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.
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
Yet another milestone!
The Telegraph: House prices now falling year on year
"The first evidence that the average home is worth less than it was a year ago is disclosed in a report today, sparking fears that hundreds of thousands of homeowners could be plunged into negative equity.Over the past month lenders have increased their mortgage rates sharply to new borrowers.The average residential property is now worth £173,100 - £1,500 less than a year ago, claims Hometrack, the property research company.The 0.9 per cent slump is "highly symbolic", say industry analysts, because it is the first time since the credit crisis began that any property index has shown house prices falling on an annual basis".
Job losses are increasing
Telegraph: Company insolvency climbs 17pc
According to PricewaterhouseCoopers, in the first three months of 2008, 3,359 companies failed across the UK - a 21pc jump on the previous quarter and a 17pc increase on the same time last year.
Worth a read
FT: Global adjustment will be long and painful
So this crisis is about to end, right? There are two failsafe ways to justify a solid dose of optimism: define the crisis in a sufficiently narrow way; and, even better, look at the wrong crisis. In that spirit I am happy to state my optimism about the prospective end of the subprime crisis.
Hometrack: -0.6% MoM, -0.9% YoY
Press Association: House prices fall for seventh month
House prices fell for the seventh month in a row during April to leave homes costing less than they did a year ago, figures showed. The average value of a home in England and Wales fell by 0.6% during the month to stand at £173,100, with price drops recorded in 51% of postcodes, according to house-price information group Hometrack. The latest falls helped tip the annual rate of growth into negative territory, with homes now costing an average of 0.9% less than they did in April 2007. At the same time there was a fall in both the number of new buyers registering with estate agents and the number of sales agreed.
Sunday, April 27, 2008
Two houses may be almost identical, yet only one will sell
Times: The market: sellers of less-than-perfect homes forced to slash price
Here is a conundrum to test those who think they know what is going on in the property market: an estate agent has two houses for sale, both fine examples of thatched New Forest cottages, both beautifully restored and put on the market at a similar price, at roughly the same time. One is snapped up within a few weeks and sells for more than the asking price after a bidding war between two buyers. The other languishes on the shelf for months. As property prices continue to fall, even the smallest niggles – issues that would be overlooked in a stronger market – are prompting buyers to walk away or make offers well below the asking price.
First RBS, now another one topples
BBC: HBOS 'to consider rights issue'
HBOS, the UK's fourth-biggest banking group, has declined to comment on reports that it is considering asking its shareholders for extra cash. Sunday papers reported that HBOS directors will decide on Monday whether to ask investors for as much as £4bn. Last week the Royal Bank of Scotland said it would pursue a £12bn rights issue to reinforce its position.
Take the test, do HPC Prophets have a similar personality type?
Humanmetrics: HUMANMETRICS
Humour me, take the test, I have long thought that HPC prophets have a different personality type, one that makes us not follow the crowd, maybe you could post your results? This test is based on Carl Jung and Isabel Myers-Briggs typological approach to personality. When answering questions, please choose one of two possible answers you agree the most. If you are not sure how to answer then the decision should be based on your most typical reaction or feeling in the given situation. Respond to all the questions to get a reliable result.
Damn! people are cottoning on to the Lidl Coolness!
Telegraph: Every Lidl helps during credit crunch
As food prices soar and the credit crunch bites, the middle classes are discovering a quirky charm in discount supermarkets they once thought rather below the salt. Dressed in a cashmere sweater and tweed trousers, with a string of pearls around her collar, Marian could be browsing at a farmer's market in the Périgord or the King's Road Waitrose. In fact, she is in Lidl, next to Clapham Junction station, surrounded by pensioners pushing tartan wheelie bags, tattooed men with pencil-point pupils, and mothers in burqas trailing three children under three.
Bank bail-outs to be kept secret
daily mail this is money: Bank bail-outs to be kept secret
"The Bank of England has imposed a permanent news blackout on its £50bn-plus plan to ease the credit crunch Requests under the Freedom of Information Act are to be denied. Details will be kept secret even after 30 years - the period after which all but the most sensitive state documents are released"
COMING SOON, PENSIONS of the FUTURE KIND - REVERSE MORTGAGES
The Wall Street Journal: Reverse mortgages getting better
Tomorrow's reverse mortgage products also will be different, as will tomorrow's lenders, Johnson told the industry gathering. "Our one-size-fits-all product has worked in the past, and I'm proud of it. But it won't work in the future," he said. "We'll have products that target life stages, not just ageing, because borrowers' requirements change as they age so they can have the lifestyles they want. They're looking for a lot more than just reverse mortgages."
All good stuff
Daily Telegraph: Citywire: Britain facing one of the worst housing crashes in history
As an anecdote, the landlady came round yesterday 'for a chat' and that's all it was! She asked us whether we intend to renew when our 6 months were up and we said we'd think about if. But we went and viewed another house that's £600 a month cheaper, and I prefer that one anyway.
"It doesn't work like that!"
Times Online: Beware cheap loans with a sting in the tail
Before you rush to snap up a mortgage with a cheap headline rate, check you won't face an extortionate fee. Offer of low rate offset by high fees....which in affect is the same thing to the man in street as a high rate overall. I bet the posters in the window displays a massive sized % sign and teaser rate (in the shape of a cartoon purse no doubt).....that is eyecatching....but you'll need to go to Spec Savers to read the small print at the bottom. Shysters! the lot of them.
Britain will escape a repeat of the negative equity crisis of the 1990s
FT: UK housing slump fears overplayed
Britain will escape a repeat of the negative equity crisis of the 1990s unless there is an unprecedented fall in house prices, according to Financial Times analysis that suggests talk of a disastrous housing slump is overplayed.
Long article, but worth a read.
Times Online: The mortgage lenders’ hall of shame
After lenders refused to pass on their £50 billion bail-out, we reveal whether your bank or building society played fair in the credit crunch.
Stockmarkets have a long way to fall yet
MoneyWeek: We’ve a long way to fall yet
A new bull market began in March 2003. Or so most people agree. But a longer-term view suggests that the post-2000 bear market isn’t actually over yet - and won't be for quite a few years.
2012 will see the Next Great Pension Robbery
Citywire: Will a pensions revolt follow the 10p tax U-turn?
The proposed automatic National Pension Scheme will see many scheme contributors being taxed at 40% whilst in some cases that effective tax rate could be as high as 100%. Yes, you heard that right; some people could lose all of the value of their pension savings if they are poor enough to be entitled to means-tested handouts when they are retired.
Hard landing after hedge fund "mass heist "
Independent: The herd, the hedge fund and the billion dollar rip-off. How we all got mugged
Herd-like behaviour among investors is not simply explained by stupidity. Most asset bubbles are fairly obvious phenomena, even while they are still inflating, yet despite the fact that everyone knows they must eventually deflate, they remain strangely seductive. Nor is this apparent willingness irrationally to ignore the dangers explained entirely by greed: you know it's a bubble, you know it will eventually end, but hey, prices could double again before gravity takes hold.
HBOS on the edge?
Independent: HBOS to reveal new writedowns as investors fear rights issue
Investors will find out on Tuesday the extent of further write- downs at HBOS, owner of the UK's biggest mortgage lender, the Halifax, amid concerns the bank will launch a rights issue.
Coment on Bank Bail Out
Active Mortgage Advice: Liquidity Scheme
Don't trust the banks to negotiate a bail scheme out that benfit anyone but themselves. The current £50billion bail out allows banks to dump previous reckless lending without providing any incentive to offer new mortgages at a competitive rate,
A journalist who is selling to rent
Guardian: Crash course to being mortgage free
He called the crash last time round at the right time, and now plans to do it again. I think he may be about 6 months too late, but a very well written article nevertheless. He also gives us a mention.
Rosie, eat many humble pies!
Rosie Millar @ the times: Join me in the new austerity
This was the BTL baroness that was teaching how to get rich quick with property just a few months ago in the Times. AHHHAHHH HAHAHHAHAH HAHHAH HAHAHHA. Hope we ll see her begging for food by Kings Cross, after being repossessed her flats in Islington
33,000 repossessions and the rest.
Guardian: Repossessions set to soar as costs spiral
According to a report today from the Centre for Economic and Business Research (CEBR), more than 33,000 borrowers will lose their homes once their fixed-rate mortgages, agreed prior to the credit crunch, come to an end and interest costs rise.
Out of love with Bohemian living style that helped developers squeeze out last inches of space
Telegraph: Loft apartments: Have we fallen out of love with lofts?
Interesting article in the sense that it has been written in the first place. Definitely in the property porn style of writing, but could be considered bear food as it states how buyers have fallen out of love with overprices loft appartments. In terms of the depth of journalism very much the same as a fashion rag article, equivalent to well last year we loved brown, but this year it is definitely out. I guess it will get across more easily to some readers.
This will be fun if the Governent gets involved
Telegraph: Industry urges Government to act over Grangemouth strike
Industry wants the Governement to intervene in the Grangemouth strike "at the higest level". Oh to be a fly on the wall in those discussions! Gordon: Come come man I here these money purchase pension schemes are quite good Unite: If you hadn't robbed the pensions funds this might never have happened Gordon: Oh now man, your getting all hot and bothered over nothing, I never worry about my pension Unite: Thats because MP's pension are gold plated idexed linked final salary schemes.. Why don't you lead by example and close the MP's final salary pension scheme! Gordon: Now what good what that do? Unite: It would make you MP's take an interest in economic matters! Oh will Gordon take the plunge?
Ouch!!
MSN Money: Why oil could hit $180 a barrel
Needless to say, today's petrol would look cheap if oil prices hit $180 a barrel. The good news is that's about thsi price, experts say, it would send global consumption tumbling and oil prices into retreat, as drivers scrambled to find ways to conserve. In other words a deep recession will solve the oil price price - nice solution!! The problem is supply and demand; demand is going up and supply from Russia, Nigeria and Mexico is going down. Bio fuels to the rescue? I suspect not; the choice will be simple food to eat or petrol to driver?
BTL to the rescue
Independent: Buy to let keeps the housing blues at bay
In fact, British landlords are barely breaking into a sweat. "Our customers are not worried about falling house prices – they are making use of them to buy more property with enhanced negotiating power," says Lynsey Sweales, director at buy-to-let specialist The Money Centre. "They have experience in the field, owning an average of 7.2 properties each, which means they have an adequate financial cushion." According to the latest buy-to-let index from lender Paragon, average monthly rents reached a new peak of £990 in February.
Elliott wave 5 ready to go?????
Market Oracle: Silver and Gold at Critical Juncture
Elliott Wave suggests a final wave 5 up for silver and hence analysts suggest this is only the preceding wave 4 correction. That may well be but the problem is that is a pretty big wave 4 correction in price and time. However, the wave 2 top of November 17th at $16.20 has not been breached (barely) so theoretically another final move up cannot be discounted (though one suspects that heavy selling will be encountered at or near the high of $21).
Saturday, April 26, 2008
Ity the Mortgage Poor, the Boomerant Poor and the Plastic Poor
Telegraph: Financial crisis: What kind of poor are you?
Can't make my mind up whether all the stereotypes in this article are faux or not, but it's a hilarious read bordering on black comedy and a sad reflection of the position the UK is in these days.
No crash
It's all in the Stars...
Astrological Musings: Britain's biggest banks use astrology!
Christeen Skinner blinks at the screen of her computer and takes another slurp of coffee. It’s half past seven in the morning and she’s preparing for a crucial meeting with the chief executive of the High and Mighty fashion chain...Christeen is one of a growing, albeit secretive, network of astrologers who work for seemingly conservative British institutions such as high street banks, City investment funds and retailers. Desperate to avoid financial meltdown in the ongoing ‘credit crunch’ and to spot fashions and consumer trends before they start, these institutions have turned to the stars to divine the future.
Recap of events in the past few weeks
It's all going in the right direction
The Independent: Persimmon suspends new projects amid fears of falling prices
I am sure that this ties into something I read on HPC, where it was suggested that when housebuilders stop building it is followed by spiralling house prices. Guess who gets scr*wed(same preople as abolition of 10p tax band)? See-Under the plan, a pet policy of the Prime Minister, Gordon Brown, the Government foresees an annual new-build rate of 240,000 homes per year. Last year, the industry brought about 165,000 new homes on to the market. Mr Farley warned that 2008 will be much worse. "It is going in the wrong direction. We could see 110,000 or 120,000 [houses built next year]," he said. How can it be ok to say one thing and do the other in this day and age-scandalous-I for one am sick of it. P.S BOE will put INT Rates up 0.5% on 8th May or sooner!!!
It's no surprise that an oil company leads the list of 2007's top profit-makers.
CNN: The Fortune 500's biggest winners
Exxon Mobil, the world's biggest oil company, posted a 2007 profit that was almost twice as much as that of the next company on this list
Maybe Gordon will bail this pension out? Another 1 trillion of cheap money!!!
Yahoo: Petrol Panic Fear As Oil Refinery Shuts
"People should accept that they will probably be rationed to an amount of petrol to conserve supplies.
Let's all laugh at the greedy sellers
Guardian: Gazundering ... it's just daylight robbery
We've been mugged! That, according to Guardian Money readers, pretty much sums up what it feels like to be "gazundered". Gazundering is where a homebuyer demands a reduction on the agreed purchase price at the 11th hour, and it often rears its ugly head when house prices are falling. Several readers told us their gazundering horror stories, and here are a selection:
So if they don't build and sell houses - what's the business model?
BBC News online: New builds stopped as sales fall
A leading house builder has abandoned plans to build homes on new sites until mortgage conditions improve. North Yorkshire-based Persimmon said the lack of cheap mortgages and a fall in consumer confidence had resulted in a loss of business. Builders sitting on a mass of unsold development land? Question: How does this business model work them?
Only aliens can save the BTLers now
FT: Merryn Somerset Webb: Rescue rumours require a reality check
"Anyone who thinks that the worst is past is surely living in the same fantasy world as some of the residents of the Aude: still to come are the bankruptcies, repossessions and rises in unemployment that will follow the end of the housing bubble."
Not all roses in the rental garden
FT: Rents squeezed by flood of properties on to market
"Rents in some areas could fall this year as agents are seeing a flood of available properties, a drop in corporate lettings, and an unwillingness from tenants to lock into new, more expensive, rental agreements."
Bullish analysis of the situation....
FT.com: UK housing slump fears overplayed
''...Britain will escape a repeat of the negative equity crisis of the 1990s unless there is an unprecedented fall in house prices, according to Financial Times analysis that suggests talk of a disastrous housing slump is overplayed....''
ego home for loads of cash
daily male: eco home for 7 million
allright for sum innit....and bilbo for a neighbour, , my tents drying out nicely now...
If 50billion buys BoE a 0.6% IR rise, what rise will 100billion buy!
Telegraph: Mortgage rates rise for second time in days
Halifax, which is responsible for two out of every 10 mortgages, has changed all of its fixed rate and tracker rate mortgages to new customers, with a two-year fixed rate deal, for instance, climbing from 6.12% to 6.49%. Some rates have increased by 0.6%, adding £900 on to the annual repayment charges of a £150,000 loan. Rates up from 6.12 to 6.49% or put another way the monthly mortgage bill will increase by 6%
Part 1 of Pillars of Prosperity - Audio tape
Ron Paul: Has Capitalism Failed?
Suggests that the financial problems we face today are not a failure of free markets and too much capitalism, but are the result of a command and control economy which has ensured that western economies have never experienced free economics and true capitalism. Explains that this is the cause of the 1930's depression and the economic crisis today.
You thought you understood money? Think again
webofdebt: DOLLAR DECEPTION: HOW BANKS SECRETLY CREATE MONEY
It has been called "the most astounding piece of sleight of hand ever invented." The creation of money has been privatized, usurped from Congress by a private banking cartel. Most people think money is issued by fiat by the government, but that is not the case. Except for coins, which compose only about one one-thousandth of the total U.S. money supply, all of our money is now created by banks. Federal Reserve Notes (dollar bills) are issued by the Federal Reserve, a private banking corporation, and lent to the government.1 Moreover, Federal Reserve Notes and coins together compose less than 3 percent of the money supply. The other 97 percent is created by commercial banks as loans.2
Friday, April 25, 2008
Homer Simpson gets Free Greenbacks
BBC: US to send out $100bn in rebates
Instead of cutting interest rates further the US starts sending out cheques to stimulate the Walmart Economy. This is the one trick that Gordon Brown would never copy.
Housing capitulation in the media!!
Times: Housing gloom: the silver lining
The silver lining for me is very simple. I will buy the same house in 2 years for 30% less!!!! "The storm clouds looming over the housing market grow darker every day. But for some aspiring homeowners there could be a silver lining, with bargains emerging as asking prices tumble and sellers become ever more desperate to get properties off their hands" " Council of Mortgage Lenders predicts that more than 45,000 homes will be repossessed this year, against 27,100 last year" Propertysnake.co.uk, a website that monitors falling prices, says that some desperate vendors have reduced asking prices by as much as 44 per cent as the credit crisis has worsened" this is fanztztaztix!!
This is a tragedy. An entire country conned into property investment!
Times: Rugby players feeling the crunch as property investments tumble
"some of the game’s finest players have taken a hit in the property market hard enough to make even the stoutest second-row forward double up with pain" lots of muscles but little brain "Vainikolo has invested in a couple of properties in the southern hemisphere and a couple in Britain. “They like the touch and feel of property, they understand the mechanics of it,” Mr Battersby said" Battersby and his cronies should be jailed!
Sanity has been restored, justice has been served!
Times: Banks pull the plug on buy-to-let landlords
"The era of the amateur landlord has all but ended, with banks effectively refusing to lend to new entrants to the buy-to-let market. Thousands of existing landlords also face huge increases in the cost of remortgaging, experts said yesterday. First-time landlords, including parents eager to buy a house for their student children, will now find it almost impossible to enter the housing market"... priceless!
Eye-watering rates downunder
The Australian: Double Whammy for Australian borrowers
AUSTRALIAN home borrowers are doing it tougher than their British and US counterparts as the global credit crunch and surging domestic inflation push rates even higher. ANZ has the highest of the variable rates, along with St George Bank, at 9.47 per cent. NAB is at 9.46 per cent while Westpac is at the bottom of the ladder at 9.37 per cent. It comes as this week's high inflation numbers in Australia dampened hopes for an official rate cut, while the banks continued to lift rates, irrespective of the Reserve Bank leaving the cash rate unchanged at 7.25 per cent. ... Inflation at 7.845% ... How much is the AUD really worth?
Interest Rates up for Savers
guardian.co.uk: Nationwide ups rate as it seeks savers
Nationwide building society increased the interest rate paid on one of its savings bonds yesterday to 6.6% as Britain's savers were enjoying a bonanza because of the credit crunch. Banks and building societies are desperate to raise more funds because the crisis has closed off international money markets. This has seen a savings war break out between building societies as they push up rates to attract more deposits. Nationwide upped the interest rate it pays on its one-year, fixed rate e-saving bond to 6.6% — significantly higher than the 5.99% interest it is charging those taking out mortgages.
