The Finance Thread

[SillyBilly]

Taken from the BBC (re. China's interest rate cut):

The People's Bank said that the interest rate cut was to reduce "the social cost of financing to promote and support the sustainable and healthy developments of the real economy".

It also acted to increase the flow of money in the economy by cutting the amount of cash banks must keep in reserve, effectively freeing them to lend more cash.

The central bank's move was broadly welcomed by economists.

A research note from JP Morgan stated: "China's decision to cut... will be regarded by many investors as overdue. The litmus test will come overnight, however, and the efficacy of the... cut in boosting the domestic stock market."

This is getting ridiculous now. The items highlighted in bold I have put the effective translation on:

1) Debt is becoming unsustainable at "normal" interest levels.

2) Promotion of reckless lending (more into infrastructure) to "promote" growth, who is paying these loans back? What happens if their investments go pear-shaped, nothing on the balance sheet? I think this played out before somewhere...

3) A demonstration of the sickness on Wall Street. They are addicted to cheap money, its the only thing propping the market up. A normal interest rate would kill the world economy. This is seen as a positive now!

 

As far as I can see, China is now following Western Central Bank policy and if like suggested the Fed/BoE does not raise rates then the bounce will come off the back of more cheap money and debt.

.

[SillyBilly]

@SillyBilly What a knowledgable chap, thanks for posting all of this.  I have a passing interest in markets, so this is very intriguing.  Do you analyse housing/property markets, also? 

Hi rob, in terms of property, only so much as the effect of zero interest rates and QE on asset prices, property being one of them.

The message seems to be loud and clear (now from China too), governments around the world will not allow their property markets to crash (or stock markets) while they have the power to influence it. They are loading up their own balance sheets to keep the ponzi scheme going. They weren't brave enough a few years ago to slay the beast and they aren't now because the problem (by kicking the can down the road) is infinitely bigger (7 years of 0% interest rates has seen to that). I've said before, the only difference between us and Greece and America and Greece is we have a printing press and interest rate control and they don't.

The fact is the housing market is KILLING the real economy. Contrary to the British psyche (and seemingly economic policy) bricks and mortar is largely NON-PRODUCTIVE debt, it will work against the economy as it restricts spending within it (...at these prices)

Take a look at the below graph (following point about central bank balance sheets), please consider I could only find one up to 2011, the problem is a lot worse now with $4.5 trillion in assets and steadily rising. To give this some context so it means something, in the last financial crisis Lehman brothers was leveraged at 30:1...we all know what happened there when TSHTF. The Federal reserve is now leveraged at about 80:1. In other words they have about $55 billion total capital to meet $4.5+ billion of assets. I read that a Fed Reserve insider admitted to James Rickards in private the Fed is insolvent. I think they know it. Consider we're in a THIRTY YEAR bull market for bonds (google the "taper tantrum 2013" to see how delicate that market is) then even with a moderate crisis it is difficult to see what tools the Fed actually has. When is this going to stop is my question?

 

[SillyBilly]

False alarm, false alarm.

Be exactly like Greece if they continue pretending the debt can be repaid. The bailouts just get bigger each time, the interest rates go lower (where possible) or the QE programmes (money printing) become bigger or more regular. Some may consider it a false alarm but I personally take it as yet another strong warning sign.

[Stive Pesley]

. When is this going to stop is my question?

 

 

Can it even stop? What are the realistic scenarios? Bearing in mind that none of this money is really "real" it's all debts on balance sheets and it was all created out of nothing so it makes my head hurt as to how this all actually means anything. I mean I know it DOES, but how? Presumably the only real way out is the bankrupt route where all money gets devalued?

[SillyBilly]

When you say controls, the controls in my view are not really against capitalism. Because capitalism is the best model we have. As you highlight, eventually a few end up with everyone else's money. For me it isn't capitalism itself. It evolves. It evolves to become corporatism. You need to prevent corporatism reaching a worrying level. To do this we need to continue to innovate. Also there do need to be controls. Ceilings if you will. The wonderful thing about capitalism is it allows for an amazing amount of innovation. Innovation leads to increase in quality of life. The issue is this innovation leads to the human being required less and the entry to innovation becomes more difficult.

