Jump to content
DOSBODS
  • Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

IGNORED

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


spunko

Recommended Posts

 

1 hour ago, Talking Monkey said:

For things to even normalise in Leicester that implies one hell of a drop in house prices. One of the things DB says is the market punishes the most people, I reckon when it comes it will be brutal 

It implies that a rational market will likely settle significantly south of where we are when it does.I may not be alive though.

I jsut take the view that in the event the Leicester market (and the wider UK market) reset on longer term means,you genuinely wouldn't want to tbe living in some of the inner city areas.

I know Leicester well and have seen the changes over 50 years.It's a powder keg in search of a spark.

My preference-given a binary choice between buying a semi for £300k or building a portfolio of oilies/goldies(for now) of a similar size-would be to take the portfolio route.If Leicester descends into chaos,we move straight out giving one month's notice and rent somewhere untouched by the chaos.I have explained the theory to Mrs P and she understands as she's from South Africa.

1 hour ago, DurhamBorn said:

Id expect service companies to outrun oil,but more dangerous.Big oil can pay the bills by slashing capex,service companies struggle.Iv noticed a few chemical companies saying sales are slack of chems used in rigs etc in the US.It could be oil production is topping out there.

I'd agree they're a leveraged play on the underlying.You won't get a ten bagger out of RDSB and XOM but you might from the XES/OIH plays.Even the ETF's.....XES peaked at $50 and is currently sub $8

 

 

o/t

https://www.marketwatch.com/story/stock-investors-in-2020-should-be-careful-about-partying-like-its-1999-2020-01-13?mod=home-page

The U.S. economy grew about 4% in 2019 — good news, except that the national debt grew about 5.6%, or about $1.3 trillion; our debt-to-GDP currently exceeds 100%; paradoxically, the 10-year Treasury yield TMUBMUSD10Y, -0.96%  has dropped to 1.8% from 2.6%. Maybe not paradoxically: the Federal Reserve went from a faint attempt of quantitative tightening starting in the fourth quarter of 2018, which caused stock market to have a mini-crash a year ago, to quantitative easing in the second half of 2019, which arguably caused the market to go up.

 

Link to comment
Share on other sites

  • Replies 35.1k
  • Created
  • Last Reply
7 minutes ago, sancho panza said:

 

It implies that a rational market will likely settle significantly south of where we are when it does.I may not be alive though.

I jsut take the view that in the event the Leicester market (and the wider UK market) reset on longer term means,you genuinely wouldn't want to tbe living in some of the inner city areas.

I know Leicester well and have seen the changes over 50 years.It's a powder keg in search of a spark.

My preference-given a binary choice between buying a semi for £300k or building a portfolio of oilies/goldies(for now) of a similar size-would be to take the portfolio route.If Leicester descends into chaos,we move straight out giving one month's notice and rent somewhere untouched by the chaos.I have explained the theory to Mrs P and she understands as she's from South Africa.

I'd agree they're a leveraged play on the underlying.You won't get a ten bagger out of RDSB and XOM but you might from the XES/OIH plays.Even the ETF's.....XES peaked at $50 and is currently sub $8

Trouble is large swathes of the country have been turned into third world shitholes over the last 20 years. If/when this country hits seriously hard times it could get very bad. The scum in charge seem hell bent on leaving us less and less safe parts of the country to flee to.

 

Do you reckon XES and OIH are a good punt? Am I correct in thinking that OIH pays a dividend of 5%+ ?

Link to comment
Share on other sites

Democorruptcy
5 hours ago, sancho panza said:

you're an aexpereinced politcal gambler.Don't try that oneB|.Labour lsot the election.The Tory vote went up 1.3% or something equally shite and that was with Farage letting huge chunks of the country down.

Brexit party beat the Tories in Barnsley ffs.....

Agreed though on your point re HTB/FLS/ZIRP/QE.Tory policy is to protect Worcesterwoman from neg equity

The Tories started HTB in 2013 when in a coalition. Then they won an unexpected (in the betting) majority in 2015. I agree Brexit played a large part in the last election result, after Labour's betrayal of their voters. The problem in our democorruptcy is that it doesn't matter what colour ties they wear. The system is too open to bribery and corruption lobbying.

