The Business/Finance/Economics Thread

[seanie ward]

its too late to moan now, the bank base rate was far too low, it was on the cards this would happen, with house pricing going through the roof, i took a lot of stick from the mrs and mother in law by just buying a one bedroom mews, there glad they listened to me now, when the interest rates hit 16%. I walked for miles looking for work, it came to a standstill for a long time, it looks that way again, athough, i think the gov, helped out,, but it was different then, house prices were in the low thousands, the only thing ,you can do, is dig in and hope for the best, ,seanie

 

[Pangloss]

Windfall profits for the banks.

The differential between the lending (which are bank assets) rates and savings (which are bank liabilities) rates will drive massive profits.

 

[wittonite]

I think it's time someone started looking at is Andrew Bailey fit for the job he's in.

January 2023:"Bank of England governor Andrew Bailey tips inflation to fall ‘quite rapidly’ in late spring.

""Andrew Bailey said lower energy prices will help drive down inflation in coming months.

"June 2023:"Oops, sorry Britain."

This article agrees with you mate. Even suggests replacing him with AI.

Time to replace Bank of England’s governor with ChatGPT

AI may well do a better job at communicating monetary policy than Andrew Bailey, whose own track record is — let’s face it — blighted with gaffes.

www.politico.eu

 

[CDX_EIRE]

Windfall profits for the banks.

Hey if everyone else is why shouldn't they

 

[ItAin'tAGameAnymore]

Posted the other day about LIBOR again, the whistleblower ended up in prison and not his bosses and he had them on record telling him to do it, even though he didn't want to.

What does that tell you.

The base rate is going up, mortgages effected (people will lose their homes) but before this happened interest savings rates were 1/2% at best, but lending rates still 30% plus. Overall lending rates are going up because of the base rate change, fucking savings aren't.

And just like subprime, and everything else - who benefits from repo's - the banks and rich mates who can snap them up.

IT's a total fucking con and I'm barely scratching the surface as I don't know enough.

I've said before mate, we disagree on loads of things and agree on others and we always will, but I admire you wanting to get out of it, you've said yourself life would be easier if you could stomach it.

I won't be the only lad on here who shakes your hand if the chance arises based on your choice.

Thank you Mike, I hope one day to be able to shake yours and others that post here hands. Would be a pleasure. We'll see what happens with me, have been very lucky to be able to do what I have done but time is running out and things aren't getting better.

As for the con, you're spot on. Really don't have to look farther than the fact since 2008 the demographic who's gotten more wealthy are the wealthiest. All the "easy" money was hoovered up, it didn't trickle down. Unfortunately they will not be paying back in the same proportion.

 

[astonion2]

Like us yesterday Turkey raised their interest rate. They raised theirs by 6.5% to 15% and they have inflation running at 40%. GULP.

 

[BodyButter]

Like us yesterday Turkey raised their interest rate. They raised theirs by 6.5% to 15% and they have inflation running at 40%. GULP.

After the election, Erdogan has to try to sort out the economy.

 

[astonion2]

After the election, Erdogan has to try to sort out the economy.

Yes but its him that has created the problem. He is still saying the best way to tackle inflation is through low interest rates. This despite the fact that he has brought in two top economists to run the banking system and its them that have raised the rate to 15%.
Had he done it before the election he would have lost.

 

[Pangloss]

Another Turkish coup attempt incoming, they deserve this for re-electing him in the first place.

 

[CDX_EIRE]

Another Turkish coup attempt incoming, they deserve this for re-electing him in the first place.

Wonder if the yanks have had enough of the Turks acting against NATO and Ukraine. Just give them a gentle pushback toward Europe by temporarily crippling them economically so somebody else rises up.

 

[BodyButter]

The Yanks blew their load early in Turkey and Erdogan caught them out. The Gulen guys got rounded up and there is nobody else that can stage a coup.

Erdogan will stay on.

Ripping inflation isn't new for Turkey either. It's almost part of their economic model.

 

[danvilla2]

I'm just going to prioritise debt repayments, I roll off a 5 year fixed next May at ~2%, this rate will at least triple by then. At this point there will zero point in putting money away in a savings account and will be better off clearing as much of the mortgage balance as possible.

I’m in the same boat. I had a house project over the last year and I’ve racked up a fair amount of debt - luckily most of it is interest free (I.e. family loans). But I’m going to get the builder paid off and then a credit card I used for big purchases, just to at least start 2024 on a clean slate as - unfortunately - I have to renew.

