garpal Gumnut (15 April 2022)

moXJO said:


> Is there too many basket weavers grouped together GG?



Well, I hesitated to say it, lest I unleashed The Furies upon me. 

In a word yes. 

Self centred prigs, gobbling turkeys, basket weavers, bearded bent over peaceniks  and shrill to all appearances asexual dwarves.

While the rest of us just get on with our primary biological imperative, which is to reproduce, and lessen inflation.

gg


----------



## over9k (23 April 2022)

Here's the thing to note: Once these companies are gone, the infrastructure is a ticking time bomb. Either it's hit by partisans/guerilla warfare from the ukrainians or it simply crumbles from lack of maintenance and then there is nobody left nor willing to return to fix it, meaning that it goes offline more or less permanently. I'm not convinced that markets have actually realised this yet. 

Meanwhile: 





One of the few lights in the energy inflation tunnel is china's lockdowns, which have pummeled chinese demand and thus taken the strain off a bit. This will obviously pick back up at some point:




There's also no shortage of more shale capacity that can come online just in the USA: 



And the baker-hughes worldwide the rig count sits at approximately 25% below its 2019 numbers: 
	

		
			
		

		
	







Despite this, the fed, only having the financial levers to pull, is now looking like this: 





As for why the rig count isn't higher at the moment, is hard to say (how much of it is virus?). We do know that release of the strategic reserve plus a bounce in interest rates should give a nice increase in oil supply as well as a reduction in demand simultaneously. Combine this with china's lockdowns showing no signs of ending (I saw some numbers showing that shanghai alone has dropped their demand by over 9%) and we can see energy in a solid drop off its recent highs: 




Considering my whole point here is that we've got a long term cut off of supply not yet priced in combined with a short term dip in demand, the only thing I can see stopping this being a beautiful dip to buy is more fed tightening. 

Considering markets seem to have all but priced in several 50 basis point rises already, we'd need to see either 75 point increases or another virus outbreak and associated lockdowns in another oil demanding but not producing part of the world for this to be anything other than a brief dip to buy. 

I'd see a 25 basis point rise more likely than a 75 tbh just on account of how much a 75 would spook markets. Powell's hesitant to even say that 50 is not off the table. 

Buy point is probably once the chinese lockdowns show some kind of sign of easing, but long term, I couldn't see a buy around now or within the next few trading days I.e next week being a bad move either. 

Fed meets on 3rd & 4th.


----------



## over9k (23 April 2022)

There you go.


----------



## waterbottle (23 April 2022)

over9k said:


> View attachment 140742
> 
> 
> There you go.




🙏 Thanking you, St. Jerome.

Even if interest rates hit 3%, where would the majority put their money if inflation was still running at 8%? 
Crypto, equities, futures, options are the only instruments that will produce returns that beat inflation. 
The strategy is to buy the dip and hope the system doesn't fall apart.


----------



## over9k (23 April 2022)

waterbottle said:


> 🙏 Thanking you, St. Jerome.
> 
> Even if interest rates hit 3%, where would the majority put their money if inflation was still running at 8%?
> Crypto, equities, futures, options are the only instruments that will produce returns that beat inflation.
> The strategy is to buy the dip and hope the system doesn't fall apart.



USD, maybe gold.


----------



## Craton (23 April 2022)

The impact of losing Russian crude can not be underestimated, the knock-on effect to the largest importers e.g. to China is undeniable. Replacing Russian lost crude will not be a "just in time" fix and as OPEC has already stated that they will not be able to meet demand and obviously new wells take time to bring online.

Increasing production from Nth America may add approx. one or two million barrels per day, still need to transport that to those big importers.

Another consideration, it's not just about barrels per day it is also about the quality e.g. the sulfur content and API gravity (light or heavy), which affect processing complexity and product characteristics. 

From EIA:


> Heavy crude oils require additional, more expensive processing to produce high-value products. Some crude oils also have a high sulfur content, which is an undesirable characteristic in both processing and product quality.




With oil and gas such a vital component of our way of life, a tightening oil market with additional processing costs combined with other constraints (transport, new production costs etc) does not bode well for our hip pocket.

With all the Russian taps turned off, so to speak, one can even envisage fuel rationing as evident already in Europe.

Further, if China can't keep the manufacturing engines turning, I think we can kiss the recent good times (Covid not withstanding), goodbye.


----------



## over9k (23 April 2022)

China's been manoeuvring to get off oil & gas for quite some time now, pushing coal and electric cars hard. They obviously still need oil etc but coal's the play for them.


----------



## Craton (23 April 2022)

over9k said:


> China's been manoeuvring to get off oil & gas for quite some time now, pushing coal and electric cars hard. They obviously still need oil etc but coal's the play for them.



Yes, that is true as the railway from Mongolia demonstrates, from this article.



> For the next few years, coal will remain vital to China’s industrial strength and ability to power its cities. That’s where energy security comes in. China has invested heavily in freight railway capacity, in order to bring its own coal to its power and steel plants more cheaply.
> 
> 
> It has also built rail connections to Tavan Tolgoi in neighbouring Mongolia, one of the world’s largest and cheapest sources of high-quality coking coal. With the new railway capacity, coking coal can now travel 1,200 kilometres to China’s steelmaking heartland in Hebei province, near Beijing.
> ...



Cheap, local access to that coking coal will impact us even more on top of the current import ban on Aussie coal. 
Another factor is China's increased usage of scrap steel, both coal and iron ore exports from Australia will decline further in the next few years.

Of pertinent interest is carbon reduction not only in China but globally.


> China’s ability to cut seaborne coal imports will grow further if its government increases its decarbonisation ambitions. These plans will be a key influence on the the remaining demand for seaborne coal.
> 
> Australia’s government and investors would be wise to consider these macro-level changes and plans as they look ahead, rather than focusing on short term gains from current market volatility.



That last statement if very salient.


----------



## Smurf1976 (24 April 2022)

Craton said:


> With all the Russian taps turned off, so to speak, one can even envisage fuel rationing as evident already in Europe.
> 
> Further, if China can't keep the manufacturing engines turning, I think we can kiss the recent good times (Covid not withstanding), goodbye.



Day to day is up and down as with anything but the Australian domestic energy market is certainly getting a lot tighter.

Natural gas was circa $ 6 to 8 per GJ a year ago and was ~$10 at the beginning of 2022. At present the price ranges from $15.49 in Victoria to $18.60 in Brisbane and the trend is clearly upwards despite the daily back and forth.

Black coal price is just ridiculous in terms of cost for anyone exposed to international pricing. 

Operators of generation with constrained fuel supply are starting to ratchet prices up pretty dramatically so as to keep physical production volumes within sustainable limits. Price too low means they'll be heavily dispatched = not sustainable so as the price of coal etc rises they're also hiking price.

Year on year wholesale electricity spot prices for first quarter:

State = 2021 price per MWh| 2022 price per MWh

Queensland = $55.63 | $253.45
NSW = $40.79 | 116.63
SA = $49.49 | $109.31
Victoria = $44.79 | $102.29
Tasmania = $58.53 | $98.93
WA = $49.34 | 59.81
Average all states except NT = $42.20 | $133.28

So some pretty hefty increases there.

Tasmania tends to ignore the spot price when setting contract pricing, the real references used are being internationally competitive (industry) or at least nationally competitive (others), but for other states there's less of that focus, what happens with the spot market will tend to influence where contract and retail prices go albeit with some delay.

Just because your home or business electricity bills haven't gone up yet doesn't mean there isn't some serious pressure building on price. There most certainly is.


----------



## over9k (24 April 2022)

Tas is uniquely shielded here on account of running on all the hydro electric dams.


----------



## Smurf1976 (24 April 2022)

over9k said:


> Tas is uniquely shielded here on account of running on all the hydro electric dams.



Yep. The spot price in Tas exists as a function of being part of a wider market, the National Electricity Market, but with local costs mostly unchanged nothing prevents simply ignoring that when it comes to contracts and retail pricing.

WA is also somewhat shielded by having an effectively captive fuel supply which keeps local pricing down.

For the other states however, it's far more real and if it persists then it's inevitable it'll flow through to consumer pricing in due course. Might take a while due to various contracts and so on at fixed prices but in due course it will.


----------



## over9k (24 April 2022)

Here's a great way to protect yourself before these rises start to hit: 

https://www.commbank.com.au/home-loans/commbank-green-loan.html 

1% interest. Free money.


----------



## 3 hound (24 April 2022)

over9k said:


> Tas is uniquely shielded here on account of running on all the hydro electric dams.



Anyone remember the massive outrage and protest by Greenies opposing hydro in Tasmania?

Is hydro now considered green?


----------



## Knobby22 (24 April 2022)

3 hound said:


> Anyone remember the massive outrage and protest by Greenies opposing hydro in Tasmania?
> 
> Is hydro now considered green?



No. Not if built in wilderness areas like the Franklin. That dam never got built.


----------



## over9k (24 April 2022)

3 hound said:


> Anyone remember the massive outrage and protest by Greenies opposing hydro in Tasmania?
> 
> Is hydro now considered green?



ask them i guess? 

I was just speaking from a fuel burning/inflationary perspective.


----------



## 3 hound (24 April 2022)

Knobby22 said:


> No. Not if built in wilderness areas like the Franklin. That dam never got built.




It was the first time I saw protestors, should have googled it before posting.

Fine balance between lowering emissions and not causing other environmental damage.


----------



## moXJO (24 April 2022)

over9k said:


> USD, maybe gold.



Dude you want some silver?
I'll hook you up.


----------



## againsthegrain (24 April 2022)

moXJO said:


> Dude you want some silver?
> I'll hook you up.



make sure you do the bite test,  can't trust anybody if your a pirate... or is that gold.. arrrr


----------



## divs4ever (24 April 2022)

3 hound said:


> Anyone remember the massive outrage and protest by Greenies opposing hydro in Tasmania?
> 
> Is hydro now considered green?



 remember YES 

worked out the Greens were intellectual lightweights  , a Polish ( Soviet educated ) mate  has a much harsher opinion 

 am more in line with The Blue Movement 

Birth of the blue movement​








						Birth of the blue movement
					

Adam Werbach: To make environmentalism truly mainstream, we need to shift our focus away from political activism and toward everyday consumer choices




					www.theguardian.com
				




 ( show business a potential profit and they will create a way )


----------



## 3 hound (24 April 2022)

moXJO said:


> Dude you want some silver?
> I'll hook you up.



Yes, I would...price??


----------



## 3 hound (24 April 2022)

divs4ever said:


> remember YES
> 
> worked out the Greens were intellectual lightweights  , a Polish ( Soviet educated ) mate  has a much harsher opinion
> 
> ...



Not paying the guardian to read your link.


----------



## divs4ever (24 April 2022)

3 hound said:


> Not paying the guardian to read your link.



 for a 14 year old article  ??

glad to see the Guardian is slipping into obscurity  ( i can't believe the Guardian has enough readers to fund a pay-wall  system )

 however  search for The Blue Movement  , they have some quirky concepts  , but are probably better  than the Greens  or government-centric capitalism  

 they are big on using resources ( and waste ) efficiently  , and upskilling the local population  when they fund a project


----------



## over9k (25 April 2022)

over9k said:


> * Either it's hit by partisans/guerilla warfare from the ukrainians *



Didn't take long:




Only preliminary reports at this stage


----------



## over9k (25 April 2022)

Trigger finger is now very itchy, there's been an outbreak reported in Beijing now too so markets have been absolutely slaughtered:






This is just premarket alone: 




The perfect storm for temporary deflation of oil/energy demand.


----------



## Smurf1976 (26 April 2022)

3 hound said:


> Anyone remember the massive outrage and protest by Greenies opposing hydro in Tasmania?
> 
> Is hydro now considered green?



I'll simply say that it's a very good illustration of something that saw major public debate at the time and very strong opinions expressed on both sides but with many failing to grasp many of the issus relating to the whole thing.

One of those key points of relevance that very few grasped was inflation.

Another was globalisation.

Another was bond yields.

Outside the pure environmental conservation issues as such, those three points were extremely relevant to other aspects of the proposal.

The concept of resource limits and the inevitability of extraction following a rise, peak and decline pattern actually was _extremely _well understood by the leaders of both sides, a point that can't be stressed strongly enough, but mostly missed in the actual debate.

So putting to the side all personal views on matters of politics and the environment, it's actually a pretty good illustration of several key economic concepts that underlaid both the original proposal, alternative proposals, the reasons for any proposal having arisen in the first place and the strategy used to oppose them. Economic concepts which have much wider application to resource development in general.

My personal view for the record is that I see both sides. I've had a decent look down there yes and agree there's an extremely strong case for conservation. On the other hand, I'm also well aware of the engineering facts of it all and of society's increasingly precarious predicament with energy. Or in other words, I see both sides and with that in mind, I actually have an alternative proposal that ticks most of both boxes at once with a bit of engineering trickery. Someday, depending on how it all pans out with the overall political and energy supply situation, I might make that public but not now. 

If anyone wants to further discuss that sort of stuff let's take that to the relevant thread.





__





						The future of energy generation and storage
					

It sounds as though there will be a major outage to strip the alternator @Smurf1976   https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02511624-2A1369338?access_token=83ff96335c2d45a094df02a206a39ff4...




					www.aussiestockforums.com
				




Let's keep this thread on the topic of *Inflation.  *


----------



## over9k (26 April 2022)

Smurf1976 said:


> Day to day is up and down as with anything but the Australian domestic energy market is certainly getting a lot tighter.
> 
> Natural gas was circa $ 6 to 8 per GJ a year ago and was ~$10 at the beginning of 2022. At present the price ranges from $15.49 in Victoria to $18.60 in Brisbane and the trend is clearly upwards despite the daily back and forth.
> 
> ...



Just had a musing about this on both a national and more global level:

If power prices spike, this means fewer people mining cryptocurrencies as the profitability just isn't there. This means more revenue/profit for those who remain doing so. It'll also mean a flood of GPU's hitting the market selling cheap as people just can't afford the power bill/it just isn't profitable in a lot of parts of the world any more.

All good news for someone that has a place to keep mining at lower power levels.

In short, the fewer geographies/places in which crypto mining is profitable on account of rising power costs, the more profitable those without the spiking power costs will be.


With tasmania's climate, this again places it in an enviable position from this perspective. Combine this with a 1% interest "green" loan from commbank for some solar panels and you might have yourself a very profitable little endeavour


----------



## divs4ever (26 April 2022)

but watch where you put the inverter  they have a tendency to die well before the 10 year extended warranty runs out  ( wink )


----------



## over9k (26 April 2022)

Buy a good one and have it installed by an old friend you went to school with


----------



## waterbottle (26 April 2022)

Ah yes the China lockdown. 

St. Jerome's prophecy was right - inflation is transitory, covid is forever. 

We've hit peak inflation. Next few months worth of data should trend down. The Fed has jawboned the markets, now down almost 20% from ATHs.


----------



## divs4ever (26 April 2022)

LOL  he was a millionaire at 25  and went on to be a retired millionaire  ( when a million was something impressive )

 last i heard  he had a few unit blocks  that he had wired up himself  ( and kept for income )

 so much for the 'dunce ' of the class ( grade ten )

 if you are still out there George i hope you are rolling in it  ( money )


----------



## divs4ever (26 April 2022)

waterbottle said:


> Ah yes the China lockdown.
> 
> St. Jerome's prophecy was right - inflation is transitory, covid is forever.
> 
> We've hit peak inflation. Next few months worth of data should trend down. The Fed has jawboned the markets, now down almost 20% from ATHs.



 i disagree on the inflation  , i think  that was just the warm-up lap  , but a dead-cat bounce  , yep that is big possibility  , especially if you think the recovery in  the US last night was the plunge protection team  , to lure in the dip-buyers 

 i see one bond guru   guesstimating  the market is factoring negative rates for the US  long term bonds in the not so distant future  ( rates up to 3.5%   before the chaos  begins )


----------



## 3 hound (26 April 2022)

waterbottle said:


> We've hit peak inflation. Next few months worth of data should trend down. The Fed has jawboned the markets, now down almost 20% from ATHs





How did you reach this conclusion, have the supply issues that drove up inflation all been fixed??


----------



## 3 hound (26 April 2022)

Is this an example of inflation at work in a strict academic, economic sense (please jump in if I got the details wrong about the gov program);

When I bought my house some time ago it was around the same time the government offered a $7000 incentive to purchase your first home and they did not apply the standard and considerable gov fees on buying a house. It sounded great and the timing was right for me personally.

Houses for sale in the area went up in value when the announcement was made by several thousand. 

In effect the first time home buyer had an extra $7000+ in their pocket bit it made no difference.

Is this an example of inflation at play in the real economy and how could government not know this would result.

An economic explanation appreciated.


----------



## over9k (26 April 2022)

3 hound said:


> Is this an example of inflation at work in a strict academic, economic sense (please jump in if I got the details wrong about the gov program);
> 
> When I bought my house some time ago it was around the same time the government offered a $7000 incentive to purchase your first home and they did not apply the standard and considerable gov fees on buying a house. It sounded great and the timing was right for me personally.
> 
> ...



Not an accident at all, it's the exact desired effect. Go to an auction and offer to pay 10k to the winning bid and watch the winning bid go up by 10k. 

The politicians all own investment properties dude.


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## over9k (26 April 2022)

We're on our way to backwardation at this rate.


----------



## Smurf1976 (26 April 2022)

3 hound said:


> have the supply issues that drove up inflation all been fixed??



Not as far as I'm aware.   

But for purely math reasons we should see a drop in the year on year rate in the near future due to baseline effects.

For the US, the march 2022 figure is 8.5% from a March 21 baseline that was 2.6% above March 2020.

The April 2022 figure will be from an April 21 baseline that's 4.2% above April 2020.

Assuming the sudden jump in April 2021 isn't repeated in April 2022, that should temporarily lower the headline rate for April 2022.

That's a math thing, it's not about any change in the underlying situation just how it shows up in the data.


----------



## 3 hound (26 April 2022)

Smurf1976 said:


> Not as far as I'm aware.
> 
> But for purely math reasons we should see a drop in the year on year rate in the near future due to baseline effects.
> 
> ...



So why are so many people worried about food shortages, inflation has peaked etc.


----------



## Smurf1976 (26 April 2022)

3 hound said:


> So why are so many people worried about food shortages, inflation has peaked etc.



Because nothing has changed in the real world.

My point's purely a mathematical one that a sudden jump occurred in April 2021 and, unless that is repeated in the exact same month in 2022, there'll be a temporary drop in the figure which no doubt leads to great excitement that it's all fixed and so on. 

That said, well if actual inflation did surge in April 2022 then it's a moot point. The effect would still be there but would be obscured and of no relevance in that case.

We'll soon find out!


----------



## 3 hound (26 April 2022)

Smurf1976 said:


> Because nothing has changed in the real world.
> 
> My point's purely a mathematical one that a sudden jump occurred in April 2021 and, unless that is repeated in the exact same month in 2022, there'll be a temporary drop in the figure which no doubt leads to great excitement that it's all fixed and so on.
> 
> ...



The US fuel prices were more than a mathematical exercise, it was a very real cost that hurt people.

Anyhoo, maybe it was just "transitory"


----------



## over9k (26 April 2022)

WILD gyrations now: 






Looks like yesterday was a pretty good call if I do say so myself. Probably plenty of swing plays to be had over the next week or two for those brave enough.


----------



## over9k (26 April 2022)

Notice how the definition of a transitory period just keeps getting longer and longer?


----------



## over9k (27 April 2022)

There's now no brakes on this train. Or at least, none that don't murder p/e and therefore most of the market. 

In an inflationary environment, energy is pretty much your only growth play.


----------



## waterbottle (27 April 2022)

over9k said:


> View attachment 140902
> View attachment 140903
> 
> 
> ...




Nah, oil has been lacklustre and too volatile. Particularly with Beijing looking at possible shut down. 

Meanwhile tech stocks are approaching covid 2020 levels. Lots of talk of the system 'coming down'.

Nothing for me to do now but put my faith in St Jerome.


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## over9k (27 April 2022)

NRGU up 7% on a day where TQQQ is down 9%. 

A dip buy yesterday would have you 20% in the green by today already.


----------



## divs4ever (27 April 2022)

3 hound said:


> The US fuel prices were more than a mathematical exercise, it was a very real cost that hurt people.
> 
> Anyhoo, maybe it was just "transitory"



 yep , transitory  to runaway or hyper-inflation  , how can i tell the Fed is starting to move nearly 8% behind official CPI rises and probably 12% to 15% behind REAL inflation  give me 12% start over one mile  and i still might beat most my age ( heart disease and all )

 and those fuel prices they are a COMPOUNDING  factor  ( a bit like GST ) every time the produce moves the cost goes UP ( the same bit of merch. ) if it was 10% once  per  item folks could adjust in a while


----------



## over9k (27 April 2022)

Problem is, so much of it is supply side driven with the sanctions on russian oil. To be fair to the fed, that's well & truly beyond their control. 

A supply side inflation spike means stagflation, this is a fact.


----------



## over9k (27 April 2022)

Lol. Two minutes later: 




I should work for the news or something hey?


----------



## bluekelah (27 April 2022)

divs4ever said:


> yep , transitory  to runaway or hyper-inflation  , how can i tell the Fed is starting to move nearly 8% behind official CPI rises and probably 12% to 15% behind REAL inflation  give me 12% start over one mile  and i still might beat most my age ( heart disease and all )
> 
> and those fuel prices they are a COMPOUNDING  factor  ( a bit like GST ) every time the produce moves the cost goes UP ( the same bit of merch. ) if it was 10% once  per  item folks could adjust in a while



we are already in a hyperinflationary cycle. Inflation is actually very easily correlated to M2 Money supply. The M2 has increased from 15trillion just precovid to almost 22 trillion today. thats around 40% increase over 2 years(20%/year). Inflationary effects flow through in 1.5 to 2 years later, so we can expect inflation to be super high next couple years at least to 2024 if there are no major steps taken to stop M2 money creation. Last year US budget deficit ran around 2.8trillion so we are likely to see another 3 or 4 trillion printed this election year, which means no end to inflation till at least 2025 if rates dont go to at least probably 20% like during the Volcker years in the 80s and a major reset/recession is triggered.


----------



## over9k (27 April 2022)

bluekelah said:


> we are already in a hyperinflationary cycle. Inflation is actually very easily correlated to M2 Money supply. The M2 has increased from 15trillion just precovid to almost 22 trillion today. thats around 40% increase over 2 years(20%/year). Inflationary effects flow through in 1.5 to 2 years later, so we can expect inflation to be super high next couple years at least to 2024 if there are no major steps taken to stop M2 money creation. Last year US budget deficit ran around 2.8trillion so we are likely to see another 3 or 4 trillion printed this election year, which means no end to inflation till at least 2025 if rates dont go to at least probably 20% like during the Volcker years in the 80s and a major reset/recession is triggered.



No, incorrect: 




vs: 




Notice how everything really got moving back at the start of the year? You know, when the fears about the russian invasion first started? 

Not a coincidence.


----------



## mullokintyre (27 April 2022)

I am aware that some embers of the ASF are putting their faith in the miracle working powers of Saint Jerome, however, I just cannot  join the worshippers.

From  Wall street on parade


> The Federal Reserve (the Fed) is the central bank of the United States. It sets monetary policy, including control of the benchmark short-term interest rate known as the Federal Funds rate, or in Wall Street jargon, the “Fed Funds” rate. This is a key rate because it signals the rate at which overnight loans are made between financial institutions and the direction of interest rates in general.
> 
> Unfortunately, over time, the Fed has also been granted a supervisory role by Congress over Wall Street’s megabanks alongside its ability to bail them out when its crony brand of supervision fails. There was an epic failure in the Fed’s supervision of the Wall Street megabanks in the leadup to the 2008 financial crash and the September 2019 repo blowup. In both cases, the Fed made _trillions_ of dollars in cumulative loans at below-market interest rates to the trading units of these megabanks in order to resuscitate them and cover up its own failure to properly supervise the banks.



I am sure there are plenty of members of the ASF who remember the GFC , and what triggered that rather messy event.
It seems that  some entities just never learn.



> The convulsions the stock market experienced last Thursday and Friday, that investors will continue to witness in the days ahead, are inextricably tied to the failure of Congress to strip the Fed of a supervisory role over these global megabanks.
> 
> There is no better snapshot of the Fed’s failure as a banking supervisor than this one fact that is called out every quarter in the Office of the Comptroller of the Currency’s Report on Bank Trading and Derivative Activities. Table 14 of this report (see page 19) shows that the 25 largest bank holding companies in the U.S. are sitting on $234 _trillion_ notional (face amount) in derivatives but _just five_ bank holding companies are responsible for $200.18 trillion of that exposure or 86 percent of the total. Those mega bank holding companies are: JPMorgan Chase (ticker JPM), Citigroup (C), Goldman Sachs (GS), Morgan Stanley (MS) and Bank of America (BAC).
> 
> The table also clearly shows that the most dangerous form of these derivatives – the same credit derivatives that blew up Wall Street in 2008 – are also concentrated at those same five bank holding companies.



Its just a matter of time before the next Bear Stearns event pops up.
Watch the carnage then.
Mick


----------



## waterbottle (27 April 2022)

mullokintyre said:


> I am aware that some embers of the ASF are putting their faith in the miracle working powers of Saint Jerome, however, I just cannot  join the worshippers.
> 
> From  Wall street on parade
> 
> ...




I agree with the criticism of the Fed but there is no other alternative. We don't live in a reality where there is a perfect central bank that can prevent all financial disasters - and to be honest I don't think one ever could.

The St Jerome parable is mostly facetious, but there is some truth to it. Recall the miracle of March 2020. Mass unemployment and economies staring down the barrel of multiple companies imposing due to list income/business activities. And then from nowhere, St Jerome heralds in a $6 trillion godsend that averts global financial armageddon.

These sort of plays are characteristic of governments and central banks. When traders think they have everything figured out (particularly during corrections) and that the market should decline in some orderly, predictable and expected manner, some surprise policy, tool or facility gets introduced and whatever/whoever "should have happened" gets annihilated. 

More importantly, these plays are welcome and arguably necessary to save markets from themselves. Why should the wider economy (and society) suffer because of insane volatility or extended declines in what is essentially an abstract, electronic gambler's den (i.e the markets)?

The debate RE: interest rates is the perfect example of this. Calls for interest rates to start increasing to what they were in the 80s make no sense and are a knee-jerk, disastrous solution to a problem (inflation) that is still evolving, particularly when viewed in the historical context (declining interest rates being the norm).


----------



## qldfrog (27 April 2022)

waterbottle said:


> I agree with the criticism of the Fed but there is no other alternative. We don't live in a reality where there is a perfect central bank that can prevent all financial disasters - and to be honest I don't think one ever could.
> 
> The St Jerome parable is mostly facetious, but there is some truth to it. Recall the miracle of March 2020. Mass unemployment and economies staring down the barrel of multiple companies imposing due to list income/business activities. And then from nowhere, St Jerome heralds in a $6 trillion godsend that averts global financial armageddon.
> 
> ...



Note that i disagree on some points but this is an argumented position and you might be right.
so my like...


----------



## mullokintyre (27 April 2022)

waterbottle said:


> I agree with the criticism of the Fed but there is no other alternative. We don't live in a reality where there is a perfect central bank that can prevent all financial disasters - and to be honest I don't think one ever could.
> 
> The St Jerome parable is mostly facetious, but there is some truth to it. Recall the miracle of March 2020. Mass unemployment and economies staring down the barrel of multiple companies imposing due to list income/business activities. And then from nowhere, St Jerome heralds in a $6 trillion godsend that averts global financial armageddon.
> 
> ...



The interest rate arguments are in some respects, just a sideline to the real issue that was outlined, namely the way the FED supplied huge amounts of money to the leading  commercial banks, and the way they used it to create further  truck loads of artificial financial products that serve to do only one thing- namely to enrichen the banks.
It is arguable as to whether CDO's etc were of any use to the average citizens of the US, and arguable as to whether it was much use to the small and medium sized business entities in the US.
It is no accident that the gulf between the the haves and the have littles are so vast that the haves have become  completely opaque to the rest of the world.
Mick


----------



## Dona Ferentes (27 April 2022)

tell me how this isn't a product of unusual times. Shortage of truck drivers in USA:



> _Walmart drivers can now earn $110,000 in their first year.
> The national average is $56,491._












						Drive-In Opportunity: Walmart Raises Driver Pay and Launches Private Fleet Development Program
					

Throughout Walmart’s history, we’ve been committed to turning ambition into opportunity. In the last several years, we’ve cast a wide net, inviting associates from across the business to learn more, see more and do more.Now, we’re taking that same approach to the very foundation of our supply…




					corporate.walmart.com


----------



## mullokintyre (27 April 2022)

Dona Ferentes said:


> tell me how this isn't a product of unusual times. Shortage of truck drivers in USA:
> 
> 
> 
> ...



Guess it will just be a matter of time before OZ truckers start to emmigrate to the US.
Mick


----------



## CityIndex (27 April 2022)

The Q1 CPI print blew expectations out of the water, rising to record highs.

- YOY: 5.1% (est. 4.6%)
- QoQ: 2.1% (est. 1.7%) 

All trading carries risk, but should be interesting to see how this plays out for ASX tech stocks, as well as the Aussie Dollar, as traders will surely increase speculation of an RBA rate hike in May.


----------



## cribmogul (27 April 2022)

More inflation comments for those interested on the "_who benefits from inflation_" thread

cheers, cribmogul


----------



## over9k (27 April 2022)

It's the cutoff of russian oil guys, not the fed, jesus christ...


----------



## divs4ever (27 April 2022)

over9k said:


> Problem is, so much of it is supply side driven with the sanctions on russian oil. To be fair to the fed, that's well & truly beyond their control.
> 
> A supply side inflation spike means stagflation, this is a fact.



 actually more supply disruptions elsewhere have been pivotal ( Iraq , Syria , Libya , Yemen , Nigeria , policy decisions in the US and Canada ) Russia could have stopped exporting without almost being noticed  , if those other issues hadn't front-run the current situation 

 and China  jamming up it's ports added to the problem as well


----------



## divs4ever (27 April 2022)

over9k said:


> Lol. Two minutes later:
> 
> View attachment 140904
> 
> ...




 don't bother  , you would have to sit on a story until it was politically acceptable

 hard to look news-worthy if you have to wait for a politician  to understand the situation first


----------



## over9k (27 April 2022)

divs4ever said:


> actually more supply disruptions elsewhere have been pivotal ( Iraq , Syria , Libya , Yemen , Nigeria , policy decisions in the US and Canada ) Russia could have stopped exporting without almost being noticed  , if those other issues hadn't front-run the current situation
> 
> and China  jamming up it's ports added to the problem as well



Russia's almost 20% of global oil exports. IIRC, this last year, saudi arabia pumped its highest amount of oil in history.


----------



## divs4ever (27 April 2022)

over9k said:


> It's the cutoff of russian oil guys, not the fed, jesus christ...



 i don't think so , but it is going to be interesting to watch the EU put the final nail in it's own coffin 

 and i doubt J.C, would lift a finger to help the atheist EU


----------



## divs4ever (27 April 2022)

over9k said:


> Russia's almost 20% of global oil exports. IIRC, this last year, saudi arabia pumped its highest amount of oil in history.



 and some estimates are the Saudis are pumping the maximum ( sensible ) amount they can  ( give or take the odd Yemeni rocket/drone )


----------



## greggles (27 April 2022)

divs4ever said:


> Russia could have stopped exporting without almost being noticed




Huh? How could a country that accounted for about 45% of the EU's gas imports and 40% of its entire gas consumption stop exporting gas without being noticed?


----------



## mullokintyre (27 April 2022)

over9k said:


> It's the cutoff of russian oil guys, not the fed, jesus christ...



The inflationary pressures were there long before the Ukraine Invasion started.
Mick


----------



## divs4ever (27 April 2022)

greggles said:


> Huh? How could a country that accounted for about 45% of the EU's gas imports and 40% of its entire gas consumption stop exporting gas without being noticed?



  to EUROPE is the key  , there are ( much more ) expensive options 

 Europe gorged on cheap Russian energy  , and the US gorged  on cheap Chinese goods , neither tried to strengthen their own infrastructure  ( in fact both weakened  and complicated  their internal supply chains )

 if the EU had of resorted to fiscal restraint in 2007   we might be in a very different place now  ( ditto for the US )

 did many notice Germany is de-commissioning nuclear power plants  ( down to only three working ones now )

how desperate would Germany be with the original 6  power plants soldiering on ??


----------



## over9k (27 April 2022)

mullokintyre said:


> The inflationary pressures were there long before the Ukraine Invasion started.
> Mick



Rubbish. Oil/energy demand had absolutely plummeted. Oil prices even went negative at one point.

I posted a graph before showing how everything soared back at the start of the year/in january when the invasion fears first started. Unless your argument is that that is a coincidence...


----------



## 3 hound (27 April 2022)

The lack of truck drivers etc is  not unlike the situation in Europe after the plague that killed many farm workers. It basically destroyed the old lords and ladies of the land because the few workers left could for the first time demand whatever prices they wanted for their labour or the farms would not be farmed. The entire historical system collapsed in favour of the peasants who profited immensely.

The difference now is we haven't lost the workers to disease we lost them for refusing mask mandates and receiving hand outs to not work. Some will return to work, many will move on.


----------



## mullokintyre (27 April 2022)

over9k said:


> Rubbish. Oil/energy demand had absolutely plummeted. Oil prices even went negative at one point.
> 
> I posted a graph before showing how everything soared back at the start of the year/in january when the invasion fears first started. Unless your argument is that that is a coincidence...



WTC oil  hit a 20 year low  of sub $20 in March 2020 which coincided with the big dumps of shares due to Covid fears.



Since that time it rose to to $92.81 on the days prior to Russia invading Ukraine, on February 24th
This is an increase of  an increase of around  73 bucks or 320 + %.
SInce the invasion, the WTI crude high was $123.70.
Thats around a $31 increase, or a 34% increase if you like.
Its since fallen back of those highs, but we will stick with the low to high scenario.
So, to me, the charts were telling me that crude increased significantly before the invasion, with suggests that inflationary pressures were building long before the invasion.
You are perfectly entitled to take a different interpretation.
Mick


----------



## over9k (27 April 2022)

The russian invasion didn't just happen out of nowhere - there was weeks of buildup of troops, vehicles etc beforehand that everyone were quite rightly carrying on about. 

You need to go back to when markets first started getting worried about the invasion, aka at the start of the year. This isn't to say that energy consumption hadn't increased before then, but supply had not been nearly as cut off. The USD has actually increased dramatically since then too and is now at its strongest since the start of the pandemic: 





This is a SUPPLY problem.


----------



## Smurf1976 (27 April 2022)

waterbottle said:


> The debate RE: interest rates is the perfect example of this. Calls for interest rates to start increasing to what they were in the 80s make no sense and are a knee-jerk, disastrous solution to a problem (inflation) that is still evolving, particularly when viewed in the historical context (declining interest rates being the norm).



Declining interest rates might be the norm, a case of going up the elevator and down the stairs, but rates at present levels clearly are not normal and are at an extreme low point.


----------



## over9k (27 April 2022)

Smurf1976 said:


> Declining interest rates might be the norm, a case of going up the elevator and down the stairs, but rates at present levels clearly are not normal and are at an extreme low point.



Interest rates are far more of a demand lever than a supply though. 

As I keep trying to point out, the fed can't control the sanctions on russian oil/gas.


----------



## moXJO (27 April 2022)

Dona Ferentes said:


> tell me how this isn't a product of unusual times. Shortage of truck drivers in USA:
> 
> 
> 
> ...



It's retention of truck drivers from my understanding. No one wants to drive for days on end and not see there family. 

They were having trouble keeping people. Same with factory work.


----------



## 3 hound (27 April 2022)

moXJO said:


> It's retention of truck drivers from my understanding. No one wants to drive for days on end and not see there family.
> 
> They were having trouble keeping people. Same with factory work.



This is not new for trucking, the question is why now - did they get rich or "earn to code" as per Obama's epic advice.


----------



## moXJO (27 April 2022)

3 hound said:


> This is not new for trucking, the question is why now - did they get rich or "earn to code" as per Obama's epic advice.



Online shopping went ballistic during covid.
Younger people don't want jack of these shtty jobs. You can just walk into another job right now.  The older reliable truck drivers are all retiring.


----------



## divs4ever (27 April 2022)

over9k said:


> Rubbish. Oil/energy demand had absolutely plummeted. Oil prices even went negative at one point.
> 
> I posted a graph before showing how everything soared back at the start of the year/in january when the invasion fears first started. Unless your argument is that that is a coincidence...



 yes demand had plummeted  , but so had supply BEFORE the virus  , Venezuela , Nigeria , Libya , Syria , Iraq ( and sanctioned Iran )   the global economy had destroyed a lot of redundancy  even before Trump was elected in 2016 

 and many folks get very nervous about things going wrong  without a safety net  , did they over-react probably , everyone is busy lying about the figures ( national security , you know ) , most can only make educated guesses 

 have we an oil shortage now , or is the oil in inconvenient places ( like South America , Africa  and undeveloped  deposits )


----------



## divs4ever (27 April 2022)

moXJO said:


> Online shopping went ballistic during covid.
> Younger people don't want jack of these shtty jobs. You can just walk into another job right now.  The older reliable truck drivers are all retiring.



 yes , but several ex-truckies i know were retiring early from health issues  , as well


----------



## 3 hound (27 April 2022)

moXJO said:


> Online shopping went ballistic during covid.
> Younger people don't want jack of these shtty jobs. You can just walk into another job right now.  The older reliable truck drivers are all retiring.



"Shitty jobs" is a bit condescending and snobby mate, what does that say about the guys that do it.

Do you understand many people love trucks and the truck driving lifestyle. They are not all people desperate and out of options. In fact through the lock downs truckers worldwide were deemed essential workers - they weren't deemed shitty job guys.


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## divs4ever (27 April 2022)

3 hound said:


> "Shitty jobs" is a bit condescending and snobby mate, what does that say about the guys that do it.
> 
> Do you understand many people love trucks and the truck driving lifestyle. They are not all people desperate and out of options. In fact through the lock downs truckers worldwide were deemed essential workers - they weren't deemed shitty job guys.



as a person who has done some of those low-paying jobs  ..sh*tty can be rather accurate , in some places there is no pride , no morale , no sense of accomplishment  , now i have never driven a truck ( professionally ) but have worked on a few loading docks , and packed/unpacked a few containers  , so have mixed with a few truckers  .. and the key word for their skill is RESPONSIBILITY  , when things go wrong they can go VERY wrong  , and not only their own lives are at risk , but sometimes others as well ( not to mention the value of the rig and any cargo )

 BTW  i have seen management  ( and customers) of a delivery  treat the drivers like sh*t as well ( and have been surprised when a knuckle sandwich  didn't  come  free with the delivery )

 it's a rough game  and i am not surprised when many retire early (  whether from health reasons or not ) ( BTW i have known at least one that drove through a house whilst dying from a heart attack  , so stressing them out is not so great an idea )


----------



## over9k (27 April 2022)

3 hound said:


> "Shitty jobs" is a bit condescending and snobby mate, what does that say about the guys that do it.
> 
> Do you understand many people love trucks and the truck driving lifestyle. They are not all people desperate and out of options. In fact through the lock downs truckers worldwide were deemed essential workers - they weren't deemed shitty job guys.



I think he's more referring to how the companies treat their people. A grad job at a big 4 is considered shitty by anyone except idiots now too.

There's no shortage of jobs that are just fcuking awful, I'd go and get an apprenticeship as (whatever) long before I did warehouse work for example.


----------



## over9k (27 April 2022)

Meanwhile, on a surprisingly green day, there's a lot of talk about whether we've now found a support level:


----------



## over9k (27 April 2022)

3 hound said:


> The lack of truck drivers etc is  not unlike the situation in Europe after the plague that killed many farm workers. It basically destroyed the old lords and ladies of the land because the few workers left could for the first time demand whatever prices they wanted for their labour or the farms would not be farmed. The entire historical system collapsed in favour of the peasants who profited immensely.
> 
> The difference now is we haven't lost the workers to disease we lost them for refusing mask mandates and receiving hand outs to not work. Some will return to work, many will move on.



QFT.


----------



## divs4ever (28 April 2022)

over9k said:


> I think he's more referring to how the companies treat their people. A grad job at a big 4 is considered shitty by anyone except idiots now too.
> 
> There's no shortage of jobs that are just fcuking awful, I'd go and get an apprenticeship as (whatever) long before I did warehouse work for example.



i hope so , but  some companies  are absolutely lacking in team spirit 

 BTW the three months i was apprentice  ( i left because of health issues ) was one of the best places i have worked ( safely in the top 3 )

 but it was a small family run business ( doomed to be taken-over later )  sadly  it was a time when apprenticeships were rare  , so the next job was a LARGE warehouse ( with an equally rapid turnover of staff ) that corporation is still an ASX top 20 company ( so karma doesn't always work )


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## divs4ever (28 April 2022)

well unless truckers get paid more than i think they do  , they have a big responsibility on their backs  and sometimes given some crazy situations  ( you should have seen some of the containers i have unpacked  , feels like i have seen everything  bar a live crocodile or a dead migrant .. those international ones  can be a real surprise package )

 mind you   i did have a driver rock up  with the diesel  tied on with  a rope !! and when he turned using full lock  the tank fell off ( round ones back then ) and  rolled about 10 metres  across the lot  , awesome fun  getting it back on so the truck could be backed into the dock ( lucky it was diesel  or we might have lit  up some lurkers smoking around the corner ) .. and had a distinctive aroma  for the last half of the day 

 but thank goodness it was way back then , nowdays there would be an hour's paperwork over the incident  , and questionnaire about potential solutions ( and i would still stink of diesel )


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## moXJO (28 April 2022)

3 hound said:


> "Shitty jobs" is a bit condescending and snobby mate, what does that say about the guys that do it.
> 
> Do you understand many people love trucks and the truck driving lifestyle. They are not all people desperate and out of options. In fact through the lock downs truckers worldwide were deemed essential workers - they weren't deemed shitty job guys.



It's a shitty job. All my mates that are truck drivers say the same. Always on the road, a heap of broken families, Long hours, unhealthy and the list goes on.

Not shitty as in "status to other jobs".
Pays well if you put in the hours.

I was a tradie ffs. That was a shitty job for a lot of reasons.


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## over9k (28 April 2022)

Anyways, point in all of this is that it's simple market forces at work: Want people to do things, need to pay them to do them.


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## Smurf1976 (28 April 2022)

over9k said:


> I think he's more referring to how the companies treat their people.



Being drenched day after day in the rain or working a 12/7 roster is very doable when the company's good in terms of management and so on. Been there, done that in the past.  

If the company's a dud however well they're going to have a lot of issues keeping staff in the current environment and will need to pay $$$ to get people.

How wage inflation impacts a business depends on more than just the labour market itself. If the management's top then workers will accept being paid less than if the management's crap.


----------



## over9k (28 April 2022)

Looks like we might be at the tipping point


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## moXJO (28 April 2022)

over9k said:


> View attachment 140983
> 
> 
> Looks like we might be at the tipping point



China is going to have major disruptions if "covid zero" is the constant target.


----------



## waterbottle (29 April 2022)

US GDP figures overnight of a 1.1% *contraction *compared to 6.9% growth in the preceding quarter! 

Don't know how they can raise rates hard if the next figures print negative GDP aka recession. 

My thoughts & prayers go out to the Fed


----------



## Value Collector (29 April 2022)

moXJO said:


> China is going to have major disruptions if "covid zero" is the constant target.



It’s a bit like australia, once they realise that they can’t control it, they will accept it and have to live with it.


----------



## moXJO (29 April 2022)

Value Collector said:


> It’s a bit like australia, once they realise that they can’t control it, they will accept it and have to live with it.



I suppose with the density around the cities, it would have caused delays/disruption if infection spread anyway.


----------



## Value Collector (29 April 2022)

moXJO said:


> I suppose with the density around the cities, it would have caused delays/disruption if infection spread anyway.



Yeah, it’s a bad situation that they have to just get though it and get to the other side, but they seem to want to avoid the pain.


----------



## moXJO (29 April 2022)

Value Collector said:


> Yeah, it’s a bad situation that they have to just get though it and get to the other side, but they seem to want to avoid the pain.



I wonder if the rumours about wanting to take Taiwan sooner is the reason that they are keeping covid at bay. You would expect the window to be narrowing given China's aging demographic.


----------



## waterbottle (29 April 2022)

France reports GDP of 0%.... Below expectations of 0.3%. Hmmmm


----------



## over9k (29 April 2022)

Relevant


----------



## waterbottle (30 April 2022)

NASDAQ down another 4%, now at late 2020 levels. How much lower can a 0.5% rate rise push it?


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## qldfrog (30 April 2022)

waterbottle said:


> NASDAQ down another 4%, now at late 2020 levels. How much lower can a 0.5% rate rise push it?



A good excuse not to raise or just once, and let hyperinflation ramping


----------



## over9k (30 April 2022)

waterbottle said:


> NASDAQ down another 4%, now at late 2020 levels. How much lower can a 0.5% rate rise push it?



0.75 move's all but price in to the bond markets now so if you want to know when it'll stop, watch that.


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## over9k (3 May 2022)

Now looking for a support level.


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## over9k (3 May 2022)

Current thoughts are 25 basis points at each RBA meeting vs first three meetings of the fed being 50's and then 25's after that. 

Remember that the RBA meets monthly (exception of january) whereas the fed meets 8 times per year. 

So a more linear move over here in aus but the end of the year ending up pretty much in the same place.


----------



## over9k (3 May 2022)




----------



## waterbottle (3 May 2022)

over9k said:


>





Permabears  . Next you're going to quote Peter Schiff/Marc Faber and tell me we should be hoarding gold and shotgun shells.


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## over9k (3 May 2022)

Or in @moXJO 's case, silver.


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## JohnDe (3 May 2022)

> *Pandemic binge on sweeties leaves us high on inflation*
> 
> The release of the latest inflation figures has put a cat among the pigeons when it comes to the election campaign.
> 
> ...


----------



## waterbottle (3 May 2022)

Small moves by the RBA... makes me think the Fed is going for 0.5% rather than the possible 0.75% that market is pricing in.

Also to note from Lowe's statement is that inflation is expected to peak at 6% in 2022 (last measure was 5.1%), before moderating to 2-3% by 2024, all while increasing interest rates. They're basing this on the resolution of supply-side constraints, although not too sure if that's occurred with China being subjected to shutdowns thanks to a zero-covid policy.

Interesting times, but I feel an appropriate response given how tenuous the situation is.


----------



## 3 hound (3 May 2022)

From the article;

"It would now seem the MMT experiment, here and overseas, has failed. We are left with an intractable situation in which cost-of-living pressures are likely to increase significantly but now the government and the Reserve Bank essentially are impotent to do much about these pressures without hurting the economy."

Chilling given how much money has been printed.


----------



## waterbottle (3 May 2022)

3 hound said:


> From the article;
> 
> "It would now seem the MMT experiment, here and overseas, has failed. We are left with an intractable situation in which cost-of-living pressures are likely to increase significantly but now the government and the Reserve Bank essentially are impotent to do much about these pressures without hurting the economy."
> 
> Chilling given how much money has been printed.



Reset incoming?


----------



## 3 hound (3 May 2022)

waterbottle said:


> Reset incoming?



Well some are pushing for "the great reset" but I don't think it's the reset people here (including me) want to see happen.

I think reset in modern parlance refers to forced wealth redistribution from haves to have nots.


----------



## divs4ever (4 May 2022)

3 hound said:


> From the article;
> 
> "It would now seem the MMT experiment, here and overseas, has failed. We are left with an intractable situation in which cost-of-living pressures are likely to increase significantly but now the government and the Reserve Bank essentially are impotent to do much about these pressures without hurting the economy."
> 
> Chilling given how much money has been printed.



 sadly the folks that love MMT are likely to double , triple and even quadruple  down ,

 what comes next will be epic ( a miracle if good , a mess if not )


----------



## divs4ever (4 May 2022)

3 hound said:


> Well some are pushing for "the great reset" but I don't think it's the reset people here (including me) want to see happen.
> 
> I think reset in modern parlance refers to forced wealth redistribution from haves to have nots.



 there will have to be a 'great reset ' now  but would you let the folks  that pondered , studied and war-gamed it for twenty plus years , be in control of anything ( even a pay-toilet )

 sadly  'want' is no longer an option  , what type of reset still maybe  ( back to gold and barter  , small local governments and start all over again building a community built on MUTUAL trust )

 forced redistribution  kills productivity , initiative , and creativity , even the Soviets discovered that , eventually  ( but the great reset agenda plans that for you  but NOT for them )


----------



## Smurf1976 (4 May 2022)

3 hound said:


> It would now seem the MMT experiment, here and overseas, has failed.



What irritates me is that the outcome was not only predictable, but actually predicted by many meanwhile the advocates for this approach ridiculed those pointing out the obvious flaws right up to the point it all started to go pear shaped.

That's referring to society overall not to others on this forum.


----------



## divs4ever (4 May 2022)

yes MMT is  doomed to fail  because of human ( and politician's ) nature 

 and was very surprised to find an example of it working in Australia  ... until politicians , and corporations got involved  .. and self-interest did the rest ( just like currently in many places )


----------



## over9k (4 May 2022)

Not the worst call I've made


----------



## over9k (5 May 2022)

Aaaaand 50 basis point rise decided, 75 not happening: 




50 is on the table for the next "two meetings".


----------



## waterbottle (5 May 2022)

over9k said:


> Aaaaand 50 basis point rise decided, 75 not happening:
> 
> View attachment 141256
> 
> ...




Thank you St Jerome, my prayers have been answered.


Interesting to note the inflationary drivers they're considering are Russia-Ukraine and China lockdown. These will likely be temporary drivers of inflation, so I suspect interest rates won't be increasing too far or remaining elevated for too long


----------



## qldfrog (5 May 2022)

waterbottle said:


> Thank you St Jerome, my prayers have been answered.
> 
> 
> Interesting to note the inflationary drivers they're considering are Russia-Ukraine and China lockdown. These will likely be temporary drivers of inflation, so I suspect interest rates won't be increasing too far or remaining elevated for too long



Elevated? You are joking are you?
as long as negative real interest are around, inflation will carry on .
simple logic..you take a loan to buy something even for a car !!! and sell it a couple years later for more.


----------



## over9k (5 May 2022)

waterbottle said:


> Thank you St Jerome, my prayers have been answered.
> 
> 
> Interesting to note the inflationary drivers they're considering are Russia-Ukraine and China lockdown. These will likely be temporary drivers of inflation, so I suspect interest rates won't be increasing too far or remaining elevated for too long



Nah it's going to be the opposite waterbottle - china's lockdowns actually slaughtered demand. Once they're lifted, energy demand will only increase rapidly again, hence my posts a few days back showing how much of a beautiful dip this was. Chinese good manufacturing will only INCREASE inflation as the energy demand increase will far outweigh the export supply increase as china obviously has a huge internal market that demands its stuff (and therefore production of it) as well.  

The russian pipeline network is now a ticking time bomb reference either crumbling from lack of maintenance or partisans blowing it to bits. There's MORE russian oil to be cut off non-deliberately yet, and there won't be anyone to fix the wells freezing over, lines bursting etc as all the western companies have left. 

Then we have seasonality to contend with heading later into the year as well as everything gets frozen over/wrecked by the cold. Remember what happened to heating oil, gas prices etc back at the start of the year? 

I'm as bullish as it gets on energy moving forward. I threw another 10k into the dip I pointed out before (made my main play for it back at the start of the year as soon as the invasion became apparent) and am honestly only kicking myself I didn't put more in on the 25th. 

I'm hoping we'll get a little dip over the next few days or week that I can add a bit more to.


----------



## waterbottle (5 May 2022)

over9k said:


> Nah it's going to be the opposite waterbottle - china's lockdowns actually slaughtered demand. Once they're lifted, energy demand will only increase rapidly again, hence my posts a few days back showing how much of a beautiful dip this was. Chinese good manufacturing will only INCREASE inflation as the energy demand increase will far outweigh the export supply increase as china obviously has a huge internal market that demands its stuff (and therefore production of it) as well.
> 
> The russian pipeline network is now a ticking time bomb reference either crumbling from lack of maintenance or partisans blowing it to bits. There's MORE russian oil to be cut off non-deliberately yet, and there won't be anyone to fix the wells freezing over, lines bursting etc as all the western companies have left.
> 
> ...




Interesting theory! But what makes you think that China's manufacturers recovering will be net pro-inflationary? 
Forecasts for POO were at $150-200/bl when Russia started their invasion - these costs haven't materialised. 
Governments recognise the importance of energy security so I doubt the geopolitical factors contributing to limited oil supply in Feb 2022 will be the same come Feb 2023. Keep in mind the US and the West are trying to source alternative oil sources, Saudis are trying pump harder and the green economy transition that is already under way....


----------



## waterbottle (5 May 2022)

qldfrog said:


> Elevated? You are joking are you?
> as long as negative real interest are around, inflation will carry on .
> simple logic..you take a loan to buy something even for a car !!! and sell it a couple years later for more.




No, I'm serious. 

Inflation is built into the system. It's the whip that keeps the donkey moving forward to the carrot. 
Listen to the speech that St Jerome's have today - central banks *want *long periods of expansion. They want inflation at 2-3%, but will tolerate short periods of higher inflation. The Fed acknowledges that the past year has been unprecented due to unforeseen "inflationary shocks"  I. E. Russia and China, and I suspect that they are blaming them for the "failed" transitory inflation theory (probably mistimed). 
The Fed acknowledges that the past 2 months of data shows inflation declining *but* it is isn't sustained enough for them to base any policy decisions off.


----------



## JohnDe (5 May 2022)

> Macquarie Bank’s Viktor Shvets warns us to expect disinflation in two years
> 
> Macquarie Bank’s Viktor Shvets expects runaway global inflation to swing back to disinflation very quickly, and for the US Federal Reserve to back off from its aggressive rate-rising strategy in as little as 12 months.
> 
> ...


----------



## qldfrog (5 May 2022)

waterbottle said:


> No, I'm serious.
> 
> Inflation is built into the system. It's the whip that keeps the donkey moving forward to the carrot.
> Listen to the speech that St Jerome's have today - central banks *want *long periods of expansion. They want inflation at 2-3%, but will tolerate short periods of higher inflation. The Fed acknowledges that the past year has been unprecented due to unforeseen "inflationary shocks"  I. E. Russia and China, and I suspect that they are blaming them for the "failed" transitory inflation theory (probably mistimed).
> The Fed acknowledges that the past 2 months of data shows inflation declining *but* it is isn't sustained enough for them to base any policy decisions off.



Ohh yes they want inflation, but it is now beyond their control.
Our western fiat currencies are heading to a slaughter
Look at USD vs Rubble..
Fiats are doomed so which trick is Jerome going to pull out
Start releasing rates in 6 months as the economy and markets collapse with 15% inflation ?
I see no end but hyperinflation and currency destruction so what's next? a crypto dollar ? Pushing Putin a bit more and have the EU in a nuclear cloud then start a rebuild plan?
And where does this leaves us in OZ with Mr Xi ?
Difficult times and no easy solution anymore..we are paying GFC central banks and gov incompetence with a multiplying factor IMHO


----------



## waterbottle (5 May 2022)

qldfrog said:


> Ohh yes they want inflation, but it is now beyond their control.
> Our western fiat currencies are heading to a slaughter
> Look at USD vs Rubble..
> Fiats are doomed so which trick is Jerome going to pull out
> ...




Does it really matter what happens to currency? The USD isn't the only fiat crumbling - all fiat's are, and that is by design. So long as the populace recognises and respects the fiat of the day, and continue to transact in it, then it really doesn't matter how many 0s there are before the decimal point. 

Money is only a representation of goods and services. AFAIK the USD is the best thing we have for this function. Crypto is unstable and speculative as demonstrated by several iterations of the same product and wild price action. 
Commodities are not flexible enough and can't be manipulated to serve the purpose of governments /banks. 
Fiat is really the best, worst solution...


----------



## divs4ever (5 May 2022)

waterbottle said:


> Thank you St Jerome, my prayers have been answered.
> 
> 
> Interesting to note the inflationary drivers they're considering are Russia-Ukraine and China lockdown. These will likely be temporary drivers of inflation, so I suspect interest rates won't be increasing too far or remaining elevated for too long



 good luck with that 

 i am thinking the opposite will occur 

 the first assumption i disagree with   is i think the China lock-downs are political , not medical ( all war is based on deception  , - Sun Tzu )

 and Russia is now deciding how to return fire now it's enemies have declared a side ( before they were just customers )

 AND neither is the core reason  inflation spiraled out of control  ,  the problems had been brewing for years  because national governments  avoided the painful medicine ( fiscal restraint and BUDGET surpluses ) ( i have been noticing these issues . apart from the virus response , since 2012 , thinking 2013  things would unravel back then )


 AND inflation isn't  your long-term problem  , it is the nasty crash at the end when the 90%  realize their standard of living has been trashed ( while others actually profited  because they were 'insiders '  on the pain and misery )

 cheers


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## over9k (5 May 2022)

waterbottle said:


> Interesting theory! But what makes you think that China's manufacturers recovering will be net pro-inflationary?
> Forecasts for POO were at $150-200/bl when Russia started their invasion - these costs haven't materialised.
> Governments recognise the importance of energy security so I doubt the geopolitical factors contributing to limited oil supply in Feb 2022 will be the same come Feb 2023. Keep in mind the US and the West are trying to source alternative oil sources, Saudis are trying pump harder and the green economy transition that is already under way....



Because a lot of it is beyond their control. When the infrastructure for 3 million barrels a day of russian oil is either blown up or crumbles from lack of maintenance, what then? 

Remember back when the lockdowns first hit: Everything, but most of all, energy, PLUMMETED. We didn't see any big inflation in anything other than tech really, precisely because everyone were at home and therefore NOT going out and doing stuff/consuming energy. 

Bring that demand back online with 25% of the world's oil offline and it's a massacre. You might have increased the supply of whatever you're producing (microchips or steel or whatever) but you've increased demand for the very energy necessary to produce them. 

Green energy is no substitute for coal/oil and this is something all the woke countries have learned the very hard way over the last few months. Take a look at ICLN (clean energy etf) vs IXC (big oil etf) year to date to get an idea: 




If anything, the last 4 months has actually exposed green energy for the complete fool's errand that it is.


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## divs4ever (5 May 2022)

waterbottle said:


> Does it really matter what happens to currency? The USD isn't the only fiat crumbling - all fiat's are, and that is by design. So long as the populace recognises and respects the fiat of the day, and continue to transact in it, then it really doesn't matter how many 0s there are before the decimal point.
> 
> Money is only a representation of goods and services. AFAIK the USD is the best thing we have for this function. Crypto is unstable and speculative as demonstrated by several iterations of the same product and wild price action.
> Commodities are not flexible enough and can't be manipulated to serve the purpose of governments /banks.
> Fiat is really the best, worst solution...




 yes  , BUT a currency is also a symbol of trust in the government ( and their economic management )


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## divs4ever (5 May 2022)

over9k said:


> Because a lot of it is beyond their control. When the infrastructure for 3 million barrels a day of russian oil is either blown up or crumbles from lack of maintenance, what then?
> 
> Remember back when the lockdowns first hit: Everything, but most of all, energy, PLUMMETED. We didn't see any big inflation in anything other than tech really, precisely because everyone were at home and therefore NOT going out and doing stuff/consuming energy.
> 
> ...



China will be quite willing  to help and JV , with their ( new ) major supplier ( in many commodities )

 Russia isn't exacting a stone-age economy  , but they build things that are robust and durable ( and sure they look crude and lack refinement  but they will do so for 20 years or more , with minimal upkeep )  they will create the infrastructure need , and the Chinese will see it is in their best interests to help where they can 

 the confounding factor will be how much will India participate in the mix  ( they are  sending exploration probes to Mars  , so they are quite technologically capable as well )


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## over9k (5 May 2022)

divs4ever said:


> China will be quite willing  to help and JV , with their ( new ) major supplier ( in many commodities )
> 
> Russia isn't exacting a stone-age economy  , but they build things that are robust and durable ( and sure they look crude and lack refinement  but they will do so for 20 years or more , with minimal upkeep )  they will create the infrastructure need , and the Chinese will see it is in their best interests to help where they can
> 
> the confounding factor will be how much will India participate in the mix  ( they are  sending exploration probes to Mars  , so they are quite technologically capable as well )



India's power generation is overwhelmingly coal but they're already trying to turn the screws on the russians to send them cheap oil, but fact is that india is right next to the persian gulf, has unrestricted access to the oceans, and a very young population (read: supply of labour and demand for consumer goods). India will be to the next 30 years what china was to the last 30. 

A huge part of the russian infrastructure was built (and continued to be maintained) by western companies like schlumberger. Things like the pipelines going from the baku fields (the caspian sea) across to the black sea to be loaded into tankers that then ship to the wider world. Those companies are GONE. So what happens once things start breaking and there's nobody left to fix them? 

OPEC are already pumping pretty much flat out and you can't just bring millions of barrels a day of oil online and delivered in five minutes. Fact is we have sanctions on ~5 million barrels a day of russian oil at the moment and about another ~3 million that's going to go offline when it crumbles from lack of maintenance or simply having to be switched off in the cold (which wrecks it anyways). 

Remember that a lot of russian oil comes from areas with permafrost - it's not as simple as just opening or closing the taps in a -40 environment.


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## over9k (5 May 2022)

The only thing that really has me worried is the U.S president's ability to restrict or outright ban ALL u.s oil exports. If that happens, the effect will be seismic.


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## divs4ever (5 May 2022)

over9k said:


> The only thing that really has me worried is the U.S president's ability to restrict or outright ban ALL u.s oil exports. If that happens, the effect will be seismic.



i think seismic  is baked into the cake , regardless of US decisions , a lot of OPEC is now US-neutral ( or unfriendly )

you should be worried about US imports  Joe is already killing US production ( and not just oil  , you will have US steel  costs screaming past the Moon )


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## divs4ever (5 May 2022)

over9k said:


> India's power generation is overwhelmingly coal but they're already trying to turn the screws on the russians to send them cheap oil, but fact is that india is right next to the persian gulf, has unrestricted access to the oceans, and a very young population (read: supply of labour and demand for consumer goods). India will be to the next 30 years what china was to the last 30.
> 
> A huge part of the russian infrastructure was built (and continued to be maintained) by western companies like schlumberger. Things like the pipelines going from the baku fields (the caspian sea) across to the black sea to be loaded into tankers that then ship to the wider world. Those companies are GONE. So what happens once things start breaking and there's nobody left to fix them?
> 
> ...



Mongolia , North Korea and Russia  have plenty of coal  ( and if they overthrow the regime in QLD  , they has some undeveloped  coal as well  , ready to go brownfields )
 i am guessing India will increase the use of other energy sources  , to improve the resilience  of the power grid .. for example Russia or China would probably be willing to build nuclear power plants in India for a price


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## divs4ever (5 May 2022)

BTW if i was a US oil producer ( operating on US soil ) i wouldn't be rushing  to upgrade/repair plant  , given the current policy narrative , i could be shut down next month  to meet carbon targets


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## Value Collector (5 May 2022)

divs4ever said:


> yes  , BUT a currency is also a symbol of trust in the government ( and their economic management )



In some ways, but I think it’s more about trust in a country’s reserve bank and the country’s underlying economy, which pollies  like to pretend they control, but which are largely independent.


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## divs4ever (5 May 2022)

well the Russia sanctions made foreign reserves ( potentially )  worthless  , they may as well be in Doge coin 

 the last time i had the tiniest bit of faith/hope in the RBA  was November 2016 when they had a cheap opportunity to shock the market ( in a usable fashion )

 and if you go outside government budgeting  , you are talking trade balances ( which would be the nirvana  if it were actually a free-market )

but bureaucrats and politicians need to be appear relevant ... so the 'market' ( international or otherwise ) is intervention central


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## over9k (5 May 2022)

To state the bleeding obvious, the companies that are most outside of the U.S stand to benefit the most if Biden shuts the U.S exports off. I'm grabbing some KSA tonight and going to keep digging for what else I can grab. Finding the supermajors' production & revenue by region is proving surprisingly difficult. Statista doesn't seem to have data on anything but shell. I might have to go digging through their annual reports one by one. 

Looks like a busy night ahead.


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## over9k (5 May 2022)

2 mins later:





China lockdowns estimated to have K.O'd about a million a day of demand. EU's currently talking to USA etc about total russian ban by year end. I can't see how they can even think about this without U.S oil which means that the yanks will have to supply europe if they want european sanctions on russia to stick. 

Encouraging.


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## over9k (5 May 2022)

@Smurf1976 Feel free to chime in with anything you think I've missed here.


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## divs4ever (5 May 2022)

yes i suspected  , that OPEC   was somewhere near  sustainable peak production ( there is always something needing repair  , or maintenance  )

 and well Russia will be fully occupied servicing Asian customers ( and a  handful or European nations )

 looks like all those oil wars  have come back to devour ( Europe )


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## divs4ever (5 May 2022)

BTW  you should be examining the latest Kremlin decree  , Russia seems to have made it's first move ( and it is probably enforceable )


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## Smurf1976 (6 May 2022)

waterbottle said:


> Interesting to note the inflationary drivers they're considering are Russia-Ukraine and China lockdown. These will likely be temporary drivers of inflation



China I agree could be temporary, albeit with the prospect of recurrence, but I really can't see the world being keen on sourcing goods from Russia anytime soon.

Unless something changes, that could end up as a generational conflict in my view.


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## divs4ever (6 May 2022)

Smurf1976 said:


> China I agree could be temporary, albeit with the prospect of recurrence, but I really can't see the world being keen on sourcing goods from Russia anytime soon.
> 
> Unless something changes, that could end up as a generational conflict in my view.



  as a result of the current sanctions  , i would think Russia would be extremely reluctant to sell anything at all to 'unfriendly nations '  for an extended  period of time  and may even repeat the 'Iron Curtain '  for another seventy plus years 

 so is that one generation  ( seen to be 20 to 30 years ) or an open-ended time-line  ( 20 years plus )

 given recent events i see China  working hard to help develop under-developed nations , removing cheap labour sources  for Western goods


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## Smurf1976 (6 May 2022)

over9k said:


> @Smurf1976 Feel free to chime in with anything you think I've missed here.



A few thoughts on the energy stuff (keeping the focus on the financial more than the engineering):

At the consumer (that is, the actual machine that's using the energy) level in some situations energy sources are interchangeable, in others they're not. For examples:

A car needs petrol / diesel and that's the only thing it can use to power it. To use anything else requires fitting a new engine or, more likely, replacing the entire vehicle.

Aircraft are even stricter on fuel specifications.

On the other hand, electricity is electricity regardless of how it was produced. If the price of gas drops below the price of coal well then it's dead easy to burn more gas and less coal.

In some cases that can be done in the same power station simply by changing what fuel it burns (and in some cases that switch can be made with the plant remaining at full output uninterrupted) but it's also about changing which ones run flat out constantly (base load) and which are backed off when demand is down. Coal doesn't have unlimited flexibility there, it's inferior to oil or gas in that regard, but it does have a reasonable amount. If price warrants then coal can be turned down roughly half way (varies depending on the facility in question, it's in the 30 - 70% range for any individual facility) at off-peak times and gas left running yes, it's doable within technical limits if there's a financial reason to.

Put that all together and there are two classes of energy consumption:

1. Just need anything that burns and have at least some ability to switch between fuels. Might not be able to totally eliminate oil, gas or coal but there's reasonable ability to shift.

2. Locked in and there's zero flexibility. If your heating needs natural gas and your car needs petrol well then coal, hydro or nuclear aren't going to help in the slightest.

The ability of those in group 1 to shift production can (does) balance physical markets to some extent. Eg there have been plenty of credible reports of switching from LNG to fuel oil for power generation in some countries over the past few months, that being driven by purely economic considerations. So that drops LNG consumption and raises oil consumption very directly.

Once it gets outside that however, once all those who can switch away from a high cost fuel to a cheaper one have done so, well then it's game on.

Future use of EV's aside, motorists are locked into petrol / diesel right now. That goes for everyone from motorcycles to road trains. Wherever the oil price goes they've got no choice but to pay it if they want to keep driving.

Same with gas heating and this one is particularly relevant. The average house in the UK (for example) has a gas boiler in the kitchen which provides heating, via hydronic radiators, to the whole house. That boiler burns gas and nothing else. Same goes for much of Europe, it's all hydronic heating with gas boilers or, if gas isn't available, the boiler is oil-fired. Assuming the occupant doesn't wish to shiver through winter, there's no real choice other than to pay whatever it costs.

That dynamic, the lack of ability to shift to any alternative, can and will push prices to extreme levels once the ability to contain it within group 1 users (power generation etc) is breached and that's exactly what happened this past northern winter, gas prices went through the roof across the EU and UK (in this context there's no practical distinction between the UK and EU since physically it's one interconnected system).

Now for the shocker and this one's closer to home......

Natural gas price in Victoria during 2021 was $6 - $8 per GJ most of the year.

January 2022 it was $10 in round figures.

Now for the ride we've had over the past few days. This is actual spot price data from AEMO and is thus "official".

Prices are set in 4 hourly blocks, that's how the industry works, and the times I've shown are the start of each block. Eg 10:00 means 10:00 to 13:59 and so on.

Exception is overnight as there's no 2am period, a single price applies 22:00 - 06:00. That's just how it's done, one of those things just to be aware of.

2 May @ 18:00 = $15.60
2 May @ 22:00 = $15.65

3 May @ 06:00 = $16.12
3 May @ 10:00 = $16.39
3 May @ 14:00 = $16.73
3 May @ 18:00 = $16.90
3 May @ 22:00 = $16.72

4 May @ 06:00 = $17.14
4 May @ 10:00 = $16.90
4 May @ 14:00 = $17.00
4 May @ 18:00 = $17.35
4 May @ 22:00 = $19:10

5 May @ 06:00 = $19.24
5 May @ 10:00 = $19.10
5 May @ 14:00 = $22.00
5 May @ 18:00 = $23.64
5 May @ 22:00 = $22.99

So what happened? How did we end up with a more than 50% price jump in 3 days?

Weather!

Daily maximum temperatures for Melbourne (Olympic Park BOM site):

2 May = 22.1
3 May = 20.7
4 May = 16.4
5 May = 14.1

Gas is the predominant method of heating buildings in Victoria such that as the temperature drops, consumption soars indeed typical winter consumption is triple that of summer and on a particularly cold day that becomes quadruple.

This screenshot of the AEMO public website shows it clearly. Blue on the chart is gas consumption, purple line is price:



So there you have it and what it comes down to is that supply really just isn't there. Demand increased to 906 TJ (terajoules) on the 6th May, from 687 TJ on the 5th and 465 TJ on the 4th due to the weather and up goes the price.

Now I'll point out a few things:

906 TJ isn't particularly high. Through winter daily demand over 1000 TJ is routine and at the extreme it tops 1200 TJ.

It's not actually winter yet! It's only May and we're right at the very beginning of the heating season, this is literally the first days of significant heating use for 2022. There's the whole winter season yet to come!

The ACCC's calculated LNG netback price, which can be found on their website, is as follows:

May 2022 (actual data based on contracts etc) = $38.09

June 2022 = $27.04
July 2022 = $26.47
August 2022 = $27.06
September 2022 = $29.91
October 2022 = $32.46
November 2022 = $33.54
December 2022 = $33.59

So assuming a reasonably normal winter which brings Australian east coast (which in this context is all states except WA) demand up to the point where physical gas production cannot meet both domestic demand + the physical limit on exports (from Qld) then we see domestic prices rise up to that LNG netback price.

In the event that there's a physical disruption to production, or the netback price rises further, well then the sky's the limit.

Now I hear everyone say that either they don't use gas at all, or their gas price is at fixed rates not a spot price that constantly changes. Good point but....

For your fixed price domestic supply, you can be pretty sure that a rise in the wholesale price will be passed on at some point. Gas retailers aren't there to lose money so whilst the price might not vary daily, ultimately it'll be passed through.

And the big one - there's an awful lot of things you do buy which have gas as an input. If it's cooked or heated at an industrial scale then most likely the heat source is gas. Then there's everything from gas-fired power generation to hotels using gas to heat water to large commercial buildings heated with gas and so on. All of that's ultimately going to be passed onto consumers one way or another either directly or indirectly but bottom line is _someone_ will be paying.

We are of course also seeing that energy price inflation for petroleum products as everyone who uses them will be well aware. And of course it's not just the petrol or diesel you use directly but the reality that every tractor and harvester is run on diesel, so is almost every truck and so on. Whatever you eat today, diesel was an input to its supply that's a given. Then there's public transport and so on too.

Plus also electricity. Average spot prices per MWh across all states excluding NT:

2019 calendar year average = $89.31

2020 = $57.03

2021 = $77.47

September 2021 = $40.90
October 2021 = $72.69
November 2021 = $103.77
December 2021 = $107.47
January 2022 = $126.12
February 2022 = $150.31
March 2022 = $124.95
April 2022 = $213.74

2022 calendar year to date average = $152.07

Even those figures are slightly understating it since the inclusion of WA and Tas is skewing them lower. Average price for Queensland in April 2022 was $316.35

My point in all that is purely an economic one, inflation, not an engineering one. Some technical mishaps with production haven't helped but primarily it's an economic situation more than anything else. Loss of a coal plant isn't such a deal if you can afford to run gas turbines as a replacement but when gas costs a fortune that's very different. So there's a technical aspect to it but ultimately it's the price of fuel that's the key issue driving it.

Now that's all about energy yes but I've no doubt similar would apply to various metals and other things with far reaching consequences.


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## Smurf1976 (6 May 2022)

divs4ever said:


> so is that one generation ( seen to be 20 to 30 years ) or an open-ended time-line ( 20 years plus )



My thinking is the sort of timeframe that's indefinite until a new paradigm emerges due to some future situation.

Point being I'm not expecting it to be over in any timeframe soon enough to be of relevance (but how long is anyone's guess).


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## divs4ever (6 May 2022)

Smurf1976 said:


> My thinking is the sort of timeframe that's indefinite until a new paradigm emerges due to some future situation.
> 
> Point being I'm not expecting it to be over in any timeframe soon enough to be of relevance (but how long is anyone's guess).



 yes , i think long  but indefinite  , as well 

 i think one mistake the West is making  , is that ( most ) resources left IN THE GROUND are ageless , where as a manufactured  item only has a limited time to be easily salable  ( some classic watches. autos etc  being the exception )

 so Russian could chose  to wind down resources extracted down to national consumption levels  , and might not even face significant job losses ( i think they will simply divert extra sales to China , India , Vietnam  and other willing customers  like a developing Afghanistan  and Iran )

 if German manufacturing crumbles  , will the majority of the EU follow , there are already distressed member states , the tipping point can't be that far away


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## over9k (6 May 2022)

Pretty wild profit taking friday, bond yields have just soared in a total dismissal of powell's comments yesterday.

But: 




HMMMMMMMMM


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## waterbottle (6 May 2022)

BoE has hiked rates to 1% overnight, citing inflation expectations of 10% into until Q4 2022 with energy costs playing the biggest contribution. 
Interestingly, a 1% interest is the highest they've had since the GFC.... Big shifts on currency markets too, AUDUSD down 2%, BTC down 8%, US tech getting slaughtered, bonds up 5% - it was a risk-off day.... 
Whether this is continuation of a trend or volatility it might be too early to say, but US tech is starting to look oversold - FANG now approaching/past previd COVID 2020 prices....


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## over9k (6 May 2022)

waterbottle said:


> BoE has hiked rates to 1% overnight, citing inflation expectations of 10% into until Q4 2022 with energy costs playing the biggest contribution.
> Interestingly, a 1% interest is the highest they've had since the GFC.... Big shifts on currency markets too, AUDUSD down 2%, BTC down 8%, US tech getting slaughtered, bonds up 5% - it was a risk-off day....
> Whether this is continuation of a trend or volatility it might be too early to say, but US tech is starting to look oversold - FANG now approaching/past previd COVID 2020 prices....



Just run the swings in the meantime, tech's still your highest beta play by miles. TQQQ, SOXL, FNGU with 10-20% swings on the day...


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## over9k (6 May 2022)




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## Smurf1976 (6 May 2022)

Smurf1976 said:


> So what happened? How did we end up with a more than 50% price jump in 3 days?



For the record, the spot gas price reached $30.00 in Victoria at 18:00 today.

So that's a 90% price hike in 4 days.

Now looks to be coming back down quite rapidly (lower demand, it's Friday night) but the real point here, as it relates to inflation, is that all forms of energy are presently subject to a tight supply situation. Coal, oil, gas, uranium, electricity etc they're all somewhat on a precipice where any spike in demand or disruption to production sends the price to the moon.

Victorian gas is just the latest incident really. The UK, most EU countries, Japan, China, India and others have seen similar occurrences either gas or electricity over the past year or so and I note that the US natural gas price is quietly creeping up too, having roughly doubled over the past few weeks. No crisis yet but it's on the move.


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## over9k (7 May 2022)

@Smurf1976 Know of a leveraged etf for XEJ? I haven't been able to find anything


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## divs4ever (7 May 2022)

leveraged ( XEJ ) ??   , nothing i have noticed


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## Smurf1976 (8 May 2022)

over9k said:


> @Smurf1976 Know of a leveraged etf for XEJ? I haven't been able to find anything



Not that I'm aware of......


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## Value Collector (8 May 2022)

Smurf1976 said:


> A few thoughts on the energy stuff (keeping the focus on the financial more than the engineering):
> 
> At the consumer (that is, the actual machine that's using the energy) level in some situations energy sources are interchangeable, in others they're not. For examples:
> 
> ...



I have two websites I have been watching for the past couple of years that track which fuels are being used for electricity production, and I have noticed since the Liddell coal plant began its shutdown a month or so ago the use of gas has stepped up quite a bit.

Do you think that this plant closure is causing the the higher usage/prices?


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## sptrawler (8 May 2022)

Concerning 22-day warning for Aussie workers
					

The average Aussie worker would be able to support themselves for less than a month if they lost their job. This is what you need to know.




					au.news.yahoo.com
				




Around 342,000 Aussie workers wouldn’t even be able to support themselves for a month if they lost their job.

The average worker could only support themselves for 22 days if they lost their job, according to new research. _(Source: Getty)_
Around 342,000 Aussie workers wouldn’t even be able to support themselves for a month if they lost their job, according to new data.
Research released by Otivo found that Australians without a financial safety net could only survive 22 days if their income was to suddenly stop.
A financial safety net includes things like being able to draw down on a mortgage repayment, credit cards, other loans, or the ability to sell shares.
Australians with no financial safety net, but who did receive government support would survive around 21 weeks without an income, the report found.

Surprisingly, the research found there were many people living paycheque to paycheque who lived in affluent areas like Rose Bay, in Sydney’s eastern suburbs, who were considered to be more financially stable.

“Perhaps victims of keeping up appearances, the average person in Rose Bay with no financial safety net could only survive 11 weeks if their income was to suddenly cease, which is well below the national average,” the research found.

“Remove government support, and that survival rate reduces to less than 17 days for Rose Bay residents.”


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## 3 hound (8 May 2022)

sptrawler said:


> Concerning 22-day warning for Aussie workers
> 
> 
> The average Aussie worker would be able to support themselves for less than a month if they lost their job. This is what you need to know.
> ...



Maybe be not support themselves but we do have a welfare system that seems almost limitless.


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## sptrawler (8 May 2022)

3 hound said:


> Maybe be not support themselves but we do have a welfare system that seems almost limitless.



And everyday there is another cause that wants to get on the teat. 
As long as the worker keeps going, we'll be o.k., the unsung hero.


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## 3 hound (8 May 2022)

sptrawler said:


> And everyday there is another cause that wants to get on the teat.
> As long as the worker keeps going, we'll be o.k., the unsung hero.




What did Keating say about the ratio of workers funding welfare dollars to the number of people consuming welfare dollars. I think he was talking about the aged but the principle is generally true (if not more so) for working age people as well.


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## divs4ever (8 May 2022)

3 hound said:


> Maybe be not support themselves but we do have a welfare system that seems almost limitless.



not as easy to get onto as you might think  ( some associates  usually assess the various charities  , first )
 AND being on that welfare system  signs you up as a political football 

 i remember the Right Honorable Adam Bandt  couldn't survive on the 'dole ' for a week ( and he had a bicycle at the time  , so no motor vehicle expenses ) , so if Adam  had trouble  making his 'dole payment ' stretch two weeks  , imagine those  who have a waiting period before the first payment arrives .

 mind you the serial unemployed  ( temporary job to temporary job ) become quite resourceful  ( maybe the politicians should have to live a few months watching the pennies BEFORE they start their term in Canberra , sort of a crude course in economics and finances )

 REMEMBER  as Ice-T says in one of his books  .. 'crime is an equal opportunity employer '


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## divs4ever (8 May 2022)

sptrawler said:


> And everyday there is another cause that wants to get on the teat.
> As long as the worker keeps going, we'll be o.k., the unsung hero.



the worker is being buried in paperwork and red and green tape  they might be employed  but productivity is being strangled 

 i remember one gig   'specialty cleaning '  at shopping complexes  ,  a half hour ' safety induction ' at each site , and the standard spiel had no useful safety information about that specific site ( not even the location of toilets or centre management , let alone fire extinguishers first aid  gear ) but a half hour building up blood clots and sign a  book 

 and stuff like that is where productivity goes ( but i suppose it kept security awake a while longer  maybe that was the upside )


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## qldfrog (8 May 2022)

3 hound said:


> Maybe be not support themselves but we do have a welfare system that seems almost limitless.



So in short, people on welfare can survive thanks to welfare whereas working and independent ones will get screwed and loose everything..a great lesson in life:
Repeat after me:
I am an Aussie, i should not work, i should parasite the dirty rich and winge.


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## 3 hound (8 May 2022)

divs4ever said:


> not as easy to get onto as you might think  ( some associates  usually assess the various charities  , first )
> AND being on that welfare system  signs you up as a political football
> 
> i remember the Right Honorable Adam Bandt  couldn't survive on the 'dole ' for a week ( and he had a bicycle at the time  , so no motor vehicle expenses ) , so if Adam  had trouble  making his 'dole payment ' stretch two weeks  , imagine those  who have a waiting period before the first payment arrives .
> ...



Your story doesn't compute, we are into third generation welfare families.  They  have/rent houses and have cars, smart phones....etc. 

I have not heard of any government caps or limits on so it appears limitless.


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## divs4ever (8 May 2022)

3 hound said:


> Your story doesn't compute, we are into third generation welfare families where nobody has ever worked. They all have houses, cars, smart phones...more and more around here are buying their land/houses while on welfare.



 you are correct  , BUT the treadmill  of unemployment /employment/unemployment  creates it's own depressive trap  there will always be SOME trapped on welfare  ( whether that is begging on the street or lining up at centre-link regularly )

 fun-fact  how much could you shrink government  by stopping all welfare ( think of the politicians and bureaucrats  sitting on the curb , jobless ) and think of the price reductions ( say ) in 5% of the population  can't afford to buy much , so overall consumption would plummet , as would tax receipts 

 if houses are being bought by welfare recipients  , you are talking about a banking problem ( rewatch  The Big Short ) , surely we don't still have the rent-to-buy  property trap 

 BTW the government NEEDS residents to over-consume  , sure i don't think that is clever , but i am not in government ( and tax-addicted )


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## sptrawler (8 May 2022)

divs4ever said:


> if houses are being bought by welfare recipients  , you are talking about a banking problem ( rewatch  The Big Short ) , surely we don't still have the rent-to-buy  property trap











						What is rent-to-own and does it let you buy a house without a deposit?
					

These schemes are hugely popular in the US. But in Australia they are a relatively new concept.




					www.afr.com
				




The risk with these schemes is that the consumer does not actually own the dwelling, and if they are unable to refinance the property commercially at the end of their agreed period, they lose both the property and the equity they paid.
A platform such as OwnHome argues that mortgages can also leave consumers out of pocket and without a home. It says its hardship provisions that support customers in times of need address the concerns that gave rise to the Victorian regulations.
In Victoria, developer Assemble Communities has a different model.

The developer, which Australian Super has a 25 per cent stake in, builds apartments aimed at households in low- to moderate-income bands.

Taking into account two years for an apartment to be built, tenants who qualify then rent for five years and then can choose to buy at the end of that period – after seven years – at the originally agreed price.

Over that period, residents receive financial coaching and, unlike in traditional rent-to-buy models, they can walk away with their savings intact if they decide not to go ahead and purchase the apartment.
Separately, in Canberra, the National Housing Finance and Investment Corporation, a federal government agency, expects to start a pilot development this year, the Ginninderry joint venture, with Riverview Developments, the ACT government’s Suburban Land Agency and Community Housing Canberra.

Under that model, tenants will pay an affordable rent to the community housing provider with the right to buy the home after 10 years.

NHFIC boss Nathan Dal Bon says the build-to-rent-to-buy model offers a way to provide housing to vulnerable groups, such as older women.

“With vulnerable women’s housing needs increasingly in focus, this pilot provides an opportunity to explore affordable pathways to homeownership for at-risk women,” he says.


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## 3 hound (8 May 2022)

divs4ever said:


> fun-fact how much could you shrink government by stopping all welfare ( think of the politicians and bureaucrats sitting on the curb , jobless ) and think of the price reductions ( say ) in 5% of the population can't afford to buy much , so overall consumption would plummet , as would tax receipts




I am not an economist so can't answer that, it would more likely increase productivity I would guess.

As far as consumption goes I wouldn't know the answer in the long term at least, do you have some modelling to show consumption would decrease??

As far as bureaucrats losing jobs isn't that one of the key argument for a UBI, Nothing to evaluate every fortnight so no need to pay a massive bureaucracies to evaluate.  EVERYONE just gets the UBI regardless.


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## Smurf1976 (8 May 2022)

divs4ever said:


> the worker is being buried in paperwork and red and green tape they might be employed but productivity is being strangled



Even if we ignore $ and just measure time (labour) then pretty much everything costs a fortune today compared to what it cost a generation ago.

Without wanting to name the project details, productivity really does go to crap when workers on site must wait for a "supervisor" (who isn't a supervisor in the normal sense of the word) to turn up and supervise the work.

Now said supervisor lives a couple of hundred km away and clocks on when they get in the car, same time as the workers, and can't be sacked even if they fail to turn up at all.

Details left out intentionally but it's a real project in Australia. Needless to say, said "supervisors" would not be on the job if the company wasn't forced - and no it's not the doing of unions, it's just the company dodging the bullets trying to get it done amidst circumstances that are, shall we say, difficult on account of location.


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## 3 hound (8 May 2022)

Smurf1976 said:


> Even if we ignore $ and just measure time (labour) then pretty much everything costs a fortune today compared to what it cost a generation ago.
> 
> Without wanting to name the project details, productivity really does go to crap when workers on site must wait for a "supervisor" (who isn't a supervisor in the normal sense of the word) to turn up and supervise the work.
> 
> ...



There has been a run of men getting killed on the job sites recently, I do not know the details of every accident but it pushes me in favour that correct supervision and processes should be mandatory and industry should not be allowed to skimp on safety to increase profits.

No man or woman (they are almost exclusively men tho) should have to die in the workplace for just doing their job.


----------



## divs4ever (8 May 2022)

3 hound said:


> I am not an economist so can't answer that, it would more likely increase productivity I would guess.
> 
> As far as consumption goes I wouldn't know the answer in the long term at least, do you have some modelling to show consumption would decrease??
> 
> As far as bureaucrats losing jobs isn't that one of the key argument for a UBI, Nothing to evaluate every fortnight so no need for massive bureaucracies to evaluate.  EVERYONE just gets the UBI regardless.



 but until Australia ramps up manufacturing  REAL productivity can't increase  ( turn raw  materials into products that are consumed or sold  )

 you tell me about these the generation welfare recipients , but have you stayed with them  for some time , ( without being shocked into blindness )  , they are educational in their own way  and give you a great insight into current governments and the public service 

 not being an economist is probably to your advantage ( and considering most mainstream economic predictions  your guess is just as likely to be correct  .. the difference is you didn't need to study an extra 6 plus years  to formulate that opinion 

modeling ?? if you have no money in your pocket .. how much can you buy  ( currently up to your credit limit )

now IF there is a credit crisis ( which arguably happened in September 2019 )  and still no cash in the pocket ??

this isn't rocket science , the compounding factor is built in obsolescent in many products ( some products self-destruct after say 3 or 5 years ) so the risk is some products will fail ( even sitting on the shelf ) and there is some chance some people will not be able to replace them ( without resorting to theft )

yep UBI sounds like the solution UNTIL government realizes it has relaxed it's grip on control  ( bring in Central Bank digital currency  so the government gets both hands on control  , now you can even de-bank folks at whim  , and have the old Soviet ' non-person' sledge-hammer to wield 

 AND GUESS WHAT  , real productivity  ( outside of criminal activity ) will slide and slide , no incentive to work hard to get a safety  buffer  , the laziest bastard gets the same as you ( or even promoted i have seen that as well )

it's a harsh world out there outside the ivory towers


----------



## 3 hound (8 May 2022)

divs4ever said:


> but until Australia ramps up manufacturing  REAL productivity can't increase  ( turn raw  materials into products that are consumed or sold  )
> 
> you tell me about these the generation welfare recipients , but have you stayed with them  for some time , ( without being shocked into blindness )  , they are educational in their own way  and give you a great insight into current governments and the public service
> 
> ...



I think productivity would increase because more people will stop being dependent and go participate in the workforce at varying levels of contribution. If it's just easier not to work and still get your needs met then why work??


----------



## divs4ever (8 May 2022)

3 hound said:


> There has been a run of men getting killed on the job sites recently, I do not know the details of every accident but it pushes me in favour that correct supervision and processes should be mandatory and industry should not be allowed to skimp on safety to increase profits.
> 
> No man or woman (they are almost exclusively men tho) should have to die in the workplace for just doing their job.



there is ALWAYS risk  doing your job , blood clots and heart attacks for the office worker  , the obvious ones for the blue-collar folk 

 one trend i noticed  ( while i was still working ) was all these safety lectures tend  lull the worker into a false sense of security 

 sometimes the BEST safety  is worker self-awareness ( on what COULD happen on that site )

for instance in computer server rooms  , the first thing i do is check the fire suppression units  , if they are de-activated ( because most kill more than just fires ) and IF the system fails ( while folk are in there ) what chance of saving one  or more  co-workers  ( the answer is USUALLY zero  but have been delighted to find a couple of potential escape opportunities ) the NEXT thing to watch for is damage to the power cabling , 4000v DC  has it's own dangers , 'cos those bloody rats can be found anywhere .

 and NO the site induction  is more worried about security and you being trapped in a cool environment for hours , causing some embarrassing paperwork 

 and distressingly safety measures get diluted all the time ( often the funding is eroded by pointless safety lectures and site inductions )

 so you get six-monthly  lectures but a first-aid kit that isn't worth the walk to get it


----------



## sptrawler (8 May 2022)

3 hound said:


> If it's just easier not to work and still get your needs met then why work??



That is the principal my youngest son works on.


----------



## divs4ever (8 May 2022)

3 hound said:


> I think productivity would increase because more people will stop being dependent and go participate in the workforce at varying levels of contribution. If it's just easier not to work and still get your needs met then why work??



there still needs to be something PRODUCTIVE for them to do  , 

 go back and study  Aboriginal Culture , one expert calculated that the Aboriginal only needed six hours of effort  a day  , to survive/thrive 

 now sure i like some of the modern benefits  , BUT the Aboriginal lifestyle  had it's own integrated wisdom ,only harvest so much food and move on ( and come back in a few years  as one example ) ( let the land recover naturally )  keep the population low and remove food pressure  , as another 

goodness knows  what other lessons could have been learned  before we destroyed their culture


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## divs4ever (8 May 2022)

sptrawler said:


> That is the principal my youngest son works on.



it could be worse .. he could be addicted to academia ( and cost the taxpayers many times that much )


----------



## sptrawler (8 May 2022)

divs4ever said:


> there still needs to be something PRODUCTIVE for them to do  ,
> 
> go back and study  Aboriginal Culture , one expert calculated that the Aboriginal only needed six hours of effort  a day  , to survive/thrive
> 
> ...



It certainly was a clash of cultures, from different ends of the spectrum, hunter gatherers as opposed to settlers both require the same land for different purposes.


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## Smurf1976 (8 May 2022)

Value Collector said:


> I have two websites I have been watching for the past couple of years that track which fuels are being used for electricity production, and I have noticed since the Liddell coal plant began its shutdown a month or so ago the use of gas has stepped up quite a bit.
> 
> Do you think that this plant closure is causing the the higher usage/prices?




Short answer is the whole energy industry has seen an extended period of underinvestment and that's global not simply local.

In more detail what's basically happened, in sequence is:

International LNG price soared. Note this happened prior to the Russia - Ukraine war and comes down to insufficient supply globally although obviously the war's adding to it.

That opened up a large discrepancy between Australian domestic market gas prices and the export value of LNG, thus leading to the Qld LNG plants running flat out and buying gas on the market in order to run LNG production at maximum. For reference, the ACCC's latest estimate of the value of exported gas is $38.09 per GJ whereas at the start of this calendar year, domestic market prices were circa $10. So a huge incentive to export even if that requires buying gas on the Australian spot market in order to do so.

International thermal coal price soared and is presently at about $19 per GJ equivalent. That's the price for exportable black coal, noting that some Australian power stations are heavily exposed to that, since they're using coal that's physically able to be loaded onto a ship as an alternative market, whilst are either using off-spec low grade coal of no real value or they have a "captive" supplier - there's no rail line that would enable export from the mine. It varies but for those that are exposed, well even if they've got a pile of coal sitting there they'll value that based on replacement cost in terms of operating decisions.

Coal at $19 per GJ whereas until recently Australian domestic market gas was cheaper. That has driven a partial switch from coal to gas for power generation, noting the complexity that doing so often involves a different company doing it (since not all owners of coal-fired generation also own gas-fired generation and vice versa).

Meanwhile we have declining gas production capacity, that is maximum flow rate in layman's terms, in both Victoria and SA.

Meanwhile the diesel price has shot up due to international factors. Not of immediate direct relevance to the Australian domestic situation but it does raise the maximum that someone would pay for gas. That is, if you've got the option to switch the plant to burn diesel well then the diesel price going up raises the price point at which that switching makes sense, thus raising the price you'd be willing to pay for gas.

All of that basically created a situation just waiting for something to set it off. Just needed physical consumption of gas in the Australian domestic market + maximum exports to exceed available supply and all of a sudden price would be sharply increased.

That trigger, of course, is simply the weather. Victoria has a large population in Australian terms and the majority of buildings, both residential and commercial, are heated with gas. Once the weather cooled, up went the price on the spot market.

From a financial perspective it all comes back to the overall tightness of supply for all forms of energy.

If coal wasn't so scarce and crazily priced then there'd be more enthusiasm to burn it. It certainly can't replace all gas use but a bit more could be used yes.

If oil and thus diesel wasn't so expensive then to some extent that could be used as a substitute by industry and power generation.

If LNG wasn't so expensive on international markets then there wouldn't be the incentive to run exports flat out.

But when they're all in short supply globally, when they're all expensive, well it's a bit of a tail chasing game really.

Same's underway in the US now too. Latest gas price there is $7.98 whereas same time last year it was just under $3. Noting different units of measurement and different currency, that $7.98 is equivalent to $10.65 per GJ in AUD. So gas in the US is still cheap but the same basic pattern is unfolding, the cheapness of US gas relative to coal is prompting an aggressive switch to gas for power generation, industry etc and the cheapness of US gas relative to international is prompting export facilities to run flat out. Same basic pattern there.

As for Liddell, well it has contributed in a minor way, closure of a quarter of the plant has lowered the maximum ability to use coal, but really it's only one of the many factors and not the major one. It's not zero but it's not the main cause.

I've intentionally avoided any mention of politics and have stuck to economics but what I will note there is that energy has been an extremely contentious subject in Australian politics for more than a decade now and I suspect this price shock will change that debate to some extent. There's quite a few in very high places who seemingly weren't expecting this....


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## 3 hound (8 May 2022)

sptrawler said:


> That is the principal my youngest son works on.




Well you can't fault his logic.


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## 3 hound (8 May 2022)

divs4ever said:


> there still needs to be something PRODUCTIVE for them to do  ,
> 
> go back and study  Aboriginal Culture , one expert calculated that the Aboriginal only needed six hours of effort  a day  , to survive/thrive
> 
> ...





Stupidest thing I ever heard of you are proposing a hunter gather lifestyle is going to be a solution for modern populations. 

Sounds like weed talk.


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## divs4ever (8 May 2022)

sptrawler said:


> It certainly was a clash of cultures, from different ends of the spectrum, hunter gatherers as opposed to settlers both require the same land for different purposes.



 we MIGHT have to have some of the population go back to a hunter-gather  lifestyle  ( shame a lot of that local knowledge was lost )


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## Smurf1976 (8 May 2022)

3 hound said:


> There has been a run of men getting killed on the job sites recently, I do not know the details of every accident but it pushes me in favour that correct supervision and processes should be mandatory and industry should not be allowed to skimp on safety to increase profits.



That's not the kind of supervision I'm referring to.....   

If it was about safety then I'd be all for it.


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## divs4ever (8 May 2022)

3 hound said:


> Stupidest thing I ever heard of you are proposing a hunter gather lifestyle is going to be a solution for modern populations.
> 
> Sounds like weed talk.



 well the US call them preppers and survivalists  , and they are starting to trend 

 option B.  would be to have those malcontents  still circulating in your society ( helping the disharmony )

 this thread has wandered onto the subject  of non-contributing members in the community 

 BTW  i have prescribed medications  that you probably should  not drive with  ( even a mobility scooter ) 

 i think the weed gets too much credit for non-conventional thinking


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## divs4ever (8 May 2022)

Smurf1976 said:


> That's not the kind of supervision I'm referring to.....
> 
> If it was about safety then I'd be all for it.



 sadly  , there seems to be a new way ( every day ) for a worker to get killed or maimed  at work 

 however SOME accidents could have been prevented  , and we should strive to avoid  those accidents in the future 

 i would LOVE to see   the statistics on  workers injured going to or from work  , before and during the 'work from home era '

 and maybe the home-injuries during working hours v. office injuries  as well 

 ( maybe insurance premium adjustments need to be made )


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## over9k (9 May 2022)




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## over9k (10 May 2022)

No idea how much this has to do with the futures looking like this but I suspect it's quite a bit:






Hence this:




But it's only hungary that's skewering (All EU members have veto power) the sanctions and apparently there's some pretty big stuff in the works reference getting ukraine's power grid connected to the EU's and so obviously eastern europe is a stepping stone to that happening.

So long story short, it's not a "no" to the rest of the sanctions, it's a "not yet". Should therefore be another buy opportunity tonight.

These sanctions being stalled obviously puts a pretty serious damper on energy (and therefore everything else) inflation which is probably why we now see the NDX futures running the hardest.


Remember that sanctions = energy inflation = everything else inflation.


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## waterbottle (10 May 2022)

over9k said:


> View attachment 141446
> 
> 
> No idea how much this has to do with the futures looking like this but I suspect it's quite a bit:
> ...




Agreed. 
This has been my thesis since the start of the Russo - Ukraine war, and it's what the Fed see as one of the drivers of inflation at present - the other two being rolling China lockdowns and supply disruptions. 

There is a political burden that EU countries will have to carry should they ban Russian oil - that is, their economies will crumble (see UK inflation rate predicted at 10% with energy inflation accounting for 40%). Furthermore, it makes no sense from a security standpoint to further ostracise Russia, forcing it to also crumble and lash out - this starts to read like the pretext for Japan's oil embargo in the pacific and all that entailed thereafter. I would hope that EU politicians are wise enough to appreciate that and put the issue of an oil ban to rest.
In addition, the US is seeking alternative oil suppliers. When, whom, and how is yet to be detailed.
Finally, the Russo-Ukraine conflict will end at some point, either with Ukraine ceding (likely) or the war being extended due to other parties becoming involved (unlikely, although 2 out of 2 world wars have been initiated courtesy of Europe). 

The China lockdown should have a predictable outcome. All lockdown end eventually, as we've seen over the past 2 years, either due to political fatigue or due to the illness running its natural course. Taking the Australian experience (where lo kdowns weren't anywhere near as harsh), then a 2-6 month lockdown could be expected. This would coincide nicely with Xi's attempts at "re-election" for another 5 year term in October 2022 the CCP's 20th National Congress. 
If he doesn't get re elected, then expect a whole bunch of volatility as we recalculate East-West relations. 

And finally, supply chain issues. I'm not too familiar with what the actual driver is - it seems to be ambiguous and no one seems to pinpoint what the actual problem is. Regardless, one would expect an improvement as demand gets smacked down with rising interest rates. 

I think the the fundamentals behind this thesis are still valid and it's why I believe we will see inflation fall once oil prices are stabilised, China is out of lockdown and supply issues are resolved. Neither issue seems like a permanent, fundamental shift to the economy, so the talk regarding hyperinflation and economic armageddon does not make any sense to me. 

What I didn't expect was the volatility that drove through my portfolio over the past 2 weeks. The NASDAQ has had three almost 5% down days which is insane - the last time I saw something like that was in 2008 when the entire financial system was staring down the barrel of complete collapse. That isn't the case this time around. One could argue that we had that moment in 2020 when economies were literally shut down overnight. 

Any thoughts? Are glasses too rose-tinted?


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## over9k (10 May 2022)

Are you aware of this: 

https://www.wsj.com/articles/house-to-vote-on-nearly-40-billion-ukraine-aid-package-11652124769 

_"House Speaker Nancy Pelosi said U.S. lawmakers are aware of the urgency of approving a proposed $33 billion aid package for Ukraine, though she stopped short of predicting when Congress might pass it.

“I think we will be able to do it as quickly as possible,” Pelosi said on CBS’s “Face the Nation” on Sunday. “We are very current on the needs and the urgency and, again, we will have bipartisanship as we go forward with it.”

Asked if Congress would pass the package this month, she said, “I think we have to.”_


Apparently the ukrainians are actually in with a very very good shot of stopping the russians - the russians have underperformed massively and the ukrainians have overperformed massively and the javelins that they did have have been an absolute godsend. 

With a metric boatload of arms now essentially already on their way and another $33 billion worth soon to be approved (already en route, just not approved for final step of delivery) including literally thousands of javelins, the ruski's are in quite the jam. 

If they can get the EU's power connected to ukraine that'll knock out another strategic option the russians had there too. 

Apparently the final piece of the puzzle is that there's just one bridge from the crimea over to mainland ukraine that the russians are using so if the ukrainians can knock that out they'll stop their southern invasion almost cold. 

Have a listen to this from the 31.30 to the 40.30 point:


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## waterbottle (10 May 2022)

Yep, it's a proxy war. Might turn out to be similar to Israel v. Arabs (where cash + technology overwhelms poor strategy + numbers). 
Not sure if that'd be a good outcome for anyone...


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## waterbottle (10 May 2022)

10 year bond down 4%, now below 3... GDPNow figures from US Atlanta Fed estimate 2nd Qtr GDP at 1.8% (compared to -1.4% prior) which is a farcry from the inflationary 4+% GDP we were getting in 2021. WTF is going on. All eyes on inflation numbers tomorrow!


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## over9k (11 May 2022)

Not the first I've heard of europe pivoting down to africa and essentially going neo-colonial to replace the russian supply. 

Nigeria's another big one too


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## 3 hound (11 May 2022)

waterbottle said:


> Yep, it's a proxy war. Might turn out to be similar to Israel v. Arabs (where cash + technology overwhelms poor strategy + numbers).
> Not sure if that'd be a good outcome for anyone...




Or US v Afghanistan where cash + technology + overwhelming strategy and numbers = pointless waste of life and a disastrous chaotic exit.


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## sptrawler (11 May 2022)

I'm hopeful of a Labor win and the promised 5% wage increase comes through, that will IMO kickstart the economy in a big way, the buying power will be given a hell of a boost and should really put a rocket under the economy.


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## noirua (11 May 2022)

In Germany, the annual inflation rate accelerated to 7.4% in April from 7.3% in March.
On a harmonised basis, allowing for EU-wide comparison, annual inflation in Germany quickened to 7.8% in April from 7.6% in March.


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## waterbottle (11 May 2022)

3 hound said:


> Or US v Afghanistan where cash + technology + overwhelming strategy and numbers = pointless waste of life and a disastrous chaotic exit.




Nah, neither Ukraine nor Russia fit the U.S


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## waterbottle (11 May 2022)

over9k said:


> View attachment 141491
> 
> 
> Not the first I've heard of europe pivoting down to africa and essentially going neo-colonial to replace the russian supply.
> ...




Yes, several alternative oil producers exist. Whether they actually produce is another matter. The irony here is that Libya was an oil producing nation until NATO (a defensive organisation?) pummeled Qaddafi with overwhelming airpower, yet now they return when Russia is threatening their very own oil supply. Sad & hilarious.


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## divs4ever (11 May 2022)

waterbottle said:


> Yep, it's a proxy war. Might turn out to be similar to Israel v. Arabs (where cash + technology overwhelms poor strategy + numbers).
> Not sure if that'd be a good outcome for anyone...



 well Putin did warn of a lose-lose scenario  before the 'special operation ' started  , so obviously Putin was expecting some pain ( and possibly no glory )

 HOWEVER the West turned that into a commodity war ( while thinking it was a financial war )  bizarrely Putin war-gamed this in a debate in the late 1990's  when the adversary   applied financial restrictions on ( the theoretical ) Russia  , and Putin ( in the debate ) responded by increased self-sufficiency 

 now SO FAR both China and India  have spotted a commodity-buying  opportunity , so the impacts have been milder than Putin might have expected  ( so far )

 also remember Russia is NOT a military  junta , the parliament is awash with former intelligence personal ( of various flavors ) , so is chockers with skilled analysts and information-gathers ( they don't have to rely on 'hired-gun' consultants and advisers )


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## divs4ever (11 May 2022)

over9k said:


> Not the first I've heard of europe pivoting down to africa and essentially going neo-colonial to replace the russian supply.
> 
> Nigeria's another big one too



 China has largely filled that power vacuum , calmly and quietly  , and the Africans are much smarter now as well 

 the Europeans  looted and left before , just because the Africans don't record a lot of ( written ) history , doesn't mean it is all forgotten


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## waterbottle (11 May 2022)

US CPI of 0.3% in April compared to 1.2% in March. Pretty much confirms that POO is driving this IMO.


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## over9k (11 May 2022)

8.3 vs 8.1 estimated y/y. Everything slaughtered. 

Looking like a massacre today, snoozefest on thurs, another slaughter on friday because as if there's not going to be plenty out there too nervous to hold through the weekend. 

Might be time for an NRGU topup on friday.


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## waterbottle (11 May 2022)

Yup, USD pairs plunged, Europe giving up gains, 10 year bonds now above 3%. Shaping up to be another 5% down day. Next stop possibly 11000 on the NASDAQ IMO


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## Value Collector (11 May 2022)

sptrawler said:


> I'm hopeful of a Labor win and the promised 5% wage increase comes through, that will IMO kickstart the economy in a big way, the buying power will be given a hell of a boost and should really put a rocket under the economy.



Isn’t the whole point of the latest interest rate increases to try and dampen the economy and buying power?

A wage increase seems to be at odds with the rba strategy to fight inflation.


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## over9k (11 May 2022)

There was an interview with one of the regional fed chiefs saying that she wasn't ruling 0.75 out for the next meeting. Something tells me it's all eyes on the fed again. 

It's worth noting that we're knocking on the door of summer in the northern hemisphere now too so seasonality comes into play.


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## sptrawler (11 May 2022)

Value Collector said:


> Isn’t the whole point of the latest interest rate increases to try and dampen the economy and buying power?
> 
> A wage increase seems to be at odds with the rba strategy to fight inflation.




Well that is the down side Albo didn't think about, crank up a 5% across the board wage rise that leads to RBA 10% interest rates to curb inflation, that means why would you buy shares for 5% div when you can get a 10% at bank?
But hey I'm happy either way, win/win 50% each way.


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## over9k (11 May 2022)

sptrawler said:


> Well that is the down side Albo didn't think about, crank that up a 5% across the board wage rise, leads to RBA 10% interest rates to curb inflation, that means why would you buy shares for 5% div when you can get a 10% at bank?



You're uh, forgive the pun but "on the money" there trawler - we're heading into a world where capital is going to become harder & harder to come by. 

This IS the chicken set in motion by Howard & co in the early 2000's finally coming home to roost. It took the russian invasion to do it, but we're now there.


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## sptrawler (11 May 2022)

over9k said:


> You're uh, forgive the pun but "on the money" there trawler - we're heading into a world where capital is going to become harder & harder to come by.
> 
> This IS the chicken set in motion by Howard & co in the early 2000's finally coming home to roost. It took the russian invasion to do it, but we're now there.



Yup I think we are in for a rude shock, well the some are. 🤣


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## waterbottle (11 May 2022)

over9k said:


> There was an interview with one of the regional fed chiefs saying that she wasn't ruling 0.75 out for the next meeting. Something tells me it's all eyes on the fed again.
> 
> It's worth noting that we're knocking on the door of summer in the northern hemisphere now too so seasonality comes into play.




There was also an interview from the Atlanta fed chief who said that he didn't think 0.75 was necessary... Not too sure if we can take their word for it, although I do believe that they're going to be reactive rather than proactive (i.e. await incoming data) and will likely be slow to reverse direction


----------



## waterbottle (11 May 2022)

Why would capital be harder to come by? If I earned money by lending out imaginary paper, I'd be making sure everyone got a piece....


----------



## over9k (11 May 2022)

waterbottle said:


> Why would capital be harder to come by? If I earned money by lending out imaginary paper, I'd be making sure everyone got a piece....



More expensive to borrow if there's higher interest rates. 

You want to borrow money for some reason, if putting it in the bank was 2% earning before you could conceivably borrow it from me for 2.1% (depending on risk), but if the bank is 3% now then now you've gotta pay me 3.1%. 

Obviously the higher you go in required return, the fewer investments actually make sense. 

And voila, recession.


----------



## waterbottle (11 May 2022)

waterbottle said:


> Yup, USD pairs plunged, Europe giving up gains, 10 year bonds now above 3%. Shaping up to be another 5% down day. Next stop possibly 11000 on the NASDAQ IMO




Well I officially have NFI whats going on. AUDUSD reversed the drop. NASDAQ now in the green.


----------



## waterbottle (11 May 2022)

over9k said:


> More expensive to borrow if there's higher interest rates.
> 
> You want to borrow money for some reason, if putting it in the bank was 2% earning before you could conceivably borrow it from me for 2.1% (depending on risk), but if the bank is 3% now then now you've gotta pay me 3.1%.
> 
> ...




Yes agreed, i thought you guys were referring to some howard-era policy I wasn't aware of


----------



## over9k (11 May 2022)

waterbottle said:


> Yes agreed, i thought you guys were referring to some howard-era policy I wasn't aware of



Housing bubble and its associated debt. 

Make money cheap, you make asset prices high. We haven't had a decent interest rate increase since the early 2000's, hence the absurdity with housing. 

Interest rates are about to er, change, so housing will get knocked over and take everything else with it.


----------



## Value Collector (12 May 2022)

sptrawler said:


> that means why would you buy shares for 5% div when you can get a 10% at bank?




Because of the inflation, over time the underlying assets of the shares will increase in value with inflation, where as the cash at bank won’t.

For example, over time as inflation devalues cash holdings, the range that Iron Ore price trades in will also rise, meaning the decades worth of Iron Ore in the ground, and alot of the long life infrastructure owned by the mining companies will rise in value too.

So with the share you will get your 5% franked dividend, along with a rises in the value of your capital base, but with the cash deposit your 10% unfranked interest you have to devote most of it to paying taxes and offsetting inflation, so it’s not a real 10% return.


----------



## waterbottle (12 May 2022)

over9k said:


> Housing bubble and its associated debt.
> 
> Make money cheap, you make asset prices high. We haven't had a decent interest rate increase since the early 2000's, hence the absurdity with housing.
> 
> Interest rates are about to er, change, so housing will get knocked over and take everything else with it.




Maybe :

https://www.afr.com/wealth/personal-finance/house-prices-to-correct-up-to-25pc-20220505-p5ait4 

I don't think rates will go high enough to cause a crash. Besides, data from banks shows most mortgagees should be able withstand a rate rise... Particularly with a potential 5% raise thanks to Albo


----------



## waterbottle (12 May 2022)

Value Collector said:


> Because of the inflation, over time the underlying assets of the shares will increase in value with inflation, where as the cash at bank won’t.
> 
> For example, over time as inflation devalues cash holdings, the range that Iron Ore price trades in will also rise, meaning the decades worth of Iron Ore in the ground, and alot of the long life infrastructure owned by the mining companies will rise in value too.
> 
> So with the share you will get your 5% dividend franked dividend, along with a rises in the value of your capital base, but with the cash deposit your 10% unfranked interest you have to devote most of it to paying taxes and offsetting inflation, so it’s not a real 10% return.




More importantly, no one ever got rich by saving money in a high interest bank account.


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## Value Collector (12 May 2022)

waterbottle said:


> More importantly, no one ever got rich by saving money in a high interest bank account.



Unless you are using OPM.


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## over9k (12 May 2022)

waterbottle said:


> Maybe :
> 
> https://www.afr.com/wealth/personal-finance/house-prices-to-correct-up-to-25pc-20220505-p5ait4
> 
> *I don't think rates will go high enough to cause a crash. *Besides, data from banks shows most mortgagees should be able withstand a rate rise... Particularly with a potential 5% raise thanks to Albo



Remember that inflation means more living expenses which means less money to actually pay the mortgage with. 

Either way, there's less money to pump into housing.


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## sptrawler (12 May 2022)

Value Collector said:


> Because of the inflation, over time the underlying assets of the shares will increase in value with inflation, where as the cash at bank won’t



What, like if someone bought AMP for $25 ten years ago, or bought Telstra in the last float at $7.40, AGL for $15?
Or are you talking about those who were fortunate to pick winners. Lol
Oh sorry I forgot everyone's a winner. Lol
God do we need a reset.


----------



## qldfrog (12 May 2022)

sptrawler said:


> I'm hopeful of a Labor win and the promised 5% wage increase comes through, that will IMO kickstart the economy in a big way, the buying power will be given a hell of a boost and should really put a rocket under the economy.



And a rocket under inflation and Australia collapse


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## sptrawler (12 May 2022)

Value Collector said:


> Unless you are using OPM.




Weren't you into peer to peer lending a while back, how is that going?


----------



## Value Collector (12 May 2022)

sptrawler said:


> What, like if someone bought AMP for $25 ten years ago, or bought Telstra in the last float at $7.40?
> Or are you talking about those who were fortunate to pick winners. Lol



I am talking about the average market rate return of the share market as a whole, like buying the index vs something like a term deposit or bond fund.

Off course some individual share investments perform badly if you buy at the wrong time or the wrong company, as do some bonds and other fixed interest investments.


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## sptrawler (12 May 2022)

qldfrog said:


> And a rocket under inflation and Australia collapse



The sooner the better, at least then they can recover, the longer it is held of the harder the recovery.


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## sptrawler (12 May 2022)

Value Collector said:


> I am talking about the average market rate return of the share market as a whole, like buying the index vs something like a term deposit or bond fund.
> 
> Off course some individual share investments perform badly if you buy at the wrong time or the wrong company, as do some bonds and other fixed interest investments.



Well what you said didn't reflect that at all and was completely missleading.


----------



## qldfrog (12 May 2022)

sptrawler said:


> Weren't you into peer to peer lending a while back, how is that going?



I have stopped all new lending and taking all available money back as it become available.
Around 4k left from 20k initially.
Roughly 6% return so far but i expect issue with both bad loans and liquidity freeze in coming months so getting out


----------



## Value Collector (12 May 2022)

sptrawler said:


> Weren't you into peer to peer lending a while back, how is that going?



Yep still am, it’s going great. I use it as a place to store cash I need in the short to medium term (where the share market isn’t suitable)

For example, when I earn a dividend I place the portion of that dividend set aside for my living expenses into my “wage fund” and my “wage fund” pays me a weekly wage from it over the next 5 years.

A decent chunk of this “wage fund” is in Plenti loans, that pay monthly principle and interest payments back into the account used to pay my weekly wage.

I also keep a bunch of OPM, In there such as my tax reserves, options premiums, and other cash that needs to be held for a while.


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## Value Collector (12 May 2022)

sptrawler said:


> Well what you said didn't reflect that at all and was completely missleading.



How didn’t it reflect that, My point was that there is underlying assets in shares that provide an inflation hedge, and I gave one example of a mining company’s assets.

Obviously I can’t go through the entire asx 300 index and explain how all the different companies assets are inflation hedged, so I thought giving one example would allow people to see what I meant, and they could use their own thinking cap to over lay the concept onto the other companies

But, I could have mentioned how the price of Avocardos and the land the grow on will rise with inflation over time and provide the inflation hedge.

Or, the price of pizza will rise and provide a hedge for dominos.

Or, the price of groceries will rise and provide a hedge for Woolies.

Or, the rental return on most reits etc etc.

The point is simple, real assets have inflation hedges built in, cash deposits require you to add back some of the interest into the principle so the sticker price return isn’t your real return.


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## divs4ever (12 May 2022)

waterbottle said:


> Maybe :
> 
> https://www.afr.com/wealth/personal-finance/house-prices-to-correct-up-to-25pc-20220505-p5ait4
> 
> I don't think rates will go high enough to cause a crash. Besides, data from banks shows most mortgagees should be able withstand a rate rise... Particularly with a potential 5% raise thanks to Albo



 the rates don't need to go high ,  just cause jobs to vanish , folks without jobs struggle to pay rents OR mortgages  ( and many landlords have mortgages as well  , so no rent less income to service those mortgages )  so housing prices moderate  meaning the bank is holding a security that MIGHT even go down 

 this MIGHT turn very nasty ( and complex ) and remember those mortgage-backed securities  , they are lurking somewhere as well 

 AND by the time the worker gets the rise 5% won't be enough ( it is just the way inflation works , sorry )


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## againsthegrain (12 May 2022)

a 30% drop in re is not even a crash,  since it had gone up that much during covid its a "healthy correction"  so are IR going up.  What is everybody getting worked up about our leaders will be happy to remind us


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## over9k (12 May 2022)

@waterbottle


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## waterbottle (12 May 2022)

over9k said:


> @waterbottle
> View attachment 141516



Yep it's going to happen, the question is how much and for how long. Ultimately interest repayments will be the limiting factor for rate rises, unless central banks are actively trying to cause a deflationary enviornment/recession...


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## over9k (12 May 2022)

waterbottle said:


> Yep it's going to happen, the question is how much and for how long. Ultimately interest repayments will be the limiting factor for rate rises, *unless central banks are actively trying to cause a deflationary enviornment/recession...*



This is the rock/hard place they now find themselves in - it's no longer inflation vs recession, it's how much stagflation do you want? 

They are well & truly boxed into a corner here and they know it.


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## againsthegrain (12 May 2022)

I think generally most people will be ok at 5 or 6% rates, yes some that bought at the top, over leveraged and lied will struggle but it comes down to the good of the many over the good of the few.  Wipe out everybody with inflation or wipe out 10%.. your a bad guy either way chose your poison


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## divs4ever (12 May 2022)

the problem ISN'T mortgage repayment  rises , it will be all the OTHER cost rises , power , fuel , food , government fees and charges  which will be running well ahead  of mortgage repayment increase  AND there is a fair chance property values will drop ( much  like a margin call   on your share portfolio  )


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## over9k (12 May 2022)

Good comment by Larry Summers I just saw - the problem is not the rate of inflation, it's the actual level of prices itself. 

What he meant was that we see this huge bounce in, say, oil, but then mostly a levelling off. The same thing occurred with those one time/very infrequent purchases during the pandemic like furniture. 

Peloton is a good example of this as once you've bought yourself one of those, you have it, that's it. The same goes for a lot of other stuff (e.g a couch or fridge or the endless home gyms set up a couple of years ago). 

It's the ongoing stuff/consumables (like energy) that remain pumping inflation. But furniture or whatever? A collapse in demand for that might very well produce _deflation. _

Take a look at peloton's stock price, sales numbers etc to get an idea of what I am talking about.


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## Value Collector (12 May 2022)

divs4ever said:


> the problem ISN'T mortgage repayment  rises , it will be all the OTHER cost rises , power , fuel , food , government fees and charges  which will be running well ahead  of mortgage repayment increase  AND there is a fair chance property values will drop ( much  like a margin call   on your share portfolio  )



Rate rises are meant to combat inflation, so hopefully the rises you mention will be dampened by the interest rate increases.

As for margin calls, that doesn’t really happen with your average residential mortgage, as long as you keep making the payments the bank won’t really care what the value of the property does, they know that each month the payment you make reduces the value of the loan and lowers their risk, and that over time inflation is also putting upward pressure on the house prices so that lowers their risk too.

The aren’t going to foreclose on a house just because it’s value dropped especially if you are still making payments.


----------



## over9k (12 May 2022)

Another musing: 

If crypto crashes to the point of non-profitability to mine, a lot of mines will be shut off, which will drop energy demand significantly. This will then ease inflation, and thus quite possibly actually pump crypto again. Which might make mining it profitable again... 

And so on and so forth.


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## over9k (12 May 2022)

divs4ever said:


> the problem ISN'T mortgage repayment  rises , it will be all the OTHER cost rises , power , fuel , food , government fees and charges  which will be running well ahead  of mortgage repayment increase  AND there is a fair chance property values will drop ( much  like a margin call   on your share portfolio  )



You're half correct divs - it's BOTH. If everything else rises then interest rates will rise too and thus there's both rising costs of living AND rising mortgage repayments *at the same time. *

Hence my constant mentioning of STAGflation, not INflation.


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## waterbottle (12 May 2022)

over9k said:


> Another musing:
> 
> If crypto crashes to the point of non-profitability to mine, a lot of mines will be shut off, which will drop energy demand significantly. This will then ease inflation, and thus quite possibly actually pump crypto again. Which might make mining it profitable again...
> 
> And so on and so forth.




So this is how crypto will replace central banks - with inflation targeting


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## over9k (12 May 2022)

waterbottle said:


> So this is how crypto will replace central banks - with inflation targeting



I was more thinking from a trading/playing the trend perspective. 

It'd be well worth a tech & semiconductors buy if what I propose eventuates as we'll see a drop in inflation (so tech will run) and then we'll see a bounce in chip demand again as people are buying up mining gpu's etc (again).


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## divs4ever (12 May 2022)

Prices Are Going Up So Fast at This Restaurant They’re Using Stickers on the Menu

https://www.bnnbloomberg.ca/prices-...-they-re-using-stickers-on-the-menu-1.1763823

DYOR

interesting that they selected a Miami restaurant , i would have thought some other states ( like New York and California ) would face bigger problems


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## divs4ever (12 May 2022)

over9k said:


> You're half correct divs - it's BOTH. If everything else rises then interest rates will rise too and thus there's both rising costs of living AND rising mortgage repayments *at the same time. *
> 
> Hence my constant mentioning of STAGflation, not INflation.



 firstly since we are facing the potential of multiple bubbles popping  , i am wondering if what we face will defy ( current ) definitions 

 normally business costs rise first  , but the businesses TRY to reduce the price shocks ( long term unsuccessfully ) , the unknown question  is will government help business in that fight  or jump in grabbing a bonus tax income rise 

in many governments the CPI calculation is rigged ( and has been for decades ) and CPI ( and PPI  ) are lagging indicators anyway 

so your 'official rates' and hindsight reactions trying to control the future ( except in very rare cases )

 now governments DO have a second weapon  as well as interest rates ... price controls ( and/or rationing ) this normally creates it's own issues , but it MIGHT be used 

 from memory living costs rise early and faster than ( existing ) mortgage costs  ( the prices rise first , it registers in the CPI , rates adjust  a bit later and mortgage costs increases ( EXCEPT for new mortgages  , which might turn into 'cowboy city ' ) and NORMALLY wages and pensions trail behind like some abandoned kitten 

 so in such  a cycle the worker only has one real choice .. CUT expenses ( as early as possible ) because wage rises are at least six months behind ( ditto for pensioners )

 now the interesting twist to all this is how the worker ( or pensioner ) reduces expenses ( some are extremely creative and/or illegal  ) share your good ideas among FRIENDS , and watch-out for informants 

 now what SHOULD happen ( if history is a guide THIS time ) is banks  should basically yield to government pressure on mortgage rate increases  ( but don't go betting any body parts on that ) so while mortgage repayments WILL rise they will not rise as much as the lenders would hope ( so watch out for bankers loading up the books with sub-prime mortgages ) 

 but don't be complacent about that,  your mortgage repayment was already a major part of your expenses  , so any increase will still HURT


----------



## Smurf1976 (13 May 2022)

divs4ever said:


> now governments DO have a second weapon as well as interest rates ... price controls ( and/or rationing ) this normally creates it's own issues , but it MIGHT be used



Considering the overall situation I do think there's a fair chance we'll see situations where products, including direct substitutes, simply aren't available at any price before all this over.

I've only encountered it with one item thus far, which is proprietary with no alternative brand or supplier available that fits the machine, but I can foresee more of it certainly given the overall situation with supply chains and economics. And that's without government stepping in.....


----------



## divs4ever (13 May 2022)

Smurf1976 said:


> Considering the overall situation I do think there's a fair chance we'll see situations where products, including direct substitutes, simply aren't available at any price before all this over.
> 
> I've only encountered it with one item thus far, which is proprietary with no alternative brand or supplier available that fits the machine, but I can foresee more of it certainly given the overall situation with supply chains and economics. And that's without government stepping in.....



 using my family's WW2 memories  , those  desired products will most likely be available from 'unofficial ' ( illegal) sources  , and THIS time i will have little sympathy for the government trying to regulate such activities 

 and very likely the issues will compound . ( because of a nail , the shoe was lost ....... etc etc )


----------



## 3 hound (13 May 2022)

Dumb question but doesn't inflation make debt go away in the sense that the average income was $100 and you have a debt of $10 then due to inflation you now have an income of $1000 so the original $10 is "less" money comparative to your current income.

It's why everyone laughed in Austin Powers when the out of touch bad guy stuck in the old days threatened world leaders with a ransom of a million dollars and they all laughed in his face at the once astronomical ransom value has become an unimpressive figure - the leaders all talk in trillions now.


----------



## qldfrog (13 May 2022)

3 hound said:


> Dumb question but doesn't inflation make debt go away in the sense that the average income was $100 and you have a debt of $10 then due to inflation you now have an income of $1000 so the original $10 is "less" money comparative to your current income.
> 
> It's why everyone laughed in Austin Powers when the out of touch bad guy stuck in the old days threatened world leaders with a ransom of a million dollars and they all laughed in his face at the once astronomical ransom value has become an unimpressive figure - the leaders all talk in trillions now.



That is why the boomers had it good in the 70s to 90s in France where home loans are 25y fixed rate..inflation paid the loans .not so great for places with variable rates..aka Oz
 or savers..especially now that we have heavily negative real term rates.
And while it is great for government debt being wiped by inflation, not so good on commoners as salaries pensions etc are always a step behind.
Inflation is the greatest universal tax on people.
In a flash,your parttime cafe waiter is taxed at 50%, and he will indeed be a filthy rich bastard as most will have no job at all.


----------



## 3 hound (13 May 2022)

qldfrog said:


> That is why the boomers had it good in the 70s to 90s in France where home loans are 25y fixed rate..inflation paid the loans .not so great for places with variable rates..aka Oz
> or savers..especially now that we have heavily negative real term rates.
> And while it is great for government debt being wiped by inflation, not so good on commoners as salaries pensions etc are always a step behind.
> Inflation is the greatest universal tax on people.
> In a flash,your parttime cafe waiter is taxed at 50%, and he will indeed be a filthy rich bastard as most will have no job at all.




Makes sense why government worldwide are so addicted to printing money and calling it MMT like it's something big brained and more than monkeys printing money.

It follows that gov has to keep growing in order to spend all the funny money into the real economy.

Their will never be accountability because the working population won't figure out the trick that's been played on them until they retire and the younger ones won't care  as they are to busy being the beneficiaries of the funny money stolen from their own future.

Brilliant set up really, throw in price fixing, bank bail-in's and central bank digital programmable currency for all the fools stupid enough to work and accumulate wealth and assets and you have the perfect scam.

The bad guy in Austin Powers is an amateur compared to this level of fukery.


----------



## sptrawler (13 May 2022)

3 hound said:


> Makes sense why government worldwide are so addicted to printing money and calling it MMT like it's something big brained and more than monkeys printing money.
> 
> It follows that gov has to keep growing in order to spend all the funny money into the real economy.
> 
> ...



With inflation the only ones who really get hurt, are those who can't carry their debt over the re adjustment and those on a fixed income. The rich love it, because bargains really present during inflationary re adjustments. 
A lot of money flows out of the market into term deposits and housing tends to stagnate, well that is what I observed during my time.


----------



## 3 hound (13 May 2022)

What about the people that have managed to save $x to spend in retirement, unless it has been invested successfully at a gain that $x dollars over time has lost value so it affects a lot more people than you mentioned.

Fixed income is a bit misleading because wages always increase and so does welfare. They may or may not increase as fast but no income is fixed according to history.

The winners are the rich investors picking up the carnage of those gone broke and the poor who spend every cent they get and save nothing.

The majority in the middle lose because they save instead of spend and lack the means to buy up the carnage left by defaulters.


----------



## sptrawler (13 May 2022)

3 hound said:


> What about the people that have managed to save $x to spend in retirement, unless it has been invested successfully at a gain that $x dollars over time has lost value so it affects a lot more people than you mentioned.



Those with $x in retirement usually have it in super or in term deposits, the ones who have saved a sizable sum are those workers who lean toward investment, so they usually are able to adjust. What I found that happened talking with the workmates over my career, when interest rates on savings became appreciably higher than dividends, most would rather take 10% term deposit, than risk the capital.



3 hound said:


> Fixed income is a bit misleading because wages always increase and so does welfare. They may or may not increase as fast but no income is fixed according to history.



That's true, I was using a general term to refer to those on welfare or self funding, welfare lags inflation and those whose only income is from investment have to grow their returns which isn't as easy as it sounds. 
Take for example someone who is 68 and self funded, they have to meet their drawdown requirement and maintain their buying power. Sounds easy but in practice is difficult. 
My father retired in the early 1990's and had $90,000 in super he thought he was rich and life would be easy.



3 hound said:


> The winners are the rich investors picking up the carnage of those gone broke and the poor who spend every cent they get and save nothing.



That's always been the case and always will be, even in China where the cultural revolution decreed everyone was equal and the wealth should be shared equally has now got the super rich and the super poor and that has happened over 20-30 years. 


3 hound said:


> The majority in the middle lose because they save instead of spend and lack the means to buy up the carnage left by defaulters.



The majority in the middle lose usually because they spend everything they earn, they buy the 4X4, the trips to Bali, the eating out, unfortunate but true.
The lockdown has proven that. 
Middle Australia has saved record amounts of money over the last two years, now they are blowing it bidding up houses. 
They would have bought record numbers of new cars, but they couldn't get hold of them, so second hand cars sales and prices went through the roof.
It is just the way people are. As any wealth creation book will tell you, most people don't become comfortable because they spend everything they earn, I know with my own kids I shake my head at the amount of money they earn and how little they save, but it is their business and not my place to but in.


----------



## 3 hound (13 May 2022)

sptrawler said:


> I know with my own kids I shake my head at the amount of money they earn and how little they save




Why would you want them to save??

We have established you either gamble on investing eg the stock exchange or the horse races (at this point I can't tell the difference except the race track has a high standard of dress code and you get to catch some sunshine while the stock exchange you are locked up in your basement feverishly obsessing over some graphs you pretend you understand and can predict) or you spend every cent you earn soon as you get and buy things you need and enjoy  because saving is stupid.


----------



## sptrawler (13 May 2022)

3 hound said:


> Why would you want them to save??
> 
> We have established you either gamble on investing eg the stock exchange or the horse races (at this point I can't tell the difference except the race track has a high standard of dress code and you get to catch some sunshine while the stock exchange you are locked up in your basement feverishly obsessing over some graphs you pretend you understand and can predict) or you spend every cent you earn soon as you get and buy things you need and enjoy  because saving is stupid.



Well you've answered your own question and as long as you are happy with the outcome thats great, it is those who spend everything then bitch about the fact they are broke that get up my nose.


----------



## 3 hound (13 May 2022)

sptrawler said:


> Well you've answered your own question and as long as you are happy with the outcome thats great, it is those who spend everything then bitch about the fact they are broke that get up my nose.




Well I do like horses and a jet-ski would look pretty cool behind the ute.


----------



## over9k (13 May 2022)

3 hound said:


> Dumb question but doesn't inflation make debt go away in the sense that the average income was $100 and you have a debt of $10 then due to inflation you now have an income of $1000 so the original $10 is "less" money comparative to your current income.
> 
> It's why everyone laughed in Austin Powers when the out of touch bad guy stuck in the old days threatened world leaders with a ransom of a million dollars and they all laughed in his face at the once astronomical ransom value has become an unimpressive figure - the leaders all talk in trillions now.



Yes, as long as we all get pay rises etc commensurate with it.


----------



## Smurf1976 (13 May 2022)

3 hound said:


> Dumb question but doesn't inflation make debt go away in the sense that the average income was $100 and you have a debt of $10 then due to inflation you now have an income of $1000 so the original $10 is "less" money comparative to your current income.



In theory that's absolutely true.

It's the in practice detail where difficulties arise and there's a few issues there.

First is simply bracket creep. As your gross income goes up x%, your take home income after Income Tax goes up by a lesser % simply because you're moving up the scales into a higher bracket. Unless government constantly raises the income thresholds, which it almost certainly won't or at least not without a considerable lag, that in due course captures everyone.

Second is that pay rises will usually lag inflation in practice. In large businesses and the public service CPI itself is often an input to pay rates. They'll look at last year's CPI and apply that to next year's pay rise +/- anything that's been negotiated. That's extremely common in situations where there's a large workforce of people all at the same grade / level which pegs them to a particular pay rate with no room for individual negotiation.

Small business well it's often the case that getting a pay rise means getting a new job and that of itself ensures that it lags for most workers.

End result, in practice, is real take home pay growth fails to keep pace with inflation for most when prices are rising quickly.

Then there's the compounding of CPI itself using that same approach. Eg councils and utilities very often apply a CPI price increase automatically. The higher CPI goes, the higher they raise charges.


----------



## 3 hound (13 May 2022)

Smurf1976 said:


> In theory that's absolutely true.
> 
> It's the in practice detail where difficulties arise and there's a few issues there.
> 
> ...




Interesting, thanks.


----------



## divs4ever (13 May 2022)

3 hound said:


> Why would you want them to save??
> 
> We have established you either gamble on investing eg the stock exchange or the horse races (at this point I can't tell the difference except the race track has a high standard of dress code and you get to catch some sunshine while the stock exchange you are locked up in your basement feverishly obsessing over some graphs you pretend you understand and can predict) or you spend every cent you earn soon as you get and buy things you need and enjoy  because saving is stupid.



sadly  , what you say  has a modern logic and wide acceptance

back when both my parents were alive ( mid 1960s ) the only major debt  the family had was  home  mortgage  , the family car was  second hand   bought for cash  ( the last one funded by the savings caused by paying the house mortgage several years early )

 a new ( old ) fridge you saved up for  , car ( saved up for ) etc etc  , and even today i have never had a credit card in my life ( saving up for a special item  has been a family trait )

 now i am not practitioner in the charts , but that doesn't make them useless  , you can still see the trends and  the changes in trends ( volatility )


----------



## divs4ever (13 May 2022)

sptrawler said:


> Well you've answered your own question and as long as you are happy with the outcome thats great, it is those who spend everything then bitch about the fact they are broke that get up my nose.



 YEP , worse than the hay-fever season ( at least the hay-fever season is only a few months a year )

 mind you  , life ( for some ) will be unimaginable chaos if we have a 'credit crunch '


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## againsthegrain (13 May 2022)

divs4ever said:


> sadly  , what you say  has a modern logic and wide acceptance
> 
> back when both my parents were alive ( mid 1960s ) the only major debt  the family had was  home  mortgage  , the family car was  second hand   bought for cash  ( the last one funded by the savings caused by paying the house mortgage several years early )
> 
> ...



I have never borrowed money in my life, until recently I thought this is reasonably normal, seems not


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## 3 hound (13 May 2022)

againsthegrain said:


> I have never borrowed money in my life, until recently I thought this is reasonably normal, seems not




You paid cash for a house??


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## againsthegrain (13 May 2022)

3 hound said:


> You paid cash for a house??



Not yet,  but that is the plan
I make a exception for a mortgage, that is definately not normal.  I mean like credit cards, after pay etc


----------



## 3 hound (13 May 2022)

againsthegrain said:


> Not yet,  but that is the plan




I am thinking about buying my next car with cash, I mean literally wads of paper dollars. The car is a D-max probs around $50k+.. do banks even have that much cash to handover the counter??

I reckon the car salesman will wet his pants. I will pull out the pile dollars in a brief case or whatever and say.. I want a bull bar, sports bar, tub lining to all for free. I am paying cash. Dude won't be able to control himself.

Taking my dog and an baseball bat with me in case someone tries to rob me.


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## againsthegrain (13 May 2022)

3 hound said:


> I am thinking about buying my next car with cash, I mean literally wads of paper dollars. The car is a D-max probs around $50k+.. do banks even have that much cash to handover the counter??
> 
> I reckon the car salesman will wet his pants. I will pull out the pile dollars in a brief case or whatever and say.. I want a bull bar, sports bar, tub lining to all for free. I am paying cash. Dude won't be able to control himself.
> 
> Taking my dog and an baseball bat with me in case someone tries to rob me.



they won't accept it, tried it lol they will tell you anywhere between 2k to 10k is the max a business will take.  Maybe for a private sale you will get lucky.  Don't know about now, 10 years ago I bought a car with 25k cash and nobody said nothing, bank gave it over the counter and the seller took it.  10 years forward you will probably be looked at as a crim  😔

However my friend said he sold 30-40k of bullion recently,  said he asked for cash. I got very curious and quizzed him but he reckons it was business as usual the dealer needed a day notice and the bank took it over the counter pretty casually

p.s carsales man hate doing cash sales,  they get commission on up selling finance


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## divs4ever (13 May 2022)

againsthegrain said:


> I have never borrowed money in my life, until recently I thought this is reasonably normal, seems not



yes i did once , i took out a ( sub-prime ) mortgage on a block of land  , NOW i look clever ( the land value has risen 4000% ) but that mortgage in the mid 1970's/1980's  had me wondering if i did the right thing at all 

 i still maintain a very low-debt life-style ( once bitten , twice shy )

 besides i discovered lay-by  to acquire those 'must-have items' ( pay installments FIRST  take it home later )


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## againsthegrain (13 May 2022)

divs4ever said:


> yes i did once , i took out a ( sub-prime ) mortgage on a block of land  , NOW i look clever ( the land value has risen 4000% ) but that mortgage in the mid 1970's/1980's  had me wondering if i did the right thing at all
> 
> i still maintain a very low-debt life-style ( once bitten , twice shy )
> 
> besides i discovered lay-by  to acquire those 'must-have items' ( pay installments FIRST  take it home later )




A mortgage is a exception, definately good debt and investment into your future.  However my path in life has not allowed me one, been walking the big uphill road on my own always, hence my nick


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## divs4ever (13 May 2022)

3 hound said:


> I am thinking about buying my next car with cash, I mean literally wads of paper dollars. The car is a D-max probs around $50k+.. do banks even have that much cash to handover the counter??
> 
> I reckon the car salesman will wet his pants. I will pull out the pile dollars in a brief case or whatever and say.. I want a bull bar, sports bar, tub lining to all for free. I am paying cash. Dude won't be able to control himself.
> 
> Taking my dog and an baseball bat with me in case someone tries to rob me.



 you had better check with your bank first ( some of them need a couple of days warning ) , AND those folks worried about money-laundering and crime ( the government didn't commit ) too 

   $50k to $100k   you can do it with ankle wallets  and money belts ( wear calf high leather boots and long pants ) and a fairly slim satchel  ( assuming it is in $50s and $100s )  ( big fancy metal cases  , draw attention to you , especially the ones with handcuffs )

 extra hint don't dress up too flashy , just enough to look like another punter kicking tyres  in the show-room

 don't scare the salesman too much , heart attacks are surprisingly common among them


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## divs4ever (13 May 2022)

againsthegrain said:


> A mortgage is a exception, definately good debt and investment into your future.  However my path in life has not allowed me one, been walking the big uphill road on my own always, hence my nick



about 1982 it sure didn't feel like it  ( good debt or a wise investment )   , just saying 17.5%  fixed isn't the best debt to have in an uncertain job-market


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## sptrawler (15 May 2022)

An article on inflation by the ABC, written by a business reporter, with a good understanding of economics.








						Some people benefit from rising inflation, but millions don't. What's your situation?
					

When the value of money changes, it doesn't change equally for everyone, writes Gareth Hutchens




					www.abc.net.au


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## Mohammed Hazabig'un (15 May 2022)

A few Canaries in the Mine are dropping off aren't they @over9k ? Building Permits down to -18.5 from 42 Business and Consumer Confidence down. Is Inflation the only thing keeping us going - it's buy now effect on Consumers?

Employment figures out Thursday (for Aus).


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## Mohammed Hazabig'un (15 May 2022)

And Wednesday Building Permits (US) out, Friday existing home Sales (US) out. They won't be good. More Canaries. Another big sell off, assuming we even get that far?


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## sptrawler (15 May 2022)

againsthegrain said:


> A mortgage is a exception, definately good debt and investment into your future.  However my path in life has not allowed me one, been walking the big uphill road on my own always, hence my nick



A mortgage is only good debt, when it is weighed against what it costs, take for example someone who works in a city and rents an apartment for $600/week.
That apartment may be worth $1.3m to buy + say $10k a year in associated costs.
Right what if that person took a loan out to buy that apartment, how much better off would he be? I wont do the sums, because I'm lazy.

Now what if that person borrowed $600k and bought a 4x2 out in the suburbs, close to transport,schools and facilities and rented it out at $500/wk?
He stayed in the apartment at $600 and got a mate in to share the rent.
Not saying it is for everyone, but I'm not a great believer in borrowing upto the eyeballs to buy your house, which isn't deductable and is really only saving you rent.
I would rather go bush, earn mega bucks and rent, then at the same time buy an investment property that I want to move into eventually, than stay in the city on the treadmill and try and pay for it with after tax dollars while I live in it.
Just different ways of looking at the same issue IMO, there isn't a right and a wrong, only what suits your circumstances and sacrifices.


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## 3 hound (15 May 2022)

againsthegrain said:


> A mortgage is a exception, definately good debt and investment into your future.  However my path in life has not allowed me one, been walking the big uphill road on my own always, hence my nick




When you get a mortgage you can not rely on excuses anymore at life, you have to succeed and there is no second option.  It's certainly not for everyone, in fact it's relentless. I did the whole thing completely on my own tho which probs makes it a bit harder (or not).  When you get it done and dusted you will walk two inches taller.

there is something to be said for starting young but if your not ready then your not ready.


