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

[Harley]

18 hours ago, Starsend said:

Looks like I'm still not doing too badly then. New daily standing charge on mine is 24.102 so mine's overall still a bit cheaper.

Except your post suggests your rate is not fixed, although maybe we are over the worst for now?

[Harley]

1 hour ago, MrXxxx said:

.......continued support of the property bubble would be political suicide.

Not if the banks, etc own it all so we "can be happy"!  inheritance, etc are also other possible scenarios.

A nice segue to a public service announcement (although the above example is, tbh, a bit rubbish as a justification for this!). 

Not having a go so please do not take offence.  Indeed a compliment as it's being taken forward for further thought which is what it all should be about here.

One small example of a potential mind trap sometimes displayed on this thread.  That is incremental thought, or a form of anchoring to the "as-is" world.  Yep, I've said it before.

Incremental thought is dangerous as it can be easily manipulated.  A bit like setting up your gun crews to cover the bug out route you set up as part of your ambush.  Incremental thought would send you right into those guns.

We would all be advised to set our mental reasoning to "11" atm.  To stress test all hypotheses to a far wider (and wild) set of scenarios and see what pops out.  Lateral thinking to the fore with a healthy dose of rational thinking and sense of proportion.

The last 18 months have been an example of incremental thought and to where it can lead (still in progress).  It's how they stay one step ahead of us.

Thankfully, finance folk often have a head start as has been witnessed by them typically being the best sources of analysis of covid s-show to date.

I just want everyone to build in resilience.  That's my contribution.

[Hancock]

2 hours ago, MrXxxx said:

Mmmm, not so sure....they (government) are now going to have to belt tighten due to years of excess, and will have to make a few choices...when the majority of the demographics become renters through no choice, continued support of the property bubble would be political suicide....but I've thought logically like this for years and have continually been `wrong footed`.

More an analogy about the stock market, seems to be a minority claiming its onwards and upwards from here and there isn't going to be a bust such as@goldbug9999 maybe the few are correct.

Inevitable that we'll get a BK but like a HPC may not be for a long time!

[Talking Monkey]

9 hours ago, sancho panza said:

I know at my place of work,we have few ethnic minorities and from the conversations I've had ,uptake is very low.

Possibly one of the reasons we've been left alone by our chain of command.

I agre NA,I found it a summation of a lot this trhead has talked about over the years,jsut without the humourous interludes and pizza recipes.

Dark stuff indeed.That dark it may have even depressed our very own prince of darkness @Talking Monkey...I think it's the unfailing honesty and logic with which he predicts declining disposable income into the distant future(nothing your average basement dweller wouldn't disagree with) that really hits home.

 

 

Prince of darkness that made me proper laugh SP, I  definitely dwell on the negative a bit too long on occasion. 

I really like Dr Tim's stuff for exactly the reason you mention, his unfailing honesty and logic. His stuff is a big contributer to my decision to be overweight in oil. 

I've got to say it is a bit bleak when you take the Seeds economic model and overlay it with what we discuss here, along with forecasters like David Hunter's predictions for end decade. 

Really thinking about how bleak things could potentially get has its benefits, as it kicks one into gear to get on with planning on how to navigate through, think about various scenarios, have contingencies and back ups in place, think about key decision points in advance etc. As that evolves and most importantly in parallel reminding oneself that perspective is everything, you end up in a pretty good state of preparedness and the despondency dissipates. 

 

 

 

 

[MrXxxx]

1 hour ago, Harley said:

Not if the banks, etc own it all so we "can be happy"!  inheritance, etc are also other possible scenarios.

A nice segue to a public service announcement (although the above example is, tbh, a bit rubbish as a justification for this!). 

Not having a go so please do not take offence.  Indeed a compliment as it's being taken forward for further thought which is what it all should be about here.

One small example of a potential mind trap sometimes displayed on this thread.  That is incremental thought, or a form of anchoring to the "as-is" world.  Yep, I've said it before.

Incremental thought is dangerous as it can be easily manipulated.  A bit like setting up your gun crews to cover the bug out route you set up as part of your ambush.  Incremental thought would send you right into those guns.

