Credit deflation and the reflation cycle to come (part 3)

[Axeman123]

Hopefully a similar cautious approach will enter the mortgage market.

[CannonFodder]

I imagine used overdrafts that earn them money will be kept as profit making.

Unused that dont make money and which make their stats look bad will be removed.

[Option5]

Are they reducing credit card limits as well?

[Axeman123]

14 minutes ago, Option5 said:

Are they reducing credit card limits as well?

If they are it is game on "toot sweet"*. CC has been taking up the slack for a lot of people.

*tout de suite, I know.

[Yellow_Reduced_Sticker]

41 minutes ago, DurhamBorn said:

Its best to ignore 29 and concentrate on the decade after because we are more that decade than 29,Ken Burns The Dust Bowl is a documentary and book that explains it very well and the lead up (that helped cause 29,tractor loans) @Yellow_Reduced_Sticker might even find us somewhere to watch it or the book.

 

YES of course Sir i can get it... FREE!

 

Looks very interesting shall watch it tonight, cheers!

 

Ken Burns The Dust Bowl - Full 2hr documentary/movie:

 

Ken Burns along with Paula Zahn in a live YouTube event and national dialogue regarding the Dust Bowl's legacy/overview:

 

 

[sancho panza]

On 14/08/2022 at 13:10, DurhamBorn said:

That and this will ensure systemic collapse after private assets are all stolen.Inflation is moving all private sector wealth to government and those on its tit,only question from the macro is will it change or go to conclusion.

https://iea.org.uk/wp-content/uploads/2021/10/DP103_Great-British-Rake-Off_web.pdf

In the NHS Pension Scheme in 2020-21, contributions from employees were 9.8% of salary (this is a figure recognisable by millions of employees from their payslips); contributions from the employer were 20.6% of salary, so the total contributions in 2020-21 were 9.8% + 20.6% = 30.4% of salary. But the current service cost for 2020-21 was 62.2%! This means that on average every NHS employee is getting 62.2% of salary worth of pension (i.e. a fabulously generous pension) at a cost of only 30.4%, of which he or she only pays 9.8% out of his/her salary. It also means that the taxpayer (to be more exact, future taxpayers) have no idea that the pensions 13 £17 billion = [(62.2%-30.4%) x £53.3 billion]. £53.3 billion is the NHS Payroll based on Table G. 20 promised by the Treasury have only been half accounted for, and indeed both the accounted-for half and the unaccounted-for half will have to be paid by them – future taxpayers

That's a fascianting find there DB.WIll look forward to going through that when I have time.

If I could make one point and that is that at my workplace,I reckon currently,there are only about 10% of the workforce who will get any sort of defined benefit pension.Ambulance service has got much younger.

In essence,the pension cost benefit is even more skewed than the figures above suggest as a lot of young people are paying full whack but will get virtually nothing back except depreciating sterling payments.

They need to default on all defined benefit pension schemes that are govt funded imho.WHy shoud all the young people be forced to work to 67,borrow £50,000 for a degree,pay for a pension that they will never receive and buy a hosue at 10 times average earnings?

 

On 14/08/2022 at 13:36, Virgil Caine said:

 

Arm the NHS and they would be one of the world largest military forces.

They don't need arming.

The last two years of lockdown policy and vaxx mandates(supported by NHS management) have shown how their attitude to public health is based more on political dogma rather than science and a genuine concern for patients.

[RJT1979]

41 minutes ago, CannonFodder said:

I imagine used overdrafts that earn them money will be kept as profit making.

Unused that dont make money and which make their stats look bad will be removed.

But why remove if unused. Makes no difference.

[RJT1979]

26 minutes ago, Axeman123 said:

If they are it is game on "toot sweet"*. CC has been taking up the slack for a lot of people.

*tout de suite, I know.

look at moi. I've got one word to say to you

[Don Coglione]

35 minutes ago, Axeman123 said:

If they are it is game on "toot sweet"*. CC has been taking up the slack for a lot of people.

*tout de suite, I know.

Pretentious, moi?

[sancho panza]

On 14/08/2022 at 11:39, Lightly Toasted said:

Leftists and their clients keep using that phrase, it's part of the bot programming from which entitlement flows. It's deep-rooted, almost part of the national identity.

