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

[sancho panza]

2 hours ago, HolyCow said:

@DurhamBorn What kind of effect do you think the free furlough monies and payments to companies will have on property prices? Surely this is basically to keep the housing market aloft as it is the economy? I know you think house prices are toast (especially in the South East) but I really don't see the Government letting their holy cow fall. Surely they will come up with some scheme to keep prices high so the economy doesn't collapse and to keep boomer votes and confidence high once this is all over?

Also, what do you think about cash at the moment? What percentage (if any) of a portfolio would you recommend keeping in cash? Is cash the best asset to have in a deflation? Also, if you still think house prices are going to collapse, do you see this happening in the near term (next 2 years) or not for another 8 years? Thanks.

Ref hosue prices,the 80% scheme needs your firm to fund it then claim it back.A lot of people won't get it.Property prices have been about credit availability for 20 years not salaries.

Sounds like you need investment advice from someone who has liability insurance to be honest.We're here to swap ideas/data/opinions/research and then make our own decisions, not burden the OP with responsibility for our financial situations.

[sancho panza]

https://wolfstreet.com/2020/04/08/how-covid-19-lockdowns-impact-u-s-new-used-vehicle-sales-beyond-ugly/

How Lockdowns Hit U.S. New & Used Vehicle Sales: Beyond Ugly

And there is now a historic jobs crisis underway, of a depth and suddenness that no one has ever seen before. Over a period of two weeks, 10 million unemployment claims were processed and posted. Many more were filed but weren’t processed because the systems couldn’t deal with that tsunami of claims. California Governor Gavin Newsom said on Tuesday that over 3 million

The US might end up with 30 million or more unemployed workers.

 

https://wolfstreet.com/2020/04/07/first-data-points-on-how-covid-19-hit-construction-activity-in-germany-france-italy/

At the national level, the sharpest decline was registered in Italy, which got hit first by the COVID-19 crisis and was the first European country to halt all non-essential activities, including construction. As a result, its construction PMI collapsed nearly 35 points from 50.5 in February to 15.9 in March

In France construction activity slumped by 15 points from 50.2 to 35.2.

In Germany, the arrival of Covid ended the country’s multiyear construction boom, which was one of the last remaining growth drivers of its stuttering export-led economy. The headline PMI plunged from 55.8 in February to 42.0 in March, its lowest level in over 7 years.

During the Global Financial Crisis and the Euro Debt Crisis, back-to-back between 2008 and 2012, tens of thousands of construction companies hit the wall, taking thousands of suppliers with them. The destruction was particularly pronounced in countries that had experienced large housing bubbles such as Ireland and Spain. But some of the big, heavily indebted, well-connected ones had their debt loads restructured by their ECB-supported banks and their most toxic assets taken off their books and hidden in taxpayer-supported “bad banks.” This time around, the locus has expanded. Now, the biggest housing and construction bubbles are in cities like Amsterdam and major cities in Germany.

[Democorruptcy]

31 minutes ago, sancho panza said:

Ona totally different topic YRS,I changed my first light fitting today,at the tender age of 49.

When the kids get home,I'll be going into the garden and planting the rest of my spuds as I've graduated from @Bobthebuilder gardening school.

My Mrs was so excited by the light switch as I never do DIY.Normally I'd pay someone or get the LL to do it.This thread has changed me.......................................

It's not dark yet.

[Loki]

17 minutes ago, sancho panza said:

Ref hosue prices,the 80% scheme needs your firm to fund it then claim it back.A lot of people won't get it.Property prices have been about credit availability for 20 years not salaries.

Sounds like you need investment advice from someone who has liability insurance to be honest.We're here to swap ideas/data/opinions/research and then make our own decisions, not burden the OP with responsibility for our financial situations.

I can't edit my post but re: CNA above, I do want to point any posts like that are laughing at myself/the situation for a bit of fun rather than having a go at durhamborn or anyone else.  Shares will do what they do, got to have a laugh about it though.  I'm a big boy and I made my own choices 

[sancho panza]

9 minutes ago, Loki said:

I can't edit my post but re: CNA above, I do want to point any posts like that are laughing at myself/the situation for a bit of fun rather than having a go at durhamborn or anyone else.  Shares will do what they do, got to have a laugh about it though.  I'm a big boy and I made my own choices 

I wasn't referring to you Loki,you've been around a long time and know how life works.There's beena few of these moneysavingexpert type posts lately by people who clearly havent read the thread or tehy'd know the answer.It's like coming in at page 348 and asking for a quick run through of the preceeding 847 pages.

