10 years since the start of the financial crisis.
Discussion
menousername said:
jonnyb said:
I disagree.
The wealth accumulating older generations will eventually pop their mortal coil and that wealth will be left to younger generations.
Whatever happens the only certainty in life is death, and you can't take it with you.
A common theme on here is that the country's OAPs all have vast sums of wealthThe wealth accumulating older generations will eventually pop their mortal coil and that wealth will be left to younger generations.
Whatever happens the only certainty in life is death, and you can't take it with you.
I know a few will and I know one or two people who never had to worry about taking care of themselves let alone their parents
But i suspect the majority have very little to pass on
The way things are looking that will increasingly be tapped for healthcare, IHT etc. I doubt much will filter down.
Who knows what the future looks like but there have been several threads about the winter fuel allowance and the general consensus on here is that OAPs dont need it due to their vast wealth - juxtapositioned against the thread on energy prices increasing.
Then the thread on the state pension being next to worthless or not even existing, retiring age increasing, yet the economy almost certainly contracting, hence the thread here.
Brexit, inflation and the difficult decision re. interest rates.
The future does not look very bright right now
Here's an opinion article in the Times with some interesting facts in it:
https://www.thetimes.co.uk/edition/business/ten-ye...
The main point is:
All of the £2.7 trillion of wealth created in the UK since 2007 has been harvested by those over 45 and two-thirds by those over 65, while the wealth of those aged 16 to 34 has declined by 10 per cent.
Now that money has to somewhere, weather it's redistributed by the state through taxation, or directly by inheritance, it will eventually filter down to younger generations.
The main issue is that most of this wealth is tied up in property, even if you downsize you still need somewhere to live. Until you die of course.
jonnyb said:
The main issue is that most of this wealth is tied up in property, even if you downsize you still need somewhere to live. Until you die of course.
Agreed but thats one issueThe other issue is that its paper wealth only realized upon a sale and therefore only worth what someone will pay for it
We are walking a tightrope - prices high and affordability stretched. Another economic event or (brexit related) stagflation, or even just more of the same, means at some point few will be buying.
And house price growth is not true growth. This is asset inflation due to QE and interest rates.
I would disagree that property is not true wealth.
Like any measure of wealth it can fluctuate, just like the value of gold, or the pound in your pocket.
Just because money is tied up in your house doesn't mean it's not there. My pension is tied up in shares, it's still there and fluctuates with equity markets.
You may think the value is artificially high due to QE and ZIR, I would agree to an extent, but the value is still real. If I sold my house today it wouldn't be worthless. And the same could me said for any measure of wealth or value. Something is only worth what someone is willing to pay, however if you don't think they value it highly enough then you don't sell.
Its a two way street.
Like any measure of wealth it can fluctuate, just like the value of gold, or the pound in your pocket.
Just because money is tied up in your house doesn't mean it's not there. My pension is tied up in shares, it's still there and fluctuates with equity markets.
You may think the value is artificially high due to QE and ZIR, I would agree to an extent, but the value is still real. If I sold my house today it wouldn't be worthless. And the same could me said for any measure of wealth or value. Something is only worth what someone is willing to pay, however if you don't think they value it highly enough then you don't sell.
Its a two way street.
jonnyb said:
I would disagree that property is not true wealth.
Like any measure of wealth it can fluctuate, just like the value of gold, or the pound in your pocket.
Just because money is tied up in your house doesn't mean it's not there. My pension is tied up in shares, it's still there and fluctuates with equity markets.
You may think the value is artificially high due to QE and ZIR, I would agree to an extent, but the value is still real. If I sold my house today it wouldn't be worthless. And the same could me said for any measure of wealth or value. Something is only worth what someone is willing to pay, however if you don't think they value it highly enough then you don't sell.
Its a two way street.
It's real wealth yes, but what I think he means is it's not growth of the economy that benefits the average person. What matters surely is what the growth/contraction is of manufacturing/services/other value creating industry?Like any measure of wealth it can fluctuate, just like the value of gold, or the pound in your pocket.
Just because money is tied up in your house doesn't mean it's not there. My pension is tied up in shares, it's still there and fluctuates with equity markets.
