Europe etc

[CliveH]

This is an interesting update:-

 

"Equity markets had a rollercoaster week, with fears of a Euro collapse re-emerging as the Greek election ended in stalemate. The Greek population is sending a message to its politicians, which is being echoed across Europe, that austerity will not solve the problems of the peripheral European countries.

 

Over the weekend, European politicians hardened their stance on Greece, with open discussion of the possibility that Greece could leave the Euro. German Chancellor Angela Merkel also suffered a heavy defeat yesterday in regional elections, as German voters are no longer happy to send cash to bail out the Greeks.

 

Equity markets had steadied last week, until JP Morgan announced a $2 billion trading loss by a trader nicknamed the “London Whale”.

 

Equity markets across the week fell 1%-5%. This compounded investors’ jitters, and safe-haven bond markets saw support. WTI oil closed the week on $96.13 per barrel; gold finished down at $1594.20 troy oz

 

Financials were hit after JP Morgan’s announcement - the stock fell 11.5% over the week. Morgan Stanley, Goldman Sachs, and Citigroup also sold off heavily.

 

 

Fixed Interest Sector

 

The University of Michigan Consumer Sentiment Index was the best since 2008. US 10-year Treasuries yield @ 1.84%.

 

UK 10-year Gilts yield @ 1.96%.

 

Spanish bond auctions today and Thursday will reflect investors’ reaction to proposals to recapitalise the banking sector. Greece will continue to take centre stage, as attempts to build a coalition struggle on. €10-year German Bund yield @ 1.51%. "

 

---------------------------------------

 

Not a bad time to have the £ as your currency - unless you export to Europe that is.

 

 

[BGD]

Also, not a bad time to sell pounds and buy euros..... ;-)

[Syd]

 

I am sticking with Gold, still showing 50% on purchase

[Guest pelmetman]

I'm investing in wine........Rioja @ 99 cents a bottle........hic :->

[CliveH]

My favourite!

 

Crianza - try that.

 

Got to go and have a lay down now. Got over excited

[LordThornber]

I've bought Euros and topped up the 4 funds I'm currently buying. The FTSE 100 tracker I hold I really filled my boots.

 

Possibly further to go but crystal balls just don't cut it in the money game, I prefer fortune favouring the brave.

 

Martyn

[CliveH]

Watch that Tracker Martyn - they track down as well as up. You may want to consider a safe haven fund if the Tracker has done well for you. It is down to 5400'ish - but if the Euro problems persist it could fall further.

[LordThornber]

Cheers Clive, I bought the tracker right down to 4600 (I think) in around Mar/April '09.

 

I took all the profits from that at 5900 in Feb '11 so I've just been slowly filling it back up. Tracking down, which of course it has to, is just another buying opportunity as far as I'm concerned, I'm quite happy to watch it go either way - although up is the eventual preferred choice.....haha.

 

My China fund is steady, My India fund rocketed early in the year but has stabilised now and a Middle Eastern fund is just ticking over.

 

I don't anticipate a call from Warren Buffett anytime soon but I'm doing ok :D

 

Martyn

[CliveH]

Spot on Martyn looking good!! Suggest you might like to have a look at some of the South American funds as well for some exposure - Not a lot!! 8-) - but we see this sector doing well as it will respond positively if the Eurozone falters. Brazil in particular is the supplier to the emerging markets. They are all volatile funds so suggest phasing in to benefit fom £ cost averaging. But the growth potential is good.

 

The sector is down at the moment so again a good opportunity.

 

Not for the "cautious" tho! :-S

[BGD]

Far East Emerging Markets equity funds doing very well now, (Yay!) but oh what a roller-coaster - they'll give you a heart attack if you keep looking weekly instead of taking a long term view!

[CliveH]

Never put a lump sum into a volatile fund Bruce. You just watch it go up down up down etc.

 

But feed it by regular contributions each month and you gain the benefit of £cost averaging because every month the price falls, that month you buy more units.

 

The trick is "harvesting" the fund when the price is high.

 

The other issue with what are called "emerging markets" is that in reality they are nothing of the sort in that they are well established markets now.

 

It is our "market(s)" that is/are in decline.

