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

[MrXxxx]

13 hours ago, HousePriceMania said:

Sunak orders banks to protect borrowers from surging mortgage rates

Strong employment figures and stubborn inflation pile pressure on Threadneedle Street
 

https://www.telegraph.co.uk/business/2023/06/13/rishi-sunak-banks-protect-borrowers-high-mortgage-rates/

 !!!! WHAT THE FUCK ARE THE TORIES DOING !!!!

What exactly are they doing...the article' tell you nothing apart for Rishi pleading [in fact it was his spokesperson] to the bank to

"look after customers who were struggling with the jump in costs.", and 

“The Chancellor has made clear his expectation that lenders should live up to their responsibilities and support any mortgage borrowers who are finding it tough right now.”

Well there you go, I am sure the banks are going to say "£uck the responsibility to our shareholders, we have a moral obligation having taken so much money from the government previously to 'Look after our customers'!"...yeah right!

[MrXxxx]

2 hours ago, Axeman123 said:

I think people are missing the big picture on the "Sunak orders banks to protect borrowers..." headline. A more accurate headline would be along the lines of "Sunak does fuck all of substance, instead makes empty gesture and leaves borrower cunts to burn...to ensure a cosy directorship when he finishes his career in politics [which may be sooner rather than later if we apply 'Trussenomics' into the equation!".

FTFY :-)

[Eventually Right]

2 hours ago, Axeman123 said:

I think people are missing the big picture on the "Sunak orders banks to protect borrowers..." headline. A more accurate headline would be along the lines of "Sunak does fuck all of substance, instead makes empty gesture and leaves borrower cunts to burn".

I think it remains to be seen-empty gesture for now. 

Wait until a few repossession sob stories are all over the press, and we're 9-12 months from a General Election.

For me it indicates a direction of travel, unfortunately.

[Yadda yadda yadda]

1 hour ago, MrXxxx said:

What exactly are they doing...the article' tell you nothing apart for Rishi pleading [in fact it was his spokesperson] to the bank to

"look after customers who were struggling with the jump in costs.", and 

“The Chancellor has made clear his expectation that lenders should live up to their responsibilities and support any mortgage borrowers who are finding it tough right now.”

Well there you go, I am sure the banks are going to say "£uck the responsibility to our shareholders, we have a moral obligation having taken so much money from the government previously to 'Look after our customers'!"...yeah right!

All it will mean is offer them interest only for a while. Basic keep people in their homes stuff. Not a hard sell as keeping people in debt for longer is a win for banks.

[Ash4781b]

Head in hands moment . They are chasing the interest rate upwards. We’ll be told base will hit 6% before we know it.

[King Penda]

14 minutes ago, Ash4781b said:

Head in hands moment . They are chasing the interest rate upwards. We’ll be told base will hit 6% before we know it.

8% soon

[HousePriceMania]

VOD up 5%

 

 

I new I shoulda sold yesterday 

[SpectrumFX]

2 hours ago, MrXxxx said:

What exactly are they doing...the article' tell you nothing apart for Rishi pleading [in fact it was his spokesperson] to the bank to

"look after customers who were struggling with the jump in costs.", and 

“The Chancellor has made clear his expectation that lenders should live up to their responsibilities and support any mortgage borrowers who are finding it tough right now.”

Well there you go, I am sure the banks are going to say "£uck the responsibility to our shareholders, we have a moral obligation having taken so much money from the government previously to 'Look after our customers'!"...yeah right!

I thought that the whole point of raising interest rates was to take money off the people paying mortgages. That this fights inflation by reducing demand in the wider economy, because people have had to spend more money on their mortgage.

Now they want to press the "raise interest rates" button, but to also protect everybody from the consequences of pressing the button, when it's those very consequences by which the button achieves their stated goals.

This is proper cargo cult stuff. These people are morons.

 

Edited June 14, 2023 by SpectrumFX

[feed]

31 minutes ago, Ash4781b said:

Head in hands moment . They are chasing the interest rate upwards. We’ll be told base will hit 6% before we know it.

Jaw jaw, jaw jaw.  They're going to follow the FED.  

 

 

[Chewing Grass]

3 minutes ago, SpectrumFX said:

I thought that he whole point of raising interest rates was to take money off the people paying mortgages. That this fights inflation by reducing demand in the wider economy, because people have had to spend more money on their mortgage.

Now they want to press the "raise interest rates" button, but to also protect everybody from the consequences of pressing the button, when it's those very consequences by which the button achieves their stated goals.

This is proper cargo cult stuff. These people are morons.

 

I think they actually want to protect the currency so they can print more and more until they can conjour up a CBDC in the hope of carrying on ripping everyone else in the planet off. It's like clinging onto the control that the old empires provided.

