Is the next financial crisis upon us?

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Lagamorph
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PostRe: Is the next financial crisis upon us?
by Lagamorph » Tue Feb 18, 2020 6:44 pm

Just had an e-mail from TSB that my interest rate is being halved from 3% to 1.5%.
I'm probably lucky they're not lowering the balance interest applies to any lower, though it already only applies to £1,500. Anything above that earns nothing.

My actual savings account with Natwest that pays interest on my whole balance meanwhile now has an interest rate of a whopping 0.35%

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Lex-Man
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PostRe: Is the next financial crisis upon us?
by Lex-Man » Tue Feb 18, 2020 7:02 pm

Lagamorph wrote:Just had an e-mail from TSB that my interest rate is being halved from 3% to 1.5%.
I'm probably lucky they're not lowering the balance interest applies to any lower, though it already only applies to £1,500. Anything above that earns nothing.

My actual savings account with Natwest that pays interest on my whole balance meanwhile now has an interest rate of a whopping 0.35%


I had my members saver account interest slashed from 5% to half a percentage point. It's annoying, I'm buying a house but will look at something else when I've got it sorted.

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Wrathy
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PostRe: Is the next financial crisis upon us?
by Wrathy » Tue Feb 18, 2020 7:19 pm

I'll preface this by saying I work at a large container terminal. Containers are basically the backbone of the economy and, while there's obviously much more to it (stocks, property, etc), they're still a pretty good indicator of how things are going. Most of the things we buy on a day to day basis - clothes, electronics, food, car parts, etc - come through container terminals. And on an industry level, it's looking quite rough.

Basically, the way the UK works is that it imports a lot of stuff from the Far East (China, Japan, Korea, etc). The scale of this is huge - like, tens of thousands of articulated lorries worth of stuff a week. This stuff arrives on ships which are usually the equivalent of ten thousand HGVs each. In a general sense, there are probably as many as ten or fifteen of these per week across the major ports (Felixstowe, Southampton, London Gateway) and a lot of smaller ships at smaller ports (Liverpool, Edinburgh, Bristol etc). So, if you're unfamiliar with it, the capacity and volumes here are truly enormous. And this generally goes well, and while there are annual peaks and troughs of demand (less stuff after Chinese New Year, more stuff before Christmas), it's still justified the growth in vessel size and service regularity over the last 10/20 years.

The demand doesn't seem to match them anymore. These things operate on economies of scale, and to run a ship with 20,000 TEU (20ft Equivalent Units) you need to fill a lot (a LOT) of spaces on the vessel with cargo in order to pay for the fuel and staffing costs and then make money. To try and mitigate that, ships were being cancelled and not even leaving Asia in an attempt by shipping lines to artificially increase demand by reducing capacity on the Asia to North Europe trade routes. This is usually expected in March and April, but not to the extent we've seen this year, and not in February, and certainly not in August - November as we saw last year. Also remember at this point that they wouldn't simply do this if it was just one or two markets - these ships serve ports in multiple countries, and bigger services like these have services which connect that cargo to more local destinations.

An interesting (and hopefully reasonably jargon-free) article on this is here: https://theloadstar.com/lack-of-cargo-s ... ellations/

What I'm saying here is: the picture isn't good. It wasn't good before Coronavirus, and while we haven't received any new intelligence or confirmation of additional new void sailings, it doesn't take much to go from stuff not being manufactured due to Coronavirus keeping factories closed and reducing the ability for imports to even be made, therefore meaning less stuff coming into the UK for people to buy, and in turn the impacts on inflation etc which that may have. It's not for me to declare a crisis or anything, but it wouldn't really surprise me at this point.

Last edited by Wrathy on Tue Feb 18, 2020 7:53 pm, edited 1 time in total.
Dual
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PostRe: Is the next financial crisis upon us?
by Dual » Tue Feb 18, 2020 7:39 pm

The unregulated financial sector that caused the 2008 crash are still running riot so another crash soon appears likely.

Hold onto your cash folks. No big purchases anytime soon.

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Hulohot
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PostRe: Is the next financial crisis upon us?
by Hulohot » Tue Feb 18, 2020 8:32 pm

Wrathy, what a fantastic post. Thank you for your insight! Usually these economic woes start with exactly what you are talking about.

