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

[Starsend]

1 hour ago, Don Coglione said:

I agree with @spygirl on this; if my conversation last week is anything to go by, I suspect any funds agreed will be held until you have reached at least the contractual part of your "second home" purchase - which, to be fair, you would expect. No way are they going to say "OK, Starsend, here's £150k, crack on and good luck in your second home." 

Seriously, the depth of questioning even at pre-formal application stage was extensive, almost intrusive. Hence my previous post that the banks are happy to lend against property in some form (here I disagree with Spy), but you have no chance of smuggling their free cash out of the property market; this is merely another prop, albeit seemingly funded via the private sector (if you can call RBS et al private sector...).

I'm surprised at why they wouldn't to be honest. If it's secured against an asset worth £400k + covered by a salary then there's no risk to them.

If it's as much hassle as you say then I won't be bothering but I'll prob give it a go and report back.

[Don Coglione]

1 minute ago, Starsend said:

I'm surprised at why they wouldn't to be honest. If it's secured against an asset worth £400k + covered by a salary then there's no risk to them.

If it's as much hassle as you say then I won't be bothering but I'll prob give it a go and report back.

I too was surprised, hence my conclusion that the banks have been directed to lend this free money in order to prop up the housing market.

Please do report your experience; perhaps I just caught someone having a bad day, but I doubt it.

[spygirl]

2 minutes ago, Starsend said:

I'm a bit surprised that you're saying it's so onerous. Haven't people being using their homes as cashpoints to spend on new cars, expensive holidays for the last twenty years? I certainly know many who did exactly this and I don't believe any of them were asked to prove how much they actually paid for the car or the holiday.

Are you saying it's completely changed?

What is FHL?

For clarification I am looking at mortgaging my currently paid for house at about 25% of the value; looking to borrow £100,000 on a £400,000 house.

My income covers the mortgage easily.

There's just about no risk to the bank at all that I can see, so why do they give a fuck? After all they haven't done for the last couple of decades.

I guess I'll just have to see but if it gets intrusive or a pain in the arse then I'll just drop it, not overly bothered alhtough it would have been nice to borrow at 1%.

 

FHL furnished holiday let.

Banks can be funny about remortgages. You need a life equity and be relatively young.

Mortgage market and lenders changed totally after MMR.

You'll need to see what the banks valuer say about the house valuation.

The risk for the bank us that you default and theyve the pita of repoing.

You re likely to borrow at around 1.5%

[Hancock]

1 hour ago, Loki said:

Hopefully in the future INFA does a McShare 

They should be called the Irish play.

I'm amazed at how long its taken the Irish govt not to make the final decision. It can only be YES or NO.

[Loki]

4 minutes ago, Hancock said:

They should be called the Irish play.

I'm amazed at how long its taken the Irish govt not to make the final decision. It can only be YES or NO.

In the face of imminent energy, macro, infrastructure etc changes i wouldn't be surprised if they snatch defeat from the jaws of victory though

[Hancock]

3 minutes ago, Loki said:

In the face of imminent energy, macro, infrastructure etc changes i wouldn't be surprised if they snatch defeat from the jaws of victory though

Yes "no" is the easier decision, so maybe they're waiting for an excuse.

I now need it to double to get my money back and get out of there, and thats my intention at the moment.

Irony is it will more than likely quadruple if Island Magee gets the go ahead and they get a few ship building contracts.

[planit]

 

Universal Credit: Cut is two hours extra work for claimants, says Therese Coffey

Asked about the reduction on Monday, Ms Coffey told BBC Breakfast: "I'm conscious that £20 a week is about two hours' extra work every week.

"We will be seeing what we can do to help people perhaps secure those extra hours, but ideally also to make sure they're also in a place to get better paid jobs as well."

But the Resolution Foundation disputed her figures, as claimants who work additional hours see their benefits reduced - or for each £1 they earn, the UC payment falls by 63p.

The charity said a UC claimant earning the National Living Wage - £8.91 an hour - and with an income of at least £6,100 a year, would take home just £6.60 for two hours work due to the taper in the payment, falling to £4.48 if they pay tax and National Insurance.

And they said the actual take home pay would fall to £2.24 an hour once any pension contributions or additional childcare or travel costs were taken into account.

