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

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12 minutes ago, Plan-b said:

It used to be around 70k and beyond but that's no longer any good in the cities mentioned coupled with student debt and high living costs.

The fact is western prosperity is dropping, particularly in the UK, and it's accelerating and no amount of financial engineering is going to do anything to stop it

It's going to depend on age, but older than 30 i wouldn't have said 70k south/south east was good for at least 10 years. it's ok, but expectations on wages are off.  But then most people live ten years in the past.   

 

[DurhamBorn]

1 minute ago, feed said:

It's going to depend on age, but older than 30 i wouldn't have said 70k south/south east was good for at least 10 years. it's ok, but expectations on wages are off.  But then most people live ten years in the past.   

 

I think my biggest wage ever was around £44k before share options etc,mostly £35k range.However i paid £50k for my house,paid it off in no time and then saw really fast capital formation from good investing and divis etc.Housing ,bennies and mass immigration  have destroyed that route for most.There is still huge money around,the problem is its going more and more to the retired public sector and bennies,the structural systemic bombs are growing at warp speed.

 

[wherebee]

3 hours ago, Pip321 said:

Agree.

The post by @ThoughtCriminal triggered a thought and highlights something I have seen in the market in that mid higher end market is struggling the most. People either can’t or won’t borrow that sort of money.  I think a lot of this is ‘debt perception’…..£400k at 1% is a very different debt than a debt at 7%.

In one country (western) I lived in, we wanted to borrow 600k. The bank was massively pressuring us to borrow 2-2.5 million.  Couldn't understand the lack of desire to be chained to that level of debt.

The 600k was just so we could have a secure home for schooling for 5 years; broke even against renting costs even taking into account a mild house price rise, because of fees and taxes.  Also meant we could live in a safe neighbourhood compared to most rentals.

A big part of the problem, in my view, is the feminisation of divorce laws.  I know a fair number of marriages where the woman has pushed for the biggest house possible, and the bloke had the choice of either going along or facing divorce rape in the courts.

[Axeman123]

A sweeping article about a candidate for the "swimming naked" award:

https://uk.finance.yahoo.com/news/jim-ratcliffe-finally-bitten-off-090000923.html

Ironically if Ineos can survive the coming unpleasantness it holds some incredibly good real assets for the cycle to come, although sadly it is privately held.

[Axeman123]

6 minutes ago, wherebee said:

A big part of the problem, in my view, is the feminisation of divorce laws.  I know a fair number of marriages where the woman has pushed for the biggest house possible, and the bloke had the choice of either going along or facing divorce rape in the courts.

Ironically the big house just pushes the divorce back a few years IMO; next comes the big renovations or stuff like horses, there is always an even bigger house he is expected to go out and work for etc. Every step of the way he is just sweetening the pot for the eventual division of assets and reducing the number of years he will have left in the workforce to try and recover financially after the divorce. 

Cynical I know.

[feed]

1 minute ago, DurhamBorn said:

I think my biggest wage ever was around £44k before share options etc,mostly £35k range.However i paid £50k for my house,paid it off in no time and then saw really fast capital formation from good investing and divis etc.Housing ,bennies and mass immigration  have destroyed that route for most.There is still huge money around,the problem is its going more and more to the retired public sector and bennies,the structural systemic bombs are growing at warp speed.

 

Most i ever earnt was £120k and that sill puts me living in a modest 3 bed on a street that also has a recent immigrant taxi driver wage uplifted on benefits.  

To put it into context, we pay our grads nearly £50k straight out of college (essex) and they're more or less useless for 2~3 years.  70k is not nothing, but anyone expecting anything above basic, south east, on that is off the mark. 

[Yadda yadda yadda]

41 minutes ago, Harley said:

I think you misunderstood.  That (USDGBP) was just an example.  We don't compare against any one such standard.  Far more sophisticated: n asset classes, n dimensional, n relational, n derivative, n value.  A huge topic.

I was merely using your post as an opportunity to make my point rather than critiquing yours. My point is one that I know you fully understand. Value is hard to track and traditional measures are less appropriate than they have been for many years.

[Harley]

3 minutes ago, DurhamBorn said:

I think my biggest wage ever was around £44k before share options etc,mostly £35k range.However i paid £50k for my house,paid it off in no time and then saw really fast capital formation from good investing and divis etc.Housing ,bennies and mass immigration  have destroyed that route for most.There is still huge money around,the problem is its going more and more to the retired public sector and bennies,the structural systemic bombs are growing at warp speed.

 

A good example.  Consume (at decreasing marginal utility) to a point somewhere below income and then hop to say housing (with increasing marginal utility) and then hop to, and then hop to......  No, it does not have to be "unaffordable" housing like it did back then.  If you legitimately cannot afford to hop (i.e. spending all for a real bare existence, not a pseudo "modern standard" one) then be clear and call it what it is - a subsistence wage and get angry and blame the right people not the ones they put in front of you.

