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

[ThoughtCriminal]

https://www.bbc.co.uk/news/business-52719230
 

UK unemployment almost doubled in a month. 
 

As we say in the bronx: shits about to get real 

 

Note: that doesn’t include people on furlough who are unemployed but just don’t realise it yet.

[M S E Refugee]

https://www.marketwatch.com/story/imperial-brands-cuts-dividend-by-a-third-2020-05-19

[geordie_lurch]

10 minutes ago, ThoughtCriminal said:

Note: that doesn’t include people on furlough who are unemployed but just don’t realise it yet.

Exactly 

[Democorruptcy]

11 hours ago, sancho panza said:

Wait out DM,give it time to mature like a good wine.This downtunr has barely begun.

As you know I'm in Wales so still in lockdown. Nothing is happening because hardly anything is coming to market (most recent £680k last sold £285k in 2005) and viewings aren't allowed. Here I don't see my competition as local folk who might be going to lose their job, it's people in secure public sector jobs (!) buying holiday homes to retire to later on. Like a Policeman who bought one he doesn't want to live in for 10 years so it's gone as yet another rental. Looking at some places in England mentioned on here, it seems a lot of sales have fallen through. If I was there I'd be trying some very low ball offers hoping to catch some fear. 

[Don Coglione]

51 minutes ago, ThoughtCriminal said:

I’ve always thought that, but in my time rebutting the many attacks on the Swedish Covid strategy, I’ve discovered that the Norrland region of Sweden is two thirds of the land mass, has only a million people in it and is stunningly beautiful being mostly lakes, forest and mountains. It’s also inhabited by actual swedes. 
 

Just need a Swedish wife........

Christ, you don't want much!

[Loki]

30 minutes ago, Democorruptcy said:

Looking at some places in England mentioned on here, it seems a lot of sales have fallen through. If I was there I'd be trying some very low ball offers hoping to catch some fear. 

Not even thinking about it till end of year

• Winter/Christmas desperate sellers
• Job insecurity
• 'Big kahuna' as per Dave Hunter, or sector rotation as per durhamborn.

Either way I expect the volatility will be the house buyer's friend

[ThoughtCriminal]

7 minutes ago, Knickerless Turgid said:

Christ, you don't want much!

Haha

 

A Swedish wife and a dozen acres in the middle of nowhere and I’ll be like a pig in shit. 😂

[TheCountOfNowhere]

This'll make some on here chuckle.  Killer Bunny is back on TOS predicting pretty much what DB has predicted for a couple of years now.

The funny bit was I had to block him on twitter for his tweets about HPCers being idiots, they were all wrong, house prices aren't going to fall, rates are going up.

He's back, self proclaiming he was right all along.

He'll be along her soon enough....

[sleepwello'nights]

34 minutes ago, ThoughtCriminal said:

Haha

 

A Swedish wife and a dozen acres in the middle of nowhere and I’ll be like a pig in shit. 😂

Needs a lot more global warming before living in the middle of nowhere in Sweden would appeal. The Swedish wife bit sounds OK.

[Barnsey]

25 minutes ago, Loki said:

Not even thinking about it till end of year

• Winter/Christmas desperate sellers
• Job insecurity
• 'Big kahuna' as per Dave Hunter, or sector rotation as per durhamborn.

Either way I expect the volatility will be the house buyer's friend

Wise words @Loki, I was getting a little too optimistic about making some low ball offers straight out of the gate but I think it’s going to take a little time for sellers to realise the gravity of the unemployment situation and the lags at play. Forget all the optimists saying it’s only affecting the low earning renters. What I DO know is the market ain’t going up from here, so at best I’m just losing rent money, but it’s impossible for the housing market to not be affected by the highest unemployment numbers since the early 90s (and that’s EXCLUDING furloughed). The fear of unemployment even for those in “safe” jobs is a mightily powerful force.

What has been a sudden shock is actually going to be more drawn out than I initially thought thanks to all the forbearance and furloughing, and there inevitably will be a small number of buyers who will succumb to committing even in these crazy times. So even though I’ve been waiting to buy for several years now, with various calculations and plans fixating on 2020, I’m now probably looking to buy early 2021, about 6 years after friends jumped into the bubbly SE market which we’ve recently relocated away from.
 

It’s been a real draining slog on my self esteem to be honest, 5 years of waiting for a decent housing market correction is a rather long time when life just seems to be passing by ever more quickly, and I can’t wait to actually just get it over with, but Im pretty sure I can find the strength to hold on a few more months!

[Barnsey]

1 hour ago, Democorruptcy said:

As you know I'm in Wales so still in lockdown. Nothing is happening because hardly anything is coming to market (most recent £680k last sold £285k in 2005) and viewings aren't allowed. Here I don't see my competition as local folk who might be going to lose their job, it's people in secure public sector jobs (!) buying holiday homes to retire to later on. Like a Policeman who bought one he doesn't want to live in for 10 years so it's gone as yet another rental. Looking at some places in England mentioned on here, it seems a lot of sales have fallen through. If I was there I'd be trying some very low ball offers hoping to catch some fear. 

Definitely seeing a LOT of previous STC coming back now, stay focused on your chosen markets as it tells a far greater story than media articles. I’d be expecting some of those holiday homes to be sold off too by business owners desperate for liquidity in coming months.

[Loki]

12 minutes ago, Barnsey said:

t’s been a real draining slog on my self esteem to be honest, 5 years of waiting for a decent housing market correction is a rather long time when life just seems to be passing by ever more quickly, and I can’t wait to actually just get it over with, but Im pretty sure I can find the strength to hold on a few more months

You and me both mate.  We just have to not shoot our load too early 

[M S E Refugee]

1 hour ago, ThoughtCriminal said:

I’ve always thought that, but in my time rebutting the many attacks on the Swedish Covid strategy, I’ve discovered that the Norrland region of Sweden is two thirds of the land mass, has only a million people in it and is stunningly beautiful being mostly lakes, forest and mountains. It’s also inhabited by actual swedes. 
 

