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

[Axeman123]

Just an example of the USA tightening up on tax evasion, expect something similar here:

 

Money transfer companies, like paypal and cashapp, are now going to be required to report far more information to the IRS.

[Lightscribe]

https://www.telegraph.co.uk/personal-banking/mortgages/nationwide-hikes-mortgages-bank-englands-rate-rise/
 

And so it begins…

[DurhamBorn]

10 hours ago, Hancock said:

Or it could be the case as per Davey boy that share prices crash, and by the end of the cycle your prediction was close!

What shares though,how much,how long,what about divs etc those are the questions and relative to other assets.For instance cash is losing around 60% value this cycle,bonds likely around 35%,houses 30% minimum inflation adjusted.I have no concerns if i get a big drawdown,all part of investing.I do continue to slice profits off though in some areas for instance DRAX lately.Iv also got 5 years living expenses in cash,something iv always done.We know now without much doubt we are in a distribution cycle so investing will be very difficult from here in.Governments and tax might prove the biggest danger.Those rules on pensions etc being IHT free are hugely important to me.

[Axeman123]

18 minutes ago, Lightscribe said:

https://www.telegraph.co.uk/personal-banking/mortgages/nationwide-hikes-mortgages-bank-englands-rate-rise/
 

And so it begins…

Reading between the lines they want existing borrowers to shop around for the best rate, I speculate they want rid of the high LTV etc loans via remortgage.

[RJT1979]

1 hour ago, Boon said:

TBH I think we've already seen some of this in flats. In the case of houses I think the price action has been more resilient due to preference and incentives.

For instance I've seen flats that were £450k in 2016 sell for closer to £400k in 2021. That's a c.12% nominal drop, but also maybe another 10% inflation adjusted drop. In real terms that is roughly 20% cheaper.

So fast-forwarding to 2026 if those prices stay at £400k and inflation remains at c.5% there is your 50% drop.

I guess the real necessary kicker will be interest rates. If we are at 5% (which simply matches inflation) then that is a huge increase in costs. 

So at 5% inflation I reckon you might be looking at the £700k house being £550k in 2026. It isn't easily mentally to grasp that houses might be much cheaper in the future, that is the mindset that most people has. Houses going up quickly in a short space of time seems entirely rational, but stagnation and small decreases seems irrational.

I should add looking at what £700k gets you in some places in London, I suspect DB might think the eventual inflation-adjusted falls could be even greater.

You also have to bare in mind many of these expensive buys in London use a one off bank of mum and dad deposit with no further top ups. 2 mediocre wages then pay a mortgage. Inflation will wipe out the disposable of these people and make moving up the ladder impossible and maybe even paying mortgage on one salary won't work either. 

[Noallegiance]

1 hour ago, Innkeeper said:

 

Fed on the move.....

Fed minutes paint a picture of a central bank ready to swiftly abandon its easy policy stance

https://www.marketwatch.com/story/coming-up-minutes-of-feds-december-meeting-11641408288

Aaaaaand everything shits the bed.

Even signposting a fractional rate rise causes mayhem.

[HousePriceMania]

Has anyone thought about buying into the bank shares ?

They've been hammered for years now

[Don Coglione]

10 hours ago, leonardratso said:

i love hummus, use it instead of butter, probably not good for me. I hear its full of zinc.

Isn't that semen?

[leonardratso]

9 minutes ago, Don Coglione said:

Isn't that semen?

is it? i dont know ive never tried semen.

youll have to let me know.

[RJT1979]

19 minutes ago, HousePriceMania said:

Has anyone thought about buying into the bank shares ?

They've been hammered for years now

Polish ones did 100pc recently 

[Don Coglione]

10 minutes ago, leonardratso said:

is it? i dont know ive never tried semen.

youll have to let me know.

Try the San Francisco Switcheroo.

[Bobthebuilder]

39 minutes ago, HousePriceMania said:

Has anyone thought about buying into the bank shares ?

