ING

Who are these guys? LETRX appears to be just one of many aspects -
whereas with ING, they're all over the place. I'm even finding links
into Scottsdale, AZ - one pit of a contact site I've been to once too
often to ramble about the State Attorney General for computer rebated
parts complaints. LETRX a subsidiary of ING, even though I see ING core
holdings over a diverse range of funds? I assume ING isn't privately
tradeable, but an institutional source.

ING GROEP N V SPONSORED ADR - ING Groep, a global financial
institution.

In 2003, ING Direct, the company's direct banking unit, continued its
expansion efforts and contributed to group profit for the first time.
The unit served 8.5 million customers at the end of 2003 (versus 5.0
million at 2002 year end), with approximately 100 billion euros in
funds entrusted (versus 55 billion euros). ING's developing markets
insurance operations posted organic growth in premium income of 11% in
2003, as the business continued to expand in China.

Netherlands
ING GROEP (ING )was up =800.79 to =8026.83. The company's strong third
quarter results prompted target price upgrades. Lehman Brothers raised
its target price to =8024.5 from =8024.0 and kept its equal weight
rating. Morgan Stanley raised its target to =8030 from =8027.5.

ING Russia A (LETRX)

ING Russia Fund will normally invest at least 80% of its assets in
equity securities of Russian companies believed to be undervalued. The
fund may invest the other 20% of assets in debt securities issued by
Russian companies or the Russian government. The fund may also invest
in securities of companies from the former Soviet Union.

Re: ING

ING is a Dutch Bank. It runs INGDirect in the UK, which is an internet
savings bank giving a high rate of interest, currently 4.75%, on any
amount invested with instant access and unlimited numbers of deposits
and withdrawals.

Unlike many other banks that might appear to give marginally more
interest, there are no special rates for the first 6 months or limits of
3 withdrawals a year or requirements to give 3 months notice of a
withdrawal or lose that much interest.

It is just a good simple snag-free, risk-free, home for your cash and
most of mine is invested with ING. Incidentally UK Government Bonds or
Gilts are only giving about 4.4% redemption return so I can't see the
point in them compared to an internet bank like ING. They give less
return with more risk. Can anyone justify owning bonds in the UK?

Flasherly wrote:
> Who are these guys? LETRX appears to be just one of many aspects -
> whereas with ING, they're all over the place. I'm even finding links
> into Scottsdale, AZ - one pit of a contact site I've been to once too
> often to ramble about the State Attorney General for computer rebated
> parts complaints. LETRX a subsidiary of ING, even though I see ING core
> holdings over a diverse range of funds? I assume ING isn't privately
> tradeable, but an institutional source.
>
> ING GROEP N V SPONSORED ADR - ING Groep, a global financial
> institution.
>
> In 2003, ING Direct, the company's direct banking unit, continued its
> expansion efforts and contributed to group profit for the first time.
> The unit served 8.5 million customers at the end of 2003 (versus 5.0
> million at 2002 year end), with approximately 100 billion euros in
> funds entrusted (versus 55 billion euros). ING's developing markets
> insurance operations posted organic growth in premium income of 11% in
> 2003, as the business continued to expand in China.
>
> Netherlands
> ING GROEP (ING )was up €0.79 to €26.83. The company's strong third
> quarter results prompted target price upgrades. Lehman Brothers raised
> its target price to €24.5 from €24.0 and kept its equal weight
> rating. Morgan Stanley raised its target to €30 from €27.5.
>
> ING Russia A (LETRX)
>
> ING Russia Fund will normally invest at least 80% of its assets in
> equity securities of Russian companies believed to be undervalued. The
> fund may invest the other 20% of assets in debt securities issued by
> Russian companies or the Russian government. The fund may also invest
> in securities of companies from the former Soviet Union.
>

Re: ING

David Wilkinson wrote:
> ING is a Dutch Bank. It runs INGDirect in the UK, which is an internet
> savings bank giving a high rate of interest, currently 4.75%, on any
> amount invested with instant access and unlimited numbers of deposits
> and withdrawals.
>
> Unlike many other banks that might appear to give marginally more
> interest, there are no special rates for the first 6 months or limits of
> 3 withdrawals a year or requirements to give 3 months notice of a
> withdrawal or lose that much interest.
>
> It is just a good simple snag-free, risk-free, home for your cash and
> most of mine is invested with ING. Incidentally UK Government Bonds or
> Gilts are only giving about 4.4% redemption return so I can't see the
> point in them compared to an internet bank like ING. They give less
> return with more risk. Can anyone justify owning bonds in the UK?

David

I am sure you can see the logical flaw in what you just wrote? Or were
you being rhetorical?

The point is the ING rate is not *guaranteed* over any time period. If
the Bank of England cuts interest rates tomorrow, ING will follow suit.