I guess it would be a fair assumption that trade from Asia is going to be significantly lower over the next few months? Are you expecting a continued slow down in shipping quantities? How might that affect the dockyard industry?

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Wrathy
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PostRe: Is the next financial crisis upon us?
by Wrathy » Tue Feb 18, 2020 9:51 pm

Hulohot wrote:Wrathy, what a fantastic post. Thank you for your insight! Usually these economic woes start with exactly what you are talking about.

I guess it would be a fair assumption that trade from Asia is going to be significantly lower over the next few months? Are you expecting a continued slow down in shipping quantities? How might that affect the dockyard industry?


Yes, though a lot of this is sort of expected with the fallout from Golden Week and slow resumption of production in China anyway. This should be factored into every annual budget, as it’s an annual event based on the Asian calendar, but it is much more than what was the budget this time around.

Yes, beyond golden week.

Can’t say. We don’t know the scale or duration, or if we’ll see a boost as orders are rushed and back filled to unthe slowdown once we get past Coronavirus. There’s a lot of variables and we only have concrete information into February and March. We have some insight into April and then May onwards are basically unknown.

Schedules are done based on roughly 2 to 3 months in advance; services take between 70 and 90 days to complete a full “loop”. Think of this as if a ship starts from Shanghai, calls at a few other Asian ports, calls at Singapore, goes through Suez, a couple of major European ports (Rotterdam, Hamburg), back south through Suez, back to the first port of Shanghai, And then starts the rotation again). We’d be expecting to see some indication of what’ll arrive in Europe during April and May over the next few weeks - more specifically, if there are any new void / cancelled calls. Without this we can only assume BAU weekly calls at their regular volumes; otherwise it becomes far too speculative.

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Curls
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PostRe: Is the next financial crisis upon us?
by Curls » Wed Feb 19, 2020 2:00 am

So should I buy a house?

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Green Gecko
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PostRe: Is the next financial crisis upon us?
by Green Gecko » Wed Feb 19, 2020 4:43 am

Curls wrote:So should I buy a house?

I actually wrote a punk song about this, it goes something like

Buy a house
Buy a house
Its a good idea to
Buy a house

And there you have it.

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Grumpy David
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PostRe: Is the next financial crisis upon us?
by Grumpy David » Wed Feb 19, 2020 6:28 am

Hulohot wrote:HSBC has announced they are cutting 10,000 jobs and scaling back operations in the U.S and Europe. They rely heavily on the Chinese markets for the majority of their profits. Has the economic slowdown caused by Coronavirus in China caused this announcement from HSBC today?

Deutche Bank have been struggling for a while now with plunging share prices last year and difficulty selling assets.

The U.S have been propping up the repo markets printing trillions of dollars and injecting it for months now, and the stop date for this behaviour keeps being pushed back.

Jan. 21, 2020 10:13 am ET
The Federal Reserve added $90.8 billion in short-term money to financial markets Tuesday.

https://www.google.com/amp/s/www.wsj.co ... 1579619605

Gold prices have been going up, a typical reaction to economic uncertainty.



I'm sure there are lots more signs that a new, significant crisis is upon us, but do you think it is likely? Or is everything fine.

The media and governments seem to state that everything is generally fine, which is what happened before 2008.


HSBC said the fall in profits was mainly due to $7.3bn in write-offs related to its investment and commercial banking operations in Europe.

Coronavirus will have an impact later if it continues spreading rapidly and more people in quarantine but I doubt HSBC would be the most affected company. Some manufacturer companies would probably be most hit/affected.

My understanding of Deutsche Bank is they're just struggling to compete against the American Investment companies.

I don't think there are the typical signs of on overheating economy that usually occurs before a crash but often crashes are "black Swan" events so trying to predict when and how they happen usually means you'll be incorrect.

Rocsteady wrote:
Squinty wrote:
Peter Crisp wrote:
KK wrote:I don't know, but NS&I has also announced they're cutting their rates from 1st May to an even more paltry level.

They don't want you to save, they want you to SPEND.


I'm a saver by nature and the rates at the moment are indeed piss poor. I've never had to use credit in my life and always save up for things before I buy them. The difference between the rates for borrowers and savers is just insane.