[DurhamBorn]

2 minutes ago, Axeman123 said:

A sweeping article about a candidate for the "swimming naked" award:

https://uk.finance.yahoo.com/news/jim-ratcliffe-finally-bitten-off-090000923.html

Ironically if Ineos can survive the coming unpleasantness it holds some incredibly good real assets for the cycle to come, although sadly it is privately held.

I worked for Ineos during Covid for a few months to get my £12.5k tax allowance.The chemical site i was on i knew from 25 years ago,very well invested site.I was shocked when i started how it was then.Falling apart,nothing replaced etc,.Obvious Ineos simply buy up plants and then under invest to increase free cash for a decade etc.i was also shocked how shit they were.There were several young lads who started,some had good potential but they were slowly sacked etc for tiny reasons that should of been managed instead.I decided not to go back.

[Plan-b]

5 minutes ago, feed said:

Most i ever earnt was £120k and that sill puts me living in a modest 3 bed on a street that also has a recent immigrant taxi driver wage uplifted on benefits.  

To put it into context, we pay our grads nearly £50k straight out of college (essex) and they're more or less useless for 2~3 years.  70k is not nothing, but anyone expecting anything above basic, south east, on that is off the mark. 

You pay well..

[Harley]

13 minutes ago, Yadda yadda yadda said:

I was merely using your post as an opportunity to make my point rather than critiquing yours. My point is one that I know you fully understand. Value is hard to track and traditional measures are less appropriate than they have been for many years.

Apologies.  One of the crudest but easiest to look at for a glimpse is the chart measuring gold priced by currency over the years.  It's not the first derivative (gold as the base as some sort of absolute score of "value") but the second derivative (the relationship between each currency in terms of gold).  For us, "value" is hugely multi-faceted but the cost (in your currency) of your (essential and desirable) outgoings is a key one.

https://goldprice.org/spot-gold.html

Edited October 21, 2023 by Harley

[PatronizingGit]

54 minutes ago, feed said:

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/earningsandemploymentfrompayasyouearnrealtimeinformationuk/october2023

75% of PAYE earn less than £3569 a month.  £43k a year before deductions.  

2 decades of wage suppression and we're all low waged workers.   

The main thing is pay to too low.  

 

looking at the GAD state pension sustainability projections from the late 90s, thats where the problem lies. Fewer old people than expected, more working age, costs no higher than expected...the big problem is wage levels for those paying in havent risen at all really. They continued to rise from 1998 to 2001 at a healthy rate, that slowed 2001-2004, and has been stagnant in real terms from 2005 on.

[Castlevania]

27 minutes ago, DurhamBorn said:

I worked for Ineos during Covid for a few months to get my £12.5k tax allowance.The chemical site i was on i knew from 25 years ago,very well invested site.I was shocked when i started how it was then.Falling apart,nothing replaced etc,.Obvious Ineos simply buy up plants and then under invest to increase free cash for a decade etc.i was also shocked how shit they were.There were several young lads who started,some had good potential but they were slowly sacked etc for tiny reasons that should of been managed instead.I decided not to go back.

One of my mates worked for them; and he was very much of the view that they were run by accountants.

[DurhamBorn]

8 minutes ago, Castlevania said:

One of my mates worked for them; and he was very much of the view that they were run by accountants.

I was shocked.The mainn plant was invested,but you could tell they didnt spend on the fabric of the site.They buy up whole sectors though in chems then increase prices,you could say good business,but they seemed like sharks to me and treat their staff like shit,old contracts were good,but anyone new going in was on very poor wages.

[Bobthebuilder]

25 minutes ago, PatronizingGit said:

They continued to rise from 1998 to 2001 at a healthy rate, that slowed 2001-2004, and has been stagnant in real terms from 2005 on.

I wonder why that was so?

In 2000 I was fitting kitchens, a typical example of price work was fitting an integrated dish washer. You got paid £60 for the electric switch, £60 for the plumbing, £60 to fit the machine into place and £20 to fit the door, total £200. After European freedom of movement the price changed to £50 for the whole job, the kitchen fitting business was pretty much done in from that point on, and it just got worse.

 

[feed]

52 minutes ago, Plan-b said:

You pay well..

We pay well, relatively. 

The problem with pay, is just like the problem with IQ.  

It's not that there are a few really low paid people or that average is lower than what it really ought to be.  It's that the majority at 75% is terrifying.  And if you earn a bit more than most, that still doesn't make you a genius.   

People are seeing that their pay is higher than average and asking why can't they afford anything.  They're still poorly paid. 

 

[Starsend]

1 hour ago, DurhamBorn said:

Yes,one of the huge obvious things.I know a few Asian migrants,legal route ones and how they do it.They simply find a UK bloke who no woman here wants,then go to work.He gets married to them in their country,then brings them here on a 2.5 year partner Visa,she blows him every night until she gets the right to remain one,then leaves him the day after to date someone better.I have a good friend who is doing this right now to her "husband" and she even hooks up lonely single blokes with women from her village to repeat.Then the kids come over on 6 month tourist Visas,then go for right to remain once the mother gets hers.There are routes like this everywhere and they are exploited .She even had a false company so the girls have employment history rather than Go Go dancer .Most do end up working,but very low end jobs like cleaning etc,jobs our bennie claiming single mothers should be doing.