Automation. People need to understand that automation is a wonderful thing. That we should be pushing for it to be implemented at as fast a rate as possible. The problem is how do we deal with the downfalls. In my view the solution is basic income and free education. It's a self fulfilling cycle. If every adult in the UK had an income that provided them with their basic needs and had access to free education then we would enter a renaissance period of sorts. A boost to innovation and culture. On top of this we will also benefit from other factors such as de-centraliztion. De-centralized currencies, de-centralized energy, zero marginal cost aka the internet of things. Such as Bitcoin, solar power and home battery units, physical goods becoming digital services. Such as online education or a marketplace where you choose from millions of designs for products you can then 3D print. 

It all comes down to timing. The time is almost ready for us to implement these two things (basic income and free education). If it were done 10 years ago, it wouldn't have worked out. Capitalism has some legs in it. We just need to take care of it for a few more decades. Because the reality is, no one knows what happens when AI arrives.  

 

Good post. Agree with the most part, though I disagree about the evolution to corporatism to be regarded as a separate concept altogether. Corporatism is the natural extension of capitalism; capitalism without a checking process. It is an inherently flawed system. Competition laws being the prime example. If you don't reign in a company's initial success then they can effectively buy out the entire market including any new competition and completely morph their business practices as a result. Do you have to be innovative or cost competitive if you dominate the market, the advertising media and pay politicians to maintain the status quo?

I am also more cynical as times passes with regard to this unquestionable idea that capitalism always works to the benefit of society. It works to the benefit of its bottom lines. The 300-500 mpg car could be on the road tomorrow if it wasn't for corporate interests. What would be the benefit though, to the environment, to YOUR pocket? Not a chance. Again, this serves to demonstrate that without governments pushing an agenda, be it environmental, social (wage minimums) or otherwise then capitalism will abuse its resources and actively begin to destroy itself.

Funnily enough the next book I was going to tackle is "The Precariat - The Dangerous New Class" by Guy Standing (proponent of basic income). I have watched some of Guy on Youtube and his ideas make a lot of sense and I take interest in his pilot projects, 1 interesting one going on in Utrecht in the Netherlands at the moment. I certainly think we need a new model. Automation is both a great opportunity and a great threat so far as I see it. I am leaning towards threat with the current state of things, not to say it won't change though.

 

[Ovis aries]

http://www.msn.com/en-gb/money/markets/britons-warned-stock-up-on-canned-food-for-stock-market-tumble/ar-BBm3clv?ocid=spartandhp

 

[SillyBilly]

Can it even stop? What are the realistic scenarios? Bearing in mind that none of this money is really "real" it's all debts on balance sheets and it was all created out of nothing so it makes my head hurt as to how this all actually means anything. I mean I know it DOES, but how? Presumably the only real way out is the bankrupt route where all money gets devalued?

The only example we have to go by is Japan and in 25 years all it has to show for it is a larger and larger debt, a stock market crash which would see pretty much every private pension decimated and a property market crash of biblical proportions. And as I described in an earlier post, we're not Japan, we're much worse. Our debt is owned not by prudent Japanese savers (from earnings) but by financial speculators, often leveraged up to the eyeballs.

You're right about devaluing but they're hoping it can be managed devaluation. That is the only way out (but we're too far gone in my opinion). There is a currency war going off around the world, led by Japan. Generally, a devaluation is likely to contribute to inflationary pressures because of higher import prices and rising demand for exports. Remember the goal is inflation at all costs. And remember inflation works for the indebted against the prudent, robs savers effectively.

Sorry for slanting this in American terms (what I write is pretty much also applicable to the whole western world) but the Fed have a 2% inflation target for 20 years. Most people don't notice this but 2% a year over a period of 20 years will lead to a 50% increase in the price level. It will take 150 dollars to purchase the same basket of goods 100 dollars buys now  What will be called the “dollar” will be worth one-third less (100/150) than what we call a dollar today. This is WHY we left the gold standard proper in 1971 folks so you could be robbed as you're all too thick to notice (you can't get inflation with a gold backed currency and you can't print more money, that had to stop!) So, the Fed’s zero interest rate policy accentuates the negative consequences of this steady erosion in the dollar’s buying power by imposing a negative return on short-term bonds and bank deposits.  In effect, the Fed has announced a course of action that will steal nearly 50 percent of the value of American savings in order to "pay off" 50% of their debt. And that is the easy way out (can't happen as the vicious circle of QE and 0% interest rates only causes inflation in stock markets and houses!) I have put on other threads though that it works out as more of a scam than this as it involves the West (countries with reserve currencies) stealing from the developing and emerging world by devaluing the dollar/pound/yen denominated assets these countries own. So basically, if China has a $1 trillion U.S gov bonds (held for 30 years lets say) and America devalues 50% in this time, then the Chinese in the year 2015 have gifted the Yanks $0.5 trillion. You might see why China and Russia are dumping U.S debt now and buying gold and other assets. FYI, the biggest buyer of U.S debt is now BELGIUM (p.s. its not really Belgium but is actually the Fed disguised as Belgium).