 

:-S

[Guest pelmetman]

CliveH - 2012-05-15 6:40 PM

 

Watch that Tracker Martyn -

 

Yeah.........I've met him....... a right dodgy geezer :D

 

One advantage of having no money....... is................ I dont have to worry about it B-)

[LordThornber]

Sound advice there Clive about both averaging and the harvesting.

 

I've never looked at the South American sector to be honest, I should do really although I've got a nice even spread at the moment.

 

My only flat spot at the moment is an investment trust with Fidelity but it was bought with the long term in mind so I'm not losing any sleep.

 

Martyn

[CliveH]

We are looking ever wider these days because 3 to 4 years ago if someone wanted to maintain capital and an income of 4 or 5% and they had a cautious attitude to risk we could place a reasonable amount (say three years worth of income) in a cash fund that would have interest of say 4% (so no growth but it "wipes its face") and the rest in a nice mix of Fixed Interest, Equities and Property to get the growth in the longer term.

 

But now with interest rates so low and equities on their knees due to Europe, the Banks, etc. we just have no chance at all in achieving this within the traditional concept of a Cautious attitude to risk.

 

In other words, you have to accept a higher risk profile if you want income and capital protection.

 

With interest rates at circa 2% at best but with inflation at, say, 4.5%, even if you take no income at all, you are still losing 2.5% of buying power every year.

 

Hence our suggestion that "taking a punt" at some of the markets you would not normaly consider is worth while. Not for all your money but for a small percentage of it.

 

Some of these sectors/markets now have real growth potential with staggering performance and volatility scores not that different to the traditional fund types that in the past would have been classified "cautious".

 

As I say - what some would still call "emerging" markets are no longer emerging at all - they are reasonably well established and carry none of the baggage that our traditional markets are saddled with.

 

Interesting times indeed - an old Chinese curse. :-S

[Dave225]

Some interesting comments. However, do remember the basic rules.

 

1. The only money being put in is yours

2. The Fund Manager makes his/her money regardless of whether they do good or bad.

3. History has shown that there are very few Fund Managers that can actually deliver better performance than many basic trackers. And, if those that do get ‘poached’ then your existing Fund will go down pretty fast.

 

4. All Fund Managers have big houses, expensive cars and probably large yachts but rarely put their own money in their Funds. Curious that one.

 

5. Beware exit penalties. These are usually hidden in the small print. Any Fund Manager that tells you that you can cash in at any time, is usually lying.

 

6. If your money is lost, there is no comeback

7. You may feel you have no financial expertise, but a few basic facts will put you as good as many so called experts. Also you are more likely to think carefully before possibly throwing your money away. Even if you only make a basic 3% after tax, you are doing better than an interest account and you do not pay fees. Management fees can eat away up to 30% of your final money.

 

8. There is no such thing as a sure bet deal. These should be considered in the same category as being told you have won the Nigerian Lottery without buying a ticket.

 

Now I am not saying that to make money you need to take a risk. However far too many people seem to happily hand over all their life earned savings to some stranger whom they have been told is an ‘expert’. Possibly if they were all forced to use the name ‘Arthur Daly’ then people would be more wise, because basically that is what they are doing. I am reminded of a bloke I met on a train a long time ago on a long trip north. Chatting revealed that he was a gambler, which I am certainly not. However he was a ‘professional’ He would enter a casino with between 50 and 100 grand and never bet on odds except evens. He told me only mugs bet long odds. The money he used was not his and if he lost then it was accepted, but his margin of success was better than 50% so over time he made a lot of money for his backers. My point is that if you can afford to lose 50 to 100 grand then you can make a ,lot of money. If you cannot, then you will probably lose. Financial management is very similar unfortunately. However, my analogy of the gambler is to not think of huge profits short term. As long as you can beat the basic interest rates then you are doing ok, and if you can grow the capital as well then even better. Also look at things long term and do not panic when the markets suddenly drop. They always do, and will always come back sooner or later. Remember many Funds follow these peaks and troughs and like ‘snakes and ladders’ the down snakes always seem to last longer than the up ladders.

