Macroeconomics, the economy, inflation etc. *likely to be very dull*

2456765

Comments

  • mully79
    mully79 Posts: 904
    Is there a nice way to keep an eye on share/fund values etc (paid or free) ?
  • rick_chasey
    rick_chasey Posts: 72,517
    mully79 said:

    Is there a nice way to keep an eye on share/fund values etc (paid or free) ?

    Morningstar is your friend
  • Pross
    Pross Posts: 40,435

    mully79 said:

    Is there a nice way to keep an eye on share/fund values etc (paid or free) ?

    Morningstar is your friend
    The UK's only socialist daily newspaper seems a strange recommendation for share advice
  • surrey_commuter
    surrey_commuter Posts: 18,866

    mully79 said:

    Is there a nice way to keep an eye on share/fund values etc (paid or free) ?

    Morningstar is your friend
    Or the platforms like II and Hargreaves Lansdown
  • rick_chasey
    rick_chasey Posts: 72,517
    So the big hikes in second hand car prices in the states have slowed, to the poiny where this is the third week of wholesale car price drops. I.e. the inflation seems to be temporary (which was what industry insiders were suggesting).
  • surrey_commuter
    surrey_commuter Posts: 18,866

    So the big hikes in second hand car prices in the states have slowed, to the poiny where this is the third week of wholesale car price drops. I.e. the inflation seems to be temporary (which was what industry insiders were suggesting).

    Weren’t the hikes down to supply side issues
  • rick_chasey
    rick_chasey Posts: 72,517

    So the big hikes in second hand car prices in the states have slowed, to the poiny where this is the third week of wholesale car price drops. I.e. the inflation seems to be temporary (which was what industry insiders were suggesting).

    Weren’t the hikes down to supply side issues
    That's I think what I said at the time but a lot of people in the Spectator were shouting "INFLATION! WE NEED MORE AUSTERITY!"
  • surrey_commuter
    surrey_commuter Posts: 18,866

    So the big hikes in second hand car prices in the states have slowed, to the poiny where this is the third week of wholesale car price drops. I.e. the inflation seems to be temporary (which was what industry insiders were suggesting).

    Weren’t the hikes down to supply side issues
    That's I think what I said at the time but a lot of people in the Spectator were shouting "INFLATION! WE NEED MORE AUSTERITY!"
    Then they don’t understand the causes of inflation so have no idea what the potential solutions are.
  • darkhairedlord
    darkhairedlord Posts: 7,180

    So the big hikes in second hand car prices in the states have slowed, to the poiny where this is the third week of wholesale car price drops. I.e. the inflation seems to be temporary (which was what industry insiders were suggesting).

    Weren’t the hikes down to supply side issues
    That's I think what I said at the time but a lot of people in the Spectator were shouting "INFLATION! WE NEED MORE AUSTERITY!"
    Then they don’t understand the causes of inflation so have no idea what the potential solutions are.
    They don't care about inflation, its a rallying call for tax-cuts.
  • rick_chasey
    rick_chasey Posts: 72,517

    So the big hikes in second hand car prices in the states have slowed, to the poiny where this is the third week of wholesale car price drops. I.e. the inflation seems to be temporary (which was what industry insiders were suggesting).

    Weren’t the hikes down to supply side issues
    That's I think what I said at the time but a lot of people in the Spectator were shouting "INFLATION! WE NEED MORE AUSTERITY!"
    Then they don’t understand the causes of inflation so have no idea what the potential solutions are.
    They don't care about inflation, its a rallying call for tax-cuts.
    I thought it was a rallying call for bigger pension pay outs from the gov't ;-)
  • rjsterry
    rjsterry Posts: 27,595

    So the big hikes in second hand car prices in the states have slowed, to the poiny where this is the third week of wholesale car price drops. I.e. the inflation seems to be temporary (which was what industry insiders were suggesting).

