Monday, 3 July 2023

WHAT IS WRONG WITH THE UK ECONOMY - PT 1

What concerns ordinary people, and therefore politicians, about the economy at the moment is inflation and mortgage interest rates. What they want in general is financial stability, economic growth and social peace.

While governments dream up tax and spend programs, central banks are supposed to keep the economy ship-shape as concerns stable prices for consumers, employment and productivity for producers, and currency exchange rate and reserves for traders.

The opposite of financial stability is breakneck change. Decades of excessive govt, commercial and private sector debt, has been achieved by tremebdously cheap money and vast increases in the money supply. These spending sprees have devalued our currency, heated up inflation, central banks have responded by shrinking credit availability and raising rates at speeds never before seen.

We cannot expect economic growth when the factors of production like supply, wages and taxes, go up; while demand falls. Plus poor productivity from underinvestment, high divi payouts with too much defensive industry, and not enough learning  innovation and technology. Plus housing is way too expensive compared to wages so excessive investment in bricks misallocates capital.

And finally, peace on the streets depends on equality, equality in the distribution of assets which seems to be 95-5%; and the shareout of profits between capital and labour.

If those goals can be shared and agreed, if the problems and requirements can be addressed with strategies that are seen to be fair, then we might have a bit less conflict, a bit more pride, frugality and hard work, and then maybe more harmony in our society and less greed and anger.

We need serious programs from serious politicians and competent central banks.

Saturday, 1 July 2023

RUSSIA CLEANS UP AFTER THE COMMUNISTS

1 July 2023


https://youtu.be/Ddc1ix_9MII

At tremendously high speed, this guy Max Blumenthal sums up just about every crit made of Biden's war on Russia.

But is anyone listening?

The military industrial gov elite are visibly corrupt and self serving, but the electorate seem to be jaded and accepting. 

There are countless videos and articles on the decline of infrastructure in the USA, of the poverty in USA cities, homelessness, drugs, crime. How tough life is for millions and millions of americans at the bottom. 

But no attempt to resolve this. Hard to get your head round.....what kind of country do Americans dream of?

I am no Russophile, no Americophile either. I am objective, but cannot be impartial when I see the mess America has made of its turn to be topdog.

After a decade where Yeltsin began to switch from a planned to a market economy, all that Russia had created was a land of misery, weakness, oligarchs and drunks. Russia was no longer a communist state but neither was it capitalist.

Whatever we may read in the western press, Putin and the Russian leadership have restored the economy, the military and Russian strength and pride.

The proof is Russia redressing the post war, post soviet imbalance, same as after Versailles. Our leadership has only mismanaged its vast resources and wasted its opportunities. To mix metaphors, after throwing away a winning hand, they just keep digging.

Mismanagement, greed, corruption: bywords for the American Order (we say Order to be PC-sensitive, but it's an empire, from a historic point of view).

WEATHER IN BALI

1 July 2023

Bali is year-round warm and humid, as it's a tropical island just south of the equator. Ubud is inland and very green and a bit cooler at night, around 29°C and for me 20° as A/c is on ha ha.

Higher up or further North you go, the cooler it gets. Kintamani, Mount Batur, climbing the Campuhan Ridge before sunrise...all ok (I don't walk in the dark, nay nay). This morning, I was halfway up the Ridge, it was around half six, what I thought was a mist thickened up into a pasting and I walked carefully back through cords of water to my bedsit.

Streets and buildings suffer from the humudity and rain, paths and pavements are uncertain at the best of weathers, so no need to risk wet slippery surfaces. ... the local lady in that Cautionary Tale was most unwise.... hospitals here have special rates for tourists.

Summer and autumn is the dry season and the busiest; otherwise winter and spring are wet. Normally at least. 

Monsoon is supposedly Nov to April. I can remember on 1 Oct 2022 I left Bali on the first day of the monsoon. Ditto 27 Sep 2019. 

Best months are April, October and November. 
Rainiest December, January and Feb, with Jan the wettest.
May is the hottest.
August is the driest and coolest.

WHERE ARE THOSE OF GOOD FAITH?

01 July 2023

Over half of Ukrainians have lost on average three members of their family or friends dead in this conflict. Dead.

Ukraine will never in the distant forseeable future ever join neither NATO nor the EU.

The Ukrainian army is being finished off and the govt in Kiev will likely succumb to a popular vote and be replaced by one more willing to recognise the "rights" of its Russian citizenship and the benefits of neutrality.

