Covid bubble about to burst? (Financial)

[hoff135]

Inflation, housing bubble, stockmarket bubble, debt levels off the charts. Dare I say its being going on for a few years but seems they got a bit carried away with the free money.

Tighten rates to stop it everyone goes bust. Leave it to run everything goes up in price and everyone is screaming for a payrise which puts everything up in price again

Seems they allowed everyone to become addicted to cheap money and it's about to run out.

The withdrawal symptoms aren't going to be nice

What do you think?

Me? It will be 2008 on steroids but what do I know

 

[ColinV6]

Can see it on the various car forums I use, threads on how they’ve been priced out of the car market and can’t replace their current car with the same model as the prices are so high and discounts not available.

 

[Ashtree]

Can see it on the various car forums I use, threads on how they’ve been priced out of the car market and can’t replace their current car with the same model as the prices are so high and discounts not available.

Speaking of cars. The amount of car finance debt (PCP) out there, is absolutely mind boggling. Going way before Covid. The thing is an ice sheet in summer…

 

[ColinV6]

Speaking of cars. The amount of car finance debt (PCP) out there, is absolutely mind boggling. Going way before Covid. The thing is an ice sheet in summer…

Ive been there. Forking out £800+ a month for new BMW M cars to get limited use as always working. Must have been daft. I love cars so don’t totally regret doing it but still makes me think!!!

 

[pellow]

I don't know if they planned it or not, but the UK government seems to be happy enough with assets and prices inflating to the moon, will create a lot of tax and opportunities if we can hold on tight enough

 

[Exfarmer]

Can see it on the various car forums I use, threads on how they’ve been priced out of the car market and can’t replace their current car with the same model as the prices are so high and discounts not available.

yes b ut look at the second hand car trade! My 7 year old X3 has increased by at least £5K in the last year. It is due to the lack of chips to build new cars so there are not going to be discounts on new while they are short. However it probably does hide the fact that prices are rising fast and the pricing structure will probably reflect a new reality

 

[Exfarmer]

I don't know if they planned it or not, but the UK government seems to be happy enough with assets and prices inflating to the moon, will create a lot of tax and opportunities if we can hold on tight enough

They want mega inflation to take care of the debt everyone including the government has.

 

[hoff135]

German banks vulnerable to housing bubble: Bundesbank - ET RealEstate

Housing Bubble In Germany: Germany cut the so-called countercyclical buffer for banks to zero at the start of the pandemic but economic growth is now robust and bank lending is rapid, so they should be forced to hold more capital in preparation for a rainy day, the central bank said.

realty.economictimes.indiatimes.com

Sound familiar?

 

[essex man]

They want mega inflation to take care of the debt everyone including the government has.

We've already had a lot of the inflation caused by the massive, covid excused, increase in money supply...UK housing stock has increased in value by half a trillion in last twelve months. Stock market pumped up also.
Finally inflation bleeding through into CPI so action will be taken I guess, though will be delayed as long as possible.
Clearly asset prices have been raised by covid money printing, just a question of how long to hold on to the rising balloon

 

[The Agrarian]

Banks are far better capitalised now than in 2008. So the systemic risk to the whole system is though to be low. However, I agree that bouts of inflation like this usually end up with recession, and a reset of relevant asset values. If, somehow, inflation melts away by the time the YoY monthly inflation readings start to work off last year's jumped up numbers (start of summer), then it might still settle down ok. But we'll see.

 

[beardface]

Speaking of cars. The amount of car finance debt (PCP) out there, is absolutely mind boggling. Going way before Covid. The thing is an ice sheet in summer…

Pcp finance was born out of two things. Car dealers realised that most people who were buying cars on HP were changing them at the end of the agreement. Thus they were partly created to eat up the unnecessary depreciation involved in that model. They were also created by the manufacturers so that they could keep producing cars. They knew that the price of cars was going to inflate year on year due to emmision and safety requirements, but that the price of new cars wouldn't keep up with earnings.

The new style balloon finance available on ag machines emulates this.

 

[The Agrarian]

So who is paying for the uplift in vehicle values, if the balloon type spares the customer?

 

[hoff135]

Well looks like the burst is underway big time now. Central banks lost control, continued to stimulate for far too long. They should have started easing rates up a year ago. Fed will have to go heavy now this week or they have no credibility left after Friday jump in inflation. Bond yields going to the moon today. Time to buckle up!

 

[The Agrarian]

S&P has taken a right hammering last three sessions. Powell has himself between a rock and a hard place.

 

[bobk]

Inflation, housing bubble, stockmarket bubble, debt levels off the charts. Dare I say its being going on for a few years but seems they got a bit carried away with the free money.

Tighten rates to stop it everyone goes bust. Leave it to run everything goes up in price and everyone is screaming for a payrise which puts everything up in price again

Seems they allowed everyone to become addicted to cheap money and it's about to run out.

The withdrawal symptoms aren't going to be nice

What do you think?

Me? It will be 2008 on steroids but what do I know

Nope , banks are covered unlike 2008 .

 

[hoff135]

S&P has taken a right hammering last three sessions. Powell has himself between a rock and a hard place.

10 year bond yield highest in 11 years. Mortgage rates are now over 6% in the states. I believe thats double what it was a few months ago. Surely a major housing correction is on the cards now?

 

[hoff135]

Nope , banks are covered unlike 2008 .

We will find out who's left standing in due course. They told us sub prime lending posed no risk in 06

 

[The Agrarian]

The tide is on the way out...

 

[le bon paysan]

Perfect storm.

 

[wanton dwarf]

Nope , banks are covered unlike 2008 .

Banks are only obliged to keep a certain amount of assets available to cover unforseen costs. Certainly not bullet proof, regardless it is the general public with over extended mortgages and corporations with massive debts - Morrisons springs to mind.