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## sptrawler (15 May 2022)

3 hound said:


> When you get a mortgage you can not rely on excuses anymore at life, you have to succeed and there is no second option.  It's certainly not for everyone, in fact it's relentless. I did the whole thing completely on my own tho which probs makes it a bit harder (or not).  When you get it done and dusted you will walk two inches taller.
> 
> there is something to be said for starting young but if your not ready then your not ready.



That's right, but trust me there will be someone in the future, telling you that you were lucky and you should be penalised.
The sad part will be, the media will agree with them and whatever you say will be taken as you just being a rich person who doesn't understand how hard it is.
That unfortunately is what Australia has become, if you manage to get ahead, you are reminded of those that didn't get ahead and you should contribute to help those to achieve what you have.
It is a very noble cause and my youngest son has tapped into it extremely well, which I am pleased to say has taken the burden off my shoulders. 😂


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## divs4ever (16 May 2022)

Mohammed Hazabig'un said:


> A few Canaries in the Mine are dropping off aren't they @over9k ? Building Permits down to -18.5 from 42 Business and Consumer Confidence down. Is Inflation the only thing keeping us going - it's buy now effect on Consumers?
> 
> Employment figures out Thursday (for Aus).



 that consumer spending will drop soon enough , expect buying limits soon ( maybe even rationing ) reduced goods on shelves and  reduced money available for consumer discretionary spending

 but of course scarcity in some items ( like food ) will ROCKET real inflation


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## divs4ever (16 May 2022)

sptrawler said:


> That's right, but trust me there will be someone in the future, telling you that you were lucky and you should be penalised.
> The sad part will be, the media will agree with them and whatever you say will be taken as you just being a rich person who doesn't understand how hard it is.
> That unfortunately is what Australia has become, if you manage to get ahead, you are reminded of those that didn't get ahead and you should contribute to help those to achieve what you have.
> It is a very noble cause and my youngest son has tapped into it extremely well, which I am pleased to say has taken the burden off my shoulders. 😂



 BRUTAL , but probably true in the not so distant future 

 and yes despite  the income of media personalities , the worker who paid off their  home is usually the target  (media ,  councils , state , Federal government , insurers , etc etc etc  )

 wait until Communism hits here  , NOBODY will do more than the bare minimum ( and some will regularly do less than that )


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## sptrawler (16 May 2022)

divs4ever said:


> wait until Communism hits here  , NOBODY will do more than the bare minimum ( and some will regularly do less than that )



That definitely appears to be the way we are heading, whether by design or by accident, I really don't know.


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## divs4ever (16 May 2022)

sptrawler said:


> That definitely appears to be the way we are heading, whether by design or by accident, I really don't know.



 by design in some cases , but also as a consequence of policies made inside and outside Australia 

but is has been a progressive trend over a long time ( although it MIGHT be exponential soon )

the tragic part is there had been several historic examples  to warn us about this path ( not just the Soviet Union )


----------



## qldfrog (16 May 2022)

divs4ever said:


> by design in some cases , but also as a consequence of policies made inside and outside Australia
> 
> but is has been a progressive trend over a long time ( although it MIGHT be exponential soon )
> 
> the tragic part is there had been several historic examples  to warn us about this path ( not just the Soviet Union )



40y of unrelenting socialism in France with very few at best center right govs intervals, a country in complete downfall on all criterias you can imagine and surviving on the back of yet people either want more of it . Macron or even vote more leftist via Mélenchon.
Until a country reaches total economic collapse like former USSR, Venezuela: you will always find a majority of people ready to steal from a minority.. until there is absolutely nothing left...pun..
Australia is just starting and inflation will give more and more place to real or perceived sufferings which will accelerate the trend..all for the benefit of this cronyism socialism taking over the world


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## divs4ever (16 May 2022)

the DIFFERENCE is nobody is sanctioning France , it is going that way under it's own impetus , whereas Communist/Socialist leaning folk could point out heavy sanctioning as part of the decline of the Soviet Union and Venezuela 

 and yes it seems the cronyism is the root cause of the demise of government styles   both Communist/Socialist and 'Capitalist '  but of course  , those governments would say they require more folk that they can trust  ( even if it takes corruption to build those close relationships , as yes that sounds like an oxymoron to me , but here we are )

 BTW  the whole EU experiment is an evolving education in Communism ( and cronyism )


----------



## againsthegrain (16 May 2022)

qldfrog said:


> 40y of unrelenting socialism in France with very few at best center right govs intervals, a country in complete downfall on all criterias you can imagine and surviving on the back of yet people either want more of it . Macron or even vote more leftist via Mélenchon.
> Until a country reaches total economic collapse like former USSR, Venezuela: you will always find a majority of people ready to steal from a minority.. until there is absolutely nothing left...pun..
> Australia is just starting and inflation will give more and more place to real or perceived sufferings which will accelerate the trend..all for the benefit of this cronyism socialism taking over the world




It is really the opposite in communism, on paper everybody is equal, in practice 1% own 99% they rob from the majority.


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## Value Collector (16 May 2022)

3 hound said:


> Dumb question but doesn't inflation make debt go away in the sense that the average income was $100 and you have a debt of $10 then due to inflation you now have an income of $1000 so the original $10 is "less" money comparative to your current income.
> 
> It's why everyone laughed in Austin Powers when the out of touch bad guy stuck in the old days threatened world leaders with a ransom of a million dollars and they all laughed in his face at the once astronomical ransom value has become an unimpressive figure - the leaders all talk in trillions now.



Yes, provided that you can ride out the interest rate increases which normally come with inflation and that your debt is held at interest rates that aren’t above the rate of inflation.

This is the key point of inflation, it is a devaluation of the currency, so if you have borrowed currency from some one else and used it to buy a real world asset, it’s the owner of the currency that takes the inflation hit, and your real world asset will most likely be hedged against inflation over the longer term, even though in the short term high interest rates might suppress the real world prices of assets for a while.


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## Value Collector (16 May 2022)

3 hound said:


> What about the people that have managed to save $x to spend in retirement, unless it has been invested successfully at a gain that $x dollars over time has lost value so it affects a lot more people than you mentioned.
> 
> Fixed income is a bit misleading because wages always increase and so does welfare. They may or may not increase as fast but no income is fixed according to history.
> 
> ...



If they are holding their savings in currency/cash then they will lose purchasing power to inflation, if they are holding real assets they will largely be protected and their purchasing power should stay the same or Increase with investment earnings.


----------



## 3 hound (16 May 2022)

againsthegrain said:


> It is really the opposite in communism, on paper everybody is equal, in practice 1% own 99% they rob from the majority.



I think communism is inevitable or at least a society that is highly regulated/controlled on personal and financial freedoms.

look who's breeding the most at least in Australia. Seeing a large family is becoming rarer than all previous generations but if you do see a large family the odds in Australia are pretty high that you can guess the source of the revenue stream supporting them.


----------



## divs4ever (16 May 2022)

againsthegrain said:


> It is really the opposite in communism, on paper everybody is equal, in practice 1% own 99% they rob from the majority.



 that is how 'Capitalism ' is turning out  , but not  how 'free capital markets ' work 

 i would suggest it is the humans administrating EITHER system ( Communism/Socialism  and Capitalism ) that is the problem 

 i have been in communist and socialist systems  ( where the common people  , or people with a common interest  band together for MUTUAL benefit  ) BUT 'regulations and organisation ' and later trying to form a power/political base , modifies a useful concept into a millstone around society's neck

 also as a person involved  in very small businesses ( where i sometimes had partners but rarely employees/sub-contractors ) i found distance from interaction with the client/customer a major disadvantage  , so quite obviously ruling an 'empire ' was not for me  .

 but politicians ( and bureaucrats ) NEED to intervene so as to appear relevant and necessary , and we end up with political systems which SEEM to be opposing each other , but in reality are just a systems to amass control over others


----------



## Garpal Gumnut (16 May 2022)

Value Collector said:


> If they are holding their savings in currency/cash then they will lose purchasing power to inflation, if they are holding real assets they will largely be protected and their purchasing power should stay the same or Increase with investment earnings.



The trick I believe is to be in control of the fist that controls out of control capitalism. 

I have always tried to ensure that my needs were met when I was young and poor but earning, and that my wants are purchased when out of favour amongst the masses. 

Untrammelled advertising and foreign or domestic robber baron companies inveigle the unwary in to useless spending. 

Our local newspaper, the Townsville Bulletin is known colloquially as the Harvey Norman Times. 

Domestic banks refuse to pass on interest rates. 

I won't go on. 

gg


----------



## Value Collector (16 May 2022)

sptrawler said:


> A mortgage is only good debt, when it is weighed against what it costs, take for example someone who works in a city and rents an apartment for $600/week.
> That apartment may be worth $1.3m to buy + say $10k a year in associated costs.
> Right what if that person took a loan out to buy that apartment, how much better off would he be? I wont do the sums, because I'm lazy.
> 
> ...



I agree the costs of ownership need to be weighed against the cost of renting, however most people do those sums incorrectly.

What I mean by this is that they take their total mortgage payment + the other costs (insurance, rates, maintenance etc) and compare that to the weekly rent.

In my opinion this is the wrong way to look at it.

1. Only the interest component of the mortgage payment is an expense, the principle payment is technically savings, eg principle payments are like a bank account you can access later, not a genuine cost.

2. Only part of the interest charge is a “real expense”, part of it is just an inflation offset, eg if you pay 4% interest, and the inflation rate is 3% you are really only spending 1% on interest and the other 3% is basically added back to the capital value of your home.

3, all the insurance, rates, maintenance etc are real costs, but when you add these to the small real after inflation interest rate, the weekly costs are small compared to renting.

This is why over the long term home owners end up way ahead, because their interest payments decline over the years as the loan shrinks, while the capital value increases with the principle payments accumulation, and the inflation offsets.

Where as the cost of renting never really decreases, and only goes up with inflation.


----------



## divs4ever (16 May 2022)

3 hound said:


> I think communism is inevitable or at least a society that is highly regulated/controlled on personal and financial freedoms.
> 
> look who's breeding the most at least in Australia. Seeing a large family is becoming rarer than all previous generations but if you do see a large family the odds in Australia are pretty high that you can guess the source of the revenue stream supporting them.



 the SIZE of the 'C' makes a big difference to the outcome  , commune is where a group of people group together for mutual benefit , some members are good at baking bread , others better at farming , still other efficient at building fences and buildings  and by using the best people for a skill allows others the ability to efficiently utilize their talents also 

 a commune shares resources and outcomes , sure , but MEMBERS are not automatically equal in talents and skills  , just in the share of benefits of the combined efforts 

Communism introduces a regulatory/administrative class and immediately inefficiency creeps into the mix  , a 'politburo' meets ponders and decides  on what to do next  ,  whereas a commune would immediately drop everything to fight a major fire , a politburo would need to organize a team  etc etc  , and response to the fire is slower and less instinctive ( taking away chances of adaptive improvements DURING the crisis )

 BTW  large families  are a feature of societies with high mortality rates.
  the idea in nature  is the successful genetics survive and improve the chances to carry on the bloodlines  , large families in a society that is stable and secure tends to drain the natural resources of the area ( eat themselves out of house and home ) in the medium term .

 SADLY this  trend in nature is not leveraged  , where we could improve survival conditions in impoverished nations and thus slowly reduce population increases naturally ( reducing the drain of natural resources )

 BUT this comes at a different cost  the intense pressure on survival removed , genetics without a competitive advantage  , are tolerated  and multiplied ( look at our Royal Family  could you see any of them leading an army from the front  ala Napoleon Bonaparte )


----------



## Garpal Gumnut (16 May 2022)

divs4ever said:


> the SIZE of the 'C' makes a big difference to the outcome  , commune is where a group of people group together for mutual benefit , some members are good at baking bread , others better at farming , still other efficient at building fences and buildings  and by using the best people for a skill allows others the ability to efficiently utilize their talents also
> 
> a commune shares resources and outcomes , sure , but MEMBERS are not automatically equal in talents and skills  , just in the share of benefits of the combined efforts
> 
> ...



"Our Royal Family" ????

I suppose the Duchess of York could find some work behind the lines after the sun set.

gg


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## 3 hound (16 May 2022)

divs4ever said:


> BTW large families are a feature of societies with high mortality rates.




Not always while it is a feature of populations with high mortality there are more factors eg religion, ethnicity, politics, education.

For example two people with roughly same education, money, environment...etc the more conservative person (politically right leaning) is more fertile than their left leaning counterpart. Pew research has investigated this thoroughly. Religious people in first world countries tend to be more fertile than atheists as well normalising for all other factors.


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## Value Collector (16 May 2022)

This book is a good read for those interest in the history and growth of capitalism, and the history of the various European nations currencies and economies.

I don’t agree with all the authors opinions, but the historical facts are true, and it is good to hear how the other side thinks some times.


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## Value Collector (16 May 2022)

3 hound said:


> Not always while it is a feature of populations with high mortality there are more factors eg religion, ethnicity, politics, education.
> 
> For example two people with roughly same education, money, environment...etc the more conservative person (politically right leaning) is more fertile than their left leaning counterpart. Pew research has investigated this thoroughly. Religious people in first world countries tend to be more fertile than atheists as well normalising for all other factors.



Actually in the book “factfullness” they debunk the theory that religion and ethnicity determine birth rates, with out going into detail to much, they studied groups of the same ethnic and religious back grounds and found that even with in those same groups birth rates dropped depending on how educated their women were and their access to health care. 

It ended up showing that regardless of what religion you were or your race, as your country got richer and your women more educated, birth rates dropped.

Even inside the USA you see higher birth rates in the poorer states.


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## sptrawler (16 May 2022)

Value Collector said:


> I agree the costs of ownership need to be weighed against the cost of renting, however most people do those sums incorrectly.
> 
> What I mean by this is that they take their total mortgage payment + the other costs (insurance, rates, maintenance etc) and compare that to the weekly rent.
> 
> ...



Agree 100%, I was more referring to the manner in which the property is purchased, rather than the actual benefit of home ownership, over renting. 
Home ownership is probably the single most important thing a person can buy, as has been shown in most studies, but purchasing beyond your means or without thought as to how the purchase loan is structured can be a road to disaster also.
Many marriages have failed due to unrealistic investment choices, including the purchase of the PPR, which in turn can destroy wealth .


----------



## qldfrog (16 May 2022)

againsthegrain said:


> It is really the opposite in communism, on paper everybody is equal, in practice 1% own 99% they rob from the majority.



Not really.
You are right about the 1pc but they maintain power by scaregoating a minority usually the richer one..to add greeed to hate..
see nazi and jewish community,
 to redirect the frustration of the majority.look at the "antivax" targeted campaign just a couple of months ago..society is ripe...
And Reset will happen


----------



## waterbottle (16 May 2022)

Hmmmm this is not looking good. 
China reporting negative industrial output for past quarter because of covid-zero policy. Last time this happened was att he start of the pandemic....
Commentary from ING economists re: supply chains, unlikely to resolve in 2023.










						Supply chain pressure to persist through 2022, leading to permanent changes in trade
					

Global supply chains remain under pressure. With the war in Ukraine and China’s zero Covid policy, delays and protracted supply shortages will cloud…




					think.ing.com


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## againsthegrain (16 May 2022)

qldfrog said:


> Not really.
> You are right about the 1pc but they maintain power by scaregoating a minority usually the richer one..to add greeed to hate..
> see nazi and jewish community,
> to redirect the frustration of the majority.look at the "antivax" targeted campaign just a couple of months ago..society is ripe...
> And Reset will happen




Basically nobody wants to do anything properly or work hard because they see it will get them nowhere anyway, they also see the ones in power fux every1 under them and sit on 500k wages...  oh wait I think I seen this somewhere.. so who do you blame the parents who set the bad example or the kids who take it on?


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## Value Collector (16 May 2022)

waterbottle said:


> Hmmmm this is not looking good.
> China reporting negative industrial output for past quarter because of covid-zero policy. Last time this happened was att he start of the pandemic....
> Commentary from ING economists re: supply chains, unlikely to resolve in 2023.
> View attachment 141757
> ...



Yeah, but look at that V shaped recovery from the start of the pandemic, I don’t think any slow down in the short term affects the long term values of business.

Think of it like this, if you had a rental property and for some short term reason it was vacant and produced no rent for say 3 months, would you suddenly think it halved in value? Probably not. 

So if people go crazy and start selling their property at half price because of a 3 month vacancy, I would say that’s the time to be buying, not trying to race them to sell yours.


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## divs4ever (16 May 2022)

waterbottle said:


> Hmmmm this is not looking good.
> China reporting negative industrial output for past quarter because of covid-zero policy. Last time this happened was att he start of the pandemic....
> Commentary from ING economists re: supply chains, unlikely to resolve in 2023.
> View attachment 141757
> ...



 i disagree , i think China coming back to  'ONLY' 5% annual growth ( maximum  ) is a good thing  , it suggests the Chinese economy is maturing , and veering towards a more sustainable growth figure ( especially when many other economies are shrinking )

 now the Capitalists want an ever-booming China because they realize the regime would eventually collapse leaving a power vacuum  to plunder ( think Russia/Ukraine etc etc after the Soviet collapse )

 now sure i am no fan of the Chinese regime , but we are now seeing kleptocrats elsewhere at their greedy worst ( in say Libya )  i would rather a stable China  , than open slave-markets etc on a massive scale


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## divs4ever (16 May 2022)

againsthegrain said:


> Basically nobody wants to do anything properly or work hard because they see it will get them nowhere anyway, they also see the ones in power fux every1 under them and sit on 500k wages...  oh wait I think I seen this somewhere.. so who do you blame the parents who set the bad example or the kids who take it on?



 it pains me to agree with you here  , but i do see the slightest glints of hope in the younger generations ( sometimes in despite of the parents , maybe it is a rebellion thing )

 but that trend has been growing since the '80s  , slowly and corrosively ( leaving some nice opportunities for me from time to time )


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## againsthegrain (16 May 2022)

divs4ever said:


> it pains me to agree with you here  , but i do see the slightest glints of hope in the younger generations ( sometimes in despite of the parents , maybe it is a rebellion thing )
> 
> but that trend has been growing since the '80s  , slowly and corrosively ( leaving some nice opportunities for me from time to time )



The parent/kids thing was a analogy for the plebs adopting the same mentality as the rulers lol  (thats not my job)


----------



## over9k (16 May 2022)

Lots of awful data out of china today, S&P futures are down nearly as much as NDX on the back of oil tumbling so energy looking like another tumble (topup) tonight: 




Aramco meanwhile has just posted record profits. Only way to get exposure is through the saudi arabia etf KSA, the arabs have made a very deliberate point of (as much as they can) keeping the rest of the world's fingers of of their precious pie.


----------



## over9k (16 May 2022)

Still buying


----------



## divs4ever (16 May 2022)

againsthegrain said:


> The parent/kids thing was a analogy for the plebs adopting the same mentality as the rulers lol  (thats not my job)



if have seen a few children rise above the expectations  you would have with their upbringing , however time will tell if the criminal world entices them after hitting the glass-ceiling a couple of times 

 sometimes that applies to the plebs as well  , you would be amazed on who gets red-pilled  after a work-incident or two


----------



## waterbottle (16 May 2022)

The China factor expected to alleviate come June 1









						China economy hit in April as zero-COVID slams brakes on growth
					

Widespread lockdowns dent consumer spending; vehicle sales plunge




					asia.nikkei.com


----------



## over9k (16 May 2022)

Why then?


----------



## waterbottle (16 May 2022)

over9k said:


> Why then?




That's just what the CCP plan is, presumably based on number of infections - https://asia.nikkei.com/Spotlight/Coronavirus/Shanghai-targets-June-1-return-from-COVID-lockdowns

Although residents have complained that re-opening plans have been delayed several times before....


----------



## Mohammed Hazabig'un (17 May 2022)

"Former Federal Reserve Chairman Ben Bernanke said the current Fed leaders were too slow to react to surging U.S. inflation and as a result face a period of stagflation, or a combination of stagnant growth and high inflation."









						Bernanke Says Fed Too Slow on Inflation and Faces Stagflation By Bloomberg
					

Bernanke Says Fed Too Slow on Inflation and Faces Stagflation




					m.au.investing.com


----------



## over9k (17 May 2022)

Trimmed my topup from the 25th here. 78% return in 3 weeks. Not too shabby. Obviously kept the main play from months back. Looking at some more related plays around fertiliser and wheat. Might be longer holds on those rather than dives in & out though.


----------



## Craton (17 May 2022)

From the 3rd May 2022 RBA minutes:



> Domestic economic developments​Turning to domestic economic conditions, members observed that price pressures were intensifying and there was upward pressure on wages. Activity and conditions in the labour market had been resilient in the face of global and domestic supply shocks, and strong underlying momentum was expected to be sustained over the course of the year.
> 
> The key domestic development since the previous meeting was that inflation had increased to its highest rate in many years. Headline inflation was 2.1 per cent in the March quarter and 5.1 per cent over the year. Fuel and new dwelling costs accounted for around half of the quarterly increase. Trimmed mean inflation had increased to 1.4 per cent in the quarter and 3.7 per cent in year-ended terms. This increase in underlying inflation was consistent with a broadening of inflationary pressures.
> 
> ...


----------



## waterbottle (17 May 2022)

Shanghai reports 0 cases of covid for the 3rd day in a row. Projections look like they're on track to open up in June given predicted case load.  Social media reports of days pass note being given out with some workers returning to manufacturing district.


Will be hard to predict what effect this will have on inflation. Might bring price of oil back to what $120 but will also address supply issues of the EU oil fails then we could be looking at 2 of the major inflationary forces being thwarted.


----------



## 3 hound (17 May 2022)

waterbottle said:


> Shanghai reports 0 cases of covid for the 3rd day in a row. Projections look like they're on track to open up in June given predicted case load.  Social media reports of days pass note being given out with some workers returning to manufacturing district.
> 
> 
> Will be hard to predict what effect this will have on inflation. Might bring price of oil back to what $120 but will also address supply issues of the EU oil fails then we could be looking at 2 of the major inflationary forces being thwarted.



There were supply issues before the Chinese lock downs AND the war in Ukraine, does anyone even know anymore what is causing the supply problems.


----------



## qldfrog (17 May 2022)

waterbottle said:


> Shanghai reports 0 cases of covid for the 3rd day in a row. Projections look like they're on track to open up in June given predicted case load.  Social media reports of days pass note being given out with some workers returning to manufacturing district.
> 
> 
> Will be hard to predict what effect this will have on inflation. Might bring price of oil back to what $120 but will also address supply issues of the EU oil fails then we could be looking at 2 of the major inflationary forces being thwarted.



I am lost.if China reopens, oil consumption will increase even more.
The lockdown is not affecting production of oil, and hardly refining.
What we have is the West deciding to boycott itself from a key producer: Russia blacklist
 and the end result of now nearly a decade of pretending that fossil fuels are not required so no investment, exploration, licensing.. 
None related to Shanghai..
Oil issue will remain, and not so sure the inflation is really that linked to China covid at least here.
Food price explosion is oil/fertiliser based..
Transport is oil/ self inflicted regulation..and car part issues is the chip shortage..which after 2y, is clearly more an economic weapon from China than an actual production problem .but hey...who wants to open his her eyes...


----------



## waterbottle (17 May 2022)

qldfrog said:


> I am lost.if China reopens, oil consumption will increase even more.
> The lockdown is not affecting production of oil, and hardly refining.
> What we have is the West deciding to boycott itself from a key producer: Russia blacklist
> and the end result of now nearly a decade of pretending that fossil fuels are not required so no investment, exploration, licensing..
> ...



China will increase demand on oil over they return to regular manufacturing.


----------



## divs4ever (17 May 2022)

Chinese oil demand may rise  , but who will sell that extra oil  , chances are Russia , Iran and Saudi Arabia ( AND in yuan )


----------



## 3 hound (17 May 2022)

qldfrog said:


> I am lost.if China reopens, oil consumption will increase even more.
> The lockdown is not affecting production of oil, and hardly refining.
> What we have is the West deciding to boycott itself from a key producer: Russia blacklist
> and the end result of now nearly a decade of pretending that fossil fuels are not required so no investment, exploration, licensing..
> ...




It's really lazy and dishonest at the highest level for gov to shift the blame on Putin and Chinese lock downs for supply issues and inflation yet people repeat it like it's a fact of nature.  US policy makers are now proposing price fixing  as if somehow corporations are causing inflation by price gouging. Gov setting the price of goods while there are already shortages of those goods - what could go wrong.


----------



## 3 hound (17 May 2022)

qldfrog said:


> the chip shortage..which after 2y, is clearly more an economic weapon from China than an actual production problem .




I have seen reports that China has been hoarding and stockpiling food for years.
Soldiers are farmers in Ukraine and the window for getting crops in the ground is closing in Ukraine, US and other countries due to fighting, diesel prices or fertiliser prices.

You can quote me on this, China will use its vast food stockpile as an economic weapon of mass leverage  over other countries.


----------



## over9k (17 May 2022)

3 hound said:


> It's really lazy and dishonest at the highest level for gov to shift the blame on Putin and Chinese lock downs for supply issues and inflation yet people repeat it like it's a fact of nature.



It is dude. How much of the world's oil and wheat do you think has been cut off in the sanctions/war?


----------



## over9k (17 May 2022)

Meanwhile, with china announcing a lift to the lockdowns, we see NDX futures the highest and another screaming night for energy: 




So we should see energy demand increase and supply of other stuff (aka inflation) improve a bit.


----------



## Value Collector (17 May 2022)

3 hound said:


> There were supply issues before the Chinese lock downs AND the war in Ukraine, does anyone even know anymore what is causing the supply problems.



Obviously the Chinese lockdowns and the Ukraine war has added a lot of fuel to the fire, but the supply issue before that were mainly caused by other covid restrictions and isolations.

For example rules that people must isolate if they are a close contact were shutting downs and delaying factory output and transport.


----------



## over9k (18 May 2022)

Also looking like a pretty big break above trend again: 




So I've trimmed a bit more today. All eyes on the next entry point, maybe around the 480 mark.


----------



## divs4ever (18 May 2022)

Value Collector said:


> Obviously the Chinese lockdowns and the Ukraine war has added a lot of fuel to the fire, but the supply issue before that were mainly caused by other covid restrictions and isolations.
> 
> For example rules that people must isolate if they are a close contact were shutting downs and delaying factory output and transport.



 i would suggest some troubles were actually brewing  before Covid as well  , the truck-driver decline in several nations  , for one  , another was changes to the permissible shipping fuel , not helping shipping bottle-necks at all  , and Boeing was also facing several problems ( putting pressure on air transport )


----------



## qldfrog (18 May 2022)

waterbottle said:


> China will increase demand on oil over they return to regular manufacturing.



Yes so me being puzzled by your post.
I took:"Might bring price of oil back to what $120 but will also address supply issues of the EU oil fails then we could be looking at 2 of the major inflationary forces being thwarted."
As saying oil fails aka oil falls
You maybe meant oil back UP at 120?..
But that is not deflationary...
Anyway i think we agree 
China unlocks 
so oil goes up 
so inflation worsening.


----------



## 3 hound (18 May 2022)

over9k said:


> It is dude. How much of the world's oil and wheat do you think has been cut off in the sanctions/war?



Supply chain issues and (transitory) inflation preceded Ukraine and sanctions.


----------



## over9k (18 May 2022)

3 hound said:


> Supply chain issues and (transitory) inflation preceded Ukraine and sanctions.



Sure but take a look at the rate of increase before vs after the invasion.


----------



## over9k (18 May 2022)

Meanwhile:


----------



## waterbottle (18 May 2022)

3 hound said:


> There were supply issues before the Chinese lock downs AND the war in Ukraine, does anyone even know anymore what is causing the supply problems.




I don't think anyone knows. Probably a number of factors causing some constraints


qldfrog said:


> Yes so me being puzzled by your post.
> I took:"Might bring price of oil back to what $120 but will also address supply issues of the EU oil fails then we could be looking at 2 of the major inflationary forces being thwarted."
> As saying oil fails aka oil falls
> You maybe meant oil back UP at 120?..
> ...




Ah sorry! I meant if he EU oil *ban *fails, then we will be looking at a situation with less inflation. I think oil prices are being by the expectation that a Russian oil ban will occur


----------



## over9k (18 May 2022)

Can we please give this a rest?


----------



## 3 hound (18 May 2022)

over9k said:


> View attachment 141811
> 
> 
> Can we please give this a rest?




I appreciate you posting current graphs but would appreciate the benefit of  some narrative to go with them. Not everyone here studies this stuff.


----------



## over9k (18 May 2022)

3 hound said:


> I appreciate you posting current graphs but would appreciate the benefit of  some narrative to go with them. Not everyone here studies this stuff.



Energy took off back at the start of the year when the invasion fears began. Not a coincidence. That's not to say it wasn't increasing at a decent rate beforehand, but it was the invasion and sanctions that sent it soaring. 

Here's the trend difference to get an idea:




You can do the same with the WTI & brent crude prices if you like but you get the idea.


----------



## Value Collector (18 May 2022)

3 hound said:


> .





3 hound said:


> Supply chain issues and (transitory) inflation preceded Ukraine and sanctions.



This video explains it all in detail, it was caused by a perfect storm of lock downs, followed by isolations of chunks of the workforce, and the “just in time” supply chain design couldn’t handle it.


----------



## Stockbailx (18 May 2022)

Heard on the grape vine wages could Increase by 2.5% due to interest rate rise.* Real wage growth—or the difference between wage growth and inflation—would be independent of inflation*. Productivity?
Sited this vidio suggesting wages to lag behind inflation;





__





						Loading...
					





					www.news.com.au


----------



## 3 hound (18 May 2022)

Stockybailz said:


> suggesting wages to lag behind inflation;




Isn't that just basic economics?


----------



## divs4ever (18 May 2022)

waterbottle said:


> I don't think anyone knows. Probably a number of factors causing some constraints
> 
> 
> Ah sorry! I meant if he EU oil *ban *fails, then we will be looking at a situation with less inflation. I think oil prices are being by the expectation that a Russian oil ban will occur



 the oil ban will most likely fail  , BUT the issue is will Russia renew/renegotiate  contracts  , it can take it's own  sweet time  to sign up new customers  , OR accelerate industrialization inside Russia  , they already make a lot of stuff  , they could easily choose to make more given the influx of Ukrainian refugees  ( some of whom might decide to stay )

 they have also recently acquired a BIG steel plant  , it will take a hell of a tidy up   but probably beats building a new one from scratch


----------



## divs4ever (18 May 2022)

3 hound said:


> Isn't that just basic economics?



 seemed to be a fact of life  when i was working during the 70's and 80's 

 i don't think you needed to graduate high school to notice that


----------



## waterbottle (18 May 2022)

divs4ever said:


> the oil ban will most likely fail  , BUT the issue is will Russia renew/renegotiate  contracts  , it can take it's own  sweet time  to sign up new customers  , OR accelerate industrialization inside Russia  , they already make a lot of stuff  , they could easily choose to make more given the influx of Ukrainian refugees  ( some of whom might decide to stay )
> 
> they have also recently acquired a BIG steel plant  , it will take a hell of a tidy up   but probably beats building a new one from scratch



I doubt they would rush to make new contracts... Any new contracts would be demanding a discount - it's a position of weakness for Russian negotiators as they'd be recognising Russia's limited selling options. Besides, it'd interrupt deliveries and income during a fragile period for their economy. 

Best case scenario for Russia = no ban, no tarrifs, continued oil trade 
Most likely case = continued trade with EU with tarrifs imposed


----------



## sptrawler (18 May 2022)

3 hound said:


> Isn't that just basic economics?



If wages are leading your inflation, your productivity is heading the wrong way fast. 🤣


----------



## Mohammed Hazabig'un (18 May 2022)

Investing.com -- Inflation in the U.K. leaped to 9% in April, its highest level since 1982, as a thumping rise in regulated household energy bills took effect.

The consumer price index rose 2.5% on the month, the biggest monthly increase since 1991, as the cap on household electricity and gas prices was adjusted to reflect the sharp rise in wholesale prices caused by Russia's invasion of Ukraine. That aggravated an already sharp imbalance between supply and demand.


----------



## Mohammed Hazabig'un (18 May 2022)

And the US Futures reacted immediately.


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## waterbottle (18 May 2022)

Mohammed Hazabig'un said:


> Investing.com -- Inflation in the U.K. leaped to 9% in April, its highest level since 1982, as a thumping rise in regulated household energy bills took effect.
> 
> The consumer price index rose 2.5% on the month, the biggest monthly increase since 1991, as the cap on household electricity and gas prices was adjusted to reflect the sharp rise in wholesale prices caused by Russia's invasion of Ukraine. That aggravated an already sharp imbalance between supply and demand.




9% actual v. 9.1% expected

Bullish.


----------



## over9k (18 May 2022)

And here's where you're going to see the next inflation bounces: 




Reality is that margins can only be squeezed so much before the costs *must* be passed on to the consumer. Obviously walmart et al have eaten the cost increases for now but reality is that even if they keep running at a loss rather than pass the costs on, that can only go on for so long too. We will one way or another reach a point where the consumer HAS to pay more. 

Either they'll all pass the costs on immediately or it'll be a competition to see who can operate at a loss for the longest before someone goes bust and whoever remains can regain some price making (aka actually making some margin) power. 

Combine that with interest rates increasing, pent up demand for services/experiences (holidays etc) rather than stuff after everyone already bought endless physical *things* through the pandemic and retail (and I include etail in this too) isn't looking good at all.


----------



## over9k (19 May 2022)

Aka "We need to make sure people want our **** so bad they'll pay anything for it". 

Meanwhile: 




Looks like we might be at the next rollover point. Just kicking myself for not buying some more SQQQ yesterday. Trigger finger now itchy. 

If we don't see a bounce tomorrow then friday is likely to be a slaughter.


----------



## over9k (19 May 2022)

Alright here's one for the econ students or casual guys that are just trying to do a bit of investing to hopefully top their savings up a bit, what's the connection between inflation and the S&P sectors looking like this: 




Hint: Think back to my previous comments about how retail has been slaughtered and work your way out from there. If you know why retail was pasted today then you'll be able to explain why the sectors are (for the most part) in the order that they are.


----------



## divs4ever (19 May 2022)

Stockybailz said:


> Heard on the grape vine wages could Increase by 2.5% due to interest rate rise.* Real wage growth—or the difference between wage growth and inflation—would be independent of inflation*. Productivity?
> Sited this vidio suggesting wages to lag behind inflation;
> 
> 
> ...






waterbottle said:


> I doubt they would rush to make new contracts... Any new contracts would be demanding a discount - it's a position of weakness for Russian negotiators as they'd be recognising Russia's limited selling options. Besides, it'd interrupt deliveries and income during a fragile period for their economy.
> 
> Best case scenario for Russia = no ban, no tarrifs, continued oil trade
> Most likely case = continued trade with EU with tarrifs imposed



 the Finland contracts for example expire May 23rd ( i assume that is with state-run entities ) whereas several German Corporations have signed new 'modified ' contracts 

 i doubt Russia is in a position of weakness they HAVE the commodities ( already in the ground ) AND a fair-sized military to protect them  and the West couldn't even successfully loot Afghanistan ( of resources )


----------



## divs4ever (19 May 2022)

over9k said:


> Alright here's one for the econ students or casual guys that are just trying to do a bit of investing to hopefully top their savings up a bit, what's the connection between inflation and the S&P sectors looking like this:
> 
> View attachment 141847
> 
> ...



 from my limited experience in retail/wholesale  , the retailer( and wholesaler ) ( unless you are WOW or COL ) are the meat in the sandwich   the producer/manufacturer  dictates the price ( take it or leave it )  , the customer buys ( if they are willing AND can afford it ) 
the small retailer  tends to have profit margins squeezed ( rents , power costs  , wages , etc etc ) and normally their best relief is to find a better/cheaper product to sell 

 BUT the smaller retailer is often resilient , resourceful and flexible ( management CAN take a pay cut , instead of closing the business  , they can scale back on stock purchases and be flexible on lines carried )

 so you don't have to avoid consumer discretionary  but be very sure you are being paid for the extra risk you are taking ( because there could be a lot of rainy days ahead )


----------



## Mohammed Hazabig'un (19 May 2022)

That'll be it you'd assume? First the Supply shock, now Demand drying up. People skipping Meals due to Inflation don't spend.


----------



## over9k (19 May 2022)

Mohammed Hazabig'un said:


> That'll be it you'd assume? First the Supply shock, now Demand drying up. People skipping Meals due to Inflation don't spend.



Yep you're on the right track mohammed, now think about what goes from the spending list first and work your way down accordingly


----------



## divs4ever (19 May 2022)

Mohammed Hazabig'un said:


> That'll be it you'd assume? First the Supply shock, now Demand drying up. People skipping Meals due to Inflation don't spend.



 as a person who had multiple casual jobs ( at the same time )  meals are often  skimped on as well ( say shrink wrapped cheese or peanut butter sandwiches ) as you travel between jobs  ( which  means less bucks spent  on 'meals '  even when eating regularly )


----------



## over9k (19 May 2022)

Here's another one: 




How is it that bond yields have actually dropped on a day where everyone are sh!tting themselves about inflation? 

The hint for this one is that there's two other asset classes that have actually done relatively (relatively) well today for the same reason.


----------



## Mohammed Hazabig'un (19 May 2022)

over9k said:


> Here's another one:
> 
> View attachment 141848
> 
> ...



Thanks. I've been watching that and wondering. Under normal circumstances you think the curve would've inverted?


----------



## over9k (19 May 2022)

Mohammed Hazabig'un said:


> Thanks. I've been watching that and wondering. Under normal circumstances you think the curve would've inverted?



Depends on how "transitory" you think the inflation is. We saw an inversion for a while until everyone realised that it isn't going to be all that transitory, and this was the point at which the long end just soared.


----------



## divs4ever (19 May 2022)

from what i understand   , the curve doesn't stay inverted  , it is inverted for a short time  , but the consequences are what  do the damage  , rates ( different from yields ) spike trying to uninvert the curve , causing a rush to escape  excessive debt  ( and debt instruments )


----------



## over9k (19 May 2022)

divs4ever said:


> from what i understand   , the curve doesn't stay inverted  , it is inverted for a short time  , but the consequences are what  do the damage  , rates ( different from yields ) spike trying to uninvert the curve , causing a rush to escape  excessive debt  ( and debt instruments )



Correct, this is where you get into a thing called bond convexity. Long story short, everyone have to just head for the exits.


----------



## divs4ever (19 May 2022)

i have seen so many definitions change in the last 3 years  , i wasn't sure i was up-to-date 

 thanks


----------



## over9k (19 May 2022)

over9k said:


> (and I include etail in this too)





Kogan was a $13 stock and is now trading in the $3 range over here too.


----------



## qldfrog (19 May 2022)

I find that interview interesting, at least the view till 2025
probably because i am already a converted.


----------



## waterbottle (19 May 2022)

over9k said:


> View attachment 141850
> 
> Kogan was a $13 stock and is now trading in the $3 range over here too.




Online businesses were always going to suffer once mandatory lockdowns became a thing of the past...


----------



## over9k (19 May 2022)

waterbottle said:


> Online businesses were always going to suffer once mandatory lockdowns became a thing of the past...



Of course. But bricks & mortar retail's been in structural decline for quite some time. Etail has been pasting retail for years, and yet we see etail getting slammed as well. 

Point is, if etail's taking a hit then retail's going to get an even bigger one.


----------



## divs4ever (20 May 2022)

waterbottle said:


> Online businesses were always going to suffer once mandatory lockdowns became a thing of the past...



 HAVE THEY  ?? 

 i love your optimism 

 politicians have had a sniff of real power


----------



## divs4ever (20 May 2022)

over9k said:


> Of course. But bricks & mortar retail's been in structural decline for quite some time. Etail has been pasting retail for years, and yet we see etail getting slammed as well.
> 
> Point is, if etail's taking a hit then retail's going to get an even bigger one.



actually i was  thinking retail property REITs  were going to be the first squeezed hard  , and maybe the office REITs not far behind them  , and then the ( B&M ) retailers that survived the last two years 

 well etail and retail  both rely on money/credit in the customers wallet  , either credit expands or buying slows  because NORMALLY wages lag inflation


----------



## waterbottle (20 May 2022)

Well, retailers claiming low supply is probably just part of a conspiracy theory. Numbers say otherwise...





__





						United States Retail Inventories Ex Autos - August 2022 Data - 1992-2021 Historical
					

Retail inventories excluding autos in the United States increased by 0.4% from a month earlier in July of 2022, following an upwardly revised 1.6% gain in the previous month, in line with preliminary estimates. Retail Inventories Ex Autos in the United States averaged 0.31 percent from 1992...




					tradingeconomics.com
				








Hmmmm the plot thickens








						Target posts a stunning drop in profit. Stock plunges
					

Target's earnings didn't hit the mark. Far from it.




					www.google.com
				






> As prices soar, consumers aren't splurging on bigger-ticket items, such as televisions and exercise equipment. The company noted that there were "lower-than-expected sales in discretionary categories," and Target was forced to write down the value of excess inventory that's stuck in warehouses


----------



## divs4ever (20 May 2022)

there is enough data from assorted sources  showing bottlenecks in supply-chains ( in general )  now has THAT company found a work-around ,  like reports of folks travelling to the ( computer ) chip factory  filling up a couple of suitcases and flying back 

 obviously  that won't work for mine trucks


----------



## qldfrog (20 May 2022)

I have a current affairs style theory: 
all the shipping containers have been removed from the shipping trade by western hipsters using them to build Airbnb tiny houses to rent to Ukrainian refugees.
Blame Putin!


----------



## Mohammed Hazabig'un (20 May 2022)

Just read it's also the length of time that the Yield Curve is inverted for that also counts.


----------



## waterbottle (21 May 2022)

China's stimulus tops $7 trillion as Covid-19-zero batters economy
					

Even more could be spent if the economy fails to pick up from its current funk.  Read more at straitstimes.com.




					www.straitstimes.com
				




Move over St. Jerome, St. Gang is here... 

Interesting to note that China had been tightening earlier than Western banks. Regardless, devaluing with Yuan would help to keep inflation at bay in Western countries. I suppose this stimulus would also address supply issues...


----------



## over9k (21 May 2022)

_"So, in these past four very rough months, we have started to see the mean-reversion process take hold when it comes to the multiple now contracting. As it should with the Fed tightening policy and threatening to do much more. In fact, if the Fed does all it is pledging to do, with higher rates and a shrinking balance sheet, the de facto tightening will come to around 400 basis points. This compares to 180 basis points in 2018 and 315 basis points for the entire 2015-2018 cycle—85 basis points more this time and all lumped into one year! This compares to 175 basis points of rate hikes in 1999-2000 (ahead of that recession), 300 basis points in 1994, and 313 basis points in 1988-89 (ahead of that recession). You have to go back to the early 1980s to see the last time the Fed got so aggressive in such a short timeframe. 

How apropos. At the semi-annual congressional testimony in early March, in response to a comment from Sen. Richard Shelby (R, Ala.), Jay Powell responded with his view that Paul Volcker was the greatest economic public servant of all time. Well, Volcker is revered today for slaying the inflation dragon, but in the early 1980s he was reviled for creating the conditions for back-to-back recessions and a huge bear market. People today ask where the “Powell put” is. Rest assured, the “Volcker put” was an 8x multiple in August 1982. Trust me—you don’t want to do the math on that, no matter what your earnings forecast is today. 

*Earnings is the next shoe to drop.* When it does, no one will be debating about whether or not we are in a bear market. There has never been a GDP recession without there being an earnings recession, full stop. Everyone dismisses the -1.4% annualized real GDP contraction in the first quarter as an aberration, but I am not seeing any sort of recovery in the current quarter. In fact, the monthly data has so much negative forward momentum that the handoff to the second quarter is -1%. Monthly GDP in real terms contracted 0.4% in March and was flat or down in each of the past five months. During this time span, from October to March, the “resilient” U.S. economy has declined outright at a 2.4% annual rate. And in the past, this has only happened in National Bureau of Economic Research-defined recessions. The April nonfarm payroll report‎ appeared strong, but beneath the surface, full-time jobs plunged the most since April 2020 and small-business employment, always a reliable indicator of turning points in the cycle, has declined more than 100,000 in the past three months. 

Besides, “inflation” has put real disposable personal income, close to 80% of the economy, into a recession of its own, contracting in six of the past seven months, and at a -4.5% annual rate. ‎ As sure as night follows day, consumer spending will follow suit. The Fed will do its best to reverse the situation, but the medicine won’t be tasty, as the inflation shock is replaced by an interest rate shock. The mortgage and housing markets are already responding in kind. 

The stock market has done a lot of work to price in a recession, but is so far discounting one-in-three odds. More to do still. The inflation shock is largely exogenous. What few talk about is how fiscal-policy contraction alone is going to help take care of the demand side by the end of the year. Is it well-understood that if items like food and energy inflation don’t come down, then the Fed, in its quest to return to 2% inflation, would have to drive a big hole in the other 80% of the pricing pie? The Fed would have to create the demand conditions that would bring the core inflation rate to -1.8%—which has never happened before! To get to 2% inflation, with the supply curve so inelastic, would require a recession that would take real GDP down by more than 3% and the unemployment rate back toward 7%. This is the sort of demand destruction that would be needed for the Fed to win the battle against this* supply side *inflation, caused principally by the never-ending Chinese lockdowns *and the Russian-waged war in Ukraine. *

We ran models to see how financial conditions have to tighten if the Fed is, indeed, serious about  its 2% inflation target. You won’t like the answer if you are still trading risk assets from the long side: 700 basis point spreads on high yield bonds (another 250 basis points to go) and call it 3,100 on the S&P 500 (another 20% downside). This makes perfect sense since the S&P 500, historically, has gone down 30% in recession bear markets. The first 10% before the recession as the downturn gets discounted, and then the next 20% through the first three-quarters of the recession. Keep in mind, however, that there is wide dispersion around that “average.” We have to acknowledge that we’re entering a prolonged period of heightened uncertainty between the ongoing pandemic and the war abroad, together with this very hawkish Fed. The earnings recession could bump against a further compression in the market multiple. So, my hope is that the 3,100 “trough” doesn’t end up proving to be overly optimistic. Yes, you read that right. 

Finally, we have to play the probabilities. The Fed has embarked on 14 tightening cycles since 1950, and 11 landed the economy in a recession and the stock market in a bear phase. That’s a nearly 80% probability right there. 

We can certainly hope for a “soft landing” this time around, but in my 35 years in this business, hope is rarely an effective investment strategy. The backdrop is one of a peak in the liquidity and economic cycle, and what follows is the natural expunging of the excesses (meme stocks, cryptocurrencies, speculative Nasdaq 100, even residential real estate, which is in a huge price bubble of its own) and then… the rebirth. There is no sense in being in denial. This is all part of the cycle, and the turning point was turned in several months ago".

https://www.barrons.com/articles/th...m-and-defensive-51652454842?mod=hp_LEAD_1_B_5 _

We've seen massive earnings misses time and time and time again over the past few days and look at the result. You want to know how far along we are in this cycle, well, that's it.

Also take note of the fact that this is a SUPPLY side problem and the only thing the fed can do is reduce the demand side. Hence, as I keep trying to point out, it's not inflation we're in, it's stagflation.

Upping interest rates will only make capital more difficult to come by and therefore increases in supply (aka drilling) even less likely.

Hence why I keep mentioning the very simple damned if they do, damned if they don't reality of this. Yellen's even just gone on record, literally just today, as saying that they will not even begin to reconsider the 2% inflation target.

My two biggest positions are in FNGD and NRGU.


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## divs4ever (21 May 2022)

hope is a fantastic management strategy  , as soon as your hopes are realized you take profit real frickin' quick  ( no going out to party overnight and stuff )

 ( LOL )


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## 3 hound (21 May 2022)

divs4ever said:


> ( no going out to party overnight and stuff )




Go away with that rubbish.


----------



## divs4ever (21 May 2022)

i have made the mistake of taking too long to lock in that profit  ,  a few times  ( sometimes you have only minutes to act )

 ( after the profit-take there is plenty of time for autopsies , reviews and reinvestment strategies )


----------



## over9k (24 May 2022)

"We think the fed is going to realise that the only thing they're reducing is growth".

BINGO. They cannot bring this inflation down without plunging us into recession. This IS stagflation - it's either high inflation or recession, those are the options, and Yellen's gone on record saying they won't even consider raising their 2% inflation target. Ergo, it's recession. 




Think about the last time this shift occurred so rapidly


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## 3 hound (24 May 2022)

over9k said:


> View attachment 142115
> 
> 
> "We think the fed is going to realise that the only thing they're reducing is growth".
> ...



Least financially literate person here but even blind Freddy could have seen printing trillions of dollars for COVID relief and then billions more into Ukraine + sanctions was never going to end well for the average Joe.


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## over9k (24 May 2022)

3 hound said:


> Least financially literate person here but even blind Freddy could have seen printing trillions of dollars for COVID relief and then billions more into Ukraine + sanctions was never going to end well for the average Joe.



To be fair, about half of it is thanks to the sanctions. Without them, we'd be sitting at a much more moderate official stat of about 5ish% rather than the 8-9% we see now.


----------



## waterbottle (24 May 2022)

over9k said:


> To be fair, about half of it is thanks to the sanctions. Without them, we'd be sitting at a much more moderate official stat of about 5ish% rather than the 8-9% we see now.




Agreed, transitory inflation is real


----------



## 3 hound (24 May 2022)

over9k said:


> To be fair, about half of it is thanks to the sanctions. Without them, we'd be sitting at a much more moderate official stat of about 5ish% rather than the 8-9% we see now.



The sanctions seem to be hurting everyone except the intended target.


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## 3 hound (24 May 2022)

waterbottle said:


> Agreed, transitory inflation is real




Transitory inflation transitions from one value to another value that is higher than the previous value it transited from as it transits in translation therefore it is transitory like the passage of time and the transit of migrants glowing across the southern border. If you disagree you are transphobic.


I could be Karmala Harris's speech writer.


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## divs4ever (24 May 2022)

3 hound said:


> Transitory inflation transitions from one value to another value that is higher than the previous value it transited from as it transits in translation therefore it is transitory like the passage of time and the transit of migrants glowing across the southern border. If you disagree you are transphobic.
> 
> 
> I could be Karmala Harris's speech writer.



nope  not enough gaps for giggles  , save your talent for Albo at least he is lucid ( if a little boring )

 but yes  transitory  was used in the original speech to be deceptive ( without lying blatantly )


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## 3 hound (24 May 2022)

divs4ever said:


> nope  not enough gaps for giggles  , save your talent for Albo at least he is lucid ( if a little boring )
> 
> but yes  transitory  was used in the original speech to be deceptive ( without lying blatantly )



Albo gave a nice speech about growing up in government housing to a single mother (can't remember if on disability pension or not) to much applause because he became a career politician and now prime minister.

Nothing in that story is anything I find as inspirational other than Australia is a very, very generous country.

I wonder if he will keep stoking the home owner incentive programs that effectively just keep making house prices inflate further and keep home ownership increasingly unaffordable or do something even worse just give people "free" homes.


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## divs4ever (24 May 2022)

at least he studied economics , i am just so over ALP ( former ) lawyers 

 from memory  he had a 'Commo '  label from inside the ALP ( too left-wing to be electable )

 well we have elected him now ( well i didn't  , but somebody did ) , i guess we will have to wait and see ( if he is just another politician  or an ultra-rare statesman )  for example  ,
will he keep the Greens reasonably sensible  ( unlike the German Chancellor ) ,
 so far Australia is earning export dollars   , so he has some room to move 

 a big chunk of the world is heading for a hard landing  , but will our landing be softer than some ( similar to the GFC , perhaps )


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## Mohammed Hazabig'un (25 May 2022)

Fed may pause I.R. rises if Inflation "moderates" - Bostic.


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## over9k (25 May 2022)

Mohammed Hazabig'un said:


> Fed may pause I.R. rises if Inflation "moderates" - Bostic.






Bonds have seen a nice little dip over the past couple of weeks but it hasn't been because inflation has been moderating - there's just been nowhere else for the cash to go.


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## waterbottle (25 May 2022)

over9k said:


> View attachment 142146
> 
> 
> Bonds have seen a nice little dip over the past couple of weeks but it hasn't been because inflation has been moderating - there's just been nowhere else for the cash to go.



Risk is back on lads. 

Get rich or go broke trying.


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## Mohammed Hazabig'un (25 May 2022)

Looking at the U.S. numbers there's the obvious negative effects of Inflation/Interest Rates on the Building and Housing sector, the Consumer and Business confidence levels etc. But defying this is the strong manufacturing, capacity utilisation, lessening inventories, strong employment and Wages and thus spending which could be attributed to Inflation's tendency to encourage Consumers to buy now.

This week's PMI numbers were down. Any chance this is the turning point and all those good numbers associated with Production/Wages/Spending are going to start to turn South starting with the Durable Goods Orders numbers out tonight due to Inflation's tendency to promote spending has run its race?


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## over9k (25 May 2022)

Aaaaaand another one bites the dust:


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## over9k (25 May 2022)

Mohammed Hazabig'un said:


> Looking at the U.S. numbers there's the obvious negative effects of Inflation/Interest Rates on the Building and Housing sector, the Consumer and Business confidence levels etc. But defying this is the strong manufacturing, capacity utilisation, lessening inventories, strong employment and Wages and thus spending which could be attributed to Inflation's tendency to encourage Consumers to buy now.
> 
> *This week's PMI numbers were down. Any chance this is the turning point and all those good numbers associated with Production/Wages/Spending are going to start to turn South starting with the Durable Goods Orders numbers out tonight due to Inflation's tendency to promote spending has run its race?*






Most of the reports I've seen have shown significant upticks in COGS, not downticks in consumer spending. Obviously there's some of the one time type purchases (furniture, whitegoods etc) that we see plummet (peloton being a good example) but the more consumable stuff like electronics and services like travel and so forth should continue to enjoy robust demand. Problem is, businesses can't raise wages if they aren't making money (on account of their margins being eroded by inflation) can they?

So, as I mentioned in a post a couple pages back,* something's gotta give.*

The question for some markets becomes not whether the demand exists (for some of it we've had two years' of it pent up) but whether these things simply become prohibitively expensive. A very simple case of the supply curve moving upwards as the price floor becomes ever higher. Hence the memes of "Yay I can go places again" and then the person looking at fuel prices and going "oh, no I can't".

Remember, it's the most superior goods which are on the chopping block first and then working down accordingly.


And this is before we even start on the supply issues we're undoubtedly going to see come winter.


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## over9k (25 May 2022)

waterbottle said:


> Risk is back on lads.
> 
> Get rich or go broke trying.



Nah you're off the mark here waterbottle - there was actually a bounce in crypto, precious metals (gold) AND a huge spike in the fed's reverse repo facility at the same time as well as the bond moves which tells us that bonds ran because stocks were plummeting and there simply wasn't anywhere else for the cash to go. 

Money goes to any port in a storm and stocks have so far been the storm.


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## Mohammed Hazabig'un (26 May 2022)

The COGS is just the burden of Inflation that the business is absorbing as shown by Walmart, Target etc.

The Manufacturing numbers are now turning South with both the PMI and Durable Goods Orders turning South.

Which follows manufacturing next, the Employment and Wages numbers, then the Retail numbers  further next? BOOM Recession eventually if no turn around.


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## mullokintyre (26 May 2022)

New Zealand is where all the action is.
From Murdoch press


> If Australia wants to know what runaway inflation looks like, forget the US. It just has to look across the ditch.
> The New Zealand central bank sees inflation peaking at 7 per cent in the June quarter and on Wednesday it put up the official cash rate another 50 basis points to 2 per cent with the expectation of much more to come. Australia’s cash rate currently sits at 0.35 per cent.
> 
> “I would say what the New Zealand government has is the early stages of a wages price spiral,” says HSBC chief economist Paul Bloxham
> ...



Mick


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## qldfrog (26 May 2022)

mullokintyre said:


> New Zealand is where all the action is.
> From Murdoch press
> 
> Mick



The paradox fleeing socialism to fall in it again..


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## Smurf1976 (26 May 2022)

Electricity prices up with today's long awaited announcement:









						AER sets energy price cap to protect consumers
					

[no-lexicon]The Australian Energy Regulator (AER) has released its final determination for the 2022–23 Default Market Offer (DMO). The DMO is the safety-net price cap that ensures consumers are protected from unjustifiably high prices. From 1 July 2022, the DMO prices in New South Wales...




					www.aer.gov.au
				




Residential up 7.2% to 14.1%

Small business up 5.7% to 19.7%

With the range reflecting location noting that this announcement applies to consumers in SA, NSW and south-east Qld only.

Further to that, note that this is the Default Market Offer, also known as a reference price, and that in practice most retailers have in the past offered substantial discounts in order to attract customers. It varies but as an order of magnitude such discounts are circa ~20% commonly. 

Trouble is, due to rather extreme cost pressures on the wholesale side, retailers are reducing those discounts substantially. So overall it's a higher default price + a reduced discount from that default = the % increase to consumers is considerably greater than the figures above.

Also as I've posted in another thread we've also seen two energy retailers financially collapse this week, caught between soaring wholesale prices and fixed price retail contracts they've entered. Meanwhile there's at least two others very actively trying to shrink their customer base, having gone as far as urging customers to switch to a competitor by the end of this month at the latest.

https://www.aussiestockforums.com/threads/the-future-of-energy-generation-and-storage.29842/page-292

 So overall some pretty serious price pressure there.


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## divs4ever (26 May 2022)

mullokintyre said:


> New Zealand is where all the action is.
> From Murdoch press
> 
> Mick



 the place is too small to hide it from the masses ( they can't sell the story 'it is only bad in places ' )

 look closely and see how closely it parallels Australia ( they have milk and wool , we have holes in the ground )


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## divs4ever (26 May 2022)

one notable difference ( between  NZ and Australia ) is the NZ government owns more than half ( of each company ) of most of the NZ power companies   , the main exception is CEN

 whereas to opposite  is in Australia  ( they have no or tiny  share of the major power companies )


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## 3 hound (27 May 2022)

Are we in stagflation yet?


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## Mohammed Hazabig'un (27 May 2022)

3 hound said:


> Are we in stagflation yet?



Nope. Employment & Wages still strong and Demand hanging in there. Love a little Battler!


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## waterbottle (27 May 2022)

Risk is on. GME up 40% in 2 days. Crypto remains down with a $2 trillion exodus since late 2021.10 year bonds down. Oil stagnant.
Market realising there is no where else to put their cash. The only way cash ould outperform anything else is if interest rate were >10% which is just not going to happen.

Sunshine and lollipops. The sky ain't falling.


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## 3 hound (27 May 2022)

waterbottle said:


> Risk is on. GME up 40% in 2 days. Crypto remains down with a $2 trillion exodus since late 2021.10 year bonds down. Oil stagnant.
> Market realising there is no where else to put their cash. The only way cash ould outperform anything else is if interest rate were >10% which is just not going to happen.
> 
> Sunshine and lollipops. The sky ain't falling.




It's the J curve, this will get worse before they get better - every economics graduate ever.


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## over9k (27 May 2022)

Hmm, I wonder why the iron ore price is dropping?


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## over9k (28 May 2022)

Lots of speculation that we've hit a bottom now because wage growth has plummeted. 

Yes, really. 


But, it's the first up week in 8 so difficult to call it a trend break. I reckon next week will be telling.


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## moXJO (28 May 2022)

So. I came out of retirement to help a mate repair a job (building). Seems everyone I know found out and I was flooded with work I don't want. 
I've done a few inspections and newer buildings have some huge issues due to bad workmanship. There's also no one to come back and fix them. Also, the guys that do turn up, don't know how to fix them. And I'm not interested in fixing them, but these are people (or their kids) that I know.

A lot of experience and know how has retired. Younger guys chase the highest paying, easier, fast jobs. They lack a lot of what were considered the basics.

The other thing is you can't get material. Or it's constantly increasing every few months. Builders can't "fixed price" stuff because the costs keep floating up. I'm hearing terms like the "profitless boom".  Some product lines I simply can't get.

Unless shipping gets back then costs will keep increasing and delays will blow out. Talk of bringing in trades is pointless. It's the material that caused the problem. 
Australia is deemed unprofitable compared to Europe so we don't get the attention.

Everyone in shipping jacked up their costs. Even the Aussie ports.


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## Mohammed Hazabig'un (28 May 2022)

moXJO said:


> So. I came out of retirement to help a mate repair a job (building). Seems everyone I know found out and I was flooded with work I don't want.
> I've done a few inspections and newer buildings have some huge issues due to bad workmanship. There's also no one to come back and fix them. Also, the guys that do turn up, don't know how to fix them. And I'm not interested in fixing them, but these are people (or their kids) that I know.
> 
> A lot of experience and know how has retired. Younger guys chase the highest paying, easier, fast jobs. They lack a lot of what were considered the basics.
> ...



Is it true that Houses only have to last 15 years now as opposed to 50 years, by Law?


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## qldfrog (28 May 2022)

moXJO said:


> So. I came out of retirement to help a mate repair a job (building). Seems everyone I know found out and I was flooded with work I don't want.
> I've done a few inspections and newer buildings have some huge issues due to bad workmanship. There's also no one to come back and fix them. Also, the guys that do turn up, don't know how to fix them. And I'm not interested in fixing them, but these are people (or their kids) that I know.
> 
> A lot of experience and know how has retired. Younger guys chase the highest paying, easier, fast jobs. They lack a lot of what were considered the basics.
> ...



And wait for the man made petrol/transport crisis..
I am sure it is temporary:
If you produce oil, you can not get f8nance and if you dare making a profit, you are a black sheep and naughty boy...so get slapped with a windfall profit tax 
All according to plan


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## frugal.rock (28 May 2022)

moXJO said:


> So. I came out of retirement to help a mate



Same.
I've noticed plenty of half built houses.
Was actually enjoying the peace and serenity at a site, whilst observing various houses in various states of unfinished"disrepair".

The silence was deafening...

I'm worried about the potential Ponzi nature of the housing market..

No problems getting a slab and intial plumbing done, but it's slow going from there.


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## moXJO (28 May 2022)

Mohammed Hazabig'un said:


> Is it true that Houses only have to last 15 years now as opposed to 50 years, by Law?



Depending on the maintenance you put in. 
Eg: keep exterior timber/cladding painted every 7 years.
Keep roof and gutters clear of leaves. And if coastal change the roof screws every 10-15 years as they sacrifice first and will then rust a hole in your roof.

Metal roofs have a 30 year warranty and that's the most important part of the house really.  If the roof is a complex one you can run into problems. Also expensive to replace something complex. Basic flat, gable shapes are God.

Plumbing  done out of that pex pipe (plastic) which apparently lasts 40-50 years. 
Not a fan of it, as rats will chew it if you bait them. But haven't seen to many problems with it.

Most sealants 25 years.

Interior will last as long as maintained.

Kitchens probably not. The cheap ones don't last. Cupboard hardware such as hinges can wear/rust fast. Sliding door fittings, handles etc. They can be of course replaced. But many China ones are lucky to last 5 years.

So it's the cheap imported stuff from China that tends not to last.


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## moXJO (28 May 2022)

frugal.rock said:


> Same.
> I've noticed plenty of half built houses.
> Was actually enjoying the peace and serenity at a site, whilst observing various houses in various states of unfinished"disrepair".
> 
> ...



Shipping costs and wait times are ridiculous.


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## 3 hound (28 May 2022)

moXJO said:


> Basic flat, gable shapes are God.




Blasphemy, this idolatry will not go unpunished.


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## martaart077 (28 May 2022)

A couple of points I have difficulty getting my head around. 

Seems like everything I buy (school fees, petrol, energy, food, council rates..... etc)  have been rising faster than the official CPI for years, not just recently. So in my mind the official CPI doesn't accurately reflect the real inflation rate anyway. 

Talk of inflation eroding debt. 
I was taught that the nominal interest rate charged on debt equals the real interest rate (cash rate) plus inflation. So while the principle is eroded by inflation, the compounding interest paid on that principle should at least rise by inflation rate plus some. 
Seems that interest charged by banks for debts such as mortgage are currently well below cash rate plus inflation.  Must be a lot of interest rate catchup in the future. 
Maybe I'm wrong.


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## over9k (28 May 2022)

martaart077 said:


> A couple of points I have difficulty getting my head around.
> 
> Seems like everything I buy (school fees, petrol, energy, food, council rates..... etc)  have been rising faster than the official CPI for years, not just recently. So in my mind the official CPI doesn't accurately reflect the real inflation rate anyway.
> 
> ...



No, you're right, everything you've mentioned SHOULD happen. 

We haven't been living in "normal" times for quite a while. The word "unsustainable" wasn't first rolled out five minutes ago.


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## 3 hound (28 May 2022)

over9k said:


> No, you're right, everything you've mentioned SHOULD happen.
> 
> We haven't been living in "normal" times for quite a while. The word "unsustainable" wasn't first rolled out five minutes ago.




Before joining this site I was puzzled by the phrase "kick the can further down the road". 

Now I see it as the perfect encapsulation of the interface between politics and economics.


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## over9k (28 May 2022)

3 hound said:


> Before joining this site I was puzzled by the phrase "kick the can further down the road".
> 
> Now I see it as the perfect encapsulation of the interface between politics and economics.



Bingo.


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## divs4ever (28 May 2022)

Mohammed Hazabig'un said:


> Is it true that Houses only have to last 15 years now as opposed to 50 years, by Law?



 there was gossip around that retirement villas  are only built with a life expectancy of 20 years ( the building , not the resident )

 have heard nothing about  the law on that  , but i have seen some interesting  examples of 'acceptable ' new constructions just in the local district


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## divs4ever (28 May 2022)

moXJO said:


> So. I came out of retirement to help a mate repair a job (building). Seems everyone I know found out and I was flooded with work I don't want.
> I've done a few inspections and newer buildings have some huge issues due to bad workmanship. There's also no one to come back and fix them. Also, the guys that do turn up, don't know how to fix them. And I'm not interested in fixing them, but these are people (or their kids) that I know.
> 
> A lot of experience and know how has retired. Younger guys chase the highest paying, easier, fast jobs. They lack a lot of what were considered the basics.
> ...



 that is what i have been seeing over the last  6 years  , although i would add the issues seem to be compounding , and in some cases a distinct drop in the quality of materials used ( big and small items )

 makes you wonder  about the second part of the narrative ' build back better '


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## 3 hound (28 May 2022)

divs4ever said:


> build back better '




I will vote for the guy that doesn't F it up the first time.


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## divs4ever (28 May 2022)

3 hound said:


> I will vote for the guy that doesn't F it up the first time.



 well i remember  an old joke ( from the Hippie era )

get it right  the first time  , and the job is done , man 

get it wrong , 13 TIMES , hey dude you done got a career


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## moXJO (28 May 2022)

divs4ever said:


> that is what i have been seeing over the last  6 years  , although i would add the issues seem to be compounding , and in some cases a distinct drop in the quality of materials used ( big and small items )
> 
> makes you wonder  about the second part of the narrative ' build back better '



Supply lines are really bad at the moment. I'm custom making a lot of stuff like it's the dark ages.


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## divs4ever (28 May 2022)

moXJO said:


> Supply lines are really bad at the moment. I'm custom making a lot of stuff like it's the dark ages.



 some would call that creativity  , and self-sufficiency  , maybe you are seeing the light at the end of the tunnel ( NO train coming )


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## moXJO (28 May 2022)

One problem with inflation, is that the high prices tend to stick around on consumer crap. 
Will wages be sustainable when it all goes to sht and businesses start going down.

Be interesting if the supply lines are not sorted quickly.


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## moXJO (28 May 2022)

divs4ever said:


> some would call that creativity  , and self-sufficiency  , maybe you are seeing the light at the end of the tunnel ( NO train coming )



A lot of these younger guys just wouldn't know how. Maybe manufacturing is coming back as I wouldn't mind doing the figures on some items that are no longer viable to ship. 

Problem is if it all goes back to normal. You don't want to invest in a dead end.


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## divs4ever (28 May 2022)

well in the past  , i have observed  that when supply  stays restricted  , one of two things happen  physical items  are created by alternate sources ( which may be more expensive and/or lower quality  ) or the items are substituted ( legally or not ) for services  the usual result is job losses ( no product to provide )

 the wages are liable to stay sustainable , but the people receiving those wages are liable to decrease ( not many workers will take a pay-cut to endure more stress and uncertainty )

 the CURRENT danger is folks are losing trust in the supply lines  , that MIGHT be a good thing  for makers of warehouses and other storage facilities  , but generally more expense for most businesses as they will have to pre-buy more inventory   try to forecast trends/buying patterns better  , on the other hand , local entrepreneurs might step in with supply line reductions ( because they are suddenly cost-competitive  and time efficient )


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## 3 hound (28 May 2022)

moXJO said:


> A lot of these younger guys just wouldn't know how. Maybe manufacturing is coming back as I wouldn't mind doing the figures on some items that are no longer viable to ship.
> 
> Problem is if it all goes back to normal. You don't want to invest in a dead end.




Don't know if this is technically inflation but I monitor cattle prices and they go up and down according to seasons and supply and demand - price of beef however only goes up and stays up and then goes up again and again.  There seems to be no correlation between meat in the shop and animals in line to become meat in the shop.

I have quizzed Coles and Woolworths local managers about this many times with actual official prices and they look at me like I am from another planet and just say they have nothing to do with prices.


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## divs4ever (28 May 2022)

moXJO said:


> A lot of these younger guys just wouldn't know how. Maybe manufacturing is coming back as I wouldn't mind doing the figures on some items that are no longer viable to ship.
> 
> Problem is if it all goes back to normal. You don't want to invest in a dead end.



can it go back to normal ,  Just In Time  is basically dead in the water  ( one of those quaint theories that might be re-visited next century )

 and that ' viable to ship ' has hit a big hurdle  how long before the transport services untangle  , how much two-year out-of date merchandise  is sitting on containers  still on the docks  , say the next  big disruption only causes a one year delay .. do you risk that 

 and of course many Western nations are consumer-driven economies  what sort of mess   has been created  ( some demand destruction for a start  , and that is liable to last for decades )

 now locally that might all work out for the best  AS LONG AS SOME GRAND POO-BAH ( computer or otherwise ) IN SOME REMOTE IVORY TOWER isn't making all the important decisions


----------



## divs4ever (28 May 2022)

3 hound said:


> Don't know if this is technically inflation but I monitor cattle prices and they go up and down according to seasons and supply and demand - price of beef however only goes up and stays up and then goes up again and again.  There seems to be no correlation between meat in the shop and animals in line to become meat in the shop.
> 
> I have quizzed Coles and Woolworths local managers about this many times with actual official prices and they look at me like I am from another planet and just say they have nothing to do with prices.



 now i can't talk with authority  on meat ,  but did know  a guy in the area  of fruit and vegetable supply chain  to the big retailers  , and a lot of growers  were under  contracts  and the retailers had invested  a fair bit in cold storage  to even out the supply 

 the glitch in that system MIGHT be rising energy costs  , i guess time will tell


----------



## 3 hound (28 May 2022)

divs4ever said:


> now i can't talk with authority  on meat ,  but did know  a guy in the area  of fruit and vegetable supply chain  to the big retailers  , and a lot of growers  were under  contracts  and the retailers had invested  a fair bit in cold storage  to even out the supply
> 
> the glitch in that system MIGHT be rising energy costs  , i guess time will tell




No I firmly believe the glitch is F'wit predators gouging both suppliers and consumers..... because they can


----------



## sptrawler (28 May 2022)

moXJO said:


> One problem with inflation, is that the high prices tend to stick around on consumer crap.
> Will wages be sustainable when it all goes to sht and businesses start going down.
> 
> Be interesting if the supply lines are not sorted quickly.



The triple whammy of high prices, higher wages and higher power prices makes me wonder if everything goes up, or as you say businesses start going down and with it jobs and standard of living.
Interesting times.
On a brighter note, the MIL told me that she got 2% interest on her term deposit, for 12 months.


----------



## moXJO (28 May 2022)

sptrawler said:


> On a brighter note, the MIL told me that she got 2% interest on her term deposit, for 12 months.



So she's only losing 5% or 20 something % depending on who you're asking.


----------



## Value Collector (28 May 2022)

3 hound said:


> Don't know if this is technically inflation but I monitor cattle prices and they go up and down according to seasons and supply and demand - price of beef however only goes up and stays up and then goes up again and again.  There seems to be no correlation between meat in the shop and animals in line to become meat in the shop.
> 
> I have quizzed Coles and Woolworths local managers about this many times with actual official prices and they look at me like I am from another planet and just say they have nothing to do with prices.




The price of an animal at the farm gate only makes up a small portion of the price you pay for the flesh presented in the plastic containers in the supermarket.

So when the cattle price drops by say 30%, you shouldn't expect the price of the meat in the plastic trays to drop by exactly 30% too, because the price of all the other inputs probably stays the same or higher.

For example, if you pay $5.00 for some meat at woolies, only maybe $1 of that is the actual cattle price, so a 30% drop in the cattle price would only lower the price by $0.30 (30% of that $1 piece of cattle), an it would only drop $0.30 if all the other costs stayed the same.

The reason for this is that all the other costs that make up the $5 sale price stay they same.

eg, the following costs would not go down with the cattle price


Trucking cattle to slaughter house (wages, fuel, maintenance, insurance etc)
slaughter house costs (wages, water, gas, electricity, equipment, property expenses, insurance)
butchering and packaging (wages, refrigeration, packaging, equipment)
Trucking to supermarket distribution centres (wages, fuel, maintenance, refrigeration, insurance)
Trucking to stores (wages, fuel, maintenance, refrigeration, insurance)
Supermarket costs (wages, lighting, refrigeration, rent, maintenance, wastage, transaction costs, insurance etc)
plus many other costs I haven't named
So all these other costs actually make up the bulk of the costs involved, its not just cost of the cattle at the farm gate, and inflation can be pushing up all these costs even if the raw material costs are declining.

Its also the reason you don't see petrol drop 50% when the oil price drops 50%, because again the cost of crude oil is only part of that total supply chain cost.


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## sptrawler (28 May 2022)

moXJO said:


> So she's only losing 5% or 20 something % depending on who you're asking.



Yes but she still finds it better than the 0.25% she has been getting, at 89 years old she isn't interested in signing up for incredible charts and becoming a day trader. 🤣


----------



## 3 hound (28 May 2022)

Value Collector said:


> The price of an animal at the farm gate only makes up a small portion of the price you pay for the flesh presented in the plastic containers in the supermarket.




But nobody pays for an animal at the farm gate. 

The farmer has many inputs that don't change with the price he gets for his cattle as well, actually all the inputs increase very significantly.

Large food retailers are clearly a monopoly in Australia, I am the last one to call  for price controls but monopolies do not follow free market principles so if ever there is an argument for price controls this would be it.


----------



## Value Collector (28 May 2022)

3 hound said:


> But nobody pays for an animal at the farm gate.




Cattle prices are actually often quoted as "farm gate prices" or sometimes "stock yard price", So when you are seeing the "cattle Price" thats called the farm gate price.

But did you actually understand what I wrote about all the other costs involved, and do you understand how reducing the cattle prices by X% won't ever mean the price of packaged meat at your local store with reduce by X%



> The farmer has many inputs that don't change with the price he gets for his cattle as well, actually all the inputs increase very significantly.




Yes, just like any other commodity producer, as a farmer your profit will depend on your production costs being lower than the market price of your commodity, that is true whether your are producing Cattle, soybeans, corn, Iron Ore, Oil, Copper or Coal or any one of a 1000 other commodity products.

If your production costs are consistently not low enough for you to generate a profit, you should change businesses.



> Large food retailers are clearly a monopoly in Australia, I am the last one to call  for price controls but monopolies do not follow free market principles so if ever there is an argument for price controls this would be it.




The food retailers work on about a 30% mark up based on the price they pay for the product delivered to their store, and that reduces down to about a 3% profit margin or less when all the other costs are deducted, if you don't believe me check out the annual reports of Coles and woolies.


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## divs4ever (28 May 2022)

3 hound said:


> No I firmly believe the glitch is F'wit predators gouging both suppliers and consumers..... because they can



 not according to some major food retailers ( whom i note , no longer  use the claim of low margins as a marketing angle )

 ( i hold WOW and COL )

 but rising energy costs will be a problem they will have reduced control  over ( even if they upgrade technology to reduce those future costs )


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## sptrawler (28 May 2022)

moXJO said:


> So she's only losing 5% or 20 something % depending on who you're asking.



I just checked the term deposit rates on line, I think she has been duped, I bet it's only 0.2% she probably miss heard. 🤣


----------



## Value Collector (28 May 2022)

3 hound said:


> No I firmly believe the glitch is F'wit predators gouging both suppliers and consumers..... because they can



Only about 3% of the price you pay at Coles and Woolies is their profit, the rest goes to suppliers and their running costs or tax, I wouldn't call a 3% profit margin gouging.

It's a pretty competitive market, if Coles and Woolies were making excessive profits, some one else would come on the scene and offer the same service for less, and steal a chunk of market share.

However, so far their competitors have to either offer less service or charge higher prices.

Eg, Costco and Aldi are examples where they charge lower prices but only do so by providing less service, while IGA, SPA and other market participants have a niche market but generally have slightly higher average prices.


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## JohnDe (28 May 2022)

Keep an eye on New Zealand's inflation and how their Reserve Bank and government react.



> *Inflation bites hard in New Zealand*
> 
> If Australia wants to know what runaway inflation looks like, forget the US. It just has to look across the ditch.
> The New Zealand central bank sees inflation peaking at 7 per cent in the June quarter and on Wednesday it put up the official cash rate another 50 basis points to 2 per cent with the expectation of much more to come. Australia’s cash rate currently sits at 0.35 per cent.
> ...


----------



## Eric% (28 May 2022)

AMP banking has some decent term deposit rates but they are up to 5 yrs - 4.15% pa


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## moXJO (28 May 2022)

sptrawler said:


> Yes but she still finds it better than the 0.25% she has been getting, at 89 years old she isn't interested in signing up for incredible charts and becoming a day trader. 🤣



Tell her I've got a crypto investment.


----------



## divs4ever (28 May 2022)

JohnDe said:


> Keep an eye on New Zealand's inflation and how their Reserve Bank and government react.



 *** Bloxham says while there are elements of the New Zealand story happening in Australia, it is not as extreme. ***

not as extreme or better concealed  ??

 NZ for all it's flaws  still has a few extra levers ( half share in AIZ , GNE , MCY , MEZ  )   and interests in some other NZ companies 

 they can actually control corporate policy  at several essential businesses 

 yes Australia has been more resistant to inflation  courtesy of commodity exports , but will our dependence on China  become a millstone soon


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## waterbottle (28 May 2022)

Here's a great documentary outlining what is involved in the 'supply chain' problem. 



To me, it seems that covid has triggered a demand splurge but also has meant a large number of jobs that were critical to the economy have been lost - either because those employees have died or have decided to retire/leave the industry as the covid risk outweighed any perceived employment benefit.


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## againsthegrain (28 May 2022)

sptrawler said:


> I just checked the term deposit rates on line, I think she has been duped, I bet it's only 0.2% she probably miss heard. 🤣



its possible I got a email from Ubank they upping their interest in saver accounts to 1.25 or 1.35% something like that


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## sptrawler (28 May 2022)

moXJO said:


> Tell her I've got a crypto investment.



She would think it was some sort of weird crossword, you got paid for completing. 🤣


----------



## againsthegrain (28 May 2022)

sptrawler said:


> She would think it was some sort of weird crossword, you got paid for completing. 🤣



she definately could get 2% there maybe even more.... negative that is


----------



## macca (28 May 2022)

sptrawler said:


> The triple whammy of high prices, higher wages and higher power prices makes me wonder if everything goes up, or as you say businesses start going down and with it jobs and standard of living.
> Interesting times.
> On a brighter note, the MIL told me that she got 2% interest on her term deposit, for 12 months.




2.75% for 12mths at Macquarie, so she might be right


----------



## 3 hound (28 May 2022)

Value Collector said:


> Only about 3% of the price you pay at Coles and Woolies is their profit, the rest goes to suppliers and their running costs or tax, I wouldn't call a 3% profit margin gouging.
> 
> It's a pretty competitive market, if Coles and Woolies were making excessive profits, some one else would come on the scene and offer the same service for less, and steal a chunk of market share.
> 
> ...




Its in living memory in Australia where energy was produced locally in every town and there were "common" paddocks  or "the commons" where locals kept their own "killer" beef, their own dairy cows and goats and grew their vegetables. I am not even that old and I lived when towns existed like this. 

Actually think this now defunct model makes even more sense in 2022 than 1922.


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## Value Collector (28 May 2022)

3 hound said:


> Its in living memory in Australia where energy was produced locally in every town and there were "common" paddocks  or "the commons" where locals kept their own "killer" beef, their own dairy cows and goats and grew their vegetables. I am not even that old and I lived when towns existed like this.
> 
> Actually think this now defunct model makes even more sense in 2022 than 1922.



I am not sure what that has to do with anything that I have said though, even in agrarian style places as you describe there is still butchers and bakers etc that want to be paid some sort of income for the value they are adding to the system, the doesn’t want to take a pay cut for his labour just because the raw material is cheaper.

My point was simply that there is a system in place that takes the animals from farm gate to your local shop, and that system operates at a cost that is not reduced by the farm gate price of cattle.


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## 3 hound (28 May 2022)

Value Collector said:


> I am not sure what that has to do with anything that I have said though, even in agrarian style places as you describe there is still butchers and bakers etc that want to be paid some sort of income for the value they are adding to the system, the doesn’t want to take a pay cut for his labour just because the raw material is cheaper.
> 
> My point was simply that there is a system in place that takes the animals from farm gate to your local shop, and that system operates at a cost that is not reduced by the farm gate price of cattle.



All good, your points made sense I just got on a tangent because I  don't believe there is as much value adding by supermarkets  going on as you think.

Is your figure of 3% for beef specifically or some kind of average?

Normally I buy wholesale steak in a carton just like Coles &  Woolies do (or I buy directly from a grower) but today i bought a single steak (top cut)  from a supermarket that was over $30 ($48/kg). I can afford that but I know a lot of hard working families  would consider that so obscenely priced it's decadent food. The best steaks we buy are not premium, the premium quality is exported but we pay premium price.


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## Garpal Gumnut (28 May 2022)

To be honest a bit of inflation might not be all harmful.

The amount of cr*p I see in people's food trolleys when I shop in "poor" suburbs is astounding. Very little fresh veg or fruit, processed food, carbonated drinks, ice cream and confectionery. 

Visiting people with young families one trips over a mountain of expensive toys before being assailed by Tom Cruise on a wide screen television which must have cost a bit, not to mention the Netflix nor Amazon subscription. 

Australians need to curb their spending habits if inflation ramps up. 

It is not brain science !

And much of the stuff they spend their money on is foreign made and imported or manufactured with foreign ingredients.

The latest mobile phones, tied to a provider, on instalment with white things sticking out of an ear. 

On top of this the average punter spends more than even I do on gambling, pokies, keno etc. and alcohol.

Bring it on. 

gg


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## moXJO (28 May 2022)

Garpal Gumnut said:


> To be honest a bit of inflation might not be all harmful.
> 
> The amount of cr*p I see in people's food trolleys when I shop in "poor" suburbs is astounding. Very little fresh veg or fruit, processed food, carbonated drinks, ice cream and confectionery.
> 
> ...



Surprisingly it's the good food getting more expensive. A lot of the crap is still cheap. I actively checked out of interest.


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## Garpal Gumnut (28 May 2022)

moXJO said:


> Surprisingly it's the good food getting more expensive. A lot of the crap is still cheap. I actively checked out of interest.



A very good point. 

Inflation will affect the essentials so the simple answer is to stop buying the rubbish and spend a greater percentage on what is a need, not on what is a want. 

gg


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## moXJO (28 May 2022)

Garpal Gumnut said:


> A very good point.
> 
> Inflation will affect the essentials so the simple answer is to stop buying the rubbish and spend a greater percentage on what is a need, not on what is a want.
> 
> gg



I think if this happens it's an intro into a 90s style recession. I remember the late 80s having a lot of gyms everywhere similar to now. They literally all disappeared at once as spending on the essentials killed them all. 
We even have a Labor government in, so the nostalgia is high.


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## 3 hound (28 May 2022)

moXJO said:


> nostalgia is high.




Nostalgia for what, I think I missed your point.

Interesting my gym now puts its fans on short timers, got rid of the water chiller, everything in the vending machine went up by $2 on top of already overpriced stock and they only use the air-conditioning at strategic times.if ever.

All of those items were in abundance and now they are rationed, removed or price gouged.

On the bright side all that oversupply of fit teens that got personal trainer qualifications and were charging $80/session minimum 6  month program sign up, more money than what a physio charges, are now down to $20 a session pay as you go. (Still would never pay anyone at a gym to train me if they can't deadlift more than I can). Becoming a millionaire Instagram fitness model must have made perfect sense once.


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## divs4ever (28 May 2022)

three days from  signing to working ( on the warehouse floor )  ?? LOL

 when i worked at several places you were expected to be working  on the first order within an hour ( and ideally be on the second or third order ) AND the machinery available was extremely limited  only rarely were electric powered  pallet jacks available  , let alone robots and stuff


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## Value Collector (28 May 2022)

3 hound said:


> All good, your points made sense I just got on a tangent because I  don't believe there is as much value adding by supermarkets  going on as you think.
> 
> Is your figure of 3% for beef specifically or some kind of average?
> 
> Normally I buy wholesale steak in a carton just like Coles &  Woolies do (or I buy directly from a grower) but today i bought a single steak (top cut)  from a supermarket that was over $30 ($48/kg). I can afford that but I know a lot of hard working families  would consider that so obscenely priced it's decadent food. The best steaks we buy are not premium, the premium quality is exported but we pay premium price.



3% is across their entire sales, on everything.

Some things are loss leaders, some things are higher profit, meats are often used as loss leaders.

Their value adding is simply compiling all the products you want in a single location that’s convenient to where you live, which actually does cost a lot of money.

Think about all the rent for the stores and distribution centres alone, add to that air conditioning, refrigerators, then wages etc, all those costs eat up a decent chunk of the gross profit margin.


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## Smurf1976 (29 May 2022)

moXJO said:


> A lot of experience and know how has retired. Younger guys chase the highest paying, easier, fast jobs. They lack a lot of what were considered the basics.



Slightly off topic but related is that society has waged a war on expertise for quite some time now.

That further adds to consumer cost inflation since something that really only needs a minor repair is now a total replacement simply because whoever's doing it doesn't know how to diagnose the problem.


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## Smurf1976 (29 May 2022)

3 hound said:


> Interesting my gym now puts its fans on short timers, got rid of the water chiller, everything in the vending machine went up by $2 on top of already overpriced stock and they only use the air-conditioning at strategic times.if ever.



I don't know anything about the cost structure of running a gym but I can say with certainty that fans and water chillers are both pretty cheap.

If they're cutting those sort of costs then it's akin to the office that looks to cut down on the cost of ball point pens or photocopying. It's scraping the bottom of the barrel stuff and suggests things are pretty desperate.


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## divs4ever (29 May 2022)

Smurf1976 said:


> Slightly off topic but related is that society has waged a war on expertise for quite some time now.
> 
> That further adds to consumer cost inflation since something that really only needs a minor repair is now a total replacement simply because whoever's doing it doesn't know how to diagnose the problem.



 sadly , i agree  , including the implication  this has been in progress for decades 

 i assumed they were readying for increased automation , i hope they enjoy the increased inflexibility , they have embraced


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## divs4ever (29 May 2022)

Smurf1976 said:


> I don't know anything about the cost structure of running a gym but I can say with certainty that fans and water chillers are both pretty cheap.
> 
> If they're cutting those sort of costs then it's akin to the office that looks to cut down on the cost of ball point pens or photocopying. It's scraping the bottom of the barrel stuff and suggests things are pretty desperate.



  not trying to limit the spread of the 'virus ' ??

 am not so sure  about  the water chiller costs  , chilled  tap water  has some minor dangers ( but dangers just the same ) and costs might be increasing  for bottled water  ( not just delivery costs )

 and don't ever assume those damned photocopiers are cheap ( either to buy , maintain . or to feed  ) some of the fancy   ones are software ( version ) specific , to boot 

 now maybe the gym is stressed  by lower current patronage  , and maybe there are extra regulations currently


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## 3 hound (29 May 2022)

divs4ever said:


> not trying to limit the spread of the 'virus ' ??
> 
> am not so sure  about  the water chiller costs  , chilled  tap water  has some minor dangers ( but dangers just the same ) and costs might be increasing  for bottled water  ( not just delivery costs )
> 
> ...




NDIS has been a cash surge in some gyms, I think we will be seeing a few stories of gross exploitation of NDIS funding coming thru the media in Australia's near future.


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## againsthegrain (29 May 2022)

3 hound said:


> NDIS has been a cash surge in some gyms, I think we will be seeing a few stories of gross exploitation of NDIS funding coming thru the media in Australia's near future.



Been going on for years


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## divs4ever (29 May 2022)

3 hound said:


> NDIS has been a cash surge in some gyms, I think we will be seeing a few stories of gross exploitation of NDIS funding coming thru the media in Australia's near future.



 i notice the local  gym  has clients who are probably NDIS  recipients  , that has not been a totally bad thing as such clients allowed then to continue business despite restrictions in other nearby businesses 

 gross exploitation , that is just human nature ( for some ) just as is ineffective supervision  of such schemes  , and of course  when news is slow ( and a real journalist is still employed )


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## Garpal Gumnut (29 May 2022)

I have never been to a gym. 

From the media it would appear that they are good meeting places for criminals and drug dealers to stay fit in between spells in the big house.

Inflation will not affect that demographic by the way. 

gg


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## divs4ever (29 May 2022)

not so apparent at the local gym  ,  lots of walking frames and wheelchairs  ( but maybe they are the mules )  some  folks trying to lose the 'pear' in their shape  , but maybe  the folks you are talking about  show up early in the morning or after mid-day 

 maybe if times get tougher , there will be some prescription medication trading ,  the crowd there ( including me ) are on some fairly exotic meds


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## Garpal Gumnut (29 May 2022)

One of the better articles that I have read on inflation, government, the mob ( us ) and money is by Theodore Dalrymple a link to which I leave below. It is from Taki's Magazine a rightist rag with some surprisingly sensible articles at times, particularly from TD. 

He quotes Dickens via Mr.Micawber on personal expenditure. This was before Centrelink. Yes. Such a time existed.

For those unfamiliar with pounds, shillings and pence, there were 20 shillings to a pound and 12 pence to a shilling. (and btw for info only 21 shillings to a guinea)



> Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness.





> Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.




sense-on-the-dollar

gg


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## JohnDe (30 May 2022)

JohnDe said:


> _Inflation, Interest Rates, Retail Sales, Crypto_​_ ARK CEO/CIO, Cathie Wood, weighs in on the workweek drop, the 90s vs. today, inflation, interest rates, and more. As always, she also discusses fiscal policy, monetary policy, the economy, market signals, economic indicators, and innovation._​





^^^ 12:30 min - Retail Sales & Inflation
^^^ 17:30 min - Inventories

If the USA sneezes, Australia catches a cold. Still true today.



> *The changing American consumer*
> Could a shift from goods to services ease inflation?
> 
> Asked recently about Amazon’s sprawling network of warehouses Brian Olsavsky, the firm’s finance chief, did not mince words. “We have too much space right now.” Faced with a surge in demand during the pandemic, the online retailer doubled its capacity from 193m square feet (18m square metres) at the end of 2019 to 387m square feet two years later. Today it has a glut, which the company says is costing it tens of millions of dollars a day.
> ...


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## mullokintyre (31 May 2022)

Germany has joined the queue of nation states that are experiencing runaway inflation.
From Zero Hedge


> German inflation hit another post-World-War-II record high, piling pressure on The ECB's need to exit from crisis-era stimulus after numbers from Spain also printed hotter than expected.
> 
> Driven by soaring energy and food costs, this morning's data showed *consumer prices in Europe's largest economy surged 8.7% YoY - far hotter than the +8.1% expected (thge highest since the start of the monthly statistics in 1963).*
> 
> ...



Mick


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## over9k (31 May 2022)

Precisely. It's not an overheating of demand problem!


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## over9k (31 May 2022)

Smurf1976 said:


> I don't know anything about the cost structure of running a gym



15 year gym rat here:

After rent (which any business will pay unless it owns the floorspace), it's air conditioning. Gyms have virtually no ongoing expenses other than the cleaning crew that run the vacuum cleaners through the place each day. Dependent on the climate obviously, gyms are actually very energy intensive. It takes a lot of power to cool dozens of people exercising flat out. I've spotted a couple of ENORMOUS solar panel arrays lately that I'll try to get a picture of sometime to show you what I mean.

If you think of a gym like a giant cool room/cold storage but with hundreds of (large amounts of) heat producing bodies passing through it each day you can obviously pretty quickly start to understand how they actually work. 

As I keep pointing out, if energy goes up then the more energy intensive something is the more it's going to go up too. I've locked my gym membership fees in 

Hence why, say, wheat is at record highs but rice has barely moved.


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## JohnDe (31 May 2022)

over9k said:


> 15 year gym rat here:
> 
> After rent (which any business will pay unless it owns the floorspace), it's air conditioning. Gyms have virtually no ongoing expenses other than the cleaning crew that run the vacuum cleaners through the place each day. Dependent on the climate obviously, gyms are actually very energy intensive. It takes a lot of power to cool dozens of people exercising flat out. I've spotted a couple of ENORMOUS solar panel arrays lately that I'll try to get a picture of sometime to show you what I mean.
> 
> ...




They should put generators on the treadmills and cycles, and then hook it all up to the grid


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## divs4ever (31 May 2022)

over9k said:


> 15 year gym rat here:
> 
> After rent (which any business will pay unless it owns the floorspace), it's air conditioning. Gyms have virtually no ongoing expenses other than the cleaning crew that run the vacuum cleaners through the place each day. Dependent on the climate obviously, gyms are actually very energy intensive. It takes a lot of power to cool dozens of people exercising flat out. I've spotted a couple of ENORMOUS solar panel arrays lately that I'll try to get a picture of sometime to show you what I mean.
> 
> ...



 regarding  rice , SO FAR , can see the potential for rice  consumption to increase  ( but not  to rocket-ship proportions )

 rice tends to store  better  , so would expect stackers ( like me ) to have a few months supply ( in the pantry )

 gyms ,  during the recent virus thingy , i notice the local  gym  has a 'hygienist '  ( or whatever her job title is )  comes by maybe two-hourly  , to 'wipe '  ( i am guessing an alcohol-based solution )   on the machines  frequently  used  ( probably wise  considering the number  of 'rehab'   members  that i see )  , also i note  certain machines appear to  need increased  maintenance/repairs  ( the treadmills and rowing machines , principally )


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## over9k (31 May 2022)

As I said a few pages back, it's a "not yet":




Hungary and poland are holding it up. Russia's responding with gas and grain.


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## martaart077 (31 May 2022)

According to Choice, in addition to inflation, we also have shrinkflation as well

All points to things getting more expensive









						The groceries shrinking and getting more expensive in 2022 | CHOICE
					

Want to know which grocery items are getting smaller and costing you more? Find out with our latest ‘shrinkflation’ wrap-up




					www.choice.com.au


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## divs4ever (31 May 2022)

martaart077 said:


> According to Choice, in addition to inflation, we also have shrinkflation as well
> 
> All points to things getting more expensive
> 
> ...



 'shrinkflation' observed as early as November last year  , so   i reduced my 'stock-piling' of those lines ( the shrinking  , ones )  by April those lines were no longer stocked at the local super-market  

 but this is nothing new to those that grew up in the 1970's


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## over9k (31 May 2022)

martaart077 said:


> According to Choice, in addition to inflation, we also have shrinkflation as well
> 
> All points to things getting more expensive
> 
> ...



Yes, they do this with the data too: Change the stuff in the "basket of goods" to cheaper/crappier/etc stuff because "Once it gets too expensive people just won't buy it any more".


----------



## mullokintyre (1 June 2022)

From Todays Australian


> The Australian economy shrugged off Omicron, devastating floods, and intensifying labour shortages to grow by a robust 0.8 per cent over the first three months of the year.
> 
> The annual pace of growth slowed from 4.2 per cent to 3.3 per cent, reflecting the end of the Delta lockdown bounce experienced through the December quarter, the seasonally adjusted figures from the Australian Bureau of Statistics showed.
> 
> ...



So the cits and the govt are still out there spending., but not as much as they were earlier.
The big jump in export value may be due more to inflationary increases in the cost of goods rather than an increase in volume.
Mick


----------



## qldfrog (2 June 2022)

https://www.news.com.au/finance/economy/australian-economy/ruinous-oil-and-gas-prices-could-lead-australia-into-recession/news-story/2bdb8b4b9b6152332baef62d44fc8751
		

As @Smurf1976 has been explaining for a while, but there is a way out.
One part i do not understand is the statement that if recession hits us,the AUD would go to the moon?


----------



## againsthegrain (2 June 2022)

qldfrog said:


> https://www.news.com.au/finance/economy/australian-economy/ruinous-oil-and-gas-prices-could-lead-australia-into-recession/news-story/2bdb8b4b9b6152332baef62d44fc8751
> 
> 
> As @Smurf1976 has been explaining for a while, but there is a way out.
> One part i do not understand is the statement that if recession hits us,the AUD would go to the moon?



newscomau usually copy and paste their articles and/or splice a few chunks into 1 article without proof reading it so they probably forgot to replace aud with inflation.


----------



## noirua (2 June 2022)

Rate hike fears rattle markets​

Wednesday, Jun 1, 2022Dear Stockhouse Member,
It was a choppy day for Canada's main stock index after the Bank of Canada said it was prepared to hike interest rates aggressively to combat surging inflation. The mining, industrials, financials, and energy sectors moved higher on Wednesday, with the latter raking in higher oil prices after E.U. leaders agreed to a partial and phased ban on Russian oil and as China ended its COVID-19 lockdown in Shanghai. Canadian manufacturing activity expanded at a faster pace in May with higher output meeting demand and inflation pressures showing some signs of easing.


			Stockhouse @ the Bell: Rate hike fears rattle markets - Stockhouse @ the Bell


----------



## noirua (2 June 2022)

qldfrog said:


> https://www.news.com.au/finance/economy/australian-economy/ruinous-oil-and-gas-prices-could-lead-australia-into-recession/news-story/2bdb8b4b9b6152332baef62d44fc8751
> 
> 
> As @Smurf1976 has been explaining for a while, but there is a way out.
> One part i do not understand is the statement that if recession hits us,the AUD would go to the moon?






Aussie$ v UK£ Live chart: https://uk.advfn.com/p.php?pid=staticchart&s=FX^GBPAUD&t=37&p=5&dm=0&vol=0&width=300&height=208&min_pre=0&min_after=0

It does look as if the Aussie is heading to AUD1.5 to GBP1.


----------



## qldfrog (2 June 2022)

noirua said:


> View attachment 142452
> 
> 
> Aussie$ v UK£ Live chart: https://uk.advfn.com/p.php?pid=staticchart&s=FX^GBPAUD&t=37&p=5&dm=0&vol=0&width=300&height=208&min_pre=0&min_after=0
> ...



yes, my feeling too: I would expect the AUD not to go to the moon but go down down down


----------



## mullokintyre (2 June 2022)

qldfrog said:


> yes, my feeling too: I would expect the AUD not to go to the moon but go down down down



You only have to look at what has happened in every other recession where the AUD, being a proxy for commodities, has always gone down steeply.
Now if  the AUD were a proxy for war armaments, now that would be different.
Mick


----------



## CityIndex (2 June 2022)

Reports are suggesting that certain OPEC+ members are prepared to increase production should output from Russia fall significantly. 

This could help ease some of the renewed inflation concerns by potentially sending oil on a deeper pullback, however with strong economic data from the US overnight, it remains to be seen how much of a difference it will actually make.


----------



## over9k (2 June 2022)

CityIndex said:


> Reports are suggesting that certain OPEC+ members are prepared to increase production should output from Russia fall significantly.



Yep I've seen a couple of headlines showing this, particularly from the saudi's. 

This war might have stuck a thorn in the side of OPEC too and anyone that knows anything about cartel game theory knows they're inherently unstable so we might see russia's influence within OPEC go as well. 

It can only be a good thing (for them) to have the rest of the world MORE reliant on their oil so a bit of betrayal/backstabbing wouldn't surprise me here at ALL.


----------



## over9k (2 June 2022)

Yep lots of talk of the saudi's upping their output and opec meeting today, looking like another topup opportunity.


----------



## waterbottle (2 June 2022)

OPEC's real test...

It tends to be made of relatively poor nations who don't have much except for oil. It'd be real charitable of these poor nations to sit on their hands and not pump additional oil to make up the shortfall whilst POO is at all time highs...

We shall see


----------



## frugal.rock (2 June 2022)

Garpal Gumnut said:


> It is not brain science !



Nor is it rocket surgery...😅


----------



## noirua (2 June 2022)

qldfrog said:


> yes, my feeling too: I would expect the AUD not to go to the moon but go down down down



The chart shows the opposite with the Aussie going up and up.  It's the GBP going down. The European countries are stuffed as far as oil, gas, pasta, beef and wheat are concerned.  The USA and Australia come out of this rather well except for food prices. Diesel in the UK costs A$3.20 a litre. UK inflation is 9%, USA 8.5%, Australia 6%, Russia 17.5%, Turkey 68%, New Zealand 6.9%, Germany 7.9%, China 8%, France 5.8%, Spain 8.7%, Italy 6.9%, Poland 13.9%, Switzerland 2.9%, Canada 6.9%, Iran 39.3%, Israel 4%, Japan 2.5%.


----------



## qldfrog (2 June 2022)

noirua said:


> The chart shows the opposite with the Aussie going up and up.  It's the GBP going down. The European countries are stuffed as far as oil, gas, pasta, beef and wheat are concerned.  The USA and Australia come out of this rather well except for food prices. Diesel in the UK costs A$3.20 a litre. UK inflation is 9%, USA 8.5%, Australia 6%, Russia 17.5%, Turkey 68%, New Zealand 6.9%, Germany 7.9%, China 8%, France 5.8%, Spain 8.7%, Italy 6.9%, Poland 13.9%, Switzerland 2.9%, Canada 6.9%, Iran 39.3%, Israel 4%, Japan 2.5%.
> View attachment 142473



Indeed, Europe is screwed via self mutilation
But i still believe that recession will bring the aud down down down
Look at the behaviour vs pound during GFC


From 1aud getting 0.6 pound down to gfc nearly 0.5.
But i agree we are better off than most  except that we are actually in a trade war with China, kept quiet due to elections?


----------



## divs4ever (3 June 2022)

qldfrog said:


> yes, my feeling too: I would expect the AUD not to go to the moon but go down down down



 Australia still has exports  as long as the current regime doesn't irritate our trading partners ( not just China )  we should do comparatively OK  

 BUT we will feel the pain from not forming a wider range of trading relationships in the past  , i would have thought the GFC  was the warning sign to do that


----------



## divs4ever (3 June 2022)

waterbottle said:


> OPEC's real test...
> 
> It tends to be made of relatively poor nations who don't have much except for oil. It'd be real charitable of these poor nations to sit on their hands and not pump additional oil to make up the shortfall whilst POO is at all time highs...
> 
> We shall see



it's easy to blame those 'oil-rich' nations but there is also an agenda to reduce funding  for oil exploration and development ( and a separate agenda to destabilize  many of those same nations  )

 those 'poor-nations ' might have long memories and remember how opportunistic the West has been ,

 it would be a shame if OPEC  became stronger as a result of hostility towards them .. but not unreasonable


----------



## waterbottle (3 June 2022)

divs4ever said:


> it's easy to blame those 'oil-rich' nations but there is also an agenda to reduce funding  for oil exploration and development ( and a separate agenda to destabilize  many of those same nations  )
> 
> those 'poor-nations ' might have long memories and remember how opportunistic the West has been ,
> 
> it would be a shame if OPEC  became stronger as a result of hostility towards them .. but not unreasonable




Oh, I'm not blaming them. But understanding their predicament. Most of these countries are worse off than Russia, so it would not make sense for them to give up the opportunity to make money or improve themselves by selling a commodity near all time highs when it's unlikely to remain there for very long.


----------



## divs4ever (3 June 2022)

Russia sucked up the pain back in the 1990's ( and later )BUT learned the lessons  and veered towards self-sufficiency  , i am betting Russia is giving a discount to reliable customers and at the same time locking in multi-year contracts .

 and agreed that YOU aren't blaming them , but they are being blamed by others who have weaponized guilt  for example Sleepy Joe  hoping Venezuela would rush to rescue the US  , and i see Saudi Arabia is also   looking at business relationships rather than political relationships in recent times 

what might be worth watching is if South-East Asia  becomes a closer trading alliance  among themselves  and IF they improve ties with India or China ( or both )

 however oil-rich nations MIGHT learn some lessons from Norway and Brunei   and while neither is fully self-sufficient  , they can deploy the funds efficiently


----------



## mullokintyre (3 June 2022)

noirua said:


> The chart shows the opposite with the Aussie going up and up.  It's the GBP going down. The European countries are stuffed as far as oil, gas, pasta, beef and wheat are concerned.  The USA and Australia come out of this rather well except for food prices. Diesel in the UK costs A$3.20 a litre. UK inflation is 9%, USA 8.5%, Australia 6%, Russia 17.5%, Turkey 68%, New Zealand 6.9%, Germany 7.9%, China 8%, France 5.8%, Spain 8.7%, Italy 6.9%, Poland 13.9%, Switzerland 2.9%, Canada 6.9%, Iran 39.3%, Israel 4%, Japan 2.5%.
> View attachment 142473



The AUD is the 5th most traded currency in the world according to FXSSI.
The amount of trading is far greater than the weight of the OZ GDP, because its a seen as a proxy to commodities.
Whether this is accurate is immaterial, it all depends on the sentiment of traders to the AUD.
Fundamentals don't seem to matter much.
As I said, you just need to look at past history.
Below is a snapshot of unemployment rate against the periods of  defined recession for the US.
Although we have dodged a technical recession in recent times when the US has had one, historically we follow them


Unfortunately, I can not get data for the same period for the AUD GBP,, but a quick check for the recessions  in1980, 1983 and 1990 show that the GDP/AUD pair shoed it to be over 2 AUD to the GDP throughout that period.
Mick


----------



## waterbottle (4 June 2022)

The Fed believes that a $2.5T run-off will have the same effect as a 0.5% interest rate hike!!!! Seems pretty useless.... 







						Substitutability between Balance Sheet Reductions and Policy Rate Hikes: Some Illustrations and a Discussion
					

The Federal Reserve Board of Governors in Washington DC.



					www.federalreserve.gov


----------



## 3 hound (4 June 2022)

waterbottle said:


> The Fed believes that a $2.5T run-off will have the same effect as a 0.5% interest rate hike!!!! Seems pretty useless....
> 
> 
> 
> ...



What do they mean by "policy rate hike"??

Is that a weird name for interest rates?


----------



## waterbottle (4 June 2022)

3 hound said:


> What do they mean by "policy rate hike"??
> 
> Is that a weird name for interest rates?



yep


----------



## over9k (4 June 2022)

Last runoff in I think 2018 resulted in a pretty decent drop just for those wondering.


----------



## waterbottle (4 June 2022)

over9k said:


> Last runoff in I think 2018 resulted in a pretty decent drop just for those wondering.




That was arguably due to interest rate hikes


----------



## Garpal Gumnut (4 June 2022)

Quite an interesting interview between Daniela Cambone of Stansberry Research and Brett Johnson of Santiago Capital on :

Inflation, 
Fed, 
USD and 
Gold 
plus a host of other matters such as
War and 
Supply chain. 


The knee bone is attached to the thigh bone. 

gg


----------



## divs4ever (5 June 2022)

so what happened to all those containers ships  floating outside of the Californian ports ( not to mention all those empty containers NOW  , jamming up West Coast ports )

 just asking 'cos the trucker shortage doesn't seem to have gone away


----------



## moXJO (5 June 2022)

divs4ever said:


> so what happened to all those containers ships  floating outside of the Californian ports ( not to mention all those empty containers NOW  , jamming up West Coast ports )
> 
> just asking 'cos the trucker shortage doesn't seem to have gone away



Shanghai reopening will make it worse


----------



## qldfrog (5 June 2022)

moXJO said:


> Shanghai reopening will make it worse



Nah, russian market is open😊they can soak what we are unable to even unload


----------



## moXJO (5 June 2022)

Probably a good idea to order Christmas presents early this year. I had a nightmare last year.


----------



## 3 hound (5 June 2022)

moXJO said:


> Probably a good idea to order Christmas presents early this year. I had a nightmare last year.



Christmas presents = throw my dogs a dead roo. 

War in Ukraine, ships stuck in ports in China/US have not affected supply chains.


----------



## Knobby22 (5 June 2022)

3 hound said:


> Christmas presents = throw my dogs a dead roo.
> 
> War in Ukraine, ships stuck in ports in China/US have not affected supply chains.



When realistically will China recover, the Ukraine war end to restore the supply chains.?

Before this occur the world is likely to go into recession. If this occurs reasonably quickly then interest rates will  start going the other way.as we have deflationary pressures again. As the supply chains go back to normal deflation will increase.


----------



## Garpal Gumnut (5 June 2022)

Knobby22 said:


> When realistically will China recover, the Ukraine war end to restore the supply chains.?
> 
> Before this occur the world is likely to go into recession. If this occurs reasonably quickly then interest rates will  start going the other way.as we have deflationary pressures again. As the supply chains go back to normal deflation will increase.



I'm not as pessimistic. 

Globalisation will unwind rapidly and the old import export trade routes will quickly resume. Once goods, services and currencies flow freely again then inflation will settle. 

China doesn't care about Russia. They in fact dislike them more than they do most Caucasian nations as they share borders with them and know how stuffed their economy and culture is outside Moscow and St. Petersburg.

China looks after China, they need the US, Australia and Japan, the UK and Western European countries.

gg


----------



## 3 hound (5 June 2022)

Knobby22 said:


> When realistically will China recover, the Ukraine war end to restore the supply chains.?
> 
> Before this occur the world is likely to go into recession. If this occurs reasonably quickly then interest rates will  start going the other way.as we have deflationary pressures again. As the supply chains go back to normal deflation will increase.



This may be true but my dogs won't know the difference.


----------



## divs4ever (5 June 2022)

Knobby22 said:


> When realistically will China recover, the Ukraine war end to restore the supply chains.
> 
> Before this occur the world is likely to go into recession. If this occurs reasonably quickly then interest rates will  start going the other way.as we have deflationary pressures again.



 recover ??

 what makes you think China isn't doing exactly  what it desires to do ?

 after all they have no hesitation is publicly executing government ministers and officials deemed corrupt ( or harming Chinese interests )

 to my thinking China needs to consolidate  and strengthen internal structures  , and i suspect they are doing that via a 'covid outbreak ' , now of course China could be 'shadow-sanctioning' the West using the same tactic  , after all they did pledge to support Russia .

 the Chinese might foresee a major contraction in Western economies and be  adjusting policies to suit the change of status quo  , after all do you really expect China to shrug off various threats and sanctions  , China has already declared  it can't trust the US ( and some other nations ) to keep to their commitments  , and China does learn from history  ( despite their Communist leanings )

 i am NOT betting a Chinese recovery will benefit the West much at all ( and the Chinese remember the Opium Wars well  , so understand Western business practices )

 i will be trying for increased exposure to India hoping we ( the West ) will not completely trash that relationship as well


----------



## JohnDe (5 June 2022)

Shopping with my wife in the city. Sales are on she said, and here we are. Up to 50% off in David Jones, 30% in Myers, half the stuff made in China, clothes racks are overflowing. 

What inflation and shortages?


----------



## 3 hound (5 June 2022)

Only caught the end of it on the radio, a Chinese fighter plane flies across the path of an Australian military (non-combat) plane shoots flares at it and then intentionally ejects debris into its flight path that gets sucked into its motors (no harm to anyone).

I can't find the story so apologies if incorrect, mod's to delete if not verified.

I don't think the world is how western leaders think it is.


----------



## 3 hound (5 June 2022)

JohnDe said:


> Shopping with my wife in the city. Sales are on she said, and here we are. Up to 50% off in David Jones, 30% in Myers, half the stuff made in China, clothes racks are overflowing.
> 
> What inflation and shortages?
> 
> View attachment 142556



Building materials, food, cars, electricity, fuel,  rent....lots of things that everyday people need.

I just bought a new vehicle, paid cash.  I pick it up and drive it away in 2 years time (+- a few months). The dealer really has no clue if or when he has any vehicle to sell -  3 major brands he has a dealership for.


----------



## JohnDe (5 June 2022)

3 hound said:


> Only caught the end of it on the radio, a Chinese fighter plane flies across the path of an Australian military (non-combat) plane shoots flares at it and then intentionally ejects debris into its flight path that gets sucked into its motors (no harm to anyone).
> 
> I can't find the story so apologies if incorrect, mod's to delete if not verified.
> 
> I don't think the world is how western leaders think it is.




Did the incident cause a Sunday inflation jump?



> A Chinese J-16 fighter has aggressively challenged an RAAF maritime surveillance aircraft in international airspace over the South China Sea, flying dangerously close to the Australian jet and firing flares and “chaff” countermeasures.
> 
> Defence Minister Richard Marles said some aluminium chaff was drawn into the engines of the P-8A Poseidon during the May 26 incident, but the aircraft and its crew made it back to base unharmed.
> 
> ...








__





						Loading...
					





					www.theaustralian.com.au


----------



## 3 hound (5 June 2022)

JohnDe said:


> Did the incident cause a Sunday inflation jump?
> 
> 
> 
> ...




**** these pay-wall links and the shitty legacy media.


----------



## JohnDe (5 June 2022)

3 hound said:


> Building materials, food, cars, electricity, fuel,  rent....lots of things that everyday people need.
> 
> I just bought a new vehicle, paid cash.  I pick it up and drive it away in 2 years time (+- a few months). The dealer really has no clue if or when he has any vehicle to sell -  3 major brands he has a dealership for.




Sometimes I forget those things. My petrol bill is half what it was 9 months ago, I organized a great contract with my energy supplier a month ago, food prices are up but we have adjusted and buy mostly vegetables in season. Holding off on any building ideas and property investing, waiting for those to crash.


----------



## 3 hound (5 June 2022)

JohnDe said:


> My petrol bill is half what it was 9 months ago




Are you driving less or got different vehicle?


----------



## JohnDe (5 June 2022)

3 hound said:


> Are you driving less or got different vehicle?




Between us we had two ICEV, now we have one and a EV.


----------



## divs4ever (5 June 2022)

JohnDe said:


> Did the incident cause a Sunday inflation jump?
> 
> 
> 
> ...



 does the aircraft count as a 'spy-plane '  i think it would  , after all it MIGHT have been collecting signals data and other data , over contested islands , Australia  might consider itself fortunate the plane was not forced to land at a Chinese airfield ( or destroyed )

 after all the Chinese have shot down  at least one 'wandering ' passenger liner  in the past


----------



## 3 hound (5 June 2022)

I think the official response is that Australia will not be intimidated - are our leaders that stupid, I'm Australian and I'm intimidated because I'm not stupid.


----------



## JohnDe (5 June 2022)

> *The RBA has three options on Tuesday, but none are easy*
> 
> Mark down Tuesday, June 7, as one of the most important days in Australia’s recent history.
> 
> ...


----------



## Knobby22 (5 June 2022)

I disagree with RG. The previous government spent 1 trillion dollars. In 2.5 years. The new government won't be nearly as profligate. The economy will slow quickly.


----------



## JohnDe (5 June 2022)

Knobby22 said:


> I disagree with RG. The previous government spent 1 trillion dollars. In 2.5 years. The new government won't be nearly as profligate. The economy will slow quickly.




What, all three of his senarios?


----------



## Knobby22 (5 June 2022)

JohnDe said:


> What, all three of his senarios?



He is saying its about wages. It's about loose cash. The present inflation has not been caused by wage rises and in fact wages have hardly moved.
Sure there will be a bit of catch up but the interest rate rises will work by reducing money available due to larger mortgage payments, combined with increasing energy costs and food costs.

I am with CBA, probably between 1.5% and 2% will do the job.


----------



## JohnDe (5 June 2022)

Knobby22 said:


> He is saying its about wages. It's about loose cash. The present inflation has not been caused by wage rises and in fact wages have hardly moved.
> Sure there will be a bit of catch up but the interest rate rises will work by reducing money available due to larger mortgage payments, combined with increasing energy costs and food costs.




I read it differently - 
"_The biggest single boosters to that inflation rate are what we might term supply-side forces – big price rises in oil, gas, power, food and imported goods. Those price rises have often been compounded by shortages of supply_."

And a large wage increase may add to the issues.

"_But the bond market is looking for a three per cent rise. And remember a three per cent interest rate increase will not stop supply inflation but it will limit the spread of any 5.1 per cent minimum wage rise_"


----------



## divs4ever (5 June 2022)

well in my social circle ( as small as it is ) the wages have risen  because several of them  have taken promotions  or a better job elsewhere  .

 but no the base level wages  haven't kept track with real inflation  ( of course some others have taken early retirement  and used some of that super while it still buys something )


----------



## JohnDe (5 June 2022)

divs4ever said:


> well in my social circle ( as small as it is ) the wages have risen  because several of them  have taken promotions  or a better job elsewhere  .
> 
> but no the base level wages  haven't kept track with real inflation  ( of course some others have taken early retirement  and used some of that super while it still buys something )




My wife resigned from her job, put her regime to into the world and her phone and email has not stopped buzzing since. Having spoken to a few of the job prospects she always ask what the pay is, all have said "what are you expecting". My wife mentions a much higher hourly rate than her previous job, and all have accepted her request.

It is become a workers market out there.


----------



## macca (5 June 2022)

Knobby22 said:


> He is saying its about wages. It's about loose cash. The present inflation has not been caused by wage rises and in fact wages have hardly moved.
> Sure there will be a bit of catch up but the interest rate rises will work by reducing money available due to larger mortgage payments, combined with increasing energy costs and food costs.
> 
> I am with CBA, probably between 1.5% and 2% will do the job.




I think it will pause at 1% to wait and see, then if required, a gradual increase to perhaps 1.75

If they get to 2.0 that will crash the joint, particularly in NSW.

The household RE loans are enormous and even at 1% NSW will screech to a halt


----------



## 3 hound (5 June 2022)

JohnDe said:


> My wife resigned from her job, put her regime to into the world and her phone and email has not stopped buzzing since. Having spoken to a few of the job prospects she always ask what the pay is, all have said "what are you expecting". My wife mentions a much higher hourly rate than her previous job, and all have accepted her request.
> 
> It is become a workers market out there.



My area has very high unemployment and lots of young people out of work. 

Positions for good apprenticeships don't even get any one applying.


----------



## JohnDe (5 June 2022)

3 hound said:


> My area has very high unemployment and lots of young people out of work.
> 
> Positions for good apprenticeships don't even get any one applying.




Sorry, I'm not understanding what you are trying to say. Your area has a lot of unemployed youth but no one is applying for advertised apprentice positions?


----------



## 3 hound (5 June 2022)

JohnDe said:


> Sorry, I'm not understanding what you are trying to say. Your area has a lot of unemployed youth but no one is applying for advertised apprentice positions?



That's pretty much it.  The positions eventually get filled but people don't line up for blocks to apply.  Does not appear to be a high correlation between high unemployment and competition for jobs ...which is counter intuitive to say the least.


----------



## divs4ever (5 June 2022)

JohnDe said:


> My wife resigned from her job, put her regime to into the world and her phone and email has not stopped buzzing since. Having spoken to a few of the job prospects she always ask what the pay is, all have said "what are you expecting". My wife mentions a much higher hourly rate than her previous job, and all have accepted her request.
> 
> It is become a workers market out there.



 the keyword is 'worker '  , and a smart management  would have tried harder to keep her (  finding an equivalent replacement  at the same price is very rare )

 hope she lands a great job


----------



## divs4ever (5 June 2022)

3 hound said:


> That's pretty much it.  The positions eventually get filled but people don't line up for blocks to apply.  Does not appear to be a high correlation between high unemployment and competition for jobs ...which is counter intuitive to say the least.



 apprenticeships got a bad rep  , not long after i  had to resign mine ( great company  but kept on having health issues )

 apprenticeships  depend on the company and the tradesmen  you are learning from ( and of course advanced education promises big pay-packets  glamorous job titles , easy work  , etc etc )

 but the first millionaire in my class ( in the early '70s )  was the class dunce who went out and scored an electrician's apprentice , and went on own several blocks of units ( he wired up himself ) ( he was a millionaire  before several had finished their Ph. D )

 i guess it is all a matter of seeing and seizing  the opportunity


----------



## over9k (9 June 2022)

"Near term"


----------



## Smurf1976 (10 June 2022)

I'm told that petrol and diesel in England now costs more than £2 per litre.

A friend spotted diesel at £2.049 and petrol at £2.029 per litre at a BP site a couple of days ago. 

In Australian $ those prices are $3.60 per litre for diesel and $3.56 for petrol.

Just posting it as a data point. It's expensive here in Australia yes but far worse in other countries.


----------



## divs4ever (10 June 2022)

Freeport LNG fire cuts key source of U.S. gas supply to Europe, Asia

https://www.investing.com/news/stoc...ource-of-us-gas-supply-to-europe-asia-2835432

US Senator suggests using cocaine in response to fuel crisis

https://www.rt.com/news/556853-us-senator-cocaine-gas/


----------



## over9k (10 June 2022)

Smurf1976 said:


> I'm told that petrol and diesel in England now costs more than £2 per litre.
> 
> A friend spotted diesel at £2.049 and petrol at £2.029 per litre at a BP site a couple of days ago.
> 
> ...



Different taxes


----------



## divs4ever (10 June 2022)

ah  yes , those pesky government grabs

 i wonder if the governments will miss those when they go green


----------



## 3 hound (10 June 2022)

divs4ever said:


> ah  yes , those pesky government grabs
> 
> i wonder if the governments will miss those when they go green




Going to be amusing to see what new taxes will be introduced on EV:s when the (fossil) fuel taxes disappear.


----------



## divs4ever (10 June 2022)

registration by kilometers traveled  , is one idea i have seen floated , ( i bet in parallel to toll roads and bridges )


----------



## over9k (10 June 2022)

jesus christ


----------



## over9k (10 June 2022)

"The fed cannot drill for oil or plant crops"


----------



## over9k (11 June 2022)

Because NOT "digital gold".


----------



## over9k (11 June 2022)

Didn't sell at 800 but did put a topup order in for 660 that filled while I was at the gym so I've had a VERY good night:




It'll be back up to 800 soon enough. Still kicking myself for not getting in earlier last year but oh well.

There might even be more dips to buy heading into winter (lots of speculation that the winter will crumble a lot of russian infrastructure which will send prices soaring before then but we shall see) before we see a seasonal rebound too.

Either way, still a total buy/hold IMO.


----------



## 3 hound (11 June 2022)

Milton Friedman explains inflation;


----------



## Macquack (11 June 2022)

The only thing that does not go up with inflation is your own labour.

Retired people realise that very quickly.


----------



## waterbottle (11 June 2022)

Shanghai locks down for another round of mass COVID-19 testing
					

China's COVID-zero policy means tens of million of Shanghai residents will again be locked down to undergo mass testing over the weekend, just days after a gruelling, two-month lockdown was lifted.




					www.abc.net.au
				




Meanwhile 8.6% CPI... Me thinks now that the Fed is not going to be sticking to their 0.5% schedule. There's a risk of a bigger than expected rate rise with oil at $120+. All of this translates to a real risk of recession.

I'm in cash folks


----------



## Value Collector (11 June 2022)

waterbottle said:


> Shanghai locks down for another round of mass COVID-19 testing
> 
> 
> China's COVID-zero policy means tens of million of Shanghai residents will again be locked down to undergo mass testing over the weekend, just days after a gruelling, two-month lockdown was lifted.
> ...




Well a bunch of the inflation is caused by supply chain bottle necks due to covid lock downs, and sanctions due to war, so I am not sure that interest rates alone can fix it.


----------



## over9k (12 June 2022)

waterbottle said:


> Shanghai locks down for another round of mass COVID-19 testing
> 
> 
> China's COVID-zero policy means tens of million of Shanghai residents will again be locked down to undergo mass testing over the weekend, just days after a gruelling, two-month lockdown was lifted.
> ...



0.75 would be admitting that they've dropped the ball though


----------



## JohnDe (12 June 2022)

3 hound said:


> Milton Friedman explains inflation;







When central banks raise interest rates, the impact is felt far and wide. Mortgages become more expensive, house prices might fall and unemployment can rise. So why do central banks do it? This film tells you why.​​00:00 - Why should you care about rising interest rates?​00:45 - What are interest rates?​01:36 - What do central banks do?​02:14 - Why do central banks raise interest rates?​03:12 - How do raised interest rates affect consumers?​04:30 - How do raised interest rates affect businesses?​05:20 - What are the risks of raising interest rates?​06:05 - How do interest rates affect inflation?​


----------



## 3 hound (12 June 2022)

I still don't understand how prices/inflation decreases.

Official inflation only refers to what two time periods exactly. As I understand inflation is calculated by the difference in prices at two time points. What are those time points because it can make a huge difference in the number.

Anyone feel free to comment.


----------



## againsthegrain (12 June 2022)

3 hound said:


> I still don't understand how prices/inflation decreases.
> 
> Official inflation only refers to what two time periods exactly. As I understand inflation is calculated by the difference in prices at two time points. What are those time points because it can make a huge difference in the number.
> 
> Anyone feel free to comment.




supply and demand is a simple one to start you off

e.g supply of money > demand


----------



## 3 hound (12 June 2022)

againsthegrain said:


> supply and demand is a simple one to start you off



Ok price for a manufactured product is X, demand drops I have never heard of workers in the entire supply chain pay and condition going down (they might lose their job I guess but that stops products being made) in order to reduce manufacturing cost of product at price X so how does the price X drop?


----------



## againsthegrain (12 June 2022)

3 hound said:


> Ok price for a manufactured product is X, demand drops I have never heard of workers pay and condition going down in order to reduce manufacturing cost of X so how does the price of X drop,?




If you got 100 units of brand new product, but now only 50 people can afford it because;
- can borrow less
- have more expenditure on essentials

what do you do?  throw 50 in the sea and write them off or find a lower price point where you can sell 75 at less profit.
Workers pay does go down, a position is made redundant and a cheaper "contractor" fills the gap, or the workload is spread across other workers so essential they are doing more work for same $


----------



## 3 hound (12 June 2022)

againsthegrain said:


> If you got 100 units of brand new product, but now only 50 people can afford it because;
> - can borrow less
> - have more expenditure on essentials
> 
> ...



I know a lot of workers that got laid off with huge redundancy packages never to work at the organisation again. They didn't even get back from their first luxury cruise and the organisation bribed them to come back as contractors and  consultants at ridiculous pay increases and better conditions.

Pulling old people out of retirement to do their old job is becoming a trend. I know people that have been sacked and retired a dozen times being begged to return to their job from tradies, nurses, teachers software engineers, truckers the lot.


----------



## againsthegrain (12 June 2022)

3 hound said:


> I know a lot of workers that got laid off with huge redundancy packages never to work at the organisation again. They didn't even get back from their first luxury cruise and the organisation bribed them to come back as contractors and  consultants at ridiculous pay increases and better conditions.
> 
> Pulling old people out of retirement to do their old job is becoming a trend. I know people that have been sacked and retired a dozen times being begged to return to their job from tradies, nurses, teachers software engineers, truckers the lot.




Contractors and consultants may get paid more at a certain point in time, but like you pointed out the full timers got huge payouts, paid holidays etc.  Contractors/consultants will not,  when they are not needed the contract is not renewed and its simple for the company to freeze that expense.
Also labour hire can be written off differently then full time workers with benefits,  in the favour of the company of course.


----------



## 3 hound (12 June 2022)

Migjt be technically true but the opposite is happening in reality.


againsthegrain said:


> Contractors and consultants may get paid more at a certain point in time, but like you pointed out the full timers got huge payouts, paid holidays etc.  Contractors/consultants will not,  when they are not needed the contract is not renewed and its simple for the company to freeze that expense.
> Also labour hire can be written off differently then full time workers with benefits,  in the favour of the company of course.


----------



## againsthegrain (12 June 2022)

3 hound said:


> Migjt be technically true but the opposite is happening in reality.




Yeah at the moment with shortages and all the sugar money still floating around.  Im not going to pretend to know where we will be at the end of the year tho.


----------



## divs4ever (12 June 2022)

over9k said:


> 0.75 would be admitting that they've dropped the ball though



 i took the rate hike  during the month-long election campaign as that admission ( especially as there was no earth-shattering event  in the month leading up to the rise )

  and i would add they not only dropped  but let it disappear from  sight , rolling down the hill 

 let's say they jack rates to  3% by December  but 'official inflation ' is running at more than 6%  that ball is gathering real speed  , it could bounce and shatter a glass ceiling  or plunge over a cliff  and the RBA will still be a spectator ( if they are lucky )


----------



## divs4ever (12 June 2022)

againsthegrain said:


> If you got 100 units of brand new product, but now only 50 people can afford it because;
> - can borrow less
> - have more expenditure on essentials
> 
> ...





 now from my observations in the '70s and '80s  pays didn't go down ( in a meaningful way ) they just eroded 'entitlements ' , and there were noticeably less people getting a pay-packet


----------



## 3 hound (12 June 2022)

divs4ever said:


> now from my observations in the '70s and '80s  pays didn't go down ( in a meaningful way ) they just eroded 'entitlements ' , and there were noticeably less people getting a pay-packet



I don't follow this so could be wrong, doesn't every wage job have an award that dictates your pay, what award has ever been revised down because of inflation???

Examples plz.


----------



## waterbottle (12 June 2022)

over9k said:


> 0.75 would be admitting that they've dropped the ball though



Yellen has already done admitted that, so that's not a new challenge


----------



## waterbottle (12 June 2022)

Value Collector said:


> Well a bunch of the inflation is caused by supply chain bottle necks due to covid lock downs, and sanctions due to war, so I am not sure that interest rates alone can fix it.




They won't but it's the only tool they have and they'll use it


----------



## 3 hound (12 June 2022)

waterbottle said:


> Yellen has already done admitted that, so that's not a new challenge



Yellen speaks more about climate change and social justice issues than the economy.


----------



## waterbottle (12 June 2022)

3 hound said:


> Yellen speaks more about climate change and social justice issues than the economy.




It is what it is.

Whether you agree or or not, these factors will have an impact on future society and dictate what direction our economy will take. The green revolution is a well documented polico-economic push to wean Western society off of oil, if not the globe. If you don't agree with the science of climate change, than you could surely agree from a military, diplomatic and energy security standpoint, it is far easier for Western nations to achieve energy independence & security by relying on renewables rather than fossil fuels that are controlled by cartels and unstable dictators.
Social justice is goal that Western governments have been attempting to improve upon for the past few years. Equal opportunity for work and equal pay does actually translate into a more prosperous and useful society. Central banks have recognised this and often speak about reducing discrimination amongst groups in their speeches.


----------



## waterbottle (12 June 2022)

BTC just cracked 27K.... USD is the mother of all safe havens LOL


----------



## 3 hound (12 June 2022)

waterbottle said:


> It is what it is.
> 
> Whether you agree or or not, these factors will have an impact on future society and dictate what direction our economy will take. The green revolution is a well documented polico-economic push to wean Western society off of oil, if not the globe. If you don't agree with the science of climate change, than you could surely agree from a military, diplomatic and energy security standpoint, it is far easier for Western nations to achieve energy independence & security by relying on renewables rather than fossil fuels that are controlled by cartels and unstable dictators.
> Social justice is goal that Western governments have been attempting to improve upon for the past few years. Equal opportunity for work and equal pay does actually translate into a more prosperous and useful society. Central banks have recognised this and often speak about reducing discrimination amongst groups in their speeches.



Do you want your mechanic to lecture you on social justice issues and climate change or just shut up and fix the car like he is getting paid to do.

Have you watched "planet of the humans" I'm guessing not because big tech shadow banned it and big media poo poo-ed it without answering it's criticisms. 

While incomplete it raises and exposes many valid points about renewables.

Cartels do not disappear with renewables..the faces just change and sometimes that doesn't even happen.


----------



## 3 hound (12 June 2022)

waterbottle said:


> Equal opportunity for work and equal pay does actually translate into a more prosperous and useful society.



Can you prove this claim plz.

Also explain "equal opportunity" (we already have that in law) are you talking about diversity hires/quotas?

Also explain equal pay, don't want to assume anything.


----------



## waterbottle (12 June 2022)

3 hound said:


> Can you prove this claim plz.
> 
> Also explain "equal opportunity" (we already have that in law) are you talking about diversity hires/quotas?
> 
> Also explain equal pay, don't want to assume anything.







__





						Economic Inequality & Equitable Growth - FEDERAL RESERVE BANK of NEW YORK
					






					www.newyorkfed.org


----------



## 3 hound (12 June 2022)

waterbottle said:


> __
> 
> 
> 
> ...



Pretty lazy bro, just dumping a link to a series of symposiums.


----------



## waterbottle (12 June 2022)

3 hound said:


> Pretty lazy bro, just dumping a link to a series of symposiums.



Hit the play button as soon as the website opens up. I can't press play for you.


----------



## over9k (13 June 2022)

5/30 now inverted again too. NDX futures 1.2 into the red. Should be another beautiful dip coming up. I'm angling for another topup tonight.


----------



## Knobby22 (13 June 2022)

Stagflation? There are big differences between the 1970s and today








						Stagflation? There are big differences between the 1970s and today
					

The World Bank has warned the global economy will soon experience stagflation, but that doesn't mean we're returning to the 1970s, writes Gareth Hutchens.




					www.abc.net.au


----------



## waterbottle (13 June 2022)

over9k said:


> View attachment 142825
> View attachment 142824
> View attachment 142823
> 
> ...



Balls o steel my friend. 

You don't think the oil play will collapse if recession is on the cards? Shanghai is back in lockdown too. The thesis that oil will be in ever increasing demand looks shaky.


----------



## Dona Ferentes (13 June 2022)

Our new Ten Dollar note


----------



## 3 hound (13 June 2022)

waterbottle said:


> Hit the play button as soon as the website opens up. I can't press play for you.



No but you can develop an argument in your own words supported by quotes to show you have actually thought your own claims thru.

For example:

 "
explain "equal opportunity" (we already have that in law) are you talking about diversity hires/quotas?

Also explain equal pay, don't want to assume anything.

"


----------



## 3 hound (13 June 2022)

Dona Ferentes said:


> Our new Ten Dollar note
> 
> View attachment 142830



Looks nutritious.


----------



## waterbottle (13 June 2022)

3 hound said:


> No but you can develop an argument in your own words supported by quotes to show you have actually thought your own claims thru.
> 
> For example:
> 
> ...



You miss the point. It's irrelevant what you or I think. This is the way now, like it or not.


----------



## over9k (13 June 2022)

waterbottle said:


> Balls o steel my friend.
> 
> You don't think the oil play will collapse if recession is on the cards? Shanghai is back in lockdown too. The thesis that oil will be in ever increasing demand looks shaky.



My long term play on oil is a supply side driven one. The dip rebuys etc are the demand driven plays.

It's been very rewarding this year so far. If you'd bought at my last big dip post around 25th of april at the 320 mark you would have clipped 150% return when NRGU hit 800.

Pretty hard to argue with that kind of return in what, just over 6 weeks?


----------



## Garpal Gumnut (13 June 2022)

Knobby22 said:


> Stagflation? There are big differences between the 1970s and today
> 
> 
> 
> ...



I don't believe there is much difference between the 70's and today.

We spent our money on vinyl music, alcohol, cannabis, expensive clothes and sports goods produced by our highly paid Australian workers. We had a Sandman and beaches alright, but airfares and travel were horrifically expensive. The food was crap but not cheap and the financial sector was highly regulated and it cost an arm and a leg for brokerage. We were also paying for a war not of our making. Houses were cheap and unions were plenty and corrupt for all the good they did.

Today clothes are cheap, as is alcohol. I have no idea what cannabis costs but it can be grown now quite easily, cars are better and safer, airfares are cheap (maybe not in to the future ) , music is cheap or free and sports goods are inexpensive. Food is tasty and nutritious and cheap on world terms. And we were recently and will be in wars not of our own making. The only thing really different is the price of housing and the lack of unions who could make a difference if they tried for workers nowadays.

gg


----------



## over9k (13 June 2022)

Garpal Gumnut said:


> I don't believe there is much difference between the 70's and today.
> 
> We spent our money on vinyl music, alcohol, cannabis, expensive clothes and sports goods produced by our highly paid Australian workers. We had a Sandman and beaches alright, but airfares and travel were horrifically expensive. The food was crap but not cheap and the financial sector was highly regulated and it cost an arm and a leg for brokerage. We were also paying for a war not of our making. Houses were cheap and unions were plenty and corrupt for all the good they did.
> 
> ...



70's oil shock was caused by a cutoff of supply, so too has this one been (will be).


----------



## over9k (14 June 2022)

Peter schiff absolutely on the money. Watch until the end.


----------



## over9k (14 June 2022)

Stocks plummeting but oil is UP you say? HMMMMMMMMM. 




Grabbed some more at 550 right where that volume spike is. Another excellent night.


----------



## waterbottle (14 June 2022)

over9k said:


> Peter schiff absolutely on the money. Watch until the end.





I lol everytime someone rolls out Peter Schiff. To me, he is the OG Gold Bug as my formative years were during the GFC when I distinctly remember him and Dr. Marc Faber preaching economic armaggeddon. Both should have been right, but they ended up being totally wrong because they couldn't foresee (in fact no one could) how far government would go to stop the entire global economy from collapsing.

Which brings me to this video. Inflation is running hot. It's not as the Fed or Yellen have predicted (the latter has admitted). And the agreed upon remedy is jacking up interest rates faster than what has been done in the past 20 years.
How then, can we *not* be entering a recession?




We have retail sales slowing in Europe and the retailers in the US unable to clear inventory, now looking at marking down products. US home sales have slowed and prices are expected to fall. Real wages are falling. *NASDAQ is now down 31% from all time highs! 10-year bonds are now 3.3% (last time they were this high was in 2011)*.

Worse still, regulated financial institutions are tied into the crypto market. It seems they've been chasing greedy crypto gains in an unregulated jungle market that has lost $2T to date, and if the NASDAQ is any indicator for what to expect for post-COVID tech risk, will likely continue to fall by an additional $500-800 billion.
This is another thread in itself but it absolutely stinks of contagion and is a mirror copy of the private CDO/CDS markets that herladed the GFC. Big financial institutions making private bets in an unregulated market, booking massive losses only for the public to bail them out again.

These are huge shifts that are occurring. Therefore the Fed response, if they truly wish to reign this in, will have to also be huge.
The ECB lifting rates and (forecasting their rate hike plan) has received a lot of criticism as it eliminates the 'shock and awe' aspect of a rate hike cycle. There may be some truth to that as central bankers are notorious for calming/jawboning the public when they've had to - after all the entire system is built on perception, smoke and mirrors.
Which begs the question. Has the Fed's publicly-stated committment to 0.5% rate hikes over the past few months been a bit of a white lie? IMO, it sounds like it has. Why? Well the Fed released its own internal study showing that a run-off of their balance sheet alone amounts to the equivalent of a 0.5% rate hike! What the absolute f***
This means they still only have one tool - interest rates. And as several commentators have already stated, a federal funds rate of 2.x% is not going to make an impact when CPI is 8.x%.

I am increasingly of the opinion that they're going to slam this down by starting with a surprise 0.75%-1% hike this Wednesday, or via additional surprise inter-meeting rate hikes (as they've done multiple times in past economic emergencies).

Combined with the data, and the position that the Fed is in, how can we *not* be expecting a recession?


----------



## over9k (14 June 2022)

I'm not saying I disagree with you bottle, but the problem is that a 1% or whatever hike is a tacit admission that they've dropped the ball, which would only bring their credibility into question, which would only tumble markets further.

This might (probably does) make them very hesitant to do so. Pure gut instinct on this but I reckon we'll see "more" 50 point hikes forecast (so they can be priced in) rather than a couple of 100's now.

Forward guidance can (CAN) be enough.


----------



## 3 hound (14 June 2022)

over9k said:


> which would only bring their credibility into question,




Their credibility was high with which financial analyst??


----------



## over9k (14 June 2022)

3 hound said:


> Their credibility was high with which financial analyst??



Ok, MORE into question then. 

Point is, any blow to fed credibility = increase in uncertainty = sh!tshow.


----------



## waterbottle (14 June 2022)

Yellen has already admitted defeat. And Powell is backpedalling. I think most analysts now understand that Fed got it wrong. 
The only party they need to save face with are the Public. Fortunately, Biden is there to take the blame.


----------



## over9k (14 June 2022)

Only question from here is seasonality. We usually see a rollover about now but I've read/heard a lot of talk from a lot of very smart people of russia's oil just going byebye once it's wrecked by the cold this year.

Either way, my current strategy is to deploy 20% of remaining cash at every big dip from now until I, well, run out. Either we see it scream once russian oil's toast or I buy up cheap in the winter lull before it takes off again with the thaw next year. Still kicking myself that I didn't put more on the line doing precisely this the past couple of years, but tech ran hard until the start of this year so I didn't exactly lose everything. Now that's off the menu.  

My two biggest positions are still FNGD and NRGU.


----------



## over9k (14 June 2022)




----------



## 3 hound (14 June 2022)

waterbottle said:


> Biden is there to take the blame.




Biden can not take accountability for anything, everything wrong is because Trump, Putin, climate change, white nationalists, conservative SCOTUS...UFO's


----------



## over9k (14 June 2022)

In order for biden to be responsible for the biden administration he would have to first be in charge of the biden administration


----------



## againsthegrain (14 June 2022)

over9k said:


> In order for biden to be responsible for the biden administration he would have to first be in charge of the biden administration



who is biden?


----------



## waterbottle (14 June 2022)

againsthegrain said:


> who is biden?





3 hound said:


> Biden can not take accountability for anything, everything wrong is because Trump, Putin, climate change, white nationalists, conservative SCOTUS...UFO's






over9k said:


> In order for biden to be responsible for the biden administration he would have to first be in charge of the biden administration






againsthegrain said:


> who is biden?





LMAO

USmidbterms are being held in Nov 22. The Biden administration will have to face the public, regardless of what your politics are.


----------



## over9k (14 June 2022)

Buy the dips boys


----------



## moXJO (15 June 2022)

over9k said:


> Peter schiff absolutely on the money. Watch until the end.



Hes been waiting for a long time for someone to say that. The guy must be messing his pants that he might finally be right.


