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

[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.

[Lightscribe]

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.

[feed]

3 minutes ago, M S E Refugee said:

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.

50

 

year

 

mortgages

 

 

[M S E Refugee]

Just now, feed said:

50

 

year

 

mortgages

 

 

50 year or 100 hundred year mortgages make no difference when your utility bills have doubled,you have Car loans and massive credit card debt.

And also your job could go in the next 6 months.

We are in the end game.

[Axeman123]

5 minutes ago, feed said:

50

 

year

 

mortgages

Funded by selling 50 year bonds to pension funds. What rate would they want to commit for that length of time? I predict the whole thing will fizzle, perhaps after selling some shares and making the founder rich.

[sancho panza]

14 hours ago, Axeman123 said:

On the other hand...

Place your bets...

Yeah, I think you gotta decide your own risk parameters,as @geordie_lurch points out below,he was in a lot of stuff your average basement dweller wouldn't go near.

With inflation moving at a decent clip near double digit,then moving to cash has ramifications it didn't with 3% CPIH.

We're still long oilies,goldies,comms,baccy.Not feeling the urge to cash up yet.

13 hours ago, geordie_lurch said:

Given what he was holding I would say he was actually late to sell most "long positions on 11 companies during the second quarter" but seems like he got out of nearly all equities before May like myself and a few others in the thread

The current share price rises seems like a classic bear market rally to me and maybe some will be able to time things will enough to get out of the burning building when it all finally comes crashing down but I'm happy keeping my recent profits in cash for a little while longer

Really good point Geordie.The time to bail on those was Dec last year.

As I've said before,going back to 2000,it was the lower high that was the thing to short.Shorting in a bull run up is a mad game(been there got the t shirt).Fed,reins back a bit and we get a weak dollar pahse,then equities might scoot higher,most likely led by value stocks rather than tech.

dyor natch

 

[feed]

7 minutes ago, M S E Refugee said:

50 year or 100 hundred year mortgages make no difference when your utility bills have doubled,you have Car loans and massive credit card debt.

And also your job could go in the next 6 months.

We are in the end game.

State price caps on utilities and car ownership is going away.  
Mortgages payments will be the last to go and every trick in the book will be employed to extend them.  

 

[sancho panza]

4 minutes ago, M S E Refugee said:

50 year or 100 hundred year mortgages make no difference when your utility bills have doubled,you have Car loans and massive credit card debt.

And also your job could go in the next 6 months.

We are in the end game.

to the bank a 100 year mortgage defautl is the same as a 25 yr default.Thye still have to recover capital.

reality is that there are a lot of people looking at the worker bees with plansa for the taxes they pay-bennie recipients,defence dept,heatlh dept,pensions industry,councils,banks etc etc.

if that pot of income drops,the taxpayers have hard choices to make but so do the people relying on the flows from their workstream.period.

as we've dsicussed,people will pay their food bill first,then their fuel,with whats' left the groups above can haggle over what they get.

reality is hard times are coming particualrly for some like councils who've been living off the fat of the land for years.

[sancho panza]

2 hours ago, geordie_lurch said:

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.

 

Big thing I find with stiking is that it really helps if people notice you're not at work.

[M S E Refugee]

1 minute ago, feed said:

State price caps on utilities and car ownership is going away.  
Mortgages payments will be the last to go and every trick in the book will be employed to extend them.  

 

I have no doubt they will try and subsidise Utility bills but it won't work and will just make things worse.

[DurhamBorn]

1 hour 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.

I think this is key.Its going to be horrific for single people now of any age living alone.The 25% discount on Council Tax is already a joke,it should be 50%.Most people will of priced £2.5k for the two.This thread said ages ago big houses would be a huge liability and thats coming to pass.

Just been in Lidl,two obvious new immigrants,you could tell by their top of the range phones and only English words a few yes,no etc,trolley load of food,all being consumed from English taxpayers.Lass behind with 3 kids obvious southern bennie scrounger moved up here because her bennies will cover the rent.Lots of food is now up 50%.The government has no answers to this,they are useless.More and more consuming resources we have to import with sterling when we are running massive current account deficits.Iv input some of this into my roadmap.It assumes every new immigrant consumes,but doesnt add any exportable production.Roadmap says collapse certain 100%.I though still do think collapse for the UK is avoidable,but it really is looking like a 50/50 now.Its so bad and my roadmap is usually pretty close to the money i should move all assets out of the UK.However usually when at extremes on my roadmap like this political moves lower the dial.The only moves now have to be massive  inflation adjusted spending cuts and massive tax cuts on work and business.

