Credit deflation and the reflation cycle to come.

[Mere mortal]

3 hours ago, UnconventionalWisdom said:

Timing is difficult to achieve. As WICAO said on the other side, you could miss out by following one path waiting for the crash. It's important to look at the figures and facts and make a decision you are happy with. October is crash season but who knows, I wouldn't be surprised if any downturn is blamed on brexit next spring. 

Thanks ... hmmmm yes difficult.. lots of pointers look like we are heading for a fall if not a crash in prices .. 

[leonardratso]

5 hours ago, Mere mortal said:

Hi,

When do you think we will see prices really start to tumble ? I've not long moved back from OZ to UK. Want to buy somewhere to live (currently staying with parents), but nervous to put my cash into the property market right now. So tired of estate agents round here saying " oh we won't be affected by any price crash, it won't happen here blah blah .... then they add another house for sale for 20 grand more than an identical one that's been on the market a year and not sold...

You do right, never believe those lying cunts, they are totally full of shit. I remember the 'financial advisor' in the bank askign if i wouldnt like to buy some bank shares in 2008 since they are now cheap and have infinite upside, i basically told him to GFY  (not in so few words though), but he got my gist and never invited me back again.

[Mere mortal]

Just now, leonardratso said:

You do right, never believe those lying cunts, they are totally full of shit. I remember the 'financial advisor' in the bank askign if i wouldnt like to buy some bank shares in 2008 since they are now cheap and have infinite upside, i basically told him to GFY  (not in so few words though), but he got my gist and never invited me back again.

yep. wankers most of them.... the mind boggles ... one house went on at 299,950 then dropped then they put it up again ... by 50 quid !!! fancy increasing the price of a house by 50 quid ? !!

[leonardratso]

6 minutes ago, Mere mortal said:

yep. wankers most of them.... the mind boggles ... one house went on at 299,950 then dropped then they put it up again ... by 50 quid !!! fancy increasing the price of a house by 50 quid ? !!

i think thats them trying to play mind games like they do with petrol prices, make it 129.9 instead of 130.0 so the buyer thinks they are getting a bargain, of course like most psychological and advertising rubbish, it falls on deaf ears (blind eyes) most of the time and its impact is marginal, but they carry on regardless with it. Unless theres a tax break limit then yes, its a poinless exercise in futility.

Hold steady and trust yourself. Estate agents are merely 1 chromosome away from dog shit.

[Mere mortal]

I agree.... they seem to like me less for being a cash buyer too.... they just rather wrap vendors/buyers up in a chain that keeps collapsing ...

[DurhamBorn]

5 hours ago, Mere mortal said:

Hi,

When do you think we will see prices really start to tumble ? I've not long moved back from OZ to UK. Want to buy somewhere to live (currently staying with parents), but nervous to put my cash into the property market right now. So tired of estate agents round here saying " oh we won't be affected by any price crash, it won't happen here blah blah .... then they add another house for sale for 20 grand more than an identical one that's been on the market a year and not sold...

No idea,likely the top is in or close ,i dont really consider those sort of things as they are pretty much a guess,but road maps arent.At that guess id say the bubble areas might see 15% off within 2 years,but i think top to bottom inflation adjusted over say 8 years might be 60%+

[Mere mortal]

Thanks DurhamBorn

 

[Mere mortal]

14 minutes ago, leonardratso said:

i think thats them trying to play mind games like they do with petrol prices, make it 129.9 instead of 130.0 so the buyer thinks they are getting a bargain, of course like most psychological and advertising rubbish, it falls on deaf ears (blind eyes) most of the time and its impact is marginal, but they carry on regardless with it. Unless theres a tax break limit then yes, its a poinless exercise in futility.

Hold steady and trust yourself. Estate agents are merely 1 chromossome away from dog shit.

 

4 minutes ago, DurhamBorn said:

No idea,likely the top is in or close ,i dont really consider those sort of things as they are pretty much a guess,but road maps arent.At that guess id say the bubble areas might see 15% off within 2 years,but i think top to bottom inflation adjusted over say 8 years might be 60%+

ahhhhhh.... I don't quite get the top to bottom inflation adjusted  60% thing... so you think they could more than half say over 8 years .... yes I'm a dunce I know, amazing I've made any money really ! 

[Democorruptcy]

23 hours ago, DurhamBorn said:

I think it will do very well going forward.Solar will likely be the main focus,but wind has a big place.SSE might bring forward plans to use energy from wind at night to pump water into their hydro dams like huge batteries.Lots of distributed energy with gas likely the main  emergency load.Big oil will likely start to buy much more into the sector and probably not to far into the future.

