Preparedness for when

anika

Hi all. I am still reading your posts, everyday with breakfast! I don't do much in the way of prepping but read books you mention and look at other prepping sites for ideas, mainly gaining a little knowledge along the way. I must say you are all very interesting to 'listen' to. I also find it good to hear first hand from the Greek situation, and thank 1tonsil for posting.
I follow everyday along with things like zero hedge, Bloomberg etc as I have sold my house and waiting to buy, but don't want to yet! And yes my cash is in the banks!! And as I read your posts it makes me very nervous, but were would I put it?? Under the bed would make me even worse!

Thanks again for your interesting chatter.

[Deleted User]

greenbee wrote: »

Not that useful in rural areas... The one thing worse that the broadband is the mobile signal... :cool:

On all the networks?

moneyistooshorttomention

Bedsit_Bob wrote: »

On all the networks?

I admit to being a bit cynical on this. I understand the mobile providers are "pulling it" by not co-operating with each other for our benefit and so your reception is just down to which particular provider you have currently - hopefully that will change in the future and co-operation will be forced onto them.

However, I checked mobile reception for the Big 4 locally recently and one was particularly good (no problems at all near me) and one particularly bad. Now, having said that, I was left sitting there thinking "why don't the workmen in this area check carefully which is the best provider and that's the one they choose?". If all else fails - then have 2 mobile phones (each of them with a different provider). The number of times workmen in this rural-ish area state they cant contact the customer to tell them they are about to let them down is legion - and 99% of the time they say its down to "poor mobile reception" and you never know whether you are being told the truth or no.

Thinks.....next time I hear that one I think I'll ask which provider they have....hmmm.....LOL.

Frugalsod

anika wrote: »

I follow everyday along with things like zero hedge, Bloomberg etc as I have sold my house and waiting to buy, but don't want to yet! And yes my cash is in the banks!! And as I read your posts it makes me very nervous, but were would I put it?? Under the bed would make me even worse!

Thanks again for your interesting chatter.

The problem with the risk of bail ins is how low the bar will be set? So the solution could be dozens of bank accounts to spread the money about and at a much lower level than the official deposit protection limit. That would minimise the risks as much as possible. At least then you could transfer it to the solicitor from all the accounts as you need it.

The problem is that we will not be able to work around the bail in rules once the bank holiday starts.

As for keeping some under the bed it is no worse than in a bank. The risks of keeping it in a bank are significant losses from a bail in as bank deposits do not pay enough interest to account for bail in risk. The risk of robbery at home are unlikely to change much until the bank holiday starts. Then burglars might think that homes are more worthwhile to target.

Frugalsod

moneyistooshorttomention wrote: »

This is one of the points that concerns me re if bail-ins happened - ie there will be people with "house equity money" sitting in savings at the time if that happened. Whether it be down to FTB'ers with their deposit savings in the banks/etc or those "moving up ladder" and they had got house equity money sitting in banks/etc whilst they were en route to their next house (eg possibly living in rented housing whilst having sold House 1 and waiting for House 2 to be available to buy).

One reason I've always thought there would be No Way Hosea I would have my house equity money sitting banked somewhere whilst I looked for next-house-to-buy.

If it came to it - then I could see the Housing Market grinding to a halt one way or another. Add together those refusing to rent whilst they "moved up", those refusing to downsize as planned (as at least money tied-up in bricks and mortar cant get stolen by any bail-in), etc, etc.

It looks entirely possible that IF it came to it then many people would find themselves stuck living exactly where they are - no matter how unsuitable.

The problem is that a bank bail in will not be independent of problems in the property market. It will first be proceeded by liquidity crunch. When the next credit crunch hits it will first impact ability of people to get mortgages so many pending sales will collapse because of lack of mortgage availability and mortgages are withdrawn. This is what we saw in 2008. So people will have to wait it out in terms of selling or moving.

If things get so bad that there is a bail in then there will be very few housing transactions anyway and these might only be cash purchases.

So if you had sold your property and were waiting to buy another, the only issue is what will happen to your wealth. If you keep it in the bank it could be wiped out in a bail in. Or of you had bought something then it could be reduced in value simply because no one has any money to buy and since property is valued at the margins. So you could gazunder someone for a quick purchase. Even if you bought outright your new purchase could be worth 20% 30% or even 60% less so you would have significant losses either way. Some will proceed anyway because even a 60% loss on property exceeds a 100% loss in a bail-in. Though the same could apply to sellers who might back out rather than accept cash, which could be liable to a bail in.

What I expect is significant credit contraction as debts become unsustainable. This will lead to bank losses and rising bank rates to make up for higher risks even if they are willing to lend to you.

If banks collapse all the credit that they created will be come due so you could see hedge funds buy the debt and force bankruptcies on creditors to liquidate any value in the property. Or you could be asked to remortgage with a different lender and that would be at higher riskier rates.

