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

[King Penda]

54 minutes ago, Harley said:

We've still got most of the stuff.  We'd better spend the weekend stocktaking.  Maybe implement a stock control system.

Wish I could go panic buying 

[DurhamBorn]

1 hour ago, Yadda yadda yadda said:

We were discussing a bloke who was let go from my place around a year at work today. Got a job for a little while but doesn't see the point in working at the wages he has been offered. He can get the same on benefits with two kids. Probably worked non-stop for 15 years until now.

Slumlords. Their tenants will get what they're offered as they won't be paying.

Its a bit different for me because im sort of retired at 49,but iv turned down dozens of jobs since Feb and some with blue chip employers.You can hear them on the phone that they are struggling to get decent people.I always tell them the same thing,its not enough money,or usually i tell them its nowhere near enough,or if its good money i tell them im not working weekends or nights etc.Last few places  iv noticed most of the younger workers didnt give a toss.

Welfare has destroyed the need to work for about 50% of people with children.The government needs the others to work 30 years none stop to buy a slave box.

 

[Yadda yadda yadda]

5 minutes ago, DurhamBorn said:

Its a bit different for me because im sort of retired at 49,but iv turned down dozens of jobs since Feb and some with blue chip employers.You can hear them on the phone that they are struggling to get decent people.I always tell them the same thing,its not enough money,or usually i tell them its nowhere near enough,or if its good money i tell them im not working weekends or nights etc.Last few places  iv noticed most of the younger workers didnt give a toss.

Welfare has destroyed the need to work for about 50% of people with children.The government needs the others to work 30 years none stop to buy a slave box.

 

A friend of mine is about your age. Took redundancy from a well paid but stressful job around five years ago. Hasn't worked since apart from a small amount of online selling. Now he has sold up down here and is moving his family to the small northern town he grew up in. No intention to ever work again.

[JoeDavola]

14 minutes ago, DurhamBorn said:

Welfare has destroyed the need to work for about 50% of people with children.The government needs the others to work 30 years none stop to buy a slave box.

Yeah I can't help but think of the eternally inflating housing costs relative to wages for the ever-shrinking pool of people who need to work to pay for their shelter is seen as a necessity by the state to ensure that they need to work and pay tax until they die basically.

I think ideally they want the answer to "how much is it to own/maintain house" to basically be "all your spare money every month until you die". In parts of the UK it appears to be at that level.

[Transistor Man]

2 hours ago, planit said:

Exactly, the calc I posted on here a few days ago showed we needed 2.5 times the current electricity supply to do the vehicles. Would be over 3.5 to replace gas heating with electric (even if we all had heat pumps, 'convenience' heating using conventional heat would add a lot).

 

Politicians annoy me. I did some research to confirm my feelings [and assumptions] on biomass over the weekend after getting a question from a chemistry teacher. It was worse than I thought. The paper decided it took between 50 and 120 years for the extra CO2 to be absorbed resulting in extra global warming during the entire period.

The main argument for biomass seems to be that CO2 which was fixed 200 million years ago is different than CO2 fixed 50 years ago.

@sancho panza I would have guessed going all EV would have added a very considerable demand. But McKinsey and National Grid say otherwise. 

I was at my parents house last week, I will ask my Dad next time, as he worked in electricity distribution for 40 years.

 Talking of biomass, my Dad’s hobby is running the house’s radiators and hot water, via a back boiler, by burning collected wood - mostly pallets. 

They don’t hold back: big house, big hot water tank. Over the winter, he burns 24 kg of wood an evening! And has 5 tonnes collected by October. 

(They do burn some coal, but not much)

[MrXxxx]

4 hours ago, JoeDavola said:

Yeah I'm stocking up at the moment just like I did in Feb 2020.

Forget panic buying like you did in Feb2020, I want another opportunity to panic buy like I did in Mar2020, as being new to investing then I didn't appreciate what a golden opportunity it was! :-)

[Harley]

2 minutes ago, MrXxxx said:

Forget panic buying like you did in Feb2020, I want another opportunity to panic buy like I did in Mar2020, as being new to investing then I didn't appreciate what a golden opportunity it was! :-)

Yep, I was too burnt out by then buying me crates of UHT so missed it.  Gotta pace meself next time.

PS: Just had our BBD Dec20 prunes in a home made brownie and they tasted fine.

[DurhamBorn]

On welfare it needs to be remembered though that massive welfare spending and the printing to go with it is a disaster for single unemployed.£74.70 a week £117.40 for a couple.The massive amounts for children and made up disability is where the money is.Most of the single mothers raking the money in get a huge shock once the child bennies stop.

