March 2008 Archive
Sunday, March 30, 2008 
Great stuff, well worth a listen
BBC Radio 5Live: Return of the Debt (mp3)
How would you feel if you suddenly found out that you owe tens of thousands of pounds for a debt that you didn't know you had? The 5 Live Report has learned that people whose homes were repossessed over a decade ago are now being pursued by lenders who say they didn't recover enough money from the sale of their property. Reporter Penny Haslam speaks to people who have rebuilt their lives, with new families and new homes, who are now facing court action for debts that have come back to haunt them more than 10 years on.
House prices likely to fall by a quarter in two years
Daily Mail: House prices likely to fall by a quarter in two years
House prices in Britain could fall by 25 per cent before mid-2010, forecasters at Capital Economics have warned.
Competing to be the worst deal
Independent: 'Vicious cycle' for borrowers as more mortgages are withdrawn
As mortgage companies compete to avoid business, could the internet be taking a new role? Price comparison sites were not around last time. Now, you can find out the best deal in a few seconds. This will speed the feedback process of banks withdrawing best deals literally to the speed of light. The second a lender pulls the best deal, another lender, who is now the best deal, gets inundated, and pulls their product or puts up rates, and so the cycle continues, until when exactly? The viscious cycle means even more deflation, which makes assets yet more risky, and so the trough should be greater for this and other reasons this time around.
THE US Federal Reserve is to give everyone in America a spaniel in a bid to prevent recession in the world’s biggest economy.
Daily Mash: GLOBAL ECONOMY NOW RUN BY F*CKNUTS
It is the largest domestic pet the US central bank has given out, and almost ten times the size of the chinchilla issued to every household in the wake of the dotcom crash of March 2000.
How Much Would You Get For Screwing Up Your Company?
Guardian: Ex-Northern Rock boss gets £750,000
Northern Rock will ignite a storm of controversy tomorrow when it reveals that its former boss Adam Applegarth received a £750,000 pay-off when he left last December.
If You've Bought An Apartment In Spain I Hope It Isn't One Of These
Entrepreneur: Buying Property Abroad? Beware Of Fool’s Gold
Article about Brits buying property in Spain and getting caught out by not using solicitors. I just hope one of those apartments in the picture isn't yours.
Have it!
Telegraph: Hedge Fund "Legends" hit by Financial Turmoil
Even when the markets turned last year, the hedge funds' high jinks continued. Stephen Partridge-Hicks, the former Citibank debt guru and head of Gordian Knot, one of the big credit hedge funds and so hit first, tackled the crisis by splurging thousands of pounds on a show-stopping party. In October, as his fund tanked, he chartered a plane to fly 150 mates to Morocco where he had hired Marrakech's upmarket Amanjena hotel for a James Bond-themed party. On top of the usual champagne and haute cuisine, Patridge-Hicks staged a James Bond scene - complete with actors, stunts, a real submarine and a fly-by from two Mig jets - starring himself as 007.
Flat broke at the Waterfront
Evening Star: Flat broke at the Waterfront
Even more evidence that the new-build apartment bubble has already burst - if any was needed. There are still lots of 'luxury' apartments under construction here in Ipswich, will be interesting to see how many they can shift.
An Economist's View
san francisco chronicle: asset bubbles
An article from 2005, maybe some one in the banks should of listened? This is a global problem and the only voice i can hear is timber!!
So much for IVAs being the answer to everything....
BBC News: Debt time bomb over repossessions
As fears grow of another crash in the property market, some of those who had their homes repossessed in the last housing slump are still suffering the consequences.
After seven years of plenty,...?
This Is Money: Mortgage famine hits building societies
At the end of a week in which the Bank of England pledged to help ease the credit crisis, homeowners desperate for new mortgage deals were being turned away in even bigger numbers as competitive rates evaporated before their eyes.
Bear rescue won’t end the credit crisis
MoneyWeek: Bear rescue won’t end the credit crisis
Market confidence has been bolstered by the Fed overseeing a rescue of Bear Stearns. But that and its various measures to improve liquidity won’t solve the credit crisis - note that interbank lending rates have kept rising, showing that banks are still hoarding cash. The worry is that some banks may be forced into insolvency as the value of their securities slide.
Taking a swipe at HPC.co.uk
Telegraph: It's not just the property market that's overheated
Phil Spencer, the television property expert, was taken aback by the insults that rained on his head last week. The presenter of Channel 4 programmes, including Location, Location, Location, was described as a "confidence trickster" and a "smarmy snake-oil property-porn merchant". His crime? He had dared to suggest that the property market was not collapsing. Kirstie Allsop, his 36-year-old co-presenter, has also been the target of seemingly orchestrated ambushes when she has taken part in radio phone-ins. The "doomsters", who express their views on a number of "property crash" websites... have a vested interest in talking down the market and spreading fear and uncertainty.
The inflation target has become a joke
ThisIsMoney: Pressure for rate cut as house prices fall
"The Bank voted against another rate cut this month on grounds that inflation was running well above the 2% target, driven by rising food and energy costs. But Fionnuala Earley, Nationwide's chief economist, said the Bank should act in April to ease lending conditions and breathe life into the housing market" after fudging real inflation data with the CPI, now the CPI too is running away, so what you need to do? cut? in the words of Diana C of Lombard Research, the biggest problem the BoE has is to cool this overheated economy. I hope Mervyn and co make the right choice next week. Look at the 59 comments to the article, all say the same. God Save The Pound!
We are in deep sh*t!
Mail: Queen cancels diamond wedding party in wake of economic gloom
"The Queen has cancelled a party to mark her diamond wedding anniversary because she felt it would be "inappropriate" to hold a lavish celebration with the country on the brink of recession" I thing Gordon is already packing.
Consistency? What's that?
Sunday Express: BUY TO LET EXODUS TO SPARK COLLAPSE
DESPERATE landlords are about to flood the fragile property market with buy-to-let homes.
Half a million owners have been badly hit by rising interest rates and are struggling to make a profit on their investment. Experts predict they will want to cash in.
The mass dumping that results could send house prices plummeting to levels not seen since the recession of the early Nineties.
