| Banks and Global recession. 23:00 - Feb 10 with 8134 views | Brightonhoop |
Looking at it all there's a huge wobble going on, Barclays have dropped nearly 50 pence a share in recent weeks, Lloyds well under 60p a share again, Osborne has sacked Governments sale of their remaining stake due in March/April. Credit Suise publicly claiming not to be in trouble
Are we back on the brink? |  | | |  |
| Banks and Global recession. on 11:00 - Feb 11 with 1970 views | pomanjou |
| Banks and Global recession. on 07:49 - Feb 11 by danehoop |
Funny you should say that. I sold about a quarter of my portfolio when stock market was above 6000 as I couldn't see how the economic picture was matching share price growth. Been dipping my toe back in again now the level has dropped below 5700, but still being cautious to avoid catching a falling knife. Reckon there is quite a bit of volatility due this year as reality bites. But certainly feels like the time to look at investing monthly in some sectors if you have a 5 year plus time horizon.
Personally avoiding property as that looks bubble territory. Trying to pick a few select areas where the market has probably overreacted, so bit of technology investment trusts and few emerging markets funds. On UK looking at few small and mid cap funds, but using Fundsmith, Lindsell Train and Invesco Perpetual Income funds as core holdings to build around, along with a couple of global investment trusts like Scottish Mortgage and Witan.
As for financial sector, agree that banks don't look great options in the UK at the moment, though lloyds could be worth a punt given its returning to dividend territory and seems to have largely cleaned out its mess. Probably looking at insurance companies as being a better shot as they will be brought down by general sentiment, but are by and large profitable. |
Interesting view and we all have different ones.
Crashes usually end after a frenzy of buying. There has been no frenzy.
I too have been dipping back in today. Banks, particularly Lloyds, Oil, particularly Shell.
Also had a dabble in RSA today.
I manage my own portfolio and have 40% in housebuilders, Barratt, T Wimpey, Persimmon, Bellway and Crest N. All are showing more than 100% gains plus dividends received.
Couple of small caps I have and like are GVC holdings (betting) and Redd (back up up insurance services). Both off their peaks of course and time for me to top up.
Down 5.3% on paper this year so far after being up 22% capital and dividends last year.
imo not a time to panic and the answer to the opening post is NO.
[Post edited 11 Feb 2016 11:04]
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| Banks and Global recession. on 11:02 - Feb 11 with 1964 views | Mytch_QPR |
| Banks and Global recession. on 10:48 - Feb 11 by robith |
Central banks' obsession with interest rates over ever other economic lever has been a big cause in choking wages and thus reducing overall demand.
I do agree on London property though. It is a complete bubble (and people in the know have told me that Chinese investors are dumping their London investments as fast as they can) but paradoxically supply has been choked so hard over the last 40 years that I can't really see them crashing until the whole caboodle goes |
Yep - shortage of supply has been a big issue. A massive number of transactions have been buy-to-lets - so if the sales market drops more people will (theoretically) look to let.
It would need some sort of catastrophic crash or far harsher taxation of landlords to bring more properties back to the market - and oversupply would be the trigger for falling house prices.
Strangely, if Swiss and German banks falter it could even push more investors towards the UK property market in the shorter term - I'm not saying that's a good thing, and it may expand the bubble further before the crash finally happens. Ultimately, we all need somewhere to live, but the prices in London are eye-wateringly high and I really feel for people trying to buy (or paying ridiculous rents) in the Capital - and that's coming from an estate agent! |  |
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| Banks and Global recession. on 11:24 - Feb 11 with 1922 views | THEBUSH |
| Banks and Global recession. on 10:27 - Feb 11 by TheBlob |
They're only doing what their masters are prompting.
