Cold Light of Day...

[jonah]

• UK National debt is about 43% of GDP
  

A debt of 43% of GDP isn't bad

 

43% my arse, you've fallen for the usual NuLabour spin there GM! When Gordon Brown gives his "43% of GDP" (£645 billion) soundbite to today's dumb journos, he conveniently forgets to include:

 

* Public Pensions Liability = £1,000 billion

* Bank bail-outs = £500 billion and counting

* Bradford & Bingley bail-out = £30 billion

* Private Finance Initiatives = £100 billion

* Network Rail liability = £20 billion

 

Not to mention our personal debt which now stands at a staggering £1,500 billion. That gives a total debt of nearly £4,000 billion, not £645 billion that Brown claims - that's £155,000 per household, how will we ever pay that back? But then you also need to add on another £2,300 billion in corporate debt for a true "external debt" figure (as defined by the IMF) to give a gross debt of over 400% of GDP:

 

http://www.spectator.co.uk/article_images/articledir_6156/3078296/1_fullsize.bmp

 

France is in second place and not looking too hot, but UK PLC is far far more screwed. And the reason we're totally screwed is because unlike the French the vast majority of that is short-term debt:

 

http://www.spectator.co.uk/article_images/articledir_6156/3078296/2_fullsize.bmp

 

Who wants to buy that debt with sterling plummeting? We will end up either paying exhorbitant rates to the Arabs/Chinese and a timeless indebtedness, or there will have to be an IMF bail-out - apocalypse now. There's never been a worse time for Saints to be in financial trouble.

[Guided Missile]

43% my arse, you've fallen for the usual NuLabour spin there GM! When Gordon Brown gives his "43% of GDP" (£645 billion) soundbite to today's dumb journos.

Actually, the justification to post that France is in a worse financial state than us, with regard to their national debt, came from figures compiled by the CIA in their Factbook, not dumb journos. A selection of national debt data is shown below. France's debt does not include their massive civil service pension obligations that, at some time in the future, may become payable.

 

 

 

 

 

 

 

Country Public debt(% of GDP) Date

1. Japan 170.00 2007 est.
   
2. Italy 104.00 2007 est.
   
3. Greece 89.50 2007 est.
   
4. Belgium 84.60 2007 est.
   
5. Norway 83.10 2007 est.
   
6. Hungary 67.00 2007 est.
   
7. Germany 64.90 2007 est.
   
8. Canada 64.20 2007 est.
   
9. France 63.90 2007 est.
   
10. Portugal 63.60 2007 est.
    
11. United States 60.80 2007 est.
    
12. Austria 59.10 2007 est.
    
13. Netherlands 45.50 2007 est.
    
14. Switzerland 44.20 2007 est.
    
15. United Kingdom 43.60 2007 est.
    
16. Poland 43.10 2007 est.
    
17. Sweden 41.70 2007 est.
    
18. Spain 36.20 2007 est.
    
19. Denmark 26.00 2007 est.
    
20. Ireland 24.90 2007 est.
    

It is interesting to note that the criteria for membership of the ERM requires public debt to be no more the 60% of GDP. Belgium got special dispensation. Italy don't care and Greece is rioting, with Hungary going to the IMF for a loan...

 

The other figures you include, namely...

 

* Bank bail-outs = £500 billion and counting

* Bradford & Bingley bail-out = £30 billion

* Private Finance Initiatives = £100 billion

* Network Rail liability = £20 billion

 

can hardly be construed as national debt at this stage, as much of the money is in the form of secured repayable loan gaurantees, loans (at 12% p.a.) or share capital.

 

 

Another interesting article:

 

By Henry Samuel in Paris

Last Updated: 1:33AM BST 25 Sep 2007

French PM Francois Fillon

France is bankrupt and can no longer afford to pay its workers generous salaries and subsidies, its prime minister has declared.

 

Francois Fillon made the undiplomatic outburst during a trip to the French island of Corsica, where farmers were demanding more government money.

"I am at the head of a state that is in a position of bankruptcy," he said.

"I am at the head of a state that for 15 years has been in chronic deficit. I am at the head of a state that has not once passed a balanced budget in 25 years. This can't go on."

