Credit deflation and the reflation cycle to come (part 6)

[King Penda]

3 hours ago, Loki said:

Definitely 

My cock could not cope with 36% interest rates 

[sancho panza]

A small hint of the delveraging to come ref bank balance sheets and the SE.

[Bien Pensant]

11 hours ago, PETR4 said:

Fuck me, the cope is strong with this one!

Utter bullshit.

But, I guess it's what his audience is desperate to hear - essentially that Russia is collapsing and that America is a "democracy", which is why it will be able to keep running the world via its tech companies, despite having no other assets, not even unity.

Edited June 19, 2023 by Bien Pensant

[spygirl]

11 hours ago, ashestoashes said:

thought Natwest was getting into rented properties, surely they need a supply of properties with distressed sellers

No.

Scot Widows it is looking at built to rent blocks, as a life hedge.

NW and all large  life cos looking at this *HAVE NO INTEREST IN INDIVIDUAL HOUSES*

Its looking likely that thee blocks will replace old shopping centres and commercial property/office that the lifecos can no longer get a yield from.

Distressed IO BTL houses are going to FTBS are a knock down price.

 

 

 

[Lightscribe]

https://uk.finance.yahoo.com/news/city-investors-land-grab-rental-175757511.html
 

Blackrock in the US, pension funds over here. The corporate landlords are beginning sweep up. BTR is where it’s all going, getting the plebs to live life on a subscription model is the long term goal.

[baffledbyzirp]

10 hours ago, DurhamBorn said:

Its incredible to think,but i worked with guys who were face workers at Easington Pit ,its not that long ago.I remember when the last ones shut,an old fella in the club said something very interesting when everyone was going mad about it all.He said dinit worry man,we may as well burn every fucker elses coal,ours will still be there later you na when we need it.

I think our coal measures hold around 200 years worth of coal,could be more with better methods.

My roadmap shows me its certain we collapse because they are simply spreading the pie more and more,and its going to be a shrinking pie,unless they increase energy production and cut back on bennies etc.Labour have a massive chance here.They could go for carbon capture and open the pits.Imagine a Labour leader at the Durham miners gala giving that speech ,"we are sinking the first shafts this year".It would be huge.I would rub the elites noses in it even more,Id put a levy on the coal that was used to re wild and re forest the grouse moors etc with oaks and birch forests.Our uplands should be half forested,not left for 6 fellas with 8 chins to shoot little birds.

Iv off-shored most of my own assets now because the risk is incredible in the UK.

Should i put my numbers on my roadmap shows if we carry on as we are?.

Interest rates at 36%,inflation at 33% and INCREASING,unless bennies and state pensions lose inflation linking.

The only other way is to produce lots more energy,and the only thing we have is coal.

This talk of mortgage help is ludicrous,because as iv said countless times,housing wealth will be consumed next,even if they change track now,that capital will be spent down.

Its fantastic watching them all though,the only way out is to kill all their sacred ideas,net zero,diversity,welfare etc etc.

SEDY has 12% in thermal coal ,lovely.

The discussion reminds me of the apocryphal story about a German soldier captured during World War 1 who had eaten his own leg. Obviously he was incapable of running away. 

@DurhamBorn uses his model to suggest the direction of travel and the pace of change. My sense is that the speed of change is increasing as we approach the point of collapse, similar to circling the abyss before being suddenly consumed e.g. a black hole or whirlpool. We are eating next year's seed corn at a furious rate and, as the pile diminishes, our appetite grows. The steepening curve is a mathematical inevitability, a standard exponential rate acceleration. 

 

The malaise the world currently faces is directly attributable to the repudiation of the USD$ gold standard by Nixon in 1971. Unrestrained by the physical limitations of gold, the US embarked on a spending spree that effectively stole the earnings of future generations. When the Neocons gained ascendancy the model was exported around the world. Under the auspices of Greenspan and Clinton, regulations were further eroded and the cost of risk was fundamentally under-priced to encouraged ever greater folly. Governments have no options. It is check mate in two moves. We have run out of virgin ground to export the vile exploitative ideology to.

