Credit deflation and the reflation cycle to come (part 8)

[Heart's Ease]

15 minutes ago, JMD said:

DB, why do you say lodger value could be worth £140k? I'm intrigued because you don't use figures without reason.  

I'm guessing £450 a month rent. Rough 4% yield.  

 

 

Picked this one up from twitter and thought of you @Harley.

[DurhamBorn]

38 minutes ago, JMD said:

DB, why do you say lodger value could be worth £140k? I'm intrigued because you don't use figures without reason.  

£460 a month for a room here.£5520 a year,but its tax free,so the same as earning £8000 a year.Thats the same as 6% return on £140k.If you went with the 4% drawdown rule a lodger is worth £200k in a 60/40 fund.

I should add its one of the reasons i think more from the same will be a big story of the cycle.My partner has two lodgers and SIPPs all her earnings over the tax allowance.So she adds the tax free lodger money to her living expenses so is able to then SIPP her taxable income.With the lodgers she is on £43k and pays zero income tax 

Edited March 10 by DurhamBorn

[ThoughtCriminal]

This fuckhead is going to use taxpayer money to set up a National Wealth Fund to "invest" in Renewables etc and she's formed a committee with bankers and hedge fund bods to advise her how to spend it. Carney is on it for fucks sake.

 

[DurhamBorn]

4 minutes ago, ThoughtCriminal said:

This fuckhead is going to use taxpayer money to set up a National Wealth Fund to "invest" in Renewables etc and she's formed a committee with bankers and hedge fund bods to advise her how to spend it. Carney is on it for fucks sake.

 

Rachel will show you all once she is in.I rate her very very highly.I wont like a lot of what she does,but i think she has the ability.If you  are reading this Rachel il work under you,,,,,then in the morning work with you 

Edited March 10 by DurhamBorn

[Axeman123]

45 minutes ago, ThoughtCriminal said:

National Wealth Fund

A concept invented to hold a fiscal surplus for the long term to prevent in overwhelming the economy, literally nothing like the circumstances the UK finds itself in.

[ThoughtCriminal]

13 minutes ago, Axeman123 said:

A concept invented to hold a fiscal surplus for the long term to prevent in overwhelming the economy, literally nothing like the circumstances the UK finds itself in.

Exactly. The name has been chosen intentionally to link it in the mind with the Norwegian Sovereign Wealth Fund.

[Errol]

The UK doesn't have any wealth. We'd have to pay off the massive debt first.

[Castlevania]

10 minutes ago, Errol said:

The UK doesn't have any wealth. We'd have to pay off the massive debt first.

£8 trillion in residential housing

[spygirl]

Gordon Brown: UK has to get on war footing for economic growth

https://amp.theguardian.com/business/2024/mar/10/gordon-brown-uk-war-footing-economic-growth-treasury

But the Office for Budget Responsibility, the government’s spending watchdog, said the outlook for the economy “remained challenging” and Brown, prime minister during the 2008 global financial crisis, will say that the way Britain is governed needs to change if there is to be an end to 15 years of stagnation.

He will say: “The way we govern will have to be radically transformed – and government put on a war footing – if Britain is to break free from the vicious low growth, low productivity, and low wage cycle that has seen annual growth halve in the last decade, investment levels stagnate at levels far below our main competitors, the worst productivity performance – less than 0.5% a year – since the Industrial Revolution, and the deepest regional economic inequalities in western Europe.”

Labour’s last prime minister will propose his new National Economic Council should be jointly staffed by the Treasury and the Cabinet Office, working alongside a council of the nations and regions, and have the task of hitting a 3% growth target. Brown will say the economic council should have equal status with the government’s national security council, meeting at least once a week, and twice a week if necessary.

Brown will argue that higher growth can be achieved through an industrial strategy founded on green, digital and medical technologies, linked to an employment and anti-poverty strategy focused on better jobs, skills, and services.

 

[Pip321]

What a $1 deal says about America's office market

Interesting article from the BBC (I know, I know)…..about the challenges facing commercial property in the US. Blaming the new ‘working from home’ culture, there is more at play but the 2 dimensional reporting as ever. No the less, very bearish and interesting reading  

Some properties selling cheap because of voids and ris8ng interest rates so holding costs are too much.