Who is your favourite chick?
Bricks Chick: Housing market: the experts' views on property prices
"All confidence has gone from the market and so there is no incentive for buyers to move now, unless there are matters of birth, marriages, death or divorce. This state has been brought on by the difficulties in securing mortgage funding, fears of redundancy, the credit crunch, non-domicile tax changes, the cost of fuel, the cost of living - the list is endless. But if Gordon Brown doesn't know what is happening in the economy, what hope do we have?" YIEIIIEIIEIEIEIIEPIEIIEIEIIEIAH HAAHAHH
U.N.: Soaring food prices 'global crisis'
CNN: U.N.: Soaring food prices 'global crisis'
U.N. Secretary-General Ban Ki-moon calls for immediate action to quell rising food costs.
Time to throw the money counters out of the temple, again
timesonline: Archbishop of Canterbury criticises rich over credit crunch
"Dr Williams and other bishops around the world are becoming increasingly concerned at the growing gap between rich and poor as the credit crunch bites, causing difficulties for the poor and first-time buyers but leaving many in the world’s financial centres still enjoying large bonuses and barely affected by the economic downturn." ... Whatever happened to ethics?
Pushing a piece of string
FT: Ministers given warning about 'unrealistic' target for new homes
The homebuilders have well and truly thrown in the towel (see article). "However, Caroline Flint, [the very tasty] housing minister, appealed to housebuilders not to be driven by short-term problems. "It is essential - and in their own interest - for housebuilders to base decisions on the economic fundamentals and longer-term trends." Er ... since when it committing commerical hari kiri in homebuilders' own interest?
No cheap mortgages - Oh dear
Telegraph: UK house prices will fall almost 20pc in next two years
"Nor will further interest rate cuts feed through to the rates offered by mortgage lenders to new borrowers, it said."
Surely just another £50bn would do the trick
Telegraph: Cheltenham & Gloucester raise rate again
One of Britain's biggest mortgage lenders has raised its rates for the second time in three weeks.Mortgage experts said the move highlighted how the Bank of England's pumping of £50 billion into the financial system earlier this week had failed to "stop the rot" in the mortgage market.The country's largest house builder also warned yesterday that the worst mortgage conditions in 30 years were causing havoc. Cheltenham & Gloucester, the fourth-largest mortgage company, is putting up its rates for new customers, some by as much as 0.6 per cent.
London is different from other parts of Britain because...
Evening Standard: Global toll rises to 47,000 as more London jobs lost
It just means that prices in London will rise in single digits from now on. Nothing to worry about folks! Don't panic, don't panic...
What ... ! Another One?
Edeus exits mortgage orgination as staff cut: ftadvisor
Edeus has announced it is temporarily dropping out of the mortgage orgination market and is cutting its workforce by half. Wonder how temporary that would be then?
Role up role up sign now whilst stocks last
The Times: Buyers rush for mortgages as drought worsens
The number of mortgages taken out slumped by nearly 50 per cent last month as the mortgage drought left buyers scrambling to secure home loans in the wake of the credit crunch....................House price crash u.k. should be on the honours list
Dresdner Kleinwort - The wheels are coming off the eurozone economy,"
Telegraph: Euro dives as wheels fly off eurozone economy
The euro has suffered its sharpest drop in four years as a blizzard of weak data from Germany, Belgium, France, and Spain spark fears that economic contagion may be spreading from the Anglo-Saxon world to Europe. Spain's business federation warned that Spanish unemployment will rise by 500,000 by the summer unless the government takes "valiant measures" to offset the housing and construction crash. "For every dwelling not built, two workers will lose their jobs," said the group's president, Gerardo Diaz Ferran. The IMF has cut its eurozone growth forecast three times since October.
Rosie Millard: No more spend, spend, spend
BBC: This Week
9 mins 30 secs in. Rosie Millard has a "package" on how the middle classes are suffering. She's then on the sofa with Charles Kennedy bleating on about her £50,000 debts and worried about her mortgage reset coming up in October. She neglected to mention her BTL portfolio for some reason. When Charles Kennedy started saying the root of the problem was the commedy mortgages given out at the behest of the banks and that common sense has been telling people (even his junior staff) "for years" this is wrong, Andrew Neil seemed to cut him off.
Another bit of reality bites in realty
Money Week: UK house builders want a bail-out
I've got a business selling pet rocks which has been hit by the credit crunch. Can I have a bail-out too?
Another succesful PPP from the government. Who knows? They could roll this out nationally and the Privatise it!
BBC: Prisons drug trade 'worth £100m'
An estimated £100m worth of drugs are being traded in prisons each year, an ex-prison service worker has said. Former National Offender Management Service drug treatment head Huseyin Djemil said the Prison Service had no idea of the size of the drugs market. Question is "is this man on drugs himself? Or where has he been for the last 10 years?"
from last month but good as a 'Sub-prime for dummies'
The New York Times: Can’t Grasp Credit Crisis? Join the Club
Raise your hand if you don’t quite understand this whole financial crisis. It has been going on for seven months now, and many people probably feel as if they should understand it. But they don’t, not really. The part about the housing crash seems simple enough. With banks whispering sweet encouragement, people bought homes they couldn’t afford, and now they are falling behind on their mortgages. Good article....
Time for another look at this......as intro to this website
The Consumerist: Don't Buy Stuff You Can't Afford
Found great website here....some nice stuff, articles not in the mainstream news, etc... Enjoy.
Holier than thou....I think not!
Guardian online: Barclays basks in glow of not being RBS
Here is the bravest, or most foolhardy, statement we've heard from a bank chief executive for a while. "I recognise that when some banks miscalculate risk then the reputation of the whole industry is tarnished," said Barclays' John Varley.
Reality Check
Mortgages.co.uk: Buy-to-let investors set to expand portfolios
"Professional landlords will expand or maintain their buy-to-let portfolio in coming months, a new survey has found." Now for real life story - I just bumped into an acquaintance I haven't seen for months. He's a serial BTLer who started 2 years ago, now has 40 odd properties scattered across the UK and is connected with a cartel. He left work Nov 2007 to grow his empire. I asked if he was still expanding. "Only if there's a 20% discount on it. Can't get mortgages anyway, and tenants are falling behind with rent cos of inflation. Upshot is I'm having to get another full time job to make up the shortfalls."
Another article on the avalanching situation....
ThisIsMoney: Persimmon building freeze hits Footsie
Britain's largest housebuilder said the 'unprecedented tightening in the mortgage market' has savaged business in the past three weeks as banks and building societies rein in lending. Stop building overpriced boxes......OK! {As a diversion see this on youtube.... www.youtube.com/watch?v=zFSLUJ8SIbc&feature=related }
A warning from history: Or merely a blueprint for the future?
Wikipedia: Khmer Rouge
I have placed this link on HPC, in light of concerns of food shortages, the financial turmoil and the general apathy of our current political system. Although the Khmer Rouge was a fairly shortlived affair, and their doctrines extreme. I would argue that the same fate is being played on the UK poplation (less overtly), vis-a-vis debt, student debt, diminishing standards of living - QOL. Breakdown in society, etc, etc. "In power, the Khmer Rouge carried out a radical program that included isolating the country from foreign influence, closing schools, hospitals and factories, abolishing banking, finance and currency, outlawing all religions, confiscating all private property and relocating people from urban areas to collective farms where forced labor was widespread. The purpose of this"
Instead of Daily Mash How about Jeremy Clarkson
autotrader: Jeremy Clarkson's most embarrassing moments
Just a light hearted article to stop you worrying about the impending houseprice crash
Many a true word spoken in jest!
Daily Mash: System no longer works, confirms UN
"Meanwhile, the banks are borrowing money from taxpayers so that they can then lend the same money back to the taxpayers at a higer rate of interest than they borrowed it from them in the first place. Seriously, is it just me?" I am a taxpayer and a tenant. So that means I am paying extra tax to subsidise my landlady's mortgage. Thanks a lot, Nulabour.
Keep those rates up
Telegraph: Northern Rock's Ron Sandler is right not to pass on rate cut
"Doesn't the Chancellor understand we need to dissuade people from borrowing more? Has he missed the fact that the credit crisis was caused by there being too much debt?" Quite. Now all the banks have to do is keep savings rates up too.
Fuel Supply Fears As Oil Refinery Closes
Yahoo: Fuel Supply Fears As Oil Refinery Closes
The offshore oil industry body Oil and Gas UK warned that this could cost an estimated £50m a day in lost production - with the Treasury taking half that hit.
The question is a serious one because the U.S. Federal Reserve is pumping new dollars into the global economy at an astounding pace.
Tehran Times: A rising euro threatens American dominance
As the dollar continues its relentless six-year slide against the euro and other main currencies, the question is being asked more and more: what would it mean if the dollar ceded its global dominance to the euro? What about America’s political power in the world? A continuing fall in the dollar means a fall in the global purchasing power of all its foreign assistance, whether for humanitarian, economic or military purposes.
Property Snake gets a Mention!
Evening Standard: Website lists bargains as prices slither downwards
The standard talks about bargain hunters using propertysnake to monitor prices, but what's more significant I believe, is that 27-30% price drops seem to be quite frequent and are affecting all values of property across London - all within a few months. I therefore, think that price reductions over the next 12-18mths will be in the 50-60% range for real bargains.
Absolute must read
Kitco: Hyperinflationary Depression
This guy predicts Hyperinflationary Depression followed by a Great Depression. "It is too late to stop it. The political forces and the Unfunded Liabilities would prevent the powers-that-be from ending the money-printing process, and in fact, would grossly accelerate it. This would result in a hyper inflation (400 percent inflation or more), and the eventual total destruction of the dollar. Suddenly America would find its money totally useless. Store shelves would be empty, gas would go through the stratosphere, and Americans would suffer through the greatest threat since the Great Depression of the ’30s"
This has been happening for the last few years.
BBC: Court orders to secure loans rise
All those TV 'deals' which roll all your debts into a new 'cheaper' mortgage were not devised to lower your monthly payments per se. They were devised to transfer un-secured lending to secured lending so the risk shifts entirely onto the consumer monkeys. Needless to say they've been very popular as most sheeple are financially illiterate and simply stare wide-eyed at the monthly repayment figure. "There has been a sharp rise in the number of banks trying to secure loans and credit card debt against borrowers' properties, figures suggest. The number of lenders seeking court orders to secure personal debt against property hit 131,644 in 2007, representing a 42% rise year-on-year. "
Sales down 50%, mortgage approvals down 50%, anyone see a pattern developing?
Firstrung: NAEA admit depressingly low sales as house sales crash by 50% over Easter holiday period
Property sales decreased further in March with on average 7 sales reported per agent, down from 8 in February 2008. In comparison to the same time last year when 14 sales per agent were reported, this figure is depressingly low for the beginning of the Summer period and are similar to figures expected during the Easter period. The good news is that within the last few days there are some reports of an increase in activity which may be as a result of the Government and Bank of England's clear desire to find ways around the credit crunch.
Housebuilding cartel attempt to restrict supply
times online: Why build houses if the mortgages aren’t available?
Despite the Bank of England’s move to pump liquidity into the system last week, there is no sign of mortgage conditions easing. Even if things do improve, Mark Hake, at Merrill Lynch, doubts that it will bring much short-term respite. This is because there is growing evidence that potential buyers are postponing purchases in anticipation of further price falls. Housebuyers are also nervous about the possibility of losing their jobs John White, Persimmon’s chairman, went as far as to say that present conditions were possibly even worse than in the early 1990s.
But Gordon said there would be 3 million new homes
Times: Persimmon stops new site building as sales fall
Shares across the housing sector slumped yesterday after Persimmon revealed that it would stop building homes on new sites until mortgage conditions improved, while speculation grew that Barratt may be forced to raise capital through a rights issue. Persimmon, which is Britain's biggest housebuilder, said today that sales in the first four months of the year had fallen by 24 per cent.
Has the ONS finally been caught cooking the books
Times: High Street's boom figures under question
City economists have lined up alongside the British Retail Consortium, and senior retailers to attack figures from the Office for National Statistics that proclaim a consumer shopping bonanza has been underway since the new year. The ONS has insisted that “underlying growth in retail sales remains robust”. Note the words 'underlying' and 'robust', favourite Darling & Broon speak.
Thursday, April 24, 2008
It is madness to try to re-inflate a bursting bubble
London Evening Standard: Don't lead first-timers astray
When house prices start to fall in this country, they typically keep on falling for at least three years, though it feels much longer. This being the case, it is quite astonishing that the Prime Minister Gordon Brown and his Chancellor Alastair Darling both seem constantly to be urging banks to free up the mortgage market and start lending again to first-time buyers. Absolutely the last thing first-time buyers should be doing at the moment is rushing to buy - if they wait, their dream house can only get cheaper. Government should leave well alone. It is madness to try to re-inflate a bursting bubble.
American Express - "Don't leave home without it".
Bloomberg: American Express's Profit Falls 6% on Consumer Loan Defaults
April 24 (Bloomberg) -- American Express Co., the biggest U.S. credit-card lender, said first-quarter profit fell 6 percent as more borrowers failed to repay their debts. American Express, Capital One Financial Corp. and Discover Financial Services shares have dropped more than 25 percent in the past year. Analysts say the lenders underestimate how much rising U.S. unemployment will hurt consumers' ability to repay debts. Employers cut 80,000 workers from payrolls in March, the third straight monthly reduction and the biggest in five years.
The Biggest Rights Issue in Europe
THE SCOTSMAN: Shareholder to RBS bosses: 'You're paid as superhumans, but you're clearly not'
An audience brimming with indignation that belied their advancing years accused directors of "unbelievably bad management". Shareholder John Steen was more abrupt when he told the meeting he would like the board to reconsider its entire remuneration policy, saying they were paid salaries "above anything the rest of us can only dream of". He went on: "You guys are paid as though you were superhuman, and it's very clear that you're not." Twelve months after his confident performance, Sir Fred was more reluctant to take centre stage and it was halfway through the meeting before he spoke to the crowd. This lot are definitely in trouble
You may want to be aware of this
THE INDEPENDENT: BT customers hit by 'sneaky' 2,000 per cent price increase
BT has been accused of "sneakily" switching millions of customers to a new tariff where they will have to pay up to 2,000 per cent more for their calls. Nationwide, phone bills are expected to jump by at least £300m as a result of the rises in line rental and weekday calls, which came into force on 1 April. On 1 February, BT wrote to 10.8 million people on the BT Together 1 package telling them: "At BT, we're always looking for ways to give you value for money", and informing them they would, in future, receive free weekend calls on the Unlimited Weekend Plan. But the small print in a leaflet contained details of above-inflation price rises. Looks like they have a different view of inflation.
America's Money: In their own words
CNN: America's Money: In their own words
Across the nation, the deepening economic downturn is fueling anxiety among everyday folks. See what's got them worried and how they're coping.
Start listening at 2:46:50...
BBC 5 Live: Breakfast Show
...and listen to John Wrigglesworth; he wants a 200BILLION BAIL OUT !?!!??
Oh great......
Timesonline: Rationing of rice hits Britain’s Chinese and curry restaurants
Rice is being rationed in Britain as shopkeepers limit supplies to their customers to prevent hoarding. Restrictions on sales in Asian neighbourhoods are reported as emergency measures are taken by governments worldwide to combat the soaring cost of rice and prevent outbreaks of food rioting. Tilda, the biggest importer of basmati rice, said that its buyers had resorted to restricting their customers to two bags per person. “It is happening in the cash and carries,” said Jona-than Calland, of Tilda. “It’s to stop people from hoarding. I heard from our salesforce that one lady went into a cash and carry and tried to buy eight 20kg bags.” Related Links
Another stealth Tax
Chronicle and Echo: Developers face £20,000 tax for each property
Developers who want to build major housing projects in Northampton could soon be forced to pay a 'roof tax' of £20,000 per property. Just what we need, a tax on property. It would appear though that this is already in place in Milton Keynes !!! "The idea of a roof tax was first pioneered in nearby Milton Keynes where the level was set at £18,000 per property in 2005. It now stands at £18,500."
Why the housing crash will topple Gordon Brown
MoneyWeek: Why the housing crash will topple Gordon Brown
Gordon Brown knows his political survival depends on house prices not falling. It shows that if you hitch a ride on a bubble when it’s on the way up, you should be prepared for when it inevitably pops...
Relocation Relocation!
CNN online: You can't pay them enough to leave
YOUNGSTOWN, Ohio (CNNMoney.com) -- When the city of Youngstown, Ohio, proposed incentives to move people out of declining neighborhoods, it sounded like a good idea - in theory. Interesting article - could be read as 'economic cleansing' or 'concentration 'zones''......NWO!
USA - 'at the current sales rate, it would take 11 months to sell the supply of homes on the market at the end of March'.
CNN online: New home sales at 16-year low
The seasonally adjusted estimate of new houses for sale at the end of March was 468,000, which is down slightly from February's 471,000. However, at the current sales rate, it would take 11 months to sell the supply of homes on the market at the end of March. Given the large number of homes on the market, Anderson estimates that home sales are not likely to pick up for several more months .....I think he means several more years!
100 sexiest women
Sky news: Kirsty Allsop 'Location' Star Homes In On Sexiest List
TV presenter Kirsty Allsop has been named as one of the 100 most sexy women in the world. You know you would, doomsters!!
Starbucks model cannot survive house price crash?
BBC News: Starbucks hit by housing slowdown
The demand for expensive coffee has been hit by the US housing slowdown and economic downturn. How many other "business models" will be affected. Is there a link to Harvard MBAs?
Has the Credit Crunch hit Blair too?
News.com.au: Blair caught on train without ticket
FORMER British prime minister Tony Blair has been caught travelling on a train without a ticket or any cash to pay the fare.
"The Patchett family have finally given up on buy-to-let"... many more to follow!!
Telegraph: Landlords are feeling the pinch
"The couple rent out four one-bedroom maisonettes in the area. When remortgaging one property at the end of a two-year fixed-rate deal in January, the Patchetts saw the repayments on their £94,150 interest-only loan rise from £384 a month to £459 a month, compared to a monthly rent of £575. Suzanne, 44, a financial controller, said: "If we had stayed with the same lender we would have paid another £2,500 in fees, but mortgage broker L&C found us a 5.85 per cent deal with Bristol & West with no fees. "All four properties are now on five-year fixed rates because of the high bank and building society fees."Since the credit crunch the margins are too tight. It is not viable for us to invest in buy-to-let properties"
Potential for Japan-style recession
Citywire: Barclays chief raises spectre of Japan if banks become too scared
John Varley, Barclays group chief executive, warns rival banks and investors in the sector that they risk creating a Japan-style recession if they become too risk averse.Varley warns: 'The example of the Japanese economy between 1990 and 2000 illustrates what I'm talking about. The Japanese banks' sense of risk aversion overtook the financial system, and that led to a decade of economic stagnation, as the banks stopped lending
Oh dear, more woes for the Banks
BBC: Banks lose overdraft charges case
The UK's biggest banks have lost a test case about overdraft charges. A judge has decided that the Office of Fair Trading (OFT) can apply consumer contract regulations to decide if bank overdraft charges are fair or not. But Mr Justice Andrew Smith said the judgement did not necessarily mean the charges are unfair. Further hearings are expected which may delay the cases of thousands of claimants trying to reclaim their charges arguing they are too high.