I'm a saver by nature as well. Only have the mortgage as a debt hanging over me. The rates have been shite over the past few years. There's very little incentive to do it beyond 'for a rainy day'.

Invest in a tracker fund rather than in a bank. Think I've been hitting about 9% over the last 18 months.


Yep! Only way to get a decent return is this. Since June 2018, I've made 25% in tax-free gains. Would struggle to have one tenth of that in 2 years with cash!

Last edited by Grumpy David on Wed Feb 19, 2020 1:53 pm, edited 2 times in total.
Dual
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PostRe: Is the next financial crisis upon us?
by Dual » Wed Feb 19, 2020 8:02 am

Grumpy David wrote:
Rocsteady wrote:
Squinty wrote:
Peter Crisp wrote:
KK wrote:I don't know, but NS&I has also announced they're cutting their rates from 1st May to an even more paltry level.

They don't want you to save, they want you to SPEND.


I'm a saver by nature and the rates at the moment are indeed piss poor. I've never had to use credit in my life and always save up for things before I buy them. The difference between the rates for borrowers and savers is just insane.


I'm a saver by nature as well. Only have the mortgage as a debt hanging over me. The rates have been shite over the past few years. There's very little incentive to do it beyond 'for a rainy day'.

Invest in a tracker fund rather than in a bank. Think I've been hitting about 9% over the last 18 months.


Yep! Only way to get a decent return is this. Since June 2018, I've made 25% in tax-free gains. Would struggle to have one tenth of that in 2 years with cash!


Any hot tips? Which tracker fund are using?

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Rocsteady
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PostRe: Is the next financial crisis upon us?
by Rocsteady » Wed Feb 19, 2020 9:43 am

Dual wrote:
Grumpy David wrote:
Rocsteady wrote:
Squinty wrote:
Peter Crisp wrote:
KK wrote:I don't know, but NS&I has also announced they're cutting their rates from 1st May to an even more paltry level.

They don't want you to save, they want you to SPEND.


I'm a saver by nature and the rates at the moment are indeed piss poor. I've never had to use credit in my life and always save up for things before I buy them. The difference between the rates for borrowers and savers is just insane.


I'm a saver by nature as well. Only have the mortgage as a debt hanging over me. The rates have been shite over the past few years. There's very little incentive to do it beyond 'for a rainy day'.

Invest in a tracker fund rather than in a bank. Think I've been hitting about 9% over the last 18 months.


Yep! Only way to get a decent return is this. Since June 2018, I've made 25% in tax-free gains. Would struggle to have one tenth of that in 2 years with cash!


Any hot tips? Which tracker fund are using?

25% jesus, how?

I use Vanguard, as the biggest firm alongside BlackRock your money's pretty secure. I go with one of their trackers that splits money between bonds and equities and spreads money across developed and developing world, just so the risk is reduced. I try invest almost all savings I get each month into it now. Obviously there is a risk but with the terrible bank interest rates it makes sense, the market generally wins out. Wouldn't drop money in there if you're gonna want it in the short term though ( I was recommended by an investment banker friend to expect to keep it in at the very least a couple of years before investing).

Vanguard make it super simple though, check their site out and they lay it out very clearly.

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Grumpy David
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PostRe: Is the next financial crisis upon us?
by Grumpy David » Wed Feb 19, 2020 1:50 pm

Dual wrote:
Grumpy David wrote:
Rocsteady wrote:
Squinty wrote:
Peter Crisp wrote:
KK wrote:I don't know, but NS&I has also announced they're cutting their rates from 1st May to an even more paltry level.

They don't want you to save, they want you to SPEND.


I'm a saver by nature and the rates at the moment are indeed piss poor. I've never had to use credit in my life and always save up for things before I buy them. The difference between the rates for borrowers and savers is just insane.


I'm a saver by nature as well. Only have the mortgage as a debt hanging over me. The rates have been shite over the past few years. There's very little incentive to do it beyond 'for a rainy day'.

Invest in a tracker fund rather than in a bank. Think I've been hitting about 9% over the last 18 months.


Yep! Only way to get a decent return is this. Since June 2018, I've made 25% in tax-free gains. Would struggle to have one tenth of that in 2 years with cash!


Any hot tips? Which tracker fund are using?