Whereas holding a bond locks in that return for the time to maturity of
the bond (less the risk of reinvesting the coupon at a lower rate: a
stripped bond of course does not have this problem).

So it's really a forecast of interest rates. If you think short rates
are likely to stay where they are, or go up, then clearly the deposit
account is preferred.

*however* periods where the yield curve is inverted like that are
relatively rare: normally the market offers a higher rate, the longer
your money is locked up, (the more interest rate risk you bear). So
it's not a good bet to assume that because we have a (nearly) inverted
interest rate yield curve now, we will have one in the future.

D.

>

Re: ING

It's one of the world's largest banks, HQ'd in Netherlands.

They do funds (hence ING Russia A) and also offer internet bank
accounts in a number of countries.

In Netherlands you can borrow money from them to finance your farm.

Re: ING

darkness39 wrote:
> David Wilkinson wrote:
>
>>ING is a Dutch Bank. It runs INGDirect in the UK, which is an internet
>>savings bank giving a high rate of interest, currently 4.75%, on any
>>amount invested with instant access and unlimited numbers of deposits
>>and withdrawals.
>>
>>Unlike many other banks that might appear to give marginally more
>>interest, there are no special rates for the first 6 months or limits of
>>3 withdrawals a year or requirements to give 3 months notice of a
>>withdrawal or lose that much interest.
>>
>>It is just a good simple snag-free, risk-free, home for your cash and
>>most of mine is invested with ING. Incidentally UK Government Bonds or
>>Gilts are only giving about 4.4% redemption return so I can't see the
>>point in them compared to an internet bank like ING. They give less
>>return with more risk. Can anyone justify owning bonds in the UK?
>
>
> David
>
> I am sure you can see the logical flaw in what you just wrote? Or were
> you being rhetorical?
>
> The point is the ING rate is not *guaranteed* over any time period. If
> the Bank of England cuts interest rates tomorrow, ING will follow suit.
>
There is nothing rhetorical about it. It is a simple investment
judgment. ING give a better return than the redemption yield of any
gilts from 2006, @ 4.4% to 2032 @ 4.29%. UK interest rates have been in
the 4.5 to 5% range for a long time and will probably stay there.

Inflation is getting more likely to increase so Bank rate will if
anything probably increase causing a drop in bond NAVs. If I want to
avoid this I could hold a gilt to maturity but then my money would be
locked into a low interest rate for a period of years. And, of course, I
can get a much higher return in stocks or mutual funds. I can swap from
cash (ING) to funds at any time without loss.

> Whereas holding a bond locks in that return for the time to maturity of
> the bond (less the risk of reinvesting the coupon at a lower rate: a
> stripped bond of course does not have this problem).
>
> So it's really a forecast of interest rates. If you think short rates
> are likely to stay where they are, or go up, then clearly the deposit
> account is preferred.
>
> *however* periods where the yield curve is inverted like that are
> relatively rare: normally the market offers a higher rate, the longer
> your money is locked up, (the more interest rate risk you bear). So
> it's not a good bet to assume that because we have a (nearly) inverted
> interest rate yield curve now, we will have one in the future.
>
> D.
>
>
>

Re: ING

David

So you understand my point that the key is one's expectations of future
interest rates?

One cannot compare an overnight rate, like the ING Direct one, with a
bond *without* making an assumption on the future course of interest
rates (ie the shape of the yield curve).

Without explicitly doing that, any comment about bond yields v. deposit
yields is nonsensical.

D.

Re: ING

David Wilkinson wrote:
> ING is a Dutch Bank. It runs INGDirect in the UK, which is an internet
> savings bank giving a high rate of interest, currently 4.75%, on any
> amount invested with instant access and unlimited numbers of deposits
> and withdrawals.
>
> Unlike many other banks that might appear to give marginally more
> interest, there are no special rates for the first 6 months or limits of
> 3 withdrawals a year or requirements to give 3 months notice of a
> withdrawal or lose that much interest.
>
> It is just a good simple snag-free, risk-free, home for your cash and
> most of mine is invested with ING. Incidentally UK Government Bonds or
> Gilts are only giving about 4.4% redemption return so I can't see the
> point in them compared to an internet bank like ING. They give less
> return with more risk. Can anyone justify owning bonds in the UK?

Arkadi Kuhlmann - Chairman, President and CEO of ING DIRECT USA

Offers simple financial products direct to consumers over the telephone
and Internet.
Headquartered in Wilmington, Delaware He joined ING in June 1996 as
President and CEO to start up the ING DIRECT initiative in Canada.
Following ING DIRECT in Canada, "Captain Crunch", as he is
affectionately known by his friends and close colleagues, embarked upon
the launch of ING DIRECT USA in September 2000. In just four years, ING
DIRECT has become the 38th largest bank in the U.S.