One of my favourite quotes is this: "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford. Couldn't be more true.

 

[ketteringram]

Surely everybody knows that the solution to debt, is always more debt, right? ☺

[SillyBilly]

Can it even stop? What are the realistic scenarios? Bearing in mind that none of this money is really "real" it's all debts on balance sheets and it was all created out of nothing so it makes my head hurt as to how this all actually means anything. I mean I know it DOES, but how? Presumably the only real way out is the bankrupt route where all money gets devalued?

And you are right. We have a debt based monetary system (replacing a gold backed system). The system is backed by "confidence". The dollar used to be "as good as gold", back when you could exchange it for gold. It is now backed by nothing and consequently can be created from nothing. Country Y needs a billion to buy X. That billion is created as bonds which are bought from financial institutions as debt. There are now a billion more dollars in circulation. Ad nauseam (until people clock onto the fact the debt can't be repaid or will be repaid in meaningless paper-backed currency).

You hit the nail on the head though when you say its on balance sheets. Its not moved, its not moved anywhere:

The velocity of money is at RECORD lows. I get pissed up, I give Sarry a quid (1) for some chips on the way home, the quid is given in change (2) to another bloke who uses it on a taxi ride home (3). Velocity of 3 for our pound coin. Velocity of money can therefore be linked to the health of the economy, how quickly does Mr pound work, how does he move in the exchange of goods and services through the economy. The answer from QE (you know the trickle down economics we're told about!) is that it doesn't move, banks keep it or pass it round among themselves in inter-bank lending. So, what I am saying is, we have created astronomical debt and none of the money has helped to grow the economy.

Which leads me into the following graph:

"Bang for your buck" is what you need from each unit of debt created, it needs to create a return greater than its liability (makes sense). Unfortunately, the last figure from the U.S is that each new dollar of debt now creates 4 cents worth of growth (again a new RECORD low). If that turns negative, we're in trouble. In layman terms, what this says is that QE does not boost the economy and it does not filter into ordinary people's pockets. A disaster policy which needs more and more of it to get the same effect i.e. more debt to now create 2 cents worth of growth and so on.....

 

 

 

[Uptherams]

Good post. Agree with the most part, though I disagree about the evolution to corporatism to be regarded as a separate concept altogether. Corporatism is the natural extension of capitalism; capitalism without a checking process. It is an inherently flawed system. Competition laws being the prime example. If you don't reign in a company's initial success then they can effectively buy out the entire market including any new competition and completely morph their business practices as a result. Do you have to be innovative or cost competitive if you dominate the market, the advertising media and pay politicians to maintain the status quo?

I am also more cynical as times passes with regard to this unquestionable idea that capitalism always works to the benefit of society. It works to the benefit of its bottom lines. The 300-500 mpg car could be on the road tomorrow if it wasn't for corporate interests. What would be the benefit though, to the environment, to YOUR pocket? Not a chance. Again, this serves to demonstrate that without governments pushing an agenda, be it environmental, social (wage minimums) or otherwise then capitalism will abuse its resources and actively begin to destroy itself.

Funnily enough the next book I was going to tackle is "The Precariat - The Dangerous New Class" by Guy Standing (proponent of basic income). I have watched some of Guy on Youtube and his ideas make a lot of sense and I take interest in his pilot projects, 1 interesting one going on in Utrecht in the Netherlands at the moment. I certainly think we need a new model. Automation is both a great opportunity and a great threat so far as I see it. I am leaning towards threat with the current state of things, not to say it won't change though.

 

I think we are on the same page. I am not saying corporatism has nothing to do with capitalism. That is still the economic model in which corporatism will have to exist in, no matter how rampant it becomes. 

My faith rests in the fact that the vested interests, the so called status quo do not like change. The Oil barons are a dying breed. The new power man is the tech man. They are the ones who want to change the world and can. You can't control currencies or drill for oil. So you innovate. You come up with de-centralized solutions. Digital currencies and solar power. But more important is the fundamental nature of technology. It continually progresses. We have even got to the point in a global market that shares vast amounts of information and data, that has finished products ready for market but does not have a wide release because the product evolution is so fast. 