[feed]

8 minutes ago, M S E Refugee said:

I have no doubt they will try and subsidise Utility bills but it won't work and will just make things worse.

No doubt.  But look at the props they've employed since the GFC just to keep house prices level with inflation.  Financial repression all day long, but a nominal fall in house prices whilst they are being eroded by real inflation gives the game away.

Stealing from old people slowly.  

Property will be the last to go.  

[geordie_lurch]

26 minutes ago, sancho panza said:

Yeah, I think you gotta decide your own risk parameters,as @geordie_lurch points out below,he was in a lot of stuff your average basement dweller wouldn't go near.

Just for the record @sancho panza I think the only stock I haven't bought that the average basement dweller hasn't is my £50 punt at BBBY last week and similar small punts on meme stocks last time to try and fight the system However my own personal circumstances of needing a large sum of cash before the end of the year made me hyper focussed on preserving as much of the 25% or so I made on oilies, baccy and potash since the 2020 lows and there were enough warnings in March and April for me to move to mostly cash then. I'm also aware sitting mostly in cash isn't going to get me as much in dividends and is not standard practice in these inflationary times but I can live with that 'cost' given that I would have lost at least 5% of that 25% since I sold up so far according to my watchlist price tracker of the stocks I sold which I simply couldn't afford to take on the chin at the moment due to my personal circumstances.

[Starsend]

7 minutes ago, DurhamBorn said:

I think this is key.Its going to be horrific for single people now of any age living alone.The 25% discount on Council Tax is already a joke,it should be 50%.Most people will of priced £2.5k for the two.This thread said ages ago big houses would be a huge liability and thats coming to pass.

Just been in Lidl,two obvious new immigrants,you could tell by their top of the range phones and only English words a few yes,no etc,trolley load of food,all being consumed from English taxpayers.Lass behind with 3 kids obvious southern bennie scrounger moved up here because her bennies will cover the rent.Lots of food is now up 50%.The government has no answers to this,they are useless.More and more consuming resources we have to import with sterling when we are running massive current account deficits.Iv input some of this into my roadmap.It assumes every new immigrant consumes,but doesnt add any exportable production.Roadmap says collapse certain 100%.I though do still do think collapse for the UK is avoidable,but it really is looking like a 50/50 now.Its so bad and my roadmap is usually pretty close to the money i should move all assets out of the UK.However usually when at extremes on my roadmap like this political moves lower the dial.The only moves now have to be massive cuts and massive tax cuts on work and business.

Baked in far as I'm concerned but we'll know by Christmas, Truss will have had a few months so we'll have had long enough to see if she's another clueless cretin or not.

We've just seen a pretty typical response to the problem in the form of 50 year mortgages - let's try and milk the productive few left even harder, they don't seem to know how to do anything else.

[wherebee]

2 minutes ago, Starsend said:

Baked in far as I'm concerned but we'll know by Christmas, Truss will have had a few months so we'll have had long enough to see if she's another clueless cretin or not.

We've just seen a pretty typical response to the problem in the form of 50 year mortgages - let's try and milk the productive few left even harder, they don't seem to know how to do anything else.

Indeed.  Every turn of the screw on the productive results in more of them withdrawing their labour and doing minimum effort to get by.  Eventually the reality will whipsaw back and then everything crashes.  I'd suggest we're already seeing that in terms of inflation - which is just a currency losing value.  Giving out free money to people just results in the people selling actual stuff into the country (food/goods) demanding more of this shit currency.

It's going to end in hyperinflation, isn't it.

[HousePriceMania]

23 minutes ago, M S E Refugee said:

I have no doubt they will try and subsidise Utility bills but it won't work and will just make things worse.

No doubt at all.

 

 

 

They want the inflation, or they are thick.

[HousePriceMania]

14 minutes ago, feed said:

No doubt.  But look at the props they've employed since the GFC just to keep house prices level with inflation.  Financial repression all day long, but a nominal fall in house prices whilst they are being eroded by real inflation gives the game away.

Stealing from old people slowly.  

Property will be IS ALREADY the last to go.