Macroeconomics, the economy, inflation etc. *likely to be very dull*
Comments
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As long as they paid their bills!rick_chasey said:
Mmm should probably not say too much, but no not me personally.Pross said:
Not a client then I take it?rick_chasey said:Poor Debit Suisse. Rescued by UBS, and the market reaction is to sell off UBS haha.
Wah wah waaaah.
I have had clients who have since gone bust because they were found to have been engaged in full on fraud so I am not above all of this.0 -
OK so the jitters are that the Swiss regulator insisted that all Credit Suisse bonds be written down to zero, including their AT1 bonds (bonds that convert to equity in the event of a big loss, in a post GFC attempt to reduce the likelihood of state bailouts).rick_chasey said:I am pretty confident the UK banking sector is in good order tbh.
(Despite, I should add, all the Brexiter moves to deregulate UK banking).
Worth remembering that it was SVB, amongst others, who lobbied the Trump administration to loosen the regulations for smaller, non-Too-Big-To-Fail banks so they could do the kind of things that ended up being their undoing.
The fact the Fed still insured most of the deposits I, personally, think is really bad. Moral hazard is still an issue, clearly.
That's about $17bn worth and the entire market of AT1 bonds is about $250bn so that's a pretty substantial loss.0 -
Loads of evidence to confirm that over the longer term it is time in the market, as you cannot time the market.surrey_commuter said:
I have heard similar with "their most successful customers are dead"rick_chasey said:
Did you see the story that came out of Fidelity in the US?surrey_commuter said:
I assume gold soared like an eagle when Covid hit - did you sell?pblakeney said:
If I've still got a holding at 75years old then I think it will be time for a pamper of some kind. 😉surrey_commuter said:
I was assuming we were talking about a drawdown phase of life and were holding it as a hedge for when other assets dropped. In this scenario when you need cash you should of course sell gold but most people won't sell their best performing asset.pblakeney said:
By rainy day I mean worse than 2008. Something that will be very noticeable.surrey_commuter said:
My concern is, that like most people, I would not recognise the rainy daypblakeney said:
See the italics above. Disclaimer, I am no financial advisor, I just hedged a percentage.surrey_commuter said:pblakeney said:
In simple terms it is a hedge. Hang around long enough and you'll find out that things aren't as stable as you appear to think. It's also an indicator of things going pear shaped.rick_chasey said:I’ve never understood gold as an investment
I have never really thought about investing in gold so could I ask some questions?pblakeney said:
In simple terms it is a hedge. Hang around long enough and you'll find out that things aren't as stable as you appear to think. It's also an indicator of things going pear shaped.rick_chasey said:I’ve never understood gold as an investment
Do you literally buy lumps of the shiny stuff? - You can but there are alternatives.
I get that is an indicator of uncertainty but is it a leading indicator and how easy is it to time the market? It's a gamble like any investment. See Gordon Brown.
Or do you put a % your portfolio in as a buy and hold? That's what I did. Rainy day money if rain turns to tropical thunderstorm.
What are the dealing costs/spread? Depends where you buy from. VAT & CGT free.
Of course picking the time at the top of the curve would simply be luck.
A mate who is a professional investor says the amateurs biggest mistake is not knowng when to sell as they don't want to crystalize (ie admit) losses or sell their best performers.
Strangely I got better at this when I read a throwaway comment on here or another forum which was if you don't know what to do then do half.
They were looking at their highest performing customers, and almost all of them were people who had forgotten they had an account with them.
that is more of an argument for "time in the market not timing the market"
In the short term you may get lucky with timing.
And yes, amateur investors (generally) are too emotional and not disciplined enough to buy and sell at the right times.0 -
are you saying that the regulator peered iunder the hood and did not like what it saw?rick_chasey said:
OK so the jitters are that the Swiss regulator insisted that all Credit Suisse bonds be written down to zero, including their AT1 bonds (bonds that convert to equity in the event of a big loss, in a post GFC attempt to reduce the likelihood of state bailouts).rick_chasey said:I am pretty confident the UK banking sector is in good order tbh.
(Despite, I should add, all the Brexiter moves to deregulate UK banking).
Worth remembering that it was SVB, amongst others, who lobbied the Trump administration to loosen the regulations for smaller, non-Too-Big-To-Fail banks so they could do the kind of things that ended up being their undoing.