You may think the value is artificially high due to QE and ZIR, I would agree to an extent, but the value is still real. If I sold my house today it wouldn't be worthless. And the same could me said for any measure of wealth or value. Something is only worth what someone is willing to pay, however if you don't think they value it highly enough then you don't sell.
Its a two way street.
A few thoughts:
If inflation numbers weren't frigged, would we have already been in recession for some time?
Why is it that in the olden days (before I remember) people/politicians used to worry about the balance of trade etc, now it seems to be only GDP that matters to them. I think I'm right in saying that borrowing money and buying something with it contributes to the GDP number? If so it'd be interesting to see if the cumulative debt is rising faster than GDP.
menousername said:
Interested in why? Not just specific to them, just generally
Kaupthing were incredibly aggressive in their lending practices. Their due diligence process was minimal.They were however nice people and they were easy to deal with. RBS, however, was built on a solid bed of
s - to steal a phrase from The Thick of It.Working in the city in the area of risk has much changed since 2008...yes an no. We are ever more regulated and the governments of the world moved the goal posts to bail people out left an right. The issue i see is people who were there in 2008 are still here now an don't always see the issue. Also people who in 2008 were day one on the job now te years on have risen through the ranks believe they are much better than thoes before them...but really the mind set has not changed.
So will there be a other crash 100% yes but when I have no idea if i did then i would be a very wealthy person
So will there be a other crash 100% yes but when I have no idea if i did then i would be a very wealthy person
jonnyb said:
menousername said:
PBDirector said:
Note for anyone who's as daft now as I was In 2000: I listened to advice exactly like this and declined to buy a 4 bed detached house for £110k that recently sold for £475k.
But would you now buy the same house for 475?Do we believe it can hit 800k or more and society continue to function. Those kind of prices mean future generations will literally be homeless.
The wealth accumulating older generations will eventually pop their mortal coil and that wealth will be left to younger generations.
Whatever happens the only certainty in life is death, and you can't take it with you.
At the beginning of September 2007 I started my first job in "The City." Aged 27 at the time I had been a Pharmacist, which I didn't really enjoy, but I was able to work part time and go rowing. Never quite good enough to make it into the National Team, as my rowing career started to stagnate, I managed to get a sporting scholarship. My last year of rowing earned me an MSc in Financial Management.
I started work at an Options Market Maker, on their Trainee Trader scheme. I was a clerk on a trading desk, booking / crossing / reccing trades. I would listen in to calls to the brokers, and learn on the job. There would be evening classes after the market closed, including mock trading designed to replicate pit trading, so you could prove you were worthy of being a trader.
On the first day I was sat next to the CEO, who was providing holiday cover on the Dax Options desk. The company had around 250 employees in 5 offices around the world, so this was a little nerve-wracking.
The first thing I was asked to do was go to the nearest branch of Northern Rock and see how long the queue of people waiting to get money out was.
It was a surreal time to be starting in that sort of world. I had some good times, and some hard times. I worked a lot of hours, but nothing like the hours a friend in M&A worked. I caught the falling knife of property prices in London, and sold out at a good level.
4 years ago we moved to the West Country to raise our family. I didn't make my fortune, but it left us in a strong financial position. I still have a mortgage and work full time, but I call it my retirement job. (My boss doesn't really like me calling it that.)
Who knows what the next 10 years will bring, but the last 10 years were very interesting for me. In that time I've bought and sold a flat, and bought a house. I got married and had two kids. I traveled a lot, although very little was for work. I've experimented with V6 bangernomics, and have had the same V8 engined family wagon for over 5 year. I feel that I've changed an awful lot. My outlook on life certainly has.
I'm sure my story is unique if you look at the details, but I'm equally sure there are plenty of people out there with more interesting tales to tell.
I started work at an Options Market Maker, on their Trainee Trader scheme. I was a clerk on a trading desk, booking / crossing / reccing trades. I would listen in to calls to the brokers, and learn on the job. There would be evening classes after the market closed, including mock trading designed to replicate pit trading, so you could prove you were worthy of being a trader.
On the first day I was sat next to the CEO, who was providing holiday cover on the Dax Options desk. The company had around 250 employees in 5 offices around the world, so this was a little nerve-wracking.
The first thing I was asked to do was go to the nearest branch of Northern Rock and see how long the queue of people waiting to get money out was.