Inflation is rampant in the basics and will be a disaster for those on those rates above.The woman over the road from me getting £500 a week + selling balloons on the side,+ two of the childrens dads there regular handing over money is laughing and forcing other welfare claims into massive poverty.

The left are squealing for the £20 covid uplift to be kept,but so far Sunak looks to be saying no,time will tell.

 

[wherebee]

6 hours ago, JoeDavola said:

Yeah I can't help but think of the eternally inflating housing costs relative to wages for the ever-shrinking pool of people who need to work to pay for their shelter is seen as a necessity by the state to ensure that they need to work and pay tax until they die basically.

I think ideally they want the answer to "how much is it to own/maintain house" to basically be "all your spare money every month until you die". In parts of the UK it appears to be at that level.

I've said to my kids that our house is big enough for them to live in long term.  The future (assuming no end of world vaxx holocaust) is one of back to the 20's and 30's - the vast majority will rent, middle class will erode, and home ownership will be dependent on generational wealth, not work.

Yay for globalisation.

[MrXxxx]

6 hours ago, DurhamBorn said:

Inflation is rampant in the basics and will be a disaster for those on those rates above.The woman over the road from me getting £500 a week + selling balloons on the side,+ two of the childrens dads there regular handing over money is laughing and forcing other welfare claims into massive poverty.

This goes to show how society has changed, and why the benefits system is due a overhaul. I n my Grandparents time people would have felt shame everyone knowing this, but now it appears a `Badge of honour`....the result?...something that was a good thing for the working class has now become a bad thing (except for the shameless few).

[Boon]

I know nothing about the benefits system.... but googling it Child Benefit is £21.15 a week - is that correct? 

It seems to have gone up pretty crappily over the years.... ie in 1995 a lone parent would have gotten £16.70.

In real terms (not the official inflation figures) I'm guessing it should be over double that to have the same purchasing power.

[dnb24]

for anyone interested in geopolitics and the movement of the US out of Afghan and China moving into Afghan - an interesting piece -
https://www.9dashline.com/article/will-china-get-embroiled-in-the-graveyard-of-empires

[Yadda yadda yadda]

9 hours ago, DurhamBorn said:

On welfare it needs to be remembered though that massive welfare spending and the printing to go with it is a disaster for single unemployed.£74.70 a week £117.40 for a couple.The massive amounts for children and made up disability is where the money is.Most of the single mothers raking the money in get a huge shock once the child bennies stop.

Inflation is rampant in the basics and will be a disaster for those on those rates above.The woman over the road from me getting £500 a week + selling balloons on the side,+ two of the childrens dads there regular handing over money is laughing and forcing other welfare claims into massive poverty.

The left are squealing for the £20 covid uplift to be kept,but so far Sunak looks to be saying no,time will tell.

 

The idea that welfare was to help people through tough times has been lost. Even my lefty work colleagues* believe benefits should not be a lifestyle choice. Yet they'd parrot the BBC line if someone considered cutting welfare. If we end up in a prolonged recession people will want to see benefits overall cut but a realignment where the unemployed without children get more. Right now anyone who really wants a job can get one. If that changes then the benefit reform wil be high up the agenda.

I support retaining the extra £20 per week for the unemployed who claim no other benefits. Paid for by cutting, or at least freezing, the various family benefits.

* Work colleagues obviously work so they're not a representative sample of the population. They have some 'old fashioned' views that people who can work should work. Amongst the women that men should provide for their families. The men think this too but it is more notable amongst the women. That benefits, excluding those for serious disabilities, should be for the short term whilst people find a new job. That work should pay a lot more than welfare.

1 hour ago, Boon said:

I know nothing about the benefits system.... but googling it Child Benefit is £21.15 a week - is that correct? 

It seems to have gone up pretty crappily over the years.... ie in 1995 a lone parent would have gotten £16.70.

In real terms (not the official inflation figures) I'm guessing it should be over double that to have the same purchasing power.

In 1995 there was not a plethora of other benefits for parents. Non-working or low hours, low wage parents now claim tax credits and other extras. So those in the middle get less and those at the bottom, often through choice, get a lot more. The purpose of the tax and benefits system is to take from the middle to give to the bottom. The bottom them spend the money so that it flows to the top.

[JoeDavola]

7 hours ago, wherebee said:

I've said to my kids that our house is big enough for them to live in long term.  The future (assuming no end of world vaxx holocaust) is one of back to the 20's and 30's - the vast majority will rent, middle class will erode, and home ownership will be dependent on generational wealth, not work.

Yay for globalisation.

