Markets pricing in 3.5% rates by February

[Nomadd]

4 hours ago, Dreamcasting said:

Personally, I think anyone going all-in on the stock market at this time is a complete idiot.

Hi. 🖐️

[dances with sheeple]

5 hours ago, Unmoderated said:

Glad you feel the same way.

I was half joking, but you have been saying this for a long time. When it eventually happens (and it will) you'll say you told us so. You did, you told us lots. 

People on here including myself said that it wasn`t sustainable with higher/rising interest rates and they were right, they were wrong about how far the PTB would go to keep the debt Ponzi afloat, but forewarned is cautious, many on here have been prudent and set themselves up for economic turmoil, those who loaded up on mortgage debt are going to be in far worse shape IMO.

[Unmoderated]

On 15/08/2022 at 19:46, Bruce Banner said:

Did you not read my link where I explain my reasoning?

https://www.housepricecrash.co.uk/forum/index.php?/topic/245108-banks-looking-to-limit-cash-withdrawals/&do=findComment&comment=1103916387

Your appetite for risk is considerably greater than mine.

I've been retired for coming up fifteen years and my net worth today is greater than the day I retired so I must be doing something right. Madness? I think not!

 

1 hour ago, Bruce Banner said:

Where did I say 15 years?

See above  

[Bruce Banner]

40 minutes ago, Unmoderated said:

 

See above  

And what does that have to do with my post about NS&I?

I have been in cash for 15 years and have done reasonably well out of it I have money and I sleep well at night, but my post about NS&Is £2m 100% guaranteed limit had nothing to do with my personal circumstances. It was a post, in reply to another member, that you jumped on and called it madness!

Other than the £100k my wife and I hold in Premium Bonds, we haven't held any cash in NS&I since they were paying good rates on Guaranteed Growth Bonds. We pick the best rates available, always within the FSCS limit of £85k per banking licence, although I don't know why I'm telling you this because it's none of your business.

 

Edited August 19, 2022 by Bruce Banner

[Flat Bear]

20 hours ago, henry the king said:

Yeh but its 1 set of GDP data, a set of employment data and a set of inflation data.

Previous experience has shown any of those being less inflationary and they will use it as an excuse even if the other 2 are flashing red lights. 

All Bailey needs is an excuse. Literally any excuse. Of those 3 sets of data, one of them is likely to provide it for him.

Henry

I do agree fully that the BOE will do everything they can to keep that base rate stuck to that floor, and any rise will have to be painfully prised from there grip.

BUT, the pound has lost 1% against the USD today and is trading at 1.18 and we are just seeing the start of strike actions at a scale that has never been seen before (maybe 1926). Wage inflation is about to "explode". The FED will raise by 0.75% with an outside chase of a full 1% rise. I have just had an email telling me that the CWE union has just called strikes on the 26-31st Aug and again on the 8-9th Sept. I will put a note on the wall in our sales office and just let our regular customers know but expect everyone throughout industry to understand this will be a regular occurance for at least the next year until people are paid what they demand. The government can not win this one which is obvious I suppose, but why put up so much resistance? it doesn't make sense. I have had no warning of impending power cuts, has anyone else? but this will impact on our business in a very big way. There is no way I can mitigate for this but expect it to happen sometime soon. I hope the CWE union wins and get everything they demand because they are made up of the lowest paid in our society and they do deserve more.

The bottom line is that Bailey has been tumbled and has run out of excuses. There is only so many times you can call wolf.

[70PC]

 

https://news.sky.com/story/cost-of-living-inflation-fuels-63-hike-in-uk-debt-costs-as-borrowing-outstrips-forecasts-12676535

Inflation fuels 63% hike in UK debt costs as borrowing outstrips forecasts. 

 

[Flat Bear]

5 hours ago, Maghull Mike said:

Looks like the Banks will start lifting rates for savers from Sept ish

Mike

Yes

We have been notified we will get (drum roll) 0.15% for deposits of less than £1 million with a top rate of 0.4% with deposits of £10 million plus. So generous, not.

[Bruce Banner]

Just now, Flat Bear said:

Yes

We have been notified we will get (drum roll) 0.15% for deposits of less than £1 million with a top rate of 0.4% with deposits of £10 million plus. So generous, not.

Barclays? 

[Flat Bear]

2 minutes ago, Bruce Banner said:

Barclays? 

Barclays Business

[Bruce Banner]

3 minutes ago, Flat Bear said:

Barclays Business

I've been with Barclays, Business and Premier for over 50 years and I can't remember them ever offering a decent interest rate for saving.

