BBC: UK debt judgments at 10-year-high

The number of County Court Judgments (CCJs) against consumer debtors has reached its highest level in almost 10 years.

RTE news: House prices dropped again in April

Average house prices fell again last month with buyers paying almost €2,500 less than buyers in March, as interest rate increases and continuing uncertainty about stamp duty reform impacted demand.

Firstrung: House prices show one of the highest annual increases in two years - Land Registry

Although the rate of monthly increase is slightly less than the previous month, the change of 0.6 per cent raises the average house price to £179,935 in this month. The annual change in house prices is 9.1 per cent. The data for this month continues to show one of the highest annual increases in almost two years. A year ago, in April 2006, the annual price change was 4.1 per cent, less than half the 9.1 per cent annual price change in April 2007...

FT.com: Rate rises damp eurozone mortage lending

Mortgage lending growth in the 13-country eurozone has slowed to the lowest for more than three years as higher interest rates begin to bite, according to European Central Bank figures. [...] banks were also reporting declining demand for home loans, “reflecting a major deterioration in housing market prospects”. Unlike other central banks, the ECB gives money supply data a prominent role in its interest-rate decision-making.

Guardian: Landlords sell-off property as demand dries up

"Experts say slower employment growth and rising rental costs have scared away potential tenants, encouraging nervous landlords to sell up"... and if the experts say so...

BBC "News": House prices 'still accelerating'

In desperation the BBC has resorted to trumpeting about areas where prices have gone up, Brighton and Hove being the latest. They are loathe to mention "the rest of the country" where prices are declining according to estate agents. Those journalism graduates at in Television Centre in White City must be getting desperate ...

Seattle Times: China's run-up echoes U.S. dot-com era

Chinese stock markets crash. Their companies search around for cash to try and keep Chinese investors happy... which has been leant out to fund the UK housing market. No more cheap loans.

1mortgagesuk: Consumer confidence not affected by last interest rate rise

According to latest figures the underlying growth in retail sales remains strong, with just a slight decrease in monthly sales in April.

Daily Mail: Nation of mortgage slaves among Britain's young couples

Massive mortgages are turning a generation of young couples into wage slaves, it has been claimed. A report warned that the spiralling price of housing means Britain is in danger of becoming the "grossly divided" society of have and have-nots not seen since Victorian times.

Fool.co.uk: Buy-To-Let Boom Isn't Over

I found this rather bullish piece a little depressing. I do hope they are being really foolish about their analysis here….

Yahoo News: Landlords look to sell as rates rises

Blinded by greed, these folk are now looking for the exit. I say let them take the loses rather than a legit home buyer...

Daily Telegraph: Investec buys UK's sub-prime biggest mortgage lender

Investec, which is best known in the UK for its investment banking division, said that its "stronger balance sheet, access to lower cost of funding, and capital markets expertise, together with Kensington's recognised brand, established distribution, innovative product range, prudent risk management and track record for service excellence, create a strong combination for the growing non-standard mortgage marketplace."

Daily Telegraph (Online): Rents soar as rate rises squeeze buy-to-lets

RICS economist David Stubbs said ... "with borrowing rates now at 5.5pc and rising, most buy-to-let mortgages were costing comfortably more than a landlord could hope to make from the rental." Say it all really. I wonder what will happen next?

Daily Telegraph: Planners are ruining our cities

The article explores rationale behind the supply-side of the demand-supply equation in housing. Normally I would read it and not post it but there were so many comments about Planners and planning yesterday that I thought it would be appropriate. Scanning yesterdays comments on planning, the majority appeared to suggest a desire for less [none] involvement from planners and more freedom of the market to produce homes people wanted to live in. Faren__451's comments summed up nicely. But clearly we know nothing because we're not the unelected experts in Town Planning; the State will provide everything for us simple, ignorant, proles! How dare I suggest otherwise!

Firstrung: First time buyers face being priced out and a life of 'economic serfdom'

Britain's housing crisis is threatening the future of younger generations, new research has found. Academics from Aberdeen and Loughborough universities discovered potential 21st century homeowners were more likely to stay with their parents for longer. The global credit boom and historically low interest rates have left many people in the UK facing either years of indebtedness or little hope of ever accessing the property market...

Herald: Australian housing dream blown

The great Australian dream has never been more expensive, with housing affordability at a record low. New quarterly figures from Australia's peak building body show first-home prices have skyrocketed in the past year, taking affordability to its lowest level since records began 23 years ago.

Herald: More people going broke

Personal bankruptcies are accelerating at twice the rate they were last year, despite a booming economy and record employment. Figures show individuals going to the wall at the rate of 30,000 a year -- up from 13,000 a year just 10 years ago.

Times: Mortgage slowdown triggers house price fears

It is going to be a landslide... a carnage... Fionnuala said: “In our view, the talk of rates climbing to 6 per cent are overblown and if implemented in the current climate, could be damaging to housing market stability" what s she talking about??... where is the demand, the short supply, the divorces, our tiny overcrowded island... awash with Russian money.... Fionnuala, the market is as solid as a brick, what do you worry about?

Times: From a rich man’s game to retirement scheme for the masses

A disgusting piece of bad journalism still encouraging to invest in BTL for one's pension "the demise of the first-time buyer, as more young people are priced out of the property market, is good news for landlords" and "they are worth well over £120 billion, contributing £30 billion to the economy each year, according to ARLA".... are these b@****ds contributing to the economy???!??!?

AGE: Bringing down the house

More than 20,000 small investors have lost almost a billion dollars in collapsed property schemes. Helen Westerman and Ben Schneiders report on the plague sweeping Australia.FOR many Australians, property is in the blood. Of all investments, it seems the most tangible, the most understandable.But waking to headlines heralding the collapse of Estate Property Group and its finance arm, Australian Capital Reserve, this week must have seemed like a recurring nightmare

Times: Thousands of buy-to-let face tax shock

The most read and commented article in the UK online press today was the piece on the HM Revenue and the BTL tax evasion. Read the 100 comments posted by readers!

SMH: First home payments hit $3000 per month

About half the increase is due to last year's three interest rate rises, which added almost $200 a month to repayments on a $400,000 loan. Mr Gallagher said bankruptcies had risen 12.5 per cent in the nine months to March."You could go back 10 or 15 years, when bankruptcy numbers were 13,000 a year, and now they are 30,000 a year," he said.

YouTube:http://www.longislandbubble.com/: Our Economy Right Now

Show this to all the "Bulls"-Hitters who believe that high house prices are a result of something other than monetarism.

SMH: Housing market slump lasting longer than predicted

But they face the reality that the recovery will not happen until at least 2009.

Bloomberg: S&P/Case-Shiller Home Prices Fell 1.4% in March, Index Shows

Nationally, home prices fell 1.4 percent in the first quarter from the same period last year, the fist decline since 1991.

Bloomberg: Home Construction Bust May Last Until 2011, U.S. Builders Say

New home construction in the U.S. may take until 2011 to return to last year's level, said David Seiders, chief economist for the National Association of Home Builders in Washington.

Firstrung: Higher interest rates subdue mortgage borrowing - BBA

April figures for high street lending show that mortgage demand is moderating in the face of rising interest rates.April's gross mortgage lending of £17.3bn was 12% more than in April 2006. This largely reflects 10% annual growth in house prices and strong re-mortgaging activity...

BBC: UK businesses feel 'more upbeat'

Even though the majority of firms are upbeat about the future, KPMG said that two-thirds of the businesses surveyed would prefer interest rates to remain where they are. LOL... I love comments like that...they're great, and also very useful... Also German consumer confidence up... http://news.bbc.co.uk/1/hi/business/6691771.stm

Firstrung: Immigrants not to blame for housing crisis - Shelter

In response to Margaret Hodge's comment on the allocation of social housing in the Observer "A message to my fellow immigrants" (20 May 2007), Adam Sampson, chief executive of Shelter, said:

Firstrung: Why the economy is nothing like a brick, Soft landing? Wishful thinking

John Stepek - Moneyweek.com covers a lot of ground in todays' newsletter; the economy, interest rates, buy to let and the volume of negative property related articles in the mainstream press to name just four subjects. If there is a finer commentator than John, for explaining Economic matters in a simple non patronising way to our readership, then we've yet to find him or her. When John is on form he's a delight to read, nice work John...

Guardian: Gazing into the property crystal ball means looking as far away as China

Forecasting house prices, let alone averting a crash, is getting ever more tricky

Independent: BOE Chews over food prices in face of rising inflation

Another case where the BOE, hijacked by Blanchflower is loosing complete control of the economy.

heraldsun: Family investors lose $300m

A HIGH-risk property investment scheme has collapsed, owing mum and dad investors more than $300 million. Estate Property Group and its investment arm Australian Capital Reserve called in administrators yesterday.

Daily Telegraph (Online): For sale: too many flats, not enough houses

Funny old thing, a Government policy that has caused a balls up, this time from John Prescott. His policy has resulted in over supply of flats because too many homes had to be built per acre. More government involvement and more cock-ups. If the price of flats falls through the floor, will it drag the price of 3-bedroom houses with it?

1mortgagesuk.co.uk: Mortgage lending slows slightly in April

According to figures released by The British Bankers Association mortgage lending went up by 5 billion in April. This figure is less than May which was 5.1 billion.

Telegraph: For sale: too many flats, not enough houses

The Torygraph blames a focus on brownfield sites for a lack of family sized units, for skewing the market. Would concreting the countryside make any difference to the market's current bias towards BTL investors who want small flats?

Independent Newspaper: Stephen King: Defending the great prize of price stability

King argues that failure of other major economies, such as America and China, to take money growth into account will unduly effect inflation in places like Europe, where, he argues, it is given more weight. King says that Europe will raise interest rates regardless, because, whilst it isn't fair to be burdened in this way, Europe will not let price stability slip.

Times: Thousands of buy-to-let families face tax shock

HM Revenue & Customs has identified 80,000 landlords who may have claimed too much tax relief or have failed to declare the amount of rent they receive from the property, or a capital gain made on the sale of the property.

YouTube: BBC London Special Report Part 1

More food for thought..

BBC: China's stock market hits record

A correction is due?!!

Reuters: Blanchflower says another rate rise not certain

"I felt it was important to let people know that we were on the case and that inflation expectations have to remain anchored." At last

Firstrung: House prices grew slightly in May as interest rate rises begin to bite - Hometrack

"The steady ratcheting up of interest rates was bound to take its toll eventually, we expect the headline rate of growth to slow relatively quickly over the rest of the year towards 4% as affordability pressures put a continued squeeze on purchasing power and more supply comes onto the market."

Firstrung: Boomers contribute billions to society

Far from being a drain on society, older people are huge contributors to the economic and cultural wellbeing of their nations, according to the third annual HSBC Future of Retirement study...Conducted with Oxford University's Oxford Institute of Ageing, The Future of Retirement project surveyed 21,000 people in 21 countries and territories.

Daily Mail: Costa catastrophe

"When Steve and Cate Biddle attended a seminar run by property expert Inside Track, they thought they had found a way of paying off their mortgage before they retired in five years' time. It did not work out like that. This week they will put their home on the market in a desperate attempt to clear their debts." Unfortunately for Steve and Cate might want to read the following "This increase [in homes for sale] comes at a time when there are signs of wavering demand in the face of higher interest rates," said Richard Donnell, of Hometrack. "And it raises the question as to just how saleable these properties will prove to be." Oh dear, we shouldn't have been so greedy should have we!!!!

propertysnake: 161,000 reduced prices

interesting website probably trawls rightmove?....not sure..anyway does also show that there are affordable properties in uk albeit places you might not want to live

Daily Telegraph (Online): House prices on their way down

I recall the comments on May 13 which 'gonged' the start of the decline in house prices or perhaps it was the empty cheap red wine bottle being dropped? Either way, this article is the first I recell which reports prices ARE declining, as opposed to those which report they MIGHT BE declining. I wonder if we are at a false-cliff, caused by the failed introduction of HIPS, and which will be ignored over the next months? Time will tell but an article worth reading to remove those Monday blues.

Times: Housing market appears to be slowing sharply

Where are the buoyant demand and the scarce supply, the planning restrictions, the immigrants and the divorcees? Evaporated in a second... obliterated by the IR rises! “We expect the headline rate of growth to slow relatively quickly over the rest of the year towards 4 per cent as affordability pressures put a continued squeeze on purchasing power and more supply comes to the market. Hometrack reported that an increasing number of homes were coming on to the market as vendors in London and the South East sought to cash in on strong market conditions"

Guardian Unlimited: UK housing market hits tipping point

Britain's property market is now at a turning point, according to research by property website Hometrack. It says house prices have stagnated or fallen in almost two-thirds of UK postcodes this month, as rising interest rates squeezed cash-strapped buyers out of the market.

Times Online: Prepare for mortgage rates at 8 per cent

Rising interest rates

The Times: Because we're worth it

The boomers have poisoned the wells and ploughed salt into the fields. Their post-war idyll is over; the world is returning to its default mode of confrontation and violence, now made more ominous by looming catastrophes like global warming. In the midst of their success and greed, the boomers forgot Edmund Burke’s most imperishable insight – that society is a contract with three interested parties: the dead, the living and the unborn. Their children are paying the price of their amnesia. For the moment, they seem resigned, but, soon enough, they’ll want their world back.

Sunday Times: Hell is buying a house

The Organisation for Economic Cooperation and Development has warned that UK property prices are among the most stretched of any major world economy, and that the housing market in Britain is overvalued by up to 65%. Surely something’s got to give because how - and where - are people supposed to live?

Mail: Warning over 100% buy-to-let

"Specialist buy-to-let broker Landlord Mortgages has said that only experienced landlords with substantial portfolios should GAMBLE on a property where rent only just covers the mortgage" A lender recommending caution? Using the G-word? But we all thought property is the safest bet!?

Torygraph: Word on the street

You may remember I predicted that this would be the year the housing boom came to an end. More specifically ...

spitting image: our house parody

go on, have a laugh.

Times: Mortgage rate blunders cost borrowers thousands

Sure banks used to rely on these "innocent mistakes" to round up their profits... expect increased lending spreads and upfront charges... end of cheap credit? Look at the comment in tomorrow's Times "Dirty, rotten banks"... wow! what a headline!

The Sunday Times: Buy-to-let: do the sums add up?

Banks are raising the threshold for would-be landlords, in effect pricing them out of the market,

Independent Newspaper: Hamish McRae: Inflation has gone global - and hiking our interest rates won't make much of a dent

"it (Data coming in) would certainly be consistent with another rate rise next month or the month after. Assuming that happens, expect some heat to come out of the housing market." (Quote)

Financial Times: Rate rise puts brakes on investment property sales

Anybody who has done the calculation on BTL recently will know that its very hard to justify renting the average £250,000 1 bed flat in London. £375/week required on a 6% mortgage with 30% slack for voids and maintenance, given that there are plenty of rental flats for 200 to 250/week. Add the risk of interest rates and the investment is fanciful. There are some bargains still to be had, but tend to be limited to local authority. Eventually these will also be unviable if house prices keep rising.

Finfacts: Irish house prices to fall

Another bullet proof housing market in the process of tipping over. I hope you lot are keeping an eye on the US market, its getting worse and worse......

Times: End of house price boom is in sight

David Smith is hedging his bet "If I’m right that a housing slowdown is in the air, then what we will see in the coming months is a sharp slowdown in house-price inflation, in direct response to the interest-rate hikes we have seen, and in prospect"

Telegraph: Prices to hit 12-year high says CBI

Economists have put the chances of 6pc interest rates this year at one in three, after fresh signs emerged that the Bank of England has lost control of prices and the Organisation for Economic Co-operation and Development (OECD) said Britain has the worst inflation problem in Western Europe. Enough said.

FT: Is BTL still a good investment?

Interesting but very biased. I am also posting other more balanced FT links in a comment.

The Economist: The great wall of money

China's economy may be less vulnerable to a bursting of the stockmarket bubble than it appears

Firstrung: Is shared ownership the only way onto the firstrung for many first-time buyers in the future?

Shared equity and part-buy, part-rent schemes will be the only way many of tomorrow's first time buyers will be able to afford a home, according to a group of housing experts who met in Manchester recently. The National Housing Federation is calling for the government to invest more resources in flexible home ownership schemes to help people on salaries of around £25,000 to £30,000. Speaking at the conference of Affordable Home Ownership Providers, Helen Williams, assistant director, National Housing Federation, said: "To hope for a fall in house prices is unrealistic in the current housing market. Shared equity deals or part-buy, part rent schemes are the only possible way most low to moderate earners are going to get on to the property ladder

daily mail: house prices 65% overvalued

good article showing economists talking reality economics.demand is speculative and supply is NOT a problem for home dwellers-just speculators.House of cards

Rightmove: Living in the Garden of England (Thanet Excluded)

Check out the first entry on the Rightmove database for Kent. Just a mistake, or one of the ways that estate agents can claim house prices only ever go up? I'm not surprised if houses like this are included in the figures?

