Tuesday, Jan 06, 2015

Interest rate rise would put many more in trouble, with almost 60% saying they are already strugglin

Guardian: Millions fear missing January’s rent or mortgage payments, says Shelter

Britain is booming again - almost 60% of people say they are struggling to meet their housing costs. One in nine fear they will be unable to meet January’s payments, as families struggle to balance their budgets after Christmas.
Great start to 2015. Even if rates do not rise this year, it is clear that everyone is tapped out. Where do we go from here?

Posted by debtserf @ 01:37 PM (3924 views)
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1. hpwatcher said...

They are going to continue to struggle....

Tuesday, January 6, 2015 02:05PM Report Comment

2. libertas said...

That is why the next rate hike is down a hill. Possibly 0.25% cut to 0.25% before the election. Definitely if Greece moves to Grexit this month, but possibly delayed until Autumn if not.

Watch UK 2yr bond yields. They have fallen from 0.5% to 0.4% since Christmas. If they convincingly fall to 0.25% or below, BOE's hand may be forced to avoid demand for Gilts not stripping supply. They have to keep the price to a place where demand is satisfied or else there are problems for the institutions forced to buy Gilts to achieve capital ratios.

Ending the requirement for annuities was a method of reducing demand for Gilts, which could impact, but will not affect the trend.

Tuesday, January 6, 2015 10:46PM Report Comment

3. khards said...

The UK won't move rates until the US has wither moved rates or resumed printing. I guess policy makers will do nothing until things reach a head/crisis, then tell the Sheeple we need to do this because XYZ. In summary current policy based on 2008/9 crisis is limited, they need to wait until there is another crisis.

I wouldn't want to be in stocks right now as this is a manipulated indicator authorities use to dictate policy. They let shares fall, then it gives an excuse for printing. They could also manipulate unemployment back up.
I guess that there will be no crisis allowed until a month or two before election time, then the politicians will come forth and tell the sheeple 'you need us'.

Wednesday, January 7, 2015 09:45AM Report Comment

4. hpwatcher said...

I think there will be some kind of event, which will shake the markets. After which, we will return to the 'norm' and interest rates will rise for a number of years. The exit of Greece could well be the start.

Wednesday, January 7, 2015 10:33AM Report Comment

5. debtserf said...

The 'event' is already happening; aka the unravelling of the oil price. The overleveraged, over-rehypothecated house of debt cards is starting to wobble. When it topples then I doubt that that there will be much of a return to 'normal' for a very long time -unless you think the last 6 years is normal.

Wednesday, January 7, 2015 11:44AM Report Comment

6. nickb said...

Can you expand a bit more on the oil price? Seeing as the UK is a net oil importer, this helps our balance of payments situation ie we need to export fewer dollars to pay our oil bills, a transfer to us from net oil exporters. When oil price goes up most people say we are worse off for this reason, with people less able to meet their debts after fuel and related prices increase, so how come when it falls we are not better off?

Wednesday, January 7, 2015 12:58PM Report Comment

7. debtserf said...

Until a decade ago we were net oil exporters, so you could argue that that loss of production hasn't done our BoP much good either.

Interestingly, December's Balance of Trade deficit was the lowest in 7 months lower due to a decrease in oil imports (ie, lack of demand) as well as sales of silver. Selling the family silver just to make ends meet? Sterling is also falling against the dollar, so that is offsetting these falls to some etent.

We may appear to be better off due to lower prices right now, but longer term this is about far more than prices at the pump.

Firstly, the transition from net exporter to importer is fatal for our economic future. Some have argued that North Sea Oil was the one thing that saved our bacon back in the 70s. With current prices all North Sea production is unprofitable. The NSO industry could collapse if this rout is protracted. It could collapse anyway.

Oil is the most vital commodity, essential for economic growth. If peak (cheap to extract, and abundant) oil is in the rear-view mirror, then what does that say about our prospects for future growth? (Not just the UK, but for the whole world).

Politicians will tell you that the recent price falls are A Good Thing, but there are billions at stake in the direct financing of the industry as well as all the associated financialization and speculation around the industry, anything from junk bonds to futures, a lot of money (or rather, debt) could vanish in this latest oil bust. Trillions if you include the derivates.

Enjoy your cheap petrol today, because tomorrow the economy could slip into a deflationary death spiral.

Wednesday, January 7, 2015 07:56PM Report Comment

8. debtserf said...

Btw, can anyone tell me how you embed images/url's in comments?

Wednesday, January 7, 2015 08:21PM Report Comment

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