April 2008 Archive
Wednesday, April 30, 2008 
Explores a little known US act which appears to have encouraged subprime lending in the first place. The seeds sown in 1977?!
Mises Institute: The CRA Scam and its Defenders
"The myth that the CRA (The federal government's 1977 Community Reinvestment Act) would not be harmful to bank-industry profits was hidden for years by the Fed-created housing bubble, which allowed for easy refinancing of all the bad debt. But now that the bubble has burst, all those unqualified borrowers — whom the government calls "subprime" — are defaulting. The bursting of the Fed-generated housing bubble is the reason why the CRA scam was not exposed until now." - So far as I understand, this Act empowered banks to invest in subprime. The article seems to suggest that packaging of debt was a solution to the risk taken on by banks in response to the CRA Act. But, that continual housing booms cycles of house price booms, fed led, let the problem be hidden till now.
Some hard facts for the doubters
treesdontgrowtothesky.com: Trees Don't Grow to the Sky.... Watching as the sun sets on the Irish property market
For anyone doubting the freefall in the Irish property markets. One should also note that in terms of population, wages, housing demand etc. etc. Northern Ireland is similar to many parts of the rest of the UK, and that the Republic of Ireland is one one of the richest economies in the EU.
Renowned economist predicts UK to worst hit economically
Times: House prices fall as bank predicts credit crunch will hit UK hardest
Jim O’Neill, chief economist at Goldman Sachs, who correctly forecast the collapse of the US property market, proclaims that Britain will be the worst-hit of the world’s economies in the fallout of the global credit crisis.
Personal Debt
Credit Action: Credit Action Stats May 2008
Last year the debt was increasing by £1 million every 4 minutes now only increasing by £1 million every 5 minutes. Total UK personal debt at the end of March 2008 stood at £1,430bn. The growth rate increased to 8.7% for the previous 12 months which equates to an increase of ~ £113bn. Total secured lending on homes at the end of March 2008 stood at £1,200bn. This has increased 9.1% in the last 12 months. Total consumer credit lending to individuals in March 2008 was £230bn. This has increased 6.7% in the last 12 months. Total lending in March 2008 grew by £8.2bn. Secured lending grew by £6.9bn in the month. Consumer credit lending grew by £1.2bn.
Barratt considering a rights issue?
hemscott: Housebuilders in the spotlight
Persimmon reported last week that it had suffered from "unprecedented tightening in the mortgage market" in March, which "caused a further deterioration of the housing market leading to lower sales volumes and increased cancellation rates." Bovis Homes is the next housebuilder scheduled to report, with an AGM scheduled for May 9. Redrow follows with an interim trading statement on May 13, while Barratt Developments provides an update the day after.
Are we the UK or North Korea?
ThisIsMoney: Bank bail-outs to be kept secret
Humphrey Bairstow Orford Saunders, Byron Arthur Repton-Carruthers, Rendleham Barnes-Spicer are 3 naughty 9 year old boys who have all had too much CDO juice to drink. Mervyn, the teacher knows this and tells them to go to the loo before they get in the car for the trip. Filled with immature bravado, all deny they have to go to the loo. And then, as if to prove the point, they begin to drink an extra 10ccs of CDO juice - first Byron Arthur does so, then the incredibly competitive but immature Rendleham Barnes Spicer followed by Humprhey. Predictably, the little jig starts as Rendleham is the first to get caught short. Mervyn makes available a change of trousers for Rendleham, who red-faced has to face his parents with his normal trousers in a plastic bag.
One for bank haters
Telegraph: Bankers would not be punters if they were forced to pay all losses
Some rollicking entertainment from Jeff Randall, articulating what I imagine most of us feel about the cavalier risk-taking bonus-pocketing actions of unaccountable bankers.
Leo Levett-Smith and his wife, Jean, thought they did everything right when they bought their retirement home in Spain. They used a registered real estate agent, a Spanish notary and obtained their mortgage through one of then country's largest savings ba
bloomberg.com: Homes Razed by Spain Stun Foreigners as Slump Deepens
We really believed we had taken all the necessary precautions,'' says Levett-Smith, a 65-year-old retired traffic policeman from Cheshire, England, as he sits on the porch of the russet-colored villa in Catral, 42 kilometers (26 miles) southwest of Alicante. ``I mean, where else have you heard of this happening?''
Only one tool, and he's gonna use it!
BBC News: Further cut in US interest rates
''...The Federal Reserve has cut its key interest rate from 2.25% to 2.0% as it aims to avoid a possible US recession. It is the latest in a series of rate cuts, which began in September when the federal funds rate was cut from 5.25% to 4.75%. ...'''
Bricks and Slaughter
FT: US house prices
Pity the person who bought a house in Santa Barbara county, California, one year ago. Since then the value of their home has dropped almost $6,000 – per week, that is. The median house price there has dropped 34 per cent since March 2007, according to the California Association of Realtors. Will UK shadow the same trend?
The Wal-Mart nation
FT: US retailers go after tax rebate billions
US retailers are waging a promotional battle to win a share of the billions of dollars in tax rebates destined for US households as part of the $170bn (£86bn) federal economic stimulus package.
The arrival of the USS Abraham Lincoln in the Gulf follows a noticeable hardening in US rhetoric against Iran for meddling in Iraq and playing a destabilizing role in the region
the truthseeker: Deployment of second carrier to Gulf a 'reminder': Gates
you may consider this off topic if you don't believe closing the Strait of Hormuz will affect your personal finances US Secretary of Defense Robert Gates said Tuesday the deployment of a second aircraft carrier to the Gulf should be seen as a "reminder" of US military power in the region. But Gates flatly denied that the United States was preparing the ground for military strikes against Iran. "I don't think we'll have two carriers for a protracted period of time. So I don't see it as an escalation. I think it could be seen, though, as a reminder," Gates told reporters here during a visit with Mexican officials
Would you buy a used car from these guys?
The Independent: Is buy-to-let really dead?