Wasn't tlaking about that share which I won't name,we've probably burned more per centage wise than anyone.I'm overjoyed that YRS might have signalled the bottom as he's as bad a market timer as me,slightly worried by @Castlevania as he sounds like he knows what he's talkking about.We'll go through teh bankruptcy prcoeedings we're down that much.

 

 

[PaulParanoia]

3 minutes ago, sancho panza said:

asking for a quick run through of the preceding 847 pages

I don't think you can expect new comers to read 847 historic pages of this most excellent thread.  That's a heck of a lot of reading.  I've dipped in and out since it started on TOS but I've not had have time to read every single post.  And as Loki says, at the end of the we make my own decisions.  I'll read the considered thoughts of others which sometimes influence my own opinions, but at the end of the day, it's me who presses those 'buy' or 'sell' buttons.

[DurhamBorn]

53 minutes ago, TheCountOfNowhere said:

https://www.ccn.com/dow-jones-jumps-as-billionaires-pump-stock-market-with-hope/

 

Dow Jones Skyrockets as Billionaires Pump Stock Market With Hope

 

Same thing happened in 1929

https://time.com/5707876/1929-wall-street-crash/

 

 because of an intervention by the bankers to protect their wealthy clients, as well as to try to counter the panic. The buying was done by Richard Whitney, who represented a pool of moneyfrom people like the House of Morgan. [They thought] there’s panic selling, but they can stop the panic by going in and buying stock. So he started buying left and right, and he reversed the crash and restored the market to almost pre-Black Thursday levels. But when stocks fell more than 10% on both the following Monday and Tuesday, the market crashed without coming back. In about two weeks’ time, stocks lost about a third of their value.

 

 

 

1929 was at the end of an inflation cycle where CBs couldnt print,this one is the end of a dis-inflation where CBs can (and will) print as much as they want.That means the market might fall again more,but the internals will be much different.The main wealth destruction is ahead of course,but its inflation that will do it over the cycle.

Its always the thing people fear least that hurst them most.In the UK,houses,bonds and cash.

[DurhamBorn]

3 hours ago, HolyCow said:

@DurhamBorn What kind of effect do you think the free furlough monies and payments to companies will have on property prices? Surely this is basically to keep the housing market aloft as it is the economy? I know you think house prices are toast (especially in the South East) but I really don't see the Government letting their holy cow fall. Surely they will come up with some scheme to keep prices high so the economy doesn't collapse and to keep boomer votes and confidence high once this is all over?

Also, what do you think about cash at the moment? What percentage (if any) of a portfolio would you recommend keeping in cash? Is cash the best asset to have in a deflation? Also, if you still think house prices are going to collapse, do you see this happening in the near term (next 2 years) or not for another 8 years? Thanks.

Where people invest is up to their risk tolerance,age, etc etc.House prices are toast in the south.Government wont want a crash,but its low down their wish list.This is a cycle turning event,they happen about 3 times a century.Since 1982 everything was in house prices favour,from today forwards everything is against them.Everything.Inflation adjusted southern prices will go down 70%,in the north they might hold nominal and fall maybe 20%-30% inflation adjusted over the cycle.

My son is buying at the moment,he could pull out but iv told him not too.They have very secure jobs (Aldi and teacher) and got a fantastic 10 year fix mortgage.Il cover any falls if needed as i think the prices here will rise over the cycle,nominal at least.

[Castlevania]

Nah. I sold most of my CNA holding last Summer when they plunged, and I was down around 50% before dividends. I take the view that when something has fallen 50% I should re-review, and either buy more if I think they’re fundamentally undervalued or sell if I think the investment case is no longer there. Whilst my approach to investments is mainly buy and hold and not worry about market volatility, I do try and avoid the do nothing approach when something’s plunged. So I cut most and kept a small amount as they were showing some signs of turning the corner.