Link to comment
Share on other sites

2 hours ago, DurhamBorn said:

The nice 3 bed semis where i live are going for 2004 prices. Back then they doubled in price in around 18 months, then never moved again.

I was on a just finished new build site yesterday,its looking crap already and people were paying £140k there for a 3 bed shoe box. One couple said they wanted to get away from the scum, i didnt have the heart to tell them 20% of the houses on the estate were HA and another 15% BTL. There are more social/free rent people on that estate than on the council estate near me (most RTB, only 28% council left)

DB, did you see Monday's Panorama 'How to save the High-Street', it featured Stockton-on-Tees (and I thought of you, but not in weird way!), where its council is spending £25m doing up an old theatre to create a new events venue complex that it would then own and run (a significant policy change in itself I think). The council is borrowing and spending big so fits with this blog's ethos. They also spoke about changing retail to residential (above the shops, etc).

But I wonder - do you have any practical thoughts on high-street regeneration? I think I recall you having mentioned how council services, etc, will be moved into the high-street. But i'm thinking more specifically about how might us ordinary folk benefit from this massive? inward investment into our own high-streets(back-yards)? Obviously location is important. Perhaps with more amenities/pleasant green areas, a return to operating a business and living 'above the shop' wouldn't be a bad option for many small entrepreneur types? (i'm hoping the residential developments wouldn't necessarily be rammed packed with HA/council tenants?).

 

What are others thoughts on the potential live/work opportunites on our re-inflated/regenerated high-streets?  (nb, not just idly asking here, as I am looking an investment project that fits with the investment cycle we are about to enter)       

  

Link to comment
Share on other sites

13 minutes ago, Democorruptcy said:

The Tories started HTB in 2013 when in a coalition. Then they won an unexpected (in the betting) majority in 2015. I agree Brexit played a large part in the last election result, after Labour's betrayal of their voters. The problem in our democorruptcy is that it doesn't matter what colour ties they wear. The system is too open to bribery and corruption lobbying.

As iirc we discussed in the betting thread,my vote was Brexit party/Ukip or nothing.I completely agree that the roots of our problems lie withour political class and the fact that they're drawn from such a small strata of society.We've largely been governed by people with little life expereince outside being a porfessional politician since/Eton/Oxbridge since Churchill.When the Millibands took over Labour,it was hard not to laugh.Summed up labour's chances really.

FPTP doesn't really allow for the rise of vibrant new talent.Persoanlly, i think there are a lot of people who've dropped tribal allegiances over the Brexit period 2011+ and I think a new party will rise on the right.There's a lot of people feel as disillusioned as us.

Link to comment
Share on other sites

22 minutes ago, JMD said:

DB, did you see Monday's Panorama 'How to save the High-Street', it featured Stockton-on-Tees (and I thought of you, but not in weird way!), where its council is spending £25m doing up an old theatre to create a new events venue complex that it would then own and run (a significant policy change in itself I think). The council is borrowing and spending big so fits with this blog's ethos. They also spoke about changing retail to residential (above the shops, etc).

  

I suspect they'll never turn a profit.Councils up and down the country buy up these dud assets because they believe in the myth of entrpreneurial failure rather than the reality of shrinking footfal/disposable income and the rising taxes that they themselves have forced on many struggling local business.

1 hour ago, Starsend said:

Do you reckon XES and OIH are a good punt? Am I correct in thinking that OIH pays a dividend of 5%+ ?

They're cheap but may get cheaper yet if we get a run down to $40 as DB reckons might be possible.

DYYOR natch

decl.we've got a small sub 1% exposure to oil service

 

from Hussman

https://www.hussmanfunds.com/comment/mc191230/

Blue Chip Performance: 1973-1974
Du Pont -58.4%
Eastman Kodak -62.1%
Exxon -46.9%
Ford Motor -64.8%
General Electric -60.5%
General Motors -71.2%
Goodyear -63.0%
IBM -58.8%
McDonalds -72.4%
Mobil -59.8%
Motorola -54.3%
PepsiCo -67.0%
Philip Morris -50.3%
Polaroid -90.2%
Sears -66.2%
Sony -80.9%
Westinghouse -83.1%

We forget.

