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Everything posted by Goat

  1. Bear in mind that it's well known that the Greek tax collectors have been running their own protection racket for years. Declared all your income and paid all of your tax? F*** you pay me (not brown envelope, carrier bags full of cash). So there's no point in paying all of your taxes, 'cos the taxman will have his bribe whether you've cheated or not.
  2. Greek's hand possibly quite a bit stronger than some imagine? Default = tens of billions of losses for German taxpayers that has to be acknowledged immediately, could Merkel survive that? I wonder if some of the hawkishness from Schaeuble is a powerplay for the top job?
  3. An attempt to clarify the terms ahead of the proposed referendum, or maybe as I said just the desire to give the impression they've done all they can? Lets wait and see.
  4. Herein lies the problem, the ECB's monetary policy is set for the benefit of the Germans, not for anyone else. They were quite happy to see the PIIGS inflating away like mad when the German economy was weak at the start of the last decade but inflation in Germany now that the PIIGS are in trouble is unthinkable. Population of PIIGS ~ 133m v 81m for Germany; excluding France that gap is roughly equivilent to the rest of the EZ put together.
  5. Maybe that's what VT were looking for. They can now go back to the Greek people and say "we did everything they asked but they closed the banks anyway, we agreed to all of their terms but still they said no and thus I regret that continued membership of the Euro is now impossible".
  6. The problem is that these assets usually have some form of state immunity so they are very hard to sieze. Yes, the Ghanains held onto a sailing vessel (used for training purposes) for a couple of months until the UN Tribunal for the law of the sea ordered its release. What I should have said is that it really depends what law the debts are issued under. The Argies made the mistake of issuing their debt under US law, which means the US courts are happy to get involved, which then leads to all sorts of extra complications. That said, even in that case I'm not sure how much if anything the vulture funds have actually managed to recover from Argentina. In the case of the Greeks what law was the debt issued under? Is there any law whatsoever covering loans from other governments and international institutions?
  7. Odd, very odd. Why take brinkmanship to the very edge then fold completely, that doesn't make much sense to me. I wonder if there's some kind of ulterior motive here. Possibly they're trying to get precise terms ahead of the referendum, maybe they're looking for an outright rejection by the EZ so they can say "we agreed to their terms and still they said no".
  8. Reality check, how do you enforce your claims against a soverign nation? Short of armed conflict you can't. If Greece were to stay in the EU perhaps there'd be a recourse to the ECJ, but the money isn't there so it becomes a choice between striking a deal and getting something back or holding out for nothing. The problem is it hasn't just been the IMF's requirements, events have largely been driven by the EZ. Provided that the Greeks are happy to keep the IMF as the superior creditor there's no reason why they shouldn't be willing to deal with them provided they were able to follow the IMF's usual formula of devaluation and reform, since their primary budget deficit is quite small this shouldn't be too much of a problem for them. The only problem I see is Mdme Lagarde and her apparent conflict of interest, I wonder how long it is until people start asking whether her position as head of the IMF is tenable.
  9. In reality it's the Eurozone taxpayers who are screwed. An interesting breakdown of who owes what: http://graphics.wsj.com/greece-debt-timeline/ €211bn to EFSF, Eurozone governments and the ECB; €21bn to the IMF and only €49bn to private investors. Also I don't know if that includes the €89bn owed by Greek banks to the ECB and how much of that would be at risk in the event of default. Assuming that the Greeks leave the EZ they're going to be reliant upon the IMF for funding so that €21bn is safe and lets assume that they need to borrow another €19bn over the next few years as well. Realistically the Greeks need a 50% write down to get to a sustainable 90% of GDP but I guess that if the economy contracts further the actual loss will be more like 60% leaving them able to sustain a debt of about €110bn of which €40bn would be owed to the IMF leaving only about €70bn available to other creditors. I don't know how the remaining claims would be split between private creditors and the EZ but in a best case scenario assuming the private creditors are wiped out entirely the EZ is looking at a loss ITRO €140bn; more likely I suspect that the ECB will suffer a pretty stonking loss on its loans to Greek banks, if the Greeks decided/were able to offer something to the private creditors as well the total bill for the EZ would likely be closer to €200bn. In a worst case scenario, with the Greeks forced out ot the EU entirely, what's to stop them saying f*** you to the EZ, in which case the final bill could be higher still.
