When stocks rebound, WHERE best to invest?

[noTAGlove]

but thought it would be fun to gamble and lose/win money amidst all the volatility.

Definitely more fun when you win, and less fun when you lose.

[mr noble]

This is just massive. Over leveraged debtors are going to get crushed. Housing market is certainly going to crash.

Deep recession incoming.

Let us stick with the mathematics then.

£200k interest only loan at historical typical teaser rates of 2% results in an interest payment of £333/pm.

Market are now pricing in 5% IRs next year. So, mortgage rates will easily reach 7%.

£200k @ 7% is £1167, or an increase of 350%.

BTLers are going to get liquidated, but who cares about them. High LTV buyers are really, really going to suffer.

House prices are based on affordability and that is only going one way.

House prices will tank bring the U.K. into a deep recession. Remember, 1992?

You have been our resident doom-teller since the beginning of this thread all those months ago. I don’t think any of your predictions of immanent armageddon have come close to panning out as badly as you predicted. I doubt this latest forewarning will be anywhere near as bad as you’re suggesting either.

The government had relatively little debt in 1992. Nowadays, high interest rates will cripple the governments books because they won’t be able to afford the debt interest payments on their own massive levels of borrowing. High interest rates simply cannot remain these days or the country goes bust. USA’s predicament is even worse than the UK’s in this regard.

[Raffe]

I don’t think any of your predictions of immanent armageddon have come close to panning out as badly as you predicted.

[noTAGlove]

I am currently buying another property.

I really hope you didn’t at the top of the market.

A lot of leveraged debt? I see that your are trying to convince yourself that the Government really won’t raise interest rates too much. You have to realise that you are dispensable in the Governments eyes.

I am planning to make my true wealth in the recession.

[noTAGlove]

I decided that while I could still bag a couple of good interest rates on BTL and a holiday let mortgage, and while inflation is likely to be high for a few year, it ought to be a good time to take on a massive debt to buy prime UK property.

I expect the inflation rate (house price appreciation) to be 2 to 3 times what the mortgage rate is, so in effect, the borrowing is free.

But going on my recent run of luck with investing, I’ll be having the houses repossessed and will be bankrupt by next Christmas.

Best of luck to you Mr Noble.

Money is made in a bull market, but wealth is made in a recession.

Got my eye on a holiday home on Salcombe. But, I am waiting a couple of years for the sh1t to properly hit the fan, then I will be making a rock bottom cash offer.

[mr noble]

Good luck to you.


My figures and forecasts remain exactly the same as they did a year ago when the plan was made. 5 year fixed loans and a growing staycation market should mean that the plan is fine.

The price paid for the property is less important if you’re planning to own it for decades. However, I remember many people making the exact same gloomy predictions in 2008, and by 2010, seriously wishing that’d not panic sold their properties.

I don’t disagree at all that there is going to be a lot of turbulence in the housing market to come. I just find your way of shouting “doooom” from the rooftops has always been a little OTT. You dont know who’s listening and how credulous they may be.

[Daveya.]

Good luck waiting for Salcombe prices to crash

[Montello]

Good luck waiting for Salcombe prices to crash

That’s what I thought… the Salcombe Set are not going to be impacted by any recession regardless of the depth.

[noTAGlove]

Good luck waiting for Salcombe prices to crash

That what they said in 1987.

[Mj2k]

That what they said in 1987.

Ah yes, 1987, the year that saw average UK house prices increase Q1 +14.7%, Q2 +16.1%, Q3 +16.2% and Q4 +12.0%.

[noTAGlove]

Let's hope interest rates don't exceed 5.5%. What you mean the money markets have already priced in higher than this from March 2023?

[noTAGlove]

Ah yes, 1987, the year that saw average UK house prices increase Q1 +14.7%, Q2 +16.1%, Q3 +16.2% and Q4 +12.0%.

Exactly!

My house has increased in value 500% since year 2000.

