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

[Hancock]

7 minutes ago, HousePriceMania said:

I remember when workers were up in arms about this

https://www.bbc.co.uk/news/uk-scotland-scotland-business-58403087

 

Scotland to trial a four-day week

 

"Scotland is to trial a four-day week, but without a loss of pay. A report out today includes some ideas for how it could be done, drawing on experience in Iceland and New Zealand."

• 
  
  Scotland to trial 20% pay rises.

Put people on a price and they'll be able to take 3 days off a week.

 

[belfastchild]

24 minutes ago, Cattle Prod said:

 that's pretty funny too.

I've spent a fair amount of time in the Arctic, and sub arctic oil towns, and I think you get used to it. The other thing is the right clothes. I genuinely didn't feel cold with baselayers, proper boots and a parka.

I could think of worse places to be than snowed in in a well insulated Canadian cabin with months of food supplies and timber all round. If gas does run short at any point and our cosseted benefit class gets cold for a night, some of our lovely cities are going to explode @sancho panza

I went to buy one of those fancy canada goose parkas. The guy in the shop asked me where I came from. Ireland, says I. How cold does it get there? Well my house got to -18C once. No good to you my friend, we only put these on when its -20!
Of course Ive also tried winter coat shopping in Hong Kong. Went through 3 sales people before we got to the concept of minus degrees C. No, they didnt have anything suitable either.

On your gas shortage/price hikes point. Dont forget the electricity as well. Came very close to brown outs in the UK last winter (as every winter). First big wind lull of longer than a day or two this winter and we will perhaps finally see the years of underinvestment in uk electricity infrastructure.
Due to Brexit (or not, but Brexit gave them the kick up the ass to get it started) they are building a new interconnect from France to Ireland for excess nuclear rather than rely on into SE UK and out through Wales etc. Will make it easier for the French to cut that connection when required ;-)
Interesting times ahead for the UK energy market, and thats before someone with a laptop hacking the entire grid...

[DurhamBorn]

 

49 minutes ago, Cattle Prod said:

100%, I was kind of lumping in electricity with gas, as much of it is produced from gas turbine plants. I need more chopped wood, any spare trees @Harley?

Iv been buying up old calor gas bottles on Facebook marketplace,some are half full for a tenner.Iv got two fires in the attic i got out of a skip,bit of tube and  regulator and good to go.Iv got a campingaz stove as well for cooking.Great them.I take a bottle and that when we go out sometimes and cook a few burgers or sausages,saves coughing up in some expensive cafe ,,.Notice today they are forming long lines to get Kerosene in Sri Lanka.

[harp]

1 hour ago, Cattle Prod said:

100%, I was kind of lumping in electricity with gas, as much of it is produced from gas turbine plants. I need more chopped wood, any spare trees @Harley?

My neighbour had about 10 birch trees  separating our properties. I fucking hate birch trees, dropping those tiny seed pods all summer. Anyway they have all died now and I got speaking to her. I offered to drop the lot and keep the wood. She was chuffed to be getting the job done for free. But baffled why they all died at the same time.  
Amazing what a wood drill bit and roundup altra can do 😉

[leonardratso]

1 hour ago, DurhamBorn said:

 

Iv been buying up old calor gas bottles on Facebook marketplace,some are half full for a tenner.Iv got two fires in the attic i got out of a skip,bit of tube and  regulator and good to go.Iv got a campingaz stove as well for cooking.Great them.I take a bottle and that when we go out sometimes and cook a few burgers or sausages,saves coughing up in some expensive cafe ,,.Notice today they are forming long lines to get Kerosene in Sri Lanka.

whale oil will fix this kerosene problem, i have an imperial gallon somewhere if the ceylonians want to buy it. £500,000 GBP.

[HousePriceMania]

17 hours ago, Boon said:

I'm looking in London, no way have available listings risen, much less is available nowadays.

Good stuff goes immediately or never makes it on there. So the listings are either crap properties or overpriced properties, many are both.

