Credit deflation and the reflation cycle to come (part 2)

[ThoughtCriminal]

It's different this time. This time we're REALLY fucked. 

[Castlevania]

I think this might slow the take up of electric cars. Good for Shell and BP as the owners of the two largest electric car charging networks in the U.K. 

 

[NogintheNog]

2 hours ago, DurhamBorn said:

China buying UK shares.Look at what its buying,energy,telcos and materials and its selling dollar holdings to buy them  Bp ,Shell,Vodafone,BHP and Anglo American.Maybe they think inflation isnt going away.Of course the fact they will be buying lots of LNG etc and are interested in Africa where VOD are big is part of it.

https://www.telegraph.co.uk/business/2021/09/11/china-boosts-stake-uk-london-shares-spree/

 

Hhmmm........

[Don Coglione]

On 02/09/2021 at 11:47, Starsend said:

I've been looking at mortgaging my house. I currently own outright and wouldn't normally dream of doing it - but, 1% fixed for 5 years! It seems rude not to.

There are numerous 1% 5 year fixes on the market, most with a £995 fee.

My cunning plan is to take out a mortgage for either £100,000 or £150,000 and put a good chunk of it in 6%+ dividend paying stocks. It seems like a no brainer to me with the obvious risk being a BK. Hoping I can minimise the downside risks by only investing in cheap value stocks. Seems to me like the upside outweighs the downside considerably.

Any thoughts? Am I missing anything? Anybody else planning similar while money is so cheap?

Oh, may also be able to gain 20% immediately on some of by using my full SIPP allowance for the next couple of years.

 

On 02/09/2021 at 12:49, Don Coglione said:

As I have posted on another thread, I am considering doing exactly this. 0.99% fixed for 5 years, interest-only, £995 fee. Needs care, but having some level of debt is also a hedge against potential forgiveness or a jubilee; nothing would surprise me in today's fucked-up financial world.

Update, with apologies for this perhaps not being the right place to post, but since it started here:

We are not going ahead. No issue with meeting the eligibility criteria, but the bank is very sniffy indeed as to where the money is going to be put to use.

Want to leverage up and buy a massively over-priced big house? No problem!

Fancy treating yourself to a holiday home (not BTL)? Sure!

How about "adding value" to your existing property by extending and renovating? Crack on!

Sorry, you want to take the bank's free money and deploy it outside the ramped UK property market? Fuck off!

 

I understand that the bank has a vested interest in where its money goes, but if it has first and sole charge on our property and we are asking for less than 50% LTV, why should it care - its money looks secure enough? Unless you want, effectively, to commit mortgage fraud by lying as to the intended use of the funds, then @Starsend's (and my) plan is out of the window.

I concluded that the banks have been "encouraged" to give out money like confetti, but only in continued support of the UK property market.

Don't try to fight this market, kids...

[Starsend]

6 hours ago, Don Coglione said:

 

Update, with apologies for this perhaps not being the right place to post, but since it started here:

We are not going ahead. No issue with meeting the eligibility criteria, but the bank is very sniffy indeed as to where the money is going to be put to use.

Want to leverage up and buy a massively over-priced big house? No problem!

Fancy treating yourself to a holiday home (not BTL)? Sure!

How about "adding value" to your existing property by extending and renovating? Crack on!

Sorry, you want to take the bank's free money and deploy it outside the ramped UK property market? Fuck off!

 

I understand that the bank has a vested interest in where its money goes, but if it has first and sole charge on our property and we are asking for less than 50% LTV, why should it care - its money looks secure enough? Unless you want, effectively, to commit mortgage fraud by lying as to the intended use of the funds, then @Starsend's (and my) plan is out of the window.

I concluded that the banks have been "encouraged" to give out money like confetti, but only in continued support of the UK property market.

Don't try to fight this market, kids...

Interesting. I'd already thought about this one and was going to tell them it was for a holiday home; I knew they wouldn't be impressed if I said I was going to invest in high yielding dividend stocks.

I have no problem lying to them.

[Funn3r]

On 10/09/2021 at 10:31, Cattle Prod said:

Lint? Clothes washer? Listen to JD Rockefeller over there with his fancy gadgets, a true DOSBODDER has one of these:

Look at how happy she is! I suggest you all go home and suggest it to your significant others.

Absolutely terrible ergonomics. Why did they design it so she has to bend over like that?

[leonardratso]

18 minutes ago, Funn3r said:

Absolutely terrible ergonomics. Why did they design it so she has to bend over like that?

ive no idea, fridges seem to be designed badly as well;

[spygirl]

17 hours ago, Don Coglione said:

 

Update, with apologies for this perhaps not being the right place to post, but since it started here:

We are not going ahead. No issue with meeting the eligibility criteria, but the bank is very sniffy indeed as to where the money is going to be put to use.

