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

[Starsend]

5 minutes ago, Don Coglione said:

That is interesting, especially as I predicted (based on my own experience) that you wouldn't get the money!

As I posted at the time, Natwest wanted to know my inside leg measurement, never mind exactly what I wanted to do with the money, hence our deciding not to pursue the free money.

Well done.

The one that wanted to stick their nose in was a smaller lender. My experience in the past (as now) has always been that the big lenders are much easier, probably how they got to be big.

Obviously I will be buying a holiday home and a Tesla but I've decided to take my time and in the meantime I need to cover the 0.99% interest I'm paying. Now let's see, Suncor 5.5% yield, Vale 20%, Orange 8.5% - yep should be able to cover it just about.

[Don Coglione]

5 minutes ago, Starsend said:

The one that wanted to stick their nose in was a smaller lender. My experience in the past (as now) has always been that the big lenders are much easier, probably how they got to be big.

Obviously I will be buying a holiday home and a Tesla but I've decided to take my time and in the meantime I need to cover the 0.99% interest I'm paying. Now let's see, Suncor 5.5% yield, Vale 20%, Orange 8.5% - yep should be able to cover it just about.

Perhaps I was just unlucky with the bank drone I was assigned. 

[HousePriceMania]

The MPC have lost the plot it seems 

 

 

 

[Ma2]

37 minutes ago, Starsend said:

Some of you might remember a discussion on here a few months back about re-mortgaging your house to take advantage of ridiculously cheap money

Yes I do as I was in the process of doing something similar which has also just come to fruition so congrats.

I was porting my existing mortgage which basically means you have to go through the whole application process again which I didn't realise and, although nothing had changed, they had since pulled the 10 year off the shelf, which I knew they would. But we got confirmation that they would lend. Again they didn't ask why we weren't clearing the mortgage (we had to tell them the sale and buy prices so they know) and what we wanted the money for.

The plan was to sell up in an expensive area and realise the gains, basically clear our mortgage and buy the new place outright but I decided to maintain borrowing at the same level and keep hold of the money (roughly half the value of the house).

My though process, but be interested to hear others -

 - Essentially mortgage free but with the option of deploying capital if for example savings accounts rates rise above the mortgage rate, could def get something decent out of divi players if wanting to risk some or all

 - Can pay off 10% every year

 - No worries about inflation eating the savings away as the money doesn't need to grow to pay the mortgage so anything is a bonus

 - No early replayment fees from years 6 to 10

 - Can invest in making the house pay for itself in terms of solar, wind, food etc.

 - Go down to 4 days a week, no need to earn the extra

 - Mental freedom of not worrying about mortgage and even possibly losing job due to economy, covid, mandates etc

 - Potentially buy some productive land, for wood for fuel or for food, something that will be worth something and provide an income outside of the system

 

 

 

[Starsend]

16 minutes ago, Ma2 said:

Yes I do as I was in the process of doing something similar which has also just come to fruition so congrats.

I was porting my existing mortgage which basically means you have to go through the whole application process again which I didn't realise and, although nothing had changed, they had since pulled the 10 year off the shelf, which I knew they would. But we got confirmation that they would lend. Again they didn't ask why we weren't clearing the mortgage (we had to tell them the sale and buy prices so they know) and what we wanted the money for.

The plan was to sell up in an expensive area and realise the gains, basically clear our mortgage and buy the new place outright but I decided to maintain borrowing at the same level and keep hold of the money (roughly half the value of the house).

My though process, but be interested to hear others -

 - Essentially mortgage free but with the option of deploying capital if for example savings accounts rates rise above the mortgage rate, could def get something decent out of divi players if wanting to risk some or all

 - Can pay off 10% every year

 - No worries about inflation eating the savings away as the money doesn't need to grow to pay the mortgage so anything is a bonus

 - No early replayment fees from years 6 to 10

 - Can invest in making the house pay for itself in terms of solar, wind, food etc.

 - Go down to 4 days a week, no need to earn the extra

 - Mental freedom of not worrying about mortgage and even possibly losing job due to economy, covid, mandates etc

 - Potentially buy some productive land, for wood for fuel or for food, something that will be worth something and provide an income outside of the system

 

 

 

What rate did you get? 

[Castlevania]

28 minutes ago, HousePriceMania said:

The MPC have lost the plot it seems 

 

 

 

Blanchflower is best ignored.

