Times Online: Tope Economist says America could Plunge into Recession

Losses arising from America’s housing recession could triple over the next few years and they represent the greatest threat to growth in the United States, one of the world’s leading economists has told The Times. Robert Shiller, Professor of Economics at Yale University, predicted that there was a very real possibility that the US would be plunged into a Japan-style slump, with house prices declining for years.

BBC: Bleak prospects for UK job market

Next year would be "easily the worst since the Labour Government came to power in 1997". Add that to the other issues facing the housing market we're been discussing on here....

The Intellgence Daily: Brittania: Feed Us!

In my travels around the Hinternet, I spotted this one. Pretty stark article. A couple of main points: 1) Britain is actually bankrupt 2) UK house prices are crashing 3) Debt problem figures already as high as 1995 Interesting when someone outside the political (BBC) and media empires (Murdoch's Sky+Fox) is writing the story.

Independent: On the edge in 2008: will house prices bump along the plateau, or are they about to fall off the cliff?

The housing market boom has finally run out of momentum, and fears are being voiced in some quarters that our biggest financial assets could go into reverse in 2008. The financial trepidation with which we are tiptoeing into the new year is almost tangible. Few doubt 2008 is going to be a year of uncertainty, if not living on the edge, and this is especially true in the housing market. "Meanwhile, consider other ways of boosting the value of your property – perhaps an extension such as a loft conversion, or an upgrade to the kitchen"

Sunday Times: How low will it go?

The UK property market ends the year on a cliffhanger — are we headed for an almighty crash or a steady slowdown? This time last year, as agents and analysts gathered around their spreadsheets and crystal balls, everyone was breathing a sigh of relief. The housing-market crash predicted by the gloomy Jeremiahs had not come to pass. What’s more, at the tail end of 2006, prices in some areas had even begun to turn upwards. The boom years were back on track.

Mail: Cash overtakes property as prices fall

House price growth in 2007 will drop below 5% after more falls in December, according to the latest figures from the UK's largest building society. The fact house price rises in 2007 fell below 5% will be of particular interest to those with investment and retirement funds tied up in residential property. It means that cash savings accounts, with no risk of losing money, represent a better return on invested capital. They must have forgot all about the Rock crisis in stating "with no risk of losing money" - strange really when it is being propped up by approximtely £100bn worth of guarantees !

Bloomberg.com: Brown Pledges to Take No Risks With U.K. Stability in 2008

``We will make the right decisions, not only this year but for the years ahead, to safeguard and strengthen our economy, and by keeping inflation low, keep interest rates for business and homeowners low,'' Brown said. This man cant help himself, yet more spin, he appears to have left out the fact that you cant have them both at the same time!!! HA HAHAHAHA YUK YUK GUFF GUFF HAHAHAHA!!!!!!!!!!!

Telegraph: High street chains may slip in 2008

Insolvency experts are on standby amid fears several high street retailers could collapse in January. Insolvencies are expected to pick up through January. "In many cases the banks have paid the rents to take these shops through the sales," said another executive. This after a frenzy of spending in the last few days in the run up to Christmas - what are things going to be like by April 2008?

Guardian: Merrill seeks more funds to avoid crisis

$4.4bn from Singapore's Temasek not enough - John Thain, the new chief executive of Merrill Lynch, is this weekend in talks with Chinese and Middle Eastern sovereign wealth funds that could lead to the sale of another big stake in the US bank in a desperate bid to raise capital, according to sources in London and New York.The discussions come just days after Thain was forced on Christmas Eve to sell $4.4bn (£2.2bn) of stock to Singapore investment firm Temasek as part of a wider plan to raise some $7.5bn. So just how much money will eventually be enough

Guardian: Bleak house market threatens hard times for UK consumers

Stuffed full of gloomy economic and housey-housey statistics and comes to the conclusion that 'it may be years before the happy-go-lucky days of the Brown boom are restored', though IMO Brown and Boom now seem quite distasteful when used together.

FruitMortgages: Mortgage Finance & Property Blog Wales UK

There is growing concern coming from experts on how the mortgage and property market in 2008 will turn out. Although not guaranteed house priced are likely to fall in early 2008 by at least 1-2% as first time buyers are unable to enter the market and second time movers are unable to sell their home. There was incredible housing inflation from early 2006 to mid 2007 of up to 100% in some areas such as the North of England and East Wales. Thankfully, for long term stability, these unsustainable increases have come to an end, this will hopefully lessen the extent to which the UK's slowing economy will be effected...

The Times: Economists warn of UK ‘stickyflation’ next year

Graeme Leach, the IoD’s chief economist, said inflation would slow in 2008, but not as fast as output levels, making it harder for the Bank of England to cut interest rates. Inflation is already above the Bank’s 2% target and some economists say expectations of rising inflation are at their highest for eight years.

The New York Times: Credit Crisis? Just Wait for a Replay

"It was the greatest credit party in history, made possible by a new financial architecture that moved much of the activities out of regulated institutions and into financial instruments that emphasized leverage over safety. The next year may be the one when we learn whether the subprime crisis was a relatively isolated problem in that system, or just the first indication of a systemic crisis." - this may or may not be the Titanic, but either way we are going into years of tight credit which will bring UK house prices back to reality.

Times Online: House market is steady in popular areas as prices fall around them

Bleak forecasts for the housing market were further underlined yesterday as data from a leading mortgage lender showed that house prices were continuing to fall throughout the country.

Yahoo Finance: Sales of New Homes Worse Than Expected

"I think you can classify what we are seeing in the housing market as a crash," said Mark Zandi, chief economist at Moody's Economy.com. "Sales and home prices are in a free fall. The downturn is intensifying."

