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

[PETR4]

3 hours ago, Democorruptcy said:

At 4.5% that's now gifting banks £40bn a year from taxpayers.

No it isn't. The deposits - that banks hold - are owned by other people and organisations. It's not a direct wealth transfer.

[Phil]

21 minutes ago, PETR4 said:

No it isn't. The deposits - that banks hold - are owned by other people and organisations. It's not a direct wealth transfer.

How?

[Kevin Redshaw]

3 hours ago, Plan-b said:

When you say "I -- explain" does that mean this is you in this Vid?                   

Have a guess.

[stoobs]

55 minutes ago, Kendo said:

Why has he got an image of Iain Duncan Smith on his computer?

It’s a strip from “The Male Online” from Viz, that someone has overlaid with their own text. The original story would have been about a totally different subject.

[Plan-b]

Just over 20 minutes left ... 

[Democorruptcy]

1 hour ago, PETR4 said:

No it isn't. The deposits - that banks hold - are owned by other people and organisations. It's not a direct wealth transfer.

The interest rate we pay doesn't have to be base rate, it could be zero, the Swiss went negative.

[Loki]

13 minutes ago, Plan-b said:

Just over 20 minutes left ... 

More like griftpost 

[Cattle Prod]

3 hours ago, Errol said:

 

Wtf ... I did not have that on my macro bingo card. I love it.

[Cattle Prod]

24 minutes ago, Plan-b said:

Just over 20 minutes left ... 

Think I started posting here about 5 years ago, in large part due to having to listen to this kind  of nonsense. If I helped prevent one person from blowing their life savings on hookers and blow, shagging their sexy neighbour (I'm looking at you @King Penda), or burying a shipping container in their garden, it was worth the effort.

Actually, no. I hope I didn't help prevent any of those things...as you were.

[Balding Badger]

12 hours ago, DurhamBorn said:

Il repeat to the press reading this.Unless they slash bennies and state worker pensions (and link state pension to wages only) then we are speeding up to systemic collapse.This inflation,all of it,is caused by the fact we dont produce enough for the demands placed.We have had that building a long time BUT the killers is the massive ramping up of benefits.Half the country being inflation linked means the economy cant heal,because we need to consume around 26% less as country as we then re-build productive capacity.With the set up now it means bennies lose nothing,and so workers not on bennies need to lose around 50% spending power.If that happens most workers would be better off on bennies,so at around 20% down more and more stop work,so the collapse speeds up.My macro on this is clear.

I'm just catching up with the thread but really just want to add an anecdote regarding this. I know someone who has quit their job for her 'mental health'. She has had issues in the past and I'm not going to go into details but essentially I think that due to a change in family circumstances she has calculated that she is now either better off or not substantially worse off on benefits than working. Her partner has moved in, bringing a child and she has one as well. Two children are the optimum for tax credits, I believe. They wouldn't have got any with them both in work but with one not working they definitely will. She will, I am sure, also make sure that she gets sickness benefits as she will convince them that she is unfit for work. There are probably other things I haven't thought of that she will be able to claim. She hasn't got another job, but says they will manage. If I had to nail my colours to the mast I would say she has chosen to be 'unfit for work', albeit my opinion doesn't count for anything.

This is a symptom of the collapse we have been reading about in DurhamBorn's posts. People are looking at what is on offer for doing nothing and realising that work doesn't pay for them. It's happening. I think I'm one of those people who have a work ethic so defined that it is hard for me to imagine ever making that sort of calculation, but I do understand that for most people the opportunity to take the rest of their lives off would be something they would not pass up.

edit: spelling.