[Bricormortis]

50 minutes ago, DoINeedOne said:

Same i go to pay in £1000 cash and they think im Pablo Fucking Escobar and yet in the FT today

The sight of people lugging £700,000 in black bin bags through a West Midlands shopping centre to a NatWest branch was just one startling red flag among multiple warning signs the UK bank missed in failing to prevent a £365m alleged money laundering scheme.

Over a period of five years Fowler Oldfield, a Yorkshire gold dealer with a predicted annual turnover of £15m, deposited £365m with NatWest including £264m in cash. Some individual deposits were unusually large £42m in cash was paid into a branch in Southall between 2015 and 2016; £750,000 was dropped off in Halifax within three days. At the NatWest in Walsall shopping centre where £6.6m cash was deposited, including £700,000 paid in on September 14 2015 bags were splitting open due to the volume of notes and branch staff had to transfer them into stronger hessian sacks, Southwark Crown Court heard during the bank’s sentencing hearing this week.

The money filled two floor to ceiling safes at the branch and even then more had to be stored behind the bank’s grilles. “Someone was walking through the streets with black bin liners of cash,” said Clare Montgomery QC, prosecutor for the FCA. Yet no suspicious activity report (SAR) was raised by NatWest with the National Crime Agency before 2016, when West Yorkshire police said it was investigating Fowler Oldfield. NatWest, which is majority owned by the British government, this week paid the penalty for its deficiencies, with a criminal conviction and a £264.8m fine for breaching anti-money laundering regulations between November 2012 and June 2016.

The outcome marked the first criminal prosecution brought by the Financial Conduct Authority (FCA) using anti-money laundering laws. “NatWest is responsible for a catalogue of failures in the way it monitored and scrutinised transactions that were self-evidently suspicious,” said Mark Steward, director of enforcement and market oversight at the FCA, who added that the bank’s actions had created “an open door for money laundering.”  Eleven individuals have pleaded guilty of money laundering offences relating to cash being delivered to Fowler Oldfield and a further 13 have been charged. The case underlines the FCA’s wider determination to crack down on a tide of dirty money that is estimated to cost the UK economy £100bn each year and has raised searching questions about weaknesses in banks’ ability to stop the fraud.

Red flags missed Fowler Oldfield became a NatWest customer in 2011. From late 2013, at least 50 UK bank branches suddenly started to receive millions of pounds in cash deposits, with £1.8m a day being paid in at one point, Southwark Crown Court heard. Staff in branches and cash centres, who were responsible for handling these cash deposits, reported their suspicions to colleagues. Some 11 internal alerts were raised and NatWest’s own automated anti-money laundering system was triggered 10 times. At the NatWest in Walsall shopping centre where £6.6m cash was deposited bags were splitting open because of the volume of notes and branch staff had to transfer them into stronger hessian sacks, Southwark Crown Court heard during the bank’s sentencing hearing this week.

But no appropriate action was ever taken by the bank, the FCA said. Even at the Walsall branch, staff had intended to raise an internal alert but no record was found by the bank. Many cash deposits highlighted in the case were made via “quick drop” business machines in branches that did not require interaction with bank staff even though this method had been flagged as a concern in the UK government’s 2015 national risk assessment of money laundering, the regulator noted. NatWest’s Washington cash centre in north east England raised the alarm as the cash literally failed the smell test.

Staff noted that the banknotes would “at times carry a prominent musty smell, indicative of long storage rather than business use.” Employees were also troubled by the “unusual high volumes” of Scottish notes being deposited by Fowler Oldfield, which was based miles from the Scottish border. The NCA, investigating Scottish banknotes in England and possible links to criminal activity, was alerted but no SAR was raised. A manager about to retire at NatWest’s cash centre in Basingstoke, Hampshire in 2015 shared his concerns with a financial crime manager about “the most suspicious potential money laundering he had seen in his career”. But the bank said there were sufficient explanations, the court heard. NatWest’s failures There were significant gaps in NatWest’s processes.

Its automated transaction monitoring system incorrectly identified some cash deposits as cheques which carried a lower money laundering risk. The bank failed to classify Fowler Oldfield as a high-risk customer for two years.

The only SAR raised to the NCA was in relation to the accounts of a hair extensions supplier that had received about £387,000 from Fowler Oldfield. No SAR was submitted about the gold dealer itself. The internal alerts were investigated at an office in Hertfordshire where some staff were inexperienced and keen to close cases in 30 days, the court heard.

Justice Sara Cockerill, who sentenced NatWest, pointed out the “glaring nature of some of the failures” in the bank’s systems and said without them “the money could not be effectively laundered.” John Kelsey Fry QC, acting for the bank, told Southwark Crown Court that staff “didn’t miss” the activity. “The quality and adequacy of that scrutiny is another matter”. Alison Rose, NatWest’s chief executive, has expressed her “deep regret” about the failures.

