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

[Pip321]

36 minutes ago, Animal Spirits said:

What happens when I want to sell my Pocket home?

You can only sell to people who meet the eligibility criteria applicable to the development (as you did when you bought your Pocket home): this will usually mean that they have to live or work in the borough and they cannot own any other property. Pocket will be able to guide you through the process when the time comes. You will not be able to sell until you have owned the property for at least one year.

 

How long will this restriction last, sub letting is also restricted but that depends on how effectively it's enforced...

 

https://www.pocketliving.com/buying/faqs

If schemes like this look to be bending over backwards to make something affordable….then it means housing in the area is not affordable. Walk away. Don’t ever buy something that isn’t truly suitable. 

Shared ownership, BTL loans etc and these type of affordable schemes (eg buy a pocket) are awful. 

Shared ownership is a real bug bear of mine. Always looked at from the tenants viewpoint…let’s look from the landlords. Then you see what a scam it is. Ignoring debt etc a simple view is:

You have £200k, you buy a house and get £800 pcm in rent and maybe £200 pcm repair and maintainance cost, so £600 pcm profit.

Instead you buy two houses with tenants on shared ownership.  So investment is £100k x 2 (still £200k) and the rent collected is £400 pcm x 2 (still £800) and the maintenance is nil because the tenant sorts that. So now the profit is £800 pcm. Lovely jubbly.

This ignores the fact the rent is normally more on a pro rata basis…

Never mind…just build more boxes and pretend that solves everything. 

[Noallegiance]

https://uk.investing.com/news/economy/uks-cheapest-groceries-rising-at-similar-pace-to-average--ons-2658841

Well, yeah. It's food. It has the same input costs as, ya know, food.

I'm thankful that we have these experts around to highlight this stuff. 

[RJT1979]

17 minutes ago, Noallegiance said:

https://uk.investing.com/news/economy/uks-cheapest-groceries-rising-at-similar-pace-to-average--ons-2658841

Well, yeah. It's food. It has the same input costs as, ya know, food.

I'm thankful that we have these experts around to highlight this stuff. 

Potato's down 14pc. No chance

[Democorruptcy]

It will probably turn out later that the bank staff are funding stuff that will give them a consultancy later!

Quote

 

The UK’s new infrastructure bank has been heavily criticised for channelling millions of pounds of taxpayer money into third party investment funds rather than projects that support “levelling up” and tackling climate change.

Based in Leeds, the UK Infrastructure Bank was set up last June with £12bn in initial funding to draw private sector finance into infrastructure projects that support the transition to net zero carbon emissions by 2050 and boost regional and local economic growth.

It has not yet published a full strategy but has invested in six projects. This includes £50mn as co-lender to the broadband provider Fibrus, which is delivering high-capacity internet in Northern Ireland, and a £107mn loan to the Tees Valley Combined Authority for its South Bank quay development.

However, it is also investing in third party funds, including a £100mn contribution to a new infrastructure fund managed by Octopus Investments, called the “Octopus Sustainable Infrastructure Fund”. It also announced a deal in December to invest up to £250mn in NextEnergy Capital’s £500mn solar fund.

Lord Aamer Sarfraz, the prime minister’s trade envoy to Singapore and a former Conservative party treasurer, said he was sure the bank could play a “valuable role”. But he added: “We need UKIB to do the difficult direct deals, not outsource their responsibilities to third party fund managers as once you invest in a fund you have very little influence over it.

“The point of the bank is to address a market gap in infrastructure investing and it’s not at all clear that it is doing that,” he added.

The comments follow the second reading in the House of Lords last week of a bill that will ensure the bank’s “long-term purpose as an enduring institution”. It is intended to guarantee that the bank is not sold off as happened with another government initiative, the Green Investment Bank, which was sold to the Australian infrastructure investor Macquarie in 2017.

Steve Coulter, head of industrial strategy at the Tony Blair Institute, said the bank was a “big bet by government that they throw a bit of public money at the private sector and it will bring in investment when in all likelihood they risk competing with existing investors, which are already willing to put capital into projects”.

At least two groups of potential investors are understood to have expressed their concerns over the bank’s decisions so far to John Flint, the former HSBC boss who is the institution’s chief executive.

