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Post by SeanBroseley on Jul 6, 2010 11:52:19 GMT 1
With regards to the proposal relating to transaction accounts: the money in these would be set aside from the assets of the bank, in much the same way that a unit trust account isn't an asset of the unit trust manager.
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Deleted
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Post by Deleted on Jul 6, 2010 15:54:32 GMT 1
[ Given the manner in which you use your account I am surprised that you're paying charges. Is there no way that these charges can be avoided? Perhaps you're being ripped off? oh i forgot to mention i have a £1750 overdraft that the halifax gave me when i switched to them to cover my bills ect. have never been in a position since to pay it off. they charge £1 a day for agreed overdraft. pretty important detail to forget really
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Post by ratcliffesghost on Jul 6, 2010 18:47:54 GMT 1
Leaving aside issues of the banks may still fail. I'm a pessimist on that. Also banks have been allowed to fail Can you explain to me how Lloyds are managing full page adverts in every sunday papers every week, constant television advertising, constant radio advertising and significant sports sponsorship after their very public bail out
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Post by SeanBroseley on Jul 6, 2010 22:14:51 GMT 1
Well Lloyds TSB are likely to be selling Scottish Widows.
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Post by ratcliffesghost on Jul 6, 2010 22:19:40 GMT 1
Well Lloyds TSB are likely to be selling Scottish Widows. I'll take that as a dont know
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Post by SeanBroseley on Jul 6, 2010 23:48:12 GMT 1
Well Lloyds TSB are likely to be selling Scottish Widows. I'll take that as a dont know Drumming up business and a fire sale. Shareholders are screaming in pain
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Post by SeanBroseley on Jul 8, 2010 8:29:36 GMT 1
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andyjo
Salop Leisure League
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Post by andyjo on Jul 10, 2010 12:13:02 GMT 1
I just wanted to thank the original poster for the links he placed on here which I found helpful. Indeed helpful enough to get me to post for the first time! I guess the one which was most helpful was the link to notayesmanseconomics which I have found very useful and informative. The latest update on what is going on with pensions and the changes in inflation etc. concerning them looks well informed. It looks a site written by someone who knows what he/she is talking about... Just in case it provokes anyone elses interest it is notayesmanseconomics.wordpress.com
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Post by davycrockett on Jul 10, 2010 18:51:45 GMT 1
This SeanBroseley financial advice thread seems to have been very popular this week ......... as a matter of interest for those who don't hold significant levels of shares, how much has the FTSE 100 'crashed' since the warning given on the 2nd of June? In other words if I'd had £1000 invested in a FTSE 100 tracker since the 2nd how much would i have lost?
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Post by SeanBroseley on Jul 11, 2010 1:27:45 GMT 1
2nd July. None at all - and neither have people who aren't invested in the FTSE 100. Given where bond markets are if the FTSE 100 goes above 5300 I'll start scratching my head.
I was out of the market for 12 months before it crashed last time. As long as people are making decisions about their money that they are happy with that is fine. I take the view that the consistent volatility of the main indices presages a crash. But I'll also wait to see when one particular fund I'm invested in reduces its cash level from 44%.
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Post by SeanBroseley on Jul 11, 2010 1:31:53 GMT 1
I just wanted to thank the original poster for the links he placed on here which I found helpful. Indeed helpful enough to get me to post for the first time! I guess the one which was most helpful was the link to notayesmanseconomics which I have found very useful and informative. The latest update on what is going on with pensions and the changes in inflation etc. concerning them looks well informed. It looks a site written by someone who knows what he/she is talking about... Just in case it provokes anyone elses interest it is notayesmanseconomics.wordpress.comThere's no reason for not being informed. The information is out there. 1 hour a day reading this stuff and in three months your knowledge takes a step change.
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Post by nickjonesey on Jul 13, 2010 14:47:32 GMT 1
We produce a weekly 'Monday Market Bulletin' which summarises the financial and economic news from recent press and often includes some words of one of our external independent fund managers. My website is Link------> here and this weeks can be downloaded. If you want to have it emailed straight to your inbox PM me and i'll add you to the list. To accurately time a move in or out of a specific investment/ asset class will never be 100% accurate as hindsight is not available in advance! You need to develop a personal investment strategy, take into account whatever level of risk to your capital you are prepared to accept and find the most suitable way to invest that money for your own circumstances. Some people are happy to do all this for themselves, others seek professionals to assist. Either way, leaving money in poor performing funds or on deposit is generally the worst thing to do long term. If anyone feels this attempt to help other B&A'ers is too shameless a plug please let me know and I'll adapt/ delete it.
