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

[Democorruptcy]

1 hour ago, marceau said:

Just posted on another thread, but I'll repost here. This Lifetime ISA exemption for bennies is insane.

£4000 per year exemption plus a 25% uplift by govt. So sign up for LISA at 18, stick in £4000 each year, get your £128k at 50, plus the govt gives you an extra 32k. 

So a £160k deposit all paid for by the govt and you claim bennies for the whole period while building it up. And that's assuming they don't inflation link the amounts.

I can't believe it. Not even Brown would have come up with something so stupid.

Edit: This effectively raises the capital limits on UC from 16k to 160k PLUS anything that is placed into a SIPP. Why the fuck would anyone work when you can get all of that AND claim bennies to cover all of your living expenses.

To be fair if someone 18 starts putting £4k a year in now for 32 years, when they get the £160k in 2054, it will only pay the average council tax bill that year.

[marceau]

14 minutes ago, Castlevania said:

What if you generate some capital gains? Let’s say you opened one 5 years ago and had now put in £20k; had £5k topped up from government and you’d made a further 100% gains so have £50k. Can you still claim benefits? Asking for a friend obvs.

If what they are proposing passes, anything inside the wrapper is 100% disregarded, so yes.

The calcs at the top are WORST case, cash only. Any growth and/or inflation linkage in the allowances takes the numbers even higher.

[King Penda]

54 minutes ago, Noallegiance said:

Two things spring to mind:

Timing

and

Holy crap

 

They haven't said "They're fine". They've said "Yeah they can go bust. No biggy".

Bank run lol

[Democorruptcy]

9 minutes ago, Castlevania said:

They’re assuming the loan books are all great. I’m not convinced of that.

A lot have the liabilities for riskiest part of the loan now backed by the governbankment. Help to Buy, covid loans, mortgage guarantee and now they are planning to make the covid loan arrangements permament. Don't forget that during covid, a lot of existing loans will probably have been consolidated into a loan backed by the governbankment. 

[Nomad]

I find the latest housing policy from the Tories quite incredulous, they are now proud to be saying let the workers buy houses for the bennies! They appear to be totally ignorant to the reasons why they were elected in 2019. This govt seem to be more left wing than labour (highest taxation since the 40s, redistribution of assets by the new help the bennie to buy scheme etc.). 

They should be addressing the issues of today, i.e. employers can't get workers as the govt hand outs are too high, and they can't compete. they have the perfect situation to cut benefits in real terms over the next few years, but it appears they don't have the balls to do it. If the UKs economy is going to recover we need to increase production, at this rate it is only going to go one way, the workers will be left behind with real terms pay cuts while the bennies will still be in the trough telling the workers they need to work harder so they can have their "pay rises". This govt is a joke.

[HousePriceMania]

7 minutes ago, Nomad said:

I find the latest housing policy from the Tories quite incredulous, they are now proud to be saying let the workers buy houses for the bennies! They appear to be totally ignorant to the reasons why they were elected in 2019. This govt seem to be more left wing than labour (highest taxation since the 40s, redistribution of assets by the new help the bennie to buy scheme etc.). 

They should be addressing the issues of today, i.e. employers can't get workers as the govt hand outs are too high, and they can't compete. they have the perfect situation to cut benefits in real terms over the next few years, but it appears they don't have the balls to do it. If the UKs economy is going to recover we need to increase production, at this rate it is only going to go one way, the workers will be left behind with real terms pay cuts while the bennies will still be in the trough telling the workers they need to work harder so they can have their "pay rises". This govt is a joke.

I think people need to start to accept that we do not have democracy now, if we ever did.

The country is being run for the benefit of the bankers/rich/queen/land owners/corporations and MPs.

The rest of us are slaves.

 

[marceau]

30 minutes ago, Democorruptcy said:

To be fair if someone 18 starts putting £4k a year in now for 32 years, when they get the £160k in 2054, it will only pay the average council tax bill that year.

If it's related to bennies, it will be inflation linked.

[Errol]

Hargreaves and abrdn charts still not looking good. Seeking an entry point but will hold off given that new lows seem to be coming.

[Yadda yadda yadda]

47 minutes ago, King Penda said:

Bank run lol

You're ahead of the game on bank runs. The benefits savings limit forces you to keep money outside the banking system.

[Democorruptcy]

19 minutes ago, HousePriceMania said:

I think people need to start to accept that we do not have democracy now, if we ever did.

The country is being run for the benefit of the bankers/rich/queen/land owners/corporations and MPs.

The rest of us are slaves.

 

Start to accept? I'm not on the electoral roll or been employed to pay tax for nearly 20 years (not claimed bennies either). Luckily people have short memories and another distraction will be along shortly, so this indignation at the latest governbankment policies will soon be forgotten. It's not like the same thing hasn't been going on for ages. We had inflation over 5% in 2011, interest rates stayed at 0.5%, the bennies folk got their index linked rises while wages for the grafters were still suppressed from the GFC. Now get back to work.

