Double-dip!

[twinkletoes]

Well I've tried to explain it to you but you won't listen.

The UK wants the meeting to go well on Thursday. The UK and US markets want it to go well (up 1.5% since his words), only you could try and make it a negative.

You are telling me what the text books say not what the reality is.

When the US lost it's AAA+ status yields went down instead of up.

 

[Challenger1978]

The govt says we have maxed out our credit card. Thats an analogy i dont agree with, as the country is not a household and is not subject to the same restraints.

Now take the govts household view and you borrow against assets generally, then i think what is happening is strange.

Household UK has enormous assets, yet a small amount of debt set against them. There has never been a been a better time to borrow as interest rates are so low.

If it was your house would you starve because you thought it was right to pay back your credit card or would you borrow to pay off the credit card and create income. The BoE is doing that through QE after all.

You're so naive at times rascal you would think you were an idealistic kid that doesn't know any better.

The UK national debt is the total amount of money the British government owes to the private sector and other purchasers of UK gilts.

Public sector net debt was £1,038.3 billion at the end of June 2012, equivalent to 66.1% of GDP
Source: Office National Statistics publications[1] (page updated July 25th, 2012)

If all financial sector intervention is included (e.g. Royal Bank of Scotland, Lloyds), the Net debt was £2311.6 billion (147.3 per cent of GDP. This is known as the unadjusted measure of public sector net debt.

Public sector net borrowing (PSNB – annual deficit) was £125.7 billion for 2011/12;£143.2 billion or 11.% of GDP.
The equivalent OBR forecast for 2011/12 is £122 billion.

Then there's this.

It is estimated gross government national debt will could rise close to 100% of GDP by 2015. It is way above the government’s sustainable investment rule of 40% maximum.

So we're looking at the national debt being 100% of GDP in just 3 years time and we will still have a big structural deficit.

These graphs show that government debt as a % of GDP has been much higher in the past. Notably in the aftermath of the two world wars. This suggests that UK debt is manageable compared to the early 1950s. (note, even with a national debt of 200% of GDP in early 1950s, UK avoided default and even managed to set up the Welfare State and NHS. However, in the current climate, the UK wouldn’t be able to borrow the same as in the past. For example, private sector saving is lower, US wouldn’t give us big loan like in 1950s.See more at:

The money just isn't there to borrow not only that but if you know anything about history. You'll know it was very touch and go we got those massive loans of the US in the past and they were in a much better financial state back then than they are now.

As for you're comments about interest rates what do you think is going to happen to those interest rates if we pull out the credit card again and start spending. Do you really think the bond market is going to just sit there with their collective thumbs up their arses and not react to the situation ?

One last thing.

Compound interest is interest that is paid on both the principal and also on any interest from past years. It’s often used when someone reinvests any interest they gained back into the original investment. For example, if I got 15% interest on my $1000 investment, the first year and I reinvested the money back into the original investment, then in the second year, I would get 15% interest on $1000 and the $150 I reinvested. Over time, compound interest will make much more money than simple interest. The formula used to calculate compound interest is:

M = P( 1 + i )n

M is the final amount including the principal.

P is the principal amount.

i is the rate of interest per year.

n is the number of years invested.

Applying the Formula

Let's say that I have $1000.00 to invest for 3 years at rate of 5% compound interest.

M = 1000 (1 + 0.05)3 = $1157.62.

You can see that my $1000.00 is worth $1157.62.

Compound interest is what is really going to fuck us long term unless we start to pull our finger out now.

 

[SWP's back]

Well I've tried to explain it to you but you won't listen.

The UK wants the meeting to go well on Thursday. The UK and US markets want it to go well (up 1.5% since his words), only you could try and make it a negative.

You are telling me what the text books say not what the reality is.

When the US lost it's AAA+ status yields went down instead of up.

And you know the "reality" how? What suddenly means you have become savvy in the bond markets? You started trading now?

And US bond yields fell as the US will never fail. It's the worlds currency. You are buying safe and secure money with the dollar.

The UK doesn't have that luxury.