You touch on the car industry. Well they were slacking with electric vehicles and vehicle automation. So two companies emerged and entered the market. Tesla and Google. Now everyone is trying to follow their lead. It's projected that by 2020 60% of the value of a car will be in the software. 

Watch over the next few years as tech companies smash their way into new markets. Telecommunication, transportation, energy supply, digital currencies, healthcare, education. Expect to see a hell of a lot of leap frogging. Trials for basic income like you allude to have begun. What is important however is how we view it. In my view it is not a new economic model. It's simply welfare reform. 

 

[SillyBilly]

I think we are on the same page. I am not saying corporatism has nothing to do with capitalism. That is still the economic model in which corporatism will have to exist in, no matter how rampant it becomes. 

My faith rests in the fact that the vested interests, the so called status quo do not like change. The Oil barons are a dying breed. The new power man is the tech man. They are the ones who want to change the world and can. You can't control currencies or drill for oil. So you innovate. You come up with de-centralized solutions. Digital currencies and solar power. But more important is the fundamental nature of technology. It continually progresses. We have even got to the point in a global market that shares vast amounts of information and data, that has finished products ready for market but does not have a wide release because the product evolution is so fast. 

You touch on the car industry. Well they were slacking with electric vehicles and vehicle automation. So two companies emerged and entered the market. Tesla and Google. Now everyone is trying to follow their lead. It's projected that by 2020 60% of the value of a car will be in the software. 

Watch over the next few years as tech companies smash their way into new markets. Telecommunication, transportation, energy supply, digital currencies, healthcare, education. Expect to see a hell of a lot of leap frogging. Trials for basic income like you allude to have begun. What is important however is how we view it. In my view it is not a new economic model. It's simply welfare reform. 

 

Wonderful post, I hope it comes to pass. The flexible labour market only works if you have some security, hopefully it will come with welfare reform. Anyway, I am off to Sweden now for work then a piss up over the bank holiday weekend. Will check in next week to see if calm is restored or we're in apocalyptic mode.

[GboroRam]

Finally someone has explained it in layman's terms

http://www.thepoke.co.uk/2015/08/26/poke-guide-chinese-stock-market-crash-explained-bake-moments/

[SillyBilly]

Not really been tracking the news of late but it seems we're in a very nervous market right now and for that reason I am going nowhere near still. We had the bounce from the bottom and that is now in the process of being heavily sold into again (can't emphasis the point enough that there is no economic data at the moment that justifies a recovery in price). This market would be a trader's paradise as I can see lots of mini rallies followed by panic sell-offs in the next few weeks as people can't call the direction. From watching Bloomberg Markets tonight, Canada by ours and America's definition (2 quarters of consecutive contraction in GDP output) has just entered recession. They have the world's most bloated property market, partly funded by $100 dollar oil and its trickle wealth. Be interesting to see if that market holds up in recessionary conditions. I am going to focus my energies on the data coming out of Canada and Oz in the next few weeks and months as if commodities don't recover then these guys could be the trigger to spook the other Western markets.

I guess we can all watch the price of oil too, I notice a bounce up to around $45 a barrel in the last week, I'm interested to know if this can hold or go higher or whether we'll test new lows in the next month or two. New lows (sub $37) would be another major sign things are deteriorating. I can't see oil doing too much upwards unless interest rates rise personally but I have been wrong lots of time before! would have a guess at this stage that if Fed does not raise oil will go lower.

 

 

 

[Ramarena]

There's nothing indicating that the bottom has been reached yet, hang on to your hats. 

I was reading an interesting article last week saying that the great depression followed a similar pattern with the stock market volatility. Sounds like the middle of September could be very problematic if the 7 year cycle is correct. 

[SillyBilly]

There's nothing indicating that the bottom has been reached yet, hang on to your hats. 

I was reading an interesting article last week saying that the great depression followed a similar pattern with the stock market volatility. Sounds like the middle of September could be very problematic if the 7 year cycle is correct. 

VIX index spiking up again. And with September being the most turbulent month in markets, I am keeping a watch on that.

