Member Info for Dorfan

Trouble

“where you were making definite predictions.”

Like to remind me of predictions ‘I’ have made personally? Really interested to see what I have said

Trouble

Here is an overview of information I have pulled together that others might find interesting with regards to the ‘H’ word.

As you have now openly declared that these sort of posts have no value for you then there is no reason to find issue with them and let those that may see value read and form opinions themselves.

The question: Do city traders look at the political UK landscape to hypothesis on share prices?

Yes, traders in the City of London look at UK political events and policies when hypothesizing on share prices, alongside other factors. Political decisions can introduce uncertainty, reshape investor confidence, and have both short-term and long-term effects on the stock market.

How politics influences share prices

Political stability and investor confidence: Periods of political stability, often marked by favorable trade agreements or consistent policy, can boost market sentiment. Conversely, political unrest and major changes can lead to uncertainty and market downturns.

Government policy and regulations: Specific government actions, such as fiscal policies, new taxes, or changes to regulations, can affect corporate profits and valuations, impacting share prices. Recent examples include reactions to tax increases and other policy announcements. For instance, a new tax on property can lead to housebuilder shares falling due to market uncertainty.

Election cycles: Elections often bring speculation about potential policy shifts, which can increase market volatility. The market has time to price in the expected outcome of an election, but unanticipated results can cause sharp reactions. Traders monitor polls and election results to anticipate how a new government might affect different sectors.

Fiscal policy: The government's approach to borrowing, spending, and public finances is a key factor. Market concern over unsustainable fiscal policies can lead to instability, affecting gilt and currency markets.

Global factors: UK politics and financial markets are also influenced by broader geopolitical events and trade relationships. For example, a recent U.S. election led to new tariffs that could impact UK businesses.

Company-specific risk: Individual companies are required to disclose significant political risks they face in their annual reports. These risks can range from geopolitical tensions to changes in regulation and are considered by traders when evaluating stock.

Trouble

“ All your predictions and assessments were based on suppositions and heresay.”

These are not my predictions, this is information I collate together from various sources.

Just out of interest, where do you think the city traders get information from? They look at the political landscape, how a company is performing, what potential it has for the future etc etc. A lot of there decisions are based on hypothetical scenarios, surely even you must know this.

Lloyds has had a good upward run on the SP for a while now and the traders may well be behind its rise, they can equally squash it and have done in the past, not just for Lloyds.

Trouble

Let’s set some ground rules between us then.

If posts are made that are purely political then they are fair game to be reported and removed.

If posts are non Lloyds related they can be reported and removed.

If a post has a political connotation linked to the financial world and Lloyds then it has value, it may be hypothetical and YOU and some others may not like it or agree what it says, but others might, it also meets the moderators criteria as I remember. You can always choose to ignore it.

Now let’s look at a LOT of posts recently and see what value they have.

The SP just smashed through the xxP barrier!

The SP has broken past the xxP level!

Then we get the hypothetical posts which have little value, see my point.

Will the SP reach xxP by lunchtime?

Can we see the SP breaking xxP this evening?

What do we think the SP will be tomorrow?

Do we feel the SP will reach xxP by the end of the week?

I think we might see the SP hit xxxP by the end of the year

Next year I predict the SP will be xxxP, everyone agree?

Trouble - is that a reply to me? If so would you like to elaborate more please?

Trouble - yes, correct. It was a thread that involved the current political situation and Lloyds. It was not biased just to politics only.

Are YOU saying that we can’t discuss politics which includes financial ramifications? Yet prior to my post YOU were openly posting with a political connotation.

Is this one rule for YOU and another rule for everyone else now? Are YOU the de facto moderator now?

Just asking.

ASI

“ The Moderator mentioned politics and offensive behaviour, not everything”

I was just thinking of your post, if I remember correctly, the moderator also mentioned posts that were off-topic with regards to Lloyds.

ASI. - well my observation now is that the moderator seems to have relaxed the rules on politics being posted. They have removed the headline post about it and as some of your friends have started posting about politics I have just joined in on the discussions.

Trouble

“ To me it was an insult.”

And so what was yours to TFE then? An insult or not?

ASI - you have also been extremely guilty of posting off topic completely recent, it may not have been about politics but the concept is the same, yes or no?

Trouble

“ I agree that the name-calling was rather childish”

The word ‘tiresome’ may be annoying but it isn’t derogatory, rude and insulting which is different to what you have recently been calling TFE.

ASI - I have actually been quite to some extent on this front but it does seem like one of your buddies that pushed to have it stopped has actually been very vocal discussing politics.

Is it a case of one rule for one and another for everyone else?

LeeR

“ Since you love veering away from LLOY discussions into Politics”

I have to smile at LeeR’s observation about Trouble. Trouble banged on for ages that this is a forum to discuss Lloyds and not politics and now we see a lot of posts by trouble on politics. Hypocritical or what?

Then there were all the posts from Trouble concerned about name calling that he had issues with and now we see a targeted or shall we call it stalking approach by Trouble against TFE. Again, hypocritical or what?

Just another observation of mine, I could be wrong of course.

STP - I am in shock now, are you saying my posts are not hysterical then?

They are good for a laugh by some then.

STP - there are no political hysterics in my post, just your bizarre interpretation of an overview which has credibility in the real world.

If you and others are not prepared to see the other side and what are valid scenarios then investing in shares could be detrimental to your health.

