jonb
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..agreed ...no problem here ...the real story is ..
...G Clown got them to build a returns centre up in Scotland near his base....time the HMRC started looking at their returns ..after all the site here is "amazon.co.uk" ....no tax....?....
The problem is that if you sell through Amazon, you have to pay commission to them for the sale. Businesses would prefer customers to order directly, so they don't have to pay that commission, and they can't offer lower prices to pass that saving onto the customer.
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Yeah right, England willingly handing over the last dregs of the empire, thats not going to happen any time soon.
Yes they will. I'm not sure about the figures for Wales, but apart from that, England is probably the country where there is the least support for the Union.
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The government can decide to include or exclude house prices in the indices. Remind me are house prices in the RPI index at the moment or is it in CPI, I forget as Brown switched it from one to the other.
Mortgage payments are in RPI. That of course is a function of house prices, including historical house prices, and current mortgage interest rates.
CPI is the Consumer Price Index. It doesn't include house prices, mortgage payments or anything like.
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Hi,
We might need to borrow around £30k to buy a property later this year / next year. I am currently looking at unsecured loans since we only need to borrow £30k which will be paid back over a couple of years.
1, At the moment we have no debts
2, I could apply for a personal loan 6.1% however the limits seems to be in the order of £15k for an instant decision no strings attached type of application.
If I took out an unsecured loan for £15k would this prevent my partner from taking out a £15k loan via linked credit rating? We would apply to different banks for the loans and each loan would be in our own separate names.
You might ask why not take out a mortgage. Well firstly I don't like the secured part and secondly the property will not be in the UK, so there will be fat chance getting finance when we need it even if it is at a relatively low LTV of 25%.
So I suppose if I take a loan then my partner applies for a loan would it affect her ability to take the loan?
Credit ratings are no longer linked, so no.
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The market change is as a result of some aggressively prices monthly contracts along with the effects of government anti-terror legislation requiring more and more details be provided when you activate the phone.
In ye olde days you could buy a phone with £10 of credit, charge it, turn it on and use it. These days they want bank details and proof of ID even on PAYG phones. If you have to go to that hassle you may as well get a contract phone and get more for your money.
The convienience of PAYG has now gone. I expect we will see phone providers pulling out of the PAYG market and just offering pay-monthly contracts with little or no minimum term.
Incidently, you know in films where a spy buy a PAYG "burn" phone in a sealed box, opens it and uses but no-one ever charges the phone? I think Bourne does it a lot. He doesn't even keep the charger.
I bought a PAYG phone in Tesco for cash not that long ago. I picked it off the shelf and paid cash at the till just like you would for a loaf of bread.
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sometimes this is a false ecconomy, thinking that your contract will rise if you update your phone. my contract is £22pm with £180 worth of calls/texts etc per month, and i never exceed that allowance.
that with a Samsung Galaxy S2 smartphone, but i dont use it, i sold it and kept my older phone, as the phone was new i got £300 for it. when i signed up to a new contract my DD never went up, it actually dropped by 34 pence.
this doesnt happen for everyone though
Switch to a SIM only contract. Mine is £15.32 per month for 300 minutes, unlimited texts and "unlimited" data. I paid £250 for a PAYG Samsung Galaxy S to use with it, and swapped the SIM cards over.
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Exactly.
Intersting thing about Zimbabwe during hyperinflation - apparently the presence of a "stable" currency in which to trade actually softened the worse blows of hyperinflation as trade could still continue amongst the population in USD, there was confidence enoughin it to provide enough stability so that people were will to trade goods for a scrap of paper - something which they were not willing to do withthe zimbabwe dollar.
However, hyperinflation in the US would be different, there would no no common stable mens of exchange - that would make the effects of hyperinflation very much worse.
They would choose a currency of another country. Some of the options might be Canadian Dollar, Euro or Yen. I don't know which one they would go with, but they would go with something.
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What happened to Equitable wasn't down to with-profits. Rather it was a case of over-promising, and then suffering a ruling from Their Lordships that gave all the assets to the retired at the expense of the non-retired.
