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

[Pip321]

2 hours ago, sancho panza said:

Mrs P has about ten years in of a final salary scheme that closed in 2022.

The only prolbem is that when I read the small print the inflation linkage is only up to 2.5% CPI.Firstly that's pretty dire in an era when 5% may be consdiered low and sustained double figure runs quite possible.

I know you've said before that it's ahrd to do due to regulatory pressure but is there a legal right people have to trsnfer out do you know?

Appreciate if anyone else knows. iirc @Democorruptcy did a final salary transfer as well.

There should be a legal right to your money but there is a real mix of our modern society issues that make stuff like this impossible……and it’s educated and well informed customers like you who ends up paying.

Firstly fuckwit customers trying to sue institutions and the government rather than taking responsibility for they actions don’t help.

Secondly a government who pretends they are protecting people by insisting they MUST use an IFA to transfer from a DB pension worth over £30k….however an IFA is probably the person the customer needed protecting from.

Thirdly a corrupt industry made over complex so the industry itself makes more money for itself than it does for its customers. Anyone know a poor IFA?

It’s all shite and I guess you have no legal right….because the laws are not there for your benefit. The government needs a pension industry, it gains from it and it’s their money first and then yours.

I used an IFA who was receptive but I stupidly still use them for an expensive chat each year. I will ditch them but holding on because I want to move my SIPP and he might come in handy for research purposes.

Hope you can get sorted….

[MrXxxx]

On 10/06/2023 at 08:13, crashmonitor said:

Interest Rate Armegeddon UK..... I came across this yesterday. I was surprised he had gotten so many youtube hits. But his delivery is quite amusing. He is a retired London trader but he sounds like a mad American scientist that goes into Beavis and Butt head style giggles as he lays on the doom.

 

Did get me thinking why the heck aren't traders going for a 1992  style turkey shoot ( led by George Soros) whence base rates jumped from 10 to 15% overnight.  Is there a Bankers code that means Central Banking turkeys like Bailey are exempt. Come on we are in a league of our own along with Turkey ( base rate 8.5%)  and Argentina (97%) in the incompetence stakes.

 

 

 

Interesting comparison this gentleman makes at the beginning about mortgages being like bonds..lets take this a bit further....what is the historical real return [1900-2018] on both in the UK?

Bonds ~1.8

Houses ~1.8

[https://www.credit-suisse.com/media/assets/corporate/docs/about-us/media/media-release/2018/02/giry-summary-2018.pdf]

 

Mmmm, so if any asset varies around a mean this means that following a period of being above the mean it usually corrects by dropping through and below the mean before starting the cycle again...now, what has been the return on houses during the ten year period of near zero inflation i.e. real return?

~2.5%, so for the last ten years they have been 0.7% above their LTA EVERY year!

If we go back for the last 30 years its been:

~3%, so for the last thirty years they have been 1.2% above their LTA EVERY year!

[https://monevator.com/historical-uk-house-prices/]
 

Now unless we are still climbing up the peak, 'we' and property prices are only going in one direction to correct to the LTA!

Edited June 12, 2023 by MrXxxx

[DurhamBorn]

13 minutes ago, Pip321 said:

There should be a legal right to your money but there is a real mix of our modern society issues that make stuff like this impossible……and it’s educated and well informed customers like you who ends up paying.

Firstly fuckwit customers trying to sue institutions and the government rather than taking responsibility for they actions don’t help.

Secondly a government who pretends they are protecting people by insisting they MUST use an IFA to transfer from a DB pension worth over £30k….however an IFA is probably the person the customer needed protecting from.

Thirdly a corrupt industry made over complex so the industry itself makes more money for itself than it does for its customers. Anyone know a poor IFA?

It’s all shite and I guess you have no legal right….because the laws are not there for your benefit. The government needs a pension industry, it gains from it and it’s their money first and then yours.

I used an IFA who was receptive but I stupidly still use them for an expensive chat each year. I will ditch them but holding on because I want to move my SIPP and he might come in handy for research purposes.

Hope you can get sorted….

If i had left it with the IFA who did the transfer they pretty much built a 60/40 fund.It would of been up 15% from that date (halfway through the Covid falls) before fees.Fees were 1.8% all in so 6%ish gone from that 15%.So them investing it halfway through the crash they would of made me 9% max in three years so around 12% down inflation adjusted,im up over 100% and my fees are around 0.2% a year.I know for a fact most of their clients go into drawdown at 4% to 5% a year,so if those 60/40 types flatline for a few more years then those pensions are going to start heading down fast,and thats before any inflation increases.Bonds might stop falling and their higher yields start to feed through,but the equity part looks dodgy,a big part in a few mega companies who dont pay much if anything in income.

