Jump to content
House Price Crash Forum
LuckyOne

Fuller Public Accounts To Be Revealed ....

Recommended Posts

I am not sure if we have done this yet.

It seems that the government are going to publish a fuller set of public accounts to-day on a similar basis to the way that a company would report its balance sheet.

Needless to say, the liability side of the balance sheet is larger than the reported deficit.

http://uk.reuters.com/article/2011/07/13/uk-britain-liabilities-idUKTRE76B73J20110713

Sunshine is the best disinfectant. Hopefully the detail includes the discount rate used to work out the PV of the pension liabilities. I think that it is safe to assume that it is not the same negative real rate available to savers.

Share this post


Link to post
Share on other sites

there is only one thing the report will be fuller of.

fuller BS

Share this post


Link to post
Share on other sites

I am not sure if we have done this yet.

It seems that the government are going to publish a fuller set of public accounts to-day on a similar basis to the way that a company would report its balance sheet.

Needless to say, the liability side of the balance sheet is larger than the reported deficit.

http://uk.reuters.com/article/2011/07/13/uk-britain-liabilities-idUKTRE76B73J20110713

Sunshine is the best disinfectant. Hopefully the detail includes the discount rate used to work out the PV of the pension liabilities. I think that it is safe to assume that it is not the same negative real rate available to savers.

This can be huge!

And it will add objectively - numbers! - in the economic and political debate. We need this. The country won't be able to solve these problems until it understands it, objectively.

Indepndent: UK public debt soars to record £2 trillion

http://www.independent.co.uk/news/uk/politics/uk-public-debt-soars-to-record-1632-trillion-2312695.html

Bloomberg: U.K. Public-Sector Pension Liabilities Reach $1.75 Trillion

http://www.bloomberg.com/news/2011-07-12/u-k-public-sector-pension-liabilities-reach-1-75-trillion.html

FT: Huge debts added to government books

http://www.ft.com/cms/s/0/3fedadb6-aca8-11e0-a2f3-00144feabdc0.html#axzz1RyGy2Zqc

Mail: The REAL cost of Britain's debt mountain: £78,000 for every family (...)

http://www.dailymail.co.uk/news/article-2014102/The-REAL-cost-Britains-debt-mountain--78-000-family.html?ito=feeds-newsxml

Much more (Google news)

http://news.google.co.uk/news/more?hl=en&q=government+publish+accounts&rlz=1B3GGLL_en-GBGB370GB370&um=1&ie=UTF-8&ncl=dgg4mpdwx73KX6M0FxO4pedCRgAOM&ei=eFMdTurnF4GW8QO--8GoCA&sa=X&oi=news_result&ct=more-results&resnum=1&ved=0CDMQqgIwAA

.

Edited by Tired of Waiting

Share this post


Link to post
Share on other sites

What I can't understand is that to me, the UK is in the same position as Greece, Ireland etc, but the markets are treating the UK almost as if we were another Germany.

Why is that? The US are leaning on the ratings agencies because we support their wars?

Share this post


Link to post
Share on other sites

What I can't understand is that to me, the UK is in the same position as Greece, Ireland etc, but the markets are treating the UK almost as if we were another Germany.

Why is that? The US are leaning on the ratings agencies because we support their wars?

Long term debt maturity, the longest in the world infact, the UK treasury/BOE were on the ball enough to see this coming and issued a huge amount of long term maturity debt just before the SHTF in 08

Edited by georgia o'keeffe

Share this post


Link to post
Share on other sites

They just showed this news story on Channel Five's Matthew Wright.

http://www.dailymail.co.uk/news/article-2014102/The-REAL-cost-Britains-debt-mountain--78-000-family.html?ito=feeds-newsxmlttp://

The REAL cost of Britain's debt mountain: £78,000 for every family... thanks to Labour

The true size of Britain’s debt mountain can be revealed today as £2trillion – nearly £80,000 a household.

Previously ‘hidden’ liabilities including the cost of public sector pensions and building projects are being published by the Treasury.

They show that future payments to retired teachers, police officers and NHS staff will cost taxpayers £1.1trillion, or £1,100billion.

The enormous figure, which is equal to 80 per cent of Britain’s output, is treble the combined national debts of Greece, Spain, Portugal and Ireland...

....The £1.1trillion and the £40billion come on top of the official debt figure of £909billion.

The figures will appear on the Government books for the first time when it publishes full accounts for every Whitehall department...

.... Adding the new figures to the official debt of £909billion produces a figure of £2.049trillion. That works out as a £78,807 bill for each of the nation’s 26million households.

‘Many people would be amazed to know that until now the government did not have a single set of accounts like any company would,’ said a Treasury source.... "

More at link.

Share this post


Link to post
Share on other sites

They just showed this news story on Channel Five's Matthew Wright.

http://www.dailymail...s-newsxmlttp://

More at link.

it would be interesting to see how the Daily Mail can fit this in with the rising house price meme - if households have to hold the debt burden of others, then they can't bid up the price of housing at the same time

Share this post


Link to post
Share on other sites

This can be huge!

And it will add objectively - numbers! - in the economic and political debate. We need this. The country won't be able to solve these problems until it understands it, objectively.