[Calcutta]

4 minutes ago, Chewing Grass said:

I think they actually want to protect the currency so they can print more and more until they can conjour up a CBDC in the hope of carrying on ripping everyone else in the planet off. It's like clinging onto the control that the old empires provided.

Sound like an alright plan when you put it like that.

 

[King Penda]

14 minutes ago, SpectrumFX said:

I thought that he whole point of raising interest rates was to take money off the people paying mortgages. That this fights inflation by reducing demand in the wider economy, because people have had to spend more money on their mortgage.

Now they want to press the "raise interest rates" button, but to also protect everybody from the consequences of pressing the button, when it's those very consequences by which the button achieves their stated goals.

This is proper cargo cult stuff. These people are morons.

 

Indeed . 

9 minutes ago, feed said:

Jaw jaw, jaw jaw.  They're going to follow the FED.  

 

 

True and they might pause 

[feed]

1 minute ago, King Penda said:

Indeed . 

True and they might pause 

FED pause or not, the BOE are never going to be higher than the FED or lower than the ECB.  

 

[Yadda yadda yadda]

12 minutes ago, SpectrumFX said:

I thought that he whole point of raising interest rates was to take money off the people paying mortgages. That this fights inflation by reducing demand in the wider economy, because people have had to spend more money on their mortgage.

Now they want to press the "raise interest rates" button, but to also protect everybody from the consequences of pressing the button, when it's those very consequences by which the button achieves their stated goals.

This is proper cargo cult stuff. These people are morons.

 

They're morons, no doubt about that. Say mortgage increases were going to take £200 per month from mortgagees on average. What they want to do is get banks to adjust that so that those that can't afford the £200 pay only an extra £100 but that means that rates go higher and everyone else ends up paying £250. As part of the disinflationary impact of rates is caused by repossessions this idea reduces their impact and forces rates even higher.

Removing pain from mortgagees also means focussing more of it on businesses.

They're in a panic. They have fucked up. At some point they need to switch to real terms public spending cuts. They're cowards and will only do that when forced. People with mortgages, excluding BTL, tend to have jobs. By increasing the share of pain experienced by mortgage holders they're again shifting the burden onto some workers and away from benefits recipients. Although there are some assumptions there.

2 minutes ago, feed said:

FED pause or not, the BOE are never going to be higher than the FED or lower than the ECB.  

 

They will be higher than the FED. They will need to be.

[DurhamBorn]

48 minutes ago, Ash4781b said:

Head in hands moment . They are chasing the interest rate upwards. We’ll be told base will hit 6% before we know it.

Uk has several alternatives,but that shill does not want to take them.Sending back a million immigrants,slashing welfare,freezing state pennsions etc.I would say the UK has never before in an interest raising cycle had more alternatives.Its just the polos have no guts to do anything.

As you say they will just keep along the same disastrous roadmap.The one that also saw two fantastic young people murdered by Africans.

[desertorchid]

9 minutes ago, feed said:

FED pause or not, the BOE are never going to be higher than the FED or lower than the ECB.  

 

Historically UK rates were always a touch above the US. It just the way it was. This norm broke in 2008

[DurhamBorn]

6 minutes ago, Yadda yadda yadda said:

They're morons, no doubt about that. Say mortgage increases were going to take £200 per month from mortgagees on average. What they want to do is get banks to adjust that so that those that can't afford the £200 pay only an extra £100 but that means that rates go higher and everyone else ends up paying £250. As part of the disinflationary impact of rates is caused by repossessions this idea reduces their impact and forces rates even higher.

Removing pain from mortgagees also means focussing more of it on businesses.

They're in a panic. They have fucked up. At some point they need to switch to real terms public spending cuts. They're cowards and will only do that when forced. People with mortgages, excluding BTL, tend to have jobs. By increasing the share of pain experienced by mortgage holders they're again shifting the burden onto some workers and away from benefits recipients. Although there are some assumptions there.

They will be higher than the FED. They will need to be.

100% what they are doing,they are moving the pain onto mortgage holders rather than cut bennies or pensions.Its as simple as that.Like iv always said the roadmap showed them making the less than half contributing take their pain and everyone elses,it really is shocking.

[feed]

8 minutes ago, Yadda yadda yadda said:

They will be higher than the FED. They will need to be.

They needed to go higher early '22.  But they didn't.  Need doesn't mean much.  

When the FED turns, the narrative will turn and the BOE will follow.  There will be lag of course.  

[MrXxxx]

20 hours ago, DurhamBorn said:

https://www.telegraph.co.uk/business/2023/06/13/epidemic-public-sector-quiet-quitting/?li_source=LI&li_medium=liftigniter-rhr

Quiet quitting.