Spiegel Online International: Border Controls Vanish in Eastern Europe

I was never convinced that immigrants were as important for BTL as suggested (many Britons have been leaving as well, this group could not afford to buy and most live many in one house) BUT it was nevertheless another factor. As most are economic migrants, many will go other parts of Europe now. I am sure many like London and English is an important country, HOWEVER, our economy is slowing to EU levels, Europe proper is closer AND the UK pound is weakening against e.g. the Polish zloty (this means it is better to work where payment is in a stronger currency (the Euro)). Another link giving details on the time line...http://www.wieninternational.at/en/node/2194 Many forces come together in April (capital gains tax triggers BTL sales?).

FT.com: Bond insurers feel heat as Buffett enters sector

Shares in bond insurers MBIA and Ambac fell sharply on Friday amid concerns that a rival US bond insurer planned by billionaire Warren Buffett will eat into their ability to win new business and further damage efforts to boost their flagging capital bases. Mr Buffett's Berkshire Hathaway group was expected on Friday to receive a licence from the New York state insurance regulator for the new bond insurer. It hoped to start writing business on Friday or on Monday. It will then seek licences in other states.

BBC: Moneybox: Life after crunch

A remarkably honest broadcast from the BBC. If you listen to the programme, there is a good section on house prices and the economy in general, with one "expert" willing to admit that he's not sure what will happen. An impressive breath of fresh air.

CNN: Citigroup, HSBC Hldgs may sell 'noncritical' assets

banks are raising money in other ways, by getting rid of assets, this surely must point to the end of asset value growth....

Daily Express: House prices rising again

Home owners are breathing a sigh of relief after new figures revealed house prices are rising again in many areas. A predicted slump in the housing market has not arisen, despite the credit crunch. Latest research by the building society Nationwide yesterday revealed prices nationally were up 4.8 per cent year on year. Housing expert Peter Bolton King from the National Association of Estate Agents, said: “Despite the considerable doom and gloom lately, the figures show that there is no need for pessimism.

Telegraph: Property market: What's in store for 2008?

I'm Glad I'm not the Birmingham BTL Investor!

Times: Time to get real as the credit flow dries up

A rounded view of the year ahead

Motley Fool: We're All Living On Fantasy Island

Elliott and Atkinson made some Cassandra-Like dire predictions in April 2007. 'The decade from 1997 onwards when, following a massive electoral victory by New Labour, Britain looked forward to a brighter future. However, the Blair Years were also a decade of spin and paradoxes which have left the UK teetering on the brink of a serious downturn.'

Daily Express: House Prices Rising Again

They claim that because houseprices still show a rise on this time last year that everything is OK, and prices will continue to rise

Property Week: Lipton fears 1990s style property crash

'One of the things I remember very, very clearly from the early days of the 1990 cycle was that no one ever believed it could happen,' he told the Financial Times.

IFAonline: 2008 INSIGHT: A tough year for property

The second half of 2007 was particularly tough for mortgage lenders and the property market in general as the US sub-prime crisis hit credit markets around the world. However, many players in the market are still optimistic about 2008, despite claims that the UK housing market could suffer a severe blow from the credit crunch.

BBC: Documents show 1977 police unrest

I personally know of two Police Officers who have second jobs just to keep their heads above water and keep their mortgage payments up. Official records released today under the 30 year rule reveal just what can happen when politicians play with inflation - may this serve as a warning Mr Brown.

CBC - Canada: Oil, loonie climb higher

Oil prices crept higher on Friday amid U.S. supply concerns and world tensions following the assassination of Pakistani opposition leader Benazir Bhutto.

Wall Street Journal: The Making of a Mortgage CDO

This should be on as a permanent link on this site!

Bloomberg: Sales of New Homes in U.S. Dropped 9% to 12-Year Low

Sales of new homes in the U.S. fell to a 12-year low in November, pointing to bigger declines in construction that will hobble economic growth throughout 2008. Purchases dropped 9 percent to an annual pace of 647,000 and October sales were revised down to a 711,000 rate, the Commerce Department said today in Washington. Last month's sales were weaker than the lowest forecast in a Bloomberg survey.

Firstrung: Mortgage approvals fall to record lows for second successive month

How long before these disastrous mortgage figures 'bleed' into the house transaction sales figures? Feb at the latest? This close on 50% reduction in mortgage approvals for house purchases indicates that the credit crunch has finally bitten..hard. Will we see a 50% reduction in: estate agents, mortgage brokers, lenders, money advice websites and worse still general commerce? Possibly so given our UK one track economy is tied so inextricably to the housing market.

Firstrung: UK house prices fall for second consecutive month - Nationwide

"Housing affordability is starting from a much worse position than in 2005, while interest rate cuts have started from a higher and more restrictive level. Therefore, this time around lower interest rates are more likely to stabilise market activity rather than re-ignite it." - Fionnuala Earley, Chief Economist Nationwide

FT: House sales signal property market slowdown

Selling a house is taking longer than at any time in the last six years, adding to the growing evidence of a housing slowdown, according to a survey of estate agents to be published on Monday. House prices fell by 0.3 per cent in December from November – the third consecutive monthly drop – according to Hometrack, while the average time to sell was 8.3 weeks, the longest since the survey began in 2001. EDITOR’S CHOICE Forecast of stable house prices next year - Dec-20Novice buy-to-let investors squeezed as market cools - Dec-14Lex: UK housing - Dec-13UK housing market slows still further - Dec-13House price inflation falls - Dec-07Interactive house price map - Dec-07

BBC: House prices in 2008 - up or down?