 

I made the point about France, in response to a bitter ex-pat from France who had spiteful words to post about English tourists in BMW's, who he has never met, assuming that this forum was similar to the sad bars he frequents with other ex-pats, where they all moan about the old country.

 

I happen to think that a country that ended the second world war, after helping liberate France, with a national debt of over 150% of GNP and with many cities, like Southampton, flattened by years of bombing, has done quite well to get to the debt level we are at.

 

I also happen to think that since the French revolution, which was caused by the level of the French national debt, the French government and population has learnt nothing about living within their means. Still, obviously none of the population cares as they continue to get generous state assistance that they can't afford...

Edited 15 January, 2009 by Guided Missile

[trousers]

[JohnnyFartPants]

 

I just spat coffee out when I saw that.

[trousers]

I just spat coffee out when I saw that.

 

Coffee? Could have been worse...

[Window Cleaner]

[*]

P[/i]

I made the point about France, in response to a bitter ex-pat from France who had spiteful words to post about English tourists in BMW's, who he has never met, assuming that this forum was similar to the sad bars he frequents with other ex-pats, where they all moan about the old country.

 

 

 

...

 

 

 

Of course I've met the said tourists, how do you think I got to talk to them and know of their debt problems. I have to talk to them about other things,most of them just like talking about thier problems.

NB I don't drink in bars or frequent other ex-pats. Sorry to disappoint you.

 

I am totally Francified, TSW is my only contact with the UK (other than the tourists of course)

[JohnnyFartPants]

Of course I've met the said tourists, how do you think I got to talk to them and know of their debt problems. I have to talk to them about other things,most of them just like talking about thier problems.

NB I don't drink in bars or frequent other ex-pats. Sorry to disappoint you.

 

I am totally Francified, TSW is my only contact with the UK (other than the tourists of course)

 

All well and good living in France and fair play to you. Do you find that the locals don't buy soap very often and is the term "cheese eating surrender monkey" still okay to use in their direction?

[jonah]

GM, those CIA figures are 1 or 2 years out of date, mine were from last month and the gross figures do take account of pension liabilities which is why France is 2nd behind the UK but still nowhere near as bad as us. Whilst you state that those additional figures "can't be construed as national debt at this stage", I'm going by the IMF definition of gross external debt which I think is the recognised definition in the City. And the fact remains that the UK has more debt payable in the next 12 months than France owes in its entirety. Both are stuffed on pensions, and both need massive public sector culls and pension reductions - a big problem trying to agree that with the unions here, an even bigger one in France... but if the IMF come in their policy is to savagely cut public sector jobs without compensation.

 

None of which means France isn't up sh!t-creek, it's just not as far up it as the UK.

[Window Cleaner]

All well and good living in France and fair play to you. Do you find that the locals don't buy soap very often and is the term "cheese eating surrender monkey" still okay to use in their direction?

 

Don't know about the soap, most of them are pretty clean nowadays.

CESM will probably be OK though, they wouldn't understand anyway.

[Guided Missile]

Of course I've met the said tourists, how do you think I got to talk to them and know of their debt problems. I have to talk to them about other things, most of them just like talking about thier problems.

 

I assume you mean these "said tourists":

 

It was obvious to anyone who talked to some of the holiday oiks that we get here in France that they were living way way above their means funded by credit.Stupid people with IQs of about 0.5 driving BMW 4x4s obtained on credit but with mortgage arrears totting up.

 

I can see that France has really mellowed you....:smt044

[Window Cleaner]

GM, those CIA figures are 1 or 2 years out of date, mine were from last month and the gross figures do take account of pension liabilities which is why France is 2nd behind the UK but still nowhere near as bad as us. Whilst you state that those additional figures "can't be construed as national debt at this stage", I'm going by the IMF definition of gross external debt which I think is the recognised definition in the City. And the fact remains that the UK has more debt payable in the next 12 months than France owes in its entirety. Both are stuffed on pensions, and both need massive public sector culls and pension reductions - a big problem trying to agree that with the unions here, an even bigger one in France... but if the IMF come in their policy is to savagely cut public sector jobs without compensation.

 

None of which means France isn't up sh!t-creek, it's just not as far up it as the UK.

