Guns, babies and Jesus: America tries to export its culture wars to the UK. A debt bomb in the housing market? "Brexit has failed", but Farage is still here.
Brexiteers promised the end of UK manufacturing. They may have been right.
The debt bomb sense in theory and in isolation of everything else. Certainly a rate hike won’t impact purchasing power like it used to. With fixed rate mortgages there’s scope for rates to go higher today than before, to get the desired purchasing power hit. And the delay is a very valid observation. You would think the US would have to hike its rates more thank the UK or Ireland given that they’ve more fixed rate mortgages of longer terms?
But then you layer in everything else. Now that covid is gone we’re back to globalisation and the search for the best sweat shops, and we have AI coming down the track which is going to be automation on steroids. All eroding the expense base. You also have aging populations in mature economies. All those medium term trends points towards lower interest rates being sustained into the future once this inflation blip passes. And you know what? I think the market believes this too. Look at the forward rates implied by the heavily inverted swap curves. They all have rates coming down well before the debt bomb really bites.
We’re getting into forecasting now but there’s lots of optimism for the debt bomb not being too severe if it does materialise at all. And if it does, it’s likely to affect a smaller cohort who happen to have their fixed terms maturing in the next two years perhaps. Many people were advised at the start of this cycle to break their fixed term, pay the penalty and lock in for longer again
I’m almost embarrassed to throw in my ten cents worth after Sean’s monumental comments above, which might deserve a podcast dedicated to your thoughts on his comments.
From my perspective, I’d prefer to see a little less commentary on the day to day goings in in Britain. Unless, of course it is directly related to Ireland.
I for one would like to hear a little more discussion on the EU, which might help to fill the gap.
Good discussion again lads.
The debt bomb sense in theory and in isolation of everything else. Certainly a rate hike won’t impact purchasing power like it used to. With fixed rate mortgages there’s scope for rates to go higher today than before, to get the desired purchasing power hit. And the delay is a very valid observation. You would think the US would have to hike its rates more thank the UK or Ireland given that they’ve more fixed rate mortgages of longer terms?
But then you layer in everything else. Now that covid is gone we’re back to globalisation and the search for the best sweat shops, and we have AI coming down the track which is going to be automation on steroids. All eroding the expense base. You also have aging populations in mature economies. All those medium term trends points towards lower interest rates being sustained into the future once this inflation blip passes. And you know what? I think the market believes this too. Look at the forward rates implied by the heavily inverted swap curves. They all have rates coming down well before the debt bomb really bites.
We’re getting into forecasting now but there’s lots of optimism for the debt bomb not being too severe if it does materialise at all. And if it does, it’s likely to affect a smaller cohort who happen to have their fixed terms maturing in the next two years perhaps. Many people were advised at the start of this cycle to break their fixed term, pay the penalty and lock in for longer again
I’m almost embarrassed to throw in my ten cents worth after Sean’s monumental comments above, which might deserve a podcast dedicated to your thoughts on his comments.
From my perspective, I’d prefer to see a little less commentary on the day to day goings in in Britain. Unless, of course it is directly related to Ireland.
I for one would like to hear a little more discussion on the EU, which might help to fill the gap.