"The long overdue housing market correction now appears to be underway" Lets just hope the 10 year Ponzi property trick won't leave us all jobless.

Purdue University: ANALYSIS OF BUBBLES: from inception to aftermath of its burst

This is a very interesting read. I thought the following of particular interest:- ''The dangerous [type of bubble investor] comes...when the second type of speculator enter into the game. This type is related to what is known as the “greater fool theory” which states that an asset should be purchased as long as there exists at least one “greater fool” to whom that same asset can be sold at a higher price.''

Business wales: Bleak prediction for 2008 from experts

The Nationwide indicated a further slowdown this morning and both the TUC and ICB gave gloomy predictions for 2008 as well. They indicated living standards would fall and there would be less jobs available.

Telegraph Co Uk: Credit crunch set to push up bankruptcies

A short piece which highlights the plight of the sheeple. Looks like a number of properties will be coming onto the market then. I wonder how the banks/building societies will manage the flood. I assume they will seek to minimize the impact of a large number of homes coming onto the market to protect house values. How?

Nationwide: House prices fall by 0.5% in December

Main points:- ''House prices fell by 0.5% in December, the second consecutive monthly decline'' ''The average price of a UK property is £8,334 higher than a year ago''.....and here is the really interesting bit ''Rate cuts will help but are unlikely to re-ignite the housing market as in 2005''

Times Online: Huge rate rise looming for sub-prime credit card users

''Fresh evidence of a squeeze on consumer credit emerged yesterday as one of Britain’s top sub-prime credit card issuers pushed through a huge rise in its lending rates....Marbles, the private equity-owned card provider aimed at borrowers with patchy credit histories, is preparing to hit some of its 338,000 account holders with annual interest charges of as much as 33.9 per cent for cash advances. Marbles will also charge an annual 26.9 per cent rate of interest for purchases.''

FT: UK jobs outlook worst for a decade

The outlook for the UK jobs market is the worst for a decade with unemployment and redundancies expected to rise in the wake of the international credit crisis. The jobs slowdown could prompt bigger cuts in interest rates than currently anticipated to head off the threat of recession. HR professionals will have to deal with the tricky task of compulsory redundancies.

Market Oracle: Crude Oil Forecast 2008 to Hit $150 a Barrel

With demand high, supply falling and the U.S. increasing it's stock the price of oil is only expected to rise. Why is the U.S stockpiling oil when it is so expensive asks the author?

Skandia: Skandia Indicator

I've been using this for years and I thought some people on here might be interested. 12 Month Predictions: 10 investment banks > 5% drop 7 investment banks - no movment up or down greater than 5 % HSBC (haha) - much greater than 5% rise in house prices.

Reuters: Gold jumps after Bhutto death, platinum hits record

"Gold jumped on Thursday, hitting a one-month high as geopolitical tensions mounted, prompting a flight to safe-haven assets". Spot platinum set a historic peak, tracking gold with further support from positive fundamentals.

This is Silly: Big sales stampede starts before dawn

....bunch of idiots buying last years fashions they don’t really need with money they probably can’t afford to spend.

Washington Times: Blame abounds for housing bust

This year's housing bust is shaping up to be one of historic proportions. Sales and construction have sunk to levels not seen since the 1990 savings and loan crisis, while foreclosures and price drops are the largest since the Great Depression — and expected to get worse next year. Many parallels can be seen with earlier housing debacles. Each episode had some combination of easy money, loose lending, greed and fraud that turned a housing boom into a speculative bubble. But few housing bubbles have ended so badly as the one today, when the nation is confronting the prospect of mass foreclosures and family dislocations.

Wall Street Journal: Credit Downturn Hits the Malls

The credit crunch triggered by the downturn in the housing market is creating problems in commercial real estate, driving down prices of office buildings, shopping malls and apartment complexes, and leaving some owners scrambling for cash.
One victim is Centro Properties Group, the fifth-largest owner of shopping centers in the U.S. The Australian real-estate company saw its share price fall by 90% in two days last week as it struggled to refinance short-term debt it took on to fund its $6.2 billion acquisition of New Plan Excel, one of the biggest owners of strip malls in the U.S.

The Herald: Scotland sees biggest house price hike in UK

Scotland and south east England saw the biggest hike in house prices last year, according to a survey published today. Thirteen of the top 20 towns which experienced the largest increases across the UK were from the two areas.

Daily KOS: Credit Crunch vs. Central Banks - You Lose

The credit crunch that started in August is threatening to bring the economies of the entire 1st world to a grinding halt. To combat that the central banks of America and Europe are pumping cheap money into the markets at an unprecedented rate. These actions are not without consequences.

The Age: Americans 'walk' from loans

Nearly 180,000 US local councils were placed on credit watch, with the credit agency Fitch releasing another $US5.3 billion in credit downgrades involving 27 mortgage companies. The news emerged on Friday night, when the nation's newspapers, even if they were following the story, would miss it. That one company could downgrade 27 major financial institutions in one stroke is stunning, but it follows a swathe of credit downgrades that swept the US on Thursday and Friday. There has been a major falling out between mortgage insurers, credit rating companies, banks and mortgage institutions, which believed their loans were insured, only to be stunned to find themselves booted into the mire that is American banking.

Reuters: Pound hits all-time low vs euro

"Sterling, which has the highest interest rates in the Group of Seven industrialised nations, benefits from the carry trade where investors borrow low yielding currencies such as the yen to fund purchases of higher yielding assets in other currencies.However, investors flee from the relatively risky carry trade when jitters set in". (Jitters, what jitters?)

