Monday, August 24, 2015

Holding your nerve

"If you can make one heap of all your winnings 
And risk it on one turn of pitch-and-toss, 
And lose, and start again at your beginnings 
And never breathe a word about your loss; 
If you can force your heart and nerve and sinew 
To serve your turn long after they are gone, 
And so hold on when there is nothing in you 
Except the Will which says to them: 'Hold on!'"
                                         Rudyard Kipling, IF




The markets have not reacted well to China's recent tumbles. So far, for eight consecutive days, the UK stock market has fallen.

According to Hargreaves Lansdown, the FTSE All share has fallen by 7 per cent since last Monday (10th August), which equates to around £160bn wiped off the value of UK-listed companies.

Alastair McCaig, Market Analyst at online trader IG, has called it a blood bath. He said: "The collapse in Asian markets has triggered a sea of red on European equity markets as bears dominate the day’s trading.

"Shanghai wipes out 2015 gains; Asian panic scares off the bulls; and traders’ screens are drenched in a sea of red."

FTSE 100 as at 24 August. Source: Interactive Data/Hargreaves Lansdown

Brokers and traders may well be worried. I am not. True, my Isa is down £199. My largest holding - a global, dividend-paying portfolio, has been a disappointment after a year of fairly good returns. Obviously my Gold fund has gone down (I never expected it to provide a return - it is my 'insurance' mechanism). Also sadly my investment in an investment trust that had outperformed for 25 years has had a dismal 18 months.

These three things have really taken a battering from the #GreatFallofChina over the past few weeks. Consequently, this is the first time since I set up my S&S Isa two years ago that it dipped into negative territory.

The only stunners are Woodford's investment trust, Saga shares, my US investment index tracker and the Alliance Trust Sustainable Future Global Growth fund, an ethical fund which has not had a single bad week since I bought it over a year ago. 

Interestingly Saga had such a bad year I almost ditched it, but I held my nerve. Pension Freedoms are here, I thought. Saga will benefit from these. Well that was my perception. It proved wisdom.

I was also laughed at by some colleagues for considering investing in TSB before it listed. 'My broker says the shares will be no good', one said. But I perceived a market of investors keen on a new entrant into the banking market. So I bought them and made double my money on them when I sold them a few months after the launch. He wasn't laughing then. In fact, my tiny Isa has outperformed his at every level - and yet people trust men's financial opinions more than they trust mermaids. Odd, that. 

Two years ago I sold out of a China investment trust simply because I read that the country's growth estimates had fallen from 10 per cent to 7.5 per cent and then to 7 per cent. There was so much positive noise from the market about China despite this that I got worried. You don't see downward GDP revisions without some knock-on effects down the line. So I ignored the hype and I bought into the US market because it was a) depressed and everyone was saying it was not the place to be and b) as far as I am concerned, it is the most mature economy with some solid, cash-rich companies. I also understand the US stock market more than I understand how the Chinese stock market works.

My investing decisions are as scientific as that. I read everything I can, everything that comes my way, I think around it and I act. So far, this has proved to be a wise move. So I am not worried by this latest hiccup. I am disappointed but not scared. 

Here's why the latest tumble is keeping this mermaid pretty sanguine:

1) I am young (ish). My Isa was only designed to provide a bit extra in the event of having surprise quadruplets; failing that, I'm saving it as a bulwark for my pension. I am not set to retire for 30 years and a lot can happen in that time. I am not going to buy and sell on the turn of a market. I will sell when I need the money, and when I'm in the black, not the red. I also have to be in the black enough to cover the trading costs and make money. So why would I sell now? 

2) Things always go in cycles. I've seen two cycles in China in my working life. Now it looks like Brazil is the next BRIC to go down. So I avoid fads - these wheels turn more quickly than slow grinders like the UK or the US. I like my big slow old American industrial-sized wheels. 

3) Use Gold wisely. I don't keep it to make money. I keep it as an insurance against the direction of the US dollar/US stock market. So why would I sell it at a loss when I am using it as a hedge? 

4) Ethical funds. Nobody likes them. Everybody mocks them. So I bought one to see if it would indeed perform differently to the rest of the market. It did. I suspect I am a little contrarian around the edges. 

That said, my stocks and shares Isa is very small. It is not my main source of income, it's not something I would dip into for a rainy day. I have a very long-term plan for a long-term goal and I am not about to have my future finances shaped by short-term decisions and knee-jerk reactions. Markets cannot spook me. Of course, having surprise quadruplets would shake me immensely. But I think that's a story for another day.


Monday, August 17, 2015

Students - are you financially ready?

Many of my friends' children and the young people in my youth group have received their A-level results this summer.

They have all gotten into the Uni or College of their choice - congratulations guys! 

However although they are relishing the prospect of no longer having a bed time or having to eat their greens, little do they know that with adulthood comes responsibility - for their money, their belongings and their financial wellbeing.

Oh yes, lads and laddesses. Your bank account is now your domain, and yours alone. So consider your savings, and protecting your lovely, shiny new belongings. 

A study from Sainsbury's Bank has revealed that students own approximately £3000 worth of possessions in their university accommodation. This makes you a prime target for thieves in some areas, or a disaster waiting to happen.

To wit: in 1995, we watched from an open window in a mate's house, as my mate was on the phone to an ambivalent police force, some students moving into a house just up the road. There was a red van parked around the corner, and as soon as the students were moving in with their enormous boxy TVs and laptops the size of a small car, thieves were running in behind them through the open front door, and taking their belongings into the red van.

Also in 1995, Andre the French Dude's room was turned completely upside-down, and all his belongings were covered in papier mache. I may or may not have had a hand in this. These were the heady days of Tetley Hall in Headingley. Ah.... memories. Anyway the redecoration also included his massive Enigma-style computer, which never completely recovered, nor could the disk drive forgive and forget.