 

Blue Chip Performance: 2000-2002
Cisco Systems -89.3%
Microsoft -65.2%
JP Morgan -76.5%
Intel -82.3%
McDonalds -74.4%
EMC -96.2%
Disney -68.4%
Oracle -84.2%
Merck -58.8%
Boeing -58.6%
IBM -58.8%
Amgen -66.9%
Apple -81.1%

We forget.

during much of the tech bubble and the mortgage bubble, value-oriented stocks outperformed other deciles through the bulk of the advance. However, that pattern shifted profoundly as the market approached its peak, with investors increasingly chasing high-valuation “glamour” stocks while the broader market gradually lost its sponsorship.

 

Blue Chip Performance: 2007-2009
Google -65.3%
Bank of America -94.0%
Microsoft -50.3%
Merck -65.5%
Coca Cola -42.3%
JP Morgan -68.5%
Intel -56.8%
AT&T -49.3%
Cisco Systems -60.0%
Boeing -72.6%
Apple -60.9%
Citigroup -98.1%

We forget.

 

 

Link to comment
Share on other sites

26 minutes ago, JMD said:

DB, did you see Monday's Panorama 'How to save the High-Street', it featured Stockton-on-Tees (and I thought of you, but not in weird way!), where its council is spending £25m doing up an old theatre to create a new events venue complex that it would then own and run (a significant policy change in itself I think). The council is borrowing and spending big so fits with this blog's ethos. They also spoke about changing retail to residential (above the shops, etc).

But I wonder - do you have any practical thoughts on high-street regeneration? I think I recall you having mentioned how council services, etc, will be moved into the high-street. But i'm thinking more specifically about how might us ordinary folk benefit from this massive? inward investment into our own high-streets(back-yards)? Obviously location is important. Perhaps with more amenities/pleasant green areas, a return to operating a business and living 'above the shop' wouldn't be a bad option for many small entrepreneur types? (i'm hoping the residential developments wouldn't necessarily be rammed packed with HA/council tenants?).

 

What are others thoughts on the potential live/work opportunites on our re-inflated/regenerated high-streets?         

  

The original budget was 4m, which is beyond a joke for small town showhouse.

To blow that out to £25m is beyond a joke.

The Tees barrage, which is a huge bit of civil engineering, cost ~50m.

The theatre is just a crappy little town show house.

High streets wont regenerate, theyll change.

In Stocktons case, its throwing good money after bad.

The way coucils do is they loo to levy ctax  and taxes to pay for their mispsending.

In this case, the the small nubmer of tax paying citizens and business will have to bshoulder a large waste of  money.

 

 

Link to comment
Share on other sites

Well, something has lit a fire under some of the stocks in my attempt to shamelessly copy durhamborn inspired portfolio today

Ceres, SSE, Centrica, Imperial, National Grid done most of the heavy lifting.

So thank you everyone and durhamborn there are a couple of silver Britannia's with your name on here...

Link to comment
Share on other sites

2 hours ago, DurhamBorn said:

You can get houses in my home town (2 up 2 down terraces) for the same price as 1992.

The nice 3 bed semis where i live are going for 2004 prices.Back then they doubled in price in around 18 months,then never moved again.

I was on a just finished new build site yesterday,its looking crap already and people were paying £140k there for a 3 bed shoe box.One couple said they wanted to get away from the scum,i didnt have the heart to tell them 20% of the houses on the estate were HA and another 15% BTL.There are more social/free rent people on that estate than on the council estate near me (most RTB,only 28% council left)

Also a lot of the new builds are now being burdened with charges for maintenance of amenity areas. Years ago the local Councils would adopt these but they are shifting that burden onto the developers who then pass it onto the home owners. I don't like the idea of having freehold but then being tied into a few hundred quid each year for someone to run a mower over a patch of grass.

