Paul J Davies
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pauljdavies.bsky.social
Paul J Davies
@pauljdavies.bsky.social
5.1K followers 1.3K following 6.5K posts

Has views on banking and finance for Bloomberg Opinion.
Just because you “like” something doesn’t mean you *like* something…
Money. Music. Books and Bad like really atrocious Jokes. Also #COYS

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Business 46%
Economics 14%
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pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · Apr 9
🧵 A massive sell-off in Treasury markets is threatening to turn Trump’s tariff war into full blown financial crisis. Hedge funds unwinding highly leveraged basis trades is fuel to these fire sales – that’s bad on its own, but these trades are much more important than just bets on markets.
Shadow Banks Are Too Big to Stay in the Shadows
Mega hedge funds are so critical to modern finance they should be regulated more like banks.
www.bloomberg.com

Reposted by Paul Davies

mmasnick.bsky.social
Mike Masnick @mmasnick.bsky.social · 13m
Seen on Reddit:

"42 is just old people 6 7"

And... well... yeah. Can't really argue.

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 1h
Hang on... where was his thigh? How did it get mistaken for the arm of a chair?

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 1h
top work

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 1h
sometimes unfortunately it's both

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 3h
Bust your gate and leave a broke down Sierra full of rubbish in the drive
katie0martin.ft.com Katie Martin @katie0martin.ft.com · 3h
install a conservatory to own the libs. perfect.

www.thetimes.com/life-style/p...

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 3h
But it's not Soo in English either?

Reposted by Will Jennings, Paul Davies

katie0martin.ft.com
Katie Martin @katie0martin.ft.com · 3h
install a conservatory to own the libs. perfect.

www.thetimes.com/life-style/p...

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 3h
Damnit "me too"!

My typing is even worse than usual today for some reason. Ansd it's never good!

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 3h
We too. This is like a TV series I've heard of and lots of people seem to talk about but I've never watched it and it's way too late to bother starting, especially as it sounds shit.

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 3h
In American, why is it realizing, but not rizing?

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 4h
LOL

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 4h
JPMorgan is building a new office in Canary Wharf. Goldman Sachs is creating 500 (count em!) new jobs in Birmingham. This is just the stuff Rachel Reeves must have dreamed of when she asked the city to show its support! <strong arm emoji>

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 4h
I've also just realized that if I'm the underwriter who wants to create this as a combined product, I'd have to structure the whole thing synthetically because there is no upfront net cash inflow to my books.

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 4h
People's homes are the collateral here after all.

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 4h
So idk. It sounds clever, but it also sounds like a fantasy. The potential complexity is probably a bit of a consumer protection issue too tbh. Especially if there is any danger of maturity or fixed-floating mismatch.

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 5h
...and it's just not in there. Combing some drawdown with some income is about as racy as they seem to get. And existing ERM is still seen as an innovative and niche product - on its own! vle.actuaries.org.uk/pluginfile.p...

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 5h
...for liabilties they already have. Maybe it could still work coz obvs they want to keep writing more liabilities as well as asset but maybe not yet. Lastly, I found an institute of actuaries paper on potential innovations in retirement products and

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 5h
So it's probably quite niche? Then there's the problem of the two sides being covered by different regulatory regimes - probably fixable if the FCA wanted to write something specifically for a combined product? Also, the big ERM writers are doing this biz because they want the assets...

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 5h
I did some digging around and as far as I can tell this product doesn't exist. Question is why? The basic economics only work if you're really old - you need to be late 70s an older to get a higher enough annuity rate to beat the typical 6-8% liftime equity release interest rate.

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 7h
So if this product does exist and the rate-arb can be lifetime fixed and is as wide as you guys reckon (and the fees not too onerous) then it would definitely be a good way of paying the mansion tax! I think we've just solved the debate.

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 7h
Also, the mortgage leg would have to be lifetime fixed rate, right? Otherwise you could get into all sorts!

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 7h
But it doesn't even have to be millions? Why wouldn't you do it with just £150k? (houses worth £500k of which there are many!)

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 7h
Is this a product you've seen available anywhere? Is it a popular thing? Sounds like the sort of thing L&G ought to do in spades but I've never heard them talking about it. I may have just not been paying attention

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 7h
I fell like the Sunday money pages ought to be full of "this one neat trick" pieces...

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 7h
Yeah, sorry the penny dropped just before you posted this. You're basically talking about property mortgage-gilt rates arbitrage as a profitable cash-flow trade! That sounds very interesting. If it works so obviously, why aren't loads of people already doing it?

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 7h
Only if you have another pot of money? And in which case maybe you’re not cash poor?

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 7h
They already behave like them, following the boss’s strong example!

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 8h
But if you've already bought your annuity in the past...?

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 8h
Sure. But I think the majoriity of the cash poor we're talking about are going to be non-working, older people on pensions, right? They may have quite a decent pension income, but an extra £2.5k annual expense for a lot of those just over the £2m might be quite a chunk even if healthy?

pauljdavies.bsky.social
Paul J Davies @pauljdavies.bsky.social · 8h
Exactly. that's why LTVs are very restricted!