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


spunko

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ThoughtCriminal
5 hours ago, Chewing Grass said:

Its worse than that, anyone who buys an electric corsa for that price is paying for the equivalent of 150-180,000 miles of motoring up front with a car that is structurally incapable of withstanding such mileage (increased weight) in the UK.

Petrol £12K OTR, Electric £34K-3K= £31K

Difference £19K or 3440 gallons of petrol

50mpg = 172,000 miles

Oh, and the car is frigging ugly as sin courtesy of being a restyled Peugeot.

Average distance to scrap of this class of car is 72,000 miles.

 

Isn’t it amazing that a load of bozos like us can see that it’s just utter bollocks, a total non starter?
 

Yet some genius with degrees coming out of his ears saw it and said “Sound. We’ve got a big winner there”. And signed off on it.

 

35k. For a CORSA. Wow.

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leonardratso

72K ? Id buy a horse off a pikey and pull the fucker with that if my cars only did 72K.

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New car prices haven't made any sense vs used ever, really. Even moreso now that new car purchases have been financialised.

In the teeth of the GFC, I bought a ten year old Ferrari and a three year old Golf. The original buyer of the Golf paid more for a brand new mundane diesel estate car than I did for a piece of Italian automotive art.

The Golf has cost me about a grand a year in depreciation. The Ferrari has doubled in value at a conservative estimate. Anecdotal evidence of profligacy being rewarded and thrift punished.

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DurhamBorn
17 minutes ago, leonardratso said:

72K ? Id buy a horse off a pikey and pull the fucker with that if my cars only did 72K.

Ours arent ran in until they hit 100k xD,72k is a joke isnt it,pathetic.

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TheCountOfNowhere
40 minutes ago, AWW said:

New car prices haven't made any sense vs used ever, really. Even moreso now that new car purchases have been financialised.

In the teeth of the GFC, I bought a ten year old Ferrari and a three year old Golf. The original buyer of the Golf paid more for a brand new mundane diesel estate car than I did for a piece of Italian automotive art.

The Golf has cost me about a grand a year in depreciation. The Ferrari has doubled in value at a conservative estimate. Anecdotal evidence of profligacy being rewarded and thrift punished.

https://www.automobilemag.com/news/classic-car-market-predictions-2020/

 

What goes up must come down. Bloody bubbles everywhere. 

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12 minutes ago, TheCountOfNowhere said:

https://www.automobilemag.com/news/classic-car-market-predictions-2020/

 

What goes up must come down. Bloody bubbles everywhere. 

Every year I have to get my Lancia valued for the insurance company. Every time it goes up in value they put more restrictions on when, where and for how long I can use it.

I hope the value collapses then I can drive the thing when and where I want.

Of course Covid means I can't drive it at all :PissedOff:

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54 minutes ago, TheCountOfNowhere said:

https://www.automobilemag.com/news/classic-car-market-predictions-2020/

 

What goes up must come down. Bloody bubbles everywhere. 

I hope the classic car bubble bursts - I don't buy cars as investments, I buy them to enjoy them - driving, fixing, improving.

It would breathe some life back into the owners clubs and make parts prices cheaper if non-petrolheads stopped seeing cars as investments.

Look at the state of PistonHeads - most of the threads are about leasing or classic car values. Yawn.

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TheCountOfNowhere
3 minutes ago, AWW said:

I hope the classic car bubble bursts - I don't buy cars as investments, I buy them to enjoy them - driving, fixing, improving.

It would breathe some life back into the owners clubs and make parts prices cheaper if non-petrolheads stopped seeing cars as investments.

Look at the state of PistonHeads - most of the threads are about leasing or classic car values. Yawn.

Bit like houses 

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Off topic: Just a thought I wanted to post here for review

If we do get a rally up in the markers as per David Hunter over the summer and crash later this year, will that necessarily reflect on the economy?  The markets have shot up in the middle of a huge financial event (Call it what you will) so does it follow they will tank an already damaged economy on the way down?  They're already divorced from the day to day reality of 99% of people.

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3 hours ago, DurhamBorn said:

Ours arent ran in until they hit 100k xD,72k is a joke isnt it,pathetic.

ptffff, polo on 130k and still going

 

n00b

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leonardratso
39 minutes ago, No One said:

ptffff, polo on 130k and still going

 

n00b

yeah, years ago my old 16v golf had 280K on the clock before the gearbox fell out of it, well, half of it, 3rd and 4th still worked, i started it in 3rd foot flat on floor to get it kangaroo'ing home. This is how long ago it was, a montego gearbox fitted it, great car, until it wasnt. haha, i hate cars, i run them until they are dead or kill me whichever comes first.

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Bricks & Mortar
5 hours ago, Loki said:

Off topic: Just a thought I wanted to post here for review

If we do get a rally up in the markers as per David Hunter over the summer and crash later this year, will that necessarily reflect on the economy?  The markets have shot up in the middle of a huge financial event (Call it what you will) so does it follow they will tank an already damaged economy on the way down?  They're already divorced from the day to day reality of 99% of people.

