CLICK RATE BY EMOTIONAL TRIGGERING FACTOR IN 2023
Curiosity 25%
Trust 25%
Pressure 24%
Authority 28%
Helpfulness 28%
Request for money 18%
Compliments 29%
Gain, logic, fear, scarcity
Saturday, 21 October 2023
Thursday, 19 October 2023
REVIEW OF CLOSE BROTHERS GROUP
19 October 2023
Another severe CBG Close Brothers Group SP share price dent seems underway today, today the share goes ex div, of course, I hear CBG is the most shorted stock in the 250.
Doesn't mean these hedge funds have any inside information, although maybe they do, but it does suggest that in their updated DCF discount cash flow valuations, they may have figured in higher delinquency rates... maybe 20% of loans are underwater.
Plus, it might be a few years now until market borrowing rates drop back some, and so CBG may have to refinance under more onerous conditions.
So banks and life insurance, financials indeed, would not be a sector that an investor would want to be in, other than for short-term trading, for a few years.
There just doesn't seem to be the earnings growth and higher returns on capital in CBG. Need to mark down EPS the earnings per share. This seems apparent from the graph of the share price over five years. If momentum indicators back each other up and suggest a share price decline, then instead of investing, I stay away, get out, or would invest in a company with good SP momentum.
The bottom-up method concentrating on fundamentals for target companies in a target index is the best departure point, as it provides a graded list of better-value candidates, ie companies with a solid history, solid balance sheet, earnings and return on capital giving it a record of industry leadership. But on the other hand, I do think it's important - having decided a company is a good bet historically - to take full account of future earnings in a DCF discounted cash flow, and indeed to take full account of the sector or industry which is more important really; and to go for solid leaders, inexpensively-priced and with an upward SP momentum.
A reasonable aim is a 30 to 50% premium over the next three to five years which is under normal circumstances achievable. And then having obtained most of the upside, through TSR total shareholder return (share price + dividends), sell out; or maybe keep under review if the company is still exceptional and continues to generate exceptional earnings.
But many at the moment have a lot, a third, in cash (includes gold), aiming to preserve capital more than growth, leaving some firepower for once the recession seems to be bottoming out. Of course, the best laid plans ...
Anyway, bad luck with CBG but on the other hand MONY is still on the up, just about...
In general, from all we hear and read, we must understand that banks and life insurance and financially-driven companies are a sector to avoid for the next few years as the market is now wrestling back control over the artificial economy created by the Fed with first lowering the interest rate and then buying up all the bonds the govt needed to balance its tax receipts and expenditure.
"Higher for longer" is really worrying as it threatens the bond markets and then equities, the govt budget eaten 40% by interest payments, and finally the whole system would finally collapse under the weight of debt; and so yet another QE would almost certainly kill demand for US govt debt with severe currency debasement.
So manufacturing, commodities...hard assets in the real world ...can we put the irreal aside and look here at the real?
Sunday, 15 October 2023
HAMAS V ISRAEL - WILL THE CYCLE OF VIOLENCE TRANSFER TO OUR STREETS TOO?
15 October 2023
Well this is what we were talking about before : there's no evidence of any protests in France, which is a little bit surprising considering its connections to N Africa, its substantial muslim popn, its recent history of Charlie Hebdo massacre
so maybe there are protests, it's just that they're not being reported, ie they are censored or supressed
So the question raised by your video is what will be the effect of the conflict in the Middle East on the streets of Edinburgh, Paris and London?
There is an obligation on Macron and the politicians in France to pursue policies of peace and justice - is this is what they are doing?
Britain's politicians are sending out warships to support Israel. Is this very smart?
what the politicians need is a refined sense of the practical. Practical means solutioning the problem.
Does sending warships out to support Israel solution this problem? I don't think so
At the moment, they are saying in the same breath that Israel's right to defend itself is also its right to revenge. This is madness.
Obviously with or without Britain's help, Israel can destroy most of Hama but at what price to itself - the body bags, in the eyes of the international community which is no longer just the West ;
and what will its own citizens make of what are evidently war crimes when you cut off supplies to an entire population and attempt genocide or deportation.
And anyway even if Israel does succeed in killing every last member of Hamas, what will this really achieve? Their children will grow up and fight the same fight as their fathers'. It happens every few years already. Perhaps they'll organise under a different name.
