over9k
So I didn't tell my wife, but I...
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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...
over9k
So I didn't tell my wife, but I...
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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.
over9k
So I didn't tell my wife, but I...
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@Smurf1976 Know of a leveraged etf for XEJ? I haven't been able to find anything
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leveraged ( XEJ ) ?? , nothing i have noticed
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Not that I'm aware of......
Value Collector
Have courage, and be kind.
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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.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:
View attachment 141287
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.
Do you think that this plant closure is causing the the higher usage/prices?
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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.
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.”
Maybe be not support themselves but we do have a welfare system that seems almost limitless.
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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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.
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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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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the worker is being buried in paperwork and red and green tape they might be employed but productivity is being strangledAnd 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.
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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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.
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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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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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.
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.
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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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.
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.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.
No man or woman (they are almost exclusively men tho) should have to die in the workplace for just doing their job.
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