"The market is the best it's been for four years," says Rob Moore who, with his business partner Mark Homer, runs a property investment service, www. progressiveproperty.co.uk and is co-author of The 44 Most Closely Guarded Property Secrets, which aims to demystify property investment. How can they keep a smug face while peddling this crap!
Analysis - Nationwide's latest house price figures
MoneyWeek: House prices record first annual fall since 1996
"no amount of rhetoric or grandiose 'special liquidity schemes' will persuade banks to start lending against the value of falling assets without demanding big deposits or charging higher interest rates, or both. The soft landing that so many bulls have been praying for isn’t going to happen."
Was listening to this show in my car earlier today - some good phone-ins.
BBC radio 5 Live: Victoria Derbyshire - Broadcast on 5 live Wed 30 Apr - from 09:00
'Are falling house prices good news?' Winners and Losers.....mostly losers! Reasonable cross section news article and phone-ins on 5 Live this morning....well worth a listen.
Expect to see plenty more of these in the near future...
Lancashire Evening telegraph: 3million Blackburn Housing Estate fails to sell
A NEW housing estate in Blackburn worth almost £3million has been fenced off with barbed wire after none of the homes sold in two years... BUT SUPPLY AND DEMAND! ... EVERYWHERE IS FULL OF PEOPLE WHO WANT AFFORDABLE HOUSING!! Need I say more? Timberrrrrrrrrrrrrrrrr!
Is Anyone Left?
ftadvisor: Mortgages plc and Wave suspend lending
Merrill Lynch has confirmed that both of its UK lending arms, Wave and Mortgages plc, have temporarily suspended new lending. The news follows the announcement that both Pink Home Loans and The Mortgage Times Group are consulting staff over potential redundancies.
Foreign central banks and investors presently hold $6 trillion in dollars and dollar-backed assets,
signs of the times: Signs Economic Commentary for 28 April 2008
There's no oil shortage; that's another ruse. Speculators are simply driving up the price of oil to hedge their bets on the falling dollar. What else can they do; put them in the frozen bond market, or the sinking stock market, or the collapsing housing market? Profit conditions are under pressure around the world. Resource shortages, basic material price spikes and nationalism are placing great pressure on all net input importers. Rising domestic prices, materials costs and xenophobia rarely advantage far flung MNE operation. see also http://www.counterpunch.org/whitney04262008.html
"Hot" money has totally distorted the "marketplace" for life-sustaining goods,
Information Clearing House: The Lords of Capital Decree Mass Death by Starvation
The so-called "market" - which is actually a club of super-rich men who distort and destroy everything of value to humanity that they touch - will be the death of us all, and much quicker than through the effects of global warming, which is also greatly accelerated by the ghoulish, greedy rush to grow food for cars rather than people. In such a murderous environment -manipulated purely for the profits of the Lords of Capital. The men who profit from such mass murder use terms like "structural adjustment" and "economic fundamentals" to attach a veneer of rationality to a chaotic system they have created on the fly for the sole purpose of mega-theft. In the end, the Lords of Capital have mastered only one art: the production of overlapping calamities, each more lethal than the last.
Come on Stuartz, tel us how dis be good for da BTL
Evening Standard: Heading home, half of capital's migrants
Tens of thousands of eastern European immigrants who arrived in London in the last four years have gone home, population experts said today...
Doing Well
BBC News: US growth ahead of expectations
The US economy grew at an annual pace of 0.6% in the first three months of 2008, slightly faster than expected.
We'll scweam and scweam until we're sick, and we can you know!!
Bloomberg: King's Bonus `Squabbles' Risk Finance Jobs, BBA Says
"There are other places business can go,'' Angela Knight, the chief lobbyist of the U.K. banking industry, told treasurers at the ACT Annual Conference in Edinburgh today.'' ......so there, you big meanie.
Why easy mortgages have gone for good
MoneyWeek: Why easy mortgages have gone for good
The collapse in the number of loans available to borrowers is all about the financial sector's (un)willingness to lend. And this means no going back to ‘normal’ mortgage conditions anytime soon...
The Fed won't stop printing money, but is now meant to stop bubbles
FT: Extra powers for Fed aim to cut risk of asset bubbles
"Banks, hedge funds and other financial institutions could find their investment strategies curtailed by the Federal Reserve to reduce the risk to the economy from asset bubbles, the US Treasury said yesterday." Now, where did the present Treasury Secretary used to work?
What, a pyramid scheme ? Surely not ?
Telegraph: Rising house prices do not make us better off
5% this year. Is this a joke ?
A house of cards
The Guardian: A house of cards
"Despite the lurid headlines, the government must not bail out the housing market: its own process of self-correction should be allowed to continue" cif does tend to attract quite a lot of comments so it might be interesting to check back later and see where the groundswell of liberal opinion is heading. In the past I've found a lot of the comments to be suprisingly pro HPI! Maybe they've all got investment properties they're worried about.
Are the current fears around the property market affecting you?
Merto: Big Vote: House price panic
Both bearisah options: Yes, I'm staying well clear of the property market at the moment - 34% No, the fear is unnecessary - house prices had to come down - 66%
FTSE down to 4300 by end of summer????
Mclaren report: April 16 2008 CNBC Powerlunch Europe
Comparing the 1969 bear campaign to now. Could we have a 37pc drop in stocks by the end of summer
Is a 30% drop in one year a crash?
BBC News: NI house prices face £75,000 drop
"The average price of a house in Northern Ireland will have dropped by £75,000 from its peak by the end of the year, an economist has said. Richard Ramsey of the Ulster Bank predicted the average price of a house would fall to £175,000." And embarrassment all round for the NI 'experts'. Apparently immigration was the driver here in NI - you know the story. Except that a study released today estimated the the immigrant population here is 1%. So were the public lied to?
"worst policy mistake in a generation," a former top Fed staffer said.
Wall Street Journal: Fed's Bailout Is Questioned by Ex-Staffer
"The episode will be seen as comparable to "the great contraction" of the 1930s and "the great inflation" of the 1970s, Vincent Reinhart said Monday at a panel organized by the American Enterprise Institute, a conservative-leaning think tank where he is now a scholar. Until mid-2007, Mr. Reinhart was director of monetary affairs at the Fed and secretary of its policy-making panel, the most senior position on the Fed's Washington-based staff."