 

 

 

[CliveH]

If you have a lump sum then you do need to be careful where you put it - because as Dave says, if you put a lump sum into a volatile fund then all you will do is to watch it go up and down in value. BUT most providers will allow you to place the money in a good deposit fund and allow you to phase the investment across over time. Hence even with a lump sum you can get the benefit of £ cost averaging.

 

What is it?

 

If you invest £1000 in a volatile fund that goes up and down in value then if each unit costs £1 in January then in month one you would have 1000 units worth £1000 in total.

 

If the unit price falls to 50p a unit in February then you still have 1000 units but they are worth only £500.

 

If in March the unit price recovers back to £1 a unit, then you have your £1000 back.

 

BUT - if you kept your capital in a cash fund within the plan and moved £100 into the same volatile fund each month then in month 1, January - you buy 100 units at £1 each

 

In February you move another £100 across and this month because the price is only 50p a unit you buy 200 units.

 

Then in March when the third £100 goes in you end up having £700 still safe in the deposit fund, and owning 400 units in the invested fund that at that point each unit is priced at £1.

 

So you total investment of £1000 is now worth £1100.

 

You can play with this using an excell spread sheet and whilst volatility gives many inexperienced investers the willys - by the simple technique of £ cost averaging you can USE the volatility of a fund to your advantage.

 

Any fool can make money in a rising market - I meet them regularly in the pub. When things are going well they pick a single fund or at most a couple (eggs in baskets never occurs to them) and they tell everyone that the money they invested has made 25% in 3 months, next month they tell everyone they are going give up the day job and invest all their money in Ugandan Special Situations.

 

Then the market dips and they are very quiet.

 

The following month they panic and sell at a loss and become vociferous in their condemnation of all things financial because "Things go down as well as up! - you know!!!"

 

If you are not sure what you are doing take proper independent advice and steer well clear of the Banks.

 

But I would take issue with a couple of points that Dave makes My comments in upper case only for clarity - not shouting :-D

 

........................................

 

1. The only money being put in is yours

 

WITH A UNIT TRUST OR UNIT LINKED FUND THE INVESTMENT IS A POOLED INVESTMENT AND SO YOUR MONEY IS ADDED TO MANY MANY OTHERS INCLUDING INSTITUTIONAL INVESTORS SUCH AS PENSION FUNDS, TRUST UNDS ETC.

 

2. The Fund Manager makes his/her money regardless of whether they do good or bad.

 

BUT IF THEIR FEE IS EXPRESSED AS A %'AGE THEN IT IS IN THEIR BEST INTEREST TO MAKE SURE THE FUND DOES WELL. ALSO MANY FUND MANAGERS REDUCE THEIR CHARGE FOR PERIODS WHEN THEIR FUNDS ARE NOT IN THE UPPER QUARTILE FOR PERFORMANCE.

 

3. History has shown that there are very few Fund Managers that can actually deliver better performance than many basic trackers. And, if those that do get ‘poached’ then your existing Fund will go down pretty fast.

 

NOT TRUE - RICHARD BRANSON LOST A VERY EXPENSIVE BET ON EXACTLY THIS POINT. THAT SAID I AM A GREAT FAN OF TRACKERS - BUT THE INVESTMENT CHOICE FOR TRACKERS IS LIMITED.

 

4. All Fund Managers have big houses, expensive cars and probably large yachts but rarely put their own money in their Funds. Curious that one.

 

AGAIN NOT TRUE AS I UNDERSTAND IT - I DOUBT THERE IS ANY EVIDENCE TO BACK THIS UP. THIS IS THE SORT OF COMMENT YOU GET FROM THE AMATEUR FUND MANGER DOWN THE PUB WHO HAS LOST MONEY

 

5. Beware exit penalties. These are usually hidden in the small print. Any Fund Manager that tells you that you can cash in at any time, is usually lying.

 

EXIT PENALTIES ONLY EXIST WHERE AN ENHANCED ALLOCATION IS OFFERED AND ARE SIMPLY THE CLAWBACK OF THE ENHANCED ALLOCATION - AND IF THEY ARE NOT EXPLAINED FULLY AT THE POINT OF RECOMENDATION, IN WRITING, THEN YOU CAN MAKE A COMPLAINT TO THE FOS (FINANCIAL OMBUDSMAN SERVICE) AND YOU WILL WIN.