For boomer-bashers, note that boomers were the big losers from that intergenerational transfer. Just as they are the big losers from the collapse in pensions since then, and particularly since 2008. All the wealth has gone to the already-retired.
It wasn't related to with-profits, but it was the with-profits fund that suffered as a result. People with unit funds had the money transferred to Clerical Medical with no loss to their pension fund.
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But theres a huge difference between Britain and Greece. The UK government can sell its bonds to the Bank of England. Essentially we are able to run to the printing presses by selling our debt to ourselves. And the effect of this in recent years has been plain to see: massive devaluation of the pound against currencies like the US dollar, Australian and NZ dollars and the yen. The only reason we haven't depreciated against the Euro is because the Euro economies for the most part are in a worse situation than ourselves. Greece is not able to do this. It can't devalue it's currency to reflect the real value of its economy because it doesn't have control of the currency.
We have depreciated against the Euro, by about 25%. That is why, for example, British car manufacturing is doing so well at the moment.
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If a company goes bust, then it has neither reason nor the means to continue employing staff. The ex-employees must stand in line with the other creditors making claims. This could be for unpaid wages or unpaid notice periods.
The obvious question is "What difference would it have made if the administrators had consulted the union?". I suggest non at all. The ex-employees would still be in exactly the same position. Any 'consultation' result favouring the ex-employees over other creditors would have resulted in lawsuits from the disadvantaged creditors. Thus the administrators action did not result in any additional losses to the ex-employees and thus they have no claim for damages.
Employees are preferential creditors and do rank ahead of suppliers and so on in terms of getting the money, so that isn't true.
As to what difference it might have made, a few of the stores were taken over by employees with names like "Allworths" and "Wellworths". A consultation process might have led to a few more of these arrangements.
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They will not suffer losses since the bonds are insured through CDS's. Except that the companies like AIG which write the insurance have no assets. Step in the taxpayer.
Actually, that's why they didn't want to agree to it. If they agree, the insurance doesn't pay out, but if it is forced on them it does. I can understand why people who have paid insurance premiums would want to benefit from the cover they paid for.
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This is a common problem, providers won't accept instructions to transfer in funds without an adviser involved and advisers who impement company pension schemes aren't keen to get involved in advising on transfers in for members.
That's because most advisers are not qualified to advise on pension transfers so they are not allowed to do it. You need to look for one who does have that qualification.
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I had a chat with a friend last night and he told me about a family member. He had several well funded pensions and so decided to merge the all into one. The company that he choose to manage his pension went bust, and the story is that he has lost everythinng. Apparently he is not covered by any guarentees at all. So you may want to be careful before merging them all together, make sure you choose a well funded company to go with,
Can anyone confirm that pensions are not covered by government guarentees? I was amazed by my friends story. It sounds like the pension industry is no better than share brokers such as MF Global.
If you put all your pension money in the shares of one company, and that company goes bust, you are not covered by any guarantees, because it is just poor investment performance. "With profits" funds are linked to the performance of the fund management company and they are best avoided - see for example what happened to Equitable Life. Again, that is poor investment performance which isn't covered by guarantees. Other investments should be held in ring-fenced accounts separate from the fund manager's own assets, so if they go bust, your money is still your money, and it would be transferred to another fund manager. If they didn't keep it in a separate ring-fenced account, then your fraud claim would be covered by the government guarantee, but there will be an issue about how much money you should get.
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My gold stash is all physical, all in sovs and brits to avoid CGT. I have a little physical silver but most is with Goldmoney to avoid VAT. If I sold all the silver today, I would be liable for CGT. I want to use up my CGT allowance but I don't want to be out of the market for 30 days in case the price of PM's shoots up.
In the past, many investors used to realise a gain equivalent to the CGT tax-free allowance on the last day of the old tax year, and then buy exactly the same investment back again at the start of the new tax year. But the so-called "bed-and-breakfasting" loophole was closed in 1998.
Now you can't buy the same investment back within 30 days, but you could sell one holding and take the opportunity to buy another to diversify your portfolio - this is known as a 'Bed-&-Spread' strategy.