 

 

Thanks for that Jonah. I was only ever talking about personal debt though.

No I don't know everybody in France but most of those that I do know are pretty prudent about personal debt. we have flash bastards as well,although a lot of BMWs and Audis are owned by drug dealers nowadays, it's their trade badge. It would be general unthinkable to most common or garden french people to remortgage their home to go on holiday or for a bigger flashier car.They know that sooner or later there will be drastic government spending cuts and they like to stow away a bit for the future.

Now take "student loans".Most HE students are either financed by parents,

receive a small "bourse" or grant (dependant on parents income) or they work a bit. University inscription costs about £150 per annum.You can obtain

a "pret etudiant" from 2 banks, but the maximum is 2217 euros per year.

Nobody comes out of the HE system with 15K or 30K debt, parents have to face their responsibilities on that one.It's one of the big differences in the 2 countries, parents have to take resposibility for their kids,even the big ones. You juqst can't cut them off with nothing,nor can you refuse to aid your

parents in later life.It can happen to anyone so most people are fairly prudent about personal debt. No-one would buy a football season ticket on the never never.Not necessary, you can usually pay on the day, it's not overly expensive.

[Guided Missile]

GM, those CIA figures are 1 or 2 years out of date, mine were from last month....

 

I used this as a secondary source:

 

"Public sector net debt, expressed as a percentage of Gross Domestic Product (GDP), was 44.2 per cent at the end of November 2008, compared with 43.1 per cent at end of November 2007. Net debt was £650.0 billion at the end of November, compared with £617.1 billion a year earlier.

 

The most recent figures for public sector net debt excluding financial sector intervention are for September 2008, when net debt was £562.6 billion (38.3 per cent of GDP)."

There's nothing else for us to do now, though. We're just going to be forced to ask Um Pahars who is right....

[dubai_phil]

Being fair to the concept WC was trying to get over, in the past 4 or so years we had a massive influx of Brits charging in here and buying up holiday homes, homes to let and just generally spending money.

 

The number of times you would hear them in a restaurant or at a dinner party, leveraging this, twisting that and then talking about having half a million of debt on their properties. but it doesn't matter luvvie because of course the inflation wipes that all out...

 

They blinged up this place, they rubbed their new Porsches in our faces.

 

And now they leave the cars in the Airport Car Park with the keys in the ignition as they run back home.

 

The world went very crazy and it is us poor b*ggers at the bottom of the pile who feel the pain and get the mess to clear up. cannot see many of the bankers & politicians who led us all into this mess losing out on their retirement savings somehow.

 

Unless the world turns into Zimbabwe's economic miracle with Hyperinflation making the debts worthless, how the heck is it all going to get paid back, by the banks, the Governments and the People

[Guided Missile]

None of which means France isn't up sh!t-creek, it's just not as far up it as the UK.

I know most of the readers of this exchange may be bored, but as usual, I enjoy our exchanges. The scary figures you quote are from this link, I assume. I think the author tries to confuse gross external debt with net external debt, which I think is disingenous. The reason is that for many years, the UK have been second, only to the US, in regard to total foreign investments and ahead of Japan and Germany. We have punched above our weight for years in this regard and it is not suprising that due to the large scale of foreign investments, we have associated debts. What the figures do not include are the associated foreign assets held by UK entities. The net figure is a better indicator of our foreign indebtedness.

Simply put, if I have €150,000 in cash deposits in Germany and I have borrowed €100,000 against these deposits, you can hardly say I am €100,000 in debt.

 

Isn't this right?

Edited 15 January, 2009 by Guided Missile

[jonah]

I used this as a secondary source:

 

Well that's a bit better, but you're still choosing to ignore the gross debt position which the IMF have clearly defined whilst choosing to believe the government's own numbers. You'll be telling me that the CPI figures are a fair relflection of inflation next ;-)

 

There's nothing else for us to do now, though. We're just going to be forced to ask Um Pahars who is right....

 

Sorry, the dog ate my economic forecasts.

 

cannot see many of the bankers & politicians who led us all into this mess losing out on their retirement savings somehow.