Apologies for a BBC link, but the term 'fleecehold' is rather good:

https://www.bbc.co.uk/news/uk-england-46279048

" Paying unexpected costs on new-build homes has been dubbed the next PPI scandal waiting to happen, and has homeowners and MPs alike wanting solutions. "

 

Link to comment
Share on other sites

36 minutes ago, Loki said:

Well, something has lit a fire under some of the stocks in my attempt to shamelessly copy durhamborn inspired portfolio today

Ceres, SSE, Centrica, Imperial, National Grid done most of the heavy lifting.

So thank you everyone and durhamborn there are a couple of silver Britannia's with your name on here...

My dad was mentioning today how well SSE had done,i got him his at £10.60.I got 3 ladders in them and averaged around £11.70.Dont mention Centrica,they will do something to stop the price recovery going on xD My best performer in the big ones is BAT its up nearly 40% including divis from this time last year when i got back into them.Im really pleased with them,sold near the all time high over £50 after holding for a couple of decades nearly then getting them back at less than half the price.Imperial iv just moved back into profit (6% with divis) .

 

1 hour ago, JMD said:

The Swedish telecoms company Telia was discussed a while back. It does look a good company with big potential. Anyway it hit my first buying ladder today. Is anyone else buying?

A bit difficult to find, but I think this is the right Telia: 

https://www.hl.co.uk/shares/shares-search-results/t/telia-company-ab-sek3.2

Iv started buying them as well.Only small at the moment,telcos are selling off due to recession worry in the EU etc.They will all get hit,but i think the whole sector is hugely under valued and happy to have ladders in a lot.Vod im already full,but got the last ladder at £1.24.I think Telefonica will cut its divi,but iv started to very slowly buy them as well with ladders down to 5.10.

As SP showed above blue chips can still see very big falls in a sell of,but most telcos are already down 50%/75% from highs within 3 years.

Link to comment
Share on other sites

Democorruptcy
2 hours ago, sancho panza said:

I know Leicester well and have seen the changes over 50 years.It's a powder keg in search of a spark.

My preference-given a binary choice between buying a semi for £300k or building a portfolio of oilies/goldies(for now) of a similar size-would be to take the portfolio route.If Leicester descends into chaos,we move straight out giving one month's notice and rent somewhere untouched by the chaos.I have explained the theory to Mrs P and she understands as she's from South Africa.

I felt like that in Yorkshire living just down the road from the 7/7 bombers. I'm renting a cottage on a farm in Wales now, quiet area, up a private road and only surrounded by fields and sea views. I feel safe from chaos but if it ensues all I have to do is youtube how to prepare very fresh lamb. I think I'll be able to do some milking and my host already gives me plenty of freshly caught fish, bartered for beer! I might be able to get you a deal on one of the other cottages if you have to flee speedily!

 

 

Link to comment
Share on other sites

1 hour ago, Ma2 said:

belated happy new year all

IAG have now officially complained about the proposed propping up of  Flybe with taxpayer money  

https://www.bbc.co.uk/news/amp/business-51117885

Not surprised they are upset, but its also not particularly the govt's place to be picking winners and losers.  It has a habit of coming back to bite when the inevitable happens and they go out of business in 6 months taking a load of taxpayers money with them, profitable companies don't get into this situation in the first place.

Link to comment
Share on other sites

Couldn’t quite get to grips with how the whole affordable housing allocation worked in new build estates, the one we’re renting in (built 2014) has a fair bit it seems, didn’t take me long to figure out which ones. Here I was thinking they’d be hidden out of view round the back in small terraces but oh no, they’ve got some nice townhouses near the front. Can only imagine how the neighbours feel after paying 250k+ for their much smaller ones. Don’t want to come across resentful or snobby but most days these lovely residents are just sitting on their steps at the front drinking and smoking, loud music, unkept gardens, dodgy folk coming and going (pretty sure one odd couple are dealers), the playground is covered in graffiti across the road, and yet homes round the corner £350-400k. Roads falling apart with no-one taking responsibility.

The brand new estates seem to have even more social housing, 30-40% of residents it seems in tightly packed terraces, surrounded by a few bigger homes, couldn’t believe how much of the site plans were greyed out.

