Inflation

[mullokintyre]

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.

Some of these could make it difficult for the ECB to focus on combating inflation.

The ECB’s decision brings it more into line with other central banks, including the Federal Reserve, underscoring how the bank’s top officials are increasingly worried about high inflation.

The Fed is expected to raise its policy rate by 0.75 percentage point later this month to a range between 2.25 per cent and 2.5 per cent.

Inflation has risen to about 9 per cent on both sides of the Atlantic, and shows no sign of abating soon.

“There was tremendous pressure going into this meeting,” said one person familiar with the ECB’s discussions.

“The euro is weak, and you have the Fed which might raise rates by 75 or even 100 basis points. And then you come out with 25?”

Financial markets ricocheted after news of the increase.

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]

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]

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]

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]

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]

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]

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]

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]

Oil's up another ~1.3% bottle so perhaps not.

Yeah, too volatile to read and the geopolitics

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]

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]

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

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]

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]

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]

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 )

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]

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]

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]

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]

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 )

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]

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]

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 )

Mandatory green targets, mandatory investment in economic rebirth fund scheme etc..i am retired..aka ended work..but super is not my friend