 

I dunno, the big cheeses at the banks take a vast swathe of their pay in shares and options - thousands of bankers at Lehmans saw share savings and pensions go up in smoke... some senior execs close to retirement saw millions in their pension funds reduced to nothing, they literally lost everything. They like many others saw banks as impregnable. We have had 20% rate cuts at my bank, 10% redundancies, 50 traders kicked out in my area on the spot a few weeks back. And there are a hell of a lot of people who put all their bonuses into BTL property - as prices and rents start to fall they are all really in the sh!t too. As for the politicians, NuLabour were brought to power by housing developers and senior Labour ranks are all heavily invested in BTL - that is why the government has gone to extreme lengths to keep the housing bubble inflated at the cost of the economy and the country's financial future. All we can hope is that they don't start printing money to inflate away the debts of the greedy and further penalise the prudent!

[Legod Third Coming]

Barclays wrote to me yesterday offering my business a pre-approved £25k loan.

 

I'm thinking of taking it and spunking it all on Saints shares.

 

Which will give them a reason not to pull the plug and also teach them that what they did is WRONG, WRONG, WRONG with a capital W.

 

Because when they say? What did you do that for? I'll say, because that's all you've done for 15 years - bought the debt you had already lent because you were firking stupid and were more interested in making money than a contribution to society.

 

T0ssers.

[saint1977]

I know most of the readers of this exchange may be bored, but as usual, I enjoy our exchanges. The scary figures you quote are from this link, I assume. I think the author tries to confuse gross external debt with net external debt, which I think is disingenous. The reason is that for many years, the UK have been second, only to the US, in regard to total foreign investments and ahead of Japan and Germany. We have punched above our weight for years in this regard and it is not suprising that due to the large scale of foreign investments, we have associated debts. What the figures do not include are the associated foreign assets held by UK entities. The net figure is a better indicator of our foreign indebtedness.

Simply put, if I have €150,000 in cash deposits in Germany and I have borrowed €100,000 against these deposits, you can hardly say I am €100,000 in debt.

 

Isn't this right?

 

Not at all, it's a very interesting topic. I've been reading Robert Peston's book on the credit crunch recently and part of my degree was Economics although sadly that was a few years ago now!

[70's Mike]

blimey i thought i had logged on to the Economist

[saint1977]

Barclays wrote to me yesterday offering my business a pre-approved £25k loan.

 

I'm thinking of taking it and spunking it all on Saints shares.

 

Which will give them a reason not to pull the plug and also teach them that what they did is WRONG, WRONG, WRONG with a capital W.

 

Because when they say? What did you do that for? I'll say, because that's all you've done for 15 years - bought the debt you had already lent because you were firking stupid and were more interested in making money than a contribution to society.

 

T0ssers.

 

Did you see the BBC2 programme last night? It was a bit simplified for people that have been following this for years - Northern Rock's self-certificate mortgages had worried me sick for a long time - but for anyone trying to understand concepts like Securitisation for the first time, it was good. What became clear is that High St banks and Investment banks got their missions mixed up - the likes of Northern Rock got involved in creating very complex pick-and-mix Securities that had been the preserve of investment banks and the investment banks thought they could make a fortune gambling on buying and trading these "buckets" of high risk home owner debt. Of course, supposedly Blue Chip investment banks like Lehman Brothers ended up with too much of it and the risk shot up and confidence disappeared, along with most lending.

[Legod Third Coming]

Did you see the BBC2 programme last night? It was a bit simplified for people that have been following this for years - Northern Rock's self-certificate mortgages had worried me sick for a long time - but for anyone trying to understand concepts like Securitisation for the first time, it was good. What became clear is that High St banks and Investment banks got their missions mixed up - the likes of Northern Rock got involved in creating very complex pick-and-mix Securities that had been the preserve of investment banks and the investment banks thought they could make a fortune gambling on buying and trading these "buckets" of high risk home owner debt. Of course, supposedly Blue Chip investment banks like Lehman Brothers ended up with too much of it and the risk shot up and confidence disappeared, along with most lending.

 

 

When every man in the street thought you could only make a profit from buying property, you knew were we in trouble.

 

All that cheeses me off is that my missues refused to move when I told her to sell the house two years ago...

 

Of course, now she claims we might have put that money into an Icelandic bank...