Edited June 21, 2023 by Balding Badger

[Wight Flight]

5 minutes ago, Balding Badger said:

I'm just catching up with the thread but really just want to add an anecdote regarding this. I know someone who has quit their job for her 'mental health'. She has had issues in the past and I'm not going to go into details but essentially I think that due to a change in family circumstances she has calculated that she is now either better off or not substantially worse off on benefits than working. Her partner has moved in, bringing a child and she has one as well. Two children are the optimum for tax credits, I believe. They wouldn't have got any with them both in work but with one not working they definitely will. She will, I am sure, also make sure that she gets sickness benefits as she will convince them that she is unfit for work. There are probably other things I haven't thought of that she will be able to claim. She hasn't got another job, but says they will manage. If I had to nail my colours to the mask I would say she has chosen to be 'unfit for work', albeit my opinion doesn't count for anything.

This is a symptom of the collapse we have been reading about in DurhamBorn's posts. People are looking at what is on offer for doing nothing and realising that work doesn't pay for them. It's happening. I think I'm one of those people who have a work ethic so defined that it is hard for me to imagine ever making that sort of calculation, but I do understand that for most people the opportunity to take the rest of their lives off would be something they would not pass up.

It's an interesting view.

If i still had kids i would be tempted to keep working 16 hours a week on minimum wage and roll up all the profits in the company / lob them in a pension.

I don't know if this can be done, but it would be the smart call.

[JMD]

9 hours ago, wherebee said:

Have you mapped the impact of foreign retail money flowing in as the pound collapses, to buy UK assets?  Trust me, from my time in HK and elsewhere in Asia, 90% of asian retail investors still see the UK as the land of paddington bear, bowler hats, honesty, and james bond.  I've posted on here before that almost every professional I knew in Hk and Singapore had property in either UK, Australia, or Canada, and the vast majority in the UK.

I could see a position where Uk housing looks very very cheap to singaporeans, chinese, indians, and they just pile in and grab any old shit they can in London and elsewhere that they know from TV (like Oxford).  They will NEVER recognise a collapse, even the riots in London a while back were discussed in circles I knew in HK as 'immigrant riots' and seen as a small problem.

In their desperation to keep the plates spinning, I could see a UK gvt supporting this inwards flow of money.  Ten houses in London could be ten million quid in GBP...

There appears to be lenders still looking for UK hard assets to invest in, and as you comment compared  to say HK, London property appears cheap. Anyway anecdotally today's news interviewed a broker who had just arranged a 40 year term mortgage for an 80 year old man! Even if the interest rate on that deal was punitive, such mortgages used not to exist.

[JMD]

7 hours ago, Kevin Redshaw said:

Knowledge is power, and most people know nothing about economics. Today the BBC announced that UK's national debt Is now equal to Britain's GDP. Most people have no idea about what terms like 'National Debt' and GDP even mean. In this video I quickly and simply explain what the national debt is and what GDP actually measures. I also  explain why the UK's National Debt has risen so dramatically. You might also want to know what the implications are of the UK's national debt reaching 100% of GDP for you and your families

 

So are you Keir Starmer?

[JMD]

2 hours ago, Plan-b said:

Just over 20 minutes left ... 

Thanks very much for the warning. Do you think its safe enough for me to venture out from behind the settee?

What is it with Gretta T? Back in the 80s, autistic nerds were derided, today such characters and their loopy opinions are venerated...   At this rate i fully expect to see Jimmy Saville on the back of our £20 notes before the end of the decade.

[AWW]

17 hours ago, Jay said:

Ouch…so more rates likely..markets pricing in 5 rate rises..

apparently consumer spending was up…interesting..

People are bringing purchases forward because they don't want to wait and pay +20% next year. The spiral, it is spiralling.

17 hours ago, Jay said:

Ouch…so more rates likely..markets pricing in 5 rate rises..

apparently consumer spending was up…interesting..

People are bringing purchases forward because they don't want to wait and pay +20% next year. The spiral, it is spiralling.

[wherebee]

40 minutes ago, AWW said:

 

People are bringing purchases forward because they don't want to wait and pay +20% next year. The spiral, it is spiralling.

this. 