One institutional investor described the decisions as “a bit of joke”. “It’s unclear why they would get a third party manager to raise funds to invest in these projects,” she said. “There is plenty of capital to be deployed out there — the Saudis and Australians are queueing to get into the UK as it’s still a good place to invest.”

https://12ft.io/proxy?q=https%3A%2F%2Fwww.ft.com%2Fcontent%2Fdc489f21-a2d4-4188-8766-94c55d3e4c4f

 

 

[DurhamBorn]

3 minutes ago, Noallegiance said:

https://uk.investing.com/news/economy/uks-cheapest-groceries-rising-at-similar-pace-to-average--ons-2658841

Well, yeah. It's food. It has the same input costs as, ya know, food.

I'm thankful that we have these experts around to highlight this stuff. 

Lack of cooking skills is the main problem.I made a homemade pie yesterday ,4 fresh veg roasted in olive oil,cost £2.25 for two people (pie does 2 days).I spent yesterday boarding out my loft on one side that wasnt.Storage.Tesco trying to tempt me back sent me £8 off a £40 spend for three weeks,they have the big washing powders on for £8 so five of them and a bit veg.Il get 5 each week with the other two vouchers and that will 4 years washing powder with what i have.My rice stash is full now,Home Bargains had some wholegrain basmati for £1.29,its superb quality,same as the £4.50 Tilda wholegrain.2.5 years supply.I need more dried goods,and only 1.5 years bog roll etc so far.I spent £500 over the weekend on meds,vits,fin,viagra  etc etc,3 years supply of everything.

[Democorruptcy]

2 minutes ago, DurhamBorn said:

Lack of cooking skills is the main problem.I made a homemade pie yesterday ,4 fresh veg roasted in olive oil,cost £2.25 for two people (pie does 2 days).I spent yesterday boarding out my loft on one side that wasnt.Storage.Tesco trying to tempt me back sent me £8 off a £40 spend for three weeks,they have the big washing powders on for £8 so five of them and a bit veg.Il get 5 each week with the other two vouchers and that will 4 years washing powder with what i have.My rice stash is full now,Home Bargains had some wholegrain basmati for £1.29,its superb quality,same as the £4.50 Tilda wholegrain.2.5 years supply.I need more dried goods,and only 1.5 years bog roll etc so far.I spent £500 over the weekend on meds,vits,fin,viagra  etc etc,3 years supply of everything.

I still think we could do something with Imputed Labour. People should book how much in labour payments they have reduced GDP by, so we can add it back on. It's only similar to imputed rent that's never paid. 

You aren't knocking off the opportunity cost of that £500. The stuff you have bought might go up a few pounds but you are missing the dividends and capital gain you could have got investing it.

[ThoughtCriminal]

Printy printy? 🤔

[BadAlchemy]

1 hour ago, RJT1979 said:

Potato's down 14pc. No chance

Spuds will be down about 80/90pc for me. Because I went a bit OTT with our planting this year. Mostly Desiree mains with some British Queen earlies. Can't wait!

Dig for Victory (victory over our corrupt rulers... the enemy within) !

[Noallegiance]

Ideology, meet reality:

https://uk.investing.com/news/commodities-news/britain-makes-plans-to-keep-coalfired-power-plants-open-this-winter--govt-2658895

[Transistor Man]

14 minutes ago, Noallegiance said:

Ideology, meet reality:

https://uk.investing.com/news/commodities-news/britain-makes-plans-to-keep-coalfired-power-plants-open-this-winter--govt-2658895

Didcot Power station 2019. 

[King Penda]

22 hours ago, BurntBread said:

Just don't do this if you are Indian, or look like you have Indian ancestry, as there are specialist gangs who do burglaries using metal-detectors. It happened to someone I worked with, about 7 years ago. She had her jewellery spread out as you describe (I don't think she had a safe), and they found every bit.

Fools then I could fool every metal detector on the planet stick a gold coin on the back of a radiator try it first without the coin then try it after the result will be the same

[King Penda]

2 hours ago, DurhamBorn said:

Lack of cooking skills is the main problem.I made a homemade pie yesterday ,4 fresh veg roasted in olive oil,cost £2.25 for two people (pie does 2 days).I spent yesterday boarding out my loft on one side that wasnt.Storage.Tesco trying to tempt me back sent me £8 off a £40 spend for three weeks,they have the big washing powders on for £8 so five of them and a bit veg.Il get 5 each week with the other two vouchers and that will 4 years washing powder with what i have.My rice stash is full now,Home Bargains had some wholegrain basmati for £1.29,its superb quality,same as the £4.50 Tilda wholegrain.2.5 years supply.I need more dried goods,and only 1.5 years bog roll etc so far.I spent £500 over the weekend on meds,vits,fin,viagra  etc etc,3 years supply of everything.