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Post by Jonah on Jul 13, 2010 15:55:01 GMT 1
Of course it's a shameless plug I don't profess to know much about the way the financial world works so please excuse my ignorance for asking the following question. Why is it easier to read the markets when trouble looms than it is in the good times?
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Post by nickjonesey on Jul 13, 2010 16:40:11 GMT 1
Of course it's a shameless plug I don't profess to know much about the way the financial world works so please excuse my ignorance for asking the following question. Why is it easier to read the markets when trouble looms than it is in the good times? My non technical answer to that is that it generally isn't. Usually when times are tough there are other sectors or areas in the world that are producing positive resuts. Good management would find this but 2008 was one of the rare occasions when cash was one of the few ways of preserving wealth. As long as you didn't choose the wrong bank for it (Iceland?). Individual investors tend to follow a herd mentality. If a guy in the canteen has a fund that has done really well he will tell everyone else and they will think he's an expert. Then his colleagues are at least as likely to follow this advice than seek a professional. The media has a role to play too. That is great until a bubble bursts (such as technology stocks or buy to let investing). This is normally shortly after people think making money by buying and selling shares is easy. Many individuals are still nursing losses from the turn of the milennium becasue they either switched to cash after values dropped (and haven't done anything since) or encashed and put the money under the mattress. The media has a role to play in opposite markets too, as the price of anything is usually determined by the number of willing buyers there are in relation to the number of sellers. More buyers than sellers= prices rise. Same economics as per your business, any business. Uncertainty or negative sentiment tends to lead to a downward trend and this is what we have at the moment. There are real glimmers of positivity (IMF recently raised its estimate of global growth this year from 4.2% to 4.6% and expects growth of 6.5% from emerging markets for example). The level of current uncertainty and technical economic data provided by Sean makes a correction seem possible. Hope this lengthy reply goes some way to answering your very reasonable question! I'm still in the 'glass half full' camp with two hands firmly on the glass
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Post by Jonah on Jul 13, 2010 17:02:13 GMT 1
Thanks Nick an extremely informative reply Have to add that I am in the same camp as you with the positive thinking. And as you well know my glass is never empty oh I mean half full
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Post by SeanBroseley on Jul 13, 2010 21:29:01 GMT 1
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Post by ratcliffesghost on Jul 13, 2010 22:19:19 GMT 1
Anyone notice the Government keynote speeches recently have been timed at half an hour after the Stock Market closes.....4.30 Wonder why the change
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Post by SeanBroseley on Jul 14, 2010 13:32:47 GMT 1
In answer to the question how do we get out of the current situation Steve Keen of the debt deflation website answered:
"Firstly, getting out of this can’t be painless: having let the finance sector get 2-4 times as large as it should be, downsizing it back to a socially useful scale will cause a lot of unemployment, to mention but one effect. Revealing that a huge slab of the so-called service industry is in fact a parasitic sector rather than a real service can’t help but be economically painful.
Debt that should never have been extended should be abolished–possibly as much as 50% of mortgage debt–otherwise the repayment burden of unrepayable debt will suppress demand indefinitely. This will in all likelihood bankrupt the lenders, and they’d need to be temporarily nationalised and required to provide working capital and loan rollovers for businesses in the meantime.
We then need to reform financial assets to stop this thing happening again: I favour redefining shares and property ownership in such a way that speculation on asset prices will be unprofitable. Two basic ideas there are to make shares on the secondary market time-limited (expiring after say 30 years) and limiting the amount that can be secured against a property to ten times the annual rental of that property."