Latest summary of debt stats
Credit action: Debt Facts and Figures - Compiled 1st May 2008
Funny how they managed to compile this tomorrow and release it today.! Useful reference data, but they do make the mistake of quoting averages for debt that include the very large number of people who have no interest bearing debt at all. For those who have debt, the averages are very much higher...
With a keen eye on future profits, Tesco dumps property site
BBC "News": Tesco eyes property website sale
There is perhaps a subtle irony that an estate agent might buy the site - Tesco set it up with the hope of establishing a flat fee for sellers, until RICS successfully whinged that Tesco can't facilitate transactions without being an estate agent (in other words, "Gaah! that could kill us - pleease make them stop!") ...
At last! Let us quantify the losses for the numpties!
Yahoo: House prices fall by £45 per day - is this the time to selL?
New figures show that the average value of a home in the UK has dropped by £44.39 every 24 hours or £310.73 a week so far during 2008, as the property market slows down. The pace of the falls has accelerated during the past 30 days, with homes seeing an average of £55.40 a day knocked off their value, according to property valuation website Zoopla.co.uk.
Stocks haven't broke through their resistence levels yet.
Market Oracle: Worst is Not Over for Stock Market Falls, Credit Crisis Or Fed Rate Cuts
Commentators and pundits alike have erroneously stated that last week's highs in US equity indices broke important technical levels. The Dow has not only failed to breach above a key trend line resistance of 12,920, prevailing since the October highs but also failed to breach the 50% retracement from the same high to the January lows. Similarly, the S&P500's major resistance stands at the 1,410 trend line resistance acting since the October 10 highs. We remind our readers that these recurring failures are no coincidence but instead a technical failure that is largely in synch with prolonged economic uncertainty.
Following on from previous posting on win investing
Thisismoney.co.uk: Win Investing
There's one born every minute.
The AA: Negative equity not just on your home
Times: Secret tax adds £200 to cost of running family cars
More great news for Gordon as yet another tax marketing gaffe hits the road - so to speak. "The AA said that many people were falling into a “negative equity” trap, with their cars worth thousands of pounds less than outstanding loans"
Pop corks, deck the halls with bunting, party like it's 1996...still a long way to go...
Firstrung: UK house prices show first yearly fall since March 1996
"April was another difficult month for the housing market. Falling levels of market activity meant that prices fell by 1.1% during the month and ended up 1% lower than this time last year. April's fall in prices continues the trend of the last six months and reflects the weakening sentiment in the market brought about by poor affordability and tighter financial market conditions. This is the first year-on-year fall in prices since March 1996 and brings the price of a typical house to £178,555, £1,759 lower than at this time last year.
Freefall coming to a postcode near you
Telegraph: UK house prices drop year-on-year for first time since 1996
Ms Earley warned: "Weakening housing market sentiment and demand, unrelated to the financial market turmoil, will mean that we should expect slower market conditions.".... as we all have been sayign here for a long time. The interest rates are a red herring and will not prevent a major HPC. Enjoy the next 3 months, all all of the YoY will be going negative. Lets get this site updated quicker (please) thanks :-)
first annual house price fall for 12 years....
BBC News: First house price fall since 1996
House prices in the UK have recorded their first annual fall for 12 years, according to the Nationwide.
UK is being throttled by Labour. Economy going down the tubes!
Telegraph: Advertiser WPP may join tax exodus
One of the world's largest advertising companies is threatening to join the growing number of firms leaving Britain in protest at Labour's complex and expensive business tax regime, it was has been disclosed. WPP, a member of the FTSE-100 index of Britain's biggest companies, is considering moving to Ireland to reduce its £200 million annual tax bill. The move could cost the Treasury up to £40 million in revenue.
The 'get rich quick' brigade move into BTL - the new 'inside track'?
win property investing: WIN Investing
These people seem even more humourless - with far bigger promises - than Inside Track....you know it's the end of the road when websites like this start appearing...... ''....Like to become a investment millionaire, in 3-5 years or less, and never have to work again Like the security of a regular monthly income from just a few hours work a week Like to learn simple proven property investment strategies anyone can use (whatever your background, financial status or credit rating) Like to get rid of your debts once and for all … and have a realistic money-making system to help you achieve all your financial goals, FAST...''
Nationwide goes YoY negative!
Press Association: House prices fall 1% in one year
House prices have fallen by 1% during the past 12 months, the first year-on-year fall since 1996, figures show. The cost of a home dropped for the sixth month in a row during April, sliding by 1.1%, as the credit crunch continued to take its toll on the property market. The fall helped turn annual house price growth negative for the first time in 12 years, leaving property values 1% lower than they were in April 2007, according to Nationwide Building Society.
Blanchflower calls for interest rates to be slahed to help limit a correction in the housing market
Telegraph: UK house prices now falling year-on-year for first time since 1996
Speaking yesterday, Professor Blanchflower said: " In my view a correction of approximately one third in house prices does not seem implausible in the UK over a period of two or three years if house price-to-earnings ratios are to be restored to more sustainable levels."
Nationwide HPI survey reports 1% YoY fall
Nationwide: April HPI press release
“April was another difficult month for the housing market. Falling levels of market activity meant that prices fell by 1.1% during the month and ended up 1% lower than this time last year. April’s fall in prices continues the trend of the last six months and reflects the weakening sentiment in the market brought about by poor affordability and tighter financial market conditions. This is the first year-on-year fall in prices since March 1996 and brings the price of a typical house to £178,555, £1,759 lower than at this time last year.
poles go home
REUTERS: Survey shows half EU immigrants to UK have left
"Four in ten of the returned Polish migrants we surveyed think that better employment prospects in Poland would encourage Poles living in the UK to return to Poland for good," it said.
