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From today's Manx Independent.

The IOM Government will have to borrow money on the open market to pay out compensation to the KFS clients, if it is to honour its promise to pay any compensation within a two month period. So much for the taxpayer not bailing out the Banks

 

That is not what it says. The paper says that the scheme manager (the FSC) has the power to borrow money either commercially or from government if it wants to speed payouts up. It does not say the government will "have" to borrow money in the open market. The government could attempt to use its reserves to lend to the scheme or, in a worse case scenario, it might have to go to the open market to raise the money to lend to the scheme.

 

As a AAA (currently) rated jurisdiction it could do a bond issue or otherwise to raise the money although I seriously doubt people are queuing up to lend to tiny Island states that need the money because a bank has gone tits up. Even more so now we have damaged our own credibility as an offshore centre by the way this is being handled.

Edited by oldmanxfella
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As a AAA (currently) rated jurisdiction it could do a bond issue or otherwise to raise the money although I seriously doubt people are queuing up to lend to tiny Island states that need the money because a bank has gone tits up. Even more so now we have damaged our own credibility as an offshore centre by the way this is being handled.

 

Not forgetting that the CRAs themselves no longer have any credibility.

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Seeee - I was right they cannot afford it! :P I've been questioning all this interbank lending and selling of debts in general for years, it's fairly interesting. I haven't got a clue what is going on really.

 

You lot seem to know about it all and the ultimately complex maths required to understand it soooo, here is a little mathsy question I was thinking about earlier,

 

What is the probability of getting 3 people to take a turn each of splitting a deck of cards one after the other (re-stacking only after the third pick) and getting 5 kings in a row? We figured 1-12 wasn't right, due to there being less cards after the first split but then it got a bit complicated so I designed a portable atom splitter. /shrug :)

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Seeee - I was right they cannot afford it! :P I've been questioning all this interbank lending and selling of debts in general for years, it's fairly interesting. I haven't got a clue what is going on really.

 

You lot seem to know about it all and the ultimately complex maths required to understand it soooo, here is a little mathsy question I was thinking about earlier,

 

What is the probability of getting 3 people to take a turn each of splitting a deck of cards one after the other (re-stacking only after the third pick) and getting 5 kings in a row? We figured 1-12 wasn't right, due to there being less cards after the first split but then it got a bit complicated so I designed a portable atom splitter. /shrug :)

 

It's a bit more than 1 in 12. My estimate is something like 1 in 880,000.

 

 

S

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Questions.

 

How many of you have a mortgage of over three times you annual earnings.

 

The answers to this question will constitute a completely unrepresentative sample, and tell you nothing useful whatsoever.

 

Will you be adversely affected by the removal of mortgage relieve next year.

 

Every tax-payer who benefits from mortgage relief (note the spelling) will be adversely affected. How could it be otherwise?

 

Question.

 

What was the point of these apparently pointless questions? (Note the question mark, which by convention always follows a question.)

 

Could it possibly be that you yourself have an excessive mortgage, and have been unable to work out that the withdrawal of mortgage relief will cost you money?

 

S

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Questions.

 

How many of you have a mortgage of over three times you annual earnings.

 

Will you be adversely affected by the removal of mortgage relieve next year.

 

Where do you get your information from? As I understand it they are trimming relief back not taking it away altogether.

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Questions.

 

How many of you have a mortgage of over three times you annual earnings.

 

Will you be adversely affected by the removal of mortgage relieve next year.

 

Where do you get your information from? As I understand it they are trimming relief back not taking it away altogether.

ITS GOING

 

 

Questions.

 

How many of you have a mortgage of over three times you annual earnings.

 

The answers to this question will constitute a completely unrepresentative sample, and tell you nothing useful whatsoever.

 

Will you be adversely affected by the removal of mortgage relieve next year.

 

Every tax-payer who benefits from mortgage relief (note the spelling) will be adversely affected. How could it be otherwise?

 

Question.

 

What was the point of these apparently pointless questions? (Note the question mark, which by convention always follows a question.)

 

Could it possibly be that you yourself have an excessive mortgage, and have been unable to work out that the withdrawal of mortgage relief will cost you money?

 

S

No, have not got that problem, bought at the right time. But do you not think that the current crisis was caused by the so called know it all generation who bit off more than they can chew. Banks have been told lies by people declaring a higher income in order to get a mortgage (Panarama) now the banks want their money back, you cant blame them, can you?

