“Stash cash under your mattress” ~ Fund manager

http://www.telegraph.co.uk/finance/personalfinance/investing/11686199/Its-time-to-hold-physical-cash-says-one-of-Britains-most-senior-fund-managers.html

It’s short and they’ve been going SJW so, in full so I can explain;

The manager of one of Britain’s biggest bond funds has urged investors to keep cash under the mattress.

Ian Spreadbury, who invests more than £4bn of investors’ money across a handful of bond funds for Fidelity, including the flagship Moneybuilder Income fund, is concerned that a “systemic event” could rock markets, possibly similar in magnitude to the financial crisis of 2008, which began in Britain with a run on Northern Rock.

“Systemic risk is in the system and as an investor you have to be aware of that,” he told Telegraph Money.

deanwinchester supernatural wink flirty hey hello nice
Some of us like it that way. A little chaos spices up the day.

The best strategy to deal with this, he said, was for investors to spread their money widely into different assets, including gold and silver, as well as cash in savings accounts. But he went further, suggesting it was wise to hold some “physical cash”, an unusual suggestion from a mainstream fund manager.

He knows something. He grew a conscience?
Reminds me of the Most Honest Stockbroker in the Entire World.

His concern is that global debt – particularly mortgage debt – has been pumped up to record levels, made possible by exceptionally low interest rates that could soon end, and he is unsure how well banks could cope with the shocks that may await.

He daren’t mention the other 3 horsemen of the economic apocalypse: student loans, pensions/welfare and the NHS.

lestat rat judgemental

He pointed out that a saver was covered only up to £85,000 per bank under the Financial Services Compensation Scheme – which is effectively unfunded – and that the Government has said it will not rescue banks in future, hence his suggestion that some money should be held in physical cash.

WRONG.

Idiot isn't as much a person as a process of doing things wrong

Per banking LICENSE.
Many banks operate under a single license, meaning you’re entitled to 1 (one) £85k payment. You need to check yourself. This assumes the currency value doesn’t change compared to nominal.

He declined to predict the exact trigger but said it was more likely to happen in the next five years rather than 10. The current woes of Greece, which may crash out of the euro, already has many market watchers concerned.

Oh, he means the EU collapse.

I will add for the record that being a hater doesn't make you wrong

Mr Spreadbury’s views are timely, aside from Greece. A growing number of professional investors (see comment, right) and commentators are expressing unease about what happens next.

The prices of nearly all assets – property, shares, bonds – have been rising for years.

House prices have risen by 26pc since the start of 2009, and by 68pc in London. The FTSE 100 is up by 75pc.

Although it feels counter-intuitive, this trend of rising prices should continue if economies remain weak, because it gives central banks licence to keep rates low and to carry on with their “quantitative easing” programmes.

franklook

Conversely, if the economy does pick up and interest rates need to rise, the act of doing so is likely to stall the economy and force them to be reduced again. Once more, demand for those mainstream assets would be rekindled and the asset boom continues.

But then there is the shock event. Daily Telegraph columnist Jeremy Warner also captured some of the concerns this week when he wrote that the trigger for an “inevitable correction” could come from “a clear blue sky – a completely unanticipated event.

Like a…. Black Swan? If only there were a name for this effect?

How are fund managers preparing for this gloomy possibility?

Sadistic glee since they’re making bank twice (getting out before this Black Swan crash plus future selloff). 3x if you count ’08 but who does?

Mr Spreadbury sticks to bonds because of the remit of his funds. Within that world, he said a shock to the system would cause a flight to safety and the price of British government bonds, or gilts, would rise sharply. He also holds bonds of companies that would be most protected in times of turmoil – water companies, power network operators – and those where the bonds are secured on a solid asset, such as land or buildings.

Sounds like he’s prepping for a war.

Examples include Center Parcs and Intu, which owns shopping centres.

Marcus Brookes, another well regarded fund manager who looks after billions of pounds worth of investments, is less constrained in where he invests, because of the different remit of his funds. Schroder Multi-Manager Diversity, for example, can pick and choose between assets.