----------



## divs4ever (15 June 2022)

3 hound said:


> I don't follow this so could be wrong, doesn't every wage job have an award that dictates your pay, what award has ever been revised down because of inflation???
> 
> Examples plz.



 i don't know about currently  but some ( Mega corp ) companies have interesting ways to circumvent awards and enterprise agreements  , in some cases it is the discrete erosion of entitlements  ( in one job i had in the '70s  it was how sick-pay was defined  , in others it has been the definition of 'holidays '  or overtime entitlements  ,)

 now i stress this has been prominent in MEGA- corps , the smaller employer simply bites the bullet ( regulators and fines and stuff  seems to make any attempt distracting and unprofitable )

 i remember working at one job  that had 'an enterprise agreement ' that nobody could find a copy of  , not management , the pay-master , the union , the state government department in charge of that sphere ( labour-relations and  wages ) and CERTAINLY NOT the employees that had worked there for more than 10 years ( who one might have thought would have been part of the 'agreement negotiations ')

 now in SOME companies  there have been in times of stress  salary cuts for management


----------



## divs4ever (15 June 2022)

againsthegrain said:


> who is biden?



 isn't he Jill's wife  or is that the current vice president  , maybe if someone asks him today  they will get an answer ( someone will understand )


----------



## againsthegrain (15 June 2022)

divs4ever said:


> isn't he Jill's wife  or is that the current vice president  , maybe if someone asks him today  they will get an answer ( someone will understand )




I thought that was a comedy show I was watching


----------



## divs4ever (15 June 2022)

more like an insult to one's intelligence  , and not just the US leadership either , there are several supporting characters  around the globe 

 i hope the parents of the world realize nearly all these clowns are university educated ( if we send those broke , the deranged Communists might starve )


----------



## 3 hound (15 June 2022)

divs4ever said:


> more like an insult to one's intelligence  , and not just the US leadership either , there are several supporting characters  around the globe
> 
> i hope the parents of the world realize nearly all these clowns are university educated ( if we send those broke , the deranged Communists might starve )



Biden was installed to unite the country and to appeal to the majority of centre leaning Dems & Repubs. 

In practice he aligned with the extreme left wing elements of his party and has increased the division amongst his own party and the country is more divided than ever. 

As a bonus due to his poor performance the extreme left, the moderates and the left wing media are all now distancing themselves from him....that's unifying I guess.


----------



## over9k (16 June 2022)

Alright big 75 hike from the fed, markets loved it, powell saying 75 or 50 at the next two meetings.


----------



## waterbottle (16 June 2022)

over9k said:


> Alright big 75 hike from the fed, markets loved it, powell saying 75 or 50 at the next two meetings.




Markets also bounced for a day after the original 50bp hike and then plummeted....


----------



## over9k (16 June 2022)

waterbottle said:


> Markets also bounced for a day after the original 50bp hike and then plummeted....



Yep sure did 

We've had probably 6 or 7 3-5% moves just on the day in the last month or so. There's been an absolute killing playing these swings as I don't think (I'd have to go & check) a single one has kept moving in such a fashion the next day.


----------



## sptrawler (16 June 2022)

When I stopped for my morning coffee and a read of the AFR (cost offset), I mention to the girl that a pay rise is on its way, her comment was well not really as the cost of living has already taken it.
Nothing like a cup half empty outlook, but it does show that people are being conditioned to expect more, maybe that's a good thing.


----------



## gartley (16 June 2022)

It's amazing how financial media/mainstream media is carrying on about IR and inflation now after it has already moved.  But the future was looking at them all the time in this chart this time last year.  A falling wedge on the long term chart of the 2yr yield which could have only meant a very sharp reversal........


----------



## over9k (16 June 2022)

gartley said:


> It's amazing how financial media/mainstream media is carrying on about IR and inflation now after it has already moved.  But the future was looking at them all the time in this chart this time last year.  A falling wedge on the long term chart of the 2yr yield which could have only meant a very sharp reversal........
> 
> View attachment 142934



Half our current predicament was caused by the russian invasion. This isn't to say things weren't inflating before, but they really took off with the sanctions (cutoff) of russian oil.


----------



## JohnDe (16 June 2022)




----------



## 3 hound (16 June 2022)

over9k said:


> Half our current predicament was caused by the russian invasion. This isn't to say things weren't inflating before, but they really took off with the sanctions (cutoff) of russian oil.



We did not cause Putin to invade Ukraine but we did cause our own economies to tank and force increasing amounts of pain on ourselves by choosing to sanction Putin.

So basically I don't blame Putin on our current economic situation, we are doing this to ourselves via our leaders who are immune to the consequences of their actions.

How many more times do we need to here a politician gloat that they don't care how much fuel costs, 'I drive a Tesla" ...etc.  

it's the 2022 version of let them eat cake


----------



## over9k (16 June 2022)

3 hound said:


> We did not cause Putin to invade Ukraine but we did cause our own economies to tank and force increasing amounts of pain on ourselves by choosing to sanction Putin.
> 
> So basically I don't blame Putin on our current economic situation, we are doing this to ourselves via our leaders who are immune to the consequences of their actions.



So how should we be responding to the invasion? Call him naughty bad man and that's it?


----------



## 3 hound (16 June 2022)

over9k said:


> So how should we be responding to the invasion? Call him naughty bad man and that's it?



You are more than welcome to go fight if you feel that strongly about it....leave me out of it thanks.

May I ask out of all the recent and current conflicts why is it this one that has got you so involved. 

Did you need the msn to tell you it is bad???

Are you on those people that 'support the latest thing".

I know clowns with Ukraine flags all over their car, house, socials that can't point to it on a map.


----------



## over9k (16 June 2022)

3 hound said:


> You are more than welcome to go fight if you feel that strongly about it....leave me out of it thanks.
> 
> May I ask out of all the recent and current conflicts why is it this one that has got you so involved.
> 
> ...



You're going to have to elaborate, what do you mean "so involved"? 

I am no leftist.


----------



## over9k (16 June 2022)

Getting back on topic: 

NDX futures pushing 2.5% into the red so swing plays are abounding yet again


----------



## 3 hound (16 June 2022)

over9k said:


> You're going to have to elaborate, what do you mean "so involved"?
> 
> I am no leftist.



Probably best to discuss in another thread devoted to the topic.


----------



## divs4ever (16 June 2022)

JohnDe said:


> View attachment 142947



 wait until it knocks on the door marked BONDS


----------



## divs4ever (16 June 2022)

3 hound said:


> You are more than welcome to go fight if you feel that strongly about it....leave me out of it thanks.
> 
> May I ask out of all the recent and current conflicts why is it this one that has got you so involved.
> 
> ...



 having lived through the Cuban Missile Crisis  , and those pointless 'duck and cover ' drills ( in wooden school buildings )

 i find the current history amusing ( especially with all those US nuclear tests on it's own soil  and some other poor island nations ) one side says it's fine to blow up Pacific Islands ( that includes you too France )  and the other side says KEEP YOUR DISTANCE ( this time )


----------



## divs4ever (16 June 2022)

BTW the BIG NASTY BOMB is the DEBT bomb which threatens to wipe out most civilization  as we know it  , even in Africa


----------



## waterbottle (16 June 2022)

Awaiting BoE interest rate decision today at 10pm... GDP Now by NYFed is estimated at 0% and trending down... Is possible that the IR curve will begin accelerating i.e. 75 no today, then100bp next, then 125bp etc..

All eyes on BoE to see if they follow the Feds lead


----------



## over9k (16 June 2022)

Europe's inflationary pressures are even worse so it wouldn't surprise me at all.


----------



## sptrawler (16 June 2022)

divs4ever said:


> BTW the BIG NASTY BOMB is the DEBT bomb which threatens to wipe out most civilization  as we know it  , even in Africa



He who has the most manufacturing, the most control over their people and the most consumables to sell wins. Lol


----------



## 3 hound (16 June 2022)

sptrawler said:


> He who has the most manufacturing, the most control over their people and the most consumables to sell wins




This is the CCP version of the  Lord's prayer.


----------



## sptrawler (16 June 2022)

3 hound said:


> This is the CCP version of the  Lord's prayer.



Yes we need their cars, fridges, furniture, solar panels, electric motors, electric cars, face masks, well just about everything.
They need our raw materials, or Indonesia's raw materials, or Brazil's raw materials, or Africa's raw materials.
We used to make everything, in the 1970's.


----------



## divs4ever (16 June 2022)

sptrawler said:


> He who has the most manufacturing, the most control over their people and the most consumables to sell wins. Lol



 that sounds like China  , although Russia doesn't need to import much , so it won't be a pushover , like say the current UK


----------



## over9k (16 June 2022)

Looking like an absolute slaughter coming up tonight lads


----------



## 3 hound (16 June 2022)

sptrawler said:


> Yes we need their cars, fridges, furniture, solar panels, electric motors, electric cars, face masks, well just about everything.
> They need our raw materials, or Indonesia's raw materials, or Brazil's raw materials, or Africa's raw materials.
> We used to make everything, in the 1970's.



I really thought the pandemic was the great oh f*"k moment where everybody came to the exact same revelation that we don't have the manufacturing capability to ensure our own survival as a society.

Fast forward to now and alas it's like the pandemic never happened and we are straight back into global warming mental illness and increasing the welfare state. In fact it's worse, printing money has become the default solution to every problem.


----------



## divs4ever (16 June 2022)

well several options  expire  on Friday  so it might be hectic


----------



## divs4ever (16 June 2022)

3 hound said:


> I really thought the pandemic was the great oh f*"k moment where everybody came to the exact same revelation that we don't have the manufacturing capability to ensure our own survival as a society. Alas it's like the pandemic never happened and we are straight back into global warming mental illness and increasing the welfare state. In fact it's worse, printing has become the default solution to every problem.



 in March 2020   , yes same here , but by April  i was starting smell a deceased rodent 
 mind you , i had underlying health issues and was watching the virus  and medical folks  closely  right from the first couple of days of Chinese lock-downs in Wuhan  .. which was in JANUARY 2020  , but realized the West had largely lost the plot between January and March ( and even today )


----------



## sptrawler (16 June 2022)

3 hound said:


> I really thought the pandemic was the great oh f*"k moment where everybody came to the exact same revelation that we don't have the manufacturing capability to ensure our own survival as a society.
> 
> Fast forward to now and alas it's like the pandemic never happened and we are straight back into global warming mental illness and increasing the welfare state. In fact it's worse, printing money has become the default solution to every problem.



Yes now there is no such thing as hard times, it is just a failing of Government to supply support, god knows where this will end.
My guess, Mandarin becoming a compulsory subject, in primary school.
I would love to see an ICAC set up, to check the media and its representatives, personally I think it would be far more beneficial, than one for the Govt ATM.


----------



## 3 hound (16 June 2022)

sptrawler said:


> Yes now there is no such thing as hard times, it is just a failing of Government to supply support, god knows where this will end.
> My guess, Mandarin becoming a compulsory subject, in primary school.



If you love your kids teach them to speak Chinese.


----------



## over9k (16 June 2022)

3 hound said:


> printing money has become the default solution to every problem.



Yeah, helicopter money is the next step. There's been a small one already but they're going to get bigger & bigger.


----------



## sptrawler (16 June 2022)

over9k said:


> Yeah, helicopter money is the next step. There's been a small one already but they're going to get bigger & bigger.



My guess, there will be no more helicopter money, China and Russia are relying on that to undermine the US$, I think this will be a rough ride for anything that isn't underpinned by either the fiat system or a tradable commodity. Just my guess.
Another tech wreck on the way IMO.


----------



## moXJO (16 June 2022)

China's got a demographic problem. They got their own issues.

 The rest of Asia is the interesting part.


----------



## bluekelah (17 June 2022)

sptrawler said:


> Yes we need their cars, fridges, furniture, solar panels, electric motors, electric cars, face masks, well just about everything.
> They need our raw materials, or Indonesia's raw materials, or Brazil's raw materials, or Africa's raw materials.
> We used to make everything, in the 1970's.



The Altona made V6 toyota camry/aurion. Damn those were some of the best cars ever made..

And I do believe that the world will be moving into some form of gold standard / commodity backed digital currency payment system.

Whether or not China becomes the next economic superpower remains to be seen. They have a shrinking/ageing demographic and balloon and mountains of debt, much like Japan at the start of the 1990s. They might very well end up as Japan 2.0. 

History repeats and people just dont learn...


----------



## divs4ever (17 June 2022)

moXJO said:


> China's got a demographic problem. They got their own issues.
> 
> The rest of Asia is the interesting part.



yes , i am preferring India , and maybe Vietnam which despite their own problems look to have better growth potential  .
the extra one i am watching is Korea  which i think will try to unify ( North and South )  for Korea this would be long and painful ( think Germany after the fall of the Berlin Wall ) but possibly a  good arena for long term investment .


----------



## qldfrog (17 June 2022)

divs4ever said:


> yes , i am preferring India , and maybe Vietnam which despite their own problems look to have better growth potential  .
> the extra one i am watching is Korea  which i think will try to unify ( North and South )  for Korea this would be long and painful ( think Germany after the fall of the Berlin Wall ) but possibly a  good arena for long term investment .



But j thjnk for rhe time being next 2 to 3 years,the aim is survival and protection of some wealth to allow investing in these


----------



## over9k (17 June 2022)

over9k said:


> Looking like an absolute slaughter coming up tonight lads



Oooooh yep


----------



## divs4ever (17 June 2022)

qldfrog said:


> But j thjnk for rhe time being next 2 to 3 years,the aim is survival and protection of some wealth to allow investing in these



 but i have had an eye on ( financial ) survival  since 2012  , for me this is more a test of my strategy  under duress  , so while i will still look for opportunities  for solid div. returns  , i am also looking  for  new growth areas  and also distressed stocks  with potential to survive and consolidate   in the coming harsh times 

 i guess that is my twist to being a contrarian


----------



## over9k (17 June 2022)

sptrawler said:


> My guess, there will be no more helicopter money, China and Russia are relying on that to undermine the US$, I think this will be a rough ride for anything that isn't underpinned by either the fiat system or a tradable commodity. Just my guess.
> Another tech wreck on the way IMO.



Both of those countries are in an absolute state much worse than USA trawler, I was more talking a monetisation of the debt kind of thing. 

Literally print money, give it to the populace. None of this wage rise business.


----------



## over9k (17 June 2022)

And another order filled while I was at the gym again, this time at 460


----------



## waterbottle (17 June 2022)

Big dumps overnight. 

RIP ASX


----------



## over9k (17 June 2022)

NDX futures back into the green by 1% and counting. 

Almost as if markets overdid it yesterday hey?


----------



## eskys (17 June 2022)

Am wondering if it's treat or trick


----------



## over9k (17 June 2022)

eskys said:


> Am wondering if it's treat or trick



It's volatility. Just run it.


----------



## eskys (17 June 2022)

Yes, will do that, thank you


----------



## waterbottle (17 June 2022)

I wouldn't read too much into it. US markets have a habit (particularly in the past few months) of being up 1% only to end the session down 3%   
I think the GDPNow figures will be key to watch in the coming weeks. The trend is negative!


----------



## over9k (17 June 2022)

waterbottle said:


> I wouldn't read too much into it. US markets have a habit (particularly in the past few months) of being up 1% only to end the session down 3%
> I think the GDPNow figures will be key to watch in the coming weeks. The trend is negative!



My point was just that when I mentioned how we saw the big move on the fed hike and then a plummet (like all the other times) that we generally aren't seeing two big move (in the same direction) days in a row.

So an FNGU buy yesterday is (currently) looking like a ~4.5% gain at open today. FNGD was ~16% the day before. FNGU was ~12% the day before that.

So that's more than 30% in three days just buying on the red and selling on the green to then bet back against the market the very next day.


----------



## divs4ever (17 June 2022)

waterbottle said:


> I wouldn't read too much into it. US markets have a habit (particularly in the past few months) of being up 1% only to end the session down 3%
> I think the GDPNow figures will be key to watch in the coming weeks. The trend is negative!




 i suspect the Fed ( or it's proxies )  are buying ( or spoofing ) futures markets before the US market opens


----------



## over9k (17 June 2022)

Lots of talk about the balance sheet just being a passive runoff now.


----------



## divs4ever (17 June 2022)

over9k said:


> Lots of talk about the balance sheet just being a passive runoff now.




 yes i am seeing those opinions as well  , it will be really scary if that is true ( and the market is having  reluctance to buy , already )


----------



## over9k (18 June 2022)

divs4ever said:


> yes i am seeing those opinions as well  , it will be really scary if that is true ( and the market is having  reluctance to buy , already )



Why scary?


----------



## over9k (18 June 2022)

over9k said:


> My point was just that when I mentioned how we saw the big move on the fed hike and then a plummet (like all the other times) that we generally aren't seeing two big move (in the same direction) days in a row.
> 
> So an FNGU buy yesterday is (currently) looking like a ~4.5% gain at open today. FNGD was ~16% the day before. FNGU was ~12% the day before that.
> 
> So that's more than 30% in three days just buying on the red and selling on the green to then bet back against the market the very next day.



FNGU up ~8% at the open. There's nothing to this.


----------



## divs4ever (18 June 2022)

over9k said:


> Why scary?



 what if all those securities not catching a bid  are the result of widespread reluctance to buy  ,  so far  the Fed is NOT buying ( so they tell us ) but not SELLING ( just letting them mature ) China  is not buying so much  ( no surprise there ) Japan is holding less ( but heck they  had some nasty problems at home )

 so if the Fed is not buying , China is buying less ( or none ) Japan is buying less , that is the three biggest buyers ( in recent times ) Russia will NOT be buying ( anytime soon )  , that used to be about the No. 8 foreign buyer buyer  ,   BUT the Treasury bonds are allegedly  the world's most liquid security ( but now there is a struggle to sell them at a fair price )

 if nobody wants Treasury Bonds as collateral on loans  , well we saw that in September 2019 and we got Repo Madness  .. now what if the Fed has a week off and DOESN'T come to the rescue , this time 

 if September 2019 was scary  , wait until the Fed refuses to answer the phone 


 in that case  two of the biggest extortionists step into the game  the IMF and World Bank  ( with  Warren Buffet getting  some nice cherries as well )


----------



## over9k (18 June 2022)

I believe the idea is to quite deliberately just let them mature divs.


----------



## over9k (18 June 2022)

Meanwhile, another NRGU buy topped up (at 365 this time) while I was busy doing something else again.


----------



## divs4ever (18 June 2022)

over9k said:


> I believe the idea is to quite deliberately just let them mature divs.



 that is what i understand is to happen  , but after they have had to swivel their plans so often ( since 2018 )   i keep other plans handy on the shelf


----------



## divs4ever (18 June 2022)

Brits Suffer Pay Cut As Inflation Outpaces Wage Growth​





						Brits Suffer Pay Cut As Inflation Outpaces Wage Growth | ZeroHedge
					

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero




					www.zerohedge.com
				




 yep , pretty much as i remember it  in the 1970's  , the upside was  i had a mortgage yo pay  and had to find creative ways to increase income ( decades before 'side-hustles ' become fashionable )

 but DON'T take it for a granted there will be no new twists  ( it is always ' different this time ' until history proves it wasn't )


----------



## qldfrog (19 June 2022)

Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.

Ronald Reagan...
Might have been quited before .. did not check but so true


----------



## 3 hound (19 June 2022)

qldfrog said:


> Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.
> 
> Ronald Reagan...
> Might have been quited before .. did not check but so true




Everyone loves the early stages of an inflationary cycle - random guy on internet.


----------



## over9k (19 June 2022)

3 hound said:


> Everyone loves the early stages of an inflationary cycle - random guy on internet.



"Everyone's a genius in a bull market"


----------



## noirua (20 June 2022)

Milton Friedman - Simple English Wikipedia, the free encyclopedia
					






					simple.wikipedia.org


----------



## over9k (21 June 2022)

Here's a post of absolute hilarity for you lads: 


Rising energy costs are effecting spare cash for absolutely everything but apparently outside of crypto the single biggest crash we've seen is in, get this, ONLYFANS SUBSCRIPTIONS. 

Apparently the rising costs of living are starting to bite so much that simps the world over are having to cancel their monthly few bucks to their favourite thot as they now need to free up the cash to pay their bills and the poor girls have seen their "revenue" drop by more than half. 

_








						OnlyFans models, sex workers feel pinch of sluggish economy: ‘I’m working harder than ever’
					

The plunging economy has been hard on one particular sector — sex workers who say that decades-high inflation has forced their clients to cut back on discretionary spending. Allie Rae, a 38-y…




					nypost.com
				




"The plunging economy has been hard on one particular sector — sex workers who say that decades-high inflation has forced their clients to cut back on discretionary spending.

Allie Rae, a 38-year-old Massachusetts woman who left her $84,000-a-year nursing job to earn a monthly six-figure income on OnlyFans, told The Post on Friday that she and other online creators have seen their incomes take a hit recently.

“Many top creators are hurting really bad,” Rae said. “It’s definitely something that’s happening.”

Rae, who during the pandemic earned as much as $200,000 a month, told The Post that her income has fallen 25% in recent weeks. Other OnlyFans performers have seen their incomes drop by as much as 50%, she said.

“My traffic has been down a lot,” she said. *“I’m working harder than I have ever been.*”_



The humanity! 

Won't someone think of the thots?


----------



## gartley (21 June 2022)

over9k said:


> Half our current predicament was caused by the russian invasion. This isn't to say things weren't inflating before, but they really took off with the sanctions (cutoff) of russian oil.






over9k said:


> Half our current predicament was caused by the russian invasion. This isn't to say things weren't inflating before, but they really took off with the sanctions (cutoff) of russian oil.



There are those who look for  reasons as to why markets move.....    I am not one of them.  Nevertheless it never ceases to amaze over and over again the timing of geo political and even short term fundemental events with price pattern formations and cycles.
In this case this pattern had been forming for quite a while ( have a look at the earlier posted charts on your favourite proprty price thread) and long before the war. This was going to happen either way, with or without a war. If it was not the war it would have been something else


----------



## divs4ever (21 June 2022)

THE SUPER CYCLE HAS RETURNED​


 now i would suggest the super-cycle is already here  , and i wonder if it is close to peaking  for some commodities


----------



## mullokintyre (21 June 2022)

RBA Governor Lowe has admitted that the RBA has suffered reputational damage  in The Australian


> The Reserve Bank is unlikely to target a bond yield in the future after suffering “reputational damage” from a “disorderly” exit from the policy last year, a review of the program has found.
> Bond purchases are likely to be the preferred way of insuring against “very bad economic outcomes” at a time when the already low level of interest rates limited the scope for lowering the cash rate.
> 
> While the yield curve target succeeded in achieving its objectives of lowering funding costs and supporting the provision of credit to the economy, “the exit in late 2021 was disorderly and associated with bond market volatility and some dislocation in the market.”
> A target for the yield on three-year Australian government bonds of 0.25 per cent was set on March 19 2020. The policy was abandoned in November 2021 amid sustained upward pressure on the yield in the market as traders bet that interest rates would rise.



Unfortunately, he does seem to be continuing down an unsustainable path.
From The Australian



> RBA governor *Philip Lowe* has played down fears that climbing interest rates here and abroad will send Australia into a recession.
> 
> "I don’t see a recession on the horizon here," Dr Lowe told an event in Sydney this morning.
> 
> ...



NSW just announced a pre election budget that has  tripled the deficit to 11.3 billion, with heroic forecasts that it will return to surplus  mid decade. Yeah, in ya dreams Kean.
Every other state is running deficits, plus with all the spending announced by the new Federal government likely to further increase an already deficit heavy federal budget, how can he not expect inflation to just keep going up? 
Wages pressure is rife, and with so few people looking for work, employees can be safe that they can get a  good wage rise either with their existing employer or with another one.
As for recession, with all the government spending, we may avoid  one, but it will likely be one of those "technical recessions".
Similar to "transitonary inflation".
Mick


----------



## divs4ever (21 June 2022)

mullokintyre said:


> RBA Governor Lowe has admitted that the RBA has suffered reputational damage  in The Australian
> 
> Unfortunately, he does seem to be continuing down an unsustainable path.
> From The Australian
> ...



 aren't the other states ( apart from NSW  )  governed by the ALP ??  , if so history shows those other states will run a deficit  UNLESS they sell off some major assets 

 unless it is truly different this time wages never catch up to inflation , even when inflation cools down ( pension rises normally lag as well )

 wages normally get the blame  , but usually it is government and Central Bank policies/regulations  that are the primary cause  , but wage rises are the only costs businesses  can resist the increases  , by either cutting staff  or hours worked


----------



## mullokintyre (21 June 2022)

divs4ever said:


> aren't the other states ( apart from NSW  )  governed by the ALP ??  , if so history shows those other states will run a deficit  UNLESS they sell off some major assets
> 
> unless it is truly different this time wages never catch up to inflation , even when inflation cools down ( pension rises normally lag as well )
> 
> wages normally get the blame  , but usually it is government and Central Bank policies/regulations  that are the primary cause  , but wage rises are the only costs businesses  can resist the increases  , by either cutting staff  or hours worked



The shade of political party is immaterial, they all are in deficit bar WA.
Pretty much all governments have embraced the MMT theory
They are all followers of the  mantra  that "Deficits don't matter".
Until they do.
Mick


----------



## over9k (21 June 2022)

gartley said:


> There are those who look for  reasons as to why markets move.....    I am not one of them.  Nevertheless it never ceases to amaze over and over again the timing of geo political and even short term fundemental events with price pattern formations and cycles.
> In this case this pattern had been forming for quite a while ( have a look at the earlier posted charts on your favourite proprty price thread) and long before the war. This was going to happen either way, with or without a war. If it was not the war it would have been something else



Perhaps putin deliberately did it at a time when he knew the sanctions would be the most painful (and therefore least likely) to implement?


----------



## 3 hound (21 June 2022)

You can stop worrying about inflation, labour is in which means out with government spending......


----------



## over9k (21 June 2022)

I'm actually quite interested to see what they're going to do with this sh!tshow to be honest.


----------



## divs4ever (21 June 2022)

over9k said:


> I'm actually quite interested to see what they're going to do with this sh!tshow to be honest.



 blame somebody else .. just like always 

 by the way   , the only tested and proven  way out is for a MAJOR war   , to distract and embarrass  those poor fools who lent the government money 

WHAT ISN'T FALLING APART? W/JOHN RUBINO 6 20 22​


----------



## 3 hound (21 June 2022)

divs4ever said:


> blame somebody else .. just like always




Trump?


----------



## 3 hound (21 June 2022)

From the geniuses who bought us "transitory inflation", may I present -  🥁 roll -  "recession is not inevitable".


----------



## divs4ever (21 June 2022)

3 hound said:


> Trump?



 Musk , Putin ,  or at worst case an underling ( not very wise they have the potential to totally rat you out )


----------



## over9k (21 June 2022)

__





						Bloomberg - Are you a robot?
					





					www.bloomberg.com
				




_The chief executive of Kuwait’s state oil company said a $30 per barrel “war premium” has been built into the cost of oil. 

“I see a war premium of about $30 in the price right now,” Kuwait Petroleum Corp.’s Sheikh Nawaf Al-Sabah told Bloomberg TV on the sidelines of the Qatar Economic forum on Tuesday. There’s little sign of demand destruction in oil markets because of high prices, although growth is slowing.

Oil prices have soared almost 50% this year to around $110 a barrel, mainly because of the fallout from Russia’s invasion of Ukraine. Exxon Mobil Corp. said Tuesday in Doha oil markets may remain tight for three to five years largely due to under-investment since the pandemic began.

Kuwait Petroleum’s CEO also said European buyers are asking about more refined oil from the country, partly in anticipation of its Al Zour refinery coming fully onstream. “We’re getting more calls for products,” he said. “By the end of the year, we’ll have about 615,000 barrels of oil a day being converted into mostly diesel and very low sulphur fuel oil.”...

Exxon Mobil Corp. said global oil markets may remain tight for another three to five years largely because of a lack of investment since the pandemic began.

It’ll take time for oil firms to “catch up” on the investments needed to ensure there’s enough oil supply, Chief Executive Officer Darren Woods said at the Qatar Economic Forum on Tuesday... 

Woods was speaking in Qatar, which is among the world’s biggest exporters of liquefied natural gas and one of few nations that can substantially replace Russian gas supplies to Europe.  Firms including ConocoPhillips are investing in a $29 billion project to boost Doha’s exports. 

Exxon is one of the bidders and Qatari Energy Minister Saad Al-Kaabi, speaking alongside Woods, said the US firm would get a stake. The project is one of the largest in the gas industry and state-controlled Qatar Energy is scheduled to formally announce the deal with Exxon later on Tuesday._


Looking like a good time to buy some GUSH


----------



## 3 hound (21 June 2022)

From the geniuses who bought you "transitory inflation", may I present -  🥁 roll  "recession is not inevitable".


over9k said:


> __
> 
> 
> 
> ...



Haven't these people heard of the green revolution?

They will be all out of business with zero demand for their filthy oil because solar panels, electric cars and stuff.


----------



## over9k (21 June 2022)

3 hound said:


> From the geniuses who bought you "transitory inflation", may I present -  🥁 roll  "recession is not inevitable".
> 
> Haven't these people heard of the green revolution?
> 
> They will be all out of business with zero demand for their filthy oil because solar panels, electric cars and stuff.



The more people keep thinking this the better - just take a look at coal over the last 6 months


----------



## Tropico (21 June 2022)

An interesting article from Reuters on shipping costs and the affect on inflation.
This just confirms my thought that inflation is going to continue to rise at an increasing rate.
I might be wrong but did the RBA and US Fed indicate that interest rates will be 3% by the end of 2022?
They are still behind the 8 ball with interest rates, chasing the accelerating inflation.
Even so, the shipping magnates are making a fortune.


----------



## over9k (21 June 2022)

Tropico said:


> An interesting article from Reuters on shipping costs and the affect on inflation.
> This just confirms my thought that inflation is going to continue to rise at an increasing rate.
> I might be wrong but did the RBA and US Fed indicate that interest rates will be 3% by the end of 2022?
> They are still behind the 8 ball with interest rates, chasing the accelerating inflation.
> Even so, the shipping magnates are making a fortune.



The speculation was 4% by the end of the year. Lowe says it's "unlikely".


----------



## divs4ever (21 June 2022)

Tropico said:


> An interesting article from Reuters on shipping costs and the affect on inflation.
> This just confirms my thought that inflation is going to continue to rise at an increasing rate.
> I might be wrong but did the RBA and US Fed indicate that interest rates will be 3% by the end of 2022?
> They are still behind the 8 ball with interest rates, chasing the accelerating inflation.
> Even so, the shipping magnates are making a fortune.




 i saw ( at one stage ) RBA rates to 2.5% ( with 3% suggested by an analyst outside of the RBA  ) by December   that by the way would be 2.5% plus GST for the  plebs 

 there is every chance RBA and Fed rates ( at current increase levels ) will only help fuel inflation  ( by raising costs/reducing productivity )


----------



## divs4ever (21 June 2022)

3 hound said:


> From the geniuses who bought you "transitory inflation", may I present -  🥁 roll  "recession is not inevitable".
> 
> Haven't these people heard of the green revolution?
> 
> They will be all out of business with zero demand for their filthy oil because solar panels, electric cars and stuff.



 the Rockefellers  exited that business sector about 3 years ago ( and virtually nobody remembers the carnage they left behind )

 BTW the Rockefellers also created the modern pharmaceutical and medical  industries  , since the Rockefellers now embrace 'Green' you should be running for the hills  ( BIG mountains )


----------



## over9k (22 June 2022)

HMMMMMMMMMMMMMM


----------



## divs4ever (22 June 2022)

over9k said:


> View attachment 143163
> 
> 
> HMMMMMMMMMMMMMM



 will be watching for data on home building materials ( and home constructions ) to add to that data


----------



## gartley (22 June 2022)

gartley said:


> There are those who look for  reasons as to why markets move.....    I am not one of them.  Nevertheless it never ceases to amaze over and over again the timing of geo political and even short term fundemental events with price pattern formations and cycles.
> In this case this pattern had been forming for quite a while and long before the war. This was going to happen either way, with or without a war. If it was not the war it would have been something else






over9k said:


> Perhaps putin deliberately did it at a time when he knew the sanctions would be the most painful (and therefore least likely) to implement


----------



## gartley (22 June 2022)

over9k said:


> Perhaps putin deliberately did it at a time when he knew the sanctions would be the most painful (and therefore least likely) to implement?



To be quite honest I say  when comes to trading the markets " who cares what Putin did"
I think this is what makes market price structures  and market cycles fascinating, as they are the language of the markets and give clues to the potential of triggers before they even happen.
The problem with triggers like war or even other economic triggers is that sometimes when they occur they move the market a lot and other times they don't.  The market patterns are a painting of the collective human growth system. 

We as traders need to be in front of the market and try and anticipate these potential moves. The declining wedge or (ending diagonal)  in the 10 yr yield was about 5 years in the making. it's very hard to time such long term pattern exactly especially when it's ending a 40 year bear market in interest rates. But we can see it's developing and that change is coming.

Interestingly economists now talking about stagflation over the next 10 years similar to the 1970's . This is a disater for mum and dad buy and holders, better a deep and brief crash. Personally  I don't think it will be another lost decade but rather lost decades.....


----------



## sptrawler (22 June 2022)

gartley said:


> Interestingly economists now talking about stagflation over the next 10 years similar to the 1970's . This is a disater for mum and dad buy and holders, better a deep and brief crash. Personally  I don't think it will be another lost decade but rather lost decades.....



As long as the buy and hold investors portfolio keeps providing a dividend, the market fluctuations can be ridden out, I still wish the MIL had bought the 1,000 CBA at $10 in 1994.
The buy and hold investor, unless they are active traders, should be sticking to shares that grow their dividend naturally as the Countries population and GDP grows IMO.
Immigration will increase, money will be poured into the transition to a renewable generation and a renewable manufacturing base, that will lead to an increase in construction and a demand for materials, which will increase the demand for labour which should form a positive feedback loop.
But I do think trading will be extremely volatile, which should help those traders with a successful system.

Just my opinion.


----------



## waterbottle (22 June 2022)

Oil seems to be following the same path as other assets - down. Recession fears are now starting to bite. 
Will be interesting to see what happens to inflation data this week from UK. Will be an indicator of how much further tightening has to go....


----------



## gartley (22 June 2022)

sptrawler said:


> As long as the buy and hold investors portfolio keeps providing a dividend, the market fluctuations can be ridden out, I still wish the MIL had bought the 1,000 CBA at $10 in 1994.
> The buy and hold investor, unless they are active traders, should be sticking to shares that grow their dividend naturally as the Countries population and GDP grows IMO.
> Immigration will increase, money will be poured into the transition to a renewable generation and a renewable manufacturing base, that will lead to an increase in construction and a demand for materials, which will increase the demand for labour which should form a positive feedback loop.
> But I do think trading will be extremely volatile, which should help those traders with a successful system.
> ...



Back in the 1970s the average buy hold ( aside from the divvy) didn't achieve much .
Incidentally IR peaked in 1981 and thereafter the stocks and real estate enjoyed the largest bull in history lasting 40 years.
Now IR is reversing that 40 year downtrend. Inflation and IR are the major part of the bull equation. 
We live in times where the younger generation only experienced  rising prices in a long term bull with rampant speculation happening almost in every asset class.
This will bo longer be the case but there will still be lot of opportunity with rallies but markets much more volatile a choppy .
As more traders become frustrated with less returns more will look to the technical side of analysis and other methodologies


----------



## over9k (22 June 2022)

gartley said:


> Back in the 1970s the average buy hold ( aside from the divvy) didn't achieve much .
> Incidentally IR peaked in 1981 and thereafter the stocks and real estate enjoyed the largest bull in history lasting 40 years.
> Now IR is reversing that 40 year downtrend. Inflation and IR are the major part of the bull equation.
> We live in times where the younger generation only experienced  rising prices in a long term bull with rampant speculation happening almost in every asset class.
> ...



QFT


----------



## over9k (22 June 2022)

waterbottle said:


> Oil seems to be following the same path as other assets - down. Recession fears are now starting to bite.
> Will be interesting to see what happens to inflation data this week from UK. Will be an indicator of how much further tightening has to go....



A lot. There's a lot of speculation now that central banks might try to get "ahead of the curve" in anticipation of further rising energy costs. 

Doing so means recession. This IS stagflation folks, make no doubt about it.


----------



## waterbottle (22 June 2022)

over9k said:


> A lot. There's a lot of speculation now that central banks might try to get "ahead of the curve" in anticipation of further rising energy costs.
> 
> Doing so means recession. This IS stagflation folks, make no doubt about it.



Yup, watching those numbers atm. 

Not sure what the best play is here, but I'm staying in USDs for now.


----------



## moXJO (22 June 2022)

Anyone else been watching bank of Japan?


----------



## Dona Ferentes (22 June 2022)

moXJO said:


> Anyone else been watching bank of Japan?




What were you doing on Friday afternoon at 4.30 pm?

I was watching Haruhiko Kuroda.

I couldn’t understand a word he was saying, but I was watching his every move and hearing every mumble.

In fact there was a lot of mumbling.

Mumble, mumble, mumble…yield curve control…mumble, mumble, mumble…yield curve control.

The words yield curve control were said in English.

And then he started giggling.

Yes, Kuroda was giggling.

I watched $/Yen and it flickered, wobbled.

Why was the mighty Kuroda giggling?

Fortunately I had a live Bloomberg blog that was following the press conference and providing an English translation.

After an FX eternity the explanation came through on the Bloomberg Blog.

A reporter had asked if the governor can say definitely if a limit to yield curve control will come in the future.

Kuroda immediately got the giggles and his typically permanent poker face broke into a huge grin.

He replied, “_that’s something of a philosophical question, but its possible to keep yield curve control going even as central banks elsewhere tighten._”

There you have it.

This man has not been shaken, or even stirred in the slightest, by the radical actions of his counterparts across the world.

He remains resolute and Churchillian and will fight them on the beaches, and in the fields and in the streets.

The battle between the bond vigilantes and the Bank of Japan has been joined.

This epic battle will help shape and define the contours of the global financial landscape in the months ahead.

 In the meantime $/YEN reaches for the stars................


----------



## over9k (22 June 2022)

moXJO said:


> Anyone else been watching bank of Japan?



Yeeeeeeep


----------



## waterbottle (22 June 2022)

UK inflation at 9.1%, compared to 9% last month...

Looks like they'll need to go harder and follow the US Fed's lead of accelerating their interest rate hikes


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## over9k (22 June 2022)

Alright so the current dance is inflation vs recession (stagflation is when you have both and that's what they're trying to decide on) and which way the fed and powers that be want to err. As we've seen over the past week or so, after the inflation narrative was front & centre for the first half of the year, now with yellen, powell et al on record as stating they are "steadfast" in getting inflation back down to 2%, it's recession. 

What us retail trading plebs need to remain cognisant of is that it is these very inflating energy costs which are actually causing the recession. We saw energy companies just scream at the start of the year because hey, the consumer had spare cash that could be squeezed out of them. 

With interest rates now so much higher, we're now at the point of markets wondering if there's anything left to squeeze, and that's why we see prices dropping - there's just no spare cash left to demand oil. 

So we now see a seesaw - oil prices go up, costs then increase, consumers don't buy as much stuff/demand goes down, oil prices go down, stuff gets cheaper so people then start buying/doing more stuff and around and around we go. 

We obviously do not know where this is going to bottom and this is why we see the wild gyrations as the seesaw tips one way and then back the other. Hopefully everything I've pointed out so far is fairly obvious. 

What is key to note here is that these are DEMAND side movements. The big fluctuations we see are demand (or lack thereof) driven. But the TREND we see energy on, that's a supply side (lack of supply side) one, and as I've pointed out in quite a few posts going back weeks, there's really nothing to suggest any real increases to the supply side of the energy equation any time soon. 

So my play is still "buy the dip", it's just buy the dip in energy rather than tech now.


----------



## 3 hound (22 June 2022)

over9k said:


> View attachment 143189
> 
> 
> Alright so the current dance is inflation vs recession (stagflation is when you have both and that's what they're trying to decide on) and which way the fed and powers that be want to err. As we've seen over the past week or so, after the inflation narrative was front & centre for the first half of the year, now with yellen, powell et al on record as stating they are "steadfast" in getting inflation back down to 2%, it's recession.
> ...




I think the true driver behind this is that western governments want fossil fuel prices to keep increasing forever until nobody is left on the planet able or willing to buy it.

The only constraint is to avoid total economic collapse causing widespread anarchy and public uprising directly against own  governments.

The juggling act is keeping the pain going just enough to prevent chaos while forcing the transition to renewables.

There's no problem to fix, we are this way on purpose and will continue down this path until we have transitioned completely to renewables and most likely full socialism.


----------



## waterbottle (22 June 2022)

Not sure if buying the dip is going to be wise.

Every asset has started/is starting to fall based on tighter monetary policy leading to an expected recession. Oil is no exception.

The oil embargo involving Russia will eventually fade. Russians continue to export oil to China and India. Options to increase supply are being actively pursued. None of this IMO looks conducive to sustained, high prices for oil.


----------



## over9k (22 June 2022)

waterbottle said:


> Not sure if buying the dip is going to be wise.
> 
> Every asset has started/is starting to fall based on tighter monetary policy leading to an expected recession. Oil is no exception.
> 
> The oil embargo involving Russia will eventually fade. Russians continue to export oil to China and India. Options to increase supply are being actively pursued. None of this IMO looks conducive to sustained, high prices for oil.



Lower oil prices would reduce inflation, which would bounce economies back into growth again. Hence the see-saw.


----------



## Smurf1976 (23 June 2022)

waterbottle said:


> None of this IMO looks conducive to sustained, high prices for oil.



The thing about oil is it's much like something kids often try doing with escalators. 

Running up the one that's going down.

Every barrel of oil taken from any given well is one less barrel left and as pressure drops and water cut increases, production inevitably tapers off. Slowly but it happens.

Or in simpler words, it's either keep drilling or production slides which then sets up for a renewed spike in prices.

A complicating factor there being that incredibly low interest rates have themselves encouraged drilling. When stocks are at extreme values and money in the bank pays nothing, an oil well needs only to make a small profit to be worth drilling and plenty have done exactly that over the past decade. Now however, with money starting to have at least some value in terms of interest, that comes into question. A well that is marginally profitable is now competing with cash or bonds that, whilst not paying much, do at least pay something.

My thinking being that at least partly explains the sluggish resumption of drilling. Paying down debt becomes a credible alternative use of funds if you're actually going to be charged interest on it.


----------



## over9k (23 June 2022)

The oil companies all getting together and conspiring not to drill, up supply etc etc isn't exactly unrealistic either. 

There's a reason why GUSH hasn't followed NRGU nearly as high.


----------



## over9k (23 June 2022)

Powell's giving his half-yearly testimony. Republicans are on a tear. He's not wrong about this though - the yanks are the best/most insulated country probably outside of norway and the arabs. 

Doesn't mean the situation's exactly "good" though, it's just the best of a bad bunch. 

Biggest curveball still remains the U.S president curtailing some or all of yank oil exports.


----------



## over9k (23 June 2022)

over9k said:


> View attachment 143163
> 
> 
> HMMMMMMMMMMMMMM







lol


----------



## divs4ever (23 June 2022)

over9k said:


> The oil companies all getting together and conspiring not to drill, up supply etc etc isn't exactly unrealistic either.
> 
> There's a reason why GUSH hasn't followed NRGU nearly as high.



 the PROBLEM is a concerted effort by ( MAJOR ) banksters NOT to fund fossil fuel projects ( that includes SOME fund managers ) ( look no further that the WEF 'chat ' featuring Mark Carney  on how bankers were going to push forward the climate agenda 


 some those already producing (  and to some extent those with capped future producers )  can probably get by via revenue , retail shareholders , and the higher risk-taking financial instos 

 now IF there is any conspiracy  , it would be discussing future funding and demand  ( and viability of developing new assets )  




waterbottle said:


> The oil embargo involving Russia will eventually fade. Russians continue to export oil to China and India.



 Russia will NEVER sell to those  ' unfriendly nations ' again once contracts need renewal  , they are dud  , deadbeat  customers  , they never reform ( they are proven debt-addicts ) , they just aren't worth talking to 


waterbottle said:


> Not sure if buying the dip is going to be wise.



 i have been ( mostly ) lucky in oil and gas  ( TEG being the millstone ) , rather than skilled ,   i am unlikely to be  adding to the holdings ( except via DRP )  unless in exceptional circumstances  ( like BPT near 40 cents again )


----------



## divs4ever (23 June 2022)

over9k said:


> View attachment 143198
> 
> 
> Powell's giving his half-yearly testimony. Republicans are on a tear. He's not wrong about this though - the yanks are the best/most insulated country probably outside of norway and the arabs.
> ...



 the Yanks need to lock their administrations in rubber rooms


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## divs4ever (23 June 2022)

Fed's Harker says interest rates should reach above 3%, then reassess

https://www.investing.com/news/econ...es-should-reach-above-3-then-reassess-2839887

the market is ' saying the Fed is joking ' OR the Plunge Protection Team , is working like a maniac


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## qldfrog (23 June 2022)

3 hound said:


> I think the true driver behind this is that western governments want fossil fuel prices to keep increasing forever until nobody is left on the planet able or willing to buy it.
> 
> The only constraint is to avoid total economic collapse causing widespread anarchy and public uprising directly against own  governments.
> 
> ...



Watch out,if you carry on,you will be called a crazy conspiracy madman...
Been there done that.  But fully agree,it is called the Reset....


----------



## divs4ever (23 June 2022)

qldfrog said:


> you will be called a crazy conspiracy madman...



 all my life  , but the part that really irritates  , is my total lack of empathy  for those detractors  ( when i am right )


----------



## qldfrog (23 June 2022)

divs4ever said:


> all my life  , but the part that really irritates  , is my total lack of empathy  for those detractors  ( when i am right )



Trouble is being right does not prevent the ongoing damages.
I have no joy seeing people killed or maimed by their Pfizer shots for example, losing wealth on inflation or moving into ghetto trailer parks now renamed tiny houses by our woke world.... just most recent local news.
What always remains is greed power and stupidity...most economic and finance moves can be sourced back to these.


----------



## divs4ever (23 June 2022)

qldfrog said:


> Trouble is being right does not prevent the ongoing damages.
> I have no joy seeing people killed or maimed by their Pfizer shots for example, losing wealth on inflation or moving into ghetto trailer parks now renamed tiny houses by our woke world.... just most recent local news.
> What always remains is greed power and stupidity...most economic and finance moves can be sourced back to these.



but they don't listen  , or even think for themselves FIRST ,

 every now and again  i can help one or two people  go forward , i might as well give them a nudge in a positive direction

 they don't have to listen to me   there are a ( relatively ) few others  , that will warn about the same thing ( and they have been at it for decades  , NOT weeks or years )


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## 3 hound (23 June 2022)

qldfrog said:


> Watch out,if you carry on,you will be called a crazy conspiracy madman...
> Been there done that.  But fully agree,it is called the Reset....



Conspiracy theory might as well be called spoiler alerts or future facts given the last few years.

Pretty much every politician boasts about what I said in a global shift toward renewables, having trouble seeing how anyone would think it's conspiracy theory.


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## over9k (24 June 2022)

Perfect summary. Also seasonality heading into winter. Where is the bottom? Hard to say. The last two years it's been around october, but things haven't really been "normal" lately. 






Lots of dip buys to grab though


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## waterbottle (24 June 2022)

JPowell seemed upbeat in his testimony. Not like he had a choice though, so unless it's obvious, he isn't going to admit a recession is incoming. 
IMO we should be guided by data to see where this lands. UK, Canada and Japan have all released inflation numbers. None reported significant decreases despite IR hikes. 
EU, German and French CPI is being released next week, along with the US GDPNow figures on Monday. This will give us more of an idea about whether or not we're going to need bigger hikes for a longer duration and whether the US economy is tracking towards recession. 
Interestingly, economists and banks are now forecasting a recession.


----------



## 3 hound (24 June 2022)

waterbottle said:


> Interestingly, economists and banks are now forecasting a recession.




Bless them, how fortunate we are for these big brain predictions....how do they do it.


----------



## over9k (24 June 2022)

Powell's comments yesterday were "recession not inevitable". Green markets outside of banks & oil were the result. We shall see. 

Nobody has any confidence in the banks - they seem to go nowhere no matter what else is going on.


----------



## over9k (24 June 2022)

A large case of something becoming "prohibitively expensive". 

Interdastingly, when you look at the rollover in bonds, rate hike bets, oil prices etc etc etc it does look like we might have finally gotten somewhere near a bottom. There was a nice bounce at open on tuesday and it's actually remained (markets are flat since). With futures well into the green we might actually have a positive week for a change.


----------



## divs4ever (24 June 2022)

over9k said:


> Powell's comments yesterday were "recession not inevitable". Green markets outside of banks & oil were the result. We shall see.
> 
> Nobody has any confidence in the banks - they seem to go nowhere no matter what else is going on.



 the BIG banks , true  .. but SOME smaller banks ( in Australia and elsewhere ) still have some potential growth paths ( included the regularly touted mergers )

 since Powell and his henchmen keep redefining terms  ( seemingly  at whim ) i have no confidence in MOST Central Banks  , they are saying 'whatever it takes '  and hoping confidence trickery will work


----------



## sptrawler (24 June 2022)

over9k said:


> Nobody has any confidence in the banks - they seem to go nowhere no matter what else is going on.






divs4ever said:


> the BIG banks , true  .. but SOME smaller banks ( in Australia and elsewhere ) still have some potential growth paths ( included the regularly touted mergers )



In Australia the BIG banks are quasi Government institutions, so they just follow the economic sentiment, somewhat like Telstra.
I personally can't see a recession happening, unless there is a massive influx of labour from overseas, if the floodgates open well then IMO it is another recession we had to have.


----------



## Captain_Chaza (24 June 2022)

over9k said:


> View attachment 143267
> 
> View attachment 143272
> 
> ...



  I Agree!  re INFLATION!
Am I missing out on something?

Which Commodity is at its High this Weekend?

*Tough Talk from the Fed Works! 
It's All We Need*
IMHO The Inflation Game is Over
 Very Small  Interest Rates hikes from next month
Steady as She goes


----------



## over9k (24 June 2022)

Captain_Chaza said:


> I Agree!  re INFLATION!
> Am I missing out on something?
> 
> Which Commodity is at its High this Weekend?
> ...



Put a growth bet down then have you?


----------



## Captain_Chaza (24 June 2022)

over9k said:


> Put a growth bet down then have you?



I have already 
Yesterday!


----------



## waterbottle (24 June 2022)

Captain_Chaza said:


> I Agree!  re INFLATION!
> Am I missing out on something?
> 
> Which Commodity is at its High this Weekend?
> ...



Interesting. Why do you think inflation is under control? 



Captain_Chaza said:


> I have already
> Yesterday!




Do you think this is going to be a V-shaped correction though?


----------



## over9k (24 June 2022)

This is what the pointy shoes that own a lot of the media are saying now.

"We'd priced rates at 4% but we think it'll be more like 3.25-3.5 now"


UBS head at some conference is banging on about how the U.S economy has shown "tremendous resilience" and that all the rate hikes will do is return things to "trend growth". 

The media fix/narrative (pump) is now well & truly in folks.


----------



## waterbottle (24 June 2022)

We haven't even seen next quarter earnings yet...


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## over9k (25 June 2022)

waterbottle said:


> We haven't even seen next quarter earnings yet...



This is not how pump & dump works bottle lol


----------



## divs4ever (25 June 2022)

waterbottle said:


> Interesting. Why do you think inflation is under control?
> 
> 
> 
> Do you think this is going to be a V-shaped correction though?



 more likely another K-shaped ,   but am thinking a W-shape is possible ( over a U or L  for the shorter term )  too much fundamental stuff crumbling in the background as i see it 

 this is just jaw-boning taken to a new level ( IMO )


----------



## over9k (25 June 2022)

I have absolutely no idea why. No clue at all.

(Maybe they don't have any spare cash left over after all their fuel, food etc bills have skyrocketed?)


----------



## over9k (25 June 2022)

Captain_Chaza said:


> I have already
> Yesterday!



Looking like a good start to your bet chaza, mind me asking you what you bought?


----------



## Captain_Chaza (25 June 2022)

over9k said:


> Looking like a good start to your bet chaza, mind me asking you what you bought?


----------



## Captain_Chaza (25 June 2022)

A Hoisted a few LITHIUM Classifications
My Mainsail was the Magnificent but sometimes Merciless  LKE
I published my Chart and Reasoning on Thursday 23 June in my ASF thread
"Storm at Sea"
(Average Price paid 0.74c)


----------



## JohnDe (26 June 2022)

Companies with interests in countries on the verge of food, fuel and currency issues will be interesting to watch.



> *A wave of unrest is coming. Here’s how to avert some of it*
> Soaring food and fuel prices are adding to pre-existing grievances
> 
> Jesus said that man does not live by bread alone. Nonetheless, its scarcity makes people furious. The last time the world suffered a food-price shock like today’s, it helped set off the Arab spring, a wave of uprisings that ousted four presidents and led to horrific civil wars in Syria and Libya. Unfortunately, Vladimir Putin’s invasion of Ukraine has upended the markets for grain and energy once again. And so unrest is inevitable this year, too.
> ...


----------



## waterbottle (26 June 2022)

Inflation now being forecasted at 10%, although official numbers pending. This would be consistent with CPI numbers coming out of other countries. I don't see how this isn't going to end in recession-inducing interest rates if we continue on this path... 






						Inflation Nowcasting
					

The Federal Reserve Bank of Cleveland provides daily “nowcasts” of inflation for two popular price indexes, the price index for personal consumption expenditures (PCE) and the consumer price index (CPI). These nowcasts give a sense of where inflation is today. Released each business day.



					www.clevelandfed.org


----------



## noirua (27 June 2022)

JohnDe said:


> Companies with interests in countries on the verge of food, fuel and currency issues will be interesting to watch.



Yes, and now comes even deeper thoughts by Germany, France, Italy and Spain about the $6 billion per month wanted by Ukraine to rebuild - unless Russia wins. Germany is already being starved of gas from Russia. If Ukraine joins the EU then they will have certain rights that would mean the larger countries in the European block will have to put many more Euros into the pot.

All this arriving on their doorsteps just as recession bites.

So the Central Banks doing the ultimate hand outs of funds to the Banks will need to gradually want a far greater interest rate.  If the Banks can't get funds they go to their savers who will see what is happening and scour the net for the best bargains.

Eventually inflation will fall whilst interest rates rise.  So instead of savers getting up to 2% interest on their money with inflation at 10% the worm will turn. So in a few years time inflation will be 1% to 2% with interest rates at 10%.  The squeeze will be horrific.

There will be an increasing flight to the US$ though the AU$ should hold up fairly well. Most other currencies will feel a strong downdraught. Third world countries may be left to their own devices.


----------



## 3 hound (27 June 2022)

noirua said:


> If Ukraine joins the EU then they will have certain rights that would mean the larger countries in the European block will have to put many more Euros into the pot.
> 
> All this arriving on their doorsteps just as recession bites.





Strategic military decision on Putin's part??


----------



## 3 hound (27 June 2022)

Having not done any major new building construction in 20 years I was shocked to get a quote on a slab which costs more than the price of the brand new kit shed that is going onto it.

Dam concrete must have the highest inflation rate of all goods.

Anyone suggest a ball park figure one should pay per cubic metre of laid concrete....or use whatever the standard measure for quotes is.


----------



## moXJO (27 June 2022)

3 hound said:


> Having not done any major new building construction in 20 years I was shocked to get a quote on a slab which costs more than the price of the brand new kit shed that is going onto it.
> 
> Dam concrete must have the highest inflation rate of all goods.
> 
> Anyone suggest a ball park figure one should pay per cubic metre of laid concrete....or use whatever the standard measure for quotes is.



Call up the cement supply/truck places for a quote on cost of cement only. Give you an idea of how much they are ripping you with labour.


----------



## 3 hound (27 June 2022)

moXJO said:


> Call up the cement supply/truck places for a quote on cost of cement only. Give you an idea of how much they are ripping you with labour.



Unfortunately the truck,  the slab layer, the shed supplier and shed builder are essentially the same business, the joy of small town no competition.


----------



## Dona Ferentes (27 June 2022)

Jerome Powell:


> *“The Committee is acutely aware that high inflation imposes significant hardship, especially on those least able to meet the higher costs of essentials.
> The Committee's commitment to restoring price stability—which is necessary for sustaining a strong labor market—is unconditional.”*




The full report can be found here:

https://www.federalreserve.gov/monetarypolicy/2022-06-mpr-summary.htm


The market now most definitely believes that Powell is going to be super-aggressive and will implement a genuinely ‘unconditional’ policy to bring inflation down. And that a recession is unavoidable.


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## over9k (27 June 2022)

3 hound said:


> Unfortunately the truck,  the slab layer, the shed supplier and shed builder are essentially the same business, the joy of small town no competition.



There's your answer.


----------



## over9k (28 June 2022)

over9k said:


> View attachment 143295
> 
> 
> I have absolutely no idea why. No clue at all.
> ...



Anyone else a landlord/rent anything out? I've got a tenant a fortnight behind on the rent because his diesel car's now costing him more than twice as much to fill up as it used to along with food, power, heating etc bills all increasing.


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## over9k (28 June 2022)

https://fortune.com/2022/06/27/supreme-court-epa-ruling-ramifications-2022/ 

Relevant.


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## waterbottle (28 June 2022)

GDPNow figures released overnight at 0.3%. Either this is noise or the Fed has more room to attack with higher rates. 
Bank of Canada now considering a 0.75% hike for July.


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## moXJO (28 June 2022)

over9k said:


> Anyone else a landlord/rent anything out? I've got a tenant a fortnight behind on the rent because his diesel car's now costing him more than twice as much to fill up as it used to along with food, power, heating etc bills all increasing.



Yeah, there's a lot of that going around. A lot that are a month out in rent seems to be the norm.
Can still afford to get high/drunk though.
Still think rents are too high and are unsustainable in this environment. Either rents need to come down or the government will stick their nose in and make a mess.


----------



## JohnDe (28 June 2022)

moXJO said:


> Yeah, there's a lot of that going around. A lot that are a month out in rent seems to be the norm.
> Can still afford to get high/drunk though.
> Still think rents are too high and are unsustainable in this environment. Either rents need to come down or the government will stick their nose in and make a mess.




some stupid stuff going on out there at the moment.














						$400 a week to shower in the living room as Adelaide's rental crisis deepens
					

What an agent has described as a "great-sized modern bathroom," one Twitter user has suggested is a "perspex sh****g cube in the middle of your kitchen."




					www.abc.net.au


----------



## moXJO (28 June 2022)

JohnDe said:


> some stupid stuff going on out there at the moment.
> 
> View attachment 143385
> 
> ...



Nothing like taking a sht and cooking your dinner at the same time.


----------



## divs4ever (28 June 2022)

moXJO said:


> Yeah, there's a lot of that going around. A lot that are a month out in rent seems to be the norm.
> Can still afford to get high/drunk though.
> Still think rents are too high and are unsustainable in this environment. Either rents need to come down or the government will stick their nose in and make a mess.



ah , yes  addictions ... something all investors should understand  , and incorporate into investing strategies ( when possible )

 governments stick their nose in making a mess , because they need to feel important 

 as to rents coming down  there will be other factors influencing that , rates are liable to go up  as will other utility charges , costs for maintenance/repairs ( and interest if the owner  is paying a loan/mortgage on the property ) the always increasing regulations .

 am not sure rents will decline in general  as costs will increase  , owners will tend to sell rather than wear extended losses


----------



## 3 hound (28 June 2022)

JohnDe said:


> some stupid stuff going on out there at the moment.
> 
> View attachment 143385
> 
> ...



'Imagine: you’ve moved in with your partner. They’re making coffee in the morning while you’re taking a dump in the perspex shitting cube in the middle of your kitchen."

These are not John Lennon lyrics.


----------



## 3 hound (28 June 2022)

divs4ever said:


> owners will tend to sell rather than wear extended losses




Sell to who??


----------



## JohnDe (28 June 2022)

3 hound said:


> 'Imagine: you’ve moved in with your partner. They’re making coffee in the morning while you’re taking a dump in the perspex shitting cube in the middle of your kitchen."
> 
> These are not John Lennon lyrics.




After a Chili Bean and beer session with mates the night before


----------



## Dona Ferentes (28 June 2022)

JohnDe said:


> some stupid stuff going on out there at the moment.
> 
> View attachment 143385
> 
> ...



And_ Tiny homes_ on wheels .... they're called caravans, aren't they?


----------



## 3 hound (28 June 2022)

JohnDe said:


> After a Chili Bean and beer session with mates the night before




Sharing is caring.


----------



## 3 hound (28 June 2022)

You will own nothing and enjoy it;

https://www.designboom.com/design/brownstone-shared-housing-capsulte-pods-shared-living-05-05-2022/

Welcome to socialist hell.


----------



## JohnDe (28 June 2022)

3 hound said:


> You will own nothing and enjoy it;
> 
> https://www.designboom.com/design/brownstone-shared-housing-capsulte-pods-shared-living-05-05-2022/
> 
> Welcome to socialist hell.


----------



## mullokintyre (28 June 2022)

Back in 2017, the ABC wrote that over 11% of the then estimated 10 million Australian homes were vacant.
Since the Covid pandemic, I am going to bet that the number has increased.
Many regional towns and cities  have  had prices driven up by city based folk looking to get an escape property  because house prices are a fraction of what they are in inner city  areas. 
I have witnessed the phenomenon in our town with so many absentee owners.
Rents will never come down when 
(a) people can make a motza on Airbnb
(b) people are not prevented from owning  more than one house which is not rented out at least for 9 months in any year.

 In the  the article quoted above ,  the following statement is attributed to Chris Bowen


> Federally, Opposition treasury spokesman Chris Bowen recently backed a standard vacant dwelling tax across all the nation's major cities.



Be interesting to see if the Albo government  copies the Victorian model.
According to the same article 


> The new policy is geared towards Melbourne's inner and middle suburbs. It will not apply to holiday homes, city units used for work, deceased estates or homes owned by Victorians who move temporarily overseas.



Don't know why it does not apply to all properties, but I guess a lot of the members in parliament have a holiday house or two.
Mick


----------



## 3 hound (28 June 2022)

mullokintyre said:


> Back in 2017, the ABC wrote that over 11% of the then estimated 10 million Australian homes were vacant.
> Since the Covid pandemic, I am going to bet that the number has increased.
> Many regional towns and cities  have  had prices driven up by city based folk looking to get an escape property  because house prices are a fraction of what they are in inner city  areas.
> I have witnessed the phenomenon in our town with so many absentee owners.
> ...




The problem with the surge in city folk buying a house in rural areas is the reality of living in rural towns typically doesn't end up being anything they want so they rent out their place thinking they will get some nice country folk paying down their investment.....in 2022 it's more likely to end up a meth cook-house.

I can actually remember councils selling rural house blocks for $1 just to get people to live in the towns.


----------



## mullokintyre (28 June 2022)

3 hound said:


> The problem with the surge in city folk buying a house in rural areas is the reality of living in rural towns typically doesn't end up being anything they want so they rent out their place thinking they will get some nice country folk paying down their investment.....in 2022 it's more likely to end up a meth cook-house.
> 
> I can actually remember councils selling rural house blocks for $1 just to get people to live in the towns.



The houses are not being rented in my area, they just lie vacant until the owners and/or their friends come up for a few days away from Melbourne.
Then they complain cos the cafe is not open 24/7 for their convenience.
Or the IGA is not 24/7.
The list goes on.
Real problem is they contribute nothing to the community.
Don't join the CFA, or Rotary, or Lions, or the Community group, or the meals on wheels, the blue light disco, the CWA, teh local school board,  the fishing club, the old car club etc etc.
Mick


----------



## qldfrog (28 June 2022)

But here come the saviours a grenwashing of US trailerparks








						'No bills to pay' after rent: Builder seeks approval for 34 self-contained tiny homes to tackle housing crisis
					

A council is considering an application for the construction of dozens of sustainable tiny homes on the Sunshine Coast as the housing crisis continues to worsen.




					www.abc.net.au


----------



## 3 hound (28 June 2022)

mullokintyre said:


> Don't join the CFA, or Rotary, or Lions, or the Community group, or the meals on wheels, the blue light disco, the CWA, teh local school board, the fishing club, the old car club etc etc.




To be fair, almost no millennials are joining community groups so there's that as well.


----------



## qldfrog (28 June 2022)

3 hound said:


> To be fair, almost no millennials are joining community groups so there's that as well.



It is a different subject but i am more and more dispirited by voluntering.
You are just taken as granted by selfish a$$holes or exploted for profit and prestige by a few:
Sport clubs, then later fire brigade, even blood donation where i gave up giving so far.and can add lately a local chamber of Commerce.
A nation of entitled twats moreover with a tall poppy syndrom...


----------



## againsthegrain (28 June 2022)

There is a new definition to a selfish scmubag,  rent increases? 😂 how are they even going to pay any rent


			https://www.news.com.au/finance/work/careers/choosing-not-to-suffer-why-young-people-are-rejecting-the-grind/news-story/993f1a41124fd45463264cfccf527bcc


----------



## 3 hound (28 June 2022)

againsthegrain said:


> There is a new definition to a selfish scmubag,  rent increases? 😂 how are they even going to pay any rent
> 
> 
> https://www.news.com.au/finance/work/careers/choosing-not-to-suffer-why-young-people-are-rejecting-the-grind/news-story/993f1a41124fd45463264cfccf527bcc




Millennials as of last census are officially a bigger generation than boomers this will give them the same electoral power boomers had, I guess when their "feminine energy" runs out they can just vote in someone to bail them out of any financial or other hardship.

Great work if you can get it.

Given how infertile the millennials are and how much they worship the soft life not sure how they will get on if they are ever challenged for resources by the vast hungry majority of people around the world living the hard life.

I used to subscribe to the "slow movement" back in the day where you sought out handmade products, wore only natural fibre, ate whole unprocessed foods, bought food and other items in open markets directly from the person who produced it  using cash or barter, read books, wrote letters, rode bicycle, walked or caught public transport, listened to live acoustic music only, rejected as many  personal tech devices as possible, played board games & non competitive physical  sport etc, etc...it was a good time as a single young bloke but not real practical if you have a family mortgage etc.


----------



## 3 hound (28 June 2022)

Macron bails up Biden and asks him to increase oil production - very bizarre exchange.

Go to 1.30.




Our boy Biden looks completely confused and clueless and remains speechless until his handlers get him out there.....the most powerful man on earth.


----------



## qldfrog (29 June 2022)

3 hound said:


> Macron bails up Biden and asks him to increase oil production - very bizarre exchange.
> 
> Go to 1.30.
> 
> ...




Or maybe we should all cry... luckily,we can blame it on Trump... can't we?


----------



## over9k (29 June 2022)

HMMMMMMMM. Energy screaming up when everything else is slaughtered you say?





Quite a bit off the lows now 








Annoying, bought some NRGU & GUSH right before the drop/as it looked like turning 




It's not a very long trend admittedly but by the last two graphs we do appear to now be on one. Annoyed at myself for not putting a buy in where the price would have clipped the trend on both (382/144 respectively). Both would been absolutely perfect. That'll teach me.

We do seem to be back on trend though, even if after a brief step down.


----------



## waterbottle (29 June 2022)

Official US GDP figures are due out tonight. If the slew of economic data is to be believed + GDPNow predictions, we should be heading to 0%.


----------



## mullokintyre (29 June 2022)

Nah, with the amount being spent on Ukraine, climate change,   affirmative action, gender equality,  and transporting immigrants across the southern border, it will be positive.
Mick


----------



## Garpal Gumnut (29 June 2022)

The Garpal Gumnut Inflation Measure ( GGIM ) is not as pessimistic for Australian inflation as many on this thread. 

There will be limited inflation. 

The hotel Inflation Team have been reporting back from local shopping centres, Coles, Liquorland, KMart, as well as Officeworks, Ultratune and the busy tradie, mine supporting and manufacturing businesses in Townsville and see no great rise in essentials. 

Inessentials will be hit. Not essentials. = No inflation.

gg


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## moXJO (29 June 2022)

Europe and UK inflation still looks pretty bad. US apparently is easing inflation worries, but that just looks like a recession in the making. 

I still think it's just a grind out of excess cash. Unless, of course, I see government cash splashes. And so far, the language seems to be centred round a recession or "challenging times". So seems to be "prep" language.

Expect it to be that this is the beginning of a reset of markets. Excessive cash tide is flowing out.


----------



## JohnDe (29 June 2022)

moXJO said:


> Europe and UK inflation still looks pretty bad. US apparently is easing inflation worries, but that just looks like a recession in the making.
> 
> I still think it's just a grind out of excess cash. Unless, of course, I see government cash splashes. And so far, the language seems to be centred round a recession or "challenging times". So seems to be "prep" language.
> 
> Expect it to be that this is the beginning of a reset of markets. Excessive cash tide is flowing out.








> Ark Invest’s Cathie Wood says the U.S. is already in a recession
> 
> “We think we are in a recession,” Wood said on CNBC’s “Squawk Box” Tuesday. “We think a big problem out there is inventories... the increase of which I’ve never seen this large in my career. I’ve been around for 45 years.”
> 
> The innovation-focused investor said inflation has turned out to be hotter than she had expected due to supply chain disruptions and geopolitical risks.






> Inflation And Inventories Pose ‘Big Problem’
> 
> The money manager’s comments come a week after Elon Musk, whose Tesla is among one of Ark’s biggest holdings, called a recession in the U.S. “inevitable” and said a downturn would “more likely than not” occur in the near term, though he didn't offer a specific time line.


----------



## over9k (29 June 2022)

moXJO said:


> Europe and UK inflation still looks pretty bad. US apparently is easing inflation worries, but that just looks like a recession in the making.
> 
> I still think it's just a grind out of excess cash. Unless, of course, I see government cash splashes. And so far, the language seems to be centred round a recession or "challenging times". So seems to be "prep" language.
> 
> Expect it to be that this is the beginning of a reset of markets. Excessive cash tide is flowing out.



Seasonality.


----------



## moXJO (29 June 2022)

over9k said:


> Seasonality.



Chicken salt thanks.


----------



## Smurf1976 (29 June 2022)

moXJO said:


> Expect it to be that this is the beginning of a reset of markets.



S&P500 index already down over 23% from its high at the beginning of this calendar year.

Look at random ASX300 stocks and there's quite a few that have had serious declines, 50%+ 

If this is the beginning then does that mean you're basically expecting an outright crash?

My own view is somewhat the opposite. There's a rapidly growing level of media attention and articles about falling stocks and so on. That usually occurs much nearer the bottom than the top so I'm thinking we need one more washout then that could be it. Possibly.....


----------



## qldfrog (29 June 2022)

Feds will chicken out on tightening, and will QE again..one way or another
So another wave of interest rate increase, with another market  fall and panic starting and then get ready for a stellar jump...when the Feds capitulate with inflation going ballistic/fiat currency losing all trust
That is when you need gold silver..not sure when this will happen so heavy PM already , will try to have enough cash for the rebound..and try to sell my shorts at the right time..easier said than done...


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## waterbottle (29 June 2022)

US Q1 GDP revised *lower* to -1.6% instead of -1.5%. Not much, but it's not going to be pretty if the GDP Now predictions are correct (more negative news). 
This will confirm a technical recession. Will be interesting to see what happens then....


----------



## Smurf1976 (29 June 2022)

qldfrog said:


> Feds will chicken out on tightening, and will QE again..one way or another



My thinking is that the media narrative cranking up signals this isn't anywhere near as far away as the market seems to be thinking.

Just needs a single data point showing a decline in US inflation and some backing with either negative GDP or a further fall in the major stock indices and that'll be it I expect....


----------



## waterbottle (29 June 2022)

The US, UK & European central bankers all due to speak at 0000hrs... is this the boiling frog moment?


----------



## waterbottle (30 June 2022)

From the ECB Forum:

Summary thanks to DailyFX team



> Economy can withstand tighter monetary poli:
> - The aim is to have growth moderate
> - There are pathways to go back to 2% inflation with strong labor market
> - Events of last few months made our job more challenging
> ...




This is the Volcker strategy modified for 2022. The major Western central banks are acting in unison. The strategy is to slam inflation at any cost, recession or not. All are in agreement that *not controlling inflation will be more disastrous than excessive interest rate hikes*.


----------



## waterbottle (30 June 2022)

Bed Bath & Beyond CEO ousted as sales collapse 27%
					

Bed Bath & Beyond CEO gets ousted after a brutal quarter.




					finance.yahoo.com
				




First Target, now Bed, bath & beyond! Retail is collapsing. 27% drop in sales is huge! If we aren't in a recession already, we'll be there soon.


----------



## Smurf1976 (30 June 2022)

waterbottle said:


> Bed Bath & Beyond CEO ousted as sales collapse 27%
> 
> 
> Bed Bath & Beyond CEO gets ousted after a brutal quarter.
> ...



A recession is one way to cut inflation, especially so if it gets the oil price down.

I note also the flat yield curve. Looking at the US market, 2 year Treasury currently 3.081% whilst 10 year is 3.107% and 30 year is 3.225% so all much the same. 

Won't be long before we see an inversion is my thinking.


----------



## over9k (30 June 2022)

waterbottle said:


> From the ECB Forum:
> 
> Summary thanks to DailyFX team
> 
> ...



Yep, markets deep into the red as a result. Also the end of the quarter/half so lots of red.


----------



## over9k (30 June 2022)

waterbottle said:


> Bed Bath & Beyond CEO ousted as sales collapse 27%
> 
> 
> Bed Bath & Beyond CEO gets ousted after a brutal quarter.
> ...






lol


----------



## qldfrog (30 June 2022)

Inflation regardless of IR:








						Fears small business could go bust over skyrocketing power prices
					






					9now.nine.com.au


----------



## over9k (30 June 2022)

So apparently, the americans, who buy everything on credit, are now starting to default on their car repayments in huge numbers. 

Hmm, I wonder what could be next?


----------



## over9k (30 June 2022)

3 hound said:


> You will own nothing and enjoy it;
> 
> https://www.designboom.com/design/brownstone-shared-housing-capsulte-pods-shared-living-05-05-2022/
> 
> Welcome to socialist hell.



Soycialist. 

The soyviet union, if you will.


----------



## 3 hound (30 June 2022)

The cognitive dissonance between the soycialist fantasy and fetish held by privileged rich white kids in the West and actual real people that have lived it is staggering bordering on a full psychotic break with reality.


----------



## moXJO (30 June 2022)

Smurf1976 said:


> S&P500 index already down over 23% from its high at the beginning of this calendar year.
> 
> Look at random ASX300 stocks and there's quite a few that have had serious declines, 50%+
> 
> ...



Most bear cycles are lucky to last months, up to two years. A lot of the talk is that we will see a nasty crash these next few months.  I've been waiting on this one a couple of years. Market exuberance surprised me.

I think there was a lot of froth and a lot of shares overshot to the upside these last few years. Valuations seem out of whack.

In saying the above, once we do get a clear out the market (which is generally under 2 years at its worst), it then moves to a bull. We have had declined for a while now. Should be some good opportunities to pick up some cheap stock. You have to be able to turn your bear thinking on a dime. So don't get caught in the "end of the world" mindset and miss the boat.

I'm expecting depressed real world assets as business collapse and also across various markets. Realistically our government can't let everything drop to much. So there's a limit on interest rates as debt is just ridiculous on things like housing.

I've been dribbling into a couple of commodity plays and will probably pick up some tech soon. Need a lot more froth off though.


----------



## Tropico (30 June 2022)

Looks as though CBA are getting in early, the rest to follow:
The Commonwealth Bank of Australia (CBA) has increased its fixed mortgage rates by a huge 1.4 per cent, just days before the next Reserve Bank board meeting.


----------



## Belli (30 June 2022)

Tropico said:


> Looks as though CBA are getting in early, the rest to follow:
> The Commonwealth Bank of Australia (CBA) has increased its fixed mortgage rates by a huge 1.4 per cent, just days before the next Reserve Bank board meeting.



Different animal and headline a little misleading.

The rates are not based on any RBA one but that on the open market from institutional investors and the like and at what rate they will sell the cash for.


----------



## Garpal Gumnut (30 June 2022)

over9k said:


> So apparently, the americans, who buy everything on credit, are now starting to default on their car repayments in huge numbers.
> 
> Hmm, I wonder what could be next?




I myself, in an attempt to help the economy and fight inflation have stopped buying porridge in sachets and have returned to buying Uncle Tobys by the kg. when it is on special. 

It was a chilly 18C. this morning at the hotel, but nonetheless the extra time spent making porridge these winter mornings is nothing compared to the scourge of inflation. 

gg


----------



## Tropico (30 June 2022)

Belli said:


> Different animal and headline a little misleading.
> 
> The rates are not based on any RBA one but that on the open market from institutional investors and the like and at what rate they will sell the cash for.



You are correct in that it could be inferred as misleading. however both points are true: "the CBA has increased it's fixed term interest rates", and, it is "just days before the next Reserve Bank board meeting". *Edit: the journalists are good at that.*
To what extent  the fixed rates by CBA (and/or others that no doubt will follow) and the RBA cash rate are related can be discussed at some length.
There doesn't seem to be any speculation about what the RBA will do, everyone seems to be holding their breath till the new financial year.


----------



## Belli (30 June 2022)

Tropico said:


> You are correct in that it could be inferred as misleading. however both points are true: "the CBA has increased it's fixed term interest rates", and, it is "just days before the next Reserve Bank board meeting". *Edit: the journalists are good at that.*
> To what extent  the fixed rates by CBA (and/or others that no doubt will follow) and the RBA cash rate are related can be discussed at some length.
> There doesn't seem to be any speculation about what the RBA will do, everyone seems to be holding their breath till the new financial year.




Yeah, fixed rates are priced to bonds which are expensive now.  Plus the Fed Guvmnt is no longer buying them.


----------



## againsthegrain (30 June 2022)

Garpal Gumnut said:


> I myself, in an attempt to help the economy and fight inflation have stopped buying porridge in sachets and have returned to buying Uncle Tobys by the kg. when it is on special.
> 
> It was a chilly 18C. this morning at the hotel, but nonetheless the extra time spent making porridge these winter mornings is nothing compared to the scourge of inflation.
> 
> gg




Next step is making it with water instead of milk.  Its not that bad if you add some honey for flavour


----------



## wayneL (30 June 2022)

againsthegrain said:


> Next step is making it with water instead of milk.  Its not that bad if you add some honey for flavour



A carb blast too. 

Hyperinsulinemia, anyone?


----------



## eskys (1 July 2022)

You make porridge, I make porridge. Whatever we do, don't make rocket fuel out of it.... and we'll eat our porridge when it's just right........US market not right tonight, deep red


----------



## over9k (1 July 2022)

3 hound said:


> The cognitive dissonance between the soycialist fantasy and fetish held by privileged rich white kids in the West and actual real people that have lived it is staggering bordering on a full psychotic break with reality.



My favourite so far has been meghan markle. 

I mean just take a moment to marinade in the fact that we were being lectured on our privilege by a literal princess.


----------



## over9k (1 July 2022)

Same story for everything - worst ever, worst for 40 years, worst since .com bust, worst since great depression, on and on and on it goes. 


Meanwhile, even after its plunge over the last ~3 weeks, NRGU is still up 70% for the year. If you'd bought on 1 jan and sold at peak you'd have roughly 5X'd your money. 





Famous last words but it looks like we might have found a tentative support level.


----------



## divs4ever (1 July 2022)

3 hound said:


> Sell to who??



Blackrock  seems to be a keen accumulator  , but there will be other buyers ( at a price , but maybe not a generous one )


----------



## waterbottle (1 July 2022)

US Atlanta Fed now reporting GDPNow figure of -1.0%.
The Recession is here. Now we wait for it to be official.
Energy and commodity stocks down big time, which makes sense if market now trying to price in a recession.


----------



## 3 hound (1 July 2022)

waterbottle said:


> US Atlanta Fed now reporting GDPNow figure of -1.0%.
> The Recession is here. Now we wait for it to be official.
> Energy and commodity stocks down big time, which makes sense if market now trying to price in a recession.
> 
> ...




As late as yesterday the US Fed thru Powell publicly stated the economy ((US) is objectively in great shape, basically said it's booming.

The Whitehouse can not stop boasting how fantastic and strong the US economy is.

You guys are clearly all wrong.


----------



## waterbottle (1 July 2022)

3 hound said:


> As late as yesterday the US Fed thru Powell publicly stated the economy ((US) is objectively in great shape, basically said it's booming.
> 
> The Whitehouse can not stop boasting how fantastic and strong the US economy is.
> 
> You guys are clearly all wrong.




Rhetoric can always change. 

Chair Powell didn't have a closed-door meeting with Biden in Q1 just to explain to him the economy is booming....


----------



## qldfrog (1 July 2022)

3 hound said:


> As late as yesterday the US Fed thru Powell publicly stated the economy ((US) is objectively in great shape, basically said it's booming.
> 
> The Whitehouse can not stop boasting how fantastic and strong the US economy is.
> 
> You guys are clearly all wrong.



Gdp at -1%.inflation at nearly 10%
That basically means the economy/wealth of the US has fallen by 10%???
In real term..not in $ number i mean


----------



## divs4ever (1 July 2022)

Tropico said:


> You are correct in that it could be inferred as misleading. however both points are true: "the CBA has increased it's fixed term interest rates", and, it is "just days before the next Reserve Bank board meeting". *Edit: the journalists are good at that.*
> To what extent  the fixed rates by CBA (and/or others that no doubt will follow) and the RBA cash rate are related can be discussed at some length.
> There doesn't seem to be any speculation about what the RBA will do, everyone seems to be holding their breath till the new financial year.



 i am thinking the RBA will hike 0.5% again ( with a lesser chance of 0.4%  to round the current rate )

 the RBA has more opportunities to increase in the regular cycles than several major trading partners  so i THINK they will rise less per hike  but hike until at least 3% is reached 

 and if the world economy gets hit by a truck  3% will be like spitting on a forest fire


----------



## 3 hound (1 July 2022)

divs4ever said:


> will be like spitting on a forest fire




I was bracing for just a standard pissing into the wind level event.

This sounds much worse.


----------



## divs4ever (1 July 2022)

qldfrog said:


> Gdp at -1%.inflation at nearly 10%
> That basically means the economy/wealth of the US has fallen by 10%???
> In real term..not in $ number i mean



 i am more likely to believe Mary Whitehouse  than the US White House on  statements about the US economy 









						Mary Whitehouse - Wikipedia
					






					en.wikipedia.org


----------



## divs4ever (1 July 2022)

3 hound said:


> I would bracing for just a standard pissing into the wind level event.
> 
> This sounds much worse.



 having been close and personal  with GRASS fires  , it looks to be MUCH worse ( in a hot forest fire some trees explode  as the sap boils/burns ) ( and i can't spit very far )


----------



## 3 hound (1 July 2022)

divs4ever said:


> i am more likely to believe Mary Whitehouse  than the US White House on  statements about the US economy
> 
> 
> 
> ...




And I believe Amy Winehouse more than both of them.

RIP Amy.

https://en.wikipedia.org/wiki/Amy_Winehouse


----------



## 3 hound (1 July 2022)

divs4ever said:


> having been close and personal  with GRASS fires  , it looks to be MUCH worse ( in a hot forest fire some trees explode  as the sap boils/burns ) ( and i can't spit very far )




So what your saying is, it looks bad.


----------



## divs4ever (1 July 2022)

waterbottle said:


> Rhetoric can always change.
> 
> Chair Powell didn't have a closed-door meeting with Biden in Q1 just to explain to him the economy is booming....



 they were probably having ice-creams ( because the US economy hasn't improved a whisker )


----------



## divs4ever (1 July 2022)

3 hound said:


> So what your saying is, it looks bad.



yes very bad  , and the  only solution the West has  , is distraction ( aka a MAJOR war )

 they can't tighten  ( liquidity ) they can't hike ( much )  i reckon  they will go to war  and delay bond redemptions ( and probably coupon payments )


----------



## 3 hound (1 July 2022)

divs4ever said:


> yes very bad  , and the  only solution the West has  , is distraction ( aka a MAJOR war )
> 
> they can't tighten  ( liquidity ) they can't hike ( much )  i reckon  they will go to war  and delay bond redemptions ( and probably coupon payments )



I wonder if government will be keeping track of CO2 emissions in the war machinery and if they have will use renewables.

The Australian army has purchased electric motor bikes (no joke) in order to fight wars more sustainably and with less impact on the environment.


----------



## over9k (1 July 2022)

3 hound said:


> I wonder if government will be keeping track of CO2 emissions in the war machinery and if they have will use renewables.
> 
> The Australian army has purchased* electric motor bikes* (no joke) in order to fight wars more sustainably and with less impact on the environment.



That's a tactical thing, not an emissions thing. Electric bikes are very quiet/can't be heard by the bad guys. They're trying to do the same thing with all their vehicles but the battery tech just isn't there yet. 

A military environment is completely different to civvy street.


----------



## qldfrog (1 July 2022)

3 hound said:


> I wonder if government will be keeping track of CO2 emissions in the war machinery and if they have will use renewables.
> 
> The Australian army has purchased electric motor bikes (no joke) in order to fight wars more sustainably and with less impact on the environment.



A bit off track but last month, a top jewellery in Paris was armed robbed, 9 cops arrived within minutes, but could not chase the robbers as they were on their new green bicycles;
The bad guys then met a patrol on a road but did not stop when asked..so they went as shooting by police is now a no go and they did not keep to the speed limit so pursuit could not proceed.
If law enforcement in the woke west matches our new economic policy, better buy more Yuan and Rubble...


----------



## 3 hound (1 July 2022)

over9k said:


> Electric bikes are very quiet/can't be heard by the bad guys. They're trying to do the same thing with all their vehicles but the battery tech just isn't there yet.
> 
> A military environment is completely different to civvy street.




Yeah but the motorbikes were accompanied by an entire battalion of heavy diesel vehicles - stealth not.

Also have you ever heard how much noise they make in the bush even if they had no motor, a mountain bike is far from stealth - it has nothing to do with civvy street, it's basic physics and commonsense.

"That's a tactical thing, not an emissions thing. ". no, the army specifically stated (I paraphrase) it's a move to greener more environmentally way to fight wars. Stealth was not mentioned.


----------



## waterbottle (1 July 2022)

Euro inflation expected to remain high. All the more reason for the ECB to follow the global trend of IR hikes, albeit starting from near 0%.



			https://www.abnamro.com/research/en/our-research/euro-inflation-is-not-coming-down


----------



## 3 hound (1 July 2022)

So is war in general an inflationary or deflationary force on the economy and how?


----------



## moXJO (1 July 2022)

3 hound said:


> So what your saying is, it looks bad.



Matter of perspective. It looks bad for the common pleb. Looks great for investors.


----------



## waterbottle (1 July 2022)

3 hound said:


> So is war in general an inflationary or deflationary force on the economy and how?




If the war involves restrictions on energy commodities that the global economy is dependent on, its inflationary....


----------



## divs4ever (1 July 2022)

3 hound said:


> So is war in general an inflationary or deflationary force on the economy and how?



 all the outstanding accounts ( at government level )  get ignored  and any criticism  is unpatriotic  ( Russian Disinformation )

 most meaningful productivity  gets converted into 'the war effort '  as  money disappears down rifle barrels and into new war toys  , and of course  the peasants are shamed into self-austerity  and suffer rationing 

 OH and a big chunk of the work-force are never the same again


----------



## divs4ever (1 July 2022)

moXJO said:


> Matter of perspective. It looks bad for the common pleb. Looks great for investors.



 MAYBE  , the problem is modern governments like to pick the winners ( their crony mates and families )


----------



## 3 hound (1 July 2022)

divs4ever said:


> all the outstanding accounts ( at government level )  get ignored  and any criticism  is unpatriotic  ( Russian Disinformation )
> 
> most meaningful productivity  gets converted into 'the war effort '  as  money disappears down rifle barrels and into new war toys  , and of course  the peasants are shamed into self-austerity  and suffer rationing
> 
> OH and a big chunk of the work-force are never the same again



That sounds deflationary?


----------



## waterbottle (1 July 2022)

EU inflation at 8.6% v. 8.4% expected. We all know what the ECB needs to do...


----------



## divs4ever (1 July 2022)

3 hound said:


> That sounds deflationary?



 using  my family's experience in WW2  a LOT of stuff was rationed  ( bread , butter , salt , flour , petrol etc etc etc )   BUT those cashed up could buy black-market   ( alcohol , panty-hose ,  meat cigarettes , etc etc )

 so which prices do you use the rationed goods ( with limited supply )  or black-market  at 'free-market rates '


----------



## 3 hound (1 July 2022)

divs4ever said:


> using  my family's experience in WW2  a LOT of stuff was rationed  ( bread , butter , salt , flour , petrol etc etc etc )   BUT those cashed up could buy black-market   ( alcohol , panty-hose ,  meat cigarettes , etc etc )
> 
> so which prices do you use the rationed goods ( with limited supply )  or black-market  at 'free-market rates '



Dunno and don't really want to find out.


----------



## divs4ever (1 July 2022)

sadly we might go that path anyway


----------



## over9k (1 July 2022)

Wars are expensive. Capital has to be diverted to warfighting. This wrecks everything else.


----------



## divs4ever (1 July 2022)

over9k said:


> Wars are expensive. Capital has to be diverted to warfighting. This wrecks everything else.



 yes , but this time we would have to start manufacturing again  ( which MIGHT be a good thing )

 BTW have you remembered we are on the hook  for 12 submarines and up to 100 F-35 fighters plus some assorted tanks i am wondering where we are going to get all these trained crews 

 but the main focus of war is to distract us from mind-numbing debt ( accumulated  before-hand )


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## over9k (2 July 2022)

B-e-a-utiful.


----------



## waterbottle (2 July 2022)

waterbottle said:


> US Atlanta Fed now reporting GDPNow figure of -1.0%.
> The Recession is here. Now we wait for it to be official.
> Energy and commodity stocks down big time, which makes sense if market now trying to price in a recession.
> 
> ...





LOL the GDPNow figure has been *revised down to -2.1%!!!!!! *


----------



## qldfrog (2 July 2022)

waterbottle said:


> LOL the GDPNow figure has been *revised down to -2.1%!!!!!! *
> 
> View attachment 143535



Could be -3% as easily as they have no real clue on inflation forecasts.
Let's summarise this as: 
we ( and they really mean you peons) are in dire deep sxxt.....


----------



## martaart077 (2 July 2022)

divs4ever said:


> yes , but this time we would have to start manufacturing again  ( which MIGHT be a good thing )
> 
> BTW have you remembered we are on the hook  for 12 submarines and up to 100 F-35 fighters plus some assorted tanks i am wondering where we are going to get all these trained crews
> 
> but the main focus of war is to distract us from mind-numbing debt ( accumulated  before-hand )



Trained crews could come from skilled migration from such source countries as India, China... maybe Ukraine.


----------



## divs4ever (2 July 2022)

for the crews ?? ( surely they wouldn't )  .. manufacturing critical parts ?? ( i think i would rather take up options trading )

 you have to remember not every migrant thinks Australia is the land of milk and honey ( especially after they have been  for a year or two )


----------



## 3 hound (2 July 2022)

martaart077 said:


> Trained crews could come from skilled migration




Sadly this is the easy and most Goto solution. 

Draining other countries population and education investment to top up our own lack of planning.


----------



## divs4ever (2 July 2022)

i could just  imagine the Ukrainian crew selling our submarine for a good price ( like they allegedly did with those French tanks )  the Chinese crew reverse engineering it and selling the IP  , and the Indians totally confused on who the real enemy is  ( after so many years of British occupation )


----------



## divs4ever (2 July 2022)

Former Reagan Advisor: Inflation Will Remain High Throughout 2023

https://www.zerohedge.com/news/2022...or-inflation-will-remain-high-throughout-2023


----------



## over9k (2 July 2022)

HMMMMMM


----------



## 3 hound (2 July 2022)

over9k said:


> View attachment 143548
> 
> 
> HMMMMMM



The transition to renewables seems to be going stellar.


----------



## divs4ever (2 July 2022)

3 hound said:


> The transition to renewables seems to be going stellar.



or catastrophic  ( since the free-market isn't controlling it )


----------



## 3 hound (2 July 2022)

divs4ever said:


> or catastrophic  ( since the free-market isn't controlling it )



Free market and control don't make sense in the same sentence.


----------



## divs4ever (2 July 2022)

3 hound said:


> Free market and control don't make sense in the same sentence.



 yes   , and that is why catastrophe  is possible .

 those dreaming of control  might resort to desperate measures to retain ( strengthen )  control (' if i can't win nobody  is allowed to win mentality ' )


----------



## over9k (2 July 2022)

Without subsidies even the miniscule amount of renewable we have now wouldn't exist. 

"Green" energy is anything but green and anything but economical.


----------



## divs4ever (2 July 2022)

over9k said:


> Without subsidies even the miniscule amount of renewable we have now wouldn't exist.
> 
> "Green" energy is anything but green and anything but economical.



 mostly because government governments NEED to control  ,  you might find  'off-grid '  small scale projects  might actually be practical  , especially if battery tech improves


----------



## waterbottle (3 July 2022)

__





						Bloomberg - Are you a robot?
					





					www.bloomberg.com
				




LMAO, recession confirmed


----------



## over9k (3 July 2022)

SUPPLY SIDE


----------



## waterbottle (3 July 2022)

over9k said:


> View attachment 143583
> 
> 
> SUPPLY SIDE



Let them heat their homes with cake


----------



## divs4ever (3 July 2022)

over9k said:


> View attachment 143583
> 
> 
> SUPPLY SIDE



 so who started that economic warfare ??  ( hint start researching circa 2014 )

 and guess what , Russia still has plenty of gas left in the tank ( puns intended )

 second hint the EU is NOT united  ( you have the Basque regions and Cyprus  as two stand-out examples  , and you could add Northern Ireland as a bonus choice )


----------



## divs4ever (3 July 2022)

waterbottle said:


> Let them heat their homes with cake



 sorry the Russians  have started grains ( and sunflower oil ) for rubles as well  , might be back to French cuisine for the whole of Europe


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## waterbottle (3 July 2022)

T


divs4ever said:


> sorry the Russians  have started grains ( and sunflower oil ) for rubles as well  , might be back to French cuisine for the whole of Europe




Yes interestingly there are already calls from the UN world food programme to ease sanctions on Russia in exchange for grain so that nations dependent on these exports don't starve (Middle East spring anyone?)


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## 3 hound (3 July 2022)

Sanctions have a history of hurting everyone except their target audience and are up there with war crimes on what they can do to civilians. 

Sanctions on Iraq would be an example.


----------



## JohnDe (3 July 2022)

waterbottle said:


> Yes interestingly there are already calls from the UN world food programme to ease sanctions on Russia in exchange for grain so that nations dependent on these exports don't starve (Middle East spring anyone?)




Where did you see that?

The G7 are of a different opinion

G7 Statement on Global Food Security, Elmau, 28 June 2022



> We commit.....to global food security this year.
> We reiterate our urgent call upon Russia to, without condition, end its blockade of Ukrainian Black Sea ports, destruction of key port and transport infrastructure, grain silos and terminals, illegal appropriation by Russia of agricultural commodities and equipment in Ukraine and all other activities that further impede Ukrainian food production and exports. These can only be assessed as a geopolitically motivated attack on global food security. We will step up our efforts to help Ukraine to keep producing agricultural products in view of the next harvest season and commit to supporting Ukrainian farmers in gaining access to essential agricultural inputs and veterinary medicines. We are strongly supporting Ukraine in resuming its agricultural exports to world markets, as well as UN efforts to unlock a safe maritime corridor through the Black Sea. Additionally, we will step up our efforts to establish alternative routes building on the already implemented EU “Solidarity Lanes” initiative. Working with relevant agencies and partners we will collaborate to identify the provenance of grain imports, with the aim of identifying illegally seized Ukrainian products and deterring Russia from continuing its illegal seizures. We further call on Russia to lift its measures that hinder the export of Russian grain and fertilisers.
> We will continue to ensure that our sanctions packages are not targeting food and allow for the free flow of agricultural products, including from Russia, and the delivery of humanitarian assistance.
> We commit to sustainably increase the availability of agricultural products including through strengthening agricultural productivity particularly in the most affected countries to build their resilience and support domestic production. We will strive to address fertiliser shortages by supporting more efficient and targeted usage, temporarily increasing local and global production as appropriate, and promoting alternatives to inorganic fertiliser. As a short-term relief, we call on those partners with large food stockpiles as well as on the private sector to make food available without distorting the markets, including by supporting the World Food Programme´s purchase strategy. We call on all countries to avoid excessive stockpiling of food which can lead to further price increases. We will continue to address food loss and waste and the promotion of balanced and healthy diets. We support the initiative carried out by the International Fund for Agricultural Development (IFAD), in coordination with the African Union (AU), to design a strategic investment plan to accelerate development of value chains essential for Africa’s food resilience.
> ...


----------



## over9k (4 July 2022)

Accurate. Bounce in oil price and then a levelling out = bounce in interest rates before a levelling out and/or drop. 

Remember that inflation is only compared to the year prior. 20% inflation in one year and then a levelling out would mean 0% the next year. Broken system but it is what it is.


----------



## divs4ever (4 July 2022)

waterbottle said:


> T
> 
> 
> Yes interestingly there are already calls from the UN world food programme to ease sanctions on Russia in exchange for grain so that nations dependent on these exports don't starve (Middle East spring anyone?)



 Russia has already had a meeting with an African delegation  ( apparently cordial ) however Europe can now pay in rubles  ( i still think they should offer a gold payment option )


----------



## noirua (4 July 2022)




----------



## over9k (5 July 2022)




----------



## waterbottle (5 July 2022)

Euro GDP and PMI out. GDP fast approaching 0%. PMI at 16 month low of 52.


----------



## waterbottle (5 July 2022)

AUD getting smashed. Euro markets dumping hard following PMI release. US markets shaping up to be heading in the same direction.

Corporate earnings aren't even out yet... 🤮🤮

I'll be watching BTC action. Seems to be the leading the markets when risk gets dumped.


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## Smurf1976 (6 July 2022)

I'm noticing the word "strike" is starting to appear in the news rather often....

Oil and gas on strike in Norway: https://edition.cnn.com/2022/07/05/...rope-energy-crisis?utm_source=business_ribbon

Garbage collection in Adelaide: https://bigrigs.com.au/index.php/20...vers-to-strike-for-better-pay-and-scheduling/

Train strikes in Sydney: https://www.news.com.au/national/ns...d/news-story/bb0cfb3bc88f7ae59f9fa1d792e606eb

Train strikes in the UK recently too: https://www.bbc.com/news/business-61634959

Welcome to the 1970's


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## qldfrog (6 July 2022)

Smurf1976 said:


> I'm noticing the word "strike" is starting to appear in the news rather often....
> 
> Oil and gas on strike in Norway: https://edition.cnn.com/2022/07/05/...rope-energy-crisis?utm_source=business_ribbon
> 
> ...



Sad about what's coming, not your posting  @Smurf1976.
And danish cheese will get dearesr.. Danemark now forcing its farms to close. I see that as another step into the Reset but it is to reduce nitrogen pollution...herds have to halve..if they say so...
Tell that to Sri Lankans


----------



## waterbottle (6 July 2022)

Oil below $100/barrel. Governments and central banks just be cheering its fall...


----------



## divs4ever (6 July 2022)

waterbottle said:


> Oil below $100/barrel. Governments and central banks just be cheering its fall...



top level price manipulation ??   no genuine reason it should fall so sharply


----------



## waterbottle (6 July 2022)

divs4ever said:


> top level price manipulation ??   no genuine reason it should fall so sharply




Bonds and gold are both falling too. Either risk is back on or markets are pricing in recession.


----------



## divs4ever (6 July 2022)

the published opinions are about a recession ( as if we haven't been in one for months )

 i will be watching gold ( and selected gold miners )  today


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## over9k (6 July 2022)

Recession see-saw. Basically just hit a point where things were so expensive that price and interest rate spikes became so great they were going to offset the price increase and send us plummeting back in the other direction.

So essentially going from the point of prices being "high" to being "unaffordably high" and thus sales (economies) fall off a cliff, which then brings prices back down to affordable levels, which brings sales back, and around & around we go...


----------



## waterbottle (6 July 2022)

divs4ever said:


> the published opinions are about a recession ( as if we haven't been in one for months )
> 
> i will be watching gold ( and selected gold miners )  today




It's only been the past 2-3 months that economists have been agreeing that a recession will be probable. Until recently the consensus was a soft landing.

Case in point


			https://www.abnamro.com/research/en/our-research/a-more-rapid-cooling-in-us-consumption


----------



## mullokintyre (6 July 2022)

it highlights something I have suspected for years, namely that the so called "experts" are no better than the average punter at picking what is going to happen.
Every now and then one of them flukes it and they become an uber guru.
Mick


----------



## 3 hound (6 July 2022)

mullokintyre said:


> it highlights something I have suspected for years, namely that the so called "experts" are no better than the average punter at picking what is going to happen.
> Every now and then one of them flukes it and they become an uber guru.
> Mick



Economics is the science of predicting what's already happened.

I sometimes wonder if the professional analysts that have the public ear are more about manipulation than information and they themselves do the exact opposite of what they tell others to do.


----------



## qldfrog (6 July 2022)

3 hound said:


> Economics is the science of predicting what's already happened.
> 
> I sometimes wonder if the professional analysts that have the public ear are more about manipulation than information and they themselves do the exact opposite of what they tell others to do.



Manipulation is indeed part of the explanation a while back, the RBA was announcing that rate would not rise until..xxx
Has anyone even toyed with the idea it would be true?
It was just a way to reassure population/populace/toothless so that a further push in building, loans, etc can resume.
I can not even imagine that it would be anything else but manipulation.
And i actually think it is fair .just another tool to direct the economy.


----------



## 3 hound (6 July 2022)

qldfrog said:


> Manipulation is indeed part of the explanation a while back, the RBA was announcing that rate would not rise until..xxx
> Has anyone even toyed with the idea it would be true?
> It was just a way to reassure population/populace/toothless so that a further push in building, loans, etc can resume.
> I can not even imagine that it would be anything else but manipulation.
> And i actually think it is fair .just another tool to direct the economy.



Fair enough to direct the economy but then they could just say on this date the rates will be this so people could plan their expenses.


----------



## divs4ever (6 July 2022)

qldfrog said:


> Manipulation is indeed part of the explanation a while back, the RBA was announcing that rate would not rise until..xxx
> Has anyone even toyed with the idea it would be true?
> It was just a way to reassure population/populace/toothless so that a further push in building, loans, etc can resume.
> I can not even imagine that it would be anything else but manipulation.
> And i actually think it is fair .just another tool to direct the economy.



 well 'jaw-boning ' seems to be an accepted tool of the US Fed ( and apparently  others )

 mind you if WE 'jaw-boned ' a stock here  ( or another stock forum  ) we could face all sorts of trouble 

 i guess standards still come in double


----------



## divs4ever (6 July 2022)

THIS IS WHEN THE FED WILL PIVOT - NOT GOOD​


----------



## waterbottle (6 July 2022)

China has *again *locked down several cities following covid outbreaks. This would explain the drop in crude oil... Will still likely be pro inflationary if supply issues aren't alleviated









						China imposes Covid lockdown in Xi’an after handful of cases
					

Zero-Covid strategy shuts down north-central city of 13 million following 18 reported cases of Omicron




					www.theguardian.com


----------



## over9k (6 July 2022)

waterbottle said:


> China has *again *locked down several cities following covid outbreaks. This would explain the drop in crude oil... Will still likely be pro inflationary if supply issues aren't alleviated
> 
> 
> 
> ...




 

Worth 4 minutes & 38 seconds of your time.


----------



## over9k (6 July 2022)

Lol. Going well!


----------



## waterbottle (6 July 2022)

over9k said:


> Worth 4 minutes & 38 seconds of your time.





Wow. What the f.... 

Lockdown until 2026?!
Thats insane. Xi jinping will surely face a challenge at the national congress if that's their plan. 
I totally agree with what this means for manufacturing - we're going to restart it in he western world - but not sure who we were meant to be competing against... No one in the west has made an effort to restart manufacturing.


----------



## frugal.rock (6 July 2022)

Quite a few multi nationals/ subsidiaries have already reduced or removed operations in China, and relocated to SE Asia and India.

To much sovereign risk in China now due to political interference.

If they insist on 5 year zero covid policy (dumbasses), their only hope is from supplying the Russia vacuum, from multi-nats leaving there in droves.


----------



## over9k (6 July 2022)

waterbottle said:


> No one in the west has made an effort to restart manufacturing.



Exactly! 

A few factories, chip plants etc have been given the go-ahead but they're going to be YEARS until operational so in the meantime, this is the **** sandwich we all have to eat.


----------



## waterbottle (6 July 2022)

over9k said:


> Exactly!
> 
> A few factories, chip plants etc have been given the go-ahead but they're going to be YEARS until operational so in the meantime, this is the **** sandwich we all have to eat.



If this is true and China doesn't change soon, we are being set up for a long term inflationary/manufacturing growth cycle particularly given the resource nationalism in recent years.


----------



## Smurf1976 (6 July 2022)

frugal.rock said:


> Quite a few multi nationals/ subsidiaries have already reduced or removed operations in China, and relocated to SE Asia and India.



I'm aware that some companies in Australia are also considering "Made in China" as a negative when it comes to evaluating tenders.

It doesn't outright preclude the tender being considered or even winning, but it's a negative mark against it.

The reason's purely business not political. China being considered more risky in terms of actually supplying the goods.

Anyone tendering with goods already in their warehouse, or who is themselves the manufacturer and is located in Australia, is marked up due to lower risk so far as physical supply is concerned. Yes the warehouse could burn down, that's not impossible, but it's far less likely than a disruption from an overseas supplier at least that's the view being taken.

At least some companies are willing to pay a premium if it gets them reliability of supply.


----------



## 3 hound (7 July 2022)

Smurf1976 said:


> I'm aware that some companies in Australia are also considering "Made in China" as a negative when it comes to evaluating tenders.
> 
> It doesn't outright preclude the tender being considered or even winning, but it's a negative mark against it.
> 
> ...




Yet nearly every one of my personal friends still buy all their electronic consumer goods from China. They suffer long wait times, faulty products,. clone products, no user documentation, weird one of components, but it's still currently works out much cheaper in the long run especially if you are prepared to tinker a bit.

The premium you pay for Aussie goods is a measure of laziness in the buyer.


----------



## frugal.rock (7 July 2022)

Smurf1976 said:


> At least some companies are willing to pay a premium if it gets them reliability of supply.



Bunnings / WES haven't had their self branded advertising golf umbrellas available for 3 months now, and staff can't say when "the ship is coming in".



Smurf1976 said:


> The reason's purely business not political.



Business for the West yes, but it's internal politics in China causing the problems. 
Wasn't implying that the whole internal politics scenario is intended to cause disruption to the West, however, I wouldn't strategically remove it from the table either... 🤔


----------



## over9k (7 July 2022)

waterbottle said:


> If this is true and China doesn't change soon, we are being set up for a long term inflationary/manufacturing growth cycle particularly given the resource nationalism in recent years.


----------



## qldfrog (7 July 2022)

waterbottle said:


> Wow. What the f....
> 
> Lockdown until 2026?!
> Thats insane. Xi jinping will surely face a challenge at the national congress if that's their plan.
> I totally agree with what this means for manufacturing - we're going to restart it in he western world - but not sure who we were meant to be competing against... No one in the west has made an effort to restart manufacturing.



Part of economic war China is pushing on the West, and we are actually self destroying also by playing not only the covid lockdowns too but also these sanctions..working like a dream.
We should trial our leaders for treason and work for the enemy..but no i am just following conspiracy, no one is dying from jabs, our covid measures saved lives and the Ukraine sanction are working....


----------



## over9k (7 July 2022)




----------



## mullokintyre (7 July 2022)

There is a quote that is attributed to Ronald Reagan.
“ We don’t’ have inflation because the people are living too well, we have inflation because the Government is living too well”
Pretty much sums it all up.
No one from the Government suffers when inflation is rampant, its just the poor buggers in the bottom 50% of the citizens.
Mick


----------



## over9k (7 July 2022)

The literal next day.


----------



## Smurf1976 (8 July 2022)

3 hound said:


> Yet nearly every one of my personal friends still buy all their electronic consumer goods from China.



Personal consumption is one thing especially if the item isn't critical and is just for entertainment or convenience.

If you're running a business however and you need the machinery, components or whatever in order to meet commitments to your own customers then you need your suppliers to be reliable. 

If you think there's a 1 in 100,000 chance that something from China won't turn up on time then you'll probably take the risk.

If you think the chance of delay is 1 in 3 however then it's a different story. It's pretty hard to defend your decisions to your own customers, or to your own upper management if you're the employee who made the decision, given how much has been said via mainstream news sources about supply chain disruption.

Back to inflation directly, well I ordered a specific branded item, a brush to be precise. Price now in July 2022 being 157% higher than I paid for an identical one in November 2021. OK, that's only $17.99 versus $6.99 but still, it's a decent rate of inflation there. 

That said, I'm going to step outside the box and suggest that we're pretty much done with this current burst of inflation and it won't be too much longer before we see central banks go on pause with rate hikes. Looking around, there seem to be plenty of cracks appearing both in markets and the real economy.

My guess - the (US) Fed will be done with rate hikes by the end of 2022 and it wouldn't surprise me if the language really starts to shift as early as September. Just my


----------



## qldfrog (8 July 2022)

Smurf1976 said:


> Personal consumption is one thing especially if the item isn't critical and is just for entertainment or convenience.
> 
> If you're running a business however and you need the machinery, components or whatever in order to meet commitments to your own customers then you need your suppliers to be reliable.
> 
> ...



I think feds will only change language after a market capitulation.
But i see your timing right
I am usually too early but disastrous profit reports cause capitualion and by September we start talking QE again..not so sure inflation will be over yet.
Food and oil engineered crisis will only start to bite.. inflation will go on..unmatched


----------



## over9k (8 July 2022)

Smurf1976 said:


> Personal consumption is one thing especially if the item isn't critical and is just for entertainment or convenience.
> 
> If you're running a business however and you need the machinery, components or whatever in order to meet commitments to your own customers then you need your suppliers to be reliable.
> 
> ...



With you on this. Seasonality will reduce energy demand a bit, probably one more 75 point hike, then a taper off to maybe a 50, a 25, then nothing. 

Simple ramp up & then ramp down.


----------



## waterbottle (12 July 2022)

US GDP Now figures at -1.2%, a bit of an improvement. Real figures out tomorrow at 10:30pm. Will be the decider for the next rate i.e 0.75% v 1%.


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## over9k (13 July 2022)

Stating the obvious I know.


----------



## over9k (13 July 2022)

Aka inferior vs superior goods


----------



## waterbottle (13 July 2022)

over9k said:


> View attachment 144025
> 
> 
> Aka inferior vs superior goods




It may not be an issue of inferior v. superior goods, but rather whether people have the capacity to spend on anything discretionary. 

Consumers in US and Canada are expecting inflation to persist. The latter are expecting inflation at 6% into 2023, and their central bank is expected to accelerate their rate hiking schedule with the next jump at 75bps.

Having said that, oil remains volatile and seems to be crashing. I haven't heard any news about new OPEC output and the war in Ukraine is continuing with no peace in sight. 

IMO, this indicates that the market is now expecting an pricing in a recession. Commodities had already started to fall earlier this year, now oil is catching up. Meanwhile, central bankers have agreed in unison that they will control inflation by any means necessary I.e. Recession or no recession. And you can understand why when politicians just have to look at Sri Lanka to know what citizens will do when inflation is uncontrolled. 

Having said that, I'm not sure if equities have priced in a recession, so am expecting further falls...


----------



## waterbottle (13 July 2022)

South Korea just delivered an unexpected 50bp increase. More evidence of IR acceleration


----------



## Value Collector (13 July 2022)

sptrawler said:


> When I stopped for my morning coffee and a read of the AFR (cost offset), I mention to the girl that a pay rise is on its way, her comment was well not really as the cost of living has already taken it.
> Nothing like a cup half empty outlook, but it does show that people are being conditioned to expect more, maybe that's a good thing.



How much of the national output should flow to labour vs how much should flow to capital owners and the government is an age old discussion, all three stake holder groups always want more, the truth is unless actual productivity and out put rises then no group can take more with out the other groups taking less.

It’s interesting that 250 years ago Adam smith wrote about this same topic, his discussion on it was measured in Oats, he was basically saying that to keep the British economy going each worker had to be paid enough pounds of oats a year that he could feed himself and his family and have enough oats left to trade for clothing etc.

His basic point was that there is a basic level of pay that the working class requires to support itself, natural forces should always eventually keep things in line with this, over time workers expectations have risen as the increased out put caused by increased capital intensity has been shared with the working class, but there is limits to how much of the pie workers should expect, because if they take to much, then capital investments diminish and over all output will drop causing everyone to suffer.


----------



## divs4ever (13 July 2022)

depressed/stressed workers tend to be less productive , normally distracted or more liable to workplace accidents 

 but most office-bound management never see that  ( i guess you could call it karma )


----------



## Value Collector (13 July 2022)

divs4ever said:


> depressed/stressed workers tend to be less productive , normally distracted or more liable to workplace accidents
> 
> but most office-bound management never see that  ( i guess you could call it karma )



Yep, I agree but on average work places are the safest they have ever been, and in a large part that is due to the capital investments made which have raised productivity and allowed workers to produce more, with less risk and less hours.

————

Take the mining industry for example, 200 years ago the output of a worker was very low because they were using picks, shovels and push carts. So the amount each worker could earn was very limited because their out put with those tools was limited. Eg the amount of Iron Ore 3 men armed with a pick, a shovel and a push cart could produce might be 1 tonne a day each even though they worked back breakingly hard, the system couldn’t sustain paying them more than half a pound of oats a day.

How ever fast forward to today, and a group of investors chip in a few million dollars to buy those workers a huge digger and the worlds biggest dump truck. Suddenly they can sit in air conditioned comfort and produce 1000 tonnes per day, and earn the equivalent of 100’s of pounds of oats a day.

The boost in productivity allowed by the input of the investors now allows the workers to benefit from much higher wages than they could have when they only produced 1 tonne a day each, while working easier and safer. 

Of course this suddenly opens the debate of how much of this new found productivity should flow to the workers and how much to the owners of the capital that unlocked the productivity, because at the end of the day it’s a team effort between labour and capital. 

Some workers and unions believe they should take almost all the output, because they think it’s all a result of their “hard work” because the days of shovels and wheel barrows have long been forgotten, and some investors think they should receive almost all of the output because they know it’s their capital that was the driving force unlocking the productivity and they are taking all the financial risks involved too. 

Some how we have to balance these competing wants, because it’s only fair that workers get a fair share of the output, but at the same time if investors don’t receive fair compensation for their input the whole system can break down.

On average workers receive about 80% of the output of the economy, while investors take about 20%. (After taxes)


----------



## waterbottle (13 July 2022)

Holy crap, US CPI at 9.1%. Above expected 8.8%.

1% rate hike is now definitely on the cards. Rate hike acceleration here we come!

Equities going to take a beating. Nasdaq futures already down 2%.... Market to now price in recession at this rate. Hold onto your hats folks....


----------



## over9k (13 July 2022)

waterbottle said:


> Holy crap, US CPI at 9.1%. Above expected 8.8%.
> 
> 1% rate hike is now definitely on the cards. Rate hike acceleration here we come!
> 
> Equities going to take a beating. Nasdaq futures already down 2%.... Market to now price in recession at this rate. Hold onto your hats folks....


----------



## waterbottle (13 July 2022)

over9k said:


> View attachment 144066



SQQQ for meeeee


----------



## over9k (14 July 2022)

I have a position in BOIL (2x levered long u.s natural gas ETN).


----------



## over9k (14 July 2022)

Result? 




Credit spreads are well & truly widened now. 

However: 




The demand side might ease but almost nothing's changed on the supply side, nor is going to.


----------



## over9k (14 July 2022)




----------



## 3 hound (14 July 2022)

waterbottle said:


> SQQQ for meeeee



What this means??


----------



## waterbottle (14 July 2022)

.


3 hound said:


> What this means??



It's an ETF that shorts nasdaq. 

Meanwhile, RBNZ hiked 50bps yesterday with no indication that they will stop anytime soon. Their rate is already at 2.5%....
Bank of Canada came in with a shock 100bps, also at 2.5%.

RBA is lagging...


----------



## 3 hound (14 July 2022)

Geez, wonder if the smart people will start using the "R" word to describe the economy.


waterbottle said:


> .
> 
> It's an ETF that shorts nasdaq.
> 
> ...


----------



## qldfrog (14 July 2022)

waterbottle said:


> SQQQ for meeeee



Nasdaq hardly down....
Do not take me wrong....i used to thought like you,but the last few years is making me giving up on any logical economic behaviour of the market.

So let's try to create a 
New this is different this time approach:
Rate if they go up will crash rhe economy.
Market has anticipated the rate increase, if rates increase past the next rise, recession will be full blown,feds will release the screw with another form of QE to ensure their mates will benefit and DXF will reverse with usd falling, commodities will then rise and cash will be trash again so market will rise in a world with fiat collapse and unrestricted inflation.
Let's buy shares now to be in early...
There is so much anticipation/wild guess in the market that shares will soon boom in depression and collapse in boom time..


----------



## waterbottle (14 July 2022)

qldfrog said:


> Nasdaq hardly down....
> Do not take me wrong....i used to thought like you,but the last few years is making me giving up on any logical economic behaviour of the market.
> 
> So let's try to create a
> ...




I agree with you but that's the nature of trading and accepting risk.

I don't think markets have actually priced in a recession. That's evidenced by the fact we've had fresh lows each time Fed has raised rates - which by the way they've increased to 'unexpected levels' on each occasion. So the notion that the market has 'priced in' these changes is wrong.

The market also doesn't know what upcoming earnings are going to be like. Discretionary spending has only started to fall. Car loan failures are increasing in the US. Consumer habits have only changed in the past few months, which haven't yet been captured by Q1 earnings.

And finally, the market doesn't react immediately, even if it were to play out as you describe. I agree that rates will have to decrease at some point. But that isn't going to happen next week. It's less likely to occur at the next meeting. It's more likely to happen next year.


----------



## qldfrog (14 July 2022)

waterbottle said:


> I agree with you but that's the nature of trading and accepting risk.
> 
> I don't think markets have actually priced in a recession. That's evidenced by the fact we've had fresh lows each time Fed has raised rates - which by the way they've increased to 'unexpected levels' on each occasion. So the notion that the market has 'priced in' these changes is wrong.
> 
> ...



I was also trying to put a bit of smile in this view of market anticipation.
**** has been brewing for a while, to no surprise, inflation has now reached double digit, and high ones if we stick to same measurement methodology as the 70's yet my early move out of cash to PM got smashed..
Only my contrarian move to USD was good but will i be successful in getting out in time?
The backslash/fiat collapse could be VERY fast and dramatic after a Cyprus like episode, or a black swan
yet human nature is slow in  changing habits so not a given and this could go on for years..Gosh this could have been sorted 15y ago with the GFC.
I thought at the GFC  time, great, my son will be out of uni in 2020s..perfect for him to catch a rebound...well did not happen and he is starting is work life in an unpleasant time...not to even think conscription potential... ;-)


----------



## divs4ever (14 July 2022)

3 hound said:


> Geez, wonder if the smart people will start using the "R" word to describe the economy.



it will happen sometime  after the 'D' word would be more appropriate


----------



## waterbottle (14 July 2022)

qldfrog said:


> I was also trying to put a bit of smile in this view of market anticipation.
> **** has been brewing for a while, to no surprise, inflation has now reached double digit, and high ones if we stick to same measurement methodology as the 70's yet my early move out of cash to PM got smashed..
> Only my contrarian move to USD was good but will i be successful in getting out in time?
> The backslash/fiat collapse could be VERY fast and dramatic after a Cyprus like episode, or a black swan
> ...




I wouldn't get too depressed about the work environment your son faces - youth are adaptable and its in the interests of the 'powers that be' to keep the system going. 

Ive moved my cash to the USD only because RBA has been dragging its heels with IR rises and JPowell seems more aggressive compared to PLowe...


----------



## mullokintyre (14 July 2022)

The latest employment figures out suggest that there is still plenty of steam in the OZ economy.
FromABC News


> Australia's official unemployment rate has dropped to 3.5 per cent, with an estimated 88,400 jobs added to the economy last month.
> 
> Key points:​
> The unemployment rate has fallen from 3.9 to 3.5 per cent
> ...



With pressure on employment it can only mean another rise in the interest rates next month.
The only question now is , what will the size if it be?
Mick


----------



## JohnDe (14 July 2022)

mullokintyre said:


> The latest employment figures out suggest that there is still plenty of steam in the OZ economy.
> FromABC News
> 
> With pressure on employment it can only mean another rise in the interest rates next month.
> ...






> *5 reasons for 75bp RBA hike in August: DB*
> 
> Deutsche Bank Australia chief economist, Phil O'Donaghoe sees five reasons for the RBA to hike rates by an upsized 75bps in August.
> 
> ...






> *August rate hike a certainty*
> 
> The nation's resilient labour market indicators mean the Reserve Bank will hike the official cash rate by at least 25 basis points at its next meeting on August 2, according to CBA economists.
> 
> ...


----------



## waterbottle (14 July 2022)

mullokintyre said:


> The latest employment figures out suggest that there is still plenty of steam in the OZ economy.
> FromABC News
> 
> With pressure on employment it can only mean another rise in the interest rates next month.
> ...



Time to go harder.

Canada delivered a shock 100bps increase.
South Korea surprised with 50bps.
NZ delivered 50bps consistently and early, with the view to continue indefinitely until inflation controlled.
The Fed is now likely to deliver 75bps, possibly 100bps.

RBA will have to move faster before AUD keeps falling and we end up with imported inflation.


----------



## waterbottle (14 July 2022)

US PPI up 1.1%, higher than the 0.8% expected, for June...


----------



## frugal.rock (14 July 2022)

waterbottle said:


> The Fed is now likely to deliver 75bps, possibly 100bps.



100bps by a nose so far at 52%, 
75bps at 48%



waterbottle said:


> US PPI up 1.1%, higher than the 0.8% expected, for June...




I reckon they will do the same as BoC, 100bps


----------



## waterbottle (14 July 2022)

frugal.rock said:


> 100bps by a nose so far at 52%,
> 75bps at 48%
> 
> 
> ...



Yup, market starting to think the same. 
Oil getting dumped. 
Iron ore getting dumped. 
DXY increasing. 

Market begins to price in recession


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## over9k (14 July 2022)

Yeah all the screeching about 75 when they were planning 50 worked so history suggests we'll get the higher rate this time too.


----------



## over9k (15 July 2022)

Lots of talk about trump finding his comeback moment now too. Something to keep an eye on.


----------



## over9k (15 July 2022)

Translation: 

"We are f**ked".


----------



## over9k (15 July 2022)




----------



## Knobby22 (15 July 2022)

waterbottle said:


> Time to go harder.
> 
> Canada delivered a shock 100bps increase.
> South Korea surprised with 50bps.
> ...



I am a bit shocked. Inflation I thought would be transitory but the video above is convincing.
It seems to me now that recession is inevitable but have lost confidence in my judgement on this.


----------



## waterbottle (15 July 2022)

Knobby22 said:


> I am a bit shocked. Inflation I thought would be transitory but the video above is convincing.
> It seems to me now that recession is inevitable but have lost confidence in my judgement on this.




Transitory is loosely defined. It may have meant a matter of months or a matter of years. 
The problem is that there have been a number of hiccups along the way that the federal reserve couldn't predict e.g war, continuous lockdown in China etc. That have contributed to inflation.


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## mullokintyre (15 July 2022)

The issue for the unfortunate citizens of the world is that the transitoriness or otherwise of inflation is immaterial.
They have to pay the higher prices for the everyday survival needs.
Thrse are mere semantics spoken by the elites who can  overcome these hurdles.
Mick


----------



## over9k (15 July 2022)




----------



## CityIndex (15 July 2022)

waterbottle said:


> Time to go harder.
> 
> Canada delivered a shock 100bps increase.
> South Korea surprised with 50bps.
> ...



The Eurozone’s current situation is a great example of this. While EUR/USD hitting and breaking parity is mostly just symbolic, the Euro’s immense deprecation over the last few months carries serious economic implications.

Most notably, as you already mentioned, rising import costs which will add to inflation. This will likely force the ECB into a relatively aggressive tightening cycle, albeit at the cost of a potential recession.

As for Australia, yesterday’s blowout labour market data does signal a relatively strong position for the economy, which therefore should be able to withstand further rate hikes. Of course, all trading carries risk, but it should be interesting to see if this can help AUD rebound over the coming weeks.


----------



## over9k (15 July 2022)

CityIndex said:


> The Eurozone’s current situation is a great example of this. While EUR/USD hitting and breaking parity is mostly just symbolic, the Euro’s immense deprecation over the last few months carries serious economic implications.
> 
> Most notably, as you already mentioned, rising import costs which will add to inflation. *This will likely force the ECB into a relatively aggressive tightening cycle, albeit at the cost of a potential recession.*
> 
> As for Australia, yesterday’s blowout labour market data does signal a relatively strong position for the economy, which therefore should be able to withstand further rate hikes. Of course, all trading carries risk, but it should be interesting to see if this can help AUD rebound over the coming weeks.



Aka stagflation.


----------



## over9k (15 July 2022)

over9k said:


> Lots of talk about trump finding his comeback moment now too. Something to keep an eye on.


----------



## JohnDe (15 July 2022)

over9k said:


> Aka stagflation.




Not sure that you can call it the beginning of stagflation when unemployment is currently very low - *In economics, stagflation* or recession-inflation is a situation in which the inflation rate is high, the economic growth rate slows, and *unemployment remains steadily high*. It presents a dilemma for economic policy, since actions intended to lower inflation may exacerbate unemployment.


----------



## henrietta (15 July 2022)

> Central banks have made clear that after a sluggish start, they're serious about putting a lid on inflation. Now, as prices soar even faster than expected, they're weighing increasingly drastic options.
> What's happening: Investors see a growing probability that the *Federal Reserve could hike interest rates by a full percentage point at its next meeting* for the first time in the modern era. In June, the Fed raised interest rates by three-quarters of a percentage point, which it hadn't done since 1994.
> US stocks mostly shrugged at the news on Wednesday that consumer prices jumped 9.1% year-over-year in June, a fresh 40-year high and a larger increase than forecast. But policymakers indicated deep concern.
> 
> "Everything is in play," Atlanta Federal Reserve Bank President Raphael Bostic told reporters on Wednesday.By Julia Horowitz, CNN Business





A 1% hike could be interesting.

Cheers
J


----------



## waterbottle (15 July 2022)

China GDP down 2.2% for the quarter... The only time it was worse was during the beginning of COVID lockdown in Jan 2020 when they hit -5%. 

If China's GDP is this low, then what has the US been consuming... RIP retail


----------



## mullokintyre (15 July 2022)

waterbottle said:


> China GDP down 2.2% for the quarter... The only time it was worse was during the beginning of COVID lockdown in Jan 2020 when they hit -5%.
> 
> If China's GDP is this low, then what has the US been consuming... RIP retail



Food, and lots of it.
Big Macs, Really Big Macs, and F%$#$ing enormous Macs.
Mick


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## over9k (15 July 2022)

waterbottle said:


> China GDP down 2.2% for the quarter... The only time it was worse was during the beginning of COVID lockdown in Jan 2020 when they hit -5%.
> 
> If China's GDP is this low, then what has the US been consuming... RIP retail



Pent up demand for travel etc. Simple seasonality with it being summer up there too so retail gets a double fisting after the whole world bought *everything* last year/the year before.


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## over9k (16 July 2022)

PRECISELY: 





https://www.bea.gov/news/2022/personal-income-and-outlays-may-2022 

https://fred.stlouisfed.org/series/PSAVERT 


Fact is that plenty of the printed cash was banked over the past couple of years and it's nowhere near running out yet. Don't get me wrong, more and more of it is having to be spent to do stuff (see: oil prices) so its purchasing power is diminishing, but there's still a fckton of it to go.


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## over9k (16 July 2022)

"If nordstream doesn't come back online, rationing is a certainty".


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## over9k (16 July 2022)

Looks like 75's most likely at the next meeting. Last time markets got what they wanted there was a huge bounce in response.


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## qldfrog (16 July 2022)

waterbottle said:


> China GDP down 2.2% for the quarter... The only time it was worse was during the beginning of COVID lockdown in Jan 2020 when they hit -5%.
> 
> If China's GDP is this low, then what has the US been consuming... RIP retail



I would be more worried on the effect of this on our own mineral exports...
We can go past a US recession/depression a la GFC..but only if China pulls us.
If China does not,we are toast..well we have the Olympics and watermelon/teal in power so we are saved.


----------



## divs4ever (16 July 2022)

qldfrog said:


> I would be more worried on the effect of this on our own mineral exports...
> We can go past a US recession/depression a la GFC..but only if China pulls us.
> If China does not,we are toast..well we have the Olympics and watermelon/teal in power so we are saved.



actually it doesn't  sound like the watermelon/teal  is  so China-tolerant  either  , is that buttered toast  or burned to charcoal

 BTW the Olympics will be a rainbow albatross  by then anyway   ( last i heard Brisbane was the only nominee  )


----------



## waterbottle (18 July 2022)

The Fed mouthpiece is indicating a 75bp rise at the next meeting









						Fed Officials Preparing to Lift Interest Rates by Another 0.75 Percentage Point
					

Policy makers are leaning against a full-point interest-rate increase at their next meeting despite the inflation surge in June.




					www.wsj.com


----------



## JohnDe (18 July 2022)

waterbottle said:


> The Fed mouthpiece is indicating a 75bp rise at the next meeting
> 
> 
> 
> ...




We may not be far behind.


----------



## over9k (18 July 2022)

Update on the shipping situation: Russia is now insuring the ships themselves so that other countries not participating in the sanctions can still get their oil. 

So yeah, sovereign indemnification.


----------



## divs4ever (18 July 2022)

you would almost wonder when they start sinking Russian tankers  and freighters  .. just to help the sanctions along


----------



## bluekelah (18 July 2022)

divs4ever said:


> you would almost wonder when they start sinking Russian tankers  and freighters  .. just to help the sanctions along



That would probably contribute even more to global inflation, not to mention risk of starting a proper war.

Time is running out for Europe as "winter is coming" ;D Them folks will be back to burning firewood for heat in winter.


----------



## divs4ever (19 July 2022)

the financial desperadoes NEED a war  ,  there is no acceptable way to financially engineer their way out this time 

 it will either be dozens of civil wars ,  or a major international  one ( to hide the massive wealth transfers )


bluekelah said:


> That would probably contribute even more to global inflation, not to mention risk of starting a proper war.
> 
> Time is running out for Europe as "winter is coming" ;D Them folks will be back to burning firewood for heat in winter.




 they could always heat Sri Lankan style  , those mansions look pretty comfy ( probably heated pools as well , useful  for mass bathing )


----------



## bluekelah (19 July 2022)

divs4ever said:


> the financial desperadoes NEED a war  ,  there is no acceptable way to financially engineer their way out this time
> 
> it will either be dozens of civil wars ,  or a major international  one ( to hide the massive wealth transfers )
> 
> ...



I think Biden and democrats are too busy doing damage control for their coming election this year to start a war. My prediction is that FED will pivot eventually, probably just before elections as there is no way Biden wins with inflation AND recession, and Powell has to somehow help him out as much as the FED can. Then USA goes into a currency depreciation/negative rates environment ala Japanese style.

That's when gold will do a 5x or 10x  (assuming people still have faith in USD and want to trade commodities in USD)

With US bond yields now at 3% and US Gov Debt over 30trillion thats already 900billion in interest. Tag on budget deficit of likely 1trillion++ this year, not looking good for team USA.


----------



## qldfrog (19 July 2022)

bluekelah said:


> I think Biden and democrats are too busy doing damage control for their coming election this year to start a war. My prediction is that FED will pivot eventually, probably just before elections as there is no way Biden wins with inflation AND recession, and Powell has to somehow help him out as much as the FED can. Then USA goes into a currency depreciation/negative rates environment ala Japanese style.
> 
> That's when gold will do a 5x or 10x  (assuming people still have faith in USD and want to trade commodities in USD)
> 
> With US bond yields now at 3% and US Gov Debt over 30trillion thats already 900billion in interest. Tag on budget deficit of likely 1trillion++ this year, not looking good for team USA.



Hope you are right cf war, agree with your scenario but the Biden cohort is facing a few internal scandals it need to hide quickly.
learnt about that one:








						Nancy Pelosi’s husband buys millions in computer-chip stocks - PanaTimes
					

Paul Pelosi purchased 20,000 shares of Nvidia, a top semiconductor company, worth between $1




					panatimes.com
				



So Biden himself a zombie, his son a ukraine bribes,crack and whore addict, the top democrats shown as rotten..a lot to hide,nothing like triggering a nice war..in Europe.
Tactical nuke around Ukraine is my bet, not sure it will help inflation but will allow more emergency measures.. legal framework is already in place and if nukes fly,democrats are reelected
Hopefully i am wrong


----------



## over9k (19 July 2022)




----------



## over9k (19 July 2022)

With russia KO'd now, libya KO'd a decade ago, and venezuela KO'd ~7 years ago, there's really only one other place the rest can come from, and that's USA.


----------



## over9k (19 July 2022)

bluekelah said:


> I think Biden and democrats are too busy doing damage control for their coming election this year to start a war. My prediction is that FED will pivot eventually, probably just before elections as there is no way Biden wins with inflation AND recession, and Powell has to somehow help him out as much as the FED can. Then USA goes into a currency depreciation/negative rates environment ala Japanese style.
> 
> That's when gold will do a 5x or 10x  (assuming people still have faith in USD and want to trade commodities in USD)
> 
> With US bond yields now at 3% and US Gov Debt over 30trillion thats already 900billion in interest. Tag on budget deficit of likely 1trillion++ this year, not looking good for team USA.



They don't need to. Biden can block/curtail U.S oil shipments any time he likes. 

They're currently trying the "companies need to up supply/drill" angle but because the oil companies own so much of the media, it's not playing well. 

The fact that biden is practically a corpse in a suit (senile/decrepit) doesn't help either. You need only look at how stiff his body language is whenever he does, well, anything, to see just how frail he really is under there. 

Fact is that both sides of politics are owned by the media which is owned by oil companies, wall st et al and so *nothing* is going to happen until that particular cartel is broken (and it isn't going to be broken). Why do you think biden just did a big trip to the middle east rather than just go nuclear on the american oil companies? Their money/donations and ownership of the media there means they have him by the balls. 

So if you can't beat them, join them. 



The next step with russian sanctions would be a naval blockade, not an actual sinking of the tankers, and that really would kick off a shooting war. It would essentially be all the countries participating in the sanctions vs all the countries not doing so. Russians trying to sell their oil along with the indians, chinese etc trying to buy it on one side and everyone else trying to stop said transaction on the other. 

But doing so would be the height of stupidity - a single afternoon of airstrikes (or even giving ukrainian partisans a decent supply of satchel charges) blowing the pipelines themselves and they'd be unable to actually load the tankers for months anyways.


----------



## mullokintyre (19 July 2022)

over9k said:


> "If nordstream doesn't come back online, rationing is a certainty".



Well, according to Zero hedge , it has happened ( Nordstream not coming back online I mean).


> Already days before the July 22 European "Doomsday" when the scheduled Russian 10-day maintenance of the crucial Nord Stream pipeline to Germany is slated to end - but which was thrown into deep doubt given Gazprom recently said it can no longer guarantee its "good functioning" due to crucial turbines being previously held up in Canada related to sanctions - the Russian energy giant has *declared Force Majeure to one major European customer*.
> 
> Simply put, Gazprom declared extraordinary and extreme circumstances to void itself from all contractual obligations to this customer, thus the gas will stop flowing indefinitely, as _Reuters_ reports in a breaking development Monday, "Russian gas export monopoly Gazprom has declared force majeure on gas supplies to Europe to at least one major customer starting June 14, according to the letter seen by Reuters." The letter is dated July 14. "It said the force majeure measure, a clause invoked when a business is hit by something beyond its control, was effective from deliveries starting from June 14," writes _Reuters_.



Things are getting a little warmer.
Mick


----------



## CityIndex (19 July 2022)

RBA Minutes suggest that the central bank will continue tightening monetary policy in an effort to control inflation, but the size (and timing) of future rate hikes will continue to depend on incoming data.

It will be interesting to see how the economic outlook develops in-line with data released ahead of the next interest rate decision, and whether or not it opens the door for expectations of a more hawkish RBA.


----------



## qldfrog (19 July 2022)

mullokintyre said:


> Well, according to Zero hedge , it has happened ( Nordstream not coming back online I mean).
> 
> Things are getting a little warmer.
> Mick



Maybe Europeans will stop crying global warming left and right..and welcome it this winter


----------



## divs4ever (19 July 2022)

the Ice Queen  is coming ( for those that follow their Norse mythology )

 of course others  that follow climate cycles would call it an Ice Age 

 i suppose it is rather fitting that we are cultivating  a culture of snowflakes


----------



## 3 hound (19 July 2022)

qldfrog said:


> So Biden himself a zombie, his son a ukraine bribes,crack and whore addict,





Cocaine in The Ukraine, shows you how sick sociopath like the Biden's are...for Cypress Hill fans.


----------



## qldfrog (19 July 2022)

3 hound said:


> Cocaine in The Ukraine, shows you how sick sociopath like the Biden's are...for Cypress Hill fans.




Stop it @3 hound ! you conspiratist, and what next? Biden pushed for the ukraine war?
Or covid jab did not stop covid?
BS, and i can prove it: I never ever read that on the ABC fact checkers 
Crude irony intended  😉
Now, what's the link with inflation?
Just an engineered  war and energy shortage with no end in view.
No travel, no car, no wealth, no freedom and next no life...
But Sri Lanka did not go to plan.
I repeat myself :
In 1906, Alfred Henry Lewis stated, “There are only nine meals between mankind and anarchy.”


----------



## 3 hound (19 July 2022)

qldfrog said:


> Stop it @3 hound ! you conspiratist, and what next? Biden pushed for the ukraine war?
> Or covid jab did not stop covid?
> BS, and i can prove it: I never ever read that on the ABC fact checkers
> Crude irony intended  😉
> ...




If China Joe's polls continue to nose dive  Hunters laptop will all of a sudden go from the msn calling it Russian disinformation and bleaching it from the entire internet to calling it cold hard fact and saturating it on all communication media.

We can all look to the people of Sri Lanka amd the Dutch farmers for strength and guidance.


" From the 1970s to 2020, with the help of synthetic fertilizers, Sri Lanka had become self-sufficient in rice production. However, Sri Lanka’s government fell under the spell of the “green” revolution promoted by Western liberal elites. In a now-deleted article published by the World Economic Forum (WEF), then Sri Lankan Prime Minister Ranil Wickremesinghe vowed to make his country “rich by 2025,” partially by adopting WEF-sponsored “climate change” initiatives.

Advised by the Rockefeller Foundation, Sri Lankan President Gotabaya Rajapaksa promised to transition the nation’s agriculture industry to organic farming within ten years. In April 2021, he banned “the importation and use of synthetic fertilizers and pesticides and order[ed] the country’s 2 million farmers to go organic,”


----------



## divs4ever (19 July 2022)

3 hound said:


> If China Joe's polls continue to nose dive  Hunters laptop will all of a sudden go from the msn calling it Russian disinformation and bleaching it from the entire internet to calling it cold hard fact and saturating it on all communication media.
> 
> We can all look to the people of Sri Lanka amd the Dutch farmers for strength and guidance.
> 
> ...



 it is ANOTHER Hunter Biden  laptop the Russians  are sorting through  , it has been most helpful in finding which 'medical facilities ' to raid  , and various  other storage  places 

 the question is how many  more Hunter Biden  devices are circulating in the various government agencies ( of various nations  )

 and Sri Lanka might indeed be rich by 2025  , several politicians and business leaders seem to have moved overseas  .. and they have a wonderful palace to renovate  into a hotel and casino  , maybe the president's barbecued cars  can be acclaimed 'folk art'  and a centre-piece in the casino entrance ( they would have to at least rank equally to Hunter Biden's art work )


----------



## over9k (19 July 2022)

over9k said:


> View attachment 144145
> 
> 
> PRECISELY:
> ...


----------



## bluekelah (20 July 2022)

Worth a watch, Professor Henke, The only economist who correctly predicted last year that inflation would get to 9% this year. Forecast for coming year is for inflation to moderate to around 6-7% (which is still super high)  according to his monetary model. It's all about the money supply! 





Looks like one final dead cat bounce this week, before more correction in markets next thursday as technical recession GDP growth figures gets released, together with a 0.75% or maybe even 1% rate rise out of fed FOMC on tuesday/wednesday.


----------



## 3 hound (20 July 2022)

bluekelah said:


> Worth a watch, Professor Henke, The only economist who correctly predicted last year that inflation would get to 9% this year. Forecast for coming year is for inflation to moderate to around 6-7% (which is still super high)  according to his monetary model. It's all about the money supply!
> 
> 
> 
> ...




Watched it, did you see the high school math mistake he did live during the interview??

embarrassing, Kitco is great but they need to edit it out or explain what's going on.


----------



## over9k (21 July 2022)

Still not keen on FNGU but kicking myself for missing SOXL, seems obvious in hindsight now.

At least I got the others.


----------



## over9k (22 July 2022)

Alright so it looks like the 14th was the bottom for, well, almost everything. Even growth plays have run hard since. 

However: 





Looks like tech/growth might be in for another massacre tomorrow (tomorrow will be telling). 

I might sell some nrgu & grab some soxl if so.


----------



## waterbottle (22 July 2022)

We may have hit the bottom in hindsight, particularly if the market thinks the main driver of inflation (oil prices) has been beaten (looks like it may have been). 

That may change next week if the Federal reserve comes out with a surprise 100bps hike. It wouldn't be the only central bank to have surprised...


----------



## mullokintyre (22 July 2022)

Overnight, the ECB made a surprisng 50poinyt increase in interestd for the EU.
The bank also announced that it would be buying  the debt of its most struggling economies ( don't know how they rank each one, but none of them seem to be in great shape).
From The evil murdoch press 


> The European Central Bank raised interest rates by a larger-than-expected half-percentage point and unveiled a new plan to buy the debt of Europe’s most vulnerable economies, taking bold action to protect the currency union as it navigates the twin threats of skyrocketing inflation and slowing economic growth.
> The move takes the ECB’s key interest rate to zero, ending the bloc’s eight-year experiment with negative interest rates and capping two weeks of drama for Europe, which saw Russia cut and then restart supply of vital natural gas and the government of Italy collapse.
> 
> The rate increase comes despite rapidly accumulating challenges facing Europe’s economy and the currency union’s cohesion – from a looming energy crisis to a protracted war next door, mounting political instability at home, and what many economists think has become an inevitable recession.
> ...



So, up until last night, folks with money in the bank were forced to PAY interest for the pleasure.
At least now it is neutral.
Mick


----------



## waterbottle (22 July 2022)

Unemployment rising in the US... Companies issuing media releases of further job cuts. 

