|
|
Post by yorkshireman on Mar 21, 2014 12:10:44 GMT
I still believe that you are taking a risk tying up money for 5 possibly even 3 years at current rates on, for example, Ratesetter, (that’s not a criticism of RS by the way, simply my personal investing strategy)
“Professionals” and “experts” may pontificate about rates but basically they’ve no idea and it’s mostly self serving bullsh*t that they’re preaching.
|
|
|
|
Post by davee39 on Mar 22, 2014 9:54:11 GMT
I still believe that you are taking a risk tying up money for 5 possibly even 3 years at current rates on, for example, Ratesetter, (that’s not a criticism of RS by the way, simply my personal investing strategy)
“Professionals” and “experts” may pontificate about rates but basically they’ve no idea and it’s mostly self serving bullsh*t that they’re preaching.
I agree entirely. But the counter risk in recent years has been accepting low returns in the expectation of an increase. Accepting a 5 yr lockup can at least give some certainty on future income. I would not expect a big increase in the RS 5.5% even if Bank Rates did rise to 2% by the end of 2015. 1) Bank savings rates are currently invisible. A 1.5% base rate rise might lead to only a 1% savings rate rise. 2) P2P is growing, when a £15000 ISA becomes available there might be a flood of money coming in, forcing rates down. 3) I refused to save in a personal pension because of the Annuity Rip-Off. Once pensions are liberated P2P would be an excellent place for the released funds, putting further pressure on rates. A counter argument would point to innovation at RS which has kept rates higher than the competition. So who knows? I need the highest current rate so am sticking with 5yr p2p.
|
|
oldgrumpy
Member of DD Central
Posts: 5,087 
Likes: 3,233
|
Post by oldgrumpy on Mar 22, 2014 13:15:15 GMT
I am extremely grateful that I bought my current house 38 years ago! Call me a stick-in-the-mud. I recently bought a car for £45 more than I paid for this house....  STICK IN THE MUD! You asked for it. Er...anyone want to buy an avatar?  
|
|
|
|
Post by oldnick on Mar 22, 2014 13:23:17 GMT
STICK IN THE MUD! You asked for it. Er...anyone want to buy an avatar? View AttachmentWelcome back Old Grumpy. Nobody does grumpy quite like you  . Perhaps you should be called New Grumpy now?
|
|
Bagman
Member of DD Central
Posts: 209
Likes: 131
Member is Online
|
Post by Bagman on Mar 22, 2014 13:26:16 GMT
Good to see you back OG  |
|
j
Member of DD Central
Penguins are very misunderstood!
Posts: 2,188
Likes: 540
|
Post by j on Mar 22, 2014 15:29:06 GMT
STICK IN THE MUD! You asked for it. Er...anyone want to buy an avatar? welcome back
|
|
|
|
Post by cautious on Mar 24, 2014 12:26:20 GMT
'The level of household debt, relative to income, has been falling since the crisis, as families have cut back and worked to pay off debt.
But the new Budget forecasts show it starting to rise again, from the final quarter of this year, moving from 142 per cent of income back up to 166 per cent by 2019.
That’s more or less where household debt had got to in the lead up to the financial crisis, after all that irresponsible ‘debt fuelled growth’ under Gordon Brown. '
Reproduced from 'This is money' website'.
Whilst as P2P/B lenders we rely on debtors borrowing our funds should we be concerned about this forecast ?
|
|
|
|
Post by jevans4949 on Mar 24, 2014 13:47:13 GMT
'The level of household debt, relative to income, has been falling since the crisis, as families have cut back and worked to pay off debt.
But the new Budget forecasts show it starting to rise again, from the final quarter of this year, moving from 142 per cent of income back up to 166 per cent by 2019.
That’s more or less where household debt had got to in the lead up to the financial crisis, after all that irresponsible ‘debt fuelled growth’ under Gordon Brown. '
Reproduced from 'This is money' website'.
Whilst as P2P/B lenders we rely on debtors borrowing our funds should we be concerned about this forecast ? Not sure if this would include mortgage debt (I'm guessing it does), but the revival in house-buying would contribute to this, especially if house prices continue to rise. The main thing that we should be worrying about (IMHO) is that when interest rates do eventually rise, people who have taken out mortgages at the present low rates are going to be struggling. I can remember the time when rates went up to 15%.
|
|
jimbo
Posts: 234
Likes: 42
|
Post by jimbo on Mar 25, 2014 5:30:41 GMT
Government debt is the core metric to keep watching in my view. It has ballooned since 2008, and its growth shows no sign of slowing. Household debt starting to increase again is merely adding more fuel to the eventual inferno...
|
|
j
Member of DD Central
Penguins are very misunderstood!