Unacknowledged problems cannot be solved. If you're already among the richest in your peer group, why should you have to work/invest to improve your situation further?

https://www.statista.com/statistics/382858/uk-state-benefits-by-region/

 

[Sidd]

Guess who's back, back again, Dollars back, tell a friend.

[CannonFodder]

42 minutes ago, RJT1979 said:

But why remove if unused. Makes no difference.

I believe it counts as lending in terms of their financial metrics (gearing).

Cos they approved it.

So they need to keep a percentage of it as capital reserve which is cost to them.

[Harley]

24 minutes ago, Sidd said:

Guess who's back, back again, Dollars back, tell a friend.

At least five reasons to be nervous (the sixth being it's oversold on the weekly).....

[sancho panza]

20 hours ago, Castlevania said:

This raises an interesting point. Which EM telcos can you put in an ISA?

I think the Brazilian telcos are also not allowed.

I've never been able to buy an ADR in an ISA that I can remember.

16 hours ago, DurhamBorn said:

Tell me this,how can sterling look like one of the likely best performing currencies mid cycle on my roadmap,yet also now look like a coin toss to collapse?.We are in serious trouble,massive dislocation could hit at any time.Obvious systemic collapse is already underway,the only question is if it can be stopped and reversed before it spreads from all government departments into the broad economy.If they dont cut entitlements we are going down,or they are taking all savings,then we are going down.

 

It's funny but maybe it's a basement dweller thing,but I've been increasing the chance of systemic breakdown in the UK/Sterling over the last few months.Before the Ukraine,I had the possibility of all out collapse/food riots/social breakdown as a sub 10% chance well into the 30's.

Having watched our govt sanction us into submission/bankruptcy in a war on a respiratory virus that they'd decided to swing their sledgehammer at was as low as they could go I thought.

But then they sanctioned us into surrendering in a war we're not even technically involved in.An achievement in itself.Net result of both near double digit inflation(CPI as well,which tends to understate how sh1t life is for msot people).

I've jsut got off the phone with my Mum and floated the idea of us ditching all UK centric stocks that don't offer either export potential or likely benficiary of onshoring .To be fair,because we've been hedging sterling risk for sometime,we've not got much left.But it looks likes we'll be selling BT/Scottish play over the next few days and will likely buy emerging marekt exposure with it.Poss some more Rolls Royce.

Scottish play will be an emeotional farewell and 35% loss.

[JMD]

On 10/08/2022 at 14:37, sancho panza said:

AS I've said previously telecoms are a great way to access these economies imho.Turkcell looks a great punt as does Argentina Telecom.Ideally think you need to avodi the banks and they do oftern dominate the upper ends of ETF holdings.

https://www.investing.com/equities/telecom-argentina-financial-summary

Goodidea.I've got the kids off school so have little time but definteily an idea.

stock mark chart/debt to gdp ratio/currency stability(incl infkation)/poltical stability(UK f*cked then)/commodity potential

the mind boggles but it makes a lot of sense to try and score these countries in some way.

SP, do you know what the approx divi is for Argentina Telecom (teo)? I'd like to buy some - and you very helpfully provided a link - but I'm still unsure on the basic divi metrics for this.

Only I'm thinking they may have recently stopped the divi, because depending on which site I use, I am getting either n/a or 10%. However it might just be me getting muddled by the Argentinian listed (common) stock (teco2) thats showing no divi, and the NYSE listed one showing 10%?

[Lightly Toasted]

1 hour ago, RJT1979 said:

But why remove if unused. Makes no difference.

An unused line of credit must have costs/risks to the bank, because funding needs to be available in case the credit is drawn and because the borrower could ultimately default.

I presume those costs/risks must rise along with interest rates/general tightening.

Imagine if a bank faced a funding crisis, the last thing it would want would be loads of on-demand credit arrangements.

[DurhamBorn]

20 minutes ago, sancho panza said:

I've never been able to buy an ADR in an ISA that I can remember.

It's funny but maybe it's a basement dweller thing,but I've been increasing the chance of systemic breakdown in the UK/Sterling over the last few months.Before the Ukraine,I had the possibility of all out collapse/food riots/social breakdown as a sub 10% chance well into the 30's.

Having watched our govt sanction us into submission/bankruptcy in a war on a respiratory virus that they'd decided to swing their sledgehammer at was as low as they could go I thought.