As has been stated by others, political changes can and will have an impact on the financial world and we can’t ignore them as some wish to do here. Below are some examples:

The 1976 IMF Crisis

Borrowing and loss of confidence: The Labour government led by James Callaghan in 1976 was forced to ask the International Monetary Fund (IMF) for a bailout due to ballooning deficits and inflationary pressures. This eroded market trust in the government's fiscal policy.

Humiliation and austerity: This episode was a humiliating moment for the government and forced it to implement sharp public spending cuts, which had been previously resisted.

Currency fall: Inflationary pressures and investor lack of confidence caused a depreciation of the pound.

The 1960s Devaluation

"Stop-go" economics: The Labour government under Harold Wilson in the 1960s faced economic difficulties characterized by balance-of-payments crises and a "stop-go" cycle of expansion and restraint.

Devaluation of the pound: Concerns from financial speculators led to a 15% devaluation of the pound in 1967, which came after the government had spent heavily on social programs. The government then had to implement austerity measures to defend the currency.

Post-war nationalization

Nationalization as a factor: While funded by government bonds rather than direct taxpayer funds, the large-scale nationalization of major industries like the Bank of England, coal, and steel by the 1945-51 Labour government had significant economic repercussions.

Forced devaluation: This period was also marked by a 30% devaluation of the pound against the dollar, driven by the economic circumstances following the Second World War.

These events, particularly the crises of the 1960s and 1970s, contributed to a period of economic instability that impacted the City's operations and reputation, and are still referenced in economic discussions today

STP

“ as it would represent a buying opportunity.”

And I shall be looking in the wings to see if a potential drop is worth my while to pick a few more up, got to keep thinking of ‘managements’ holiday fund, might get another holiday out of the dividends from them.

A ‘what if’ situation and how would might impact the financial services and Lloyds bank in particular which is focused on the domestic markets whereas most banks have interests elsewhere.

So here are a few things to consider.

In the hypothetical scenario of a Labour Party leadership change prompted by a schism, the banking and financial services sector would face heightened political and market uncertainty, potentially causing short-term volatility.

However, the long-term impact would depend heavily on the new leader's policy direction and whether it continues the fiscally stable, pro-growth, and collaborative approach of the current Labour agenda. Key areas of focus would likely include a potential tax review, regulatory adjustments, and ongoing stability amid market jitters.

Short-term volatility and risk appetite

Initial market jitters: A leadership crisis would create immediate political instability, which historically has led to market volatility, fluctuating stock prices, and potentially affecting investor confidence. Lloyds investors could move towards less risky assets until the new leadership and its policies are clearer.

Geopolitical concerns: The Bank of England has identified geopolitical risk as a major concern for financial institutions. Domestic political turmoil could exacerbate these concerns, especially if it affects the UK's global standing or trade relations.

Fiscal policy and tax

Taxation review: While the current Labour leadership has signaled stability by capping corporation tax, a new leader might revisit tax policies, particularly regarding "wealth taxes" or those affecting the financial sector. Private equity executives, for example, have already faced proposed changes to the taxation of "carried interest".

Deficit and debt: The new leadership would inherit significant public debt and would face pressure to maintain fiscal rules. Their approach to raising revenue could involve reconsidering current tax commitments, potentially affecting high earners or parts of the financial sector.

Regulation and market structure

Regulatory framework: A new leader would likely continue to shape the financial services regulatory landscape. While the current direction is generally pro-innovation and aims to streamline rules, a shift in priorities could influence changes to initiatives like open finance, sustainable finance reporting, and the regulation of new technologies such as securities tokenization.

Consumer protection: Existing plans to reinforce consumer protection through measures like regulating "buy now, pay later" and ensuring access to in-person banking via hubs would probably continue. However, a new leader's stance on consumer-focused regulation could either accelerate or deprioritize specific initiatives.

Long-term outlook:

If change leads to prolonged uncertainty, it could deter foreign and domestic investment.

Trouble

“ a leadership challenge”

A schism in the making, can’t wait. What credible person do they have in mind as a replacement? And whoever gets the job will upset the markets and we will see a period of turmoil in the financial world here which will impact Lloyds in particular.

The talked about 2 up and 2 down on tax increase and reduction on NI has a detrimental impact on pensioners which will lead to less funds going into those people who bank with Lloyds. Potential less funds for Lloyds to use elsewhere.

For those that have investments and income will find that these areas will also be taxed more and it makes you wonder how many might see it as not viable to invest in the stock market which can and will have a direct impact to the likes of Lloyds and other banks.

The pensioners are taking an unfair hit and seen as a biased target for tax increases.

From a tax perspective, a potential UK Budget policy to increase income tax by 2p while decreasing National Insurance (NI) contributions by 2p would negatively impact pensioners who are not in employment. As pensioners do not pay NI on their retirement income, they would face the full income tax hike without the offsetting NI cut that would benefit working people.

The Impact on Pensioners

Increased Tax Bill: A pensioner with an income of £35,000 could see their annual tax bill rise by around £450 under such a proposal, according to analysis by AJ Bell. A pensioner with a higher income of £65,000 could pay over £1,000 more per year in tax.

Worse Off Than Workers: For a worker on the same salary, the change would have a neutral impact, as the income tax increase would be balanced by the NI cut.

Vulnerability of Pensioners: This change would primarily affect pensioners and landlords, who do not pay NI on their income, making these groups the main contributors to the revenue raised by the policy.

Paddy - read it again, it clearly stated it was an observation, there was no crap there at all. I sense a nerve has been hit. As to baiting, then I am potentially in good company with others here on the forum.