This is what happens when you do not have peace and justice.
It's the duty of politicians to serve the interests of their publics. Is Britain really serving the interests of the Brits by supporting this murderous regime and is Israel really furthering its own interests? Its primary concern is security. Does this help it along the road to a more secure Israel? Same same us in the UK. Same in France.
Hence the need for gifted politicians and diplomacy - what will force achieve if not repeat the cycle of violence?
Saturday, 14 October 2023
END OF THE ROPE FOR AMERICA IN UKRAINE
https://www.youtube.com/live/ZUtkCbQpw-0?si=CSHUwX1_b00Rk6Bt
Offset 16'45"
Primrose path - warning
As long as it takes - promise
End of the rope - America cut and run.
This is America's failure, going to be its greatest foreign policy failure
As predicted almost two years ago in this blog
Awful consequences for Europe due to its supine vassalised European leaders
Disgusting, stomach turning, terrifying for ordinary European people in its consequences
"End of the rope" means end of America's budget for aid to finance Kiev's war on Russian-speakers.
Thursday, 12 October 2023
HOW THE ISRAEL AND UKRAINIAN CONFLICTS ARE LINKED
12 October 2023
How are Ukraine and Nagorno-Karabahk linked in these twin conflicts? Consider the two levels of split opening up, both within Western societies that are splitting internally between extremists sides, and globally between nation states grouped into The West v. The Rest.
For this ME conflict, Israel is moving more clearly to the West, while the Middle East is moving to West Asia.
How to characterise the internal wars: "elite v. People"?, "neo-liberalism v. Socialism and Conservatism (traditionalists)"?
What of a global conflict (thinking America v. China). The world of nation-states is splitting between a neo-colonialist West led by Anglo-Saxons (America) v. The Rest, being those who share only a hatred or mistrust of The West.
Internal to Western societies, external in an advancing global conflict, both are dominated by warlike extremists. Moderates are forced to shut up or take sides.
So Israel moves to The West and defies the global move to power-sharing (a multi-polar world).
Zelensky is a pathetic little monster, Israel is - however you see the brokers on both side - just dragging down The West by refusing to discuss reasonable and existing solutions, so lowering our chances in the real global battle and advancing our demise.
Tuesday, 10 October 2023
HOW NAGORNO-KARABAK FITS INTO THE ISRAEL-HAMAS WAR
10 October 2023
HISTORY
GEOGRAPHY
This map shows the Caucuses. Points of interest are the Caucasian mountains that demark Russia from the Northern Caucuses and the Lessor Caucasian mountains separating Armenia from Azerbaijan. The westernmost province of Azerbaijan is called Karabakh and within it is a district called Nagorno, to give Nagorno-Karabakh.
Notice Baku, capital of Azerbaijan, as far away as you can get from Armenia on the western shore of the Caspian.
And Georgia, still south of the caucus mountains separating the caucuses from the Russian Federation, north of Armenia and Azerbaijan, with the Black Sea on the west and the Caspian on the east.
Notice also how the Caucuses have Turkey to the west Russia to the North and Iran to the south.
https://youtu.be/xums_KHP5mk?si=6hT7RzTBRCwVmRuD
The forgotten Holocaust: The Armenian massacre that inspired Hitler
Baku, capital of Azerbaijan
In 77 AD, Armenia, greater Armenia, was the first state to convert to Christianity. Though by the 16C, much of Armenia had come under Safavid, Persian, Shia-Islam, rule.
Over the centuries, Western Armenia came under Ottoman rule, while Eastern Armenia remained under Persian rule.
In the 19C, Eastern Armenia was conquered by Russia in its war with the Ottoman Empire, and thus Greater Armenia was divided between Ottoman and Russian empires.
In 1915, there was the infamous Armenian Massacre, carried out by Ottoman Turks. Historically, the usual methods used to convert populations to Islam were massacre, mass deportations, high taxes levied on people of the book, intermarriage and various discriminatory practices notably in employment.
In 1918, Armenia gained independence from the collapsed Russian czarist regime. In 1920, Armenia became a Soviet republic.