  10. Nope, at its root its a competetiveness crisis, the debt crisis is just a manifestation of that. Standard IMF practice is devaluation and austerity/reform to restore competetiveness plus a measure of debt relief. The Greeks cannot devalue externally thanks to the Euro so the burden of restoring competetiveness has to rest on internal devaluation by austerity, crushing demand and driving down real wages. This is of course counterproductive since if you shrink GDP then the debt/GDP ratio invariably rises. Add in the fact that the Greeks have had next to no meaningful debt relief and you can see why it has developed into the basket case it is today. Frankly I think the whole bailout has been an exercise in protecting the rest of the Eurozone and a cynical attempt on the part of the creditor powers to recover as much of their own money as possible whilst shifting as much of the losses as they can onto the heads of the Greek people, the fact that those powers are now cutting off support I think indicates that they believe they've now bled the Greeks dry.
  11. Because the problem isn't austerity, it's the currency itself and the illogicallity of trying to solve a debt crisis through an internal devaluation in a fixed exchange rate system.
  12. I think you're confusing the government debt with total public/private debts in France/Italy. Note also that our own post war debt was significantly cleared by some pretty hefty inflation and presumably some healthy growth in the post war period.
  13. Remember, there are legal ways to force the extention of the lease although the "marriage fees" with such a short lease are going to be huge. £120,000 + marriage fee should be ~ OMV of this flat.
  14. I suspect that it's become a game of pass the parcel. T&V know that Greece has no future in the Euro and simply need to present their departure as forced onto them by the wicked Germans. Merkel & Co. know much the same thing but need to present it as lazy greedy Greeks being utterly unrealistic. I suspect there's a small chance of kicking the can a little further down the road but what's in it for both sides I don't know.
  15. Different type of unions though. I hesitate to speak for the Germans but our unions seem to be more interested in persuing marxist ideals rather than constructively engaging with, well, anything. Maybe it's a consequence of having half their country controlled by a communist dictatorship, having to face up to the reality of the socialist utopia, rather than forming their politiacal philosophy in a student bedsit, safe from the complications of the real world. But what do I know.
  16. You're confusing avoidance and evasion. If you've any actual examples of the "companies and the city" not obeying the law I'd like to see them.
  17. "The funding for some of the research discussed in this article was provided directly by the BBC Trust."
  18. I think you'll find that the charts are manufacturing and do not include resource extraction.
  19. You do understand that the Bundesbank were the biggest monetarists of all.
  20. Odd that you blame 'Fatcher for this but seem perfectly happy with the performance of Bliar/Brown and for that matter Callaghan. A couple of charts for you: First off, the total value added (in 2011 prices): So 'Fatchers "devastation of the industrial base" resulted in a 16% increase in manufaturing output. Compare and contrast this with Bliar/Brown's 22% real terms fall in output and your comment looks decidedly odd indeed. Also bear in mind that a lot of the industry that was lost under 'fatcher was basket case heavy industry that was only being kept alive by state subsidy. Next up, manufacturing output as a %age of gdp: That's a 21.7% fall under 'fatcher compared to 44.4% under Bliar/Brown (-1.2% p/a under 'fatcher and -3.4% under Bliar/Brown). So why do you claim that 'fatcher "devastated industry" when it's plainly contradicted by the facts, and why do you ignore the reality of Labour's terrible performance? Perhaps you should spend less time accusing me of being the conservative party spokesman and more time examining your own beliefs.