It was a surreal time to be starting in that sort of world. I had some good times, and some hard times. I worked a lot of hours, but nothing like the hours a friend in M&A worked. I caught the falling knife of property prices in London, and sold out at a good level.
4 years ago we moved to the West Country to raise our family. I didn't make my fortune, but it left us in a strong financial position. I still have a mortgage and work full time, but I call it my retirement job. (My boss doesn't really like me calling it that.)
Who knows what the next 10 years will bring, but the last 10 years were very interesting for me. In that time I've bought and sold a flat, and bought a house. I got married and had two kids. I traveled a lot, although very little was for work. I've experimented with V6 bangernomics, and have had the same V8 engined family wagon for over 5 year. I feel that I've changed an awful lot. My outlook on life certainly has.
I'm sure my story is unique if you look at the details, but I'm equally sure there are plenty of people out there with more interesting tales to tell.
Working in insurance we were largely protected from the 2008 crash, yes people bought less and there was pressure on rates but writing global risks we were ok. However our little world has got far more difficult to work in, regulation has gone through the roof as has reporting with no real benefit. In fact it has had the opposite effect as we now won't touch UK retail business.
9/11 was our big shock, insurers went bust over night. Lloyds bought a lot of reinsurance from small to medium North American life insurers that went bust leaving people with no protection for large losses.
We give our authority to companies around the world who wrote on our behalf, you had the odd situation where we were some people were trying to tell them to stop as we didn't know if we could recover on a claim.
A syndicate we know wrote a huge amount of U.S. business, the individuals would have been heros - and very rich had nothing happened, instead the company went bust.
We are now at the point where due to low interest rates we have chronic over capacity with rates and results going downhill fast. In 2001 there were 14 syndicates writing our class now there are 60, but not a four fold increase in business !
9/11 was our big shock, insurers went bust over night. Lloyds bought a lot of reinsurance from small to medium North American life insurers that went bust leaving people with no protection for large losses.
We give our authority to companies around the world who wrote on our behalf, you had the odd situation where we were some people were trying to tell them to stop as we didn't know if we could recover on a claim.
A syndicate we know wrote a huge amount of U.S. business, the individuals would have been heros - and very rich had nothing happened, instead the company went bust.
We are now at the point where due to low interest rates we have chronic over capacity with rates and results going downhill fast. In 2001 there were 14 syndicates writing our class now there are 60, but not a four fold increase in business !
louiebaby said:
At the beginning of September 2007 I started my first job in "The City." Aged 27 at the time I had been a Pharmacist, which I didn't really enjoy, but I was able to work part time and go rowing. Never quite good enough to make it into the National Team, as my rowing career started to stagnate, I managed to get a sporting scholarship. My last year of rowing earned me an MSc in Financial Management.
I started work at an Options Market Maker, on their Trainee Trader scheme. I was a clerk on a trading desk, booking / crossing / reccing trades. I would listen in to calls to the brokers, and learn on the job. There would be evening classes after the market closed, including mock trading designed to replicate pit trading, so you could prove you were worthy of being a trader.
On the first day I was sat next to the CEO, who was providing holiday cover on the Dax Options desk. The company had around 250 employees in 5 offices around the world, so this was a little nerve-wracking.
The first thing I was asked to do was go to the nearest branch of Northern Rock and see how long the queue of people waiting to get money out was.
It was a surreal time to be starting in that sort of world. I had some good times, and some hard times. I worked a lot of hours, but nothing like the hours a friend in M&A worked. I caught the falling knife of property prices in London, and sold out at a good level.
4 years ago we moved to the West Country to raise our family. I didn't make my fortune, but it left us in a strong financial position. I still have a mortgage and work full time, but I call it my retirement job. (My boss doesn't really like me calling it that.)
Who knows what the next 10 years will bring, but the last 10 years were very interesting for me. In that time I've bought and sold a flat, and bought a house. I got married and had two kids. I traveled a lot, although very little was for work. I've experimented with V6 bangernomics, and have had the same V8 engined family wagon for over 5 year. I feel that I've changed an awful lot. My outlook on life certainly has.
I'm sure my story is unique if you look at the details, but I'm equally sure there are plenty of people out there with more interesting tales to tell.