The fact the Fed still insured most of the deposits I, personally, think is really bad. Moral hazard is still an issue, clearly.
That's about $17bn worth and the entire market of AT1 bonds is about $250bn so that's a pretty substantial loss.0 -
There's nothing that wasn't known before.surrey_commuter said:
are you saying that the regulator peered iunder the hood and did not like what it saw?rick_chasey said:
OK so the jitters are that the Swiss regulator insisted that all Credit Suisse bonds be written down to zero, including their AT1 bonds (bonds that convert to equity in the event of a big loss, in a post GFC attempt to reduce the likelihood of state bailouts).rick_chasey said:I am pretty confident the UK banking sector is in good order tbh.
(Despite, I should add, all the Brexiter moves to deregulate UK banking).
Worth remembering that it was SVB, amongst others, who lobbied the Trump administration to loosen the regulations for smaller, non-Too-Big-To-Fail banks so they could do the kind of things that ended up being their undoing.
The fact the Fed still insured most of the deposits I, personally, think is really bad. Moral hazard is still an issue, clearly.
That's about $17bn worth and the entire market of AT1 bonds is about $250bn so that's a pretty substantial loss.
This blog explains it well:
https://www.bitsaboutmoney.com/archive/banking-in-very-uncertain-times/?utm_source=substack&utm_medium=email
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Really think bank bonuses need to be reframed as "variable pay" as the PR is so unbelievably toxic I'm surprised it's even worth it.0
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I'm not sure the naming is the issue tbh.0
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Tipping? That seems to be supported in some trades.Jezyboy said:I'm not sure the naming is the issue tbh.
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I don't think it's unreasonable to pay people if they've had a good year and cut their pay back when it's a bad year.Jezyboy said:I'm not sure the naming is the issue tbh.
Tough to do with salaries. Easy to do with variable pay ("bonuses").
CS staff who did perform well despite the wider bank's performance still getting additional variable pay to their base salary does not seem unreasonable in that context.
The headline "Credit Suisse will still pay out bonuses even when the company went bust and had to be rescued" sounds pretty damn unreasonable.0 -
Without bonuses why would people work weekends in order to buy banks like SVB and Credit Suisse?0
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I doubt the regulators are getting much in way of bonuses.TheBigBean said:Without bonuses why would people work weekends in order to buy banks like SVB and Credit Suisse?
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They'll probably get time off in lieu.
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Meh, most people get bonuses that are, at best, tangentially related to performance.rick_chasey said:
I don't think it's unreasonable to pay people if they've had a good year and cut their pay back when it's a bad year.Jezyboy said:I'm not sure the naming is the issue tbh.
Tough to do with salaries. Easy to do with variable pay ("bonuses").
CS staff who did perform well despite the wider bank's performance still getting additional variable pay to their base salary does not seem unreasonable in that context.
The headline "Credit Suisse will still pay out bonuses even when the company went bust and had to be rescued" sounds pretty damn unreasonable.
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Sales people are often on sales formulasJezyboy said:
Meh, most people get bonuses that are, at best, tangentially related to performance.rick_chasey said:
I don't think it's unreasonable to pay people if they've had a good year and cut their pay back when it's a bad year.Jezyboy said:I'm not sure the naming is the issue tbh.
Tough to do with salaries. Easy to do with variable pay ("bonuses").
CS staff who did perform well despite the wider bank's performance still getting additional variable pay to their base salary does not seem unreasonable in that context.
The headline "Credit Suisse will still pay out bonuses even when the company went bust and had to be rescued" sounds pretty damn unreasonable.
(though not at banks, typically, I should add) 0 -
How do you think banking bonuses are decided?Jezyboy said:
Meh, most people get bonuses that are, at best, tangentially related to performance.rick_chasey said:
I don't think it's unreasonable to pay people if they've had a good year and cut their pay back when it's a bad year.Jezyboy said:I'm not sure the naming is the issue tbh.
Tough to do with salaries. Easy to do with variable pay ("bonuses").
CS staff who did perform well despite the wider bank's performance still getting additional variable pay to their base salary does not seem unreasonable in that context.
