The Finance Thread

[Stive Pesley]

34 minutes ago, Shang said:

Reading that it reads like someone who wants to put people off P2P lending by saying that there isn't enough background checks so you could be at risk?

I think he's trying to keep lending with the banks to maintain their position.

I'd agree with that. The interesting bit comes at the end

"Christine Farnish, who chairs the P2PFA, said Turner’s views ignored the industry’s record and that default rates on loans were low at 2%-3%.

“We only lend to creditworthy consumers and established small and medium sized enterprises. Strict credit underwriting rules apply to all our members and this should not be confused with higher risk forms of crowdfunding or lending to sub-prime customers,” she said.

“All members of the P2PFA operate with high standards of transparency and business conduct. This includes publishing their full loan books on their websites and providing clear information on all fees and charges to both investors and borrowers. I would challenge anyone to find this level of transparency in any other part of the financial services market.”

As that pretty much contradicts what the former city regulator says. At the very least if if was getting into P2P I'd make sure that the one I signed up with had good reviews and was a member of P2PFA.

 

[Phoenix]

8 hours ago, Shang said:

Reading that it reads like someone who wants to put people off P2P lending by saying that there isn't enough background checks so you could be at risk?

I think he's trying to keep lending with the banks to maintain their position.

I agree with you.I currently have £2.26K lent out over 363 loans, of which 4 are late payments. Zopa also have a contingency fund, funded by taking a tiny percentage of each loan which is there to pay off any total write-offs, which are few and far between.

I suspect that the article is aimed at the new, small, opportunist funds with unfeasibly high returns, like 10%, which are springing up. There seems a lot of scare-mongering in that article.

[Inglorius]

1 hour ago, Phoenix said:

I agree with you.I currently have £2.26K lent out over 363 loans

Why don't you just stick it in a Lloyds Vantage account you can get 4% interest plus free cinema tickets every year 

[Chris Mills]

3 hours ago, Phoenix said:

I agree with you.I currently have £2.26K lent out over 363 loans, of which 4 are late payments. Zopa also have a contingency fund, funded by taking a tiny percentage of each loan which is there to pay off any total write-offs, which are few and far between.

I suspect that the article is aimed at the new, small, opportunist funds with unfeasibly high returns, like 10%, which are springing up. There seems a lot of scare-mongering in that article.

 

2 hours ago, Inglorius said:

Why don't you just stick it in a Lloyds Vantage account you can get 4% interest plus free cinema tickets every year 

Or Nationwide FlexDirect gives 5% interest for the first year on anything up to £2.5k. 

Perfect for that amount! 

[SillyBilly]

Another big day for the FTSE smashing through 6000. Think this will be short-lived. Earnings to be reported in March will crash us below 5500. Corporate earnings in March are going to be pretty poor by all accounts IMO.

[SillyBilly]

The game of killing cash is heating up now boys and girls!

Just this week:

- Europe is preparing to scrap 500 Euro note.

- Larry Summers has come out in USA and said the $100 bill should go.

- Germany to impose 5000 euro cash limit for a single transaction. Illegal to pay anything more in cash.

I mentioned previously back in the thread that Spain and France have imposed very low limits on cash transactions.

This is f**k all to do with crime and everything to do with propping up the banking system in a negative interest rate environment. You won't have the ability to put cash under the mattress when your bank charges negative interest rates (that would crash their Ponzi scheme) - you will allow your bank to take as much as they need to prop up their balance sheet at your expense. At the moment, cash undermines the banking system because it gives you power to withdraw your money. The money which they use to leverage and to keep them solvent.

[GeneralRam]

24 minutes ago, SillyBilly said:

The game of killing cash is heating up now boys and girls!

Just this week:

- Europe is preparing to scrap 500 Euro note.

- Larry Summers has come out in USA and said the $100 bill should go.

- Germany to impose 5000 euro cash limit for a single transaction. Illegal to pay anything more in cash.

I mentioned previously back in the thread that Spain and France have imposed very low limits on cash transactions.

This is f**k all to do with crime and everything to do with propping up the banking system in a negative interest rate environment. You won't have the ability to put cash under the mattress when your bank charges negative interest rates (that would crash their Ponzi scheme) - you will allow your bank to take as much as they need to prop up their balance sheet at your expense. At the moment, cash undermines the banking system because it gives you power to withdraw your money. The money which they use to leverage and to keep them solvent.