In the same period inflation has increased by around 50%.

I am fully expecting my house to retreat to 2008 levels, around half of what it is worth now, and I’ll be very happy for the youth of today.

Only people who benefit from massive HPI are speculators, BTLers and downsizers. Yet, the majority seem to think it is great thing.

Not just happy, it needs to happen for the good of the country. It will be painful, and the speculators and over leveraged will be wiped out.

Only takes interest rates to get to 6% which is fully priced in by the markets.

Mortgage rates will be 8%, a four fold increase in servicing debt for many.

It doesn’t matter that the BoE does not want to raise interest rates too much. It is out of their hands as per the current swap rates.

The markets are controlling borrowing rates and they are only going one way.

[mjc1216]

Exactly!

My house has increased in value 500% since year 2000.

In the same period inflation has increased by around 50%.

I am fully expecting my house to retreat to 2008 levels, around half of what it is worth now, and I’ll be very happy for the youth of today.

Only people who benefit from massive HPI are speculators, BTLers and downsizers. Yet, the majority seem to think it is great thing.

Not just happy, it needs to happen for the good of the country. It will be painful, and the speculators and over leveraged will be wiped out.

Only takes interest rates to get to 6% which is fully priced in by the markets.

Mortgage rates will be 8%, a four fold increase in servicing debt for many.

It doesn’t matter that the BoE does not want to raise interest rates too much. It is out of their hands as per the current swap rates.

The markets are controlling borrowing rates and they are only going one way.

You really do talk rubbish...even in the last housing crash property only fell on average 26%.

If you are so confident it will fall 50% i will put £500 in the fund raiser when it does if you put £500 in the fund raiser when it dosen't.

[noTAGlove]

You really do talk rubbish...even in the last housing crash property only fell on average 26%.

If you are so confident it will fall 50% i will put £500 in the fund raiser when it does if you put £500 in the fund raiser when it dosen't.

There will be significant variance between flats and houses, and significant regional differences. Of course, country wide we will not see an average of 50% falls, but I predict my house which has had such rampant HPI for 25 years could see 50% drop.

Flat prices fell 40-50% in the SE in the early 90s crash. I remember it well as I was in the market at the time. House prices is SW London, for example, fell a lot less.

The 1990s was really only SE focussed, whereas this time it will be nationwide, given the rampant nationwide HPI

[noTAGlove]

When reading this graph, don't forget that inflation between 1988 and 1995 was nearly 40%, so even if the house price inflation was 0% over the time period, the nominal inflation adjusted fall was -40%. Some houses with real losses of -40 to -45%, will have inflation adjusted losses of over -70%.

Since the early 1990s, London is on a whole another stratospheric level. Especially the dark blue areas.

[Daveya.]

You keep referring to a crash 30 years ago,I remember my house going down 5% in value, yet you think it will be 50% this time .

Prices will stabilise thats for sure, a half price crash though? No, I don't think so

[noTAGlove]

a half price crash though? No, I don't think so

As mentioned above there are raw price falls and inflation adjusted price falls.

Inflation adjusted price falls over several years can easily be 50% or more.

[Mick P]

Every cloud has a silver lining.

Classic cars, motorbikes and all antiques will be snapped up by cash rich foreigners.

They will also invest in uk property.

The tourist trade will do well with foreign tourists.

We will eat more home grown food and use uk based services etc.

That just took a few seconds to think of.

[noTAGlove]

Every cloud has a silver lining.

Classic cars, motorbikes and all antiques will be snapped up by cash rich foreigners.

They will also invest in uk property.

The tourist trade will do well with foreign tourists.

We will eat more home grown food and use uk based services etc.

That just took a few seconds to think of.

Thirty percent of U.K. GBP denominated wealth has just been destroyed in the international arena in less than 12 months.

But, hey foreigners can buy up and strip out our assets.

Beggars belief.