  21. Fwiw I started a thread on BTL price modelling about 7 years ago: http://www.housepricecrash.co.uk/forum/index.php?showtopic=86874&hl=%20btl%20%20yield%20%20value As you may be aware my view is that the "fair value" of a house is the net present value of the rents receivable, net of expenses such as agents fees and repairs. Now is not the time to discuss the reasoning behind this (done to death on other threads) but the key point is that the end result will always depend upon the discount rate applied. I have on other threads stated that the appropriate discount is ITRO 8-10% however I am aware that there is comparatively little evidence for this, beyond some breakeven analysis and annecdotal accounts of practice (i.e. old rule of thumb was that 1 months rent = 1% of the value of the property, a 12% yield). I think it's time to put our "required yield" calculations onto a bit of a more secure footing. The way to do this is to look at the rate of return that investors require on other assets that can be assumed to generate similar income streams. Fortunately this information is published daily in all quality newspapers, in the form of share prices and price/earnings ratios for quoted companies. In particular I am interested in mature "cash cow" companies, with stable profits and only limited prospects for growth. These I think most closely replicate residential investment properties (i.e. stable income, limited growth prospects). Clearly bank stocks are out; likewise other property related stocks. A few that catch my eye are BAE systems (16.6); Diageo (17.6); Imperial Tobacco (16.7) and Unilever (14.5). Also if you look for “price earnings” on Wikipedia the article suggests something like 14-16 as “reasonable” P/W ratios. I think for this purpose I will adopt 16 as a “reasonable” P/E ratio for a “typical” low risk stable income investment company. This suggests that a reasonable investment yield is ITRO 1/16% i.e. 6.25%. So can we apply this 6.25% yield to residential property and say that a house generating monthly rents of £800 pcm is worth £153,600? No, here’s why: The earnings in a price earnings ratio are net profits after tax; if we want to find a reasonable yield for gross rents we need to adjust for tax and expenses (but not mortgage interest) in earning the rental income. So your typical £800 pcm property will probably generate net profits of ITRO £6,500 p/a (1 month void, 10% agent fees, a bit under £1,500 repairs etc). 96/65 x 6.25% = 9.23% Don’t worry were almost there now. As mentioned previously, P/E ratios are after tax. I don’t have detailed figures available however I am going to propose a tax take on these companies of 20% (bearing in mind the main CT rate is now 29% I think this is reasonable) So, if we take our 9.23% and multiply by 100/80 we now have our stock market implied required yield for residential property of 11.54%. So, whilst currently your £800 pcm property is worth perhaps £192,000 (5%), the underlying value is ITRO £83,000. That is quite a big difference wouldn’t you say?
  22. How does that work? You seem to be saying that you could earn £15,000 each (£13,500 net) and still pick up £18,000 in benefits, is that really true? Does that only work if you're renting and claiming HB or can owner occupiers do the same. If true then someone on £50,000 should simply salary sacrifce £35,000 per year into their pension fund, over 18 years that's going to add up to a pretty healthy retirement fund, with the advantage that once the kids turn 18 you can simply end the SS and carry on earning £50,000 p/a.
  23. I'm sure that's quite right, but I don't see what it's got to do with tax credits. Yep, makes sense. Employers pay NIC at 13.8% on any earning above the primary threshold of £153 p/w. Logically, 2 people working 20 hours per week at £7.50 per hour will earn £150 each and give rise to zero NIC liability; one person working 40 hours per week will earn £300 and cause the employer to pay £20 NIC.
  24. I agree with this, however it is a totally different point to the "tax credits = employer subsidies" argument that gets trotted out on a regular basis, seemingly as a stick to beat crony-capitalist business with. On the competition side, I'd suggest that the vast bulk of low wage jobs are in competetive industries, employees in non-competetive industries generally have far more bargaining power because any excess wages paid can simply be recovered by higher prices. I've got to disagree on this point. You're essentially assuming that all workers live by themselves (or are sole-earners in a family unit) and that it's impossible to support yourself on less than £30k; the reality is that a large proportion of the workforce is female/young or otherwise dependent upon other persons for the major costs of living in which case £500 or £1,000 per month of extra spending money makes a big difference to them. FWIW I'd suggest that tax credits probably make little actual difference to wage levels; there's a sufficient pool of workers/potential workers who don't qualify for tax credits to absorb the effects of any behavioural changes in those that do, even if this means importing more/fewer workers from the EU.
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