"Time in the market beats timing the market".

I use Vanguard and only have money in:

FTSE Global All Cap Index Fund Accumulation

It has no bonds to counter balance the stocks but since I'm treating it as super long term savings and I have a healthy cash emergency fund, I'm fine with this. Plus given how globally diversified the portfolio is, I actually think it's less risky than "100% equities" would suggest.

Rocsteady wrote:I use Vanguard, as the biggest firm alongside BlackRock your money's pretty secure. I go with one of their trackers that splits money between bonds and equities and spreads money across developed and developing world, just so the risk is reduced. I try invest almost all savings I get each month into it now. Obviously there is a risk but with the terrible bank interest rates it makes sense, the market generally wins out. Wouldn't drop money in there if you're gonna want it in the short term though ( I was recommended by an investment banker friend to expect to keep it in at the very least a couple of years before investing).

Vanguard make it super simple though, check their site out and they lay it out very clearly.


Is that one of the Life Strategy funds? It tilts / over weights the UK stock market. I understand why they do this but I'd prefer to just mirror the market caps.

Last edited by Grumpy David on Mon Apr 13, 2020 11:48 am, edited 1 time in total.
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Rightey
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PostRe: Is the next financial crisis upon us?
by Rightey » Tue Mar 10, 2020 2:23 pm

Well Hulohut may have been on to something with the way the markets have been going these last few days. Housing prices are starting to collapse, oil prices are collapsing, corona virus is spreading which is going to slow things down further etc.

Pelloki on ghosts wrote:Just start masturbating furiously. That'll make them go away.

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PostRe: Is the next financial crisis upon us?
by Peter Crisp » Tue Mar 10, 2020 3:16 pm

This topic is why I've put myself down for a 1 way trip to Mars.

jiggles wrote:Nobody with a VR headset is going to be using it regularly this time next year, let alone in 4 years time.


Posted 16th March 2016. Let's see.
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PostRe: Is the next financial crisis upon us?
by Moggy » Tue Mar 10, 2020 3:27 pm

Peter Crisp wrote:This topic is why I've put myself down for a 1 way trip to Mars.


Your post history is why we’ve all sponsored your one way trip to Mars…. ;)

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PostRe: Is the next financial crisis upon us?
by Preezy » Tue Mar 10, 2020 3:39 pm

How else would the Martians learn about HS2 and Luton Town?

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PostRe: Is the next financial crisis upon us?
by OrangeRKN » Tue Mar 10, 2020 4:01 pm

HS2 would probably be cheaper if it did go to Mars!!1!

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Rocsteady
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PostRe: Is the next financial crisis upon us?
by Rocsteady » Tue Mar 10, 2020 6:49 pm

Grumpy David wrote:
Dual wrote:
Grumpy David wrote:
Rocsteady wrote:
Squinty wrote:
Peter Crisp wrote:
KK wrote:I don't know, but NS&I has also announced they're cutting their rates from 1st May to an even more paltry level.

They don't want you to save, they want you to SPEND.


I'm a saver by nature and the rates at the moment are indeed piss poor. I've never had to use credit in my life and always save up for things before I buy them. The difference between the rates for borrowers and savers is just insane.


I'm a saver by nature as well. Only have the mortgage as a debt hanging over me. The rates have been shite over the past few years. There's very little incentive to do it beyond 'for a rainy day'.

Invest in a tracker fund rather than in a bank. Think I've been hitting about 9% over the last 18 months.


Yep! Only way to get a decent return is this. Since June 2018, I've made 25% in tax-free gains. Would struggle to have one tenth of that in 2 years with cash!


Any hot tips? Which tracker fund are using?


"Time in the market beats timing the market".

I use Vanguard and only have money in:

FTSE Global All Cap Index Fund Accumulation

It has no bonds to counter balance the stocks but since I'm treating it as super long term savings and I have a healthy cash emergency fund, I'm fine with this. Plus given how globally diversified the portfolio is, I actually think it's less risky than "100% equities" would suggest.

Rocsteady wrote:I use Vanguard, as the biggest firm alongside BlackRock your money's pretty secure. I go with one of their trackers that splits money between bonds and equities and spreads money across developed and developing world, just so the risk is reduced. I try invest almost all savings I get each month into it now. Obviously there is a risk but with the terrible bank interest rates it makes sense, the market generally wins out. Wouldn't drop money in there if you're gonna want it in the short term though ( I was recommended by an investment banker friend to expect to keep it in at the very least a couple of years before investing).