Ultimately we will survive and it will toughen us up a covid and wars have done. I have posted before that the low interest rate drug in the long term wasn’t a good thing for a generation that doesn’t know any different (me) and there is a big risk around the corner, but it’s come at an interest rate rise increase that none of us expected.

 

[Fulford]

It's ok the Government saying people should look to switch to interest only mortgages etc, but this could mean them ending up with a mortgage for life.

 

[seanie ward]

Bill Black the former US banking regulator reckons that the bank regulators have been asleep at the wheel for the past decade. All of the banks are underwater in bonds and the central bankers now have to choose between bankrupting the banks with interest rate hikes or burning the economy down with inflation.

He thinks we are going to get a rolling banking crisis and it won't be isolated to the US.

Basically, he thinks the global economy is a bit fucked.

we have to be prepared for the hard times as well, i remember my dad saying, dont have anything on the knock, of course i did but i learnt quickly, to cut my measure accordingly, a lot of people have fixed rates now and can also spread the payments, and if you can do another job as well, do it, theres no magic wand , do everything you can and never give up,,,seanie

 

[wittonite]

if you can do another job as well

In the late 70s I had three jobs on the go to avoid giving the keys back to the building society. When needs must and all that.

 

[Pangloss]

So far the major UK banks are posting huge profit increases because of the rate rises.

 

[CDX_EIRE]

So far the major UK banks are posting huge profit increases because of the rate rises.

I think our current form of capitalism is just broken. Its gone beyond being an imperfect system to something thats actually only working for a select group of people.

We either need to go back to higher taxation or strictly limit profits and earnings. There definitely needs to be an earnings ratio between the lowest employee and the CEO. Tie the people at the top to the people at the bottom and watch things change real fast.

 

[CDX_EIRE]

And just to build on the previous point because I saw a video last night about how they're just gaslighting people now. In the states they're going big on these single family build to rent developments. I am talking full neighborhoods with 50 odd single family units on 1/2 acre of land where you also pay maintenance fees. Then they've the balls to come on and say there isn't much housing stock out there to buy and people are making the "choice" to rent.

Look we do need more rental units because not everyone has the same situation but FFS you can't go building an entire fucking estate, rent the whole thing out and then pretend you're part of a solution. You're part of the problem.

 

[BodyButter]

Here is something interesting.

The boomer generation have retired. They are the biggest and wealthiest generation in history. They managed to save an enormous amount of money through their working lives (as a group, not always as individuals). This money was put into retirement funds and savings accounts and was always looking for a return so money has been cheap for the past 3 decades.

Now that they have retired, they want their money out of those investments.

That means that money is becoming scarce on the investment markets and so interest rates are going up as the same number of people are trying to access an increasingly smaller pot of funding.

It means that there will be no cheap money for silicon valley. Expect a big slump in technological innovation.

It means that mortgages are going to get more expensive permanently.

It means that the economy is going to stagnate and stay that way for a long time (think of Japan since the 90s).

The boom markets will be in adult nappies and elder care facilities.

 

[CDX_EIRE]

Here is something interesting.

The boomer generation have retired. They are the biggest and wealthiest generation in history. They managed to save an enormous amount of money through their working lives (as a group, not always as individuals). This money was put into retirement funds and savings accounts and was always looking for a return so money has been cheap for the past 3 decades.

Now that they have retired, they want their money out of those investments.

That means that money is becoming scarce on the investment markets and so interest rates are going up as the same number of people are trying to access an increasingly smaller pot of funding.

It means that there will be no cheap money for silicon valley. Expect a big slump in technological innovation.

It means that mortgages are going to get more expensive permanently.

It means that the economy is going to stagnate and stay that way for a long time (think of Japan since the 90s).

The boom markets will be in adult nappies and elder care facilities.

The population hasn't collapsed in the states or stopped growing, people continue to want to be here so it'll be interesting to see how it pans out. Birth rates have slowed and may continue to if its increasingly difficult to have kids from a financial perspective but I think population growth for the US is still projected to be positive for the next 10 years.

Of course I live here and intend to stay here so I will continue to gaslight myself.

The flipside of boomers retiring is you'll have the largest wealth transfer in history over the next 10-20 years too maybe even 30 years. Many of these folks just didnt take care of themselves and we've seen declining life expectancy so it'll be interesting to see how long they chug along for.

Some of these people simply arent retiring either, mainly those big earners. I met an architect today and she is still CEO of the firm at 70. Big fuck off apartment on the Upper West Side and a house out in Newport, RI. Millions in the bank and still working.

I think many people my age are relying on payoffs to buy their homes and live better.