Definitely mainly sticking to 80s-90s build areas, but new build expansion is nuts here right now so thankfully I have a great bargaining angle: “why should I pay almost the same for an old house when I can have a new build with a 10 year warranty, en-suite, B rating EPC, just 5% deposit, no work needed at all and all new integrated appliances, buyer incentives etc”.
 

I think that’s how the sheeple think right now which is completely understandable, and why they’re flying off the shelves as older homes sit stagnant with little interest, I genuinely think home sellers haven’t caught up to the reality that new builds are FLOODING the market and drastically changing what their homes are worth. 
 

Naturally all issues with new builds don’t take long to arise once you’re committed.

Link to comment
Share on other sites

1 hour ago, Barnsey said:

Couldn’t quite get to grips with how the whole affordable housing allocation worked in new build estates, the one we’re renting in (built 2014) has a fair bit it seems, didn’t take me long to figure out which ones. Here I was thinking they’d be hidden out of view round the back in small terraces but oh no, they’ve got some nice townhouses near the front. Can only imagine how the neighbours feel after paying 250k+ for their much smaller ones. Don’t want to come across resentful or snobby but most days these lovely residents are just sitting on their steps at the front drinking and smoking, loud music, unkept gardens, dodgy folk coming and going (pretty sure one odd couple are dealers), the playground is covered in graffiti across the road, and yet homes round the corner £350-400k. Roads falling apart with no-one taking responsibility.

 

Mentioned this before here, had a friend who bought a nice townhouse but used to comment on how he goes to work everyday gets home about 6-7pm has dinner puts the kids to bed then does the washing up only to overlook neighbours who are on benefits have same home as him, better car, ordering takeaways most nights 

"why do i bother" is exactly what he thinks and i think most people are starting to feel this way

When i lived on a new build estate like you didn't take long to notice 

Personally i would never buy on a new build and because most are also BTL so your neighbours are changing every other year, unlike when i was a kid knew everyone on the street because they live there for so long

Link to comment
Share on other sites

14 hours ago, Democorruptcy said:

I felt like that in Yorkshire living just down the road from the 7/7 bombers. I'm renting a cottage on a farm in Wales now, quiet area, up a private road and only surrounded by fields and sea views. I feel safe from chaos but if it ensues all I have to do is youtube how to prepare very fresh lamb. I think I'll be able to do some milking and my host already gives me plenty of freshly caught fish, bartered for beer! I might be able to get you a deal on one of the other cottages if you have to flee speedily!

How do you find those places.  I'm about 18months - 2yrs from FIRE.  And potentially looking to do something similar.   

Link to comment
Share on other sites

Talking Monkey
17 hours ago, sancho panza said:

 

It implies that a rational market will likely settle significantly south of where we are when it does.I may not be alive though.

I jsut take the view that in the event the Leicester market (and the wider UK market) reset on longer term means,you genuinely wouldn't want to tbe living in some of the inner city areas.

I know Leicester well and have seen the changes over 50 years.It's a powder keg in search of a spark.

My preference-given a binary choice between buying a semi for £300k or building a portfolio of oilies/goldies(for now) of a similar size-would be to take the portfolio route.If Leicester descends into chaos,we move straight out giving one month's notice and rent somewhere untouched by the chaos.I have explained the theory to Mrs P and she understands as she's from South Africa.

 

 

I have a similar view SP having flexibility is the way to go. Though I think prices cannot stay elevated much longer, that reversion towards the mean has to happen soon as property is acting as a huge drag on the economy

Link to comment
Share on other sites

TheCountOfNowhere
3 hours ago, DoINeedOne said:

Mentioned this before here, had a friend who bought a nice townhouse but used to comment on how he goes to work everyday gets home about 6-7pm has dinner puts the kids to bed then does the washing up only to overlook neighbours who are on benefits have same home as him, better car, ordering takeaways most nights 

"why do i bother" is exactly what he thinks and i think most people are starting to feel this way

When i lived on a new build estate like you didn't take long to notice 

Personally i would never buy on a new build and because most are also BTL so your neighbours are changing every other year, unlike when i was a kid knew everyone on the street because they live there for so long

Friend of mine lives I a new build block of flats. His neighbours were Thai hookers. They changed every few days 🤣🤣🤣🤣

