The Finance Thread

[Ramarena]

14 minutes ago, SillyBilly said:

Yes, heard there were some further hits to BTL, think he is clearly trying to make it less attractive without popping the bubble. Haven't had time to look at the details yet so other than the headlines not gone through it, sitting some exams tomorrow so really ought to be revising!

Interesting comments about the OBR, well worth looking into. I must admit I was quite surprised by the figures.

It looks like there is a lot of devil in the detail which is going to come out over the next few days. On the BTL it's a 3% stamp duty on second or more homes. 

Good luck with the exams. 

[Ramarena]

Something interesting that cropped up on the C4 news coverage this evening, the OBR have admitted that the U.K's GDP growth over the last couple of years, is in a large part down to immigration. 

I've tried to find more info on this, but there's isn't really anything on the web that mentions this at present. 

[SillyBilly]

33 minutes ago, Ramarena said:

Something interesting that cropped up on the C4 news coverage this evening, the OBR have admitted that the U.K's GDP growth over the last couple of years, is in a large part down to immigration. 

I've tried to find more info on this, but there's isn't really anything on the web that mentions this at present. 

Not too surprising? Net immigration of circa 350,000, you could perhaps expect immigrants to contribute almost 2% of growth of GDP as that is almost 2% pop. increase. No argument that immigration makes our economy bigger, the argument is whether it makes us individually richer. I'd say the evidence suggests it doesn't make us any poorer or richer as a weighted average (highly skilled and in need and low skilled and not in need).

[LesterRam]

The Tories have doubled the national debt to £2 trillion, increased NHS debt to £2 billion, ensured the poorest fifth have 8% and the top fifth 40% of national income, 653,000 16-24s are unemployed, the worst A&E crisis for 11 years, increased homelessness by over 26%

[SillyBilly]

50 minutes ago, LesterRam said:

The Tories have doubled the national debt to £2 trillion, increased NHS debt to £2 billion, ensured the poorest fifth have 8% and the top fifth 40% of national income, 653,000 16-24s are unemployed, the worst A&E crisis for 11 years, increased homelessness by over 26%

Where do you get the £2 trillion figure from chap? The rest seems plausible enough.

[LesterRam]

11 hours ago, SillyBilly said:

Where do you get the £2 trillion figure from chap? The rest seems plausible enough.

it was a FT article in the guardian, I think it was a stat from last year, i'll try and find it on my mobile when I can locate the thing lol

[Animal is a Ram]

Think it has only recently gone over the £1tn mark?

As for the rest, something something all in it together

[Ramarena]

2 hours ago, AnimalisaRam said:

Think it has only recently gone over the £1tn mark?

As for the rest, something something all in it together

It's currently at £1.5 trillion.

[LesterRam]

you see, its gone up £500bn since animal posted, this time tomorrow it will be £2.5tn

[Ramarena]

3 hours ago, LesterRam said:

you see, its gone up £500bn since animal posted, this time tomorrow it will be £2.5tn

Don't worry Osborne will find a trillion quid hidden behind the sofa soon. He and the OBR found £27 billion out of thin air yesterday, these guys are geniuses.

[ketteringram]

BoE should sack carney and replace him with Osborne. We'll all be rich I tell ya! 

[uttoxram75]

Read an article in the New Internationalist magazine today that says the growth in Gross Domestic Product per capita, has fallen in line with the drop in Trade Union membership in "high income" countries.

Sounds absolutely ridiculous but the facts show that annual GDP growth per capita is higher in decades where Union strength is highest.

Its not rocket science, its basic common sense, strong Unions mean higher pay rises, better sick pay, more money floating about in lower paid people's arse pockets that gets spent in the local economy, generating growth.

Lower union membership + anti-union laws + tax cuts for the rich + austerity for the poor = lower GDP growth.

Sources for the above were from the "World Bank GDP statistics"

 

I expect the Sun to run a front page campaign to encourage all their readers to join a Union and campaign against cuts to make this country great once again.

 

 

 

[GboroRam]

7 hours ago, uttoxram75 said:

Read an article in the New Internationalist magazine today that says the growth in Gross Domestic Product per capita, has fallen in line with the drop in Trade Union membership in "high income" countries.

Sounds absolutely ridiculous but the facts show that annual GDP growth per capita is higher in decades where Union strength is highest.

Its not rocket science, its basic common sense, strong Unions mean higher pay rises, better sick pay, more money floating about in lower paid people's arse pockets that gets spent in the local economy, generating growth.

Lower union membership + anti-union laws + tax cuts for the rich + austerity for the poor = lower GDP growth.

Sources for the above were from the "World Bank GDP statistics"

 

I expect the Sun to run a front page campaign to encourage all their readers to join a Union and campaign against cuts to make this country great once again.

 

 

 

Starting with their own staff being mandatory enrolled into their local NUJ chapel?

[Ramarena]

Ouch!!!!! GDP figures for Q3 remain at 0.5%, most interesting thing in these figures is our trade deficit which is at a record high in 18 years. 