But then they sanctioned us into surrendering in a war we're not even technically involved in.An achievement in itself.Net result of both near double digit inflation(CPI as well,which tends to understate how sh1t life is for msot people).

I've jsut got off the phone with my Mum and floated the idea of us ditching all UK centric stocks that don't offer either export potential or likely benficiary of onshoring .To be fair,because we've been hedging sterling risk for sometime,we've not got much left.But it looks likes we'll be selling BT/Scottish play over the next few days and will likely buy emerging marekt exposure with it.Poss some more Rolls Royce.

Scottish play will be an emeotional farewell and 35% loss.

Thats exactly what iv been doing.I want good earnings outside of the UK or things are going to have to go.Iv still a 5 figure holding in BT having sold 2/3ds but im tempted to sell the rest.Asset managers im not so bothered about as most of their assets are outside of sterling i suspect,though i have lightened up on HL luckily with a nice quick profit and gone more Ashmore and Ninety One plc.Im temped by Old Mutual as well but havent got any.M+G im going to look at to see where their assets are held in a deeper dive,im only up a couple of percent on them but do have 8.5% in divis over the year.VOD has big sterling and German exposure,but it also has big Africa and Turkey exposure so thats fine,baccy fine etc.

I didnt see a sterling collapse and my roadmap says it should do well medium term,but the actions of the government are horrific and there is a very real risk there.I think its a coin toss,but we feel very third world.

[Lightly Toasted]

1 hour ago, sancho panza said:

https://www.statista.com/statistics/382858/uk-state-benefits-by-region/

 

Terrifying, though I've seldom seen such an apt annotation below a graph: "Collapse statistic" 

[Ma2]

1 hour ago, sancho panza said:

https://www.statista.com/statistics/382858/uk-state-benefits-by-region/

 

Unfortunate placing and turn of phrase at the bottom of the graph there - "Collapse statistic"! 

[Froggy2000]

45 minutes ago, sancho panza said:

I've never been able to buy an ADR in an ISA that I can remember.

I managed to buy the Turkcell ADR through an ISA using the new Interactive Brokers offering. It's early days but so for I'm quite impressed so be honest.

Not advice etc !!!

[JMD]

21 hours ago, M S E Refugee said:

Decent video, Luongo recommends Turkey as a proxy for investing in Russia.

He thinks Turkey has great potential, I wonder if he has been on here stealing @DurhamBorn's ideas.

Interesting video. but Luongo is one of those Americans (excuse that phrase, but there are surprisingly  many) who believes the BoE rules the Fed, and he states that several times in the vid. Does anyone else think it strange that although we here (or is it only me?) believe its the US which has the global empire, yet Luongo is convinced that the US is still being ruled by the old European banking/aristocratic empires?!     

...I guess his argument might be a little more subtle along the lines that the powerful european banking families, eg Rothschild's etc, and their influence even after hundreds of years never went away, so they are effectively still pulling the international levers. However I'm not sure that is how he views things as I'm sure he kept referring to present day British influences, etc... Btw hope I'm not coming across as being overly sensitive about this, Luongo can obviously believe what he wants, I just find it strange how his perception of US hegemony can differ so much from ours this side of the pond.

[sancho panza]

3 hours ago, No One said:

 

Barclays customers claim they are losing a vital financial safety valve during the cost of living crisis after the bank abruptly withdrew their unused overdraft facilities. The bank has written to a number of its current account holders informing them that their overdraft limit will be removed with a month’s notice because they have not used it for 12 months.

Many say they were counting on the provision in case soaring bills tip their accounts into the red. They now face paying high interest rates and charges if they are forced into using an unauthorised overdraft. Andrew Davey, who has banked with Barclays for more than 30 years, was informed that his £1,400 overdraft was being withdrawn as he had not used it in the past year.

“I asked if they could just reduce it to £400 as I wanted it as a safety cushion in case of account issues, and spent 40 minutes providing all my financial information, including my income and a very detailed breakdown of expenditure,” he says.

He adds: “I have just received a text to tell me that my request was not accepted, and it will be removing all my overdraft facility. I really cannot understand why they are pushing customers away.”

Clare Illingworth Leach has banked with Barclays since 1980 and has a £150 overdraft which she has never yet used. “I received a letter stating that it would be removed. So did all the people I know who bank with Barclays,” she says. “I sent them a letter, as invited, asking them not to remove my modest overdraft facility. They ignored me and revoked it without replying. I am housebound [and] on a very small income, and I wanted to retain it as a cushion in case of fraudulent transactions depleting my account, which has happened twice in five years.”