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ITS GOING

 

On what basis do you say this? Options were put out for consultation some time ago and stopping it altogether was not one of the options offered.

 

Edited - if true I'll be leaving the IOM as the only reason I have a bigger mortgage than I would like is because of the totally artificial property market the governmernt have stood back and watched over the last 15 years.

Edited by hboy
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ITS GOING

 

On what basis do you say this? Options were put out for consultation some time ago and stopping it altogether was not one of the options offered.

 

Edited - if true I'll be leaving the IOM as the only reason I have a bigger mortgage than I would like is because of the totally artificial property market the governmernt have stood back and watched over the last 15 years.

 

From the Independent UK newspaper, but you could also ask the taxman yourself.

 

 

The island's property market growth has been modest: prices have risen from 4 per cent to 7 per cent a year since 2000.

 

The new tax breaks for the super-rich have certainly not gone unnoticed by the island's not-so-super-rich, who have just been told that the Manx treasury is also to scrap tax relief on their mortgage and loan interest, a move affecting 14,000 people. This will boost the island's coffers by £11.6m - a helpful windfall for a government which will reportedly lose £20m when the zero rate of corporate tax kicks in.

Edited by Lee54
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From the Independent UK newspaper, but you could also ask the taxman yourself.

 

The island's property market growth has been modest: prices have risen from 4 per cent to 7 per cent a year since 2000.

 

The new tax breaks for the super-rich have certainly not gone unnoticed by the island's not-so-super-rich, who have just been told that the Manx treasury is also to scrap tax relief on their mortgage and loan interest, a move affecting 14,000 people. This will boost the island's coffers by £11.6m - a helpful windfall for a government which will reportedly lose £20m when the zero rate of corporate tax kicks in.

 

Its totally wrong. They have killed loan interest relief not mortgage interest relief and there are no plans to remove mortgage interest relief. Knocking back the relief on limits was put out to consultation - but as i understood it it was to stop the buy-to-let wankers getting full tax relief on 3 mortgages and then living off the capital gains made from selling houses and thus living tax free at the expense of everyone else.

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The government could attempt to use its reserves to lend to the scheme

 

 

How are those reserves held ?

 

If it's in cash then fine, but if they are invested in a fund then their value will have dropped significantly

 

Thats a fair point - most of the long term funds will be equity based and I'd say based on client portfolios I've been dealing with will likely have been totally caned in the last 12 months. Sitting on a loss of 40-50% on a straight equity portfolio is not unheard of over the last year.

 

They call it the rainy day fund but the truth is its not only pissing down but simultaniously raining plagues of frogs, locusts, fire, brimstone and any other apocolyptical type of rain you can imagine.

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From today's Manx Independent.

The IOM Government will have to borrow money on the open market to pay out compensation to the KFS clients, if it is to honour its promise to pay any compensation within a two month period. So much for the taxpayer not bailing out the Banks

 

That is not what it says. The paper says that the scheme manager (the FSC) has the power to borrow money either commercially or from government if it wants to speed payouts up. It does not say the government will "have" to borrow money in the open market. The government could attempt to use its reserves to lend to the scheme or, in a worse case scenario, it might have to go to the open market to raise the money to lend to the scheme.

 

As a AAA (currently) rated jurisdiction it could do a bond issue or otherwise to raise the money although I seriously doubt people are queuing up to lend to tiny Island states that need the money because a bank has gone tits up. Even more so now we have damaged our own credibility as an offshore centre by the way this is being handled.

 

10,000 customers with £840 million in deposits and bearing in mind that KSF was used by mostly larger depositors because of the old Singer connection could well

mean that up to 80% could be claiming the full £50k compensation if their funds cannot be recovered. That would mean a liability of £400 million to the Isle of Man

compensation scheme where does IOM get that amount of money. Borrow it over 40 years because that is how long it would take to be paid back from the

current levy. They have only just finished paying out the relatively modest sums caused by the collapse of BCCI in 1991. Why will people leave their funds

in Isle of Man Banks with a far lesser amount of protection than elsewhere. I think HSBC is the only Bank on the Island that operates as a direct branch as opposed to

being in a separate company like NatWest Offshore or International that holds IOM Bank RBSI and NatWest and I think Lombard Finance if it is still around.

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