Three million cash-strapped Brits fail to save

panduranghari

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This, along with the above post, explains how a massive fraud is being played on the people by the complicit and scheming governments, banks, and financial institutions, in different countries with complete impunity. In a nutshell, counterfeiting, or encouraging thereof, is perfectly legal, as long as the action is performed by the government.

Exter's Pyramid


Exter is known for creating Exter's Pyramid (also known as Exter's Golden Pyramid and Exter's Inverted Pyramid) for visualizing the organization of asset classes in terms of risk and size. In Exter's scheme, gold forms the small base of most reliable value, and asset classes on progressively higher levels are more risky. The larger size of asset classes at higher levels is representative of the higher total worldwide notional value of those assets. While Exter's original pyramid placed Third World debt at the top, today derivatives hold this dubious honor.

here is a better depiction;

 

asianobserve

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Well to start with Mr. Buffet did not demand for a bailout of Berkshire Hathaway at the height of the financial crisis... But some insight on what he did during the financial crisis, true to his statement above he took advantage of the market panic ("Be fearful when others are greedy, and be greedy when others are fearful.") - http://www.rationalwalk.com/wp-content/uploads/2011/02/BuffettInFinancialCrisis.pdf

Not mentioned in the above article is the purchase of Burlington Northern Sta. Fe (railroad company) in November 2009 for $34 Billion. http://www.msnbc.msn.com/id/3359974.../buffett-buying-burlington-northern-railroad/
 

panduranghari

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Well to start with Mr. Buffet did not demand for a bailout of Berkshire Hathaway at the height of the financial crisis... But some insight on what he did during the financial crisis, true to his statement above he took advantage of the market panic ("Be fearful when others are greedy, and be greedy when others are fearful.") - http://www.rationalwalk.com/wp-content/uploads/2011/02/BuffettInFinancialCrisis.pdf

Not mentioned in the above article is the purchase of Burlington Northern Sta. Fe (railroad company) in November 2009 for $34 Billion. Buffett buying Burlington Northern railroad - Business - US business - msnbc.com

Try to disprove this.

Thats the reason most libertarians hate St. Warren of Buffet - the lecherous sage of Omaha.

 

pmaitra

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Those that did not save, are saved; those that did, are in hot soup:

Does George Osborne care about the state of the nation – or is it all Balls?

Comment from article above:
boudicca
Today 09:52 PM

By Quantatitive Easing. Destroying the savings and pensions of the people who didn't borrow to excess against their assets.

I am not in debt. As a single mother, it would have been very easy to follow the 'spend today, pay tomorrow' route. But I didn't. I paid off my mortgage; I put money aside for my (and my sons' futures). I paid into a pension.

Why bother? The Government is determined to inflate away the debt so that those who did behave irresponsibly are saved whilst my savings are devalued.

If I could afford a financial advisor to protect my limited savings, I'd be off-shoring it tomorrow.
 

asianobserve

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Still Mr. Buffet did ask ask that Berkshire Hathaway be bailed out.

Is it the same Buffet who demanded a bailout for his private fund Berkshire Hathway when 2008 financial crisis wiped off 60% of the apparent personal fortune.
Of course I'm not saying Mr. Buffet is a saint, I'm just saying he's a shrewd investment person and I like him more for his oftentimes contrarian approach to investment. Anyway, that $95 Billion did not go to Berkshire Hathaway directly (it went to the bailed out companies and Berkshire has not yet divested any shares from these companies). TARP in the first place was a gift by Paulson to his fellow investment bankers. IN the first place Berkshire Hathaway does not control these companies and thus should not be faulted for their reckless exposures to those crazy derivatives. In fact, Mr. Buffet in his 2002 letter to the stockholders of Bershire Hathaway already warned that "derivatives are weapons of mass destruction."

But what happened at the height of the financial crisis was that Berkshire Hathaway increased its holdings in most of these companies (but still without management control) when their share prices dropped (following his above-quoted creed of taking advantage in people's fears). The most significant investments went to Goldman Sachs Berkshire ($5 Billion) and GE ($3 Billion). Then the next year invested $34 Billion in a train company. I don't think these are actions of a troubled company (BRK) especially one that just lost 60% of its shares value.

Actually, you must distinguish prices of shares from the soundness of business of listed companies. At the height of the 2008 financial crisis almost all stocks all over the World significantly dropped in prices. Why? There was panic among traders and investors. Still you should distinguish between shares prices and financial soundness of companies (the former has utility only when the company has to raise funds while the latter determines whether the company stays afloat or goes bankrupt)). In the case of Berkshire Hathaway its share prices may have dropped significantly yet at no time was its core business in jeopardy. Actually, at that time Berkshire was sitting on top of a mountain of cash (Berkshire is always on top of cash), hence, does not to be bailed out. That's why it was able to take advantage of the panic in the market. These troubled companies on the other hand not only had their share prices at rock bottom but their liquidity standings were really in bad shape. That's why the government has to come in to extend them lifelines.