Very bearish stuff
Observer: House prices likely to fall by 25% in two years
House prices in Britain could crash by 25 per cent before mid-2010, forecasters at Capital Economics have warned. That would wipe £45,000 off the value of an average house. Other UK housing bears include David Miles, chief UK economist at Morgan Stanley. He reckons the market is due a 20 per cent correction. If he and Capital are broadly correct, a significant number of people who bought two years ago will find themselves in negative equity by 2010.
Saturday, March 29, 2008
The Devil is in the Detail as Northern Rock publishes its 2007 results
Sunday Times: Northern Rock profits dive after huge writedown
Some interesting snippets in this article including the fact that mortgage arrears in the bank’s mortgage book climbed almost 20% between January and February.
Merryn again
Sundat Times: On the home straight
I HAVE been writing here for years now about all the horrors that are finally coming to light – the end of the credit bubble, recession in America and so on. But the thing that I have focused on probably the most has been the housing bubble. I called its end rather too early (March, 2004!) but I can’t imagine that there are many people left who would still insist – as they have for the past five years – that the sharp rise in prices across Britain has not actually represented a bubble
What Blair's bank thinks about 2008
Finance Markets: Vendors lower prices to secure capital gains
Analysts at investment bank, JPMorgan, are forecasting that UK House prices will decline by 6% in 2008, and continue falling next year. At the end of 2007, the bank was predicting that prices would remain stagnant for at least a year, but last week, Malcolm Barr, JPMorgan’s chief UK economist, described the current situation as “pretty bleak”. Mr Barr explains: “The rapid slowing in prices, the step-up in new supply, and the marked drop in household expectations for house prices suggests the credit crisis has encouraged existing homeowners who were considering a sale to move quickly, and accept a lower price, to realise existing capital gains before they are eroded.”
Listen to Melissa
Telegraph: Fame and Fortune: Melissa Porter
"My worst buy was a Range Rover I bought for £50,000 and later sold for £36,000" but "I've just bought a flat in Holland Park for £600,000 and I think I'll double my money in five months" and "Do you invest in anything else other than property? Yes, I have just started investing in art... I'm spreading my risk in property, art and also I'm thinking about wine. The art dealer I use really knows his onions" Wine and onions on canvas, whatever... I just love her!
Utter tosh and "impartial" advert for Savills International in the FT
FT: Mortgage upheavals and long view of the markets
Listen to the impartial advice and invest in French property! Why? Because mortgages are easier to get abroad and prices continue to grow. Utter tosh but clearly demonstrates that even Savills does not see the point of investing in UK property anymore. Bye bye BTL!
FT reckons HPI is +1.7% not +1.1%?
FT: House prices continue to fall in UK
+1.7% yoy HPI according to the front page of the FT, read the hard copy this morning and couldn't believe they were quoting the wrong figures. NW March report clearly quotes +1.1% yoy. What going on with the standard of journalism in this country? Authors; Chris Giles and Delphine Strauss. Anyone know how to email and complain....it's the front page FFS!
A massive debt pyramid that is teetering on collapse
signs of the times Global Research: Is an International Financial Conspiracy Driving World Events?
The housing bubble has led to a huge inflation of real estate prices in the U.S. Millions of homes are falling into the hands of the bankers through foreclosure. The cost of land and rentals has further decimated family agriculture as well as small business. Rising property taxes based on inflated land assessments have forced millions of lower-and middle-income people and elderly out of their homes. The fact that bankers now control national monetary systems in their entirety, under laws where money is introduced only through lending at interest, has resulted in a massive debt pyramid that is teetering on collapse. Was Alan Greenspan really as dumb as he looks in creating the late housing bubble that threatens to bring the entire Western debt-based economy crashing down?
Sentiment is on the move
Moneyhighstreet.com: Falling house prices become a reality
By Fergal Barry-Murphy. Published On 29 March 2008 Falling house prices become a reality For British homeowners, the key question is no longer whether house prices will fall, but how much they will fall by. Some would argue that we should brace ourselves for a housing crash, while others expect a more subtle adjustment. What is sure is that house prices are falling. There are a number of contributing factors and in this case it is difficult to find a scapegoat for this worrying trend. For the most part, outside factors such as the global credit crunch are to blame. What is more, the rate of growth that we saw through the 1990s and the first half of this decade was unsustainable and had to come to an end at some point.
Only 10%
icwales.co.uk: House prices in Wales expected to fall by 10% as downward trend continues
House prices in Wales expected to fall by 10% as downward trend continues Mar 29 2008 by David Williamson, Western Mail HOUSE prices across the UK fell for the fifth month in a row during March as the market continued its downward trend. New data shows the average cost of a home in the UK dropped by 0.6% during the month to stand at £179,110, according to Nationwide Building Society. Welsh commentators said house prices in the region are expected to fall by up to 10%.
Now talking about a bust
The Times: Credit crunch: Pinpointing the boom's turn into a nasty bust
At last, a tipping point is looming for Britain's national obsession: the housing market. The long boom in residential property prices has clearly been over for months, with volatile moves up and down in prices pointing to the market's shaky foundations. But with hindsight, it may well be that the past month or so will come to be seen as the decisive turning point when the long housing boom mutated into a nasty bust.
Nationwide concedes the market has turned!
Nationwide: House prices
Page 2: negative momentum is building, for the first time more people think prices will fall than rise. Page 3: the 2006-2007 mini-bubble is well and over. Footnote 1: but still the (relative) majority of people think prices will be flat... good try Fioanuanallalllalla!
Media Tosh!
TimesOfLies: What's happening in the housing market where you live?
"Experts give their verdicts on the health of the property market around Britain" sure! "Expect to see heavy discounting of those homes that are too close to a road or a pylon" i.e. 90% of UK homes "The prices of those family homes don't move, except to go up" If sellers were to price more realistically at the same time as lenders were able to normalise lending criteria, we could see a speedier harmonisation of seller expectations and buyer affordability"
Spot the EAs on the Newsnight blog
BBC: Housing in Meltdown?
Here's one idiot "I later caught the end of last night's Newsnight edition and heard the presenter, risibly, express astonishment in his review of the front pages that the Express was running a trend-bucking headline, "House prices continue to rise". The Express is right and it's not rocket science so the BBC should be able to get its pretty little head around the idea."
Want to Know Where Your Tax is Going?
