The Lemon Fool

Snorvey wrote:If we have another 1963, I don't want to think how we'll cope.


what? no Tik Tok.? we're doomed

We lived just outside Bakewell from 1961-3 and worked in Sheffield. Never missed a day going into Sheffield, although we did have to go via Bamford on one occasion. That was because Froggatt Edge was blocked by an A40 with a build up of snow underneath. There was a front end loader stationed 24/7 near the top, clearing the snow off the road which had blown from the fields.

The first 6 vehicles met after leaving home were usually a milk lorry, a post office van, a bus and 3 snow ploughs.

And our water froze on the day that the thaw started in March 63.

TJH

tjh290633 wrote:

Snorvey wrote:If we have another 1963, I don't want to think how we'll cope.


what? no Tik Tok.? we're doomed

We lived just outside Bakewell from 1961-3 and worked in Sheffield. Never missed a day going into Sheffield, although we did have to go via Bamford on one occasion. That was because Froggatt Edge was blocked by an A40 with a build up of snow underneath. There was a front end loader stationed 24/7 near the top, clearing the snow off the road which had blown from the fields.

The first 6 vehicles met after leaving home were usually a milk lorry, a post office van, a bus and 3 snow ploughs.

And our water froze on the day that the thaw started in March 63.

TJH

A bus!!

How things change. I fixed a boiler a couple of winters ago for a teacher who was at home. I asked her if she'd had the day off to get the boiler fixed and she breezily said "Oh no I was at home anyway. The weather forecast says there might be snow later so I decided not to go into school today in case they were right".

She still expected me to travel to her house to fix the boiler though!

Snorvey wrote:I have a suspicion that teachers in my part of the world intentionally buy houses in rural locations to fully enjoy their 'snow day' entitlement.

FFS you cannae have the teachers in rural schools commuting from Aberdeen!
That would be mental!

I had a French teacher from Fraserburgh - he would literally refer to Inverness as "the city" while mangling vowels in Garnethill.. "Quel prick?!" is about as much as I recall

scotview wrote:

BT63 wrote:
Not only will inflation fall, but so will asset prices, especially the S&P500 which has a very high correlation with the supply of money and QE.
So if the Fed wants to drain all the Covid cash, the S&P500 will fall by more than half.

So, if I'm thinking of investing in a Vanguard fund, would it be best to invest in one of their USA funds or one of their World funds, after the crash ?

The last time the Fed tried rate rises and QT (in 2018) the S&P500 fell sufficiently to border on a bear market before the Fed flinched then reversed course, cutting rates and adding more QE, sending the S&P to new highs in early 2020 just before the Covid crash.
So the Fed might repeat that, stepping in to support the stock market to avoid a crash, at the expense of inflation.

But I think the US has pushed its luck financially to such an extreme that they might 'turn Japanese', at least in real terms if not nominal terms. Massive bubbles are everywhere. The ascent of the S&P500 (4-fold in a decade) isn't far short of the Nikkei's massive bubble of the 1980s (5-fold in a decade) which led to decades of underperformance, both Japan 1980s and USA 2010s underpinned by poor monetary policy.
Also whenever the S&P500 has been at valuations similar to where it was at the end of 2021, it has never previously given a positive real return over the following 10 - 20 years.

I would go for 'world' rather than 'US' because I think the US is over rated and and most other markets are at a useful discount. It's also a little more diverse.
I would also suggest a broader spread of asset classes than just global shares because things are likely to be very volatile for the next several years. Harry Browne's Permanent Portfolio would be a good start, perhaps with a slightly reduced cash and bond holding.
In the last several months I moved my own portfolio to approximately 5/40/55 (cash/precious metals/equities) and plan to take it to 10/40/50 soon.

Mike4 wrote:
How things change. I fixed a boiler a couple of winters ago for a teacher who was at home. I asked her if she'd had the day off to get the boiler fixed and she breezily said "Oh no I was at home anyway. The weather forecast says there might be snow later so I decided not to go into school today in case they were right".

