fluffy666
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Posts posted by fluffy666
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I thought the conclusion of a recent thread was that we were all IT Nerds?
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ST
(Not a physicist)
Howabout 30-something science graduates who went into IT because it paid better than science..
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Speaking as one of those mathematicians, what on earth makes YOU think that YOU have the right to say what I should do with my life?
What right do you have to tell me that I should work as a university lecturer for GBP 40k pa? or perhaps a teacher? or an IT developer? or in industry? All earning a similar amount?
Instead of working in finace so I can earn more than that to care for myself and for my family? And paying more taxes to help support society too.
How would you like it if you were told: "You are big and strong, you should work in the mines for GBP 10 an hour" or
"You are good with words, you should be a lawyer"
Isn't this the kind of thing that happened in Stalinist Russia?
We can't blame individuals (At least not rationally..). The problem is one of rewards; if (for example) the period of a given mortgage is 25 years, then any bonuses, comissions, etc associated with that mortgage should only be paid at the end of that period. Paying them up front, or having a bonus timescale much shorter than product lifecycle is always going to incentivise overly risky behaviour.
Now, if your bonuses were delayed until the products designed showed above market performance over decadal timescales.. would you think differently?
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From her OP, it seems to me that Tiggley's LL is simply an amateur BTL-er who's got himself in too deep. Not that this makes it any less of a problem for him/her to have to live in the flat, but it doesn't look like we're dealing with a Rachman or a Van Hoogstraten.
The only problem being that the LL seems to think that it is the tennant's problem if the LL is losing money..
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Its SHTF time.
Who could have thought that lending money to people without incomes, assets or basic numeracy skills could turn out badly?
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This bit is from today's Independent, which, among other things, has this statistic to show that HPC may be here:
"For those who do manage to scramble on to the first rung of the ladder, mortgage repayments eat up an unparalleled proportion of their disposable income – about a fifth."
Now as someone living in London, this figure does not make any sense at all. Nearly everyone I know who is a recent first-time buyer is putting minimum 40% take-home income to their mortgages, more typically around 50-60%. Whenever I do the maths on a mortgage, it is always under the assumption that we'd be paying at least 40-45% of everything to any mortgage. Where on earth does this figure come from? Some of it may be down to London-level expenses, but I suspect that first-time buyers in Manchester, Somerset, Newcastle, etc. are all paying well over 20%. And the paper makes 20% a figure for alarm!!!!
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Possible Journalist math:
50% = 1/5th
(I have a nasty feeling this is the case here..)
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An Irish bank offers a 'mortgage cheque book' with your mortgage, so you can write cheques using money you dont have for cars, tvs etc etc... Crazy irish, and i thought a credit card cheque book was bad!
http://www.permanenttsb.ie/mortgages/mortg...and-options.asp
is this just an irish thing, or did this invention pass me by in the uk mortgage market?
The bigger marketing con is the whole concept of 'releasing the locked up value of your home'. Apart from a small number of cases (Starting a business, building an extension, fixing subsidence), it's not 'releasing value', it's 'Risking the roof over your and your family's head for the sake of consumer crap you just don't need.'
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Very often, people's happiness is based on their wealth relative to their peers. We're all unimaginably wealthy compared to the billions of the world in disease ridden poverty, and we're all unimaginably poor compared to Bill Gates, Carlos Slim and the queen. It's always fascinated me that people are willing to dedicate their entire lives to some essentially pointless job so they can be twice as wealthy as their mate. If you select a small peer group, blinker out everyone else, end up at the wealthier end of your tiny microcosm - you think you're happy. Bizarre.
Unfortunately, it's bred in at the genetic level. Once upon a time, being more successful than your peers (male or female) was directly linked to having more surviving kids, the only limit being when everyone else decides to gang up on you. So there is always a drive to both be more successful than your peers AND try and bring down those who are more successful. Luckily, our civilised society has suppressed these instincts..
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From the BEEB:
Personal loan market 'shrinking'
If this carries on, Carol Vordeman will have to take the Sophie Anderton route..
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Plenty in Liverpool... near seaside location, near to town center, well ventilated with small arms fire..
Hmmm.. Basra or Liverpool.. what a choice.
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Who would have thought that investing in new build flats in Hull city centre is not a good investment.
What's the purpose of Hull, nowadays?
Actually, as long as the flats are 2nd floor or above, there could be demand as sea level rises.
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Perhaps off topic, but I wanted to try and understand the demographics of users of this site. It's difficult to pick through the posts (and the trolls!) for the reality of people's situations on here.
So me first.
I'm a bear.
33. Above average earner in the City.
Own a flat valued at £640k with ~55% equity today - bought in Nov 2003.
Never engaged in property speculation or BTL.
Decided not to STR as I am settled in my HOME and have recently married.
Hoping for significant falls to then buy a large family home.
Am I the odd one out here or are there others like me?
I'm a human..
34. Above average earner in Bath.
Own approx 40% of a house valued @ £250k. Bought originally in 2000, moved last year. 18 years 11 months to go on mortgage, not that I'm counting or anything.