Not too sure where this risk-on run has come from. I guess volatility is part of the bear.


----------



## 3 hound (22 July 2022)

waterbottle said:


> Unemployment rising in the US... Companies issuing media releases of further job cuts.





Remember "the great resignation", like last week.

The poor fools who listened to that horseshit and are now unemployed.


----------



## over9k (22 July 2022)

waterbottle said:


> We may have hit the bottom in hindsight, particularly if the market thinks the main driver of inflation (oil prices) has been beaten (looks like it may have been).
> 
> That may change next week if the Federal reserve comes out with a surprise 100bps hike. It wouldn't be the only central bank to have surprised...



Oil's up another ~1.3% bottle so perhaps not.


----------



## over9k (23 July 2022)

Wasn't my silliest topup.

(I make a point of not mentioning every trade I make as I don't want anyone shadowing me but I'm just posting this one so people know I'm not talking out of my ass when I say I've done something).

Next play is SOXL but haven't pulled the trigger on that yet. Might do that the day before the fed hike is announced as every other fed move lately has had a sea of green in response.


----------



## Smurf1976 (23 July 2022)

waterbottle said:


> Not too sure where this risk-on run has come from. I guess volatility is part of the bear.



Simply that markets don't move in a straight line.

Just my opinion, and I could well be wrong, but I'm expecting one more proper decline to bring about a bottom.

Proper meaning it's enough to be mainstream news, it gets the doom and gloom predictions coming out and so on. Just my


----------



## divs4ever (23 July 2022)

there is obviously a train-wreck  coming  , but are we watching the correct train-line 

 ( it could easily be a catastrophic  storm season in the Northern Hemisphere )


----------



## qldfrog (23 July 2022)

divs4ever said:


> there is obviously a train-wreck  coming  , but are we watching the correct train-line
> 
> ( it could easily be a catastrophic  storm season in the Northern Hemisphere )



Add an engineered energy crisis and a media / social media catastrophe creating news and indeed the first power cuts to come in Europe could see the next not so black .Swan event.
At least inflation will be out of mind, Printing will be back and a real black swan can close the deal with fiat currencies.but i would be back in shares by then


----------



## waterbottle (23 July 2022)

over9k said:


> Oil's up another ~1.3% bottle so perhaps not.



Yeah, too volatile to read and the geopolitics


Smurf1976 said:


> Simply that markets don't move in a straight line.
> 
> Just my opinion, and I could well be wrong, but I'm expecting one more proper decline to bring about a bottom.
> 
> Proper meaning it's enough to be mainstream news, it gets the doom and gloom predictions coming out and so on. Just my




Is there though? 

That was my thesis too, but this past week - almost 5 days of straight gains on the NASDAQ has got me thinking otherwise. 
If the Fed sticks to a 75bps rise then that may not cause the expected final leg down. 

Also the highest risk asset - crypto - is holding up quite well. Its performance has correlated quite well with the NASDAQ for the past month.


----------



## divs4ever (23 July 2022)

qldfrog said:


> Add an engineered energy crisis and a media / social media catastrophe creating news and indeed the first power cuts to come in Europe could see the next not so black .Swan event.
> At least inflation will be out of mind, Printing will be back and a real black swan can close the deal with fiat currencies.but i would be back in shares by then



 black swans  are by definition unexpected  , the energy debacle  you could see coming  in November 2020 ( after Biden was elected ) ( not to mention all the 'oil wars ' leading up to that )

 the excessive printing well only Central Bankers  can't see the consequence of that ( or so they claim )

 and the crazy debt-shuffling  game , plenty of hints since September 2019  , 

 however we might have the mother-of-all train-wrecks  right in the middle of the  rail yard  taking out almost everything ( since the current world LOVES inter-connections )

 housing-affordability schemes  , super-funds losing money  etc etc  .. nothing to worry about there ( trust me i am an aspiring politician , WINK )

 i wonder how the coming job losses will affect the super-funds


----------



## qldfrog (23 July 2022)

divs4ever said:


> black swans  are by definition unexpected  , the energy debacle  you could see coming  in November 2020 ( after Biden was elected ) ( not to mention all the 'oil wars ' leading up to that )
> 
> the excessive printing well only Central Bankers  can't see the consequence of that ( or so they claim )
> 
> ...



No effect, all salaries have been slugged extra % in super this year.
Sadly no super fund we can invest to dry the suckers and move these dollars into our pockets


----------



## Smurf1976 (24 July 2022)

waterbottle said:


> That was my thesis too, but this past week - almost 5 days of straight gains on the NASDAQ has got me thinking otherwise.



Anything is possible and any theory can turn out to be wrong.

I do have in mind though that powerful rallies aren't uncommon during a bear market so it's not of itself a definitive answer.

I'm keeping my mind open to both possibilities or a combination (eg short term bottom but not _the_ bottom).


----------



## divs4ever (24 July 2022)

qldfrog said:


> No effect, all salaries have been slugged extra % in super this year.
> Sadly no super fund we can invest to dry the suckers and move these dollars into our pockets



 i liquidated  my super in 2010  ,  and shifted onto a disability pension in 2017  , so that super fund cash isn't mine ,
 although i did invest in a few fund managers  since then ... i have this theory it is better to investor in the bookmaker/casino  than the gambling event (  race/game/card flip )

  so i managed to dodge all those ( recent ) super contributions  that have been propping up our economy 

 it will be interesting to see the payouts  given to my fellow baby-boomers  , i suspect the coming inflation   will underwhelm   the retirees  ( maybe even the former politicians )


----------



## qldfrog (24 July 2022)

divs4ever said:


> i liquidated  my super in 2010  ,  and shifted onto a disability pension in 2017  , so that super fund cash isn't mine ,
> although i did invest in a few fund managers  since then ... i have this theory it is better to investor in the bookmaker/casino  than the gambling event (  race/game/card flip )
> 
> so i managed to dodge all those ( recent ) super contributions  that have been propping up our economy
> ...



With the rise of ETF, the traditional fund manager is not making as much of super, and most of these etf fees are going o/s and not purely related to our own super system.
I would like to get some of my fees to sunsuper now renamed...and that is not possible


----------



## ducati916 (24 July 2022)

Smurf1976 said:


> Anything is possible and any theory can turn out to be wrong.
> 
> I do have in mind though that powerful rallies aren't uncommon during a bear market so it's not of itself a definitive answer.
> 
> I'm keeping my mind open to both possibilities or a combination (eg short term bottom but not _the_ bottom).







The 2008 bear had similar rallies. The 1966-1982 bear, the same.

Post 2008 is when monetary policy added QE for asset price inflation. 2020 added Fiscal stimulus. Outside of IMF, nothing left.

If you can't raise rates above inflation to tame inflation and you can't pump cash to avoid a bear, then you will have a bear.


jog on
duc


----------



## Smurf1976 (24 July 2022)

An other example of inflation, I hear that tickets to Bruce Springsteen concerts are selling for USD 5000.









						Tickermaster has forced Bruce Springsteen prices high as $5,000
					

Mid-floor tickets for the Boss' 2023 US arena tour are going for $4,000 to $5,000 each on Ticketmaster, with less desirable seats still fetching high prices at more than $1,000.




					www.dailymail.co.uk
				




That's the face value of tickets directly from the official seller. Not scalpers or private resales but the original face value.

This is a ticket to attend the concert in the normal manner. It's not a meet and greet with the artist, it doesn't get you in the tour bus or backstage or anything like that. It's a ticket to the show.

Now I'll admit I'm not a big fan of Springsteen but my point isn't about taste in music or whether he's still any good live or not but simply that this is getting truly ridiculous. What ordinary person can afford that sort of money to go to a concert?

Whatever happened to bands just doing a second show the next night if there was enough demand?


----------



## divs4ever (24 July 2022)

qldfrog said:


> With the rise of ETF, the traditional fund manager is not making as much of super, and most of these etf fees are going o/s and not purely related to our own super system.
> I would like to get some of my fees to sunsuper now renamed...and that is not possible



 holding SUN hasn't been unprofitable  ( SO FAR )  had to do a bit of  extra  buying/reducing  , and i even escaped AMP making some profit 

  and most ETFs have a wholesale equivalent  if the ETFs  offer an advantage  to the fund manager ( reduced research  and balancing  and arguably less costs ) wouldn't a smart manager use SOME ETFs in the client  portfolios  , and 'cherry-pick the opportunities  to beat the market 

 mind you   some LICs still offer a better alternative  for a fund manager  as you can snipe them when trading at a discount 

 i was a bit concerned a few years back when there was a concerted push by several super funds to increase international exposure  ( especially the union-based ones  )


----------



## qldfrog (24 July 2022)

divs4ever said:


> holding SUN hasn't been unprofitable  ( SO FAR )  had to do a bit of  extra  buying/reducing  , and i even escaped AMP making some profit
> 
> and most ETFs have a wholesale equivalent  if the ETFs  offer an advantage  to the fund manager ( reduced research  and balancing  and arguably less costs ) wouldn't a smart manager use SOME ETFs in the client  portfolios  , and 'cherry-pick the opportunities  to beat the market
> 
> ...



What i mean is super funds are a protected mandatory and enforced closed market taking fees irrespective of performances. 
I wish i could invest in that gravy train.
For a while, Australia United, Magellan, Badcock or even AMP..you remember..were benefiting from these indirectly but now with etfs, you have to get shares in Vanguard, etc and not being mainly Australian super exposure, it is not so much an easy ride...
Vanguard returns will feel inflation


----------



## divs4ever (24 July 2022)

Badcock  was before my investing time  ,  and i had the time and the will so went 'freelance' ( my own non-SMSF   adventure )

 i could see regulations  being a problem  ( in formal Super )  even back in 2010 and my previous glimpses of compulsory super   left me chilly  , i could see all those 'extras ' eating any  gains  and with real inflation still to come down the  road 

 but as a former Prime Minister once said , life is not meant to be easy  ( but can you be rewarded for the extra effort  ?? )

 but remember it is all fun and games ( and lies and  false data ) until the inflation stops  THEN things get nasty 

 don't be fooled  successive governments will be obsessed with meddling with Super  ( it after all ,  is only another pot of money to them )

 expect something crazy like compelling Super Funds to buy into a floated NBN ( either in partnership with TLS or some other sell-off )


----------



## qldfrog (24 July 2022)

divs4ever said:


> Badcock  was before my investing time  ,  and i had the time and the will so went 'freelance' ( my own non-SMSF   adventure )
> 
> i could see regulations  being a problem  ( in formal Super )  even back in 2010 and my previous glimpses of compulsory super   left me chilly  , i could see all those 'extras ' eating any  gains  and with real inflation still to come down the  road
> 
> ...



Mandatory green targets, mandatory investment in economic rebirth fund scheme etc..i am retired..aka ended work..but super is not my friend


----------



## divs4ever (24 July 2022)

but that super fund might be all the current worker has left   , they are still busy  cranking up pension age towards 70 and beyond


----------



## divs4ever (24 July 2022)

going to be interesting to see if vaxx injuries   start having folks unemployable by 55  ( and i mean LOTS of folks )


----------



## 3 hound (24 July 2022)

divs4ever said:


> but that super fund might be all the current worker has left   , they are still busy  cranking up pension age towards 70 and beyond




"Doing the right thing" will become dying as soon as you can no longer work anymore and before you start relying on government services to live.

Never saw the movie but I think this concept was explored in a movie called "Logan's Run" possibly from the 70's??


----------



## JohnDe (24 July 2022)

Yep, I can see this - 



> *Profits — not war or weather — may be driving inflation and price hikes, as more Aussies report financial pain*
> 
> No prizes for guessing the single biggest threat to our economy right now. It's inflation.
> 
> ...


----------



## waterbottle (25 July 2022)

It's GDP and Federal Reserve week!

The latest GDPNow figures remain in negative territory, -1.6%! Albeit up from previous estimates although the trend is clear. I heard an economist on ABC news saying that there was expectation for a GDP of 0.4%!!!!!! *WHAT!*
If expectations are for a positive figure then I'd expect blood in the streets thereafter.




The federal reserve meeting will also be interesting. WSJ published an article last week stating that the expectation will be for a 0.75% hike. Last time this same author published the expected figure (0.75% at the time) it was true. Whether or not he can be believed is difficult to say. Some whispers of a 1% hike, although CME FedWatch tool giving a 79% chance of a 75bps lift.

Will be interesting to see what happens to risky assets regardless. My main indicator here is BTC. It seems to be leading the NASDAQ, perhaps given how ubiquitous it has become and perhaps because its reflection of how much free cash there is to throw at risky assets...


----------



## divs4ever (25 July 2022)

3 hound said:


> "Doing the right thing" will become dying as soon as you can no longer work anymore and before you start relying on government services to live.
> 
> Never saw the movie but I think this concept was explored in a movie called "Logan's Run" possibly from the 70's??



 Logan's Run , and Soylent Green   gives a different scenario

 but if you don't rely on the government ,.. there is no need for a government 

just stating the obvious 

 but if trying to  implement  a Logan's Run scenario , government officials and politicians should lead by example  ( maybe a productivity test  needs to be run through the public service ranks )


----------



## JohnDe (25 July 2022)

3 hound said:


> "Doing the right thing" will become dying as soon as you can no longer work anymore and before you start relying on government services to live.
> 
> Never saw the movie but I think this concept was explored in a movie called "Logan's Run" possibly from the 70's??




Logan's Run, I enjoyed the book. The movie and TV series was good, back in the day.

The world had gone through a disastrous period of war and shortages. Only one major city survives, the people living in relative luxury but strict control. Not many seem to mind, because when they reach the age of 35 they are teleported to another place with more freedoms. Some people run because they do not believe that there is another place, they think it's a way to control the population. Those that run are exterminated without trial. The runners are correct, there is no place. Those in charge worked out the ideal population size, 35 years old was deemed the age that people started to question the system.

A bit like the old wars, population control.


----------



## over9k (26 July 2022)

vs 





So how are those growth bets going lads?


----------



## waterbottle (26 July 2022)

It begins... Retailers now warning of smaller profits... I wonder what will happen to Amazon. Biden administration in damage control trying to redefine recession









						Walmart warning sends stock price plunging, renews retail worries
					

Walmart becomes the latest big-name retailer to strike a downbeat tone on the  health of the U.S. consumer.




					finance.yahoo.com
				












						Yellen says signs of U.S. recession aren’t in sight 'when you’re creating almost 400,000 jobs a month'
					

Treasury Secretary Janet Yellen expressed confidence in the Federal Reserve’s fight against inflation and said she doesn’t see any sign that the U.S. economy is in a broad recession.



					fortune.com


----------



## over9k (26 July 2022)

Still playing energy. Energy prices are much stickier


----------



## waterbottle (26 July 2022)

over9k said:


> Still playing energy. Energy prices are much stickier



What time frame though?


----------



## over9k (26 July 2022)

waterbottle said:


> What time frame though?



Until something looks like changing.


----------



## waterbottle (26 July 2022)

Online retailers now reporting lower incomes... Shopify stating the covid e-commerce transition is reverting... Planning to lay-off 10% of staff! Down by 16% on open, followed by PayPal down 4%. This is not looking good.... Watching to see what happens with Amazon... 









						Shopify stock sinks as company plans layoffs and says e-commerce projections were too upbeat
					

At the height of the COVID-19 crisis, many companies levered to online spending predicted that the pandemic would permanently alter the trajectory of e-commerce growth for the better as people built new shopping habits online.




					finance.yahoo.com
				




Meanwhile, no Fed meeting in August. This meeting will be their best chance at a 100bps blow...


----------



## over9k (27 July 2022)

Walmart was slaughtered too. 

As I've posted about a zillion times, once a *thing* is bought, you all too often don't need to buy another one for quite some time. One of the few exceptions to this is tech, hence microchips/semiconductors being a much better long term play. 

I haven't bought any SOXL yet though (yet).


----------



## waterbottle (27 July 2022)

over9k said:


> Walmart was slaughtered too.
> 
> As I've posted about a zillion times, once a *thing* is bought, you all too often don't need to buy another one for quite some time. One of the few exceptions to this is tech, hence microchips/semiconductors being a much better long term play.
> 
> I haven't bought any SOXL yet though (yet).




Consumption is the driving force behind the US economy though. 

I'm not seeing the chips play. Sure, they're in demand, but fabrications are going to take years to establish. The CHIPs won't address the imbalance overnight.


----------



## over9k (27 July 2022)

waterbottle said:


> Consumption is the driving force behind the US economy though.
> 
> I'm not seeing the chips play. *Sure, they're in demand, but fabrications are going to take years to establish. The CHIPs won't address the imbalance overnight.*



Precisely, so in the meantime, there's a shortage  


On-topic: Microsoft reported excellent earnings after the close. Tech's run as a result.


----------



## waterbottle (27 July 2022)

over9k said:


> Precisely, so in the meantime, there's a shortage
> 
> 
> On-topic: Microsoft reported excellent earnings after the close. Tech's run as a result.



I'm pretty sure both MSFT and GOOG were an earnings miss.... 

This is just unpredictable market sorcery


----------



## mullokintyre (27 July 2022)

Inflation in OZ to 6.1 Percent.
And little liklihood it will drop any time soon.
So, do we get25,  50, 75 or 100 BPS  from the RBA??
Mick


----------



## waterbottle (27 July 2022)

mullokintyre said:


> Inflation in OZ to 6.1 Percent.
> And little liklihood it will drop any time soon.
> So, do we get25,  50, 75 or 100 BPS  from the RBA??
> Mick



Depends on what the Fed does. Central banks are synchronising. Even Phil Lowe now admits that they should be hitting inflation harder. 
Canada had a surprise 100bps, and so did the ECB @ 50bps.


----------



## divs4ever (27 July 2022)

0.5% ( or the less likely 0.40% ) in my opinion 

 this is about economic destruction  and the Central Banks are pretending they are useful ( instead of the architects of this mess )


----------



## CityIndex (27 July 2022)

mullokintyre said:


> Inflation in OZ to 6.1 Percent.
> And little liklihood it will drop any time soon.
> So, do we get25,  50, 75 or 100 BPS  from the RBA??
> Mick



The RBA’s preferred measure of inflation, the trimmed mean, beat market estimates. This keeps the central bank’s forecasts of 7% inflation this year intact, and warrants the need for higher interest rates.

However, the softer-than-expected headline CPI print seems to have erased bets on a more aggressive 75bps move by the RBA for the time being.

Should be interesting to see how market speculation develops leading up to Tuesday’s meeting, and what impact tonight’s Fed decision has as well.


----------



## SirRumpole (27 July 2022)

What happens when you tackle inflation the wrong way.









						As prices soared, Turkey bucked the global trend and didn't raise interest rates. This was the result
					

While many countries around the world are jacking up interest rates in an attempt to curb inflation, Turkey is trying an unorthodox approach: Its central bank is refusing to touch them.




					www.abc.net.au


----------



## againsthegrain (27 July 2022)

SirRumpole said:


> What happens when you tackle inflation the wrong way.
> 
> 
> 
> ...




So when are they going to swim in Erdogan's pool and piss in his shower?


----------



## waterbottle (27 July 2022)

Well inflation is here to stay with headlines like these 









						US officials say 'biggest fear' has come true as Russia cuts gas supplies to Europe | CNN Politics
					

The Biden administration is working furiously behind the scenes to keep European allies united against Russia as Moscow further cuts its energy supplies to the European Union, prompting panic on both sides of the Atlantic over potentially severe gas shortages heading into winter, US officials say.




					edition.cnn.com


----------



## martaart077 (27 July 2022)

CPI at 6.1%. 
What are they actually measuring? Spend a day in my life getting petrol, having thd kids at school and shopping in the supermarket.  Nothing fancy like heating the house or whatever. 
This CPI does not reflect reality. I'm starting to think this measure is irrelevant and does not reflect the lives and drop in living standards for the common man/women/people/they. 

I still don't understand why the nominal interest rate doesn't reflect inflation plus cash rate?


----------



## JohnDe (27 July 2022)

martaart077 said:


> CPI at 6.1%.
> What are they actually measuring? Spend a day in my life getting petrol, having thd kids at school and shopping in the supermarket.  Nothing fancy like heating the house or whatever.
> This CPI does not reflect reality. I'm starting to think this measure is irrelevant and does not reflect the lives and drop in living standards for the common man/women/people/they.
> 
> I still don't understand why the nominal interest rate doesn't reflect inflation plus cash rate?




Simple explanation here -


----------



## JohnDe (27 July 2022)

martaart077 said:


> CPI at 6.1%.
> What are they actually measuring? Spend a day in my life getting petrol, having thd kids at school and shopping in the supermarket.  Nothing fancy like heating the house or whatever.
> This CPI does not reflect reality. I'm starting to think this measure is irrelevant and does not reflect the lives and drop in living standards for the common man/women/people/they.
> 
> I still don't understand why the nominal interest rate doesn't reflect inflation plus cash rate?















						Inflation and its Measurement | Explainer | Education
					

This series provides short, concise explanations for various economics topics.




					www.rba.gov.au


----------



## over9k (27 July 2022)

martaart077 said:


> CPI at 6.1%.
> What are they actually measuring? Spend a day in my life getting petrol, having thd kids at school and shopping in the supermarket.  Nothing fancy like heating the house or whatever.
> This CPI does not reflect reality. I'm starting to think this measure is irrelevant and does not reflect the lives and drop in living standards for the common man/women/people/they.
> 
> I still don't understand why the nominal interest rate doesn't reflect inflation plus cash rate?



Every time the data comes back unfavourably they change the way they record/count it to make it look better. Take unemployment for example - did you know that if you work even 1 hour in the last fortnight the government counts you as employed? 

Now would you consider 1 hour a fortnight to be "employed"? No? 

Right, now assume every other government data point is fudged in some kind of similiar manner and work your way out from there. 

Official stats are about as honest as the politicians that decide how to measure them.


----------



## againsthegrain (27 July 2022)

over9k said:


> Every time the data comes back unfavourably they change the way they record/count it to make it look better. Take unemployment for example - did you know that if you work even 1 hour in the last fortnight the government counts you as employed?
> 
> Now would you consider 1 hour a fortnight to be "employed"? No?
> 
> ...



Think even working for the dole counts as working or doing a random course and upskilling to stay on the dole shifts you out of the unemployed bracket


----------



## JohnDe (27 July 2022)

over9k said:


> Every time the data comes back unfavourably they change the way they record/count it to make it look better. Take unemployment for example - did you know that if you work even 1 hour in the last fortnight the government counts you as employed?




Not quite.

*How employment is measured: The one hour rule*​​Less than 50 people in the sample of 50,000 report they only work one hour. That works out to be 15,000 people out of around 12 million employed (or 0.1%) and movements in this number are not large enough to affect total employment.​​The ABS defines people as 'employed' if they work one hour or more in the reference week. The vast majority of part-time employed people work more than 15 hours.​​The 'one hour rule' is used internationally and allows employment figures to be compared with other countries. It has been used in Australia since the Labour Force Survey began, enabling comparisons to be made over a long period of time.​​The ABS also has a range of other measures, such as underemployment, that help to understand how many people are fully employed, and how many would like to be working more.​




__





						Labour Force Explained
					





					www.abs.gov.au


----------



## over9k (27 July 2022)

JohnDe said:


> Not quite.
> 
> *How employment is measured: The one hour rule*​​Less than 50 people in the sample of 50,000 report they only work one hour. That works out to be 15,000 people out of around 12 million employed (or 0.1%) and movements in this number are not large enough to affect total employment.​​The ABS defines people as 'employed' if they work one hour or more in the reference week. The vast majority of part-time employed people work more than 15 hours.​​The 'one hour rule' is used internationally and allows employment figures to be compared with other countries. It has been used in Australia since the Labour Force Survey began, enabling comparisons to be made over a long period of time.​​The ABS also has a range of other measures, such as underemployment, that help to understand how many people are fully employed, and how many would like to be working more.​
> 
> ...



Yes quite. I wasn't commenting on how many people work 1 hour, just that 1 hour is considered "employed". Let's say it was one evening shift a week flipping burgers and so you worked 10 hours in the last fortnight - is that employed? Are you employed on one shift a week?

To even use their own line here, I wouldn't consider 15 hours a week employed either. I'd consider income above a certain point (enough to cover a certain level of basic living expenses or what have you) to be employed as employed implies you can stand on your own two feet financially speaking. That's the purpose of employment so it's where the line for "good enough" should be IMO. A doctor does not consider you healthy if they only fix half of your health issues so we shouldn't be considering you employed if you only make enough to cover half of basic living expenses. 

But all of this is besides the point. My point is not that I think things should be counted in ABC way, just that they are counted in ways that you might not think that they are. 

Let's apply this to inflation - if house prices soared 25% but ordinary everyday items didn't move, do we have a 0% inflation rate? 

As I said, my point here is not actually to argue about how the numbers should be counted, just that they way they do it is, shall we say, questionable.


----------



## JohnDe (27 July 2022)

over9k said:


> Yes quite. I wasn't commenting on how many people work 1 hour, just that 1 hour is considered "employed". Let's say it was one evening shift a week flipping burgers and so you worked 10 hours in the last fortnight - is that employed? Are you employed on one shift a week?
> 
> 
> As I said, my point here is not actually to argue about how the numbers should be counted, just that they way they do it is, shall we say, questionable.




You said "Every time the data comes back unfavourably they change the way they record/count it to make it look better. Take unemployment for example - did you know that if you work even 1 hour in the last fortnight the government counts you as employed?"

You are incorrect.

I showed you the reason you are incorrect and a link to read. And now you have moved the goal posts.

Yes, I considered 10 hour paid work as employed.

*employed*​_(of a person) having a paid job._​_having a job working for a company or another person_​



> *How employment is measured: The one hour rule*
> Less than 50 people in the sample of 50,000 report they only work one hour. That works out to be 15,000 people out of around 12 million employed (or 0.1%) and movements in this number are not large enough to affect total employment.
> The ABS defines people as 'employed' if they work one hour or more in the reference week. The vast majority of part-time employed people work more than 15 hours.
> The 'one hour rule' is used internationally and allows employment figures to be compared with other countries. It has been used in Australia since the Labour Force Survey began, enabling comparisons to be made over a long period of time.
> The ABS also has a range of other measures, such as underemployment, that help to understand how many people are fully employed, and how many would like to be working more.


----------



## over9k (27 July 2022)

JohnDe said:


> You said "Every time the data comes back unfavourably they change the way they record/count it to make it look better. Take unemployment for example - did you know that if you work even 1 hour in the last fortnight the government counts you as employed?"
> 
> You are incorrect.
> 
> ...



Wrong again. You've strawmanned. I never said they changed it to 1 hour counting as employed in response to bad employment data, I said that they count the data in a questionable way and they change how they do this when the numbers aren't favourable. Do you not think that they might have counted it in the way that they have right from the outset for a less than noble reason?

The very fact that you consider 10 hours to be "employed" and I do not is precisely what proves my point.

If you want to get really argumentative, the CPI basket of goods is changed all the time, which, considering that this is a thread about INFLATION, and someone was asking why the numbers seem so off, was my point all along.


----------



## divs4ever (27 July 2022)

waterbottle said:


> Well inflation is here to stay with headlines like these
> 
> 
> 
> ...



 why not an accurate headline 

 like Germany delays certification of Nordstream 2 

 but Russia won't make a fuss about that as it now sees ( most of ) Europe  as HOSTILE 

 i suspect they will quite happily watch Europe implode   , throwing a lifeline to a few select nations  ( Hungary , Serbia  , maybe Turkey  although if Turkey joins BRICS the BRICS cooperative would help then )


----------



## divs4ever (27 July 2022)

over9k said:


> Wrong again. You've strawmanned. I never said they changed it to 1 hour counting as employed in response to bad employment data, I said that they count the data in a questionable way and they change how they do this when the numbers aren't favourable. Do you not think that they might have counted it in the way that they have right from the outset for a less than noble reason?
> 
> The very fact that you consider 10 hours to be "employed" and I do not is precisely what proves my point.
> 
> If you want to get really argumentative, the CPI basket of goods is changed all the time, which, considering that this is a thread about INFLATION, and someone was asking why the numbers seem so off, was my point all along.



 they WERE doing that in Australia for a period  ( maybe still are ) ( one hour paid employment per fortnight  and in once case one hour per fortnight UNPAID as prescribed by a mental health professional )

 in fact i have documentation on how the 'unemployed ' were tallied in Australia dated 1990   i doubt that has  been changed for the better 

 so therefore  as biased as 'street-level ' data is , i take that as a reference point


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## SirRumpole (27 July 2022)

divs4ever said:


> they WERE doing that in Australia for a period  ( maybe still are ) ( one hour paid employment per fortnight  and in once case one hour per fortnight UNPAID as prescribed by a mental health professional )
> 
> in fact i have documentation on how the 'unemployed ' were tallied in Australia dated 1990   i doubt that has  been changed for the better
> 
> so therefore  as biased as 'street-level ' data is , i take that as a reference point




This just shows the sillyness of relying on the 'headline' figure.

What we need is a breakdown of what percentage of the sample are working n hours per week from 1 hour up to 40+


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## over9k (28 July 2022)

Here's your story of the last 6 months. It's all it is and is going to be for quite a while.


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## waterbottle (28 July 2022)

over9k said:


> View attachment 144618
> 
> 
> Here's your story of the last 6 months. It's all it is and is going to be for quite a while.




Supposedly PCE > GDP when the biggest issue right now is controlling inflation. In fact, GDP no longer matters anymore because recession is being redefined (thank you St. Yellen) 

Remains to be seen if JPowell will follow through on rate hikes. The trend is for accelerating rate hikes with surprises for the past two. It would make sense for them to lift by 100bps, not meeting in August and reconsider in September. But what do I know, i'm just a monkey with a trading account.


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## divs4ever (28 July 2022)

SirRumpole said:


> This just shows the sillyness of relying on the 'headline' figure.
> 
> What we need is a breakdown of what percentage of the sample are working n hours per week from 1 hour up to 40+



 but the political motivation  is to grab the headlines and that was the problem circa 1990  and most likely  is still an accepted practice


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## divs4ever (28 July 2022)

waterbottle said:


> Supposedly PCE > GDP when the biggest issue right now is controlling inflation. In fact, GDP no longer matters anymore because recession is being redefined (thank you St. Yellen)
> 
> Remains to be seen if JPowell will follow through on rate hikes. The trend is for accelerating rate hikes with surprises for the past two. It would make sense for them to lift by 100bps, not meeting in August and reconsider in September. But what do I know, i'm just a monkey with a trading account.



 i see your logic  , but suspect  the Fed fears the political backlash  ( and if the market implodes , that might include some very powerful critics )

 if the Fed really cared about the economy  it would ACTUALLY tighten  and would have started hiking earlier


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## Smurf1976 (28 July 2022)

divs4ever said:


> in fact i have documentation on how the 'unemployed ' were tallied in Australia dated 1990 i doubt that has been changed for the better



I've been selected to participate in the ABS' data collection process in the past.

Bearing in mind that it's quite invasive with the data collected and participation is in no way voluntary. If you're chosen, you're doing it and you can't legally keep too many secrets about your life. 

Having been through the process, I'd be surprised if some participants didn't do things which distort the data. When everything you buy is being recorded, there'd be at least some temptation to omit mention of anything someone views as shameful or otherwise didn't want to tell the government about even where no law is being broken. Paying for sex would be an obvious example that some would probably not want to disclose but even things like alcohol, cigarettes or gambling some might view as a sin of sorts that they'd rather not admit to especially not if they're at the high end of consumption.

So I'm a bit wary of statistics yes.


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## divs4ever (28 July 2022)

the documentation  was a directive given to a  government department management 

 but it do show  a deliberate intent to warp the data collection , so you must wonder how much has changed in the last 30 years


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## over9k (28 July 2022)

Yeah so anyway, fed hiked the bigger 75 points (just like the other times), markets loved it (just like the other times) and now futures are in the red the literal day after (just like the other times).

And here's the current dot plot:


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## mullokintyre (28 July 2022)

over9k said:


> Yeah so anyway, fed hiked the bigger 75 points (just like the other times), markets loved it (just like the other times) and now futures are in the red the literal day after (just like the other times).



Yep, I am going to sell a few things today on the up, with the intention of buying them back cheaper later non.
Mick


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## waterbottle (28 July 2022)

Are the markets being irrational or am i


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## JohnDe (28 July 2022)

1967 Australian prices at the drive-in


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## over9k (28 July 2022)

waterbottle said:


> Are the markets being irrational or am i



Rumours of tech's demise have been greatly exaggerated (maybe). 

NDX futures are still deepest in the red. 



Jokes aside: 




This is what I call an "area of general bullsh!t".


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## waterbottle (28 July 2022)

over9k said:


> Rumours of tech's demise have been greatly exaggerated (maybe).
> 
> NDX futures are still deepest in the red.
> 
> ...




chop suey


----------



## frugal.rock (28 July 2022)

waterbottle said:


> Are the markets being irrational or am i



Therein lies the problem... either you both are, or, are not!
However, if the market is always "correct" it must also be rational, so one must apply sound rationale, otherwise,  one may succumb to irrationality.


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## 3 hound (28 July 2022)

martaart077 said:


> This CPI does not reflect reality.




My earliest awareness of economics was hearing adults say this phrase when I was a child. Now I'm old and I am still hearing the same phrase.

As much as many economists try and pass themselves off as technical people or try and promote economics as a science - economists just aren't technical people, and economics just isn't a science.


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## divs4ever (28 July 2022)

3 hound said:


> My earliest awareness of economics was hearing adults say this phrase when I was a child. Now I'm old and I am still hearing the same phrase.
> 
> As much as many economists try and pass themselves off as technical people or try and promote economics as a science - economists just aren't technical people, and economics just isn't a science.



 of course it is a science  ,
 it is the science of twisting  figures  irresponsibly  , now IF the figures were twisted responsibly ( gross anomalies incur a jail sentence  ) THAT is accounting


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## Value Collector (29 July 2022)

mullokintyre said:


> Yep, I am going to sell a few things today on the up, with the intention of buying them back cheaper later non.
> Mick



Inflation is a weird one though, in that it can definitely cause prices to fall for financial assets in the short term, but you have to balance that with the fact that inflation will push prices of things up over time, so you don’t want to sell quality assets and end up holding cash as the value of those assets is pushed up by inflation, especially if holding those assets would have rewarded you with income, and saved you transaction fees.

For example I know a person who recently sold their home and is now renting because they are convinced a large drop in home prices will give them an opportunity for a wind fall trading profit. This might turn out to be true, but it much also turn out that they end up holding cash that’s dropping in real value while after a few gitters inflation bolsters house prices and we don’t see a drop.


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## divs4ever (29 July 2022)

inflation is Central Bank money-printing 

 what is being touted as 'inflation'  is different this time because you have supply-chain disruptions  accelerating  the excess of easy credit  in the financial whirlpool  ( plenty of credit but less suitable places to use the credit /debt )

 now as i read the data THIS TIME you have an inventory problem  in new homes , there are several constraints on completing  a new home , so there will be SOME pressure to keep new houses rising  to offset rising interest rates  and people choosing to ( or forced to ) sell their existing homes 

 so there is a possibility for existing home prices to drop but new homes to remain steady ( maybe even rise )

 now an unusual factor  here is the 'work from home ' trend ( if it continues ) no longer do SOME workers need to go to the city ( office ) regularly  .. so do we see a drop in city( and suburban ) house prices  ,  but rural towns/acreage properties hold or increase in price  ( after all we are still in the land of 'easy credit ' )


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## divs4ever (29 July 2022)

remember the FORCED seller nearly always gets a kick in the guts , the other folks can wait ( and maybe rent the place out for a while )


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## moXJO (29 July 2022)

They fight inflation with deflationary measures. Trying to curb spending means inflation tends to not last for long periods.

Although the various central banks seem to be stuffing round.


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## waterbottle (29 July 2022)

US has now reported a 2nd negative GDP figure... Markets loved it


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## Value Collector (29 July 2022)

divs4ever said:


> inflation is Central Bank money-printing
> 
> what is being touted as 'inflation'  is different this time because you have supply-chain disruptions  accelerating  the excess of easy credit  in the financial whirlpool  ( plenty of credit but less suitable places to use the credit /debt )
> 
> ...



Yep, although it’s not just “printing money” it’s increasing the money supply which includes increasing credit.

The inflation we see is the result of the total money supply increasing and circulating at a faster rate than the total supply of goods and services available for trading.

As you pointed out this is due in large part at the moment from a reduction in the total goods and services available rather than a massive increase in the money supply.

By raising interest rates the Central Banks are hoping to reduce the available credit, and hence reduce the total money supply to closer match the total goods and services circulating.


----------



## divs4ever (29 July 2022)

moXJO said:


> They fight inflation with deflationary measures. Trying to curb spending means inflation tends to not last for long periods.
> 
> Although the various central banks seem to be stuffing round.



 actually all they  need to do  is reduce the velocity of money  ( i have no intention of washing my mouth out )

 which is counter-intuitive to any government facing re-election  ( which survive on INCREASING money velocity so as to increase tax-harvest and kick-backs )

 UNFORTUNATELY the higher powers have put bank bail-ins on the table  ( so your saving are not completely safe in the banks )  the government continues to spend/borrow recklessly  ( so good luck with those bonds )

 ** Although the various central banks seem to be stuffing round. ** 

 i think the phrase you mean is  'stuffed up ' ( whether intentional or not ) they have got the timing badly wrong  ,  if the US mid-term election results are rejected  by a large  sector of the population ( either side ) the economy is likely to descend into crisis  .. taking out the global reserve currency


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## over9k (29 July 2022)

waterbottle said:


> US has now reported a 2nd negative GDP figure... Markets loved it



Expectation vs reality. If things aren't as bad as expected, we play ball. 

I'm now getting full on FOMO for a SOXL play. Even crypto's back on the menu now.


----------



## redsmartie (29 July 2022)

divs4ever said:


> actually all they  need to do  is reduce the velocity of money  ( i have no intention of washing my mouth out )
> 
> which is counter-intuitive to any government facing re-election  ( which survive on INCREASING money velocity so as to increase tax-harvest and kick-backs )
> 
> ...



There has been a steady flow of *bananas going to the monkey at the top so the term "inflation"  means he gets less bananas. LOL


----------



## waterbottle (29 July 2022)

over9k said:


> Expectation vs reality. If things aren't as bad as expected, we play ball.
> 
> I'm now getting full on FOMO for a SOXL play. Even crypto's back on the menu now.




Expectation was for a positive GDP though, reality was worse... Same for GOOG and MSFT earnings

The FOMO is strong.

Looks like AAPL and AMZN have both beat estimates, albeit by tight margins. BTC has followed (or has it lead?). Most risk assets seem to be approaching some important resistance, meanwhile the FANGs have all reported. 

Does the market have any more positive news to report or is it going to be negative earnings from here on?


----------



## Value Collector (29 July 2022)

divs4ever said:


> actually all they  need to do  is reduce the velocity of money  ( i have no intention of washing my mouth out )
> 
> which is counter-intuitive to any government facing re-election  ( which survive on INCREASING money velocity so as to increase tax-harvest and kick-backs )
> 
> ...



Yep, the velocity of money is not something everybody always thinks about, eg it’s not just the total money supply (currency +credit) but also the speed at which that is circulating.

If raising interest rates can cause people to delay purchases because they have to save up a bit more because they can’t afford a loan as large or by now pay later offers dry up, then that will decrease inflationary pressure.


----------



## 3 hound (29 July 2022)

waterbottle said:


> US has now reported a 2nd negative GDP figure.




Good thing that is not how Biden's team define a recession anymore or we would be in a......recession.


----------



## over9k (29 July 2022)

Meanwhile, intel posts a massive earnings miss and amazon posts a massive earnings beat. 

Not sure how much that says about intel specifically though as they've been kind of shite lately.


----------



## divs4ever (29 July 2022)

over9k said:


> Meanwhile, intel posts a massive earnings miss and amazon posts a massive earnings beat.
> 
> Not sure how much that says about intel specifically though as they've been kind of shite lately.



 am waiting to see  how China is going with their home-grown chips , since i am a bit of a Linux fan  , that might not be the problem ( Chinese chips ) it seems  ( i used  to love the old Sun and Alpha architectures )


----------



## waterbottle (29 July 2022)

Eurozone inflation now 8.9% v. 8.6% expected l


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## over9k (29 July 2022)

All the oil supermajors are reporting before the open, all posting huge earnings beats: 




WTI's up ~2.5%.


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## over9k (29 July 2022)

moXJO said:


> They fight inflation with deflationary measures. Trying to curb spending means inflation tends to not last for long periods.
> 
> *Although the various central banks seem to be stuffing round.*



They're all shitting themselves that's why. Trying not to upset the apple cart any more than it already is.


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## waterbottle (29 July 2022)

German q2 GDP reported at 0% v 0.1% expected lmao. Previous quarter was 0.2%. True stagflation or just stats hiding a recession?


----------



## waterbottle (29 July 2022)

over9k said:


> All the oil supermajors are reporting before the open, all posting huge earnings beats:
> 
> View attachment 144721
> 
> ...




Will be interesting to get their opinion on future guidance given most of these profits could be attributed to oil >$100 per barrel...


----------



## moXJO (29 July 2022)

over9k said:


> They're all shitting themselves that's why. Trying not to upset the apple cart any more than it already is.



Seem too frightened before the midterms. It will only make things worse unless stimulus is incoming. Then it's a game of kick the can.

Need to clear the market out so I can grab some bargains.


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## over9k (29 July 2022)

moXJO said:


> Seem too frightened before the midterms. It will only make things worse unless stimulus is incoming. Then it's a game of kick the can.
> 
> Need to clear the market out so I can grab some bargains.



Those were available on the 14th


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## divs4ever (30 July 2022)

waterbottle said:


> German q2 GDP reported at 0% v 0.1% expected lmao. Previous quarter was 0.2%. True stagflation or just stats hiding a recession?




 i would normally expect the German data to be precise  , but we have an unusual  government in unusual times


----------



## divs4ever (30 July 2022)

moXJO said:


> Seem too frightened before the midterms. It will only make things worse unless stimulus is incoming. Then it's a game of kick the can.
> 
> Need to clear the market out so I can grab some bargains.



 the stimulus won't work  because they can't ( or won't ) apply  MMT intelligently 

 too late to be frightened about the mid-terms   they have done the damage to themselves ( the Republicans  are still desperately resisting the return of Trump )


----------



## moXJO (30 July 2022)

over9k said:


> Those were available on the 14th



Grabbed some, along with crypto. Still think US tech is overvalued, its also a mess. I only dribbled into positions though as it still looked high to me. But I was expecting a run. Still going with my "Grind out" theory for now.

Might start shorting some stuff on Monday.
Also lightening some of the profits on crypto.
They are going to need to drop the bomb to contain this at some point.


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## over9k (1 August 2022)

Oil futures and everything else futures into the red as a result. 

Demand side.


----------



## JohnDe (1 August 2022)

over9k said:


> View attachment 144816
> 
> 
> Oil futures and everything else futures into the red as a result.
> ...




Nothing new there, most of China's industry has been in lock down due to their government trying eliminate COVID. No industry = no growth = no economic recovery.



> *China’s official growth figures are bad enough to be believed*
> We cross-check the latest numbers



Jul 28th 2022 


> When china’s Politburo, the 25-member committee that oversees the Communist Party, met this time last year to ponder the economy, China’s rulers seemed quite confident. Their annual growth target was in easy reach and they were keen to crack down further on the country’s overstretched property developers. As The Economist went to press, the Politburo was preparing to meet again. But the economy looks quite different. China’s attempts to stamp out any outbreak of covid-19 have crippled manufacturing intermittently, and consumption more persistently. Distressed developers have stopped working on pre-sold flats—and aggrieved homebuyers have refused to pay their mortgages until construction resumes.
> 
> This has put China’s rulers in a pickle. They seem determined to stick to their zero-covid policy. And they would no doubt love to cling to their official gdp growth target of “around 5.5%”. But it has become clear they cannot do both. Unless, of course, they fiddle the growth figures.
> 
> ...


----------



## mullokintyre (1 August 2022)

moXJO said:


> Grabbed some, along with crypto. Still think US tech is overvalued, its also a mess. I only dribbled into positions though as it still looked high to me. But I was expecting a run. Still going with my "Grind out" theory for now.
> 
> Might start shorting some stuff on Monday.
> Also lightening some of the profits on crypto.
> They are going to need to drop the bomb to contain this at some point.



Its is difficult to find a country that i not in a mess right now, just as its difficult to find a currency that one might feel safe in investing right now.
In uncertain times, people will flock to what has worked in the past, the USD.
All the fundamentals in the world cannot overcome the irrationality of the market.
The USD will reign supreme until it doesn't, regardless of the fundamentals, or the charts.
Mick


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## over9k (2 August 2022)

And the jitters return... 

Here's a fun little graph: 




Buying at the low of the 14th would put almost everything in a very similiar place. Big gap a few days ago to sell BOIL on but I wasn't awake for it (big open and then a plummet all session) because, you know, life.


----------



## over9k (2 August 2022)

Also:










Food for thought.


----------



## moXJO (2 August 2022)

A lot of talk about "stimulus checks" again.
Biden and US states.

A lot more cautious of shorts now.


----------



## divs4ever (2 August 2022)

moXJO said:


> A lot of talk about "stimulus checks" again.
> Biden and US states.



wouldn't surprise me  at all 

 about the only way to  have a chance at the mid-terms  , buy the voters 

 i guess MMT  will now spend all eternity in disgrace after this saga 

 ( but have a plan if the global economy implodes before then )


----------



## waterbottle (2 August 2022)

moXJO said:


> A lot of talk about "stimulus checks" again.
> Biden and US states.
> 
> A lot more cautious of shorts now.




Interesting.. Any source for this? 

This will only add to inflation so doesn't make much sense... Unless they're planning to target it to low income earners


----------



## divs4ever (2 August 2022)

FAMILY OF 6 FORCED TO LIVE IN A TOOL SHED, LATE RENTS WORSEN, HOUSING CRISIS EXPANDS​


 not exactly a source  , but  probably supporting anecdotal evidence 

 not to mention stories of US families   being financially stressed 

 ( i suspect some states  are probably talking  about this )


----------



## qldfrog (2 August 2022)

waterbottle said:


> Interesting.. Any source for this?
> 
> This will only add to inflation so doesn't make much sense... Unless they're planning to target it to low income earners



When does it need to make sense?
The french government is sending everyone an inflation check😂😂😂
Any y12 kids should know it can only worsen the situation, but when money is meaningless  and votes cheap to buy on the children's future....


----------



## mullokintyre (2 August 2022)

waterbottle said:


> Interesting.. Any source for this?
> 
> This will only add to inflation so doesn't make much sense... Unless they're planning to target it to low income earners



here is  an article from Forbes magazine ackonowledging the calls fro more stimmy checks, but argues under the circumstances it will merely fuel inflation.


> Though the three rounds of Covid stimulus checks kept many households afloat during the worst stages of the pandemic, there’s little support among lawmakers for another round to address inflation.
> 
> Some experts say that supplying consumers with more cash would exacerbate the main cause of inflation: high demand and low supply.
> 
> ...



Mick


----------



## JohnDe (2 August 2022)

divs4ever said:


> FAMILY OF 6 FORCED TO LIVE IN A TOOL SHED, LATE RENTS WORSEN, HOUSING CRISIS EXPANDS​
> https://www.abc.net.au/news/2022-08...-creates-housing-crisis-for-workers/101288302
> 
> not exactly a source  , but  probably supporting anecdotal evidence
> ...





Evidence is starting to show that a lot of the shortages of homes for sale and rental is caused not by a supply issue but because of people owning more than one place for holidays. "..*two-thirds of the properties in Robe were unoccupied*". Same probably goes for the US.

_"I was asked to leave the house I was renting because the owner was going to make a fortune out of selling it on the spot," he said._​​_"So I happily moved back to Robe._​​_"But as somebody that owns a guesthouse in Robe and runs short-term rental accommodation for other people, I live in a shed._​​_"There was nowhere for me to rent, I couldn't buy anything because I'm completely priced out of the market, and you're waiting two or three years for a house to be built._​​_"I'm right in the middle of how silly this whole thing is."_​​_Rapidly selling investment and holiday homes has contributed to the current rental crisis, leaving workers unable to find accommodation._​​_The latest census data showed 59 per cent of Robe properties were vacant – the third-highest rate in the country._​​_"A lot of people have been in a position to own a second home or a third home," Mr Aitken said._​


> *Robe holiday home ownership creates housing crisis for workers*
> 
> When JJ Aitken returned to his family property in Robe last year to run a short-term accommodation business, he didn't imagine it would be so difficult to find a place to live.
> 
> ...


----------



## waterbottle (2 August 2022)

qldfrog said:


> When does it need to make sense?
> The french government is sending everyone an inflation check😂😂😂
> Any y12 kids should know it can only worsen the situation, but when money is meaningless  and votes cheap to buy on the children's future....






mullokintyre said:


> here is  an article from Forbes magazine ackonowledging the calls fro more stimmy checks, but argues under the circumstances it will merely fuel inflation.
> 
> Mick




Migraineg inducing stuff. 

Meanwhile, crypto seems to be falling. ETH  down 7% in past 24hrs, BTC down 2%. Might be a possible early indicator for risk coming off globally. Or this is just standard crypto volatility.. 
Possible down leg starting? Or is the smart play to buy the dip....


----------



## moXJO (2 August 2022)

waterbottle said:


> Interesting.. Any source for this?
> 
> This will only add to inflation so doesn't make much sense... Unless they're planning to target it to low income earners



Yes low income earners. Once recession officially hits then apparently there will be more.
There's a couple of ways they are doing it without being officially seen to be doing it. One is:



> It may not seem obvious at first glance, but President Joe Biden is still putting cash into people's pockets during a punishing stretch of inflation.
> 
> The $1.9 trillion stimulus law that Democrats enacted in March 2021 without Republican support is helping set the stage for another round of relief payments at the state level. At least 18 states including California and Florida have taken that step this year with Congress gridlocked on how to deal with the worst inflation in four decades*.*
> 
> ...



So fed passes to states who then write the cheques.

They were trying to add $300-400 billion to a veteran bill they are trying to pass (as well) but I don't know the specifics.









						Biden is still sending relief checks to help families deal with inflation
					

Some Americans can expect a fourth relief check, but it depends on where you live. Biden's stimulus is fueling another round of payments from states.




					www.google.com.au
				













						These states are sending residents stimulus checks up to $1,500 to combat inflation
					

Inflation is hitting record highs, and state governments are responding by sending out stimulus checks.




					www.google.com.au


----------



## over9k (2 August 2022)




----------



## 3 hound (2 August 2022)

moXJO said:


> A lot of talk about "stimulus checks" again.
> Biden and US states.




You guys don't get much, when there is inflation due to a supply chain shortages and increases in money circulation you hand out stimulus checks which adds even more cash to the economy and allows people to avoid work longer and pay more for the goods in short supply which cause wages to go up and participation in the workforce to decrease and the shortages of workers causes more supply chain shortages causing prices to go up which leads to more stimulus checks so the people not working increases supply chain shortages can pay for the fewer goods available........all this has a stimulating effect on the economy. 

You feel the stimulation??


----------



## over9k (2 August 2022)

3 hound said:


> You guys don't get much, when there is inflation due to a supply chain shortages and increases in money circulation you hand out stimulus checks which adds even more cash to the economy and allows people to avoid work longer and pay more for the goods in short supply which cause wages to go up and participation in the workforce to decrease and the shortages of workers causes more supply chain shortages causing prices to go up which leads to more stimulus checks so the people not working increases supply chain shortages can pay for the fewer goods available........all this has a stimulating effect on the economy.
> 
> You feel the stimulation??



You feel an election soon?


----------



## 3 hound (2 August 2022)

over9k said:


> You feel an election soon?



Watch this space, Biden is going to lower gov debt by unprecedented amounts, take inflation pressure of every American and usher in a green new world based on renewables.

All thru the IRS.









						Statement from President Biden on Inflation Reduction Act of 2022 - The White House
					

This afternoon, I spoke with Senators Schumer and Manchin and offered my support for the agreement they have reached on a bill to fight inflation and lower costs for American families.   With this agreement, we have a chance to make prescription drugs cheaper by allowing Medicare to negotiate...




					www.whitehouse.gov


----------



## Smurf1976 (3 August 2022)

As another random example, I see that Telstra is now automatically indexing at least some of its pricing to CPI with price adjustment in July each year.

Noting that forms part of the contract such that the contract no longer has a fixed price as such, it's the price you sign up for + CPI.

That's not a new idea as a concept but it's a new so far as Telstra are concerned. It's another example of a business seeking to protect itself and pass through costs to consumers.


----------



## 3 hound (3 August 2022)

Smurf1976 said:


> As another random example, I see that Telstra is now automatically indexing at least some of its pricing to CPI with price adjustment in July each year.
> 
> Noting that forms part of the contract such that the contract no longer has a fixed price as such, it's the price you sign up for + CPI.
> 
> That's not a new idea as a concept but it's a new so far as Telstra are concerned. It's another example of a business seeking to protect itself and pass through costs to consumers.



That is what happened to my plan, it was only $3 increase. Is it even legal to change a contract like that?


----------



## divs4ever (3 August 2022)

3 hound said:


> You guys don't get much, when there is inflation due to a supply chain shortages and increases in money circulation you hand out stimulus checks which adds even more cash to the economy and allows people to avoid work longer and pay more for the goods in short supply which cause wages to go up and participation in the workforce to decrease and the shortages of workers causes more supply chain shortages causing prices to go up which leads to more stimulus checks so the people not working increases supply chain shortages can pay for the fewer goods available........all this has a stimulating effect on the economy.
> 
> You feel the stimulation??



 oh i understand what is happening 

 but in a time of shifting definitions  .. do annoyance and disgust  now quality as 'stimulation '


----------



## divs4ever (3 August 2022)

3 hound said:


> That is what happened to my plan, it was only $3 increase. Is it even legal to change a contract like that?



 good luck trying to complain to the ombudsman  , they can't handle the long-running issues with a different provider 

 you might find the courts are similarly overwhelmed with legal questions as well ( say about utility companies )


----------



## divs4ever (3 August 2022)

over9k said:


> You feel an election soon?



not soon enough ( for some )

 but the two-party system will need to be dismantled for any substantial  change


----------



## divs4ever (3 August 2022)

3 hound said:


> Watch this space, Biden is going to lower gov debt by unprecedented amounts, take inflation pressure of every American and usher in a green new world based on renewables.
> 
> All thru the IRS.
> 
> ...



 Biden is full of gas 

 inhale at your own risk  ( watch out in case he lights it )


----------



## moXJO (3 August 2022)

Pelosi flying into Taiwan will surely spook markets some more. 

These 400 point ups and downs on the dow are cream.


----------



## over9k (3 August 2022)

moXJO said:


> Pelosi flying into Taiwan will surely spook markets some more.
> 
> These 400 point ups and downs on the dow are cream.



Yeeeep. BOIL took a round trip -12% to breakeven the day before yesterday.


----------



## over9k (3 August 2022)

Opec adding another 100k/day of production (SFA).


----------



## over9k (4 August 2022)

Mental.


----------



## frugal.rock (4 August 2022)

over9k said:


> Opec adding another 100k/day of production (SFA).



Enough to spook out a small tumble


----------



## over9k (4 August 2022)

frugal.rock said:


> Enough to spook out a small tumble
> 
> View attachment 144913



That dropped when the U.S inventory numbers were released and they were higher than anticipated.


----------



## frugal.rock (4 August 2022)

Yeah, I saw that after posted, didn't bother editing. 
Was to busy goggling at the HKD & AMTD farce 🤪


----------



## waterbottle (4 August 2022)

Should've been priced in 😂


----------



## over9k (4 August 2022)

I'd almost call europe & china uninvestable at this point.

BOE just raised by 50.


----------



## noirua (5 August 2022)

Distressed UK forecasts 13% inflation by year end 2022 as interest rate rises 0.5%.








						UPDATE: BoE plans to sell GBP10 billion in gilts per quarter | Financial News
					

UPDATE: BoE plans to sell GBP10 billion in gilts per quarter | Financial News




					www.lse.co.uk


----------



## over9k (5 August 2022)

Lots of worry about a demand slowdown now - geopolitical tensions, economies with structural issues, perhaps seasonality playing a part too. Wild gyrations in gas thrown into the mix as well. 

Absolutely zero supply side easing to speak of however.


----------



## moXJO (5 August 2022)

over9k said:


> Lots of worry about a demand slowdown now - geopolitical tensions, economies with structural issues, perhaps seasonality playing a part too. Wild gyrations in gas thrown into the mix as well.
> 
> Absolutely zero supply side easing to speak of however.



Looking ugly. 
US jobs report tonight?


----------



## waterbottle (5 August 2022)

noirua said:


> Distressed UK forecasts 13% inflation by year end 2022 as interest rate rises 0.5%.
> 
> 
> 
> ...



Lmao, pissing in the wind


----------



## waterbottle (5 August 2022)

10yr -2 yr yields inverting (green). There doesn't seem to have been an instance where an inversion has happened and a recession *hasn't* followed (see above). Either the Fed is going to start pausing in September before reversing direction later or they're going to keep hiking into a recession. Interesting NDQ keeps falling during a recession, despite IR cuts...
If the 10-2yr inversion is to be trusted, then I don't think we've hit a bottom yet.

Does anyone else see an alternative viewpoint? I'm starting to smell permabear-y...

EDIT: I guess one alternative possibility is that the Fed will re-enter with stimulus... perhaps that could be fueling the recent NDQ run


----------



## moXJO (5 August 2022)

waterbottle said:


> View attachment 144975
> 
> View attachment 144976
> 
> ...



Everyone is saying "lower" from here. 
A lot have whipped themselves into thinking a depression like crash is about to happen. Always makes me want to do the opposite....

Unemployment seems artificial low, is it due to no workers brought in from overseas? Business is starting to get the shts about it as well. It's affecting the whole chain of production and supply. Good for workers though

Business has amassed a decent war chest of cash. So they might try and weather out the storm and keep those hard workers in employment. May also prolong the uncertainty though.

They need to stomp inflation though. Recession wouldn't be a bad thing overall. Some of these big companies shedding employees, allows smaller businesses to get some experienced workers for cheap and grow their business. God knows we haven't had much innovation for the last decade and a bit.

A good wildfire will allow some of the smaller saplings to rise up. Also, I'm a tight ar5e that wants discounts. Unfortunately everyone may have to suffer a recession for it. But it's the price I'm willing to take.


----------



## waterbottle (5 August 2022)

moXJO said:


> Everyone is saying "lower" from here.
> A lot have whipped themselves into thinking a depression like crash is about to happen. Always makes me want to do the opposite....
> 
> Unemployment seems artificial low, is it due to no workers brought in from overseas? Business is starting to get the shts about it as well. It's affecting the whole chain of production and supply. Good for workers though
> ...




Yep, I'm


moXJO said:


> Everyone is saying "lower" from here.
> A lot have whipped themselves into thinking a depression like crash is about to happen. Always makes me want to do the opposite....
> 
> Unemployment seems artificial low, is it due to no workers brought in from overseas? Business is starting to get the shts about it as well. It's affecting the whole chain of production and supply. Good for workers though
> ...




Agreed with pretty much everything. I just don't see a future economic environment conducive to NDQ at 16000, particularly when central bankers have pledged to fight inflation


----------



## bluekelah (5 August 2022)

moXJO said:


> Everyone is saying "lower" from here.
> A lot have whipped themselves into thinking a depression like crash is about to happen. Always makes me want to do the opposite....
> 
> Unemployment seems artificial low, is it due to no workers brought in from overseas? Business is starting to get the shts about it as well. It's affecting the whole chain of production and supply. Good for workers though
> ...



I believe FED will cause a big recession from hiking rates. If you look historically the markets have plunged everytime FED tried to raise rates. They tried and everytime they had to PIVOT and the next time could only raise rates by half as much before everything fell apart. 1980s they did 15-20% to fight inflation, then 1990s 10%, then 2000 7% then 2007 5%+, then 2019 2.5%. 

They are at 2.5% now and expected to hike another 0.5% next month+more QT as they reduce balance sheet, thats on the back of 30T in debt. IMHO we will probably see something break pretty soon whether it be a housing crash like GFC or stock market crash or bad recession.  

Employment numbers are a lagging indictor and also if you look at participation rate it pretty low at 62%+, slightly lower than it was precovid. But yeah I wouldnt trust the US numbers too much as they are probably adjusted and fudged in some way, the trend is more important.


----------



## moXJO (5 August 2022)

What do you think the market will do if Republicans take back senate?

I can't remember off the top of my head how it's gone historically.


----------



## over9k (5 August 2022)

moXJO said:


> What do you think the market will do if Republicans take back senate?
> 
> I can't remember off the top of my head how it's gone historically.



Rally. Superior economic management and all that. Let's not kid ourselves, even the democrats are anticipating a wipeout. 

Also worth noting that just after midyear is historically when the seasonal slowdown begins. Don't discount seasonality. The last couple of years bottomed around september-october iirc. 

But yeah, things are a mess.


----------



## over9k (5 August 2022)

Simple example of things:

Oil futures are up but oil company futures are down, which indicates that demand side is now seeing even more "problems" than supply side, and supply side ones haven't gone away. 

This means that should the demand side sort itself out, inflation will get even worse. Prices increasing even when demand is dropping is some seriously bad juju.


----------



## waterbottle (5 August 2022)

over9k said:


> This means that should the demand side sort itself out, inflation will get even worse. Prices increasing even when demand is dropping is some seriously bad juju.



What will the Europeans do during winter?


----------



## Smurf1976 (5 August 2022)

waterbottle said:


> What will the Europeans do during winter?



Shiver.

Literally so. Energy supply just isn't there in terms of volume.

LNG was extremely scarce on global markets _before_ Russia invaded Ukraine. Hence the price shock in 2021.

Now we have the halting of gas supply from Russia which turns what was already a crisis into a nightmare.

Plus there's the major problems within the French nuclear industry at present.

Put that all together and some degree of demand reduction is unavoidable. It's not about consumers paying more to keep warm, it's about using less no matter what.


----------



## over9k (5 August 2022)

waterbottle said:


> What will the Europeans do during winter?



Freeze. And/or pay through the nose for gas. They're currently building ports to bring yank gas in but that doesn't take 30 minutes. This is at least one reason why I'm bullish on gas.

Edit: lol, smurf made his post while I was writing mine. Same opening word. Brilliant.


----------



## over9k (5 August 2022)

HOWEVER:


----------



## mullokintyre (5 August 2022)

over9k said:


> HOWEVER:




This guy speaks in simple enough terms, and in very basic mathematical terms, so even someone from the Greens would struggle to refute what he comes up with.
But what is the rest of the world doing?
Worrying about Nanci  Pelosi's travel schedule and Albos holiday plans.
Mick


----------



## qldfrog (5 August 2022)

mullokintyre said:


> This guy speaks in simple enough terms, and in very basic mathematical terms, so even someone from the Greens would struggle to refute what he comes up with.
> But what is the rest of the world doing?
> Worrying about Nanci  Pelosi's travel schedule and Albos holiday plans.
> Mick



Greens as the extremist left parties are in denials of reality, so not even a struggle😊
Proof coming day after day.
Right now, the greens blame the current problem in France with too much nuclear....not kidding, after pushing successfully for the closure of plants and non building of major new plants...
Not a problem.....


----------



## over9k (5 August 2022)

U.S jobs numbers in, +528k vs +250k estimate. Tech slaughtered, NDX futures down 1% within about 2 minutes, oil screaming, bonds nuts.

Another big fed move a virtual certainty now:


----------



## noirua (5 August 2022)

Australia’s inflation rate has tended to lag most of its trading partners. New Zealand clocked up a 7.3% pace in the June quarter – also a 32-year high – while the UK and the US posted 9%-plus rates of inflation in June, and the Eurozone notched an annual rate 8.6% for the same month.





						Inflation Rate - Countries - List | Australia
					

This page displays a table with actual values, consensus figures, forecasts, statistics and historical data charts for - Inflation Rate. This page provides values for Inflation Rate reported in several countries part of Australia. The table has current values for Inflation Rate, previous...




					tradingeconomics.com
				








						Inflation Rate - Countries - List
					

This page displays a table with actual values, consensus figures, forecasts, statistics and historical data charts for - Inflation Rate. This page provides values for Inflation Rate reported in several countries. The table has current values for Inflation Rate, previous releases, historical...




					tradingeconomics.com


----------



## moXJO (5 August 2022)

over9k said:


> U.S jobs numbers in, +528k vs +250k estimate. Tech slaughtered, NDX futures down 1% within about 2 minutes, oil screaming, bonds nuts.
> 
> Another big fed move a virtual certainty now:
> 
> View attachment 145000



US needs to sack up and rate bomb the inflation. It will start to spiral if they keep soft balling for the midterms.

To many moving parts across the world. It will blow up if too many go off in tandem.


----------



## over9k (5 August 2022)

Meanwhile:


----------



## bluekelah (6 August 2022)

moXJO said:


> What do you think the market will do if Republicans take back senate?
> 
> I can't remember off the top of my head how it's gone historically.



doesnt really matter, when Trump was elected the FED went ahead and hiked rates 4 times to 2.5% in 2018, coz it looked like economy was doing well with low unemployment but then markets went down and they started to backpedal in 2019 which caused another boom in stocks. So republican or not, market is dependent on FED rate policy/liquidity pump


----------



## Smurf1976 (6 August 2022)

moXJO said:


> US needs to sack up and rate bomb the inflation. It will start to spiral if they keep soft balling for the midterms.



Just my observation but there seems to be an awful lot of money around at the moment.

I mean things like books signed by the author being sold for an outright fortune, almost all of which is being paid for the signature not the book (since you could buy the unsigned book for a relative pittance). Then there's USD 5k concert tickets and so on. Stuff like that. Keep your eyes open and there's plenty of examples of non-essential things being sold for prices that even in the recent past would've been considered outright ridiculous.

A decent portion of the population are perhaps struggling but clearly there are quite a few who've got money to spend for the sake of spending it. 

Perhaps just my interpretation but I'm seeing that as indicative of too much money sloshing around looking for somewhere, anywhere, to go.


----------



## divs4ever (6 August 2022)

waterbottle said:


> What will the Europeans do during winter?



 burn furniture , and hoard used blankets ( since many modern  blankets  use fossil fuels  in the manufacture ) hopefully the governments will put out flyers and help the public start their fires


----------



## divs4ever (6 August 2022)

Smurf1976 said:


> Just my observation but there seems to be an awful lot of money around at the moment.
> 
> I mean things like books signed by the author being sold for an outright fortune, almost all of which is being paid for the signature not the book (since you could buy the unsigned book for a relative pittance). Then there's USD 5k concert tickets and so on. Stuff like that. Keep your eyes open and there's plenty of examples of non-essential things being sold for prices that even in the recent past would've been considered outright ridiculous.
> 
> ...



money YES , productivity  , NO !

 and just  as  sanity seems to be slipping badly


----------



## divs4ever (6 August 2022)

Smurf1976 said:


> Shiver.
> 
> Literally so. Energy supply just isn't there in terms of volume.
> 
> ...



 at least France  still has nuclear power plants ( Germany still seems intent in closing all their plants down )


----------



## qldfrog (6 August 2022)

divs4ever said:


> at least France  still has nuclear power plants ( Germany still seems intent in closing all their plants down )



Hall closed due to maintenance, regulation cf water preservation and also a few..key big ones ..closed as Green bargaining chip for keeping the last few presidencies in power
From 2018..ages ago








						France to close no more nuclear reactors during Macron mandate
					

The French government will not close any of its nuclear reactors besides Fessenheim before the end of the current presidential mandate which runs until 2022, French President Emmanuel Macron said on Tuesday.




					www.reuters.com
				



For a change, Macron stuck to his words😂😂
Obviously, the notion of sharing these few GW with neighbours..aka Germany while freezing and taking cold showers and doubled bills is wearing thin in France, Spain,Italy....
So not loking good and tge recent fall in oul orice is just a glitch .the trend remains.. Higher and Higher


----------



## divs4ever (6 August 2022)

but unlike others France  has a dramatic way of  changing governments 

 i guess time will tell , but i will stick with my opinion that the EU is a basket case  ( and have held that opinion for around ten years )

( i was there in 1990  and noticed some intriguing trends even back then )


----------



## waterbottle (6 August 2022)

Big gain in US jobs overnight. Rumours of a 75bps hike in September. Odds now at 70% compared to 34% prior to the data release.


----------



## 3 hound (6 August 2022)

divs4ever said:


> but unlike others France has a dramatic way of changing governments




Sri Lanka to apparently.


2022 and energy rationing (if not food rationing) in a time of plenty is a very real possibility and less  people everywhere feel any need to get a job (over 10 million job vacancies in the US alone) - I feel we are somehow in an era of poor leadership.


----------



## mullokintyre (6 August 2022)

waterbottle said:


> Big gain in US jobs overnight. Rumours of a 75bps hike in September. Odds now at 70% compared to 34% prior to the data release.



But not only did July blow away expectations, but both previous months were revised higher: the change in total nonfarm payroll employment for May was revised up by 2,000, from +384,000 to +386,000, and the change for June was revised up by 26,000, from +372,000 to +398,000. With these revisions, employment in May and June combined is 28,000 higher than previously reported.
The "surprising" gain in Jobs overnight seems to fly in the face of the  data out the previous day.
This  Bloomberg headline from July 21st  says it all


> US Jobless Claims Hit Eight-Month High as Labor Market Cools​
> Initial unemployment claims increased last week to 251,000
> Continuing claims up 51,000, largest advance since November



As can be seen below, the inital jobless claims have been going up since march.
The kicker is the continuing employment in the bottom has rolled over and is starting to rise as seen in the bottom of the graph below..
Prior to that, one could argue that those losing/quitting their jobs were going straight back into another one, but the stats below suggest that scenario is becoming more and more difficult to sustain.



So how do we reconcile the fact that unemployment claims, both new and continuing, are heading up, but record  job creation and new hiring is ongoing?
Part of it can be explained by more and more people having multiple jobs. Another factor is people who have taken and quit more than one job in the survey period. Another factor might be that the figures are Bullsh*t and have been massaged to suit the desired outcome.
Other factors such as the  Californian  law known as AB% that severely limits the ability of workers in California to be contractors,, and many have been shifted to  employees from being on a contract basis.
Or it could be a combination of all of the above.
Mick


----------



## qldfrog (6 August 2022)

The







divs4ever said:


> but unlike others France  has a dramatic way of  changing governments
> 
> i guess time will tell , but i will stick with my opinion that the EU is a basket case  ( and have held that opinion for around ten years )
> 
> ( i was there in 1990  and noticed some intriguing trends even back then )



These trends made me leave and look for greener pastures and a safe life for my kids. no regrets.


----------



## divs4ever (6 August 2022)

3 hound said:


> Sri Lanka to apparently.
> 
> 
> 2022 and energy rationing (if not food rationing) in a time of plenty is a very real possibility and less  people everywhere feel any need to get a job (over 10 million job vacancies in the US alone) - I feel we are somehow in an era of poor leadership.



 as far as i can tell  in Sri Lanka  they have only reshuffled  the deck chairs ( SO FAR )

 now Russia and India  could change that ( am surprised China  hasn't already tried something  .. like supporting a local business leader  to grab popular support )

 having been through the '70's  ' job vacancies '  can be a deceptive metric  and was frequently  manipulated  by politicians  ( back then )

 but let' see if the populists can finally topple the two-party paradigm ( across the world )


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## divs4ever (6 August 2022)

qldfrog said:


> The
> These trends made me leave and look for greener pastures and a safe life for my kids. no regrets.




 i certainly have no regrets  on never going back to travel Europe after that trip 

 good luck finding a safe place in the coming storm ( i suspect you will have to create your own )


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## 3 hound (6 August 2022)

divs4ever said:


> as far as i can tell in Sri Lanka they have only reshuffled the deck chairs ( SO FAR )




Dam, if that was just a reshuffle as much as I am a fan of a good horror flick I don't want see the footage of a regime change.


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## qldfrog (6 August 2022)

divs4ever said:


> i certainly have no regrets  on never going back to travel Europe after that trip
> 
> good luck finding a safe place in the coming storm ( i suspect you will have to create your own )



Been a quest for the last 3y.
Better half not keen on Panama option, so closing the hatch in suitable property here but not sure i will avoid the WEF misery..however remote i try to be.


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## 3 hound (6 August 2022)

qldfrog said:


> The
> These trends made me leave and look for greener pastures and a safe life for my kids. no regrets.



It used to be guns, gold and getaway..... in 2022 there is nowhere to get away to.

Trust me, as a guy with a  slightly paranoid prepper mentality I had prepacked get gone and never coming back bags. A rational contemporary assessment can only conclude there no there left to get gone to.


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## qldfrog (6 August 2022)

3 hound said:


> It used to be guns, gold and getaway..... in 2022 there is nowhere to get away to.
> 
> Trust me, as a guy with a  slightly paranoid prepper mentality I had prepacked get gone and never coming back bags. A rational contemporary assessment can only conclude there no there left to get gone to.



Sadly I tend to agree.i would still consider Panama vs Australia but pockets of that country only.


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## 3 hound (6 August 2022)

qldfrog said:


> Sadly I tend to agree.i would still consider Panama vs Australia but pockets of that country only.




Don't know anything about Panama really but courtesy of the internet I have seen enough of what so many other South Americans are willing to do to each other if you are considered a rival I will never ever go near the place.... absolutely new tier of dark age style barbarism that the word evil can not begin to describe.


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## qldfrog (6 August 2022)

qldfrog said:


> Sadly I tend to agree.i would still consider Panama vs Australia but pockets of that country only.



And still subject to inflation, usd collapse and potentially overrun by migrants walking North


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## divs4ever (6 August 2022)

3 hound said:


> Dam, if that was just a reshuffle as much as I am a fan of a good horror flick I don't want see the footage of a regime change.



 i think the President  became the Prime Minister  and most members of parliament remain  , but still in the grips of the IMF and WEF 

 given the previous racial unrest over there  , it could get very messy  if the peasants unite against the globalists/oligarchs ... will the middle class see the writing on the wall ??

 was disappointed Russia and India didn't try harder to seize the opportunity  .. Sri Lanka is beautifully located  as a trading hub ( similar to Singapore )


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## divs4ever (6 August 2022)

qldfrog said:


> And still subject to inflation, usd collapse and potentially overrun by migrants walking North



 was thinking rural Bolivia looked nice  .. fairly primitive but the locals look as tough as nails  , the currency of the future is liable to be food and water 

 but my health isn't so good these days , so might have to dig in ( and be extremely annoying when necessary )


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## divs4ever (6 August 2022)

3 hound said:


> It used to be guns, gold and getaway..... in 2022 there is nowhere to get away to.
> 
> Trust me, as a guy with a  slightly paranoid prepper mentality I had prepacked get gone and never coming back bags. A rational contemporary assessment can only conclude there no there left to get gone to.



 well the obvious choices are no longer obvious ( Mexico City is complaining about migrant Californians  , as an example )  but there still would be a few bolt-holes


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## wayneL (8 August 2022)

Probably preaching to the choir here, but a Friedman blast from the past...


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## wayneL (8 August 2022)

Addendum...


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## 3 hound (8 August 2022)

Biden's new massive inflation reduction bill to direct billions toward renewables and social justice.....87 000 new IRS agents to be employed (in an economy with10 million existing job vacancies) - will be biggest gov department ever - a literal army of new tax agents going to war with workers.


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## qldfrog (8 August 2022)

3 hound said:


> Biden's new massive inflation reduction bill to direct billions toward renewables and social justice.....87 000 new IRS agents to be employed (in an economy with10 million existing job vacancies) - will be biggest gov department ever - a literal army of new tax agents going to war with workers.



But ..but ..you do not understand, these new tax agents will have a ripple economic benefit, a waterfall one..and the beauty of it,recession proof...
😂


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## 3 hound (8 August 2022)

qldfrog said:


> But ..but ..you do not understand, these new tax agents will have a ripple economic benefit, a waterfall one..and the beauty of it,recession proof...
> 😂




If I got this right the IRS alone is getting $80 billion funding boost - can someone fact check me on that. It sounds like fake news.

In its simplest terms the IRS will have to find $80 billion in new tax revenue just to pay for their own existence (not including their existing budget).


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## waterbottle (8 August 2022)

Seems like the bottom was late june - mid july....

US CPI numbers are out this week, but the worst may be over if oil is now below $90/barrel


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## qldfrog (9 August 2022)

waterbottle said:


> Seems like the bottom was late june - mid july....
> 
> US CPI numbers are out this week, but the worst may be over if oil is now below $90/barrel



I am always reluctant to declare a botton less than a month after the facts.
European crisis is ahead,people in rhe northern hemisphere are in holiday spirits and traders have interns in charge.
The world was supposed to end when Greece was coughing a couole of years ago, now Germany may face blackout,at a merci of a nuke strike or a successful nato provided weapon strike on a power plant..no non it is the Russians bombing themselves 🤣
And that is just for Europe not mentioning a blockade of Taipei or other real black swan
You can still have inflation with people with no jobs and starving.i would somewhar bet that Sri Lanka inflation is crazy
Hard to call a low on the 10y chart imho in these conditions.
But yes, the type of growth related  inflation may be over...


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## Smurf1976 (9 August 2022)

qldfrog said:


> Hard to call a low on the 10y chart imho in these conditions.



Just my personal view but we're coming up to the traditionally bad month of September and there's some pretty major potential events out there with Russia - Ukraine, China - Taiwan etc plus the overall energy supply issue with gas especially.

I'm really not at all sure the market's priced in a proper hard recession at this point, the market still seems to be thinking everything's fine.


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## Dona Ferentes (9 August 2022)

Smurf1976 said:


> ...plus the overall energy supply issue with gas especially.
> 
> I'm really not at all sure the market's priced in a proper hard recession at this point, the market still seems to be thinking everything's fine.



Europe is going to be in a pickle. A core component of modern life is radically different. Winter will be cold and expensive, the industrial sector will be hit hard, corporate earnings must be affected, lifestyles will be under intense pressure. The social contract may fray / rupture.

Industrial heartland Germany under stress:


And then there's France with it's EdF nuclear power... Not immune


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## waterbottle (9 August 2022)

Well the question to ask is are we even going to enter a recession? Perhaps Biden and Powell were right and they did pull off a soft landing, what then?

Just trying to reconcile recent market action with what the data has been saying


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## divs4ever (9 August 2022)

waterbottle said:


> Well the question to ask is are we even going to enter a recession? Perhaps Biden and Powell were right and they did pull off a soft landing, what then?
> 
> Just trying to reconcile recent market action with what the data has been saying



 not by definition ... ROFL

 there was ,   many years ago  a popular song  about  ' the times they are a-changing '

 now in modern times definitions change in an attempt to be politically correct


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## Telamelo (9 August 2022)

Future of money:  The RBA to trial a digital currency​








						Future of money: The RBA to trial a digital currency
					

The Reserve Bank of Australia will trial a digital currency as part of a collaborative research project into how it could be used by consumers and businesses.




					www.theage.com.au


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## qldfrog (9 August 2022)

waterbottle said:


> Well the question to ask is are we even going to enter a recession? Perhaps Biden and Powell were right and they did pull off a soft landing, what then?
> 
> Just trying to reconcile recent market action with what the data has been saying



Doomed attempt Mr @waterbottle , that would imply rationality and free markets 😁


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## waterbottle (9 August 2022)

Australian consumer confidence now almost as low as the 2020 covid pandemic period... WTF is going on... Have markets really already priced this in?


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## divs4ever (9 August 2022)

waterbottle said:


> Australian consumer confidence now almost as low as the 2020 covid pandemic period... WTF is going on... Have markets really already priced this in?
> 
> View attachment 145129



maybe 

 remember economies and currencies rely on trust 

 and after '14 days to flatten  the curve '  that trust has probably almost vanished 

 and when various 'trusted entities ' change definitions for political expediency ( despite having already rigged the data ) what would you expect 

 now the more important question for members  is , have the Australian public reacted  like Sri Lanka , Nederlands and Germany  , or just calmly tuned out the government rhetoric  ( since only 35% voted for them anyway )


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## waterbottle (9 August 2022)

divs4ever said:


> maybe
> 
> remember economies and currencies rely on trust
> 
> ...




I don't think the market is going to be fooled by a definition change. Either the market thinks we're in a recession or not, and either they've priced it in or they haven't.

Interestingly, meme stocks are making a come back which may be a sign of risk re-entering the market, HKD & BBBY being the latest favorites.

Oil fell faster than I think anyone would have thought it could, some players think that it's all a conspiracy related to fake data. Who knows. The European winter hasn't even started, although there have been efforts to reduce reliance on Russian gas by 50%! The US is dumping oil from their SPR. China is in rolling lockdowns and demand is in the pits. Goldman Sachs now readjusting their projections to $110/bl  (I remember someone mentioned there was a price target of $200/bl LOL!). 

All this could feasibly point to a lower CPI print come Wednesday, and the Fed to begin cutting rates in September (as some commentators believe).


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## divs4ever (9 August 2022)

waterbottle said:


> I don't think the market is going to be fooled by a definition change. Either the market thinks we're in a recession or not, and either they've priced it in or they haven't.
> 
> Interestingly, meme stocks are making a come back which may be a sign of risk re-entering the market, HKD & BBBY being the latest favorites.
> 
> ...



 well for a start the trading volume of oil ( trading in US dollars ) is markedly lower  , so is more likely  just as fake as the gold/silver markets now 

 Europe can cut purchases by as much as it likes  , Russia has already decided  almost anyone else is a more reliable trading partner ( except Ukraine  which is just a dead-beat grifter )

 BTW  what time of year is it  ??

 ( wouldn't be the time for the annual  strategic reserves refresh would it ... where they sell existing reserves and replace it with fresh oil )

 remember if oil deliveries  are not a factor  the oil trading price can be anything ( except negative ) if oil deliveries are a factor  negative IS possible ( as we had a while back  )


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## over9k (9 August 2022)

over9k said:


> Nah it's going to be the opposite waterbottle - china's lockdowns actually slaughtered demand. Once they're lifted, energy demand will only increase rapidly again, hence my posts a few days back showing how much of a beautiful dip this was. Chinese good manufacturing will only INCREASE inflation as the energy demand increase will far outweigh the export supply increase as china obviously has a huge internal market that demands its stuff (and therefore production of it) as well.
> 
> *The russian pipeline network is now a ticking time bomb reference either crumbling from lack of maintenance or partisans blowing it to bits. *There's MORE russian oil to be cut off non-deliberately yet, and there won't be anyone to fix the wells freezing over, lines bursting etc as all the western companies have left.
> 
> ...






And so it begins... 

European coal embargo begins tomorrow too. Very ugly stuff brewing.


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## over9k (9 August 2022)

This reduction of oil supply and coal embargo, along with nvidia reporting shite earnings, has dumped quite a bit off SOX/SOXL. Nvidia said "slow year for gaming" but it's absolute shite, the reason why nvidia's earnings have missed estimates is because the estimates were made by idiots.

Fact is that with crypto falling off a cliff an absolute mountain of gpu's have been dumped into the 2nd hand market which has A: obliterated new sales and B: dropped new prices significantly.

You can see how the ethereum hashrate here:




Drops off from the start of may and then really plummets at the start of june.

Just like the actual ethereum price, here:




To state the bleeding obvious, this isn't a coincidence. All those decommissioned gpu's have had to go somewhere and that somewhere is to people that would have otherwise bought new ones.

Nvidia's new generation of gpu's are due out later this year and it is at that point that I think the whole "slow year for gaming" thing WILL come into play as it has actually been a slow year for gaming and with ethereum mining profitability falling off a cliff they're back to having to sell gpu's to gamers and gamers do actually have comparatively (to previous years) little reason to buy them.

And, this is before we even think about the ethereum merge, due in september, which is speculated (and accurately in my opinion) to obliterate gpu mining profitability ENTIRELY. This article outlines how/why:


*Will GPU mining end after the Merge (formerly called ETH 2.0)?*

_Here we are in 2022, and the merge is still 3-6 months away. Just like it has been for the past 4 years. It’s practically a punchline at this point. But despite the countless delays – we really are approaching the finish line. The beacon chain has been running for years. Millions of ETH have been staked. Testnets have been successfully merged. I know we’ve all been hearing this for years. But our team has been following Ethereum development closely, and they are legitimately very close.

What’s the big deal anyway? Miners will just mine something else. It’s not the first time a coin has been lost to GPU miners, and everything turned out just fine before, right? There are lots of other choices, and the mining calculators show that profitability for ETC and RVN is still pretty good.

Sure, you will technically be able to mine something else. But it won’t matter. When Ethereum turns off the lights, there are going to be no good options left. This isn’t mere speculation – this is math. And the math isn’t pretty.

So, without further ado, let’s do the math.

Right now, in mid-2022, things are a little tight. But most GPU miners are in the green regardless of what they mine. And there are lots of good choices. A 6X RTX 3070 rig will pull about $8.60/day on ETH, and $6.25/day on ETC. If all anyone was facing was a 28% cut in profitability in profits post-merge, it would be rough, but it would be survivable. But that’s not what’s going to happen. For anyone. To understand why you must look at the big picture. All mining income is based on a simple formula:

Price per coin x Block Reward x Daily Blocks = Total Daily Income.

The block reward is the number of coins rewarded for finding a block. The block time is the amount of time between each block, and from this, we can determine the number of blocks produced per day.

Taking ETH as an example:

$1,975 per ETH x 2.01 block reward x 5760 daily blocks = $22,865,760.

That’s the total amount of income all ETH miners share, every single day.

Now let’s do the same for ETC. It’s the second biggest coin, and if it puts out a comparable total income as ETH, there will still be plenty to go around post-merge. Cue drumroll…

$24.14 x 3.1 x 6000 = $449,004.

Ugh. Not even close. We’re not even in the same galaxy as ETH. We’re two whole orders of magnitude off here. But… there are lots of other coins, so if the total aggregate income between them adds up to a nice healthy number, things will be fine! Let’s survey the landscape of GPU mineable altcoins:

Things are NOT fine. Every other altcoin combined doesn’t even add up to the income of ETC, which was itself a tiny sliver of the income of ETH. Yes, I did the math correctly. This is all publicly available data. Check it yourself. Even if I was off by 50%, it’s still game over. It’s like the Titanic is sinking, and there’s only one rickety old lifeboat to share. There is no universe where almost everyone doesn’t drown.

This is why I hate mining calculators with the burning passion of a thousand suns. If they’re your primary way to predict the future, things don’t seem so bad. But mining calculators are not showing you the relative hashpower and income of the various coins when they show you all these alternatives to ETH. They lull you into a false sense of security. Without ETH, GPU miners are screwed. The total amount of income available to ALL GPU miners is going to drop by 97%.

History is not a useful guide for what comes next, because nothing like this has ever happened before. In the past, when GPU miners lost LTC, ZEC or XMR to ASICs, they were just one small part of a very big pie. This situation is completely different. This is like the whole pie vanishing overnight, and miners will have to fight for the leftover crumbs. It is essential to understand this – this is an unprecedented and catastrophic reduction in income for GPU miners.

To put this into perspective, let’s walk through a few potential scenarios of how this actually plays out. We still must make some assumptions and approximations first. Rough calculations based on total hashpower suggest roughly 10-15 million GPUs are mining. Using the 10 million number, that puts the average income per GPU at $2.36/day – this suggests the average GPU is a RTX 3080, so this is being VERY conservative. Certainly, some amount of that hashpower is ETH ASICs, but given that they can mine ETC as well, and all the other coins add up to practically nothing – we can ignore that factor. Unfortunately, in this case, ASICs get to share the lifeboat.

A warning – the numbers are going to be so shocking you will probably think to yourself that they must be wrong in some way. They are not._

*#1 – The Base Case*

_In this oversimplified base-case scenario, nothing changes between now and the merge. All crypto prices, total hashpower and block rewards stay the same. On merge day, all GPUs divert to other coins. 10 million GPUs are now left to split approximately $775,000. Average income per GPU? $0.0775.

You read that correctly. Income has dropped from $2.36 per day to 7 cents per day. And that “average” GPU is burning at least 25c in electricity per day at an average 10c/kwh. In other words, you need 3c/kwh electricity just to break even. And even if you have free electricity, your total takeaway per day is 7 measly cents.

But of course, it’s more complicated than that. Most miners know the merge is coming and many will turn off before then. And crypto prices fluctuate wildly every day. So, let’s play with the numbers and look at some other scenarios._

*#2 – The Plausible Best-Case Scenario*

_Let’s assume that prior to the merge, half the GPUs shut off, and suddenly, the price of all crypto doubles. Pre-merge, the average GPU is making $9.44/day. Awesome! Enjoy that while it lasts, because post-merge, 5 million GPUs are splitting $1.549 million/day. The “average” GPU is now making 31 cents per day. After electricity, the average GPU is still effectively losing money. And that’s the plausible best-case scenario? WTF even has to happen to get us back to the status quo?_

*#3 – The Drunk on Hopium Best-Case Scenario*

_Things are already tight at current returns, so what needs to happen to maintain the $2.36 average? We’d need the price of crypto to 6X and at the same time, for 80% of GPUs shut off. 2 million GPUs are then splitting $4.65 million/day. Average per GPU is $2.32. Can you imagine a world where crypto goes 6X in the next few months and 80% of miners still shut off? I can’t. This isn’t happening._

*#4 – The Plausible Worst-Case Scenario*

_Let’s take as a plausible worst-case scenario that pre-merge, the price of crypto drops another 25%, and despite that, only 25% of miners shut off. Average income per GPU? 7c, just like our base case. The takeaway here is that even though the base case was a contrived and oversimplified example, there are very realistic scenarios where that number still plays out._

*#5 – The Minerdämmerung*

_Miner Twilight aka worst-case scenario

Just for fun, let’s imagine how bad things could really get. The price of crypto drops another 50%, and despite that, hashpower never declined. The average per GPU post-merge is 3.5c. That’s 50% less than the base case but if we’re being honest, it hardly even matters – half of effectively zero is still zero.

The takeaway here should be clear – realistically, there’s no good outcome here for miners on merge day. A miracle needs to happen just to keep things the way they were. Winter is coming._

*So where do we go from here?*

_The long term picture for GPU mining: 

These scenarios are only what happens immediately after merge day. Mining has always been a self-correcting system. So what needs to happen to get us back to a point where GPU mining isn’t a complete waste of time – let’s say, $1.50/day revenue for the average GPU? We’d need crypto prices to stay stable and 95% of GPUs to shut off. If we’re heading into a crypto bear market and prices drop by 50%, we need 97.5% of GPUs to shut off. If you actually need to pay for electricity, realistically 99% of other GPUs need to shut off. No exaggeration. That’s really what needs to happen. The average miner won’t survive this. Even the most dedicated 1% of miners will just barely scrape by, losing money every day until we get to this point.

Miners won’t be able to just mine something else, near term
By now it should be very, very clear that the average miner won’t be able to “just mine something else.” And make no mistake – this must happen. This WILL happen. The math insists on it. The choice every miner will need to make is how long they can stand to lose money before they throw in the towel. Even if you turn your rigs off, GPUs are going to lose tremendous amounts of resale value every single day – so even if you’re not mining, you’re STILL losing money indirectly.

How long will it take for 95-99% of GPUs to peel off? Hard to say, but I think there will probably be a very steep decline upfront and then a slow bleed of miners giving up one by one when they’re fed up with losing money for weeks or months on end. This isn’t like proof of stake where you can just hold on to your coins and pray that the price recovers. Miners need to pay to play, and all of the altcoins combined simply can’t afford to pay.

This is going to have significant real-world consequences. I’ve been really taken aback by the prevalence of the sentiment that miners can just “mine something else.” That’s not going to happen. Businesses that were profitable the day before will be wrecked overnight. Lives will be ruined. Personally, I saw this coming a mile away and sold all my GPUs last year. But I’m still very sympathetic to the pain this will cause.

GPU mining here to stay? Still hopeful…long term
Years from now, it’s possible that GPU mining has a renaissance, and we do this all over again. It’s not out of the question that within a few years, the aggregate income for GPU miners increases by 6X from the post-merge baseline without ETH, after 80% of miners have already shut down. I’m not sure I’d bet on that happening anytime soon, but I can at least entertain the possibility. Or it’s possible that this catastrophe salts the earth and GPU mining is effectively dead from a profitability perspective and remains a niche hobby for the rest of our lives._

*Where’s the GPU miner resistance?*

_Time will tell. Before I conclude, allow me to step onto my soapbox for one last moment here. A year ago, I was certain that miners would come together, in the end, to fight the merge using every dirty trick in the book. There are literally billions of dollars at stake here! Billion-dollar industries typically don’t just vanish overnight. I figured a coalition of large ETH miners, and maybe even Nvidia or AMD themselves would step up to the plate and defend their livelihood. And small miners all around the world would rally behind this effort, and it would make the bitcoin block size war look like a walk in the park. Because this wouldn’t just be a fight for the path forward, it would literally be a fight for survival. And here we are, on the eve of the apocalypse. And there’s just…crickets. All that most miners seem to care about is surviving another day mining ETH and then dreaming of a future where they’ll just “mine something else” at just a bit less income, completely ignorant of how dire the post-merge situation will be.

I think the reality of the situation is that despite what PoS advocates want everyone to believe, GPU miners are so legitimately decentralized that getting them to do anything together is like herding cats. Even the largest ETH miner, accounting for, let’s say conservatively 5% of the hashrate, is a small fish in a huge sea. GPU miners never stood a chance against the concentrated wealth of the highly coordinated whales that desperately want PoS to happen so they can pump their bags with virtually zero effort. I hope that magnificently blows up in their face because they created something truly beautiful here before they threw it under the bus. I think 5 years from now we’ll look back at a much lower-priced ETH and be able to clearly point to the merge as where things went off the rails in retrospect. The irony that the coin that created the most successfully decentralized PoW network is the same one that kicked it to the curb is almost too much to bear. It’s straight out of the twilight zone. They practically achieved the impossible, and it’s so, so disappointing to see that almost no one with the means, motive, and opportunity cared enough to fight for it._

*Delay the merge years, avoid the worst-case scenarios?*

_Realistically, the only path forward where GPU miners don’t get obliterated by the merge is if it doesn’t happen for another few years, and the price of ETH gradually falls to the point where miners can gracefully lay down their GPUs and walk away without too much carnage. I think that’s extremely unlikely at this point, but admittedly, the chances are non-zero. It’s certainly not too late for miners to come together and fight for their right to mine and prove to the world that Ethereum isn’t just another centralized shitcoin. Or at the very least, to come together and create something new worth fighting for before it’s too late. I just thought we’d be well down that path by now. In aggregate, GPU miners are going down in flames, there’s no two ways about it. But from an individual miner’s perspective, it’s not too late to cut your losses. If you’re daring, you can even work this to your advantage. Even if you don’t realize it, all GPU miners have been losing money since the start of 2022. Every single one of you. Here’s why.

At this point, we are 100% focused on assisting miners in their *exit* from GPU mining, temporarily or permanently. No matter the size or location of your farm, we can make a buyout offer and, in most cases, pay and pick up in person for an easy, no-risk transaction. Our offers will be realistic and market-based – for better or worse. Even if you’re still on the fence, we can assist with up-to-date market valuations so you can time your exit appropriately. I’m sincerely upset with the way things are turning out. I didn’t think it would end this way, and I still hold that tiny sliver of hope that it still doesn’t. This article isn’t some wild prediction designed to scare you into selling your GPUs to us so we can mine with them ourselves. We’re going to sell them back to gamers as fast as we can because no one can escape the brutality of the math. We’d prefer that GPU mining remains healthy, and people sell their hardware to us when they want to, not when they have to. But make no mistake – this is still an extremely challenging period for our business as well. For those of you with larger farms, we’re still trying to figure out how to make this work at scale when the price of GPUs is falling so fast that not even the biggest GPU reseller in the world can move them into the hands of gamers before they’re worth less than we paid for them. As long as you’re realistic about what we’re all up against here, we’ll figure out a way to make it work._









						GPU Mining Profitability Post-Merge
					

Analysis of GPU mining returns after the Ethereum merge, the transition to Proof of Stake. GPU miners face an unprecedented situation. 97% of revenue from GPU mining comes from Ethereum




					bitproit.com
				





This is in stark contrast to the rest of the semiconductor/microchip industry as a whole however, but because nvidia's taken it (and will continue to take it) in the proverbial and probably will for another several months, simple contagion means that SOX/SOXL takes a hit.

Once the market figures out that there's a lot more to the semiconductor industry than gpu's/nvidia, I expect SOX/SOXL to have a hard run again.

When this will be is hard to say but I don't see a few buys on some particularly red days over the next couple of quarters to be a bad move at all. Let's not kid ourselves here, when, since they were invented, has there ever been an even medium term reduction in the demand for microchips, like ever?

The hard part is working out when the market is going to figure all of this out. In the meantime, IMHO, some wonderful buying opportunities are going to present themselves, I just don't know when.



BUT this is all just the economics of it all. It's effectively just the demand side of the equation. I haven't even touched on the geopolitical side of things with china/taiwan, i.e the supply side. I'll cover that in another post shortly.


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## over9k (9 August 2022)

The economics of the taiwanese supply side:


_TSMC's revenue this year is going to set an all-time record for the company, thanks to high demand for chips as well as increased prices that its customers are willing to pay for its services. While the company admits that demand for chips aimed at consumer devices is slowing, demand for 5G, AI, HPC, and automotive chips remains steady. In fact, TSMC's main problem at present is getting more fab equipment, as ASML and other tool firms and reporting that demand for semiconductor production tools significantly exceeds supply.

Last week TSMC posted its financial results for the second quarter of 2022. The company's revenue hit a record $18.2 billion, which was a year-over-year increase of 43.5%. The company revealed that while its sales were up 55% and 65.3% in April and May (respectively), its revenue in June was 'only' up 18.5% YoY, which indicates a slowdown in sales growth._

HOWEVER:

_"Due to the softening device momentum in smartphone, PC and consumer end market segments, we observe the supply chain is already taking action and expect inventory level to reduce throughout the second half 2022," said C.C. Wei, chief executive of TSMC, at the company's earnings conference call. _




_While we can only speculate on this, it looks like some of TSMC's customers reduced their orders for client-oriented chips after Russia started a full-scale war against Ukraine in late February. TSMC charges/recognizes revenue when it delivers chips/wafers to a client.

Production cycle for chips on modern process technologies is well over 60 days depending on complexity and the number of layers: N16 is ~60 days, N7 is 90+ days, N5 is probably well over 100 days. These nodes account for 65% of TSMC's revenue. So, if clients started to wind down orders in March and April as they anticipated increasing inflation and uncertainty among the end user, the effect will be seen in June, which is what can be observed in TSMC's reports.

TSMC admits that demand for client-oriented chips is softening, *but demand for chips designed to support 5G, AI, and HPC applications still exceeds the company's abilities to supply.*

"While we observe softness in consumer end market segments, other end market segments such as data center and automotive-related remain steady," said Wei. "We are able to reallocate our capacity to support these areas. Despite the ongoing inventory correction, our customers' demand continues to exceed our ability to supply. We expect our capacity to remain tight throughout 2022 and our full year growth to be mid-30% in U.S. dollar terms."


Over half of TSMC's revenue (51%) comes from chips made using its advanced fabrication technologies (N7 and thinner nodes), which is not particularly surprising as TSMC is one of the only two contract foundries that offer such sophisticated manufacturing processes to clients: _





_These technologies will be among TSMC's main growth drivers in the coming years, especially as more customers adopt N7 and more advanced technologies. But more N7/N6 and N5/N4 orders mean that TSMC will need to build more capacity for these nodes, as well as more capacity for N3 and subsequent nodes, which is why the company estimated that its CapEx this year would reach $40 billion – $44 billion.

"With the successful ramp of N5, N4P, N4X, and the upcoming ramp-up of N3, we will expand our customer product portfolio and increase our addressable market," said the head of TSMC. "The macroeconomic uncertainty may persist into 2023, our technology leadership will continue to advance and support our growth. […] We believe the fundamental structural growth trajectory in the long-term semiconductor demand remains firmly in place. "

The world's No. 1 contract maker of semiconductors also urges customers to migrate from older nodes to 28nm and specialty technologies as this will ensure capacity availability (as TSMC plans to expand capacity for 28 nm and specialty nodes by 50% by 2025) and denser designs potentially with more features.

Building additional leading-edge, 28 nm, and specialty capacities not only requires massive investments, but TSMC needs to procure additional semiconductor production tools. Whether TSMC is building capacities for its brand-new N3 node or 28nm/specialty technologies, it should be noted that the company needs all kinds of lithography machines for them. An N3-capable fab needs dry litho tools, immersion litho scanners, and EUV-capable equipment. Without required number of dry and immersion scanners, etching, deposition, resist removal, inspection and many other tools (that do not necessarily come from ASML), an advanced EUV machine on its own will be useless. Meanwhile, lithography tools are not the only machinery that a fab needs.

Apparently, demand for fab equipment is so high that TSMC will not be able to spend its CapEx budget this year, and some purchases related to advanced (N7 and thinner) and mature nodes will be delayed into 2023. As a result, TSMC's CapEx this year will be at a lower end of the company's prediction (around $40 billion) not because it does not want to invest, but because it cannot invest in tools that are not available.

"Our suppliers have been facing greater challenges in their supply chains, which are extending tool delivery lead times for both advanced and mature nodes," said Wei. "As a result, we expect some of our CapEx this year to be pushed out into 2023."


Meanwhile, ASML, the world's largest producer of lithography tools, this week posted its Q2 2022 revenue of €5.431 billion, a 53% increase year-over-year. During the second quarter, the company supplied (recognized revenue) a total of 91 new lithography systems (up from 59 in Q2 2021), with 12 of those being EUV systems (up from 3 in Q2 2021):_





_What is perhaps more important is that ASML's net bookings for new systems totaled €8.461 billion during the quarter, so the company's bookings are higher than its quarterly sales. Meanwhile, ASML's backlog now totals €33 billion and spans multiple years to come, which essentially is a yet another confirmation that it is extremely hard for companies like TSMC to get new tools.

The backlog for DUV machines is now at around 600 units and product order lead time for a new DUV scanner is now about two years. The backlog for EUV tools is well over 100 machines. Meanwhile, ASML says that PO lead time metrics is not exactly relevant since it faces supply chain and own production capacity issues, which means that its partners have to build additional capacity and ASML has to build additional capacity (which takes time) and only then it will be able to supply the tools ordered recently.

For the whole year 2022, ASML expects to ship 55 extreme ultraviolet (EUV) lithography scanners, but recognize revenue of 40 EUV systems valued at €6.40 billion (€160/$140 million per machine) because 15 EUV machines will be so-called fast shipments — a shipment process that skips some of the testing at ASML's factory and then final testing and formal acceptance are performed at the customer site (which is why revenue acceptance gets deferred). The company also intends to supply 240 deep ultraviolet (DUV) litho tools this year. ASML expects its production capacity to total 60 EUV scanners and 375+ DUV tools in 2023._

*Summary:*

_While demand for chips aimed at client/consumer devices is getting softer due to rising inflation and geopolitical uncertainty, the global megatrends like 5G, AI, HPC, and autonomous vehicles are still there and these require loads of advanced system-on-chips, specialty processors, and not-so-advanced things like sensors. Therefore, TSMC is confident of strong demand for chips in the coming years.

But there is a problem with meeting that demand as TSMC is not the only company that is expanding its manufacturing capacity. ASML's backlog now includes over 100 EUV scanners and around 600 DUV scanners — it will take years for the company to ship these machines. As a result, TSMC has problems with obtaining tools it needs to build additional capacity it needs. It is unclear whether the company has enough capacity to meet all of the potential demand from its largest customers on N3, N4, N5 nodes (Apple, MediaTek, AMD, NVIDIA, etc.), but, ultimately, tool shortages will affect all of its process technologies.


https://www.anandtech.com/show/1750...-remains-strong-but-getting-fab-tools-is-hard _


----------



## over9k (10 August 2022)

over9k said:


> IMHO, some wonderful buying opportunities are going to present themselves, I just don't know when.



Today's looking like it might be one of them:




-12.5% as of this posting and still dropping. I've made a small buy.


----------



## over9k (10 August 2022)

The soft power being wielded on the supply side:



Today, biden signed the "CHIPS" act (Creating Helpful Incentives to Produce Semiconductors for America Act) into law:




The chips act is essentially a financial both carrot and stick package designed to bring production of the only thing that the united states is actually reliant on any part of the rest of the world for, back onto american shores. Take note of the fact that the act falls under the umbrella of "national defense" because the fact is that at a strategic level, it is.



*The carrot: *

In order to support the rapid implementation of the semiconductor provisions included in the Fiscal Year (“FY”) 2021 National Defense Authorization Act (“NDAA”), this division would provide *$52.7 billion* in emergency supplemental appropriations.

*$50.0 billion* allocated over 5 years for a CHIPS for America Fund. Funding must be used to implement the Commerce Department semiconductor incentive—*to develop domestic manufacturing capability and research and development* (“R&D”) and workforce development programs authorized by the FY21 NDAA (Sec. 9902 & 9906).

*Incentive Program:*

$39 billion allocated over 5 years to implement the programs authorized in Sec. 9902, of which $2 billion is explicitly provided to focus solely on legacy chip production to advance economic and national security interests. *These chips are essential to the auto industry,* the military, and other critical industries. Within the incentive program, up to $6 billion may be used for the cost of direct loans and loan guarantees.

Timeline: $19 billion in FY22, including the $2 billion legacy chip production funding, then $5 billion each year, FY23 through FY26

*Commerce R&D and workforce development programs:*

$11 billion appropriated over 5 years to implement programs authorized in Sec. 9906, including the National Semiconductor Technology Center (“NSTC”), the National Advanced Packaging Manufacturing Program, and other R&D and workforce development programs authorized in Sec. 9906.

$2 billion for a CHIPS for America Defense Fund: Funding would be appropriated for the Microelectronics Commons, a national network for onshore, university-based prototyping, lab-to-fab transition of semiconductor technologies—including Department of Defense-unique applications—and semiconductor workforce training.


It also creates a 25 percent investment tax credit for investments in semiconductor manufacturing and includes incentives for the manufacturing of semiconductors, as well as for the manufacturing of the specializ ed tooling equipment required in the semiconductor manufacturing process. Taxpayers may elect to treat the credit as a payment against tax (“direct pay”). The credit is provided for property that is placed in service after December 31, 2022, and for which construction begins before January 1, 2027.

So basically, 2 billion for legacy chip production, 37 for current tech, 11 for R&D, and a 25% tax credit for any of your own money you add on top.



*The stick: *

Prohibits the recipients of Federal incentive funds from expanding or building new manufacturing capacity for certain advanced semiconductors in specific countries that present a national security threat to the United States. To ensure that these restrictions remain current with the status of semiconductor technology and with U.S. export control regulations, the Secretary of Commerce, in coordination with the Secretary of Defense and the Director of National Intelligence, would be required to regularly reconsider, with industry input, which technologies *and countries* are subject to this prohibition.

In short, companies are banned from providing strategic adversaries of the united states (currently China and Russia) with advanced chips if they are awarded subsidies under the act, and the government reserves the right to change which chips can be banned from which countries at any time. This enables the united states' government to control a significant portion of the world's microchip supply in the same way that it now controls a significant portion of the world's oil supply (the U.S president already has the power to block in part or entirely, all u.s oil exports).


Note: This act does not mean that the united states will not/would not get involved in a war between china & taiwan. Its purpose is to ensure that the united states does not HAVE to get involved in said war (defend taiwan) in order to secure its chip supply.

I will cover the military side of the china/taiwan tensions/conflict in the next post.


----------



## waterbottle (10 August 2022)

Looks like a dump before CPI.


----------



## qldfrog (10 August 2022)

Another kick in the guts,
Ukraine has forced the closure yesterday of its southern oioeline providing only source of energy to 3 landlocked EU countries
Ex Tchecoslovàkia and Hungary i think, which are all key subcontractors to german and italian industry.
The EU economy is dead in 2 months..september will start the collapse there with fully broken supply chains and i guess inflation resurgence due to lack of supply?
China and US popping Champagne


----------



## divs4ever (10 August 2022)

i wonder when Germany  finally realizes it was the patsy 

 good-bye EU you were a valuable history lesson


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## divs4ever (10 August 2022)

OOPS

 our wonderful reliable internet  strikes again

 good luck with that digital currency


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## redsmartie (10 August 2022)

Pretty soon, I think a good judge of inflation will be the length of the queue going out the door down the street from the cheap 7-11 coffee machine on Eddy Street near Chinatown. Plastic and coin in the mix here. CPU, internet all make coins obsolete, hopefully inflation to follow.


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## divs4ever (10 August 2022)

redsmartie said:


> Pretty soon, I think a good judge of inflation will be the length of the queue going out the door down the street from the cheap 7-11 coffee machine on Eddy Street near Chinatown. Plastic and coin in the mix here. CPU, internet all make coins obsolete, hopefully inflation to follow.



 not so , but it will be very hard to guesstimate the real economy  ( and you can't trust the regime to tell you the truth  on most things )

 the inflation ( taxation ) will be simply hidden from view .


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## waterbottle (10 August 2022)

China inflation at 2.7% for the previous month, albeit less than the expected 2.9% that's 32% annualised. That's despite rolling lockdowns. Holy 💩💩💩


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## moXJO (10 August 2022)

Australia’s wild reaction to the rising cost of living​Food costs are skyrocketing, but new data shows that instead of being more frugal, Aussies are reacting in a very strange way.





__





						Loading...
					





					www.news.com.au
				




So people are spending big. Kind of what I've been seeing in the real world. Everyone is buying, eating out, etc. 

A lot of money still to grind out. 

Fed was to timid imo. Should have gone hard early. There's a danger with slow prolonged hikes.


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## qldfrog (10 August 2022)

moXJO said:


> Australia’s wild reaction to the rising cost of living​Food costs are skyrocketing, but new data shows that instead of being more frugal, Aussies are reacting in a very strange way.
> 
> 
> 
> ...



This is a std response to inflation when fear( of losing job) is not there yet.
Buy now before it is too late and more expensive.i feel the same.. what's the point saving if you can not afford it anymore with these saved dollars next year so new car, eating out, holidays..etc


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## divs4ever (10 August 2022)

moXJO said:


> Australia’s wild reaction to the rising cost of living​Food costs are skyrocketing, but new data shows that instead of being more frugal, Aussies are reacting in a very strange way.
> 
> 
> 
> ...



 buying durable  ( or long-life ) products is better  , chances are they will be more expensive at year's end  ( and even more expensive ( or hard to get  later on )

 AND since bank-ins  are 'on the table '   do you trust your government with the deposit guarantee  ( and not go full libtard  and start freezing bank accounts on dissenting voices )

 i would have thought the great toilet roll rush  would have been adequate warning  ( the public trust Kleenex more than the government )


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## againsthegrain (10 August 2022)

divs4ever said:


> buying durable  ( or long-life ) products is better  , chances are they will be more expensive at year's end  ( and even more expensive ( or hard to get  later on )
> 
> AND since bank-ins  are 'on the table '   do you trust your government with the deposit guarantee  ( and not go full libtard  and start freezing bank accounts on dissenting voices )
> 
> i would have thought the great toilet roll rush  would have been adequate warning  ( the public trust Kleenex more than the government )



Can't do a bank run with digital currency,  only crims and bikies hold cash right?


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## divs4ever (10 August 2022)

againsthegrain said:


> Can't do a bank run with digital currency,  only crims and bikies hold cash right?



 what about my coin ( and note ) collection 

 and if only crim's and bikies hold cash  , that doesn't reflect well on the government  who vouch-safe that very same cash ( promise to pay the value of )


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## moXJO (10 August 2022)

divs4ever said:


> buying durable  ( or long-life ) products is better  , chances are they will be more expensive at year's end  ( and even more expensive ( or hard to get  later on )
> 
> AND since bank-ins  are 'on the table '   do you trust your government with the deposit guarantee  ( and not go full libtard  and start freezing bank accounts on dissenting voices )
> 
> i would have thought the great toilet roll rush  would have been adequate warning  ( the public trust Kleenex more than the government )



I had to buy a new laptop. $2700 year ago (if you could find it) now about  $3800. Consumer spending is probably up because it's simply more expensive.


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## moXJO (10 August 2022)

divs4ever said:


> what about my coin ( and note ) collection
> 
> and if only crim's and bikies hold cash  , that doesn't reflect well on the government  who vouch-safe that very same cash ( promise to pay the value of )



Cash in the wallet is better imo. You can only spend what you have. Not like cards where you can tap your account into oblivion.


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## frugal.rock (10 August 2022)

moXJO said:


> Food costs are skyrocketing, but new data shows that instead of being more frugal, Aussies are reacting in a very strange way.



I'm glad everyone isn't frugal, otherwise I'd be fightin' for the discounts. 😩



againsthegrain said:


> Can't do a bank run with digital currency, only crims and bikies hold cash right?



Also cigar smoking fiend's... and certain minority ethnic groups/ suburbs and then there's outliers, like me 🙀


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## divs4ever (10 August 2022)

moXJO said:


> I had to buy a new laptop. $2700 year ago (if you could find it) now about  $3800. Consumer spending is probably up because it's simply more expensive.



 that is one factor  ( but maybe not the only one )


moXJO said:


> Cash in the wallet is better imo. You can only spend what you have. Not like cards where you can tap your account into oblivion.




i do not brag about  that  ( i normally  dress very modestly  as well )



frugal.rock said:


> I'm glad everyone isn't frugal, otherwise I'd be fightin' for the discounts. 😩




 i am busy cherry-picking   ( on market  and in the supermarket ) , you might need a mouth-guard 



frugal.rock said:


> I'm glad everyone isn't frugal, otherwise I'd be fightin' for the discounts. 😩
> 
> 
> Also cigar smoking fiend's... and certain minority ethnic groups/ suburbs and then there's outliers, like me 🙀



 you mean people who don't trust the government  ( because they have long memories )


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## frugal.rock (10 August 2022)

divs4ever said:


> i am busy cherry-picking ( on market and in the supermarket ) , you might need a mouth-guard



Wots the point of a mouf guard when ya got no teef?
Make sure you got your stack hat on and knee pads...😘


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## 3 hound (10 August 2022)

frugal.rock said:


> Wots the point of a mouth guard when ya got no teef?




Deep.


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## againsthegrain (10 August 2022)

frugal.rock said:


> Wots the point of a mouf guard when ya got no teef?
> Make sure you got your stack hat on and knee pads...😘



reminds me of this classic, hope u say it in the same way


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## 3 hound (10 August 2022)

3 hound said:


> Deep.



Well the context around this comment evaporated quickly.


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## divs4ever (10 August 2022)

i have had dentures  for decades  ,, a mouth-guard still reduces damage if you  bite your tongue or lip


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## divs4ever (10 August 2022)

remembering my days as a child  amongst Boxing Day sales  those shoppers' elbows get really active and wild


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## Smurf1976 (10 August 2022)

moXJO said:


> Australia’s wild reaction to the rising cost of living​Food costs are skyrocketing, but new data shows that instead of being more frugal, Aussies are reacting in a very strange way.
> 
> https://www.news.com.au/finance/mon...g/news-story/5429ccdb239e83ff797ee94bf9acc69b
> So people are spending big. Kind of what I've been seeing in the real world. Everyone is buying, eating out, etc.



I've a few friends involved with the entertainment industry and they've all told me much the same.

The public are looking for a good time, they're willing to spend money and they're willing to push their own boundaries.

So pretty much any band that has "feel good" music and a decent stage presence is selling well so far as live performance is concerned. The kind of artists that get the crowd waving their hands in the air, singing and/or dancing are exactly what the public are looking for right now.

Related to that is a change in perceived barriers. In short, plenty are saying stuff it, they couldn't care less what anyone thinks of the music or how "credible" the band is, if they like it then they're doing it. Those who wouldn't have been seen dead at a pop concert before the pandemic are now saying yeah, musically this isn't really my thing but it looks like heaps of fun, you only live once, so let's do it.

Related to that is a rejection of being told what to do. People have had enough of others telling them they can't do this or that and they're saying no, get stuffed, I'm doing it. Who cares what some music critic or moral preacher thinks about the band or their "sinful" lyrics. It's harmless fun, it's entertainment it's not life advice, so here we go.

Right now seems like a great time to be selling fun.


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## sptrawler (10 August 2022)

Smurf1976 said:


> Right now seems like a great time to be selling fun.



Really how do they expect people to react, they have for the first time in history been paid to stay home from work, now when they are allowed out the pandemic is still here and people are still dying. 
But now they are told, well now you pay for staying home with higher costs, how do they really think people will react?
Older people will say I'm nearly three years closer to death, and the virus is still here. 
Therefore as I heard one woman on T.V getting off the Coral Princess ship say, who cares about the virus, I have another six cruises booked before Christmas.
It is going to be an inflation explosion, or a debt and default explosion, time will tell IMO.
The 5% payrise for cost of living adjustment, will now start and feed into the inflation, I don't think it will end well. 
The longer it takes to put a lid on it, the more pain will be felt by those at the bottom of the food chain, pandora's box has been opened.


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## over9k (10 August 2022)

waterbottle said:


> Looks like a dump before CPI.



cpi numbers in, "only" 8.5 vs estimated 8.7, everything mooning.


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## waterbottle (10 August 2022)

over9k said:


> cpi numbers in, "only" 8.5 vs estimated 8.7, everything mooning.



It's nuts....
Not going to fight the trend anymore


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## wayneL (10 August 2022)

over9k said:


> cpi numbers in, "only" 8.5 vs estimated 8.7, everything mooning.



Merely devastating versus catastrophic...

Bullish  🌏


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## over9k (11 August 2022)

You'd have been in a similiar position buying anything at the bottom (except the dow). Funny how it's worked out hey?


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## over9k (11 August 2022)

wayneL said:


> Merely devastating versus catastrophic...
> 
> Bullish  🌏



It's the first one this year that hasn't been above estimates so it's literally the first one this year where it's looked like the fed has actually gotten things under control. 

So with that fear gone, markets rally. Hard.


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## qldfrog (11 August 2022)

Interesting article before release of cpi figures:








						Don't be fooled by a drop in U.S. headline inflation. Markets will be attuned to another figure on Wednesday.
					

The core CPI reading, or measure which strips out volatile food and energy costs, could have the propensity to jolt markets after Wednesday's release.




					www.marketwatch.com
				



Hint: no improvement, core figures as BAD as expected yet: party time.yeahh absolutely crazy:
Figures released are BAD...


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## divs4ever (11 August 2022)

qldfrog said:


> Interesting article before release of cpi figures:
> 
> 
> 
> ...



 all about the narrative   , am looking to see if they  have 'tweaked' the CPI calculations again  ( and i wouldn't be shocked if it has been 'adjusted ' )


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## mullokintyre (11 August 2022)

divs4ever said:


> all about the narrative   , am looking to see if they  have 'tweaked' the CPI calculations again  ( and i wouldn't be shocked if it has been 'adjusted ' )



Adjusted?? I am shocked, shocked I tell you!
Mick


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## Dona Ferentes (11 August 2022)

*What it means*

At a time when many commentators are grappling to find an analogy to explain the current inflation episode, we believe it’s worth considering what happened in the United States in 1947.

At the time, the US was beginning to recover from global disruption caused by WWII. Global productive capacity, which had previously been focused on (or destroyed by) the war, struggled to supply post-war consumer demand as soldiers returned home from Europe and the Pacific. Additionally, wartime price controls were removed. Two years later, the US CPI was +14.4%. By 1949, the change in CPI fell to a -1.0%.

Was this decrease driven by a large rate hike cycle enacted by a hawkish Federal Reserve?

No. In fact, the Fed’s 12-month rate increased only slightly from 0.75% in July 1947 to 1.25% in Aug 1948. The real driver was the natural expansion and recovery of US / global productive capacity after a traumatic disruption to normal operations.

Looking back, the 1947 inflation was clearly transitory (despite the two-year lag in CPI data). It begs the question: will we come to the same conclusion with the current inflation episode?









						12 Charts We’re Thinking About Right Now – ShareCafe
					

Quay Global uses a series of handy charts to add some much-needed context to the latest trends in housing, retail and venture capital – and what they mean for investors.




					www.sharecafe.com.au


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## redsmartie (11 August 2022)

What will the next number be in this series?


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## waterbottle (11 August 2022)

Dona Ferentes said:


> View attachment 145212
> 
> 
> 
> ...




Interesting comparison. There are alot of similarities between COVID & WW2 - interruption to normal supply lines; economies disrupted internationally to deal with an external threat; redefining the work place (introduction of women in workforce v. WFH).

The major difference this time though is we are on the cusp of conflict (as opposed to post WW2 peace time if you exclude the cold war...).

It's absurd to think that during a period of conflict in a region critical to energy supply, that the price of oil would be less than that during peace time.


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## waterbottle (11 August 2022)

redsmartie said:


> What will the next number be in this series?
> 
> View attachment 145215




Probably down, inflation expectations have been decreasing in the US too


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## redsmartie (11 August 2022)

waterbottle said:


> Probably down, inflation expectations have been decreasing in the US too








__





						Australia Inflation Expectations - October 2022 Data - 1995-2021 Historical
					

Inflation expectations in Australia increased to 6% in November 2022 from 5.4% in October, rising for the first time since June and possibly reflecting recent data on official inflation, according to the Melbourne Institute. The November inflation expectation figure, based on a survey of...




					tradingeconomics.com
				




5.9%


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## waterbottle (11 August 2022)

Clearly petrol/gas/crude prices are driving this. Inflation expectations & CPI seem to have peaked globally - for now. Not sure where the markets are going with this. 
Inflation remains high and the Fed will likely continue to hike. CME Fedwatch tool says that 50bps hike is most likely (57%) v. 75bps (43%). Yield curve remains inverted. Consumers increasing dependent on credit cards to pay for inflation. US Tech has been laying off employees in significant numbers. A number of commentators (hedge fund managers) suspect the US is, or will be, in a recession.

The main question will be whether or not price of oil can begin to head upwards again. Interested to hear what @over9k and @Smurf1976 have to say...


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## over9k (11 August 2022)

waterbottle said:


> Clearly petrol/gas/crude prices are driving this. Inflation expectations & CPI seem to have peaked globally - for now. Not sure where the markets are going with this.
> Inflation remains high and the Fed will likely continue to hike. CME Fedwatch tool says that 50bps hike is most likely (57%) v. 75bps (43%). Yield curve remains inverted. Consumers increasing dependent on credit cards to pay for inflation. US Tech has been laying off employees in significant numbers. A number of commentators (hedge fund managers) suspect the US is, or will be, in a recession.
> 
> The main question will be whether or not price of oil can begin to head upwards again. Interested to hear what @over9k and @Smurf1976 have to say...



Demand side unlikely to rise much until the winter thaw of next year. Supply side is a whole different question/shitshow.

On the demand side, we also have the massive curveball of the china lockdowns to contend with, very difficult to say what will happen there (will they just stop bothering at some point?) or what. Hard to say on that one.

Nothing I've read or seen (no person, no data point, nothing) suggests that the supply side is going to improve. Even the saudi's are pumping at almost full capacity. Unless there's some kind of plan to get libya and/or venezuela back online in the next few months, we're in quite the pinch.


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## waterbottle (11 August 2022)

over9k said:


> Demand side unlikely to rise much until the winter thaw of next year. Supply side is a whole different question/shitshow.
> 
> On the demand side, we also have the massive curveball of the china lockdowns to contend with, very difficult to say what will happen there (will they just stop bothering at some point?) or what. Hard to say on that one.
> 
> Nothing I've read or seen (no person, no data point, nothing) suggests that the supply side is going to improve. Even the saudi's are pumping at almost full capacity. Unless there's some kind of plan to get libya and/or venezuela back online in the next few months, we're in quite the pinch.




What about EU initiatives to reduce their reliance on fossil fuels?


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## over9k (11 August 2022)

waterbottle said:


> What about EU initiatives to reduce their reliance on fossil fuels?



doubt.jpg




"A bill providing the legal basis to burn more coal for power generation is now making its way through parliament, aiming to boost the output of so-called reserve power plants that are irregularly used for grid stabilization and were scheduled to go offline over the next few years.

In addition, power plants that were already mothballed under the phaseout plan but are still technically operational are to be brought back online. Those so-called plants of last resort usually burn more polluting lignite from mines in eastern Germany.

Kerstin Andreae, head of the German Association of Energy and Water Industries, told German public broadcaster ARD on Monday that reserve power plants burning German lignite can be brought online in "a relatively short time span." Those using hard coal for electricity generation would need coal imports from abroad, she said.

Germany closed its last remaining hard coal mine in 2018, and has since relied on Russia for half of its needs of the fossil fuel. "Russian coal can be completely replaced by other countries in a few months. Especially from the US, Colombia and South Africa," Alexander Bethe, board chairman of the Association of Coal Importers, said in a statement.

While parliament is scheduled to vote on the coal bill by July 8, *the government has made it clear that the revival of the fossil fuel in Germany will last only until March 2024. By that time, Berlin wants to have Russian gas supplies reduced to about 10%, from 55% before the war and 35% currently..*.

The new measures come amid heightened German efforts to buy so-called liquefied natural gas (LNG) on the world market — an increasingly crowded trade, given that other countries are also eager to cut their gas dependence on Russia. For that, Germany is planning to use floating regasification plants, *because it doesn't have any of the facilities needed to import LNG*".




Europe has been blighted with leftism and leftists are idiots.

There's really only two other places they can get their petrochemicals from - usa and middle east. France loves nuclear but they're the only ones that do so aside from the green energy that oh my god, wouldn't you know it, DOES NOT WORK, it's back to fossil fuels.

Venezuela's gone, libya's gone, and they're doing everything they can to get off russia as fast as possible. There's only two real suppliers left after that and the saudis' taps are almost running flat out already, so that only leaves the americans.


----------



## waterbottle (11 August 2022)

over9k said:


> doubt.jpg
> 
> View attachment 145230
> 
> ...




I'm sure I read that Russia was halting coal supply to the EU too.... 
Seems like the next down leg is only delayed until fossil fuel prices head up for the winter.


----------



## over9k (11 August 2022)

waterbottle said:


> I'm sure I read that Russia was halting coal supply to the EU too....
> Seems like the next down leg is only delayed until fossil fuel prices head up for the winter.



I'm very bullish over the medium term  

The current narrative is that growth is back in play so I'm hoping for some lovely rotation plays over the next few months.


----------



## waterbottle (11 August 2022)

waterbottle said:


> I'm sure I read that Russia was halting coal supply to the EU too....
> Seems like the next down leg is only delayed until fossil fuel prices head up for the winter.







EU gas seasonality in 2017, data from the IEA. We may just be in a nidus, hmmmm...


----------



## InsvestoBoy (11 August 2022)

waterbottle said:


> China inflation at 2.7% for the previous month, albeit less than the expected 2.9% that's 32% annualised. That's despite rolling lockdowns. Holy 💩💩💩




The inflation rate you quote is already the YoY annual inflation rate. Annualising it is idiotically incorrect.

China inflation is low, not high.


----------



## InsvestoBoy (11 August 2022)

This is the dumbest thread full of the worst takes, congratulations everyone.


----------



## qldfrog (11 August 2022)

waterbottle said:


> What about EU initiatives to reduce their reliance on fossil fuels?



Consist in importing US shale oil/gas and restarting coal stations so far..and cold shower/switching lights and factories/central heating off. Good luck EU


----------



## waterbottle (11 August 2022)

InsvestoBoy said:


> The inflation rate you quote is already the YoY annual inflation rate. Annualising it is idiotically incorrect.
> 
> China inflation is low, not high.



You are correct. I'll edit the post. Why not contribute?


----------



## 3 hound (11 August 2022)

InsvestoBoy said:


> This is the dumbest thread full of the worst takes, congratulations everyone.




Thank you for your contribution, great insights.


----------



## divs4ever (11 August 2022)

waterbottle said:


> I'm sure I read that Russia was halting coal supply to the EU too....
> Seems like the next down leg is only delayed until fossil fuel prices head up for the winter.



 i could be wrong  but i thought the deal was coal for rubles  ( to 'unfriendly nations ' ) but since some EU  nations  are Green-tinged  they were stopping the import of Russian coal  ,  which will be interesting to watch in Germany  because they have  dirty BROWN  coal , in quality  ( and they are closing down the last 3 nuclear power plants )


----------



## moXJO (11 August 2022)

InsvestoBoy said:


> This is the dumbest thread full of the worst takes, congratulations everyone.



You most have got bored in the stock threads to be reading here. Quick, set the record straight on inflation.


----------



## over9k (11 August 2022)

InsvestoBoy said:


> This is the dumbest thread full of the worst takes, congratulations everyone.



Feel free to enlighten us. 

Otherwise, @Joe Blow it would appear we have another fcukwit in need of the banhammer.


----------



## over9k (11 August 2022)

"We think a tremendous amount of the demand side depends on china".

Jeez, I should do this professionally or something.


----------



## over9k (12 August 2022)




----------



## Knobby22 (12 August 2022)

InsvestoBoy said:


> The inflation rate you quote is already the YoY annual inflation rate. Annualising it is idiotically incorrect.
> 
> China inflation is low, not high.



Correct. Idiotically is the correct word.
USA Monthly inflation came in at 0% and this hasn't even be mentioned.  Hardly devastating as posted by one pundit with many agreeing comments.

Seems it doesn't fit a political narrative.


----------



## over9k (12 August 2022)

Knobby22 said:


> Correct. Idiotically is the correct word.
> USA Monthly inflation came in at 0% and this hasn't even be mentioned.  Hardly devastating as posted by one pundit with many agreeing comments.
> 
> Seems it doesn't fit a political narrative. Looks like a soft landing to me.



Yep, first month-on-month that hadn't increased in at least a year:




Markets are obviously thinking goldilocks/inflection point at the moment.

Of particular note is the ppi vs cpi spread - inputs dropping at a greater rate than sale prices = higher margins 

This also keeps improving:


----------



## 3 hound (12 August 2022)

Knobby22 said:


> Correct. Idiotically is the correct word.
> USA Monthly inflation came in at 0% and this hasn't even be mentioned.  Hardly devastating as posted by one pundit with many agreeing comments.
> 
> Seems it doesn't fit a political narrative.




Too many bull**** artists in economics. 

In reality it does not matter if the inflation "rate" stayed at 0% for the next decade if prices are still high relative to what people earn and people that work, pay tax and contribute to the economy can't afford fuel, food and a roof over their head.


----------



## Smurf1976 (12 August 2022)

waterbottle said:


> The main question will be whether or not price of oil can begin to head upwards again. Interested to hear what @over9k and @Smurf1976 have to say...




The basic situation at present to the best of my knowledge:

Non-OPEC countries are essentially flat out with production, there's nothing to spare at all. With price being what it is, anyone in a free market economy able to produce oil is doing so, there's simply no reason not to unless something breaks etc.

For the OPEC members that's where it gets interesting. The "normal" problem within OPEC is individual member countries exceeding quotas for reasons of financial self-interest whereas in 2022 the opposite problem has emerged, quite a few are really struggling to even meet the quota.

Bearing in mind that the quotas are intended to hold production down not up, that's a bit like saying you've got no chance of being fined for speeding since your car can't actually get to 100 km/h anyway.

From OPEC published data, April 2022 quota versus production. Figures are million barrels per day.

*OPEC members subject to quotas*:
Algeria = 1.00 (actual) | 1.002 (quota)
Angola = 0.27 | 0.309
Equatorial Guinea = 0.09 | 0.121
Gabon = 0.18 | 0.177
Iraq = 4.42 | 4.414
Kuwait = 2.64 | 2.666
Nigeria = 1.40 | 1.735
Saudi Arabia = 10.40 | 10.436
UAE = 3.01 | 3.006

*OPEC members exempt from quotas*:
Iran = 2.58
Libya = 0.90
Venezuela = 0.75

*Non-OPEC but participate in the quota system voluntarily*:
Azerbaijan = 0.58 | 0.682
Bahrain = 0.20 | 0.195
Brunei = 0.08 | 0.097
Kazakhstan = 1.33 | 1.621
Malaysia = 0.40 | 0.565
Oman = 0.84 | 0.837
Russia = 9.14 | 10.436
Sudan = 0.06 | 0.072
South Sudan = 0.15 | 0.123

*Total all OPEC+ with quotas excluding exempt members = 37.35 (actual) | 39.944 (quota)*

So there's a definite shortfall in meeting quota which from an historic perspective is abnormal, the traditional problem being the opposite. Of the lot there's only one that's significantly exceeding quota in % terms whilst a number are well short.

In Russia's case the reason is obvious but for most the general consensus is the reasons are a lack of functional production capacity. That is, either everything they have is running or whatever isn't running has some sort of physical problem. There's nothing to spare that's actually able to pump oil right now.

Saudi Arabia claims its present production capacity is 12 million barrels per day meanwhile a look at historic data suggests Iran's is likely about 3.9 million barrels per day. For the rest, it seems that there's probably a bit of spare capacity in some of them but overall it's not much, they're struggling to get production up, they're not struggling to keep it down.

Then we have the US releasing 1 million barrels per day of physical oil from the Strategic Petroleum Reserve. That by its very nature is a short term unsustainable oil "supply" that can't continue indefinitely, it's simply emptying out a storage facility.

Putting that together, there is uncertainty due to the nature of data and politicisation of some of it but my overall thought is that the only way to get global production up is to lift all restrictions on Iran. Beyond that, the Saudi's really only seem to have enough spare to offset the inevitable ending of SPR withdrawals but that's it, and there's not much spare anywhere else.

Physical oil supply is a real constraint on economic activity going forward is my thinking. Price may well come down, potentially a lot, but only so long as demand doesn't breach capacity which appears to be barely higher than present production.

There's a lot of uncertainty there, nobody on earth likely has every detail with confidence that it's correct, but that's my interpretation of the situation with oil.

The real energy problem however is LNG. Natural gas "as gas" is OK in some countries not exposed to global markets but for LNG being shipped, the market is beyond stuffed at the moment. It's actually cheaper to fire a boiler with jet fuel than it is to fire it with LNG right now and that says it all really. It's extremely expensive, if you can even get it.


----------



## qldfrog (12 August 2022)

Smurf1976 said:


> The basic situation at present to the best of my knowledge:
> 
> Non-OPEC countries are essentially flat out with production, there's nothing to spare at all. With price being what it is, anyone in a free market economy able to produce oil is doing so, there's simply no reason not to unless something breaks etc.
> 
> ...



And have not we been told that this US strategic reserve being depleted is also our Australian one?
That will simplify the US position if China ..or another black sawn..hits and we need our fuzl reserve within 30 days.
We won't need to wait 60 days for US tankers as our allotment will be gone😂


----------



## wayneL (12 August 2022)

Knobby22 said:


> Correct. Idiotically is the correct word.
> USA Monthly inflation came in at 0% and this hasn't even be mentioned.  Hardly devastating as posted by one pundit with many agreeing comments.
> 
> Seems it doesn't fit a political narrative.



The 0% is largely the effect of the POO coming off, have a look at everything else.

What was that about political narratives?

Worth noting much of the effect of previous high oil prices haven't even filtered through yet. In no was is the genie back in the bottle.


----------



## wayneL (12 August 2022)

wayneL said:


> The 0% is largely the effect of the POO coming off, have a look at everything else.
> 
> What was that about political narratives?
> 
> Worth noting much of the effect of previous high oil prices haven't even filtered through yet. In no was is the genie back in the bottle.



eg


----------



## Joe Blow (12 August 2022)

over9k said:


> Feel free to enlighten us.
> 
> Otherwise, @Joe Blow it would appear we have another fcukwit in need of the banhammer.




It is reasonable to expect that criticism of someone else's post should at least be accompanied by a response that outlines the basis upon which that criticism is based.


----------



## wayneL (12 August 2022)

Some more detail from Mish:









						Food at Home is Up 13.1 Percent From a Year Ago, Most Since February 1979
					

CPI Year-Over-Year Details  CPI: 8.5 Percent  CPI Less Food: 8.1 Percent CPI Food: 10.9 Percent CPI Food at Home: 13.1 Percent  CPI Food and Beverage: 10.5




					mishtalk.com


----------



## over9k (12 August 2022)

Joe Blow said:


> It is reasonable to expect that criticism of someone else's post should at least be accompanied by a response that outlines the basis upon which that criticism is based.



"Joe Blow and the time he tried to get into politics"


----------



## InsvestoBoy (12 August 2022)

Joe Blow said:


> It is reasonable to expect that criticism of someone else's post should at least be accompanied by a response that outlines the basis upon which that criticism is based.




You are going to need a bigger database to store that amount of text.


----------



## 3 hound (12 August 2022)

InsvestoBoy said:


> You are going to need a bigger database to store that amount of text.




It's true you must first post to contribute but it is not necessarily true that posting is  contributing


----------



## Joe Blow (12 August 2022)

On the Richter scale of internet conflicts, this ranks pretty low. But to be clear criticism should always be reasonable and explained, even if it is just a summary. And there is never any justification for insults because they add nothing to the discussion other than animosity. 

It's pretty simple.


----------



## Jeda (12 August 2022)

InsvestoBoy said:


> This is the dumbest thread full of the worst takes, congratulations everyone.




'A little bit of knowledge can be a dangerous thing'


----------



## Jeda (12 August 2022)

and there is a lot of little bits here 🍿


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## JohnDe (12 August 2022)

Mention of inflation here -


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## moXJO (12 August 2022)

InsvestoBoy said:


> You are going to need a bigger database to store that amount of text.






Jeda said:


> and there is a lot of little bits here 🍿



Trading isn't going well?


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## Jeda (12 August 2022)

moXJO said:


> Trading isn't going well?



on the contrary using some of my profits for a 3 month europe holiday maybe the drop into las vegas for a seminar and get some tax credits


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## moXJO (12 August 2022)

Jeda said:


> on the contrary using some of my profits for a 3 month europe holiday maybe the drop into las vegas for a seminar and get some tax credits



Trading went too well😁
Ah I know the feeling. Nothing like swinging your dck around in the "inflation" thread!


----------



## InsvestoBoy (12 August 2022)

moXJO said:


> Trading isn't going well?




After the painful process of collating and recording my accumulated FY21 transactions for CGT in early July, I haven't made a single transaction since and decided instead to become a goat farmer who trolls economically illiterate weenies in their spare time.


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## Jeda (12 August 2022)

moXJO said:


> Trading went too well😁
> Ah I know the feeling. Nothing like swinging your dck around in the "inflation" thread!


----------



## divs4ever (12 August 2022)

since i don't really 'trade ' at all  , am mostly invested  , but looking for those tasty morsels  , that fail to meet investors expectations  ( sadly my investor rivals seem to be pessimistic this reporting season , revealing less temptations 

 my goal  was to lock in income and bulk up the portfolio in anticipation of future inflation  , so the plan is currently proceeding slowly


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## qldfrog (12 August 2022)

Joe Blow said:


> On the Richter scale of internet conflicts, this ranks pretty low. But to be clear criticism should always be reasonable and explained, even if it is just a summary. And there is never any justification for insults because they add nothing to the discussion other than animosity.
> 
> It's pretty simple.



There is also an ignore to use against people you  judge... probably wrongly ( but life is short), as arrogant know it all dxck.
And everyone is happy and no drama...


----------



## waterbottle (12 August 2022)

Criticism is welcome - no one here has claimed to have all the answers. We're just discussing information that others may find useful. You can choose not to consume it.









						U.S. Consumer Price Index (August 2022)
					

U.S. Consumer Price Index (August 2022)




					economics.td.com
				












						Fed's Kashkari: More rate hikes ahead, and possible recession
					

(Reuters) -Minneapolis Federal Reserve Bank President Neel Kashkari on Wednesday said he is sticking to his view that the U.S. central bank will need to raise its policy rate another 1.5 percentage points this year and more in 2023, even if that causes a recession.  The Fed is "far, far away...




					finance.yahoo.com
				




And from the Fed's mouthpiece, emphasis is mine: 









						Fed Likely to Want Further Evidence of Inflation Slowdown
					

An easing in price pressures last month followed reports of stronger-than-expected wage growth, complicating the rate-setting outlook.




					www.wsj.com
				






			
				WSJ said:
			
		

> He [Powell] has said the central bank needs to see convincing evidence that monthly inflation figures are declining before dialing back interest-rate increases to more-traditional quarter-point increments, especially after officials felt burned by a slowdown in price readings last summer that proved temporary. They will see one more monthly CPI report before their September meeting.
> 
> Inflation diminished last summer “and then turned right around and went back up,” Mr. Powell said at a June news conference. “So I think we’re going to be careful about declaring victory.”
> 
> ...




And then an interesting article arguing why inflation has peaked, but may take a while to resolve:



			https://www.cmegroup.com/insights/economic-research/2022/might-inflation-have-peaked.html


----------



## divs4ever (12 August 2022)

THE REAL EMPLOYMENT DATA THE GOVERNMENT DOES NOT WANT YOU TO SEE!​


 should we change the thread title  to official deception ??


----------



## wayneL (12 August 2022)

FWIW, though the origin of the term is a bit more nuanced, economics is not known as the dismal science for nothing.

Make of that what you will.


----------



## InsvestoBoy (12 August 2022)

divs4ever said:


> THE REAL EMPLOYMENT DATA THE GOVERNMENT DOES NOT WANT YOU TO SEE!​
> 
> 
> should we change the thread title  to official deception ??





@Joe Blow just so I got this right, anyone can post any 30 min garbage video of a huckster loser like Mark Moss and the Aussie Stock Forums Reasonable Rule of Criticism Symmetry dictate one can't just say "this is a horseshit video by a dumbass"?

I am just checking to make sure before I post anything.


----------



## Joe Blow (12 August 2022)

InsvestoBoy said:


> @Joe Blow just so I got this right, anyone can post any 30 min garbage video of a huckster loser like Mark Moss and the Aussie Stock Forums Reasonable Rule of Criticism Symmetry dictate one can't just say "this is a horseshit video by a dumbass"?




That's not what you said. You said this:



InsvestoBoy said:


> This is the dumbest thread full of the worst takes, congratulations everyone.




If you want to criticise a video, criticise it. If you want to disagree with someone's post, do it. But to make a broad statement criticising "everyone" with no accompanying detail serves no purpose other than to provoke a reaction, which you got.


----------



## divs4ever (12 August 2022)

InsvestoBoy said:


> @Joe Blow just so I got this right, anyone can post any 30 min garbage video of a huckster loser like Mark Moss and the Aussie Stock Forums Reasonable Rule of Criticism Symmetry dictate one can't just say "this is a horseshit video by a dumbass"?
> 
> I am just checking to make sure before I post anything.



 so did you watch the video ??

 just asking 

 i already had insight because  a ( now deceased ) relative  was a federal government employee  who over 25 years  was working in several government departments  

 this is basically irrelevant to a trader if they are working on price signals 

 however an investor needs to at least see to the 'horizon ' whether it is 12 months way , 10 years away or 30 years away  , now sure there are plenty of deep valleys in the way  ....

