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

[Agent ZigZag]

34 minutes ago, sancho panza said:

Apologies for the double tap,but the bit in bold has just hit me.It's amazing how many people's finances are set up thus.A key feature of our home life is that we can manage on one salary if needed,whether that's down to my Grandad,or the low pay/unemployment I went through in the early 90's,I don't know..It's a sad indictment of what's happened to our society that so many people are unable to.

I agree with your sentiments but that is the whole point of cycles. Over time people forget or there is no one around to tell them how bad things were or can get. I grew up in an era when women would gossip over someone getting a new fridge or cooker when not needed on the never never

The old saying comes back never a lender or borrower.

[Agent ZigZag]

5 minutes ago, DurhamBorn said:

We can manage on half of one salary and thats if i ignore all other assets.Like we have always said on this thread high debts mean massive risk,and almost certain failure.My brothers mortgage is £3 a month.Hes over the fields catching rabbits with his whippet,couldnt give a toss about whats going on,hes also got an allotment and doesnt pay for much grub,gets a £15 meat pack off the local butcher a week.The people above of course looked down their nose at my brother and his little terrace house.The fact escaped them he actually has far more wealth than them because theirs is debt,debt they now are struggling to service.

I think your right as well.The way this is paid for will be with housing weath.Expect pensions to get hit as well,40% tax back is sure to go,thats history,100% certain.

A bit of lamping with the dogs for rabbits. Oh that  brings me back to my youth. I must dust off my old workhorse weihrauch HW80K for the odd wood pigeon.  Your right your brother is rich in many other ways enjoying the simple things in life

[Majorpain]

1 hour ago, sancho panza said:

You're an insider MP.Ref my earlier post,Mrs P has acquaintances getting furloughed which means 80% salary covered but what are the likelihoods of large job losses from the big resi buidling firms/subbies?

How bad do you see it getting psot covid as the industry reorgnaizes?

Also what proportion of staff on a building site would you estimate are subbies(clearly they'll have a lot less legal rights)

Construction companies are a huge spectrum from large multinationals to single builders, and then there are people who fully subcontract everything through to everything is done in house.  So its far from a one size fits all im afraid!

Im guessing ATM, but the majority of the damage will probably be done by zombies going bust rather than layoffs.  Too many people are reliant on that cash coming in to pay for things on finance, it was always an accident waiting to happen, its just a really bad accident this time around.

I said a while back that i thought 50% would go out of business, its been a steady drip of insolvencies since then but does seem to be following the old "I went bankrupt gradually, then suddenly".

[Barnsey]

3.283 million us jobless claims, higher end of estimates

[BearyBear]

 

[Barnsey]

Here in the U.K., Halifax have stopped offering mortgages above 60% LTV. Wasn’t it 75% LTV in the GFC? So hypothetical maths question, if they want a MINIMUM 40% deposit, how much are they expecting house prices to fall? 

[sancho panza]

1 hour ago, Agent ZigZag said:

Never heard of them. Will look into it. Thanks for the heads up

They,along with the ones you mentioned all scored above 17/25 ye olde coma scale when I went through the companies in the SOIL ETF.I haven't had time to run a full set of coma scores through the ETF's as I've been busy with kids/work/uni(which now looks like it's getting canned).Those scores would all likely lift some more now given how beat up the prices are.We already own some Nutrien/Yara/Mosaic/ICL/K+S looking to add

1 minute ago, Barnsey said:

Here in the U.K., Halifax have stopped offering mortgages above 60% LTV. Wasn’t it 75% LTV in the GFC? So hypothetical maths question, if they want a MINIMUM 40% deposit, how much are they expecting house prices to fall? 

Any links there Barnsey?Evidence of debt deflation?

[BearyBear]

https://www.mortgagestrategy.co.uk/news/halifax-withdraws-all-mortgages-over-60-ltv/ 

[UnconventionalWisdom]

1 hour ago, C-gull said:

I hear you. I'd like some roots though; moved 7 times over the last 5 years and it gets old quickly. I do want to be here for now as I'm near very good climbing for the sort of climbing that I can currently do, and I'm accessible enough to get to the kinds I'd like to learn. IDK man, whatever you do there's a bunch of risk isn't there

Stupid UK rental market isn't fit for purpose. I'm lucky that I rent from the church. They arent kicking me out unless they want to sell their satellite site and havent increased rent for a couple nearly 2 years.

Anyway, sounds like you are open to embracing risk and will make the most whatever happens.

