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


spunko

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2 hours ago, JMD said:

I am 'intrigued' by your oblique reference to East Germany ....Ok, I'm not too proud to ask - I don' un'staan' yer, what do yer mean fella?!? 

It wasn't meant to be oblique.  East Germany ran a repressive regime which collapsed when the people, especially youth, turned.  No escape valve.  Under siege, in this case with the West as the bogyman, only lasts so long.  You need a valve.  Like giving the lads some shore leave and cleaning up the mess afterwards.

However, I've found the recent comments about the behaviours after lockdown (real or fake) to be interesting.  We're dealing with the expected majority here but there will be a wide spread of behaviours which will also change over time.

I don't know which way the majority will go but as a counterpoint to the somewhat romantic narrative, I recall those seriously scared both on the giving and receiving ends slipping quietly off into the night.  Maybe the partying will be reserved for the same old, those who had a good lockdown. 

To me, this lockdown and the rest has been a dirty business, a stain.

PS: The East German narrative plays to a growing bee in my bonnet about how relatively well, yet again, the public sector has done out of covid.  Furlough was primarily a government employee thing, exclusively not any more, plus special treatment by the corporates, even the recent opening of their own shop.  "Key workers" like the rest of us are nothings.  Are they the new party members?

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44 minutes ago, MrXxxx said:

....a we have our very own 21st Century Churchill...let's just hope this war doesn't last 6 years!

The question du jour, who will they put on the poster?

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One thing to consider with banking, the Fin sector and London in general is this lady.

Image result for the queen

What's often forgotten is the aristo's interests in those sectors.   One of the reasons why i don't think there will be much in the way of movement out of London of power or wealth, is who benefits from it staying.

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6 hours ago, Hancock said:

I'm following this path, as my mind can't do complex anything these days so need to keep things simple.

Sold RM for kids Junior ISA this week; and ITV from SIPP, along with a few goldies before the crash (at a profit) which in hindsight was a schoolboy error. So from here on in i'm just buy and leave kind of kid.

I can see consumer shares going if/when lockdown ends, but fucked if i know which ones so i'll keep away.

Anyway below is my holding plus got£3300 in cash with an additional £20,000 once invoices get paid/ and all work is complete.

I was 100% certain of there being an epic crash on the horizon this time last year, but anything can happen from here in IMHO. I don't really think anyone on here is sure either way. So don't know whether to just dump the £22330 in soon or wait for a year or so. 

Pissed i only put a grand in HZM, will let it run until the end though, could be my 50 bagger.

image.png.a570565523decbea93ea81edb26947cd.png

image.png.fbf6fbbc936615a4c70947ba0d83e634.png

 

 

 

That's brave to post but not foolish or chest beating.  I see you've highlighted my ones in red!  Motivational!  I know some POs.  You could see it in their eyes and grey faces.  Glad you're out!

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Transistor Man
6 hours ago, Yadda yadda yadda said:

What was the symbolic top of the 2000 tech bubble? I remember lastminute.com making the news with an IPO and vaguely recollect it all collapsing soon after. I think this is when the general public bought in. Is my memory correct?

I think a big one was AOL Timer Warner Merger, Jan 2000. 

Barron’s “Burning Fast” cover, March 2000, is often said to be the peak.

(A small university spin out I used to visit was bought for 750 million dollars, in April 2000)

image.jpeg.c0750ef6ef60262cc0b2471243426969.jpeg

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Yadda yadda yadda
1 hour ago, Harley said:

PS: The East German narrative plays to a growing bee in my bonnet about how relatively well, yet again, the public sector has done out of covid.  Furlough was primarily a government employee thing, exclusively not any more, plus special treatment by the corporates, even the recent opening of their own shop.  "Key workers" like the rest of us are nothings.  Are they the new party members?

Furlough has been a service sector thing, mainly. Shops & hospitality. I know of people in industrial sales who were also furloughed but that soon turned to redundancy. Anecdotally plenty of people who were made redundant were able to get new jobs. So long as they were prepared to do something different. Grafters.

Some shop workers have been taken off furlough of late. Dispatching online orders in one case. Demonstrating furniture online in another.

Public sector workers haven't been furloughed. They've just been paid for staying at home.

It is beyond time the public sector was squeezed in comparison to the private sector. Although I would prefer if it was through private sector wage growth.