Then in 1991 and with the first N-K war in 2020, there was a great population movement and all the Christians in the east moved to Armenia, save for Nagorno; and all the Muslims in the west moved to Azerbaijan.
SITUATION TODAY
The Nagorno district was an exclave of Armenia, but now with the second of the N-K wars, Christians have moved out to Armenia altogether and the Muslims have moved in - Shia Muslims mainly.
So much conflict and religious "cleansing". Today, Azerbaijan, which is apparently about the least secular of the Muslim states - but it is Shia Islam, which to me is not really Islam at all and is certainly a lot more easygoing than the Sunnies, esp the Salafists in Arabia - and seems to have a pragmatic and quite close partnership with Israel.
The relationship is based on weapons sales and high technology, oil which Azerbaijan supplies to Israel, and security where Azerbaijan is looking for independence from both the Turks and the Persians.
Historically, it was Armenia that had the close relationship with Russia, since the Russo-Turkey war referred to above, and through the days of the USSR; but now that Armenia has let Nagorno-Karabak go, in order that the new prime minister, Vahagn Khachaturyan president since 13 March 2022, can be free of war, so as to, he hopes, join the EU and even thinks of joining NATO, apparently thinking he can do better than the fate that befell Georgia back in 2008, it is Azerbaijan that is drawing close to Russia.
As to Armenia today, of course we are talking about the Caucuses which have had centuries of conflict due to competition between Turkey, Russia and Persia. So understandable why Armenia would want out of all that, but for Armenia to become a European "exclave" or colony, would surely leave it with a host of problems with all its neighbours.
As to Azerbaijan today, we are talking about a rapprochement with Russia, its Northern neighbour, at a time when its Southern neighbour Iran is trying to patch things up with The House of Saud. Iran doesn't like this!
And to answer the point about Azerbaijan selling weapons to Ukraine, there were certainly reports and allegations suggesting that Azerbaijan was supplying weapons to Ukraine during Ukraine's conflict with Russia, but before the latest N-K war that seems to be part of drawing an independent Armenia into Europe and an Azerbaijan into Russian influence. However, the details of such transactions were not always clear, and they may have involved private arms dealers or other intermediaries rather than direct government-to-government sales. Having said that, no weapons manufacturer can sell weapons to another country without the knowledge and permission, albeit perhaps tacit, of its government.
FOOTNOTE
Although the conflict between Israel and Gaza is taking the headlines at the moment I'm going to file this for the moment under both labels Ukraine and Armenia.
Sunday, 8 October 2023
TROUBLE AT AL AQSA
8 October 2023
https://www.aljazeera.com/news/2023/10/4/israeli-settlers-storm-al-aqsa-mosque-complex-on-fifth-day-of-sukkot
What about these troubles in Pale Steen?
Bravo FT for not allowing comments on the current problem there.
After all we would not want readers expressing their majority disgust at is rail's behaviour over the last 70 yrs towards its concentrate on camp occupants ... in particular, at the behaviour of settlers who brought express desecration to the Ms' mosk, causing this bloody response in the first place.
But just a thought, instead of calling it a "surprise attack", shouldn't we really be calling it an "unprovoked invasion"?
Thursday, 5 October 2023
WHEN WILL THE FED PIVOT?
4 October 2023
Of course , America will never default on interest payments, which currently make up about 40% of tax receipts, but with a 32 trillion dollar debt and a higher for longer or even higher, there will be effects on the value of the currency ... maybe not now, but in a year or two's time
So that is one thing that would worry other sovereign governments wondering where to put their surpluses - is the dollar safe ?
another point they will think about is the illegal sanctions levied on Russia and the confiscation of its treasure. Particularly given America's a hard line attitude that if you are not with us you are against us so for example where does this leave India and how certain can China be that it's one or two trillion dollars of American government bonds will not be confiscated?.
Growth is not going to be enough to keep up interest payments without printing let alone pay down the debt. But this just means currency debasement, as I say maybe not now but within a couple of years.
To fight inflation - which doesn't in all seriousness look like it is really going away the current CPI says 3.7% but if you use volcas method it is more like 11.5% - hire interest rates are needed also to support the value of the currency and ensure that the extra billion of borrowing can be absorbed.
