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

[AWW]

2 hours ago, Cattle Prod said:

Right on cue...

The thing is, there's already little or no business case for renting out property in the UK, but it doesn't make a blind bit of difference - BTL still pile in. Outwith capital growth, rentals barely wash their face.

[DurhamBorn]

5 hours ago, Cattle Prod said:

Ouch! Also in there is a kite fly about harmonising CGT with income tax. Won't that just incentivise higher rate taxpayers to work part time under the 20% band if they have gains to realise?! Even more home working then, idiots. And Capita joins the wfh overhead party with 45000 staff, shutting 100 offices. That cat out of the bag is jumping around clawing at faces 😂

There should never of been a lock down and now the government are in a huge mess.They won the red wall seats (im in one) with the promise of fairness etc for working class workers who actually work.Instead they have made it so council workers on £35k can sit in the garden all day,while the ones on £21k have to turn in.Not only have they probably destroyed massive amounts of small companies they have also pushed an even bigger wedge between welfare claims and mostly public sector workers and working class who actually work in factories/shops/carers etc.The government as it stands is in tatters.

The tax increases will be tiny compared to the spending and it will need massive amounts of QE.

Everything is building to highlight we are right to stick to the de-complex trades as the economy shifts around and inflation builds.

We could be looking at a £150 billion structural deficit,bond holders are going to get shafted.

[JMD]

8 hours ago, sancho panza said:

It's funny how Bozza was banging on about being Churchillian when he took us into lockdown.Then the economy tanks,and he's being Churchillian about us going to fight the panicdemic by going to coffee shops and buying a croissant.

Words fail me.This country is headed to a very dark place if we don't get some better leaders at the top.

SP, I agree that we need 'leaders', I've said as much many many times. Recently however I had a scary 'lightbulb moment' when I realised that the old adage of people getting the leaders they deserve is not mere cliche - that is what's going on here. After all we do live in a democracy (well sort of, but that is not really the crux of the problem now facing us) and so the voter that sustains and encourages our politicians is also complicit and far from blameless. It's not even about politics in my opinion, the last century or two have shown how empty and temporary 'political ideals' are, and the disfunctional Labour and Conservative parties of today tell me that we have come to the end of the road. Such parties are spectacularly incapable of governing, and I guess all we can now anticipate is having our own Trump 'anit-politician' in the near future. I confess things do look very gloomy, but for me the solution is for people to realise that rule of law, property rights, free association, free speech are the crucial elements and mostly all else is window dressing. I admit that the Covid-era we now find ourselves living under has made me more libertarian, and the thought of a more powerful centralised state Is I think a very scary but very real prospect.

[Lightscribe]

1 hour ago, JMD said:

 I admit that the Covid-era we now find ourselves living under has made me more libertarian, and the thought of a more powerful centralised state Is I think a very scary but very real prospect.

But that’s no longer a Libertarian concept. If you were a anti-globalist, anti-authoritarian, anti-censorship, pro-freedom of speech etc in the 70-80’s you would have been left wing.

Now the world has bee turned on its head and the media narrative leads peoples thinking and views. The same views as above are now right wing traits, and any deviation from the status quo will see you labelled as such.

[jamtomorrow]

Another one to watch if you want to work out whether government "gets it" on industrial strategy - should be a 100% no-brainer to keep ARM British, very bad sign if this is fumbled.

https://www.cambridgeindependent.co.uk/business/hermann-hauser-three-reasons-why-the-sale-of-arm-to-nvidia-would-be-a-disaster-9120946/

Hermann Hauser has said the potential sale of Arm Holdings to Nvidia would be a disaster for Cambridge and the UK - and would fuel the trade war between the US and China.

He has called on the UK government to intervene and revealed that he had spoken to the London Stock Exchange about the idea of taking Arm public.

Talking to the Cambridge Independent from his farm in New Zealand, where he spends the UK winters and has remained during the coronavirus pandemic, Dr Hauser said the country’s technology sovereignty is at stake in the proposed deal.

It was in 1990 that he spun out the Cambridge-based chip designer from Acorn.

Today, the company is behind the technology used in virtually all smartphones.

It was acquired in 2016 for $32billion by Japanese conglomerate Softbank, which posted a $12.7billion loss for the year ending March 31 - its first loss in 15 years.

Softbank is understood to be in talks about selling on Arm to US-based Nvidia , which last month took over Intel as the world’s most valuable chip company - and now boasts a market capitalisation that has soared over £300billion.

“It will be a disaster for three main reasons,” said Dr Hauser. “The most pertinent to Cambridge is the job losses that will inevitably go with moving headquarters to Silicon Valley.

“Nvidia, of course, bought Icera from Bristol in 2011 and there were about 300-plus people.”