Baby wipes ?

[GTM]

40 minutes ago, Noallegiance said:

Ideology, meet reality:

https://uk.investing.com/news/commodities-news/britain-makes-plans-to-keep-coalfired-power-plants-open-this-winter--govt-2658895

Am I missing something? There's only West Burton and Ratcliffe on Soar left with only West Burton due to close this year. That story reads like we've got a load of coal powered stations that were planned to be shut this year. Presumably what is actually going to happen is a team is going to go round West Burton was roles of gaffer tape to try and patch it up to get it through another winter.

[snaga]

1 hour ago, ThoughtCriminal said:

Printy printy? 🤔

as if Biden could actually hold a conversation, or remember it afterwards. So this is just theatre to go with what has already been decided?

[DurhamBorn]

2 hours ago, Democorruptcy said:

I still think we could do something with Imputed Labour. People should book how much in labour payments they have reduced GDP by, so we can add it back on. It's only similar to imputed rent that's never paid. 

You aren't knocking off the opportunity cost of that £500. The stuff you have bought might go up a few pounds but you are missing the dividends and capital gain you could have got investing it.

Its the it not being available im most bothered about,not so much the big price increases.Stop giving the BOE ideas.Nobody is working but GDP through the roof Imputed labour making pies.

[Democorruptcy]

1 hour ago, BadAlchemy said:

Spuds will be down about 80/90pc for me. Because I went a bit OTT with our planting this year. Mostly Desiree mains with some British Queen earlies. Can't wait!

Dig for Victory (victory over our corrupt rulers... the enemy within) !

That looks to have imputed labour potential.

567gm 33p

[King Penda]

Gold is very easy to hide inside anything ie washing machines anywhere near Or onto metal .speakers the list is endless but you only need to do that if people know you actually have it .

[belfastchild]

3 hours ago, DurhamBorn said:

I spent £500 over the weekend on meds,vits,

I did similar last week in a couple of runs to the wholesalers, bought up all the reduced sausages etc. 4 freezers full again. Bought another large box of washing powder myself so thats about 2 years supply for me and 4 years of dishwasher tabs, washing up liquid, bleach, 5l cleaning stuff etc etc.
Put in an online order for med stuff (general first aid, cuts, blisters etc type of thing) and got a message 2 days later that 2 of the items were out of stock and they were waiting for a resupply date. Stuff I thought I would just walk into tesco or asda and buy but not sure they have any more!
Just taken delivery of another 20 30l pots for the garden for spuds, peas etc etc. Trying out filling the patio early spring with stuff to make meals with during summer then fill the raised beds with spuds, leave over winter and put the pots away etc. Have a couple of the pop up plastic greenhouses for the same sort of thing. Bought some grow led strips a few years ago so will get on to making lights out of them later on in the year.

Also just taken delivery of 4kg of commercial potato fertilizer. Small amount required per m2 so have a few years supply. More as a supplement to compost heap etc as was noted in the gardening threads, commercial compost this year is shite compared to previous and for me around 30% dearer.

Did some expensive outdoor activities over the weekend, spoke to each of the providers. Business hasnt quite fallen off a cliff but they are limiting amount they do now (sort of turn up and just pay previously, now just book online so they know how many etc). 3 different providers in 3 different areas, all saying the same thing, that and not being able to get decent staff any more.
Still long queues at touristy/day out spots during daytime though for coffee/ice cream from vans etc. Although noticed in 4 different vans just one operator whereas before I noticed usually 2 people serving etc.

[baffledbyzirp]

Having started this controversy stating that gold presented storage difficulties I have watched the debate with interest. While I recognise the sense of concealing items of value around your home to prevent easy detection in the event of robbery, it also occurs to me that many of the suggestions resemble the plot of Treasure Island.

Have you guys considered what would happen in the event of a serious house fire or if you popped your clogs without leaving a treasure map behind or passing on the info to a loved one?  I have suffered theft at the hands of family members I thought incapable of such a thing. If it exists in physical form an asset represents a risk of theft especially if it is small and portable. You can mitigate risks by employing security measures but it can never be entirely eliminated. Hence my original suggestion that some people would continue to see property as a viable alternative to alternative investments even following a market correction. 

If you have something worth nicking there will be people prepared to nick it!