Yes I've completely changed my opinion on kids livng at home long term. I used to think they were 'losers' but now I actually think it's the smart thing to do and should be what any healthy family does. I think the cultures and families that do that are actually being smart and keeping wealth in the family rather than driving the kids out asap to make some other landlord rich.

The family that live next door to my folks have a grown up son early 30's who still lives with them and has moved his hot girlfriend in too - he only needs to work part time. My folks continually slag him off for being so pathetic as to be living at home but he's got the right idea - no rent to pay, low stress work life flash car and a hot girlfriend more fucking power to him.

My brothers best mate same thing his parents let him live at home throughout his 20's didn't charge him a penny and even welcomed two long term girlfriends in over that decade to live with them treated them like family members. Again much mockery from my folks but it sounds very healthy to me.

None of the folk I grew up with rented; never gave a penny to a landlord - they all went from living with their parents to buying their marital home or in one case a bachelor apartment and lucked into buying after the NI crash. I know some people in their early to mid 30's who never met anyone and just never moved out of their parents house ever and they seem happy enough.

I had to move out because home life was so unpleasent for various reasons. I was also paying £250 a month house keeping from the day I graduated on a shitty grad salary that was about £1100 take home pay whilst having bills waggled in my face as they came in "will I get this one will I, Joe?!" as if I was still a freeloader.

In the unlikely event that I have kids I'd want them to stay at home and keep money out of the hands of landlords for as long as possible. Part of the problem these days is that what people are paying top dollar for a 'family' home is often tiny - 80-90 square meters i.e. 870-970 square feet. It's getting very very expensive to get any decent space these days.

My folks have, through sheer luck, ended up in a house that's quite big - about 160 square meters and basically is like owning two houses in one. A massive living room, massive bedroom, even a utility room that could be set up as a kitchen all not in use - they literally never get used and are just sitting empty. Easily enough space for me to move back and have as much space... actually more than I do in this flat. I do sometimes think I should have moved back especially when the lockdown happened but the risk wasn't worth it in terms of finding out it was still a crap environment to live in.

They're wanting to sell it to downsize but I actually think it's a terrible idea as they have a great asset that is in increasingly short supply, space. I hope they don't find anywhere as they'd basically be swapping one house for a smaller older house in a worse location, or even having to spend money for the privilege.

[sancho panza]

7 hours ago, wherebee said:

I've said to my kids that our house is big enough for them to live in long term.  The future (assuming no end of world vaxx holocaust) is one of back to the 20's and 30's - the vast majority will rent, middle class will erode, and home ownership will be dependent on generational wealth, not work.

Yay for globalisation.

The middle class has already been hollowed out,msot of them jsut don't know it yet.

The amount of people I know-including msyelf- on decent salaries courtesy of a permamnent 5%++ fiscal deficit is incredible.County council workers,Leicesterhsire has something like 9 dsitrcit councils plus Leicester city council,NHS,Uni's......................I jsut can't believe how many politicians think hope is a strategy.

 

6 minutes ago, JoeDavola said:

Yes I've completely changed my opinion on kids livng at home long term. I used to think they were 'losers' but now I actually think it's the smart thing to do and should be what any healthy family does. I think the cultures and families that do that are actually being smart and keeping wealth in the family rather than driving the kids out asap to make some other landlord rich.

The family that live next door to my folks have a grown up son early 30's who still lives with them and has moved his hot girlfriend in too - he only needs to work part time. My folks continually slag him off for being so pathetic as to be living at home but he's got the right idea - no rent to pay, low stress work life flash car and a hot girlfriend more fucking power to him.

My brothers best mate same thing his parents let him live at home throughout his 20's didn't charge him a penny and even welcomed two long term girlfriends in over that decade to live with them treated them like family members. Again much mockery from my folks but it sounds very healthy to me.

None of the folk I grew up with rented; never gave a penny to a landlord - they all went from living with their parents to buying their marital home or in one case a bachelor apartment and lucked into buying after the NI crash. I know some people in their early to mid 30's who never met anyone and just never moved out of their parents house ever and they seem happy enough.

I had to move out because home life was so unpleasent for various reasons. I was also paying £250 a month house keeping from the day I graduated on a shitty grad salary that was about £1100 take home pay whilst having bills waggled in my face as they came in "will I get this one will I, Joe?!" as if I was still a freeloader.

In the unlikely event that I have kids I'd want them to stay at home and keep money out of the hands of landlords for as long as possible. Part of the problem these days is that what people are paying top dollar for a 'family' home is often tiny - 80-90 square meters i.e. 870-970 square feet. It's getting very very expensive to get any decent space these days.