All the measures introduced in response to the Great Depression to prevent such a phenomenon ever reoccurring were systematically dismantled. Guess what? We are now on the threshold of an economic shock that will dwarf the Great Depression.

The real worry for me is systemic; the price and availability of food next winter will cause famine in Africa and the Middle East. Countries still suffering the hang over caused by American imperialism will be hit particularly hard viz Afghanistan, Syria, and Iraq. Facing a choice between starvation and emigration desperate people will be forced to seek sanctuary in Europe. The push north from Africa and West from the Middle East/ Asia will be immense. 

The system faces entropy which will be manifested in civil unrest and social disintegration. Hungry people tend not to believe in the self-serving agitprop of the ruling classes who are insulated from the consequences of their greed by familial wealth embezzled over centuries and ringfenced by legislation. All bets are off. We return to a quieter, poorer, local, proportionate, self-reliant society.

Sorry to be so joyful on Monday morning. On a positive note if the shit hits the fan DB's SEDY shares might rocket. GLA and enjoy the week.

[spygirl]

7 minutes ago, Lightscribe said:

https://uk.finance.yahoo.com/news/city-investors-land-grab-rental-175757511.html
 

Blackrock in the US, pension funds over here. The corporate landlords are beginning sweep up. BTR is where it’s all going, getting the plebs to live life on a subscription model is the long term goal.

No.

Built to rent will offer young people a ~10y period of renting in a cheapish, central location inthe larger cities.

The Buy to let fuckw its will be destroyed.

 

 

 

[Wight Flight]

40 minutes ago, spygirl said:

No.

Scot Widows it is looking at built to rent blocks, as a life hedge.

NW and all large  life cos looking at this *HAVE NO INTEREST IN INDIVIDUAL HOUSES*

Its looking likely that thee blocks will replace old shopping centres and commercial property/office that the lifecos can no longer get a yield from.

Distressed IO BTL houses are going to FTBS are a knock down price.

 

 

 

I have some experience of the US corporate BTR model.

I would welcome it here.

[Wight Flight]

Just now, spygirl said:

No.

Built to rent will offer young people a ~10y period of renting in a cheapish, central location inthe larger cities.

The Buy to let fuckw its will be destroyed.

 

 

 

Agreed.

And when a landlord has 200 properties in a complex to rent they care very much about their reputation, and the reputation of that complex.

[King Penda]

25 minutes ago, baffledbyzirp said:

The discussion reminds me of the apocryphal story about a German soldier captured during World War 1 who had eaten his own leg. Obviously he was incapable of running away. 

@DurhamBorn uses his model to suggest the direction of travel and the pace of change. My sense is that the speed of change is increasing as we approach the point of collapse, similar to circling the abyss before being suddenly consumed e.g. a black hole or whirlpool. We are eating next year's seed corn at a furious rate and, as the pile diminishes, our appetite grows. The steepening curve is a mathematical inevitability, a standard exponential rate acceleration. 

 

The malaise the world currently faces is directly attributable to the repudiation of the USD$ gold standard by Nixon in 1971. Unrestrained by the physical limitations of gold, the US embarked on a spending spree that effectively stole the earnings of future generations. When the Neocons gained ascendancy the model was exported around the world. Under the auspices of Greenspan and Clinton, regulations were further eroded and the cost of risk was fundamentally under-priced to encouraged ever greater folly. Governments have no options. It is check mate in two moves. We have run out of virgin ground to export the vile exploitative ideology to.

All the measures introduced in response to the Great Depression to prevent such a phenomenon ever reoccurring were systematically dismantled. Guess what? We are now on the threshold of an economic shock that will dwarf the Great Depression.

The real worry for me is systemic; the price and availability of food next winter will cause famine in Africa and the Middle East. Countries still suffering the hang over caused by American imperialism will be hit particularly hard viz Afghanistan, Syria, and Iraq. Facing a choice between starvation and emigration desperate people will be forced to seek sanctuary in Europe. The push north from Africa and West from the Middle East/ Asia will be immense. 

The system faces entropy which will be manifested in civil unrest and social disintegration. Hungry people tend not to believe in the self-serving agitprop of the ruling classes who are insulated from the consequences of their greed by familial wealth embezzled over centuries and ringfenced by legislation. All bets are off. We return to a quieter, poorer, local, proportionate, self-reliant society.