    Inflation in the construction industry is still going nuts. We are already at the point of builder's merchants rationing some materials.
    1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
    Pinnacle Monzonite

    Part of the anti-growth coalition
  • surrey_commuter
    surrey_commuter Posts: 18,866
    rjsterry said:

    So the big hikes in second hand car prices in the states have slowed, to the poiny where this is the third week of wholesale car price drops. I.e. the inflation seems to be temporary (which was what industry insiders were suggesting).

    Inflation in the construction industry is still going nuts. We are already at the point of builder's merchants rationing some materials.
    problems in the supply chain, excess demand or a bit of both?
  • surrey_commuter
    surrey_commuter Posts: 18,866
    Borrowing costs hit £8bn in June.

    Everybody comfortable with debt servicing being one of the highest spending Govt depts

    FYI - index linked gilts are £471bn

    I am so old I can remember when monthly borrowing costs of £8bn would have been a disaster
  • rjsterry
    rjsterry Posts: 27,595

    rjsterry said:

    So the big hikes in second hand car prices in the states have slowed, to the poiny where this is the third week of wholesale car price drops. I.e. the inflation seems to be temporary (which was what industry insiders were suggesting).

    Inflation in the construction industry is still going nuts. We are already at the point of builder's merchants rationing some materials.
    problems in the supply chain, excess demand or a bit of both?
    Global material supply problems. Local labour shortages. Major infrastructure projects getting first dibs on the available materials and high demand due to a strong property market.
    1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
    Pinnacle Monzonite

    Part of the anti-growth coalition
  • rick_chasey
    rick_chasey Posts: 72,517
    https://www.bankofengland.co.uk/-/media/boe/files/speech/2021/july/running-out-of-room-revisiting-the-3d-perspective-on-low-interest-rates-speech-by-gertjan-vlieghe.pdf?la=en&hash=DB9F3B24BD2CC75E5737442A3D053499C984E6A2


    Running out of room: revisiting the 3D perspective on low interest rates

    Not read it all obviously.

    On demographics:
    The main insight is that this demographic transition is primarily about desired stocks of assets of the whole
    population, not about the flow of savings, or savings rate, of the old. Once we understand that, the sign of
    the effect of demographics on interest rates is clear. The intuition of many observers (including me, some
    years ago) is that this is a story about old people retiring, about baby-boomers. Just before retiring, old
    people save a lot, so push down on r*. Once they cross the retirement threshold, they become dis-savers, so
    push up on r*. But this is a very partial analysis. What dominates quantitatively is not the fact that more old
    people will soon be crossing the retirement threshold, but that a growing share of the population has a higher
    desired stock of assets to finance their retirement.2 That will continue for many decades and will, if anything,
    add further downward pressure on r* relative to today


    Crucially, retirees do not run down their asset holdings very quickly. In contrast,
    people who enter their 50s, for example, hold far more assets than when they were in their 40s. What I will
    demonstrate is that the latter effect totally dominates the former effect: the additional saving of the
    middle-aged outweighs the modest dissaving of the retirees.



    And then later on inequality (on the evidence of rising inequality across the west)

    s.
    Those earning a higher income have a lower marginal propensity to
    consume. A rise in inequality means more income earned by those who have a lower marginal propensity to
    consume. This therefore requires a lower interest rate to maintain aggregate consumption demand.


    It then goes on about the interaction between debt and the distribution of income:

    9
    The mechanism is as follows. Those at the top of the
    income distribution not only have a lower propensity to consume, but they also desire to accumulate more
    wealth.10 The higher desired asset holdings push down on r* not just via a higher capital to income ratio, but
    also via an increase in lending to lower income households. The interest rate falls far enough to encourage
    lower income households to borrow. In effect, higher income inequality looks like a positive credit supply shock for lower income households. The corresponding assets representing this credit to lower income
    households are held, directly or indirectly, by the higher income households.
    In this mechanism, debt is not an independent factor, but rather the endogenous consequence of income
    inequality. There are multiple channels through which income inequality, via higher debt, reduces r*.
  • rick_chasey
    rick_chasey Posts: 72,517
    Should also add there is a fair amount on QE and the two theories on what it does and how it works - goes into some detail.
  • surrey_commuter
    surrey_commuter Posts: 18,866

    Should also add there is a fair amount on QE and the two theories on what it does and how it works - goes into some detail.

