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Is recession looming?

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richfool
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Re: Is recession looming?

#522122

Postby richfool » August 13th, 2022, 3:19 pm

scotview wrote:
BullDog wrote:But that's when I believe the gross mismanagement of UK energy policy really started. It's taken us decades to be where we are today. In a mess largely of our own making.


We are where we are. The thing now is to find a way out of this. What do you think it will take and for how many years.

To me .GOV seem to be in total denial. I personally think this is a very serious situation that isn't getting the urgent attention it deserves.

I saw and read an article yesterday, but can't remember where it was, - saying, if I got it right, that we (GB) produced about 67% of our energy needs from green energy sources (wind and solar) over a recent 4 week period, and that things were proceeding well. It then went on to talk about improved methods of storage that didn't involve lithium batteries.

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Re: Is recession looming?

#522129

Postby BullDog » August 13th, 2022, 3:46 pm

scotview wrote:
BullDog wrote:But that's when I believe the gross mismanagement of UK energy policy really started. It's taken us decades to be where we are today. In a mess largely of our own making.


We are where we are. The thing now is to find a way out of this. What do you think it will take and for how many years.

To me .GOV seem to be in total denial. I personally think this is a very serious situation that isn't getting the urgent attention it deserves, winter is near.

Totally agree. I find it hard to say how we emerge from this crisis in energy supply. In the 1970's we brought North Sea resources on line and continued to build nuclear generating capacity. Today? There's options out there for sure. But with two years until a general election all that's going to happen is papering over the paper previously applied over the cracks. I have close to zero confidence in our political system presently.

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Re: Is recession looming?

#522131

Postby BullDog » August 13th, 2022, 3:51 pm

richfool wrote:
scotview wrote:
BullDog wrote:But that's when I believe the gross mismanagement of UK energy policy really started. It's taken us decades to be where we are today. In a mess largely of our own making.


We are where we are. The thing now is to find a way out of this. What do you think it will take and for how many years.

To me .GOV seem to be in total denial. I personally think this is a very serious situation that isn't getting the urgent attention it deserves.

I saw and read an article yesterday, but can't remember where it was, - saying, if I got it right, that we (GB) produced about 67% of our energy needs from green energy sources (wind and solar) over a recent 4 week period, and that things were proceeding well. It then went on to talk about improved methods of storage that didn't involve lithium batteries.

Far too far away for this winter. I think here's a very real chance of periodic energy cuts this winter if we have a sustained period of high pressure with Arctic weather systems bringing no wind and intense cold for a few weeks. And it's a Europe wide issue not just the UK given how interconnected the national electricity grids are now.

If we have another 1963, I don't want to think how we'll cope.

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Re: Is recession looming?

#522141

Postby absolutezero » August 13th, 2022, 4:38 pm

GoSeigen wrote:
I think it's more because we've had 12 years of economically clueless government

You mean 32 years...

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Re: Is recession looming?

#522142

Postby Nimrod103 » August 13th, 2022, 4:52 pm

richfool wrote:
scotview wrote:
BullDog wrote:But that's when I believe the gross mismanagement of UK energy policy really started. It's taken us decades to be where we are today. In a mess largely of our own making.


We are where we are. The thing now is to find a way out of this. What do you think it will take and for how many years.

To me .GOV seem to be in total denial. I personally think this is a very serious situation that isn't getting the urgent attention it deserves.

I saw and read an article yesterday, but can't remember where it was, - saying, if I got it right, that we (GB) produced about 67% of our energy needs from green energy sources (wind and solar) over a recent 4 week period, and that things were proceeding well. It then went on to talk about improved methods of storage that didn't involve lithium batteries.


At a certain instant 67% from wind and solar might have been possible, but the data is readily available on Gridwatch, though the curves have not been integrated, so I am just making an eyeball based estimate. I would say wind and solar have contributed about 15% of our electricity in August so far. And looking at 2022 so far, also about 15%, because when the winter storms blow, the sun doesn’t usually shine.

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Re: Is recession looming?

#522150

Postby BT63 » August 13th, 2022, 5:25 pm

Nimrod103 wrote:...when the winter storms blow, the sun doesn’t usually shine....