[King Penda]

7 minutes ago, Yadda yadda yadda said:

You're ahead of the game on bank runs. The benefits savings limit forces you to keep money outside the banking system.

My target amount by Xmas is not looking possible to be fair I will have to eat humble pie with that experiment 

[King Penda]

43 minutes ago, HousePriceMania said:

I think people need to start to accept that we do not have democracy now, if we ever did.

The country is being run for the benefit of the bankers/rich/queen/land owners/corporations and MPs.

The rest of us are slaves.

 

I’ve always said don’t trust the system and that’s from when I was working 55/60 hours a week which I did for 9 straight years before things went tits up

[HousePriceMania]

1 hour ago, King Penda said:

Bank run lol

[King Penda]

6 minutes ago, HousePriceMania said:

Panic

[marceau]

Now that any benefit claiming couple are going to have a govt-provided £320k deposit to spunk on a house at age 50, should we assume that the LISA max property purchase amount (currently £450k, surely to rise in line with inflation) will be the minimum price for the average 2-bed house going forward?

[JMD]

3 hours ago, DurhamBorn said:

Looking at Bojo's speech yesterday 3 things come from it.First,he is finished.2nd BTL is finished outside of big providers and very low leverage owners.3rd the government know there is zero point working and their only answer to tackle that is to take even more off workers and give to other workers to keep them working.The benefits to bricks policy wont work,its a disaster.Banks wont lend on it.Housing benefit is slashed once kids are 18 etc,no single person working full time would get any housing benefit.Mass immigration and bennies are the systemic risks to the UK (they drive the printing) yet Bojo's plan means immigrants on bennies with 5 kids could buy a house from day 1 paid for by workers who cant afford one and inflation on everyone else.

Its incredible to see such lunacy from them,horrific in every way.However it does show they know the system is fucked without massive action.Work doesnt pay and saving doesnt pay.I think Brown was now only our 2nd worst PM.

I listened to LBC last night (it's lefty tripe but useful to gauge the public zeitgeist) the thing is several people phoned in to express real anger and made the very same points you make DB about this policy attracting yet more immigrants into country, and also about workers paying for the non-worker to own their own home whilst the worker themself is effectively put even further back to the end of the line. The general public appear well aware that non of this makes sense or is even remotely fair.                                                                                                 I agree the government knows the economics is broke. I think that's why they have been in political stasis for months. And that also goes for the labour party. However the favoured policies now appear to be emerging. So yesterday's policy, which also hinted at introducing new low interest mortgages, ie property props galore incoming. Then I bet the six month trial for a 4-day week will be rolled out. Plus it looks frighteningly clear that transfer payments, including new ones for food/fuel, will be expanded. Moreover the instructions are also breaking, NHS, social services, police - their failings are being highlighted regularly it seems to me.                                                                                                                                 So am wondering if things are about to fall apart sooner than the thread expected - Or is this a blip and society/politics will continue to limp along until end of the decade?... I guess I'm trying to decipher what I thought would be a 'roaring twenties', but now increasingly looks (Ukraine/Russia, food/energy...) to become a 'ravaged twenties'.

[feed]

1 hour ago, marceau said:

18 year old could theoretically work a self-employed 35 hour week in a job that pays £44k, not pay a penny of tax, AND get full UC entitlement, if they could afford to live on the UC amounts alone. They could do this for 21 years to accumulated the full LTA for the SIPP at just over the £1 million mark and reduce earnings to £4K for the remaining 11 years to accumulate the full £160k in the LISA.

So at 50 you have the full pension LTA, plus a nice £160k deposit from the govt, with no tax ever paid, and on full UC the whole time. This is for a single person, numbers obviously go up with kids, disabilities etc..

Am I wrong?

Edit: They would need a way around the minimum income floor, which of course for the pro bennies types doesn't seem to be a problem at all.

Appreciate that this is a theoretical, but i think the probability of an 18 year old earning 44k and effectively locking it up until they're 50 is nil. 

 

[DoINeedOne]

Been looking at Admiral its an interesting business when you look at it one thing they do say in there report is that they expect lower profit in 2022 and with their half year results being released in August i wonder if it will drop more 

 

The reason for the expected lower profit seems to be that the claims ratio during covid etc was low so more of the premium income was kept by admiral, but as life gets back to normal and more cars etc.. on the road they expect claim ration to increase

 

 

 

 

[MrXxxx]

Just been on a HSBC online question utility. Once I had typed my message it stated that "Due to high demand it can be up to TWO hours before one of our agents can answer your query"...?!!! are they serious?!!!!....looks as thought HSBC's record profits are not being spent on customer service....what a bunch of jokers!