Tuesday, April 29, 2008
Front Page of the Metro - Blanchflower Blanches
Metro: Houses prices 'may fall 30%'
House prices could fall by 30 per cent over the next few years, a senior Bank of England official forecast. But, despite claims homeowners could see up to £1,000 a week wiped from the value of their properties, the drop would be sustainable, according to monetary policy committee member Prof David Blanchflower. 'Sustainable' - what's the fuss all about. Ohh to see all the cheery faces on those carefree commuters tomorrow.
"clamouring to get out of Manchester's property market"
Manchester Evening News: City property bubble bursts
Beetham Tower was touted as one of the most desirable addresses in the country by developers and more than 90 per cent of its apartments were sold before construction began in 2005. But just a year after the first residents moved in, 43 out of 219 apartments in the 47-storey building on Deansgate are now on the market with many offering large discounts of up to £40,000
Are fixed rates now about to fall?
Active Mortgage Advice: Unintended Consequences
Interesting view that £50billion liquidity injection actually caused an increase in cost of fixed rate mortgages with plausible reason to think fixed rates may now fall.
Off topic just this once but "I will let you know if I break down"
Evening Standard: Motorists fury as 'profiteering' Shell and BP post record profits of more than £3million an hour.
Consumers are facing huge price hikes in food and utility bills. Petrol prices are rising while oil companies' profits are going sky high. Oil companies should not be profiteering while so many are struggling to make ends meet. So I am going to try it...
Politicians have a vested interest in peddling this swindle. It's the latest way of bullying us and picking our pockets.
Campaign for Truth: Eco-loonies reject an inconvenient truth
Most news bulletins these days are little more than party political broadcasts by Greenpeace, who put the "mental" in environmentalists. They're like the lunatics who walk up and down Oxford Street wearing sandwich boards and screaming that The End Of The World Is Nigh. Coleman insists that in a couple of years most of us will wake up and realise that we've been had. It's fair to assume he has some idea of what he's talking about, since - unlike most of the hysterical doom-mongers - he's been a meteorologist all his life. Sometimes you do need a weatherman to know which way the wind blows.
What is "large scale"?
Bloomberg: Deutsche Bank Says It Had First Loss in Five Years
Deutsche Bank doesn't plan any ``large-scale redundancies,''
Pain to last three or four years,
the guardian: HBOS expects three years of pain
The rights issue and fresh credit crunch writedowns had been widely expected in the City, along with a gloomy forecast from the group for the UK economy and house prices. Hornby made it clear that he expected the current market downturn to last "not just for 08 and 09" but for three or four years
Comical Ali(stair) made false claims
Times: King denies £50bn lifeline will renew mortgages
Here we go... the truth is £50bn were meant to prop up banks balance sheets and profits... not a lifeline for home owners and BTLs alike (big big laugh)
The writing was on the wall years ago
ThisIsMoney: Curb these property clubs (2005)
I thought this was well worth promoting to the front page - from Rental John in the comments of this Inside-Track-went-bust posting: "INDUSTRY leaders have called for investor protection against property clubs, amid fears of a looming crisis in the buy-to-let flats market. Four of the property industry's most influential bodies have asked for closer monitoring of the unregulated clubs, which often charge thousands of pounds for membership and advice." (December 2005)
House prices increase by 50% next year.....NOT
The Press Association: House prices 'could fall by 30%'
House prices could drop by around 30% over the next few years if interest rates are not cut, a senior Bank of England official has warned................Could be worse than 30%
And Opec Says Expect Oil At $200 A Barrel?
CNN News: Shell's profit soars to record $9 billion
Despite poverty, starvation, losses worldwide of jobs, homes, bank accounts and a decent lifestyle, the oil barons are profitting quite handsomely. And, as usual, at every one else's expense. Make you boil? When does anyone bother to stop them?
CBI - "There is no doubt that consumers are tightening their belts as the mood about the economy and outlook worsens,"
BBC: Housing decline hits High Street
Poor weather, an early Easter and the slowing economy led to the worst month for retailers since November 2005, business group the CBI has said. In an April survey of shops, it found sales of items linked to the housing market, such as electrical and DIY items, were all down from a year ago. The CBI expects sales to fall again in May, but at a slower rate than in April, due to "challenging conditions".
Dinner Party Chatter...
Daily Mail: Average property is losing £45 a DAY
... I forget who asked when the topic of dinner-parties would turn to 'how much has your house lost you?' from how much they were making, but hey - here's the answer. (As an aside, I clicked through to this from Deltablow the Troll's 'Massive Rate Reduction' misrepresentation below.) Mu-ah-ha-ha-ha indeed.
Sellers advised "be prepared to accept a lower offer"
Citywire: Lorna Bourke: What is your house worth?
House prices are falling, there is no doubt about that. All the house price indices are pointing in the same direction – down. The big question is how much have they gone down already, how far will they fall – and does it matter?
On the day Inside Trash goes under Paragon announces - "the average buy-to-let investor intends to hold a property for around 17 years"
Mortgagestrategy: Buy-to-let investors here to stay
A mass exodus from the buy-to-let market by investors is unlikely, says Paragon Mortgages. While many predicted a flight of investors from the buy-to-let market as a result of Capital Gains Tax reform, and the current instability in the housing market, survey results from Paragon suggest that professional landlords are sticking around.landlords represent the core of the buy-to-let market – they are investors that base their purchase decisions on proven tenant demand for long-term returns rather than speculative investment for a quick profit.”
This is fantastic! Too good to be true! Insane Trap went belly up!!!!!
ThisIsMoney: Buy-to-let giant Inside Track goes bust AHA HAHAH HAHAH
Sorry if I have missed some earlier post. this is the best news of the year. AHH AHHAHH AHHAHAH AHHA HAHHH "Britain's biggest property investment company made its money encouraging people to purchase - at a supposed discount - strings of new-build flats to rent out: a business model that has faltered in the face of falling property values, below average rents and a mortgage freeze" and now is the turn of all those that have invested through Insane Trap AAHHA HAH HAHAHAHHAHAH HAHAHAH
Comical David and the slump that is better than it could have been if things were better than they are
DavidSmith: EconomicsUK - Mortgage approvals 64,000
"Mortgage approvals in March hit a new series low of 64,000, down from 72,000 in February (itself revised down) and an average of 81,000 over the previous six months. Though the figure was weak, it was perhaps not as weak as it could have been given earlier data from the British Bankers' Association" AHH AH HAHAHAH AHHHAH HAHAHHA AHAHHA HAHHA HAHHhAHAHAHHA HAHAHAH
lessons learnt?