DailyRecord.co.uk: £700k bill to tart up Commons Speaker's free home
COMMONS Speaker Michael Martin's London home has had more than £700,000 spent on it since he moved in, it was revealed last night. The cash went on items such as furniture, art and air conditioning for the grace and favour official residence. An additional £992,000 was spent on Speaker's Garden, although most of that went on improving security in the wake of 9/11.(Oh Good ! I was getting concerned for a moment) The spending spree was revealed last night as he faced pressure over his review of MPs' expenses. Martin, Labour MP for Glasgow North East, was elected Speaker in 2000. These are Figures released under the Freedom of Information Act . This Squeaker is doing OK. Is't he ?
RECORD bad debts in the US home loan market will see bank profits fall from eye-poppingly obscene to unspeakably repulsive, City analysts warned last night.
Daily Mash: BANK PROFITS PLUNGE FROM OBSCENE TO REPULSIVE
"The fact is, they control every aspect of your lives - often in ways you dare not imagine - and could, if the notion takes them, snap you in half like a dry twig."
What is the Fed up to handing Bear Stearns over to JP Morgan, now accepting bad mortgage debt from other troubled banks?
Seeking Alpha: Bear Stearns’ Bailout by the Fed, JPM: A Century Old Conspiracy
I found this article in an unlikely mainstream financial blog which shows from the comments which range from anger to gratitude that it was published. "J.P. Morgan’s chairman, James Dimon holds a board seat at the Federal Reserve Bank of New York. The Fed and U.S. Treasury brokered a deal for J.P. Morgan in haste without question. Usually, such huge deals or mergers would go through committees or FTC oversight, but none of that here –a quick weekend jaunt in the park." If the Fed is such a dubious power hungry private bank why does our BoE play along? I don't think I was alone in thinking over the past few years housing bubble what was really going on, letting so much personal debt build up when there was no hope of paying it back?
Ah Ahhahahhah Ahaha Hah
Express: HOUSE PRICES STILL ON THE RISE
"HOUSE prices have risen by more than £30 every day over the past five years, it was revealed yesterday" Ah haha hahahhahha Ah haha hahahhahha Ah haha hahahhahha Ah haha hahahhahha. Where is Greenbay?
You Are All Wrong
Daily Express: HOUSE PRICES STILL ON THE RISE
Well this made me laugh. Not going to be too long before they can't say they're still rising.
"A long drawn-out grinding decline"
FT: John Authers: Contrary to your expectations
"Mortgage lenders, most recently Nationwide, the nation’s second biggest, are deliberately raising rates to make themselves less competitive. This is the very definition of a credit crunch, and it is only just starting." John Authers, one of the few financial journalists whose analysis carries weight.
CHANCELLOR Alistair Darling last night carried out his threat to pile up £100 billion of taxpayers' money and then set fire to it.
Daily Mash: DARLING SETS FIRE TO HUGE PILE OF MONEY
Mr Darling has been steadily increasing the mound outside the Treasury since last September, as City analysts debated whether he would torch it or use it to buy Sir Richard Branson a new balloon.
One to watch
Newsnight: Housing in meltdown
Here it is if you missed yesterday's Newsnight on BBC2
12-18 months
Bloomberg: if only I could get the Fed's help when I am bad
And now, fully qualified, would-be homebuyers looking for low-interest mortgages get turned away by lenders unwilling to pass along rate cuts the Fed gave them specifically to make lending easier and revitalize the economy.
"Growth is slowing"... "negative growth"... "inverted inflation"... ehmm PRICES ARE DOWN £7,000!!!
Times: Credit crunch: British house values fall £7,000 since October
First time the headlines say so clear. CRASH!!!! Where is Greenbay and his property mini-empire (now worth thousands less!). What is he gonna tell the chaps at the pub tonight? "Nationwide's economists yesterday abandoned their past insistence that residential property values would at worst be flat this year and gave warning that prices would continue to slide" I am having a laugh
Spot the editor with a crumbling BTL portfolio?
Daily Express: HOUSE PRICES STILL ON THE RISE
The Express has lost touch with reality. Quote of the article " there is more chance of finding Elvis on the moon than house prices crashing over the next five years." Next Week: Did Elves take Maddie to the Moon?
As lenders keep tightening, the 'boiling frog' analogy increasingly explains the unravelling of the property bubble
The Motley Fool: Beat the Mortgage Rate Rises
Nationwide, for example, has just increased its entire two-year tracker mortgage range by 0.57% This means that if you only have a 5% deposit, you will pay a whopping 7.1% with the Nationwide. And its lifetime tracker range rate is up 0.51%.
Friday, March 28, 2008
The New ECB
Bloomberg: German `Super Bank' Is Being Considered, Stern Magazine Says
Isn't this what the ECB is anyway?????
Government misses opportunity to help key workers get on the housing ladder
Welsh Liberal Democrats: Government misses opportunity to help key workers get on the housing ladder
The Welsh Liberal Democrat spokesperson for Housing, Peter Black, has accused the Labour-Plaid Welsh Government of missing an opportunity to help poorly paid key workers after they revealed that they will no longer fund the HomeBuy scheme for first time buyers on most properties.
Parachute money = inflation = higher rates to fight inflation???
Bloomberg: ECB lends six-month cash as policy makers warn of higher rates
Anyone see the problem the ECB seem to be missing?
Timber!!!!!!
bloomberg: pound falls to record low against the euro as consumer confidence slumps
This fact is being hidden from the general public, to save the government and the BoE from being forced to raise interest rates to protect the pound, and fight inflation, as the money men control the purse strings and the puppet strings of the government. They will continue to drop rates, to feed the financials who will hoard and store and covet, but not pass these cuts onto the public, except through cutting saving rates. Then, when inflation is so high that the BoE will have had to write more than one letter to the chancellor, will interest rates rise, and rise and rise until Icelands rate will look like a cheap deal. Two years of pain...closer to the/fifteen years of pain for the British public through pandering to the government masters in the city. IMHO.
The cupboard was not completely bare for the Cayne bear....although alot less than if (unlike Adam Applegarth) he had bailed out sooner......!