Mr Brookes said the probability of a major shock event was small but even he holds 29pc of the Diversity portfolio in cash, a huge proportion compared with most funds. This decision is due to his concern that bonds are overvalued and may fall. He aims to deliver returns of 4pc above inflation so can’t afford to put too much in assets that he believes will lose money.

“The problem is that people are struggling to work out how to diversify if QE programmes stop,” he said.

no what I don't believe it can't be true disbelief pushing daisies
I wouldn’t give those people Monopoly money.

Mr Spreadbury added: “We have rock-bottom rates and QE is still going on – this is all experimental policy and means we are in uncharted territory.

Seems pretty planned to me.

“The message is diversification. Think about holding other assets. That could mean precious metals, it could mean physical currencies.”

But you said above….
Nevermind, they don’t have a clue.

Apocalypse incoming. Got it.

FTSE 100 correction “more than a dip” over Europe’s woes

Telegraph;

The Global stock market selloff accelerated on Friday with the FTSE 100 index falling 91.56 points, or 1.4pc, to 6,340.2, it’s lowest level in a year and 7.81pc below highs of 6,878 on May 14.

Pictures often communicate these things better;

ftse1002014drop

Gold, a shelter for investors in times of uncertainty, has surged during the past week by as much as 2.64pc, to $1,222.95 per ounce, as the Federal Reserve minutes hinted at delaying interest rate rises till later next year.

goldsafehaven2014values

Meanwhile, the CBOE Volatility Index, a measure of investor anxiety known as the Vix or “fear index”, leapt more than 24pc.

indexvolatile2014

“The FTSE 100 has broken through the support on its recent trading range and US traders have moved from the ‘buy the dip’ and ‘risk on’ commentary we heard earlier in the year, this is becoming more than just a dip,” said Alastair McCaig, market analyst from IG.

“Going into the weekend with so much uncertainty in the air will only further fuel traders compulsion to get out of risky assets and it would take a miracle for the bulls to salvage anything today,” added Jonathan Sudaria, from Capital Spreads.

The Dow Jones Industrial Average slumped by 334.97 points, or 1.97pc, to close at 16,659.25 last night as Wall Street feared the US economy would be dragged down by weakness in Europe and the rest of the world.. The price of Brent crude also collapsed to its lowest level in five years at $89.42 per barrel.

“European markets looks like they are staring over the edge and into the abyss, or may have even stepped off the cliff,” added Mr McCaig as Ebola screening at UK airports and the discovery of new cases raised fears the deadly virus may have spread to the continent.

“European equities have plunged on the open as storm clouds gather over the global economy. Bad economic data is now being viewed as bad and the dovish signals from central banks are now being taken as a sign of weakness rather than a reason to ramp up equities,” said Mr Sudaria.

In Germany [DS: the people propping up the EU] the benchmark DAX index collapsed by 196 points, or 2.16pc, to 8809.83, bringing the falls for the week to more than 4pc.

DAX2014low

Investors were concerned about the slowdown in the German economy as exports in August reported their biggest fall since January 2009 when the global economy was rocked following the collapse of Lehman Brothers. The CAC 40 index of leading shares in France was also 63.9 points, or 1.5pc lower, at 4,076.27 by midday.

In London it was travel stocks which led the market lower on ebola fears, with TUI Travel down 7.34pc to 330.7p and Carnival the cruise ship operator falling 3.3pc to £21.93. Oil related stocks were also feeling the pain as African oil explorer Tullow Oil fell 5.6pc to 539p, and Weir the Scottish based manufacturer of industrial pumps used in the oil industry, was down 3.2pc to £22.26.

Hold on tight, it’s gonna be a bumpy ride.

Podcast: Dollar collapse imminence, hyperinflation, deflation and de-dollarization

http://ftmdaily.com/daily-briefing/060914/

Superb podcast, explains very simply wtf is going on with the dollar in 30 minutes. If short on time, start at 9:00.

h/t to the Captain for the link

I wonder if American historians will look back and say it wasn’t worth upsetting Putin over the Olympics.

STFU and pay attention to the truth you little bitches we are trying to help you!