The headline "Credit Suisse will still pay out bonuses even when the company went bust and had to be rescued" sounds pretty damn unreasonable.0 -
So pay me some money and I can send you our 120 page report on exactly how each bank does thatTheBigBean said:
How do you think banking bonuses are decided?Jezyboy said:
Meh, most people get bonuses that are, at best, tangentially related to performance.rick_chasey said:
I don't think it's unreasonable to pay people if they've had a good year and cut their pay back when it's a bad year.Jezyboy said:I'm not sure the naming is the issue tbh.
Tough to do with salaries. Easy to do with variable pay ("bonuses").
CS staff who did perform well despite the wider bank's performance still getting additional variable pay to their base salary does not seem unreasonable in that context.
The headline "Credit Suisse will still pay out bonuses even when the company went bust and had to be rescued" sounds pretty damn unreasonable.
(roughly £80k that'll cost ya)0 -
I'm sure there'll be a few on the technical side of businesses happy to share some horror stories of sales performances that haven't translated into actual company performance!
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You're looking at the minutiae which isn't really necessary. Do any of them not consider the following: individual performance, team performance, company performance and perceived market level?rick_chasey said:
So pay me some money and I can send you our 120 page report on exactly how each bank does thatTheBigBean said:
How do you think banking bonuses are decided?Jezyboy said:
Meh, most people get bonuses that are, at best, tangentially related to performance.rick_chasey said:
I don't think it's unreasonable to pay people if they've had a good year and cut their pay back when it's a bad year.Jezyboy said:I'm not sure the naming is the issue tbh.
Tough to do with salaries. Easy to do with variable pay ("bonuses").
CS staff who did perform well despite the wider bank's performance still getting additional variable pay to their base salary does not seem unreasonable in that context.
The headline "Credit Suisse will still pay out bonuses even when the company went bust and had to be rescued" sounds pretty damn unreasonable.
(roughly £80k that'll cost ya)0 -
All of the above.TheBigBean said:
You're looking at the minutiae which isn't really necessary. Do any of them not consider the following: individual performance, team performance, company performance and perceived market level?rick_chasey said:
So pay me some money and I can send you our 120 page report on exactly how each bank does thatTheBigBean said:
How do you think banking bonuses are decided?Jezyboy said:
Meh, most people get bonuses that are, at best, tangentially related to performance.rick_chasey said:
I don't think it's unreasonable to pay people if they've had a good year and cut their pay back when it's a bad year.Jezyboy said:I'm not sure the naming is the issue tbh.
Tough to do with salaries. Easy to do with variable pay ("bonuses").
CS staff who did perform well despite the wider bank's performance still getting additional variable pay to their base salary does not seem unreasonable in that context.
The headline "Credit Suisse will still pay out bonuses even when the company went bust and had to be rescued" sounds pretty damn unreasonable.
(roughly £80k that'll cost ya)
It is done on a role-by-role basis as clearly there are different metrics to measure performance depending on what you do.0 -
When I say, most people, I'm saying outside of banking, and to some extent sales.TheBigBean said:
How do you think banking bonuses are decided?Jezyboy said:
Meh, most people get bonuses that are, at best, tangentially related to performance.rick_chasey said:
I don't think it's unreasonable to pay people if they've had a good year and cut their pay back when it's a bad year.Jezyboy said:I'm not sure the naming is the issue tbh.
Tough to do with salaries. Easy to do with variable pay ("bonuses").
CS staff who did perform well despite the wider bank's performance still getting additional variable pay to their base salary does not seem unreasonable in that context.
The headline "Credit Suisse will still pay out bonuses even when the company went bust and had to be rescued" sounds pretty damn unreasonable.
For many employees they could have individually amazing years, but if the company has a shocker, they aren't getting a bonus.
So although I can see the argument that it wouldn't be fair not to pay the high performers at CS just caus the bank has had a bit of a shocker...I just don't particularly feel sorry for them.0 -
Right which is why I find the statement (not yours) that they are unrelated to performance hard to justify.rick_chasey said:
All of the above.TheBigBean said:
You're looking at the minutiae which isn't really necessary. Do any of them not consider the following: individual performance, team performance, company performance and perceived market level?rick_chasey said:
So pay me some money and I can send you our 120 page report on exactly how each bank does thatTheBigBean said:
How do you think banking bonuses are decided?Jezyboy said:
Meh, most people get bonuses that are, at best, tangentially related to performance.rick_chasey said:
I don't think it's unreasonable to pay people if they've had a good year and cut their pay back when it's a bad year.Jezyboy said:I'm not sure the naming is the issue tbh.