Stolen from Bryony's webpage, her room (note the bottles... ahem)
For a view of one of the rooms, my friend the Rev Bryony Taylor took this pic (left) of her room at Tetley Hall back in the 1990s. Yes, it was before digital cameras were invented, yes I'm old. Get over it ... 

Nowadays there are a lot more electrical items sitting in student accommodation, and a whopping third of students say their possessions aren’t covered by home insurance.

According to Sainsbury's Home Insurance, only 10% of students living away from home have cover on their parents’ home insurance policy.

With 92% of students owning laptops and smartphones, this could be a costly item to replace if there is no appropriate cover. Furthermore, the vast majority (85% of students) say they have a physical collection of books; and the typical value of a student’s bookshelf is now £181.

SO, students - before I write a post about great ways to save for a fun three-four years at uni, please please make sure your parents have checked their home insurance policy to see if Uni accommodation and halls of residence are covered.

If not, conveniently, many providers, including Sainsbury’s Bank, offer protection for student home contents as part of its regular home insurance cover.

ItemPercentage of students who own thisAverage value
Laptop
92%
£578
Smartphone
92%
£304
Books
85%
£181
Jewellery
59%
£355
Stereo/music system & speakers / headphones
59%
£112
TV
48%
£254
iPad or other tablet
44%
£299
Cameras
44%
£286
iPod or similar
42%
£124
Sports equipment
37%
£251
Games console
36%
£263
Electronic items - other
29%
£210
Musical instrument e.g guitar
23%
£634
Mobile phone (other)
18%
£159
Desktop PC
17%
£923
E-reader
16%
£89
Source: Sainsbury's Bank


Protect Baby Boomers

Baby boomers have it all, don't they? Gold-plated DB pensions, no mortgages, second properties even in some cases. They have cash in the bank and nice things at home. Or so you would think. But in fact, financial crime has been rising among this Boom set - in the form of stealing from their own parents and elderly relatives.

Shocking, no? But research from accountancy KPMG has found that crown court cases relating to fraud against family members rose to £2.1m in the first half of this year, up from £400,000 the previous June.

A massive 80 percent of this was against the over 65s, with the majority of this being carried out against the very elderly by their own baby-boomer children and relatives.

In one case, a woman approaching her 60s stole her own father's care home fees after being granted power of attorney. Another man stole his frail mother's £600,000 savings because he was not going to be the main recipient in her will.

True the credit crunch has affected a lot of people. Baby boomers are having to support children and in some cases, grandchildren because of school and university fees, redundancies and an ever-rising deposit needed to get onto the housing ladder.

But this is no excuse for theft, theft from the very people who went without themselves in order that their children, born at the tail end of WW2, might have a better chance in life. Such shameful behaviour must be brought to light and more support must be given to people in their later years, to protect them and their finances from predators.

Friday, July 24, 2015

STOP belittling the 'SAHM'


Get the tea ready Mabel, the guests are here. Pic Credit: SimoneySunday
I do not have children (yet) but I already feel the strain of working full time, five days a week (and freelancing Saturdays), as well as various activities and voluntary work throughout the week. This makes it difficult to cook, clean and launder and make sure that something, somewhere in the home is not falling down or getting smothered in dust.

Although I cook every night, I do not always load the dishwasher or wash up afterwards. I might not clean my windows for months. Ironing is a pile I like to play Jenga with. If I struggle with just a husband and a cat, how much more must home-makers struggle to juggle child-raising, cleaning, tidying, budgeting and part-time or home working?

While I have heard comments from (non-married people, generally), saying 'they have it easy' and 'I'd like to lounge around all day watching Jeremy Kyle' in relation to SAHMs and SAHDs, I disagree. I think they do an amazing job.

They deserve a medal! Or actually £19,000 at the minimum - according to Liverpool Victoria (LV= as it is now known).

The life and pension provider recently carried out a survey which found that homemakers work an average of 56 hours a week, not including childcare duties.

Although one in three breadwinners feel stay-at-home role is ‘easy’ (HA! I wonder how many of my SAHM friends would think it's 'easy'??!), the average British household would have to find £364 a week (£19,000 a year, based on the minimum wage) to pay for extra help if the homemaker became ill or injured.

In fact, LV= discovered that the average housewife or househusband has a working week that is 17 hours longer than their at-work partner, if we exclude travel time.

According to the Office for National Statistics, the average number of hours worked by full-time employees a week was 39.2 in 2014 (Annual Survey of Hours and Earnings, ONS, 2014). This is 16.8 hours a week less than LV's research, which was carried out by pollsters Opinium.

LV= found that full time homemakers spend an average of 56 hours a week covering essential household duties such as cooking and laundry.

What’s more, on average homemakers with children face an additional six hours a day providing childcare.

While cooking (1h 47m), cleaning (1h 45m) and laundry (1h 30m) are the most time-consuming chores, ‘keeping house’ also includes wider tasks such as shopping for essentials (1h 23m), mentoring children with homework (1h 8m), gardening (1h 4m), transporting family members (56m) and other tasks including house admin, including paying bills, managing finances and home improvements (1h 41m).

I'm quite dizzy just thinking about it. But LV= is not just highlighting the importance of SAHMs or SAHD to the overall working of the household.

It is highlighting the fact that most people do not have even £19,000 savings set aside in case of a financial emergency.

People do not even have proper life cover. Yes most people who work for a large or medium sized employer will have some form of life assurance - 3x or 4x salary is a general rule (don't tell the Merman) - but this is only in the event of death. What about unemployment or illness? The State will not support people any longer.

Therefore, it is worth checking out what else your employer offers. It may be that you can have an additional income or critical illness policy through the workplace, though this would be a benefit in kind. Some policies can allow the working partner to take out additional cover for their SAHM or SAHD.

Other life and protection providers could cover individuals against critical illness, injury and inability to work for just £10 a month.

