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Of course they did, but nonetheless, 80% of all financial tramsactions in Europe (with undoubtedly a much higher percentage for exotic derivatives and such) are executed in London, so it's not really surprising who is being blamed, is it?

thats a bit like blaming Tescos for a bad credit card bill.

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thats a bit like blaming Tescos for a bad credit card bill.

Partly, but also a part of the debt is from products that were sold on as low-risk. Of course the investor should "do their own research" but these products were deliberately obfuscated.

The UK cannot relinquish the financial sector whether they find it moral or otherwise because it is a large part of our economy so any decision to keep it by the current government should be seen through this prism. Cameron cannot take it out back and shoot it even if he hated it.

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The UK cannot relinquish the financial sector whether they find it moral or otherwise because it is a large part of our economy so any decision to keep it by the current government should be seen through this prism. Cameron cannot take it out back and shoot it even if he hated it.

What part of the financial sector was threatened by the EU changes?

Everyone talks about the financial sector but surely that includes all the retail domestic banking, the insurance companies, etc, which, I assume, has nothing to do with the exotic global investment banking that takes place in Canary Wharf?

Surely talking about 'the financial sector' is like talking about how important the public sector is - the public sector including binmen, nurses, doctors but also loads of middle managers who do sweet FA.

The financial sector is huge in the UK but surely most of it has nothing to do with the EU proposed taxes?

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Of course they did, but nonetheless, 80% of all financial tramsactions in Europe (with undoubtedly a much higher percentage for exotic derivatives and such) are executed in London, so it's not really surprising who is being blamed, is it?

That is a bit like the 'Big Boys Made Me Do It' argument that kids used to come out with when they were caught getting into mischief.

London has always been a been the biggest financial centre in Europe even before the UK joined the EEC. No one forced the European banks to come there and trade derivatives etc any more than the internet can be blamed for people watching pornography,

Anyway it is not even remotely the whole picture since many German banks were just as happy to screw up their finances in Dublin as in London where oversight by regulators was just as useless.

http://en.wikipedia.org/wiki/Depfa_Bank

In addition most of the PIIG debt has been run up in conventional European bond markets where the debt was issued by individual sovereign states not by exotic derivative traders in London.

I am not claiming the City is not full of crooks. It is just that many of them are not British. They just choose to come here to commit their crimes..

Edited by stormymonday_2011
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It all seems pretty simple to me.

Suppose I have a job earning £16,000 a year, and can save, after all my outgoings, about £3,000 a year. Instead of saving, I borrow £120,000 from lots of credit card and personal loan providers and blow it all on holidays and clothes.

What should I do?

All I know is that the vital moment, when I could have changed my destiny, has passed. There is nothing I can do now.

Declare yourself bankrupt and then get on with your life.

Just as will happen to the Euro.

There was a good set of interviews around 9am on Radio5. Both foreigners/overseas. One lives in France and said that the meeting was all about people satisfying their own countries political agendas. The French have elections next year and are already promising EU subsidies to all their people, that's his vested interest. And that's what they have done all along for the last X years. They've received a massive proportion towards agriculture for example. Germans the same and all other countries are all just taking as much as they can, any pretence to protect the Euro and the world economy is just BS.

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This will have Alex Salmond's sphincter twitching. The SNP's "Independence in Europe" model could hit the buffers. Could it be that helping save one Union is worth risking another?

Salmond is both wily and shameless so the SNP has simply changed the tune to which it dances.

Currently it is jigging to the idea of an Independent Scotland as part of a Scandinavian zone of 'influence' (whatever that is) similar to that touted in the 1970s.

http://www.upi.com/Top_News/World-News/2011/12/07/Scottish-nationalists-look-to-Scandinavia/UPI-59001323237743/

The SNP knows full well that Scotland along with Northern Ireland returned the biggest No vote in the 1975 UK European Referendum. In fact some of the Scottish isles were the only parts of the UK to reject outright ratifying joining the EEC.

http://en.wikipedia.org/wiki/United_Kingdom_European_Communities_membership_referendum,_1975

Of course, that might have all changed in the past 35 years but I would not put your life savings on it.