(Sorry OT)
 
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pmaitra

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Very interesting explanation in the article: Does George Osborne care about the state of the nation – or is it all Balls? - Telegraph

Payguy
Today 12:19 AM
For a while now I have been focusing on the question of what economic policies would cure the Global Financial Crash. This is as we have seen the trivial question with a straightforward answer.

The real question I should have been asking is why hasn't a solution been proposed and debated. The shocking answer I have come up with is that those with the power to get us out of this mess have decided it is not in their interest to fix the world economy.

Consider that under austerity the relative wealth of the world richest people has increased. For example the Times Rich List of the 1000 wealthiest people in the UK has shown their combined wealth has increased by 5% in the last 12 months to a new record high of £414 billion-

BBC News - Sunday Times Rich List suggests UK's wealthiest defy recession

As an aside we might ask why these people are so desperate to earn their next billion. My own preconception is their greed is a product of the way they were potty trained, serious only child syndromes and seriously bad bullying in certain English boarding schools. Certainly these people are dysfunctional enough that they are capable of inflicting limitless misery on everybody else in order to get exactly what they want.

Back to the point though which is to compare the effect of austerity on the super rich and the other 99.999% of the population. The effects of the austerity policies propagated by the Tory led coalition have been severe and immediate
With average incomes dropping over 6% last year in the UK (according to ONS earnings figures).

Indeed austerity is likely, with only 10% of the Tories cuts implemented, to intensify and carry on for at least a decade. For example see last years IFS report-

Presenting its analysis of 2011 autumn statement, the Institute for Fiscal Studies (IFS) predicted real median household incomes would be no higher in 2015-16 than they were in 2002-3. In other words, more than a decade will have passed without any increase in living standards for those on average incomes. The same analysis estimates 1 in 4 children will also end up in poverty.

So the implications are clear. Our current policies lead to rising incomes for the ultra rich but grinding poverty for everybody else. But what would endanger this balance and result in policies that increased living standards for the 60 million UK citizens as the expense of constraint in inequality for the ultra wealthy?

To my mind the answer to this and the reason the entire right wing press, the Institute of Directors, CBI, economic think tanks, Tory donors and so forth are behind the austerity is the role of wage equalisation in international trade.

It has been known for a long while (Factor price equalization - Wikipedia, the free encyclopedia) that when two countries enter a free trade agreement, wages for identical jobs in both countries tend to approach each other. After the North American Free Trade Agreement (NAFTA) was signed, for instance, unskilled labor wages gradually fell in the United States, at the same time as they gradually rose in Mexico.[citation needed] The same force has applied more recently to the various countries of the European Union.

The implication of this is that globalisation has begun to open up the huge workforces of China and India who are currently paid much lower wages than their US and European counterparts.

Given that we know, through Factor Price Equalisation, as long as we continue free trade, that the wages of these workers are going to equalise over the next 20 years.

There are of course two ways that wages could equalise. In the first scenario governments in Europe and the US deliberately pursue their current austerity program's and suppress workers wages. The Chinese and Indian wages gradually rise to meet our levels and the converged wage for workers in a decade or twos time is modest. This scenario of course supplies much larger profit margins to the ultra wealthy owners and managers of multinational corporations as their wage bill is low. Bankers are happy to as austerity allows greater indebtedness to them and inflation isn't allowed to eat into the real interest paid by households on the debts owed to those that have lent the money. As a side benefit, privatising the profitable parts of the state (tuition fees, the NHS, NATs etc) under the excuses of austerity allows further tax payer backed profit opportunities.

The other scenario for wage equalisation- sovereign debt monetization, tax reform , financial transaction taxes, Keynsian stimulus etc- are not to be welcomed by the global elite. They circumvent the Au
Apparently, he ran out of space.
 

panduranghari

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The explosion of sophisticated derivatives, spawned during the era of free credit, was perfectly suited to the highly educated and skilled workforce in London. The credit crunch that followed was a sea change secular event in the global economy.

Now the UK Is
Directly in the Crosshairs!

Two major reasons:

First, on a household debt-to-gross annual-disposable income measure, the UK consumer ranks among the world's highest. Interestingly, consumers in the UK have only just begun to pay down their debt. And they have a long way to go, according to consulting firm McKinsey and Co.

Below is what McKinsey dubs its "Global Deleveraging Scorecard." As you can see, the UK consumer is highly indebted and has made little progress in paying it off over the past three years. In fact, their debt ratio is down just 6 percent from its peak, whereas the U.S. ratio has fallen 11 percent.And second, the Bank for International Settlements (BIS) — considered the central bank for central bankers — expects the global financial sector to decline in the years to come. This is bad news for all global financial centers. But it's particularly bad news for London, which is still highly leveraged to global financial services.

Stephen Cecchetti, Economic Adviser at the BIS believes the global financial sector has a dark side, is too big, and will shrink in the years to come. Speaking at the 11th BIS Annual Conference in Lucerne, Switzerland, 21-22 June 2012, he said:

"For most people, the term globalisation means cross-border trade in real goods and services; something that we would all agree has brought the greatest benefits to a large number of people. Trade very clearly supports middle-class living standards, among other things putting literally tens of thousands of different products on the shelves of even a modest-sized supermarket.