UK in recession by 2009?
MoneyWeek: The UK will be in recession by next year
The economic imbalances in the UK are as severe as in the United States. Jeremy Batstone-Carr looks at the ongoing credit crisis, the mortgage market, employment and savings levels, and the problems in the public sector, and finds that the UK is rapidly heading for recession.
woevvy woevvy thexy
Yahoo: Presenter beats Moss in sexy poll
Her new calling post HPBoom now that Ch4 will give Allsop her HPC P45? Shows even all the chavs watch property porn these days and have dubious, quirky taste.
No mention of CPI here.
BBC: The end of cheap clothes is near
"And, yet again, the root cause of their problems can be found in America." Its all America's fault we won't let this affect our low inflation and rate cutting agenda.
China's booming economy could be running out of steam – literally.
new scientist: China down to 12 days of coal stocks
At the end of a cold and stormy winter, the country has just 12 days of coal reserves at most power stations. Some provinces, including Hebei, bordering Beijing, have less than a week's coal left. This is a record low, the state electricity regulatory commission revealed on Tuesday. It is often claimed that China builds a new coal-fired power plant once a week but the IEA figure suggests that it in fact builds two, assuming a typical plant size of one gigawatt. more here:- http://www.sott.net/articles/show/154448-China-down-to-12-days-of-coal-stocks
Sub-prime Litigation "Tsunami"
Reuters: US subprime lawsuits pick up steam in 2008--study
"The report said there were 170 subprime-related civil cases filed in federal courts in the first three months of 2008, which translates into almost two cases a day including weekends. In comparison, there were 278 subprime lawsuits brought in all of 2007 in federal courts."
Gold/silver bull not over
Safe Haven: Gold and Silver Chart Bonanza!
"First I would like to debunk some of the reasons given why the bull run in precious metals is over" 1) The Fed will be done cutting rates. 2) A recession means lower demand and consumption, which in turn pushes down inflation. 3) Precious Metals are in a bubble
Buy gold and silver as world economy implodes
The Telegraph: This bear growls on
"Far from being the shock absorber, Europe may prove to be the accelerator of this post-bubble denouement. Once you add Europe to the Anglo-Saxon and Japanese sick list, you reach 60pc of world GDP, and two thirds world demand. This leaves the global boom on tenuously narrow ground. Who is going to buy all those exports from China? Who is going to keep pushing commodity prices into the stratosphere? This bear growls on."
And another one bites the dust
BBC News: Credit Suisse loses billions
Credit Suisse has reported a loss for the first three months of the year, hit by its exposure to the credit markets. The bank made a net loss of 2.1bn Swiss francs ($2.1bn; £1.0bn) after writing down 5.3bn Swiss francs in mortgage securities and big buyout loans.
The myth of housing under-supply
Defaqto: The myth of housing under-supply
the UK, the idea that house prices go up in value seems to be so entwined into the British psyche that we sometimes don’t even question this reasoning. We make assumptions about how the house will rise in value, in the same kind of way we assume the sun will rise tomorrow. Capital Economics has released a report suggesting that actually many homes in the UK are under-occupied, and maybe, therefore, the argument that house prices are likely to be driven upwards over the long-term is contradicted by this finding.
This film is just 1.5mins long and a great intro
housepricecrash: CNBC: A transfer of wealth from the poor to the wealthy
shift change handover for those who missed the nightshift
Wow! Persimmon stops all new developments
Bloomberg: Persimmon Home Sales Drop 24%, Defers Site Openings
Persimmon Plc, the U.K.'s largest homebuilder by market value, said sales have dropped 24% so far this year and new development has been halted because of sliding demand. Revenue dropped to £1.37billion from £1.8billion pounds and volumes have declined 18%, the York-based company said today in a statement. "It is difficult to predict when the market will improve,'' the builder said in today's statement. ``Against the current backdrop, we have postponed the commencement of scheduled new sites until the mortgage market improves.'' Persimmon dropped the most in five years in London trading.
Are the sheeple finally getting the message?
ThisIsMoney: Crisis halves the housing market
The housing market has halved in a year, according to a series of reports. It emerged yesterday that house sales through estate agents are down 50% and the number of Britons taking out a mortgage has collapsed by 46%. The National Association of Estate Agents said its firms sold an average of seven homes in March, compared to 14 last year. One firm, from Essex, said: 'Agents in the county are using comments such as "dire", "apathy" and "miserable". 'There are now clear signs of redundancies and offices closing together with a strong feeling that this market is similar to 1989 (the last crash).' House prices are predicted to fall about 20% over the next two years.
Mortgage demand dropping. I'm shocked
Guardian: Mortgage demand at lowest level since Labour won power
"A breakdown of the BBA data showed that the end of the house price boom has prompted a 30% year-on-year fall in equity withdrawal"...Err so hold on, someone is still mewing? Hmm I wonder if they are using the "mewed" cash to pay for their increase in mortgage costs...
Will BoE please BTL and let inflation rip?
Telegraph: Bank of England's dilemma: A house price crash or soaring inflation
Which would you rather face: a recession and house price crash or years of soaring seventies-style inflation? Two options; one nasty dilemma for the Bank of England. In particularly stark and simple terms, this is the question tearing a major split through the Monetary Policy Committee, which decides interest rates. As one central banker said, inflation is like toothpaste - easy to squeeze out of the tube; almost impossible to shove back in again. Expect more food riots!
Wednesday, April 23, 2008
Eastern economies decoupling tosh
BBC: Satyam profit growth disappoints
All top IT Indian companies failed to meet forecast. These are very big companies with minimum of 50,000 employees and also registered in NYSE and a part of NASDAQ. All the tosh about decoupling of the US economy is a big tosh. Ask one question where does India and China sell to...US. And if US stops buying within few months Indians and Chinese will stop buying from us in Europe. And the circle continues.
California foreclosure "surge": Up 327% from '07 levels
Los Angeles Times: LA Land
The number of California homes lost to foreclosure in the first quarter surged 327% from year-ago levels -- reaching an average of more than 500 foreclosures per day -- DataQuick said in a report, warning that the widening foreclosure problem could "spread beyond the current categories of dicey mortgages, and into mainstream home loans."
Very short movie, introducing Ron Paul
CNBC: A transfer of wealth from the poor to the wealthy
Thanks Malct. I thought this relevant for the front page. I'll be posting a similar audiotape on Sat morning. This film is just 1.5mins long and a great intro to a great man who freely espouses the monetary principles I've been discussing recently.
The difference between the asking price and selling price increasing
FT: Property market suffers further falls in sales
Property sales remained sluggish in March, with both the number of agreed sales that fell through and the difference between the asking price and selling price increasing.According to the latest figures from the National Association of Estate Agents (NAEA), the number of property sales decreased further in March to reach an average of seven sales per agent, down from eight sales the month before. In comparison, 14 sales per agent were reported during March 2007.The percentage of sales agreed that fell through also increased between February and March, rising from 8.6 per cent to 10.3 per cent.
Poeple are scared about rising food prices
Guardian: Spectre of food rationing hits US
The spectre of food rationing arose in America today as retailers began imposing limits on rice and flour sales following bulk purchases by customers alarmed by rocketing global prices for staple foods. Wal-Mart's cash-and-carry division, Sam's Club, announced that it would only sell a maximum of four bags of rice per person to prevent supplies from running short. The owner of one restaurant in Oakland told a local television station that the price of a typical sack of rice had risen from $20 to $40 in a matter of weeks. Expect to see the army at Tesco's soon!
The financial turmoil coupled with the strong euro has convinced many families to pull money out of their property overseas
times: Credit crunch hits homes in the sun
The financial turmoil coupled with the strong euro has convinced many families to pull money out of their property overseas Homeowners are “repatriating” millions of pounds of equity from their second properties in Europe to take advantage of the strong euro, the government’s recent capital-gains tax (CGT) changes, and to protect themselves from the global credit crunch. The soaring euro is also making life difficult for prospective buyers. Foreign Currency Exchange, a broker, said 10 clients a day are backing out on overseas purchases, often because they are being forced to find a bigger deposit due to the weak pound. In the past eight months alone, a €200,000 property has become £27,690 more expensive, according to foreign-exchange firm HiFX.
Vince Cable talking mostly sense
Yorkshire Post: Vince Cable: The banks got themselves into this mess. Why should we bail them out?
Bank shareholders should do any bailing out. They took the profit in good times after all. Urging banks to share the costs of mortgages in trouble. "This responsibility should be enforced by a statutory obligation on both parties to submit to an independent financial assessment by an agency like the CAB and for lenders to offer a range of payment alternatives so as to keep families in their homes – involving share ownership and rental arrangements – with an equitable sharing of losses."
Closer to home....property develop jumps ship on redeveloping former Tesco site
Shropshire Star online: Developer pulls out of £7m deal
Hopes of building more than 100 homes on the site of a former supermarket in Shrewsbury have been dealt a blow after a second developer pulled out of a deal to buy the land. Morris Homes was due to buy the old Tesco site at Arlington Way in a deal worth nearly £7 million. Brief online story...also Persimon are developing a large site just north of Shrewsbury - after an initial flurry of activity last year - it's all looking a 'pretty vacant'. Just the tip of the iceberg!
Oil spike fuels airline fears
CNN: Oil spike fuels airline fears
Huge writedowns at Delta and Northwest, and liquidity worries at United, show the industry is in trouble yet again.
Interesting pie chart
Angry renter: Online petition
This is a rant site for US renters opposed to tax dollars bailing out home owners and lenders. The pie chart at the top is interesting, as it shows that 17.5% of mortgages are either in default or foreclosure - more than I expected at this stage.
RPI - 3.8%, CPI 2.5% Teacher pay rise 2.45%
timesonline: 8,000 schools could close in tomorrow's national teachers' strike
It is about time one of the Unions began to stand up for their members. It is shameful that the government have got away with delivering below inflation wage increases to the nurses and teachers to name but two. “Teachers’ pay has increased by 19 per cent in real terms since 1997............... But the NUT argues that with the retail price index running at 3.8 per cent, the 2.45 per cent settlement for next year represents a pay cut.” It is amazing that statistics about pay increases of 19% in 11 years is used as a stick to bash the NUT, but when you consider that HPI has been running at 180 - 270% it puts it into perspective. When will the media support the British People rather than protect the interests of an inept and deceitful government, headed by an unelected clown.
Guess it was a dumb idea to give them $1.5bn last month eh
FT: Ambac hit by $3bn subprime charges
Gee, I guess they ain't so AAA after all...... Ambac Financial, the world’s second-largest bond insurer, on Wednesday posted a wider than expected first-quarter net loss, hurt by $3.1bn in charges related to subprime-related securities. The first quarter net loss of $1.7bn, or $11.69 a share, compared with a net income of $213m, or $2.04 a share, in the same period a year ago. Analysts polled by Thomson Financial forecast a loss of $1.51 a share in the first quarter.
GE's Immelt: Housing Great Depression
CNN: GE's Immelt: Housing Great Depression
General Electric CEO Jeff Immelt says the housing crisis is the worst since 1930s' economic depression.
More financial alchemy? This has to stop - the same mistakes are being made again!
Bloomberg: Morgan Stanley Raises $2.5 Billion for Real Estate
Morgan Stanley, like Blackstone Group LP and Lone Star Funds, is raising money to take advantage of a drop in asset prices following the collapse of the U.S. subprime mortgage market. MS plans to invest $30 million to $100 million of equity per investment, mainly in commercial property assets including offices, hotels, stores and industrial buildings. ``There's a dearth of investors for that part of the capital structure in the U.S., so you can achieve returns you haven't been able to achieve for a decade in the U.S. in mortgage debt,'' he said. ``We've looked at buying from people that have originated the debt and own it,'' said Carrafiell. ``We've also been approached by banks to team up with them to provide that slice of a new mortgage they're about to write"
Americans getting off their butts?
CNN: Backlash grows against the housing bailout
The website Angryrenter.com, launched just last week, has a vitiation demanding that Congress not pass any bailout programs that reward risky borrowing and lending. To wit: "Let the free market sort it out!"
Poor little rich guy
Press Association: Guy Ritchie laments property market
English natives are being priced out of the property market by new money being invested from abroad, film maker Guy Ritchie has warned. Ritchie, married to American singer Madonna, said it was almost impossible to buy a house in central London without £10 million. He has been making a film inspired by the way the capital has changed due to "new money" coming into the UK. "There hasn't been a property correction here for 20 years," he told Empire film magazine. "House prices don't go down, they just go up. And the natives of England are sort of being left behind "
CPI is of course the best measure ..............
BBC: Family food shop up '£15 a week'
The highest food costs since 1945 have added £15 to a weekly supermarket shop for a family of four in the UK, new research suggests. Comparison website MySupermarket.co.uk says a basket of 24 staple items including tea bags, milk and eggs costs 15% more than it did 12 months ago. The findings are based on its price comparisons of certain everyday items at Tesco, Sainsbury's and Asda. A white loaf was up more than 20% at 65 pence at Tesco and Sainsbury's.
Don't leave your house unattended for too long!
RIA Novosti: Police is Southern Russia say 'house stealing' is normal practice
A villager in south Russia's Astrakhan Region has been detained on suspicion of stealing his neighbor's house, which is common practice in remote areas, a local police spokesman said Monday. The spokesman said the hapless house owner, who had been away for four months, reported the theft to police after he returned home to find his house gone and just the foundations remaining.
Mortgage lending enters prehistoric territory
Firstrung: Mortgage approvals across all sectors begin to crash due to evaporation of credit
Gross lending weakened again in March and is expected to continue to weaken as approvals for all forms of mortgage lending have declined further.Net mortgage lending was lower in March reflecting weaker gross lending The annual growth rate has stabilised around 13% in recent months. All forms of mortgage approvals weakened in March and at 129,300 were at their lowest since September 2000. Approvals for house purchase were the lowest since the series began in September 1997. Approvals for remortgaging, though weaker than recently, represented close to 50% of total approvals.
Speculation is mounting that ...................
Guardian: Will Barclays and HBOS have to tap up investors next?
Speculation is mounting that Barclays and HBOS will need to follow Royal Bank of Scotland in tapping shareholders for cash amid pressure from regulators on banks to plug an estimated £37bn hole in their capital cushions. Barclays and HBOS are expected to tell the City within days whether they need to bolster their financial position and increase their write-downs for losses in toxic investments following the record-breaking £12bn rights issue from RBS.
Roof caves in on housebuilders as London banks suffer
Financial Times: Roof caves in on housebuilders as London banks suffer
Barratt's shares down 7% so far this morning... Haven't checked other housebuilders but presumably they are taking a caning as well.
Dig up!
BBC News: Brown Defend U-turn on 10p Tax
In what will be seen as a U-turn forced by Labour rebels, the chancellor said he would assess the loss to pensioners aged 60-64 and childless people. The compensation deal will be unveiled in the autumn and backdated to April.
Yet another one bites the dust
Mortgagesolutions: Elephant places subsidiary into liquidation
Elephant Loans & Mortgages Plc has placed one of its operating subsidiaries, Elephant Loans Ltd., into liquidation as part of an ongoing restructure. The firm will now conduct its trading activities through another subsidiary, Elephant Loans (Direct) Ltd.
Here we go
City Wire: House prices could crash more than 30% - top fund manager
M&G Investments’ bond fund manager Richard Woolnough has warned a crash in the UK housing market has the potential to be one of the worst in history.........................Cmon dont mince your words......
No silver bullet for the liquidity crisis
Citywire: Mortgage lending sinks 46% in 12 months, BBA says
Mortgage lending sank further into the doldrums with mortgage approvals to buy houses falling by 18% in March, according to the British Bankers Association. The figures from high street lenders show a 46.2% slump in approvals for house purchase mortgages from March 2007. Approvals to buy house fell to 35,417 in March form 43,147 in February, a dramatic decline from 65,841 in March last year. Even remortgages have been hit with a 13.6% fall in approvals in March to 60,503 from 69,997 in February.
Gold not so overbought now
Safe Haven: Encouraging Action for Gold Bulls
"Now, this correction could go on awhile longer and I don't consider a downside target between $800-$850 to be out of the question, but we may only end up seeing a time (sideways) correction in gold much without much more downside in terms of price."
House purchase loans approved -43.7% compared with a year earlier!
British Bankers' Association: March figures for the main high street banks
March’s net mortgage lending weakened and all forms of mortgage approvals declined. Credit card lending increased slightly as other unsecured lending weakened. Personal deposits grew more strongly than in recent months. Lending to financial companies continued around trend. All forms of mortgage approvals weakened in March and at 129,300 were at their lowest since September 2000. Approvals for house purchase were the lowest since the series began in September 1997.
More destruction please - WE ARE not ready for CHANGE yet
Market Oracle: US Fed Takes Money From Main Street to Give to Wall Street
In essence, Federal Reserve has reallocated money from Main Street to Wall Street. This massive shift of funds to Wall Street aways from producing sectors of U.S. economy has some strong implications. U.S. recession will be deeper and longer. Rather than allowing system to purge itself of weak financial institutions, Federal Reserve is providing them with special funding. Money has been shifted from goods and services producing sectors to non productive financial entities.
Approvals 46% down on March
BBC: Slump in bank mortgage approvals
If this carries on you will be able to count them on one hand.
Mortgage approvals slump
daily mail: Mortgage approvals slump to lowest level since records began as banks warn loans could get even more expensive
"The number of approvals has fallen by 46 per cent in 12 months with just 35,417 passed for house purchase in March, according to the British Bankers' Association (BBA). "
Why a global recession is a possibility
MoneyWeek: Why a global recession is a possibility
"...there is enormous connectivity between all the world’s economies... it would be wrong to assume that the present financial crisis, whose epicentre is the United States, couldn’t be followed by financial and economic crises elsewhere."
MPC minutes show disunity
BBC News: Bank split on move to cut rates
Six wanted a cut of 0.25%, two wanted no cut and Danny boy wanted 0.5% Has there ever been a three way split before?
NR MkIII
Share prices (BBC): Market data - Alliance and Leicester
It's not just B & B who are in trouble...
Modern-day Rachmans watch out New Liebor is out to get you (and not before time)
ePolitics: MPs to debate rental market
"Clear evidence of families with children - in particular single women with children - who have to move just about every six months" ... "people complain about the housing repairs and the next thing they find that their tenancy isn't renewed". Grasping BTL landlords watch out, the labour Left (god bless them) is resurgent as Broon's grip weakens and they are about to make it a lot harder to push your weight around. (That's on top of the tax bill that will shortly arrive).