Times: Outlook bleak but not critical

Mortgage approvals are considered an early indicator of what is likely to happen to property prices in the months ahead, so the 44% slump in approvals in November is worrying. But the signs point to a gentle correction rather than major crash. House prices are notoriously sticky on the way down because vendors are reluctant to accept less than they perceive their homes to be worth. As long as the economy holds up and unemployment doesn’t rise significantly there is unlikely to be enough forced sellers to trigger a full-scale slump. The number of home repossessions is set to rise 50% next year, but this is still low historically. In most areas there is also a shortage of housing supply.

BBC News: Bank mortgage approvals stay weak

Mortgage approvals at the biggest UK banks have steadied, but lending levels for November are still more than 40% below the same month last year.

Times: More rate pressure as new mortgage figures plunge

"The Bank of England came under mounting pressure to cut interest rates as early as next month today as official figures from Britain's high street banks showed that new mortgage lending dropped by 43.5 per cent last month compared with last November." -- OH REALLY? I don't remember the bank coming under pressure to raise rates while the market was booming, why step in now?

Telegraph: Citigroup could slash dividend by 40pc

When will all the truth come out, its scary knowing were approx a year behind the USA. Will the UK banks go through this as BoE's Merving King warns a painfull correction. Its not looking good.

Telegraph: Mortgage approvals tumble 44pc

With mortgage approvals tumbling 44% and equity withdrawals falling as well it does not bode well for the UK housing market. The cdedit crunch is deepening every day. "Mr Archer revealed that he now expects house prices to fall 3pc next year, having previously predicted that prices would flatline at 0pc growth. He added: "This ongoing evidence that the housing market is currently slowing markedly maintains pressure for another interest rate cut early in 2008."

FT: November mortgage approvals down 40%

"The housing market remained in the doldrums in November, with mortgage approvals more than 40 per cent below their level the previous year, according to the trading body which represents Britain’s largest banks."

times online: Villains aplenty but few heroes in sad tale of debt tragedy

Credit crunch – what credit crunch? The headlines may blaze with warnings of economic meltdown, but the car park at the shopping centre was nearly full by 7am. We are like addicts, embarking on a shopping spree to sate our desires, despite knowing that the comedown is going to hurt. It seems, this year, as if fear of that comedown is perversely fuelling even more excess than usual.

Telegraph: Crisis may make 1929 look a 'walk in the park'

Buckets of liquidity are being poured into the North Atlantic banking system with meagre or fleeting effects with many top economists warning that the world's central banks are risking a policy error of epochal proportions. B of E Markets director Paul Tucker states that 'the crisis has moved beyond the collapse of mortgage securities, and is now eating into the bedrock of banking capital'.

BBC News: £500m revamp plan for Longbridge

Two days ago they were splashing out £20M (peanuts) on redeveloping the west of scotland, now its £500M (walnuts) on the former Longbridge site. The thing that strikes me is that it includes 1400 homes, a shopping centre and a paltry £20M 'innovation centre'. Another industrial site bites the dust, god knows how they think they are going to stuff 10,000 jobs the site when most of it will be housing?

More soft-soaping for the masses I'm afraid.

Telegraph: House prices in US fall at record rate

But apparently due to an influx of Polish strawberry pickers combined with sound fundamentals, homes here according to some sources will go up by 1% in 2008.

The Times: Worst decline in American house prices may not be finished yet

American house prices declined at their fastest rate for more than six years in October, with homes in Miami losing 12 per cent of their value, it emerged yesterday. According to the Standard & Poor’s/Case Shiller index of house prices in the US, the value of existing, single-family homes fell 6.7 per cent in October compared with the same period the year before. The figures indicate that America’s housing recession – already the worst for 16 years – is far from over. Professor Robert Shiller, co-founder of the index and an economics academic at Yale University, said: “No matter how you look at these data, it is obvious that the state of the single-family housing market remains grim.” The 6.7 per cent fall surpasses a 6.3 per cent drop in April 1991

BBC: US asset rescue scheme abandoned

A plan by US banks to help calm down rattled credit markets has been dropped weeks before it was due to launch. Citigroup, Bank of America and JPMorgan Chase said they had shelved the $75bn (£37bn) fund designed to buy debt of weakening value to avoid panic selling.

BBC News: Bye Bye Brands...

Interesting article from the BBC showing the decline in the past 50 years of home grown British products "made in england" moving overseas. HP sauce is the main focus of the article, which also touches on Wedgewood, Aston martin and Cadburys. What is going to happen when there is nothing left to export (manufacture) and the companies all have their HQ in other countries?

S&P: Home prices in 20 major U.S. cities were down 6.1% released Wednesday by Standard & Poor's.

"Given conditions relating to mortgage financing, and the number of unsold homes that is piling up, all regions are likely to continue on a negative trend in the months ahead"

Firstrung: House prices could fall in 2008 due to increasingly gloomy consumer confidence - Lloyds TSB

“The slump in confidence over job security, coupled with the pressure of rising prices does not bode well for the New Year. This combination could dampen consumer spending and have a knock-on negative impact on the housing market. However, the fact that official labour market data remains strong offers some hope that job fears may be short-lived. Although our survey suggests that December’s interest rate cut has so far had little impact on sentiment, a further two cuts early next year – which we expect – may offer a welcome boost to confidence.”