I have just checked the Vanguard 60/40 and anyone going into drawdown from Jan21 will of seen it flatline before fees,so if in 4% a year drawdown the pot will be around 12% to 14% down with fees.Just 2.5 years in and its starting to looked holed below the waterlind.Jut takes another couple of years flatline an a quarter of the pension will be gone,without any inflation increases.

Edited June 12, 2023 by DurhamBorn

[JMD]

58 minutes ago, M S E Refugee said:

I am currently on a Train from Birmingham back to Carlisle, our Train was cancelled but luckily we have managed to get on a delayed Train.

It shows how delusional all this Green Bollocks is.

They would have to spend Hundreds of Billions to make the Railway Network half way decent.

It's the first time I've been to Birmingham, what a shithole!

I agree, but with reference to upgrading the network. HS2 will probably end up costing £200billion - so unfortunately our government has already spent all the money!?

But It's a common theme and something governments do all the time - and yet the voters never seem to learn and instead appear to desire ever more inefficient bureaucracy, stifling regulation, unfair benefits, and pointless state handouts and charity...  You see it's a slippery slope, with a final destination of penury!!!

 

Btw, you say that Birmingham's a shithole? Did you visit or perhaps get too close to the Bull's Ring !!...  i beleive that's what it's called?!

Edited June 12, 2023 by JMD

[JMD]

43 minutes ago, Plan-b said:

I agree except I think theres no intention to ever provide for millions of EVs. I think an individuals worth will decide who gets the privilege of ownership of private personal transport.

And by worth I mean not only the preserves of the rich and the good, but among the plebs those that are strictly necessary for the function of society.

Ah yes 'Key Workers'?  COVID introduced many new 'useful' terms that will be inflicted upon us in future.

[The Bear of Doom]

1 hour ago, JMD said:

TPTB have realised the national grid ('smart' or otherwise) isn't capable of charging millions of EVs. I have now come to think 2nd hand ICE cars will not only be tolerated but will be positively encouraged to operate for decades to come. After all its not just the 'evil' oil energy factor, but also the problem of the limited supply of minerals needed for batteries and the manufacture of entire new fleets of cars. 

Sounds a bit like Cuba and keeping 1950s American vehicles on the road due to sanctions!

[leonardratso]

first time to birmingham eh? make sure its your last as well. You aint missing owt. Avoid coventry and rugby as well.

[JMD]

57 minutes ago, MrXxxx said:

Interesting comparison this gentleman makes at the beginning about mortgages being like bonds..lets take this a bit further....what is the historical return on both in the UK?

Bonds ~1.8

Houses ~1.8

[https://www.credit-suisse.com/media/assets/corporate/docs/about-us/media/media-release/2018/02/giry-summary-2018.pdf]

 

Mmmm, so if any asset varies around a mean this means that following a period of being above the mean it usually corrects by dropping through and below the mean before starting the cycle again...now, what has been the return on houses during the ten year period of near zero inflation i.e. real return?

~2.5%, so for the last ten years they have been 0.7% above their LTA EVERY year!

If we go back for the last 30 years its been:

~3%, so for the last thirty years they have been 1.2% above their LTA EVERY year!

[https://monevator.com/historical-uk-house-prices/]
 

Now unless we are still climbing up the peak, 'we' and property prices are only going in one direction to correct to the LTA!

Interesting calculation you've done there.

Can I propose a thought experiment - if house prices were too remain at say their current nominal price levels, with inflation doing all the heavy work at removing property value. What average rate of inflation would be needed to reset house prices to their long-term LTA over say the next 10 or 20 years?   

...I wonder, is it near to @DurhamBorn estimated 7% (I believe?) inflation figure?

 

Btw in many countries, Australia and South Africa for example, mortgages are called bonds.

Edited June 12, 2023 by JMD

[JMD]

16 minutes ago, The Bear of Doom said:

Sounds a bit like Cuba and keeping 1950s American vehicles on the road due to sanctions!

Yes. Only difference is that we are sanctioning ourselves!