The British real estate market is on life support
information clearing house: Enough With The Cuts, Already
Rising Libor puts the Fed and the Bank of England in a tough spot. The $100 billion liquidity-injection is the biggest bailout in the BOE's history, and it was granted without public input or Parliamentary authorization, just like the Bear Sterns transaction. The bankers call the shots while the public picks up the tab. The BOE's action puts to rest the idea that “the worst is behind us”. It isn't; in fact, recent estimates suggest that the losses to the banking system could exceed $1 trillion. There's still a lot of carnage ahead.
Try 50 trillion next time.....
Times Online: Mortgage lenders warn that higher rates here to stay
''...Mortgage rates will continue to rise and may not return to the low rates seen last year, despite the banking sector bailout announced this week, lenders told the Chancellor yesterday....''
Banks £50bn rescue plan will allow BoE to keep interest rates higher!
Telegraph: Bank of England hawk sees inflation risk if interest rates cut
Hopes that the Bank of England will slash interest rates have been undermined after a key policymaker hinted that the Bank's rescue plan for credit markets will free it up to use rates to fight inflation.
German bank sues UBS for dumped 'toxic' loans
Telegraph: UBS 'dumped its loans on us' - client
UBS bankers dumped half a billion dollars of "toxic" sub-prime mortgage securities on a client to boost revenues and secure their "extraordinary bonus payments" with no regard for the consequences, a letter of claim seen by The Daily Telegraph alleges. German regional bank HSH Nordbank is suing the troubled Swiss giant, claiming that it lost at least $275m (£138m) in a scheme devised by UBS bankers "to enhance [their own] results".
The ANZ Bank has dramatically widened its provision for bad debts as a major investment bank has warned of “cracks appearing” in the Australian economy.
peter martin: Cracks" in the Australian economy
"Cracks" in the Australian economy “I can hear it slowing”.
Current LIBOR rates are underpricing default risk
The Market Oracle: LIBOR Interbank Market Stays Frozen Despite Bank of England £50 Billion Bailout
Whatever spin the government puts on the conditions attached to the swaps, the fact is that bad debt that cannot be priced by the market IS being put up as collateral against as good as cash bonds. Therefore the banks can literally walk away from the bad debts, leaving them on the governments balance sheet.
Flawed UK Bank Model MKII?
Guardian: B&B says more customers struggling to pay mortgages
Bradford & Bingley admitted this morning that more of its customers are struggling to pay their mortgages as the economic slowdown bites but claimed that the buy-to-let market is still buoyant.
Friends, Romans and country men WooooHoooo
Sky News: Housing Fears Continue After Crunch Talks
Mortgage lenders say rates for new borrowers are unlikely to come down - despite the £50bn intervention by the Bank of England................
This is nuts
The Daily Express: RBS SENDS LONDON MARKET INTO THE RED
The London market slipped into the red today as Royal Bank of Scotland’s £12 billion rights issue triggered a tough session for bank shares. The funding move from the UK’s second biggest bank - at a higher discount than expected by markets - sent RBS shares nearly 4 per cent lower, dragging down its peers................................................WooooooooHooooooooo
Tuesday, April 22, 2008
Even less money to waste on Mortgages
Times: Era of cheap food ends as prices surge
Families have been warned that the prices of basic foods will rise steeply again because of further acute shortages in the commodity markets.
Grovel Grovel
The Telegraph: Bradford & Bingley apologises to shareholders
Bradford & Bingley chairman Rod Kent has issued a candid apology to shareholders for the bank’s “misjudgment” in buying into the complex investment instruments at the centre of the credit crunch.............................Woooohoooooo
The price of gasoline is consistent with current inflation
Ludwig Von Mises Institute: Economics 101: The Price of Gas
Adjusted for inflation and tax, gasoline prices should actually be higher than they are today. "First, we need to take into account inflation. The result of the Federal Reserve printing too much money is a loss of purchasing power of the dollar: something that cost $1.00 in 1950 would cost about $8.78 today. As for gas prices, in 1950 the price of gas was approximately 30 cents per gallon. Adjusted for inflation, a gallon of gas today should cost right at $2.64, assuming taxes are the same." But taxes have risen considerably, meaning that, adjusted for inflation (inflated money supply) gas is cheaper now than it was in the 1950's.
This is Significant
Cheltenham & Gloucester: Buy-to-Let policy changes from C&G
IGNORE THE LINK. See the first post
“Mumbai, Dubai, Shanghai - or goodbye”
Times: Market downturn forces executives to quit London and New York
Rich bankers are leaving the City... how can house prices possibly stay flat?
Just above assetzz sh*te
findaproperty: House Prices To Drop 20 Per Cent?
"Capital Economics also take issue with those citing strong economic fundamentals as supporting house prices." ......sound economic BS, from GB and AD, don't you just love anagrams???
What an *rze
findaproperty: The Only Way Is Up?
"Out of the 150 economists, estate agents and property experts predicting a gathering storm his was the lone voice decreeing brightness on the horizon." ...............need I say more???
Maybe there is something in 2012 after all...
NewsMonster: Britains's Biggest Banks use astrology to play the markets
“At the moment,” he says. “Mars in Cancer is in opposition to Pluto in Capricorn. This indicates a polarisation of opposing sentiments – turmoil, in other words. This cycle ends around 6th April.” “Sentiment will then recover and will turn down in early August. That phase will last for 4-5 weeks. There will be another shake in October. “We have an interesting four years ahead of us.”
U.K. Home Prices Drop
Bloomberg: U.K. Rightmove Home Prices Drop on Dearth of Credit (Update2)
Some choices cuts, for the bears amongst us! A lack of home loans is likely to push house prices down further, Bank of England Chief Economist(WELL WELL BLOW ME DOWN) Annual house-price inflation in the U.K. slowed to 1.3 percent, the lowest since July 2005(SO FAR)! RICS said last week that price declines are the most widespread since their survey started in 1978.(BUT IT IS NOT CHRISTMAS YET) In the northwest of England, prices dropped 1.4 percent. The next-biggest decline was in London, where all but five of 32 districts fell in April(BUT I THOUGHT LONDON WAS TOO GOOD FOR SUCH INFERIOR THINGS AS HP DEFLATION). It's pretty bad out there said one EA(GOOD I HOPE IT GETS A LOT WORSE!!!) Credit costs have surged in Britain since money markets froze up last year(TWO WORDS-GREEDY BA#ST~RDS)!!!
Cost of Living Starts to Hit
M&G investments: Households behind on energy payments
Almost seven million households are in debt to their energy suppliers, new research suggests. Just over a quarter of customers (26%), or 6.8 million, owe an average of £114 to their supplier, a survey for price comparison service uSwitch.com found. Figures from regulator Ofgem show two million customers are in debt repayment programmes to energy companies, while Citizens Advice has reported that energy debt cases have risen by a third. Just a bit of news to round off the day.
Let the govt take over your mortgage
BBC: 'Sale and rent' aid plan on homes
People in Wales struggling to pay their mortgages will be given official help to stay in their homes by the Welsh Assembly Government. It will enable housing authorities to buy properties and rent them back to the previous owner for a "reasonable" sum. Until now, only private companies could run "sale and rent back" schemes
could this lower property prices and rents???
guardian: Poland tries to lure back UK emigrants
The Polish government is planning a massive advertising campaign in the UK media calling for emigrant Poles to return to their homeland. Polish government officials are planning the UK media ad campaign as they bid to lure back the estimated 1 million Poles who have left for the UK since the country joined the EU in 2004, according to today's edition of Polish daily newspaper Polska
This looks like taxpayer bailout!
BBC: Homeowners to get 'mortgage help'
Homeowners will have enough support to ensure that their homes are not repossessed, the government says. The comments came after key mortgage industry figures met Chancellor Alistair Darling and Housing Minister Caroline Flint at 11 Downing Street.
High oil prices don't cause long term inflation!
BoE: INFLATION AND THE GLOBAL ECONOMY
The adobe document is a speech by Timothy Besley of the MPC to the Canadians. It's a bit beyond me. I got bored at the point where they said high oil prices don't cause long term inflation! There are some other good points such as how they expect inflation to come down as the effect of increasing energy costs sort of vanish from CPI!. Anybody else want to read this and put up a sensible comment?
What What What
BBC: Homeowners to get 'mortgage help'
Chancellor Alistair Darling he's brilliant aint he.....
Mr Blanchflower, do you hear me???
Yahoo France: BCE could increase interest rates if necessary
The Banque de France Governor declared that the BCE could adjust rates to make sure that inflation gets below 2% in 2009. Luxemburg declared that the central bankers should ask themselves each month if an increase in rates could be justified. "Nobody in BCE is talking anymore about a decrease in interest rates" said an anonymous source in the BCE". Look down the drain! What is it??? A £20 note... The era of cheap stuff comming from abroad might be over for some times here... Sad. Haven't heard Blanchflower crying for rates cuts for a few days... I start to feel concerned about his health. Anybody heard from him? At least that will help to bring back the theory of foreigners buying properties in the UK to justify the supposed gap between demand and supply.
A state of panic has taken over the oil markets, analysts say
BBC: Oil hits $118 for the first time
Oil prices have touched fresh highs as traders bet that violence in key producing nations would hurt supply. US light, sweet crude rose 57 cents to cross $118 a barrel, before dropping back to $117.77, while Brent crude peaked at $115 a barrel. The rises were supported by fears of further attacks on pipelines in Nigeria and oil cartel Opec's refusal to raise quotas to curb rising prices. Comments that it will raise production in 2012 failed to dampen sentiment.
The bond markets seem to be pricing fixed income investments as if the economy were facing Armageddon
fundstrategy: Judgement day
The economy is facing Armageddon. This is what the prices of corporate bonds are telling investors. The spreads on investment grade bonds are pricing in default rates that are four times as high as the previous peak since 1970. This should not be surprising. The corporate bond market has been battered by the credit crunch over the past 10 months. Liquidity has dried up and forced sellers have driven spreads wider.
UK economy and Sterling to come under more pressure
fundstrategy: Managers display deep pessimism over British economy
Global fund managers are taking an aggressively underweight position in British equities, according to the latest monthly survey from Merrill Lynch. It is not clear to what extent the extreme pessimism on the British outlook is motivated by concerns over economic growth and to what extent worries about sterling are responsible.Managers seem to have an extreme dislike of sterling. It has already fallen more than 13% against the euro over the past six months - comparable to the drop against the Deutschmark when Britain was forced out of the Exchange Rate Mechanism in 1992. It has also fallen 17% against the yen over the same period. Despite these falls, a net 52% of managers still say that sterling is overvalued.
Copper prices going up?
reuters: UPDATE 2-Chile Codelco losing $10 mln a day due copper strike
more inflation, this time it will affect cables, ipods, washing machines and other items that use copper in the manufacture....... expect these to be taken out of cpi next...lol
Many problems with mortgage bailouts
CNN: Many problems with mortgage bailouts
There are calls for the government to help homeowners at risk of foreclosure. But some experts think a mortgage rescue could cause more problems than it solves. Robert Shiller, a Yale economist who has long argued there was a bubble in home prices, thinks the plan will do little to stop the slide in housing prices. The runup earlier this decade, fed by low interest rates from the Federal Reserve and lax underwriting standards by lenders, created a bubble that hasn't yet completely deflated.
US open: Markets assaulted by bad news
Yahoo: US open: Markets assaulted by bad news
The day had got off to a dreary start with news that Carlyle Capital, a fund run by private-equity firm Carlyle Group, was on the point of complete collapse after it defaulted on about $16.6bn in loans. It (Frankfurt: A0MLX5 - news) sparked fears that CCC's creditors might dump their holding onto the market, weakening it even further.
Summer of Strikes starting Thursday
BBC: Week of strikes
Three strikes in a week as refuse workers, teachers and oil refinery staff all plan to walk out.
Market snapshot
Times Online: UK mortgage market by numbers
50,000 repos expected this year ... 3m people to remortgage this year ... 30-50% rise in monthly remortgage payments this year ... 721 mortgages withdrawn in last 2 weeks ... 6.04% average best buy 2 year fix
European lenders fear UK, Ireland and France will be worst hit by property devaluation
Property Week: Europe’s banks 'most cautious' on property in UK, Ireland and France
European banks are 'most cautious' about lending in property markets in the UK, Ireland and France. Saying they could be hit more than other European countriesby a fall in property prices.
Can Ben Bernanke stop the credit crunch?
MoneyWeek: Can Ben Bernanke stop the credit crunch?
Lesson for the BoE? As long as Ben Bernanke tries to follow Milton Friedman's ideas on injecting liquidity, he risks destroying not only his own reputation, but the economy as well...
Short back and sides, Sir?
Guardian: King's saved the banks but will he save homebuyers?
Banks will rebuild their profits. They say mortgage costs set to remain high for some time.
Shakira and PM in harmony
MSN: We are saved - Thank You GB
I know this is off topic but made me laugh. Well ..says it all really. Last one out of Britain turn the light out! What about a song ' these lips don't lie'! Of course Brown when he was given power said no more SPIN ... Then Shakira was asked if she feared she was being "used" by politicians like Mr Brown to boost his popularity, and she leapt to his defence. "Absolutely not," she said. "I think he is a man with wonderful intentions and who is also very pro-active and who has been working very hard for this issue of education
Bank of England’s clever swap shop
Financial Times: Bank of England’s clever swap shop
There's a lot of misinformed nonsense being talked in the press about the SLS. A lot of it is being regurgitated on here by people all too keen to jump on the Bank. This FT editorial is a good summary of what it actually does... clue... it's not what Alistair Darling would like it to be.
They're doomed...
BBC News: Arrears up at Bradford & Bingley
"More than half of the bank's home loans have been made to buy-to-let landlords. " Say no more..
Very True..........................
The Times and The Sunday Times: £50bn bailout: blame the Government
It's governments, not careless bankers, who got us into this mess. Those who caused our problems owe it to us to try to get us out.
Ooh boy!
Reuters: Florida luxury home market shows signs of wear
The surprisingly healthy market for oceanfront mansions and palatial condos in Florida, one of the most toxic states in America's housing meltdown, may finally be showing some cracks. While many luxury properties are selling briskly thanks to Europeans and Canadians pouring their strong currencies into Florida, billionaire Donald Trump recently dropped the price on a Palm Beach mansion by 20 percent, and some market watchers say the U.S. housing woes have finally touched the wealthy.
Do Not Hit Link But Look At This!
BANK OF ENGLAND: I sent a complaint yesterday - and got a reply!!!
See first comment for reply!
Bradford & Bingley in the doo-doo (part 2)
Citywire: Virgin bid speculation steadies Bradford & Bingley
The market is rife with rumours that Sir Richard Branson's Virgin Group is preparing a bid for Bradford & Bingley (B&B). The rumours enabled the bank to trade flat in a market where most bank shares were falling fast in the wake of Royal Bank of Scotland's rights issue. The rumours come as the bank announces that margins are under pressure as a result of the credit crisis, as well as revealing further losses in its structured finance portfolio. It did however demonstrate that it has grown its deposit base throughout the problems.
Why £50bn isn’t enough to make banks cut mortgage rates
MoneyWeek: Why £50bn isn’t enough to make banks cut mortgage rates
Despite the £50bn injection, banks are not there to help prop up the housing market. It doesn’t matter how much money the government tries to force through the system - mortgage rates won't be coming down anytime soon.
Abandon Ship
U.K Independent: Chancellor will urge lenders to pass rate cuts to borrowers
Lots of make believe money available.
Debts hitting hard as so many pay for excesses of past years
Firstrung: Wannabe middle class aspirants living on working class wages
We're all middle class now... or so we thought. How many Brits who classify themselves as middle class are actually working class by financial standing..? 15 million wannabe middle class Brits are in denial of their true working class status, and instead are turning to debt to finance their lifestyles. In their attempt to keep up with the 'upper middle class', middle class wannabes are supplementing their income with a combination of secured and unsecured loans totalling nearly £35 billion.
Buy to let mortgage lending officially died yesterday
Firstrung: Buy to let mortgage lending officially dead as Abbey calls time on industry
Abbey has finally withdrawn from the buy-to-let market in order to focus only on residential business. The lender says it is part of a re-organisation in order to keep rates in line with market moves...A release from the lender says the current residential range will be withdrawn at 10pm on April 21. Full applications must be submitted by this time in order to secure a booking on the product.
The £50bn+ is to avoid depression, not to save housing
Bloomberg: BOE Has 'Slim' Chance of Helping Loans, Goodhart Says
Bank of England Governor Mervyn King's offer to swap bonds for mortgage securities won't fulfill the government's promise to help homebuyers, former policy maker Charles Goodhart said. ``The likelihood of getting the mortgage market going again is slim,'' said Goodhart, a founding member of the Monetary Policy Committee and now a professor at the London School of Economics, in a telephone interview yesterday. ``This just prevents things from getting worse. It's a backstop.''
Bradford & Bingley in the doo-doo
FT Alphaville: Bad news, BTL demand remains strong
B&B is the market leader in Buy-to-Let mortgages which offer customers 100-1000% gearing into a declining asset class where none of the risks of leverage have been explained. BTL also offers investors a huge negative carry trade with average net property yields in the UK being 3.75% and mortgage finance now coming at almost double that. Self Certified mortgages (liar loans as the Americans appropriately call them) where B&B takes no income verification at all are at best going to see the income of the borrower be at its weakest when the collateral value is at its weakest as overtime and bonuses diminish with a weakening economy.
So, there'll be no need for new capital for Barclays then...
IHT: Jan 23 2008: Barclays says no real change in exposures
Barclays said on Wednesday that if problems linked to its exposure to the credit market crisis had materially changed since an update two months ago, it would have announced them. Barclays made a 1.3 billion pound writedown for losses on securities linked to the U.S. subprime housing crisis on November 15 and outlined its remaining exposures in the collateralised debt obligations market and other areas. "If there was anything materially different from then we'd have to make a report," Bob Diamond, president of Barclays and head of its investment bank arm, told CNBC television.
Are the home builders going bust?
Share prices (BBC): Market data
Check out some of the share prices for the big home builders - Persimmon, Taylor Wimpey, Barratt etc. Mostly these guys share prices are down by around two thirds over the last year, yet the median view taken by the City for house prices is still for no more than a modest fall. Can these guys weather a house price fall of more than 20%? I have my doubts..
Gilts market may be hit by bank bail-out - Ya think?!
Telegraph: Goldman Sachs warns on gilt market after BoE's bail-out
Goldman Sachs has advised clients to take out "short" positions on British 30-year Gilts before a rash of new issues by the Government floods the bond market. The closely watched US investment bank said it was concerned about the "heavy supply of longer-dated paper" likely to weigh on the price of British sovereign debt. The bank has closed its "short" positions on the pound after raking in bumper profits on the precipitous slide in sterling since the Northern Rock debacle. Yields on the benchmark 10-year Gilt surged from 4.43pc to 4.71pc last week, one of the sharpest moves in recent years. They are now 67 basis points above German Bunds, and 88 basis points above US Treasuries.
