Global financial system implosion begins

[CH1]

Bloody hell. National Savings just put their rate up from 0.5% to 1.2% Something must be up

Income Bonds

Get more information on how to save securely and have your interest paid to you as a monthly income. You can manage your account online, by phone and by post.

www.nsandi.com

 

[kabbes]

What’s up is that the base rate has gone up from 0.1% to 1.25% in less than a year. By contrast, their increase in the saving rate from 0.5% to 1.2% looks pretty ungenerous

 

[Thesaint]

That's a really good point. The markets seem to be demanding a response, but the UK is stuck between a rock and a hard place in terms of if we raise interest rates we will trigger a recession, but if we don't then inflation will spiral further out of control.

The BoE is somewhere between the Fed and ECB in terms of hawkishness.

Our inflation is the worst out of all though because we have both labour supply problems (thanks Brexit) and the war in Ukraine to contend with

I suspect the real worry is an interest rate hike will risk house price falls which in itself I'd good thing really, but the knock on effect to the mortgage lenders then into the political system. Gov interest on paying for the first banking crash and lockdowns will go up i presume meaning higher taxes or spending cuts.

I think we are in a rock and hard place so will pick inflation whereby even when/if it returns to near zero everything is still 10% more expensive than last year but not as a result of something attributed to a government decision - and Putin gets the blame somehow.

 

[CH1]

I suspect the real worry is an interest rate hike will risk house price falls which in itself I'd good thing really, but the knock on effect to the mortgage lenders then into the political system. Gov interest on paying for the first banking crash and lockdowns will go up i presume meaning higher taxes or spending cuts.

I think we are in a rock and hard place so will pick inflation whereby even when/if it returns to near zero everything is still 10% more expensive than last year but not as a result of something attributed to a government decision - and Putin gets the blame somehow.

From what I remember negative equity was something the banks and home buyers found work arounds to on the two times it has occurred in the UK (late 1980s and mid 1990s)

There is a learned paper from 1995 by Danny Dorling and James Cornford here https://www.dannydorling.org/wp-content/files/dannydorling_publication_id1654.pdf

The property building and selling firms will be hit most, Poor Lendlease and Delancey - they will have to pay accountants to cook the books, as well as keep their profits off-shore!!

 

[CH1]

More generally:
Wealth preservation fund Ruffer (RICA) investment company has slashed its holdings in equities, or shares, to 25% down from 40% a year ago, the lowest level in 19 years as manager Duncan MacInnes warns investors the bear market is ‘mid-grizzle’ and stocks aren’t a buying opportunity yet.

 

[Thesaint]

From what I remember negative equity was something the banks and home buyers found work arounds to on the two times it has occurred in the UK (late 1980s and mid 1990s)

There is a learned paper from 1995 by Danny Dorling and James Cornford here https://www.dannydorling.org/wp-content/files/dannydorling_publication_id1654.pdf

The property building and selling firms will be hit most, Poor Lendlease and Delancey - they will have to pay accountants to cook the books, as well as keep their profits off-shore!!

I think there was a small amount negative equity mostly with recent first timers in new builds in 2008 but by 'tricks of the trade' the government insulated the banks from it just in case.

 

[CH1]

I think there was a small amount negative equity mostly with recent first timers in new builds in 2008 but by 'tricks of the trade' the government insulated the banks from it just in case.

Yeah - that crisis was more about savers. I myself had savings accounts with IceSave and Kaupthing Edge - so I was mighty pleased Gordon Brown threatened to send the gun boats into Iceland and I got all my money back.
Strangely enough I also had an account with ICICI Bank of India. That one stayed solvent but gave notice to take back the deposit, as they were ceasing retail banking in the UK!

 

[yield]

There is a global debt crisis coming – and it won’t stop at Sri Lanka
Tue 26 Jul 2022. Jayati Ghosh

Looked at in this light, it is clear that Sri Lanka is not alone; if anything, it’s just a harbinger of a coming storm of debt distress in what economists call the “emerging markets”. The past period of incredibly low interest rates in the advanced economies meant that more funds flowed to “emerging” and “frontier” markets from the richer world. While this found cheerleaders in the international financial institutions (IFIs), it was always a problematic process. This is because, unlike in places such as the EU and US, capital leaves low- and middle-income countries (LMICs) at the first sign of any problem.