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Post by Jonah on Jul 14, 2010 13:41:49 GMT 1
In answer to the question how do we get out of the current situation Steve Keen of the debt deflation website answered: "Firstly, getting out of this can’t be painless: having let the finance sector get 2-4 times as large as it should be, downsizing it back to a socially useful scale will cause a lot of unemployment, to mention but one effect. Revealing that a huge slab of the so-called service industry is in fact a parasitic sector rather than a real service can’t help but be economically painful. Debt that should never have been extended should be abolished–possibly as much as 50% of mortgage debt–otherwise the repayment burden of unrepayable debt will suppress demand indefinitely. This will in all likelihood bankrupt the lenders, and they’d need to be temporarily nationalised and required to provide working capital and loan rollovers for businesses in the meantime. We then need to reform financial assets to stop this thing happening again: I favour redefining shares and property ownership in such a way that speculation on asset prices will be unprofitable. Two basic ideas there are to make shares on the secondary market time-limited (expiring after say 30 years) and limiting the amount that can be secured against a property to ten times the annual rental of that property."[/quote Sean why are all the experts so clever after the event then? Surely not a case of them enjoying the good times as well? Why did they not have a voice?
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Post by SeanBroseley on Jul 14, 2010 15:15:45 GMT 1
Jonah, Steve Keen first wrote about this stuff (OK in an academic journal) in 1995. Google "Finance and economic breakdown" as an exact phrase. There are a couple of PDFs of the article on the internet but I can't download a full text for some reason. He then started banging the drum about it pretty hard from December 2005 on the internet. One thing about Steve Keen is although he teaches economics his models are using stuff developed by engineers. So he's having an input into what he does from outside the field of peer review and pressure, where people get to the point of gaining a reputation by having their academic papers quoted by a greater number of economists. Here's more about Steve Keen: www.debtdeflation.com/blogs/about/
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Post by RBA on Jul 14, 2010 16:51:15 GMT 1
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Post by Jonah on Jul 15, 2010 22:19:08 GMT 1
Sean sorry but ignorance again mate why had not Gordon Brown and the Labour government not heard or notice of Steve Keen?
Or in fact any Government?
Simplistic I know.........
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Post by SeanBroseley on Jul 16, 2010 7:53:23 GMT 1
Because they all believed in the end of boom and bust. Brown just verbalised what everyone else was thinking: Private and public sector. It was called the "Great Moderation" The economists at the Bank of England, Treasury (and now the OBR) had the ear of politicians. The economists in financial companies had the ear of those companies' CEOs. Back in 2003 my employer at the time produced a graph of the rise in house prices as against the National Average Earnings Index. The gap (in favour of house prices) was rising at an increasing rate from the early 90s. When this was circulated the wise heads who commented said that the point was that interest rates now were much lower and so the higher loans could be afforded. The caveat being, of course, but only as economic growth continued and only as long interest rates remained low. I read a piece in the FT a couple of weeks ago that might also have a bearing on it. This was part of the coverage of the latest appointment to the BoE MPC. It said that one of the problems in the UK was that Macroeconomics was a neglected part of economics that wasn't (even in the context of economics) attracting the best brains in the country. I just want to add that going against the majority view in your chosen field of operation can be a bruising experience. Also, these things can be difficult to judge. This is Robert Skidelsky's take: "Was the boom the fantasy, the slump the reappearance of reality? The answer is that the boom was neither more nor less real than the slump. The idea that asset prices in the boom were too "high" presupposes that there existed a set of objectively correct prices from which boom prices deviated. But where do such objectively correct prices come from and why are they more correct in a slump than in a boom? Expectations are only wrong in retrospect. Assets are worth no more and no less than buyers are willing to pay for them – regardless of whether we are in a slump or a boom." Full text: www.skidelskyr.com/site/article/by-george-he-hasnt-got-it-what-would-jm-keynes-think-of-george-osbornes-bud/
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Post by SeanBroseley on Jul 16, 2010 7:59:27 GMT 1
No. The government would just create deposits at the Bank of England and then charge punitive rates of interest for lending to the banks. (In the same way that credit is created in the private sector: out of thin air.) There was about £800 bn of Government loans that were created this way back in 2008-2009 which are due to come to an end in 2010-2012 (less what has been repaid). Insignificant when compared to the total national debt, and there's a very good rate of interest being paid. That's always been the government policy": lender of the last resort" but on terms which makes it quite painful.
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