OK thanks.

I was looking at stuff like Greencoat 6p dividend increasing with RPI.

[dgul]

40 minutes ago, Democorruptcy said:

OK thanks.

I was looking at stuff like Greencoat 6p dividend increasing with RPI.

Things of note:

• Trades at a premium to NAV.
• Has €200m in debt to NAV of €250m.  
• They appear to have been paying a dividend even while making a loss.

No thanks.

[DurhamBorn]

5 hours ago, Mere mortal said:

 

ahhhhhh.... I don't quite get the top to bottom inflation adjusted  60% thing... so you think they could more than half say over 8 years .... yes I'm a dunce I know, amazing I've made any money really ! 

i think they will go down more than half inflation adjusted over the next 8 years yes.

[DurhamBorn]

In the last 22 years the COTS report has never had silver insiders long.Never.Commercials hedge short as insurance for the silver they hold as part of their business.The knack was to watch when they were the least short etc.The commercials have gone net LONG last week,the first time ever.Silver could chop about more yet and could hit new lows,but a big bull market is likely dead ahead.

If anyone wants to understand the COT report the best book on the subject is by Larry Williams called Trade stocks and commodities with the insiders.It has a lot on other sectors,but the PM work is as good as you will find.

[Alifelessbinary]

The housing market, especially in London, has been facing structural issues for over 12 months now. Strangely developers continue to buy major sites, although banks are being more picky about reports on title and lending covenants. While I sense a growing concern, money is still relatively cheap and land is still seen as a good place to park capital. 

Having survived the 2008/2009 bloodbath, I’ve seen how quickly things can change, although things have been much more muted the last few years very different from the champagne parties of the last boom.

Outside of London I’m seeing quite a few unviable sites (from a developers profit perspective) being propped up via HIF (housing infrastructure funding). My personal view is I wouldn’t be surprised with a 30% nominal drop. In real terms this could be much higher, but hardly anyone bothers worry about adjusted figures as the government has succeeded in keeping most people financially illiterate.

At the moment I’m just about to market a zone 1/2 industrial warehouse for a sub-3% yield! Admittedly it has a fairly large outstanding rent review, but it’s still likely to sell for a reversionary yield between 4%-4.5%. Ordinarily my client doesn’t sell much stock, but the industrial market is so bonkers I made a special recommendation. This to me just shows how crazy the ‘everything bubble, has become.

 

 

[Alifelessbinary]

Cattleprod thanks for the useful education on the oil industry and I hope you stick around as you provide another angle to think about. 

Im slightly embarrassed to say I actually own some Hurricane shares, but at least it’s in my high risk account which I view more as gambling than forming part of my investment strategy. 

[sancho panza]

14 hours ago, UnconventionalWisdom said:

This is exactly how the housing crisis got to this point, people reading rich dad, poor dad and thinking it's easy and just about taking chances. When they see HPI it's conformation bias and they go further. School should have taught us to do our homework but these guys just think it's about good debt, bad debt. As DB says, it hurts the most people when market conditions change. 

There's just too many people stacking on one side of the trade.Virtually every person I know thinks property is a one way ticket.It's worse now than in 2007. I have vivid memories still of the tech bubble and the way so many people unfamiliar with the risk of stock trading, pushed themselves in front of the oncoming truck and got mullered in the smack.When this housing bubble unwinds-and it will-the losses will be ruinous for many of the IO BTLers,severely damaging for late entrants (both resi and LL) and pretty painful for anyone leveraged over 50%.

 

13 hours ago, DurhamBorn said:

Its something most people dont understand,but its a law that repeats itself in every cycle.Housing in the UK is a prime example.The sad part is the young buying right now on HTB are the ones who are going to take the most pain.Up here 3 beds on those estates are going on HTB at around £140k (most couples will be on around £40k/£33k after tax,£27k after tax and 2 car lease).I fully expect those prices to be cut in half,but at least 40% down.Not only that those estates will look and be terrible in ten years.The lack of any green space,tiny roads,no parking and 20% social housing ensure it.That means most wont be able to sell because they will be in negative equity and way underwater.The best they can hope for is struggle through with a big mortgage and live forever in a shit house on a shit estate,never be able to save,never be able to retire before ill health or state retirement age.They are locking that in.

 

I think we're going to be in a period where aside from FTB's, building successful chains of transactions will be hard.The amount of people under 45 with the salaries to take out £500k houses will be significantly reduced  given worsening pension provisions, rising rates, deleveraging banking system, rising fuel prices,rising food prices.