BBC: US home sales figures fall back

Existing homes sales in the US dropped by 2.6% in April, making it the ninth month in a row that the volume of non-new build homes fell. The National Association of Realtors (NAR) said that the pace of monthly sales, at 5.99 million units, was the slowest since June 2003.

Jeremy Vine on Radio 2: Housing market crash

Jonathon Davis, aka 'Financial Planner' (the founder(?) of HPC.co.uk and a regular on the forum) talks to Jeremy Vine about HPC and even the guy speaking up for property investors agrees that (a) prices go 'up and down' and that it's a good time for buyers to wait..! Fast forward one hour and start listening after the 1pm news.

CNN: Homes: U.K. went cold; U.S. could too

Market sentiment can change in a matter of days, weeks... a vintage article from 2005 shows how volatile the UK house market perception is, seen from the other side of the pond. Folks, the party has only been postponed, but no doubt crash will be!

This is Money: House prices 'are 65% too high'

The housing market in Britain is up to 65% overvalued and needs further interest rate rises to cool it, say international economists...

FT.COM: UK growth endorses rate rise UK growth endorses rate rise expectation

The UK economy grew by 0.7 per cent in the first three months of the year compared to the previous quarter, the Office for National Statistics confirmed on Friday. The second reading of UK gross domestic product, which includes estimates of expenditure, was in line with forecasts. It supports the Bank of England’s assumption, expressed in the minutes of its May monetary policy meeting released this week, that the UK economy is enjoying robust growth. Compared to the first quarter of 2006, the economy expanded 2.9 per cent, revised up from 2.8 per cent.

The Observer: Iran interest rate cut sparks panic selling

Yes Mr Bush this is what happens when you cut interest rates when inflation is on the up and your is currency weak. Just thought you'd forgotten how an economy works that all.

Guardian: Petrol to hit £1 a litre within weeks as oil supply strains show

The last hope by the MPC to avoid further IR rises is gone with the oil prices going back to the levels of 2005. The good thing is not so much that rates are going up, but that they will stay high for a while.

Times: Back to the ’burbs

Apart from London, city centers are saturated with BTL properties, yields s@ck and properties do not sell. Is this the end of the BTL craze? BTW, I noticed the Times has a new email address buytolet@sunday-times.co.uk Are they advising BTLers? Do they have a similar service for FTBers?

Firstrung: London house prices to be hit by over supply Savills

The anticipated increase in supply could hit prices in some parts of London, according to research by Savills. Whilst a very limited supply of unsold new homes in inner London has pushed prices to new levels, Savills' London Residential Development Survey suggests that the anticipated increased supply levels, particularly in the East could have an effect on future values...

BBC News: Killer banana rumour grips China

"A rumour spread by text message has badly hit the price of bananas from China's Hainan island.....The messages claim the fruit contains viruses similar to Sars". It reminds me of a rumour I heard about how you can get AIDS from having a mortgage - so, don't buy property!

Guardian: Online

Guardian warns against possible HPC from monetary tightening

London Evening Standard: Houses 'are priced 65 per cent too high'

The housing market in Britain is up to 65 per cent overvalued and needs further interest rate rises to cool it, international economists have warned. The Organisation for Economic Co-operation and Development revealed that UK property prices are among the most stretched of any major world economy.

BBC Newsnight: Newsnight's "Do we need a housing market crash?"

In case anybody missed...........the Newsnight programme on "do we need a housing market crash?". The politicians predictably tried to pass the blame to each other - the Labour minister says that Tory councils restrict planning - the Tory spokesman says its a government strategy failure - Yawn! Two things struck me while watching this programme. 1. Stephanie Flanders' comment about the current bubble merely "transfers resources from people who would like to have owned houses in the future to those that own them right now......or from people who don't vote to people who do". 2. the estate agent's assertion that their job is to get the "most amount of money" for their clients. As I see it, current wannabe homeowners have left themselves without a voice, and are getting screwed as a result.

BBC News: Hips delay could hurt the pocket

Delay to Home Information Packs could cause serious financial problems for people training to be home inspectors. One home inspector explains what the delay could mean for him and his fellow inspectors.

The Telegraph: The very real dangers of over-compensating

Interest rates tend to take between 18 months and two years to have their full effect on the economy. This means that we are still feeling the effects of the Bank’s controversial decision to cut rates from 4.75pc to 4.5pc in August 2005.

No one doubts that inflation remains a significant threat to the economy, but there seem to be very few voices warning that the Bank is in danger of overcompensating and lifting borrowing costs that little bit too high.

The biggest risk of all is, as ever, the housing market. One tweak too many will send many households into the red, and could topple property prices. Economists are always loth to mention it, but the threat of a housing market crash is still as real as ever

BBC Newsnight: Newsnight Homepage

Interesting report and debate on the problems and causes of high houseprices in the UK. You can watch it on this link by clicking on "latest programme" though you have to sit through the Tony Blair interview first! The comments on the discussion board a worth a read too.

Reporton Business: What's the meltdown price for uranium?

A little known fact is, that nuclear, like oil, is peaking, i.e. supply is falling below demand, and total world stocks are are reaching a point of decline. This has a very long term impact on inflation and gives insight into how the world economy as a whole, rather than just sectors like oil, are unsustainable. Governments are still relying on old economic models, which are outdated once the planet's resources become depleted. This inflation problem has the issue of sustainability and environmental limits at its core. It questions those who think that the current period of fiscal tightening will recede by 2009. We all know that house prices can't sustain their current level if interest rates remain high for more than couple of years.

Daily Mail: Two more interest rates on cards 'by August'

Let's hope the Mail, for once, is right!

Mirror: Interest Rats

Good to get this into the mainstream.

Telegraph Online: Prices to hit 12-year high says CBI

Edmund Conway reports BoE has lost control of inflation and quotes the OECD "Britain has the worst inflation problem in Western Europe." I still don't believe this dose of reality and suspect the MPC will not raise interest rates beyond 5.75% this year because the outlook for inflation will show it returning to 2% +/- 1% and Crash Gordon won't let them. Question is, when should I cash in my PEPs/ISAs and put the money in an alternate investment vehicle - don't want to get caught by the falling stock market.

www.cbsnews.com: Bush: If Iraq Says Leave, "We Would Leave."

President Bush said today if the Iraqi government were to ask the United States to leave Iraq, he would grant the request. "We are there at the invitation of the Iraqi government. This is a sovereign nation. Twelve million people went to the polls to approve a constitution. It's their government's choice,’’ the president said during a Rose Garden news conference. "If they were to say leave, we would leave."

Guardian newspaper: Petrol heads for £1/a litre

The data is coming in thick and fast now.

TELEGRAPH UK: Fines for families who throw out too much

Large families who fail to recycle most of their rubbish will face a "fine" of £30 a year under Government plans to cut waste unveiled today. The Government is looking at introducing lockable dustbins to prevent "waste wars" between neighbours dumping rubbish in other people's bins.

tt.com: US fears over China long-range missiles

The US is increasingly concerned about China’s deployment of mobile land and sea-based intercontinental ballistic nuclear missiles that have the range to hit the US, according to people familiar with an imminent Pentagon report on China’s military China is moving at a pretty rapid pace to becoming a military contender,” said a senior US official. “The pace has impressed people [in the US].”

BBC News: Oil price at $71 nine-month high

So, Mervyn expected in his calculations that oil would settle to around $40/barrel, well, I'm not an economist, and even i thought that was barmy, news is coming in thick and thin now about how commodity prices will shape economic prices for a good while yet. Maybe the bank should hope for the best but plan for the worst. It seems that they have planned for the best and hoped that the worst wouldn't happen.

this is money.co.uk: What next for city house prices?

Looks like Sunderland is not such a sunny place afterall. £200k for a 2 bed room flat, would you Adam and eve it?

Times online: US house sales soar on dive-bombing prices

Number of new American homes sold booms in April but only after the biggest drop in prices since 1970 housing crisis Sales of new US homes rose a higher than expected 16.2 per cent in April, but only on prices which fell a record 11 per cent, their fastest decline in 37 years, according to a government report today. The figures the fastest rise in numbers sold in 11 years, showed that house builders were having to offer massive discounts to offload unsold homes.

financial sense: Why a Chinese monetary tightening could be followed by a global depression

China is facing the essentially same dilemma today as America did in 1929. The United States in the 1920s flooded the world with liquidity in order to hold down a fundamentally strong dollar and prop up a weak pound at the behest of Britain’s central banker, Montague Norman, and a Treasury Minister named Winston Churchill (who failed at everything he did in public life before winning World War II). China has been similarly accommodative until recently to support the weak U.S. dollar, despite making heroic efforts to “sterilize” these dollars. But some of the liquidity inevitably found its way into the Chinese and global economies, helping to bring about torrid (and probably unsustainable) double-digit percentage growth in China

Financial Times: UK mortgage lending growth slows

UK house price rises and mortgage lending growth is moderating as recent interest rate increases take their toll, reports released on Monday showed.

FT.com: UK manufacturers optimistic on prices

UK manufacturers’ optimism that they can force through price rises is at its highest for 12 years, the CBI said on Thursday. The employers’ body said that its latest survey of industrial trends showed the balance of producers who expected to push up prices over the next three months was 25 per cent in May. This was up sharply from a balance of 16 recorded in April and was the highest reading since March 1995. Analysts said the evidence of rising prices at the factory gate would be of concern to the Bank of England.

BBC News: US home sales up as prices slump

Sales of new houses in the US in April rose to a 14-year high, according to a government report. The number of single-family homes sold leapt 16.2%, ahead forecasts and making an annual rate of 981,000 units.

FT.com: OECD warns on risk of higher inflation

The world’s central banks should “err on the side of tightness” in the face of inflationary pressure, the Organisation for Economic Co-operation and Development said on Thursday. In its twice-yearly Economic Outlook, the Paris-based organisation urged central banks, with the exception of Japan, either to raise interest rates or take their time before cutting them, because of strong domestic demand which had increased the the risk of higher inflation.

Newsnight: Do we need a housing market crash?

In his 1997 budget speech Gordon Brown said, "I will not allow house prices to get out of control". Ten years on and they have spiralled leaving thousands of people unable get onto the first rung of the property ladder. So do we now need a crash in the housing market to level the playing field once more? Are crazy house prices creating a new generation of renters unable to buy? Send us your experiences - have you been priced out of the market? Or have you done well out of the boom and long may it continue? Let us know below and we'll discuss the issues and put some of your points to the government and a select panel on tonight's Newsnight. Please post your comments and questions directly to their blog.

Bloomberg News: US New Home Sales in April Jump by the Most in 14 Years

Purchases of new homes in the U.S. unexpectedly jumped in April by the most in 14 years, a sign low lending rates and incentives may be reviving demand. Sales rose 16 percent to an annual pace of 981,000 last month from an 844,000 rate the prior month that was less than previously reported, the Commerce Department said in Washington. The supply of unsold homes at the current sales pace dropped.

Financial Sense: Sydney's Housing Disaster

This long, but appropriate, article highlights some important issues overlooked by many people amid rising house prices. Central is the way the author questions the idea that people suddenly all feel more rich because the house at the end of their street sold for a premium. Unrealised gains are just that.

times: China's rocketing markets

China’s stock markets are roaring to record levels as millions of small investors bet their savings in a frenzy of speculation. But there is a danger the markets may overheat and even crash with unforeseeable consequencesThe mania for shares among Chongqing taxi drivers is likely to rattle western investors, who remember that the temporary slump in Chinese equities on February 27 set off a global rout in capital markets at a cost of more than £1,000 billion. “Trading hours coincided with my shift so I gave up my cab,” Lin Huaqiang, a driver, told a local reporter who discovered that more than 100 cabbies had followed his example.

Times Online: OECD warns of danger of Chinese stocks collapse

OECD warns of danger of Chinese stocks collapse Influential global think-tank says it will be hard to limit effects of 'marked correction' to the country's stock markets alone The warning came on the back of Chinese stock market that has risen 55 per cent since the start of the year and more than tripled in the past 17 months. It followed remarks night by Alan Greenspan, the former US Federal Reserve chairman, who warned of the risk of a "dramatic correction" in Chinese share prices and said recent gains were unsustainable.

moneyweek: Get ready for a 6% UK interest rate

Last night, we got an email from Capital Economics outlining when the bust will begin. The economics consultancy, headed up by Roger Bootle, had previously foreseen a gentle slowdown. But it now reckons that “the commercial property market is no longer likely to avoid meaningful falls in capital values over the next few years.” The group thinks prices will fall by 4%-6% in both 2008 and 2009, with further falls in 2010, meaning that, over those three years “total returns at the all [commercial] property level will be approximately 0%.”

The Times: Government considers £1bn sale of waterways

The Government is considering a billion pound-plus sale of the country’s canals and waterways.

Guardian: Barclays profits jump 15%

Sweat hard, risk your pensions, live in a dream... but have no illusions, it is not you who are profiting from it!

The Times: Tramp wins a Hampstead Heath home

A tramp who squatted for 20 years in one of London’s most expensive suburbs has been awarded the deeds to a plot that could be worth £3 million. Harry Hallowes, 70, now owns the 60ft-by-120ft site on Hampstead Heath in North London, after a three year legal battle. He has lived there in a tiny shack since 1986. Mr Hallowes said: “This has been my only home for 20 years. I absolutely love it here. I always expected to be given the deeds."

Times UK Business: Uk's biggest sub prime lender set to accpet cut price bid

What have we here? I do suppose that those accounts are a true and accurate reflection aren't they?

Times UK Business: Hawkish MPC minutes put 6% interest rate on cards

Well about time too, now my savings will get a better rate of return - if the banks pass it on of course and they will have a lot of bad debts to provide for. .

Telegraph: Four-beds become three in HIP fiasco

Estate agents said that they would be recommending all sellers of four bedroom houses to re-market their homes as three-bedroom properties with an extra study or reception room. This would allow them to avoid paying for a £600 pack and save the time tracking down one of the few qualified inspectors.

Safe Haven: The Hard Facts about Parabolic Spikes

On April 16th Greg Weldon, of Weldon's Money Monitor, cited a report from the People's Bank of China revealing the largest growth of commercial lending in China's history. In the fourth quarter of 2006 China's commercial loan volume was 425 billion Yuan. During the first quarter of 2007, it topped 1, 423 billion Yuan, a 335 percent increase in 90 days! How likely is this performance to repeat for several more quarters?

Forget about China keeping the world economy going when the US stalls

The Asian Times: A strong dollar and US interests

A readable article which suggests the US policy toward the dollar truly is disconnected between what ought to be in the country's interest and what current policies promote. Policies are promoting a weaker dollar and higher inflation; one idea why is Bernanke's desire to avoid deflation, see " ... the Fed is rather concerned that a credit contraction combined with high levels of consumer debt could create a Japanese-style deflationary spiral; to avoid having to deal with deflation, the Fed should induce inflation." Higher inflation will erode debts for the US - convenient. Will inflation come to the UK? If it does, will the MPC choose to erode debt too? Author is Axel Merk, a portfolio manager of the Merk Hard Currency Fund.

BOE Barker: Low Rates Key Reason For UK House Price Gains

"You wouldn't immediately assume that a fall in interest rates would make housing less affordable," Kate Barker said. "It would, of course, raise prices, but given people wouldn't have to pay as much for their mortgages, they'd still be able to afford them." Disgusting example of "Labour-nomics". The sooner we rid of these jokers the better.

BBC: Greenspan fears China market fall

Exponential speculation or un-tapped wealth?

Independent: Hamish McRae: Don't blame MPC for steering rates up, global liquidity is the backseat driver

This is the first time I can recall Hamish McRae stating the garden may not be full of roses afterall. An interesting article which highlights the need for higher interest rates due to global pressures.

telegraph.co.uk/money: Honda tells UK: join euro- zone or else

Honda's president Takeo Fukui has threatened to cut off future investment in Britain unless the country joins the euro, admitting that the Japanese car producer had made an "error" building its car plant in Swindon.

TELEGRAPH UK: Chinese maids play the markets

This analyst - whose name I know but have agreed not to mention, largely because he is afraid of upsetting his wife - is among the more respected commentators on China's markets, but while the benchmark Shanghai Composite Index was soaring 130% last year, he saw a personal return from his share portfolio of just 5%. Worse still, among the millions of Chinese who were playing the markets and winning, our analyst found himself outperformed by, of all people, his family's maid.

Telegraph: Microchips in dustbins spy on three million

Britain is the only major European country not to have separate charges for refuse collection. But there are fears that any new system could cost an average of £20 a month for each home. massive concern over the disappearance of traditional weekly refuse collections. The Daily Telegraph revealed last month that about nine million people now had to put up with collections every two weeks.

mwhodges: US Total Debt 48 trillion

Total US debt in 2006 was $48 trillion (460% of national income); the debt ratio in 1957 was 186%.

