It is Obvious

Chris Rick has got altogether too much to say

Archive for April, 2013

I’m too old to retire

Posted by chrisrick13 on April 10, 2013

It is obvious: save your money for a rainy day

Do you remember in the early years of ITV, come December 26th the adverts would almost entirely consist of holiday ads for a couple of weeks?  It used to annoy me…but I still watched.

There have been other time driven marketing onslaughts.  One of the recent ones was ISAs and before them PEPs and TESSAs.  Just before financial year-end there would be endless advertising exhorting you to use up the current year’s allowance.  Then after year-end another hard push to get you locked into a provider and to transfer money from your old PEP/ISA/TESSA.

Doing a transfer was and still is a smart move as the providers of these products drop the interest rates as soon as you are likely to be looking the other way.  It is despicable enough behaviour but what puzzles me is that there is not a huge public outcry.  Such is our collective apathy.

So if you are apathetic get out there and check your ISAs.  Move them to get a better rate.  There is no reward for loyalty.

Where to move your ISA?  That is easy, just surf the flood of adverts and pick the one with the best rate.  Unfortunately there were no adverts this year.  The providers of ISA products are just not interested.  Why is that?  Simply they can get all the money they need from government schemes.  That is assuming that they have entities that they care to lend money to and that are asking them for it.  They are not.  Add in that the government is increasing the amount it requires banks to hold against bad debts.  The only way the banks can do this is to stop lending.  Then loans that are being paid off are reducing their capital requirements.  They do have a problem though as all the ‘good loans’ are being paid off and no ‘good loans’ are being let to replace them.  The banks will soon have large amounts of lending that is only non-performing.  This is a euphemism for a loan that will never be paid back and on which no interest is being paid.  Do you want to put your £1 into a bank that will lend it out 26 times when 24 of those borrowers will spend it and run away?

In short the government is pushing down interest rates for savers – hard.  It is also pushing up inflation at the hardest rate possible without the population really realising it.  In addition it is pushing down the value of the pound.  I have to ask – why?  To any answer I’ll ask if it has worked yet and when they think it might.

It seems that if you are someone with some assets that might just be cash enough to see you through 6 months if you lost your job, have a mortgage that you have paid off metronomically for 15 years, and make few demands of the state then you are a target to pay for the excesses of the earlier years.  You are paying, and have paid, for the pensions of your parents.  You are funding the first 30 years of your children’s lives as they cannot get a job and have huge student loans outstanding.  There is little chance of getting a pension from the state that will do much for you.

Harold Macmillan was probably right in 1957: “most of our people have never had it so good”.  It is probably the case today.  The generation is alive that will have to pay for it all.

It is obvious: save your money for a rainy day – somebody else will need it then


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Seven days…

Posted by chrisrick13 on April 9, 2013

It is obvious: you can lie to all of the people all of the time

…and then some.

We will remove restrictions on bank withdrawals after seven days.  Was that over-optimism, over-enthusiasm, a mistake or simply a lie?  Seven days turns out to be a long time in Cypriot banking calendars.

What else happened the week before last…?  There was a bailout that would fix the problems in Cyprus.  This week the Cypriot government revealed that it does not have enough money in its reserves to pay salaries in April and needs money to avoid a default on some of its bonds.

So what was the £10bn about then?  Should it really have been £20bn but a strategy was adopted to ask for it in two bites?  If the history of Bankia and Greece are good models then Cyprus really needs £50bn.

It is obvious: you can lie to all of the people all of the time and do it time and time and time again

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Who benefits?

Posted by chrisrick13 on April 1, 2013

It is obvious: I like jam

I used to live in Nottinghamshire about a mile south of the Trent, just outside the city.  I used to watch Nottingham Forest play football quite a lot.  Less than a mile to walk there as the ground was also south of the river in the county.  It was, of course, called the City Ground.

North across the river within view of the City ground and in the city is the football stadium known as Meadow Lane.  As you might expect it is the home of Notts. County.  This ground is just to the south of what was the lace district.  Nottingham was famous for Boots, Raleigh bicycles, John Player tobacco and lace.  Boots is still big but the others are not there any more.  A bit further north of that is the district of St Anns.

As an innocent of South Notts there were plenty of places in the city that I would think twice about driving through on my motorbike and would certainly not walk in.  A shabby run down area of grubby terraced houses built in a previous century, St Anns was one of them.  Blighted economically by when all the industry disappeared.  Its people turned in a downward spiral lashing out at strangers.

I have no idea what it is like now in terms of a community.  However I have just seen several news packages today centred on St Anns.  New houses.  Landscaped walkways.  Painted railings.  Grass. A different place altogether.  Much money was spent there.  I hope that St Anns is regenerated and the people living there have hopes and futures.

What turned that destitute area into what it is today?  Money.  Whose money?  Mine…and yours.  I have no complaint.  It is probably a better use than I might have put it to.  Such is our system that the nation generates wealth and it is spread around.  Not an even spread.  There are lumps in the jam and if you have ever worked hard at it you will realise the difficulty of getting completely smooth coverage of your slice of toast.  You will have a mighty cold slice getting it perfect and in reality there will be little difference between the perfect and the less than perfect.  A quick broad swipe does it well enough.

So it is with benefits.  Get it out there fast, as even as possible with an efficient system.  Do not worry about the edges.  As the jar runs out you can still spread it and get taste with every bite, just not as much as the jam is thinner by then.  So if you are efficient with the knife and can get all the jam out then that is as good as it gets.

I hear the complaints that benefits are being cut and denying people…what they have become used to.  Those people at the margins are screaming loud as they move from margin to a worse existence.  Unable to get a job or unable to work they face an existence with not too many comforts or at least not as many as they have been used to.

So we can spread the jam as long as there are those able and willing to go out and buy it, but those are getting fewer in number by the day.

It is obvious: I like jam and I demand my fair share but who am I shouting at?

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