[Calcutta]

IMO we're getting excited about fa. Bojo knows the economy is fucked, he's just stringing things along with his little pantomime while the elite exit their positions and get ready for the crash. Once it hits anything that's been said or done in the last few years will be forgotten about. It's the ridiculous policies they come up with to save us from their crash that we need to worry about. 

[Noallegiance]

 

Ignore the headline.

This is fascinating from the pov of a UK citizen.

[DurhamBorn]

18 minutes ago, JMD said:

I listened to LBC last night (it's lefty tripe but useful to gauge the public zeitgeist) the thing is several people phoned in to express real anger and made the very same points you make DB about this policy attracting yet more immigrants into country, and also about workers paying for the non-worker to own their own home whilst the worker themself is effectively put even further back to the end of the line. The general public appear well aware that non of this makes sense or is even remotely fair.                                                                                                 I agree the government knows the economics is broke. I think that's why they have been in political stasis for months. And that also goes for the labour party. However the favoured policies now appear to be emerging. So yesterday's policy, which also hinted at introducing new low interest mortgages, ie property props galore incoming. Then I bet the six month trial for a 4-day week will be rolled out. Plus it looks frighteningly clear that transfer payments, including new ones for food/fuel, will be expanded. Moreover the instructions are also breaking, NHS, social services, police - their failings are being highlighted regularly it seems to me.                                                                                                                                 So am wondering if things are about to fall apart sooner than the thread expected - Or is this a blip and society/politics will continue to limp along until end of the decade?... I guess I'm trying to decipher what I thought would be a 'roaring twenties', but now increasingly looks (Ukraine/Russia, food/energy...) to become a 'ravaged twenties'.

Im trying to work out if the things i thought certain after this cycle will instead happen in this one.Its clear everything is failing.No government department works,bennies out of control,immigration getting worse etc.However the BOE is cut off from monetising debt at the moment,so that should stave off systemic collapse,but it could be we see a slow trainwreck instead.The main worry is the government have shown they want to keep the people on the state tit protected from inflation,but without the BOE only direct wealth tax etc can pay for it.I expect by late summer we will see huge amounts of small companies stopping trading.I think rates will be 3% next year,maybe 3.5%.

[DurhamBorn]

10 minutes ago, DoINeedOne said:

Been looking at Admiral its an interesting business when you look at it one thing they do say in there report is that they expect lower profit in 2022 and with their half year results being released in August i wonder if it will drop more 

 

The reason for the expected lower profit seems to be that the claims ratio during covid etc was low so more of the premium income was kept by admiral, but as life gets back to normal and more cars etc.. on the road they expect claim ration to increase

 

 

 

 

I just start ladders in the ones i want then forget about it.Much easier than trying to pick bottoms etc.I am always happy to be down on my first ones,as it means im getting more cheaper.I tend to think a good outcome is getting a holding from 70% to 80% of what i wanted and being down 15% before divis when things turn .Very rare i have a big winner without being down 15% at some point.Iv always done it this way and find it works for me over any other way.

[Axeman123]

23 minutes ago, JMD said:

...I agree the government knows the economics is broke. I think that's why they have been in political stasis for months. And that also goes for the labour party. However the favoured policies now appear to be emerging. So yesterday's policy, which also hinted at introducing new low interest mortgages, ie property props galore incoming. Then I bet the six month trial for a 4-day week will be rolled out. Plus it looks frighteningly clear that transfer payments, including new ones for food/fuel, will be expanded....

Alternately, the government knows the economy is failing and is flailing around trying to apply the failed tools of the 2008- era to this novel set of problems. The political inertia IMO is shock that every intervention they can think of (all basically variations on money printing) will just hasten the implosion. There have to be sane people with power somewhere, eg the sabotage of the May sellout on Brexit, who will see that this is becoming an existential threat to the country and move for rational actions. I would suggest that we are in one of the early stages of the Kubler Ross cycle, you know...shock-fear-anger-bargaining etc. BJ looked pretty startled by something doing his speach yesterday, and even set out a lot of rational lower taxes market forces stuff at first.

[belfastchild]

9 minutes ago, MrXxxx said:

Just been on a HSBC online question utility. Once I had typed my message it stated that "Due to high demand it can be up to TWO hours before one of our agents can answer your query"...?!!! are they serious?!!!!....looks as thought HSBC's record profits are not being spent on customer service....what a bunch of jokers!

2 minutes ago, DurhamBorn said:

No government department works,

I lodged a formal query with HMRC in April (by letter - they couldnt do anything for me over the phone although did admit it looked like they made an error). They texted me 2 weeks later to acknowledge it and to say they would deal with it in 2 weeks.
Got a text today to say they are really really busy and would get back to me.

There are, of course, answers on the internet but I want a written official reply from HMRC (and a refund).

Chatted to another small business owner at the start of the week, all about bennies, nobody in officialdom answering calls, automated letters demanding immediate payment etc etc, they just dont think its worth the hassle any more.