We would all be advised to set our mental reasoning to "11" atm.  To stress test all hypotheses to a far wider (and wild) set of scenarios and see what pops out.  Lateral thinking to the fore with a healthy dose of rational thinking and sense of proportion.

The last 18 months have been an example of incremental thought and to where it can lead (still in progress).  It's how they stay one step ahead of us.

Thankfully, finance folk often have a head start as has been witnessed by them typically being the best sources of analysis of covid s-show to date.

I just want everyone to build in resilience.  That's my contribution.

I think you make a good point, and agree....people can blind sided`/manipulated to think along a certain path, even when their thought is the apparent opposite of the official government line I.e the recent change in some negative main stream reporting alongside the 16 months of fearmongering `state propaganda`, just to give the illusion of balance.

[Errol]

"You know what the problem is? I will tell you as a former citizen of the former Soviet Union. What is the problem of empires? They think they are so powerful that they can afford small errors and mistakes. But the amount of problems grows and a moment comes when they can no longer be managed. And the United States, with a confident gait and a firm step, are going straight down the path of the Soviet Union."

Vladimir Putin, June 2021

[No One]

1 hour ago, Errol said:

"You know what the problem is? I will tell you as a former citizen of the former Soviet Union. What is the problem of empires? They think they are so powerful that they can afford small errors and mistakes. But the amount of problems grows and a moment comes when they can no longer be managed. And the United States, with a confident gait and a firm step, are going straight down the path of the Soviet Union."

Vladimir Putin, June 2021

He's not wrong. He saw first hand how the USSR collapsed.

[Barnsey]

Late 90s episode of Bruce's Price is Right on TV at the moment, we really do seem to have forgotten just how lucky we've been during the 20 years of disinflation since.

2 wooden outdoor chairs and a parasol = £500, 7 inch portable DVD player = £900 

Absolutely convinced we're turning back now.

[JMD]

26 minutes ago, Barnsey said:

Late 90s episode of Bruce's Price is Right on TV at the moment, we really do seem to have forgotten just how lucky we've been during the 20 years of disinflation since.

2 wooden outdoor chairs and a parasol = £500, 7 inch portable DVD player = £900 

Absolutely convinced we're turning back now.

Agreed, 'good-game good-game', however am not wholly convinced any of the resultant pain, responsibility or blame can be levelled purely at Bruce Forcyth!?!

[Shamone]

15 hours ago, sancho panza said:

As Ive said,too many people focues on delfation/inflation as if you can't have both.

I think finacialization will go bsut and we will face a huge credit deflation.

However,I alos think if our currency crashes then we'll be paying more oil either way.

AS ever,the commentariat are talking as if the only safe currencies are western currencies.jsut like on the oil supply/demand imbalance discussions as per  @Cattle Prod they're looking the worng way at a crucial moment

I have to watch what I say here but someone I know took advice off the senior economist for a High St bank which stated quite simply,that inflationary pressures would pass(so they didn't bother with a fixed rate mortgage).I said nothing but immediately thought of @Barnsey 15 year fix and know which bus I'd get on.

These people at the top of the system don't see the crash coming even if theyve created it.....

That's a pciture and half right there HE......holy smoly...

Never underestimate the peace of mind that comes with a 10 year fix. 

[leonardratso]

wish i could fix my gas+elec for 10 yrs, thats a jumpy fucker every contract end.

[AlfredTheLittle]

1 hour ago, Barnsey said:

Late 90s episode of Bruce's Price is Right on TV at the moment, we really do seem to have forgotten just how lucky we've been during the 20 years of disinflation since.

2 wooden outdoor chairs and a parasol = £500, 7 inch portable DVD player = £900 

Absolutely convinced we're turning back now.

That would suit me if housing came down in the same way. The 20 years since have seen prices of consumables tumble but housing shoot up to compensate. If that now reverses, the people worst hit will be those buying houses now at the top, then paying top prices for everything else in the next couple of decades while also trying to pay off the house.

