Ha ha, the tourist industry from Sweden got it's biggest ever boost last Friday
I'd say the post-Zlatan economy has lost out on millions and millions due to the massive drop in the value of the pound this past week. Opportunity missed
Brexit and Financial Markets
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In the latest episode of the United Hour Podcast, Nik (@Rood) is joined by CEO Duncan Drasdo and Financial Director Andy Green from the Manchester United Supporters Trust for a special episode on all things behind the scenes at Old Trafford including a brief history of MUST and their aims today, views on INEOS and Sir Jim Ratcliffe so far, and the Old Trafford regeneration.
Ha ha, the tourist industry from Sweden got it's biggest ever boost last Friday
I'd say the post-Zlatan economy has lost out on millions and millions due to the massive drop in the value of the pound this past week. Opportunity missed
Devaluation should also help our balance of payments deficit to be fair.
At what stage does the government just say feck it I know we held a referendum but it's not worth all this hassle sorry but we're staying in the EU.
Henderson and Threadneedle property funds suspended now. That's five in total with £14.1bn of assets.
Nah old people vote in their droves so they'll be looked after.
I think they've already decided that tbf..
Dow , S&P and Nasd all having a bit of a rebound from early trading. pound up to 1.29 , get in!
They've probably already decided that but won't actually ever say it. Just going to delay and drag everything out with years of negotiations that never go anywhere and article 50 never being invoked.
Wouldn't the UK just keep struggling throughout that period though due to the high level of uncertainty?
I think i read in the Guardian today that the French government believes an Article 50 notice can be rescinded.. Would be an interesting angle if we used that as a "get out" if negotiations dont go as promised by Leave.
Are they just comercial property or resi aswell?
Thats what I'm saying ..surely thats not a sensible strategy because the economy will keep tanking?
But if they do invoke article 50 it may well collapse completely .... while there's still hope and all that
Yes there will be recessions, there always are but the smart move is to add stability to your economy to make sure you are not at the epicentre of the crash. The ones who crash hardest have the hardest job recovering.
We have caused this crash and are right in the epicentre it will likely take us a lot longer to rebound than the other major economies.
Just say that due to the economic uncertainty we wont be leaving the EU. The crash will carry on a while longer but be over a lot quicker.
Canada life too.
Well, if there is any indicator shit is about to hit the fan, are exactly these funds suspending payouts. Just like happened almost 10 years ago in the USA.
And its gonna get fecking ugly.
ps. how are these funds different from a pyramidal scheme? aren't those illegal in UK?
Are you referring to the Money Market funds in 08? If so there is a huge difference.
Pyramids use new investments to pay older inestors and are a scam designed to collapse.
Property funds actually have underlying investments and can provide sustainable returns. Big difference.
so why they are preventing their investors to take their money out now?
ps. i was referring to 2007. Bear Sterns was the first to prevent their investors to take their money out from mortgage-related hedge funds. It was the first sign of what was going to come a year later...
Because property investments are by nature illiquid. Have you ever bought/sold a house? Takes ages.
That said i do expect property prices to fall.
On top of that. This idea that immigrants are taking the jobs.
UK unemployment is very low at 5.4% The last two years have seen this reduce as well.
France is over 10% unemployed with the same population as the UK, and France unemployment is rising.
Spain over 20% unemployed
Italy over 12% unemployed
Holland 7% unemployed
Belgium 8.5% unemployed
Imagine if we had 10-15% unemployment.
Germany and the UK have been doing very well out of the EU. The strong got stronger.
Regarding the stock markets. European stocks have taken a hammering. I was expecting them to bounce back by now.
Commercial. Residential never really works in funds- too many scratty holdings. If you're a commercial property manager you can try and upgrade a regional shopping centre, get better tenants in etc...
They are not suspending 'payouts', they have just blocked redemptions. It's a sensible move. The alternative is they hold a fire-sale of assets, which is not in investors' interests.
Aberdeen has become the latest asset manager to announce its position. Bit different- everyone else suspended, they said you can get out, but you'll pay a 17pc exit fee. Interesting dilemma.
They are not Ponzi schemes ffs. They are authorised funds that hold bricks and mortar properties. Everyone is shitting about the Brexit and ran for the door. This is why you should go closed-ended and favour funds with permanent capital for illiquid asset classes.
Until they run out of money inflow...
For me, if you don't have the cash in hand to be able to pay any investor at any given time, then you shouldn't be authorised to gamble with other's people money. yeah, people is free to work their money and make it multiply, but people is obviously greedy and ignorant and will put it where the bigger $$$ promises are. They should be protected from unregulated capitalism.
who regulates this investment funds? the same entity that regulates banks?
in my experience, as long as this funds pays their taxes, probably nobody from the government gonna raise a eyebrow until they read about the collapse in the news.
ps. i hope i'm wrong and they (ifunds) actually have a plan B...