Financial Times: Cayne sells stake in Bear for $61m
Jimmy Cayne, a one-time travelling salesman who became a paper billionaire last year as chief executive of Bear Stearns, has sold his entire stake in the investment bank for a little more than $61m. According to a filing with the Securities and Exchange Commission, Mr Cayne sold 5.6m Bear shares for $10.84 each on Tuesday, a day after after JPMorgan Chase agreed to raise its bid for the stricken investment bank fivefold to $10 a share. Mr Cayne’s wife, Patricia, sold 45,669 shares at the same price.
Speculation about huge losses in Germany
Spiegel: German Banks Could Hemorrhage 70 Billion Euros
Subprime losses of 70 Billion Euros mooted at German Banks with exposure to US Toxic Waste. Before we get too happy about this maybe their reporting is more honest or at least at a different stage in revealing the "true" extent of losses. What position are UK Banks really in? The fallout in Germany from exposure to America's subprime crisis may turn out to be far bigger than previously feared. One major newspaper is putting estimated losses at a whopping 70 billion euros, while a prominent politician warns that the US recession has already arrived in Germany.
Fed now allowing investment banks to borrow from it directly (previously only possible for commercial banks)
BBC: $100bn Fed move over credit fears
The US Federal Reserve will make a further $100bn (£50bn) available to major banks in April, trying to ease concerns about a global credit crunch. The sum, offered across two auctions, is in addition to $260bn provided in short-term loans to the end of March.
Sterling hits another low against the Euro
Times: Euro hits record high against the pound
Not mentioned at all by the BBC, the Times article again has the emphasis wrong, talking about 'house price data' and 'consumer confidence' rather than the real issue being that the BoE is not following the same line as the ECB in tackling inflation.
Says it all...
BBC News: Dead girls rent 'Must be paid'
A County Armagh couple whose daughter died while at university in Liverpool have been told they must pay for her accommodation for the rest of the year.
BBC Reports the Blindingly Obvious
BBC: Report warns of UK recession risk
Lehmnan Brothers have just noticed that global financial turmoil is increasing mortgage rates and predict that this will reduce consumer spending and have concluded that there is only a 1 in 3 chance of a UK Recession in the next 2 years.
Ouch [off topic]
New York Times: Down $900 Million or More, the Chairman of Bear Sells
Only a year ago James E. Cayne’s stake in Bear Stearns was worth more than $1 billion. But on Thursday, Mr. Cayne, the chairman of Bear, disclosed that he had sold all of his shares in the troubled investment bank this week for just $61 million.
If you can get past invincible seven foot-tall Arab Warrior, then yes, you can have a f*cking mortgage.
Daily Mash: BANKS USE MAN-EATING TIGERS TO DETER NEW BORROWERS
"From today the Woolwich will position a pair of ravenous Bengal tigers outside its branches, while the Nationwide has rigged a boobytrap consisting of hundreds of small poisoned arrows that will be triggered by a pressure pad under the doormat."
Can't believe this is in The Times, Labour supporters no more ?
The Times: Good Bye to Rip-Off Britain
"Brown got away with murder because he was Chancellor in the days when chimps could make money." "If, while waiting for the clampers to arrive, having paid your £100 release fee plus £60 fine plus VAT, you pop into Starbucks for a cup of coffee, you will be charged close on £2. For coffee. Think about it, because so few have."
Shift in house prices prediction
BBC News: Shift in house prices prediction
The Nationwide has changed its prediction for property values after UK house price inflation fell to its lowest rate for 12 years
Falling house prices branded as a sale
Estate agents website: The Great Dhalia Sale
In Malta one enterprising estate agent has tried to rebrand the house price crash as a sale! but hurry the sale only lasts until 30th April (seriously) Malta has a population of 400,000 people with 53,000 permanently vacant properties at the last census, many more are in development. There is no tax on owning a house.
The last optimist fights on – for now
MoneyWeek: The last optimist fights on – for now
Could last week's panic have been a capitulation, when even the most optimistic of optimists threw in the towel and stocks hit bottom? But UK and European stocks need to fall by another 25% and 15% respectively to hit average peak-to-trough falls of previous bear markets. Now throw in the fact that sentiment is nowhere near as depressed as it is at genuine market bottoms, and this hardly looks like a buying opportunity.
Stocks and Bonds to Suffer in Coming Inflationary Recession; Invest in Gold and Silver
Bloomberg via Gold and Silver Investments: Bloomberg Video: Jim Grant on the recent actions of the Federal Reserve
Jim Grant, founder and editor of the highly respected Grants Interest Rate Observer and one of the world’s leading experts on US and international interest rates and financial markets appeared on Bloomberg’s “Taking Stock” on Tuesday, March 24. He is very bearish on bonds, calling them ‘risk without return’ and quite bullish on Gold and Silver. "Gold is a Hedge Against Depredations of Our Financial Masters and a Dollar Based Calamity; In Coming Years Stocks to Struggle and Silver is the Silver Lining."
No desire to lend by smaller lenders
Firstrung: Credit crunch affects small lenders appetite towards riskier mortgage lending
Over the last few weeks we have seen more changes in the mortgage market time than ever before. Denise Harvey, mortgage analyst from moneyfacts.co.uk, looks at what has been going on. It seems that there is no stopping it. Over the last two weeks, lenders have been even more ruthless in withdrawing products from the market and/or tightening their criteria. Over the last month alone we have seen the number of mortgage products available across residential and buy-to-let plunge from 7726 to 5700, a staggering drop of 2026 products.
House prices still 47% highre than five years ago
Firstrung: UK house prices slow to lowest level since 1996 - Nationwide
House prices fell for the fifth consecutive month in March. The price of a typical house fell by 0.6% during the month, bringing the annual rate of house price growth down to 1.1% - its lowest rate since March 1996. A clear change in sentiment since the late summer has led to the sharp slowing in house price growth, even in the less volatile 3-month on 3-month series. Prices on this measure are now 1.5% lower than three months ago. The price of a typical house in the UK is now £179,110, only £2,027 more than this time last year. However, prices are still 11% higher than two years ago and 47% higher than five years ago - the equivalent of a price rise of more than £30 per day for the last five years.
What if the Bear wasn’t saved?