In fact I think this lack of supply in London has actually helped stall the falls. With some ingrained mindsets such as 'renting is dead money' and 'property only goes up' there could be actually forced buyers: those who have sold and want to lock in gains, but also don't want to rent. 

I don't think you can have a massive crash without lots of things coming onto the market. A standard trigger for this would be interest rate increases. But I do wonder whether increased power + food costs is already the equivalent of a c.1% raise in rates. If I had to guess I reckon these items are up 20%+ pre-pandemic.

Hi Boon,

I run the UKPropertyLion index and here's what I've seen  to July 2021. 

 

Note: I didn't do August for 2 reasons:

1) I was away

2) I couldn't be arsed

Anyway, here are the charts of total available listings on RM

 

TOTAL LISTINGS

Not the sharp decline from Jan 2020.  This is echoed in all regions data except London

 

Here's London where number of listings is still above Jan 2020, though it vaguely follows the same pattern as the other regions.

LONDON LISTINGS

For example, this is East of England

EAST OF ENGLAND LISTINGS

 

and this is Wales

WALES LISTINGS

and the North west for reference

NORTH WEST LISTINGS

The number of available listings in approx 50% in most regions from Jan 2020 whereas London is up 5%. 

Now, that should tell us all something, if someone know's what that is, let me know 

If you have some figures that demonstrate your assertion that "no way have available listings risen" I'd like to see them,  until then I'll have to go with the only honest house price index in the world.

 

The S.E. is probably the 2nd least badly affected are and it's down about 40% but certainly down 50% from the peak number of listings I've seen.

SOUTH EAST LISTINGS

I kinda wish I had done August now just to see what was going on but Sept data will be available in a few days. it could be we're both right and London has plummeted, we shall see.

While I am at it, the prices were falling nicely but went up a bit again, looking at the listings I see now I think it'll be down again.

 

Interestingly that chart is the inverse of the number of listings....

 

 

so when we see a large rise in supply we should see a sharp drop in prices.

The establishment are doing a great job at keeping prices at peak unaffordable levels in London though, I suspect this is their plan across the country.

MAX DEBT

[HousePriceMania]

1 hour ago, DurhamBorn said:

 

Iv been buying up old calor gas bottles on Facebook marketplace,some are half full for a tenner.Iv got two fires in the attic i got out of a skip,bit of tube and  regulator and good to go.Iv got a campingaz stove as well for cooking.Great them.I take a bottle and that when we go out sometimes and cook a few burgers or sausages,saves coughing up in some expensive cafe ,,.Notice today they are forming long lines to get Kerosene in Sri Lanka.

They should have some scrap metal value too.

[Harley]

6 hours ago, belfastchild said:

I did laugh out loud at that. Ive spent a lot of time in Canada, sask and alberta mainly.
I thought about emigrating there about 10 years ago. House prices were insanely cheap just outside of the cities. I couldnt understand how you could get a ranch 20 mins drive time out for the same price as a three bedroom condo in the city. I wouldnt even have to sell the house here. Canadian friends explained that 20 mins away in summer might be 2 weeks or more in winter... They then asked me to compare the pantry/larder sizes in the two types of houses. The country pantries were bigger than my bedroom here.
They told me to come out in winter before deciding to move there. I got off the plane and it was -20C and that was the warmest it got the whole month. By week 3 in sask I was sneezing blood and my eyes didnt work (very low humidity).
Car parks are underground and heated and have the equivalent of our yellow box on entry. Why? Well when you go in from -20C the outside of the windscreen steams up and you cant see a thing the first 10m or so, so you dont stop in the box or someone runs into you.
Whole areas of Toronto have underground or overground walkways between the shops/offices.

