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

[Don Coglione]

1 hour ago, feed said:

These are pay check to pay check people.  

Maybe they got enough for a few months off or a year.  But why would they care, if all they ever worked was min wage, it's not like they put their career on hold.  There is always going to be min wage work.  

It's "cheque", for fuck's sake!

We are beyond hope.

[Harley]

1 hour ago, Cattle Prod said:

I've worked in America, and you can accumulate savings very quickly. The model over there is work hard, with little holidays, long hours build up your savings and retire earlier than we do. This model used to be available to everyone, but now the bottom 50% will struggle to achieve it of course thanks to inflation and wage stagnation. My equivalent in Houston will make about 1.75 x my salary and live in a McMansion that cost him 300k. He can easily retire at 45 if he wants, depending on divorces. I worked there as a waiter in the 90s. Worst waiter in the world, I have never been as rich since in terms of disposable income (I made about $600 a week, and spent less than $100). The gap between living costs and income was enormous (yes I lived like a bum, but so do many people). I don't know about crypto wins, but there are whole swaths of the US quite happy to buy an Airstream and tour around indefinitely. Or you can buy 50 acres for buttons in many places there etc etc

Edit:

Not forgetting that my quivalent in Houston pays much less tax, and can offset mortgage interest or any other interest for that matter against it.

Yep, no state tax in Texas while I was there, just a hefty property tax.  Thing is a chunk of people can drift in and out of work given it's minimum wage stuff.  That's the other side of a flexible wageforce.

[Harley]

1 hour ago, DurhamBorn said:

I think David is talking like we are still in the old cycle,but i think he is wrong on that.He is trying to say the cycles should be timed from market moves,but i think thats wrong.Cycles should be timed from movement in inflation for me.Its clear we entered the cycle,and i would see a BK or big downturn he expects as the first big head fake and shakeout along the way.How can he say its still the old cycle when the likes of Potash go 300% up.Just because down targets arent reached doesnt mean the cycle isnt underway.If the CBs hadnt monetised the debt the last 18 months we would of seen the biggest financial crash in human history.

David doesnt think a cycle has started until all the debt etc and swimming naked etc has been swept away.My roadmap says RPI in the UK will ping 1991 levels at 7% next.In 2 years inflation will remove 14% of buying power for UK people the same as it took the previous ten years to do.

Are you saying we are in the post BK phase?

[Bilbo]

Is this a sign of the boomers running out of money.. nothing left for their children's legacy?

https://www.cityam.com/middle-class-stampede-for-equity-release-as-wealthy-homeowners-flock-to-lifetime-mortgages/

 

[Chewing Grass]

4 minutes ago, Bilbo said:

Is this a sign of the boomers running out of money.. nothing left for their children's legacy?

https://www.cityam.com/middle-class-stampede-for-equity-release-as-wealthy-homeowners-flock-to-lifetime-mortgages/

 

Lifetime mortgages are the last resort for the financially nieve.

Rates have halved to under 3% (bet they are not fixed) with the average property value being £539K and the average sum released is £115K.

Many would be better off selling up and fucking off.

[ThoughtCriminal]

This video is hilarious. And true.

[Chewing Grass]

6 minutes ago, ThoughtCriminal said:

This video is hilarious. And true.

Think about it, Yanks drive Big Pickups called Trucks, they like the performance of Teslas and New Stuff.

Mash all three together by saying your going to produce a great truck at a great price that goes like stink and costs fuck-all to run.

'Investors' Jizz themselves, you shares go through the roof, you sell yours and fuck-off, they last thing you want to do is actually try to sell them like Tesla's early competition free years.

[sancho panza]

Just psoting some sales data for the properdee crash thread and the volumes are tanking.Pre covid,normally 60 or 70% would get registered within three months,the rest dribbling in tehreafter.Either,conveyancers are getting tardy registering or volumes are collapsing in certain places

 

 

[DurhamBorn]

3 hours ago, Harley said:

Are you saying we are in the post BK phase?

I dont know,but i dont think the equity market is the way to mark a cycle turn from dis-inflation to inflation.Due to the massive leverage a sharp deflation should end the cycle,but i think if we get a sharp deflation now it is simply a pullback in the reflation.David will be tracking liquidity in M3 etc and it had the biggest increase from trend in history.

My question to him would be ok,so what are your entry points on these reflation loving stocks?.If they are going down hard,then where do you enter?.Its not good enough to say i expect 70% down from 20% higher.I want names of 25 stocks and the prices he expects.Is BT going below 95p,is BP going below £2 etc.

I bought mostly on ladders set for a big sell off before the CBs jumped and my work told me it should be fiscal pumping and the sectors to go for.I got some allocation wrong,but im around 52% up in 18 months including divs.

Now the question is,will i lose that in a BK or not?.Less or more.

David is thinking we are going to see a massive banking collapse in Europe and Asia,if we dont get it we could be looking at a massive re-allocation of capital instead.

Im more concerned with IHT etc than a BK because thats certain to take 40% off my kids,not maybe if i dont action.

[JMD]

4 hours ago, Harley said:

Fair enough, apologies, I'm certainly not laughing.  Maybe such actions should be called out and ridiculed, especially given the history, but not here.

Tbc Harley I was only joking with you. And I expect your choice of cartoon was perhaps just a case of...                                                                                                                          

[DurhamBorn]

4 hours ago, Axeman123 said:

I totally see your point, however I imagine Dave is trying to be consistent with how the start and end point of historical cycles are normally discussed. The 1929 crash would likely have been a year or two into a new cycle using your framework, which would be very confusing to discuss when other economists would view it as the point of change.