62 individuals own 50% of global wealth. |
Exactly this and it ain't gonna change anytime soon, so where/what the 'Illuminati' are leading us into, I've absolutely no idea ? |  | | |
| Banks and Global recession. on 11:27 - Feb 11 with 1910 views | paulparker |
| Banks and Global recession. on 11:24 - Feb 11 by THEBUSH |
Exactly this and it ain't gonna change anytime soon, so where/what the 'Illuminati' are leading us into, I've absolutely no idea ? |
World War 3 |  |
| And Bowles is onside, Swinburne has come rushing out of his goal , what can Bowles do here , onto the left foot no, on to the right foot
That’s there that’s two, and that’s Bowles
Brian Moore
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| Banks and Global recession. on 11:29 - Feb 11 with 1906 views | stevec |
| Banks and Global recession. on 11:02 - Feb 11 by Mytch_QPR |
Yep - shortage of supply has been a big issue. A massive number of transactions have been buy-to-lets - so if the sales market drops more people will (theoretically) look to let.
It would need some sort of catastrophic crash or far harsher taxation of landlords to bring more properties back to the market - and oversupply would be the trigger for falling house prices.
Strangely, if Swiss and German banks falter it could even push more investors towards the UK property market in the shorter term - I'm not saying that's a good thing, and it may expand the bubble further before the crash finally happens. Ultimately, we all need somewhere to live, but the prices in London are eye-wateringly high and I really feel for people trying to buy (or paying ridiculous rents) in the Capital - and that's coming from an estate agent! |
There is an answer to the housing problem. Whack a 10% annual tax on the property value of ALL 2nd homes and that includes buy to let.
No one needs a 2nd home, that way these leeches would be forced out of the housing market, creating a glut of available homes and crashing house prices across the board.
1st time buyers could then afford a place of their own, existing owners with low mortgages or no mortgage would be living in a property worth say half its original value (think about it, does it really matter what the damn thing is worth), owners with mortgages that effectively find themselves in negative equity would be the problem. It's at that point that the Government set aside the huge short term benefit of their 10% tax on 2nd homes and use that money to cover any negative equity at the point of sale for such house owners. Yes, it would mean those house owners have no equity in their sale but they would be able to buy a place, even the same place at possibly half the original price. Say your home was worth £500k and you had a £400k mortgage, if you sold the home for £250k, the government pick up the 150k negative equity, you start from scratch and buy the same type of place for £250k, thereby reducing your overall mortgage payments. The crux if it, we've got to stop preening about the value of our houses and start thinking about having higher disposable income.
In case you are worried about the banks taking a hit, don't. The government printed over 500 billion for them 7 years back, I'm sure they'll find a way to do it again. |  | | |
| Banks and Global recession. on 11:30 - Feb 11 with 1902 views | Brightonhoop |
| Banks and Global recession. on 11:00 - Feb 11 by pomanjou |
Interesting view and we all have different ones.
Crashes usually end after a frenzy of buying. There has been no frenzy.
I too have been dipping back in today. Banks, particularly Lloyds, Oil, particularly Shell.
Also had a dabble in RSA today.
I manage my own portfolio and have 40% in housebuilders, Barratt, T Wimpey, Persimmon, Bellway and Crest N. All are showing more than 100% gains plus dividends received.
Couple of small caps I have and like are GVC holdings (betting) and Redd (back up up insurance services). Both off their peaks of course and time for me to top up.
Down 5.3% on paper this year so far after being up 22% capital and dividends last year.
imo not a time to panic and the answer to the opening post is NO.
[Post edited 11 Feb 2016 11:04]
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Interesting, yes we all have differing views, but Barrat Homes? Interesting choice.
It's never a good sign when Banks like Credit Suisse are publicly declaring they are in fine fettle not as a boast but to shore up share price. What do you think is causing the bank wobble? Barclays down over 6% today alone. Not wanting to catch a falling knife obviously, I would only go in for the long term, 5 years minimum, god willing 10 years. But even those projections dont look positive.
Buying oil now? You've got bigger b4lls than me.The 30 years projections look very poor even at 10 years. | | | |
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| Banks and Global recession. on 11:45 - Feb 11 with 1853 views | Mytch_QPR |
| Banks and Global recession. on 11:29 - Feb 11 by stevec |
There is an answer to the housing problem. Whack a 10% annual tax on the property value of ALL 2nd homes and that includes buy to let.