We won't see that in our lifetimes.

The USD will always be about (Too many countries use it) and you also have alternatives such as Bitcoin.

[SillyBilly]

1 hour ago, GeneralRam said:

We won't see that in our lifetimes.

The USD will always be about (Too many countries use it) and you also have alternatives such as Bitcoin.

I am not saying the USD won't be around, quoting me out of context there! The paper USD quite clearly has the biggest hurdle to get over as its a global reserve currency, held and exchanged by billions of people who don't have bank accounts. Bitcoin can be declared illegal within a stroke of a pen and it probably would do if it ever took off beyond its novelty status. A public sector worker paid in the currency of the land and exchanging his/her currency on the black market for Bitcoin to transact? Hardly likely to my mind, can't see any scenario where Bitcoin could achieve even the tiniest % of trade. Despite obstacles for USD, it doesn't mean larger paper denominations can't be withdrawn or limits imposed, that is the prevailing trend at the moment. Other currencies, particularly European ones, such as the Swedish Krona (and the Euro itself actually) have a much clearer pathway to cashlessness. I actually think Sweden will be cashless within 10 years. Denmark too. I don't take cash there anymore, just my credit card (I work there quite a bit), the 2 restaurants I go to in Gothenburg are both cashless. Buses, trams, cinema tickets - most things are cashless in my experience. Quite phenomenal really. I think cashless is more convenient FWIW but I recognise the dangers of not being able to withdraw cash. A danger that wouldn't exist if your deposit was actually held on deposit and therein lies the issue. So cash stands as the insurance policy against banks to my mind, the last bastion as well.

 

[uttoxram75]

2 hours ago, SillyBilly said:

The game of killing cash is heating up now boys and girls!

Just this week:

- Europe is preparing to scrap 500 Euro note.

- Larry Summers has come out in USA and said the $100 bill should go.

- Germany to impose 5000 euro cash limit for a single transaction. Illegal to pay anything more in cash.

I mentioned previously back in the thread that Spain and France have imposed very low limits on cash transactions.

This is f**k all to do with crime and everything to do with propping up the banking system in a negative interest rate environment. You won't have the ability to put cash under the mattress when your bank charges negative interest rates (that would crash their Ponzi scheme) - you will allow your bank to take as much as they need to prop up their balance sheet at your expense. At the moment, cash undermines the banking system because it gives you power to withdraw your money. The money which they use to leverage and to keep them solvent.

I read something about this a few years ago. I can't remember where but it was probably some non mainstream magazine or book (I used to read some ***** at times). Total control of the population will require a cashless society or some such was the message... remember thinking what a load of old tosh, but these things don't happen overnight do they?

Its a gradual undermining of democracy and less and less accountability and transparency that will eventually deliver us into some nightmarish corporate controlled world.

[SillyBilly]

33 minutes ago, uttoxram75 said:

I read something about this a few years ago. I can't remember where but it was probably some non mainstream magazine or book (I used to read some ***** at times). Total control of the population will require a cashless society or some such was the message... remember thinking what a load of old tosh, but these things don't happen overnight do they?

Its a gradual undermining of democracy and less and less accountability and transparency that will eventually deliver us into some nightmarish corporate controlled world.

Nothing happens overnight. This is being discussed by central bankers now (there are dozens of quotes from central bankers out there)... they know it can't be done over night. 10 years or so isn't a long time to phase out cash really is it? Its no time at all. You go about it in a gradual way, limiting the amounts you can spend in cash (being done now), getting rid of larger note denominations (in process), ensuring electronic payment is increasingly available (natural progression)... most people won't really notice these changes at the pace they take place. Just wake up one day and you won't use cash at all! So we have another Northern Rock again, what happens? Who "owns" your money? You technically are a creditor to the bank, NOT a depositor. That is how the financial system works. As a creditor (you in fact "lend" them reserves to leverage and issue loans against) you will wait in line with the rest of the creditors to see how much money you will get back (likely receive nothing without a government guarantee). So without cash, you lose your right to protest against that system. The right to withdraw your hard-earned money if you feel a bank (or the industry as a whole) threatens your financial security. The right to not be charged negative interests on your measly life savings because of someone else's greed. Being cashless would be fantastic if you could trust the banks!

