Member Info for Montecristo

Ma

Lets not forget the role the Japanese will play in all of this.

You might have to change that Chinese for some sushi and sake wine bubble. You know what they say about when in Rome lol

Whether they are investing in us or taking over, either way it's a win win, rejoice dear fellow shareholders our day in the sun is a coming!

Irwin clearly thinks it's news.
Obviously a promising development if you ask me.
These guys look to be sitting around a table in Equador with the minister talking about investing in Cascabel.
How can anyone put a negative spin on that? Maybe they have become institutionalised in fear following this company.

Having read through today's posts, it looks like massive and strangely Bozi too are clearly not very happy about the news,

The thing is, everyone else has to listen to the nonsense.
I'm not a big fan of filtering because it makes most threads non sensical most of the time if several posters are participating.
If you are both over 20 I would be
Seriously concerned

Massive
Now you have made loads of money, why not do everyone a big favour and pisa off.

UK
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Aviva, M&G and other blue-chip life insurers can withstand short-term shocks, says analyst
12:38 Thu 29 Sep 2022
Oliver Haill
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Aviva PLC
LSE:AV.
Aviva PLC -
Aviva staff

Falls in life insurers Legal & General Group PLC (LSE:LGEN) and Aviva PLC (LSE:AV.) since the misfiring mini-budget have been driven by news about margin calls for UK pension schemes but UBS analysts played down the risks for the listed companies as "manageable".

Since chancellor Kwasi Kwarteng's fiscal announcement last Friday there has been a sharp rise in long-term UK interest rates and a weakening of the pound versus the US dollar, which has resulted in the UK life insurance sector underperforming the wider insurance sector and the market, the analysts said.

The life insurance sector saw one of the largest share price drops on Wednesday, with L&G and M&G PLC (LSE:MNG) both down 16% over the past five days, Phoenix Group Holdings PLC (LSE:PHNX) 12.3% and Aviva also 12%.

Margin calls and collateral
News about UK definite benefit pension schemes facing margin calls on liability driven investment (LDI) strategies drove the sell-off, as falling gilt prices caused mark-to-market losses that would have required much-increased collateral cover.

Pension schemes use interest rate derivatives to protect against interest rate falls and/or to match long-term liabilities, which are in-the-money when interest rates are low but after the sharp rise in interest rates, floating rate payments increased, requiring pension funds to post large sums of collateral.

Initial estimates of potential margin calls for the pensions industry are greater than £1bn since the budget announcement, driven primarily by the recent rise in interest rates, but analyst Nasib Ahmed said insurers "hold greater liquidity buffers to withstand short-term shocks, in our view".

"Whilst life insurers also use similar techniques to manage market risks, we see margin calls and liquidity impacts as relatively more manageable for our coverage," said Ahmed, while also adding it was "positive" for the sector that the Bank of England stepped in with its emergency bond-buying program to stabilise the gilt market.

As life insurers do have large sums of liabilities on their balance sheets and invest in derivatives to hedge interest rate, currency and inflation risk, the analyst said while he does not see negative impacts from collateral calls from higher inflation, he does expect some collateral calls due to interest rate and forex hedges.

Noting that there are over 5,000 pension schemes in the UK, some smaller schemes are "potentially lacking expertise and/or assets to adequately manage liquidity risk", the analyst said.

But for the four blue-chip life insurers, "we see margin calls on interset rate swaps as most onerous for liquidity positions given collateral is typically posted as cash".

"Margin calls on FX hedges can be met with corporate bonds (depending on the

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https://www.ft.com/content/a5106b84-ca28-4e81-99f8-0106322afc11

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LDI: where’s the exposure?
If you answered UK life insurers, award yourself half a point

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Bryce Elder YESTERDAY
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We’re all now experts on liability driven investment strategies, of course, so let’s cut to the chase. Where should we be looking for wreckage?

The search so far has been focused on UK life insurers with big asset management divisions, such as Legal & General. That’s in part because figuring out direct individual exposures to gilt-mageddon will have to wait for the next round of annual reports, unless problems are big enough to force pension fund trustees into an early announcement.

For the insurers, there’s a straightforward read-through via sharply higher bond yields on their collateral requirements for interest-rate derivatives. Jefferies illustrates:

Simple, right? Well, yes and no.

The first challenge is getting a handle on the scale of the problem. The Pension Protection Fund estimates that defined benefit pension assets account for about £1.56tn as of end August. Around three-quarters of that’s invested in bonds, according to industry analysts, so that’s £1.16tn. About half of that’s in UK linkers, with a quarter in conventional gilts and a quarter in corporate bonds. Big numbers.

But to reiterate for the umpteenth time, solvency isn’t the issue. For a well funded scheme with a gilt benchmark (which describes most of them), higher yields are good. Future liabilities are discounted at higher rates. Solvency ratios improve materially.

The issue is that the LDI strategies are (by design or accident) anti volatility, and even a well-funded scheme needs to meet its margin calls to survive. Here’s Morgan Stanley:

Pension schemes will be active in a combination of the following:

• Buying gilts on repo

• Buying gilts on TRS

• Receiving Sonia swaps

• Buying inflation swap

• Using gilts as collateral and buy other assets

The common denominator of all those activities is that they are long UK duration, long inflation risk and long leverage. The latter means implicitly that they are short volatility. And this i

exposure

Good article in FT on lgen exposure.
Looks like no hit directly on lgen

Kat
How lucky you are a born Brit, you can actually criticise the British government.
Imagine if you were in Russia and criticised the Russian government lol
You would be in prison now.
Yes a truly great country lol. Sorry can't stop laughing.

Kat
I'll come into your home uninvited, we can then sit down and negotiate how much I keep. And that's without any bloodshed or destruction.
I can get pro Russian but let's grow some brains along the way.

Casapinos
That's a good explanation, thank you. In your opinion, do you think L&G have been financially hurt because of what has been happening over the last few days?

You can't get that much for confetti, so probably had to put his hand in his pocket instead

So why were some pension companies close to collapse today?

Fort
I thought that everyone knows, if you cap wages and raise tax you lose productivity and investment.
Guess some will never get it,dispite of thousands of years of economic history.

There are going to be a lot of top quality British companies going for a song potentially, not just solg .

Even though we are going through a difficult time it's worth remembering the entire marker is under stress too.