Wolf St has a cracking post on rental drops in the USA as some cities depopulate eg Chicago.What will happen in the UK if a large chunk of EU migrants head home?

Longer term,the outlook for sterling is awful and I suspect as it drops,we will see the perfect storm for UK HPI as the UK depopulates and rates rise to defend the BoE pension pot which is held in sterling.

[sancho panza]

1 hour ago, DurhamBorn said:

In the last 22 years the COTS report has never had silver insiders long.Never.Commercials hedge short as insurance for the silver they hold as part of their business.The knack was to watch when they were the least short etc.The commercials have gone net LONG last week,the first time ever.Silver could chop about more yet and could hit new lows,but a big bull market is likely dead ahead.

If anyone wants to understand the COT report the best book on the subject is by Larry Williams called Trade stocks and commodities with the insiders.It has a lot on other sectors,but the PM work is as good as you will find.

 

I think interesting times are coming for PM's.As someone on this thread so wisely said a few weeks back ( might have been you DB)

'How many Turks are regretting their PM purchases?'

Whoever it was,it really stayed with me.

The ongoing emerging market crisis is a lesson for anyone who doesn't look for those top of the market indicators eg the 100 year Argie bond their govt floated to investors.

Also a massive lesson in hedging currency risk.

 

8 hours ago, Mere mortal said:

Thanks ... hmmmm yes difficult.. lots of pointers look like we are heading for a fall if not a crash in prices .. 

Ne

 

I do a regular search on Leicestershire homes for sale,above £550k,changes over 24 hours-last few weeks have seen some changes.over last 7 days there are 17 out of 39 changes for reductions and some are chunky.It's early to say it but the wealthier sellers seem to be reducing into the drop.Time will tell over the next few months

[DurhamBorn]

@sancho panza it was me who mentioned the Turks.It was a day when there was lots of narrative across the press about how gold was a relic etc and doing badly.They failed to spot gold that very day had done its job 100%.It had protected Turks hard earned wealth.If your currency is destroyed gold will save generational wealth.

[sleepwello'nights]

1 hour ago, sancho panza said:

 

I do a regular search on Leicestershire homes for sale above £550k,changes over 24 hours-last few weeks have seen some changes.over last 7 days there are 17 out of 39 changes for reductions and some are chunky. It's early to say it but the wealthier sellers seem to be reducing into the drop. Time will tell over the next few months

Out of curiosity why have you picked that price range. Its a high price range for Leicestershire isn't it? 

[sancho panza]

4 hours ago, sleepwello'nights said:

Out of curiosity why have you picked that price range. Its a high price range for Leicestershire isn't it? 

Basically, I've picked a price range above which I'm generally watching what the 'smart money' is doing and excluding enough of the rest that it's manageable with a two minute flick through and thus a viable daily guide on where we are property wise in terms of liquidity at the coal face.

I say 'smart money',having a big house doesn't mean you're smart.However,it means it'll likely be owned by AB social grades,(I'm generalising here), who are generally better educated, better informed financially and....crucially.....................they may well be small/medium sized business owners and therefore privy to their own order books or mix in circles where informal talk of forward orders is commonplace.

Of note in the last week I offer five examples.The last 4 are all from the same agent.The reason he's interesting is because of his 5 entries in this weeks chart 4 are reductions.He's the sort of guy the ladies who lunch in South and South Eastern Leicestershire( the more moneyed areas) pay attention to and talk about in revered terms at dinner parties.If he's getting on the blower and telling 10% of his punters to cut prices this week,then it's of moderate interest to me.

https://www.jamessellicks.com/leicestershire/sales/from-550000/page-2#list

 

 

Reduced after 4 months by £200k

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^61309&minPrice=550000&maxDaysSinceAdded=7&includeSSTC=false

£1,300,000

Price Change History

28/08/2018	Price Changed: £1,500,000 £1,300,000
18/04/2018	Initial entry found.

 

 

Reduced after 2 months by £115k

https://www.rightmove.co.uk/property-for-sale/property-65832430.html

Price Change History

31/08/2018	Price Changed: £1,100,000 £985,000
18/06/2018	Initial entry found.

 

Reduced after 3 months by £45k

https://www.rightmove.co.uk/property-for-sale/property-65428876.html

£750,000

Guide Price

Price Change History

29/08/2018	Price Changed: £795,000 £750,000
22/05/2018	Initial entry found.

