Panda

I think at the lower end yields are higher... I have rented a 120k house in Cheshire, the Midlands and Devon..... Cheshire 550 a month Midlands 575 a month Devon 600 a month I have rented a 150k house in Midlands and Devon..... Midlands 650 a month Devon 700 a month Unfurnished houses, some of the stats are far too broad.....You can see, yields are north of 5%.... Had to edit the weeks to months, apologies, only weekly rents here in Oz, no monthly......Got mixed up

Brilliant thread, best thread on the forum...... Three posters stand out so much, thanks and keep posting.... FreeTrader zugzwang ChairmanOfTheBored Brilliant stuff, cheers gents........

If you read the BoE doc behind this the MPC can act on three kick-out clauses that essentially mean a revert to normal policy. If inflation pips 0.5% above target, there is doubt around inflation generally, or another unforeseen threat to financial stability occurs.

Savings income is paid gross here, so $10k saved, paying 5% gross, well $500 bucks a year, then you include that $500 bucks as income on your tax return, just like your hourly wage or salary......

In layman's terms, post of the month, yep about sums it up.......

Good to see you back my old friend, where you been, its a better place to have you mixing it up on here......

lol

Yep, it's gonna be a long haul for us poor folk......I agree, no wage inflation, well maybe a tad say 1.5%, but with costs rising at +3%, no wage inflation....Yep they can and will print, but it will never make an ounce of difference to increasing wages..... I agree ED, totally......Totally new un-chartered waters for many on here.....