Sorry to be so joyful on Monday morning. On a positive note if the shit hits the fan DB's SEDY shares might rocket. GLA and enjoy the week.

Putin actually said he would do this to the west. We should throw the towel in

[PatronizingGit]

8 hours ago, DurhamBorn said:

My youngest daughter is 21 and onto baby number 3,i think she will have 5,she is with a gypsy though.These lot are global commies,but its likely they will be removed at some point.It would stop monday if nobody went to work.

Would it though? South africa, massive unemployment, 90% get more in gibs than they pay in. The country staggers on.

 

Seems by design the whole west is headed that way. 

[King Penda]

The whore count is back on ,the record was 136 leading up to Christmas . I’ve been watching these bad girls weekly and it’s rising ……will 136 be beaten .

[DurhamBorn]

1 hour ago, spygirl said:

No.

Scot Widows it is looking at built to rent blocks, as a life hedge.

NW and all large  life cos looking at this *HAVE NO INTEREST IN INDIVIDUAL HOUSES*

Its looking likely that thee blocks will replace old shopping centres and commercial property/office that the lifecos can no longer get a yield from.

Distressed IO BTL houses are going to FTBS are a knock down price.

 

 

 

Thats right,think Premier Inns model for the big boys going into rental.Same fixtures,fittings,a few standard designs etc.Thats how you do it to keep costs etc down and be able to run a real rental business.Like you say IO BTL is going to FTB at big discounts.I know many selling who dont even have mortgages,they cant be arsed with the regs changing all the time.Its a ludicrous business for most now.I know two who had 5 and 9 houses,all paid for,2nnd one had LTV of 17%,both did it right for 20 years,one a builder,one married to a bloke who was very handy and whos mates were all trades,both sold the lot last year as they said it was not viable going forward.

[Yellow_Reduced_Sticker]

"House prices FALL as rising mortgage rates keep buyers away"

 

...AND whats this?

Cuntishi Says: "No extra mortgage support for homeowners!"

ALL chirpy this morning!

[King Penda]

23 minutes ago, Yellow_Reduced_Sticker said:

"House prices FALL as rising mortgage rates keep buyers away"

 

...AND whats this?

Cuntishi Says: "No extra mortgage support for homeowners!"

ALL chirpy this morning!

All we need now is .50 % by weekend 

[Lightscribe]

1 hour ago, spygirl said:

No.

Built to rent will offer young people a ~10y period of renting in a cheapish, central location inthe larger cities.

The Buy to let fuckw its will be destroyed.

Yessss….yessss

They won’t need a car either….goooood

Less than 15 minutes away from any convenience…. Yessss

https://www.zerohedge.com/economics/climate-authoritarianism-wef-wants-75-less-private-car-owners-2050?ref=biztoc.com

[geordie_lurch]

Think this tweet and Elon Musk's supposed quote sums up where the UK and other Western nations are going to be very soon as we are all aware here

 

[Axeman123]

1 hour ago, PatronizingGit said:

Would it though? South africa, massive unemployment, 90% get more in gibs than they pay in. The country staggers on.

Seems by design the whole west is headed that way. 

The chances for and scale of embezzlement are both probably higher overall for the SA elite than here.

59 minutes ago, DurhamBorn said:

Thats right,think Premier Inns model for the big boys going into rental.Same fixtures,fittings,a few standard designs etc.Thats how you do it to keep costs etc down and be able to run a real rental business.

I have watched one go up, the rooms were prefab with all the internal fittings and then stacked on site like shipping containers. A Brick and render facade was added (and presumably connecting up the pipes/wires etc) then it was all done within a few weeks.

I assume they are ~50 year lifespan and have little scope for redevelopment without starting over, but they must not care.

[azzuri82]

Long-time lurker.

This thread, if you're not actively reading it every few days at most becomes too much to actually catch up on.

I think since the last time I've properly been active on here we've had another couple of kids, so life is very busy, but having caught up with the last 30-40 pages or , I thought I'd post our anecdotal.