And yeah higher interest rates will destroy the system - higher interest rates mean higher corporate refinancing costs and lower profits, plus now we are a year nearer to the refinancing cliff than we were when the fed started raising
And higher interest rates mean credit costs to customers increase and this will cut back spending, ie lower revenues in the first place. If spending falls then firms will start to lay off workers. In fact rising unemployment is the last domino in the signals that we are entering recession.
So what is the fed to do? Surely given a choice between protecting the system or protecting the currency, it will choose the system. This would mean we are talking about the famous and long anticipated pivot - QE and rates back to zero, expand the credit supply but at the cost of still further debt. Increased credit an inflexible supply of raw materials will just provoke inflation again. And expanding the money supply for a fixed supply of inputs and goods, may restore demand, but it is like adding water to your wine it waters down the value of the currency, it debateses the currency.
No wonder governments with a surplus are selling U.S treasuries and buying gold they are moving away from financial assets and into hard assets These Are the safest in the coming crisis.
But now comes the 64-million dollar question. When will the fed start printing again? Will it be when the system shows signs of destroying itself - for example a market crash? Or will a more determined and subtle Fed let everything descend into semi-chaos before cutting rates and starting QE? Hasn't the last year or two been about the Fed bolstering its tools, in the form of higher interest rates and lower money supply, in preparation for the next (the last? Yikes!) crisis and recession?
More cynically still, more realistically perhaps, just consider the matter from the point of view of supply and demand. The supply is pretty much infinite as we have seen - the govt does not balance its budget, it just spends more and more and more, regardless of tax receipts. For this reason, the US Treasury requires 1.5 to 2 trillion dollars of extra debt every year for the foreseeable future.
The demand was from the fed itself as it was practising QE. Also the banks were major buyers - hundreds of billions - but last year both stepped away and now this left hedge funds as the major buyer. Hedge funds can use cash-settled futures contracts on US government bonds for various reasons, such as hedging their portfolio risk, speculating on interest rate movements, or gaining exposure to the bond market without owning the physical bonds extra 2%.
Next in line after the Fed, the banks and the hedge funds, come pension funds and insurance companies. These funds are conservative in outlook, and yet as was revealed last year in the UK's liability driven insurance crisis, in fact these pension funds invest in equities; while insurers go for fixed income - but corporate bonds rather than treasuries as the upside spread of maybe 2% is more than the downside risk. But after these potential buyers, who? No-one,so expect bonds to drift higher.
From the point of view of supply and demand then the supply is pretty much infinite while the demand appears to be evaporating in conclusion we can say that it will not be the fed lowering rates that determines the cost of money it will be instead the market and the direction seems to be up on yields which without fed intervention i.e restarting QE would destroy the bond market.
And yet QE results in inflation and eventually currency debasement.
Surely the Fed knows this! I strongly believe that the real and true strategy of the Fed, and it's only choice since raising rates beyond a certain point will destroy the bond Market and thus equities and financial assets and the economy itself. is to burn off the debt through inflation and currency debasement.
If you believe this then you'll believe that despite Powell's rhetoric, the Fed will have to pivot, ie print to buy up the excess govt bond issuance. So you'll want to put your money into hard assets such as precious metals and commodities and not leave it in equities, you'll want to avoid endebted or low-yield equities.
Further, you'll want to believe that in some way after burning off the debt, there will be recovery and the US will keep its top dog place!
Sunday, 1 October 2023
THE ROLE OF THE FED
30 September 2023
Easy to blame the Fed for all the financial and economic woes in America or indeed in the West. The Fed was created in 1913. Woodrow Wilson signed into law, against his better judgement. The two great rival banks, the protestant Goldman Sachs and the Jewish Rothschild, demanded with one voice, and forced him to create a Central Bank to oversee regulate and control the banking system, under threat following a number of crises, especially the crisis of 1907.
So it is clear that the Fed was created to manage the banking and monetary system and when I say "manage", in reality this would inevitably mean distorting the way the market left alone would naturally solve problems. The most recent formulation of its objectives are to control inflation, achieve full and inclusive employment, and fight climate change.
Let me explain why it may be wrong to blame the Fed, as in the links below, for the malaise in which America and Europe and Japan find themselves...
Society splits into an elite and us, the plebs.