Edited by stormymonday_2011
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What part of the financial sector was threatened by the EU changes?

Everyone talks about the financial sector but surely that includes all the retail domestic banking, the insurance companies, etc, which, I assume, has nothing to do with the exotic global investment banking that takes place in Canary Wharf?

Surely talking about 'the financial sector' is like talking about how important the public sector is - the public sector including binmen, nurses, doctors but also loads of middle managers who do sweet FA.

The financial sector is huge in the UK but surely most of it has nothing to do with the EU proposed taxes?

On the contrary. Cameron was quite right to opt out, because one of the purposes of the treaty change is to impose taxes which would be binding to apply for all member states. Taxes that would support the European Commission, the ECB and whatever other quango that calls itself the European xxx. And in particular what they want to impose are financial transactions taxes. So far what has been proposed by the European Commission are 0.1% tax on bond and equity transactions, and 0.01% on derivative transactions between financial firms. Those two taxes alone are estimated to raise 55 billion euros.

The U.K. runs a trade defict in goods and a trade surplus in services, chiefly financial services. HSBC, who paid £1.2 billion in taxes in the latest financial year for which figures are available (2009/10 year?) are already thinking of moving their base back to Hong Kong - they don't like the bank levy - have apparently made it clear to Cameron and Co that if any transaction based financial taxes are introduced in London, of the kind being proposed by the EU, they'll be off somewhere else.

At the moment, the government doesn't track banks at the transaction level, nor does it desire to. If FTT type taxes are introduced, that will become necessary. Of course Germany and France in particular want the tax imposed on all the EU countries - if it isn't, the banks will just move all of their derivatives and bond/equity trading out of Continental Europe to London. Cameron needn't worry. He's not going to be alone for very long at all. Do you think, for instance, the Irish can afford for their banks to move some of their most profitable transactions to London, and the income tax payable on the profits with it?

Plus, having granted tax imposing powers to the EU, binding on all member states, where will it end? How about a financial debits and credits tax of the kind they had in Australia in the 1980s and 1990s? So every time you deposited your pay you got slugged. And the same with any withdrawals you made.

The European Commission and the ECB plus all of the satellites are massive bureaucracies, that have a voracious appetite for money. Once they can raise taxes, there'll be no stopping them. In no time at all a lot of the banks operating in London, if Cameron had agreed to this, would have moved their operations elsewhere, out of harm's way. Banks aren't there to serve the people; they're there to make money for their shareholders. They're not going to set themselves up to pay out 55 billion a year in transaction taxes. Money straight from their bottom line.

Merkosy reckon that such a tax would greatly diminish the attraction to operating in London compared to the home countries, because all of the financial regulations and taxes they currently have to pay in their home countries would become payable wherever they reside in the EU.

As to the danger to British manufacturing firms doing business with Europe, there's currently a huge trade imbalance between Britain and the rest of the EU, not in Britains favour and running to billions of pounds a month. There would be a massive surge of patriotism in Britain if Merkozy tried to take revenge on the Brits not falling in with their meglomaniac ways. BMW showrooms would go bust all over the country. Santander would have to close. Their British customers would move their accounts to HSBC, if they haven't already.

So Merkosy have an agreement between them and the other 24 EU states for this? Let's see. If they seriously think that they have a strong and robust agreement, just because they other leaders wanted to look like "team players" instead of standing up and protecting their country's interests, they are dreaming. The German state is a control freak. I expect the PIIGS to go along, (and then thumb their noses at Merkosy and spend the money however they want) because they need to borrow billions to keep their economies afloat and are expecting to make money on the deal, i.e. by being able to borrow from the ECB at low interest rates, refinancing all of their more expensive commercially funded debt. The French are not into the English - predictable , considering historically they are Scotland's ally, not England's - and Sarkozy fancies himself as Bully Cat's right hand man.