BTW  several hucksters i have met are politicians  and hundreds of people listen to them


----------



## moXJO (12 August 2022)

InsvestoBoy said:


> @Joe Blow just so I got this right, anyone can post any 30 min garbage video of a huckster loser like Mark Moss and the Aussie Stock Forums Reasonable Rule of Criticism Symmetry dictate one can't just say "this is a horseshit video by a dumbass"?
> 
> I am just checking to make sure before I post anything.



Classic InsvestoBoy

The shortest tolerance to bs economics, on the forum. He's made me cry into my icecream criticising my bad takes once or twice.

Knows his stuff though.


----------



## waterbottle (12 August 2022)

@InsvestoBoy what's your take?


----------



## divs4ever (12 August 2022)

having gone to school with an economist  ( in the making ) he quite happily  realized economics ( at high school ) was BS and went on to a triple Ph.D. ( including Economics ) and made a career of it ( faculty dean in Economics at a US university ) and has a side-gig co-authoring text-books in computer algorithms ( and trading )

 however belief in the utterances of economists often guides government policies  and government policies sometimes create investment opportunities


----------



## qldfrog (12 August 2022)

moXJO said:


> Classic InsvestoBoy
> 
> The shortest tolerance to bs economics, on the forum. He's made me cry into my icecream criticising my bad takes once or twice.
> 
> Knows his stuff though.



If you "know your stuff" but are not open to criticism or different opinions, that leaves you open to deep disappointment when things do not go your way .a question of time..and in the share market where sciences are very esotheric at best, we are not talking civil engineering here😊 
and on topopen to manipulations right and left.good luck😁
But yes nothing new here with this gentleman....


----------



## qldfrog (12 August 2022)

qldfrog said:


> If you "know your stuff" but are not open to criticism or different opinions, that leaves you open to deep disappointment when things do not go your way .a question of time..and in the share market where sciences are very esotheric at best, we are not talking civil engineering here😊
> and on topopen to manipulations right and left.good luck😁
> But yes nothing new here with this gentleman....



A shame ...


----------



## moXJO (12 August 2022)

qldfrog said:


> If you "know your stuff" but are not open to criticism or different opinions, that leaves you open to deep disappointment when things do not go your way .a question of time..and in the share market where sciences are very esotheric at best, we are not talking civil engineering here😊
> and on topopen to manipulations right and left.good luck😁
> But yes nothing new here with this gentleman....



He's always been like that.
I enjoy a roast from time to time though.

The big problem with comments like that is people stop posting.


----------



## wayneL (12 August 2022)

moXJO said:


> He's always been like that.
> I enjoy a roast from time to time though.
> 
> The big problem with comments like that is people stop posting.



Well, obviously opening myself to ridicule... I watched div's video and thought it raise some interesting points for discussion.

Segue: determinism in economics is a mugs caper.


----------



## qldfrog (12 August 2022)

moXJO said:


> He's always been like that.
> I enjoy a roast from time to time though.
> 
> The big problem with comments like that is people stop posting.



I know, he has some proper posts from time to time but such an arrogant attitude( and French frog saying that ;-) ), I switched on the ignore straight after his comment even if not really involved in any way..
At a point , abysmal lack of EQ indicates a lack of IQ and that does not help him in life (or her..who knows)..I hope he realises one day
anyway ignore list for a while and peace of mind


----------



## divs4ever (12 August 2022)

wayneL said:


> Well, obviously opening myself to ridicule... I watched div's video and thought it raise some interesting points for discussion.
> 
> Segue: determinism in economics is a mugs caper.



 no ridicule from here , i have learned plenty from absolute novices ( and others ) they find angles i never dreamed of .. good and nasty


----------



## 3 hound (12 August 2022)

Well the thread that was happily on topic for nearly 90+ pages has been successfully derailed by some highly successful big time share trader that dropped in to tell us how stupid we are.

Is this what I have to look forward to if I become a successful big time share trader to?

No offence guys but I was hoping at that level of success it would more be a scenario involving wall to wall hookers and cocaine not posting insults here.


----------



## divs4ever (12 August 2022)

well inflation  is a fairly fixating  topic  

 ( can even cause obsession  , if you have been through a bad patch  .  like some of those poor souls in South America and Africa )

 just a shame our education system  doesn't give folks a better fiscal grounding ( think of the time saved by government watch-dogs if they did )


----------



## divs4ever (12 August 2022)

now while we are harping on about inflation  ( and still being indoctrinated ready for CBDCs )

another option is a currency change 

 when i was much younger  i was a paper-boy  (  1964 to 1969 )  Australian  switched currencies  , from pounds , shillings and pence   , with the theoretic minimum coin of a farthing ( one quarter of a penny ) but practically  a half-penny  to decimal currency   , ( dollars and cents  ) with the minimum coin of one cent 

 so in early 1966 ( January ) your Courier  Mail  cost  5 pence  one month later it became 5 cents ( 6 pence ) ( 20% price rise )  add in the cute rounding  to accommodate   12 pennies turning into 10 cents  , and you have an interesting 'price creep '

 and yet nobody talks about the inflation in Australia in 1966 

 would our government try such a fun tactic again


----------



## qldfrog (12 August 2022)

3 hound said:


> Well the thread that was happily on topic for nearly 90+ pages has been successfully derailed by some highly successful big time share trader that dropped in to tell us how stupid we are.
> 
> Is this what I have to look forward to if I become a successful big time share trader to?
> 
> No offence guys but I was hoping at that level of success it would more be a scenario involving wall to wall hookers and cocaine not posting insults here.



After a certain age, or a number of days, the wall to wall hookers become a bit too much for a body, even with cocaine..🤣😂


----------



## qldfrog (12 August 2022)

divs4ever said:


> now while we are harping on about inflation  ( and still being indoctrinated ready for CBDCs )
> 
> another option is a currency change
> 
> ...



I second that one:
2 cases i am well aware:
French Franc to euro, 
but a few decades earlier
The old Franc to the New Franc where new bills and coins where issued, with decimals moved by 2 positions
Also help to flush out money from behind beds and WWII hiding places
100 old Francs becomes overnight 1 New Franc...
A symptom of ramping inflation at the time, now we would go to a digital AUD that'll be sure


----------



## 3 hound (12 August 2022)

qldfrog said:


> After a certain age, or a number of days, the wall to wall hookers become a bit too much for a body, even with cocaine..🤣😂




I will take the risk.


----------



## frugal.rock (12 August 2022)

moXJO said:


> Nothing like swinging your dck around in the "inflation" thread!



I'll swing it any thread that I feel needs it... 🤨🙀🤪😹🕳️


----------



## frugal.rock (12 August 2022)

I like that @wayneL pointed out the correlation between the POO and CPI/inflation number's dropping. Saved me from doing it. Worth a cud chew...
🐂🐄🐐🦬🐏


----------



## qldfrog (12 August 2022)

frugal.rock said:


> I like that @wayneL pointed out the correlation between the POO and CPI/inflation number's dropping. Saved me from doing it. Worth a cud chew...
> 🐂🐄🐐🦬🐏



And poo dropping due to release of reserve so a one trick pony adding risk and liability.


----------



## rcw1 (12 August 2022)

Good evening

Both houses of our federal parliament sat 1-4 August 2022.  In the House of Representatives on 2 August, the speaker proposed the following discussion, during Matters of Public Importance Time, _the impact of rising interest rates and inflation on family budgets._
There was plenty of 'banter' from both sides of parliament.   Should anyone be interested, Hansard records this discussion within pp 37-46.  Political point scoring, yes, but for mine, some interesting information revealed. 

Hansard link:





						ParlInfo - Missing File
					

Search engine for Australian parliamentary documents and media.



					parlinfo.aph.gov.au
				





Kind regards
rcw1


----------



## over9k (13 August 2022)

moXJO said:


> He's always been like that.
> I enjoy a roast from time to time though.
> 
> The big problem with comments like that is people stop posting.



*People who aren't sure of themselves stop posting

I'd just whack him with the banhammer.


----------



## Tyre Kicker (13 August 2022)

rcw1 said:


> Good evening
> 
> Both houses of our federal parliament sat 1-4 August 2022.  In the House of Representatives on 2 August, the speaker proposed the following discussion, during Matters of Public Importance Time, _the impact of rising interest rates and inflation on family budgets._
> There was plenty of 'banter' from both sides of parliament.   Should anyone be interested, Hansard records this discussion within pp 37-46.  Political point scoring, yes, but for mine, some interesting information revealed.
> ...




What info took your interest rcw1?


----------



## moXJO (13 August 2022)

over9k said:


> *People who aren't sure of themselves stop posting
> 
> I'd just whack him with the banhammer.



A lazy investor like me, needs all you guys that are on top of your game for % gains. 
The occasional offensive take just comes with the territory.


----------



## frugal.rock (13 August 2022)

NASDAQ Piedmont (PLL) up 19% last night..


----------



## over9k (13 August 2022)

moXJO said:


> A lazy investor like me, needs all you guys that are on top of your game for % gains.
> The occasional offensive take just comes with the territory.



Well on that topic, would you be interested in a direct trade? 

I have a bridge in brooklyn I'd like to sell you


----------



## waterbottle (13 August 2022)

frugal.rock said:


> NASDAQ Piedmont (PLL) up 19% last night..



BBBY up 30%....

This is like Jan 2021 all over again with GME


----------



## JohnDe (13 August 2022)

frugal.rock said:


> NASDAQ Piedmont (PLL) up 19% last night..




PLL has been very good to me, though I did get a little worried when North Carolina County keeps delaying mining.

Keep an eye on ARKK, it dropped heavily to $36.90 but has slowly and steadily been climbing. Same with AAPL, down to $132 and now at $171


----------



## moXJO (13 August 2022)

over9k said:


> Well on that topic, would you be interested in a direct trade?
> 
> I have a bridge in brooklyn I'd like to sell you



Ewww Brooklyn.


----------



## againsthegrain (13 August 2022)

moXJO said:


> Ewww Brooklyn.



You guys are thinking two dimensionally,  still stuck on planet earth 









						Lunar Embassy, Earth
					

5 Million Land Owners! Lunar Embassy is the ONLY legitimate site to buy land on the Moon. Claim of Ownership filed in 1980. Mineral Rights. AS SEEN ON TV




					lunarembassy.com


----------



## over9k (13 August 2022)

againsthegrain said:


> You guys are thinking



No, nobody around here is doing that:


----------



## divs4ever (13 August 2022)

over9k said:


> Well on that topic, would you be interested in a direct trade?
> 
> I have a bridge in brooklyn I'd like to sell you



 sounds better than a beachfront property in Arizona 

but maybe moXJO  has a regular source of income ( or family commitments )

 we can't all  be cranked to 11  24/7 

 but yes  , sometimes a stock mention in this forum  leads to more detailed research  ( maybe even a winner )


----------



## divs4ever (13 August 2022)

over9k said:


> No, nobody around here is doing that:




you are correct 

 jogging in this area at 3 am  will get you shot .. 

A. by the police thinking you are a burglar 

B. by the junkies thinking you are a mule ( or on the way to work )

 and i don't have a goldfish  

 and the ISP is so pathetic  the fish is liable to die of old age   before the market chart loads


----------



## moXJO (13 August 2022)

againsthegrain said:


> You guys are thinking two dimensionally,  still stuck on planet earth
> 
> 
> 
> ...






over9k said:


> No, nobody around here is doing that:




This is why I still love the internet. Hustle central.


----------



## frugal.rock (13 August 2022)

moXJO said:


> This is why I still love the internet. Hustle central.



Everyday I'm hustling.... 🙀🐂
😘


----------



## over9k (14 August 2022)

So after a lot of success in stock market trading and making enough to trade my car in for a newer version I'm now going to do the same thing with my wife and trade her in for a younger model as well. The ongoing maintenance costs have just been killing me.

The car was costing a lot in upkeep too.


----------



## over9k (14 August 2022)

Just in case anyone's wondering just how much you didn't actually have to think about what to buy lately so long as you bought SOMETHING: 




That's everything since the low of the 14th. Aside from the dow (which has been a junk play since forever), you're not that far behind no matter what you bought. 

I'd just like to take credit for tipping NRGU as the best of the bunch however


----------



## Belli (14 August 2022)

As an income focused person I found it productive to buy no matter when.  The dividend/distribution income I received was up just under 8% compared with the previous FY.

I don't expect it to increase this FY by the same amount given the high distributions last FY by an EFT I hold which accounted for the largest portion of the increase but I do expect it to increase nevertheless through holding a greater number in each of the LICs/ETFs.

For the one direct share, which I haven't added to, no idea but as long as it funds my interstate trips I'll accept what it pays me.


----------



## divs4ever (14 August 2022)

i was thinking  companies ( and LICs ) would have to increase divs,  to help the SP. rise    after all interest rates are rising  and if you shop hard  you can get 2% ( plus ) in a term deposit  , so was thinking this reporting season  would be more uneven   ( commodity stocks seeing some love  , and retail stocks  facing a struggle for buyers )


 however the market action of the QBE  results seemed to contradict that 

 are we looking at  a rush to park cash ( in the market )

maybe i have been watching  the wrong places  but i haven't seen anything to buy so far in August


----------



## againsthegrain (14 August 2022)

divs4ever said:


> i was thinking  companies ( and LICs ) would have to increase divs,  to help the SP. rise    after all interest rates are rising  and if you shop hard  you can get 2% ( plus ) in a term deposit  , so was thinking this reporting season  would be more uneven   ( commodity stocks seeing some love  , and retail stocks  facing a struggle for buyers )
> 
> 
> however the market action of the QBE  results seemed to contradict that
> ...



more like 3% in term deposit im getting 2.5 - 2.6% in simple savings accounts...


----------



## over9k (14 August 2022)

againsthegrain said:


> more like 3% in term deposit im getting 2.5 - 2.6% in simple savings accounts...



Which means -5% by the official data and about -15% by the reality on the ground.


----------



## againsthegrain (14 August 2022)

over9k said:


> Which means -5% by the official data and about -15% by the reality on the ground.




Correct, best divs still around 6%.. still losing there or could of bought btc at 90-100k as a inflation hedge and be down 60% 

lazy interest is just that losing less on your dry powder rather then lighting it all up


----------



## divs4ever (14 August 2022)

againsthegrain said:


> more like 3% in term deposit im getting 2.5 - 2.6% in simple savings accounts...



 i don't follow them closely ( any more ) but was asked to look around near the end of June 

 cheers 

 ( lost the fascination  for term deposits   as  the bail-in laws    gradually strengthened )

 however  if a share( or LIC ) needs to pay 3% a year  to look competitive as an investment   , you wonder what will propel the share price  if earnings are weak


----------



## againsthegrain (14 August 2022)

divs4ever said:


> i don't follow them closely ( any more ) but was asked to look around near the end of June
> 
> cheers
> 
> ...



I never held a td and probably never will.  I need my funds ready right there to strike, probably I will never own  investment property either, not be confused with ppor...  until we became another state of China


----------



## Belli (14 August 2022)

Companies, including LICs, do not raise dividends in an attempt to raise the share price or look competitive in comparison with term deposits.  To even think they do is inane.  "Oh look Mum, the yield has gone from 3% to 4%.  How competitive!  Er, the amount of the dividend has remained the same, dear, but the price has gone down."

At a fundamental level price is driven by supply and demand. Investor activity factors in profits along with earnings projections.


----------



## divs4ever (14 August 2022)

Belli said:


> Companies, including LICs, do not raise dividends in an attempt to raise the share price or look competitive in comparison with term deposits.  To even think they do is inane.  "Oh look Mum, the yield has gone from 3% to 4%.  How competitive!  Er, the amount of the dividend has remained the same, dear, but the price has gone down."
> 
> At a fundamental level price is driven by supply and demand. Investor activity factors in profits along with earnings projections.



yes , you are correct , but people like me take note of historical div. payments ( as well as forecast divs  ) as a way to assess an acceptable price to buy in ( or add more ) , therefore you have a lack of price support  until a reasonable  yield  v. investment cash

 now to some that looks like a discount to NTA  , ( often inspiring the board into share buy-backs )

 needless to say  that i am more likely to buy ( or add more ) when a LIC is trading at a sizable discount  to NTA ( providing i like their strategy  , i don't just automatically buy them because they are cheap . )

 i am also aware  there are times when certain strategies  are more popular  than others ( but i am more likely to buy when they are less loved )

 in previous times i had a habit of buying corporate debt  at a discount to face value as well

 however my mom died several years  before this investing adventure so i don't consult her

 do i compare  yield ( on investment cash )   to risk perceived  ( on each target ) ABSOLUTELY

 another thing i consider in buying a LIC    is the amount of bank stocks in that LIC since bank bail-ins  are now an acceptable outcome ( to our government regulator )


----------



## Belli (14 August 2022)

Unless an LIC is a substantial holder in a bank (doubtful) then investors will only know if the LIC has bought or sold a portion twice a year via the half-year and full-year reports.   Relying on NTA announcements is fraught with difficulty as all they show is percentage changes month to month in the Top 20 or 25 holdings.  They do not show whether there have been purchases or not.  External market activity can change that percentage without the LIC actually doing anything.


----------



## over9k (15 August 2022)

HMMMMMM


----------



## waterbottle (15 August 2022)

over9k said:


> View attachment 145441
> 
> 
> HMMMMMM



Saudis extra bullish. A whole decade? Dayum


----------



## over9k (15 August 2022)




----------



## over9k (15 August 2022)

doubt.jpg 

Looking like I might be topping up a bit more tonight.


----------



## over9k (15 August 2022)

waterbottle said:


> Saudis extra bullish. A whole decade? Dayum






PLANS TO EXPAND CAPACITY


----------



## waterbottle (15 August 2022)

over9k said:


> View attachment 145463
> 
> 
> PLANS TO EXPAND CAPACITY



Crazy.

They must think the EU and US initiatives to move away from ICEs are hocus pocus...

Or they're a one trick pony...


----------



## divs4ever (15 August 2022)

over9k said:


> View attachment 145462
> 
> 
> doubt.jpg
> ...





 Iran will supply to whom ??

 they are already selling to China and India ( and trading outside of the Petrodollar )

 chances are Iran won't sell much to anyone who honors US sanctions 

 if the Saudis won't up production , there is even less chance Iran will ( and send it West  .. where funds could be seized at any moment )


----------



## over9k (15 August 2022)

divs4ever said:


> Iran will supply to whom ??
> 
> they are already selling to China and India ( and trading outside of the Petrodollar )
> 
> ...



I'm betting it's india


----------



## divs4ever (15 August 2022)

yes that would make a lot of sense   even if it was  direct goods swap ( no currency changes hands )


----------



## over9k (15 August 2022)

Aka "China is f**ked".


----------



## Smurf1976 (15 August 2022)

divs4ever said:


> Iran will supply to whom ??



Ultimately they’ve got somewhere circa 1.3 million bpd sitting idle give or take a bit.

That’s a large portion of global spare capacity as per my previous post.

Someone somewhere will buy it almost certainly. Doesn’t matter who so long as it’s going somewhere. China perhaps?


----------



## divs4ever (15 August 2022)

more likely China is exactly where it desires to be  .. stuffing certain  vocal supporters of Taiwan .

 certain other places  are looking at soaring official rates   and/or the mother of all debt panics 

 it the era of MMT  only external debt counts  the local nation can print as much as it likes


----------



## waterbottle (15 August 2022)

over9k said:


> View attachment 145465
> 
> 
> Aka "China is f**ked".




Interesting. 

China is also dealing with collapsing home sales. There re youtube videos of mortgagors refusing to payback loans as developers collapse and aren't delivering on homes. 

Convenient that the Taiwan problem has begun to escalate...


----------



## divs4ever (15 August 2022)

Smurf1976 said:


> Ultimately they’ve got somewhere circa 1.3 million bpd sitting idle give or take a bit.
> 
> That’s a large portion of global spare capacity as per my previous post.
> 
> Someone somewhere will buy it almost certainly. Doesn’t matter who so long as it’s going somewhere. China perhaps?



 China and India  would make a lot of sense  , am not sure they would help out Sri Lanka ( can't remember if Sri Lanka still has fuel refineries )  if Afghanistan had fuel refineries  they would make an interesting destination .

 lots of room for development in Afghanistan  .. would help to ease past tensions as well


----------



## divs4ever (15 August 2022)

waterbottle said:


> Interesting.
> 
> China is also dealing with collapsing home sales. There re youtube videos of mortgagors refusing to payback loans as developers collapse and aren't delivering on homes.
> 
> Convenient that the Taiwan problem has begun to escalate...



 yes a lot of events  happening at 'convenient times '


----------



## over9k (15 August 2022)

waterbottle said:


> Interesting.
> 
> China is also dealing with collapsing home sales. There re youtube videos of mortgagors refusing to payback loans as developers collapse and aren't delivering on homes.
> 
> Convenient that the Taiwan problem has begun to escalate...



This trainwreck has been coming for quite a while. People laughed at me when I pointed this out but china's demographics tells you everything you need to know really.


----------



## divs4ever (15 August 2022)

over9k said:


> This trainwreck has been coming for quite a while. People laughed at me when I pointed this out but china's demographics tells you everything you need to know really.



 yes the one-child policy  ,   was certainly a bold initiative , especially in hindsight  as we watch  the consequences after that policy was relaxed  ( not many families stepped up to embrace the two-child policy )  ,  and record-keeping on 'families '  is currently a mess ( as children were secretly adopted out )

 and of course it also create a massive gender imbalance   

 it may yet be the CCP's largest blunder to date


----------



## qldfrog (15 August 2022)

divs4ever said:


> yes the one-child policy  ,   was certainly a bold initiative , especially in hindsight  as we watch  the consequences after that policy was relaxed  ( not many families stepped up to embrace the two-child policy )  ,  and record-keeping on 'families '  is currently a mess ( as children were secretly adopted out )
> 
> and of course it also create a massive gender imbalance
> 
> it may yet be the CCP's largest blunder to date



Wo it, china would still be starving.
By creating a 1 child policy, it also meant families were investing a lot into the only child so instead of 2 y11 graduates, you got a 1 university graduate.
It also raised the type of goods consummed from basics to higher level domestic consumption, and so allowed China's economy to detach itself from export only focus.
Most are unaware  in the west, but we will discover after the fact that whatever we trumpet, we aka the west need China more  than China needs us.
Ukraine repeat..and seeing how we learnt ftom past errors, not agood time to be, among others, Taiwanese...
My opinion..just compare the average Indian vs average Chinese.


----------



## qldfrog (15 August 2022)

qldfrog said:


> Wo it, china would still be starving.
> By creating a 1 child policy, it also meant families were investing a lot into the only child so instead of 2 y11 graduates, you got a 1 university graduate.
> It also raised the type of goods consummed from basics to higher level domestic consumption, and so allowed China's economy to detach itself from export only focus.
> Most are unaware  in the west, but we will discover after the fact that whatever we trumpet, we aka the west need China more  than China needs us.
> ...



funnily, China Reserve bank reduced rates today!!


			Bloomberg - Are you a robot?


----------



## Knobby22 (15 August 2022)

divs4ever said:


> yes the one-child policy  ,   was certainly a bold initiative , especially in hindsight  as we watch  the consequences after that policy was relaxed  ( not many families stepped up to embrace the two-child policy )  ,  and record-keeping on 'families '  is currently a mess ( as children were secretly adopted out )
> 
> and of course it also create a massive gender imbalance
> 
> it may yet be the CCP's largest blunder to date



3 child policy now. Getting desperate.


----------



## divs4ever (15 August 2022)

qldfrog said:


> Wo it, china would still be starving.
> By creating a 1 child policy, it also meant families were investing a lot into the only child so instead of 2 y11 graduates, you got a 1 university graduate.
> It also raised the type of goods consummed from basics to higher level domestic consumption, and so allowed China's economy to detach itself from export only focus.
> Most are unaware  in the west, but we will discover after the fact that whatever we trumpet, we aka the west need China more  than China needs us.
> ...



 from memory  China had already  starved   .. during the Great Leap forward  , 

 now maybe it is not currently a thing  , but when i grew  up a Chinese male ( ethnic Chinese  even though born in Australia/NZ or wherever ) he was matched up with a wife from China (mainly the mainland but sometimes from Taiwan )

 so there was a trickle of prime breeding  ladies  into other nations  ,

 now yes the 'little prince '  syndrome ( mostly because  when forced into choice  the family strongly preferred  males ) has become a problem  for multiple reasons ( maybe the Chinese government foresaw  this  is a discrete solution  to the older citizens  and aged care  , otherwise  the problem would be similar to Japan )

 one major difference   between China and India   (  since they were both 'reborn ' as independent nations shortly after WW2 )   is India was more divided   , both by the caste system   and the stronger local area governments (i am not convinced on the caste system  , but strong regional governments could be a winning edge , quicker recognition and solutions to problems )

 what would be interesting to see  , is IF India can become the world's leading ( and undisputed ) economic power  before China manages that feat  ( currently you could argue  China is either No.1 or 2 depending on the metrics used )

 personally i am tilting  my international investing towards India  because i can see more room for growth  , sure they still have several problems  , but they can be solved by Indians 

 one thing for sure  , it the West is NOT learning from the past  the situation around China   has clear echoes of pre-WW2 Japan

 only 'the new Japan ' is at least ten times larger  and the US  is weak and unstable


----------



## divs4ever (15 August 2022)

Knobby22 said:


> 3 child policy now. Getting desperate.



 yes , the one child policy  created a BIG problem  , maybe it was kept in place  too long , or maybe it was always going to create this problem once the path was chosen 

 i have always been a fan  , of lifting the population living standards  , and when that is done population growth  seems to decline  ,  i think it is something to do with  the survival of bloodlines ( because it seems to affect other species as well , not just humans )

 for China   , i suspect  the current breeding generation  are unwilling to work hard enough to support 3 or 4 children  ( and if a 'young prince '  not used  to a multiple child family  scenario )


----------



## 3 hound (15 August 2022)

divs4ever said:


> yes , the one child policy  created a BIG problem  , maybe it was kept in place  too long , or maybe it was always going to create this problem once the path was chosen
> 
> i have always been a fan  , of lifting the population living standards  , and when that is done population growth  seems to decline  ,  i think it is something to do with  the survival of bloodlines ( because it seems to affect other species as well , not just humans )
> 
> for China   , i suspect  the current breeding generation  are unwilling to work hard enough to support 3 or 4 children  ( and if a 'young prince '  not used  to a multiple child family  scenario )




Rat utopia, give people everything they want and desire and they will become neurotic, narcissistic, obese violent and too lazy to even ****.


----------



## againsthegrain (15 August 2022)

3 hound said:


> Rat utopia, give people everything they want and desire and they will become neurotic, narcissistic, obese violent and too lazy to even ****.



sounds like universe 25


----------



## waterbottle (15 August 2022)

Oil continuing to head down....  Fears of a China recession? More supply? 









						Gulf Of Mexico Pipelines Could Restart Today | OilPrice.com
					

Gulf of Mexico offshore oil producers are working to restart output after damages to a pipeline halted operations at seven platforms, with Reuters reporting that the pipeline could be replaced by the end of today




					oilprice.com


----------



## qldfrog (15 August 2022)

divs4ever said:


> from memory  China had already  starved   .. during the Great Leap forward  ,
> 
> now maybe it is not currently a thing  , but when i grew  up a Chinese male ( ethnic Chinese  even though born in Australia/NZ or wherever ) he was matched up with a wife from China (mainly the mainland but sometimes from Taiwan )
> 
> ...



True i did not mention the fact that these single kids generation create an ******** Generation , which is not good news for international relations as these pricks will support ultra nationalism and China first even more blindly....


----------



## qldfrog (15 August 2022)

3 hound said:


> Rat utopia, give people everything they want and desire and they will become neurotic, narcissistic, obese violent and too lazy to even ****.



Ahh the Reset dream...😂


----------



## divs4ever (15 August 2022)

3 hound said:


> Rat utopia, give people everything they want and desire and they will become neurotic, narcissistic, obese violent and too lazy to even ****.



 it is a noted biological phenomenon ( in animals ) that  stress ( especially  life-threatening ones ) increases sexual urges 

  but the violence level  doesn't change  only the focus ( protecting what they have  , if not fighting for survival )


----------



## divs4ever (15 August 2022)

qldfrog said:


> Ahh the Reset dream...😂



 no just a tool to help achieve the dream  ( they want it all , and unwilling to share )

the treachery you will see when their plan comes together  , remember the Soviet  phrase 'useful idiots '  ( most of the slaves can be replaced by automation )


----------



## waterbottle (16 August 2022)

US retailers to report this week. Will be interesting to see what their guidance will be given the discount on crude


----------



## qldfrog (16 August 2022)

waterbottle said:


> US retailers to report this week. Will be interesting to see what their guidance will be given the discount on crude



POO might play yoyo but we have a fundamental lack of oil investment in the West, closure of refineries yet ever increasing world need and in my opinion a trend toward higher price for oil overall
Remember that Wunderbar liquid is still cheaper than a liter of milk or a bottle of mineral water.
There is plenty of room for POO to become a structural inflation support in the coming decades irrespective of currency play ,rates etc.
Real PPI is here to stay long term imho.


----------



## frugal.rock (16 August 2022)

"Chinese Property Stocks Skyrocket on More Stimulus Plans"









						Chinese Property Stocks Skyrocket on More Stimulus Plans By Investing.com
					

Chinese Property Stocks Skyrocket on More Stimulus Plans




					au.investing.com


----------



## frugal.rock (17 August 2022)

"Fed Hawkishness is Likely Behind and a Soft Landing is Increasingly Likely - JPM's Kolanovic"









						Fed Hawkishness is Likely Behind and a Soft Landing is Increasingly Likely - JPM's Kolanovic By Investing.com
					

Fed Hawkishness is Likely Behind and a Soft Landing is Increasingly Likely - JPM's Kolanovic




					au.investing.com


----------



## frugal.rock (17 August 2022)

waterbottle said:


> BBBY up 30%....
> 
> This is like Jan 2021 all over again with GME



Dip me in tar and drop me in feather's...


----------



## frugal.rock (17 August 2022)

Now that is just ludicrous @waterbottle 
I note some entity downgraded it today or yesty...
5 minute bars


----------



## Smurf1976 (17 August 2022)

More supply side issues:



> Sichuan, one of China's largest provinces with 84 million people, told 19 out of 21 cities in the region to suspend production at all factories from Monday to Saturday




And it's for the same reason as many others:



> The province's top officials warned Monday that Sichuan is currently facing the "most severe and extreme moment" in power supply, according to government-run Sichuan Daily.












						China's worst heatwave in 60 years is forcing factories to close
					

China's Sichuan province has ordered all factories to shut down for six days to ease a power shortage in the region as a scorching heat wave sweeps across the country.




					edition.cnn.com
				




I'll simply add that through much of the world energy infrastructure is barely adequate and we can expect this to be a recurring theme going forward.


----------



## over9k (17 August 2022)

"Southern Sweden is particularly vulnerable to low wind levels after several nuclear reactors were shut over the past few years".






"Soaring energy costs throughout Europe are raising risks of gas rationing and blackouts in the winter when demand peaks".


Just think how well the U.S energy companies are going to do when the new facilities are completed and they can actually start delivering to europe


----------



## qldfrog (17 August 2022)

For Australian inflation figures:
Might be of interest to many








						Australia has released a monthly CPI indicator. Its not pretty. | Forexlive
					






					www.forexlive.com


----------



## over9k (17 August 2022)

Europe's winter (and the whole economy tbh) is looking increasingly bleak. 

Still holding BOIL.


----------



## over9k (17 August 2022)

Here's an absolutely beautiful screencap, a perfect summary of the state of the oil market currently: 




The entire supply side is stacked in america's favour with the demand side having nowhere to go but up (eventually, after china gives up on their lockdowns or whatever they end up doing). 

This is why I'm so bullish on U.S energy companies going forward.


----------



## moXJO (17 August 2022)

frugal.rock said:


> Now that is just ludicrous @waterbottle
> I note some entity downgraded it today or yesty...
> 5 minute bars
> 
> ...



Wallstreet bets are pumping it.


----------



## waterbottle (17 August 2022)

moXJO said:


> Wallstreet bets are pumping it.



LMAO


----------



## waterbottle (17 August 2022)

UK annual inflation up at 10.1%.,  mom at 0.6%


----------



## wayneL (17 August 2022)

waterbottle said:


> UK annual inflation up at 10.1%.,  mom at 0.6%



Foooookin' 'ell

Incoming?


----------



## mullokintyre (17 August 2022)

NZ CB raised interest rates by another 50 basis points  to 3%, with indications they expect to get to 4% before resting.
NZ leading the way.
Mick


----------



## over9k (17 August 2022)




----------



## waterbottle (17 August 2022)

wayneL said:


> Foooookin' 'ell
> 
> Incoming?




Not sure tbh. 

Buying the dips has been a sound strategy since mid July. Spec stonks have had a bit of a pull-back. Gas now at,  or past, recent highs. Having said that, there are some more earnings due + crypto is holding...


----------



## over9k (17 August 2022)




----------



## divs4ever (17 August 2022)

qldfrog said:


> For Australian inflation figures:
> Might be of interest to many
> 
> 
> ...



 that depends on what YOU call pretty  , a few years back i was shamelessly buying BPT , BHP , WHC , and NHC   currently my red face  is balanced out by nice patches of green in my portfolio


----------



## divs4ever (17 August 2022)

over9k said:


> View attachment 145585



 yes i suspected as much , as disruptions elsewhere  has locked in the issue 

 all self-inflicted  remember this was NOT a string of unfortunate coincidences ( or Big Bad Putin ) 

 it OPEC takes a firm grip of the short and curlies .. so be it


----------



## waterbottle (18 August 2022)

Germany Will Have Less Than 3 Months Of Gas If Russia Halts Supply | OilPrice.com
					

Despite faster storage builds than usual, Germany will only have enough natural gas to cover two and a half months of consumption this winter if Russia completely suspends deliveries




					oilprice.com


----------



## JohnDe (18 August 2022)

waterbottle said:


> Germany Will Have Less Than 3 Months Of Gas If Russia Halts Supply | OilPrice.com
> 
> 
> Despite faster storage builds than usual, Germany will only have enough natural gas to cover two and a half months of consumption this winter if Russia completely suspends deliveries
> ...






_"The good news is the country’s challenges are manageable. Take energy. When Mr Putin invaded, Germany relied on Russia for 55% of its gas. Doomsayers warned that supplies would be choked off, German factories would close and families would shiver in their kitchens. In fact, even as Russia’s share of the German gas market has halved, stores of gas for winter are building at a normal pace. Industry says it can cut back use more than expected. Faced with higher prices and conservation campaigns, households will do the same. Germany is restarting mothballed coal-fired power plants. It will invest in renewables. It should (and probably will) extend the life of three nuclear plants that had been rashly scheduled to close. It should also lift a ban on fracking that has put its hefty reserves of shale gas out of reach."_



> *Thanks to Vladimir Putin, Germany has woken up*
> _Less starry-eyed policies on security and energy should help it lead Europe_
> 
> To borrow a phrase from the late Emperor Hirohito, the war in Ukraine has developed not necessarily to Vladimir Putin’s advantage. It has sent Finland and Sweden bolting for the cover of nato membership. It has deepened Ukrainian nationalism, strengthened the democratic alternative Ukraine offers to Mr Putin’s own tyranny, and led customers for Russia’s energy to look elsewhere. It has also prodded a sleepy giant, Germany, rousing a country that has been both Russia’s best partner and its worst enemy. Mr Putin’s warmongering may prove to be the catalyst that turns Germany into his own nightmare: a stronger, bolder, more determined leader of a more united Europe.
> ...



​


----------



## divs4ever (18 August 2022)

waterbottle said:


> Germany Will Have Less Than 3 Months Of Gas If Russia Halts Supply | OilPrice.com
> 
> 
> Despite faster storage builds than usual, Germany will only have enough natural gas to cover two and a half months of consumption this winter if Russia completely suspends deliveries
> ...



it won't be Russia that stops the gas  , it will either be German non-payment or Ukraine  trying to use extortion 

 ( there is an uncertified Nordstream II  waiting for official clearance )

 besides i bet Putin  just loves watching these Greens squirm


----------



## waterbottle (19 August 2022)

PBOC cut rates, and now the Turks have too -  by 100bps.

Not sure if these are outliers or the start of some other global trend.

Meanwhile, 2x fed speeches overnight indicating that IRs likely to continue upwards. Bullard leaning towards 75bps in September. CME fed watch tool puts this at 40% chance.


----------



## waterbottle (19 August 2022)

Big movements in crypto, ETH down 7%, BTC down 6%. Nasdaq futures down 0.9%

Turning point?


----------



## over9k (19 August 2022)

waterbottle said:


> Big movements in crypto, ETH down 7%, BTC down 6%. Nasdaq futures down 0.9%
> 
> Turning point?



Certainly risk-off day. Also friday though, there's no way the jitters have gone enough to not see a friday selloff. 

Good cash deployment day IMHO, just like on the 9th where all the chip manufacturers nosedived:


----------



## bluekelah (19 August 2022)

over9k said:


> Certainly risk-off day. Also friday though, there's no way the jitters have gone enough to not see a friday selloff.
> 
> Good cash deployment day IMHO, just like on the 9th where all the chip manufacturers nosedived:
> 
> View attachment 145674



Jackson hole is next week, apparently FED might stick to another 0.75% rate rise to be on  the safe side. Powell has recently said he doesnt want to be the next arthur burns and is likely going to raise rates ala paul volcker style as he has mentioned that he knew Volcker and praised volcker for what he did raising rates to 20% and smashing inflation. 

With the elections coming soon and democrats highly likely to lose, powell who has been reelected for second term till 2026, will be able to do whatever he deems fit without too much pressure from washington. And i am pretty sure he will keep raising rates to fight inflation just so he gets back his credibility after losing it on "transitory inflation"(but then again back in 2021 he wasnt confirmed for his second term yet)

Hence I believe FED will raise rates till the election period despite US economy tanking and will not pivot until maybe a recession is confirmed in october numbers. Together with increasing paring down of fed balance sheets, Thats when we may see the big crash in markets globally as liquidity tightens and everyone panics. The inflation print will likely still be 6-7% vs fed rates of ~3% in USA and globally we all know the "real inflation" is probably from 15-20%


----------



## over9k (19 August 2022)

bluekelah said:


> Jackson hole is next week, apparently FED might stick to another 0.75% rate rise to be on  the safe side. Powell has recently said he doesnt want to be the next arthur burns and is likely going to raise rates ala paul volcker style as he has mentioned that he knew Volcker and praised volcker for what he did raising rates to 20% and smashing inflation.
> 
> With the elections coming soon and democrats highly likely to lose, powell who has been reelected for second term till 2026, will be able to do whatever he deems fit without too much pressure from washington. And i am pretty sure he will keep raising rates to fight inflation just so he gets back his credibility after losing it on "transitory inflation"(but then again back in 2021 he wasnt confirmed for his second term yet)
> 
> Hence I believe FED will raise rates till the election period despite US economy tanking and will not pivot until maybe a recession is confirmed in october numbers. Together with increasing paring down of fed balance sheets, Thats when we may see the big crash in markets globally as liquidity tightens and everyone panics. The inflation print will likely still be 6-7% vs fed rates of ~3% in USA and globally we all know the "real inflation" is probably from 15-20%



Sounds logical. The minutes suggest conflicting messages. That might be precisely why markets are risk-off today: Uncertainty from the fed. 

If I was trading fixed income I'd be betting on 75 points too.


----------



## over9k (19 August 2022)

Also worth noting how the USD just keeps pulling too, giving the yanks cheaper oil but everyone else more expensive 




Hasn't been a good week.


----------



## waterbottle (19 August 2022)

over9k said:


> Also worth noting how the USD just keeps pulling too, giving the yanks cheaper oil but everyone else more expensive
> 
> View attachment 145681
> 
> ...



The house always wins


----------



## waterbottle (19 August 2022)

Meanwhile, spare a thought for the BBBY bulls...









						Ryan Cohen sells entire stake in Bed Bath & Beyond
					

GameStop chairman Ryan Cohen revealed in an SEC filing on Thursday he has sold the entirety of his position in retailer Bed Bath & Beyond.




					finance.yahoo.com


----------



## waterbottle (19 August 2022)

BTC & ETH approaching 10% drops....

Total crypto market cap is is dipping close to $1T.


----------



## over9k (20 August 2022)

Meanwhile, NRGU, BOIL and GUSH ended in the green


----------



## waterbottle (22 August 2022)

Interesting note from the Fed. They think that the markets have not priced in a recession based on dividend analysis. 





__





						Are Stocks Pricing in Recession Risks? Evidence from Dividend Futures
					

The Federal Reserve Board of Governors in Washington DC.



					www.federalreserve.gov


----------



## over9k (22 August 2022)

It'd be total deja-vu of the 70's if not for the fact that the unions have been so busted over the last 40 years.


----------



## waterbottle (22 August 2022)

BTC and ETH now at 1 month lows...  Could be leading the way down


----------



## over9k (22 August 2022)

waterbottle said:


> BTC and ETH now at 1 month lows...  Could be leading the way down



Futures all deep in the red with growth leading the way down too.


----------



## waterbottle (22 August 2022)

over9k said:


> Futures all deep in the red with growth leading the way down too.



Looks like the rally may be over...

Anyone taking a punt on targets?


----------



## over9k (22 August 2022)

Still playing energy, still wouldn't think about any growth play other than semiconductors.


----------



## divs4ever (22 August 2022)

waterbottle said:


> Interesting note from the Fed. They think that the markets have not priced in a recession based on dividend analysis.
> 
> 
> 
> ...



 go we get a definition for 'real GDP growth ' ( despite many similar metrics saying national productivity is  shrinking  , not even just  growing more slowly )

 given the ever changing definitions ( including 'recession' ) how the heck  can you factor in dividend rises or contractions in a predictive manner ( let alone in 'inflation-adjusted terms ' )

 just asking because various Central Banks  have terrible recent record)  , at predicting  inflation ( even when the refine the calculations to attempt to align with the narrative )

  and since inflation  is affected  by Quantitative tightening and easing  ( delivered, as opposed to promised )

 this whole exercise must be a pleasant distraction to their  main focus of bringing in the new climate change agenda  (and Central Bank Digital Currencies )

 personally  i have a hard enough time  trying to predict  their next description on inflation/recession  ( never in my lifetime , to temporary , to transitory , to peaking  , as recent examples )


----------



## divs4ever (22 August 2022)

waterbottle said:


> Looks like the rally may be over...
> 
> Anyone taking a punt on targets?



 some  ( but not me ) were predicting  a downturn in September  , ready for the traditional ' smart money'  to re-enter the markets 

 no targets for me  , but not expecting a major rally either  ( will div. payments be thrown at the market , this time ?? )


----------



## over9k (22 August 2022)

Oooooooh boy.


----------



## waterbottle (22 August 2022)

NDQ closing in on 13000 support. BTC & ETH approaching their near-term supports too. Euro markets dumping thanks to risk of German recession with Gazprom shutting off supply on Aug 31

*








						Gazprom Will Halt Nord Stream Gas Flows On Aug 31 | OilPrice.com
					

Gazprom will stop all gas flows to Europe via the Nord Stream pipeline from August 31 until September 2, Russia's gas giant Gazprom announced on Friday




					oilprice.com
				



*


----------



## over9k (22 August 2022)

waterbottle said:


> NDQ closing in on 13000 support. BTC & ETH approaching their near-term supports too. Euro markets dumping thanks to risk of German recession with Gazprom shutting off supply on Aug 31
> 
> *
> 
> ...



Jackson hole jitters too. Probably a lot of preemptive selling. 

Is it a dip to buy. Hmm.


----------



## waterbottle (22 August 2022)

over9k said:


> Jackson hole jitters too. Probably a lot of preemptive selling.
> 
> Is it a dip to buy. Hmm.




US markets are too hard to predict. They could turn around tonight and continue the rally all because Kanye West decided to come out in support of Russia (fake news btw) 
Having said that, meme stocks are getting slaughtered (BBBY, GME & AMC). Fed has come out multiple times and said they intend to continue tightening, Bullard claiming they'll aim for above 4%. Fed research indicating markets haven't priced in a recession yet.

Too much negative news to ignore atm


----------



## over9k (22 August 2022)

waterbottle said:


> US markets are too hard to predict. They could turn around tonight and continue the rally all because Kanye West decided to come out in support of Russia (fake news btw)
> Having said that, meme stocks are getting slaughtered (BBBY, GME & AMC). Fed has come out multiple times and said they intend to continue tightening, Bullard claiming they'll aim for above 4%. Fed research indicating markets haven't priced in a recession yet.
> 
> Too much negative news to ignore atm



Yeah 50 is the base case for the next meet, it's the runoff that has me worried. The last one caused a slaughter. I suspect everyone else are thinking the same way.


----------



## over9k (22 August 2022)

NRGU up 2% premarket, NDX futures 1.5% into the red. BOIL up 12% premarket, SOXL down 6%.

Excellent night ahead 

There's also this little event to consider:


----------



## over9k (22 August 2022)

*insert internet meme here*


----------



## over9k (23 August 2022)

over9k said:


> Just think how well the U.S energy companies are going to do when the new facilities are completed and they can actually start delivering to europe


----------



## divs4ever (23 August 2022)

over9k said:


> View attachment 145801



 that would depend  on if Europe  also builds the facilities   to accept delivery  ( in the required volumes ) and transport it to regional customers  .. at the current rate of decisions that would be a snowflake's change in an erupting volcano .

 i have heard some interesting estimates .. but THEN we have the saga of the Siemens turbine  to show us the NEW German efficiency ( which is still the manufacturing  heart of the EU )

 my bet is to consider investing in washcloths


----------



## over9k (23 August 2022)

divs4ever said:


> that would depend  on if Europe  also builds the facilities   to accept delivery  ( in the required volumes ) and transport it to regional customers  .. at the current rate of decisions that would be a snowflake's change in an erupting volcano .
> 
> i have heard some interesting estimates .. but THEN we have the saga of the Siemens turbine  to show us the NEW German efficiency ( which is still the manufacturing  heart of the EU )
> 
> my bet is to consider investing in washcloths



They're already under construction.


----------



## divs4ever (23 August 2022)

we will see 

 might be a little difficult with  coal impeded by a lower than normal Rhine  , Russia's reluctance to send gas via an uncertified pipeline  , but maybe the Indian steel industry will get a tail wind


----------



## Smurf1976 (23 August 2022)

divs4ever said:


> that would depend on if Europe also builds the facilities to accept delivery ( in the required volumes ) and transport it to regional customers



They have some and are building more.

The basic problem however is there just isn't an adequate supply of LNG to supply the existing import terminals globally. There's already a shortage - adding more buyers simply makes that even worse.

Hence LNG is now the most expensive fuel around. Coal, fuel oil and even jet fuel are all cheaper on an energy content basis.


----------



## divs4ever (23 August 2022)

Smurf1976 said:


> They have some and are building more.
> 
> The basic problem however is there just isn't an adequate supply of LNG to supply the existing import terminals globally. There's already a shortage - adding more buyers simply makes that even worse.
> 
> Hence LNG is now the most expensive fuel around. Coal, fuel oil and even jet fuel are all cheaper on an energy content basis.



there is a desire to make Hydrogen a big part of the mix   , it seems  that Hydrogen  will not be created/generated inside the EU 

 so there will be similar issues for using that as well   ( shipping and storage )


----------



## qldfrog (23 August 2022)

divs4ever said:


> there is a desire to make Hydrogen a big part of the mix   , it seems  that Hydrogen  will not be created/generated inside the EU
> 
> so there will be similar issues for using that as well   ( shipping and storage )



If we become a giant H2 producers..i know🤣🤣...we might soon be able to do a security operation in PNG , the Salomon islands or Timor..
Ohh sorry already done😊😊😊


----------



## waterbottle (23 August 2022)

Euro PMI data out this afternoon. Likely negative given rising energy costs. Might be enough to push US markets down further.


----------



## qldfrog (23 August 2022)

Remember this next year:








						$1 billion gas project denied express approval process
					

Tanya Plibersek knocks back a request to exempt an energy project in southern Queensland from assessment against environmental laws, saying she is "not satisfied" it is in the national interest.




					www.abc.net.au


----------



## waterbottle (23 August 2022)

Australian & Japanese PMIs released today - both down...


Meanwhile on the IR front, market seems to be moving towards a 75bp hike instead of the original 50bp. Hmmmmmmmm


----------



## JohnDe (23 August 2022)

How will this affect inflation - 



> *Against expectations, global food prices have tumbled*
> 
> Six months after Russian tanks rolled into Ukraine, an inflationary shock is still ripping through boardrooms, finance ministries and households, with European natural-gas prices surging again on August 22nd owing to fears of further disruptions to supply from Russia. But in one crucial area, prices have come back to Earth. The cost of grains, cereals and oils, staples of diets around the world, have returned to levels last seen before the war began.
> 
> ...


----------



## divs4ever (23 August 2022)

qldfrog said:


> Remember this next year:
> 
> 
> 
> ...



 YEP ! 

 and the delay on approvals for Acland 3 at New Hope

 do anyone not how little coal was sold from  New Hope's Queensland mines  ?? ( 14,000 tonnes this quarter but none of it sold )

 i hope they didn't need the royalties to help balance the state budget 

 maybe they are stock-piling the coal ready for Hydrogen production   ( or for the European winter )


----------



## over9k (23 August 2022)

Smurf1976 said:


> They have some and are building more.
> 
> The basic problem however is there just isn't an adequate supply of LNG to supply the existing import terminals globally. There's already a shortage - adding more buyers simply makes that even worse.
> 
> Hence LNG is now the most expensive fuel around. Coal, fuel oil and even jet fuel are all cheaper on an energy content basis.



And even worse than this, gas was already something that you only really used if you had no other choice, so there isn't even really any substitutes.


----------



## over9k (23 August 2022)

Euro's already at parity, pound to follow.


----------



## divs4ever (23 August 2022)

over9k said:


> And even worse than this, gas was already something that you only really used if you had no other choice, so there isn't even really any substitutes.



 if that is the case  ( i have hardly ever used  gas  .. except a water heater at one house )  one must ask the purpose behind the push for increased gas usage   ( even in preference to existing nuclear power plants )

 SXE ( i hold )  had a nice boost  in converting miner power plants to gas


----------



## Smurf1976 (24 August 2022)

divs4ever said:


> if that is the case ( i have hardly ever used gas .. except a water heater at one house ) one must ask the purpose behind the push for increased gas usage ( even in preference to existing nuclear power plants )



There are exceptions but for a generic power generation system:

Cheapest to operate = Renewables including wind, solar, hydro etc. Nuclear.

Next cheapest = Coal.

Most expensive = Gas, Oil.

Hence the normal operating approach is to make full use of renewables and nuclear first and foremost, then coal, and to use gas / oil to do the rest.

Reason for building gas / oil plant in the first place is that it's relatively cheap up front. It thus stacks up well economically for seasonal use, peak demand, backup etc since the cheap construction offsets the higher operating cost when use is intermittent. Plus the politics since gas comes with far less controversy than nuclear power or large on river hydro dams and it's generally seen as preferable to coal too. It's an "easy" option both economically and politically to build a new gas-fired power station.

The practical implication for inflation however is that it's rather hard to replace that gas in the short term. If the problem was a lack of coal, uranium or water (hydro) well then gas-fired plant could be placed into constant operation as a means of saving coal, uranium or water. It doesn't really work in reverse though since gas is already used primarily when other sources can't do the job so whilst not zero, the options to ramp up coal or nuclear in order to use less gas are far more limited than the reverse.

To the extent they exist, the options for using more coal to replace gas commonly involve returning disused 50+ year old facilities to operation and so on. Putting back into use things that are still usable technically but they're old, inefficient and relatively high cost - hence why they were closed in the first place. For example Sweden has 3 oil-fired steam (power generating) units back in operation now that date from 1969, 1971 and 1973 respectively, that's a typical example of the approach. 

Then there's uses other than power generation.

The average household or office has one method of heating, cooking or providing hot water and no short term ability to switch fuels. If they're using gas, electricity, oil or whatever well that's what they're using, they don't have the equipment to just start using something else.

For industry it varies. Plenty of boilers that can switch between oil and gas for example but when it comes to things like fertilizer production, they're set up for gas and nothing else.

So overall demand for gas is somewhat inelastic. It's not zero but the ability to rapidly substitute something else is relatively limited. Not all but a large portion of the consumption occurs in situations where there's no immediate alternative - either direct uses (eg households and industry) or as "last resort" power generation when other sources are already fully utilised (or unavailable due to maintenance etc).

That's a perfect setup for a price shock. A commodity that's used for "essential" purposes where not all but a large portion of the consumption can't rapidly switch to a substitute.


----------



## over9k (24 August 2022)

Smurf1976 said:


> There are exceptions but for a generic power generation system:
> 
> Cheapest to operate = Renewables including wind, solar, hydro etc. Nuclear.
> 
> ...



Here's the graph form of a lot of what smurf said:




I couldn't find a higher res shot but you get the idea - some things can only be done with X, some only with Y, some with both, some with one step for X but two or three steps for Y, so on and so forth.

Remember that using the alternative(s) requires essentially retooling and/or building entire refineries to do things the different way (which might still end up more expensive anyway) so in the meantime, until you've retooled your existing plants and/or built new ones, you have *nothing*.

If you can't get your feed stock/base material you need to build a new refinery and/or retool your entire existing plant to use something different.

Even then, you're now doing things the harder/more expensive way which increases costs of the final product (inflation) and can now also be outcompeted by anyone doing things the previous way the moment they, say, reopen the gas pipelines, which means you're going to have to put tariffs in place to stop your new industry from being bankrupted, which only serves to drive up prices (inflation) further.

In short, you are BONED.


----------



## divs4ever (24 August 2022)

looks like i will have to keep my axe sharp  , some back-up handles ,  and my timber  pre-cut ( and kept  dry  ) ( and  a decent back-up generator  )
 lucky i didn't opt for the concrete jungle 

 is going to be interesting with   the national GDP  once grid power becomes unreliable/mom-existent  ( at the current trend they should hit record levels )


----------



## Smurf1976 (24 August 2022)

divs4ever said:


> is going to be interesting with the national GDP once grid power becomes unreliable/mom-existent ( at the current trend they should hit record levels )



Putting this into perspective, the uses of gas can basically be placed into four categories:

1. Gas sold "as gas" to households and businesses who use it for heating, hot water, cooking etc. The majority have literally zero short term alternative.

2. Gas sold to industrial users engaged in complex processes as per the chart posted by  over9k and who have no short term alternative other than to cease production.

3. Gas used for electricity generation. In some places it forms essentially the entire power supply or at least a major part of it, they don't have hydro or nuclear etc, but in most places it's a supplement to other sources used when needed.

4. Gas used in industry to fire boilers, kilns and so on. Some do have the ability to switch to some other fuel, some don't.

Bearing in mind the subject is inflation not energy per se but I'll post this chart which puts the use of gas for power generation into perspective. It's for the past 7 days in Victoria but the concept is generic to most power systems globally.* Gas shown in orange* and for simplicity I've left interstate power transfers off the chart:





From an inflation perspective the basic problem is that the only time gas is being used, is when other sources are already running to their limit. That's where the "gas is the last resort" bit comes from - it's what runs when everything else is already running and insufficient.

The chart's for Victoria but same basic concept anywhere. Gas (or oil (eg diesel)) plant that's cheap to build (but costly to operate) is filling the gaps whilst other plant generates most of the actual electricity.

In the event Europe actually does run out of gas then they won't be left completely without electricity but it's much like the above chart. There'll be times when it simply doesn't matter at all, because other sources are adequate, but at other times it'll bite hard.

Using 2021 data, gas only accounts for 10.4% of electricity generation in Germany for example. The trouble is, as with that chart for Victoria, there are occasions when it's very much greater than the average and any lack of availability will bite hard both physically (worst case the lights really do go out) and in terms of electricity prices on the wholesale market.

For industry with boilers etc some can just burn something else and carry on. For those that don't have that option however they're in trouble.

For industry with complex processes for which there's no alternative, it's game over if gas supply stops.

Same for households although they'll almost certainly be given first priority access to available supplies by government. Whether they can afford to use it is another question....

So overall it's not an "end of the world" situation, there won't be a complete failure of power supply, but if the EU ran out of gas then there'll certainly be trouble both physically and economically. Seriously high prices to households and industry, both for gas "as gas" and for electricity, are one outcome whilst for some industrial users it would mean ceasing production entirely.

Petrochemicals, fertilizers, plastics etc are we'll see any outright shutdowns in their most severe form. That's simply due to lack of flexibility - they need gas and nothing else will do.


----------



## waterbottle (24 August 2022)

JohnDe said:


> How will this affect inflation -



Neel Kashkari (Fed member)  speaking now. To paraphrase him: the Fed is avoiding food and crude oil prices when trying to determine monetary policy given their inherent volatility


----------



## CityIndex (24 August 2022)

waterbottle said:


> Neel Kashkari (Fed member)  speaking now. To paraphrase him: the Fed is avoiding food and crude oil prices when trying to determine monetary policy given their inherent volatility



This should make Friday's US PCE Core Price Index an important data point to watch, as the print will likely play a significant role in shaping expectations for the September FOMC Meeting, and therefore market direction in the build-up.


----------



## waterbottle (24 August 2022)

CityIndex said:


> This should make Friday's US PCE Core Price Index an important data point to watch, as the print will likely play a significant role in shaping expectations for the September FOMC Meeting, and therefore market direction in the build-up.




True,  although markets now pricing in a 50-50 chance of a 75bp hike.


----------



## CityIndex (24 August 2022)

waterbottle said:


> True,  although markets now pricing in a 50-50 chance of a 75bp hike.



Yup, and it will be interesting to see if that begins to lean more in either direction following the inflation data and Jackson Hole Symposium.


----------



## divs4ever (24 August 2022)

i could be wrong  , but to me  the market seems to be factoring a 1% hike  ( or a pivot that is too late to stop the slide )

 the latest US bill ( the inflation reduction act ) looks like they are going for a tax raid ( since the new agents will be armed and willing to use deadly force )

 looks like a crime spree is going to erupt both sides of the thin blue line


----------



## mullokintyre (25 August 2022)

I doubt that  there was any further  data points needed on the level of inflation, but another one caught my eye this morning.
From Bloombergs 


> The Nice household is one of some 20 million across the country—about 1 in 6 American homes—that have fallen behind on their utility bills. It is, according to the National Energy Assistance Directors Association (Neada), the worst crisis the group has ever documented. Underpinning those numbers is a blistering surge in electricity prices, propelled by the soaring cost of natural gas.



So 15% of  households in the US are falling behind on utility bills.
This figure will likely get worse before it gets better, and the number of disconnections will rise.
Of course, its only the people at the bottom of the food chain who get badly afected by these increases.
from The evil Murdoch Empire


> Across a parched California, residents enduring a punishing drought are doing their bit to conserve water, taking shorter showers and packing their dishwashers efficiently to reduce waste.
> However, some of the state’s wealthier citizens appear to be paying little attention, using vast amounts of water to keep pools filled and lawns green.
> 
> Sylvester Stallone, Kim Kardashian, the comedian Kevin Hart and the basketball star Dwyane Wade are among more than 2,000 customers given notices of exceedance by Las Virgenes Municipal Water District in southern California, according to the Los Angeles Times. They face having flow restrictor devices fitted, which can reduce lawn sprinklers to a trickle.
> ...



Its the same old story of gross hypocrisy. Hardship, sacrifice, changing lifestyles etc etc are not for the rich elites, they have a higher calling.
Mick( wearing his most cynical hat.)


----------



## waterbottle (26 August 2022)

Comments from Fed governer George suggest that IR hikes will continue

From the WSJ:




			WSJ Webview - Jerome Powell’s Dilemma: What if the Drivers of Inflation Are Here to Stay?


----------



## JohnDe (26 August 2022)

A deflationary China is offsetting the rest of the worlds inflation


----------



## rcw1 (26 August 2022)

divs4ever said:


> YEP !
> 
> * and the delay on approvals for Acland 3 at New Hope*
> 
> ...



Good evening,
New Hope gets New Acland Mine Stage 3 mining leases from the Minister for Resources after the Land Court of QLD's recommendation that the leases be granted.

For mine the only remaining primary approval required for New Acland Stage 3 to proceed is an Associated Water Licence by the Department of Regional Development, Manufacturing and Water apparently

Have a very nice evening

Kind regards
rcw1


----------



## divs4ever (26 August 2022)

DON'T hold your breath 

 i might have read earlier releases  wrong but  management seems  to be focusing on NSW assets ( and Bridgeport Energy )  with Acland 3  tagged 'maybe, could be '  after all we had a state election not that long back  so hoping for regime change  is a bit optimistic  ( but they are trying to fast-track any action if Acland3  gets a green light )

 the old laptop (and/or internet ) has been  struggling all day  ( and not just ASF )

 have a great evening yourself 

 cheers


----------



## divs4ever (26 August 2022)

mullokintyre said:


> I doubt that  there was any further  data points needed on the level of inflation, but another one caught my eye this morning.
> From Bloombergs
> 
> So 15% of  households in the US are falling behind on utility bills.
> ...



 buy a twin for that cynical hat , it is likely to need a back-up 

 but yes  interesting  glimpses  of  unpleasant news , even on mainstream , now 

 PS , i am expecting the middle class to come under extra pressure as well  ( usually they try to obliterate the middle class )


----------



## waterbottle (27 August 2022)

JPowell commits to continuous hikes,  possibly into 2023. 

NASDAQ down a huge 4%.....  So much for markets knowing all....


----------



## Knobby22 (27 August 2022)

waterbottle said:


> JPowell commits to continuous hikes,  possibly into 2023.
> 
> NASDAQ down a huge 4%.....  So much for markets knowing all....



Recession inevitable.


----------



## Belli (27 August 2022)

waterbottle said:


> JPowell commits to continuous hikes,  possibly into 2023.
> 
> NASDAQ down a huge 4%.....  So much for markets knowing all....






Knobby22 said:


> Recession inevitable.




On the bright side two companies were in the green!





__





						Nasdaq 100 Index Component Weights - Nasdaq 100 Companies
					





					www.slickcharts.com


----------



## Knobby22 (27 August 2022)

Belli said:


> On the bright side two companies were in the green!
> 
> 
> 
> ...



Electronics Arts! I suppose if you can't get work you will spend more time playing computer games.


----------



## waterbottle (27 August 2022)

Knobby22 said:


> Recession inevitable.



 We knew that back in July....  Ughhhhhhh


----------



## waterbottle (27 August 2022)

The big question I have is whether oil is now going to plummet, as it has during past recessions, particularly if it's the main driver during this period of inflation


----------



## waterbottle (27 August 2022)

I can't edit my previous post, but thought I'd add this graph in showing past falls in WTI crude when recessions occurred. Having said that, this time we have a conflict is disrupting supply (I don't remember Iraq/Afghanistan causing huge disruptions but if any does I'd be interested to hear).


----------



## JohnDe (27 August 2022)

There is always something missed by those that analyse with one eye open  

_"Inflation helped, too. Not only did it boost the price of goods, which increased sales-tax revenues; it also raised salaries, in nominal terms, moving people into higher tax brackets."_​


> *States have historic amounts of leftover cash*
> 
> Aquirky law calls on Massachusetts to send back billions of tax dollars this year. Passed in 1986, it orders the state to refund taxpayers when revenue growth outpaces wage growth. For the first time since 1987 it has been triggered. Massachusetts must return up to $3bn, 7% of tax revenue.
> 
> ...


----------



## over9k (27 August 2022)

waterbottle said:


> The big question I have is whether oil is now going to plummet, as it has during past recessions, particularly if it's the main driver during this period of inflation



It's oil price driving the hikes that'll cause the recession. Also a big curveball of lockdowns lifting in china. 

Oil's price is a supply side restriction so even if/when we see recession it's likely to be the best of a bad bunch.


----------



## over9k (27 August 2022)

In the meantime, the big dips in growth plays continue to be excellent buy opportunities. SOXL up ~11% yesterday and then down ~17% today.


----------



## over9k (27 August 2022)

And nrgu up 14% on the week or 23% if you'd bought the dip on monday:




These plays obviously start to multiply if you nuke your tech/growth plays and buy energy and vice-versa on the days when they move in opposite directions


----------



## divs4ever (27 August 2022)

Knobby22 said:


> Recession inevitable.



 RUBBISH !!

 they will just change the definition again  , tweak the way CPI and GDP are calculated  ( AGAIN )  etc etc  

 at least China is crystal  clear they TELL the nation what it is going to be  and eliminate  enough people ( and public servants ) until the prediction is correct 

 truth be told we have been in  a recession for months maybe even years 

 even the oil price is now an unreliable guide as  up to a third of global oil is trading outside the US Dollar ( so difficult to track )


----------



## Smurf1976 (27 August 2022)

waterbottle said:


> JPowell commits to continuous hikes,  possibly into 2023.
> 
> NASDAQ down a huge 4%.....  So much for markets knowing all....



My opinion is this is the closest we’ll ever see to the Fed announcing that they’re going to blow up the stock market and real economy.

It’s as blunt as they’re ever likely to be and just before a period that’s often weak seasonally.


----------



## over9k (29 August 2022)

over9k said:


> Biggest curveball still remains the U.S president curtailing some or all of yank oil exports.






Uh-oh.


----------



## over9k (30 August 2022)

All futures currently in the green.


----------



## waterbottle (30 August 2022)

over9k said:


> View attachment 146124
> 
> 
> All futures currently in the green.




Makes perfect sense. Crypto currently retracing fast, seems to be heading back to last week's prices.


----------



## frugal.rock (30 August 2022)

over9k said:


> All futures currently in the green.





waterbottle said:


> Makes perfect sense.



Yes, indeed.
Business as usual.


----------



## waterbottle (30 August 2022)

France accuses Russia over gas supply as Nord Stream shutdown looms
					

France accused Moscow on Tuesday of using energy supplies as "a weapon of war" after Russia's Gazprom cut deliveries to a major French customer and said it would shut its main gas pipeline to Germany for three days this week.




					www.reuters.com


----------



## frugal.rock (30 August 2022)

"BofA’s data shows clients were selling stocks across 7 out of 11 sectors, with the biggest outflows recorded in Industrials and Energy. For the former, this was the biggest weekly outflow since November 2020.

On the other hand, the tech sector saw big inflows last week (the third largest since 2008), while clients were also buying Health Care, Utilities, and Materials stocks."









						Flows are Shifting More Defensive After Jackson Hole, BofA Warns By Investing.com
					

Flows are Shifting More Defensive After Jackson Hole, BofA Warns




					au.investing.com
				




Note SOXL pre market.


----------



## over9k (30 August 2022)

Yeah I sold a little bit of NRGU at 551 yesterday as despite my previous joke post I am actually buying another car:





But I'm still holding ~90% of my original position.


----------



## qldfrog (30 August 2022)

frugal.rock said:


> "BofA’s data shows clients were selling stocks across 7 out of 11 sectors, with the biggest outflows recorded in Industrials and Energy. For the former, this was the biggest weekly outflow since November 2020.
> 
> On the other hand, the tech sector saw big inflows last week (the third largest since 2008), while clients were also buying Health Care, Utilities, and Materials stocks."
> 
> ...



But the chart still not inspiring confidence, don't you think?


----------



## over9k (31 August 2022)

Oooooh yeah, deploying that cash boys


----------



## waterbottle (31 August 2022)

over9k said:


> Oooooh yeah, deploying that cash boys




On what BBBY?


----------



## divs4ever (31 August 2022)

waterbottle said:


> France accuses Russia over gas supply as Nord Stream shutdown looms
> 
> 
> France accused Moscow on Tuesday of using energy supplies as "a weapon of war" after Russia's Gazprom cut deliveries to a major French customer and said it would shut its main gas pipeline to Germany for three days this week.
> ...



 and Russia would point out France ( and the EU  ) use both sanctions  and currency exchanges as weapons 

 wait and see if Russia starts limiting uranium exports  ( to ' unfriendly nations ' )


----------



## divs4ever (31 August 2022)

Gazprom says it will halt gas supplies to France's Engie, cites lack of payment









						Gazprom says it will halt gas supplies to France's Engie, cites lack of payment By Reuters
					

Gazprom says it will halt gas supplies to France's Engie, cites lack of payment




					www.investing.com
				




 no freebies to hostile nations ... who would have thought


----------



## waterbottle (31 August 2022)

Euro inflation now at 9.1%. Above expectations. 
Gas up 10% courtesy of the shut off. 
POO dropping below $90/bl.


----------



## over9k (1 September 2022)

They're beginning to understand...

Also, policy intervention = get it from the americans. 

Oh, and the stores aren't even close to what they need, just in case that wasn't obvious.


----------



## Smurf1976 (1 September 2022)

over9k said:


> Oh, and the stores aren't even close to what they need, just in case that wasn't obvious.



Anyone looking only at the volume in storage and comparing that to previous years will be missing the point that required withdrawal from storage this winter will be far greater due to the lack of incoming gas.

So even if storage were exactly the same as last year, there'd still be a problem due to that lack of incoming gas.


----------



## over9k (1 September 2022)

Smurf1976 said:


> Anyone looking only at the volume in storage and comparing that to previous years will be missing the point that required withdrawal from storage this winter will be far greater due to the lack of incoming gas.
> 
> So even if storage were exactly the same as last year, there'd still be a problem due to that lack of incoming gas.



Still holding BOIL


----------



## over9k (1 September 2022)

waterbottle said:


> On what BBBY?



Panic selling:


----------



## over9k (1 September 2022)

Looking like another cash deployment tonight lads


----------



## over9k (1 September 2022)




----------



## over9k (2 September 2022)

over9k said:


> View attachment 145847
> 
> 
> Euro's already at parity, pound to follow.






I should do this for a living or something.


----------



## divs4ever (2 September 2022)

UK bashing ??   it is self-mutilating  , everybody else is simply sprinkling on some ridicule


----------



## over9k (2 September 2022)

Excellent sign. We might have hit a bottom. Cash was deployed today


----------



## over9k (2 September 2022)

So the week's been a slaughter but some cheeky buys have paid 10%+ each day:




I suspect we'll see a lot more green when the china lockdowns get lifted, but there's still plenty of stormy seas ahead.


----------



## waterbottle (2 September 2022)

over9k said:


> View attachment 146275
> 
> 
> Excellent sign. We might have hit a bottom. Cash was deployed today




Dunno, might just be a silly bounce off of the 12000 line for NASDAQ. 
We still have an incoming Fed meeting + QT has only just been accelerated.


----------



## qldfrog (2 September 2022)

Oil and gas war going on:.








						Chairman of Russian energy company Lukoil found dead  after - PanaTimes
					

Ravil Maganov, chairman of Russia's second-largest oil producer Lukoil, died on Thursday after




					panatimes.com
				



Western secret services..noooo, we would not do that..or Putin ensuring compliance?
Got the feeling the board of Russian energy companirs must know the answer...
Unless the guy fell from the window while having a smoke.😂
So were these accident casualties Putin supporters or not, that could decide on gas availability in the EU..and affect inflation quite directly


----------



## over9k (2 September 2022)

Stacks of green aftermarket too. Good sign. Looks like I might end the week flat.


----------



## moXJO (2 September 2022)

Wrong thread


----------



## qldfrog (2 September 2022)

moXJO said:


> Wrong thread



True but could not get any result from my search on energy price, as this is what this is: energy pressure game
  was very early and in a rush..apologies


----------



## moXJO (2 September 2022)

moXJO said:


> Wrong thread






qldfrog said:


> True but could not get any result from my search on energy price, as this is what this is: energy pressure game
> was very early and in a rush..apologies



Oops that read wrong. I typed something into the inflation thread instead of the street thread. 
I had to delete the post and wrote "wrong thread" in haste.


----------



## qldfrog (2 September 2022)

moXJO said:


> Oops that read wrong. I typed something into the inflation thread instead of the street thread.
> I had to delete the post and wrote "wrong thread" in haste.



my own post on the behind the scene energy war by various secret services was not rightly located here either...


----------



## divs4ever (2 September 2022)

qldfrog said:


> Oil and gas war going on:.
> 
> 
> 
> ...



 in some of the hospitals i have been in  ( in Queensland ) that would have been Matron  kicking your butt   over smoking 

 was that the same guy  the US just seized a jet from ??


----------



## frugal.rock (2 September 2022)

US Labour Day holiday Monday.
September 5th. 
Has markets closed.
Punters back on Tuesday buying up.


----------



## qldfrog (2 September 2022)

divs4ever said:


> was that the same guy  the US just seized a jet from ??



I do not understand, are not all Russians bad, evil and commies?


----------



## over9k (2 September 2022)

Futures, energy in particular, now on a tear


----------



## frugal.rock (2 September 2022)

Who cares if it's down, it beat the forecast... 🤪🤯🥳


----------



## over9k (2 September 2022)

frugal.rock said:


> Who cares if it's down, it beat the forecast... 🤪🤯🥳
> 
> View attachment 146329



That's all trading is - expectation vs reality.


----------



## frugal.rock (2 September 2022)

over9k said:


> That's all trading is - expectation vs reality.



Then I've been conned.😅

I always though it was supply and demand, then fear and greed. 

Personally, I don't think there's much reality in trading... 🤪🤨


----------



## divs4ever (2 September 2022)

qldfrog said:


> I do not understand, are not all Russians bad, evil and commies?



ACTUALLY the Russians gave up Communism in the 1990's

 and the collapse of the Soviet Union  looked so exciting  many  other G7 nations  are rushing  to experience the ride for themselves 

 Germany for example is happily embracing a leftist/globalist agenda  as is Macron , Biden  , whoever is in charge of the UK ( despite pretending to be Tory  , the poor labor party  can't find a differing party policy  to stand up )

 i like Putin  he is funny  , he tells the West exactly the traps they will walk into  , and they do so without a second thought  , maybe he has them hypnotized   , 

 maybe Putin  should label  them Putin's Adventure Excursions  and charge them for the experience  ( now THAT would make him a true evil genius )


----------



## frugal.rock (2 September 2022)

over9k said:


> Futures, energy in particular, now on a tear



Hopefully the holiday plays into our hands well for next week. 
Things need to close up today though.... 😬


----------



## frugal.rock (2 September 2022)

Off and racing, alerts gone off for SOXL and NRGU up over 5% on open.


----------



## over9k (2 September 2022)

frugal.rock said:


> Off and racing, alerts gone off for SOXL and NRGU up over 5% on open.



Still holding everything


----------



## qldfrog (3 September 2022)

Oil not so good at the moment but i am a bull myself .overall market down after initial jump up.might catch up before close but i do not expect much gain if any...and not much indication on monday for the ASX


----------



## waterbottle (3 September 2022)

Big reversal boys....


----------



## over9k (3 September 2022)

waterbottle said:


> Big reversal boys....



Screaming night for energy, everything else slaughtered


----------



## waterbottle (3 September 2022)

Oil has now been consistently under $100/bl or the past few weeks. 
Should mean a lower CPI print come September 13.
US jobs growth has also slowed. 
Fed watch tool now points to a smaller chance of a 75bps hike come Sept 21.

Might see the end of this down leg soon and another bear rally?


----------



## qldfrog (3 September 2022)

waterbottle said:


> Oil has now been consistently under $100/bl or the past few weeks.
> Should mean a lower CPI print come September 13.
> US jobs growth has also slowed.
> Fed watch tool now points to a smaller chance of a 75bps hike come Sept 21.
> ...



75bps will not change and is a given in my opinion


----------



## bluekelah (3 September 2022)

waterbottle said:


> Oil has now been consistently under $100/bl or the past few weeks.
> Should mean a lower CPI print come September 13.
> US jobs growth has also slowed.
> Fed watch tool now points to a smaller chance of a 75bps hike come Sept 21.
> ...



Powell said at Jackson hole to expect een higher rate hikes. FED might go 1%. Especially if the next inflation print stays above 8%
Oil has been kept artificially low by US releasing their oil reserves, the moment something goes wrong in middle east its gonna spike.

OpEC meets on monday, althought they said they wont cut output but they may end up deciding to cut output to pump up prices above $100 again, as they have started being suspicious about comex futures prices, claiming price manipulation.

3rd quarter GDP figures will only come end OCtober, another 2 months to go before FED admits a recession is in the works (not a slowdown lol) and then may/may not hint at a pivot. Any bear market rally will make FED more Hawkish.

QT though, only really started in July and on track to ramp up to 95billion a month in September, that will have a bigger immediate direct impact on financial asset prices IMHO, much more than rate rises which usually have a lag period of effect of maybe 6-12months.


----------



## JohnDe (3 September 2022)

Worse than 1970's inflation?


----------



## waterbottle (3 September 2022)

bluekelah said:


> Powell said at Jackson hole to expect een higher rate hikes. FED might go 1%. Especially if the next inflation print stays above 8%
> Oil has been kept artificially low by US releasing their oil reserves, the moment something goes wrong in middle east its gonna spike.
> 
> OpEC meets on monday, althought they said they wont cut output but they may end up deciding to cut output to pump up prices above $100 again, as they have started being suspicious about comex futures prices, claiming price manipulation.
> ...



All very true and I agree with you, although these facts were known in July when we had a massive 20%+ rally. 
Unlikely for the markets to head straight down. More likely for them to have rallies along the way. The question is what will kick off the rallies. From what we've seen so far, it just takes a small amount of positive news


----------



## JohnDe (3 September 2022)

"..._the Bears think that we're going back to a 70's style inflation._.."


----------



## divs4ever (3 September 2022)

bluekelah said:


> Powell said at Jackson hole to expect een higher rate hikes. FED might go 1%. Especially if the next inflation print stays above 8%
> Oil has been kept artificially low by US releasing their oil reserves, the moment something goes wrong in middle east its gonna spike.
> 
> OpEC meets on monday, althought they said they wont cut output but they may end up deciding to cut output to pump up prices above $100 again, as they have started being suspicious about comex futures prices, claiming price manipulation.
> ...



 one percent ( rise ) only months away from the mid-term elections  , i am not so sure  ( i am NOT saying impossible though )

 i would go for 0.75%  , with a tiny chance of 0.5% ( which in my opinion would be politically motivated )

 let's see if they  start with meaningful QT (  not just let existing holdings mature )

 i totally lost trust  ( i haven't had much for a decade ) when they 'redefined ' recession  after so many years of fudging the figures  ( it is a total mess when you fudge the figures and still have to change the definitions)

 oil is likely go the same way   a total disconnect to commodity market prices ( because a huge amount of oil is no longer traded  in US dollars )

 i would expect OPEC to trim oil production ( not much maybe 1 or 2 percent lift-off ) ,  many have been maxxed out for a while and i suspect maintenance and repairs  are needed ( not just Russia and Norway ) , besides  oil prices are liable to be healthy all the northern winter  ( and costs are rising as well )


----------



## divs4ever (3 September 2022)

JohnDe said:


> "..._the Bears think that we're going back to a 70's style inflation._.."




 not this bear !!  i HOPE it is  a 1970's style inflation ( l navigated that one  )

 i suspect it could be much worse


----------



## bluekelah (3 September 2022)

divs4ever said:


> not this bear !!  i HOPE it is  a 1970's style inflation ( l navigated that one  )
> 
> i suspect it could be much worse



Haha just had to buy gold you would have been fine in the 1990s. gold did like a 10x or something that decade. 

For Fed rate predictions, Powell did say this in his speech at JH.
"Another unusually large increase could be appropriate at our next meeting," Powell said. "Our decision at the September meeting will depend on the totality of the incoming data and the evolving outlook."
So I believe " unusually large" points to maybe 1%. BUT will be data dependent once again and 3rd Q recession may give them excuse to pivot. 

At any rate, I think the FED has no credibility left, especially after their transitory inflation nonsense. And its probably no use to read to much into Powells ramblings/speeches.

Actions always speak louder and at this stage I only see rate rises/ start of QT proper/global recession, market may be forward looking but i dont think it has priced in the pain yet to come.


----------



## divs4ever (4 September 2022)

maybe they consider the remaining Democrat voters ( those who haven't fled the country  )  hooked  by the Government funding 









						Munchausen Syndrome by Proxy
					

WebMD explains the symptoms and causes of Munchausen syndrome by proxy, where someone exaggerates a child's symptoms or even causes the child's illness.




					www.webmd.com
				




 anyone who believes Powell does so at their own financial risk


----------



## waterbottle (5 September 2022)

Gazprom now shutting off supply indefinitely to EU.
DAX down 3%, other EU majors down 2%.


----------



## over9k (5 September 2022)

waterbottle said:


> Gazprom now shutting off supply indefinitely to EU.
> DAX down 3%, other EU majors down 2%.



Euro currencies plummeting too


----------



## over9k (5 September 2022)




----------



## over9k (6 September 2022)

Brent now up 4%, gas up 13%, still climbing. Going to be a ripper of a day tomorrow.


----------



## over9k (6 September 2022)

bluekelah said:


> Powell said at Jackson hole to expect een higher rate hikes. FED might go 1%. Especially if the next inflation print stays above 8%
> Oil has been kept artificially low by US releasing their oil reserves, the moment something goes wrong in middle east its gonna spike.
> 
> OpEC meets on monday, althought they said they wont cut output but they may end up deciding to cut output to pump up prices above $100 again, as they have started being suspicious about comex futures prices, claiming price manipulation.
> ...



100k/day drop announced. SFA.


----------



## over9k (6 September 2022)

In case anyone's wondering, they do *not* have enough to get themselves through the winter. They're building storage and delivery sites (to get it from the americans) like mad but this all takes time. The last numbers I saw were that alternative sources/delivery methods can currently supply only about 15% of what they actually need. 

In the meantime, there's going to be rationing or similiar.


----------



## Smurf1976 (6 September 2022)

over9k said:


> In case anyone's wondering, they do *not* have enough to get themselves through the winter.



Yep, this is the point where ~40 years' worth of warnings all come to a head.

There's not enough ability to accept LNG deliveries, turn it back into gas and inject that into the network.

Even if there were enough LNG terminals, there aren't enough ships to deliver the LNG.

And even if there were enough terminals and ships, there's not enough LNG production capacity, globally, to supply them. Hence the price of LNG is sky high even with Europe's limited ability to physically import the stuff.

No quick fix there.


----------



## qldfrog (6 September 2022)

over9k said:


> View attachment 146393
> 
> 
> In case anyone's wondering, they do *not* have enough to get themselves through the winter. They're building storage and delivery sites (to get it from the americans) like mad but this all takes time. The last numbers I saw were that alternative sources/delivery methods can currently supply only about 15% of what they actually need.
> ...



Last news France going to send gas to Germany and trade it against German coal station electricity.
Macron is also cranky with EDF (power generator newly nationalised ...) With the head of EDF blaming the nuclear power shortage on Macron 
Needless to say there are plenty of available speeches of Macron recently stating that EDF should prepare to close dozen of nuclear plants as France was moving out of nuclear.
Which EDF acted on..until Ukraine....
Obviously preparing ro close a station is not small feat and all maintenance was stopped causing the current nightmare there.
Now energy bills are x6 for some French businesses and public heated swimming pools are closing right and left...the start.
I somehow do not see inflation easing in the EU zone...


----------



## over9k (6 September 2022)

Smurf1976 said:


> Yep, this is the point where ~40 years' worth of warnings all come to a head.
> 
> There's not enough ability to accept LNG deliveries, turn it back into gas and inject that into the network.
> 
> ...



Yeah, my question is what they're actually going to do in response. Rolling blackouts/shut industry down? Gas rationing? Fertiliser rationing? Food rationing?

I don't think they even know this yet, i.e they're still trying to figure it out themselves.


----------



## moXJO (6 September 2022)

qldfrog said:


> Last news France going to send gas to Germany and trade it against German coal station electricity.
> Macron is also cranky with EDF (power generator newly nationalised ...) With the head of EDF blaming the nuclear power shortage on Macron
> Needless to say there are plenty of available speeches of Macron recently stating that EDF should prepare to close dozen of nuclear plants as France was moving out of nuclear.
> Which EDF acted on..until Ukraine....
> ...



Let's be real, those idiots deserve it. They were warned repeatedly. Hopefully the rest of the world wakes up to proper energy management. Not popular trends.


----------



## over9k (6 September 2022)

moXJO said:


> Let's be real, those idiots deserve it. They were warned repeatedly. Hopefully the rest of the world wakes up to proper energy management. Not popular trends.



Have you ever met a leftist?


----------



## moXJO (6 September 2022)

over9k said:


> Have you ever met a leftist?



I think when Trump warned them, they truly dug in their heels. It's funny how Europe was constantly touted as this leading green energy adopter and then BLACK SWANNED B1TCHES.

It wasn't even a black Swan. There's been a war in Ukraine for years.


----------



## divs4ever (7 September 2022)

moXJO said:


> Let's be real, those idiots deserve it. They were warned repeatedly. Hopefully the rest of the world wakes up to proper energy management. Not popular trends.



 sadly , i totally and absolutely  agree 

 i could see what the EU was becoming   when  URW  took over the international part of Westfield  so decided NOT to buy into URW  ( had Europe not been going to hell  in a hand-basket  , URW would have been a nice solution to international property exposure for me  )


----------



## divs4ever (7 September 2022)

moXJO said:


> I think when Trump warned them, they truly dug in their heels. It's funny how Europe was constantly touted as this leading green energy adopter and then BLACK SWANNED B1TCHES.
> 
> It wasn't even a black Swan. There's been a war in Ukraine for years.



 ARGUABLY , Russia could have come in anytime after the 2014 Minsk Accord  and called it a peace-keeping effort  sure  they  might have had to keep the front line jet-fighters at home  , BUT the signed agreement with France and Germany ( and no effort from NATO members to suppress Ukraine , gave Russia all ammunition it needed to ask for full UN  backing for the peace-keeping play )

 the BLACK SWAN will be when they realize cheap Russian energy is NOT coming back ( not gas , not oil , not coal , and not uranium  , don't be shocked if Russia demands payment in gold   delivered to Moscow, not that digital crap )


----------



## over9k (7 September 2022)

Lots of this now - demand side plummeted on account of energy bills, production of XYZ so much more expensive because of energy bills, factory gets mothballed. 

Obviously has a knock-on/circular flow effect. Defensives are still the play.


----------



## over9k (7 September 2022)

moXJO said:


> I think when Trump warned them, they truly dug in their heels. It's funny how Europe was constantly touted as this leading green energy adopter and then BLACK SWANNED B1TCHES.
> 
> It wasn't even a black Swan. There's been a war in Ukraine for years.



Ignore the war entirely - you want putin et al to control your energy supply under *any* circumstances? 

You want to be reliant on anyone else for ANY of your *needs*? 

If you asked a leftist, the only response you'd get would be "see this is why we need to get rid of nations - no more nations, no more disagreements!".


----------



## qldfrog (7 September 2022)

over9k said:


> Ignore the war entirely - you want putin et al to control your energy supply under *any* circumstances?
> 
> You want to be reliant on anyone else for ANY of your *needs*?
> 
> If you asked a leftist, the only response you'd get would be "see this is why we need to get rid of nations - no more nations, no more disagreements!".



True, and very very obviously,we should really wake up at our position vs China
Be it as our export market for... everything..or import market for.. everything here in Oz 
Counterintuitively..yeap long word..i actually believe that reliance ..Which is very bad..is actually lessening the rise of inflation for us..for the moment.
We can pray that we remain the lucky country but might need to burn a lot of candle.
Inflation wise, we are really seing the collapse of the AUD lately, even after yesterday's RBA rate increase, and that is going to worsen inflation here.


The positive point: the frog doom and gloom portfolio is liking it this week


----------



## over9k (7 September 2022)

Lol


----------



## over9k (7 September 2022)

Only the yanks & arabs left if this happens.


----------



## noirua (7 September 2022)

Europe inflation rate by country 2022 | Statista
					

As of July 2022, the inflation rate in the European Union was 9.8 percent, with prices rising fastest in Estonia, which had an inflation rate of 23.2 percent.




					www.statista.com
				











						UK inflation rate 2022 | Statista
					

The inflation rate for the Consumer Price Index in the United Kingdom rose to a high of 10.1 percent in July ne 2022, compared with 9.4 percent in the previous month.




					www.statista.com
				











						Australia: CPI annual inflation rate by capital city 2022 | Statista
					

In June 2022, the Consumer Price Index (CPI) in Perth, Australia recorded a change of 7.4 percent on the 2021 June quarter, higher than any other capital city in the country.




					www.statista.com


----------



## bluekelah (7 September 2022)

over9k said:


> 100k/day drop announced. SFA.



yeah not that impressive, I wonder what happened to that saudi oil minister who said OPEC were gonna cut to send prices aboe $100USD/barrel.

I guess the next GFC is gonna be coming from the European energy crisis and possibly collapse of the EU and EURO as we know it today.


----------



## over9k (8 September 2022)

Looks like the bottom might be in for now lads: 




Plenty of volatility lately though if you've been cheeky enough


----------



## over9k (8 September 2022)

bluekelah said:


> yeah not that impressive, I wonder what happened to that saudi oil minister who said OPEC were gonna cut to send prices aboe $100USD/barrel.
> 
> I guess the next GFC is gonna be coming from the European energy crisis and possibly collapse of the EU and EURO as we know it today.



Yeah it's demand side dropping that has oil dropping. Basically none of the supply issues have been sorted.


----------



## waterbottle (8 September 2022)

Amazing that oil is now cheaper than pre Russia-Ukraine war...

Meanwhile CMEFedWatch tool is giving an 80% chance to a 75bps hike in September. Hmmmm


----------



## Telamelo (8 September 2022)

Oh no not another speech  .. as Federal Reserve Chair Jerome Powell is scheduled to speak tonight citing clues on "monetary policy & tightening plans".


----------



## bluekelah (9 September 2022)

over9k said:


> Yeah it's demand side dropping that has oil dropping. Basically none of the supply issues have been sorted.



yeah i guess recession has bigger impact on demand. Also the USA has been releasin' oil from their Special Reserves at record pace and USD has been going up and up and up. Possibly even more this winter as Europe falls apart.




2020634,967634,967634,967637,826648,326656,023656,140647,530642,186638,556638,085638,086  2021638,085637,773637,774633,428627,585621,304621,302621,302617,768610,646601,467593,682  2022588,317578,872566,061547,866523,109493,324

Down to 493million barrels now, hasnt been this low since 1985. Look at the chart, supplies starting to fall off a cliff! They are desperately releasing 1million barrels a day to try and keep prices low so that they can bring inflation down a bit and hopefully influence the upcoming elections as high fuel prices at the pump would definitely mean an automatic election loss for Biden. They probably have 1.5 years  left before the entire stash is gone. Probably not enough time for them to transition into "green" energy lol...

With the low investment globally into oil industry past 2 years, give it another 1.5years when SPR runs dry/low and all the frackers collapse, i think we could see prices spike to 150 or 200.

In the mean time, Putin has suddenly scheduled a meet with chinas Xi.


----------



## over9k (9 September 2022)

Another absolute bullseye from peter zeihan. Well worth the 5 minutes to watch.


----------



## over9k (9 September 2022)

Alright so the queen's just died which I'm sure you're all wondering the relevance to inflation of, so here it is:

Charles fancies himself a modern day lawrence of arabia (and has so for quite some time). There's more than a few images out there of charles, william et al visiting the saudi's to maintain their most specialist of relationships behind their one with the united states and with charles now having finally taken over the reins his years (decades) long lawrence-of-arabia complex may be about to pay the U.K some serious dividends.

Watch this space.


----------



## Smurf1976 (9 September 2022)

bluekelah said:


> With the low investment globally into oil industry past 2 years, give it another 1.5years when SPR runs dry/low and all the frackers collapse, i think we could see prices spike to 150 or 200.



The big one in my opinion will be when Putin decides to stop exporting *oil* to the West.

If that happens then price rises to whatever level shrinks the real economy sufficiently so as to keep planes on the ground, cars in the garage, factories idle and so on.

That might sound far fetched but they've already stopped exporting gas to Europe so it's really just an extension of that. Might seem crazy but I don't think the chance is zero.


----------



## over9k (9 September 2022)

Smurf1976 said:


> The big one in my opinion will be when Putin decides to stop exporting *oil* to the West.
> 
> If that happens then price rises to whatever level shrinks the real economy sufficiently so as to keep planes on the ground, cars in the garage, factories idle and so on.
> 
> That might sound far fetched but they've already stopped exporting gas to Europe so it's really just an extension of that. Might seem crazy but I don't think the chance is zero.



I'm still betting on the infrastructure reaching such an absolute state of disrepair that they'll have no choice but to stop the flow. 

There's more at play here than just what the powers that be want/do not want to do.


----------



## qldfrog (9 September 2022)

Smurf1976 said:


> The big one in my opinion will be when Putin decides to stop exporting *oil* to the West.
> 
> If that happens then price rises to whatever level shrinks the real economy sufficiently so as to keep planes on the ground, cars in the garage, factories idle and so on.
> 
> That might sound far fetched but they've already stopped exporting gas to Europe so it's really just an extension of that. Might seem crazy but I don't think the chance is zero.



Putin warned he will do it if EU puts idiotic caps on.
I also suspect that he will if the Ukrainian army + our western special forces starts winning some counterattacks there.
So a matter of time for this to happen.i am an oil and PM bull.
Yesterday was bad for me but today's market already getting better.inflation is here to stay and there are only so much manipulation to be done on oil gold before reality snaps back


----------



## frugal.rock (10 September 2022)

US markets banging.
5% Alerts going off
PLL, SOXL, NRGU and more

Semiconductors are back in flavour
Edit.
Add FEAM and MTC to the list...😹


----------



## bluekelah (11 September 2022)

Smurf1976 said:


> The big one in my opinion will be when Putin decides to stop exporting *oil* to the West.
> 
> If that happens then price rises to whatever level shrinks the real economy sufficiently so as to keep planes on the ground, cars in the garage, factories idle and so on.
> 
> That might sound far fetched but they've already stopped exporting gas to Europe so it's really just an extension of that. Might seem crazy but I don't think the chance is zero.




Many of our generation have not heard of the 1970s inflation. Back then there was an Oil embargo as well. oild prices went up from $3 to nearly $12 and gold went up from $40 an ounce(31.1g) to $160USD.

Xi and Putin are doing an unusally meet next week. They might be talking about doing an oil embargo soon on the west just like the Saudis did. and then when the west is starving for oil and prices go up 3x, Russia will then supply China oil to reexport to the west at skyhigh prices just like what they doing now with NG.








						Putin and Xi to meet in Uzbekistan next week, official says
					

Russian President Vladimir Putin and Chinese President Xi Jinping plan to meet next week in Uzbekistan, a Russian official said Wednesday.




					www.cnbc.com
				




Then they will probably launch their BRICS commodity backed currency.


----------



## waterbottle (11 September 2022)

bluekelah said:


> Many of our generation have not heard of the 1970s inflation. Back then there was an Oil embargo as well. oild prices went up from $3 to nearly $12 and gold went up from $40 an ounce(31.1g) to $160USD.
> 
> Xi and Putin are doing an unusally meet next week. They might be talking about doing an oil embargo soon on the west just like the Saudis did. and then when the west is starving for oil and prices go up 3x, Russia will then supply China oil to reexport to the west at skyhigh prices just like what they doing now with NG.
> 
> ...



That would be the pretext for a larger, global conflict...


----------



## qldfrog (11 September 2022)

waterbottle said:


> That would be the pretext for a larger, global conflict...



And that would sort the economy problems, full financial Reset as we are in war: seizure of assets, restriction .all good


----------



## bluekelah (11 September 2022)

qldfrog said:


> And that would sort the economy problems, full financial Reset as we are in war: seizure of assets, restriction .all good




IMHO China wont get involved in any conflict yet unless USA tries to position nukes in Taiwan or South Korea. That why Russia went into Ukraine this year as Romania and Poland have nuke sites now and Ukraine was gonna join NATO and build nuke sites too. China wont itch for a fight with USA until they are at least able to match the Americans in Aircraft carriers and nuclear subs, at the moment they are still ramping their semiconductor industry to produce enough chips/tech needed for modern warfare, which is another reason they may take taiwan(which has the biggest semicon player TSMC) sooner than later if they have BRICs to back them.

By sending billions in weapons and military aid to Ukraine, USA is basically in a cold war type situation with Russia again. But they have no choice, either prevent full invasion of Ukraine or lose their prominence as a world military power and look weak.

But yeah many believe a financial reset is coming. IMHO it will likely be a slow transitory process as power shifts from USA/Europe to Asia (namely China). Europe will need a full reset first at some stage. Or if USA really goes into a financial crisis and the world loses hope in USD and goes back to gold standard.

hyper/high Inflation though is often the first harbinger of a country starting to develop socio-economic problems, and then INEVITABLY you get internal conflict and governmental fall out.


----------



## divs4ever (11 September 2022)

qldfrog said:


> Putin warned he will do it if EU puts idiotic caps on.
> I also suspect that he will if the Ukrainian army + our western special forces starts winning some counterattacks there.
> So a matter of time for this to happen.i am an oil and PM bull.
> Yesterday was bad for me but today's market already getting better.inflation is here to stay and there are only so much manipulation to be done on oil gold before reality snaps back



 remember  Putin was an accomplished chess player  and is a Judo/Jujitsu master ( over 6th degree black belt )

 you attacking first  isn't always a winning strategy  ( against  that mentality )

 oil prices ( in the West ) and liable to become just as notional as silver prices on the commodity markets 

 pivotal for oil prices will be production costs  ( hardly anybody  puts money into development if a profit is unlikely )


----------



## Smurf1976 (12 September 2022)

bluekelah said:


> Xi and Putin are doing an unusally meet next week. They might be talking about doing an oil embargo soon



Just my random thoughts but I'm thinking along two separate lines:

1. Many of the Russian oil fields are technically difficult and with Western oil companies having left the country probably can't be maintained in operation much longer. Russia is therefore seeking China's assistance in return for selling them the oil at a discount etc. Noting that Russia and China already have deals regarding coal and natural gas done just before the war started so it would be consistent to add oil to that.

2. The US oil releases from the Strategic Petroleum Reserve are scheduled to end in the next few weeks. Perfect time to try and spike the oil price and prompt a further release, thus draining out the reserves as part of a longer term plan to bring about a physical oil crisis.


----------



## qldfrog (12 September 2022)

Smurf1976 said:


> Just my random thoughts but I'm thinking along two separate lines:
> 
> 1. Many of the Russian oil fields are technically difficult and with Western oil companies having left the country probably can't be maintained in operation much longer. Russia is therefore seeking China's assistance in return for selling them the oil at a discount etc. Noting that Russia and China already have deals regarding coal and natural gas done just before the war started so it would be consistent to add oil to that.
> 
> 2. The US oil releases from the Strategic Petroleum Reserve are scheduled to end in the next few weeks. Perfect time to try and spike the oil price and prompt a further release, thus draining out the reserves as part of a longer term plan to bring about a physical oil crisis.



So as investors, isn't it a great time to pile on selected oil companies or trades?


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## waterbottle (12 September 2022)

Oil may also be collapsing due to fears of a recession, as in 2008 and 2020


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## qldfrog (12 September 2022)

waterbottle said:


> Oil may also be collapsing due to fears of a recession, as in 2008 and 2020



True but even with recession on 2020, people are still burning oil and Europe even more in the coming winter..plus end of US stock release..hum not to bad a bet IMHO


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## Smurf1976 (12 September 2022)

qldfrog said:


> So as investors, isn't it a great time to pile on selected oil companies or trades?



Cautiously in my view.

I’m always wary of investing in something where the underlying reason is politics.

Just needs someone to shoot Putin and things could change real quick.


----------



## qldfrog (12 September 2022)

Smurf1976 said:


> Cautiously in my view.
> 
> I’m always wary of investing in something where the underlying reason is politics.
> 
> Just needs someone to shoot Putin and things could change real quick.



Short term only, we have a structural issue due to non/ under investment in fosdil fuel but that would definitely be a time to load up after indeed a good temp plunge.
Will restrain betting the house on this


----------



## divs4ever (12 September 2022)

qldfrog said:


> So as investors, isn't it a great time to pile on selected oil companies or trades?





not me  ( unless TEG drops a fair bit )

 am comfortably positioned already  ( and have been for a few years  .. although  not as cosy as coal )


----------



## divs4ever (12 September 2022)

Smurf1976 said:


> Cautiously in my view.
> 
> I’m always wary of investing in something where the underlying reason is politics.
> 
> Just needs someone to shoot Putin and things could change real quick.



careful what you wish for 

 Putin gets a LOT of internal criticism as a softie  , and the Duma is chockers with former intelligence officers ( not even ordinary military )

 Medvedev  is tagged as the next closest  to a dove and he invaded Georgia . no softly softly  a full on tank assault ( and he is isn't even ex-military )

 change indeed , but will it be the change desired


----------



## qldfrog (13 September 2022)

And an interesting map of fertilizer production collapse in europe dated end of last month.this imho means that we can expect sharply falling production of cereal next year...hum inflation is not over nor government collapsing unger hungry protesters...
Bread and circus to keep them happy...
We have circus, clown of Kiev, Greta , a funeral and some good soccer or basket games, even tiktok or reality shows..but will we have bread?


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## over9k (13 September 2022)

Inflation numbers in, 8.3% year on year vs estimated 8.1, +0.1 on the month vs estimated -0.1, futures all flipped from +1 to -2 in response, growth plays all slaughtered, swaps now fully priced another 75 point rise at the next meeting, energy still up/looking like the only thing that'll be in the green or at least the best of a bad bunch for the day, all in all, energy still the play.

Looking like a beautiful dip buy as the open's going to be a massacre.


----------



## over9k (13 September 2022)

Smurf1976 said:


> Cautiously in my view.
> 
> I’m always wary of investing in something where the underlying reason is politics.
> 
> Just needs someone to shoot Putin and things could change real quick.



From what I've read, putin shall we say "took care" of anyone likely to do that years ago.


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## over9k (14 September 2022)

Green normally means good.


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## over9k (14 September 2022)

Energy down ~1% on the day, nasdaq down nearly 4%.


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## waterbottle (14 September 2022)

Complete carnage....


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## qldfrog (14 September 2022)

waterbottle said:


> Complete carnage....



From our friend Ducati


A new bright world ahead all honey and lollypop
I do not think so.
Inflation here to stay unless we go to double digit IR..and we will not.


----------



## waterbottle (14 September 2022)

Well the CME fed watch tool is now quoting a 34% chance of a 100bps hike given the new inflation figures


----------



## qldfrog (14 September 2022)

waterbottle said:


> Well the CME fed watch tool is now quoting a 34% chance of a 100bps hike given the new inflation figures



As long as rate below inflation,it is not effective so unless we eeach 9 ot 10% ...and this takes balls as it hurts .
no way it will happen so the next step is hyperinflation fiat collapse 
We are living again the nightmare of the Weimar republic in Germany, 100y later and we should pray it will not end the same
Weak government, economic crisis and start of inflation.
Imho just the consequences of unsolved GFC . Australia is sadly on the same train


----------



## Telamelo (14 September 2022)

Recent 23/07/2022 article below I found interesting..​​"Russia cuts rates sharply as inflation outlook improves"​
Russia’s central bank has cut interest rates in a surprise move that it said was in response to a slowdown in inflation & an improved GDP forecast. The decision to cut rates to 8 per cent on Friday, from 9.5 per cent in June, suggests that the central bank believes Russia is weathering the storm of western sanctions imposed over its invasion of Ukraine better than it had feared.





__





						Subscribe to read | Financial Times
					

News, analysis and comment from the Financial Times, the worldʼs leading global business publication




					www.ft.com


----------



## qldfrog (14 September 2022)

Telamelo said:


> Recent 23/07/2022 article below I found interesting..​​"Russia cuts rates sharply as inflation outlook improves"​
> Russia’s central bank has cut interest rates in a surprise move that it said was in response to a slowdown in inflation & an improved GDP forecast. The decision to cut rates to 8 per cent on Friday, from 9.5 per cent in June, suggests that the central bank believes Russia is weathering the storm of western sanctions imposed over its invasion of Ukraine better than it had feared.
> 
> 
> ...



That is a bit old..so maybe obsolete now?


----------



## mullokintyre (14 September 2022)

I keep going back to the  "transitory inflation" meme that was so prominent in utterances from both the US fed and the whitehouse.
Our own experts here in AUS as well as those in the Eu all followed the same line.
That has been blown out of the water big time.
The only question then is this consensus  of failure a result of  complete incompetence or complete  deliberate scamming by the powerful elites?
It doesn't really matter which one is true, we are still F%^5ed.
Mick


----------



## InsvestoBoy (14 September 2022)

mullokintyre said:


> I keep going back to the  "transitory inflation" meme that was so prominent in utterances from both the US fed and the whitehouse.
> Our own experts here in AUS as well as those in the Eu all followed the same line.
> That has been blown out of the water big time.
> The only question then is this consensus  of failure a result of  complete incompetence or complete  deliberate scamming by the powerful elites?
> ...




For you to believe that inflation is not transitory, you must believe that everything, *everything*, is going to keep going up in price at the same pace it has been for the last 1.5 years.

If prices settle at the current high level for the next year, inflation will be 0%. Hopefully that is obvious.

So do you believe that or not?


----------



## bluekelah (14 September 2022)

InsvestoBoy said:


> For you to believe that inflation is not transitory, you must believe that everything, *everything*, is going to keep going up in price at the same pace it has been for the last 1.5 years.
> 
> If prices settle at the current high level for the next year, inflation will be 0%. Hopefully that is obvious.
> 
> So do you believe that or not?



Its all about money supply . M2 has been flat only since JAN 2022 this year. Which means the past 2 years of massive money supply will feed in to inflation numbers like it always does for next 1.5-2 years.

Which also means inflation will only be 0% if money supply continues to be flat till end of 2024, recession or not. Can the US and by proxy the global economy withstand it till then, without CBs and FED pivoting and printing again when the global recession worsens before we reach end of 2024?? M2 MOney supply chart --> https://fred.stlouisfed.org/series/WM2NS

The only way to quickly combat high inflation as volcker showed is to cap money supply growth and increasing rates to levels way above inflation rate, however that results in a deep recession and pain and high unemployment which no modern gov can withstand, especially with astronomical rates of debt today.

So unless FED does 9 or 10% rates, it is very unlikely inflation goes back to 0% or even 2% target by next year 2023 as all the money created in 2020 and 2021 is still sloshing around in the system.

By the way, real inflation both in USA and globally is probably at the 15-20% level if measured properly like it was measured decades ago. Most major consumer goods / rental/ fuel etc stuff we buy has definitely gone up at least 15-20% if not more, some stuff we buy has gone up even 100% in the past year. We are just lucky we produce a lot of food hence some seasonal food hasnt gone up much.


----------



## InsvestoBoy (14 September 2022)

bluekelah said:


> Its all about money supply . M2 has been flat only since JAN 2022 this year. Which means the past 2 years of massive money supply will feed in to inflation numbers like it always does for next 1.5-2 years.












						Is M2 The Money Behind Inflation? If Not, What Is (Or Isn't)?
					

Milton Friedman was touring India, and while there he shocked his audience by stating, “Inflation is always and everywhere a monetary phenomenon.” This was 1963, and the audacity of that statement is today understated. Back then, Keynes didn’t just rule there was hardly any opposition to such...




					alhambrapartners.com
				












						What *Must* Lie Beyond the M's
					

This particular part of the hysteria is understandable, if thoroughly unconvincing. Forget the Fed and its bank reserves for moment, whatever those are now and then. The banking system is where it’s at, monetarily speaking, and it is the banking system which seems to have lost its handle on the




					alhambrapartners.com


----------



## bluekelah (14 September 2022)

InsvestoBoy said:


> Is M2 The Money Behind Inflation? If Not, What Is (Or Isn't)?
> 
> 
> Milton Friedman was touring India, and while there he shocked his audience by stating, “Inflation is always and everywhere a monetary phenomenon.” This was 1963, and the audacity of that statement is today understated. Back then, Keynes didn’t just rule there was hardly any opposition to such...
> ...



_"Three-quarters of a year_ at better than 20% “money” growth would be more than sufficient time and at a way-more-than-sufficient pace for this deluge to have flooded itself all the way completely through any economy and have months ago left behind not just a detectable inflationary signal but more likely a completely unambiguous one."

Snider would be wrong here, it takes at least a year or even up to 1.5-2 years for money supply increases to filter and show up into the real economy as inflation. The money supply increase started showing up after he wrote the second article in march 2021. All the direct fiscal stimulus and check handouts for covid 2020 lockdowns did start to show up a year after.
Inflation speeds up in April as consumer prices leap 4.2%, fastest since 2008​


			https://www.cnbc.com/2021/05/12/consumer-price-index-april-2021.html
		


Have a listen to Prof. Henke. After all he is the one that got it RIGHT to predict 9% inflation   this year. And also he gives a timeframe for inflation next year to be calculated at around 6%.
Economist who called 9% inflation has this grim forecast for what's next - Steve Hanke​

65% chance of recession as inflation heats up to 8.6% - Steve Hanke​


----------



## over9k (14 September 2022)

It's a supply side problem guys.


----------



## InsvestoBoy (14 September 2022)

bluekelah said:


> Have a listen to Prof. Henke. After all he is the one that got it RIGHT to predict 9% inflation   this year. And also he gives a timeframe for inflation next year to be calculated at around 6%.




lol Hanke.

Just another Austrian who has been wrong forever on inflation and everything else.

I remember this joker in May 2008 saying the Fed was flooding the system with liquidity, the dollar would be crushed, inflation would remain high, into the face of the worst liquidity crisis in decades and the start of a massive bond bull market.

Perhaps the interviewer should have asked "sir, considering you have been predicting inflation forever and been consistently wrong, why would any sane person listen to a word you have to say now that it appears your broken clock was right for once?" but I doubt the Prof would dare to appear on such a show.


----------



## InsvestoBoy (14 September 2022)

Here's one from genius inflation predictor Hanke in 2009 telling investors "inflation will roar back with a vengeance" if the Fed doesn't stop QE and that they should "avoid being suckered into any stock market rallies" and instead "Stick with the Treasury Inflation-Protected Securities (TIPS) that I have been recommending for some time. You should also own some gold, via commodity futures or an exchangetraded fund."









						Fed Up
					

Investors watching the recent rally may think that the Fed has saved the day, but its approach is fraught with danger.




					www.forbes.com
				




LOL


----------



## JohnDe (14 September 2022)

InsvestoBoy said:


> Here's one from genius inflation predictor Hanke in 2009 telling investors "inflation will roar back with a vengeance" if the Fed doesn't stop QE and that they should "avoid being suckered into any stock market rallies" and instead "Stick with the Treasury Inflation-Protected Securities (TIPS) that I have been recommending for some time. You should also own some gold, via commodity futures or an exchangetraded fund."
> 
> 
> 
> ...




2009? That is ancient in the trading market. though, as Nostradamus followers have done, those that predict don't care about timelines.


----------



## InsvestoBoy (14 September 2022)

JohnDe said:


> 2009? That is ancient in the trading market. though, as Nostradamus followers have done, those that predict don't care about timelines.




Mate I am just responding to someone who said I should listen to genius inflation predictor Hanke with a bit of context since I have been following the market for more than 10 minutes, once you have been around for a while you know who is serious and who is a complete joke.

Anyone listening to an Austrian in 2022 because "they got it right" is ignoring their complete and obvious wrong calls about the *fundamental nature of money and markets *for the last decade+.


----------



## moXJO (14 September 2022)

InsvestoBoy said:


> For you to believe that inflation is not transitory, you must believe that everything, *everything*, is going to keep going up in price at the same pace it has been for the last 1.5 years.
> 
> If prices settle at the current high level for the next year, inflation will be 0%. Hopefully that is obvious.
> 
> So do you believe that or not?



Adding "transitory" is a waste of time, it's just  "inflation". It's like me saying I need to take a "transitory $hit".


----------



## InsvestoBoy (14 September 2022)

moXJO said:


> Adding "transitory" is a waste of time, it's just  "inflation". It's like me saying I need to take a "transitory $hit".




I really view it in the exact opposite way.

Inflation is not transitory, it's a sustained and pervasive increase in the price level, always driven by "too much money chasing too few goods".

Anything else is transitory.

Maybe to add to your analogy, to me inflation is diarrhoea, anything else is just ****.


----------



## Smurf1976 (14 September 2022)

InsvestoBoy said:


> If prices settle at the current high level for the next year, inflation will be 0%. Hopefully that is obvious.
> 
> So do you believe that or not?



There’s already considerable further inflation baked in the cake.

Lots of workplaces where pay negotiation is done for the entire workforce on a fixed timeframe. So they haven’t seen a labour cost increase yet but it’ll be a big, sudden jump when it comes.

Same with lots of contracts. Suppliers haven’t been able to pass on cost increases at all thus far but it’ll be a big jump when the present contract expires.

Also industries that have absorbed cost increases so as to keep prices below psychologically key price points but when they finally break through it’s 25 - 50% increases in one hit to the next key price point.

Then there’s the ~24 cents per litre fuel price rise in a fortnight here in Australia.

So we’d need to see significantly negative underlying inflation to avoid further rises at the pointy end.


----------



## JohnDe (14 September 2022)

Smurf1976 said:


> There’s already considerable further inflation baked in the cake.
> 
> Lots of workplaces where pay negotiation is done for the entire workforce on a fixed timeframe. So they haven’t seen a labour cost increase yet but it’ll be a big, sudden jump when it comes.
> 
> Same with lots of contracts. Suppliers haven’t




Which workplaces, industry, contracts & suppliers?


----------



## waterbottle (14 September 2022)

The fact that the headline CPI rose, despite POO returning to pre-Ukraine war levels, is cause for concern. What happens when POO starts climbing back up when China is out of lockdown and the Euro winter starts?


----------



## over9k (14 September 2022)

JohnDe said:


> Which workplaces, industry, contracts & suppliers?



Basically everything. Inverted population pyramid = good for workers. 

Only problem is that we're going to have to be taxed into oblivion to pay the national debt + cost of boomers retiring. 

And the more rates spike, the more burdensome the debt gets.


----------



## bluekelah (14 September 2022)

InsvestoBoy said:


> lol Hanke.
> 
> Just another Austrian who has been wrong forever on inflation and everything else.
> 
> ...



So where did henke say FED was flooding the system in 2008, etc. do you have a link I can read up on?

IIRC the housing bubble started bursting in 2007 after a series of rate hikes by FED to 5.25%, causing  Greenspan then started dropping rates in 1H 2008 in the face of rising unemployment and negative GDP growth, i think they only dropped a few % points to 2% and stocks were down like 20% even before Oct 2008 when the GFC hit. then rates all the way to zero at the end of 2008. how is that flooding the system with liquidity when everything is correcting, especially in May 2008 rates only dropped a couple % points?

And has Snider which you have been showing as an example been right all the time? what does Snider recommend for retail investors to be buying? What are his current views on high inflation etc..? has he been making any predicitons? How accurate have they been?


----------



## waterbottle (14 September 2022)

PPI rose 0.2% MoM when energy & food excluded....


----------



## Smurf1976 (14 September 2022)

JohnDe said:


> Which workplaces, industry, contracts & suppliers?



Lots of large employers with generic positions, or positions that can be grouped at the same rate for payment purposes, have fixed wage structures.

The public service is one example. As an employee you're at Band x Level y and that has a precise pay rate attached to it with little or no room to negotiate. Same in private enterprise where that system is used, it's absolutely rigid. The structure doesn't nominate your actual pay, it just nominates what level you're paid at. Any negotiation on your part as an employee will be about what level you're at, and you can certainly negotiate that both in the PS and private with that system, but the $ attached to any given level are fixed.

Sitting behind that is the actual negotiation process which puts $ amounts against those bands and levels and usually they're set for very specific periods, that is the end date is specified right from the start. 3 years is not uncommon from what I've seen personally but it will vary. I do recall working under a 5 year agreement in the past.

So for an employer with a previous agreement from 2019 that needs to renew that later this year, they'll face a significant hike in one hit. Bearing in mind that CPI generally forms the base minimum for such negotiations.

As for contracts, that could be anything but I mean things where someone (a business or government) negotiated a (say) 4 year contract with whatever supplier (another business) to provide their requirements of x.

When that comes up for tender to get a new contract, well it's a different world now. Nobody in 2022 is going to be offering prices the same as they agreed to in 2018 for example. They'll not only be passing through inflation thus far, they'll be factoring in their own expectations of inflation through to 2026. They might've been burned recently with cost increases and will be keen to make sure it doesn't happen again.

In the energy industry tenders are failing outright. That is, a large user goes to open tender for their requirements with the result that not a single supplier actually submits a complying tender. The suppliers simply aren't willing to lock themselves into pricing for x years ahead and will instead just offer short term contracts at a fixed price or, alternatively, they'll agree to the 5 year term the customer wants but it'll be based on the spot price + x, it won't be a fixed price as such just a fixed margin on the spot or some other variable reference price.

All that's really the same thing. Situations where pricing is locked in for several years at a time. Last time that was locked in for many, nobody would've understood what you were on about if you'd said "Covid", Ukraine was just another country of no particular significance and CPI was running at ~2%. Once it's time to renew the contracts or agreements, prices will be higher and that remains so even if CPI goes to zero right now, there's still the recent rises to be passed through. 

Another example I'm aware of, due to having a contact within the industry, is live entertainment. It's not unusual for a band to be booked 12 months before the show date and at 2% inflation that's not a big deal. However when your costs include both international and domestic air travel, they include hotels, venue hire and all the rest there's some very real exposure there as well as the ticket sales volume risk (which is exposed to the broader economy and consumer spending). The overall situation is starting to raise some serious concerns about how robust the financials are to external stresses I'm told.


----------



## noirua (15 September 2022)

UK inflation falls for first time in nearly a year |  Cyprus Mail
					

British consumer price inflation fell for the first time in almost a year in August as a drop in fuel prices offered some unexpected - and probably brief - respite to households and the Bank of England. Annual consumer price growth slowed to 9.9 per cent from July's 40-year high…




					cyprus-mail.com


----------



## over9k (15 September 2022)

So while you all bicker like children, I'll ask, did anyone have the stones to buy yesterday?


----------



## Telamelo (15 September 2022)

over9k said:


> So while you all bicker like children, I'll ask, did anyone have the stones to buy yesterday?



Nup as believe more downside to come imo so rather wait for capitulation/end of the world doomsday type scenario to play out - no certainties it will though but have my watchlist ready nevertheless


----------



## qldfrog (15 September 2022)

Telamelo said:


> Nup as believe more downside to come imo so rather wait for capitulation/end of the world doomsday type scenario to play out - no certainties it will though but have my watchlist ready nevertheless



My buys were in a months ago and price wont change for the next 12 months...have to with inflation...
 do not chase a SP, let in come to you in a bear market😊


----------



## JohnDe (15 September 2022)

over9k said:


> So while you all bicker like children, I'll ask, did anyone have the stones to buy yesterday?




Yes. Also sold the day before, using those funds for new investments.


----------



## mullokintyre (15 September 2022)

over9k said:


> So while you all bicker like children, I'll ask, did anyone have the stones to buy yesterday?



Nah, its only a flesh wound. 
I will be buying when the streets flow with blood.
Far too many overated wannabees in the index.
Mick


----------



## JohnDe (15 September 2022)

over9k said:


> So while you all bicker like children, I'll ask, did anyone have the stones to buy yesterday?




My purchase was from the Nasdaq at its low, looking good now


----------



## over9k (15 September 2022)

30% off the low of the 7th, was about +1% two nights ago where the nasdaq dropped 5%, and then ran 15% last night alone. 

Energy IS the play lads


----------



## waterbottle (15 September 2022)

When


over9k said:


> View attachment 146870
> 
> 
> 30% off the low of the 7th, was about +1% two nights ago where the nasdaq dropped 5%, and then ran 15% last night alone.
> ...



When does the US shut off SPR releases?


----------



## over9k (15 September 2022)

waterbottle said:


> When
> 
> When does the US shut off SPR releases?



Did you see they're actually thinking about topping them back up at the $80 mark?


----------



## waterbottle (15 September 2022)

over9k said:


> Did you see they're actually thinking about topping them back up at the $80 mark?



Yep, but are those rumours or legit? I thought the SPR was still sitting above 50% capacity


----------



## over9k (15 September 2022)

waterbottle said:


> Yep, but are those rumours or legit? I thought the SPR was still sitting above 50% capacity



"The biden administration is considering..."


----------



## frugal.rock (15 September 2022)

over9k said:


> "The biden administration is considering..."



Sleeping on it... the silly old goat


----------



## over9k (15 September 2022)

I love these types of headlines


----------



## frugal.rock (15 September 2022)

What is it and what does it mean though? 🤔 
Edumacate me please!


----------



## rcw1 (15 September 2022)

frugal.rock said:


> What is it and what does it mean though? 🤔
> Edumacate me please!



Good afternoon/evening fugal.rock,

Edumate me @ educate thou @ academic ed @ stay in line idiot @ this path is only one way @ my way or the highway @ the silent assassin
ha ha ha ha

Kind regards
rcw1


----------



## over9k (15 September 2022)

frugal.rock said:


> What is it and what does it mean though? 🤔
> Edumacate me please!



We might have an inflation problem but it's only going to be transitory.

Honest >_>


----------



## frugal.rock (15 September 2022)

over9k said:


> We might have an inflation problem but it's only going to be transitory.
> 
> Honest >_>



Is that because inverted yield as such guarantees recession and no one will be able to afford anything, thus reducing inflation inflammation? 🤔

Assume I'm as thick as 2 bricks and spell it out. Don't hold back.


----------



## bluekelah (15 September 2022)

frugal.rock said:


> Is that because inverted yield as such guarantees recession and no one will be able to afford anything, thus reducing inflation inflammation? 🤔
> 
> Assume I'm as thick as 2 bricks and spell it out. Don't hold back.



Yield inversion is often correlated with a subsequent recession historically but not a Guarantee of recession. 









						Inverted Yield Curve: Definition, What It Can Tell Investors, and Examples
					

An inverted yield curve is an unusual state in which longer-term bonds have a lower yield than short-term debt instruments.




					www.investopedia.com
				



[A yield curve inverts when long-term interest rates drop below short-term rates, indicating that investors are moving money away from short-term bonds and into long-term ones. This suggests that the market as a whole is becoming more pessimistic about the economic prospects for the near future.]

recession causes demand destruction which in theory should reduce inflation. However there have been periods of recession and still persistent high inflation as in 1970s called stagflation.


----------



## waterbottle (15 September 2022)

Meanwhile, this has happened in the crypto space: https://www.cnbc.com/2022/09/15/eth...pgrade-just-went-live-heres-what-it-does.html

I wonder how NVDA & AMD are going to go...


----------



## bluekelah (15 September 2022)

waterbottle said:


> When
> 
> When does the US shut off SPR releases?



Was expected to end in October if inflation started coming down. However looks like they will have to go on for longer as inflation is still skyhigh and elections are still not done yet. I believe they are down to 434 now. Look at the chart link, its falling off a cliff, starting going down even before the war. the rate they are going, its probably only gonna last another 1.5years.

U.S. emergency oil reserves tumble to lowest since 1984​








						U.S. emergency oil reserves tumble to lowest since 1984
					

U.S. emergency crude oil stocks fell 8.4 million barrels last week to 434.1 million barrels, their lowest since October 1984, according to U.S. Department of Energy (DOE) data released on Monday.




					www.reuters.com
				




for the SPR chart




__





						Weekly U.S. Ending Stocks of Crude Oil in SPR (Thousand Barrels)
					





					www.eia.gov


----------



## over9k (15 September 2022)

frugal.rock said:


> Is that because inverted yield as such guarantees recession and no one will be able to afford anything, thus reducing inflation inflammation? 🤔
> 
> Assume I'm as thick as 2 bricks and spell it out. Don't hold back.



Well because it's just inverted, this means that we only reckon the inflation is going to be short(er) term. A bit like just pumping the brakes on a speeding car for a second to wipe some speed off and get back to a safe pace after we pressed the throttle a bit too hard. 

It's only when we realise that we were accelerating the car right before we went over the crest of a hill when we actually should have seen the crest coming and just coasted over it and there's now gravity (long term supply side problems) that's speeding it up instead of our foot on the throttle and that said gravity is also outside of our control (i.e we went over the crest of the hill way too fast) that we'll realise that we have to keep the brakes on much harder for much longer than we initially thought (long dated rates are going to soar as well).

There's also the non-linear nature of speed reduction we now have to contend with too. It takes the square of the increase in the amount to actually stop the car, so it takes 4x the distance to stop from 2x the speed, 9x the distance to stop from 3x the speed, and so on and so forth, so the problem becomes exponentially worse the more you go over your intended speed too, which we obviously have.


----------



## waterbottle (15 September 2022)

over9k said:


> Well because it's just inverted, this means that we only reckon the inflation is going to be short(er) term. A bit like just pumping the brakes on a speeding car for a second to wipe some speed off and get back to a safe pace after we pressed the throttle a bit too hard.
> 
> It's only when we realise that we were accelerating the car right before we went over the crest of a hill when we actually should have seen the crest coming and just coasted over it and there's now gravity (long term supply side problems) that's speeding it up instead of our foot on the throttle and that said gravity is also outside of our control (i.e we went over the crest of the hill way too fast) that we'll realise that we have to keep the brakes on much harder for much longer than we initially thought (long dated rates are going to soar as well).
> 
> There's also the non-linear nature of speed reduction we now have to contend with too. It takes the square of the increase in the amount to actually stop the car, so it takes 4x the distance to stop from 2x the speed, 9x the distance to stop from 3x the speed, and so on and so forth, so the problem becomes exponentially worse the more you go over your intended speed too, which we obviously have.



Is this an electric car or ICE though?


----------



## over9k (15 September 2022)

waterbottle said:


> Is this an electric car or ICE though?



We're boned either way


----------



## Gunnerguy (15 September 2022)

frugal.rock said:


> Is that because inverted yield as such guarantees recession and no one will be able to afford anything, thus reducing inflation inflammation? 🤔
> 
> Assume I'm as thick as 2 bricks and spell it out. Don't hold back.



Actually the inverted 2/10 yield curve DOES NOT 'guarantee' a recession. Having listened to the author (A university researcher/Ph.D student ? of some US University in maybe 1980's or 1990's) of the paper her wrote that assessed this phenomenon in a podcast he stated that 'it all depends on how long the inversion lasts for'. I can't remember for the life of me what timeframe it needs to be to 'statistically confirm the future occurrance of a recession' however just that it is inverted does not confirm a recession.
This may be pedantic but when people quote this fact inversion=recession they misrepresent the researchers work, and he states in the podcast I heard that it annoys him and it all depends on the length of the inversion, 1month, 2 months, 3 months etc.
I think the podcast was either NPR's  'Planet Money' or NPR's 'Indicator podcast in about ....... June/July this year.

Personally thinking ........ I've no idea whether the US IS in recession or will be, however I think it is likely.

Just a comment to ground ourselves in the facts as in the current market we (or some of us) are looking at each comment, tick or trend in order to try to make moeny in the market.

Stay safe out there. Patience.

Gunnerguy.
(DYOR)


----------



## over9k (15 September 2022)

Jobs numbers report now below estimates while the inflation report was above estimates. 

Stagflation ahead lads.


----------



## over9k (16 September 2022)




----------



## waterbottle (16 September 2022)

Cracked 12000.
Oil and energy down. 
Lithium stocks have been surprisingly resilient, although they buckled last night.


----------



## waterbottle (16 September 2022)

From the Gyardian


Inflation too high at the moment, RBA governor says

Peter Hannam

As the economics committee gets going this morning, RBA governor Philip Lowe kicks off by stating the good news since the last meeting back in February.

That’s mainly the drop in the jobless rate from 4.2% then to 3.5% as of last month. (See earlier post.)

RBA governor Philip Lowe at the economics committee at Parliament House in Canberra, Friday, 16 September 2022. Photograph: Lukas Coch/AAP

The bad news, though, is that inflation has “very quickly” gone from “too low to too high”. (Hence the rapid rise in interest rates at the fastest pace since 1994.)

Lowe has repeated the bank’s expectation that inflation (CPI) will peak at about 7.75% at the end of 2022, and ease to 3% by the end of 2024.

As for the RBA’s actions over the past couple of years, Lowe says the bigger policy mistake would have been to have too little than to do too much, Lowe says, of the support given during the “very scary” period at the start of the Covid pandemic.

Still, it’s a “difficult and concerning time for many people” with the rise in the RBA cash rate and consequent increased borrowing costs. Not to act to stem inflation, though, would have worse impacts, Lowe says.


----------



## waterbottle (16 September 2022)

FedEx ringing the bell









						FedEx issues ominous warning about the global economy, shares tumble
					

FedEx withdrew its full year earnings guidance as macro trends 'significantly worsened,' sending share tumbling in extended trading.




					finance.yahoo.com


----------



## over9k (16 September 2022)

USD the place to be


----------



## waterbottle (16 September 2022)

Possibly, it's a bet on what the Fed is going to do next week. 
We've known for a while now that they've been targeting rates >4% but the market has been in denial and rising on hopium.


----------



## qldfrog (16 September 2022)

waterbottle said:


> Possibly, it's a bet on what the Fed is going to do next week.
> We've known for a while now that they've been targeting rates >4% but the market has been in denial and rising on hopium.



Rising on opioids and ....fees:
buy....sell..diversify.....😁


----------



## mullokintyre (16 September 2022)

waterbottle said:


> The bad news, though, is that inflation has “very quickly” gone from “too low to too high”. (Hence the rapid rise in interest rates at the fastest pace since 1994.)
> 
> Lowe has repeated the bank’s expectation that inflation (CPI) will peak at about 7.75% at the end of 2022, and ease to 3% by the end of 2024.



Unfortunately, Lowe provides no explanation as to why  the Bank has an expectation that inflation will ease to 3% by the end of 2024.
If as some suggest, the inflation was largely due to supply chain issues, the bank must expect that these issues are going to be solved in the near term. I see nothing that suggests supply problems will be  fixed. 
Others suggest that energy supply/cost increases were the main driver.
The world has spent billions on renewables over the past ten years, and still we have major supply/cost issues associated with energy.
This will not be solved in  another ten years, let alone 2 years.
An example of a combination of the two points above, OIL Price


> As the EU ban on Russian oil and fuels looms, demand for tankers - particularly ice tankers - has been climbing.
> In early August, the average profit for an oil product tanker jumped to the highest level since 1997, and it is likely that profits have increased since then.
> Fuel markets worldwide are also tight which, combined with soaring tanker prices, will only add to inflation fears.



And to add to that, large numbers of older tankers have been scrapped as oil is phased out. To add to the problem, the building of new large bulk oil cargo ships have been severely reduced as forward orders suggested the market for oil would disappear. 
Then of course you have the built up wage demand that is yet to start flowing through into business costs. Wage rises are always lagging inflation,  and with the  low unemployment rate, workers are in the box seat to demand and get larger wage rises, which in turn increases costs, which increases inflation and so on.


waterbottle said:


> As for the RBA’s actions over the past couple of years, Lowe says the bigger policy mistake would have been to have too little than to do too much, Lowe says, of the support given during the “very scary” period at the start of the Covid pandemic.



I have argued on here in the past that the bank was already doing too little too late.  Rates should have been rising at the end of last year to signal to the market what was happening, but instead Lowe said he could see no rises till the end of 2023.
I can't believe that they somehow thought that all the issues causing inflation in other parts of the world would somehow magically bypass OZ.


waterbottle said:


> Still, it’s a “difficult and concerning time for many people” with the rise in the RBA cash rate and consequent increased borrowing costs. Not to act to stem inflation, though, would have worse impacts, Lowe says.



I think its already too late.
Mick


----------



## over9k (16 September 2022)

waterbottle said:


> Possibly, it's a bet on what the Fed is going to do next week.
> We've known for a while now that they've been targeting rates >4% but the market has been in denial and rising on hopium.









My gut instinct is that we'll see another 100.


----------



## bluekelah (16 September 2022)

Gunnerguy said:


> Actually the inverted 2/10 yield curve DOES NOT 'guarantee' a recession. Having listened to the author (A university researcher/Ph.D student ? of some US University in maybe 1980's or 1990's) of the paper her wrote that assessed this phenomenon in a podcast he stated that 'it all depends on how long the inversion lasts for'. I can't remember for the life of me what timeframe it needs to be to 'statistically confirm the future occurrance of a recession' however just that it is inverted does not confirm a recession.
> This may be pedantic but when people quote this fact inversion=recession they misrepresent the researchers work, and he states in the podcast I heard that it annoys him and it all depends on the length of the inversion, 1month, 2 months, 3 months etc.
> I think the podcast was either NPR's  'Planet Money' or NPR's 'Indicator podcast in about ....... June/July this year.
> 
> ...



1Q 2022 and 2Q2022 showed negative GDP growth in USA.

2 negative GDP quarters == technical recession. So technically USA is already in a technical recession, US gov doesnt want to admit it as they were late to raise rates and need to justify their rate rising into a "non-recession". 

3rd quarter july-sept GDP growth WILL be negative and announced late October to confirm the recession.  So yes this yield curve inversion seen this year from March 31st 2022 has been followed by a technical recession which FED will soon have to admit has become a real recession. 

Jobs have always been the lagging indicator. Usually by the time jobless rates go up the recession is already ongoing.


----------



## over9k (16 September 2022)

As I said previously, parity is on the way.


----------



## over9k (16 September 2022)




----------



## Smurf1976 (16 September 2022)

Gunnerguy said:


> Personally thinking ........ I've no idea whether the US IS in recession or will be, however I think it is likely.



I'm starting to see reports suggesting a meaningful slowdown at the "real" end of the economy.

Spotted a mainstream media one from the US yesterday about museums being down on visitors and revenue. Spotted one from the UK about restaurants and theatre shows saying the same.

Locally for the first time in quite a while I'm seeing car dealers now advertising again. Presumably that means they're getting stock in that isn't already sold = either demand's dropping off or supply's increasing.

Also another one is CBA offered a 20% bonus to exchange credit card rewards points for gift vouchers etc. I'd have thought they'd be more than happy to have the points just sitting there, at worst it's a non-interest bearing deposit that isn't guaranteed so no loss to them, but they seem to want them gone. Must be a reason.....


----------



## over9k (16 September 2022)

over9k said:


> View attachment 146903
> 
> View attachment 146902
> 
> ...



To further this post, last time it was a debate between 75 and 100 they delivered with 100 and markets absolutely screamed on the day/got exactly what they wanted. Food for thought.


----------



## waterbottle (16 September 2022)

over9k said:


> To further this post, last time it was a debate between 75 and 100 they delivered with 100 and markets absolutely screamed on the day/got exactly what they wanted. Food for thought.



Agreed. Might head down until the date and then pop afterwards - particularly if the Fed signal that they will soon slow down the pace of rate increases, although this seems unlikely given 10yr bond rising and will probably surpass the June highs


----------



## over9k (16 September 2022)

waterbottle said:


> Agreed. Might head down until the date and then pop afterwards - particularly if the Fed signal that they will soon slow down the pace of rate increases, although this seems unlikely given 10yr bond rising and will probably surpass the June highs



Yeah, I'm reading nothing into what will be another slaughter tonight as it's friday and profit taking is reigning supreme. Worth a buy tonight if you're brave. 

Probably going to be very low volume/flatline next week until the fed announcement too, unless something happens over the weekend to set things off.


----------



## over9k (17 September 2022)

Alright lads, slaughter today as expected, got a cheeky buy of nrgu in at 401, monday will be telling.


----------



## over9k (17 September 2022)

Upped their dividend too...


----------



## Smurf1976 (17 September 2022)

over9k said:


> So while you all bicker like children, I'll ask, did anyone have the stones to buy yesterday?



I'm not seeing signs of a proper bottom yet so not for me.


----------



## qldfrog (17 September 2022)

‘Plummeting’ demand sees China-US shipping rates tumble despite typhoon delays
					

China’s Port of Shanghai and Ningbo-Zhoushan Port were forced to shut down this week due to Typhoon Muifa, but the cost of sending a 40-foot container to the west coast of the United States has still dropped by 10 per cent.




					www.scmp.com
				



So this is not a supply issue?
I think we are just at the start of a non transitory ROL., stagnation period.. often called a depression..
We are just one tactical nuke away..... And gosh, seems the forces behind the Biden puppet are really keen on it.
Hold on for the ride...


----------



## over9k (17 September 2022)

Smurf1976 said:


> I'm not seeing signs of a proper bottom yet so not for me.



What do you think those signs will look like?


----------



## frugal.rock (17 September 2022)

over9k said:


> What do you think those signs will look like?



Broken windscreen and glass everwhere, car on it's roof, branches and leaves everywhere, airbags deployed and all partially submerged in a swamp.
Just to reuse the car analogy.


----------



## waterbottle (17 September 2022)

over9k said:


> What do you think those signs will look like?




Me personally not too sure, but the fact that the market keeps dumping everytime someone mentions recession or fed funds rate >4% tells me that it hasn't been priced in yet, even though they were strong possibilities beginning at the start of the year. 
My guestimate is for NDX to hit 10000, which I think is possible given the Fed has yet to mention a slow down in rate hikes (and core CPI continues to be elevated).


----------



## over9k (17 September 2022)

frugal.rock said:


> Broken windscreen and glass everwhere, car on it's roof, branches and leaves everywhere, airbags deployed and all partially submerged in a swamp.
> Just to reuse the car analogy.



I'm going to go with no more rate hikes or at least much smaller ones. Once we see 50's and/or 25's we should be past the bottom.


----------



## waterbottle (17 September 2022)

over9k said:


> I'm going to go with no more rate hikes or at least much smaller ones. Once we see 50's and/or 25's we should be past the bottom.




Historically, bottoms seem to eventuate once the Fed nears the end of its rate *cutting*cycle, often in the middle of a recession...


----------



## over9k (17 September 2022)

True but these aren't normal times either. If not for the whole energy problem thing, most of this wouldn't be happening.


----------



## Smurf1976 (18 September 2022)

over9k said:


> What do you think those signs will look like?



At least some level of mainstream awareness of the decline and reporting on it at a minimum.

Plus some "end of the world" type thinking and actions. Central banks at least acknowledging the stock market decline would be one but preferably at least pausing rates if not outright cutting.

Investors visibly throwing in the towel with some sharp "just get me out" declines would be another.

Another is the old "It's time in the market, not timing the market....". When that statement looks to be correct then the next thing to look for is a top. When it can be shown to be incorrect we're nearer a bottom.

No measure is perfect in itself but I'm really not seeing any of them yet although, in terms of timing, I do think we could be getting fairly close.

A trigger event for a sharp plunge is another possibility. The market's ripe for one in my view, just needs a good enough excuse to come along. 

Regarding that latter point and possibilities - anything involving oil, gas and Russia and its allies and/or the war with Ukraine are the most obvious but not the only ones. If Joe Biden drops dead, and given age that's at least plausible, that could well be enough if some chaos follows.


----------



## qldfrog (18 September 2022)

Smurf1976 said:


> At least some level of mainstream awareness of the decline and reporting on it at a minimum.
> 
> Plus some "end of the world" type thinking and actions. Central banks at least acknowledging the stock market decline would be one but preferably at least pausing rates if not outright cutting.
> 
> ...



And o thought denile Biden dropping dead would see the market jump 😉
But seriously, when you see how quickly the BTD comes lately,we are not at the bottom.give me someting at or below the covid crash.with 10% inflation, that would be in real term a 20 % or so decrease from covid low and i would be happy to get in as investor


----------



## waterbottle (18 September 2022)

Might also start seeing a replay with a 2008-esque housing crash given the news about mortgage rates being at all time highs


----------



## Knobby22 (18 September 2022)

waterbottle said:


> Might also start seeing a replay with a 2008-esque housing crash given the news about mortgage rates being at all time highs



Or even the 87-89 crash. A bloodbath for property investors. If inflation stays strong, rates may need to go to 7-8%.


----------



## over9k (19 September 2022)

If/when china just give up on covid zero like the rest of us did we'll see energy demand soar again, as will the supply of a lot of the world's stuff, which will bring inflation of everything except energy back down. 

Pure guesswork but something tells me they're going to just throw in the towel at some point as the expense of lockdowns just becomes utterly unbearable/the rest of their economy goes to hell so much that they have no choice. 

So yeah, still holding my energy plays. China lockdowns lifting monday, fed meeting the next day, there's some positive signs for this week.


----------



## waterbottle (19 September 2022)

Ethereum broke through 1400 USD. Risk assets looking shaky....



over9k said:


> View attachment 146964
> 
> 
> If/when china just give up on covid zero like the rest of us did we'll see energy demand soar again, as will the supply of a lot of the world's stuff, which will bring inflation of everything except energy back down.
> ...




Don't know about this one. If the market is now (finally) pricing in a recession, we could see a new trading range being established for crude. RE: COVID in China, I think we'll have to wait until the 16th Oct for the CCCP plenary meeting. Either Xi gets another term and does whatever he wants, or he gets support from the rest of the party in case **** hits the fan.


----------



## over9k (19 September 2022)

waterbottle said:


> Ethereum broke through 1400 USD. Risk assets looking shaky....
> 
> 
> 
> Don't know about this one. If the market is now (finally) pricing in a recession, we could see a new trading range being established for crude. RE: COVID in China, I think we'll have to wait until the 16th Oct for the CCCP plenary meeting. Either Xi gets another term and does whatever he wants, or he gets support from the rest of the party in case **** hits the fan.



All major index futures are down but brent & wti are up as of this post.


----------



## waterbottle (19 September 2022)

over9k said:


> All major index futures are down but brent & wti are up as of this post.



Aye, ethereum pushing past 1300...


----------



## over9k (19 September 2022)

waterbottle said:


> Aye, ethereum pushing past 1300...



Risk asset. Irrelevant. Defensives have been the only play for months aside from that brief moment where inflation came in below estimates. 

Meanwhile, here's what's priced in already: 




Currently working on two 75's and a 50.


----------



## waterbottle (19 September 2022)

I guess crude, NDX and AUD must all fit into the 'risk category' tonight. Pre market looks crappola


----------



## over9k (19 September 2022)

Yeah today's just a pucker & hold into the fed meeting tomorrow. Nothing you can do but wait.


----------



## divs4ever (19 September 2022)

over9k said:


> All major index futures are down but brent & wti are up as of this post.



 oil is easy to explain ,  a big 'blow' in  Puerto Rico  ( maybe heading into the Gulf of Mexico  , but predicted to go up the US East Coast  ) AND a super-storm in Alaska  .. can't guarantee it will affect US oil production/refining  , but to me that looks the way to bet


----------



## divs4ever (19 September 2022)

divs4ever said:


> oil is easy to explain ,  a big 'blow' in  Puerto Rico  ( maybe heading into the Gulf of Mexico  , but predicted to go up the US East Coast  ) AND a super-storm in Alaska  .. can't guarantee it will affect US oil production/refining  , but to me that looks the way to bet



now i know these things are seasonal and only the intensity ( and damage ) varies  , BUT somebody decided to dig deep into their Strategic Oil Reserves this year  .. before these storms


----------



## over9k (20 September 2022)

So, wasn't such a bad night hey? Futures are all in the green too  

Let's see if the meeting sends things soaring again.


----------



## CityIndex (20 September 2022)

over9k said:


> So, wasn't such a bad night hey? Futures are all in the green too
> 
> Let's see if the meeting sends things soaring again.