I sort of envy you got out. I am similar in age but had been working in the city for 5 years then so got a taste of some of the good times like expensive office parties free fruite (you laugh but how often do you get free stuff at work now) chauffer car home late at night even for junior staff like me. Bonuses were not amazing (as i am not a trader) but 25% was possible (which was much better than many people got an still do). What i remember in the years running up to it was rhe sort of unease we (younger staff) felt about the economey 110% mortgage 5x salary etc just felt wrong. An if things were all fine why were we told pay was always so tight an why did the fun stuff start to disappear and then why were we told ti classify things as low or zero risk when clearly they could not be.....like i say its a mind set you know its not right so you raise a flag an then someone higher up tells you what they want to see...still happens today an because we follow what we are told we can mask the truth again an again till the next crash..in my own case i have looked to build income outside of the city focused on paying down mortgages an building capital. I can't change a mind set so rather than be an ostrich i chose to take control of my life at least.. I started work at an Options Market Maker, on their Trainee Trader scheme. I was a clerk on a trading desk, booking / crossing / reccing trades. I would listen in to calls to the brokers, and learn on the job. There would be evening classes after the market closed, including mock trading designed to replicate pit trading, so you could prove you were worthy of being a trader.
On the first day I was sat next to the CEO, who was providing holiday cover on the Dax Options desk. The company had around 250 employees in 5 offices around the world, so this was a little nerve-wracking.
The first thing I was asked to do was go to the nearest branch of Northern Rock and see how long the queue of people waiting to get money out was.
It was a surreal time to be starting in that sort of world. I had some good times, and some hard times. I worked a lot of hours, but nothing like the hours a friend in M&A worked. I caught the falling knife of property prices in London, and sold out at a good level.
4 years ago we moved to the West Country to raise our family. I didn't make my fortune, but it left us in a strong financial position. I still have a mortgage and work full time, but I call it my retirement job. (My boss doesn't really like me calling it that.)
Who knows what the next 10 years will bring, but the last 10 years were very interesting for me. In that time I've bought and sold a flat, and bought a house. I got married and had two kids. I traveled a lot, although very little was for work. I've experimented with V6 bangernomics, and have had the same V8 engined family wagon for over 5 year. I feel that I've changed an awful lot. My outlook on life certainly has.
I'm sure my story is unique if you look at the details, but I'm equally sure there are plenty of people out there with more interesting tales to tell.
My guess 5 years maybe 10 before next crash but what so i know.
Thankyou4calling said:
Justayellowbadge said:
Easy enough actually.
My first, in the Witterings around that time, was 63k, 300+ now.
I don't think you could buy a four bed detached in that area for £63,000 in 2000.My first, in the Witterings around that time, was 63k, 300+ now.
Mine is a 3 bed end terrace. Not the same sort of house, but the same sort of percentage growth as the previous poster.
The cycle after a big bust is usually less extreme, but this time QE has fed into asset prices, so we shall see. Personally I see any property at over about £350 psf as potentially vulnerable, for example.
On the positive side, the banks are alot less vulnerable in the UK than they were through much higher capital and much much much less leverage, but the European banks look alot less stable.
I am not too worried about debt defaults by consumers - rates aren't going to rise any time soon, so servicability is fine.
Justayellowbadge said:
Thankyou4calling said:
Justayellowbadge said:
Easy enough actually.
My first, in the Witterings around that time, was 63k, 300+ now.
I don't think you could buy a four bed detached in that area for £63,000 in 2000.My first, in the Witterings around that time, was 63k, 300+ now.
Mine is a 3 bed end terrace. Not the same sort of house, but the same sort of percentage growth as the previous poster.
So did you or didn't you buy it for 63k in the year 2000 like you said?
BlackLabel said:
So essentially it all hinges on interest rates? If they rise by a significant level we (the nation's economy) are screwed but if they remain low we'll plod along just fine?
Depends Do we think where we are at, and where we might be in the next 12-24 months, is just fine
A lot of the curent, albeit perhaps unlikely, risks are due to to low interest rates, and most of the immediate challenges, eg. Housing and consumer debt, have been exacerbated by them.
Low interest rates could ironically be the cause of the next downturn / crisis or whatever we want to label it and whatever the extent of it
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