Barclays says it has been reviewing overdrafts since last year to protect customers from unaffordable levels of debt. It says: “We review all personal arranged overdraft limits at least once a year, taking into account all the financial information we have about each customer.

“Where this suggests that a personal arranged overdraft limit may be too high, we will plan to reduce it to a lower limit, taking into account how much of the overdraft has been used over the past 12 months. If the overdraft hasn’t been used at all for a long time, we may remove it.”

‘The practice of slashing and removing overdraft limits is hardly within the spirit of the regulations
Martyn James, Resolver
It adds: “If customers feel they are able to afford their current limit, they will need to provide additional information to confirm their income and expenditure, so we can meet our requirements as a responsible lender.”

Some customers have speculated that the move is to protect Barclays’s own finances, since overdraft facilities, whether used or not, have to be funded and shown as debt on the accounts of the bank.

Andrew Hagger, a personal finance expert at website Moneycomms.co.uk, says he is unaware of other banks doing the same thing, but he expects to see the practice become more widespread as the financial crisis bites.

“Barclays [and other banks] will undoubtedly have reviewed underwriting and risk strategies, as they know some customers are going to face financial difficulties as the cost of living crisis rumbles on,” he says. “Some customers will have been granted overdraft limits when the economic situation was far more positive and stable, but now the landscape and their disposable incomes look very different.”

According to complaints website Resolver, while other banks are also removing overdrafts, Barclays appears to be the biggest offender. “Banks have a responsibility to ensure customers don’t get into debt,” says spokesperson Martyn James.

“But given the fact that credit card interest rates are reaching the highest levels since the 1990s, and other forms of lending are also creeping up to their highest rate in decades, the removal, or reduction, of overdraft rates seems counterproductive as millions of households struggle to make ends meet. The practice of slashing and removing overdraft limits is hardly within the spirit of the regulations.”

Banks have a regulatory requirement to treat customers fairly, and financial regulator the Financial Conduct Authority says it is monitoring the situation with overdrafts.

It says: “When making changes to available credit, we expect firms to consider the circumstances of their customers, including any vulnerability, to communicate clearly, and to allow people time and opportunity to challenge and complain if they disagree.

“With the cost of living rising, more consumers may need to turn to the credit market, including overdrafts. Lenders need to treat people fairly as individuals and consider their needs.”

 

I've said before,Barclays are carryign the msot leverage of the High St banks using Dowd Buckner ratio(MC/Total assets).Over 50/1.Looks like they're still blowing up their assets ino possibly the biggest property ubble in the hsitroy of teh UK.

MC £28bn

Decl:not short but looking to at the right moment.

40 minutes ago, JMD said:

SP, do you know what the approx divi is for Argentina Telecom (teo)? I'd like to buy some - and you very helpfully provided a link - but I'm still unsure on the basic divi metrics for this.

Only I'm thinking they may have recently stopped the divi, because depending on which site I use, I am getting either n/a or 10%. However it might just be me getting muddled by the Argentinian listed (common) stock (teco2) thats showing no divi, and the NYSE listed one showing 10%?

Looks like their divi is sporadic.We had a contributor on here who explaiend Brazilian divis a while back and they are unusually timed too.

Looks as if they have a divi but it's sporadic

https://www.digrin.com/stocks/detail/TEO/

[onlyme]

2 hours ago, CannonFodder said:

I imagine used overdrafts that earn them money will be kept as profit making.

Unused that dont make money and which make their stats look bad will be removed.

Had mine removed as well, couple of year ago it was used a couple of times, they get very high interest rates on them, something else must be up. Closed the local branch too. 

[Axeman123]

5 minutes ago, onlyme said:

Closed the local branch too. 

Natwest/RBS are consolidating branches. End game will be no RBS in England, no Natwest in Scotland. customers of either bank can use whichever branch.

[Majorpain]

37 minutes ago, onlyme said:

Had mine removed as well, couple of year ago it was used a couple of times, they get very high interest rates on them, something else must be up. Closed the local branch too. 

Local high street (in affluent area) had 6 banks two years ago, Santander, Barclays and now Nationwide gone when I went down yesterday.