Loans and Finance

Loans and Finance


News and information about loans, money, debt, finance and business issues.

Monday, April 24, 2017

Don't Dither wrt Financial Matters

Whatever the outcome of the election, and whoever ends up trying to "manage" events, nature will take its course and the politicians will prove powerless to stop it.

Thus make your financial decisions without delay and procrastination.

Don't dither and don't look for excuses for delay!

Friday, April 21, 2017

Quarterly Retail Sales Fall - Monthly Sales Rise

UK retail sales posted their biggest quarterly fall in seven years in March, as the prices of everyday goods continued to climb.

Sales were down 1.4% year-on-year on a quarterly basis, and down 1.8% compared with February 2017, according to the Office for National Statistics (ONS).

In March 2017, the quantity bought in the retail industry is estimated to have increased by 1.7% compared with March 2016 and decreased by 1.8% compared with February 2017; decreases are seen across the four main store types.

Average store prices (including fuel) increased by 3.3% on the year, the largest growth since March 2012; the largest contribution came from petrol stations, where year-on-year average prices rose by 16.4%.

Online sales (excluding automotive fuel) increased year-on-year by 19.5% and by 0.5% on the month, accounting for approximately 15.5% of all retail spending.

Wednesday, April 19, 2017

US Currency Monitoring

Wednesday, April 12, 2017

Facebook Down For Virgin Media Customers In UK

Those of you on Virgin Media will have been unable to access Facebook for at least the last two hours, as there is a technical glitch which Virgin have yet to resolve.

Monday, April 10, 2017

LIBOR Rigging

Following the acquittal of two former Barclay's traders last week, Panorama asks if the right people are being blamed for what has been called the biggest financial fix of all time.

Piecing together explosive new evidence, which calls into question the safety of other convictions, Panorama reporter Andy Verity reveals that manipulation of the world's most important interest rate, Libor, was allowed and even ordered by people at the highest levels of the financial establishment.

A secret recording that implicates the Bank of England in Libor rigging has been uncovered by BBC Panorama. 

The 2008 recording adds to evidence the central bank repeatedly pressured commercial banks during the financial crisis to push their Libor rates down.

In the recording, a senior Barclays manager, Mark Dearlove, instructs Libor submitter Peter Johnson, to lower his Libor rates.

He tells him: "The bottom line is you're going to absolutely hate this... but we've had some very serious pressure from the UK government and the Bank of England about pushing our Libors lower."
Mr Johnson objects, saying that this would mean breaking the rules for setting Libor, which required him to put in rates based only on the cost of borrowing cash.

Mr Johnson says: "So I'll push them below a realistic level of where I think I can get money?"

His boss Mr Dearlove replies: "The fact of the matter is we've got the Bank of England, all sorts of people involved in the whole thing... I am as reluctant as you are... these guys have just turned around and said just do it."

It is of course convenient for banks to blame others (eg the Bank of England).

Wednesday, April 05, 2017

The End of The Paper Fiver

Meanwhile in Sweden:

Tuesday, April 04, 2017

Greek Bailout Talks Grind To a Halt

Last week I warned people not to believe the hype over the alleged progress and agreement on the Greek bailout talks.

As can be seen, I was right to issue that warning.

Greece is unwilling and incapable of implementing the reforms that the Quadriga are demanding.

Wednesday, March 29, 2017

Greek Creditors Allegedly Reach Preliminary Agreement

How many times have we heard this before?

Don't believe the hype!

Tuesday, March 28, 2017

#Grexit Looms Large Again - Greek Banks Haemorrhaging Cash

Greece’s beleaguered banking system has taken a fresh hit from the country’s shaky bailout talks this year, registering its worst deposit outflows since the height of its debt crisis in the summer of 2015.

The FT reports that the latest figures from the European Central Bank showed households and businesses pulled €1.1bn from the country’s lenders last month, moderating from the €1.7bn withdrawn at the start of the year but marking the worst two-monthly outflow since the country was bought to the brink of a eurozone exit nearly two years ago.

For why?

There is no sign of agreement between Greece and the Quadriga wrt the bailout. Indeed there is no sign of agreement between the IMF and other members of the Quadriga over the terms of the bailout!