That $367million acquisition was intended to help Nvidia engage with the smartphone revolution. Instead, the company announced it was closing down Icera in 2015.

“I wouldn’t expect Nvidia to sack all Arm people, but if the centre of gravity moves to Silicon Valley, inevitably Cambridge will reduce in importance, and there are good designers in Silicon Valley too. That’s the first problem.

“The second problem is it destroys Arm’s neutrality, which is the fundamental reason why we spun out Arm from Acorn in the first place.

“I argued at the time that people wouldn’t buy a microprocessor from a competitor and most of the 500-plus licensees that we have at Arm are competitors of Nvidia.”

Today, Arm’s computer chip designs and instruction sets, defining how software controls processors, are licensed for others to use in their devices.

This business model is at the heart of the Fulbourn Road-based company’s success, and has taken its technology into all of our homes.

“But by far the worst is the third reason - technology sovereignty,” continued Dr Hauser. “We’ve been complaining about the dominance of Google, Amazon, Netflix and Facebook in different areas, and there has been lots of discussion about how we in the UK and Europe have managed to allow this to happen.

“With an Arm sale, we pass the last great European semiconductor company that has a global dominance in smartphones to the Americans.

“Of course, it becomes a division of Nvidia, it comes under the CFIUS [the Committee on Foreign Investment in the United States] regulations, which means if we want to use our own, Cambridge-designed microprocessors in the UK, we’ll have to ask the President of the United States to do so, which is not a very good outcome.

The best option, he suggested would be an initial public offering (IPO), taking Arm public.

“The main sensible alternative is what Softbank has wanted to do with Arm along, which is to IPO it.

...

[leonardratso]

nothing to do with this thread, but for you home growers and other seedy type guys;

https://www.dailymail.co.uk/health/article-8676819/You-eating-killer-courgettes.html

I know its daily mail, but its one of those rare atricles that have been cut and paste from someone who knows what they are on about. Im not that way inclined but some of you preppers or even cost cutters are and i actually learnt quite a bit from it.

Ive no idea how i got to that article, and i know i started trawling after antiques roadshow when some old duffer turned up with a vickers machine gun from WW1 that was worthless now and i started here

https://en.wikipedia.org/wiki/Vickers_machine_gun

and ended up at the above? who knows how this stuff comes about, hehehehe, random trawling.

[Democorruptcy]

7 hours ago, DurhamBorn said:

There should never of been a lock down and now the government are in a huge mess.They won the red wall seats (im in one) with the promise of fairness etc for working class workers who actually work.Instead they have made it so council workers on £35k can sit in the garden all day,while the ones on £21k have to turn in.Not only have they probably destroyed massive amounts of small companies they have also pushed an even bigger wedge between welfare claims and mostly public sector workers and working class who actually work in factories/shops/carers etc.The government as it stands is in tatters.

The tax increases will be tiny compared to the spending and it will need massive amounts of QE.

Everything is building to highlight we are right to stick to the de-complex trades as the economy shifts around and inflation builds.

We could be looking at a £150 billion structural deficit,bond holders are going to get shafted.

Levelling up they said for the red wall seats?

Free £15,000 stamp duty bung for folk well off enough to buy a £500,000 or more expensive second home or BTL.

64 million Eat Out to Help meals, with some folk saying they are eating out every day it's on, must be a bit galling for those at the food banks.

[DurhamBorn]

22 minutes ago, Democorruptcy said:

Levelling up they said for the red wall seats?

Free £15,000 stamp duty bung for folk well off enough to buy a £500,000 or more expensive second home or BTL.

64 million Eat Out to Help meals, with some folk saying they are eating out every day it's on, must be a bit galling for those at the food banks.

I did notice a woman in my class at school who is "working from home" for the council posted twice a day every week during the eat out help out pictures of her meals.Our Mcdonalds always has a huge line of cars at the drive through,but those days they were line up at the doors for half price,mostly people on bennies.

It seems the only people who didnt get to use the scheme much or at all were people actually going into work.

Still we should be happy on this thread as it all leads to printing and then inflation.

[DurhamBorn]

I just noticed the other day Tesla's worth went past BP,Shell and Exxon added together.

 

[Talking Monkey]

1 hour ago, DurhamBorn said:

I just noticed the other day Tesla's worth went past BP,Shell and Exxon added together.

 

Tesla is just nuts when it implodes it will be remembered for years

[DurhamBorn]

Just now, Talking Monkey said:

Tesla is just nuts when it implodes it will be remembered for years

The irony is they keep issuing stock to the market as well.Amazon have done it for years.Equity holders are funding employees,suppliers,everyone.Tesla can end up with a balance sheet stuffed with cash by simply selling equity to the market.Clownworld.

[leonardratso]

should be ok, clownworld cant go on forever, it might go on longer than me, but even the biggest in the past have come down to zero eventually.