Yup, decent bounce in the US after last week’s heavy sell-off. Although it is worth noting that volume on the S&P500 was down nearly 50% compared to trading on Friday.

All trading carries risk, but this could be a signal of a lack of conviction in this attempted rebound with traders likely waiting for the outcome of the FOMC Meeting before making bigger bets on direction.


----------



## waterbottle (20 September 2022)

I don't think there are any market moving data releases due next week either, so it's very possible that the Fed meeting may lead to a rally. 
Markets still pricing in a 75bp hike though, may get a dump if they go 100bp.


----------



## moXJO (20 September 2022)

There's a lot of things that need to be revalued down. I'd be shocked to see things go back to the norm.


----------



## qldfrog (20 September 2022)

CityIndex said:


> Yup, decent bounce in the US after last week’s heavy sell-off. Although it is worth noting that volume on the S&P500 was down nearly 50% compared to trading on Friday.
> 
> All trading carries risk, but this could be a signal of a lack of conviction in this attempted rebound with traders likely waiting for the outcome of the FOMC Meeting before making bigger bets on direction.



Last night was all over the place, ended up but was down when i woke up mid night..not an up trend that is for sure.
Good opportunity to buy shorts if you are game enough


----------



## CityIndex (20 September 2022)

qldfrog said:


> Last night was all over the place, ended up but was down when i woke up mid night..not an up trend that is for sure.



Yup- not a very convincing bounce at all. Although seesawing price action and additional volatility is to be expected given the uncertainty heading into the Fed meeting.


----------



## waterbottle (20 September 2022)

10 yr US bonds now at highest in past 11 years. 
Swedes shock with a 100bps rise. 
Hmmmm


----------



## waterbottle (21 September 2022)

Just saw Putin's announcement... black Swan?


----------



## mullokintyre (21 September 2022)

waterbottle said:


> 10 yr US bonds now at highest in past 11 years.
> Swedes shock with a 100bps rise.
> Hmmmm



Nah, a black swan event  catches everyone  by surprise and no one forecast it.
Putins latest move has been predicted as one of his options  by a few people.
mick


----------



## qldfrog (21 September 2022)

waterbottle said:


> Just saw Putin's announcement... black Swan?



Let's see what he said, not tactical nuke yet?


----------



## qldfrog (21 September 2022)

qldfrog said:


> Let's see what he said, not tactical nuke yet?



Not yet


----------



## over9k (21 September 2022)

Energy plays all screaming premarket, fed decision out 2hrs before the close, looking good.


----------



## over9k (21 September 2022)

_"What about Russian nukes?"


It's a question I hear in some form or another almost daily while I'm travelling to speak and meet with clients, or in response to my newsletters. My attitude most days is "well, what about them?"


Let's consider Russia's strategic aims in Ukraine. Ukraine, as a buffer state, only continues to perform as such if it's under Russian control. If not, well... your enemies, perceived or in reality, can flood the space with arms and combatants and use it as a launching pad to strike at the heart of the Russian state. More important, Russia needs to regain control of Ukraine so that if (read: when) it's deemed necessary, Russian forces can move into places like Poland and Romania and occupy the critical geographies used to move troops and materiel overland to invade Russia.


So called "tactical," or small-scale nuclear weapons aren't great for holding territory. Nuked territory isn't great for stationing troops. And long-range ICBMs lobbed at the US or London or Paris are even worse for holding territory, or keeping Russian Presidents and a socio-politico-economic mafia elite alive. This is especially true if we consider the state of Russia's nuclear arsenal. There are some arguments that even if Russian troops and armored transports and planes and tanks and fuel trucks and MREs and intelligence and cyber and logistical capabilities are at levels far below what the world was expecting, they're still keeping the crown jewels of Russian defense--the nuclear arsenal--is top operating condition. 


I'm less than convinced. The only thing more foolhardy and full of risk than a cornered, losing Russian president trying to fire nukes willy-nilly? The same-such president pushing the red button and having the world witness a failure to launch.


_


----------



## over9k (22 September 2022)

And the first domino falls...


----------



## over9k (22 September 2022)

waterbottle said:


> Just saw Putin's announcement... black Swan?






mullokintyre said:


> Nah, a black swan event  catches everyone  by surprise and no one forecast it.
> Putins latest move has been predicted as one of his options  by a few people.
> mick


----------



## Telamelo (22 September 2022)

Just announced.. the Fed has hiked rates by 75 basis points


----------



## qldfrog (22 September 2022)

Telamelo said:


> Just announced.. the Fed has hiked rates by 75 basis points



And surprisingly the market went from green to red!
What where they thinking?
75bp is as low as it could be...
Weird


----------



## over9k (22 September 2022)

qldfrog said:


> And surprisingly the market went from green to red!
> What where they thinking?
> 75bp is as low as it could be...
> Weird



Possibly wanted more. Fixed income had priced a roughly 1/3 shot of 100.


----------



## over9k (22 September 2022)

Now they're mooning lads


----------



## qldfrog (22 September 2022)

qldfrog said:


> And surprisingly the market went from green to red!
> What where they thinking?
> 75bp is as low as it could be...
> Weird



Spoke too soon now market is surging...
Terribly choppy seas as @Captain_Chaza would say...
Crazy to be honest


----------



## over9k (22 September 2022)

over9k said:


> To further this post, last time it was a debate between 75 and 100 they delivered with 100 and markets absolutely screamed on the day/got exactly what they wanted. Food for thought.



I've made worse calls. 

SOXL absolutely screaming


----------



## over9k (22 September 2022)

Look at that graph after 2pm. Dude's comments are just absolutely whipsawing things. 

He isn't wrong about housing though. Much stormier seas going to occur here


----------



## qldfrog (22 September 2022)

qldfrog said:


> Spoke too soon now market is surging...
> Terribly choppy seas as @Captain_Chaza would say...
> Crazy to be honest



And now down again so far today has swinged between 3810 and 3910 100pts on 3900 starts being significant:  above 2%....
All that does not inspire confidence in obviously the market nor the Fed strategy.
What do you think?


----------



## Smurf1976 (22 September 2022)

qldfrog said:


> All that does not inspire confidence in obviously the market nor the Fed strategy.
> What do you think?



Just my two cents but gut feel is we're a lot closer to the end of this rate raising cycle than the mainstream expectation.

I can't prove that with data (and I always prefer data....) but we've already had significant inflation and we've already had a rise in interest rates - that's got to be sapping consumers' spending power and the sustainable demand for physical volumes of goods and services surely?

Just my perception but I think ultimately the Fed's and other central banks with ongoing tightening will bring about a proper hard landing economically simply due to the pace at which rates have been tightened. As with anything, a rapid rate of change tends to bring about overshoot. Once that happens, once there's an undeniable recession, that's the end of pricing power for practically anything other than bona fide scarce things eg gas.

Associated with that I see unbridled blue sky optimism at the moment. News media and government are both proclaiming permanently low unemployment and so on - that will be wrong is my expectation. Very wrong.   

A bit of crystal ball gazing there, not backed with hard evidence, so take it for what it is. Time will tell.


----------



## qldfrog (22 September 2022)

Smurf1976 said:


> Just my two cents but gut feel is we're a lot closer to the end of this rate raising cycle than the mainstream expectation.
> 
> I can't prove that with data (and I always prefer data....) but we've already had significant inflation and we've already had a rise in interest rates - that's got to be sapping consumers' spending power and the sustainable demand for physical volumes of goods and services surely?
> 
> ...



Was actually thinking about getting bonds soon.. knowing that the fiat currency could go zero..but a limited amount just in case i am wrong on main play of PM


----------



## over9k (22 September 2022)

Smurf1976 said:


> Just my two cents but gut feel is we're a lot closer to the end of this rate raising cycle than the mainstream expectation.
> 
> I can't prove that with data (and I always prefer data....) but we've already had significant inflation and we've already had a rise in interest rates - that's got to be sapping consumers' spending power and the sustainable demand for physical volumes of goods and services surely?
> 
> ...



We didn't get the oversize rate hike either so that's actually kind of encouraging. 

As previously mentioned, the next two are scheduled to be 75 & 50 so that would suggest we're close to the peak. If the 50's actually a 75 and/or we get some more big moves after the 50 that's scheduled then that will be telling.


----------



## Telamelo (22 September 2022)

US market's finished over -1.7% lower across the board (future's indicate another -1.7% drop tonight).. I'm anticipating we'll have a santa rally at some stage leading up to xmas & consumer spending won't slow down anytime soon imo 

Most people spend way beyond their means over the next few month's.. so can't see inflation abating anytime soon imo


----------



## divs4ever (22 September 2022)

qldfrog said:


> And surprisingly the market went from green to red!
> What where they thinking?
> 75bp is as low as it could be...
> Weird



 am guessing news elsewhere gazumped the Fed decision  ( which was in line with consensus  as far as i could tell )

 maybe there is an extra devil in the detail


----------



## divs4ever (22 September 2022)

qldfrog said:


> Was actually thinking about getting bonds soon.. knowing that the fiat currency could go zero..but a limited amount just in case i am wrong on main play of PM



better you than me

 remember there is a possibility  SOME bonds will converting to perpetual ( never get your capital back )

 now back in 2011 to 2016  ( and maybe even until 2020 ) that wasn't a bad place to be  , but NOW inflation has taken  hold  .. that capital is liable to shrink away

 PS that is sovereign bonds  .. carefully selected corporate bonds might still be unloved gems


----------



## InsvestoBoy (22 September 2022)

blep


----------



## waterbottle (22 September 2022)

over9k said:


> View attachment 147089
> 
> 
> Look at that graph after 2pm. Dude's comments are just absolutely whipsawing things.
> ...




Priced in since 2008. Dunno why the market keeps shitting itself like this....


----------



## over9k (22 September 2022)

qldfrog said:


> Was actually thinking about getting bonds soon.. knowing that the fiat currency could go zero..but a limited amount just in case i am wrong on main play of PM



USD's at a near record high frog


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## waterbottle (23 September 2022)

Putin Forces All Energy Workers To Register For Military Draft | OilPrice.com
					

The Russian Energy Ministry has demanded that all its male employees register for the largest military conscription since WWII, although executives and senior management were exempt




					oilprice.com
				




Hmmmmm


----------



## over9k (23 September 2022)

Musing:


We had a "shock" inflation number come in below estimates, so risk/growth plays all ran hard. Then the next one came in "shock" ABOVE estimates. So everything plummeted. We also had things run hard on the previous jumbo rate hike announcement as big increase = belief that fed is "on the ball" so to speak.

We then got another 75 point rise from the fed. Problem is, with the last estimate coming in unexpectedly above estimates, trust that the fed's got inflation back under control is, well, gone. Hence why the forecast 75 point increase from the fed didn't send things soaring again this time because, well, we're now in a situation where faith in the fed has vanished.

This means that with reference to the question of where the bottom is going to be/where the uncertainty will reduce/where faith that the steerers of the ship will have gotten it back under control, we have a bit of a dilemma. Because the last inflation numbers missed estimates, markets no longer believe that the fed's forecast increases/forward guidance are adequate and/or accurate.

In other words, they're not convinced that the forecast increases are going to get things under control - hence the lack of bounce in the markets when the latest increase was exactly as forecast.

So this means we're going to see one of two things:

One: The fed sticks to its guidance and markets continue their lack of faith in it being adequate.
Two: The guidance is revised and larger increases are forecast.

The problem we have is that even if the next numbers come in at forecast or even below them, markets aren't going to trust it. They're now going to want to see more than one inflation number come in where they want it to be before they start to believe that the fed's got the brakes pressed hard enough.

So either A: The fed sticks with its current guidance and things keep dropping because markets have lost faith or B: The fed increases its hikes in its forward guidance, effectively admitting that it's dropped the ball here but is at least letting us know that it KNOWS it's dropped the ball.

Both of these things are bad, but perception is reality here and we have to wonder which of these two options the market is going to PERCEIVE as worse - a fed that appears to be in denial, or a fed that admits it's cocked up and is going to jack rates up even higher. The only way I see the first one not being the worse of the two is if the next inflation numbers come in back under estimates again but just one instance of that is not going to be enough to reassure markets that another 75 & a 50 are going to be adequate.

If the fed sticks with its current forecast increases and another batch of data comes in above estimates it'll A: be a bloodbath and B: force the fed's hand to go even higher.

But if the next data comes in BELOW estimates, we can now no longer expect markets to run in response. With investor faith being rattled, the best case scenario there is, IMHO, equities stay flat.

This means that under the current expected rate hike path, our two outcomes are either flatline or another drop.

Under scenario two, if the fed revises its guidance and forecasts bigger and/or longer increases, that too will push equities lower from a confirmation of inflation being worse than expected and simple p/e perspective, meaning that either way, the only way we see some more green in markets is when we get at least two inflation datasets in below estimates - even if the next one's below estimates again, that's not going to cut it.

This means that the bottom now becomes the point just before we get a SECOND batch of inflation data where we want it to be.

As for where that point will be and what the fed does in response, that's much more difficult to say. This last inflation data that was above estimates didn't convince them to raise rates by more than forecast so I have to wonder if another one will too. What I suspect will happen is that we'll see an extension of the larger hikes rather than the forecast rollover, i.e the next three hikes will be 75's rather than one more 75 and then 50's from there.

To be honest, I also can't see the fed reducing its rate hike increases until it sees at least two datasets in below estimates either, so the bottom line here is that there's really no fed action/circumstance from now until we see a meaningful trend change to suggest any kind of bottom has been found yet.


Bottom line: With faith/confidence shaken, it doesn't actually matter what the fed does from here, we aren't going to see a rebound in anything except energy until we see a lot more proof of/lot more datasets coming in below estimates of, the inflation boogeyman being tamed.

So yeah, bear market until we start to see smaller rate hike increases and it would appear that those reductions are going to be farther in the future now.

End result for us is that the basic play hasn't changed, it's just been stretched out/delayed. But remember, everything I just spoke about is entirely demand side stuff. Almost nothing's changed (or at least, changed for the better) on the supply side.


----------



## over9k (23 September 2022)

Meanwhile, the longer end of the yield curve just keeps increasing as markets start to think that this energy driven inflation (supply) problem might actually have some legs to it...


----------



## over9k (23 September 2022)

over9k said:


> Musing:
> 
> 
> We had a "shock" inflation number come in below estimates, so risk/growth plays all ran hard. Then the next one came in "shock" ABOVE estimates. So everything plummeted. We also had things run hard on the previous jumbo rate hike announcement as big increase = belief that fed is "on the ball" so to speak.
> ...



As a second order (more important) question stemming from this is that if I'm right, have markets figured this out yet and/or when will they figure it out...


----------



## divs4ever (23 September 2022)

waterbottle said:


> Putin Forces All Energy Workers To Register For Military Draft | OilPrice.com
> 
> 
> The Russian Energy Ministry has demanded that all its male employees register for the largest military conscription since WWII, although executives and senior management were exempt
> ...



 maybe they are heading for a trip to Syria  ,  Ukraine is not devoid of resources  but  'ALL ' ( within certain guidelines )  sounds like some overkill  ... now Venezuela might be grateful for some help as well


----------



## divs4ever (23 September 2022)

one bit of gossip  from the recent SCO was the willingness for Pakistan  to have some Russian pipelines come to ( and maybe through ) their country   won't happen next week  but maybe Putin is going to really have an oil( and gas ) war ( and make it about distribution )


----------



## Smurf1976 (23 September 2022)

divs4ever said:


> one bit of gossip  from the recent SCO was the willingness for Pakistan  to have some Russian pipelines come to ( and maybe through ) their country   won't happen next week  but maybe Putin is going to really have an oil( and gas ) war ( and make it about distribution )



The decision to specifically target energy sector employees for military service is the biggest story of the lot in my view.

If you're going to take effectively your entire energy sector workforce and send them off to war well it's a given that your energy production's going to fall in a heap rather spectacularly.


----------



## qldfrog (23 September 2022)

Smurf1976 said:


> The decision to specifically target energy sector employees for military service is the biggest story of the lot in my view.
> 
> If you're going to take effectively your entire energy sector workforce and send them off to war well it's a given that your energy production's going to fall in a heap rather spectacularly.



The employees of the ministry do not pump oil or gas out,but what it gives is an excuse to slow and limit permits exports etc etc... that's what it is in my view.
More sorry EU but that gas you need ,well it could take a while... unless...


----------



## Smurf1976 (23 September 2022)

qldfrog said:


> The employees of the ministry do not pump oil or gas out



This raises some questions. From the reports I've seen it's:



> "The Russian Energy Ministry has asked nearly *100% of Russia’s male energy sector employees* to present themselves at recruitment offices, according to a Ministry letter shared by Gaz Bayushka."



Emphasis mine. From: https://oilprice.com/Latest-Energy-...y-Workers-To-Register-For-Military-Draft.html

I take that to mean anyone and everyone who works in any kind of fossil fuel extraction, electricity generation plus associated pipelines and networks. At least that's what the "energy sector" is in Western terminology. Plus in some cases directly related things such as trains hauling coal are included.

Does Russia have some far narrower definition?


----------



## divs4ever (23 September 2022)

Smurf1976 said:


> The decision to specifically target energy sector employees for military service is the biggest story of the lot in my view.
> 
> If you're going to take effectively your entire energy sector workforce and send them off to war well it's a given that your energy production's going to fall in a heap rather spectacularly.



 i would imagine  they would trim the currently employed and hover up  all the healthy unemployed  energy workers 

 for  example   in the west a large amount of excess gas is being flared   ( that would have normally been sold to Europe )

 would they start capping those wells  ( or maybe start making extra storage tanks  but bomb-proof ones )

 of course  if I was running things  i would have quietly scooped them up  and trained them for sabotage missions  ..

 but they MIGHT be moved into the liberated areas  and start repairing  all the damaged infrastructure


----------



## qldfrog (23 September 2022)

Smurf1976 said:


> This raises some questions. From the reports I've seen it's:
> 
> 
> Emphasis mine. From: https://oilprice.com/Latest-Energy-...y-Workers-To-Register-For-Military-Draft.html
> ...



yes that is different, I read somewhere else 100% from his ministry..very different, 
The above would put indicate a will (not being forced) to close the sector.So higher price and shortages ahead


----------



## Dona Ferentes (23 September 2022)

Fed chairman concedes that the need to defeat inflation is so urgent that US interest rates will keep rising at the expense of growth and jobs. And has used the R word.

_... everything else is noise _


----------



## Smurf1976 (23 September 2022)

qldfrog said:


> The above would put indicate a will (not being forced) to close the sector.So higher price and shortages ahead



That’s my thinking too.

Of all industries one could possibly take workers away from, energy’s about the worst choice along with farming and critical transport.

To make it the actual first choice reeks of an intent to cripple production willingly.


----------



## waterbottle (23 September 2022)

Dona Ferentes said:


> Fed chairman concedes that the need to defeat inflation is so urgent that US interest rates will keep rising at the expense of growth and jobs. And has used the R word.
> 
> _... everything else is noise _




About time. 

We knew this was coming since June.


----------



## divs4ever (23 September 2022)

The wealth-destroying impact of inflation never went away









						The wealth-destroying impact of inflation never went away
					

Since 1980, inflation eroded 81% of purchasing power. $100,000 then can now buy only $19,000 worth of goods and servies. The longer money must last, the more we need ‘growth’ assets with inflation protection.




					www.firstlinks.com.au


----------



## over9k (23 September 2022)

over9k said:


> View attachment 146918
> 
> 
> As I said previously, parity is on the way.






Still dropping


----------



## over9k (23 September 2022)

GOING WELL


----------



## Smurf1976 (23 September 2022)

Dona Ferentes said:


> Fed chairman concedes that the need to defeat inflation is so urgent that US interest rates will keep rising at the expense of growth and jobs. And has used the R word.
> 
> _... everything else is noise _



Rarely in life does one receive a message so clear and blatant as the one being given by the Fed right now.

It's not a question of if the Fed makes a mistake and brings about a hard landing. Rather, they're being extremely clear that a hard landing is exactly what's coming and it'll be no mistake when it occurs.

Central banks might not be able to fix the supply side directly but they can achieve the end result of bringing supply and demand back to balance if they kill demand in a big enough way.


----------



## over9k (23 September 2022)

Smurf1976 said:


> Rarely in life does one receive a message so clear and blatant as the one being given by the Fed right now.
> 
> It's not a question of if the Fed makes a mistake and brings about a hard landing. Rather, they're being extremely clear that a hard landing is exactly what's coming and it'll be no mistake when it occurs.
> 
> Central banks might not be able to fix the supply side directly but they can achieve the end result of bringing supply and demand back to balance if they kill demand in a big enough way.



Meanwhile, the GBP just dropped 2% just on the day, AUD's down 1.2%, U.S futures are all in the toilet and once again it is energy that's the only thing that's even going to be standing.


----------



## over9k (23 September 2022)

Smurf1976 said:


> The decision to specifically target energy sector employees for military service is the biggest story of the lot in my view.
> 
> If you're going to take effectively your entire energy sector workforce and send them off to war well it's a given that your energy production's going to fall in a heap rather spectacularly.



I've been thinking about this. There has to be a reason. We (and the russians themselves) know that their chief problem has been logistics and the ukrainians know it too. 

Have they conscripted energy personnel for the precise purpose of improving their logistical (fuelling) situation?


----------



## over9k (23 September 2022)

USA the best of a bad bunch


----------



## waterbottle (23 September 2022)

Crude just broke through $80, not sure if energy has anymore legs to stand on 

Looks like markets are finally pricing in recession


----------



## waterbottle (23 September 2022)

Meanwhile in Europe.... 









						London Banks Prepare For Possible Blackouts | OilPrice.com
					

London banks are preparing their contingency electricity supply plans in case of a blackout this winter




					oilprice.com


----------



## over9k (24 September 2022)

over9k said:


> Meanwhile, the GBP just dropped 2% just on the day, AUD's down 1.2%, U.S futures are all in the toilet and once again it is energy that's the only thing that's even going to be standing.



Make that 3%:


----------



## over9k (24 September 2022)

And it's... a... slaughter. 

But is it the bottom. Hmmm.


----------



## mullokintyre (24 September 2022)

over9k said:


> And it's... a... slaughter.
> 
> But is it the bottom. Hmmm.



Nah, we aint seen nothin yet.
The Black night has only cut a hand off. 
need arms and legs yet.
Mick


----------



## over9k (24 September 2022)

mullokintyre said:


> Nah, we aint seen nothin yet.
> The Black night has only cut a hand off.
> need arms and legs yet.
> Mick



Seasonality to contend with too. I usually have a rule that any double-digit moves are bought or sold on. Hmmm. 

The fact that it's friday and damn near anything could happen over the weekend (putin) might mean a holdoff until monday.


----------



## moXJO (24 September 2022)

Meh.
 I'm buying a few things. Everyone is talking doom (and although I agree)  I'll run counter. 

I do believe prices need to tank to a new normal though.


----------



## frugal.rock (24 September 2022)

Back the truck up on NRGU... $312.13


----------



## over9k (24 September 2022)

frugal.rock said:


> Back the truck up on NRGU... $312.13



BOIL's moved 10% just on the day too (down to 50, then up to 55, then back down again, now at 58). Hence my previous comments about the itchy trigger finger.


----------



## over9k (24 September 2022)

frugal.rock said:


> Back the truck up on NRGU... $312.13



307 now. previous bottom was 242 before a massive rebound. Kind of tempted to throw a few buys in with some now and then some at 287, 267, 247 etc...


----------



## over9k (24 September 2022)

Meanwhile, any cash you had sitting in USD has run 1.7% just on the day


----------



## over9k (24 September 2022)

frugal.rock said:


> Back the truck up on NRGU... $312.13



Just cracked 300 rock, buy some with me you pussy


----------



## over9k (24 September 2022)

Alright so the day (and week) has been a slaughter but check this out: 




The demand side's been crushed but anything with a supply side problem is still well & truly worth keeping an eye on. USD's also been the play so as long as you'd at least converted your cash over to USD, even if you hadn't traded it you'd still have made a pretty penny just sitting on the cash lately


----------



## over9k (24 September 2022)

Oh and in case anyone's in any kind of doubt about which port is the best/worst in this particular storm:


----------



## divs4ever (24 September 2022)

over9k said:


> Oh and in case anyone's in any kind of doubt about which port is the best/worst in this particular storm:
> 
> View attachment 147171



 but would YOU buy ( UK gilts )

 the new UK PM looks like a lightweight to me  , unless Farage storms back into contention  , the UK is looking like a rudderless ship  in a hurricane


----------



## noirua (24 September 2022)

UK Budget sends the £ sterling crashing nearly 4% and signals spiralling interest rates by The Bank Of England as they attempt to control inflation. The moves are precisely the opposite to countries in Europe: https://news.sky.com/story/mini-bud...ents-from-the-chancellor-at-a-glance-12703687



GB£ v US$------------------------------------------------GB£ v AU$


----------



## over9k (24 September 2022)

divs4ever said:


> but would YOU buy ( UK gilts )
> 
> the new UK PM looks like a lightweight to me  , unless Farage storms back into contention  , the UK is looking like a rudderless ship  in a hurricane



Exactly


----------



## waterbottle (24 September 2022)

It seems the UK government's policies are running counter to the BoE. Not sure how tax cuts wouldn't be pro-inflationary.... We just need this inflation beast stomped on ASAP instead of a drawn out torture


----------



## frugal.rock (24 September 2022)

over9k said:


> Just cracked 300 rock, buy some with me you pussy



I backed up the other truck at $302.13... I now have a hurricane to divert into the gulf of Mexico. 
Everyone face towards Perth and start blowiin


----------



## over9k (24 September 2022)

frugal.rock said:


> I backed up the other truck at $302.13... I now have a hurricane to divert into the gulf of Mexico.
> Everyone face towards Perth and start blowiin



3LNI is my degen play on monday


----------



## divs4ever (24 September 2022)

waterbottle said:


> It seems the UK government's policies are running counter to the BoE. Not sure how tax cuts wouldn't be pro-inflationary.... We just need this inflation beast stomped on ASAP instead of a drawn out torture



 nobody there ( in parliament ) heavy enough to stomp an ant  , let alone an economic whirlwind 

 all you need is Chuckie to exert his ( climatic ) influence on BP to continue the rout


----------



## sptrawler (24 September 2022)

noirua said:


> UK Budget sends the £ sterling crashing nearly 4% and signals spiralling interest rates by The Bank Of England as they attempt to control inflation. The moves are precisely the opposite to countries in Europe: https://news.sky.com/story/mini-bud...ents-from-the-chancellor-at-a-glance-12703687
> View attachment 147178
> View attachment 147179
> 
> GB£ v US$------------------------------------------------GB£ v AU



Sometimes a hard landing is what is required, constantly shielding the population from the reality of market forces and realities, isn't that good for mature attitudes and decisions.


----------



## Dona Ferentes (24 September 2022)

_from an American blog_:

*"Shrinkflation*,” when companies keep prices the same but reduce the quantity sold.

Folgers container: 51 ounces to 43.5
Nescafe Azera Americano coffee: 100 grams to 90
Kleenex: 65 tissues to 60
Walmart Paper Towels: 168 sheets per roll to 120
Crest 3D White Radiant Mint toothpaste: 4.1 to 3.8 ounces
Dorito's: 9.75 ounces to 9.25
Most “Party Size” Chips: 18 to 15.5 ounces
Chobani Flips yogurts: 5.3 ounces to 4.5
Burger King chicken nuggets: 10 to 8
Bounty Triples: 165 sheets to 147
Tillamook ice cream: 56 ounces to 48
Hefty's mega pack: 90 bags to 80
Earth's Best Organic Sunny Day: 8 bars per box to 7
Vim dish soap (India): 155 grams to 135
Cottonelle Ultra Clean Care toilet paper: 340 sheets per roll to 312
Pantene Pro-V Curl Perfection conditioner: 12 ounces to 10.4
Royal Canin's cans of cat food: 5.9 ounces to 5.1
Angel Soft: 425 sheets per roll to 320


----------



## Garpal Gumnut (24 September 2022)

I must admit that I feel most sorry for people like me. 

gg


----------



## divs4ever (24 September 2022)

sptrawler said:


> Sometimes a hard landing is what is required, constantly shielding the population from the reality of market forces and realities, isn't that good for mature attitudes and decisions.



 the trouble is they have been missing targets  for so long it is liable to be like one of those Russian  hyper-sonic hitting the landing strip  vertically  missiles  hoping the milkshake  cup on the runway will soften the impact 

 and mature attitudes ?? are you trying to get us  cancelled ??


----------



## over9k (25 September 2022)

hmmm...


----------



## moXJO (25 September 2022)

over9k said:


> View attachment 147207
> View attachment 147208
> 
> 
> hmmm...



I wonder if there will be any reflection on the depths of their stupidity that got them into this position in the first place.


----------



## over9k (25 September 2022)

moXJO said:


> I wonder if there will be any reflection on the depths of their stupidity that got them into this position in the first place.



Have you ever met a leftist?


----------



## moXJO (25 September 2022)

over9k said:


> Have you ever met a leftist?



I know right. 
Unfortunately this type of thinking seems to have infected everywhere.


----------



## divs4ever (25 September 2022)

moXJO said:


> I wonder if there will be any reflection on the depths of their stupidity that got them into this position in the first place.



 YES , but it will be banned on You-Tube , Face-Book , Twitter  , Instagram  , school text-books  and mostly ignored on mainstream media  ( except as an excuse to get you to buy Treasury Bonds )


----------



## divs4ever (25 September 2022)

over9k said:


> Have you ever met a leftist?



 several   , i grew  up in in mostly housing commission/war service housing area  , and even more exasperating  are the devout Greenies 

 lucky for me  i have been a contrarian and opportunist all my life  , so could study human nature dispassionately


----------



## over9k (25 September 2022)

Meanwhile:


----------



## frugal.rock (25 September 2022)

moXJO said:


> I know right.



You had me bloody well delve this out of the memory with that comment.... 😘


----------



## waterbottle (25 September 2022)

over9k said:


> Meanwhile:
> 
> View attachment 147252



Redifining the Russian troll


----------



## Smurf1976 (26 September 2022)

divs4ever said:


> Have you ever met a leftist?



Many.

I've also met people from the Right.

On the question of energy one side told me they were stupid and I've no reason to doubt that this is the case. The other side didn't need to tell me since it was painfully obvious.

I'll leave everyone to work out which is which.

When it comes to investing, always be extremely cautious when politics is involved. Always.


----------



## divs4ever (26 September 2022)

Smurf1976 said:


> Many.
> 
> I've also met people from the Right.
> 
> ...



 on reason i avoided uranium stocks in general  and LYC in particular   , now that may come back to bite ( especially in the case of LYC  , but i made the decision for better or worse )

 coal on the other hand i jumped into carefully selected  but pariah stocks ( back then )  , in coal miners .. so far so good  ( but i am not likely to be around in 40 years time  , so it might be a case of a good time , not a long time )


----------



## over9k (26 September 2022)

The question I think he was asking was, how bad do things have to get before a lot of people admit something they believe to be impossible, i.e that they are wrong? 

As I said, if you've ever met a leftist, they will deny it to the nail. Literally.


----------



## waterbottle (26 September 2022)

Interesting discussion. It takes a particular type of person to admit that they're wrong and unfortunately, politics tends to attract idealogues (from both sides).
Investing forums do have a selection bias in that visitors are probably right-leaning.


----------



## moXJO (26 September 2022)

over9k said:


> The question I think he was asking was, how bad do things have to get before a lot of people admit something they believe to be impossible, i.e that they are wrong?
> 
> As I said, if you've ever met a leftist, they will deny it to the nail. Literally.



Realistically we are talking about "woke" ignorant leftists. Although it all seems a bit like religious fever and hive minded.
One big problem is they seem to influence government pretty easily. 

You look how far the recent covid panic went and its easy to see how carried away they can get. 

Plenty of dumb righties but they tend to stick to "freedom" and "less government control". Which isn't really a bad thing.

Getting inflation under control has already produced some idiotic bleating. So it's a worrying time. Not sure if people genuinely understand how bad inflation can be.


----------



## over9k (26 September 2022)

moXJO said:


> Realistically we are talking about "woke" ignorant leftists. Although it all seems a bit like religious fever and hive minded.
> One big problem is they seem to influence government pretty easily.
> 
> You look how far the recent covid panic went and its easy to see how carried away they can get.
> ...



Even if they do, they will never understand or even if they do understand, admit why.


----------



## over9k (26 September 2022)

Meanwhile, futures are deep into the red but wti, brent, natgas etc are all well into the green


----------



## over9k (26 September 2022)

over9k said:


> 3LNI is my degen play on monday


----------



## over9k (26 September 2022)

Worth the time to watch.


----------



## moXJO (26 September 2022)

over9k said:


> Worth the time to watch.




An hour...
Can you sum it up for me in one sentence?


----------



## over9k (26 September 2022)

moXJO said:


> An hour...
> Can you sum it up for me in one sentence?



Things are going to get much worse before they get better, USA the best of a bad bunch (but not "good").


----------



## moXJO (26 September 2022)

over9k said:


> Things are going to get much worse before they get better, USA the best of a bad bunch (but not "good").



US midterms will be telling. If Republicans gain control of house or senate, then it's short the f out of everything. 

Anyone looking at any interesting UK stocks with the price of gbp dropping?


----------



## moXJO (26 September 2022)

Another thing is that I don't see much at a discount plainly for the fact everything overran past sensible price targets.

Yeah stuff is down. But imo it was simply "splash cash" prices that won't see highs again without some more stimulus. Stimulus ain't happening during inflation either.


----------



## moXJO (27 September 2022)

Anyone have any Intel on China undergoing a military coup, or is it bs?

Li Qiaoming apparently taking top spot with Xi about to be "house arrested".


----------



## over9k (27 September 2022)

I've heard nothing. 

Meanwhile:


----------



## over9k (27 September 2022)

And the long end keeps moving. 10 year up another 20 points just on the day. China STILL under overwhelming lockdown. Volume low across the board which tells us everyone are just holding their breath.


----------



## over9k (27 September 2022)

I've noticed that gas price surges have preceded oil price surges almost every time this year


----------



## over9k (27 September 2022)

p/e slamming everything, p/e being driven by energy supply problems.


----------



## divs4ever (27 September 2022)

moXJO said:


> Anyone have any Intel on China undergoing a military coup, or is it bs?
> 
> Li Qiaoming apparently taking top spot with Xi about to be "house arrested".




 one commentator i listen to ( who has family in diplomatic circles )  thinks it is bunkum ( or worse deliberate propaganda )

 however  time will tell , China might take such an actual opportunity for a purge  ( Xi has already had some minor examples of them   .. having been on the receiving end twice in his early years )

  ( given Xi's family background , one might wonder whether the military would back Xi  )


----------



## waterbottle (27 September 2022)

Fighting words from the BoE in light of GBP dropping to parity and mortgage lenders halting issuance of new debt. Wow. Might see currency wars GBP v USD. 









						Statement from the Governor of the Bank of England
					

The Bank is monitoring developments in financial markets very closely in light of the significant repricing of financial assets.




					www.bankofengland.co.uk
				












						Mortgage lenders halt some deals after pound falls
					

Two lenders, Virgin Money and Skipton, say they will stop mortgage offers to new customers.



					www.bbc.com


----------



## frugal.rock (28 September 2022)




----------



## over9k (28 September 2022)

Housing starts at 650k vs 500k estimated too


----------



## Smurf1976 (28 September 2022)

waterbottle said:


> mortgage lenders halting issuance of new debt.



That one may turn out to be extremely important in due course. 

If it continues then, when someone looks back at this however far down the track, it may well mark a tipping point for much broader consequences.


----------



## frugal.rock (28 September 2022)

over9k said:


> Housing starts at 650k vs 500k estimated too



Unfortunately for the sentiment lift (consumer confidence) and housing numbers, there's too many entities out there try to fulfil their own doom and gloom prophecies on the equities of things

With the way commodity prices are going, forget the affects sought after by raising interest rates, inflation will get rained in somewhat by prices falling purely because many inputs costs are falling. How long that takes from here I couldn't say, a few months at least though.

Not sure when the world will wake up to the US manipulation (price suppression & currency domination)) of nearly every market. I guess it's helping the majority of people's overall, but gee it's a big stick their playing with. 🤔


----------



## qldfrog (28 September 2022)

frugal.rock said:


> View attachment 147381



As i read it, it means the feds have to carry on raising the rates..so bullish USD indeed and bearish markets


----------



## over9k (28 September 2022)

over9k said:


> View attachment 147331
> 
> 
> I've noticed that gas price surges have preceded oil price surges almost every time this year



5% run on NRGU & GUSH the next day.


----------



## over9k (28 September 2022)

frugal.rock said:


> Unfortunately for the sentiment lift (consumer confidence) and housing numbers, there's too many entities out there try to fulfil their own doom and gloom prophecies on the equities of things
> 
> With the way commodity prices are going, forget the affects sought after by raising interest rates, inflation will get rained in somewhat by prices falling purely because many inputs costs are falling. How long that takes from here I couldn't say, a few months at least though.
> 
> Not sure when the world will wake up to the US manipulation (price suppression & currency domination)) of nearly every market. I guess it's helping the majority of people's overall, but gee it's a big stick their playing with. 🤔



The rest of the world can't do a damn thing about it and they know it.


----------



## qldfrog (28 September 2022)

As the markets digest the destruction of the gas pipeline, after the they did it, no they did..it is just putting a no way back on
Putin may have done it as it now means that Europe is dead economically even if Putin get killed or replaced.
Or the US as it is now a no way back situation
And as they are ready to fight Russia to the last Ukrainian/European.....
It is a very strong sign for energy price, and so inflation


----------



## qldfrog (28 September 2022)

Today is the day Australia discovers that AUD has lost nearly 20% against USD, and what the green economy means when we all go to the petrol station.


----------



## over9k (28 September 2022)

Three leaks just discovered on nord stream. Sabotage suspected. BIG news. Will probably be all over the normie news if you turn the tv on today. Russia already talking about switching them off.


----------



## over9k (28 September 2022)




----------



## waterbottle (28 September 2022)

European Energy Security Faces New Risks With Nord Stream Explosions | OilPrice.com
					

A number of new energy security risks have emerged in North West Europe, just at a moment when gas prices and volatility in European gas markets were falling




					oilprice.com


----------



## over9k (28 September 2022)

Credit spreads and liquidity are really starting to crunch too. Markets continue to get more and more worried. I'm contemplating a short on the banks.


----------



## over9k (28 September 2022)

Looks like the danes were the first on the scene.


----------



## waterbottle (28 September 2022)

Let's see what the response is from the RBA next week with AUD falling and BoE talking up a surprise hike. 

How long until the nordstream pipeline is fixed?


----------



## qldfrog (28 September 2022)

waterbottle said:


> Let's see what the response is from the RBA next week with AUD falling and BoE talking up a surprise hike.
> 
> How long until the nordstream pipeline is fixed?



Never...
Not by Russia and blown underwater in 3 points so no easy fix.


----------



## waterbottle (28 September 2022)

qldfrog said:


> Never...
> Not by Russia and blown underwater in 3 points so no easy fix.



Meanwhile SPR approaching 50% capacity, with 20mil draw downs per month. 422mil barrels, with 209mil sweet. At this rate they'd be able to go for another 9-10 months. 





__





						Loading...
					





					www.spr.doe.gov
				




Maybe Europe will pull off a rapid green transition


----------



## waterbottle (28 September 2022)

Is the US entering a recession? According to a Fed paper that looked at early indicators, the answer is no. 









						us recession what key economic indicators say
					

The majority of economic indicators that the NBER Business Cycle Dating Committee tracks to identify U.S. recessions are still showing growth. How have these measures behaved around past recessions?




					www.stlouisfed.org


----------



## wayneL (28 September 2022)

Pro tip:

Never believe the Fed, G'mint, or CNN.

Vis a vis, the US is already in recession.

YMMV


----------



## over9k (28 September 2022)

So has anyone else been playing BOIL or am I the only one?


----------



## divs4ever (28 September 2022)

waterbottle said:


> Let's see what the response is from the RBA next week with AUD falling and BoE talking up a surprise hike.
> 
> How long until the nordstream pipeline is fixed?



probably NEVER , the EU  are stealing assets and complaining about paying  , Russia has no incentive to repair them  , there are willing/paying customers to the east and south east 

 some wanted to  divorce from Russia energy  , i am sure Russia will take that attitude into consideration  ( a hint might be Putin  will talk to the Saudis but not to Macron )

 however i did hear an estimate of 5 years , but have no idea if that commentator  was informed  or just a talking head


----------



## Smurf1976 (28 September 2022)

waterbottle said:


> How long until the nordstream pipeline is fixed?



In my view never.

There's long (decades) been an expectation by many that Russia and the Middle Eastern countries would in due course pivot away from oil / gas exports to the West and would instead first prioritise their own (increasing) internal needs and secondly do deals with the likes of China.

We're now at that point I think.


----------



## waterbottle (28 September 2022)

over9k said:


> So has anyone else been playing BOIL or am I the only one?




I am not boilsy enough to


----------



## waterbottle (28 September 2022)

BoE now entering the bonds market, seeks to purchase long-date gilts until 14 Oct. 









						Bank of England announces gilt market operation
					

In line with its financial stability objective, the Bank of England stands ready to restore market functioning and reduce any risks from contagion to credit conditions for UK households and businesses.




					www.bankofengland.co.uk


----------



## InsvestoBoy (28 September 2022)

Smurf1976 said:


> In my view never.
> 
> There's long (decades) been an expectation by many that Russia and the Middle Eastern countries would in due course pivot away from oil / gas exports to the West and would instead first prioritise their own (increasing) internal needs and secondly do deals with the likes of China.
> 
> We're now at that point I think.




I can't remember where I read it or heard it but it doesn't sound like there is even remotely close to enough pipeline capacity for Russia to export to China what it was to the EU for at least 5-10 years it takes to build those pipes.

Just googling "russia can't export gas to china" I found this for example:


> The 16.5 billion cubic metres of gas exported by Russia to China last year is less than 10% of the 170 billion cubic metres of natural gas sent by Russia to the Europmean market.
> Since less than 10 percent of Russia’s gas capacity is liquefied natural gas, so Russian gas exports remain reliant on a system of fixed pipelines carrying piped gas. The vast majority of Russia’s pipelines flow toward Europe; those pipelines, which originate in western Russia, are not connectable to a separate nascent network of pipelines that link Eastern Siberia to Asia, which contains only 10 percent of the capacity of the European pipeline network.
> Also, the Asian pipeline projects currently under construction are still years away from becoming operational, and financing of these costly gas pipeline projects also now puts Russia at a significant disadvantage.











						Why Russia can't bank on energy exports to India, China - Times of India
					

India Business News: While flows to Asia have accounted for over half of Russia's total crude flows since Vladimir Putin ordered the invasion of Ukraine, shipments to Asia




					timesofindia.indiatimes.com
				




John Hempton of Bronte Capital shared this on Twitter a little while ago: https://jpt.spe.org/reservoir-commentary-potential-implications-long-term-shut-ins-reservoir

Very possible that the Russians could seriously ruin their reservoirs and struggle to restart them due to sanctions blocking access to machinery/expertise.

What energy exporters want to do (now) and what they can do (now) are very different things.


----------



## Smurf1976 (29 September 2022)

InsvestoBoy said:


> What energy exporters want to do (now) and what they can do (now) are very different things.



Agreed.

Thing is however there was a deal done to build more pipeline capacity Russia - China just prior to the Russian invasion of Ukraine according to media reports at the time. Just prior as in days prior.

So regardless of the short term, by the time anyone in Europe's willing to buy gas from the Russians I expect they'll have that pipe built.

That's about the time Australian LNG exporters suddenly find they need to be speaking German not Chinese.


----------



## over9k (29 September 2022)

InsvestoBoy said:


> I can't remember where I read it or heard it but it doesn't sound like there is even remotely close to enough pipeline capacity for Russia to export to China what it was to the EU for at least 5-10 years it takes to build those pipes.



Correct. They're currently running oil/gas in on rail and it's nowhere near enough. They're boned.


----------



## over9k (29 September 2022)

waterbottle said:


> I am not boilsy enough to






25% in a day. Not in BOIL as BOIL's an aggregate of others, but you get the idea.


----------



## Smurf1976 (29 September 2022)

In regard to the discussion about gas:





__





						Subscribe to read | Financial Times
					

News, analysis and comment from the Financial Times, the worldʼs leading global business publication




					www.ft.com
				






> Power of Siberia 2 will connect Siberian fields that supply Europe — which has pledged to end its dependence on Russia’s state-backed Gazprom — to China, where demand for gas is rising.




The key being the bit about connecting gas fields which traditionally supplied Europe.



> Alexei Miller, Gazprom chief, has suggested China will become its cornerstone customer in the future.




Whilst this is an assumption on my part without proof, I expect that gas and other things (notably oil and coal) supplied to China from Russia will have two fundamental characteristics which differentiate it from the traditional approach.

The currency used will be whatever the two agree on but realistically it'll be Russian or Chinese, it sure won't be any Western currency. 

It will not be for sale to others at any price unless the buyer, China, deems it surplus to requirements and chooses to sell in which case it'll likely be offered to "friendly" countries first. In this case see point above regarding acceptable currencies.

The real game here as I see it is a geostrategic and financial one, it's not simply an energy supply arrangement. It's about taking resources off the market, locking them up under long term deals, and removing Western currencies from the equation entirely. That's my interpretation of it at least.


----------



## qldfrog (29 September 2022)

over9k said:


> Correct. They're currently running oil/gas in on rail and it's nowhere near enough. They're boned.



Building infrastructure China way is not following the same timeline than in the West. China self interest is to make sure Russia holds,but does not benefit too much .
Ukrainians and Russians..which btw are the same culture and hated by the Western états-majors as commies 40y after the wall fall, will be cannon fodders for a long while.
But why should anyone care as yhe world will be powered by the sun and windmills ROL
I just wonder who is they in they are boned.
Got the feeling it will not be just the Russians


----------



## waterbottle (29 September 2022)

10 yr bonds pulling back. Bear rally?


----------



## over9k (29 September 2022)

Smurf1976 said:


> In regard to the discussion about gas:
> 
> 
> 
> ...



Yeah we're entering a bifurcated world in this way. It's kind of like the cold war all over again except over energy. The one big difference is that things like international trade, oil pipelines etc can't just be resecured and/or built quickly. 

The one thing I would point out is that the americans had an active interest in containing the soviets before whereas now they largely couldn't give a f**k. Russia's of no threat to them at all. Neither is china or anyone else for that matter. 

This is in stark contrast to how the japanese, koreans, poles, germans and so on feel about the situation though.


----------



## over9k (29 September 2022)

waterbottle said:


> 10 yr bonds pulling back. Bear rally?



Speculation that BOE intervention will (especially if it works) trigger similiar actions from other central banks. We'll see.


----------



## wayneL (29 September 2022)

over9k said:


> Speculation that BOE intervention will (especially if it works) trigger similiar actions from other central banks. We'll see.



It certainly has the aroma of intervention.


----------



## over9k (29 September 2022)

wayneL said:


> It certainly has the aroma of intervention.



"Unlimited" buying.


----------



## CityIndex (29 September 2022)

waterbottle said:


> 10 yr bonds pulling back. Bear rally?



The US Dollar can typically be used as a decent gauge of global sentiment, so it wasn't surprising to see the overnight rally on Wall Street coincide with a pullback in DXY. 

However, with this stemming from the BOE's intervention sparking a decline in bond yields it will be interesting to see if this one just a one-off bounce3 for the time being, or if sentiment is rebounding and this is move is actually sustainable over the near-term.


----------



## Dona Ferentes (29 September 2022)

Smurf1976 said:


> In regard to the discussion about gas.
> 
> Whilst this is an assumption on my part without proof, I expect that gas and other things (notably oil and coal) supplied to China from Russia will have two fundamental characteristics which differentiate it from the traditional approach.
> 
> ...



I still think a Fiat currency is better than a Lada one


----------



## mullokintyre (29 September 2022)

The annual inflation rate for August comes in at 6.8%.
This is down from the 7% in July.
Good news we think inflation has peaked.
Not so fast.
From ABC News


> The slight fall in the annual inflation rate from July to August was mainly due to a decrease in prices for automotive fuel," he said.
> 
> In the year to August, the data show inflation for food and non-alcoholic beverages increased by 9.3 per cent.
> 
> ...



With the addition of fuel excise back into fuel, there is a 28 cents a litre increase from now until the next time they dump it.
So it will be difficult to see other items decreasing sufficiently to overcome the fuel excise inflationary boost.
The ABC blotted their copy book with the last statement of the report.



> It comes after the Reserve Bank began cutting interest rates in May.



I could have sworn they started increasing rates since May.
Mick


----------



## over9k (29 September 2022)

GBP's well on its way to parity and AUD at 50 U.S cents will probably be the next domino.


----------



## frugal.rock (29 September 2022)

Dona Ferentes said:


> I still think a Fiat currency is better than a Lada one



The comparison is irregular, as 
Lada would Niva be a currency.  🧐


----------



## waterbottle (29 September 2022)

mullokintyre said:


> The annual inflation rate for August comes in at 6.8%.
> This is down from the 7% in July.
> Good news we think inflation has peaked.
> Not so fast.
> ...





As is happening in he US with the change in core CPI being higher than the headline. Seems to be a global phenomenon....


----------



## InsvestoBoy (29 September 2022)

over9k said:


> GBP's well on its way to parity and AUD at 50 U.S cents will probably be the next domino.




Anything is possible but the dollar sure does seem overbought here.

Nothing goes up or down in a straight line.


----------



## over9k (30 September 2022)

InsvestoBoy said:


> Anything is possible but the dollar sure does seem overbought here.
> 
> Nothing goes up or down in a straight line.



What are you basing this on?


----------



## over9k (30 September 2022)

over9k said:


> Just cracked 300 rock, buy some with me you pussy



@frugal.rock 301 buy looking good now


----------



## InsvestoBoy (30 September 2022)

over9k said:


> What are you basing this on?



🧐 if you peer close enough you can see it


----------



## over9k (30 September 2022)

InsvestoBoy said:


> 🧐 if you peer close enough you can see it
> View attachment 147490



Technicals? In this environment?


----------



## waterbottle (30 September 2022)

We could start seeing stimulatory responses from other CBs eg. BoE. Alot of commentators think that the Fed has already gone too far. Japanese Gov.  now starting to buy yen too. 
A high USD makes inflation much more difficult to control for all importers, so its inevitable.


----------



## CityIndex (30 September 2022)

waterbottle said:


> A high USD makes inflation much more difficult to control for all importers, so its inevitable



This is definitely something that could begin to play a part in central bank policies over the coming months. 

While there is also a case to be made that the Fed has reached peak hawkishness, they have been adamant in sticking with tighter policy until inflation comes down. So we could possibly see some central banks explore other avenues to stimulate their currencies and tackle the issue of "importing inflation".


----------



## mullokintyre (30 September 2022)

I wonder how many of the members here are old enough to remember the GFC, the Tech crash, the Twin Towers pullback, the big crash of 87, the oil crisis of the 70's etc etc etc.
If you are willing, history is a great teacher, and it also demonstrates the charlatans of the world.
The people giving advice, tips, sure fire money winners, 5 tech stocks that will make you a millionair etc etc, are NOT  doing this to help others make money.
They are doing it to make money for themselves.
Its important to always keep that in mind.
History has shown that CB's of almost every persuasion have in the past been late to react, both on the upside and the downside.
Overshoot is probably not something that is taught in economics these days.
But I am planning my near term  investing trading around this principal.
Although there are signs that some economies are slowing down, it does not mean that inflation is also slowing down.
I expect that signs of inflation will be with us for some time, as the effects of so many of the levers that have been pulled are yet to  show up in inflation figures. The UK  and China are moving down the path of more QE, and the Biden administration is running deficits like forever.
These only fuel inflation , not ease it.
The push for a Universal basic Income will become an avalanche if the dems  remain in control of both houses of use admin after the November mid terms..
That will require more QE, not less.
I fully expect that most economies will be pushed into recession as the economies contract, and only then will most CB's start to ease rates, and they will ease them to far the other way.
I do  not have a time frame for any of this,  I have lost faith in modelling of most  systems, they have too many unknown variables.
I have been slowly easing into the 3% coupon bonds, the GSBE47.
As they don't mature till 2047, i can think more long term.
They have fallen as much as 20% from their issue price, so it really means that the 80 bucks purchase price gives me an effective yield of 3.5%
Which is  still better than the 2.5% i get on my "high Interest account " within NABTRADE.
If the RBA keeps increasing rates, they will hopefully fall further in price, so I will be able average down.
When the recession hits, and the RBA is forced  to  decrease rates, the price will rise  again.
I will still be getting an effective 3.5%  interest on my bonds, plus I may have capital gains.
These bonds hit 145 back in 2020, when interest rates were so low and before the market started pricing in rate hikes.
there are other Bonds such as GSBG33 which offer a coupon yield of 4.5%, but although they have come off in price, are still 10% above the face value, so it brings the  effective yield down to 4 .1% with less chance of the CG.
Mick


----------



## waterbottle (30 September 2022)

UK GDP of 0.2%. Has been pretty much flat for the past few qtrs....


----------



## waterbottle (30 September 2022)

Euro inflation now 10%! Above market consensus of 9.7% and despite oil prices being below pre - invasion prices. 

Is it possible to see a situation where the Euro zone ends up in a hyperinflation situation and the rest of the world ends up manages to control inflation? What would that world be like?


----------



## JohnDe (30 September 2022)

Worth a watch.



> Charlie Munger (former Chairman of The Daily Journal Corporation and Vice Chairman at Berkshire Hathaway) has predicted a recession based on the high inflation in 2022. But how do we invest in the resulting stock market crash? Is Warren Buffett style value investing the way to go? And what are Charlie's tips to help us make money in during the recession?


----------



## over9k (30 September 2022)

waterbottle said:


> Euro inflation now 10%! Above market consensus of 9.7% and despite oil prices being below pre - invasion prices.
> 
> Is it possible to see a situation where the Euro zone ends up in a hyperinflation situation and the rest of the world ends up manages to control inflation? What would that world be like?



Even more/basically all russian energy getting cut off.


----------



## waterbottle (2 October 2022)

BoE pivots
Government of Japan pivots
Fed pivot?






						October 3, 2022 -- October 03, 2022 -- Closed Board Meeting
					

October 03, 2022 -- Closed Board Meeting



					www.federalreserve.gov


----------



## divs4ever (3 October 2022)

JohnDe said:


> Worth a watch.




 will this be a 'recession ' ( i suspect we have been in a recession for moths already ) 

 i am trying to work out a strategy for something much worse , maybe something so bad a new definition will be needed 

 what would normally be good strategies  , are being strangled and hamstrung  by political policies


----------



## over9k (3 October 2022)

Opec looking like cutting 1m barrels/day, oil up $3 in response.


----------



## frugal.rock (3 October 2022)

Anyone for chicken soup?
Winner, winner...




🐔


----------



## frugal.rock (3 October 2022)

Orange juice getting squeeeezed up.
It's the talk of the town...


----------



## over9k (3 October 2022)

NRGU is up 10% just premarket


----------



## frugal.rock (3 October 2022)

Make that 11%
Curse you daylight savings


----------



## over9k (3 October 2022)

If we actually sell the news, the sell day will be on the 5th when opec confirm the production cut. Right now/tonight is the "buy the rumour" bit everyone else are doing and we already bought last week


----------



## qldfrog (4 October 2022)

frugal.rock said:


> Orange juice getting squeeeezed up.
> It's the talk of the town...
> 
> View attachment 147628



You are definitely trading exotic markets FR
With winter coming i thought OJ would be down 😉


----------



## waterbottle (4 October 2022)

The UK government bends 









						UK scraps tax cut for wealthy that sparked market turmoil
					

BIRMINGHAM, England (AP) — The U.K. government on Monday dropped plans to cut income tax for top earners, part of a package of unfunded cuts unveiled only days ago that sparked turmoil on financial markets  and sent the pound to record lows.




					apnews.com


----------



## waterbottle (4 October 2022)

And it looks like nordstream is back... 









						The Nord Stream pipelines have stopped leaking, the Danish Energy Agency says.
					

Both European and Russian leaders have said that ruptures discovered undersea were an act of sabotage.




					www.nytimes.com


----------



## qldfrog (4 October 2022)

waterbottle said:


> And it looks like nordstream is back...
> 
> 
> 
> ...



Are you kidding? Not sure
The cracked open pipe is now emptied of the gas it was filled with .
Will probably never  be useable used..ever
5000 tankers minimum to do round trip with US Qatar or Australia to replace this.And gas terminals too.
Germany and so europe is done and dusted.
Thank you USA.
We might get cheaper Mercs and BMWs, Audis  und sauerkraut 🙄


----------



## divs4ever (4 October 2022)

over9k said:


> Opec looking like cutting 1m barrels/day, oil up $3 in response.



many OPEC members were   pushing out ( near ) maximum production  so should be no surprise , maxxed out plant  , breaks sooner  , a slight reduction now  beats a big disruption  further down the line IMO 

 there are solutions but then the US would have to relax the suppression of oil trade elsewhere ( after all they brought chaos to several of them )


----------



## divs4ever (4 October 2022)

waterbottle said:


> And it looks like nordstream is back...
> 
> 
> 
> ...



 would Russia actually bother repairing it , the EU are reluctant to pay , seizing assets , looking to wean off Russian Energy  AND obviously unable to protect the pipeline against hostile parties 

 however it might be a useful troll of EU energy policy  ( remember the turbine repair delays  NS 1 MIGHT have been back to 50% with enough working turbines )


----------



## divs4ever (4 October 2022)

qldfrog said:


> Are you kidding? Not sure
> The cracked open pipe is now emptied of the gas it was filled with .
> Will probably never  be useable used..ever
> 5000 tankers minimum to do round trip with US Qatar or Australia to replace this.And gas terminals too.
> ...



but only ones made in 2021 and earlier  ( or assembled in India )


----------



## waterbottle (4 October 2022)

qldfrog said:


> Are you kidding? Not sure
> The cracked open pipe is now emptied of the gas it was filled with .
> Will probably never  be useable used..ever
> 5000 tankers minimum to do round trip with US Qatar or Australia to replace this.And gas terminals too.
> ...




Here's another saying leaks have stopped.... 



			Redirect Notice


----------



## qldfrog (4 October 2022)

waterbottle said:


> Here's another saying leaks have stopped....
> 
> 
> 
> Redirect Notice



the leaks have not stopped, the gas is not escaping anymore, 
a bit like saying your tire is not pierced anymore since it is now flat and has no air escaping anymore
->because there is no gas anymore;
there has been no gas pushed in these for weeks, i was just the leftover in the pipes which bubbled out..now over..the pipes remain cracked open and destroyed


----------



## InsvestoBoy (4 October 2022)

qldfrog said:


> Are you kidding? Not sure
> The cracked open pipe is now emptied of the gas it was filled with .
> Will probably never  be useable used..ever
> 5000 tankers minimum to do round trip with US Qatar or Australia to replace this.And gas terminals too.
> ...




Posts like this make me desperately want to go and buy German/EU stocks.


----------



## InsvestoBoy (4 October 2022)

Great chart from @LizAnnSonders (Chief Investment Strategist for Schwab) on Twitter

US inflation YoY comparisons are now crazy hard. Even +0.2% MoM every month is going to have CPI at 2% by mid '23. Anything less than that could be staring down a deflationary barrel.




Inflation swaps etc are pricing this in already.

Fed needs to back way off right now.


----------



## Smurf1976 (4 October 2022)

divs4ever said:


> many OPEC members were pushing out ( near ) maximum production so should be no surprise , maxxed out plant , breaks sooner , a slight reduction now beats a big disruption further down the line IMO



I'm not personally making the claim but some would go a step further and question whether OPEC was ever really able to sustain it in the first place?

That is, has some present "production" really just been withdrawal from storage? If so then it has to end at some point.


----------



## over9k (4 October 2022)

InsvestoBoy said:


> Great chart from @LizAnnSonders (Chief Investment Strategist for Schwab) on Twitter
> 
> US inflation YoY comparisons are now crazy hard. Even +0.2% MoM every month is going to have CPI at 2% by mid '23. Anything less than that could be staring down a deflationary barrel.
> 
> ...



RBA just did exactly that with 25 points rather than 50 and markets were NOT happy. 

AUS isn't USA though, USD running is helping the yanks enormously. Fixed income's still priced something like 62 points, then 48, then 22 at the next 3 fed meetings. 

Also worth thinking about how much monetary policy has NOT been coordinated with fiscal policy lately (I'm looking at you, united kingdom) and there's still things like strategic oil reserves to either continue emptying and/or then fill back up and so on. Not to mention how much of the U.S energy supply the europeans are trying to build the infrastructure to get right as we speak. That transfer of demand is going to effect domestic U.S prices significantly once the facilities to receive it actually come online.

Not saying you're wrong but there's a fair few more balls in the air other than rates at the moment.


----------



## InsvestoBoy (4 October 2022)

over9k said:


> RBA just did exactly that with 25 points rather than 50 and markets were NOT happy.



🤔

markets sure seemed happy about it to me





over9k said:


> Not saying you're wrong but there's a fair few more balls in the air other than rates at the moment.




I'm not really sure what you mean.

Mechanically, CPI is going to go down without something truly crazy happening to push monthly prints consistently into the 0.3-0.5% range. That's just a fact of how YoY comps work, look at the chart.

If something truly crazy happens, like oil gapping to $200-300, is raising rates really going to be the right reaction? They will be knifing the economy into a crisis. I just don't see it.


----------



## mullokintyre (4 October 2022)

qldfrog said:


> Are you kidding? Not sure
> The cracked open pipe is now emptied of the gas it was filled with .
> Will probably never  be useable used..ever
> 5000 tankers minimum to do round trip with US Qatar or Australia to replace this.And gas terminals too.
> ...



The  Nordstream 2 pipe was filled with gas to keep it pressurised, but it was not  flowing anywhere. ( see Reuters )
The Russians had already turned off supplies flowing via Nordstream 1  ( see BBC News. )
To make matters a little more difficult, the charter rates  for bulk LNG ships has gone ballsistic.
From Zero hedge


> Spot charter rates for the global liquefied natural gas (LNG) carriers are soaring due to a shortage of vessels.
> 
> LNG shipping rates have been dramatically impacted by energy supply chain disruption due to the Russian invasion of Ukraine. The LNG shipping sector is booming even more as rates near record highs following the bombing of the Nord Stream pipeline system last week.
> 
> ...






So if I were a buyer of LNG, I would be looking for the supplier that is closest to me geographicslly, espeislly if every day I charter costs me 400k.
Mick


----------



## over9k (4 October 2022)

InsvestoBoy said:


> 🤔
> 
> markets sure seemed happy about it to me
> View attachment 147678
> ...



Look at how the aud has moved. But were you specifically talking year on year?

Reference tipping into recession or what have you, Yellen & Powell have both made endless comments about doing "whatever it takes" to get things back to 2%. But I was talking a longer timeline than just year on year, it wouldn't surprise me at all to see them get below the 2% target and then say something along the lines of keeping it a bit "too low" to get things back closer to long term trend.

But what I was getting at is that we still have the pivot of european energy demand over to U.S suppliers yet to occur (facilities not finished), china lockdowns pummeling demand there, and the U.S strategic reserve being depleted. Any one of these three factors is a pretty major player in inflation and all three ARE going to reverse at one point or another. Whether this will be soon enough to effect YoY numbers remains to be seen but all three WILL occur.

So yeah, there's three pretty big factors other than just the U.S demand side to consider here, and I haven't even mentioned seasonality...


----------



## Gunnerguy (4 October 2022)

InsvestoBoy said:


> Great chart from @LizAnnSonders (Chief Investment Strategist for Schwab) on Twitter
> 
> US inflation YoY comparisons are now crazy hard. Even +0.2% MoM every month is going to have CPI at 2% by mid '23. Anything less than that could be staring down a deflationary barrel.
> 
> ...



This is absolute bs. Astonished that Schwab do not understand basic maths. Or are they just lying to get IR’s down.
Basically .....
1. Inflation is based on the last 12 months prints.
2 In May 2023, if we have had 6 monthly prints of zero then .....
3. Dec 2022 to May 2023 would be zero.
4. The remaining 6 months would be Dec 2022 back to July 2022.
5. Jul 2022, August 2022, and Sept 2022 inflation were all above zero.
6. So mathematically May 2023 inflation at zero is IMPOSSIBLE unless we have actual printed DEFLATION of about 3%-4%. That is consistently -0.5% per month from now fir 6 months.

(Almost) Mathematically impossible inflation to be 0% in May 2023.

2% inflation by May 2023 only possible if we have  200 bps IR minimum ..... NOW.

Gunnerguy


----------



## Smurf1976 (4 October 2022)

over9k said:


> we still have the pivot of european energy demand over to U.S suppliers yet to occur (facilities not finished)



We have the US LNG export facilities to be built and then, once that's done, the immediate next problem is obtaining sufficient gas to feed them with.

The gas situation won't be resolved quickly.


----------



## over9k (5 October 2022)

Smurf1976 said:


> We have the US LNG export facilities to be built and then, once that's done, the immediate next problem is obtaining sufficient gas to feed them with.
> 
> The gas situation won't be resolved quickly.



The yanks can get the gas out of the ground no problem, they're getting so much of it that they're having to flare it to get rid of it at the moment. 

As you said, it's moving it that's the tricky part. Even if they get the import facilities sorted, as waterbottle showed before, there's just not enough tankers in the world to actually move enough of it. 

This leaves just two options: Build and man more tankers (at enormous expense on top of the already huge expense of building more import facilities), or find a substitute. 

The thing to note is that either way, the demand transfers from russia to everywhere else, and at a long term/strategic level, the U.S is the most secure/reliable supplier of everyone else. 

Considering just how expensive/difficult it would actually be to create what is essentially a 24/7 running flotilla of LNG ships crossing the atlantic, unless we see a nordstream type LNG pipeline built either off the continental shelf and across the entire atlantic seabed or under the arctic (yeah right), simple economics is going to see them pivot to substitutes. They'll use gas for all the things they have no other choice with and everything else will move to some kind of alternative. 

And if that alternative is american, then U.S inflation will surge.


----------



## divs4ever (5 October 2022)

qldfrog said:


> the leaks have not stopped, the gas is not escaping anymore,
> a bit like saying your tire is not pierced anymore since it is now flat and has no air escaping anymore
> ->because there is no gas anymore;
> there has been no gas pushed in these for weeks, i was just the leftover in the pipes which bubbled out..now over..the pipes remain cracked open and destroyed



 the pipes would have been pressurized  to keep out condensation  ( and encroaching seawater ) and also to reduce the chance of the pipelines collapsing/crushing  .. now the pipe in exposed ( internally ) to seawater which is corrosive  and other unwanted  debris ( sand , concrete , seaweed , and whatever )

 but the question still is .. since the EU has now proven itself as an ( deliberately ) unreliable  customer , will Russia rush to repair  , and supply ( if it was me i would be firing in a claim to my insurer calling it a complete write-off   50% cash-back would have to better than maybe they will pay for the gas this time )

 AND since there are turbine delays  , even when the pipeline repairs are complete  how many turbines will be ready to assist gas-flow 

 i would be ringing Modi and Xi  and sussing out joint venture possibilities ( making sure Siemens doesn't supply a single part no matter how trivial )


----------



## divs4ever (5 October 2022)

over9k said:


> The yanks can get the gas out of the ground no problem, they're getting so much of it that they're having to flare it to get rid of it at the moment.
> 
> As you said, it's moving it that's the tricky part. Even if they get the import facilities sorted, as waterbottle showed before, there's just not enough tankers in the world to actually move enough of it.
> 
> ...



 getting that to gas to Europe will be a BIG problem  ( both US logistics  and EU logistics  issues ) did anyone notice how many boat ( trips )  it would take to replace that Russian gas  .. but on the upside both the US and EU are used to dealing with debt-pigs


----------



## divs4ever (5 October 2022)

Gunnerguy said:


> 2% inflation by May 2023 only possible if we have 200 bps IR minimum ..... NOW.



 of course it is possible , all you do  is change the definition of 'inflation' ( just like they did with 'recession'  and they will do with 'depression'  when needed )

 mathematics is irrelevant in clown-world


----------



## Smurf1976 (5 October 2022)

over9k said:


> The yanks can get the gas out of the ground no problem, they're getting so much of it that they're having to flare it to get rid of it at the moment.



They can get gas out of the ground and are doing so but the whole logistical chain to:

Increase gas production

Increase pipeline capacity within the US to move that gas to LNG facilities

Build and operate the LNG facilities

Build and operate enough LNG ships

Build and operate the import terminals in Europe

On a scale sufficient to replace Russian gas imports by pipeline is truly massive. It's going to be bottleneck after bottleneck there is my expectation. Fix one problem then it's oh yeah, there's another issue. Someday yes but it'll be a while is my expectation.


----------



## moXJO (5 October 2022)

Dow has been on fire. Wish I went all in the other week. 

Surely this isn't the end of inflation. People are still  too ready to throw cash in at any given moment. Need to see a behavioural change before fed will stop.


----------



## waterbottle (5 October 2022)

moXJO said:


> Dow has been on fire. Wish I went all in the other week.
> 
> Surely this isn't the end of inflation. People are still  too ready to throw cash in at any given moment. Need to see a behavioural change before fed will stop.




It's fed pivot bet









						Fed’s Williams sees steep decline in inflation ahead
					

Cooling global demand and steady improvements in supply should result in falling rates of inflation for goods over the next year, New York Fed President John Williams said Monday.  “These factors should contribute to inflation declining to about 3% next year,” Williams said in a speech to the...




					finance.yahoo.com


----------



## qldfrog (5 October 2022)

moXJO said:


> Dow has been on fire. Wish I went all in the other week.
> 
> Surely this isn't the end of inflation. People are still  too ready to throw cash in at any given moment. Need to see a behavioural change before fed will stop.



My view is the pivot bet is justified as this pivot is not realistically based on inflation being over or as you stated behaviour change, but on the risk of total collapse of financial giants aka CS..but not only...
Economic collapse takes time,werks ,months, financial collapse is done and dusted in a couple of hours.


----------



## InsvestoBoy (5 October 2022)

Gunnerguy said:


> This is absolute bs. Astonished that Schwab do not understand basic maths. Or are they just lying to get IR’s down.
> Basically .....
> 1. Inflation is based on the last 12 months prints.
> 2 In May 2023, if we have had 6 monthly prints of zero then .....
> ...




Sir, you are the astonishing one.

To make so brazenly incorrect a statement without even bothering to understand the mechanics of either inflation or mathematics.

The 6 steps you have listed are nonsense and honestly make me feel sad for the world.

I have worked it out in a spreadsheet this morning for your benefit and the benefit of the other turnips who liked your post.

May 22 - Aug 22 data is from https://fred.stlouisfed.org/series/CPIAUCSL

Since this seems difficult for your astonishing brain to understand, let's take the easiest one where you can just use the same number:

If the Aug 22 CPI value is 295.62 and the constant MoM print for the next 12 months is 0% each month, what is the YoY value of CPI in Aug 23? *It's 0%.* The current CPI YoY would mechanically decline from 8% to 0% without a single deflationary MoM print.

YoY you can see we would approach very close to 0% by June 22 at 0% MoM prints, don't even have to wait until August.

So, no, you do not need anything resembling what you said to reach deflation.




How depressing this is.


----------



## InsvestoBoy (5 October 2022)

Gunnerguy said:


> Or are they just lying to get IR’s down.




Just shaking my head at the kind of reality someone must live in to believe this is even a possibility.


----------



## Gunnerguy (5 October 2022)

InsvestoBoy said:


> Just shaking my head at the kind of reality someone must live in to believe this is even a possibility.



InvestoBoy,
Lets agree to disagree. Attack the opinion not the indevidual.
I stand by my post. IR needs to be higher to get Inflation down. Shops are still busy, unemployment is low, Christmas spending I believe will not be a 'horrifically bad retail results', maybe 'soft'. AUD is sinking, Aussies will likely travel less (abroad), and thus 'stay at home and spend'. Yes savings rates are down, I think 12% down to about 5%. Many still on fixed rates and IR's not affecting them.
Recession may be coming, but currently I don't really think thehigher IR's are going to have very much impact on holding back inflation.

Your May to August numbers suggest in 4 months inflation has increased by about 1.4%, which YOY would be 4.2%.
I don't believe the CPI figures in your spreadsheet are representative.

TLDR: Inflation at 0% by August 2023 will only happen if there is a catastrophic decline in the Australian/Global economy, evan Global  War/Pandemic, or IR at 7% and mortgages at 10%.

Please disagree politely. It's disappointing that so very many discussions on ASF just end up arguments and slagging.
In my many years on ASF I have never 'Ignore'd' anyone.

Gunnerguy


----------



## againsthegrain (5 October 2022)

Gunnerguy said:


> InvestoBoy,
> Lets agree to disagree. Attack the opinion not the indevidual.
> I stand by my post. IR needs to be higher to get Inflation down. Shops are still busy, unemployment is low, Christmas spending I believe will not be a 'horrifically bad retail results', maybe 'soft'. AUD is sinking, Aussies will likely travel less (abroad), and thus 'stay at home and spend'. Yes savings rates are down, I think 12% down to about 5%. Many still on fixed rates and IR's not affecting them.
> Recession may be coming, but currently I don't really think thehigher IR's are going to have very much impact on holding back inflation.
> ...



Job figures are looking good by the way, and Aussies don't give up easy.  Australia as a overall country and society has not seen any major social upheavals. Down under when the going gets tough we get proactive about it and find a second job or pick up more hours. 
Look at France as a example,  their standard of living is high and compare to any east euro country they are gods,  yet quick to riot burn and loot when they hit a bump on the road. 

I think we will be fine, there will be no mass defaults no blood in the street,  just some hard yakka all around and plenty room to move rates higher.  Somebody think about the pensioners and savers!


----------



## waterbottle (5 October 2022)

Job openings were down in the US, probably contributed to the bump overnight....






Meanwhile NZ central bank hikes by 50bps for a fifth time.... Phil Lowe please explain?


----------



## mullokintyre (5 October 2022)

Meanwhile in Sydney...


Would not fancy towing my van through Sydney in the future.
Will these rates have an effect on inflatoon?
Would be classed as a heavy vehicle.
Pretty soon there will be significant numbers of vehicles  rat running thru side streets and feeder roads  to avoid tolls.
Mick


----------



## divs4ever (5 October 2022)

moXJO said:


> Dow has been on fire. Wish I went all in the other week.
> 
> Surely this isn't the end of inflation. People are still  too ready to throw cash in at any given moment. Need to see a behavioural change before fed will stop.



 i suspect this ISN'T the top of inflation as the public feels it  , but i see definitions changing , measuring tools being re-calibrated ( to deceive )

 maybe they aren't throwing ' but using it quickly while it still has some purchasing power ( and the banks will let you withdraw it )

 other CBs are already intervening ( some think the Fed is a heartbeat away from a pivot )


----------



## moXJO (5 October 2022)

divs4ever said:


> i suspect this ISN'T the top of inflation as the public feels it  , but i see definitions changing , measuring tools being re-calibrated ( to deceive )
> 
> maybe they aren't throwing ' but using it quickly while it still has some purchasing power ( and the banks will let you withdraw it )
> 
> other CBs are already intervening ( some think the Fed is a heartbeat away from a pivot )



I feel it's just a "pause and assess" before another round of jacking rates. 

Rba seems gun shy when it comes to pulling the trigger.

Imo there's still to much gouging of prices when it comes to goods and services. I don't think the psyche of the consumer has been shaken enough not to see inflation rapidly rise again.

Goods and services are already topped out in this country. I'm not sure exactly how that's going to be addressed without a deflationary period.


----------



## sptrawler (5 October 2022)

moXJO said:


> I feel it's just a "pause and assess" before another round of jacking rates.
> 
> Rba seems gun shy when it comes to pulling the trigger.
> 
> ...



Agree 100%, without deflating prices across the board, those at the bottom will cost the Govt heaps and that will further feed the inflation.


----------



## divs4ever (5 October 2022)

moXJO said:


> I feel it's just a "pause and assess" before another round of jacking rates.
> 
> Rba seems gun shy when it comes to pulling the trigger.
> 
> ...



 the problem seems to be nobody is buying government debt  , at least in the UK and Japan ( maybe other places as well ) now Japan also likes buying US debt , normally 

 we still have some supply disruptions to bite  ( like tissue paper in Germany and England , food in lots of areas )

 will all this be forgotten leading up to the US mid-terms  or will Trump endorsed candidates  grab control of the Senate and Congress


----------



## moXJO (5 October 2022)

divs4ever said:


> the problem seems to be nobody is buying government debt  , at least in the UK and Japan ( maybe other places as well ) now Japan also likes buying US debt , normally
> 
> we still have some supply disruptions to bite  ( like tissue paper in Germany and England , food in lots of areas )
> 
> will all this be forgotten leading up to the US mid-terms  or will Trump endorsed candidates  grab control of the Senate and Congress



If Republicans grab house or senate expect nothing to be done for a while. They will block everything dems put up.


----------



## divs4ever (5 October 2022)

moXJO said:


> If Republicans grab house or senate expect nothing to be done for a while. They will block everything dems put up.



depends if it is the RINOs or the populist faction  , the RINOs are as intertwined with the neo-cons as the Dems  not much change if the RINOs are the pivotal faction


----------



## divs4ever (5 October 2022)

remember Harris has the tie-breaker vote in the Senate currently and she hardly even needs to use it  ,


----------



## over9k (5 October 2022)

OPEC now considering 2 million cut.


----------



## divs4ever (5 October 2022)

over9k said:


> OPEC now considering 2 million cut.



well if that price cap thing was to get some traction , some of the smaller producers would be close to break-even ( and no incentive to export at all ) remember production costs are rising for most producers


----------



## over9k (5 October 2022)

divs4ever said:


> well if that price cap thing was to get some traction , some of the smaller producers would be close to break-even ( and no incentive to export at all ) remember production costs are rising for most producers



S&P futures are the best at the moment which means energy will be an outlier today. 

I'm planning on selling once opec make the confirmation (any confirmation). People are just buying on yet another rumour.


----------



## divs4ever (5 October 2022)

The UN Demands All Central Banks Stop Rate Hikes And Switch To Price Controls Instead​





						The UN Demands All Central Banks Stop Rate Hikes And Switch To Price Controls Instead | ZeroHedge
					

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero




					www.zerohedge.com
				




 now of course one must wonder how many CBs  will take any notice of the UN


 i hold BPT ( 'free-carried ' ) and am in a very nice position there  , so am unlikely to sell ( or reduce them ) , now WDS will be a tougher decision , i am in positive territory ( thanks to the BHP spin-off )  and the TEG holding  .. i may as well ride it over the full course


----------



## greggles (5 October 2022)

over9k said:


> OPEC now considering 2 million cut.




OPEC determined to fund Putin's war in Ukraine. They will have blood on their hands, but it's not surprising to hear that Saudi Arabia is the driving force behind this. A country that would murder and dismember its own citizen in one of their overseas embassies isn't exactly what you would call a paragon of virtue.

Saudi Arabia hasn't condemned Russia's invasion of Ukraine. Why? Because murderous authoritarians stick together when times get tough.


----------



## divs4ever (5 October 2022)

greggles said:


> OPEC determined to fund Putin's war in Ukraine. They will have blood on their hands, but it's not surprising to hear that Saudi Arabia is the driving force behind this. A country that would murder and dismember its own citizen in one of their overseas embassies isn't exactly what you would call a paragon of virtue.
> 
> Saudi Arabia hasn't condemned Russia's invasion of Ukraine. Why? Because murderous authoritarians stick together when times get tough.



 OPEC has realized the G7 and climate change are trying to destroy their economies  ,  .. true virtue is a rare thing  maybe Saudi Arabia is the only one caught out ( since the victim walked in of his own will and was  recorded on surveillance cameras   )


----------



## Smurf1976 (5 October 2022)

divs4ever said:


> The UN Demands All Central Banks Stop Rate Hikes And Switch To Price Controls Instead



Price controls really just swaps rising prices for physical shortages in terms of the ultimate outcome.

It's still bad for the average person just in a different way. Instead of spending more to buy something, you instead spend time and money (fuel etc) going from shop to shop trying to find one that has what you want to buy.


----------



## over9k (6 October 2022)

OPEC now recommending 2m cut. Oil futures now soaring.


----------



## over9k (6 October 2022)

Confirmed: 





Sold.


----------



## over9k (6 October 2022)

@frugal.rock Bought at 301 & sold at 463 within a week. How'd you do?


----------



## over9k (6 October 2022)

And now this is happening:




Talk about a wild ride. NRGU running to 481, dropping to 444 after opec's confirmation, and then on this headline above has then rebounded and run to 479 & counting.

Edit:




You could plot a sine wave over this thing.


----------



## frugal.rock (6 October 2022)

over9k said:


> @frugal.rock Bought at 301 & sold at 463 within a week. How'd you do?



Timbuktu. Still holding. Bought the rumour, will sell on the news wave once it's reached the beach and about to turn around.

Sawtooth wave. Sine or cosine a bit different.

Have a look at TFMBMc1


----------



## over9k (6 October 2022)

Yeah I'm running BOIL as my gas play. Still, this last NRGU run has kept me in lapdances for the next ~6 months so I'm sweet.


----------



## divs4ever (6 October 2022)

Smurf1976 said:


> Price controls really just swaps rising prices for physical shortages in terms of the ultimate outcome.
> 
> It's still bad for the average person just in a different way. Instead of spending more to buy something, you instead spend time and money (fuel etc) going from shop to shop trying to find one that has what you want to buy.



 of course price caps  rely on the compliance of business/public  , the black market  might literally explode  ( with new products and customers ) and if the black market swells  government revenue via sales tax and excise plummets  .. but then i suppose they will use that tax avoidance to impose CBDCs  .. and then try to stop the return of gold and silver as trading currency


----------



## over9k (6 October 2022)

frugal.rock said:


> Timbuktu. Still holding. Bought the rumour, will sell on the news wave once it's reached the beach and about to turn around.
> 
> Sawtooth wave. Sine or cosine a bit different.
> 
> *Have a look at TFMBMc1*


----------



## qldfrog (6 October 2022)

againsthegrain said:


> Job figures are looking good by the way, and Aussies don't give up easy.  Australia as a overall country and society has not seen any major social upheavals. Down under when the going gets tough we get proactive about it and find a second job or pick up more hours.
> Look at France as a example,  their standard of living is high and compare to any east euro country they are gods,  yet quick to riot burn and loot when they hit a bump on the road.
> 
> I think we will be fine, there will be no mass defaults no blood in the street,  just some hard yakka all around and plenty room to move rates higher.  Somebody think about the pensioners and savers!



Do you really believe the standard of living in France is high.
This was true 40y ago but no way true anymore.
Only retirees are having it good
Unemployment above 9%, real jobs impossible to get
 min wages at 11 euro per hour or 17 aud, in Australia it is $21...
And french minimal wage only applies to adult, full time employees etc etc
Moreover it is the actual income of from memory a third of workers
Crime and housing crisis for the last 30y
Compare that to Australia.
Even to a French, we are a nation of spoiled brats absolutely unaware of their luck, and that was a big worry for my son who is born and bred here, so we did intensive travel to put things in perspective.
Long gone is the time of the Aussie battler, ingenuity,free spirit and independence i so liked 3 decades ago when i came.
Look around you.. Victoria elections coming, etc
i do not expect much when sxxt will hit the fan.


----------



## divs4ever (6 October 2022)

if Victoria re-elects Andrews  they deserve what they get  , if the election is rigged and they tolerate that  , they still deserve the consequences 

 regarding France i was there briefly in 1990 ( less than a week as part of a larger tour ), but maybe that tendency to riot and strike readily is why their standard of living is higher than Eastern Europe 

regarding  Australian ingenuity  , i am now retired  so no longer do i  provide my impromptu fixes ( now  expressly banned in 4 former workplaces )   Australia enjoy what you asked for


----------



## againsthegrain (6 October 2022)

qldfrog said:


> Do you really believe the standard of living in France is high.
> This was true 40y ago but no way true anymore.
> Only retirees are having it good
> Unemployment above 9%, real jobs impossible to get
> ...




That was roughly my argument, comparing a West European country that still has a appeal to most of the world vs Aus. Most Aussies will not have the same reasons and motivation to get pissed off with our standard of living to give up like the French do. What is a few blips of rates up in a nation of 'spoilt brats' as said by you. 


Anyway the rest of the argument can be twisted both ways France has taken a beating by all the slums and the maslim ghettos which are turning chunks of Paris into sharia zones. 
Of course if you do have the money you can ignore those problems and enjoy the cultural centre of Europe and the world. Get in your Italian or German automobile or catch a plane and be a stone throw away from Italy Austria etc etc galleries, beaches, 500 year old architecture (if that appeals to you) 
As for Australia we are a calm country, with the quiet and peace or your suberbia or leafy inner burbs you can relax and drink your instant coffee each morning knowing that tingling feeling is there watching the value of your house appreciate. This safety zone appeals to alot of people and they will happily work 80 hours a week to keep it. 
Of course you can also catch a flight to Bali and enjoy very cheap alcohol too. 

The face of Australia is changing much like of any country, nothing stands still.  The 90s Aussie is slowly replaced with a new more obedient citizen


----------



## divs4ever (6 October 2022)

againsthegrain said:


> That was roughly my argument, comparing a West European country that still has a appeal to most of the world vs Aus. Most Aussies will not have the same reasons and motivation to get pissed off with our standard of living to give up like the French do. What is a few blips of rates up in a nation of 'spoilt brats' as said by you.
> 
> 
> Anyway the rest of the argument can be twisted both ways France has taken a beating by all the slums and the maslim ghettos which are turning chunks of Paris into sharia zones.
> ...



  but we important plenty of migrants  to help with the skill shortage 

 and every job in a union  workplace  went to crap as soon as you made a pommie the union delegate  , now that MIGHT not be  exclusively a British unionist trait now  we have plenty of nationalities to choose from now 

 and don't worry the slums are coming here as well they are called housing commission   one suburb about two miles away  has at LEAST one gang per street ( and they ain't all kids )


----------



## waterbottle (6 October 2022)

Dutch inflation rate continuing to climb... Sorta calls into question the Peak inflation theory.....


----------



## over9k (7 October 2022)

Peter Zeihan on OPEC.


----------



## waterbottle (7 October 2022)

Samsung, AMD, and Intel reporting large profit declines. All citing a slow-down in PC sales. Samsung had the biggest decline at 30% yoy.





__





						Subscribe to read | Financial Times
					

News, analysis and comment from the Financial Times, the worldʼs leading global business publication




					www.ft.com
				




Either a sign of the times with PC sales no longer required for WFH set ups, or IR hikes are starting to truly make a dent in consumption. (or maybe it's a combination of both). 

I'll also mention that retailers (Target & Nike) have reported large inventory build ups that they're now trying to discount, and that FedEx has reported significantly fewer parcel deliveries, particularly in Europe & Asia, within the last quarter. 

Seems like the hikes are working. Question is will this show up on the upcoming CPI print?


----------



## divs4ever (7 October 2022)

over9k said:


> Peter Zeihan on OPEC.




 i was only expecting  a 1 million barrel ( a day ) cut  but the G7 pushed forward with price caps , so am not shocked


----------



## moXJO (7 October 2022)

waterbottle said:


> Samsung, AMD, and Intel reporting large profit declines. All citing a slow-down in PC sales. Samsung had the biggest decline at 30% yoy.
> 
> 
> 
> ...



Recently bought a laptop. Just the act of opening and starting it is a pain compared to just doing it on my phone. 
I do prefer PC's  as I find phone apps to be sht quality programs. But phones did indeed make me an impatient mofo.

Given we come out of pandemic, deliveries were always going to drop off a cliff. Once the gouging stops, then you know mindsets have changed.


----------



## frugal.rock (7 October 2022)

over9k said:


> @frugal.rock Bought at 301 & sold at 463 within a week. How'd you do?



I'm out at 498


----------



## waterbottle (7 October 2022)

over9k said:


> Peter Zeihan on OPEC.












						c'mon do something
					

An image tagged c'mon do something




					imgflip.com


----------



## waterbottle (7 October 2022)

Food prices down again for 6th consecutive month.





__





						FAO Food Price Index | World Food Situation | Food and Agriculture Organization of the United Nations
					






					www.fao.org
				




If US housing follows and oil stays down we'll have a recipe for lower inflation


----------



## divs4ever (7 October 2022)

waterbottle said:


> Food prices down again for 6th consecutive month.
> 
> 
> 
> ...



 obviously not buying their sugar from the same store i am  ( it is starting to creep up ) ( rice as well )


----------



## over9k (8 October 2022)

Jobs numbers in hot, cold water poured on the idea of fed tapering earlier than expected, everything except energy slaughtered


----------



## over9k (8 October 2022)

Random musings:




You'd think electric vehicle manufacturers would have some kind of correlation with oil/fuel prices and work as a pretty nice inflation hedge, but apparently not. TSLA getting massacred today/lately just like every other growth play.


----------



## waterbottle (8 October 2022)

over9k said:


> Random musings:
> 
> View attachment 147811
> 
> ...



The lithium miners have held up surprisingly well compared to other spec/growth companies. Market might be putting them in the same category as other energy companies given the push for a green transition.


----------



## waterbottle (8 October 2022)

AMD dropped 14%, almost at pre covid levels   

Looks like that's where companies who don't perform are headed....


----------



## divs4ever (8 October 2022)

over9k said:


> Jobs numbers in hot, cold water poured on the idea of fed tapering earlier than expected, everything except energy slaughtered



 were they actually 'hot'  we have a LOT of US data adjusted in hindsight  ( and a lot of it considered as garbage even after adjustment )

 be careful with the energy  as the US administration is liable to try another stunt ( or two ) before the mid-term elections  ( like maybe promises to build new nuclear power plants  or something similar .. long term promise hoping the numb-nuts  vote Democrat in the mid-term )


----------



## waterbottle (8 October 2022)

divs4ever said:


> were they actually 'hot'  we have a LOT of US data adjusted in hindsight  ( and a lot of it considered as garbage even after adjustment )
> 
> be careful with the energy  as the US administration is liable to try another stunt ( or two ) before the mid-term elections  ( like maybe promises to build new nuclear power plants  or something similar .. long term promise hoping the numb-nuts  vote Democrat in the mid-term )




Market always overreacts when something misses expectations. Not too sure how the Fed will react though.
The overall trend for NFP jobs growth has been down since the beginning of the year. All of the other data (oil, food prices, company profits) are also down. Mortgage applications are slowing and US real estate expected to head downwards too.


I think there's enough data there to suggest CPI will also start to drop yoy, although MoM nowcasting suggests an increase.

Having said that, today was a moderately sized move for NDX. Historically, they've occurred in isolation at the start of a trend (already seen in late august) or near the end (e.g June 2022)....


----------



## moXJO (8 October 2022)

over9k said:


> Random musings:
> 
> View attachment 147811
> 
> ...



Musk and Twitter what a headache.
Some good news out of Tesla as well. But it's definitely on the woke hitlist. 

I'll be dribbling in at these levels (expect it to go a little lower) to build on position.


----------



## moXJO (8 October 2022)

waterbottle said:


> AMD dropped 14%, almost at pre covid levels
> 
> Looks like that's where companies who don't perform are headed....



They also make chips for cars don't they?


----------



## divs4ever (8 October 2022)

moXJO said:


> They also make chips for cars don't they?



some  chips i suspect , but the pivotal player is Qualcomm  , the world would be a different place if Qualcomm stops access to it's patents and licences ( and Qualcomm has an extensive portfolio of patents already registered in China  , so China is likely to protect/respect those patents )


----------



## over9k (10 October 2022)

Looks like the beginning of the taper is still going to be december.


----------



## divs4ever (10 October 2022)

i guess it depends on if you believe the Fed speakers .. this time 

 are they completely politically deaf , or are they trying to walk the fine edge between financial collapse and political expediency 

 2020 proved the US is most likely  to 'cherry-pick ' who gets a bail-out  , and who gets thrown to the wolves 

 if the Saudis/OPEC+ cling to their national sovereignty aspirations  the Fed ( and other CBs ) are going to have to pull more magical creatures out of the tool-kit 

 watch out for a gobbledygook avalanche


----------



## CityIndex (10 October 2022)

over9k said:


> Looks like the beginning of the taper is still going to be december.



At the moment, it seems like every time the market starts to get excited about the possibility of the tightening cycle slowing, something new comes in to knock it back down.

Traders have been speculating, or hoping rather, that a pivot is on the horizon for months now, yet commentary from Fed members remains  hawkish, and has so far been supported by US economic data. Focus is now on this week's CPI, which will likely be another big opportunity to swing sentiment one way or another.


----------



## waterbottle (10 October 2022)

The pivot will come if we wait long enough... The surprise will be if CPI continues to March higher (I'm not of aware of anything to support that though) and the Fed is forced to hike well past 4.6%.

How many times has the Fed altered there hiking plan in previous cycles?


----------



## moXJO (10 October 2022)

The question is how far markets pump?
The bubble distorted prices to such a degree that it's hard to see how we hit highs from here.  Or even where everything's going to land in the new "normal".
Well unless we get another wave of stimulus, in which case its carry on. 

Not to say I'm not a buyer right now. Just looking at the reality.


----------



## waterbottle (10 October 2022)

moXJO said:


> The question is how far markets pump?
> The bubble distorted prices to such a degree that it's hard to see how we hit highs from here.  Or even where everything's going to land in the new "normal".
> Well unless we get another wave of stimulus, in which case its carry on.
> 
> Not to say I'm not a buyer right now. Just looking at the reality.



Your guess is as good as mine. 
I thought the bottom (for NDX) would be 10000, that looks like it may breach this quarter. 

Meanwhile we have BoE doubling it's gilt purchases, but failing to make an impact. Market doesn't like this. I'm sure governments will soon start leaning on CBers once they realise they're not going to be able to take on debt cheaply to facilitate their pork barrelling.


----------



## over9k (10 October 2022)

CityIndex said:


> At the moment, it seems like every time the market starts to get excited about the possibility of the tightening cycle slowing, something new comes in to knock it back down.
> 
> Traders have been speculating, or hoping rather, that a pivot is on the horizon for months now, yet commentary from Fed members remains  hawkish, *and has so far been supported by US economic data*. Focus is now on this week's CPI, which will likely be another big opportunity to swing sentiment one way or another.



To be fair, there was that one batch of inflation data that came in below estimates that markets went nuts for. It didn't last, but that's kind of the point - there really hasn't been a trend to even follow. It's just been a sh!tshow for months.

This, however: 




Continues.


----------



## waterbottle (11 October 2022)

over9k said:


> To be fair, there was that one batch of inflation data that came in below estimates that markets went nuts for. It didn't last, but that's kind of the point - there really hasn't been a trend to even follow. It's just been a sh!tshow for months.
> 
> This, however:
> 
> ...



Maybe until the Fed is done hiking?


----------



## over9k (11 October 2022)

waterbottle said:


> Maybe until the Fed is done hiking?



Doubt


----------



## waterbottle (11 October 2022)

over9k said:


> Doubt



Phil Lowe plz hike


----------



## CityIndex (11 October 2022)

over9k said:


> This, however:



USD the strongest major overnight, while AUD was the weakest, sliding against all of its FX peers thanks to the situation/outlook in China adding to pressure on sentiment.

AUD/USD has broken out of a bearish flag pattern and closed at 2.5-year lows yesterday. All trading carries risk, but given the current fundamental and technical backdrop, where can the pair look to hold support and attempt to bottom?


----------



## over9k (11 October 2022)

CityIndex said:


> USD the strongest major overnight, while AUD was the weakest, sliding against all of its FX peers thanks to the situation/outlook in China adding to pressure on sentiment.
> 
> AUD/USD has broken out of a bearish flag pattern and closed at 2.5-year lows yesterday. All trading carries risk, but given the current fundamental and technical backdrop, where can the pair look to hold support and attempt to bottom?



AUD will bounce when china lockdowns lift. That could be quite some time.


----------



## CityIndex (11 October 2022)

over9k said:


> AUD will bounce when china lockdowns lift. That could be quite some time.



You could be right. In the meantime, this pair may have to rely on pullbacks in USD for bearish pressure to ease. 

US 10-year yields currently retesting its record high just above 4%. It should be interesting to see whether we get a rejection from this level or some sort of break higher.


----------



## over9k (11 October 2022)

CityIndex said:


> You could be right. In the meantime, this pair may have to rely on pullbacks in USD for bearish pressure to ease.
> 
> US 10-year yields currently retesting its record high just above 4%. It should be interesting to see whether we get a rejection from this level or some sort of break higher.



Fair bit of seasonality to contend with too. Hence the energy play for heating etc


----------



## divs4ever (12 October 2022)

BoE Alarm Bells, Brainard's Caution, PC Woes - What's Moving Markets









						BoE Alarm Bells, Brainard's Caution, PC Woes - What's Moving Markets By Investing.com
					

BoE Alarm Bells, Brainard's Caution, PC Woes - What's Moving Markets




					www.investing.com
				




 seems the inflation isn't so much of a risk , but the leverage taken out  despite inflation appearing on the horizon  is turning into a real monster  ( shame Keynesians don't learn quickly )


----------



## waterbottle (12 October 2022)

BoE governed tells funds they have 3 days left to sort themselves out....


----------



## over9k (12 October 2022)

waterbottle said:


> BoE governed tells funds they have 3 days left to sort themselves out....



Yeeeeep. Only the first domino


----------



## moXJO (12 October 2022)

divs4ever said:


> BoE Alarm Bells, Brainard's Caution, PC Woes - What's Moving Markets
> 
> 
> 
> ...



Inflation was always just one factor. I think central banks have decided to pop the bubble before it really gets out of control.


----------



## waterbottle (12 October 2022)

So what's it going to look like 'post-bubble'?


----------



## over9k (12 October 2022)

Worse.


----------



## CityIndex (12 October 2022)

waterbottle said:


> So what's it going to look like 'post-bubble'?



Not great according to the IMF , who cut global growth forecasts to 2.7% next year, and claim that the risk of central bank’s over-tightening has risen sharply. Apart from 2020, which was obviously impacted by strict global lockdowns, this would be the worst year since the GFC in 2009.

Of course, this is all speculation, but it definitely isn’t doing much to help with investor sentiment at the moment.


----------



## divs4ever (12 October 2022)

over9k said:


> Yeeeeep. Only the first domino



FIRST  ??  not the one they couldn't hide ??

V For Vendetta Dominoes Scene (complete)​


----------



## divs4ever (12 October 2022)

CityIndex said:


> Not great according to the IMF , who cut global growth forecasts to 2.7% next year, and claim that the risk of central bank’s over-tightening has risen sharply. Apart from 2020, which was obviously impacted by strict global lockdowns, this would be the worst year since the GFC in 2009.
> 
> Of course, this is all speculation, but it definitely isn’t doing much to help with investor sentiment at the moment.




 a great opportunity for a Great Reset  ( administered by the very people who played major roles in this economic collapse  and have war-gamed this scenario extensively  , especially the media/information cycle )


----------



## waterbottle (12 October 2022)

Nobody could have seen this coming





__





						Bloomberg - Are you a robot?
					





					www.bloomberg.com


----------



## divs4ever (12 October 2022)

waterbottle said:


> Nobody could have seen this coming
> 
> 
> 
> ...



what ?? Biden hinting the possibility of a recession  is real ( not blatantly obvious even to a former paper-boy )

 but sure there is a small risk of a recession , given all the inaccurate data issued  a depression is much more likely


----------



## moXJO (12 October 2022)

If they get wage inflation under control it will pivot faster. Problem is no one wants to work anymore. Seems lockdowns made everyone realise at the same time that working sucks.

Hey let's try mass immigration.


----------



## frugal.rock (12 October 2022)

moXJO said:


> Hey let's try mass immigration



Cool, where are we going?
And do they accept the disgustingly healthy unvaxxed?
🤣


----------



## Telamelo (12 October 2022)

US CPI data will be the next major data point in deciding the next Fed rate move.

Economists predict the headline CPI to come in at 8.1% y/y, and anything higher than the previous reading of 8.3% could spell more disaster for the AUD and equities.

The market is also expecting release of the minutes of the FOMC’s last meeting later tonight, which will provide an insight into the Fed’s frame of mind.


----------



## waterbottle (12 October 2022)

moXJO said:


> If they get wage inflation under control it will pivot faster. Problem is no one wants to work anymore. Seems lockdowns made everyone realise at the same time that working sucks.
> 
> Hey let's try mass immigration.




Perhaps business will take care of the wage inflation problem









						Intel Plans Thousands of Job Cuts in Face of PC Slowdown
					






					www.bloomberg.com


----------



## Value Collector (12 October 2022)

frugal.rock said:


> And do they accept the disgustingly healthy unvaxxed?
> 🤣



Yes, but you will need to be tested and wear a mask 😷 😅


----------



## over9k (12 October 2022)

Futures went from +1.2 to +0.2 instantly. But, as I keep saying, we're going to need to see a lot more than just one decent batch of data in before markets start thinking things are returning to normality.


----------



## over9k (12 October 2022)

moXJO said:


> Seems lockdowns made everyone realise at the same time that working sucks.



Working in an office/locked in a wage cage sucks. I don't even know how many people I know just looking for a reason to quit their artificially lit job and do something they actually enjoy.

I work for myself/trade my own money for a reason. It's my main income source yes but I do it this way so I can do other things too (my brother & I flip houses together that he does full time/I do part time for example).

Mrs over9k practically worked herself to death doing 70-80 hour weeks as a partner-track accountant. I've never seen someone earn so much and yet be so miserable. Companies/firms are going to have to learn one way or another.


----------



## Smurf1976 (13 October 2022)

over9k said:


> Mrs over9k practically worked herself to death doing 70-80 hour weeks as a partner-track accountant.



Been there, done the "live at work" thing in the past.

It's doable but a lot depends on management and workers all being aligned and on the same page about what's being done and why.


----------



## over9k (13 October 2022)

Smurf1976 said:


> Been there, done the "live at work" thing in the past.
> 
> It's doable but a lot depends on management and workers all being aligned and on the same page about what's being done and why.



It's pure slavedriving now. It's not even long hours/high pay, it's just long hours. 

Hourly it's not even minimum wage. If you care to look it up, the firms have ridiculous attrition rates now but that's actually by design - uni grads are in such oversupply that churn & burn now IS the business model.


----------



## divs4ever (13 October 2022)

frugal.rock said:


> Cool, where are we going?
> And do they accept the disgustingly healthy unvaxxed?
> 🤣



 am sorting through the options ,

Japan looks to be an economic wreck  so probably not there 

 still have  a tendency  for rural ( highland ) Bolivia , might not even know what a vaxx is ( supposed to be )

 given the current Green dementia ,  a temperate climate should be considered ( no need for heating  , or extensive use of air-conditioning ) and just in case of rising sea levels  several ( hundred ) metres  above current sea level should also be considered  , and adequate fertile land ( so we can cultivate our own food )

 so am leaning more towards South America   than say the Northern Hemisphere


----------



## waterbottle (13 October 2022)

Swedish inflation rate charging ahead.....


----------



## waterbottle (13 October 2022)

Interesting discussions RE: inflation in Bloomberg. Some commentators arguing QT is likely to be axed, others stating a 3% or 4% target should be considered the norm....


----------



## wayneL (13 October 2022)

waterbottle said:


> Interesting discussions RE: inflation in Bloomberg. Some commentators arguing QT is likely to be axed, others stating a 3% or 4% target should be considered the norm....



So they are trying to decide between recession with high inflation, or depression with hyperinflation?


----------



## divs4ever (14 October 2022)

they are deciding what definition to change this time 

U.S. CPI Rose More Than Expected Again in September; Core CPI up 0.6%









						U.S. CPI Rose More Than Expected Again in September; Core CPI Up 0.6% By Investing.com
					

U.S. CPI Rose More Than Expected Again in September; Core CPI Up 0.6%




					www.investing.com


----------



## over9k (14 October 2022)

And everything except GUSH, NRGU, and BOIL (which are all deep into the green, NRGU +7%) were slaughtered.


----------



## over9k (14 October 2022)

Looks like the dip buyers have emerged once again


----------



## over9k (14 October 2022)

Alright followed my own rule of buying/selling on a double digit move and flogged some NRGU (some) today.


----------



## qldfrog (14 October 2022)

divs4ever said:


> they are deciding what definition to change this time
> 
> U.S. CPI Rose More Than Expected Again in September; Core CPI up 0.6%
> 
> ...



I give up..
Connect this morning: US market on fire;Dow Jones up 2.8% etc
Obviously my thoughts are... CPI vmust have been lower, the market expects an easing of rate rise or even not any more rise. .looking ahead you know..
Nope
CPI higher than expected..so we are supposed to be looking so far ahead as what? that the rate will rise, the economy will be smashed, many companies will disappear the fed will then restart QE and in 2050, the companirs will make huge profits in H2 and windmills economies with pink butterflies and newly discovered fairies flying in our new world cities?
Stunning and stunned.
I feel like retreating and moving out of the markets altogether to...where is the question


----------



## waterbottle (14 October 2022)

Went to bed after CPI expecting a 5% down move.... Looks like to reversed. Wtf is going on? Did the plunge protection team get activated? 

Edit: just thought I'd add, the last time we had a day like this in US markets was mid July when the data was crap but the market headed into a bear rally. Perhaps we're witnessing the same? Still need to sort out the Gilts fiasco though


----------



## qldfrog (14 October 2022)

waterbottle said:


> Wtf is going on?



Indeed. What's next bitcoin at 300$ or 300k overnight..
Inflation figures were worse than expected..


----------



## waterbottle (14 October 2022)

qldfrog said:


> Indeed. What's next bitcoin at 300$ or 300k overnight..
> Inflation figures were worse than expected..




Headline improved and in a downtrend, core rising. Unemployment numbers rising. 
Perhaps this is another hopium rally. Anyone brave enough to buy the dip?


----------



## qldfrog (14 October 2022)

waterbottle said:


> Headline improved and in a downtrend, core rising. Unemployment numbers rising.
> Perhaps this is another hopium rally. Anyone brave enough to buy the dip?



No brave heart here for significant amount.added index one put in November and bought back a few us shares i had list with SL.
SL today were not fun for a couple of my stocks as market initially fell heavily, sl triggered to see price jump a lot by close.was able to reenter the ones i wanted but at a cost.


----------



## wayneL (14 October 2022)

waterbottle said:


> Headline improved and in a downtrend, core rising. Unemployment numbers rising.
> Perhaps this is another hopium rally. Anyone brave enough to buy the dip?



Well, apparently the Boyz at the NY Fed did. (unless we all believe in faeries?)


----------



## Dona Ferentes (14 October 2022)

_The Streetlight Effect_

_"While a number of prices have fallen from their highs – iron ore, corn, shipping rates, used cars, copper and timber, to name a few – these tend to be prices we can easily track, that are in the market’s streetlight.

"It’s the prices that are more difficult to track through public data sets – food away from home, transportation services, medical services, shelter – that are proving stickiest, leading the market to consistently underestimate CPI.

"The common feature of these *inflation hotspots *is that they are mainly services sectors, which continue to feel the effect of wage growth created by America’s white-hot labour market...."_

- Mervyn King


----------



## over9k (14 October 2022)

If futures had soared and then markets had soared at the open we'd be in total wtf territory but remember that everything plummeted at the open and then rebounded so it's not some kind of funny business - it's dip buying degenerates.

They turned green only AFTER plummeting deep into the red, not soaring premarket as soon as the data came out.


----------



## peter2 (14 October 2022)

I agree with the wtf sentiment, totally irrational. 
I'm reminded of the Keynes quote, "_Markets can remain irrational longer than you can remain solvent_."

Fantastic volatility for day trading but swing trading is impossible. Anticipating a Friday selloff. 
I used to be indecisive but now I'm not sure.


----------



## frugal.rock (14 October 2022)

over9k said:


> it's dip buying degenerates.



And in a big way.
That's not retail going against the CPI numbers.

Long live the contrarian...😬


----------



## over9k (14 October 2022)

peter2 said:


> I agree with the wtf sentiment, totally irrational.
> I'm reminded of the Keynes quote, "_Markets can remain irrational longer than you can remain solvent_."
> 
> Fantastic volatility for day trading but swing trading is impossible. Anticipating a Friday selloff.
> I used to be indecisive but now I'm not sure.



Yeah i'm angling for another sell tonight. I sold 20% of my nrgu position last night.


----------



## waterbottle (14 October 2022)

I'd again point out that this is what happened in mid July when we had an epic rally despite worsening inflation and *despite *recession not even entering mainstream discussion. 

The difference is this time we're fast approaching the terminal rate. We know inflation is trending down. Several markets have corrected, globally. Several businesses are already adjusting guidance. 

So in that context, the dip buying may actually be true value....


----------



## frugal.rock (14 October 2022)

peter2 said:


> Anticipating a Friday selloff.
> I used to be indecisive but now I'm not sure.



No great sell off.
XAO actually up 0.1% after close on final final bell.
Most other indexes retained their closing values.


----------



## over9k (14 October 2022)

Futures are now deep into the red. 

I am shocked I tell you.


----------



## frugal.rock (14 October 2022)

over9k said:


> Futures are now deep into the red.
> 
> I am shocked I tell you.



Green.

Even more shocked.


----------



## waterbottle (14 October 2022)

Waiting to see what happens in the UK IMO.
ECB looks like it might kick QT down the road to early 2023.
US banks reporting tonight.


----------



## moXJO (14 October 2022)

It's gotta end down, surely


----------



## frugal.rock (14 October 2022)

Who's got a coin?

Pre market flipped to green also.
Crypto green.
Bond yields red.

Risk on.... 🙀


----------



## frugal.rock (14 October 2022)




----------



## waterbottle (14 October 2022)

Will have to await guidance... Dimon thinks we're still in for another 20-30% drop in equities. Cathy Wood can't catch a break


----------



## divs4ever (14 October 2022)

waterbottle said:


> I'd again point out that this is what happened in mid July when we had an epic rally despite worsening inflation and *despite *recession not even entering mainstream discussion.
> 
> The difference is this time we're fast approaching the terminal rate. We know inflation is trending down. Several markets have corrected, globally. Several businesses are already adjusting guidance.
> 
> So in that context, the dip buying may actually be true value....



 recession will be cancelled until we are in an undeniable depression  ( which they will deny to their believers )

 BTW inflation is money-printing  the other things are consequences of excessive money-printing ( or trying to slow it down  , way too late )


----------



## moXJO (14 October 2022)

waterbottle said:


> Will have to await guidance... Dimon thinks we're still in for another 20-30% drop in equities. Cathy Wood can't catch a break



Cathy wood was publicly going through the seven stages of grief, all directed at Powell the other day. 
How low can Arkk go. They still ripping them fees outa stockholders.


----------



## over9k (15 October 2022)

moXJO said:


> Cathy wood was publicly going through the seven stages of grief, all directed at Powell the other day.
> How low can Arkk go. They still ripping them fees outa stockholders.




Every single thing I read from that woman makes me think she's a complete moron. If I didn't know she was in charge of what she is I'd think she was an absolute nutjob.

I swear she just caught the boat in an environment where risk assets ran and still hasn't figured out (and neither has anyone else) that risk assets' days are over.

"Everyone's a genius in a bull market"




frugal.rock said:


> Who's got a coin?
> 
> Pre market flipped to green also.
> Crypto green.
> ...



So how are those buys looking rock? I sold NRGU at 516 yesterday and it's now at 469 and still dropping.

Please tell me nobody bought at open today...


----------



## over9k (15 October 2022)




----------



## over9k (15 October 2022)

Rebought a little bit of NRGU again at 470. Still plenty of cash to deploy if need be.


----------



## frugal.rock (15 October 2022)

over9k said:


> Please tell me nobody bought at open today...



Clearly plenty did. They're probably responsible for the current dump.

I'm musing, if it plays out like Aus today, it will be buy sell buy, so would close in the green, ready for rally continue next week.
Seems US lithium is listening to MS butt heads...for now.


----------



## frugal.rock (15 October 2022)

Was hoping for a rally again before another leg down, but that's too predictable.

My only buying this week was some nibbling on ASX Wed & Thursday


----------



## over9k (15 October 2022)

frugal.rock said:


> Clearly plenty did. They're probably responsible for the current dump.
> 
> I'm musing, if it plays out like Aus today, it will be buy sell buy, so would close in the green, ready for rally continue next week.
> Seems US lithium is listening to MS butt heads...for now.



Degenerates with FOMO. All the ones that missed yesterday bought at open (futures and open were flat and then things took off) and the smart money's then sold.

"Who cares if the market's being retarded, if it's mooning it's mooning, I better get on board". 

Nek minnut... 



The retail traders have been well & truly pasted on this one.


----------



## moXJO (15 October 2022)

over9k said:


> Degenerates with FOMO. All the ones that missed yesterday bought at open (futures and open were flat and then things took off) and the smart money's then sold.
> 
> "Who cares if the market's being retarded, if it's mooning it's mooning, I better get on board".
> 
> ...



Degens keep my wallet fat.


----------



## over9k (15 October 2022)

moXJO said:


> Degens keep my wallet fat.



Degens put my side-hoe through university. 

Wait, what?


----------



## frugal.rock (15 October 2022)

over9k said:


> Wait, what?



Your call. 😬


----------



## over9k (15 October 2022)

frugal.rock said:


> Your call. 😬



Her parents called her stacy but her stage name is sapphire.


----------



## over9k (15 October 2022)

The fact that they called her stacy is probably why she hates her dad so much.


----------



## frugal.rock (15 October 2022)

Kwasi (modo) Kwarteng sacked.
Truss schooled. 
Corporate tax rises back on.


----------



## divs4ever (15 October 2022)

frugal.rock said:


> Kwasi (modo) Kwarteng sacked.
> Truss schooled.
> Corporate tax rises back on.



Truss Bows to Markets, Firing Kwarteng and Restoring Sunak's Corporate Tax Hike









						Truss Bows to Markets, Firing Kwarteng and Restoring Sunak's Corporate Tax Hike By Investing.com
					

Truss Bows to Markets, Firing Kwarteng and Restoring Sunak's Corporate Tax Hike




					www.investing.com
				




watch the corporates take the foot off the profit pedal and start cutting costs ( probably at the expense of jobs )

the train-wreck continues ( all they need now is corporate debt to look more risky .. and difficult to sell )

 and Truss due for a second lesson real soon 

 ( wait until Labor realizes the waves of job cuts coming )


----------



## moXJO (15 October 2022)

over9k said:


> Her parents called her stacy but her stage name is sapphire.



I'm guessing white blonde?


----------



## over9k (15 October 2022)

moXJO said:


> I'm guessing white blonde?



No no she's a classy one. 

Pastel pink.


----------



## divs4ever (15 October 2022)

i wonder when they realize sanctioning all those Russian Oligarchs was a bad idea  ( will the oligarchs invest in Africa or Asia )

 but they had plenty of warning  from the Cyprus restructure  what Europe was like  ( maybe the second time makes them smarter )


----------



## frugal.rock (15 October 2022)

Degenerates


----------



## divs4ever (15 October 2022)

over9k said:


> No no she's a classy one.
> 
> Pastel pink.



 sapphires are usually blue , but sometimes yellow/gold or green ( or a mixture )

 maybe she should change her name to Ruby or Bubbles


----------



## frugal.rock (15 October 2022)

divs4ever said:


> ( will the oligarchs invest in Africa or Asia )



I would think the middle east would rank in their favour above the 2 mentioned... Turkey ?🦃


----------



## over9k (15 October 2022)

AUD down 1.5% just on the day and cracked the 62 U.S cents mark. The 50's are now on the horizon. 

AUD likely to crack 50 U.S cents at the same time the pound hits parity.


----------



## moXJO (15 October 2022)

over9k said:


> No no she's a classy one.
> 
> Pastel pink.



Classic Stacey


----------



## moXJO (15 October 2022)

Well at least the market did what I was hoping it would do.


----------



## over9k (19 October 2022)

Insert "this is fine" meme.


----------



## divs4ever (19 October 2022)

over9k said:


> View attachment 148210
> 
> 
> Insert "this is fine" meme.



 is that 'official ' inflation , cherry-picked inflation , or actual inflation 

 10.1%  isn't even fine as a rate on corporate debt ( when i am buying )


----------



## over9k (20 October 2022)

divs4ever said:


> is that 'official ' inflation , cherry-picked inflation , or actual inflation
> 
> 10.1%  isn't even fine as a rate on corporate debt ( when i am buying )



Official numbers. So reality is probably more like 15-20.


----------



## over9k (20 October 2022)

Biden's releasing some more.


----------



## CityIndex (20 October 2022)

over9k said:


> Biden's releasing some more.



It will be interesting to see how much of an effect this has on bringing oil/fuel prices down after OPEC's production cut and new EU's new sanctions on Russian oil. 

Looking at it in relation to the broader market, after yesterday's Fed commentary highlighted the CB's focus on  ore inflation, it seems unlikely that it will have a significant impact on re-pricing for a possible pivot.


----------



## over9k (20 October 2022)

CityIndex said:


> It will be interesting to see how much of an effect this has on bringing oil/fuel prices down after OPEC's production cut and new EU's new sanctions on Russian oil.
> 
> Looking at it in relation to the broader market, after yesterday's Fed commentary highlighted the CB's focus on  ore inflation, it seems unlikely that it will have a significant impact on re-pricing for a possible pivot.



SFA. It's politics, it's just the appearance of doing something.


----------



## divs4ever (20 October 2022)

over9k said:


> Official numbers. So reality is probably more like 15-20.



that was what i was concerned about  ( my other concern is the rate of inflation growth is not slowing , even though the goal-posts are probably being shifted , before each read-out  )


----------



## divs4ever (20 October 2022)

CityIndex said:


> It will be interesting to see how much of an effect this has on bringing oil/fuel prices down after OPEC's production cut and new EU's new sanctions on Russian oil.
> 
> Looking at it in relation to the broader market, after yesterday's Fed commentary highlighted the CB's focus on  ore inflation, it seems unlikely that it will have a significant impact on re-pricing for a possible pivot.



 i was hearing from some commentators  that the US problem  was largely a refinery capacity problem  ,  which i found intriguing , the previous crisis ( in the US  ) was a logistics problem  ( getting the crude to the refineries )

 i am expecting a disconnect  between oil prices in Asia  , compared to oil prices in the West  ( and the futures markets prices  )


----------



## over9k (20 October 2022)

Sold a little bit of NRGU at 523 tonight just in case anyone cares. Exact same as the closing price.


----------



## over9k (20 October 2022)

This is incorrect. Do NOT believe this. Biden can still curtail all or probably to begin with, some, U.S oil exports.

Should that happen, it's economic depression for the rest of us and pretty smooth sailing for them. You could probably expect to see a 5% currency move within the day if/when it gets announced, as well as the U.S energy companies getting absolutely slaughtered and almost every growth play you can think of then screaming.

I suspect they would start with curtailing *some* exports (10% or whatever) and then just keep ratcheting the number up in the same way the fed has ratcheted interest rates up every X period of time.

Energy is NOT a risk-free play.


----------



## CityIndex (20 October 2022)

divs4ever said:


> i am expecting a disconnect between oil prices in Asia , compared to oil prices in the West ( and the futures markets prices )



That would be really interesting to see, especially if turns into a scenario similar to the disconnect we saw in US and European Nat Gas prices


----------



## waterbottle (20 October 2022)

over9k said:


> View attachment 148251
> 
> 
> This is incorrect. Do NOT believe this. Biden can still curtail all or probably to begin with, some, U.S oil exports.
> ...




The political ramifications would be massive. There are already rumblings about the cessation of Russian oil imports in Europe. If Biden restricts US oil output then he can kiss Ukraine goodbye.


----------



## over9k (20 October 2022)

waterbottle said:


> The political ramifications would be massive. There are already rumblings about the cessation of Russian oil imports in Europe. If Biden restricts US oil output then he can kiss Ukraine goodbye.



We'll see...


----------



## Smurf1976 (20 October 2022)

So far as US oil exports are concerned, just a couple of observations.

First is that the idea of the US exporting crude oil is itself a recent one. For a very long period it was effectively banned so the idea is in no way unprecedented.

Second is about having any oil to export. US production hasn't recovered to pre-pandemic levels and looks to be tapering off or even rolling over from the present rate of output. On a net basis the US plausibly isn't going to have anything to sell anyway unless their own consumption collapses or they get serious about growing their production.


----------



## over9k (20 October 2022)

Smurf1976 said:


> So far as US oil exports are concerned, just a couple of observations.
> 
> First is that the idea of the US exporting crude oil is itself a recent one. For a very long period it was effectively banned so the idea is in no way unprecedented.
> 
> Second is about having any oil to export. US production hasn't recovered to pre-pandemic levels and looks to be tapering off or even rolling over from the present rate of output. On a net basis the US plausibly isn't going to have anything to sell anyway unless their own consumption collapses or they get serious about growing their production.



Hence me still holding a fair bit of GUSH as well as NRGU.


----------



## divs4ever (20 October 2022)

waterbottle said:


> The political ramifications would be massive. There are already rumblings about the cessation of Russian oil imports in Europe. If Biden restricts US oil output then he can kiss Ukraine goodbye.



some of the decisions made during this conflict  have already  created massive ramifications  , 

 can we really expect some more rational decisions going forwards ( when less rational seems to be the trend )

 i am half-expecting China to step in with official ( declared ) trade restrictions ( i suspect those Covid outbreaks in the last 18 months  , were export bans by another name )

i guess we with have to see what happens before and after the mid-terms IF they are held ( there is even speculation about that )

if Turkey leaves NATO will we have an Arab ( Muslim ) winter of discontent


----------



## JohnDe (20 October 2022)

divs4ever said:


> i am half-expecting China to step in with official ( declared ) trade restrictions ( i suspect those Covid outbreaks in the last 18 months  , were export bans by another name )




Interesting reading -



> Will the Chinese of tomorrow live like the Spaniards of today?
> 
> China’s communist party is known for its powers of political choreography and economic control. When its leaders gather at moments of pomp and portent, neither the public nor the economy is allowed to spoil the scene. Thus when the party met in 2017 for its twice-a-decade congress, the most important event in the country’s political calendar, the economic stage was expertly set. The currency was stable. Borrowing was tamed. And, as if on cue, China’s statisticians reported that the economy was growing a bit faster than the official target rate.
> 
> ...


----------



## frugal.rock (21 October 2022)

Truss quits.


----------



## JohnDe (21 October 2022)

frugal.rock said:


> Truss quits.




Must be a record.


----------



## over9k (21 October 2022)

NRGU took a round trip from 523 close yesterday to 557 today and is now back at 523. Hilarious.


----------



## over9k (21 October 2022)

JohnDe said:


> Must be a record.



It was. 6 weeks on the job. Hilarious.

Markets didn't even move that much in response, which kind of shows you how much of a dumpster fire she really was. Literally as good as nothing.


----------



## mullokintyre (21 October 2022)

Yeah, she only ticked half the boxes, being a woman.
She needed to be a POC as well.
Mick


----------



## CityIndex (21 October 2022)

over9k said:


> It was. 6 weeks on the job. Hilarious.
> 
> Markets didn't even move that much in response, which kind of shows you how much of a dumpster fire she really was. Literally as good as nothing.



After all the turmoil that surrounded her time in office, could her resignation bring the BOE and monetary policy back as the main driver for GBP direction?


----------



## over9k (21 October 2022)

CityIndex said:


> After all the turmoil that surrounded her time in office, could her resignation bring the BOE and monetary policy back as the main driver for GBP direction?



Depends on who replaces her


----------



## over9k (21 October 2022)

Meanwhile, more sanctions on chinese chip manufacturers has given SOX/SOXL a little boost.


----------



## wayneL (21 October 2022)

over9k said:


> Depends on who replaces her



Sunak is odds on, Boris having another chip at it too.

But Kemi is still the only true conservative.... AND both female and POC (not that that should matter a damn).

I wish she'd have another crack, but the establishment goons will stop that.

The country is just getting sucked down the 5h1t chute in a vortex of idiocy.


----------



## divs4ever (21 October 2022)

well Farage has come out and said , he can't make the changes needed alone , claiming the Conservative party is broken 

 ( hinting a new Populist  political force is needed ?? )


----------



## JohnDe (21 October 2022)

divs4ever said:


> well Farage has come out and said , he can't make the changes needed alone , claiming the Conservative party is broken
> 
> ( hinting a new Populist  political force is needed ?? )




It is just the natural cycle of life, regular cleansing. Nothing to worry about, happens all the time and we keep moving forward.


----------



## over9k (21 October 2022)

Peter hitchens is always worth a listen too.


----------



## mullokintyre (21 October 2022)

over9k said:


> Peter hitchens is always worth a listen too.



Agree.
His Blog here about the conservative party in the UK could equally apply to the  conservative parties here in Oz.
Tories lacking belief

Mick


----------



## divs4ever (21 October 2022)

JohnDe said:


> It is just the natural cycle of life, regular cleansing. Nothing to worry about, happens all the time and we keep moving forward.



 am not  so sure , this time   , the  way forward  may have forgotten to pre-install the steps down  ( believing clean air currents will keep them afloat )


----------



## JohnDe (21 October 2022)

divs4ever said:


> am not  so sure , this time   , the  way forward  may have forgotten to pre-install the steps down  ( believing clean air currents will keep them afloat )




I've seen this before, and read about worse. One thing about humans is that we always find a way up.


----------



## divs4ever (21 October 2022)

i am closing on 70 and had the fortune to spend time  with people ( now deceased ) that had clear memories  of the turn on the 1900's 

 i am seeing less glimmers of hope in the younger generations ( i lived through Hippies , and Punks eras )

 uniformity  is okay  when the plan is solid and sound  , it is absolutely  dangerous once one or two mediocre flaws creep into the plan  and arrogance denies the issues exist ( i have worked in companies like that )

 i have also been expressly forbidden ( on some jobs ) to use my creativity and initiative  to  fix problems i have encountered , instead of hoping for an 'expert solution' within six months  ( and surviving long enough to witness such a solution, but usually i have changed jobs before any solution is applied  )


----------



## over9k (21 October 2022)

mullokintyre said:


> Agree.
> His Blog here about the conservative party in the UK could equally apply to the  conservative parties here in Oz.
> Tories lacking belief
> 
> Mick



As he points out, they're not a conservative party. Like the RINO phenomenon in the 'states, they stand for nothing except lining their pockets.

"Bring back boris" is now trending as a hashtag.


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## over9k (21 October 2022)

Just saw a headline that swaps have now priced in a 5% peak funds rate from the fed. Ouch.


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## frugal.rock (21 October 2022)

over9k said:


> "Bring back boris" is now trending as a hashtag.



I might have started that in the UK thread this morning... 😬

What a stand up guy, cutting his Carribbean holiday short to come back to take the PM role on. 🤨
Surely Bollywood won't get it and not sure if a Penny could Pound it out.
Better the devil you know?


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## divs4ever (21 October 2022)

frugal.rock said:


> I might have started that in the UK thread this morning... 😬
> 
> What a stand up guy, cutting his Carribbean holiday short to come back to take the PM role on. 🤨
> Surely Bollywood won't get it and not sure if a Penny could Pound it out.
> Better the devil you know?



would rather they resurrected Margaret Thatcher  , at least she stood for something


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## over9k (22 October 2022)

First friday gain in 6 weeks. Just sold a little bit of NRGU at 570. Would like to make some small degen growth plays with TNA & TQQQ on monday. Maybe some SOXL too. We'll see.


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## waterbottle (22 October 2022)

over9k said:


> First friday gain in 6 weeks. Just sold a little bit of NRGU at 570. Would like to make some small degen growth plays with TNA & TQQQ on monday. Maybe some SOXL too. We'll see.




I'll board the degen train too.
Seems that the US Treasury is considering buying back bonds + Fed officials now changing language and hinting at slowing down the pace of hikes.









						Treasury bond buyback programme gathers pace
					

NEW YORK: The long-simmering idea that the United States government should stand ready to buy back treasury securities from investors to improve market functioning is moving closer to reality.




					www.thestar.com.my
				












						Fed Set to Raise Rates by 0.75 Point and Debate Size of Future Hikes
					

Some officials have begun signaling their desire to slow down the pace of increases soon and to stop raising rates early next year to see how their moves this year are slowing the economy.




					www.wsj.com
				




Phil Low may have been right


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## over9k (22 October 2022)

Yeah, we'll see. There's a whole weekend to go yet.


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## divs4ever (22 October 2022)

waterbottle said:


> I'll board the degen train too.
> Seems that the US Treasury is considering buying back bonds + Fed officials now changing language and hinting at slowing down the pace of hikes.
> 
> 
> ...



just coincidental there are some pivotal  elections happening in the next 4 weeks ( NOT just the US )  ( let's see if the Fed Chair stays loyal to the Populists  and Patriots )

 regarding bond-buying  .. Japan needs to prop up their  Currency  , the UK needs to prop up their liquidity  ,  and somebody is ratcheting up the sanctions on China , so who else has DEEP pockets  to fund a side-show conflict during an economic collapse ( that has been building momentum since September 2019 )


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## frugal.rock (22 October 2022)

In my little world, I am seeing the economy reducing, prices stabilising.
Housing, mortgages, new house/loan applications, refinance etc all on the reduction phase.
Supermarkets doing there bit to help. Locking in prices for months ahead etc

That's not to say excessive inflation is over, but we have definitely hit near a top. It remains to be seen if it is the top or just a plateau before travelling on. I seem to think the world is just getting on with it after the plandemic and the results are slowly flowing in albeit hindered in some areas of the world.



waterbottle said:


> Phil Low may have been right



Phil has to go by the data which was/is laggy.
Perhaps they now understand the volatile nature and are using less granular data or, have employed a few more statistician's/Actuary types to source and scrutise wider data sets.
🤨🧐


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## frugal.rock (22 October 2022)

divs4ever said:


> so who else has DEEP pockets to fund a side-show conflict during an economic collapse ( that has been building momentum since September 2019 )



The suspense is killing me. Please elaborate.


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## divs4ever (22 October 2022)

frugal.rock said:


> In my little world, I am seeing the economy reducing, prices stabilising.
> Housing, mortgages, new house/loan applications, refinance etc all on the reduction phase.
> Supermarkets doing there bit to help. Locking in prices for months ahead etc
> 
> ...



 LA LA LA  ... Phil don't want to hear no bad news  , that is why the RBA doesn't work on producer prices and  housing starts ( or approvals )  

 that data is still laggy  , but not ridiculously so ,

 top ?  you ain't seen nothing , yet , you have the compounding effect of the recent rate rises ( across the globe ) which have NEVER been in front  of the price increases

 and the retailers can only do so much ( until they eat through their credit lines )


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## divs4ever (22 October 2022)

frugal.rock said:


> The suspense is killing me. Please elaborate.





 the money printer gang  ( just like in the UK  , after the last bout of forced selling  , by the instos offset by   empty wallets in the retail ) ( they were already the buyer of last resort , promoted to top buyer )

 those various  ETFs  chock full of leveraged bonds  must be starting to look educational as well  .. is it only the UK with pension fund trouble , i wonder  ??

( silly me i avoided those  ' sausage bond ' products  at first glance .. think of the lessons i could have been learning )

 i blame The Big Short  for that aversion


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## frugal.rock (22 October 2022)

divs4ever said:


> top ? you ain't seen nothing , yet , you have the compounding effect of the recent rate rises ( across the globe ) which have NEVER been in front of the price increases



If you are saying the compound effect of interest rate rises will push global inflation up further, then I don't understand. 
I had thought inflation is more a localised thing, which explains the different inflation rates around the world, and interest rate rises slow inflation due to less money to spend, thus reducing demand, etc

I'm trying to get a proper handle on where Aus is at. 

I had also thought with overall general supply normalising again post covid, that would help settle inflation.

I understand the effect of energy costs also affecting inflation, but even that seems to be priced in by the markets, but that's a very laggy indicator on domestic retail.  @over9k you seem to explain stuff the way I can understand.
 What am I missing?


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## over9k (22 October 2022)

@frugal.rock What are you missing about what? What divs is trying to say?

I think he's referring to supply side problems caused by rate rises, hence the comment about retailers using all their lines of credit. 

Higher rates reduce demand yes but they also make supply expansion harder to finance. They're not an entirely one-way instrument. People often forget this.


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## frugal.rock (22 October 2022)

over9k said:


> What are you missing about what? What divs is trying to say?



Thanks for clearing up the finance bit.

So, if I'm reading this right, the economy at the street level, which is what I'm seeing and referring to, seems to me to be indicating a slow down, retraction , etc.

However, are you pundits saying  what I am seeing is expected to be just a minor blip or plateau, before inflation continues on & up? 

Apart from finance and energy, what other factors should I consider moving forward.  

I'm constantly in a state of "the more I learn, the less I know" 😬


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## over9k (22 October 2022)

frugal.rock said:


> what other factors should I consider moving forward



Labour supply and national debt(s) for starters and then geopolitics after that. Take a look at australia's immigration levels over the last few months - from zero up to the 6 figures per annum point right as inflation really starts to bite and unemployment starts to increase (and job ads decrease).

Plenty of countries can plug their baby-bust problem with immigration, particularly english speaking ones. Others like germany, korea, japan etc have much more of a problem.

Next is national debt burden(s) as interest rates (borrowing costs) increase.

Then there is the massive curveball of china's covid lockdowns cutting the supply of stuff everywhere but also the demand for energy. Should said lockdowns lift, everything will absolutely scream, both energy demand and supply of whatever china's exporting to whoever's buying it, which will improve the "stuff bought from china" inflation problem but only exacerbate the energy one. They will obviously want a lot more of AU's rocks etc once they get their mills running properly again. This is probably the single biggest uncertainty/headache for australia going forward as if they keep pummeling their economy then they keep pummeling this one.

Finally, there's the economic sanctions on china and/or russia. Some simple googling will tell you what they are and you can extrapolate from there. There appears to be absolutely zero probability of these lifting and a high probability of them getting worse. As to whether this does things like, say, force xi jinping's hand into lifting their covid lockdowns for example is anyone's guess.


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## over9k (22 October 2022)

So yeah, I can't tell you what *will* happen next but I can tell you what will determine what happens next. Hope that helps.


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## over9k (22 October 2022)

My own opinion re: inflation is that the U.S strategic oil reserves are finite and already about 50% drained, china's economy is all but breaking under the strain of their lockdowns, even when opec had the taps running almost flat out we still had massive oil price problems and they've just cut 2 million barrels/day, venezuela's collapsed, libya was destroyed, there's no gas pipelines into europe from the usa or saudi arabia (and almost no delivery facilities by sea), and their storage tanks aren't nearly big enough to last the next 4-5 months. The only saving grace is that it looks like it's going to be a relatively mild winter by northern hemisphere standards.

There is an oil pipeline from the middle-east but they've just deliberately cut the supply off in an effort to bolster prices and there's basically nothing anyone can do to change it so that K.O's the oil supply too.

The EU's already committed hundreds of billions in support in the same way they did for covid but this time it's to enable things like factories (which people work at and which use a lot of energy) to get mothballed for a few months so there's enough oil and/or gas left over for heating through their winter. This, too, cannot go on forever.

So yeah, it's kind of going to be like the covid lockdowns for them all over again but this time it will be TO save energy rather than energy demand collapsing as a side-effect. Their ONLY other supply option is USA and the political pressure there re: oil prices is rising precipitously.

History doesn't repeat but it often rhymes hey?


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## divs4ever (22 October 2022)

frugal.rock said:


> If you are saying the compound effect of interest rate rises will push global inflation up further, then I don't understand.
> I had thought inflation is more a localised thing, which explains the different inflation rates around the world, and interest rate rises slow inflation due to less money to spend, thus reducing demand, etc
> 
> I'm trying to get a proper handle on where Aus is at.
> ...



 due to the widespread excessive printing AND supply side issues  , and glitches in globalization  (  particularly the smooth flow of liquidity )

 i am suspecting something unpleasant and MAYBE unprecedented  ( or at least very difficult to find in recorded history )

 we also have an astounding amount of debt liabilities  and a situation where the ORIGINAL lender  is often at the bottom of the priority list 

 Aus is most likely a hapless  leaf floating  in a stormy ocean  , especially now we have distanced ourselves from China  ( MAYBE India would throw a lifeline , but  we aren't that integral  to their manufacturing base , like we were to China in 2008 )

 look at our  'five eyes partners ' and none can boast a robust economy  ( truthfully )


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## Value Collector (22 October 2022)

divs4ever said:


> we also have an astounding amount of debt liabilities  and a situation where the ORIGINAL lender  is often at the bottom of the priority list




Globally though Net debt is $0.


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## divs4ever (22 October 2022)

not if they have to pay out CDS swaps ( and other derivatives ) that might be incalculable 

 several pension funds have massive unfunded liabilities ( and that seems to be just the US )

 but of course they could always print more US dollars


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## Knobby22 (23 October 2022)

divs4ever said:


> not if they have to pay out CDS swaps ( and other derivatives ) that might be incalculable
> 
> several pension funds have massive unfunded liabilities ( and that seems to be just the US )
> 
> but of course they could always print more US dollars



We have the ability to pay off our debt quickly however it would involve taxing the multinationals exporting our gas and minerals more effectively.


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## Smurf1976 (23 October 2022)

Value Collector said:


> Globally though Net debt is $0.



Doesn't our fiat monetary system create the principal but not the interest thus making debt in total unrepayable?


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## over9k (23 October 2022)

Smurf1976 said:


> Doesn't our fiat monetary system create the principal but not the interest thus making debt in total unrepayable?



Debt in total or net debt?

Debt itself will never disappear unless you outlaw lending money. GL with that.


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## mullokintyre (23 October 2022)

meanwhile, in the world of what IS happening rather than what should/might/in theory happening, a plunge in container imports into the LA ports  probably needs to be taken into account .
From FreightWaves


> September is usually a strong month for West Coast imports as U.S. companies bring in their year-end holiday goods. Not so in 2022.
> 
> On Wednesday, the Port of Los Angeles reported its lowest import total for September since 2009, amid the Great Recession. The day before, the neighboring Port of Long Beach posted its weakest import total for September since 2016.
> 
> ...



It remains to be seen whether it is a timing issue of imports, or it is a sign of some  big recessionary cutbacks to come.
The other  big indicator, the BDI , has stabilised around the 1800 mark after crashing to  750 in September, but it is still down nearly 60% since the beginning of the year.
Mick


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## over9k (23 October 2022)

mullokintyre said:


> meanwhile, in the world of what IS happening rather than what should/might/in theory happening, a plunge in container imports into the LA ports  probably needs to be taken into account .
> From FreightWaves
> 
> It remains to be seen whether it is a timing issue of imports, or it is a sign of some  big recessionary cutbacks to come.
> ...



Yeah this was always going to happen. Look at peloton for the poster boy for this. Everyone bought every_thing _in the pandemic and now they don't need another fridge/couch/exercise bike/laptop/whatever for years and years.


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## qldfrog (23 October 2022)

mullokintyre said:


> meanwhile, in the world of what IS happening rather than what should/might/in theory happening, a plunge in container imports into the LA ports  probably needs to be taken into account .
> From FreightWaves
> 
> It remains to be seen whether it is a timing issue of imports, or it is a sign of some  big recessionary cutbacks to come.
> ...



On a local related subject, i have been told on the grapevine that containers price in Australia are heading down steeply ahead ,  due to a flood of containers ..aka reduced commerce?
This could put an end to some supply issues based inflation .


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## divs4ever (23 October 2022)

Knobby22 said:


> We have the ability to pay off our debt quickly however it would involve taxing the multinationals exporting our gas and minerals more effectively.



 but if you ' tax them effectively ' ( they are already paying royalties and other government costs ) , where is the incentive  to spend five to ten years  planning and building  the mine ( and various other plant and infrastructure ) add in many Western Governments change every 3 or 4 years  along with  random policy changes  , and commodity prices and currency fluctuations .

 remember  the average working mine  evolved from at least a year of successful exploration  ( not all exploration  leads to a feasible project )  a prolonged wade through various approvals ( and sometimes concerned citizens protests  , and you still haven't started  prepared the ground for resource extraction . ... AND plant and equipment doesn't last forever  it will need to be replaced/upgraded/repaired .

 MAYBE more effective use  of tax revenue ( as suggested by the late Kerry Packer ) would be better   

 tax the resources too much  ( and commodity prices drop )  and you have a mothballed ( or abandoned ) mine ( ala the nickel mines of PAN and MCR a couple of years back ) and you get no tax incomes from that mine  until a restart


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## InsvestoBoy (23 October 2022)

Smurf1976 said:


> Doesn't our fiat monetary system create the principal but not the interest thus making debt in total unrepayable?




If the debt is productive and grows the economy, it can of course be repaid.

If the debt is unproductive or promotes malinvestment then it probably can't be repaid, in aggregate. Nothing stops individuals who take out loans to buy a jet-ski from repaying that loan if they wish to and are able do so.

Total debt is reasonably a mix of both, if you believe in capitalism then it's reasonable to believe more of it is productive (because why would the lender make unproductive loans that are less likely to be paid back in aggregate) than not.

The question however is premised entirely on whether the debt should ever be repaid in total and the answer is probably not.

This is a credit based (not fiat based) money system, aggregate debt repayment is aggregate monetary destruction and commensurate shrinking in economic size and activity.


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## frugal.rock (23 October 2022)

qldfrog said:


> On a local related subject, i have been told on the grapevine that containers price in Australia are heading down steeply ahead ,  due to a flood of containers ..aka reduced commerce?
> This could put an end to some supply issues based inflation .



I had heard there was a lot of empty containers sitting around at various port's. 
There was talk of forcing the clearing of  empties backlog as they were starting to impede movements.
Fines were imposed by some ports for containers sitting more than 14 days on wharf and even less days for train carried based containers.


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## divs4ever (23 October 2022)

qldfrog said:


> On a local related subject, i have been told on the grapevine that containers price in Australia are heading down steeply ahead ,  due to a flood of containers ..aka reduced commerce?
> This could put an end to some supply issues based inflation .



maybe  , reduced demand  ( as opposed  to the delivery of delayed orders ) and now the customers ( and businesses ) are  financially constrained .


InsvestoBoy said:


> If the debt is productive and grows the economy, it can of course be repaid.




 yes , you are correct  , sadly the other option is more popular  in many places ( both at local and national level )

 and equally sadly .. popularity wins elections  ( so those fiscal tightwads normally go unelected  , and unheeded when they are consultants )


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## Value Collector (23 October 2022)

Smurf1976 said:


> Doesn't our fiat monetary system create the principal but not the interest thus making debt in total unrepayable?



Nope, thats a fallacy.

The fallacy suggests that if you loan $100 into existence and charge $5 interest, the total amount of $105 which is repayable is impossible to repay because only $100 exists, this ignores the fact that the debt and interest doesn't have to be paid all at once, and the interest charges can be spent back into the economy allowing debts much larger than the actual original principle amounts to be paid off.