I re-reviewed over the weekend after they’d fallen another 50% or so from the levels when I sold last Summer, and I couldn’t get myself to buy. So sold. Bought some Harmony with the proceeds.

I’ll be keeping an eye on them. If a number of their thinly capitalised competitors keel over from bad debts due to bat flu or they somehow manage to offload their nuclear stake then they will be worth reappraising. 

[HolyCow]

5 minutes ago, DurhamBorn said:

Where people invest is up to their risk tolerance,age, etc etc.House prices are toast in the south.Government wont want a crash,but its low down their wish list.This is a cycle turning event,they happen about 3 times a century.Since 1982 everything was in house prices favour,from today forwards everything is against them.Everything.Inflation adjusted southern prices will go down 70%,in the north they might hold nominal and fall maybe 20%-30% inflation adjusted over the cycle.

My son is buying at the moment,he could pull out but iv told him not too.They have very secure jobs (Aldi and teacher) and got a fantastic 10 year fix mortgage.Il cover any falls if needed as i think the prices here will rise over the cycle,nominal at least.

Thanks @DurhamBorn and just to make it clear @sancho panza, I would never hold a stranger on an internet site responsible for my investment decisions. I probably could have worded the above a bit better but of course always interested in your insights and opinions on such things as you seem to have quite a different view to the mainstream. 

[MrXxxx]

41 minutes ago, Loki said:

I can't edit my post but re: CNA above, I do want to point any posts like that are laughing at myself/the situation for a bit of fun rather than having a go at durhamborn or anyone else.  Shares will do what they do, got to have a laugh about it though.  I'm a big boy and I made my own choices 

Agree, and I will not be buying any of the shares `that cannot be named`, following share buying tips from the poster who `will not be named`, but whom the market does the opposite to once he has traded! :-) :-):-)...and it's not a reference to DB :-)

[Popuplights]

Just opening a s+s ISA for my wife, and transferring in some comedy cash ISAS that currently yield about 1%. Hopefully I can now position the family finances for our future, and my early retirement.

[DurhamBorn]

If Centrica got back to being down 25% never mind up id be like,

 

[Barnsey]

57 minutes ago, DurhamBorn said:

Where people invest is up to their risk tolerance,age, etc etc.House prices are toast in the south.Government wont want a crash,but its low down their wish list.This is a cycle turning event,they happen about 3 times a century.Since 1982 everything was in house prices favour,from today forwards everything is against them.Everything.Inflation adjusted southern prices will go down 70%,in the north they might hold nominal and fall maybe 20%-30% inflation adjusted over the cycle.

My son is buying at the moment,he could pull out but iv told him not too.They have very secure jobs (Aldi and teacher) and got a fantastic 10 year fix mortgage.Il cover any falls if needed as i think the prices here will rise over the cycle,nominal at least.

Looks like your son got in just in time, they now want a 40% deposit from first time buyers like me, f**k that, I sit and wait for lending restrictions to ease, I just hope I’m not frozen out of the market for long enough for rates to start climbing up especially for long fixes. Tent in a bush and heroin use await if so.

[DurhamBorn]

14 minutes ago, Barnsey said:

Looks like your son got in just in time, they now want a 40% deposit from first time buyers like me, f**k that, I sit and wait for lending restrictions to ease, I just hope I’m not frozen out of the market for long enough for rates to start climbing up especially for long fixes. Tent in a bush and heroin use await if so.

Yeah i noticed that.I think they will go back to 20% pretty soon.They probably want to see the first slice knocked off prices first.

[Don Coglione]

54 minutes ago, DurhamBorn said:

If Centrica got back to being down 25% never mind up id be like,

 

Tune!

[headrow]

3 hours ago, sancho panza said:

 

Sounds like you need investment advice from someone who has liability insurance to be honest.We're here to swap ideas/data/opinions/research and then make our own decisions, not burden the OP with responsibility for our financial situations.

That horse has already bolted. Look at the portfolio that TDOG  put up on here a couple of months ago , all the stocks that were 'discussed' on here in it. He must be down a huge amount. Hope he didn't capitulate and sell out at the lows.

