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

[JREWING]

11 minutes ago, MrXxxx said:

None of my business but this seems like putting `everything on black`[excuse pun!] type investing...you may like to investigate `Diversification`, and I don't mean `Buy some BP instead` :-) :-) :-)

I completely understand. But if you met me, knew me. I'm an all in on black type of bloke. 

I've made so many risky moves all my life. Provided me with some wonderful memories. Sooner or later one might actually provide me with a positive financial benefit.

But yes you are correct..

[MrXxxx]

9 hours ago, Sideysid said:

What’s the deal with all the tos members (count of nowhere, WICAO etc) murmur loudly about moving abroad and then move back (if ever they actually did) when it doesn’t quite work out. I’ve travelled the world and lived in a few countries but at least I can admit I’ve navigated like a homing pigeon back to this politically mismanaged shithole for no other reason than family at least.

Yep me too, and whenever I had enough and though of leaving I have always reminded myself "The grass always appears greener on the other side of the fence", but with recent happenings (& what it `spells` for the future) I am now thinking perhaps the lawn here has finally been covered in toxic waste!

[Boon]

How will large pension deficits fare in the future?

Torn between the thinking that if there is a massive drop in future, the likes of BT's deficit might widen massively which puts more pressure on the share price and suck up cashflow.

But with so much fiscal stimulus, the value of their equities and bonds could increase massively whilst they have defined payouts, which means they could move into a large surplus.

What is more likely?

[MrXxxx]

10 minutes ago, Panda said:

I completely understand. But if you met me, knew me. I'm an all in on black type of bloke. 

I've made so many risky moves all my life. Provided me with some wonderful memories. Sooner or later one might actually provide me with a positive financial benefit.

But yes you are correct..

Well I hope it goes stratospheric for both of us then, and when we meet in the Country club bar you will be the one drinking Dom Perignon whilst I am sipping Asti spumante :-)

[MrXxxx]

2 minutes ago, Boon said:

How will large pension deficits fare in the future?

Torn between the thinking that if there is a massive drop in future, the likes of BT's deficit might widen massively which puts more pressure on the share price and suck up cashflow.

But with so much fiscal stimulus, the value of their equities and bonds could increase massively whilst they have defined payouts, which means they could move into a large surplus.

What is more likely?

There was talk of resolving this issue by giving them a share of Openreach...sounded like a good ploy to me, as they would then transfer any future liability.

[Harley]

12 hours ago, Democorruptcy said:

 I think he was considering moving abroad somewhere else but not sure where.

I popped over to his site yesterday given the talk here and he has been posting a bit (last was May 2020 I think).  More about big picture stuff which I found interesting.  He's now talking about moving to Asia.  He is already moving more funds to Asian equities independent of this move which, based on my industry screening results, etc, seemed sensible.

[Harley]

49 minutes ago, MrXxxx said:

Yep me too, and whenever I had enough and though of leaving I have always reminded myself "The grass always appears greener on the other side of the fence", but with recent happenings (& what it `spells` for the future) I am now thinking perhaps the lawn here has finally been covered in toxic waste!

I came back a while ago from extensive travels/work.  Thought it was relatively shite here then.  Still do.  All I feared is happening, and just as scary even having forecast it.  My remaining forecasts are not nice.  But in this emerging new world order physicality is not the only way to look at things.  Going as grey and off grid as possible is also worth looking into.  Bottom telling line is that most of the smart money have taken themselves and their money out of here to their enclaves such as the Caribbean.  Gotta be connected and fairly rich to do that or have ancestry rights.  But I also worry about some of these places (having lived there).  You'll need to spend a good bit on security against threats from both within and without 'cause you stand out and everyone knows everything.

[Harley]

12 hours ago, sancho panza said:

Thanks for that H.Call me naieve,but I've never used their stock screener before.Fascianting.

Ta.  I thought you "owned" Investing,com!  Do you screen?  Was my stuff any good?  Should I bother posting such stuff?  I often hold back, until triggered.

PS:  The Investing.com screener is, like them all, a tricky one.  Should work in one way, but often "works" in another way.  Really hard to debug issues as no audit trail.  If you have any questions......