And these countries were much more battered economically by the pandemic. Advanced economies were able to provide massive countercyclical measures – think of the UK’s furlough programme – because financial markets effectively allowed and even encouraged them to do so. By contrast, LMICs were prevented from increasing fiscal spending by much – because of those same financial markets, which threatened the possibility of credit downgrades and capital flight as government deficits grew larger. Plus they faced significant declines in export and tourism revenues and tighter balance of payments constraints. As a result, their economic recovery has been much more muted and economic conditions remain mostly dire.

 

[CH1]

There is a global debt crisis coming – and it won’t stop at Sri Lanka
Tue 26 Jul 2022. Jayati Ghosh

The fertilizer thing in Sri Lanka is an oddity though. Tea yields halved (their cash crop), plus other farming yields halved. What went on there - and have any other countries tried this allegedly green experiment?

 

[yield]

The fertilizer thing in Sri Lanka is an oddity though. Tea yields halved (their cash crop), plus other farming yields halved. What went on there - and have any other countries tried this allegedly green experiment?

Sri Lanka ran out of dollars to import fertilizer.

This is not a crisis created by a few recent external and internal factors, it has been decades in the making. Ever since its “open economic policy” was adopted in the late 1970s, Sri Lanka has been Asia’s poster boy for neoliberal reform, much like Chile in Latin America. The strategy was the now-familiar one of making exports the basis for economic growth, supported by foreign capital inflows. This led to a significant increase in foreign currency debt, something the IMF and the Davos crowd actively encouraged.

 

[hipipol]

China's impending debt crisis, not just at home but through defaults on developing countries Belt and Road mal-investments, coupled with the Russian invasion - 20% of China loans under BnR policy have been to Russia, Ukraine, Bylorus( speelung?) - Russia can pay in oil, and is already doing so, but not so the other two - big recipients of Xi's largess, Sri Lanka and Zambia have already defaulted on their Sovreign debt - will, if the USA manges to de-couple inself from the China export supply chain, cause massive chaos globally, which even the Financial press seems not to have woken up to, plus all the Feds rate hikes.....best get yourself an allotment if you want to eat in a couple of years time

 

[8ball]

An allotment and a shotgun.

 

[Pickman's model]

An allotment and a shotgun.

And a load of ammunition

 

[platinumsage]

A standard allotment plot is nowhere near enough to sustain one person.

 

[8ball]

A standard allotment plot is nowhere near enough to sustain one person.

Is there a standard size? Pretty sure the two allotments where I live have very different sized plots.

 

[Idaho]

A standard allotment plot is nowhere near enough to sustain one person.

But with the shotgun you can force the other allotment old geezers to toil for you.

 

[platinumsage]

Is there a standard size? Pretty sure the two allotments where I live have very different sized plots.

It's 10 poles. Other sizes are available in some places, includes 5 and 20 pole plots.

 

[platinumsage]

But with the shotgun you can force the other allotment old geezers to toil for you.

The amount you'd need to live off is debatable, but I reckon you'd need over an acre, which means at least 15 old allotment geezers to keep at bay with your one shotgun. I wouldn't fancy your chances.

 

[8ball]

It's 10 poles. Other sizes are available in some places, includes 5 and 20 pole plots.

Ah, makes sense.

As in Ten Pole Tudor..

 

[hipipol]

But with the shotgun you can force the other allotment old geezers to toil for you.

Thus are minor Kings born - some bizaare future madness I hope never comes to pass

 

[bluescreen]

God help you if the allotment people aren't alongside. Your allotment won't be worth shit.
OTOH, if they are - it's all sweetness and light, barter and exchange, and tips on how to keep the wireworms down.

 

[bellaozzydog]

An allotment and a shotgun.