360 Park Avenue South, has been empty since 2021 for redevelopment. The 20-storey building, which sold for $300m (£233m) that year, recently drew headlines after one of the owners handed over its 29% stake to one of its partners, walking away from commitments to fund $45m more in upgrades, in exchange for $1.

And then the fact the cities rely in commercial property taxes….and they are waiting with NY hit but other cities eg Boston in real trouble because it relies very heavily on commercial property tax.

Finally the impact on banks

The issues are especially acute among local and regional firms, some of which, such as New York Community Bank, have already seen shares swoon perilously as investors flee possible trouble.

As banks collapse or reduce their lending, analysts say the situation could spiral, making it harder for people and other firms to get loans and leading to more severe economic slowdown.

Look at the share price of NY community Bank…..interesting.

Link and details below 

https://www.bbc.co.uk/news/business-68472143
 

 

 

Edited March 10 by Pip321

[spygirl]

Opinion The FT View

 

Add to myFT

The uncertain path to Javier Milei’s promised land

Argentina’s president needs to build a coalition to support his radical economic reforms

https://www.ft.com/content/24b6e483-f972-4282-a1ce-3c2106cc50c8#comments-anchor

Blah blah blah.

Top rated comment -

2-a1ce-3c2106cc50c8#comments-anchor

Milei’s campaign pledge to take a chainsaw to the state would seem reckless in much of the world, but it resonated in Argentina. Out-of-control government spending and rampant corruption have bankrupted the state, destroyed the value of the peso and left the nation close to hyperinflation.

Why is it so difficult for the FT to say the word: SOCIALISM.

No it is not corruption that is the reason for Argentina's ills but SOCIALISM. Argentina is a socialists' paradise where unions have lots of power and privileges, as well as workers, where the Government is omnipresent and regulates every single aspect and owns a lot of nationalized companies. There is protectionism and lots of Government spending on social programs and a lot of the population is living off the government handouts.

It is a socialists' paradise, except for full blown communism in places like Cuba or North Korea, probably Argentina and Venezuela are the closest you can get to applying all the Socialist measures you can.

And obviously, like every single time in history, it fails, because socialists run out of other people's money. The problem is, when they control the Central Bank and the printing press, when they run out of other people's money and make it impossible for the private sector to prosper due to Government intervention and high taxes, they resort to expanding the monetary base, thus creating inflation and confiscating all the people's wealth. Which is the ultimate wet dream of socialists, to make everyone equal (equally poor).

So why is it so difficult to name it, why always mask it with "corruption" or "mismanagement". No, the problem is the wrong ideas, the problem is that SOCIALISM DOES NOT WORK.

[ILikeCake]

I mentioned this in the main forum but may be of interest here.  Mrs got a letter last week stating that her employer pension contribution (NHS) is increasing to 23.7% in April.  I knew the pensions were generous but that's obscene.

[ThoughtCriminal]

3 hours ago, DurhamBorn said:

Rachel will show you all once she is in.I rate her very very highly.I wont like a lot of what she does,but i think she has the ability.If you  are reading this Rachel il work under you,,,,,then in the morning work with you 

I think you're in for a major disappointment.

On both counts 😉

[ThoughtCriminal]

Absolutely fucking hopeless.

 

 

[SpectrumFX]

24 minutes ago, ILikeCake said:

I mentioned this in the main forum but may be of interest here.  Mrs got a letter last week stating that her employer pension contribution (NHS) is increasing to 23.7% in April.  I knew the pensions were generous but that's obscene.

The thing that really stands out to me is that none of that money, nor her employee contributors are actually being set aside to fund her pension.

 

[Chewing Grass]

13 minutes ago, ThoughtCriminal said:

Absolutely fucking hopeless.

 

 

But if they wanted to put boots on the ground (officially) in Ukraine they would regardless of anything including legal action or a mandate from the plebs.

The whole thing is a joke (bad one) and a charade.

Not seen Mr Fusion (totally experimental) at Ratcliffe-on-Soar (or any research facility) having any such problem.