Question: (for accountants and those with knowledge of the Goldmoney 'Exchange Metals & Currencies' facility)
Would using the Goldmoney 'Exchange Metals & Currencies' facility be legitimate as a bed & spread to realise my annual CGT allowance?
i.e. silver holding exchanged for gold, then 30 days later gold changed back to silver.
Many thanks
Yes, that would work. Another option is to sell your Goldmoney silver, and buy silver somewhere else.
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http://www.telegraph...g-machines.html
Excellent cost effective measures here....
Will these coins be rust proof?
As rust proof as the more recent 1p and 2p coins. Yes, I think they will be fine.
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I'm talking about the 100g ones. The registered bars are only for 1000g and above and sadly, I'm well short of this.
Would there be any reason not to take the Goldmoney ones, are they more difficult to sell on or anything?
If anyone has taken delivery, how are they delievered? If I get a heavy package with 'Goldmoney' on the sign I'm assuming its just a big neon sign saying 'Please rob my house, valubles here'
TIA
100g is not that heavy. It is the maximum weight for a normal 1st class stamp, though by the time you add the envelope, it will be just over the limit.
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"A financial expert who advises footballers said: 'We have known about it for a while and have kept our clients well away from it.'"
so, an insider knows about a Ponzi and says what to the Police?
This knowledge unreported would be aiding and abetting the crime
He would be required to send a money laundering report to the Serious Organised Crime Agency, and I'm sure he did. It is probably still sitting in an unopened post bag somewhere.
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I disagree with your model. Anybody is able to create financial risk out of thin air and banks are no exception, indeed, that's their job. If I came around your house for example and mended a leaky roof in turn you may promise me half a pig as payment, the "money" that has been created "out of thin air" is really an informal contract between us: I'm owed half a pig (asset side of our balance sheet) and you owe half a pig (the liability side of our balance sheet) As with any normal business the two sides net off against one another to zero.
Banks are able to expand their balance sheets using a similar method. Borrowers come in and ask for a loan and the bank reciprocates by creating two new accounts, a credit account which shows up as cash in the bank and a loan account, which is a record of the debt the borrower owes. The money then gets spent into the economy and the debtor has to perform productive work to earn them back and extinguish the debt, over a period of time both the money and debt are destroyed in tandem and the banks are rewarded with a share of the interest.
Banks then are credit creators, and many professional economists such as Steve Keen are prepared to go on record and say so.
They can do that, but if they set up a bank account for the customer, they need to have at least some cash in the vault because the account holder could withdraw the money to spend it. They aren't going to leave it there, otherwise they won't need to borrow the money in the first place.
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but crucially,you still only have £100 in cash
in an ideal world it would work like that,however,the UK left cash reserve lending in 1998 iirc and went onto basel 1 then 2.the latter aiming to create a framework that was more risk sensitive,ensured capital adequacy etc.sadly,it coincided with the last ramp into 2007/8.
as for the ratio(s),it very much depends which measure you use.northern rock went pop with a tier one in excess of 10%
this is the whole underlying problem in that as leverage ramps up through asset values,a deposit base gets created that is quite simply unsustainable.
as per the last bit in bold.your demand deposit-which is what you're spending-gets trasnsferred to someone else(in this case the shop),it remains a demand deposit on another banks balance sheet.the bank that originally you held it with still has it's assets aka the house you're on about and that goes nowhere.
in an ideal world it would work like that,however,the UK left cash reserve lending in 1998 iirc and went onto basel 1 then 2.the latter aiming to create a framework that was more risk sensitive,ensured capital adequacy etc.sadly,it coincided with the last ramp into 2007/8.
The tier 1 ratio is a capital ratio, not a fractional reserve ratio. For example, Northern Rock issues £100 in share capital. That allows them to accept a total of £900 in deposits. Then after holding back their reserve ratio which allows for withdrawals, they can lend out maybe £910. Without issuing more share capital, they can't accept that money back into the bank as deposits, but people could buy more Northern Rock shares with the money. If they got £910 in share capital, they could lend every single penny of that back out to customers, as shareholders don't have the right to ask for their money back.