They once asked why I don't save with them and my reply was "You're offering 0.5% and I'm getting 7% from state owned Northern Rock.

Edited August 19, 2022 by Bruce Banner

[Unmoderated]

42 minutes ago, Bruce Banner said:

And what does that to do with my post about NS&I?

I have been in cash for 15 years and have done well out of it, but my post about NS&Is £2m 100% guaranteed limit had nothing to do with that.

When in a hole stop digging!

Sorry, you ask where you say about 15 years, I show you the post. You say nothing to do with it and then confirm you've been in cash for 15 years!?

Every investment advisor on earth would tell you that's a terrible idea! 

How have you done well out of it? Sure, you've not lost the lot but how have you done well and compared to what?

Not in a hole and not digging. I'm just interested in how you perceive this as a good thing?

Perhaps HL are in a hole too?

https://www.hl.co.uk/news/articles/archive/the-value-of-investing-versus-cash

[Bruce Banner]

23 minutes ago, Unmoderated said:

Sorry, you ask where you say about 15 years, I show you the post. You say nothing to do with it and then confirm you've been in cash for 15 years!?

Every investment advisor on earth would tell you that's a terrible idea! 

How have you done well out of it? Sure, you've not lost the lot but how have you done well and compared to what?

Not in a hole and not digging. I'm just interested in how you perceive this as a good thing?

Perhaps HL are in a hole too?

https://www.hl.co.uk/news/articles/archive/the-value-of-investing-versus-cash

Yes I've been in cash for 15 years (although mostly not with NS&I) and I couldn't give a flying fandango about what "Every investment advisor on earth" (would you like to bet your house on that), would tell me .

Over those 15 years I've been getting an acceptable return with minimal risk and I'm happy with that. I have more in the bank than I did on the the day I retired and 15 years less in which to spend it. I made money when I was in business and now I'm retired I want to hang on to it.

I'm not suggesting that others follow suit and do not need, nor want, financial advice from the likes of you.

From HL website...

Our website offers information about investing and saving, but not personal advice. If you're not sure which investments are right for you, please request advice, for example from our financial advisers. If you decide to invest, read our important investment notes first and remember that investments can go up and down in value, so you could get back less than you put in.

Edited August 19, 2022 by Bruce Banner

[Unmoderated]

8 minutes ago, Bruce Banner said:

Yes I've been in cash for 15 years (although mostly not with NS&I) and I couldn't give a flying fandango about what "Every investment advisor on earth" (would you like to bet your house on that), would tell me .

Over those 15 years I've been getting an acceptable return with minimal risk and I'm happy with that.

I'm not suggesting that others follow suit and do not need, nor want, financial advice from the likes of you.

From HL website...

Our website offers information about investing and saving, but not personal advice. If you're not sure which investments are right for you, please request advice, for example from our financial advisers. If you decide to invest, read our important investment notes first and remember that investments can go up and down in value, so you could get back less than you put in.

That's fine and there's no need to be so defensive. 

But the painful thing is you lose value in cash over time and that is guaranteed. But if you have no appetite for risk then that's cool. 

It seems many are hung up on risks. Everything is a risk isn't it though? I drive to see friends. Risk of crash, reward of having fun. 

https://www.ig.com/en/trading-strategies/what-are-the-average-returns-of-the-ftse-100--200529

There's a table here showing the worst, bets and average 5, 10 and 25 year returns.

You might get less than you paid in but it's very unlikely over a longer term of regular investing. 

Anyway, you're happy in cash whereas I'm short cash (mortgage). The current rate of inflation is eroding the mortgage at a rate not far off my take home each month. 

[Bruce Banner]

3 minutes ago, Unmoderated said:

That's fine and there's no need to be so defensive. 

But the painful thing is you lose value in cash over time and that is guaranteed. But if you have no appetite for risk then that's cool. 

It seems many are hung up on risks. Everything is a risk isn't it though? I drive to see friends. Risk of crash, reward of having fun. 

https://www.ig.com/en/trading-strategies/what-are-the-average-returns-of-the-ftse-100--200529

There's a table here showing the worst, bets and average 5, 10 and 25 year returns.

You might get less than you paid in but it's very unlikely over a longer term of regular investing. 

Anyway, you're happy in cash whereas I'm short cash (mortgage). The current rate of inflation is eroding the mortgage at a rate not far off my take home each month. 

Aren't you the clever one, I hope you've finished now. 

Edited August 19, 2022 by Bruce Banner

[Unmoderated]

7 minutes ago, Bruce Banner said:

Aren't you the clever one, I hope you've finished now. 