Shareholder bail out now required to complimemt BOE bailouts
Times: Mervyn King: RBS 'will be first of many banks to make cash call'
More British banks are poised to tap shareholders for billions of pounds in emergency capital, Mervyn King, the Governor of the Bank of England, revealed yesterday. As Royal Bank of Scotland put the finishing touches to a £12 billion rights issue, expected to be announced today, Mr King hinted strongly that RBS would be the first of many. “I’m pleased that banks have recognised the need to raise capital. I expect we will see more of it in the coming weeks,” he said as he announced details of the Bank’s plan to loosen the paralysed money markets with a £50 billion injection of fresh liquidity.
RBS unveils the largest rights issue in Europe.
FT: RBS unveils record £12bn rights issue
RBS today unveiled emergency plans to repair the damage the credit crisis has wrought on its balance sheet by raising £12bn from shareholders and £4bn by selling assets, including its insurance arm.Unveiling the largest rights issue in Europe, RBS said it had ditched its strategy of operating a more thinly capitalised balance sheet than rivals.
CAB and Shelter may talk the talk but they won’t offer you a home when you are repossessed and evicted
stop repossessions: Does Alistair Darling Want You To Be Repossessed?
Maybe the Government, along with the usual middle class do gooders at the Citizens Advice Bureau (CAB) and Shelter actually want you to be repossessed and lose your home? Surely, that can’t be right?
Paul (who is still in the GOP race) is the only pro-freedom, anti-war, anti-corporatist, anti-income tax, anti-Federal Reserve candidate in the race
321GOLD: Why the Public Can't Think Straight
I am sometimes asked if I see a turnaround in the near future; have the stock and housing markets hit bottom yet, have the many financial crises shown signs of easing, will prices for oil and food and metals and other commodities soon return to the drastically more affordable levels they were at only recently. My answer is "not likely." Furthermore, the trend of government interference to "help" with such problems is reliably making them worse and creating new problems,
Loving the bubble......
BBC News: Bank move has an immediate effect - 0.1% from Abbey
''...The Bank of England's plan to ease the credit squeeze has had an immediate impact with one of the UK's largest lenders cutting rates on some deals. ...''
Going begging again
BBC: Lenders to discuss mortgage woes
Chancellor Alistair Darling and Housing Minister Caroline Flint are to meet mortgage lenders later today to urge them to do more to help struggling borrowers. Mr Darling will ask the industry to find ways to prevent those in trouble from having their homes repossessed. It follows his backing of a £50bn Bank of England plan to allow banks to swap mortgage debts for government bonds.
House Price Inflation shrunk my Pay Packet
BBC: Four in ten staff 'may quit job'
Surprise surprise, 25% increase in pay coupled with a 200% increase in house prices over the last few years and hey presto ... a demotivated workforce. "More than four in ten UK employees are considering quitting their job in the next year, YouGov research for Investors in People suggests. A lack of motivation at work is cited as a major problem, with unreasonable workloads, feeling underpaid and a lack of career path being blamed. "
"It is pretty small beer," said Simon Rubinsohn, chief economist for the Royal Institution of Chartered Surveyors.
BBC: Darling backs £50bn bank bailout
Bail-out? The BBC's business editor Robert Peston said the primary purpose of the scheme was to prevent another Northern Rock, not to try and bring down mortgage rates. "Or to put it another way, taxpayer support is being provided to minimise the risk of huge future losses for taxpayers from another banking collapse."
Bailout means banks will not come clean
independent: Vincent Cable: Don't be fooled... the banks aren't victims of bad luck
The Government's deference and indulgence to the banks is extraordinary. ... bank executives fear asking their shareholders for money – rights issues – since they risk being sacked. It is easier to rattle a begging bowl in Whitehall and ask the Government for the money. They have. If there is to be any departure from the traditional terms on which the Bank of England lends to the banks there must also be tough, binding, explicit conditions not vague assurances.
How Surprising
Daily Telegraph: Mortgage costs unlikely to come down despite Bank of England's £50 billion bail-out
Mortgage costs are highly unlikely to fall despite an unprecedented £50 billion emergency bail-out for Britain's banks and building societies, homeowners have been warned. This will be exacerbated by GB/AD asking the lenders to be soft on those who fall behind. This will cost the lenders and that extra cost will need to be soaked up from everyone else.
surprise surprise
the express: LONDON MARKET SLIPS INTO NEGATIVE TERRITORY
surprising outcome then...not!
Police looking for 15% pay rise!
BBC News: Original News Article
Of all the cheek! Someone needs to let them know that inflation is only running at around 15% The public servants need to be setting an example, eh Gordo!
not the last , i am sure
the guardian: Abbey raises rates after Bank's £50bn bail-out
abbey raises it rate...bailout?
Financial strain increasing......
BBC News: Olympic cost plans 'unrealistic'
''....The government was "entirely unrealistic" in estimating the cost of hosting the 2012 Olympics, a group of MPs have said. At the time of the bid, costs were estimated at just over £4bn, but last year the budget was put at £9.325bn.....''
Inflation and the spectre of negative seigniorage
Ludwig Von Mises Institute: Two Cents on the Penny (That Are Now Worth Almost Four)
The cost of producing a penny is now 1.7 cents — it costs nearly two pennies to make one.
Why is the price of zinc going up? Has there been some dramatic shift in the mining industry or a sudden catastrophe? No, because in comparison to many other of the world's currencies and commodities, the price of zinc has not risen. Instead, it is the falling value of dollars themselves that is causing the price to go up. The greater the supply of a good, the less value each individual unit of that good will have. This is known as the law of marginal utility. Applying this law to money leads to the conclusion that when the mint prints more dollars, the value of existing dollars will decrease, and thus it will take more dollars to purchase metals.
Monday, April 21, 2008
The penny drops (like the pound)
The Mail: House prices: Why look at asking prices?
The latest figures from the UK's largest property listing website Rightmove show asking prices fell in April - typically a month when property surges. Falling prices: A study ahs shown asking prices falling - but does this reflect the real market?
Slippery slope
Reuters: Sterling slides, mortgage plan fails to impress
Sterling fell 1.5 percent against the euro on Monday as soft UK house price data reinforced jitters about the health of the economy and a Bank of England plan to ease credit market strain failed to impress. Annual house price inflation in England and Wales slowed to its weakest level since mid-2005 this month as a survey from property website Rightmove showed.
great blog
theRatandMouse: various HPC articles.....
Nice topics....but how long before it is getting the blame for negative sentiment from Krusty....the same as HPC?
Slightly old article - but worth a second read....
Telegraph online: Can we blame it all on Kirstie Allsopp?
......Why not....Rent it out.....Do it up and sell it for a profit. What could possibly go wrong? I wonder what else Ms Moir can see in her crystal ball....?
The truth behind the trade off?
The Times Online: Mervyn King predicts more banks will raise capital
Mervyn King, the Governor of the Bank of England, said today that more UK banks would follow Royal Bank of Scotland (RBS) in raising fresh equity as he unveiled details of his plan to inject £50 billion of liquidity into the paralysed banking system. Mr King hailed the new bonds-for-mortgages scheme as the best way of improving liquidity in the banking system and restoring confidence and insisted that it was not a bailout. He said: "This is not a bailout for banks. The objective is not to protect the banks. It is to protect the public from the banks." Yeh - right!
It's going to be long long summer....
The Times Online: Sellers forced to drop asking prices on homes
Annual house price inflation in England and Wales has slowed to its lowest level since mid-2005 as April suffered its first month-on-month fall in asking prices in six years. According to figures by Rightmove, the property website, the annual rate of asking-price increases slowed to 1.3 per cent in April, down from 5 per cent in March, as the impact of the credit crunch on mortgage availability continued to bite. The average asking price in April fell by 0.1 per cent on March to £239,521. This signalled the first decline in April, typically a strong month for property sales, since 2002 and compares with a 0.8 per cent month-on-month rise in March. ***the trickle before the flood?***
You would have thought these guys were smart! Guess NOT!
The Times Online: UBS admits list of errors before key meeting
UBS this morning detailed a catalogue of failures that contributed to a $37.4 billion (£18.8 billion) writedown, including the rushed set-up of its hedge fund business, overaggressive growth plans and a lack of risk management. Guess there will be more of the same as more and more European and Asia banks come clean....watch this space.
What a naughty boy
CityWire: First vulture fund circles home repossession market
About £100 million in City funding is being sought to back the launch of the UK’s first vulture fund to specialise in repossessed residential property. Property group Assetz is negotiating with property fund managers to back the scheme, and was sourcing repossessed properties at a rate of around 200 a month through bridging finance specialists, private clients and other agencies, said chief executive Stuart Law. Distressed sub-prime sellers unable to re-finance were emerging across all property types he said, with the typical purchasing price around 15% to 20% below recent market value.
But, but, strong economy, sound fundaments, full employment!
The Times: Big companies set to fight global crisis with job cuts
Britain’s top 350 companies plan to cut spending and jobs and to dispose of assets as they struggle to cope with the credit crisis, but only a few are considering cutting dividends, according to a survey by Deloitte, the accounting firm
The goddess of BTL is a con artist
ThisIsMoney: The truth about 'broke' Rosie Millard
She published columns in the Times propping up BTL because of her huge vested interests. "• A £900,000 Grade-II* listed Georgian home in one of Islington's most exclusive residential squares. • A £ 600,000 four- bedroom Victorian house in Hackney. • Two buytolet loft-style apartments near Liverpool Street worth a total of about £600,000" AH AHHAHAHHAH HAH Islington and the City... these will be the areas worst affected by the crash!!!
End of Rosie's BTL empire dreams
ThisIsMoney: Former BBC presenter's £40,000 debt
Rosie Millard was living like a millionairess - without the money to pay the bills. 'Cheques bounced daily'.
In the words of Confused76....MUAHAHAHAHA
Times Online: Abbey pulls out of buy-to-let mortgages
''...Abbey has stopped selling buy-to-let mortgages to landlords, blaming "recent market moves" for a raft of measures announced today that will also penalise some residential borrowers. ...''
The markets are detecting the Fed's inflation policy
Market Oracle: Fed Interest Rate Cut Could Spark Bond Market Panic Selling
"When the Fed and Washington radically altered the rules of U.S. finance last month, they placed in jeopardy huge positions that had been put in place to hedge against and profit from systemic crisis. With the end of "Stage one" arises a major short squeeze in the Credit, equities, and derivatives markets. And when it comes to contemplating the scope and ramifications of today's "hedging" activities, we're clearly in Uncharted Waters. It is not beyond reason that a disorderly unwind of "bearish" Credit market positions could incite a mini bout of liquidity, speculation, and Credit excess that exacerbates Global Monetary Instability - while Setting the Backdrop for Stage Two of the Crisis."
Enough already! (as they say in New York)
Bloomberg: Carlyle, Deutsche Bank Seek to Raise $500 Million CLO
Carlyle Group, the world's second largest private-equity firm, is raising a $500 million collateralized loan obligation to buy high-risk, high-yield debt being sold by banks at discounted prices, according to people with knowledge of the plan.
Government believes it is necessary to protect itself from the prospect that house prices could fall by up to 30%
Citywire: Bank of England £50bn bail-out leaves lenders exposed to housing crash
The Government's plan to restore liquidity to the banking system marks a £50 billion intervention into financial markets but aims to minimise taxpayer risk. The nature of the scheme shows that the Government is seeking to insulate itself from the risk of the housing market falling by between 10 and 30%.
Interesting view from Citywire editor on BOE intervention
Citywire: Bank of England £50bn bail-out leaves lenders exposed to housing crash
The Government's plan to restore liquidity to the banking system marks a £50 billion intervention into financial markets but aims to minimise taxpayer risk. The nature of the scheme shows that the Government is seeking to insulate itself from the risk of the housing market falling by between 10 and 30%.
Good explanation for us simple HPC folks
Youtube: House Prices Fall Worldwide
Hello. I'm Bernard Hickey with the daily briefing from interest.co.nz...youtube item...
Tulips From Amsterdam-just Replace Tuilps With Houses
investopedia: tulips from amsterdam
scary how similar all bubbles are and how they all end...not with government bail outs normally!
To bail out a $681 trillion derivative scheme with taxpayer money is obviously impossible.
Web of Debt: CREDIT DEFAULT SWAPS: DERIVATIVE DISASTER DU JOUR
When the smartest guys in the room designed their credit default swaps, they forgot to ask one thing – what if the parties on the other side of the bet don't have the money to pay up? In December 2007, the Bank for International Settlements reported derivative trades tallying in at $681 trillion – ten times the gross domestic product of all the countries in the world combined. Somebody is obviously bluffing about the money being brought to the game, and that realization has made for some very jittery markets. To bail out a $681 trillion derivative scheme with taxpayer money is obviously impossible. As Michael Panzer observed on SeekingAlpha.com: As the slow-motion train wreck in our financial system continues to unfold, there are going to be plenty of ill-conceived rescue attempts.
Stuatz comedy club comments at their all time best
ifaonline: House prices will recover this year - Assetz
House prices are falling on a monthly basis but the Special Liquidity Regime, announced today by the Bank of England, will bring the market back to normal by September, according to Assetz. “It is now an excellent time to grab a bargain before the summer, when finances are likely to start to improve, increasing demand across the board and driving prices upwards again.”
Bank of America misses forecasts
CNN: Bank of America misses forecasts
Bank of America (BAC, Fortune 500) saw net income plunge to $1.21 billion, or 23 cents a share, from $5.26 billion, or $1.16 a share, in the year earlier period.
Extra funding will not re-inflate the housing bubble
MoneyWeek: Can Alistair Darling save the housing market?
Alistair Darling, who clearly missed his true calling as a plumber, wants to 'unbung' the British banking system. I suppose you could call it money down the drain…
at least 100 billion for it to really actually make a difference to the solvency position of banks,
Bloomberg: Buiter Says U.K. Banks Need $200 Billion Aid From Bank of England
``The mortgage market has to shrink,'' Buiter said. ``We've had an unsustainable housing boom. If we get 50 billion pounds of net mortgage lending this year, that would be ample to sustain mortgage financing at a reasonable level.'' more here: http://www.sott.net/articles/show/154071-Buiter-Says-U-K-Banks-Need-200-Billion-Aid-From-Bank-of-England
Good News is Bad News
BBCNEWS: Worried shoppers 'turn to cash'
Worried shoppers are increasingly spending with cash instead of credit cards, a survey by the British Retail Consortium (BRC) has suggested. A survey of 17,000 shops found cash was used for 60% of transactions last year - up from 54% in 2006 - and accounted for about a third of all money spent. The BRC said it showed a reluctance by people trying to control their finances to spend money they did not have. Director general Stephen Robertson said cash was "alive and thriving". Another reason to remove cash from citizens?
Its not just Mortages, Credit Cards loans can be swapped as well.
BBC: Banks' big bailout
Scroll down a little for Peston's update at 10:40, the comments in Peston's recent articles covering the bail out say it all really. This hasnt gone down well with the public. Riot anyone!
Scrap the Green Belts and sack the Planners
Audacity - Let's Build: Forget Eco-towns - Let's follow the example of Britain's Gypsies
Green Belts have stopped the proper growth of housing, or so it seems. The Planners and those bods in City Hall are just so out of touch with what "normal" pepole want, even the Gypsies are getting in on the Act. However it may not be the traditional Romanies, more like the Free-Spirits of the 60's getting older and wanting to settle down. "Since the 1969 Skeffington Report planning decisions also rest heavily on local views - giving "not in my back yard"-ers a veto on new homes. " etc.
Chasing their losses......
Daily Mail: £50billion taxpayer funded bail-out for banks could be doubled
''...The City was holdings its breath today to see if the dramatic £50billion cash injection to the banks is enough. There was speculation it could be doubled to an eye-watering £100billion if necessary to stave off a collapse in the housing market....'' Make no mistake, the cost of housing has become EVERYTHING to this government. Nothing else matters.
Letter from Bootle
Telegraph: The credit crunch and how to ease then end it
Summarises some of the points we have discussed here. Bootle advises that low interest rates are the solution rather than the current bailout. He optimistically assumes that inflation will stay in check. Well, he did write "The Death of Inflation". Plenty of the comments disagree. We are at an interesting point - if interesting is not too euphemistic.
From the horse's mouth..
Bank of England: Special Liquidity Scheme
Forget the Janet and John stuff at the beginning that the rest of the press is reporting, and check out the pdf link to the Market Notice. Note the prohibition of 'synthetic' securities - is this the real problem in the banking system? But also note that US mortgage backed securites are NOT excluded...
"Could"? "Could"?
Rightmove: April house price index
Scroll down to the chart at the bottom of page one, which shows BoE interest rate changes. Priceless. I also like this statement "Lack of confidence amongst banks in the credit worthiness of each other could create a 'correction overshoot'". They're banks, for crying out loud, if they don't trust each other, why should the taxpayer?
Fake Ferraris
CNN: Fake Ferraris
Off topic...but interesting Fake Ferraris In Italy, a group of rogue mechanics made Toyotas and Pontiacs look like Ferraris. what next? lol
The trillion-dollar mortgage time bomb
CNN: The trillion-dollar mortgage time bomb
how will this affect the UK?
It begins
The Oil Drum: Europe: Grangemouth: Calm urged over potential refinery shutdown
Friends are amused at my collection of retro clothing and joke that I should be transported to the 1970's. I say that I'm just anticipating the inevitable and that we are already here. This could send us to a three day working week if it cascades down and Unions start doing their job, standing up for workers in the face of rising prices and rampant money printing to protect wealthy b(w)ankers at the expense of the working man. Prices will finally be allowed to go through the roof and the Unions will be blamed. The refinery produces about 10% of our fuel, and we only have about 70days of stored fuel, particularly after the explosion at Bouncefield rendered one of England's largest fuel stores inoperable. Is that part of the plan?
More pain to come
Guardian: Forecasting group warns of pain for UK economy
The British economy is facing two years of sluggish growth in the wake of the global credit crunch unless the government takes decisive action, according to the Ernst & Young Item Club. The economic forecasting group describes the outlook for the housing market and the high street as "bleak" and about to get "a whole lot worse", Although the economy has remained relatively buoyant so far this year, our reliance upon international banking markets means it is only a matter of time before it slows, This is going to be a rapid, painful adjustment and it will mean a rough ride for a substantial proportion of the population.
The risk of negative equity means now is a good time to rent
Guardian: Is now a good time to rent?