Just turned 40 tail end of last year, 3 kids under 6 years' old, life is pretty busy. Sold off some business interests and have a fair chunk of cash just sloshing about in savings accounts and NS&Is PBs.

My other little business (it's part-time hours to me, but 4 staff, turnover approx. £250k), sales/margins have dropped like a stone over the last 3-4 months. It's like someone has just turned off a tap re: customers. We're in the furniture repair/upcycling business.

For such a small enterprise, we are taxed to the absolute hilt.

 

The tax/es we pay/contribute every month are/were as follows: 

 

VAT: Approx. £2.5-3.0k (or around £8k'ish every quarter)

Business Rates: £1k (12k/year)

Corp.: £700 (8k/year)

PAYE/NIC: £1k (£12k/year)

 

Totals around £60k/year

 

Not to mention personal taxes on tax return like dividend tax etc.

 

So with things the way they are in the business, keeping payroll records, tax/vat records, I/we are just throwing in the towel.

Two of our staff have gone off on MAT leave, so decided its a good time to just shutter everything and make everyone redundant, scale things right back to bare minimum and run high margin work only to suit ourselves.

We're getting rid of the expensive commercial property and just going to scale back below the VAT limit because for me anyway, managing the staff etc. just isn't worth the hassle - and with every increasing interest rates on the horizon, savings interest is going to be hitting £40-50k plus per year, so it's not worth maxing out income by any other means.

So our tiny biz is going from a net contributor to the government of around £60k per year, to an effective zero over the next few months. 

Inflation is destroying everything - so I'm deciding to just put my feet up at home for a few months with the kids and see what happens. And I'm someone that actively ENJOYS working/running a business. But it needs to make sense/pay. And it hasn't for the last 3-6 months.

We had saved up enough until retirement - but if the gov is going to just destroy everything we've worked for through inflationary means, what is the purpose in continuing to work and pay tax - unless you absolutely have to?

 

[leonardratso]

im always quite surprised at how quickly things turn to shit, its as if the normal or good times were operating on a razors edge between being 'normal/good' and being complete shit, a bit like a bank balance that hovers at £1 and varies little, then suddenly its -£1 then -£2 etc etc. Getting it back to that +£1 always takes massively longer than getting it to -£19.8Billion.

[Yellow_Reduced_Sticker]

12 hours ago, DurhamBorn said:

Includes UK that earn over seas etc as well.....I only really own BT now that makes almost all here,but at least the telcos should index link,Turkcell for instance protected Turks very well from high inflation (and some of us).

SIR ...can i temp ya with National Express ?

its cheap but could get CHEAPER...maybe retest 79p

...thoughts?

Edited June 19, 2023 by Yellow_Reduced_Sticker

[DurhamBorn]

25 minutes ago, azzuri82 said:

Long-time lurker.

This thread, if you're not actively reading it every few days at most becomes too much to actually catch up on.

I think since the last time I've properly been active on here we've had another couple of kids, so life is very busy, but having caught up with the last 30-40 pages or , I thought I'd post our anecdotal.

Just turned 40 tail end of last year, 3 kids under 6 years' old, life is pretty busy. Sold off some business interests and have a fair chunk of cash just sloshing about in savings accounts and NS&Is PBs.

My other little business (it's part-time hours to me, but 4 staff, turnover approx. £250k), sales/margins have dropped like a stone over the last 3-4 months. It's like someone has just turned off a tap re: customers. We're in the furniture repair/upcycling business.

For such a small enterprise, we are taxed to the absolute hilt.

 

The tax/es we pay/contribute every month are/were as follows: 

 

VAT: Approx. £2.5-3.0k (or around £8k'ish every quarter)

Business Rates: £1k (12k/year)

Corp.: £700 (8k/year)

PAYE/NIC: £1k (£12k/year)

 

Totals around £60k/year

 

Not to mention personal taxes on tax return like dividend tax etc.

 

So with things the way they are in the business, keeping payroll records, tax/vat records, I/we are just throwing in the towel.

Two of our staff have gone off on MAT leave, so decided its a good time to just shutter everything and make everyone redundant, scale things right back to bare minimum and run high margin work only to suit ourselves.