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4 hours ago, Cattle Prod said:

Thanks, I need to have a good think about how this works. I mean we've all heard our parents banging on about double digit interest rates (usually not mentioning the high inflation that went with that). But in my case anyway, there were no credit cards or bank loans, no cars on finance and mortgages were very hard to get, cap in hand to the bank manager stuff. I don't know if bank credit was restricted then, or just wasn't available, but you had all three things in the late 70s early eighties: no bank credit, high interest rates and high inflation.

Restrict bank credit to control inflation? I know the high rates of tax were to try and control inflation, so restricting credit could have been another tool. The flip side is for those people who were able to get a mortgage, as long as they didn’t lose their job they were set up for life. My old man bought a house in his twenties and managed to pay off his mortgage in four years, thanks to the inflation of the seventies (and doing loads of overtime whilst having two lodgers).

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sleepwello'nights
7 hours ago, working woman said:

 

Looks like I will have to go and get the hammer out and put the mirror up myself.

 

As a practical DIY tip, be careful putting up a mirror with a hammer :D

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Bobthebuilder
2 minutes ago, sleepwello'nights said:

As a practical DIY tip, be careful putting up a mirror with a hammer :D

A hammer drill would be more appropriate.

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4 hours ago, Yadda yadda yadda said:

Time will tell and I could well be wrong. There will be changes, that is inevitable. In your prison scenario you saw people who were still in prison and not after they were released. Although I expect a lot returned because they resumed their old behaviour patterns at some point after release. The whole country will be metaphorically released from prison. Although it seems like we will be going into open prison of varying harshness for an unquantified period first.

When pubs are open people will want to go even if they intend to only go once for 'old times sake'.

It may be some time before it all really kicks off as the old especially will be wary for a long while. Pubs might have to cater more for younger people again. Eventually older people will think they're missing out on what life they have left.

If people can predict which areas do well on reopening they could make a lot of money. More even than purely following the advice of this thread. Unfortunately I can't think what will do best and certainly not when.

Youth travel. Buy hostels is what I’m thinking. I’m hoping for a pull back in Hostelworld.

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Bobthebuilder
1 hour ago, Harley said:

It wasn't meant to be oblique.  East Germany ran a repressive regime which collapsed when the people, especially youth, turned.  No escape valve.  Under siege, in this case with the West as the bogyman, only lasts so long.  You need a valve.  Like giving the lads some shore leave and cleaning up the mess afterwards.

However, I've found the recent comments about the behaviours after lockdown (real or fake) to be interesting.  We're dealing with the expected majority here but there will be a wide spread of behaviours which will also change over time.

I don't know which way the majority will go but as a counterpoint to the somewhat romantic narrative, I recall those seriously scared both on the giving and receiving ends slipping quietly off into the night.  Maybe the partying will be reserved for the same old, those who had a good lockdown. 

To me, this lockdown and the rest has been a dirty business, a stain.

PS: The East German narrative plays to a growing bee in my bonnet about how relatively well, yet again, the public sector has done out of covid.  Furlough was primarily a government employee thing, exclusively not any more, plus special treatment by the corporates, even the recent opening of their own shop.  "Key workers" like the rest of us are nothings.  Are they the new party members?

Been trying to write a decent response to this but failed.

Great post Harley.

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1 hour ago, Harley said:

"Key workers" like the rest of us are nothings.  Are they the new party members?

This is exactly what I thought when it was decided to keep schools open for the children of key workers.

Like those of us in the private sector are just working for a jolly.

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sleepwello'nights
4 minutes ago, Castlevania said:

Restrict bank credit to control inflation? I know the high rates of tax were to try and control inflation, so restricting credit could have been another tool. The flip side is for those people who were able to get a mortgage, as long as they didn’t lose their job they were set up for life. My old man bought a house in his twenties and managed to pay off his mortgage in four years, thanks to the inflation of the seventies (and doing loads of overtime whilst having two lodgers).

That's when the first house price booms started. In the mid to late 60's my sister bought an an average suburban semi for £4k. It needed some work so was a bit cheaper than most. In the late 60's I recall one year where a small terrace house more than doubled in price from a few thousand to £10k. 

That was the year when I changed my car. If I'd used the money to put down as a deposit on a house I would have cleared £5k by the end of the year. To put it in context an Aston Martin DB5 or 6 was about £5k new. Mind you one of them has more than kept up with inflation if you look at the prices they are currently fetching. 

As far as employment went they were times of boom and bust. Strikes were commonplace and workers were often laid off, without pay, and benefits were much lower if they were available at all. 

If you wanted a mortgage then you would have to apply to a building society, if your loan was approved then it could take up to a year for the funds to be available for release. Easy credit wasn't a known concept. None of these restrictions stopped prices rising with the increased demand from the "boomers" who were reaching the age when they started to marry and have children. 