She still expected me to travel to her house to fix the boiler though!

Goodyear Vector 4 Seasons or Michelin Cross Climate. Usable all year round and even a 2wd with those tyres is better than 4wd on normal tyres in winter.
My wife has Vectors on a humble front-wheel-drive car and claws her way through snow, slush, and mud-smeared roads plus has outstanding road holding on cold wet roads.
Someone once told me how they travelled with relative ease across the Peak District in medium snow on a set of the original Vectors.

BT63 wrote:

Mike4 wrote:
How things change. I fixed a boiler a couple of winters ago for a teacher who was at home. I asked her if she'd had the day off to get the boiler fixed and she breezily said "Oh no I was at home anyway. The weather forecast says there might be snow later so I decided not to go into school today in case they were right".

She still expected me to travel to her house to fix the boiler though!

Goodyear Vector 4 Seasons or Michelin Cross Climate. Usable all year round and even a 2wd with those tyres is better than 4wd on normal tyres in winter.
My wife has Vectors on a humble front-wheel-drive car and claws her way through snow, slush, and mud-smeared roads plus has outstanding road holding on cold wet roads.
Someone once told me how they travelled with relative ease across the Peak District in medium snow on a set of the original Vectors.

Excellent, thanks. I'll look up her number in my old records and forward your advice to her. I'm sure she'll be delighted to hear such a simple solution!

I think you miss my point that. Some people, particularly in government employment, seem to have got so soft that they feel entitled to take the day off work just in case it might snow.

With real incomes steadily shrinking, does it really matter if we are technically not in recession? If we carry on "not in recession" on this path we'll end back up with Victorian standards of living in a couple of decade or so.

Call it what you want. Recession. Not recession. Boom. Bust. The only thing anyone should really care about is is their standard of living increasing... surely that's the whole point of economic growth... that more growth should translate to better standard of living. It's not to score higher numbers than anyone else, its about seeing the standards of living increase for your people.

vand wrote:With real incomes steadily shrinking, does it really matter if we are technically not in recession? If we carry on "not in recession" on this path we'll end back up with Victorian standards of living in a couple of decade or so.

Call it what you want. Recession. Not recession. Boom. Bust. The only thing anyone should really care about is is their standard of living increasing... surely that's the whole point of economic growth... that more growth should translate to better standard of living. It's not to score higher numbers than anyone else, its about seeing the standards of living increase for your people.

How high do standards need to be before it's enough?

BoE

Bubblesofearth wrote:How high do standards need to be before it's enough?

High enough so that people can afford to feed and heat themselves.

Best wishes


Mark.

Mike4 wrote:

tjh290633 wrote:

Snorvey wrote:If we have another 1963, I don't want to think how we'll cope.


what? no Tik Tok.? we're doomed

We lived just outside Bakewell from 1961-3 and worked in Sheffield. Never missed a day going into Sheffield, although we did have to go via Bamford on one occasion. That was because Froggatt Edge was blocked by an A40 with a build up of snow underneath. There was a front end loader stationed 24/7 near the top, clearing the snow off the road which had blown from the fields.

The first 6 vehicles met after leaving home were usually a milk lorry, a post office van, a bus and 3 snow ploughs.

And our water froze on the day that the thaw started in March 63.

TJH

A bus!!

How things change. I fixed a boiler a couple of winters ago for a teacher who was at home. I asked her if she'd had the day off to get the boiler fixed and she breezily said "Oh no I was at home anyway. The weather forecast says there might be snow later so I decided not to go into school today in case they were right".

She still expected me to travel to her house to fix the boiler though!

Can't they be fined if they stay away without permission?

Though I know they don't apply that rule in Scotland and Wales.


Steve

BT63 wrote:

Mike4 wrote:
How things change. I fixed a boiler a couple of winters ago for a teacher who was at home. I asked her if she'd had the day off to get the boiler fixed and she breezily said "Oh no I was at home anyway. The weather forecast says there might be snow later so I decided not to go into school today in case they were right".

She still expected me to travel to her house to fix the boiler though!