This would mean they would need to work nine extra hours a week to make up for the removal of the £20 uplift

 

 

Seems to me the Resolution Foundation have actually highlighted the problem by mistake.

Giving people taxpayer money not to work with a framework that takes away any benefit from working more.

 

 

[Errol]

2 hours ago, ThoughtCriminal said:

Ofgen cap going up 13%.

 

Just got to look through inflation though, piece of piss. 

 

Feels like that scene in The Big Short where they realise what's coming and that the masses havent got a fucking clue. 

 

 

It's going to get very nasty:

 

 

[Talking Monkey]

2 hours ago, DurhamBorn said:

Yep,those idiots will be paying DRAX to run their turbines to use up the energy not produce it.Pumped storage was a no brainer for wind like you say,but they all fell for the we can use batteries as backup lunacy.

Whats really really pleasing is though is that whats going on shows that the long dis-inflation cycle has meant nobody uses macro anymore.Thats great news for us all on here.

Government is in serious trouble now,and i mean serious.Inflation is going to hit hard in all the basics,the UK is now the NHS with a government attached,they cant sustain the state without massive tax increases or massive inflation.The beauty now is these value sucking area like the NHS and welfare will devour each other.Want more NHS,cut welfare,etc.

BOE is running out of road to monetise.Maybe £90billion more max without a BK.

The whole comfortable benefits lifestyle is going away isn't it over the next decade, it'll go back to being a basic safety net as it should be. Have I got that right DB. I see that as the only way to incentivise people to work. 

 

[Harley]

2 hours ago, JMD said:

I think farm land is also good, i'm currently looking at the sector, but finding most good reits/funds are for private/institutional buyers only - a la Blackstone!!

...not actual reits but @DurhamBornmentioned brazil agro and village farms a while back. 

Funny you should mention data-centers as are next on my list to look into. Whats your thinking on them Harley?... i am thinking kinda decomplex and also own assets if the company doesn't carry large debt? 

Yes, specialist reits (though not office ones as you comment) are i think good - how about: Medical Properties Trust (mpw). It is US/global, 5% divi, financials look good, however 122% debt-equity... but it is on my BK/wish list for when/if it gets cheap.

 

Yep the debt to equity and current ratios seem a bit uncomfortable for me.  Maybe I need to get used to it.  Lots been bought up or never went public.  Maybe some guys like to keep their data nice and secure!  My initial trawl produced:

SGX:AJBU,NYSE:COR,NASDAQ:CONE,NYSE:DLR,NASDAQ:EQIX,NASDAQ:VPN,AMEX:SRVR,AMEX:ICF,NYSE:CCI,NYSE:AMT,NYSE:FSLY,HKEX:728,TSE:9433,NYSE:VZ,NASDAQ:CYXT,HKEX:762,NASDAQ:VNET,NYSE:LUMN,NYSE:IRM,NYSE:SWCH.

DYOR.  I need to do some deep dives as quite a mix fundamentally and, like everything atm, a bit rich technically.

 

[Harley]

1 hour ago, DurhamBorn said:

Yes ticker AGRO ,up 17% on them since i bought a few months back,but still look good.

Which one is that (i.e. exchange) please?  I get lots listed.

[leonardratso]

Just now, Harley said:

Which one is that (i.e. exchange) please?  I get lots listed.

think its lon:agro

 

Company details

ROS AGRO PLC is engaged in agricultural production, including cultivation of sugar-beet, grain and other agricultural crops; cultivation of pigs; processing of raw sugar and production of sugar from sugar beet, and vegetable oil production and processing. The Company has four segments: Sugar, Meat, Other agriculture and Oil. The Company's Sugar segment is engaged in the production and trading operation with white sugar. Its Meat is engaged in the cultivation of pigs and selling of consumable livestock to third parties. The Company's Other agriculture segment is engages in the cultivation of plant crops, including sugar beet, grain crops and other plant crops, and dairy cattle livestock. The Company's Oil segment is engaged in the vegetable oil extraction, production and sales of mayonnaise, consumer margarine and bottled vegetable oil. The Company's subsidiaries include OJSC Rusagro Group, LLC Group of Companies Rusagro and Limeniko Trade and Invest Limited, among others.