[wherebee]

1 hour ago, Talking Monkey said:

Tesla is just nuts when it implodes it will be remembered for years

Unless Musk develops something insane like workable fusion, or a teleporter. 

In my madder moments I am convinced he is an alien or time traveller sent to fuck about with the 21st century...

[JMD]

15 hours ago, Cattle Prod said:

Wow, so there are practically no professional (in the sense of doing it properly, as a business, ltd company, lots of stock, maintaining them properly) landlords here. Explains the non reaction on propertytribes @JMD

I can't offer you advice on your investment, but I'd look carefully at the yield, and when you are adding in voids, they now need to be a lot bigger. And don't forget that taxes have changed too. Professionals tend to look for an 8% yield min. Leverage is tempting but that supposes things will stay stable for a long time.

Thanks Sancho. That paper...explains a lot. I thought a lot more would have sold up after the tax regime changed. Maybe a lot of them arent paying it anyway 😁

The btl subject is a can or worms with so much entrenched opinion. Not saying you were doing that CP, but having read many posts on propertytribes and for what it's worth I think many landlords 'believe' in property similar to equity investors misplaced belief in stock markets. But understandable I think particularly given many landlords have their whole retirement future riding on their property investment, which explains why, despite popular opinion, why most landlords do look after their tennent's (and despite what the media and various pressure groups would have you think). Not a popular view to express perhaps, but logic should inform most thinking people that the landlord-tennant relationship will always be a fraught one given its roots in feudalism. I wish there was an alternative but are there really any easy solutions? After all it's not for a want of trying. Ie the US has tried its own vast socialised mortgage system (Freddy Mac), and we will shortly embark on a new cycle of mass housing projects. Don't get me wrong - in terms of a functioning community - settled home environments are important, but so are secure jobs, and so to are strong family units... oh well one out of three will have to do for now I suppose.                                                                                                                                                                    You are right about 'vanilla' btl, it isn't profitable enough to be worth the hassle, maybe specialised sectors like holiday let's in the right geographic areas, or providing accomodation to councils for vulnerable people, can be profitable, but again involve much more work.

[JMD]

15 hours ago, Cattle Prod said:

Where did I read that rent controls guarantee urban decay? Looks to be accelerating in NYC. Its a shame, my old man was there in the early 70s and I was there in the mid 90s. He simply couldn't believe what I described to him. Like two different cities. Back to the 70s now I think.

It's strange how the US is characterised as being extreme free market, but it has controlled rents and strictly enforced residential zoning. Away from the topic of housing and I'm reminded of the 1970 'Nixon shock', of course that was to prevent inflation, but still relevant I think to show how interventionist even Uncle Sam can be when it wants.

[JMD]

15 hours ago, Vendetta said:

The rise of the mega-corporations continues. In a 100 years there may only be less than 100 companies in the world....

Maybe we will end up like in the RoboCop film with just one mega corporation running everything, it was called Omni Consumer Products in the film. We do have our very own Google, Amazon, Facebook - with its own thwarted attempt at a crypto currency... But surely the film was just science fiction and such things couldn't happen in real life?

[JMD]

16 hours ago, sancho panza said:

LL's have an aiming marker on their backs politically.Look atnthat Parliamentary paper I psoted.There's only one way thsoe people are going to vote no matter what happens to them.

I fear you're mistaking the LL's complacency for a valid invesment thesis.If you're buying property at these gross yields,possibly exposing your primary residence in any future repossession process,then you need to be careful imho.

I don't know you're financail psotion/proposed LTV, jsut saying you need to be careful having a bet on future interest rates beyond the life of your fixed rate mortgage.I'd aslo look at how long eviction takes for the various scenarios and the costs involved.If you run into the worng tenant ie one who's got a lot of money or one with no money,it could costs years rental income.

https://england.shelter.org.uk/housing_advice/eviction/can_private_tenants_stop_the_bailiffs

https://garner-hancock.co.uk/landlords-legal-service/repossession/

Can I recover costs in possession proceedings?

• Recoverable legal costs fixed by court at a maximum of £292.50[2], but clients will incur hundreds of pounds more in legal fees in attempting to regain possession.

Thanks SP, I plan to tread very carefully and do appreciate that there are very few worthwhile property investments these days.

[JMD]

7 hours ago, Sideysid said:

But that’s no longer a Libertarian concept. If you were a anti-globalist, anti-authoritarian, anti-censorship, pro-freedom of speech etc in the 70-80’s you would have been left wing.

Now the world has bee turned on its head and the media narrative leads peoples thinking and views. The same views as above are now right wing traits, and any deviation from the status quo will see you labelled as such.