These figures are higher than other estimates - but the message is the same

FT: Fears over food price inflation

Retail food prices are heading for their biggest annual increase in as much as 30 years, raising fears that the world faces an unprecedented period of food price inflation. Prices have soared as the expanding biofuels industry, climate change and the growing prosperity of nations such as India and China push up the costs of farm commodities including wheat, corn, milk and oils. Food companies have started passing on these increases to consumers, but the prospect of sustained commodity price rises means the industry’s profits could be hit as it is forced to absorb the higher costs itself.

The Times: Banks' bonus boom time looms again

It seems the super size mortgage slaves have now been long forgotten by the MPC who must now concentrate all of their efforts on the City to control inflation and cheap credit which is driving private equity deals and hedge funds etc. The property market seems to be a sacrificial lamb. Mint sauce anyone!!

Firstrung: Britain takes the silver medal in 'debt Olympics'

UK $8,280,000,000,000 from 66 Million People US $10,040,000,000,000 from 300 Million People World $44,610,000,000,000 from 6.6 Billion People Oh Yeah!!!

Firstrung: HIPS debacle; "a mess, farcical, ridiculous, madness" - Ministers credibilty destroyed

Mike Ockenden, director general of the Association of Home Information Pack Providers, says: This latest decision is at the cost of the consumer and the environment. It appears to have been RICS, through their call for a judicial review, which has ultimately derailed this vital house buying and selling reform, so soon before its planned implementation. Consumers will have to endure the existing, broken house buying and selling process for at least a further two months, costing them time, money and unnecessary stress.

Firstrung: Ombudsman of Estate Agents (OEA) see complaints increase by 41% in 2006

The number of enquiries about estate agents to the Ombudsman for Estate Agents rose to 8,472 in 2006, an increase of 41 per cent from 2005. This resulted in 586 cases being referred for formal review and resolution, an increase of 18 per cent over 2005 in a year that saw OEA membership rise by 52 per cent to 7,666 offices, but still below the peak of 615 in 2002, when membership was only 4,251 offices

FT.com: Bank considered half-point rate rise

Chewing over what might have been, but at least they considered it: The Bank of England discussed a 50 basis point increase in interest rates at this month’s monetary policy committee meeting, minutes released on Wednesday showed. “This is a hawkish set of minutes that point firmly to another interest rate hike before long. Even the persistently dovish David Blanchflower was convinced of the need for higher interest rates in May,” said Howard Archer at Global Insight. The minutes showed that some committee members thought that because a 25 basis point increase at the May meeting was considered a given by the markets it may be necessary to deliver a firmer jolt in the form a one half of a percentage point.

MoneyWeek: Another classic property U-turn from the Government

Home Information Packs have now been delayed until the beginning of August. Could it be that Gordon Brown wants to delay any disruption to the housing bubble until after he becomes PM?

BBC News: UK rate rise decision 'unanimous'

The Bank of England's decision to raise interest rates by a quarter of a point in May was unanimous, minutes of the rate-setting meeting show. Lingering inflation risks prompted the unanimous decision to hike interest rates to 5.5% - taking the cost of borrowing to six-year highs this month.

Telegraph: First-timers feel 'the big squeeze'

"We have had seven years of renting, which means seven years of dead money, so it is nice to know we are working towards something solid, our own bricks and mortar"... bet they are paying much more in bank interests now, without taking into account the forgone interests on their 10k deposit. "Yet they count themselves hugely fortunate to be just-haves"...?!

Safe Haven: DEARTH OF CREDIT

Since the high of 5.18% on February 23 the 3-month treasury bill has plunged to 4.74%. This is beginning to look like rather a fast move that senior central banks will dutifully follow.

As we noted in December 2000, interest rates going up indicates that the boom is on and that falling rates indicate the boom is over.

What's more, the bigger the boom the more dramatic the decline in short-dated interest rates.

FT: Private equity elite to face grilling by select committee

5 of Europe's top buy-out execs face a public political grilling on June 20 after being summoned to appear before the influential Commons Treasury Select Committee inquiry into private equity.

BBC: Home info packs 'to be delayed'

The introduction of controversial Home Information Packs is set to be delayed by Communities Secretary Ruth Kelly.

Firstrung: LMS ready to roll out HIPS having pre-sold 150,000 packs

LMS has revealed it has pre-sold more than 150,000 Home Information Packs (HIPs) ahead of the 1 June implementation date. The provider claims the packs are in strong demand by brokers, lenders and estate agencies keen to be ready for 'H Day'...

Times: Interest rates put brake on house prices

Article by property cheerleader, Judith Heywood, tries to find some bright spots in a pretty gloomy market. "Slower growth in these areas is being masked by the continued outperformance of the London market, up 1.4 per cent to 24.8 per cent in a year" "Chelsea rose only 3.4 per cent in that time, although over a year it has been the capital’s star performer, with prices up 75.7 per cent." Judith, wake up... it's all over!

Reuters: Faster UK money supply growth bolsters rate hike bets

"Britain's broad measure of money supply rose at its fastest annual pace in six months in April, boosting expectations that interest rates still have further to rise" It's not the only factor the BOE look at when setting rates, but it's got Mervyn's attention...

Hot Property: Location key as London scout hut sells for £400k

Apparently sold more for the land than anything, but there's also a few links to other crazy prices for things entering the market: "A luxury house boat with panoramic views of the Thames recently entered the UK Property market for £650,000." Well, if it's *luxury* it must be worth it...

Firstrung: A staggering 884,000 people claim to have put their properties on the market in the past three months in order to avoid paying for a HIP

New research from Spring, a home information pack (HIP) and property information provider, reveals that a staggering 884,000 people claim to have put their properties on the market in the past three months in order to avoid paying for a HIP. These become compulsory from 1st June 2007. The company warns that this rush of homes on to the market could lead to an increase in property prices.

BBC Scotland: House price surge 'could be last'

The surge in Scottish house prices in the last quarter could be followed by a slowdown, an economist has warned

The Times: Surprise fall in mortgages raises fears of an imminent slowdown

Peter Newland, of Lehman Brothers, said: “All in all, leading indicators of housing activity – including approvals and the Royal Institution of Chartered Surveyors sales-to-stock ratio – have started to hint at a peak in housing activity, although it may take some time before this feeds into house-price measures, and it is unlikely to be much cause for concern for [monetary] policymakers.”

Firstrung: Pensioner property rises in value by £41.5 billion in Q1 2007

Homewise Pensioner Property Equity Index has revealed the value of pensioner property has risen by £41.5 billion over Q1 2007. The Index showed that equates to a collective increase of around £461.49 million every day. According to the retirement finance and property specialist, the nation's 6.3 million retired homeowners have each gained on average around £6,553 in property wealth since January. Over the past 12 months a pensioner can expect to have gained on average around £20,017 in the value of their home and the total collective worth of British pensioners' homes now stands at some £1.252 trillion.

Reuters.com:: BOC's Dodge-Unified N. America currency "possible"

Bank of Canada Governor David Dodge said on Monday it was "possible" there could at some point be a unified North American currency similar to Europe's euro.

BBC News: Housing takes toll on US economy

The slowdown in the US housing market will hit the country's economy harder than previously thought, according to a group of economic professionals.

The Sydney Morning Herald.: Toxic soup on Games menu

China wallowing in the toxic by-products of its lightning economic expansion, prompting fears for athletes and tourists who will travel there, as well as the Chinese population.Chronic water and air pollution caused by industrial toxins and pesticides mean cancer has risen to be China's leading killer, accounting for 23 per cent of all deaths, it emerged yesterday. it was revealed that 40 of China's top athletes fell ill because of foul air-conditioning in the country's sports headquarters in January and have been forced to withdraw from the competition.Filthy air-conditioning systems have been blamed for outbreaks of disease in hotels and apartment blocks in the capital.In one case, two tonnes of waste, including dead rats and takeaway food left by construction workers,

BBC News: Music giant EMI agrees takeover

UK music business EMI Group has agreed to be bought by private equity firm Terra Firma for £3.2bn including debt.

The Times: Signs emerge that UK housing is off the boil

Mortage lending is falling and house prices are stabilising as the fourth interest rate rise in ten months begins to take hold

BBC: UK finances mean boost for Brown

The UK's public finances improved in April, providing some good news for Chancellor Gordon Brown before he takes over as Prime Minister. Public sector net borrowing was £1.1bn, against £2.8bn in April 2006, said the Office for National Statistics (ONS).

FT.com: Kuwait abandons peg to sliding US dollar

Interesting implication in this article: "the country would revert to a basket of currencies to prevent the sliding dollar increasing the cost of imports, which has stoked inflation to more than 4 per cent" I'm no expert, but if a currency pegged to the dollar has inflation over 4%, does that imply tha US inflation is over 4% - and does that imply that UK inflation is similar? Few need convincing that CPI is a joke, (either side of the pond) but this may be a tangible indicator.

BBC News: Nigeria attack sends oil over $70

If this aint inflationary, then what is? As mentioned earlier, America has not begun her driving season, the hurricane season is yet to get underway, inventories are low, production is at a plateau, Iran is a tinder box waiting to explode and there is little sign that Nigeria will cool down any time soon. Could events combine this summer (or next) to bring oil above $80/barrel, with $5-10/barrel changes in a week relatively commonplace at the moment, why not $90 or even $100/barrel. This must be what King referred to when he seemed to imply that energy prices could create a situation where 5.75% isn't enough.

MoneyWeek: Why statistics get a bad press

Paragon Mortgages, buy-to-let specialists, sent out a press release last week proclaiming that all‘s well with the buy-to-let market. Apparently, in a recent survey, “almost a third of landlords said they were reacting to rising borrowing costs by increasing rents, while another 43% reported they are taking no specific action as a result of the interest rate rises.” That’s not all. “As further evidence of their confidence in the future, in the survey 12% of landlords said they were increasing their involvement in buy-to-let as a reaction to the rises in borrowing costs.” Wait a minute. Did we miss something here?

Washington Post: Oil Prices Rise Above $65 a Barrel

Brent crude for July delivery climbed 40 cents to $69.82 a barrel on the ICE Futures exchange in London. With the Northern Hemisphere's summer driving season set to begin in just over a week, energy traders have been concerned that gasoline supplies won't meet demand. A string of planned and unexpected refinery shutdowns have fueled such worries.

The US Federal Reserve: The Baby Boom: Predictability in House Prices and Interest Rates

Okay, so we have spent several years pondering the rising market and the market drivers responsible for it. Speculating on the speculation if you should like. It has been called greed and there has certainly been greed involved. Conspiracy theorems have been discussed and expounded at length and then rather boringly shattered by Lord Edward George’s admission that it was actually all on purpose. But what has caused the swinging market of this last half centaury to swing. This has been the era of the Boomers, and this is their Swansong.

The Economist: You should fret more about pension funds than banks

The main answer is the Basel 2 banking accord, due to be introduced next year. In terms of banking, it has plainly had a healthy effect: banks have strengthened their risk-management systems and spread their risks—so much so that many should be able to hold less capital against their loans. The danger, however, is that by focusing on the health of banks, the regulators have shunted problems into less supervised realms of the financial system, such as the pensions industry. If pension-fund trustees, with less experience than banks in judging credit risk, have allowed the wrong investments, the consequences would be grave indeed.

Add to this the fact we are about to resume a secular stocks bear for another decade. Also add in the baby boomers retiring from 2010 who will cash up.

BBC News: Brown will not block secrecy bid

Surprise Surprise - MPs put in place an exemption to hide details of their paymasters

Firstrung: Mortgage approvals fall by 8% in April

Commenting on the mortgage market, Adrian Coles, Director-General of the BSA said: "Gross advances were the highest April figure for three years. However, net advances were down slightly on the same month last year. Approvals (loans agreed but not yet made) fell by 8% compared to April 2006. This is the first year on year fall since July 2005 - the month preceding the last cut in interest rates

The Times: Bubbles are everywhere

Great article. Key points:

From US: By the end of March the amount of debt taken on by US investors specifically to buy shares totalled £318 billion. That’s more than in March 2000 – the peak of the tech bubble.

From US: Mastercard saw the number of transactions using its US cards rise by nearly 20% in the first quarter of 2007. That’s clearly not sustainable.

From Japan: From June 1, its standard mayonnaise will cost 10% more. To the outsider’s eye this may seem a trivial matter but, said Allum, it is not. It is the first time “any branded mass-market condiment has put in a price rise for at least a decade”.

The Scotsman: Big Yellow net asset value up

...Although the recent increases in interest rates and increased tax may have an impact on the consumer and the housing market, it still expected a steady build-up in its occupancy levels. "What happens when people do stop moving? ... They still make decisions. They decide not to move, but to refurbish. They need self storage or they just run out of space ... Storage has a significant number of drivers, not just whether or not house prices are going up or down," Gibson said. Around 50 percent of its customers are linked to the housing market, while 35 percent use it for lifestyle purposes and as a result of events such as moving abroad for a job, inheriting furniture or getting divorced or married...

Firstrung: House prices slow, numbers for sale rises as HIPS deadline looms

"Thousands of sellers acting together means more properties come on the market. Ironically, this increased competition coupled with this months increase in interest rates means sellers might have to accept a price reduction of much more than the few hundred pounds they have saved by avoiding the price of a HIP."

Independent: House information packs take toll on property prices

A tipping point?

Firstrung: House prices slow dramatically in May - Rightmove

Miles Shipside of Rightmove did warn that last months' figures were 'freakish' - the 3.6% rise in house prices for April did seem rather out of step with sentiment when considering the other data available. However, most housing market commentators could not have expected house prices to find a reverse gear so quickly, particularly in light of the fact that Rightmove are also reporting a record number of new properties advertised on their website in May, which should have inflated prices not deflated them so dramatically...

The Times: Foxtons puts up ‘Sold’ sign

The London estate agent has been sold for about £390m to private equity group, BC Partners, amid a slowdown in house-price inflation

BBC "News": Call for migrant housing rethink

Established British families should be given priority over economic migrants for council housing, government minister Margaret Hodge has said.

Cheers for that, Marge. How about housing for the rest of us too? And BTW, Des Browne whinged the other day about the state of armed forces housing, and the lack of affordable property for soldiers and their families.

How long can central government keep ignoring the issue we wonder?

BBC News: Soft-top Rolls lifts the lid on global wealth

Nice easy Sunday reading article with some interesting facts towards the bottom that reveal where some of todays house buyers mortgage money is ending up. "At the moment, a lot of our buyers are entrepreneurs, it's been in property in one form or another where many of them have made their money". Paradoxically, many a customer eager to whip the roof off his Roller became wealthy enough to buy one thanks to people's desire for a roof over their head." "They are extremely focused on value for money. Within their peer group, they like to be seen to be making the right decisions."

Observer: 'No firm is safe from private equity'

Economic stability was coming under renewed focus as central bankers warned this weekend that highly leveraged hedge funds were creating a risk to the global financial system.

RE TV: EU entry 'boosts Bulgarian property'

Bulgaria's house market sustained by rampant immigration, single household forming, and a shortage of constuction permits? Or not?... "Currently the majority of UK buyers in Bulgaria are purchasing purely for investment with only occasional personal use, however over the next five years we anticipate an increase in the number of people buying holiday homes both in the coastal and mountain areas."

BBC sport: England v West Indies 1st Test

"1205: Taylor's having fun out there, flicking Plunkett through mid-wicket for one and Powell grabs a single for himself. Taylor flays Plunkett down to long-leg for a couple and picks up another single with a tickle to leg. Anyone looking to buy in South East London? I put my house up for sale last week - it's a one-bedder with a garden in Honor Oak Park, near Forest Hill. Have a look on the link and see if you fancy it. Someone appears to have put a spell on the dinner table and chairs in the living room and made them a third of their normal size. Other than that it's a belter. http://www.findaproperty.com/displayprop.aspx?edid=00&salerent=0&pi

observer: observer.co.uk

reminder that all asset classes are going up...the only time in history this has ever happened...note the housing market views....think we are in for a big shock and we are nowhere near prepared for it.

Firstrung: Two thirds of pensioners will need state help to live comfortably

While some people may benefit from the annual increase in state pensions, more than two-thirds (68%) of UK retirees revealed that they would need more than Government handouts in order to live comfortably, according to a major new report commissioned by FTSE 100 life and pensions company Friends Provident.

Firstrung: Headline inflation rate only includes 70% of goods and services

The Government's headline inflation rate only includes 70% of goods and services in the average shopping basket, according to figures released by Alliance Trust Research Centre...In its ongoing study of inflation, the Research Centre has already found that the relevance of headline CPI varies greatly depending on consumers' ages.

the Independent: Rising high-street prices prompt consumers to tighten their belts

While retailers try to rebuild margins by hiking prices consumers are reluctant to spend, could they be feeling the pinch as the economy starts to run out of confidence and mortgage equity steam.

BusinessWeek: Chinese agency gives $3B to Blackstone

A new company being set up by China to invest some of its foreign exchange reserves has entrusted US$3 billion to U.S. private-equity company Blackstone Group, the China Business News reported Friday, citing an unnamed source.

MSN: How to use propery to rire rich

The 'enviable' tale of a lady securing her retirement through her wise buying in BTL. Sadly not a word (or number)about her debts blah blah...you get the picture.