[leonardratso]

looks like its in dorrars though

 

[Yadda yadda yadda]

35 minutes ago, Talking Monkey said:

The whole comfortable benefits lifestyle is going away isn't it over the next decade, it'll go back to being a basic safety net as it should be. Have I got that right DB. I see that as the only way to incentivise people to work. 

 

Yes because the country can't afford it. We're already seeing taxes pushed beyond the point of diminishing returns. So there isn't enough money for current expenditure. Paying for it through printing will lead to more inflation. That leads to the other problem that will impoverish benefits claimants plus many pensioners and others, inflation. Energy price rises are already going to cause a lot of people problems.

[DurhamBorn]

1 hour ago, planit said:

 

Universal Credit: Cut is two hours extra work for claimants, says Therese Coffey

Asked about the reduction on Monday, Ms Coffey told BBC Breakfast: "I'm conscious that £20 a week is about two hours' extra work every week.

"We will be seeing what we can do to help people perhaps secure those extra hours, but ideally also to make sure they're also in a place to get better paid jobs as well."

But the Resolution Foundation disputed her figures, as claimants who work additional hours see their benefits reduced - or for each £1 they earn, the UC payment falls by 63p.

The charity said a UC claimant earning the National Living Wage - £8.91 an hour - and with an income of at least £6,100 a year, would take home just £6.60 for two hours work due to the taper in the payment, falling to £4.48 if they pay tax and National Insurance.

And they said the actual take home pay would fall to £2.24 an hour once any pension contributions or additional childcare or travel costs were taken into account.

This would mean they would need to work nine extra hours a week to make up for the removal of the £20 uplift

 

 

Seems to me the Resolution Foundation have actually highlighted the problem by mistake.

Giving people taxpayer money not to work with a framework that takes away any benefit from working more.

 

 

On in my neighbours case over the road get a 1 year old BMW instead of a brand new one.Whats interesting here is what the government are saying.Read through it and they are saying we have created a system where nobody wants to work more than the minimum,this daft £20 extra made it even worse so we are removing it.We are also going to invest instead in getting people extra hours and push them on that.

I dont think after this cut they will cut benefits outright,but they might start to really push people on hours etc and of course inflation will start to bite hard on living costs.Go short brow and nail bars.

[DurhamBorn]

1 hour ago, Talking Monkey said:

The whole comfortable benefits lifestyle is going away isn't it over the next decade, it'll go back to being a basic safety net as it should be. Have I got that right DB. I see that as the only way to incentivise people to work. 

 

It needs to,but im not sure it will.Two child limit was a key move.The other is made up things like ADHD etc where 1 in 10 is likely genuine,but tackling that is very difficult.The NI increase is  direct attack on people just above benefits level etc so the government dont look like they have thought that through at all just like every policy they launch.

[Hancock]

9 minutes ago, DurhamBorn said:

It needs to,but im not sure it will.

There is now a new underclass incapable of working fulltime, there are far too many people under 45 that look as if doing 16 hours a week would be a struggle for them.

The country is fucked.

[reformed nice guy]

4 hours ago, Bobthebuilder said:

I am starting to notice the same in building trades, more people starting to retire / take it a bit easier, etc. The new kids on the block are getting the basics wrong and messing things up from the start, no experience = losing money.

Looked at a kitchen fit for my builder mate today, young kitchen designer had planned it. Doesn't fit, doesn't work, layout all wrong with no allowances for old rooms not being square etc.

Knowledge not shared is lost.

Spoke to a plumber that lives nearby that services kerosene burners, installs kitchens, changes out tanks etc.

His plumbing merchant is only taking payment on order at the moment, said it was unusual

[JMD]

7 hours ago, Cattle Prod said:

Thats a great point. It's really obviously the case, eh? Kind of reminds me about how NASA lost the how-to-do-it manuals of the Apollo programe, big problem in institutions with passing on knowledge. Humans have lost knowledge over and over again. Now only literally a handful of people know wtf is going on in the economy!