 

Reduced after 10 days by £50k

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^61309&minPrice=550000&maxDaysSinceAdded=7&includeSSTC=false

£950,000

Guide Price

Price Change History

31/08/2018	Price Changed: £1,000,000 £950,000
21/08/2018	Initial entry found

 

Reduced after two weeks by £50k

https://www.rightmove.co.uk/property-for-sale/property-55960143.html

£800,000

Guide Price

Price Change History

31/08/2018	Price Changed: £850,000 £800,000
08/08/2018	Initial entry found.

Price Change History

31/08/2018	Price Changed: £850,000 £800,000
08/08/2018	Initial entry found.

[sancho panza]

5 hours ago, DurhamBorn said:

@sancho panza it was me who mentioned the Turks.It was a day when there was lots of narrative across the press about how gold was a relic etc and doing badly.They failed to spot gold that very day had done its job 100%.It had protected Turks hard earned wealth.If your currency is destroyed gold will save generational wealth.

Many thanks.That phrase has been banging round my head since.Sometimes,a small off the cuff comment contains truths that are more universal than appears at first. I always loved Gordon Ramsey-'The last thing genius learns is simplicity'.

 

The reason I'm up,unable to sleep at 0400 (unusual for me) is that we've had a family bust up and it's caused me to take a deep hard look at me and Mrs P's allocations due to some family issues.As luck would have it,I'll be purchasing some PM miners this week at lower levels than previously.

 

Fascinated by that COT report.Are there any blogs that cover that stuff you'd reccomend?

[macca]

7 hours ago, sancho panza said:

Longer term,the outlook for sterling is awful and I suspect as it drops,we will see the perfect storm for UK HPI as the UK depopulates and rates rise to defend the BoE pension pot which is held in sterling.

There is a good 2nd half interview on KR, worth watching.. 

one of the points made also is that Venezuela imports 90% of its food.. U.K. is around 65%

in a currency crisis people are literally starving to death.. shows how dangerous large populations are and how currency crashes can have devastating effects. 

 

[Barnsey]

1 hour ago, sancho panza said:

The reason I'm up,unable to sleep at 0400 (unusual for me) is that we've had a family bust up and it's caused me to take a deep hard look at me and Mrs P's allocations due to some family issues.As luck would have it,I'll be purchasing some PM miners this week at lower levels than previously.

Sorry to hear that SP, hope all is resolved as swiftly as possible to prevent any more sleepless nights, thanks for all your contributions in recent days, resonated with my thoughts considerably.

Have chucked a few £ in Bullion vault for some Gold, things have looked a little like this before but setting my pessimistic bias aside and looking at the facts and momentum, I'm becoming much more confident a wide reaching Global crisis is very near, really surprised how things have escalated in just a matter of months.

[Barnsey]

On 01/09/2018 at 17:18, dgul said:

I'd throw in a note of caution on this.

IMO the big central banks (US particularly) have a (unstated) mandate to stop gold getting out of control*.  They hold lots of gold, and can sell into the market to stabilise the price.  They can even sell gold they don't actually have (well, I'm sure they'll sell gold certificates for more gold than they've got, happy in the knowledge that as they own the currency they can solve any problems that emerge with that policy).  I don't think they'll do much with normal movements, but will sell if there was a short squeeze.  

I don't think there is a flip-side, particularly -- they don't buy to support when prices are low (except incidentally, to get out of short positions that they've put themselves into).

So, I don't think there's a big probability of a short squeeze spike in gold prices.  But I do think they'll go up a bit (this time) in the event of a general market crash.

Not sure about miners.  They should move with gold, but market crashes are irrational.

[* because increased confidence in gold == decreased confidence in their currencies]

Another factor to consider - Gold linked ETFs. Inevitably creates selling pressure on the underlying. Have to tread carefully, especially if we see a considerable Yuan devaluation ahead.

[Democorruptcy]

14 hours ago, dgul said:

Things of note:

• Trades at a premium to NAV.
• Has €200m in debt to NAV of €250m.  
• They appear to have been paying a dividend even while making a loss.

No thanks.

OK, what do you think about this one? Wind and solar.

https://www.hl.co.uk/shares/shares-search-results/t/the-renewables-infrastructure-group-ord-npv

 

[Democorruptcy]

3 hours ago, sancho panza said:

Of note in the last week I offer five examples.The last 4 are all from the same agent.The reason he's interesting is because of his 5 entries in this weeks chart 4 are reductions.He's the sort of guy the ladies who lunch in South and South Eastern Leicestershire( the more moneyed areas) pay attention to and talk about in revered terms at dinner parties.If he's getting on the blower and telling 10% of his punters to cut prices this week,then it's of moderate interest to me.

At any price including SSTC he has 51 then taking out SSTC 26. 49% sold seems high to me.

Good luck with the bust up.