It’s January. The nights are long, and it is cold, and rainy. It’s about this time of year that they always run the articles abut Blue Monday when it’s the most miserable time of the year, because we are done with the Christmas debauchery and it still doesn’t feel light even though the Sun is rising earlier. They are still wittering about the economically inactive. The BBC have at least identified there’s not much chance of getting you FI/RE lot to do your patriotic duty for the economy.
Almost nobody who has retired early says they want to return to work.
A new year, new start
I am old enough to have determined new years resolutions don’t work. I don’t do gyms anyway, but the best way to avoid that sort of resolution is not to pig out to excess extendedly. It’s OK to eat and drink to excess a couple of times in the Christmas period, but debauchery and gluttony are to be avoided in excess.
One thing I am experimenting with is to reduce screens/online. Interesting that Weenie is taking up jigsawing to go in this direction, is it a zeitgeist thing or great minds…
I have already taken step through the end of last year to reduce news consumption. I still remain informed, it’s the time/attention thief I am trying to reduce, rather than to do the full Walden Pond thing. One way is to to act more like it were 1998 on dial-up. As long ago as work I got a win on this with email by not running it all the time, once in the morning and once in the mid-afternoon. I have forgotten what office-worker’s guru put me onto that but it worked. For a wider win I aim to concentrate interwebs in bursts, like it were before the Millennium. GenZ has taken this battle to the enemy with customary panache, at the cost of never clocking off. I wonder if that Zuckerberg isn’t barking up the wrong tree trying to create the metaverse. It’s already here, just unevenly distributed. Poor old Zuck he’s pushing forty, and his younger self called the problem out
Young people are just smarter
I get to listen to a lot more music. Which is more reflective than using t’internet, although when I stream it is from a NAS rather than the likes of Spotify or Apple. I did consider using Tidal but I still can’t bring myself to do subscriptions. It is possible to buy downloads from Qobuz but it’s usually cheaper to get the CD s/h. I listen to music through the electric, instead of on their phones.
In her Happiness Project book Gretchen Rubin said that the days are long but the years are short, and so it has seemed for this year, a lot happened. There has been much noise and hum in 2022. It has been a collection of unforced errors in leadership, not just in the UK though we punched above our weight in mouth-breathing incompetence. I have a suspicion that we are getting the foothills of peak oil and the decline in living standards one would expect from that – the world is getting a larger place again, it is not so much slowbalisation as degobalisation of many things.
Capitalism hates resilience with a vengeance, driving it out across the board in the name of efficiency, but there is an assumed precondition of low geopolitical and natural volatility. 2022 was not the lifestyle that capitalism ordered in the Goldilocks period.
As a general rule resilience is inversely proportional to complexity and decreases with time. In the 1960s British houses had coal bunkers and didn’t depend on Russian gas (and if they did use gas it was coal gas locally produced). Before we get too dewy-eyed people only heated one room, and an open fire drew a hoolie through the single-glazed sash windows so everywhere else was freezing. People had bronchitis all the time – I haven’t had bronchitis since I was a student 😉 But they had the edge on resilience.
I await with interest if the power cuts happen in the first two weeks of January which seem to be the highest risk. Will our towns fill with zombies when they can’t plug into the social media hive mind with their smartphones. Smartphones are not resilient, and the base stations are good for an hour or so without power. It is of course a logical conclusion that the Internet will always be there despite its overweening complexity, so we don’t need to bother with broadcasting after 2030. Yet another piece resilience from a distant analogue world gets its marching orders, pah, who needs it…
In Britain the crew that delivered Brexit seems to have problems unleashing the heady promises of Britannia Unchained, with an exceptional rush of blood to the head in October that raised the price of people’s mortgages.
Everybody is grousing about energy prices. I am not sure all this can be laid at Putin’s door. Optimists will say that the solution to high energy prices is high energy prices, and perhaps this will capitalise the Energiewende that should have happened a few years ago.
In some ways that’s true – UK consumers have reduced their power consumption by 10-15%. Mind you, we also have a Warm Spaces network… I’m not saying that in itself is a bad thing, but it’s a symptom of a bad thing.
I investigated power drain in August, when all this was being floated. Being a cynical cost-focused running-dog I observe all the green crap is loaded on electricity, so I ignored space heating entirely and targeted electrical power drain, on the grounds I don’t want to subsidise other people’s insulation any more than I have to. I was able to reduce electricity usage by about a third, which is worth having, and the results are now in, and they are sustainable –
power drain over the year
It wasn’t cost-free – I had to shut down some test equipment, replace the CCTV DVR and ice several static loads and consolidate many others. I have probably saved about £180 due to that activity so far, so I am still short because the capex was more. But unless power costs dramatically less soon I will probably break even over the next year.
I am on the list for a stake in a windfarm to defray electricity usage. This is progressing at a snails pace – strategy not tactics. To take it up I will need to get a smart meter and probably join Octopus. I have many reservations about smart meters, not only can They remotely cut you off with a clickety-clack at a remote NOC, as opposed to sending hairy-arsed grunts out to gain entry and pull the main service fuse, but there is the general surveillance and control aspect of it all, which is a feature of smart anything. Ida Auken’s Welcome to a 2030, I own nothing post of renting everything is a pointer of where that leads. It’s not hard to deduce when you go out from a 30min sample of your power usage, and experience has generally shown that the best way to keep your data secure is not to transmit it to third parties every half hour.
However, smart metering is probably an inherent requirement for power systems with a high proportion of renewables, along with the implied big stick of load shedding, which is terrifically easy to implement using smart meters, both in the we will cut this area off to save the rest, or perhaps encourager les autres as well as the more subtle we will only allocate you x kWh per day. Quite a gift to hostile state hackers, too.
It was precisely to avoid the smart meter that I implemented this solution myself, and efergy does of course send the data over the network, as well as being more ratty than I would like. But you don’t have to say who you are, or rather cleave to the truth in the same way as Boris Johnson does. Data snoopers can infer your district from the GeoIP range but not much closer than that. And efergy can’t cut me off 😉
A smart electricity network that can constructively use renewables with minimum storage will be a remarkable achievement. It will be much more complex that what we had. It will be far more hackable because of the larger attack surface, It will, probably be more efficient. But in no earthly way will it be be more reliable. I expect to see far more outages and also power restrictions, where your smart meter says you can only use x kWh today else we will cut high loads off.
