It must be a least a decade ago that Deputy Geoff Southern of Jersey and I both recommended that Jersey raise money to invest in new social housing on the island. It seemed to me back then that this was a perfect use for the type of bond that I had first proposed in 2003. The idea was, of course, ignored at the time. But a decade on things have changed. As the FT reports this morning:
Jersey, the British crown dependency and offshore financial centre, has tapped the capital markets for the first time, launching a sovereign bond to strong investor demand.
The AA+ rated island said that it was taking advantage of record low borrowing costs across capital markets to issue a £250m bond in order to fund a programme of social housing.
It's good to note Jersey has now taken heed of at least one of the ideas I have offered to it over the years.
The fact that it has done so now, at a time when I also predicted it would be running out of resources from its own tax revenues, upon which it said it would always rely when originally rejecting the idea, is just another point I could mention, but that may be indelicate.
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Housing finance bonds have been in existence for decades – Fannie Mae and Freddie Mac pretty much pioneered them.
Not in the UK they have not
And not issued by local authorities
They died in the early 80s – killed by the centralising power of Thatcher
Getting facts right helps
…and technically of course Jersey is not in the UK, nor is it a local authority – but it isn’t NEW JERSEY (home stamping ground of Fannie Mae) either.
It is little better than a glorified county council when push comes to shove
And the notion that we do not underwrite its liabilities is just wrong: we do
That’s not my understanding.
http://www.gov.je/Health/Travelling/Pages/VisitingJersey.aspx
You think that evidence?
I would refer you to consideration by the likes of the Audit Commission
Can you supply a link to the articles you are referring to.
If Jersey is in the UK as you think, possibly incorrectly. Why are they then, not in the EU???
Because they were specifically exempted from some aspects of the EU
But not the European Union Savings Tax Directive, Code of Conduct and other aspects. So it is not true they are not impacted
An excellent idea. Since it is win-win for Jersey and the investor you will of course be buying a load of these bonds?
I would not trust Jersey with a penny
‘I would not trust Jersey with a penny’
I’m pretty sure Jersey feel the same way about your own investment advice, given that 10 years ago, the government would have been issuing 40 year bonds at around 6%-7%, instead of the 3.75% they managed to actually issue at recently.
I apologise for not being clairvoyant
I realise it is a damning weakness that I alone suffer from
Nobody is suggesting you need to be clairvoyant, but I had a hope of even a begrudging acceptance that their financial position would be more parlous if they had followed your advice at the time ? (especially given your current propensity to offer advice on how people’s pensions should be invested in fixed interest assets at a time when even you must accept that the long term outlook for the asset class is not good)
That would have depended on rate and length of the bond wouldn’t it?
I can’t imagine it would have been 40 years – the market was not there for them then
So you make massive assumptions in what you’re saying when throwing allegations, and have not recognised the fact
You are absolutely correct when saying that duration would have affected the rate payable at issue. Perhaps you could identify the maturity at which it would have been cheaper to issue at 10 years ago when your initial advice was given, compared to the present day ?
No, I can’t
Because it is of no consequence now and you are wasting my time
That’s quite a step you’ve taken there. How by politely asking you to answer at what rate and duration things would have been cheaper am I wasting your time ?
I have explained my reasoning
Give me your full name and address and telephone number here and I may consider replying
If not, my reasoning is very clear and the evidence is your choice to demand information anonymously
Why do you want my name, address and telephone number ?
‘If not, my reasoning is very clear and the evidence is your choice to demand information anonymously’
I don’t really understand what you are asking here ?
Anonymous posting is trolling
I fele under no obligation to waste time on trolls
I’m as anonymous as Luke, Richard or James mac on this thread, or indeed many other commentators you allow on other threads. Why do you believe anonymity makes questions to you less valid ? Surely answering these questions merely allows you to demonstrate the depth of your understanding of the issue at hand, strengthening your arguement ?
You might think it’s as anonymous – but I see rather more than you do on screen and I can assure you – you look and behave like a troll and I have no inclination to waste my time engaging with you on what is an obvious and total irrelevance to which my first answer gave a perfectly adequate and comprehensive reponse
‘my first answer gave a perfectly adequate and comprehensive reponse’
If you quantify apologising for not being clairvoyant as an adequate and comprehensive first response, and characterising anybody who raises a difficult question as being a troll, then I assume we are not going to get any further in tapping your understanding of bond markets. Our loss I would imagine.
To a troll’s question that was a more than adequate response
I could have quite reasonably deleted it
You are a very strange man
But at least I own up to who I am
That’s more than you do