Indepndent: UK public debt soars to record £2 trillion

http://www.independent.co.uk/news/uk/politics/uk-public-debt-soars-to-record-1632-trillion-2312695.html

Bloomberg: U.K. Public-Sector Pension Liabilities Reach $1.75 Trillion

http://www.bloomberg.com/news/2011-07-12/u-k-public-sector-pension-liabilities-reach-1-75-trillion.html

FT: Huge debts added to government books

http://www.ft.com/cms/s/0/3fedadb6-aca8-11e0-a2f3-00144feabdc0.html#axzz1RyGy2Zqc

Mail: The REAL cost of Britain's debt mountain: £78,000 for every family (...)

http://www.dailymail.co.uk/news/article-2014102/The-REAL-cost-Britains-debt-mountain--78-000-family.html?ito=feeds-newsxml

Much more (Google news)

http://news.google.co.uk/news/more?hl=en&q=government+publish+accounts&rlz=1B3GGLL_en-GBGB370GB370&um=1&ie=UTF-8&ncl=dgg4mpdwx73KX6M0FxO4pedCRgAOM&ei=eFMdTurnF4GW8QO--8GoCA&sa=X&oi=news_result&ct=more-results&resnum=1&ved=0CDMQqgIwAA

.

I wonder whether this is going to change perceptions. It should be scary to many that the PV of pensions liabilities exceed the traditional measure of the accumulated deficit.

I just watched a bit of the presentation by the OBR on the BBC. The discount rate that they used for the PV of pensions calculation was the real return on highly rated corporate bonds or 1.8% which is quite fair.

It does show that the PV of promises has risen by a large amount because of central bank actions. The actions of central bankers are not "free" after all.

The cost of the change in the discount rate has increased the PV by around 300 bn. In a low return world, pension promises have an even larger cost.

None of this is a surprise to those of us who understand bond arithmetic but it is probably beyond the interest or comprehension of most. This is a real pity as it is one of the crucial problems that we face.

Share this post


Link to post
Share on other sites

What I can't understand is that to me, the UK is in the same position as Greece, Ireland etc, but the markets are treating the UK almost as if we were another Germany.

Why is that? The US are leaning on the ratings agencies because we support their wars?

My guess is that they think that the ability to print money makes the UK a AAA credit for local currency government debt.

I don't think that the logic holds as the real value of printed money is much lower than par.

I know that the logic doesn't hold for any foreign currency UK debt that may be outstanding (if there is any at all).

Share this post


Link to post
Share on other sites

I wonder whether this is going to change perceptions. It should be scary to many that the PV of pensions liabilities exceed the traditional measure of the accumulated deficit.

I just watched a bit of the presentation by the OBR on the BBC. The discount rate that they used for the PV of pensions calculation was the real return on highly rated corporate bonds or 1.8% which is quite fair.

It does show that the PV of promises has risen by a large amount because of central bank actions. The actions of central bankers are not "free" after all.

The cost of the change in the discount rate has increased the PV by around 300 bn. In a low return world, pension promises have an even larger cost.

None of this is a surprise to those of us who understand bond arithmetic but it is probably beyond the interest or comprehension of most. This is a real pity as it is one of the crucial problems that we face.

Sure, not directly to the people/voter, but does put objective boundaries on all leaderships. Even the Labour party has to accept numbers - when these numbers are very clear and indisputable. Otherwise they lose even more credibility, first with think tanks, then journalists, and then with voters - or at least some voters. Even the Unions sometimes are forced to accept reality, if/when the numbers prove something.

Share this post


Link to post
Share on other sites

Sure, not directly to the people/voter, but does put objective boundaries on all leaderships. Even the Labour party has to accept numbers - when these numbers are very clear and indisputable. Otherwise they lose even more credibility, first with think tanks, then journalists, and then with voters - or at least some voters. Even the Unions sometimes are forced to accept reality, if/when the numbers prove something.

I hope that you are right. Unfunded pensions are a particular "bugbear" of mine.

http://www.housepricecrash.co.uk/forum/index.php?showtopic=140173

http://www.housepricecrash.co.uk/forum/index.php?showtopic=140173

A post from a year ago :

An idea that was floated here (I can't remember if it was my idea or someone else's) a while ago is for audited national accounts following GAAP (an income statement and a balance sheet) to be sent to each household in the UK annually.

In the private sector, pension accounting requires the net of the actuarial value of pension obligations and the assets and hedges owned to satisfy the obligations to be reported on the balance sheet. Changes in the net value flow through the income statement. I do not unbderstand how governments can get away with exluding the obligations from their debt and deficit numbers.

Increasing longevity, collapsing long term interest rates and increases in the size of the public sector mean that the state's obligations are rising massively. As the obligations are not completely funded or hedged, the offsets on the asset side of the balance sheet are nowhere near enough to prevent a massive worsening of our fiscal situation on a GAAP basis.

I would love to know the actuarial NPV of pension obligations and offsetting assets and hedges in this country. At a wild guess, I could imagine that the number is in the order of 2 tn and is worsening by 150 bn a year. If these numbers were included in national accounts, our debt and deficit numbers would be much worse than currently being reported to taxpayers and lenders.

At least some of this is finally entering into the public domain.

Share this post


Link to post
Share on other sites

I hope that you are right. Unfunded pensions are a particular "bugbear" of mine.

http://www.housepricecrash.co.uk/forum/index.php?showtopic=140173

http://www.housepricecrash.co.uk/forum/index.php?showtopic=140173

A post from a year ago :

At least some of this is finally entering into the public domain.

Yes, the "entering speed" in the "public domain" is always extremely slow, painfully so, in all areas, always, sadly. But things do evolve, ... eventually - sloooowly ... :D

But I am not worried about the long term, meaning decades ahead, or centuries. Technological development will continue, and at increasingly faster rates. The cost of living will continue to fall - in relation to earnings, like it has done for decades, centuries in fact (contrary of what the "public domain" still believes. ;) Dear "public domain": Think of Blackadder's Baldrick, concerned with not having enough turnips. :) )

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.