[King Penda]

7 minutes ago, belfastchild said:

I did similar last week in a couple of runs to the wholesalers, bought up all the reduced sausages etc. 4 freezers full again. Bought another large box of washing powder myself so thats about 2 years supply for me and 4 years of dishwasher tabs, washing up liquid, bleach, 5l cleaning stuff etc etc.
Put in an online order for med stuff (general first aid, cuts, blisters etc type of thing) and got a message 2 days later that 2 of the items were out of stock and they were waiting for a resupply date. Stuff I thought I would just walk into tesco or asda and buy but not sure they have any more!
Just taken delivery of another 20 30l pots for the garden for spuds, peas etc etc. Trying out filling the patio early spring with stuff to make meals with during summer then fill the raised beds with spuds, leave over winter and put the pots away etc. Have a couple of the pop up plastic greenhouses for the same sort of thing. Bought some grow led strips a few years ago so will get on to making lights out of them later on in the year.

Also just taken delivery of 4kg of commercial potato fertilizer. Small amount required per m2 so have a few years supply. More as a supplement to compost heap etc as was noted in the gardening threads, commercial compost this year is shite compared to previous and for me around 30% dearer.

Did some expensive outdoor activities over the weekend, spoke to each of the providers. Business hasnt quite fallen off a cliff but they are limiting amount they do now (sort of turn up and just pay previously, now just book online so they know how many etc). 3 different providers in 3 different areas, all saying the same thing, that and not being able to get decent staff any more.
Still long queues at touristy/day out spots during daytime though for coffee/ice cream from vans etc. Although noticed in 4 different vans just one operator whereas before I noticed usually 2 people serving etc.

God you guys make me look like an amuter

[belfastchild]

12 minutes ago, baffledbyzirp said:

Have you guys considered what would happen in the event of a serious house fire

 

Hence my original suggestion that some people would continue to see property as a viable alternative to alternative investments even following a market correction.

Read those two sentences together. Ive had to deal with house insurance for a relative following flooding. Friends had their kitchen burn down and it was also a nightmare and didnt get anywhere near covered by insurance.
Good luck now getting anything done, my neighbours have been waiting 3 months to get a broken double glazed window replaced.

Everything has its plusses and minuses. A little bit of each is a sensible precaution.

[WICAO]

6 hours ago, Barnsey said:

With land at a premium and house prices spiralling, not to mention the cost of living crisis, many people are trying to find ways to buy their first home that won't break the bank.

To that end, Pocket Living offers affordable homes to first-time buyers at prices at least 20 per cent below market value, but there's a catch.

Their recent 'Pocket Homes' build in Croydon has individual flats that measure 38sqm with a width of just 3.5metres - barely any bigger than a Tube train.

https://www.mirror.co.uk/money/household-bills/i-tried-new-pocket-home-27094393

I wonder if the buyers of these in East Croydon will come to regret their life choices...

Starting from £260k including the 20% off for local first time buyers 

No parking space/s, not eligible for a residents parking permit and an undisclosed service charge all in East Croydon for a bargain £6,842 per square meter.

WTAF have the government and Bank of England done to a basic human need...

[Starsend]

Interesting Bloomberg article this morning, apparently we're going to be Bongo Bongo land soon. No great surprise to me.

 

British Pound Risks Crisis Usually Seen in Emerging Markets, BofA Warns

Investors should hedge for an “existential” sterling crisis as the British currency faces struggles usually seen in emerging markets, according to Bank of America Corp. strategists. 

The Bank of England continuing to hike interest rates won’t be enough to rescue the pound, strategist Kamal Sharma said in a note. Instead, there’s a risk the nation’s current account deficit, a deterioration of its relationship with the European Union over Northern Ireland and questions around the central bank’s credibility combine to create a “perfect storm.” 

“Whilst not wishing to over-exaggerate GBP’s predicament as some kind of ‘end-of-days’ scenario, we are concerned that the increasing politicization of UK policy undermines the GBP in ways that would appear EM-like,” Sharma wrote in a note. “We sense something is changing in the UK, with the BOE increasingly hard to decipher and less transparent; a failure to discuss and acknowledge that Brexit has been a significant headwind to the supply side; and a sense that the BOE is losing control over its mandate.”

It’s not the first time in recent years Wall Street strategists have drawn parallels between the British currency and emerging markets. The comparison was made amid the UK’s tortuous exit from the European Union, where political headlines whipsawed sterling as its behavior broke from major peers. BofA strategists have likened the pound’s behavior to an EM currency in the past.