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On the contrary. Cameron was quite right to opt out, because one of the purposes of the treaty change is to impose taxes which would be binding to apply for all member states. Taxes that would support the European Commission, the ECB and whatever other quango that calls itself the European xxx. And in particular what they want to impose are financial transactions taxes. So far what has been proposed by the European Commission are 0.1% tax on bond and equity transactions, and 0.01% on derivative transactions between financial firms. Those two taxes alone are estimated to raise 55 billion euros.

Please bother to check what the summit was actually about.

The agreement reached on Friday contained no such provision and such a tax was not even on the summit agenda (the summary statement and agreement did not mention it nor any other kind of banking regulation with even one word). None of the treaty changes proposed have any bearing on how easy or difficult it would be to try and introduce such a tax in the future. The treaty changes proposed were solely regarding budgetary rules (limits of the size of the deficit, not implying any particular taxes nor who would receive those taxes) and the way in which the the deficit procedure within the eurozone works.

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Please bother to check what the summit was actually about.

The agreement reached on Friday contained no such provision and such a tax was not even on the summit agenda (the summary statement and agreement did not mention it nor any other kind of banking regulation with even one word). None of the treaty changes proposed have any bearing on how easy or difficult it would be to try and introduce such a tax in the future. The treaty changes proposed were solely regarding budgetary rules (limits of the size of the deficit, not implying any particular taxes nor who would receive those taxes) and the way in which the the deficit procedure within the eurozone works.

I would think they are hardly going to openly propose banking regulation that could impact a specific economy at a EU summit, are they?

The current proposals from the summit appear to address future budgetary rules and checks as you say, but I cannot see enough concrete substance from the summit to attempt to address the current Euro crisis, to me it appeared more to be about gaining political favour?

Reality is Europe has crippled itself, the real action is going on else where in the world.

Mr Lyons said there would be a "two-speed world where a fragile West contrasts with a resilient East."

http://www.londonstockexchange.com/exchange/news/press-association/news-detail.html?newsId=N0399091323672595963A&packageId=N0401081323681150429A〈=en

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This will have Alex Salmond's sphincter twitching. The SNP's "Independence in Europe" model could hit the buffers. Could it be that helping save one Union is worth risking another?

...no..no...Scotland's answer to Ojukwu..is looking towards Scandinavia:

Bye, bye England? SNP plans closer Scandinavian ties after independence

Document reveals government wants to turn away from London if it wins referendum

http://www.independent.co.uk/news/uk/politics/bye-bye-england-snp-plans-closer-scandinavian-ties-after-independence-6272337.html

Edited by South Lorne
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The Market Oracle Newsletter

December 10th, 2011 Issue #24 Vol. 5

Germany Wins Eurozone War, UK Veto Puts Britain on the Fast Track to EU Exit

Dear Reader

"Britain will never join the Euro".... Germany has effectively won the Eurozone war as one after another EU states bowed to German pressure to toe the ECB / Bundesbank line for greater monetary union and centralised fiscal management under the guise of saving the euro or effectively face monetary death through either ever higher market interest rates such as that suffered by bankrupt Greece's 2 year bonds trading at a yield of 33%, or ejection from the Euro-zone and resulting economic collapse and an hyperinflationary wipeout of all savings.

This left Britain to Veto the treaty changes that 26 out of 27 agreed to and thus performing a tactical retreat Dunkirk style as David Cameron failed in his attempts to protect the city of London against primarily from French and German onslaught that has long enviously sought to steal a greater share of London's prominence as the defacto centre of the European financial system through which approx 50% of all financial business is conducted.

Unable to compete in the market place the French and Germans have long sought to cripple Britains' ability to compete against the Euro-zone currency block by means of destroying the UK financial sector through a series policies including a transaction taxes that would overtime diminish the advantages of doing business in London that is outside of the euro-zone and this transfer business towards the economic centre of Germany and to a lesser degree France, which the twin headed hydra of Merkozy knew would eventually force Britain to join the Eurozone in response to the increasing leakage of financial business to the euro-zone.