The Seven Families Campaign has been drawing attention to the difference that it can make to everyday people to have proper life cover and critical illness and income protection in place, whether it is because the working partner gets made redundant, or the SAHP (Stay at home Parent) has become too ill to continue making the household function.

It is never too late to start thinking about getting a form of income protection or critical illness cover. Most advisers will be able to direct people in the right direction; at the very least, there are plenty of information sites available online, such as the Citizens Advice Bureau, the Money Advice Service and Seven Families that can help you work out your protection needs.



Wednesday, July 15, 2015

We're all going on a ... lunchbreak holiday

Today was a little different for the small-yet-perfectly-formed @FANewsdesk team.

We news reporters, we few, we happy few, descended on our local council estate to sit under a cat-infested tree.

It wasn't sunny. It wasn't hot. It wasn't Costa del Sol.

But it was Southwark, it was outside, it was lunchtime and there were cats.

Thus began our very own #LunchBreakHoliday, courtesy of the lovely folk at TravelSupermarket. To see the campaign itself, click here.

Actually the story began a few weeks before, when I was asked if we could participate in a competition to hold a special picnic lunch with our team, send in our photos and a blog and see if we could win anything.

With our employer being strict about us not receiving incentives, we were able to participate, but would not have been able to accept a prize. That fact did not stop us from trying. After all, how often does one get to have a picnic in their lunchbreak, in the middle of the City of London, surrounded by high-rise buildings?

TravelSupermarket sent us a goody box with cute metal lunchboxes, a picnic blanket, a frisbee and some inflatable beach balls. Secreted within the little tins were two £5 cards for Pret a Manger. Fabulous!

The plans were laid and the sandwiches were made (or visa versa). The previous evening, I decided to go all Martha Stewart and I made peanut butter cookies. Thirty of them. Thirty between four people, three of whom, including myself, were supposed to be on a diet.

And here they are:

UtterPeanutNutterCookies. Pic: Simoney Sunday
For the recipe, head over to my other budget food blog - TheCrunchMunch.

I packed a large beach bag with yellow napkins, cut sandwiches, cans of cola, paper plates and plastic champagne glasses (because that's how we roll), and off we went up the road.

The local estate is known as 'The Cat Place' because of the many varieties of semi-domestic cat it boasts.

Here are some of the feature creatures you can see in this picnic palace, which is actually quite pleasant, with its benches and statues and little gardens all awash with coloured geraniums and begonias.

We call this one 'Sad Kitty' because he refuses our love and our tuna sandwiches

And these three cuddle-craving critters:
LtoR: Simba, Garfie and (foreground) Muffin
Yep it's a veritable safari down in Southwark.

Mmmm cookies. I mean Salad.
Although the sun was not shining, and it threatened rain, we still managed to brighten up our day with some delectable salads from Pret a Manger - including a fruit salad - and some merry japes. There may have also been some crisps - well that's a form of potato salad, I guess. Don't judge us.

MMMMMM crisps. I mean, salad. Er...
Here's the team deliberately not posing in any way, shape or form:

Don't mind if I do!
Well, we may not have been eligible for a prize, and we may not have had the most luxurious of surroundings, but for a tiny team to all be able to get out of the office for an hour, have some fun and games and relax a bit, I think we had a good time.

At the very least, we fulfilled the criteria: a picnic during a working day. It certainly beats our usual stick-to-a-rota-and-don't-take-too-long panic in the newsroom kind of a lunch.

Thanks, TravelSupermarket! 

Monday, July 13, 2015

Banishing the dietary blues

Tim Horton's delicious Oreo donut... mmm
All week I have endeavoured to keep my calorie content under 1000 while still having treats and varying my diet. I have also been getting off one stop early and walking home, as well as endeavouring to go for a little 10-15m walk at lunchtime. Largely, this has been a success.

There have been aberrations from this path of comestible austerity. I had a long weekend of feasting as a result of a birthday; albeit I did keep portions small and tried not to snack. Snacking is a problem. I have snacked in the evenings post-dinner, not much, but it has happened. Biscuits usually. Digestives. It is hard for me to turn down a few with a cup of tea. So I have hidden them in a cupboard.

One day, the train I needed was cancelled so I did the household shopping instead, resulting in me not getting off a stop earlier. That day I also felt weak and starved, so I had a piece of pie, mash AND bread and butter pudding for dinner. While everything was home-made, including the bread, this was still a carb and fat overload at 8pm - not good for weight loss.

Despite this one-week crash diet and more activity I do not feel I have lost anything. I still feel bloated and unfit. I hope that by giving up crisps and cake and cutting down on caffeine, portion sizes and bread that I will have lost some pounds this week. But I have not checked out the scales. I do not think weighing one's self daily is mentally or emotionally healthy, despite the temptation to do so. However I have in my mind a target.

I AM targeting an overall one-month weight loss of 20 pounds - roughly five pounds a week. This would get me back to the weight I was before I got engaged (and started embarking on eating out more). I even had to have two people squeeze my stomach and boobs into my wedding dress as I had not lost the additional pounds before the wedding. Well, the night before I did have a pizza ....

There are so many 'diet and exercise' books out there, website, adverts, etcetera. But
I do not see the point of these. This is a billion, no trillion-dollar industry and the only pounds I would shift would be from my bank account. Want to lose weight? Just use up more calories than you eat. Swim a couple of times a week (booked in my diary me going swimming before work twice next week). Eat fewer heavy, processed carbs. Lay off the bread and cheese. Walk a little more. Get up from the desk and move around at lunchtime if you can. Legally, you can. Walk up 100 stairs a day to the fifth floor instead of taking the lift. In any event, walk down the stairs. No crisps. No pancakes. No cheese. Or digestives. Seriously, how good is mature, creamy cheddar on a digestive? I absolutely love that combo. Mmmmm .... No! Stop it. No cheese or digestives.