[Green Devil]

13 hours ago, Sasquatch said:

For once, my timing has been half decent. Bought half my RDSB holding at £13, the other half just under £10. Therefore averaged at £11.50. 

Like many others on here, I'm utterly convinced (nearly that is!) that oil has one more major run before we end up in a new green energy utopia or the world economy in total collapse. I fear it will be the latter.

Ill buy some if the price gets a 6 in front over the next few months. My long term fib target is 657. Thatd be 7% yield if the div stays the same.

[Harley]

9 hours ago, Barnsey said:

Oh, and contemplating if now is a good time to buy back into Card Factory

Alas, that required "buying out" first!

[Gin]

I would rather be in the UK , than a foreigner in an Asian Country or the Carribbean .

Most foreigners  especially if white , come up regularly in conversations by the local population . Everyone and his brother have a story to tell about "those foreigners"

Foreigners as in any country , get blamed for all sorts of ills and jealousy can boil over into violence toward them , if local order breaks down for whatever reason , such as a pandemic or a currency run etc .

Much better a devil I know than one I do not. I would much rather be in a system (even a corrupt one) that I was born into than one where I do not know the, often nuanced order of things .

[jamtomorrow]

15 minutes ago, Harley said:

Bottom telling line is that most of the smart money have taken themselves and their money out of here to their enclaves such as the Caribbean.  Gotta be connected and fairly rich to do that or have ancestry rights.  But I also worry about some of these places (having lived there).  You'll need to spend a good bit on security against threats from both within and without 'cause you stand out and everyone knows everything.

My prediction: it won't help them in the end. If world conflict does turn hot, I can't imagine the privateers and Colonel Kurtz types are going to be put off by even a small army of paid security, when they've got a big army at their disposal.

Away from the mainstrean, you're a sitting duck. Same on the smaller scale - some horrible stories from one of the more recent Argentinian collapses, where gangs roamed rural areas and pretty much did what they wanted when they came across an isolated household.

Presumably there's a sweet spot between city centre and middle of nowhere, and I suspect that might apply at a number of scales, metaphorically speaking.

 

[DurhamBorn]

1 hour ago, Boon said:

How will large pension deficits fare in the future?

Torn between the thinking that if there is a massive drop in future, the likes of BT's deficit might widen massively which puts more pressure on the share price and suck up cashflow.

But with so much fiscal stimulus, the value of their equities and bonds could increase massively whilst they have defined payouts, which means they could move into a large surplus.

What is more likely?

Its a good question and a lot will depend on what increase locks companies get in place.Most are 5%.So if you make a lot of your final salary people redundant and have an increase lock in that can cut a lot.There is also the fact lots of weaker schemes will go under,and the government will change the uplift rules so save money.Using a concocted CPI light figure would cut DB pension liabilities by around 12% over night.

The other thing to consider is that nobody is in DB pensions now,very few.BT stopped people joining the scheme in 2001.

Recessions always see death rates go up and suicides,just like the BP bloke above,who by the looks of hit had left his family,married someone else,was trying to re-mortgage etc then got the shove.Covid will save a lot of pension schemes money as well.Not killing people itself,but the fact hospitals are hardly treating anyone anymore and huge amounts of people will die early due to other illness.

[Harley]

8 hours ago, DurhamBorn said:

BP for all their talk about renewables etc are also investing hugely in growing their petrol station business in India.Its likely they see a lot of their oil going that way over the cycle.

Sounds very Big Tobacco!

8 hours ago, DurhamBorn said:

@Barnsey i actually bought a few Card Factory today ,i admit a gamble but i already had some down 65% and now im down 18%, maybe a bust or 4x .If it works out they might be on a 25% dividend yield in 4 years.Very few outside of inflation sectors,but you have to have the odd punt dont you.They need to keep off divis until that debts down below £100 mill though.

I did wonder what you did with them.  Share my pain!  So if I buy a load more, my average price will come down, as will my average loss?!

[Democorruptcy]

1 hour ago, MrXxxx said:

Malta I think....and lets not forget, there is more than one way to `skin a cat`, and a wrong/right time for any investment approach I.e. passive investing, 60/40 portfolio etc. Falling into the trap of doing likewise is naive and could be expensive!....the guys principles were sound I.e save more than you spend, educate yourself financially (& mentally at a later date), and have a plan.