Firstrung: London house prices rise by 33% in most expensive areas - Knight Frank

Prices of the best properties in central London have risen by over 33 per cent in the last 12 months, according to Knight Frank Prime Central London Residential Index...This is the fastest rate of growth since mid 1979 and means that prices in central London are now rising at three times the rate seen in the wider UK market.

Firstrung: Do the 'robust' sales figures for April make another interest rate rise in June inevitable?

Underlying growth in retail sales volume remains robust, despite a slight decrease in monthly sales volume in April...The volume of retail sales in the three months February to April was 1.2 per cent higher than in the previous three months. This follows 0.5 per cent growth in the three months to March and compares with an increase of 0.1 per cent at the same time in 2006.

The Standard: HSBC rings stock market warning bells

"The situation in Hong Kong is not any better, with retail investors coming to us [fund managers] asking for numbers [stock codes] all the time without even bothering to know what the companies' names are." HSBC executive director Peter Wong Tung-shun during a radio show.

the scotsman: outlook looks grim

yesterdays headlines again....

thisismoney.co.uk: Buy an Ikea flat pack home

Building work is due to start in June on the first UK development of BoKlok homes, designed by the Swedish firm best known for its furniture and a big hit in their home country. More than 2,000 people have registered their interest in the homes on the BoKlok website and the homes should cost between £90,000 and £120,000, with both full and shared ownership hoped to be offered.

Building: RICS surveyors trash a Mayfair hotel!!!

The London Marriott Hotel in Grovesnor Square has called in the police over £1500 damage and a fight that broke out at the Royal Institute of Chartered Surveyors annual dinner. The event quickly got out of control and by 9pm a competition had broken out between tables to see who could throw the heaviest thing the furthest. Attendees mashed up the lemon mousses to create a gelatinous mess, which several young men delighted in forcing other guests’ heads into. Clothes were then removed and underwear proudly displayed; the dance floor heaved with bodies, many in compromising clinches; tables were set alight and a fight is said to have broken out just before the police were called. RICS described the behaviour at the event as “disgraceful.”

Guardian: June 1, 2007: The crash begins?

Crash, mayhem, disaster . . . estate agents and surveyors were in full-on apocalyptic mode this week.

Financial times: Homebuyers are now at full stretch

Buy to let yields at 3.5, talks of a slow down, but the writer still believes that we need 7-8% interest rates to trigger a crash, this article sounds like an optimist who's been spooked and not come to terms with what the data is saying, the conclusion differs so much from the article title and analysis that I'm left scratching my head!

BBC News: Unleaded fuel hits nine month high

Analysts say the price rise is largely due to the gradual rise in the price of crude oil. On Thursday, Brent crude oil gained 3.3%, rising $2 (£1) to an eight-month high of $70.27 a barrel, due to fears that problems at US refineries, where output levels are already low, could constrict petrol supplies.

BBC News: BBC - House Prices report

Annual house prices up about 5% in the last year, but look at the figures, almost every region, county and sub-region is either falling or growing significantly slower in the last quarter, without the last two and the possible next interest rate rise being fed into the system. Did the January interest rate rise mark the beginning of the Bull market?

Guardian: Talk is cheap

We don't manufacture anything any more. Most of the world won't buy our records or watch our films. Only our gift of the gab is keeping Britain's economy ticking over. But how long can the hot air last, ask Larry Elliott and Dan Atkinson

Firstrung: House prices in Scotland show sharp drop in first quarter 2007

The average price for a residential property in Scotland decreased by 2.2 per cent in the last quarter (January to March 2007) and is now £139,836, according to figures released today by Registers of Scotland. This compares with a figure of £143,055 in the previous quarter (October to December 2006).

Home.co.uk News: Rogue landlords 'on the rack'

Tax-dodging landlords had better watch out - the taxman is about to find out who you are, where you live, and how much rent you charge... One little-noticed side effect of the new Tenancy Deposit Protection regime, which became compulsory a month ago, is that deposit scheme providers will be handing over to HM Revenue & Customs details of who is renting out property, reports The Guardian.

Times Online: Cheap at the price - Fractional ownership is a way of pooling the cost of a holiday home

"Fractionally owned homes are usually managed and maintained by a third party, to whom owners pay a handsome annual management fee." ... "If all this sounds similar to timeshare, there is one important difference. With timeshare you purchase the right to use the property for a number of weeks; with fractional ownership, you are buying the bricks and mortar" ... Semantics - guess who is making a packet, and since the market is CRASHING they are now passing on the PROFIT in building value .. err NOT I think. Its another way to con people out of their cash. How about a proper holiday under canvas ... and you can then packup your "house" and put it up again somewhere else next weekend.

Independent: Falling pay awards help Bank in inflation battle

The Bank of England was handed some much-needed good news on inflation today as figures revealed that pay settlements are falling. The average pay award in the three months to the end of April was 3 per cent, down from the eight-year high of 3.5 per cent recorded in the first quarter of the year, according to the pay experts Industrial Relations Services.

Telegraph: Spain risks crisis over vanishing reserves

Spain's foreign reserves have plummeted to wafer-thin levels, leaving the country exposed to a possible banking crisis if the property market swings from boom to bust - despite membership of the eurozone. The Banco de Espana's holdings of foreign currencies and gold have fallen to €13.2bn (£9.02bn), equivalent to 12 days of imports. Over the past two months the Banco de España has sold off 80 tonnes of gold, flooding the world market with enough bullion to dampen the usual spring rally. The bank has reduced its holdings of US Treasuries, British gilts, and other investments at a similar rate.

Guardian Unlimited: Spain feels the heat: UK investors left vulnerable as fears of a crash spread

Spain feels the heat: UK investors left vulnerable as fears of a crash spread "This is not good news for UK investors in Spain," said Diana Choyleva, chief economist at Lombard Street Research. "We have had over-investment on a gigantic scale."

BBC London: News article + video

I had to be one of the first to blog this!

Reuters: House equity crowds investment market

The property boom of the last 10 years has led to a dangerous over-reliance on property, the director of a major think-tank has warned.

the times: UK's second-largest mortgage lender says annual house price growth could fall from over 10.% to as little as 5% this year

Britain's housing market will suffer a sharp slowdown during the second half of the year, leading to average annual property price rises this year of as little as 5 per cent, Nationwide, the country's second-biggest mortgage lender, cautioned today.

TIMES: Nationwide forecasts house price slowdown

UK's second-largest mortgage lender says annual house price growth could fall from over 10.% to as little as 5% this year

Sell2Stay.com: Interest rate rises increase pressure on homeowners

Homeowners were dealt another blow recently when the Bank of England hiked interest rates to a six year high at 5.5 per cent as they struggle to keep inflation under control and slow down consumer spending. Millions of UK mortgage owners will be effected by the rise with their repayments rising by £60 per month on an average mortgage of £100,000 but this is not the end of rises.

www.find.co.uk: House prices: UK still leads the pack for overvaluation

There's more than one potential bubble in the making. There's China, Spain, consumer electronics, the stock market, and oh yes, house prices. This article summarises key arguments for and against a crash in the UK property market. Against crash: land is scarce, demand rising, the economy is in great shape, unemployment low, and mortgage payments as a percentage of income is much lower than in 1990. For crash: well, read the article Follow links from article to see why our growing tendency to buy champagne could hit interest rates much harder that economists are saying. Or go to www.find.co.uk/news/155383027 Also follow links to read about other bubbles. Nowadays everything effects everything.

The Independent: Hamish McRae: Let us hope a 7 per cent interest rate is a bridge too far

"What is the Bank - or indeed any central bank - more interested in keeping reasonably stable: the price of goods and services or the price of assets? I would say both. Excessive swings in both types of inflation are tremendously destructive socially, and eventually in economic terms too. The Bank, like most other central banks, has been very successful at the former task and an utter failure at the latter. Last autumn I warned of the possibility of 6 per cent rates. That fear is now commonplace. I am beginning to wonder about 7 per cent. Let's hope that really is a bridge too far".

Daily Mail: interest rates

interest and inflation

BBC Website: Old advert tricks property buyers

People rushed to buy a 4-bed house in Birmingam for £53K. Shows how far this madness has come...

BBC: Bank of Japan keeps rates on hold

Japan has kept its key interest rate on hold at 0.5% amid a recent slip in consumer prices.

Asian Tiimes Online: Liquidity boom and looming crisis

Sorry about posting 3 articles today but this one caught my eye and I'm away from IT for a few days. The Asian Times, (which has a slightly better quality journalism then UK rags) gives a good report of the world markets, predicting a downward trend for the US. "Now in 2007, a looming debt-driven financial crisis threatens to put an end to the decade-long liquidity boom that has been generated by the circular flow of trade deficits back into capital-account surpluses through the conduit of US dollar hegemony."

The Bank – at last – gets tough with inflation: The Murdoch Times

A longish article from Anatole Kaletsky, who isn't quite as big a Noshbag as D. Smith. Having condemned the BoE for being asleep on watch last month, he is now supporting its stance. Some realistic comment towards the end balances the article by highlight upside risks to inflation.

Telegraph Online: Bank attacked over rate mistakes

The base article in today's Telegraph which highlights the upside risks to inflation and suggests the BoE is too timid. Other articles are comment and journalistic analysis (probably written on a napkin in the pub then). These are at: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/05/17/ccom17.xml and http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/05/17/cconway17.xml respectively. All in all, worth a read but the Telegraph appears the only mainstream paper to be criticising the BoE in a MAJOR way. Will others follow?

Assetz: Buy-to-let may help with first step on property ladder

"It is possible to obtain a buy-to-let mortgage without needing to collect capital for a deposit as long as the investor is willing to shop around and drive a hard bargain. The buyer must first identify properties that interests them. Then, they need to negotiate with the owner or developer for a discount of around 15 per cent on the market value. This creates "instant equity" and the prospective buyer should hopefully then be able to find a lender who will advance them the money for a buy-to-let mortgage without any deposit."

Daily Mail: Bank of England warns of further rates hike

The Bank of England warned this afternoon that interest rates may have to go up again.

Times: Commercial property has peaked, LandSecs chief says

Britain’s runaway commercial property market has peaked, the head of the UK’s biggest property group said yesterday. The warning from Francis Salway, chief executive of Land Securities and in charge of assets worth £14.8 billion, will send shivers through the UK commercial property market, estimated to be worth about £710 billion.

Daily Telegraph: Blair's 'Fantasy Island' should face same scrutiny as company directors

"Neither Asbestos Anthony nor the Clunking Fist can look at a book without wanting to cook it (no wonder Jamie Oliver is the darling of Downing Street). They have debased and downgraded the machinery of administration. Official statistics are often little more than instruments of government propaganda."

Telegraph: Bank Hints at Further Interest Rate Rises

It seems merv is not so sure what is happening with inflation.

Wheatworks: "Not Since the Great Depression”

If you do a Google search for the phrase “not since the Great Depression” you’ll get about 2,600 results.

Some good ones include:
NSTGD has there been such a gap between rents and mortgages
NSTGD has there been this wide a gap between the rich and the poor.
NSTGD has so much corporate debt been of such poor quality
NSTGD have so few people controlled most of the country’s wealth
NSTGD have Personal Outlays exceeded Disposable Personal income
NSTGD were interest rates been held so low
NSTGD has America been so broke.

FT. Com: Commercial auction sales fall

"Private investors appear to be deserting the commercial property market as escalating prices and last week’s interest rate rise begin to bite. In figures released on Tuesday from Savills’ largest commercial property auction, a third of properties went unsold, significantly above the long-run average. At a smaller separate auction held by Colliers CRE on Monday, around two-thirds of properties could not find a buyer – a level not seen for at least a decade." “Property auctions are a fantastic barometer for the overall appetite for property in the market. It is the only public, instant picture of how supply and demand is changing, and when you see something not selling it’s as interesting as when it does sell well.”

Bloomberg: Mortgage Defaults Rise 62 Percent

The 2007 median price for an existing home likely will decline 1 percent to $219,800, the National Association of Realtors said last month, the first drop since the real estate group began keeping records in 1968 and probably the first decline since the Great Depression.

Firstrung: First time buyers buy to let mortgages....?

"Thin end of the wedge", "scraping the barrel" could be reasonable descriptions used in relation to this 'scheme'. This press release is worth a read in order to establish just how desperate some factions of the house building and mortgage lending industry have become...

Home.co.uk News: Londons wild ride on prices

Taken together, London and the SE account for 30% of the property in England and Wales. Exclude their growth figures and the remaining 70% of the property market in England and Wales is simply marking time with annual growth currently around a mere 3% per annum.

Guardian: Cerebral Brown has caved in. This is cynical Brown's work

Simon Jenkins article suggesting, among other things, that there should be more housebuilding and regeneration in existing cities like Hull and Swansea rather than building new ecotowns.

BBC News: UK Unemployment Edges Up

The number of unemployed in the UK has risen during the first three months of the year, official figures show.

BBC: Bank still sees inflation risks

The Bank of England has warned that inflation still remains a risk in the medium term, despite interest rate increases and a drop in energy costs.

BBC News: Bank Still sees Inflation Risk

The Bank of England has warned that inflation still remains a risk in the medium term, despite interest rate increases and a drop in energy costs.

dnbasa: Moody's lowers bank ratings following refinement of methodology

44 banks got downgraded by Moody due to people losing confidence is Moody's credit rating methodology

ICESAVE (Landsbanki Islands hf) was the worst hit - losing 3 notches

See comments for comparison of banks credit ratings

Bank of England: Inflation Report Press Conference Opening Remarks

Hot off the press these were the Governor's opening remarks at today's Inflation Report press conference. A reasonably balanced account of the variables that influence U.K. (official) inflation measures - though in my view too little is said about the risk associated with strong money supply growth. Seems like the Bank of England would need to recruit a few more monetarists going forwards.

BBC News: Home packs face legal challenge

Slightly tenuous but still interesting. The Royal Institution of Chartered Surveyors (RICS) said it would seek a judicial review because the government had not consulted properly on the law. There are concerns that there are not enough qualified people to carry out the inspections necessary for the issuing of energy performance certificates - a key component of HIPs.

The Telegraph: Spain risks crisis over vanishing reserves

Spain's foreign reserves have plummeted to wafer-thin levels, leaving the country exposed to a possible banking crisis if the property market swings from boom to bust - despite membership of the eurozone.

Telegraph Online: Families stretched by inflation

So, the level of inflation experience by the majority of people is higher then that given by the CPI AND RPI. This is not news to readers of this Blog. However: (1) What can be done about it. [The ONS risks loosing credibility if nothing is done]. (2) Do we think such an article will ever appear in a New Liebour publication such as The Times, The Sun etc. Until such article appear in the wider media, Edmund Conway will remain the lone voice in the wilderness.

The Times: Land Securities calls top of market

Britain's biggest developer says property boom is close to having run its course as profits fall 16% on flat revenue.

.express.co.uk: COUNCILS REVOLT OVER MIGRANT FIGURES 'CON'

With over half the immigrants flat broke, and living off the government the only way they will contribute to the housing market is through goverment subsidies being paid for by the tax payer.. Four councils have written to the Treasury to express grave concerns over “perverse” figures suggesting some towns and cities are haemorrhaging migrants when, in fact, the numbers are increasing. More councils are expected to join the wave of protest. Official figures claim that 60,000 migrants have “vanished” from London alone, including 8,400 in one borough where, according to the council, the number of East Europeans has soared by 563 per cent. Another council said that some 300 Eastern Europeans are arriving at just one coach station every day.

Bollard to tackle high risk bank lending: www.nzherald.co.nz

But the bank remains concerned that the longer the current housing boom lasts, the sharper the correction will be. Governor Alan Bollard and his deputy, Grant Spencer, made it clear the bank expected the housing market to go through some kind of "correction" at some point - probably a gradual decline in "real" house prices as sale prices failed to keep up with inflation, as occurred in the late 1970s, rather than a "nominal" decline, where actual sale prices fall.

Gold eagle: How the Kondratieff Cycle Might Play Out

Written in 2002, this is a good article examining Greenspan's options facing a k-winter. The key point is can the Fed create enough inflation to combat a deflationary depression. The author thinks this is unlikely. Well worth a read.

scotsman.com: House costs at crash point

We have reached the point for the first time in our history when our housing wealth now exceeds all other wealth. Housing wealth now stands at £3.8 trillion, while our other savings and investments amount to £3.5 trillion. In other words, if house prices were to come crashing down, we would all be vulnerable. "Homebuyers have been taking mortgages of up to seven times their salaries to get on the property ladder, which doesn't leave much wriggle room."

Telegraph Online: Home sellers flood market in panic over HIPs

Apparently lots of sellers are trying to sell their home before the HIPS debacle becomes law. Personally I don't buy it. Why would a seller who has made many thousands sitting on their backside be worried about a measly 500 quid. (Hopefully it will hurt BTL-ers though). Learned opinions please?

The Telegraph: The secret world of hedge funds

2 great quotes from the book.