No one needs a 2nd home, that way these leeches would be forced out of the housing market, creating a glut of available homes and crashing house prices across the board.
1st time buyers could then afford a place of their own, existing owners with low mortgages or no mortgage would be living in a property worth say half its original value (think about it, does it really matter what the damn thing is worth), owners with mortgages that effectively find themselves in negative equity would be the problem. It's at that point that the Government set aside the huge short term benefit of their 10% tax on 2nd homes and use that money to cover any negative equity at the point of sale for such house owners. Yes, it would mean those house owners have no equity in their sale but they would be able to buy a place, even the same place at possibly half the original price. Say your home was worth £500k and you had a £400k mortgage, if you sold the home for £250k, the government pick up the 150k negative equity, you start from scratch and buy the same type of place for £250k, thereby reducing your overall mortgage payments. The crux if it, we've got to stop preening about the value of our houses and start thinking about having higher disposable income.
In case you are worried about the banks taking a hit, don't. The government printed over 500 billion for them 7 years back, I'm sure they'll find a way to do it again. |
A lot of BTL investors are people who make a modest return by owning 1-2 flats - but they have mortgages on them. Put simply, that 10% tax would wipe out those small investors - many of whom are only going down the landlord route as they get zippo return for their savings in the bank and don't like the risk of buying shares.
So, I'm not saying you're wrong, but just pointing this out. What could also have kept a lid on house prices would be stricter lending controls - limiting income multiples and the number of years a mortgage can run for, but I suppose many would argue that would be handing too much control to the government and not a 'free market' situation. | |
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| Banks and Global recession. on 11:53 - Feb 11 with 1838 views | TheBlob |
| Banks and Global recession. on 11:44 - Feb 11 by Brightonhoop |
Chinese seem to be sitting on most of it. And it's still pretty volatile, always has been. I read one Broker late December just saying, sell everything, cash is king. Kin ell. He might have been right lol |
There are some brave souls out there mate,hope to god they're right.
There are so many indications.It's like standing on the beach wondering where the water has all gone and why there are fish flopping about and crabs wandering mournfully around waving their eye stalks at you.Then you find yourself trying to outrun a wall of water in your flip flops.....
It can't go on - Deutsche Bank are holding $85 trillion of derivatives for starters,they could be the first domino to fall.Of course you could always print more money,do a bit more quantitive easing and hold your arse for a couple of years and hope nobody notices the rampant inflation..... |  |
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| Banks and Global recession. on 11:56 - Feb 11 with 1826 views | Mytch_QPR |
| Banks and Global recession. on 11:53 - Feb 11 by TheBlob |
There are some brave souls out there mate,hope to god they're right.
There are so many indications.It's like standing on the beach wondering where the water has all gone and why there are fish flopping about and crabs wandering mournfully around waving their eye stalks at you.Then you find yourself trying to outrun a wall of water in your flip flops.....
It can't go on - Deutsche Bank are holding $85 trillion of derivatives for starters,they could be the first domino to fall.Of course you could always print more money,do a bit more quantitive easing and hold your arse for a couple of years and hope nobody notices the rampant inflation..... |
Acid test, Blob - ask Deutsche Bank if they'll lend you a tenner! | |
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| Banks and Global recession. on 11:58 - Feb 11 with 1823 views | stevec |
| Banks and Global recession. on 11:45 - Feb 11 by Mytch_QPR |
A lot of BTL investors are people who make a modest return by owning 1-2 flats - but they have mortgages on them. Put simply, that 10% tax would wipe out those small investors - many of whom are only going down the landlord route as they get zippo return for their savings in the bank and don't like the risk of buying shares.
So, I'm not saying you're wrong, but just pointing this out. What could also have kept a lid on house prices would be stricter lending controls - limiting income multiples and the number of years a mortgage can run for, but I suppose many would argue that would be handing too much control to the government and not a 'free market' situation. |
Regards the BTL investors I take your point, appreciate most don't make a killing, but collectively they are a big part of the problem, about 5.5 million buy to let houses and flats of a problem!