Do you want a bet where WICAO moved (albeit temporarily)? What odds can I have Cyprus?

[DurhamBorn]

4 minutes ago, jamtomorrow said:

My prediction: it won't help them in the end. If world conflict does turn hot, I can't imagine the privateers and Colonel Kurtz types are going to be put off by even a small army of paid security, when they've got a big army at your disposal.

Away from the mainstrean, you're a sitting duck. Same on the smaller scale - some horrible stories from one of the more recent Argentinian collapses, where gangs roamed rural areas and pretty much did what they wanted when they came across an isolated household.

Presumably there's a sweet spot between city centre and middle of nowhere, and I suspect that might apply at a number of scales, metaphorically speaking.

 

Market towns where people know each other.Youd get the odd smack rat trying it on but they would be dealt with very quickly.In my home town for instance if law and order broke down i wouldnt worry for the 10k people who live there,id worry for the burglars and smack heads because they get it for certain.

People often forget but the English seem to all have a spark inside where they can quite easily turn to extreme violence,especially when their family,friends or home is threatened.

[Harley]

5 hours ago, Sideysid said:

Follow the banks and pension funds actions. I have increasingly less attention span to give to MSM articles, even paid for subs like the FT, still churn out politically charged anti-Brexit and anti-Trump articles (I couldn’t give a shit about either) and flip flop daily about house price forecasts going up and down.  

Agreed.  I took out an expensive sub for the FT and was shocked how far from pure financial reporting it has moved, let alone the comments.  I just wanted the facts, not the opinionated, often woke, fluff.  No wonder all the boardrooms are going woke.  And they had a good go at trying to persuade me not to cancel.  The MSM is useless to me and my needs.

PS:  And to add insult to injury, that expensive sub still wasn't enough to read everything.  Yet another payment was required for that!

[DurhamBorn]

7 minutes ago, Harley said:

Sounds very Big Tobacco!

I did wonder what you did with them.  Share my pain!  So if I buy a load more, my average price will come down, as will my average loss?!

Small holding Harley so i was actually quite pleased to be down so much on them as i bought more than i did in the first place so a break even of about 43p now i think.They are a punt more than anything but they are one of the companies i think might be able to front inflation.

I think my grey hairs and decades of investing have served me well as i never get upset about bad timing on a few.Sometimes they end up providing the best profits over time.Its like Royal Mail,im actually up quite a bit now.Transports are terrible,but that was virus related and i did manage an in out trade on them all from March.

Other areas that are down like oil and telcos are actually only down around 10%-15% due to laddering and dividends,very very happy with those positions.

Gambling has delivered very quickly.Im sad to see the industry get bought out,another total f+ck up from our politicians,but big profits to re-allocate.

Of course silver and goldies delivered in spades providing lots of capital to upscale ladders elsewhere.

I think we have navigated well so far,but it shows why you need to have several sectors as where some explode back up,others still drift lower.

 

[Barnsey]

5 hours ago, Sideysid said:

The banks are removing mortgage products left right and centre and the pension funds have suspended their commercial/residential property funds that’s all I need to know. That’s the lead, the lag comes further down the line once the stamp duty froth on the market dies down and already is (which sole purpose was to skew annual sold house price statistics)

The first link in the chain has now been removed (no 5-10% deposits FTBers now) just simply wait until early next year to see the economic damage take effect. No government prop now can reverse what’s coming unless they can actually buy a house for everyone.

100% agreed, Barclays have just announced they're even removing 75% LTV mortgages now because of "demand" (the narrative of which I'm not buying), whilst Henry Pryor is now suggesting his estate agent contacts are seeing quite the cooling off in sales this month along with increased inventory.

History rhyming and all that, for me I'm looking for a stabilisation of the unemployment rate (which we're 6 months away from at least?) and noticeable increase of higher LTV mortgages coming to market. There's also the possibility of a slight dip into negative rates in November along with substantial £££ being pumped into banks to get them to lend again. I appreciate this is a very different scenario where the rich appear to have become richer but funnily enough I'm not looking at the kind of houses they are.