This was the year the stock market died, but we Brits didn’t notice because our money died faster than the stock market – 10% off on the start of the year relative to the USD, and a similar amount to gold. So while I can compare January’s iWeb statement with today’s and conclude I am 3% down in marked to market that is actually ~13% down when measured in Real Things of Value Not GBP, like gold or US dollars. Personally I go meh to that, I don’t have steam coming from my ears like American index investors who are looking at this.
Performance of the S&P500 year to date, along with the associated dire headlines
I have been selling gold in the ISA and buying shares through this year, largely VWRL, and rebuying the gold in a GIA. Vanguard tell me in this year’s ISA I have £20366, a whopping 3.25% rate of return. Less, of course 10%, so no cigar. This is from starting to top this up in May once I had cleared out all last year’s Vanguard ISA into HL. Talking of which
When is VWRL not VWRL? When you transfer it to Hargreaves Lansdown in specie
Nobody gets fired for buying VWRL. It’s a boring index stock from a boring index provider. I hold a lot of it, largely on the back of this article. I am not a good little passive index investor, you can see that in my sick purchasing mode on Vanguard which is not regular in any way.
VWRL purchasing this ISA year
I managed to make a minor profit on this in GBP over the year, because I also vary the amount purchased as well as the time of purchase, I buy more if it is lower, so while it looks like I am a rotten shot the weighting helped me, I am very slightly up on VWRL for the year. I had to stop in October because I am all out of ammo, I have spaffed my £20k ISA allowance.
I transferred last year’s load of this this to HL. In specie, because that’s the whole point of accumulating in Vanguard (no transaction fees, but percentage platform fees) and dumping to HL (usurous £12 transaction fees, but a capped cost of carry at £45 if you eschew funds). You don’t currently pay either party to transfer in-specie, which means say to HL transfer my holding of x VWRL into HL from Vanguard as shares.
But you’d like x to turn up as VWRL, no? I was first warmed up to a strange smell when I opened the HL ISA, the cash came through first I think and I decided I wanted to buy VWRL. For some reason I couldn’t do that, computer said no. I could only buy VWRD or VHYL. Indeedably has a whole post about why VHYL is a terrible idea. However, since I was doing this after the meltdown of SMT I figured a value tilt wasn’t so bad, so I did it anyway. Although I haven’t drawn from any ISA yet, when I do I would hate to sell units to get cash.
It was a slight niggle, WTF is with this, how can they not sell me this common as muck ETF? Really? Monevator has many posts by Lars saying pretty much just go buy VWRL regularly and then do something else with your time. VWRL is USD 8.9billion AUM. I don’t know if that’s US Bn or British Billion, but it doesn’t really matter. World + Dog owns this, in spades. HL should have seen that ETF before 😉
I observe my transfer shows up as VWRD, and leave it be. Many freebie listings show the dollar variant of an ETF because there are more American investors than Brits. Time passes I then get this missive from the HL corporation
We’re getting in touch about your holding(s) in the investments listed below. The type of investment(s) you hold are non-GBP and as we only settle investments in GBP we’ve made the decision to no longer offer this type of investment. However, as there is a GBP denominated version of this investment, you will still be able to purchase and hold investments in this security.
What this means for non-GBP investments
You can continue to hold the investment and sell at any time but from 28 October you cannot buy any more units. Any further purchases will need to be made into the equivalent GBP version. We’ve listed your investments below and, on the right, you’ll see the equivalent GBP version of the stock.
If you don’t want to hold the non-GBP stock you can sell your holding at any time as normal but if you wish to make further purchases, you’ll need to transfer to another provider. We don’t want to encourage our clients to move investments from our platform, but we understand if this is the right choice for you. If you choose to sell, normal dealing charges apply, and you’ll need to consider any loss or gains you’ve made on the stock since buying it.
And I think to myself WTF is this line you are feeding me? I bought this stock from Vanguard in GBP, quoted in GBP. This is your bad, Mr HL, not mine. Over the years I have bought £75k worth of it in iWeb with nary a hitch. I don’t want to pay £11.95 twice plus the turn to rectify your balls-up. There was a price discrepancy and I considered for a moment whether this would be in my favour enough to be worth the turn but came to the conclusion that Thoreau was right, a man is rich in the number of things he can leave alone.
All I wanted was the same as I bought from Vanguard, what part of in-specie transfer do you not understand, HL? So I send them a secure message along the general lines of sort your shit out, guys, with a screenshot of what Vanguard sell me this as., along with the PDF from Vanguard. In all fairness, HL did rectify it, at no cost to me, though the reason for the balls-up is arcane
Both the VWRL denominated line and the VWRD denominated line have the same ISIN but a different SEDOL. As your transfer came through electronically, it seems the system pulled through the wrong SEDOL.
We have now amended your 107 Vanguard Fund plc shares that was transferred to our management from the VWRD denominated line to the VWRL denominated and you should see the correct line of stock reflected in your HL Stocks & Shares ISA.
Which broadly looks like a mea culpa on their part. I didn’t expect to have grief with a big world tracker ETF. Not only that, but they can’t guarantee it won’t happen again when I rinse, repeat in April, so I have to send them another secure message ‘Oi, VWRL coming your way again, that’s VWRL not VWRD, geddit?’
a year when it was time to pay the dues
All in all a messy year, and very seriously shit for many, sadly. One where a lot of chickens seem to be coming home to roost, and a lot of untruths seems to be revealed. Some charlatans were defenestrated, while channeling the Terminator. We discovered that supply-side economics works terribly well if you don’t need to convince other people to lend you money to do the easy tax-cutting part before the hard cost-cutting part. Unfortunately that wasn’t an option for Liz Truss and everybody’s mortgage went up by the moron premium. She probably still believes she was right. Maniacs always do.