[JMD]

51 minutes ago, Pip321 said:

There should be a legal right to your money but there is a real mix of our modern society issues that make stuff like this impossible……and it’s educated and well informed customers like you who ends up paying.

Firstly fuckwit customers trying to sue institutions and the government rather than taking responsibility for they actions don’t help.

Secondly a government who pretends they are protecting people by insisting they MUST use an IFA to transfer from a DB pension worth over £30k….however an IFA is probably the person the customer needed protecting from.

Thirdly a corrupt industry made over complex so the industry itself makes more money for itself than it does for its customers. Anyone know a poor IFA?

It’s all shite and I guess you have no legal right….because the laws are not there for your benefit. The government needs a pension industry, it gains from it and it’s their money first and then yours.

I used an IFA who was receptive but I stupidly still use them for an expensive chat each year. I will ditch them but holding on because I want to move my SIPP and he might come in handy for research purposes.

Hope you can get sorted….

Please don't attempt to trigger me (plus everyone else on this thread) by saying we ought to have a legal right to our own money!

@Pip321 I am calling you out as a financial Troll !! (Joke of course)

[TNS]

As there has been a bit of pension talk i was mega pissed the other day when i looked at the available L&G funds on the work pension. Granted, i got an EM fund (China, India, Brazil) but F A in the way of mining, commodities, Oil & Gas. Utter fuckers!

Next up, mandatory govercunt and green funds!

Edited June 12, 2023 by TNS

[stoobs]

10 minutes ago, TNS said:

i was mega pissed the other day when i looked at the available L&G funds on the work pension

Never a good idea to make significant financial decisions after a skinful.

[Lightscribe]

11 minutes ago, TNS said:

As there has been a bit of pension talk i was mega pissed the other day when i looked at the available L&G funds on the work pension. Granted, i got an EM fund (China, India, Brazil) but F A in the way of mining, commodities, Oil & Gas. Utter fuckers!

Next up, mandatory govercunt and green funds!

Why can’t you transfer out into a SIPP? My works partnership stakeholder pension was with L&G and I did exactly that for those reasons.

[TNS]

Just now, stoobs said:

Never a good idea to make significant financial decisions after a skinful.

I did have a couple after seeing the offerings!

[sancho panza]

3 hours ago, RWJ said:

I found it impossible to transfer out @sancho panza.  The main reason cited was that I am under 50.  Made a thread on it:-

 

Thanks for that.That threasd is a great read with some decent tips on for anyone interested.Like @DurhamBorn has said you need to be committed to it and if successful it will cost.I'm stunned it's that ahrd given how poor the inflation linkages are with many DB schemes.

in other news,as DB has predicted,BTL fubar.

https://www.telegraph.co.uk/personal-banking/mortgages/death-knell-buy-to-let-mortgage-rates-7-per-cent/

‘Death knell for buy-to-let’ as mortgage rates near 7 per cent

NatWest to add more than £300-a-month to typical loan

NatWest will raise interest rates for landlords to close to 7 per cent following another day of turmoil in the mortgage market.

The bank will increase rates by as much as 1.57 percentage points from Tuesday – adding more than £300-a-month to a typical loan.

It comes as two-year gilt yields shot up on Monday, peaking near levels seen last September following the mini-Budget chaos which destabilised swap rates and sent mortgage rates soaring.

Brokers say many landlords – particularly in London – will not pass the stress tests for NatWest’s soon-to-land deals, with rates set to be as high as 6.79pc. A Bank of England official also warned of the pain ahead for tenants whose rents could be set to rise.

A two-year fix from NatWest, with no product fee and a 75pc loan, will now cost a buy-to-let investor 6.79pc in interest, up from 5.22pc. 

On a £250,000 loan, this is a difference in monthly payments of £327 if a landlord chooses to pay back the interest only – which the majority (80pc) do. In other words, that is a jump in repayments from £1,088 to £1,415. 

Catherine Mann, a member of the Bank of England’s Monetary Policy Committee, warned today that renters are also affected by mortgage refinancing by their landlords.

She added: “In some cases we can argue that the renters have less ability to affect that discussion, whereas a direct mortgage-holder can negotiate with their bank.”

NatWest is not the only major lender to pull swathes of rates today. This morning, Santander announced it would temporarily withdraw all its mortgages for new customers tonight as more lenders struggle to price in swap rate volatility. 
Similarly, Leeds Building Society said it would withdraw a handful of its buy-to-let products by midnight tonight. 