[Loki]

17 minutes ago, headrow said:

That horse has already bolted. Look at the portfolio that TDOG  put up on here a couple of months ago , all the stocks that were 'discussed' on here in it. He must be down a huge amount. Hope he didn't capitulate and sell out at the lows.

He must have known drops were inevitable...I mean that's the whole premise of the thread, laddering in.  My portfolio is 'down' by 20% but a) that includes some punts that didn't pay off yet, if at all and b) it's the whole premise of the thread

(I thought it could stand to be repeated) 

Fair play to him for posting it though, I'm too embarrassed by the small amounts of money and some of my choices to post mine 

Edit 2: sorry for brief off topic but @Shamone I did laugh when I saw your name change from Simon.  EH HEHHHH HEHHHH HEHHH, SHAMONE

[Popuplights]

10 minutes ago, Loki said:

He must have known drops were inevitable...I mean that's the whole premise of the thread, laddering in.  My portfolio is 'down' by 20% but a) that includes some punts that didn't pay off yet, if at all and b) it's the whole premise of the thread

(I thought it could stand to be repeated) 

Fair play to him for posting it though, I'm too embarrassed by the small amounts of money and some of my choices to post mine 

Haha, yeah, I get the impression that everyone else on this thread is a junior Warren Buffet,!!

[Bobthebuilder]

2 hours ago, Castlevania said:

So sold. Bought some Harmony with the proceeds.

I have been thinking about Harmony recently, never occured to me to sell dogs to buy a potential, great thinking CV.

[sancho panza]

 

3 hours ago, DurhamBorn said:

1929 was at the end of an inflation cycle where CBs couldnt print,this one is the end of a dis-inflation where CBs can (and will) print as much as they want.That means the market might fall again more,but the internals will be much different.The main wealth destruction is ahead of course,but its inflation that will do it over the cycle.

Its always the thing people fear least that hurst them most.In the UK,houses,bonds and cash.

Interesitng point.I need to remember that..

3 hours ago, HolyCow said:

Thanks @DurhamBorn and just to make it clear @sancho panza, I would never hold a stranger on an internet site responsible for my investment decisions. I probably could have worded the above a bit better but of course always interested in your insights and opinions on such things as you seem to have quite a different view to the mainstream. 

Sorry if I soudned harsh,I'm not the gatekeeper here,it's just your questions,whislt simple could easily have jsutified long complex answers.DB answers everyone as he's very polite.

Genereally,,the basement's a place where people want to help and it's the better for it.

[sancho panza]

55 minutes ago, Loki said:

He must have known drops were inevitable...I mean that's the whole premise of the thread, laddering in.  My portfolio is 'down' by 20% but a) that includes some punts that didn't pay off yet, if at all and b) it's the whole premise of the thread

(I thought it could stand to be repeated) 

Fair play to him for posting it though, I'm too embarrassed by the small amounts of money and some of my choices to post mine 

Guyana Goldfields,that which shan't be named,Tinka,Rio2,Superior Gold............is anyone still awake?

[Don Coglione]

"Doing nothing" is a dangerous game...

I bought into HMY at an average of $1.60, saw it run up past $4.00, then watched it drop back below $2.00. It is recovering now. 

As I have posted before, I also bought into SBGL at an average of $2.60, sold at $4.00 after a wild ride, watched it run to $13.00 and then drop.

At least TGZ is covering my losses on CNA. Then I have to factor in INFA...

What to do. Another glass of wine, I think!

[ThoughtCriminal]

20 hours ago, DurhamBorn said:

Yes you open it with the one you want to use.HL is my no1 choice,due to size and they offer a very good range of shares etc.

Inflation is coming,but no need to worry too much for now,deflation is still everywhere.The main damage from inflation will come between 2025 and 2028.Thats when i expect it to go from 5%-7% to 15%-25%.Once it gets going though i dont see any pullbacks,it will just build and build.Those number assume the printing is only getting started though.If they stopped now we would get systemic collapse.

Thanks for that DB, and all the work you’ve put in educating those of us who needed it. 

 

I guess we’re all here because we’re willing to think outside of the box, but most of us need that nudge and I for one am eternally grateful.

[Loki]

4 minutes ago, Ponty Mython said:

INFA

Yup, that's one of mine!  Made a profit too, the first time round.  Bought back in again....