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

4 hours ago, sancho panza said:

Me and Mrs P are long term renters now.She's a bright girl and understood the maths as soon as I explained it to her.My interest in the hosuing market is mainly because alongside CRE lossess,I think they will form the backbone of the debt deflation for large retail banks.

Ok SP, i'm not proud, what doe 'CRE' mean? (whats the betting i actually do know, and will regret asking once you tell me)

Link to comment
Share on other sites

  • Replies 35.1k
  • Created
  • Last Reply
6 minutes ago, JMD said:

Ok SP, i'm not proud, what doe 'CRE' mean? (whats the betting i actually do know, and will regret asking once you tell me)

I think he means Commercial Real Estate

Link to comment
Share on other sites

4 hours ago, leonardratso said:

im amazed at how many people run their lives on shit careers, for example, bar staff, barrista, hairdressers.

When things are good then they probably do well, but since they are demand led then they are fragile at best, as we can see now.

I can understand someone doing it as a time filler or for a bit of beer money, as a side line to the main wage earner, but seems a lot of people have that as a main wage earner/career. These arent students doing it for a doss during summer or to get some free beer/nights out of it, they are adults with commitments and maybe even kids.

But looking forward and in terms of 'sustainable' jobs for the next cycle - especially with the coming onslaught of automation - surely those minimum wage type jobs you list, along with others maybe like home help/social carers, will be in demand.

Its those who choose not to work i have a problem with.

Link to comment
Share on other sites

Democorruptcy
37 minutes ago, TheCountOfNowhere said:

The FTSE bounce happened when the Dow opened

Well yeah... the DOW is the dog and the FTSE the tail. It doesn't mean to say China (or anybody) isn't buying both.

Link to comment
Share on other sites

3 hours ago, UnconventionalWisdom said:

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.

Graph_Robot_Density_2017_UK.jpg

UnconventionalWisdom, I agree with you, and that's an interesting graph.

I notice its for industrial robots only though and Korea/Singapore probably have the most factories (impressive thought that). I guess Japan might come closer to toping the graph if it included other robotic deployments such as medical/business use (not to mention robot girlfriends!)?

(but one things for sure i expect Japan hates being out-roboted by their 'old freind' Korea!)!

Link to comment
Share on other sites

TheCountOfNowhere

If they can reinflated the stock market this quickly what are they going to do with the housing market !!!

 

Will the BOE be sending it's agents out to buy up property at any price.  You can when you have magicked up cash, the price is meaningless, you just need people to agree to hand you the title deeds in return for your magic money.

It seems they really are this insane.

OH SHIT, HYPER INFLATION IS COMING, RUN FOR THE HILLS

Link to comment
Share on other sites

3 hours ago, Cosmic Apple said:

Marathon bars!

...don't want to get bogged down in technicalities, but hope the correct Marathon/Snicker conversion rate was taken into account?!?

Link to comment
Share on other sites

17 minutes ago, TheCountOfNowhere said:

If they can reinflated the stock market this quickly what are they going to do with the housing market !!!

 

Will the BOE be sending it's agents out to buy up property at any price.  You can when you have magicked up cash, the price is meaningless, you just need people to agree to hand you the title deeds in return for your magic money.

It seems they really are this insane.

OH SHIT, HYPER INFLATION IS COMING, RUN FOR THE HILLS

Not infrastructure though...so hopefully not!

Link to comment
Share on other sites

TheCountOfNowhere
7 minutes ago, Loki said:

Not infrastructure though...so hopefully not!

I wasn't convinced they weren;t doing this in 2012 to kick start the market.

There was a report of BoE agents visting estate agents to "get their views on what the market was doing"

These people will clearly stop at nothing

Link to comment
Share on other sites

1 hour ago, DurhamBorn said:

Yes, its actually 8%,but i dont count the physical in there, i dont even count the physical as part of my assets, i count it as zero. If it does rocket i would count it the day i sold it. If i do sell that il probaby buy a wood ,or some land.

thanks DB.