Sky: Tory MP's Wet Night Sleeping Rough

"A Tory MP has spent a wet night sleeping rough on the streets of London to highlight the issue of homelessness". In a separate interview he told BBC "People think the housing ladder begins with getting your first mortgage, but it begins with people sleeping on the streets".

This is Money: Will your home sell?

Pundits are predicting that 2008 will be the year when the party ends for rapidly rising house prices. Most experts are suggesting a gloomy year ahead for the property market after a decade of huge growth that has seen the cost of the average home rise from £70,000 to £195,000 See below for the predictions for 2008

BRC: CASH STRAPPED CUSTOMERS MEAN BUMPER JANUARY SALES

"With a challenging first half of the year virtually guaranteed for all consumer-facing businesses, retailers will be discounting well into 2008. On its own, December's interest rate cut won't overcome the developing slowdown. I hope the Bank of England have more pencilled in for January and March or April."

MSNBC: News Article

SAN FRANCISCO - Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come. No-one can get credit, and what credit they have they can't repay, despite rate cuts.

My Finances: Bad advice bites at the Christmas table

Most bad advice (49%) seems to cover savings and investments, while 19 per cent concerns mortgages, so if there is a BTLer across the table from you tomorrow just smile and say nowt.

Reuters: GLOBAL ECONOMY WKAHEAD-Consumer spending foundation cracking

"From Madrid to Malibu, the housing meltdown is cracking the foundation of consumer spending, and barring a last-minute shopping spree this week, the holiday season looks likely to be the latest casualty". "The wild card may be politics as the United States heads into the 2008 presidential election. President George W. Bush hinted last week that something may be in the works, saying he would consider "all options" to help the economy". (Not another war - surely?)

BBC News: Pound at record low against euro

The pound has fallen to a record low against the euro, as dealers expect more Bank of England (BoE) interest rate cuts in 2008. The pound bought just one euro 37.6 cents in quiet Christmas Eve trading.

Firstrung: Number of first time buyers at its lowest since 1980

Not new news, it`s been disected ad nauseum during the past few days. However, I thought it was worth posting the unedefying un-abridged version direct from HBOS. Its gonna be a helluva 'meeja inspired fight' for hearts and minds as we watch prices fall back to 2004 levels as a minimum correction. Let`s hope, once all the S.H.I.T. has hit the fan, the meek inherit the earth..or at least a 2 bed terrace for a price somewhere near 3.5 joint income eh? MERRY XMAS FROM THE FIRSTRUNG TEAM =:¬)

Firstrung: Investors ignore market cycles at their peril

John Wood, senior fund manager of the J O Hambro Capital Management (JOHCM) UK Opportunities fund. "What we are currently experiencing is a normal market cycle, and we will see the usual phases of "Regret" and "Recovery" following a "Recession" . The time to buy equities will be during the "Regret" phase."

aboutproperty.co.uk: Homes 'unaffordable' in 96% of UK

With news out today of another drop in house prices and further news over 96% of UK houses unaffordable it looks like we could be in for a very sharp decline in house prices.

Telegraph: Houses taking longer to sell as slowdown bites

"...mortgage lenders have not extended as many loans ..."
"Hometrack has warned that home owners will need to start cutting their asking prices significantly if they want to sell their houses."
"A big proportion of people who move house do not need to - they are only doing so because they can afford to," said Mr Donnell.
"At the current pricing levels, they might as well just sit on their hands and wait for the prices to come down."
And if the whole chain renegotiates downwards, then the ONLY LOSERS are the baby boomers at the top and all the financial industry vested interests.
Most of us WIN.

Bloomberg: House prices fall the most in three years

Hometrack reports UK house prices fell for a third straight month, dropping 0.3% in December. The annual rate of HPI has now fallen to 3%. "The second half of the year has seen a major reversal in confidence,'' said Richard Donnell of Hometrack.

guardian: Homes harder to sell even after three months of falling prices

House prices fell for the third month in a row in December, according to the monthly Hometrack survey. The time it takes to sell a house has increased to more than eight weeks, the longest period since the report began in December 2001. Average house prices fell by 0.3% this month, with some estate agents reporting falls of as much as 30%. Stronger prices in the first half of the year led to a 3% average price increase across 2007 as a whole.

Bloomberg: Pound Falls to Record Low Against Euro

The pound fell to its lowest ever against the euro as a report showing a decline in house prices stoked speculation the Bank of England will keep cutting interest rates to shore up the economy. The average cost of a home in England and Wales slipped for a third month, dropping 0.3 percent to 175,200 pounds ($348,350), Hometrack said today.

Guardian: High anxiety keeps wage rises lower

Wage inflation is low as people are fearfull of demanding large pay rises as they may be made redundant and their job offshored. This only applies to those at the lower end of the salary scale. At the higher end (e.g. MP's) their is no such fear - shame can we really not offshore our MP's job's?

FT: Trichet to focus on eurozone inflation

The ECB plan to hold EU interest rates at 4% to deter inflation and second round effects such as wage inflation. Also at their meeting on 6 Dec some members wanted to raise interest rates. Sounds like our Spanish holidays will get more expensive as sterling falls.

Telegraph: Brown: MPs selfish for demanding pay rise

Go on boys fill your boots!!!! MP's demand inflation busting 10% pay rise!!! I assume as Gordon is keen on investment we will see an improvement in productivity from the MP's; or are we better off letting them sleep?? Oh I can hear their defence now - we work late etc etc however, I don't think they will mention that they start late and they have a three month summer holiday and a long Christmas holiday. And this is on top of their index linked gold plated pension. Oh and I almost forgot they also get 100,000quid in expenses per year!!! What do we get in return???

