Credit deflation and the reflation cycle to come (part 5)

[Axeman123]

An interesting take on the real outcome of the recent bank turmoil.

This has me coming around to the DDMB view that the deflationary effects on lending will outweigh any inflationary ones from the bailouts.

[Long time lurking]

10 minutes ago, Axeman123 said:

the deflationary effects on lending will outweigh any inflationary ones from the bailouts.

Stagflation like we have never seen before ,the USA will see the worse in the long run 

[Herd]

18 hours ago, Plan-b said:

Nearly yes, not the house though in the UK they are denominated in pounds, they're falling in value in 2 ways, by value and by currency and they cost in upkeep..

Pms are denominated in dollars, a really handy fact.

It really doesn`t matter what denomination tangible assets are valued in , if the value given is in the ether/on a screen....dictated by your local estate agent , or showing you on the screen of a laptop  . The value is not tangible . It is not real .

You cannot put the value of these assets into a three dimensional reality , or touch it .

Now a house in any country you can. You are able to touch it feel it and get value from it . (value by living in it or maybe renting it out.....that is real tangible value)

Do we all really trust the systems in play so much .? I do not . Personally I only place value in three dimensional objects . !

 

[Plan-b]

19 minutes ago, Long time lurking said:

For the CBDC ,you will own nothing brigade 

China man bad ,it`s now official,that`s what all the coordinated propaganda has been all about  

 

Interesting that she said 'America's enemies' Twice 

[janch]

7 hours ago, M S E Refugee said:

Thungela to pay £1.42 per share dividend after South African withholding tax.

Despite the high divi they are having problems getting the coal to the docks so the share price fell even further this morning

https://uk.finance.yahoo.com/news/africa-thungela-seeks-more-coal-104654980.html

Thungela’s coal shipments fell 10% to about 13 million tons last year, even as higher prices buoyed the miner’s revenue and profit. Those sales are expected to fall further as Transnet grapples with a shortage of locomotive spare parts and vandalism on the line that runs from coal fields in Mpumalanga to Richards Bay Coal Terminal on the east coast.

They are looking to diversify to other locations but there is no shortage of coal at their current mine:

Thungela has 3.2 million tons of stockpiled coal at its mines and another 400,000 tons at the port.

It's a crying shame

[Plan-b]

37 minutes ago, Herd said:

It really doesn`t matter what denomination tangible assets are valued in , if the value given is in the ether/on a screen....dictated by your local estate agent , or showing you on the screen of a laptop  . The value is not tangible . It is not real .

You cannot put the value of these assets into a three dimensional reality , or touch it .

Now a house in any country you can. You are able to touch it feel it and get value from it . (value by living in it or maybe renting it out.....that is real tangible value)

Do we all really trust the systems in play so much .? I do not . Personally I only place value in three dimensional objects . !

 

Thanks for your reply, You'll often see on here 'house prices adjusted for inflation' which also means a loss of purchasing power of, in this case sterling. No idea what the three dimensional aspect is but were' talking financial aspects here.

Yes a house has utility but thats another story ...

Edited March 27, 2023 by Plan-b

[Plan-b]

5 minutes ago, janch said:

Despite the high divi they are having problems getting the coal to the docks so the share price fell even further this morning

https://uk.finance.yahoo.com/news/africa-thungela-seeks-more-coal-104654980.html

Thungela’s coal shipments fell 10% to about 13 million tons last year, even as higher prices buoyed the miner’s revenue and profit. Those sales are expected to fall further as Transnet grapples with a shortage of locomotive spare parts and vandalism on the line that runs from coal fields in Mpumalanga to Richards Bay Coal Terminal on the east coast.

They are looking to diversify to other locations but there is no shortage of coal at their current mine:

Thungela has 3.2 million tons of stockpiled coal at its mines and another 400,000 tons at the port.

It's a crying shame

Yes its a shame .. the country is sadly falling apart and it's reflected in TGAs share price.