[Funn3r]

32 minutes ago, Lightscribe said:

Why can’t you transfer out into a SIPP? My works partnership stakeholder pension was with L&G and I did exactly that for those reasons.

Your works pension will not like you actually doing it. Mine put every obstacle in the way, in particular by saying they would do electronic transfer then doing a 180 and insisting on a thick pack of form filling. Took almost three months. 

Also if you are an employee still contributing then your employer will likely not switch to paying contributions to your SIPP. Which means managing two pensions. Still glad I did it. 

[M S E Refugee]

An interesting Ad campaign from HSBC.

Kind of confirms everything you need to know about CBDC's.

 

[DurhamBorn]

2 minutes ago, sancho panza said:

Thanks for that.That threasd is a great read with some decent tips on for anyone interested.Like @DurhamBorn has said you need to be committed to it and if successful it will cost.I'm stunned it's that ahrd given how poor the inflation linkages are with many DB schemes.

in other news,as DB has predicted,BTL fubar.

https://www.telegraph.co.uk/personal-banking/mortgages/death-knell-buy-to-let-mortgage-rates-7-per-cent/

‘Death knell for buy-to-let’ as mortgage rates near 7 per cent

NatWest to add more than £300-a-month to typical loan

NatWest will raise interest rates for landlords to close to 7 per cent following another day of turmoil in the mortgage market.

The bank will increase rates by as much as 1.57 percentage points from Tuesday – adding more than £300-a-month to a typical loan.

It comes as two-year gilt yields shot up on Monday, peaking near levels seen last September following the mini-Budget chaos which destabilised swap rates and sent mortgage rates soaring.

Brokers say many landlords – particularly in London – will not pass the stress tests for NatWest’s soon-to-land deals, with rates set to be as high as 6.79pc. A Bank of England official also warned of the pain ahead for tenants whose rents could be set to rise.

A two-year fix from NatWest, with no product fee and a 75pc loan, will now cost a buy-to-let investor 6.79pc in interest, up from 5.22pc. 

On a £250,000 loan, this is a difference in monthly payments of £327 if a landlord chooses to pay back the interest only – which the majority (80pc) do. In other words, that is a jump in repayments from £1,088 to £1,415. 

Catherine Mann, a member of the Bank of England’s Monetary Policy Committee, warned today that renters are also affected by mortgage refinancing by their landlords.

She added: “In some cases we can argue that the renters have less ability to affect that discussion, whereas a direct mortgage-holder can negotiate with their bank.”

NatWest is not the only major lender to pull swathes of rates today. This morning, Santander announced it would temporarily withdraw all its mortgages for new customers tonight as more lenders struggle to price in swap rate volatility. 
Similarly, Leeds Building Society said it would withdraw a handful of its buy-to-let products by midnight tonight. 

The incredible thing is none of them understand the macro drivers of this.The reason inflation is increasing/high is nothing to do with rates.Its been driven by bennies and state pensions and they are inflation linked so they just consume more and more and the economy cant heal.They all think the economy will increase production,but it wont,its a distribution cycle and cant.The reason mortgage rates are shooting up is because gilts are pricing in the fact we are on a systemic collapse roadmap.BTL is an innocent in this in a way,not that i give a fuck they are about to be destroyed,after all its a business so they keep saying and in that case they should of used the 20 good years to pay down the loans,interest only to max out lifestyle etc means the cycle rips you a new one now.

The BOE is lost here,they have zero understanding of the cycle,they are flapping around and cant understand it.They need to get some strategists on advising them who understand the drivers.

Notice today Tuffnells now gone under.Can keep up with inflation pressures.That will really hurt lots of companies who use them,and force up prices,inflation feeding itself,but then bennies go up with that inflation again,so the nnext courier goes down,cant get staff etc.Thats the road we are on.Everything goes down because they dont understand the cycle.Funny enough i had an email last week from them.Please enter your forecasts into a competition ,no thanks,il give you a day a week in Darlo at your new offices fees to be negotiated.

Notice how Catherine doesnt understand the bennie interaction in rents.She doesnt understand the UK cant price discover because monentising welfare budgets is backstopping more and more,until,,,,,,,,,,,,,,,,,,,,

[Wight Flight]

24 minutes ago, sancho panza said:

She added: “In some cases we can argue that the renters have less ability to affect that discussion, whereas a direct mortgage-holder can negotiate with their bank.”

