It is Obvious

Chris Rick has got altogether too much to say

Archive for June, 2015

Have you got to the top of the hills yet?

Posted by chrisrick13 on June 15, 2015

It is obvious: things are subtle
I’ve passed this on to a number of friends:

This is the definitive video on investing.

CNBC ran a poll of money people such as traders, brokers, advisers, money-market people, on the best safe-haven for their money.  The winner by a considerable margin was: under the mattress.

On CNBC they limit themselves to discussing Greece or they would be at it for all the programme.  They had a ‘Greece minute’ the other day.  I wonder how many people realise that there is a 1.7bn payment due at the end of the month and Greece is trying to get 1.7bn out of the aid package so that it…can pay back the people who leant it 1.7bn a while ago.

Every day that goes by sees the Greek economy shrinking.  Therefore it is daily reducing its chances of paying off its debts.  Yet they are negotiating a set of measures that Greece must undertake that will further cut its ability to repay debt in order for it to take on more debt.

It seems obvious to me and all the people I read who are not paid by some interest group for their opinion.

A lot of commentators are saying that it is a negotiating game to see who will ‘blink first’.  I think they are wrong.  Greece has the strong position.  Unless a fairy godmother comes along and gives Greece lots of money it will default its debt and the economy will crash even more than it has.  Any negotiated terms only delay that moment and the delay now cannot be long.  So for Greece it is crash unless the fairy godmother appears.  Might as well sit it out and see if one turns up.

The other side of the negotiating table knows that there is no fairy godmother so is just trying to get as much time as possible to prepare so that it can minimise the damage from a Greek default.  What can the ECB do to ease the pain?  Watch out for the start of a massive QE effort disguised as for another purpose.  That is a pre-cursor and should trigger you to prepare yourself.

Oh – it’s happened already…

It is obvious: things are subtle usually only to the perpetrators of that ‘subtlety’


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The grand old Duke of York

Posted by chrisrick13 on June 11, 2015

It is obvious: buy yourself a house

I notice that a lot of central banks are cutting their base rates (or equivalent).  Of course the MPC sets our interest rates and the MPC and is beyond political influence.

A lot of the cuts are in economies that are growing with inflation on the up as well.  That used to be a sign that an interest rate increase was on the way.  Indeed in the UK there would be a media clamour if inflation and growth took off for an interest rate hike.  There would be all sorts of accusations about political timing and not the good of the economy.  In the US they look at the entrails of Janet Yellen’s words.  The language is heavily encoded but there is no code book.

I could go on about how poor the system is at the moment.  Were I a conspiracy theory proponent I would be looking into what the real story is.

It does not make sense to cut a base rate in a growing economy.  We did that 6 years ago to save a depression.  Does that mean we can expect one now?

When you cannot explain someone’s actions with the information you do have then you are missing information.  Any attempt to work with the information you do have to get to the result is just a guess.

Therefore something is happening.  I wonder what it is?

How about this: house prices in Mayfair are down 22% from their peak and 16% down in Chelsea.  (Not heard that trumpeted on the news much.)  A lot of the people living in those areas are ‘well connected’.  Perhaps I’ll get my credit card ready to pick up a mansion in Chelsea any day soon.

It is obvious: buy yourself a house – just the one (and a shotgun)

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Watch out there are idiots about

Posted by chrisrick13 on June 10, 2015

It is obvious: the Conservative party is in safe hands

On the radio there were two good items today.  First was a recording from before the election.  It was a public debate of some sort where the people on stage had to answer a question.  The catch was that the only permitted answers were ‘yes’ or ‘no’.  The Conservative, Lib-Dem, UKIP and another all answered ‘Yes’ or ‘No’.  I think it was about a benefit cap.  Andy Burnham would not give a yes/no.  Yvette Cooper (Balls) talked about reform but refused a yes/no.

It is unfair as some questions are complex and a simple yes/no is not easy to do.  However many of them are and they only get weasel answers…from Labour.  The approach I suggest is to say that a yes/no will mislead either way and then toss a coin.

The other item was a Labour representative asked about budget surplus when the economy was growing.  His response was that we had to invest to get growth.  Have it in mind that growth of just 2% doubles this economy in 35 years which clearly will not happen.  ‘Investing in infrastructure’ will get little growth.  However something such as HS2 will take 20 years to build.  How long before it pays for itself?  A hundred years if ever.  Also have it in mind that every railway company in this country has gone bankrupt.

Think now about your mortgage (sic).  You have £100,000 and are paying 7% so your interest bill every month is £580.  Supposing that you can pay that.  When interest rates drop to 3% you are paying £250 a month.  Do you double your payments and take 10 years off the length of your mortgage and have a slap-up meal in a restaurant every month or double your mortgage.

The Labour guy said that we should double our mortgage as money is so cheap.  It is obvious that Labour just cannot stop themselves borrowing with no thought to their children and their children.

Just to even things up David Cameron said today that they were taking poor people out of taxation.  So why has he not got rid of NIC?  Idiot.  Nobody picked him up on it.

It is obvious: the Conservative party is in safe hands – it’s called the Labour party

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