"But this real side of globalisation relies on financial intermediaries to fund the trading of all this stuff across borders. And the recent crisis showed how problems both on and off the intermediaries' balance sheets can have very large, very real and very bad implications. Many of us have started to ask if finance has a dark side.

" "¦ It sure sounds like finance is great. But experience shows that a growing financial system is great for a while — until it isn't. Look at how, by encouraging borrowing, the financial system encourages an excessive amount of residential construction in some locations. The results, empty three-car garages in the desert, do not suggest a more efficient use of capital!

"Financial development can create fragility. When credit extension goes into reverse, or even just stops, it can induce economic instability and crises. Bankruptcies, credit crunches, bank failures and depressed spending are now the all-too familiar landmarks of the bust that follows a credit-induced boom.

"Instead of supplying the oxygen that the real economy needs for healthy growth, it [the financial sector] sucks the air out of the system and starts to slowly suffocate it. Households and firms end up with too much debt. And valuable resources are wasted. We need to do something about this."
 

Armand2REP

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The LIBOR scandal is going to cost The City tens to a hundred billion quid when lawsuits are done with.
 

pmaitra

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Interesting insight: Was the petrol price rigged too? - Telegraph

Comment on the article above:
faustiesblog
Today 01:29 AM

20% of everything you buy goes to the government. Grow or make your own and you deprive it of 20% of its revenue. You'll save money in the process. And it's perfectly lawful.

Pay cash for everything. This denies the government (via the banks) information on what you buy and when - information which they use to fine-tune their tax targeting.

Withhold taxes for as long as you possibly can, without incurring penalty. Query everything, so as to delay further having to pay.

Join a co-op bank or mutual, where no fractional reserve larceny is practised and where every account-holder is part owner of the bank.

Barter and buy second hand. Deny corporations your custom.

Keep your purchases to a minimum and when you do buy, purchase goods that last.

Mend and make do.

Eat wild foods that grow in forests, in your garden and even on your lawn. (Dandelions, for instance, are highly nutritious - and free). Get a book on wild foods.

Encourage everyone you know to do the same.
 

pmaitra

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More fun stuff:

IMF slashes UK growth forecasts

The IMF said the British economy would come to a virtual standstill with growth of just 0.2pc this year, compared with its April forecast of 0.8pc growth.

It cut its 2013 growth forecast by the same margin to 1.4pc from 2pc.

Britain's growth downgrade for 2012 was the largest of any country barring India in the IMF's World Economic Outlook update. Growth will be below average among advanced economies, and behind Germany, France and the US.
Funny comments:
quizicaleconomist
Yesterday 03:07 PM

Who is right I wonder, Ernst and Young or the IMF? Whichever one it is , it is clear that you cannot get two economists to agree on anything.
[HR][/HR]
AcerSaccharum
Yesterday 04:39 PM

A mathematician, an accountant and an economist apply for the same job.

The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."

Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."

Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says, "What do you want it to equal"?
[HR][/HR]
wattys123
Yesterday 06:29 PM

this is particularly worrying when you factor in that the UK population is exploding, that can only mean a smaller cake is being cut into more slices. Are the Tories going to do anything about immigration or is UKIP our best option.
[HR][/HR]
Nicholas Hargreaves
Yesterday 06:56 PM

It might mean we can make more cakes cheaply.
 

Armand2REP

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The UK is in recession, so it isn't likely to have any growth this year.
 

pmaitra

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The UK is in recession, so it isn't likely to have any growth this year.
There would be much lesser growth in the past several years if there was no Fiat Currency. Read up on it. Economists, and silly organizations like IMF fool us with their spurious information based on nominal GDP.
 

pmaitra

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sky

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when you save you can't claim any benefits so the silent majority either spend ,or hide there money . Then you can claim money you would not normally get.The founding father's of the modern welfare state would be horrified if they could see the legacy they left .

The housing market is where we put our money , and so we own a lot of assets and remain a nation of homeowners.
 

pmaitra

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Her Majesty's Government has reached a new low now!

HMRC tells school children: Tell your teacher if a neighbour is evading tax

School children are being encouraged by HM Revenue and Customs to tell their teachers if they know of anyone "in their local area" who is not paying their fair share of tax.
Source: HMRC tells school children: Tell your teacher if a neighbour is evading tax - Telegraph

Comments: LINK
humanbydesign
4 hours ago

I'm a teacher. Any kid who tries this with me, I'll tell them to **** off.
[HR][/HR]
huahinronnie
4 hours ago

And go in the Guinness Book of Records as making a teacher's shortest resignation speech.
[HR][/HR]
humanbydesign
4 hours ago

Hmmm... that's a point. On second thoughts I'll tell them to ****** off.
[HR][/HR]
huahinronnie
4 hours ago

Before doing so book an appointment with your union rep and make list of all the things you can get done during the 'gardening leave'
[HR][/HR]
humanbydesign
4 hours ago

I'll clean windows. For cash.
 

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