The biggest global financial event is gonna hit us soon...

[jpidding]

.....and for most people the last thing they're gonna be thinking about is buying a house! Sure, house prices will have to go down....my 15 year fix at 2.55% 3 years ago is now not available and even 5 year fixes are at 6%+. There is no way that this isn't gonna make prices go down. But it looks like there is gonna be a global perfect storm. All of the indicators are that it's gonna be far worse than the GFC of '08. If derivatives blow up (can't see how they won't) the contagion could collapse the entire system. It will take punters with huge cojones to take the plunge and buy when there's blood on the streets.

Cash in the bank is gonna be vulnerable to bail-ins. It will also be subject to potentially horrific hyperinflation. In the short term PMs can go down. Bitcoin is a lottery. It will be a jungle out there.

[FallingAwake]

3 minutes ago, jpidding said:

.....and for most people the last thing they're gonna be thinking about is buying a house! Sure, house prices will have to go down....my 15 year fix at 2.55% 3 years ago is now not available and even 5 year fixes are at 6%+. There is no way that this isn't gonna make prices go down. But it looks like there is gonna be a global perfect storm. All of the indicators are that it's gonna be far worse than the GFC of '08. If derivatives blow up (can't see how they won't) the contagion could collapse the entire system. It will take punters with huge cojones to take the plunge and buy when there's blood on the streets.

Cash in the bank is gonna be vulnerable to bail-ins. It will also be subject to potentially horrific hyperinflation. In the short term PMs can go down. Bitcoin is a lottery. It will be a jungle out there.

Could you elaborate a lot more on the statement I've bolded?

What indicators suggest something far worse than the GFC?

[scottbeard]

18 minutes ago, jpidding said:

All of the indicators are that it's gonna be far worse than the GFC of '08. If derivatives blow up (can't see how they won't) the contagion could collapse the entire system. It will take punters with huge cojones to take the plunge and buy when there's blood on the streets.

What indicators?

I am still of the view that the GFC was the biggest financial event anyone alive today will ever live to see.

All that's happening now is a HPC and a big recession, which was seen in the 1990s, the 1980s... etc etc

[turkeydogshrimp]

The only thing that crashes economies is war and I don't see us getting bombed anytime soon. 

[jpidding]

11 minutes ago, FallingAwake said:

Could you elaborate a lot more on the statement I've bolded?

What indicators suggest something far worse than the GFC?

Global debt was 195% of global GDP in 2007. Today its 350%. Much of it denominated in USD. Jerome Powell is determined to keep raising rates until inflation is under control. Traditionally this was done by raising rates significantly above the inflation rate to deter further borrowing and encourage saving. With inflation in double figures they wont get there...instead they are intentionally driving a recession to quell demand. The unintended consequences of higher USD rates it to put a lot of strain on global USD borrowers. Google "Swiss National Bank USD swap lines". Banks are now no longer trusting each other in the same way as '08. When the credit markets freeze up all hell will break loose. No one really knows how this will play out. There will certainly be massive winners and losers. 

The crisis of '08 was brought on by the default of Mortgage Backed Securities after the housing bubble burst in the US. The bubble was re-blown and is now bursting again. 30 year rates in the US went from 2.6% in 2021 to 7% now. 

There are multiple bubbles floating around and loads of pins to burst them. Once one goes there will be a knock on effect.

[jpidding]

11 minutes ago, turkeydogshrimp said:

The only thing that crashes economies is war and I don't see us getting bombed anytime soon. 

Did we get bombed in the early 90's? How about in '08?

Stop trolling.

[Stjames83]

It's the end of the global system! The Great Reset! It's here! This time I'm sure!

[turkeydogshrimp]

6 minutes ago, jpidding said:

Did we get bombed in the early 90's? How about in '08?

Stop trolling.

How comes the UK keeps bouncing back and the Soviet Union didn't? 90's and 08 are not true economic collapses of a country. 

[Casual-observer]

21 minutes ago, turkeydogshrimp said:

The only thing that crashes economies is war and I don't see us getting bombed anytime soon. 

That's because we aren't in an old fashioned war....yet. 

What we are migrating to is a modern economic war, similar to the 1930's where the sanctions began to emerge. 

Wall street people are hinting at it already, we are being coached to accept a lower standard of living. 

They won't outright say it as it alludes to them having to admit their economic sanctions have failed. 

 

Edited October 19, 2022 by Casual-observer

[scottbeard]

8 minutes ago, jpidding said:

Global debt was 195% of global GDP in 2007. Today its 350%.

...

Banks are now no longer trusting each other in the same way as '08. When the credit markets freeze up all hell will break loose. No one really knows how this will play out. There will certainly be massive winners and losers. 

Well I agree with the bolded part ... but that also includes you don't forget

I can't speak for other countries but I can certainly say the UK banks are much healthier than they were in 2007, and have more firebreaks between Retail and Investment as well so that the Casino doesn't take down Captain Mainwaring like it did in 2008.

