Europe heading into recession

[Borghetto]

gizlaroc said:

With German banks offering 30 year fixed rate mortgages at 1.3% and 10 year fixed at 0.9% surely in todays small world they can't whack the rates up too high as people will just use a German lender?

I seem to recall that many in eastern europe took out mortgages in Swiss Francs, I don't think that ended well.

[nikaiyo2]

I thought a recession was 3 quarters of negative growth, not 2? Have I just got wires crossed?

[i4got]

nikaiyo2 said:

I thought a recession was 3 quarters of negative growth, not 2? Have I just got wires crossed?

6 months so 2 quarters, I believe.

[Digga]

Borghetto said:

gizlaroc said:

With German banks offering 30 year fixed rate mortgages at 1.3% and 10 year fixed at 0.9% surely in todays small world they can't whack the rates up too high as people will just use a German lender?

I seem to recall that many in eastern europe took out mortgages in Swiss Francs, I don't think that ended well.

Yes, very badly indeed, especially for a lot of Italian mortgage borrowers. I think the technical term is denominator effect; if the currency (denominator) that your loan is written in moves in relation to your native currency - the one in which you earn and pay taxes etc. - then you can be shafted, pretty swiftly.

[anonymous-user]

Digga said:

Borghetto said:

gizlaroc said:

With German banks offering 30 year fixed rate mortgages at 1.3% and 10 year fixed at 0.9% surely in todays small world they can't whack the rates up too high as people will just use a German lender?

I seem to recall that many in eastern europe took out mortgages in Swiss Francs, I don't think that ended well.

Yes, very badly indeed, especially for a lot of Italian mortgage borrowers. I think the technical term is denominator effect; if the currency (denominator) that your loan is written in moves in relation to your native currency - the one in which you earn and pay taxes etc. - then you can be shafted, pretty swiftly.

Aka carry trade; borrow in a zirp currency (traditionally jpy) and lend in the highest yielding ccy you can find (bonus points if you don't know where it is on a map)... it's a strategy most junior fx traders figure out on their first day but one which goes horribly wrong more often than not; the joke is its called a carry trade because you'll end up being carried off the floor by security!

[stongle]

fblm said:

Digga said:

Borghetto said:

gizlaroc said:

With German banks offering 30 year fixed rate mortgages at 1.3% and 10 year fixed at 0.9% surely in todays small world they can't whack the rates up too high as people will just use a German lender?

I seem to recall that many in eastern europe took out mortgages in Swiss Francs, I don't think that ended well.

Yes, very badly indeed, especially for a lot of Italian mortgage borrowers. I think the technical term is denominator effect; if the currency (denominator) that your loan is written in moves in relation to your native currency - the one in which you earn and pay taxes etc. - then you can be shafted, pretty swiftly.

Aka carry trade; borrow in a zirp currency (traditionally jpy) and lend in the highest yielding ccy you can find (bonus points if you don't know where it is on a map)... it's a strategy most junior fx traders figure out on their first day but one which goes horribly wrong more often than not; the joke is its called a carry trade because you'll end up being carried off the floor by security!

There's another great one out there. Many European banks are only stressed for liquidity at 1mth (LCR) and 1 year. Nothing inbetween. So they borrow $ at one month then spin it back to US banks- whom are monitored at 3, 6,9 and 12mth. And ride the rate curve. I mean what could go wrong with that....

[Digga]

stongle said:

fblm said:

Digga said:

Borghetto said:

gizlaroc said:

With German banks offering 30 year fixed rate mortgages at 1.3% and 10 year fixed at 0.9% surely in todays small world they can't whack the rates up too high as people will just use a German lender?

I seem to recall that many in eastern europe took out mortgages in Swiss Francs, I don't think that ended well.

Yes, very badly indeed, especially for a lot of Italian mortgage borrowers. I think the technical term is denominator effect; if the currency (denominator) that your loan is written in moves in relation to your native currency - the one in which you earn and pay taxes etc. - then you can be shafted, pretty swiftly.

Aka carry trade; borrow in a zirp currency (traditionally jpy) and lend in the highest yielding ccy you can find (bonus points if you don't know where it is on a map)... it's a strategy most junior fx traders figure out on their first day but one which goes horribly wrong more often than not; the joke is its called a carry trade because you'll end up being carried off the floor by security!

There's another great one out there. Many European banks are only stressed for liquidity at 1mth (LCR) and 1 year. Nothing inbetween. So they borrow $ at one month then spin it back to US banks- whom are monitored at 3, 6,9 and 12mth. And ride the rate curve. I mean what could go wrong with that....

Northern Rock the sequel.

[loafer123]

anonymous said:

[redacted]

Construction Contracting has been a car crash for 2 years...

[gizlaroc]

Anyway, with Lagarde now in charge at the ECB we may as well close this thread surely?

Her track record speaks for itself.

Safe hands, safe hands.

[B'stard Child]

loafer123 said:

Borghetto said:

tumble dryer said:

Still sends shivers... (At the time, I was the only person I knew with a £100k mortgage. That was a BIG figure back in the day. Stung a bit.)

Blimey mine was only 65k and it made me look into the abyss.

I was a student, owned my own flat and had a £75k mortgage.

Alot of baked beans were eaten that year.

I was a trainee having decided on a career change, had a £60K mortgage (plus an additional debt of £13K from buying the wife out of the house after she decided to sleep around the local nick)

I lived on beans on toast, the only way I could afford beans on toast was to work in a pub every spare hour I could - I reckon for a year of my life If I wasn't working I was sleeping!!!!