I was in rural sask one morning and got up at sunrise and went for a walk. It was about -25C and I had never seen the like of it, beautiful blue skies, flat prairie just white to the horizon. Hoar frost about 2 inches thick, absolutely beautiful.
About 10 mins in I saw a couple of guys on skidoos in the distance, I waved (like you do) They waved back and turned on their blue and red lights. A couple of mins later a squad car pulled up behind me. The very polite canadian police officer told me in no uncertain terms to get into the car. He explained to me that the guest house had seen me go out and then couldnt find me so raised the alarm and all 3 of the towns part time cops went out looking for me. He explained that if I slipped and twisted my ankle in this temperature it would be less than 10 mins before I was unconcious and it might be spring before they found my body. I didnt go out walking alone again.

Going back on topic (ish) Potashcorp was everywhere (now called nutrien), they sponsored everything going, charities, arts, local stuff, etc etc, pretty much kept the economy going in certain places (oil in others, try to get a hotel in yellowknife ffs, oil company prices). Lot of money in digging that stuff out of the ground although I doubt you can do it without oil...

I told my old boss I would walk home from the bar up Young St.  He smiled and said get in his car else it'll be spring before they could get me off the sidewalk if I fell over! 

[Harley]

3 hours ago, Cattle Prod said:

100%, I was kind of lumping in electricity with gas, as much of it is produced from gas turbine plants. I need more chopped wood, any spare trees @Harley?

Loads, and I'm still splitting!  I built a store to stack about 4.6mx4.2mx1.5m but that may not be enough and have already filled our other small store.  Maybe I should sell some to pay towards the splitter.  Shall I post you some, gratis?!  Saved loads on heating oil.

PS:  Just pimped my new splitter with assorted leftover parts so I can more easily get it around to all the log piles.

PPS:  The shelter belt of trees has been a triumph five years in.  Thinned out the lower limbs and may need to thin the number of trees soon too.  

[Harley]

On 31/08/2021 at 14:23, janch said:

My analysis was little more than picking a few things which seemed to be rising steadily (sorry @Harley)

Tbh that essentially is my approach too, just with more words! 

[janch]

2 hours ago, DurhamBorn said:

 

Iv been buying up old calor gas bottles on Facebook marketplace,some are half full for a tenner.Iv got two fires in the attic i got out of a skip,bit of tube and  regulator and good to go.Iv got a campingaz stove as well for cooking.Great them.I take a bottle and that when we go out sometimes and cook a few burgers or sausages,saves coughing up in some expensive cafe ,,.Notice today they are forming long lines to get Kerosene in Sri Lanka.

In the 70s the during the power cuts they would cut for a couple of hours in one area then turn the power back on while another part of the town would be cut so you would always get power for at least some of a 24 hour period.  I was at university and I can remember waking up in the morning and looking out the window to see if the lights were on in the Physics building on the hill on the campus.  If there were no lights I'd get back to bed as it would mean no lectures anywhere in the university that morning (the lecture theatres had no windows).  Some shops would operate with candlelight but the cash registers were all manual.......that wouldn't work now

On another tack watching what's happening in Afghanistan it looks as if it's worth having a stash of cash at home as one of the first casualties of any disruption of the power supply/society in general are the banks.  No-one can get their money out.  Credit/debit cards won't work with no power supply either.  This is before the currency is trashed when probably gold/silver coins or just bartering would take over.

[Harley]

On 31/08/2021 at 14:23, janch said:

I'm getting a bit twitchy re BK. 

 

 

[Boon]

@HousePriceMania

I guess my method is different, I look at the number of newly listed properties coming to market in London +1 miles, last 24 hours.

On this measure there is much less coming to market than pre-pandemic. It bombed when the pandemic struck, gradually recovered but dropped again with the stamp duty holiday. It's improved this week, but that may be due to the bank holiday squeezing more listings in.

Don't follow the absolute number of listings, but this doesn't surprise me, actually, because there are a lot of things which are just sitting there, hoping for a bite. 'Taking it off until the market recovers' was a valid enough strategy a while ago, but most people can see that London has not improved in price for a few years, so makes less sense now. So it can certainly be the case that a prospective buyer like me sees hardly anything suitable, but the number of properties keeps going up and up due to more rejects being added to the pile.

Perhaps a better metric might be actual completed sales; that has correlated very well with my observation: bombed when the pandemic struck, gradually recovered over the year, but dropped again after stamp duty.