[TheResponsibleHouseBuyer]

19 minutes ago, turkeydogshrimp said:

The only thing that crashes economies is war and I don't see us getting bombed anytime soon. 

Just wait until the nukes go off.

The counter to Ukraine winning the war is always a ultimatum risk that Russia will use nukes.

First tactically, then strategically, then carelessly.

Hopefully NATO or some bold Russian will step in and put a stop. It is still a risk. 

[Casual-observer]

1 minute ago, TheResponsibleHouseBuyer said:

Just wait until the nukes go off.

The counter to Ukraine winning the war is always a ultimatum risk that Russia will use nukes.

First tactically, then strategically, then carelessly.

Hopefully NATO or some bold Russian will step in and put a stop. It is still a risk. 

Economic attrition is the name of the game now. As the sanctions have failed the west has to inevitably become leaner to carry on with the strategy. 

They're just not outright telling you this as the boasting about the sanctions 8 months ago such as turning the Ruble to rubble is still too recent in peoples minds. 

[Horseradish]

1 hour ago, Stjames83 said:

It's the end of the global system!

Except it... is? Not in some tedious, superficial conspiracy way, but in the boring and rather immediately apparent "globalisation is going into reverse" way:

https://www.amazon.co.uk/End-World-Just-Beginning-Globalization/dp/B09CS9P7QC/

And I don't think anyone's particularly happy about that. Sure, we all want houses to be affordable by 100% of people, rather than 50%, or 30% who then rent them out to the rest, but, like, you'd be quite mad to want that kind of a reversal though deglobilisation.

[Horseradish]

1 hour ago, turkeydogshrimp said:

How comes the UK keeps bouncing back and the Soviet Union didn't? 90's and 08 are not true economic collapses of a country. 

Distributed decision making.

[scottbeard]

Just now, Horseradish said:

Sure, we all want houses to be affordable by 100% of people, rather than 50%, or 30% who then rent them out to the rest, but, like, you'd be quite mad to want that kind of a reversal though deglobilisation.

Would you?

Is all globalisation 100% for the best?

Would scaling it back a teensy bit not actually be quite a good idea, given peak oil and the ever increasing cost of lugging stuff round the world, and the fact that globalisation leads to the entire world jamming up when a Japanese power plant gets hit by a wave, or Russia invades Ukraine?

[Sour Mash]

1 hour ago, Casual-observer said:

That's because we aren't in an old fashioned war....yet. 

What we are migrating to is a modern economic war, similar to the 1930's where the sanctions began to emerge. 

Wall street people are hinting at it already, we are being coached to accept a lower standard of living. 

They won't outright say it as it alludes to them having to admit their economic sanctions have failed. 

 

 

Well, that and the fact that we are entering the age of peak oil and all that money printing and deficit running  has finally come up against the real world shortage of energy.

 

I agree that first the bizarre COVID lockdowns and now the insanely stupid energy sanctions are aimed at 'recalibrating' the standard of living that we all enjoy(ed) by providing scapegoats that TPTB can claim were somehow outside of their control.

 

Admitting that the collective West has been living well beyond its means for decades and has now hit the buffers is not on the table.

 

 

[TerryBoi]

4 hours ago, scottbeard said:

What indicators?

I am still of the view that the GFC was the biggest financial event anyone alive today will ever live to see.

All that's happening now is a HPC and a big recession, which was seen in the 1990s, the 1980s... etc etc

Do you see the steepness of the curve on the US inflation forecast I've posted below?

To get that gradient is going to take an extraordinary economic contraction.

I don't know what indicators OP is looking at, but the one below is only one I look at and its magnificent (in the sense of a 3 mile wide meteorite hitting NYC magnificent).

[the_duke_of_hazzard]

6 minutes ago, TerryBoi said:

Do you see the steepness of the curve on the US inflation forecast I've posted below?

To get that gradient is going to take an extraordinary economic contraction.

I don't know what indicators OP is looking at, but the one below is only one I look at and its magnificent (in the sense of a 3 mile wide meteorite hitting NYC magnificent).

I’m looking at spot prices for ttf gas and crude oil and gas is 1.2x what it was a year ago and crude is close to its year old price. Drops in inflation are coming

https://tradingeconomics.com/

 

Edited October 19, 2022 by the_duke_of_hazzard

[nightowl]

6 minutes ago, the_duke_of_hazzard said:

I’m looking at spot prices for ttf gas and crude oil and gas is 1.2x what it was a year ago and crude is close to its year old price. Drops in inflation are coming

https://tradingeconomics.com/

 

It looks like the worst of the gas prices seen over the summer have eased and could lead to a quirk of negative inflation although they still might settle at a higher level than recent years so a drag on people's finances even if inflation technically subsides.

How many people have factored in the demand for gas dropping if only because China's economy keeps shutting up shop everytime someone coughs?