Political Attacks

The BOE has faced political attacks this month over its response to inflation, which is at its fastest rate in four decades. Despite four interest-rate increases since December and money markets bracing for more in each of its next five decisions, the pound is the third-worst performing major currency this year. 

“At a point of increased uncertainty over domestic growth, signs of regional fragmentation and Northern Ireland-related risks, the UK will find it increasingly difficult to attract portfolio flows to finance a widening current-account deficit,” said Citigroup Inc strategist Vasileios Gkionakis, who recommends betting against the pound versus the euro.

Read: Pound Fights for Reprieve as Economy Flails

BofA’s Sharma stresses he is not saying the pound is an emerging-market currency, but rather that investors are increasingly viewing the currency as taking on developing-nation characteristics. He recommends clients hedge for the risk of “a current-account-led crisis” via wing-type structures.

“The UK current account deficit is not a new phenomenon. But what has changed has been liquidity and trading conditions around GBP and one of the most challenging macro/policy backdrops in almost a generation,” he said. “What strikes us, despite GBP being one of the most actively traded currencies in the world, is how it has regularly succumbed to liquidity black holes since 2016.”

©2022 Bloomberg L.P.

[WICAO]

3 hours ago, Noallegiance said:

Ideology, meet reality:

https://uk.investing.com/news/commodities-news/britain-makes-plans-to-keep-coalfired-power-plants-open-this-winter--govt-2658895

Here in Australia it was announced today that AGL (I believe Australia's largest electrical generator but also everything up to the end customer) will not be demerging its coal focused generation business due to insufficient shareholder support.  Then to go with that announcement it was announced that the CEO and Chairman had resigned.

[WICAO]

20 minutes ago, Starsend said:

Interesting Bloomberg article this morning, apparently we're going to be Bongo Bongo land soon. No great surprise to me.

 

British Pound Risks Crisis Usually Seen in Emerging Markets, BofA Warns

Investors should hedge for an “existential” sterling crisis as the British currency faces struggles usually seen in emerging markets, according to Bank of America Corp. strategists. 

The Bank of England continuing to hike interest rates won’t be enough to rescue the pound, strategist Kamal Sharma said in a note. Instead, there’s a risk the nation’s current account deficit, a deterioration of its relationship with the European Union over Northern Ireland and questions around the central bank’s credibility combine to create a “perfect storm.” 

“Whilst not wishing to over-exaggerate GBP’s predicament as some kind of ‘end-of-days’ scenario, we are concerned that the increasing politicization of UK policy undermines the GBP in ways that would appear EM-like,” Sharma wrote in a note. “We sense something is changing in the UK, with the BOE increasingly hard to decipher and less transparent; a failure to discuss and acknowledge that Brexit has been a significant headwind to the supply side; and a sense that the BOE is losing control over its mandate.”

It’s not the first time in recent years Wall Street strategists have drawn parallels between the British currency and emerging markets. The comparison was made amid the UK’s tortuous exit from the European Union, where political headlines whipsawed sterling as its behavior broke from major peers. BofA strategists have likened the pound’s behavior to an EM currency in the past.

Political Attacks

The BOE has faced political attacks this month over its response to inflation, which is at its fastest rate in four decades. Despite four interest-rate increases since December and money markets bracing for more in each of its next five decisions, the pound is the third-worst performing major currency this year. 

“At a point of increased uncertainty over domestic growth, signs of regional fragmentation and Northern Ireland-related risks, the UK will find it increasingly difficult to attract portfolio flows to finance a widening current-account deficit,” said Citigroup Inc strategist Vasileios Gkionakis, who recommends betting against the pound versus the euro.

Read: Pound Fights for Reprieve as Economy Flails

BofA’s Sharma stresses he is not saying the pound is an emerging-market currency, but rather that investors are increasingly viewing the currency as taking on developing-nation characteristics. He recommends clients hedge for the risk of “a current-account-led crisis” via wing-type structures.

“The UK current account deficit is not a new phenomenon. But what has changed has been liquidity and trading conditions around GBP and one of the most challenging macro/policy backdrops in almost a generation,” he said. “What strikes us, despite GBP being one of the most actively traded currencies in the world, is how it has regularly succumbed to liquidity black holes since 2016.”

©2022 Bloomberg L.P.

Argentina on Thames?