 

 

Link to comment
Share on other sites

53 minutes ago, TheCountOfNowhere said:

Friend of mine lives I a new build block of flats. His neighbours were Thai hookers. They changed every few days 🤣🤣🤣🤣

 

 

Yeah but not everyone gets lucky xD

4 hours ago, Barnsey said:

Couldn’t quite get to grips with how the whole affordable housing allocation worked in new build estates, the one we’re renting in (built 2014) has a fair bit it seems, didn’t take me long to figure out which ones. Here I was thinking they’d be hidden out of view round the back in small terraces but oh no, they’ve got some nice townhouses near the front. Can only imagine how the neighbours feel after paying 250k+ for their much smaller ones. Don’t want to come across resentful or snobby but most days these lovely residents are just sitting on their steps at the front drinking and smoking, loud music, unkept gardens, dodgy folk coming and going (pretty sure one odd couple are dealers), the playground is covered in graffiti across the road, and yet homes round the corner £350-400k. Roads falling apart with no-one taking responsibility.

The brand new estates seem to have even more social housing, 30-40% of residents it seems in tightly packed terraces, surrounded by a few bigger homes, couldn’t believe how much of the site plans were greyed out.

Definitely mainly sticking to 80s-90s build areas, but new build expansion is nuts here right now so thankfully I have a great bargaining angle: “why should I pay almost the same for an old house when I can have a new build with a 10 year warranty, en-suite, B rating EPC, just 5% deposit, no work needed at all and all new integrated appliances, buyer incentives etc”.
 

I think that’s how the sheeple think right now which is completely understandable, and why they’re flying off the shelves as older homes sit stagnant with little interest, I genuinely think home sellers haven’t caught up to the reality that new builds are FLOODING the market and drastically changing what their homes are worth. 
 

Naturally all issues with new builds don’t take long to arise once you’re committed.

When i was on the council the left wing thinking was if you split up the bennie claimers and stick 15% on new estates then they would change their ways.Instead they simply bring down the whole area of course.Then people move out and some are bought by BTL or more by the HA and slowly that 15% becomes 30%+.

I would never let any of my kids buy a new build.The best houses were built around 75 to 90.They were before they started to get as many as they could on a plot and before they had to provide "affordable housing" ie free houses for bennie claims.

Link to comment
Share on other sites

Democorruptcy
6 hours ago, Barnsey said:

Definitely mainly sticking to 80s-90s build areas, but new build expansion is nuts here right now so thankfully I have a great bargaining angle: “why should I pay almost the same for an old house when I can have a new build with a 10 year warranty, en-suite, B rating EPC, just 5% deposit, no work needed at all and all new integrated appliances, buyer incentives etc”.

Don't forget to try...

"Banks will lend to people using HTB because the governbankment gives the bank the money back if it is sold at a loss. Not as many people can buy older houses because banks are more careful who they lend to."

Link to comment
Share on other sites

Democorruptcy
2 minutes ago, Tdog said:

More careful seems to imply they are careful. Clearly with the need for ZIRP to eternity they're not too careful.

I didn't say I believed it!:Jumping:

I just suggested "try" as another bargaining chip.

Link to comment
Share on other sites

Democorruptcy
23 minutes ago, Tdog said:

Times have changed dramatically, when those that have come over from HPC are accepting there will be no crash and to buy at prices which are the highest in UK history. (i myself will probably accept defeat by the end of the year)

Ironically on a topic called "credit deflation" which if correct must mean less credit to feed the bubble.

When I joined ToS in 2008 I was a bear but I suppose TPTB have broken me! I saw the over 5% inflation coming but didn't expect rates to stay at 0.5% through it. Nor QE or Funding for Lending. I stopped being a bear in 2013. The governbankment has pumped £20bn into HTB and so have a vested interest in property prices outside of the usual protection of their banking chums. I know we are supposed to have to follow the US when they raise rates but that didn't work out last time and they're already cutting again. I don't see where the time for a worthwhile nominal crash comes from when the expectation, even on here, is trillions more QE.

Disclosure : I don't own any property and might never. 

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.

×
×
  • Create New...