Friday, Jul 20, 2007
There'll be floods of tears!
Financial Times: Investors seek safe havens from credit storms
World markets saw a sharp “flight to quality” on Friday as credit concerns prompted traders to sell equities and buy into safe havens such as government bonds and gold.
Posted by cheeky charlie @ 08:35 PM (187 views) Add Comment
3 Comments
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1. dohousescrashinthewoods said...
Landlord, I don't know if you read other articles on this site, but please read this one, carefully, and don't stop until you understand what it means. Taking the figures cited here, issuance of junk bonds (for which you can read "market appetite for risky debt" - to be plain you can arguably say "BTL mortgages") has fallen by 96.7% since the end of June.
To spell it out, if the markets won't buy debt, the banks can't lend it. That's very, very bad news for would-be BTLs (on whom struggling BTLs might wish to offload properties).
No matter what supply/demand/immigration/price of onions/direction of the wind factors are cited to justify the market, without credit, very few can buy. No "convertible demand" means, you guessed it, game over for prices. If prices fall and defaults rise, banks tighten their lending and it spirals.
I really, really, really urge you, without prejudice, to sell up and run like billio. I will match your conviction and take a punt to say that a property crash is certain. This article says that investors believe the foundations have gone. It is therefore only a matter of time before events run their course and the house of cards collapses.
To twist Schrodinger, the CDO stories you may have read mean that cat is beyond reasonable doubt dead, but that nobody wants to open the box. It's starting to smell, so someone will open it soon - and then everyone will know for sure that it is dead - that the emperor has no clothes on - and the bloodbath will begin in earnest. It's like a game of chess, or "Go" where you can declare the end several moves before the game completes.
If you care about your members, make sure they at least have this information, even if you don't think it bears acting on, make sure they have had the choice, the chance.
2. sovietuk said...
Ho Ho Ho
3. the landlord assocation said...
I will do so.
Thank you.