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

[lid]

On 14/08/2022 at 00:14, DurhamBorn said:

When i started work in 86 most factories still produced their own heat with a boiler room and boiler man.My first ever job was doing work experience with the boiler man at a local clothing company when i was 14.He used to cook our sausages on the top of the boiler.He was only little,but strongest man iv ever seen and he was over 60 then,he used to shovel the coal in but also fix everything.He had a small holding as well.He said come here friday before xmas and il give you a turkey tell your mam not to buy one.So i went and he gave me a turkey in a sack with its head sticking out,very much alive,i had a hell of a job getting it home on my BMX it kept trying to bite my hands.My dad chopped its head off with an axe.

If anyone can find a better post on the internet I'm all ears. I've been chuckling away to this since I read it 

👌

[M S E Refugee]

Germany’s business model is broken – minister https://www.rt.com/business/560906-germany-business-failed-gas-habeck/

Germany is committing economic suicide.

Robert Habeck believes destroying German industry is a price worth paying to wean itself off cheap energy.

 

[Lightscribe]

10 hours ago, ThoughtCriminal said:

Don't want to panic anyone but Michael Burry just liquidated his entire portfolio. 

I’m thinking the lid on the Chinese economy might not hold out for much longer.

I’ll be watching intently, but I’m seriously looking to go all in cash and taking the gains from my PM miners.

[JohnnyB]

11 hours ago, Cosmic said:

NatWest did exactly that to my GF last year. She's pre arranged the 15k but the branch refused. Claimed my GF was "agitated" (she'd left our nipper for the first time) and they couldn't be sure it was legitimate. GF got annoyed and then they threatened to call the police... because she wanted to get the money she'd already pre arranged...

Closed the account.

Another take on this - banks get huge government and media pressure to "compensate" poor victims who send their savings to crypotcurrency scams. There was an example in the BBC recently where the bank employee literally told the greedy fucker it was a scam, but the article still took their side. Some aren't really scams either just super high risk investments that inevitably go bad.

I'm sure the bank's would much rather not give a fuck what you do with any large withdrawals. But until we're responsible enough as a society to bring back personal responsibility this is the consequence unfortunately.

I bet if these people had stuck lucky and made 1000% returns they wouldn't be clamouring to hand the money back to the rest of us!

 

[HousePriceMania]

11 hours ago, ThoughtCriminal said:

Don't want to panic anyone but Michael Burry just liquidated his entire portfolio. 

https://thedeepdive.ca/the-big-short-michael-burry-sells-entire-us-portfolio-keeps-only-one-stock-in-q2/

 

keeping only one security: privately-held jail operator GEO Group

 

[afly]

Looks like they are going to throw everything at it

https://www.ft.com/content/281fbba6-28e2-42d4-b241-0f215995f0d1

A new lender has been granted a licence by UK financial regulators to offer mortgages with fixed rates of up to 50 years in a move aimed at helping borrowers manage soaring inflation.

Perenna, a UK-based specialist lender, is initially planning to provide home loans that lock in rates for 30 years, before rolling out products with even longer terms.

Its approval comes as the Bank of England raises interest rates in an attempt to tackle rapid inflation, which has reached a 40-year high of 9.4 per cent in Britain.

Longer-term mortgages have been mooted as a way to help younger people on to the housing ladder as property prices remain high.

Prime minister Boris Johnson last month explored plans for longer mortgages that could be handed down between generations.

House prices in the UK reached a record high last month, although data from property site Rightmove on Monday showed the average value had dipped 1.3 per cent in August to £365,173.

Banks typically provide mortgages with fixed rates of up to 10 years, with the most popular products lasting two and five years, according to Ray Boulger, senior manager at broker John Charcol.

Perenna could offer rates of 4 to 4.5 per cent on the 30 to 50-year loans, although this would be affected by gilt yields at the time of launch.

Arjan Verbeek, chief executive and founder of Perenna, said longer-term rates should help borrowers during the cost of living crisis and in an environment of rising interest rates.

