OneGuyFromBarlick

An article in the FT about the UK used car market...
LINK
It warns that the PCP contract, which is the way people buy new cars and get further into debt, is now becoming the norm in the used car market. Also PCP has pushed down the value of used cars. Britain has the highest percentage of cars bought on credit than anywhere else. Another emerging problem is that the loans on car purchases are being `securitised', packaged and sold on to investors as bonds like was done with mortgages and triggered the credit crunch.

But acceptable risks to keep domestic spending up? Perhaps that's the argument for not cracking down on what many seem to see as a retrograde step. I agree with you, I don't like it, too many hostages to fortune.

Yes, they're nurturing the goose that laid the golden egg. Unfortunately the eggs usually turn out to be bad. This one's smelling already.

And think of all the other eggs in the pipeline, Pensions, the new derivatives based on debt and the loosening of the regulation on the financial sector. I am not happy!

See THIS for a BBC report of the start of the trial of the Barclay's bank and its executives over the Qatar bail-out. Too little too late but I suppose we should be glad for small mercies. What will the result be? A lot of well paid lawyers for certain, as for anything else, who knows.....

...and it's the first time that bank bosses in Britain have been taken to court for issues relating to the 2007/8 credit crunch.

I've posted the following here because I couldn't think where else to put it. Consider as `Beware the landbankers'!
`Bovis sets aside another £3.5m to fix faults with homes' LINK

We're supposed to be desperately short of houses in Britain and the prices are far too high. The main reason is the housebuilding companies such as Bovis which avoid building enough properties so that they can keep the price high. Also, they make so much money out of landbanking that they aren't motivated to build houses on the land. To make matters worse, the houses they build are often poor quality and outdated compared with those on the Continent and in Scandinavia and many have serious problems when the buyers move in. Note also according to this report Bovis "..said it would slow down the pace of building throughout 2017. As a result it will build between 10-15% fewer homes this year." It's time we had a national housebuilding organisation to take over the job of providing enough homes, of good quality for us all.

Quite right Tiz. The really impressive inroads into the housing shortage were met by making housing the responsibility of the Ministry of Health and the encouraging of Local Authorities to act as developers and landlords. This is anathema to modern governments who want as much distance between themselves and the provision of essential services as possible, hence 'outsourcing' and privatisation and the relaxation of regulation in all fields. They want to be able to use the 'Not Me Guv' defence. Dinosaurs like me keep quoting 'The Commanding Heights of the Economy' but we are crying in the wilderness.....

Later after spending a total of over an hour on hold with HSBC bank...... I know you have all suffered similar occurrences but I just wanted to vent my incandescent rage at a system that treats customers like this. I won't go into the details but it was about 'safeguarding' us against fraud. I filled in a form over a month ago and returned it oin the day it came. Since then I have had two letters saying they hadn't received it but when I eventually found the right person it became obvious they have had the form all along. Terrible terrible service and I have asked for an ex gratia payment of £10 to pay for the call...... Service? They are an arrogant and incompetent joke.

See THIS for the latest reminder of just how badly RBS was behaving pre-2008. Why has there been no action by the UK regulators?

Yes, it's time Fred the Shred came out and faced the consequences of his actions.

Insomuch as the system seems geared to protect the top offenders, I can only conclude that it is basically corrupt.

Today the BofE announces the interest rate and no change is expected. This might sound like good news but in fact it is a signal of how bad our domestic economy is at the moment. The elephant in the room is the record levels of household debt and the fact it is rising faster all the time. This is not good but no change in the Bank Rate will affect it, a quarter of a percent rise means nothing to people borrowing at rates in excess of 1200%! The basic reason is that wages are not high enough to be a living wage and many are surviving on exorbitant rates of interest on easy credit. This is obviously a big problem but the BofE is powerless to affect it because this borrowing is what is keeping the consumer market alive. The nearest I can get to describing it is a runaway train where any application of the brakes, though obviously the remedy, would cause a crash.
There is no easy way out of this situation and the forecasts are that post Brexit, no matter how good the deal (!), the Pound will fall even more and the economy will take a hit anyway, if we are lucky for just a couple of years but with the possibility it could be much worse. The bottom line is that government policies of austerity and public wage caps have combined to cause this situation and the only way out is to allow wages to rise which is anathema to them. Tin hats on lads, my considered opinion is that we are in deep doo doo!

Stanley there is always a silver lining to this prognosis, for some, higher unemployment prospects tend to reduce wages. This brings down prices so the upper middle class, who tend to be more secure in their salaries, will actually see an improvement in their standard of living. This situation actually happened in the 1920-30's depression and its all set to be repeated again. Game set and match to the top 5%.

I am convinced that that's the plan P.

The only newspaper I read these days is the Saturday edition of The Times and every week it's filled with pessimistic facts and figures about the state of Britain's economy. Yet the Government still tells us that we're doing fine. It's rather like Trump claiming that the press are peddling fake news. Someone summed up the present situation by saying "At the root of the problem is the fact that the great majority of the populations in America and Europe feel that they are not sharing in the success".

In the rarefied world of high finance and derivatives fuelled by Phantom Money they are coining it in but down here in the blood and the mud and the beer sales, turnover and profit are shrinking daily so wages follow. Most of the policy makers know nothing about this struggle. What they see as an economic miracle is actually a steady progress towards destitution for the majority. At the top they wallow in cash because they can't find efficient investments, down here the debt rises faster and faster at interest rates that can reach 1300% legally. Go figure.....

