Credit deflation and the reflation cycle to come (part 3)

[Axeman123]

3 minutes ago, Errol said:

Got one of those 'We buy gold' leaflets through the post today. They are desperate for the stuff - trying to loot the population of their remaining valuables.

Physical sells at a premium,they want to buy below spot. It is also looking like we could be on for a decent move up in spot prices on top.

[kibuc]

Cassiar Gold with a real stinker of a drill at Cassiar South target (high-grade underground). I own them primarily for their open pit target at Cassiar North but I'm putting them on the naughty list nevertheless. No reason to allow more than 1 or 2 strikes in this business, junior explorers are a dime a dozen. Summer drilling at North will etiher confirm them as a hold or seal their fate.

[JohnnyB]

Definitely worth sitting back with a few beers and watching this all unfold now 

In 2008/9 if you didn't lose your job, the biggest impact on most people was actually seeing your mortgage costs drop by a third or more.

Different this time - no escape from the energy costs unless you go the ethnic route and shove 4 generations into the one house.

Wage rises? Many big employers would rather shoot themselves in the head than give the horrid workers more than a derisory rise, whatever the inflation rate. I genuinely believe they will commit (financial) suicide before they give IT workers a true market pay increase, recruiting grads on 22k to fix core systems.

Even the zoomer crypto crew are getting screwed as even their meme stocks are taking a hit.

I'm not 100% anti Tory but it's obvious they have no answers and will try and push Russia and the culture war to distract the plebs.

[Phil]

25 minutes ago, Axeman123 said:

Physical sells at a premium,they want to buy below spot. It is also looking like we could be on for a decent move up in spot prices on top.

Just got 5 sovereigns. Hope they arrive.

[Loki]

31 minutes ago, Phil said:

Just got 5 sovereigns. Hope they arrive.

Where did you order from?

[Phil]

1 minute ago, Loki said:

Where did you order from?

Bullion vault. Obviously there will be somewhere cheaper, but , beers lol and see fres  is up, inflation blah … blah. .  👍

[Loki]

3 minutes ago, Phil said:

Bullion vault. Obviously there will be somewhere cheaper, but , beers lol and see fres  is up, inflation blah … blah. .  👍

You should be OK then 

[BadAlchemy]

@HousePriceManiaShort, sweet, and accurate. Good response there to the economics correspondent from the Bureau of Bullshit Corporation

[MrXxxx]

3 hours ago, Colliedog1 said:

I always send second class, first class is a rip off

Yeah, but have you seen the prices for that recently?!...I sent some Recorded delivery parcels about 6 mths ago and it didnt seem so bad, sent a single small one sheet letter yesterday expecting about £1.50 and it was £2.08!

[Phil]

3 minutes ago, MrXxxx said:

Yeah, but have you seen the prices for that recently?!...I sent some Recorded delivery parcels about 6 mths ago and it didnt seem so bad, sent a single small one sheet letter yesterday expecting about £1.50 and it was £2.08!

Email it. 0p.

[MrXxxx]

1 hour ago, JohnnyB said:

I'm not 100% anti Tory but it's obvious they have no answers and will try and push Russia and the culture war to distract the plebs

Well we know what they did last time they were unpopular, and Boris would love his Churchill moment...or should I say Thatcher moment?....although he is not in the same 'league' as either of those two.

[MrXxxx]

3 minutes ago, Phil said:

Email it. 0p.

Couldn't, had to be 'Snail mail' and knowing the buggers I was sending it to I didn't want to give them any 'excuses', hence the Recorded Delivery.

[Phil]

5 minutes ago, MrXxxx said:

Couldn't, had to be 'Snail mail' and knowing the buggers I was sending it to I didn't want to give them any 'excuses', hence the Recorded Delivery.

Perhaps you could have taken it yourself.? Would have been cheaper? Just asking.

[leonardratso]

24 minutes ago, BadAlchemy said:

@HousePriceManiaShort, sweet, and accurate. Good response there to the economics correspondent from the Bureau of Bullshit Corporation

Not very good is he for the beebs economics corresponent, follows like 13K people and followed by 1500ish

I liked this reply, hahaha;

 

[SillyBilly]

1 hour ago, JohnnyB said:

 

Wage rises? Many big employers would rather shoot themselves in the head than give the horrid workers more than a derisory rise, whatever the inflation rate. I genuinely believe they will commit (financial) suicide before they give IT workers a true market pay increase, recruiting grads on 22k to fix core systems.

 

Some grad jobs are dangerously close to minimum wage now as they have stuck with these pathetic starting salaries for over a decade now. They work on the basis of advertising a salary sounding better...£22k/annum sounds better and more respectable than £10.58 an hour doesn't it? Grads might start evaluating their options when for only 58p less they can work the tills @ Morrisons and likely a more lucrative "career" opportunity to be on the tills at Aldi where you can earn a bit more with experience under your belt. I think NMW is going to be up at £10.15-10.20 next April (government will be under pressure to at least get near inflation), possibly higher than that. All that debt to effectively earn the bare minimum...

[HousePriceMania]

3 hours ago, Colliedog1 said:

I always send second class, first class is a rip off

Tories planning to introduce 3rd class 

[Yellow_Reduced_Sticker]

2 hours ago, Democorruptcy said:

I emailed RM a couple of weeks ago to say I had a business idea for them and asked for the contact details of someone in development. Received an automated reply saying they would respond in 3 days but they didn't. It's cost them millions!

 

Ya wasting ya time with email, better off calling them, i take it you want to be compensated for your idea?