If things deteriorate and the gap widens further next year, (it's unlikely) but could we see a run on the pound?

[SillyBilly]

On 27/11/2015, 00:01:07, uttoxram75 said:

Read an article in the New Internationalist magazine today that says the growth in Gross Domestic Product per capita, has fallen in line with the drop in Trade Union membership in "high income" countries.

Sounds absolutely ridiculous but the facts show that annual GDP growth per capita is higher in decades where Union strength is highest.

Its not rocket science, its basic common sense, strong Unions mean higher pay rises, better sick pay, more money floating about in lower paid people's arse pockets that gets spent in the local economy, generating growth.

Lower union membership + anti-union laws + tax cuts for the rich + austerity for the poor = lower GDP growth.

Sources for the above were from the "World Bank GDP statistics"

 

I expect the Sun to run a front page campaign to encourage all their readers to join a Union and campaign against cuts to make this country great once again.

 

 

 

I've posted the below graph before. Its for the U.S but its the identical story in the U.K, just can't find ii in graphical form.

Basically wages adjusted for inflation have gone nowhere since the late 1970's. That graph is a damning indictment of how the gains of modern technology have gone straight to the top and almost nothing to the "workers". And note, household income is 2 earners for the most part now and not 1 earner as it may have traditionally been in the 70s (so you need to read the graph in that context - it then obviously becomes much worse, 2 earners to tread the same water as 1). People only feel wealthier because their asset prices, be it their pensions or houses in the loosely regulated economy have exploded upwards (speculation economy). Basically having assets since the 1970's has been about 4-5 times (averaged over asset classes) more financially rewarding than working for a wage. That is not the sign of a healthy economy and young people who have no assets but their labour can rightly feel aggrieved (they've missed the boat). Labour doesn't pay enough now to join the party and the asset gains simply aren't sustainable. That situation will come to an end as you can only stretch asset prices so far before a new demographic cannot prop up the gains of those before them. Buyers now already can't meet seller expectation, the government won't allow this ponzi market to fall without a fight though so they do things like Help to Buy. HTB is therefore confirmation the market has ran out of legs, people simply can't support it at the bottom. And in normal markets if buyers and sellers can't meet at a price level, the price crashes and a new price will be found. Hence why I am incredibly pessimistic about what the government is doing in everything from property to bonds, they are propping up both markets which have proven they can no longer function without intervention. Watch out for when this reverses.

Even buying the FTSE 100 in 1984 has been a 650% return..Not bad for a 20 year investment..

I do think the destruction of the TU's has sped this imbalance up. TU's have a role to play in making sure that advances in productivity are shared between the workers and management, not just the shareholders and management.

 

[Ramarena]

Thought I'd revisit this thread as this week has seen some interesting movement in the price oil as it crashes through the $40 barrier (didn't expect it to hit this low) and commodities are getting brutally hammered, iron ore at it's lowest point in a decade. Look's like China's got the problems many suspected. 

Things are not looking good out there again after a period of calm. It will be interesting to see where oil goes over the next few months as there is massive oversupply (OPEC called business as usual in their bid to destroy the frackers last week) and not enough/dwindling demand.

Next year is going to be fascinating and we haven't even got to the Fed's rate decision next week, if they flicked the switch (still feel it's unlikely) it could have massive implications.  

Could Schiff be on the money again?

[Zag zig]

2 hours ago, Ramarena said:

Thought I'd revisit this thread as this week has seen some interesting movement in the price oil as it crashes through the $40 barrier (didn't expect it to hit this low) and commodities are getting brutally hammered, iron ore at it's lowest point in a decade. Look's like China's got the problems many suspected. 

Things are not looking good out there again after a period of calm. It will be interesting to see where oil goes over the next few months as there is massive oversupply (OPEC called business as usual in their bid to destroy the frackers last week) and not enough/dwindling demand.

Next year is going to be fascinating and we haven't even got to the Fed's rate decision next week, if they flicked the switch (still feel it's unlikely) it could have massive implications.  

Could Schiff be on the money again?

Wouldn't bet on Oil going to $30 right now, but a heck of a lot of Oilers and service industries will feel real pain; some going under. Stock valuations are starting to get real beat up, but can still get worse. Not yet capitulation time, that would force a real change in direction.

The house of Saud really eating into reserves to keep playing this game I.m.o

[SillyBilly]

2 hours ago, Ramarena said:

Thought I'd revisit this thread as this week has seen some interesting movement in the price oil as it crashes through the $40 barrier (didn't expect it to hit this low) and commodities are getting brutally hammered, iron ore at it's lowest point in a decade. Look's like China's got the problems many suspected. 

Things are not looking good out there again after a period of calm. It will be interesting to see where oil goes over the next few months as there is massive oversupply (OPEC called business as usual in their bid to destroy the frackers last week) and not enough/dwindling demand.