"At some point, we will have the Big One. It's out there. I don't know whether it's financial asset depression, or a real depression. Financial assets can't keep doing what they're doing, with so many people rewarded for being imprudent"

"When you look at the whole world and see what it's built on, it is totally, clearly not sustainable. I get so bearish that I think about buying a castle in Scotland and moving up there with a couple of loaded shotguns and a truckload of canned food"

Express: House prices up 10% in year

The price of the average home has soared £20,000 in the last 12 months, official figures show today.

Market Oracle: US Recession in 2007 - Third Leg of the Bear Market Likely

Quote: "We believe "severe macroeconomic repercussions" are highly likely and that "banking system capital" will be impaired. Continuing from our previous article " Credit Extreme Emotion ," the comparison to the 1930-1933 period is striking. Stock market patterns, debt levels, interest rate cycles, sentiment levels, and banking reserves are all aligning for a credit crunch and major asset deflation."

Telegraph: Brown Promises More Housing

On this wet and miserable day just something to make you feel proud to live in this great country.

Market Oracle: Credit Collapse

Great article comparing events of 2007 with 1837.

Investors should remove investment risk from their portfolio by holding cash. But they should also be moving accounts to financially healthy institutions. Sometime in the near future, as in 1837, there will be a realization point that preservation of funds is paramount in a deleveraging economy.

Anybody know which banks are the safest?

CNN: Foreclosure rates still soaring

'Foreclosures continue to trouble real estate markets nationwide...'

BBC News: Sellers rush to beat home packs

Homeowners are rushing to put their property up for sale before the introduction of home information packs (HIPs) on 1 June, a report says. Take a look on the property websites and the evidence is there - the numbers of houses up for sale with no chain involved confirms the record. Looks like the BTL'ers are calling the peak - convieniently coinciding with the HIP legislation. This is likely to trigger the buyers market...and fall. Happy days!!

FT: BOJ Govenor Signals Rate Rise

I think that with the corrupt manipulation of Inflation In UK to keep IR's low (Below 8%) it may be another trigger for the price correction. From the US and/or the unwinding of cheap money and the carry trade. Inflation dropped to 2.8% because they double measured gas & had sales on furniture???? But food was up globaly and everything else we have to but????

Firstrung: Tories condemn Gordon Brown's Eco Town initiative as "spin"

Senior Conservatives have highlighted Gordon Brown's continuing capacity for spin, as Labour's would-be leader seeks to thrust housing into the forefront of his campaign to take over from Tony Blair...

Firstrung: House prices rise - RICS UK housing market survey April 2007

House prices rose for the eighteenth consecutive month in April driven primarily by renewed momentum in London, the South East and East Anglia. 28.9% more Chartered Surveyors reported a rise than a fall in house prices, up from 26.9% in March.

FT.com: Sub-prime woes weigh on HSBC arm

HSBC Finance Corporation’s quarterly net earnings dropped 39 per cent to $541m as the lender almost doubled its provision for credit losses, in a further sign of the deterioration of the sub-prime lending market in the US.

BBC News: Inflation slows to 2.8% in April

The UK's rate of inflation slowed in April after energy bills were cut, official figures have shown.

Money Week: Should you rely on property as your pension?

Merryn, you make a lot of sense to most rational individuals, but I'm afraid to say this advice will be lost in the ever increasing amount of bullish TV property programmes. "And as for getting into the buy-to-let game, either at home or abroad, to finance your pension, it might work but then again it might not. With prices at record highs and yields at record lows, few new investors are making any money on a monthly basis. They are therefore entirely dependent on making capital gains if their investment is ever to make financial sense."

TaxationWeb: Capital Gains Tax

There seems to have been a recent flurry of property CGT related questions appearing on this tax tips forum of late. Wonder why that is ?

Firstrung: Has inflation fallen enough to prevent another interest rate rise in June?

CPI annual inflation - the Government's target measure - was 2.8 per cent in April, down from 3.1 per cent in March. The main downward pressure came from average gas and electricity bills which fell this year but rose a year ago. There was also a large downward effect from financial services.

Telegraph Online: US economy faces massive impact as petrol prices hit all-time high

I thought before I posted this one. The US economy is facing a number of threats and then petrol prices suddenly rise - this may hit the US consumers' confidence. Link to Alan Greenspan's recent comments, see: http://www.telegraph.co.uk/money/main.jhtml;jsessionid=UL3A2YKIWU03DQFIQMFCFGGAVCBQYIV0?view=DETAILS&grid=&xml=/money/2007/05/11/bcngreen11.xml. I feel the risks to the US economy are increasingly on the down side. How will a recession in the US effect us?

scoop.co.nz: Fixing The Mess

What matters crucially is whether the recent actions of the Reserve Bank are creating (or aggravating) the very problem that they claim to be solving. Or is the Reserve Bank simply ineffective at dealing to the investment housing bubble that it claims to be addressing? Perhaps the first thing to note is that inflation in New Zealand is not a dragon; it's a pussy cat, safely under 3% as it has been for a while. Inflation is far from public economic enemy number one. Even in Zimbabwe where annual inflation is over 1000 percent, inflation is a symptom of an economic tragedy and not a problem in its own right. Interest rates need to be cut, by 0.25 percentage points every six weeks, until the $NZ is down to a TWI of 60 (which probably means about $US 60 cents).

bloomberg.com: New Zealand Dollar Gains as Higher Rates Entice Carry Trades

The strength of the New Zealand dollar, encouraged by higher interest rates, will tend over the long term to reduce the investment in exporters, Finance Minister Michael Cullen told Radio New Zealand today. ``The way in which it is operating is causing unnecessary stress on the export sector,'' he said. ``We've got exporters in significant trouble.''

Firstrung: Moving home costs on average £16,000 each time - Abbey

New research from Abbey reveals that we spend on average £54,400 moving homes in our lifetime, and moving home costs us around £16,000 each time we do it. Over our lifetime, more than 2 years worth of our salary will be spent on moving home...The average Briton moves home between 3 or 4 times in a lifetime (the average is 3.4 times) latest research from Abbey Mortgages shows. And it's a costly business.

Assetz News: Rising house prices are good news for the investor

House prices have continued on what seems like an inexorable upward path in the first few months of 2007 - something that spells good news for the buy-to-let sector. According to the latest official statistics from the Department of Communities and Local Government (DCLG), the average house price in the UK is now £206,890 - a figure that has risen more than £2,000 since February. The two groups of people hardest hit by the rise in house prices and interest rates are young professionals and first-time buyers. These represent a significant share of the BTL landlord's core market. An additional benefit from the investor's point of view is that increased house prices mean increased asset value. This means the potfolio owner who decides to sell is almost guaranteed a handsome profit.

Home: Asking Price Growth Slows

Update

Moneyfacts: Bank Base Rate - Effects of an Increase

How would a base rate rise affect you? Could you maintain your current lifestyle? Lisa Taylor from moneyfacts.co.uk comments on the effects a base rate rise would have on many consumers, especially those who have borrowed to the max and don’t have the comfort of a fixed rate mortgage.

FT.com: Assessing the cycle – is it really different this time?

A more domestic IDTT concerns housing. In the UK, we are assured that cyclical rises and falls in house prices are a thing of the past. Houses are in short supply, so prices can only carry on up. The fact that prices have also risen in countries with no supply shortage – and in some, such as Spain, now look like falling sharply – is rather glossed over.

BBC 5 Live: Wake Up To Money: Monday 14th May: Brown tackles housing market

So, after turning a blind eye for 10 years, he thinks he can prevent a crash and grab votes does he. Gordon Brown has put the growing number of people priced out of the housing market at the centre of his campaign to become prime minister. But, will it be enough to to make houses affordable?

Channel 4: Gordon Brown: Fit for Office?

Channel 4 programme "Dispatches" tonight profiles future Prime Minister Gordon Brown. Senior figures within the Labour party have accused Brown of being a "control freak", another said he was, "psychologically flawed" and one serving cabinet minister has said he would be a "f***ing disaster". Over a nine month period the Dispatches team have interviewed cabinet ministers, MPs, top civil servents, economists and friends to examine more closely the negative claims directed at the Chancellor and future PM. The programme is on Channel 4 8.00pm tonight.

BBC: The secret agent

Lying to customers, faked signatures, false passports and dodgy deals with developers. An undercover investigation reveals the secret world of estate agents' dirty tricks.

Home.co.uk: Asking price index

0.1% MoM 5% YoY

Home.co.uk: Home.co.uk Asking Price Index

No data yet. Must be taking longer to "factor" them. Future Release Dates 14 May 07 12 Jun 07 12 Jul 07

The Guardian: Albion Drive: a saga of modern Britain

Nice reminder of how far this bubble has inflated, and how property prices are not based on value - but are now in the realms of fantasy.

Stuff.co.nz: House prices 'overvalued by 20pc'

NZ ECONOMIES GDP LESS THAN Rio Tinto and BHP Billiton , THE CURRENCY IS ONE OF THE STRONGEST IN THE WORLD ONLY HELD UP BY INTEREST RATES, NOW THE GOVERMENT LOOKING FOR NEW WAYS TO CURB THE HOUSING MARKET The kiwi dollar is "massively overvalued" and will fall 7 per cent against the yen IN THE NEXT 6 MONTHS

Market Oracle: Analyst Warns of Potential Housing Market Crash

F&C Investments' Ted Scott believes a negative yield on property could lead to buy-to-let investors selling their homes as they can no longer cover costs - which would precipitate a housing market crash.

YouTube: Change of the guard

It has become clear that the current members of the MPC are incompetent. Maybe they should consist of these guys...

No Monkey Business blog: The housing ladder: what exactly pushes it out of reach?

This blog aims to provide professional insights into what really makes markets tick. In this post, I show how freeholds and very long leases normally involve over-investment, as the cost exceeds the lifetime benefits of ownership the ladder delivers. This excess investment has a value experienced as plugging a hole in pension saving or a bequest to heirs. Neither justifies having to pay more for property than lifetime enjoyment. Why are these arguments unfamiliar? I suggest it is because high inflation and discount rates meant earlier generations did not have to pay for the surplus 'duration' of the property. However, when prices are 50% above 'normal', as currently, this duration mismatch will not be the dominant factor for affordability.

Telegraph: Dear MPC: Can we get all facts on one day?

Jumbled article on UK plc that reckons interest rates have already peaked, mortgages lenders have overreacted by pulling fixed rate deals and reckons the April CPI figure will be sharply down because gas is cheaper! Takes no account of the overinflated property market and suggests that the MPC's decision, the CPI number and - once a quarter - the Bank's Inflation Report are all published on the same day.

timesonline: return to negative equity?

hsbc is first bank to turn away borrowers with little deposit on fears that recent interest rate hikes could spark house price falls.

Telegraph: Counting the Costa

Buy-to-let Britons are learning a painful lesson from their investment in the holiday rentals market. "There are strict conditions before properties are approved for rental to holidaymakers," says a spokesperson for the Spanish Ministry for Tourism. "Nearly all are not licensed, which means letting them to tourists is illegal." Londoner Tania Osbourne is appealing against a £20,000 fine for letting out her £200,000, two-bedroom flat on a complex in a popular Majorca resort. Tania, 63 explains: "I wanted the flat as a buy-to-let investment and the developer's sales director told me it had excellent holiday rental potential of up to £800 a week in high season. Now I've been hit by a £20,000 fine - far more than I ever made from the lettings.

The Times: Inflation to fall below 3%

INFLATION is set to drop back below 3% this week, easing pressure on the Bank of England. But analysts warn that it is too early to sound the all-clear on interest rates. Analysts expect this week’s figure to show a fall to 2.8%, on the way to a sharper drop to the 2% target level later in the year. The British Chambers of Commerce is assuming that the Bank will raise rates further to 5.75%, even though the organisation believes that would be overkill.

Torygraph Online: Brown to build 'eco-towns'

Another of Gordon's great plans. I wonder if it will be as effective as Tax Credits by trapping people in poor housng and removing incentives to do anything about it; or perhaps it will be like the NHS? Cost of administrative up by 4 times but no overall increase in productivity. This smacks of being complete bollocks.

Times: Brown to build five eco towns

The chancellor, now certain to succeed Tony Blair and enter No 10 on June 27, will tomorrow set out his plan to build 100,000 houses in the five eco-towns, likely to be dubbed “Brown towns”. The new towns — with up to 20,000 homes in each — are modelled on the “green” developments pioneered by Prince Charles. They will be built on brownfield sites, the first of which will be at the abandoned Oakington Barracks in Cambridgeshire.

Guardian: Brown to put homes shortage at centre of new agenda

I do not know what to make out of it, but if the ex-Chancellor (now PM) and his closest allies decide to tackle the housing issues, there is a good chance they will screw up the property market. Just one/two taxes and some additional red tape and the BTL will flee en masse... that's what we are waiting for! Go Gordon, go!

Bull not bull: Peak oil, smoke and mirrors

Good video on peak oil.

Dissident Voice: “Are We Headed for Another Great Depression?”

They go bankrupt and everyone acts like a good little domino and over they fall, one after another. Right now,the crashing sound of dominoes falling is like the hissing of waves on a distant shore but it is rapidly approaching.

Guardian: Where now for the housing market?

Today's interest-rate rise should take the heat out of the housing market, experts said today.

Guardian: As prices go through the roof

As millions of homeowners digest the implications of the latest interest rate rise, Gordon Brown will tomorrow get a taste of the frustration felt by wannabe first-time buyers locked out of the housing market. Campaigners from internet-based group Priced Out plan to picket the chancellor when he speaks at the Dome in Brighton, to highlight the negative impact of spiralling house prices.

the guardian: winners and loser in last weeks interest rate rise

It could have been worse. That's what many home owners will be thinking after the Bank of England raised interest rates by 0.25% to 5.5% on Thursday. Everyone was expecting a rise, but at least it wasn't the half-point hike that some were talking about.

the guardian: save the pension a home comes first

It's a common problem for most employees in their 20s; you earn a decent salary but can't save enough for the deposit on a home. Now employers are stepping in, promising to match pound-for-pound anything saved by young workers to give them a leg-up in the property market.

Firstrung: House prices up 0.7% as HIPs could be housing's equivalent to the millennium bug

The national index has risen by 0.7% in April and by 8.4% in the year. The annual rate of growth at a regional level, averaged over the last three months, is shown in the chart below. The averaged annual growth in London (13.3%) still far exceeds other regions as the chart shows. In rank order, the southern regions - South West (8.6%), East Anglia (8.3%) and South East (8.3%) - show the greatest increases outside of London and are over 1% higher than the remaining regions.

BBC news (video): House crisis due to stamp duty

A spokesman for the Council of Mortgage Lenders and Kirsty Alsopp blame the government for high house prices. Kirsty actually says "... one of the things that fuelled this terrible shooting up of house prices is lack of availability" [supposedly due to high stamp duty].

FT.com: Rates may not yet have hit peak, say economists

Nice quote from the chap at Chase De Vere Mortgage Management who reckons “Rates may be up, but it may make sense to take a variable rate loan now" and "If you can get a variable rate for around 4.9 per cent, it would take at least two further rate rises before this would become more expensive than a two or five-year fix". All well and good but this means that house prices will not generally fall because while people can still get excessively leveraged mortgages from providers.

Guardian: Safe as houses?

The alpha and omega of the British economy is our buoyant housing market and the way it drives lending growth, consumption and the structure of economic activity - and above all, inflation. House prices are too high - just as they were in 1988. The BOE is smart; its record so far speaks for itself. But it runs an economy that is over-dependent on house prices to generate growth and employment.

BBC: Spanish law targets house prices

The Spanish Parliament has passed a law aimed at controlling property speculators whom the government blames for spiralling house prices. It comes to something when the Spaniards are tackling corruption with more vigour that us lot!

Bloomberg: U.S. Retail Sales Fell 0.2% in April

After poor retail sales data yesterday, including Wal-Mart's worst figures since 1980, US retail sales same in below expectations today suggesting that the slowdown in housing is now taking its toll on the wider US economy. The Fed cannot aggressively cut rates with the dollar under so much pressure so consumers are unlikely to be able to prop up the economy this time around.

This is Money: Buy-to-let on landlord's salary

A growing number of loans based on the landlord's income multiple instead of the traditional 125% rent-to-mortgage repayments calculation are being offered, as buy-to-let owners face tougher times.

Times Online: Borrowers take more of the strain as interest rates reach 6-year high

"In a poll for Reuters, a third of the City economists questioned predicted that base rates would rise again, to 5.75 per cent, by August." ... “It is becoming increasingly plausible that rates will eventually have to rise to 6 per cent, or perhaps even higher,” OK, so we just wait for the fallout in November, any nominatins for who should join Guy Fawkes on the bonfire, I'll vote for GB(H) ...

BBC: Warning on Chinese share values

A fall in Chinese shares is a real possibility amid "risks of market euphoria", according to a report from Goldman Sachs. It warns that optimism and speculative trading have pushed share prices ahead of market fundamentals.