Got rid of the car - had a fz50 to commute to work (horrid f'ing thing but great on juice)

Many times I thought about handing in the keys but in a market with falling house prices and interest rates rising I'd have still been on the hook for the debt so decided to tough it out.

Glad I did now but at the time it was sometimes hard to know which way was up or even if it would ever get any better

[PugwasHDJ80]

we've got a £400k mortgage and can cope with up to 8%

anything over and we're pretty screwed.

We're paying off extra, but its a toss up between big mortgage payments and big pension payments- can't quite work out which is better most of the time!

[B'stard Child]

PugwasHDJ80 said:

we've got a £400k mortgage and can cope with up to 8%

anything over and we're pretty screwed.

We're paying off extra, but its a toss up between big mortgage payments and big pension payments- can't quite work out which is better most of the time!

Mortgage every time in my book you are saving a whole heap of interest payments in that way - in 4mths I will be mortgage free - that gives me 10 years to put the equivalent amount monthly into a pension pot to supplement my company one.

[Tango13]

B'stard Child said:

PugwasHDJ80 said:

we've got a £400k mortgage and can cope with up to 8%

anything over and we're pretty screwed.

We're paying off extra, but its a toss up between big mortgage payments and big pension payments- can't quite work out which is better most of the time!

Mortgage every time in my book you are saving a whole heap of interest payments in that way - in 4mths I will be mortgage free - that gives me 10 years to put the equivalent amount monthly into a pension pot to supplement my company one.

When I took my mortgage out in 2000 I was advised that over paying £1 at the beginning would knock about £3 off the back end of the mortgage. Obviously interest rates were much higher back then but if you can afford to over pay then I'd say that is the better option.

Once the mortgage is finished I'd also look at tax free ISA's as opposed to extra pension payments as your cash isn't quite so tied up.

[Borghetto]

PugwasHDJ80 said:

We're paying off extra, but its a toss up between big mortgage payments and big pension payments- can't quite work out which is better most of the time!

I think prior to Gordon (I saved the World) Brown (that one eyed ste), saving into a pension was a no brainer However, once one politician thinks it's okay to break the taboo of fecking with the tax system of peoples pensions, who can say hand on heart some other corrupt politician won't repeat the trick.

[anonymous-user]

Tango13 said:

Once the mortgage is finished I'd also look at tax free ISA's as opposed to extra pension payments as your cash isn't quite so tied up.

The rules on taking your money out of a pension changed significantly fairly recently, you can now cash your pot in fully or partially.

[Gandahar]

What happened to

THE END OF THE EURO IS NIGH

thread?

Is this the 2019 watered down version of such ?


2021 and we will have

"Europe NOT EXPANDING AS EXPECTED SHOCKA" thread



By that time most of the 70 year old PH folk posting these things will be in institutions though and having to take time outs having botties wiped and mouths dabbed.....

[anonymous-user]

Gandahar said:

What happened to

THE END OF THE EURO IS NIGH

thread?

Is this the 2019 watered down version of such ?


2021 and we will have

"Europe NOT EXPANDING AS EXPECTED SHOCKA" thread



By that time most of the 70 year old PH folk posting these things will be in institutions though and having to take time outs having botties wiped and mouths dabbed.....

The Euro died years ago, it's now not a currency, it's a ponzi scheme kept afloat by "whatever it takes" political appointees.

It's going to hurt when that ponzi scheme fails.

[Gandahar]

jsf said:

Gandahar said:

What happened to

THE END OF THE EURO IS NIGH

thread?

Is this the 2019 watered down version of such ?


2021 and we will have

"Europe NOT EXPANDING AS EXPECTED SHOCKA" thread



By that time most of the 70 year old PH folk posting these things will be in institutions though and having to take time outs having botties wiped and mouths dabbed.....

The Euro died years ago, it's now not a currency, it's a ponzi scheme kept afloat by "whatever it takes" political appointees.

It's going to hurt when that ponzi scheme fails.

When will it fail ?

Give us a date .... I'll book mark this post ...

Go on ....

[anonymous-user]

Gandahar said:

jsf said:

Gandahar said:

What happened to

THE END OF THE EURO IS NIGH

thread?

Is this the 2019 watered down version of such ?


2021 and we will have

"Europe NOT EXPANDING AS EXPECTED SHOCKA" thread



By that time most of the 70 year old PH folk posting these things will be in institutions though and having to take time outs having botties wiped and mouths dabbed.....

The Euro died years ago, it's now not a currency, it's a ponzi scheme kept afloat by "whatever it takes" political appointees.

It's going to hurt when that ponzi scheme fails.

When will it fail ?

Give us a date .... I'll book mark this post ...

Go on ....

It failed the day it was created.

[Gandahar]

jsf said:

Gandahar said:

jsf said:

Gandahar said:

What happened to

THE END OF THE EURO IS NIGH

thread?

Is this the 2019 watered down version of such ?


2021 and we will have

"Europe NOT EXPANDING AS EXPECTED SHOCKA" thread



By that time most of the 70 year old PH folk posting these things will be in institutions though and having to take time outs having botties wiped and mouths dabbed.....

The Euro died years ago, it's now not a currency, it's a ponzi scheme kept afloat by "whatever it takes" political appointees.

It's going to hurt when that ponzi scheme fails.

When will it fail ?

Give us a date .... I'll book mark this post ...

Go on ....

It failed the day it was created.

20 years on life support I guess.

How come the £ has gone down against it since 1999 then ?