[TheCountOfNowhere]

10 minutes ago, Barnsey said:

3.283 million us jobless claims, higher end of estimates

Terrible news, the dow will shoot up 

Just now, UnconventionalWisdom said:

Stupid UK rental market isn't fit for purpose. .

Depends on what the purpose is.

The rentiers would say it's definitely fit for their purpose

3 minutes ago, BearyBear said:

https://www.mortgagestrategy.co.uk/news/halifax-withdraws-all-mortgages-over-60-ltv/ 

Are they expecting a 40% fall ?

9 minutes ago, Barnsey said:

Here in the U.K., Halifax have stopped offering mortgages above 60% LTV. Wasn’t it 75% LTV in the GFC? So hypothetical maths question, if they want a MINIMUM 40% deposit, how much are they expecting house prices to fall? 

FUCK LOADS ?

[BearyBear]

5 minutes ago, TheCountOfNowhere said:

Are they expecting a 40% fall ?

Impossible. The gov will do everything they can to prevent that including helicopter money.

[UnconventionalWisdom]

1 hour ago, TheCountOfNowhere said:

If we are staring down the barrel of a depression and people are really struggling, will we see the economic migrants go home/elsewhere ?

 

Could be a double whammy for the UK GDP

The UK is terrible for automation development as we assume aging demographics won't hit us too hard or that immigrants will always be a good supply of labour.  Here we are 22nd and dont even make the graph. A realisation that cheap wages won't be around forever will be a good kick up the arse to embrace new autonomous tech and help our industries produce more.

[TheCountOfNowhere]

1 hour ago, Simon said:

Many thanks, DB. Trying to work out a possible direction of travel for my life for the next few years! Great insights as always.

You cheered up SImon ?

[Shamone]

Just now, TheCountOfNowhere said:

You cheered up SImon ?

Yes thanks, I was letting aged parental loopiness get to me too much! Thinking of a nice long walk this afternoon. Hope all's well in Nowhere.

[JMD]

On 24/03/2020 at 10:49, Harley said:

Physical PMs.  At home, to a point but hard and expensive (atm) to sell back and could be regulations covering that.  The security aspect is a two edged sword (possession versus theft).  Plus investment risk.  So a limited (less than 100%) holding.  At a custodian?  Again a bit but regulation, investment, and now counterparty risk.   

Equities.  These have a place but even finally faltered in the end in the Wiemar inflationary depression.  I like SPs list (plus a regional focus towards the East (given their CV performance) and maybe emerging markets).  But then income or growth or total return?  A bit of all I guess (with sector/region being more important).  I must admit being caught out with my income portfolio idea.  Obvious really that they could cut dividends (that being more important for me for a buy and hold income portfolio than share price). 

Harley, I am buy-and-hold for most of my portfolio. But for part of my PMs and part of my Equities I do plan to do a little trading.

I plan to swop my silver for gold as/when GSR is favourable. My thinking here is to move to gold over time as gold is the more stable pm, plus I like the idea of 'forcing an income' from silver by swopping it for gold when/if silver GSR tightens. Of course this means potentially losing out on some/lots of silver gains - if silver does shoot to the moon ($200/300?), compared to gold (10,000+?) as I think most here believe that it might. My thinking at moment is that for this to work for me I should start 100% in silver and move to a 50/50 position. I would then maintain an exposure to silver and also benefited from ending up with more gold (from swopping silver) than if I had just bought the gold from the outset. It introduces risks of course as could get caught on 'wrong side' of the trade. And although I don't anticipate making many of these trades (perhaps just 4/5 across the cycle) keeping track of whether I am actually gaining from executing this plan will be a challenge for me.

For equities, I will be doing some momentum trading (using funds/etfs) after markets eventually calm!? I estimate 15% of my portfolio (and because these are short term inv. I needn't hold a separate cash element) - allocated to the 10 lowest stockmarket etf's (using this site: https://www.starcapital.de/en/research/stock-market-valuation/), and also fund momentum investing, initially using the FundExpert service (bit expensive but they sometimes do reduced subs, and I need to get experience first - does anyone know an alternative way to get this knowledge?).  

[TheCountOfNowhere]

46 minutes ago, Simon said:

Yes thanks, I was letting aged parental loopiness get to me too much! Thinking of a nice long walk this afternoon. Hope all's well in Nowhere.

Good man. 

We're okay, my life's not changed much and our children are having a ball, they miss their friend tho but they are growing some strong family bonds. Pros and Cons in everything.