This fallacy can easily be shown to be false with a simple example, Lets say we live on an Island just the two of us, and only one single $1 coin exists and I own it. Say you lose a $100 bet and now owe me $100, some people would say that debt could never be paid because only $1 exists. However those people are missing huge point, you could collect a coconut for me each day and I pay you $1 for the coconut and each day when I pay you that $1 you make a $1 payment of that $100 debt.

So even by only having $1 cycling through our island economy, you can repay $100 in principle just by the lender spending that money back into existence.

All the reserve banks "profits" get spent on their running costs or paid to the government, either way the interest is recycled back into the economy where it can be earned and used to clear debt again. It's production that creates the value to clear debt, not the actual amount of money that exists at any one time, because money can pass through many hands.


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## divs4ever (23 October 2022)

frugal.rock said:


> I had heard there was a lot of empty containers sitting around at various port's.
> There was talk of forcing the clearing of  empties backlog as they were starting to impede movements.
> Fines were imposed by some ports for containers sitting more than 14 days on wharf and even less days for train carried based containers.



 hadn't heard about the proposed fines  , but did hear stories ( possibly untrue , since i don't have sources on the wharves now ) that some  long-staying containers were still full ( consignments to failed businesses , or goods  ordered in advance , or just  deliveries stalled by logistics snarls 

 and yes  there was plenty of news on empty containers  that can't find a boat back home  ( often to China ) let alone a load to fill it  before leaving the wharf


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## frugal.rock (23 October 2022)

The fines thing was in the US, I think.
Not trying to be specific though, just generalisation without a quoted source.

Quick google








						Ocean carriers will pass on fines to importers for lingering containers
					

The Los Angeles/Long Beach cargo community is confused about punitive fees on ocean carriers designed to expedite the clearance of containers from marine terminals.




					www.freightwaves.com


----------



## Value Collector (23 October 2022)

InsvestoBoy said:


> If the debt is productive and grows the economy, it can of course be repaid.
> 
> If the debt is unproductive or promotes malinvestment then it probably can't be repaid,




I wouldn't even say that it has to grow the economy to be repaid, the economy can stay exactly the same size as debt does is transfer some of the purchasing power from the borrower to the lender.

For example, if Tom and Ben spend $100 a week each, we have a $200 economy. If Tom borrows $100 from Ben and spends $200 and Ben spends nothing that week will still have $200 spending/economy. Next week when the loan payments start Tom will only have $90 to spend because he has to pay Ben $10/week, but Ben has $110 to spend, the unproductive loan can still be paid off, even though the $200 economy has remained they same.


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## Value Collector (23 October 2022)

frugal.rock said:


> I had heard there was a lot of empty containers sitting around at various port's.
> There was talk of forcing the clearing of  empties backlog as they were starting to impede movements.
> Fines were imposed by some ports for containers sitting more than 14 days on wharf and even less days for train carried based containers.



Its been expected that there would be a glut of containers eventually, due to the excessive amounts that were made in 2020/2021 due to the shipping crunch, they ports were so slammed that they weren't returning empty containers back to china so china was mass producing them just to keep up.

check out this video at the 4 min mark to see a brief explanation of what caused the over production of shipping containers.


----------



## Knobby22 (23 October 2022)

divs4ever said:


> but if you ' tax them effectively ' ( they are already paying royalties and other government costs ) , where is the incentive  to spend five to ten years  planning and building  the mine ( and various other plant and infrastructure ) add in many Western Governments change every 3 or 4 years  along with  random policy changes  , and commodity prices and currency fluctuations .
> 
> remember  the average working mine  evolved from at least a year of successful exploration  ( not all exploration  leads to a feasible project )  a prolonged wade through various approvals ( and sometimes concerned citizens protests  , and you still haven't started  prepared the ground for resource extraction . ... AND plant and equipment doesn't last forever  it will need to be replaced/upgraded/repaired .
> 
> ...



Shell has acknowledged that it will never pay any petroleum resource tax over the life of the project. 









						Gas giants paying zero income tax on Australian operations, new data shows
					

As the gas and oil industry gathers in Brisbane for the annual APPEA summit, data shows some member companies paid no income tax for past seven years.




					www.google.com.au


----------



## divs4ever (23 October 2022)

Value Collector said:


> Nope, thats a fallacy.
> 
> The fallacy suggests that if you loan $100 into existence and charge $5 interest, the total amount of $105 which is repayable is impossible to repay because only $100 exists, this ignores the fact that the debt and interest doesn't have to be paid all at once, and the interest charges can be spent back into the economy allowing debts much large than the actual original principle amounts to be paid off.
> 
> ...



 OH NO ! now you are arguing  currency is a token of work/productivity  done ( or to be done in the future )

 that is a crazy ( but correct ) concept that will topple governments ( those that embrace MMT , carelessly ) and ruin ( false ) economies 

 now currently  that debt  is often NOT being repaid  , the debt ( interest ) is being serviced  and the original capital is being refinanced  ( more likely at a higher interest rate in the current trend )

 now another problem of this cycle  is the trend of the original $100  being loaned , was that the $100 had been pulled from FUTURE productivity ( which may or may not happen )   ( after all the original scenario  contained a single $1 coin  which doesn't seem to have changed hands  , much like Central Bank gold reserves )

 i love the example by the way  , it explains more the deeper you analyze it 

 cheers


----------



## divs4ever (23 October 2022)

qldfrog said:


> On a local related subject, i have been told on the grapevine that containers price in Australia are heading down steeply ahead ,  due to a flood of containers ..aka reduced commerce?
> This could put an end to some supply issues based inflation .



 maybe  , reduced demand  ( as opposed  to the delivery of delayed orders ) and now the customers ( and businesses ) are  financially constrained .


----------



## JohnDe (23 October 2022)

Knobby22 said:


> We have the ability to pay off our debt quickly however it would involve taxing the multinationals exporting our gas and minerals more effectively.




Pay particular attention from 1:25


----------



## divs4ever (23 October 2022)

Knobby22 said:


> Shell has acknowledged that it will never pay any petroleum resource tax over the life of the project.
> 
> 
> 
> ...



 is that the company's fault  , or the weakness of government negotiations 

 for example originally gas was considered and noncommercial ( waste ) by-product   of oil production   ( and flared )

 would a government prefer that gas burnt at the extraction site ( at no profit to anybody ) , or MAYBE used  in the power generating plants  and elsewhere in the global economy  ( it is still liable to be burnt somewhere, sometime while oil production proceeds )

 i also note a tiny word 'INCOME '  most energy companies  pay royalties ( to the states , and sometimes others ) they also pay taxes  on various other parts of the production cycle ( maybe even carbon credit offsets to Europe )  there are also other costs and remediation costs involved   INCLUDING upfront guarantees  on remediation costs  ( effectively lending the state government money , probably interest-free )

 and in the case of some nations  upfront bribes ( normally are undocumented ) are an unofficial tax as well 

 now i hold WDS ( Woodside ) and BPT  which apparently were not invited to the meeting  , but my hazy recollections of Santos makes me wonder  how much TAXABLE profit did it make in those years  ( income is NOT profit ) if STO fulfilled its tax obligations , the problem is elsewhere .

ANOTHER issue glossed over is the trend to adjust government policy  after the horse has bolted  , this will reduce future investor sentiment ( one reason i avoided investing into Africa until recently  , but now global standards are slipping  , why not Africa and PNG )

 i would  have told you about my loss of confidence in the government on this subject , but that confidence had completely vanished by February 2020 ( and i am NOT restricting that to politicians )


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## Value Collector (23 October 2022)

divs4ever said:


> now currently  that debt  is often NOT being repaid  , the debt ( interest ) is being serviced  and the original capital is being refinanced  ( more likely at a higher interest rate in the current trend )
> 
> cheers




Some Debt isn’t meant to be ever paid back, in a lot of cases Debt can be a permanent part of the capital structure of certain organisations like shares, in these cases shares holders and bond holders are equally permanent investors in the institution they just have accepted different risk vs reward profiles, but both made semi permanent allocations of capital to the business.

Think about the Rail Roads or other infrastructure utility businesses that sold 30 - 100 year bonds, these bonds do have a maturity date when the capital is to be paid back, but they are so long dated they are for all intents and purposes similar to shares just with fixed “dividends” and a fixed “share buy back date and price”.

Some bonds are perpetual meaning they don’t ever have to be paid back as long as the interest is paid, these are even more like a share.

One of the oldest active bonds in the world is a perpetual bond is Dutch that I believe is about 400 years old, it was issued to pay for a dam wall to be built, and pays about $1000 interest per year, the water utility that inherited the debt still pays the estate that owns the bond.


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## divs4ever (23 October 2022)

JohnDe said:


> Pay particular attention from 1:25




 now first off  .. one ( officially  ) unemployed  person  for every job vacancy  .. looks simple BUT is that person ( or any unemployed person ) qualified and certified for that vacancy  , if so why are we searching the globe for people who MIGHT be qualified ( subject to certification )  to fill that vacancy 

  now one might ask why somebody   would operate an energy extraction company in Norway  and not close it down  and shift resources and staff to say 'low-tax' Australia   ( maybe it is something to do with the Norwegian government having financial stakes  in some of those companies  either directly  over via Norges  share-holdings )

 welcome to the Winter of Discontent 

 enjoy


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## divs4ever (23 October 2022)

Value Collector said:


> Some Debt isn’t meant to be ever paid back, in a lot of cases Debt can be a permanent part of the capital structure of certain organisations like shares, in these cases shares holders and bond holders are equally permanent investors in the institution they just have accepted different risk vs reward profiles, but both made semi permanent allocations of capital to the business.
> 
> Think about the Rail Roads or other infrastructure utility businesses that sold 30 - 100 year bonds, these bonds do have a maturity date when the capital is to be paid back, but they are so long dated they are for all intents and purposes similar to shares just with fixed “dividends” and a fixed “share buy back date and price”.
> 
> ...



 and that is why  i am very careful  to whom i lend money to ( and resist  bond ETFs  where you have no control over your investment decisions )

 ALSO there is  the risk the borrower ( especially if a state actor ) will change the terms  of such a loan  , OR adjust inflation rates in their favour  ( think Bank of England and GILTS  )


----------



## Value Collector (23 October 2022)

divs4ever said:


> and that is why  i am very careful  to whom i lend money to ( and resist  bond ETFs  where you have no control over your investment decisions )
> 
> ALSO there is  the risk the borrower ( especially if a state actor ) will change the terms  of such a loan  , OR adjust inflation rates in their favour  ( think Bank of England and GILTS  )



The investors in those long dated semi permanent or perpetual bonds know (or should know) what they are signing up for. 

Yep, there is risk with bonds just like there is with shares and all the other instruments and securities you might choose to deploy your hard won capital into. It’s up to each investor to decide exactly what parts of the capital markets he wants to participate in.

Everything has risk, even cash at bank or gold bars in a safe have risks and costs.

Whether you decide to put your cash in a CBA cash account, a CBA bond or debt security or shares in CBA each option has its own risks and rewards, it’s up to you as an investor to decide which options appeal to you based on their range of possible outcomes under different circumstances.


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## InsvestoBoy (23 October 2022)

Value Collector said:


> I wouldn't even say that it has to grow the economy to be repaid, the economy can stay exactly the same size as debt does is transfer some of the purchasing power from the borrower to the lender.
> 
> For example, if Tom and Ben spend $100 a week each, we have a $200 economy. If Tom borrows $100 from Ben and spends $200 and Ben spends nothing that week will still have $200 spending/economy. Next week when the loan payments start Tom will only have $90 to spend because he has to pay Ben $10/week, but Ben has $110 to spend, the unproductive loan can still be paid off, even though the $200 economy has remained they same.




Are we really going to pick this nit?

If you reduce it to an absurd example of two people with magical spending based on 🤷‍♂️ income and no priors then sure you can make anything work.

Generally speaking, in the aggregate of an economy, especially a globally interconnected credit economy, debts that fuel productive activity are easier to pay off than debts that don't. Like I said, in aggregate. Not two people.


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## InsvestoBoy (23 October 2022)

divs4ever said:


> yes , you are correct  , sadly the other option is more popular  in many places ( both at local and national level )
> 
> and equally sadly .. popularity wins elections  ( so those fiscal tightwads normally go unelected  , and unheeded when they are consultants )




Like I said, this is largely not the case. Most debt in capitalist economic systems, in aggregate is productive, even today, when the marginal GDP produced by each dollar of debt is lower than it has ever been.


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## divs4ever (23 October 2022)

Value Collector said:


> The investors in those long dated semi permanent or perpetual bonds know (or should know) what they are signing up for.
> 
> Yep, there is risk with bonds just like there is with shares and all the other instruments and securities you might choose to deploy your hard won capital into. It’s up to each investor to decide exactly what parts of the capital markets he wants to participate in.
> 
> ...



'should ' i agree  but many put their  faith in fund managers ( i hold CAM and IBC  which gives  me a small indirect exposure  to interest-rate bearing securities )

 and previously  ( mostly before 2017 )  gleefully  , and with overall success  parked money in that sector ( including two perpetual instruments  both redeemed after refinancing moves ) , so yes i understand the  difference between 'yields' and ' coupon-rate '  and the importance of BBSW on your returns  ( and the current capital value of your investment )

 AND i see many of examples  of sovereign bonds and bills  described as 'risk-free'  and NOT by uninformed retail investors , either (much  to my annoyance )

 risks yes ,  even cash ( of no collector value )   stored in the drawer/under the mattress runs the risk of incremental loss by inflation 

 however cautions such as yours  , are often  hidden in the fine print  , or quickly skipped over  to accomplish sales or commissions more easily 

 i remember my first ( and only ) financial adviser   carefully ( without disclosure ) steered me towards a company product  , which was probably a lucky break for me  , i decided to make all those decisions myself  , saving myself some fees , commissions  , at the diminution of innocence and naivety


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## waterbottle (23 October 2022)

Xi Jinping in for a 3rd term


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## divs4ever (23 October 2022)

InsvestoBoy said:


> Are we really going to pick this nit?
> 
> If you reduce it to an absurd example of two people with magical spending based on 🤷‍♂️ income and no priors then sure you can make anything work.
> 
> Generally speaking, in the aggregate of an economy, especially a globally interconnected credit economy, debts that fuel productive activity are easier to pay off than debts that don't. Like I said, in aggregate. Not two people.



 won't be globally interconnected  for long 

 regarding ' no priors '  my first  property investment   was pushed into 'sub-prime ' mortgage ( and second mortgage ) because i had 'no credit history '  as time went by i proved to be  a better credit risk  than  both finance companies and the property vendor  ( all of which are no longer in business )

  two people as a  a beginning example is excellent  , given many people  were flashed  past basic maths onto 'computer programming ' and web design  , bypassing sophisticated concepts like the Austrian School of Economics  .

 even now at professional levels Keynesian and MMT are embraced  with enthusiasm ( while deriding the consequences of the wanton application  of those theories )


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## divs4ever (23 October 2022)

waterbottle said:


> Xi Jinping in for a 3rd term



 did you really expect a different result  , next time , yes  he will be theoretically  too old ( so a rule change would be needed  for him to continue   , so maybe there will be uncertainty in five years time )

 watch  for the next leader to be groomed  and eased up the ladder to the top job ( or not  ) , given the CCP hopes each leader will reign for at least 10 years 

 now of course the CCP regime could fall ( maybe copying the the rise of the Russian Federation ) completely out of sync  to the West  who are marching lock-step to a totalitarian world


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## Value Collector (23 October 2022)

InsvestoBoy said:


> Are we really going to pick this nit?
> 
> If you reduce it to an absurd example of two people with magical spending based on 🤷‍♂️ income and no priors then sure you can make anything work.
> 
> Generally speaking, in the aggregate of an economy, especially a globally interconnected credit economy, debts that fuel productive activity are easier to pay off than debts that don't. Like I said, in aggregate. Not two people.



I am just pointing out that the economy doesn’t rely on growth to pay down debt, it just relies on activity, it can be the same level of activity of more activity or less activity. 

But, also related to my other posts, total debt doesn’t have to go down for an economy to be healthy, healthy economies can persist with perpetual debt, debt isn’t bad, even non productive debt isn’t bad.

Debt is only bad at an economy level when large amounts of it can’t be serviced, and must be defaulted.


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## Value Collector (23 October 2022)

divs4ever said:


> 'should ' i agree  but many put their  faith in fund managers ( i hold CAM and IBC  which gives  me a small indirect exposure  to interest-rate bearing securities )
> 
> and previously  ( mostly before 2017 )  gleefully  , and with overall success  parked money in that sector ( including two perpetual instruments  both redeemed after refinancing moves ) , so yes i understand the  difference between 'yields' and ' coupon-rate '  and the importance of BBSW on your returns  ( and the current capital value of your investment )
> 
> ...



A government bond from a country such as the USA, has got to be the closet thing to “risk free” as can exist, as I said n thing is risk free, but I can’t think of anything with less risk than a USA treasury bond.

I mean cash at bank up to certain levels is basically risk free because of the government guarantee, but if you trust the government to guarantee your bank account you have to trust their bonds.

I mean if your goal was to preserve $1 Billion dollars (ignoring inflation), I can’t think of a safer place to put it than government bonds of a country like the USA where they control the printing presses.


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## waterbottle (23 October 2022)

divs4ever said:


> did you really expect a different result  , next time , yes  he will be theoretically  too old ( so a rule change would be needed  for him to continue   , so maybe there will be uncertainty in five years time )
> 
> watch  for the next leader to be groomed  and eased up the ladder to the top job ( or not  ) , given the CCP hopes each leader will reign for at least 10 years
> 
> now of course the CCP regime could fall ( maybe copying the the rise of the Russian Federation ) completely out of sync  to the West  who are marching lock-step to a totalitarian world




No not really, but it doesn't give him free reign to do whatever he wants... Maybe this is the end of the covid lockdowns


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## qldfrog (23 October 2022)

InsvestoBoy said:


> Like I said, this is largely not the case. Most debt in capitalist economic systems, in aggregate is productive, even today, when the marginal GDP produced by each dollar of debt is lower than it has ever been.



If the GDP grow by 50 billions after a stimulus of 100 billions, do you consider this a productive use of debt..to fund the stimulus?
Genuinely interested in your view.
While the figures are chosen for simplicity, the case is actually real and relates to a gdp increase seen as growth a couple of months ago while the $ increase to the economy was lower than the stimulus amount 
The newspapers at the time were rejoicing about the Australian economy growth....


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## bluekelah (23 October 2022)

divs4ever said:


> did you really expect a different result  , next time , yes  he will be theoretically  too old ( so a rule change would be needed  for him to continue   , so maybe there will be uncertainty in five years time )
> 
> watch  for the next leader to be groomed  and eased up the ladder to the top job ( or not  ) , given the CCP hopes each leader will reign for at least 10 years
> 
> now of course the CCP regime could fall ( maybe copying the the rise of the Russian Federation ) completely out of sync  to the West  who are marching lock-step to a totalitarian world



Xi has an only son who is now 30yrs old. I am pretty sure he will pave the way for his son to take over, or at least he will try. Same as Putin who thinks of himself as a new age Tsar, Xi is probably having the same mindset of being a new age emporer 

I dont think CCP will fall per se (it would take another revolution, very hard to do in today's world where information is easily monitored and censored) but i think economically China is getting much closer to a similar situation to Japan just based on a very quickly ageing demographic and population decrease. So economically falling is more of a certainty than regime change.

West side it will be very interesting to watch what happens in Europe with the war / "energy crisis" / "financial crisis" /inflation all happening at the same time, something looks like about to break anyday.

Yanks are still dandy till election time as it seems somehow 3Q GDP to be reported next week will be very positive.  Which will mean more rate rises, higher oil prices and higher USD killling the rest of the world.


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## Value Collector (23 October 2022)

qldfrog said:


> If the GDP grow by 50 billions after a stimulus of 100 billions, do you consider this a productive use of debt..to fund the stimulus?
> Genuinely interested in your view.




Yes, if the alternative was a drop by $250 Billion, for example if the economy was on track to going to lose $250 Billion and instead grew by $50 Billion then that $100 Billion investment was great value.

Also, if it only took a $100 Billion investment it create growth of $50 Billion growth in GDP that stuck around for a few years then yes that would probably also be a good investment.


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## divs4ever (23 October 2022)

bluekelah said:


> Xi has an only son who is now 30yrs old. I am pretty sure he will pave the way for his son to take over, or at least he will try. Same as Putin who thinks of himself as a new age Tsar, Xi is probably having the same mindset of being a new age emporer
> 
> I dont think CCP will fall per se (it would take another revolution, very hard to do in today's world where information is easily monitored and censored) but i think economically China is getting much closer to a similar situation to Japan just based on a very quickly ageing demographic and population decrease. So economically falling is more of a certainty than regime change.
> 
> ...



 Xi's father was only a high-ranking general in the Mao  army , all those other CCP  top level  will have some children as well  , so whoever rises to the top will need more than just bloodlines  , i believe there is an age limit ( unless it is changed  within the coming 5 years ) so Xi  might be expected to stand down  to a less stressful post  ( maybe very senior adviser to the new president )

 China has the opportunity  to reverse the aging demographic  issue  , but whether it chooses to  , or can do so successfully  remains to be seen  . ( China can always lure ethnic Chinese back to the mainland  , hundreds might be enough to reverse the trend , over time )
 China MIGHT be happy to see India leap-frog it to become top economy  , taking the pressure of expectations off of China  ( for another 100 years or so ) giving it time to sort out it's own internal problems first ( and focus on exploring space )

 the West ?? i guess time will tell  , i think the Taiwanese ( intelligence services ) got it right laughing at the greedy kleptocrats  , that fell into all sorts  of traps and honey-pots


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## divs4ever (23 October 2022)

qldfrog said:


> If the GDP grow by 50 billions after a stimulus of 100 billions, do you consider this a productive use of debt..to fund the stimulus?
> Genuinely interested in your view.
> While the figures are chosen for simplicity, the case is actually real and relates to a gdp increase seen as growth a couple of months ago while the $ increase to the economy was lower than the stimulus amount
> The newspapers at the time were rejoicing about the Australian economy growth....



 depends  on how they count  GDP , now 

 maybe GDPs ain't all the same  ( data calculation method )


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## Smurf1976 (23 October 2022)

Value Collector said:


> Nope, thats a fallacy.
> 
> The fallacy suggests that if you loan $100 into existence and charge $5 interest, the total amount of $105 which is repayable is impossible to repay because only $100 exists, this ignores the fact that the debt and interest doesn't have to be paid all at once, and the interest charges can be spent back into the economy allowing debts much larger than the actual original principle amounts to be paid off.



I won't claim to be an expert on this but I'm not convinced. At least not yet.....  

Now I'm not a central banker but let's suppose I am. I'm the CB and you owe the money.

To be clear, the task is to repay the debt in full. That means you can't take out a new debt in order to repay the existing one. You need to hand me the $105 and clear the debt completely. That's the task - to actually repay all the debt.

I can follow where you get the $100 from. I as the central banker created it. Assuming you haven't lost or set fire to it, it must be around somewhere.

Where does the $5 come from? I haven't created this and I don't allow anyone else to print money.

What am I missing here?


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## mullokintyre (23 October 2022)

Smurf1976 said:


> What am I missing here?



A creative accountant.
Mick


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## divs4ever (23 October 2022)

Smurf1976 said:


> I won't claim to be an expert on this but I'm not convinced. At least not yet.....
> 
> Now I'm not a central banker but let's suppose I am. I'm the CB and you owe the money.
> 
> ...



 the simple  answer  is you create some more  but sign a separate deal to lend it out  ( to say the greengrocer  , and he employs the original borrower so he/she  can earn the extra dollars )

 now where  your question gets complicated is  not everybody  uses every dollar to repay the debts owed to you FIRST , some use  the dollars to invest ( or lend to someone else ) that will give them  more than the interest owed to the CB , or buy some food ( so take longer to repay )

 or instead of getting money back  you seize ( via the courts ) cars , property ,  etc etc .. you know tangible , useful stuff


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## frugal.rock (23 October 2022)

Billionaire investor Barry Sternlicht says Jerome Powell and ‘his merry band of lunatics’ are destroying faith in capitalism and leading us toward 'social unrest'
					

“The poor guy who's working in an hourly job that loses that job, he's going to say: ‘Capitalism is broken, it didn't work for me. I lost my job. And this whole system has to go out the door,’” Sternlicht told Fortune.




					fortune.com


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## Value Collector (23 October 2022)

Smurf1976 said:


> I won't claim to be an expert on this but I'm not convinced. At least not yet.....
> 
> Now I'm not a central banker but let's suppose I am. I'm the CB and you owe the money.
> 
> ...



Let’s say that $100 you created is made up of 20 x $5 notes, Now my goal is to hand over 21 x $5 notes to you which equals the $105 I owe you.

You seem to think it’s impossible to hand over 21 x $5 notes because you only created 20.

But here is the catch, say I spent the $100 on a lawn mower. Now the lawn mower sales man has the $100, But I Then Mow his lawn and he pays me $5. I then take that $5 an pay you/banker, you take the $5 and pay your security guard, I mow the security guards lawn for $5 then pay you the $5, you pay that five dollars as a dividend to the government, and they pay the PM’s wage of $5, I go mow the PM’s lawn and earn $5 then pay you etc etc etc.

Those same 20 $5 notes can keep circulating and each time I earn one I can clear some of my debt.

The principle amount of the loan is cleared and the interest amount can also be cleared as the central bank or government spends that interest and allows me to earn it and make a payment.

————————

Central banks don’t just stock pile all their interest they earn, it’s either spent back into the economy via their running costs, or paid to the government as a dividend and they spend it.

Provided any interest on the loans is spent back into the economy so that it can be earned by the borrowers there will never be a shortage of money to repay both principle and interest.


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## mullokintyre (24 October 2022)

One of the often forgotten aspects of "slowdowns", is that it is very rarely across the board.
Even in the  "Recent Pandemic" (TM), almost everyone was affected, but some far more than others.
The well heeled would have had no problem working from home, despite the inconvenience of having to cook ones own meals more frequently.  The folks working in transport,  retail salespersons, the hospitality staff, cleaners , and event  wokers would have had difficulty working from home, even assuming they had the space to set up an  "office".
And of course, in EVERY instance, it is those at the bottom who feel it first.
Already under the pump as they juggle paying rent versus food versus energy bills versus health expenses, even small changes in the cost of living have a profound effect on their day to day choice.
The area that @JohnDe highlighted is I would suspect looking at the photographs, very much an upmarket  area that the riff raff would be easily  kept out by the higher prices.
However, if you went to some working class areas , spoke to the shopkeepers, the publican and the bloke who runs Maccas (won't find too many proper restaurants in those areas), you may find a very different story. 
They will all be feeling a slowdown as their customers have inflationary pressures well above their meagre wages increases.
Lifes tough at the top.
But is complete crap at the bottom.
Mick


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## JohnDe (24 October 2022)

mullokintyre said:


> ...The area that @JohnDe highlighted is I would suspect looking at the photographs, very much an upmarket  area that the riff raff would be easily  kept out by the higher prices.
> However, if you went to some working class areas , spoke to the shopkeepers, the publican and the bloke who runs Maccas (won't find too many proper restaurants in those areas), you may find a very different story....
> But is complete crap at the bottom.
> Mick




Sorry to implode your theory, however, the area that I showed is not an 'upmarket area'. It is in fact a very working-class area, a major grain distribution port.

The town had an important smelter built in the 1850's and closed in the 1930's, leaving large sections of prime land contaminated and strewn with debris. With the smelter and mining closed the town's population shrank by 70%, with the only source of income being grain storage and distribution. Local government could not afford to clean and clear contaminated land, there was no recourse to claim compensation from the long-gone smelter owners. Over the past decades there has been several attempts to entice businesses and conglomerates to create wealth and fund clean ups. A few started but nothing serious came from it, until about 20 years ago. A multi-national company came with some big ideas which included multistage developments, got approval and reclaimed part of the land and started building. Stage 1 completed in about 2009, and then hard times hit. A few attempts to restart, some convoluted building, and finally a new bigger company got on board with new improved plans, working with local government everything was going forward nicely but then another setback - Covid lockdowns, everything stopped.

During the past few months building projects have come back online, For Sale signs have turned to Sold, holidays have shown large increases in visitors, the developer has re-committed to the development plans.

Sometimes things don't appear to be what they are, that is why in my post that you mention I said: The thing with trying to assess the economy at street level, is that each street is different, like every suburb, city and town. It is worth taking the time to look further than our own little bubble.


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## divs4ever (24 October 2022)

JohnDe said:


> Sorry to implode your theory, however, the area that I showed is not an 'upmarket area'. It is in fact a very working-class area, a major grain distribution port.
> 
> The town had an important smelter built in the 1850's and closed in the 1930's, leaving large sections of prime land contaminated and strewn with debris. With the smelter and mining closed the town's population shrank by 70%, with the only source of income being grain storage and distribution. Local government could not afford to clean and clear contaminated land, there was no recourse to claim compensation from the long-gone smelter owners. Over the past decades there has been several attempts to entice businesses and conglomerates to create wealth and fund clean ups. A few started but nothing serious came from it, until about 20 years ago. A multi-national company came with some big ideas which included multistage developments, got approval and reclaimed part of the land and started building. Stage 1 completed in about 2009, and then hard times hit. A few attempts to restart, some convoluted building, and finally a new bigger company got on board with new improved plans, working with local government everything was going forward nicely but then another setback - Covid lockdowns, everything stopped.
> 
> ...



 increases over WHAT ??  ( Xmas 2020 perhaps ,  try Xmas 2018 or 2019  )

 i sold a property  in November 2021  , slightly over asking price  but before the property could even be listed for auction  , sure it was a 'fixer-upper '  but the buyer bought the neighbor's as well  ( 2 weeks later )  and shot in the paperwork   for a 'residential  enclave ' ( i assuming adjoining blocks of units ) ( the neighbour didn't even approach the RE agent  .. the buyer did the legwork as soon as the ink on my property was drying )

 that was two sales  and no signs needed .. how many more  ( this area  is suburban fringe but gentrifying over the last decade  )

 i speak to the greengrocer  , the pharmacist  ( the news agent sold , the replacing tobacconist  went kaput ) and at least 10 percent of the  two 'strip malls ' are vacant  AND the malls now  have 3 bottle shops between them  ( used to be one in the whole suburb ) 

 if that is a K-shaped recovery , i can guess  which leg we are travelling on 

 now sure as a life-long bargain hunter  that is not tragic news .. for me  , but what about others  ( like my current small business owner  neighbours  )


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## Value Collector (24 October 2022)

mullokintyre said:


> One of the often forgotten aspects of "slowdowns", is that it is very rarely across the board.
> Even in the  "Recent Pandemic" (TM), almost everyone was affected, but some far more than others.
> The well heeled would have had no problem working from home, despite the inconvenience of having to cook ones own meals more frequently.  The folks working in transport,  retail salespersons, the hospitality staff, cleaners , and event  wokers would have had difficulty working from home, even assuming they had the space to set up an  "office".
> And of course, in EVERY instance, it is those at the bottom who feel it first.
> ...



It’s not just people at the bottom that feel it though, it’s anyone associated with the industries that get hit.

For example a “well heeled” person that earns $300K a year in event management prior to the pandemic, would have felt it and might not have qualified for government assistance.

But yes you are correct, the pain of slow downs is definitely not evenly spread, certain industries won’t feel a thing while others will be very hard hit.


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## JohnDe (24 October 2022)

divs4ever said:


> increases over WHAT ??  ( Xmas 2020 perhaps ,  try Xmas 2018 or 2019  ).........




Since the Covid restrictions have reduced and removed. 

Tourism from surrounding towns and the city has started to return to pre-covid numbers, though still not at its peak. A marina was the first stage, which brought in a lot of interest from people living and working in surrounding land locked towns. With the reclamation of contaminated land in several stages, the building of homes and apartments has been increasing as prime locations disappear. A snowball effect is now occurring. As the development grows the town has taken on a new feel, the once run-down streets have been sharpened up with the increased revenue that local government is getting from new rate payers. Word is getting around, more people visiting for day trips or staying for days, people buying and building holiday homes to rent to visitors, workers deciding to move to the town, and so on. 

The 'increase' is continuing.


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## divs4ever (24 October 2022)

JohnDe said:


> Since the Covid restrictions have reduced and removed.
> 
> Tourism from surrounding towns and the city has started to return to pre-covid numbers, though still not at its peak. A marina was the first stage, which brought in a lot of interest from people living and working in surrounding land locked towns. With the reclamation of contaminated land in several stages, the building of homes and apartments has been increasing as prime locations disappear. A snowball effect is now occurring. As the development grows the town has taken on a new feel, the once run-down streets have been sharpened up with the increased revenue that local government is getting from new rate payers. Word is getting around, more people visiting for day trips or staying for days, people buying and building holiday homes to rent to visitors, workers deciding to move to the town, and so on.
> 
> The 'increase' is continuing.



 am waiting  for the 'fiscal fallout '  they can't keep stimulating forever without consequences  ( just like a cash splash  won't fix the lock-down pandemic )

 i suppose the trader types would call it a bear market rally  ( of the economy )


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## JohnDe (24 October 2022)

divs4ever said:


> am waiting  for the 'fiscal fallout '  they can't keep stimulating forever without consequences  ( just like a cash splash  won't fix the lock-down pandemic )
> 
> i suppose the trader types would call it a bear market rally  ( of the economy )




Watch out for pockets that go against the grain.

*So how big is the national debt?*​
At the end of June, the total size of Australia's national debt was $895 billion.​​That's about $100 billion short a trillion dollars.​​But many economists argue the total, or gross debt figure is not the best debt figure to look at.​​They point to the net debt figure, which takes the total debt then subtracts many of the government's financial assets — like cash it holds, deposits and loans it is owed.​​That figure is substantially lower, at $515 billion, or just over half a trillion dollars.​​Which is still a huge amount of money. But economists also look to another key indicator.​​They compare the size of the debt, to the size of Australia's economy.​​Net debt is currently at 22.5 per cent of GDP, or just over a fifth of Australia's total national income.​​Gross debt is obviously higher, at closer to 40 per cent.​​It's a big debt, but it's not the biggest​​Comparing debt to GDP allows Australia's debt to be put in a global context, too.​​And the comparisons are actually pretty good.​​Australia's gross debt-to-GDP is below average in the OECD, which is basically a collection of wealthy countries.​​Countries like the UK and US are carrying debts larger than their economy.​​​Economist Sarah Hunter from KPMG said the numbers reflect pretty favourably on Australia.​​"We're still at relatively low levels [of debt]," she said...........​


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## divs4ever (24 October 2022)

JohnDe said:


> Comparing debt to GDP allows Australia's debt to be put in a global context, too.And the comparisons are actually pretty good.




 yep i agree there  ,  good for ( relative ) 'safe-havens   ,  a little bit ordinary for growth potential  ( i need some of both , but they don't have to be in the same place )


JohnDe said:


> Watch out for pockets that go against the grain.




 i am one of those pockets  , just not a particularly deep one  ( being a minnow contrarian   has it's own opportunities )

 i notice Indonesia is on par with Australia  ( in the debt to GDP   race ) sadly getting solid exposure to Indonesia ( as stand-alone investments is normally difficult )

 interesting times , indeed


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## Value Collector (24 October 2022)

divs4ever said:


> yep i agree there  ,  good for ( relative ) 'safe-havens   ,  a little bit ordinary for growth potential  ( i need some of both , but they don't have to be in the same place )
> 
> 
> i am one of those pockets  , just not a particularly deep one  ( being a minnow contrarian   has it's own opportunities )
> ...



Australia also has a solid position when it comes to the balance of trade too.


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## divs4ever (24 October 2022)

Value Collector said:


> Australia also has a solid position when it comes to the balance of trade too.



 that could change   given we have a Leftist party  that irritates China , without embracing India ( or at least Vietnam )

 a Federal Budget soon  , i guess we will get more clues soon


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## mullokintyre (25 October 2022)

qldfrog said:


> On a local related subject, i have been told on the grapevine that containers price in Australia are heading down steeply ahead ,  due to a flood of containers ..aka reduced commerce?
> This could put an end to some supply issues based inflation .



From the WSJ


> The backup of container ships off Southern California’s coast that was at the heart of U.S. supply chain congestion during the Covid-19 pandemic has effectively disappeared.
> 
> The queue of ships waiting to unload at the ports of Los Angeles and Long Beach fell from a peak of 109 ships in January to four vessels this week, according to the Marine Exchange of Southern California. Shipping specialists say fewer ships than normal are heading to the main U.S. gateway complex for imports from Asia in coming days and that cargo volumes that had long swamped the ports now are receding.
> 
> ...





> *Key Stats*​
> The queue of ships waiting to unload at the ports of Los Angeles and Long Beach fell from a peak of 109 ships in January to four vessels this week.
> Descartes Datamyne, a data analysis group owned by supply-chain software company Descartes Systems Group Inc., says container imports to the U.S. in September declined by 11% from a year earlier and by 12.4% from August.
> Shipping lines have canceled between 26% to 31% of their sailings across the Pacific over the coming weeks, according to Sea-Intelligence
> In September of 2021 the average cost for shipping a container from Asia to the U.S. West Coast exceeded $20,000. Last week, the average cost to ship a container from Asia to the U.S. West Coast had declined 84% from a year earlier to $2,720.



it looks suspiciously like a collapse in Imports.
Imports are one of the first casualties of a Recession.
How long before the R word starts to enter the financiers conversations.
Mick


----------



## divs4ever (25 October 2022)

mullokintyre said:


> How long before the R word starts to enter the cinancuers conversations.



 it will happen on the 12th of never  , even if it means creating  a new definition to describe the same condition 

 wait for the R word to be banned on Google searches and labeled disinformation 

 the precedent has already been set elsewhere


----------



## waterbottle (25 October 2022)

mullokintyre said:


> From the WSJ
> 
> 
> it looks suspiciously like a collapse in Imports.
> ...



It already has, many are predicting a recession in 2023. Might coincide with final leg down?


----------



## over9k (26 October 2022)

Alright so treasuries are all surging, growth plays are on the move, big tech reports this week, and china basically all but confirmed it intends on torpedoing itself, so growth is back on the menu for at least today. 

Obviously markets are expecting some pretty good news from the earnings that drop this week so a degen growth play last week has, for now, been a winner.


----------



## Smurf1976 (26 October 2022)

waterbottle said:


> It already has, many are predicting a recession in 2023. Might coincide with final leg down?



Agree - whilst I've posted on another thread that I've been buying shares lately I see that as a short term trading opportunity.

I don't think we've seen _the_ bottom yet, just a temporary one.


----------



## waterbottle (26 October 2022)

Earnings haven't been all that bad in the US.
WSJ confirming 75bps as next Fed hike, possible slow down in hikes thereafter. 
Bonds retreating. 
ETH and BTC rising too. 

Looks like a bear market rally to me. Will have to see if earnings sustain it.


----------



## Dona Ferentes (26 October 2022)

From around the traps:


....
Am trying to figure out the implications, because the movements are dramatic, to say the least.


----------



## divs4ever (26 October 2022)

Dona Ferentes said:


> From around the traps:
> View attachment 148476
> 
> ....
> Am trying to figure out the implications, because the movements are dramatic, to say the least.



 not according to a Betashares analyst i listened to last night ,

 .... unfortunately  the markets  haven't rallied enough to tempt me back  into their inverse index products  , 

 now just because i l think several major economies  are trash  , doesn't stop such economies trying  to 'spend their way out of trouble ' in another wave/tsunami of 'stimulus ' 

 and of course   since  'recession'  is now  an opinion of a select group of academics  , the public might have to create a new slang  word  , for a sick economy ( so we don't offend the narrative )


----------



## waterbottle (26 October 2022)

Dona Ferentes said:


> From around the traps:
> View attachment 148476
> 
> ....
> Am trying to figure out the implications, because the movements are dramatic, to say the least.




I thought central banker balance sheets were irrelevant - they can always print and swap?


----------



## mullokintyre (26 October 2022)

OZ nflation remains persistently high.
From The evil Murdoch Empire


> Inflation has jumped to 7.3 per cent over the year to September, the highest since 1990, driven by accelerating prices for homebuilding, gas, and furniture and raising the chances of a more severe RBA response on Melbourne Cup day.
> 
> The Australian Bureau of Statistics data showed the change in the consumer price index over the quarter was 1.8 per cent, which lifted the annual pace from 6.1 per cent in June.
> 
> ...



The heroic assumptions in last nights budget will be looking like all the other treasury forecasts over the past few years, hopelessly wrong.
Will Lowe have the gonads to lift by another 50 basis points post cup day?
If they are serious about inflation reduction , they may have to.
Mick


----------



## CityIndex (26 October 2022)

mullokintyre said:


> Will Lowe have the gonads to lift by another 50 basis points post cup day?
> If they are serious about inflation reduction , they may have to.
> Mick



Might not be the worst thing in the world for the Aussie Dollar if the RBA reverts back to hiking rates by 50bps next week. 

Although, even with today’s hotter-than-expected inflation print, AUD/USD continues to see selling pressure above 0.6400


----------



## over9k (26 October 2022)

AU inflation at 7.3%, 32 year high. Estimates were 7%. 

Meanwhile, google reports earnings ~20% below estimates and futures plummet to -2% and counting. 

Was anyone silly enough to buy yesterday?


----------



## Knobby22 (26 October 2022)

Dona Ferentes said:


> From around the traps:
> 
> 
> ....
> Am trying to figure out the implications, because the movements are dramatic, to say the least.



My guess is that the increased revenues are due to inflation effects on wages and consumption taxes combined with economically powerful firms increasing profits above inflation.

In which case, not highly relevant with regards to avoiding a recession as less powerful corporations will start to have smaller profits (lagged effect) and increasing unemployment.


----------



## Knobby22 (26 October 2022)

over9k said:


> Meanwhile, google reports earnings ~20% below estimates and futures plummet to -2% and counting.



Yes, not good


----------



## waterbottle (26 October 2022)

Australian CPI at 7.3%, above market expectations of 7.0%


----------



## eskys (26 October 2022)

Retailers taking a beating today....consumer staples


----------



## bluekelah (26 October 2022)

divs4ever said:


> not according to a Betashares analyst i listened to last night ,
> 
> .... unfortunately  the markets  haven't rallied enough to tempt me back  into their inverse index products  ,
> 
> ...



Yeah looks like 3q gdp numbers will be hugely positive above 2percent but could be just the final summer demand or some clever number tweaking pre-election. With every sector crumbling and usa now only having less than a month of diesel supply left, I don't think q4 will be pretty , 2023 could be the new 2008 the way fed is hiking.

Europe is a mess now, especially uk , might get another gilt crisis or contagion any day now, I don't think further printing can occur with usa raising rates all the way.

Could see CPI for Nov spike up as well. I think biden is trying to raid the SPR more after the pause in octber


----------



## Value Collector (26 October 2022)

mullokintyre said:


> From the WSJ
> 
> 
> it looks suspiciously like a collapse in Imports.
> ...



It’s also just a sign of the covid induced spending on “things” rather than experiences ending.

The traffic jam at the port wasn’t a usual thing, it was only due to covid, so we may be heading for recession but either way that traffic was going to clear at some point regardless.


----------



## Dona Ferentes (26 October 2022)

bluekelah said:


> . With every sector crumbling and usa now only having less than a month of diesel supply left, I don't think q4 will be pretty , 2023 could be the new 2008 the way fed is hiking.
> 
> Could see CPI for Nov spike up as well. I think biden is trying to raid the SPR more after the pause in octber



I read this elsewhere....

"Believe it or not I wanted to talk about *diesel *prices this week.

*There is a growing diesel crisis as global inventory levels are at historically low levels. 

Diesel is the lifeblood of the global economy and you can’t put a barrel of crude oil in a truck, a combine harvester, a barge, a ship, train or plane.

There is a chronic shortage of refining capacity, which is about to get much worse as the EU ban on Russian diesel exports comes into effect next February.

Furthermore, much of the world’s refining capacity is in the hands of countries that are no longer our friends. 

I have written about this before and I will, unfortunately, return to this topic many times in the year ahead.*

*Before I do…WAKE UP AUSTRALIA, WE IMPORT 90% OF OUR FUEL!*

Yes, I know using capital letters is the equivalent of shouting.... "

......................................................
And the* Strategic Petroleum Reserve  *- from another opinion piece

_"Last Wednesday, President Joe Biden announced the release of 15 million more barrels from the reserve in December, completing a plan he laid out earlier to release a total of 180 million barrels in an effort to keep gasoline prices at the pump as low as possible – in advance of the midterm elections. _
_"According to a report in _The Washington Post_, the reserve contained “__405.1 million barrels as of October 14. That’s about 57 per cent of its maximum authorised storage capacity of 714 million barrels__.”
"__I sympathise with the president. People were really hurting from $US5 ($7.8) and $US6-a-gallon gasoline. But using the reserve – which was designed to cushion America in the face of a sudden shut-off in domestic or global production – to shave a dime or a quarter off a gallon of gasoline before elections is a dicey business, even if the president has a plan for refilling it in the coming months_.....

......................................
but there again, Europe is doing better than many thought


----------



## divs4ever (26 October 2022)

waterbottle said:


> I thought central banker balance sheets were irrelevant - they can always print and swap?



 that is a narrative that i have heard some ( CB ) bankers say  however some ( CB ) bankers  have a different tale  and sometimes even act , like debt growth matters  , from time to time


----------



## divs4ever (26 October 2022)

Dona Ferentes said:


> I read this elsewhere....
> 
> "Believe it or not I wanted to talk about *diesel *prices this week.
> 
> ...



if it wakes a couple extra up , i forgive you ( for 'shouting ' ) 

 yes Australian refinery capacity  concerns me as well  , you would think we would refine 100% of our national needs  , even if just to keep up to date technologically  ( and not going down the 'carbon footprint ' path )


----------



## divs4ever (26 October 2022)

mullokintyre said:


> OZ nflation remains persistently high.
> From The evil Murdoch Empire
> 
> The heroic assumptions in last nights budget will be looking like all the other treasury forecasts over the past few years, hopelessly wrong.
> ...



 history suggests there will be no change on Cup Day  , but is it different this time  and the RBA NEEDS , to keep chasing the CPI number 

 now from my understanding  of the Volker move  , the official rate has to be  IN FRONT  of ( higher than ) CPI

 but here we  are with ( many) Central banks trailing behind  timidly  even when using watered down CPI calculations 
 i guess we are in for a lesson  in fiscal policy  ( we still LEARN from bad outcomes  , don't we , or are they now 'memory-holed )


----------



## waterbottle (27 October 2022)

Bank of Canada doing a Phil Lowe, has gone for 50bps instead of 75bps. 
Meanwhile Facebook shits the bed, down 16% after hours


----------



## waterbottle (27 October 2022)

waterbottle said:


> Bank of Canada doing a Phil Lowe, has gone for 50bps instead of 75bps.
> Meanwhile Facebook shits the bed, down 16% after hours



Down 23%....
Wow.
Is this what happened during the tech crash?


----------



## divs4ever (27 October 2022)

if you mean the 'dot.com' bubble i wasn't even remotely interested in the stock market back then  ( and just starting a hobby in computers  focusing on the hardware side )

 but back in those years   some folks  had a term  for software that did nothing important 'vaporware'

 given Meta and friends  are heavily into Cancel-Culture  , is this vaporware 2.0 ( as independent thinkers restructure their life without social media )


----------



## CityIndex (27 October 2022)

waterbottle said:


> Bank of Canada doing a Phil Lowe, has gone for 50bps instead of 75bps



Seemed to help boost bets even further on the Fed possibly also pivoting come December.

The ECB’s interest rate decision is due tonight, and they are expected to stick with 75bps. Should be interesting to see how the outcome of this meeting impacts speculation regarding the Fed’s policy plans.


----------



## qldfrog (27 October 2022)

waterbottle said:


> Down 23%....
> Wow.
> Is this what happened during the tech crash?



While i value google technically, FB is utter crap, technically..and i do not give my thoughts about the actual SM concept or aims.
They deserve to be replaced.WeChat is was light ahead..but sane crap .just a propaganda tool.
So now what will happen to Amazon and Google SP deserves scrutiny.
And if inflation is above 10% and your results are increasing anywhere below, are you not going backward already..
I know you have to weight the spread of profits along the year but you catch the idea?


----------



## waterbottle (27 October 2022)

qldfrog said:


> While i value google technically, FB is utter crap, technically..and i do not give my thoughts about the actual SM concept or aims.
> They deserve to be replaced.WeChat is was light ahead..but sane crap .just a propaganda tool.
> So now what will happen to Amazon and Google SP deserves scrutiny.
> And if inflation is above 10% and your results are increasing anywhere below, are you not going backward already..
> I know you have to weight the spread of profits along the year but you catch the idea?




Wokeism v. Markets. Markets win.


----------



## moXJO (27 October 2022)

Tech wreck decimated tech stocks. I was trading online via comsec back in 99  from memory. I think gold was super low at the time as well. Everything was running. Mining was as well. You could throw a slab of money and reap massive rewards at the time.

Once the "wreck" hit, some tech stocks simply disappeared. But it's times like these that exciting new companies are created. There was a flood of innovation after the tech wreck.


----------



## waterbottle (27 October 2022)

moXJO said:


> Tech wreck decimated tech stocks. I was trading online via comsec back in 99  from memory. I think gold was super low at the time as well. Everything was running. Mining was as well. You could throw a slab of money and reap massive rewards at the time.
> 
> Once the "wreck" hit, some tech stocks simply disappeared. But it's times like these that exciting new companies are created. There was a flood of innovation after the tech wreck.




What came out of the tech wreck?


----------



## moXJO (27 October 2022)

waterbottle said:


> What came out of the tech wreck?



Pretty much all the majors started forming. What happens is that thousands of developers/engineers get laid off. Then giving some of the upstarts access to some experienced players driving innovation. Follow some of the major tech VCs and you get the idea.

Usually see results in 5ish years
This is most likely another turning point


----------



## over9k (27 October 2022)

U.S GDP price index in at 4.1 with an estimated 5.3. Probably a lot to do with the strength of the dollar. 

PCE up 1.4 for the quarter, also good.

Growth plays, bonds etc all moving as a result.


----------



## Smurf1976 (28 October 2022)

waterbottle said:


> Down 23%....
> Wow.
> Is this what happened during the tech crash?



The key thing back then was that many had correctly identified that the then new internet was a game changer but very few had identified how to make money out of it.

At that point the internet was mostly either giving content away online (weather forecasts, general information about your real world business, whatever) or it was selling a physical product (notably CD's, books and airline tickets were early ones).  The idea that online content itself would have value, that the thing of value would be on the screen and not delivered by post, took quite some time to evolve to a point someone was actually making money out of it.

When the bubble burst a huge number of companies that had not only no profit but not even any revenue simply disappeared. The market realised that a lot of them had no hope of ever becoming a profitable business.

Out of that the strong ones emerged. Netflix used to send out physical DVD's, it wasn't an online service as such, whilst Amazon's early business was simply selling physical books. But what they did have was a real, actual business which underpinned a stock that was worth something and from which the company could and did innovate and grow to the point of their original business either ceasing entirely or becoming a sideline.


----------



## over9k (28 October 2022)

Sold some news tonight and flogged some NRGU at 627. Aiming for a degen rebuy tomorrow and some TNA.


----------



## moXJO (28 October 2022)

Is personal debt in US getting out of control?
Heard an interesting take.


----------



## waterbottle (28 October 2022)

AMZN issues poorer 4th quarter guidance. Down 22% after hours.... Pretty much back to pre-Covid levels

Hit list so far:

META
GOOG
AMZN
CS


----------



## Dona Ferentes (28 October 2022)

waterbottle said:


> AMZN issues poorer 4th quarter guidance. Down 22% after hours.... Pretty much back to pre-Covid levels



I think there was a WSJ report that there was a hiring freeze that did it, esp AWS.


----------



## over9k (28 October 2022)

waterbottle said:


> AMZN issues poorer 4th quarter guidance. Down 22% after hours.... Pretty much back to pre-Covid levels
> 
> Hit list so far:
> 
> ...



Yep, all futures into the red for a friday selloff with ndx leading the charge too. 

Looks like it might have been a wise sell last night.


----------



## waterbottle (28 October 2022)

over9k said:


> Yep, all futures into the red for a friday selloff with ndx leading the charge too.
> 
> Looks like it might have been a wise sell last night.



Maybe. Last time we had this pattern was in mid July where the dips kept getting bought


----------



## over9k (28 October 2022)

Aus PPI in at 6.4% year on year and 1.8% quarter on quarter. 

Real world, probably about a 10% inflation rate.


----------



## waterbottle (28 October 2022)

Great, the cherry-on-top will be the Fed revising terminal rate to 6.x%


----------



## over9k (28 October 2022)

Big oil reporting earnings. All way above estimates but premarket's barely moved as this has, well, been priced in. I'd hardly call oil companies making a lot to be a surprise now... 

Oil itself is down on the day.


----------



## divs4ever (28 October 2022)

moXJO said:


> Is personal debt in US getting out of control?
> Heard an interesting take.



heard some commentators  , claiming  GDP has been redefined again , what else ??

several ( non-mainstream ) analysts  completely reject ( or ridicule ) official data now 

 if government  can't  control debt accumulation  , how can you expect the US citizen to control their own debt ( let alone the debt accumulate by the government on their behalf  , because government debt is actually tax-payer debt )


----------



## bluekelah (29 October 2022)

waterbottle said:


> Down 23%....
> Wow.
> Is this what happened during the tech crash?



Yep you should have seen YAHOO  yahoo all the way up , yahoo all the way down during 2000/2001 tech crash. was like 500peak down to 8 bucks. Amazon did the same thing back then too but has since come up thousands of%% All the FAANG stock will be totally out of favor soon.


----------



## waterbottle (29 October 2022)

Dip buyers out today. The after hours losses from yesterday were mostly wiped out. INTC up a massive 10% despite crappy guidance too.


----------



## bluekelah (30 October 2022)

waterbottle said:


> Dip buyers out today. The after hours losses from yesterday were mostly wiped out. INTC up a massive 10% despite crappy guidance too.



still too much liquidity sloshing around. Everyones still betting on a FED pivot especially after BOE pivoted and now Canada is also reducing pace of rate hike increases


----------



## waterbottle (30 October 2022)

bluekelah said:


> still too much liquidity sloshing around. Everyones still betting on a FED pivot especially after BOE pivoted and now Canada is also reducing pace of rate hike increases




Let's see what the Fed rhetoric is like next week. Things are already starting to break...


----------



## IFocus (30 October 2022)

An old market saying when markets are chopping their way down is there is usually more than one cockroach.

Its interesting watching to see if each grain of sand that falls is the one to bring down the pile

Or not at all


----------



## divs4ever (30 October 2022)

IFocus said:


> An old market saying when markets are chopping their way down is there is usually more than one cockroach.
> 
> Its interesting watching to see if each grain of sand that falls is the one to bring down the pile
> 
> Or not at all



will it collapse in a relatively normal manner or just fall into a deep hole ( because i think the pile is rotten to the core )


----------



## JohnDe (30 October 2022)

IFocus said:


> An old market saying when markets are chopping their way down is there is usually more than one cockroach.
> 
> Its interesting watching to see if each grain of sand that falls is the one to bring down the pile
> 
> Or not at all




I thought the cockroach theory refers to companies


----------



## divs4ever (30 October 2022)

JohnDe said:


> I thought the cockroach theory refers to companies



that is where it is mostly used  , but i can assure you it applies to corrupt government officials , and in several other areas  , where a long festering problem is discovered ( an efficient system  detects and rectifies the problem quickly )


----------



## over9k (31 October 2022)

Euro numbers are in: 





10% inflation (by the official numbers) vs <1% gdp growth is effectively a 9% contraction. 

Real world inflation numbers and real world GDP numbers, more like a 15% contraction.


----------



## waterbottle (31 October 2022)

over9k said:


> Euro numbers are in:
> 
> View attachment 148679
> View attachment 148678
> ...




Euro GDP double expectations. Bullish.


----------



## over9k (31 October 2022)

Swaps now pricing interest rates (U.S) peaking at march next year. Now pricing in 5% peak rate. All the talking heads saying 75 rise at the next fed meeting now a certainty. After all the carryon last week, futures are now red with NDX/growth leading the charge. Oil's down ~1.5%. Looking for a couple of rebuys this week.


----------



## over9k (31 October 2022)

waterbottle said:


> Euro GDP double expectations. Bullish.



I know. I had a bit of a snicker at that too.


----------



## qldfrog (31 October 2022)

waterbottle said:


> Euro GDP double expectations. Bullish.



I believe you made a mistake:
Just released


So cpi higher than expectation, gdp lower than expectation very bearish figures .
But who cares with facts when we can create narrative..
not targetting you BTW @waterbottle


----------



## over9k (1 November 2022)

BOIL up more than 20% premarket  

Kind of considering a topup now. I don't like buying on green days. Hmm.


----------



## over9k (1 November 2022)

Excellent piece by Patrick Boyle


----------



## frugal.rock (1 November 2022)

over9k said:


> Excellent piece by Patrick Boyle



He's good eh, but with eyes like that, he could be your new goldfish... 😳


----------



## over9k (1 November 2022)

frugal.rock said:


> He's good eh, but with eyes like that, he could be your new goldfish... 😳



Yeah it's a good thing he got brains because looks and humour are not an option. 

Unrelated: Got a small NRGU rebuy in at 591. Now let's see if we get another leg down. Looks like a low volume/"hold your breath" kind of day.


----------



## moXJO (1 November 2022)

Anyone have a bullish take?

To me it looks like one more good run-inflation-deflation-recession-depression for US. I'm not sure they can pull anymore rabbits out of the hat. 
That drought through the Midwest that's supposed to be "dustbowl II" (funnily enough the last one was during the depression) will eat into food supplies.

$USD being the reserve currency looks to be on its last legs as well.

Energy and commodities seem to be the stand outs.


----------



## over9k (1 November 2022)

USD's at nearly record highs, not sure where you've got the idea that that's toast moxy?


----------



## moXJO (1 November 2022)

over9k said:


> USD's at nearly record highs, not sure where you've got the idea that that's toast moxy?



There's a coalition of commodity heavy countries that want to move away from the usd$. To something that doesn't depreciate as hard.
Saudis chattering about something gold backed. Might be all pie in the sky stuff, but I'm definitely seeing moves.

What's the safest (ie. lazy man's option) of shorting the usd out to  2024 if I were interested. Which I'm not really because I'm in a pretty lazy  mood.


----------



## divs4ever (1 November 2022)

qldfrog said:


> I believe you made a mistake:
> Just released
> View attachment 148684
> 
> ...



 but is BAD news still GOOD news ( a greater  chance of rate hikes slowing ) ??

 ah yes , the narrative  , how long will the masses believe


----------



## divs4ever (1 November 2022)

moXJO said:


> There's a coalition of commodity heavy countries that want to move away from the usd$. To something that doesn't depreciate as hard.
> Saudis chattering about something gold backed. Might be all pie in the sky stuff, but I'm definitely seeing moves.
> 
> What's the safest (ie. lazy man's option) of shorting the usd out to  2024 if I were interested. Which I'm not really because I'm in a pretty lazy  mood.



 buy  ( physical ) commodities  , now ??

 now i hear about plenty of folks stacking precious metals  , but what else can you stack  ( so you can use in the future  , or barter later ) ( save you buying stuff in 2024 )


----------



## over9k (1 November 2022)

moXJO said:


> There's a coalition of commodity heavy countries that want to move away from the usd$. To something that doesn't depreciate as hard.
> Saudis chattering about something gold backed. Might be all pie in the sky stuff, but I'm definitely seeing moves.
> 
> What's the safest (ie. lazy man's option) of shorting the usd out to  2024 if I were interested. Which I'm not really because I'm in a pretty lazy  mood.



Depends why it's dropping


----------



## waterbottle (1 November 2022)

The EU economy was always going to be crap because of what's happening in Ukraine and because the ECB was the slowest to hike rates, so I'm not surprised. 
As for everyone else, i think it's all down to the Fed speech this week.


----------



## moXJO (1 November 2022)

over9k said:


> Depends why it's dropping



I think fed will possibly pivot towards the end of the year.
I don't think 2-3% inflation will be the baseline they will be able to get to.

Hard to see how they get out of this one. Especially with Republican possibly blocking everything.


----------



## basilio (1 November 2022)

*Why inflation is hurting ordinary Australians so much.*

This analysis of where the biggest Cost of living increases have occurred highlights the particular impact on the day to day lives of  normal people (ie those not on 200k packages) . Certainly makes a lie of the 7% inflation figure

Interest rate rises, *which are not included in CPI figures,* are at the top of the list. The rest looks like this

_Around a fifth of the sub-categories of goods and services monitored by the ABS in its CPI have risen by double-digits over the year to September. These are the top 10 price jumps:_

_International travel: +25.3 per cent_
_New dwelling purchase: +20.7 per cent_
_Cooking oils and fats: +19.3 per cent_
_Automotive fuel: +18 per cent_
_Veggies: +17.2 per cent_
_Gas: +16.6 per cent_
_Milk: +16.2 per cent_
_Non-durable household products: +16.2 per cent_
_Fruit: +14.6 per cent_
_Pets and related products: +13.8 per cent._
_Source: ABS, CPI, September quarter 2022

Electricity prices would have made this list, rising 15.6 per cent in the September quarter alone, but for government subsidies and rebates in some states that kept this price increase down to 3.2 per cent. There will be pay-back in next quarter's figures_









						Here's what went up the most in price over the past year. It's grim reading for many home owners
					

Millions of Australians who are struggling with soaring inflation rates suffer another increase in the fastest-rising cost of living — interest rates — with the RBA lifting them again on Melbourne Cup Day.




					www.abc.net.au


----------



## mullokintyre (1 November 2022)

moXJO said:


> There's a coalition of commodity heavy countries that want to move away from the usd$. To something that doesn't depreciate as hard.
> Saudis chattering about something gold backed. Might be all pie in the sky stuff, but I'm definitely seeing moves.
> 
> What's the safest (ie. lazy man's option) of shorting the usd out to  2024 if I were interested. Which I'm not really because I'm in a pretty lazy  mood.



The Saudis get a lot more relevance debate than they deserve.
Apart from oil, sand and terrorism, they don't make , export , or grow much else.
nearly 70 % of its economy and 65% of its exports are fossil fuel based.
The most critical source of revenue, apart from its hit squads, will come to an end, either by the rest of the world removing its great dependance on oil, or, more likely, the reserves of oil along with the technology to extract it will run dry.
So what do they have to offer the rest of the world apart from a steady market for red checked tea towels and fan belts?
The population of  35 million people  is mostly poorer immigrants who work to make life easier for the House of Saud elites.
It  lacks water, is unable to feed itself, and relies on buying large tracts of arable land in other countries.
A corrupt , mysoginist , narcissistic regime that lacks any sort of morals or ethics most likely will not survive  the next 30 years.
mick


----------



## divs4ever (1 November 2022)

was that Saudi specific ??  sounds like much of Europe as well ( except the oil bit )


----------



## mullokintyre (1 November 2022)

mullokintyre said:


> The Saudis get a lot more relevance debate than they deserve.
> Apart from oil, sand and terrorism, they don't make , export , or grow much else.
> nearly 70 % of its economy and 65% of its exports are fossil fuel based.
> The most critical source of revenue, apart from its hit squads, will come to an end, either by the rest of the world removing its great dependance on oil, or, more likely, the reserves of oil along with the technology to extract it will run dry.
> ...



Sorry, I replied to the wrong post  re Saudis. 
Should have been post #2696.
Mick


----------



## over9k (1 November 2022)

Oh no, if we keep jacking rates we'll cause a recession...


----------



## DannyB0000 (1 November 2022)

_DXY chart set to 25 years.  Last time the US dollar was this high was in 2002, $1.20.  The US dollar soon collapsed._


_Gold chart also set for 25 years.  Gold rallied from 2002 through to 2011.  $250 in 2002 to $1800 in October 2011_


----------



## mullokintyre (1 November 2022)

DannyB0000 said:


> View attachment 148712
> _DXY chart set to 25 years.  Last time the US dollar was this high was in 2002, $1.20.  The US dollar soon collapsed._
> View attachment 148716
> 
> _Gold chart also set for 25 years.  Gold rallied from 2002 through to 2011.  $250 in 2002 to $1800 in October 2011_



Yea, but THIS time its different.
Mick (with his largest sarcastic hat on).


----------



## moXJO (1 November 2022)

mullokintyre said:


> The Saudis get a lot more relevance debate than they deserve.
> Apart from oil, sand and terrorism, they don't make , export , or grow much else.
> nearly 70 % of its economy and 65% of its exports are fossil fuel based.
> The most critical source of revenue, apart from its hit squads, will come to an end, either by the rest of the world removing its great dependance on oil, or, more likely, the reserves of oil along with the technology to extract it will run dry.
> ...



Petrodollars.


----------



## mullokintyre (1 November 2022)

moXJO said:


> Petrodollars.



Sorry, that one went through to the keeper.
Would you care to expand a little Mox??
Mick


----------



## moXJO (1 November 2022)

mullokintyre said:


> Sorry, that one went through to the keeper.
> Would you care to expand a little Mox??
> Mick



Once the US went off the gold standard they cut a deal with the Saudis to basically oil back the $usd to keep it as reserve currency in exchange the US defends the regime.

Or something like that.

Anyway if Saudis pivot to something else $Usd is probably toast


----------



## mullokintyre (1 November 2022)

moXJO said:


> Once the US went off the gold standard they cut a deal with the Saudis to basically oil back the $usd to keep it as reserve currency in exchange the US defends the regime.
> 
> Or something like that.
> 
> Anyway if Saudis pivot to something else $Usd is probably toast



I bet the Saudis are not getting petrodollars for Chinese  oil sales.
Mick


----------



## moXJO (1 November 2022)

mullokintyre said:


> I bet the Saudis are not getting petrodollars for Chinese  oil sales.
> Mick



That's part of the problem. They started selling it in yuan earlier this year. While it's largely "symbolic" there's that concern. 
BRIC was obviously wanting to ditch the $USD. They are not the only ones. 

Saudis have that new (fairly aggressive in his moves) prince. He seems very open to the new world. 

Like I said all pie in the sky stuff right now. But everything seems to be lining up that way. No idea how long that shift takes to happen either


----------



## over9k (1 November 2022)

mullokintyre said:


> Yea, but THIS time its different.
> Mick (with his largest sarcastic hat on).



It actually is. Most of the world has reached the point of demographic no return.


----------



## mullokintyre (1 November 2022)

over9k said:


> It actually is. Most of the world has reached the point of demographic no return.



Its always different, but the outcome is always the same.
Mick


----------



## JohnDe (1 November 2022)

mullokintyre said:


> Its always different, but the outcome is always the same.
> Mick




Not necessarily. There are numerous examples through the centuries of different outcomes and severity.


----------



## over9k (1 November 2022)

Guys if the world goes to **** the USD will be the flight to safety. The only exception is if the U.S itself goes to hell and the usa is actually going to be the best country for the rest of this half of the century.


----------



## mullokintyre (1 November 2022)

over9k said:


> Guys if the world goes to **** the USD will be the flight to safety. The only exception is if the U.S itself goes to hell and the usa is actually going to be the best country for the rest of this half of the century.



Chuck butler in his overnight email noted a couple of important things.

1. The Chinese Renmimbi has become the fifth most traded currency.
I was one of those saying that the Renmimbi/Yuan  did not have enough liquidity to become a major force.
That might be true in the western world, but it is patently obvious that other countries see no such problems. This is a major   level of scale that many experts said could not be achieved.

2. Last Friday, stats announcing that Consumer Spending had risen3.8%, and the economy was seen as being resilient . The problem is, the high levels of inflation would have taken account of a goodly chunk of that rise, so its really a small rise in real value at best.

3.the current Debt to GDP at a worldwide level is sitting at 350%! The use looks comparatively benign at a mere 140% of GDP.
In 1985, the then relevant nations gathered at the Plaza hotel in New York city. They collectively decided that US current account deficit/ GDP ratio at 2.5% was far too high and the rest of the world would sell US dollars.  Conveniently, the Fed government no longer  report it. But others do.According to BEA, the us current account deficit  3.6% up from 2.9 % in 2020. If 2.5% was too much for the finance ministers in 1985, what would they think of todays 3.6%??

4. There is a bit of a liquidty crunch happening in US treasuries.
Japan has pulled back from buying US treasuries as it seeks to prop up the Yen.
The US fed has been shrinking its  balance sheet of US treasuries, so not only is it not buying , its a net seller.
Other potential Buyers, China, Russia, the OPEC middle eastern countries have vowed to move out of the USD.
Personally, I see major problems for the USD and the US economy.
Mick


----------



## waterbottle (1 November 2022)

moXJO said:


> I think fed will possibly pivot towards the end of the year.
> I don't think 2-3% inflation will be the baseline they will be able to get to.
> 
> Hard to see how they get out of this one. Especially with Republican possibly blocking everything.




Just to add, there are already talks of redefining target inflation to 3%. Shifting he goalposts makes the job easier.... 



mullokintyre said:


> Chuck butler in his overnight email noted a couple of important things.
> 
> 1. The Chinese Renmimbi has become the fifth most traded currency.
> I was one of those saying that the Renmimbi/Yuan  did not have enough liquidity to become a major force.
> ...




Janet Yellen is aware of the treasury liquidity issue. They had plans to buy short term bonds. Not sure what's happened to that.


----------



## over9k (1 November 2022)

mullokintyre said:


> Chuck butler in his overnight email noted a couple of important things.
> 
> 1. The Chinese Renmimbi has become the fifth most traded currency.
> I was one of those saying that the Renmimbi/Yuan  did not have enough liquidity to become a major force.
> ...



There's much more to it than this. You need to look at demographics and then how the U.S (by almost any metric) compares to the rest of the world. 

China, for example, is in the middle of civilisational collapse.


----------



## divs4ever (1 November 2022)

over9k said:


> View attachment 148707
> 
> 
> Oh no, if we keep jacking rates we'll cause a recession...



 assuming , of course , we aren't currently chest-deep in a recession  ( wearing another name tag )


----------



## divs4ever (1 November 2022)

over9k said:


> There's much more to it than this. You need to look at demographics and then how the U.S (by almost any metric) compares to the rest of the world.
> 
> China, for example, is in the middle of civilisational collapse.



 i disagree , China is in the middle of a restructure ( that it has needed to have for at least 5 years )  ugly and bumpy , sure  , but China is BIG 

 and remember all  the CDBC and social engineering stuff , is all been tested on the Chinese FIRST

 if it fails so does the WEF agenda  ( the resisters will find all the flaws to exploit fully )


----------



## over9k (1 November 2022)

divs4ever said:


> i disagree , China is in the middle of a restructure ( that it has needed to have for at least 5 years )  ugly and bumpy , sure  , but China is BIG
> 
> and remember all  the CDBC and social engineering stuff , is all been tested on the Chinese FIRST
> 
> if it fails so does the WEF agenda  ( the resisters will find all the flaws to exploit fully )



Take a look at china's demographics first and then military capabilities and geography second. Then its total inability to be self-reliant in basically anything.


----------



## divs4ever (1 November 2022)

over9k said:


> Take a look at china's demographics first and then military capabilities and geography second. Then its total inability to be self-reliant in basically anything.



 maybe  , the first be hint would be the annexation of Mongolia 

 ALSO China has a solid chance of a stable trading relationship  with Afghanistan 

 resources are nearby ( no navy needed )


----------



## mullokintyre (1 November 2022)

waterbottle said:


> Just to add, there are already talks of redefining target inflation to 3%. Shifting he goalposts makes the job easier....
> 
> 
> 
> Janet Yellen is aware of the treasury liquidity issue. They had plans to buy short term bonds. Not sure what's happened to that.



Not sure if Yellen has any plans, there is certainly pressure from others for her to do so.
From Financial Times




> US government bond investors are urging the Treasury department to intervene in the market, hoping for signals this week of possible buybacks after months of wild prices swings and poor liquidity. The Federal Reserve’s aggressive increases in interest rates and quantitative tightening programme this year have amplified the drama in the normally staid $24tn Treasury market. Investors want the Treasury to provide clues of its plans when it makes its fourth-quarter funding announcement in the coming days.





> Treasury yields, which determine the US government’s borrowing costs and are used as benchmarks for prices across asset classes, have gyrated wildly in 2022. The volatility has made it harder and more expensive for investors to buy or sell Treasury bonds in a market that is ostensibly the most liquid in the world. Treasury secretary Janet Yellen has said she is watching the situation closely. The Treasury department also asked primary dealers — banks that buy bonds directly from the Treasury — in a mid-October survey whether it should buy back older Treasury bonds, which are traded less frequently. The prospect of buybacks was first raised by the Treasury Borrowing Advisory Committee in an August report that highlighted the declining depth of the Treasury market, one measure of liquidity.


----------



## moXJO (1 November 2022)

over9k said:


> Take a look at china's demographics first and then military capabilities and geography second. Then its total inability to be self-reliant in basically anything.



I think there was a study done on amount of lights in China and how this correlates to actual growth. Apparently it was magnitudes less than what everyone thought.

India (if it can get its sht together) has the age demographics in its favour. Either way, the next decade will be all about the east.


----------



## over9k (2 November 2022)

over9k said:


> If/when china just give up on covid zero like the rest of us did we'll see energy demand soar again, as will the supply of a lot of the world's stuff, which will bring inflation of everything except energy back down.
> 
> *Pure guesswork but something tells me they're going to just throw in the towel at some point as the expense of lockdowns just becomes utterly unbearable/the rest of their economy goes to hell so much that they have no choice.*



Called it:


----------



## over9k (2 November 2022)

moXJO said:


> I think there was a study done on amount of lights in China and how this correlates to actual growth. Apparently it was magnitudes less than what everyone thought.
> 
> India (if it can get its sht together) has the age demographics in its favour. Either way, the next decade will be all about the east.



India's geography is so so so so SO much better than china's too. 

India will be to the next 30 years what china has been to the last 30.


----------



## divs4ever (2 November 2022)

moXJO said:


> I think there was a study done on amount of lights in China and how this correlates to actual growth. Apparently it was magnitudes less than what everyone thought.
> 
> India (if it can get its sht together) has the age demographics in its favour. Either way, the next decade will be all about the east.



 i am thinking  India is the rising power  ( but don't neglect other smaller Asian nations . like Vietnam ) India has plenty of bottle-necks to fix and the demographics , and therefore the potential growth 

 China is mature now   and while it has flaws ( as do all mature nations ) it does not  have the percentage growth potential , you will need to keep place with current inflation  ( in the near term )

 watch to see if Korea  keeps moving towards unification  , i am guessing  it will be extremely financially painful  in the short/mid term ( think Germany after the collapse of the Soviet era )


----------



## JohnDe (2 November 2022)




----------



## waterbottle (3 November 2022)

75bps from the Fed as expected


----------



## waterbottle (3 November 2022)

waterbottle said:


> 75bps from the Fed as expected



JPowell coming down with the hike hammer.
States its too early to even think about pausing.
Wants real rates positive.
Highlights resilient jobs market as a concern (despite mandate for full employment)


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## waterbottle (3 November 2022)

JPowell: likelihood of soft landing has narrowed. Inflation hasn't come down as much as we've liked.....


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## Smurf1976 (3 November 2022)

waterbottle said:


> JPowell: likelihood of soft landing has narrowed.



Translation = emergency services on the ground have been advised to expect a serious crash landing but the Captain has decided it's best not to tell the passengers.

I suppose nothing's actually impossible but a soft landing looks incredibly unlikely to me at this stage.


----------



## waterbottle (3 November 2022)

Smurf1976 said:


> Translation = emergency services on the ground have been advised to expect a serious crash landing but the Captain has decided it's best not to tell the passengers.
> 
> I suppose nothing's actually impossible but a soft landing looks incredibly unlikely to me at this stage.




Agreed. He also made comments about the September dot plot being revised higher if it were to be released today. Sounds like they may be targeting rates higher than 5%.... Maybe 6%?
My interpretation is that housing and jobs seem to be holding them to higher rates.


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## qldfrog (3 November 2022)

Funny as just after the announcement,the us market market went up..not for long and not long enought for me to buy cheap shorts.....


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## over9k (3 November 2022)

Angling for a buy tomorrow


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## waterbottle (3 November 2022)

Only a 3% drop in the ndx, meh


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## over9k (3 November 2022)

BOE hikes by 75, says 2 year recession if rates follow current market implied trajectory, U.K already in recession, recession to peak at 11% at the end of this year. 

GOOD TIMES.


----------



## Gunnerguy (4 November 2022)

over9k said:


> BOE hikes by 75, says 2 year recession if rates follow current market implied trajectory, U.K already in recession, recession to peak at 11% at the end of this year.
> 
> GOOD TIMES.



Having read their statement it was something like ‘2 year recession based on Government policies enacted by Liz Truss’
The BOE GDP modelling is based on the ‘current Government Fiscal policies’. Modelling was done 2 weeks ago. Unusually they have also made an updated model based on ‘expected’ Givernment policies. So the 2 year recession model was already in the BOE’s statement release but has changed. As has the markets IR expectations compared to 2 weeks ago. It was 6.5% but now is 4.75%. 
Still a recession but unlikely to be 2 years and ‘as bad as the 1930’s.
Clickbate in the morning papers I fear.
Gunnerguy


----------



## over9k (4 November 2022)

Gunnerguy said:


> Having read their statement it was something like ‘2 year recession based on Government policies enacted by Liz Truss’
> The BOE GDP modelling is based on the ‘current Government Fiscal policies’. Modelling was done 2 weeks ago. Unusually they have also made an updated model based on ‘expected’ Givernment policies. So the 2 year recession model was already in the BOE’s statement release but has changed. As has the markets IR expectations compared to 2 weeks ago. It was 6.5% but now is 4.75%.
> Still a recession but unlikely to be 2 years and ‘as bad as the 1930’s.
> Clickbate in the morning papers I fear.
> Gunnerguy



I think we're still likely to see what they say but for entirely different reasons to why they've said it, but that's just my two cents.


----------



## mullokintyre (4 November 2022)

over9k said:


> I think we're still likely to see what they say but for entirely different reasons to why they've said it, but that's just my two cents.



Given the level of inflation I can see two problems here.
Firstly, your moniker of over9k may no longer be enough. Have you thought of indexing it to the CPI?
Secondly, your two cents worth may also need to be upped because of inflation. 
I mean a two cent piece now is not even legal tender!
Just trying to help.
Mick


----------



## over9k (4 November 2022)

More rumblings about china reopening now. Everything screaming, especially oil.


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## over9k (4 November 2022)

U.S jobs numbers are in, payrolls increased but unemployment rate increased also, so, more people are now looking for work. 

How much this has to do with *having* to do so to cover the bills I don't know but it means more demand either way


----------



## waterbottle (4 November 2022)

over9k said:


> U.S jobs numbers are in, payrolls increased but unemployment rate increased also, so, more people are now looking for work.
> 
> How much this has to do with *having* to do so to cover the bills I don't know but it means more demand either way




I thought payrolls increased more than expected but overall trend remains down


----------



## over9k (4 November 2022)

waterbottle said:


> I thought payrolls increased more than expected but overall trend remains down



Month-on-month increase but I'm just watching the headlines running now as it's a busy evening. 

Edit: 260k vs 190 estimated. So above estimates.


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## over9k (4 November 2022)

And it looks like trump's going to run again!


----------



## divs4ever (5 November 2022)

over9k said:


> And it looks like trump's going to run again!



even if he wasn't ( but laying down the carpet for Don jr. )   he would give that impression  to keep the ' old guard ' confused , distracted  and busy plotting  

if Hunter's activities  couldn't stop Joe being elected , it is going to be hard to sell the 'sins of the father ' on Don Jr 

 maybe De Santis and Don Jr as V.P. for two terms and Jr. try for the top job  for the next two terms ( and completely wreck the two-party paradigm )


----------



## over9k (5 November 2022)

I don't think I've ever had lowest buy of the day before 

Been a beautiful week of degens though:




I suppose I should go & buy sapphire something nice now?


----------



## mullokintyre (5 November 2022)

divs4ever said:


> even if he wasn't ( but laying down the carpet for Don jr. )   he would give that impression  to keep the ' old guard ' confused , distracted  and busy plotting
> 
> if Hunter's activities  couldn't stop Joe being elected , it is going to be hard to sell the 'sins of the father ' on Don Jr
> 
> maybe De Santis and Don Jr as V.P. for two terms and Jr. try for the top job  for the next two terms ( and completely wreck the two-party paradigm )



I think you have hit the nail on the head. 
As US presidents are limited to two terms, Trump would only get one more should he win, firstly the  race to be the GOP candidate, and then the presidency itself.
Desantis for sure, an maybe having Don jnr as a sop to the trump supporters to attempt to bring em on side.
I would think that Desantis and Abbott from Texas would also be a good choice, as it would line up two out of three of the biggest states (and hence large numbers of electoral college votes.
But then I don't live in the US, and i don't get to vote.
Mick


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## divs4ever (5 November 2022)

there was at one time  , a dread by the Democrats  that Barron ( the fairly young son  of Trump)  would rise to be President after Trump ( assuming Trump had won in 2020 ) which sort of puzzled me  .. i thought an elected President had to be over 35 ( years old ) , and unlike Don Jr  , Barron  has a very low public profile in the press i read


----------



## over9k (5 November 2022)

divs4ever said:


> there was at one time  , a dread by the Democrats  that Barron ( the fairly young son  of Trump)  would rise to be President after Trump ( assuming Trump had won in 2020 ) which sort of puzzled me  .. i thought an elected President had to be over 35 ( years old ) , and unlike Don Jr  , Barron  has a very low public profile in the press i read



Trump junior was the concern. It's still very possible.


----------



## divs4ever (5 November 2022)

for some reason some fixated  on the younger one , now i can see why they may dislike Jr. he seems smart enough to learn from dad ( the good bits and how to avoid some mistakes  dad made )

 time will tell whether  he tries for a political career  , or grows into a new king-maker  ( anoints new players using the Trump legacy as leverage )  , he will certainly have learned much from his father's first term 

 personally  i would like to see Rand Paul strike out on his own ( see if he can be half the statesman his father was/is )  but where is his support-base  , is there any thinking middle-ground left 

 the Republicans stranded his father , i would expect they would do the same to Rand ( you can't have politicians who fail to pander to the big donors )


----------



## over9k (8 November 2022)

And china changes its mind:


----------



## waterbottle (8 November 2022)

over9k said:


> And china changes its mind:
> 
> View attachment 148942




China, the true heroes we don't deserve, combating inflation by locking down their population.


----------



## waterbottle (8 November 2022)

Economy continuing to combat inflation. Wells Fargo reporting residential mortgages down 90%. Meta joining Twitter in cutting jobs. Apple planning to slow production of latest iPhone.


----------



## Knobby22 (8 November 2022)

waterbottle said:


> Economy continuing to combat inflation. Wells Fargo reporting residential mortgages down 90%.



And in Australia, many of the houses on The Block get passed in.  









						What The Block auctions tell us about Australia's housing market
					

After months of production, five houses on The Block went under the hammer... or tried to. Here's how their wildly different auction results represent Australia's current housing market.




					www.abc.net.au


----------



## Smurf1976 (8 November 2022)

Knobby22 said:


> And in Australia, many of the houses on The Block get passed in.



I've always seen that program, the very existence of it, as symptomatic of Australia's misallocation of resources and the housing bubble.

The basic concept of "building" type programs on TV is as old as TV itself but historically they were aimed firmly at those keen to DIY and were showing how to do it, that is they were education of a sort, whereas The Block is firmly in the category of entertainment.

That one of the most successful and now long running programs on Australian TV is about renovating houses speaks volumes in my view.


----------



## divs4ever (9 November 2022)

Smurf1976 said:


> I've always seen that program, the very existence of it, as symptomatic of Australia's misallocation of resources and the housing bubble.
> 
> The basic concept of "building" type programs on TV is as old as TV itself but historically they were aimed firmly at those keen to DIY and were showing how to do it, that is they were education of a sort, whereas The Block is firmly in the category of entertainment.
> 
> That one of the most successful and now long running programs on Australian TV is about renovating houses speaks volumes in my view.



 volumes on what ??

 the IQ of the average Aussie ( TV ) viewer, perhaps  ,  volumes about the advertisers  that want to be linked to such shows ,  maybe volumes about the desperation of the housing industry  to flip homes .


----------



## waterbottle (9 November 2022)

ETH and BTC down double digits... What's going on....


----------



## qldfrog (9 November 2022)

waterbottle said:


> ETH and BTC down double digits... What's going on....



US market in sudden free fall after smooth rising day..crypto are more dynamic and do not stop tradibg in 30 minutes (end of wall street session)


----------



## qldfrog (9 November 2022)

qldfrog said:


> US market in sudden free fall after smooth rising day..crypto are more dynamic and do not stop tradibg in 30 minutes (end of wall street session)


----------



## waterbottle (9 November 2022)

Crypto is the risk canary IMO. 

Looks like one of the exchanges is insolvent


----------



## qldfrog (9 November 2022)

waterbottle said:


> Crypto is the risk canary IMO.
> 
> Looks like one of the exchanges is insolvent



And now market jumping up again....humm.


----------



## waterbottle (9 November 2022)

Looks like FTX was bankrolling Robinhood, which is currently down 19% in after hours trading. Let's see what comes of this. This is the second crypto blow-up this year...


----------



## waterbottle (9 November 2022)

Wow crypto resuming declines.... BTC bouncing off 17k.lowest it's been all year....


----------



## greggles (9 November 2022)

waterbottle said:


> Wow crypto resuming declines.... BTC bouncing off 17k.lowest it's been all year....




I feel like the fit is about to hit the shan with crypto. I sense a huge loss of confidence in the sector and we may see a race towards the exit as panic sets in. Will we see Bitcoin below US$10,000 before the end of 2022? Quite possibly. Interesting times.


----------



## Dona Ferentes (9 November 2022)

_From Ambrose Evans-Pritchard _



> China is slipping back into deflation. Factory gate prices rolled over in the spring and have been falling in absolute terms for the last three months. Annual core inflation has dropped to 0.6 per cent.






> The workshop of the world will again be exporting goods disinflation to Europe and America within months, undercutting Western industries on a large scale. This is likely to deepen the industrial and manufacturing downturn in the West and has powerful implications for interest rates and the trajectory of inflation...


----------



## Dona Ferentes (9 November 2022)

waterbottle said:


> Looks like one of the exchanges is insolvent



even this morning, the news was:



> The rout in crypto markets is showing no signs of abating after the founder of *FTX *crypto exchange Sam Bankman-Fried conceded it had liquidity problems amid a flood of withdrawals. As a result *Binance *has agreed to acquire the world’s largest crypto exchange on unknown terms.




_= run for the hills

_


----------



## waterbottle (9 November 2022)

Word on Reddit is that coinbase may not bail out FTX. Meanwhile this crap keeps coming out, raising concerns of contagion 









						Canada's third-largest pension fund invested in FTX at $32B valuation
					

The Ontario Teachers' Pension Plan invested in FTX in January this year as part of a $400 million funding round.




					cryptoslate.com


----------



## over9k (11 November 2022)

CPI data in, it's good, everything soaring!


----------



## over9k (11 November 2022)

Last time we had a cpi expectations beat we didn't get another one follow it and things instead just melted as soon as the next batch of data was a miss. Worth keeping that in mind.


----------



## Knobby22 (11 November 2022)

over9k said:


> CPI data in, it's good, everything soaring!



7.7%, expected 7.9%. Down from 8.2% previous month. Strong result.


----------



## over9k (11 November 2022)

Knobby22 said:


> 7.7%, expected 7.9%. Down from 8.2% previous month. Strong result.



Yep, markets have moved the most since the first coronavirus vaccine was announced. 

Though we did have a CPI beat a few months back and didn't get any more follow, so I'm kind of surprised that markets have moved this much tbh. Something tells me we're going to see a friday selloff tomorrow.


----------



## UMike (11 November 2022)

And hasn't the NASDAQ rallied!!!!!


----------



## waterbottle (11 November 2022)

Insane moves


----------



## qldfrog (11 November 2022)

waterbottle said:


> Insane moves



Cpi just bad, not very bad so 5% move up and the world is pink lollies and unicorns WTF.
Will probably cost me overall as i still have some bboz and bbus
As for crypto, all good now...really?


----------



## waterbottle (11 November 2022)

Mate CPI is looking excellent. 
7.7% was last month's CPI. 
Oil remains low. 
Food low. 
Shelter will come down given mortgage apps are down and interest rates are high. 
Best of all, job cut announcements are being announced more frequently and by big tech, so the employment market will take a hit too. 
All is proceeding to plan. 
Faith has been restored, St. Powell forgive me for I have sinned. 

6% moves last seen at the COVID bottom.... This is huge


----------



## Dona Ferentes (11 November 2022)

> *Annual inflation *in the United States slowed to 7.7 per cent in October, the lowest since January.





> The October increase marks the first time the consumer price index has risen at an annual rate of less than 8 per cent since February. Annual CPI peaked at 9.1 per cent in June.



And the US 10-year note is below 4% for the first time in a while ... it dropped 26 basis points to 3.83 per cent

_All this provides the Federal Reserve some room to ease the pace of interest rate rises, it is argued by some. Hence a pop today (2% for ASX, with NASDAQ up 6% overnight)_

_Hope Springs Eternal  _( not my golf tournament of choice)


----------



## moXJO (11 November 2022)

Couple of things
Midterms over  split government = rally
Then CPI data looks good= rally
Companies still have strong sheets = justify stupid fomo

So here we (should) go.
I suspect one last good rally anyway.


----------



## over9k (11 November 2022)

China's reducing some of its covid curbs. They're starting to break. 

Remember that we're heading into winter in the northern hemisphere too - reduced energy demand but cold wrecking russian supply.


----------



## over9k (12 November 2022)

Overnight index swaps are now showing a much lower terminal rate. Markets are VERY confident in fed tapering now. Take that for whatever you think it's worth.


----------



## over9k (12 November 2022)

Lots of this type of exuberance now. My thoughts are that it's... optimistic.


----------



## mullokintyre (12 November 2022)

My thoughts are it is plain old ramping.
The US, as is so many other countries (and possibly Australia),are heading for a recession.
Whatever levels the bourse jumps too just means the higher the levels of pain when it overcorrects.
Mick


----------



## waterbottle (12 November 2022)

over9k said:


> View attachment 149107
> 
> 
> Lots of this type of exuberance now. My thoughts are that it's... optimistic.




Yep, might be jumping the gun. Market has definitely done this before (see Jun to Aug), only for JPowell to come out and say they're sticking to their plan - and rightly so, cpi is still 7.7%.
Having said that, we could see the hikes decrease in size. 50bps may be the next move which will also boost markets.


----------



## over9k (12 November 2022)

waterbottle said:


> Yep, might be jumping the gun. Market has definitely done this before (see Jun to Aug), only for JPowell to come out and say they're sticking to their plan - and rightly so, cpi is still 7.7%.
> Having said that, we could see the hikes decrease in size. 50bps may be the next move which will also boost markets.



Yeah, that's my thoughts too - taper brought forward by a quarter or something. A halt seems seriously unlikely.


----------



## InsvestoBoy (12 November 2022)

over9k said:


> GBP's well on its way to parity and AUD at 50 U.S cents will probably be the next domino.






InsvestoBoy said:


> Anything is possible but the dollar sure does seem overbought here.
> 
> Nothing goes up or down in a straight line.






over9k said:


> What are you basing this on?






InsvestoBoy said:


> 🧐 if you peer close enough you can see it
> View attachment 147490






over9k said:


> Technicals? In this environment?




👋


----------



## sptrawler (12 November 2022)

I wonder if the New Zealand experience, is going to be duplicated here?









						ANZ: New Zealand house prices to "fully unwind"
					

ANZ Bank has released research tipping that the Reserve Bank of New Zealand (RBNZ) will have to lift the official cash rate (OCR) another 1.5% to a peak of 5%. ANZ has based its aggressive OCR forecast on the nation’s ‘wage price spiral’, which has caused “significant upside risk” to the...




					www.macrobusiness.com.au


----------



## mullokintyre (12 November 2022)

sptrawler said:


> I wonder if the New Zealand experience, is going to be duplicated here?
> 
> 
> 
> ...



It will be interesting if some of the other NZ stats are replicated here.
From Interest.co.NZ


> “Previous patterns of seasonal price movement for fruit and vegetables suggest it’s more typical to see a larger fall in fruit and vegetables for the October month,” Growden said.
> 
> The monthly price rise was broad-based, with increases seen in 125 of the 162 items Stats NZ measures. In October 2021 they only saw price rises in 82 of the items measured, with the other 80 all falling.
> 
> ...



 The month on month increases as shown on the chart below do not show signs of tapering.




Mick


----------



## Value Collector (12 November 2022)

mullokintyre said:


> My thoughts are it is plain old ramping.
> The US, as is so many other countries (and possibly Australia),are heading for a recession.
> Whatever levels the bourse jumps too just means the higher the levels of pain when it overcorrects.
> Mick



A recession doesn’t really affect the actual long term value of a good company that much, I mean when you are valuing a company you kinda factor in a recession or two every twenty years anyway.

But, so many high quality companies are already trading a values that are low, so a recession is already factored in IMO.

Take a look at Disney for example, it’s now trading at what it was during the covid pandemic when it’s theme parks were literally shutdown and no cinemas were open.

In fact Disney is was $200 in November 2020, it’s $95 now, and the theme parks are open now and booked out, it’s hotels are full, it has two extra booked out cruise ships, etc etc.

I can tell you I would rather a recession any day, than a pandemic.

Of course people do over react to recessions, and share prices crash, but the actual company values of the good companies doesn’t change much, and as we have seen there has already been large falls/ over reactions.


----------



## sptrawler (12 November 2022)

Value Collector said:


> Of course people do over react to recessions, and share prices crash, but the actual company values of the good companies doesn’t change much, and as we have seen there has already been large falls/ over reactions.



Yes it all depends on your personal situation, I've lived through plenty of recessions, when you are young and trying to climb the ladder it is hard, when you are set up and have a secure income stream it is easy.
Just depends where you fit in to the scheme of things. 
I'm fortunate enough to have been through most scenarios, so can appreciate the difficulties and it is just as hard for those who have worked hard for what they have gained and lose it, as it is for those who are struggling to start the climb up the ladder.


----------



## Value Collector (12 November 2022)

sptrawler said:


> Yes it all depends on your personal situation, I've lived through plenty of recessions, when you are young and trying to climb the ladder it is hard, when you are set up and have a secure income stream it is easy.
> Just depends where you fit in to the scheme of things.
> I'm fortunate enough to have been through most scenarios, so can appreciate the difficulties and it is just as hard for those who have worked hard for what they have gained and lose it, as it is for those who are struggling to start the climb up the ladder.



Oh yeah, it can definitely be hard for people on a personal level if they lose their job, or can’t get enough business etc or are not setup to survive high interest rates.

but, I was nah my referring to long term company valuations, let me give you an over simplified example.

Eg, Let’s say a company has a fairly stable business, and pays $5 a year in dividends, if on average the market wants a 5% return over time it’s worth $100 per share.

Now let’s say a recession hits and it’s dividends are going to drop to $2.5 for the next 2 years, before returning to the $5 that the $100 valuation was based on. 

That 50% drop in dividends for two years only really lowers the companies valuation by less than 10%.

So if the market drops in value by 20%, it’s an over reaction, seeing some companies drop by 50% and then still expecting larger drops just because a “recession” might come is of course a huge over reaction. 

Now ofcourse huge market drops to happen, but they should be something to take advantage of, not fear or let spook you into inaction.


----------



## JohnDe (13 November 2022)

A timely reminder, be wary of people yelling at clouds - 



> *The reality gap between gloomy sentiment and reality of wider economy is captured perfectly in the debate around bank shares*
> 
> Sometimes the figures don’t square with the mood on the street. For investors, that reality gap between gloomy sentiment and reality of resilience in the wider economy is captured perfectly in the debate around bank shares that goes something like the below.
> 
> ...


----------



## Belli (13 November 2022)

JohnDe said:


> A timely reminder, be wary of people yelling at clouds -




Generally happens when you are continually fed a diet of bad news and also go actively looking for it.

Tends to be white noise in the main and I have found if able to put it aside and continually invest with available funds, it'll be fine.  Also depends on the focus mine being income rather than price movements.  Back of the envelope calcs indicate that to date I have received some 60% income compared with the 2022FY total income.  Haven't check the prices of my holdings for a couple on months.  They go up, they go down, they may go sideways or they may do a double backflip with pike for all I know.

Of course it requires not spending all the income received and available funds means those you never have to withdraw from the market.

I think it helps not being a cat on a hot tin roof jumping from one thing to another merely because, like you know, you can.


----------



## over9k (13 November 2022)

So have you guys bought into the banks then?


----------



## JohnDe (13 November 2022)

over9k said:


> So have you guys bought into the banks then?




I had been up until recently specifically MQG, doubt I'll buy or sell for quite a while. Was holding one of the traditional banks which I picked up during the Covid crash, sold recently to fund a property investment.


----------



## divs4ever (13 November 2022)

over9k said:


> So have you guys bought into the banks then?



 not me 

 since August 2022  i have been buying small and smallish parcels in

August  - REP , BKL , BEN ,ABC , HLS  , while exiting OGC ,

September - REP , LNK , CAM , RND , EAI , GPT , CMW   and EVN,

October -  RND , TWR , EVN , HLS , ABC , LNK , PAI ,  while reducing WHC 

November - CMW and QVE ( so far )


my top ten  holdings as of the beginning of the month 

( by $value )

1. MQG. ( 'free-carried ')

2. PME ( 'free-carried ' )

3. APE ( at reduced risk )

4. CMW ( at full cash risk )

5. WES ( at full cash risk )

6, NHC ( at full cash risk )

7. BHP ( some profit taken )

8. JHG ( at full cash risk )

9. CDM ( at full cash risk )

10. FMG ( at full cash risk )

with GRR ( at full cash risk ) very close behind

 i started and stopped buying MQG   back in 2011  , and reduced ( 66% of the holding ) after the SYD divestment , but still fully participate in the DRP

 and CMW moved into 3rd over-taking APE during the month  ( partly as a result of the buying )


----------



## over9k (14 November 2022)

I don't see things changing based on one batch of CPI data either.


----------



## over9k (14 November 2022)

Futures now deep into the red with the ndx the worst. 

How surprising (not).


----------



## divs4ever (14 November 2022)

well traditional thinking  is , that official interest rates should be above the CPI  for a while  ( maybe a year or two )

 i have seen analysis that claims that Volcker was lucky (  not the successful strategist  others call him )

i guess we are looking at an attempt  to hike rates above the CPI  without causing  the consequences  Volcker encountered 

 maybe this time they powers that be will try a combination of stealth taxes ( import tariffs ) and a series of small rate rises ( so the rate doesn't exceed the CPI rate)

 personally i don't see how this will work  , looks like i am in for an education


----------



## CityIndex (14 November 2022)

The Japanese Yen and Swiss Franc outperformed in the FX market last week, while gold also had its best week since March 2020, after the soft US CPI print sparked a heavy pullback in the USD.

The greenback has obviously benefited greatly this year from the hawkish Federal Reserve. All trading carries risk, but it will be interesting to see if speculation on a possible slowing in the Fed's rate hike cycle helps these other assets which are typically considered "safe-havens" rally while global recession concerns remain.


----------



## SirRumpole (15 November 2022)

Corporate profits the underlying cause of inflation ?









						'We've definitely got a profit crisis': Is corporate gouging the biggest cause of inflation?
					

Soaring corporate profits are being blamed for fuelling inflation, as figures show companies in Australia are enjoying sky-rocketing profits despite the pandemic.




					www.abc.net.au


----------



## divs4ever (15 November 2022)

Bill Gross: ‘The Fed Knows Nothing’ – Exclusive Interview

https://au.investing.com/analysis/bill-gross-the-fed-knows-nothing--exclusive-interview-200535203


----------



## qldfrog (15 November 2022)

SirRumpole said:


> Corporate profits the underlying cause of inflation ?
> 
> 
> 
> ...



@SirRumpole , i understand a deep ingrained "corporate" hate linked to i would suggest a left minded culture ..and i am all good with that, i erred there too in my youth.
But this is their ABC so a story straight from the ALP narrative.
The corporate profits discussed there were for the last FY..only thing you will see, and if you remove banks and minera..not contributing much to inflation here, there are few corporates there left.
These fy 21 22 profits are a straight result of the covid scam pushed by our governments, and were probably mostly made in the last 2021 calendar year..
Stocks purchased at before covid area and then dumped in a situation of shortage.
Do not shot the messenger..😊


----------



## divs4ever (15 November 2022)

blame everything except Government/RBA policy is the message


----------



## SirRumpole (15 November 2022)

qldfrog said:


> But this is their ABC so a story straight from the ALP narrative.




I would have thought so too if not for the fact that it was backed up by the Chief economist of Global Wealth Management.


----------



## Belli (15 November 2022)

SirRumpole said:


> Corporate profits the underlying cause of inflation ?




That particular piece is four months behind the curve.  It was mooted in June in this article.









						Are record corporate profits driving inflation? Here's what experts think.
					

Economists disagree over whether record corporate profits have driven inflation.




					abcnews.go.com


----------



## qldfrog (15 November 2022)

Belli said:


> That particular piece is four months behind the curve.  It was mooted in June in this article.
> 
> 
> 
> ...



Indeed, past news but only to justify some dpecial taxes etc which could finish already struggling economy.
The issue with relying on ato and abs whhichare aleays being the curve..a bit like using MA() on too long a period......😊


----------



## divs4ever (15 November 2022)

qldfrog said:


> Indeed, past news but only to justify some dpecial taxes etc which could finish already struggling economy.
> The issue with relying on ato and abs whhichare aleays being the curve..a bit like using MA() on too long a period......😊



yes the lag in data  , is a big trap ( like relying on a formal declaration  of recession )

 the data can be useful  , but not as the primary source  of decision-making


----------



## SirRumpole (15 November 2022)

Belli said:


> That particular piece is four months behind the curve.  It was mooted in June in this article.
> 
> 
> 
> ...




Hah, ask 3 economists the same question and get 4 different answers.


----------



## Belli (15 November 2022)

SirRumpole said:


> Hah, ask 3 economists the same question and get 4 different answers.




Yeah.  I only read articles sometimes and post them occasionally. Drawing conclusions from them is way beyond my pay scale and level of arrogance.


----------



## divs4ever (15 November 2022)

i only look to see if the opinion will move the market ( and can i take advantage of that move )

 it might only make ( or save ) me 5 cents a share , but 5 cents is 5 cents i can invest elsewhere  ( somebody has to show fiscal restraint )


----------



## mullokintyre (15 November 2022)

Saw this on the twitter thing this morning.
Its by a former Goldman Sachs economist, but he does not state his source.
That looks like a contraction into recession territory.
Mick


----------



## frugal.rock (15 November 2022)




----------



## over9k (16 November 2022)

PPI up 0.2 month on month vs estimated 0.4. Year on year 8.0 vs 8.3 estimated. More good data. Everything pumping.


----------



## divs4ever (16 November 2022)

over9k said:


> PPI up 0.2 month on month vs estimated 0.4. Year on year 8.0 vs 8.3 estimated. More good data. Everything pumping.



 was that PPI a result of artificially  lowered energy( oil/gas ) costs. ??

take extreme care  , when your data isn't rock-solid , it's like dancing across a mangrove swamp ( blind-folded )


----------



## waterbottle (16 November 2022)

Stray Russian rockets have hit Poland, 2 people killed...


----------



## againsthegrain (16 November 2022)

waterbottle said:


> Stray Russian rockets have hit Poland, 2 people killed...



So more sanctions at minimum if those missiles were russian,  double digits inflation... official that is


----------



## mullokintyre (16 November 2022)

OZ wages have increased by1% in the October quarter.
From Evil Murdoch Empire


> Wages growth accelerated to the fastest pace in a decade over the three months to September, but remained less than half the pace of inflation and confirmed the ongoing hit to workers’ real pay rates.
> The wage price index lifted by 1 per cent in the third quarter lifting the annual increase to 3.1 per cent, from 2.6 per cent in the year to June, according to the Australian Bureau of Statistics.
> 
> In seasonally adjusted terms, this growth was primarily driven by increases in wages for the private sector, which grew at twice the rate of wages in the public sector through the quarter, at 1.2 per cent compared to 0.6 per cent.
> ...



It is instructive to see the rather different take on these figures by the ABC News


> The official measure of wages growth is finally starting to take off, but public sector workers like Kimbra Pettit are being left further behind.
> 
> Key points:​
> Quarterly wage growth of 1.2 per cent in the private sector was the strongest in 12 years
> ...



The figures from the same quarter a year ago showed a somewhat different story.
From SMH


> Australian Bureau of Statistics data shows private sector wage growth is subdued to lower rates than the public sector during financial shocks, including the global financial crisis. This has also been borne out during the coronavirus recession, with the latest data showing a 0.2 per cent rise in the wage price index in the June quarter, the lowest increase on record.
> 
> Private sector wages increased 0.1 per cent, while the public sector jumped 0.6 per cent over the same period.



Stats are a wonderful thing, you can make them show just about anything you want.
For a seven year or so, the private sector lagged behind the public sector. Perhaps its catch up time.


Note edited to change the time period from an incorrect decade to a  more correct seven years.


Mick


----------



## divs4ever (16 November 2022)

yes , there are  lies , damn lies , and statistics 

 a famous quote ( but have forgotten who said it first )


----------



## over9k (16 November 2022)

U.K numbers in, worse than estimated.


----------



## over9k (16 November 2022)

This is what I mean when I say USA is best of a bad bunch. 

8% vs 11%, roughly.


----------



## waterbottle (16 November 2022)

over9k said:


> View attachment 149328
> 
> 
> This is what I mean when I say USA is best of a bad bunch.
> ...




What happens when the US is no longer the leader when it comes to the fight against inflation? 
The EU and UK have been lagging. RBA has slowed down, but getting nudged by the IMF to keep hiking. 

Are we heading into a currency war? Will the US start importing inflation and arrest their CPI decline should the rest of the world catch up?


----------



## over9k (16 November 2022)

Why would the U.S not be the inflation-beaters?

The yanks are energy self sufficient. Almost nobody else is.


----------



## over9k (17 November 2022)

Retail sales numbers now in, poured cold water on this idea that we're out of the woods as the demand side has taken an almighty hit. 

Inflation dropping because demand has hey? Well gee, what a surprise...


----------



## divs4ever (17 November 2022)

waterbottle said:


> What happens when the US is no longer the leader when it comes to the fight against inflation?
> The EU and UK have been lagging. RBA has slowed down, but getting nudged by the IMF to keep hiking.
> 
> Are we heading into a currency war? Will the US start importing inflation and arrest their CPI decline should the rest of the world catch up?



maybe the new leader will be fiscally responsible  ( yes sometimes i am an optimist )

the US has been using the currency as a weapon for decades ( Petro-dollar ) and used war  to keep that dominance ( Libya , Iraq  , as examples )

 now the new majority currency  will be a mystery , for instance China seems to be reluctant  to claim the new reserve currency 

 will there be a BRICS composite currency  , say based  on a SDR ( special drawing rights )  formula 

 BRICS is suggesting  a currency backed by commodities ( not just gold and silver )


----------



## waterbottle (17 November 2022)

over9k said:


> Why would the U.S not be the inflation-beaters?
> 
> The yanks are energy self sufficient. Almost nobody else is.




In relation to IR hikes, not access to energy. BoE talking up big game with IR hikes. We've already seen the DXY fall over the past few weeks on the expectation that the Fed will soon slow down.


----------



## waterbottle (17 November 2022)

over9k said:


> Retail sales numbers now in, poured cold water on this idea that we're out of the woods as the demand side has taken an almighty hit.
> 
> Inflation dropping because demand has hey? Well gee, what a surprise...




Also worth mentioning inflation expectations increased. 
Canadian, Australian, EU and UK inflation rates are still high and aren't following the same trend that the US is on. Neither is NZ, who's central bank was one of the first to start hiking and are continuing to hike aggressively. 

How much of the US' success against inflation is truly attributable to moderated consumption v. appreciation of the USD over the past few months, courtesy of the USD's status as reserve currency and the Fed's relatively aggressive hiking cycle? 
If the Fed slows down its pace of hikes, and the rest of the world catch up, will the USD depreciate? 
What happens to US inflation then?


----------



## over9k (17 November 2022)

waterbottle said:


> Also worth mentioning inflation expectations increased.
> Canadian, Australian, EU and UK inflation rates are still high and aren't following the same trend that the US is on. Neither is NZ, who's central bank was one of the first to start hiking and are continuing to hike aggressively.
> 
> How much of the US' success against inflation is truly attributable to moderated consumption v. appreciation of the USD over the past few months, courtesy of the USD's status as reserve currency and the Fed's relatively aggressive hiking cycle?
> ...



Appreciation of the USD is reason 1 and self-sufficiency/far lower effects of the russian oil (and in particular, gas) sanctions is reason number 2. 

Reason 2 is actually the cause of reason 1 so there's a classic feedback loop helping them out as well.


----------



## over9k (17 November 2022)

Nothing but gut instinct here: We'll see another 75 point rise and then the 50's will start.


----------



## mullokintyre (17 November 2022)

over9k said:


> Retail sales numbers now in, poured cold water on this idea that we're out of the woods as the demand side has taken an almighty hit.
> 
> Inflation dropping because demand has hey? Well gee, what a surprise...



1.3% was higher than even the most optimistic of forecasters had predicted.
California  is poised to overtake Germany and become the 4th largest economy n the world according to Bloombergs
Given that California had handed out 9.5 billion in stimulus checks in early October, perhaps a big jump in retail sales should come as no surprise to those folk who believe that inflation is always and everywhere a money phenomenon , due to the increase in money supply and velocity thereof.
Mick


----------



## waterbottle (17 November 2022)

over9k said:


> Nothing but gut instinct here: We'll see another 75 point rise and then the 50's will start.




Waiting on WSJ to leak. 
CME fed watch tool pricing in 50bps as most likely.


----------



## divs4ever (17 November 2022)

over9k said:


> Why would the U.S not be the inflation-beaters?
> 
> The yanks are energy self sufficient. Almost nobody else is.



 capable of energy self-sufficiency  , yes 

 but government policy  and major investment is deliberately  restricting/reducing that capability  including refining capacity )

AND the US debt levels are so that the Treasury  basically needs to inflate their way out of difficulty ( which is less likely to succeed  because the US Treasury is still accelerating debt issuance  even at rising rates 

 Australia is quite capable of being energy-sufficient  , but decided to out-source most of the oil refining duties


----------



## over9k (17 November 2022)

divs4ever said:


> capable of energy self-sufficiency  , yes
> 
> but government policy  and major investment is deliberately  restricting/reducing that capability  including refining capacity )
> 
> ...



Still better than europe, china etc.


----------



## CityIndex (17 November 2022)

over9k said:


> Retail sales numbers now in, poured cold water on this idea that we're out of the woods as the demand side has taken an almighty hit.



It will be interesting to see what impact (if any at all) the UK's inflation data has on this narrative as well. 

Yesterday's headline print came in at 11.1% while the BOE had been forecasting inflation to peak at 10.9%...


----------



## over9k (17 November 2022)

CityIndex said:


> It will be interesting to see what impact (if any at all) the UK's inflation data has on this narrative as well.
> 
> Yesterday's headline print came in at 11.1% while the BOE had been forecasting inflation to peak at 10.9%...



All energy. Particularly so when all your disposable income is now being obliterated by your fuel, power etc bills.


----------



## divs4ever (17 November 2022)

History lessons: How ‘transitory’ is inflation?​








						History lessons: How ‘transitory’ is inflation?
					

There's bad news for those who believe current inflation is transitory: history suggests once inflation peaks above 8%, as the US and much of Europe did this year, it takes a median 10 years to get the rate back to 3%.




					www.firstlinks.com.au
				




 depends on how many Chinese owned refineries are refining our petroleum products


----------



## moXJO (18 November 2022)

over9k said:


> Retail sales numbers now in, poured cold water on this idea that we're out of the woods as the demand side has taken an almighty hit.
> 
> Inflation dropping because demand has hey? Well gee, what a surprise...



Yep.
Was expecting  a rally but the market is extremely skittish. Be interesting to see if US midterms have broken the rule.

_*Since 1950, there have been 18 midterm election cycles, and in the twelve months following each of those cycles, the stock market has had positive returns.

US stocks have consistently earned positive returns after previous midterms, and delivered average annual returns of 18.6% compared to 10.6% in all other years.
*_
*If we lookout two years after previous midterm elections, the average return has been a blistering 33.7%.*

Apparently the gridlock in Congress means shareholders don't have to worry about new regulations interfering with business.

Interesting to invest through this period.


----------



## over9k (18 November 2022)

moXJO said:


> Yep.
> Was expecting  a rally but the market is extremely skittish. Be interesting to see if US midterms have broken the rule.
> 
> _*Since 1950, there have been 18 midterm election cycles, and in the twelve months following each of those cycles, the stock market has had positive returns.
> ...



Trump also running again however


----------



## waterbottle (18 November 2022)

Japan now reporting 3.7% inflation. Not the first ountry to continue the trend of ever increasing inflation. 
Inflation might be tamed in the US but it certainly isn't in Europe, Australia or Japan. 
It begs the question - will these central bankers continue hiking despite a Fed pivot?


----------



## JohnDe (18 November 2022)

waterbottle said:


> Japan now reporting 3.7% inflation. Not the first ountry to continue the trend of ever increasing inflation.
> Inflation might be tamed in the US but it certainly isn't in Europe, Australia or Japan.
> It begs the question - will these central bankers continue hiking despite a Fed pivot?




Our Reserve bank makes me laugh. 

First, they tell us to borrow and borrow big because rates are locked in until 2024.

And then they say 'oops, that wasn't quite right, Australian's have been naughty and spending too much'.

And now that we've slayed the unemployment dragon the Reserve bank is pissed off because people have money in the bank and want to spend it.


----------



## moXJO (18 November 2022)

Is unemployment low because more boomers retired?
Seems like a hole that won't fill. 
I'm sure we moved past "peak population".


----------



## qldfrog (18 November 2022)

moXJO said:


> Is unemployment low because more boomers retired?
> Seems like a hole that won't fill.
> I'm sure we moved past "peak population".



not only boomer. I am 55 and out and there is quite a huge number of similar people around here on the sunny coast.
This country is trying its upmost to push people out of business and work, if they can afford thru taxes and regulations/red tape, and it works


----------



## moXJO (18 November 2022)

qldfrog said:


> not only boomer. I am 55 and out and there is quite a huge number of similar people around here on the sunny coast.
> This country is trying its upmost to push people out of business and work, if they can afford thru taxes and regulations/red tape, and it works



The amount of costs to business is ridiculous right now. Too many leeches that don't provide much benefit.

I was out at 40 something and got dragged back in. Or was it late 30s... You start losing track of time after a while.


----------



## divs4ever (19 November 2022)

JohnDe said:


> Our Reserve bank makes me laugh.
> 
> First, they tell us to borrow and borrow big because rates are locked in until 2024.
> 
> ...



 sounds just like my parents ( whatever you do was wrong )

 ergo i just do what i think is correct  and  ignore the opinions after the event 

unless the RBA moves the market ( housing , stocks or bonds ) it's all just noise to me


----------



## divs4ever (19 November 2022)

moXJO said:


> Is unemployment low because more boomers retired?
> Seems like a hole that won't fill.
> I'm sure we moved past "peak population".



don't worry they will import cannon-fodder to fill the gap , and then wonder why there is no loyalty ( to the company or nation )

very likely we have gone beyond peak-productivity


----------



## waterbottle (21 November 2022)

Crude at $77/barrel...whats going on?


----------



## divs4ever (21 November 2022)

most likely a price disconnect  , 

 you buy as cheap as you like , as long as you don't expect physical delivery ( just like silver and gold)

 sounds like a trick price to try to fill the Strategic Reserve as cheaply as possible


----------



## over9k (21 November 2022)

Around & around & around we go...


----------



## Knobby22 (21 November 2022)

over9k said:


> View attachment 149554
> 
> 
> Around & around & around we go...



Also shipping container costs. Both these items are anti inflationary however does this show a return to a new normal or a recession?


----------



## over9k (21 November 2022)

Knobby22 said:


> Also shipping container costs. Both these items are anti inflationary however does this show a return to a new normal or a recession?
> View attachment 149562



A bit of both. Collapse in demand from the lockdowns yes but china's macro demographics/structure is beyond terminal.


----------



## over9k (22 November 2022)

Opec now mulling a 500k/day increase. NRGU pounded. Bought at 550.


----------



## moXJO (22 November 2022)

over9k said:


> Opec now mulling a 500k/day increase. NRGU pounded. Bought at 550.



You think this leg down is short lived?


----------



## divs4ever (22 November 2022)

over9k said:


> Opec now mulling a 500k/day increase. NRGU pounded. Bought at 550.



 increase from what ??

 500K above 2021 levels or 500K up from the proposed  cut levels ( only cutting 1.5Mill a day )

 i think this is just gas ( methane )  the price is hinting a floor of $70 a bbl ( too low for many producers   to invest in future exploration/development )


----------



## over9k (22 November 2022)

moXJO said:


> You think this leg down is short lived?




Saudi's deny the rumours. NRGU runs 10% in minutes. Hilarious.

Growth plays still playing with fire.


----------



## waterbottle (22 November 2022)

Growth going to be tough. The recession word is now commonly written into several articles - it was barely mentioned in Jan 2022, lots of talk about a soft landing instead. 
The question, IMO, is whether markets have/are pricing in a recession. I don't think they have - based on the fact there are still massive dumps everytime a company announces (unexpected?) negative earnings and forecasts. More importantly, it was the hopium that was fueling the market in July-August 2022, only to be slammed by a 5-minute reality check by JPowell at Jackson Hole.


----------



## over9k (22 November 2022)

waterbottle said:


> Growth going to be tough. The recession word is now commonly written into several articles - it was barely mentioned in Jan 2022, lots of talk about a soft landing instead.
> The question, IMO, is whether markets have/are pricing in a recession. I don't think they have - based on the fact there are still massive dumps everytime a company announces (unexpected?) negative earnings and forecasts. More importantly, it was the hopium that was fueling the market in July-August 2022, only to be slammed by a 5-minute reality check by JPowell at Jackson Hole.



Yeah, hence my astonishment at how hard markets ran on another ONE batch of decent inflation data. The last one proved to be very short lived. If we got even two in a row then that would be worth running with.

Fixed income is still pricing the terminal interest rate to occur march next year. Still stacks of uncertainty re: china lockdowns & ukraine war. Plenty of very stormy seas yet.


----------



## Smurf1976 (23 November 2022)

over9k said:


> Opec now mulling a 500k/day increase. NRGU pounded. Bought at 550.



Just my theory which can't be proven but I suspect OPEC are in truth pumping flat out and are simply manipulating published quota figures, and building / drawing on their own above ground inventory, to try and control the market but the oil's flowing at the same rate regardless.

Can't prove it but that's my thinking. If you don't want to lose control of the market, if you don't want to acknowledge reality, well then being the bad guy for cutting the quota beats saying you're maxed out. At least that way it at least looks like you're the boss, even if it makes you unpopular it beats saying you've lost control.

Just my thoughts trying to read between the lines and join the dots.


----------



## over9k (23 November 2022)

Smurf1976 said:


> Just my theory which can't be proven but I suspect OPEC are in truth pumping flat out and are simply manipulating published quota figures, and building / drawing on their own above ground inventory, to try and control the market but the oil's flowing at the same rate regardless.
> 
> Can't prove it but that's my thinking. If you don't want to lose control of the market, if you don't want to acknowledge reality, well then being the bad guy for cutting the quota beats saying you're maxed out. At least that way it at least looks like you're the boss, even if it makes you unpopular it beats saying you've lost control.
> 
> Just my thoughts trying to read between the lines and join the dots.



They also have their own internal oil traders that trade on the absolute definition of insider trading so the whole thing could have been a ruse too. 

We'd have to know what their positions were before the "rumours" hit the news to determine this however.


----------



## over9k (23 November 2022)

Also, yeah, I hear you re: much preferable to appear guilty rather than incompetent.


----------



## divs4ever (23 November 2022)

Smurf1976 said:


> Just my theory which can't be proven but I suspect OPEC are in truth pumping flat out and are simply manipulating published quota figures, and building / drawing on their own above ground inventory, to try and control the market but the oil's flowing at the same rate regardless.
> 
> Can't prove it but that's my thinking. If you don't want to lose control of the market, if you don't want to acknowledge reality, well then being the bad guy for cutting the quota beats saying you're maxed out. At least that way it at least looks like you're the boss, even if it makes you unpopular it beats saying you've lost control.
> 
> Just my thoughts trying to read between the lines and join the dots.



 i suspect much of OPEC ( that were allowed to produce their max. ) was already pumping  near the max. way back in 2020 ( remember when they couldn't find storage  , so were renting tankers )

 now given all the narrative about restricting lending to new fossil fuel projects  , so smaller companies won't be expanding ( or progressing )


----------



## over9k (23 November 2022)

It's been a good night lads, NRGU clipping 634 & counting


----------



## over9k (23 November 2022)

645 now lads. Sapphire's going to get something gooooood tonight. 

Sell order's in at 663.


----------



## moXJO (23 November 2022)

over9k said:


> 645 now lads. Sapphire's going to get something gooooood tonight.
> 
> Sell order's in at 663.



Nice call.


----------



## over9k (23 November 2022)

moXJO said:


> Nice call.



Kept me in lapdances for 6 months


----------



## over9k (23 November 2022)

Estimates for AU:


----------



## divs4ever (23 November 2022)

over9k said:


> Estimates for AU:
> 
> View attachment 149617



the article headline  is all that is needed to destroy the faith in the RBA and  the academia branch of economics 

 nice work guys ... if we no longer believe you can we de-fund you and at least reduce government costs ??


----------



## waterbottle (23 November 2022)

RBNZ again leading the charge for the rest of the world. Hiked by 75bps to 4.25% today.  See it rising to 5.5% and expecting economic conditions to deteriorate. No non-sense approach.


----------



## frugal.rock (23 November 2022)

over9k said:


> Kept me in lapdances for 6 months



Lap dancers. Oi.


----------



## moXJO (24 November 2022)

Our market is up a lot since September lows.


----------



## over9k (24 November 2022)

moXJO said:


> Our market is up a lot since September lows.



Almost everything is


----------



## moXJO (24 November 2022)

over9k said:


> Almost everything is



Everything but my weight in tsla


----------



## moXJO (24 November 2022)

over9k said:


> Opec now mulling a 500k/day increase. NRGU pounded. Bought at 550.






moXJO said:


> You think this leg down is short lived?



By the time I  read the above, asked the question, I already missed a decent entry.

My coat-tailing needs to improve. 
I'm not too proud to freeload.


----------



## Value Collector (24 November 2022)

moXJO said:


> Is unemployment low because more boomers retired?
> Seems like a hole that won't fill.
> I'm sure we moved past "peak population".



Population is still growing, we just have to import the growth, our local birth rate has dropped below 2 children per female, which is the rate we need to sustain the population. But our immigration rate will keep the population growing.


----------



## moXJO (24 November 2022)

Value Collector said:


> Population is still growing, we just have to import the growth, our local birth rate has dropped below 2 children per female, which is the rate we need to sustain the population. But our immigration rate will keep the population growing.



Is it "worldwide" that population peaked?
Did hear something about it.
All I know is that nobody can find anyone to work.


----------



## Value Collector (24 November 2022)

moXJO said:


> Is it "worldwide" that population peaked?
> Did hear something about it.
> All I know is that nobody can find anyone to work.



Not yet, we have a global birth rate of around 2.39 children per female, which is positive growth.

Most of the developed world has dropped below 2 though, for example Australia has only 1.5 births per woman which means a population that will begin to decline, but Africa is over 4 births per woman and a lot of south east Asia and India is still over 2.

I don't think the global population is due to begin to decline under the end of the century, until then Australia is a small country and we could easily maintain our population through migration.

I am not worried about the population because its going to be so long until it starts shrinking, and even then the thinking is so gradual and its probably a good think for the people and the planet. Robots can also pick up the slack in labour.


----------



## frugal.rock (24 November 2022)

moXJO said:


> All I know is that nobody can find anyone to work.



Curse you Mo.
You've started this whole twisted Abbot and Costello routine in my head...

Nobody's on first, somebody's on second, anyone on third? Nobody's on third. Can't be, nobody's on first...


----------



## over9k (25 November 2022)

China's covid numbers hit record high. Do they: 

A: Try to contain it by locking everything down like fort knox and turn the entire country into a giant prison 

B: Just give up, make everything total open slather and just let it ravage everyone and it's survival of the fittest. 

Tune in next week to find out!


----------



## over9k (25 November 2022)

over9k said:


> China's covid numbers hit record high. Do they:
> 
> A: Try to contain it by locking everything down like fort knox and turn the entire country into a giant prison
> 
> ...



I mention this because oil markets have dropped in response to it so markets obviously currently think that even bigger/more draconian lockdowns are on the way. 

They literally welded people's doors shut/welded them into their homes last time so who knows what we'll see next.


----------



## Knobby22 (25 November 2022)

over9k said:


> China's covid numbers hit record high. Do they:
> 
> A: Try to contain it by locking everything down like fort knox and turn the entire country into a giant prison
> 
> ...



A. 
Need Sportsbet to cover this.


----------



## Dona Ferentes (25 November 2022)

A few slides from a presentation. Markets have over the past year consistently underestimated inflation, and interest rates. From US data


----------



## InsvestoBoy (25 November 2022)

Dona Ferentes said:


> A few slides from a presentation. Markets have over the past year consistently underestimated inflation, and interest rates. From US data
> 
> View attachment 149721




As my favourite (and I suspect only correct) financial commentator Jeff Snider of https://eurodollar.university likes to say, nominal values in money markets (bonds, swaps, STIR, etc) shouldn't be taken literally. They aren't actually forecasts on the nominal value of the rate, no matter what the media says. But rather they model a probability distribution of possible outcomes.

The useful information is largely contained in viewing the level of rates through the lens of the slope of the curve.

In that sense, despite the first graph being created by its authors to imply the markets were wrong about inflation, one might argue that given the persistent inversion (despite rising levels) of the forward curve as far back as Jun '21, that curve was (as usual) quite prescient in relation to the subsequent collapse in meme stocks, growth/momentum vs value, many industrial commodities, lumber, inflation protected securities, REITs, many currencies (especially EM), Asian stocks, flattening/then inversion of the 2's10's and now the 3m's10's etc.

Imagine surveying this carnage and thinking the Jun '21 deeply inverted curve was "underestimating" anything...then look at that Oct '22 curve and 🤔 what it's saying about the markets implied probability distribution for the future...


----------



## divs4ever (25 November 2022)

Dona Ferentes said:


> A few slides from a presentation. Markets have over the past year consistently underestimated inflation, and interest rates. From US data
> 
> View attachment 149721



 they have been probably been  listening to ( Ronnie James ) Dio when collating the data  , my bet is the song was  Dream On


----------



## over9k (25 November 2022)

InsvestoBoy said:


> As my favourite (and I suspect only correct) financial commentator Jeff Snider of https://eurodollar.university likes to say, nominal values in money markets (bonds, swaps, STIR, etc) shouldn't be taken literally. They aren't actually forecasts on the nominal value of the rate, no matter what the media says. But rather they model a probability distribution of possible outcomes.
> 
> The useful information is largely contained in viewing the level of rates through the lens of the slope of the curve.
> 
> ...







Important to note that the terminal rate pricing hasn't even broken trend yet, it's just off the peak. The only thing we've seen so far is a lower high.


----------



## over9k (25 November 2022)

Black friday looking to be abysmal this year after disposable income's taken the almighty hit that it has over the last year.

Sales numbers estimated to be about 1/3rd lower than last year. Ouch. Adobe analytics do a piece on this every year, I'll see if I can find it.

Edit: 




Not looking good on the raw numbers and particularly not looking good once you factor in inflation. 

Inflation adjusted numbers are negative/contractions.


----------



## Knobby22 (27 November 2022)

over9k said:


> Black friday looking to be abysmal this year after disposable income's taken the almighty hit that it has over the last year.
> 
> Sales numbers estimated to be about 1/3rd lower than last year. Ouch. Adobe analytics do a piece on this every year, I'll see if I can find it.
> 
> ...



What about us, Australia? 
I had to go to a shopping centre today and I have never seen it so busy.


----------



## divs4ever (27 November 2022)

Knobby22 said:


> What about us, Australia?
> I had to go to a shopping centre today and I have never seen it so busy.



but are they buying  discretionary items  or buying ( forward-buying ) essential items 

 this gets a little tricky to assess  , 'essential' for me (  retired on a disability pension ' ) , is very different from a family with school-age children 

  personally i would be watchful  on Australia consumer buying , and see if optimism reigns or Aussies are stocking up the bunker


----------



## Smurf1976 (27 November 2022)

Knobby22 said:


> What about us, Australia?
> I had to go to a shopping centre today and I have never seen it so busy.



People certainly seem to be spending.

Late last year a house near me sold. Nothing fancy, just a ~50 year old 3 bedroom house and it's a young couple who've bought it.

Since then there's been at least $25k worth of renovations done that I know of and none of which could be deemed essential. Nice to have but not essential.

Now I'm not judging to be clear, just observing that there seems to be money around. No way I could've afforded to spend like that at the same age.


----------



## divs4ever (28 November 2022)

Smurf1976 said:


> People certainly seem to be spending.
> 
> Late last year a house near me sold. Nothing fancy, just a ~50 year old 3 bedroom house and it's a young couple who've bought it.
> 
> ...



depends on the couple's income  and job stability  , say two years living/renovating ,  rent out the house  and on to the next/job/city/house  ( keeping the house as investment/future development 

 you can still do it  , if you are willing to take the risk ( and have a great tax accountant )


----------



## over9k (28 November 2022)

It was the black friday sales guys.


----------



## divs4ever (28 November 2022)

over9k said:


> It was the black friday sales guys.



 true  

 and over-stocked items  after the lock-down disruptions 

 going to be some intriguing figures  next half-year from the retail sector 

 but if they are disappointing , is it worth the gamble of buying cheap ??


----------



## over9k (28 November 2022)

divs4ever said:


> true
> 
> and over-stocked items  after the lock-down disruptions
> 
> ...



Depends what you're buying


----------



## divs4ever (28 November 2022)

i was thinking  retail stocks  , and retail-focused REITs  and the half-yearlies disappoint 

 but a LOT of care will be needed even from traders ( say trend trading post-Xmas low turnover and selling into the Easter rally )


----------



## over9k (28 November 2022)

Well I just bought a new fridge and it was a hell of a buy for a measly thousand bucks so make of that what you will.


----------



## waterbottle (28 November 2022)

Markets crapping themselves over Xi?


----------



## divs4ever (28 November 2022)

MAYBE , but maybe  someone is watching accumulated debt metrics , the bond market  , and wondering how many more interest rate rises left in this cycle 

 would have preferred the market rose today so i could  have got some BBOZ   but it didn't so dropped my target price and reduced QBE instead  ( just in case this slide gets a little attitude  , and some extra cash is handy )


----------



## over9k (29 November 2022)

Another NRGU buy at 570. There's actually a lot of talk of the west sending vaccines china's way. Considering how shite the chinese vaccine is and how the lockdowns are wrecking their economy, something's going to give eventually and western vaccines might be it. 

The only thing certain is that they *cannot* go on the way they are.


----------



## farmerge (29 November 2022)

over9k said:


> Another NRGU buy at 570. There's actually a lot of talk of the west sending vaccines china's way. Considering how shite the chinese vaccine is and how the lockdowns are wrecking their economy, something's going to give eventually and western vaccines might be it.
> 
> The only thing certain is that they *cannot* go on the way they are.



Looking at the idiot Box's news tonight something in China is starting to give/break massively, or it appears to be, demonstrations demanding a return to normal. Shades of 1989 when it last happened with dire consequences for those involved and the  population in general.  this is going to be an interesting saga unfolding.


----------



## over9k (29 November 2022)

farmerge said:


> Looking at the idiot Box's news tonight something in China is starting to give/break massively, or it appears to be, demonstrations demanding a return to normal. Shades of 1989 when it last happened with dire consequences for those involved and the  population in general.  this is going to be an interesting saga unfolding.






The whole thing's a total storm in a teacup. Oil's on the climbout already. I bought about 2 mins into the session.


----------



## qldfrog (29 November 2022)

farmerge said:


> Looking at the idiot Box's news tonight something in China is starting to give/break massively, or it appears to be, demonstrations demanding a return to normal. Shades of 1989 when it last happened with dire consequences for those involved and the  population in general.  this is going to be an interesting saga unfolding.



Is it on purpose as suggested before to flush out tge "bad seeds" or a top rivalry vs Xi?
Chinese game


----------



## over9k (30 November 2022)

Markets now betting on them cracking very soon. AUD's pulled hard in response, so has energy.

China's reopen will actually only make inflation (energy demand) worse. Expect to see more rate rises in response.




China reopen = USD weakness as well as increase in global energy demand. Both of these things drive up energy (oil) costs for the yanks. Energy increase = inflation increase, inflation increase = interest rate increase. 

Unless they start to curtail their oil exports...


----------



## mullokintyre (30 November 2022)

OZ cpi came in at 6.9 , less than the  consensus opinions. From Evil Murdoch Empire


> Lower than expected monthly CPI data may cool rate hike bets, but it's too soon to be certain that inflation is slowing, according to AMP Capital senior economist, Diana Mousina.
> 
> With trimmed mean underlying CPI up 0.3 per cent on-month versus 0.5 per cent expected, she says forecasts of a year-end inflation peak around 7.75-8 per cent may be too high and expectations for rate hikes in 2023 could come down.
> 
> ...



Wage pressure may still be there.
Apart from the likely union pushes now the the IR bill looks like it will clear the senate, according to a=nother article from Evil Murdoch press


> Australia faces a “salary stand-off” with employers resisting paying higher wages and employees threatening to walk away as inflation continues to wipe out pay rises.
> That’s the message from one of the nation’s leading recruiters, Robert Walters, based on a salary survey that shows four in five white-collar workers will start looking for a new job if they don’t get a pay rise above inflation in the next 12 months.
> 
> With 56 per cent of their employers saying they won’t be offering salary increases above inflation, next year will see a gap in expectations around wages, according to the survey of about 1500 employees and companies.
> ...



So, as has happened in the past, the wage pressure is very much a lagging process, and despite easing in CPI, the pent up demand for catch up pay rises will go well beyond this point.
Mick


----------



## divs4ever (30 November 2022)

qldfrog said:


> Is it on purpose as suggested before to flush out tge "bad seeds" or a top rivalry vs Xi?
> Chinese game



 or picking losers in the necessary Chinese slowdown ??

smacking Foxcomm ( and Apple ) right in the middle of the stock-market 

how effectively will Amazon  upgrade their servers if China supplies trivial ( but IMPORTANT ) components  on the motherboards


----------



## wayneL (30 November 2022)

Tonight, perhaps:


----------



## Knobby22 (30 November 2022)

mullokintyre said:


> OZ cpi came in at 6.9 , less than the  consensus opinions. From Evil Murdoch Empire
> 
> Wage pressure may still be there.
> Apart from the likely union pushes now the the IR bill looks like it will clear the senate, according to a=nother article from Evil Murdoch press
> ...



Very good results. One more rate rise only I think. Australia may escape yet again.


----------



## sptrawler (30 November 2022)

Knobby22 said:


> Very good results. One more rate rise only I think. Australia may escape yet again.



Should I go and buy a property then?  🤣


----------



## waterbottle (30 November 2022)

Euro & Australian inflation down more than expected.

The narrative is there for a Fed pivot. All eyes on JPow speech tomorrow morning.


----------



## waterbottle (1 December 2022)

US private job creation 127k v. 200k expected. Only growth was in services sectors which are now reporting PMIs less than 50...


----------



## waterbottle (1 December 2022)

__





						Bloomberg - Are you a robot?
					





					www.bloomberg.com
				




China expected to reopen in 2023


----------



## waterbottle (1 December 2022)

St Jerome confirms they will be moderating as soon as December. Looks like 50bps is on he cards. Reiterates that the job is not yet done - particularly in relation to services inflation and wage growth (although today's jobs data show there's already a fall...) . Expects goods inflation to continue to fall into 2023. Predicts housing inflation should fall in 2023. Unsure how long they should hold rates.

Phil Lowe was right, fk...


----------



## over9k (1 December 2022)

Also calls soft landing "very plausible". Big run in response.


----------



## over9k (1 December 2022)

Last time this happened it lasted literally a day just FYI for everyone.


----------



## divs4ever (1 December 2022)

sptrawler said:


> Should I go and buy a property then?  🤣



that would depend on how much cash  you can put down at settlement  , a 5% deposit might be nerve-wracking , whereas ( near )100% cash down could be a compelling deal ( depending on the property returns )

 i was talking on Tuesday  to a shopkeeper  who bought his home  at 18% interest  ( in the 1970's ) but it was done working two jobs because the purchase price  was realistic .


----------



## rcw1 (1 December 2022)

divs4ever said:


> that would depend on how much cash  you can put down at settlement  , a 5% deposit might be nerve-wracking , whereas ( near )100% cash down could be a compelling deal ( depending on the property returns )
> 
> i was talking on Tuesday  to a shopkeeper  who bought his home  at 18% interest  ( in the 1970's ) but it was done working two jobs because the purchase price  was realistic .



Good morning divs4ever
Grandson just bought his first digs.  Happy for him and his partner.  Deposit was just under the 4% mark of the purchase price.  
Them days of 18% interest horrific.  One would hope that don't happen again.   Young bloke is well aware of strategies to combat inflation and future interest rate hikes... Knowledge and the ability to move forward with this knowledge, will be most helpful.  The lad may well have to not buy his routine box of beer... that would be left to grandad, ha  ha ha ha ha

Have a very nice day today.

Kind regards
rcw1


----------



## divs4ever (1 December 2022)

well in my case  i bought ( almost ) 5 acres of vacant land   for $17,500   ( current  estimated value  over $700,000  , still no house but a solar array  feeding into the grid ) @ 17.5%

NORMALLY , RBA  rates need to get above ( real ) inflation  , but what happens this time when most government data is inaccurate ( will banks really lend at 7%  when real inflation is over 12% ? )

 IF property prices start to drop  ( which is possible ) what will banks do when mortgages slide into negative equity ( and what will pensioners go  if they reverse-mortgaged their homes  , just like some politicians suggested )

 looks like a train-wreck coming  , let's see who has long memories


----------



## rcw1 (1 December 2022)

divs4ever said:


> well in my case  i bought ( almost ) 5 acres of vacant land   for $17,500   ( current  estimated value  over $700,000  , still no house but a solar array  feeding into the grid ) @ 17.5%
> 
> NORMALLY , RBA  rates need to get above ( real ) inflation  , but what happens this time when most government data is inaccurate ( will banks really lend at 7%  when real inflation is over 12% ? )
> 
> ...



Hello divs4ever
dunno... rcw1 not smart enough ...

One thing, do know, banks will want their money + ha ha ha ha 

Have a very nice day, today.

Kind regards
rcw1


----------



## divs4ever (1 December 2022)

you don't have to be smart  , just live long enough to learn by experience

 now i prefer second-hand experience  ( learning from others ) because i already have a hide full of scars

 sometimes simple is the best way to go (complexity leaves more room for things to go wrong )

 hint , banks prefer to take more than their fair share  ( at every good opportunity )

 cheers


----------



## rcw1 (1 December 2022)

divs4ever said:


> you don't have to be smart  , just live long enough to learn by experience
> 
> now i prefer second-hand experience  ( learning from others ) because i already have a hide full of scars
> 
> ...



Hello divs4ever,
Banks are not at the top of rcw1 Christmas list nor at the bottom or middle ha ha ha ha.  A necessity... was going to say, a necessary evil, but too strong a language....Anyways getting off topic and rcw1 gotta do some trading work for open.  Have a good day

Kind regards
rcw1


----------



## mullokintyre (1 December 2022)

Some economists are  suggesting caution in the recent CPI figures meaning a halt in interest rates.
From  Evil murdoch press.


> Australia appears to have escaped the worst of the global inflation surge, although some risks remain that prices will push higher again.
> The latest Bureau of Statistics monthly Consumer Price Index Indicator – showing annual inflation fell from 7.3 per cent in September to 6.9 per cent in October – ranks Australia among the world’s lower-inflation economies of the past year.
> 
> The October reading was below market forecasts and is good news for home loan borrowers as it suggests future Reserve Bank interest rate rises may be limited.
> ...






> and More evil murdoch press.



https://www.theaustralian.com.au/bu...s/news-story/d1e3e3b42a9ca174b1b9dc852ee8577e


> Lower-than-expected monthly CPI data give some hope of smaller interest rate hikes, but economists say not to read too much into early signs of a peak in inflation. A 6.9 per cent rise in the recently constructed monthly CPI was well below a consensus forecast of 7.4 per cent, but a long way above the Reserve Bank’s 2-3 per cent target range.
> Still, traders saw less chance of a full 25 basis point lift in the cash rate at the next RBA meeting.
> The S&P/ASX 200 share index jumped to a six-month high of 7284.2 points and the 10-year Commonwealth government bond yield fell 7 basis points to 3.535 per cent.
> The money market implied the Reserve Bank might consider a 15 basis point hike to 3 per cent next Tuesday.
> ...





> Assuming these items record positive price changes, inflation will automatically tend to re-accelerate in the second month of the quarter.
> 
> ANZ economists said the monthly CPI data would not be enough for a “Santa pause” in rates.
> 
> ...



II have in the past suggested that one can take a tad more than a grain of salt when it comes to economic forecasts.
It remains to been if this seemingly consensus forecast proves to be more accurate than others.
Mick


----------



## divs4ever (1 December 2022)

would be a timely opportunity  to 'round' the rate ( a rise of 0.4% ) ( might be a temporary boost to consumer sentiment )

 but have a plan in case of a Santa pause 

 all these rate rises are way too late , they are basically chasing the escaped racehorse ( scaring it to run further out of reach )


----------



## waterbottle (2 December 2022)

Commentators are expecting a recession in 2023 but the recent GDP numbers were revised upwards. How does that make sense? Well I found a nice little editorial demonstrating that GDP numbers are overestimated to the upside during recessions -by a significant margin - so may not be the best indicator for what may happen.





__





						Ouverture du document :  47977 - Etudes Economiques – BNP Paribas
					





					economic-research.bnpparibas.com


----------



## over9k (2 December 2022)

waterbottle said:


> Commentators are expecting a recession in 2023 but the recent GDP numbers were revised upwards. How does that make sense? Well I found a nice little editorial demonstrating that GDP numbers are overestimated to the upside during recessions -by a significant margin - so may not be the best indicator for what may happen.
> 
> 
> 
> ...



Official numbers being fudged you say? 

I am shocked.


----------



## waterbottle (2 December 2022)

over9k said:


> Official numbers being fudged you say?
> 
> I am shocked.




You really think the government would do that? Just feed us lies?