A mountain bike a trailer and a shotgun

No point growing shit when you can trundle round and just take it

 

[teqniq]

The article deals specifically with UK examples of private equity and it's depredations:

Prem Sikka: The $63.2 trillion shadow banking industry is likely to be site of the next financial crash

Private equity is a key part of shadow banking and has been buying-up many businesses. What private equity entails is private equity firms using funds raised from institutional investors to acquire and engage in buyouts of businesses.

leftfootforward.org

 

[CH1]

The article deals specifically with UK examples of private equity and it's depredations:

Prem Sikka: The $63.2 trillion shadow banking industry is likely to be site of the next financial crash

Private equity is a key part of shadow banking and has been buying-up many businesses. What private equity entails is private equity firms using funds raised from institutional investors to acquire and engage in buyouts of businesses.

leftfootforward.org

Bit technical for me - but at least he mentions Morrison's ands ASDA!

 

[Ming]

The article deals specifically with UK examples of private equity and it's depredations:

Prem Sikka: The $63.2 trillion shadow banking industry is likely to be site of the next financial crash

Private equity is a key part of shadow banking and has been buying-up many businesses. What private equity entails is private equity firms using funds raised from institutional investors to acquire and engage in buyouts of businesses.

leftfootforward.org

Ex accountant nerd that i am. I'm a bit of a fan of Prem Sikka. Does a lot of work with the tax justice network.

 

[Artaxerxes]

A standard allotment plot is nowhere near enough to sustain one person.

Depends what you grow like, you need to buy in carbs but I could manage well for a few months of winter squash and enough toms to make salads and sauces to last the rest of the year.

 

[CH1]

Ex accountant nerd that i am. I'm a bit of a fan of Prem Sikka. Does a lot of work with the tax justice network.

I CAN remember when Isoscles Capital/KKJR bought and destroyed Gateway Supermarkets
This was junk bond stuff - the Gateway Group was dismembered and partly sold off to ASDA,.
The residue became Somerfield which was taken over by KwikSave, then merged with the Co-op.
That was 1989 the height of Thatcher free-market loads-a-money lunacy.

KKR are still at it - "circling" present day Sainsburys and ASDA.
With Brexit there is much less regulation to stop this shit.

 

[campanula]

Even with the best will in the world and a whole lot of intercropping and rotation, an allotment (or 2) is only really going to supplement your diet with a few nice fresh extras. If I put my entire plots down to potatoes, I could possibly manage to survive for a year. (badly) Not the following years though (cos rotations). I did once know the actual amount of land required to provide sufficient nutrients to sustain life ( per capita and naturally, there are so many caveats involving climate, soil type and so on)) but have forgotten. More than an allotment though, which were only ever regarded as a way to add extra nutrition to urban families - never a means of self-sufficiency. Quite a lot of them have some baffling rules regarding what crops are allowable with quite a few allowing nothing which is cannot reach maturity over a single growing season (so no nuts, stone fruits, permacrops etc.)

 

[yield]

Venture capital’s silent crash: when the tech boom met reality
FT. 01/08/2022 archive.ph

In a recent presentation to its own investors, Coatue depicted the tumbling valuations it expects in the tech world as a series of dominoes that are only just starting to topple. It predicted that big losses would spread, starting with unprofitable internet companies and reaching deeper into the crypto and fintech sectors, before eating into more solid-seeming sectors like software and semiconductors.

If predictions like these are correct, then investors who put the bulk of their latest funds to work at the peak of the market could be facing the sort of negative returns that have not been seen since the dotcom crash at the turn of the century.

 

[yield]

How the German Economic Machine Broke Down
WSJ. July 28, 2022 archive.ph

Germany’s economy hasn’t grown for nearly five years. Its recovery from the Covid-19 pandemic has been weaker than any major advanced economy. Its ability to fill its energy needs is in question. And now the country once known as the economic engine of Europe is teetering on the brink of a recession.

It’s a sharp turn of fortunes for Germany’s large manufacturing sector, which flourished over the past two decades just as other Western nations saw industrial jobs migrate to Asia.

Germany’s big and long-successful bet on manufacturing relied on four engines: Free and open global trade, surging demand from China, an efficient domestic workforce and cheap Russian energy.

Each of those is now sputtering.