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http://dailycapitali...the-real-story/
Fractional Reserve Banking: The Real Story
By Keith Weiner, on March 22nd, 2011
There is an old erroneous view of fractional reserve banking.
"Naturally, all fractionally reserved banks are de facto insolvent at all times…"
The Acting Man blog is usually very good, but it published an article by Pater Tenebrarum containing this comment. If there is a weakness in Austrian School thinking surely fractional reserve banking is it.
The myth goes something like this. Banks take in $100 of deposits, and make $1000 of loans, creating the "money" ex nihilo out of thin air. Mr. Tenebrarum does not make this argument in the article, nor have I read him make it previously. But I cannot think of what the statement I quoted above means, if not that.
Think about the bank's balance sheet for a moment. The following examples are presented as being for one bank, but could as easily represent the consolidated balance sheet of the entire banking sector. Ignoring shareholder equity and other complicating factors that would make this analysis harder to follow, the bank takes the deposit:
Assets Liabilities
Cash $100 Depositor account $100
Now assuming they could lend $1000, what would this look like?
Assets Liabilities
Cash $0 Depositor account $100
Loan Portfolio $1000
I am not an accountant, but I don't know how you could make this work!
The first error we must correct is that fractional reserve lending is when the bank lends out *less* than it takes in via deposits (but more than zero). Lending more than it takes in via deposits does not exist.
Mr. Tenebrarum does not give his logic, but we can assume that he is referring to the fact that aggregate deposits in the banking system (and thus bank debt) exceed the amount of "base money" in the system. Let's look at what it would be in a gold standard with fractional reserves, to make it simpler and clearer. First, someone deposits some gold coin into a bank.
Assets Liabilities
Cash 100 oz Depositor account 100 oz
So far, so good. Next, the bank makes a loan of more than zero but less than the total deposited.
Assets Liabilities
Cash 10 oz Depositor account 100 oz
Loan Portfolio 90 oz
It's still solvent, and "total money supply" has not grown yet. But now let's say that the borrower pays the 90 oz to a contractor to build a new house and the contractor deposits the money in the same bank.
Assets Liabilities
Cash 100 oz Depositor accounts 190 oz
Loan Portfolio 90 oz
So what just happened here? First, the size of the balance sheet increased as did the total "money supply" in the system (we will come back to this below). But the balance sheet shows assets to match the liabilities; there is no evidence of insolvency yet. The bank may or may not be insolvent.
To drill down further, we need to introduce the idea of duration. Every deposit has a duration (a demand deposit effectively has zero duration), and every loan of course has a maturity date or a duration also.
So let's go back to the original depositor. He put in 100 oz of gold, asking the bank to keep 10 oz for withdrawal on demand, 15 oz to be withdrawn in 1 year, and 75 oz to be withdrawn in 5 years.
Assets Liabilities
Cash 100 oz Demand deposit account 10 oz
1-year deposit account 15 oz
5-year deposit account 75 oz
Now the bank makes two loans, a 1-year loan of 15 oz and a 5-year loan of 75 oz.
Assets Liabilities
Cash 10 oz Demand deposit account 10 oz
1-year loan portfolio 15 oz 1-year deposit account 15 oz
5-year loan portfolio 75 oz 5-year deposit account 75 oz
This is still a good balance sheet and the bank is solvent. Now let's say the borrowers of those loans pay people who deposit the 90 oz of gold back into the bank as demand deposits.
Assets Liabilities
Cash 100 oz Demand deposit accounts 100 oz
1-year loan portfolio 15 oz 1-year deposit account 15 oz
5-year loan portfolio 75 oz 5-year deposit account 75 oz
There is still no problem. The maturities of the bank's assets match its liabilities. This bank is perfectly solvent. (In the real world, the bank would set aside loan loss reserves out of its own capital to cover the credit risk, and of course it would charge interest at a much higher rate than the default rate.)