On your second point, people are getting zippo on their bank savings for the simple reason house prices are so high that no one could afford a mortgage unless the interest rates were set so low. That is why something drastic needs to be done.
Agree totally about lending controls, it was like that when I first bought a flat in the early 80's. Sadly, financial institutions and, I have to say, your lot either actively encouraged or at best went along with it. No offence meant personally, not to another R. | | | |
| Banks and Global recession. on 11:59 - Feb 11 with 1819 views | Brightonhoop |
| Banks and Global recession. on 11:56 - Feb 11 by Mytch_QPR |
Acid test, Blob - ask Deutsche Bank if they'll lend you a tenner! |
That might be enough to start a full run on the banks lol.  | | | |
| Banks and Global recession. on 12:02 - Feb 11 with 1813 views | TheBlob |
| Banks and Global recession. on 11:56 - Feb 11 by Mytch_QPR |
Acid test, Blob - ask Deutsche Bank if they'll lend you a tenner! |
I tried.They wouldn't give me the wind off their arses to cool my soup.  | |
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| Banks and Global recession. on 12:02 - Feb 11 with 1812 views | pomanjou |
| Banks and Global recession. on 11:30 - Feb 11 by Brightonhoop |
Interesting, yes we all have differing views, but Barrat Homes? Interesting choice.
It's never a good sign when Banks like Credit Suisse are publicly declaring they are in fine fettle not as a boast but to shore up share price. What do you think is causing the bank wobble? Barclays down over 6% today alone. Not wanting to catch a falling knife obviously, I would only go in for the long term, 5 years minimum, god willing 10 years. But even those projections dont look positive.
Buying oil now? You've got bigger b4lls than me.The 30 years projections look very poor even at 10 years. |
I tend to be a contrarian....
C Suisse new CEO is trying to take them in a new direction away from the riskier side and more to the steady 'Wealth Management'. Just had a poor set of figures due kitchen sinking by this new CEO. Exposure to China. Its dragged the sector lower and created opportunity for the brave.
Five years would be long term for me (age and health). Oil will be significantly higher in percentage terms by the end of the year imho. Also Shell is a multi energy company paying a whacking great dividend. | |
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| Banks and Global recession. on 12:04 - Feb 11 with 1529 views | Mytch_QPR |
| Banks and Global recession. on 11:58 - Feb 11 by stevec |
Regards the BTL investors I take your point, appreciate most don't make a killing, but collectively they are a big part of the problem, about 5.5 million buy to let houses and flats of a problem!
On your second point, people are getting zippo on their bank savings for the simple reason house prices are so high that no one could afford a mortgage unless the interest rates were set so low. That is why something drastic needs to be done.
Agree totally about lending controls, it was like that when I first bought a flat in the early 80's. Sadly, financial institutions and, I have to say, your lot either actively encouraged or at best went along with it. No offence meant personally, not to another R. |
No worries, Steve - I'm a kind of left-wing socialist type of estate agent (if such a thing can exist).
The shortage of supply is actually a massive headache - I would rather be selling more homes at lower prices than have a situation where 15 buyers offer on one property (extreme case - but this did happen with one property in January). | |
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| Banks and Global recession. on 12:15 - Feb 11 with 1492 views | Doughnut |
Haven't a clue about macro-economics and it doesn't interest me until it effects me...a la most of the population. But one thing I had drummed into my thick skull way back in the mists of time when I was at school, was that Printing money is a no-no!! History lessons in particular. From what I hear, 'fiscal easing' (See printing money) is all the rage nowadays. Doesn't fill me with optimism! |  | | |
| Banks and Global recession. on 12:24 - Feb 11 with 1478 views | TheBlob |
Like Cyprus,when the big crash comes the banks(who will be skint) will come after accounts of more than £100,000 to pay back derivatives. | |
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| Banks and Global recession. on 13:30 - Feb 11 with 1380 views | PlanetHonneywood |
Merely history repeating itself!
