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sleepwello'nights

The Great Financial Crash

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I was reflecting the other day on how I lucked in on the policies taken following the overlending by the banks when the SHTF in 2008. In the previous recession in the early mid 90s when John Major was prime minister large swathes of the population suffered financial hardship as interest rates were increased and employers cut back jobs.

There has been a lot of criticism on the policies taken, from my perspective I was fortunate that interest rates were reduced to historic lows. Do you think things would be better or worse now if different policy decisions had been made?

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Don't think there was anywhere to go on the financial tightrope, trouble is we are still on it. The population of the UK is too large for a country this size for standards of living to ever rise again. the agricultural and industrial revolutions have been and gone along with the empire and we live in a built environment so there is no easy money to be had anymore.

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I think it's the coupling of QE and ZIRP with our overly generous benefit system, triple lock and BTL madness that have caused the situation we find ourselves in. Alone, I think they might have got away QE and ZIRP for a few years much as the USA appears to be doing so. We are effectively burning the candle at both ends in the UK.

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If they'd let it crash the old would be poorer and the young would be richer.

The basic policy play seems to be to keep asset prices as high as possible, while keeping the cost of labour as low as possible.

This is why maintaining high levels of immigration is so important to the political establishment. 

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On 3/28/2017 at 07:53, SpectrumFX said:

If they'd let it crash the old would be poorer and the young would be richer.

Yep, and as far as I can see a huge financial crash now is completely unavoidable, it's just a question of how long they can keep it all going before it happens. I have no idea - it really feels to me like it could be months or decades.

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On ‎28‎/‎03‎/‎2017 at 07:53, SpectrumFX said:

If they'd let it crash the old would be poorer and the young would be richer.

As I recall when unemployment hit record highs in the 90s recession youth unemployment was high and large swathes of the population experienced financial hardship. Businesses were closing left, right and centre, house prices fell with lots of owners in negative equity. Even with house prices falling few could afford to buy even if they could get a mortgage.

 

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32 minutes ago, sleepwello'nights said:

As I recall when unemployment hit record highs in the 90s recession youth unemployment was high and large swathes of the population experienced financial hardship. Businesses were closing left, right and centre, house prices fell with lots of owners in negative equity. Even with house prices falling few could afford to buy even if they could get a mortgage.

 

I remember it well. I spent 6 years i could have been working wasting my time doing A levels, resitting A levels, and then doing a pointless degree at an ex-polytechnic. Then I graduated into the recession. I spent 6 months on the dole, and then got a job which i could have got straight from school at 16 :)

 

 

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49 minutes ago, Fully Detached said:

Yep, and as far as I can see a huge financial crash now is completely unavoidable, it's just a question of how long they can keep it all going before it happens. I have no idea - it really feels to me like it could be months or decades.

That's my take on it. Could be next week, could be 30 years or more. The end gene is now a total crash, and probably a big war. I'm hoping that some massive technological advancements (AI, Mars Colonisation or some such) will come along to save us, but if I'm honest it's just a fantasy and i think we'll get poorer and poorer for decades.

I saw a guy using a plastic fork to get cigarette butts out of an ashtray in a bin yesterday. How fucking depressing is that?

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12 minutes ago, SpectrumFX said:

That's my take on it. Could be next week, could be 30 years or more. The end gene is now a total crash, and probably a big war. I'm hoping that some massive technological advancements (AI, Mars Colonisation or some such) will come along to save us, but if I'm honest it's just a fantasy and i think we'll get poorer and poorer for decades.

I saw a guy using a plastic fork to get cigarette butts out of an ashtray in a bin yesterday. How fucking depressing is that?

I'm fairly sanguine about it in all honesty. We might get poorer in financial terms, but I think we'll become immeasurably richer in other ways.

I don't have a choice really - since it seems unavoidable to me I might as well look for the positives. Who knows, maybe a society will come out of it where a few less people need to dig fag butts out of the bin, maybe it won't. But it can't hurt to try.

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On 3/28/2017 at 07:53, SpectrumFX said:

If they'd let it crash the old would be poorer and the young would be richer.

The basic policy play seems to be to keep asset prices as high as possible, while keeping the cost of labour as low as possible.

This is why maintaining high levels of immigration is so important to the political establishment. 

This ,^^^ this is the end goal right from the outset when it comes to the EU and the elites just look at who`s doing all the lobbying in Brussels 

 

On 3/29/2017 at 19:43, sleepwello'nights said:

As I recall when unemployment hit record highs in the 90s recession youth unemployment was high and large swathes of the population experienced financial hardship. Businesses were closing left, right and centre, house prices fell with lots of owners in negative equity. Even with house prices falling few could afford to buy even if they could get a mortgage.