My folks have, through sheer luck, ended up in a house that's quite big - about 160 square meters and basically is like owning two houses in one. A massive living room, massive bedroom, even a utility room that could be set up as a kitchen all not in use - they literally never get used and are just sitting empty. Easily enough space for me to move back and have as much space... actually more than I do in this flat. I do sometimes think I should have moved back especially when the lockdown happened but the risk wasn't worth it in terms of finding out it was still a crap environment to live in.

They're wanting to sell it to downsize but I actually think it's a terrible idea as they have a great asset that is in increasingly short supply, space. I hope they don't find anywhere as they'd basically be swapping one house for a smaller older house in a worse location, or even having to spend money for the priveledge.

Joe,I'd agree wholeheartedly,my kids are welcome to stay with me and Mrs P as long as they want.I see kids at work,grad job £25k plus unsocial,£300 pcm lease car,35 year mortgage,by the time they start eating away at their student debt it will have grown to £70k+ and they'll spend the next 30 years servicing the interest till the taxpayer gets the bill when they're 55.

Shocking what they've done.

I live in Leicester,grew up with a lot of Asian families,multi genereational living is normal and encouraged.

When the tide washes out and sterling tanks,the chickens will come home to roost

[JoeDavola]

5 minutes ago, sancho panza said:

I live in Leicester,grew up with a lot of Asian families,multi genereational living is normal and encouraged.

Yes I almost mentioned this - the people who want to by my parents house are Indian and the other interested party are Asians.

Because they're smart and see that they'd be buying enough house for 3 generations (there's 3 fucking bathrooms in the place). No landlords to pay; only one council tax bill and you could easily have 7 or 8 people living there.

That's how these communities are building wealth faster than the average white person. They aren't kicking the kids out to a landlord, and once they do buy that house they'll keep it in the family.

As I say I hope my parents don't find a house as I think they'd be trading down from what they have.

[sancho panza]

2 hours ago, dnb24 said:

for anyone interested in geopolitics and the movement of the US out of Afghan and China moving into Afghan - an interesting piece -
https://www.9dashline.com/article/will-china-get-embroiled-in-the-graveyard-of-empires

A few piccies that show some of the highways there.And these are the main roads through Helmand.Helmand wasn't too rocky compared to where the US was.Impassable in places if you stick one bloke with a rocket launcher behind a bush.Unrepressible in other ways as the local people will fight,they don't care how big your gun is compared to theirs.

I think the Chinese will learn the lesson the Russians/Yanks/we did.No matter what I may think of the Chinese,I spare a thought for their Toms.

Great article.

[Harley]

22 hours ago, DurhamBorn said:

I like high debt to equity on the telcos because i think the bond holders will end up funding the equity holders through inflation in that fixed coupon low rate debt funding infrastructure that will depreciate at a fixed rate while prices increase is  a way to leverage inflation.If this dis-inflation carries on though and this inflation is just a blip then a high DTE would be nasty.Macro call is key on it and a close eye needed on the cycle as always.

Fixed rate bond maybe but unfortunately I lack the time to delve down to that detail, and inclination if I can find enough others with better fundamentals.  I had another look at the chart and am more bullish on the monthly than weekly, although the weekly seems to be set to do OK for now.  Maybe that portends to the stair step you mentioned, like during Jul12 to Jul15.  The July21 pullback obscured current things a bit.  A break above the c4.2 zone would be useful.

[sancho panza]

Holger offers some thoughts on what will ahppen to the bond holders who are currently buying 30 year Bunds with a negative yield.

get ready to get reamed is the main message I think.

and @DurhamBorn ref the Euro telco's.Frightening what's coming to your 60/40 funds

Inedtifying the problem

and the root of it.

[Harley]

1 hour ago, JoeDavola said:

Yes I've completely changed my opinion on kids livng at home long term. I used to think they were 'losers' but now I actually think it's the smart thing to do and should be what any healthy family does. I think the cultures and families that do that are actually being smart and keeping wealth in the family rather than driving the kids out asap to make some other landlord rich.

Agreed, back to the extended family under one roof.  Everything is driving towards it from house prices to day care to NHS treatment to living costs (e.g. utilities, council pension tax, etc) to new builds getting so small, etc.

[Yadda yadda yadda]

18 minutes ago, Harley said:

Agreed, back to the extended family under one roof.  Everything is driving towards it from house prices to day care to NHS treatment to living costs (e.g. utilities, council pension tax, etc) to new builds getting so small, etc.