 

YES?

 

Licensing the idea is the way to go...

 

Best book/info on this is by Stephen Key.

 

https://www.amazon.co.uk/One-Simple-Idea-Revised-Expanded/dp/1259589676/

 

 

NO need to buy, here's the YRS price of ZERO, zip, zilch, nada!

Download here:

https://filebin.net/a7a1pmwi1v3ycn0j

 

 

[leonardratso]

uncle dave insists;

 

[HousePriceMania]

2 hours ago, Errol said:

Got one of those 'We buy gold' leaflets through the post today. They are desperate for the stuff - trying to loot the population of their remaining valuables.

When I lived in Scotland I did a leaflet myself offering £10 for 1 oz of gold, only bloke that got in touch had 1 eye and went by the name of big Gordon 

[Majorpain]

12 minutes ago, SillyBilly said:

Some grad jobs are dangerously close to minimum wage now as they have stuck with these pathetic starting salaries for over a decade now. They work on the basis of advertising a salary sounding better...£22k/annum sounds better and more respectable than £10.58 an hour doesn't it? Grads might start evaluating their options when for only 58p less they can work the tills @ Morrisons and likely a more lucrative "career" opportunity to be on the tills at Aldi where you can earn a bit more with experience under your belt. I think NMW is going to be up at £10.15-10.20 next April (government will be under pressure to at least get near inflation), possibly higher than that. All that debt to effectively earn the bare minimum...

Supply/demand innit.  Graduates are a dime a dozen and too many gain very little from their study, so why should they get a premium salary?  Good news is Apprenticeships look to be making a big comeback with onshoring, so hopefully young will realise that getting trade/job and wage is better than getting drunk for three years.

[Phil]

7 minutes ago, leonardratso said:

uncle dave insists;

 

I hope so.

[leonardratso]

11 minutes ago, Phil said:

I hope so.

he has a sister, who is suspiciously close to david cunter the tribute act;

https://twitter.com/DavidinaConform?s=20&t=1t_cfEDbw9Y1aovrOePOnA

 

[leonardratso]

. knackered post. ignore as usual

[sancho panza]

7 hours ago, Boon said:

Housebuilders are cheap in the main on both tangible book values and earnings.

I think underpinning a lot of their prices are at least historically building houses has been lucrative. I do think the props introduced to the market has enabled people to be not price sensitive at all and of course the interest rate. Someone buying on a prop only really cares about the monthly cost.

Second thing is that the valuation of plots on their books. However I don't know how much of this is correlated with the first point. Maybe most of it.

So there could be a death spiral in progress. If construction costs go up 10% it isn't as easy as just adding 10% to the final price, higher interest rates may make some projects not worth it. Maybe the builders may become BTR as well.

However I do suspect that as part of being good lads with the cladding there may be some more props coming down the line. Which could still see the housebuilders being successful even if the rest of the housing market is crap.

Good time to buy it is when everyone hates it. Not sure its there yet but it may not be far off.

I see what you're driving at but let's remember that before the collapse of the big banks in 08,many were trading near book value and on low PE ratio.s.Book value is an accounting concept whereas the equity price is the market view of the book value

The problem is that the cashflows of the builders are way more lumpier than say the big oilies-lots of small customers.BDEV are buying 18000-20,000 plots per annum.A friend who develops hosues reckons roughly one thrid land price,one thrid build cost,one third profit.Allowing for BDEV's economies of scale,say we conservatively book their plot costs at £50k each,that means £1bn getting booked as assets annually.

Looking at revenue from the income statement and then dividing by 20,000 completions we arrive at an average sale price of circa £240,000.

They're also carrying 4.5 years of land so circa £4.5bn in assets eg 4.5 x 20,000 plots(£50k)= £4.5bn

The problem is that building land moves at 3 times the rate of change of hosue prices iirc,so 1% down in HPI means 3% down in land bank.

Key reason I wouldn't touch builders is that if the marekts sell off,not only will they be struggling to sell hosues but also struggling to offload land banks.

They do have a large proportion of cash/equivalents which will see them through some hard times but their equity holders will get smashed if the low liquidity phase lasts two years whoch I think is not byond possiblity

https://www.barrattdevelopments.co.uk/~/media/Files/B/Barratt-Developments/press-release/2022/trading-update-05-may-2022.pdf

 

 

[wherebee]

8 hours ago, janch said:

Apologies if already posted..........I have a few pages to catch up with but this caught my eye.  Apparently the Swiss are thwarting the EU's best laid plans:

https://www.zerohedge.com/commodities/swiss-connection-how-russia-weathering-tough-sanctions

Some snippets:

Deutsche Welle has reported that 80% of Russian raw materials are traded via Switzerland, according to a report by the Swiss embassy in Moscow

 "Unlike the financial market, where there are rules for tackling money laundering and illegal or illegitimate financial flows, and a financial market supervisory authority, there is currently no such thing for commodity trading," financial and legal expert at Public Eye David Mühlemann told the German broadcaster ARD.

But don't expect things to change any time soon.

Calls for a supervisory body for the commodities sector based on the model of the one for the financial market by the likes of Swiss NGO Public Eye and Swiss Green Party proposal have so far failed to bear fruit. Thomas Mattern from the Swiss People's Party (SVP) has spoken out against such a move, insisting that Switzerland should retain its neutrality, "We do not need even more regulation, and not in the commodities sector either."

I know someone who works in a commodity trader in Zurich - I'll have a chat and see what the views are on this thing..