I don't think this is off-topic at all.  It's the sort of thing I'm here for.  Much more than just stock moves for personal gain.
About 14% of Brits own shares directly.  That may have jumped recently, if we followed the US trend of opening new accounts for some lockdown trading.
The number who own shares indirectly, via a pension, savings or investment fund must be much higher.  I haven't numbers, but I'll guess it takes the total up to between 1/3 and half of us.  But, crucially, this is the wealthier portion of society.
Very few can fund a large purchase, like a car, or house extension from saved cash.  Common routes to these are taking money out of the above.  And borrowing, of course, (also to be severely curtailed in the sort of debt deflation crash we've been predicting).

So, yeah, I think the regular economy tanks severely in that sort of financial event, with builders, the car industry at other high value items at the forefront.  Central bank will almost certainly print and keep printing until the losses are reversed, and likely quick enough that your local pie shop only misses its sales to the local builders for a short while.

 

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Excellent interview with Jesse Felder, a summary for those who don't have time to watch: We're in the top 1% of valuations...bottom 1% of economic outcomes.

 

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15 hours ago, Castlevania said:

That doesn’t make sense to me. I thought people took scrip to avoid paying income tax on dividends? 

Edit: looks like the tax treatment changed when dividend taxation was reformed in 2016. So, it’s taxed as income. Bah!

Oh all right, I'll take them off your hands for cash at 60p to the pound.  Far better than what you'll get on the street.  All on the QT, no one need know.

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9 hours ago, No One said:

ptffff, polo on 130k and still going

 

n00b

My lovely polo blew up at 80K.  Very annoyed.  Hyundai on 150k though.

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9 hours ago, No One said:

ptffff, polo on 130k and still going

 

n00b

I did more than 200k miles on my 2002 Honda Accord before it started falling apart. Wonderful cars but they don't sell them in the UK anymore :( 

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1 minute ago, BearyBear said:

I did more than 200k miles on my 2002 Honda Accord before it started falling apart. Wonderful cars but they don't sell them in the UK anymore :( 

I wonder if the two are connected!

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Just now, Harley said:

I wonder if the two are connected!

I don't think so, Honda said declining sales was the reason behind it. I can understand as it's just a simple, boring car, and quite expensive when new.

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Napoleon Dynamite
4 minutes ago, BearyBear said:

I don't think so, Honda said declining sales was the reason behind it. I can understand as it's just a simple, boring car, and quite expensive when new.

I think the popularity of SUV's finished off the Accord.  Honda's CRV is a big seller.

Pity as the Accord would be the perfect car for me, don't want something as big/expensive as a CRV at the moment.

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TheCountOfNowhere
On 07/06/2020 at 10:38, Sasquatch said:

I listened to the David Hunter podcast. He seemed so sure of a melt up until labor day (1st Sep). If the S&P does hit 4000 just before then, can I hold my nerve or do I sell out and buy back later? 

Or do I care if I'm in for the long term?

It's an impossible conundrum. Only after the fact, can you be sure of what would have been the correct approach.

"in for the long term"...better to be in it for the long term with more rather than less :P

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jamtomorrow
16 hours ago, sancho panza said:

The problem is that they can't be sure the public will take advantage of it.A feature of deflations is reduced demand for credit.Buying a new car is 90%+ done with credit.It's not the price but rather the monthyl direct debit that may stop consumers.

Agreed, but I don't think that will stop them trying. Including gaming the subsidy as far as it takes to get the consumer to swallow it.

And don't get caught up in the merits of the technology - that's a red herring. All that matters is whether they can find ways (aka: excuses) to keep consumers (aka: voters) afloat as part of funding industrial renewal.

Car manufacturing is their main opportunity beyond housing to do something like this, and they won't be able to resist, because they'll think there are so many votes at stake.

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jamtomorrow
37 minutes ago, Harley said:

My lovely polo blew up at 80K.  Very annoyed.  Hyundai on 150k though.

Disco TD5 on 160K, 20 years old and still starts on the button. Should have been a money-pit, but I do all my own labour. Parts are surprisingly cheap, and there's a good enthusiast community so you can often find a way to repair or refurbish a part rather than renew it.

Total sweet spot in engine technology. None of that fancy dancy common-rail rubbish - pump duese all the way, well within the capability of a home mechanic such as I. Although will prob go for normally-aspirated when the TD5 carks it in another 20y - turbos are just an unnecessary liability ;)

@DurhamBorn surprised you get on so well with your pug - I had a 306 diesel estate that was put together like a clown's car, different piece of bodywork fell off each week.

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I still want my cheap electric buggy for nipping into town.

I could build a solar charge station.

Someone make one please!

PS: No golf cart pictures please!

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Don Coglione
2 minutes ago, Harley said:

I still want my cheap electric buggy for nipping into town.

I could build a solar charge station.

Someone make one please!

PS: No golf cart pictures please!

Do you believe?

image.jpeg.5509e0f37b54153178202cc521f44065.jpeg

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