Even on sunny days in winter the production of solar is much less than in the summer; the day length is less and the sun is lower in the sky, slightly offset by cold air increasing the efficiency of solar panels.
Typically with solar, the best winter day will only produce one-third of what can be produced on the best summer day.

This summer has seen extreme quantities of sunshine.

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Re: Is recession looming?

#522153

Postby Nimrod103 » August 13th, 2022, 6:06 pm

BT63 wrote:
Nimrod103 wrote:...when the winter storms blow, the sun doesn’t usually shine....


Even on sunny days in winter the production of solar is much less than in the summer; the day length is less and the sun is lower in the sky, slightly offset by cold air increasing the efficiency of solar panels.
Typically with solar, the best winter day will only produce one-third of what can be produced on the best summer day.

This summer has seen extreme quantities of sunshine.


Interestingly, I have a friend who is a keen young IT electrical engineer, who keeps close tabs on his solar panels. He tells me that most power is generated on his system when there is hazy sunshine with brightness all over the sky. More than he generates than when there is strong sunshine and a cloudless sky.

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Re: Is recession looming?

#522159

Postby pje16 » August 13th, 2022, 6:26 pm

Nimrod103 wrote:Interestingly, I have a friend who is a keen young IT electrical engineer, who keeps close tabs on his solar panels. He tells me that most power is generated on his system when there is hazy sunshine with brightness all over the sky. More than he generates than when there is strong sunshine and a cloudless sky.

I thought that was surprising but a quick google revealed
"Solar panels produce electricity from the photons present in natural daylight, rather than from the sunlight itself, so panels don’t actually need to be installed in direct sunlight to work. Heat isn’t a factor in how much electricity PV solar panels can generate either so a cool Spring day can be as productive, if not more than a hot Summer day."
the next sentence however somwhat contradicts that
"it is true that direct sunlight provides optimum conditions for solar systems but you will still get significant benefits from solar electricity even if your property doesn’t offer the perfect environment.
source
https://www.harrisonssolar.co.nz/articl ... t-sunlight

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Re: Is recession looming?

#522166

Postby Wuffle » August 13th, 2022, 6:40 pm

As a person who can't really afford a new car (our fleet of 2 cars and a motorbike has a combined odometer reading of 187k + 184k + 48k = 419k), I can't resist a smirk at the idea of Mr or Mrs smug subsidised electric car buyer having the electricity go off.
Come on, it is quite funny.

W.

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Re: Is recession looming?

#522167

Postby BT63 » August 13th, 2022, 6:40 pm

Nimrod103 wrote:
BT63 wrote:
Nimrod103 wrote:...when the winter storms blow, the sun doesn’t usually shine....


Even on sunny days in winter the production of solar is much less than in the summer; the day length is less and the sun is lower in the sky, slightly offset by cold air increasing the efficiency of solar panels.
Typically with solar, the best winter day will only produce one-third of what can be produced on the best summer day.

This summer has seen extreme quantities of sunshine.


Interestingly, I have a friend who is a keen young IT electrical engineer, who keeps close tabs on his solar panels. He tells me that most power is generated on his system when there is hazy sunshine with brightness all over the sky. More than he generates than when there is strong sunshine and a cloudless sky.


I have daily generation and weather data for mine going back over ten years.
The best conditions for me, with my South-East facing panels at 40-degree angle, are a sunny morning, gradually transitioning to increasing quantities of white cloud in the middle of the day, ending with full white cloud cover in the last quarter of the day. Generation is significantly reduced if there is a clear sky late in the day when the sun is no longer shining on the panels.

In winter, snow on the ground works in a similar way to white cloud in the sky, giving a useful increase in generation.
A cold breeze can make quite a difference compared to a hot calm day.
For me, the days with greatest overall generation tend to be in May or early June, a few weeks before the longest day, due to the balance between sun strength and air temperature.
My greatest ever daily generation was 14th June 2012 which was a day with partial cloud and much cooler than typical for the time of year.

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Re: Is recession looming?