Next year is going to be fascinating and we haven't even got to the Fed's rate decision next week, if they flicked the switch (still feel it's unlikely) it could have massive implications.  

Could Schiff be on the money again?

The other week said it all, Draghi "disappointed" the market by not announcing as massive a stimulus package as many thought he would, in a normal market that might be a demonstration of strength in the economy...result? The markets tank as people fear the free money era might be slowing down. It is crazy at the moment. Euro strengthened which I can't see lasting long.

On oil, fairly sure a load more Iranian oil is to hit the market with a step-phase of repealing the sanctions. Up to a million extra barrels/day to global supply, how much of that number is already on the market, I don't know.

I am not sure who is supposed to be driving global growth now, it was the growth in the EMs and China which stopped the roof from falling in from 08 but most of them are so heavily commodity based they're now struggling with their currencies in freefall. And of course they have gone on an unprecedented debt binge with trillions in debt borrowed in USD which is about to get a little more expensive.

 

 

[Ramarena]

35 minutes ago, SillyBilly said:

The other week said it all, Draghi "disappointed" the market by not announcing as massive a stimulus package as many thought he would, in a normal market that might be a demonstration of strength in the economy...result? The markets tank as people fear the free money era might be slowing down. It is crazy at the moment. Euro strengthened which I can't see lasting long.

On oil, fairly sure a load more Iranian oil is to hit the market with a step-phase of repealing the sanctions. Up to a million extra barrels/day to global supply, how much of that number is already on the market, I don't know.

I am not sure who is supposed to be driving global growth now, it was the growth in the EMs and China which stopped the roof from falling in from 08 but most of them are so heavily commodity based they're now struggling with their currencies in freefall. And of course they have gone on an unprecedented debt binge with trillions in debt borrowed in USD which is about to get a little more expensive.

 

 

Yes I forgot about Iran, which leaves the door widen open to even lower prices.  

Just before posting this I was reading an comment from a Russian official discussing Russia's domestic spending policy reflecting the price of oil e.g: the lower the oil price the less Russia spends on welfare, infrastructure, etc. He mentioned that they have a scenario for $40 a barrel and they have just looked into the scenario for $20 a barrel. 

Interesting that people high up in their government are now contemplating $20 a barrel as realistic scenario and planning for it. This would have been unthinkable a year or two ago. 

In terms of growth, who knows? Loads of countries are drowning in debt and the likes of China, Saudi, et al, are literally burning through their reserves. There's certainly no obvious candidate barring India (who won't have the desired impact) to take on the China mantle. 

[Zag zig]

2 hours ago, SillyBilly said:

On oil, fairly sure a load more Iranian oil is to hit the market with a step-phase of repealing the sanctions. Up to a million extra barrels/day to global supply, how much of that number is already on the market, I don't know.

Forgive my plagiarism but I am reminded of this article a few months back I noted, which offers an answer. http://www.icis.com/...ied-oil-market/

'The oil market was the first to feel the impact of the Great Unwinding of policymaker stimulus nearly a year ago.  It had completely lost its key role of price discovery due to the liquidity being supplied by the central banks.  This had overwhelmed the fundamentals of supply/demand.  And we are still living with the consequences today.

Many traders have only ever known a world where central banks aim to dominate the financial markets – and so they jumped on the recent technical rally in the belief that somehow markets would repeat the 2009 rally.

What it is about the world “massively oversupplied” that these traders find so difficult to understand, you might ask?

This, after all, was the phrase used by the International Energy Agency (IEA) last Friday to describe the current state of oil markets.  And yet prices actually ended higher on the day, even though the IEA’s monthly report was crystal clear on the outlook:

“It remains that the oil market was massively oversupplied in 2Q15, and remains so today. It is equally clear that the market’s ability to absorb that oversupply is unlikely to last. Onshore storage space is limited. So is the tanker fleet. New refineries do not get built every day. Something has to give.”

Now a further test of oil markets is underway, with today’s historic agreement between Iran and the major global powers on the nuclear issue.  As The Guardian reports:

“In terms of Iran’s ability to sell crude, I think that is where we will see the most immediate loosening up of restrictions. Iran has between 40 and 50 million barrels of crude at sea. Expect this crude to come to the market in short order. They will start competing fiercely to regain market share that they have lost to their Persian Gulf neighbors. Unfortunately for Iran the timing couldn’t be worse. Oil prices are depressed and already there is a glut of oil on the market. Adding Iran’s crude will put further downward pressure on oil prices.”

The Guardian thus confirms that Iran already has around 40mb of oil in floating storage, as I noted 2 weeks ago.  It will not be long before this oil starts finding its way to market, even if sanctions are still officially in place.  And this volume will be appearing as we move into the seasonally weaker Q3 period for demand.  Plus the IEA forecasts that Iran could increase production by up to 800kb/day within a few months of sanctions being lifted.

I have forecast for some time that oil prices would return to their historical $30/bbl or lower level, I see no reason to change my mind today.'