Sunday, March 26, 2017

Europe Isn't Working

Thursday, March 23, 2017

Retail Sales Rise

Retail sales last month rose 3.7% compared with February of 2016, the Office for National Statistics said, and were up 1.4% on January’s sales.

However, many in the media are looking at the three month data and reporting a decline of 1.4%. 

Tuesday, March 21, 2017

Inflation Hits 2.3%

Inflation jumped to it highest level for three and a half years in February. Average prices rose by 2.3pc in February, from 1.8pc in January. This was higher than the 2.1pc predicted by economists, and was driven by price rises for food and fuel and the weakened pound.

Right on cue the siren sound of people calling for an increase in rates. Not so fast though, any rise in rates will adversely hit economic activity and increase unemployment.

There will be no rush to raise rates anytime soon!

Thursday, March 16, 2017

Wednesday, March 15, 2017

Unemployment Lowest Since 1975

Unemployment fell to its joint lowest level since 1975.

Joblessness dropped to 4.7pc, down from 4.8pc a month earlier and from 5.1pc in January 2016, according to the Office for National Statistics.

Tuesday, March 14, 2017

Bank of England Response To The Resignation of Charlotte Hogg

Press release

Following recent events, Charlotte Hogg yesterday voluntarily offered her resignation.

This morning, Court has accepted her resignation with deep regret. 
Anthony Habgood, Chair of Court, said:

“In her time at the Bank, Charlotte Hogg has made a huge contribution in areas such as professionalising and modernising the management and operations of the Bank, leading the implementation of the strategic plan, championing diversity and driving forward the Bank’s understanding of key issues such as Fintech and Operational Risk.  No one who knows her doubts her track record or her integrity.  While Charlotte’s decision by any measure exceeds the standard that would be expected in the private sector or would be required under statute, it is understandable in the circumstances and she has taken it with the best interests of the Bank at heart.”

Mark Carney, Governor of the Bank, said:

“While I fully respect her decision taken in accordance with her view of what was the best for this institution, I deeply regret that Charlotte Hogg has chosen to resign from the Bank of England.” 

“Since Charlotte joined the Bank almost four years ago, she has transformed its management and operations.  Drawing on her extensive private sector experience and her unrelenting commitment to excellence, she has led a broad range of initiatives to build a more open and inclusive institution, to overhaul our IT systems, and to change fundamentally how the Bank develops, manages and rewards its dedicated public servants. Along the way, she has inspired countless colleagues at the Bank and attracted a new cohort of professionals to it.  The combination of Charlotte’s unique skills and drive were exceptionally well suited to lead similar transformations of our markets and banking responsibilities, particularly given the growing importance of FinTech, operational excellence and the management of cyber risk.”
“The Bank of England today is stronger, more diverse, secure and effective in large part because of Charlotte Hogg.  We will do everything we can to honour her work for the people of the United Kingdom by building on her contributions.”

Court notes today’s report by the Treasury Select Committee.  It is making the following announcements.

The Bank is reconfiguring reporting lines and internal structures in order to safeguard more effectively the governance of its Code of Conduct, compliance and disciplinary processes.  The new configuration will involve:

  • Senior Management Responsibility for Bank-wide risk management moving from the Chief Operating Officer (COO) to Deputy Governor for Prudential Regulation Sam Woods in his capacity as Chair of the Executive Risk Committee.  Mr Woods in turn reports to Court’s Audit and Risk Committee (ARCO) on risk matters.
  • The Head of Compliance reporting to the General Counsel (who in turn reports to the Governor) and the Chair of ARCO, who is tasked with ensuring the independence of the Bank’s compliance function.
  • Senior Management Responsibility for the Code of Conduct will rest with the General Counsel who will ensure the policies under the Code are fully understood and adhered to, and will report on that to the Chair of ARCO.

To ensure adherence to the Code of Conduct at the most senior levels of the Bank, Court has commissioned a review which will be carried out by Court’s non-executive directors other than the Chair. The review will examine:
  • The lessons from Ms Hogg’s case,
  • The extent to which the changes to reporting lines and internal structures outlined above are adequate, and
  • What the Bank should do to ensure full and timely compliance now and in future, especially amongst senior members of the Bank.
The Bank will make the findings and recommendations of this review public. 

The review by Court’s non-executives will be assisted in the first instance by the Bank’s Independent Evaluation Office, the Internal Audit division and the National Audit Office as appropriate.