London Business School: Crunch time: lessons learnt from the credit crunch crisis
"Considering the damage it has done, what is surprising is just how relatively small the sub-prime market was. “In 2006, Moody’srated about $460 billion of assets with some component of sub-prime but it was a very small proportion of the overall global credit market”, says Sergio Ravich (MBA93), Senior Managing Director at BearStearns International."
Bit of fun..
Telegraph TV: Livedraw
Also check out the older Livedraws - pretty much on message!
house prices fall 12.7% most on record
bloomberg: house prices fall 12.7% most on record
don't worry though us has very low employment!..average price in us is about £105,000 for a detached house. uk prices are totally nuts just think its gona crash through the floor much quicker than I thought
a social and economic nightmare that will make the last depression look like a stroll in the park.
debtism.com: Getting Ready for Hard Times
WARNING FROM 2006 The USA is leading the “Global Economy” toward the biggest economic catastrophe ever recorded. Depreciating fiat dollars and legal and accounting defects in US tax and welfare laws are the root cause of the inevitable calamity. There appears to be a growing public awareness that the American Dream is slowly evolving into an American Nightmare. Voices that sound alarms of the impending peril are woefully muted or publicly ignored. author, John T Koraska, MSgt, USAF, Retired, age 70. While in the service (1954 – 1974), the author was a Communications Intelligence Analyst/Reporter. Although paid by the USAF, most operational duties were under the direction of the National Security Agency (NSA). high quality reference material
You can polish it, mash it, paint it, dice it, grate it, mould it and apparently sell it - It's still s**t though!
Bloomnerg: Pandit's `Closer to End' Means No Escaping LBO Loans
Banks escaped about $65 billion of LBO commitments in the past four months in part by lending money to private equity firms such Blackstone Group LP's GSO Capital Partners and Apollo Management Inc. Wall Street is getting rid of the debt individually, in packages or placing it into structures such as collateralized loan obligations, which pool loans and slice them into pieces with various ratings to sell to investors. ``They're substituting one credit for another but they're still ultimately on the hook for the debt,'' said Robert Willens, a former managing director Lehman Brothers Holdings Inc. who runs a tax-advisory firm in New York.
Tip of Iceberg
CNN: Countrywide loses $900M as more loans blow up
NEW YORK (CNNMoney.com) -- Countrywide Financial Corp. swung to a nearly $900 million loss Tuesday, after the mortgage lender was forced to set aside more money for credit losses as a result of further deterioration in the housing market.
Nice home for your house deposit?
Moneysupermarket.com: ICICI Bank 7% 1 year fixed term deposits
Lets see 5.6% net + 15% drop in house prices = 15.6% yield= Much better yield than buy to let.
Mortgage lending lowest since records began
Times Online: Mortgage lending lowest since records began
Title speaks for itself!
The scams that have been going on throughout the boom come to light
Evening Standard: Fraud and dodgy dealings emerge as property prices fall
Surveyors over-valuing, complacent solicitors, dodgy mortgage brokers... maybe 'Inside Track' and their ilk should watch out, as I'm sure there will be thousands of repossessions following in their wake over the next couple of years
Mervyn Gives our Banks a Good Kicking
Guardian: Lure of City money too strong for young, says Mervyn King
Some nice plain speaking: "The governor of the Bank of England issued a stern rebuke to the City today, saying that too many of Britain's most talented young people are being lured into financial careers by the huge bonuses on offer."
What credit crunch
my finances: No Crisis
Seems like the end of increasing mortgage rates looks like the peak has been achieve and rates will now drop.
Prices "slashed" in London
London evening Standard: Advice to first-time buyers and investors: don't do it
This is the most bearish article in the London Evenig Standard I have EVER seen. e.g. Anyone else facing redundancy or even repossession should make every effort to sell before the latter takes place. The experience of the early Nineties is that being repossessed is the worst possible option. My advice to buyers - especially first-timers and investors - is much simpler: don't do it.
First of many
Daily Mail: Massive rate reduction
seems like we are beginning to see some relaxing again.... price to stay high i think..
The Iraq adventure has seriously weakened the U.S. economy, whose woes now go far beyond loose mortgage lending.
NPR Economics News: Joseph Stiglitz on Our 'Three Trillion Dollar War'
The major factors driving up war costs go beyond the number of troops deployed or the operating pace or "optempo" of the war. Since 2004, the average number of military personnel deployed to the region in a given period has grown by 15 percent—but the costs have rocketed by 130 percent. Similarly, the intensity of operations is estimated to have risen by 65 percent during the period—half the rate of cost increases. In 2007, private security guards working for companies such as Blackwater and Dyncorp were earning up to $1,222 a day; this amounts to $445,000 a year. By contrast, an Army sergeant was earning $140 to $190 a day in pay and benefits, a total of $51,100 to $69,350 a year.
The penny's dropped!
The Telegraph: HBOS cash call: will it be enough?
What is also worrying is that the vast bulk of the banking losses declared to date have had absolutely nothing to do with the UK at all and all to do with the situation over the pond. With housing now showing signs of weakness over here as well it is not a great leap of imagination to conjecture at the potential liabilities encompassed by our own mortgage time-bomb and to believe that the big banks will need the cash not just to expand but to survive. Arguments about the fundamentals being completely different between us and the States due to restrictions on the availability of housing stock are correct insofar as this line goes, but the same could have been said of Japan 17 years ago. They live on a similarly crowded island group with just as rabid protection of 'greenbelt' status - bu,
Inside Track in Administration
This Is Money: Buy-to-let giant Inside Track goes bust
Inside Track, the company that promised to turn a generation of Britons into 'property millionaires', has gone into administration.