They've been hammered for years now

I have had bank shares since 2008, they went up a bit, down a bit, paid a couple of small divis and that's it in 14 years. In 2008 I thought i was being clever, still own a few.

[Innkeeper]

8 minutes ago, Bobthebuilder said:

I have had bank shares since 2008, they went up a bit, down a bit, paid a couple of small divis and that's it in 14 years. In 2008 I thought i was being clever, still own a few.

I bought HSBC at 4.20 around this time last year.  Been up a bit, down a lot, but now on a bit of a roll.  The market must be sensing interest rate rises which is the way forward for banks’ share prices to move up.

 

[Sugarlips]

9 minutes ago, Innkeeper said:

I bought HSBC at 4.20 around this time last year.  Been up a bit, down a lot, but now on a bit of a roll.  The market must be sensing interest rate rises which is the way forward for banks’ share prices to move up.

 

Are they not up to their ears in the Evergrande et al debarkle?

[THE SOUP DRAGON]

How Does Rising Inflation Affect Bond Values? | Morningstar

I have learnt a lot from this thread and the very knowledgeable people who contribute. 

I found the attached very useful and hopefully could be of some use to other learners.

[Innkeeper]

13 minutes ago, Sugarlips said:

Are they not up to their ears in the Evergrande et al debarkle?

You would think so but the market appears indifferent at the moment.  There's noises about China making sure that their whole property debacle will be 'managed out' by the government - maybe thats enough for the market not to be too concerned.  But I'm guesssing really...

[Formerly]

20 minutes ago, Cattle Prod said:

So I've never fixed a mixer tap before, last time I fixed a tap it was a simple brass and washer jobby. I thought they were valved and wouldn't drip, but mine started dripping the other day. So one short youtube video later I find out you can get these little cylinder thingies for £4.67:

All I needed tools wise was a screwdriver for the isolation valve, a T8 bit for the hidden screws, and an adjustible spanner. I had all these. Took about 45 mins, including trying to find out how to turn the water off, and drop down to Screwfix. There is ceramic in them for some reason, and one had a crack. Hence the drip.

I reckon this would have cost £150 to call out a plumber. No slight on them, everyone needs a plumber and it's just supply and demand, though @sancho panza it seems to be money for old rope...

So what did this cost HMRC, more importantly?

I'd have to earn about £270 to pay for that, and pay them £108 in income tax, plus £11 in NI and £37 in employers NI. Then the plumber would probably have to pay 40% marginal tax on his £145.33, say £58, plus whatever he pays in NI. That totals up about £214!! They got 77p in VAT instead.

That's quite an eye opener, and shows how the working middle funds the whole country really. If the middle 30m people in this country did three of those jobs a year, that'd be about £19bn in lost tax reveune. More realisticaly if even 3m people did three jobs a year, thats still quite a hit to tax revenue. I guess this is why there is a point where raising taxes doesn't get any more into the coffers, and they'd do well to remember this.

And also part of the reason why so many types of work can only be done by people with the appropriate certification. There are many jobs around the house that I have industrial experience of, but do not have the current certification to do.

[sancho panza]

On 30/12/2021 at 01:07, Cattle Prod said:

I was just listening to a recent Joe Rogan podcast with Jocko Willink on all sorts of stuff, but he made a few comments on the MSM which struck me. That it's essentially dying, no one goes there for a 'hot take' anymore and though they are good communicators, it's all opinion rather than unbiased factual reporting. And those opinions are mostly left wing propagandising. Cant really argue with the guy as most of us wouldn't, but tens of millions of people listen to him. F'n brilliant.

Funny you shoudl say this but I spent yesterday morning sorting out the garage and shed at our new pad and did so whilst lsitening to a 3 hour interview between Rogan and Dr Robert Malone,probably the most important lockdown sceptic interview of the decade.