MoneyWeek: Why Bear Stearns needed to be saved
"...while we might not like the fact that the government bailed Bear Stearns out of the mess (to a certain extent), when that would never be the case with 99% of other businesses, it was an absolutely necessary step. After all, do you really think that the impact would be limited to one country or market? Not a chance. This is one case when 'laissez-faire' economics would have caused Armageddon. Without a backstop, we'd be left to the devices of people. And I don't know about you, but there are certain people whose devices I wouldn't want impacting my financial well-being!"
Mortgae approvals continue their death spin
Firstrung: Mortgage approvals fall by 33% year on year whilst re-mortgaging frenzy appears to be over
U.K. mortgage approvals fell by a third in February from a year earlier as the higher credit costs have deterred homebuyers, according to a report by the British Bankers' Association... Banks granted 43,870 loans for house purchase, down approx. 33 percent from February 2007, the BBA, which represents the U.K.'s biggest banks, said today in a statement. Approvals for re-mortgaging rose 5.5 percent from a year earlier to 72,193.
Since late 2006 - 243 major U.S. lending operations have "imploded"
The Mortgage Lender: Waiting for that one dumb homebuyer
There are a bunch of houses in our neighborhood that have been on the market since 2006 and the asking price hasn't budged. In some cases the price has been lowered by a tiny amount - for example, from $595,000 to $589,000 - in what seems to be a mini-capitulation for the benefit of either themselves or their real estate agent. They look ridiculously out of place now that bank foreclosures are coming onto the market priced hundreds of thousands of dollars lower.
John Charcol about to go bust ?
Guardian: Auditor warns John Charcol's future as going concern is in doubt
"The country's best known mortgage broker, John Charcol, has been warned by its auditor that it faces a "material uncertainty" about its ability to keep operating "
"March"ing on to a full blown HPC
Daily telegraph: UK house prices drop for fifth straight month
"The building society said that the March fall represented a "sharp slowing" and dragged the quartely drop in prices - considered a less volatile gauge of the market - down to 1.5pc. As recently as October prices over three-months had grown 1.5pc, signalling how rapidly the situation has deteriorated." Can't really add to this article. Back to reality with a bump. VIs: Lets not pretend it's a surprise
Attack on Iceland continues
The Telegraph: Iceland may face rating cut, warns S&P
Iceland may see its credit rating cut if the country's banks are further battered by the global credit crisis, Standard & Poor's warned yesterday.
Soon, very soon we will be over the edge....
FT.com: House price growth falls to 12 year low
''...House prices fell for a fifth consecutive month in March, taking the annual rate of growth to its lowest in twelve years, a survey showed on Friday. The Nationwide Building Society said house prices fell 0.6 per cent this month, taking annual price inflation to 1.1 per cent - the weakest since March 1996. The lender, which forecast last November that house prices would remain flat over the course of 2008, is now expecting prices to fall modestly during the year...''
35pc chance of recession in UK
The Telegraph: Chances of full-blown UK recession risk rising
"The Bank of England may be forced to copy the Federal Reserve's lead and make dramatic interest rate cuts as Britain falls victim to a US-style slump, say experts at Lehman Brothers."
Get out of GBP and into gold. If GBP starts cutting IR then the ECB will be forced to as well as the euro surges even higher.
Euro rate cut - April, May or June
The Telegraph: Euro too strong, Sarkozy tells the City
The French President, who arrived in the UK for a state visit on Wednesday, also used his speech at the Guildhall to praise Britain's economic model, saying France would do well to emulate it.
He is right. The French couldn't emulate our boom. They won't have a chance at emulating our bust.
HPs down and mortgages up..but we knew this already
The Telegraph: UK house prices drop for fifth straight month
House prices fell by 0.6pc in March, the fifth consecutive monthly fall, according to Britain's biggest mortgage lender Nationwide.
Nationwide hints at a HPC
BBC: Further slowdown in house prices
The Nationwide said house prices had now fallen for five months in a row and predicted prices would fall further. Nationwide chief economist Fionnuala Earley admitted that this was a change to its earlier forecast that there would be no overall change in prices by the end of this year. "A clear change in sentiment since the late summer has led to the sharp slowing in house price growth, prices are now 1.5% lower than three months ago," she said.
Oh this is nice!
Times: Nationwide and Halifax put up mortgage rate to deter new customers
Two of the biggest mortgage lenders increased their rates sharply yesterday in an attempt to close the door to all but the most creditworthy customers. The move could lead to tens of thousands of borrowers struggling to get any mortgage deal at all. Within hours of Nationwide’s announcement, Norwich & Peterborough Building Society said that it was increasing its rates by up to half a percentage point. The move came as Britain’s best-known mortgage broker, John Charcol, was warned by its auditor that it faced a “material uncertainty” about its ability to keep operating after its investors put in an extra £1.5 million and deferred loans of £820,000. The auditors highlighted concerns that liabilities exceeded assets by £532,000. AHA HHAHAHAHHA HHAHAHAHH
30 % rise ? Hmmm
FT.com: Jump in rice price fuels fears of unrest
I wonder if we will get more "What me gov?" , 'No. I am confused by it myself" comments about certain commodity prices from the central banks.
Thursday, March 27, 2008
Injustice to savers
Bloomberg: Video Jim Grant on Fed actions
Excellent interview. The desperate actions of the Fed accepting mortgage paper as collateral, when the US is not even in depression yet. The dollar is now a very risky asset because of this, especially if house prices keep falling. He calls the destruction of the dollars value an injustice to savers.
THE Financial Services Authority could be stripped of some of its regulatory powers after admitting it didn't know what a bank was.
The Daily Mash: WHAT'S A BANK? ASKS FSA
The regulator said it bought a copy of the Oxford Dictionary of Finance and Banking off Amazon last summer after reading about the problems at Northern Rock, but was still on the introduction.
British Pound Could Break 2.0 if Disaster Hits UK Mortgage Lenders
daily fx: According to an article in the UK Times, Nationwide, the country’s second largest mortgage lender is planning to turn away business. We wonder why a mortgage lender would resort to this unless trouble was brewing in house
According to an article in the UK Times, Nationwide, the country’s second largest mortgage lender is planning to turn away business. We wonder why a mortgage lender would resort to this unless trouble was brewing in house. The Times argues that Nationwide is attempting to gain greater control over the amount that it lends and is doing so by increasing the rates on its tracker deals by more than 50bp. Efforts such as these are exactly why central banks including the UK and the US are struggling to contain the credit crisis.