 

PENALTIES LIKE THESE APPLIED IN THE BAD OLD DAYS OF ALLIED CROWBAR AND SHABBY LIFE, BUT NOT IN THE GOVERNMENT AGENCY REGULATED (FSA) MODERN DAY.

 

6. If your money is lost, there is no comeback

 

THERE IS IF YOU CAN DEMONSTRATE THAT THE INVESTMENT RECOMMENDED WAS NOT A SUITABLE ONE FOR YOUR ATTITUDE TO RISK. IF THE FIRM USED GOES BUST THEN THERE IS THE FSCS (FINANCIAL SERVICES COMPENSATION SCHEME) WHICH ALL IFA's, INVESTMENT HOUSES AND LIFE OFFICES SUBSCRIBE TO.

 

IT IS AN ODD POINT - BUT IT IS PARTLY BECAUSE WE ALL HAVE TO SUBSCRIBE TO THIS INVESTORS COMPENSATION SCHEME THAT OUR CHARGES HAD TO INCREASE WHEN IT WAS INTRODUCED. I SUPPORT THIS SCHEME 100%.

 

7. You may feel you have no financial expertise, but a few basic facts will put you as good as many so called experts. Also you are more likely to think carefully before possibly throwing your money away. Even if you only make a basic 3% after tax, you are doing better than an interest account and you do not pay fees. Management fees can eat away up to 30% of your final money.

 

IF THE 3% CITED ABOVE IS VIA MONEY ON DEPOSIT - DO REMEMBER THAT IF YOU GET 3% AFTER TAX THEN THE GROSS RATE IS 3.75% AND A BUILDING SOCIETY OR BANK WILL HAVE ITS LENDING RATE CONSIDERABLY HIGHER - PROBABLY ABOUT 4.5% FOR MORTGAGES AND UP TO 12% FOR NON-SECURED LOANS.

 

SO THE "MANAGEMENT CHARGE" ON DEPOSIT ACCOUNTS FOR THE HIGH STREET LENDERS IS RARELY LESS THAN 0.75% AND ON AVERAGE IS CONSIDERABLY HIGHER.

 

IN CONTRAST A GOOD PERFORMING "BALANCED CONCENSUS" FUND THAT HAS DONE WELL AND THAT WE REGULARLY USE HAS AN AMC (ANNUAL MANAGEMENT CHARGE) OF JUST 0.13%

 

8. There is no such thing as a sure bet deal. These should be considered in the same category as being told you have won the Nigerian Lottery without buying a ticket.

 

HOWEVER, IF YOU WANT SECURITY YOU CAN CURRENTLY SECURE A GUARANTEED 3.5% PA FOR 36 MONTHS WITH AN "AAA" RATED PROVIDER (SCOT WID BANK) AND YOU CAN SECURE THAT WITHIN A "PLATFORM", "WRAP" OR TRUSTEE INVESTMENT.

 

AND UNLIKE THE NIGERIAN LOTTERY - YOUR MONEY IS PROTECTED BY THE UK INVESTORS PROTECTION SCHEME AND THE FSCS.

 

SO PLEASE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

IT IS NOT ALL DOOM AND GLOOM. :-S

[Dave225]

Dare I suggest politely that Clive has a vested interest in the nature of his comments, which by the way are at odds with many of the financial pundits. While there are indeed avenues for redress for example, actually getting a proper compensation is usually not the case, unless you have a lot of money to spend on litigation. Many people wait years or even die before any recompense is paid. Financial products are like going to the bookmaker, invariably he goes home richer han you, although he will always point out the lucky winners.