[wileeeeeey]

Must be quite cheap now for US health insurance companies to come in and buy up some NHS trusts.

[Mick P]

Thirty percent of U.K. GBP denominated wealth has just been destroyed in the international arena in less than 12 months.

But, hey foreigners can buy up and strip out our assets.

Beggars belief.

It's no different from a grockle buying a cottage as a holiday home in Devon or Cornwall. The buyer gets his cottage and the local seller gets the money, so both happy. Foreigners have as much right to buy here just as we have the right to buy abroad in lots of countries.

We in the UK buy loads of property abroad, so it works both ways.

- - - Updated - - -

Thirty percent of U.K. GBP denominated wealth has just been destroyed in the international arena in less than 12 months.

But, hey foreigners can buy up and strip out our assets.

Beggars belief.

It's no different from a grockle buying a cottage as a holiday home in Devon or Cornwall. The buyer gets his cottage and the local seller gets the money, so both happy. Foreigners have as much right to buy here just as we have the right to buy abroad in lots of countries.

We in the UK buy loads of property abroad, so it works both ways.

[ryanb741]

The $USD is an outlier as it has performed so well. If we compare sterling to Euro the exchange rate today is still higher than it was in both Aug 2019 and March 2020 (when the pandemic struck).

Having such a high valued currency will create issues for US exporters also

[noTAGlove]

The $USD is an outlier as it has performed so well. If we compare sterling to Euro the exchange rate today is still higher than it was in both Aug 2019 and March 2020 (when the pandemic struck).

Having such a high valued currency will create issues for US exporters also

When the Euro was properly rolled out in 2002, 1 GBP = 1.6 Euro.

Over 20 years we have lost 30% of our purchasing power in the Eurozone.

I would call it the Great British Peso, but that would be an insult to the Peso.

[mr noble]

Bitcoin solves this.

[noTAGlove]

I just find your way of shouting “doooom” from the rooftops has always been a little OTT. You dont know who’s listening and how credulous they may be.

What about those bulls shouting Spacs, memes and sh1tcoins from the rooftops? Where would that have got you over the last 12-18 months? Do you find that OTT?

I remember you got out of a huge SMT position at 1000;well now you’d be 20% further out of pocket.

And I hardly shout from the rooftops. If you can’t handle bearish views then put me on ignore, and then you don’t have to read alternative viewpoints.

But, I am not seeing you making any comment on those raging bulls who ramped spacs , memes and sh1tcoins. Invested heavily in those in the last 12-18 months and you would have properly lost your shirt.

But, I’d say my concerns have been completely founded including;

- QQQ, SPY and DJIA down 30, 25 and 20% respectively - so far

- Emerging markets down 30% - so far

- GBP down 30% (the only thing saving the U.K. stock investor)

- Mortgage rates forecast to be 7.5 to 8% in the next six months.

I think my concerns have been very founded. More so than the rampant bulls(sh1t).

But, do ignore any of my views about the future as my sentiment of the last 12 months was so wrong.

[ryanb741]

What about those bulls shouting Spacs, memes and sh1tcoins from the rooftops? Where would that have got you over the last 12-18 months? Do you find that OTT?

I remember you got out of a huge SMT position at 1000;well now you’d be 20% further out of pocket.

And I hardly shout from the rooftops. If you can’t handle bearish views then put me on ignore, and then you don’t have to read alternative viewpoints.

But, I am not seeing you making any comment on those raging bulls who ramped spacs , memes and sh1tcoins. Invested heavily in those in the last 12-18 months and you would have properly lost your shirt.

But, I’d say my concerns have been completely founded including;

- QQQ, SPY and DJIA down 30, 25 and 20% respectively - so far

- Emerging markets down 30% - so far

- GBP down 30% (the only thing saving the U.K. stock investor)

- Mortgage rates forecast to be 7.5 to 8% in the next six months.

I think my concerns have been very founded. More so than the rampant bulls(sh1t).