http://market-ticker.org/akcs-www?post=222474&page=2 This is a tough one. I'm not going to rationalize, because everything I thought would happen already has only partially happened. They shoveled **** on the mortgage crisis to cover up the real smell. How much of that is still there? Last report was they were missing about $300 billion in losses, due to fraud in the servicing business. If that is true, that wipes out the capacity of someone to lever $5 trillion to $10 trillion. That is a start. Karl makes some good points, one of which is debt might not ever get cheaper and might get much more expensive. Much of the consumer push has been through getting lower and lower rates. That has an effect though. There are 2 sides of those instruments, who owes them and who owns them. Income from these instruments into bond funds, insurance companies and pensions has been squeezed. There are a large number of people retiring. I'm trying to put this together, looking at Japan. Until Japan blows, I doubt much changes. Once it blows, the whole world will realize they really did shoot off their toes. Damn easy to finance at zero. The US and the rest of the world has done basically what Japan did. Fool with their money and try to spend their way out of a temporary hole, which has become permanent. Obama went straight to the Japan model. Paulson trumped them one, which actually may be the only thing done close to right, recapping the banks. The problem with recapping the banks was it covered up the crimes, but it didn't let the economy stew for a decade, as they did in Japan. Like it or not, I think this is important. Look at Japan and wonder why JGB's are trading under 1%. This is a bank carry trade of sorts, not a rational financial transaction. A rational financial transaction would put those rates at 2% to 3% minimum. Ours would be in the 5% range. But, when it is viewed the cost of funds for banks is going to remain roughly zero for a long time, anything you can finance with zero costs is pure profit. You are ****ed either way on the other hand, because if it blows up, all bets are off and everyone is broke. There is so much talk of tapering that I think the entire crew at CNBS should get their head examined. If Bennie didn't create another dollar for a decade, there would be enough money there to satisfy the banks needs for reserves, as long as they were solvent. One of the things that happened in Japan was depositors took their cash out of the banks, because it wasn't earning anything and kept it at home. Every month, Bennie is creating the equivalent of $500 for everyone in the labor force, so if you aren't hoarding $500 a month, you aren't hoarding your share. The banks aren't making a bid for cash. GO shop rates. If there is a bank offering an appreciably higher rate than 10 bp or so, you should examine the solvency of the bank, as the rate offered is a window into their solvency. The point here is the Fed has zero bound the money market rate. Not only is the Fed bound by zero on the bottom, the market as well may be zero bound. I haven't seen the amount of money on deposit at the Fed, but it is safe to say that it is well over $1 trillion, more than double what was needed to produce the money supply we had produced for the past 100 years. I know exponents are exponents, but the exponent has slowed, as we have run out of income to borrow against and home equity as well. Only more money will create more home equity, which means that only more debt will create price, a vicious circle that has pretty much run its course. This brings us to what the QEIII is for in the first place. It has absolutely nothing to do with putting funds in the banks for lending and all to do with liquidating existing and new fixed income instruments and forcing those that would buy them to seek other investments. Thus, we are watching the intentional blowing of an asset bubble. There has been and will be massive denial from the vast majority of Wall Street pundits, because this activity produces massive gains for assets they hold for resale and massive fees on what they manage. Even the threat of tapering (turds taper both ways and don't doubt for a minute the taper might be on the front side if this thing gets rough) has these people in a frenzy, as it would immediately diminish the free credit that is producing the buying pressure for markets. I don't believe it would have one iota of influence on short term rates. What we are watching on that chart isn't necessarily a reversal. I would watch that red line and if it were crossed, it would signal trouble. Every day investors don't belong in bonds. This is a bank arbitrage and hedge fund arbitrage game, where free money is used to buy risk free yield. Maybe a 2 year treasury at best. In the meantime, even an approach to that line signals a mess, which is something I agree with. It signals the end of the free lunch for the time being. But, on the other hand, look at Japan. I believe it was the move in JGBs that triggered this mess in the first place. Don't forget they allow banks to mark to fantasy and as long as ZIRP prevails (Japan's banks have had so much QE, they are almost empty of performing assets and full of cash), the proceeds from a 10 year bond held to maturity is still pure profit. Then we have to look at the "What can't go on forever won't theory". In this case, I have to at least theorize that banks would become a place to keep money and not as lending institutions. We aren't in a normal world or a normal financial situation. Bennie and the Jets (the other Central Bankers) have created a universal situation that has never been done on this scale before. I have a theory that money creation through buying assets freezes massive amounts of capital in the money supply, as money can only change hands and what was once a capital asset has become zero interest money. The entire world floats on phony accounting and phony banking. We have checked into a Roach Motel and the only winners are those whose fortunes have changed as a result, I suspect the politically connected. We have seen trillions in capital converted to non-interest bearing cash. This system doesn't work as most of us have theorized and I am beginning to have doubts any of the rules of finance operate on the short term. Best guess is everything will move toward zero, inflating many assets at first, until it is clear that zero produces zero (Maybe this is what is wrong with Japan) and capital theory falls apart and begins again under the old rules. The USA is different, in that its money has been the backbone of international finance, its population is still growing and at this point, there is still a reasonable amount of rights in property. As out of balance as our international finance balances are, the need to hold US assets is worldwide. There is nothing else out there, besides China, which floats on an amount of phony credit that would make Lehman and Bear blush. There is the EU, but its weak sisters are sick. Maybe Illinois or California topple and we have a parallel situation arise in the US to the PIGS. These are major rocks in the rock pile known as the USA.

Who is the main beneficiary of these two points of which i agree...... What impact has these beneficiaries seen from QE, ZIRP and low yielding everything.... Its great owning everything, but how will they get the yields up? We can only be impoverished to such an extent where there comes a point we all give up?

Hello mate, email me, how's tricks? You good? I bet it is nice up North at the moment.......

I have this itchy feeling that Oz rates will fall no further, just postering by the CBA......We are miles from $2.65 to 1 pound which is fair value, hold tight, its not quite right at present, but do not pile into Oz prop at present.....Long term yields are 10%.........Its a wierd place, Qld Sunshine State, f**kin freezin here tonight 13C, over 90% of prop no heating, its getting colder here, prop worthless with sh*t build qualtity and no heating...