I sold up and out in December and will wait until we really hit rock bottom and buy back in again. Its how the man has got rich over the years, allow the economy to bloat and then cash-out watch it all tumble and buy it all again for half the price.
The Great Depression saw the highest number of millionaires created to that point in time, and despite the horrendous suffering of many who were not responsible for the crash, the man made millions and the poor paid for it. Remarkably similar to the current state of events.
The worries are that the central banks have nowhere to go with interests rates already lower than a snake's balls and China is seriously overheated and has been for sometime. I am lead to believe that there are millions of vacant properties which even in a country of that size, is a worry if its against borrowed money and not laundered!
Of course, if history does repeat and as someone said above, we often find the only way to quell the masses, refocus their attention and return them to full employment, is to have a war. Always works and what a shocking indictment of those who have, are and in all likelihood, will run our lives.
I reckon defence contractors will be worth watching, not that I'd buy any of them and maybe the blue chips might come down to more affordable prices.
Still, stuff Fulham on Saturday and we won't give a rat's backside... |  |
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| Banks and Global recession. on 13:32 - Feb 11 with 1376 views | CroydonCaptJack |
| Banks and Global recession. on 23:28 - Feb 10 by robith |
We never left the brink. All the systemic problems that caused the crash and every other economic problem for the last 30 odd yeras went unchanged. All we did was oversee the largest transfer of wealth (from the 99% to the 1%) in history in order that they could pay themselves their bonuses.
All the graphs were pointing up, but it was false growth driven by banking salaries recovering. Most people in the UK are worse off than before the crash be it through wages freezes, un or under employment, benefit cuts (which put money back into the economy and are as much a safety net for economic demand as peoples well being) and the erosion of job security which has severely stymied growth because their is no real demand in the economy. We continue to preside over a house of cards consisting of an overly financialised economy and house prices that artificially create the illusion of wealth by choking supply.
Except since the national debt has doubled since Osbourne became chancellor and he's already firesold most of the states assets, we won't have the liquidity to save the system again. |
I agree with a lot of that but it has been going on a long while befor Osbourne was Chancellor. |  | | |
| Banks and Global recession. on 13:51 - Feb 11 with 1353 views | 1BobbyHazell |
| Banks and Global recession. on 12:15 - Feb 11 by Doughnut |
Haven't a clue about macro-economics and it doesn't interest me until it effects me...a la most of the population. But one thing I had drummed into my thick skull way back in the mists of time when I was at school, was that Printing money is a no-no!! History lessons in particular. From what I hear, 'fiscal easing' (See printing money) is all the rage nowadays. Doesn't fill me with optimism! |
They don't need to print money anymore, they simply make numbers appear on a computer screen.
Every time the bank gives someone a loan, it's not taking that money from somewhere else and giving it to you, it is simply putting new numbers up on a computer screen and suddenly a new £10,000 exists. Money is created as debt, thus the world is in 'debt' to the institutions that get to create (print) money.
https://positivemoney.org/how-money-works/how-banks-create-money/
It's very simple but seems to have quite the Emperor's Clothes about it.
There is not even remotely enough 'real' money in the world to pay back the ever increasing (illusionary and deliberately created) debt. Subtle enslavement ensues. Observe the early signs within our society as services that benefit communities are dismantled in order to service the unservicable debt, moving us more towards poorer countries in terms of how our wealth is distributed and the value put on many (poorer) people's lives as their contribution to creating more profit for the super wealthy (see Chinese Apple factory workers) is greatly prioritised over the quality of their lives and the strength of their community. I might add, just to acknowledge the thoughts of my right wing chums, that ensuring lower wages by allowing mass immigration is part of the whole thing.