Do I feel positive? Yes I do. I believe I can achieve my goal. I am working towards a healthier, less bloated, more-of-my-nice-clothes-fit-me-again me. Am I going to need help? Well yea.... I am. None of these scary diet pills or threatening personal trainer or bashing my body into submission. My body is a temple and food offerings are required (not Digestives). That said I am going to indulge in some spa therapies such as wraps and heat treatments on my saddle bags before my holiday. I managed to get a great 75% off deal on a course of six, which should help my side-buns get me back into my holiday clothes.

This is not all vanity, although I will grant that 80% of my need to slim down is vanity. Another 10% is fear... Fear of being a middle-aged woman in the workplace not being able to cut it with the young ones.

But 10% is medical. At my age, it is twice as hard to shift the jelly rolls and I have been told by my gynaecologist that based on my GP history, I am at the biggest BMI I have been since my GP records began (not too surprising given my records began when I was 12). She did suggest that if my body was struggling to cope with the extra weight on my small frame, this could be a factor in our so far unsuccessful attempts at becoming natural parents. So anything that can help - exercise, treatments, dieting, hiding the digestives - well this is all to the good and I will jump at the chance to get back into that little Figure-hugging Karen Millen dress for our 2nd wedding anniversary celebration.

Onwards and upwards? Well, not upwards, the weight needs to go down not up. Onwards and downwards, then, and let the good times no longer roll around over the tops of my barely buttoned-up jeans.*

*Until I get to Canada and eat lobster thermidor and Dairy Queen and Tim Horton's timbit donuts and my friend Helen's amazing salsa dip and her raisin bread...

.....



Sent from my iPad

Tuesday, July 07, 2015

Why I would buy a 2018 Greek Bond




The thing about financial journalists is that we've always been here before. No matter what it is, how mad it is or how bad it is, we've got an analogous situation secreted somewhere in our memory that presents itself just at the time the world seems to be going to pot.

This has been the predominant thought in my mind, like a tiny migraine fairy kicking my frontal lobe, every time I read about Greece.

We have been here before. We had the Russian default and the collapse of the Asian Tigers in the 1990s. We had the Latin American crisis. We have had a generation of Japanese children born without knowing what a rate rise is. We had the dot-com crash and the 'Sick Man of Europe' to contend with in the Noughties (that was Germany, by the way). Further back we had Black Monday in the 80s, and the India crisis in the 1970s. Throughout the decades and centuries, we have had Germany, Argentina, France, Russia, the former Yugoslavia, Cyprus and a host of others defaulting on debt repayments and/or in a sovereign default situation.

Today the yield on a two-year Greek government bond rose to more than 50 per cent, up from 10 per cent in January. Back then, the world was trying to digest the news that Greece was en-route to achieving a primary budget surplus - excluding debt repayments - of €3.3bn. This was roughly equal to 3 per cent of GDP, with a minor budget deficit of €338m; equating to 0.2 per cent of GDP.

However the failure to repay the first installment of the IMF's loan - which demanded 1.6bn Euros, then its people issuing a resolute NO to the tough measures imposed by other creditors - of whom Germany is the largest - has resulted in another 'crisis' situation.

Will there be a Grexit? What will happen if Greece goes back to the Drachma? I cannot get a consensus from any expert. It will be the first time any country has left the Euro, so nobody really knows what will happen. I've seen release after release from every sort of company from foreign exchange to travel insurance to investment companies. None of them seem to know what effect this will have, but all speak of immediate woes - caps on bank withdrawals, haircuts on pensions, further pin-pricks in the proverbial bond bubble, investors possibly ditching Greece for Japan (yes, James Mackintosh highlighted in the FT on 30th July that this could be a consideration. Curious, non?).

According to Bloomberg, although the ECB has raised the pressure on Greek banks to tighten access to emergency credit - in other words, preventing the Greeks from getting their money out before the government imposes blanket and deep haircuts to individual accounts - there has already been an injection of £69bn into the economy over the recent months.

The only way that the banks in Greece can tap into this emergency aid is through collateral - such as government bonds - but while one jokes about the "free money" on a 50%-plus government bond, there is far too little cushion to protect investors. The return, they believe, is not worth the risk. And 2017 is an awfully long way away.

Two years in fact.

Two years.

A lot can happen in that time. Two years ago today, I was single, swimming around the internet to my heart's content, wagging my own tail where I wanted. Today I am a respectable mermaid.

Two years ago, we were in a similar crisis situation. Cyprus had to be bailed out. Cyprus was on the brink of collapse. Pensioners could not get their money out. Cypriots faced haircuts on their bank accounts. It had to appeal to the ESM for funding, as well as the IMF, which has so far disbursed about €742.4m to shore up Cyprus.

The fear then was that this tiny nation might cause a ripple effect among Eurozone nations who were just about recovering. The UK prime minister made several strident comments about bailouts, and called on Europe to protect the several hundred British pensioners who bought a home in the sun.

According to Bloomberg, Cyprus just about dodged the bullet of a "disorderly sovereign default and unprecedented exit from the euro" by agreeing to shrink its banking system in exchange for €10bn of aid. The Cyprus Popular Bank, 84 per cent owned by the government, was forced to shut down. Elderly Cypriots told of poverty as their pensions were cut. Food flew off the shelves on the island. Young people told of rising unemployment.

Cyprus Popular Bank. Image: Simon Dawson/Bloomberg
Then in June 2013, Cyprus's debt ratings were downgraded to "default" after it announced it would delay paying back E1bn ($1.3bn; £860m) of bonds. There were serious worries going into the summer about whether it could pay.

Two years later, I am sitting here reading a report from the IMF about the organised repayment structure of Cyprus.

The acting chairman of the IMF, David Lipton, has this to say: "Cyprus's Fund-supported reform programme continues to produce positive results. Economic and fiscal outcomes have been better than expected, with growth turning positive in the first quarter of 2015 and public finances exceeding targets.

"Liquidity and solvency in the banking system have improved, allowing the elimination of external payment restrictions."

