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Stock Market 2022

Discussion in 'off topic' started by Ponty, Jan 6, 2022.

  1. Ponty

    Ponty pfm Member

    Thing is, you just never know what’s going to happen. For someone looking medium to long term, chances are they are better invested than in cash. Not just stocks, we all know the madness of house prices but look at some of the guys on housepricecrash, sat on the sidelines convinced there would be the mother of all crashes. They’ve been waiting a very long time and still are (paying rent in the meantime). Sure, house prices could easily drop 25%, which would only take us back to pre covid levels. Can’t believe I’ve just written that. The global economy stops and prices didn’t fall. If things really hit the fan, there’s no way any govt will watch tens of thousands of homes be repossessed. Same with pension funds. We know the game is rigged, they’ll just find more ways of doing so, there are plenty of levers yet to pull.
     
    Wright and paulfromcamden like this.
  2. andyoz

    andyoz pfm Member

    They mightn't get as far as repossessions, but negative equity is now a very real scenario.

    Remember, mortgages are a great form of population control... Keep the tax paying worker bees in line for 25 years.

    There's liquidity issues coming
     
  3. Ponty

    Ponty pfm Member

    Yes, no doubt. I had a surreal experience today. Visiting some friends and the driveways really were like keeping up with the Jones. New Defenders, Cayennes, Taycans, Boxters, Range Rovers, Mercs, Beemers, the lot. All under 3 years old. Now, these houses are £350 - £400K. A chunk of change, yes, however, some had £150K+ of vehicles on the drive, many had £100K+. You just know they’re not bought and paid for and even if a lease makes more sense, probably wouldn’t have cash cover for the rentals if their jobs went south. Debt is the only way these expensive cars are sat there. I was probably looked down upon as I drove in with my cheap Subaru.
     
    Snufkin likes this.
  4. davidsrsb

    davidsrsb pfm Member

    Prices in Singapore and Malaysia fell from the 2008 peak to about 70%. Then they stagnated until recently,, creeping up to about 80% of the peak in the last 12 months.
     
  5. Ellenor

    Ellenor pfm Member

    It’s funny how these people look down on you. I find the same thing. I actually find it amusing watching people trying to be something they’re not.
     
  6. Ponty

    Ponty pfm Member

    I no doubt lowered the tone. A Japanese car just doesn’t cut the mustard. The driver was even wearing a Casio watch.
     
  7. paulfromcamden

    paulfromcamden Baffled

    Knee deep in Range Rovers and Porkers in our street. On sunny weekends the vintage E-Types and Astons come out the garages. I've no idea as to the finances of their owners but with detached houses in the street averaging over £4m now* I suspect some of them have rather deep pockets.

    * I should point out we live in a flat that probably wouldn't cover some of the contents of some of the garages ;-)
     
  8. andyoz

    andyoz pfm Member

    Yeah, that whole scene needs rinsing out...

    Thing is, I think the Fed and other Central banks will do a U turn later this year and start lowering interest rates again. Otherwise, it'll be a shit show
     
    Wright likes this.
  9. davidsrsb

    davidsrsb pfm Member

    I can't see fuel prices crashing for a while and that is what is driving inflation.
    The US has managed to tie up three of the largest oil producers with sanctions and that is strangling supply
     
  10. Ponty

    Ponty pfm Member

    Yeah, that will be the old money in the jag and Aston though. Wealthiest bloke I know drives an absolutely battered HiLux. The residents of the close I visited probably wouldn’t give him time of day, or realise he could buy the whole estate out of petty cash.
     
    paulfromcamden likes this.
  11. matt j

    matt j pfm Member

    You think it will be as soon as that?

    I thought historically they didn't start lowering them until inflation was under control.
     
  12. Ponty

    Ponty pfm Member

    If jobs are lost, people default on mortgages, can’t afford to eat or heat the house (there’s another big energy rise just before winter), the govt will have to helicopter more money in. The answer to a debt problem is always more debt, but we’re in too deep. The natural fallout if left to the markets will see looting and blood on the streets.
     
  13. Ponty

    Ponty pfm Member

  14. andyoz

    andyoz pfm Member

    Yeah, not because it's the prudent thing to do... because they'll literally have no choice.
     
  15. Ponty

    Ponty pfm Member

    Here’s an interesting figure. I’m just sorting out the insurance renewal for a development where I own one of the properties (for my sins I’m on management board). The inflation uplift for rebuild cost is 25% from last year. Holy moly. Premium is up 10%, which I’m viewing as a good result.
     
  16. matt j

    matt j pfm Member

    I assumed you're much better off renting expensive cars because if it all goes south you can just hand them back and aren't left with a £100k+ millstone around your neck. Plus that money you've saved from buying it outright would be better off invested anyway, I thought all expensive cars were financed to some degree for this reason.
     
  17. Joe Hutch

    Joe Hutch Mate of the bloke

    In our road it's mostly Volvos and Audis, though the bloke in the big house at the end of the road must have fallen on hard times, as he's got rid of one of his Aston Martins.
     
  18. matt j

    matt j pfm Member

    I'm obviously a pleb as it is all Kias, Renaults and Citroens around here.
     
  19. Joe Hutch

    Joe Hutch Mate of the bloke

    We're slumming it with a VW Polo, and our next-door neighbour has a beat-up Citroen. The posher cars are at the two ends of the road, for some reason, with a cluster of Volvos, all new or nearly new, down one end.
     
  20. Ponty

    Ponty pfm Member

    The answer depends on a whole raft of variables. Bottom line is if you hand a car back early, you are still liable for the outstanding rentals / debt depending on the type of (unregulated) agreement you have. Chances are, if you are doing it, so are others and will be sold into a distressed market and leave a shortfall. The point about the 350K house / 150K cars is that I doubt very much they had the choice of paying cash, it’s debt all the way.
     

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