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

[JMD]

3 hours ago, sancho panza said:

 

I don't think you can blame voters when we have an electoral system that was designed by our public school elite,for our public school elite.They fight over a 150 seats at election time,stop aprteis like the Greens or Ukip getting seats(2015 Ukip polled 4 million,Greens 1 million,Tories 8 million-Tories got 300 seats,Greesn 1,Ukip 1)

I don't deserve the likes of bungling boris or takeaknee Starmer,but I get them because the odds are massively stacked against change.

You're bang on with that prediction in bold JMD.It's coming and I suspect the Tories and the takeaknee team will sorely regret not choosing to loosen their electoral grip a little earlier.

My standpoint is that I want all kinds of change but am no fan of revolution. This is because I maintain that our electoral system can be 'gamed' by us plebs. The referendum vote was given because of increasing electoral support for ukip. However, rather stupidly many ukip voters returned to voting conservative at last election. I know there was real Corbyn fear across the country but having no Brexit party MPs is a travesty - I think the Brexiters would have spoken real truths during this pandemic and the party popularity would have grown. A massive missed opportunity for this country to have changed politics and an example of why I lay blame on the electorate. For perspective, I consider that was our lost 'Kerensky moment', in that we could have had moderation and not full-on chaos under a Lenin-type character.                                                                                                                 Your property report post was interesting. Another trend I noticed while reading up on propertytribes website was that many landlords bought/improved/remortgaged their properties. The idea was to extract more funds from remortgaging than the original purchase price. They would then repeat the process. Lots of landlords have built their portfolios since the 2008 crash by doing this. I think many Ltv's may be very skewered. The shocking thing was, despite the new rules on BTL mortgages from 2010ish, many landlords still manage to buy with big ltv loans. But as the report shows there are many different types of landlord, some better placed than others. However as ordinary citizens they don't appreciate risks or what may be about to hit them. 

[Loki]

1 hour ago, DurhamBorn said:

73% of my home town rely on benefits and/or work for the council/ state.Welfare "free" money is higher by a massive amount here than it ever was in the USSR.It wasnt so until Brown of course,but the Tories have nothing much to roll it back.

And they don't even have to "Pretend to work" as they old saying said!

[MrXxxx]

47 minutes ago, CVG said:

Obviously none of us are really well placed to advise you, but ......

how long until retirement, e.g. wil time out of the market represent a large or small amount of time remaining? If small then being in cash for a few months wont hurt that much

Personally, I'd remain partially invested in a diverse range of assets and classes and perhaps weight an allocation to cash/equivalent.

Hi CVG,

not looking for advice, just thought it would be an interesting talking point alongside the comments made by others regarding the majority of the populas`s (not Dosbodders) capital is either in property, DC pension or both.

Good point about time to retirement though; assuming you are thinking traditionally I.e youngsters have a longer time to recover losses, but I can see many stock sectors taking a very long time to recover.

As for time out of the market, I envisaged that this to be short term, as after a BK what would be the advantage of waiting longer I.e you would want to buy back in as close to the bottom...unless of course what was perceived as the BK bottom was a step on the way down to lower lows.

[Democorruptcy]

7 hours ago, Harley said:

Spot on!  Especially in these times.

And to drive your point home, this (what people like to look at)....

....becomes this when valued in gold.....

....which is as much about the fall in GBP as the rise in gold as shown here...

...where house prices were falling in gold before the gold price started to rise.

Why do your charts drive his point home? His figures were only from 2005 on the run up to two recent gold highs, ignoring the decades of nothingness before then. Don't your charts only show that gold was cheap just before his figures started?

[BurntBread]

On 30/08/2020 at 08:41, Barnsey said:

Didn't think we'd be seeing rhetoric like this so soon, probably not the wisest idea right now but there we go, everything incredibly linear in Sunak's multi millionaire mind. Probably just another sideshow but if he really persists could get interesting. I think a double dip recession will force this into reverse quite abruptly. I obviously agree with aspects of this plan but my goodness talk about timing...

Well, I agree with the principle that capital gains shouldn't be taxed at a lower rate than income.

However, I think that should be achieved by lowering the rate of tax on income. Also, "capital gain" should be defined as any increase above the rate of inflation, otherwise you're being taxed twice over. The first of those would be an encouragement to economic activity, which is what we really need now, and the second may help companies to raise cash through selling shares, which might also help if credit dries up.

Obviously neither of those moves would help to raise extra tax in the immediate future ... so perhaps Boris should strike a truly Churchillian stance in these economically desperate times and introduce a land value tax?

