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re Links and Linking

Noted with thanks
NC
 

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Happy to find out this morning that the old lady (post #116) has recovered but is still in hospital.
And all C-19 tests proved negative.
 

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Financial institutions are beginning to estimate the cost of additional government borrowing required to finance just those policies announced as of yesterday. Currently looking at a minimum of 2-3 times what Labour spent and borrowed to finance the bank bailout in 2008-9. That’s before the additional shut downs announced this evening.

Steps have already been taken to reduce the government’s future borrowing costs.
  • The reduction in interest rates to near zero is just one.
  • A new massive round of Quantative Easing is already underway. The modern, electronic equivalent of printing massive amounts of paper money.
  • RPI will have its calculation changed so that it is the same as CPI. The effect of this will be reduce the government “promise” of what they will pay in interest on loans to government by around 1% (e.g. from 3% to 2%). Anyone who has a pension still linked to RPI please take note.
I just find it amazing that a Conservative government is being obliged to enact such left wing policies as:
  • mass bail-outs of ailing industries in danger of collapse.
  • mass nationalisation of all UK rail franchises not already nationalised (as LNER is already). Somehow or other this is now deemed “more efficient” than privatisation. Mmmmmm.
  • truly awesome levels of government borrowing. Possibly yet matching WW2?
Talk about a leopard changing its spots?

Interesting times!
 

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RPI will have its calculation changed so that it is the same as CPI.
RPi was due to go over the next ten years (approx) anyway, and be replaced by CPIH. CPI was devised as an alternative to RPI for EU purposes and never intended to be used in the way it has been. There will always be two index's as the Government gives with the lower and takes with the higher. That is apart from when they award their own pay or pension increases.
One anomaly of RPI/CPI is that workers at Lloyd's / TSB although one company have differing pension increases, ex TSB get RPI, Lloyds get CPI.
 

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To honour the work the NHS is doing in the crisis Lincoln Cathedral will be lit up in blue.
Only recently installed the new LED lighting system lit up the Cathedral in red on Remembrance Sunday, it looked stunning.

3552
 

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It's probably magical money the the lender doesn't actually have, much like giving a credit note when you don't have enough cash in the till. Maybe in future it gets exchanged for some thing physical, or maybe just gets offset against other payments.

Who knows exactly what witchcraft the bankers use to keep us poor :LOL:
 

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Here's a bit of light reading if you're bored at home.
Not 100% sure on the science, but seems to sound logical.
Coronavirus: The Hammer and the Dance
I ploughed through that one at the weekend. I agree with you about the logic. Am less sure of some of the graphs, but there's plenty in there from Imperial College that I would have faith in.
 

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What I don’t understand is who has got any money for the country to borrow from?
Pension Funds! Yours and mine. Anyone who has a Defined Benefit or typical "Final Salary" ex-company scheme in fact. Or many more modern DC schemes too. Most of the former are already heavily invested in government lending via bonds (known as "gilts" - because the original loan certificates in the whatever century they started, were edged in gold). Still considered one of the "safest" investments there are. Partly because UK governments have never defaulted on repaying the loans. All those already issued over the last 50 years, many with durations of up to 40 or even 50 years before repayment, promise to pay annual interest (the "coupon") on the loan at a rate pegged to RPI. The total market for government bonds is in fact many times greater than company share ownership markets ("equities"). Just a lot less publicised. As you have to be pretty well heeled yourself to loan to governments. Hence the gilt markets are normally only open to institutions, not individuals.

Most such DB pension funds have relatively low amounts invested in company shares. So the temporary tumbling in worldwide equity markets and indexes like the FTSE, has a relatively mild impact on those funds. What they do rely on is the government continuing to pay interest on gilts at RPI+margin though. Even in those funds where pensioner payments are pegged to CPI like the Hood mentioned with Lloyds vs. TSB employee pension funds. Those often rely on future income from gilts paying at +1% on average over CPI to fund pensions due in 10, 20, 30, 40 years time. The proposed government reneging on the RPI calculation (to reduce its own borrowing costs) will impact those funds by reducing their future expected interest receipts from gilt coupon payments. Even the existing ones.

The RPI change in calculation is not yet a done deal though. Although I do fear that the massive increase in borrowing required to fund the current promises may redouble the government's resolve to ram through the change. Especially with their new powers - as Mouldy Paul or Finbar (was it?) hinted. Be careful what is hidden in seemingly well meaning attribution of more power to government. Still time though to lobby your MP - especially if a Con one (Colin L?). To vote against the changes to RPI. If government want to continue, let alone increase, borrowing from pension funds they HAVE to stick to the promises made by their predecessors to pay what they promised.

More generally - raiding Pension Funds is a very effective Stealth Tax used by recent governments. Gordon Brown did it when he removed the tax exemption that funds had relied on, on income from their equity investments. Great from a Government point of view as the impacts are felt slowly and in future. Not immediately in people's pay packs like an increase in Income Tax. So a lot less resistance. But just as lucrative. Still time to stop this next RPI "raid" by Boris though... If we all pull together and get lobbying.
 

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We all love Lennon!.
emailed to me by a friend .
This chap does a splendid take-off to suit these unhappy times.
 

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I'm sure a lot of peeps will heave a sigh of relief!
 

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The low life are profiteering already, from a reliable source ........

Examples of items it found included:

  • A digital thermometer was selling for nearly £300 on eBay and and almost £150 on Amazon when the typical price is around £40.
  • Disinfectant which typically costs around £3 was being sold for almost £30 on eBay and nearly £10 on Amazon.
  • Bottles of antibacterial hand lotion which often retail for around £1 were priced at more than £10 each on Amazon and eBay.
  • A bottle of antibacterial hand gel normally costing around £1.50 was being sold for more than £100 on eBay by multiple sellers.
  • Bottles of bleach were listed for around £7 each on eBay and Amazon. Buyers would normally pay around £1 per bottle in the shops.
  • Boxes of tampons priced at around £3 at Boots were being sold for around double this amount on eBay.
  • Packets of infant formula which usually cost around £10 were being priced at about £40 on eBay.
 

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I got this link in an email this morning. The email was from one of my company pension trustees, I have downloaded the app and answered the questionaire.

Dear all

In view of the current health emergency I am disregarding my hitherto inflexible rule that Mike’s List will only be used to circulate information about pensions.

I received this email today from a reliable source: “Please join this research project that is trying to track the development of Covid 19. https://covid.joinzoe.com/

I have double-checked the origin of the website and am absolutely sure that it is genuine. I have signed up myself. It is necessary to download the Covid research app and to then follow the instructions. On my first attempt to sign up the site froze on me which may well have been that too many people were signing up.

It seems to me that this is a very worthwhile research project which will benefit everybody.

Kind regards and stay safe!

Mike P
 

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I gave up watching BBC Question Time some time ago as it was doing nothing to help my blood-pressure, but yesterday a video clip featuring Richard Horton, editor of The Lancet, was doing the rounds. The link is to a tweet on Twitter, but it featured on many other media outlets. It's hard to believe that only today are they rolling out testing to frontline NHS staff.
 
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