 

And what's the government solution to too much debt? More... firking brilliant. When in a hole STOP DIGGING!!!

 

And today these idiots are building another runway at Heathrow - brilliant. Just what we need. To attract more bankers to London...

 

What happened to the days when you made something and sold it to someone who made their living making something that we wanted...

 

Oh yeah, now we have a government who believe stacking shelves is a career.

 

It's time for a revolution in this country. To oust the morons in power and replace them with common sense.

[Guided Missile]

Well that's a bit better, but you're still choosing to ignore the gross debt position which the IMF have clearly defined whilst choosing to believe the government's own numbers. You'll be telling me that the CPI figures are a fair relflection of inflation next ;-)

Jonah,

I think you should have read the comments on that highly misleading Spectator article you quoted, particularly this one, that I think is on the money:

 

AlexM

December 11th, 2008 6:23am

 

Sorry, Fraser. Far be it from me to defend the worst Prime Minister and (by a country mile) worst Chancellor of the Exchequer this country has ever had, but you're slightly wide of the mark here.

For a start, there is nothing remotely new or original about these data. They are a standard derivation from the International Investment Position (IIP) published quarterly by most countries according to IMF-defined standards. These ratios may not be widely known by the public (or journalists) but are common knowledge in the markets and should already be fully reflected in prices and exchange rates. I'm sure Michael Saunders will be flattered by your praise but this is very elementary stuff for a credit analyst.

Secondly, it is the net external debt ratio that is important. Quite a few developed countries have much larger external debt/GDP ratios than the UK but these liabilities are matched by liquid external assets. All countries with large international banking sectors *by definition* have outsized gross external liabilities (e,g, Switzerland, Luxembourg, Hong Kong, Singapore, Aruba, Cayman Islands, Malta, Cyprus, to name a few) but, of course, banks (however imperfectly) have to balance their liabilities with assets. In most cases, these countries are net external creditors. Some external assets will be dodgy US securities but, in the greater scheme of things, these are unlikely to be enough to affect national-level ratios.

As I am on holiday at the moment, I cannot furnish you with the detailed numbers but, off the top of my head, I believe the UK's net external debt is nearer 30% of GDP. Certainly it is not out of line with other G7 countries.

Indeed, Moody's and Standard & Poor's consider that external debt ratios are irrelevant from a credit perspective for countries with fully convertible reserve currencies and do not even quote them (Fitch Ratings do).

 

I must admit, you had me worried until I noticed the name of the financial genius of a credit analyst that constructed the graphs you linked. Michael Saunders from CitiGroup!!!! :smt044

 

I think he should concentrate more on Citigroup's external asset and debt position, assuming he's still in a job....

[Charlie Wayman]

Well, one theory of what is happening economically is that everyhting is unravelling irreversibly so everyone will lose their jobs within three years and everyone with a mortgage will be repossessed and nobody will be able to keep themselves warm or pay their council tax and only the government will have any money and not very much of it and the only food we'll get will be from soup kitchens on every street corner.

 

It is possible that the whole global financial system has been illusory from the start, has suddenly reached a tipping point and is now collapsing like a pack of cards simply because it was never sustainable at any level. It only stayed balanced upright by the act of constantly maintaining instability by feeding in more and more credit and now there is more world debt than world resource so credit has become meaningless as it is unsecured.

 

Oh sh*t, I think I'll give Doncaster a miss!

[St_Tel49]

Well, one theory of what is happening economically is that everyhting is unravelling irreversibly so everyone will lose their jobs within three years and everyone with a mortgage will be repossessed and nobody will be able to keep themselves warm or pay their council tax and only the government will have any money and not very much of it and the only food we'll get will be from soup kitchens on every street corner.

 

It is possible that the whole global financial system has been illusory from the start, has suddenly reached a tipping point and is now collapsing like a pack of cards simply because it was never sustainable at any level. It only stayed balanced upright by the act of constantly maintaining instability by feeding in more and more credit and now there is more world debt than world resource so credit has become meaningless as it is unsecured.

 

Oh sh*t, I think I'll give Doncaster a miss!