My wife tho, she's going loopy.  We'll crack open the Kristal tonight I think, that'll cheer her up

[Cosmic]

57 minutes ago, sancho panza said:

They,along with the ones you mentioned all scored above 17/25 ye olde coma scale when I went through the companies in the SOIL ETF.I haven't had time to run a full set of coma scores through the ETF's as I've been busy with kids/work/uni(which now looks like it's getting canned).Those scores would all likely lift some more now given how beat up the prices are.We already own some Nutrien/Yara/Mosaic/ICL/K+S looking to add

Any links there Barnsey?Evidence of debt deflation?

Am I correct in remembering you use AJBell sancho? If so how are you holding Nutrien & K+S? Their search is woeful and then it won't quote for either of those (amongst others), have you been calling the deals through? Perhaps step one of my DD should be "Can I actually get find/buy them on AJB" instead of it being my last

[Majorpain]

1 hour ago, Barnsey said:

3.283 million us jobless claims, higher end of estimates

It may be more, the system was (unsurprisingly) struggling to cope with the volumes and there may be some in next month who couldn't get processed in time.

[DurhamBorn]

Amazing really that my road maps say we are likely going all the way back to 1982,and todays unemployment jumps by the biggest amount since 1982.The more the deflation the more CBs can and will print.The ECB has changed its rules as well,so it can do unlimited.They are going to take inflation instead of the EU breaking up i think.Consumer is dead,it has to be industrial or nothing going forward.

 

"The figure breaks the record set in 1982 when unemployment claims hit 695,000"

 

[sancho panza]

[sancho panza]

4 minutes ago, Cosmic Apple said:

Am I correct in remembering you use AJBell sancho? If so how are you holding Nutrien & K+S? Their search is woeful and then it won't quote for either of those (amongst others), have you been calling the deals through? Perhaps step one of my DD should be "Can I actually get find/buy them on AJB" instead of it being my last

We hold the K+S at Intereactvie Investor,the Nurtrien at a small broker I'd rather not disclose.

II is superb.Must say.I prefer it to saxobank in terms of ease of use.Never used AJ Bell.

4 minutes ago, DurhamBorn said:

Amazing really that my road maps say we are likely going all the way back to 1982,and todays unemployment jumps by the biggest amount since 1982.The more the deflation the more CBs can and will print.The ECB has changed its rules as well,so it can do unlimited.They are going to take inflation instead of the EU breaking up i think.Consumer is dead,it has to be industrial or nothing going forward.

 

"The figure breaks the record set in 1982 when unemployment claims hit 695,000"

 

Yep,they changed the rules so they can take unlimited italian bonds.good luck with that

[TheCountOfNowhere]

4 minutes ago, DurhamBorn said:

Amazing really that my road maps say we are likely going all the way back to 1982,and todays unemployment jumps by the biggest amount since 1982.The more the deflation the more CBs can and will print.The ECB has changed its rules as well,so it can do unlimited.They are going to take inflation instead of the EU breaking up i think.Consumer is dead,it has to be industrial or nothing going forward.

 

"The figure breaks the record set in 1982 when unemployment claims hit 695,000"

 

It's take some time for this to filter through, such projects and spending dont happen over night.

 

[spygirl]

59 minutes ago, TheCountOfNowhere said:

Terrible news, the dow will shoot up 

Depends on what the purpose is.

The rentiers would say it's definitely fit for their purpose

Are they expecting a 40% fall ?

FUCK LOADS ?

Barclays too.

All the 'competive'lenders are running away from high LTV mortgages esp. IO btl.

All those people who took out teaser io btl mortgages with 5  or 2 year fixes are going to find theres no more mortgages, so get put on 7% + SVR

Hahaha.

And the idiots who took up Ltd co mortgages are totally fucked as banks Ltd co defaults rise, forcing much higher rates.

[spygirl]

Add the idiots who took out HTB with 5% + 20% to give to shit new build builder are beyond fucked.

95% LTV.

Can only mortgage sub 60%

[Cosmic]

6 minutes ago, sancho panza said:

We hold the K+S at Intereactvie Investor,the Nurtrien at a small broker I'd rather not disclose.

II is superb.Must say.I prefer it to saxobank in terms of ease of use.Never used AJ Bell.

Yep,they changed the rules so they can take unlimited italian bonds.good luck with that

Thanks I'll take a look at them. Probably at the point where I should be spreading things out anyway.

Sorry for my bad memory