Bloomberg: BOE May Need More Rate Moves to Rein In Consumers

``Pricing power has returned to the High Street, and I'm starting to wonder if the inflation rate will fall below 2 percent this year,'' says Dominic White, an economist at ABN Amro Holding NV in London. ``Credit growth and asset prices aren't showing signs of strain, and that suggests rates may need to be a bit higher. We may even see 6 percent by the end of the year.''

Home.co.uk News: The housing boom scam

The current housing marketing boom was created on purpose by the banks to increase their profits, claims the Thrifty Scot... This would not be a new phenomenon. In fact, many analysts are finding that the current US sub-prime housing market was part of a scam.

Firstrung: Blair's legacy is housing crisis, says Shelter

Responding to the resignation of Prime Minister Tony Blair, Shelter chief executive Adam Sampson said: "Tony Blair succeeded in bringing down the number of people forced to sleep rough, but this is just the tip of Britain's bad housing iceberg. He leaves his post with 89,500 homeless households living in temporary accommodation in England, double the number in 1997.

Sofia News: IMMIGRATION INTO THE UK ROSE 25 PER CENT AFTER BULGARIA AND ROMANIA JOINED THE EU - REPORT

Looks like the Goverment told the EU " Dont worry about a thing, we'll tell our people we're restricting the numbers from Romania and Bulgeria, but we wont really because we've got to keep house prices as high as possible, seeing as its our only source of income"

REUTERS: BUSINESS ARTICLE

Ok we are very reassured now then. Are we gambling persons?

Times online: Housing costs taking their toll of society

"One of the unplanned but most intractable legacies of the Blair decade is the distortion of any normal or sustainable relation between house prices and people’s incomes. If that link is not already broken it is certainly stretched to the limit. The rate of price inflation may be slowing, just, but remains obstinately high. The question that always accompanies fresh data showing a fast-growing housing market is: are we headed for a crash? The short answer, at present, is no. " ...

Firstrung: Rate rise will bring market back to 'natural levels'

The Firstrung team are not sure what the spokesman for the NAEA means by "natural levels" for house prices... does he mean pre 2001 when (acknowledged by Lord George, former Bank Of England Governor) interest rates had to be lowered to an artificial low in order to stimulate a consumer boom to stave of the inevitable recession? Base rates are now at 2001 levels, the average price, or 'natural level' of house prices back then, was circa 117K (Land Registry)...

FT.com: House prices resilient in face of rate rises

"The resilience of the housing market in the face of four interest rate rises in nine months was underlined on Friday by the FT’s house price index for April, showing stable house price inflation. Annual house price inflation in April was 8.4 per cent, unchanged from each of the three previous months. The monthly figures followed a similarly consistent pattern with house prices rising by 0.7 per cent last month, from March’s 0.6 per cent increase." [poster comment: not quite the 10+ percent Halifax reported]

BBC: Inflation 'pushing up pay deals'

The number of UK pay deals above 4% is picking up as level of inflation rises, according to a report from Income Data Services (IDS).

Reuters: Sterling falls vs dlr after well-flagged BoE hike

LONDON, May 10 (Reuters) - Sterling hit a four-week low against a broadly firm dollar on Thursday as a widely expected Bank of England interest rate hike to 5.50 percent, coupled with soft UK trade data, sparked a bout of profit taking. At 5.50 percent, UK rates have now overtaken those of the United States, and are the highest among the G7 countries.

FT.com: Bourses in China eclipse all of Asia

The value of shares traded on China’s stock markets on Wednesday was greater than the rest of Asia combined – including Japan!

Firstrung: Have 'The Blairs' made an equitable profit from their Connaught Square property?

Despite rising house prices throughout Britain, Tony and Cherie Blair have failed to capitalise on the property market. They sold their home in on Richmond Crescent in Islington for £615,000 in 1997, just before the housing market began to rocket. Had the Blairs purchased their next home, 29 Connaught Square, shortly thereafter, they would have paid a mere £1,400,000. By the time they did invest in the London housing market in 2004, the house's value had leapt up to £3.65 million...

Financial Times: Bourses in China eclipse all of Asia

The value of shares traded on China’s stock markets on Wednesday was greater than the rest of Asia combined – including Japan – helping the benchmark index to breach the 4,000 mark for the first time.

BBC.co.uk: You and yours

If you want a direct link, try: bbc.co.uk/radio/aod/shows/rpms/radio4/youandyours.rpm The piece is at 24:30/53:27 (24 minutes into the clip). This chap was one of the first members of the committee. Mainly discusses the setting up of the MPC, how and why interest rates are used to control inflation.

BBC: Rising balance of payments deficit

Balance of payments imbalances are a harbinger of trouble ahead. The notion that somehow it doesn't really matter because hell doesn't freeze over tomorrow is entirely misplaced. To cure the problem, our currency has to fall against other currencies - and by a lot. Imports, including commodities like oil, will become much more expensive, and this will put immense pressure on inflation and interest rates. Those who might be losing faith in the reality of an HPC take heart - this going to upset the applecart...

Times: House prices continue double-digit climb

Britain’s biggest mortgage lender revealed today that house prices rose by nearly £75 a day last month despite fears of higher interest rates.

Safe Haven: Oh, the Fear of It All!

A great article explaining why the stock markets will turn parabolic before they crash.

This can be applied to the UK housing market too.

Firstrung: Unity Homeloans launches the three million pound mortgage

Unity Homeloans has launched a bumper mortgage service that accommodates up to £3,000,000 full status loans. The new larger loans, which include a £1,500,000 limit for self-cert mortgages, will be available on Unity's prime range...

BBC: As expected

The Bank of England has voted to raise interest rates by a quarter of a percentage point to 5.5%. The increase, the first since February, takes the cost of borrowing to its highest level since 2001.

Bank of England: Bank of England Raises Bank Rate by 0.25 Percentage Points to 5.5%

The Bank of England’s Monetary Policy Committee today voted to raise the official Bank Rate paid on commercial bank reserves by 0.25 percentage points to 5.5%. In the United Kingdom, output growth has remained firm. Business investment has been stronger than expected and, although indicators of consumer spending have been volatile, the underlying picture is one of steady growth. Credit and broad money continue to grow rapidly. The pace of expansion of the international economy remains robust.

Telegraph: Property shortage to sustain house prices

House prices look set to continue rising according to the latest data from Halifax. The ongoing shortage of property, particularly in London and the South East, means that pricing power continues to favour sellers over buyers. "There is accumulating evidence of a slight easing of conditions in the housing market with further signs of moderation in both demand and activity in the past month," said Martin Ellis, Halifax's chief economist. "Demand remains healthy which, together with tight supply, continues to push up prices."

MoneyWeek: Will we see a 0.5% interest rate hike today?

Another month, another interest rate decision. What’ll it be today? The Americans didn’t spring any surprises last night, keeping the US key interest rate at 5.25%, where it’s been since last June. It seems unlikely that our own Bank of England will be making any headlines either. A rise to 5.5% is widely expected. While a half-point hike might be just the medicine the British economy needs right now, it’s unlikely to garner enough support among the Monetary Policy Committee’s members. That’s something they may come to regret later…

Belfast Telegraph: Are flats taking over city's business areas?

Apartment developments are in danger of taking over too many prime business districts in Belfast, it was claimed today. Oh dear - we can see where this one's going....and not all are even built yet.

Firstrung: House prices up 1.1% in April 10.9% annually - Halifax

Commenting, Martin Ellis, chief economist, said: "House prices increased by 1.1% in April; the smallest monthly increase so far this year and the second lowest since July 2006. There is accumulating evidence of a slight easing of conditions in the housing market with further signs of moderation in both demand and activity in the past month.

Guardian: 'I get a kick from risk'

Among other comments: "Beeny points the blame at the government, which she says has viewed the property boom - particularly the buy-to-let market - as some kind of solution to the impending pensions crisis"

BBC News: ORIGINAL NEWS ARTICLE

Although Blur may be briefing his cabinet colleagues undoubtedly he will be briefing against the Gulper. And yes I expect he will have a lot of domestic issuies to sort out before any takeover - circa Autumn 2008 by Millie I wonder? Watch this space

The Independent: The UK is set to lead the way today with action to tackle global financial warming

In this climate, it is very important to remember that liquidity will eventually be absorbed, or even, if property and other asset prices decline, be destroyed. Gradually global monetary conditions will tighten, as what is happening here will happen elsewhere. But this will take a long time. The UK is, with the US, simply an early mover in what will become a global trend. Meanwhile, be aware that a lot of us think that this rise in UK rates will not be the last one, and that a few of us, myself included, still think that UK rates may well reach 6 per cent this cycle.

WSJ: U.K. REITs at a Discount

Negative outlook for the UK property... more links posted in the comments

The Market Oracle: Real Estate Crash a Post Mortem for the Stock Market

"Tremors from the real estate earthquake won't be limited to housing—they will rumble through all areas of the economy including the stock market, financial sector and currency trading. There is simply no way to minimize the effects of a bursting $4.5 trillion equity bubble."

BBC: Have Your Say: how would an IR rise affect you?

Very bearish comments seem to be the vast majority of the comments on today's HYS - a sign of attitudes changing?

Yahoo: As Market Cools, Home Buyers Seek a Way Out

Property horror stories from the US... but of course it's all different here on the fantasy island where prices can go only up, interest rates can only go down and landlords buy into the market for the long run!

BBC News: UK interest rates set to hit 5.5%

BBC: the mouthpiece of the BoE or what?!!!!

Guardian: News Article

Does anyone recall the winter of discontent? It was Mrs. T who had to come in and raise interest rates to curb the inflation in the economy wasn't it? I forget? Did we do her wrong? Mmmmmmmmmmmmmmmmmmmmmmmmm .... I wonder !

The Northern Echo: News Article

But it wouldn't be good for the Gulper would it? Or his party's election prospects as they have in the main it would seem bribed the North (and latterly the East End of London property specultors with their Olympic bung) to saty elected if last Thursday's results are anyhting to go by! OOOOOOOOOOOOOH - Things are getting a little warm Blur and friends! Sould [we] stay or should [we] go to quote Monsieur Strummer and friends! Oh the Halycion days of 1977 - 1980 when there wasn't the speculation about. I think that even I would be gulping at the figures now! What's the excuse now ? Haven't had time to move the economic 'cycle' yet?

Cambridge News: ORIGINAL NEWS ARTICLE

It looks like the Cambridge monetary Committee (University?) want a 0.5% rise as tough and early medicene which is what some of us have all been saying... Well Swervin Mervin and chums, don't say we didn't warn you! If they hit 7% when its still your watch then you won't be able to blame anyone (although you may be bale to move the economic yard sticks of course!) Love EJ Thribb 13 and a quarter

find a property: Poll Result: Will Rate Rises Cause A Crash?

according to a poll conducted by find a property.com.It just shows the message is getting through.

find.co.uk: From the frying pan into the fire, would-be first time buyers boost rental yields

Apparently, although mortgage interest payments as a percentage of income are at the highest level since 1991, they are still way down on the peak seen in 1990. Back then, the ratio of interest payments to income peaked at 28.1 per cent. In March of this year the ratio was just 18.3 per cent. The inference is clear, houses remain affordable. But there are holes in this argument. For one thing, the CML data does not take into account disposable income, and completely ignores the fact that back in the early '90s tax relief - or MIRAS - was available on mortgage payments. Then throw in mortgage re-payments and the expected imminent rises interest and it seems, that, during the course of this year, the true cost of a mortgage to income will be approaching the levels seen in 1990.

The Times: First-time repayments highest since 1991

First-time home buyers are paying more on their mortgages than at any time since the last recession, figures released yesterday reveal. Chris Tapp, of Credit Action, said: “A combination of rising house prices, rising interest rates and rising living costs have combined to make it virtually impossible for many would-be first-time buyers to get on to the housing ladder. Until there is a change in the housing market it may be wiser for many first-time buyers to hold tight, keep saving and wait. It is great to be able to own your own home but not if you bankrupt yourself in the process.”

Thrifty Scot: The housing market scam

then they are not. It's all a scam to give profits to banks and the government

Motley Fool: A Treadmill Built For Two

A short summary of where we're at.

IEA: SMPC votes to raise interest rates

At its latest meeting, the IEA’s Shadow Monetary Policy Committee (SMPC), a group of leading monetary economists that monitors developments in UK monetary policy, voted to raise interest rates by seven votes to two. A vote to raise rates by 0.5% was lost by five votes to four.

Firstrung: One in seven could struggle with mortgage payments if interest rates increase by 0.25 per cent tomorrow

More than one in seven could struggle if the Bank of England decides to increase interest rates by 0.25 per cent tomorrow, new* research from online mortgage company mform.co.uk shows. Around 6.5 million people - or 14 per cent - say they will struggle with monthly payments...And the numbers feeling the pain with their mortgage will rise to nearly one in five if rates rise by 0.5 per cent from the current 5.25 per cent to 5.75 per cent, the research says.

The Times: Buoyant high street trading fuels fears over run of base rate rises

A heady mix of strong retail sales, consumer confidence and salary growth will add today to concerns that interest rates may have to rise beyond this week’s expected quarter-point increase. The British Retail Consortium (BRC) will report today that sales on the high street enjoyed a healthy April.

Firstrung: 'Lego land' flat pack houses no solution for real world problems - Firstrung

Today the BBC will make light of the 'flat pack solution' for the housing crisis in the UK. The fact that current house price inflation, (causing a generation of potential home owners to be priced out), has been caused primarily by artificially low interest rates and aggresive lending, (with scant regard for mortgage qualification criteria), is an argument for another day. The sight of these pre-fabs on re-claimed brown field sites should have the authorities and figures of responsibility - from Ministerial to local Governments, holding their heads in shame.

Guardian: Retail sales weaken and first-time buyers feel squeeze

Andy Gray, head of Woolwich Mortgages, said: "Mortgage borrowers are really getting squeezed. With the costs of council tax, petrol and food and drink, as well as mortgages, all increasing consumers are seeing a large amount of their earnings being diverted to essentials, putting real pressure on disposable income. Most commentators are suggesting that interest rates will increase further this week. However, our research shows that the three interest rate increases over the last 12 months are already starting to have a major impact on borrowers."

Telegraph Online: 'Green' tax to hit buy-to-let property owners

This places another obstacle in the way of BTL-ers - I like it. I wonder how the erosion of profit margins will effect the BTL market which seems extremely robust at the moment.

BBC News: UK retail sales slow during April

UK retail sales growth slowed in April, official industry data has shown. Sales rose by 2.4% last month, compared with a 6.8% increase in the same period a year earlier, according to the British Retail Consortium (BRC).

Reading University: Selling owner-occupation to the working-classes in 1930s Britain

Came across this great university paper on the 1930's housing boom and its associated sharp practices from, builders, lenders as well as lax building controls, misleading marketing, poor construction standards etc etc. It is fundamentally striking how little things have changed or has the nation gone backwards in the recent property frenzy?

FT.com: Baugur chief guilty of false accounting

The founder of Baugur, the Icelandic investment group that has been a voracious acquirer of UK retailers, was found guilty on Thursday of false accounting in a Reykjavik court after a five-year legal battle. Jón Ásgeir Jóhannesson, chief executive of the group, whose investments range from the Hamleys toy store to House of Fraser department stores, was given a three-month suspended prison sentence after being found guilty of a charge of false accounting relating to a credit invoice for $589,890 (£296,771).

The Times: Fiddling with figures while the Earth burns

Slightly off subject but worth posting.

Climate change may be worse than we think. If we are predicting a k-winter of economic hardship and various oil wars over the next decade and a half, there is little chance of any effort going into climate change.

Times: Normal service is about to be resumed

Weak Dollar, Unproductive Labour, Poor GDP figures - so why the mile high DOW? Overseas earnings? What do they know we don't?

Aftenposten: Home sales slow down

The marketing boss for DnB NOR Eiendom, Norway’s largest brokerage chain, told newspaper Dagens Næringsliv on Tuesday that it's taking almost twice as long to sell properties now than it did in January.

Daily Telegraph: New build is worst buy-to-let investment, experts warn

New build property is the worst buy-to-let investment in the current financial climate, industry experts have warned.

Daily Mail: First time buyers to picket Brown over soaring house prices

Frustrated first-time buyers are to take to the streets to protest over soaring house prices. A campaign group is to picket Gordon Brown when he speaks at the Brighton Festival on Sunday.

Firstrung: Homeowners looking to fix their mortgage rates can still find '5% deals'

analysis shows that in July 2006 homeowners could choose from as many as 112 fixed rate deals with an initial rate under 5%. However, since the Bank of England began raising interest rates in August '06 the number of attractive fixed rate deals has diminished at a rate of around nine products per month - and now it's a mere 29 products available from just 14 lenders

Guardian: Stopping the shopping

Several questionable opinions in this article: "Will a rise make a difference?" "Besides, higher rates do not simply squeeze disposable income - they also boost wealth by raising interest on savings. The fear is that higher inflation is pushing up wages and that this will fuel further spending." and then some confused words of the housing bubble.