Edited October 19, 2022 by nightowl

[henry the king]

5 hours ago, jpidding said:

.....and for most people the last thing they're gonna be thinking about is buying a house! Sure, house prices will have to go down....my 15 year fix at 2.55% 3 years ago is now not available and even 5 year fixes are at 6%+. There is no way that this isn't gonna make prices go down. But it looks like there is gonna be a global perfect storm. All of the indicators are that it's gonna be far worse than the GFC of '08. If derivatives blow up (can't see how they won't) the contagion could collapse the entire system. It will take punters with huge cojones to take the plunge and buy when there's blood on the streets.

Cash in the bank is gonna be vulnerable to bail-ins. It will also be subject to potentially horrific hyperinflation. In the short term PMs can go down. Bitcoin is a lottery. It will be a jungle out there.

I agree.

Been saying it for a while now.

The global economy can only cope with 0% rates and QE.

Now it has to cope with 5% rates and QT. It is impossible. SOOOO many companies will go broke as they are zombie companies who churn through cash, which is not longer sustainable now cash costs a lot. Same for individuals with things like mortgages they can hardly afford.

This will then spread to the financial industry and we will have a financial crisis. 

That will be what causes the REAL HPC. Even though one is coming from high mortgage rates anyway

Edited October 19, 2022 by henry the king

[petetong]

24 minutes ago, the_duke_of_hazzard said:

I’m looking at spot prices for ttf gas and crude oil and gas is 1.2x what it was a year ago and crude is close to its year old price. Drops in inflation are coming

https://tradingeconomics.com/

 

If you think most inflation comes from energy costs. Government/BOE says it does as it absolves them of any responsibility when in fact Sunak spaffed £500 billion in 20/21 and BOE did QE, which must constitute a fair portion of it.

Edited October 19, 2022 by petetong

[zugzwang]

7 minutes ago, nightowl said:

It looks like the worst of the gas prices seen over the summer have eased and could lead to a quirk of negative inflation although they still might settle at a higher level than recent years so a drag on people's finances even if inflation technically subsides.

How many people have factored in the demand for gas dropping if only because China's economy keeps shutting up shop everytime someone coughs?

You couldn't be more wrong. The Chinese economy was completely open for two years thanks to Zero Covid. China's GDP grew by 2.2% in 2020 and 8.1% in 2021. This year's lockdowns, local in nature and short in duration, were required to suppress transmission of the much less virulent Omicron variant and its derivatives.

Assuming 5% growth in 2022 the Chinese economy will be a whopping 16% bigger than it was three years ago. The UK economy, need I remind you, is still smaller than it was at the end of 2019.

[FallingAwake]

16 minutes ago, zugzwang said:

You couldn't be more wrong. The Chinese economy was completely open for two years thanks to Zero Covid. China's GDP grew by 2.2% in 2020 and 8.1% in 2021. This year's lockdowns, local in nature and short in duration, were required to suppress transmission of the much less virulent Omicron variant and its derivatives.

Assuming 5% growth in 2022 the Chinese economy will be a whopping 16% bigger than it was three years ago. The UK economy, need I remind you, is still smaller than it was at the end of 2019.

China is undoubtedly doing well, but showing %'s is a bit unfair, given that its nominal GDP is $14,340 per capita, while ours is $49,761.

Obviously we'll never catch up with China in overall GDP (since China has a population of 1.4 BILLION, about 20 times our population), but we're doing much better per capita.

However, that's not to take away from China's achievements.

[nightowl]

38 minutes ago, zugzwang said:

You couldn't be more wrong. The Chinese economy was completely open for two years thanks to Zero Covid. China's GDP grew by 2.2% in 2020 and 8.1% in 2021. This year's lockdowns, local in nature and short in duration, were required to suppress transmission of the much less virulent Omicron variant and its derivatives.

Assuming 5% growth in 2022 the Chinese economy will be a whopping 16% bigger than it was three years ago. The UK economy, need I remind you, is still smaller than it was at the end of 2019.

Give zero covid a rest FFS. Just get on that plane to your beloved land if it's so good🙄

42 minutes ago, petetong said:

If you think most inflation comes from energy costs. Government/BOE says it does as it absolves them of any responsibility when in fact Sunak spaffed £500 billion in 20/21 and BOE did QE, which must constitute a fair portion of it.

The trouble is does that new money appear in the cpi/rpi that fast but in asset prices again?   

Overall though the world doesn't need more gas but who buys from who is like musical chairs and should settle once the new patterns are decided.

[Horseradish]

4 hours ago, scottbeard said:

Would you?

Is all globalisation 100% for the best?

Would scaling it back a teensy bit not actually be quite a good idea, given peak oil and the ever increasing cost of lugging stuff round the world, and the fact that globalisation leads to the entire world jamming up when a Japanese power plant gets hit by a wave, or Russia invades Ukraine?

There are absolutely counterpoints from a number of angles, but I broadly here mean that the world economy very much relies on glabilisation, and when you remove Russia and China, and american military protection of trade, then the ruptures are apt to be... violent. Do you want that? Sounds like it sucks to me.