David Cameron unfortunately miscalculated the degree to which Merkozy had deployed arm twisting tactics not only on on the hook euro-zone members but also the other 9 EU countries outside the Eurozone such as Poland that David Cameron had hoped would add to the UK's weight in negotiating opt outs for the UK's financial sector. Unfortunately none of these countries could recall when Britain had come to their aid in their hour of need and instead fell under the financial spell of the Merkozy under the promise of eventual ECB funding of their budget deficits, which left Britain and David Cameron totally isolated as the only country to vote against the proposed EU treaty changes, instead now the Euro-zone will go it alone with the effective Germanification of the Euro-zone.

What's Planned for the EU 26?

Give up control of national budgets

Sanctions for Budget Deficits Greater than 3% of GDP

Provide Euro 200 Billion for IMF to Loan to Euro-zone members to re-finance debt during Q1 2012.

Britain's veto has effectively delayed implementation of the amended Treaty for several months as lawyers try to construct a legal framework for the treaty that excludes Britain, however it effectively means that Germany by probably March 2012 will take economic control of all euro-zone members, with the possibility that the other 9 none eurozone countries will also join and thus totally excluding Britain from all decision making meetings.

Has the Debt Crisis Been Solved?

In terms of the euro-zone sovereign debt crisis, no solution has been agreed to or even indicated that addresses the key problems of economic stagnation and growing unserviceable debt mountains, all that has happened is that the can has been kicked at most a couple of months forward into early 2012 when countries such as Italy, Spain and France will have to collectively re-finance over a Euro 100 billion of maturing debt that WILL to some extent have to be monetized by the ECB because the market won't buy it at anywhere near sustainable interest rates. In this respect we have already seen the ECB (Thursday) start the ball rolling by offering unlimited amounts of cheap money to Euro-zone banks for upto 3 years in an attempt at alleviating the credit crunch that risks a collapse of the euro-zone banking system, which effectively amounts to monetization of euro-zone debt through the backdoor, i.e. swapping PIIGS debt ( as collateral) against funds borrowed from the ECB, so if the banks default then the ECB is stuck with PIIGS debt, so the ECB is effectively buying PIIGS debts in all but name.

What does this all mean ?

When the deal is finally done (it could still unravel), it will mean that Germany will boom (France hopes to somehow also benefit ) as they prosper from a captured export market, where Germany finances and massages the spending of other european states for their goods and services to a far greater extent to which we have witnessed the likes of China lending money to the United States to buy Chinese junk in exchange for greater Chinese economic power and diminishing US economic power. The euro-zone members under debt crisis pressures are signing themselves up to becoming economic slave states of a Greater Germany.

On the way out of the Summit, the Irish Prime Minister consoled a latently depressed and isolated Cameron that "you are still a member of the single market".

Unfortunately Britain is the clear loser here because there is no way that Britain can go against the whole E.U., which appears united against Britain therefore expect the E.U. member states to vote for a string of laws that will hurt Britain's biggest industry the financial sector, such as preventing euro-zone banks from doing business in London, which means Britain could now be on the fast track towards an exit from the European Union.

If Britain is on the way out then it needs to act fast to get the upper hand against a weak euro-zone, because at this point in time Britain has the advantage in that it can ACT quickly without having to have summits with 17 other member countries, especially as all the summit has done is to press the pause button on the crisis for perhaps no more than 2 months during which time the debt crisis continues to get BIGGER!

Britain needs to put itself ahead of the curve by sparking a domestic boom, even if it means devaluing the currency by as much as 20%, because as we have seen this week, Europe will NOT be there for Britain, the time to act is now! If Britain waits then it will be too late because as my earlier analysis illustrated that Britain has its own ticking debt time bomb that could send interest rates soaring to double or even triple current yields on 10 year bonds, by which time it will be too late and Britain will be forced by the IMF to swallow austerity on the scale being shoveled down PIIGS citizen throats.