All you FIRE lot are causing fear and loathing due to the increasing exit of over 50s from the workplace. It seems to be confuzzling TPTB. I really don’t understand why the Big Cheeses don’t get it. Hell, the ONS managed to identify this pull-quote
I no longer had any job satisfaction, and felt physically and mentally exhausted, with many stress-related physical manifestations
Well, yes. For the last thirty years, companies have been making the world of work for stressful, more shit and more penny-pinching. Is it really such a surprise that people give this the middle finger at the earliest opportunity? I was that guy, and nothing I have heard about the world of corporate work has told me this has gotten better. Unless you are in the C-suite, in which case you are doing absolutely fine.
Normally we would have regarded this loss of our old gits as a great opportunity for our young pups to move up a rung or two, but that has no meaning in a gig economy. You’re going to have to pay people more or actually invest in your businesses, UK firms, arguably this is a wider issue. Perhaps returning to the time-honoured tradition of actually training people, rather than endlessly whining that you can’t buy your skills requirements off the shelf might be an idea?
There seems to be a hellacious level of long-term sickness in the UK if it is really 2.5M of working age. Perhaps that’s what you get from a laissez-faire approach to the food industry – I walk along whole aisles of supermarkets not recognizing the products as the category ‘food’, particularly along the snacks and family packs of crisps. Its also somewhat to be expected as a large rump of the population gets older. Talking of health
2022 is also probably the year the NHS died. Unsurprisingly it’s the Tories wot dunnit, though an ageing population, Brexit and Covid are accessories to the crime. In their current headless chicken mode there is not enough leadership to plot a route forward. Let us hope it is the European insurance model rather than the pathological American model that is chosen. In the meantime basically don’t get ill. Which is not an entirely peaceable thought – both of my parents had health issues at my age.
Here’s to a better 2023. Here’s hoping for less stupid crap and fewer unforced errors. No more Bozza, though my crystal ball says that is probably in our future, a man of the people despite being a lying bastard incapable of complying with his own laws FFS. One last roll of the dice. On the plus side, the American market is a lot better value now. It can, of course, continue to get better value, but at some time the worm will turn. I survived OK on the markets, and have firepower to go. The accumulated value throws off a useful enough amount, though my plans of using the 2k tax-free dividend allowance will need to reduce in ambition next year, I am £1350 of the way there, which will be OTT after April.
In other areas I want to know more about the part of the world I live in. I want to walk more in it. I joined iNaturalist so I can make more sense of what I see here, and not just the birds. I am getting old – I was tickled by this woman’s ambition to walk all the footpaths near her home. Sure, it’s fundamentally pointless in a way, but it’s curiously in the moment.
The Ermine household ventured to Weston-Super-Mare, where the Mendip Hills surrender to the sea in the Bristol Channel. There was a free public spectacle, part of the Festival UK scratch that, Festival of Brexit no, it’s definitely not called that, Unboxed 2022. Sounds like the sort of thing that people do on YouTube when they get a new gadget, but it’s all about mind-blowing creativity happening now across the UK
Ceci n’est pas une pipe. This is not a Festival of Brexit
Round these parts the mind-blowing creativity is a whacking great big oil rig on the beach. It’s one of the more accessible of the exhibits. The Ermine is on the philistine end of the spectrum when it comes to the arts. Not as far as reaching for a Browning when I hear culture, but not a luvvie. I was middle-aged before Mrs Ermine educated me that you don’t qualify art by whether you like it but whether it makes you see the world in a different way. It’s always easy to carp on arts funding, but I will leave that to others
I’m not sure that it made me see the world in a different arty way, but I certainly saw WSM in a different way physically – some of the faded grandeur of the beachfront hotels from a height.
Weston-Super-Mare faded Victorian grandeur from 30m. Unboxed saved me the price of a camera drone
I’ve never had the opportunity to be on an oil rig before – it was surprisingly small. They didn’t have the workers’ accommodation or much of the functional plant. I was trying to place the guys from Tabitha Lasley’s book Sea State on it. Even getting a helicopter onto the helipad must be a serious challenge in high winds. I got a useful amount of exercise climbing 30m of steps, but I missed the entire renewables theme, I had to look at Wikipedia to get that. Even the seemonster website left me confuzzled.
the garden. You will be pleasantly surprised that the plants will be moved to community projects ratherthan binned. I thought they could use some water
Weston-Super-Mare has seen better days, like so many British seaside town. If you are in the area, go north to Clevedon for a classier experience, or south to Burnham-on-Sea for a less tacky experience on a smaller scale. WSM hosted Banksy’s Dismaland in 2015, so it has form on public arts projects. As far as bringing money into the town, that’s a maybe. It certainly gives employment – they have people everywhere on all levels because I would imagine the temptation for kids to climb over the guards rails could be a bit much, the water this thing stands in is only three feet deep, not enough to break a fall from 30m. And we did have a full English of industrial sausages, white fried bread and instant coffee at a local caff, because sometimes you have to rough it. You can get a better breakfast in Clevedon and Burnham-on-sea, though whatever you do don’t carry on to Bridgwater, because the guys building Hinkley Point power station need good honest grub at low prices, rather than poncey ‘elf food and the town is set up for that.
An echo out of time, before Covid and the Brexit dividend showed its face
Once upon a time, four years and three prime ministers ago, a Remainer who didn’t really believe in Brexit proposed an arty celebration of all things British, to be funded with the lolly on the side of the bus we were going to save leaving the EU. There was going to be so much the NHS wouldn’t need it all.
conceived once upon a time, before the cake was a lie
To be fair, that was Theresa May in Oct 2018 so nobody had heard of Covid-19 She called it Festival UK, but the temptation was always there to rename it as a Festival of Brexit, and Jakey boy took the opportunity to change the label, despite asserting we have to wait half a century to see the economic benefits. Put the champers and the festival on the National Debt, then, JR-M, or on the tax rises? The varmint is from Somerset though thankfully not my local MP.
See Monster from the beach
There was something dismal about a Remainer trying to implement Brexit, in the end if you are going to implement a car crash you really need someone who is going to put the pedal to the metal and go out with a bang rather than try to survive the experience. Think Vanishing Point rather than The Italian Job, so well done Bozza for Getting Brexit Done. Covid gave you enough time to pretend the fail wasn’t too much Brexit but that’s starting to wear a little bit thin now. Well done you on making it not your problem now, mate.