3.50% Annual Percentage Yield on an FDIC-insured savings account with
no fees, required minimums or service charges...

---

Nowhere near those figures and and their direct fund lineup doesn't
include ING Russia A. You've got a higher earned income tax base,
perhaps 33% vrs 20% over a lower middle to middle income derivative,
progressively moreso, least last I heard from limelite rockstars.

". . .I guess I miss all those large-butted American women." Robert
Crumb, intverview with Simon Hattenstone, south of France, The
Guardian.

Re: ING

Flasherly wrote:

>
> Arkadi Kuhlmann - Chairman, President and CEO of ING DIRECT USA
>
> Offers simple financial products direct to consumers over the telephone
> and Internet.
> Headquartered in Wilmington, Delaware He joined ING in June 1996 as
> President and CEO to start up the ING DIRECT initiative in Canada.
> Following ING DIRECT in Canada, "Captain Crunch", as he is
> affectionately known by his friends and close colleagues, embarked upon
> the launch of ING DIRECT USA in September 2000. In just four years, ING
> DIRECT has become the 38th largest bank in the U.S.
>
> 3.50% Annual Percentage Yield on an FDIC-insured savings account with
> no fees, required minimums or service charges...
>
> ---
>
> Nowhere near those figures and and their direct fund lineup doesn't
> include ING Russia A.

ING Russia A is an OEIC (European version of a mutual fund) or a mutual
fund that invests in Russia, managed by ING's fund management
operation.

Nothing to do with the deposit accounts of the bank.


You've got a higher earned income tax base,
> perhaps 33% vrs 20% over a lower middle to middle income derivative,
> progressively moreso, least last I heard from limelite rockstars.
>
Are we talking UK v. US?

Then UK taxes are 10%, then 22%, then 40%. In addition on employment
there is national insurance which is 10% up to a maximum (about =A3550/
week I think so a max of =A355/wk) + 1% of income.

Not sure how this stacks up to the US but say against moving from New
York City, I have friends who say their tax rate came down.

Re: ING

darkness39 wrote:
> > Arkadi Kuhlmann - Chairman, President and CEO of ING DIRECT USA
>
> ING Russia A is an OEIC (European version of a mutual fund) or a mutual
> fund that invests in Russia, managed by ING's fund management operation
> Nothing to do with the deposit accounts of the bank.


ING's US banking outfit is savings and presumably checking, loans and
mutual funds, all rolled up into one, and entirely an online operation,
although they do include a voice attended telephone listing. An OEIC -
OK, I see - continental style investing. That was my itch. I looked
for it up in INC's Delaware ops, but they've a vague global mutual
offering, at least for my purposes. What brought it on is while
looking around for source holdings and means to potentially repeat a
performance run I extacted on TREMX, now that I'm barred from trading
in their house. That's where ING Russia popped up - it's appears to be
a likely core component in a number of mentionable funds specializing
in Russian and Eastern Block sectors.

> You've got a higher earned income tax base,
> > perhaps 33% vrs 20% over a lower middle to middle income derivative,
> > progressively moreso, least last I heard from limelite rockstars.
> >
> Are we talking UK v. US?

Yep - I'd lean to socialized care in an idiological sense, though your
figures are more modest than I'd expected. Middle income - $35-50K/US
at 22% seems quite reasonable.

> Then UK taxes are 10%, then 22%, then 40%. In addition on employment
> there is national insurance which is 10% up to a maximum (about =A3550/
> week I think so a max of =A355/wk) + 1% of income.
>
> Not sure how this stacks up to the US but say against moving from New
> York City, I have friends who say their tax rate came down.

Extremes. NYC - should be. I was born in if not the highest, then
closest to the most expensive county in USA - hot-tub, more performers
per capita for a city, a little north of San Francisco in Marin County;
Long Island eminently qualifies alongside that distinction, if not
exceeds it around Spruce Goose territories. They still come here in
droves from NYC - Florida (2nd or 3rd highest rising real estate
market), though I've talked with more than a few who as well have left
the land of fruits and nuts to escape the cost of living insanity
(pushing a million for entry level, decent housing say a little over
1000 sq. ft.).

Re: ING

darkness39 wrote:
> David
>
> So you understand my point that the key is one's expectations of future
> interest rates?
>
> One cannot compare an overnight rate, like the ING Direct one, with a
> bond *without* making an assumption on the future course of interest
> rates (ie the shape of the yield curve).
>
> Without explicitly doing that, any comment about bond yields v. deposit
> yields is nonsensical.
>
> D.
>
I think you have missed my point. No one knows for sure what interest
rates will be in the future. They may go either up or down. That is
interest rate risk. As such bonds should give a higher return than a
risk-free investment like an internet bank according to the CAPM.