Goodyear Vector 4 Seasons or Michelin Cross Climate. Usable all year round and even a 2wd with those tyres is better than 4wd on normal tyres in winter.
My wife has Vectors on a humble front-wheel-drive car and claws her way through snow, slush, and mud-smeared roads plus has outstanding road holding on cold wet roads.
Someone once told me how they travelled with relative ease across the Peak District in medium snow on a set of the original Vectors.

In our case it was a 1960 VW Beetle 1200 on Michelin crossplies. I switched to Michelin X after about 37,000 miles. With the engine over the driven axle it would go anywhere through up to about 4 inches of virgin snow. 6 inches would pack under the flat floor and eventually you Los traction. I carried a coke shovel (thank you EMGB) behind the back seat just in case. Deployed once in Sheffield to get us out onto the main road after 6+ inches in early 1958.

TJH

BT63 wrote:

Mike4 wrote:
How things change. I fixed a boiler a couple of winters ago for a teacher who was at home. I asked her if she'd had the day off to get the boiler fixed and she breezily said "Oh no I was at home anyway. The weather forecast says there might be snow later so I decided not to go into school today in case they were right".

She still expected me to travel to her house to fix the boiler though!

Goodyear Vector 4 Seasons or Michelin Cross Climate. Usable all year round and even a 2wd with those tyres is better than 4wd on normal tyres in winter.
My wife has Vectors on a humble front-wheel-drive car and claws her way through snow, slush, and mud-smeared roads plus has outstanding road holding on cold wet roads.
Someone once told me how they travelled with relative ease across the Peak District in medium snow on a set of the original Vectors.

Gislaved M & S stuck on a Mercedes 300 auto used to slide us at 40mph up and down the windy road to our house in Sweden- where it really knows how to snow- they were amazing, nearly as good as studded.

ADrunkenMarcus wrote:

Bubblesofearth wrote:How high do standards need to be before it's enough?

High enough so that people can afford to feed and heat themselves.

Best wishes


Mark.

So no-one in this country then

BoE

10Y/3M spread is now inverted.
About a clear warning of US recession as you will ever get.

https://fred.stlouisfed.org/series/T10Y3M


On ananecdotal level, I am hearing and sensing that most companies have done a full 180 in terms of hiring and now looking to cut jobs as fast as they were looking to create them only a few months ago. Most big tech firms are now laying off not insignificant numbers of their workers, and many other bluechips also.

While inflation and squeeze on real incomes has been the dominant headline of 2022, I think the narrative will move on to recession and job losses in 2023.

Yes. Yes.

Here's a basic high-level view of one of the problems. We know that producer, input, commodity, wage costs etc have been increasing. We also know that inventory levels have been increasing due to anticipated post-lockdown demands etc. So we've essentially got companies with more expensive inventory and operating costs. Some of this has been passed into the consumer. However, we have already seen some of the big companies report increased revenue but reduced earnings because of this.

Now, if consumers spending significantly contracts then we'll see companies left holding the bag of more expensive inventory and operating costs while revenue actually decreases. Both of these combined will rapidly send earnings off a cliff. We're talking likely 1-2 Qtrs.

That's what I'm anticipating.

BT63 wrote:

scotview wrote:

BT63 wrote:
Not only will inflation fall, but so will asset prices, especially the S&P500 which has a very high correlation with the supply of money and QE.
So if the Fed wants to drain all the Covid cash, the S&P500 will fall by more than half.

So, if I'm thinking of investing in a Vanguard fund, would it be best to invest in one of their USA funds or one of their World funds, after the crash ?

The last time the Fed tried rate rises and QT (in 2018) the S&P500 fell sufficiently to border on a bear market before the Fed flinched then reversed course, cutting rates and adding more QE, sending the S&P to new highs in early 2020 just before the Covid crash.
So the Fed might repeat that, stepping in to support the stock market to avoid a crash, at the expense of inflation.