Brexit seems to have a voracious appetite for Tory PMs, chowing down four and countin’. Couldn’t happen to a nicer bunch of people. You can get Brexit Done but you’ll never make Brexit Work Well until you learn to talk civilly with our nearest neighbours, even if you don’t want to be in their club, I curse you and the horse you rode in on always offends.
As for our talents at striking dynamic alternative trade deals, there seems a lack of bovine reciprocity in the Aussie-UK trade deal brokers by Liz Truss – as in importing Aussie beef is dandy but importing British beef is still verboten Down Under. They must’ve cracked a few tinnies on getting that past La Truss. The Aussies keep the Ashes then, and it’s about time Britain learned that negotiating against self-inflicted deadlines gives the other side the upper hand. Them 2 Us Nil if you add in the Article 50 fracas. There’s a whole field of Game Theory, and even Harvard geeks yattering on about BATNA but, well, experts, schmexperts, we don’t need no steeking expertise round here, eh, Mikey? Cynics might say it shows, Gove my boy, sure shows…
Curious how selecting True Believers seems to have selected against Basic Competence. Still, we have a couple of years of tax rises and spending cuts to look forward to as a lovely Brexit dividend. Paris is now the largest European stock market by capitalisation as London fades. Just as well that the major age group that voted for it don’t need to earn a living any more, eh? Curious how Truss and Crazy Kwazy missed the most obvious way to get a bit more growth, selling more shit to rich neighbours. Even the rabidly Brexity Daily Express is flying a kite for better dialogue under the guise of monstering Nicola Sturgeon
Instead of Boris Johnson’s “oven-ready deal”, Rishi Sunak’s Government could “consider a much more softer version of Brexit – for example joining the Single Market.
“If they did that, a lot of the powerful messages for an independence referendum would go out of the way, or would be reduced.”
I do wonder if the subeditor who allowed this heresy through has actually thought what that implies for the desires of their more rabidly xenophobic readership cohort. They could do well to remind themselves of what the single market is. Maybe they feel more strongly about the Union than not hearing Polish spoken on the High Street? The power of analytical thought is not strong in Brexity cakeists.
the cake is a lie
Still, we did our bit for this echo from a distant world, before the uneaten cake/eaten cake wavefunction had collapsed into the cake is a lie, and the Festival of Brexit the Great Unboxing was celebrating the success of the idea of the cake still existing after it had been eaten. Original attendance numbers for the whole shebang were projected at 66 million. The outcome is somewhat lower at about a quarter mill. Some bugger’s quaffing all the champagne as per Jake R-M’s edict, but it wasn’t us, guv.
Googly eyes. Mebbe See Monster’s quaffed all the champers. Let’s hope the guerilla sand artists didn’t drive there and heat their homes with wood rather than nasty fossil fuels, eh?
See Monster is only open for five more days until the 20 November 2022, but you can see a VR tour on the website. FWIW I did appreciate not being charged, and even the bogs were free.
One thing you must not do, BTW, is swim in the sea in Weston. I don’t indulge, personally, but Mrs Ermine did on a previous occasion. And got to wonder why there was a smell of shit after getting out. Well, before Liz Truss ruined the UK economy even more by starving it of money, she ruined the Environment Agency by starving it of money. Fortunately everyone was OK apart from having to run boil wash afterwards. But the shit in the sea can apparently get up your arse and put you in hospital. You wouldn’t want to do that, because a different part of the Tory party has been starving the NHS of money in the hope of selling bits off.
Shit in the water seems to be a widespread problem. I tried paddleboarding in the summer, in the Avon. I am a weak swimmer, but drowning wasn’t the problem. It had been raining a couple of days before, which apparently is when the shit gets into the river when the rainwater overtops the capacity of the sewers. I fell in, as you do as a tyro. After a couple of days I felt sick, achey and weak to the exent of only being able to crawl to the head. After about three days of that it went away, so I got off a lot more lightly than the 22 year old swimmer. But I am going to avoid open water in the UK in future, because I didn’t realize that sort of thing could put you in hospital, I thought it would just give you bellyache and the shits if you were unlucky. I never liked swimming that much anyway…
For some light relief as to the recent theatrics, let’s take stock. There seem to be several things not going entirely as expected or planned, and they are a little bit more than down to the antics of one man. Even if his name is Vladimir Putin…
I was listening to a couple of punters bemoaning the energy crisis and saying that the Government really should do something about this, to which the obvious question is, how do they go about doing that?
Energy is pretty much about oil and gas at this stage. You may not like that very much, but let’s start with where we are. If you look at a list of oil producers in the world, the top five in 2021 are the US, Russia, Saudi Arabia, and Iraq, in that order. The first three are the big hitters, responsible for about 30 billion barrels a day, and Russia and the US are about neck and neck at ~10bbl/day. Slightly ominously, they say of the top three “since 2014 all three have been producing near their peak rates of 9 to 11 million barrels per day” and Russia and Saudi are the top exporters. We have decided to stand with Ukraine, so that’s the second largest exporter we have declared persona non grata.
What do we use for energy? Fossil fuels, bar the shouting…
the UK energy mix. Don’t be fooled – despite the whacking great three pin pug symbol, I read this as total energy usage, not that used to generate electricity, of which more later
If you look at the UK’s energy mix, it is three-quarters oil and natural gas combined, in about equal portions. So even if we did have a disciplined functioning government that hadn’t had enough of experts, there’s a serious limit to what can be done. I’m not taking an opinion here about the virtue of standing with Ukraine – history does show that it is sometimes necessary to tolerate privation in the interests of a wider goal, but if you want to know why energy costs are rising, well removing a large source of supply for what is basically an imported product will tend to push the price up.