Pretty smart apparently.

Despite that I spend a lot of time arguing with strangers on the internet .

[scottbeard]

7 minutes ago, Unmoderated said:

Pretty smart apparently.

Despite that I spend a lot of time arguing with strangers on the internet .

You can’t just say “shares are better than cash” because it depends on an individuals investment objective and time horizon.

You can say that shares have outperformed cash over just about any 10 year period you care to imagine, but that doesn’t help someone who has a 2 year time horizon and is very risk averse.

[Unmoderated]

1 minute ago, scottbeard said:

You can’t just say “shares are better than cash” because it depends on an individuals investment objective and time horizon.

You can say that shares have outperformed cash over just about any 10 year period you care to imagine, but that doesn’t help someone who has a 2 year time horizon and is very risk averse.

Very true. I did raise this in other posts. 

We were discussing a 15 year time horizon. 

[Bruce Banner]

1 minute ago, Unmoderated said:

Pretty smart apparently.

Despite that I spend a lot of time arguing with strangers on the internet .

You probably think there's a sound financial reason for doing that, otherwise you wouldn't do it in office hours!

Why did you doctor the quote of my post? You removed the following which I thought important...

"I have more in the bank than I did on the the day I retired and 15 years less in which to spend it. I made money when I was in business and now I'm retired I want to hang on to it."

Perhaps you wont feel so smart if you give financial advice to someone who is stupid enough to follow it and loses his shirt.

Now will you please find someone else to annoy!

[Bruce Banner]

1 minute ago, Unmoderated said:

Very true. I did raise this in other posts. 

We were discussing a 15 year time horizon. 

No you silly little man, we were discussing a 15 year past time horizon, not future!

[henry the king]

7 hours ago, Unmoderated said:

I am well aware of the risks. 

It's a choice of a guaranteed loss of 10% per annum, or the risk that a diverse portfolio stops paying dividends and loses capital. 

The question to answer is what are your goals? Why are you holding that cash? New car? Unforeseen repairs to house? Holidays? Grand kids? Care?

Work out your investment horizon and plan accordingly. 

You mentioned 15 years in the post you were discussing this last time. 

BoE shows that £ has lost 27% to inflation since 2007 up to 2021: https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator

Meanwhile the FTSE has lost less than 17% to inflation over that period EXCLUDING DIVIDENDS : https://www.statista.com/statistics/261764/annual-development-of-the-ftsenull-index/

You'll also note that 2007 was a high point in the FTSE illustrating that even if you got very unlucky with putting it all in in one go (never do this, pound cost averaging is the right way) you'd still out perform cash. 

If you include those dividends you are up.... massively.

Ultimately it depends on your goals and objectives. 

Cash is one of the best inflation hedges in the short term.

If there is systemically high inflation in the UK then it will lead to systemically high rates. And that will lead to defaults, a lot of them. And that will lead to financial issues. Businesses will go under. Financial businesses will also go broke. Contagion will happen. It doesn't need to be as bad as 2008 to be bad. You could easily see 50% wiped off major stock markets in such a scenario. 

The reason stock markets are doing well currently is precisely because they think inflation will come down quickly and allow central banks to pivot. If inflation persists then you will see serious negative returns on stock markets. Much worse than cash.

So I would invest in stocks if I thought inflation was going to retreat quickly. Otherwise, I would go for cash.

Edited August 19, 2022 by henry the king

[Unmoderated]

5 minutes ago, Bruce Banner said:

You probably think there's a sound financial reason for doing that, otherwise you wouldn't do it in office hours!

Why did you doctor the quote of my post? You removed the following which I thought important...

"I have more in the bank than I did on the the day I retired and 15 years less in which to spend it. I made money when I was in business and now I'm retired I want to hang on to it."

Perhaps you wont feel so smart if you give financial advice to someone who is stupid enough to follow it and loses his shirt.

Now will you please find someone else to annoy!

Are you suggesting I'm a VI and thing this forum is worth influencing in order to prevent some market crash?

I'm sorry, I didn't doctor your quote? You did say that you had more in the bank but last time we went around in this circle I asked about real versus nominal. You could have earned 0.1% in interest in the last 15 years and you'd have more in the bank if you'd not spent any. 

How did you buy a house though without taking money out? Anyway

It seems you believe investing is stupid? Or following financial advice is stupid? How so?

How are you annoyed? You're constantly showing me up and proving me wrong aren't you?

3 minutes ago, Bruce Banner said:

No you silly little man, we were discussing a 15 year past time horizon, not future!

Careful, insults tend to get people moderated don't they? 