In fact they give a lower return so I cannot see them as good value.
From the CAPM I can easily find a combination of an optimum portfolio
and a risk-free asset to give a higher return than bonds at the same
risk level. So why should I hold bonds?

Re: ING

David Wilkinson wrote:
> darkness39 wrote:
> > David
> >
> > So you understand my point that the key is one's expectations of future
> > interest rates?
> >
> > One cannot compare an overnight rate, like the ING Direct one, with a
> > bond *without* making an assumption on the future course of interest
> > rates (ie the shape of the yield curve).
> >
> > Without explicitly doing that, any comment about bond yields v. deposit
> > yields is nonsensical.
> >
> > D.
> >
> I think you have missed my point. No one knows for sure what interest
> rates will be in the future. They may go either up or down. That is
> interest rate risk.

Yes. So an overnight deposit account does not guarantee a rate,
whereas a bond does (subject to reinvestment risk on the coupons). A
stripped bond has a guaranteed return to maturity.

As such bonds should give a higher return than a
> risk-free investment like an internet bank according to the CAPM.

If the yield curve is upward sloping. Which it is normally. But not
right now.

>
> In fact they give a lower return so I cannot see them as good value.
> From the CAPM I can easily find a combination of an optimum portfolio
> and a risk-free asset to give a higher return than bonds at the same
> risk level.

Higher *expected* returns, but also higher risk. Note that in Europe,
we tend to use the long bond as the risk free asset in studies of CAPM,
in the US they tend to use the treasury bill rate.

>So why should I hold bonds?

One would hold bonds if:

1. one had a fixed liability which one wished to perfectly hedge
2. one had an expectation that interest rates would move lower *and*
long rates would move lower

The problem I have is perhaps one of language. One cannot compare the
yield on a deposit account (time to maturity 0) with the yield on a
bond, without having an expectation of future interest rate movements.

Re: ING

Note at middle income (up to =A332,500 I think which is USD $50k- closer
to 57k at current XR) you pay:

- nothing on the first 4250
- 10% on the next 6000
- 22% on everything else

PLUS 11% on everything (I think) for National Insurance (assuming you
are employed)

I am vague on the brackets without lookign them up.

The big differences vs the US

- no health insurance (unless you choose to go private - figure =A3200
pcm for a family of 4)
- university tuition will be =A33k pa (not payable until you graduate
and get a job)
- sales tax is 17.5% on virtually everything (except heating, childrens
clothes, food)
- gas taxes are far higher - US petrol is about 45p/litre, UK petrol
about 97p/ litre
- 'sin' taxes are on a par with the most expensive US states
- property tax for a family of 4, middle class house about =A31400, say,
in a high cost municipality

As you point out the biggest cost is housing. Which is only indirectly
a result of government policy (its about zoning, not tax per se). UK
housing costs are by and large much higher than US *except* for the
coastal 'bubbles' (California, New York, Boston, Washington). I was
shocked by the price of a 4 bed in Long Island, even by London
standards. However that US 4 bed would be at least 50% larger than the
comparable UK home, maybe even twice as big.

UK incomes are, on average, 60-70% of US average incomes.

Re: ING

darkness39 wrote:
> David Wilkinson wrote:
>
>>darkness39 wrote:
>>
>>>David
>>>
>>>So you understand my point that the key is one's expectations of future
>>>interest rates?
>>>
>>>One cannot compare an overnight rate, like the ING Direct one, with a
>>>bond *without* making an assumption on the future course of interest
>>>rates (ie the shape of the yield curve).
>>>
>>>Without explicitly doing that, any comment about bond yields v. deposit
>>>yields is nonsensical.
>>>
>>>D.
>>>
>>
>>I think you have missed my point. No one knows for sure what interest
>>rates will be in the future. They may go either up or down. That is
>>interest rate risk.
>
>
> Yes. So an overnight deposit account does not guarantee a rate,
> whereas a bond does (subject to reinvestment risk on the coupons). A
> stripped bond has a guaranteed return to maturity.
>
Yes, but that is your fallacy. The bonds are only risk-free if held to
maturity but the risk really is that you can't guarantee you will want
to do that. If, for a whole variety of possible reasons you decide to
sell before maturity, then interest rate risk means the NAV may be lower
(or higher). The longer the bond the more likely you are to sell before
maturity and the higher the actual risk.

I don't know what percentage of bonds is actually held to maturity but
do note that bonds are traded in large numbers and to large value so a
lot of investors are not holding them all the way. As far as I can see
they are bought and sold all the time like shares. Holding to maturity
is presumably the ultimate fall-back strategy and, like Buy and Hold
with shares, is much discussed but probably not often practiced.