Vlad the bad has played a good hand
I’m not a Putinversteher, IMO he’s is a psychopathic nutcase who is mad a box of frogs, just not randomly mad. He’s sitting on a massive resource that people want – gas and oil, and our Vlad has spent most of his life understanding power. If you are going to have enemies, it pays not to underestimate them. Sure, Putin and/or his military ballsed up some of the initial parts of their invasion, but they seem to be learning from their mistakes. I am not saying this is a good thing in the round, but it is good for Putin and his aims. Putin is right in one respect, in that the much vaunted Western sanctions are a weapon that fires on both ends. In raising the price of energy by restricting sources of supply, Putin doesn’t have to sell as much to raise the same revenue. Well done us. Perhaps there was no other way, but strangulating his cash base only works if the West was like it was before the Millennium, a much larger part of the world economy. The world is multipolar now. Sanctions may have other effects in the longer run, but it’s not a quick win, and energy prices will be higher for a fair while as a direct result. It is interesting that 50 years ago this was predicted. Not in the Nostradamus sense of
Two great men yet brothers not make the north united stand
Its power be seen to grow, and fear possess the eastern lands
which is just as well, because the West is short of great men, we seem to be scraping the barrel of late. More in the sense of Asimov’s Foundation, with the role of the Second Foundation played by the 50 year old Club of Rome Limits to Growth crew. A couple of recent updates comparing the track we are on shows the future not being terribly rosy even with everybody’s high-tech dreams coming good.
LtG World3 model, with lots of technology (left) and business as usual (right). From Graham Turner on the Cusp of Global Collapse
on the left is the high-tech dreams of Wired magazine – even with that industrial output doesn’t continue rising on the trend of up to now. If we look at extracted resources specifically
LtG World3 model, comparing actual results with model results with lots of technology (CT) (top) and business as usual (bottom). There’s some support in the observed model for the comprehensive tech track relative to BAU, so that’s collapse averted, eh, but growth still ain’t going to carry on as before.
there is some evidence we are more high-tech than BAU. So that’s all right then? Well, Gaya Herrington tells us a little bit about the world your children will be growing up in
CT represents the technologist’s belief in humanity’s ability to innovate out of environmental constraints. It assumes unprecedented technological innovation in a world that otherwise does not change its priorities much. The new technologies do in fact help avoid an outright collapse. However, CT still depicts some declines (Figure 3) because the technology costs become so high that not enough resources are left for agricultural production and health and education services.
There was a nice little radio play about the preparation of the original model, still on BBC sounds
Back to our dictator, who is perhaps a symptom how the LtG model is playing out. Like Asimov’s psychohistory, they did not claim to foresee the individual track the future plays out, just the broad sweep of history rattling in the channel of the available resources. The resource curse means that petro-states tend to be unsavoury, and in the past perhaps we could afford to be precious about our values. These days there is more realism, yes Saudi Arabia did most likely top that Khashoggi bloke but we want their oil so perhaps we need to STFU about that sort of thing.
Putin has willing customers for his oil, which is more transportable than gas due to its value by volume. India seems to taking up a fair amount of Russian oil and China will take some of the gas off Putin’s hands. The leverage of gas is very high because of the same thing – it’s hard to reroute supply for producer and consumer alike. Germany has made itself exceptionally exposed to Russian supplies through Ostpolitik, combined with a historical anti-nuclear stance.
Atomkraft Nein Danke – that’ll cost ya
There’s a cost to Atomkraft, Nein Danke, and the bill has just landed on the doormat with a Cyrillic stamp that says hefty fee to pay, our product our rules. It’s understandable for the country that anticipated invasion through the Fulda Gap for years to try and play nice with the big bad bear, but there’s a cost to singing Kumbaya like that, in the end you get to rely on Russian gas. As the old saying goes “When you have them by the balls, hearts and minds will follow”. It could be a long winter, and Germany is already rationing gas.
Before we think stupid Germans, I suspect we will see energy rationing this winter. Germany has relatively deep pockets and will drive up the price of gas from other sources. You just can’t knock out a leading supplier of energy and carry on as normal. Italy seems quite exposed too, so perhaps we will see another Euro crisis. I don’t know how Greece will fare…
The Ermine as a nipper can remember Britain before central heating became widespread in the 1970s. Insulate Britain is wrong – British houses in the 1960s were far less insulated than now, they were draughty and often heated with coal fires, which needed a decent airflow from outside to get enough draw. People generally heated only one room – the one with the fire in it. If you wanted to heat another room you got to do that with open bar electric fires, or the sort you wouldn’t be allowed to even think of now. A mustelid kit learned something interesting about the power of electricity with a screwdriver and one of those.
People got cold. Ice would appear on the inside of the single glazed window panes. People survived. They used coats, jumpers, blankets, tea and hot water bottles. That is how we will deal with less energy. We aren’t going to ponce about insulating the bejesus out of homes that serviceably sheltered earlier, hardier generations and were never designed for insulation. They worked OK then. They will serve people again.
I stopped working for The Man ten years ago, at the end of June. I spent my last working day in the Athlete’s Village in the 2012 Olympics. It was a little bit odd to end my career working off-site, but I had a little bit of annual leave to use up. I did return the The Firm at lunchtime at the end of June for a valedictory round of drinks at a local pub and a send-off, and that was it, three decades of working life came to an end. It was a good way to finish off, on a high as the last manager said. I look at the pictures and they are good, though I see the signs of three years of the stress and the effects of drinking too much to dull the pain.
Not many FI/RE people are still writing after a decade, so here are a few takeaways from the ride. It has been against the background of a long bull run that is only just fading, as the firehose of central bank interventions begins to surrender to the irresistible force of the accumulated pathologies stoked with it.
I did not get bored
Honestly, I still can’t understand why bright young fellows like Monevator still link to cruft like this. Seriously, if work is the best thing you can think of to do with your limited time on Earth, then you need to get out more and get some hinterland in your life. Preferably half a lifetime ago, but now is better than never. I am sure that for 1 or 2% of people their profession is their one true passion. They tend to be outliers, often psychopaths like Elon Musk, or Mark Zuckerberg, and that passion tends to be unbalanced. That leaves over 90% of us who can probably do more congenial things with our time than working, if only we could solve the conundrum of dreadful things happening in our lives if the flow of income from our jobs were to stop. You know, like losing your home or your kids starving, that’s the sort of thing that keeps most of us working past the point that the Do What You Love, Love What You do meme has transmogrified into Suck it Up, Our Way or the Highway. Solving that is what financial independence is about, but too many people end up with Stockholm syndrome with work. The Escape Artist summed up the problem. Don’t just load the gun. Pull the trigger.