#522172

Postby scotview » August 13th, 2022, 7:19 pm

It is electricity usage/supply we are talking aboutin the above discussion. The elephant in the room is gas usage to heat a home.

Take our typical January usage:
Electricity usage 389kWh of which at least 50% will be derived from gas fired power plant, say 200kWh.
Gas usage 2585 kWh for home heating, that's a gross gas usage of 2782kWh including gas for electricity

So, the problem .GOV have to solve NOW is where does that extra 2785kWh generation capacity come from if gas/HCs are to be outlawed
That's a 1400% increase in electricity generation capacity to heat our homes from non HC sources. That's the number that's causing the problem.

And its a huge contributor to inflation, hence peoples outlook, hence recession, maybe even depression.

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Re: Is recession looming?

#522179

Postby Mike4 » August 13th, 2022, 7:44 pm

ADrunkenMarcus wrote:I suspect a recession is inevitable. At least, I don't see where the growth will come from.

If we take someone earning £30,000 (more than the UK average wage) and the personal income tax allowance of £12,571, they have £17,429 of taxable income. Let's make it £17,500 to be simple.

Their income tax on that will be £3,500 (20 percent). (I'm ignoring NI, any pension contributions, etc.)

If we assume that their energy bills are those of a 'typical household', then in October 2021 the cap was £1,277. A recent BBC report contained a forecast that the cap would rise to £4,200 in January 2023.

That would represent an increase in expenditure of £2,923 on energy bills alone and is equivalent to raising the basic rate of income tax from 20 to over 36 percent.

I believe people are going to have to cut back very substantially on discretionary areas of spending, which will have consequences for growth.

And I shudder to think how people who already have no money for discretionary purchases are going to survive.

Best wishes


Mark.



I think it's worse than that. In his interview with Emily Maitlis about a month ago, Martin Lewis pointed out that although the cap may have been £1,277 lat year, by careful switching of energy supplier (no longer possible) the average household could have fixed their year's gas and leccy together at £800.

So £800 to £4,200 is a rise of £3,400, rather than £2,923.

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Re: Is recession looming?

#522186

Postby Nimrod103 » August 13th, 2022, 8:06 pm

Mike4 wrote:
ADrunkenMarcus wrote:I suspect a recession is inevitable. At least, I don't see where the growth will come from.

If we take someone earning £30,000 (more than the UK average wage) and the personal income tax allowance of £12,571, they have £17,429 of taxable income. Let's make it £17,500 to be simple.

Their income tax on that will be £3,500 (20 percent). (I'm ignoring NI, any pension contributions, etc.)

If we assume that their energy bills are those of a 'typical household', then in October 2021 the cap was £1,277. A recent BBC report contained a forecast that the cap would rise to £4,200 in January 2023.

That would represent an increase in expenditure of £2,923 on energy bills alone and is equivalent to raising the basic rate of income tax from 20 to over 36 percent.

I believe people are going to have to cut back very substantially on discretionary areas of spending, which will have consequences for growth.

And I shudder to think how people who already have no money for discretionary purchases are going to survive.

Best wishes


Mark.



I think it's worse than that. In his interview with Emily Maitlis about a month ago, Martin Lewis pointed out that although the cap may have been £1,277 lat year, by careful switching of energy supplier (no longer possible) the average household could have fixed their year's gas and leccy together at £800.

So £800 to £4,200 is a rise of £3,400, rather than £2,923.


A bit disingenuous of Martin Lewis IMHO. Last year, his website was advising people to shop around and sign up for lower cost deals, which were mainly being marketed by small newcomer companies - which subsequently went bust because they had not hedged their positions. I know there are a few people who claim still to be on low fixed rates (compared to the current rates), but there cannot be many I would have thought.

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Re: Is recession looming?

#522187

Postby BT63 » August 13th, 2022, 8:22 pm

scotview wrote:.....And its a huge contributor to inflation, hence peoples outlook, hence recession, maybe even depression.....


Just as the Fed were ridiculously late to recognise and try to cool inflation, I think there's a very large risk that they will be late recognising the downturn, resulting in a collapse similar to 2008 which rapidly cools inflation (if only for a while until the Fed creates money on a scale we can't even imagine at this time to try to save the economy).

