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Icantbelieveitsnotbutter

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About Icantbelieveitsnotbutter

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    East Herts
  • About Me
    Dark arts of equity investment
  1. Council house sales actually started under Callaghan. At least in the early 1980s people were paying sensible prices with properly underwritten mortgages, and all are better off as a result of the deal, unlike the past decade.
  2. The city has given builders more money. This has given them some capacity to carry on - presumably Gordon will claim credit for shareholders deciding to bail them out rather than let them go bust, though Govt has done nothing of merit here. Having written down the value of land the breakeven price of a new build has fallen to the point where some will make sense again where supply is hsort, and thus the economics might work - this is why you need to allow the pain to be felt, it results in a write-off and restores some of the economics, after shareholders or banks have accepted a loss. Elsewhe
  3. I don't think either banks or the Conservatives are in any doubt of the seriousness. There was an interview with john Major at the weekend which was pretty explicit. Camerons problem is how much damage does he do to the country and his party by being very downbeat. The banks are fully aware, but as they are trying to sell off assets or hedge risk, why would they announce it. Indeed most of Labour know it, I am just not sure if Gordon is in denial, or whether he is fully aware and happy to drive us into the ground - I fear it may be the latter given his penchant for decisons that are clearly fo
  4. Some of our taxes went so Ed Balls' department could write a cook book on preparing picnics. I'd really like a public debate on how our taxes are spent, not the pathetic bleatings on how much more as a big figure, but how wisely spent.
  5. ...er, and perhaps petrol... ...and perhaps council tax... ...in fact tax... ...cars... ...train fares... ...car parking charges at train stations... Excess supply drives prices down. Capacity gets cut, demand picks up, prices rise. As for housing, the bull market rally is faltering now. There is no magic tap of funding to turn back on, the banks might now have enough capital from the point of view of capital ratios, but they are still tight for liquidity, and Govt borrowing is beginning to crowd out private sector lending. Come the Autumn the confidence will seap away and we'll see an
  6. We are busy deferring the problem, not reducing or removing the problem. Those with sound finances are paying for it in future taxes. The moral hazard of bailing out the market will haunt us - it is already being seen with thousands of hapless unencumbered people being sucked into the market for the first time.
  7. By KEITH MARSDEN From today's Wall Street Journal Europe. Shocked by the parliamentary expenses scandal and suffering from the recession, British voters have shown their displeasure with Gordon Brown's government. Labour was trounced in local and European elections earlier this month. Despite this electoral drubbing, Labour lawmakers expressed their confidence in the prime minister on June 8. Given his supposedly successful management of the economy while chancellor of the exchequer, the majority felt that he was best qualified to lead Britain out of the recession, which, they claim, was cau
  8. For years it been threat and counter threat - we'll only fund you if you follow our line vs if you don't fund us you'll face cuts under the tories - trouble is the goose has been cooked - Labour could have kept the game up, spending and taxing at high levels, but just below the unacceptable pain threshold. However, they have gone too far, spent too much, taxed too high, and the whole system is now too top heavy and is unsustainable. There is a limit to how much the state can confiscate from the real economy without strangling the life out of it. It has crossed the line, the only answer is to c
  9. So, just to remind ourselves, we need a global statesman to get a global solution and a global regulator and global co-ordination otherwise it will all fail. Only one man is capable of bring everyone together to get a joint action plan, or else it will all fail. Then we the headlines subside and the focus moves on, we go it alone.....
  10. price divided by after tax earnings - so assume a 5% gross yield, lose 10% of income for costs, tax the balance at 25%, leaves 3.375% net yield, gives 29x. The stockmarket trades on about 12x. Rents have to rise 150%, or prices fall 60%. Those who buy houses as an inflation hedge, bear in mind equities are an inflation hedge, but less than half the price.
  11. swap rates are rising, so mortgage rates are going to rise. This is a long game, this is looking like years and years to sort out. At the moment, the BoE is still providing cheap liquidity for banks, it will need to be replaced in time. Govts are finding the cost of borrowing is rising and hte high funding calls have barely started. Risk aversion means investors still willing to sit on low short rates in expectation long rates are rising and unwillingness to commit funds. Unemployment and tax is rising, cost of borrowing will rise, its toxic mix that is not going to solve in a quarter or two
  12. QE has reduced LIBOR towards base rates, and thereby benefited those in debt at the expense of the prudent. If that is the social credit you think we need, then that seems a strange set of priorities to me. It has subsidized the reckless borrowers at the expense of our silver haired prudent savers, many of whom are faced with a squeezed income. The £ has devalued - it was well over $2 to £1, and €1.6 to £1 not that long ago, so even with the rally it has weakened - the rally I understand in part to be growing expectation that the BoE is looking to bring QE to an end, though the Govt cle
  13. Your point is right - Equitable made a promise, then completely and utterly failed to manage to the promise. The resulting loss had to be paid by all other policyholders without the promise. That is management failure, not the failure of the principal of saving for retirement. It may not be fraud, but it was negligence oor ineptitude. Equitable could have removed the promise from new business when it realised it wasn't appropriate. Equitable could have matched assets and liabilities, rather than use the profit on long dated gilts (whose capital value balloned as yields fell) to pay the wrong g
  14. There is a basic problem. Many here have a problem with capitalism. Many seem to despise profit. If you do not believe in profit you cannot believe in ownership. If you don't believe in capitalism you cannot believe in pensions. If you don't beleive in pensions then you cannot have a problem with earning money and giving large amounts of it to others in retirement. After they have worked and spent all their money and now spend your money. Pensions is the deferment of spending now to spending later, and deferring near term spending instead to invest in the means of production or an asset th
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