[Democorruptcy]

7 hours ago, Pip321 said:

Have been thinking about this because I also have some miners. I think I am going to stick with gold mining 'funds' or 'EFTs' for the larger part....because I believe overall they will do well, however as individual businesses they all have some risk of running out of cash before they get the stuff out of the ground. 

Will stick with Fres but its only a relatively small amount....but the rest is Blackrock Gold (because its the only option in my SIPP) and GJGB in the ISA. 

However been thinking more and more about a physical Gold Fund. There are a few out there....and I am not hugely worried about cost (well, depending on how much it is of course) but more reassurance that my money is being backed by something other than just fiat. I see these type of physical funds as a hedge for a sizeable amount of money not really as a mad max scenario....I would have reassessed and probably own baked beans before we got there. 

• Aberdeen Standard Physical Gold Shares ETF [SGOL] ...
• VanEck Merk Gold Trust [OUNZ] ...
• SPDR Gold Shares [GLD] ...

Any thoughts re physical funds?

If you want physical gold in a SIPP and aren't worried about cost, you could own actual physical via such as bullionvault, royal mint

[belfastchild]

54 minutes ago, Axeman123 said:

This has me coming around to the DDMB view that the deflationary effects on lending will outweigh any inflationary ones from the bailouts.

Had a brief chat with someone today about all this and they threw out one of their concerns in that any bank bailout/takeover would also impact previous low interest rate loans. Nothing concrete, just a concern to not take on any new debt or use more of what they had borrowed in case it does get 'renegotiated'.

We had history of that here with nama. No tears now but some people with btls were told to repay their loans immediately, of course trying to get another loan was almost impossible at the time due to availability and drop in prices.

[Lightscribe]

4 hours ago, nirvana said:

Maybe you we’re right all along Nirvana, even silver and gold won’t save us. 

[Bobthebuilder]

2 minutes ago, Lightscribe said:

Maybe you we’re right all along Nirvana, even silver and gold won’t save us. 

GDXJ NYSE listing is a classic example of @nirvana up and down spikey bits today, not the Lords work, but probably green alien robots.

[nirvana]

7 minutes ago, Bobthebuilder said:

GDXJ NYSE listing is a classic example of @nirvana up and down spikey bits today, not the Lords work, but probably green alien robots.

they sold 2k bucks on friday.......I think I read Gold normally dips on monday.......and I think some options expiry tomorrow....

I think some geeks are using chatgpt to work out options stuff too

I used to be able to code but a bit above my paygrade now

 

[sancho panza]

#debt deflation cometh series

 

this is a hard anecdotal to write but this feels the place to put it after all these years. particuarly @spygirl as he has been banging the drum on this one for a long time

There are going to be laods like this coming and for all thsoe waiting for a cheap hosue,they're coming.

Basically an old friend of my Mums has been in touch after many years and asked her for advice/help with their BTL empire.

She bought 20 hosues/flats around the country in 2006-2008,owes about £3mn.looks like all IO,current rental income circa £15k.Was ok in 2019 with mortgage costs circa £6k.Now mrotgage costs circa £18k and with a couple of empty up for sale short on the monthly bill.

Bascially,now facing repossession and bankruptcy,including repossession of their main family home which is still mrotgaged(head hits table)......

The hosues are all over the country in the manner of southern investors in the north around that time.Apparently,she believes equity to be £500k but also tells my Mum that she's been to the 'buy now' companies but the offers are 'derisory' circa 60% of EA valueation and well below mrotgage debt.She's bascially looking to get together a group of investors to group fund her.The CEO (my Mum) was incredulous at the figures.

Having been sent the email for my view the following leapt out at me

'The model provides a good living at 3%.'

Words fail me.Genuienly,how did these people get to borrwo £3mn froma regulated institution? For anyone wondering why we're in the mess we're in you jsut need to read that.

 

 

and let's consider the repercussions here for UK banks that are on the hook here.These are legacy loans from the last financial crisis that should have been cleaned up then.The fact that they're coming back to haunt the banks now should be a worry for any Brit about what's coming.

I know on here we understand the benefit of lwoer hosue rpices for society but we know there'll be transitional pain until the marekt finds it's new level.But our economy is clearly headed for the rocks.