Want to leverage up and buy a massively over-priced big house? No problem!

Fancy treating yourself to a holiday home (not BTL)? Sure!

How about "adding value" to your existing property by extending and renovating? Crack on!

Sorry, you want to take the bank's free money and deploy it outside the ramped UK property market? Fuck off!

 

I understand that the bank has a vested interest in where its money goes, but if it has first and sole charge on our property and we are asking for less than 50% LTV, why should it care - its money looks secure enough? Unless you want, effectively, to commit mortgage fraud by lying as to the intended use of the funds, then @Starsend's (and my) plan is out of the window.

I concluded that the banks have been "encouraged" to give out money like confetti, but only in continued support of the UK property market.

Don't try to fight this market, kids...

One thing you have to keep in mind ,with all this go go propertee BS is that banks are not really lending for housing.

Sure, theres some gormless BS  thatll lend you 60% for a FHL.

But the size of the outstanding mortgage  has been shrinking since 2010.

Banks are not lending out to properdee.

 

 

11 hours ago, Starsend said:

Interesting. I'd already thought about this one and was going to tell them it was for a holiday home; I knew they wouldn't be impressed if I said I was going to invest in high yielding dividend stocks.

I have no problem lying to them.

They do. And theyll check.

Theres very very few banks wholl provide a FHL mortgage.

 

[HousePriceMania]

On 10/09/2021 at 23:59, JMD said:

That was my initial thoughts also - how could such an epic financial banking secret be kept? But that was just a lapse on my part. You see I am slowly trying to rid myself of fixating on or blaming global conspiacies. It's like @DurhamBornrepeatedly tells us on this thread, the real driver is the economics, and the political ham fisted policies merely attempt to play catchup. I do of course accept that fraud crimes happen, but in the main, instead of grand complicities, I think that most covert actions/policies by tptb are dogma driven, or maybe simply in our specific case that there are tragically so few choices left when capitalism itself has kinda run out of road.                                                                                                                                                                                       Actually - if not going completely off piste - there is a book by Mary Midgely, The Myths we Live By, which does a great job of explaining how/why these 'myth/dogma driven' models of human behaviour have occured throughout history and across all human endeavour, so also useful I think for contextualising our current rather terrifying 'post truth' era!          https://www.amazon.co.uk/Myths-Live-Routledge-Classics-Paperback/dp/0415610249

I have a friend who circulates in fairly high places and he assures me there are no conspiracies, just incompetent people out of touch men and women who base their decisions on their very limited outlook and experiences.

[planit]

22 minutes ago, HousePriceMania said:

I have a friend who circulates in fairly high places and he assures me there are no conspiracies, just incompetent people out of touch men and women who base their decisions on their very limited outlook and experiences with some self interest added in for good measure.

That's the way I see it, with my addition. They are not organised or intelligent enough to pull off such a complicated and hidden manipulation. There would be too much disagreement and argument for one thing.

 

[Harley]

On 11/09/2021 at 09:56, Harley said:

Will Yellow Cake play catch-up or are they somehow different?

Yep, gapped up 15% this morning!  Bugger, forgot to put a limit order in!

[Harley]

REITS.  Assuming it's good to have property in your portfolio given inflation, etc what's the best?  That is, the devil is in the detail as offices per se may be a bit iffy (if WFH, etc sticks).  So any good areas and companies to look at?  I ask as I've started looking at data centres and an asian one just popped up on my radar.  Any other areas, companies, funds, etc?  

PS:  Oh look...QTS to be acquired by Blackstone!

[Starsend]

5 hours ago, spygirl said:

 

They do. And theyll check.

Theres very very few banks wholl provide a FHL mortgage.

 

How do you know this?

[janch]

@Harley

Here are a couple which have been mentioned recently elsewhere  (can't remember where):

LON:WHR   Warehouse REIT PLC

LON:CTH   CareTech Holdings plc   (residential care)  I held this one for a while and sold just before it did its latest upward lurch

 

This link to a 2018 article gives a lot of info re investing in GP surgeries/residential homes etc:

https://www.sharesmagazine.co.uk/article/why-investing-in-healthcare-via-investment-trusts-could-be-lucrative

 

I don't have any exposure to any of these.  DYOR etc

[Harley]

11 minutes ago, janch said:

@Harley

Here are a couple which have been mentioned recently elsewhere  (can't remember where):

LON:WHR   Warehouse REIT PLC

LON:CTH   CareTech Holdings plc   (residential care)  I held this one for a while and sold just before it did its latest upward lurch

 

This link to a 2018 article gives a lot of info re investing in GP surgeries/residential homes etc:

https://www.sharesmagazine.co.uk/article/why-investing-in-healthcare-via-investment-trusts-could-be-lucrative

 

I don't have any exposure to any of these.  DYOR etc

Cheers, yes health related sound interesting.  CTH is why I just sell down positions I like rather than exit.  I would have done the same.  I notice several have issued a lot of shares recently.