Was this ever common in the UK? Just thinking of my family I don't think so. My Mum left home at 16 to join the RAF (might have been a year or two older than that). My Dad went to University at 17 and never returned home permanently. My Gran stayed at home until married. That was common but so too was getting married young. Go back much further and there weren't many elderly relatives to have multigenerational living. They were mostly dead. The nearest I found, looking at my family tree, was a mid-thirties gran where one of the teenage daughters had a baby. I didn't investigate further because it got to the point where I'd have to pay.

I do have relatives who used to have two neighbouring houses and now have one large one. There really aren't many in my family who lived very long until the 20th century. Although it would be interesting to do more research.

[DoINeedOne]

1 hour ago, JoeDavola said:

Yes I almost mentioned this - the people who want to by my parents house are Indian and the other interested party are Asians.

 

1 hour ago, sancho panza said:

I live in Leicester,grew up with a lot of Asian families,multi genereational living is normal and encouraged.

 

When i was a carpenter there was a asian family that my boss used to do alot work for in a beautiful huge house in a nice area everyone seem to have their own parts of the house and all working good jobs

 

Actually a great family very close and like you say all the money came into the house 

[Don Coglione]

2 hours ago, JoeDavola said:

Yes I've completely changed my opinion on kids livng at home long term. I used to think they were 'losers' but now I actually think it's the smart thing to do and should be what any healthy family does. I think the cultures and families that do that are actually being smart and keeping wealth in the family rather than driving the kids out asap to make some other landlord rich.

The family that live next door to my folks have a grown up son early 30's who still lives with them and has moved his hot girlfriend in too - he only needs to work part time. My folks continually slag him off for being so pathetic as to be living at home but he's got the right idea - no rent to pay, low stress work life flash car and a hot girlfriend more fucking power to him.

My brothers best mate same thing his parents let him live at home throughout his 20's didn't charge him a penny and even welcomed two long term girlfriends in over that decade to live with them treated them like family members. Again much mockery from my folks but it sounds very healthy to me.

None of the folk I grew up with rented; never gave a penny to a landlord - they all went from living with their parents to buying their marital home or in one case a bachelor apartment and lucked into buying after the NI crash. I know some people in their early to mid 30's who never met anyone and just never moved out of their parents house ever and they seem happy enough.

I had to move out because home life was so unpleasent for various reasons. I was also paying £250 a month house keeping from the day I graduated on a shitty grad salary that was about £1100 take home pay whilst having bills waggled in my face as they came in "will I get this one will I, Joe?!" as if I was still a freeloader.

In the unlikely event that I have kids I'd want them to stay at home and keep money out of the hands of landlords for as long as possible. Part of the problem these days is that what people are paying top dollar for a 'family' home is often tiny - 80-90 square meters i.e. 870-970 square feet. It's getting very very expensive to get any decent space these days.

My folks have, through sheer luck, ended up in a house that's quite big - about 160 square meters and basically is like owning two houses in one. A massive living room, massive bedroom, even a utility room that could be set up as a kitchen all not in use - they literally never get used and are just sitting empty. Easily enough space for me to move back and have as much space... actually more than I do in this flat. I do sometimes think I should have moved back especially when the lockdown happened but the risk wasn't worth it in terms of finding out it was still a crap environment to live in.

They're wanting to sell it to downsize but I actually think it's a terrible idea as they have a great asset that is in increasingly short supply, space. I hope they don't find anywhere as they'd basically be swapping one house for a smaller older house in a worse location, or even having to spend money for the privilege.

How will you explain the shit-stained bed-sheets to your mum?

[Lightly Toasted]

2 hours ago, JoeDavola said:

...

I had to move out because home life was so unpleasent for various reasons. I was also paying £250 a month house keeping from the day I graduated on a shitty grad salary that was about £1100 take home pay whilst having bills waggled in my face as they came in "will I get this one will I, Joe?!" as if I was still a freeloader.

In the unlikely event that I have kids...

Q: Where are my grandkids, son?

A: You ate them before I was out of my teens, Dad.

Not sure if that applies to you but it was certainly a subtext applicable to my own father. Taking it to a broader cultural context, it's the people that support and nurture their young, that will be the ones turning up for the future.

[JoeDavola]

1 minute ago, Lightly Toasted said:

Q: Where are my grandkids, son?

A: You ate them before I was out of my teens, Dad.

Not sure if that applies to you but it was certainly a subtext applicable to my own father. Taking it to a broader cultural context, it's the people that support and nurture their young, that will be the ones turning up for the future.

To be fair neither of my folks seem to give a toss that me or my brother have ever given them grandkids; neither of us have ever been nagged about it.

They do seem more surprised that my brother is chronically single; I think they expected it with me