 

[sancho panza]

5 hours ago, Cattle Prod said:

@sancho panza In terms of the correlation between oil price spikes and recessions, maybe we should add in gas prices to that idea:

Currently 4x pre covid levels in much of the world!

Inetersting idea.I'll  have a look at this on Friday when I have time.Back at work tonight.

I'll also sort through my BK checklist.

2 hours ago, HousePriceMania said:

Hi Boon,

I run the UKPropertyLion index and here's what I've seen  to July 2021. 

 

Note: I didn't do August for 2 reasons:

1) I was away

2) I couldn't be arsed

Anyway, here are the charts of total available listings on RM

 

TOTAL LISTINGS

Not the sharp decline from Jan 2020.  This is echoed in all regions data except London

 

Here's London where number of listings is still above Jan 2020, though it vaguely follows the same pattern as the other regions.

LONDON LISTINGS

For example, this is East of England

EAST OF ENGLAND LISTINGS

 

and this is Wales

WALES LISTINGS

and the North west for reference

NORTH WEST LISTINGS

The number of available listings in approx 50% in most regions from Jan 2020 whereas London is up 5%. 

Now, that should tell us all something, if someone know's what that is, let me know 

If you have some figures that demonstrate your assertion that "no way have available listings risen" I'd like to see them,  until then I'll have to go with the only honest house price index in the world.

 

The S.E. is probably the 2nd least badly affected are and it's down about 40% but certainly down 50% from the peak number of listings I've seen.

SOUTH EAST LISTINGS

I kinda wish I had done August now just to see what was going on but Sept data will be available in a few days. it could be we're both right and London has plummeted, we shall see.

While I am at it, the prices were falling nicely but went up a bit again, looking at the listings I see now I think it'll be down again.

 

Interestingly that chart is the inverse of the number of listings....

 

 

so when we see a large rise in supply we should see a sharp drop in prices.

The establishment are doing a great job at keeping prices at peak unaffordable levels in London though, I suspect this is their plan across the country.

MAX DEBT

Are you solely using RM data?

I think this echoes my own expereince watching a couple of psotcodes.In LE2 we are at two months ivnetory for semis',19 months for flats.

Personally see flats and London as the epicentre of the drop when it comes,they'll pull other things down but are also the msot exposed price wise.

As a fan of Dow theory,prices rising on declining vol is a warning sign to me.

Ref london prices,the sales mix can skew the results if a few big places go through

[HousePriceMania]

2 minutes ago, sancho panza said:

Are you solely using RM data? YES

I think this echoes my own expereince watching a couple of psotcodes.In LE2 we are at two months ivnetory for semis',19 months for flats. MAKES SENSE GIVEN WHAT WE HAVE WITNESSED

Personally see flats and London as the epicentre of the drop when it comes,they'll pull other things down but are also the msot exposed price wise. 100% , THEY ARE THE BOTTOM ON THE PYRAMID, THEY FALL EVERYTHING FALS, ESP LONDON

As a fan of Dow theory,prices rising on declining vol is a warning sign to me. I'll HAVE A LOOK AT THAT THANKS.

Ref london prices,the sales mix can skew the results if a few big places go through YES, I THINK THIS IS WHAT IS HAPPENING WITH THE FIGURES EVERYWHERE NOW.  ONLY PEOPLE BUYING AT THE RICH ONES WHO SELL

 

[HousePriceMania]

27 minutes ago, Boon said:

@HousePriceMania

I guess my method is different, I look at the number of newly listed properties coming to market in London +1 miles, last 24 hours.

On this measure there is much less coming to market than pre-pandemic. It bombed when the pandemic struck, gradually recovered but dropped again with the stamp duty holiday. It's improved this week, but that may be due to the bank holiday squeezing more listings in.