An internet bank like ING on the other hand is risk-free. It gives a
known interest rate, 4.75% at the moment, 5% a few months ago. The
interest is automatically reinvested so it compounds, unlike bonds where
the interest is in cash and there is no compounding. If the interest
rate changes the existing capital plus interest is unaffected and the
investor can sell or hold as he wishes without loss. The only risk is
that future interest rates may change, either way but this only affects
the rate of increase of capital, which will still increase and can only
go up. With bonds, interest rate changes affect the current value of the
holding which can go down as well as up.

You have said nothing to make any sort of case for bonds at current
interest rates and redemption yields. I still think that bond redemption
yields should be higher than internet bank interest rates to compensate
for the risk of loss of bond NAV at a probable sale before maturity.

> As such bonds should give a higher return than a
>
>>risk-free investment like an internet bank according to the CAPM.
>
>
> If the yield curve is upward sloping. Which it is normally. But not
> right now.
>
>
>>In fact they give a lower return so I cannot see them as good value.
>> From the CAPM I can easily find a combination of an optimum portfolio
>>and a risk-free asset to give a higher return than bonds at the same
>>risk level.
>
>
> Higher *expected* returns, but also higher risk. Note that in Europe,
> we tend to use the long bond as the risk free asset in studies of CAPM,
> in the US they tend to use the treasury bill rate.
>
> >So why should I hold bonds?
>
> One would hold bonds if:
>
> 1. one had a fixed liability which one wished to perfectly hedge
> 2. one had an expectation that interest rates would move lower *and*
> long rates would move lower
>
> The problem I have is perhaps one of language. One cannot compare the
> yield on a deposit account (time to maturity 0) with the yield on a
> bond, without having an expectation of future interest rate movements.
>

Re: ING

"darkness39" <> wrote

- property tax for a family of 4, middle class house about £1400, say,
in a high cost municipality

My property tax is $5,200. Family size is not an issue.

UK incomes are, on average, 60-70% of US average incomes.

UK median income 22,412.00, about $39,114.00


US median is $36,374.00 for full time workers.

Re: ING

"darkness39" <> wrote
> >So why should I hold bonds?
>
> One would hold bonds if:
>
> 1. one had a fixed liability which one wished to perfectly
hedge
> 2. one had an expectation that interest rates would move
lower *and*
> long rates would move lower

This smacks of such incredible ignorance. I don't know why
you think you have the authority to post here, misinforming
people.

By not holding bonds right now, one misses interest payment
income for X months, where X depends on the investor's best
guess as to when interest rates will go high enough to
offset the income s/he loses by not buying bonds now.

There are investment grade bonds paying better interest than
ING right now, ya know.

> The problem I have is perhaps one of language. One cannot
compare the
> yield on a deposit account (time to maturity 0) with the
yield on a
> bond, without having an expectation of future interest
rate movements.

No comparison can reasonably be made between any two
categories of investment vehicles without certain
expectations.

You're posting crap.

You don't deserve politeness. Someone needs to slap you
around, polemically speaking, so you know you need a helluva
lot more education.

Re: ING

Sounds like an even steven, 22% for upper class with a 11% flat stipend
for heath provision; the US rich are "progressively" taxed. US heath
care, w/ or without it one might presume, is the single largest source
for bankruptcy proceedings; one out of five children will be likelier
to survive a serious medical condition due to the right heath
insurance. Ah, I'd forgotten the social aspects of learning - where,
in order to qualify for the distinction, one is periodically assessed
and tested over a duration, vocation or trade levels don't otherwise
absorb. The US has a something of a lower achievement provision for
marginal and late starters, a basic and economical means community
colleges are apt to offer - though a less austute or quality approach
than would be proper, I should think, to Ivy league standards. Hmm...
$100+K/US vrs $3K/UK to attend a 1000-year-old oxfield for a proper
education. . . Quite. Sales taxes at 20% is surprising; buying from
the internet (without taxes) has been a source of ongoing contention in
these parts. I wasn't pointing out housing, particularly, though
hinking back to when I lived in England for three years, toasting
muffins and pollywogging from a colloquial tanner's thatch were
resoundingly more keen, than anything I might recall other than kindly
intents, which speak well from the hearth; and, as well, the obsequious
flats drearily cast steely gray street by street in a land where
overcast is the norm. For the most, I was probably an urchin within an
UK industrialized sector, Whitney, nearby a disused RAF headquarters.
US beds in real estate marketing do not mean as much as total footage;
one simply carves it up by adding, more or less, additions, entitled
improvements, and sundry assessed valuations. 1000 square foot is
likely to be an acceptable entry level figure for convenience sake and
general desirability, whereas 2000 square foot, to me, seems somewhat
more socially ambitious, if not expected within means for raising a US
family of 2.2 children. But you're right - it does seem as if,
somehow, I'm fortunately able to loose myself, at times, living by
myself with 1000 square ft. to wander over (discounting all amps,
guitars, and extraneous patch cords). 60-70% median expected income is
another eye opener - here there's the saying, you either hustle or you
don't - but, the broader implications of 2/3 income over an entirety of
land that stretches to the bounds of the state I'm in is beginning to
sound outlandish.