 

Remember this is the industry that is now the largest in the Uk but actually produces nothing. It makes money by merely churning money invested by punters. The banks are in trouble because they kept inflating the paper value of dud loans. This allowed them to look richer than they actually were so they could make bonuses. The main reason it has flourished for so long is that it produced tax revenues which allowed prolifigate Chancellors to splurge and bankrupt us, otherwise it would have been seen to be exacty what it is. A glorified Ponzi scheme. Of course like Ponzi it eventually collapsed and the taxpayer picked up the tab. How many bankers or financiers have you seen actually going to jail recently? The last one I recall was Barlow/Clowes many moons ago. Insurance Companies have amalgamated and so became larger. This allowed costs to be cut and so profits grew, even if no actual new business was created. Dump older Funds into 'zombie' funds and create new ones to get revenues. Those stuck with the 'zombies' are cast adrift and tough luck. Looks good for those inside. Advertise the first 3 years as stupendous growth and sucker more money in just as it starts to wane.

 

I am not a religious man but I seem to recall rom Sunday School way back that even Jesus threw the money lenders out of the temple and cursed them, so it is not a new phenomenon by any means. The latest scam to hit the headlines is the 'Over 50's Plans' These prey on the elderly by encouraging them to sign up to pay monthly payments for the rest of their lives, to pay a funeral cost. These sharks know that elderly people always worry that their deaths should not be a burden on others but rarely realise they will very rarely ever get back to their loved ones, what they have put in. Even if they do eventually get a payout to the relatives, it is not enough for an average funeral. If however they do decide after sevreral years they do not wish to contnue the Plan then all their contributions are lost. If they continue to death they very often have paid in 2 or more times the actual payout. These Plans are marketed by all the leading Companies who pretend to be stable family friendly businesses which they are most certainly not.. Buying a cuddly celebrity to market these on TV is probably the most abnoxious con of all because if Parkinson is promoting it, it must be ok, mustn't it???, and of course you may even get a battery clock to watch your life tick away. Not only is this practice of preying on the weak immoral it should be made illegal and the proponents sent to jail. If anyone wants to pay for a funeral then put money in an ISA, at least it will not be lost or lose value. By a clock from Poundland if you need one.

 

So, if we are talking about an industry that is happy to fleece the elderly, then 'caveat emptor' as they say in Rome. One could also mention PPI scandals or Endowment scams. Guaranteed Investments that did not actually have any guarantee. Remember the old slogans. 'Get the strength of the Insurance Companies round you' or Annual bonuses will be smoothed out to cover bad years as well as good. Oh yeah! Pull the other one sunshine, it has bells on it. So where did all the money go? Exactly the same as giving money to a banana republic for humanitarian aid. Each step on the way meant another cut taken off so by the time you got to the bottom, very little was left.

 

You may have guessed I have little time for financial products having had my share of 'burns' over the years. Handling my own affairs has probably not made me rich, but I have made much fewer losses.

[CliveH]

Of course I have a vested interest Dave. But almost all that you cite as being "bad" is actually down to the Banks - and my opinion of the "money lenders" has always been poor. The Banks are gulity of misselling and bad advice - we see it almost daily. So please do not confuse Independent Financial Advice with that which the Banks offer.

 

PPI sales - Banks

 

Endowment misselling - Mortgage lenders - ie. Banks

 

The misselling of High Income Corporate Bond funds to the elderly - Barclays in the main.

 

Thankfully the FOS came down on them hard. How on earth did Barclays think it a good idea to sell a medium timescale plan (5 to 15 years) to someone in their 70's and 80's? They totally ignored the sensible guidelines from the FSA as well as the simple moral compass concept that I was taught years ago - "think of the client as your Mum/Gran/brother/sister - do you feel this suits them?)

 

Banks have salesmen/women masquerading as advisers. Ask them about anything not on their product list and they should tell you that you should consult an IFA. But a report last year by Which? demonstrated that they rarely did.

 

"A new report from the consumer group, Which?, has criticised banks and building societies for giving poor financial advice to 32 out of its 37 mystery shoppers.

 

The report also concluded that financial advice should be sought from an Independent Financial Adviser (IFA)."

 

The full details:-

 

http://www.which.co.uk/news/2011/11/high-street-banks-offer-risky-investment-advice-says-which-271658/

 

As for the "industry producing nothing" - how wrong can you be Dave! - because without the investment new companies and technologies would never get the money needed for development costs.

 

But I think the clue as to you ill feeling towards all things financial is in your last sentence. Some people do get it wrong - and as I say afterwards become rather embittered.