But, do ignore any of my views about the future as my sentiment of the last 12 months was so wrong.

Yeah but blue passports so really Brits are all winners innit

[uwtc]

The great thing about having opinions about the market is that eventually you'll be right.

Unfortunately timing is everything, a lesson we all learn eventually.

[Raffe]

Buying more Twitter, Musk has just hanged himself at the court hearing today.

[Bruce]

Anyone know of any bonds higher than this or will more products hit the market in the next week or so

https://www.htb.co.uk/personal-savin...-rate-accounts

[uwtc]

I would expect yields to increase further personally but probably worth taking advantage with a portion of savings at the current rate.

[Raffe]

Anyone know of any bonds higher than this or will more products hit the market in the next week or so

https://www.htb.co.uk/personal-savin...-rate-accounts

You can basically get the same yields for UK Government bonds.

[Adge]

Anyone else thinking long SP500 here for a nice swing trade/rally maybe back up to 400 range?

Oversold and some stabilization today.. also looks to be bouncing off the 200 week MA.

Might throw a few bones at it.

[thegreatdogwood]

You can basically get the same yields for UK Government bonds.

Which makes the UK commercial real estate sector look somewhat overvalued off a typical equilibrium point of risk free + 250 bps. Forget the GFC, the UK commercial property market was always up for a correction entering 2007 running at a negative risk-free premium of about 100 bps.

[Raffe]

Anyone else thinking long SP500 here for a nice swing trade/rally maybe back up to 400 range?

Oversold and some stabilization today.. also looks to be bouncing off the 200 week MA.

Might throw a few bones at it.

Think there is some juice (pun intended) in that trade, but it will be a surprise if you can see $400 anytime soon.

Bought futures yesterday around the lows but unfortunately stopped out overnight when it dropped 50pts to 3,620.

[Kairos]

That’s what I thought… the Salcombe Set are not going to be impacted by any recession regardless of the depth.

Who the hell would want to buy in Salcombe, unless you can arrive by sea? The road from the garage at the junction is always snarled up, especially on the hairpin where you turn left to go to the main car park and boat launch.... in the summer the place is like Piccadilly Circus. Rock (close to where I grew up) is just the same with the Chelsea Set having moved in and usurped the place. Jinx at Rock Marine makes a fortune out of them!

[Montello]

Who the hell would want to buy in Salcombe, unless you can arrive by sea? The road from the garage at the junction is always snarled up, especially on the hairpin where you turn left to go to the main car park and boat launch.... in the summer the place is like Piccadilly Circus. Rock (close to where I grew up) is just the same with the Chelsea Set having moved in and usurped the place. Jinx at Rock Marine makes a fortune out of them!

No idea, Salcombe is not somewhere I aspire to be …

Always find it odd how the London wealthy all flock to the same destinations.

[Bruce]

Credit Suisse apparently in trouble

https://seekingalpha.com/article/454...which-to-avoid

https://www.bloomberg.com/news/artic...-sees-strength

[eoghan101]

BNP Paribas likely an interested party in purchasing some of Credit Suisse.

[Daveya.]

Who the hell would want to buy in Salcombe, unless you can arrive by sea? The road from the garage at the junction is always snarled up, especially on the hairpin where you turn left to go to the main car park and boat launch.... in the summer the place is like Piccadilly Circus. Rock (close to where I grew up) is just the same with the Chelsea Set having moved in and usurped the place. Jinx at Rock Marine makes a fortune out of them!

Simple answer , private beaches

Sent from my XQ-CQ54 using Tapatalk

[demonloop]

Credit Suisse apparently in trouble

https://seekingalpha.com/article/454...which-to-avoid

https://www.bloomberg.com/news/artic...-sees-strength

Deutsche Bank too

[Raffe]

Credit Suisse apparently in trouble

https://seekingalpha.com/article/454...which-to-avoid

https://www.bloomberg.com/news/artic...-sees-strength

Deutsche Bank too

Willing to buy both CS as well as DB on any retail-driven sell-off tomorrow morning. Had to endure a whole weekend of seeing moronic Twitter posts by people who neither understand why banks trade below book nor what a CDS is.