Times Online: House buying falls for first time in six months

House purchases have fallen for the first time in six months it emerged today in a report that signals Britain’s red-hot housing market may finally be running out of steam. The Bank of England is almost certain to increase interest rates to 5.5 per cent this Thursday in a bid to bring inflation and house price growth under control.

Firstrung: Mortgage payments up 15% on 2006 levels

Average mortgage payments increase 15 per cent in last year as consumers' income is squeezed...According to the latest Woolwich Mortgage Affordability Research average mortgage payments in England and Wales reached £590 in April 2007, an increase of £78 a month on the same month in 2006 (£512 in April 2006) or equivalent to 15 per cent rise in costs over the year. Over the same time period household net earnings have increased by only 5 per cent.

Observer: The crash is coming and it could be soon

The Bank of England must act decisively and swiftly to curb the current house price madness

BBC: High home costs deter new buyers

Thank heavens for the BBC giving the Council of Mortgage lenders (CML) some column inches in this exercise in "completely stating the obvious". In March FTB were 8% lower than a year ago said the CML. Also the proportion of wages swallowed up by interest payments is now at its highest level for 15 years.

Guardian: Brown to face house price demo

Frustrated first-time buyers are planning to upstage Gordon Brown at a festival in a bid to highlight the negative impact of spiralling house prices. Campaigners from web-based group Priced Out will picket the chancellor when he speaks at the Dome concert hall as part of the Brighton Festival on Sunday.

24dash.com: Frustrated first-time buyers plan to upstage Gordon Brown

Frustrated first-time buyers are planning to upstage Gordon Brown at a festival in a bid to highlight the negative impact of spiralling house prices. Campaigners from web-based group Priced Out will picket the Chancellor when he speaks at the Dome Concert Hall as part of the Brighton Festival on Sunday.

The Argus: Property protests to hit Chancellor's visit

Prime Minister-in-waiting Gordon Brown's appearance at the Brighton Festival could be hijacked by protesters, furious about spiralling property costs. Frustrated first-time buyers plan to picket the Chancellor of the Exchequer when he speaks about the UK's booming economy at the Dome Concert Hall.

The Telegraph: The future's bright . . . but not for lawyers and accountants

Futuristic article about off-shoring professional jobs.

IMHO after the asset price and currency shake-out that will happen over the next decade, there will be much more equality between the developed and developing world. Such much so, that we may NOT differentiate between them by 2025

If you want to preserve your wealth then act now. Unfortunately most peoples wealth is tied up in their house and they will see that vanish over the next decade.

There may be a new golden era after 2025 but getting there will be tough.

Telegraph: ORIGINAL NEWS ARTICLE

Can anyone explain this? I thought they said they were rising by 0.6% ? Who is right?

ShareCast: Rightmove's Miles Shipside bags £1.7m

When Shipside cashes in his chips (and Merv says you ain't had it so good)....its got to be down hill all the way to economic crisis...

The Times (Online): Rate increase ‘will be the last’

I have a dim view of The Times' economic journalists (Gary Duncan and Noshbag Smith) but I thought I'd post this one to stimulate debate and to prove not all the Media is claiming financial doom.

Independent: Fear of half-point hike in base rate unsettles City

The Bank of England's Monetary Policy Committee is widely expected to lift the base rate by a quarter-point to 5.5 per cent when it meets on Wednesday, the fourth such increase since last August. However, some experts say rates should be jacked up by a hefty half-point to 5.75 per cent. They argue that a short, sharp shock would be more successful in bringing inflation back to target than continuing with a softly-softly approach.

Tehran Times: Social meltdown in the UK

A biased but somewhat embarrassingly accurate view of British life in 2007.

marketwatch: Editor sees U.S. stocks going parabolic like Nikkei of 1980s

Gartman draws this moral: "We must remember that when markets go parabolic (and they do indeed go parabolic from time to time) it is important to remember one of our oldest trading aphorisms: that the final 10% of the time frame of a bull market can, and often will, encompass 50-75% of the price movement. We may be in that environment now. Things seem to want to go "parabolic." What may seem like insanity may be nothing more than history repeating itself once again."

Times: Life’s no house party for the ‘20-20’ generation

If one asked a competent graduate of a business school to design a business plan for a national cartel to raise house prices to the maximum, it would have four elements, all of which exist in our present system.

Firstrung: http://firstrung.co.uk/articles.asp?pageid=NEWS&articlekey=4892&cat=44-0-0

The average London house price increased again in April, rising 0.6% to £264,636 up from £262,989 in March, data from haart estate agents has revealed...Haart says the number of properties coming to the market is 20% higher than in March, first-time buyer level remains low at 25% of the market share. The estate agency says activity levels are buoyant as the spring market is boosted by an influx of properties in the rush to sell before Home Information Packs.

Telegraph: The backlash has started against income inequality

God it's tough being filthy rich these days. In years gone by a few million in the bank was enough to get you the top table at any restaurant. But now we know that being a mere multi-millionaire is no longer good enough: to make it on to the bottom of the Rich List one has to have at least £70m. We are, at the moment, entering a landmark period of inequality, where the gap not just between rich and poor countries, but also between the haves and have-nots within the western world, is widening to almost unprecedented levels.

Home.co.uk News: Rates to spark rampant remortgaging

Millions of homeowners could be forced to remortgage their property if interest rates go up as expected, it has been claimed... Research found that 14% of households feel they would have to refinance their loan if a rate rise boosted mortgage repayments by up to £50 a month. The figure represented about 2.6 million homeowners across the UK.

Sunday Observer: News Article

Maybe its because I'm a Londoner, that I love £2.1k extra mortgage payments, Blur the failed Barrister, the Gulper and his clear lack of understanding of Keynes and Fiscal drag (including inflation)... tooooooo, Maybe its because I'm a Londoner ... that I love £400.00 per month congestion charges for my small business, parking at £4.00 per hour in Chelsea that my clients wont pay, tooooooooo, Maybe its because I'm a Londoner ... that I love paying £9bn (probably soon to be £13bn) for property speculation in the East End (aka the Olympics) ... tooooo, Maybe its because I'm a Londoner, that I love standing on the tube from Tooting to Old Street for 45 minutes (from 7.20am) ... tooooooo + when those 2m fixed rate mortgages have to be refinanced? LOL as the internettys say!

Firstrung: Money worries forces 3.5mil Mums back to work - Scottish Widows

Research by Scottish Widows, reveals that the cost of running a home means that almost half (44%) of the nation's households require more than one breadwinner to maintain an acceptable standard of living. What is more when it comes to those with dependent children, the need for two incomes increases, with one in two households relying on both partners working...

Firstrung: Brits say debt below £15,000 not worth worrying about

Interest rate rises are having no effect on borrowers' confidence according to the latest Personal Credit Index survey from CreditExpert.co.uk, the online credit report monitoring service from Experian. People are proving more comfortable than ever before with high levels of debt...

SkyNews: Refinance Fears Over Looming Rate Hike

We are nearly there... "Research found that just 12% of borrowers were prepared for a further increase in their mortgage repayments. More than half of all homeowners would be forced to find a better deal if their mortgage payments increased by up to £150 per month." (see Sky News link). I have posted many more links reporting the moneysupermarket.com research

The Guardian: When Mervyn says we've never had it so good, it's time to worry

Amazingly, the UK's current balance of payments deficit is comparable to the position that produced panic in the Seventies; but 'globalised finance' is happy to provide. However, the Bank states: 'At some stage the current account deficit will probably need to close. At that point, some depreciation of the exchange rate will probably be necessary.' If this occurred, and got out of hand, the MPC might find itself having to keep rates high - even if, a collapse in house prices made it want to lower the bank rate. That would be a real test for the much-feted committee.

Telegraph: Britain's interest rates will be set abroad

On Thursday the Bank of England is almost certain to raise interest rates to 5.5%. I don't agree. The Bank has just published data showing mortgage approvals at their lowest level for a year. The rate rises already implemented are now kicking in. In my view, it is the world's currency markets, more than anything else, that will determine the future path of British interest rates. If America slumps, and US rates are cut, the dollar will fall against the pound, and a strong pound will lower British inflation. If the dollar refuses to yield, and this "currency effect" doesn't happen, inflation in Britain may remain stubbornly high. Rates could then head towards 6 per cent.

Firstrung: A repeat of the house price 'horrors' of early 90's is only a few rate rises away

Allied Surveyors has warned that the Monetary Policy Committee should keep rates at 5.25% next week if they to avoid a house price slump...Robert Bryant-Pearson, chief executive of Allied Surveyors, says: "There really is no need for interest rates to increase at all. Whilst the Consumer Price Index has crept over 3%, the inflation we have experienced is imported inflation, largely because of the oil spike and food prices. How will punishing families with rate rises help?

Financial Times: Buffett issues warning on risks to growth

"Warren Buffett has warned corporate America that the current era of unprecedented profit growth and benign economic conditions could be brought to an abrupt end by growing political and financial risks."

The Economist: Watch out for the cracks

More on the imminent UK property crash......with the considerable weight of the Economist behind it!

Observer: The crash is coming and it could be soon

A truly heartening article. And what a headline!! We've also won a mention, and this time we are not dubbed "doom-mongers". I could not resist posting... have good reading!

BBA: Drop in mortgage demand - buy to let mortgages

I am posting some recent news (see more links in the comments). Long and short of it, BTLers are reducing their portfolios, but there are not many new BTLers buying, so FTBers are having a chance. Because of affordability issues, I expect this to result in some decline of aggregated price statistics, but it will take couple of months to become visible. Just highlighting this trend... thought it was more interesting looking at potential "leading indicators" of market sentiment rather than the latest in lenders' spin

austrianenginomics.com: Why is Economic Depression Imminent?

Debt is one of the most misunderstood macro economic measures of all. Most economists, financial analysts, the mainstream press, and politicians believe extraordinary debt expansion is tolerable as long as the economy stays “strong and growing”. This could not be further from the truth. In principle, if on average one cannot owe more than one can produce in his lifetime, then most people may intuitively deduct this one-sided American consumption binge cannot last. Those holding these debt securities worldwide enabling this consumption binge are experiencing the most extraordinary illusion of wealth. Soon they will discover that illusion. They will not recover their principal in real terms, let alone interest!

Firstrung: First time buyers to protest at Gordon Brown’s Brighton Festival appearance

Frustrated first time buyers are organising a protest in order to highlight the housing affordability crisis that is gripping the nation. Organised by Priced Out, a web-based campaign group for affordable house prices, the protest aims to highlight the negative impacts of high house prices in 'property hotspots' such as Brighton...

lewrockwell.com: The Kondratieff Cycle: Real or Fabricated?

This article was written in 1984

It throws out K-wave theory as worthless work and says the business cycle is the only cycle that matters
I am presuming it represented the consensus view at the time.
Many economists, including our beloved David Smith, would have subscribed to this viewpoint at this time. They would have never gone back and reviewed k-waves again.

Moneyweek: Moneyweek special report 1

Interest rates are clawing upwards... consumer spending is slowing... global markets are sliding at the threat of inflation... Dubai, down 58%... FTSE, down 10%... Germany, down 17% Oil prices have hit a record high of $70... Gas and electricity bills are soaring... The dollar is in a seemingly unstoppable nosedive... while property and debt levels on both sides of the Atlantic are at bursting point...

BBC News: Help for elderly in mortgage trap

Basically, these people took out loans of around 25% of the value of their homes 10 years ago. The loan stipulated that when they sold their house, 75% of the rise in value would go to the bank. This story is full of emotive quotes like "I ended up paying back £96,680 for a £20,000 loan" but basically these people have homes, and are getting a hardship fund set up for them - not because they're in hardship, but because the terms of this deal would put them in a similar situation to first time buyers!

The Guardian: Scheme traps rogue buy-to-let landlords in the tax net

Tax-dodging landlords had better watch out - the taxman is about to find out who you are, where you live, and how much rent you charge. One little-noticed side effect of the new Tenancy Deposit Protection regime, which became compulsory a month ago, is that deposit scheme providers will be handing over to HM Revenue & Customs details of who is renting out property.

Firstrung: MPC - a brief history

Interest rates have changed less frequently than in the preceding ten years. Official rates have moved on 34 occasions since the MPC first met in June 1997 compared with 46 changes in the previous decade. Interest rates have been lower and fluctuated within a narrower range during the past decade compared with the previous ten years. Official interest rates have varied between a high of 7.50% in 1998 and a low of 3.50% in 2003 since June 1997. During the decade up to the formation of the MPC, base rates peaked at 15% during October 1989 to October 1990 - twice the peak in the past ten years - and fell to a low of 5.25% during 1994.

Firstrung: First time buyers benefiting from buy to let exodus

First time buyers have been snapping up properties from landlords who have sold property in the last two years according to research from Alliance & Leicester Mortgages...

MSN Money: Who's next in the global property crash?

It looks like the Spanish may be the first group of Europeans to experience a painful ending to the global property boom. Last week, the Ibex index in Madrid was battered as shares in Valencia-based builder Astroc dived after its accounts revealed that some of last year's profits came from the sale of assets to its chairman, leading to fears that the company was trying to prop up its share price. Its fellow building stocks took a tumble as the fears spread to wider concerns about the property market in general.

The Economist: Watch out for the cracks

' The boom has built upon itself, which is why it will not last'. Discusses interest cut of August 2005 and subsequent market revival, BTL, and levels of household debt. It requires subscription but you can sign up fro 10 free articles. Worth a read. Also in this week's issue are articles about HIPS and the spainish property market. Article ends 'As Mr Blair bows out the curtain may also be about to come down on Britain's great housing boom'.

Irish Times Newspaper: “Property asking prices down 10%.”

It's a headline to strike fear into the heart of any overstretched homeowner. And it's precisely the headline that readers of the Irish Times - Ireland's biggest broadsheet - woke up to last Monday. Asking prices across Dublin have slumped in the past six months, particularly in the wealthier suburbs of the city, amid a glut of property coming onto the market. Kelly reckons prices could fall by 50%. "In a typical property crash, prices fall by 70% of what they've gained. That would imply a rental yield of 8%, which is still very low" by historical standards. "A 10% rental yield would imply bigger falls."

Guardian: 'Credit comfy' Britain embraces rising debts

The research by credit-rating agency CreditExpert.co.uk says six million people in Britain would only start to worry if their unsecured debt reached £15,000, while 1.4 million would wait until it hit £50,000 before breaking into a sweat.

Telegraph: On the edge of the abyss

More than a million people are on the brink of serious debt difficulties even before the increase in interest rates the Bank of England is expected to announce next week. The Bank's most recent Financial Stability Report estimated that Britain's personal debts have reached £1,300bn - or £1.3 trillion - making huge numbers of people vulnerable to an economic downturn.

UK Government / Insolvency service: Plans to Bring Debt Relief to the Socially Excluded

Another plan to help the poor folks with little money and no sense!

Daily Express: Millions rely on homes to retire

Yolks on you, greedy BTLs.

BBC Action Network: Campaigners plan house hikes protest

The Brighton protest makes the front page of the BBC Action Network website. "Priced Out campaigners are organising a protest on house price inflation. It will be held in Brighton at a venue to be attended by Gordon Brown."

Times Online: 20p for a bed in London? That’s a real convenience

"They’re paying just 20p a night for a bed and a bathroom, so I guess you can’t blame them." ... Nuff said.

BBC News: UK families need two wage packets

Nearly half of all UK families need two or more salaries to cover the bills and live comfortably, a survey from Scottish Widows suggests.

Times Online: Loss of fixed-rate deals squeezes borrowers

Look down the article for where the trouble starts ... "Cautious borrowers minded to fix for the full term of a mortgage have discovered that Nationwide’s widely-publicised 25-year fixed rate loan, at 5.63 per cent, is no longer available, but Kent Reliance has a 25-year fix at 5.5 per cent and Newcastle Building Society is offering 5.45 per cent, fixed for 20 years. Both have fees of under £500." >>> Now if interest rates jump to 7 or 8% (hey only kidding, its going to move up to at least 9%), what is the building society going to do when its got borrowers stuck on "lifetime" fixed-rate deals of 5.5%. Trouble looms ...

Firstrung: Credit action - the financial state of the nation

Well it's that time of the month again for Credit Action to reveal their latest 'state of the nation's finances' commentary. Month on month the figures never fail to take your breath away, here's a few facts that the Firstrung team termed 'drop the bacon butty' moments when digesting this information this morning;

Firstrung: First time buyers need savings of £32,784 to step onto the first-rung

New first-time buyers face double whammy of house price and interest rate rises. Higher house prices alone add £75 to typical first-time buyer monthly costs compared to last year. Interest rate increases bring this up to almost £120. A first time buyer couple will now have to save up to the equivalent of 81.8 percent of joint take home pay, to build up the £32,784 needed for up front buying costs on a typical home, deposit and stamp duty. According to the Department for Communities and Local Government (DCLG) the average house price in the UK in February 2007 now stands at £205,102 (£212,642 in England). UK annual house price inflation rose by 12.1%. Annual house price inflation in London rose by 16.7%.