Again this is driven by bennies and pensions.They see everyone doing nothing as well as or better off than them,so then decide to do as little as they can.Its all feeding in,the poison of monetising welfare etc slowly destroying our economy.

I think this view is not a recent phenomena, but has become more apparent in the last 5-10 years, especially since employers have become less paternalistic [see Japan for example], and the job market/jobs have become more temporal over the years.

For example, my Father was always of the viewpoint "You go to work to pay the bills, work is there to earn money, you don't go there to enjoy it". As a result career didn't matter, additional hours were paid for, and if they weren't they weren't done full stop!. Until recently I have been the polar opposite, focusing on building a career via a salaried position where "The position is x hours but additional hours may be required [and will be expected] to satisfy the requirements of the role", basically "You will work unpaid overtime to complete all your job related tasks". Unfortunately with the latter as the addition hours are not specified a) there is no contractural restriction on their number, and b) if an employer is not paying for these additional hours they will be less discriminatory about their need/how essential they are, as there is no cost being incurred. As a result this has meant that the working relationships has been open to 'one sided' abuse, and so 'Quiet quitting' is simple readdressing the balance.

The importance of this, and why I have 'changed tack'?...two posted statement on here gave me some 'food for thought'; [the beauty that is Dosbods!],

1. A career is simply a job where you don't get paid for the overtime, and

2. Your career/status evaporates the day you retire...you then simply become "That person who used to do...."

[Yadda yadda yadda]

1 minute ago, feed said:

They needed to go higher early '22.  But they didn't.  Need doesn't mean much.  

When the FED turns, the narrative will turn and the BOE will follow.  There will be lag of course.  

Time will tell but I think inflation will be too high here to maintain that. The USA can insulate itself from producer inflation to a large extent. They produce oil, gas and even coal, still. They have massive industrial capacity. They have an onshoring policy. They still have the reserve currency.

The UK has very little industrial capacity compared to consumption. I think that UK, and possibly EU interest rates, are going to shift regime from being lower than US to being above. This may take several years as the impact of interest rate increases here will be stronger and depressionary. At least in the medium term. We could have a crisis moment.

I expect interest rate in the UK to be higher than in the US by the end of 2025. I could be wrong.

[Yadda yadda yadda]

10 minutes ago, MrXxxx said:

I think this view is not a recent phenomena, but has become more apparent in the last 5-10 years, especially since employers have become less paternalistic [see Japan for example], and the job market/jobs have become more temporal over the years.

For example, my Father was always of the viewpoint "You go to work to pay the bills, work is there to earn money, you don't go there to enjoy it". As a result career didn't matter, additional hours were paid for, and if they weren't they weren't done full stop!. Until recently I have been the polar opposite, focusing on building a career via a salaried position where "The position is x hours but additional hours may be required [and will be expected] to satisfy the requirements of the role", basically "You will work unpaid overtime to complete all your job related tasks". Unfortunately with the latter as the addition hours are not specified a) there is no contractural restriction on their number, and b) if an employer is not paying for these additional hours they will be less discriminatory about their need/how essential they are, as there is no cost being incurred. As a result this has meant that the working relationships has been open to 'one sided' abuse, and so 'Quiet quitting' is simple readdressing the balance.

The importance of this, and why I have 'changed tack'?...two posted statement on here gave me some 'food for thought'; [the beauty that is Dosbods!],

1. A career is simply a job where you don't get paid for the overtime, and

2. Your career/status evaporates the day you retire...you then simply become "That person who used to do...."

The career angle only works if you get better jobs and more money over time. Working extra hours unpaid is an investment in increased future earnings. If that promise for future prosperity is broken then there is no incentive to work so hard. The very least you need to see is other people you can relate to moving up into better jobs. That at least provides hope. I'll work hard like they did and I'll get the promotion or move. If people aren't getting better jobs then fuck it, why bother?

Increasingly the promotion ladder is broken. An extra 20 hours of stressful work for a few thousand pounds extra take home. The likes of @JoeDavola have written about this extensively elsewhere on the boards.

[HousePriceMania]

Love this guy...

 

 

[HousePriceMania]

28 minutes ago, desertorchid said:

Historically UK rates were always a touch above the US. It just the way it was. This norm broke in 2008

and IIRC there is a reason for that, no one will buy £s otherwise.

[Bobthebuilder]

Vod and Three to merger?

Vodafone to join with Three to create UK mobile giant - BBC News

 

[GTM]

34 minutes ago, DurhamBorn said:

The one that also saw two fantastic young people murdered by Africans.

And a jannie (school caretaker) who was on his way to work, instead of sitting with his feet up because of a "bad back" or "stress". I wonder what job the scumbag who killed them all will turn out to have had. Yeah, I think we can already guess. Clown world.