Morgan Stanley reckons that 1.2 million families could be plunged into negative equity in the next two years as house prices fall by as much as 25%. If you're in Glasgow, Manchester, south-east London or Birmingham, you're more likely to be among the 75,000 households Experian predict will go into negative equity this year. The Abbey suggests that if house prices are about to fall, while interest rates remain high against inflation, it might be financially astute to rent short term. Meanwhile, rents are soaring, according to Paragon Mortgages' BTL index for March. Great for landlords (average rental income in February rose 5.2% over the past quarter), but glum for new tenants (rents went up 15% over the year and the trend is upwards). Uhm rents up 5.2% but IR up a lot more!!
Is the Halifax Building Society in trouble.
The Times: From The Sunday TimesApril 20, 2008
I just rang the Halifax as I had to pay my company insurance. The system was down. When they spoke again they said that their systems had changed. I basically had to do an electronic transfer which I do all the time. It used to be immediate but now it appears that I have to wait two days for the money to leave my account and this is for everyone in the Halifax. I asked them for some evidence that I rang them as it was an important transfer and they would not guarantee that. They just said that although I rang at the weekend they would not start the payment till Tuesday. Could this be a cash flow problem Why would they just change something that had been in place for the last 30 years. Its like they need to check what is going out for some reason??
Rightmove: -0.1% MoM, +1.3%YoY
Guardian: UK house price growth slows to 3-yr low
Annual house price inflation in England and Wales slowed to its weakest level since mid-2005 this month as April suffered its first month-on-month fall in asking prices in six years, a survey showed on Monday. April usually sees a rise of around 2.8% The annual rate of asking price increases slowed to 1.3% in April from 5% in March, Rightmove said. On the month, prices were 0.1% lower. Last month, Rightmove reported that asking prices rose by 0.8%.
Peston's view
BBC: Mervyn bends - and how!
The Bank of England will on Monday morning perform what some will see as one of the greatest u-turns in its 300 year history. Having been far more conservative than the Federal Reserve and the European Central Bank in the way that it provides financial support to banks, it will announce what may be the world's most ambitious and generous plan to pump money into the banking system. The Bank of England will offer banks the opportunity to swap their mortgages for rock-solid Government securities. When the dust settles, the proposal will spark controversy.
Sunday, April 20, 2008
Nero fiddling, Rome burns...when will the plebeians revolt?
Firstrung: Sing along with the common people, sing along and it might just get you through
One of the benefits of having your own bit of internet 'space' to occasionally fill is that when something grates you can use that space as a cathartic release in order to lance your nagging grievances. Wordsmiths and "sophistication" (in the true sense of the word) go hand in hand. Naturally when you're involved in journalism, at any level, you begin to quickly identify how cleverly politicians in elevated positions use their sophisticated power of words in order to implant ideas and reinforce their beliefs. Neuro-linguistic programming is a fascinating subject and one that couldn't possibly be done justice in the small space of this blog. 'The Power of Words' in order to manipulate thinking and control behaviour is an art politicians have practised and perfected since ancient times. m
A way to make money on our predictions?
Intrade: Prediction Markets Site
Intrade, is The Prediction Market where you can buy and sell "shares" in financial, political, weather and other important subjects. Incorporated in Ireland, Intrade has been featured on CNBC, CNN, Bloomberg, Fox, Fortune & others. Copyright © 2007, all rights reserved.
Join Your Union!
Ludwig Von Mises Institute: Can Unions Cause Price Inflation?
This article argues that unions can only have a short term affect on some prices, that in reality, central banks cause inflation by printing money, as seen with bank bail outs & recent irresponsible lending. Turn it on its head, & you realise that Unions stop banks from printing money by fighting against the falling standards of living experienced by its members when banks cause inflation by printing money. They are the working man's last line of defence against the type of lax monetary policy we see today. So, Thatcher destroyed Unions to stop them from getting in the way of the bank's aim to control money supply & print cash at will, for their own benefit & to the perverse result of facilitating a larger debt based state machine. She was protecting state and bank, not economy.
You're saved BMV is here
guardian.co.uk: It's always sunshine and profits at the property show
House prices are falling at their fastest rate for years, chartered surveyors are downbeat about the future, and overseas, property values are tumbling in one-time investment hot spots such as Spain and Florida. But buy-to-let landlords and holiday home purchasers had a chance to forget the gloom last weekend at the Property Investor Show. In the permanent artificial lighting of Birmingham's NEC, the few visitors who turned up were told it was perpetual property sunlight - in Liverpool, Derby, Barnsley and Scunthorpe, as well as more exotic locations such as Malaysia, Mongolia and Peru. The secret of no-money-down loans lies in three little letters: BMV. Could be a BTL Revival. Is it about to happen all over again?
Lest we forget.....
Daily Mail: The wheeler-dealer aged 102 takes out a 25-year mortgage
Apologies for posting old news (March '07), but I think it's important to remember just how ridiculous the lending situation had got pre-credit crunch. If Broon/Darling think we're ever going to return to this state of affairs again then they are beyond help. I look forward to seeing the rest of these companies withdraw from the market. Goodbye Preferred Mortgages, we hardly knew ye!
Why U.K. Banks Need $200 Billion Aid From Bank of England
SOTT.net comments on Bloomberg article: Buiter Says U.K. Banks Need $200 Billion Aid From Bank of England
Former Bank of England policy maker Willem Buiter said the central bank will need to offer loan swaps to financial institutions of at least 100 billion pounds ($200 billion) to kick-start the U.K. mortgage market.-bloomberg. SOTT comments:The UK is about to copy the US and have taxpayers bail out the banks. It's being dressed up as a means of helping the borrowers but the reality is it's a desperate move to keep the banking system propped up.
Why ?
Sunday Times: Alistair Darling plans unprecedented £50bn bank bailout
Alistair Darling is preparing to announce an unprecedented £50bn bailout of Britain's banking system in an effort to save the housing market from collapse.
That crash word again
Independent: Lenders lock out new borrowers amid fears over housing crash
"This is all about Abbey protecting itself against negative equity," Ray Boulger from broker John Charcol, said. "Higher-value property often falls further than lower-value housing so lenders want borrowers to have more of a buffer in place."
20 percent drop in Bath
Observer: Snooping around: Homes reduced in price
... and still no takers.
Will this medicine give us "the runs"?
Bloomberg: Bank of England to Detail Swap Plan for Easing Credit
Darling said ``One analogy is someone who has gotten dose of food poisoning and in some aspects that just has to work its way through the system,'' ... ``We can help the process and the Bank of England's measures tomorrow will help the process, which in turn will help the housing market.''
House prices drop in 6 seconds
BBC: Andrew Marr Show
Classic "... we've been on air 5-6 seconds, and already your house is worth less than when we started"
Sterling takes a pounding – and the slide isn't over yet
MoneyWeek: Sterling takes a pounding – and the slide isn't over yet
Sterling has hit an 11-year low against a basket of major trading partners' currencies, and looks set to continue to underperform against the euro and the dollar. What’s more, the direct investment inflows stemming from the boom in M&A activity were a key prop for sterling in recent years, and these have now gone into reverse.
Would a crash be a bad thing ?
BBC Radio 4 Any Questions ?: Would a housing crash be neccessarily a bad thing ?
The truth is gradually coming out ... 17 mins in. Broadcast on Radio 4 Sat 19 Apr - 13:10 Panellists include Ken Clarke, Frederick Forsyth, Angela Eagle and David Laws.
Peter Hitchens speaks out!!
The Mail on Sunday: Why should we be angry that houses are getting cheaper?
Peter Hitchens is like John Redwood. I can't agree with everything he says, but at least he says what he means.
Insolvency is the real problem
Observer: A warning to the banks
A significant article, highlighting the arrogance of the banks and the Govt's fear of falling house prices. Two revealing quotes: Re US: "It has certainly helped to bring down the spreads between Treasuries and riskier mortgage loans, and begun to calm down the markets, but house prices are still plunging. " 'I think the problem here is that we're still emphasising liquidity problems and are moving to a solvency crisis. You can give banks extra money, but they may still not want to lend.' "
Further utility price rises possible
Observer: Utilities at risk from debt timebomb
A little off topic, but another example of concealed problems lurking as a result of all the debt. An antidote to the optimism of some economists. Inflation ready to spring.
You have to laugh or cry about this one
Daily Mash - Its news to us.: OFFICE OF FAIR TRADING TAKES FOUR YEARS TO DISCOVER BUILDERS ARE AT IT
So here we have it, private money printed to fund public private partnership (to pay for schools, railways, you name it) has been used to inflate build costs, in turn justifying a higher tax grab to pay interest on loans from private banks who print money from thin air. Now that the bubble is popped, low & behold the office of ?fair? trading announces that the building trade has operated as a cartel. Is this a smoke screen for the banking cartels who printed the money that made inflated prices possible in the first place? Or have I missed something?! Why "expose" builders now? Is it because the government has benefited from the housing bubble? Only if the government is representing banking interests. No? Then how did Tony Blair bag a ?500k? "job" (pension?) from JP Morgan.
Greed is good for nothing.
Guardian: Now super-rich face a backlash as credit crunch hits home in America
The 'American dream' of unashamed wealth and the opportunity for all to acquire it has reached a crisis point before: in the Depression, the oil shock, in the 'greed is good' Eighties and the madness of the dotcom bubble. But America's relationship with wealth - uncomfortable as it has sometimes been - has always been built on the same foundation. Even as charted in the salutary tales of Fitzgerald, Steinbeck or Wolfe over the decades, or in the endless fascination with Howard Hughes and the fictional Ewings of Dallas, the aspiring masses never quite lost their admiration for blatant enrichment, nor the elite their pride in it. Now, however, all that appears to be changing.
Suppliers go bust as Tesco haggles harder
Telegraph: Tesco has food for thought as prices rise
Last year Watts watched helpless as the price of wheat, cardboard, petrol and labour rose. Watts costs rose be 31%. In order to remain sustainable he increased the price he charged customers. Premier Foods, also saw its materials bill rise 19%. Higher demand for wheat and rice in Asia and a poor global harvest are behind the rise. Rising prices have added an estimated £600 to a family's annual grocery bill. UK's supermarkets, where Britons spend £120bn a year are at the end of the food chain meaning that they have a crucial role to play in the pricing crisis. Tesco's suppliers have complained that they have been unable to pass rises on to, resulting in them absorbing the cost and in some cases going bust! In short not a sustainable business model. Expect more increases soon!
House prices to fall 10% this year and 5% next year - Yippeee
Telegraph: House price falls won’t send the UK into a recession
Strange thing happens when some people comment on house prices. There is something close to an inversion of the logic that is applied to other economic issues. When food prices go up - this is considered bad news. But when house prices go up, this is considered good news. But in many ways houses and food are similar - they are both necessities that you need to buy for as long as you live. Falling house prices are treated as thought the plague has been spotted. Derivatives contracts priced off the Halifax national house price index currently price in a 10 per cent fall in 2008 andaround a 5 per cent fall in 2009 (what about 2 bed flats?). A 10% fall will reduce GDP by 1%.
Nothing new just reinforcing what we know
Guardian: UK consumers face 'rapid and painful' downturn
Consumers should be braced for a 'rapid, painful adjustment' as Britain's buy-now-pay-later economy faces up to a new era of straitened credit. 'This is going to be a rapid, painful adjustment and it will be a rough ride for a substantial proportion of the population. We are facing a massive sea change in the balance of the economy, 'It will be particularly painful for those that have recently stepped onto the housing market ladder and those coming off cheap two-year fixed mortgages.' All hopes now rest on are exporters!!! Do we have any left?
Creative Finance vs Sanctity of Contracts
Guardian: 'Mortgage holidays' for hard-up homeowners
Well, there's an election coming up: "Homeowners facing the threat of repossession could be offered 'mortgage holidays' from their payments and other deals to keep them under their own roof under proposals to be discussed at a government summit this week."
Well, bet on a crashing market then buy from a t*sser estate agent
Wall Street Journal: Hedge funds’ Paulson trades up
Last year, hedge-fund manager John Paulson pocketed billions by betting the housing market would collapse, but in the Hamptons, he’s just listed his three-acre retreat for $19.5 million, more than 50 percent above what he paid for it two years ago. The founder of Paulson & Co., managing roughly $32 billion, recently bought a 10.4-acre lakefront compound less than a mile away for $41.3 million. The seller was Rodney Propp, chairman of a Manhattan property firm.
Saturday, April 19, 2008
Delusion, delusion, delusion
Times: Rosie Millard's Dinner party conversation turns to property and the credit crunch
“We are going to have to get used to a brave new world. Negative equity, I salute you.” Well, at least we’ll go down with vigour, if go down we must."
Clingons on the starboard bow
Times online: Boldly going into uncharted territory
Prices fell 7% in Germany this YTD and no boom to push them up either.
Darling's dilemma?
Bloomberg: Buiter Says U.K. Banks Need $200 Billion Aid From BoE
"Former Bank of England policy maker Willem Buiter said the central bank will need to offer loan swaps to financial institutions of at least 100 billion pounds ($200 billion) to kick-start the U.K. mortgage market".
Long winded, but gets the message across...
Yahoo! Finance: Why Homebuyers Can Afford To Be Patient
The point is, you don't have to rush onto the market. You can take some time to improve your finances. You can take your time to find the right property at a bargain price, whether that shows up in one year or four. You don't have to buy the first property you see at the listed price.
Gordy, you can't always get what you want...
Times: Chaos fears over strike at refinery
Fake low inflation, declining real value of salaries, unprecedented attacks of pensions, 6 million people on benefits in the UK, widespread benefit frauds, highest level of taxation ever, crumbling infrastructures, lost ownership of critical banks, power stations, roads, rails to French, Spanish, Germans. The dustbin of history is ready for Gordy and his clowns (Ed Balls first into the chute) the house price crash is the catalyst.
New York Globex: Gold manipulation at new levels
Market Oracle: Why Gold Was 'Hacked' Friday- and How
A $35 price drop in gold coupled with the secretive launch of a brand new, super fast, 33 trades per second global trading platform for gold. What a coincidence!
Tragical Ali: taxpayers' money used as life support for BTL!!!!!!!!!!!!
Herald: Credit fall out lands on buy-to-let. YIEPEEE!
Smart people to drop the Pound and leave the UK before the country turns really nasty. "For landlords facing a hike in interest rates, Private Sector Leasing schemes Landlords looking for certainty could be thrown a lifeline by the growth of private sector leasing (PSL) schemes in Scotland. In return for handing over their property to a council for three, four or five years, landlords get a guaranteed monthly rent - even if their property is empty.Rents typically match what a landlord would get on the private market, less the fee a management agent would take - typically 10-15%.Where landlords who opt for PSL come out better is that in addition to the guaranteed rent, all legal and final redecoration costs will be paid for by the scheme"
Landed gentry see same trends as HPC bloggers.
Belfast Telegraph: Ailing UK property market is unlikely to hit bottom in 2008, predicts Grosvenor
The Duke of Westminster's property group, Grosvenor, warned yesterday that Britain's commercial property market was unlikely to recover this year and that real estate returns were likely to slow globally. Also....see www.belfasttelegraph.co.uk/breaking-news/ireland/article3588844.ece
Comical Ali
Telegraph: It's tough out there, but the good times will return
Need there be such dramatic predictions about the property market? We need commonsense alongside financial realism. It has been claimed that Britain is more vulnerable than the US to a collapse in residential property values because our level of personal debt is higher. I disagree. Even if average values fell 20 per cent this would less than negate the average increase during 2003 alone. First-time buyers are not disappearing. They comprised nearly a third of purchasers last year with an average 20 per cent deposit, usually thanks to parents and grandparents ploughing their property gains back into the market. The buy-to-let sector is strong and growing. Almost 50 per cent of landlords plan to buy more, to take advantage of dipped prices.
Some good points, some bad points.
John Redwood: If they can manage £50 billion now, why not before the run on the Rock?
I don't agree with everything he say's but he does make some intersting points.
You didn't meddle on the way up, Gordon...
Monevator: Hands off our falling house prices
Soaring prices of staples like wheat are making the headlines as the worst thing since unsliced bread, so why are soaring house prices seen as a good thing? We all need somewhere to live, just like we all need somewhere to live. Now prices are falling, the Government should leave them be. Anything else would be self-interested hypocrisy.
First 10 minutes on houseprices
BBC Radio 4: Now Show
You have to laugh Crash acceptance in BBC land
Another bash at HPC.co.uk
Telegraph: Apocalypse now? I don't think so
t seems there is quite a cabal of people in his court. They congregate online at a website called housepricecrash.co.uk, where they exchange views on why it is better to rent than to buy, and place bets on how long it will take before prices slide back to mid-1990s levels. I wouldn't recommend the site to anyone looking for a balanced take on the market: many of its users seem to have a positive vendetta against homeowners.
For VI's....Keep watching over and over to be convinced
Youtube: HOUSE PRICES WILL NEVER CRASH
First time around I was still cynical - after 24hrs I was convinced!!!! NOT.......LOL
We dont want to repossess homes worth less than their mortgage
BBC: Mortgage help demand for jobless
Surprise, surprise, mortgage lenders are asking the government to give the masses of potentially unemployed more assistance with their repayments.
Level headed editorial comment (dated 18th April)
FT: Banks ask for help
Whatever his troubles, Mr Brown can have little desire to go down in history as the author of what might well prove the biggest misselling scandal in UK history. The government should take no action to sustain either the housing market or any particular level of lending. But it does make sense to help make the market for existing asset-backed securities less illiquid. A proposed scheme to swap such securities for government bonds needs to be brought to early fruition, provided the credit risk remains with their current holders. Yet the government should also tell bankers it believes in the market economy. Prices, it should explain, can go down as well as up, just as terms of lending can tighten as well as ease. It has no interest in rigging the housing market. It would probably fail .
What the hell ! house prices reducing
The Guardian: Snooping around
Anna Tims discovered three homes reduced in price, more fuel for the fire, this article was in the glossy weekend magazine, just goes to show how quickly sentiment can change
Buy this weekend's FT. Pages 2 & 3 cover the UK subprime defined "worse than the US". The crash is here!!!
FT: Find how your area is exposed to Bye-to-let and "non-prime" mortgages. AHHAHHAH HAH AHHAH
UK housing: areas to watch (hint: Central London is the worst of the worst with BTL concentrations of 20% to 28%)
House prices increase by 200% as wages increase by 25%, case closed
Firstrung: First time buyers witness house prices increase by 200% in a decade
UK House prices for first time buyers throughout the UK have risen a staggering 200 per cent in a decade, the annual Roof Affordability Index has revealed...The index, seen as the most comprehensive yearly data on house affordability, shows the average first time property price has rocketed from £52,674 to £159,494, with house price to income ratios doubling from 1.72 to 3.4. The figure is even higher in London with first time buyers facing a crippling 250 per cent rise to almost £260,000. The devastating report, in the latest Shelter ROOF magazine, confirms the fears that first time buyers are facing the hardest ever battle to buy their first property.
