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  1. My 2010 Bilderberg prediction: "Sources" will put out that old chestnut about an enforced bank holiday coming soon. Like in 2008 and 2009
  2. Note that the proportion of index-linked gilts out of total gilts issued is much lower than this - only about 25%. It is entitlement programmes, PFI , pensions etc that bring the overall proportion to 4/5. I agree - buying and holding UK CDS is a complete waste of money, but default/ "restructure" of the other liabilities (esp pensions) is inevitable.
  3. I cannot think of any examples of investors, entrepreneurs, asset managers, banks, private equity barons, companies, etc that would invest without an exit strategy and without at least some expecatation of a total return. And since yields are so low, that means capital growth. Asset allocation is used to provide a framework for matching expected return vs risk. Again, the objective is total return (including capital growth). If you're talking specifically property, fair enough. For shares - no, since that would mean companies paying out every penny of profit as a dividend rather than growing the business or investing in R&D or tangible fixed assets.
  4. Really? Do you not think that even long-term investors invest in the expectation that they can exit at a better price than they paid? What about a pension fund - a long term investment, but the asset allocation is into assets that will appreciate over the longer term. It isn't for income alone. Almost all investment of capital is speculative (unless it's benificent/charitable, but that's not really what we're talking about).
  5. Yep. Funny how the equity markets are often oblivious to moves in credit spreads in the bond markets but plunge when the discredited ratings agencies open their gobs.
  6. Get that Mr Laws to ram it through in the budget. He won't last long anyway.
  7. How about removing the principal private residence relief once the crash has already started (say 2 years in) If it ever were to be introduced, it would be less controversial if it were done when few people were making gains. And then the full benefit (i.e. that it would be harder for house prices to outpace savings in the broader economy) would be felt as soon as the market bottomed out and started rising again
  8. I think Fitch was the only major agency that had kept Spain on AAA S&P downgraded them a month ago to AA (from AA+, so they must've lost the AAA some time ago).
  9. It has been said that the CI would have to be cut if it was to dear. In reality, I don't believe it would be cut. Ever. Instead, we would have a bidding war as it would be an easy vote winner. Any party which opposes CI in principle, or a subsequent rise in CI (plus a rise in taxes), or proposes a cut would be cast as "opposing the progressive consensus", "against fairness" or "friends of the rich". Good politics, bad economics. Seen it all before, bored now.....
  10. I am not actually advocating anything in particular- merely pointing out that introducing a CI , whilst it might have many positive attributes, short-term effects and be done with good intentions, would represent yet another domino to fall. And fall it would (sometime, probably sooner than you think), but it would make an even bigger splash than the exisiting benefits.
  11. Yes. And it's not a good thing to make our political system even more prone than it already is to reflect a voter's self-interest. Else they might as well hand out wads of cash at the polling station.
  12. The crux of my objections is the psychology of entitlement. If you're not currently on benefit, you feel no entitlement to benefits right now, and indeed, would probably welcome a slimming down of the current scrounging and waste that affect parts of the system. At a stroke, a citizen's wage would make everyone entitled to something. And once that happens, it is extremely hard to take it away again. Even if it would be desirable or necessary to do so.
  13. "A citizen's wage - what would be wrong with it?" It might be ok in the short term. Long term, it'll be affordable until it suddenly isn't - a bit like Ponzi pensions. Then, the government of the day has to 1) cut the citizen's wage ( cue storming of the Bastille). No government would ever do that once society latches on to this particular teat. We get Peronism in the UK. 2) print 3) borrow A classic case of the road to hell being paved with good intentions. I am amazed anyone has enough faith in our current and future politicians to doubt the above situation would come about.
  14. Meanwhile, Greece has had enough of G-Pap's bullsh!t.... http://www.telegraph.co.uk/news/worldnews/europe/greece/7768067/Greek-phone-firm-cuts-off-Prime-Minister-by-mistake.html
  15. Nice graph. Just be careful when comparing the VIX on an historical basis. At the time of Lehman's failure (mid Sept 2008), the S&P 500 was 15% higher than now, so all things being equal (and irrespective of ATM vols), we would expect the VIX to be lower at that time than it is now. Spot levels make a big difference in the calculation. Note from the graph how implied volatility got crushed in the more orderly part of the sell-off (Jan-March 2009). If you believe in the plunge protection team, and that governments/CBs will do anything to prevent a disorderly equity selloff, being long equity vol at these elevated levels could turn out to be an extremely costly trade.
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