Ukraine has lost a proportion of its population of ordinary Ukrainians, a lot of infrastructure, Crimea and Donbas. The longer the conflict persists, the less of these three things will remain. Ukraine may lose all access to the Black Sea and four more oblasts, while the west may join Poland and the Baltics.

Not only will neither side accept defeat in this proxy war, but imho imposing a defeat would certainly provoke a nuclear retaliation. This war is composed of a series of escalating steps with no currently visible "off ramp" and as there's no way to eliminate second-strike capability, that means gradual escalation will lead eventually to nuclear oblivion.

Surely there must be some adults who can take charge and lead the belligerents to a place for mutual understanding, facesaving and sensible talks?

Kennedy and Kruschev defused their threat of mutually assured destruction by removing nuclear missiles from Turkey and Cuba, so that neither superpower had nuclear weapons close to the other’s strategic command centres.

While it is startling to discover that there is no negotiation currently taking place between the two sides, at least Russia is communicating its nuclear strategy, intentions and capabilities. That could be the foundation for negotiation, a new security frame work for Europe (which includes 80% of the Russian population), China and America and if not multilateral disarmament, at least fresh progress towards the doctrine of no first use. 

Now, though, it is much more difficult to trust the governments in Kiev and Washington.  President Biden's intention to weaken Russia by funding and fueling the regime in Kiev has failed, sanctions have failed, Russia is proving to be much more capable than expected, and both Europe and the US are out of materiel, while Russia is prepared for a long war and increased the logistics of its conventional and nuclear weapons systems.

There are no Kennedys or Kruschevs on the scene today. The West's leadership should be, was, the world's leadership but has in my opinion very clearly failed, many argue its time has come. It proves itself not fit to manage this or any of the catastrophes it has created for the world. The alternative to overthrow of the existing American Order is reform of its rules and institutions. We want one rule of international law and one set of inclusive institutions accountable to its membership. While the UK is lost to America's neocon army, could France and Germany, or India and Turkey, open lines of communication?

Friday, 30 June 2023

NABEN - A BALINESE HINDU COLLECTIVE FUNERAL

30 June 2023



You have to attend and talk to local people before you can understand what otherwise seem to be bizarre local customs and rituals at a Hindu Bali funeral, called a "naben".

Cremation is believed to drive off evil spirits linked to greed or excessive desire, allowing the person a second chance following his or her rebirth. It is a purification of the soul.

However, I am told that the cost of an elaborate cremation ceremony in this country is too high for an individual family to bear alone.. 


And so grieving families must wait for a large number of people to pass away (this is all true) and then they share the costs at a collective cremation.

So what about the bodies while they are waiting, piling up somewhere?


So here's the strange part... If a person dies, they're buried first, buried in the ground. Over time, the numbers of dead and buried build up and a year later, sometimes as long as five years later, the bones are dug up and burnt at this collective cremation ceremony called a Naben.


Yesterday's naben concerned fifty local people who had died these last two years. One was a member of the king's family, so following the rules of the caste system, he received a luxury funeral and was kept separate from the ordinary castes. His pyre has nine levels, as you can see in the photo, which are ordinal points on the compass that attest to his high birth and assist his navigation to the next world.


Someone asked me what the attendees do at a naben - "do they just sit around?".

As it's only the long-buried bones, there's really not much to disagree with at this ceremony governed as it is by ancient ritual, evolved and tested over time; but if it's a freshly dead person there's the flesh as well which bubbles and squeaks as the air and grease is burnt out, an experience for those present that even elaborate ritual cannot easily calm and dignify.

On this occasion yesterday, along with the bones of the elderly long-time buried and exhumed, there was a 17 year old boy killed just last week, in a scooter accident most likely. The family had kept the body of the boy in their home, temporarily preserved in formalin. 

They use a gas burner, as in any crematorium, and the pyre is as much for display as those electric log fires. One of the organisers keeps the decorative border watered to keep up the appearance and stop the flames from spreading.

Wailing or any dramatic scenes of grief are not permitted by the etiquette because this would be to question the god's calling time on one of his faithful followers. It is the same for many beliefs.

The body of this boy took a long time to be reduced to ashes, the hissing and spitting of the fire accompanied the sadness and tears of his stricken parents, family and school chums. Each comforts themself alone, head bowed quietly in hands.

COMMENT

Horrific and quite touching all at the same time. I had some bacon in the pan behind me as I read this. It was hissing and spitting. I think it will go to the doggy this morning.

Thursday, 29 June 2023

REVIEW OF LEGAL AND GENERAL LGEN

29 June 2023

Can anyone reading this post answer this query - I am not qualified in this area.

