Of boom and bust

cells

Generali wrote: »

Mostly investment banking. Hundreds of thousands of jobs have gone in the Square Mile alone. The bubble was in the financing of housing not in housing itself.

There are only 2.5 hundreds of thousands of jobs in the square mile so I doubt very much even 1 of those 2.5 units has gone

I also doubt central London has lost out man jobs let alone lots seeing as how office rents are sky high and there is demand for a lot more offices

Also I dont think your statement makes any sense.
What exactly do you mean.

Generali

cells wrote: »

There are only 2.5 hundreds of thousands of jobs in the square mile so I doubt very much even 1 of those 2.5 units has gone

I also doubt central London has lost out man jobs let alone lots seeing as how office rents are sky high and there is demand for a lot more offices

Also I dont think your statement makes any sense.
What exactly do you mean.

In 2007 there were c. 600,000 working in finance in the square mile.

What don't you understand about what I'm saying old thing?

cells

Generali wrote: »

Central banks haven't targeted debt burdens in the past but increasingly that's the future.

there is no way they can influence that outside of the banking system and if they tried they would find that players in the economy would simply do business outside the banking system.

what is the Canadian going to do, dictate government policy on debt and deficit? Dictate to companies how much paper they can issue? dictate on private contracts?

Generali

cells wrote: »

what is the Canadian going to do, dictate government policy on debt and deficit? Dictate to companies how much paper they can issue? dictate on private contracts?

Yes. That is exactly what Central Banks are doing.

No more BTL loans for example.

Political risk is the big watchword for this year I reckon along with the collapse in the oil price. Avoid BTL and oil. Buy consumer companies. Unilever might be the single best buy out there.

cells

Generali wrote: »

In 2007 there were c. 600,000 working in finance in the square mile.

What don't you understand about what I'm saying old thing?

you have to be mad if you think there were 600,000 working in finance in the square mile in 2007

Analysis of the Financial Service Authority's database by corporate finance boutique IMAS, shows that people employed in frontline jobs by banks have fallen by nearly 20,000 since the financial crisis from a peak of about 170,000 in mid-2007.

That suggests 170,000 in mid 2007 peak. Which seem to tally with ONS data that says ~300,000 people work in the city of London (clearly not all the jobs there will be banking)

also I have just had a look at the passenger numbers for liverpool st station and they are ~10% higher now than in 2007 suggesting no mass NET layoffs unless all those hundreds of thousands of bankers are taking the tube to the square mile to look at their old empty offices with fond memories


also its difficult to say with confidence that technology has had not played the bigger part in reducing the need for people employed by banks.

cells

Generali wrote: »

Yes. That is exactly what Central Banks are doing.

No more BTL loans for example.

Political risk is the big watchword for this year I reckon along with the collapse in the oil price. Avoid BTL and oil. Buy consumer companies. Unilever might be the single best buy out there.

Thanks for the advice gen your a clever man but I think you have this one totally wrong and almost verging on barking mad with that view.

The role of government and the central bank is not to eliminate sectors of the economy that pose a risk it is to manage them. why not ban residental mortgages there is a risk there too, also credit cards ban them, business loans probably the riskiest of the lot! BANED. Hell lets close all the banks and there will no longer be any risk!

Generali

cells wrote: »

Thanks for the advice gen your a clever man but I think you have this one totally wrong and almost verging on barking mad with that view.

The role of government and the central bank is not to eliminate sectors of the economy that pose a risk it is to manage them. why not ban residental mortgages there is a risk there too, also credit cards ban them, business loans probably the riskiest of the lot! BANED. Hell lets close all the banks and there will no longer be any risk!

You are right, the roles should be to manage risk.

Unfortunately Governments and their lackeys often stray a very long way beyond that remit.

Political risk has long been the biggest risk for BTL: as more people rent, the more renters that want a soft option have a louder voice. That might be right or wrong but that sort of morality means nowt when dealing with politicians.

cells

Generali wrote: »

Vanguard S&P 500 ETF would be my choice as you have the time to absorb some short term loss for longer term gain.

Betting on large US companies has been a great idea for the last 80 years, pretty much.

Beyond that, diversify. It really is the only free lunch. If you don't want to bet on the US buy a MSCI World ETF as second choice. That basically buys everything.

Bonds are a lousy bet (last time I looked 1/3 of the benchmark that we use at work for fixed income had a negative yield, i.e. you pay to lend the company or Government money) and I'd be wary of property for similar yield reasons.

Infrastructure looks expensive on the face of it but there has been underinvestment in that sector for decades and we're going to have to pay investors a decent return in order to attract funds into that asset class.

Peer to peer lending could be interesting. Aussie firms pay out 8+% to lenders. High risk though (IMHO).

Avoid?

Oilies and miners. Also junk bond funds as they will get hit by smaller oil companies and servicing companies going bust. Oil companies and miners going bust will be a theme of 2016 I think. Glencore might be a good short. RIO and BHP will be raging buys at some point but not right now I think.

As always, time will tell.

ETA: Heck, I forgot to add. Avoid FTSE ETFs as they will get hit by the mining/oilies bust IMO and definitely avoid synthetic ETFs even if they're cheaper than ETFs underwritten by proper assets, not a basket of crap that the investment bank picked up on the tube that morning.

you should do a thread about peoples views on what will be a good investment over the next year and see what the responses are like and compare in a years time

cells

Generali wrote: »

You are right, the roles should be to manage risk.

Unfortunately Governments and their lackeys often stray a very long way beyond that remit.

Political risk has long been the biggest risk for BTL: as more people rent, the more renters that want a soft option have a louder voice. That might be right or wrong but that sort of morality means nowt when dealing with politicians.

the good thing about BTL in the UK is that there are a lot of landlords (as over half the private rented stock is own by an investor with just 1 property)

Just to keep things round lets say there are 3.5 million individual landlords. Most of them will be husband/wife/partner so that is 7 million votes many of them will be older folk with grown up kids so will directly or indirectly benefit from their parents wealth.

So a bare min of 7 million votes for not killing BTL and maybe closer to double that if you include their children who will in a lot of cases be over the voting age.

So something like 7-14 million voters who wont want it killed and they will be the group more likely to vote due to age and background.


vs how many renters?
And thats before you take into account you cant harm the price of rental property without harming the price of all other property.


on a purely political basis lowering house prices will be toxic.
killing off BTL would also be toxic
taxing BTL in a covert way that does not kill the industry but extracts a couple of billion more while most the landlords dont understand it, well maybe they can get away with that.

kinger101

happylucky wrote: »

Just out of interest, if you were looking to invest a substantial sum (moving out of cash). Where would you put it? Decent timeframe of say > 10 - 15 years.

I am really struggling to know where is "safest" to invest right now.

I'll send you my sort code and account number in a private message. I can look after it for you.