Times Online: House builders dig in for deep freeze in residential property

The slide in house prices is gathering pace, a survey suggests today, amid signs that housebuilders are digging in for a prolonged residential property freeze. Tulloch Homes, a medium-sized Scottish housebuilder, pulled plans yesterday for a £200 million flotation, and Taylor Wimpey is understood to have ordered a halt to any new land acquisitions.

Citywire: Sell your house and fast to get out at the top, experts say

This very moment might be the best time for homeowners to sell their property and buy another if they wish to take advantage of the market climate.Kelvin Davidson, a property economist with Capital Economics, said: ‘The downward movement is already started, as the Halifax has fallen three months in a row and we had a fall on the Nationwide. So if you are going to do it, there’s probably no better time then the present and we expect falls to keep going so the peak might already have passed.’

Bloomberg.com: U.K. Christmas Retail Sales to Beat 2006 on Discounts, BRC Say

U.K. Christmas-season retail sales will ``certainly'' be higher than last year's, driven by discounting that has brought out shoppers in the final 10 days, the British Retail Consortium said.

Telegraph: Crisis may make 1929 look a 'walk in the park'

As central banks continue to splash their cash over the system, so far to little effect, Ambrose Evans-Pritchard argues things are rapidly spiralling out of their control

Sunday People: FIRST-TIME BUYER CRISIS

Experts at the Halifax warn that 96 per cent of First Time Buyers wanting to buy cannot honestly manage the mortgage payments and RICS follow up at the rear of the article by stating that they will soon be OK because house prices are falling and repossessed homes will be coming on to the market soon and NewLiebor are going to build 3 million new flats (sorry homes) by 2020.

Well thats alright then innit!

The Oil Drum: Oil prices or subprime losses?

An interesting Post which looks in depth into a question posed by a recent article, will high oil prices or sub-prime be the biggest economic driver next year? In asking the question it brings together many of the best house price graphs and compares it against the issue of $100 oil. It is from an American perspective, but interesting nonetheless.

The Times: Cheer up, things aren't that bad

How much more gloom can you take? HBad news sells, so perhaps I should be laying it on with a trowel. We have the credit crisis, the budget deficit is overshooting and the pound has fallen. But there is reason to be optimistic. If you believe that a big, 10% fall in house prices (which I don’t expect) would take us back to the negative equity of the early 1990s, and leave banks with dodgy mortgage books, then fine, but it is not true. Loan-to-value ratios have been kept under control, so mortgage books are insulated from quite a big fall in prices.

S Times: Beat buy-to-let payments shock

'THIS was the year that buy-to-let started to crumble', '...at the Countrywide estate agency “We are noticing a growing number of landlords are opting to sell their property rather than relet.” ', 'The situation could get worse next year when about 250,000 buy-to-let loans will be up for renewal. '

BBC Radio 4 - The Now Show Podcast: We Pretty Much Broke The Bank For You This Christmas

Listen at 24 min:45 sec in.

Observer: Which way now when the world has shifted?

If you landed in London from another planet this month and picked up the Financial Times's glossy How to Spend It magazine, you would not suspect for a nanosecond that there was a crisis on the world money markets. In 120 pages of unabashed haute consumerism, ads for Tiffany ran alongside features on record couture sales at Christian Dior, with scarcely a hint at harsh realities such as multibillion-pound bank write-offs, smaller bonuses and lost City jobs.

Telegraph: ASSETZ: HOUSING CRASH? DON'T BELIEVE THE HYPE

"The danger is that people are now beginning to believe such spurious claims, offering a further knock to consumer and investor confidence. While there is no denying that the rate of house price growth will continue to slow in 2008, this is the result of a widely anticipated period of stabilisation, and is not the beginning of a housing market crash, as is being touted within the industry" Who do you think you are kidding Mr Law?

Times: Big-ticket punters see fall ahead for housebuilders

Article about the predictions for housebuilders next year. Interesting first three paragraphs.

Telegraph: Desperate first-time buyers still have options

"Getting a foot on the property ladder can seem impossible - low-paid jobs and sky-high house prices have pushed up the average age of a first-time buyer to 33. But buying your first home in your twenties may still be possible." -- Yes, and being repossessed in your twenties may also still be possible!

Herald: If greed is good who foots the bill?

"Two years ago Rosie Millard, the former BBC arts correspondent turned buy-to-let investor went broke, admitting she survived by shifting her debts from one credit card to another. Once, rather than admit to such shame, the middle-class debtor would have gone into the library and done the decent thing. Middle-class values were once grounded in prudence, in a distaste of debt, in saving for the things one wanted."

Scotsman: Buy-to-let in crisis if not in freefall

"One of the biggest pressures on surveyors currently is on rental value. We get hundreds of calls a week from buy-to-let investors who want to push rental figures as high as they will go. But surveyors have a responsibility and a duty to the lender to give realistic advice." P.doff, where are you? can you please comment to the role of surveyor in this BTL craze. Similar to the role of equity analysts in the dot-com bubble. "the perfect storm would be if legislation were to affect the offset of interest payments on a loan against tax. More than a quarter BTLs would offload significant parts of their portfolios." Well, well, well... Alistair Darling sure will need some cash going forward... less City taxes, less oil taxes...AHAHHAHHAHA

FT: Benign indifference by regulators as buy-to-let sector grew

"Sir, We are only slowly beginning to recognise the many ramifications of the US-led credit crunch, but the demise in UK buy-to-let financing does not only affect borrowers (“Buy-to-let financing evaporates”, December 15/16); the four biggest casualties will be the government’s housing plans, housebuilders’ profitability, investors who should have been protected by the Financial Services Authority and lenders secured against overpriced flat investments" Charles Fairhurst, Chief Executive, Fairbridge Residential Investment Management, London W1U 2RE

ABC News: Climb Aboard The Bus!