Don't follow the absolute number of listings, but this doesn't surprise me, actually, because there are a lot of things which are just sitting there, hoping for a bite. 'Taking it off until the market recovers' was a valid enough strategy a while ago, but most people can see that London has not improved in price for a few years, so makes less sense now. So it can certainly be the case that a prospective buyer like me sees hardly anything suitable, but the number of properties keeps going up and up due to more rejects being added to the pile.

Perhaps a better metric might be actual completed sales; that has correlated very well with my observation: bombed when the pandemic struck, gradually recovered over the year, but dropped again after stamp duty.

 

Hi Boon, I think you're information is very useful, a missing piece of the jigsaw.  If nothing is coming onto the market and sales volumes move up or hardly fall, then noting is selling !!!!

[harp]

Natural Gas prices 😳

why doesn’t this feed through to big oil companies share prices? They must be raking it in at these levels but the market is just shrugging. 
 

[Majorpain]

26 minutes ago, harp said:

Natural Gas prices 😳

why doesn’t this feed through to big oil companies share prices? They must be raking it in at these levels but the market is just shrugging. 
 

Oil/Gas bad, Greta good.  Narrative is all wrong and they are actively disliked, so until the lights/heating go off....  

Ultimately i look at Shell/BP/Co as dividend machines, I've got a nice low average so the share price can do what it likes, as long as they keep coming every quarter its all good.

[Funn3r]

9 hours ago, belfastchild said:

I did laugh out loud at that. Ive spent a lot of time in Canada, sask and alberta mainly.

I love sunshine and the first to get shirt off when it's sunny, but I do like the cold as well. Lived in upstate New York for a while and near the border so plenty of trips to Toronto and Montreal. Deep snow and minus temps are what you might call "bracing." I never liked trying to clean the car off after what the locals called "ice storms" and I was lucky not to paying any energy bills but other than that it's great if you wrap up warm, preferably with one of those hats with ear flaps. Coming out of the gym and your hair freezing on the way to the car a bit off-putting mind.

[leonardratso]

1 minute ago, Funn3r said:

I love sunshine and the first to get shirt off when it's sunny, but I do like the cold as well. Lived in upstate New York for a while and near the border so plenty of trips to Toronto and Montreal. Deep snow and minus temps are what you might call "bracing." I never liked trying to clean the car off after what the locals called "ice storms" and I was lucky not to paying any energy bills but other than that it's great if you wrap up warm, preferably with one of those hats with ear flaps. Coming out of the gym and your hair freezing on the way to the car a bit off-putting mind.

should have stayed in the hot gym showers with the all the big guys. (yes the short ones).

[Funn3r]

Just now, leonardratso said:

should have stayed in the hot gym showers with the all the big guys. (yes the short ones).

Canada has outdoor jacuzzi, now that's good, walk barefoot 10 yards from indoors to jacuzzi in just your shorts when it's minus 30, very freaky in just that short distance, then get in nice and warm and a glass of fizz.

[Barnsey]

 

[Phil]

21 minutes ago, Barnsey said:

 

Offered a start today. £270. 7.30pm - 3.00am, NHS job Brum. Said OK as more than likely it would be 7.30pm - 1.00 am. Fitted with me. Return call, " its been put on hold, they can't get the materials. 

Paid £849 stoppage, tax etc, today on £2100. Agency. 🤣. Fuck that. Back to gross. 

There's gonna be a problem. Supply chains are finished atm, so welcome in the unemployment. Hopefully it leads to.. dare I say it... 

[Loki]

1 hour ago, Phil said:

Offered a start today. £270. 7.30pm - 3.00am, NHS job Brum. Said OK as more than likely it would be 7.30pm - 1.00 am. Fitted with me. Return call, " its been put on hold, they can't get the materials. 

Paid £849 stoppage, tax etc, today on £2100. Agency. 🤣. Fuck that. Back to gross. 

There's gonna be a problem. Supply chains are finished atm, so welcome in the unemployment. Hopefully it leads to.. dare I say it... 

Very useful anecdotal, thanks

[HousePriceMania]

1 hour ago, Phil said:

dare I say it... 

Anarchy and the formation of a republic ?