But I think the US has pushed its luck financially to such an extreme that they might 'turn Japanese', at least in real terms if not nominal terms. Massive bubbles are everywhere. The ascent of the S&P500 (4-fold in a decade) isn't far short of the Nikkei's massive bubble of the 1980s (5-fold in a decade) which led to decades of underperformance, both Japan 1980s and USA 2010s underpinned by poor monetary policy.
Also whenever the S&P500 has been at valuations similar to where it was at the end of 2021, it has never previously given a positive real return over the following 10 - 20 years.

I would go for 'world' rather than 'US' because I think the US is over rated and and most other markets are at a useful discount. It's also a little more diverse.
I would also suggest a broader spread of asset classes than just global shares because things are likely to be very volatile for the next several years. Harry Browne's Permanent Portfolio would be a good start, perhaps with a slightly reduced cash and bond holding.
In the last several months I moved my own portfolio to approximately 5/40/55 (cash/precious metals/equities) and plan to take it to 10/40/50 soon.

I'd implore you rethink your terminology. 'Discount' is investment industry complex PR and marketing spin. Equities are not 'goods and services'. They don't sell at 'discount'. Prices and valuations adjust to risk. It's not that they're 'cheap', it's that they're more risky.

May be time to bump this thread. The recession very likely is coming soon if not already here in the real economy imo.

Businesses revising down the projections everywhere. Job market is rapidly heading south:

https://amp.theguardian.com/business/20 ... c-stresses

vand wrote:May be time to bump this thread. The recession very likely is coming soon if not already here in the real economy imo.

Businesses revising down the projections everywhere. Job market is rapidly heading south:

https://amp.theguardian.com/business/20 ... c-stresses

"Everywhere"?

"Rapidly"?

This is a sensible board so care to extrapolate that argument rationally without sensationalism?

vand wrote:May be time to bump this thread. The recession very likely is coming soon if not already here in the real economy imo.

Businesses revising down the projections everywhere. Job market is rapidly heading south:

https://amp.theguardian.com/business/20 ... c-stresses

I agree a recession is more likely now.

The one thing that has held up in this period of low/zero growth has been the labour market. Now this appears to be weakening. This coupled with low investment, increases in personal taxes, high interest rates, static trade and poor retail sales, this is surely a recipe for GDP contraction?

FD

Well what is clear in the immediate future is that Hunt's taxation and spending plans assume some really monumental spending cuts and budget discipline between now and 2030, which the media have not woken up to. Of course it won't happen, and Labour will take us to Hell in a handcart.

Two interesting articles in today's press. They essentially say much the same thing, and paint a gloomy picture. Even more gloomy with the prospect of the Tories giving up the fight to an unreformed Blairite Labour Party. Margaret Thatcher will be turning in her grave at the thought that all the hard work being thrown away.:

https://www.telegraph.co.uk/politics/20 ... ficit-tax/

The debt timebomb: how MPs have ignored 300 years of economic precedent to splash the cash
The nation's debt has become unsustainable – and it's only going to get worse
In other words, we need to get back to the way Britain has traditionally managed its debt. As Carl Emmerson, the deputy director for the Institute of Fiscal Studies, puts it, crisis spending takes place “for good reasons – we want to help households, businesses, public services”, but “if we are going to want to keep pushing up debt every time there’s a bad shock, I think we do need to be aiming to get it down when we’re not expecting those bad shocks.” And right now, that isn’t the plan.

In Lord Lamont’s view, this makes it “quite likely that public spending will have to be cut”. For Emmerson, barring a surge in growth: “I wouldn’t be surprised if the first 12 months after the next general election sees a net tax rise.”
The alternative is to continue on an unsustainable path, making our eventual reckoning with reality all the more painful.

and a surprisingly insightful article in the Daily Mail:

https://www.dailymail.co.uk/news/articl ... s-ago.html

Why on earth is a Conservative government repeating the mistakes of 50 years ago?
As Keith Joseph argued half a century ago, Britain's problems need more than just a tighter monetary policy. Real structural reform is needed — and that will inevitably be painful, as it was in the early 1980s.