Crashes are inevitable, no illusion can last forever, but unless in the highly unlikely event that we stop squabbling and get ourselves together to take on our 'overlords' it will be a crash that sees the rich getting even richer, funny how they always mange that even in a 'crisis'.
http://www.theguardian.com/business/2015/apr
http://www.theguardian.com/society/2014/sep/15/how-super-rich-got-richer-10-shoc |  | | |
| Banks and Global recession. on 14:48 - Feb 11 with 1311 views | hovehoop |
| Banks and Global recession. on 10:07 - Feb 11 by Juzzie |
Would it be a good time to sell property (then rent) then buy again when the bottom has dropped out of the housing market? |
It depends on your assumptions about the extent of any collapse. Broadly, rather than a sudden collapse I would expect a slow down in capital growth, followed by perhaps a period of limited or no growth and then a possible reversal in values. Though the latter scenario is that which potentially puts people in negative equity. I've heard talk about the idea of a property collapse but no one seems able to say precisely why they feel this will happen. I work in construction and property and if you look at the London skyline you will see it's full of tower cranes. In fact, I gather there is so much construction right now there is a national shortage of tower cranes such that main contractors are having to allow buying them instead of renting them to get their buildings built! That said, I suppose we're seeing a bias towards residential construction right now. Lots of 50m2 boxes selling at £500k each - that sort of thing. 15,500 of those units are destined for Greenwich Peninsula, funded by Chinese money. That developer cannot afford to flood the sector with property - more likely they will drip feed the sector year on year for the foreseeable future. If you sell your property you will incur costs so doing and other costs when you choose to jump in again. To my mind it would take an extreme collapse in property values to warrant that choice. |  | | |
| Banks and Global recession. on 16:33 - Feb 11 with 1229 views | RamseyR |
| Banks and Global recession. on 10:21 - Feb 11 by danehoop |
Not saying it is trigger to sell property, but the current valuations look excessive as an investment with limited upside. There is an argument around commercial property and some specialist niches, but general residental property doesnt look a great investment. Remember to that anyone with a mortgage is already exposed heavily to residential property so additional invesment in that area makes less sense. |
Commercial property is still a good investment.
I own two commercial properties. We outgrew the smaller one within 12 months of purchase. I now rent it out and have a yield of approx 14%.
Sound great in practice, but it is only a relatively small investment, and not one that will make me rich, but in little under 7 years it will have paid for itself assuming 100% occupancy.
Even if it takes 10 years, I'm a happy bunny. Don't trust the banks and other financilal investments one bit. |  | | |
| Banks and Global recession. on 17:06 - Feb 11 with 1189 views | Phildo |
| Banks and Global recession. on 16:33 - Feb 11 by RamseyR |
Commercial property is still a good investment.
I own two commercial properties. We outgrew the smaller one within 12 months of purchase. I now rent it out and have a yield of approx 14%.
Sound great in practice, but it is only a relatively small investment, and not one that will make me rich, but in little under 7 years it will have paid for itself assuming 100% occupancy.
Even if it takes 10 years, I'm a happy bunny. Don't trust the banks and other financilal investments one bit. |
Because of recent changes in tax commercial property is going to be a lot more attractive particularly for overseas investors.
Lots of interesting opinions on this thread.You find yourself agreeing with posters taking opposite views. Banking and capitalism in general are the least worst system it seems to me but when you analyse them they are crazy.
There are certain lessons from history I think that tend to hold good.
1 the law of supply and demand. We do not build enough homes so the price goes up. Our planning system is a total disaster so we miss house building targets every year since the beginning of time. Hammering BTL will see rents go up a great deal.
2. A crash is always coming. It is just a question of when and who gets lucky with their predictions. Sages rarely predict two crashes in a row.
3 Printing money has never worked in the past. See pre-war Germany or Japan in more recent years for a case study.Why do governments think it will all be ok now?
4 People see their jobs threatened by technological change and globalization. All over the world they are turning to populist protectionist politicians ( Trump and his wall, Corbyn, various nutjobs in europe, Putin etc) and hoping they can turn back the tide. The rise of protectionism is often followed by a decline in world trade and eventually war.
5 If deutsche bank is going bust (i doubt it) and the Germans bail it out (they would) with euros we will not be needing that referendum as the southern europeans will do the job for us.
As a father of two teenage boys none of this makes me too happy. |  | | |
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