[Harley]

1 hour ago, Democorruptcy said:

Why do your charts drive his point home? His figures were only from 2005 on the run up to two recent gold highs, ignoring the decades of nothingness before then. Don't your charts only show that gold was cheap just before his figures started?

 

3 hours ago, sleepwello'nights said:

Except most home owners would not have had £160k to invest in anything. Most would have had, what, a 10% deposit. And then where would they have lived?

That's what makes a market.  Great.

[dgul]

4 minutes ago, Cattle Prod said:

Not at all. I'm a scientist, not an enginerr, and we are a bit disdainful of each other (because engineers need scientists for ideas, scientists need engineers to make the idea real 😅).

And therin is the puzzle of Tesla, he was more engineer than scientist, but at least he created stuff (and I think Edison screwed him over!). Musk hasn't created a thing himself, to my knowledge. 

 

Musk is a very wealthy person who'd rather like to be Tony Stark, and has spent his time and money trying to make sure everyone thinks that's who he is.

 

[leonardratso]

well, there you go, clown world it is, my 1st daytrade of tesla and apple made me more money that buying and holding oilers has done for the last 3 months. No doubt that will rotate, but i doff my hat to musk for his bullish bullshit and thank apple for their overpriced tat. Rinse and repeat tomorrow i think. It will work - until it doesnt.

[leonardratso]

i suppose them splitting their stock has helped since we can get a whole share now for 1/5 of what they were, makes no odds of course, but might have boosted buying on a psychological level.

[Harley]

1 hour ago, Democorruptcy said:

Why do your charts drive his point home? His figures were only from 2005 on the run up to two recent gold highs, ignoring the decades of nothingness before then. Don't your charts only show that gold was cheap just before his figures started?

Because the chart started at 2005.  What does your legwork show?

[Harley]

1 hour ago, BurntBread said:

Also, "capital gain" should be defined as any increase above the rate of inflation, otherwise you're being taxed twice over.

I'm old enough to remember a time....

[Harley]

4 hours ago, sleepwello'nights said:

Except most home owners would not have had £160k to invest in anything. Most would have had, what, a 10% deposit. And then where would they have lived?

I think that misses the context and points.  Relative value, etc.  For your scenario, have you run the numbers and what do they show?

[M S E Refugee]

1 hour ago, leonardratso said:

well, there you go, clown world it is, my 1st daytrade of tesla and apple made me more money that buying and holding oilers has done for the last 3 months. No doubt that will rotate, but i doff my hat to musk for his bullish bullshit and thank apple for their overpriced tat. Rinse and repeat tomorrow i think. It will work - until it doesnt.

I have turned £50000 into £80000 on the practice mode of the CFD's on Trading 212 by trading Apple and Tesla.

Not a clue what I am doing but I can see how people are getting carried away when it's this easy.

 

[leonardratso]

10 minutes ago, M S E Refugee said:

I have turned £50000 into £80000 on the practice mode of the CFD's on Trading 212 by trading Apple and Tesla.

Not a clue what I am doing but I can see how people are getting carried away when it's this easy.

 

hehehe, switch it to real money, and watch it reverse like a beeearch, turn 50K into 0k in no time at all.

[Loki]

19 minutes ago, M S E Refugee said:

I have turned £50000 into £80000 on the practice mode of the CFD's on Trading 212 by trading Apple and Tesla.

Think of all the imaginary stuff you can buy!

[leonardratso]

1 minute ago, Loki said:

Think of all the imaginary stuff you can buy!

bitcoins are fairly imaginary.

[Democorruptcy]

1 hour ago, Harley said:

Because the chart started at 2005.  What does your legwork show?

Over the full timescale of your long term HPI/Gold chart Is the 150 ounces to buy a home now, a low or high amount of ounces?

[JMD]

5 hours ago, jamtomorrow said:

Yup, stuff in bold would be my utlitarian answer i.e. return of/on capital.

If you think you can afford it, a few % for "spiritual" investing is important IMO - what in the world do you love? What should we be keeping around for future generations? Buy that stuff and hang onto it. Cars, antiques, fine wine, crap wine, vinyls, art, 80's erasers - whatever you value in the world.

Then there's "investing" in the wider sense. Things I've "invested" in lately: family resilience/preparedness; physical fitness; work enjoyment; more control over my time; house maintenance (esp things nobody else seems to bother with, like repointing, roof etc). All ultimately boil down to using a little bit of wealth to give you choices, IMO the most important investment of all.