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The underlying assets the funds hold are still paying the fund managers income. Whatever the outcome re valuations, they still hold loads of bricks and mortar.
I wouldn't blame the regulator- it's an irrational stapede. It's absolutely nothing to do with the banks or their regulation.
The funds are not geared, it is a snowball panic. It's very different to 2008.
Who knew that open-ended fund structures aren't the most appropriate for massively illquid assets.
They can pay any investor at any given time. They just can't pay all of them at once. The only way to do that would be to not invest and keep everything in cash. Money is all tied up in property, it takes time to sell.
Unless you already have a vast amount of money to cover for any loss.
For example, imagine Bill Gates decides to open a property investment fund in UK, backed up by his own personal funds.
Lets say he deposits 2Billion pounds in his account at some British bank and just let it sit there gaining a little interest, only as a back up in case his fund needs the extra cash.
At that point, he could receive up to 2billion in investments that would be 100% covered... and that would be his line. "Bill gates always pays his debts"
that's a responsible way to do it in my opinion. So no matter the contingency, brexits, etc, your fund would be always able to pay every single cent to every single investor at any given time.
Plus, that's the only way to make sure the investment fund gonna work his socks off to always do the best they can... when its their own money on the line too.
I'm completely naive here: but isn't this what reserve ratios for (normal) banks are all about?
Where is your average property fund going to get that kind of cash from? The biggest property funds are well into the billions. And if they could get it, where will they keep it? Anything over a few million and you can't just deposit it in a bank account.
It may work for major banks who have to keep aside capital but unrealistic for anyone else.
i don't know but i hope so!
Maybe instead of just a few big property funds, it would work better with a lot of smaller funds?
I'm just brainstorming, trying to make sense of it all... why are they suspending the funds? it was just precaution? Who pulled their money out first before they stop the pull outs? privileged information or just collective fear?
I hope I'm just being paranoic and the uk economy and property funds are well prepared to handle the turbulent times ahead.
They typically maintain a few percent in cash. That's enough for day to day withdrawals, but now people are wanting to withdraw more than they have available. Assets would need to be sold which takes time, so they suspend withdrawals.
It's really just collective fear. No-one knows what will happen to UK interest rates, property prices etc so they want out. Regardless of the long term effects of Brexit this was always going to happen in the near term. People will lose money in a market crash, there's no way around that.
I heard a chap from RBS, fresh from a meeting with Osbourne the other day, say that this wasn't as bad as the 2008 banking crisis because the banks have healthy capital reserves and the capability to lend this time round.
Banks reserve ratios are like less than 10%. When people start withdrawing money at a quick rate ( like now, with property funds) - it is called a bank run. This happened with Northern Rock not long ago.
Irish Anglo Bank infamously had a reserve ratio of less than 1%. Lol. Basically, it would be nice to have enough reserves to cover every investor but it wouldn't work in practice.
Credit would completely dry up (by definition) and there would be a global depression. Not so nice.
I know,duh . That's why I said in practice. It would be nice to have security, but then there would obviously be no growth. I was just adding to the discussion on reserves.
Do banks in the UK have anything like the FDIC we have here in the states?
You saw how shares tanked on Black Friday as everyone sold and ran? Well, the same happened with property. People wirry that valuations will dive, eg in the City as the US banks piss off to Frankfurt.
Some property funds have suspended trading. They are still receiving rental income from the tenants in their buildings, so their cash will back over time and they can start to meet redemptions if people still want out.
There's no conspiracy here. If they try and sell half their buildings now in desperation they will get shafted on the price. Is that preferable?
It sounds like our FSCS. I think up to £60k in deposits is covered if a bank fails here. They changed the cap the other year.
Yeah we get up to $250k insured per account. What did the cap used to be?
Yeah people need to stop equating this with prior events. This isn't a systemic fault due to poor regulation it's due to an enforced economic event taking its toll. The regulators have done a good job.
There's nothing wrong with OEICS in general or even these property funds. Suspensions are a well trodden mechanism and perform a useful job in protecting investors monies.
There's nothing wrong with OEICS in general or even these property funds. Suspensions are a well trodden mechanism and perform a useful job in protecting investors monies.
Ah, cut from £85k to £75k last year. Was only £35k back in 2008 before it was raised, initially to £50k. Way down on the US version.
http://www.telegraph.co.uk/finance/...s-compensation-rules-the-new-75000-limit.html