(btw, I hope that wood is for making camps with the grandkids?, and not for other nefarious activities!) 

Link to comment
Share on other sites

6 hours ago, leonardratso said:

im amazed at how many people run their lives on shit careers, for example, bar staff, barrista, hairdressers.

When things are good then they probably do well, but since they are demand led then they are fragile at best, as we can see now.

I can understand someone doing it as a time filler or for a bit of beer money, as a side line to the main wage earner, but seems a lot of people have that as a main wage earner/career. These arent students doing it for a doss during summer or to get some free beer/nights out of it, they are adults with commitments and maybe even kids.

I`m amazed at how out of touch some people are...& live in some kind of glass cabinet

Link to comment
Share on other sites

Don Coglione
12 minutes ago, Gin said:

I`m amazed at how out of touch some people are...& live in some kind of glass cabinet

What well-paying careers would you propose for these tens of millions of dumb shit-heads, leonard?

Link to comment
Share on other sites

1 minute ago, Ponty Mython said:

What well-paying careers would you propose for these tens of millions of dumb shit-heads, leonard?

Politician 

Link to comment
Share on other sites

6 hours ago, leonardratso said:

im amazed at how many people run their lives on shit careers, for example, bar staff, barrista, hairdressers.

When things are good then they probably do well, but since they are demand led then they are fragile at best, as we can see now.

I can understand someone doing it as a time filler or for a bit of beer money, as a side line to the main wage earner, but seems a lot of people have that as a main wage earner/career. These arent students doing it for a doss during summer or to get some free beer/nights out of it, they are adults with commitments and maybe even kids.

Hairdressers/barbers can make good coin, all cash in hand as well. Lots will be raking it in while claiming bennies and getting their rent paid. Most bar staff/barristas are young as stop gaps, scummy mummies doing their 15 hours to max their tax credits or if not probably the owners. 

Link to comment
Share on other sites

leonardratso
15 minutes ago, Ponty Mython said:

What well-paying careers would you propose for these tens of millions of dumb shit-heads, leonard?

im not proposing anythig for them, we have complaints at work from some of the self employed we have about how they havent had a wage rise in 20 years - i have to wonder why they are still doing the job then, you mean to say that they are doing a shitty low skilled job for 20 years and have never thought to try something else, or at least dig themselves out of a hole - i mean come on, no matter how dumb or shit heady they are, at least have some ambition for fucks sake. Im absolutely super bored with my job, but i know i wont get another that pays anything like it or lets me get away with murder like i currently do and thats my main reason why o dont try to change it much, plus im too oild now anyway, but if i was 20 years younger and in their position the im pretty sure i wouldnt put up with another 20 years of the same.

 

Link to comment
Share on other sites

6 minutes ago, leonardratso said:

im not proposing anythig for them, we have complaints at work from some of the self employed we have about how they havent had a wage rise in 20 years - i have to wonder why they are still doing the job then, you mean to say that they are doing a shitty low skilled job for 20 years and have never thought to try something else, or at least dig themselves out of a hole - i mean come on, no matter how dumb or shit heady they are, at least have some ambition for fucks sake. Im absolutely super bored with my job, but i know i wont get another that pays anything like it or lets me get away with murder like i currently do and thats my main reason why o dont try to change it much, plus im too oild now anyway, but if i was 20 years younger and in their position the im pretty sure i wouldnt put up with another 20 years of the same.

 

Most people are very afraid of change.  They might play the 'billy big bollocks' down the pub etc but almost all of them are too scared to step outside of their comfort zone - this is perfectly exploited by the establishment of course.

Link to comment
Share on other sites

sleepwello'nights
On 25/03/2020 at 09:22, DurhamBorn said:

No,they are injecting liquidity into the system by expanding their reserves so they can buy government paper increasing the money supply so the government can stop a young family in Glasgow from starving.Its called their job.The amount of gumph youl be reading on the net about the evil CBs is just that,rubbish.They are trying to do their jobs.There are arguments about how they do it of course,and who gains most,but those are not arguments for times like this.The CBs are the fire brigade and the house is on fire.The market is simply reacting to the fact they are starting to right size policy.Open ended QE was the key like i said over and over as the market fell.