Gwynedd bucking the trend ?
Daily Post: House prices up 9%
Year on year prices up 9%, in Gwynedd North Wales, with a claimed 1.5% growth in March. Has Greenbay been on a buying spree?
A scapegoat on the way to market?
BBC News Online: Mervyn King set to face scrutiny
When Mervyn King appears before the Treasury Select Committee later, it will be the first public opportunity to discuss the £50bn-plus loan scheme for British banks which he unveiled on 21 April. Many said Mr King's focus on "moral hazard" during that early period - the risk that special support for banks now would reward banks who had made reckless decisions in the past - was a reflection of his overly 'academic' approach to the financial markets. Will Mr King 'eventually' have to fall on his sword, or be stabbed in the back?
Buffett snaps up Wrigley but still warns of recession
MoneyWeek: Warren Buffett bags a bargain
Warren Buffett is doing deals again - this time for Wrigley - but he still thinks we're facing a recession. Meanwhile, rights issues from RBS and HBoS show that while the government would love to spin its way out of a downturn, the banking sector is facing up to this reality. But while it may be better for the banks to do this sooner rather than later, the dividend will also take a hit - meaning investors should ignore tempting yields, and stay away from bank shares.
So much for switching to interest only
guardian: Abbey clamps down on interest-only deals
Abbey today become the first major high street lender to clamp down on low-cost "interest-only" mortgages by reducing the maximum loan for such deals to as little as 50% of the property's value
Good Good
The Telegraph: Drop in mortgage lending signals gloom for house prices
The Bank of England has today said that seasonally-adjusted mortgage approvals for house purchases fell to the lowest level since comparable records began in 1993. Approvals fell to 64,000 in March, down from 72,000 in February and below a 2007 peak of 115,000 seen in both May and March.............
unbelievable manipulation
bbc news: king wants to put houses in the basket
house prices not in the inflation basket during the boom not being put in the backet. outrageous surely
Good explanations of terms here
Safe Haven: Credit Contraction, Economic Bust, and Deflation
"Members of the deflation camp assert that the large-scale contraction of credit happening within the banking system means that deflation is upon us, even if the money supply is expanding. At the same time, another camp is pointing to the breathtakingly rapid growth in M3 money supply as evidence that hyperinflation is a near-term threat. In our opinion, both camps are wrong"
64,000
Reuters (BoE): Mortgage Approvals Drop to Record Low
Figures from the Bank of England showed mortgage approvals -- a leading indicator of housing demand -- dropped to 64,000 last month from a downwardly revised 72,000 in February. That was the lowest number since the current series began in January 1999. It was also the lowest since monthly records started in April 1993, although at that time remortgaging approvals by banks were included.
House prices to rise late this year
introducer: Not Market Crash
5% growth in prices predicted the later part of this year
Squoze and squoze and squoze ...
The Independent: Nationwide doubles the deposit required for new mortgages
I love the following quote in this article: Jeremy Leaf of the Royal Institution of Chartered Surveyors (Rics), said: "Sentiment is at a very low ebb and will continue to remain depressed while the economy suffers from this unique liquidity blight. The slowdown in prices is directly attributable to a lack of available finance which has hit demand." "Unique liquidity blight": Hahahahaha; Yeah like I get when I spend recklessly on presents over christmas, is that a "unique liquidity blight". What a joker.
Buy to Let strong
introducer: Buy to Let strong
Constant streams of tenants....
HBOS follows RBS with rights issue
FT: HBOS launches £4bn rights issue
Britain’s biggest mortgage lender, launched its £4bn rights issue on Tuesday as it announced write-downs totalling £2.84bn against impaired securities in its first quarter, and plans to bolster its capital base.
RBS, HBOS - whos next?
Citywire: HBOS confirms £4 billion rights issue
HBOS has announced a £4 billion rights issue in a bid to strengthen its capital base and protect its competitive advantage.
New deals coming
Housefund: Nationwide first with package
Nationwide is the first to make an attractive package for first time buyers, news is a number will follow in the coming weeks
It's a housing led recession, stupid !
Telegraph: UK job cuts feared in economic slowdown
Take note David Smith. Oh, you are sooooo wrong ! "The conditions are building for an avalanche (or redundancies) - the question is whether there will be a trigger point. I suspect the housing market will hold the key."
Matt
Inside Track Goes Bust!!!
Guardian: Champion of buy-to-let boom succumbs to credit crunch
Inside Track, the company that spearheaded the buy-to-let investment boom, is to go into administration early this morning. Inside Track blames the credit crunch for its collapse as banks tighten up on buy-to-let lending, effectively ending 100% loans. Profits for the group three years ago were as high as £12m, but internal management accounts for the nine months to January 31 this year show income of just £239,000, with a £97,000 loss in January alone. In early March, Inside Track announced it was ending its workshops as interest in buy-to-let diminished. The last seminar, at Warrington this month, attracted fewer than a dozen people.
Monday, April 28, 2008
ERrrrmmm it currently about 2.5%... this might push it to 2.6 maybe
BBC News: Opec warns oil could reach $200
Opec, the oil producing cartel, has warned that the price of crude could keep rising to reach $200 a barrel.
Losing one in five jobs on Wall Street could have dire consequences for the city's economy
the truth seeker: Wall Street may lose 36,000 jobs
Wall Street, the lifeblood of New York City's economy, could lose over 36,000 jobs because the financial credit crisis has rocked markets and stunned the U.S. economy, estimated James Brown, a labor market analyst with New York state's labor department. "History suggests it's going to be something of that magnitude," Brown told Reuters, noting Wall Street employment peaked at 200,300 in December 2000, nine months before the September 11, 2001 air attacks.
Poxtons - obstructive actions to keep money in their account?
LandlordZone: Foxtons still did not pay me my FIRST RENT!
Tip of the iceberg? Poxtons on the slide?