Posts: 2,188
Likes: 540
|
Post by j on Mar 25, 2014 14:26:02 GMT
Government debt is the core metric to keep watching in my view. It has ballooned since 2008, and its growth shows no sign of slowing. Household debt starting to increase again is merely adding more fuel to the eventual inferno... What would the solution be if worst case scenario did happen? Surely you cannot keep pumping paper money into the economy in the guise of QE & hope for the best!
|
|
|
|
Post by batchoy on Mar 25, 2014 15:12:50 GMT
'The level of household debt, relative to income, has been falling since the crisis, as families have cut back and worked to pay off debt.
But the new Budget forecasts show it starting to rise again, from the final quarter of this year, moving from 142 per cent of income back up to 166 per cent by 2019.
That’s more or less where household debt had got to in the lead up to the financial crisis, after all that irresponsible ‘debt fuelled growth’ under Gordon Brown. '
Reproduced from 'This is money' website'.
Whilst as P2P/B lenders we rely on debtors borrowing our funds should we be concerned about this forecast ? Not sure if this would include mortgage debt (I'm guessing it does), but the revival in house-buying would contribute to this, especially if house prices continue to rise. The main thing that we should be worrying about (IMHO) is that when interest rates do eventually rise, people who have taken out mortgages at the present low rates are going to be struggling. I can remember the time when rates went up to 15%. Household debt including home loans. It is interesting to note that some 'Experts' are already talking up the need for the Government to put in place measures to protect borrowers from interest rate increases which may cause them to default on their mortgages and thus lose their home. It is also worth noting that the 'Experts' concerned are employed by the very people who are lending the money. So much for all the talk of responsible lending after the the last crash
|
|
|
|
Post by oldnick on Mar 25, 2014 16:25:55 GMT
Government debt is the core metric to keep watching in my view. It has ballooned since 2008, and its growth shows no sign of slowing. Household debt starting to increase again is merely adding more fuel to the eventual inferno... What would the solution be if worst case scenario did happen? Surely you cannot keep pumping paper money into the economy in the guise of QE & hope for the best! If mortgage rates rise and too many people are unable to pay their mortgage a government of a certain persuasion could set up a British version of Fanny Mae, or was it Freddy Mac? the US nationalised house loan company. Then demand deposits from you and me (like war bonds) and just dole the money out regardless of international financial conditions. Sounds unlikely? Let's hope so. (The second world war impoverished many families who had considered themselves well off in the 1930s - despite surviving the great depression. I accept full responsibility if you don't sleep well tonight.)
|
|
|
|
Post by batchoy on Mar 25, 2014 16:46:52 GMT
........Then demand deposits from you and me (like war bonds) and just dole the money out regardless of international financial conditions. Sounds unlikely? Let's hope so. Given that the precedent has already been set in Cyprus, the demand could be a raid on peoples' bank deposits.
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Mar 26, 2014 3:10:33 GMT
........Then demand deposits from you and me (like war bonds) and just dole the money out regardless of international financial conditions. Sounds unlikely? Let's hope so. Given that the precedent has already been set in Cyprus, the demand could be a raid on peoples' bank deposits. Does that suggest that if we empty our bank/BSoc accounts and invest in P2P or shares instead we could avoid such a raid?
|
|
|
|
Post by oldnick on Mar 26, 2014 6:17:30 GMT
Given that the precedent has already been set in Cyprus, the demand could be a raid on peoples' bank deposits. Does that suggest that if we empty our bank/BSoc accounts and invest in P2P or shares instead we could avoid such a raid? To a hungry and desparate Chancellor all wealth can be converted directly, or indirectly, into revenue. And don't think hiding it abroad will protect your savings - tapping foreign investors is a vote winner not a loser. (Cyprus is a recent example.) That leaves hiding it under the mattress, but in a form that the treasury can't flush out with a new banknote issue. We should be talking to Italians and Greeks - they're taught to play this game from birth. Investor warning: concentrating your wealth into an easily storable and convertable form may provide future metal detectorists with an exciting find: like the hoards of Roman coins occasionally found these days. (There is an old story from China concerning Monkey King: a master of magic, who became very arrogant. Buddha made a wager with Monkey King that he could not jump out of Buddha's hand. If Monkey King won he would get the Jade Emporer's job, and if he lost he would be banished to earth to learn some humility. Employing all his powers Monkey King flew to the end of the universe, where he inscribed his name on one of five mighty pillars. On returning to Buddha, and describing his feat, Monkey King discovered he had lost the bet when he was shown the message he'd left on the pillar was actually on one of Buddha's fingers.) Here endeth todays lesson.
|
|
. Perhaps you should be called New Grumpy now? 