Tough to do with salaries. Easy to do with variable pay ("bonuses").
CS staff who did perform well despite the wider bank's performance still getting additional variable pay to their base salary does not seem unreasonable in that context.
The headline "Credit Suisse will still pay out bonuses even when the company went bust and had to be rescued" sounds pretty damn unreasonable.
(roughly £80k that'll cost ya)
It is done on a role-by-role basis as clearly there are different metrics to measure performance depending on what you do.0 -
I'm just talking about the headline "bankers at bust bank earn bonuses" is not a good one and through that lens it looks terrible.TheBigBean said:
Right which is why I find the statement (not yours) that they are unrelated to performance hard to justify.rick_chasey said:
All of the above.TheBigBean said:
You're looking at the minutiae which isn't really necessary. Do any of them not consider the following: individual performance, team performance, company performance and perceived market level?rick_chasey said:
So pay me some money and I can send you our 120 page report on exactly how each bank does thatTheBigBean said:
How do you think banking bonuses are decided?Jezyboy said:
Meh, most people get bonuses that are, at best, tangentially related to performance.rick_chasey said:
I don't think it's unreasonable to pay people if they've had a good year and cut their pay back when it's a bad year.Jezyboy said:I'm not sure the naming is the issue tbh.
Tough to do with salaries. Easy to do with variable pay ("bonuses").
CS staff who did perform well despite the wider bank's performance still getting additional variable pay to their base salary does not seem unreasonable in that context.
The headline "Credit Suisse will still pay out bonuses even when the company went bust and had to be rescued" sounds pretty damn unreasonable.
(roughly £80k that'll cost ya)
It is done on a role-by-role basis as clearly there are different metrics to measure performance depending on what you do.
You also have to remember than institutional and cultural problems may create collective poor performance, but that is usually ignored when personal comp is decided (and may indeed, actually boost comp for various reasons - try hiring a risk manager into Credit Suisse in the last 5 years without giving them some serious danger money)
So there is asymmetry in the way actual performance is rewarded, and I think that's probably the root cause of the dislocation between the two positions.0 -
May as well reward the rainmakers for what they bring in rather than what profit the company makes which is out of their handsJezyboy said:
When I say, most people, I'm saying outside of banking, and to some extent sales.TheBigBean said:
How do you think banking bonuses are decided?Jezyboy said:
Meh, most people get bonuses that are, at best, tangentially related to performance.rick_chasey said:
I don't think it's unreasonable to pay people if they've had a good year and cut their pay back when it's a bad year.Jezyboy said:I'm not sure the naming is the issue tbh.
Tough to do with salaries. Easy to do with variable pay ("bonuses").
CS staff who did perform well despite the wider bank's performance still getting additional variable pay to their base salary does not seem unreasonable in that context.
The headline "Credit Suisse will still pay out bonuses even when the company went bust and had to be rescued" sounds pretty damn unreasonable.
For many employees they could have individually amazing years, but if the company has a shocker, they aren't getting a bonus.
So although I can see the argument that it wouldn't be fair not to pay the high performers at CS just caus the bank has had a bit of a shocker...I just don't particularly feel sorry for them.0 -
Lolrick_chasey said:SVB were always shonky.
Also, not really related to the thread..!0 -
Borrowing, the difference between spending and tax income, was £16.7bn, last month, the Office for National Statistics (ONS) said.https://www.bbc.co.uk/news/business-65013583
The ONS said this was largely due to spending on energy schemes this year.
However, the interest paid on government debt was £6.9bn in February - £1.3bn less than a year earlier.
Interest payments fell because of changes in the inflation rate that sets how much interest the government has to pay on its debts.0 -
If someone calls themselves a rainmaker and their company goes bust, does it mean that they were only a drizzle encouragersurrey_commuter said:
May as well reward the rainmakers for what they bring in rather than what profit the company makes which is out of their handsJezyboy said:
When I say, most people, I'm saying outside of banking, and to some extent sales.TheBigBean said:
How do you think banking bonuses are decided?Jezyboy said:
Meh, most people get bonuses that are, at best, tangentially related to performance.rick_chasey said:
I don't think it's unreasonable to pay people if they've had a good year and cut their pay back when it's a bad year.Jezyboy said:I'm not sure the naming is the issue tbh.
