UK M4 shows continuing decline

Figures released today by the Bank of England show that M4 lending (quarterly, annualised) shrank again in the second quarter of 2012 - slightly up from Q1, but still lower than before. Where will it end?

Playing the chartist game, I connected the last two pairs of highs and lows, expecting to see the lines cross somewhere and give us an indication of the bottom. Instead, the channel not only trends downward but is widening.

Join your own dots, but despite all the QE I don't see a terminus. Will the next inflection - the next "top" - be in negative territory?

INVESTMENT DISCLOSURE: Mostly in cash (and index-linked National Savings Certificates), but now planning to build up some reserves of physical gold via regular saving.

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UK M4 shows continuing decline

Figures released today by the Bank of England show that M4 lending (quarterly, annualised) shrank again in the second quarter of 2012 - slightly up from Q1, but still lower than before. Where will it end?

Playing the chartist game, I connected the last two pairs of highs and lows, expecting to see the lines cross somewhere and give us an indication of the bottom. Instead, the channel not only trends downward but is widening.

Join your own dots, but despite all the QE I don't see a terminus. Will the next inflection - the next "top" - be in negative territory?

Support the Olympics!

IRS and pension fund managers robbing distressed Americans

A miserable twist of the knife: Americans are increasingly defaulting on pension loans, and the taxman and plan manager make money out of it all.

The 401(k) plan is a contribution-based pension for employees. Many such plans allow loans, often with restrictions as to their purpose (e.g. for college fees, medical expenses or housing); but Leo Kolivakis relays reports of an estimated $37 billion in annual defaults, as the great financial crisis continues to claim victims.

The worst of it is, when the borrower defaults, income tax is charged on the loan - plus (often) an extra penalty (presumably to the benefit of the plan manager):

"This can take you from a $6,000 loan to a wipe-out of $10,000 from your 401(k savings) ... and this is happening to people at the very worse times of their personal and financial lives."

What to do with bankers, G4S etc

In Papua New Guinea, they know how to deal with those who expect excessive bonuses:

Police in remote Papua New Guinea have arrested members of an alleged cannibal cult accused of killing at least seven people, eating their brains raw and making soup from their penises...

The 29 people were part of a 1,000-strong group formed to combat errant sorcerers who... had begun charging exorbitant fees...

"We ate their brains raw and took body parts such as livers, hearts, penis and others back to the hausman (traditional men's houses) for our chief trainers to create other powers for the members to use," one of those arrested said.

Make mine a large one.

Is the generosity of Spain's social security system preventing revolution?

The Talking Clock blog is following the anti-austerity protests in Spain live, claiming that the BBC is showing little interest (though the BBC gave this online a couple of days ago).

However, Fin24's report includes an interesting detail: the newly unemployed there are to still get 50% of basic salary (down from 70%).

This raises the question of differences between social security systems across the EU, and in fact the European Commission has been looking at exactly that in a paper issued in May 2012 (pdf).

The authors find that "Belgium, Denmark, Portugal, Spain, Finland and the Netherlands appear to be relatively generous in terms of unemployment insurance replacement rates and duration compared with the EU average, while in the UK, Malta, Slovakia, Estonia, Poland and Romania benefit conditions are relatively tight", although Spain is not named among the countries (Belgium, Malta, Austria, Denmark, Ireland, Finland and Portugal) that have the most generous social security systems overall.

So while obviously financially constrained, the protestors may have enough to keep going and make a fuss, and not so little that they are driven in desperation to serious and sustained acts of rebellion.

Is this the real point of social security: to maintain safe those in power?

Recuerdos del Forest of Dean

A special needs teaching colleague's retirement do last week. Just try to stop teachers talking. One of the older staff tells us she'd once taught in Coleford, where the children in her class shared just three surnames. Aunts, nieces and nephews all behind the desk. Some of the children were still at mother's breast - at 12 and 13.

Another teacher said she'd done supply work (commuting from refined Cheltenham) in another place in the Forest. Two huge mothers stood at the school door like (or as) bouncers. Inside, there were four adults in charge of a class of 18 children, the air nevertheless thick with missiles etc.

My old financial services boss had previously been a headteacher in Dean. His 60th birthday celebration was held in the Speech House in Coleford. He recalled that when he'd first arrived as a class teacher, his head had asked him how he was getting on with the children "I can't hear what they are saying," he replied; the first sign of the partial hearing loss (owing to noisy early-generation computer printers in the ICT suite where he taught) that eventually got him his early retirement with enhancement. Later, supplied with a hearing aid, he told the head, "I can hear them now, but I can't understand what they're saying" (he was from Lancashire). Later still, he told the head, "I can hear them now, and I can understand them now; but I don't like what they're saying."