“Rates are going up and if you have a household budget to manage, you need to know what you’re paying on your mortgage every month,” Verbeek said.

“With inflation running high, this will take a chunk of the stress out.

“Mortgages are broken in the UK because normal people can’t buy a house. This is not the case in other markets, such as the US and Denmark, where stability is being provided by long-term mortgages.”

Gerard Lyons, an economist and former adviser to Johnson, wrote in a paper for think-tank Policy Exchange last week that “one of the critical areas for a new prime minister is to address the challenges in the housing market, and to help turn Generation Rent into Generation Buy”.

[ThoughtCriminal]

8 hours ago, Noallegiance said:

I know he's been doing the rounds but this is, for me, the most fascinating interview to date. And she's smokin'.

 

I am once again imploring that finance interviews be conducted by men or fat ugly pigs.

[M S E Refugee]

18 minutes ago, afly said:

Looks like they are going to throw everything at it

https://www.ft.com/content/281fbba6-28e2-42d4-b241-0f215995f0d1

A new lender has been granted a licence by UK financial regulators to offer mortgages with fixed rates of up to 50 years in a move aimed at helping borrowers manage soaring inflation.

Perenna, a UK-based specialist lender, is initially planning to provide home loans that lock in rates for 30 years, before rolling out products with even longer terms.

Its approval comes as the Bank of England raises interest rates in an attempt to tackle rapid inflation, which has reached a 40-year high of 9.4 per cent in Britain.

Longer-term mortgages have been mooted as a way to help younger people on to the housing ladder as property prices remain high.

Prime minister Boris Johnson last month explored plans for longer mortgages that could be handed down between generations.

House prices in the UK reached a record high last month, although data from property site Rightmove on Monday showed the average value had dipped 1.3 per cent in August to £365,173.

Banks typically provide mortgages with fixed rates of up to 10 years, with the most popular products lasting two and five years, according to Ray Boulger, senior manager at broker John Charcol.

Perenna could offer rates of 4 to 4.5 per cent on the 30 to 50-year loans, although this would be affected by gilt yields at the time of launch.

Arjan Verbeek, chief executive and founder of Perenna, said longer-term rates should help borrowers during the cost of living crisis and in an environment of rising interest rates.

“Rates are going up and if you have a household budget to manage, you need to know what you’re paying on your mortgage every month,” Verbeek said.

“With inflation running high, this will take a chunk of the stress out.

“Mortgages are broken in the UK because normal people can’t buy a house. This is not the case in other markets, such as the US and Denmark, where stability is being provided by long-term mortgages.”

Gerard Lyons, an economist and former adviser to Johnson, wrote in a paper for think-tank Policy Exchange last week that “one of the critical areas for a new prime minister is to address the challenges in the housing market, and to help turn Generation Rent into Generation Buy”.

A 50 year mortgage of £150,000  would still cost you £684.71 per month plus Council Tax and Utilities.

It looks like Utility Bills and Council Tax will kill off the Property Market in the UK.

[geordie_lurch]

Seems like there's going to be a cull of Civil servants and the pay of those that are left - seems bearish to me

Story is from Guardian here: https://www.theguardian.com/politics/2022/aug/15/ministers-planning-to-cut-civil-servant-redundancy-pay-at-same-time-as-91k-jobs

"Ministers are planning to reduce redundancy pay for civil servants while cutting 91,000 Whitehall jobs, setting up a bitter confrontation that unions warned may lead to legal and industrial action.

The proposals could result in average packages being cut by a quarter at a time when the minister for Brexit opportunities and government efficiency, Jacob Rees-Mogg, is aiming to shrink the civil service by a fifth"

Couldn't see any mention of pensions in the story...

[DurhamBorn]

21 minutes ago, M S E Refugee said:

A 50 year mortgage of £150,000  would still cost you £684.71 per month plus Council Tax and Utilities.