Letter from Charlotte Hogg

Charlotte Hogg Resigns As Deputy Governor of The Bank of England

Unsurprising given that she has lost support of MPs, who stated that her "professional competence falls short" for the role of Deputy Governor of The Bank of England.

Monday, March 13, 2017

Rents Falling

London Loves Business reports that the average monthly rent for newly let properties has fallen for the first time since late 2010, according to figures from Countrywide.

The fall is due to an increase in supply of properties, because some landlords were in a hurry to buy properties last year before a three per cent stamp duty surcharge came about.

The average new tenancy in England, Scotland and Wales fell by 0.6 per cent in the year to February, to £921 a month.

As ever, when the state tinkers with taxes there are consequences.

Thursday, March 09, 2017

Greece Unemployment Stuck at 23%

"Stable" implies something to be happy about. A 23% unemployment rate is nothing to be happy about, most especially as it shows no sign of improving!

Wednesday, March 08, 2017

The Budget Live - #Budget2017

Wednesday, March 01, 2017

Back To The Future - EU May Revert To Single Market

Oh irony of irony, the EU is finally waking up to the fact that the best way to survive may in fact be to revert to its past; namely to become a single market (what once was called the "Common Market").

Why and how? 

In a scenario where the EU27 cannot agree to do more in many policy areas, it increasingly focuses on deepening certain key aspects of the single market. There is no shared resolve to work more together in areas such as migration, security or defence. 

As a result, the EU27 does not step up its work in most policy domains. Cooperation on new issues of common concern is often managed bilaterally. The EU27 also significantly reduces regulatory burden by withdrawing two existing pieces of legislation for every new initiative proposed. 

By 2025, this means: 

The functioning of the single market becomes the main "raison d'être" of the EU27. Further progress depends on the capacity to agree related policies and standards. This proves easier for the free movement of capital and of goods, which continues tariff - free, than it does in other areas."
This revelation on the road to Damascus comes in whitepaper on the future of Europe, published by the European Commission and signed off by Juncker.

Needless to say, Juncker and his ilk want full steam ahead to full political and monetary union. However, that simply won't happen.

In reality, the EU will be lucky to survive even as a "Common Market"!

Tuesday, February 28, 2017

Samsung Buries Its Corporate Head in The Sand

Monday, February 27, 2017

The Ides of March - "Everything Will Grind To a Halt"

I think what people are missing is this date, March 15th 2017.  That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015.  That holiday expires.  The debt ceiling will freeze in at $20 trillion.  It will then be law.  It will be a hard stop.  The Treasury will have roughly $200 billion in cash. 
We are burning cash at a $75 billion a month rate.  By summer, they will be out of cash.  Then we will be in the mother of all debt ceiling crises. 
Everything will grind to a halt.  I think we will have a government shutdown.  There will not be Obama Care repeal and replace.  There will be no tax cut.  There will be no infrastructure stimulus.  There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.

Friday, February 24, 2017

The Self Delusion of Tsipras

Tsipras is of the view that Greece's creditors feel that austerity is no longer necessary for Greece.

That is wishful thinking in the extreme. The Quadriga will move heaven and earth, and allow Greece to suffer whatever it takes, in order to safeguard the loans made to Greece to date.

Thursday, February 23, 2017

How To Destroy The High Street

In order to destroy the high street:

1 Encourage supermarkets to open out of town.

2 Impose greedy business rate increases.

3 Impose parking enforcement zones.

Kudos to councils and the government for following this above steps to the letter!

Tuesday, February 21, 2017

Greece Will Sink The Euro Ship of State

The Europhiles are celebrating the fact that creditors have agreed to work on new structural reforms in order to be able to provide Greece with more bailout money (7bn euros are needed in the short term).

However, what the Europhiles are ignoring in their celebration is the fact that the creditors are in no rush and don't expect any meaningful conclusion (one way or another) before summer.

One way or another Greece will sink the euro ship of state.

Monday, February 20, 2017

Unilver Falls 7%

Unsurprisingly, since the withdrawal of the Kraft Heinz takeover bid, shares in Unilever are down by 7% in opening trade in London.

Wednesday, February 15, 2017

Employment at Record High of 74.6%

Friday, February 10, 2017

IMF and Eurozone Agree Common Stance on Greece

Reuters reports that the IMF and Eurozone have finally come to an agreement as to what they will say to Greece today.