'Ireland keeps my feet dry.' -Bono of U2; from his father's sayings.

darkness39 wrote:
> Note at middle income (up to =A332,500 I think which is USD $50k- closer
> to 57k at current XR) you pay:
>
> - nothing on the first 4250
> - 10% on the next 6000
> - 22% on everything else
>
> PLUS 11% on everything (I think) for National Insurance (assuming you
> are employed)
>
> I am vague on the brackets without lookign them up.
>
> The big differences vs the US
>
> - no health insurance (unless you choose to go private - figure =A3200
> pcm for a family of 4)
> - university tuition will be =A33k pa (not payable until you graduate
> and get a job)
> - sales tax is 17.5% on virtually everything (except heating, childrens
> clothes, food)
> - gas taxes are far higher - US petrol is about 45p/litre, UK petrol
> about 97p/ litre
> - 'sin' taxes are on a par with the most expensive US states
> - property tax for a family of 4, middle class house about =A31400, say,
> in a high cost municipality
>
> As you point out the biggest cost is housing. Which is only indirectly
> a result of government policy (its about zoning, not tax per se). UK
> housing costs are by and large much higher than US *except* for the
> coastal 'bubbles' (California, New York, Boston, Washington). I was
> shocked by the price of a 4 bed in Long Island, even by London
> standards. However that US 4 bed would be at least 50% larger than the
> comparable UK home, maybe even twice as big.
>=20
> UK incomes are, on average, 60-70% of US average incomes.

Re: ING

Ed wrote:
> "darkness39" <> wrote
>
> - property tax for a family of 4, middle class house about =A31400, say,
> in a high cost municipality
>
> My property tax is $5,200. Family size is not an issue.

It varies a lot I guess by municipality. I have friends in Mass who
pay $10k. Family size only counts here in that you get a single
occupant discount of 25%.

>
> UK incomes are, on average, 60-70% of US average incomes.
>
> UK median income 22,412.00, about $39,114.00
>
>
> US median is $36,374.00 for full time workers.
>

I am very puzzled by that number. The UK one looks about right (it is
something over =A3450/ week, the median wage) of course the household
income would be higher. Is the difference your data is 'per person'?

If you take GDP per head, the UK is about 60-65% of the US, the last I
checked, at a Purchasing Power Parity basis. The UK has less of
spread (Gini coefficient) between top and bottom (but more than any
other western nation other than the US and maybe Canada).

Re: ING

Your tone and ad hominem approach does not worthy a reasoned reply.

Re: ING

David

I was taking the textbook definitions of risk so I see where the
misunderstandings come in.

I agree that in your terms, where you are thinking of the NAV risk of a
bond, your assessment is correct. Particularly as you *do* have a
forecast of where the yield curve is going.

D.

Re: ING

Yes the UK is weird: only country in the world that doesn't price
residential real estate by the square metre or square foot.

Re: ING

darkness39 wrote:
> Yes the UK is weird: only country in the world that doesn't price
> residential real estate by the square metre or square foot.

Established locations exhibit characteristic market profiles - medians
within expected correspondence based on useage, income and desirability
- general demographics. Overall size is going to be a likely constant
as it varies over higher/lower and larger/smaller means. Regardless of
how the real estate mantra for profitability here goes... location,
location, location, I'd think 358 sq. metres most cost efficient and
close to entry averages; I've watched too many people buy the
condominium or pre-manufactured home (pseudophonemes for teniment
lifestyles) after biting off 800 sq. worth of maintenance.

Re: ING

Flasherly wrote:
> darkness39 wrote:
> > Yes the UK is weird: only country in the world that doesn't price
> > residential real estate by the square metre or square foot.
>
> Established locations exhibit characteristic market profiles - medians
> within expected correspondence based on useage, income and desirability
> - general demographics. Overall size is going to be a likely constant
> as it varies over higher/lower and larger/smaller means. Regardless of
> how the real estate mantra for profitability here goes... location,
> location, location, I'd think 358 sq. metres most cost efficient and
> close to entry averages; I've watched too many people buy the
> condominium or pre-manufactured home (pseudophonemes for teniment
> lifestyles) after biting off 800 sq. worth of maintenance.