With home foreclosures on the rise, one man is making the best out of a bad situation. Cesar Dias, who has been in real estate 18 years, is making sure that the foreclosed houses in his hometown of Stockton, Calif. are getting sold, in a quite unusual way. Dias leads the weekly "Repo Home Tour," where he fills two large, brightly colored buses with prospective buyers looking for houses with big price reductions. There is almost an art to the way he makes the home-buying experience fun. He tempts prospective homebuyers with sweets and good cheer as if the whole thing's a party, then loads the whole crowd onto a couple of buses as if they're all going on break.

BBC Breakfast News: First-time buyers 'at fresh low'

I was watching Breakfast News this morning and heard the interview with Rightmoves spokesman. A carefully worded piece in response to the first time buyer issue, but I couldn't believe the freudian slip: "in a sense we're living on borrowed time" with reference to the fact that BTL and parents helping FTBs have extended the demand for property.

HPC: Gordon Brown

After weeks of depressing new about house prices crashing and banks going bust it is time to have some fun. I have started a wiki page on Gordon Brown 2007 school report. Feel free to amend as it will only get better.

The Times: First-time buyers are scarcer than at any time for 30 years

The number of first-time buyers has fallen to its lowest since 1980 as rising house prices have forced prospective homeowners to rent properties or live with their parents. About 300,000 people bought their first home this year, down from 532,000 in 2002

The Times: ‘It just feels like the worst time to buy’

‘It just feels like the worst time to buy’

Telegraph: Barclays set to do battle with Bear Stearns

In law, as in life, timing is everything. And so there was little coincidence that Barclays chose the afternoon before Bear Stearn's fourth-quarter annual results to file its $400m-plus lawsuit alleging all manner of woes. As Bear's executive committee put the finishing touches to its damaging fourth-quarter results statement, so Linklater's Lawrence Byrne was filing the 75-page suit at New York's downtown federal courthouse.

Reuters: Pound hits all-time low against euro

The pound hit an all-time low versus the euro on Friday as expectations of an interest rate cut on the back of a slowing economy led investors to sell the currency. The pound held near its lowest in more than a year and a half on a trade-weighted basis as news on Wednesday that the Bank of England's Monetary Policy Committee was unanimous on this month's rate cut firmed investor conviction that more monetary easing is imminent. A raft of negative data in December has also led to increased speculation that the Bank will cut rates aggressively in 2008.

The Wall Street Journal: Fraud Seen as a Driver In Wave of Foreclosures

Mortgage companies made themselves vulnerable to fraud by bringing in "stated-income loan" also known as "liar lones". Even big names like Bear Sterns got defrauded this way. "Mr. Wright was a phone technician earning only $105,000 a year, with assets of only $35,000, and his wife was a homemaker. The palm-tree-lined mansion they purchased with Bear Stearns's $1.8 million (after claiming he earned $50,000 a month) recently sold out of foreclosure for just $1.1 million."

Firstrung: First time buyers reach lowest levels since 1980

The 5th annual Halifax First Time Buyer Review, which tracks housing affordability in 483 post towns, reveals that an estimated 300,000 first-time-buyers entered the market in 2007 compared to 532,000 in 2002. Terraced homes were the least expensive property type for first time buyers but in 71 per cent of towns across the UK, first-time-buyers are unable to afford terraced houses, compared to only 11 per cent of towns where terraced homes were too expensive in 2002.

Firstrung: Consumer confidence at lowest ebb since 1995

As 2007 draws to a close, we see that Consumers are suffering from a dose of realism. All five measures dropped this month; the major purchases measure saw the biggest drop this month of seven points. Traditionally at this time of year you would see a drop whilst Consumers wait for the January sales, but this combined with reports of a "credit crunch" has resulted in this measure dropping to its lowest level since June 1991

Bloomberg: Lehman Faces Lawsuit by Australian Municipal Councils

Lehman Brothers Holdings Inc., the largest U.S. underwriter of mortgage-backed bonds, faces legal action by Australian municipal governments after the value of their subprime-related investments dropped as much as 86 percent. Wingecarribee Shire Council, in New South Wales state, is suing Lehman for ``deceptive and misleading conduct'' in selling A$3 million ($2.6 million) of subprime-linked collateralized debt obligations, the council's managing director Mike Hyde said in a media statement today.

RTT News: Credit Agricole Takes Further 1.6 Bln Euros Writedown

French bank Credit Agricole announced that it would take an additional write down to the magnitude of 1.6 billion euros. The company joins the list of financial firms that has come public about their bruises from their exposure to the tarnished subprime mortgage market.

Telegraph: Private investors cash in shares in record numbers

"November saw net outflows from funds for the first time since records began in July 1992. More than £600m was withdrawn from equity funds, while investors continued to run from commercial property funds, with £253m withdrawn. There had been growing evidence that investors were cashing in commercial property funds, but it is the first time that nerves among equity investors have begun to show." -- Time to sell up?