The one risk is that the stamp duty holiday is extended because the fear is so great of a cliff edge in April, but even if it is I think the urgency will deteriorate Vs this frenzy we've seen.

Then of course there's the end of mortgage forbearance early next year for many, not huge numbers but certainly a steady stream of properties to dilute the market.

Going to be a f***ing bleak winter, that I'm sure of.

 

[Harley]

18 minutes ago, DurhamBorn said:

I think we have navigated well so far,but it shows why you need to have several sectors as where some explode back up,others still drift lower.

That bit never ceases to amaze me (a bit later after all the blood and guts!), hence my liking of the balanced portfolio for overall asset allocation.  My PM holdings have well compensated my equity holdings and recent equity moves (like William Hill) have shown a market finally getting out from under a blanket cloud.  Just a shame I didn't follow all your advice and only cherry picked the bad 'uns, for now!

[Harley]

2 minutes ago, Cattle Prod said:

I'm very happy with my 2.53% 10yr fix took out a couple of years ago, possibly the best financial decision I ever made. 

You must be Mr Vodafone of the housing market!  Expect them to say similar in their future reports?

[DurhamBorn]

5 minutes ago, Cattle Prod said:

I said on here a few hundred pages back to be careful about trying to time going for a mortgage, because though advertised rates may go lower in troubled times, you probably won't be able to get one. I distinctly remember entire ad campaigns from banks during 08 09 along the lines of being caring, supporting families, keys dangling etc etc..and yet no one was getting approved. No money left the vaults. Again, watch what they do and recent comments here on leading indicators like low LTVs being pulled are on the money I think. I'm very happy with my 2.53% 10yr fix took out a couple of years ago, possibly the best financial decision I ever made. 

My son bought in June with a 10 year fix at the same rate,over-payments of 10% for 5 years allowed then the next 5 years still fixed but no tie in so all over-payments allowed.He put 15% down and his other £28k is in silver averaging $15.50 an oz.He owes £98k now,be mortgage free by 31 years old on a lovely semi.He didnt go to uni,he went to Aldi on my advice and is up to £13 an hour now.Standing in for his boss as well so will end up a supervisor soon,£16 an hour.10 minutes from home.His partner is a teacher.I explained to them a few years ago what was coming etc.I keep reminding them though that they need to use the 10 years wisely.I think the silver will pay off the mortgage mostly,but even so i remind them to chip away with extra payments each year.

[Harley]

7 minutes ago, Cattle Prod said:

I'm hoping I become a millstone around their neck before the 10 years are up. I will love it if inflation runs above that, and if they have to run savings interest above that to attract deposits, I think I'll write to them weekly to let them know how I'm enjoying the free money they gave me.

Maybe, like the DB schemes, they'll try enticing you out of the loan!

[Boon]

Card Factory are an interesting case. On one hand their competitive offering is really good, lowest cost producer has meant they have muscled out people like Clintons.

On the other hand their online offering sucked and I don't think they read the trends correctly for the personalised gifts. I don't understand why they haven't been pushing Moonpig hard, looking at those accounts that is a lucrative business with no shop overheads to pay.

I can forsee them going into administration though, a CVA would actually be quite handy for them. If footfall is permanently down surely some leases are not going to be worth as much and it would be good to renegotiate.

[Barnsey]

19 minutes ago, Cattle Prod said:

I said on here a few hundred pages back to be careful about trying to time going for a mortgage, because though advertised rates may go lower in troubled times, you probably won't be able to get one. I distinctly remember entire ad campaigns from banks during 08 09 along the lines of being caring, supporting families, keys dangling etc etc..and yet no one was getting approved. No money left the vaults. Again, watch what they do and recent comments here on leading indicators like low LTVs being pulled are on the money I think. I'm very happy with my 2.53% 10yr fix took out a couple of years ago, possibly the best financial decision I ever made. 

Wise words! The flip side of this being the building inventory of properties dragging price further down. This application scrutiny would certainly explain why I'm now seeing so many properties coming back to market after a week or two of Sold STC.