A meeting between the lenders and Greek officials is scheduled for later today, the head of euro zone finance ministers Jeroen Dijsselbloem said in The Hague.

"There is agreement to present a united front to the Greeks," the eurozone official said, adding that the outcome of Friday's meeting with the Greeks was still unclear and it was unclear if Athens would accept the proposals.

I think it fair to say that if the IMF and Eurozone really have come to a common stance, then Greece will not like it!

Whither The Prophesied Brexit Armageddon?

So much for Project Fear!

Thursday, February 09, 2017

Malloch Predicts Grexit and Euro Demise

Ted Malloch, the US ambassador to the EU, expects Greece to leave to euro and suspects that the eurozone's days are numbered.

As per Zerohedge:
If the [IMF] will not participate in a new bailout that does not include substantial debt relief, and that’s what they are saying, then that, more or less, ensures a collision course with eurozone creditors.

Now we all know that primarily [puts pressure on] Germany, which remains opposed to any such actions, so I think it suggests that Greece might have to sever ties and do Grexit and exit the euro."
Suffice to say the EU doesn't want to hear defeatist talk like this, and is collectively whining at full pitch about Malloch's appointment!

Wednesday, February 08, 2017

Greece's Oncoming Explosion

The International Monetary Fund has warned that Greece’s debts are on an “explosive” path, despite years of bailouts and half hearted economic reforms.

This oncoming explosion existentially threatens the eurozone itself.

The solution according to the IMF is debt forgiveness.

However, as noted many times before on this site, neither Germany nor the other members of the Quadriga (sans IMF) have forgiveness in their hearts.

Jeroen Dijsselbloem, the Eurogroup President repeated the mantra saying there would be no Greek debt forgiveness and dismissing the IMF assessment of Greece’s growth prospects as overly pessimistic.

This will not end well!

Tuesday, February 07, 2017

IMF Unreasonable Demands Upon Greece

Deutsche Bank Israel CEO Arrested

Thursday, February 02, 2017

Bank of England Rejects Project Fear

Bank of England Backtracks on Brexit

Bank of England raises its economic forecast close to pre-referendum levels.

Story on the @skynews website:

So much for Project Fear!

Greece - The Crisis That Refuses To Go Away

Despite the media's obsession with Trump, there are other issues in the world.

One such issue being the ongoing Greek financial crisis, which has not gone away and is not likely to be solved.

Those who are optimistic for the chances of a solution should bear in mind that the IMF doesn't think that Greek debt is sustainable and that a write down is required. Germany, however, won't countenance a write down.

In short, there are no signs of a solution.

Tuesday, January 31, 2017

Deutsche Bank Fined £500m

Deutsche Bank has been fined in excess of £500m by UK and US regulatory authorities for failures in its anti money laundering procedures.

Friday, January 27, 2017

Short The Euro!

VW In Prosecutor's Crosshairs

RBS Increases Provisions For Fines

RBS announced on Thursday that it has set aside a further $3.8 billion to cover expected fines from U.S. authorities over its handling of residential mortgage-backed securities in the run-up to the 2008 financial crisis.

RBS said the additional provision would mostly be for a penalty expected to be imposed by the Department of Justice and other agencies over its issuing and underwriting of U.S. residential mortgage-backed securities (RMBS) during the U.S. housing boom of the 2000s.

RBS’s total package for provisions related to the mortgage-selling misconduct now stands at $8.3 billion.

Thursday, January 26, 2017

Going For Growth

Tuesday, January 24, 2017

The Robots Aren't Coming

Monday, January 23, 2017

Samsung Confirms Dual Battery Fault

At a press conference today, Samsung officials said exhaustive tests on tens of thousands of devices and batteries had ruled out any problems with the device’s hardware or software.
Samsung confirmed what everyone knew, namely that it was a battery fault. Internal and independent investigations had “concluded that batteries were found to be the cause of the Note 7 incidents”.

In the case of the original battery, the casing was too small, causing it to short-circuit and ignite. It was replaced with a battery that had a different manufacturing defect but led to the same result.

Koh Dong-jin, the head of Samsung’s mobile business, is quoted by the Guardian:
We sincerely apologise for the discomfort and concern we have caused to our customers.
The company said there would be no fire risk involving future devices.