Just need a Swedish wife........

It shouldn't be too difficult to find a Swedish wife.

[Don Coglione]

3 minutes ago, M S E Refugee said:

It shouldn't be too difficult to find a Swedish wife.

Or perhaps a Eurovision singer?

1974:

2020:

 

[CVG]

44 minutes ago, TheCountOfNowhere said:

This'll make some on here chuckle.  Killer Bunny is back on TOS predicting pretty much what DB has predicted for a couple of years now.

The funny bit was I had to block him on twitter for his tweets about HPCers being idiots, they were all wrong, house prices aren't going to fall, rates are going up.

He's back, self proclaiming he was right all along.

He'll be along her soon enough....

I saw that and thought about replying but he seemed to be so keen to earn a "I told you so" badge

[TheCountOfNowhere]

7 minutes ago, CVG said:

I saw that and thought about replying but he seemed to be so keen to earn a "I told you so" badge

**** of the day award.

[Barnsey]

34 minutes ago, Loki said:

You and me both mate.  We just have to not shoot our load too early 

If we get a dabble into negative rates, a 15-20% house price correction (non bubble areas) and 10 year mortgage fixes go sub 2%, I’m going balls deep and making my one load count.

[BearyBear]

7 minutes ago, Barnsey said:

If we get a dabble into negative rates, a 15-20% house price correction (non bubble areas) and 10 year mortgage fixes go sub 2%, I’m going balls deep and making my one load count.

I'm kind of the same, -20% would be back to 2010 nominal prices in the areas I like so I'll be buying. The only problem I see is the availability of 5/10 year fixes!  

[AWW]

7 minutes ago, Barnsey said:

If we get a dabble into negative rates, a 15-20% house price correction (non bubble areas) and 10 year mortgage fixes go sub 2%, I’m going balls deep and making my one load count.

I'm of the same mindset, however being in bubblicious north London, I want to see a return to 2010 (when SE really disconnected from the rest of the country, and reality), which is about 30% from here.

With recent reductions, the £1.5m+ market is already flat, in real terms, since 2010, and things haven't even got started yet.  It's only a matter of time until the rest of the market catches up.

[DoINeedOne]

4 hours ago, MrXxxx said:

This. I am surprised by in a SHTF scenario how many on this thread are planning to stay in the UK...i was too, but after the recent/current way Covid19 is being handled I am now looking for a future retirement based overseas, primarily on my radar at the moment is Sweden...any others thoughts?

Started a thread a while back about different places but going forward i think the outlook to most will be different now

 

[Boon]

Regarding equities, does anyone have an opinion on Hargreaves Services? They look quite interesting for an upcoming industrial cycle, with a new carbon pulverising plant (I think this is just a posh name for coal). If oil prices hit massive highs, this may be good for it.

On the negative side the business performance has been very mixed with acquisitions and disposals hitting the bottom line. Cash flows are much better than the reported figures with large depreciation charges every year. But at the current share price it trades underneath book value, although a good chunk of that is PPE.

[Sugarlips]

33 minutes ago, Barnsey said:

If we get a dabble into negative rates, a 15-20% house price correction (non bubble areas) and 10 year mortgage fixes go sub 2%, I’m going balls deep and making my one load count.

Well with any luck you’ll get a good deal eventually. Out here Perth is now back at 2006 prices and people seem to have been swimming naked for years just paying the interest but the chickens have come home to roost now.

I bought it for $670,000 … and I'll be lucky if I'm able to sell it for $400,000."

 

The two-bedroom, two-bathroom house in the inner-city area of West Perth has been on the market for five weeks, but Mr Grimes has wanted to sell it since 2017 when his interest-only loan was converted to principal and interest.

"Originally when I bought that place I was getting $895 a week in rent and now I get about $415 a week," Mr Grimes said.

"That coupled with [paying] principal and interest, there has been a big hit to our cash flow."

https://www.abc.net.au/news/2020-05-19/coronavirus-combines-with-end-to-interest-only-home-loans/12252828?section=business

[Craig]

1 hour ago, Knickerless Turgid said:

Or perhaps a Eurovision singer?

1974:

2020:

 

Dammit, she was actually Polish, but going to post anyway... 

[Democorruptcy]

2 hours ago, Loki said:

Not even thinking about it till end of year

• Winter/Christmas desperate sellers
• Job insecurity
• 'Big kahuna' as per Dave Hunter, or sector rotation as per durhamborn.

Either way I expect the volatility will be the house buyer's friend

The longer the lockdown in Wales goes on the more it suits me. Ideally when it's lifted, initially travel would be allowed within Wales but not by people coming from England. That would reduce competition and give us locals more of an advantage.

[Democorruptcy]

1 hour ago, Barnsey said:

Definitely seeing a LOT of previous STC coming back now, stay focused on your chosen markets as it tells a far greater story than media articles. I’d be expecting some of those holiday homes to be sold off too by business owners desperate for liquidity in coming months.

I'd love to see a lot of holiday homes sold off but a lot of people avoiding council tax by classing their holiday home as a business have qualified for a free £10k business grant. The danger is they use that money as a deposit on another. When it first came out I contacted the Welsh governbankment and said they were rewarding property speculators not businesses.  I've tried again in case they top the grant up and suggested no house ever used for residential purposes should get a grant. I don't see a house let for 140 days as a net economic gain when it could be empty 225 days a year!