I live here, right in the middle of the most expensive part of Brisbane, yes i rent, $550k prop, $480 a week rent, Yields are sickening....What 5.5% but hang on, water rates, council tax and all service charges are all included in the rent, they amount to at least $100 bucks a week.....So $550k prop, $380 a week......The place is falling in value, Oz is f**ked, just they the f**kwits ain't worked it out yet...50% falls, and with the Oz dollar falling, give it a few years.......I would not touch prop here with yours....

http://www.bbc.co.uk/news/business/market_data/currency/11/15/default.stm

http://forums.moneysavingexpert.com/showthread.php?t=4635315&page=2

A neat post from MSE The Help to Sell scheme (often called Help to Buy) does not provide loans. It provides deferred purchase. Modelling such a scheme as loans will cause serious financial mistakes to be made. The finance provider part-owns the asset; "repayment" is actually buying that share out. The important bit is that the value of the portion of the asset not owned by the initial purchaser grows in real terms, unlike a loan, which is based on repaying a nominal sum. Normally inflation works to the advantage of soemone who borrows money to buy a house (http://monevator.com/cheap-re-mortgage-to-invest/). Those who engage in deferred-purchase agreements, such as Help to Sell, find that they have a reversed position. Inflation means that the portion of the house which they initially couldn't afford remains unaffordable, unless they have exceptional earnings growth (which the average person won't). Help to Sell enables house-builders to shift stock into the market, and might provide a boost to the trouble construction industry. Anyone who enters a deferred-purchase agreement believing that it's a "loan" is going to find out over the next few years that they have mis-modelled their finances, and the deferred portion of the house is just as costly as when they couldn't afford it in the first place. Beware of journos who call this scheme a "loan" scheme. They are unfit to write on personal finance. Warmest regards,

Meanwhile, Coutts - the private bank to Britain's queen – has also predicted 10-year Treasury yields will rise to 2.30 percent. "We would be re-entering territory not visited since the third quarter of 2011, when the top end of the trading range neared 4.0 percent," Coutts said in a research note released on Friday. http://www.cnbc.com/id/100779340 Pessimistic growth targets, a fear of the Federal Reserve curtailing asset-purchases, and uncertainty over Japan's "Abenomics" policies are the three key reasons that Goldman Sachs cited for the move higher in yields.

http://www.guardian.co.uk/money/2013/may/18/nuffield-bond-launches-health

http://www.fixedincomeinvestor.co.uk/x/bondtable.html?groupid=3 It's a f00ked up world...Savers will be rinsed, that is rinsed in any type of wealth asset.... hard or liquid...There is not enough work/earning potential effort to support the current paper wealth...Printing highlights this.....

http://www.investmentandbusinessnews.co.uk/economic-news/uk-wages-fall-in-the-year-to-march/4960

Yep, it's coming off the boil here in Brisbane, you can smell it, sales everywhere, in the shops....Chermside's shopping center has sale signs permanently locked to window space. Its only a mater of time before rates are knocked down to somewhere close to zero....Mining, its cooling, manufacturing is f**ked, the dollar has to weaken, alot....They are only starting to realise the dumb f**kers that everyone else is devaluing, and having a strong currency just don't help exports....But at least the sun is shining and it will be a gud'un......

Thankyou very much FT... It only highlights one thing which we have all known for quite sometime, the drive, to anchor wage settlements is as plain as egg on your face. This allows ZIRP, FFLS, QE et al.....Wage settlements are anchored, so inflation is anchored, so savings rates, lending rates will remain at all time low's until wage settlements start to creep north? My guess is this will be a long drawn out affair, decades maybe..Because if we were all achieving positive wage increments, this money would be chasing even higher costs oif services and goods...Rates would then have to rise to hoover up the excess or we would see maybe another Weimer?

Assuming that the 1.4% is solely private sector..Can i ask, is that 1.4% above RPI, or just a 1.4% rise, so a negative number assuming RPI is higher than 1.4%.. Also, is that 1.4% for a full twelve months, so for example Jan 12 to Jan 13 or March 12 to March 13.. I never understand these moving averages, Thanks Freetrader...

Definately, just take a look into the local nursing homes, gods waiting rooms....

Someone i used to know....an old neighbour, years back.. Worked cash in hand in the eighties, raising a huge family of 8, ducking and diving....Health went at 52, went on disability, never worked again for ten years till 62.....Hit the bottle at 62, drank solid for ten years.....causing all and sundry misery..........Got knocked over at 72, completely f##ked now, been in a nursing home for the past four years at forty eight grand a year cost to the local authority and he still gets 100 quid a week pension pade to him.......Even better they ain't even touched his house, two of his daughters live there rent free...And you wonder why the country is broke...