Tough to do with salaries. Easy to do with variable pay ("bonuses").
CS staff who did perform well despite the wider bank's performance still getting additional variable pay to their base salary does not seem unreasonable in that context.
The headline "Credit Suisse will still pay out bonuses even when the company went bust and had to be rescued" sounds pretty damn unreasonable.
For many employees they could have individually amazing years, but if the company has a shocker, they aren't getting a bonus.
So although I can see the argument that it wouldn't be fair not to pay the high performers at CS just caus the bank has had a bit of a shocker...I just don't particularly feel sorry for them.0 -
I work in a sales role and we used to get commision as well as being part of the group profit share. The CEO pointed out that profit was entirely down to him as he got to decide capital expenditure. He took us out of the group profit share and enriched the schemes that we could influence.Jezyboy said:
If someone calls themselves a rainmaker and their company goes bust, does it mean that they were only a drizzle encouragersurrey_commuter said:
May as well reward the rainmakers for what they bring in rather than what profit the company makes which is out of their handsJezyboy said:
When I say, most people, I'm saying outside of banking, and to some extent sales.TheBigBean said:
How do you think banking bonuses are decided?Jezyboy said:
Meh, most people get bonuses that are, at best, tangentially related to performance.rick_chasey said:
I don't think it's unreasonable to pay people if they've had a good year and cut their pay back when it's a bad year.Jezyboy said:I'm not sure the naming is the issue tbh.
Tough to do with salaries. Easy to do with variable pay ("bonuses").
CS staff who did perform well despite the wider bank's performance still getting additional variable pay to their base salary does not seem unreasonable in that context.
The headline "Credit Suisse will still pay out bonuses even when the company went bust and had to be rescued" sounds pretty damn unreasonable.
For many employees they could have individually amazing years, but if the company has a shocker, they aren't getting a bonus.
So although I can see the argument that it wouldn't be fair not to pay the high performers at CS just caus the bank has had a bit of a shocker...I just don't particularly feel sorry for them.
A company can make a loss or go bust for a variety of technical reasons but the rainmakers will still be valuable0 -
Catherine Mann, one of the nine members of Threadneedle Street’s monetary policy committee, said she was concerned about the ability of firms to take advantage of consumer willingness to tolerate higher prices.https://www.financialaccountant.co.uk/news/bank-of-england-policymaker-warns-of-greedflation-risk-to-consumers#:~:text=risk to consumers-,Bank of England policymaker warns of 'greedflation' ris
In an interview with Bloomberg, Mann said the pricing power of companies meant bringing down the UK’s annual inflation rate to its 2% target would require interest rates to rise further from their current 4% level.
The Bank of England has been closely monitoring pay levels for signs of a developing wage-price spiral but Mann’s comments reflect growing anxiety about the risk posed by corporate greedflation – where businesses more than pass on higher costs to customers – although she did not use that specific term. The European Central Bank expressed similar concerns last week.
This has been quite obvious to a fair few people for a while. What are/can Governments trying to do about it though?0 -
I definitely think some of the major food brands are showing huge price increases way beyond the average basket.focuszing723 said:Catherine Mann, one of the nine members of Threadneedle Street’s monetary policy committee, said she was concerned about the ability of firms to take advantage of consumer willingness to tolerate higher prices.https://www.financialaccountant.co.uk/news/bank-of-england-policymaker-warns-of-greedflation-risk-to-consumers#:~:text=risk to consumers-,Bank of England policymaker warns of 'greedflation' ris
In an interview with Bloomberg, Mann said the pricing power of companies meant bringing down the UK’s annual inflation rate to its 2% target would require interest rates to rise further from their current 4% level.
The Bank of England has been closely monitoring pay levels for signs of a developing wage-price spiral but Mann’s comments reflect growing anxiety about the risk posed by corporate greedflation – where businesses more than pass on higher costs to customers – although she did not use that specific term. The European Central Bank expressed similar concerns last week.
This has been quite obvious to a fair few people for a while. What are/can Governments trying to do about it though?
Some of that may be the supermarkets putting bigger markups on premium products to suppress rises on staples but I do think there is some greedflation going on also.
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