The elite consists of those leaders of industry/military/congress who are in power;
those leaders aspiring to be (though with the exact same interests - it's just a game of musical chairs as to who actually finds themselves in government).
And then there's a counter-elite - like Trump.
Look again at this elite - the famous "power elite" that sociologist C. Wright Mills wrote about way back in 1956 - oh, and add in the permanent admin or "deep state".
This gives us the three branches of government, plus the civil service and we should add in a fourth branch of government: the Federal Reserve, not catered for in the Constitution.
This elite will never relinquish power or wealth without a huge fight, never, but what is their actual function (apart from creating money for themselves)? It is to maintain and evolve the existing system, to their constant advantage. This is governance, but also strategy and is where central planning and programming is performed.
As I see it, the elite is the central planning function, of which the Fed is the other half of the executive, they manage the national economic portfolio, under instructions.
You can't blame them alone, what they are doing is at the behest of and on behalf of the whole elite. They are after all the elite's banker.
References
https://youtu.be/2ISKbYFaqnk?si=vFsaa0HnGfkxXL9z
https://youtu.be/RBjlWkzdyi8?si=40PpJT2LM-rt-uP9
https://youtu.be/CYIp6rp2rqA?si=hKKYM2C06Q9IjH10
Saturday, 30 September 2023
DEBUNKING SOCIAL ISSUES
30 September 2023
https://www.telegraph.co.uk/news/2023/09/30/black-lives-matter-hysteria-made-fools-of-us-all/
Well I for one and all the people I know were not at all taken in by the BLM.
We understand perfectly well that on the major questions of the day, there's little difference between the two parties and so all we have to distinguish them are one or two social points, mainly turning around Woke, political correctness, this BLM, inclusivity, identity politics, even LGBT+++ ...
They are the crumbs off the table of political programs, MSM, chat shows etc that the electors and citizenry are left to fight over.
Come on, let's get real about this, we aren't all fools! Try reading Thomas Sowell or find him on Youtube. Or Paul Ryan does an excellent job tracking this back to the 1960s civil rights movement. Or try Roger Scruton (decd 2020), "Frauds of the left". They easily debunk all this nonsense and show
the real harm it is doing.
Confidence in the state and our mediocre politicians is in decline and the more cynical amongst us see this identity politics as just a divide and rule tactic, because the politicians know very well that they cannot control the decline and pretty soon the public will be coming for them, not at the ballot box but in the streets. The real issue is inequality and the fourth turning is a time for radical remaking.
Wednesday, 27 September 2023
UKRAINE AND THE LIKELY WAY OUT
27 September 2023
To better understand this conflict and the adversary:
A MERCANTILIST WAR
This is a mercantilist war, America's object is to capture the resources of Russia, it will save America from ruin - ruin brought upon itself by debt.
The strategy has always been escalation, going way back to 2014, 2008 and before....like cooking the frog in the pot, or softly softly catch ye monkey.
ESCALATION
"Escalation" means first pushing Nato up to Russia's border, getting Russia to fight, and now more and more Nato (esp. Anglo-Saxon) support to Kiev.
Which leads to thinking Russia should react more strongly, fight off these attacks before it finds itself to weak to fight back, and winds up cooked like the frog in the pot.
Because if Russia doesn't react more strongly then America will cook it and eat it all up - energy, food, minerals, take and sell - and save its empire from self-ruination.
Let's get real, this has been the story of America from the get-go, from its civil war. It's the story of all empires - fight your way to the top and exploit your empire to the max.
DIAGNOSIS
https://www.youtube.com/live/VLRm-5QHMpY?si=kvHg_RMl7z3I_iEJ
Pretty good summary insight into reality, for those willing to listen!
https://youtu.be/qs2J1KoDbzM?si=1pvkTLgk5Yyz1Vbl
If you think that Geography is Destiny:
https://youtu.be/c1u495VZ4hM?si=meLbJbe2TFe6Refw
WAY OUT
We have changed all the top brass at the Ukrainian MoD, now we must get shot of Zelensky and maybe the Kievian Stepan Bandera regime, and "hold elections" to install a moderate govt willing to understand where Russia is coming from and unwilling to see Poland and Romania on the front line, or even avoid the use of atomic weapons ( which don't seem to disturb some in Washington, it's ok as Europe is far away).
https://www.newstatesman.com/world/europe/ukraine/2023/01/ukraine-stepan-bandera-nationalist
PROGNOSIS
Some Western supporters of Russia, or rather some commentators based in The West and critical of their govts' stances on the war, fear a lack of the will to transform Western foreign policy, or alternatively - and I cannot understand this - fear a defeat for Russia.
