In short, it'll be very nasty. But this is small beer compared to some of the debt time bombs that are ready to go off around the rest of the world.

''One of the world's leading economists has urged Gordon Brown to reject "fiscal fetishism", defy the markets and maintain, or even extend, the fiscal stimulus of the British economy. Joseph Stiglitz, who won the Nobel Prize for Economics in 2001 and has served as chief economic adviser to President Clinton and chief economist at the World Bank, warned that the financial markets were like a "crazy man" that could not be appeased with cuts to public spending.''

Rightmove's latest index shows that 32% more surveyors reported price rises than falls - up from +30% in December, and better than the predicted +27%. However new enquiries from potential buyers fell for the first time in 14 months, while the number of new sellers entering the market fell for the first time in seven months. “House prices are likely to rise in the short term, but if more supply continues to come onto the market, it is possible that the market will run out of steam” said Rightmove.

Posted by little professor @ 04:26 AM 8 Comments

Wait for the pop!

This analysis suggests that the entire stock bubble since 1980 was just that, a bubble, and it is all about to pop. 1,000 on the DOW anybody? Really, the whole thing has been a bubble since 1971 when the US dollar dumped the gold standard. This didn't only affect the US, because most countries have the majority of their reserves in the dollar, so, it wasn't the US that came of the gold standard, it was the entire world. They have a choice now, deflationary depression or hyperinflation to bide time. I think they want a war to distract, history has that every time, but can they get away with it now that we have the internet to expose the necessary false flag event?

Mortgage banking remains hooked on taxpayer support in a way that most would say is unhealthy. Via the Special Liquidity Scheme, our banks have dumped mortgages on the Bank of England in return for Treasury Bills (the equivalent of cash) worth £178bn; and the Treasury has guaranteed fund-raising by banks to the tune of £134bn through a Credit Guarantee Scheme. In effect, that is £314bn of credit provided to mortgage providers by us, by taxpayers. The Bank of England wants its money back by 2012. What do you think would happen if we demanded all that money back tomorrow? It's doubtful that a single new mortgage would be approved for some time. Which is why the recent recovery in the supply of mortgages and in the housing market looks somewhat fragile.

Posted by little professor @ 09:29 PM 6 Comments

"U.S. prime jumbo mortgages at least 60 days late backing securities reached 9.6 percent in January from 9.2 percent in December, the 32nd straight increase for “serious delinquencies,” according to Fitch Ratings".

"Britain took a battering in the financial markets today as investors concerned about a looming debt crisis in the UK dumped risky assets". IMF say "Britain in a similar situation to Greece & Spain" "Unless you can persuade the markets you're really going to bring the budget under control in the foreseeable future you're going to have big trouble.”

Another possible danger: Because Canadian banks typically reset adjustable-rate mortgages every few years, those who are buying now at low rates will likely see increases soon. Toronto-Dominion Bank forecasts suggest that the rate to which many Canadian mortgages are pegged, the prime rate, could nearly double by the end of 2011. The Bank of Canada warned in its December report that if interest rates increase as expected, by mid-2012 about 9% of Canadian households could have so much debt that they'd be "financially vulnerable."

Johnathan Davies speaks to Jeremy Vine about the state of the economy (on air @ 1.47)

Posted by happy mondays @ 04:28 PM 18 Comments