The bank now employs 5,000 dedicated staff and will spend £1bn between 2021 and 2025 improving its anti-financial crime work. No action is being taken against any current or former employee of NatWest. Roger McCormick, senior visiting fellow at Bayes Business School, said: “It is disconcerting that even a complex and sophisticated set of procedures for anti-money laundering can let you down if there is a failure of common sense at human level and an apparent inability to act effectively on what seems to have been an obvious set of red flags.” The case also underlined the lack of sophistication of some financial crime: “The absolute brass neck of people who were willing to bring so much cash for laundering into a bank branch and hand it across the counter in plastic bags reminds us that a great deal of crime happens in plain sight,” said Mark Mullen, chief executive of Atom Bank.

Depends who's staffing the branch. Thats the West Midlands for you.

[Ma2]

26 minutes ago, Starsend said:

What rate did you get? 

2.29%

No-where near as good as yours but wanted the full 10 years and with no repayment charges after 5 years that was the clincher for me.

[HousePriceMania]

Surprised no one said this here....

 

 

[AWW]

https://www.seba.swiss/media-and-investors/media-and-investors/seba-bank-launches-landmark-first-regulated-gold-token-to-enable-digital-ownership-of-physical-gold

This sort of thing has the potential to massively increase physical gold buying. It makes buying physical gold as easy as buying crypto. And it's totally different to an ETF - to sell the token, you have to own the gold.

[Starsend]

3 minutes ago, Ma2 said:

2.29%

No-where near as good as yours but wanted the full 10 years and with no repayment charges after 5 years that was the clincher for me.

2.29% will look like genius in a few years time.

[Gin]

14 minutes ago, AWW said:

https://www.seba.swiss/media-and-investors/media-and-investors/seba-bank-launches-landmark-first-regulated-gold-token-to-enable-digital-ownership-of-physical-gold

This sort of thing has the potential to massively increase physical gold buying. It makes buying physical gold as easy as buying crypto. And it's totally different to an ETF - to sell the token, you have to own the gold.

Oh I do like that idea . A back door to a new gold standard eventually .?  In Gold we trust .

[jamtomorrow]

On 14/12/2021 at 10:59, Axeman123 said:

Cheers for that, it rather fits with my impression that it all started too early and then burned out this time around.

I am sure the proliferation of Alt-pumps etc also dispersed the buying too widely to push BTC up as much as previous cycles.

Finally got to a desktop. Here's the full history (doesn't go back beyond 2017).

The different colour bands represent transactions waiting at different BTC fee rates. So higher fees in the 2017 bull *but* BTC price in USD was lower - would love to see this chart with fees in M2  

[Ma2]

27 minutes ago, Starsend said:

2.29% will look like genius in a few years time.

Depends on what happens to Coventry Building Society...

At the end of the affordability discussion the guy asked me if I had any questions and I said yeah "what happens if you can no longer afford my mortgage?" 

Needless to say he didn't have an answer. I hope it's ringfenced.

I can't have it both ways, I was angry with the government bailing people when cheap energy providers went bust when I got a fix to 2024 with an energy producer (Shell), but would be quite happy if my mortgage stayed the same if Coventry went bust!

[MrXxxx]

2 hours ago, HousePriceMania said:

If they had gone to 0.5% or better 1% it would have send out a clear message, therefore the message is clear, business as usual.

Agree, and first opportunity they will drop it back down as they did before.

[Democorruptcy]

3 hours ago, WICAO said:

Hi everyone

Some of you may remember me from TOS.  Given that I'm in the process of building a home HPC is no longer a relevant forum.  So in search of a new home I've been accepted here by the looks of it.  Came here for this great thread even though my investing style is a little different and currently working for me.

Welcome and nice timing. I posted a link to your recent update in here yesterday.

[JMD]

If looking for divi payers this screener provides a quick way to find them, or to research high paying sectors, etc. as can search on different sectors, etc. Looks accurate to me but do double check the numbers before buying!                                                                                                    http://www.dividendsranking.com/industry-Telecommunications.html

[MrXxxx]

2 hours ago, Starsend said:

I ended up with a five year fix from one of the big lenders at 0.99%. They paid the legal costs and the valuation cost. There was a fixed fee of £750 which was all I had to pay. The process was easy.