Truly it was an amazing piece of work.Rogan had clearly done some homework and was able to maintian the pace and direction of the interview despite the complexity of the issuess-physiological/financial/societal.At the end,Malone thanked Rogan from the bottom of his heart for giving him some airtime,especially in light of his recent Twitter/YouTube ban.It was a touching moment for a hardened lockdown sceptic like myself.Malone knew the importance of that interview because Rogan's reach is way ahead of the bulk of the MSM.

The reason for the prelude is that genuinely,you don't get this sort of debate in the MSM any more.And that's a huge problem for them long term,just like the rising/elderly average age of M&S's customer base is a structural problem for them.

I now longer watch things like Sky News.I only used to because Mrs P did,but now she's stopped due to the neverending nature of the lies/fear porn about covid/lockdowns.

[CannonFodder]

Very true, one of my father.s retired friends rewired his house ( retired electrician) but then needed someone to certify to have the paperwork should he ever need to sell the house. To be able to point to a trading electrician installing to latest regs. 

[DoINeedOne]

2 hours ago, HousePriceMania said:

Has anyone thought about buying into the bank shares ?

They've been hammered for years now

One rule i have is i will never buy shares in a banks, i just don't trust the cunts or there accounts

37 minutes ago, Cattle Prod said:

So I've never fixed a mixer tap before, last time I fixed a tap it was a simple brass and washer jobby. I thought they were valved and wouldn't drip, but mine started dripping the other day. So one short youtube video later I find out you can get these little cylinder thingies for £4.67:

All I needed tools wise was a screwdriver for the isolation valve, a T8 bit for the hidden screws, and an adjustible spanner. I had all these. Took about 45 mins, including trying to find out how to turn the water off, and drop down to Screwfix. There is ceramic in them for some reason, and one had a crack. Hence the drip.

I reckon this would have cost £150 to call out a plumber. No slight on them, everyone needs a plumber and it's just supply and demand, though @sancho panza it seems to be money for old rope...

So what did this cost HMRC, more importantly?

I'd have to earn about £270 to pay for that, and pay them £108 in income tax, plus £11 in NI and £37 in employers NI. Then the plumber would probably have to pay 40% marginal tax on his £145.33, say £58, plus whatever he pays in NI. That totals up about £214!! They got 77p in VAT instead.

That's quite an eye opener, and shows how the working middle funds the whole country really. If the middle 30m people in this country did three of those jobs a year, that'd be about £19bn in lost tax reveune. More realisticaly if even 3m people did three jobs a year, thats still quite a hit to tax revenue. I guess this is why there is a point where raising taxes doesn't get any more into the coffers, and they'd do well to remember this.

Whilst its not a competition i can beat that

Toilet was not flushing correctly had to yank the handle 5000 times to get it to flush slightly

£1.70 on amazon and 5 minutes it's fixed a silly piece of plastic called a diaphragm

 

[Loki]

Top DOSBODing, huge respect for financial experts that also get their hands dirty!

[leonardratso]

32 minutes ago, DoINeedOne said:

One rule i have is i will never buy shares in a banks, i just don't trust the cunts or there accounts

Whilst its not a competition i can beat that

Toilet was not flushing correctly had to yank the handle 5000 times to get it to flush slightly

£1.70 on amazon and 5 minutes it's fixed a silly piece of plastic called a diaphragm

 

could just pour a bucket of water into it quickly as an emergency measure, its only a large siphon in effect.

always best to use a yellow or brown toilet and bathroom fittings though i find;

 

[Starsend]

1 hour ago, Cattle Prod said:

So I've never fixed a mixer tap before, last time I fixed a tap it was a simple brass and washer jobby. I thought they were valved and wouldn't drip, but mine started dripping the other day. So one short youtube video later I find out you can get these little cylinder thingies for £4.67:

All I needed tools wise was a screwdriver for the isolation valve, a T8 bit for the hidden screws, and an adjustible spanner. I had all these. Took about 45 mins, including trying to find out how to turn the water off, and drop down to Screwfix. There is ceramic in them for some reason, and one had a crack. Hence the drip.