Hhhhmmmmm Tempting
Property People Magazine: Spread betting on house prices
Spreadfair clients were predicting that the average UK house price would decrease by the end of 2008, but in the last month they see the average UK house price to be three per cent higher by that date than their estimate two months ago.
LandlordExpert
LandlordExpert: PM, Thurs 27th March - UK house prices rise again in March according to Rightmove
House prices have risen for the second month running in March as sellers pushed for near record high prices, despite increased competition from other unsold properties and tighter credit conditions, according to a key property survey.
It's coming our way!
CNN: Glenn Beck The 53 Trillion Asteroid
Artical on what is the real USA state of affairs, it ain't good reading or news either.
The latest UK Banking blues
Mortgagestrategy: Fitch downgrades Alliance & Leicester
Fitch Ratings has downgraded Alliance & Leicester, saying the action reflects the lender’s weak access to funding compared with higher rated banks. A&L’s long term issuer default rating was cut to A+ from AA- and the short term IDR to F1 from F1+.
Objective evidence of pain in NY
BBC: Job cuts shake Wall Street nerves
The bull’s balls look very shiny indeed I am sure many folk on the street think all this Banking malarkey is far removed from their little bubble (oops Freudian slip) they live in. We on HPC know that we are all indirectly going to feel the pain of banks mismanaging their businesses. This proves that people on the street are being laid off and business, cafes, shops and street vendors are feeling the pain. 5000 laid of already in Wall Street and this is coming to a financial sector near you!!
Mortgages Still Evaporating
Mortgage Solutions: Nottingham to withdraw product range
The Nottingham is to withdraw its current product range from the market to be replaced by a new portfolio of residential and buy-to let mortgage products on Friday.
There is no inflation, Gordon repeat after me again, there is no inflation, the caterpiller said
CNN: Diesel: The truck stops here
The kid who delivers your pizza may be charging you an extra buck for gas, but for the guy that trucked the tomatoes, hauled the dough or milked the cows, passing along the fuel increase isn't as easy as pie. From truckers and farmers to loggers, construction workers and fishermen, skyrocketing diesel prices are pushing what many consider the backbone of the American economy right up to the breaking point. It is the same in the UK now...
Well that is game over...
FT.com: S Korea pension fund shuns US debt
The world’s fifth-largest pension fund will no longer buy US Treasuries because yields are too low. The move signals what could be a big shift by financial institutions away from US government debt into higher-yielding assets. South Korea’s National Pension Service, which has $220bn in assets, said on Wednesday it wanted to broaden its range of overseas investments. Central banks from 16 Asian countries said last weekend at a meeting in Jakarta that they might invest more of their $1,000bn of official reserves in one another’s sovereign bonds instead of US Treasuries, given the dollar’s volatility. “[The Korean decision] is symptomatic of the times and the problems that the US is facing,” said David Cohen, head of Asian economic forecasting at Action Economics in Singapore.
Billions Injected with No effect - Libor rate still rising!
BBC News: LIBOR ouch!
Three-month sterling LIBOR, the interest rate off which our mortgages and most other loans are priced, has risen to 6%, its highest level since December 28. It shows that banks are still hoarding cash, still refusing to lend to each other, because of their concern that money is perilously tight for all banks.
Has Nationwide cooked it's goose ?
Times: Nationwide shuts door on mortgage hunters
Good news for those with resets coming up ... "Nationwide, the UK's largest mortgage lender after Halifax, said today it wanted to turn away business to take greater control over the amount it lends"
gold over $1,200 in 2008
Safe Haven: Doug Casey: "Gold is Going to the Moon"
Just to reach its previous high in purchasing power, gold will have to go over $2,500 - probably more like $3,000 after you discount the phoniness in the government's CPI numbers. But because this crisis is much more serious than the one in the late 1970s and early '80s and much more far-ranging, $3,000 is actually a fairly conservative number. I'll say it again: gold is not just going through the roof, it's going to the moon.
Inflation: Why agricultural prices hit the developing world hardest
FT Alphaville: When is food not food?
Nice picture of how much processed food we eat compared to the developing world.
Gold still a buy around 900
Safe Haven: No Tears for Gold
"Let's face reality: moves by the Fed and GSEs to take bad debt off banks' balance sheets don't improve the quality of the underlying assets. Losses will eventually become the responsibility of taxpayers -- yet another burden for all of us to carry."
"Are we hearing the sounds of more money creation? The eventual sound of the dollar slipping yet further vs. gold and commodities? That's what I hear, despite the earplugs the Fed and the stock market seem to be wearing."
Polaris World Newsletter
sales@property-abroad.com: Newsletter as emailed
Further to the article on the Spanish property market, Property-Abroad have kindly provided proof of what its really like in the market place for new builds. Remember the TV ads?!
Gee, do you think this applies to the UK?
New York Times: Be It Ever So Illogical: Homeowners Who Won’t Cut the Price
In 2005, Randolph Harrison and his wife, Pamela, decided to move north from Silicon Valley, over the Golden Gate Bridge into wooded Marin County to be closer to her new job. They found a six-bedroom house that seemed ideal except for the price, $1.875 million. The current owner, they knew, had bought the house a year earlier for $1.475 million. Skip to next paragraph Multimedia Home Prices and SalesGraphic Home Prices and Sales So the couple, who both have finance jobs in the technology industry, told their real estate agent that they wanted to offer $1.575 million. He told them that the owner wouldn’t even listen to such a low bid. The owner’s attitude was “we’ll just stay here until we sell it for 1.875,” the agent said, “even if it takes years.”
Nice graphs
Market Oracle: Unwinding of the "Yen Carry Trade" is Bearish for Global Stock Markets
Global equity traders had, for many years, a ready source of funds at almost no interest charge. Traders have been shorting the Yen and using the funds to purchase stocks, currencies and high-yielding securities around the world. However, as of mid-2007, that "free bank account" is becoming more and more costly. The Yen carry trade is starting to unwind with very negative results for stocks.