More gags
Assetz: Good news - Prices are falling
The news today appears to have been rather bad if one only considers good news to be increases in house prices. For those looking to sell or borrow against the value of their house it certainly is, but less so for those looking to buy. While some will groan at the news, not so buy-to-let investors. Lynsey Sweales, director of the buy-to-let centre, a specialist firm, told the Independent that existing landlords are keen on more property investment for precisely that reason. She said: "Our customers are not worried about falling house prices."
Your weekly dose of comedy from Mr Lawz
Assetz: Ignore the hype, there is no house price crash
Figures from the latest Assetz House Price Watch, which analyses data from the five main house price indices, suggests that the market is in fact flattening, and not dramatically falling as reported by some. Stuart Law said: "Our analysis of average monthly prices across the main house price indices, combined with averaging these across the prior three months, takes out all of the volatility and statistical errors that are evident in the monthly data. This much clearer picture of market performance and reveal that average annual price growth has now flat-lined at around 0%, with no significant decline. As I have been stating for some time now, the housing market is very unlikely to crash. The fundamentals of supply and demand support this. I stand by prediction of 5% growth in 2008."
All good stuff ...
London Evening Standard: Once red-hot property market hits big freeze
A more-or-less identical article was in the sister paper 'London Lite' under the heading "Housing in limbo as sales drop up to 50%". Factoid: "Average prices in [a particular] postcode hit a five year high of £670,000 last year but dipped to about £600,000 in the last quarter"
Auto finance arms feel the credit squeeze
FT.com: Auto finance arms feel the credit squeeze
The effects just keep rippling through... soon they will start rippling back (well they have done already really)
Cuuuuuuuuuurash!
FT: Brokers warn of further rises in mortgage rates
“Until confidence returns and Libor starts to fall, new mortgages will stay expensive,” said Melanie Bien at Savills Private Finance. Some lenders may be reluctant to compete for new mortgage assets now that house prices have begun to fall. “For some banks and building societies, it doesn’t make sense to cut rates to encourage assets on to their books,” said a spokesman at one of the banks. “They’re being incredibly careful about their capital to boost earnings and margins.” Incredibly careful - that's a new vocabulary for the banks!!!!
EC scathing over Brown and Darling's borrowing
Times: EC scathing over Brown and Darling's borrowing
European Commission scathing over Brown and Darling's borrowing The EC will formally rebuke the Chancellor and the Prime Minister for allowing Britain’s finances to slide further into the red Brussels inflicted a double embarrassment on Alistair Darling today, challenging his economic forecasts as too rosy and launching disciplinary action against Britain for allowing its finances to slide too deep into the red.
But wasn t £50bn all we needed to un-clog the mortgage misery?
Times: Nationwide and Abbey turn the screw on mortgage
"Nationwide, the UK's biggest building society, and Abbey, the third-biggest lender, announced a raft of new rules today that will squeeze out borrowers who do not have a deposit of at least 10 per cent of their property's value, after chopping the maximum loan size from 95 per cent to 90 per cent for the majority of deals" Nationwide also announced that it would reject borrowers with £1 million loans, after cutting its maximum loan size from £1 million to £500,000" TIIIIIIIMMMMMBER!
Morley - the dollar could become fashionable again.
fundstrategy: Dowdy currency will be hip again
The dollar slides and investments in American equities made five years ago are worth 20% less than the same investment in British equities. But the dollar could become fashionable again. Over the past five years, the dollar has fallen badly out of favour with investors; falling 22% in real terms against a basket of currencies containing America's main competitors. The dollar has not experienced such a loss of confidence since the mid 1980s. As the dollar's slide has gathered pace, governments around the world have begun to unhitch their currencies from the dollar - even Jay-Z, the hip-hop star has forsaken fistfuls of dollars in favour of euros in his music videos.
ITV sounding bearish
ITV News: 'House prices continue to fall'
Plenty of good news from ITV: "The latest falls helped tip the annual rate of growth into negative territory". "Those who do manage to sell their home are having to accept an average of 92.7 per cent of their asking price," "Furthermore, virtually every other element of the Hometrack survey pointed to further house price weakness ahead."
Which way will gold go?
Safe Haven: Precious Points: The Final Cut?
"The dollar rally and the notion commodities have cracked all seem to rest on this idea of the Fed raising interest rates again relatively soon to contain inflation. The fact, however, is there's little to suggest anyone actually wants a stronger dollar, just a stable currency that will make business more transparent. The wave of inflation triggered by the current easy money policy has only just begun to materialize and, because of the consumer's link to interest rates through their home mortgages, it will be all but impossible for the Fed to make any more than token hikes in their target rate. "
Prices down 5% over last six months!?
BBC: Survey sees house price slowdown
If we take the midpoint of the Nationwide and Halifax indices as at September 2007, HPI was running at 10%-ish. If both indices are now flat y-on-y, this suggests to me that in the six months March - Sept 2007 prices went up 5%, and in the most recent six months they'd gone down 5%. The HPC seems to be getting off to a cracking start!
HM Treasury Report from 2004
HM Treasury: The UK Mortgage Market: Taking a Longer-Term View
So the warnings were sounded in 2004 to team GB, but I'm guessing they were ignored ?
House prices could fall 25%, warns Savills
Yahoo: House prices could fall 25%, warns Savills
Estate agent Savills said the worst case scenario would see prices slump 10% in 2008 and another 15% in 2009, although the "super prime" market will avoid a sharp drop.
Most bearish article I've seen in the Express yet
Daily Express: Homes now cheaper than a year ago
They've disabled comments on the article though!
Deckchairs on the Titanic..
Telegraph: Nationwide plans new mortgage range to help first-time buyers
"which is one of just a couple of lenders to offer deals to buyers with just a 5pc deposit " "First-time buyers with this minimum deposit will pay a fee of just £299 for a three-year fixed rate of 6.45pc" Fees are a relatively new invention - a smokescreen to disguise the fact that borrowers are not really able to afford the loan. - should be banned!