    As somebody who thinks QE is snake oil it does intrigue me that proponents think there is a limit and dress it up in pseudo science when to me it is an attempt to stop the market from calling their bluff
  • rjsterry
    rjsterry Posts: 27,595

    Should also add there is a fair amount on QE and the two theories on what it does and how it works - goes into some detail.

    As somebody who thinks QE is snake oil it does intrigue me that proponents think there is a limit and dress it up in pseudo science when to me it is an attempt to stop the market from calling their bluff
    Has it not always really been a a bit of a game? Governments or monarchs have always had grander plans than their pockets allow and pushed things as far as they could. Occasionally they got it wrong and tanked a regional economy.
    1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
    Pinnacle Monzonite

    Part of the anti-growth coalition
  • surrey_commuter
    surrey_commuter Posts: 18,866
    rjsterry said:

    Should also add there is a fair amount on QE and the two theories on what it does and how it works - goes into some detail.

    As somebody who thinks QE is snake oil it does intrigue me that proponents think there is a limit and dress it up in pseudo science when to me it is an attempt to stop the market from calling their bluff
    Has it not always really been a a bit of a game? Governments or monarchs have always had grander plans than their pockets allow and pushed things as far as they could. Occasionally they got it wrong and tanked a regional economy.
    Maybe but my argument is that for there to be a limit to QE is an inherent contradiction. If there is no downside to the Govt buying £700bn of it's own debt why would there be a downside to doubling or tripling that number? They seem to be arbritarily deciding that they have reached the max amount of QE.

    Why not keep borrowing £200bn a year for ever more?
  • rjsterry
    rjsterry Posts: 27,595
    edited July 2021

    rjsterry said:

    Should also add there is a fair amount on QE and the two theories on what it does and how it works - goes into some detail.

    As somebody who thinks QE is snake oil it does intrigue me that proponents think there is a limit and dress it up in pseudo science when to me it is an attempt to stop the market from calling their bluff
    Has it not always really been a a bit of a game? Governments or monarchs have always had grander plans than their pockets allow and pushed things as far as they could. Occasionally they got it wrong and tanked a regional economy.
    Maybe but my argument is that for there to be a limit to QE is an inherent contradiction. If there is no downside to the Govt buying £700bn of it's own debt why would there be a downside to doubling or tripling that number? They seem to be arbritarily deciding that they have reached the max amount of QE.

    Why not keep borrowing £200bn a year for ever more?
    Because they're not really borrowing in the way you or I do. They are just choosing how much money is in circulation, the same as an medieval king setting up a certain number of mints and controlling how many silver pennies they issue.
    1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
    Pinnacle Monzonite

    Part of the anti-growth coalition
  • surrey_commuter
    surrey_commuter Posts: 18,866
    rjsterry said:

    rjsterry said:

    Should also add there is a fair amount on QE and the two theories on what it does and how it works - goes into some detail.

    As somebody who thinks QE is snake oil it does intrigue me that proponents think there is a limit and dress it up in pseudo science when to me it is an attempt to stop the market from calling their bluff
    Has it not always really been a a bit of a game? Governments or monarchs have always had grander plans than their pockets allow and pushed things as far as they could. Occasionally they got it wrong and tanked a regional economy.
    Maybe but my argument is that for there to be a limit to QE is an inherent contradiction. If there is no downside to the Govt buying £700bn of it's own debt why would there be a downside to doubling or tripling that number? They seem to be arbritarily deciding that they have reached the max amount of QE.