[ThoughtCriminal]

Duplicate. Deleted. 

[DurhamBorn]

Interesting on the job front.Iv had three job offers today.One was decent money,but annualised hours.I told that one i wanted 30 holidays + bank holidays and to choose when to take them,not annualised hours,of course no chance of them agreeing to that so told them i wasnt interested as no work life balance.What im seeing is the skilled jobs cant be filled because the only people with the skills are retiring early,or taking easier lower paid jobs with better work/life balance.

The lower paid end cant get reliable people because there are that many jobs available in that range and people dont care,and the wages arent high enough to care.

Im finding it fascinating when these employers ring,because they simply dont yet understand the macro situation has changed and isnt going back.They need to get ahead of the curve quickly,but they are so used to holding the power over workers they simply can adjust to the new reality.They need to push through price increases and up wages quickly.Employers with big workforces on low wages must be really feeling it now,and thats before Dumbo Boris's NI increases.

[ThoughtCriminal]

Fucked. Absolute solar panel, wind turbine, up the shitter, fucked. 

[Ghostly]

3 minutes ago, ThoughtCriminal said:

Fucked. Absolute solar panel, wind turbine, up the shitter, fucked. 

Was just watching a video on YouTube about Shetland (IIRC) where they’ve got so much excess electricity from wind farms that they can’t use it all. They’re refusing planning applications for any more wind farms. Then other issue is they haven’t got a sufficient ‘interconnect’ (cable basically) to send power back to the mainland.

[Noallegiance]

10 minutes ago, ThoughtCriminal said:

Fucked. Absolute solar panel, wind turbine, up the shitter, fucked. 

Shame we don't own the energy sector....

[DurhamBorn]

5 minutes ago, ThoughtCriminal said:

Fucked. Absolute solar panel, wind turbine, up the shitter, fucked. 

DRAX gave us a lovely treble didnt it.This is also going to destroy all the competition to Centrica.I noticed the two that went under the other day the regulator gave Centrica the customers.They are waking up now to their folly.All those small players thought they could win by using the spot market,same as many in Europe on gas,but now they are being slaughtered.Russia will honour contracts but keep spot market tight.Centrica might just reward us yet.

 

[Harley]

Nothing much new for us here (except Jim has just got over Covid!) but from 51:20 he lists the inflation drivers, and talks about stagflation and which assets to hold.  He does a great job.  Spot on with my hypotheses.  Like he visits here!  Another example of it all going mainstream (even the timings).

https://www.financialsense.com/podcast/20056/weekend-edition-inflationary-decade

PS:  Congrats Jim, and I look forward to your podcast on Monday about your personal covid journey.  Jim's produced some great podcasts on Covid.  He's been with me all my investing life!

PPS:  What after a devalued USD?  CBDCs, a new paradigm.

[DurhamBorn]

8 minutes ago, Ghostly said:

Was just watching a video on YouTube about Shetland (IIRC) where they’ve got so much excess electricity from wind farms that they can’t use it all. They’re refusing planning applications for any more wind farms. Then other issue is they haven’t got a sufficient ‘interconnect’ (cable basically) to send power back to the mainland.

Those cables were the main reason i bought SSE when it was smacked down.Crucial,and they own the main ones.They are going to need to convert wind power to hydrogen when there is too much and then burn it later.Without that they wont get the returns etc because  the returns come when the wind isnt blowing,not when it is.

[DurhamBorn]

1 minute ago, Harley said:

Nothing much new for us here (except Jim has just got over Covid!) but from 51:20 he talks about inflation drivers, stagflation, and which assets to hold.  Another example of it all going mainstream.

https://www.financialsense.com/podcast/20056/weekend-edition-inflationary-decade

PS:  Congrats JIim, and I look forward to your podcast on Monday about your personal covid journey.  Jim's produced some great podcasts on Covid.

Inflation is locked in now Harley,its just a question of how high.I expect we might get a sharp quick deflation event though to shake people out.Trillions sat in dis-inflation assets are going to get mullered.Its a beautiful example though of how wealth is moved from one are to another without the people understanding whats going on.

[Noallegiance]

3 minutes ago, DurhamBorn said:

Inflation is locked in now Harley,its just a question of how high.I expect we might get a sharp quick deflation event though to shake people out.Trillions sat in dis-inflation assets are going to get mullered.Its a beautiful example though of how wealth is moved from one are to another without the people understanding whats going on.

So do you see a 'David Hunter thing' less likely to impact our investment areas as heavily as those positioned for the last cycle?