How much longer will this bear market go on for?

DannyCarey

Bank of England printing more money - yaaaaay!

MK62

sevenhills said:

MK62 said:

You can't have it both ways......if tax cuts lead to higher inflation, then why try to introduce any now.......and I'm not "demanding" bigger tax cuts.....I'm advocating no tax cuts at all at this current time.
 You are forgetting about the personal allowance freeze in your "basic maths".

So here's some maths......

I also think tax cuts are wrong at the moment, but when you do the maths, is it that big?
Has the market over reacted because this is political posturing, with no statement about the maths?

Have the markets over-reacted? That's hard to say really, and so remains to be seen......I certainly hope so, and a return to calmer times happens soon. Unfortunately though, they may have set events in motion which are difficult to contain now.....imho it's unlikely market confidence would be fully restored even by a total reversal - Mr Kwarteng may have lost his credibility and even U-turning may not allow him to fully recover that. So I expect he will stick to his guns no matter what.....save for a commons rebellion (however unlikely that is). We had better all hope he's right about this in the long run, even if it causes undue pain for some in the meantime.....

As for is it that big?

Well, for you and I maybe not......but for someone struggling to keep afloat?

RyanHello

Pound crashing..again.

You've got the blame the idiots in the conservative party voting for this mess.

Prism

Swipe said:

Prism said:

This is great news for most investors...

Not when the pound is low it's not as we don't get the benefit of lower prices

Yes agreed when it comes to global stocks the full benefits of a global crash on long term investors are not as good when our own currency drops. However as Type_45 has pointed out, there has also been a fall in UK stocks including some pretty big trust discounts appearing, which is handy.

Type_45

I said many months ago, below being one example, that GBP was being crushed. And now, many months later, it's suddenly on everyone's lips. GBP was at USD 1.25 at that point. 

DannyCarey

I wouldn't say the USD is "being crushed" though, would you?

If anything it maybe reinforces the dollar milkshake theory. 

Alistair31

Type_45 said:

I said many months ago, below being one example, that GBP was being crushed. And now, many months later, it's suddenly on everyone's lips. GBP was at USD 1.25 at that point. 

You could have made a fortune shorting the pound if you were so confident. Why didn’t you? 

Type_45

DannyCarey said:

I wouldn't say the USD is "being crushed" though, would you?

If anything it maybe reinforces the dollar milkshake theory. 

As I've explained ad nauseam, the USD is strong because it's being fled to globally as there is a credit crisis. The USD is the least bad option. It will therefore fail upwards when it does fail.

The currencies are being crushed. They will be replaced.

MK62

billy2shots said:

This is probably better taken to a political thread rather than us keep disagreeing but I will make one final post on my thoughts.

My issue is you keep bringing inflation into things. 
The government does not set inflation so you can't blame them if Bill (in your example) falls behind on the rate of inflation (like most of us are).  
However you can not deny the government have given him a tax break, Income tax and NI. To argue otherwise is insincere.

Inflation is a fact - it's here....to ignore it and pretend it doesn't exist is at best disingenuous. It's less of an issue when it's low, but at the current level it's a real problem. You can pretend it's not there, and claim Bill is getting a whacking great net income rise of 8.6%......but doing that either shows a lack of understanding of inflation and it's real effects, or you prefer to simply ignore it so that you can make a point that tax is somehow being cut.

Fair enough, the government doesn't set inflation, but they do set the policies to enable people to deal with it, as well as policies which have an influence on it. BTW, Bill is a pensioner, so was unaffected by the rise in NI, and will be unaffected by it's cancellation.

I'm confused, you're giving Bill more money then seem shocked his tax goes up even though he ends up 8.6% better off.

If prices rise 9.9% and Bill's net income rises 8.6%.....how is he better off? He may have 8.6% more pounds, but those pounds are each worth 9.9% less. As a simple example, in April 22 Bill earns £1276, and milk is 100p per carton, so he can buy 1276 cartons.

In Apr 23, milk has risen in price by 9.9% to 109.9p per carton.....his gross income rises 9.9%, but under current tax proposals, inc the 1p cut in basic rate, thanks to the frozen personal allowance his net income rises 8.6% to £1386, so now he can only buy 1261 cartons....despite his "tax cut" how is Bill better off?

Inflation is actually even more insidious than that once you drill down.......In April 22 Bill can buy 1276 cartons, but prices don't rise once a year on Apr 5th, even though his income does......they are rising every month....in May22 it would be c.1274.5 cartons, in June22 c1273.....and so on.

Let's pretend there is no inflation......in April 23 Bill would then in fact get a small tax reduction of just over 1/5th of a percent....but this is fantasy economics.....you can't pretend inflation doesn't exist (unless it's 0%), and you can't pretend government doesn't take it into account when they set policy.

If someone had a £10k net income in 2010, which had risen 40% to £14000 today, would you think they were 40% better off now than in 2010......or would you account for inflation and conclude that they are, in fact, worse off now?

I and others would bite your hand off for an after tax pay increase of 8.6%. so yes, that will HELP mitigate the energy increase cost. Not pay for it but HELP. Or should people earning more pay for the whole inflationary increase of lower earners and people on pensions?

Many people will end up with a less-than-inflation income increase......but at the lower end of the income scale, whatever they end up with gross, it will be even lower net, thanks to the government's continued personal allowance freeze. The 9.9% used above is just an example based on August's CPI. State pensions will lock at the Sept CPI figure (as yet unknown, and assuming the govt remain true to their word on the triple lock), and other pensions may lock at a different annual figure - but these are all based on....inflation.

renegade1

Type_45 said:

'68' handle on FTSE 100. Could we see a '67' handle in this session...

Aww, diddums