Before proceeding to duration mismatch, which is the real fraud and source of insolvency, I want to address the fact that the balance sheet has expanded. Some would argue that the bank has just expanded the "money supply". The answer is that this is, of course, nonsense. The same 100 oz of gold is still in the system. The difference is that credit has been extended. One side of credit is the asset on the books. To the bank, the loans it extended are assets. These assets have real value based on the expectation to be repaid, and they can be sold to other banks, etc. And to the bank, a deposit is a liability. The depositor will have to be paid.
So what has happened is that the bank has increased both its assets and its liabilities by the same amount.
OK, now let's look at borrowing short to lend long, otherwise known as duration mismatch. Let's say the depositor specified 10 oz on demand, and 90 oz to be withdrawn in 1 year. This balance sheet is:
Assets Liabilities
Cash 100 oz Demand deposit account 10 oz
1-year deposit account 90 oz
Up until this point, the bank is OK. Its assets are of zero duration (i.e. gold in the vault) and it has a portion of its liabilities of zero duration (i.e. demand deposit) and a portion that it must be able to pay in one year. The gold in the vault is obviously good for this (not counting that the gold is earning no interest, and the deposit must be paid back with interest). But let's say the bank lends 90 ounces for 30 years, perhaps for a mortgage.
Assets Liabilities
Cash 10 oz Demand deposit account 10 oz
30-year mortgage 90 oz 1-year deposit account 90 oz
This bank has, at the very least, a liquidity problem. In 1 year, the depositor will come back asking for his 100 oz of gold. The bank has only 10. The other 90 oz worth is locked into a long-term mortgage. The bank will have to do something in order to be able to pay the depositor and avoid bankruptcy. I'll discuss that further, below.
This gets back to the point I mentioned earlier about the "money supply". As the bank discovers when the depositor demands his money back, a mortgage is not money that can be used to pay expenses. The depositor wants his gold back, not a paper instrument.
Something that cannot be overstated or overemphasized is that one cannot simply add up the "money" in the banking system. Just as one cannot add up 1/2 + 3/8 + 5/19 = 8/29, one cannot add up demand deposits + 1-year time deposits + … 30-year time deposits.
So what does the bank do when presented by the demand from the depositor for his money? They find another depositor. This is one form of "rolling" the loan (from the first depositor to the bank) by borrowing from a second depositor. And most of the time it "works". That is (usually) the banks can borrow fresh money to pay off loans that are due. There are many forms of "rolling" expiring loans, not necessarily involving depositors but all have the same problem.
It is a confidence game, and of course it doesn't work when there is stress in the system. Let people start to question the bank's solvency, or solvency in general in the banking system, and depositors on net will withdraw their gold from the system and refuse to re-deposit it until they feel more comfortable. And the irony is that duration mismatch will necessarily cause depositors to lose confidence sooner or later.
This is basically a glorified check-kiting scheme (Wikipedia describes it under "circular kiting" in the Check Kiting record, and is fraud. The issue is not merely that the bank is taking a "risk". It is not the proper place of government to dictate by force to every party, in every kind of transaction including those yet to be conceived, how much risk to take. The issue is that the bank is contractually obligated to its depositors and yet it is conducting its business such that it will, sooner or later, be unable to honor such obligations. This is a mathematical inevitability. It is made much worse by FDIC, bailouts, and the "Too Big to Fail" doctrine that let banks push the inevitable losses onto the taxpayer. But even without central banking and moral hazard insurance, this problem remains. It is a major factor contributing to the so-called "business cycle", which is actually a credit cycle of credit-expansion boom followed by credit-contraction bust.
One of the mechanisms of credit contraction is driven by banks that need to raise cash to pay down liabilities which cannot be "rolled over". They must sell assets (i.e. bonds and loans in their portfolio). But one of the universal principles of markets is that in times of stress, the bid disappears. This is no mere matter of banks bring more "supply" to the market and thus "equilibrium" prices fall. This is the general unwillingness to buy such assets at any price, in the extreme case.
