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House Price Crash Forum


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Everything posted by Toilet-Currency

  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.
  16. It really depends on how close to retirement you are. Many occupational funds put money into equities by default for those aged 18-50 on the assumption that the ups and downs of the market will smooth themselves out over the long term. To me, equities are way too dear at the moment and I don't want the exposure. Therefore, I am in the process of switching out of an occupational fund into a SIPP. I will probably start out in cash or index-linked gilts, with a view to switching back into equities (90%) at much lower levels sometime between now and 2012.
  17. The UK has certainly helped spread the free market doctrine. I don't agree with the rest. There have always been speculators and financial crises. The problems have stemmed from combining relatively free markets for trade with rigged markets for money supply, currency, interest rates etc. Add some fraud, short termism, vested interests, crap regulation and plenty of ramping and you have all of the ingredients. Depending on your point of view, joining the euro either entrenches the free-market philosophy you dislike, or applies a different and perhaps more extreme version of the same failed policies.
  18. True or not about the tariffs... We are quietly being manouvered into an "in or out" position by parts of the eurocracy. When/if Cameron blocks a new treaty - perhaps on the mooted changes to state budgets- he will be told by Sarko, Merkel and the Commission that it is time for the UK to go. Cameron will not be allowed any nuance to the UK's membership of and support for the EU project and its institutions. The war on speculators kicked off by Merkel will then morph into a scapegoating offensive against the UK (as home to much of the financial sector). We will get the blame for europe's many institutional and economic failings. It will be much more bitter than Germany vs Greece.
  19. My 2p's worth: 1) Expect the next G7 or G20 summit to mark a fake watershed (a bit like early 2009 when they announced massive global stimulus package, which marked a market bottom) 2) If the US, EU, Japan have a common plan which is dramatically different to the current system, they need to collapse the current system before the reboot. That means continuing to do bizarre, ludicrous things in order to be seen to be resisting the collapse. Next up, IMO, will be a global exchange rate system, with $, €, DM, Y, £ trading in tight bands, backed by the threat of massive CB intervention. Of course, this won't solve the problems of over-indebtedness, ponzi pension schemes, demographics, fossil fuel dependency etc etc 3) If there is a common, cunning plan, I don't think it will be popular in China. Just teasing about the self portrait.
  20. Dunno. The political elite couldn't run with the previous plan and I doubt Matrix 2.0 will be much better. But do you think it's really about plans or control? PS Scepticus, may I compliment you on the new avatar. A great improvement on the previous one (the self-portrait)
  21. When we had the short selling restrictions in 2008, it was at a time when many financial stocks were raising capital through rights issues, and those that weren't were being hammered as proxies for the financial sector. This time, the real targets are CDS and government bonds- they included the financial stocks to make it look like a blanket curb on speculation (a smokescreen) However, once the debt auctions start failing as a direct consequence of this rule, so will the banks that are stuffed full of that junk. Anyone who dislikes government bullsh!t will delighted about this development, to the extent that now that the speculators have been banned, the politicians have nobody to blame but themselves
  22. Presumably we will now see "copycat" short-selling measures from the French, Italians etc. Just to recreate the regulator-induced market shambles of late-2008. If they are going down the exchange control route (as alleged by zerohedge), I wonder which overseas buyer is going to want to buy euros to buy all those freshly issued eurozone bonds...? Ah well, the ECB will have to pick up the tab somehow. http://www.zerohedge.com/article/german-reform-about-whack-fx-market-finmin-says-likely-ban-eur-derivatives-dont-hedge-fx-ris
  23. I think you are right that the 30 day rule applies, because it is a fungible asset (like shares). But I am not 100% sure. rule is set out here: http://www.hmrc.gov....ual/CG50564.htm EDIT: maybe you could try searching for that section 106A legislation and see if it explicitly states "shares" or fungible assets? And then confirm the circumstances under which your type of gold holding is treated as a fungible asset?
  24. Don't fall for the spin that governments / embattled chief execs put on this issue. "Speculators" are just a bogey man to deflect from their incompetence and, in the case of governments, fiscal incontinence. Now more than ever, since it plays very well to the crowds at a time when financial services are held in low esteem. If you own any equities and they announce a ban on shortselling, consider getting out quickly after the initial blow-off.
  25. Fair enough. But how does that square with a public that regularly has voted socialist and presumably expects public spending and services? Maybe, logically, they have had the governments they have wanted and deserve. (And so have we.)
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