[Macca]

Willing to buy both CS as well as DB on any retail-driven sell-off tomorrow morning. Had to endure a whole weekend of seeing moronic Twitter posts by people who neither understand why banks trade below book nor what a CDS is.

You're an exception though Raffe, I get it things in my line of work drive me nuts too seeing the same mistakes, financially at least you have to be about the most experienced and knowledgeable on here surely

I had to Google some of your post and not ashamed to admit it, I have a rudimentary understanding of trading but you and some others on here are in another universe

And fair play to you all for the expert knowledge

Sent from my CPH2357 using Tapatalk

[Bruce]

You're an exception though Raffe, I get it things in my line of work drive me nuts too seeing the same mistakes, financially at least you have to be about the most experienced and knowledgeable on here surely

I had to Google some of your post and not ashamed to admit it, I have a rudimentary understanding of trading but you and some others on here are in another universe

And fair play to you all for the expert knowledge

Sent from my CPH2357 using Tapatalk

I’m in the novice category.

Why are people talking about CS and making comparisons to the sub prime crash?

[Raffe]

I’m in the novice category.

Why are people talking about CS and making comparisons to the sub prime crash?

Coz they got no clue.

[Raffe]

You're an exception though Raffe, I get it things in my line of work drive me nuts too seeing the same mistakes, financially at least you have to be about the most experienced and knowledgeable on here surely

I had to Google some of your post and not ashamed to admit it, I have a rudimentary understanding of trading but you and some others on here are in another universe

And fair play to you all for the expert knowledge

Sent from my CPH2357 using Tapatalk

[noTAGlove]

Get a room.


Sent from my iPad using Tapatalk

[TKH]

Seems Credit Default Swaps are still capable of doing serious damage
I had thought “lessons learned” or am I missing something? (Highly probable).

https://www.bloomberg.com/news/artic...ear-2009-level

[Raffe]

Seems Credit Default Swaps are still capable of doing serious damage
I had thought “lessons learned” or am I missing something? (Highly probable).

https://www.bloomberg.com/news/artic...ear-2009-level

I am afraid you are mixing up CDS with CDO?

CDS are a cornerstone of the financial system, and a CDS of 250bps is absolutely no indication of a pending default (it's actually closer to predicting a 1% to 2% chance of default).

CDOs where the "innovation" that almost wrecked the system in 2008.

[TKH]

I am afraid you are mixing up CDS with CDO?

CDS are a cornerstone of the financial system, and a CDS of 250bps is absolutely no indication of a pending default (it's actually closer to predicting a 1% to 2% chance of default).

CDOs where the "innovation" that almost wrecked the system in 2008.

Ah ok

So what are repercussions for Credit Suisse as currently news seems to be very negative due to their CDS positions?

[Raffe]

Ah ok

So what are repercussions for Credit Suisse as currently news seems to be very negative due to their CDS positions?

Credit Suisse are not a party of the CDS', they are the underlying. In simple terms,, a CDS is an insurance to cover the risk of default. If the price of a CDS goes up, it means that market participants are reflecting higher risk of default (like an insurance premium going up). But the level that those CDS are trading at is a bit elevated, but it still doesn't say that market participants thing they will go bankrupt. If you are looking at all those idiots that are writing about this on Twitter, they are all using the same picture of CDS rates (=they don't even have access to live prices themselves but are using a screenshot from last week that somebody shared) and they are all copying each other, just adding their own exaggeration for clicks. None of these people have a clue what they are talking about.

I am a bit in a hurry, no time for a long post, but you may want to read this about the current situation with Credit Suisse and this about the instrument CDS.