 

Thanks Charlie - you've made my weekend :-(

[Legod Third Coming]

Well, one theory of what is happening economically is that everyhting is unravelling irreversibly so everyone will lose their jobs within three years and everyone with a mortgage will be repossessed and nobody will be able to keep themselves warm or pay their council tax and only the government will have any money and not very much of it and the only food we'll get will be from soup kitchens on every street corner.

 

It is possible that the whole global financial system has been illusory from the start, has suddenly reached a tipping point and is now collapsing like a pack of cards simply because it was never sustainable at any level. It only stayed balanced upright by the act of constantly maintaining instability by feeding in more and more credit and now there is more world debt than world resource so credit has become meaningless as it is unsecured.

 

Oh sh*t, I think I'll give Doncaster a miss!

 

 

But don't you see - this is perfect.

 

Who will come around to repossess your home?

 

A bank? Right. They'll all be bust.

 

The government? Right. They'll be no tax revenue. Would you work for nothing for them? Me neither.

 

So whom??

 

Answer - no-one. Because the whole lot of capitalism has fallen apart.

 

So, stay put, do what you want and put your feet up.

 

Because in three years it will be like 'survivors'.

 

We'll be back to self-sufficiency, living for the day and loving like there's no tomorrow.

 

Which is why the government want you to borrow more and more to prop up this lunacy.

 

Oh and plant some vegetables - varied if you want a mixed diet.

[jonah]

Sorry for the delay replying GM, I had used up my 3 posts ;-)

 

The scary figures you quote are from this link, I assume.

 

Well the figures I had were from an internal memo, but I can't give you a link to that so used the Citibank ref you found on the Spectator.

 

due to the large scale of foreign investments, we have associated debts. What the figures do not include are the associated foreign assets held by UK entities. The net figure is a better indicator of our foreign indebtedness.

 

Yes that's true to an extent as I'm sure there are offsetting maturing liabilities, and in fact the devaluing of the pound had raised their value too. But this is ignoring 3 very important issues IMO:

 

1. Gearing - yes we do have foreign assets for offsetting, but we are highly geared [trailing only Monaco, Switzerland and Ireland relative to GDP]. Like Northern Rock was highly geared, as were the Icelandic banks. And as we know, small movements in asset valuations can have a significant effect. Ordinarily not a problem for the financial centres, but these are not ordinary times. I'm not sure just what quality (or liquidity) those foreign assets will have, or how much they will net off given we run a trade deficit - we certainly don't have much gold left ;-)

 

2. What brought down Northern Rock, and could be our biggest headache in the next 12 months, is the disproportional amount of short term debt which needs rolling over. With UK CDS spreads high, that short-term debt is very expensive still - given the leverage pointed out in 1. that has a significant effect.

 

3. A large proportion of that gross external debt belongs to the banks - and who is having to bail out the banks? The government - so a large amount of that external debt is in the process of being transferred from corporate to government. Ordinarily this is probably a good thing given the government is less likely to struggle to re-finance or default, however the credit crisis is not restricted to corporates... how easily can we sell our national debt in devaluing sterling?

 

But this is all just arguing the severity of our situation - the original point was whether we are better or worse off than France... I still think we are worse off, maybe I've just been brainwashed by all the French people I work with.

[eelpie]

I thought the Tories recently claimed our national date was over 51% of GDP.

[slickmick]

I know most of the readers of this exchange may be bored

 

Your giving Frank Cousens a run for his money.

[Guided Missile]

Sorry for the delay replying GM, I had used up my 3 posts ;-)

 

But this is all just arguing the severity of our situation - the original point was whether we are better or worse off than France... I still think we are worse off, maybe I've just been brainwashed by all the French people I work with.

 

This is a normal response for someone that has adopted the main characteristic of the French, namely an inflated sense of national pride, despite all evidence to the contrary. :yawinkle:

 

On the subject of credit default swaps, I'm pretty sure that the German, French and UK government bonds are about as risk-free as any investment could be.

 

Now, if we talk about Irish, Greek, Portuguese, Spanish and Italian bonds, they are only slightly safer at the moment, than shares in Southampton Leisure plc. I'm sure your colleagues are watching those CDS's rise nearly as quick as unemployment rates in the City....(sorry about that one)

[Guided Missile]

Your giving Frank Cousens a run for his money.