I think agreement on political definitions today is a difficult enough task, what with everyone having their 'own truth'... but your idea of relating todays thoughts and beliefs back to their 1980's equivalents is I think a truly alarming concept. Do you perhaps work for one of those topsy-turvy media outlets that you criticise?                                      Sideysid, please don't take my remarks too seriously. I think I actually agree with you. Truth being the new heresy and all! But answer me this if you will... As you bought up the 80's, back then I would have supported Dr David Owen's SDP and which at the time would have 'made me' right wing, however today (the SDP are still around) I would be defined as left wing. Does this thought experiment support or contradict your argument? 

[wherebee]

2 minutes ago, JMD said:

I think agreement on political definitions today is a difficult enough task, what with everyone having their 'own truth'... but your idea of relating todays thoughts and beliefs back to their 1980's equivalents is I think a truly alarming concept. Do you perhaps work for one of those topsy-turvy media outlets that you criticise?                                      Sideysid, please don't take my remarks too seriously. I think I actually agree with you. Truth being the new heresy and all! But answer me this if you will... As you bought up the 80's, back then I would have supported Dr David Owen's SDP and which at the time would have 'made me' right wing, however today (the SDP are still around) I would be defined as left wing. Does this thought experiment support or contradict your argument? 

Sideysid is right.

Original, old Labour (unions, NHS) was firmly pro-empire and anti-immigration, and anti-EU.  Left wing, protecting the value of labour against international owners of capital.  hell, as late as mid 2000's we were still seeing riots at the G20 against globalisation!

New Labour and the progressive left went firmly pro-globalism, pro-open borders (mass immigration), anti-native culture for the west big time.  

It's only explainable by having a population that ignores history and a media that will never question sacred idols.  Imagine a journalist reading anti-immigration quotes from the old leaders of the labour party to Keir Starmer and asking him to comment?

[JMD]

43 minutes ago, wherebee said:

Sideysid is right.

Original, old Labour (unions, NHS) was firmly pro-empire and anti-immigration, and anti-EU.  Left wing, protecting the value of labour against international owners of capital.  hell, as late as mid 2000's we were still seeing riots at the G20 against globalisation!

New Labour and the progressive left went firmly pro-globalism, pro-open borders (mass immigration), anti-native culture for the west big time.  

It's only explainable by having a population that ignores history and a media that will never question sacred idols.  Imagine a journalist reading anti-immigration quotes from the old leaders of the labour party to Keir Starmer and asking him to comment?

Danger of thread derailment perhaps...?                                                                                                                                                   But again I think I agree with the points made. Yes the media has a lot to answer for. However I just want to be clear that I have no problem with political parties changing their policies. I think its the voters 'fault' if they continue to blindly vote for the same parties. The lib/lab/con have all done it. That's why I used my favoured libertarianism as it has so few edicts/policies that it doesn't/can't change over time.                                                                                                                               The interesting question for me is why for example did the labour party change tack, away from economic/class socialism to social justice/identity socialism. I guess because the cracks in the economic theory had become all to clear.

[wherebee]

Sorry, yes, we have a whole forum for that stuff.  I'll stop.

[CVG]

Baby steps:

https://www.theargus.co.uk/news/18686884.hydrogen-powered-double-decker-trial-takes-place-crawley/

"WORLD-FIRST trials of a double-decker bus powered by hydrogen have taken place.

Wrightbus trialled its double decker prototype in Crawley on Wednesday in a major step forward in efforts to tackle climate change.

Hydrogen fuel generates no carbon dioxide emissions when burnt, instead producing water.

Wrightbus owner Jo Bamford hopes to bring the buses to Brighton once trials are successful.

Transport for London has already ordered 20 of them"

 

[Noallegiance]

6 hours ago, JMD said:

Maybe we will end up like in the RoboCop film with just one mega corporation running everything, it was called Omni Consumer Products in the film. We do have our very own Google, Amazon, Facebook - with its own thwarted attempt at a crypto currency... But surely the film was just science fiction and such things couldn't happen in real life?

Watch Mr Robot.

We have E Corps.

[Democorruptcy]

23 hours ago, Vendetta said:

The rise of the mega-corporations continues. In a 100 years there may only be less than 100 companies in the world....

A 2 part program from 3 years ago about big technology firms.

The Secrets of Silicon Valley

[Bricks & Mortar]

Judy Shelton, (Fed board nominee, awaiting Senate approval), tweeted this morning.  she doesn't tweet often.  Just a link to this story:

I'm thinking, Powell spelled it out last week.  But it's going to take a short while for large institutions to have board meetings, discuss the implications, and change their investment strategies.  That process is probably on the agenda this week for many of them.   Items like this are reinforcement for the less financally literate board members.

https://www.wsj.com/articles/a-flexible-fed-means-higher-inflation-11598796001?mod=hp_lista_pos1