My holding is twice my target position size. I should have sold part at 280p+, but foolishly skipped my own precepts on diversification (15% of my dividefensive portfolio, should be 7%).

Comforted by the yield: 8.5% - payout ratio: 50% - cash payout: 6%.
9 on last 10 yrs of divi increases at 5% on ave increase every yr for last 5 yrs. The recent post covid average yield has been about 7.5% and as it's currently at 8.5%, it implies that the share price is depressed as people buy legal and general for the Divi.

Patiently waiting 280-300 band, in ? 2-3 yrs time?

The worry is the debt pile, and exposure to rising int rates and the property market, debt is over 6 times equity, this ratio up by a half these last 5 yrs, once is already enough.
But debt is a qtr of cash flow and interest is covered 14 times by EBIT.
For every basis pt rise in interest rates, how much does this shave off EPS? I don't know but I should do as this is clearly the driver of the precipitous falls in the share price.

EPS this yr: 36p, next yr: 41p, divi is: 20p. ROCE is pretty much zero, 0....not good.

According to my grand dividend strategy and investment process, which is very difficult to implement I have to admit!, I look first for companies with earnings from outside the UK, then I look for diversification across sectors and the business cycle, and then within a sector I look for the best future return on my investment.

Lastly, I try to get the timing right which is your question Alex using a bit of technical analysis ("a bit" is all I have at the moment). LGEN is currently 7.06% under its 50-day simple moving average, prices stay below this which suggests a short term bearish trend and 6.62% under the 200 DMA, same conclusion for the longer term. The RSI at 44.4 is weakly bearish.
So looks like we're in a lateral Trend the transaction volumes are half what they usually are and so I would say it is as safe to buy as it is to sell, but hold is best for the longer term ie once we get over this inflation / interest rate mountain...if....

All that sounds very grand, but making it work is a bit of a nightmare!! Fundamentally it's a really sound company going through a bad patch at the moment with its exposure to interest rate hikes which I think is much overdone in legal and Generals case.
TA is good at the moment of decision, if you're a trader (not me).
Sentiment as I say is depressed as is the economy seemingly in stagflation and seemingly heading into a recession.
It's not great but LGEN does have underappreciated defensive qualities... does anyone have any better ideas?


All opinion and advice welcome.

WAS PRIGO ALONE, WHAT HAPPENS NEXT?

28 June2023


Prigozhin is an emotional Russian, possibly even bipolar, possibly full of political ambition, possibly wanting to see the Russian defence minister and the chief of staff replaced possibly by himself over a disagreement a concerning strategy in Bahkmout.

Russia entered Ukraine back in Feb March last year and succeeded in bringing Zelinsky to the table. Heads of Chapter were agreed and para'ed, but 28 March America intervened at the behest of Biden and unfortunately for the world scuppered this peace settlement.

The Russians then embarked on a military strategy to obtain security on their border with objectives of eliminating the army and regime in Kiev with a war plan of attrition.

The centrepiece since February this year in this battle of attrition has been "operation meat grinder" in the former Bahkmout, a necessarily slow strategy of attrition. The Ministry fed Prigozhin insufficient munitions for a quick victory, since the Ministry was not intending this, which meant for Progorzin what he saw as the unecessary loss of life of his own men.

After months of rant and insubordination, Prigozhin took the route to Moscow to meet  Shoigu and Gerasimov, Minister of Defense and Army Chief, with a view to taking over.  Against his expectations, there was no support for his insurrection - none of the institutions, no leaders, not his own officers.

Bakhmout lies west of the defense lines that Russia has been building since October last year. This meant a contradiction in the plan for Bahkmout, where Pregozin intended taking the town, whereas the Ministry of Defense was only interested in using Bahkmout as a trap to grind down the Ukrainian Army. 

Proof of this lies the result, that when Prigozin moved out, left he left a town without the earthworks necessary to defend it and vulnerable to attacks on its flanks. 

To compensate these weaknesses, the Ministry of Defense had to rapidly move in troops from other frontline positions such as Malinka, in order to defend the new acquisition.

In reponse to Prigorzin's insubordination, seen as threatening politically, Putin moved in the police. To avoid bloodshed and a possible semblance to Russia's allies of civil conflict, Putin spared Prigozhin's life on condition he accept exile in Belarus. Prigozhin and maybe 5 to 8,000 of his solders have flown to Belarus.

I don't see that this weakened Putin, it might have strengthened him since the State maintained order throughout the episode. Putin found a way to defuse the threat without surprising onlooking allies, and through lack of any support, neither from Prigorzin's own generals, nor within the civil or military society at large, it was over within 24 hours.