Remembering that a central banks main role is to ensure the banking system remains intact. And then remember the biggest threat to a bank is a bank run (they only have a fraction of the money the "depositors" have on deposit). The solvency of the bank can only be maintained by capital controls in that case (a la Greece recently and Cyprus before). So getting rid of cash is the pretty much the strongest hand for protecting a bank. It also makes the "bail-in" legislation easy to implement, where depositors pay for the bank's losses easy to implement as depositors can't withdraw.

[Ramarena]

9 hours ago, SillyBilly said:

Nothing happens overnight. This is being discussed by central bankers now (there are dozens of quotes from central bankers out there)... they know it can't be done over night. 10 years or so isn't a long time to phase out cash really is it? Its no time at all. You go about it in a gradual way, limiting the amounts you can spend in cash (being done now), getting rid of larger note denominations (in process), ensuring electronic payment is increasingly available (natural progression)... most people won't really notice these changes at the pace they take place. Just wake up one day and you won't use cash at all! So we have another Northern Rock again, what happens? Who "owns" your money? You technically are a creditor to the bank, NOT a depositor. That is how the financial system works. As a creditor (you in fact "lend" them reserves to leverage and issue loans against) you will wait in line with the rest of the creditors to see how much money you will get back (likely receive nothing without a government guarantee). So without cash, you lose your right to protest against that system. The right to withdraw your hard-earned money if you feel a bank (or the industry as a whole) threatens your financial security. The right to not be charged negative interests on your measly life savings because of someone else's greed. Being cashless would be fantastic if you could trust the banks!

Remembering that a central banks main role is to ensure the banking system remains intact. And then remember the biggest threat to a bank is a bank run (they only have a fraction of the money the "depositors" have on deposit). The solvency of the bank can only be maintained by capital controls in that case (a la Greece recently and Cyprus before). So getting rid of cash is the pretty much the strongest hand for protecting a bank. It also makes the "bail-in" legislation easy to implement, where depositors pay for the bank's losses easy to implement as depositors can't withdraw.

But remember they are doing it to make things easier for you 

[Stive Pesley]

When you put it like that a cashless society is pretty terrifying. Money ceases to be a tangible thing and you are under complete control of the person/organisation/government issuing you with the "credit" you need to be able to function in society.

Essentially the banking sector has been effectively cashless ever since the first moment they had more money in play than they had physical currency in reserve - and look how that has turned out..

The one saving grace is that when it comes to technology, people are generally much more savvy than behemoth governments - so once there is a true cashless society, it won't take long before an unregulated black market cashless shadow economy starts up

[SillyBilly]

2 hours ago, StivePesley said:

When you put it like that a cashless society is pretty terrifying. Money ceases to be a tangible thing and you are under complete control of the person/organisation/government issuing you with the "credit" you need to be able to function in society.

Essentially the banking sector has been effectively cashless ever since the first moment they had more money in play than they had physical currency in reserve - and look how that has turned out..

The one saving grace is that when it comes to technology, people are generally much more savvy than behemoth governments - so once there is a true cashless society, it won't take long before an unregulated black market cashless shadow economy starts up

That is the role currencies like Bitcoin in my opinion could and would play. No government would validate Bitcoin as they wouldn't be able to create currency at will via a printing press, nor would banks via fractional reserve banking. So Bitcoin is against the interests of banks and government. People will always be paid in whatever currency is issued by the state. For tax reasons. What they decide to do with that currency is another matter. I genuinely believe if Bitcoin was credible enough it would be made illegal. Similar to when gold was confiscated during the Great Depression. Remember the war on cash is supposedly to stop criminality and the black market! All we'd do is, exactly as you suggest, move from cash being a vehicle to launder money/the proceeds of crime to a digital variant, like Bitcoin. The benefit to governments is transactions would have greater traceability in electronic form than cash I guess (more of a signature I guess). I am sure some elaborate structures could be developed to try and hide things.

[Shang]

I think the issue with Bitcoin is that it's not recognised enough in the general world (except for in tech hubs) and it's perceived as illegal due to it's use and how it's always seemed to be mentioned in the context of the dark web.

If people experience negative interests rates, I genuinely believe they'd seek out options like Bitcoin. Theoretically it's a great currency. There's a set amount that'd ever be mined in the world and can't be created. It's completely open source too so people can create their own alternatives.