It looks like Utility Bills and Council Tax will kill off the Property Market in the UK.

Council tax is going to be very telling,up here we already pay really high rates and any big increases will really hurt.Councils have huge fat to cut.My partners bosses are all working from home,doing nothing much at all,its incredible how they get away with it.Government cap is still in place of 2% so lets see what they do.

The government would like to sign you up to debt servitude in the womb if they could,its the only real weapon they have now to get you to work.

[HousePriceMania]

I was going to post this elsewhere but look at this headline

 

https://globalnews.ca/news/9060552/canada-home-prices-july-2022/

 

Canadian home prices were down 23% in July from February peak

now that's what you call a crash

[Plan-b]

1 hour ago, afly said:

Looks like they are going to throw everything at it

https://www.ft.com/content/281fbba6-28e2-42d4-b241-0f215995f0d1
A new lender has been granted a licence by UK financial regulators to offer mortgages with fixed rates of up to 50 years in a move aimed at helping borrowers manage soaring inflation.

Perenna, a UK-based specialist lender, is initially planning to provide home loans that lock in rates for 30 years, before rolling out products with even longer terms. - FFS

Its approval comes as the Bank of England raises interest rates in an attempt to tackle rapid inflation, which has reached a 40-year high of 9.4 per cent in Britain. -Yeah Right 1.75%

Longer-term mortgages have been mooted as a way to help younger people on to the housing ladder as property prices remain high. - How how about affordable housing?

Prime minister Boris Johnson last month explored plans for longer mortgages that could be handed down between generations. - You and your cronies got any connection to Perenna then Boris?

House prices in the UK reached a record high last month, although data from property site Rightmove on Monday showed the average value had dipped 1.3 per cent in August to £365,173. - Dipped 1.3% well that can't be allowed can it

“Mortgages are broken in the UK because normal people (LOL) can’t buy a house. This is not the case in other markets, such as the US and Denmark, where stability is being provided by long-term mortgages.” What stability, inter-generational slavery?

Gerard Lyons, an economist and former adviser to Johnson, wrote in a paper for think-tank Policy Exchange last week that “one of the critical areas for a new prime minister is to address the challenges in the housing market, and to help turn Generation Rent into Generation Buy”. - Dr Gerard Lyons Agenda Contributor at the WEF

Unlike banks, which fund much of their mortgage lending through customer deposits, Perenna will issue covered bonds to pension funds and insurers for longer-term financing. - So Banks rely on Customer Deposits to fund large parts of mortgages? 

[HousePriceMania]

26 minutes ago, geordie_lurch said:

Seems like there's going to be a cull of Civil servants and the pay of those that are left - seems bearish to me

Story is from Guardian here: https://www.theguardian.com/politics/2022/aug/15/ministers-planning-to-cut-civil-servant-redundancy-pay-at-same-time-as-91k-jobs

"Ministers are planning to reduce redundancy pay for civil servants while cutting 91,000 Whitehall jobs, setting up a bitter confrontation that unions warned may lead to legal and industrial action.

The proposals could result in average packages being cut by a quarter at a time when the minister for Brexit opportunities and government efficiency, Jacob Rees-Mogg, is aiming to shrink the civil service by a fifth"

Couldn't see any mention of pensions in the story...

Good. ****s the lot of 'em.

Knew a police office worker who thought it hilarious that they weren't getting pay rises during "austerity" but getting moved up pay grades instead.

 

 

[DurhamBorn]

1 minute ago, HousePriceMania said:

I was going to post this elsewhere but look at this headline

 

https://globalnews.ca/news/9060552/canada-home-prices-july-2022/

 

Canadian home prices were down 23% in July from February peak

now that's what you call a crash

Plus 5% for 6 months inflation.

[Lightscribe]

5 minutes ago, DurhamBorn said:

Council tax is going to be very telling,up here we already pay really high rates and any big increases will really hurt.Councils have huge fat to cut.My partners bosses are all working from home,doing nothing much at all,its incredible how they get away with it.Government cap is still in place of 2% so lets see what they do.