The hypocrisy of the establishment is breath-taking and there for all to see.

[DurhamBorn]

1 hour ago, ThoughtCriminal said:

I think you're in for a major disappointment.

On both counts 😉

Sat in her local in Leeds in a Smedley Polo reading The Road to Wigan Pier when she walked in and it would be game on.The treasury would be getting a new roadmap within  a week.

[Red Debt Redemption]

3 hours ago, spygirl said:

Gordon Brown: UK has to get on war footing for economic growth

https://amp.theguardian.com/business/2024/mar/10/gordon-brown-uk-war-footing-economic-growth-treasury

But the Office for Budget Responsibility, the government’s spending watchdog, said the outlook for the economy “remained challenging” and Brown, prime minister during the 2008 global financial crisis, will say that the way Britain is governed needs to change if there is to be an end to 15 years of stagnation.

He will say: “The way we govern will have to be radically transformed – and government put on a war footing – if Britain is to break free from the vicious low growth, low productivity, and low wage cycle that has seen annual growth halve in the last decade, investment levels stagnate at levels far below our main competitors, the worst productivity performance – less than 0.5% a year – since the Industrial Revolution, and the deepest regional economic inequalities in western Europe.”

Labour’s last prime minister will propose his new National Economic Council should be jointly staffed by the Treasury and the Cabinet Office, working alongside a council of the nations and regions, and have the task of hitting a 3% growth target. Brown will say the economic council should have equal status with the government’s national security council, meeting at least once a week, and twice a week if necessary.

Brown will argue that higher growth can be achieved through an industrial strategy founded on green, digital and medical technologies, linked to an employment and anti-poverty strategy focused on better jobs, skills, and services.

 

We've done green, digital and medical over the last few years and its only gotten worse.

[Castlevania]

1 hour ago, ILikeCake said:

I mentioned this in the main forum but may be of interest here.  Mrs got a letter last week stating that her employer pension contribution (NHS) is increasing to 23.7% in April.  I knew the pensions were generous but that's obscene.

That’s to pay the NHS pensions of those already retired.

[Phil]

2 hours ago, ILikeCake said:

I mentioned this in the main forum but may be of interest here.  Mrs got a letter last week stating that her employer pension contribution (NHS) is increasing to 23.7% in April.  I knew the pensions were generous but that's obscene.

Big uni in the midlands pays 27%.

[One percent]

1 hour ago, SpectrumFX said:

The thing that really stands out to me is that none of that money, nor her employee contributors are actually being set aside to fund her pension.

 

Robbing peter to pay paul. A trick as old as the hills 

[sancho panza]

you can see the set up coming here.Mark Carney,someone who got paid millions by British taxpayers to neitehr raise or lower intersts rates for 8 years while infaltion pressures builts.then the Chair of USS pensions Carol Young(uni pensions schemes).C S Venkatakrishnan CEO Barclays.coming together to invest Bristih savers funds.....

Labru basically cant print or tax,so they'regoing to raid savings to pay for their whims n fancies.

https://www.telegraph.co.uk/business/2024/03/10/labour-hires-mark-carney-private-investment-spending-plans/

Rachel Reeves, the shadow chancellor, has appointed some of Britain’s most senior business leaders for advice on raising private investment through its proposed National Wealth Fund. 

Ms Reeves has been forced to find new ways of paying for Labour’s spending promises after Jeremy Hunt used his Budget last week to scrap the non-dom tax regime – a key Labour pledge – and put the money towards cutting national insurance.

Labour has since ruled out a tax on the wealthy to plug the funding gap for its manifesto pledges.

It came after Sir Keir Starmer last month abandoned his flagship pledge to spend £28bn on green investment each year and blamed the country’s poor finances.

The party has promised that each £1 of public money will be backed up by £3 of private sector investment.

Ms Reeves’ advisory committee includes Mr Carney, former Bank of England governor and C S Venkatakrishnan, the chief executive of Barclays, The Sunday Times first reported. 

They are joined by Carol Young, the chief executive of USS, the UK’s largest private pension scheme, plus executives from investment companies Equitix and Brunel Pension.