At the risk of going off thread, I do concurr with what you say, but really wish that that type of ignorance and lost knowledge was happening only within the realm of economics. But in media, justice system, social theory, science - where for example once we had two biological sexes but now apparently have a spectrum! - everything it seems is now up for grabs... and all pillars of wisdom must fall! (post-modernism is a very slippery concept but has unleashed a great deal of chaos into the world)

[wherebee]

1 hour ago, JMD said:

At the risk of going off thread, I do concurr with what you say, but really wish that that type of ignorance and lost knowledge was happening only within the realm of economics. But in media, justice system, social theory, science - where for example once we had two biological sexes but now apparently have a spectrum! - everything it seems is now up for grabs... and all pillars of wisdom must fall! (post-modernism is a very slippery concept but has unleashed a great deal of chaos into the world)

Since the enlightenment to now is only 300 years.

Throughout 12000+ years of human civilisation, the norm has been ignorance of the scientific method.

[wherebee]

Australian financial review big article on oil and gas sector:

Investors turning their backs on oil and gas stocks risk missing out on an eventual recovery in the sector once the market wakes up to the huge gap that has built between soaring commodity prices, that will boost company profits, and depressed share prices.

Market sources point to a disconnect between share prices and oil and gas commodity prices that has been evident for months but is now becoming “ridiculous” given the buoyant LNG market and continuing robust crude oil prices, which are swelling cash flows for producers.

Big article It's saying basically all the stuff that DB has been saying for a year or more.  Aussie oil and gas stocks up 5% today.

Hinting at the ridiculousness of the 'greeening' of pension funds, but not yet saying it openly - that the climate change lobby is impoverishing millions of future pensioners.

[jamtomorrow]

10 hours ago, Hancock said:

There is now a new underclass incapable of working fulltime, there are far too many people under 45 that look as if doing 16 hours a week would be a struggle for them.

The country is fucked.

Or ahead of the field.

Automation is the slowest of slow fucks, but it is relentlessly fucking all of us. *That's* the real super-cycle.

What makes us especially vulnerable is the centuries-old cognitive bias and/or blind spot that nearly all of us carry with us, namely: equating hard work with moral virtue.

It exists for a reason of course, the reason being that hard work has historically been a pre-requisite for a civilisational grouping (be it a tribe, village, city-state, nation-state) to prosper and flourish.

But there will come a point - and we're not far away now - where automation pulls the rug from under the entire edifice of "the work ethic".

The question then is, how will the productive output of the economy be distributed if there's no meaningful quantity of human "work" available to measure "contribution"? If we're all freeloaders (and we will be), how does the pie get divided?

[planit]

There is a general malaise I am noticing in the O&G industry.

It's not right to ask an oil company to give you petrol for 80 years and then turn around and threaten them with court cases to punish them for climate change. This is just one example of the crap the O&G industry gets every day.

The result of this is "I can't really be arsed to get my production back on line very quickly" or to tell Joe Biden to stuff his request for more oil up his arse.

Some companies are drilling wells - slowly. OPEC+ is raising production - slowly. Others are reducing where it is not profitable on a risk/reward basis and the threats of court cases have shifted the risk very far to the up. The O&G industry don't see it as their duty to supply energy to the world any more, they won't feel bad at the negative effects when oil hits $200.

 

They [blinded ESG crazies] are not letting up and this problem is getting compounded every day. The irony is that the further away the crunch is, the worse it will be for normal people. Covid has created a great veil, behind which the problem has grown more than it possibly could under normal circumstances. Delta came along at just the right time to prolong the build up.

 

The gas squeeze over the last week has been a small sign of what is to come, Putin will be the hero and pull back for a while, taking credit for 'saving' Europe. But he knows he is in control and will tighten the screws again when it suits him (gas won't return completely back to normal levels).

Each squeeze or spike will probably be worse than the last until it has a serious impact on the economy. I still see the only option being an energy induced inflation spike kicking off a bad recession (mainly because they have shown they will print for every other type of recession).

[HousePriceMania]

https://www.ft.com/content/e099e0e3-4fba-45a4-92e2-08891c2f8b0e

 

Evergrande faces investor protests as liquidity crunch worsens

 

 

[HousePriceMania]

17 hours 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.

Can anyone tell me/anyone reading, which assets you consider dis-inflation assets ?