The government would like to sign you up to debt servitude in the womb if they could,its the only real weapon they have now to get you to work.

But if your disabled you don’t pay council tax. I’m going long ADHD and Long Covid to the moon! 🌙 

[BadAlchemy]

30 minutes ago, geordie_lurch said:

"Ministers are planning to reduce redundancy pay for civil servants while cutting 91,000 Whitehall jobs, setting up a bitter confrontation that unions warned may lead to legal and industrial action.

Oh noes

[HousePriceMania]

7 minutes ago, DurhamBorn said:

Plus 5% for 6 months inflation.

So around 30% real term fall, annualized 56% 

 

This is seriously funny.

[Lightscribe]

17 minutes ago, HousePriceMania said:

Good. ****s the lot of 'em.

Knew a police office worker who thought it hilarious that they weren't getting pay rises during "austerity" but getting moved up pay grades instead.

 

 

Pay spines encourage employees to stay in a job. (It costs the tax payer around about £100k to train a police officer). You would get a higher turnover than you do now and that is already increasing at a rapid clip. They start on £20k a year. And it’s true real wage declines have happened constantly for over 15 years. Without pay spines to a reasonable wage progression there wouldn’t be any. It depends if you think it would be better without them at all. 90% of people never have any interaction with the police until they need them. Then it’s a different story.

Don’t blame the current people working they will suffer the same as everyone else, blame the system and the ridiculous pension schemes of the boomer years that were never sustainable.
 

[DurhamBorn]

16 minutes ago, Lightscribe said:

But if your disabled you don’t pay council tax. I’m going long ADHD and Long Covid to the moon! 🌙 

You do if you have more than £6k in savings.

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22 minutes ago, DurhamBorn said:

You do if you have more than £6k in savings.

Lucky the bennie brigade know that. Cash, fags and healthy start vouchers in dodgey newsagents for the win. (plus Tesco vouchers for pack lunch to spend on anything if your child doesn’t have school dinners)

[RJT1979]

Minimum wage pretty much 12 quid now. 50pc increase? Any couple willing to work can get 50-60k joint. Will this stop HPC?

[Yadda yadda yadda]

1 hour ago, M S E Refugee said:

It looks like Utility Bills and Council Tax will kill off the Property Market in the UK.

Nailed on. I also think that utilities and council tax will have a major impact on people retiring on small to average pensions. If those bills end up at £5k+ for a small home and £7k+ for an average house that will squeeze a lot of people into poverty. Knock on impact on the housing market as people downsize.

[Yadda yadda yadda]

15 minutes ago, RJT1979 said:

Minimum wage pretty much 12 quid now. 50pc increase? Any couple willing to work can get 50-60k joint. Will this stop HPC?

Has it been put up again? Last I saw it was £10 or so.

That sort of minimum wage would prevent a nominal crash in Durham, Cumbria and other places with low house prices. In more expensive areas it would need a big increase in wages further up the scale. These will be much more patchy.

[M S E Refugee]

40 minutes ago, Yadda yadda yadda said:

Has it been put up again? Last I saw it was £10 or so.

That sort of minimum wage would prevent a nominal crash in Durham, Cumbria and other places with low house prices. In more expensive areas it would need a big increase in wages further up the scale. These will be much more patchy.

I think the NMW is £9.50.

Anyhow nothing will be saving people in places like Carlisle, loads of new estates have been built recently and most 4 bedroom detached houses start at 250k and most households won't be earning more than 50k.

And most of these people will have two new Cars on the drive, basically they are screwed.

[Lightscribe]

54 minutes ago, Yadda yadda yadda said:

Nailed on. I also think that utilities and council tax will have a major impact on people retiring on small to average pensions. If those bills end up at £5k+ for a small home and £7k+ for an average house that will squeeze a lot of people into poverty. Knock on impact on the housing market as people downsize.

yup.