On cycles, Armstrong called 2015.75 a long while back I think and he is the most credible cycle economist in my view (ignoring his misdemeanors), I read his blog. 1st October is his date (FWIW an actual day is ridiculous to me). Jeff Berwick has been very vocal on the Shemitah of late. I don't really pay an awful lot of attention to cycles but when the fundamentals are deteriorating at the exactly the same time the cycle theorists predict a bust is coming it does make it more interesting, that is for sure. There are a lot of similar signs to the mid to the late 20's, apparently everything was going great then too.

The stock market capitalization to GDP was "only" 88% in 1929 in USA (went down to 26%). Not sure where we are at now but we were 120%+ in 2014. Not quite dot.com bubble territory but it may be that we are gearing up for a big fall at some point which brings us back into kilter with the historical average of 60%ish. Apparently its Buffet's favourite indicator which may explain why his cash position has become so large.

[Ramarena]

VIX index spiking up again. And with September being the most turbulent month in markets, I am keeping a watch on that.

On cycles, Armstrong called 2015.75 a long while back I think and he is the most credible cycle economist in my view (ignoring his misdemeanors), I read his blog. 1st October is his date (FWIW an actual day is ridiculous to me). Jeff Berwick has been very vocal on the Shemitah of late. I don't really pay an awful lot of attention to cycles but when the fundamentals are deteriorating at the exactly the same time the cycle theorists predict a bust is coming it does make it more interesting, that is for sure. There are a lot of similar signs to the mid to the late 20's, apparently everything was going great then too.

The stock market capitalization to GDP was "only" 88% in 1929 in USA (went down to 26%). Not sure where we are at now but we were 120%+ in 2014. Not quite dot.com bubble territory but it may be that we are gearing up for a big fall at some point which brings us back into kilter with the historical average of 60%ish. Apparently its Buffet's favourite indicator which may explain why his cash position has become so large.

Interesting stuff. You clearly have a good knowledge on this this area, it's good to read for someone with a passing interest in it like me. 

I've always considered the economic cycles theories a bit like conspiracy theories. But as you mention when you look at Armstrong, etc, some that are quite compelling when you look at the details. 

Two things are bothering me at the moment and no-one else is talking about them, and I haven't had chance to look into them. One is something I heard about banks deposits protection being reduced from £85k to £75k and the payment terms being changed so that a max of £50 per week can be paid out, meaning it would take decades to get back the full amount (if you had that much). Supposedly this was changed earlier this year, but not publicised, which is very worrying if we have a repeat of 2008.

Second is British banks exposure to emerging markets. Can't remember the figures off the top of my head, but our banks are the most exposed to EM's in the world by quite a distance. With EM's looking like their economies are going to struggle then there could be big problems ahead for our banks. That's before we get to any potential problems in our own debt overloaded economy. 

Sadly being a debt based economy we seem to keep getting the "business as usual, we have good economic growth" mantra to try and keep confidence high, however it's taken a while but finally some people are starting to wake up to the problems posed by China, etc and the fact that our economy has not really improved much, leaving us increasingly exposed to global financial problems. 

As I type this I see that Australia has just poor GDP figures on top of Canada's recession yesterday and this has yet to pan out. Oil is sinking again as well, very bad signs all round. 

[SillyBilly]

Interesting stuff. You clearly have a good knowledge on this this area, it's good to read for someone with a passing interest in it like me. 

I've always considered the economic cycles theories a bit like conspiracy theories. But as you mention when you look at Armstrong, etc, some that are quite compelling when you look at the details. 

Two things are bothering me at the moment and no-one else is talking about them, and I haven't had chance to look into them. One is something I heard about banks deposits protection being reduced from £85k to £75k and the payment terms being changed so that a max of £50 per week can be paid out, meaning it would take decades to get back the full amount (if you had that much). Supposedly this was changed earlier this year, but not publicised, which is very worrying if we have a repeat of 2008.

Second is British banks exposure to emerging markets. Can't remember the figures off the top of my head, but our banks are the most exposed to EM's in the world by quite a distance. With EM's looking like their economies are going to struggle then there could be big problems ahead for our banks. That's before we get to any potential problems in our own debt overloaded economy. 

Sadly being a debt based economy we seem to keep getting the "business as usual, we have good economic growth" mantra to try and keep confidence high, however it's taken a while but finally some people are starting to wake up to the problems posed by China, etc and the fact that our economy has not really improved much, leaving us increasingly exposed to global financial problems. 

As I type this I see that Australia has just poor GDP figures on top of Canada's recession yesterday and this has yet to pan out. Oil is sinking again as well, very bad signs all round. 