[DurhamBorn]

38 minutes ago, AlfredTheLittle said:

That would suit me if housing came down in the same way. The 20 years since have seen prices of consumables tumble but housing shoot up to compensate. If that now reverses, the people worst hit will be those buying houses now at the top, then paying top prices for everything else in the next couple of decades while also trying to pay off the house.

Housing  could take up all of a macro strategist's time on its own.Its got so many things cross market that affects it.If there was such a thing as a degree course for macro strategy then setting the students to work on UK housing would be a great subject for them to learn,and also for their teacher to mark them on.

What is obvious from only half an hour looking at things is that people who work and pay tax are actually funding their own destruction through those taxes.

If i just take one little example.

3 bed semi over the road from me.Nice house,needed a bit of work,maybe £10k.Went up for £120k just before Covid.

I saw a few young couples,obvious working,who it would of been a great house,somewhere to bring up a family.

They didnt buy it though because a cash buyer came forward.A retired council worker.She used her pension lump sum to buy it and with a sub from the person who rents it to's mother,her sister.She rents it to her niece who has 5 kids.She gets £700 housing benefit that she gives to her aunty.So her aunty bought a house with taxpayers money,then rents it to her niece who gets £700 in taxpayers money to hand to her aunty.She also gets another £500 a week in benefits,she has exchanged her 3 year old BMW this week for a brand new one.

So they are all sitting pretty not working and getting massive mounts of taxpayer money.

 

[goldbug9999]

1 hour ago, AlfredTheLittle said:

That would suit me if housing came down in the same way. The 20 years since have seen prices of consumables tumble but housing shoot up to compensate. 

Indeed, if a house was to still cost say 100 x the price of a DVD player we'd be laughing. It does make you realise that though that high house prices is not just a "nuisance" its literally soaking up and neutralising several decades of technological and productivity gains which should be benefitting everyone. 

[MrXxxx]

29 minutes ago, DurhamBorn said:

.If there was such a thing as a degree course for macro strategy then setting the students to work on UK housing would be a great subject for them to learn,and also for their teacher to mark them on.

They've not mastered student loans and compound interest yet, can we leave the advanced curriculum for a PhD?! :-)

[Noallegiance]

2 hours ago, DurhamBorn said:

Housing  could take up all of a macro strategist's time on its own.Its got so many things cross market that affects it.If there was such a thing as a degree course for macro strategy then setting the students to work on UK housing would be a great subject for them to learn,and also for their teacher to mark them on.

What is obvious from only half an hour looking at things is that people who work and pay tax are actually funding their own destruction through those taxes.

If i just take one little example.

3 bed semi over the road from me.Nice house,needed a bit of work,maybe £10k.Went up for £120k just before Covid.

I saw a few young couples,obvious working,who it would of been a great house,somewhere to bring up a family.

They didnt buy it though because a cash buyer came forward.A retired council worker.She used her pension lump sum to buy it and with a sub from the person who rents it to's mother,her sister.She rents it to her niece who has 5 kids.She gets £700 housing benefit that she gives to her aunty.So her aunty bought a house with taxpayers money,then rents it to her niece who gets £700 in taxpayers money to hand to her aunty.She also gets another £500 a week in benefits,she has exchanged her 3 year old BMW this week for a brand new one.

So they are all sitting pretty not working and getting massive mounts of taxpayer money.

 

Is this 'business plan' not scuppered when the printing press gets switched off?

[Barnsey]

1 hour ago, Noallegiance said:

Is this 'business plan' not scuppered when the printing press gets switched off?

If it's not them though, it's Lloyds Bank and others which are already starting to buy up housing stock to rent out, any drop in prices and they swoop in 

https://www.theguardian.com/business/2021/aug/19/lloyds-plans-big-move-into-uk-rental-market-with-50000-homes

[Loki]

12 minutes ago, Barnsey said:

If it's not them though, it's Lloyds Bank and others which are already starting to buy up housing stock to rent out, any drop in prices and they swoop in 

https://www.theguardian.com/business/2021/aug/19/lloyds-plans-big-move-into-uk-rental-market-with-50000-homes

Blackrock horse

[DurhamBorn]