Letter from Lloyd's Bank yesterday. Changes to terms and conditions - majoring on overdraft charges. 99% of it doesn't affect me so it's usually straight in the bin, but I looked more closely.

The new method of calculating overdraft charge is now to charge just 1p per day for every £7.00 you are overdrawn. That's nearly nothing isn't it? Well if you're in debt for a year say, and that's very common these days, that's 365 days so a £3.65 charge. As a percentage of £7.00 that's about 52%. I think as a rough guide the APR is about double that figure to take into account compound interest.

At least Dick Turpin wore a mask - as they say.

I don't bother to work these things out David because I know that it will be a cunning wheeze to extract more money. Like you, I keep in the black and pay the credit card every month.....

Ten years ago today the French bank Paribas stopped dealings in some financial products because of instability in the US (LINK) . Read THIS CBS report and have a bit of a think.....

A piece in PE yesterday reminded me that the disastrous revisions to the rules applying to pensions and annuities and the current vogue for new, imaginative ways of selling cars are the focus for trading in derivatives. Both are money pits for the unscrupulous. However, the decline in car sales suggests that leasing is being regarded as suspect by many buyers.

See THIS for a report about the continuing spate of bank closures as they cut costs ignoring anyone who is in the country or averse to online banking. The concept of service to customers has evidently died completely now.... This is not progress!

Not the banks but insurance companies, it's car insurance time for me and I got my inflated renewal quote from my existing insurer. I went to the Meerkat's and found a much better deal at £60.00 less than my insurers were quoting so I rang them to tell them I would not be renewing. The guy on the phone (after 5 minutes of button pressing) said he would look for a better price with the same benefits I had found, he then came back and quoted me more than my renewal letter said but added that if I accepted he would knock £68.00 off which would bring the price down into the same region that I had found myself. OK I said but I asked him to email me the details of the deal so I could scrutinise the benefits, (he was very reluctant to name the breakdown and relay operator linked to the deal). He agreed and added that the email would show the full price but I would get the better deal if I rang. Well, I have waited for my email and have to say, in the words of Neville Chamberlain that "no such undertaking has been received", therefore this customer will be at war with Hastings. They will get another call today to cancel my policy and lose the business.

The Meerkat deal is a much better bet and includes breakdown and full UK relay with the RAC, a diversion for me as I have always been with the AA. I can cancel that when the new policy kicks in. Oh, and I get two for one cinema tickets for 12 months (on Tuesdays or Wednesdays valid at Reel Cinemas (Burnley etc)) from our furry friends and I will add to my Meerkat toys as well, Limited Edition Star Wars.

I renewed our travel Insurance as well while I was on there, Half price of what the travel agent quoted us, more compensation and less excess on any claim category with no excess for medical claims. We are still waiting for a refund from our existing policy from Sally's mossy episode last year.

They are all a load of pirates and you just have to do a bit of legwork to find the best of a bad bunch, I don't mind giving our furry friends a slice of the action. I have saved £113.00 across both renewals and have better products for both.

I agree Ian, it's a common experience. I only have one insurance, for contents and Swinton at Burnley have always been very good in that they search for a better source at each renewal. Oh, and you talk to someone in Burnley on a local phone call to do any business with them.

An esoteric economic matter is emerging which will not make the headlines but is actually quite fundamental and affects the UK. The US Fed has moved and as securities bought under Quantitative Easing mature they are being sold. The EU Central Bank and the Bank of England haven't started this process yet. In order for this to happen inflation has to take place and this normally (as is the case with the US) drags interest rates up as well and is a sign of a gradually improving economy. The increase in inflation we are seeing in the UK is a result of devaluation of Sterling and not a more active economy. In fact all the signs are that it is slowing. Therefore it is not a trigger for the BofE to recoup QE money by selling securities or raise interest rates.
As I say, this is not headline news but it's a very good indicator of the health of our economy and it will be noted by the markets.

The cancelled insurance debacle continues and shows why insurance costs so much. I cancelled my existing motor insurance policy with Hastings Direct by phone on Tuesday. This was after giving fair warning and being promised a better quote on the Monday that never materialised. After 5 minutes of button pressing I got through to Kevin who with a few more button presses at his end said that he would stop the policy on the 25th (today) when it expires. I advised him that I had already secured and paid for replacement cover, job done. Slightly later I received an email from Hastings saying that they were sad to see me go and hoped that I would be back in the future. Later still I opened the calorie counting software that I use and noticed in the sidebar advertising that there was a banner featuring the Hastings night that hey use for publicity asking his sidekick seagull (Stephen) if he though that I (Ian) would be back, Stephen was nodding in agreement. All of this reaffirmed that they had got the message and my policy would expire on the due date.
Wednesday, the postman delivered a renewal notice quoting a third different price, higher than the one before. Thursday they sent another one and I have received another this morning with yet another price, higher again so in effect they are trying to retain my business by asking for more money than I was originally quoted! You couldn't make it up! The letters still say that they will auto renew if I don't contact them!

Hastings Direct

This is not incompetence or a computer error, it's a deliberate campaign of harassment run by an algorithm buried in their system and it's disgraceful. Send their accounts an invoice for £50 for your time by Registered Post. They have to take notice of that!