    Why not keep borrowing £200bn a year for ever more?
    Because they're not really borrowing in the way you or I do. They are just choosing how much money is in circulation, the same as an medieval king setting up a certain number of mints and controlling how many silver pennies they issue.
    but as they are retiring their own IOUs why not keep going
  • rjsterry
    rjsterry Posts: 27,595

    rjsterry said:

    rjsterry said:

    Should also add there is a fair amount on QE and the two theories on what it does and how it works - goes into some detail.

    As somebody who thinks QE is snake oil it does intrigue me that proponents think there is a limit and dress it up in pseudo science when to me it is an attempt to stop the market from calling their bluff
    Has it not always really been a a bit of a game? Governments or monarchs have always had grander plans than their pockets allow and pushed things as far as they could. Occasionally they got it wrong and tanked a regional economy.
    Maybe but my argument is that for there to be a limit to QE is an inherent contradiction. If there is no downside to the Govt buying £700bn of it's own debt why would there be a downside to doubling or tripling that number? They seem to be arbritarily deciding that they have reached the max amount of QE.

    Why not keep borrowing £200bn a year for ever more?
    Because they're not really borrowing in the way you or I do. They are just choosing how much money is in circulation, the same as an medieval king setting up a certain number of mints and controlling how many silver pennies they issue.
    but as they are retiring their own IOUs why not keep going
    Same reason that the medieval King couldn't just mint coins indefinitely to fund his latest war.
    1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
    Pinnacle Monzonite

    Part of the anti-growth coalition
  • rick_chasey
    rick_chasey Posts: 72,517
    Couple charts for you.




  • rick_chasey
    rick_chasey Posts: 72,517
    And also on US inflation (which the rest of the West typically follows)



    In short, the spike is temporary.
  • And also on US inflation (which the rest of the West typically follows)



    In short, the spike is temporary.
    How did imposing trade barriers between the States and their shortage of HGV drivers resolve itself?
  • rick_chasey
    rick_chasey Posts: 72,517
    edited September 2021
    https://www.theguardian.com/world/2021/sep/09/china-property-market-evergrande-300bn-debt-share-slump

    https://www.reuters.com/business/china-evergrande-selloffs-default-worries-onshore-bond-temporarily-suspended-2021-09-09/

    worth keeping an eye on.

    In summary for those who do not follow, Evergrade is one of, if not the, biggest real estate developers in China.

    It's also extremely indebted - to the point that even the chinese regulators went public that it was in a dodgy situation 2 years ago.

    Things have accelerated since then as it's become clear the developer has been struggling to sell off assets required to reduce the debt burden.

    That has created a bit of a vicious cycle, as they are dramatically reducing the prices of their assets to get the properties to sell, plus a bigger concern that the firm is in trouble , so the banks increase the cost of borrowing to compensate for the added perceived risk, and so they have to sell more assets etc.

    The concern is that it is so large and so indebted it is a problem for the entire system, and so this sudden collapse and likely default (it's currently rated by Fitch as "default imminent") will cause a crisis in the Chinese financial system.
  • elbowloh
    elbowloh Posts: 7,078
    edited September 2021
    Felt F1 2014
    Felt Z6 2012
    Red Arthur Caygill steel frame
    Tall....
    www.seewildlife.co.uk
  • rick_chasey
    rick_chasey Posts: 72,517
    elbowloh said:
    Well this is china so undoubtedly yes - they are unconcerned about the state owning things - but I suspect it points to a wider property bubble bursting.
  • rick_chasey
    rick_chasey Posts: 72,517
    So to give you an idea of the 'contagion', Citi and CS are no longer accepting bonds of other chinese real estate developers as collateral (basically the repo market - this is short term liquidity to these firms, so that suggets the banks are concerned enough that they are not even doing low risk lending to these firms to keep the lights on).
  • mully79
    mully79 Posts: 904
    What does everyone think the knock on will be of national insurance rises ?Surely forcing every business to pay an extra 1.25% national insurance for every employee will push up the cost of goods and services and therefore fuel inflation ?