The world is plenty interesting enough to reward an inquiring mind and an inquisitive snout. Learning new stuff has never been cheaper or easier, though it pays to remain critical as there is also much more misinformation about. In many areas of factual learning, favour books over online, and I personally almost always favour the written word over video1.
I got less hard-line about working than my younger self, who was running away from a crap situation. But the key takeaway is still the same. Don’t rely on income from work after you have become FI. Save it, spend it on champagne and caviar, but never, ever, set up your life so you depend upon it again. Otherwise you are no longer financially independent. This severely limits what the financially independent can safely do with the proceeds of work.
Spending FI/RE earnings on lobster is OK. You can live well without lobster, but perhaps better with.
Breaking that rule is fair enough if you opted for thin-FI/RE and came to the conclusion you don’t want to live that way – financial independence is not worth more than anything else, and if you want to live high on the hog, or live in London, or send your kids to private school, then you are probably not going to be financially independent as early as someone who can eschew some of that and drink prosecco rather than Dom Perignon.
The Ermine made a rare visit to London recently, to see the World of Stonehenge exhibition at the British Museum. The exhibition is striking enough – not so much about the specifics of Stonehenge but about the development of the Neolithic world-view in North-western Europe, insofar as we can determine.
Part of the trouble with Stonehenge is that it is very clearly there, after forty-five centuries, but there is no story associated. That is the enigmatic appeal of prehistory. "Every age gets the Stonehenge it deserves — or desires"1 This exhibition tries to fill in some of the blanks, with analogy, with a general timeline meandering through the exhibition sequence.
The ticketing roster packs ’em in, and while it’s not explicitly prohibited to go back, it’s hard and discouraged. So if you want to admire Seahenge, the wooden circle with upturned tree trunk in the centre, do it as you pass the first time,
Because else you will be going against the tide of visitors for a long time. There’s a certain prelapsarian hint to the narrative, peaceful cooperation in the the early days, and remarkable evidence of quite long-distance communication and exchange of ideas as styles. Technology remains simple, there is a certain beauty in the collections of stone axe-heads.
Stone axesa polissoir – how you sharpen your stone axesEvidence of remarkable craft skill in gold
Until the advent of iron in metal working, and then this happens
Overall good stuff and worth the £20 a head cost of admission, if a teeny bit rushed 😉
Strange and fractious times on the markets. Not enough of a hammering to be a crash, but perhaps some of the froth is coming off the top. As it happens I have a significant amount of capital I want to invest. Looking at the sturm und drang on UK share forums, looks like there were many folk balls-deep in Tech, but out in the real world it seems a bit of a meh so far. Of which more later.
What’s a fellow to do, eh? Time to take advantage of a bright winter day to look at some ancient stones near Avebury. As soon as we came past the main stone circle we saw that World + Dog was out. It probably wasn’t the wisest thing to go on a Sunday, after all part of the point of being a retiree is that you avoid the times when others are using the great outdoors. You need other people to make a music concert work, or presumably a football match, and arguably being in a restaurant on your own is a little bit lonesome, but the outdoors is generally best enjoyed with you and yours. The Ermine household switched to the wider landscape and visited Devil’s Den, a dolmen I haven’t seen up to now. We had it largely to ourselves, and very fine it was, too.
We parked at Gravel Hill car park and walked down to it. It was a bright day, and you could see the dolmen from above, there is a permissive footpath to the site. You are aware of old money and the Norman pattern of land ownership in the UK as you pass the horseyculture gallops, but looking at the map the National Trust is making inroads into the estate 😉 In theory National cycle path 403 and 45 would take me from Marlborough where there is a campsite to Avebury, but I only have a road bike, and it’s not clear to me whether the NCN cycle tracks need something more hardy.
Andy Haldane, Bank of England chief economist at the time, said that the economy was like a coiled spring, ready to leap into action after the Covid crisis. He’s now off to head up the RSA after 32 years.
An Ermine is left scratching his head and wondering what the backstory is here. Did Haldane always have a hankering for the arts, and his mastery of the metaphor made him wonder if the grey garb of the professional economist was beginning to chafe? Did he pitch for a promotion and get blanked? There’s also the admiration for a fellow up to working for more than three decades, clearly the FI/RE mantra speaks less to him that say one of the mustelid species, or Monevator’s TA.
Coiled Spring
When they reopen, pubs and restaurants could see a boom because of the Joni Mitchell effect: you don’t know what you’ve got till it’s gone.
It’s a fair cop, guv. Kicked off early last week with a full English Breakfast at one place which was mighty fine, and we repeated the exercise today, apparently they are overbooked for Sunday lunch so we needed to clear off by 11:20, which was fine, it doesn’t take an hour to eat breakfast! They’ve had to ring round to drum up staff, with the added incentive of free drinks at the end of the shift. However, it helps that the weather is reminiscent of that in lockdown 1 last year, a light breeze and sunshine. Their problem is that it’s all up to the vagaries of the weather – people aren’t going to want to sit outside in the rain, more typical of April weather in the UK.
Missing Claw
A couple of days after the first breakfast we sought out lobster on the beach, now that it’s open season on them.
We were out of luck, perhaps the cafe doesn’t want to carry the capital risk to having too much of a wasting asset. I can see their point, so we slummed it with fish and chips instead.
However, we did see evidence of lobster being eaten by one of the other patrons. After such hedonism a wander up to the top of the hill and look out over the surprisingly blue sea. It is still a surprise to me. I am used to the coastline of East Anglia bordering on the North Sea, where the sea is shallow and easily churned up so it always looks like dirty dishwater.
In some parts of the Dorset coast it’s clear enough you can see your feet in the water, though I leave that sort of thing to Mrs Ermine. I’d always thought blue seas are a Mediterranean sort of thing.
Eating out is a slightly odd experience. Many people find it difficult being around others now, I am not sure I noticed a change. Perhaps I never melded with the mosh-pit in the first place. However, here’s a sound I haven’t heard for an awful long time, humanity in its garrulous exuberance.
