From: M Holmes 
Newsgroups: uk.politics.misc uk.finance
Subject: Re: SIPPS shock as Brown shelves tax loophole for residential property.
Date: Tue, 6 Dec 2005 16:11:00 +0000 (UTC)

In uk.finance Richard Faulkner  wrote:

>>> Given that he has another 3 years to screw things up even further, it
>>> will probably take another 5 year for the Conservatives to get us back
>>> on track - I just hope they are given the time.

>>Oh dear. You had to blow it didn't you. Believing in the Tories is no
>>different to believing in Labour.

> Yes.... I thought for a minute or so about the last part of the last 
> paragraph, and decided life's too short, so let it go 

> Who would it be best to believe in???

Personally I root for no government at all, but I'd be prepared to
compromise if politicians were there strictly to run national defence on
no more than 5% of GDP and were banned outright from interfering in the
economy in any way whatsoever.

> If your theories are correct, we're all in the shit anyway

I'm not predicting apocalypse followed by survivalism (though in the
nuclear age it can never be entirely ruled out) just some rough
financial problems ahead for the world. After a couple of decades we'll
probably come through OK.

> (except those rich in cash and gold??)

Finally it's starting to look not entirely insane to tell people to buy
gold.

> so what to do?

Fortunately the advice to reduce debt as much as humanly possible and
save as much cash as possible by cutting down on as much as possible is
very sound advice irrespective of whether I'm right and can be done to
some degree by everyone.

If I am right then the key to survival will be having as little debt as
possible and holding on to income while cutting expenses, while the key
to prospering will be to have free cash available for when assets are
being sold at distress prices.

Timing Note: My expectation that Fannie and Freddie would be Ground Zero
of the coming crisis is beginning to bear fruit. Between them they now
have between 15 and 19 billion Dollars of miscounted money, and
counting. Given that this resulted in 40 million of bonuses for the top
guy, he may well be going to jail. Meanwhile Fannie says that it will
take 8 million man hours of their own accountants to try to get accurate
numbers for three years ago. That doesn't count investigation time by
the SEC and other interested parties. I daresay there's more fun to come
there but it's safe to conclude that the main conduits of credit
recycling are being welded shut (they've even been ordered to sell
mortgage-back assets they were holding on their own books because (and I'm
quoting Sir Printsalot here, not my own ravings on the subject) they
pose a threat to the global financial system.

In short: we've pretty much hit all my targets for the pre-game warmup.
The game, my dear Watsons, is now very much afoot...

FoFP