I have also seen commentators claim that the March 2020 lows were it, and we have now started a new 5-7 year bull market with all previous excess purged! Dave certainly wouldn't want cherry picked tweets to appear to support something so out of tune with his own views.

Yes i think he doesnt see the cycle starting until the debt zombies collapse etc and the Fed goes mega hard on liquidity.

I think the internals of the market mask a lot.Tesla goes to zero for instance if it cant issue equity because its loss making.

[wherebee]

5 hours ago, Don Coglione said:

It's "cheque", for fuck's sake!

We are beyond hope.

no, in the USA it is 'check'.  as in a 'checking account'.

 

Now here is a service revolver, go and do the decent thing old chap.  We can't have fake grammar nazis here.

[Starsend]

15 minutes ago, wherebee said:

no, in the USA it is 'check'.  as in a 'checking account'.

 

Now here is a service revolver, go and do the decent thing old chap.  We can't have fake grammar nazis here.

Have you chequed this?

[MrXxxx]

17 hours ago, DoINeedOne said:

Seems Netherlands and Austria are going full retard hope other don’t start following

Ah Austria, the birthplace of the Blauschein...and who said `history never repeats itself`?

[MrXxxx]

13 hours ago, Cattle Prod said:

I hope this geezer finally retired

No, I think he ran for President and won didn't he?

[JimmyTheBruce]

21 hours ago, DurhamBorn said:

Maybe this thread should go into stealth....

Please no... I'm not verbose enough to make it there yet 

[JimmyTheBruce]

21 hours ago, M S E Refugee said:

Has anyone got a Freetrade account?

The past few days have been awful, taking ages to deposit money and ages to buy shares and also the App keeps crashing.

I'm very close to sacking them off.

Haven't noticed any problems with the app, but a big issue that came to light recently was their inability to support all types of corporate action.  They handle dividends and the like OK, but if there is an option to buy at a reduced price they don't pass that offer on to you.  And buried in the terms and conditions is a clause that waives your right to those benefits.

I've posted before to say Freetrade are OK, but I'm revising that opinion, and this is an additional reason to sack them off if you need one.  They're missing functionality which is fundamental to any investment platform, refusing to give a timeline for making it available, and prioritising "refer a friend" functionality.

I'll be trying to get the bulk of my investments off there now, hampered by their other missing functionality to transfer out anything other than cash.... 

[Errol]

 

[geordie_lurch]

11 minutes ago, Errol said:

 

Nope nowhere near the top. It will probably double from here at least as those who don't succumb to the 'vaccines' try and protect themselves from bail ins, inflation, currency crises and CBDCs 

[leonardratso]

3 minutes ago, geordie_lurch said:

Nope nowhere near the top. It will probably double from here at least as those who don't succumb to the 'vaccines' try and protect themselves from bail ins, inflation, currency crises and CBDCs 

i hope so, otherwise i stand to lose up to 25 great british pounds or my entire life savings, i dont know what id do, probably have to go back to looking for pennies on the street.

[Bricormortis]

11 hours ago, sancho panza said:

Just psoting some sales data for the properdee crash thread and the volumes are tanking.Pre covid,normally 60 or 70% would get registered within three months,the rest dribbling in tehreafter.Either,conveyancers are getting tardy registering or volumes are collapsing in certain places

 

 

11 hours ago, sancho panza said:

Just psoting some sales data for the properdee crash thread and the volumes are tanking.Pre covid,normally 60 or 70% would get registered within three months,the rest dribbling in tehreafter.Either,conveyancers are getting tardy registering or volumes are collapsing in certain places

 

 

Theres a big development in London ( £ 3 billion development ) cant find any buyers. Nine Elms i think its called. Asking price is £995.000 for one bedroom flat.  If I offer £994000 will they accept lol. America real estate seems to have peaked in terms of new mortgages. Add China into the mix and I think its likely  this is the top for now and any recession in 2022 creates downward pressure.

[Errol]

17 minutes ago, geordie_lurch said:

Nope nowhere near the top. It will probably double from here at least as those who don't succumb to the 'vaccines' try and protect themselves from bail ins, inflation, currency crises and CBDCs 

For that purpose it's probably better to use an asset that isn't recorded on a public ledger.

[Chewing Grass]

12 hours ago, sancho panza said:

Just psoting some sales data for the properdee crash thread and the volumes are tanking.Pre covid,normally 60 or 70% would get registered within three months,the rest dribbling in tehreafter.Either,conveyancers are getting tardy registering or volumes are collapsing in certain places

 

 

Just done the whole of Englan & Wales, statista only goes up to June so I guess their figures  are more or less complete.

Even mundane houses on estates near me are over 300K now even for shonky ones built in the late 1950s and getting anything better requires 50-75% more money for a little extra space and an extra bedroom.

Choice is limited as well with the number of homes on offer about 70% of what it used to be.

[Axeman123]

10 hours ago, wherebee said:

no, in the USA it is 'check'.

Colonial patois!

[Popuplights]

4 hours ago, Cattle Prod said:

The reason I put the bulk of min in HL was @DurhamBorns comment "it's where MPs and the middle class put their money. They're not going to mess about with it". That's worth £5.95 a trade to me.

Yep. 11 quid a trade is fuck all really