This was always likely to happen and its good to see the likes of L+G might be involved.Real asset investment is the right area for pension schemes in a reflation.Its very likely that we will be booming in the north by late in the cycle.Sell energy companies they said last year 

https://www.telegraph.co.uk/business/2021/08/28/investors-race-back-new-brexit-super-port/

[JMD]

4 hours ago, MrXxxx said:

They've not mastered student loans and compound interest yet, can we leave the advanced curriculum for a PhD?! :-)

Ahhh, no longer an issue - you see there will be no actual exams, all shall receive prizes through 'continual assesment'!? Schools have gotten used to this way of doing for last two years and want it to expand. Oh and bye the way, please refrain from using the trigger term 'mastered'?!?                                                                                          Couldn't make any of this crazy stuff up could you? ps I didn't!!!

[Hancock]

5 hours ago, DurhamBorn said:

Housing  could take up all of a macro strategist's time on its own.Its got so many things cross market that affects it.If there was such a thing as a degree course for macro strategy then setting the students to work on UK housing would be a great subject for them to learn,and also for their teacher to mark them on.

What is obvious from only half an hour looking at things is that people who work and pay tax are actually funding their own destruction through those taxes.

If i just take one little example.

3 bed semi over the road from me.Nice house,needed a bit of work,maybe £10k.Went up for £120k just before Covid.

I saw a few young couples,obvious working,who it would of been a great house,somewhere to bring up a family.

They didnt buy it though because a cash buyer came forward.A retired council worker.She used her pension lump sum to buy it and with a sub from the person who rents it to's mother,her sister.She rents it to her niece who has 5 kids.She gets £700 housing benefit that she gives to her aunty.So her aunty bought a house with taxpayers money,then rents it to her niece who gets £700 in taxpayers money to hand to her aunty.She also gets another £500 a week in benefits,she has exchanged her 3 year old BMW this week for a brand new one.

So they are all sitting pretty not working and getting massive mounts of taxpayer money.

 

Tell the local smackheads that they're on holiday for a few weeks and have loads of fancy goods in their house.

Just drive past a housing estate of 3 bed semis in Beverley, and there was 2 next to each other both with "To Let" signs up, fucken joke as these were estates for families to be settled, not for some parasitic cunt to grab someone elses wages.

[King Penda]

5 hours ago, DurhamBorn said:

Housing  could take up all of a macro strategist's time on its own.Its got so many things cross market that affects it.If there was such a thing as a degree course for macro strategy then setting the students to work on UK housing would be a great subject for them to learn,and also for their teacher to mark them on.

What is obvious from only half an hour looking at things is that people who work and pay tax are actually funding their own destruction through those taxes.

If i just take one little example.

3 bed semi over the road from me.Nice house,needed a bit of work,maybe £10k.Went up for £120k just before Covid.

I saw a few young couples,obvious working,who it would of been a great house,somewhere to bring up a family.

They didnt buy it though because a cash buyer came forward.A retired council worker.She used her pension lump sum to buy it and with a sub from the person who rents it to's mother,her sister.She rents it to her niece who has 5 kids.She gets £700 housing benefit that she gives to her aunty.So her aunty bought a house with taxpayers money,then rents it to her niece who gets £700 in taxpayers money to hand to her aunty.She also gets another £500 a week in benefits,she has exchanged her 3 year old BMW this week for a brand new one.

So they are all sitting pretty not working and getting massive mounts of taxpayer money.

 

If it’s a relative renting via hb  a recently bought house they often ask that the house has a history of being rented out before it can be rented to a relitive .

[DurhamBorn]

46 minutes ago, King Penda said:

If it’s a relative renting via hb  a recently bought house they often ask that the house has a history of being rented out before it can be rented to a relitive .

She bought this one to rent to her niece.

[Harley]

On 27/08/2021 at 23:14, sancho panza said:

Another decent size goldie trading on 7 times historic earnings

Decl:long

Agreed.  Part of a sub-sector to watch as it hopefully bottoms.  DYOR.

[King Penda]

6 hours ago, DurhamBorn said:

She bought this one to rent to her niece.

That’s a bit naughty I think .but lots do it .I’m not sure how close the relationship has to be before it’s ok.I know parents is a no no but ok if the house has been rented out before