----------



## divs4ever (2 December 2022)

waterbottle said:


> You really think the government would do that? Just feed us lies?



think ??  NO !

 have some interesting documents that prove it  ?

yes  and they have been doing so for over 30 years 

 however more of the masses  are starting  to become aware of this 

now if the unions work out the ALP aren't doing what they are paid to do ( because the unions fund  and provide the foot-soldiers  to the ALP ) we have some interesting times coming


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## over9k (2 December 2022)

It's starting.


----------



## waterbottle (2 December 2022)

If China pivots, where is oil heading? 🤔


----------



## qldfrog (2 December 2022)

waterbottle said:


> If China pivots, where is oil heading? 🤔



Maybe not next week or month but oil can only go up..more and more use,less and less exploration and a dream renewable green world which remains a dream


----------



## over9k (3 December 2022)

over9k said:


> Last time this happened it lasted literally a day just FYI for everyone.



+3% for the nasdaq on this day, now today's jobs' numbers have it 2.25% into the red so probably about -3% once the session opens. 

So yeah. Called it.


----------



## over9k (3 December 2022)

Energy the best of a bad bunch, only sector in the green at open. As usual every time some bad data comes out (which is all the bloody time now).


----------



## divs4ever (3 December 2022)

waterbottle said:


> If China pivots, where is oil heading? 🤔



China will be buying a LOT from Russia and Iran  so maybe the 'US oil price ' will not be directly affected  since that  oil will not be traded through official markets ( i suspect India will use a similar system )

however production shortfalls  may be more influential  on the oil price , especially since Europe has a trend of seizing Russian owned oil refineries ( that will make China VERY NERVOUS )


----------



## divs4ever (3 December 2022)

qldfrog said:


> Maybe not next week or month but oil can only go up..more and more use,less and less exploration and a dream renewable green world which remains a dream



 i would suggest 'more volatile ' thinking the world's two most  populous nations  are now buying a large amount of energy 'off-market' 

i suspect the US will try to rig the ' official market ' just like they do with the gold/silver market ( and the real volume happens quietly in the background )


----------



## qldfrog (3 December 2022)

divs4ever said:


> i would suggest 'more volatile ' thinking the world's two most  populous nations  are now buying a large amount of energy 'off-market'
> 
> i suspect the US will try to rig the ' official market ' just like they do with the gold/silver market ( and the real volume happens quietly in the background )



Exactly, we will have a paper oil at 57 usd a barrel demonstrating how good the EU and USA are at crushing Putin and soon evil Saudis..but your price at the pump will remain stratospheric and the west will levy more super profit taxes on our oilers making sure that no exploration is performed.
Well that is theory/plan .a cap on oil price LoL
I suspect Putin and OPEC will show the west a very long middle finger which might reach deep into our western leaders inner parts.not that Macron would complain based on popular talks in France 🥴
And if oil is bought with gold, noone will accept current "paper" gold


----------



## divs4ever (3 December 2022)

qldfrog said:


> Exactly, we will have a paper oil at 57 usd a barrel demonstrating how good the EU and USA are at crushing Putin and soon evil Saudis..but your price at the pump will remain stratospheric and the west will levy more super profit taxes on our oilers making sure that no exploration is performed.
> Well that is theory/plan .a cap on oil price LoL
> I suspect Putin and OPEC will show the west a very long middle finger which might reach deep into our western leaders inner parts.not that Macron would complain based on popular talks in France 🥴
> And if oil is bought with gold, noone will accept current "paper" gold



Russia will be selling via agreed long-term contracts  to 'friendly  customers ' ( and in agreed currencies/goods )  , now the Saudis  may have a golden lining here  especially if they develop their high-quality silica resource in parallel ( because China is restricting silica exports to Taiwan  , would China do similar to South Korea ?? )


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## Smurf1976 (3 December 2022)

divs4ever said:


> the world's two most populous nations are now buying a large amount of energy 'off-market'



What this really marks is the first major move away from the petrodollar.

If holding USD isn’t the guaranteed and only means of accessing oil then that removes a major reason to hold or even use USD at all.

It’s only a matter of time until other countries and commodities go the same way I expect.


----------



## divs4ever (3 December 2022)

Smurf1976 said:


> What this really marks is the first major move away from the petrodollar.
> 
> If holding USD isn’t the guaranteed and only means of accessing oil then that removes a major reason to hold or even use USD at all.
> 
> It’s only a matter of time until other countries and commodities go the same way I expect.



 yes , that is how i see it also ,

 the second reason  is the debt market  , whoever if US funds/Treasuries are no longer guaranteed  safe from seizure/confiscation ( whether a minor criminal or sovereign holder )  that is a second excuse to hold US Dollar removed

 the third play will be the 'digital dollar ' 

 i hope those US taxpayers have broad shoulders 

 i think China's idea of direct goods swaps  will gain a lot of traction ( and will not only help gold and silver )


----------



## qldfrog (3 December 2022)

divs4ever said:


> yes , that is how i see it also ,
> 
> the second reason  is the debt market  , whoever if US funds/Treasuries are no longer guaranteed  safe from seizure/confiscation ( whether a minor criminal or sovereign holder )  that is a second excuse to hold US Dollar removed
> 
> ...



I see Smurf you and i are on the same mental train.
I have moved some of my USD currency exposure to CHF and believe CHF from historic reasons, stores of PM and  finance haven status could gain relatively soon.
Ironically, the AUD could do relatively well due to our ability to be a commodity backed currency and a "relatively" low debt levels


----------



## divs4ever (3 December 2022)

qldfrog said:


> I see Smurf you and i are on the same mental train.
> I have moved some of my USD currency exposure to CHF and believe CHF from historic reasons, stores of PM and  finance haven status could gain relatively soon.
> Ironically, the AUD could do relatively well due to our ability to be a commodity backed currency and a "relatively" low debt levels



 our defense budget commitments  could see those  debt levels explode  , as well as some newer Government policies 

 the other danger is IF commodities ( in Australia ) are no longer traded in US Dollars  .

 what if .. our biggest customers (  China , India , Japan and South Korea ) want to transact in a different currency  , 

 now iron and metals in exchange for electronics and autos would work for South Korea , maybe for  Japan as well 

Australia's core problem  is we don't value-add on our commodities ( very often )


----------



## waterbottle (3 December 2022)

Smurf1976 said:


> What this really marks is the first major move away from the petrodollar.
> 
> If holding USD isn’t the guaranteed and only means of accessing oil then that removes a major reason to hold or even use USD at all.
> 
> It’s only a matter of time until other countries and commodities go the same way I expect.




Good point, I'd never thought of that although what has happened to countries in the past that tried to steer away from the petrodollars? 
Methinks Russia needs some Freedom


----------



## over9k (3 December 2022)

divs4ever said:


> China will be buying a LOT from Russia and Iran  so maybe the 'US oil price ' will not be directly affected  since that  oil will not be traded through official markets ( i suspect India will use a similar system )
> 
> however production shortfalls  may be more influential  on the oil price , especially since Europe has a trend of seizing Russian owned oil refineries ( that will make China VERY NERVOUS )



They can't get anywhere near what they need from russia.


----------



## divs4ever (3 December 2022)

over9k said:


> They can't get anywhere near what they need from russia.



there are still a few 'Russia-friendly  ' stans up there , and i reckon China can cut a deal with Afghanistan as well , add in under-explored Mongolia   as 'future producers ' , and the Chinese stockpiles ( they reputedly have ) and i reckon they can just about do it  especially if the West applies sanctions on Chinese exports ( would the West do that again ?? )

also China learned a trick or two on recycling 

 it won't  'a time of abundance ' but they only have to out-last the West  and get a clear path to partnering half of Africa 

 currently i would rather be playing China than the EU   in the new world monopoly game


----------



## over9k (3 December 2022)

divs4ever said:


> there are still a few 'Russia-friendly  ' stans up there , and i reckon China can cut a deal with Afghanistan as well , add in under-explored Mongolia   as 'future producers ' , and the Chinese stockpiles ( they reputedly have ) and i reckon they can just about do it  especially if the West applies sanctions on Chinese exports ( would the West do that again ?? )
> 
> also China learned a trick or two on recycling
> 
> ...



China imports almost all of its critical supplies (energy, food etc). You can't build an oil pipeline in five minutes and tankers have to go through several massive chokepoints. 

China's oil supply could be cut off to the point of crippling it within a few hours.


----------



## divs4ever (4 December 2022)

over9k said:


> China imports almost all of its critical supplies (energy, food etc). You can't build an oil pipeline in five minutes and tankers have to go through several massive chokepoints.
> 
> China's oil supply could be cut off to the point of crippling it within a few hours.



 since China is already building a railway to ( Western ) Russia ( originally it was meant to go to Europe as well ) you can bet there is at least one pipeline going from Siberia to China in progress  , i believe a pipeline to India is also in the planning stage ( or more progressed )

don't forget China  is already quietly importing oil from Iran ( which will be undoubtedly outside the US Dollar system )

 i am betting China has a contingency plan , and i bet China has been working on that plan since Trump started the tariff war ( maybe even earlier )

China will not have forgotten the lessons learned during the Bamboo Curtain Days ( since it has had fundamentally the same government structure all that time )

 ALSO  North Korea has a fair bit of coal   that China  has been resisting the importation of  , so it appeared to be a willing player in global initiatives 

 BTW how is China's relationship with Bangladesh , most years Bangladesh has some surplus rice to sell


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## mullokintyre (4 December 2022)

over9k said:


> China imports almost all of its critical supplies (energy, food etc). You can't build an oil pipeline in five minutes and tankers have to go through several massive chokepoints.
> 
> China's oil supply could be cut off to the point of crippling it within a few hours.



According to Financial Tiimes via Zerohedge  


> *In an effort to dull the effect of international restrictions on its oil sales, Russia has discretely assembled a "shadow fleet" of more than 100 tankers*, according to shipping brokers and industry analysts who spoke to the _Financial Times_.
> 
> *The largely anonymous tanker purchases can be tracked by the big increase in unnamed or new buyers* appearing in registries. The vessels are generally 12-15 years old and would be expected to be scrapped in the next few years, said Anoop Singh, head of tanker research at Braemar. -- _Financial Times_
> “We’ve seen quite a number of sales to unnamed buyers in recent months, and *a few weeks after the sale many of these tankers pop up in Russia* to take their first load of crude,” Craig Kennedy at Harvard's Davis Center for Russian and Eurasian Studies told the _Times_.
> ...



So I wonder if the US will try to embargo Russian Tankers from  travelling the high seas.
Would not put it past the US hawks .
Mick


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## over9k (4 December 2022)

mullokintyre said:


> According to Financial Tiimes via Zerohedge
> 
> So I wonder if the US will try to embargo Russian Tankers from  travelling the high seas.
> Would not put it past the US hawks .
> Mick



Doesn't have to be the yanks:




There's only three places oil can flow through/past indonesia and each of them is all of about 2km wide at the depth necessary for a big tanker to sail through. Indonesia could block them, so could korea, so could japan, so could india.

China is totally dependent on these three narrow straits and so, in fact, is most of asia. The only alternative is stuff coming by train from russia etc (not even close to what they need) or across the pacific from america (not really interested in relying on the yanks are they?).

A big, and I mean BIG oil pipeline from russia is the only way they could even think about energy security and they don't have and cannot build one of those in under a multi-year timeline.

Let's also not forget that russian oil, if moving by sea, has to be loaded in the black sea, make its way past turkey (another big choke point) and then through the suez canal (another big choke point).


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## divs4ever (4 December 2022)

over9k said:


> Doesn't have to be the yanks:
> 
> View attachment 150081
> 
> ...



Russia also has this little port called Vladivostok  , AND has been recently testing out the 'Arctic route ' for freight   ( probably won't be useful all-year round  , but even 6 months would be useful ,  they might have to build in 'icebreaker capability ' but Russian builds crude and robust   , habitually, it shouldn't be a biggie in new vessels 

 it is also possible that investment starved Chinese cash   might find Russian pipelines attractive


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## over9k (4 December 2022)

https://www.spglobal.com/commodityinsights/en/ci/research-analysis/espo-crude-oil-pipeline.html 

"In summary, we believe that the ESPO pipeline is a critical route for Russian oil to reach its key consumer, mainland China. However, this pipeline seems to be at its capacity even before the Russia-Ukraine crisis, and it is unlikely for Russia to be able to increase its existing supplies to mainland China via this route. The other pipeline, the Atasu-Alashankou Pipeline, has limited spare capacity. The insufficiency in oil transmission capacity will force Russian barrels to take sea routes to mainland China if Russian ships continue to be diverted from countries that have imposed self-sanctions on Russian crudes. Chinese demand for seaborne Russian crude—particularly the ESPO blend and Urals—will remain stable because these are the preferred grades run by most of the independent/large refineries that are owned and operated by national oil companies".


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## divs4ever (4 December 2022)

but this year there is increased incentive to build extra pipelines  , but maybe not all into China  , i could see  a wisdom  of building a pipeline into Afghanistan and on to Pakistan ( opening a future transit lane  into India  with later pipelines )

although  Russia might also choose to fund  a pipeline from Iran into Afghanistan  and then onto Pakistan and India  and just reap some fees and influence 

 bigger is not always better  , smaller and faster is sometimes  a better solution  with new customers ( and build bigger later when the trade relationship is solid )


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## over9k (4 December 2022)

Sure but how long do you think a pipeline takes to build? Not five minutes that's what. 

And that's before we even start on the supply side problems from russia.


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## divs4ever (4 December 2022)

over9k said:


> Sure but how long do you think a pipeline takes to build? Not five minutes that's what.
> 
> And that's before we even start on the supply side problems from russia.



 but they have plenty of resources available now  , assuming they have abandoned Europe ( with a few exceptions ) as reliable customers 

 the major question is .. can Russia and China manage an alternate technology  to avoid using European designed/made  gear ( like compressor turbines and Siemens electronics )

besides Europe has plenty of problems coming  , not the least potential Russian export bans  and switching away from G7 suppliers of most goods and services ( something that may really benefit India )


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## over9k (4 December 2022)

Oh europe's boned too but that's a different discussion.


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## over9k (5 December 2022)

Index futures all ~0.5% into the red with all the energy etf's +3% or more premarket lads. Brent itself is +2.6%. Looking like another winner tonight.


----------



## over9k (6 December 2022)




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## waterbottle (6 December 2022)

Oil down at the moment. Might just have to sit on hands and wait out volatility?


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## over9k (6 December 2022)

waterbottle said:


> Oil down at the moment. Might just have to sit on hands and wait out volatility?



Or flog at the open just like any other day it's mental premarket


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## waterbottle (7 December 2022)

Oil continuing its downward march, along with the rest of the market. Russia considering an oil price floor but doesn't sound like it'd be very effective.


----------



## mullokintyre (7 December 2022)

OZ GDP was slightly below expectations, coming in at 0.6 for the September quarter.
From ABC News


> Australia's economic growth has come in slightly below expectations, with GDP growing by 0.6 per cent in the September quarter and 5.9 per cent through the year.
> 
> The result was Australia's fourth consecutive quarter of economic growth following a contraction during the COVID-19 Delta wave lockdowns last year, but growth decelerated from 0.9 per cent the quarter before.
> 
> Economists were also generally expecting a slightly stronger reading of 0.7 per cent.



Not many countries  will have had four quarters of growth over the past two years, so we are doing all right.


> Consumer spending was a key driver of the economic growth, as life returned to more normal patterns after two years of significant pandemic disruption.



Consumers are are still out there driving things along.
One can only assume that business must have curtailed a fair bit, as there has been no slacking off in Government Spending.


> Household spending rose 1.1 per cent for the quarter, contributing 0.6 percentage points to GDP, according to the Australian Bureau of Statistics (ABS).
> 
> The national accounts data showed growth was driven by a 5.5 per cent jump in spending at hotels, cafes and restaurants, a 13.9 per cent rise for transport services and a 10.1 per cent increase in the purchase of vehicles.



One wonders how much of the increases in household spending, as well as the  13.9 percent rise in Transport services are due to inflatoion rather than a real increase in spending.
Time will tell.
Mick


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## farmerge (7 December 2022)

waterbottle said:


> Oil down at the moment. Might just have to sit on hands and wait out volatility?



Noticed a big drop in the price of unleaded, $1.70, at the couple of servos we have  but the more important diesel for us is still at over $2 a litre


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## sptrawler (7 December 2022)

It doesn't sound like interest rates will be coming down any time soon.

Economy powers on but ‘bigger challenges to come’​Jim Chalmers warns of ‘bigger challenges to come’ for the nation, as Aussies continue to spend despite rising inflation, helping drive a solid quarter of economic growth.

New cars and hospitality spending contribute to economy growth​The economy expanded by 0.6 per cent in the three months to the end of September as households spent up on new cars and trips to local cafes while reducing their COVID-savings.


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## over9k (7 December 2022)

Same tug-of-war we've seen for months. Nothing new. Still playing the volatility. Obviously bet the other way once the narrative changes back to "oh gee demand is higher than we thought" or "oh gee the supply issues are worse than we thought".


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## over9k (7 December 2022)

Peter Zeihan's latest take.


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## over9k (8 December 2022)

Translation: Europe's realised they can't afford the sanctions.


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## over9k (9 December 2022)

This entire week has just been "flog at open, buy at close".


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## over9k (10 December 2022)

over9k said:


> Energy the best of a bad bunch, only sector in the green at open. As usual every time some *bad data comes out (which is all the bloody time now).*







HMMMMMM HOW SURPRISING (not)

Energy the only sector still in the green premarket. This week's been a ripper.


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## over9k (10 December 2022)

Weak hands are green hands boys.


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## over9k (13 December 2022)

Plenty of this happening too. Inflation is making mincement of the entire industry. 

Very few traders are winners in a bear market. Energy is the *only* play at the moment.


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## divs4ever (13 December 2022)

over9k said:


> View attachment 150395
> 
> 
> Plenty of this happening too. Inflation is making mincement of the entire industry.
> ...



 ???  it appears so, if you bought in during previous lows  ,  but then maybe i am underestimating the traders' skills  , there is undoubtedly plenty of volatility in the sector


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## over9k (13 December 2022)

divs4ever said:


> ???  it appears so, *if you bought in during previous lows*  ,  but then maybe i am underestimating the traders' skills  , there is undoubtedly plenty of volatility in the sector



I've posted some of my more recent degen plays a couple of pages back but here's some earlier ones divs just in case you're worried I've been BS'ing you all and put my mouth where my money isn't: 




To state the obvious, this list is by no means exhaustive, but hopefully this should calm any doubts.


----------



## divs4ever (13 December 2022)

worried about your trading results , absolutely not 

 that is between you and your accountant ,  i do worry that you are playing in a rigged game ( that you cannot rig )

 as i understand it  , trading depends on scale  and your need for 'an adequate margin ' for the risk taken , now a commercial trader has ways to get reduced fees and other  trade regulations ( for example one trade/buy   i am trying to grab   has THREE 62 cent orders in front of me , )

 be careful with energy  , i am guessing  a large amount of commodity is traded away from official exchanges ( for example Russian is now more strongly preferring long-term contracts  which will be sold without a transit into US dollars )


----------



## over9k (13 December 2022)

Yeah you're describing alligator positions divs. Nothing new there.


----------



## waterbottle (13 December 2022)

over9k said:


> I've posted some of my more recent degen plays a couple of pages back but here's some earlier ones divs just in case you're worried I've been BS'ing you all and put my mouth where my money isn't:
> 
> View attachment 150397
> 
> ...




I hope you don't get cut from GS


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## over9k (13 December 2022)

waterbottle said:


> I hope you don't get cut from GS



Wouldn't take a job at GS even if they offered it to me. I've got friends in places and my desire to do the hours etc that they do is zero. I'd go & do a trade or something before I did 80-100 hours a week in a corporate job. 

Anton Kreil had (has) the right idea.


----------



## mullokintyre (13 December 2022)

Doug Casey has put out a most interesting newsletter on food and inflation.


> In 1906, Alfred Henry Lewis stated, "There are only nine meals between mankind and anarchy." Since then, his observation has been echoed by people as disparate as Robert Heinlein and Leon Trotsky.
> 
> The key here is that, unlike all other commodities, food is the one essential that cannot be postponed. If there were a shortage of, say, shoes, we could make do for months or even years. A shortage of gasoline would be worse, but we could survive it, through mass transport or even walking, if necessary.
> 
> ...



I had heard that quote about being 9 meals from anarchy, but the number has varied over time.
Mick


----------



## over9k (13 December 2022)

mullokintyre said:


> Doug Casey has put out a most interesting newsletter on food and inflation.
> 
> I had heard that quote about being 9 meals from anarchy, but the number has varied over time.
> Mick



I've heard "society is only ever one missed meal from a revolution".


----------



## divs4ever (13 December 2022)

over9k said:


> I've heard "society is only ever one missed meal from a revolution".



one missed meal MIGHT be an overstatement given the number  of skipped breakfasts/lunches/dinners i have encountered in my years of employment ( by myself and co-workers ) , but nine ( in a short space of time  ) would be an interesting number especially for those with families , although the traditional family structure is already under pressure ( which may increase or decrease that number of skipped meals )

 but food and water are the biggies  in a cohesive society .   a disrupted society carries it's own risks


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## over9k (13 December 2022)

Told you they'd crack eventually.


----------



## divs4ever (13 December 2022)

assuming they actually cared about the virus , and didn't use it as a convenient  excuse to test out various population control measures ( like some of the West did )


----------



## waterbottle (13 December 2022)

over9k said:


> View attachment 150410
> 
> 
> Told you they'd crack eventually.




Next question is whether their hospitals will get overwhelmed and what effect that would have. 
There's also talk of a 2-week new year shutdown for 2023. 

Interesting that China is now reopening in an environment where Europe is at war and is/heading into a recession, meanwhile US factory orders in China supposedly dropping 40% (if media reports are to be believed). 

What exactly are they reopening into? Xi must see something else - what is it?


----------



## over9k (13 December 2022)

waterbottle said:


> Next question is whether their hospitals will get overwhelmed and what effect that would have.
> There's also talk of a 2-week new year shutdown for 2023.
> 
> Interesting that China is now reopening in an environment where Europe is at war and is/heading into a recession, meanwhile US factory orders in China supposedly dropping 40% (if media reports are to be believed).
> ...



Desperation


----------



## divs4ever (13 December 2022)

waterbottle said:


> Next question is whether their hospitals will get overwhelmed and what effect that would have.
> There's also talk of a 2-week new year shutdown for 2023.
> 
> Interesting that China is now reopening in an environment where Europe is at war and is/heading into a recession, meanwhile US factory orders in China supposedly dropping 40% (if media reports are to be believed).
> ...



well  , it depends  on what they foresee 

 a smart company would have re-tooled   and say set up  for increased penetration  into the Russian market   with mid/high quality stuff 

 phones,autos ( and EVs ), all that stuff Western Companies no longer retail in Russia ( especially electrical/electronic )  and of course China should sell some of the same stuff inside China  to save on foreign currency reserves , and don't forget the rest of Asia where several nations are still INCREASING  their population  , if ( REAL ) Chinese GDP can grow 1% or 2% for the next two years they should be doing fine


----------



## waterbottle (13 December 2022)

over9k said:


> Desperation



If true, Australia is fooked


----------



## divs4ever (13 December 2022)

waterbottle said:


> If true, Australia is fooked



probably on the way to Hell without even a hand-basket to travel in


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## waterbottle (13 December 2022)

divs4ever said:


> probably on the way to Hell without even a hand-basket to travel in




Eh, I'm a bit optimistic.

St. Jerome may be right about the soft-landing fable.

Iron ore price up more than 50% compared to the beginning of the month, so there must be some legs behind the China re-opening.


----------



## divs4ever (13 December 2022)

waterbottle said:


> Eh, I'm a bit optimistic.
> 
> St. Jerome may be right about the soft-landing fable.
> 
> Iron ore price up more than 50% compared to the beginning of the month, so there must be some legs behind the China re-opening.



 so am i , i am still 95% in the market 

 China will recover for sure , but will it be a trading partner or bitter enemy by then ??

 sorry Jerome ain't no saint to me , he lied at least three times too often  ( September 2019  Repo Madness  lost me )


----------



## waterbottle (13 December 2022)

Less than an hour until US CPI.
Inflation expectations down.
Inflation nowcasting predicting 7.27...


----------



## waterbottle (14 December 2022)

Inflation continuing to head downwards! 7.1%
Green shift, here we gooooo


----------



## CityIndex (14 December 2022)

waterbottle said:


> Inflation continuing to head downwards! 7.1%
> Green shift, here we gooooo



US futures are surging on the news as more signs of inflation peaking are helping fuel speculation that a pause in the Fed's hiking cycle could come soon. 
The S&P500 is testing the resistance around the previous highs at 4100. All trading carries risk, but it should be interesting to see if the index can break higher in what is likely to be an extremely volatile week before things quiet down for the holidays.


----------



## over9k (14 December 2022)

7.1 vs 7.3 yearly and 0.1 vs 0.3 month-on-month and markets go nuts.


----------



## Tyre Kicker (14 December 2022)

Didn’t last long…


----------



## CityIndex (14 December 2022)

Tyre Kicker said:


> Didn’t last long…



There's that volatility, and it looks like we could be in for more of the same as the week progresses. 

Still higher on the day, but sellers seem to be doing a good job defending the 4100 resistance on the S&P500 for the time being


----------



## over9k (14 December 2022)

Tyre Kicker said:


> Didn’t last long…






Nope. What was I saying about selling at open?


----------



## waterbottle (14 December 2022)

Interesting sell-off. Let's see what the Fed does tomorrow, more importantly the JPowell speech.
If anything we're looking at 50bps, maybe 25?
Inflation is down trending (and has been for several data points) with yield curves inverting. They must be close to their terminal rate.  
They might decide to pause after tomorrow (as Phil Lowe has done, who seemed to be leading the world with the pivot). 
If they do, that begs the next question: when's the recession happening? Or have we already been in a recession all along with overestimated GDP reports?


----------



## over9k (14 December 2022)

waterbottle said:


> Interesting sell-off.



Pure stupidity. I'm kind of amazed the retail traders haven't run out of money to do this with yet.


----------



## waterbottle (14 December 2022)

Nice bloomberg article summarising how COVID lockdown has stunted China's economy.
https://www.bloomberg.com/news/arti...ely-worsened-before-abrupt-covid-policy-shift

IMO, this adds fuel to the theory that Xi is desperate. Fed has likely over tightened - to the detriment of the UK, several emerging economies and Europe.
Would be interesting to see how much China's reopening will add to inflation in 2023, particularly with use of oil. US CPI has gone from 9.1 to 7.1% over 6 months, how likely is it that they hit 3.1% in Dec 2023?


----------



## InsvestoBoy (14 December 2022)

InsvestoBoy said:


> Great chart from @LizAnnSonders (Chief Investment Strategist for Schwab) on Twitter
> 
> US inflation YoY comparisons are now crazy hard. Even +0.2% MoM every month is going to have CPI at 2% by mid '23. Anything less than that could be staring down a deflationary barrel.
> 
> ...




Just thinking back to the crazy responses this post (based purely on basic mathematics) garnered at the time, and yet, just as basic mathematics would dictate, we are tracking the red line.

YoY inflation comparisons remain crazy hard.

Even consistent +0.2% monthly prints from here are going to see CPI at 2% mid 2023.

Anything less than that...well...I will let the math speak for itself.


----------



## divs4ever (14 December 2022)

InsvestoBoy said:


> Just thinking back to the crazy responses this post (based purely on basic mathematics) garnered at the time, and yet, just as basic mathematics would dictate, we are tracking the red line.
> 
> YoY inflation comparisons remain crazy hard.
> 
> ...



but can you rely on the data used to calculate  that CPI print ??

now China , for instance will MAKE that print so  regardless of the bodies needed  to attain that desire


----------



## waterbottle (14 December 2022)

InsvestoBoy said:


> Just thinking back to the crazy responses this post (based purely on basic mathematics) garnered at the time, and yet, just as basic mathematics would dictate, we are tracking the red line.
> 
> YoY inflation comparisons remain crazy hard.
> 
> ...




Assuming nothing else disrupts the downward trajectory...


----------



## waterbottle (14 December 2022)

Well, the timing couldn't have been better. Western markets will shut down for the next 1-2 weeks. Gives China enough time to recover from COVID. 









						Beijing hospitals under pressure after China’s sudden zero-Covid switch
					

Infected doctors and other staff are pushing on at work so hospitals in China’s capital can continue to treat the public.




					www.scmp.com
				












						r/China - Hospital emergency room in Tianjin under Covid surge
					

229 votes and 99 comments so far on Reddit




					v.redd.it
				




Doesn't look too different compared to Australian emergency departments tbh


----------



## over9k (14 December 2022)

InsvestoBoy said:


> Just thinking back to the crazy responses this post (based purely on basic mathematics) garnered at the time, and yet, just as basic mathematics would dictate, we are tracking the red line.
> 
> YoY inflation comparisons remain crazy hard.
> 
> ...



Question is if we're going to get the whole "Well we had 8% last year so if we have 0% this year that's still kinda 4% over the two years..."


----------



## InsvestoBoy (14 December 2022)

waterbottle said:


> Assuming nothing else disrupts the downward trajectory...




CPI is a massively lagging economic indicator. 

One could go so far as to say that it is the *last* economic indicator to move. Maybe a tie between CPI and employment on how much they lag.

So, no, that's not how it works at all.


----------



## over9k (14 December 2022)

Not the other stuff that the fed acts on though, is it?


----------



## divs4ever (14 December 2022)

InsvestoBoy said:


> CPI is a massively lagging economic indicator.
> 
> One could go so far as to say that it is the *last* economic indicator to move. Maybe a tie between CPI and employment on how much they lag.
> 
> So, no, that's not how it works at all.



 a valid point but would argue wage increases lag even the CPI rises  , therefore wage costs feed into further PPI rises  risking creating a spiral


----------



## waterbottle (14 December 2022)

UK inflation at 10.7%, beats expectations of 10.9% lol


----------



## wayneL (14 December 2022)

I







waterbottle said:


> UK inflation at 10.7%, beats expectations of 10.9% lol



Is that a bullish algorithm? I'm confused.


----------



## InsvestoBoy (14 December 2022)

over9k said:


> Not the other stuff that the fed acts on though, is it?




If the last few years didn't manage to convince you the Fed is inept and irrelevant, nothing ever will.


----------



## waterbottle (14 December 2022)

wayneL said:


> I
> Is that a bullish algorithm? I'm confused.




Algorithm says: this is good for bitcoin


----------



## sptrawler (14 December 2022)

waterbottle said:


> Algorithm says: this is good for bitcoin



Still can't convince myself to buy any, probably another missed opportunity.
But I did manage to jump onboard the potash shortage band wagon and bought some SO4 a while back, do you want to buy them for a really good price?


----------



## moXJO (14 December 2022)

I'm sure it's fine.


----------



## over9k (14 December 2022)

InsvestoBoy said:


> If the last few years didn't manage to convince you the Fed is inept *and irrelevant*, nothing ever will.



I'll give you inept, but irrelevant?


----------



## Smurf1976 (14 December 2022)

If anyone needs any confirmation that we're seeing a broad re-run of the 1970's then this from the BBC ought to do it:




Yep, the UK now has enough ongoing and recurrent strike action to warrant an actual calendar to remind people who's striking on any particular day. Just like the 1970's.

Only a matter of time until we see this in other countries I expect, indeed I've noticed a bit more militancy in Australia in some sectors so it's coming.


----------



## waterbottle (14 December 2022)

Smurf1976 said:


> If anyone needs any confirmation that we're seeing a broad re-run of the 1970's then this from the BBC ought to do it:
> 
> View attachment 150434
> 
> ...



That's nuts. 

Australia probably doesn't have the same pressures that the UK and Europe are facing, particularly with a terminal rate just above 3....


----------



## over9k (15 December 2022)

SELL AT OPEN


----------



## qldfrog (15 December 2022)

Ok so .5% or 50 points increase by the Feds as expected ..yet market not happy.? .rates are still well behind inflation...


----------



## waterbottle (15 December 2022)

qldfrog said:


> Ok so .5% or 50 points increase by the Feds as expected ..yet market not happy.? .rates are still well behind inflation...



Guidance is hawkish.

Fed now expecting a terminal rate of 5.1% with a GDP of 0.5%.

Feds going to crash the economy.

Lets wait for the press conference


----------



## Smurf1976 (15 December 2022)

waterbottle said:


> Fed now expecting a terminal rate of more than 5%.



True although that's only another 0.75% from the present isn't it? It's still saying that the rises are mostly done now.

Whether that turns out to be true is, of course, another matter....


----------



## waterbottle (15 December 2022)

Smurf1976 said:


> True although that's only another 0.75% from the present isn't it? It's still saying that the rises are mostly done now.
> 
> Whether that turns out to be true is, of course, another matter....




Nah market was expecting the pivot to occur I. E. Fed pausing and conceding to the market given yields have been inverting for some time.
Fed just came out with a revised dot plot which essentially ignores market expectations and plans additional hikes.
Fed GDP estimate of 0.5% is probably an over estimate.... They may be signalling that we're heading for a recession without explicitly saying we're heading for a recession.

Time to wait for the presser


----------



## waterbottle (15 December 2022)

Just for reference, here are the dot plots pre and post meeting


----------



## waterbottle (15 December 2022)

JPowell doesn't think they're restrictive enough. Refers journos to dot plot for peak rate, although also admits plots have been revised throughout the year.
They still believe inflation will head upwards. Is this the China reopening effect?

Edit: still focusing on labour market as being source of inflation. Forecasting a 4.6% unemployment rate in 2023, let's see


----------



## over9k (15 December 2022)

Retail trading idiots jumped the gun, nothing more. I've made post after post after post saying we aren't out of the woods yet/how it's only been a day or whatever before markets have turned again even if we have gotten some decent data for a change but NOPE.


----------



## waterbottle (15 December 2022)

over9k said:


> Retail trading idiots jumped the gun, nothing more. I've made post after post after post saying we aren't out of the woods yet/how it's only been a day or whatever before markets have turned again even if we have gotten some decent data for a change but NOPE.



LOL I think it's more than just retail moving the market.


----------



## over9k (15 December 2022)

waterbottle said:


> JPowell doesn't think they're restrictive enough. Refers journos to dot plot for peak rate, although also admits plots have been revised throughout the year.
> They still believe inflation will head upwards. Is this the China reopening effect?



Here's why I would still be nervous if I was him: 




Remember that this is just the rig count too, not the flow rate. Rigs flow their fastest at the beginning and then the rate tapers off over time:




So take a ~1m barrels/day shortfall and then factor in how much they've diverted/are still trying to divert to europe to replace the russian supply too and there's a biiiig problem.


----------



## over9k (15 December 2022)

waterbottle said:


> LOL I think it's more than just retail moving the market.



Who do you think was buying all of these:




"There is a lot more demand to trade and carry option positions in SPY than normal".

Open interest way above normal (**** me, it's 20% above normal...) means only one thing


----------



## waterbottle (15 December 2022)

over9k said:


> Who do you think was buying all of these:
> 
> View attachment 150481
> 
> ...



Sure that's the degen play, but I don't think they've been shifting bonds lol


----------



## over9k (15 December 2022)

waterbottle said:


> Sure that's the degen play, but I don't think they've been shifting bonds lol



One begets the other


----------



## waterbottle (15 December 2022)

over9k said:


> Here's why I would still be nervous if I was him:
> 
> View attachment 150479
> 
> ...




Good point, but JPowell is focused on employment, not energy as the source of inflation. That might be a deficiency on their part. 

The main employment issues seem to be:

Average hourly earnings are too high
Vacancies are too high
He describes the labour market as behaving as though there's a structure shortage yet the FOMC is projecting an increase in unemployment for 2023. How? Are they going to create/import more workers?


----------



## over9k (15 December 2022)

waterbottle said:


> Are they going to create/import more workers?



Yes, that's what immigration policy is for - importing cheap labour.


----------



## waterbottle (15 December 2022)

over9k said:


> Yes, that's what immigration policy is for - importing cheap labour.




From where? The US has been open for the past year. And wouldn't immigration contribute to inflation?


----------



## over9k (15 December 2022)

waterbottle said:


> From where? The US has been open for the past year



Anywhere they can


----------



## waterbottle (15 December 2022)

Nasdaq poking it's head into the green, never a boring day


----------



## over9k (15 December 2022)

"Will have to hold restrictive rates for some time, median rate forecast of 5.1 for 2023"


----------



## divs4ever (15 December 2022)

over9k said:


> I'll give you inept, but irrelevant?



 are you sure they are inept  ( rather than disingenuous ) after all their major , most frequently used tool is 'the jawbone '

now irrelevant  is coming  , how many inaccurate forecasts  before most traders/investors  say 'whatever ' and just trade the market move , whatever it is


----------



## divs4ever (15 December 2022)

waterbottle said:


> From where? The US has been open for the past year. And wouldn't immigration contribute to inflation?



depends if the drugs they are trafficking goes up as well  , if the price of illegal drugs was to fall  ( or god forbid , they start importing cheap generic prescription pharmaceuticals  flooding the markets in that sector ) that might be deflationary


----------



## moXJO (15 December 2022)

*“We wouldn’t…try to crash the economy and then clean up afterwards,” Chairman Powell recently remarked. “I wouldn’t take that approach at all.” Yet that is, in fact, what every other Fed Chair has done during predictable yield‐curve‐inversion recessions.*



_*In October I wrote, “CPI Less Rent Was Zero for 3 Months; CPI Rent Is Wrong.”
Nobody appeared to find that interesting.
Now, CPI less rent has shown zero inflation for 5 months.
How long can zero remain uninteresting?*_
*Some prices went up over the past five months and others went down, but the weighted average increase for everything in the average consumer’s shopping basket was nil once we properly exclude disingenuous and outdated estimates of shelter inflation.*

Not sure if this guy is right on the second comment but the first is on the money and I expect it will occur again. 
Forced hard landing either by design or ineptitude.

https://www.cato.org/blog/history-cautions-against-loosening-fed-policy-too-late-3


----------



## waterbottle (15 December 2022)

moXJO said:


> *“We wouldn’t…try to crash the economy and then clean up afterwards,” Chairman Powell recently remarked. “I wouldn’t take that approach at all.” Yet that is, in fact, what every other Fed Chair has done during predictable yield‐curve‐inversion recessions.*
> 
> 
> 
> ...




To paraphrase Jpowell: it's services, not goods, that are still driving inflation. And that's being driven by a tight labour market. 

The Fed is now expecting US unemployment to head up in 2023 from a median 3.7% in 2022 to 4.6% in 2023, 2024 and 4.5% in 2025. Meanwhile GDP is heading down in 2023 to a median 0.5% - look at the distribution, obviously some on the board who expect it to be negative following revisions from only 3 months earlier. 



To top it all off they're going to hike a further ~100bps.

So you've got negative GDP, job losses and tighter monetary conditions. How does this happen *without *a recession?


----------



## over9k (15 December 2022)

waterbottle said:


> To paraphrase Jpowell: it's services, not goods, that are still driving inflation. And that's being driven by a tight labour market.
> 
> The Fed is now expecting US unemployment to head up in 2023 from a median 3.7% in 2022 to 4.6% in 2023, 2024 and 4.5% in 2025. Meanwhile GDP is heading down in 2023 to a median 0.5% - look at the distribution, obviously some on the board who expect it to be negative following revisions from only 3 months earlier.
> View attachment 150494
> ...



Bingo, read twice lads, bottle is on the money. PPI below estimates but CPI above them means it's labour driven. 

Good post


----------



## Smurf1976 (15 December 2022)

waterbottle said:


> So you've got negative GDP, job losses and tighter monetary conditions. How does this happen *without *a recession?



Fully agree there. Looking ahead (2023) I do think a "hard landing" is extremely likely and I expect the Fed's fully aware of this, just not saying it publicly.

I was however expecting the announcement, or at least the wording around it, to be seen as positive enough by the stock market to send the indices up rather than down in the short term (now through end of year). Just a thinking on my part there, that's what I was expecting.

I don't consider the Fed to be incompetent, just misunderstood. If you take what they say literally then yeah, they're incompetent but personally I see that as part of the game. What they say and what they do aren't intended to align. They're not like the weather bureau doing their best to accurately forecast the weather. They're more like the car salesman trying to convince you to do what they want you to do, which may or may not be what's best for you.


----------



## over9k (15 December 2022)

And then you get supply issues to factor in as well... 

Messy hey?


----------



## InsvestoBoy (15 December 2022)

over9k said:


> I'll give you inept, but irrelevant?




Utterly.









						Why The Fed's Balance Sheet Reduction Is As Irrelevant As Its Expansion
					

The FOMC is widely expected to vote in favor of reducing the system’s balance sheet this week. The possibility has been called historic and momentous, though it may be for reasons that aren’t very kind to these central bankers. Having started to swell almost ten years ago, it’s a big deal only in




					alhambrapartners.com


----------



## over9k (15 December 2022)

InsvestoBoy said:


> Utterly.
> 
> 
> 
> ...



Markets have swung wildly just on st jerome's comments and perception = reality in this business.


----------



## InsvestoBoy (15 December 2022)

over9k said:


> Markets have swung wildly just on st jerome's comments and perception = reality in this business.




I mean...exactly.

If you need any more proof of the absolute irrelevance of the Fed, look no further than the fact that their entire repertoire has been reduced to their effectiveness in managing perceptions.

They don't manage anything else, that's for sure.


----------



## InsvestoBoy (15 December 2022)

over9k said:


> Markets have swung wildly just on st jerome's comments and perception = reality in this business.




I'm just thinking of all the stupid **** that Central Bankers have said since 2007 and the hilarity that people believe any of those absurdities have influenced reality in any way.








etc


----------



## over9k (15 December 2022)

Anything that markets respond to is relevant IMO. Whether you/I think they're doing so rightly or wrongly is a different thing.


----------



## InsvestoBoy (15 December 2022)

over9k said:


> Anything that markets respond to is relevant IMO. Whether you/I think they're doing so rightly or wrongly is a different thing.




I wish you and all the others hanging on to the words of the likes of Mr Powell all the luck in the world.


----------



## over9k (15 December 2022)

InsvestoBoy said:


> I wish you and all the others hanging on to the words of the likes of Mr Powell all the luck in the world.



When did I ever say I was doing that? 

If markets want to go mental based on a bit of data or a fed comment and I can hop on the hype train and bail before everyone realise how dumb doing so actually was then all the better.


----------



## Smurf1976 (15 December 2022)

Suppose that the Fed makes an announcement next week that they've got some new information and based on that, they now think that further rate rises are unlikely.

Anyone think that wouldn't see the markets take off like a rocket?

They're relevant yes. Their impact isn't zero.


----------



## waterbottle (15 December 2022)

I don't think anyone can deny the when JPow and Fed speaks, the market moves. They're very relavent.

That doesn't mean they're effective at managing monetary issues.


----------



## divs4ever (15 December 2022)

moXJO said:


> *“We wouldn’t…try to crash the economy and then clean up afterwards,” Chairman Powell recently remarked. “I wouldn’t take that approach at all.” Yet that is, in fact, what every other Fed Chair has done during predictable yield‐curve‐inversion recessions.*
> 
> 
> 
> ...



 does that mean he intends to succeed at crashing  the economy , or he has no intentions  of helping in the clean-up ??

 sounds more like the CPI calculation was wrong  , maybe the basket was heavy in crypto-tokens


----------



## over9k (15 December 2022)

waterbottle said:


> I don't think anyone can deny the when JPow and Fed speaks, the market moves. They're very relavent.
> 
> That doesn't mean they're effective at managing monetary issues.



Whether it's wise for markets to react like this is another question. As best I can tell, instevo thinks it foolish.

To my mind, the fed becomes irrelevant when markets conclude it has lost control. Doesn't mean it hasn't already, but if markets don't think it then...


----------



## Smurf1976 (15 December 2022)

divs4ever said:


> does that mean he intends to succeed at crashing the economy , or he has no intentions of helping in the clean-up ??



I take it to mean they're going to do exactly what they've said they wouldn't try to do.

Whilst I'm cautiously optimistic about the market in the very short term, the rest of the year, I think the Fed's communicating a clear message about what's ahead here. They're going to crash the economy and probably the stock market as well.


----------



## InsvestoBoy (15 December 2022)

Smurf1976 said:


> Suppose that the Fed makes an announcement next week that they've got some new information and based on that, they now think that further rate rises are unlikely.
> 
> Anyone think that wouldn't see the markets take off like a rocket?
> 
> They're relevant yes. Their impact isn't zero.




Assuming that scenario occurred, so what exactly? How does it make the Fed relevant? 

Some first order thinkers thought "rate hike pause good, buy stonks" and from this we are supposed to infer the Central Bank is relevant? What if the next day second order thinkers come along and say "wait, what's happening in the real economy and monetary system that CB thinks they should pause, sell stonks"? Does that reduce their relevance to you? 

The Fed doesn't manage the S&P500, they are *supposed* to manage money. The marginal response of some misguided market participants in some decidedly not "moneyish" market does not make CBs relevant.


----------



## waterbottle (15 December 2022)

InsvestoBoy said:


> Assuming that scenario occurred, so what exactly? How does it make the Fed relevant?
> 
> Some first order thinkers thought "rate hike pause good, buy stonks" and from this we are supposed to infer the Central Bank is relevant? What if the next day second order thinkers come along and say "wait, what's happening in the real economy and monetary system that CB thinks they should pause, sell stonks"? Does that reduce their relevance to you?
> 
> The Fed doesn't manage the S&P500, they are *supposed* to manage money. The marginal response of some misguided market participants in some decidedly not "moneyish" market does not make CBs relevant.




You've just defined their relavence.


----------



## divs4ever (15 December 2022)

to ascertain  Fedspeak to relevancy one should remember some HFTs  have automated analysis  using 'keywords in statements/announcements and the computer trade on that  before human traders can react , 

so the question should probably be about the ( human ) traders do they instinctively  ride the trend ( created by the HFTs ) or  trade counter to the initial reaction ,  now given Jerome's CV ( before the Fed job ) what is the chances of deliberately planting 'keywords ' ??


----------



## Smurf1976 (16 December 2022)

InsvestoBoy said:


> Assuming that scenario occurred, so what exactly? How does it make the Fed relevant?



Relevance has nothing to do with competence or being good or bad.

Someone who interjects at a theatre performance has added nothing of value to it but they're relevant to the experience of everyone else watching it yes, indeed they'll likely be what others remember most about the whole thing.

The S&P500 is now down 4.8% from its value shortly prior to the Fed announcement and whilst it remains to be seen, it's at least possible that they've reversed the medium term direction of the market.

There'd be very few others on the planet who could trigger a move anywhere near that scale, indeed most traders and even banks couldn't move the index by any measurable amount at all. However relevant they are or aren't, they're far more relevant than 99.9999% of others.


----------



## over9k (16 December 2022)

InsvestoBoy said:


> What if the next day second order thinkers come along and say "wait, what's happening in the real economy and monetary system that CB thinks they should pause, sell stonks"?



Yes and in the meantime you've sold on the day the first order thinkers were losing their collective minds in response to the fed comments like the degenerates that they are. 

Anything which moves markets is relevant to positioning. Anything.


----------



## over9k (16 December 2022)

Meanwhile, lol, look at the markets today. 

Today is a perfect example of what I'm talking about:


----------



## Knobby22 (16 December 2022)

This short term stuff is all automated computer trading with trigger words.
If a human punter wants to take that on then watch out.


----------



## InsvestoBoy (16 December 2022)

over9k said:


> Yes and in the meantime you've sold on the day the first order thinkers were losing their collective minds in response to the fed comments like the degenerates that they are.
> 
> Anything which moves markets is relevant to positioning. Anything.




Again, wishing you and all the others who hang onto the words of Central Bankers all the luck in the world.


----------



## over9k (16 December 2022)

InsvestoBoy said:


> Again, wishing you and all the others who hang onto the words of Central Bankers all the luck in the world.



Again, when did I ever say I was doing that?


----------



## InsvestoBoy (16 December 2022)

Smurf1976 said:


> The S&P500 is now down 4.8% from its value shortly prior to the Fed announcement and whilst it remains to be seen, it's at least possible that they've reversed the medium term direction of the market.
> 
> There'd be very few others on the planet who could trigger a move anywhere near that scale, indeed most traders and even banks couldn't move the index by any measurable amount at all. However relevant they are or aren't, they're far more relevant than 99.9999% of others.






@Smurf1976 you are a smart guy...I dunno why you say things like this. The Fed did not reverse the direction of the market. Those traders and banks who you say can't move it by any amount are the very ones who have done the thing you said they can't do.


----------



## over9k (16 December 2022)

InsvestoBoy said:


> @Smurf1976 you are a smart guy...I dunno why you say things like this. The Fed did not reverse the direction of the market. Those traders and banks who you say can't move it by any amount are the very ones who have done the thing you said they can't do.



Yes and they did it in response to fed actions/comments. How are you not getting this?


----------



## InsvestoBoy (16 December 2022)

over9k said:


> Yes and they did it in response to fed actions/comments. How are you not getting this?




You think they did, but you have no evidence that this is the case. All the evidence from people who study how markets function shows the opposite.

If you knew more about how markets worked, you would realise you're wrong.

The *resolution* of event risk moves markets today just as it always has. Options dealers and market makers especially. It's the event and participants, not the content of the event that drives the price action. As a stylised simple example, let's say a lot of people were buying puts into the CPI print. After the CPI is over they no longer need the puts because the event has passed. Now the options dealers need to do a lot of trading to handle that flow. It's a lot of money. It shows up as price action for a few days. It doesn't *mean* anything.

Options dealers and market makers do not have a view on the Fed. They do not care.


----------



## over9k (16 December 2022)

InsvestoBoy said:


> You think they did, but you have no evidence that this is the case. All the evidence from people who study how markets function shows the opposite.
> 
> If you knew more about how markets worked, you would realise you're wrong.



Oh yeah, the fact that we see almost vertical movements within seconds of a data dump or fed statement like this every single time such a data dump or fed comment occurs: 





Is just a giant coincidence that also just happens to occur _every single time as well. _

Give me a break.


----------



## over9k (16 December 2022)

Come on dude, let's hear you explain why we see things like a 3% move in NDX futures within 60 seconds of a jpowell statement. You assert that it's not the fed causing it, so let's hear it, why does it really occur so much so quickly so consistently? 

I'll wait.


----------



## InsvestoBoy (16 December 2022)

over9k said:


> Come on dude, let's hear you explain why we see things like a 3% move in NDX futures within 60 seconds of a jpowell statement. You assert that it's not the fed causing it, so let's hear it, why does it really occur so much so quickly so consistently?
> 
> I'll wait.




Keep waiting, I don't mind if you want to delude yourself.


----------



## over9k (16 December 2022)

InsvestoBoy said:


> The *resolution* of event risk moves markets today just as it always has. Options dealers and market makers especially. It's the event and participants, not the content of the event that drives the price action. As a stylised simple example, let's say a lot of people were buying puts into the CPI print. After the CPI is over they no longer need the puts because the event has passed. Now the options dealers need to do a lot of trading to handle that flow. It's a lot of money. It shows up as price action for a few days. It doesn't *mean* anything.
> 
> Options dealers and market makers do not have a view on the Fed. They do not care.



Absolute shite. An options trader doesn't know the exact second powell is going to make some kind of statement in response to a question or whatever. You can buy options that expire minutes/seconds after the CPI dump or whatever if you want but you have no idea when powell is or isn't going to say something that'll move markets massively. 



InsvestoBoy said:


> It's the event and participants, not the content of the event that drives the price action.



Yes, and it's the content of the event that dictates what the participants will do. Again, how are you not getting this?


InsvestoBoy said:


> It doesn't *mean* anything.



Tell me exactly what you mean by a big move in response to a data dump or fed comment meaning something. 


Honestly, the idea that markets don't respond to what the fed does/says is just about the most ridiculous thing I've ever heard. 

Anything that effects markets is relevant. The more it effects them, the more relevant it is, and the fed effects things massively.


----------



## over9k (16 December 2022)

InsvestoBoy said:


> Keep waiting, I don't mind if you want to delude yourself.



Hah, that's what I thought. 

You're an idiot.


----------



## over9k (16 December 2022)

InsvestoBoy said:


> Great chart from @LizAnnSonders (Chief Investment Strategist for Schwab) on Twitter
> 
> US inflation YoY comparisons are now crazy hard. Even +0.2% MoM every month is going to have CPI at 2% by mid '23. Anything less than that could be staring down a deflationary barrel.
> 
> ...



Hang on a minute mate, why are you saying the fed needs to back way off right now? I thought the fed was irrelevant?

I mean, if the fed's irrelevant, it can't effect things can it? So why ask for action from something that can't make any difference? Seems a bit odd?


----------



## divs4ever (16 December 2022)

over9k said:


> Come on dude, let's hear you explain why we see things like a 3% move in NDX futures within 60 seconds of a jpowell statement. You assert that it's not the fed causing it, so let's hear it, why does it really occur so much so quickly so consistently?
> 
> I'll wait.



since several ( former ) Fed officials have been detected  front-running the markets  and HFTs usually including news-filtering software  a VERY quick response  hints at fore-knowledge and/or automated trading  

 perhaps that question would be better put to the regulators ( who have the ability to analyze those transactions in depth after the fact )


----------



## waterbottle (16 December 2022)

Looks like the ECB and BoE also hiked overnight, both planning on increasing further into 2023. 

Phil Lowe is going to have to backpedal...


----------



## over9k (16 December 2022)

InsvestoBoy said:


> If something truly crazy happens, like oil gapping to $200-300, is raising rates really going to be the right reaction? They will be knifing the economy into a crisis. I just don't see it.



But the fed's irrelevant bro, how could it raise rates and knife the economy into a crisis? The fed doesn't effect markets according to you.


----------



## over9k (16 December 2022)

@Joe Blow This guy is either galactically stupid and genuinely believes what he's saying or he doesn't and he's just arguing in bad faith. Either way, it's getting tiresome. Every post he makes is just one giant case of "You're wrong and stupid. I'm not going to explain why, you just are". 

So I'm voting for him to explain his assertions or ban.


----------



## Joe Blow (16 December 2022)

over9k said:


> @Joe Blow This guy is either galactically stupid and genuinely believes what he's saying or he doesn't and he's just arguing in bad faith. Either way, it's getting tiresome.




If no common ground can be found, and no progress is being made, then I would consider the use of the software's ignore feature. It's a last resort move, but that's what it's there for.


----------



## over9k (16 December 2022)

InsvestoBoy said:


> Keep waiting, I don't mind if you want to delude yourself.






I'm just going to leave this here for anyone seriously thinking about listening to this idiot. I'm hitting ignore.


----------



## waterbottle (16 December 2022)

We're debating semantics at this point. Even if you didn't think the Fed was 'relevant' to the economy/market, the fact that the market movements are correlated with Fed members speaking is enough of a reason to take notice.


----------



## over9k (16 December 2022)

waterbottle said:


> We're debating semantics at this point. Even if you didn't think the Fed was 'relevant' to the economy/market, the fact that the market movements are correlated with Fed members speaking is enough of a reason to take notice.



It's almost as if they're in some way connected.


----------



## mullokintyre (16 December 2022)

waterbottle said:


> Looks like the ECB and BoE also hiked overnight, both planning on increasing further into 2023.
> 
> Phil Lowe is going to have to backpedal...



And you can add Canada to the list .
Increased by 50 basis points on December 7th.
This list of CB's that changed interest rates recently includes only 5 out of 26 Cb's to have dropped interest rates.
Mick


----------



## over9k (16 December 2022)

Worth noting that central banks don't all meet with the same frequency - pretty sure the fed's 8x per year vs the rba being 11x (just off the top of my head) for example.


----------



## Smurf1976 (16 December 2022)

Joe Blow said:


> If no common ground can be found, and no progress is being made, then I would consider the use of the software's ignore feature. It's a last resort move, but that's what it's there for.



Personally I'm happy to agree to disagree and won't choose to block anyone I disagree with.

I'm just really not following the reasoning being presented but I'll live.....


----------



## over9k (16 December 2022)

This is european for "we are f**ked".


----------



## divs4ever (16 December 2022)

over9k said:


> View attachment 150556
> 
> 
> This is european for "we are f**ked".



subject to revision , of course 

 but am very glad in hindsight  i didn't buy into Westfield to get the EU REIT exposure  after the take-over  ( URW i think it is )

 although my investments into NZ as an alternative ( to the EU ) might still come back to bite hard 

 sometimes my dithering is a good thing


----------



## waterbottle (16 December 2022)

Just saw this on WSB, going to dig around a bit more and see if this is relevant or not....


----------



## waterbottle (16 December 2022)

Hmmmmmmmm... So Fed has been raising interest rates based on overestimated jobs data... That last sentence in the bottom suggests there might be further downward revisions... So are we in a recession?


----------



## divs4ever (16 December 2022)

waterbottle said:


> Hmmmmmmmm... So Fed has been raising interest rates based on overestimated jobs data... That last sentence in the bottom suggests there might be further downward revisions... So are we in a recession?
> 
> View attachment 150561



my bet is YES and maybe for more than a year , maybe even including the outrageous money-printing as real GDP  wedged into the calculations (political manipulations )


----------



## sptrawler (17 December 2022)

The thing feeding inflation IMO is low unemployment, high wages and lack of enthusiasm.  
Unless we can get more people on the 'program' how the hell can we keep Sydney/Melbourne house prices buoyant?🤪








						Australia’s skilled migration program needs overhaul to boost economy, report says
					

Grattan Institute says government should target permanent skilled visas at younger, higher-skilled migrants




					www.theguardian.com
				



From the article:
A better skilled migration program could be the solution to Australia’s major economic challenges, a new report says.

A lack of productivity growth, growing debt in the federal budget and the economy’s transition to net-zero could be assisted by key reforms, the submission by the public policy thinktank, the Grattan Institute, to the federal government’s migration review has said.


*In the past decade, only a quarter of permanent visas were issued to migrants based on their skills with the rest granted through family and humanitarian streams.*

The submission said while this reflected the diverse objectives of Australia’s migration program, the government should target permanent skilled visas at younger, higher-skilled migrants.

This would allow them to stay in Australia for longer and contribute to the economy.

A second recommendation was to change policy to ensure permanent employer sponsorship was available for workers earning more than $85,000 a year in any industry.
The institute said this would better target migrants with valuable skills, simplify the sponsorship process, offer clearer pathways to permanent residency and boost Australian government budgets.


----------



## over9k (17 December 2022)

Markets getting very worried about things now, not from a recession point of view but because the labour market is so hot that the fed can keep pumping rates without nosediving the country into mass unemployment, i.e there might be a huge dump in asset values and a "recession" from an investment perspective but not from an on-the-ground employment perspective. This is the "technical" recession they talk about - GDP dropping but employment still remaining strong.

In other words, we're going to see a significant wealth/balance shift from capital into labour and so growth plays are essentially done.


----------



## over9k (17 December 2022)

You invest in short duration and what's driving the rate increases, duh.


----------



## over9k (18 December 2022)

Well worth a listen, especially from 20 mins on.


----------



## over9k (19 December 2022)

waterbottle said:


> Guidance is hawkish.
> 
> Fed now expecting a terminal rate of 5.1% with a GDP of 0.5%.
> 
> ...






Seems... optimistic. 

I also can't see markets doing much positioning for this 12-24 months out either. A lot can happen in the meantime.


----------



## waterbottle (19 December 2022)

over9k said:


> View attachment 150629
> 
> 
> Seems... optimistic.
> ...



Well if the Fed was acting on shoddy on employment data that was overestimating jobs created by ~1 million in June 2022 (and who know's what thereafter), then they've been hiking into a rising unemployment rate that they never knew about (or did they?....). I think there's some credence to what the market is predicting, holing rates steady for a year might be too far.


----------



## over9k (19 December 2022)

waterbottle said:


> Well if the Fed was acting on shoddy on employment data that was overestimating jobs created by ~1 million in June 2022 (and who know's what thereafter), then they've been hiking into a rising unemployment rate that they never knew about (or did they?....). I think there's some credence to what the market is predicting, holing rates steady for a year might be too far.



I was speaking from a "there's still plenty more oil supply problems to come" perspective


----------



## wayneL (19 December 2022)

over9k said:


> Well worth a listen, especially from 20 mins on.




Another, not dissimilar, view.


----------



## InsvestoBoy (19 December 2022)

wayneL said:


> Another, not dissimilar, view.





For some reason, I still listen to Kyle Bass when he talks, anyone else who does so should handicap everything that comes out of his mouth with his incessantly wrong views on Japan and then China and Hong Kong that demonstrate he has no understanding of how their financial systems works and the absurd amount of money he has lost clients betting on his misunderstanding.









						Kyle Bass's Most Famous Trade Is A Disaster, And It Is Never Going To Work Out
					






					www.businessinsider.com
				





 (unfortunately the original thread linked by Mr Mojo Risin is blocked now so you can't see it but it was a masterpiece of debunking...the FT screenshot for John Greenwood is still in there)

He's one of many financial commentators who would have been laughed out of the room if it wasn't for their political views overlapping with those who will boost anyone espousing those views.


----------



## InsvestoBoy (19 December 2022)

Anyone else remember that time in 2011 when Kyle Bass bought 20 million US nickels for their metal value because he was convinced hyperinflation was coming


----------



## wayneL (19 December 2022)

InsvestoBoy said:


> For some reason, I still listen to Kyle Bass when he talks, anyone else who does so should handicap everything that comes out of his mouth with his incessantly wrong views on Japan and then China and Hong Kong that demonstrate he has no understanding of how their financial systems works and the absurd amount of money he has lost clients betting on his misunderstanding.
> 
> 
> 
> ...




That's how it rolls in the macro world, big wins, big losses. Almost every macro commentator out there has been spectacularly wrong in some way or another.

Caveat Emptor.


----------



## InsvestoBoy (19 December 2022)

wayneL said:


> That's how it rolls in the macro world, big wins, big losses. Almost every macro commentator out there has been spectacularly wrong in some way or another.
> 
> Caveat Emptor.




There's "I was wrong because of some unforseen externality" and then there's "I was wrong because I think I'm an expert at something that I demonstrably know nothing about but I'll keep starting funds anyway".

Bass is definitely the latter.


----------



## divs4ever (19 December 2022)

well i probably shouldn't mock anyone else i am still waiting for the crash i predicted for mid 2013  ( lucky for me some of those 'safe-haven ' plays  i made paid off anyway )


----------



## wayneL (19 December 2022)

InsvestoBoy said:


> There's "I was wrong because of some unforseen externality" and then there's "I was wrong because I think I'm an expert at something that I demonstrably know nothing about but I'll keep starting funds anyway".
> 
> Bass is definitely the latter.



To be honest, I wouldn't give either of you my money.

I will fark up my own finances thanks very bloody much.


----------



## divs4ever (19 December 2022)

wayneL said:


> To be honest, I wouldn't give either of you my money.
> 
> I will fark up my own finances thanks very bloody much.



that is mostly my plan , although  i do park SOME cash with ETFs , LICs and REITs  ( because i can't manage  to get those results  by myself )


----------



## over9k (19 December 2022)

wayneL said:


> I will fark up my own finances thanks very bloody much



But then how will sapphire pay her rent this week?


----------



## wayneL (19 December 2022)

over9k said:


> But then how will sapphire pay her rent this week?



There are always contra deals


----------



## divs4ever (19 December 2022)

Aussies are skipping meals to get by​








						Aussies are skipping meals to get by
					

#recession #firstworldproblems #heisesays Aussies are skipping meals to get by. Are times really getting that tough, or are these just "First World Problems"?  Twitch https://www.twitch.tv/heisesays ...




					odysee.com
				




 got used to skipping meals  because the workload blew out ( and the retail outlets  were closed )

 now i get to fast   specifically for my blood tests  ( all that practice worked out , who knew ?? )


----------



## wayneL (19 December 2022)

.... And, I keep getting ads on my timeline about intermittent fasting. Not sure what that says about my internet surfing habits, but my Mormonesque emergency food supply ensures that probably will never happen.


----------



## divs4ever (19 December 2022)

wayneL said:


> .... And, I keep getting ads on my timeline about intermittent fasting. Not sure what that says about my internet surfing habits, but my Mormonesque emergency food supply ensures that probably will never happen.



depending on what you have stashed  , that can be awesome emergency currency  ( wink )


----------



## wayneL (19 December 2022)

divs4ever said:


> depending on what you have stashed  , that can be awesome emergency currency  ( wink )



I should probably be more secretive about it, methinks. 

They'll never find my PMs, but my year's supply of anchovies and white truffles might be a bit easier to find


----------



## divs4ever (19 December 2022)

anchovies for my rice or pasta   , maybe we can trade  ( damn shame the local Post Office ran out of jerky )

 PS think long term this mess could go on for several years 

 cheers


----------



## wayneL (19 December 2022)

divs4ever said:


> anchovies for my rice or pasta   , maybe we can trade  ( damn shame the local Post Office ran out of jerky )
> 
> PS think long term this mess could go on for several years
> 
> cheers




Since I had my jaw dislocated earlier this year, jerky is off the table unfortunately. Will have to be something pretty spectacular to trade my anchovies for... A year's supply of blue bone groper and I'm in


----------



## divs4ever (19 December 2022)

sorry didn't stock-pile fish   , however the rural property  has a dam  and possibly some silver perch survived and bred , i hoarded some hooks and fishing line instead  ( i bet i only catch the eels , not much of a fisherman )

 besides the tins go off after an extended period


----------



## wayneL (19 December 2022)

divs4ever said:


> sorry didn't stock-pile fish   , however the rural property  has a dam  and possibly some silver perch survived and bred , i hoarded some hooks and fishing line instead  ( i bet i only catch the eels , not much of a fisherman )
> 
> besides the tins go off after an extended period



Yabbies?


----------



## divs4ever (20 December 2022)

wayneL said:


> Yabbies?



maybe , there were shell from dead ones  before the dam was put in about 50 metres away , haven't seen a live one ( there ) but some shells  weren't ancient  , since the eels found a way in maybe there are some yabbies as well  but they are only   small ( the shells )  less than a 20 cent piece across the body )

 two different species of eel though  ( and obviously the transiting turtles )


----------



## over9k (20 December 2022)

https://www.vaneck.com/us/en/investments/agribusiness-etf-moo/
		


Wouldn't be the worst idea in the world.


----------



## waterbottle (20 December 2022)

Vale, the Santa rally
St Jerome said no more pumps
Farewell, dear market


----------



## divs4ever (20 December 2022)

looks like we finally get to see TRUE market sentiment 

 ( this could look scary )


----------



## over9k (20 December 2022)

Yeah it doesn't look like a good end to the year does it? 

Rasputitsa due in ukraine/russia soon too.


----------



## over9k (20 December 2022)

Bank of japan slaughters everything, the euro's put a price cap on russian natural gas in place that essentially guarantees a shortage, good times.


----------



## over9k (21 December 2022)

So now that BOIL's tanked in response to the gas price cap in europe, do I buy some for when the inevitable shortage happens and they have to lift the cap to get what they need? 

Pure degen play but the logic is sound. Hmmmm.


----------



## waterbottle (21 December 2022)

over9k said:


> So now that BOIL's tanked in response to the gas price cap in europe, do I buy some for when the inevitable shortage happens and they have to lift the cap to get what they need?
> 
> Pure degen play but the logic is sound. Hmmmm.



I thought about this too, but too much market interference, no longer being governed by pure supply-demand (was it ever?). 
Also, winter's already started in Europe and they don't seem to be struggling too much...


----------



## over9k (21 December 2022)

waterbottle said:


> I thought about this too, but too much market interference, no longer being governed by pure supply-demand (was it ever?).
> Also, winter's already started in Europe and they don't seem to be struggling too much...



Tanks were brimmed in anticipation though, if they don't last (doubtful they will) then it's either up the price or rationing time.


----------



## mullokintyre (21 December 2022)

waterbottle said:


> I thought about this too, but too much market interference, no longer being governed by pure supply-demand (was it ever?).
> Also, winter's already started in Europe and they don't seem to be struggling too much...



The Weather Channel has suggested that the Northern Hemisphere, in particular western continental USA,  is about to get a severe cold weather bomb.
As to  whether this weather translates into colder EU weather, and hence greater demand for gas, is a moot point.
Bloombergs  said on November 13 that the EU was likely to get a warmer winter this year.
So far, it would appear that is correct.
Mick


----------



## divs4ever (21 December 2022)

mullokintyre said:


> The Weather Channel has suggested that the Northern Hemisphere, in particular western continental USA,  is about to get a severe cold weather bomb.
> As to  whether this weather translates into colder EU weather, and hence greater demand for gas, is a moot point.
> Bloombergs  said on November 13 that the EU was likely to get a warmer winter this year.
> So far, it would appear that is correct.
> Mick



interesting  ,  a 'cold bomb  ' MIGHT result in heavier snowfall in the mountains  giving California access to more water in the Spring thaw ( and potentially more stable hydro-power  for 2023 )

 but time will tell


----------



## waterbottle (21 December 2022)

I've been keeping an eye on inflation numbers given the recent downward revision to jobs numbers in the US. Looks the Fed is fast approaching their 2% target, current headline CPI projections by the Cleveland Fed (who've been quite accurate compared to official figures) is at 3.47% annualised, compared to ~7% in July 2022!   
Core CPI also trending down with a substantial reduction. 





How much further will the Fed go? 
According to historical data, market tends to bottom once the Fed is done cutting. So what does the Fed do once the CPI bottoms?


----------



## waterbottle (21 December 2022)

Correction for previous post, CPI was 7% in *October, *estimated CPI in *December* is 3.47% so far.

What does the Fed tend to do when CPI starts to fall? Fed funds rate follows the CPI... Question now is will they plateau? Do they need to plateau given they've been hiking into a falling CPI?


----------



## divs4ever (21 December 2022)

waterbottle said:


> Correction for previous post, CPI was 7% in *October, *estimated CPI in *December* is 3.47% so far.
> 
> What does the Fed tend to do when CPI starts to fall? Fed funds rate follows the CPI... Question now is will they plateau? Do they need to plateau given they've been hiking into a falling CPI?
> View attachment 150737



the depends on how much extra 'adjusting of the data  ' they are doing to the CPI


----------



## over9k (21 December 2022)

waterbottle said:


> Correction for previous post, CPI was 7% in *October, *estimated CPI in *December* is 3.47% so far.
> 
> What does the Fed tend to do when CPI starts to fall? Fed funds rate follows the CPI... Question now is will they plateau? Do they need to plateau given they've been hiking into a falling CPI?
> View attachment 150737



Also the question of whether they're going to stick with the year-on-year numbers or be all "well we had 8% one year and 3% the next so that's kind of 5.5% over the two years so we've gotta get down to 0% for a year or two to get back on the long term trend". 

I can't think of how many times I've heard a phrase something like "PRICES are still far too high" rather than "Inflation is still far too high" in response to things like expectations of hitting a "high plateau" or words to that effect. I.e prices skyrocket and then hit a ceiling and just stay there so year-on-year might look like 0% but two year comparisons look like 10%+.

Referring to prices rather than inflation seems like a subtle distinction, but it isn't.


----------



## over9k (21 December 2022)

Another thing: 

Last CPI numbers were great. Markets skyrocketed in response. FOR A DAY. 

The same thing happened a couple months back or whenever it was we had a random decent data batch when we saw something like +4% for the nasdaq on the day and then a plummet for weeks right after. 

And, well, take a look at markets since:




Despite the mooning ON THE DAY in response to any decent data drops we've had, there's been no actual _trend _break at all. 

Bull markets climb a wall of worry and there's an awful lot of worry at the moment.


----------



## over9k (21 December 2022)

Point is, I'm wondering if the fed is thinking about overshooting 2% down to 1% or 0% or whatever not actually being a bad thing on account of the fact that the aforementioned "prices" are too high rather than "inflation" is too high. 

As I pointed out, even a 0% inflation year-on-year might still look like a nightmare over a 2 year period if we had huge numbers the year prior. Under that context, it seems difficult to see the fed worrying about "overshooting" its tightening or what have you, especially with the labour market being so tight.


----------



## mullokintyre (21 December 2022)

over9k said:


> Point is, I'm wondering if the fed is thinking about overshooting 2% down to 1% or 0% or whatever not actually being a bad thing on account of the fact that the aforementioned "prices" are too high rather than "inflation" is too high.
> 
> As I pointed out, even a 0% inflation year-on-year might still look like a nightmare over a 2 year period if we had huge numbers the year prior. Under that context, it seems difficult to see the fed worrying about "overshooting" its tightening or what have you, especially with the labour market being so tight.



I would disagree with that assessment. 
Governments love inflation, paying back the  mountain of loans they have with money that is worth less due to inflation has always been a desirable strategy. If they can keep inflation going at a little over 3% it makes nominal GDP look bigger,  and lowers the real cost of repayments.
Mick


----------



## InsvestoBoy (21 December 2022)

waterbottle said:


> I've been keeping an eye on inflation numbers given the recent downward revision to jobs numbers in the US. Looks the Fed is fast approaching their 2% target, current headline CPI projections by the Cleveland Fed (who've been quite accurate compared to official figures) is at 3.47% annualised, compared to ~7% in July 2022!
> Core CPI also trending down with a substantial reduction.
> View attachment 150732
> 
> ...




I really like the Cleveland Fed CPI nowcast model, because at least it's a model! Most people, especially on this forum, have opinions about inflation but base it on some crap they heard on YouTube or whatever. 

I have never seen a single person who criticises CPI actually put forth a competing model, any assumptions or working evidence aside from dumb charts of the Feds balance sheet, useless M2 or garbage screenshots from ShadowStats.


----------



## over9k (21 December 2022)

mullokintyre said:


> I would disagree with that assessment.
> Governments love inflation, paying back the  mountain of loans they have with money that is worth less due to inflation has always been a desirable strategy. If they can keep inflation going at a little over 3% it makes nominal GDP look bigger,  and lowers the real cost of repayments.
> Mick



Accurate, normally I'd be 100% with you, but most of the normal rules have been thrown out the window of late.

The republicans have made a lot (like a LOT) of political hay out of the democrats not being able to control inflation, poor economic management etc etc of late for example. Even "only" 3% inflation still enables enough political soundbites to cook them because joe public's sitting there going "well yeah, prices haven't risen much THIS YEAR, but they're still way too high/just as high as they were last year". 

It's all a game.


----------



## mullokintyre (21 December 2022)

InsvestoBoy said:


> I really like the Cleveland Fed CPI nowcast model, because at least it's a model! Most people, especially on this forum, have opinions about inflation but base it on some crap they heard on YouTube or whatever.
> 
> I have never seen a single person who criticises CPI actually put forth a competing model, any assumptions or working evidence aside from dumb charts of the Feds balance sheet, useless M2 or garbage screenshots from ShadowStats.



Hmm. When I was a little tacker, models were toys. 
As I got older, models were hot looking sheilas who ponced up and down a catwalk  showing ridiculously overpriced clothes.
Neither of them were much good for forecasting anything except costing you a lot of money.
Mick


----------



## InsvestoBoy (21 December 2022)

mullokintyre said:


> Hmm. When I was a little tacker, models were toys.
> As I got older, models were hot looking sheilas who ponced up and down a catwalk  showing ridiculously overpriced clothes.
> Neither of them were much good for forecasting anything except costing you a lot of money.
> Mick




It's a shame that during the course of your entire life you never encountered any other usage of the word 'model', but as you surely learned graduating from toys to "sheilas", a word can have more than one meaning.


----------



## waterbottle (21 December 2022)

over9k said:


> Point is, I'm wondering if the fed is thinking about overshooting 2% down to 1% or 0% or whatever not actually being a bad thing on account of the fact that the aforementioned "prices" are too high rather than "inflation" is too high.
> 
> As I pointed out, even a 0% inflation year-on-year might still look like a nightmare over a 2 year period if we had huge numbers the year prior. Under that context, it seems difficult to see the fed worrying about "overshooting" its tightening or what have you, especially with the labour market being so tight.




A valid point given inflation targeting is so arbitrary. 
Given the recent trends, the difference in time between a CPI of 3.5% (I. E. Current projected CPI for December)  and 0% seems like a few months. Remains to be seen what metric they will use but then again this isn't a science


----------



## InsvestoBoy (21 December 2022)

waterbottle said:


> A valid point given inflation targeting is so arbitrary.
> Given the recent trends, the difference in time between a CPI of 3.5% (I. E. Current projected CPI for December)  and 0% seems like a few months. Remains to be seen what metric they will use but then again this isn't a science




The history of the 2% inflation target is even more absurdly arbitrary than you might know.

Worth a read https://www.nytimes.com/2014/12/21/...ion-target-became-global-economic-gospel.html

but I will quote the pertinent



> Once the law was enacted, though, there was the difficult question of what the inflation target should be. Zero percent? Two percent? Five percent?
> 
> Mr. Brash and Mr. Caygill got a head start on an answer from an offhand comment made during a television interview in 1988. Roger Douglas, Mr. Caygill’s predecessor as finance minister, had been seeking to dissuade New Zealanders from thinking that the central bank would be content with high inflation, and so he said in an interview that he was aiming for inflation of around zero to 1 percent.
> “It was almost a chance remark,” Mr. Brash said in a recent interview. “The figure was plucked out of the air to influence the public’s expectations.”


----------



## mullokintyre (21 December 2022)

yeah, well I guess seeing as you are only an investor boy as distinct from an investor man,  the subtleties of the English language and its usage sometimes escapes you. 
Mick


----------



## over9k (21 December 2022)

Is that nutjob still going on? 

Just block him, I have.


----------



## wayneL (21 December 2022)

InsvestoBoy said:


> It's a shame that during the course of your entire life you never encountered any other usage of the word 'model', but as you surely learned graduating from toys to "sheilas", a word can have more than one meaning.



Dude, did you study chaos theory in that pissant useless University you attended?

Models are only as good as the stupid inputs, which are usually stupid, judging by the usual results


----------



## InsvestoBoy (21 December 2022)

wayneL said:


> Dude, did you study chaos theory in that pissant useless University you attended?
> 
> Models are only as good as the stupid inputs, which are usually stupid, judging by the usual results




Another flub who has nothing but criticism? If you think it's dumb, show something better that can be critiqued... preferably something that isn't a Wall Street Silver screenshot.

Imagine making a nowcasting model *this good* and people say the stupid things they are saying in this thread (h/t @fernavid on Twitter)




It's not hard to google your way to the inputs of the model, they're not secret.


----------



## divs4ever (21 December 2022)

InsvestoBoy said:


> Another flub who has nothing but criticism? If you think it's dumb, show something better that can be critiqued... preferably something that isn't a Wall Street Silver screenshot.
> 
> Imagine making a nowcasting model *this good* and people say the stupid things they are saying in this thread (h/t @fernavid on Twitter)
> 
> ...



looks like the Cleveland Fed needs a new forecaster since the start of 2021 , however it is more likely the input data has been corrupted ( or the modeler )


----------



## wayneL (21 December 2022)

Did you forget the lessons of chaos?







InsvestoBoy said:


> Another flub who has nothing but criticism? If you think it's dumb, show something better that can be critiqued... preferably something that isn't a Wall Street Silver screenshot.
> 
> Imagine making a nowcasting model *this good* and people say the stupid things they are saying in this thread (h/t @fernavid on Twitter)
> 
> ...



You have forgotten how chaos works... And confirmation bias is perhaps the most stupid of the cognitive biases.

Back to school, bruh.


----------



## Value Collector (21 December 2022)

mullokintyre said:


> I would disagree with that assessment.
> Governments love inflation, paying back the  mountain of loans they have with money that is worth less due to inflation has always been a desirable strategy. If they can keep inflation going at a little over 3% it makes nominal GDP look bigger,  and lowers the real cost of repayments.
> Mick



Not to mention tax bracket creep pushes more people into the higher tax brackets and the inflated asset prices causes more capital gains tax.


----------



## Value Collector (21 December 2022)

mullokintyre said:


> Hmm. When I was a little tacker, models were toys.
> As I got older, models were hot looking sheilas who ponced up and down a catwalk  showing ridiculously overpriced clothes.
> Neither of them were much good for forecasting anything except costing you a lot of money.
> Mick



I thought you had some sort of engineering background? I am pretty sure both practical and digital models are used to forecasting performance of structures etc.


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## frugal.rock (21 December 2022)

When I went to "school", the data source information and inputs were a required label for the graphic output, without which, we were taught to question the integrity of the data presented.
Just saying.


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## InsvestoBoy (21 December 2022)

frugal.rock said:


> When I went to "school", the data source information and inputs were a required label for the graphic output, without which, we were taught to question the integrity of the data presented.
> Just saying.


----------



## mullokintyre (21 December 2022)

Value Collector said:


> I thought you had some sort of engineering background? I am pretty sure both practical and digital models are used to forecasting performance of structures etc.



Quite true,  but in engineering the veracity of the model, the number of variables and their value constraints are generally well known.
And they hind cast well, are repeatable, and you will struggle find anyone who is skeptical about their modelling output.
Mick


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## wayneL (21 December 2022)

InsvestoBoy said:


> View attachment 150768



A lesson in chaos...

Donald Rumsfeld encapsulated it quite succinctly (paraphrasing because I can't be bothered to look up the exact quote)

There are known knowns, that is to say there are things that we know that we know.

They are known unknowns, that is to say there are things we know that we do not know.

But then there unknown unknowns, that is to say that there are things that we don't know that we don't know.

Butterfly wings in San Francisco and tempests in Tokyo and all that shxt.

Models are dependant on the inputs, i.e. known knowns. They take no account of known unknowns or unknown unknowns.

There's nothing wrong with models, but we must acknowledge that models are... models.

Models may not reflect what happens in reality, precisely because of the nature of the systems that we are operating in, known unknowns and unknown unknowns.

No way is there a better illustration of this than weather forecasting.

Modelling  gets it right a lot of the time. Sometimes a little bit wrong, other times spectacularly wrong.

Unknown unknowns etc.

Can we imagine a system so similar to weather as economics, such as it is. 

For sure and certain we can pluck a forecast straight out of our @ss (your @ss, actually) and be right some the time, perhaps even a lot of the time.

Butt somewhere, those butterfly wings are flapping....

....bruh


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## over9k (23 December 2022)

Jobless claims below estimates, GDP price index above estimates, so still more room to keep pumping rates from both angles, futures thus tank, growth plays thus tank the most, energy the best of all options, groundhog day.


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## waterbottle (23 December 2022)

Everything bleeding


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## wayneL (23 December 2022)

Head.
Nail.
Hit.


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## frugal.rock (23 December 2022)

Inflation lanche?


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## divs4ever (23 December 2022)

waterbottle said:


> Everything bleeding



including my left hand  ( but not much ) , it could be worse  ( or better if you have spare cash )


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## waterbottle (23 December 2022)

wayneL said:


> Head.
> Nail.
> Hit.





So what's the alternative?
Stagflation?
Hyperinflation?
Depression?

Debt is the foundation of western of economies. No debt, no productivity, no goods, no services. Unless they're planning to roll out a new world order where buttcoin can be used to pay for my lapdances, we're going to keep riding this damn rollercoaster and that means the Fed will have to pivot at some point to make debt accessible.


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## wayneL (23 December 2022)

waterbottle said:


> So what's the alternative?
> Stagflation?
> Hyperinflation?
> Depression?
> ...



Well that's a complex question and probably one I am not qualified to answer... Actually, definitely not qualified to answer.

It does raise more questions for me however, like who is the current system designed to serve?

Us?

Or them?

The pseudo Keynesians and ad hoc frankinomics has led us to this point. Although I think more short-term pain would be involved, the Austrians jave probably been right all along.


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## waterbottle (23 December 2022)

wayneL said:


> Well that's a complex question and probably one I am not qualified to answer... Actually, definitely not qualified to answer.
> 
> It does raise more questions for me however, like who is the current system designed to serve?
> 
> ...




Who knows, I don't have an answer either, we're probably not going to get one on an internet forum. 
The system that has been in place has meant that world has been relatively peaceful and we've had massive technological advance - that's got to count for something and it's an argument to continue with it.


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## wayneL (23 December 2022)

waterbottle said:


> Who knows, I don't have an answer either, we're probably not going to get one on an internet forum.
> The system that has been in place has meant that world has been relatively peaceful and we've had massive technological advance - that's got to count for something and it's an argument to continue with it.



For now, I'm pretty happy on Friday afternoon having a few beers and hanging out with the puppy, lots of provisions in the store room, and backup power supplies etc.

l will deal with the sh$t as it hits the fan as it hits it


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## over9k (23 December 2022)

Fed targets inflation, not debt.


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## divs4ever (23 December 2022)

waterbottle said:


> So what's the alternative?
> Stagflation?
> Hyperinflation?
> Depression?
> ...



something NASTY this way comes , they will create a definition  when they can no longer deny there is a problem 

 i am  taking a hedge  by setting up goods for possible barter ( later )


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## mullokintyre (24 December 2022)

Inflation  is one of those macro terms that just sometimes needs to be broken down.
From this quick graph of some of the groups that make up inflation , one might be able to draw some interesting observations.



1. For the last few moths, the cost of goods, both durable and non durable has fallen, thus bringing down one aspect of inflation.
However, the services component has been pretty consistent through  this time, and seeing as the US GDP is highly service oriented,  it may not fall as much as people expect.
2.Since 2018, the services component has been consistently positive, except for the covid blip in march 2020.
Durable goods were pretty much neutral from jan 2018 thru to march 2021 when they really took off.

Food for thought.

Mick


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## divs4ever (24 December 2022)

mullokintyre said:


> Inflation  is one of those macro terms that just sometimes needs to be broken down.
> From this quick graph of some of the groups that make up inflation , one might be able to draw some interesting observations.
> View attachment 150893
> 
> ...



services ( costs ) will tend to remain high ( or go higher ) because  wage rises ( labour costs ) trail CPI rises , so you traditionally end up with two issues a skilled worker shortage and demand for higher wages ( these are NOT precisely the same thing )

 there is sometimes a trend for the most skilled workers to strike out on their own  ( sometimes poaching assistant level staff )


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## over9k (27 December 2022)

China lifts the last of its curbs, oil runs more, exactly as expected.


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## divs4ever (27 December 2022)

over9k said:


> China lifts the last of its curbs, oil runs more, exactly as expected.



until the next excuse occurs  , the US are addicted to sanctions and China will respond in it's own way  ( it has half of Asia to develop as trading partners  , now  including Afghanistan )


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## over9k (28 December 2022)

>china reopens 
>oil runs 
>markets realise this is going to pump inflation further 
>markets thus go red
>growth plays go deep into the red
>energy only green sector on the day 

I am shocked I tell you, truly shocked.


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## divs4ever (28 December 2022)

over9k said:


> >china reopens
> >oil runs
> >markets realise this is going to pump inflation further
> >markets thus go red
> ...



did you miss a ( WINK) at the end , perhaps ??

 slightly bemused here , but had a plan for either trend ( just in case some puppeteers still work during the Festive Season )


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## waterbottle (28 December 2022)

Russia bans oil sales to nations imposing a price cap...


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## divs4ever (28 December 2022)

waterbottle said:


> Russia bans oil sales to nations imposing a price cap...



 WHOOPS !

 who knew  ( WINK )


----------



## mullokintyre (28 December 2022)

waterbottle said:


> Russia bans oil sales to nations imposing a price cap...



Of course, that does not prohibit countries who did not put ona price cap from buying oil from Russia (at whatever price and currency the two parties choose), and then on selling the oil to those price capping nations (at whatever price and in what currency both parties choose).
That way, no one loses face, the end parties get their oil, the Russians get their  money (or gold, or Bitcoin, or trump NFT's).
Everyones a winner!
Mick


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## Dona Ferentes (28 December 2022)

Oil is back around $80, so the *inflation* angle is diminished. 

Since Feb, Chinese imports haven't  risen that much. It is India doing the importing. 



The cap was only ever to be an inconvenience,  and deliver less into Uncle Vlad's coffers / pockets. By way of increased insurance . The Greek shippers will continue to be involved,


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## mullokintyre (28 December 2022)

Doug Caseys daily newsletter always gives interesting takes on events.
Hers one I found more interesting than usual.


> In the early ‘90s, legendary investigative journalist Seymour Hersh revealed the "Samson Option," a secret Israeli nuclear deterrence strategy.
> 
> It states that in a scenario where its enemies were about to overrun the country, Israel would respond with massive use of nuclear weapons as a last resort.
> 
> ...



Mick


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## divs4ever (28 December 2022)

mullokintyre said:


> Doug Caseys daily newsletter always gives interesting takes on events.
> Hers one I found more interesting than usual.
> 
> Mick



i dispute  the claim  that inflation is ' out of control '  but the solutions  are politically unacceptable ( suicidal to the ruling party and possibly  to the opposition as well )

one could always start by cutting  government expenditure and waste , streamlining regulation .

 to paraphrase an old quote  ' when one is in a deep hole , the first thing you should do is stop DIGGING '

 however  , i suspect  inflation will remain difficult as few governments are  prepared to be fiscally responsible


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## mullokintyre (28 December 2022)

divs4ever said:


> i dispute  the claim  that inflation is ' out of control '  but the solutions  are politically unacceptable ( suicidal to the ruling party and possibly  to the opposition as well )
> 
> one could always start by cutting  government expenditure and waste , streamlining regulation .



Well, what is the latest news out of the USA?
The 1.7 trillion Omnibus bill that has just passed congress   will just increase or at best  keep the velocity of money where it is.
One of the parts of the 4,000 page bill allows savers to remove their $01(K) retirement savings, and given the pressure most Americans are under, who thinks there will not be a large drain on 401(K) accounts?
Increases in funding for those who have their food stamps stolen by criminals.
Both of these will put inflationary pressure on the US economy.
Mick


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## divs4ever (28 December 2022)

mullokintyre said:


> Well, what is the latest news out of the USA?
> The 1.7 trillion Omnibus bill that has just passed congress   will just increase or at best  keep the velocity of money where it is.
> One of the parts of the 4,000 page bill allows savers to remove their $01(K) retirement savings, and given the pressure most Americans are under, who thinks there will not be a large drain on 401(K) accounts?
> Increases in funding for those who have their food stamps stolen by criminals.
> ...



well apart from unfairly singling out the US  with the policy of printing currency without a parallel  increase in  ( actual ) productivity 

 the usual trend is for government to save ( and enrich ) itself  and to increase in an effort to shield itself from unrest ( make itself appear too important to be let fail )

yes the US ( imo ) has chosen the wrong path , but the US also needs to diminish it's own existing debt and that is normally done with the assistance of the tax-payer 

 i also doubt the US is unique in allowing folks to dip deeply into retirement savings , the more interesting question is where will the retirement depletion trend affect the economy , will they sell property assets , maybe US debt assets ( bonds and bills ) , what about stocks and managed funds , or something else .

 remember inflation is a FRIEND to a heavily indebted government , it is the average citizen that is hurt ( especially the savers )


----------



## waterbottle (28 December 2022)

Dona Ferentes said:


> Oil is back around $80, so the *inflation* angle is diminished.
> 
> Since Feb, Chinese imports haven't  risen that much. It is India doing the importing.
> View attachment 150973
> ...



How significant is that though? Are there any graphs showing historical imports (pre-Ukraine war). 
China and India would definitely be taking advantage of the low prices, but that only looks like an additional 1.5m barrels/d. Surely that'd be offset by import reductions in other countries?


----------



## divs4ever (28 December 2022)

waterbottle said:


> How significant is that though? Are there any graphs showing historical imports (pre-Ukraine war).
> China and India would definitely be taking advantage of the low prices, but that only looks like an additional 1.5m barrels/d. Surely that'd be offset by import reductions in other countries?



 i would guess ( most ) Chinese customers  would lock in long term agreements/contracts  ( which Russia would prefer  and win in the long term ) India seems to be a big winner here  maybe some others as well  i never see a lot on Mongolia  , which should become a rapidly developing nation  .

 and  if the international pressure on Russia increases  , i can see Russia ignoring sanctions on Iran , North  Korea and others .


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## wayneL (28 December 2022)

From the year the L family arrived in Oz:

The old man bought a new ute for $1700 and a pile of bricks 8km from Perth city centre for $19,500. As far as I remember average wages were about $70 pw.


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## againsthegrain (28 December 2022)

wayneL said:


> From the year the L family arrived in Oz:
> 
> The old man bought a new ute for $1700 and a pile of bricks 8km from Perth city centre for $19,500. As far as I remember average wages were about $70 pw.
> 
> View attachment 150986



The bbq chicken is so much more then everything else, or is that bbq chicken part of the fish and chips to take away? 

Anyway the porterhouse seems like a bargain


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## wayneL (28 December 2022)

againsthegrain said:


> The bbq chicken is so much more then everything else, or is that bbq chicken part of the fish and chips to take away?
> 
> Anyway the porterhouse seems like a bargain



I think that's for a whole chook.


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## divs4ever (29 December 2022)

wayneL said:


> I think that's for a whole chook.



you are probably right ( the whole bird  not one quarter of the over-fed pigeons  you get today )


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## over9k (29 December 2022)

You think?


----------



## divs4ever (29 December 2022)

over9k said:


> View attachment 150999
> 
> 
> You think?



oh i see LOTS of promising , maybe not so much  delivering ( but plenty of excuses )

i am thinking another K-shaped recovery  later in 2023  as a Presidential election approaches ( late 2024 )


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## waterbottle (29 December 2022)

Is there blood in the streets yet?


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## mullokintyre (29 December 2022)

waterbottle said:


> Is there blood in the streets yet?



Nah, merely spilt a little plasma from a quick transfusion.
Mick


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## frugal.rock (29 December 2022)

@wayneL 
You've gone virile...😱



			https://www.news.com.au/travel/travel-ideas/food-drink/pub-lunch-menu-item-from-1972-leaves-aussies-baffled/news-story/7e8dde0039518b61e889d3f1e57f4242
		




wayneL said:


> From the year the L family arrived in Oz:
> 
> The old man bought a new ute for $1700 and a pile of bricks 8km from Perth city centre for $19,500. As far as I remember average wages were about $70 pw.
> 
> View attachment 150986


----------



## over9k (30 December 2022)

Jobs data good, allowed markets to pump a bit.


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## divs4ever (30 December 2022)

over9k said:


> Jobs data good, allowed markets to pump a bit.



good ??

 or is bad news still GOOD news  ( slow or stop rate hikes )

 am still looking for analysts opinions


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## over9k (30 December 2022)

Haven't been tipped into recession yet, job openings were in line with estimates.


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## divs4ever (30 December 2022)

they will never be in recession ( unless Trump wins again )

 they will simply refine definitions ( like mostly peacefully but fiery protests , etc etc etc )


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## waterbottle (30 December 2022)

We had the same bump in mid December only for it to continue falling....


----------



## wayneL (30 December 2022)

Smart money v dumb money? Algorithms?


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## waterbottle (30 December 2022)

Who knows. Place your bets and hold on for the ride. 
Market has shat itself quite a bit this year. Tends to hit bottom once fed starts cutting/recession already declared. Job losses only just starting too, although market tends to react positively when companies cut jobs to buoy the balance sheet.


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## SirRumpole (30 December 2022)

Britain first in, last out of recession ?









						How one English town spelled doom for Britain’s economy in 2023
					

Prices quietly surged in this small town in the United Kingdom. Then it became the epicentre of a cost-of-living crisis.




					www.abc.net.au


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## wayneL (30 December 2022)

Interesting graphic FWIW


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## The Triangle (30 December 2022)

SirRumpole said:


> Britain first in, last out of recession ?
> 
> 
> 
> ...



_"with interest rate rises designed to make people spend less"_

We shouldn't be trying to control inflation by forcing people to spend less we should be controlling inflation by forcing governments to spend less.  My buying a new TV and washing machine this month does not lead to inflation.  My governments endless spending on garbage forcing central banks to print money like there is no tomorrow is what lead to all this inflation.

Inflation isn't going away anytime soon so long as morally corrupt and fiscally incompetent politicians also keep trying to control inflation with increased spending and handouts.


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## waterbottle (30 December 2022)

The Triangle said:


> _"with interest rate rises designed to make people spend less"_
> 
> We shouldn't be trying to control inflation by forcing people to spend less we should be controlling inflation by forcing governments to spend less.  My buying a new TV and washing machine this month does not lead to inflation.  My governments endless spending on garbage forcing central banks to print money like there is no tomorrow is what lead to all this inflation.
> 
> Inflation isn't going away anytime soon so long as morally corrupt and fiscally incompetent politicians also keep trying to control inflation with increased spending and handouts.



Inflation is the carrot on the stick for society. It's a necessary evil if we want productivity.


----------



## divs4ever (30 December 2022)

waterbottle said:


> Inflation is the carrot on the stick for society. It's a necessary evil if we want productivity.



inflation is the back-door exit for over-spending governments 

 less government ( and dependency  on government ) is the best way to increase average production and resist inflation 

 productivity can be more widgets produced OR the same number of widgets produced at a cheaper price ( say trimming power or packaging costs )


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## wayneL (30 December 2022)

over9k said:


> Jobs data good, allowed markets to pump a bit.



Well that fizzled 😲


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## over9k (31 December 2022)

These one day bounces on good data are becoming a bit of a trend hey?


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## mullokintyre (31 December 2022)

over9k said:


> These one day bounces on good data are becoming a bit of a trend hey?



The trend is your friend.
Mick


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## over9k (4 January 2023)

Last year's profits are being taken today (different financial year so different taxes) lads, buy opportunities abound


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## over9k (4 January 2023)

Yeeeep


----------



## divs4ever (4 January 2023)

over9k said:


> View attachment 151197
> 
> 
> Yeeeep



healthcare  maybe , but energy has left the station ( in my opinion )

 if fact i probably erred be not rescuing the investment cash in NHC  in 2022


----------



## divs4ever (4 January 2023)

over9k said:


> Last year's profits are being taken today (different financial year so different taxes) lads, buy opportunities abound



am missing my target prices ( nearly all the time ) since Xmas  , maybe today will be better

( my only buy was a few GNC since Xmas )


----------



## waterbottle (4 January 2023)

Several tech companies now below their June 2022 lows. Some below pre-COVID lows...


----------



## over9k (4 January 2023)

waterbottle said:


> Several tech companies now below their June 2022 lows. Some below pre-COVID lows...



Energy ain't


----------



## waterbottle (4 January 2023)

Keeping track of inflation nowcasting - Cleveland Fed estimated a month - on - month inflation rate of *0.12 (core of 0.48) *in December....


----------



## divs4ever (4 January 2023)

waterbottle said:


> Keeping track of inflation nowcasting - Cleveland Fed estimated a month - on - month inflation rate of *0.12 (core of 0.48) *in December....



that will change ( to fit the narrative ) LOL


----------



## over9k (5 January 2023)

Just bought a new VW tiguan today and have learned that VW (and others) have had such a hard time getting the chips they need that they're actually selling new cars with features missing - in this case, you couldn't get a march/april delivered vehicle with blind spot alert or rear park autobraking (automatically applies the brakes if you're going to reverse into something) and talking to the sales manager VW had a pretty big meeting with all their dealers back in november and still can't even promise all the features will be available on the august/september delivered orders either.

In the meantime, half the new cars out there (not just VW's, all sorts of stuff) are on backorder for months or depending on the model, even years, so it's either pay up or buy something else. 

MY22 models already physically here and in stock (with all the features) are actually selling for more than brand new MY23's.


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## over9k (5 January 2023)

*insert internet meme here*


----------



## waterbottle (5 January 2023)

over9k said:


> View attachment 151236
> View attachment 151237
> 
> 
> *insert internet meme here*



Why you post mirror image sir?


----------



## mullokintyre (5 January 2023)

over9k said:


> Just bought a new VW tiguan today and have learned that VW (and others) have had such a hard time getting the chips they need that they're actually selling new cars with features missing - in this case, you couldn't get a march/april delivered vehicle with blind spot alert or rear park autobraking (automatically applies the brakes if you're going to reverse into something) and talking to the sales manager VW had a pretty big meeting with all their dealers back in november and still can't even promise all the features will be available on the august/september delivered orders either.
> 
> In the meantime, half the new cars out there (not just VW's, all sorts of stuff) are on backorder for months or depending on the model, even years, so it's either pay up or buy something else.
> 
> MY22 models already physically here and in stock (with all the features) are actually selling for more than brand new MY23's.



But but but, you didn't buy an EV?
Mick


----------



## over9k (5 January 2023)

mullokintyre said:


> But but but, you didn't buy an EV?
> Mick



Well I am in fact 9 so I bought the R model.


----------



## over9k (5 January 2023)

And EV's don't go "vroom".


----------



## waterbottle (5 January 2023)

US job openings decreased but still higher than expected.
US Fed staying the course on inflation, kashkari reportedly arguing for 5.4% terminal rate....
Recent market moves smell like a bull trap..


----------



## over9k (5 January 2023)

waterbottle said:


> US job openings decreased but still higher than expected.
> US Fed staying the course on inflation, kashkari reportedly arguing for 5.4% terminal rate....
> Recent market moves smell like a bull trap..



I'm still balls deep in energy


----------



## moXJO (5 January 2023)

over9k said:


> And EV's don't go "vroom".



You should buy a Tesla. Roughly 20000 of them.


----------



## waterbottle (5 January 2023)

over9k said:


> I'm still balls deep in energy



NRGU? Why? If the market is pricing recession then crude is heading lower


----------



## mullokintyre (5 January 2023)

over9k said:


> And EV's don't go "vroom".



And a Tiguan Does?
You need at least 5.7 litres and 8 cylinders to do proper vroom.
Mick


----------



## waterbottle (5 January 2023)

So the St. Louis Fed thinks we're heading to recession huh? (interesting read) 



> In sum, a threshold estimate based on this analysis shows that 26 states need to have negative growth in the SCI to have reasonable confidence that the national economy entered into a recession. Excluding the 2008 outlier raises the threshold to 29 states.
> 
> So, where are we now? In October 2022, 27 states had negative growth in the SCI. That would exceed the six-recession average of 26 states but would fall short of the outlier-adjusted estimate (excluding 2008) of 29. One caveat is worth noting: Populous states like California, Texas and Florida that have disproportionately large economies can sometimes exert a large influence on national economic activity. This analysis does not adjust for this fact.












						Are State Economic Conditions a Harbinger of a National Recession?
					

An analysis of state-level economic growth suggests that a certain number of contracting state economies could signal the start of a national recession.




					www.stlouisfed.org


----------



## over9k (5 January 2023)

moXJO said:


> You should buy a Tesla. Roughly 20000 of them.



The good thing about electric cars is that being electric, their pussy magnet is an electromagnet so you can just turn it off when you get tired of all the supermodels.


----------



## over9k (5 January 2023)

Caaaaaaalled it. 

What's that saying about buying a rumour and selling a news?


----------



## over9k (5 January 2023)

waterbottle said:


> NRGU? Why? If the market is pricing recession then crude is heading lower



China, supply issues, russian war escalating, and seasonality. Kind of keen for a degen play on TNA too.


mullokintyre said:


> And a Tiguan Does?
> You need at least 5.7 litres and 8 cylinders to do proper vroom.
> Mick



Only if you've got a booty call to your cousin's house.


----------



## divs4ever (5 January 2023)

waterbottle said:


> So the St. Louis Fed thinks we're heading to recession huh? (interesting read)



THINKS ??

that doesn't bode well for any genuine recovery ( especially  a recovery engineered by the Fed )


----------



## divs4ever (5 January 2023)

over9k said:


> The good thing about electric cars is that being electric, their pussy magnet is an electromagnet so you can just turn it off when you get tired of all the supermodels.



cars  , super-models ??






						The Flying Lizards - Money • TopPop
					

Watch our great music videos ❯ https://goo.gl/feVLNN More TopPop? Subscribe here ❯ https://goo.gl/X9FOAU More info on Wikipedia ❯ https://en.wikipedia.org/wiki/TopPop  Broadcast date:11/10/1979  This is to let you know that the video recording of the video clip was originally recorded by...




					yewtu.be
				




 (  and commodities for when the currencies fail )


----------



## mullokintyre (5 January 2023)

The Baltic dry index has often been seen as forerunner to lower turnover, lower inflation, and lower employment.
The BDI has been in freefall since it peaked t 5500 back in late September 2021.
Overnight it sank to a low of 1176, with no indication it has bottomed out.
BDI Chart


Mick


----------



## waterbottle (5 January 2023)

ADP jobs numbers out tonight.
Amazon now planning to shed 18000 jobs instead of the 10000 planned in Nov 2022. Some nice data by LayoffsTracker, we've already had 28000 tech lay offs announced and we're only 5 days into Jan 2023...



Meanwhile, 43 000 jobs cut in December according to this group:



Looks like the unemployment curve is going to start rising soon. Timing seems to be right for a Fed pause based on previous history. Looks like it may be the beginning of the end.


----------



## divs4ever (5 January 2023)

looking to test 2020 lows perhaps ?

 we have a Lunar New Year coming   that might be enough ( without any more really crazy stuff )


----------



## divs4ever (5 January 2023)

waterbottle said:


> ADP jobs numbers out tonight.
> Amazon now planning to shed 18000 jobs instead of the 10000 planned in Nov 2022. Some nice data by LayoffsTracker, we've already had 28000 tech lay offs announced and we're only 5 days into Jan 2023...
> View attachment 151286
> 
> ...



 so ... do former employees ( or they will be soon  ) sell off their company stock to give themselves a cash buffer ??

 the Fed is jaw-boning 'no pause ' but have they any credibility left ?

 ( are they only left with cut or raise  ?)


----------



## frugal.rock (Friday at 12:26 AM)

Christmas erroneous temporary employment data?
Groundhog Day


----------



## waterbottle (Friday at 12:37 AM)

divs4ever said:


> so ... do former employees ( or they will be soon  ) sell off their company stock to give themselves a cash buffer ??
> 
> the Fed is jaw-boning 'no pause ' but have they any credibility left ?
> 
> ( are they only left with cut or raise  ?)




I'm going to do something wild and say that the Fed does actually have credibility. They had no choice TBH. If you look back at the coverage in late 2021 - early 2022, discussions regarding the Fed revolved around credibility and lack-of-confidence as they stuck to their guns RE: transitory inflation.
IMO, it was a do-or-die moment for the Fed. They had to outline a plan and stick to it, which to their credit they have. Every conference I've seen JPowell speak at has had the same consistent message - they aren't going to stop raising rates until "the job is done". Keep in mind, that's despite the gyrations and bear market rallies that we've had throughout 2022.
So, in my view, the question isn't what the Fed is going to do, it's when are they going to stop what they're doing. Employment and services are the last few factors affecting inflation. If they're committed to their goal (as they've demonstrated throughout 2022), then they'll keep going until unemployment increases and services inflation is suffocated.

ADP employment numbers just released, pointing to a jobs market that is still relatively strong. 213 000 jobs were added by services industries, 123 000 by leisure and hopsitality. I suspect the latter is a combination of A) holiday travel B) cheap oil C) COVID relief.



The treatment? I think they'll keep raising rates and make it unaffordable. Why? Because nobody knows WTF is going on. A recent essay by the Minneapolis Fed's president Neel Kashkari pretty much confirms this. The analogy he uses essentially boils down to "higher prices via higher interest rates prevents higher inflation". More importantly, his thought process (likely shared by his counterparts) is to err on higher rates to avoid runaway inflation. IIRC, the terminal rate seems to have been revised upwards every quarter. 

So we're now at a junction where goods & energy inflation is down, but services are sticky. We have early reports of lay-offs that haven't shown up in official data yet (see above), although if you like to dabble in conspiracy there was a major BLS jobs data revision so job losses may have occurred but are just hidden. Regardless, the Fed's inputs are high inflation, resilient job market. The output is, predictably, going to be higher rates.


----------



## waterbottle (Friday at 12:38 AM)

frugal.rock said:


> Christmas erroneous temporary employment data?
> Groundhog Day
> 
> View attachment 151290




And futures have dumped. This is only going to firm the Fed's resolve to continue hiking rates.

EDIT: Jobless claims also down! This labour market is refusing to lie down.


----------



## divs4ever (Friday at 1:00 AM)

waterbottle said:


> I'm going to do something wild and say that the Fed does actually have credibility.



well , let's try and test  that opinion 

 we know some folks  ( including some smaller traders ) have automated trading systems  that scan news feeds  for key words  and sense those key-words to generate trading orders  to get an early start at the trend ( from the important news )

 so the very early market reaction ( after the announcement ) should be computer-generated trades , followed shortly after by the skilled traders  who know what the consensus opinions are  and  what to do , if a beat , a hit or a miss , ( stuff the context they want to be near the front of the trend so they have plenty of time to exit )  followed by the more careful traders  who are after a long ride ( for a trader ) if the trend looks solid , followed by the rest of the market that follow the trend IF they believe the narrative ( or data )

 and let's watch the various FOMC  announcements  watching for the length and strength  of the trend  ( a short move before the reversal  hints strongly  that the sheeple didn't drink the kool-ade  , whereas a long/strong move hints nearly everyone  had a cup ( of kool-ade )

 cheers


----------



## divs4ever (Friday at 1:11 AM)

waterbottle said:


> EDIT: Jobless claims also down! This labour market is refusing to lie down.




CAREFUL !  that also MIGHT mean  more and more people are giving up looking for work ( maybe even leaving the country )

 remember at the same time there is a massive flood of migrants coming across the Southern Border  , are they going straight onto welfare or into crime ??

 the figures don't compute  ( big tech is busy slashing jobs  , plenty of migrants  , etc etc etc )






						Lost in America w/Lyrics on Screen
					

Student Subtitling Project -   February 3rd, 2018 Same-Language-Subtitling!  This is another project where the video background version is blocked -- but audio + slides is accepted and monetized by copyright holder. From a literacy impact viewpoint it would be better to add SLS to the original...




					yewtu.be


----------



## waterbottle (Friday at 1:18 AM)

divs4ever said:


> CAREFUL !  that also MIGHT mean  more and more people are giving up looking for work ( maybe even leaving the country )
> 
> remember at the same time there is a massive flood of migrant coming across the Southern Border  , are they going straight onto welfare or into crime ??
> 
> ...




True, it's possible that they're giving up on work, but even so the US unemployment rate is at 3.7%...

Meanwhile, Bed bath & beyond warns market of possible bankruptcy. The first of many?








						Bed Bath & Beyond warns it may go out of business, stock tanks
					

Bed Bath & Beyond may have one foot in the retail grave as its struggles continued ahead of the holiday season.




					finance.yahoo.com


----------



## divs4ever (Friday at 1:35 AM)

well for  a while i participated  in a US   forum , dedicated to F.I.R.E. (Financially Independent Retire  Early ) , and while not a huge forum   it was gathering new members  looking for an early but well-funded exit from the job market  ( some seemed to be fairly high up the corporate ladder )

 if the US is losing accomplished staff ( by their own choice and planning ) that is a bad trend for many a MegaCorp

 job cuts are good for business when management thins out the bloat , not so good when quality staff  run for the exit


----------



## over9k (Friday at 4:04 AM)

Remember that unemployment is a RATE, it's effected by the participation rate (people actually looking for work). 

Simple demographics tells you that a huge bulge of boomers are all in the process of retiring right now, so this will free up a lot of positions for people to move up into (guy at the top retires, everyone below him moves up a notch). 

Not to say there won't be layoffs, but mass retirement = mass hiring, i.e retiring employees balance layoffs out somewhat. 

The one thing boomers AREN'T going to do is take risks with their retirement funds/pensions, so a lot of capital is going to dry up. 

So interest rates are going to go higher without the fed having to do nearly as much to send them there. 

There's also the question of retiree spending habits, normally I'd say to prepare for mass caravan trips, nights out at restaurants etc etc but if inflation has spooked them they might end up sitting on far more of their money/be much less inclined to spend than they otherwise would be. 

Food for thought.


----------



## over9k (Friday at 4:38 AM)

over9k said:


> russian war escalating,



Ukrainians are now being sent armoured vehicles: https://www.bloomberg.com/news/arti...?utm_source=google&utm_medium=bd&cmpId=google 

They asked for tanks but didn't get them (yet).


----------



## waterbottle (Friday at 6:19 AM)

over9k said:


> Remember that unemployment is a RATE, it's effected by the participation rate (people actually looking for work).
> 
> Simple demographics tells you that a huge bulge of boomers are all in the process of retiring right now, so this will free up a lot of positions for people to move up into (guy at the top retires, everyone below him moves up a notch).
> 
> ...




Fair point although the participation rate has been in a downtrend for a number of years...
https://tradingeconomics.com/united-states/labor-force-participation-rate


----------



## waterbottle (Friday at 6:21 AM)

over9k said:


> Ukrainians are now being sent armoured vehicles: https://www.bloomberg.com/news/arti...?utm_source=google&utm_medium=bd&cmpId=google
> 
> They asked for tanks but didn't get them (yet).




Ugh. This proxy war needs to end.


----------



## farmerge (Friday at 10:08 AM)

Perhaps the war mongering Putrid needs a wake up call


----------



## Knobby22 (Friday at 1:08 PM)

waterbottle said:


> Ugh. This proxy war needs to end.



Continued western resolve will lead to a quicker end.


----------



## waterbottle (Friday at 7:49 PM)

German factory orders down 5.3% month-on-month v. 0.5% expected...

Euro inflation rate out tonight, likely heading down. US unemployment figures to follow.


----------



## divs4ever (Friday at 11:15 PM)

waterbottle said:


> German factory orders down 5.3% month-on-month v. 0.5% expected...
> 
> Euro inflation rate out tonight, likely heading down. US unemployment figures to follow.



WOWEE !!  

 i would think the consensus  that picked 0.5% are now jobless  

 that said 2.5% would been my most brutal pick ( so not much closer than the pros )


----------



## waterbottle (Friday at 11:23 PM)

Euro inflation sliding to 9.2% v. 9.7% expected. Some inflation now falling in several countries around the world although central bankers will continue hiking.

Bloomberg reporting likely 202K jobs v. 200K expected... I think they would still be enough for the Fed to remain on course for hikes..


----------



## divs4ever (Friday at 11:26 PM)

waterbottle said:


> Euro inflation sliding to 9.2% v. 9.7% expected. Some inflation now falling in several countries around the world although central bankers will continue hiking.
> 
> Bloomberg reporting likely 202K jobs v. 200K expected... I think they would still be enough for the Fed to remain on course for hikes..



more likely tweaking the way they measure inflation ( they have done it before , will probably do it once more )


----------



## Knobby22 (Friday at 11:43 PM)

They don't appear to be trying for a soft landing. I feel they are very worried.


----------



## Smurf1976 (Friday at 11:45 PM)

Just a random observation but the collapse in the US natural gas price, now down to $3.34 so a drop of almost 50% since mid-December, despite a particularly cold storm and thus higher heating demand is sending a message I think.

Either there's been a sudden surge in gas production or the real economy and consumption is falling in a heap. My bet's on the latter.


----------



## divs4ever (Friday at 11:50 PM)

Smurf1976 said:


> Just a random observation but the collapse in the US natural gas price, now down to $3.34 so a drop of almost 50% since mid-December, despite a particularly cold storm and thus higher heating demand is sending a message I think.
> 
> Either there's been a sudden surge in gas production or the real economy and consumption is falling in a heap. My bet's on the latter.



maybe the EU isn't buying as much gas as predicted 

but something is up ( awry )


----------



## frugal.rock (Saturday at 12:02 AM)

Smurf1976 said:


> Just a random observation but the collapse in the US natural gas price, now down to $3.34



It might be a price collapse from recent ridiculous prices, but step back a bit?
At these prices, it's still up over 100%
from the end of 2019- pre covid.

There's been some crazy price gouging going on in many areas, they claim inflation, but it's a load of bulldust, pure price gouging.


----------



## waterbottle (Saturday at 12:09 AM)

Smurf1976 said:


> Just a random observation but the collapse in the US natural gas price, now down to $3.34 so a drop of almost 50% since mid-December, despite a particularly cold storm and thus higher heating demand is sending a message I think.
> 
> Either there's been a sudden surge in gas production or the real economy and consumption is falling in a heap. My bet's on the latter.




Crude also falling. Let's see what the refiners think. 

Meanwhile - Fed believes it can get the participation rate higher by reversing the wealth effect via tighter monetary policy.









						Retirements, Net Worth, and the Fall and Rise of Labor Force Participation
					

New research suggests that declining asset values in 2022 may have prompted older workers to return to the labor force.




					www.stlouisfed.org


----------



## divs4ever (Saturday at 12:55 AM)

frugal.rock said:


> It might be a price collapse from recent ridiculous prices, but step back a bit?
> At these prices, it's still up over 100%
> from the end of 2019- pre covid.
> 
> ...



still on the reduced EU  demand theory ( which may or may not be correct )

possibly the demand reduction MIGHT be reduced EU commercial use as businesses closed down or trimmed production 

 that would agree  with the sad German data posted above


----------



## Smurf1976 (Saturday at 1:03 AM)

frugal.rock said:


> It might be a price collapse from recent ridiculous prices, but step back a bit?



My basic thought though it's it's a price collapse under circumstances where one would normally expect the price to surge:









						'Worst storm probably in our lifetime': US winter storm death toll rises to at least 60
					

The death toll from one of the worst weather-related disasters in US history claims at least 60 deaths nationwide, with rescue efforts underway at multiple locations.




					www.abc.net.au
				






> Much of the rest of the United States has been hit by ferocious winter conditions.




Bearing in mind that about half of US homes use natural gas for heating and more than a third use electricity, the marginal source of which is not entirely but substantially it's gas (since nuclear and renewables tend to be fully utilised regardless). So there's a strong link that cold weather = more gas burned.

So if a major storm hits, and the gas price not only doesn't go up but actually goes down, then to me that's saying _something_ is up with the question being what?

Regardless of the reason though, gas is no longer pushing inflation up indeed it's now doing the opposite at least in the short term.


----------



## waterbottle (Saturday at 7:44 AM)

Employment numbers hot but services PMI contracting. Not sure how the Fed with respond to that. It would be sensible to pause...


----------



## mullokintyre (Saturday at 8:05 AM)

waterbottle said:


> Employment numbers hot but services PMI contracting. Not sure how the Fed with respond to that. It would be sensible to pause...



Perhaps the employment data is not quite as rosy as seen at first glance.
The vast majority of Jobs were part time and second jobs, not new hirings.
From Zero Hedge


> Reading the mainstream media's reaction to today's payrolls report, one would be left with the impression that it was generally on the goldilocks side and indicative of a possible soft-landing - consider this from Bloomberg: "the US labor market stayed resilient last month while wage gains cooled, raising hopes that the economy may dodge a recession and the Federal Reserve will further slow its aggressive campaign of interest-rate hikes."
> 
> Which is accurate: wage growth indeed slowed down following a major revision to the data (remember that 0.6% M/M jump in average hourly earnings that freaked out the market last month? Well, it was quietly revised to 0.4% today), and as a result - as even Fed mouthpiece Nick Timiraos pointed out earlier - "Revisions to average hourly earnings data paint a marginally less worrisome picture for the Fed on wages than the Nov report. The upturn in wage growth in Nov (originally reported as +0.6%) was revised (to +0.4%). *The 4.6% annual wage growth in Dec was the lowest since Aug '21.*"
> 
> ...



Mick


----------



## over9k (Saturday at 8:32 AM)

waterbottle said:


> Euro inflation sliding to 9.2% v. 9.7% expected. Some inflation now falling in several countries around the world although central bankers will continue hiking.
> 
> Bloomberg reporting likely 202K jobs v. 200K expected... I think they would still be enough for the Fed to remain on course for hikes..



CORE inflation actually rose though


----------



## waterbottle (Saturday at 8:39 AM)

mullokintyre said:


> Perhaps the employment data is not quite as rosy as seen at first glance.
> The vast majority of Jobs were part time and second jobs, not new hirings.
> From Zero Hedge
> 
> Mick




Yep the BLS data was called out by one of the central banks. I agree that we might be seeing a difference between the accuracy of data particularly when the services PMI reports that services employment is decreasing too.
What will JPowell believe?


----------



## waterbottle (Saturday at 10:59 AM)

US CPI numbers out next week. Cleveland Fed expecting 6.48% headline with 5.76% core. 
Anyone think we're setting up for a bear market rally?


----------



## farmerge (Saturday at 11:03 AM)




----------



## waterbottle (Saturday at 11:04 AM)

farmerge said:


>


----------



## farmerge (Saturday at 11:41 AM)

waterbottle said:


>



Who can pick what the land of Americana does when it comes the DOW and mates. Leaves a yo-yo standing with their ups and downs !!!!


----------



## divs4ever (Saturday at 1:21 PM)

waterbottle said:


> Employment numbers hot but services PMI contracting. Not sure how the Fed with respond to that. It would be sensible to pause...




 a different opinion of the jobs report 

Inside The "Strong" Jobs Report: Full-Time Workers -1K; Part-Time Workers +679K

https://www.zerohedge.com/markets/i...t-full-time-workers-1k-part-time-workers-679k


cheers


----------



## waterbottle (Saturday at 4:51 PM)

What happened during the tech bust & GFC RE: jobs? Where jobs figures similarly scrutinized?


----------



## farmerge (Saturday at 4:55 PM)

🤷‍♂️ how knows


----------



## divs4ever (Saturday at 5:31 PM)

waterbottle said:


> What happened during the tech bust & GFC RE: jobs? Where jobs figures similarly scrutinized?



i only took any real interest  in the stock market late 2010 ( anything earlier i had to learn from books/videos ) ( and my parents recollections of the great depression , that they grew up in )  

 but a relative used to work in the CES ( Centre-link , now ) now  and had documents  on data collection changes  in 1989 , so messing with the figures is not new nor unique to the US

 'massaged ' might be more accurate at official level


----------



## divs4ever (Saturday at 5:36 PM)

waterbottle said:


> US CPI numbers out next week. Cleveland Fed expecting 6.48% headline with 5.76% core.
> Anyone think we're setting up for a bear market rally?



watch for the Fed ( or PPT )  pumping the market with futures contracts


----------



## moXJO (Sunday at 11:08 AM)

waterbottle said:


> What happened during the tech bust & GFC RE: jobs? Where jobs figures similarly scrutinized?



Plenty of work for most. The mining boom was just about to get going and property went 6x not long after. Tech wrecked for a bit, gold was super cheap. I  was in Brisbane about 2000-2001 and Australia was on the cusp of exploding into opportunities.


----------



## waterbottle (Sunday at 11:29 PM)

Two peaks to inflation?


----------



## divs4ever (Monday at 12:04 AM)

waterbottle said:


> Two peaks to inflation?




 NORMALLY  , yes 

 you have the original cost impact , say, fuel price rises , or commodity price spikes  , and as consumer prices rises , the workers demand wage rises  , further impacting production/manufacturing costs  which businesses mostly needing to pass on the increased costs , followed by extra wage demands risking  a CPI/wage spiral .

 unfortunately once the spiral gets going  the usual tool  is massive interest rises which smashes demand among the masses , triggering public unrest , and that is normally distracted by triggering a MAJOR war , getting the fit young males killed somewhere else ( not on the steps of parliament )


 ( yes i follow the theory  , inflation  is the consequence  of extra currency injection , but most don't see it that way )

 HOWEVER it MIGHT be different this time ( and we have French-style regime changes )


----------



## divs4ever (Monday at 12:08 AM)

if Trump was US President  a major war  was possible , but since he isn't   a civil war ( or revolution  ) is more likely


----------



## qldfrog (Monday at 6:16 AM)

divs4ever said:


> if Trump was US President  a major war  was possible , but since he isn't   a civil war ( or revolution  ) is more likely



I would disagree, as Ukraine has demonstrated:
again and again, the US goes to serious war when under Democrats, not Republicans and we are already witnessing a major hardly proxy war there.
I doubt the US can afford, militarily speaking, starting a new one now: just depleted stocks of everything.


----------



## over9k (Monday at 6:48 AM)

qldfrog said:


> I would disagree, as Ukraine has demonstrated:
> again and again, the US goes to serious war when under Democrats, not Republicans and we are already witnessing a major hardly proxy war there.
> I doubt the US can afford, militarily speaking, starting a new one now: just depleted stocks of everything.



Wut? 

Are you not aware of iraq?


----------



## mullokintyre (Monday at 8:01 AM)

qldfrog said:


> I would disagree, as Ukraine has demonstrated:
> again and again, the US goes to serious war when under Democrats, not Republicans and we are already witnessing a major hardly proxy war there.
> I doubt the US can afford, militarily speaking, starting a new one now: just depleted stocks of everything.



A little bit of History from Reuters might be required here.


> Carter and Ford join Trump in not starting or escalating existing foreign conflicts with U.S. military involvement.



Carter was a democrat, Ford a republican.


World War 2  , Democrat Harry Truman in charge.
Korean War, Democrat Harry tTuman again.
Vietnam  - Eisenhower, republican, sent first aid to South Vietnam,  also ordered the coups in Iran and Guatamalea.
Vietnam - Big time, democrat JF Kennedy upped the ante in Vietnam and started the Bay of Pigs confrontation with USSR.
Vietnam  Upped the ante again , democrat  Lyndon Johnson, also  got involved in Laos and Cambodia
Vietnam end, republican, Richard Nixon, also got involved in Yom Kippur between Israel , Egypt and Syria. Nixon also started the "War on drugs".
Invasion of Grenada - Republican Ronald Reagan , also upped the anti with the bombing of Libya, involved in Iran Iraq war, plus sending troops to Lebanon.
First Persian Gulf War - George H.W. Bush plus invasion of panama.
Afghanistan -Republican George W Bush  started it, he also started the war on Iraq
Haiti uprising - Democrat Bill Clinton sent troops to Haiti and also to the balkans war
Barak Obama  democrat did not order any invasions, the United States and U.S. allies conducted months-long air strikes in Libya  and military operations against Islamic State in Iraq and Syria .
Mick


----------



## qldfrog (Monday at 9:57 AM)

mullokintyre said:


> A little bit of History from Reuters might be required here.
> 
> Carter was a democrat, Ford a republican.
> 
> ...



I like when you add facts to my points😊


----------



## divs4ever (Monday at 9:59 AM)

qldfrog said:


> I would disagree, as Ukraine has demonstrated:
> again and again, the US goes to serious war when under Democrats, not Republicans and we are already witnessing a major hardly proxy war there.
> I doubt the US can afford, militarily speaking, starting a new one now: just depleted stocks of everything.



 it is mostly about the morale of the military   look at Italy's successful  campaign  ( sarcasm ) against Ethiopia ,  or when the French were evicted from Vietnam , 

 they might enter a war under a Democrat leader  , but would they fight hard  for Biden's White  House


----------



## qldfrog (Monday at 10:00 AM)

divs4ever said:


> it is mostly about the morale of the military   look at Italy's successful  campaign  ( sarcasm ) against Ethiopia ,  or when the French were evicted from Vietnam ,
> 
> they might enter a war under a Democrat leader  , but would they fight hard  for Biden's White  House



Maybe why they fight to the last Ukrainian and have limited US citizens on the ground


----------



## JohnDe (Monday at 10:04 AM)

mullokintyre said:


> A little bit of History from Reuters might be required here.
> 
> Carter was a democrat, Ford a republican.
> 
> ...




WWII - Franklin D. Roosevelt declared war on Japan after a surprise attack on Pearl Harbour


----------



## divs4ever (Monday at 10:04 AM)

qldfrog said:


> Maybe why they fight to the last Ukrainian and have limited US citizens on the ground



 has hints of WW1  , when the US happily  sold weapons for the first half of it


----------



## divs4ever (Monday at 10:12 AM)

JohnDe said:


> WWII - Franklin D. Roosevelt declared war on Japan after an unprovoked attack on Pearl Harbour



 wasn't  all that unprovoked  

the US had put sanctions on Japan earlier  and sent some fighter pilots to help China resist , now sure Japan had occupied Korea , Manchuria  and parts of China ,  but there was plenty of activity before Pearl Harbour


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## mullokintyre (Monday at 10:13 AM)

JohnDe said:


> WWII - Franklin D. Roosevelt declared war on Japan after a surprise attack on Pearl Harbour



Quite correct  @JohnDe , I was wrong about Eisenhower being President at the start of WW2.
Mick


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## waterbottle (Monday at 9:25 PM)

Risk back on? Have we got a bear market rally here until the next Fed meeting thanks to the China re-opening?
US 10 year down
DXY down
Equities rallying
Crypto up

US CPI numbers likely to show continued down trend, so unless there's a surprise to the upside, I can't see what would interrupt a rally.


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## over9k (Tuesday at 8:38 AM)

waterbottle said:


> Risk back on? Have we got a bear market rally here until the next Fed meeting thanks to the China re-opening?
> US 10 year down
> DXY down
> Equities rallying
> ...



China reopening narrative. 




Panic buys at open, flog at open, buy at close, groundhog day.


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## mullokintyre (Tuesday at 9:06 AM)

over9k said:


> China reopening narrative.
> 
> View attachment 151459
> 
> ...



Get back into your oil plays. According to Zero hedge, 


> China issued a substantial increase in its crude imports quotas for this year, the clearest sign yet that Chinese refiners are set for a material increase in output  - and a surge in demand for oil - as the nation finally moves away from its ridiculous Covid Zero policy.
> 
> On Monday, China issued a second batch of 2023 crude oil import quotas, raising the total for this year by 20% compared to the same time last year, according to Reuters and Bloomberg.  According to the document from the Ministry of Commerce, *44 companies, mostly independent refiners, were given 111.82 million tonnes in import quotas in this round.*
> 
> ...



Mick


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## waterbottle (Tuesday at 9:45 AM)

mullokintyre said:


> Get back into your oil plays. According to Zero hedge,
> 
> Mick



I saw that too. 

Lends credence to a double spike in inflation as per Burry. What was oil doing when China was open?


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## over9k (Tuesday at 11:22 AM)

It's even all over the news that they (chinese government) are mulling more stimulus now too. 




AUD's pulled hard the last few days in response but you've got to think about the big picture here and look at china as a whole, it's approaching demographic winter and its economy is the most... precarious in the world. And that's before we even think about all the sanctions that keep getting put on them.

Any bump we see will not be long lived.


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## waterbottle (Tuesday at 11:41 AM)

over9k said:


> It's even all over the news that they (chinese government) are mulling more stimulus now too.
> 
> View attachment 151467
> 
> ...




This is one of those classic "how long can the market remain irrational before I become insolvent" moments. 
Bonds behaving differently to equities...


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## over9k (Tuesday at 11:43 AM)

waterbottle said:


> This is one of those classic "how long can the market remain irrational before I become insolvent" moments.
> Bonds behaving differently to equities...



Might be a good point to time a bet against actually. Hmm. My degen 3LNI is going to/has already run hard, might be a rotation point coming up soon.


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## over9k (Tuesday at 4:21 PM)

3/6 headlines saying not to get ahead of ourselves


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## waterbottle (Tuesday at 4:27 PM)

over9k said:


> View attachment 151494
> 
> 
> 3/6 headlines saying not to get ahead of ourselves



I think you can make a case for either direction - at least in the short term. 
Bullish = China open, CPI dropping, jobs numbers, no meeting until feb
Bearish = 2/10 yield inversion deepens, unemployment is too low, fed warns on market euphoria. 

Long-term depends on what the Fed does but historically, markets don't bottom until the Fed has finished *cutting -* they haven't even finished hiking yet.


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## waterbottle (Tuesday at 6:59 PM)

Sachs sacks. 3200 to be exact.



			Bloomberg - Are you a robot?


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## Dona Ferentes (Tuesday at 7:18 PM)

waterbottle said:


> I think you can make a case for either direction - at least in the short term.
> Bullish = China open, CPI dropping, jobs numbers, no meeting until feb
> Bearish = 2/10 yield inversion deepens, unemployment is too low, fed warns on market euphoria.
> 
> Long-term depends on what the Fed does but historically, markets don't bottom until the Fed has finished *cutting -* they haven't even finished hiking yet.



As Yogi Berra said " _It's tough to make predictions, especially about the future._ "

Inflation is what inflation is. Backward looking, forward looking; lots of variables. I tend to like this guy (Jared Dillian)


> Everyone thinks we will go into a recession. We probably will. Lots of people think this will result in the bear market getting worse. I don’t—it is already priced in. Stocks going down 25% in 2022 were priced in the recession. This has happened countless times throughout history—the stock market drops, and _then_ we get the recession. By the time we get the recession, stocks are going up again.






> What really interests me is the yield curve, which is massively inverted at the moment. One of the easiest and most obvious trades seems to be the yield curve steepener, which would result in short-term rates going down relative to long-term rates.
> 
> The _bull steepener_, as it is known, is one of the easiest trades in finance. ....And everyone knows that it’s not the yield curve inversion that coincides with the recession—it’s actually the steepening that follows.


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## over9k (Yesterday at 7:41 AM)

waterbottle said:


> Sachs sacks. 3200 to be exact.
> 
> 
> 
> Bloomberg - Are you a robot?



Almost as if it's much harder to make money in a bear market hey? 

They're trimming the fat, nothing more (though there's a lot of fat).


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## waterbottle (Yesterday at 10:12 AM)

JPowell speaking about unpopular decisions required to tame inflation. I wonder if he was talking in the past or future tense? 

Meanwhile 2x fed speeches stating that rates >5% will be necessary.


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## waterbottle (Yesterday at 11:57 AM)

Australian CPI increases to 7.3%.... Time to hike?


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## Craton (Yesterday at 12:53 PM)

Just one of many reasons that I've a negative outlook for 2023.

World Bank: Recession a looming threat for global economy​


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## mullokintyre (Yesterday at 1:06 PM)

waterbottle said:


> Australian CPI increases to 7.3%.... Time to hike?



The graph from ABS  says it all
Probably the most benign spin one could put on it is that it has stabilised, but not yet coming down.
How will the RBA interpret it is the big question.


Mick


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## waterbottle (Yesterday at 2:25 PM)

mullokintyre said:


> The graph from ABS  says it all
> Probably the most benign spin one could put on it is that it has stabilised, but not yet coming down.
> How will the RBA interpret it is the big question.
> View attachment 151529
> ...



CPI up and retail sales up.
I don't think you can justify any other move except to hike.


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## againsthegrain (Yesterday at 2:33 PM)

waterbottle said:


> CPI up and retail sales up.
> I don't think you can justify any other move except to hike.



That is a general observation from the street level economy thread. People spending living the good life, unaffected by the current rates as it seems.  Perhaps a soft start in Feb with .25 to warm up the table for next .50 raise after?  Or perhaps hard and sweet with 2 x .50 to start the year we will see


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## wayneL (Yesterday at 3:24 PM)

againsthegrain said:


> That is a general observation from the street level economy thread. People spending living the good life, unaffected by the current rates as it seems.  Perhaps a soft start in Feb with .25 to warm up the table for next .50 raise after?  Or perhaps hard and sweet with 2 x .50 to start the year we will see



It seems to me that without any overseas influences that Australia can probably truck along quite nicely through this period, with the damage pretty much confined to the fringes ( though it must be said that prices are set at the fringe).

Question in my mind is what sort of sh*tshow are the major economies going to endure... US, China, EU.... And how will that will eventually affect us. 

Our economy does not exist in a vacuum.


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## waterbottle (Yesterday at 9:59 PM)

Short end US bonds continuing their rise despite whilst longer term bonds have been dumping. Inversion deepening. 
Meanwhile equities continuing to rise...


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## over9k (Yesterday at 10:05 PM)

waterbottle said:


> Australian CPI increases to 7.3%.... Time to hike?



Fixed income has already priced another 50 in by june


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## over9k (Yesterday at 10:23 PM)

Zeihan's latest two cents on europe/winter/energy


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## moXJO (Today at 12:31 AM)

over9k said:


> Zeihan's latest two cents on europe/winter/energy




This guy is great on a lot of things and also terrible on a lot of things (but sounds great).


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## waterbottle (Today at 10:25 AM)

moXJO said:


> This guy is great on a lot of things and also terrible on a lot of things (but sounds great).




Can't really blame him for not being able to predict a hot European winter...

I think periods like 2022 tend to attract alot of bearish insight that feeds into an echo chamber. It's very easy to get wrapped up into it - I've caught myself doing this too. Zeihan produces some great bear soma, that although is logical, is not able to predict the unpredictable, which tends to undo many a bear thesis...


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## waterbottle (Today at 10:42 AM)

Biggest "news" today will be CPI. I say "news" because almost everyone expects inflation to continue downwards, so anything but will be a surprise. 

The bullish argument is clear:

China is reopening
CPI is heading downwards
We are fast approaching the Fed's terminal rate
Markets (particularly the NDX) have already had a substantial loss. COVID is behind us
Europe is managing to survive its winter
Crude has fallen substantially (almost 50% compared to its peak) 

The bearish argument is also worryingly clear:

The full impact of rates won't be felt until 3-12 months after the final hike (I can't find any evidence, it just seems to be based on anecdotes) 
5% may not be the terminal rate as mentioned by several Fed speakers 
The West is now planning additional sanctions on refined crude products from Russia I. E. Petrol and diesel
The yield curve is inverted. Massively. Historically, this has meant a recession will follow, although there was a recent article that quoted the 'inventor' it not applying this time due to unusual economic circumstances
Employment is still extremely tight, although lay-offs are now starting to increase
Historically, markets don't bottom until the Fed is done cutting, meanwhile we aren't done hiking. 
This rally is reminiscent of June 2022. Everything was screaming recession inbound. The Fed message was clear that additional hikes would be coming, but the market rallied on hopium for 2-3 months before getting smacked down by a reality check at Jackson Hole. 

My gut tells me we're close to the bottom but not there yet. So the next question I have is how long is this rally going to run? 
Unless we see a surprise upward CPI (we did in Oz...), I could see this running until the next Fed meeting. 

Anyone else keen to share their thoughts?


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## moXJO (Today at 11:28 AM)

waterbottle said:


> Can't really blame him for not being able to predict a hot European winter...
> 
> I think periods like 2022 tend to attract alot of bearish insight that feeds into an echo chamber. It's very easy to get wrapped up into it - I've caught myself doing this too. Zeihan produces some great bear soma, that although is logical, is not able to predict the unpredictable, which tends to undo many a bear thesis...



No he quotes figures in other videos that are wrong. Is off with what's actually going on in certain areas. 
It's not the predictions, it's multiple other things that probably aren't his forte.


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## over9k (Today at 11:29 AM)

moXJO said:


> No he quotes figures in other videos that are wrong. Is off with what's actually going on in certain areas.
> It's not the predictions, it's multiple other things that probably aren't his forte.



Cam you list a few examples?


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## InsvestoBoy (Today at 11:36 AM)

waterbottle said:


> So the next question I have is how long is this rally going to run?




Time for a breather methinks. It could be a retracement, could be a consolidation, but I think it won't be up.


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## waterbottle (Today at 11:41 AM)

InsvestoBoy said:


> Time for a breather methinks. It could be a retracement, could be a consolidation, but I think it won't be up.




Whats your take on CPI data tonight? Consensus is for 0% MoM but nowcast says otherwise :/


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## moXJO (Today at 11:51 AM)

over9k said:


> Cam you list a few examples?



sinaloa cartel assessment was sketch.

Some of the figures he is sprouting in the evs episode is way out.

He said Putin was mid 60s when he is 70.

His assessment on Zhao Lijian was wrong. He got dumped from his minute of silence when asked about the protests. Not because of wolf warrior standing. They still have multiple hard-liners.


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## InsvestoBoy (Today at 11:59 AM)

waterbottle said:


> Whats your take on CPI data tonight? Consensus is for 0% MoM but nowcast says otherwise :/
> 
> View attachment 151577
> 
> View attachment 151578




Who knows.

Gun to my head, I would say surprise to the downside vs consensus. Mid 6 on headline and mid 5 on core.

To me, it's irrelevant.


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## waterbottle (Today at 12:00 PM)

InsvestoBoy said:


> Who knows.
> 
> Gun to my head, I would say surprise to the downside vs consensus. Mid 6 on headline and mid 5 on core.
> 
> To me, it's irrelevant.



Interesting, why's it irrelevant? Do you think the rally will halt for some other reason?


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## InsvestoBoy (Today at 12:03 PM)

waterbottle said:


> Interesting, why's it irrelevant?




It's a lagging indicator of what happened over the last year. Shouldn't we be interested in what's happening next not what happened last?



waterbottle said:


> Do you think the rally will halt for some other reason?




Yes.


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## over9k (Today at 12:06 PM)

waterbottle said:


> Whats your take on CPI data tonight? Consensus is for 0% MoM but nowcast says otherwise :/
> 
> View attachment 151577
> 
> View attachment 151578



I don't think the fed has done a single thing different to exactly what it said it was going to do and they're on record saying the next one will be a 50 so I'd be banking on that.


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## waterbottle (Today at 12:07 PM)

InsvestoBoy said:


> It's a lagging indicator of what happened over the last year. Shouldn't we be interested in what's happening next not what happened last?
> 
> 
> 
> Yes.



I agree, although it does tend to move markets. Admittedly, it might be short-lived.

What is the other factor do you think will halt this rally?


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## waterbottle (Today at 12:13 PM)

over9k said:


> I don't think the fed has done a single thing different to exactly what it said it was going to do and they're on record saying the next one will be a 50 so I'd be banking on that.
> 
> View attachment 151579




Market is pricing in a 25bps hike though....


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## InsvestoBoy (Today at 12:13 PM)

waterbottle said:


> I agree, although it does tend to move markets. Admittedly, it might be short-lived.



I already tried to convince y'all that it doesn't move markets, but *shrug*, believe what you like.



waterbottle said:


> What is the other factor do you think will halt this rally?




I watch a bunch of things, but one could do worse than taking the other side of consensus on this forum, when people here are saying "I could see this running until the next Fed meeting.", we're probably done, no?

Just think of how bearish everyone here was on GBP right at the bottom on Sep 22 or thinking the world was ending because of Credit Suisse etc etc.


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## waterbottle (Today at 12:15 PM)

InsvestoBoy said:


> I already tried to convince y'all that it doesn't move markets, but *shrug*, believe what you like.
> 
> 
> 
> ...




Fair point


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## over9k (Today at 12:21 PM)

waterbottle said:


> Market is pricing in a 25bps hike though....
> 
> View attachment 151580



They did this with several others though, when a couple of data points came in off expectations (and markets went nuts in response) it was all "oh the fed will have to do X, the fed will have to do Y" etc etc and the fed went NOPE we're doing exactly what we said we would and markets then went bonkers back in the other direction as everyone started unwinding everything.


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## waterbottle (Today at 12:24 PM)

over9k said:


> They did this with several others though, when a couple of data points came in off expectations (and markets went nuts in response) it was all "oh the fed will have to do X, the fed will have to do Y" etc etc and the fed went NOPE we're doing exactly what we said we would and markets then went bonkers back in the other direction as everyone started unwinding everything.




Yeah, I agree the Fed has stuck to their guns. Just trying to test for deficiencies in my understanding.


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## over9k (Today at 12:28 PM)

waterbottle said:


> Yeah, I agree the Fed has stuck to their guns. Just trying to test for deficiencies in my understanding.



Yeah, markets might be pricing a different fed action but they've been wrong literally EVERY other time so I don't see why they're going to be right this time. 

I mean famous last words but I don't foresee why the fed would not stick to its word this time when it has every other time. 

The markets strike me as moronic at this point but I can see why you're second guessing yourself as it all appears so dumb that you're thinking they might know something you don't. 

I'm betting on a 50.


----------

