Inflation, Inflation, Inflation...

Thrugelmir

Jon_B wrote: »

MMR only models up to 7% I believe.

Regulatory guidance currently to lenders is to stress test residential applications at 7% levels. Rates could well increase without change in BOE base.

mystic_trev

Generali wrote: »

You could try not being a pr1ck.

It appears to be his mission in life.

chucknorris

Thrugelmir wrote: »

Dividend cover is looking very thin for some companies. Worth monitoring the companies shares you hold. There was a raft of bad news in 2015 on the dividend front. In 2016 may well be more to follow.

I don't hold single company shares, also I am for the long run, I don't expect it is going to be an easy ride all the way.

Crashy_Time

chucknorris wrote: »

Thanks, a good link. I do wonder if the fall of the markets attributable to the drop in oil prices (I'm not saying oil is the only drag factor) might have been overdone a bit. Obviously it hits the oil companies hard, and they are very significant companies, but what about the other companies who are consumers and also individual households too, now having more money to spend. Has this been factored into sentiment sufficiently? Or perhaps that just takes a bit longer for the benefit to be fully realised? What do you think?

People don`t have money to spend, and they have too much debt, that is the root of the problem. They have tried to re-inflate the debt monster with QE, it hasn`t worked, now they need to let asset bubbles pop, UK property will be one that goes bang.

Crashy_Time

Generali wrote: »

You could try not being a pr1ck.

The problem with your analysis and Chuck`s is that your economic world view takes things like "buyers" and "consumers" as a given, as if there are hordes of these people just waiting in the wings to take up the slack. People are tapped out and heavily indebted after the biggest credit experiment in history, oil is going to stay low, property is going to crash and markets are going to crash. Tracker funds, cash, and cheap rent or debt free home are the way to go.

chucknorris

Crashy_Time wrote: »

People don`t have money to spend, and they have too much debt,

Having debt doesn't necessarily mean that you don't enjoy a positive cashflow.

Crashy_Time

chucknorris wrote: »

Having debt doesn't necessarily mean that you don't enjoy a positive cashflow.

You are not going to try and argue that this holds true for most of the potential "consumers" and "buyers" in the country though?

chucknorris

Crashy_Time wrote: »

You are not going to try and argue that this holds true for most of the potential "consumers" and "buyers" in the country though?

Just like you, I don't know the actual numbers, although I'd 'guess' that most have a positive or neutral cashflow, i.e. for 'most' households debt isn't increasing. Of course some people can't manage their finances, that will sadly always be true, as well as people who genuinely get caught out by circumstances (although despite the fact that you can't foresee everything, knowing that should lead to people to allow a contingency fund). Butt they will be many households that have mortgage debt, but also enjoy a positive cashflow.

I agree with you about tracker funds and a debt free home though, all my share investments are in tracker funds, and we don't have a mortgage on our home.

Crashy_Time

chucknorris wrote: »

Just like you, I don't know the actual numbers, although I'd 'guess' that most have a positive or neutral cashflow, i.e. for 'most' households debt isn't increasing. Of course some people can't manage their finances, that will sadly always be true, as well as people who genuinely get caught out by circumstances (although despite the fact that you can't foresee everything, knowing that should lead to people to allow a contingency fund). Butt they will be many households that have mortgage debt, but also enjoy a positive cashflow.

http://www.telegraph.co.uk/finance/property/house-prices/12087971/UK-house-price-crash-looms-as-global-asset-prices-unravel.html


You said just Debt at first, not Mortgage debt, but my guess is that many people are not as sensible as you suppose. This article seems to think UK households are "drowning in debt".

chucknorris

Crashy_Time wrote: »

http://www.telegraph.co.uk/finance/property/house-prices/12087971/UK-house-price-crash-looms-as-global-asset-prices-unravel.html


You said just Debt at first, not Mortgage debt, but my guess is that many people are not as sensible as you suppose. This article seems to think UK households are "drowning in debt".

I agree that many people will not be sensible with money, and some will get into trouble, but what I said was:

Having debt doesn't necessarily mean that you don't enjoy a positive cashflow.

Many businesses and individuals have sensible levels of debt, but as you say others do not, there will always be some that can't manage their financial affairs. I'd say it is almost certain that the sensible ones will have mainly mortgage debt and the less sensible ones unsecured credit debt, and somewhere in the middle there will be sensible people successfully managing their finances and saving to buy a house in the future. Debt isn't necessarily a bad thing.