While there is still low employment and the need to ensure ongoing financial stability, two years have proved well for Cyprus. Yes, Cyprus still has problems, Yes it is far smaller than Greece, its bailout fund was far smaller and yes it still needs work on effecting its economic recovery.

Of course, the parallels with Greece do not extend to the depth of the distress in Greece, the protracted poverty of its citizens and its bizzare tax system that has allowed the wealthiest to shelter their tax dues, while the modest earners have been wound up in so much red tape they are scarred for life.

Greece has a stridently socialist government; Cyprus was more moderate. Greece has a history of independence; Cyprus has been a little bit of a geographical whore, welcoming anyone from Crusaders to the Turks to the Brits. Greece has never given us 10 points in Eurovision; Cyprus always gives us 10 points.

Ok that last bit doesn't bear any relation to economic stability.

But in the grand scheme of things, although the world has a great love for the Hellenic Republic, its people, its culture and its history - heck I even married one - the effect of a Greek departure will, like Cyprus, be no more than a short-term shock.

According to Bank of America/ML research, the entire MSCI market cap weighting of Greece in the global index is lower than that of one company - the US furniture store Bed, Bath and Beyond.

Greece does not export cars, petroleum, gold or financial services. It exports ideas, intelligence, talent - sadly so for Greece and wonderfully so for the rest of us - and many parts thrive mostly on tourism.

OPEC will not have to hike oil prices if Greece leaves the Eurozone. The oil we get from the Hellenic Republic cannot go in our cars. Well, it should not go in our cars. I've never tried to be honest. Perhaps it does work.

Markets will get all nervous in July and then, like they always do in August, settle down into a mumbling state while bankers, their wives and their mistresses jet off to some foreign clime, while the rest of us mug it down here with gelato and baring our pasty white feet in the park. In public.

By the time September comes around the fear that the markets had already anticipated will have become a reality. This is good news. Why? Because fear is unknown. Markets do not like the unknown. At least when you know something you can price it in properly. So by then any effect of another, restructured, more fairly implemented debt package for a Eurozone Greece, or a loan restructuring plan underpinned by the EEF for a Euro-free Greece, will have already been priced in. Greece, says Morningstar, is a Black Sheep, not a Black Swan. It will not cause contagion.

Economists will be on a clearer footing to make even more wild predictions or sage warnings. Analysts will be able to see the wood for the terrible puns on 'Drama/Drachma' and start looking at the longer-term. Fund managers will pick through the debris to find the golden nugget companies that are going to be long-term winners. Investor sentiment will improve. Politicians will stop calling each other terrorists. The Germans will shut up (well maybe that won't happen) and perhaps stop being Europe's Money Police.

In two years' time, the current speculation and hyperbole over Greece will have diminished into 'how we are dealing with this situation'. Pensioners will get their money. People will start seeing more investment into improving the business workforce and reduce unemployment. There will be more food on people's plates.

It will be a long while off before Greece and her wonderful people recover from this traumatic time. I think it will take longer than two years before the IMF produces a paper such as the one it has written on Cyprus. In my estimation we can expect to see this sort of positive structural and financial reforms by the end of 2018.

Do not underestimate the emotional and physical effect this large-scale Monopoly played by Germany and its Eurozone allies have had on Greece. Old people have been pushed to suicide, families left wrenched apart by stress. Young graduates cannot afford to eat every day. Parents go to the food bank to feed their children. Little businesses have closed; shops have shut their doors for the last time. The elderly are left sitting, waiting for a pitiful amount of money to see them through the month. The hopes of Generation Y have been burned at the stake of Eurozone aggression.

This Instagram picture sums it all up, taken by someone in a bank in Athens over the past week.

But from the embers of this turbulence, a new order will rise. Greece has been here before. It will survive. Europe has been here before. It will be restored. The world has been here before. And each time it comes back a little wiser, a little stronger.

Will I buy a 2017 Greek bond? No. I couldn't anyway - I'm not an institution with the wealth needed to pick up some sovereign debt. But I would buy a 2018 Greek Bond. If my NS&I comes in next month, that is exactly what I will do. Because I will be turning to everyone and saying 'I told you so'.







Thursday, July 02, 2015

There's no place like gnome

Hey, how YOU doin?
We journalists get a lot of strange press releases. Mostly they are only odd because they have nothing to do with our line of work.

For example, for three years in a row, the DeutschePost service used to send me emails, in German, outlining new franking machines and ways to mark up commercial post cost-effectively. As interesting as this was, and helpful in expanding my knowledge of German with phrases and vocabulary that nobody, anywhere, outside of the postal service would ever use, it was quite annoying to get ambushed at 9am on a Monday morning by unsolicited and useless information.

But every now and then we get little gems that do have some relevance to our industry, but which seem to have been the brainchild of a slightly twisted genius PR, who is doing a sterling job in trying to make cynical journalists read their company news.

And this one certainly caught my eye. It was about protection. We cover protection. So I was already interested. I saw it was about home insurance - well, I thought, we don't cover home insurance but it is important to read around the subject matter, as it could have an angle for us.

So I opened it, to receive the warning:

"THIS SUMMER, DON’T LEAVE YOUR GNOME UNPROTECTED"

I read it again. I was sure it had said 'home'.

But no. It definitely said 'gnome'. Now I don't know about you but my preference when it comes to garden gnomes is to take a heavy object - a baseball bat, say, or next-doors very ugly dog - and smash these ornaments out of existence. I just don't see the attraction. Garden ornaments such as slender metal herons poised by a pond, or a nice stone sundial, that I can cope with. A gnome, no. They're basically weird, staring albino smurfs that look, from several angles, like ceramic sexual predators. There's no place for a gnome in my home.

And yet here it was in black and white. People are stealing garden gnomes from houses (probably these folk should be thanked and given a mention in the New Year's Honours List) and leaving the gnome-owner out of pocket.