So asset prices fall, putting more stress on banks because their liabilities do not decline, only their assets. So they must sell more assets, forcing values to fall further. Credit availability in this environment falls. Businesses cannot expand, or even finance manufacturing, and the vicious cycle begins.
Another fraud is that a duration-mismatched bank would probably have to misrepresent its financial condition to its investors. Balance sheets like the first set of examples conceal this duration mismatch and thus give the false sense that everything balances. I will concede that this fraud is not necessarily part of duration mismatch per se, but I doubt that many investors would buy the equity (shares) of a bank if they knew the bank was only able to remain solvent in sunny weather and it was inevitable that the bank would take big losses in the future. (Long before the depositors lose a penny, the equity investors are wiped out.)
So what have we concluded? First, fractional reserve lending is about lending less than the bank takes in via deposits. The only party capable of creating money out of thin air is a central bank (which should be abolished).
Second, fractional reserves do not necessarily cause any problems to the bank. If a depositor wants to liquidate a time deposit before maturity, the bank will seek the best bid in the market—and hand the loss off to the depositor.
Third, one cannot simply add up the various kinds and durations of banking deposits to come up with a simple (scalar) total. A demand deposit is money; a time deposit will mature into money next year or in 2041 but is not money today. Thus banks can expand credit in the system (which is not necessarily bad) but not money.
Fourth, borrowing short to lend long, aka duration mismatch, inevitably implodes. This is not a matter of odds or probability. Like a geological fault line, one can try to assess probability of a destructive event in any given year, but sooner or later catastrophe is certain. When a business knowingly engages in an activity that is guaranteed to cause it to dishonor its obligations, that is acting in bad faith. Such a business has no intention of honoring its obligations over the long term, only in the short term when it is expedient.
Finally, fractional reserve banking is one of those issues where there is a deep misunderstanding in Austrian circles. This is compounded by the dearth of information about duration mismatch (I am only aware of Professor Antal Fekete writing about it, and of course some of his students such as myself) and the proliferation of misinformation about it. I strongly encourage anyone interested in this topic (which should be all students of the Austrian School) to read the works of Fekete which go deeper than I could in this one essay.
What people miss is this. Banks cannot take in £100 of deposits and make £1000 of loans. The banking system can, and it is a very important distinction.
It works like this
Bank takes in £100, lends out £90
That £90 is deposited back in a bank, perhaps not the same one, it lends out £81
It keeps going round in circles, and eventually you end up with £1000 in deposits and £900 in loans.
That assumes a reserve ratio of 10%. During the boom years it was about 6%, now it is about 8%.
Provided there are suitable assets to back up the loans, then there isn't a problem, the bank is essentially turning its investments in property, business equipment and so on into a tradeable instrument that is pretty much the same as cash, so when I go the the shops and spend money with my debit card, I am essentially transferring to the shop my interest in a share of someone's house or whatever.
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Okay ,how much or what percentage is stamp duty payable at and at what amount does it start at as I assume you do not pay stamp duty on a 100k houses .
I have no problem with stamp duty, if some first time buyer can afford a 250k house they can afford to pay stamp duty
I'm not so sure. Stamp duty comes out of the deposit fund, so it will reduce their purchasing power by about 10x the amount of the stamp duty.
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I thought this was interesting. If NASA are being this bold about it, there must surely be something in it?
Here's the NASA link to it, which I think is a much better link to publish than the YouTube one
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Dont the estate agents generally set the price (in that they inform and advise the seller to what is achieveable)
To that end, estate agents act as one big monopoly
What i dont quite get is why they dont encourage slightly under-pricing whats already in the market to try and get higher volume
surely its far better for an estate agent to get 1-2% commission on 10 properties a week selling for £190k rather than 5 properties selling at £200k each.
It is because if one estate agent says it is worth £500k and another says it is worth £450k, the seller will go with the agent who gives the higher valuation.
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Corrected?
1 job in Derwen for someone to open the post and scan it for processing in India, 349 jobs to India.
The Cube - Birmingham
in House prices and the economy
Posted
I wouldn't even rent that place for £10k per year. You can get a pretty decent sized house for that sort of money.