Don't know how much you borrowed [and don't need to know], but borrowing money at <1% for five years seems to me like a 'no brainer'...the only hazards I could see is that the lender could recall at anytime so

1. you may end up as a forced seller will lower capital value if the market was against you.

2. Your investment in a company could go to the wall.

That said, the sensible thing would be to be diversified thus avoiding [or limiting] the downside whilst gaining the upside.

[JMD]

4 hours ago, WICAO said:

Hi everyone

Some of you may remember me from TOS.  Given that I'm in the process of building a home HPC is no longer a relevant forum.  So in search of a new home I've been accepted here by the looks of it.  Came here for this great thread even though my investing style is a little different and currently working for me.

Welcome. I'm intrigued, what is your 'different' investing style? (i'm being nosey, so you don't have to answer!?)

[Starsend]

4 minutes ago, MrXxxx said:

Don't know how much you borrowed [and don't need to know], but borrowing money at <1% for five years seems to me like a 'no brainer'...the only hazards I could see is that the lender could recall at anytime so

1. you may end up as a forced seller will lower capital value if the market was against you.

2. Your investment in a company could go to the wall.

That said, the sensible thing would be to be diversified thus avoiding [or limiting] the downside whilst gaining the upside.

Agreed, complete no brainer. Inflation will smash the amount I owe down over the next five years while the stuff it's invested in will hopefully keep pace with inflation and provide some decent income. Always a bit of a gamble but I'm fairly certain the downside risk is limited and the upside pretty big over a five year time frame. Will be laddering over at least a year. Anything not invested will be in premium bonds temporarily which pays about 1%.

I didn't like re-mortgaging my home and wouldn't have done it if I didn't have alternative funds to pay it back at any time.

[ThoughtCriminal]

South park on crypto 😂

[Heart's Ease]

Welcome @WICAOto the basement. Great to see you here and that all is good. A thousand thanks for all the work you put into your blog (you got me on the way with my SIPP in 2014/15).  Look forward to hearing more. 

 

[spygirl]

Mistress Chamoisface comedy continues.

ECB to exit pandemic QE programme as inflation soars

Central bank cushions impact by boosting other bond-buying scheme as Omicron spreads

https://www.ft.com/content/03a30484-b265-4a88-a861-de1784305d40

The European Central Bank has decided to scale back its huge crisis stimulus, announcing its €1.85tn pandemic-response programme will end net purchases in March, but also promised to keep buying bonds for much of next year under a separate scheme.

The central bank said on Thursday that its Pandemic Emergency Purchase Programme (PEPP), launched last year to counter the financial impact of the coronavirus crisis, would lower its pace of net purchases in the first quarter of next year and then halt them in March.

Turkey *lowers* rates, lira plunges.

All Germans, Brits otehr Northern EUers avoid EU holidays, plunging Italy, Spain and France into deeper economic shit.

Im guessing the informal weekly call with the Fed has scared he pants off BoE and now ECB.

 

 

[Starsend]

6 minutes ago, spygirl said:

Mistress Chamoisface comedy continues.

ECB to exit pandemic QE programme as inflation soars

Central bank cushions impact by boosting other bond-buying scheme as Omicron spreads

https://www.ft.com/content/03a30484-b265-4a88-a861-de1784305d40

The European Central Bank has decided to scale back its huge crisis stimulus, announcing its €1.85tn pandemic-response programme will end net purchases in March, but also promised to keep buying bonds for much of next year under a separate scheme.

The central bank said on Thursday that its Pandemic Emergency Purchase Programme (PEPP), launched last year to counter the financial impact of the coronavirus crisis, would lower its pace of net purchases in the first quarter of next year and then halt them in March.

Turkey *lowers* rates, lira plunges.

All Germans, Brits otehr Northern EUers avoid EU holidays, plunging Italy, Spain and France into deeper economic shit.

Im guessing the informal weekly call with the Fed has scared he pants off BoE and now ECB.

 

 

Yippee! I want inflation now as I've joined in with the cheap money brigade.

I'll be in the 1% before I know it.

[JMD]

2 hours ago, HousePriceMania said:

They are renowned for the sane monetary policies.

What the *** are non-brits doing controlling the british monetary supply !!!

Thank god the tories are fighting the globalists.

Yip, from approx 0 to approx 0.

If they had gone to 0.5% or better 1% it would have send out a clear message, therefore the message is clear, business as usual.

'Thank God the Tories are fighting the globalists' you say?   (Really hope that's irony there housepricemania?!, I suspect that it is)                 ... Anyway, Mark Carney sends you his best!!