Fractional Reserve Banking - Fractured
Financial Sense Editorials: THE WORLD IS DELEVERAGING
Easy money has disappeared worldwide. This event favors certain classes of investments globally, and penalizes others. FOR THE NEXT SEVERAL YEARS: AVOID LEVERAGED ASSET CLASSES 1. Financial stocks, including stock brokers, banks, mortgage lenders, insurance companies, and real estate
HOW BIG? Does anyone really know?
reuters financial: Goldman sees credit losses totaling $1.2 trillion
NEW YORK (Reuters) - Goldman Sachs forecasts global credit losses stemming from the current market turmoil will reach $1.2 trillion, with Wall Street accounting for nearly 40 percent of the losses. Of the cumulative losses expected by these leveraged players, bad residential home loans will represent about half, while poor-performing commercial mortgages will represent 15 percent to 20 percent.
But don't worry, we've fixed things so it won't affect inflation
BBC "News": Oil above $107 on pipeline attack
A few years ago, to think that oil at $100+ a barrel would not affect inflation would have been labeled idiotic. Nowadays, UK inflation statistics seem impervious to rising commodity prices.
Down they go
Independent: New home loans down by a third
The number of mortgages approved for people buying a home has dived by more than a third during the past year, figures showed today.
Another surprise today @ 12:30 GMT?
Bloomberg: U.S. Economy Probably Expanded at Slower Pace in Fourth Quarter
- The deepening housing slump brought U.S. growth to a near standstill in the fourth quarter and has now probably tipped the world's biggest economy into a recession, economists said ahead of a government report today. - Gross domestic product advanced at a 0.6 percent annual rate in the last three months of 2007, matching the weakest pace in five years, according to the median projection of economists surveyed by Bloomberg News.
Is gold’s bull run over for now?
MoneyWeek: Is gold’s bull run over for now?
The severity in last week's smackdown in the precious metals market took many by surprise. Should we expect more violent moves to the downside? MoneyWeek's Dominic Frisby thinks it's oversold - and the technical set up now looks rather good...
The pain in Spain...
Independent: Spain's property market suffers meltdown
"Spain's once-booming property market is in freefall, official statistics have revealed for the first time. The announcement that house sales had plunged has dashed government hopes for a "soft landing" in the sector that has driven the Spanish economy for more than a decade".
Ah yes - I remember this general management technique:
FT.com: Kingfisher slashes dividend to conserve cash
Its called having to cut costs and make difficult decisions (such as laying off staff , reducing dividends & bonuses and keeping as tight as possible on fixed infrastructure) in order to survive.
Mortgage figures confirm the continuing slump in the property market
BBC: Mortgage approvals still slumping
Bank mortgage lending to people who are moving home is still down by a third on the same time a year ago, said the British Bankers Association (BBA). The figures confirm the continuing slump in the property market. Banks lent 43,870 mortgages to home movers in February, slightly more than in January, but 33% down on last year. People who do not move, but change their mortgages to more favourable deals, now account for nearly half of all new mortgages granted by banks.
Humorous take on growing buy-to-let nightmare
Daily Mash: Buy-to-let investors age 1000 years in four seconds
THOUSANDS of buy-to-let investors are ageing 1,000 years in around four seconds after receiving the latest valuations of their rented properties.
As Iceland goes, so go the Baltics, the Balkans, Hungary, Turkey, and perhaps South Africa
The Telegraph: Iceland contagion may spread far and wide
"There's now a risk of psychological contagion from Iceland. People are starting to look more closely at all these countries. The deficits were easy to fund in times of abundant liquidity, but we think the global credit crunch is going to make it a lot harder," he said. "The history of financial crises suggests that it can be dangerous to think 'it's different this time'."
Slowdown in home decorating ?
Bloomberg: Kingfisher Says Annual Profit Slid 20%, Cuts Dividend
"Kingfisher Plc, the U.K.'s largest home-improvement retailer, said full-year profit dropped 20 percent and cut its dividend as a slumping housing market caused Britons to spend less money redecorating. B&Q, the largest U.K. home improvement chain, have fallen for three straight quarters as consumers rein in spending".
This beggars belief!!!
BBC NEWS: Barclays' executive is paid £21m
The boss of Barclays' investment banking division, Bob Diamond, took home more than £21m ($42m) in pay and bonuses last year, the firm has said.
Express in non-ramping story shocker
Daily Express: More misery looming for homeowners
HOME owners were warned of more mortgage rate misery ahead by the boss of the Bank of England yesterday. Governor Mervyn King feared lenders will continue to refuse to pass on interest rate cuts to borrowers. At the same time, he dropped a big hint that the Bank base rate could be cut again by 0.25 per cent next month. But he admitted mortgage holders were unlikely to see their repayments slashed with banks desperate to recoup cash in the “credit crunch.” It means homeowners cannot expect any respite amid crippling rises in the cost of living and taxation. And they were warned that house prices are unlikely to rise significantly “for years.” Meanwhile LIBOR rose to 6%, the highest since December.
Dirty dealing in HBOS? - the numbers say no
Guardian: Dirty dealing in HBOS? - the numbers say no
Allegations that speculators had spread malicious rumours to drive down the price of HBOS shares last week do not appear to be supported by the latest figures from Data Explorers, a research firm that monitors short selling. As data emerged yesterday on HBOS stock lending, which is linked to short selling, market professionals said the figures showed little sign of substantially heightened shorting activity....
Wednesday, March 26, 2008
Lawyers circling overhead! - The next wave?
Bloomberg: New Century Bankruptcy Examiner Says KPMG Aided Fraud
New Century Financial Corp.'s bankrupt estate might have cause to sue its former accountant KPMG LLP and some directors and officers for improper accounting leading up to its bankruptcy, a court examiner said in a report. New Century ``engaged in a number of significant improper and imprudent practices related to its loan originations, operations, accounting and financial reporting processes,'' Missal wrote in the report. He said ``KPMG contributed to certain of these accounting and financial reporting deficiencies by enabling them to persist'' and in some cases ``precipitating'' a departure from ``applicable accounting standards.'' ``This is really the embryo of the credit crisis,'' Missal said today in a phone interview.
King admits that cutting the base rate has made no difference to mortgage rates
Torygraph: BoE 'losing the battle' as UK economy slows
What the article omits is that base rate cuts have weakened Sterling thus pushing up inflation, so household incomes are even more squeezed than they would have been had rates been left on hold. He also 'warned that house prices would not rise at all over the next few years', a reality shock for many no doubt.