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Re: Is recession looming?

#522193

Postby Mike4 » August 13th, 2022, 9:10 pm

BT63 wrote:
scotview wrote:.....And its a huge contributor to inflation, hence peoples outlook, hence recession, maybe even depression.....


Just as the Fed were ridiculously late to recognise and try to cool inflation, I think there's a very large risk that they will be late recognising the downturn, resulting in a collapse similar to 2008 which rapidly cools inflation (if only for a while until the Fed creates money on a scale we can't even imagine at this time to try to save the economy).


And a programme on the BBC R4 this morning was concluding the BoE was signalling its intention to deliberately engineer a recession, as the only way to get inflation back under control.

"The Briefing Room"
https://www.bbc.co.uk/sounds/play/m0019z38

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Re: Is recession looming?

#522223

Postby anon155742 » August 13th, 2022, 11:48 pm

scotview wrote:It is electricity usage/supply we are talking aboutin the above discussion. The elephant in the room is gas usage to heat a home.

Take our typical January usage:
Electricity usage 389kWh of which at least 50% will be derived from gas fired power plant, say 200kWh.
Gas usage 2585 kWh for home heating, that's a gross gas usage of 2782kWh including gas for electricity

So, the problem .GOV have to solve NOW is where does that extra 2785kWh generation capacity come from if gas/HCs are to be outlawed
That's a 1400% increase in electricity generation capacity to heat our homes from non HC sources. That's the number that's causing the problem.

And its a huge contributor to inflation, hence peoples outlook, hence recession, maybe even depression.


Furthermore, it does not take into account the required energy for transport. Cars, motorbikes, lorries, some trains, planes, boats etc. If you take all their energy usage into account then renewables are still miniscule

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Re: Is recession looming?

#522241

Postby richfool » August 14th, 2022, 8:05 am

A topical article from the DT, behind a paywall:

https://www.telegraph.co.uk/investing/s ... investors/

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Re: Is recession looming?

#522242

Postby richfool » August 14th, 2022, 8:11 am

A topical article from the DT, behind a paywall:

As people in Britain and Europe struggle with soaring gas prices, our counterparts in America are wondering what the fuss is about. Not only is the US self-sufficient in gas but, because gas is so difficult to transport in the absence of pipelines, America’s gas market is largely cut off from the rest of the world.

So while easily transported oil has a global price, gas prices in America are determined more by domestic supply and demand. They have risen, but much less severely than in Europe.

When it comes to money printing, America did indulge in it on a truly colossal scale and all that money pumped into the system surely increased demand across the economy when Covid restrictions were eased. In combination with supply chain problems, this will have pushed up prices.

But America’s Federal Reserve has now reversed course and is engaged in rapid “quantitative tightening”, as well as raising interest rates. Economists and investors who think money supply is especially important to inflation say this dramatic change of course and the rapid shrinkage in the in the number of dollars in circulation more or less guarantees that inflation in the US will fall sharply in time (there is always a time lag).

https://www.telegraph.co.uk/investing/s ... investors/

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Re: Is recession looming?

#522247

Postby BT63 » August 14th, 2022, 8:52 am

richfool wrote:A topical article from the DT, behind a paywall:
....Economists and investors who think money supply is especially important to inflation say this dramatic change of course and the rapid shrinkage in the in the number of dollars in circulation more or less guarantees that inflation in the US will fall sharply in time (there is always a time lag).

.....


Not only will inflation fall, but so will asset prices, especially the S&P500 which has a very high correlation with the supply of money and QE.
So if the Fed wants to drain all the Covid cash, the S&P500 will fall by more than half.

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Re: Is recession looming?

#522250

Postby scotview » August 14th, 2022, 9:01 am

BT63 wrote:
Not only will inflation fall, but so will asset prices, especially the S&P500 which has a very high correlation with the supply of money and QE.
So if the Fed wants to drain all the Covid cash, the S&P500 will fall by more than half.


So, if I'm thinking of investing in a Vanguard fund, would it be best to invest in one of their USA funds or one of their World funds, after the crash ?


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