As I was waiting for the bill I was trying to work out exactly what it was that disturbed me about the King Charles spaniel at another table. Obviously that a dog was in an eatery, but after a while I sussed it. This craven mutt had no lower canines. Not a gap where the original ones had been, just no pointy eyeteeth in the lower jaw, all incisors. No damn self-respect.
The markets are not the economy
Despite the Joni Mitchell effect, the coiled spring may not have much substance behind it in the medium term. Unless you’re in your twenties you shouldn’t really eat something and chips more than once a week, so you’re not going to eat a year’s worth of missed meals out in three months. As that Investor’s Chronicle article observed, much is in suspended animation at the moment, and jobs will be lost as the rubble hits the ground. On the flipside, capitalism turned out a lot more resilient in the face of the challenge than we expected this time last year. As evidenced in the markets. After settling down the frenzy of the first part of last year, I’ve been buying FTSE250 since mid last year, because sometimes you have to stake a claim on what you don’t believe in.
That has done well, but I suspect that some of the hurt is being felt more in the unlisted small firms, the tiddlers. Oddly enough I was looking out for this on the drive down to the south coast, and I didn’t really see much that was shuttered, more was shouting that it was open than usual1. Most of the pubs looked okay, it’s not like the drive through Dorset was like driving through the Welsh valleys, where the mark of Thatcher still blights the land three generations on. The worst part was coming back through Yeovil, but that’s a town that always looks like hope came to die. Enough boarded up shops, but I couldn’t remember if these were places that had been boarded up two years ago. Yeovil is that sort of place…
It’s hard to see where the markets are now. However, after the last post where the sentiment seemed to be that I am not representing the bond value of my DB pension adequately using the HMRC scale factor of ~20, perhaps I am overly defensive at the mo. It did lead me to ask the question of whether I really should hold getting on for twice my erstwhile salary as cash. I am not at the widows and orphans end of the risk profile scale. This mustelid fears inflation. It doesn’t have to be in equities, but it shouldn’t be so much in cash…
Hard to know what to use this year’s ISA allowance for, though. Perhaps a little more gold, and then there’s the Lars doctrine, nobody ever got fired for buying VWRL. Indeed, Lars’ latest has an indirect bollocking for those in cash because they fear the stock markets
If you feel the minimal-risk asset’s interest rate does not give you enough return in your simple two-product portfolio – and you’re willing to take more risk – I’d say maybe take that risk in the equity markets. At least that keeps things simple.
The non-equity part of the portfolio is bonds, which in my case is the DB pension. If I am undervaluing the bond component by using the HMRC multiplier of 20, then perhaps I can shift some into equities. Shame they are up in the sky… I missed this point about the State Pension shifting the needle on the dial in the more bonds department.
Since it appears that Vanguard’s ISA is a flexible ISA, I can ground my Charles Stanley and move it to Vanguard. What I will do is first open Vanguard with this year’s ISA allowance, and buy VWRL or the fund equivalent on the same day as selling out the similar fund in Charles Stanley. Which will reduce market risk. I haven’t yet worked out if Vanguard’s ISA will only hold Vanguard’s products. I normally transfer ISAs in specie which gets round that problem.
Perhaps the markets are expecting a massive post-pandemic boom. Personally I wouldn’t be surprised to see another lockdown as Autumn turns to Winter – yes vaccination is giving us breathing space, but the enemy is adapting too. Maybe capitalism has the resilience to adapt and profit from the new normal, though it seems to be doing so by throwing an increasing part of the workforce under the bus. That tends to have undesirable side-effects. There are cheerleaders for the concept of the Roaring Twenties, let’s hope that Kondratieff was wrong, because that didn’t end well on the last turn of the arc 100 years ago. Now is the winter of the fifth Kondratieff wave, let us hope that winter holds a spring…
There’s sample bias here, since if you’re the Abbotsbury Swannery you have 20 billboards advertising for the masses to bring their ickle children for a perfect family day out, whereas if your eatery is closed you can get away with a single ‘closed’ sign on the door. However, I was looking out for the latter ↩
In the midst of winter, I found there was, within me, an invincible summer.
Albert Camus, Return to Tipasa
Ah, so much to celebrate, the joy of victory over the EUSSR, we’ve already had the Godwinian cheering in the Express about the clusterf*ck that the EU have made of their vaccine procurement compared to Blighty. They seem positively delusional falling back on the idea we are risk mavens. This is a revolver with 100 chambers and a bullet up against everyone’s heads. You can take a lot of risk if you are up against that. I would say hats off to the UK response in one area, vaccination seems to be a stand-out on the success side.
But seriously, fellow-citizens, WW2 is 90 years ago, and if we are still looking at our place in the world through that prism then perhaps we should ask ourselves why we haven’t done much of note since then? Dean Acheson observed there was a problem in 1962. Still, we are busy looking to give away a bit of that hard-won sovereignty in joining the Asia-Pacific CPTPP. Eh what?
It is just as well that we have sorted our shit out with the vaccine procurement. Because we have made such a hellacious mess of just about everything else to do with coronavirus that vaccination is our only hope. Unlike NZ’s 25 deaths to Covid, or Japan’s 5000 on a population twice our size, getting on for 100,000 people down is well up in the pack, but not in a good way. I’ve still never heard a good explanation for how the world-beating track and trace system, staffed by expensive mates of Boris and the finest management consultants £12bn can buy, hasn’t been disbanded and the £12bn given to councils. Or a conclave of mustelids for all the good it’s done. I know wingnuts don’t really like local government, but they couldn’t do a worse job that dear Dido. Take a look at her CV, and its clear track record of understanding healthcare, or even just, like, success in anything. I know scum floats to the top, but normally all it does is make things unsightly, rather than contributing to a higher death rate through culpable incompetence.
Despite all that, I would say round one to perfidious Albion. When Michael Gove starts looking like the adult in the room, you know you’re on the wrong track. Well done the EU. Just for the record, two massive EU cock-ups don’t make the massive perma-cock-up of Brexit a terrifically good idea IMO, but that train has left the station.