Never did BTL.. wife has been going on about why shouldn't we go into BTL for the past 2 or so years.
Bosworth - you do realise that you could move to my area, buy a decent 4/5 bed family home and have no mortgage. ALthough I'd probably have to murder you (nothing personal).
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I seem to remember ten years ago New Labour telling the public they were going to build millions of affordable homes.
I know 10 minutes in politics is a long time, however even I can calculate that ten years is longer.
Anyone seen these new affordable homes ? There are millions of them, its quite strange I have not stumbled into them.
Plenty in Basra... near seaside location, near to town center, well ventilated with small arms fire..
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If house prices weren't so high then.....
familys wouldn't be stretched for cash, better holidays, better food, better life,
people would have money in the bank and could plan for the future, stability, future happiness,
mothers could stay at home and look after the kids and not be forced out to work in order to achieve some lifestyle goal that is TV lead,
people would be generally happier,
Why do people just dont stop buying and wait for the crash to happen.....i just doint know ????
Are they mad !!!!!
I believe that once upon a time there were fairly strict rules on how much money the banks were allowed to lend out in mortgages, and only one income could be considered. This kept a practical lid on house prices even in the face of scarcity.. and scarcity could be overcome by local councils building houses (Imagine..!).
Then along came assorted free marketeers with the wonderful idea that mortgages and consumer credit should be completely deregulated, and at the same time local government taken out of the housing equation as far as possible. Add together a combination of lower supply and higher cash availability and you get a huge bubble of people bidding against each other..
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This book inspires pride in hard work and a disgust for those who hope to get money for nothing - something we seem to have forgotten in Britain today.
So I take it you want to see a 100% inheritance tax, Inheritance being the ultimate 'money for nothing'..
One of the biggest problems of lassiez faire capitalism is that of education and inheritance; if everyone was released into this system at the age of 21 with a good education and the same amount of cash backing, you could claim that the relative wealth of these people at the age of 40 or so was at least partially down to hard work and talent, although plain luck will play an unacknowledged role.
However, if you dump people into the same system at different ages and education levels, with vastly different amounts of available cash to start with.. are the results at 40ish going to be entirely due to talent and hard work? And if not, it is clear that Ayn Rand is wrong..
Ultimately, the kind of ultra minimum state with zero redistribution advocated by the Objectivists would stratify into a near-feudal class based system with seriously constrained social mobility; ironically similar to 'classless' communist/stalinist systems. You can see this in a lot of countries where 'free market' reforms have been undertaken since the late 1970s - higher income disparity, lower economic growth and more entrenched wealth.
You need enough socialism to give people a chance, and enough capitalism for there to be chances to give. The result is always going to be a messy fudge of a system - and beware of anyone who thinks there is a simple solution..
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I don't get the bitterness on this site sometimes. The City is an enormous engine of wealth for the whole country - it's presence brings in a truckload of foreign money and the salaries and bonuses that emerge are mostly fed into the economy in some shape or other.
IT is fair enough that shuffling foriegner's cash is good for us, but that dosen't actually mean you are creating wealth.
The tax on "bonuses" alone is worth a number of large hospitals to the country.This is a false dichotomy - these bonuses effectively come out of Joe Average's pension pot, or as a cost to the company they work for. Indeed, the short term demands that the city makes oppose long term investment by companies, making life worse for people who work for them.
I work in the City and so does my wife. The reason salaries are higher is because there is a risk to your job.Yes, no one else in the country ever gets fired. Sorry, but if you want to use this line you will have to offer some evidence that it is actually the case. What is employee turnover like?
Of course, high employee turnover shows my point that luck is more important than genuine performance; the shorter the performace measurement period, the higher the probability that you are just picking luck.
Clearly there are some "unfortunate" side effects with this - especially sustaining the recent boom in property. But please don't forget that the bulk of the boom ALL OVER THE COUNTRY has been down to BTL speculation. It would be difficult to blame this entirely on a couple of thousand of City folk. And please also remember that now the bonus tap and job-creation has been turned off, this will dramatically accelerate the coming crash, especially in London, and hammer home to the whole country how much of a house of cards all our houses are...*dons flame proof suit and rethinks going to the pub on Thursday*
If the City really were delivering value, then the bonus tap would be independant of economic conditions, since it would reward consistant above-market performance, irrespective of that the market was doing.
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People have different skills. Everyone has something they are brilliant at, and something they are terrible at. Thats just people. Wealth generation is a skill just like any other skill. And it is of great benefit to society.
The question, though, is Are 'city boys' actually generating wealth?
After all, the definition of wealth generation you use is so broad as to almost include bank robbery in 'wealth generation', since it considers renumeration only, assuming perfectly efficient markets in the first place. Bank robbers are simply a market signal showing that banks don't spend enough on security..
More relevantly, if you take 1000 beginners in the city, after a year, 200 of them will be in the top 20%. After another year, 40 will have been in the to 20% two years running; after 4 years, you will have 1.6 people who have been in the top 20% every year - and this will be true even if they picked stocks by rolling dice! So are these 1.6 people 'wealth generators' who should be fantastically rewarded, or just plain lucky? Does anyone do and publish the stastitics that would be required to tell the difference?