When you think housing prices are only going one way (up) then cost of
ownership doesn't seem to matter.

It's when housing prices stagnate or fall that people remember their
basic economics. Those McMansions that are dotting America's suburbs
are not an efficient way to live. Nor for most people are they
necessary-- the average family size is still falling I believe, not
rising. Where I have seen them (and they make sense) is where the
in-laws live with the children, more typical of immigrant communities
(eg Italian, Chinese) than the North American norm. But 4,000 square
feet for a family of four just leaves you with a lot of carpet to
clean, airspace to heat and cool, etc.

I remember wandering around some very nice, very cheap, districts in
Baltimore. 3 story brick houses, 5-6 bedrooms. Housing prices a
fraction of other cities. One of the residents told me they had been
built in the 20s, and then the Depression came, and Baltimore real
estate has never really recovered relative to other North Eastern
cities: the industry and the port died and nothing replaced them
(except the Social Security Administration). I wonder if that will
happen to some of these other 'boomtowns' in the next decade?

The average spend on the structure is probably 1-2% of its value, every
year. Of course this is massively lumpy: nothing for 10 years then a
new roof etc. Whether you pay this annually via a condo fee, or more
lumpily as homeowners tend to do, it istill hurts like hell when it
hits.

I read (in Shiller: Irrational Exuberance, second edition) that the
average American expects his/her home to increase by value by 14% pa.
The actual historical increase in home values pa over the last 100
years is less than 1% (real). This is dot com boom levels of
misapprehension (then it was equities that everyone assumed would
return double digit per annum).

When that expectation collides with reality there are going to be some
nasty accidents: for homeowners, and for lenders (or holders of
mortgage backed securities). Having lived through one residential
property crash (UK 1989-1993) and seen the side effects of a commercial
property crash (Toronto and Boston, 1989-mid 90s) these are not
pleasant events.

Re: ING

The UK doesn't do badly relative to the US on average income however we
work the longest hours in Europe.

If you look at other major European countries, they actually have
higher wages per working hour than the US, but Germans and French only
work 2/3rds as many hours a year as an American.

People have tried to adjust GDP per head Western Europe v. US for these
factors. (Robert Gordon, Northwestern University). The US has higher
GDP for a number of structural reasons: more hours worked, more
airconditioning (worth 1-2% of GDP right there), bigger cars, more
prisons and prisoners etc. Stripping out these structural factors
(except hours worked) the best you can come to is that France and
Germany have average GPD/ head of about 80% of the US. UK about 70%.

However productivity has been growing much faster in the US than in
Europe since 1995. The best guess is that this is the IT revolution:
the biggest impact has been seen in retailing (the growth of the Big
Box especially WalMart, with its superb distribution efficiencies),
also to a lesser extent financial services (eg Schwab online). Europe
lags, whether it will catch up (as historically it always has) remains
to be seen.

Re: ING

darkness39 wrote:
> When you think housing prices are only going one way (up) then cost of
> ownership doesn't seem to matter.

Ho, ho, ho ... I wonder about that (relative to recent years and an
overwhelming segment of American profitability associated with real
estate) - though, in the long run, and I do mean long, land has the
connotation for some thoughtful souls, as would invested bluechip
ownership.

> It's when housing prices stagnate or fall that people remember their
> basic economics. Those McMansions that are dotting America's suburbs
> are not an efficient way to live. Nor for most people are they
> necessary-- the average family size is still falling I believe, not rising.

I'll go along with that - as much for the sake of sensibilty, which
speaks for itself, as for economic necessity, which may become
increasingly ever apparent.

> I remember wandering around some very nice, very cheap, districts in
> Baltimore. 3 story brick houses, 5-6 bedrooms. Housing prices a
> fraction of other cities. One of the residents told me they had been
> built in the 20s, and then the Depression came, and Baltimore real
> estate has never really recovered relative to other North Eastern
> cities: the industry and the port died and nothing replaced them
> (except the Social Security Administration). I wonder if that will
> happen to some of these other 'boomtowns' in the next decade?

Possibly, not far from Light Street, though I don't know Baltimore,
proper, well. I lived directly on the southern skirts of Baltimore,
nearby Richie Highway, for several years. Baltimore is where I learned
to drive a motorcar, only city driving was too intimidating. America's
larger "colonial" eastern cities have the longest chronicles of
racially identifiable, tenament immigrants - each apportioned allotment
of the _American Dream_ accompanied with an exodus from urban to
suburban.

> I read (in Shiller: Irrational Exuberance, second edition) that the
> average American expects his/her home to increase by value by 14% pa.
> The actual historical increase in home values pa over the last 100
> years is less than 1% (real). This is dot com boom levels of
> misapprehension (then it was equities that everyone assumed would
> return double digit per annum).