A landlord has been fined £2,500 and ordered to pay £260 in costs
Cardiff Council: Cardiff Landlord Fined for failing to licence a house in multiple occupancy
Cardiff Landlord fined for failing to licence a house in multiple occupancy A landlord has been fined £2,500 and ordered to pay £260 in costs due to his failure to make an application for a mandatory Houses in Multiple Occupation Licence under the Housing Act 2004. Mr Zaccariah Ahad Chowdhury, of Rannoch Drive in Cyncoed Cardiff has been penalised for a property on Llantrisant Street in Cathays Cardiff. The property was established as a three storey shared house in multiple occupation with six tenants, and subject to mandatory licensing following a visit by a Cardiff Council private sector housing officer in November 2007.
Falling houseprices a good thing
Telegraph: Why is everyone worried about house prices?
A good antedote to the Kirstie article in today's Telegraph: "If you study media reporting of our current economic discontents, you notice something strange. Rising fuel costs, utility bills, startling food price increases are represented as bad. But house price increases are considered good. The headlines about the housing market are all about falling prices, and they invariably contain words like "gloom". Why? Gloom for whom?"
Bit of hard data to put in with all the speculation...
Alexa.com: Alexa Web Traffic Rankings
The chart shows a continual decrease in traffic to property websites in the last 5 months of 2007, but holding steady so far for 2008. Note the v.recent increase of traffic to HPC
Put your money where your house is
FT: Stump up the deposit
Posting more than my share today (yes, I should get out more). The BTL carry trade losing its attractions as bigger deposits and fees needed on top of rising rates. Given that these characters pay interest only on loans, remortgagers are going to have to pump more cash into their get-rich-quick investments, even as their value falls. Oh dear.
Banks: we're in the money...
FT: Matthew Vincent: Time flies but houses sink
This article suggests that the money being thrown at the banks will have less impact on mortgage lending than the banks' balance sheets. While house prices fall, bank shares will rise. Economic incompetence richly rewarded. Buy banks?
Welcome home GB
Times: Cartoon
Bearing in mind our present feelings about our PM's wisdom, I thought you might enjoy this Morland cartoon
The credit crunch sinks its teeth into the economy
Property woes increase as slowdown bites: Independent
CML sounding gloomy now - and crying for a bailout, naturally. Bad conditions for commercial property -> bad economy -> unemployment -> house price falls....
Subprime Britain is like the US
FT: Subprime map of Britain adds to concerns
Britain may be more at risk of a US-style housing slump than previously thought, according to the first detailed UK map that shows where subprime mortgage lending is concentrated.
Forget SubPrime, Alt-A is much larger, and its imploding too!!
YouTube - Mr Mortgage: HERE COMES THE ALT-A CRISIS
Biggest Financial Meltdown in human history guys and girls.. watch this guy, he explains how big and precarious the Alt-A mortgage market is. SubPrime is a picnic compared to whats coming!
Bad news causes share prices to rise; why?
Guardian: Banks are top risers despite RBS rights issue
The City decided to look on the bright side yesterday despite the prospect of yet more bad news in the banking sector. Banks ended among the top risers yesterday, recovering from earlier losses after traders fretted over reports of a possible £12bn rights issue from Royal Bank of Scotland. Can somebody please why the worst news causes the share price to rise. I cannot believe that the banks have told us all their bad news!
The figures are getting bigger
Guardian: £50bn move to unlock mortgage market
The BoE is preparing to unveil a plan to inject £50bn of funds into the financial system. The government is expected to issue bonds which lenders will be able to exchange for packages of mortgages lodged with the Bank as collateral. The £50bn may not be as much as the lenders were hoping for!!!!!!!!!!!!!! I think there should be a new law that forces all the media to put the zero's behind the pound sign 50,000,000,000!
Krusty blasts HPC.co.uk
Telegraph: Locating the cause of the property crisis with Kirstie Allsopp
With her meandering curves and no-nonsense approach, Kirstie Allsop was voted one of the world's sexiest women. She lives in not one but three small flats, bought at different times, with a huge painting in the hall saying, "Why Rent When You Can Buy?" The people she finds most irresponsible are those who are trying to whip up fear. "There is a website called Housepricecrash.com and I am their deadliest enemy. They all rent and have a vested interest and enjoyment in watching others suffer. That's sick. Schadenfreude is absolutely disgusting and a terrible trait. There has been overpricing in some areas but this is not America. We are not going into freefall unless we panic ourselves into it."
Bank chiefs warn YOUR home is overvalued by 30 per cent
This is London: House prices 'will crash soon': Bank chiefs warn YOUR home is overvalued by 30 per cent
House prices are 30 per cent too high in the UK and could soon crash, the International Monetary Fund warned yesterday. After a decade-long housing boom, it fears Britain is one of the most vulnerable countries in the world to suffer a devastating price collapse.
Friday, April 18, 2008
Desperate??????
The Times: Royal Bank of Scotland may auction Direct Line and Churchill to raise cash
Royal Bank of Scotland is this weekend mulling the option of selling its Direct Line insurance business in an effort to sweeten investors furious about a mammoth planned capital-raising of as much as £13 billion.
Incompetence funded by ... pension funds, e.g. you and me
Economist: And the cupboard was bare
EVER since the emperor bought new clothes, there have been few instances of self-delusion quite as stark as that of cavalier British bankers at the start of 2008. Just as rivals in America and other parts of Europe were writing down billions on their investments in dodgy mortgage loans and frantically raising money, the bosses of Britain’s biggest banks were instead blithely increasing their dividends in a blustery display of financial strength. I heard on the BBC that RBS is looking to be the first in line because there are fears that the markets will run out of money. Depressingly it was also said that our pension funds e.g. in the end you and me, have an interest in keeping the banks afloat. Oh, yes, and Sir Fred won't be sacked because he has to manage the complex merger.
Bookies are not often wrong
Ladbrokes.com: House price odds
UK House Prices 2008 To rise: odds =9 To fall by less than 10% = 2 To fall by at least 10% = 1.83 To fall by at least 20% = 7 This could be a useful hedge for those buy2letters out there and tax fee.
The shape of things to come
Bloomberg: Spain Approves Stimulus Package as Housing Slumps
The Spanish government approved 18 billion euros ($28 billion) of emergency tax cuts and spending to shore up an economic expansion undermined by a slumping housing market and the global credit shortage. The measures, passed by decree today and enacted immediately, will provide a 400-euro tax rebate to all workers and pensioners, part of 10 billion euros of outlays this year. The remaining 8 billion euros are earmarked for next year.
A Lesson in Seige Defence from Commander in Chief Law
Assetz: Buy-to-let remains a bastion of strength
Friday night posting: "If buy-to-let is a castle, being assailed in mediaeval-style by a huge army, firing flaming arrows (or should that be negative headlines?) and attempting to batter down the door with the "credit cruncher" siege engine, then it appears to be a fortress that is withstanding the attack very well. Indeed, the latest survey suggests many within those thick walls will soon be riding out to make some more conquests."
Government 'cooking' the books!
BBC News: Government plan to bail out banks
I couldn't believe what I was reading when I first looked at this article. There cannot be a more blatent disregard to the all the hard working, prudent members of society. What a scandal, this paragraph captures the scam in one... 'the lending programme could open up the Treasury to accusations of creative accounting by opposition parties by limiting the maturity of the bonds to one year, but allowing the lending facility to be in place for three years.'
If there is something, it had better be now.....
CBS News: Bush: U.S. on Verge of Energy Breakthrough
(AP) Saying the nation is on the verge of technological breakthroughs that would "startle" most Americans, President Bush on Monday outlined his energy proposals to help wean the country off foreign oil. Less than half the crude oil used by refineries is produced in the United States, while 60 percent comes from foreign nations, Bush said during the first stop on a two-day trip to talk about energy. Some of these foreign suppliers have "unstable" governments that have fundamental differences with America, he said. "It creates a national security issue and we're held hostage for energy by foreign nations that may not like us," Bush said.
Tell the Telegraph what you think
Telegraph: What hope is there for the housing market?
Your chance to say how much prices will fall and spread some more anxiety. "What is more interesting is that all the estate agents I have spoken to over the last 2-3 months blame the media - TV and the press - for the crisis; on one day they predict large drops in prices, and the next day it actually happens."
The Fed is printing money to clean up the housing bubble, which was fueled by the money it printed to clean up the Internet bubble. The only question is what kind of bubble the new money will inflate.
Baltimore Sun, USA: Bet on oil as the newest bubble
Hmm, somebody got the picture here, unusually rounded reporting from the press about the merry go round that is our unsustainable inflationary based monetary policies of the west, Where is Jesus, when you need him to chase away the money lenders!!
Capitulation
Guardian: Londoners lower prices in bid to sell homes
Miles Shipside, the commercial director of Rightmove, said: "It is highly unusual to see a fall in April. Spring is traditionally the peak season for new sellers to launch their properties on to the market at more optimistic prices, as gardens are looking their best and time is on a seller's side.
Canada to reignite housing market?
National Post: Canada's housing boom is 'officially over'
Even though the central bank has slashed its key interest rate to 3.50% from 4.50% since December, mortgage rates have come down only about half as much. Banks are facing higher funding rates themselves and have been reluctant to pass on the savings fully. Many economists expect the Bank of Canada to cut rates another half a percentage point on Tuesday, perhaps invigorating the spring selling season, which could prove to be the key test for the Canadian housing market going forward.
Sensible words in the Times (unbelievable!)
Times: Scandal of luring first-time buyers
"the problem is not global. It's British. House prices in Britain, at six times average earnings (ACTUALLY IS 10!!) are too high. That's it. We all know that, we've known it for years. Property prices are nonsensical, exorbitant, unaffordable, immorally inflated by investors and a shortage of available land space to build new homes, exploited by a greedy City" but how about affordability, new economy, immigrants, divorces, the students and the ever falling interest rates!
Brian Bloom talks sense again
Market Oracle: Causes of Global Food Crisis- Time for Honesty!!
The 3 causes are: (1) Biofuels Security Act of 2007 (2) Overpopulation (3) Global warming, which was caused by unusually high solar flare activity which, in turn, gave rise to widespread droughts across the face of the planet. (Solar flares inhibit cloud formation).
Corruption is all we can say now.....
reuters: We're paying record amounts of needless tax
As this labour bunch want more and more, people understand the system less and less..
Citigroup to cut 9,000 jobs after posting loss
reuters: Citigroup to cut 9,000 jobs after posting loss
The job cuts are in addition to 4,200 announced in the previous quarter. Citigroup said it ended March with about 369,000 employees.
Credit crisis will crunch real economy
MoneyWeek: Credit crisis will crunch real economy
Not too long ago, some analysts were still claiming that the financial turmoil would have scant impact on the real economy. But the effects of the credit crisis are now clearly kicking in.
Swiss banks biggest losses
Spiegel: Swiss banks suffer the most
(in german I'm afraid) Analysis from Peter Dixon of commerzbank in London - essentially says that following countries/banks have following percentages of global "known" writedowns so far: USA (47 %) Swiss (17 %) German (15 %) British (5%) In relation to corporate size, Swiss banks have lost the most.40% of their book value. According to report UK banks will be badly affected by any downturn in property. Or as also seems likely to me, we are only beginning to see UK banks reporting any kinds of losses.
Not strictly news - but wanted to highlight this - OUCH!
Property Snake: 50% off in SW1
Site is linked from HPC. Sorry - not strictly a news blog......but wnated to highlight this headlinerr on Property Snake, and its steady price decline since May 07, also the delisted / listed status makes satisfying reading - as the song says - sometimes you got to hold' em... sometimes you got to fold'em Was the original price too excessive? HELL YES! Is the latest price affordable - not quite but we're getting there. www.bushells.com/search/details.php?whatrec=454&areaID=0&nobed=0&price=0&sortby=1&perpage=5&buyorlet=1
HPC news article nearer home
BBC website news: 'Struggle' for first-time buyers
The housing boom of the last decade has priced many first-time buyers out of the UK property market, according to the charity Shelter. While I fully respect the work of Shelter and similar charities......I have to say 'No SH#T Sherlock!' Also - see this on youtube....ride 'THE BUBBLE'..... www.youtube.com/watch?v=bl3Z6MXYe_4&feature=related
Iceberg Iceberg!!!!!!!!
This is London: Home sellers slash house prices
House sellers are being forced to offer massive discounts as the credit crunch engulfs the London property market.....................So what will all this look like by the autumn?????
Same statistics, different spin
The Times: Spring housing misery as mortgages levels fall
"Misery"? "Joy and rapture that housing is becoming more affordable", more like!
Credit crunch kills another lender
Firstrung: Credit crunch claims another victim as the roof finally caves in on sub prime lender Rooftop
Rooftop Mortgages has blamed unsustainable market conditions for its decision to finally close down its operation. The UK based sub prime subsidiary of US bank Bear Stearns has informed mortgage brokers that its entire range will be withdrawn at 5pm today with a view to winding up the operation completely by July 2008...
Are central banks really to blame for the housing bubble?
MoneyWeek: Are central banks really to blame for the housing bubble?
News of Royal Bank of Scotland's rights issue raises hopes of the credit crunch ending. It’s a nice thought. But even if this marks the beginning of a clear-out, there’s a long way to go.
Manhattan property defies gravity
BBC: Manhattan property defies gravity
Property prices in Manhattan have soared 41% at the start of this year, defying the US economic slowdown. Despite belt-tightening and record losses at Wall Street banks, demand for luxury dwellings was strong, said the association of New York estate agents.
And now for the costs of the bailout -- socialized, of course
The Times: Treasury bond scheme depresses gilts prices
As Treasury bonds decline on fears that the government will flood the market with debt in order to bailout mortgage lenders, the cost of government borrowing is rising. This cost will have to be made up through higher taxes or reduced government spending on other priorities.
It's accelerating!!! Hold tight
CNN: UK housing market has dropped 'alarmingly' in recent weeks - Citigroup
'The update from Taylor Wimpey yesterday, combined with other industry discussions, has confirmed the housing market has dropped alarmingly in recent weeks,' the broker said. 'How much is mortgage availability versus consumer confidence is unknown, but we can see no 'magic bullet' or quick fixes to correct the current woes.'
Was this Brown's trade off?
Financial Times: RBS rights issue
The news and media will be full of this today.....but ask yourself.....Was this the trade off between the banks and Gordon Brown in order to agree the mortgage book to government bond trade off? Be interesting to watch the other BIG banks over the next few days....for more of the same.
Ride the curve!
Youtube: UK House Prices Plotted to a Roller Coaster
If you have a spare 3 mins or so - this gives you a new angle on the housing bubble......'what a ride!' I rode this ride during the late 80's and early 90's.....when owned by Lawson's Travelling Circus.......didn't feel too queezy then, but the new owners will get my cleaning bill! (please watch to the end....)
Gross mortgage lending down 17% YoY
CML press release: Gross lending slows in first quarter
Gross lending normally increases by around 20% between February and March, but this year the increase was only 5%. Wait for the Express to hail this as a market recovery..
More brown stuff hitting the fan in the US!
Bloomberg: Auction-Bond Probes Widen; New York's Cuomo Subpoenas 18 Firms
Probes into the collapse of the auction-rate securities market are widening as state regulators from New York to Washington scrutinize how Wall Street peddled the bonds to investors and issuers. ``To have subpoenas and the threat of criminal investigations raised suggests that somebody has made up their mind that there really are abuses there,'' said Donald Langevoort, a former Securities and Exchange Commission attorney who now teaches securities law at Georgetown University in Washington. ``It certainly suggests something more than regulatory curiosity.''
Just a reminder
Guardian: Great depression
Pictures of events during the great depression. Just so we all know what to expect.
mmm..surely not
youtube: Are the Builders signaling a 2008 UK Property Crash
a little youtube comment
When the shoe shine boy is giving recommendations it is time to get out
nebusiness.co.uk: Anyone can do it, says bus driver millionaire
A Former bus driver has plans to build a multi- million-pound online estate agency business after making a splash in property investment. Ronnie Davison quit his job driving buses for Arriva in Redcar in 2006 after building up a property portfolio worth £5m and is now using the profits to launch online venture Ultimatehomesandfinance.co.uk Ronnie was bitten by the property bug in 2003 after acquiring his first buy-to-let house in Redcar, before purchasing another 55 North East properties in four years, which he has since leased out or refurbished and sold at a profit. He said: "If I can do it, then anybody can do it. Looking back, everything has gone so fast since quitting my job as a bus driver and I’m now looking forward to growing the new business.
The Mail must be wrong - Gordon & George told us yesterday live on US TV that the UK has low inflation
Daily Mail: The REAL cost of inflation: The Mail's Cost of Living Index reveals food prices rising at SIX times official figure
The true, devastating scale of rising prices is revealed today - by the new Daily Mail Cost of Living Index. It shows that families are having to find more than £100 a month extra this year to cope with increases in the cost of food, heat, light and transport. According to the Consumer Price Index, inflation is running at only 2.5 per cent. Yet the Mail's index finds that food costs alone are rising at 15.5 per cent a year - more than six times the official rate. And there are double-digit increases in other "must-pay" essentials such as petrol, gas and electricity. Many families need to find more than £1,200 extra a year just to stand still.
Analysts stressed that this was not something that should worry people with accounts at any RBS banks.
BBC: RBS 'prepares fundraising plan'
But RBS is unlikely to be the only bank considering going to the market for extra capital. Bradford and Bingley denied widespread reports at the weekend that it was planning to raise money in the same way. The global credit crunch has meant banks worldwide are keen to shore up their capital positions - and it is thought others may follow RBS's move.
serve the people....wot ever!
the guardian: 'Make the market serve the people, rather than the people serve the market'
an audio blog from tuesday
A person talking frank. Great how he really stops the interviewer from talking BS, and the interviewer seems to know that he's trying to spout BS when he's stopped. Worth a little listen.
youtube: Jim Rogers: Jim Rogers: FED is using taxpayers money to buy BS maseratis
"The first two banks in America failed,, they (Greenspan & Bernanke) are setting up the failure of the Federal Reserve"
Worth a read
FT: Let Britain’s housing bubble burst
A good article that argues that house prices should be left to fall. However, I am not sure that he is correct in thinking GDP will remain postive. One quote "It is high time the British realised a people cannot become rich by selling ever more expensive houses to one another".
Here we go
Telegraph: Merrill and Citigroup wield axe as 3,500 City jobs set to be cut
Citigroup is preparing to make about 2,400 cuts in its 12,000-strong London office on top of 900 planned redundancies at UBS and a further 400 at Merrill Lynch. Citi's announcement could come as early as today and Merrill is expected to inform UK staff, where 400 of the 4,500 London positions are expected to be cut, on April 28. Who said it wouldn't happen here?
Only 3%?