At least I can spell "the"....

[The Rover]

At least I can spell "the"....

 

All I want to know is whether the FTSE100 is going to stay above 4000 this year. So if you could ask your friends for me GM and jonah I'd be most grateful.

 

If it's going any lower I'll be stuffing my mattress with £10 notes.

[Guided Missile]

All I want to know is whether the FTSE100 is going to stay above 4000 this year. So if you could ask your friends for me GM and jonah I'd be most grateful.

 

If it's going any lower I'll be stuffing my mattress with £10 notes.

One of the more amusing things to come out of the present situation is that my missus was very upset 3 years ago when I bought a new Range Rover. She said I should have invested the money instead. My bank manager at Barclays agreed with her, but luckily, I ignored both of them.

The car has depreciated less in three years than Barclay's shares have in the last 12 months.....:smt044

 

Come to think of it, Southampton Leisure shares have performed better than Barclay's have....

 

So my advice is to go out and buy something that will cheer you up and help shorten the recession. Saving is for the Japanese and they have the highest suicide rate in the world.

[The Rover]

Very tempting GM but I don't think it's a bad idea to have a pension fund in some shape or form. I don't want to have to join Tescos fleet of geriatric delivery drivers in order to make ends meet in the years to come.

 

I'm still intending to splash out on a decent long haul foreign holiday this year though!

[Guided Missile]

Very tempting GM but I don't think it's a bad idea to have a pension fund in some shape or form.

On a serious note, I didn't mean buy something you will enjoy, that will not have a chance of increasing in value. I really think that equities at the moment are too risky and bonds and gilts just won't give adequate returns to fund retirement. My gut feel is that now is the time to buy art, antiques and if you can stretch to it, UK property in prime locations. You can enjoy the art and antiques, rent the property out and you must be able to get a better return than the banks are offering.

 

As far as pension funds, they've done their b***** in over the last year or so and I can't see that changing...

[ItchenRob]

But with 40% tax relief to a higher rate taxpayer very close to money for nothing even if you only put it in a cash fund.

 

What has this got to do with Saints I ask myself !

[Frank's cousin]

Your giving Frank Cousens a run for his money.

 

Harsh....;-(

[jonah]

Now, if we talk about Irish, Greek, Portuguese, Spanish and Italian bonds, they are only slightly safer at the moment, than shares in Southampton Leisure plc. I'm sure your colleagues are watching those CDS's rise nearly as quick as unemployment rates in the City....(sorry about that one)

 

Ahhh GM, you know more about CDS's than 90% of the people I work with and that's our area! Well with Ireland, Greece, Portugal and Spain on credit watch they are unsurprisingly high. What will be interesting is to see if any of them get downgraded below A- rating by S&P (temporarily lowered to BBB-) which would exclude their sovereign debt from acceptance by the ECB (oh dear).

 

Meanwhile a good round of redundancies will do the City no harm, there is a lot of dross at the moment and these culls clear a lot of it out.

 

On the subject of credit default swaps, I'm pretty sure that the German, French and UK government bonds are about as risk-free as any investment could be.

 

Ah well again I would disagree with you there, you cannot keep grouping the UK in with the less risky sovereigns. Markit shows the latest G7 spreads and the UK is twice as expensive to insure against as the US, Germany or France and three times as costly as Japan:

 

http://www.markit.com/information/news/commentary/cds.html

 

And we're deteriorating at the same pace as Italy which can never be a good sign. In fact, UK Ltd is considered more risky and therefore more expensive to insure against than corporates now... good article here:

 

http://uk.mobile.reuters.com/mobile/m/FullArticle/eUK/CSASUK/nStocksNews_uUKLNE4B805Y20081209?kw=qa?sym=.N225

 

...and a more tabloid version explaining Gordon Brown is riskier than Ronald McDonald here:

 

http://www.ifaonline.co.uk/public/showPage.html?page=ifa2006_articleimport&tempPageName=833976

[stevegrant]

Harsh....;-(

On who?

[eelpie]

 

Come to think of it, Southampton Leisure shares have performed better than Barclay's have....

 

So my advice is to go out and buy something that will cheer you up and help shorten the recession.