The bankruptcy rpocess looks like it's been forced by HMRC as I suspect section 24 caught them off guard.And with 20 houses the banks would be wary of initiating I suspect

I realsie tehy won't find much sympathy down here but lsoing everything at 70 is going to be tough to watch.a warning to us all to be careful out there.I know there's a few on here who like me, who like some elverage on their trades eg call options/scottish play (a leveraged play on hope).

For anyone thinking a credit deflation isn't coming to the UK,I'd think again.There are loads of these toxic laons about to come home to roost.

 

 

 

 

 

 

 

 

 

 

 

 

[nirvana]

22 minutes ago, Lightscribe said:

Maybe you we’re right all along Nirvana, even silver and gold won’t save us

don't care mate, I'm off on a 787 Dreamliner and I'm gonna talk to the plants again

[Loki]

17 minutes ago, nirvana said:

don't care mate, I'm off on a 787 Dreamliner and I'm gonna talk to the plants again

More like a 420 Dreamboat 

[Bobthebuilder]

@sancho panza That sounds awful, I bet there's loads who are going to be facing this soon. Why someone would buy a load of BTLs around the country and not local baffles me, not good business sense at all, logistics for one. The biggest and best BTL operation I know have all their properties in a close area to each other, they use local trades and remain loyal, that makes a lot more sense to me.

[feed]

29 minutes ago, sancho panza said:

#debt deflation cometh series

 

this is a hard anecdotal to write but this feels the place to put it after all these years. particuarly @spygirl as he has been banging the drum on this one for a long time

There are going to be laods like this coming and for all thsoe waiting for a cheap hosue,they're coming.

Basically an old friend of my Mums has been in touch after many years and asked her for advice/help with their BTL empire.

She bought 20 hosues/flats around the country in 2006-2008,owes about £3mn.looks like all IO,current rental income circa £15k.Was ok in 2019 with mortgage costs circa £6k.Now mrotgage costs circa £18k and with a couple of empty up for sale short on the monthly bill.

Bascially,now facing repossession and bankruptcy,including repossession of their main family home which is still mrotgaged(head hits table)......

The hosues are all over the country in the manner of southern investors in the north around that time.Apparently,she believes equity to be £500k but also tells my Mum that she's been to the 'buy now' companies but the offers are 'derisory' circa 60% of EA valueation and well below mrotgage debt.She's bascially looking to get together a group of investors to group fund her.The CEO (my Mum) was incredulous at the figures.

Having been sent the email for my view the following leapt out at me

'The model provides a good living at 3%.'

Words fail me.Genuienly,how did these people get to borrwo £3mn froma regulated institution? For anyone wondering why we're in the mess we're in you jsut need to read that.

 

 

and let's consider the repercussions here for UK banks that are on the hook here.These are legacy loans from the last financial crisis that should have been cleaned up then.The fact that they're coming back to haunt the banks now should be a worry for any Brit about what's coming.

I know on here we understand the benefit of lwoer hosue rpices for society but we know there'll be transitional pain until the marekt finds it's new level.But our economy is clearly headed for the rocks.

The bankruptcy rpocess looks like it's been forced by HMRC as I suspect section 24 caught them off guard.And with 20 houses the banks would be wary of initiating I suspect

I realsie tehy won't find much sympathy down here but lsoing everything at 70 is going to be tough to watch.a warning to us all to be careful out there.I know there's a few on here who like me, who like some elverage on their trades eg call options/scottish play (a leveraged play on hope).

For anyone thinking a credit deflation isn't coming to the UK,I'd think again.There are loads of these toxic laons about to come home to roost.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The question that comes to my mind is

Who will be the new landlord(s)

Edited March 27, 2023 by feed

[Long time lurking]

1 hour ago, Plan-b said:

Interesting that she said 'America's enemies' Twice 

First they told you it was all about a deadly virus then they told you they were defending the Ukraine's sovereignty now they are telling you what CBDC`s are going to do to you ,yet people believe this from the very same people to

It`s been obvious for a long time there was a narrative being built ,it was all to coordinated ,and never challenged by any form of authority or the MSM 

Edited March 27, 2023 by Long time lurking

[Plan-b]

40 minutes ago, sancho panza said:

#debt deflation cometh series

 

this is a hard anecdotal to write but this feels the place to put it after all these years. particuarly @spygirl as he has been banging the drum on this one for a long time

There are going to be laods like this coming and for all thsoe waiting for a cheap hosue,they're coming.