Telegraph: Inflation to top 3pc, says Bank of England chief economist Charles Bean
Inflation is likely to rise above 3pc later this year as a weak pound exacerbates rising commodity prices and labour costs in China pick up, the Bank of England's chief economist has warned. Charles Bean said that the MPC was "walking a tightrope" between attempting to stimulate growth as the credit crunch bites and allowing inflation to take off. Since August, the pound had fallen as much as it did after it crashed out of the European Exchange Rate Mechanism in 1992, boosting exports (err what exports!) but increasing import costs. Using the traditional economists' rule of thumb that a one percentage point fall in sterling is equivalent to a quarter point cut in interest rates, he said the recent fall was equivalent to a three percentage point cut in interest rates.
RBS plans 12billion rights issue
Telegraph: Royal Bank of Scotland Chief Sir Fred's future on the line
Royal Bank of Scotland is planning a rights issue of up to £12bn to shore up its weakened balance sheet. The move comes after months of speculation that the UK's second biggest bank would have to appeal to shareholders for money. RBS has consistently indicated that it would not have to do a rights issue. RBS has decided to tap shareholders for capital due to worsening sub-prime writedowns and its already fragile tier one position, which makes it the most leveraged of Europe's banks. Goldman Sachs and Merrill Lynch are arranging the rights issue. Analysts estimate that RBS needs to raise £5bn-£12bn to repair its balance sheet and also expect a dividend cut. The move is believed to have been prompted by further sub-prime provisions on top of the £2.4bn already reported.
RBS has consistently indicated that it would not have to do a rights issue.
TELEGRAPH UK: Sir Fred Goodwin's job as chief executive of Royal Bank of Scotland looked under threat last night following revelations that the lender is planning a rights issue of up to £12bn to shore up its weakened balance sheet.
RBS has decided to tap shareholders for capital due to worsening sub-prime writedowns and its already fragile tier one position, which makes it the most leveraged of Europe's banks. Goldman Sachs and Merrill Lynch are arranging the rights issue and RBS wants it fully underwritten.Analysts estimate that RBS needs to raise £5bn-£12bn to repair its balance sheet and also expect a dividend cut.
Of 1,000 men and women polled, 59 per cent said the UK had too many immigrants and almost half - 49 per cent - wanted foreigners to be encouraged to leave.
daily mail: Two-thirds of British residents fear violence as migrant tensions rise
This was up from 12 per cent in 2005. Some 58 per cent said parts of Britain feel like a foreign country.
This was so obvious too....
Yahoo News: More parents struggle to tell children about job losses
Why are people shocked about this?
It was so obvious.........
Yahoo News: Teens turn to thrift as jobs vanish and prices rise
NEW YORK - The souring job market and rising costs of the usual teenage indulgences — a slice of pizza, a drive to the mall, the hottest new jeans — are causing teens to do something they rarely do: be thrifty.
bursting will be good for us
ft: Let Britain’s housing bubble burst
What has happened to British phlegm? Instead of greeting news of falling house prices and tightening lending with aplomb, people shriek that the sky is falling. Steven Crawshaw, chairman of the Council of Mortgage Lenders, warns that it is “a real possibility . . . that net lending in 2008 could reach only half last year’s level unless additional funds become available”. "policymakers should respond only to clear market failures"
Scathing and insightful
Times: Scandal of luring first-time buyers
Gordon Brown is acting immorally by asking for rate cuts that could lead to negative equity. Property prices are nonsensical, exorbitant, unaffordable, immorally inflated by investors and a shortage of available land and exploited by a greedy City. All those buying a property have known this for the past five years at least. Nothing could be more immoral, then, in the current climate, than using government efforts and taxpayers' money to encourage first-time buyers to enter the market, in order to stabilise the dodgy situation that banks and incautious borrowers have got themselves into. How dare a man who has lectured us all ad nauseam about prudence, year after year after year, now use our money to bail out the profligate?
Thursday, April 17, 2008
Rents falling in some cities
ft.com: Buy-to-let sector feels pinch of oversupply
Rents are tumbling on some city centre flats as buy-to-let investors pay the price for oversupply. The news will make uncomfortable reading for investors who bought into the boom in development of buy-to-let flats in these city centres, only to find that capital values and now rental income are falling.
Decade of cheap credit and MEWing ends ...
ThisIsLondon: Council tax rises highest in Kingston
...and only now people start looking at the real increases and whats gone on.
Britain's second biggest bank is to make a plea to the City to try to raise billions of pounds to help shore up its finances, which have been hit by the global credit crisis.
The Telegraph: Royal Bank of Scotland in fresh cash plea
The Royal Bank of Scotland, which owns NatWest, is to launch a rights issue for at least £5 billion. It is the first major British bank to concede that it needs large amounts of extra money and it is expected to trigger a wave of others appealing to shareholders for help. However, the move, disclosed by City sources to The Daily Telegraph is expected to lead to pressure on Sir Fred Goodwin, one of the City's most respected bankers, who may now face calls from RBS shareholders to step aside as chief executive. The move by RBS could lead to pressure on Sir Fred Goodwin to step aside as chief executive.
Jobs to go in the City
Standard: Bloody day in the City: 1,300 jobs axed
"The City bloodbath began today as two financial giants axed 1,300 jobs. Bankers suffering in the credit crunch were also prepared for the figure to double tomorrow. UBS announced it would cut 900 staff at its Liverpool Street headquarters by June and Merrill Lynch said it would shed 4,000 jobs worldwide. Sources said that up to 400 of its 4,500 London staff would go. Employees of Citigroup, the world's biggest bank, are now preparing for the axe as sources said it was likely to lay off 1,000 London staff when its first quarter results are published tomorrow" I feel sorry for those who are losing their jobs but the City bubble could not continue forever
Standard & Poors US home price indice
Standard & Poors US home price indice: Standard & Poor
If there is any justice in the world, it is going to go down like a lead balloon!! First two short paragraphs after the chart sum it up nicely. But I watch on with bated breath for the UK.
Sold, 370k in the backburner and I'm gonna resurect cardboard city on the Southbank!
Banksy: Welcome 2 London, innitt!
From one of the threads, worth a plug!! Credit to 51ck-6-51x.
Update Update Update
guardian.co.uk: The Bank of England mortgage plan
What is the Bank of England planning to do? After intense lobbying by the banking industry, the Bank is drawing up a plan that is intended to make it easier for mortgage lenders to raise money. Why? The authorities have realised that the credit crunch is having an impact on the mortgage market, where loans are being withdrawn or offered at higher rates despite cuts to the official base rate. It is also affecting the amount of lending to small and large businesses which could exacerbate any slowdown in the economy.
TDX report out today - Total UK unsecured debt is £1.3 trillion – more than the total for all of the rest of the EU put together.
Citywire: Personal debt will trigger property collapse
It’s not the same this time round. How many times have we heard that? Mortgage pundits reassure us that with full employment homebuyers won’t get into difficulties and repossessions will be nowhere near the 78,000 a year seen in the property collapse of the early nineties. But while the optimists no doubt take comfort from the fact that UK unemployment fell by 39,000 to 1.61 million in the three months to the end of February, nobody seems to notice the elephant in the room. Just as the regulators had no idea of the extent of banks’ off balance sheet financing – and failed to identify the trigger for the credit crunch which ensued – so everyone is concentrating on the wrong consumer figures.
Oh, I think we could call this a crash.
Los Angeles Times: California freefall: Home prices down 26% in February
"In the San Fernando Valley, losing a home to foreclosure is now almost as common for families as buying a home"
Good stuff. Figures seem to stack up.
The Times: One UK home in 10 'to fall into negative equity'
Morgan Stanley's analysts said: "Our base case is for a 15 per cent fall in nominal prices over two years... our bear case looks for a 25 per cent decline over two years.
ML yet to specify how many jobs will be axed in the City of London.
Guardian: Merrill Lynch to cut 4,000 jobs
Merrill Lynch, the US investment bank at the centre of the sub-prime mortgage crisis, is to axe 4,000 jobs - one in 10 of its workforce, as it continues to count the cost of its involvement in the products at the heart of the credit crunch. The firm, known as the "thundering herd", reported a first quarter loss, after taking an additional $9bn in write-downs for sub-prime mortgages, loans and other risky assets, of $1.96bn (£980m). This contrasts with $2bn of profits in the first quarter of last year. Shares in the bank fell 1.7% to $44.12 in early trading on Wall Street this afternoon.
Last one out please turn off the lights
this is london: Bloody day in the City as 1,300 jobs are axed... and another 1,000 workers could go tomorrow
The cuts are the first confirmation of the scale of the job losses facing the City, estimated this week at 40,000 by JP Morgan – more than one in 10 of all workers.
Vacant Homes in U.K. Prove Speculator Nightmare
Bloomberg.com: Vacant Homes in U.K. Prove Speculator Nightmare as Losses Mount
Bloomberg - Richard Lee spent 5.3 million pounds ($10 million) buying 20 rental homes across the U.K. with just 150,000 pounds of his own money. Today, the properties are worth about 60 percent less and owned by the banks that financed the purchases.
Nothing new, the usual propaganda
LandlordExpert: First time buyers facing eternal renting nightmare
"(psssst - someone tell the press that buy to let is the main beneficiary, not casualty!) Published this week in a report by the charity Shelter, it showed the average first time property price rose from 52,674 pounds to 159,494 pounds over the past decade"
Oversubcripition to money auction
Bloomberg: BOE Received Most Bids in Three Months at Auction
The Bank of England said financial institutions bid for 50 billion pounds ($99 billion) in its weekly auction, the most in three months, as a worsening shortage of credit increased the need for central bank funds. The Bank of England offered 13.7 billion pounds in today's sale, it said in a statement in London. That made the operation more than three times oversubscribed. Total bids were the most since Jan. 10.
ITV Lunchtime News today - HPC fully underway
ITV News Specials: On The Edge: Stories from credit crunch Britain
The credit crunch, rising prices and a falling housing market are pushing tens of thousands to the edge. ITV have a series of reports tracking the lives of families caught up in the financial turmoil described by the International Monetary Fund as “the worst since the great depression “ Todays feature was presented by ITV News Consumer Editor Chris Choi on how the credit crunch is biting - presumably we'll get a re-run on tonights main ITV news bulletins.
London house prices slumped already by 15%
LSE: Hamptons MD: London house prices down 15%
I like the "Free mortgage quote" link at the top of the article; where there's sh1t there's brass eh.
Shout It From The Rooftops
FTAdviser: Rooftop Mortgages to close
And another one bites the dust. Rooftop Mortgages is to withdraw its entire product range at 5pm tomorrow (18 April) in view of winding up the business by the end of July.
Shout It From The Rooftops
FTAdviser: Rooftop Mortgages to close
And another one bites the dust. Rooftop Mortgages is to withdraw its entire product range at 5pm tomorrow (18 April) in view of winding up the business by the end of July.
Shout It From The Rooftops
FTAdviser: Rooftop Mortgages to close
And another one bites the dust. Rooftop Mortgages is to withdraw its entire product range at 5pm tomorrow (18 April) in view of winding up the business by the end of July.
Discount rate dilemma neatly laid out
ConservativeHome: Why the taxpayer will lose on the ... mortgage securities swap scheme
Good logic by Dr Andrew Lilico over at ConHome... If the BoE offers to pay too much for the mortgage crap, they are subsidising the banks at the expense of the taxpayer. If the BoE offers too little, then either a) the banks won't take up the offer, or b) people will see this as a sign that not even the BoE has any confidence in the housing market, thus exacerabting the price crash. It's lose-lose time, folks!
Why Gordon Brown is not fit to be PM
The Times: What not to do in a Crisis
Although this article is from the careers section of the Times it shows very clearly why Gordon Brown is not fit to be Prime Minister. He is guilty of pretty well all of the mistakes its possible to make in dealing with a crisis. These include passing the buck, digging oneself into a hole and burying ones head in the sand.
George Osbourne congratulates GB on his stupidity, but says he'd have done it quicker
BBC News: George Osbourne supports mortgage plan
I didn't quite see all of this this morning, but the basic crux of it was George Osbourne's only criticism of GB/AD's idiotic plan to bail out poor lending and borrowing with taxpayers' money was that he didn't do it sooner. You don't expect in-depth questioning on BBC breakfast TV, but the banality of the interviewing, without the slightest suggestion that there might be anything wrong with swapping junk mortgages for (effectively) cash was unbelievable. Shows how biased the BBC still is towards the property market, and how little difference there is between Labour and the Conservatives. Vince Cable is the only MP I can think of who has any kind of understanding of economics, but I have a feeling that Nick Clegg might be doing his best to undermine that.
Surprise surprise, the housebuilders aren't to be trusted
BBC News: Building Firms Rigged Contracts
The Office of Fair Trading (OFT) has accused 112 construction companies of rigging bids for contracts. It said the firms colluded among themselves while bidding for contracts, leading to customers, such as local authorities, having to pay too much. The regulator added that in a few cases firms entered into agreements whereby the successful tenderer would pay a sum of money to those that lost out. It said 40 firms had admitted price fixing, and 37 had asked for leniency.
This is all so contrived
The Times: Labour peer in savage attack on Gordon Brown
Gordon Brown came under stinging attack from within his own party today when a leading Labour peer described him as weak and indecisive and said that his only purpose in life was "to remind people how good Tony Blair was"........................sounds good but the truth is we are all being played here
UK Tax Payer is now bailing out the whole UK banking sector
Market Oracle: Bank of England Prepares to Ramp Up the Money Printing Presses
"Banking stocks soared on the news, which is not surprising given the fact that the UK Tax payer is now providing the banks with billions in as good as cash securities in exchange for illiquid junk securities. Perhaps Gordon Browns next election winning 'bright idea' will be to make up the difference for all home owners that go into negative equity during 2008 ? "
It is the Debt, Stupid! (That will dictate the direction of the inflation rate).
Market Oracle: US Actual Inflation Trend Heading for Stagflation or Deflation?
The housing bubble postponed the deflationary depression of the Longwave and its burst will usher in the inevitable. The incessant interventions from the Fed and the USG will dampen the severity but they will also prolong the depression by postponing the adjustments that need to take place, especially, 30-50% drop in home prices, nationally, and more in the bubble areas. “Bankers' mischief” (imprudent loans and financing) never fails to bring on economic and financial “catastrophes,” according to Schumpeter. Needless to say, the “bankers' mischief” attained new heights in recent years. One wonders what the Fed and the USG were doing. Isn't it amazing that these things get worse over time in subsequent cycles? Crooks learn from history (how to do it) and the general population doesn't
Adrian Ash from Bullionvault
Market Oracle: 40 Years of Real Interest Rates and, 80 Years of Dow/Gold Ratio
Crude oil, rice, Gold , the Euro, wheat, emerging market bonds, copper...anything that's not stamped with the all-seeing eye of the Dollar looks a great bet once again. The Federal Reserve has seen to that, driving the real returns paid to cash down towards a three-decade low.
Oil prices have surged to almost $115 a barrel
The Telegraph: Oil surges as investors hunt an 'anti-dollar'
"Hot money funds are also playing a role, trading oil as a sort of "anti-dollar". Crude is moving in reverse lockstep with the greenback, pushing ever higher (with double or triple leverage) as the dollar reaches fresh lows against the euro. Surging oil prices are in turn stoking inflation, causing investors to bet yet more on oil futures as an inflation hedge. "This has entered a vicious spiral," Dr Lasserre said"
More on the LIBOR 'fiddling' by banks.
Bloomberg: Money-Market Rates May Rise on Threat to Ban Banks From Libor
Money-market rates may rise after the British Bankers' Association threatened to ban members that deliberately understate their borrowing costs. Participants have complained that banks may be submitting inaccurate information amid the global credit squeeze, Angela Knight, chief executive officer of the London-based association, said yesterday. The BBA will exclude banks that give misleading quotes and plans to speed up a review of the daily ``fixing'' process by which borrowing costs are determined, it said.
Desperate!
BBC News: First-time buyer survey region-by-region
I couldn't believe it when I saw this on today's news page. Prices have started falling and the Brown Bullsh1t Corporation write an article about how they've risen by about 200% between 1997 and 2007. Aren't they supposed to be reporting today's news. It's 2008 guys!
Gordon is naive and desperate: the banks are doing the right thing
Times Online: For once banks aren't being greedy
Camilla Cavendish in the Times says that the attitude of the banks is correct and it's Gordon Brown who has it all wrong. Banks are trying to recapitalise their balance sheets by raising interest rates on loans and that's exactly what they should be doing as they were overstretched on a weak capital base during the lending boom. Now is the time for them to pull back and act responsibly. GB telling them to do otherwise is just naive desperation.
Brown's attempt at alchemy
Telegraph: Gordon Brown: Banks must admit the truth
Important article this. The idea is to turn the base paper of mortgage securities into gilts. But - a big but - the taxpayer must not take on the risk. How they might achieve this I am not sure. If the banks know that all the others still carry this particular can, will it make any difference to confidence? Lots of other interesting snippets - Libor underestimates interbank lending rate; BTL lenders pulling our (Hurray); Halifax ups its 2 yr fix.... And our favourite politician quoted again.
BTL Market 'Unraveling'
Bloomberg: Vacant Homes in U.K. Prove Speculator Nightmare as Losses Mount
Richard Lee spent 5.3 million pounds ($10 million) buying 20 rental homes across the U.K. with just 150,000 pounds of his own money. Today, the properties are worth about 60 percent less and owned by the banks that financed the purchases. // Buy-to-let investors who were behind on their mortgages by three months or more increased by 25 percent to 7,584 in the fourth quarter, according to the London-based Council of Mortgage Lenders. Repossessions rose 26 percent to 1,247.
Interesting article from yesterday's Times - worth a second L@@K
The Times: US housing market faces record number of defaults
Printed version was headed ' Las vega leads losers in US housing market slump'... 234,685 American homes entered foreclosure in March, a 57% jump, representing 1 in 538 households....
corruption and greed in the building trade.....no way!!!
timesonline: OFT names 112 building firms in bid-rigging scandal
How long until the serious fraud office start to name solicitors and EA's as well????? This makes those explanations of high demand, limited supply etc total and utter B*ll*cks
Blast from the past: 2000
BBC News: Farewell to housing boom and bust
A clutch of recent data suggests the UK property boom is cooling. One well-known economist believes that house buyers have now seen the last of rapid rises and falls in prices. Roger Bootle, of Deloitte & Touche, says house prices will now rise 4-5% annually, slightly higher than the general level of prices. "The end of the boom and bust in the housing market will help to bring greater stability in the economy as a whole. After all the ups and downs of the past 25 years that would be a major prize to have won," he added. Merrill Lynch's Michael Taylor said: "The lessons of the housing market boom and bust do appear to have been learnt ... double digit house price inflation does appear to be in the past."
Is LIBOR accurate? - An interesting and significant question. GB will do everything humanly possible to influence their findings and not let LIBOR increase.
Telegraph: Libor credibility questioned as credit crunch deepens
The British Bankers' Association has brought forward a review into how it sets the pivotal London Interbank Offered Rate amid mounting concerns over the credibility of the measurement. The association yesterday revealed it was re-assessing how it calculates Libor - a benchmark measurement that filters through the economy, affecting mortgage and other interest rates across the lending system.