My Reaction and Strategy

The euro summit gives me more time to get rid of cash for hard assets such as properties or low risk paper assets such as corporate bonds (as I am fully stocked up with likes of dividend stocks courtesy of the summer-autumn correction), as the outcome remains in that fiat currency is going lose value because the politicians only have one solution in mind which is to print money to buy votes, and therefore feed the inflation mega-trend (euro likely to fall at a faster pace than sterling because the markets aren't stupid), though now the risk of loss of nominal funds on deposit in the banks has been reduced to at least Mid January 2012 (hopefully), when we will again start to see building market pressure towards the flood of sovereign debt refinancing which is likely to result in higher sovereign debt yields and therefore the banking system again starting to freeze towards credit crisis extremes.

So on one hand the article suggests investing in properties then on the other hand at the very end the article mentions credit crisis extremes again.

So I assume the article must be referring to overseas property markets rather than UK properties?

Perhaps even the US property market which has apparently had very large falls already in many areas.

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I would think they are hardly going to openly propose banking regulation that could impact a specific economy at a EU summit, are they?

The current proposals from the summit appear to address future budgetary rules and checks as you say, but I cannot see enough concrete substance from the summit to attempt to address the current Euro crisis, to me it appeared more to be about gaining political favour?

Reality is Europe has crippled itself, the real action is going on else where in the world.

Mr Lyons said there would be a "two-speed world where a fragile West contrasts with a resilient East."

http://www.londonstockexchange.com/exchange/news/press-association/news-detail.html?newsId=N0399091323672595963A&packageId=N0401081323681150429A〈=en

The summit was far from clear in its precise remit. What was proposed was the framework to change future bank behaviour, and next to nothing about the current debt crisis. And if the UK went along without raising concerns then it would send a clear signal to the finance sector as a whole that they can expect significant changes to impact upon them. I know we can veto etc. but in reality Cameron indicated, with his requirements, that we were going to protect the sector and that they could expect a veto if it were to arise in the future. It signalled to banking in the UK that they could be confident that we are in charge of our own affairs. And that is important. The French were posturing and therefore outright refused to recognise this and our changes were veto'd. I don't believe we actually veto'd anything, that's been misreported. And we ended up where we are. President Sarkozy has an election to win, and bashing the Brits is a vote winner. Though in March it may still be not enough to save him. It's all protectionism and political games. Sadly in the real world it is far from a game as we lose jobs.

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Please bother to check what the summit was actually about.

The agreement reached on Friday contained no such provision and such a tax was not even on the summit agenda (the summary statement and agreement did not mention it nor any other kind of banking regulation with even one word). None of the treaty changes proposed have any bearing on how easy or difficult it would be to try and introduce such a tax in the future. The treaty changes proposed were solely regarding budgetary rules (limits of the size of the deficit, not implying any particular taxes nor who would receive those taxes) and the way in which the the deficit procedure within the eurozone works.

But that's not why Cameron, according to the media, opted out. The sticking points according to the media (Euronews) involved "banking and financial regulations." Going back to September, the EC proposed a financial transactions tax, on bonds and derivatives transactions. Which they can't implement without agreement that a) they are able to set taxes, and B) they are able to compel the member states to collect those taxes. Obviously the target is the City of London. They are the ones doing most of the financial trading in Europe. Cameron's right. We are very unlikely to join the Euro. Fiscal integration is out of the question. It's not our currency. Why should the British taxpayer be asked to make funds available to support it?

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So this is what it has come to. All those supposedly wise, intelligent leaders, the finest brains in the country, striving heroically for Britain, from Edward Heath all the way through to Blair and the wretched Gordon Brown - the European dream has become the mess of pottage many thought it always was. It always seemed to be a power grab by a gang of little Hitlers intent on centralising their power. Anybody think they were remotely interested in the welfare of the populations of Europe. But all our leaders embraced it and caved in. Is Cameron showing a steely resolve here? Interesting to see how it all pans out.

wasnt the whole idea of the EU devised by an ex Nazi?

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So on one hand the article suggests investing in properties then on the other hand at the very end the article mentions credit crisis extremes again.

So I assume the article must be referring to overseas property markets rather than UK properties?

Perhaps even the US property market which has apparently had very large falls already in many areas.

Buy property in the UK, credit crisis in Europe.

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  • 442 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%



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