 

But tell that to the client that suffered breast cancer and her Friends Prov Critical Illness plan paid out £150,000

 

The strength of those "insurance companies" is there if you want it. Getting the correct plan, in my view does require advice for most people. This advice is NOT in my view available from the Banks.

 

If you chose not to, then that is your choice.

 

Like I say - the people who are the loudest on this are invariably those that got it wrong for whatever reason.

 

 

As for always getting back less than you put in - do you really think if that were true that we would have any clients at all by now?

 

The truth is that if you take Independent Advice then the adviser works for YOU and is responsible for the advice given. If inapropriate advice is given - then there ARE good compensation schemes available and excellent investor protection.

 

The FOS data on the complaints it recieves is very interesting - it reports this info every 6 months. Of all the complaints it recieved - nearly 60% were about Banks - only 4% were complaints about IFA's

 

http://www.financial-ombudsman.org.uk/publications/complaints-data.html

 

Which bearing in mind IFA's transact over two thirds of private citizens fiancial affairs is a staggering diference in itself.

 

But even more staggering is the fact that of the 4% of complaints that were made against IFA's, the FOS only upheld circa 20%.

 

Whereas the FOS upheld 78% of the complaints against Banks and they of course were by far the biggest sector for complaints in the first place!

 

So I cannot help but feel your ill feeling towards the "Financial World" is probably virtually the same as mine. The only diference being that I am a tad more targetted whereas you tar everyone with the same brush.

I :-D

[Guest Peter James]

CliveH - 2012-05-16 6:39 PM

 

NOT TRUE - RICHARD BRANSON LOST A VERY EXPENSIVE BET ON EXACTLY THIS POINT.

 

Branson bet a £6,000 charity donation (was that 'very expensive' for Branson *-) ) with Nicola Horlick that her managed fund would not outperform the index. Branson lost the bet. But lets put that into context;

1) 4 out of 5 managed funds did not outperform the index in the period Branson chose. It was Branson's bad luck that Horlicks was one of the few funds that did.

2) Even a basic savings account would have outperformed the index by a long way in that period.

2) Bransons tracker fund charged about 1% management charge, which is more than four times what I am paying with Vanguard. Their website makes some interesting observations about fees.

[Guest Peter James]

CliveH - 2012-05-16 6:39 PM

WE REGULARLY USE HAS AN AMC OF JUST 0.13%

Why do you quote AMC instead of TER *-)

[CliveH]

Because TER (Total Expense Ratio) applies to an individual fund that could have a 5% bid offer spread, management charges etc. So in this case where someone may buy a unit trust direct of the page from the provider, then the TER is valid

 

If you take advice from us - we research the best option for the Tax Wrapper - for ISA's for example - currently with the discounts available to us due to the economies of scale we achieve due to the total size of the funds under management, if you have less than £27,000 in total within an Investment ISA' portfolio then Fidelity Funds Network is currently the least expensive option. If you have more than £27K then the Skandia Multifund platform is currently the best option. Both offer free switching, discounted fund charges and a huge range of funds and fund providers.

 

These same providers available and you can buy direct from them if you wish. And here buying direct from a provider, such as M&G or Jupiter is where the TER would be a relevant comparison to another provider, but if you want flexibility and low costs then some sort of "platform" is the least expensive and most flexible option in that if your M&G or Jupiter funds perform badly then you can simply switch out into another fund/fund provider.

 

So within a platform, the TER as published for an individual fund is not relevant because of the discounts negotiated by the adviser and combined with those offered within platform itself mean that the stated TER for the fund is always considerably more than the total cost of purchasing that fund via the platform.

 

Hence when you are comparing apples with apples - i.e. For example one Cautious Managed Fund compared to another, if you are choosing the option from within an ISA Tax Wrapper where the cost of running that tax wrapper is the same WHATEVER FUND YOU SELECT, then the AMC of the individual funds is the relevant cost comparison.

 

Another example would be a SIPP (Self Invested Pension Plan) where an individual wants 20% of the funds within it to be placed within a Balanced Managed Fund. Again there are lots of options, but let's say the two funds selected as being upper quartile performers have AMC's of 0.13% and 0.75% respectively.