 

I think if you used the same metrics to calculate youth unemployment now  as they did in the 90`s (then the figures included anyone over the age of 16 who was not in full time education You could claim dole @16 the now it`s 18 IIRC ) the story would not be much different 

Edited by Long time lurking

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3 minutes ago, Long time lurking said:

 

 

I think if you used the same metrics to calculate youth unemployment now  as they did in the 90`s (then the figures included anyone over the age of 16 who was not in full time education You could claim dole @16 the now it`s 18 IIRC ) the story would not be much different 

The school leaving age has been moved to 18, so immediately cutting 16/17 year olds from the figures.  I was talking to someone who is researching this stuff a couple of weeks ago and there are around, iirc, 10 percent of these missing from the data.  Not neets, totally missing.  

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6 minutes ago, One percent said:

The school leaving age has been moved to 18, so immediately cutting 16/17 year olds from the figures.  I was talking to someone who is researching this stuff a couple of weeks ago and there are around, iirc, 10 percent of these missing from the data.  Not neets, totally missing.  

I would not mind betting that 10% never officially left school probably exspeld at some point and never found another school  as it`s down to the parents to do that now

 

 

Edited by Long time lurking

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2 minutes ago, Long time lurking said:

I would not mind betting that 10% never officially left school probably exspeld at some point and never found another school  as it`s down to the parents to do that now

 

 

Maybe.  The really worrying thing is that official data just does not know where these young people are or what they are doing.  Black economy?  Madrasahs? Overseas?  Ten percent is a large number of young people to lose 

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1 minute ago, One percent said:

Maybe.  The really worrying thing is that official data just does not know where these young people are or what they are doing.  Black economy?  Madrasahs? Overseas?  Ten percent is a large number of young people to lose 

That`s where my money would go ,i know of a couple of families where there children entered the the family business of drug dealing whilst at school which lead to their expulsion probably out of the figures until they were old enough to claim dole 

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On 29/03/2017 at 19:33, Fully Detached said:

Yep, and as far as I can see a huge financial crash now is completely unavoidable, it's just a question of how long they can keep it all going before it happens. I have no idea - it really feels to me like it could be months or decades.

What are dosbods suggestions for mugs like myself that lived within our means and saved, areas to research for a win out of a financial crash? Middle aged now and still angry dirty (very cheap) renter.

Edited by Caravan Monster
punctuation

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1 hour ago, Caravan Monster said:

What are dosbods suggestions for mugs like myself that lived within our means and saved, areas to research for a win out of a financial crash? Middle aged now and still angry dirty (very cheap) renter.

That really depends on a few things, e.g. what is your definition of "win" in the context of a financial crash? Personally I think it would be near impossible to predict ahead of time what investments you'd have to make to come out the other side better than when you went in. In fact I also think it will be damn near impossible just to hold on to what you've got without taking a loss to some degree.

So on the basis that I expect to take some level of butt-fucking the same as everybody else, here's a post I wrote on HPC in answer to the same question. I still stand by the content, even though it enraged Venger to the point that he felt the need to use his dreaded Halo video on me in response. Ouch...

Quote
  • Invest some in inflation proof assets even if you risk taking a hit on them. Your asset can only go to zero, inflation can go to the moon
  • Invest some in something that provides a utility value if the shit hits - I like land, you can live off it
  • Keep some in cash, nobody really knows whether it will turn out to be king or toilet paper 
  • Invest in your own education and skills across a broad spectrum. A second or third language might be fantastically valuable if there's no life to be had here
  • Invest in your own enjoyment - have some fun now because even if the shit doesn't hit, if you wait until 65 before you decide to start enjoying yourself, you'll have a hard time bungee jumping with a wig and false teeth
  • Stop worrying. Do your best to position yourself, and then let the dice roll. You're being forced to take a gamble, just accept it because there's jack shit you can do about it and there's no right or wrong answer to how to position yourself. Respect yourself for having made educated decisions based on your own research and analysis; that's more than about 95% of the rest of the population bother to do. Some of them will get lucky anyway. That's life, don't hate them for it

 

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33 minutes ago, Fully Detached said:

That really depends on a few things, e.g. what is your definition of "win" in the context of a financial crash? Personally I think it would be near impossible to predict ahead of time what investments you'd have to make to come out the other side better than when you went in. In fact I also think it will be damn near impossible just to hold on to what you've got without taking a loss to some degree.

So on the basis that I expect to take some level of butt-fucking the same as everybody else, here's a post I wrote on HPC in answer to the same question. I still stand by the content, even though it enraged Venger to the point that he felt the need to use his dreaded Halo video on me in response. Ouch...

 

That's a very good list of points.

To my mind the main issue is maintaining sufficient income to keep you going through the crash. For me that means trying to make sure that I'm more emploable than most, so that i can keep an income coming in even if there is significant unemployment, while at the same time building capital so that I have a buffer to get me through any rough patches.

Hopefully the buffer eventually gets big enough that i don't need to work anymore. xD

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43 minutes ago, SpectrumFX said:

That's a very good list of points.

To my mind the main issue is maintaining sufficient income to keep you going through the crash. For me that means trying to make sure that I'm more emploable than most, so that i can keep an income coming in even if there is significant unemployment, while at the same time building capital so that I have a buffer to get me through any rough patches.