We weren't discussing that, we were discussing two things:

1. how you managed to improve your financial position only in cash over 15 years

2. How inflation destroys real value over time and hence not being in cash for 15 years is regarded as the better option.

If you want to discuss 15 years past we have the benefit of hindsight. This plainly shows cash was a nonsense move. It's a silly position to argue from. 

Thinking 15 years ahead I would (and am) taking my own advice. 

How old are you?

[Unmoderated]

1 minute ago, henry the king said:

Cash is one of the best inflation hedges in the short term.

If there is systemically high inflation in the UK then it will lead to systemically high rates. And that will lead to defaults, a lot of them. And that will lead to financial issues. Businesses will go under. Financial businesses will also go broke. Contagion will happen. It doesn't need to be as bad as 2008 to be bad. You could easily see 50% wiped off major stock markets in such a scenario. 

The reason stock markets are doing well currently is precisely because they think inflation will come down quickly and allow central banks to pivot. If inflation persists then you will see serious negative returns on stock markets. Much worse than cash.

So I would invest in stocks if I thought inflation was going to retreat quickly. Otherwise, I would go for cash.

You may like to revisit rates in the 1970s versus inflation. 

You may also like to model out what would happened had you 'shorted' cash over that time by borrowing at a fixed or variable rate. 

What you're saying is incorrect. 

Cash is an appalling inflation hedge. 

[Bruce Banner]

4 minutes ago, Unmoderated said:

Are you suggesting I'm a VI and thing this forum is worth influencing in order to prevent some market crash?

I'm sorry, I didn't doctor your quote? You did say that you had more in the bank but last time we went around in this circle I asked about real versus nominal. You could have earned 0.1% in interest in the last 15 years and you'd have more in the bank if you'd not spent any. 

How did you buy a house though without taking money out? Anyway

It seems you believe investing is stupid? Or following financial advice is stupid? How so?

How are you annoyed? You're constantly showing me up and proving me wrong aren't you?

Careful, insults tend to get people moderated don't they? 

We weren't discussing that, we were discussing two things:

1. how you managed to improve your financial position only in cash over 15 years

2. How inflation destroys real value over time and hence not being in cash for 15 years is regarded as the better option.

If you want to discuss 15 years past we have the benefit of hindsight. This plainly shows cash was a nonsense move. It's a silly position to argue from. 

Thinking 15 years ahead I would (and am) taking my own advice. 

How old are you?

Oh shut up... and you did doctor the quote!

[henry the king]

Just now, Unmoderated said:

You may like to revisit rates in the 1970s versus inflation. 

You may also like to model out what would happened had you 'shorted' cash over that time by borrowing at a fixed or variable rate. 

What you're saying is incorrect. 

Cash is an appalling inflation hedge. 

I am stating a fact based on market observations in 2022. 

Inflation is more or less a global phenomenon. When bad inflation data comes out, you will see markets dump. So if your idea is to hedge against inflation in stocks then I am telling you that is completely farcical. Because if inflation continues or persists (i.e. commodity prices stay high) then it means central banks will do more and that means stocks will collapse. 

That is why the market has pumped recently. US data showed fading inflation data. And it dumped because of inflation forcing a hawkish fed. That is really all there is to it.

Hence cash is an amazing inflation hedge in the short term. In the long term? Yes it is a bad hedge. But in the short term it is a great hedge. That is why when inflation was on the rise in the US and inflation and central bank expectations were hawkish, then big time investors were holding onto cash as much as possible. MoM inflation was 0.6% in the UK last month. That is meaningless. Investments can drop that in an hour.

 

[scottbeard]

1 minute ago, henry the king said:

I am stating a fact based on market observations in 2022. 

Inflation is more or less a global phenomenon. When bad inflation data comes out, you will see markets dump. So if your idea is to hedge against inflation in stocks then I am telling you that is completely farcical. Because if inflation continues or persists (i.e. commodity prices stay high) then it means central banks will do more and that means stocks will collapse. 

That is why the market has pumped recently. US data showed fading inflation data. And it dumped because of inflation forcing a hawkish fed. That is really all there is to it.

Hence cash is an amazing inflation hedge in the short term. In the long term? Yes it is a bad hedge. But in the short term it is a great hedge. That is why when inflation was on the rise in the US and inflation and central bank expectations were hawkish, then big time investors were holding onto cash as much as possible. MoM inflation was 0.6% in the UK last month. That is meaningless. Investments can drop that in an hour.

 

You’ve just explained why cash is a good hedge against stockmarket crashes, not against inflation.