26 July 2023

The Wagner group, as a mercenary force, offers various services to govt.s around the world.

It offers protection to a third country's elite, or even gets them into power, for example in Mali, where it helped a new regime to power in a coup in exchange for certain for mining rights. It then extracts the metal, usually gold ore, and sends it back to Russia where it is processed and added to Russia's treasury.


Or again, it appears that the Wagner group might currently be contracted out to the Belarus government to ensure that Poland does not encroach into Western Ukraine.

Incidentally, over time, Russia has built up a sizeable reserve in gold, underpinning its currency. So, since the start of the SMO, as they call it, let us compare FX pairs RUB/USD and RUB/EUR. The euro declined as much as 20% against the dollar, though it is now on about 10% down; while the ruble has appreciated by six or seven percent to the dollar.


Indeed, the three hour meeting Putin held with Prigorzin and his leadership might indicate an ongoing role for the Wagner group, being a group of mercenaries ( every country has its mercenaries often from Switzerland) still has a role to play and it seems unlikely, despite the words that it will be fully integrated into the Russian high command, that it will cease to exist as a semi-independent force and thus power base for Prigorzin.


Wednesday, 28 June 2023

WHY DID PRIGO MARCH ON MOSCOW

28 June 2023

https://www.youtube.com/live/0OAKfQri1Vk?feature=share

So Prigo was a plant, a dble agent, played to distract Ukrainian intelligence at a time when Russia was exposed in the course of making troop movements. 

The CIA apparently and Biden contacted the Kremlin to reassure America was not involved. Something Putin never accused America of in the first place.

The man wearing my grandmother's curtains says Prigo is a dangle.

Personally, if I had to offer an explanation, I would say that Prigo was suffering from traumatic stress and was deeply angered by the military command withholding supplies of Munitions that resulted in what he saw as the unnecessary deaths of his men. 

Finally after several months of this feeling that he was being used by the military, he rebelled and set off to unseat them.

And it's probably true that HQ was withholding Munitions in order that Prigo could not make too much progress 

because the idea was to let the Ukrainians flow into the Bahkmout trap and kill them and had he, Prigo, cleaned out the enemy troops from Bahkmout too quickly and effectively - as he could have done, with sufficient supplies - that would have meant fewer Ukrainian casualties. 

Bearing in mind the object of the exercise is to annihilate the Ukrainian Army and the Kievian leadership.

With the goal of a disarmed and neutral Ukrainian "rump state", or its total absorption into S W Russia and Eastern Poland.

Tuesday, 27 June 2023

A CAUTIONARY TALE

27 June 2023
It never rains, then it pours!
(A cautionary tale.)

                    Resi Cave, WONOGIRI

Just lost Marc, my French friend who ran a bar with his localborn wife. Lost my friend and colleague James a couple of months back too. And Alex, another great guy on the  Residents' Committee where I live. My friend's mother is another. 

Just this year.
Dear oh dear oh dear!!!


An elderly friend of a friend of mine decided one day to visit a cave on a bus tour, organised by a club she belongs to.

This lady is a healthy, reasonably fit 76 year old. She does pilates-for-pensioners once a week.

Still, she's a bit frail - 76 ! - and the lighting in the cave was not adequate and the path underfoot was uncertain.

My friend's friend slipped and fell. She broke one leg at the level of the hip, the other leg at the ankle.

Now she is in hospital about to have the first of possibly several surgical operations. It is hoped she will make a full recovery within six months. In the meantime, she is bed-ridden.

What do you think will happen next?

She is a cheerful, optimistic, sociable, confident little lady. Even a bit adventurous! 

She went into this adventure without checking the risks ... what might go wrong and how to manage the potential threats. Turned out bats and guano were the least of her worries.

         “Beware! Beware! The Forest of Sin!

         None come out, but many go in!”


Not to say "don't run any risks, especially when you're old", just saying "look before you leap" ... she can do what she wants, enjoy her life, but identify the risks alongside the desires and take action to reduce them beforehand.

===Letter of sympathy to the older sister of the lady who fell.

Dear Madam,

 I can imagine Mrs. Kus [the name of the lady who fell over] who is usually agile will have to take an enforced rest for a while.

We are all sad, we share your sadness, but no one could have foretold this preordained disaster.

Thank goodness that at least Mrs. Kus is in the best possible care.

I remember how you always advised that older people should take especial care to avoid situations where they might fall.

I remember very well your  oft-repeated caution about the need to be careful.