Apparently, in 2014, there were 11,000 incidents of loss or damage to UK gardens, and people were vastly under-insured.

Of this, 5,400 were burglaries. Now why anyone would want to steal this sort of thing is beyond my ken, but they do, and for some reason, people are upset.

Basically, this is how I see all gnomes. 

Some 10 per cent of all home insurance products do not cover your garden, so if someone steals your pot or pots (as appropriate), or pushes Matthew Henderson into the Easton's fish pond, ruining his trainers, their pond and killing all the fish, this is not covered on the home insurance policy. Of course, this is purely hypothetical and bears absolutely no resemblance to any real person or event.*

According to data from John Lewis Home Insurance, people will have to cough up, on average, £1,169 to fix the damage to property and possessions in the garden. For those who put a lot of time and effort into making their outside space pretty, that is a hefty sum to pay.

I do feel sorry for people who have invested time and energy and money into making themselves a beautiful green space, only to see things 'disappear'.

My friend's mother had a little stone Westie stolen from her lawn - a memorial of her little dog - and it was rumoured to have reappeared half a mile down the road in the 'garden' of a traveller camp. Luckily her son is also a police officer and word got out that it was his mother's stone dog that had gone missing. The dog was returned one night, none the worse for its experience.

Another friend had just bought £20,000 worth of beautiful bushes (they cost a lot to grow and maintain to a certain level before purchase), and several of these went missing before he had a chance to install them. I never asked whether his insurance covered the theft, but as he's about as financially literate as a mountain goat, I doubt it.

So what can you do to protect yourself? Well of course you can make sure that your insurance does cover such scurrilous lawn raids.

However, John Brady, head of insurance at John Lewis Home Insurance, also gives these top tips on keeping your garden secure this summer:

● Fix a good quality lock or padlock on the door of the shed, as well as any garden gates.
● Lock belongings in the shed overnight after use (barbecues, bicycles etc.), items left in the garden may not be covered for theft.
● Install automatic security lighting in the garden.
● A prickly hedge around the garden can help to deter intruders.

If all else fails, perhaps you should invest in a gnome. I've heard some of them can be pretty mean.


*This is exactly what happened and I am totally guilty.

Tuesday, June 09, 2015

The train, the lie and the 12-month gestation


Children, it is never right to lie. Even if you think you are being kind or diplomatic, do not lie. You should always find a third option that allows you to soften the blow while telling the truth.

For example:
'Does my bum look big in this?' There are three options from which to choose.

1) No, not at all (lie)
2) Your bum looks massive no matter what you wear. It's like the Pillsbury Dough Boy is wrestling with a hippo inside those jeans. (Truth)
3) Sweetie I was so busy looking at how your eyes sparkle and that colour makes your skin glow to even notice your lovely bum. (Third way).

And again: 'Meet my new baby!'

1) Oh what a beautiful baby! (Lie)
2) Ye gods what is that wretched thing? Why have you replaced your baby with a sack of red onions? No, really, where are you hiding him? What a prankster! (Truth)
3) Oh look at those little feet! And such little hands! (Third way)

Some mother will see this photo and realise her friends put it on the 'Ugly Babies' section of Buzzfeed

Nota Bene: when opting for the third way, avoid all pronouns. Parents tend to be offended if you think their girl is a boy and vice-versa, while 'it' just means 'I have no idea what gender your ugly little sprog is'.

These third way options are always there, but it is not always easy to think off the top of your head. I suggest keeping a few memorised in the event that you will need a third-way comment, so you can be ready when next presented with Sloth Junior.

All this is preface to a situation in which I once found myself, which led to a series of ever-increasingly uncomfortable lies. Actually, there were two such situations, and both were caused by my tendency to bloat drastically when 'sitting upon the household gods'.
Yesss... yesss....love it. Look at it. LOOK AT IT.

The first situation was when I was feeling painfully bloated at an investment dinner I had to attend. I was kitted out in a (thankfully) flowy dress that hid my stomach (mostly) but boy did I need to unleash the Mistral of Doom. While contemplating my route to the bathroom, an old acquaintance came bounding up to me like a joyous puppy in a park.

He was so chuffed to meet a friendly face that we ended up talking for a while. I had just gotten engaged, and my friend was super-happy at the news, so wanted details. All the while, my stomach pain was increasing.

A waiter came up to offer champagne and I refused, as I do not drink at any work functions. At the same time, my friend said 'are you not drinking?' I put my hand on my distended belly, opened my mouth to say 'well actually I am feeling so bloated', but I could only manage 'well actually'. He saw my hand, my belly and, joining the dots with my refusal of alcohol, immediately gave me a massive hug.

'Congratulations! You're not telling people yet, are you? Do not worry, I won't tell anyone. I am so happy for you!'

I was dumbstruck. All I could muster was 'please don't tell anyone' as I watched him beam an enormous smile at me. Even if I could have disenchanted this happy wretch, I had no time to do so, for another acquaintance bowled up and started a conversation.

To this day, I have not seen him or been in contact with him to tell him the truth. Hopefully he reads my blog.

You would have thought then, that once bitten by a fake pregnancy lie, the Mermaid would be twice as cautious not to let this get out of hand again.

That would have been the sensible thing to do.

But no. A year after marriage, I had put on a couple of stone, which made occasional bloating a more serious embarrassment. On three occasions in one week, people stood up for me on the train. On the third occasion, I even shoved my belly into someone’s face to make him stand up. Yes I did that. I am not proud of that. It was crowded!

OK, OK, it was not THAT crowded. But still...
Perhaps that is why the fourth occasion that week proved to be a salutary lesson in honesty.

It transpired thus.

I was on a crowded train, I was bloating badly and had terrible cramps. The bulge, and my obvious discomfort spoke for me, and a young woman stood up for me. Not wishing to embarrass her or me by saying 'it's okay, I'm just TOMming', not to mention that one does not declare these things on a train, I thanked her and sat down.