Bitcoin democratises currency and government would not like that.

[scarboroughwa]

1 hour ago, SillyBilly said:

That is the role currencies like Bitcoin in my opinion could and would play. No government would validate Bitcoin as they wouldn't be able to create currency at will via a printing press, nor would banks via fractional reserve banking. So Bitcoin is against the interests of banks and government. People will always be paid in whatever currency is issued by the state. For tax reasons. What they decide to do with that currency is another matter. I genuinely believe if Bitcoin was credible enough it would be made illegal. Similar to when gold was confiscated during the Great Depression. Remember the war on cash is supposedly to stop criminality and the black market! All we'd do is, exactly as you suggest, move from cash being a vehicle to launder money/the proceeds of crime to a digital variant, like Bitcoin. The benefit to governments is transactions would have greater traceability in electronic form than cash I guess (more of a signature I guess). I am sure some elaborate structures could be developed to try and hide things.

When bitcoin is worth enough, it will get bought out with the extreme amount of money going to the Japanese guy who started it probably, and what ever leeches followed thereafter, The irony.

It's like that certain car, and Shell. What happened there again?

[Stive Pesley]

Thsi recent article suggests that Australia is on its way to cashless too

http://www.canberratimes.com.au/comment/no-small-change--moving-to-a-cashless-society-is-the-next-step-for-the-australian-dollar-20160215-gmv11x.html

Says Cash transactions have fallen from 70% to 45% in the space of the last 6 years

[Zag zig]

3 hours ago, SillyBilly said:

That is the role currencies like Bitcoin in my opinion could and would play. No government would validate Bitcoin as they wouldn't be able to create currency at will via a printing press, nor would banks via fractional reserve banking. So Bitcoin is against the interests of banks and government. People will always be paid in whatever currency is issued by the state. For tax reasons. What they decide to do with that currency is another matter. I genuinely believe if Bitcoin was credible enough it would be made illegal. Similar to when gold was confiscated during the Great Depression. Remember the war on cash is supposedly to stop criminality and the black market! All we'd do is, exactly as you suggest, move from cash being a vehicle to launder money/the proceeds of crime to a digital variant, like Bitcoin. The benefit to governments is transactions would have greater traceability in electronic form than cash I guess (more of a signature I guess). I am sure some elaborate structures could be developed to try and hide things.

Bitcoin will probably always operate in the shadow of currency to my mind, partly for the reasons you outline and partly because it will suit major players to back it alongside the dollar. Therefore it will be easily manipulated when it suits. The dollar is too powerful against Bitcoin I.m.h.o

[Stive Pesley]

I suspect if we went cashless you'd probably see a lot of local mutual credit arrangements springing up - especially once the true horror of a cashless society became apparent

[SillyBilly]

3 hours ago, Shang said:

I think the issue with Bitcoin is that it's not recognised enough in the general world (except for in tech hubs) and it's perceived as illegal due to it's use and how it's always seemed to be mentioned in the context of the dark web.

If people experience negative interests rates, I genuinely believe they'd seek out options like Bitcoin. Theoretically it's a great currency. There's a set amount that'd ever be mined in the world and can't be created. It's completely open source too so people can create their own alternatives.

Bitcoin democratises currency and government would not like that.

You are right in that many of the virtues of Bitcoin are precisely the reason governments and banks wouldn't adopt it.

However, is it a store of value (who knows, still very new) and who would really accept Bitcoin in a crisis for hard resources, like food or oil? I'd say the vast majority of people wouldn't accept it but its yet to be tested. I'd imagine in a hyper-inflating country, plain old barter, precious metals or the devalued cash would still be the preferred currency. In short, I think the more abstract the currency the less likely someone would see value in it when you're giving something up of utility in exchange for it. I remain unconvinced its an effective means of exchange (that would require both parties to fully understand the contract of exchange) or something which holds its value enough that you'd be comfortable to have your pension denominated in it.

[SillyBilly]

I'm on the beans for the rest of the year now, just added a load more First Majestic Silver Corp. I like this company a lot as a growth stock (big increases in ounces mined will filter through all the way into 2017 and beyond), not a dividend payer as yet but one which will outpace the likes of Pan American in silver price moves (up and down). Undervalued on a peer group basis. Need the bounce in gold now to $1300 and silver for the ride.