I have posted on here before about how we've been laying in future purchases and storing in the loft for 2 years now.  Our spending has dropped to near zero in terms of non-daily living expenses now; clothes, shoes, household goods - all laid in for 2-5 years already.

except the bloody kids keep growing.,,

[Castlevania]

12 hours ago, wherebee said:

Have you mapped the impact of foreign retail money flowing in as the pound collapses, to buy UK assets?  Trust me, from my time in HK and elsewhere in Asia, 90% of asian retail investors still see the UK as the land of paddington bear, bowler hats, honesty, and james bond.  I've posted on here before that almost every professional I knew in Hk and Singapore had property in either UK, Australia, or Canada, and the vast majority in the UK.

I could see a position where Uk housing looks very very cheap to singaporeans, chinese, indians, and they just pile in and grab any old shit they can in London and elsewhere that they know from TV (like Oxford).  They will NEVER recognise a collapse, even the riots in London a while back were discussed in circles I knew in HK as 'immigrant riots' and seen as a small problem.

In their desperation to keep the plates spinning, I could see a UK gvt supporting this inwards flow of money.  Ten houses in London could be ten million quid in GBP...

They don’t like an asset going down in value. London housing has largely gone nowhere for eight years. Probably down now.

[wherebee]

2 minutes ago, Castlevania said:

They don’t like an asset going down in value. London housing has largely gone nowhere for eight years. Probably down now.

I know of two Asian families who bought houses in UK university cities, site unseen, because their child was thinking of going there and they wanted a UK asset.  Future value wasn't the key drive - being able to boast of owning a house in the UK was a big part of it.

AFAIK, both were mortgaged with mortgages provided in Singapore/HK by non UK banks.  I could be wrong on that, but that is what they told me.  This was ten years ago.

[Castlevania]

8 minutes ago, wherebee said:

I know of two Asian families who bought houses in UK university cities, site unseen, because their child was thinking of going there and they wanted a UK asset.  Future value wasn't the key drive - being able to boast of owning a house in the UK was a big part of it.

AFAIK, both were mortgaged with mortgages provided in Singapore/HK by non UK banks.  I could be wrong on that, but that is what they told me.  This was ten years ago.

There are tower blocks in Croydon where everyone seems to be renting from a Malaysian “auntie”.

[Lightscribe]

4 hours ago, Castlevania said:

There are tower blocks in Croydon where everyone seems to be renting from a Malaysian “auntie”.

Ahh yes, what a heist that was. Selling off swathes of new build flats for half a million on the basis that Westfields would transform Croydon into a commercial super hub of London.

Saffron Square is a highlight there.

https://www.mylondon.news/news/broken-lifts-crumbling-ceilings-plenty-24684010

https://www.zoopla.co.uk/for-sale/property/london/croydon/saffron-central-square/

If they had of sold to ‘investors’ in the UK, I’m sure there would be many ‘misold’ claims companies by now circling to get their finger in the pie.

Most likely no recourse, because Asian investors didn’t know the area, was sold off-plan under the basis that Westfields was a certainty and that no clue that Croydon council was in financial difficulty and would go bust.

The investors are partly to blame too however it was a gamble and they had seen the regeneration value in Stratford and Shepard’s Bush so were betting on a big return.

The Labour Croydon councillors took all their money and ran (nice £1/2 mil golden handshake for Negreedy) before it all went Pete Tong. See ya later mo-fos! 

All part of the 40 year disinflation cycle ending in action. Sad thing is, Croydon used to be a successful retail and commercial hub (Alders was one of the biggest department stores in Europe and it had lots of banks, insurance companies HQs there in the business district in 80’s/90’s) and the transport links were second to none. 
 

chuckle 🤭 

Edited June 22, 2023 by Lightscribe

[Castlevania]

5 minutes ago, Lightscribe said:

Ahh yes, what a heist that was. Selling off swathes of new build flats for half a million on the basis that Westfields would transform Croydon into a commercial super hub of London.