A few stops later, a very pregnant woman got on and, as I was sitting nearest to her, I offered her my seat. The young woman who had given her seat up for me shot me a glance, so I thought I would be diplomatic.

In other words, I lied. 'You need it more than I do', I said to the preggo, and smiled. Unfortunately for me, another young woman seated next to preggo heard and she stood up for me. Why did I tell a half truth? A half truth is still a whole lie... I had no choice but to smile and sit down next to preggo.

And Ms Preggo was a talker. She wanted to know everything about my 'early stage' pregnancy. She threw me a bunch of acronyms such as DPO and WPC; thankfully I subscribe to MumsNet for work purposes and knew what these meant. She asked me about symptoms. I had to blag. By which, I mean lie. A small lie turned into a series of bigger and bigger ones. “Large fleas have small fleas upon their backs to bite them. And small fleas have smaller yet, and so ad infinitum”. And that’s what was biting me, except the smallest lie had bigger ones ad infinitum trying to take a chunk out of my soul.

It was awkward as, and I reverted to pounding her with questions about her DB and DD. All went well until just before we pulled into my station. In the slowness and quiet fullness of the commuting carriage, she asked me 'so, when is your due date?'

I had not expected this. It was December so I said August. Which would have been fine if I had only just conceived that very morning, and a cytoblast or plastoblast or photonblaster or whatever it is called, was zigging its zygotey way across my fallopes and burrowing into my uterus.

Except I had already 'said' I was pregnant, which would mean I was at least a month, maybe two months, gone. So the due date would have been June. Add to this the swollen bloat of my belly which suggested at least three months, and well, we were looking at a total gestation period of maybe 12 months.

My mind was trying to extricate me from the situation more quickly than my mouth could work, and I managed to fumble my way around a conversation, hoping that lovely Ms Preggo had what my mummy friends call ‘pregnancy brain’ and I would not see her on the train again.

I haven't, but I still get nervous when I see similar-looking women on the train. If I should see her, the truth must be told, but while a man might think this was hilarious, I have learned that the MumsNet Brigade is not so forgiving. Mothers do not forgive so easily some woman scamming a seat pretending to be pregnant.

Since then I have lost a little weight and thankfully nobody stands up for me even when the household gods are beneath me. But one day when I am sporting a 'Baby on Board' badge and need to cadge a seat, be sure my sins will catch up with me.


Children, do not lie.

Monday, June 01, 2015

The cost of children... before you have children


Some random child found on the internet. It is legal. Apparently. Ask Google Images if you have a problem.
Disclaimer: This is not a discourse on the fecundity or infecundity (if there is such a word) of the Old Mermedonian household. Any questions to that effect will be ignored, as will the person asking.

It has become clear from a raft of press releases and conversations with mothers and expectant friends that the cost of children begins long before the patter of tiny feet is heard.

Suppose a couple is starting to try for the first time. There is a host of expenses to pay long before there is any positive news to tell the family. This includes:

  1. Folic acid (the government insists that all women trying to conceive should take this supplement daily)
  2. Ovulation sticks (to check which days of the month are prime baby-making time) - these can cost £30 for the digital ones and even Boots' own (by which many women swear) cost £18
  3. Male and Female dietary supplements 
  4. Pregnancy test kits - some of these are more than £20
  5. Books on ‘how to’ (if you want to avoid those ghastly internet forums, which either ratchet up your hopes so tremendously you think every tiny muscle twinge is a batch of triplets, or which spin such tales of doom and disaster you are sure you will never have a child).
  6. Different foodstuff if your diet had not been healthy or enriched enough.
  7. Alcohol to get your significant other in the mood. Not too much, because that becomes illegal pretty quickly. I know, it is a difficult line to tread.

Then supposing a couple is not successful and, after myriad tests, they are within the 30% ‘unexplained infertility’ group in the UK, then IVF is usually the next step on the road to parenthood.

I was talking with a mother yesterday whose first child was conceived through IVF. While most people will be able to get one round of IVF on the NHS, it does cost £5,000 a pop (unfortunate phrase, sorry). This is accompanied often by prescription tablets (for which most people have to pay at least £8.50, the standard cost of prescriptions) and a spate of hospital visits and days off work.

However, if one round of IVF does not do it, the next round will cost a couple £5,000 out of their income/savings. A series of articles on IVF by The Telegraph and The Daily Mail last year told sad tales of many women paying £10,000, £17,000 or more because of repeat, unsuccessful IVF treatment. Many of these women got into serious debt because of this. It is heartbreaking.

If the IVF is successful, there are many other things to consider:

Home refurbishment – kitting out a nursery for the first time can cost £1050, a survey from online forum Made For Mums calculated last year. This includes decoration, furniture, light-blocking curtains and carpeting, as well as toys and storage.

Clothes for the baby (even assuming some hand-me-downs from friends or family) – an article from Investopedia, a great site for people wanting to learn about finance, claimed the average cost for baby clothes is about $60 (£32) a month for the first year.

Toiletries. Also according to Investopedia, the average child will use more than 2,700 nappies in the first year alone, which can add up to more than $550 (£230), not to mention baby wipes, baby oil, cotton wool, baby lotion, special shampoos, etc.

Thanks to legislation, the must-haves also now include baby seat and child seats for the car, in addition to prams, carriers and whatever those back-packy things are called into which dads stick babies so their arms and legs dangle out like a bug on a pin. The latter look really cool by the way, and whoever invented those was a genius.

Already the costs of simply preparing for a child have ballooned.

What happens when the child is born? I am assuming that most companies in the UK offer good maternity cover, but I know of so few that would allow the primary care giver (usually the mother but not necessarily so) to continue contributing to a pension. So there are several months – perhaps even up to a year – where one person is not contributing or receiving employer contributions into a pension. Any spare cash is going on food for the baby, clothes for the baby, nappies for the baby. How are parents expected to save for when their darling has flown the nest?