Basically an old friend of my Mums has been in touch after many years and asked her for advice/help with their BTL empire.

She bought 20 hosues/flats around the country in 2006-2008,owes about £3mn.looks like all IO,current rental income circa £15k.Was ok in 2019 with mortgage costs circa £6k.Now mrotgage costs circa £18k and with a couple of empty up for sale short on the monthly bill.

Bascially,now facing repossession and bankruptcy,including repossession of their main family home which is still mrotgaged(head hits table)......

The hosues are all over the country in the manner of southern investors in the north around that time.Apparently,she believes equity to be £500k but also tells my Mum that she's been to the 'buy now' companies but the offers are 'derisory' circa 60% of EA valueation and well below mrotgage debt.She's bascially looking to get together a group of investors to group fund her.The CEO (my Mum) was incredulous at the figures.

Having been sent the email for my view the following leapt out at me

'The model provides a good living at 3%.'

Words fail me.Genuienly,how did these people get to borrwo £3mn froma regulated institution? For anyone wondering why we're in the mess we're in you jsut need to read that.

 

 

and let's consider the repercussions here for UK banks that are on the hook here.These are legacy loans from the last financial crisis that should have been cleaned up then.The fact that they're coming back to haunt the banks now should be a worry for any Brit about what's coming.

I know on here we understand the benefit of lwoer hosue rpices for society but we know there'll be transitional pain until the marekt finds it's new level.But our economy is clearly headed for the rocks.

The bankruptcy rpocess looks like it's been forced by HMRC as I suspect section 24 caught them off guard.And with 20 houses the banks would be wary of initiating I suspect

I realsie tehy won't find much sympathy down here but lsoing everything at 70 is going to be tough to watch.a warning to us all to be careful out there.I know there's a few on here who like me, who like some elverage on their trades eg call options/scottish play (a leveraged play on hope).

For anyone thinking a credit deflation isn't coming to the UK,I'd think again.There are loads of these toxic laons about to come home to roost.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If her IO mortgage(s) is like others I've encountered then part of the mortgage conditions would have been to have and maintain a capital repayment plan.  

Without this in place and funded that would mean being in default of their mortgage conditions with nothing like this to show after nearly twenty years and now in a falling market it's possible she may not be able to refinance hence the derisory offer so far.

Many IO mortgages are in technical default.

[Axeman123]

https://archive.is/uYNV4

CNBC predicting gold to new ATH, as high as 2600 USD/oz!

[Wight Flight]

7 hours ago, Cattle Prod said:

Back when oil and gas was a valued part of UK industry, Sun Oil wrote to the Queen about a field they'd discovered:

They don't make them like her any more, which is the nub of the problem really.

Incidentally, Balmoral was shut down and decommissioned after the covid crash. It was old, but it didn't have to happen.

Oddly i recently tried to register a company with 'King' in the name.

Companies house declined it, and I had to seek permission from the Cabinet Office (which was granted)

[Long time lurking]

 

[nirvana]

38 minutes ago, Loki said:

More like a 420 Dreamboat 

PARRR-TYYYYYY

 

[leonardratso]

king bong ltd

king dong from the 70's maybe

 

[Wight Flight]

51 minutes ago, Plan-b said:

If her IO mortgage(s) is like others I've encountered then part of the mortgage conditions would have been to have and maintain a capital repayment plan.  

Without this in place and funded that would mean being in default of their mortgage conditions with nothing like this to show after nearly twenty years and now in a falling market it's possible she may not be able to refinance hence the derisory offer so far.

Many IO mortgages are in technical default.

I think that only applies to residential mortgages.

BTL are different as they assume sale of the asset to pay off the debt at end of term.