Saffron Square is a highlight there.

https://www.zoopla.co.uk/for-sale/property/london/croydon/saffron-central-square/

If they had of sold to ‘investors’ in the UK, I’m sure there would be many ‘misold’ claims companies by now circling to get their finger in the pie.

Most likely no recourse, because Asian investors didn’t know the area, was sold off-plan under the basis that Westfields was a certainty and that no clue that Croydon council was in financial difficulty and would go bust.

The investors are partly to blame too however it was a gamble and they had seen the regeneration value in Stratford and Shepard’s Bush so were betting on a big return.

The Labour Croydon councillors took all their money and ran (nice £1/2 mil golden handshake for Negreedy) before it all went Pete Tong. See ya later mo-fos! 

All part of the 40 year disinflation cycle ending in action. Sad thing is, Croydon used to be a successful retail and commercial hub (Alders was one of the biggest department stores in Europe and it had lots of banks, insurance companies HQs there in the business district in 80’s/90’s) and the transport links were second to none. 

All the banks moved from such places to be in the City or Canary Wharf. Up until the late 90’s Citibank’s European HQ was above a shopping centre in Lewisham.

[Plan-b]

6 hours ago, JMD said:

Thanks very much for the warning. Do you think its safe enough for me to venture out from behind the settee?

I'm not so sure I feel a bit wiped out this morning so best you stay behind the settee sofa. (I keep getting corrected for using the word settee )

[crashmonitor]

Economist on Sky News not mincing his words re. BOE incompetence, he seems quite angry. He thinks they have to go 0.5%...I'm not so confident. Tenreyro and Dinghra aren't going to u-turn are they. Even a 0.5% would be a total embarrassment for Bailey.

 

The trouble is with human nature, if you have made cataclysmic mistakes and  are getting pilloried you double down and get bloody minded. Bailey has never even apologised.

 

Hopefully I'm wrong on this. We can count on Cath Mann to go 0.5% or even 0.75%  that's it.

It probably shows the importance of being able to sack people who were wrong because you are not bound by your previous behaviour, like a double or quits gambler trying to redeem your reputation.

 

 

Edited June 22, 2023 by crashmonitor

[Democorruptcy]

10 minutes ago, crashmonitor said:

Economist on Sky News not mincing his words re. BOE incompetence, he seems quite angry. He thinks they have to go 0.5%...I'm not so confident. Tenreyro and Dinghra aren't going to u-turn are they. Even a 0.5% would be a total embarrassment for Bailey.

 

The trouble is with human nature, if you have made cataclysmic mistakes and  are getting pilloried you double down and get bloody minded. Bailey has never even apologised.

 

Hopefully I'm wrong on this. We can count on Cath Mann to go 0.5% or even 0.75%  that's it.

It probably shows the importance of being able to sack people who were wrong because you are not bound by your previous behaviour, like a double or quits gambler trying to redeem your reputation.

 

 

The governor puts forward the amount he thinks will gain a majority and they vote yes/no on that figure. If you want to keep your position, you don't vote against the boss.

[ThoughtCriminal]

I was going to call this an anecdotal but it's more of a fucking tragedy.

Good mate of mine has just revealed to me the world of shit he's in with his rental property.

With rate increases he's now paying over 200 a month more on the mortgage (interest only), tried selling it for a year and was offered 10k under asking but "I know what it's worth, I'm not letting it go cheap". I told him to take the offer at the time as it would have paid the mortgage off and left him with a few grand "profit".

Fast forward a year and he's spent over 12k on mortgage repayments, maintenance etc so is now looking at a big loss. Renting it out again but losing 150 a month doing so.

Does anyone see a downside to just handing it back and walking away? At this point I don't see any other option as he's heading for a nervous breakdown or suicide.

Lovely lad, type you could call at 3am and he'd be there no matter what, but fuck me people just won't take telling.

 

Edited June 22, 2023 by ThoughtCriminal