But no matter what has happened, all we can do now is to accept the fates reserved to us  and adapt to our destiny.

Sunday, 25 June 2023

MOSCOW HAS NOT BEEN SACKED

24 June 2023

Putin has always treated Prigozhin like a wayward kid brother and now lets him off the hook and slink away to Belarus, a less well structured state where he Prigozhin could do real damage - Belarus is almost as important to Russian security as Ukraine.

In a Western democracy, Prigozhin would be under lock and key by now.

Imagine if Prigozhin had reached Moscow and begun looting. Reminds me of those few hundred crusaders who got into Constantinople and sacked it before being beaten away. Or the military who challenged de Gaulle back in 1962 over his decision to liberate Algeria.

People are pointing out how weak Russia is north of Ukraine and a push by Ukraine would give a Kievian army access to the M4 motorway and Moscow, as had Wagner. Well, many have gone in (over 50 invasions, helps understand Russian security concerns), Napoleon the best known, the Germans tried it, history is that few have come out in one piece, so Kiev en route to Moscow is a bit fanciful ... but increasing surprises in the world today ... I'd not have imagined Moscow would let Prigozhin get this far, it sows doubts about the governance of Russia frankly.

===

A coup attempt - to denounce and decry as a coup would be a classic tactic of Putin's enemies. But attempted coup it was, though Prigozhin has denied trying to topple the govt, saying he had wanted to object to a decision to disband his militia as well as demonstrate the weakness of Russia’s domestic defences.

This was an increasingly vitrioloc attack by a battlefield commander (more on that later) on his generals sitting back in HQ. Yevgeny Prigozhin considers he was deliberately undersupplied with munitions by envious armchair generals. 

From what I can understand, Prigozhin was deliberately slowed down in this military operation named by Russia named Operation Meat Grinder (sic - Russian military gave this  name, or adopted it) because the idea was that the Ukrainians would file into the Bahkmout trap and be annihilated - the longer they filed in the better for this strategy of attrition.

But of course the longer the strategy went on the more of Prigozhin's soldiers were sacrificed. There is one famous video of him standing in front of the bodies of 94 of his men killed he says because they did not have munitions in sufficient quantities to defend themselves.

On the one hand, you can argue that this is proof that Putin is not a dictator; but what is worrying is Putin's slack treatment of this insubordination, as though Prigozhin were a wayward kid brother. His whole approach to the war has been to try and spare the suffering, to spare the lives of his troops and also civilian lives in Ukraine.

So putting all this together, we get the impression of a rather too political or soft leadership - Putin has even let Prigozhin off the hook, aswhere we would have put him in gaol, as he is now off to Belarus where he may cause more trouble again.

While the pro-Russian chattering classes on telegram etc all rally round Putin, including Putin's harshest critics, we do come away with the worrisome impression that Putin is not fully in charge, not fully in control - this is worrisome to his people, but also to his allies. 

===

Strange that Ukraine's offensive and Prigordzin's coup both coincided and both required Russian weakness if they were to succeed.

Prigozhin has a massive energy behind a massive ego. This rant of his has been building since February.  Russian authorities allowed all that and seemingly didn't see the trek up the M4 coming. The Russians are so confident they didn't imagine others would perceive weakness.

The attempt failed because Prigozhin had no support and the authorities mobilised quickly to put it down without bloodshed.

So it shows how solid is Russia's present political system, but it also demonstrates a strength of democracy, that opposition can flow through institutional channels and not butt against them.

My memory of this short-lived rebellion will be Putin's speech comparing this with 1917 - must be said seemed a bit panicky.

===

It was in CNN 2 weeks beforehand... but of course no one in Russia reads the Western press, not for a moment.

What I would like to know is who organised this? Because Prigozhin, a figurehead, lacking military qualifications, relying on his generals, couldn't have done it on his own

But his generals didn't support him.

So he must have had outside help.

And yet no one in Russian Society supported him either.

So where did that help come from, I wonder... not that I'm paranoid or a conspiracist

We need Seymour Hersch on the trail.

Seems everyone knew what was going on except of course Putin

And that includes Prigozhin, aware he had no support, neither within Wagner, nor within Russian society ... if true what was he thinking about? What was he doing this for? Well, now he has given his explanation.

Friday, 23 June 2023

HEALTH AND WELLNESS

23 June 2023

On a different subject from the focus on war, here is a nicely written article on a subject of personal interest, and demographics means emerging global interest too.


https://thebalisun.com/health-and-wellness-becomes-top-tourism-priority-for-bali/

P