Hopefully the buffer eventually gets big enough that i don't need to work anymore. xD

I'm self employed and to be honest I work on the expectation of not being able to maintain current income throughout a crash period, so I would hope that a correction was short and sharp rather than prolonged. To to mitigate that I like to make sure that I'm able to turn my hand to a lot of things in order to ensure an income of some sort, as well as trying to protect my savings instead of spunking it all on an overpriced house. I do think a lot of it is about attitude as much as skills.

It's interesting though - I was just talking over Caravan Monster's post with my wife, in relation to the point about what constitutes winning in the context of a GFC. And the way I look at it now, I'm pretty sure that those of us who aren't leveraged up to the ball sacks are already winning, just not in the ways we might traditionally have judged winning by.

By that I mean that debt slavery impacts mental and physical health, freedom to move around or change career, ability to take a break from work altogether. It alters your entire experience of life to one of unending servitude. And compared to that, the almost total freedom that we have is a truly massive win IMO. So I'm seeing it as already winning, despite all my leveraged home "owner" friends being utterly convinced I'm on the losing side.

Fancy taking Monday off to go to the seaside chaps? Oh, you've got to work, what a pity ;)

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The sad thing for me is that now I understand about FIRE I'm already at pension age. Fortunately I inherited good genes from my parents, seemingly from my mothers side, which means I'm still fit and able enough to do the things I want. I now have the freedom and financial independence to enjoy the life I lead.

I am concerned that I still worry about certain issues in the country and globally, not that I can do much about them anyway. Financially I'm still trying to work out how to maintain an income for later years. That's the reason I follow threads on this topic.

My thoughts are turning to investing in passive index trackers, Vanguard seems to be well regarded but as I don't want to invest direct with them I need to find a platform. Hargreaves Lansdowne get a lot of recommendations but they seem expensive. How risky are the VCTs?

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On ‎29‎/‎03‎/‎2017 at 20:28, SpectrumFX said:

That's my take on it. Could be next week, could be 30 years or more. The end gene is now a total crash, and probably a big war. I'm hoping that some massive technological advancements (AI, Mars Colonisation or some such) will come along to save us, but if I'm honest it's just a fantasy and i think we'll get poorer and poorer for decades.

I saw a guy using a plastic fork to get cigarette butts out of an ashtray in a bin yesterday. How fucking depressing is that?

Not nearly as depressing as seeing a guy using his hands to get cigarette butts out of an ashtray in a bin yesterday.

What kinda gated community do you live in?

Plastic forks!

 

Nothing s coming to save us, we have to save ourselves and each other.

Edited by Carl Fimble
adding serious bit at end

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7 hours ago, Fully Detached said:

That really depends on a few things, e.g. what is your definition of "win" in the context of a financial crash? Personally I think it would be near impossible to predict ahead of time what investments you'd have to make to come out the other side better than when you went in. In fact I also think it will be damn near impossible just to hold on to what you've got without taking a loss to some degree.

So on the basis that I expect to take some level of butt-fucking the same as everybody else, here's a post I wrote on HPC in answer to the same question. I still stand by the content, even though it enraged Venger to the point that he felt the need to use his dreaded Halo video on me in response. Ouch...

 

Wasn't venger a her? I could never work it out, but I'm sure it had tits.

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6 hours ago, sleepwello'nights said:

The sad thing for me is that now I understand about FIRE I'm already at pension age. Fortunately I inherited good genes from my parents, seemingly from my mothers side, which means I'm still fit and able enough to do the things I want. I now have the freedom and financial independence to enjoy the life I lead.

I am concerned that I still worry about certain issues in the country and globally, not that I can do much about them anyway. Financially I'm still trying to work out how to maintain an income for later years. That's the reason I follow threads on this topic.

My thoughts are turning to investing in passive index trackers, Vanguard seems to be well regarded but as I don't want to invest direct with them I need to find a platform. Hargreaves Lansdowne get a lot of recommendations but they seem expensive. How risky are the VCTs?

If you're going to put money into stock markets then passive trackers are the way to go and, as you say, Vanguard are good and cheap. Your alternative is to buy a spread of big cap individual stocks (30+) and do an occasional re-balance (like once a year). It was written for a US audience but, from a stock market investing point of view, this book is pretty much unbeatable:

https://www.amazon.co.uk/Random-Walk-Down-Wall-Street/dp/0393352242

VCTs are risky and have very high volatility. I personally would avoid them unless you have a large total portfolio value (1M+). You might get lucky and make a big return but you might also lose most of it.

HL aren't really expensive by the way, they're just very transparent. So, if you hold unit trusts with them, they'll charge you a bunch of fees but also refund you a lot of the commission.

 

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3 hours ago, spunko2010 said:

Wasn't venger a her? I could never work it out, but I'm sure it had tits.

I've no idea - I do recall Venger posting a picture of a lady wearing an HPC t-shirt or something, but I think that was his/her other half. It wouldn't make any difference to the way I interacted with him / her either way though.

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