The irony is a lot of them end up with worse lives.Boring jobs,shitty little rental houses etc,it doesnt work for anyone really.

I'm sure this kind of thing goes on a lot, no limit to the number of gullible simps out there - but what kind of person could con somebody like that over a period of years; a cold hearted cunt I would say. Personally I believe in karma and some people got a fuckton coming their way.

[King Penda]

20 minutes ago, Bobthebuilder said:

I wonder why that was so?

In 2000 I was fitting kitchens, a typical example of price work was fitting an integrated dish washer. You got paid £60 for the electric switch, £60 for the plumbing, £60 to fit the machine into place and £20 to fit the door, total £200. After European freedom of movement the price changed to £50 for the whole job, the kitchen fitting business was pretty much done in from that point on, and it just got worse.

 

And the same with steel decking on high rise buildings think canary walf

[Bobthebuilder]

5 minutes ago, King Penda said:

And the same with steel decking on high rise buildings think canary walf

I think one of the reasons I see folk on this forum moaning about the cost of trades these days, is because we have no longer a steady stream of hungry young trades moving to the country. In the last few years we have imported IT workers and boat lads who dont know how to use a router or a worktop jig.

[King Penda]

3 minutes ago, Bobthebuilder said:

I think one of the reasons I see folk on this forum moaning about the cost of trades these days, is because we have no longer a steady stream of hungry young trades moving to the country. In the last few years we have imported IT workers and boat lads who dont know how to use a router or a worktop jig.

The ee mob moved into decking and did what my gang often did sleep in the vans . The difference is we went out drinking in pubs etc they drink cans in there fucking vans (I’m told)

[Lightscribe]

40 minutes ago, feed said:

We pay well, relatively. 

The problem with pay, is just like the problem with IQ.  

It's not that there are a few really low paid people or that average is lower than what it really ought to be.  It's that the majority at 75% is terrifying.  And if you earn a bit more than most, that still doesn't make you a genius.   

People are seeing that their pay is higher than average and asking why can't they afford anything.  They're still poorly paid. 

 

It’s the tax on PAYE. Compound that with housing/living costs and likes of student loans (doctors etc) and there’s no reason to aspire to higher progression in a career as a youngster in this country. There’s no incentive and it will continue as more and more become JAMs (just about managing)

Thats why when supposedly intelligent people say their voting Labour as the ‘rich’ should be taxed more. I answer ‘who’s the rich?’ and follow with ‘Theres no such thing as a rich person on PAYE’.

Edited October 21, 2023 by Lightscribe

[King Penda]

37 minutes ago, feed said:

We pay well, relatively. 

The problem with pay, is just like the problem with IQ.  

It's not that there are a few really low paid people or that average is lower than what it really ought to be.  It's that the majority at 75% is terrifying.  And if you earn a bit more than most, that still doesn't make you a genius.   

People are seeing that their pay is higher than average and asking why can't they afford anything.  They're still poorly paid. 

 

It’s not what you earn it’s what you spend that counts this is why anyone with kids and on benefits should be fine if they don’t squander money. If your single and on benefits then you’ve got a problem the money is bare bones

[onlyme]

23 minutes ago, Bobthebuilder said:

I think one of the reasons I see folk on this forum moaning about the cost of trades these days, is because we have no longer a steady stream of hungry young trades moving to the country. In the last few years we have imported IT workers and boat lads who dont know how to use a router or a worktop jig.

As per @Bobthebuilder's trade observations, the 2000-2010's blew a hole in any incentive for youngsters to go into a trade. The government were willing to cut the legs from under the whole industry and the reaction was obviously not to join it. Hence the shortage now, the continuing lack of mistrust in going into a trade (foever changing regs doesn't help) and it will get worse because of the age profile of those still in it and not long from retirement. It wasn't just a cheap coffee at Pret the chattering classes were after, the situation explained Brexit and spitting of feathers after it.

[King Penda]

1 minute ago, Lightscribe said:

It’s the tax on PAYE. Compound that with housing/living costs and likes of student loans (doctors etc) and there’s no reason to aspire to higher progression in a career as a youngster in this country. There’s no incentive and it will continue as more and more become JAMs (just about managing)

Thats why when supposedly intelligent people say their voting Labour as the ‘rich’ should be taxed more. I answer ‘who’s the rich?’ and follow with ‘Theres no such thing as a rich person on PAYE’.

If you’re a couple earning 30k each in stoke you’re well off compared to most . The number of wankpanzers on drives even on council estates is mind boggling. I was looking at a house for sale it’s around 125k and yep a Range Rover on the drive

[Lightscribe]

6 minutes ago, King Penda said:

If you’re a couple earning 30k each in stoke you’re well off compared to most . The number of wankpanzers on drives even on council estates is mind boggling. I was looking at a house for sale it’s around 125k and yep a Range Rover on the drive

That Range Rover will either be on mobility scheme or finance. Bennies has enabled that. Once the tide goes out, all that ‘look’ of being well off will quickly disappear.