Meanwhile the heir to the Samsung throne, Lee Jae-yong, faces the prospect of arrest as prosecutors have accused him of making bribes worth millions of pounds to a close friend of South Korea’s president.

Friday, January 20, 2017

Schaeuble Positive On Brexit Trade Deal

Thursday, January 19, 2017

Momentous Change - Tax Rates

Wednesday, January 18, 2017

UK Unemployment Falls

ONS statistics released today show that unemployment in the UK fell by 52,000 to 1.6 million in November, the lowest number since 2006.

In the three months to November, unemployment continued to decrease after hitting a 10-year low in October last year.

The UK now has one of the lowest jobless rates in Europe at 4.8%. The employment rate is now 74.5%, up from 74% in the previous year.

Average earnings increased by 2.8% in the year to November, a 0.2% increase on the previous month.

Where is the much vaunted post Brexit apocalypse?

Tuesday, January 17, 2017

Theresa May Brexit Speech Live

China Makes Play to Replace Dollar With Yuan As Reserve Currency

Xi is making a skilful pitch at Davos #WEF17 to make China the champion of free trade and globalisation, and to replace the Dollar with the Yuan as the global reserve currency.

Wolrd Economic Forum Davos 2017 Live - #WEF17

Monday, January 16, 2017

IMF Revises UK Growth Forecast Upwards To 1.5%

In its latest World Economic Outlook, the IMF said it now expects the UK economy to grow by 1.5% this year, marking a 0.4% upward revision to forecasts made in October.

For why?

"A stronger-than-expected performance during the latter part of 2016"

So much for the post Brexit financial apocalypse predicted by the Remainders!

Trump Promises "Fair" Deal for UK

Samsung Identifies Cause of Galaxy Note 7 Fires

Reuters reports that a Samsung Electronics investigation into what caused some Galaxy Note 7 smartphones to catch fire has concluded that the battery was the main reason.

This of course comes as no surprise to anyone, as it has been assumed to be the issue from the very first reports of fires. However, notwithstanding that, Samsung will announce the results of their investigations on 23 January, one day before their fourth quarter results. 

However, it seems that Samsung may have other things to worry about:

Friday, January 13, 2017

First-time Buyers Highest Since 2007

The Halifax report that there were more first-time home buyers in 2016 than at any time since the start of the financial crisis.

The Halifax estimated there were 335,750 first-time buyers last year, the highest figure since 359,900 in 2007.

However, the average first-time deposit has more than doubled since 2007 to stand at more than £32,000.

The Halifax also found the average price of a first home broke through the £200,000 barrier for the first time.

Halifax housing economist Martin Ellis attributed the increase in first-time buyer numbers to continuing low mortgage rates and high levels of employment, which had "supported the market". He is quoted by the Telegraph:
"Government schemes such as Help to Buy have improved affordability, enabling more first-time buyers to buy their own property."
Yet again the dire predictions of Project Fear have been proven wrong.

Thursday, January 12, 2017

Carney Admits Project Fear Was Wrong

Mark Carney, currently Governor of The Bank of England, has finally admitted that the EU has more to lose from Brexit than the UK.

He also admitted that Britain's economy will defy his own gloomy forecasts, that formed the bedrock of Project Fear,and grow at a faster rate than expected.

The Bank of England is now “very likely” to improve its economic forecast next month, Mr Carney said as he said he was “surprised” that the economic slowdown that he forecast has not materialised.

He is quoted by the Telegraph:
"In the run up to the referendum we felt that it was the largest risk [to the economy]. There were a series of things that could have happened that would have had financial stability consequences. Of course having got through the night the day after the scale of the immediate risks around Brexit have gone down.

I am not saying there are greater short term risks on the continent in the transition than there are in the UK."

The question is, how much longer will he remain in his job?

Wednesday, January 11, 2017

US Charges Three UK Traders

Reuters reports that t he U.S. Justice Department has brought charges against three former traders (based in the UK) at JPMorgan Chase & Co, Citigroup Inc and Barclays Plc arising from a global probe into the manipulation of foreign exchange rates at major banks.

Richard Usher, formerly of JPMorgan, Rohan Ramchandani, formerly of Citigroup, and Christopher Ashton, formerly of Barclays, were charged with conspiring to restrain trade in an indictment filed at a federal court in Manhattan.