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House Price Crash Forum


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Everything posted by kilroy

  1. National Grid get paid by government according to RPI (regulated asset base etc); remember they only own the transmission assets for which they are paid an inflation-linked "rent" by the consumer; they are not a supplier or generator of electricity. They just securitse this RPI linked payment through and skim the difference between the 1.25% spread on the bond and the market price of their credit risk as an institution
  2. Probably not, like all industries there is a certain amount of dross; just so happens that the consequences of said dross' collective actions vary wildly by industry. But yes, lottery is a stupidity tax, but you have to consider the utility value of that £1 spent on a ticket by someone earning a few hundred grand a year vs someone on JSA; weighted probability of upside far outweighs the downside for the banker but less so for someone living off 68 quid a week.
  3. yes, fingers crossed that Merv is correct about inflation falling back. On a related note about false hope, I see a lot more more bankers doing the lottery now. I am sure there is an index in there somewhere, maybe something like lottery tickets sold in square mile. Does anyone know if Camelot release ticket sales by postcode or similar?
  4. They sell the mortgages into a new company up (SPV) which then issues bonds and equity, where the fixed coupon and principal on the bond is repaid by the mortgage repayments; what is left is paid to the equity hodlers. As the mortgages are sold, they are removed from the bank balance sheet making freeing up capital for them to make more mortgages. Of course, if htere are ready buyers for hte debt and equity, then the bank does not care if the mortgages get repaid, which can lead to banks lending to anyone with a pulse as the bank will not take the default risk after the mortgages have been sold to the SPV (referred to as the "originate to distribute" model). However, they do have risk while they build up a big enough portfolio (warehousing)of mortgages to make it worthwhile selling. If they are left holding the portfolio when the mass defaults start coming then they are in trouble (not to mention that the bondholders in the SPV get p1ssed off and start suing etc). This is the very essence of the credit bubble and subsequent bust.
  5. This does not come with FSCS guarantee as it is a corporate bond plus you still pay tax. May be useful for ISAs and SIPPs though
  6. He does, but his solution is stagnant nominal prices in the hope that wage inflation closes the gap...
  7. You are of course assuming lha tenants take it lying down, as opposed to waiting for the ll to legally evict them...
  8. It's half the fat, so you can eat twice as much
  9. Wind turbines will be a sweet dream compared to the reality of fracking.....
  10. Higher food and fuel plus stagnant nominal wages = lower "disposable" income with which to buy tat and/or service extra debt. How exactly does printing increase wages while unemployment is rising?
  11. Plus I believe that uk war bonds had heavily discounted rates, which on an npv basis amounts to a writedown on principal
  12. I like model aeroplanes. I used to go to ogmore by sea 4 times a year with mid Glamorgan. Youth orchestra, though has probably changed a lot since the early 90s
  13. I like southerndown, but fear It does not tick half the boxes
  14. It can be good for you if you are a fatty who drives everywhere.....
  15. Who was it who said " we can guarantee the value if your pension, but we cannot guarantee what you can buy with it"
  16. The only way to expand consumer credit at this juncture is to provide financing for a product that "pays for itself" in the form of government subsidy and energy cost savings. We will see whether it pays for itself or not. Another peculiarity of this scheme is that the loan attaches to the property and not the individual, with repayments being collected via energy bills.
  17. Nah, ystrad hospital is opening soon.....+10% according to my old man
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