Vanguard make it super simple though, check their site out and they lay it out very clearly.


Is that one of the Life Strategy funds? It tilts / over weights the UK stock market. I understand why they do not this but I'd prefer to just mirror the market caps.

How are those 25% returns now?

I'm actually in the negative after mentioning gains in here previously, I really hope no one invested at that point!

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Grumpy David
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PostRe: Is the next financial crisis upon us?
by Grumpy David » Tue Mar 10, 2020 9:00 pm

Rocsteady wrote:
Grumpy David wrote:
Dual wrote:
Grumpy David wrote:
Rocsteady wrote:
Squinty wrote:
Peter Crisp wrote:
KK wrote:I don't know, but NS&I has also announced they're cutting their rates from 1st May to an even more paltry level.

They don't want you to save, they want you to SPEND.


I'm a saver by nature and the rates at the moment are indeed piss poor. I've never had to use credit in my life and always save up for things before I buy them. The difference between the rates for borrowers and savers is just insane.


I'm a saver by nature as well. Only have the mortgage as a debt hanging over me. The rates have been shite over the past few years. There's very little incentive to do it beyond 'for a rainy day'.

Invest in a tracker fund rather than in a bank. Think I've been hitting about 9% over the last 18 months.


Yep! Only way to get a decent return is this. Since June 2018, I've made 25% in tax-free gains. Would struggle to have one tenth of that in 2 years with cash!


Any hot tips? Which tracker fund are using?


"Time in the market beats timing the market".

I use Vanguard and only have money in:

FTSE Global All Cap Index Fund Accumulation

It has no bonds to counter balance the stocks but since I'm treating it as super long term savings and I have a healthy cash emergency fund, I'm fine with this. Plus given how globally diversified the portfolio is, I actually think it's less risky than "100% equities" would suggest.

Rocsteady wrote:I use Vanguard, as the biggest firm alongside BlackRock your money's pretty secure. I go with one of their trackers that splits money between bonds and equities and spreads money across developed and developing world, just so the risk is reduced. I try invest almost all savings I get each month into it now. Obviously there is a risk but with the terrible bank interest rates it makes sense, the market generally wins out. Wouldn't drop money in there if you're gonna want it in the short term though ( I was recommended by an investment banker friend to expect to keep it in at the very least a couple of years before investing).

Vanguard make it super simple though, check their site out and they lay it out very clearly.


Is that one of the Life Strategy funds? It tilts / over weights the UK stock market. I understand why they do not this but I'd prefer to just mirror the market caps.

How are those 25% returns now?

I'm actually in the negative after mentioning gains in here previously, I really hope no one invested at that point!


Minus 20%. :lol: My monthly direct debit payment literally went last week and really was with hindsight terrible timing.

Used it as an opportunity to chuck an extra 1k into the ISA and 1.8k into the SIPP. I'm a HR taxpayer so it's 3k effectively.

My investments are long term and my pension is 40 years away from being something I plan to drawdown on so no concern from me. The losses are only realised if selling and I've only plans to buy.

I also keep 75% of my total savings in cash savings accounts so in the context of total net worth, it's not changed dramatically. I have no lump sum costs in the foreseeable future and my cash savings emergency fund is probably a fair bit larger than it needs to be so am likely to invest a few more lump sums in addition to monthly drip feeding in.

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Peter Crisp
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PostRe: Is the next financial crisis upon us?
by Peter Crisp » Tue Mar 10, 2020 10:12 pm

Moggy wrote:
Peter Crisp wrote:This topic is why I've put myself down for a 1 way trip to Mars.


Your post history is why we’ve all sponsored your one way trip to Mars…. ;)


You've all fallen for my plan to have you all pay for the trip :toot: .
I just hope that scene from Total Recall isn't scientifically accurate and my eyes won't pop out like that if I accidentally go outside without a space suit.

jiggles wrote:Nobody with a VR headset is going to be using it regularly this time next year, let alone in 4 years time.


Posted 16th March 2016. Let's see.

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