We're getting rid of the expensive commercial property and just going to scale back below the VAT limit because for me anyway, managing the staff etc. just isn't worth the hassle - and with every increasing interest rates on the horizon, savings interest is going to be hitting £40-50k plus per year, so it's not worth maxing out income by any other means.

So our tiny biz is going from a net contributor to the government of around £60k per year, to an effective zero over the next few months. 

Inflation is destroying everything - so I'm deciding to just put my feet up at home for a few months with the kids and see what happens. And I'm someone that actively ENJOYS working/running a business. But it needs to make sense/pay. And it hasn't for the last 3-6 months.

We had saved up enough until retirement - but if the gov is going to just destroy everything we've worked for through inflationary means, what is the purpose in continuing to work and pay tax - unless you absolutely have to?

 

Exactly what i did.I had grown a great import business.I had a superb woman in China working for me handling over there and i did everything here myself.I grew to a good size quickly and i could of taken it to the multi millions.I had Amazon wanting to partner me and all sorts.However it meant half my capital tied up and cranking up risk for no extra money for the first extra £400k.Id need premises then,staff etc etc,tax,regs,councils,the lot,it just wasnt worth it.I could of kept ticking along making a decent living for 4 hours work a week,but i knew what was coming of course so simply sold everything off and stopped.Most went into the gold miners just before they doubled and trebled,then of course oil and potash (and less good telcos).What really gets you as well is woman over the road never worked getting £35k a year free money,but if your a fiver out on tax,they are on your case etc.Fuck that.There is no way im giving away my time left to serve this system.I much prefer my own little world now.Instead of importing iv exported my capital.Hope you get it all shut down quickly and to your advantage.

[DurhamBorn]

10 minutes ago, Yellow_Reduced_Sticker said:

SIR ...can i temp ya with National Express ?

its cheap but could get CHEAPER...maybe retest 79p

...thoughts?

My daughter has a SIPP and ISA now and chooses some herself,she bought B+M before it rocketed and she has just bought National Express,she says "the age of the car is over",now thats her choice,but the worry for me is has @F150 been grooming my daughter? ,i must add she also thought the sun went around the earth.

[DurhamBorn]

Has anyone had the Telefonica SA divi land yet?,i thought it was due friday,but nothing yet.

[azzuri82]

3 minutes ago, DurhamBorn said:

Exactly what i did.I had grown a great import business.I had a superb woman in China working for me handling over there and i did everything here myself.I grew to a good size quickly and i could of taken it to the multi millions.I had Amazon wanting to partner me and all sorts.However it meant half my capital tied up and cranking up risk for no extra money for the first extra £400k.Id need premises then,staff etc etc,tax,regs,councils,the lot,it just wasnt worth it.I could of kept ticking along making a decent living for 4 hours work a week,but i knew what was coming of course so simply sold everything off and stopped.Most went into the gold miners just before they doubled and trebled,then of course oil and potash (and less good telcos).What really gets you as well is woman over the road never worked getting £35k a year free money,but if your a fiver out on tax,they are on your case etc.Fuck that.There is no way im giving away my time left to serve this system.I much prefer my own little world now.Instead of importing iv exported my capital.Hope you get it all shut down quickly and to your advantage.

Yeah it's just one anecdotal of a tiny business, but how many other people are thinking/considering the same extrapolated across the economy, and what does this do to government revenues?

I suspect most people in our position would limp on for another 6-9 months before being forced to throw in the towel, but who is going to work for fuck all?

My missus is a paediatric nurse that specialises in theatre work, and going back to work 2 days from November (mostly just to get her out the house and away from the kiddos for a bit), top of her band so she'll end up with approx. £1,500 net/month for 2 full days, but again, almost zero taxes contributed from her as well.

We're going from massive tax contributors over the last 5 years or say (I reckon we've paid approx. £300k when you tot it all up) to zero.

Making our world smaller, focusing on kids/family, and only doing 'easy' work with little to no stress. We're in the fortunate position to be able to do this - I actually don't know how folk on the treadmill do it - working 2 FT jobs with £400/500k mortgages etc. and looking after kids - these people must be due a mental breakdown of some sorts pretty soon due to debt stress/load.