 

Don't tell everyone. We won't know if the next rise in SLH's share price will be PA returning or fans reading this GM.

[Frank's cousin]

At least I can spell "the"....

 

Even harsher!

 

Although he does not seem to know the difference between 'your' and 'you're' nor Cousens and cousin.... ;-)

[Dark Munster]

Being fair to the concept WC was trying to get over, in the past 4 or so years we had a massive influx of Brits charging in here and buying up holiday homes, homes to let and just generally spending money.

 

The number of times you would hear them in a restaurant or at a dinner party, leveraging this, twisting that and then talking about having half a million of debt on their properties. but it doesn't matter luvvie because of course the inflation wipes that all out...

 

They blinged up this place, they rubbed their new Porsches in our faces.

 

And now they leave the cars in the Airport Car Park with the keys in the ignition as they run back home.

 

The world went very crazy and it is us poor b*ggers at the bottom of the pile who feel the pain and get the mess to clear up. cannot see many of the bankers & politicians who led us all into this mess losing out on their retirement savings somehow.

 

Unless the world turns into Zimbabwe's economic miracle with Hyperinflation making the debts worthless, how the heck is it all going to get paid back, by the banks, the Governments and the People

 

I think you've answered your own question there.

[Dark Munster]

Well, one theory of what is happening economically is that everyhting is unravelling irreversibly so everyone will lose their jobs within three years and everyone with a mortgage will be repossessed and nobody will be able to keep themselves warm or pay their council tax and only the government will have any money and not very much of it and the only food we'll get will be from soup kitchens on every street corner.

 

It is possible that the whole global financial system has been illusory from the start, has suddenly reached a tipping point and is now collapsing like a pack of cards simply because it was never sustainable at any level. It only stayed balanced upright by the act of constantly maintaining instability by feeding in more and more credit and now there is more world debt than world resource so credit has become meaningless as it is unsecured.

 

 

[ottery st mary]

One of the more amusing things to come out of the present situation is that my missus was very upset 3 years ago when I bought a new Range Rover. She said I should have invested the money instead. My bank manager at Barclays agreed with her, but luckily, I ignored both of them.

The car has depreciated less in three years than Barclay's shares have in the last 12 months.....:smt044

 

Come to think of it, Southampton Leisure shares have performed better than Barclay's have....

 

So my advice is to go out and buy something that will cheer you up and help shorten the recession. Saving is for the Japanese and they have the highest suicide rate in the world.

 

I would watch out for that Bank Manager at Barclays...Very friendly with a lot of the wives.

[sadoldgit]

I was in hurry, so was unable to elaborate further.

 

Why do you think that underfunding the team with the aim of ensuring financial stability will really ensure the club does not go into administration, considering the quality of the football that will result, possibly even leading to relegation ?

 

Why is there a huge assumption on many sides that the fan will continue turning up and footing the bill for utter dross ?

 

I am adamant in my belief that relegation will lead to administration as sure as night follows day.

 

In effect, looking at our league position and the dwindling number of games left, I think the club has one foot in the grave already.

 

Sorry Alpine I just can't let this pass.

 

How long I have been calling you Victor Meldrew? Look at your last sentence! LOL

[so22saint]

But don't you see - this is perfect.

 

Who will come around to repossess your home?

 

A bank? Right. They'll all be bust.

 

The government? Right. They'll be no tax revenue. Would you work for nothing for them? Me neither.

 

So whom??

 

Answer - no-one. Because the whole lot of capitalism has fallen apart.

 

So, stay put, do what you want and put your feet up.

 

Because in three years it will be like 'survivors'.

 

We'll be back to self-sufficiency, living for the day and loving like there's no tomorrow.

 

Which is why the government want you to borrow more and more to prop up this lunacy.

 

Oh and plant some vegetables - varied if you want a mixed diet.

 

Exactly - if you live in the inner city I expect things to get very nasty over the next few years. If you live in the New Forest or a smaller town and have a decent sized garden I actually think standards of living might, in a way, go up in terms of not having to commute for hours, not having the stress of a ****e job that produces nothing (not that I have that problem), etc.

 

On the other hand, I don't know whether to buy a Land Rover or a horse.