Edited March 11 by sancho panza

[goldbug9999]

8 hours ago, JMD said:

Not looking for buying/trading advise of course, but do you expect the BTC price to fall back soon (potentially a big correction?), especially as it's next halving event is in April? I believe that cycle highs are typically 12-18 months after each BTC halving - so the recent ramp up in price is unusual, and probably due to the money going into the new ETFs? 

The ETFs are possibly just setting a new equilibrium price, the inflows seem quite steady, this doesnt feel like a blow off top (and Ive been through a decade of bitcoin blow off tops ...). I've been wrong before though 

Edited March 11 by goldbug9999

[Bobthebuilder]

45 minutes ago, sancho panza said:

Mark Carney,someone who got paid millions by British taxpayers to neitehr raise or lower intersts rates for 8 years

To be fair to the bloke he raised interest rates by a quarter of a percentage point, and then dropped them by a quarter of a percentage point. Worth every fucking penny of his salary for doing all that work for 8 years.

Anyone who thinks Ms Reeves is the savior of our economy is deluded at best IMHO.

Let me run with you tonight
I'll take you on a moonlight ride
There's someone I used to see
But she don't give a damn for me
But let me get to the point
Let's roll another joint
And turn the radio loud
I'm too alone to be proud
And you don't know how it feels
You don't know how it feels
To be me
People come, people go
Some grow young, some grow cold
I woke up in between
A memory and a dream

[sancho panza]

The stats here ar eworht knowingbut ,more fundamentally,worth noting i tis being tlaked about.

Either the Graf paymasters have chainged or reality is begigning to dawn

my monis ont ehg raf paymatsers chanign

 

https://www.telegraph.co.uk/business/2024/03/09/pensioners-need-to-prepare-for-something-to-give/

Pensioners must prepare to face a hard truth

The Resolution Foundation calculates that, thanks to the ongoing freeze on tax thresholds, up to 8 million pensioners could experience an average income hit of £1,000. The IFS calculates that the 60pc of pensioners who pay income tax will be £650 worse off a year come 2027, and a hefty £3,000 worse off if they are paying the higher rate of tax.

Cue the complaints: what are the Conservatives thinking, making life more costly for retirees, who have put in the many decades of work and contributions (and happen to make up a core part of the Tory voting bloc)?

 

 

Their outrage is not entirely unjustified. But it is by no means a pensioner-specific problem. Fiscal drag is the ultimate stealth tax – one that is affecting entry-level workers, people at the height of their careers and retirees alike. Millions of people are being made worse-off. The latest calculations from the Office for Budget Responsibility show 3.7 million additional people being pulled into paying income tax by 2028-29, while another 2.7 million workers will be dragged into paying the higher rate, thanks to these freezes.   

Everyone should be up in arms about the tax freezes – especially when the Tory party tweets “we’re cutting your taxes…again” just moments after the Chancellor sat down from delivering his Budget.

The OBR estimates that fiscal drag will pull in an additional £40bn to the Treasury by 2028-29 – four times the amount of the Budget’s NI tax cut, which will cost around £10bn. Taxpayers are not fools; they know full well what’s really happening.

But there is a harder truth that needs to be acknowledged. The pension system as it currently exists in the UK is an unsustainable one, yet it has been propped up time and again by successive Tory governments. The pivot towards giveaways for workers isn’t simply welcome: it is also long overdue.

And it is today’s workers, who have yet to claim their state pension, who are at much greater risk of never seeing it. It is one of the greatest cons of public policy, the idea that NI contributions are funnelled away into a pension pot somewhere, with a portion siphoned off for the National Health Service. Nothing of the sort happens. The state pension in Britain is a far less sustainable “pay as you go” system, which dishes out pension payments from yearly tax receipts.

Yes, pensioners have made their contributions and deserve to see the returns. But those returns are being paid for by working-age people today, and those financial burdens are becoming ever greater as age demographics shift. 

Already the costs are overwhelming government spending, with £1 in every £8 going on the state pension (which is estimated to rise to £1 in every £6 over the next five decades). The only way the state pension remains protected – for this generation and certainly for following generations – is to get more people into work, grow the economy and increase tax receipts through sustainable means.

Edited March 11 by sancho panza