[Cattle Prod]

3 hours ago, working woman said:

mealworms.  2 Blackbirds that I have nicknamed Poop and Spike

My blackbird is called Kevin, after Kevin the teenager, I decided to mimic his song one day having a beer in the garden and he had a meltdown, ripping all the moss off the pond stones and chucking it around. God knows what I said to him, I assume it was bad things about his mother. He has a white spot on his head and now comes to check me out every day, having a little tweet at me. I assume it’s:

”I’m watching you son, I’ll fuck you up”

”Blergh you ma a is fat crow”

I’m trying very hard to whistle better.

 

[Bobthebuilder]

6 minutes ago, Cattle Prod said:

My blackbird is called Kevin, after Kevin the teenager, I decided to mimic his song one day having a beer in the garden and he had a meltdown, ripping all the moss off the pond stones and chucking it around. God knows what I said to him, I assume it was bad things about his mother. He has a white spot on his head and now comes to check me out every day, having a little tweet at me. I assume it’s:

”I’m watching you son, I’ll fuck you up”

”Blergh you ma a is fat crow”

I’m trying very hard to whistle better.

 

Great post.

Not many people realise that lovely bird song they hear is in fact the bird shouting "THIS IS MY MANOR, COME ANYWHERE NEAR ME AND I WILL KICK THE SHIT OUT OF YOU"

[Pip321]

2 minutes ago, Cattle Prod said:

My blackbird is called Kevin, after Kevin the teenager, I decided to mimic his song one day having a beer in the garden and he had a meltdown, ripping all the moss off the pond stones and chucking it around. God knows what I said to him, I assume it was bad things about his mother. He has a white spot on his head and now comes to check me out every day, having a little tweet at me. I assume it’s:

”I’m watching you son, I’ll fuck you up”

”Blergh you ma a is fat crow”

I’m trying very hard to whistle better.

 

For several months we have two pigeons that walk (well mooch) around ours’ and the neighbours’ front and back garden like a couple of hoodie 14 year old teenagers. They are scruffy, almost look like they have their ‘hands’ in their pockets and kicking stones around….genuinely hilarious.

Our dog goes out and they literally just lazily fly to the top of the hedge or fence (just out of reach) and stare at him. He’s a big dog, big bark but these two pigeons don’t give a fuck.

I haven’t named them until now….Kevin and Perry 😉👍🏻

The joys of an English garden ☀️🕶️

[Wight Flight]

8 minutes ago, Cattle Prod said:

My blackbird is called Kevin, after Kevin the teenager, I decided to mimic his song one day having a beer in the garden and he had a meltdown, ripping all the moss off the pond stones and chucking it around. God knows what I said to him, I assume it was bad things about his mother. He has a white spot on his head and now comes to check me out every day, having a little tweet at me. I assume it’s:

”I’m watching you son, I’ll fuck you up”

”Blergh you ma a is fat crow”

I’m trying very hard to whistle better.

 

Local plod keep posting pictures of their tame Seagull.

Stephen.

Possibly not original, but always amusing.

 

[Mikhail Liebenstein]

Just come back from London today having visited "London TechWeek" which is 4 days of tech celebrations, exhibitions and conferences. Think pride for technology.

What struck me was that lunatic 'founders' were out of the asylum. I was expecting more hardcore tech, like nuclear reactors, advanced AI, space exploration etc, but the actual main event seemed to be filled with halfwit founders who managed to raise/borrow some cash and were now splashing it on CRM systems for non existent sales. One firm selling such SaaS offerings even had some poor guy dressed up as a unicorn 🦄 and some  attractive lady with a Cali accent asking young men in their 30s if they were founders before trying to sell stuff.

To top it all, it was even sponsored by Silicon Valley Bank - er sorry HSBC!

Edited June 12, 2023 by Mikhail Liebenstein

[Shamone]

10 minutes ago, Cattle Prod said:

My blackbird is called Kevin, after Kevin the teenager, I decided to mimic his song one day having a beer in the garden and he had a meltdown, ripping all the moss off the pond stones and chucking it around. God knows what I said to him, I assume it was bad things about his mother. He has a white spot on his head and now comes to check me out every day, having a little tweet at me. I assume it’s:

”I’m watching you son, I’ll fuck you up”

”Blergh you ma a is fat crow”

I’m trying very hard to whistle better.

 

Ha ha I do that, they do indeed go mental. The wood pigeons don’t seem to mind though.