Tell me this though twinky, do you think the UK wants the meeting to go well on Thursday or not? (The markets are now up nearly 2.5% since the announcement from the ECB - why do you think that is?)

 

[twinkletoes]

Well I've tried to explain it to you but you won't listen.

The UK wants the meeting to go well on Thursday. The UK and US markets want it to go well (up 1.5% since his words), only you could try and make it a negative.

You are telling me what the text books say not what the reality is.

When the US lost it's AAA+ status yields went down instead of up.

And you know the "reality" how? What suddenly means you have become savvy in the bond markets? You started trading now?

And US bond yields fell as the US will never fail. It's the worlds currency. You are buying safe and secure money with the dollar.

The UK doesn't have that luxury.

Tell me this though twinky, do you think the UK wants the meeting to go well on Thursday or not? (The markets are now up nearly 2.5% since the announcement from the ECB - why do you think that is?)

You havent done your UEFA badges but you comment on football.

The Thursday meeting will either be a game changer or a massive let down.

Judging by the last 18 meetings I dont hold out too much hope.

 

[SWP's back]

You are telling me what the text books say not what the reality is.

When the US lost it's AAA+ status yields went down instead of up.

And you know the "reality" how? What suddenly means you have become savvy in the bond markets? You started trading now?

And US bond yields fell as the US will never fail. It's the worlds currency. You are buying safe and secure money with the dollar.

The UK doesn't have that luxury.

Tell me this though twinky, do you think the UK wants the meeting to go well on Thursday or not? (The markets are now up nearly 2.5% since the announcement from the ECB - why do you think that is?)

You havent done your UEFA badges but you comment on football.

The Thursday meeting will either be a game changer or a massive let down.

Judging by the last 18 meetings I dont hold out too much hope.

But you agree that "we" want it to go well. Eurobonds and a calming down of the Eurozone would be a great boost for us.

 

[twinkletoes]

And you know the "reality" how? What suddenly means you have become savvy in the bond markets? You started trading now?

And US bond yields fell as the US will never fail. It's the worlds currency. You are buying safe and secure money with the dollar.

The UK doesn't have that luxury.

Tell me this though twinky, do you think the UK wants the meeting to go well on Thursday or not? (The markets are now up nearly 2.5% since the announcement from the ECB - why do you think that is?)

You havent done your UEFA badges but you comment on football.

The Thursday meeting will either be a game changer or a massive let down.

Judging by the last 18 meetings I dont hold out too much hope.

But you agree that "we" want it to go well. Eurobonds and a calming down of the Eurozone would be a great boost for us.

I think the whole world wants it to go well.

If France can accept greater integration and Germany can accept the mutualisation of debt then it will happen but right now they dont so who knows.

 

[twinkletoes]

All Euroepan indices are in the red after Draghi's press conference.

 

[SWP's back]

All Euroepan indices are in the red after Draghi's press conference.

Means nothing mate.

For example, the FTSE was up 1.31% yesterday and it's down 0.59% today so it's a net gain on the two days.

If there were panicky, you would expect to see a far bigger sell off (2-3% atleast).

 

[twinkletoes]

All Euroepan indices are in the red after Draghi's press conference.

Means nothing mate.

For example, the FTSE was up 1.31% yesterday and it's down 0.59% today so it's a net gain on the two days.

If there were panicky, you would expect to see a far bigger sell off (2-3% atleast).

It's obvious nobody was really impressed with what he said.

IBEX and MIB down by 4 and 3 percent.

 

[SWP's back]

All Euroepan indices are in the red after Draghi's press conference.

Means nothing mate.

For example, the FTSE was up 1.31% yesterday and it's down 0.59% today so it's a net gain on the two days.

If there were panicky, you would expect to see a far bigger sell off (2-3% atleast).

It's obvious nobody was really impressed with what he said.

Yeah but they aren't too disheartened either which is no bad thing.

If they thought nothing will happen then one would expect the 3% gain seen since last friday would have evaporated. Never know, they may sell off further before the days out and drop another % or two.