Only those with significant negative equity could be safe from creditors, as long as they can still pay the mortgage (and keep their jobs). Those will no mortgage outstanding will also be fine even if their homes collapse in value 90%.

[Deleted User]

moneyistooshorttomention wrote: »

However, I checked mobile reception for the Big 4 locally recently and one was particularly good (no problems at all near me) and one particularly bad.

That MiFi Modem I linked to is unlocked, meaning it'll work on pretty much any network, so you can just bung in a sim for the best provider for the area.

westlothianlass

Hi all, my new "toys" arrived today, a couple of sawyer mini filters for when we are out walking. So far im very impressed with them, they are incredibly light, easy to use and were also only £17 instead of 30 from the rainforest shop.
The weather has been up and down over the last few days which seems to be confusing the veg no end, some things are bolting and others have barely started growing, on a plus point its so wet up here we rarely have a water shortage ( got to look for the shiny lining:D) .

anika

One small question, when, if it happens, does anyone think there will be an economic crash? I certainly think it will come, but there is a small thought that maybe this is the new norm!! We all say house prices can't keep rising, but they do, maybe the days of owning are over and renting is the norm. Back in the 80's when a 10 thousand pound house doubled in a couple of years, we said it then!
If we have got this far with printing money, why not keep doing it! One thing is for sure, things don't feel right!

Frugalsod

anika wrote: »

One small question, when, if it happens, does anyone think there will be an economic crash? I certainly think it will come, but there is a small thought that maybe this is the new norm!! We all say house prices can't keep rising, but they do, maybe the days of owning are over and renting is the norm. Back in the 80's when a 10 thousand pound house doubled in a couple of years, we said it then!
If we have got this far with printing money, why not keep doing it! One thing is for sure, things don't feel right!

The fact that you can see it is a bubble and that something is wrong is a start. Many cannot or will not see that things are not going well. With any bubble you have to prepare for it, even though you do not know when it will burst. Some think it could be September others Early October. It may be able to carry on till 2016. No one really knows.

It all depends on the final trigger that sets off the alarm bells. In 2008 it was the collapse of two hedge funds linked to sub prime loans. This time it could be sub prime auto loans, or junk debt linked to the Fracking industry, or debt linked to the Carry trade where businesses have borrowed dollars from banks but have bought assets in emerging markets. This is estimated to be $9 to $10 Trillion and there will be credit default swaps tied to these debts which may be bigger still.

There are many who will trade right up until the crash and then hope to sell out so eliminating their losses. The problem is that market liquidity is non existent in most stock markets nowadays so when a big sell order comes through it will come up against a no bid price which means no one wants to buy at that price or want it at all. Some have described it as screaming fire in a crowded theatre but the door that people entered by is now significantly smaller. So when everyone tries to leave there is a stampede and no one gets through.

While the price increases of the 80's were ridiculous they were aided by rising wages and lots of credit as a result of the relaxation of the banking regulations. Now we have had stagnant median wages since 2003 so the only boost has been a tidal wave of money from abroad escaping collapsing nations.

1Tonsil

Frugalsod wrote: »

The problem is that a bank bail in will not be independent of problems in the property market. It will first be proceeded by liquidity crunch. When the next credit crunch hits it will first impact ability of people to get mortgages so many pending sales will collapse because of lack of mortgage availability and mortgages are withdrawn. This is what we saw in 2008. So people will have to wait it out in terms of selling or moving.

If things get so bad that there is a bail in then there will be very few housing transactions anyway and these might only be cash purchases.

So if you had sold your property and were waiting to buy another, the only issue is what will happen to your wealth. If you keep it in the bank it could be wiped out in a bail in. Or of you had bought something then it could be reduced in value simply because no one has any money to buy and since property is valued at the margins. So you could gazunder someone for a quick purchase. Even if you bought outright your new purchase could be worth 20% 30% or even 60% less so you would have significant losses either way. Some will proceed anyway because even a 60% loss on property exceeds a 100% loss in a bail-in. Though the same could apply to sellers who might back out rather than accept cash, which could be liable to a bail in.

What I expect is significant credit contraction as debts become unsustainable. This will lead to bank losses and rising bank rates to make up for higher risks even if they are willing to lend to you.

If banks collapse all the credit that they created will be come due so you could see hedge funds buy the debt and force bankruptcies on creditors to liquidate any value in the property. Or you could be asked to remortgage with a different lender and that would be at higher riskier rates.

Only those with significant negative equity could be safe from creditors, as long as they can still pay the mortgage (and keep their jobs). Those will no mortgage outstanding will also be fine even if their homes collapse in value 90%.

We have decided not to sell our house here in Greece. The mortgage is down to 175 euros a month and it is cheap to run. If we sold we are only allowed to take out two thousand euros from the country. We would not be allowed to transfer that money to our bank in the UK either with the cash and banking restrictions. If we moved, we would have to shell out at least four hundred a month for rent, even for a small flat. It makes much more sense to stay here in the house we own.