The economy doesnt turn first ,its not how macro works.First it is created,then it goes into the capital markets,then it feeds out into the economy

 

I nearly walked away from this thread because i saw people saying im down x% the world is ending,its going to nothing.Thats all hyperbole stuff id expect in a children's playground and why most people stay poor.

 

 

 

 

Isn't it a normal reaction to become alarmed when savings and investments fall in value. 

I'm following your thoughts as to how you think this transition will play out because its far too complex for me to figure out for myself. 

I'm in the position where I have a mix of income from pension income, dividends and interest. I have savings and investments I'm looking to safeguard from inflation. The whole financial services industry I've found is difficult to navigate as there are so many ways advisors seek to enrich themselves from seemingly innocuous charges. Even if they are working in your best interests then circumstances and situations can be affected by unforeseen events, actions and reactions of markets and governments and their advice can work out badly for you. 

I've attempted to diversify but there are situations, like we're experiencing now, where all markets react in one direction. 

An area that puzzles me is Government bonds. I now understand (thanks to @Harley's explanation) why index linked bonds didn't behave as I expected, they're purchased using a discounted cash flow estimation of future value. Way over my head. Perversely non index linked UK bonds have performed better.  

I'm in the process of making investments more tax efficient and utilising ISA allowances and SIPPS. Then there come decisions on whether to choose individual stocks, index trackers, bonds, UK or Global. Keep some in cash, with the risks of inflation or confiscation, and low interest rates. Whether to extend some loans to use as a hedge against the risk of inflation. The whole exercise is fraught. 

Anyway thanks for your thoughts.

Link to comment
Share on other sites

40 minutes ago, sleepwello'nights said:

Isn't it a normal reaction to become alarmed when savings and investments fall in value. 

I'm following your thoughts as to how you think this transition will play out because its far too complex for me to figure out for myself. 

I'm in the position where I have a mix of income from pension income, dividends and interest. I have savings and investments I'm looking to safeguard from inflation. The whole financial services industry I've found is difficult to navigate as there are so many ways advisors seek to enrich themselves from seemingly innocuous charges. Even if they are working in your best interests then circumstances and situations can be affected by unforeseen events, actions and reactions of markets and governments and their advice can work out badly for you. 

I've attempted to diversify but there are situations, like we're experiencing now, where all markets react in one direction. 

An area that puzzles me is Government bonds. I now understand (thanks to @Harley's explanation) why index linked bonds didn't behave as I expected, they're purchased using a discounted cash flow estimation of future value. Way over my head. Perversely non index linked UK bonds have performed better.  

I'm in the process of making investments more tax efficient and utilising ISA allowances and SIPPS. Then there come decisions on whether to choose individual stocks, index trackers, bonds, UK or Global. Keep some in cash, with the risks of inflation or confiscation, and low interest rates. Whether to extend some loans to use as a hedge against the risk of inflation. The whole exercise is fraught. 

Anyway thanks for your thoughts.

Its a very difficult situation for anyone with any assets.Its even worse because we are also at a cycle turn,not just a business cycle recession.We have that,a massive demand destruction and a massive systemic risk.I think on a scale inflation is the big risk going forward,but there remains a risk of a much bigger crash.

Link to comment
Share on other sites

sancho panza
9 hours ago, Ponty Mython said:

As Cosmic Apple brought this up, I am copying a question I posted originally in the Share Trading section:

What is the general feeling about the robustness of the various brokers and trading platforms? Do those who have more than £85k to invest share the love around, to keep within the FSCS guarantee, or is everyone happy to have in excess of this sitting with, for example, HL?

iirc brokers all need to have reisnurance to operate so your cash is coevered by the fscs but your holdings are covered by their reinsurance.If they go under that could take some time.

I'd stay with teh big brokers but we still use a small local one because the serivce is super but it does carry risk.They all do.