....how do we know when irrational exuberance has unduly escalated asset
values, which then become subject to unexpected and prolonged
contractions...(-Greenspan). Spoken in 1996, a harmless though
misapprended phrase, that has taken a course over 9 years for the
contraction to bubble.

> When that expectation collides with reality there are going to be some
> nasty accidents: for homeowners, and for lenders (or holders of
> mortgage backed securities). Having lived through one residential
> property crash (UK 1989-1993) and seen the side effects of a commercial
> property crash (Toronto and Boston, 1989-mid 90s) these are not
> pleasant events.

One immanent domestic highlight facing Bernanke. History has its
sadder tales to tell, and for a state of affairs and per capita means,
savings has little to account when your average American liquidates at
$10K/US cash reserves.

'There's is nothing more self-righteous than a Christian with 1223
cubic metres of land.' -Benjamin Franklin.

Re: ING

darkness39 wrote:
> The UK doesn't do badly relative to the US on average income however we
> work the longest hours in Europe.

Really ... round up some civil-servant lackeys at 28 hours weekly
wages, a convenient yardstick, and you've a near absurdity to conceive
if New England Protestant work ethics is by any measure standard.

> If you look at other major European countries, they actually have
> higher wages per working hour than the US, but Germans and French only
> work 2/3rds as many hours a year as an American.
>
> People have tried to adjust GDP per head Western Europe v. US for these
> factors. (Robert Gordon, Northwestern University). The US has higher
> GDP for a number of structural reasons: more hours worked, more
> airconditioning (worth 1-2% of GDP right there), bigger cars, more
> prisons and prisoners etc. Stripping out these structural factors
> (except hours worked) the best you can come to is that France and
> Germany have average GPD/ head of about 80% of the US. UK about 70%.
>
> However productivity has been growing much faster in the US than in
> Europe since 1995. The best guess is that this is the IT revolution:
> the biggest impact has been seen in retailing (the growth of the Big
> Box especially WalMart, with its superb distribution efficiencies),
> also to a lesser extent financial services (eg Schwab online). Europe
> lags, whether it will catch up (as historically it always has) remains
> to be seen.

Outsourcing, the rumble of a growl - U.S. corporate structure is
increasingly defineable over alliances of global affliates. No doubt an
interesting quagmire of charter writs, but withal a nasty bruise to the
snout for many inured American wage-earner's sense of conciliation for
home biasing and global market efficiency. IT, yes, that too - and
marked Western diplomatic efforts at the wane of Marxist influence over
a former U.S.S.R. and China.

"For capitalism, a depression is a good cold douce." -Joseph Schumpeter
during a lecture at Harvard; Austrian, he intended to say shower.

Re: ING

Flasherly wrote:
> darkness39 wrote:
> > The UK doesn't do badly relative to the US on average income however we
> > work the longest hours in Europe.
>
> Really ... round up some civil-servant lackeys at 28 hours weekly
> wages, a convenient yardstick, and you've a near absurdity to conceive
> if New England Protestant work ethics is by any measure standard.
>

The US it is something over 2000 hours per year per worker. UK it is
something around 2000, France it is as little as 1600, I think. But
their value created per hour worked is higher than the US level.

>
> Outsourcing, the rumble of a growl - U.S. corporate structure is
> increasingly defineable over alliances of global affliates. No doubt an
> interesting quagmire of charter writs, but withal a nasty bruise to the
> snout for many inured American wage-earner's sense of conciliation for
> home biasing and global market efficiency. IT, yes, that too - and
> marked Western diplomatic efforts at the wane of Marxist influence over
> a former U.S.S.R. and China.

'outsourcing' in a US context, has already occurred. The shelves of
Walmart are stuffed with goods made in China. The new news is that
some services can be outsourced to India (I think cheque processing is
already outsourced by Citibank to Jamaica).

We only notice it now (as opposed to the disappearance of the
industrial belt in the 80s and 90s) because it is directly affecting us
and our neighbours, whereas people who worked in manufacturing don't
have that political and media voice.

Certain sectors will get hit hard (financial services, IT). But you
can't outsource hospitals (although people now fly to Costa Rica, India
etc. for operations). When Cuba is allowed back into the world, it
will be a major medical centre for retired Americans-- one of the
highest levels of doctors per capita in the world. Still, there are
lots of things that just can't be outsourced.

>
> "For capitalism, a depression is a good cold douce." -Joseph Schumpeter
> during a lecture at Harvard; Austrian, he intended to say shower.

What the Austrians did not understand was sustained disequilibrium.
Once things fall too far, they do *not* self correct-- and then the
Hitlers of this world rise to do something about it. The moralist
language they attach to unemployment, bankruptcy and human suffering
always left me cold.