And when people do return to work – the Office for National Statistic’s 2011 census showed that more couples were both returning to work post-Crisis than before, simply to meet the costs of mortgage, travel, utility and food bills – the cost of childcare is becoming prohibitive.

One mother of two young girls told me her child care a month was £900, and that was not full-time child care, thanks to the help of parents. Another woman I spoke to pays more than £1000 a month full time for two children, and that’s not even in central London.

All this, of course, is before Nursery and School costs – trips, food, uniform, after-hours activities, etc etc. No wonder providers have been pushing child savings schemes such as the Junior Isa or children’s bonds to help parents meet the future cost of raising children.

With the Conservative government biting at people’s personal tax credits and benefits, it will not be long before more couples decide that having children is a financial decision they just cannot afford to make – a crying shame and an indictment on this so-called ‘family friendly’, ‘British Values’ government.

Even Tory-leaning think-tank the Institute for Economic Affairs has called the rising cost of childcare a disgrace.

Recently, Mark Littlewood, the director-general of the IEA, said: “Heavy-handed government regulation is making childcare more and more expensive in the UK.
“Politicians need to wake up to the root cause behind the high cost of childcare. Rather than channelling more money into the industry, the government should do-away with some existing regulations and stop trying to formalise all childcare.

“Onerous red tape in the form of qualifications and staff-to-children ratios, combined with an increasing emphasis on nursery becoming a form of pre-primary education have drastically pushed up the cost of caring for a child”.

As regular readers of this blog will know, I seldom agree with Mr Littlewood, but on this occasion I raise to him an invisible glass of invisible double scotch, and said ‘hear, hear’.

I admire the many families that manage to live within their means. Usually this is because the adults go without things they want or need in order to give the best start in life to their children. I also sympathise with those families who have gone into debt – whether to pay for IVF or healthcare for their small children. The lack of resources given by this government to the NHS is appalling. Parents and would-be parents do not have the readies to throw into what is, by now, a well-researched, well-practiced medicinal procedure. It should not cost £5,000 a pop for IVF. The NHS should not be forced by central government into making cost decisions based on a woman’s age or social circumstance. It is appalling.

So what is the answer? Apart from lobbying government and pushing to save and support the NHS more, individuals can start to save more, well in advance of any familial decision. It could be wise to set up small investments as soon as you get married or start to cohabit, in expectation of expecting.

Even a few hundred pounds in a low-returning, readily accessible Cash Isa could be a huge boon to families struggling to meet the costs of starting a family. After the birth, it could be best to ask family and friends to help you with a Junior Isa or contributions to an investment fund established to help meet the plethora of interim costs between 0 and 18, rather than buy another set of babygrows. All these could be some partial solutions to this problem.

On a lighter note, perhaps the following from Scottish Friendly could suggest a solution: some basic child labour? Apparently, there is a growth of entrepreneurial children in the UK, with one in four under-18s earning £38 a month on average by working for people outside their immediate family. It's not quite illegal, so it seems.

According to the provider, this equates to about £1.8bn a year, garnered from doing chores such as gardening, helping older people with their technology problems, participating in online surveys, helping to create apps (clever clogs), washing cars and pet-sitting. Of course, you can’t send them down the mines or up chimneys now, as I have discovered recently, such a thing is frowned upon these days. However, perhaps you could help your young ones to help you help them… Just a thought?

Otherwise, I suggest a lower-cost option:

He has his father's eyes. And fur.
QUESTION: What money-saving ideas have you used/recommended to couples starting out en route to parenthood? It would be great to hear your hints and tips - please do use the comment section below and I'll follow this post up with them later on in the year.


Tuesday, May 26, 2015

Things that I don’t understand #1


Something's not quite right.

The first installment in a slightly less bile-filled series of lists about things that confuse and perplex me. I suspect this might have something to do with my age.

1) Quilted toilet paper
A close-up of this strange phenomenon. Why would you pin-prick flowers onto your poop roll?




















I just don’t get quilted toilet paper (also known as QTP). It is evidently too thick to be of 100% efficacy for one’s nether regions, and it certainly looks anything but good taste. For me, quilted toilet paper is akin to those gold plastic boxes that people put tissues into to disguise the (far more aesthetically pleasing) cardboard box. Am I alone in thinking that QTP is not to be found in the finer establishments of this hallowed isle of Great Britain? I have visited Eltham Palace. It was not there. I have been to Claridges. It was not there. But I have found it in an old lady's bathroom (not my mother's, thankfully), along with a doll in a knitted dress coyly hiding another QTP roll under her voluminous pink skirts.


2) Tight jeans with saggy bottoms
I think I am going blind
First, there were straight-legged jeans. Then there were straight-legged jeans that hung down slightly at the waist, prison style. Now there are tight tight tight jeans with saggy bottoms. Apparently they are called Drop Crotch Skinnies. Ye gods and little fishes. I don’t understand these at all. Usually sported by skinny white men with bristling beards – the sort of wiry-looking men most prisoners would avoid near the shower rooms – these trousers seem to be spray-painted on until the thigh area, whereupon they just – sag. Is this because hipsters couldn’t manage to pull their tight pants down quickly enough to go to the toilet? Did North London experience an epidemic of poopy pants because nobody could peel the denim away from their hot sweaty thighs in time to squat? Is this a clever fashion device to allow hipsters freedom of botty movement? If so, then I completely get this trend. If not, then no, I don’t understand Drop Crotch Skinnies.

3) Smart Water
Have you seen this water? Call 0900-SuckerPunch now
Water is not smart. Water is water. It should have a neutral PH of approximately 7 – not too acidic, not too full of other base minerals, but it does not have a PHD. The only thing smart about Smart Water is the fact that someone realised that some people – usually those who wear tight denim with saggy bottoms – will be willing to pay £2.50 or more for a bottle of water. So while water has been around for millions of years, some suckers at the teat of posh water bottles really have just been born yesterday.

That is all. For now.