Strange Place to Find this Warning........
M&G investments: Warning over 'UK house price crash'
It has been claimed that the UK's economy could be heading for a sharp consumer slowdown similar to that seen in the United States if house prices continue to fall. According to Capital Economics, the similarities between UK and US consumers are "disturbing", with the UK consumer sector suffering from the same build up of imbalances as in the US. The group added that a key driver of the slump in the US had been falling house prices, which are now being seen in the UK too. And it said that people in the UK are more indebted than those in the US, with total household debt now standing at the equivalent of 175% of household disposable income, compared with only 128% for Americans.................. Bit of a cosmetic ending.
Shop Till You Drop - More Cuts Under Way
Evening Standard: King hints at April cut
Economists said King's dovish comments suggest he could vote for a rate cut as early as April after resisting such calls this month. The Bank has already reduced rates from 5.75% to 5.25% since December.
US treasury tell it like it is.
Times: Paulson warns US house prices must plunge
The US Treasury Secretary gave warning today that there is more pain ahead in the American housing market after he said prices must be allowed to drop before the economy can stabilise. House price investors won't want to hear it, but it's going to happen here.
Credit Crunch threatens yet another big casualty
Market Watch: Bond insurer FGIC falls below key regulatory capital level
CHICAGO (MarketWatch) -- After setting aside just over $800 million to pay expected subprime mortgage-related losses, troubled bond insurer FGIC Corp. says it has fallen below legally required statutory capital levels, which means it must come up with a plan to raise money or face stringent consequences, the company said Wednesday.
Citi: more housing led write-downs ahead
CNN: Citigroup To Post Deeper Than Expected 1Q Loss
"Oppenheimer & Co. tripled its loss estimate for Citigroup Inc.'s (C) first quarter Wednesday, forecasting the bank could write down another $13 billion. And with no end in sight for the credit crisis, Oppenheimer's outlook for the largest U.S. bank by assets remains grim". In addition to Citigroup, Oppenheimer's Whitney predicts $4.3 billion in write-downs for Bank of America Corp., $2.8 billion for JPMorgan and $1.5 billion for Wachovia Corp.
Merrill (Lynch) is about to commence laying off between 10 - 15% of staff
hereisthecity.com: Under Pressure - Another Top Firm In The Spotlight
It was Merrill Lynch's turn in the spotlight Tuesday, as analysts revised their views on the firm's immediate prospects. Merrill's shares closed 1.1% down, after Fox-Pitt Kelton analyst David Drone said that the firm is likely to post a first quarter loss, and may end up writing down another $8bn in assets. There are, however, no liquidity concerns. In the meantime, JPMorgan analysts lowered Merrill's earnings estimates 45%, predicting write-downs of some $5.1bn. UBS analysts are now also predicting that Merrill will post in loss in the first quarter. And Trader Daily reports that Merrill is about to commence laying off between 10 - 15% of staff in its investment banking unit....
Credit crunch 'at $1.2 trillion' not $120bn as we are led to believe
BBC online: Credit crunch 'at $1.2 trillion'
The credit crunch will globally cost $1.2 trillion (£600bn) according to a report from the bank Goldman Sachs. The report says 40%, or $480bn, of those losses will hit US banks, brokerages and other institutions. Goldman estimates that US financial firms have already reported losses of $120bn since the credit crunch began. So where is the remaining 90%? Panic not over till it's over!!
HEDGE funds have overtaken the Big Bang as the most important thing people know nothing about.
Daily Mash: HEDGE FUNDS NOW MOST IMPORTANT THING PEOPLE KNOW NOTHING ABOUT
As a massive American hedge fund faces imminent collapse, millions of people across the globe have found themselves panicking without the faintest idea why.
Should you put your money into gold? You’d be a fool to do so.
goldpricecrash: Should you put your money into gold? You’d be a fool to do so. Here’s why…
It was no coincidence that the US dollar, already plummeting in value against the euro has plunged to a 12 year low against the Yen recently. One thing we can always be sure of in these uncertain times is a falling dollar means the price of gold rises.
More gloom from Uncle Sam
Guardian: US has not felt this bad since Watergate
Consumer confidence worse than the 1970s. House prices follow suit.
Why you should ignore gold price fluctuations
MoneyWeek: Why you should ignore gold price fluctuations
The price of crude oil in terms of gold hardly changed last week, but in terms of dollars both commodities fluctuated wildly. So stick with the metal rather than volatile paper money.
Bad news for the Bulls!
Bloomberg: Orders for Durable Goods in U.S. Unexpectedly Fell in February
Orders for U.S. durable goods unexpectedly fell in February, led by the biggest slump ever in demand for machinery that indicates companies are becoming more reluctant to invest as the economy heads into a recession.
Stand off in the States
NYT: Be It Ever So Illogical: Homeowners Who Won’t Cut the Price
Three years ago, when the real estate bubble was still inflating, this sort of standoff was the exception. It’s the norm today. Overall home sales have fallen a remarkable 33 percent since the summer of 2005. Home prices, on the other hand, continued to rise until 2006 and are now only 5 to 10 percent below where they were in mid-2005, according to various measures.
FSA Northern Rock floating in the English Channel
Myspace News and Politics: Reading the Numbers
We all know Granite is a Northern Rock floating in the English Channel but how about Whinstone or should it be Win Stone. An in depth expose of some not so familiar NR crash background and banking generally by Simon Davies. Helpful on FSA' s open day. Also check Seth's background if you have time, you may be surprised. cybervigilantes your post Feb 28th deserved more attention, hope this works.
UK's biggest counterfeiter at it again.
BBC News: King pledges further market help
Mr King also predicted that house prices would be "broadly stable" over the next few years, which he welcomed. But... He said that a slowdown in the housing market would eventually make houses more affordable for first-time buyers, as the ratio of wages to house prices returned to more normal levels.
48% Increase in Mortgage Applications
Mortgage Brokers Association: Application Survey
There seems to be some evidence recently that the housing market is on point of turning round in America
Don’t be fooled by the bounce
MoneyWeek: Don’t be fooled by the bounce – this crisis is far from over
Is it safe to go back in the markets now? Investors seem to think so, if yesterday's triple-digit gains are anything to go by. But we've got some way to go before we hit the bottom of this market, says John Stepek.