I think your right and perhaps accepting that I'm fully, and adequately invested, would bring peace of mind (along with its own special type of dividend). It's also good to know that I wouldn't be judged if I did load up on crap wine and 80s erasers!!

[JMD]

3 hours ago, Cattle Prod said:

Not at all. I'm a scientist, not an enginerr, and we are a bit disdainful of each other (because engineers need scientists for ideas, scientists need engineers to make the idea real 😅).

And therin is the puzzle of Tesla, he was more engineer than scientist, but at least he created stuff (and I think Edison screwed him over!). Musk hasn't created a thing himself, to my knowledge. 

 

Oops, ok as a (grovelling) attempt at a part apology... I understand there is a hierarchy of scientists, top are the hard sciences such as physics; next are the biological sciences which these days get criticism for a lack of rigour (plus refusal to embrace quantum biology/chemistry); and lastly the social sciences, which are not really science and are also no longer very social!

[dgul]

3 hours ago, leonardratso said:

i suppose them splitting their stock has helped since we can get a whole share now for 1/5 of what they were, makes no odds of course, but might have boosted buying on a psychological level.

I think that's what happened today -- a pile of people rounding up their investment to their pot, rather than falling $1.5k short (or whatever).  I can't see this effect staying for long, however.

(as it cuts both ways -- it also allows someone with (say) $10k worth of shares to sell 10% as they're 'a bit toppy', whereas before they'd have had to sell 25% or nothing.]

[King Penda]

28 minutes ago, JMD said:

Oops, ok as a (grovelling) attempt at a part apology... I understand there is a hierarchy of scientists, top are the hard sciences such as physics; next are the biological sciences which these days get criticism for a lack of rigour (plus refusal to embrace quantum biology/chemistry); and lastly the social sciences, which are not really science and are also no longer very social!

Well the scientist for eu are not very clever they can’t even tell me if a man with his cock cut off is a man 0r. woman .not only that I asked for the answer of if a man decides he is a woman one random day what sex is he .they refuse to answer or skirt round the issue.i asked this on a thread after they basicly said I was to thick to be debating with them ie my spelling etc.the fact I also said no  brave galliao s here pissed them

off a bit lol.to be fair one did pm me laughing about it saying they are scared of loosening there jobs and grants and it was a funny question but a bit unfair.but he was man enough to admit you shut them all up 

[leonardratso]

1 hour ago, dgul said:

I think that's what happened today -- a pile of people rounding up their investment to their pot, rather than falling $1.5k short (or whatever).  I can't see this effect staying for long, however.

(as it cuts both ways -- it also allows someone with (say) $10k worth of shares to sell 10% as they're 'a bit toppy', whereas before they'd have had to sell 25% or nothing.]

i missed out on zoom there as well, it went up more after market as during, but that one seems to have shot its bolt on results so its at least a bit more traditional;

[geordie_lurch]

Picked up some more RDSB this morning as they have taken another dive but keep having to tell myself this is all about the next 5 - 10 years not the next 6 months of ups and downs 

[jamtomorrow]

13 minutes ago, geordie_lurch said:

Picked up some more RDSB this morning as they have taken another dive but keep having to tell myself this is all about the next 5 - 10 years not the next 6 months of ups and downs 

Oilies and telcos sliding nicely again, looks like I'll own some more of BP, TEF and REP by COB.

I'd love a piece of Total too, but seems to be clinging harder to June highs compared to other oilies. Long way to fall before I'll nibble on that one.

[jamtomorrow]

9 minutes ago, Cattle Prod said:

Don't worry about it!! I didn't see the slightest thing negative about your comments. Good thoughts on Nikola Telsa too.

Your comment above made me think about Economists (back on topic, CP). I remember learning economics in school, with all these woolly formulae, and then I'd go to my Physics class, where you could see the neatness and mathematical basis for the universe. I didn't think much about it, till I noticed many Economists like to call it a science, I guess because they have formulas. This only works if people behave like atoms, so beware of Economics who call themselves scientists IMO. Their formulae assume rational people and (like Fergusons Covid model) perfect mixing etc etc. I think we know here that economics is better described by psychology. I think you'll learn more about economics and investing watching a herd of cattle than applying an economic "law".

I don't envy economists - poor buggers can't do true experiments, they can only ever measure what happens to be in front of them. Condemned to eternally ponder the correlations, wondering if you've got a missing term that will be revealed by the next black swan - don't fancy that, no wonder they call it the "dismal science".