When it comes to cycles, I'd personally disregard all the expert advice and say you won't go too far wrong by taking a cautious approach in the 6-8 year region after the last bust. As Joe Kennedy said when the shoeshine boy starts giving stock tips (or your window cleaner tells you about his BTL pension etc.) you should know its time to look a little more conservatively about future returns. Greed dominates, people have short memories and all the excesses which caused the last bust are already starting a year or 2 into a recovery, sometimes much worst. Bubbles take a while to inflate and they get popped a few years later. When has it been any different really and we still act surprised? People draw nice graphs and skew the data (in my opinion) to fit into time intervals. They can't ever really account for certain future events, wars or political upheavals nor sentiment which are major drivers of crashes.

£75k is roughly 100k euros and that is what the applicable European directive dictates. £85k was the fix of a weaker pound. We don't make the rules here anymore, though I'll be doing my bit to vote to change that shortly! If your worried about that sort of thing, choose your bank carefully. there are options out there. The Atom Bank is setting up shortly, a new bank (online only) which is to be built on banking not reckless gambling. I am waiting to set up an account with them to split my risk. I also bank with HSBC (top UK bank in terms of strength of balance sheet) and TSB (principally for the 5% interest rate).

No idea on British banks exposure to EM's other than to say I'd be surprised if we weren't the "world leader". Shades of Dubai 2009, skyscrapers in the sand all over again no doubt. Be interesting to see the figures nonetheless.

The most concerning thing for me (from a banking perspective) is off-balance sheet derivatives which seem to have snow-balled to anywhere from 1.4-2.5 quadrillion dollars (take your guess).

On Australia, I just read the BBC's news article on the "unexpected" slowdown, what was unexpected exactly, I was hemorrhaging money in commodities over a year ago so it follows a commodity powerhouse like Australia would not be surpassing expectation! And it was obvious then if commodities are tanking then China isn't buying as much so China is clearly dramatically slowing down, always amazes me that we react to these events as if we've ignored every indicator in the run up to it.

Well, on our economy, we are running a 5%+ deficit still 7 years into a recovery having doubled our national debt in that time. We ought to remember when we're laughing at Europe's anemic growth that (principally because of Germany's recent fiscal discipline) European countries decided to reign in deficits (at the expense of growth). Not saying it has worked by the way either just highlighting the difference in strategy. Us being the powerhouse of Europe the last 2-3 years is because we were running a 6% fiscal deficit when the E.U was averaging 3%. Unfortunately we need better ideas than to pile a £100 billion a year onto our national debt to get 3% growth. Seems both ways don't work because when the debt load is too high, you can't borrow your way out of it and you can't cut your way out of it. Those are the choices presented to the electorate when everyone else knows that inflation is the only way out one way or another. Pity they can't deliver that either.

 

 

[Ramarena]

On the exposure from EM's, UK banks lead the way in dollar terms with $895 billion. However as a percentage of GDP Spain surpass us, which was a bit of a surprise.  

http://www.bloombergview.com/articles/2015-08-24/spain-u-k-taiwan-stand-to-lose-in-emerging-markets

[Stive Pesley]

 choose your bank carefully. there are options out there. The Atom Bank is setting up shortly, a new bank (online only) which is to be built on banking not reckless gambling. I am waiting to set up an account with them to split my risk. I also bank with HSBC (top UK bank in terms of strength of balance sheet) and TSB (principally for the 5% interest rate).

 

 

I bank with a Building Society as I was always told they were much safer than banks, so I was surprised you didn't mention a BS there. Thoughts? Have I been living a lie?

[SillyBilly]

I bank with a Building Society as I was always told they were much safer than banks, so I was surprised you didn't mention a BS there. Thoughts? Have I been living a lie?

No, you're right, I am lazy with that sort of thing I must admit, I have banked with HSBC as they had my student account then mortgage. I don't tend to worry too much about it in honesty, there comes a point where you have to be pragmatic, if it did ever come down to confiscation of deposits worrying about a haircut when you've no job, no pension and your house is about to be repossessed would be the least of your worries I'd say. Not to say it couldn't happen but you wouldn't sleep at night sometimes if you took everything to its worse conclusion. And I appreciate this has become a bit of a doomsayer thread but I'm sure we can keep it going and exchange our thoughts on more positive opportunities as and when they arise! There are times when I'm a little more optimistic than of late!