SCARY-there were only 15,800 repossesions in 1989
scotsman: there were only 15,800 resossessions in 1989
holy cow...we are already double the repos than end of 1989 which was 17 months into the slump. Really scary statistics imo..could we see 150,000 repos at the bottom?
Dom Joly versus the Estate Agents
channel five: Dom Joly V House Prices
"The crash is coming" Shouts Dom Joly into a megaphone at the smug owners of yuppy georgian houses in posh Islington. Especially apt seeing as it was filmed in Novermber - whilst the rest of the media was ignorong the scenario. In Episode 3 of Dom Joly's Complainers, 10pm on FIVE as well as taking bad public transport to task, and issuing Parking Wardens with tickets for ruining people's days, DOm goes on a rant about House Prices. He blames Phil, Kirsty and the Media, as well as Estate agents for the mess. He asks why people were prepared to pay 1/4 million on a new build that looks like its made of lego, and takes Foxtons to task for making themselves look like a bar. Watch as he also gets revenge on those annoying branded cars that estate agents all use. 10PM TONIGHT FIVE
Stark rise in repossessions forecast
Mortgagestrategy: Repossessions set to soar by a quarter
Home repossessions are set to climb by nearly a quarter this year, a report from the Centre for Economics and Business Research warns. The quarterly report, released yesterday under the title Consumer and Housing Prospects, predicts more than 33,000 home owners stand to lose their home in this year alone. The figures represent a stark increase when comparing them with past data. CEBR’s predictions are up 23% compared to the repossession figures from last year, and are a massive 300% increase from 2004.
London calling
The Guardian: House prices go into steeper decline - even in London
Richard Donnell, Hometrack's director of research, said: "While the availability of finance is impacting on demand in certain segments, the reality is that weak confidence is effectively resulting in a buyers' strike, with households sitting on the sidelines and waiting to see how events unfold.............As I have said public perception of the property market is going to be the killer
Why HBoS should jump at the chance to raise cash
MoneyWeek: Why HBoS should jump at the chance to raise cash
Following Royal Bank of Scotland's record £12bn rights issue, the next in line seems to be HBoS. And the biggest weakness for HBoS is the falling UK housing market.
Hometrack data goes mainstream
Sky News: UK House Prices Lower Than In 2007
House prices fell for the seventh month in a row during April to leave homes costing less than they did a year ago, new figures show. The average value of a home in England and Wales fell by 0.6% during the month. It now stands at £173,100, with price drops recorded in just over half of the country. That's according to house-price information group Hometrack which says homes now cost an average of 0.9% less than in April 2007.
March Land Registry Report
Land Registry: March 2008 House Price Index
Wales and England......MoM; -0.4%. YoY; +3.6%. Wales and East Midlands [b]YoY NEGATIVE[/b]
What to do after the Crash
MSN: How to fix the economy
Last week I talked about what the likely outcome of the housing crash was going to be. And let's make no mistake about it - there will be a housing crash. There's not much that can be done to prevent that now. But what can we do to make a better, more functional economy when we actually start to recover? Has John been reading this site?
Could this be the next move by Gordon to ensure we vote
reuters: Lynchings in Congo as penis theft panic hits capital
KINSHASA (Reuters) - Police in Congo have arrested 13 suspected sorcerers accused of using black magic to steal or shrink men's penises after a wave of panic and attempted lynchings triggered by the alleged witchcraft.
RBS seen axing 7,000 jobs
reuters: RBS seen axing 7,000 jobs
Royal Bank of Scotland will this week start the integration of ABN AMRO's investment bank in a move likely to trigger the loss of about 7,000 jobs out of a combined total of 28,000, the Financial Times said.
Oil jumps $1 to record near $120 on strike, worries
reuters: Oil jumps $1 to record near $120 on strike, worries
PERTH (Reuters) - Oil leapt more than $1 to a record high near $120 a barrel on Monday after workers pushed ahead with a two-day strike that shut a major North Sea oil pipeline supplying about half of Britain's oil. Fresh violence in Nigeria and simmering tensions between the United States and major oil exporter Iran also helped to offset the impact of a rising U.S. dollar to boost oil prices.
Bananas with your republic anyone.
Timesonline: Postal vote fraud threatens to wreak mayoral poll chaos
Labour doing anything to stay in power, absolutely anything. Discuss.
House prices to fall to 2004 levels this year alone
Reuters: Are you facing a capital loss on your home?
Finance website Fool.co.uk expects property prices to tumble 20 percent this year, taking the average British property value to £153,400 from £196,000 -- the same level as spring 2004 levels. That means that, on average, people who have bought since then will be sitting on a capital loss. Not all, however, will face negative equity, as some will have taken out a mortgage of less than 100 percent or more of the purchase price.
global food crisis is a monetary phenomenon
Market Oracle: US Fed To Blame for Global Food Crisis
The US has been gaming the system for decades; sucking up two-thirds of the world's capital to expand its cache of Cadillac Escalades and flat-screen TVs; giving nothing back in return except mortgage-backed junk, cluster bombs, and crummy green paper. Nothing changes; it only gets worse. But this is different. The world is now facing the very real prospect of "completely avoidable" famine because twelve doddering old banksters at the Federal Reserve would rather bailout their sketchy friends and preserve their spot at the top of the economic food-chain then save the lives of starving women and children.
HBOS, the UK’s largest mortgage lender, has said it expects a “modest single digit” decline in UK house prices this year.
telegraph: HBOS will attempt to raise £4bn
HBOS, the UK’s largest mortgage lender, is set to launch a rights issue to raise up to £4bn as it braces itself for an ongoing downturn in the UK economy. The owner of Halifax and Bank of Scotland will make a final decision about whether to push the button at a board meeting today, ahead of its annual shareholder meeting tomorrow in Glasgow. If it goes ahead, it is likely to ask its brokers Morgan Stanley and Dresdner Kleinwort to organise the rights issue.
agent says house prices could fall 25%
agent says houseprices could fall 25%: times
its actually happening and now agents will be forced to slash prices to stay in business I have always said its the agents bizaarly who will start and push the crash