That's a bleak picture. To understand why, just consider quite how far America has abused and over-reached
1. A Long War has always been the American aim in the belief that it's far stronger economy will eventually exhaust Russia's.
2. Russia's quest is for security along its Western frontier, from Finland forest through the Baltic Sea, to the Baltic states, the Suwalki Gap, Belarus Ukraine the Carpathian mountains Moldova, and Crimea, and round past the Black Sea and Istanbul, into the Caucasian mountains and finish at the Caspian Sea.
That is quite a bit of natural frontier to defend. Behind these natural defences sweeps the Russian steppes as far as the Urals in the East. Flat featureless lands, difficult to defend - a feature which incidentally explains how the Rus were able to take over and assimilate many different peoples into the Russian Federation, and indeed why Russia is such a big country in the first place.
Given its history of being invaded - over 50 times in the last 1,000 years of the history of the Rus, including twice by Sweden, Napoleon and Hitler we know about, even Canada had a go - it is legitimate to ask "has Russia always been expansionist, aggressively building empires, be they czarist or Soviet?".
Or is it that Russia a defensive land power ('mother earth'), trying to defend its resources (little-ones) from the voracious Western sea-powers, who are after its mineral, energy and food wealth?
3. Because how a commentator on this war views America's "Ukraine First" foreign policy principle (which seems to favour far flung peoples and places over America's own home-grown citizens), will be coloyred by whether they see Russia as in a defensive posture and seeking to contain its military budget, as a fraction of GDP, ie low threat to the Wet.
America's foreign policy is unaccountable to American voters at the ballot box. It is a constant across both Republican and Democrat parties. As is much of govt policy. Voters are left with trivial issues like Woke, political correctness, some lifestyle issues, to vote on.
The elite (America's military-industrial-congressional complex) has a deep and constant commitment to remaining top dog and eliminating all competitors, in the name of spreading democracy and human rights, it is how it exploits its empire (as do all empires of course).
4. So short of America getting a sound thrashing - by Russia? by China? by Europe?! - I cannot see how a Ukraine First policy could ever be changed. It is not even about Ukraine - it could be Polish or Romanian soldiers on the front line - it is all about America and America's position as world hegemon - and no empire has ever gone down without a fight except possibly the British who handed over to their Anglo-Saxon cousins.
5. I don't see a lot of evidence that CIA or Pentagon targeting and Ukrainian artillery will succeed in decimating Russia in Crimea. Maybe even the opposite as the recent story of the destruction of Russian Admiralty HQ and killing of the Russian Admiral, by six Scalp missiles, has turned out to be another Ukrainian farce. Plus as fast as America escalates up the range of missiles, Russia develops counter-measures; and in a war of artillery, and in an artillery war Russia has the advantage.
6. Russia's Achilles heel and also what makes this war existential for Russia is Crimea. The Kerch bridge is not so important except symbolically. The head-of-the-line Russian ship sunk at the start, the Moskova would not happen today.
Compared to the Russian army, Nato is a paper tiger - 50,000 men currently ready to fight, not 300; manufacturing of performant and reliable specialised components for military assets outsourced to supply chains that end up in China; in a real continental confrontation a dependence on energy only found in Russia; warehouses but no equipment, they are empty, leaving Nato with a "sample army"; economies crippled by their own govts' sanctions, and so wracked by inflation that rising interest rates will push them into recession and unsustainable monetary expansion; trade moving off the dollar reserve currency and into "shadow" fleets and "shadow" insurers.
Of Ukraine's remaining ten million males, after emigrations, war casualties and land expropriations, how many can and will fight?
It is a disaster for the West, America's greatest disaster, possibly its last. Europe needs to sever the dependence.
7. So probability is that Kiev will have to take Russian terms or dissappear off the world map; though if Poland or Romania or nuclear enter the theatre of war, this would mean rescheduling Kiev's defeat.