Times: A decade of spin and error: what a waste of time

The press is changing tune. Many Sun Kings will hit the dust!

Firstrung: House price crash not on radar unless interest rates reach 10% - Moneynet

Mortgage rates may need to rise to 10 per cent before any serious threat of a property market collapse becomes a reality, Moneynet.co.uk has suggested... Despite warnings of imminent difficulties in the face of the widely anticipated 0.25 per cent base rate rise next week, a comparative analysis of the market back in 1987 - when similar, overheating conditions prevailed - and 2007 by the online data comparison service shows that the danger points arise when the percentage of take home income needed to service mortgage interest rises to around 30 per cent.

Daily Express: RECORD NUMBER DECLARED INSOLVENT

Yet another record of success for Mervyn and co

BBC News: Number going bust hits new record

23.9% [30,000] increase in IVAs - on the same 3-month period in 2006.

MoneyWeek: Is Ireland heading for recession?

“Property asking prices down 10%.” It’s a headline to strike fear into the heart of any overstretched homeowner. And it’s precisely the headline that readers of the Irish Times - Ireland’s biggest broadsheet - woke up to last Monday. Asking prices across Dublin have slumped in the past six months, particularly in the wealthier suburbs of the city, amid a glut of property coming onto the market. It’s certainly a shock for those who thought prices could only ever go up. But as economist Dermot O’Leary of Dublin’s Goodbody Stockbrokers said: “It had to happen at some stage.” Even the IMF and the OECD reckoned the Irish property market was overvalued by at least 25%.

BBC Radio 5: Wake up to money, reposession and sub-prime (mp3)

Repossessions up, will sub-prime lending go the same way as the US?

The Times: Signs of a slowdown but london refuses to conform

"The doomsayers have for some time had their own online forum: housepricecrash.co.uk. But one sign of their growing confidence is their new anthem – the Spitting Image spoof of Our House, the Madness hit, with lines such as “our house: price has dropped by 50 grand”."

Guardian website: Guardian special report: Bricked in

The Guardian gets a bit philosophical about the effects of gargantuan house prices on various parts of the country. Quite thoughtful, and no crowing about imaginary wealth.

modernselling.com: HOUSE PRICES COULD FALL BY 20%

"The warning bells are ringing. Financial regulator the Financial Services Authority has joined a growing list of economic commentators in warning lenders that house prices could drop by up to 20%." It's old news now being recycled. Got this from a new article giving this article as one of its sources. Er ... is it going to be .25% or .5% rise next month, now that the elections are out of the way ... BoE is delaying to support GB(H), not very sensible I think ...

The Times: House prices plunge in Blair's constituency

Homeowners in Tony Blair’s constituency suffered the largest falls in house prices seen in the UK last year. According to figures published today by the Nationwide, while prices throughout the whole of England rose by nearly 2 per cent, prices in the North fell by 2.1 per cent in 2005, with the biggest local fall seen in Sedgefield, which the Prime Minister has represented as an MP since 1983. "The price falls in Sedgefield are a reflection of the poorer economic condictions in the area and a weaker labour market," Fionnuala Earley, Nationwide's group economist, told Times Online. "The North East is one of the poorest regions in the UK."

Telegraph: Over-50s hold 3/4 of nation's wealth

The widening economic gap between young people and their elders was highlighted by a report yesterday showing that the over-50s have three quarters of the nation's wealth.

BBC News - Today programme: Sub-prime reposessions up

Apologies for posting an audio link, but I can't find the story on the BBC site. 6:15 business news (15 minutes into this clip) talking about increase in repossessions in sub-prime and making comparisons to the US, cheerfully denied by a representative from a sub-prime ("not sub-anyting, Jim") lender.

BBC News: Insolvency risk high for over-55s

Nearly a quarter of over-55s with debt over £10,000 said that they are "quite likely" or "certain" to go insolvent.

ft.com: Financial Times

As a psychologist I liked this one - it talks of irrationality in the context of the housing market and peoples failure to take into account salient facts like the true costs of house ownership during their decision making process. Apparently we are driven by thinking of those people who have made huge gains in property but ignore the costs of these gains - used to be called greed I think. US prices are falling and apparently we are more than twice as overpriced as the US on comparative measures etc etc.

The Telegraph: Economist on the frontline for Jane's

Where will future growth be when the k-winter emerges

Sounds like Jane's is the perfect buy for The Economist

Sky: Refinance Fears over looming rate hike

How dumb can people be if a quarter percent means they are in trouble. Okay, okay its the not the first quarter percent rise, but hey, even so, just shows how fragile are the finances of millions.

Risk Glossary: Option Spreads

It seems to me that if someone buying a mortgage had "price fall" protection, we could stop banks and other lenders being predatory.This can be achieved with a variety of Exotic Options - e.g. a "Costless Collar". It is (I believe and I may be wrong) an each way bet on your house price. It prevents you making money on your house in the good times, but at least you will keep it in the bad times. This would be a rectifier (engineering term) in effect.

MarketWatch: Layoff plans jump 44% to 70,672, Challenger says

WASHINGTON (MarketWatch) -- Job reduction announcements by major U.S. corporations soared by 44% to 70,672 in April after falling to an eight-month low in March, according to a monthly report released Wednesday by outplacement firm Challenger Gray & Christmas.

CNN Money: Foreclosures surge on mortgage woes

Can a bank yank a fix rate mortgage from a borrower? NEW YORK -- Foreclosure filings surged during the first quarter of 2007, as home price increases slowed or even reversed and borrowers fell behind on payments once their adjustable rates began resetting at much higher levels.
The number of filings climbed 27 percent in the first quarter compared with the fourth quarter of 2006 and 35 percent from a year earlier, according to a report released Wednesday by RealtyTrac, an online marketer of foreclosure properties.

Sell2Stay: Sell and rent back

"Are you having money problems? Would you like to release equity and free up the capital locked in your property? Would you like to continue to live in your home and not move? Please note that we will pay you a minimum of 80% and a maximum of 90% of true market value for your house, combined with our unique rent rebate you will easily achieve well over 100% of its value."

BBC News: Dirty money exploits housing boom

New-build properties in the UK, have been at the heart of the housing boom - but valuations are difficult, and rapid resale's are far from uncommon. 'Flipping' may account for the large numbers of new-build apartment type property lying sold but empty across vast swathes of the UK.

Safe Haven: Investment In Stocks Pure Speculation

K-wave theory is sometimes difficult to grasp when explained as 4 seasons

When viewed as a debt bubble graph spanning 70 years between peaks it becomes much clearer.

FT.com: GM struck by subprime losses

General Motors’ first-quarter earnings withered by almost 90 per cent, with improved results from automotive operations more than offset by heavy subprime mortgage losses at GMAC, the financial services group in which the carmaker has a 49 per cent stake.

BBC: Sub-prime mortgage crisis hits GM

General Motors has become the latest victim of the US sub-prime mortgage lending crisis. Its GMAC finance arm made a loss of $305m (£152m) in the first three months of the year because of charges taken at its housing finance unit.

IPE Real Estate News: UK derivatives trades report record Q1 values

REAL ESTATE - UK property derivatives in the first quarter of 2007 chalked up 125 transactions worth a record £2.9bn (E4.3bn). This is the equivalent of 10% of direct investment in real estate in the UK, according to figures published by IPD.

Firstrung: Nationwide sells out of a 25 year fixed rate mortgage

Nationwide Building Society has announced the withdrawal of its 25 year fixed rate mortgage. Nationwide said the mortgage will be withdrawn from sale at close of business today Thursday 3 May 2007. Launched at the end of March, the mortgage was aimed at borrowers seeking long term security of payments. The 25 year product allowed borrowers to move their mortgage without penalty after 10 years. The initial tranche of £50 million funding has now sold out, with many borrowers being able to take advantage of the deal.

Firstrung: Interest rates rising to 5.75% in summer cannot be ruled out - CML market commentary

The jump in inflation to 3.1% in March caught the markets by surprise and led them to reappraise the outlook for interest rates. A 0.25% rise in official Bank rate to 5.5% at next week's MPC meeting is considered a virtual certainty. And the markets are pricing in a further rise to 5.75% during the summer. A number of lower-priced fixed rate mortgage deals have been withdrawn as market rates along the yield curve have risen.

Telegraph: UBS to shut top banker's hedge fund

Banking giant UBS is to scrap a hedge fund run by top banker John Costas after it racked up losses in the US mortgage market.

Financial Times: Lenders tempt homebuyers into the big league

An article about super high mortgage values; particularly high multiples of income. Lending criteria are more relaxed as they are based on 'affordability' and mortgage rates are expected to stay historically low.

24dash.com: House prices could crash, experts warn

A recent analysis concluded that the UK property market could begin to suffer a “boom and bust” cycle again if house prices continue to increase. Datamonitor, a leading provider of analysis services, claimed recently that the UK property markets could still suffer a crash and begin a cycle of "boom and bust".

Priced Out: First time buyers to protest at Gordon Brown’s Brighton Festival appearance

Frustrated first time buyers are organising a protest in order to highlight the housing affordability crisis that is gripping the nation. Organised by Priced Out (www.pricedout.org.uk), a web-based campaign group for affordable house prices, the protest aims to highlight the negative impacts of high house prices in 'property hotspots' such as Brighton.

Bloomberg: Bank of England Makes `Nice' on Anniversary of Its Independence

``We had the Asia crisis, which spread around the world; we had a recession in the industrial world, which we very narrowly avoided,'' [Eddy] George said. ``It wasn't pure luck.''

The Telegraph: Money supply jump sparks Governor's warning of higher interest rates

Mr King said that the Bank was now preparing a series of studies to analyse the situation. Horses, bolts, gates and stables.....I think

FindaProperty.com: Rental Yields Continue Downward Spiral

According to Landlord Mortgages, rental yields (the percentage a property’s value earned in rent every year) are slowly sinking because the investment market is governed by two factors: high house price growth and relatively static rents. Scottish yields show the largest drop, falling from 6.8 per cent (Q4 2006) to 5.9 per cent (Q1 2007). Less dramatic declines were recorded in England (5.8 per cent to 5.7 per cent) and London (5.9 per cent to 5.7 per cent).

About: Dow High, GDP Low - Deja Vu All Over Again

The Dow just hit a new high, but GDP suddenly drops to a new low - no, its not today, its March of 2000, right before we entered the last recession.

Bloomberg News: Rents Peak in Housing Glut; New York Escapes Decline (Update3)

More U.S. problems. Is this really about supply and demand, or about the retraction of loose credit? Still, it won't happen here because the unaudited banks and other vested interests will keep telling us the market's rising at a 10 percent-a-year clip. It can't last for ever, though, eh.

bloomber.com: frightening reality of housing shortage

frightening reality of housing shortages.I am not saying the same will happen here,but there have been riots in spain(mostly unreported)from people protesting against high housing prices

Irish Independent: UK rate rise now enters the reckoning

The possibility of the first 0.5pc rise in British interest rates in 12 years grew after surveys yesterday showed rapid growth in retail sales, and manufacturers raising prices at a near record pace, last month.

Firstrung: NAEA urges Government to repeal HIPS

The latest report of session by the House of Lords Merits of Statutory Instruments Committee on home information packs (HIPs) has called into question 'whether the HIP Regulations will effectively achieve their policy objective'... Peter Bolton King, Chief Executive at the National Association of Estate Agents (NAEA), comments: "We have been asking the same question for some time now. There are a number of fundamental flaws with the legislation which have led us to believe that it will not improve the home buying and selling process in the way the Government suggests, and that in fact it will have a serious and negative affect on the UK housing market.

Firstrung: Lowest mortgage approvals since April 2006 could herald slowdown in property market

Signs have emerged today that the UK mortgage market may be slowing as a result of the impact of higher interest rates, according to data released by the Bank of England...Mortgage lending rose by 9.9 bln stg in March, slightly less than the 10 bln stg recorded the previous month. The latest figure is below predictions of a 10.2 bln stg increase, it remains above the 9.7 bln stg average seen over the past six months.

The Market Oracle: UK Housing Market Heading for a Property Crash

The next rise in UK interest rates to 5.50% is anticipated in a little over a weeks time. This is expected to further impact on a slowing housing market in the UK. Statistics from the British Bankers Association showed a drop in the rate of mortgage approvals by 8% despite the market entering the traditionally strong summer period.

A decade of business under Blair: Telegraph Online

This article captures most of the reasons why I believe a HPC will happen. None of these factors will be the catalyst but all will act as an accelerant. Hopefully we'll be able to identify the catalyst before the end of this year; if not, then the catalyst is unlikely to appear before 2010. I just hope the HPC happens before I start drawing my pension in 2035.

Independent: Chavez pulls out of IMF and World Bank

Venezuela's leader Hugo Chavez has underlined his intention to develop an alternative economic vision for Latin America by pulling his country from the World Bank and the International Monetary Fund - organisations that have long had a controversial role in the region.

He is also to nationalise operational control of four oil field projects currently run by foreign companies.

Though Venezuela has paid off its loans to the two international lending organisations, Mr Chavez's announcement that he intends to quit the organisations is powerfully symbolic. It is likely to lead to other smaller nations to question their membership and demand a greater say in the organisations' policies.

Guardian: Markets will never spot the black swan

Limited human knowledge

Why do people tend to neglect rare events? Partly because humans underestimate their ignorance in most situations - the effect of unexpected events is far more significant than people often imagine. Taleb argues that the proposition "we know" is in many cases an illusion - the human mind tends to think it knows, but does not always have a solid basis for this delusion of "I know". This notion that we do not know is very old, dated as far back at least as Socrates. Some felt[attribution needed] that the advancement of science has rendered the world well-known; Taleb argues that while science added knowledge, the world did not turn into a fictitious world where everything is known. Socrates' dictum "the only thing I know, is that I do not know" is as true

Guardian: Venezuela seizes foreign oil fields

This should only come as a shock to those who believe in the "it's all priced in" fairytale. Most people are utter sheep and would not have contigencies for this. This could be a harbinger of much more drastic nationalism across not just South America but Africa also. The MEND insurgency in Nigeria, strong resistance to Western backed coup attempts in the Gulf of Guinea are leading the prcie of oil to well over $100/barrel. This will also strenghten other currencies, since Venezuela moved its payment terms away from the USD. The USD (and thus the GBP) are about to come under serious pressure. A 50 basis point rise might not be far away now.

Times: Booming spending stokes fear of 6% rates

A surprise surge in retail sales combined with strong factory prices are both piling the pressure on the Bank of England to raise rates even higher than the 5.5 per cent mark expected to be hit next week. [Poster Comment] Looks like the younger generation have given up on planning for the future. With house prices so out of reach perhaps they believe there is no future, so what the hell.

reuters: Sales and factory prices fan hike talk

Anyone for 50 basis point interest rises?

Landlord Expert: PM, Sat 28th April - UK house prices could be boosted by Home Information Packs

This article discusses the influence the debatable Home Information Packs will have on our economy and more importantly on UK House Prices.

LandRegistry: House Price Index

Do not freak out! LandRegistry data is about 2 months old. In March, the average monthly inflation (England & Wales) was 1.0%, but less than in October 2006 (1.3%). The year-on-year change was the highest but that is the average of the past 12 months. Look at the market trend on page 4, we are definitely past the peak outside London.

Firstrung: House prices show biggest rises for almost two years - Land Registry

House prices continue their recent strong run (March 2007 average price increases 1.0 per cent to £178,423). House prices in England and Wales have continued their recent strong run with an annual increase of 8.3 per cent in March 2007. The monthly change in house prices of 1.0% raises the average house price to £178,423 in this month. The data for this month shows one of the highest annual increases in almost two years. A year ago, in March 2006, the annual price change was 4.3 per cent, almost half the 8.3 per cent annual price change in March 2007

MoneyWeek: How houses can steal your freedom

American author David Bach has two pieces of advice for anyone wanting to achieve 'financial freedom': pay yourself first, and buy a house. And 'those who already own a home should save to buy an investment property.' Yet, says Merryn Somerset Webb, buying into the property bubble will neither bring you security - nor make you rich.

FT: Chinese Demand Puts a Strain on Timber

Are any timber products included in the RPI? I bet not!

Times: Why 50somethings live like 20somethings

Yes there is a slight politics of envy here.

Wikipedia: Danish property bubble

I popped this in for background only. A Danish friend of mine who has been watching the bubble there mentioned at the weekend that he is convinced it has topped and has seen reports of HPC in some areas. Now this may be wishful thinking (like us Brits).... but... perhaps even the small Euro IR rises are having an effect ...?

The Telegraph: Do not put all your eggs in emerging markets basket

Critical to a bubble's development, he adds, is the reinforcement for your optimistic view from others around you. In previous bubbles - Japanese land, dot.com - this reinforcement was relatively localised. This time it is worldwide and as a result all asset classes (property, stocks, bonds, private equity) and all geographies (developed and emerging) are fully priced