I reckon this would have cost £150 to call out a plumber. No slight on them, everyone needs a plumber and it's just supply and demand, though @sancho panza it seems to be money for old rope...

So what did this cost HMRC, more importantly?

I'd have to earn about £270 to pay for that, and pay them £108 in income tax, plus £11 in NI and £37 in employers NI. Then the plumber would probably have to pay 40% marginal tax on his £145.33, say £58, plus whatever he pays in NI. That totals up about £214!! They got 77p in VAT instead.

That's quite an eye opener, and shows how the working middle funds the whole country really. If the middle 30m people in this country did three of those jobs a year, that'd be about £19bn in lost tax reveune. More realisticaly if even 3m people did three jobs a year, thats still quite a hit to tax revenue. I guess this is why there is a point where raising taxes doesn't get any more into the coffers, and they'd do well to remember this.

Laffer curve I believe it's called, or something like that.

I do all my own DIY, to a fairly advanced level, just taught myself gradually over the years.

When I fitted a new kitchen there was no plumbing for a dishwasher. Most people would pay a plumber to come out and do it. I turned off the stopcock, cut out a small section of the copper pipe going up to the cold tap using a pipe cutter (£10 from Screwfix), fitted a pushfit T piece, cut another piece of copper to go into the T piece and fitted a connector on the end (also pushfit). It's child play it's so easy but few people would try it. Most plumbing is a doddle now with pushfit and compression fittings. 

I'm proud to have deprived the taxman of a fucking fortune over the years. I'll pass my skills on to my sons so they can also know the joy of robbing the taxman. 

 

 

[Bobthebuilder]

3 minutes ago, Starsend said:

Laffer curve I believe it's called, or something like that.

I do all my own DIY, to a fairly advanced level, just taught myself gradually over the years.

When I fitted a new kitchen there was no plumbing for a dishwasher. Most people would pay a plumber to come out and do it. I turned off the stopcock, cut out a small section of the copper pipe going up to the cold tap using a pipe cutter (£10 from Screwfix), fitted a pushfit T piece, cut another piece of copper to go into the T piece and fitted a connector on the end (also pushfit). It's child play it's so easy but few people would try it. Most plumbing is a doddle now with pushfit and compression fittings. 

I'm proud to have deprived the taxman of a fucking fortune over the years. I'll pass my skills on to my sons so they can also know the joy of robbing the taxman. 

 

 

Give soldering a go, its easy once you get the hang of it, 10 times cheaper too.

If you are a tradesman you cant really get away with pushfits unless its out of sight, as a plumber you are judged by your soldered pipework.

Congrats on the dishwasher still, well done.

14 minutes ago, leonardratso said:

could just pour a bucket of water into it quickly as an emergency measure, its only a large siphon in effect.

 

In the trade that's called "a builders flush".

[WICAO]

4 minutes ago, Starsend said:

Laffer curve I believe it's called, or something like that.

I do all my own DIY, to a fairly advanced level, just taught myself gradually over the years.

When I fitted a new kitchen there was no plumbing for a dishwasher. Most people would pay a plumber to come out and do it. I turned off the stopcock, cut out a small section of the copper pipe going up to the cold tap using a pipe cutter (£10 from Screwfix), fitted a pushfit T piece, cut another piece of copper to go into the T piece and fitted a connector on the end (also pushfit). It's child play it's so easy but few people would try it. Most plumbing is a doddle now with pushfit and compression fittings. 

I'm proud to have deprived the taxman of a fucking fortune over the years. I'll pass my skills on to my sons so they can also know the joy of robbing the taxman. 

I don't think of it as robbing the taxman because that leads to the presumption that the fruits of all of our labour is the taxman's who then gives us some scraps of it for our efforts.  Instead I think of it as everything I earn is mine and my job is to give as little of it away to everyone as possible, including the taxman.