It was not known that buying a house would set you up for life. That was a happy consequence that my generation are resented for now. Not that I made much from property then, not until the turn of the millennium and the early 2000's for me. 

Times change and how to read how the changes will affect you and how to adapt to them is never easy. 

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4 minutes ago, sleepwello'nights said:

That's when the first house price booms started. In the mid to late 60's my sister bought an an average suburban semi for £4k. It needed some work so was a bit cheaper than most. In the late 60's I recall one year where a small terrace house more than doubled in price from a few thousand to £10k. 

That was the year when I changed my car. If I'd used the money to put down as a deposit on a house I would have cleared £5k by the end of the year. To put it in context an Aston Martin DB5 or 6 was about £5k new. Mind you one of them has more than kept up with inflation if you look at the prices they are currently fetching. 

As far as employment went they were times of boom and bust. Strikes were commonplace and workers were often laid off, without pay, and benefits were much lower if they were available at all. 

If you wanted a mortgage then you would have to apply to a building society, if your loan was approved then it could take up to a year for the funds to be available for release. Easy credit wasn't a known concept. None of these restrictions stopped prices rising with the increased demand from the "boomers" who were reaching the age when they started to marry and have children. 

It was not known that buying a house would set you up for life. That was a happy consequence that my generation are resented for now. Not that I made much from property then, not until the turn of the millennium and the early 2000's for me. 

Times change and how to read how the changes will affect you and how to adapt to them is never easy. 

You had an Aston Martin?

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The money just moves from one asset class to the next....

Follow the money.....

Housing.... stocks..... Bonds..... tech stocks..... commodities.....oil..... housing....... gold......stocks....... tech stocks..... bitcoin......  back into commodities......

Asset bubbles building and popping one after another......

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sleepwello'nights
Just now, Castlevania said:

You had an Aston Martin?

No, I bought a Mk 1 Cortina 1500. If only I'd used the money as a deposit on a house or a flat.

Home ownership was only for the rich middle class then, not poor working class children from a council estate.  

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5 minutes ago, sleepwello'nights said:

No, I bought a Mk 1 Cortina 1500. If only I'd used the money as a deposit on a house or a flat.

Home ownership was only for the rich middle class then, not poor working class children from a council estate.  

One of my old neighbours was that. Working class, council estate. Bought a house in the early seventies when everyone told him he was a fool. Had paid it off within 10 years thanks to the inflation. Set up for life.

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Transistor Man
4 minutes ago, Castlevania said:

One of my old neighbours was that. Working class, council estate. Bought a house in the early seventies when everyone told him he was a fool. Had paid it off within 10 years thanks to the inflation. Set up for life.

Exactly the Same with my Dad, bought 1971. 

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1 hour ago, Harley said:

That's brave to post but not foolish or chest beating.  I see you've highlighted my ones in red!  Motivational!  I know some POs.  You could see it in their eyes and grey faces.  Glad you're out!

I was thinking i was the only one with a load of reds.

I posted it about a year ago when i was well down; strangely i was more bothered that my kids Junior ISA was down a few grand than i was about my SIPP being down £25/30 grand.

My intention at the start of all this was to stick it all in gold and silver mining shares for a shit or bust scenario, pity i lost my bottle and started to think i was clever by buying other stuff sometime after that decision.

But it's all down to Mr DB starting this topic on HPC, wasn't for him i'd probably have some shite unit trust with huge annual fees.

Just need to find a desperate house seller in the next 6 months, then i can relax.

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7 minutes ago, Hancock said:

Here is a good safe bet for anyone wanting to become rich -
https://www.telegraph.co.uk/business/2021/02/13/exclusive-neil-woodford-launch-comeback-fund-says-sorry-did/

DT giving him free advertising on a Saturday night.

image.png.1af3869ca6deb7bcb786633694535a95.png

im drooling at the mouth to invest my life savings of £3.27p into his new 'vehicle', i hope his charges and fees are off the fucking scale again and they are due for eternity even after death.

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fooking hell, he was forced to sell his £30M home, my god, get a gofundme started for him immediately, ill chip in 4pence for the cunt.

makes uncle terry look calm and conservative, hahaha, oh hang on he is by comparison. At least uncle terry wouldnt pay HL to promote him as a rich list star buy, ill give him that.

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Bobthebuilder

Neil "fill your boots" Woodford was pulling £60 mill a month in fees out of his old fund. "you're not the new messiah, just a naughty boy".

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