Of course, people who have build up great compaines from very little do derve to be rewarded - but theirs is the exception rather than the normal case as presented.
As far as his three points go, great wealth usually DOES have sime disreputability at it's base - although not always; and the emprical evidence is that great income disparities are a problem for society. The greater the disparity, the more chance that a person's income and wealth is decided by accident of birth instead of talent and hard work.
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http://newsvote.bbc.co.uk/1/hi/business/7109805.stm
Reminds me of DissapatedYouth's signiture - Have you been a bad quant today?
I found this revealing..
"If we returned to old fashioned ways of trading," he warns, "the terms of borrowing would be far worse."The implication being that without the quants, borrowing costs would be higher, and therefore the debt mountain lower...
And..
"He will not reveal exactly how much he earns but he says that so-called algorithmic traders are usually paid about 20% of the money their model makes and the typical algorithmic trader will make his employer about US $10-20 million a year. "Of course, if their model loses money, do they pay 20% of the loss back to their employer? That is quite worrying, since the indication is that a model that makes money over a relatively short timescale is declared a success (even if that 'success' is nothing but a statistical blip) and the quant involved highly rewarded - and if this is revealed over sunsequent timescales then the quant keeps their cash. It's a one way bet, in other words, which means that the people involved are massively motivated to take excessive risks.
Indeed, if this method of 'rewarding' is widespread then it would explain why medium to long term risks have been systematically ignored by banks over the past decade or so. In a genuinely efficient and properly priced market, a fund that paid out 20% of gains in administration fees could never survive for long, as it would be outcompeted; the only way that such returns could be generated for a stastically significant time would be due to mispricing.
Indeed, given the relatively abnormal
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Maybe they're all happy to move on to other things after making some money during the good years. I don't understand why people outside the City think people who work here are some kind of money-grabbing automatons.
Please continue to live in your bog working in a call centre or whatever worthwhile job you do. Oh, you don't like that generalisation?
Errm...
If bonuses actually reflected added value, then you would expect them to be constant (In normalised terms) year-on-year, and not dependant in any way on overall market performance. Since bonuses appear to follow the same boom-bust cycles of the market in general, it is clear that they represent a skimming off of cash that should go to the funds managed in the good times, for no extra value added.
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They should begin with a .5% hike just after Christmas to be followed by a series of short sharp shocks until prices fall back in line with the 2% CPI target. As Mr. Bean must know inflation is running well above 5% which means cuts are not on the cards.
Oh dear--what a mess!
How would this improve things for the majority of people in the country?
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This mornings deluge of junk mail included one from Inside Track. I hasten to add it was addressed to the previous occupier of my house.
Anyway you will be interested to know that:
Property has risen in price by 9.28% PA since 1953
Actually, that means that it's only gone up by a factor of 5.3 after inflation (factor of 100 before).
Which - given that 1953 was a pretty difficult time to buy and 2007 is at the end of an insane boom - probably reflects reality.
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Until then they will be busy giving 125% mortgages on houses that are declining in value to people who will not be able to repay them... [Pluto]
Mortgages in excess of 100% still represent a tiny percentage of the total...
That's because the 125% offers are really 95%-value secured mortgage + 30%-value unsecured loan, IIRC..
And I suspect that they don't continually factor in house price changes. So the over-100% cases are probably remortgages where people have come off of short term fixes to find their houses valued less than for the original loan. When the above '125%' loans start resetting, there will probably be a lot of people who are over 100% LTC AND have a big unsecured loan.
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On the face of it the task doesn't seem to be an onerous one. The task may have been a bit more complex than that however. Who knows what ancient database system the Inland Revenue use? Is it even SQL compliant? It wouldn't surprise me if they were using some half-baked database system knocked-up by one of their employees 40 years ago. They probably still use punch cards (though that would be a good thing as they wouldn't have lost 25 million punched cards).
The story also shows the utter stupidity of outsourcing IT. The IR decided to avoid paying 3 times the actual cost to clean the data merely to line the pockets of the IT company. If they employed their own IT staff directly this would not have happened.
Actually, the government could probably do very well if it decided to actually build up it's own IT capability in house. The obsession with outsourcing IT projects leads to all sorts of problems, but it boils down to the fact that the government dosen't really have the expertiese to deal with the big IT consultancies, and so ends up being given very bad deals and being continually upsold.
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i smell emergency power cuts coming.....
It is vaguely impressive that a country built on coal, with a major hydrocarbon province in the sea next to it, that built the world's first nuclear power station, and even has significant wind, wave and tidal power generation potential, could be facing power cuts. It's taken 28 years of brian-dead energy policy, but they managed it..
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Well if the Rupee gets stronger and wage inflation in India carries on, it won't be long before we become competitive in IT again.
Of course this could just be wishful VI thinking on my part.
Don't worry, it's wishful thinking on my part as well..
House Prices 'will Plummet By 10pc Over The Next Year', Says Banking Chief Economist
in House prices and the economy
Posted
Heretic! Heretic! Burn him! Burn him!