 

So given that all other charges will be the same as the investment will be within the same SIPP, - why go for the more expensive one? There may well be a good reason - size of fund, volatility, make up of the fund etc. - but on cost alone given the level playing field that most investors enjoy via their Tax Wrapper Platform, AMC's for a given fund are more accurate than the funds TER.

 

So in summary, the TER is a ratio for those who buy funds direct of the page and it is accurate for them.

 

Where you have that same fund purchased within a tax wrapper or platform where discounts and economies of scale apply then the TER is as relevant as the "Recommended Retail Price" of a product where everyone knows a discount is available if you know where to look.

 

Hope this helps

 

[CliveH]

Details of this meeting just emerging:-

 

"Cameron and BoE make plans for eurozone collapse

by Alex Steger on May 29, 2012 at 07:58

 

 

Prime minister David Cameron has met with bank of England governor Mervyn King and Financial Services Authority chairman Adair Turner to discuss contingency plans for an implosion of the eurozone, according to reports.

 

The Financial Times reported that Turner and King attended a summit with Cameron and chancellor George Osborne to discuss the worsening outlook for the eurozone as Spanish bond yields neared the danger zone and speculation mounts over Greece’s exit.

 

According to the Daily Telegraph the Bank of England plans to cut interest rates and launch a further round of quantitative easing, if the euro collapses."

....................................................................

 

"..............................the Bank of England plans to cut interest rates and launch a further round of quantitative easing, if the euro collapses"

 

Like that will help *-)

[Guest pelmetman]

3 notches......for Spain...... 8-) 8-) 8-)

 

 

The Eurozone gloom that sent markets into the red eased a little at the end of the trading day, as rumours strengthened that Spain could ask for a bailout for its debt-ridden banks earlier than expected.

European markets opened down, as recent expectation of a fresh boost of stimulus measures from the US waned, following comments from Federal Reserve Chairman Ben Bernanke.

Mr Bernanke said the US central bank was ready to shield the economy if financial troubles increase, but offered few hints that further monetary stimulus was imminent.

In addition to woes over the lack of intervention from the US, Fitch's credit downgrade of Spain darkened the mood.

The country's credit rating was slashed by three notches from A to BBB - just above junk status.

Fitch also signalled it could make further cuts as the cost of restructuring the country's troubled banking system spiralled and Greece's crisis deepened.

But as markets closed, London's FTSE 100 (Euronext: VFTSE.NX - news) bounced back from a fall of more than 1% to close at 5435, a fall of just 12 points, or 0.2%.

Elsewhere in Europe (Chicago Options: ^REURUSD - news) , Germany's Dax (Xetra: ^GDAXI - news) was down 0.2% and France's CAC 40 (Paris: ^FCHI - news) fell 0.6%.

The Bank of France cut its forecast for the French economy and now expects it to contract by 0.1% between April and June this year.

There was zero growth in the French economy in the first three months of the year, following growth of just 0.1% in the previous quarter.

Meanwhile, new data showed German exports and imports fell sharply in April, highlighting that Europe's largest economy is beginning to feel the pinch from the eurozone debt crisis.

Seasonally-adjusted imports dropped 4.8%, their strongest decline in two years, while economists had expected imports to remain flat, and exports fell 1.7%.

Christian Schulz, of Berenbank, said: "It's surprising that imports declined so much, and exports are likely to be weak in the coming months.

"The euro crisis escalated in May after elections in Greece and France and that is yet to be noticeable in the statistics."..........

 

They haven't got a clue how to stop it have they??............I doubt the fans got to half speed :D

[nowtelse2do]

And the good news is.........the pension age in France is now 60, down from 62 :-D

Looks like the new French government have got their economy right to be able to do this for only an extra 3.3billion

 

Dave

[Guest pelmetman]

nowtelse2do - 2012-06-08 8:08 PM

 

And the good news is.........the pension age in France is now 60, down from 62 :-D

Looks like the new French government have got their economy right to be able to do this for only an extra 3.3billion

 

Dave

 

Must be why ours is going up :-S............ready for when we join the euro 8-)..............so we can pick up the tab *-)