Aviva Share Discussion Threads

[marksp2011] 13/10/2022 13:43

The issue for me is that Govt Stats are so poor that we are seeing policy decisions being made on monthly data that could be very wrong

Anthony barber famously stimulated an economy that was in recession that when they had done the monthly revisions to the previous SEVEN years of data proved to be growing at 1.5%. End of that was a calamity and 20% inflation.


Changing rates gradually gets a measured response. Raising them by 0.75 or 1% a month brings the world to a dead stop as noone knows when it will end or what borrowing costs will be. I am seeing big projects slowing down until all this subsides and clients know where they are.

I think el-erian called it "hitting the windscreen"

[eurofox] 13/10/2022 13:39

... "depending upon Baileys next screw up" ... I'm relying on it

[muscletrade] 13/10/2022 13:17

Sterling and uk financials still in the blue after the hot Us inflation data while really they should have weakened as the fed are clearly going to have to stick to raising rates for the foreseeable leaving the the hapless BOE even more behind the curve in the fight against inflation. I expect even more stress over the next week depending upon Baileys next screw up and if the Gov sticks to the mini budget, as right now the market is suggesting that the Gov will back down,

[muscletrade] 13/10/2022 12:50

Meanwhile the Dow, S&P500 and Nasdaq fall heavily to new 2022 lows...talk about whipsawing!!!

[cjac39] 13/10/2022 12:49

at the margin whatsup. this business sits in with the retail platform etc and is a good business for aviva but overall not material and some pension accumulation is fixed by employers anyway I thought

[muscletrade] 13/10/2022 12:45

The spike in financials and sterling due to rumours that the gov will U turn on Mini budget. Just in time for the bad news at 1330hrs that inflation in US hotter than expected.

[whatsup32] 13/10/2022 12:35

Cjac.
Is it not true workers will make less contribution to their pension scheme( matched by companies) when their income is insufficient to meet their daily demands.
Will this not be negative for Av.if it's done large scale.

[bothdavis] 13/10/2022 12:30

Nikhil Rathi Chief Executive of the City regulator sais, ' the pension fund crisis could not have been forseen despite concerns about derivatives that schemes are exposed to. Turmoil in the bond market was 'beyond any historical precedent.''

[cjac39] 13/10/2022 12:15

just my opinion of course

[cjac39] 13/10/2022 12:15

gecko i do disagree but maybe nonsense was a bit strong.

sure overall leverage is higher in a traditional sense of general external borrowing vs GDP but in 08 it was the hidden leverage that destroyed the system. the off bs leverage, SPVs, SIVs, CDOs, monolines, mortgage vehicles and so on and so on. the hidden leverage in bank and other bs based on short term financing and ratings was much much higher than today.

it is this reason I contend more than some economic curiosity which has seen GDP growth flatline since then as all of that leverage came out of the system and the losses have been stagnating through the system ever since.

coming back to external leverage, it actually isn't that scary having US d/gdp of 120 or UK at 80/90 with their own currencies and limited foreign ccy liabilities. however the fiscal gap is a problem that needs controlling over the medium term I would agree and there is a limit to whats possible without closing this.

[eurofox] 13/10/2022 11:42

The spread on gilts is now enormous - difficult to buy!! They may have been holding some auction - returned to normal now

[mountpleasant] 13/10/2022 11:42

Something's broke... Big price spike

[tuftymatt] 13/10/2022 11:41

UTURN COMING BY TRUSS

[eurofox] 13/10/2022 11:38

some short closing going on here and other financials

[geckotheglorious] 13/10/2022 11:14

bothdavis
Post 14780
"Nikhil Rathi Chief Executive of the City regulator said, ' the pension fund crisis could not have been forseen despite concerns about derivatives that schemes are exposed to"

The CEO of the City Regulator is clearly an idiot.

Over leveraging pension funds to enhance returns was always an idiotic plan. The outcome always clear. As indeed the GFC in 2007/2008 was. Many were warning in the run up to it - sadly warnings ignored. As were the lessons of the GFC.


Did they learn nothing from the Lehman inspired Debt crisis of 2007/2008??
Debt and Leverage.

Pension funds should have either
1) Reduced payouts
2) Ask members to increase their contributions

But using leverage via derivatives is imprudent beyond belief. It's questionable for short term trading, but for people's long term financial plans, disgusting, greedy, and stupidity extraordinaire.

[geckotheglorious] 13/10/2022 11:11

cjac39
Post 14771
"All this apocalyptic talk is of course nonsense. 08 looked scary and this is a microcosm of that. Govts running deficits were ever thus and as long as you print your own currency and you’re big enough you are fine"

Wouldn't be so quick to diss such an outcome s nonsense myself.

2008 looked scary. Rofl, it was a walk in the park compared to what is coming.
Why? Because 2007-2008 was a debt crisis that had been leveraged up the wazoo by derivatives(Those Mortgage backed securities remember)

And how did we solve it? Even more debt and more leverage so as to kick the can down the road for 14 more years! So the problem then, that scared you so, is now magnified and far worse!

As to the last sentence , run deficits as long as you print your own currency, you're - laughable. Simply unsustainable. Even the US's financial position is unsustainable - Nat Debt $31 trillion on balance sheet.

This soaring inflation is the result of MMT combined with lockdown supply chain issues. And it isnt transitory either.

The financial tsunami coming is going to make the 2007/2008 crisis look positively picnicesque.

[bothdavis] 13/10/2022 08:37

Nikhil Rathi Chief Executive of the City regulator said, ' the pension fund crisis could not have been forseen despite concerns about derivatives that schemes are exposed to. Turmoil in the bond market was 'beyond any historical precedent.''

[jomac2412] 13/10/2022 06:52

Thanks for the reply cjac , makes me feel more comfortable.

[watfordhornet] 13/10/2022 06:33

Very confused who is going to be held liableSone big director buys would help with my nerves.Overloaded in Financial Services and obviously way too much in here, LGEN, MNG plus host of banks

[cjac39] 13/10/2022 05:53

but the ldi operators have no risk apart from loss of future fees. its only the ldi funds, ie the p funds and their corp sponsors, and the bank derivative counterparties that have risk. its a tussle between banks and funds alone.

i hope somehow the corporate sponsors get to sue the trustees and the tpr over mismanagement but i guess they would have been signatories to these stupid plans

it was obvious they were over gearing and playing liquidity in plain sight from day1 of ldi

it was also obvious that closing out long term reals at negative levels is self perpetuating and stupid

i told the DMO about this problem in 2006 and told them to issue 10x the amount of linkers with higher reals but its all on narrow mandates and deaf ears

[jomac2412] 12/10/2022 22:45

www.avivainvestors.com/en-gb/about/our-people/r/rakesh-girdharlal/

Aviva are definetly involved with LDI's ,I just hope they have managed them sensibly ! , im guessing this is just normal risk management within the Insurance Industry ? as I guess most of us hadn't really been aware of LDI's and their possible consequences before the last couple of weeks .

[essentialinvestor] 12/10/2022 21:31

Interesting, appreciate the reply.

[cjac39] 12/10/2022 21:28

no EI just classic risk off. in 08 it was really scary. i was in the centre of an insurance company we thought was bust that paid 7mln pensions. same story most of the high st banks - on paper pretty much all bust.

this time around it couldntbe more different. everyone is hyper regulated with enormous amounts of capital.

and dont forget - banks and insurers make MORE money as interest rates go up not less

seems people have forgotten this

the downside scenario used to be interest rates going to 2-3 then they went to 0.