MF global took about 2 years and customers got 93% of their moeny back.Generally,brokers that jsut broke shoudl be ok,it's the ones with derivatives trading arms that have the tendency to go pop up boom.DYOR

 

7 hours ago, JMD said:

SP, I think that's right about the coming change. But I also think that 'most people' will take it in their stride, especially if the media tell them its all for the best and that 'quality of life' is after all what's really most important (correct of course, but it sticks in the throat to hear it from MSM)... already I hear the media talking about wellness concepts, and for having a Kinder Britain, all becoming the order of the day.

However, though most of the population will tolerate a big and forced change in lifestyle, these same people will become increasingly aware/wary of those around who only take from the system and give nothing back. And I suppose this is where it gets interesting! How will our large social/health bill be paid, and who will be deemed part of the deserving poor? We have a liberal/libertarian PM though most rather ignorantly see Boris as a bouncy buffoon like conservative. As discussed often here, everything is up for grabs politically/economically in the next cycle. As for kicking the can some more... we've surely run out of road. So interesting times ahead? As the hated right wing Ayn Rand said, 'You can ignore reality, but you cant ignore the consequences of ignoring reality'.    

Agreed on the MSM setting the pace of change.SOme of the journos have been pushing Boris to crack down since this crisis began.

 

Just watched TV and there's Asst Chief Constables on telling people not to go for dog walks in the countrysdie or face arrest.Neither liberal or libertarian imho.Depends which way this crisis breaks but Boris has ignored some rather well educated advice on the crisis thus far.

That AYn Rand quote is an absolute beauty.

Link to comment
Share on other sites

sancho panza
7 hours ago, spygirl said:

HTB is strange.

Not all banks bought into the - Hey banks, well put 20% and, in 5 years time when the borrower has progressed at work andor the house has gone up in value, they'll be able to remortgage, paying back the 20% loan.

Cant find any numbers.

Some of bigger banks did not touch it. They might have created a mortgage but they will have sold fucksll, deliberately.

Nationwide went nuts deep, being Northern Rock v2.

The first batch if HTB have hit 5 year payback time in 2018.

https://www.ftadviser.com/mortgages/2018/03/06/help-to-buy-timebomb-as-five-year-anniversary-looms/

After five years is up, borrowers must pay a fee of 1.75 per cent of the value of their loan, increasing each year by RPI plus 1 per cent, unless they can pay the loan off, usually by remortgaging.

The Help to Buy scheme only applied to newbuild homes, and mortgage brokers and other experts are warning that customers may be left paying expensive fees if they do not have the equity left in their homes to remortgage, especially since newbuild homes don’t always increase in value at the same speed as other homes.

“It’s going to be a very big problem,” said Bob Riach from Riach Financial Advisers. “I told people to avoid these schemes, but those who did will struggle, especially where newbuilds have been overpriced.”

Few lenders offered Help to Buy mortgages, with Mr Riach saying that most Help to Buy customers have mortgages with Nationwide and Halifax.

Clusterfuck, as htb ftb would have been late 20s couple do will have kids, income down a lot.

Htb newbuild appear to have been over priced by 30%, so that extra 20% has cost the idiot btler 10% more. Total clusterfuck.

The only way out of htb is most of  the newbuild being classed as lemons and flipped back to the house builder, who has to return money. I think that's going to happen.

New build premium according the the acadata series published by LCP is circa 16%,so pretty much most of the HTB loan is wiped out by being the first owner.

 

Dread to think of the dog poo sandwich contest that wil follow NW going for a walk in the woods.

Link to comment
Share on other sites

2 hours ago, TheCountOfNowhere said:

Great news for the dow... People are dying, more free cash... 

 

 

Screenshot_20200326_212428.jpg

Count, I think you meant to put that in the off topic Coronavirus forum? I'm trying to listen to what the grown ups here have to say about "Credit deflation and the reflation cycle to come" (it's the thread title). We are fully aware that people are dying. And we know TPTB will never let a good crisis go to waste if it can cover their arses. We know all that. So can we "keep it macro" here please as another poster recently said. Thankyou.

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...