Fans of Sweden’s outstanding success in saying boo to the Covid19 goose and aficionados of the Great Barrington Declaration, I am going to shoot any comment promoting that sort of claptrap. Why is this? I know someone in London. The tests failed to qualify her as Covid, but the symptoms meant her doctors conclude it is. Not so long ago, if you were that ill, you would be in a hospital, but London seems to no longer have capacity, they have virtual wards, where doctors check up on you by phone. Well, except on Sundays. So the nutjobs that post pictures of empty hospital corridors to social media and CRGs and Desmond Swayzes of this world, piss off. This shit is real and it does happen. Those corridors are empty for the same reason as the Nightingale hospitals are empty – because we don’t have enough boots on the ground to staff them, so you focus your scarce resources on what you can do. And is seems London is on a sticky wicket in terms of capacity. It’s got lots of hospital buildings, but buildings alone doesn’t do much.
Still, things can only get better. Damn, that was the other lot. And twenty years ago.
Investing opportunities
Ah Covid and Brexit, the Bash Street Kids – super skill, Maximum chaos! The Ermine has been investing a little into the FTSE250 from about halfway through last year. On the grounds that people have hated the UK ever since 2016, and the sector’s taken a lot of punishment. On the principle that history doesn’t repeat itself but it rhymes, perhaps there will be a roaring Twenties. No, I can’t believe it either, but sometimes you have to invest in what you don’t believe in. I have got out of the FTSE100, because I now use VWRL for a general index, and the pandemic highlighted that the FTSE is quite sectorally concentrated1, and with some clapped out companies too. I also still have most of my original high yield portfolio. Ah, yield, that was soooo last decade, dahlink. So if I want more big fish, VWRL will do, because that’s what market cap weighting does for you.
Whereas everybody knows that the UK midcaps has been hammered by Brexit, will be hammered by Brexit, and if it isn’t hammered by Brexit it’ll be hammered by Covid. What’s not to like – well pretty much everything. Apart from the price…
It seems to have been on a roll showing a decent 10% lift since I started last year, in the Charles Stanley account where I use the L&G FTSE250 ex investment trusts fund. I figure I have enough investment trusts .
If you compare the FTSE250 ex IT with the same inc IT you see a possible case made for the virtues of active management 😉
maybe active management works – the actively invested ITs seem to lift performance
but there’s not much in it over the period I have invested. And I am going into this chasing a particularly troubled sector with poor prospects, though I’m glad I bought a most before that mad lift at the end of last year. Are these the Lamontian green shoots of recovery?
Where was the last time I heard that? Way back in 1991, when I was freezing in the first house I daftly bought, and I had been paying 15% mortgage interest. You gotta watch those buggers, you need deep pockets to take cheer at the green shoots stage. Still, there’s lots of money flying around to make it happen. Bozza told the Torygraph that the £350m p.w. promise on his bus was a dreadful underestimate
So let’s be seeing some of that then, Vote Leave. It’s delivery time and the Kingdom is in its hour of need. Remainers have been purged, pissed upon from a great height and ground into dust. The Govester was even able to be magnanimous in victory over the EU NI Border cock-up. And their vaccine cock-up.
I can see jingoism is going to be the main dish of the day for the next decade if not my lifetime. The time will no doubt come when the boot is on the other foot, and we didn’t get a month out of the gate before the UK-EU relationship turned fractious. Since Brexit fans are on a roll at the moment how’s about delivering some of that £350m a week into getting a working track and trace system? You’ve spaffed £12bn on getting Dido Harding and Deloitte to balls it up royally, so sack the lot of them and start again with a clean slate and £50m a day. Let’s be seeing some action, then, boys, and P.D.Q. It’s time to make good on the promise of those sunlit uplands. Let’s see the plucky li’l FTSE250 pull ahead of the behemoths in VWRL 😉
Even more bizarrely, the sectoral concentration seems to go in waves. It was all banks in 2009, it’s all oil and mining ↩
Every time one of these FIRE-ees announces their return to work, I think of another soldier falling to cannon-fire amid the thinning ranks of a Napoleonic line.
I am one of the old guard, I have passed the FI/RE event horizon, and it seems the chimera of reappearance from RE of some folk caused a disturbance in the Force. It’s time to start rolling the cannons to the front line and fight for the noble cause. For the record:
I am not working a few hours a week because:
FI/RE didn’t work out and I am skint
2020 has been kind to me in net worth terms. Quicken extract, marked to market as of now, excl house and DB pension capital. Liabilities are borrowing wedge from a credit card on some deal, usually 0% on spending, Suckout is bridging a house purchase.
The step-changes at the end, while clear, aren’t important, they are one-off windfalls. You really shouldn’t charge around shorting stocks in a pandemic, Do Not Sell but if you are going to sell, double down and short. Still, if Monevator can ‘fess up to a bit of non-passive jiggery-pokery, well, so can I. The first lift in 2019 is not investing win, it was a dialled down PCLS and not all of the lift in 2020 was shorting – a lot was simply the market roaring back. We should also remember that this is denominated in Great British Pounds, and Brexit has made them more British and less Great. You need more of ’em to represent a given value. But what is clear, in a more understated way, is the trend of decline has been arrested and reversed, since mid-2019.
of valuations and safe withdrawal rates
When I left work I did not have enough ISA+SIPP capital to match the safe withdrawal rate. That was okay strategically because I had a DB pension to come later/ From 2012 to 2014 the market crawling from the wreckage of the GFC beat out what was a too high spending rate, but the fall showed up in 2014, as the irresistible force of spending overwhelmed the immovable object of ROI. I had to fall back, fall back, fall back and hope the engines restart in the low-water mark by the time I started to draw the pension.
Valuation matters
It’s not supposed to, and perhaps it doesn’t if you accrue over many market cycles. I didn’t. Imagine the trajectory of 2015-2018 imposed upon the start. You’re never allowed to say that valuation matters to the passivista crew, but I would say that trajectory shows just that. I started out at low valuations into the GFC. I was able to make a SWR of 5% work – that’s what people said was OK back in the day. Don’t even think about that now. 3% is probably racy on current valuations. Continue reading “early retirement isn’t boring. Brexit and Covid are”
Simple Living In Somerset 