Times: Despite signs of foreboding, recession is not a certainty

"Past episodes of recession could be traced to a combination of a few, key triggers: tighter economic policy through elevated interest rates, higher taxes or lower government spending; blows to Britain from economic problems abroad; collapses in consumer and business confidence; and a severe worsening in the financial position of either companies or households, or both." hmmmm... sounds like today. "Confidence has faltered in the present housing market, but housebuilders believe that the market is set for a slowdown, similar to the winter of 2004-05, rather than an outright crash. Prices have levelled off and sales volumes have fallen by up to 20 per cent since October." Yeah yeah yeah

The Telegraph: Debt fears push sterling to 20 month low

The pound has slumped to its lowest level in 20 months, after a "shocking" raft of figures revealed how deeply reliant the UK has become on debt. Britain's current account has recorded its worst deficit since the late 1980s, making Britain's national balance sheet worse than the United States' for the first time since Nigel Lawson was Chancellor of the Exchequer.

FT: Fed Shrugged as Subprime Crisis Spread

"Edward M. Gramlich, a Federal Reserve governor who died in September, warned nearly seven years ago that a fast-growing new breed of lenders was luring many people into risky mortgages they could not afford. But when Mr. Gramlich privately urged Fed examiners to investigate mortgage lenders affiliated with national banks, he was rebuffed by Alan Greenspan, the Fed chairman."

FT: [Greed & Fear] Financial constipation: The big ‘dump’ is coming

Lots of good stuff here: "The “gob-smacking provision” of U$500bn of liquidity by the ECB this week is proof, if it were still needed, that a large part of the festering structured excreta lies in Europe, says CLSA’s Christopher Wood, in his weekly client newsletter Greed & Fear." "On the subject of Greenspan, Wood comes back to a pet topic. It is “incredible”, he says, “that the world still takes Pinball seriously”:"

MoneyWeek: 'Tis the season of self-delusion

There may be no recession until after Christmas, but as sure as you’ll still be half a stone overweight after your January detox, one will follow pretty soon after...

BBC: Credit Crisis Grips Bond Insurer

MBIA admits to large and under capitalised sub prime exposure. Threat of rating downgrade with consequent knock-on effect onto the bonds it insures.

Thisismoney.co.uk: Panicking investors locked in by Friends

I wouldn't like to be invested in commercial property at the moment whether it be shares, funds or owning them. We could have meltdown big time soon.

Guardian: The nightmare: locked inside as the walls cave in

Could this be a run on the property funds? Well it looks like it could be. Commercial property looks like we are heading for meltdown.

BBC: Downturn hits Friends investors

More gloom in the property sector as withdrawals are frozen. Otherwise the fund would be forced to sell properties which would make the situation far worse. Its a very bad omen though.

Times Online: Grim data undermines Brown's economy claims

" As a proportion of GDP, this left Britain's balance of payments as deep in the red as that of the United States. The percentage deficit matched records set in the 1980s boom." Following a spate of reality, it's becoming even more obvious that we're being fed positive news.

Reuters: UPDATE 2-Goldman, M.Stanley bid for Daito stake-sources

Goldman Sachs and investment firm Aetos Capital LLC are also interested in acquiring Daito, the sources said, and the value of the deal could ultimately exceed $10 billion. Land prices in Japan started to pick up last year for the first time in 16 years against a backdrop of an economic recovery. With interest rates in Japan near rock bottom, the low cost of funding has made Japanese assets attractive.

Reuters: CIBC Warns of 'Large Charge' as Subprime Woes Grow

There is a "reasonably high probability" that Canadian Imperial Bank of Commerce will report a "large charge" in its first-quarter results, the bank warned on Wednesday, as pain from its exposure to the U.S. subprime mortgage market deepens. CIBC, Canada's fifth-biggest bank, did not give a firm figure for the charge but said the subprime hedge protection it bought from troubled bond insurer ACA Financial Guaranty Corp was valued at $2 billion as of Nov. 30.

Whoopsie.

Blogging Stocks: Could Citadel's valuation of E*Trade's CDOs wipe out capital at three big banks?

• Morgan Stanley: -$29 B (subtract 73% of Morgan Stanley's Level 3 assets of $88 billion -- or $64 billion -- from its capital of $35 billion).
• Goldman Sachs: -$14 B (subtract 73% of Goldman's Level 3 assets of $72 billion -- or $53 billion -- from its capital of $39 billion).
• Bear Stearns: -$2 B (subtract 73% of Bear's Level 3 assets of $20 billion -- or $15 billion from its capital of $13 billion).

Financial Crookery: The Bond Insurance Barge Scam

Spot the difference: (A) In 1999 Enron effects a transaction through an SPV allowing it to get a [Nigerian power-generating barge] off its books allegedly in order to improve its reported numbers for the period. Later the trade has to unwind and the barge must be brought back on the books rendering Enron exposed to its real (somewhat less impressive) value all the time. (B) In 1999-2007 investment banks effect transactions with SIVs allowing them to get a [lot of credit clag(1)] off the books allegedly in order to improve reported numbers for the period. In 2007 under adverse liquidity conditions [the SIVs with the worst liquidity constraints] fold and the credit clag must be brought back on the books rendering the banks exposed to its real value all the time

Gold Money: Print, Print, Print

Finance Minister: General Idi Amin Dada, there's no more money left in the Treasury

Idi Amin: Well go print some more

Let's flash back to Weimar Germany in 1923. As that country's monetary problems worsened, the central bank, the Reichsbank, in the misguided thinking of that day printed one-half trillion of Reichsmarks. It also had the aim to provide liquidity.

Is there anything essentially different between what the Reichsbank did and what the ECB just did? Absolutely not.

Guardian Unlimited: Barclays downgraded on credit crunch fears

Yet, Goldman is technically insolvent if it brought its level 3 assets onto the books. And they have the nerve to crow about others! Could they go the way of Arthur Andersen?